<PAGE> 1
UNIVERSAL ANNUITY
ANNUAL REPORTS
DECEMBER 31, 1999
THE TRAVELERS TIMED GROWTH AND INCOME
STOCK ACCOUNT FOR VARIABLE ANNUITIES
THE TRAVELERS TIMED SHORT-TERM
BOND ACCOUNT FOR VARIABLE ANNUITIES
THE TRAVELERS TIMED AGGRESSIVE
STOCK ACCOUNT FOR VARIABLE ANNUITIES
[ARTWORK]
[TRAVELERS/LIFE & ANNUITY LOGO]
The Travelers Insurance Company
The Travelers Life and Annuity Company
One Tower Square
Hartford, CT 06183
<PAGE> 2
[TIMCO LOGO]
The Travelers Investment Management Company ("TIMCO") provides equity management
and advisory services for the following Travelers Variable Products Separate
Accounts contained in this report: The Travelers Timed Growth and Income Stock
Account for Variable Annuities, The Travelers Timed Short-Term Bond Account for
Variable Annuities and The Travelers Timed Aggressive Stock Account for Variable
Annuities. The Travelers Investment Management Company ("TIMCO") provides equity
management and advisory services for the following Travelers Variable Products
Separate Accounts contained in this report: The Travelers Timed Growth and
Income Stock Account for Variable Annuities, The Travelers Timed Short-Term Bond
Account for Variable Annuities and The Travelers Timed Aggressive Stock Account
for Variable Annuities.
<PAGE> 3
[TRAVELERS/LIFE & ANNUITY LOGO]
THE TRAVELERS VARIABLE PRODUCT SEPARATE ACCOUNTS
INVESTMENT ADVISORY COMMENTARY AS OF DECEMBER 31, 1999
MARKET AND ECONOMIC OVERVIEW
The year began on a volatile note for global financial markets as a potential
new threat emerged in Latin America. The devaluation of Brazil's currency, the
Real, affected many U.S. corporations and investors with exposure to the Latin
American markets and negatively impacted the performance of the U.S. stock
market.
Concerns regarding the future direction of interest rates were prevalent
throughout 1999. Despite low inflation, the Federal Reserve Board ("Fed") opted
to raise interest rates three times during the year, effectively "taking back"
the interest-rate cuts imposed following the global economic crisis in 1998. The
Fed's change in monetary policy did not significantly deter the remarkable
growth of the U.S. economy. In fact, throughout the year, the U.S. Gross
Domestic Product ("GDP"), which represents the total output of goods and
services, continued to exceed expectations.
Despite the rise in interest rates, the U.S. stock market continued its stellar
performance. Evidence of stronger-than-expected economic growth prompted hopes
of a meaningful earnings recovery and at the same time, triggered concerns
regarding future rate hikes. These factors led to a rally in small cap and value
stocks. (Value stocks are securities of companies that are believed to be
undervalued in the market.) However, the trend of investing in small cap and
value stocks soon changed, as many investors took the view that a proactive
monetary policy by the Fed would preempt inflationary pressures.
Nevertheless, the small cap sector, as measured by the Russell 2000 Index,*
which returned 21.26% for the year, outperformed the large cap sector, as
measured by the Standard & Poor's 500 Index** ("S&P 500") which returned 21.03%.
As a result of investors' focus on the direction of interest rates, the stock
and bond markets were characterized by higher levels of volatility. Investors
became increasingly concerned, especially toward the end of the year, about not
only the direction of interest rates but also about future earnings growth and
the high market valuations of many stocks. In addition, the strength of the
overseas markets attracted U.S. capital, which had a somewhat negative impact on
the performance of the U.S. stock market through the third quarter of 1999.
By the end of the year however, the U.S. stock market rose sharply largely due
to the incredible performance of the technology sector. Y2K concerns decreased,
with the market's assessment of the risks associated with potential Year 2000
glitches proving to be correct.
The bond markets did not react positively to the actions of the Fed in 1999 and
experienced their worst year since 1994. The overall bond market recorded losses
in 1999 in response to the Fed's interest rate increases and concerns regarding
inflation. Bond market losses increased with the length of maturities. The yield
on the bellwether 30-year government bond increased 1.39 percentage points in
1999 to 6.48%. At the end of 1998, the 30-year Treasury Bond yielded 5.09%.
-1-
<PAGE> 4
In our view, the strength of the U.S. economy should continue, prompting the Fed
to raise interest rates in 2000.+ In addition, overseas economies, many of which
are in the early stages of recovery, should continue to expand. This global
economic recovery should benefit the manufacturing sector of the U.S. market in
2000.
We predict that earnings should continue double-digit growth through the first
quarter of 2000. It is our belief that the recent performance of technology and
telecommunications stocks is not sustainable. However, we are confident that
most stocks are appropriately valued. Over the longer term, we think that the
fundamentals for both stocks and bonds remains favorable.
*The Russell 2000 measures the performance of the 2,000 smallest companies in
the Russell 3000 Index, which represents approximately 8% of the total market
capitalization of the Russell 3000 Index.
**The S&P 500 Index is market capitalization-weighted measure of 500 widely held
common stocks.
+On February 2, 2000, after this letter was written, the Federal Reserve Board
raised interest rates 0.25% to 5.25%.
DAVID A. TYSON, CFA, PRESIDENT & CHIEF INVESTMENT OFFICER, TRAVELERS ASSET
MANAGEMENT INTERNATIONAL CORPORATION
SANDIP A. BHAGAT, CFA, PRESIDENT & CHIEF INVESTMENT OFFICER, THE TRAVELERS
INVESTMENT MANAGEMENT COMPANY
-2-
<PAGE> 5
TABLE OF CONTENTS
PAGE
- --------------------------------------------------------------------------------
THE TRAVELERS TIMED GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES........................................................ 4
THE TRAVELERS TIMED SHORT-TERM BOND ACCOUNT FOR VARIABLE ANNUITIES............18
THE TRAVELERS TIMED AGGRESSIVE STOCK ACCOUNT FOR VARIABLE ANNUITIES...........27
-3-
<PAGE> 6
THE TRAVELERS
TIMED GROWTH AND INCOME
STOCK ACCOUNT
FOR VARIABLE ANNUITIES
The Travelers Timed Growth and Income Stock Account for Variable Annuities
("Account TGIS") is managed by the Travelers Investment Management Company
("TIMCO"). TIMCO manages Account TGIS to provide diversified exposure to the
large-company segment of the U.S. equity market, while maintaining a highly
marketable portfolio of common stocks and related financial instruments in order
to accommodate cash flows associated with market-timing moves. Stock selection
is based on a quantitative screening process favoring companies that achieve
earnings growth above consensus expectations and offer attractive relative
value. In order to achieve consistent relative performance, we manage Account
TGIS to mirror the overall risk, sector weightings and growth/value style
characteristics of the Standard & Poor's 500 Stock Index ("S&P 500"). The S&P
500 is a value-weighted equity index comprised primarily of large-company
stocks.
For the twelve months ending December 31, 1999, Account TGIS achieved a net
return of 20.7% well ahead of the 13.1% average return for variable annuity
stock accounts in the Lipper Growth & Income Category. A discussion of portfolio
performance in 1999 is presented next with a closer look at the third and fourth
quarters.
The Technology sector was red-hot in 1999 and growth stocks handily outperformed
value stocks. Our stock selection was most favorable in the Technology, Consumer
Discretionary and Utilities sectors for most of the year and slightly adverse in
the other sectors.
During the third quarter, stock selection was favorable in every sector except
Producer Durables and Materials and Processing. The Technology and Consumer
Discretionary sectors provided the best stock selection.
In the Technology sector, our emphasis on good earnings prospects at reasonable
valuations lead to an overweight position in Sun Microsystems, Inc., which
gained from a steady stream of upward estimate revisions. The quarter also saw
strong rallies in Oracle Corp. and QUALCOMM, Inc., which benefited the
portfolio.
In the Consumer Discretionary sector, performance was aided by underweights in
Avon, Gillette Co. and Sears. Avon and Gillette Co. frustrated investors with
lower than expected revenue growth. As a result, Avon was down 55.2% and
Gillette lost 17.2% for the quarter. Sears announced in early September that it
would not meet third quarter earnings and suffered a 29.6% decline for the
quarter.
During the fourth quarter, stock selection was favorable in most sectors and
particularly positive in the Technology, Utilities and Consumer Discretionary
sectors.
In the Technology sector, most of our stock picks performed well. Our positions
in Sun Microsystems, Inc. and Oracle Corp. as a result of upward earnings
revisions paid off as investors rewarded those stocks with higher
price-to-earnings multiple. Semiconductor equipment stocks such as Applied
Materials, Inc. and Teradyne, Inc., surged in expectation of a revival in the
capital spending cycle. We benefited from adding QUALCOMM, Inc. and Yahoo, Inc.,
to our portfolios in advance of their inclusion in the S&P 500 index. Our pure
play on the Internet, America Online, Inc., enjoyed another strong quarter and,
finally, we avoided two of the bigger disappointments in the sector, Xerox and
Unisys.
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<PAGE> 7
In the Utilities sector, our emphasis on faster growing telecommunications
companies at the expense of electric utilities and gas distribution companies
continued to help performance. Our big winners here included Nextel
Communications, Inc. and Sprint Corp.-PCS Group. We also benefited from our
position in AES Corp., a global leader in electric power generation, which moved
up in price as it completed a successful Y2K rollover.
In the Consumer Discretionary sector, a number of our positions in the Media and
Broadcasting groups performed well. New York Times Co. and Gannett Company,
Inc., outperformed the Newspaper group while AMFM, Inc., and Times Mirror Co.
enjoyed the benefits of a strong U.S. economy. Kimberly Clark Corp. outperformed
the Household Products group while Cendant Corp., a consumer services company,
rose sharply on the heels of a $400 million investment by Liberty Media. Sears,
J.C. Penney and Tandy, which we did not own, continued to go down and,
therefore, contributed to relative performance.
Strong earnings growth in the third and fourth quarters suggests that the
earnings recovery of 1999 is well underway. However, the constant presence of
the Federal Reserve Board and the current love affair with Technology stocks may
prevent a broad-based market rally from materializing in the near future. In our
disciplined approach to stock selection, we continue to screen our research
universe of over 1,000 large cap securities for companies that offer improving
earnings fundamentals at discounted stock valuations.
PORTFOLIO MANAGER: SANDIP A. BHAGAT, CFA
[TIMCO LOGO]
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<PAGE> 8
THE TRAVELERS TIMED GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Investment securities, at market value (cost $123,792,165) .... $140,405,268
Cash .......................................................... 552
Receivables:
Dividends ................................................... 85,667
Investment securities sold .................................. 4,531
Purchase payments and transfers from other Travelers accounts 35,566
Variation on futures margin ................................. 114,750
Other assets .................................................. 2,607
--------------
Total Assets .................................................. 140,648,941
--------------
LIABILITIES:
Payables:
Investment securities purchased ............................. 167,568
Contract surrenders and transfers to other Travelers accounts 66,069
Investment management and advisory fees ..................... 11,106
Market timing fees .......................................... 42,940
Insurance charges ........................................... 42,939
Accrued liabilities ........................................... 4,197
--------------
Total Liabilities ............................................. 334,819
--------------
NET ASSETS:
(Applicable to 26,009,839 units outstanding at $5.394 per unit) $140,314,122
==============
</TABLE>
See Notes to Financial Statements
-6-
<PAGE> 9
THE TRAVELERS TIMED GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C> <C>
Dividends ................................................. $ 1,324,972
Interest .................................................. 676,351
-------------
Total Income .............................................. $ 2,001,323
EXPENSES:
Market timing fees ........................................ 1,539,811
Investment management and advisory fees ................... 398,256
Insurance charges ......................................... 1,539,811
-------------
Total expenses ............................................ 3,477,878
-------------
Net investment loss ....................................... (1,476,555)
-------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED GAIN (LOSS)
ON INVESTMENT SECURITIES:
Realized gain (loss) from investment security transactions:
Proceeds from investment securities sold .................. 110,093,392
Cost of investment securities sold ........................ 87,803,879
-------------
Net realized gain (loss) .................................. 22,289,513
Change in unrealized gain (loss) on investment securities:
Unrealized gain at December 31, 1998 ...................... 17,656,288
Unrealized gain at December 31, 1999 ...................... 16,613,103
-------------
Net change in unrealized gain (loss) for the year ......... (1,043,185)
-------------
Net realized gain and change in unrealized gain (loss) .... 21,246,328
-------------
Net increase in net assets resulting from operations ...... $ 19,769,773
=============
</TABLE>
See Notes to Financial Statements
-7-
<PAGE> 10
THE TRAVELERS TIMED GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
------------- -------------
OPERATIONS:
<S> <C> <C>
Net investment loss .................................................... $ (1,476,555) $ (1,658,997)
Net realized gain (loss) from investment security transactions ......... 22,289,513 60,348,770
Net change in unrealized gain (loss) on investment securities .......... (1,043,185) (31,625,672)
------------- -------------
Net increase in net assets resulting from operations ................... 19,769,773 27,064,101
------------- -------------
UNIT TRANSACTIONS:
Participant purchase payments
(applicable to 1,021,824 and 1,393,179 units, respectively) ............ 4,927,907 5,425,118
Participant transfers from other Travelers accounts
(applicable to 981,870 and 1,384,558 units, respectively) .............. 4,757,800 5,367,961
Market timing transfers from other Travelers timed accounts
(applicable to 18,884,484 and 10,452,244 units, respectively) .......... 94,008,240 44,617,650
Administrative charges
(applicable to 25,451 and 31,443 units, respectively) .................. (128,020) (133,088)
Contract surrenders
(applicable to 2,395,305 and 3,370,312 units, respectively) ............ (11,528,046) (13,144,096)
Participant transfers to other Travelers accounts
(applicable to 1,441,585 and 2,139,672 units, respectively) ............ (7,014,338) (8,225,358)
Market timing transfers to other Travelers timed accounts
(applicable to 16,174,913 and 42,726,533 units, respectively) .......... (76,871,942) (160,776,295)
Other payments to participants
(applicable to 33,017 and 82,003 units, respectively) .................. (159,648) (319,237)
------------- -------------
Net increase (decrease) in net assets resulting from unit transactions.. 7,991,953 (127,187,345)
------------- -------------
Net increase (decrease) in net assets................................... 27,761,726 (100,123,244)
NET ASSETS:
Beginning of year....................................................... 112,552,396 212,675,640
------------- -------------
End of year ............................................................ $ 140,314,122 $ 112,552,396
============= =============
</TABLE>
See Notes to Financial Statements
-8-
<PAGE> 11
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Travelers Timed Growth and Income Stock Account for Variable Annuities
("Account TGIS") is a separate account of The Travelers Insurance Company ("The
Travelers"), an indirect wholly owned subsidiary of Citigroup Inc., and is
available for funding certain variable annuity contracts issued by The
Travelers. Account TGIS is registered under the Investment Company Act of 1940,
as amended, as a diversified, open-end management investment company.
Participants in Account TGIS have entered into market timing service agreements
with an affiliate of The Travelers, which provide for the transfer of
participants' funds to certain other timed accounts of The Travelers, at the
discretion of the market timer.
The following is a summary of significant accounting policies consistently
followed by Account TGIS in the preparation of its financial statements.
SECURITY VALUATION. Investments in securities traded on a national securities
exchange are valued at the 4:00 p.m. Eastern Standard Time price of the New York
Stock Exchange on the last business day of the year; securities traded on the
over-the-counter market and listed securities with no reported sales are valued
at the mean between the last-reported bid and asked prices or on the basis of
quotations received from a reputable broker or other recognized source.
Short-term investments for which a quoted market price is available are valued
at market. Short-term investments for which there is no reliable quoted market
price are valued at amortized cost which approximates market.
SECURITY TRANSACTIONS. Security transactions are accounted for on the trade
date. Dividend income is recorded on the ex-dividend date. Interest income is
recorded on the accrual basis. Premiums and discounts are amortized to interest
income utilizing the constant yield method.
FUTURES CONTRACTS. Account TGIS may use stock index futures contracts, and may
also use interest rate futures contracts, as a substitute for the purchase or
sale of individual securities. When Account TGIS enters into a futures contract,
it agrees to buy or sell a specified index of stocks or debt securities at a
future time for a fixed price, unless the contract is closed prior to
expiration. Account TGIS is obligated to deposit with a broker an "initial
margin" equivalent to a percentage of the face, or notional value of the
contract.
It is Account TGIS's practice to hold cash and cash equivalents in an amount at
least equal to the notional value of outstanding purchased futures contracts,
less the initial margin. Cash and cash equivalents include cash on hand,
securities segregated under federal and brokerage regulations, and short-term
highly liquid investments with maturities generally three months or less when
purchased. Generally, futures contracts are closed prior to expiration.
Futures contracts purchased by Account TGIS are priced and settled daily;
accordingly, changes in daily prices are recorded as realized gains or losses
and no asset is recorded in the Statement of Investments. However, when Account
TGIS holds open futures contracts, it assumes a market risk generally equivalent
to the underlying market risk of change in the value of the specified indexes or
debt securities associated with the futures contract.
OPTIONS. Account TGIS may purchase index or individual equity put or call
options, thereby obtaining the right to sell or buy a fixed number of shares of
the underlying asset at the stated price on or before the stated expiration
date. Account TGIS may sell the options before expiration. Options held by
Account TGIS are listed on either national securities exchanges or on
over-the-counter markets and are short-term contracts with a duration of less
than nine months. The market value of the options will be based on the 4:00 p.m.
Eastern Standard Time price of the New York Stock Exchange, or in the absence of
such price, the latest bid quotation.
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<PAGE> 12
NOTES TO FINANCIAL STATEMENTS - CONTINUED
REPURCHASE AGREEMENTS. When Account TGIS enters into a repurchase agreement (a
purchase of securities whereby the seller agrees to repurchase the securities at
a mutually agreed upon date and price), the repurchase price of the securities
will generally equal the amount paid by Account TGIS plus a negotiated interest
amount. The seller under the repurchase agreement will be required to provide to
Account TGIS securities (collateral) whose market value, including accrued
interest, will be at least equal to 102% of the repurchase price. Account TGIS
monitors the value of collateral on a daily basis. Repurchase agreements will be
limited to transactions with national banks and reporting broker dealers
believed to present minimal credit risks. Account TGIS's custodian will take
actual or constructive receipt of all securities underlying repurchase
agreements until such agreements expire.
FEDERAL INCOME TAXES. The operations of Account TGIS 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 the existing federal income tax law no taxes are payable on
the investment income and capital gains of Account TGIS. Account TGIS 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 year. Actual results could differ from those estimates.
2. INVESTMENTS
The aggregate costs of purchases and proceeds from sales of investments (other
than short-term securities), were $50,474,136 and $85,832,747, respectively; the
cost of purchases and proceeds from sales of direct and indirect U.S. government
securities were $16,081,138 and $2,400,000, respectively, for the year ended
December 31, 1999. Realized gains and losses from investment security
transactions are reported on an identified cost basis.
Account TGIS placed a portion of its security transactions with brokerage firms
which are affiliates of The Travelers. The commissions paid to these affiliated
firms were $6,389 and $16,676 for the years ended December 31, 1999 and 1998,
respectively.
At December 31, 1999, Account TGIS held 135 open S&P 500 Stock Index futures
contracts expiring in March, 2000. The underlying face value, or notional value,
of these contracts at December 31, 1999 amounted to $50,091,750. In connection
with these contracts, short-term investments with a par value of $3,025,000 had
been pledged as margin deposits.
Net realized gains resulting from futures contracts were $1,999,495 and
$2,707,685 for the years ended December 31, 1999 and 1998, respectively. These
gains are included in the net realized gain from investment security
transactions on both the Statement of Operations and the Statement of Changes in
Net Assets. The cash settlement for December 31, 1999 is shown on the Statement
of Assets and Liabilities as a receivable for variation on futures margin.
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<PAGE> 13
NOTES TO FINANCIAL STATEMENTS - CONTINUED
3. CONTRACT CHARGES
Investment management and advisory fees are calculated daily at an annual rate
of 0.3233% of Account TGIS's average net assets. These fees are paid to The
Travelers Investment Management Company, an indirect wholly owned subsidiary of
Citigroup Inc.
A market timing fee equivalent on an annual basis to 1.25% of the average net
assets of Account TGIS is deducted for market timing services. The Travelers
deducts the fee daily and, in turn, pays the fee to Copeland Financial Services,
Inc., a registered investment adviser and an affiliate of The Travelers which
provides market timing services to participants in Account TGIS.
Insurance charges are paid for the mortality and expense risks assumed by The
Travelers. Each business day, The Travelers deducts a mortality and expense risk
charge which is reflected in the calculation of accumulation unit values. This
charge equals, on an annual basis, 1.25%. Additionally, for contracts in the
accumulation phase, a semi-annual charge of $15 (prorated for partial years) is
deducted from participant account balances and paid to The Travelers to cover
administrative charges.
No sales charge is deducted from participant purchase payments when they are
received. However, The Travelers generally assesses a 5% contingent deferred
sales charge if a participant's purchase payment is surrendered within five
years of its payment date. Contract surrender payments include $55,337 and
$57,912 of contingent deferred sales charges for the years ended December 31,
1999 and 1998, respectively.
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<PAGE> 14
NOTES TO FINANCIAL STATEMENTS - CONTINUED
4. SUPPLEMENTARY INFORMATION
(Selected data for a unit outstanding throughout each year.)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
--------------------------------
1999 1998 1997 1996 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
SELECTED PER UNIT DATA:
Total investment income ....................................... $ .076 $ .064 $ .075 $ .061 $ .083
Operating expenses ............................................ .136 .110 .090 .069 .057
--------- --------- --------- --------- ----------
Net investment income (loss) .................................. (.060) (.046) (.015) (.008) .026
Unit value at beginning of year ............................... 4.468 3.526 2.717 2.263 1.695
Net realized and change in unrealized gains ................... .986 .988 .824 .462 .542
--------- --------- --------- --------- ----------
Unit value at end of year ..................................... $ 5.394 $ 4.468 $ 3.526 $ 2.717 $ 2.263
========= ========= ========= ========= ==========
SIGNIFICANT RATIOS AND ADDITIONAL DATA:
Net increase in unit value .................................... $ .93 $ .94 $ .81 $ .45 $ .57
Ratio of operating expenses to average net assets* ............ 2.82% 2.82% 2.82% 2.82% 2.82%
Ratio of net investment income (loss) to average net assets*... (1.25)% (1.16)% (.45)% (.34)% 1.37%
Number of units outstanding at end of year (thousands) ........ 26,010 25,192 60,312 68,111 105,044
Portfolio turnover rate ....................................... 51% 81% 63% 81% 79%
</TABLE>
* Annualized
5. SUBSEQUENT EVENT
On February 1, 2000, $24,624,617 of the net assets of The Travelers Timed Growth
and Income Stock Account for Variable Annuities were transferred to The
Travelers Timed Short - Term Bond Account for Variable Annuities, as a result of
a transfer order made by a market timer on behalf of subscribing participants.
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<PAGE> 15
THE TRAVELERS TIMED GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES
STATEMENT OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
NO. OF MARKET
SHARES VALUE
----------------- -----------------
<S> <C> <C>
COMMON STOCKS (63.9%)
AEROSPACE (0.4%)
Boeing Co. 9,500 $ 394,844
General Dynamics Corp. 2,600 137,150
-------------------
531,994
-------------------
AIRLINES (0.1%)
AMR Corp. (A) 860 57,620
Delta Airlines, Inc. 2,800 139,475
-------------------
197,095
-------------------
AUTOMOTIVE (0.9%)
Ford Motor Co. 8,100 432,844
General Motors Corp. 6,300 457,931
Lear Corporation (A) 4,200 134,400
Navistar International Corp. (A) 4,100 194,238
-------------------
1,219,413
-------------------
BANKING (3.8%)
AmSouth Bancorporation 11,450 221,128
BankAmerica Corp. 10,803 542,176
Bank of New York 8,100 324,000
Bank One Corp. 10,472 335,758
Capital One Financial Corp. 4,100 197,569
Chase Manhattan Corp. 8,148 632,998
Comerica, Inc. 2,100 98,044
Fifth Third Bancorp. 2,100 154,022
First Union Corp. 10,100 331,406
Firstar Corp. 9,200 194,350
FleetBoston Financial 9,674 336,776
J.P. Morgan & Company 1,200 151,950
MBNA Corp. 11,600 316,100
National City Corp. 6,500 153,969
SouthTrust Corp. 5,000 188,906
State Street Corp. 2,100 153,431
Summit Bancorp. 3,700 113,312
SunTrust Banks, Inc. 3,200 220,200
Washington Mutual, Inc. 6,150 159,900
Wells Fargo & Co. 12,200 493,337
-------------------
5,319,332
-------------------
BEVERAGE (1.2%)
Anheuser-Busch Cos. 5,300 375,638
Coca-Cola Co. 16,200 943,650
PepsiCo, Inc. 10,100 356,025
-------------------
1,675,313
-------------------
BROKERAGE (1.5%)
Charles Schwab Corp. 6,200 237,925
Lehman Brothers Holdings, Inc. 4,600 389,563
Merrill Lynch & Co. 6,200 517,700
Morgan Stanley Dean Witter & Co. 7,040 1,004,960
-------------------
2,150,148
-------------------
BUILDING MATERIALS (0.1%)
Masco Corp. 6,200 157,325
-------------------
CAPITAL GOODS (0.7%)
Applied Materials, Inc. (A) 4,200 531,956
Nucor Corp. 1,400 76,738
Tellabs, Inc. (A) 2,000 128,313
TRW, Inc. 4,000 207,750
-------------------
944,757
-------------------
CHEMICALS (0.9%)
Dow Chemical Co. 2,100 280,612
E.I. Dupont de Nemours & Co. 8,114 534,510
Monsanto Co. 6,400 228,000
Praxair, Inc. 1,300 65,406
Rohm & Haas Co. 3,700 150,544
-------------------
1,259,072
-------------------
CONGLOMERATES (3.9%)
Emerson Electric Co. 2,100 120,487
General Electric Co. 23,700 3,667,575
Honeywell, Inc. 7,987 460,750
Minnesota Mining &
Manufacturing Co. 1,900 185,962
Tyco International Ltd. 20,618 801,525
United Technologies Corp. 3,300 214,500
-------------------
5,450,799
-------------------
CONSTRUCTION MACHINE (0.3%)
Briggs & Stratton Corp. 3,400 182,325
Caterpillar, Inc. 1,800 84,713
Ingersoll-Rand Co. 3,300 181,706
-------------------
448,744
-------------------
CONSUMER (1.7%)
Black & Decker Corp. 1,100 57,475
Clorox Co. 3,800 191,425
Colgate-Palmolive Co. 3,100 201,500
Eastman Kodak Co. 2,100 139,125
Gillette Co. 4,878 200,913
Kimberly Clark Corp. 5,120 334,080
Maytag Corp. 2,600 124,800
Pall Corp. 6,200 133,688
Procter & Gamble Co. 7,400 810,762
Unilever N.V. 3,114 169,518
-------------------
2,363,286
-------------------
DEFENSE (0.3%)
Lockheed Martin Corp. 13,000 284,375
Raytheon Co. 3,200 85,000
-------------------
369,375
-------------------
ENTERTAINMENT (0.9%)
Carnival Corp. 4,100 196,031
Seagram Co. Ltd. 5,900 265,131
Viacom, Inc. (A) 3,450 208,509
Walt Disney Co. 20,523 600,298
-------------------
1,269,969
-------------------
FINANCE (1.1%)
American Express Co. 4,900 814,625
Countrywide Credit Industries, Inc. 3,500 88,375
Household International 7,000 260,750
Providian Financial Corp. 3,200 291,400
-------------------
1,455,150
-------------------
</TABLE>
-13-
<PAGE> 16
STATEMENT OF INVESTMENTS - CONTINUED
<TABLE>
<CAPTION>
NO. OF MARKET
SHARES VALUE
----------------- -----------------
<S> <C> <C>
FOOD (0.8%)
General Mills, Inc. 5,600 $ 200,200
H.J. Heinz Co. 3,900 155,269
Kellogg Co. 4,600 141,737
Sara Lee Corp. 9,200 202,975
Systemsco Corp. 6,400 253,200
Tricon Global Restaurants (A) 2,700 104,287
-------------------
1,057,668
-------------------
HEALTHCARE (0.5%)
Abbott Laboratories 7,800 283,237
Cardinal Health, Inc. 2,700 129,263
Columbia/HCA Healthcare Corp. 9,100 266,744
Wellpoint Health Networks Inc. (A) 1,200 79,125
-------------------
758,369
-------------------
INSURANCE (1.9%)
Aetna, Inc. 2,400 133,950
Allstate Corp. 10,876 261,024
Ambac Financial Group, Inc. 2,700 140,906
American General Corp. 1,900 144,162
American International Group, Inc. 12,168 1,315,665
ChoicePoint, Inc. (A) 620 25,652
Everest Reinsurance Holdings 2,700 60,244
Hartford Financial Services Group 2,800 132,650
Jefferson Pilot Corp. 3,100 211,575
MBIA, Inc. 3,400 179,563
20th Century Industries 3,900 75,319
-------------------
2,680,710
-------------------
INTEGRATED ENERGY (3.1%)
Apache Corp. 3,200 118,200
Atlantic Richfield Co. 3,000 259,500
Chevron Corp. 4,700 407,138
Conoco, Inc. 4,798 119,350
Exxon Mobil Corp. 24,960 2,010,840
Kerr Mcgee Corp. 4,200 260,400
Royal Dutch Petroleum Co. 14,700 888,431
Texaco, Inc. 3,900 211,819
-------------------
4,275,678
-------------------
MEDIA (2.1%)
AMFM, Inc. (A) 2,300 179,975
CBS Corp. (A) 5,600 358,050
Clear Channel
Communications, Inc. (A) 2,400 214,200
Comcast Corp. 5,400 272,869
Gannett Company, Inc. 3,400 277,313
Interpublic Group Companies, Inc. 4,400 253,825
Meredith Corp. 3,500 145,906
New York Times Co. 5,000 245,625
Time Warner, Inc. 10,500 760,594
Times Mirror Co. 2,800 187,600
-------------------
2,895,957
-------------------
METALS (0.5%)
Alcoa, Inc. 3,924 $ 325,692
Barrick Gold Corp. 6,100 107,894
Phelps Dodge Corp. 2,100 140,962
W.R. Grace & Co. (A) 9,500 131,813
-------------------
706,361
-------------------
NATURAL GAS PIPELINE (0.4%)
El Paso Energy Corp. 2,200 85,388
Enron Corp. 6,500 288,437
Williams Cos. 4,000 122,250
-------------------
496,075
-------------------
OIL FIELD (0.3%)
Baker Hughes Inc. 2,700 56,869
Halliburton Co. 3,100 124,775
Schlumberger Ltd. 3,800 213,750
-------------------
395,394
-------------------
PAPER (0.4%)
Georgia-Pacific Group 4,100 208,075
International Paper Co. 4,100 231,394
Mead Corp. 2,590 112,503
Weyerhaeuser Co. 900 64,631
-------------------
616,603
-------------------
PHARMACEUTICALS (4.6%)
Allergan, Inc. 5,400 268,650
American Home Products Corp. 6,800 268,175
Amgen, Inc. (A) 10,600 636,332
Baxter International, Inc. 5,200 326,625
Bristol-Myers Squibb Co. 12,200 783,087
Eli Lilly & Co. 5,900 392,350
Johnson & Johnson 11,600 1,080,250
Merck & Co, Inc. 16,800 1,126,650
Pfizer, Inc. 22,580 732,439
Pharmacia & Upjohn, Inc. 1,800 81,000
Schering-Plough Corp. 6,900 291,094
Warner-Lambert Co. 5,500 450,656
-------------------
6,437,308
-------------------
RAILROADS (0.1%)
Union Pacific Corp. 3,000 130,875
-------------------
</TABLE>
-14-
<PAGE> 17
STATEMENT OF INVESTMENTS - CONTINUED
<TABLE>
<CAPTION>
NO. OF MARKET
SHARES VALUE
----------------- -----------------
<S> <C> <C>
REFINING (0.1%)
Tosco Corp. 2,300 $ 62,531
-------------------
RETAILERS (4.0%)
Bed Bath & Beyond, Inc. (A) 4,200 145,556
Circuit City Stores, Inc. 3,900 175,744
Costco Wholesale Corp. (A) 2,700 246,291
CVS Corp. 5,300 211,669
Dayton Hudson Corp. 5,300 389,219
Federated Department Stores, Inc.(A) 4,600 232,587
Gap Inc. 4,612 212,152
Home Depot, Inc. 16,650 1,141,566
Lowe's Cos., Inc. 4,200 250,950
McDonalds Corp. 9,200 370,875
TJX Cos, Inc. 6,200 126,712
Wal-Mart Stores, Inc. 30,900 2,135,962
-------------------
5,639,283
-------------------
SERVICES (3.9%)
Cendant Corp. (A) 13,000 345,313
Electronic Data Systems 4,900 327,994
Medtronic, Inc. 8,600 313,363
Microsoft (A) 38,000 4,435,314
-------------------
5,421,984
-------------------
SUPERMARKETS (0.2%)
Kroger Co. (A) 6,100 115,138
Safeway, Inc. (A) 6,043 214,904
-------------------
330,042
-------------------
TECHNOLOGY (13.8%)
America Online, Inc. (A) 18,200 1,372,962
Analog Devices, Inc. (A) 2,700 251,100
Automatic Data Process 3,400 183,175
BMC Software, Inc. (A) 4,400 351,588
Cisco Systems, Inc. (A) 23,450 2,511,350
Compaq Computer Corp. 11,478 310,623
Computer Associates International 3,700 258,769
Compuware Corp. (A) 7,400 275,419
Corning, Inc. 2,200 283,662
Dell Computer Corp. (A) 16,180 824,675
EMC Corp. (A) 6,200 677,350
Gateway, Inc. (A) 1,600 115,300
Hewlett Packard Co. 7,600 865,925
Intel Corp. 24,960 2,053,741
International Business
Machines Corp. 13,100 1,414,800
Lexmark International
Group, Inc. (A) 2,600 235,300
Micron Technologies, Inc. (A) 2,500 194,375
Motorola, Inc. 5,000 736,250
Oracle Corp. (A) 12,300 1,377,985
PerkinElmer, Inc. 6,200 258,463
QUALCOMM, Inc. (A) 6,000 1,056,563
Safeguard Scientifics, Inc. (A) 1,100 178,269
Seagate Technology, Inc. (A) 3,700 172,281
Solectron Corp. (A) 2,100 199,763
Sun Microsystem, Inc. (A) 13,700 1,060,466
Teradyne, Inc. (A) 4,100 270,600
Texas Instruments, Inc. 6,200 600,625
3Com Corp. (A) 4,300 201,966
Xilinx, Inc. (A) 4,400 200,063
Yahoo, Inc. (A) 1,995 863,274
-------------------
19,356,682
-------------------
TELECOMMUNICATIONS (7.6%)
ALLTEL Corp. 3,300 272,869
AT&T Corp. 23,021 1,168,316
Bell Atlantic Corp. 9,060 557,756
BellSouth Corp. 8,100 379,181
CenturyTel, Inc. 6,850 324,519
Global Crossing, Ltd. (A) 5,700 284,822
GTE Corp. 4,700 331,644
Lucent Technologies, Inc. 22,526 1,685,226
MCI Worldcom, Inc. (A) 21,827 1,157,488
MediaOne Group, Inc. (A) 4,600 353,337
Nextel Communications, Inc. (A) 5,400 556,706
Nortel Networks Corp. 9,200 929,200
SBC Communications, Inc. 24,888 1,213,290
Sprint Corp.-Fon Group 8,840 595,042
Sprint Corp.-PCS Group (A) 5,935 608,338
U.S. West, Inc. 3,886 279,792
-------------------
10,697,526
-------------------
TEXTILE (0.2%)
Nike, Inc. 3,900 193,294
-------------------
TOBACCO (0.4%)
Loews Corp. 1,100 66,756
Philip Morris Cos. 18,900 438,244
-------------------
505,000
-------------------
TRANSPORTATION SERVICES (0.1%)
FDX Corp. (A) 4,300 176,031
-------------------
U.S. AGENCY (0.6%)
Federal Home Loan
Mortgage Corp. 7,100 334,144
Federal National Mortgage
Association 8,800 549,450
-------------------
883,594
-------------------
UTILITIES (0.8%)
AES Corp. (A) 3,200 239,200
Central & South West Corp. 6,200 124,000
Edison International 7,300 191,169
FPL Group, Inc. 3,500 149,844
Peco Energy Co. 6,200 215,450
Southern Co. 3,200 75,200
Texas Utilities Co. 4,400 156,475
-------------------
1,151,338
-------------------
TOTAL COMMON STOCKS
(COST $73,077,653) 89,680,075
-------------------
</TABLE>
-15-
<PAGE> 18
STATEMENT OF INVESTMENTS - CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------------- -----------------
<S> <C> <C>
SHORT-TERM INVESTMENTS (36.1%)
COMMERCIAL PAPER (33.7%)
Allied Signal, Inc.,
6.67% due February 15, 2000 $ 3,000,000 $ 2,978,361
American Home Products Corp.,
6.43% due January 28, 2000 3,000,000 2,986,992
Associates Corp of North America,
6.07% due January 27, 2000 4,000,000 3,983,280
Federal Home Loan Mortgage Corp.,
5.72% due January 19, 2000 6,000,000 5,982,396
Federal National Mortgage Association,
5.73% due February 3, 2000 4,900,000 4,877,842
Ford Motor Credit Co.,
5.62% due February 3, 2000 1,000,000 994,717
GE Capital Corp.,
6.13% due February 10, 2000 5,000,000 4,967,980
Goldman Sachs Group LP,
6.64% due January 31, 2000 5,000,000 4,975,975
Household Financial Corp.,
4.06% due January 3, 2000 1,187,000 1,186,736
J.P. Morgan & Company, Inc.,
6.10% due February 7, 2000 5,000,000 4,970,390
Merrill Lynch & Co., Inc.,
6.11% due February 24, 2000 5,000,000 4,956,585
Morgan Stanley Dean Witter & Co.,
6.41% due February 28, 2000 2,550,000 2,526,178
Pacific Gas & Electric Co.,
6.48% due January 31, 2000 2,000,000 1,990,390
-------------------
47,377,822
-------------------
U.S. TREASURY (2.4%)
United States of America Treasury,
5.17% due March 16, 2000 (B) 1,000,000 987,854
United States of America Treasury,
4.81% due April 27, 2000 (B) 2,400,000 2,359,517
-------------------
3,347,371
-------------------
TOTAL SHORT-TERM
INVESTMENTS (COST $50,714,512) 50,725,193
-------------------
<CAPTION>
NOTIONAL
VALUE
-----------------
<S> <C> <C>
FUTURES CONTRACTS (0.0%)
S&P 500 Stock Index,
Exp. March, 2000 (C) $ 50,091,750 -
-------------------
TOTAL INVESTMENTS (100%)
(COST $123,792,165) (D) $ 140,405,268
===================
</TABLE>
NOTES
(A) Non-income Producing Security.
(B) Par value of $3,025,000 pledged to cover margin deposits on futures
contracts.
(C) As more fully discussed in Note 1 to the financial statements, it is
Account TGIS's practice to hold cash and cash equivalents (including
short-term investments) at least equal to the underlying face value, or
notional value, of outstanding purchased futures contracts, less the
initial margin. Account TGIS uses futures contracts as a substitute for
holding individual securities.
(D) At December 31, 1999, net unrealized appreciation for all securities was
$16,613,103. This consisted of aggregate gross unrealized appreciation
for all securities in which there was an excess of market value over
cost of $21,085,880 and aggregate gross unrealized depreciation for all
securities in which there was an excess of cost over market value of
$4,472,777.
See Notes to Financial Statements
-16-
<PAGE> 19
INDEPENDENT AUDITORS' REPORT
To the Board of Managers and the Owners of Variable Annuity Contracts of The
Travelers Timed Growth and Income Stock Account for Variable Annuities:
We have audited the accompanying statement of assets and liabilities of The
Travelers Timed Growth and Income Stock Account for Variable Annuities,
including the statement of investments, as of December 31, 1999, and the related
statements of operations, changes in net assets and the selected per unit data
and ratios for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit. The accompanying
statement of changes in net assets for the year ended December 31, 1998 and
selected per unit data and ratios for each of the years in the four-year period
ended December 31, 1998 were audited by other auditors whose report thereon
dated February 15, 1999, expressed an unqualified opinion on that statement of
changes in net assets and those selected per unit data and ratios.
We conducted our audit 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 investment securities owned as of December 31, 1999, by
correspondence with the custodian and brokers. 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 Timed Growth and
Income Stock Account for Variable Annuities as of December 31, 1999, and the
results of its operations, changes in net assets and the selected per unit data
and ratios for the year then ended, in conformity with generally accepted
accounting principles.
/s/ KPMG LLP
Hartford, Connecticut
February 18, 2000
-17-
<PAGE> 20
THE TRAVELERS
TIMED SHORT-TERM
BOND ACCOUNT
FOR VARIABLE ANNUITIES
The year 1999 began with little signs of softening in business activity, as the
U.S. economy embarked on its ninth year of business expansion. As the year
concluded, the robust economy continued with stronger than expected retail sales
and industrial production. Unemployment remained low at 4.1% in December and it
is estimated that real Gross Domestic Product growth for the fourth quarter will
be 5.0%.
The year ended with the 30-year Treasury Bond Yield at 6.48% and the federal
funds rate at 5.50%. The 30-year Treasury Bond was up 42 basis points from the
September 30th level of 6.05% and up 139 basis points from the beginning of the
year level of 5.09%. During the fourth quarter, the Federal Open Market
Committee ("FOMC") increased the federal funds rate by 25 basis points, to
5.50%. This brought the total increase for the year to 75 basis points.
Currently, the FOMC is expected to tighten 25 basis points on February 2 and
possibly another 25 basis points on March 21. Beyond the first quarter, further
tightening seems unlikely assuming inflation remains tame.
The strategy in management of The Travelers Timed Short-Term Bond Account for
Variable Annuities will be to maintain the current weighted-average life of 35
days. At December 31, 1999 the asset size of the portfolio was $161.6 million
with an average yield of 5.99%.
PORTFOLIO MANAGER: EMIL J. MOLINARO JR.
[TIMCO A MEMBER OF CITYGROUP LOGO]
-18-
<PAGE> 21
THE TRAVELERS TIMED SHORT-TERM BOND ACCOUNT
FOR VARIABLE ANNUITIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investment securities, at market value (cost $161,637,145) ....... $161,670,132
Cash ............................................................ 1,101
Receivables:
Purchase payments and transfers from other Travelers accounts.. 42,767
Other assets ..................................................... 98
------------
Total Assets ................................................. 161,714,098
------------
LIABILITIES:
Payables:
Contract surrenders and transfers to other Travelers accounts.. 79,101
Investment management and advisory fees ....................... 12,860
Market timing fees ............................................ 49,720
Insurance charges ............................................. 49,720
Accrued liabilities ............................................ 559
------------
Total Liabilities ............................................ 191,960
------------
NET ASSETS:
(Applicable to 109,665,775 units outstanding at $1.473 per unit) $161,522,138
============
</TABLE>
See Notes to Financial Statements
-19-
<PAGE> 22
THE TRAVELERS TIMED SHORT-TERM BOND ACCOUNT
FOR VARIABLE ANNUITIES
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest ..................................................... $ 9,452,021
EXPENSES:
Market timing fees ........................................... $ 2,262,987
Investment management and advisory fees ...................... 585,299
Insurance charges ............................................ 2,262,987
------------
Total expenses ............................................. 5,111,273
------------
Net investment income .................................... 4,340,748
------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED GAIN (LOSS)
ON INVESTMENT SECURITIES:
Realized gain (loss) from investment security transactions:
Proceeds from investment securities sold ................... 87,337,152
Cost of investment securities sold ......................... 87,337,683
------------
Net realized gain (loss) ................................. (531)
Change in unrealized gain (loss) on investment securities:
Unrealized loss at December 31, 1998 ....................... (6,304)
Unrealized gain at December 31, 1999 ....................... 32,987
------------
Net change in unrealized gain (loss) for the year ......... 39,291
------------
Net realized loss and change in unrealized gain (loss)... 38,760
------------
Net increase in net assets resulting from operations ......... $ 4,379,508
============
</TABLE>
See Notes to Financial Statements
-20-
<PAGE> 23
THE TRAVELERS TIMED SHORT-TERM BOND ACCOUNT
FOR VARIABLE ANNUITIES
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
OPERATIONS:
Net investment income .................................................. $ 4,340,748 $ 4,262,991
Net realized gain (loss) from investment security transactions ......... (531) 4,401
Net change in unrealized gain (loss) on investment securities .......... 39,291 (7,755)
------------- -------------
Net increase in net assets resulting from operations ................... 4,379,508 4,259,637
------------- -------------
UNIT TRANSACTIONS:
Participant purchase payments
(applicable to 5,354,365 and 4,899,841 units, respectively) ............ 7,790,491 6,966,870
Participant transfers from other Travelers accounts
(applicable to 4,539,700 and 3,275,494 units, respectively) ............ 6,611,717 4,642,138
Market timing transfers from other Travelers timed accounts
(applicable to 71,856,849 and 139,179,292 units, respectively) ......... 104,699,427 197,358,803
Administrative charges
(applicable to 107,746 and 111,227 units, respectively) ................ (157,465) (158,992)
Contract surrenders
(applicable to 12,251,352 and 9,833,684 units, respectively) ........... (17,827,446) (13,984,074)
Participant transfers to other Travelers accounts
(applicable to 8,299,415 and 6,135,224 units, respectively) ............ (12,076,485) (8,720,437)
Market timing transfers to other Travelers timed accounts
(applicable to 88,289,250 and 41,238,874 units, respectively) .......... (128,674,249) (59,114,111)
Other payments to participants
(applicable to 204,194 and 230,542 units, respectively) ................ (296,703) (328,066)
------------- -------------
Net increase (decrease) in net assets resulting from unit transactions.. (39,930,713) 126,662,131
------------- -------------
Net increase (decrease) in net assets .................................. (35,551,205) 130,921,768
NET ASSETS:
Beginning of year ...................................................... 197,073,343 66,151,575
------------- -------------
End of year ............................................................ $ 161,522,138 $ 197,073,343
============= =============
</TABLE>
See Notes to Financial Statements
-21-
<PAGE> 24
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Travelers Timed Short-Term Bond Account for Variable Annuities ("Account
TSB") is a separate account of The Travelers Insurance Company ("The
Travelers"), an indirect wholly owned subsidiary of Citigroup Inc., and is
available for funding certain variable annuity contracts issued by The
Travelers. Account TSB is registered under the Investment Company Act of 1940,
as amended, as a diversified, open-end management investment company.
Participants in Account TSB have entered into market timing service agreements
with an affiliate of The Travelers, which provide for the transfer of
participants' funds to certain other timed accounts of The Travelers, at the
discretion of the market timers.
The following is a summary of significant accounting policies consistently
followed by Account TSB in the preparation of its financial statements.
SECURITY VALUATION. Investments in securities traded on a national securities
exchange are valued at the 4:00 p.m. Eastern Standard Time price of the New York
Stock Exchange on the last business day of the year; securities traded on the
over-the-counter market and listed securities with no reported sales are valued
at the mean between the last-reported bid and asked prices or on the basis of
quotations received from a reputable broker or other recognized source.
When market quotations are not considered to be readily available for long-term
corporate bonds and notes, such investments are generally stated at fair value
on the basis of valuations furnished by a pricing service. These valuations are
determined for normal institutional-size trading units of such securities, using
methods based on market transactions for comparable securities and various
relationships between securities which are generally recognized by institutional
traders. Securities, including restricted securities, for which pricing services
are not readily available, are valued by management at prices which it deems in
good faith to be fair.
Short-term investments for which a quoted market price is available are valued
at market. Short-term investments for which there is no reliable quoted market
price are valued at amortized cost which approximates market.
SECURITY TRANSACTIONS. Security transactions are accounted for on the trade
date. Interest income is recorded on the accrual basis. Premiums and
discounts are amortized to interest income utilizing the constant yield method.
REPURCHASE AGREEMENTS. When Account TSB enters into a repurchase agreement (a
purchase of securities whereby the seller agrees to repurchase the securities at
a mutually agreed upon date and price), the repurchase price of the securities
will generally equal the amount paid by Account TSB plus a negotiated interest
amount. The seller under the repurchase agreement will be required to provide to
Account TSB securities (collateral) whose market value, including accrued
interest, will be at least equal to 102% of the repurchase price. Account TSB
monitors the value of collateral on a daily basis. Repurchase agreements will be
limited to transactions with national banks and reporting broker dealers
believed to present minimal credit risks. Account TSB's custodian will take
actual or constructive receipt of all securities underlying repurchase
agreements until such agreements expire.
FEDERAL INCOME TAXES. The operations of Account TSB 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 and capital gains of Account TSB. Account TSB 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.
-22-
<PAGE> 25
NOTES TO FINANCIAL STATEMENTS - CONTINUED
2. INVESTMENTS
Realized gains and losses from investment security transactions are reported on
an identified cost basis.
3. CONTRACT CHARGES
Investment management and advisory fees are calculated daily at an annual rate
of 0.3233% of Account TSB's average net assets. These fees are paid to The
Travelers Investment Management Company, an indirect wholly owned subsidiary of
Citigroup Inc.
A market timing fee equivalent on an annual basis to 1.25% of the average net
assets of Account TSB is deducted for market timing services. The Travelers
deducts the fee daily and, in turn, pays the fee to Copeland Financial Services,
Inc., a registered investment adviser and an affiliate of The Travelers which
provides market timing services to participants in Account TSB.
Insurance charges are paid for the mortality and expense risks assumed by The
Travelers. Each business day, The Travelers deducts a mortality and expense risk
charge which is reflected in the calculation of accumulation unit values. This
charge equals, on an annual basis, 1.25%. Additionally, for 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.
No sales charge is deducted from participant purchase payments when they are
received. However, The Travelers generally assesses a 5% contingent deferred
sales charge if a participant's purchase payment is surrendered within five
years of its payment date. Contract surrender payments include $105,311 and
$72,123 of contingent deferred sales charges for the years ended December 31,
1999 and 1998, respectively.
-23-
<PAGE> 26
NOTES TO FINANCIAL STATEMENTS - CONTINUED
4. SUPPLEMENTARY INFORMATION
(Selected data for a unit outstanding throughout each year.)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
SELECTED PER UNIT DATA:
Total investment income ................................... $ .076 $ .078 $ .077 $ .057 $ .074
Operating expenses ........................................ .041 .040 .039 .030 .035
----------- ---------- ---------- ---------- --------
Net investment income ..................................... .035 .038 .038 .027 .039
Unit value at beginning of year ........................... 1.437 1.399 1.361 1.333 1.292
Net realized and change in unrealized gains ............... .001 .000 .000 .001 .002
----------- ---------- ---------- ---------- --------
Unit value at end of year ................................. $ 1.473 $ 1.437 $ 1.399 $ 1.361 $ 1.333
=========== ========== ========== ========== ========
SIGNIFICANT RATIOS AND ADDITIONAL DATA:
Net increase in unit value ................................ $ .04 $ .04 $ .04 $ .03 $ .04
Ratio of operating expenses to average net assets* ........ 2.82% 2.82% 2.82% 2.82% 2.82%
Ratio of net investment income to average net assets* ..... 2.38% 2.71% 2.77% 2.47% 3.17%
Number of units outstanding at end of year (thousands) .... 109,666 137,067 47,262 54,565 -
</TABLE>
* Annualized
5. SUBSEQUENT EVENT
On February 1, 2000, $24,624,617 and $9,493,972, respectively of the net assets
of The Travelers Timed Growth and Income Stock Account for Variable Annuities
and The Travelers Timed Aggressive Stock Account for Variable Annuities,
respectively, were transferred to The Travelers Timed Short-Term Bond Account
for Variable Annuities as a result of a transfer order made by a market timer on
behalf of subscribing participants.
-24-
<PAGE> 27
THE TRAVELERS TIMED SHORT-TERM BOND ACCOUNT
FOR VARIABLE ANNUITIES
STATEMENT OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
---------------- -----------------
<S> <C> <C>
SHORT-TERM INVESTMENTS (100%)
COMMERCIAL PAPER (100%)
Allied Signal, Inc.,
6.07% due February 14, 2000 $ 5,430,000 $ 5,391,719
American Honda Financial,
6.08% due February 17, 2000 8,000,000 7,939,696
Asset Securitization Corp.,
6.19% due January 27, 2000 7,000,000 6,970,740
Bell Atlantic Financial Services, Inc.,
6.03% due January 18, 2000 4,000,000 3,988,888
Bell Atlantic Financial Services, Inc.,
6.03% due January 20, 2000 6,770,000 6,749,087
BHF Finance, Inc.,
6.00% due February 24, 2000 10,250,000 10,160,999
DE Funding Corp.,
6.09% due January 20, 2000 6,757,000 6,736,128
DE Funding Corp.,
6.05% due February 22, 2000 3,500,000 3,470,761
Dorada Finance, Inc.,
6.12% due January 25, 2000 9,950,000 9,911,513
Equitable Life Assurance,
5.99% due February 10, 2000 10,000,000 9,935,960
Federal Home Loan Bank,
5.77% due February 2, 2000 4,920,000 4,898,475
Federal Home Loan Mortgage Corp.,
5.75% due January 27, 2000 5,000,000 4,982,430
Federal National Mortgage
Association,
5.74% due January 14, 2000 5,650,000 5,638,479
Ford Motor Credit Co.,
5.62% due February 3, 2000 800,000 795,774
Gap Inc.,
5.80% due January 19, 2000 5,000,000 4,985,330
GE Capital Corp.,
6.53% due February 2, 2000 5,930,000 5,899,621
General Motors Acceptance Corp.,
6.11% due February 22, 2000 5,800,000 5,751,547
Goldman Sachs Group LP,
6.64% due January 31, 2000 4,000,000 3,980,780
Household Financial Corp.,
4.06% due January 3, 2000 980,000 979,782
J.P. Morgan & Company, Inc.,
6.11% due February 28, 2000 5,400,000 5,349,553
Merrill Lynch & Co., Inc.,
6.11% due February 29, 2000 10,000,000 9,904,940
Morgan Stanley Dean Witter & Co.,
6.11% due January 19, 2000 8,750,000 8,724,327
P G & E Corp.,
6.15% due February 3, 2000 8,000,000 7,957,736
PacifiCorp.,
5.99% due February 7, 2000 7,500,000 7,455,585
Preferred Resources Funding Corp.,
6.28% due January 20, 2000 10,250,000 10,218,338
Providian Master Trust,
6.73% due January 18, 2000 2,900,000 2,891,944
-------------------
TOTAL INVESTMENTS (100%)
(COST $161,637,145) $ 161,670,132
===================
</TABLE>
See Notes to Financial Statements
-25-
<PAGE> 28
INDEPENDENT AUDITORS' REPORT
To the Board of Managers and the Owners of Variable Annuity Contracts of The
Travelers Timed Short-Term Bond Account for Variable Annuities:
We have audited the accompanying statement of assets and liabilities of The
Travelers Timed Short-Term Bond Account for Variable Annuities, including the
statement of investments, as of December 31, 1999, and the related statements of
operations, changes in net assets and the selected per unit data and ratios for
the year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit. The accompanying statement of changes
in net assets for the year ended December 31, 1998 and selected per unit data
and ratios for each of the years in the four-year period ended December 31, 1998
were audited by other auditors whose report thereon dated February 15, 1999,
expressed an unqualified opinion on that statement of changes in net assets and
those selected per unit data and ratios.
We conducted our audit 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 investment securities owned as of December 31, 1999, by
correspondence with the custodian and brokers. 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 Timed Short-Term
Bond Account for Variable Annuities as of December 31, 1999, and the results of
its operations, changes in net assets and the selected per unit data and ratios
for the year then ended, in conformity with generally accepted accounting
principles.
/s/ KPMG LLP
Hartford, Connecticut
February 18, 2000
-26-
<PAGE> 29
THE TRAVELERS
TIMED AGGRESSIVE
STOCK ACCOUNT
FOR VARIABLE ANNUITIES
The Travelers Timed Aggressive Stock Account for Variable Annuities ("Account
TAS") is managed by the Travelers Investment Management Company ("TIMCO"). TIMCO
manages Account TAS to provide diversified exposure to the mid- and
small-capitalization sector of the U.S. equity market, while maintaining a
highly marketable portfolio of common stocks and related financial instruments
in order to accommodate cash flows associated with market-timing moves. Stock
selection is based on a disciplined quantitative screening process that favors
companies that achieve earnings growth above consensus expectations and whose
shares offer attractive relative value. In order to achieve consistent relative
performance, we manage Account TAS to mirror the overall risk, sector weightings
and growth/value style characteristics of the Standard & Poor's 400 Mid Cap
Stock Index ("S&P 400"). The S&P 400 is a value-weighted index comprised of mid-
and small-company stocks.
For the twelve months ending December 31, 1999, Account TAS had a net return of
11.9% trailing the average return achieved by variable annuity stock funds in
the Lipper Capital Appreciation Mid Cap Category. A discussion of portfolio
performance in 1999 is presented next with a closer look at the third and fourth
quarters.
The Technology sector was red-hot in 1999 and growth stocks handily outperformed
value stocks. Our stock selection was most favorable in the Technology and
Consumer Discretionary sectors for most of the year and slightly adverse in the
other sectors.
During the third quarter of 1999, stock selection was most favorable in the
Technology and Consumer Discretionary sectors and least favorable in the
Utilities and Financial Services sector.
In the Technology sector, we benefited from our positions in semiconductor
stocks Comverse Technology Inc. and Vitesse Semiconductor Corp. which rose as a
result of the strong earnings performance observed within the semiconductor
industry. Growth stocks such as Legato Systems, Inc. and QUALCOMM, Inc. moved
sharply higher as their price-to-earnings multiple were restored after the
second quarter sell-off in growth stocks. We were hurt by an earnings
disappointment from Sterling Commerce, Inc. and weakness in Rational Software
Corp.
In the Consumer Discretionary sector, Premark International, Inc. was acquired
for a 50% premium by Illinois Tools and Hannaford Brothers Co. was acquired by
Food Lions in a stock swap which saw Hannaford's stock price rise by nearly 15%.
Both acquisitions helped performance within the sector.
Our positions in Greenpoint Financial Co., a bank holding company, and Allmerica
Financial Corp., an insurance holding company, hurt performance in the Financial
Services sector as interest rate concerns hit these stocks particularly hard. In
the Utilities sector, analysts trimmed full year 2000 earnings estimates down
for Winstar Telecommunications, Inc. in late September. The stock price
responded with a sharp decline and hurt performance in the sector.
During the fourth quarter, stock selection was favorable in most sectors and
particularly positive in the Technology, Utilities and Producer Durables
sectors.
-27-
<PAGE> 30
In the Technology sector, we benefited from our picks in several different
industry groups. Within the Semiconductor industry, Comverse Technology, Inc.,
Cypress Semiconductor and Qlogic Corp., performed well as the promise of the
Internet and higher capital spending spurred investor interest. Our positions in
Software stocks such as Rational Software Corp., Citrix Systems, Inc., and
Siebel Systems, Inc., generated high returns as these companies offered
customers Web-based business solutions. Electronic component companies such as
Analog Devices, Inc., and Sanmina Corp. outperformed their industry group while
semiconductor equipment makers such as Teradyne, Inc., posted strong gains. We
also benefited from avoiding disappointing performers such as Comsat and
Diebold.
In the Utilities sector, our positions in the faster growing telecommunications
in group such as Qwest Communications International, Winstar Communications
Inc., CenturyTel, Inc., and Alltel Corp. performed well. Calpine Corp., a leader
in the electric power generation industry, continued its robust growth through
acquisitions while SCANA and Montana Power Co. increased their price-to-earnings
multiple through leadership positions.
In the Producer Durables sector, American Power Conversion Corp. and Molex, Inc.
proved to be the big winners in our portfolios. Both companies benefited from
strong end-market demand. American Power Conversion Corp. was chosen by
Microsoft to leverage its uninterruptable power supply management into its
Windows 2000 operating system. Molex, Inc. a manufacturer of diversified
electronics components, benefited from a global recovery in demand especially
for consumer electronics.
Strong earnings growth in the third and fourth quarters suggests that the
earnings recovery of 1999 is well underway. However, the constant presence of
the Federal Reserve Board and the current love affair with Technology stocks may
prevent a broad-based market rally to continue in the near future. In our
disciplined approach to stock selection, we continue to screen our research
universe of over 800 mid cap securities for companies that offer improving
earnings fundamentals at discounted stock valuations.
PORTFOLIO MANAGER: SANDIP A. BHAGAT, CFA
[TIMCO A MEMBER OF CITYGROUP LOGO]
-28-
<PAGE> 31
THE TRAVELERS TIMED AGGRESSIVE STOCK ACCOUNT
FOR VARIABLE ANNUITIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investment securities, at market value (cost $60,041,871) ........ $65,952,301
Cash ............................................................. 455
Receivables:
Dividends ...................................................... 21,933
Investment securities sold ..................................... 444,820
Purchase payments and transfers from other Travelers accounts .. 17,739
Variation on futures margin .................................... 95,200
Other assets ..................................................... 12
-----------
Total Assets .................................................. 66,532,460
-----------
LIABILITIES:
Payables:
Investment securities purchased ................................ 99,417
Contract surrenders and transfers to other Travelers accounts .. 37,472
Investment management and advisory fees ........................ 5,653
Market timing fees ............................................. 20,190
Insurance charges .............................................. 20,190
Accrued liabilities .............................................. 545
-----------
Total Liabilities ............................................. 183,467
-----------
NET ASSETS:
(Applicable to 15,180,421 units outstanding at $4.371 per unit)..... $66,348,993
===========
</TABLE>
See Notes to Financial Statements
-29-
<PAGE> 32
THE TRAVELERS TIMED AGGRESSIVE STOCK ACCOUNT
FOR VARIABLE ANNUITIES
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends .................................................. $ 596,833
Interest ................................................... 264,749
------------
Total Income ............................................. $ 861,582
EXPENSES:
Market timing fees ......................................... 773,987
Investment management and advisory fees .................... 216,715
Insurance charges .......................................... 773,987
------------
Total expenses ........................................... 1,764,689
------------
Net investment loss .................................... ` (903,107)
------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED GAIN (LOSS)
ON INVESTMENT SECURITIES:
Realized gain (loss) from investment security transactions:
Proceeds from investment securities sold ................. 74,092,555
Cost of investment securities sold ....................... 65,066,745
------------
Net realized gain (loss) ................................ 9,025,810
Change in unrealized gain (loss) on investment securities:
Unrealized gain at December 31, 1998 ..................... 7,733,544
Unrealized gain at December 31, 1999 ..................... 5,910,430
------------
Net change in unrealized gain (loss) for the year ...... (1,823,114)
------------
Net realized gain and change in unrealized gain (loss) 7,202,696
------------
Net increase in net assets resulting from operations ......... $ 6,299,589
------------
</TABLE>
See Notes to Financial Statements
-30-
<PAGE> 33
THE TRAVELERS TIMED AGGRESSIVE STOCK ACCOUNT
FOR VARIABLE ANNUITIES
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
OPERATIONS:
Net investment loss ......................................... $ (903,107) $ (854,695)
Net realized gain from investment security transactions ..... 9,025,810 13,953,509
Net change in unrealized gain (loss) on investment securities (1,823,114) (7,344,883)
------------- -------------
Net increase in net assets resulting from operations ...... 6,299,589 5,753,931
------------- -------------
UNIT TRANSACTIONS:
Participant purchase payments
(applicable to 726,794 and 1,162,073 units, respectively) ... 2,801,681 4,076,993
Participant transfers from other Travelers accounts
(applicable to 303,988 and 285,187 units, respectively) ..... 1,208,994 1,020,435
Market timing transfers from other Travelers timed accounts
(applicable to 8,768,263 and 4,085,482 units, respectively) . 34,666,009 14,496,461
Administrative charges
(applicable to 19,074 and 25,033 units, respectively) ....... (78,066) (91,340)
Contract surrenders
(applicable to 1,705,802 and 1,541,603 units, respectively) . (6,596,120) (5,452,058)
Participant transfers to other Travelers accounts
(applicable to 2,129,169 and 1,838,385 units, respectively) . (8,294,458) (6,504,181)
Market timing transfers to other Travelers timed accounts
(applicable to 7,187,938 and 11,517,409 units, respectively) (27,827,485) (36,582,507)
Other payments to participants
(applicable to 28,865 and 22,628 units, respectively) ....... (1,082,934) (81,663)
------------- -------------
Net decrease in net assets resulting from unit transactions . (4,227,739) (29,117,860)
------------- -------------
Net increase (decrease) in net assets ..................... 2,071,850 (23,363,929)
NET ASSETS:
Beginning of year ......................................... 64,277,143 87,641,072
------------ ------------
End of year ............................................... $ 66,348,993 $ 64,277,143
============ ============
</TABLE>
See Notes to Financial Statements
-31-
<PAGE> 34
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Travelers Timed Aggressive Stock Account for Variable Annuities ("Account
TAS") is a separate account of The Travelers Insurance Company ("The
Travelers"), an indirect wholly owned subsidiary of Citigroup Inc., and is
available for funding certain variable annuity contracts issued by The
Travelers. Account TAS is registered under the Investment Company Act of 1940,
as amended, as a diversified, open-end management investment company.
Participants in Account TAS have entered into market timing service agreements
with an affiliate of The Travelers, which provide for the transfer of
participants' funds to certain other timed accounts of The Travelers, at the
discretion of the market timers.
The following is a summary of significant accounting policies consistently
followed by Account TAS in the preparation of its financial statements.
SECURITY VALUATION. Investments in securities traded on a national securities
exchange are valued at the 4:00 p.m. Eastern Standard Time price of the New York
Stock Exchange on the last business day of the year; securities traded on the
over-the-counter market and listed securities with no reported sales are valued
at the mean between the last-reported bid and asked prices or on the basis of
quotations received from a reputable broker or other recognized source.
Short-term investments for which a quoted market price is available are valued
at market. Short-term investments for which there is no reliable quoted market
price are valued at amortized cost which approximates market.
SECURITY TRANSACTIONS. Security transactions are accounted for on the trade
date. Dividend income is recorded on the ex-dividend date. Interest income is
recorded on the accrual basis. Premiums and discounts are amortized to interest
income utilizing the constant yield method.
FUTURES CONTRACTS. Account TAS may use stock index futures contracts, and may
also use interest rate futures contracts, as a substitute for the purchase or
sale of individual securities. When Account TAS enters into a futures contract,
it agrees to buy or sell a specified index of stocks, or debt securities, at a
future time for a fixed price, unless the contract is closed prior to
expiration. Account TAS is obligated to deposit with a broker an "initial
margin" equivalent to a percentage of the face, or notional value of the
contract.
It is Account TAS's practice to hold cash and cash equivalents in an amount at
least equal to the notional value of outstanding purchased futures contracts,
less the initial margin. Cash and cash equivalents include cash on hand,
securities segregated under federal and brokerage regulations, and short-term
highly liquid investments with maturities generally three months or less when
purchased. Generally, futures contracts are closed prior to expiration.
Futures contracts purchased by Account TAS are priced and settled daily;
accordingly, changes in daily prices are recorded as realized gains or losses
and no asset is recorded in the Statement of Investments. However, when Account
TAS holds open futures contracts, it assumes a market risk generally equivalent
to the underlying market risk of change in the value of the specified indexes or
debt securities associated with the futures contract.
OPTIONS. Account TAS may purchase index or individual equity put or call
options, thereby obtaining the right to sell or buy a fixed number of shares of
the underlying asset at the stated price on or before the stated expiration
date. Account TAS may sell the options before expiration. Options held by
Account TAS are listed on either national securities exchanges or on
over-the-counter market and are short-term contracts with a duration of less
than nine months. The market value of the options will be based on the 4:00 p.m.
Eastern Standard Time price of the New York Stock Exchange, or, in the absence
of such price, the latest bid quotation.
-32-
<PAGE> 35
NOTES TO FINANCIAL STATEMENTS - CONTINUED
REPURCHASE AGREEMENTS. When Account TAS enters into a repurchase agreement (a
purchase of securities whereby the seller agrees to repurchase the securities at
a mutually agreed upon date and price), the repurchase price of the securities
will generally equal the amount paid by Account TAS plus a negotiated interest
amount. The seller under the repurchase agreement will be required to provide to
Account TAS securities (collateral) whose market value, including accrued
interest, will be at least equal to 102% of the repurchase price. Account TAS
monitors the value of collateral on a daily basis. Repurchase agreements will be
limited to transactions with national banks and reporting broker dealers
believed to present minimal credit risks. Account TAS's custodian will take
actual or constructive receipt of all securities underlying repurchase
agreements until such agreements expire.
FEDERAL INCOME TAXES. The operations of Account TAS 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 and capital gains of Account TAS. Account TAS 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.
2. INVESTMENTS
The aggregate costs of purchases and proceeds from sales of investments (other
than short-term securities), were $47,694,478 and $62,656,731, respectively; the
costs of purchases and proceeds from sales of direct and indirect U.S.
government securities were $5,028,366 and $1,022,261, respectively, for the year
ended December 31, 1999. Realized gains and losses from investment security
transactions are reported on an identified cost basis.
Account TAS placed a portion of its security transactions with brokerage firms
which are affiliates of The Travelers. The commissions paid to these affiliated
firms were $13,755 and $9,682 for the years ended December 31, 1999 and 1998,
respectively.
At December 31, 1999, Account TAS held 68 open S&P 400 MidCap Index futures
contracts expiring in March, 2000. The underlying face value, or notional value,
of these contracts at December 31, 1999 amounted to $15,271,100. In connection
with these contracts, short-term investments with a par value of $900,000 had
been pledged as margin deposits.
Net realized gains resulting from futures contracts were $1,028,832 and $277,383
for the years ended December 31, 1999 and 1998, respectively. These gains are
included in the net realized gain from investment security transactions on both
the Statement of Operations and the Statement of Changes in Net Assets. The cash
settlement for December 31, 1999 is shown on the Statement of Assets and
Liabilities as a receivable for variation on futures margin.
Net realized gains include a reimbursement of $56,058 from The Travelers
Investment Management Company, an affiliate, for realized losses incurred on an
investment restriction violation.
-33-
<PAGE> 36
NOTES TO FINANCIAL STATEMENTS - CONTINUED
3. CONTRACT CHARGES
Investment management and advisory fees are calculated daily at an annual rate
of 0.35% of Account TAS's average net assets. These fees are paid to The
Travelers Investment Management Company, an indirect wholly owned subsidiary of
Citigroup Inc.
A market timing fee equivalent on an annual basis to 1.25% of the average net
assets of Account TAS is deducted for market timing services. The Travelers
deducts the fee daily and, in turn, pays the fee to Copeland Financial Services,
Inc., a registered investment adviser and an affiliate of The Travelers which
provides market timing services to participants in Account TAS.
Insurance charges are paid for the mortality and expense risks assumed by The
Travelers. Each business day, The Travelers deducts a mortality and expense risk
charge which is reflected in the calculation of accumulation unit values. This
charge equals, on an annual basis, 1.25%. Additionally, for contracts in the
accumulation phase, a semi-annual charge of $15 (prorated for partial period) is
deducted from participant account balances and paid to The Travelers to cover
administrative charges.
No sales charge is deducted from participant purchase payments when they are
received. However, The Travelers generally assesses a 5% contingent deferred
sales charge if a participant's purchase payment is surrendered within five
years of its payment date. Contract surrender payments include $52,916 and
$58,013 of contingent deferred sales charges for the years ended December 31,
1999 and 1998, respectively.
-34-
<PAGE> 37
NOTES TO FINANCIAL STATEMENTS - CONTINUED
4. SUPPLEMENTARY INFORMATION
(Selected data for a unit outstanding throughout each year.)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
1999 1998 1997 1996 1995
-------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C>
SELECTED PER UNIT DATA:
Total investment income ................................. $ .052 $ .056 $ .063 $ .041 $ .042
Operating expenses ...................................... .110 .098 .085 .069 .057
-------- -------- -------- -------- --------
Net investment loss ..................................... (.058) (.042) (.022) (.028) (.015)
Unit value at beginning of year ......................... 3.907 3.389 2.623 2.253 1.706
Net realized and change in unrealized gains ............. .522+ .560 .788 .398 .562
-------- -------- -------- -------- --------
Unit value at end of year ............................... $ 4.371 $ 3.907 $ 3.389 $ 2.623 $ 2.253
======== ======== ======== ======== ========
SIGNIFICANT RATIOS AND ADDITIONAL DATA:
Net increase in unit value .............................. $ .46 $ .52 $ .77 $ .37 $ .55
Ratio of operating expenses to average net assets* ...... 2.85% 2.85% 2.85% 2.84% 2.83%
Ratio of net investment loss to average net assets* ..... (1.49)% (1.21)% (.76)% (1.13)% (.74)%
Number of units outstanding at end of year (thousands) .. 15,180 16,452 25,865 30,167 45,575
Portfolio turnover rate ................................. 85% 113% 92% 98% 113%
</TABLE>
* Annualized
+ Includes a reimbursement of $56,058 from the investment adviser, TIMCO as
more fully described in note 2.
5. SUBSEQUENT EVENT
On February 1, 2000, $9,493,972 of the net assets of The Travelers Timed
Aggressive Stock Account for Variable Annuities were transferred to The
Travelers Timed Short-Term Bond Account for Variable Annuities, as a result of a
transfer order made by a market timer on behalf of subscribing participants.
-35-
<PAGE> 38
THE TRAVELERS TIMED AGGRESSIVE STOCK ACCOUNT
FOR VARIABLE ANNUITIES
STATEMENT OF INVESTMENTS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
NO. OF MARKET
SHARES VALUE
----------------- -----------------
<S> <C> <C>
COMMON STOCKS (76.4%)
AIRLINES (0.2%)
Alaska Air Group, (A) 2,900 $ 101,862
-------------------
AUTOMOTIVE (1.5%)
Arvin Industries, Inc. 4,200 119,175
Borg-Warner Automotive, Inc. 2,800 113,400
Federal-Mogul Corp. 3,700 74,462
Harley Davidson, Inc. 7,340 470,219
Lear Corporation (A) 6,000 192,000
-------------------
969,256
-------------------
BANKING (4.7%)
AmSouth Bancorp 4,012 77,482
Associated Banc-Corp. 5,075 173,978
Charter One Financial, Inc. 9,795 187,329
City National Corp. 2,400 79,050
Compass Bancshares, Inc. 5,700 127,360
Dime Bancorp 5,300 80,162
First Security Corp. 11,850 302,546
First Tennesse National Corp. 6,100 173,850
First Virginia Banks, Inc. 2,100 90,300
Hibernia Corp. 8,200 87,125
Marshall & Ilsley Corp. 6,700 420,844
Mercantile Bankshares Corp. 6,850 218,986
North Fork Bancorp. 11,600 203,000
Old Kent Financial Corp. 2,540 89,852
Pacific Century Financial 9,200 171,925
Provident Financial Group 5,700 204,844
Sovereign Bancorp, Inc. 11,700 87,201
Wilmington Trust Corp. 1,400 67,550
Zions Bancorp 4,100 242,669
-------------------
3,086,053
-------------------
BROKERAGE (0.6%)
A.G. Edwards, Inc. 6,050 193,978
T. Rowe Price & Associates, Inc. 4,900 180,688
-------------------
374,666
-------------------
BUILDING MATERIALS (0.7%)
Martin Marietta Materials, Inc. 3,200 131,200
Southdown, Inc. 4,000 206,500
USG Corp. 2,500 117,813
-------------------
455,513
-------------------
CAPITAL GOODS (1.2%)
American Standard Co. (A) 5,900 270,663
Cordant Technologies, Inc. 4,320 142,560
Tecumseh Products Co. 3,400 160,331
Waters Corp. (A) 3,200 169,600
York International Corp. 2,900 79,569
-------------------
822,723
-------------------
CHEMICALS (2.0%)
Albemarle Corp. 8,900 170,769
CK Witco Corp. 8,900 119,038
Cabot Corp. 3,600 73,350
Georgia Gulf Corp. 1,600 48,700
IMC Global 7,200 117,900
Ivax Corp. (A) 8,000 206,000
Lubrizol Corp. 5,800 179,075
Lyondell Petrochemical Co. 6,400 81,600
Mylan Laboratories, Inc. 5,400 136,012
Solutia, Inc. 12,600 194,512
-------------------
1,326,956
-------------------
CONGLOMERATES (0.1%)
Olin Corp. 2,700 $ 53,494
-------------------
CONSTRUCTION MACHINERY (0.1%)
Briggs & Stratton Corp. 1,800 96,525
-------------------
CONSUMER (1.4%)
Dial Corp. 5,000 121,563
Furniture Brands, Inc. (A) 5,300 116,600
ACNielsen Corp. (A) 5,700 140,362
DST Systems, Inc. (A) 4,700 358,669
Navigant Consulting Co. (A) 5,000 54,375
Outback Steakhouse, Inc. (A) 6,100 158,600
-------------------
950,169
-------------------
DEFENSE (0.3%)
Litton Industries (A) 4,100 204,487
-------------------
ELECTRIC UTILITIES (4.7%)
Allegheny Energy, Inc. 4,000 107,750
Alliant Energy Corp. 6,000 165,000
Calpine Corp. (A) 5,600 358,400
Constellation Energy Group 3,100 89,900
DPL, Inc. 10,200 176,587
Energy East 9,100 189,394
Mid American Energy
Holdings Co. (A) 4,600 154,962
Minnesota Power, Inc. 8,700 147,356
Montana Power Co. 8,000 288,500
New England Electronic Systems 2,000 103,500
Nisource, Inc. 6,400 114,400
Northeast Utilities 5,700 117,206
OGE Energy Corp. 8,600 163,400
Pinnacle West Capital Corp. 3,000 91,688
Potomac Electric Power Co. 4,500 103,219
Public Service Of New Mexico 9,200 149,500
SCANA Corp. 8,000 215,000
TECO Energy, Inc. 11,500 213,469
Wisconsin Energy Corp. 7,300 140,525
-------------------
3,089,756
-------------------
ENERGY (0.4%)
Devon Energy Corp. 4,100 134,788
Hanover Compressor Holdings (A) 1,600 60,400
Ocean Energy, Inc. (A) 8,600 66,650
Pioneer Natural Resources (A) 5,900 52,731
-------------------
314,569
-------------------
ENTERTAINMENT (0.5%)
Electronic Arts, Inc. (A) 4,000 336,250
-------------------
FINANCE (1.9%)
Allmerica Financial Corp. 4,900 272,562
American Financial Group Holding 4,900 129,238
Comdisco, Inc. 7,400 275,650
Countrywide Credit Industries, Inc. 1,900 47,975
E*Trade Group (A) 10,700 279,872
Finova Group, Inc. 4,100 145,550
Greenpoint Financial Co. 6,000 142,875
-------------------
1,293,722
-------------------
</TABLE>
-36-
<PAGE> 39
STATEMENT OF INVESTMENTS - CONTINUED
<TABLE>
<CAPTION>
NO. OF MARKET
SHARES VALUE
----------------- -----------------
<S> <C> <C>
FOOD (2.5%)
Brinker International, Inc. (A) 7,200 $ 172,800
Dean Foods Co. 3,200 127,200
Flowers Industries, Inc. 4,800 76,500
Hormel Foods 5,600 227,500
IBP, Inc. 8,400 151,200
McCormick & Co. 5,000 148,750
Starbucks Corp. (A) 7,600 184,538
Suiza Foods Co. (A) 5,000 198,125
Tyson Foods, Inc. 14,300 232,375
U.S. Foodservice, Inc. (A) 9,500 159,125
-------------------
1,678,113
-------------------
GAMING (0.3%)
Park Place Entertainment (A) 13,700 171,250
-------------------
HEALTHCARE (1.9%)
Beckman Coulter, Inc. 4,700 239,112
Express Scripts, Inc. (A) 2,300 147,703
Health Management
Associates, Inc. (A) 11,775 157,491
Minimed, Inc. (A) 1,600 117,300
PacifiCare Health Systems (A) 2,300 121,972
Trigon Healthcare, Inc. (A) 5,300 156,350
Ventiv Health, Inc. (A) 1,733 15,976
VISX, Inc. (A) 5,300 274,441
-------------------
1,230,345
-------------------
HOME CONSTRUCTION (0.1%)
Clayton Homes, Inc. 6,337 58,221
-------------------
INDEPENDENT ENERGY (0.2%)
Noble Affiliates, Inc. 3,000 64,313
Santa Fe Snyder Corp. (A) 9,800 78,400
-------------------
142,713
-------------------
INDUSTRIAL (2.9%)
Cintas Corp. 5,400 286,707
Convergys Corp. (A) 8,100 249,075
Herman Miller, Inc. 5,600 128,625
Hillenbrand Industries, Inc. 1,500 47,531
Minerals Technologies, Inc. 1,800 72,112
Modis Professional Services, Inc. (A) 11,100 158,175
Novellus Systems, Inc. (A) 2,800 343,088
Pentair, Inc. 3,700 142,450
SPX Corp. (A) 1,600 129,300
Teleflex, Inc. 3,700 115,856
UCAR International, Inc. (A) 2,400 42,750
Viad Corp. 6,000 167,250
-------------------
1,882,919
-------------------
INSURANCE (1.6%)
Ambac Financial Group, Inc. 4,400 229,625
Hartford Life, Inc. 2,000 88,000
Old Republic International Corp. 6,250 85,156
Oxford Health Plans, Inc. (A) 4,200 53,419
PMI Group, Inc. 4,900 239,181
Protective Life Corp. 4,700 149,519
Reliastar Financial Corp. 5,000 195,938
-------------------
1,040,838
-------------------
LODGING (0.3%)
Mandalay Resort Group (A) 10,400 209,300
-------------------
MEDIA CABLE (1.3%)
Cox Communications, Inc. (A) 1,989 $ 102,433
Media General, Inc. 2,900 150,800
Univision Communications, Inc. (A) 5,700 582,469
-------------------
835,702
-------------------
MEDIA NON-CABLE (2.1%)
A.H. Belo Corp. 8,500 162,031
Chris Craft Industries, Inc. (A) 1,800 129,825
Hispanic Broadcasting Corp. (A) 2,600 239,769
Houghton Mifflin Co. 4,300 181,406
Pixar, Inc. (A) 1,600 56,550
Readers Digest Association, Inc. 5,200 152,100
Snyder Communications 5,200 100,100
Snyder Communications (A) 1,300 15,966
Washington Post Co. 610 339,084
-------------------
1,376,831
-------------------
METALS (0.3%)
Ryerson Tull, Inc. 8,500 165,219
-------------------
NATURAL GAS DISTRIBUTORS (0.8%)
KeySpan Corp. 10,000 231,875
MCN Energy Group, Inc. 2,800 66,500
National Fuel Gas Co. 4,700 218,550
-------------------
516,925
-------------------
OIL FIELD (2.2%)
BJ Services Co. (A) 3,700 154,706
Ensco International, Inc. 7,600 173,850
Global Marine, Inc. (A) 8,900 147,963
Nabors Industries, Inc. (A) 7,500 232,031
Noble Drilling Corp. (A) 6,900 225,975
Smith International, Inc. (A) 2,600 129,188
Tidewater, Inc. 3,000 108,000
Varco International, Inc. (A) 4,100 41,769
Weatherford International, Inc. (A) 5,500 219,656
-------------------
1,433,138
-------------------
PAPER (1.4%)
Bowater, Inc. 2,500 135,781
Consolidated Papers, Inc. 7,600 241,775
Georgia-Pacific Group 7,700 189,612
P. H. Glatfelter Co. 4,200 61,163
Reynolds & Reynolds Co. 8,700 195,750
Sonoco Products Co. 4,750 108,063
-------------------
932,144
-------------------
PHARMACEUTICALS (3.5%)
Bergen Brunswig Corp. 13,100 108,894
Chiron Corp. (A) 9,900 419,204
Forest Labs, Inc. (A) 5,400 331,762
Genzyme Corp. (A) 5,200 233,675
Gilead Sciences, Inc. (A) 2,200 118,937
ICN Pharmaceuticals, Inc. 4,200 106,313
Medimmune, Inc. (A) 4,000 663,250
Millennium Pharmaceuticals (A) 1,700 207,241
Sepracor, Inc. (A) 1,500 149,062
-------------------
2,338,338
-------------------
</TABLE>
-37-
<PAGE> 40
STATEMENT OF INVESTMENTS - CONTINUED
<TABLE>
<CAPTION>
NO. OF MARKET
SHARES VALUE
---------------- -----------------
<S> <C> <C>
RAILROADS (0.2%)
Trinity Industries 4,500 $ 127,969
--------------------
REFINING (0.6%)
Murphy Oil Corp. 2,300 131,962
Tosco Corp. 3,300 89,719
Ultramar Diamond Shamrock Corp. 7,200 163,350
--------------------
385,031
--------------------
RETAILERS (4.7%)
Abercrombie & Fitch Co. (A) 8,000 213,500
American Outfitters, Inc. (A) 2,900 130,500
Apollo Group, Inc. (A) 3,900 78,122
Barnes & Noble, Inc. (A) 3,200 66,000
Bed Bath & Beyond, Inc. (A) 2,700 93,572
BJs Wholesale Club, Inc. (A) 6,700 244,550
Callaway Golf Co. 11,700 206,944
CDW Computer Centers, Inc. (A) 1,300 102,172
Dollar Tree Stores (A) 2,600 125,856
Family Dollar Stores, Inc. 15,400 251,212
Leggett & Platt, Inc. 4,200 90,037
Meritor Auto Co. 7,700 149,187
OfficeMax, Inc. (A) 10,180 55,990
Ross Stores, Inc. 9,900 178,819
Saks, Inc. (A) 12,000 186,750
Sothebys Holdings, Inc. 4,900 147,000
Tiffany & Co. 5,100 455,175
Westwood One, Inc. (A) 2,800 212,800
Williams-Sonoma, Inc. (A) 3,100 142,600
--------------------
3,130,786
--------------------
SERVICES (5.3%)
Altera Corp. (A) 9,500 470,844
Biogen, Inc. (A) 8,400 709,538
Cadence Design Systems, Inc. (A) 10,650 255,600
Concord EFS, Inc. (A) 8,900 228,897
Informix Corp. (A) 24,100 276,398
International Speedway 1,300 65,041
Lincare Holdings, Inc. (A) 6,100 211,785
Manpower, Inc. 6,200 233,275
Pall Corp. 4,200 90,563
Robert Half International, Inc. (A) 7,900 225,644
Stryker Corp. 4,700 327,237
Sungard Data Systems, Inc. (A) 5,800 137,750
Sybron Corp. (A) 5,600 138,250
Xilinx, Inc. (A) 2,200 100,031
--------------------
3,470,853
--------------------
SUPERMARKETS (0.3%)
Hannaford Brothers Co. 3,200 221,800
--------------------
TRANSPORTATION (0.8%)
Airborne Freight Corp. 9,273 $ 204,006
CNF Transportation 4,300 148,350
GATX Corp. 5,300 178,875
--------------------
531,231
--------------------
TECHNOLOGY (19.8%)
American Power Conversion Corp. (A) 13,900 366,179
Analog Devices, Inc. (A) 1,200 111,600
Arrow Electronics, Inc. (A) 6,900 175,088
Atmel Corp. (A) 14,200 420,232
Avnet, Inc. 2,300 139,150
Checkfree Holdings Corp. (A) 3,300 347,325
Cirrus Logic, Inc. (A) 9,700 128,829
Compuware Corp. (A) 2,800 104,213
Comverse Technology, Inc. (A) 1,050 151,955
Cypress Semiconductor (A) 9,100 294,612
Fiserv, Inc. (A) 3,825 146,306
Imation Corp. (A) 4,700 157,744
Integrated Device
Technologies, Inc. (A) 8,500 246,235
Intuit, Inc. (A) 12,000 718,876
Jabil Circuit, Inc. (A) 4,200 306,600
J D Edwards & Co. (A) 2,300 68,784
Legato Systems, Inc. (A) 4,900 337,028
Lexmark International
Group, Inc. (A) 900 81,450
Linear Technology Corp. 6,800 486,625
Mark IV Industries, Inc. 5,000 88,438
Maxim Integrated Products (A) 14,800 697,913
Microchip Technology, Inc. (A) 2,700 185,203
Molex, Inc. 1,800 101,981
NCR Corp. (A) 6,200 234,825
Networks Associates, Inc. (A) 5,000 133,282
Nova Corp. 5,900 186,219
Qlogic Corp. (A) 2,600 415,756
Quantum Corp. (A) 9,700 146,712
QUALCOMM, Inc. (A) 800 140,875
Rational Software Corp. (A) 6,500 319,922
Safeguard Scientifics, Inc. (A) 600 97,238
Sanmina Corp. (A) 4,000 398,500
SCI Systems, Inc. (A) 4,700 386,281
Siebel Systems, Inc. (A) 12,200 1,026,325
Sterling Commerce, Inc. (A) 3,000 102,188
Storage Technology Corp. (A) 5,000 92,188
Symantec Corp. (A) 2,100 123,309
Symbol Technologies, Inc. 5,700 362,306
SynopSystems, Inc. (A) 2,700 179,803
Technology Data Corp. (A) 2,600 70,606
Veritas Software Corp. (A) 14,400 2,060,551
Vishay Intertechnology, Inc. (A) 8,125 256,953
Vitesse Semiconductor Corp. (A) 9,000 471,657
--------------------
13,067,862
--------------------
</TABLE>
-38-
<PAGE> 41
STATEMENT OF INVESTMENTS - CONTINUED
<TABLE>
<CAPTION>
NO. OF MARKET
SHARES VALUE
----------------- -----------------
<S> <C> <C>
TELECOMMUNICATIONS (2.1%)
Adtran, Inc. (A) 3,100 $ 159,747
Broadwing, Inc. 12,800 472,000
CenturyTel, Inc. 2,925 138,572
Qwest Communications
International (A)
Telephone & Data Systems, Inc. 3,200 403,200
Winstar Communications, Inc. (A) 1,100 82,706
-------------------
1,380,835
-------------------
TEXTILE (0.6%)
Jones Apparel Group, Inc. (A) 7,300 198,013
Shaw Industries, Inc. 7,100 109,606
Westpoint Stevens, Inc. 5,200 91,000
-------------------
398,619
-------------------
TOBACCO (0.2%)
R.J. Reynolds Tobacco
Holdings, Inc. 5,400 95,175
Universal Corp. 1,600 36,500
-------------------
131,675
-------------------
UTILITIES (0.1%)
IPALCO Enterprises, Inc. 4,500 76,781
-------------------
TOTAL COMMON STOCKS
(COST $44,502,785) 50,411,439
-------------------
<CAPTION>
PRINCIPAL
AMOUNT
-----------------
<S> <C> <C>
SHORT-TERM INVESTMENTS (23.6%)
COMMERCIAL PAPER (22.0%)
Federal Home Loan Mortgage Corp.,
5.72% due March 16, 2000 $ 3,000,000 2,991,198
GE Capital Corp.,
6.13% due February 10, 2000 2,500,000 2,483,990
Household Financial Corp.,
4.06% due January 3, 2000 903,000 902,799
J.P. Morgan & Company,
6.10% due February 7, 2000 2,500,000 2,485,195
Merrill Lynch & Co., Inc.,
6.11% due February 24, 2000 2,500,000 2,478,292
Morgan Stanley Dean Witter & Co.,
6.41% due February 28, 2000 1,915,000 1,897,110
Pacific Gas & Electric Co.,
6.48% due January 31, 2000 1,250,000 1,243,994
-------------------
14,482,578
-------------------
U.S. TREASURY (1.6%)
United States of America Treasury,
5.17% due March 16, 2000 (B) 300,000 296,356
United States of America Treasury,
4.81% due April 27, 2000 (B) 775,000 761,928
-------------------
1,058,284
-------------------
TOTAL SHORT-TERM
INVESTMENTS (COST $15,539,086) 15,540,862
-------------------
NOTIONAL
VALUE
-----------------
FUTURES CONTRACTS (0.0%)
S&P 400 Mid Cap Index,
Exp. March, 2000 (C) $ 15,271,100 -
-------------------
TOTAL INVESTMENTS (100%)
(COST $60,041,871) (D) $ 65,952,301
===================
</TABLE>
NOTES
(A) Non-income Producing Security.
(B) Par value of $900,000 pledged to cover margin deposits on futures
contracts.
(C) As more fully discussed in Note 1 to the financial statements, it is
Account TAS's practice to hold cash and cash equivalents (including
short-term investments) at least equal to the underlying face value, or
notional value, of outstanding purchased futures contracts, less the
initial margin. Account TAS uses futures contracts as a substitute for
holding individual securities.
(D) At December 31, 1999, net unrealized appreciation for all securities was
$5,910,430. This consisted of aggregate gross unrealized appreciation
for all securities in which there was an excess of market value over
cost of $4,830,874 and aggregate gross unrealized depreciation for all
securities in which there was an excess of cost over market value of
$10,741,304.
See Notes to Financial Statements
-39-
<PAGE> 42
INDEPENDENT AUDITORS' REPORT
To the Board of Managers and the Owners of Variable Annuity Contracts of The
Travelers Timed Aggressive Stock Account for Variable Annuities:
We have audited the accompanying statement of assets and liabilities of The
Travelers Timed Aggressive Stock Account for Variable Annuities, including the
statement of investments, as of December 31, 1999, and the related statements of
operations, changes in net assets and the selected per unit data and ratios for
the year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit. The accompanying statement of changes
in net assets for the year ended December 31, 1998 and selected per unit data
and ratios for each of the years in the four-year period ended December 31, 1998
were audited by other auditors whose report thereon dated February 15, 1999,
expressed an unqualified opinion on that statement of changes in net assets and
those selected per unit data and ratios.
We conducted our audit 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 investment securities owned as of December 31, 1999, by
correspondence with the custodian and brokers. 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 Timed Aggressive
Stock Account for Variable Annuities as of December 31, 1999, and the results of
its operations, changes in net assets and the selected per unit data and ratios
for the year then ended, in conformity with generally accepted accounting
principles.
/s/ KPMG LLP
Hartford, Connecticut
February 18, 2000
-40-
<PAGE> 43
Investment Advisers
---------------------
THE TRAVELERS INVESTMENT MANAGEMENT COMPANY
Hartford, Connecticut
THE TRAVELERS TIMED GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES
THE TRAVELERS TIMED SHORT-TERM BOND ACCOUNT FOR VARIABLE ANNUITIES
THE TRAVELERS TIMED AGGRESSIVE STOCK ACCOUNT FOR VARIABLE ANNUITIES
Independent Accountants
-----------------------
KPMG LLP
Hartford, Connecticut
Custodian
----------------------
THE CHASE MANHATTAN BANK, N.A.
New York, New York
This report is prepared for the general information of contract owners and is
not an offer of units of The Travelers Timed Growth and Income Stock Account for
Variable Annuities, The Travelers Timed Short-Term Bond Account for Variable
Annuities, or The Travelers Timed Aggressive Stock Account for Variable
Annuities. It should not be used in connection with any offer except in
conjunction with the Universal Annuity Prospectus which contains all pertinent
information, including the applicable sales commissions.
VG-182 (Annual) (12-99) Printed in U.S.A.
