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Previous: MORGAN STANLEY INDIA INVESTMENT FUND INC, SC 13G, 1998-02-20 |
Next: JDN REALTY CORP, 424B5, 1998-02-20 |
<PAGE> 1
ANNUAL REPORT
DECEMBER 31, 1997
THE TRAVELERS FUND BD
FOR VARIABLE ANNUITIES
[TRAVELERS LIFE & ANNUITY LOGO]
The Travelers Insurance Company
The Travelers Life and Annuity Company
One Tower Square
Hartford, CT 06183
<PAGE> 2
THE TRAVELERS FUND BD
FOR VARIABLE ANNUITIES
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C> <C>
ASSETS:
Investments in eligible funds at market value:
Travelers Series Fund Inc., 135,192,899 shares (cost $1,087,810,499) $1,405,207,502
The Travelers Series Trust, 2,275,828 shares (cost $26,559,568) 28,584,396
Greenwich Street Series Fund, 8,896,982 shares (cost $125,872,665) 156,764,826
Smith Barney Concert Allocation Series Inc., 973,535 shares (cost $10,543,838) 10,883,052
---------------
Total Investments (cost $1,250,786,570) $1,601,439,776
Receivables:
Dividends 96,514
Purchase payments and transfers from other Travelers accounts 1,286,970
Other assets 660
--------------
Total Assets 1,602,823,920
--------------
LIABILITIES:
Payable for contract surrenders and transfers to other Travelers accounts 1,105,055
Accrued liabilities 106,246
---------------
Total Liabilities 1,211,301
---------------
NET ASSETS: $1,601,612,619
===============
</TABLE>
See Notes to Financial Statements
-1-
<PAGE> 3
THE TRAVELERS FUND BD
FOR VARIABLE ANNUITIES
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends $ 9,991,782
EXPENSES:
Insurance charges $ 14,861,228
Administrative fees 2,087,661
-------------
Total expenses 16,948,889
------------
Net investment loss (6,957,107)
-------------
REALIZED GAIN AND CHANGE IN UNREALIZED GAIN ON
INVESTMENTS:
Realized gain from investment transactions:
Proceeds from investments sold 126,237,914
Cost of investments sold 109,741,686
-------------
Net realized gain 16,496,228
Change in unrealized gain on investments:
Unrealized gain at December 31, 1996 149,706,480
Unrealized gain at December 31, 1997 350,653,206
-------------
Net change in unrealized gain for the year 200,946,726
-------------
Net realized gain and change in unrealized gain 217,442,954
-------------
Net increase in net assets resulting from operations $ 210,485,847
=============
</TABLE>
See Notes to Financial Statements
-2-
<PAGE> 4
THE TRAVELERS FUND BD
FOR VARIABLE ANNUITIES
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (6,957,107) $ 19,566,875
Net realized gain from investment transactions 16,496,228 2,514,864
Net change in unrealized gain on investments 200,946,726 116,620,455
------------------ -----------------
Net increase in net assets resulting from operations 210,485,847 138,702,194
------------------ -----------------
UNIT TRANSACTIONS:
Participant purchase payments
(applicable to 173,653,228 and 309,302,224 units, respectively) 247,618,592 383,170,981
Participant transfers from other Travelers accounts
(applicable to 197,508,694 and 144,063,150 units, respectively) 271,785,612 180,135,696
Administrative charges
(applicable to 161,299 and 151,433 units, respectively) (255,069) (194,398)
Contract surrenders
(applicable to 30,642,711 and 16,185,043 units, respectively) (46,085,851) (20,667,720)
Participant transfers to other Travelers accounts
(applicable to 166,674,925 and 97,380,805 units, respectively) (209,625,801) (112,209,151)
Other payments to participants
(applicable to 8,039,959 and 6,579,537 units, respectively) (12,044,229) (8,630,013)
------------------ -----------------
Net increase in net assets resulting from unit transactions 251,393,254 421,605,395
------------------ -----------------
Net increase in net assets 461,879,101 560,307,589
NET ASSETS:
Beginning of year 1,139,733,518 579,425,929
------------------ -----------------
End of year $ 1,601,612,619 $ 1,139,733,518
================== =================
</TABLE>
See Notes to Financial Statements
-3-
<PAGE> 5
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Travelers Fund BD for Variable Annuities ("Fund BD") is a separate account
of The Travelers Insurance Company ("The Travelers"), an indirect wholly owned
subsidiary of Travelers Group Inc., and is available for funding certain
variable annuity contracts issued by The Travelers. Fund BD is registered under
the Investment Company Act of 1940, as amended, as a unit investment trust.
Participant purchase payments applied to Fund BD are invested in one or more
eligible funds in accordance with the selection made by the contract owner. As
of December 31, 1997, the eligible funds available under Fund BD are: Alliance
Growth Portfolio, Van Kampen American Capital Enterprise Portfolio, TBC Managed
Income Portfolio, G.T. Global Strategic Income Portfolio, Smith Barney High
Income Portfolio, Smith Barney International Equity Portfolio, Smith Barney
Income and Growth Portfolio, Smith Barney Money Market Portfolio, Putnam
Diversified Income Portfolio, Smith Barney Pacific Basin Portfolio, MFS Total
Return Portfolio, and AIM Capital Appreciation Portfolio of Travelers Series
Fund Inc.; MFS Emerging Growth Portfolio of The Travelers Series Trust; Total
Return Portfolio of Greenwich Street Series Fund (formerly Smith Barney Series
Fund); and Select High Growth Portfolio, Select Growth Portfolio, Select
Balanced Portfolio, Select Conservative Portfolio and Select Income Portfolio of
Smith Barney Concert Allocation Series Inc. Travelers Series Fund Inc. and Smith
Barney Concert Allocation Series Inc. are incorporated under Maryland law. The
Travelers Series Trust and Greenwich Street Series Fund are registered as
Massachusetts business trusts. All eligible funds are managed by affiliates of
The Travelers. Not all funds may be available in all states or to all contract
owners.
The following is a summary of significant accounting policies consistently
followed by Fund BD in the preparation of its financial statements.
SECURITY VALUATION. Investments are valued daily at the net asset values per
share of the underlying funds.
SECURITY TRANSACTIONS. Security transactions are accounted for on the trade
date. Dividend income is recorded on the ex-dividend date.
FEDERAL INCOME TAXES. The operations of Fund BD form a part of the total
operations of The Travelers and are not taxed separately. The Travelers is taxed
as a life insurance company under the Internal Revenue Code of 1986, as amended
(the "Code"). Under existing federal income tax law, no taxes are payable on the
investment income of Fund BD. Fund BD 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 were
$372,056,250 and $126,237,914, respectively, for the year ended December 31,
1997. Realized gains and losses from investment transactions are reported on an
identified cost basis. The cost of investments in eligible funds was
$1,250,786,570 at December 31, 1997. Gross unrealized appreciation for all
investments at December 31, 1997 was $354,115,223. Gross unrealized depreciation
for all investments at December 31, 1997 was $3,462,017.
-4-
<PAGE> 6
NOTES TO FINANCIAL STATEMENTS - CONTINUED
3. CONTRACT CHARGES
Insurance charges are paid for the mortality and expense risks assumed by The
Travelers. For contracts with a standard death benefit provision, these charges
are equivalent to 1.02% of the average net assets of Fund BD on an annual basis.
For contracts with an enhanced death benefit provision, these charges are
equivalent to 1.30% of the average net assets of Fund BD on an annual basis.
Administrative fees are paid for administrative expenses incurred by The
Travelers. This charge is equivalent to 0.15% of the average net assets of Fund
BD on an annual basis.
For contracts in the accumulation phase with a contract value less than $40,000,
an annual charge of $30 (prorated for partial periods) is deducted from
participant account balances and paid to The Travelers to cover contract
administrative charges.
No sales charge is deducted from participant purchase payments when they are
received. However, The Travelers generally assesses a contingent deferred sales
charge of up to 6% if a participant's purchase payment is surrendered within six
years of its payment date. Contract surrender payments include $1,016,421 and
$407,279 of contingent deferred sales charges for the years ended December 31,
1997 and 1996, respectively.
-5-
<PAGE> 7
NOTES TO FINANCIAL STATEMENTS--CONTINUED
4. NET CONTRACT OWNERS' EQUITY
<TABLE>
<CAPTION>
DECEMBER 31, 1997
-------------------------------------------------------
ACCUMULATION ANNUITY UNIT NET
UNITS UNITS VALUE ASSETS
----- ----- ----- ------
<S> <C> <C> <C> <C>
TRAVELERS SERIES FUND INC.
Alliance Growth Portfolio
Standard 144,292,812 13,916 $ 2.276 $328,468,830
Enhanced 30,063,294 -- 2.254 67,755,783
Van Kampen American Capital Enterprise Portfolio
Standard 55,871,473 -- 2.103 117,512,237
Enhanced 13,032,150 -- 2.083 27,140,339
TBC Managed Income Portfolio
Standard 17,886,675 -- 1.261 22,550,485
Enhanced 3,090,967 -- 1.248 3,858,804
G.T. Global Strategic Income Portfolio
Standard 12,826,830 7,275 1.397 17,927,028
Enhanced 2,883,105 -- 1.383 3,987,606
Smith Barney High Income Portfolio
Standard 42,964,010 -- 1.463 62,840,288
Enhanced 8,914,618 11,992 1.448 12,927,635
Smith Barney International Equity Portfolio
Standard 87,384,896 25,871 1.240 108,414,825
Enhanced 18,730,554 -- 1.228 23,002,327
Smith Barney Income and Growth Portfolio
Standard 71,149,294 -- 1.913 136,076,848
Enhanced 15,382,871 -- 1.894 29,130,724
Smith Barney Money Market Portfolio
Standard 38,096,919 -- 1.140 43,436,024
Enhanced 8,609,673 9,223 1.129 9,730,021
Putnam Diversified Income Portfolio
Standard 51,751,252 17,907 1.332 68,970,333
Enhanced 12,712,755 11,025 1.319 16,784,534
Smith Barney Pacific Basin Portfolio
Standard 10,573,470 10,986 0.700 7,404,811
Enhanced 3,228,190 -- 0.693 2,236,205
MFS Total Return Portfolio
Standard 83,810,525 18,274 1.648 138,162,176
Enhanced 17,373,326 -- 1.632 28,352,172
AIM Capital Appreciation Portfolio
Standard 91,233,697 -- 1.206 110,022,870
Enhanced 15,590,753 -- 1.198 18,684,637
THE TRAVELERS SERIES TRUST
MFS Emerging Growth Portfolio
Standard 19,165,838 -- 1.204 23,079,313
Enhanced 4,600,192 -- 1.200 5,521,440
GREENWICH STREET SERIES FUND
Total Return Portfolio
Standard 75,811,595 -- 1.790 135,717,180
Enhanced 11,852,617 -- 1.775 21,034,830
SMITH BARNEY CONCERT ALLOCATION SERIES INC.
Select High Growth Portfolio
Standard 602,892 -- 1.090 656,883
Enhanced 230,988 -- 1.087 251,101
Select Growth Portfolio
Standard 2,261,767 -- 1.099 2,486,125
Enhanced 1,403,455 -- 1.097 1,539,181
Select Balanced Portfolio
Standard 3,114,900 -- 1.093 3,404,772
Enhanced 777,806 -- 1.091 848,265
Select Conservative Portfolio
Standard 640,107 -- 1.108 709,010
Enhanced 188,414 -- 1.105 208,247
Select Income Portfolio
Standard 425,391 -- 1.106 470,457
Enhanced 279,345 -- 1.104 308,273
-----------
Net Contract Owners' Equity $1,601,612,619
==============
</TABLE>
-6-
<PAGE> 8
NOTES TO FINANCIAL STATEMENTS--CONTINUED
5. STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>
INVESTMENT OPTIONS NO. OF MARKET
SHARES VALUE
------------------- -------------------
<S> <C> <C>
TRAVELERS SERIES FUND INC. (87.7%)
Alliance Growth Portfolio (Cost $260,522,008) 18,305,318 $ 396,310,131
Van Kampen American Capital Enterprise Portfolio (Cost $102,564,107) 7,115,116 144,650,317
TBC Managed Income Portfolio (Cost $24,513,523) 2,249,351 26,407,384
G.T. Global Strategic Income Portfolio (Cost $19,357,902) 1,722,888 21,984,053
Smith Barney High Income Portfolio (Cost $65,033,343) 5,616,738 75,713,633
Smith Barney International Equity Portfolio (Cost $115,505,604) 10,235,175 132,033,755
Smith Barney Income and Growth Portfolio (Cost $118,852,689) 8,660,484 165,155,439
Smith Barney Money Market Portfolio (Cost $52,211,639) 52,211,639 52,211,639
Putnam Diversified Income Portfolio (Cost $78,013,256) 6,883,005 85,762,238
Smith Barney Pacific Basin Portfolio (Cost $13,301,097) 1,360,869 9,839,080
MFS Total Return Portfolio (Cost $127,242,368) 10,430,108 166,464,516
AIM Capital Appreciation Portfolio (Cost $110,692,963) 10,402,208 128,675,317
------------------- -------------------
Total (Cost $1,087,810,499) 135,192,899 1,405,207,502
------------------- -------------------
THE TRAVELERS SERIES TRUST (1.8%)
MFS Emerging Growth Portfolio
Total (Cost $26,559,568) 2,275,828 28,584,396
------------------- -------------------
GREENWICH STREET SERIES FUND (9.8%)
Total Return Portfolio
Total (Cost $125,872,665) 8,896,982 156,764,826
------------------- -------------------
SMITH BARNEY CONCERT ALLOCATION SERIES INC. (0.7%)
Select High Growth Portfolio (Cost $890,722) 82,475 908,045
Select Growth Portfolio (Cost $3,908,192) 359,748 4,025,583
Select Balanced Portfolio (Cost $4,107,069) 379,761 4,253,321
Select Conservative Portfolio (Cost $887,097) 81,830 917,319
Select Income Portfolio (Cost $750,758) 69,721 778,784
------------------- -------------------
Total (Cost $10,543,838) 973,535 10,883,052
------------------- -------------------
TOTAL INVESTMENT OPTIONS (100%)
(COST $1,250,786,570) $ 1,601,439,776
===================
</TABLE>
-7-
<PAGE> 9
NOTES TO FINANCIAL STATEMENTS--CONTINUED
6. SCHEDULE OF FUND BD OPERATIONS AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
VAN KAMPEN
AMERICAN CAPITAL
ALLIANCE GROWTH PORTFOLIO ENTERPRISE PORTFOLIO
------------------------------ ------------------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ - $ 9,816,609 $ - $ 289,639
-------------- -------------- -------------- --------------
EXPENSES:
Insurance charges 3,484,456 2,169,443 1,307,064 751,363
Administrative fees 489,067 303,331 182,856 104,909
-------------- -------------- -------------- --------------
Net investment income (loss) (3,973,523) 7,343,835 (1,489,920) (566,633)
-------------- -------------- -------------- --------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold 9,474,065 3,105,789 4,920,636 627,969
Cost of investments sold 5,149,051 2,042,913 2,725,362 435,377
-------------- -------------- -------------- --------------
Net realized gain (loss) 4,325,014 1,062,876 2,195,274 192,592
-------------- -------------- -------------- --------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year 55,466,067 13,022,560 15,559,508 2,189,023
Unrealized gain (loss) end of year 135,788,123 55,466,067 42,086,210 15,559,508
-------------- -------------- -------------- --------------
Net change in unrealized gain (loss) for the year 80,322,056 42,443,507 26,526,702 13,370,485
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets
resulting from operations 80,673,547 50,850,218 27,232,056 12,996,444
-------------- -------------- -------------- --------------
UNIT TRANSACTIONS:
Participant purchase payments 40,562,814 61,004,662 18,439,770 26,547,791
Participant transfers from other Travelers accounts 43,204,274 35,105,480 19,182,622 13,168,168
Administrative charges (61,775) (50,141) (20,788) (15,153)
Contract surrenders (10,464,529) (4,437,655) (3,078,021) (1,434,621)
Participant transfers to other Travelers accounts (23,241,706) (11,489,385) (8,857,958) (3,275,514)
Other payments to participants (2,805,494) (1,941,149) (767,624) (425,382)
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets resulting
from unit transactions 47,193,584 78,191,812 24,898,001 34,565,289
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets 127,867,131 129,042,030 52,130,057 47,561,733
NET ASSETS:
Beginning of year 268,357,482 139,315,452 92,522,519 44,960,786
-------------- -------------- -------------- --------------
End of year $ 396,224,613 $ 268,357,482 $ 144,652,576 $ 92,522,519
============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
TBC MANAGED
INCOME PORTFOLIO
------------------------------
1997 1996
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends $ - $ 902,359
-------------- ---------------
EXPENSES:
Insurance charges 250,737 199,423
Administrative fees 35,401 28,191
-------------- ---------------
Net investment income (loss) (286,138) 674,745
-------------- ---------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold 3,174,260 1,963,926
Cost of investments sold 2,802,179 1,832,633
-------------- ---------------
Net realized gain (loss) 372,081 131,293
-------------- ---------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year 19,488 392,297
Unrealized gain (loss) end of year 1,893,861 19,488
-------------- ---------------
Net change in unrealized gain (loss) for the year 1,874,373 (372,809)
-------------- ---------------
Net increase (decrease) in net assets
resulting from operations 1,960,316 433,229
-------------- ---------------
UNIT TRANSACTIONS:
Participant purchase payments 2,963,399 5,994,394
Participant transfers from other Travelers accounts 4,845,290 2,753,639
Administrative charges (3,244) (2,971)
Contract surrenders (858,530) (511,153)
Participant transfers to other Travelers accounts (3,106,909) (2,333,056)
Other payments to participants (154,410) (492,301)
-------------- ---------------
Net increase (decrease) in net assets resulting
from unit transactions 3,685,596 5,408,552
-------------- ---------------
Net increase (decrease) in net assets 5,645,912 5,841,781
NET ASSETS:
Beginning of year 20,763,377 14,921,596
-------------- ---------------
End of year $ 26,409,289 $ 20,763,377
============== ===============
</TABLE>
-8-
<PAGE> 10
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
G.T. GLOBAL STRATEGIC SMITH BARNEY SMITH BARNEY SMITH BARNEY INCOME
INCOME PORTFOLIO HIGH INCOME PORTFOLIO INTERNATIONAL EQUITY PORTFOLIO AND GROWTH PORTFOLIO
- ------------------------------- ------------------------------ ------------------------------ -----------------------------
1997 1996 1997 1996 1997 1996 1997 1996
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
$ - $ 1,482,115 $ - $ 2,988,430 $ - $ 116,506 $ - $ 2,370,046
- ---------------- ------------- -------------- - ------------ -------------- -------------- - ------------ -------------
221,824 152,906 686,729 438,067 1,403,546 985,087 1,469,919 829,045
31,000 21,322 96,473 61,547 197,028 137,895 206,252 116,092
- ---------------- ------------- -------------- -------------- -------------- -------------- -------------- --------------
(252,824) 1,307,887 (783,202) 2,488,816 (1,600,574) (1,006,476) (1,676,171) 1,424,909
- ---------------- ------------- -------------- -------------- -------------- -------------- -------------- --------------
2,546,069 401,825 2,222,703 1,164,676 11,259,771 747,728 4,461,821 588,953
2,087,531 352,981 1,757,816 1,038,182 8,709,043 623,511 2,571,412 402,651
- ---------------- ------------- -------------- -------------- -------------- -------------- -------------- --------------
458,538 48,844 464,887 126,494 2,550,728 124,217 1,890,409 186,302
- ---------------- ------------- -------------- -------------- -------------- -------------- -------------- --------------
1,652,102 607,235 2,832,124 684,556 16,240,626 2,744,085 16,956,550 5,357,875
2,626,151 1,652,102 10,680,290 2,832,124 16,528,151 16,240,626 46,302,750 16,956,550
- ---------------- ------------- -------------- -------------- -------------- -------------- -------------- --------------
974,049 1,044,867 7,848,166 2,147,568 287,525 13,496,541 29,346,200 11,598,675
- ---------------- ------------- -------------- -------------- -------------- -------------- -------------- --------------
1,179,763 2,401,598 7,529,851 4,762,878 1,237,679 12,614,282 29,560,438 13,209,886
- ---------------- ------------- -------------- -------------- -------------- -------------- -------------- --------------
3,488,404 5,288,275 14,060,749 19,997,369 13,876,805 28,969,297 22,844,428 35,890,271
2,136,289 2,019,060 9,013,865 5,668,106 24,134,536 17,689,935 19,144,090 12,396,460
(3,389) (3,076) (9,461) (6,641) (26,800) (24,379) (20,833) (15,158)
(895,332) (351,124) (2,497,808) (1,305,418) (4,180,951) (1,875,077) (4,621,117) (1,607,648)
(2,567,154) (559,024) (4,280,069) (3,650,986) (17,621,021) (4,085,495) (7,103,621) (2,526,626)
(214,379) (102,212) (845,148) (438,913) (980,736) (747,726) (896,987) (679,755)
- ---------------- ------------- -------------- -------------- -------------- -------------- -------------- --------------
1,944,439 6,291,899 15,442,128 20,263,517 15,201,833 39,926,555 29,345,960 43,457,544
- ---------------- ------------- -------------- -------------- -------------- -------------- -------------- --------------
3,124,202 8,693,497 22,971,979 25,026,395 16,439,512 52,540,837 58,906,398 56,667,430
18,790,432 10,096,935 52,795,944 27,769,549 114,977,640 62,436,803 106,301,174 49,633,744
- ---------------- ------------- -------------- -------------- -------------- -------------- -------------- --------------
$ 21,914,634 $ 18,790,432 $ 75,767,923 $ 52,795,944 $ 131,417,152 $ 114,977,640 $ 165,207,572 $ 106,301,174
================ ============= ============== ============== ============== ============== ============== ==============
</TABLE>
-9-
<PAGE> 11
NOTES TO FINANCIAL STATEMENTS - CONTINUED
6. SCHEDULE OF FUND BD OPERATIONS AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996 (CONTINUED)
<TABLE>
<CAPTION>
SMITH BARNEY PUTNAM
MONEY MARKET PORTFOLIO DIVERSIFIED INCOME PORTFOLIO
------------------------------- ----------------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 3,213,162 $ 2,820,044 $ - $ 3,684,313
-------------- -------------- ------------ ------------
EXPENSES:
Insurance charges 691,553 626,011 832,481 604,394
Administrative fees 97,140 87,663 115,895 83,790
-------------- -------------- ------------ ------------
Net investment income (loss) 2,424,469 2,106,370 (948,376) 2,996,129
-------------- -------------- ------------ ------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold 65,523,745 30,479,851 3,837,800 1,057,117
Cost of investments sold 65,523,745 30,479,851 3,295,001 930,448
-------------- -------------- ------------ ------------
Net realized gain (loss) - - 542,799 126,669
-------------- -------------- ------------ ------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year - - 2,471,090 1,447,661
Unrealized gain (loss) end of year - - 7,748,982 2,471,090
-------------- -------------- ------------ ------------
Net change in unrealized gain (loss) for the year - - 5,277,892 1,023,429
-------------- -------------- ------------ ------------
Net increase (decrease) in net assets
resulting from operations 2,424,469 2,106,370 4,872,315 4,146,227
-------------- -------------- ------------ ------------
UNIT TRANSACTIONS:
Participant purchase payments 30,762,234 61,862,581 9,218,127 21,052,427
Participant transfers from other Travelers accounts 62,016,267 22,480,733 11,219,304 9,058,694
Administrative charges (8,922) (8,289) (12,205) (10,681)
Contract surrenders (3,893,620) (2,619,667) (2,731,671) (1,515,474)
Participant transfers to other Travelers accounts (102,784,067) (66,134,151) (5,338,309) (3,040,509)
Other payments to participants (965,090) (387,857) (1,068,600) (683,955)
-------------- -------------- ------------ ------------
Net increase (decrease) in net assets resulting
from unit transactions (14,873,198) 15,193,350 11,286,646 24,860,502
-------------- -------------- ------------ ------------
Net increase (decrease) in net assets (12,448,729) 17,299,720 16,158,961 29,006,729
NET ASSETS:
Beginning of year 65,614,774 48,315,054 69,595,906 40,589,177
-------------- -------------- ------------ ------------
End of year $ 53,166,045 $ 65,614,774 $ 85,754,867 $ 69,595,906
============== ============== ============ ============
</TABLE>
<TABLE>
<CAPTION>
SMITH BARNEY
PACIFIC BASIN PORTFOLIO
---------------------------
1997 1996
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends $ - $ 85,088
------------ ------------
EXPENSES:
Insurance charges 149,387 130,320
Administrative fees 20,631 17,916
------------ ------------
Net investment income (loss) (170,018) (63,148)
------------ ------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold 5,466,908 1,510,099
Cost of investments sold 5,196,218 1,555,495
------------ ------------
Net realized gain (loss) 270,690 (45,396)
------------ ------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year 730,895 (94,030)
Unrealized gain (loss) end of year (3,462,017) 730,895
------------ ------------
Net change in unrealized gain (loss) for the year (4,192,912) 824,925
------------ ------------
Net increase (decrease) in net assets
resulting from operations (4,092,240) 716,381
------------ ------------
UNIT TRANSACTIONS:
Participant purchase payments 1,098,434 4,266,062
Participant transfers from other Travelers accounts 6,138,143 3,494,877
Administrative charges (2,611) (2,485)
Contract surrenders (391,352) (317,932)
Participant transfers to other Travelers accounts (6,687,514) (1,991,724)
Other payments to participants (167,008) (33,381)
------------ -------------
Net increase (decrease) in net assets resulting
from unit transactions (11,908) 5,415,417
------------ -------------
Net increase (decrease) in net assets (4,104,148) 6,131,798
NET ASSETS:
Beginning of year 13,745,164 7,613,366
------------ -------------
End of year $ 9,641,016 $ 13,745,164
============ ============
</TABLE>
-10-
<PAGE> 12
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
AIM CAPITAL MFS EMERGING
MFS TOTAL RETURN PORTFOLIO APPRECIATION PORTFOLIO OPPORTUNITY PORTFOLIO TOTAL RETURN PORTFOLIO
- ----------------------------- ----------------------------- -------------------------- ----------------------------
1997 1996 1997 1996 1997 1996 1997 1996
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
$ - $ 3,828,423 $ - $ 89,374 $ 489,750 $ 25,251 $ 6,288,870 $ 1,642,653
- -------------- ------------ -------------- ------------ ------------ ----------- ------------- ------------
1,509,146 942,815 1,230,949 646,707 178,870 4,468 1,403,023 794,933
211,891 132,120 174,100 90,846 25,074 636 199,128 112,735
- -------------- ------------ -------------- ------------ ------------ ----------- ------------- ------------
(1,721,037) 2,753,488 (1,405,049) (648,179) 285,806 20,147 4,686,719 734,985
- -------------- ------------ -------------- ------------ ------------ ----------- ------------- ------------
3,016,017 1,262,839 5,073,047 1,197,200 871,766 - 3,961,754 775,947
2,078,055 979,860 4,185,282 1,126,918 799,941 - 2,459,594 568,235
- -------------- ------------ -------------- ------------ ------------ ----------- ------------- ------------
937,962 282,979 887,765 70,282 71,825 - 1,502,160 207,712
- -------------- ------------ -------------- ------------ ------------ ----------- ------------- ------------
13,391,534 5,006,835 6,615,457 (570,345) (165,409) - 17,936,448 2,298,273
39,222,148 13,391,534 17,982,354 6,615,457 2,024,828 (165,409) 30,892,161 17,936,448
- -------------- ------------ -------------- ------------ ------------ ----------- ------------- ------------
25,830,614 8,384,699 11,366,897 7,185,802 2,190,237 (165,409) 12,955,713 15,638,175
- -------------- ------------ -------------- ------------ ------------ ----------- ------------- ------------
25,047,539 11,421,166 10,849,613 6,607,905 2,547,868 (145,262) 19,144,592 16,580,872
- -------------- ------------ -------------- ------------ ------------ ----------- ------------- ------------
21,944,124 32,478,099 20,554,804 43,928,872 13,027,745 4,210,333 26,802,207 31,680,548
17,997,178 15,491,308 22,728,970 23,045,936 10,087,450 1,548,789 16,802,164 16,214,511
(25,333) (19,879) (30,567) (17,703) (2,765) - (25,728) (17,842)
(4,151,503) (2,264,908) (4,442,013) (1,131,730) (307,580) (3,561) (3,519,412) (1,291,752)
(6,868,175) (4,224,343) (11,556,968) (5,252,724) (2,296,339) (10,963) (6,823,606) (3,634,651)
(1,390,904) (1,226,965) (674,175) (573,279) (54,962) - (1,058,712) (897,138)
- -------------- ------------ -------------- ------------ ------------ ----------- ------------- ------------
27,505,387 40,233,312 26,580,051 59,999,372 20,453,549 5,744,598 32,176,913 42,053,676
- -------------- ------------ -------------- ------------ ------------ ----------- ------------- ------------
52,552,926 51,654,478 37,429,664 66,607,277 23,001,417 5,599,336 51,321,505 58,634,548
113,961,422 62,306,944 91,277,843 24,670,566 5,599,336 - 105,430,505 46,795,957
- -------------- ------------ -------------- ------------ ------------ ----------- ------------- ------------
$ 166,514,348 $113,961,422 $ 128,707,507 $ 91,277,843 $ 28,600,753 $ 5,599,336 $ 156,752,010 $105,430,505
============== ============ ============== ============ ============ =========== ============= ============
</TABLE>
-11-
<PAGE> 13
NOTES TO FINANCIAL STATEMENTS - CONTINUED
6. SCHEDULE OF FUND BD OPERATIONS AND CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996 (CONTINUED)
<TABLE>
<CAPTION>
SELECT HIGH GROWTH PORTFOLIO SELECT GROWTH PORTFOLIO
------------------------- ----------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ - $ - $ - $ -
--------- ------------- ----------- --------
EXPENSES:
Insurance charges 4,141 - 17,133 -
Administrative fees 559 - 2,332 -
--------- ------------- ----------- --------
Net investment income (loss) (4,700) - (19,465) -
--------- ------------- ----------- --------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold 73,246 - 139,882 -
Cost of investments sold 65,080 - 131,787 -
--------- ------------- ----------- --------
Net realized gain (loss) 8,166 - 8,095 -
--------- ------------- ----------- --------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year - - - -
Unrealized gain (loss) end of year 17,323 - 117,391 -
--------- ------------- ----------- --------
Net change in unrealized gain (loss) for the year 17,323 - 117,391 -
--------- ------------- ----------- --------
Net increase (decrease) in net assets
resulting from operations 20,789 - 106,021 -
--------- ------------- ----------- --------
UNIT TRANSACTIONS:
Participant purchase payments 615,483 - 3,062,980 -
Participant transfers from other Travelers accounts 353,681 - 1,039,939 -
Administrative charges (101) - (332) -
Contract surrenders (29,404) - (10,129) -
Participant transfers to other Travelers accounts (52,464) - (173,173) -
Other payments to participants - - - -
--------- ------------- ----------- --------
Net increase (decrease) in net assets resulting
from unit transactions 887,195 - 3,919,285 -
--------- ------------- ----------- --------
Net increase (decrease) in net assets 907,984 - 4,025,306 -
NET ASSETS:
Beginning of year - - - -
--------- ------------- ----------- --------
End of year $ 907,984 $ - $ 4,025,306 $ -
========= ============= =========== ========
</TABLE>
<TABLE>
<CAPTION>
SELECT BALANCED PORTFOLIO
-----------------------
1997 1996
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends $ - $ -
----------- ---------
EXPENSES:
Insurance charges 14,166 -
Administrative fees 2,005 -
----------- ---------
Net investment income (loss) (16,171) -
----------- ---------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold 98,074 -
Cost of investments sold 93,403 -
----------- ---------
Net realized gain (loss) 4,671 -
----------- ---------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year - -
Unrealized gain (loss) end of year 146,252 -
----------- ---------
Net change in unrealized gain (loss) for the year 146,252 -
----------- ---------
Net increase (decrease) in net assets
resulting from operations 134,752 -
----------- ---------
UNIT TRANSACTIONS:
Participant purchase payments 3,168,219 -
Participant transfers from other Travelers accounts 1,085,724 -
Administrative charges (162) -
Contract surrenders (6,000) -
Participant transfers to other Travelers accounts (129,496) -
Other payments to participants - -
----------- ---------
Net increase (decrease) in net assets resulting
from unit transactions 4,118,285 -
----------- ---------
Net increase (decrease) in net assets 4,253,037 -
NET ASSETS:
Beginning of year - -
----------- ---------
End of year $ 4,253,037 $ -
=========== =========
</TABLE>
-12-
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS - CONTINUED
<TABLE>
<CAPTION>
SELECT CONSERVATIVE PORTFOLIO SELECT INCOME PORTFOLIO COMBINED
- --------------------------- ----------------------- ---------------------------------
1997 1996 1997 1996 1997 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
$ - $ - $ - $ - $ 9,991,782 $ 30,140,850
- ---------- -------------- --------- ----------- --------------- ---------------
3,354 - 2,750 - 14,861,228 9,274,982
470 - 359 - 2,087,661 1,298,993
- ---------- -------------- --------- ----------- --------------- ---------------
(3,824) - (3,109) - (6,957,107) 19,566,875
- ---------- -------------- --------- ----------- --------------- ---------------
66,504 - 49,846 - 126,237,914 44,883,919
63,317 - 47,869 - 109,741,686 42,369,055
- ---------- -------------- --------- ----------- --------------- ---------------
3,187 - 1,977 - 16,496,228 2,514,864
- ---------- -------------- --------- ----------- --------------- ---------------
- - - - 149,706,480 33,086,025
30,222 - 28,026 - 350,653,206 149,706,480
- ---------- -------------- --------- ----------- --------------- ---------------
30,222 - 28,026 - 200,946,726 116,620,455
- ---------- -------------- --------- ----------- --------------- ---------------
29,585 - 26,894 - 210,485,847 138,702,194
- ---------- -------------- --------- ----------- --------------- ---------------
646,740 - 481,126 - 247,618,592 383,170,981
317,835 - 337,991 - 271,785,612 180,135,696
(41) - (12) - (255,069) (194,398)
(491) - (6,388) - (46,085,851) (20,667,720)
(76,371) - (60,881) - (209,625,801) (112,209,151)
- - - - (12,044,229) (8,630,013)
- ---------- -------------- --------- ----------- --------------- ---------------
887,672 - 751,836 - 251,393,254 421,605,395
- ---------- -------------- --------- ----------- --------------- ---------------
917,257 - 778,730 - 461,879,101 560,307,589
- - - - 1,139,733,518 579,425,929
- ---------- -------------- --------- ----------- --------------- ---------------
$ 917,257 $ - $ 778,730 $ - $ 1,601,612,619 $ 1,139,733,518
========== ============== ========= =========== =============== ===============
</TABLE>
-13-
<PAGE> 15
NOTES TO FINANCIAL STATEMENTS - CONTINUED
7. SCHEDULE OF ACCUMULATION AND ANNUITY UNITS FOR FUND BD
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
VAN KAMPEN
AMERICAN CAPITAL
ALLIANCE GROWTH PORTFOLIO ENTERPRISE PORTFOLIO
---------------------------- --------------------------
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Accumulation and annuity units
beginning of year 150,544,940 99,904,339 55,989,980 33,041,812
Accumulation units purchased and
transferred from other Travelers accounts 42,358,182 62,183,855 19,647,366 26,338,152
Accumulation units redeemed and
transferred to other Travelers accounts (18,532,586) (11,542,721) (6,733,723) (3,389,984)
Annuity units (514) (533) - -
------------ ------------ ------------ ------------
Accumulation and annuity units
end of year 174,370,022 150,544,940 68,903,623 55,989,980
============ ============ ============ ============
<CAPTION>
G.T. GLOBAL STRATEGIC SMITH BARNEY
INCOME PORTFOLIO HIGH INCOME PORTFOLIO
---------------------------- ----------------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Accumulation and annuity units
beginning of year 14,300,516 9,019,702 40,668,816 23,908,189
Accumulation units purchased and
transferred from other Travelers accounts 4,165,404 6,140,644 16,761,800 21,206,906
Accumulation units redeemed and
transferred to other Travelers accounts (2,748,441) (859,551) (5,538,973) (4,445,210)
Annuity units (269) (279) (1,023) (1,069)
------------ ------------ ------------ ------------
Accumulation and annuity units
end of year 15,717,210 14,300,516 51,890,620 40,668,816
============ ============ ============ ============
<CAPTION>
SMITH BARNEY INCOME SMITH BARNEY
AND GROWTH PORTFOLIO MONEY MARKET PORTFOLIO
---------------------------- ----------------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Accumulation and annuity units
beginning of year 69,649,025 38,482,886 59,848,388 45,699,686
Accumulation units purchased and
transferred from other Travelers accounts 24,091,442 34,571,705 83,235,342 78,328,712
Accumulation units redeemed and
transferred to other Travelers accounts (7,208,302) (3,405,566) (96,367,128) (64,179,188)
Annuity units - - (787) (822)
------------ ------------ ------------ ------------
Accumulation and annuity units
end of year 86,532,165 69,649,025 46,715,815 59,848,388
============ ============ ============ ============
<CAPTION>
SMITH BARNEY MFS
PACIFIC BASIN PORTFOLIO TOTAL RETURN PORTFOLIO
---------------------------- ----------------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Accumulation and annuity units
beginning of year 14,000,600 8,375,185 82,925,658 51,286,236
Accumulation units purchased and
transferred from other Travelers accounts 7,773,179 8,058,171 26,536,279 37,667,058
Accumulation units redeemed and
transferred to other Travelers accounts (7,960,727) (2,432,335) (8,259,138) (6,026,937)
Annuity units (406) (421) (674) (699)
------------ ------------ ------------ ------------
Accumulation and annuity units
end of year 13,812,646 14,000,600 101,202,125 82,925,658
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
TBC MANAGED
INCOME PORTFOLIO
-------------------------
1997 1996
---- ----
<S> <C> <C>
Accumulation and annuity units
beginning of year 17,878,278 13,076,945
Accumulation units purchased and
transferred from other Travelers accounts 6,498,071 7,771,745
Accumulation units redeemed and
transferred to other Travelers accounts (3,398,707) (2,970,412)
Annuity units - -
------------ -----------
Accumulation and annuity units
end of year 20,977,642 17,878,278
============ ===========
<CAPTION>
SMITH BARNEY INTERNATIONAL
EQUITY PORTFOLIO
---------------------------
1997 1996
---- ----
<S> <C> <C>
Accumulation and annuity units
beginning of year 94,215,932 59,503,877
Accumulation units purchased and
transferred from other Travelers accounts 29,649,820 40,470,047
Accumulation units redeemed and
transferred to other Travelers accounts (17,723,476) (5,757,002)
Annuity units (955) (990)
------------ -----------
Accumulation and annuity units
end of year 106,141,321 94,215,932
============ ===========
<CAPTION>
PUTNAM DIVERSIFIED
INCOME PORTFOLIO
---------------------------
1997 1996
---- ----
<S> <C> <C>
Accumulation and annuity units
beginning of year 55,686,585 34,727,849
Accumulation units purchased and
transferred from other Travelers accounts 16,004,365 25,380,256
Accumulation units redeemed and
transferred to other Travelers accounts (7,196,409) (4,419,852)
Annuity units (1,602) (1,668)
------------ -----------
Accumulation and annuity units
end of year 64,492,939 55,686,585
============ ===========
<CAPTION>
AIM CAPITAL
APPRECIATION PORTFOLIO
---------------------------
1997 1996
---- ----
<S> <C> <C>
Accumulation and annuity units
beginning of year 83,947,101 25,760,350
Accumulation units purchased and
transferred from other Travelers accounts 37,010,944 64,913,879
Accumulation units redeemed and
transferred to other Travelers accounts (14,133,595) (6,727,128)
Annuity units - -
------------ -----------
Accumulation and annuity units
end of year 106,824,450 83,947,101
============ ===========
</TABLE>
-14-
<PAGE> 16
NOTES TO FINANCIAL STATEMENTS - CONTINUED
7. SCHEDULE OF ACCUMULATION AND ANNUITY UNITS FOR FUND BD
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996 (CONTINUED)
<TABLE>
<CAPTION>
MFS EMERGING TOTAL RETURN SELECT HIGH
OPPORTUNITY PORTFOLIO PORTFOLIO GROWTH PORTFOLIO
----------------------- ------------------------------ --------------------
1997 1996 1997 1996 1997 1996
<S> <C> <C> <C> <C> <C> <C>
Accumulation and annuity units
beginning of year 5,570,213 - 68,066,825 37,437,245 - -
Accumulation units purchased and
transferred from other Travelers accounts 20,562,526 5,584,170 26,427,090 34,750,074 908,116 -
Accumulation units redeemed and
transferred to other Travelers accounts (2,366,709) (13,957) (6,829,703) (4,120,494) (74,236) -
Annuity units - - - - - -
----------- -------- ------------- -------------- --------- --------
Accumulation and annuity units
end of year 23,766,030 5,570,213 87,664,212 68,066,825 833,880 -
=========== ======== ============= ============== ========= ========
<CAPTION>
SELECT GROWTH SELECT BALANCED SELECT CONSERVATIVE
PORTFOLIO PORTFOLIO PORTFOLIO
----------------------- ------------------------------ --------------------
1997 1996 1997 1996 1997 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Accumulation and annuity units
beginning of year - - - - - -
Accumulation units purchased and
transferred from other Travelers accounts 3,840,022 - 4,022,149 - 901,166 -
Accumulation units redeemed and
transferred to other Travelers accounts (174,800) - (129,443) - (72,645) -
Annuity units - - - - - -
----------- -------- ------------- -------------- --------- --------
Accumulation and annuity units
end of year 3,665,222 - 3,892,706 - 828,521 -
=========== ======== ============= ============== ========= ========
<CAPTION>
SELECT INCOME
PORTFOLIO COMBINED
----------------------- ------------------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Accumulation and annuity units
beginning of year - - 813,292,857 480,224,301
Accumulation units purchased and
transferred from other Travelers accounts 768,659 - 371,161,922 453,365,374
Accumulation units redeemed and
transferred to other Travelers accounts (63,923) - (205,512,664) (120,290,337)
Annuity units - - (6,230) (6,481)
----------- -------- ------------- --------------
Accumulation and annuity units
end of year 704,736 - 978,935,885 813,292,857
=========== ======== ============= ==============
</TABLE>
-15-
<PAGE> 17
REPORT OF INDEPENDENT ACCOUNTANTS
To the Owners of Variable Annuity Contracts of The Travelers Fund BD for
Variable Annuities:
We have audited the accompanying statement of assets and liabilities of The
Travelers Fund BD for Variable Annuities as of December 31, 1997, and the
related statement of operations for the year then ended and the statement of
changes in net assets for each of the two years in the period then ended. These
financial statements are the responsibility of management. Our responsibility is
to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of shares owned as of December 31, 1997, by correspondence with the
underlying funds. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Travelers Fund BD for
Variable Annuities as of December 31, 1997, the results of its operations for
the year then ended and the changes in its net assets for each of the two years
in the period then ended, in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
Hartford, Connecticut
February 19, 1998
-16-
<PAGE> 18
Independent Accountants
COOPERS & LYBRAND L.L.P.
Hartford, Connecticut
This report is prepared for the general information of contract owners and is
not an offer of shares of The Travelers Fund BD for Variable Annuities or Fund
BD's underlying funds. It should not be used in connection with any offer except
in conjunction with the Prospectuses for the Variable Annuity products offered
by The Travelers Insurance Company and the Prospectuses of the underlying funds,
which collectively contain all pertinent information, including the applicable
sales commissions.
VG - FNDBD (Annual) (12-97) Printed in U.S.A.
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