UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-6465
THE TRAVELERS SERIES TRUST
(Exact name of registrant as specified in charter)
125 Broad Street, New York, NY 10004
(Address of principal executive offices) (Zip code)
Christina T. Sydor, Esq.
300 First Stamford Place
Stamford, CT 06902
(Name and address of agent for service)
Registrant's telephone number, including area code:
(800) 451-2010
Date of fiscal year end: DECEMBER 31
Date of reporting period: JUNE 30, 2003
ITEM 1. REPORT TO STOCKHOLDERS.
The SEMI-ANNUAL Report to Stockholders is filed herewith.
SEMI-ANNUAL REPORT
JUNE 30, 2003
[UMBRELLA ART TOP]
[UMBRELLA ART BOTTOM]
THE TRAVELERS SERIES TRUST:
MFS VALUE PORTFOLIO
[TRAVELERS LOGO]
The Travelers Insurance Company
The Travelers Life and Annuity Company
One Cityplace
Hartford, CT 06103
SEMI-ANNUAL REPORT FOR THE TRAVELERS SERIES TRUST
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WHAT'S INSIDE
<Table>
Letter from the Chairman.................................... 1
Schedule of Investments..................................... 2
Statement of Assets and Liabilities......................... 6
Statement of Operations..................................... 7
Statements of Changes in Net Assets......................... 8
Notes to Financial Statements............................... 9
Financial Highlights........................................ 12
</Table>
SEMI-ANNUAL REPORT FOR THE TRAVELERS SERIES TRUST
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LETTER FROM THE CHAIRMAN
[R. JAY GERKEN PHOTO]
R. JAY GERKEN, CFA
Chairman, President and
Chief Executive Officer
DEAR SHAREHOLDER,
The philosopher Bertrand Russell famously remarked that,
"Change is one thing, progress is another." You will
notice in the following pages that we have begun to
implement some changes to your shareholder report and we
will be reflecting other changes in future reports. Our
aim is to make meaningful improvements in reporting on
the management of your Fund and its performance, not
just to enact change for change's sake. Please bear with
us during this transition period.
We invite you to read this report in full. Please take
the opportunity to talk to your financial adviser about
this report or any other questions or concerns you have
about your Fund and your financial future. As always,
thank you for entrusting your assets to us. We look
forward to helping you continue to meet your financial
goals.
Sincerely,
/s/ R. Jay Gerken
R. Jay Gerken, CFA
Chairman, President and Chief Executive Officer
July 21, 2003
1
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SCHEDULE OF INVESTMENTS (UNAUDITED) JUNE 30, 2003
<Table>
<Caption>
SHARES SECURITY VALUE
- -----------------------------------------------------------------------------------------
COMMON STOCK -- 91.0%
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AEROSPACE AND DEFENSE -- 0.9%
3,430 Northrop Grumman Corp. ..................................... $ 295,975
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BANKS -- 13.9%
17,870 Bank of America Corp. ...................................... 1,412,264
6,270 Bank One Corp. ............................................. 233,119
24,460 FleetBoston Financial Corp. ................................ 726,707
30,410 Mellon Financial Corp. ..................................... 843,878
10,660 National City Corp. ........................................ 348,689
8,430 SouthTrust Corp. ........................................... 229,296
11,850 SunTrust Banks, Inc. ....................................... 703,179
6,700 Wachovia Corp. ............................................. 267,732
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4,764,864
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BEVERAGES -- 1.3%
9,980 PepsiCo, Inc. .............................................. 444,110
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CHEMICALS -- 4.0%
8,870 Air Products and Chemicals, Inc. ........................... 368,992
10,740 The Dow Chemical Co. ....................................... 332,510
5,020 Lyondell Chemical Co. ...................................... 67,921
9,720 PPG Industries, Inc. ....................................... 493,193
1,690 Praxair, Inc. .............................................. 101,569
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1,364,185
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COMMUNICATIONS EQUIPMENT -- 0.8%
27,500 Motorola, Inc. ............................................. 259,325
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COMPUTERS AND PERIPHERALS -- 0.4%
1,800 International Business Machines Corp. ...................... 148,500
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CONTAINERS AND PACKAGING -- 0.4%
11,780 Smurfit-Stone Container Corp.+.............................. 153,493
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DIVERSIFIED FINANCIALS -- 7.1%
5,300 American Express Co. ....................................... 221,593
11,020 Fannie Mae.................................................. 743,189
11,450 The Goldman Sachs Group, Inc. .............................. 958,938
10,490 Merrill Lynch & Co., Inc. .................................. 489,673
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2,413,393
- -----------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES -- 5.0%
3,521 AT&T Corp. ................................................. 67,779
30,700 BellSouth Corp. ............................................ 817,541
20,850 SBC Communications Inc. .................................... 532,718
7,200 Verizon Communications Inc. ................................ 284,040
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1,702,078
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</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
2
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SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) JUNE 30, 2003
<Table>
<Caption>
SHARES SECURITY VALUE
- -----------------------------------------------------------------------------------------
ELECTRIC UTILITIES -- 2.5%
2,730 FPL Group, Inc. ............................................ $ 182,500
6,460 NSTAR....................................................... 294,253
4,300 PPL Corp. .................................................. 184,900
8,490 TXU Corp. .................................................. 190,600
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852,253
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ELECTRICAL EQUIPMENT -- 0.7%
4,400 Emerson Electric Co. ....................................... 224,840
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ELECTRONIC EQUIPMENT AND INSTRUMENTS -- 0.5%
5,700 Waters Corp.+............................................... 166,041
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ENERGY EQUIPMENT AND SERVICES -- 2.9%
6,200 Baker Hughes, Inc. ......................................... 208,134
9,230 Noble Corp.+................................................ 316,589
9,760 Schlumberger Ltd. .......................................... 464,283
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989,006
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FOOD AND DRUG RETAILING -- 1.4%
17,510 The Kroger Co.+............................................. 292,067
9,400 Safeway Inc.+............................................... 192,324
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484,391
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FOOD PRODUCTS -- 4.6%
38,346 Archer-Daniels-Midland Co. ................................. 493,513
6,970 H.J. Heinz Co. ............................................. 229,871
22,590 Kellogg Co. ................................................ 776,418
6,600 Tyson Foods, Inc. .......................................... 70,092
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1,569,894
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GAS UTILITIES -- 1.3%
4,040 KeySpan Corp. .............................................. 143,218
7,930 National Fuel Gas Co. ...................................... 206,576
3,560 WGL Holdings Inc. .......................................... 95,052
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444,846
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HEALTHCARE EQUIPMENT AND SUPPLIES -- 0.3%
2,700 Guidant Corp.+.............................................. 119,853
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HOTELS, RESTAURANTS AND LEISURE -- 0.4%
5,400 Starwood Hotels & Resorts Worldwide, Inc. .................. 154,386
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HOUSEHOLD PRODUCTS -- 2.4%
9,570 Kimberly-Clark Corp. ....................................... 498,980
3,490 The Procter & Gamble Co. ................................... 311,238
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810,218
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INDUSTRIAL CONGLOMERATES -- 0.2%
470 3M Co. ..................................................... 60,621
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</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
3
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SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) JUNE 30, 2003
<Table>
<Caption>
SHARES SECURITY VALUE
- -----------------------------------------------------------------------------------------
INSURANCE -- 5.4%
16,020 The Allstate Corp. ......................................... $ 571,113
4,550 The Chubb Corp. ............................................ 273,000
5,880 The Hartford Financial Services Group, Inc. ................ 296,117
19,490 MetLife, Inc. .............................................. 551,957
4,710 The St. Paul Cos., Inc. .................................... 171,962
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1,864,149
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MACHINERY -- 2.3%
3,160 Caterpillar Inc. ........................................... 175,886
13,750 Deere & Co. ................................................ 628,375
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804,261
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MEDIA -- 5.7%
15,600 AOL Time Warner Inc.+....................................... 251,004
8,600 Cox Communications, Inc., Class A Shares+................... 274,340
6,020 Gannett Co., Inc. .......................................... 462,396
9,240 Tribune Co. ................................................ 446,292
12,020 Viacom Inc., Class B Shares+................................ 524,793
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1,958,825
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METALS AND MINING -- 1.6%
13,900 Alcoa Inc. ................................................. 354,450
5,430 Phelps Dodge Corp.+......................................... 208,186
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562,636
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MULTI-UTILITIES -- 0.6%
9,920 Energy East Corp. .......................................... 205,939
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OIL AND GAS -- 10.5%
18,090 BP PLC ADR.................................................. 760,142
4,400 ChevronTexaco Corp. ........................................ 317,680
11,870 ConocoPhillips.............................................. 650,476
4,460 Devon Energy Corp. ......................................... 238,164
1,900 Equitable Resources, Inc. .................................. 77,406
29,450 Exxon Mobil Corp. .......................................... 1,057,550
3,770 Total SA ADR................................................ 285,766
7,550 Unocal Corp. ............................................... 216,610
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3,603,794
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PAPER AND FOREST PRODUCTS -- 1.6%
3,880 Bowater Inc. ............................................... 145,306
10,920 International Paper Co. .................................... 390,172
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535,478
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PHARMACEUTICALS -- 6.3%
9,560 Abbott Laboratories......................................... 418,346
8,010 Johnson & Johnson........................................... 414,117
24,020 Pfizer Inc. ................................................ 820,283
26,500 Schering-Plough Corp. ...................................... 492,900
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2,145,646
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</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
4
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SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED) JUNE 30, 2003
<Table>
<Caption>
SHARES SECURITY VALUE
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ROAD AND RAIL -- 1.0%
5,820 Union Pacific Corp. ........................................ $ 337,676
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SEMICONDUCTOR EQUIPMENT AND PRODUCTS -- 1.4%
10,920 Intel Corp. ................................................ 226,961
2,300 Novellus Systems, Inc.+..................................... 84,228
10,220 Texas Instruments Inc. ..................................... 179,872
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491,061
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SOFTWARE -- 0.8%
10,700 Microsoft Corp. ............................................ 274,027
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TOBACCO -- 2.8%
20,770 Altria Group, Inc. ......................................... 943,789
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TOTAL COMMON STOCK (Cost -- $30,857,889).................... 31,149,553
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PREFERRED STOCK -- 1.0%
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AEROSPACE AND DEFENSE -- 0.2%
680 Northrop Grumman Corp., 7.250%.............................. 69,190
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COMMUNICATIONS EQUIPMENT -- 0.5%
4,760 Motorola, Inc., 7.000%...................................... 155,176
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ELECTRIC UTILITIES -- 0.3%
3,480 TXU Corp., 8.750%........................................... 115,188
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TOTAL PREFERRED STOCK (Cost -- $455,328).................... 339,554
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FOREIGN STOCK -- 5.0%
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SWITZERLAND -- 2.6%
10,800 Novartis AG................................................. 428,292
9,170 Syngenta AG+................................................ 460,671
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888,963
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UNITED KINGDOM -- 2.4%
15,080 Diageo PLC.................................................. 161,270
57,100 Reed Elsevier PLC........................................... 475,914
8,900 Rio Tinto Ltd. ............................................. 167,703
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804,887
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TOTAL FOREIGN STOCK (Cost -- $1,745,673).................... 1,693,850
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</Table>
<Table>
<Caption>
FACE
AMOUNT SECURITY VALUE
- -----------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 3.0%
$1,027,000 Federal Home Loan Bank Discount Notes, 0.000% due 7/1/03
(Cost -- $1,027,000)...................................... 1,027,000
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TOTAL INVESTMENTS -- 100.0% (Cost -- $34,085,890*).......... $34,209,957
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</Table>
+ Non-income producing security.
* Aggregate cost for Federal income tax purposes is substantially the same.
Abbreviation used in this schedule:
ADR -- American Depositary Receipt
SEE NOTES TO FINANCIAL STATEMENTS.
5
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STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) JUNE 30, 2003
<Table>
ASSETS:
Investments, at value (Cost -- $34,085,890)............... $34,209,957
Cash...................................................... 231
Receivable for securities sold............................ 221,533
Dividends and interest receivable......................... 63,660
Receivable for Fund shares sold........................... 8,993
Receivable for open forward foreign currency contracts
(Note 4)............................................... 3
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TOTAL ASSETS.............................................. 34,504,377
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LIABILITIES:
Payable for securities purchased.......................... 184,816
Investment advisory fee payable........................... 15,553
Administration fee payable................................ 1,703
Payable for open forward foreign currency contracts (Note
4)..................................................... 617
Accrued expenses.......................................... 35,041
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TOTAL LIABILITIES......................................... 237,730
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TOTAL NET ASSETS............................................ $34,266,647
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NET ASSETS:
Paid-in capital........................................... $36,523,710
Undistributed net investment income....................... 251,150
Accumulated net realized loss from investment
transactions........................................... (2,632,661)
Net unrealized appreciation of investments and foreign
currencies............................................. 124,448
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TOTAL NET ASSETS............................................ $34,266,647
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SHARES OUTSTANDING.......................................... 3,639,476
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NET ASSET VALUE............................................. $9.42
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</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
6
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STATEMENT OF OPERATIONS (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 2003
<Table>
INVESTMENT INCOME:
Dividends................................................. $ 392,459
Interest.................................................. 7,210
Less: Foreign withholding tax............................. (4,974)
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TOTAL INVESTMENT INCOME................................... 394,695
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EXPENSES:
Investment advisory fee (Note 2).......................... 115,275
Custody................................................... 16,505
Shareholder communications................................ 11,356
Audit and legal........................................... 9,874
Administration fee (Note 2)............................... 9,222
Trustees' fees............................................ 3,093
Shareholder servicing fees................................ 2,484
Other..................................................... 1,115
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TOTAL EXPENSES............................................ 168,924
Less: Expense reimbursement (Note 2)...................... (15,224)
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NET EXPENSES.............................................. 153,700
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NET INVESTMENT INCOME....................................... 240,995
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REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCIES (NOTE 3):
Realized Gain (Loss) From:
Investment transactions................................ (464,270)
Foreign currency transactions.......................... 799
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NET REALIZED LOSS......................................... (463,471)
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Change in Net Unrealized Appreciation From:
Investments............................................ 2,451,485
Foreign currencies..................................... 192
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INCREASE IN NET UNREALIZED APPRECIATION................... 2,451,677
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NET GAIN ON INVESTMENTS AND FOREIGN CURRENCIES.............. 1,988,206
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INCREASE IN NET ASSETS FROM OPERATIONS...................... $2,229,201
- ------------------------------------------------------------------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
7
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 2003 (UNAUDITED)
AND THE YEAR ENDED DECEMBER 31, 2002
<Table>
<Caption>
2003 2002
- ---------------------------------------------------------------------------------------
OPERATIONS:
Net investment income..................................... $ 240,995 $ 440,297
Net realized loss......................................... (463,471) (1,942,261)
Increase (decrease) in net unrealized appreciation........ 2,451,677 (2,958,914)
- ---------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS......... 2,229,201 (4,460,878)
- ---------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income..................................... -- (704,032)
Net realized gains........................................ -- (1,300,123)
- ---------------------------------------------------------------------------------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS TO
SHAREHOLDERS........................................... -- (2,004,155)
- ---------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS (NOTE 5):
Net proceeds from sale of shares.......................... 2,970,788 9,850,958
Net asset value of shares issued for reinvestment of
dividends.............................................. -- 2,004,155
Cost of shares reacquired................................. (1,913,258) (6,705,321)
- ---------------------------------------------------------------------------------------
INCREASE IN NET ASSETS FROM FUND SHARE TRANSACTIONS....... 1,057,530 5,149,792
- ---------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS........................... 3,286,731 (1,315,241)
NET ASSETS:
Beginning of period....................................... 30,979,916 32,295,157
- ---------------------------------------------------------------------------------------
END OF PERIOD*............................................ $34,266,647 $30,979,916
- ---------------------------------------------------------------------------------------
* Includes undistributed net investment income of:.......... $251,150 $9,356
- ---------------------------------------------------------------------------------------
</Table>
SEE NOTES TO FINANCIAL STATEMENTS.
8
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
MFS Value Portfolio ("Fund") is a separate investment fund of The Travelers
Series Trust ("Trust"). The Trust is a Massachusetts business trust registered
under the Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company and consists of this fund and fifteen other
separate investment funds: Travelers Quality Bond, Lazard International Stock,
MFS Emerging Growth, Federated High Yield, Federated Stock, Disciplined Mid Cap
Stock, U.S. Government Securities, Social Awareness Stock, Pioneer Fund,
formerly known as Utilities, Large Cap, Equity Income, Convertible Securities,
MFS Research, MFS Mid Cap Growth and Zero Coupon Bond Fund Portfolio (Series
2005) Portfolios. Shares of the Trust are offered exclusively for use with
certain variable annuity and variable life insurance contracts offered through
the separate accounts of various affiliated life insurance companies. The
financial statements and financial highlights for the other funds are presented
in separate shareholder reports.
The significant accounting policies consistently followed by the Fund are:
(a) security transactions are accounted for on trade date; (b) securities traded
on national securities markets are valued at the closing price on such markets
or, if there were no sales during the day, at the mean between the last reported
bid and ask prices or on the basis of quotations received from unaffiliated
reputable brokers or other recognized sources; securities listed on the NASDAQ
National Market System for which market quotations are available are valued at
the official closing price or, if there is no official closing price on that
day, at the last sale price; securities primarily traded on foreign exchanges
are generally valued at the closing values of such securities on their
respective exchanges, except that when a significant occurrence exists
subsequent to the time a value was so established and it is likely to have
significantly changed the value, then the fair value of those securities will be
determined by consideration of other factors by or under the direction of the
Board of Trustees; securities traded in the over-the-counter market are valued
on the basis of the bid price at the close of business on each day; U.S.
government agencies and obligations are valued at the mean between the last
reported bid and ask prices; (c) securities maturing within 60 days are valued
at cost plus accreted discount or minus amortized premium, which approximates
value; (d) securities that have a maturity of 60 days or more are valued at
prices based on market quotations for securities of similar type, yield and
maturity; (e) interest income, adjusted for amortization of premium and
accretion of discount, is recorded on an accrual basis and dividend income is
recorded on the ex-dividend date; foreign dividends are recorded on the
ex-dividend date or as soon as practical after the Fund determines the existence
of a dividend declaration after exercising reasonable due diligence; (f) gains
or losses on the sale of securities are calculated by using the specific
identification method; (g) dividends and distributions to shareholders are
recorded on the ex-dividend date; the Fund distributes dividends and capital
gains, if any, at least annually; (h) the accounting records of the Fund are
maintained in U.S. dollars. All assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the rate of exchange of
such currencies against U.S. dollars on the date of valuation. Purchases and
sales of securities, income and expenses are translated at the rate of exchange
quoted on the respective date that such transactions are recorded. Differences
between income or expense amounts recorded and collected or paid are adjusted
when reported by the custodian bank; (i) the Fund intends to comply with the
requirements of the Internal Revenue Code of 1986, as amended, pertaining to
regulated investment companies and to make distributions of taxable income
sufficient to relieve it from substantially all Federal income and excise taxes;
(j) the character of income and gains to be distributed are determined in
accordance with income tax regulations which may differ from accounting
principles generally accepted in the United States of America; and (k) estimates
and assumptions are required to be made regarding assets, liabilities and
changes in net assets resulting from operations when financial statements are
prepared. Changes in the economic environment, financial markets and any other
parameters used in determining these estimates could cause actual results to
differ.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS
Travelers Asset Management International Company LLC ("TAMIC"), an indirect
wholly-owned subsidiary of Citigroup Inc. ("Citigroup"), acts as investment
adviser to the Fund. The Fund pays TAMIC an investment advisory fee calculated
at the annual rate of 0.75% of the Fund's average daily net assets. This fee is
calculated daily and paid monthly.
TAMIC has entered into a sub-advisory agreement with Massachusetts
Financial Services ("MFS"). Pursuant to the sub-advisory agreement, MFS is
responsible for the day-to-day portfolio operations and investment decisions for
the Fund. TAMIC pays MFS 0.375% of the Fund's average daily net assets.
The Travelers Insurance Company ("TIC"), another indirect wholly-owned
subsidiary of Citigroup, acts as administrator to the Fund. The Fund pays TIC an
administration fee calculated at an annual rate of 0.06% of its average daily
net assets. This fee is calculated daily and paid monthly. TIC has entered into
a sub-administrative service agreement with Smith Barney Fund Management LLC
("SBFM"), another indirect wholly-owned subsidiary of Citigroup. TIC pays SBFM,
as sub-
9
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
administrator, a fee calculated at an annual rate of 0.06% of the average daily
net assets of the Fund. For the six months ended June 30, 2003, TIC reimbursed
expenses in the amount of $15,224 for the Fund.
Citicorp Trust Bank, fsb. ("CTB"), another subsidiary of Citigroup, acts as
the Fund's transfer agent. CTB receives account fees and asset-based fees that
vary according to the size and type of account. For the six months ended June
30, 2003, the Fund paid transfer agent fees of $2,500 to CTB.
For the six months ended June 30, 2003, Citigroup Global Markets Inc.,
formerly known as Salomon Smith Barney Inc., another indirect wholly-owned
subsidiary of Citigroup, did not receive any brokerage commissions.
One Trustee and all officers of the Trust are employees of Citigroup or its
affiliates.
3. INVESTMENTS
During the six months ended June 30, 2003, the aggregate cost of purchases
and proceeds from sales of investments (including maturities of long-term
investments, but excluding short-term investments) were as follows:
<Table>
- -------------------------------------------------------------------------
Purchases................................................... $10,913,494
Sales....................................................... 9,767,785
- -------------------------------------------------------------------------
</Table>
At June 30, 2003, aggregate gross unrealized appreciation and depreciation
of investments for Federal income tax purposes were substantially as follows:
<Table>
- -------------------------------------------------------------------------
Gross unrealized appreciation............................... $ 1,396,912
Gross unrealized depreciation............................... (1,272,845)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $ 124,067
- -------------------------------------------------------------------------
</Table>
4. FORWARD FOREIGN CURRENCY CONTRACTS
The Fund from time to time may enter into forward foreign currency
contracts. A forward foreign currency contract is an agreement between two
parties to buy and sell a currency at a set price on a future date. The contract
is marked-to-market daily and the change in value is recorded by the Fund as an
unrealized gain or loss. When a forward foreign currency contract is
extinguished, through either delivery or offset by entering into another forward
foreign currency contract, the Fund records a realized gain or loss equal to the
difference between the value of the contract at the time it was opened and the
value of the contract at the time it was extinguished or offset. The Fund bears
the market risk that arises from changes in foreign currency exchange rates.
At June 30, 2003, the Fund had open forward foreign currency contracts as
described below. The unrealized gain (loss) on the contracts reflected in the
accompanying financial statements were as follows:
<Table>
<Caption>
LOCAL MARKET SETTLEMENT UNREALIZED
FOREIGN CURRENCY CURRENCY VALUE DATE GAIN (LOSS)
- -------------------------------------------------------------------------------------------------------
CONTRACTS TO BUY:
British Pound..................................... 69,409 $114,726 7/1/03 $(617)
Swiss Franc....................................... 13,781 10,196 7/1/03 3
- -------------------------------------------------------------------------------------------------------
Net Unrealized Loss on Open Forward Foreign
Currency Contracts.............................. $(614)
- -------------------------------------------------------------------------------------------------------
</Table>
10
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
5. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust authorizes the issuance of an unlimited number of
shares of beneficial interest without par value. Transactions in shares of the
Fund were as follows:
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2003 DECEMBER 31, 2002
- -----------------------------------------------------------------------------------------------------
Shares sold................................................. 341,539 1,015,193
Shares issued on reinvestment............................... -- 218,577
Shares reacquired........................................... (223,166) (693,773)
- -----------------------------------------------------------------------------------------------------
Net Increase................................................ 118,373 539,997
- -----------------------------------------------------------------------------------------------------
</Table>
11
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
For a share of beneficial interest outstanding throughout each year ended
December 31, unless otherwise noted:
<Table>
<Caption>
2003(1) 2002 2001(2) 2000(2) 1999(2) 1998(3)
- ------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD..... $8.80 $10.83 $10.89 $ 9.93 $9.46 $10.00
- ------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM OPERATIONS:
Net investment income(4)............... 0.07 0.12 0.11 0.11 0.13 0.05
Net realized and unrealized gain
(loss).............................. 0.55 (1.53) (0.00)* 1.02 0.34 (0.54)
- ------------------------------------------------------------------------------------------------------
Total Income (Loss) From Operations...... 0.62 (1.41) 0.11 1.13 0.47 (0.49)
- ------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS FROM:
Net investment income.................. -- (0.21) (0.08) (0.08) -- (0.05)
Net realized gains..................... -- (0.41) (0.09) (0.09) -- (0.00)*
- ------------------------------------------------------------------------------------------------------
Total Distributions...................... -- (0.62) (0.17) (0.17) -- (0.05)
- ------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD........... $9.42 $ 8.80 $10.83 $10.89 $9.93 $ 9.46
- ------------------------------------------------------------------------------------------------------
TOTAL RETURN(5).......................... 7.05%++ (13.14)% 1.00% 11.59% 4.97% (4.94)%++
- ------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (000'S)........ $34,267 $30,980 $32,295 $23,326 $19,908 $8,463
- ------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Expenses(4)(6)......................... 1.00%+ 1.00% 1.00% 1.00% 0.99% 0.99%+
Net investment income.................. 1.57+ 1.38 1.01 1.05 1.26 1.47+
- ------------------------------------------------------------------------------------------------------
PORTFOLIO TURNOVER RATE.................. 32% 60% 123% 54% 41% 2%
- ------------------------------------------------------------------------------------------------------
</Table>
(1) For the six months ended June 30, 2003 (unaudited).
(2) Per share amounts have been calculated using the monthly average shares
method.
(3) For the period July 20, 1998 (commencement of operations) to December 31,
1998.
(4) The Travelers Insurance Company has agreed to reimburse the Fund for
expenses in the amounts of $15,224, $44,292, $28,095, $15,528, $24,087 and
$17,700 for the six months ended June 30, 2003, the years ended December 31,
2002, 2001, 2000 and 1999 and the period ended December 31, 1998,
respectively. If such expenses were not reimbursed, the per share decreases
to net investment income and the actual expense ratios would have been as
follows:
<Table>
<Caption>
PER SHARE DECREASES EXPENSE RATIOS WITHOUT
TO NET INVESTMENT INCOME EXPENSE REIMBURSEMENT
- ---------------------------------------- ----------------------------------------
2003 2002 2001 2000 1999 1998 2003 2002 2001 2000 1999 1998
- ----- ----- ----- ----- ----- ----- ----- ----- ---- ----- ----- ------
$0.00* $0.01 $0.01 $0.01 $0.02 $0.02 1.10%+ 1.13% 1.11% 1.07% 1.15% 1.64%+
</Table>
(5) Performance figures may reflect fee waivers and/or expense reimbursements.
Past performance is no guarantee of future results. In the absence of fee
waivers and/or expense reimbursements, the total return would be reduced.
(6) As a result of a voluntary expense limitation, the ratio of expenses to
average net assets will not exceed 1.00%.
* Amount represents less than $0.01 per share.
++ Total return is not annualized, as it may not be representative of the
total return for the year.
+ Annualized.
12
THE TRAVELERS SERIES TRUST
- --------------------------------------------------------------------------------
<Table>
TRUSTEES INVESTMENT ADVISER
R. Jay Gerken, CFA
Chairman Travelers Asset Management International Company LLC
Frances M. Hawk, CFA, CPA
Lewis Mandell ADMINISTRATOR
Robert E. McGill
The Travelers Insurance Company
OFFICERS
CUSTODIAN
R. Jay Gerken, CFA
President and State Street Bank and Trust Company
Chief Executive Officer
TRANSFER AGENT
Lewis E. Daidone
Senior Vice President and Citicorp Trust Bank, fsb.
Chief Administrative
Officer
Richard L. Peteka
Chief Financial Officer
and Treasurer
Kaprel Ozsolak
Controller
Ernest J. Wright
Secretary
Kathleen A. McGah
Assistant Secretary
</Table>
The Fund is a separate investment fund of The Travelers Series Trust, a
Massachusetts business trust.
This report is prepared for the general information of contract owners and is
not an offer of shares of The Travelers Series Trust: MFS Value Portfolio. It
should not be used in connection with any offer except in conjunction with the
Prospectuses for the Variable Annuity and Variable Universal Life Insurance
products offered by The Travelers Insurance Company or Travelers Life and
Annuity Company and the Prospectuses for the underlying funds, which
collectively contain all pertinent information, including the applicable sales
commissions.
Series Trust (Semi-Annual) (8-03) Printed in U.S.A. 03-4964
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal
financial officer have concluded that the registrant's
disclosure controls and procedures (as defined in Rule
30a-2(c) under the Investment Company Act of 1940, as amended)
are effective based on their evaluation of the disclosure
controls and procedures as of a date within 90 days of the
filing date of this document.
(b) In the last 90 days, there have been no significant changes in
the Registrant's internal controls or in other factors that
could significantly affect these controls.
ITEM 10. EXHIBITS.
(a) Not applicable.
(b) Attached hereto.
Exhibit 99.CERT Certifications pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
Exhibit 99.906CERT Certifications pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this Report
to be signed on its behalf by the undersigned, there unto duly authorized.
THE TRAVELERS SERIES TRUST
By: /s/ R. Jay Gerken
R. Jay Gerken
Chief Executive Officer of
The Travelers Series Trust
Date: August 28, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ R. Jay Gerken
(R. Jay Gerken)
Chief Executive Officer of
The Travelers Series Trust
Date: August 28, 2003
By: /s/ Richard L. Peteka
(Richard L. Peteka)
Chief Financial Officer of
The Travelers Series Trust
Date: August 28, 2003