UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number: 811-08629 HARTFORD SERIES FUND, INC. (Exact name of registrant as specified in charter) P. O. Box 2999, Hartford, Connecticut 06104-2999 (Address of Principal Executive Offices) Kevin J. Carr, Esquire Investment Law Unit The Hartford Financial Services Group, Inc. 55 Farmington Avenue Hartford, Connecticut 06105 (Name and Address of Agent for Service) Registrant's telephone number, including area code: (860) 297-6443 Date of fiscal year end: December 31st Date of reporting period: January 1, 2003 - December 31, 2003 Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. Section 3507. ITEM 1. REPORTS TO STOCKHOLDERS. (Tom Marra Photo) A message from the President Dear Fellow Contract Owner, After three years of bear markets, many investors were rewarded for their patience in 2003. Although it began with a declining stock market and sluggish economy, both ended the year on strong notes. Bolstered by fiscal and monetary stimulus, the economy began to pick up in the second half of the year. A strengthening economy, along with better than expected corporate profits, spurred the stock market to double-digit gains. The broad market, as measured by the S&P 500 Index(1), rose 28.7% for the one-year period ending December 31, 2003. This past year was also good for the Sub-Accounts within The Director variable annuity suite of products. All twenty-eight of our stock and bond Sub-Accounts turned in positive one-year performance as of December 31, 2003. Especially notable were our stock Sub-Accounts, which posted double-digit returns and made a strong showing versus their peers and benchmarks during this period. Nevertheless, while 2003 proved to be a rewarding year for many investors, one year doesn't make a long-term financial plan. Sometimes it's easy to get caught up in the euphoria of strong short-term performance. However, history has shown that those who have taken a disciplined, long-term approach to investing have been rewarded over time. As we head into 2004, the economy and stock market appear to have a tailwind. Of course it's impossible to predict the future. Still, you may find the insights of the seasoned investment professionals at Wellington Management Company, LLP, and Hartford Investment Management Company helpful. This annual report includes an overview from the Portfolio Managers of the underlying funds along with an update on the global economy. For more information throughout the year, I encourage you to visit our website at www.hartfordinvestor.com. There you will find daily unit values, current performance and up-to-date quarterly portfolio statistics along with an abundance of product and educational information 24 hours a day, 7 days a week. Even with signs of economic recovery and solid market performance, 2003 was a bittersweet year for the investment industry. Allegations of wrongdoing have been made against several large mutual fund companies. We have been following the news of regulatory activity concerning the mutual fund industry very closely. The Hartford, like many other companies, will continue to support the ongoing investigations of the Securities and Exchange Commission and the New York attorney general's office and we will continue to monitor events as they unfold. We take great care and pride in the fact that you have entrusted us with your money. Integrity is a guiding principle of our company and a virtue that our parent, The Hartford Financial Services Group, Inc., has built its reputation on for over 190 years. You can be assured it will remain a steadfast principle within our company. Thank you for investing in The Director variable annuity suite of products. Tom Marra - ------------------------ (1) The S&P 500 is an unmanaged index which measures broad-based changes in stock market conditions based on the average performance of 500 widely held common stocks. It does not represent the performance of a specific product or investment option. This index is not available for direct investment. HARTFORD HLS MUTUAL FUNDS ANNUAL REPORT AND MANAGER DISCUSSIONS [PHOTO OF STAG] DECEMBER 31, 2003 [THE HARTFORD LOGO] IMPORTANT NOTICE TO CONTRACT OWNERS The Hartford is committed to doing what we can to prevent improper trading activity within our products, and will continue to react to Industry "best practices" with respect to this type of activity. We have recently enhanced the language in our variable annuity and variable life insurance policies prospectus surrounding our transfer restrictions by adding the following language to your prospectus. The underlying Funds are available for use with many different variable annuity products, variable life insurance policies, and funding agreements, and they are offered directly to certain qualified retirement plans. Some of these products and plans may have different transfer restrictions or no transfer restrictions at all. In addition, as a result of settlement of litigation against Hartford, with respect to certain owners of older Contracts, we currently only have the ability to restrict transfers into certain funds and to limit the total Contract Value invested in any one Fund. The effect on you may include higher transaction costs or lower performance. To obtain a copy of our latest prospectus for your variable annuity, variable life insurance policies or the underlying funds, please log on to www.hartfordinvestor.com or call 800-862-6668 for variable annuity, 800-528-9009 for group variable annuity, or 800-800-2000, extension 13028, for variable life insurance policies. <Table> Annual Report December 31, 2003 (STAG PHOTO) </Table> - Manager Discussions - Financials (THE HARTFORD LOGO) HARTFORD HLS MUTUAL FUNDS TABLE OF CONTENTS <Table> Manager Discussions 1 Hartford HLS Mutual Funds Financial Statements: Statement of Net Assets or Statement of Assets and Liabilities as of December 31, 2003: Hartford Advisers HLS Fund 33 Hartford Bond HLS Fund 39 Hartford Capital Appreciation HLS Fund 47 Hartford Disciplined Equity HLS Fund (formerly, Hartford Growth and Income HLS Fund) 50 Hartford Dividend and Growth HLS Fund 52 Hartford Equity Income HLS Fund 54 Hartford Focus HLS Fund 56 Hartford Global Advisers HLS Fund 57 Hartford Global Communications HLS Fund 68 Hartford Global Financial Services HLS Fund 70 Hartford Global Health HLS Fund 72 Hartford Global Leaders HLS Fund 74 Hartford Global Technology HLS Fund 77 Hartford Growth HLS Fund 79 Hartford Growth Opportunities HLS Fund 81 Hartford High Yield HLS Fund 84 Hartford Index HLS Fund 95 Hartford International Capital Appreciation HLS Fund 101 Hartford International Opportunities HLS Fund 104 Hartford International Small Company HLS Fund 107 Hartford MidCap HLS Fund 111 Hartford MidCap Value HLS Fund 114 Hartford Money Market HLS Fund 117 Hartford Mortgage Securities HLS Fund 119 Hartford Small Company HLS Fund 122 Hartford SmallCap Growth HLS Fund 124 Hartford Stock HLS Fund 127 Hartford U.S. Government Securities HLS Fund 129 Hartford Value HLS Fund 131 Hartford Value Opportunities HLS Fund 133 Statements of Operations for the Year Ended December 31, 2003 136 Statements of Changes in Net Assets for the Two Years in the Year Ended December 31, 2003 142 Notes to Financial Statements 154 Financial Highlights 192 Report of Independent Auditors 210 Tax information Notice (Unaudited) 211 Boards of Directors and Officer Information (Unaudited) 212 Privacy Policy 217 </Table> Contract owners should refer to the prospectus provided to them at the time of purchase of their contract for a description of investment alternatives available in the Separate Accounts. This prospectus, along with the financial information contained in this report, provides them with complete and up-to-date financial information regarding the Separate Account. This report is prepared for the general information of contract owners and is not an offer of contracts. It should not be used in connection with any offer, except in conjunction with the appropriate prospectus which contains all pertinent information including the applicable sales, administrative and other charges. IMPORTANT INFORMATION The following disclosure applies to all Hartford HLS Mutual Funds: The charts on the following pages represent hypothetical investments in the Hartford HLS Mutual Funds. (Returns include the Fund level expenses, but exclude the insurance charges, if returns had taken into account insurance charges, performance would have been lower). Past performance does not guarantee future results. The value of the contract will fluctuate so that when redeemed, it may be worth more or less than the original investment. Total Returns do not reflect the deduction of taxes that a shareholder would pay on portfolio distributions or the redemption of portfolio shares. <Table> Hartford Advisers HLS Fund(1,2,4) Hartford High Yield HLS Fund(1,2) Hartford Bond HLS Fund(1,2,4) Hartford Index HLS Fund(1,2,5) Hartford Capital Appreciation HLS Fund(1,2,4) Hartford International Capital Appreciation HLS Hartford Disciplined Equity HLS Fund (formerly, Fund(1,2) Hartford Growth and Income HLS Fund)(1,2) Hartford International Opportunities HLS Hartford Dividend and Growth HLS Fund(1,2,4) Fund(1,2,4) Hartford Equity Income HLS Fund(1) Hartford International Small Company HLS Hartford Focus HLS Fund(1,2) Fund(1,2) Hartford Global Advisers HLS Fund(1,2,5) Hartford MidCap HLS Fund(1,2,5) Hartford Global Communications HLS Fund(1,2) Hartford MidCap Value HLS Fund(1,2) Hartford Global Financial Services HLS Fund(1,2) Hartford Mortgage Securities HLS Fund(1,2,5) Hartford Global Health HLS Fund(1,2) Hartford Small Company HLS Fund(1,2,4) Hartford Global Leaders HLS Fund(1,2) Hartford SmallCap Growth HLS Fund(1,3) Hartford Global Technology HLS Fund(1,2) Hartford Stock HLS Fund(1,2,4) Hartford Growth HLS Fund(1,2) Hartford U.S. Government Securities HLS Hartford Growth Opportunities HLS Fund(1,3) Fund(1,3) Hartford Value HLS Fund(1,2) Hartford Value Opportunities HLS Fund(1,3) </Table> (1) Growth of a $10,000 investment in Class IB shares will vary from the results seen on this page due to differences in the expense charged to this share class. (2) Performance for periods when fee waivers were in place would have been lower in the absence of the waivers. (3) Class IB shares commenced on May 1, 2002. Class IB share performance prior to that date reflects Class IA share performance adjusted to reflect the 12b-1 fee of 0.25% applicable to Class IB shares. The performance after such date reflects actual Class IB share performance. (4) Class IB shares commenced on April 1, 1998. Class IB share performance prior to that date reflects Class IA share performance adjusted to reflect the 12b-1 fee of 0.25% applicable to Class IB shares. The performance after such date reflects actual Class IB share performance. (5) Class IB shares commenced on November 9, 1999. Class IB share performance prior to that date reflects Class IA share performance adjusted to reflect the 12b-1 fee of 0.25% applicable to Class IB shares. The performance after such date reflects actual Class IB share performance. The opinions about future economic and market developments expressed in this report are those of the portfolio manager(s) and are current only through the end of the period of the report as stated on the cover. These views are subject to change at any time based on market and other conditions, and no forecasts can be guaranteed. 1 COMPARATIVE BENCHMARKS appear throughout the fund commentary as a measure of fund performance. You cannot invest directly in any of these indices. 90 DAY TREASURY BILLS is an unmanaged index of short-term treasury bills. CITIGROUP BROAD MARKET EURO-PACIFIC <$2B INDEX is a free float-adjusted market capitalization index that includes only those companies with a market cap between $100 million and $2 billion, representing roughly the bottom 20% of the world equity market by size. GOLDMAN SACHS HEALTH CARE INDEX is a modified capitalization-weighted index based on United States headquartered health care companies. Stocks in the index are weighted such that each stock is no more than 7.5% of the market capitalization as of the most recent reconstitution date. The companies included in the index must be common stocks and be traded on the American Stock Exchange, Nasdaq or the New York Stock Exchange and meet certain established market capitalization levels. GOLDMAN SACHS TECHNOLOGY COMPOSITE INDEX is a modified capitalization-weighted index based on United States headquartered technology companies. Stocks in the index are weighted such that each stock is no more than 8.5% of the market capitalization as of the most recent reconstitution date. The companies included in the index must be common stocks and be traded on the American Stock Exchange, Nasdaq or the New York Stock Exchange and meet certain established market capitalization levels. LEHMAN BROTHERS GLOBAL AGGREGATE INDEX USD HEDGED provides a broad-based measure of the global investment-grade fixed income markets. The three major components of this index are the U.S. Aggregate, the Pan-European Aggregate, and the Asian-Pacific Aggregate Indices; it also includes Eurodollar and Euro-Yen corporate bonds, Canadian Government securities, and USD investment grade 144A securities. LEHMAN BROTHERS GOVERNMENT / CREDIT BOND INDEX is an unmanaged, market-value-weighted index of all debt obligations of the U.S. Treasury and U.S. Government agencies (excluding mortgage-backed securities) and of all publicly issued fixed-rate, nonconvertible, investment grade domestic corporate debt. LEHMAN BROTHERS HIGH YIELD CORPORATE INDEX is an unmanaged broad-based market value-weighted index that tracks the total return performance of non-investment grade, fixed-rate, publicly placed, dollar denominated and nonconvertible debt registered with the SEC. LEHMAN BROTHERS INTERMEDIATE GOVERNMENT INDEX is an unmanaged index of government bonds with maturities of between one and ten years. LEHMAN BROTHERS MORTGAGE BACKED SECURITIES INDEX is an index of mortgage backed pass-through securities of the Government National Mortgage Association, Federal National Mortgage Association and Federal Home Loan Mortgage Corporation. LEHMAN BROTHERS U.S. AGGREGATE BOND INDEX is an unmanaged index and is composed of securities from the Lehman Brothers Government / Credit Bond Index, Mortgage-Backed Securities Index, Asset-Backed Securities Index and Commercial Mortgage-Backed Securities Index. MSCI AC (ALL COUNTRY) WORLD FREE TELECOMMUNICATIONS SERVICES INDEX is a free float-adjusted market capitalization index of developed and emerging market countries that is designed to measure international equity market performance. MSCI AC WORLD FREE EX U.S. INDEX is a broad based, unmanaged, market capitalization weighted, total return index that measures the performance of both developed and emerging stock markets, excluding the U.S. MSCI EAFE - THE MORGAN STANLEY CAPITAL INTERNATIONAL EUROPE, AUSTRALASIA AND FAR EAST INDEX is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. and Canada. MSCI FINANCIAL EX REAL ESTATE INDEX includes only companies in both the MSCI Developed Index and in the Banks, Diversified Financials or Insurance industry groups. The constituents of this index will represent 85% of the market capitalization of all companies in these specific countries and industry groups.. MSCI WORLD INDEX is a broad-based unmanaged market capitalization weighted total return index which measures performance of 23 developed-country global stock markets, including the United States, Canada, Europe, Australia, New Zealand and the Far East. RUSSELL 1000 GROWTH INDEX is an unmanaged index which measures the performance of those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values. (The Russell 1000 Index is an unmanaged index that measures the performance of the 1,000 largest companies in the Russell 3000 Index, which measures the performance of the 3,000 largest U.S. companies based on total market capitalization.) RUSSELL 1000 VALUE INDEX is an unmanaged index measuring the performance of those Russell 1000 Index companies with lower price-to-book ratios and lower forecasted growth values. RUSSELL 2000 GROWTH INDEX is an unmanaged index of those Russell 2000 Index growth companies with higher price-to-book ratios and higher forecasted growth values. (The Russell 2000 Index is a broad-based unmanaged index comprised of 2,000 of the smallest U.S. domiciled company common stocks (on the basis of capitalization) that are traded in the United States on the New York Stock Exchange, American Stock Exchange and Nasdaq.) RUSSELL 2500 INDEX is an unmanaged index that measures the performance of the 2,500 largest U.S. companies based on total market capitalization. RUSSELL 2500 VALUE INDEX is an unmanaged index measuring the performance of those Russell 2500 Index companies with lower price-to-book ratios and lower forecasted growth values. RUSSELL 3000 GROWTH INDEX is an unmanaged index that measures the performance of those Russell 3000 Index companies with higher price-to-book ratios and higher forecasted growth values. (The Russell 3000 Index is an unmanaged index that measures the performance of the 3,000 largest U.S. companies based on total market capitalization.) RUSSELL 3000 VALUE INDEX is an unmanaged index measuring the performance of those Russell 3000 Index companies with lower price-to-book ratios and lower forecasted growth values. S&P 500 INDEX is a market capitalization weighted price index composed of 500 widely held common stocks. S&P MIDCAP 400 INDEX is an unmanaged index of common stocks of companies chosen by S&P designed to represent price movements in the mid-cap U.S. equity market. 2 Hartford Advisers HLS Fund inception 3/31/1983 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 12/31/93 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> LEHMAN GOVERNMENT/CREDIT ADVISERS IA S&P 500 INDEX BOND INDEX ----------- ------------- ----------------- 12/31/93 10000 10000 10000 10210 10340 10150 10058 10059 9930 9667 9621 9687 9666 9745 9607 9744 9904 9589 9556 9662 9566 9814 9979 9758 10040 10387 9762 9801 10133 9614 9825 10361 9603 9604 9984 9586 12/94 9726 10131 9649 9905 10394 9834 10267 10799 10062 10484 11117 10130 10659 11444 10271 11044 11901 10702 11248 12177 10787 11461 12580 10746 11540 12610 10883 11923 13142 10994 11843 13094 11155 12320 13670 11339 12/95 12483 13933 11506 12756 14407 11577 12795 14541 11332 12860 14681 11237 12965 14897 11160 13196 15279 11141 13316 15337 11290 13012 14660 11316 13131 14969 11288 13703 15810 11489 14002 16246 11757 14846 17473 11973 12/96 14553 17127 11840 15189 18196 11854 15249 18340 11879 14819 17588 11738 15488 18636 11909 16180 19769 12021 16882 20655 12165 17931 22297 12537 17045 21048 12396 17767 22199 12591 17444 21458 12793 17965 22451 12860 12/97 18120 22838 12995 18383 23089 13178 19286 24753 13152 20019 26021 13192 20338 26284 13258 20163 25832 13401 20917 26880 13537 21065 26595 13548 19229 22749 13813 20017 24208 14208 21013 26175 14107 21814 27761 14191 12/98 22587 29361 14226 23084 30588 14327 22548 29638 13987 23237 30823 14056 23853 32017 14091 23271 31262 13946 24147 32997 13902 23658 31966 13864 23445 31807 13853 23181 30935 13977 23973 32892 14014 24164 33561 14006 12/99 24978 35538 13921 24110 33752 13917 23960 33114 14091 25583 36351 14295 25044 35258 14225 24740 34534 14212 25107 35386 14502 24873 34833 14656 25761 36995 14863 25088 35043 14919 25251 34894 15012 24434 32145 15269 12/00 24792 32303 15570 25307 33448 15832 24343 30400 15995 23350 28475 16068 24321 30685 15948 24504 30891 16040 23882 30140 16117 23909 29843 16518 23003 27977 16730 22102 25719 16884 22618 26210 17313 23575 28220 17029 12/01 23641 28468 16894 23330 28053 17018 23201 27512 17163 23618 28547 16815 22376 26817 17140 22236 26620 17299 21293 24725 17446 20568 22799 17656 20587 22947 18052 19234 20455 18440 20136 22253 18264 21096 23561 18275 12/02 20381 22178 18759 20024 21599 18758 19886 21275 19092 19924 21482 19067 20944 23250 19271 21803 24474 19819 21977 24787 19739 22093 25224 18912 22336 25715 19036 22261 25443 19640 22982 26880 19390 23141 27116 19442 12/03 24150 28538 19633 </Table> <Table> --- ADVISERS IA --- S&P 500 INDEX MMMM LEHMAN GOVERNMENT/ $10,000 starting value $10,000 starting value CREDIT BOND INDEX $24,150 ending value $28,536 ending value $10,000 starting value $19,633 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR 10 YEAR - -------------------------------------------------- Advisers IA 18.49% 1.35% 9.22% - -------------------------------------------------- Advisers IB(4) 18.20% 1.14% 8.97% - -------------------------------------------------- S&P 500 Index 28.67% -0.57% 11.06% - -------------------------------------------------- Lehman Government/ Credit Bond Index 4.66% 6.65% 6.98% - -------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGEMENT TEAM RAND L. ALEXANDER, CFA Senior Vice President, Partner PAUL D. KAPLAN Senior Vice President, Partner, Director of Fixed Income - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Advisers HLS Fund, Class IA returned 18.49% for the 12 months ended December 31, 2003. The Fund outperformed the Composite Index (S&P 500 Index 55%, Lehman Brothers Government/Credit Bond Index 35% and 90 day Treasury Bills 10%), which returned 17.12% over the same period. The Fund underperformed the Lipper Flexible Portfolio VA-UF Average, which returned 18.59% over the same period. WHY DID THE FUND PERFORM THIS WAY? After a three-year decline, the U.S. equity markets rallied during the period. This surge in the broad market began with the ending of the conflict in Iraq and has been fueled by increases in consumer confidence and manufacturing output, resilience in consumer spending and productivity gains, and support from low interest rates and reduced tax rates. Across both the equity and fixed income asset classes, there was an overall trend of lower quality securities providing superior returns than higher quality investments as the markets shifted from risk aversion to risk pursuit. Among bonds, emerging markets debt and high yield bonds outperformed U.S. Treasuries and other investment grade sectors. Within the equity markets, emerging markets outperformed developed markets, and small caps outperformed large caps. The Fund returns for the year were driven primarily by positive asset allocation decisions during the course of 2003. We entered the year optimistic that low interest rates, tax cuts, a stabilizing employment picture, and the weak dollar would boost the U.S. economy, and in turn, investor confidence. Our equity ratio increased from 62% to 70% of the Fund over the course of the year. This equity exposure matches our highest level ever and expresses our high confidence that equities will provide the most attractive returns over the coming year. With the out-performance of equities over bonds during the year, our positioning enhanced performance. In terms of the equity portion, the Fund generated strong returns through positive sector allocation decisions and solid performance from some individual holdings. We maintained overweight positions in information technology and materials, the two strongest areas of the market during 2003. We also remained underweight in telecommunication services, which was the poorest performing sector, as the industry continues to work through capacity issues. Strong contributors during the year included Citigroup, Inc. (banks) and Intel Corp. (electronics). Citigroup, Inc. has executed well, controlled costs, and is leveraged to an improvement in capital market activity. Intel Corp. benefited from a strong semiconductor cycle in 2003, as they continually beat earnings expectations. Relative equity results were hindered somewhat by our large cap, high quality bias, especially in the information technology sector. Detractors included Schering-Plough Corp. (drugs) and Safeway, Inc. (consumer non-durables); both stocks were eliminated from the Fund. Within the fixed income portion of the Fund, returns were in line with our benchmark. Our fundamental high quality bias generated lower returns than had we invested more aggressively in some of the lower quality segments of the market. Specifically, our low exposure to Ford Motor Co. (transportation) and General Motors Corp. (transportation) detracted from returns this year as bonds of these lower quality issuers outperformed most corporate bonds in 2003. We continue to believe this approach is the correct one as insurance for those unpredictable periods of stock market volatility. Our tactical duration management was a positive factor this year. We had a slightly short duration bias in anticipation of a stronger economy and higher interest rates. As only the first part of this outlook has developed, this bias detracted slightly from returns. 3 - -------------------------------------------------------------------------------- WHAT IS YOUR OUTLOOK AND STRATEGY? The economic and operating environment for businesses has rarely been more favorable for corporate earnings and profitability. Tax cuts, a weaker dollar, sustained productivity, and healthier balance sheets are all evidence of this. As the economy continues to grow, we will look for improved corporate spending and employment trends as key gauges to determine the sustainability of the domestic recovery. This encourages us to maintain our high equity exposure. Within our equity portion we maintain a cyclical bias, with overweight positions in information technology, industrials, and consumer discretionary sectors. On the fixed income side, the economy continues to show signs of a sustained recovery and the bond market struggles with stronger economic indicators. While we have outlined an environment that should be supportive of the business sector and corporate balance sheets in particular, we have begun to shift investments away from corporate bonds and back toward government securities as valuations in the corporate sector are now less than generous and as the Fund increases its exposure to the business sector via its equity holdings. An improving economic environment is also supportive of our slightly shorter duration posture, as interest rates should begin to move upward later this year. 4 Hartford Bond HLS Fund inception 8/31/1977 (subadvised by Hartford Investment Management Company) PERFORMANCE OVERVIEW 12/31/93 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> LEHMAN BROTHERS U.S BOND IA AGGREGATE BOND INDEX ------- -------------------- 12/31/93 10000 10000 10149 10135 9909 9959 9660 9713 9577 9635 9568 9634 9546 9613 9716 9804 9718 9816 9590 9672 9571 9663 9553 9642 12/94 9605 9708 9781 9900 9980 10136 10053 10198 10178 10341 10595 10741 10696 10819 10633 10795 10764 10926 10866 11032 11031 11175 11205 11343 12/95 11381 11502 11440 11578 11213 11376 11137 11297 11043 11233 11038 11211 11175 11361 11199 11392 11180 11372 11376 11570 11628 11827 11874 12029 12/96 11782 11918 11832 11955 11884 11984 11760 11851 11914 12029 12046 12143 12220 12288 12633 12620 12501 12512 12699 12698 12861 12882 12943 12941 12/97 13120 13072 13300 13239 13289 13228 13353 13273 13410 13342 13553 13469 13681 13584 13676 13612 13798 13834 14163 14158 14011 14083 14153 14163 12/98 14189 14206 14300 14306 13936 14056 14020 14133 14094 14179 13906 14054 13825 14009 13794 13950 13769 13943 13904 14105 13957 14157 13966 14156 12/99 13903 14088 13876 14041 14044 14211 14260 14399 14237 14357 14246 14350 14572 14648 14664 14781 14849 14996 14943 15090 14982 15190 15208 15439 12/00 15569 15726 15930 15982 16019 16121 16061 16202 16032 16134 16126 16231 16106 16292 16489 16657 16697 16849 16738 17044 17038 17401 16974 17161 12/01 16921 17051 16984 17189 17056 17356 16817 17067 17166 17398 17350 17546 17346 17697 17383 17911 17719 18214 17873 18509 17961 18424 18163 18418 12/02 18627 18800 18784 18817 19081 19076 19106 19062 19353 19219 19798 19577 19788 19538 19200 18881 19351 19006 19865 19510 19736 19328 19827 19374 12/03 20088 19572 </Table> <Table> --- BOND IA --- LEHMAN BROTHERS U.S. AGGREGATE BOND $10,000 starting value INDEX $20,088 ending value $10,000 starting value $19,572 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR 10 YEAR - ---------------------------------------------------- Bond IA 7.85% 7.20% 7.22% - ---------------------------------------------------- Bond IB(4) 7.58% 6.98% 6.99% - ---------------------------------------------------- Lehman Brothers U.S. Aggregate Bond Index 4.11% 6.62% 6.95% - ---------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER NASRI TOUTOUNGI Managing Director - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Bond HLS Fund, Class IA returned 7.85% for the 12 months ended December 31, 2003. The Fund outperformed both the Lehman Brothers U.S. Aggregate Bond Index, which returned 4.11%, and the Lipper Intermediate Investment Grade Debt VA-UF Average, which returned 5.14% over the same period. WHY DID THE FUND PERFORM THIS WAY? Judicious sector selection was the major contributor to performance in 2003. In particular, our allocations to high yield and non-dollar securities had a significant impact for the year. During the second half of this year, astute interest rate anticipation versus the index also contributed positively to fund performance. Since the Fund was somewhat short duration going into the rate increase in late July and also during the fourth quarter, performance benefited from the rise in rates. Security selection also added to performance across several sectors. The high yield sector was amongst the best performing sectors in the fixed income market. The Lehman High Yield Corporate Index returned 28.97% for the year ended December 31st. This was due to improved corporate fundamentals and very attractive valuations accompanied by very strong mutual fund demand. The dollar declined against major currencies. In particular, the dollar weakened versus the Euro, declining by 20% from 1.05 to 1.26 dollar per Euro. The twin budget and current account deficit concerns have taken their toll on the exchange rate, despite strong growth in the U.S. WHAT IS YOUR OUTLOOK AND STRATEGY? Improved corporate profitability and stronger balance sheets are facilitating pent-up demand for corporate spending. The Institute of Supply Management's early January report displayed surprising strength. The manufacturing new orders component of this report provided the strongest reading since 1950, while most other components indicated continued acceleration of business activity. While capacity utilization remains well below its long-term average, the sustained upward trend is a constructive sign of growth. Our overall duration position is essentially neutral to slightly defensive. We fully expect interest rates to rise for fundamental reasons once excess capacity in labor and manufacturing is filled, and inflation starts to rise. The yield curve is at near record steep levels, and is currently anchored by the Federal Reserve's resolve to maintain an easing bias to kick start the economy. We remain constructive on corporate bond spreads, but we are not nearly as sanguine as we were last year. While fundamentals for corporate securities continue to improve, bonds have done very well versus their treasury counterparts. We maintain a 6% weight to high yield securities, and while only 2% overweight on investment grade corporates, we continue to favor BBB securities. Approximately a third of the portfolio is in mortgage-backed securities. While these securities are good income generators, we are concerned about price depreciation in the event of a significant move in interest rates. We are also concerned that Agency debentures could experience further volatility, thus we will remain under invested in the sector. We have reentered a position in foreign bonds on an unhedged basis. The currency markets are once again focused on the very large U.S. trade deficit, and in a rising rate environment, European bonds should do well versus U.S. bonds. We hold a 3.5% in foreign government or quasi government bonds and will look to opportunistically increase exposure to international securities. Treasury Inflation Protected Securities should also offer good value long term. We will be watching for leading indicators of inflation before we invest in TIPS later in 2004. 5 Hartford Capital Appreciation HLS Fund inception 4/2/1984 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 12/31/93 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> CAPITAL APPRECIATION IA S&P 500 INDEX ----------------------- ------------- 12/31/93 10000 10000 10454 10340 10399 10059 9841 9621 9787 9745 9688 9904 9403 9662 9710 9979 10460 10387 10436 10133 10553 10361 10081 9984 12/94 10250 10131 10256 10394 10618 10799 10986 11117 11299 11444 11593 11901 12163 12177 12907 12580 13098 12610 13388 13142 12753 13094 13319 13670 12/95 13351 13933 13554 14407 13911 14541 14120 14681 14797 14897 15248 15279 14863 15337 13801 14660 14527 14969 15382 15810 15366 16246 16190 17473 12/96 16115 17127 16734 18196 16413 18340 15489 17588 15884 18636 17695 19769 18462 20655 19989 22297 19752 21048 21065 22199 19803 21458 19647 22451 12/97 19715 22838 19537 23089 21385 24753 22230 26021 22623 26284 21628 25832 22046 26880 21494 26595 17216 22749 18231 24208 20012 26175 21260 27761 12/98 22767 29361 23756 30588 22707 29638 24464 30823 25618 32017 25255 31262 26659 32997 26374 31966 26054 31807 25171 30935 26865 32892 28307 33561 12/99 31295 35538 30661 33752 35392 33114 36252 36351 34348 35258 33210 34534 35280 35386 35335 34833 38907 36995 37495 35043 36423 34894 33403 32145 12/00 35433 32303 37549 33448 35860 30400 33915 28475 36543 30685 37043 30891 35959 30140 34633 29843 32901 27977 29113 25719 29958 26210 32119 28220 12/01 32975 28468 32093 28053 31413 27512 32618 28547 30861 26817 30747 26620 28022 24725 25766 22799 26369 22947 24379 20455 26193 22253 28217 23561 12/02 26479 22178 25942 21599 25657 21275 25362 21482 27266 23250 29429 24474 30205 24787 30756 25224 31912 25715 31790 25443 34284 26880 35144 27116 12/03 37700 28538 </Table> <Table> --- CAPITAL APPRECIATION IA --- S&P 500 INDEX $10,000 starting value $10,000 starting value $37,700 ending value $28,538 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR 10 YEAR - -------------------------------------------------------- Capital Appreciation IA 42.38% 10.61% 14.19% - -------------------------------------------------------- Capital Appreciation IB(4) 42.02% 10.39% 13.94% - -------------------------------------------------------- S&P 500 Index 28.67% -0.57% 11.06% - -------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER SAUL J. PANNELL, CFA Senior Vice President, Partner - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Capital Appreciation HLS Fund, Class IA returned 42.38% for the 12 months ended December 31, 2003. The Fund outperformed both the Lipper Multi Cap Core VA-UF Average, which returned 31.49% and the Composite Index (Russell 2500 Index 60% and S&P 500 Index 40%), which returned 38.62% over the same period. WHY DID THE FUND PERFORM THIS WAY? Equity markets continued to rise during the period; over the past twelve months the S&P 500 has now gained over 28%. Optimism regarding the economy that fueled the second quarter's sharp rally essentially became the consensus view. All market cap styles benefited, with the performance of small- and mid-cap stocks exceeding that of large-cap equities. All ten benchmark sectors registered positive returns during the period with the strongest results in materials (34%), information technology (62%), and consumer discretionary (43%). The Fund is focused on providing shareholders with maximum total returns. In seeking this level of high total return, our investment approach seeks capital appreciation from all companies regardless of market capitalization size, sector, or country. Our investment decisions, while based primarily on company-by-company fundamental analysis, may also be shaped by secular themes. We try to emphasize differences between our outlook and Wall Street consensus and utilize a broad array of other investment techniques. During the period, the Fund benefited the most from strong stock selection in telecommunication services, energy, and materials. The three largest contributors to absolute returns were Nextel Communications, Inc., Class A (communications), which benefited from continued strength in its push-to-talk phone; Nortel Networks Corp. (communications), which rose on new contract awards and a debt outlook upgrade from a credit agency; and Citigroup, Inc. (banks). Our gains were modestly offset by relatively poor stock selection in information technology and, to a lesser extent, health care. Within technology, IT service companies Concord Communications, Inc. (software & services) and CheckFree Corp. (financial services) underperformed. The three biggest detractors from absolute returns were Northrop Grumman Corp. (aerospace & defense), Schering-Plough Corp. (drugs) and Gold Fields Ltd. (metals, minerals & mining). The Fund has eliminated its positions in these poor performers. It is important to note that as the Fund has gotten larger, the portion of the Fund represented by small-caps has gotten smaller. This underweight relative to the benchmark was slightly detrimental to the overall performance of the Fund as small-caps were the strongest performing market cap category over this period. WHAT IS YOUR OUTLOOK AND STRATEGY? As we enter the new year, corporate profits are surging, borrowing costs remain attractive, and consumer confidence has stabilized. The building blocks for reinvigorated corporate spending, rising employment, and an expanding economy appear to be in place. However, on the heels of robust appreciation in 2003, equity markets generally seem to have already priced-in a healthy cyclical rebound. Over the past year it has paid to invest in companies with high financial and operating leverage. Going forward it will likely be more important to identify companies that can gain market share, grow the top-line, and drive the economic expansion. Toward the end of the 12-month period we initiated or added to positions in the industrials sector including defense-related and education stocks. To fund these positions we eliminated or reduced our holdings in health care services companies on the view that most of these companies, whether they are drug distributors, health insurers, or hospitals, will face increased pricing pressures over the intermediate term. 6 Hartford Disciplined Equity HLS Fund inception 5/29/1998 (formerly Hartford Growth and Income HLS Fund) (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 5/29/98 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> DISCIPLINED EQUITY IA S&P 500 INDEX --------------------- ------------- 5/29/1998 10000 10000 10406 10406 10407 10295 9003 8807 9619 9371 10516 10133 11109 10747 12/98 11905 11366 12305 11841 11852 11473 12415 11932 12802 12394 12558 12102 13373 12774 13112 12375 12929 12313 12540 11976 13100 12733 13461 12992 12/99 14503 13757 13701 13066 13672 12819 15171 14072 14555 13649 14203 13369 14747 13699 14646 13485 15646 14322 14717 13566 14645 13508 13472 12444 12/00 13684 12505 14370 12949 13209 11769 12481 11023 13512 11879 13631 11958 13352 11668 13066 11553 12303 10830 11282 9956 11641 10146 12478 10925 12/01 12587 11021 12301 10860 11946 10651 12391 11051 11543 10381 11432 10305 10482 9572 9752 8826 9821 8883 8754 7919 9545 8615 10049 9121 12/02 9484 8586 9178 8362 9043 8236 9091 8316 9803 9000 10333 9474 10431 9595 10581 9764 10813 9954 10815 9849 11447 10405 11619 10497 12/03 12217 11047 </Table> <Table> --- DISCIPLINED EQUITY IA --- S&P 500 INDEX $10,000 starting value $10,000 starting value $12,217 ending value $11,047 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> SINCE 1 YEAR 5 YEAR INCEPTION - ------------------------------------------------------- Disciplined Equity IA 28.82% 0.52% 3.64% - ------------------------------------------------------- Disciplined Equity IB 28.50% 0.31% 3.42% - ------------------------------------------------------- S&P 500 Index 28.67% -0.57% 1.80% - ------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER JAMES A. RULLO, CFA Senior Vice President, Partner - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Disciplined Equity HLS Fund, Class IA returned 28.82% for the 12 months ended December 31, 2003. The Fund outperformed both the Lipper Large Cap Core VA-UF Average, which returned 26.43% and the S&P 500 Index, which returned 28.67% over the same period. WHY DID THE FUND PERFORM THIS WAY? U.S. equity markets rebounded in 2003 as low interest rates, tax cuts, a stabilizing employment picture and the weak dollar provided a boost to the U.S. economy, and in turn, investor confidence. Risk was rewarded in 2003, as more speculative stocks gained favor over companies with strong balance sheets and dependable earnings. News of corporate impropriety, as well as lingering effects from the war in Iraq, failed to dampen investors' enthusiasm. Investors focused on a strengthening economy, better market prospects, and a Federal Reserve committed to keeping interest rates low. The Fund's performance during the period was driven by strong stock selection, particularly in financials, consumer staples, and health care. On an absolute basis, top performers were Cisco Systems, Inc. (computers & office equipment), Citigroup, Inc. (banks), and Intel Corp. (electronics). Cisco Systems, Inc. rose sharply driven by a rebound in technology spending. Citigroup, Inc. has executed well, controlled expenses, and is leveraged to an improvement in capital market activity. Intel Corp. benefited from the strong semiconductor cycle in 2003, as they continually beat earnings expectations. Our relative returns were held back due to our bias toward large cap, high quality names in the information technology sector. The Fund's stocks provided solid absolute returns, but the Fund did not own many of the more speculative, smaller market capitalization names that were the top performers in the technology sector. In addition, some poor performing individual holdings detracted from performance for the year. Schering-Plough Corp. (drugs), Qwest Communications International, Inc. (communications), and Pepsi Bottling Group, Inc. (food, beverages & tobacco) detracted the most from Fund performance, on an absolute basis, during the year. Schering-Plough Corp. (drugs) has been undergoing competitive pressures across several key drug franchises. Qwest Communications International, Inc. (communications) was held back due to delayed audited financials and disappointing earnings results. Pepsi Bottling Group, Inc. underperformed due to severe weather in the first quarter across half of their U.S. territories. Both Qwest Communications International, Inc. and Pepsi Bottling Group, Inc. had been eliminated from the Fund prior to year-end. Schering-Plough Corp. remains a modest holding. WHAT IS YOUR OUTLOOK AND STRATEGY? The economic recovery is now visible on a global scale, with U.S. growth and corporate profits powering ahead. We expect continued, sustainable growth in 2004. A rise in consumer disposable income from tax cuts implemented last summer has kept consumption on an accelerating trend. As the benefit from the tax cut fades, job and salary growth will need to shoulder the consumption burden and signs in the labor market have been generally positive. It is fair to say, however, that with the strong market returns in 2003, we remain cautious looking ahead. We remain cognizant of issues threatening the U.S. equity market, including declining liquidity, looming structural concerns, and relatively high equity valuations. We do not anticipate that the Fed will seriously consider raising rates until the back half of 2004 and expect a decelerating trend in inflation over the coming months. 7 Hartford Dividend and Growth HLS Fund inception 3/9/1994 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 3/9/94 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> DIVIDEND AND GROWTH IA S&P 500 INDEX ---------------------- ------------- 3/9/94 10000 10000 9707 9554 9947 9676 10067 9835 9935 9594 10219 9909 10644 10314 10419 10062 10497 10288 10066 9914 12/94 10196 10060 10411 10321 10769 10723 11035 11039 11258 11364 11770 11817 11832 12091 12113 12491 12319 12522 12947 13050 12838 13001 13457 13574 12/95 13905 13835 14267 14305 14398 14439 14794 14578 14862 14792 15176 15173 15395 15231 14924 14558 15145 14866 15869 15702 16328 16135 17241 17353 12/96 17090 17010 17986 18072 18252 18214 17568 17467 18176 18508 19364 19634 20430 20514 21645 22145 20624 20905 21870 22049 21224 21314 22111 22300 12/97 22540 22682 22867 22933 23883 24586 25184 25844 25065 26104 25003 25656 25003 26697 24830 26414 21684 22595 23129 24043 24740 25997 25488 27572 12/98 26240 29161 26017 30380 25639 29436 26297 30613 27910 31799 27204 31049 28135 32772 27254 31749 26549 31591 25868 30725 27388 32668 27256 33332 12/99 27634 35296 26523 33522 25063 32888 27834 36104 27498 35018 28080 34299 27218 35145 27215 34596 28795 36744 29065 34804 29675 34657 29080 31926 12/00 30661 32083 30223 33220 29926 30193 28975 28282 30464 30476 31013 30680 30229 29935 30452 29640 29461 27786 27540 25543 27554 26031 29087 28028 12/01 29423 28275 29492 27862 29977 27325 30812 28353 29519 26634 29800 26439 28209 24556 25942 22643 25764 22791 22922 20316 24663 22101 26362 23401 12/02 25237 22027 24380 21452 23881 21131 23840 21335 25624 23091 27274 24306 27522 24618 27798 25052 28417 25539 28089 25269 29428 26697 29983 26931 12/03 32000 28343 </Table> <Table> --- DIVIDEND AND GROWTH IA --- S&P 500 INDEX $10,000 starting value $10,000 starting value $32,000 ending value $28,343 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> SINCE 1 YEAR 5 YEAR INCEPTION - --------------------------------------------------------- Dividend and Growth IA 26.80% 4.05% 12.58% - --------------------------------------------------------- Dividend and Growth IB(4) 26.48% 3.84% 12.33% - --------------------------------------------------------- S&P 500 Index 28.67% -0.57% 11.19% - --------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER EDWARD P. BOUSA, CFA Vice President - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Dividend and Growth HLS Fund, Class IA returned 26.80% for the 12 months ended December 31, 2003. The Fund underperformed both the Lipper Equity Income VA-UF Average, which returned 26.81% and the S&P 500 Index, which returned 28.67% over the same period. WHY DID THE FUND PERFORM THIS WAY? During the 12-month period ending December 31, 2003, the economic picture has improved. With both fiscal and monetary stimulus at sizable levels, the economy should continue to strengthen and we expect GDP to further improve in 2004. Productivity figures have been very strong as well, having a large positive impact on corporate earnings. However, job growth has lagged the recovery, indicating that manufacturing jobs continue to move overseas and that businesses are still cautious about hiring. With respect to the Fund's relative results, our underperformance relative to the S&P 500 can be largely attributed to our low exposure to high beta, speculative information technology names and a couple of poor investments within the telecommunications and utilities sectors. Our technology underweight negatively impacted performance as the sector, fueled by a recovery in semiconductors and hardware providers, returned over 45% for the period. In terms of our diversified telecommunication provider holdings, we were disappointed with the performance of Verizon Communications, Inc. (communications) and AT&T Corp. (communications), which traded lower on weaker-than-expected demand for their core services. On an absolute basis, Schering-Plough Corp. (drugs) was the largest detractor from performance. Schering-Plough Corp. faced competitive pressures across several key drug franchises. At the end of the period, we continued to own AT&T Corp., Verizon Communications, Inc. and Schering-Plough Corp. Our stock selection was particularly strong among financials and energy names. For the period, Citigroup, Inc. (banks) and Caterpillar, Inc. (machinery) were our two top positive absolute contributors. Citigroup, Inc. benefited from its leverage to rising financial markets, while Caterpillar, Inc. experienced a significant up-tick in orders resulting in higher earnings levels relative to previous cycles. At the margin, our macroeconomic strategies "paid off" as our overweight to materials and underweight to health care and consumer staples boosted benchmark-relative returns. WHAT IS YOUR OUTLOOK AND STRATEGY? Although the market favored higher-valued speculative growth stocks and small cap stocks during most of 2003, our strategy of owning reasonably priced companies with good dividend yields showed signs of outperformance in the fourth quarter. This is encouraging for 2004. The combination of a stronger economy, higher interest rates and a weaker dollar is unlikely to lead to further multiple expansions for the speculative stocks, and therefore we believe the Fund is well-positioned as we begin the new year. 8 Hartford Equity Income HLS Fund inception 10/31/2003 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 10/31/03 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> EQUITY INCOME IA S&P 500 INDEX ---------------- ------------- 10/31/2003 10000.00 10000.00 11/30/2003 10069.70 10087.90 12/31/2003 10764.80 10616.60 </Table> <Table> --- EQUITY INCOME IA --- RUSSELL 1000 VALUE INDEX $10,000 starting value $10,000 starting value $10,765 ending value $10,760 ending value </Table> CUMULATIVE RETURNS(2) (as of 12/31/03) <Table> <Caption> SINCE INCEPTION - -------------------------------------- Equity Income IA 7.65% - -------------------------------------- Equity Income IB 7.59% - -------------------------------------- Russell 1000 Value Index 7.60% - -------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER JOHN R. RYAN, CFA Senior Vice President, Managing Partner - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Equity Income HLS Fund, Class IA returned 7.65% since its inception date of October 31, 2003. The fund outperformed the Russell 1000 Value Index, which returned 7.60% over the same period. WHY DID THE FUND PERFORM THIS WAY? An improving economy, strong corporate profits and better investor sentiment led to strong equity market performance during the period. In contrast to the trends earlier in the year, value outperformed growth during the two months as the Russell 1000 Value Index return of 7.60% bested the Russell 1000 Growth Index return of 4.55% by over 300 basis points during the period. The Fund's outperformance during this period was due to both strong stock selection and sector allocation. Our industrials and consumer discretionary names performed well, highlighted by the strong gains of Caterpillar, Inc. (machinery) and General Motors Corp. (transportation), respectively. In addition, our high exposure to the energy and materials sectors also worked to boost returns. Top contributors during the period included General Motors Corp. (transportation), Exxon Mobil Corp. (energy & services), and Alcoa, Inc. (metals, minerals & mining). Our relatively poor stock selection within financials and information technology was detrimental to portfolio returns as Washington Mutual, Inc. (banks) and Nokia Corp. (communications) were among the greatest detractors for the period. In the case of Washington Mutual, Inc., the stock performed poorly as the company restated its earnings outlook due to changing mortgage market conditions. In the case of Nokia Corp., the stock "treaded water" during the period as investors digested a mixed bag of corporate announcements. We continued to hold both securities at the end of the year and have been rewarded for our patience as Nokia Corp. released a positive earnings surprise early in 2004. WHAT IS YOUR OUTLOOK AND STRATEGY? The market finished the year strongly, driven by robust economic growth, solid corporate profits, and low interest rates. We expect this economic momentum to continue into 2004, as we reap the remaining benefits of the recent tax cuts and continued low interest rates, combined with improvement in employment gains and capital spending. Additionally, the weaker dollar and stronger global economic growth should also help strengthen the U.S. recovery. While we continue to have an optimistic view towards the economy, the stock market is already incorporating very favorable economic and corporate profits views. We would expect market returns to moderate in 2004 as corporate profit growth meets higher expectations, combined with expectations of rising interest rates. 9 Hartford Focus HLS Fund inception 4/30/2001 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 4/30/01 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> FOCUS IA S&P 500 INDEX -------- ------------- 4/30/01 10000 10000 10111 10067 6/01 9963 9822 9783 9726 9572 9117 8758 8381 9111 8542 9948 9197 12/01 10394 9278 10062 9142 9957 8966 10201 9303 9261 8739 9015 8675 6/02 8281 8058 7867 7430 7849 7478 6948 6666 7638 7252 8399 7678 12/02 7838 7228 7674 7039 7467 6933 7502 7001 8039 7577 8520 7976 6/03 8594 8078 8945 8220 9019 8380 8824 8291 9399 8760 9480 8837 12/03 10061 9300 </Table> <Table> --- FOCUS IA --- S&P 500 INDEX $10,000 starting value $10,000 starting value $10,061 ending value $9,300 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR SINCE INCEPTION - -------------------------------------------- Focus IA 28.37% 0.23% - -------------------------------------------- Focus IB 28.05% 0.01% - -------------------------------------------- S&P 500 Index 28.67% -2.68% - -------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER RAND L. ALEXANDER, CFA Senior Vice President, Partner - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Focus HLS Fund, Class IA returned 28.37% for the 12 months ended December 31, 2003. The Fund outperformed the Lipper Large Cap Core VA-UF Average, which returned 26.43% over the same period. The Fund underperformed the S&P 500 Index, which returned 28.67% over the same period. WHY DID THE FUND PERFORM THIS WAY? The Fund generated strong absolute returns in 2003 as the equity markets rebounded after three years of negative returns. Low interest rates, tax cuts, a stabilizing employment picture, and a weakening dollar provided a boost to the U.S. economy, and in turn, investor confidence. All ten sectors of the S&P 500 Index posted positive gains for the year. While the recovery was broad-based by industry, there was a notable divergence in the performance of companies depending on their market capitalization. Investors had a sharp change in risk perception and bought the stocks of the companies that had the most financial and operating leverage. In this environment, there was nearly an inverse relationship between company size and returns; smallest stocks performed the best and mega-cap stocks performed the worst. The Fund generated strong returns through positive sector allocation decisions, strong overall stock selection in financials and health care, and solid performance from some individual holdings. We maintained overweight positions in information technology and consumer discretionary, two of strongest areas of the market during 2003. We also remained underweight telecommunication services, which was the poorest performing sector, as the industry continues to work through capacity issues. Strong absolute contributors during the year included Citigroup, Inc. (banks), Intel Corp. (software & services), and Cisco Systems, Inc. (computers & office equipment). Citigroup, Inc. has executed well, controlled expenses, and is leveraged to an improvement in capital market activity. Intel Corp. benefited from a strong semiconductor cycle in 2003 and continually beat earnings expectations throughout the year. Cisco Systems, Inc. rose sharply during the year driven by a rebound in technology spending and new product introductions. The Fund's results relative to the benchmark were hindered by somewhat weaker stock selection within information technology and consumer staples. Our technology holdings had strong absolute returns, but due to our large-cap, high quality bias, we did not own some of the smaller-cap, speculative technology companies that were top performers. Within consumer staples, we had disappointing results from Safeway, Inc. (consumer non-durables) who lowered their earnings guidance resulting from increasing operating costs and declining margins due to competition from Wal-Mart Stores. Safeway, Inc. was eliminated from the portfolio. WHAT IS YOUR OUTLOOK AND STRATEGY? We have a positive outlook for 2004. Tax cuts, a weaker dollar, sustained productivity, and healthier balance sheets all bode well for corporate profits. The consumer has driven the economic recovery so far; however, we will look for improved corporate spending and employment trends as key gauges to determine the sustainability of the domestic recovery. At this juncture, we believe a sustainable up-trend will in fact unfold over the next several months and support growth in 2004. We believe the environment bodes well for large-cap, multi-national, industry leading companies on both a fundamental and valuation basis. The valuation premium for industry leadership has been eliminated in many cases. Fund holdings such as Microsoft Corp. (software & services), American International Group, Inc. (insurance) and Pfizer, Inc. (drugs) have valuations at or below peer companies. 10 Hartford Global Advisers HLS Fund inception 3/1/1995 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 3/1/95 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> LEHMAN GLOBAL AGGREGATE GLOBAL ADVISERS IA MSCI WORLD INDEX INDEX USD HEDGED INDEX ------------------ ---------------- ----------------------- 3/1/95 10000.00 10000.00 10000.00 10296.00 10484.00 10107.00 10544.00 10851.00 10256.00 10741.00 10946.00 10614.00 10703.00 10945.00 10645.00 11087.00 11495.00 10690.00 10918.00 11241.00 10807.00 11040.00 11570.00 10928.00 11059.00 11390.00 11060.00 11275.00 11788.00 11255.00 12/95 11584.00 12135.00 11399.00 11830.00 12357.00 11503.00 11814.00 12434.00 11332.00 11943.00 12643.00 11320.00 12276.00 12943.00 11344.00 12222.00 12956.00 11358.00 12250.00 13024.00 11488.00 12013.00 12566.00 11543.00 12135.00 12713.00 11586.00 12340.00 13213.00 11810.00 12432.00 13308.00 12041.00 12869.00 14056.00 12262.00 12/96 12950.00 13833.00 12205.00 12927.00 14002.00 12285.00 13008.00 14166.00 12334.00 12958.00 13888.00 12227.00 12976.00 14345.00 12389.00 13511.00 15233.00 12491.00 13984.00 15995.00 12664.00 14328.00 16734.00 12939.00 13729.00 15617.00 12878.00 14267.00 16468.00 13084.00 13661.00 15604.00 13225.00 13599.00 15882.00 13303.00 12/97 13665.00 16078.00 13446.00 13890.00 16529.00 13626.00 14481.00 17650.00 13668.00 14938.00 18397.00 13745.00 15219.00 18580.00 13810.00 15362.00 18350.00 13962.00 15397.00 18788.00 14057.00 15568.00 18761.00 14138.00 14186.00 16262.00 14380.00 14004.00 16552.00 14707.00 14640.00 18051.00 14666.00 15229.00 19127.00 14787.00 12/98 15489.00 20065.00 14760.00 15831.00 20507.00 14942.00 15548.00 19964.00 14755.00 16115.00 20798.00 14872.00 16589.00 21621.00 14985.00 16132.00 20834.00 14899.00 16514.00 21809.00 14762.00 16767.00 21746.00 14701.00 16783.00 21711.00 14712.00 16856.00 21503.00 14800.00 17206.00 22624.00 14839.00 17799.00 23263.00 14892.00 12/99 19077.00 25149.00 14876.00 18465.00 23712.00 14849.00 19270.00 23779.00 14990.00 19288.00 25425.00 15190.00 18665.00 24353.00 15203.00 18254.00 23740.00 15243.00 18781.00 24542.00 15433.00 18484.00 23854.00 15553.00 18710.00 24633.00 15668.00 18189.00 23326.00 15795.00 17726.00 22938.00 15913.00 17373.00 21549.00 16181.00 12/00 17812.00 21900.00 16414.00 17964.00 22326.00 16639.00 17168.00 20441.00 16786.00 16587.00 19103.00 16896.00 17249.00 20519.00 16815.00 17145.00 20265.00 16915.00 16953.00 19633.00 17000.00 16806.00 19374.00 17251.00 16255.00 18448.00 17412.00 15492.00 16825.00 17552.00 15816.00 17149.00 17871.00 16662.00 18166.00 17722.00 12/01 16699.00 18282.00 17603.00 16402.00 17730.00 17686.00 16403.00 17580.00 17780.00 16677.00 18396.00 17591.00 16433.00 17744.00 17828.00 16706.00 17785.00 17912.00 16089.00 16709.00 18098.00 15387.00 15302.00 18288.00 15359.00 15334.00 18550.00 14371.00 13650.00 18799.00 15265.00 14661.00 18751.00 16044.00 15454.00 18774.00 12/02 15204.00 14707.00 19091.00 15133.00 14263.00 19179.00 15036.00 14019.00 19370.00 14933.00 13981.00 19353.00 15902.00 15229.00 19458.00 16578.00 16107.00 19794.00 16798.00 16392.00 19731.00 16973.00 16728.00 19324.00 17243.00 17093.00 19315.00 16998.00 17201.00 19666.00 17729.00 18225.00 19481.00 18000.00 18507.00 19509.00 12/03 18589.00 19672.00 19696.00 </Table> <Table> --- GLOBAL ADVISERS IA --- MSCI WORLD INDEX MMMM LEHMAN GLOBAL $10,000 starting $10,000 starting AGGREGATE INDEX value value USD HEDGED $18,589 ending value $19,672 ending value $10,000 starting value $19,696 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> SINCE 1 YEAR 5 YEAR INCEPTION - -------------------------------------------------------- Global Advisers IA 22.26% 3.72% 7.26% - -------------------------------------------------------- Global Advisers IB(5) 21.97% 3.50% 7.02% - -------------------------------------------------------- MSCI World Index 33.76% -0.39% 7.95% - -------------------------------------------------------- Lehman Global Aggregate Index USD Hedged 3.17% 5.94% 7.97% - -------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGEMENT TEAM ANDREW S. OFFIT Senior Vice President, Partner ROBERT L. EVANS Senior Vice President, Partner SCOTT M. ELLIOTT Senior Vice President, Partner - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Global Advisers HLS Fund, Class IA returned 22.26% for the 12 months ended December 31, 2003. The Fund outperformed the Composite Index (Morgan Stanley Capital International (MSCI) World Index 55%, Lehman Brothers Global Aggregate Index USD Hedged 35% and 90 day Treasury Bills 10%), which returned 19.06% over the same period. The Fund underperformed the Lipper Global Flexible VA-UF Average, which returned 26.18% over the same period. WHY DID THE FUND PERFORM THIS WAY? The rebound in the global equity markets was broad-based in 2003. The surge in equities began with the ending of the conflict in Iraq and has been fueled by increases in consumer confidence and manufacturing output, resilience in consumer spending and productivity gains, and support from low interest rates and reduced tax rates. Across both the equity and fixed income asset classes, there was an overall trend of lower quality securities providing superior returns than higher quality investments as the markets shifted from risk aversion to risk pursuit. Among bonds, emerging markets debt and high yield bonds outperformed U.S. Treasuries and other investment grade issues. Within the equity markets, emerging markets outperformed developed markets and small caps outperformed large caps. The Fund produced strong returns relative to its benchmark by adding value in three areas: asset allocation among stocks, bonds, and cash; underlying investments in equities, and fixed income management. Our asset allocation was prudent in the environment where stocks outperformed bonds; we maintained an equity ratio around 60% all year, higher than the 55% level of the composite benchmark. Within the equity portion, performance was primarily driven by strong stock selection and an overweight position in technology. The three largest contributors to the Fund's absolute returns were all from this sector: French technology hardware company Alcatel S.A. (communications), the Canadian technology hardware company Nortel Networks Corp. (communications) and the Japanese software services company Yahoo Japan, Inc. (software & services). In addition, the Fund's overweight in consumer discretionary stocks and good stock selection in health care, financials, and telecommunications added to relative performance. These returns were offset somewhat by the Fund's overweight position and poor stock selection in materials. Individual holdings that detracted from absolute returns were Lukoil Holdings ADR (energy & services), the Russian oil and gas company, and Schering-Plough Corp. (drugs), the U.S. pharmaceuticals company. Both stocks were sold from the Fund. Within the fixed income portion, we managed country and sector allocation and currency exposure relatively well. Specific examples included overweight positions in German 10-year bonds versus an underweight in U.S. Treasuries and an underweight position in the U.S. dollar versus a basket of currencies including the Australian and Canadian dollars, the euro, and the Japanese yen. With regards to duration, the fund had some positive tactical shifts over the course of the year, but performance was hindered somewhat by yield curve positions in the United Kingdom and Japan in the fourth quarter of 2003 WHAT IS YOUR OUTLOOK AND STRATEGY? The global economic expansion is underway. Economic activity is improving in every region led by strong growth momentum in the U.S. and China. In addition, inflation remains subdued across all regions enabling central banks in North America and Asia to maintain accommodative monetary policies. The equity portion of the Fund has its largest overweight position in information technology, health care, and industrials. The fixed income portion is positioned in anticipation of a potential continuation of the U.S. dollar decline, especially against Asia. The combination of improving economic activity and accommodating monetary policy is positive for corporate fundamentals, but corporate bond valuations are now closer to fair value. We are maintaining modest corporate bond exposure in the Fund. 11 Hartford Global Communications HLS Fund inception 12/27/2000 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 12/27/00 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> MSCI AC WORLD FREE TELECOMMUNICATION SERVICES GLOBAL COMMUNICATION IA INDEX S&P 500 INDEX ----------------------- -------------------------- ------------- 12/27/00 10000 10000 10000 9981 10004 9935 11996 10986 10288 9543 9283 9350 8023 8762 8758 8774 9429 9438 6/01 8075 8703 9501 7709 8131 9270 7569 8225 9179 6520 7347 8605 6210 7437 7910 5899 7165 8061 6216 7506 8680 12/01 6414 7550 8756 5610 6874 8628 5008 6561 8462 5200 6647 8780 4630 5923 8248 4643 5962 8187 6/02 4023 5343 7604 3800 5063 7012 4001 5058 7058 3499 4278 6291 4261 5250 6844 4736 5812 7247 12/02 4530 5468 6821 4490 5348 6643 4459 5071 6544 4393 5008 6607 4823 5610 7151 5256 6283 7527 6/03 5542 6336 7623 5564 6187 7758 5622 6169 7909 5851 6207 7825 6358 6505 8267 6584 6727 8340 12/03 7265 7278 8777 </Table> <Table> --- GLOBAL COMMUNICATIONS IA --- MSCI AC WORLD FREE $10,000 starting value TELECOMMUNICATION SERVICES INDEX $7,265 ending value $10,000 starting value $7,278 ending value MMM S&P 500 INDEX $10,000 starting value $8,777 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> SINCE 1 YEAR INCEPTION - ------------------------------------------------------------- Global Communications IA 60.37% -10.07% - ------------------------------------------------------------- Global Communications IB 59.97% -10.26% - ------------------------------------------------------------- MSCI AC World Free Telecommunication Services Index 27.44% -11.35% - ------------------------------------------------------------- S&P 500 Index 28.67% -4.24% - ------------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGEMENT TEAM ARCHANA BASI, CFA Vice President, Portfolio Coordinator, Global Industry Analyst DAVID NINCIC, CFA Vice President, Global Industry Analyst - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Global Communications HLS Fund, Class IA returned 60.37% for the 12 months ended December 31, 2003. The Fund outperformed both the Morgan Stanley Capital International (MSCI) All Country World Free Telecommunications Service Index, which returned 27.44% and the S&P 500 Index, which returned 28.67% over the same period. (There is no comparative variable annuity Lipper group available.) WHY DID THE FUND PERFORM THIS WAY? The Fund's outperformance over the twelve-month period relative to the MSCI AC World Free Telecommunications Services Index was driven by superior stock selection across the sub-sectors invested in by the portfolio. Throughout the period, roughly two-thirds of the Fund was invested within the integrated/diversified telecommunications sub-sector and roughly one-third was invested within the wireless telecommunications sub-sector. Within the integrated/diversified telecommunications sub-sector, top contributors included British company Cable & Wireless (communications), Philippine Long Distance Telephone Co. (communications), and Telekom South Africa Ltd., ADR (communications). The Fund did not hold Cable & Wireless at the end of the period. In general, we continue to find increasingly attractive wireline opportunities in less developed countries as revenue opportunities significantly outpace those within more mature developed markets. These investments more than offset the investment in AT&T Corp. (communications), which was the largest detractor from Fund returns. Regulatory changes have led to increased competition, as the RBOCs (Regional Bell Operating Companies) move into the enterprise telecommunications space and expand their long-distance services. This negatively impacted revenue growth at AT&T Corp. more than expected. The Fund did not hold AT&T Corp. at the end of the period. Our wireless holdings performed exceptionally well during the period, led by Nextel Communications, Inc. (communications), the top contributor to Fund returns. Nextel Communications, Inc. offers a walkie-talkie phone service, which has provided the company with an important advantage in the highly competitive U.S. cell phone market. The recent move to number portability allows users to switch between carriers but retain their existing phone number, and this should allow Nextel Communications, Inc. to further market share inroads. WHAT IS YOUR OUTLOOK AND STRATEGY? We believe that 2004 will be tough for both wireline and wireless stocks. Wireline carriers face access line declines and voice substitutions to wireless, which is already being reflected in financial results of many companies in this area. In addition, an additional competitive threat to wireline carriers is the cable companies' introduction of internet phone service, "voice over IP" (voice over internet protocol). Longer-term, the movement to fiber-based systems by the wireline companies could mitigate the threat from voice over IP. In the wireless sub-sector, carriers outside of the U.S. should experience weak subscriber growth, and price competition is intensifying throughout the world. Despite a difficult telecom industry backdrop, we believe that the Fund can continue to find underpriced stocks of companies with solid business fundamentals, which are not appreciated by the market. 12 Hartford Global Financial Services HLS Fund inception 12/27/2000 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 12/27/00 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> MSCI FINANCE EX REAL ESTATE GLOBAL FINANCIAL SERVICES IA INDEX S&P 500 INDEX ---------------------------- --------------------------- ------------- 12/27/00 10000 10000 10000 9992 10174 9935 9866 10177 10288 9623 9514 9350 9267 8952 8758 9721 9333 9438 9963 9279 9501 6/01 10015 9198 9270 9913 9004 9179 9750 8906 8605 8861 7961 7910 8896 7973 8061 9149 8382 8680 12/01 9420 8477 8756 9002 8182 8628 8985 8038 8462 9443 8616 8780 9462 8643 8248 9345 8754 8187 6/02 9035 8274 7604 8149 7494 7012 8141 7591 7058 7204 6550 6291 7656 7184 6844 8062 7536 7247 12/02 7643 7097 6821 7297 6864 6643 7127 6719 6544 7102 6592 6607 7814 7515 7151 8211 7945 7527 6/03 8287 8053 7623 8555 8408 7758 8528 8345 7909 8687 8546 7825 9328 9233 8267 9378 9292 8340 12/03 9957 9858 8777 </Table> <Table> --- GLOBAL FINANCIAL --- MSCI FINANCE EX REAL MMMM S&P 500 INDEX SERVICES IA ESTATE INDEX $10,000 starting value $10,000 starting value $10,000 starting value $8,777 ending value $9,957 ending value $9,858 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> SINCE 1 YEAR INCEPTION - --------------------------------------------------------- Global Financial Services IA 30.29% -0.14% - --------------------------------------------------------- Global Financial Services IB 29.96% -0.36% - --------------------------------------------------------- MSCI Finance ex Real Estate Index 38.90% -0.48% - --------------------------------------------------------- S&P 500 Index 28.67% -4.24% - --------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGEMENT TEAM MARK T. LYNCH, CFA Senior Vice President, Partner, Portfolio Coordinator, Global Industry Analyst THEODORE SHASTA, CFA Senior Vice President, Partner, Global Industry Analyst JENNIFER NETTESHEIM, CFA Vice President, Partner, Global Industry Analyst ANDREW R. HEISKELL Vice President, Global Industry Analyst ERIC HALET Vice President, Global Industry Analyst - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Global Financial Services HLS Fund, Class IA returned 30.29% for the 12 months ended December 31, 2003. The Fund outperformed the S&P 500 Index, which returned 28.67% over the same period. The Fund underperformed the Morgan Stanley Capital International (MSCI) Finance ex-Real Estate Index, which returned 38.90% over the same period. (There is no comparative variable annuity Lipper group available.) WHY DID THE FUND PERFORM THIS WAY? During the period, global financial stocks had positive returns that were stronger than the broad market, as the MSCI Financials sector returned 39.7% versus the 33.8% return of the MSCI World Index. Improving credit quality, rising equity markets, a steeper yield curve, and the mortgage refinancing boom led to strength in the sector in 2003. Relative to the MSCI Finance ex-Real Estate Index, the Fund's sub-sector allocation and stock selection decisions both resulted in underperformance. The Fund's overweight allocation to and relatively weaker stock selection within the insurance sub-sector detracted from relative returns. Though still recording strong double-digit gains within the Fund and the benchmark, insurance stocks were a relatively weaker area of the sector during the year. Alternatively, the capital markets companies were strong performers in the sector, benefiting greatly from the improved condition of the financial markets and the resultant increase in business. However, the Fund had relatively weak stock selection and an underweight position within the capital markets sub-sector during the period, detracting from relative returns. The largest contributors to the Fund's strong absolute returns were commercial bank stocks, led by Italian bank Unicredito Italiano S.p.A (banks) and Banco Latinoamericano de Exportaciones (banks), a multinational bank that specializes in financing foreign trade for Latin American and Caribbean countries. The firm continues to recover from a liquidity crisis brought on by the failure of the Argentine banking system. The largest detractors from Fund returns were Investment Technology Group (financial services), Clark, Inc. (insurance), and Dexia (banks), which were not held in the Fund as of the end of the period. WHAT IS YOUR OUTLOOK AND STRATEGY? European investment banks have compelling valuations going into 2004 and this, along with improving fundamentals, makes the industry one to watch for the coming year. These trends will benefit our diversified financials sub-sector weighting. Should the economy follow its course and enjoy a typical recovery, the banking industry will do quite well. Rates will rise gradually, the banks will raise deposit rates gradually, and a combination of rising margins and operating leverage should lead to positive earnings growth. The Fund is well represented to benefit from strength in the bank sub-sector, should this be the case. Our view of the insurance sub-sector remains favorable and we remain overweight. While premiums in the property business have stabilized, those in the casualty business continue to rise, demand remains strong, and we expect pricing to be adequate or better for the next several years. Key drivers for the insurance industry will be a strong property-casualty pricing cycle, stable or higher interest rates, an improving economy, and a better tone in the capital markets. 13 Hartford Global Health HLS Fund inception 5/1/2000 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 5/1/00 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> GOLDMAN SACHS HEALTH GLOBAL HEALTH IA CARE INDEX S&P 500 INDEX ---------------- -------------------- ------------- 5/1/00 10000 10000 10000 10246 10391 9689 11908 11522 9928 12165 11132 9773 12828 11534 10380 13691 12043 9832 13911 12333 9790 14268 12507 9019 12/00 14818 12959 9063 13996 11763 9385 13953 11708 8529 13103 10664 7989 13814 11130 8609 14476 11375 8667 14548 11088 8456 14475 11392 8373 14259 11100 7849 13803 11014 7216 14128 11029 7354 14915 11619 7918 12/01 15120 11399 7987 14697 11094 7871 14770 11038 7719 15160 11176 8009 14647 10478 7524 14202 10274 7469 12923 9297 6937 12557 9093 6397 12342 9158 6438 11594 8669 5739 12341 9072 6243 13180 9325 6611 12/02 12554 9002 6223 12372 9007 6060 11987 8852 5969 12142 9121 6027 13194 9541 6523 14436 9986 6866 14762 10414 6954 14819 10455 7077 14700 10226 7215 15044 10241 7138 15379 10342 7541 15815 10529 7608 12/03 16610 11091 8006 </Table> <Table> --- GLOBAL HEALTH IA --- GOLDMAN SACHS HEALTH MMMM S&P 500 INDEX $10,000 starting value CARE INDEX $10,000 starting value $16,610 ending value $10,000 starting value $8,006 ending value $11,091 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> SINCE 1 YEAR INCEPTION - -------------------------------------------------------- Global Health IA 32.31% 14.83% - -------------------------------------------------------- Global Health IB 31.98% 14.59% - -------------------------------------------------------- Goldman Sachs Health Care Index 23.20% 2.86% - -------------------------------------------------------- S&P 500 Index 28.67% -5.88% - -------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGEMENT TEAM JOSEPH H. SCHWARTZ, CFA Senior Vice President, Partner, Portfolio Coordinator, Global Industry Analyst JEAN M. HYNES, CFA Senior Vice President, Partner, Global Industry Analyst ANN C. GALLO Senior Vice President, Partner, Global Industry Analyst KIRK J. MAYER, CFA Vice President, Global Industry Analyst ROBERT L. DERESIEWICZ Assistant Vice President, Global Industry Analyst - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Global Health HLS Fund, Class IA returned 32.31% for the 12 months ended December 31, 2003. The Fund outperformed both the Goldman Sachs Health Care Index, which returned 23.20% and the S&P 500 Index, which returned 28.67% over the same period. (There is no comparative variable annuity Lipper group available.) WHY DID THE FUND PERFORM THIS WAY? During the period, global health care stocks globally had positive returns but were weaker than other broad sectors as the MSCI Health Care sector returned 20.0% versus the 33.8% return of the MSCI World Index. Overall, the market commonly regards the health care sector as being a more defensive sector, and the environment over the last year benefited more cyclical areas of the market. Both stock selection and sub-sector allocation decisions drove the Fund's outperformance relative to the Goldman Sachs Health Care Index. Stock selection was particularly strong within the pharmaceuticals and health care equipment sub-sectors. In terms of allocation, the Fund maintained an overweight to biotechnology stocks relative to the benchmark, where we believed that valuations did not adequately reflect the potential of new product pipelines. This positioning served the Fund well as investors flocked back to the more speculative sectors of the market, including biotechnology. The best absolute contributors within the portfolio during this time period included Genzyme Corp. (drugs), which won new drug approvals from the FDA; Guidant Corp. (medical instruments & supplies), which benefited from a slower-than-expected decline in its bare metal stent sales; and AstraZeneca PLC (drugs), which continued to enjoy superior performance versus the other major pharmaceutical stocks due to its growth outlook. The greatest detractors were HealthSouth (health services), a stock held for an interim time during the period, and Schering-Plough Corp. (drugs), which experienced competitive pressures across several key drug franchises. We continued to own Schering-Plough Corp. at the end of the period, seeing solid growth potential for their cholesterol drug Zetia. WHAT IS YOUR OUTLOOK AND STRATEGY? There will be fewer pressures on the health care industry overall as the economic environment improves and companies increase employment and health packages offered. In addition, the passage of a U.S. Medicare Bill is a positive for parts of the industry near-term, as there is clear data that people with insurance coverage employ more health care than those without. The largest valuation drag on the large cap pharmaceutical sub-sector is the market's fears of large patent losses. However, the generic industry is now going after fundamentally stronger patents than over the last five years, and the odds favor the drug industry in these challenges. Biotechnology companies are highly leveraged to the FDA's greater propensity for approval of orphan cancer drugs. Within the health care services sub-sector, we favor the drug distributors to perform strongly moving into the second half of 2004. The evolution to a fee-for-service-based industry business model will be beneficial to these companies in the long run. Within the medical devices sub-sector, several years of strong relative performance for medical technology stocks have left fewer stocks with attractive valuations, though fundamentals remain strong. 14 Hartford Global Leaders HLS Fund inception 9/30/1998 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 9/30/98 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> GLOBAL LEADERS IA MSCI WORLD INDEX ----------------- ---------------- 9/30/98 10000 10000 11346 10906 12212 11556 12/98 13188 12122 13799 12389 13410 12062 14140 12566 14488 13063 13962 12587 14974 13176 15199 13138 15118 13117 14930 12991 15905 13668 17087 14055 12/99 19830 15194 19086 14326 21213 14366 21161 15361 20137 14713 19563 14342 20430 14827 19746 14412 20868 14882 19982 14093 18833 13858 17723 13019 12/00 18429 13231 18436 13488 16744 12350 15624 11541 16849 12397 16516 12243 16215 11861 15819 11705 14951 11145 13654 10165 14039 10361 15284 10975 12/01 15373 11046 14870 10712 14782 10621 15250 11114 14742 10720 15056 10745 14111 10095 12961 9245 12831 9264 11285 8247 12455 8857 13558 9337 12/02 12375 8886 12089 8617 11818 8470 11656 8447 12962 9201 13754 9731 14076 9904 14418 10106 14833 10327 14454 10392 15595 11011 15972 11181 12/03 16777 11885 </Table> <Table> --- GLOBAL LEADERS IA --- MSCI WORLD INDEX $10,000 starting value $10,000 starting value $16,777 ending value $11,885 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> SINCE 1 YEAR 5 YEAR INCEPTION - ------------------------------------------------------ Global Leaders IA 35.57% 4.93% 10.35% - ------------------------------------------------------ Global Leaders IB 35.24% 4.72% 10.13% - ------------------------------------------------------ MSCI World Index 33.76% -0.39% 3.34% - ------------------------------------------------------ </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER ANDREW S. OFFIT Senior Vice President, Partner - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Global Leaders HLS Fund, Class IA returned 35.57% for the 12 months ended December 31, 2003. The Fund outperformed both the Lipper Global Funds VA-UF Average, which returned 33.65% and the Morgan Stanley Capital International (MSCI) World Index, which returned 33.76% over the same period. WHY DID THE FUND PERFORM THIS WAY? The rebound in the global equity markets was broad based, with all developed markets participating in the advance and the majority of the ten broad market sectors of the MSCI World Index registering double-digit returns. The rally was propelled by continued signs of improvement in the global economy and reduced uncertainty in the geopolitical arena. At the regional level, performance was strongest within Emerging Markets and Asia excluding Japan. Performance within the United States and the United Kingdom was less robust during the period, though positive nonetheless. Our outperformance versus the benchmark was primarily driven by strong stock selection and an overweight to technology. The three largest contributors to the Fund's absolute returns were all from this sector: French technology hardware company Alcatel S.A. (communications), the Canadian technology hardware company Nortel Networks Corp. (communications), and the Japanese software services company Yahoo Japan, Inc. (software & services). In addition, the Fund's overweight in consumer discretionary stocks and good stock selection in health care, financials, and telecommunications added to relative performance at the margin. These returns were offset somewhat by the Fund's overweight and poor stock selection in materials. Three of the largest detractors from absolute returns were Lukoil Holdings ADR (energy & services), the Russian oil and gas company, Fast Retailing, Inc. (retail), the Japanese retailer, and Schering-Plough Corp. (drugs), the U.S. pharmaceuticals company. Of these three companies, only Fast Retailing, Inc. is still held. While we do not manage the Fund according to country weights, but instead, focus mainly on sector and stock weights, countries and regions played a part in our outperformance for the period. The Fund was helped by being overweight in Europe, largely due to the depreciation of the U.S. dollar. In addition, the Fund's positions in emerging market securities, though small, contributed to positive relative returns. WHAT IS YOUR OUTLOOK AND STRATEGY? Our outlook remains positive. We are positioned for economic growth and are beginning to see many of the trends play out in stock price performance. We continue to believe that many growth sectors will have "time on their side". 15 Hartford Global Technology HLS Fund inception 5/1/2000 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 5/1/00 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> GOLDMAN SACHS TECHNOLOGY COMPOSITE GLOBAL TECHNOLOGY IA INDEX S&P 500 INDEX -------------------- -------------------- ------------- 5/1/00 10000 10000 10000 8904 8898 9689 10278 9992 9928 9657 9527 9773 10986 10766 10380 9406 9022 9832 8539 8341 9790 6473 6431 9019 12/00 6263 5880 9063 7249 6845 9385 5667 4947 8529 4896 4260 7989 5773 5073 8609 5508 4871 8667 5587 4884 8456 5233 4536 8373 4424 3946 7849 3446 3148 7216 3970 3653 7354 4662 4276 7918 12/01 4834 4200 7987 4780 4196 7871 4185 3635 7719 4497 3894 8009 3963 3417 7524 3728 3277 7469 3339 2814 6937 2992 2529 6397 2960 2497 6438 2428 2051 5739 2938 2499 6243 3432 2936 6611 12/02 2969 2509 6223 3031 2487 6060 3025 2525 5969 3029 2496 6027 3349 2756 6523 3718 3064 6866 3753 3056 6954 3957 3232 7077 4212 3455 7215 4161 3405 7138 4647 3737 7541 4740 3809 7608 12/03 4795 3868 8006 </Table> <Table> --- GLOBAL TECHNOLOGY IA --- GOLDMAN SACHS TECHNOLOGY MMMM S&P 500 INDEX $10,000 starting COMPOSITE INDEX $10,000 starting value $10,000 starting value value $4,795 ending value $3,868 ending value $8,006 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> SINCE 1 YEAR INCEPTION - ------------------------------------------------- Global Technology IA 61.50% -18.16% - ------------------------------------------------- Global Technology IB 61.10% -18.32% - ------------------------------------------------- Goldman Sachs Technology Composite Index 54.19% -22.81% - ------------------------------------------------- S&P 500 Index 28.67% -5.88% - ------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGEMENT TEAM SCOTT E. SIMPSON Senior Vice President, Partner, Portfolio Coordinator, Global Industry Analyst JOHN F. AVERILL, CFA Senior Vice President, Partner, Global Industry Analyst ERIC STROMQUIST Senior Vice President, Partner, Global Industry Analyst BRUCE L. GLAZER Vice President, Global Industry Analyst ANITA M. KILLIAN, CFA Vice President, Global Industry Analyst VIKRAM MURTHY Assistant Vice President, Global Industry Analyst - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Global Technology HLS Fund, Class IA returned 61.50% for the 12 months ended December 31, 2003. The Fund outperformed both the Goldman Sachs Technology Composite Index, which returned 54.19% and the S&P 500 Index, which returned 28.67% over the same period. (There is no comparative variable annuity Lipper group available.) WHY DID THE FUND PERFORM THIS WAY? In 2003, a high degree of confidence returned to the market, especially benefiting more speculative or higher beta areas of the market. This investor sentiment was favorable for many technology names as the MSCI Information Technology sector appreciated 48.5% during the period, far surpassing the broad-based MSCI World Index return of 33.8%. The technology sector is showing clear signs of stabilization, evidenced by a series of favorable data points such as a pick-up in personal computer unit sales and high growth among computer storage companies. In addition, after a prolonged slump, global semiconductor sales have improved markedly thanks to higher average selling prices and increased demand from producers of personal computers and wireless handsets. Among wireless handsets, an upgrade cycle is underway, led by camera-enabled phones. To round out the positive news flow within the sector, a period of consolidation has begun among software companies. During the period, the Fund's outperformance relative to its market benchmark, the Goldman Sachs Technology Composite Index, was driven primarily by strong fundamental, bottom-up stock selection. Overall, our stock picking amongst computers & peripherals and semiconductors & semiconductor equipment names was most beneficial to our relative results. In terms of specific names, the greatest contributors to absolute return were Maxtor Corp. (computers & office equipment) and Cisco Systems, Inc. (software & services), which benefited from the pick-up in corporate storage and infrastructure spending, and Cendant Corp. (business services). On the negative side, the greatest detractor was Bisys Group (software & services), which suffered from earnings disappointments and news of managerial turnover. While the spending environment for services companies has improved less rapidly than for other areas of technology, industry fundamentals stand to benefit from the continued recovery in spending. WHAT IS YOUR OUTLOOK AND STRATEGY? Technology advances show no signs of slowing down: the computer and telecommunications revolution has barely begun. Demand for technology should continue to strengthen as corporate profits improve. IT spending has yet to reach its full potential. The strong consumer was behind the 2003 recovery but corporate spending is now expected to take its turn to sustain the rally into 2004. However, many technology stocks already fully reflect a recovery case. We continue to find attractive stocks but stock selection will become increasingly critical. This is a sector that will keep offering solid investment opportunities to the investment professional, but the opportunistic speculator may find it a difficult one to second-guess. 16 Hartford Growth HLS Fund inception 4/30/2002 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 4/30/02 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> GROWTH IA RUSSELL 1000 GROWTH INDEX --------- ------------------------- 4/30/02 10000 10000 9774 9758 6/02 8954 8856 8406 8369 8559 8394 7939 7523 8722 8213 9204 8659 12/02 8657 8061 8455 7865 8311 7829 8577 7975 9282 8564 9741 8991 6/03 9968 9115 10144 9342 10378 9574 10355 9472 11156 10004 11303 10109 12/03 11497 10458 </Table> <Table> --- GROWTH IA --- RUSSELL 1000 GROWTH INDEX $10,000 starting value $10,000 starting value $11,497 ending value $10,458 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR SINCE INCEPTION - ----------------------------------------------------------------- Growth IA 32.81% 8.71% - ----------------------------------------------------------------- Growth IB 32.48% 8.44% - ----------------------------------------------------------------- Russell 1000 Growth Index 29.74% 2.72% - ----------------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER ANDREW J. SHILLING, CFA Senior Vice President, Partner - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Growth HLS Fund, Class IA returned 32.81% for the 12 months ended December 31, 2003. The Fund outperformed both the Lipper Large Cap Growth VA-UF Average, which returned 28.37% and the Russell 1000 Growth Index, which returned 29.74% over the same period. WHY DID THE FUND PERFORM THIS WAY? During the period, large cap stocks continued to under-perform small and mid cap stocks while value marginally outperformed growth. All ten sectors of the Russell 1000 Growth Index posted positive returns for the period with utilities, telecommunications, technology and materials leading the way. The Fund's outperformance during the period was primarily due to strong stock selection within three key sectors: health care, financials, and consumer discretionary. Within financials and consumer discretionary, we were able to find attractive banks and media companies that stand to benefit from the recovery in the economic cycle. Among our health care names, our pharmaceutical holdings outperformed due to their solid product cycles. In keeping with the investment approach of the Fund, which is to invest in sectors that have the potential to outperform the market over the long-term, the Fund's significant underweight position in consumer staples, a defensive sector, significantly added to overall performance. Three top contributors to absolute returns were Countrywide Credit Industries, Inc. (banks), Guidant Corp. (medical instruments & supplies), and eBay, Inc. (retail). As of the end of the period, all three stocks were held in the portfolio. Poor stock selection within technology and industrials partially offset these strong contributors. Three significant detractors from performance were Schering-Plough Corp. (drugs), Seagate Technology (electronics), and Lockheed Martin Corp. (aerospace & defense). Schering-Plough Corp. suffered from competitive pressures across several key drug franchises. Schering-Plough Corp. and Lockheed Martin Corp. were eliminated from the portfolio as of period end. We continue to believe that trends in the hard drive industry should be favorable to Seagate Technology as demand for larger drives in computers is augmented by entirely new applications including personal video recorders and high-end gaming devices. WHAT IS YOUR OUTLOOK AND STRATEGY? Going forward, we continue to be constructive about the economy and corporate profits. The improved corporate sentiment is now being reflected in new orders, which should lift capital investment in 2004. Inventories remain quite low, so acceleration in orders could set off an inventory cycle that would result in healthy GDP growth for several quarters to come. Fiscal and monetary policy remains extremely stimulative, which we expect will continue to be the case throughout the election year of 2004. Although employment growth has been weak compared to past recoveries, we expect some improvement as corporate profits improve. The Fund is well positioned to benefit from acceleration in worldwide economic growth, which we expect to see over the next twelve months. While the strongest move in the equity markets is likely behind us, we are still early in the global economic recovery implying that rising profit expectations should continue to support moderate returns in the equity markets. The five-year trend of small caps outperforming large caps should reverse as the economic recovery matures, possibly later in 2004. Similarly growth, after underperforming value in the 2000-2003 period, should be in position to outperform sometime later in the market cycle. A moderately positive market environment coupled with a change in the small over large and value over growth trends of the recent past should bode well for our approach. 17 Hartford Growth Opportunities HLS Fund inception 3/24/1987 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 12/31/93 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> GROWTH OPPORTUNITIES IA RUSSELL 3000 GROWTH INDEX ----------------------- ------------------------- 12/31/93 10000 10000 10289 10234 10336 10060 9720 9562 9554 9605 9378 9718 8907 9420 9054 9723 9696 10282 9752 10159 9820 10386 9529 10045 12/94 9718 10456 9621 10396 9890 10836 10153 11153 10137 11389 10630 11762 11566 12250 12290 12805 12436 12834 12804 13391 12427 13331 12700 13856 12/95 12407 13958 12592 14366 13093 14667 13080 14712 13680 15175 14005 15731 13798 15640 12675 14621 13120 15067 14262 16131 14345 16149 15022 17287 12/96 14443 17012 15071 18131 14240 17917 13320 16921 13488 17929 14870 19337 15463 20100 16938 21807 16397 20710 17223 21794 16494 20935 16345 21681 12/97 16238 21901 16023 22465 17358 24182 18210 25150 18302 25480 17868 24652 18806 26049 17891 25699 14640 21672 15790 23377 16548 25204 17170 27124 12/98 19325 29570 19926 31277 18395 29743 19401 31273 19425 31501 18894 30608 20332 32712 20302 31674 20690 32068 20782 31481 22316 33749 24955 35686 12/99 29987 39573 29594 37824 38282 40187 34741 42460 31796 40276 29867 38145 34422 41171 33356 39329 37905 42927 37952 38996 34673 37058 28093 31511 12/00 31182 30702 30665 32848 26793 27348 23900 24407 26292 27487 26070 27159 26020 26636 25428 25858 23728 23776 20084 21304 21115 22480 23232 24621 12/01 24055 24677 23826 24210 22418 23168 23598 24049 22464 22186 22183 21593 19725 19607 17804 18395 17392 18446 16017 16568 17158 18045 18725 19075 12/02 17404 17757 17191 17322 16967 17218 17449 17535 19022 18854 20474 19871 21085 20151 21295 20724 22242 21282 21970 21031 23891 22259 24673 22529 12/03 25025 23256 </Table> <Table> --- GROWTH OPPORTUNITIES IA --- RUSSELL 3000 GROWTH INDEX $10,000 starting value $10,000 starting value $25,025 ending value $23,256 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR 10 YEAR - --------------------------------------------------------- Growth Opportunities IA 43.79% 5.31% 9.61% - --------------------------------------------------------- Growth Opportunities IB(3) 43.43% 5.04% 9.33% - --------------------------------------------------------- Russell 3000 Growth Index 30.97% -4.69% 8.81% - --------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional in formation including inception dates and expenses. PORTFOLIO MANAGER MICHAEL T. CARMEN, CFA Senior Vice President, Partner - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Growth Opportunities HLS Fund, Class IA returned 43.79% for the 12 months ended December 31, 2003. The Fund outperformed both the Lipper Multi Cap Growth VA-UF Average, which returned 35.24% and the Russell 3000 Growth Index, which returned 30.97% over the same period. WHY DID THE FUND PERFORM THIS WAY? Small and mid capitalization stocks were "the place to be" in the U.S. equity markets, as these stocks handily outperformed larger cap stocks and posted strong absolute returns. Boosted by improving news on the economic front and earnings comparisons that were beginning to look more compelling, investors continued to bid up U.S. equities through the end of December, especially small and mid cap stocks. The stagnant labor markets continued to be a source of concern, but investors weren't "losing any sleep" over the issue. Much debate was centered on whether the snapback from the March lows was "too far, too fast" for many stocks, especially information technology names, but the bears lost to the bulls in this debate, at least for now. The two areas that appeared to be showing the most robust recovery, PCs and wireless, ignited the spark of investor sentiment elsewhere in the sector. Since the second quarter of 2003, lower quality and/or high beta names have attracted the most investor interest. The Fund was well-served by our above-index exposure to both small and mid cap companies. In addition, our outperformance can be attributed to strong relative stock selection across a number of sectors. Health care, consumer discretionary, and industrials were the areas in which our investments excelled the most versus the index. Only within information technology were we disappointed with our stock selection and low relative exposure to this outperforming sector. However, we can live with the result, as it was a reflection of our aversion to holding some of the more speculative, high beta names in the universe, which tended to do well during the period. For the twelve-month period, the greatest contributors to absolute Fund returns were Cendant Corp. (business services), American Tower Corp., Class A (communications), and Nextel Communications, Inc. (communications). The stock of global business provider Cendant Corp. gained on continued strength in real estate, improvement in travel services, and progress with its Avis/Budget integration. The largest detractors from absolute Fund returns were Schering-Plough Corp. (drugs), NDC Health Corp. (health services), and AT&T Corp. (communications), all of which were eliminated from the portfolio prior to period end. WHAT IS YOUR OUTLOOK AND STRATEGY? Investor optimism surrounding the economy and the equity markets has mostly taken uniform shape. Tax cuts, a weaker dollar, sustained productivity, and healthier balance sheets all bode well for corporate profits. As the growth trajectory continues, we will continue to look for improved corporate spending and employment trends. Entering 2004, the Fund's consumer discretionary position is significantly overweight relative to the benchmark; we continue to seek companies that we consider market share gainers. In other areas of the growth universe, the Fund's overweight to the telecommunications services sector is a partial offset to the underweight to the information technology sector, where we feel valuations continue to be stretched. 18 Hartford High Yield HLS Fund inception 9/30/1998 (subadvised by Hartford Investment Management Company) PERFORMANCE OVERVIEW 9/30/98 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> LEHMAN HIGH YIELD HIGH YIELD IA CORPORATE INDEX ------------- ----------------- 9/30/98 10000 10000 9992 9795 10340 10202 12/98 10368 10213 10528 10364 10531 10303 10695 10402 10898 10603 10693 10460 10703 10437 10696 10479 10620 10363 10599 10289 10660 10221 10797 10341 12/99 10856 10457 10758 10412 10730 10431 10637 10212 10674 10229 10576 10123 10840 10330 10960 10408 11113 10479 11067 10388 10867 10056 10596 9657 12/00 10968 9844 11691 10581 11742 10722 11489 10469 11337 10339 11419 10525 11018 10230 11198 10381 11300 10503 10592 9797 11030 10039 11378 10406 12/01 11263 10363 11156 10436 10818 10290 10905 10538 11061 10706 10993 10647 10409 9862 9928 9431 10053 9700 9791 9573 9822 9489 10385 10077 12/02 10487 10218 10764 10558 10952 10688 11148 10995 11687 11647 11860 11768 12077 12106 11790 11973 11936 12111 12267 12442 12474 12693 12632 12886 12/03 12919 13177 </Table> <Table> --- HIGH YIELD IA --- LEHMAN HIGH YIELD $10,000 starting value CORPORATE INDEX $12,919 ending value $10,000 starting value $13,177 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR SINCE INCEPTION - --------------------------------------------------------- High Yield IA 23.18% 4.50% 5.00% - --------------------------------------------------------- High Yield IB 22.88% 4.28% 4.78% - --------------------------------------------------------- Lehman High Yield Corporate Index 28.96% 5.23% 5.39% - --------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGEMENT TEAM DAVID HILLMEYER, CFA Vice President CHRISTINE MOZONSKI, CFA, CPA Vice President - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford High Yield HLS Fund, Class IA returned 23.18% for the 12 months ended December 31, 2003. The Fund underperformed both the Lipper High Current Yield VA-UF Average, which returned 23.87%, and the Lehman Brothers High Yield Corporate Index, which returned 28.96% over the same period. WHY DID THE FUND PERFORM THIS WAY? The Fund's performance has benefited throughout the last twelve months from an overweight to the wireline and technology sectors. Our wireline exposure continued to pay off for the Fund as Qwest Corp's (communications) successful tender offer and release of its 2002 financials, which was a catalyst to move this credit higher, contributed to this performance. Also, technology and telecommunications has continued to perform quite well. Nortel Networks Corp. (communications) has seen domestic as well as overseas orders increase, and Nextel Communications, Inc. (communications) outperformed the broader market on very solid subscriber and churn numbers throughout the year and a successful reduction in their overall cost structure. Our opportunistic outlook for technology can be observed in the portfolio's overweight versus the benchmark, but valuations have led us to realize some gains in the sector given the industry's strong performance during the year. Additional improvement in capital expenditures and further signs of a turnaround in manufacturing are also encouraging signs for the high yield market. Additional performance was derived from the portfolio's underweight to the gaming sector, which significantly lagged the broader market. Our more conservative and underweight position to the improving electric utilities sector has caused a drag to performance for most of the year; however, we have been increasing the portfolio's holdings to the sector during the latter half of the year since the companies within the industry seem to be migrating to a "back to basics" style of management. Also issue selection in the airline sector hurt performance. WHAT IS YOUR OUTLOOK AND STRATEGY? The impressive performance of the high yield market in 2003 was not only attributable to the improving fundamentals witnessed by balance sheet improvements but also a very strong technical environment, supported by record flows into retail mutual funds. The institutional investor also provided additional demand to help absorb a near record new issue calendar of approximately $130 billion. As compared to 2002's new issue calendar of $59 billion. Although 2004 won't post the exceptionally high return of the previous year, we believe the sector's return will most likely be commensurate to the coupons earned on the underlying bonds. Furthermore, a friendly macroeconomic environment, which includes an improving labor market and manufacturing sector, and stimulative fiscal and monetary policies all bode well for the sector. In addition, the technical backdrop remains favorable. We continue to favor an overweight to the high yield market. The fundamentals remain solid, and the technical picture continues to look optimistic. Our credit research team sees encouraging signs for the high yield market as enterprise values continue to move higher, volatility remains low, and companies are still mindful of bondholders' interests. We believe the first few months of the year will reap some of the best performance of 2004 as lower rated issues lead the way higher; however, credit selection and curve position become more critical. The fundamentals as well as the technicals are poised to support market prices. 19 Hartford Index HLS Fund inception 5/1/1987 (subadvised by Hartford Investment Management Company) PERFORMANCE OVERVIEW 12/31/93 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> INDEX IA S&P 500 INDEX -------- ------------- 12/31/93 10000 10000 10331 10340 10046 10059 9608 9621 9726 9745 9881 9904 9646 9662 9959 9979 10361 10387 10107 10133 10328 10361 9952 9984 12/94 10094 10131 10353 10394 10751 10799 11062 11117 11380 11444 11825 11901 12093 12177 12489 12580 12515 12610 13030 13142 12966 13094 13527 13670 12/95 13783 13933 14242 14407 14365 14541 14508 14681 14706 14897 15080 15279 15123 15337 14443 14660 14740 14969 15557 15810 15976 16246 17178 17473 12/96 16828 17127 17863 18196 17997 18340 17242 17588 18270 18636 19379 19769 20231 20655 21831 22297 20602 21048 21722 22199 20991 21458 21945 22451 12/97 22315 22838 22556 23089 24172 24753 25399 26021 25647 26284 25191 25832 26212 26880 25923 26595 22166 22749 23583 24208 25491 26175 27020 27761 12/98 28577 29361 29752 30588 28816 29638 29959 30823 31102 32017 30347 31262 32031 32997 31016 31966 30860 31807 30007 30935 31890 32892 32526 33561 12/99 34432 35538 32692 33752 32061 33114 35174 36351 34105 35258 33391 34534 34204 35386 33658 34833 35734 36995 33837 35043 33682 34894 31018 32145 12/00 31161 32303 32253 33448 29301 30400 27436 28475 29557 30685 29742 30891 29005 30140 28709 29843 26900 27977 24709 25719 25175 26210 27096 28220 12/01 27324 28468 26911 28053 26384 27512 27366 28547 25698 26817 25494 26620 23675 24725 21821 22799 21955 22947 19562 20455 21281 22253 22521 23561 12/02 21190 22178 20628 21599 20312 21275 20501 21481 22193 23249 23349 24473 23635 24786 24044 25223 24501 25714 24231 25442 25593 26879 25809 27115 12/03 27152 28536 </Table> <Table> --- INDEX IA --- S&P 500 INDEX $10,000 starting value $10,000 starting value $27,152 ending value $28,536 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR 10 YEAR - --------------------------------------------- Index IA 28.13% -1.02% 10.50% - --------------------------------------------- Index IB(5) 27.81% -1.23% 10.25% - --------------------------------------------- S&P 500 Index 28.67% -0.57% 11.06% - --------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER JULIET MURPHY, CFA, CPA Investment Officer - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Index HLS Fund, Class IA returned 28.13% for the 12 months ended December 31, 2003. The Fund outperformed the Lipper S&P 500 Index Objective VA-UF Average, which returned 28.01%, over the same period. The Fund underperformed the S&P 500 Index, which returned 28.67% over the same period. WHY DID THE FUND PERFORM THIS WAY? The Fund posted returns of 28.13% in 2003, its first positive return after three years of double-digit negative returns. The Fund led the benchmark by 2 basis points, the result of a cash receipt to settle a class action suit, which was not included in the benchmark. Only three months posted negative returns in 2003 -- January, February, and September. In the beginning of the year, the market reacted strongly to any news out of the Middle East. The threat of a war with Iraq was very real, and days of new releases regarding Iraq and weapons inspections were the days that suffered the greatest losses. We recovered a bit in March, with a slight positive return, and from there on, it was smooth sailing for the year. Volatility declined throughout the year, and market movements were mostly results of geopolitical and economic news, though the market was much less sensitive to such news than it had been during the first few months of the year. April and May were very strong, with positive news out of Iraq, which is to say that U.S. casualties were lower than expected and it seemed that we were making progress. The next three months were slower, as the number of casualties climbed, and we weren't seeing the progress we had seen during the first few months of the war. Add to this the plunging dollar and continued employment weakness, and it would make sense that the market would take a breather for a few months. The month of September was disappointing, with news of mutual fund scandals and poor economic numbers; we saw the negative returns for the first time in seven months. October was strong, though, with improvements in the employment situation and strong earnings. We finished the year on a high note, with the market closing at over 1100 on 12/29 -- the first time it closed over this level since May 2002. During 2002, dips in the market had been viewed as investors running for cover. In 2003, however, such dips were viewed more as opportunities to buy, and it seemed that even the bad news didn't keep investors disinterested for long. After the unprecedented bull market of the late 1990s, and the following three-year decline, it seemed that investors were ready to get involved again. Mutual fund inflows have increased over the last several months, but they are nowhere near the levels they were in the late 1990s. We believe they will continue to increase as the employment situation improves. WHAT IS YOUR OUTLOOK AND STRATEGY? Looking ahead, we have a tough act to follow, after the gains in the last year. Although the late 1990s posted back-to-back gains, we considered that period to be an aberration. The likelihood of another strong year in stocks is low, especially after reviewing the stock market over the past 100 years. As we know, historical data can't be used to predict the future, but it is food for thought. Another concern for 2004 is the possibility of downward earnings revisions by analysts. With the economy gaining strength, analysts have been raising estimates for several quarters, and they appear to be continuing with that trend. Recall the crucial role that earnings estimates and revisions played in 2001 and 2002, as the market was falling. Downward revisions sent the market into a tailspin during that period, and such revisions in 2004 could hit investor psyche especially hard. Another concern is interest rates. It seems likely that investors will start to worry about inflation in the near future, so it isn't unreasonable to assume that the 10-year treasury yields will migrate to the 5%-5.25% range. The declining U.S. dollar could prompt foreign investors to demand higher compensation (higher interest rates) to offset the currency risk, and these increases in yields could put pressure on equity valuations, causing the market to soften. In summary, we believe the first half of 2004 will show gains, but beyond that, there are some factors that could cause the market to pull back during the second half. 20 Hartford International Capital Appreciation HLS Fund inception 4/30/2001 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 4/30/01 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> INTERNATIONAL CAPITAL APPRECIATION IA MSCI EAFE INDEX ------------------------------------- --------------- 4/30/01 10000 10000 9406 9655 6/01 8978 9264 8834 9096 8353 8868 7351 7971 7710 8175 8359 8477 12/01 8602 8528 8253 8076 8394 8133 8844 8616 8727 8639 8822 8756 6/02 8407 8411 7654 7582 7563 7566 6678 6756 7229 7120 7823 7443 12/02 7121 7194 7201 6894 7062 6736 6860 6609 7675 7265 8344 7711 6/03 8574 7902 8864 8095 9242 8292 9272 8549 10059 9082 10185 9286 12/03 10755 10011 </Table> <Table> --- INTERNATIONAL CAPITAL APPRECIATION IA --- MSCI EAFE INDEX $10,000 starting value $10,000 starting value $10,755 ending value $10,011 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR SINCE INCEPTION - -------------------------------------------------------------------- International Capital Appreciation IA 51.02% 2.76% - -------------------------------------------------------------------- International Capital Appreciation IB 50.65% 2.53% - -------------------------------------------------------------------- MSCI EAFE Index 39.16% 0.04% - -------------------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER ANDREW S. OFFIT Senior Vice President, Partner - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford International Capital Appreciation HLS Fund, Class IA returned 51.02% for the 12 months ended December 31, 2003. The Fund outperformed both the Lipper International VA-UF Average, which returned 35.41% and the Morgan Stanley Capital International (MSCI) Europe, Australasia, and Far East (EAFE) Index, which returned 39.16% over the same period. WHY DID THE FUND PERFORM THIS WAY? In spite of strong international equity markets characterized by sector rotation swings, the Fund was still able to outperform by continuing to own true growth stocks that had improving fundamentals or favorable prospects. In general, non-U.S. equity markets continued their second quarter rally through the end of the year, returning 39% as measured by the EAFE Index in U.S. dollars. However, a significant component of this return can be attributed to the continued weakening of the U.S. dollar against most major currencies as the EAFE return measured in local currency was only 21%. In U.S. dollar-terms, Emerging Markets and Pacific Basin ex Japan equities were particularly strong, returning 56% and 47%, respectively, while Japan and developed Europe were almost as impressive, rising 36% and 39%, respectively, during the period. Within the MSCI EAFE benchmark, information technology, financials, materials, and industrials were the highest returning sectors. Consumer staples, typically a more defensive sector, were the worst performer, returning 22%. There were several factors that contributed to our outperformance during this period. The Fund significantly benefited from the combination of an overweight position and superior stock selection within information technology. The three largest contributors to absolute returns were all from this sector: Alcatel S.A. (communications, France), the French communications and equipment company; Nortel Networks Corp. (communications, Canada), the Canadian communications and equipment company; and Yahoo Japan, Inc. (software & services, Japan), the Japanese internet and software company. While we do not manage the Fund by country weights but, instead, focus mainly on sector and stock weights, countries and regions played a part in our outperformance for the period. Country allocation, a fall out of our stock selection, proved to be a significant positive to returns. Our significant exposure to Emerging Markets names, which were not held by our index, helped us outperform the index. Only slightly offsetting the Fund's strong results was our underweight position within financials, which performed well during the year. The names that were the greatest detractors during the period included Japanese specialty retailer, Fast Retailing, Inc. (retail, Japan), UK commercial services firm, Capita Group PLC (business services, United Kingdom), and Swiss capital goods firm, ABB Ltd. (machinery, Switzerland). Capita Group PLC and ABB Ltd. were sold from the fund, while we continue to believe in the Fast Retailing, Inc. investment thesis. WHAT IS YOUR OUTLOOK AND STRATEGY? Our outlook remains positive and we continue to be positioned for economic growth. We are focused on companies that have improving prospects or better-than-expected fundamentals. For many of the companies we follow, time is on their side. With each passing quarter, business conditions slowly improve and comparisons get easier. 21 Hartford International Opportunities HLS Fund inception 7/2/1990 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 12/31/93 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> INTERNATIONAL OPPORTUNITIES MSCI AC WORLD FREE EX US IA INDEX --------------------------- ------------------------ 12/31/93 10000 10000 10395 10822 10033 10740 9576 10249 9795 10597 9837 10600 9772 10675 10016 10849 10394 11214 10040 10936 10314 11230 9850 10688 12/94 9806 10663 9426 10180 9376 10124 9776 10696 10040 11113 10175 11064 10170 10911 10725 11530 10501 11131 10602 11321 10585 11018 10822 11277 12/95 11172 11723 11457 11884 11552 11884 11721 12106 12158 12473 12056 12286 12049 12348 11626 11938 11707 12008 11894 12306 11884 12182 12484 12652 12/96 12617 12506 12490 12276 12543 12501 12555 12475 12477 12580 13295 13357 13913 14094 14324 14380 13271 13249 13994 13965 12935 12776 12731 12616 12/97 12660 12761 12807 13143 13673 14020 14324 14505 14654 14608 14753 14344 14778 14290 14934 14425 12757 12391 12268 12129 13167 13400 13932 14120 12/98 14326 14606 14739 14591 14385 14264 15205 14953 15786 15701 15132 14963 15873 15651 16280 16018 16304 16073 16401 16182 16950 16785 17921 17456 12/99 20035 19121 18910 18083 20283 18572 20098 19270 18990 18195 18193 17729 18902 18484 18319 17755 18568 17974 17606 16977 16762 16438 16005 15700 12/00 16609 16236 16708 16480 15369 15175 14278 14102 15346 15062 14751 14646 14282 14084 13969 13771 13581 13429 12149 12004 12472 12340 13214 12905 12/01 13498 13071 12893 12511 12932 12601 13652 13338 13590 13372 13755 13518 13152 12934 11815 11673 11679 11674 10297 10436 11061 10996 11580 11525 12/02 11077 11153 10591 10761 10285 10543 10075 10338 11001 11335 11634 12057 11823 12390 12167 12720 12615 13099 12721 13466 13482 14339 13760 14651 12/03 14744 15770 </Table> <Table> --- INTERNATIONAL OPPORTUNITIES IA --- MSCI AC WORLD FREE EX US INDEX $10,000 starting value $10,000 starting value $14,744 ending value $15,770 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR 10 YEAR - -------------------------------------------------------------- International Opportunities IA 33.10% 0.58% 3.96% - -------------------------------------------------------------- International Opportunities IB(4) 32.76% 0.37% 3.73% - -------------------------------------------------------------- MSCI AC World Free ex US Index 41.40% 1.54% 4.66% - -------------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER TROND SKRAMSTAD Senior Vice President, Partner, Director of International Equities - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford International Opportunities HLS Fund, Class IA returned 33.10% for the 12 months ended December 31, 2003. The Fund underperformed both the Lipper International VA-UF Average, which returned 35.41% and the Morgan Stanley Capital International (MSCI) All-Country World Free ex US Index, which returned 41.40% over the same period. WHY DID THE FUND PERFORM THIS WAY? The global recovery is here. International equity markets climbed strongly over the past twelve months. As measured by the MSCI regional indices, Japan outperformed Pac Basin ex-Japan and Europe in local currency terms during the year. However, in USD terms, MSCI Pac Basin ex-Japan strongly outperformed both Europe and Japan, helped by the appreciation of the Australian currency versus the dollar. The Fund's underperformance versus the Index can be linked to three main drivers. First, our holdings within the consumer discretionary and telecommunications services sectors, while recording strong double-digit returns for the year, lagged the returns of those sectors in the Index. Second, our overweight allocation to the defensive health care sector detracted from relative returns, as the market reflected a more risk-seeking environment benefiting more economically or financially levered cyclicals. The third factor was that the average cap size of our holdings was higher than that of the index, which hurt our relative performance as small and mid cap securities dramatically outpaced larger caps. During the year, the Fund recorded strong absolute returns. Financials sector holdings were a primary driver of Fund returns, led by significant contributor National Bank of Canada (banks). Information technology sector holdings also contributed strongly to Fund returns. After a prolonged slump, global semiconductor sales have improved markedly thanks to higher average selling prices and increased demand from wireless handsets. Consequently, top contributing stocks within the sector included ASML Holding N.V. (machinery) and Nokia Corp. (communications). The top contributor to Fund returns overall was Vodafone Group PLC (communications). WHAT IS YOUR OUTLOOK AND STRATEGY? While equity markets have priced in significant economic growth already, we believe that conditions are ripe for expansion to continue into the first half of 2004, with the growth picture continuing to be bolstered by the massive fiscal and monetary stimulus enacted by governments and central banks around the globe over the last several years. China has positively impacted the world's economic growth this year, helping drive global demand for both raw materials and capital goods. The rest of Asia ex-Japan finds itself at the end of a multi-year adjustment process and is poised to move ahead once again, as the region no longer relies upon the U.S. as its main growth driver. Instead, the Asian consumer is becoming an increasingly important engine of growth. The Japanese recovery appears to be legitimate as corporations have lowered their debt and overcapacity and can now focus on product leadership. We have sold several of our defensive holdings and shifted into companies with greater operational gearing. Europe lagged but is expected to make up ground in 2004. The economic impact of the appreciating euro has adversely slowed growth, but monetary and fiscal stimulus should help drive a cyclical economic upturn. As we move forward into 2004, we are likely to take profits in some of the more economically or financially levered cyclicals that have already performed well. On the other hand, we would look to add those stocks that have either lagged or have not discounted a recovery in earnings to more normal levels. 22 Hartford International Small Company HLS Fund inception 4/30/2001 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 4/30/01 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> ADVISERS IA S&P 500 INDEX ----------- ------------- 4/30/01 10000 10000 10356 10051 6/01 9781 9730 9610 9365 9631 9388 8374 8233 8926 8554 9559 8875 12/01 9402 8758 9241 8585 9229 8792 9643 9305 10043 9565 10328 9980 6/02 10222 9671 9621 9000 9384 8917 8412 8188 8487 8117 8750 8408 12/02 8924 8345 8673 8223 8635 8207 8611 8157 9629 8834 10403 9576 6/03 10562 10030 11039 10357 11564 11015 12315 11642 13064 12443 13114 12432 12/03 13719 13194 </Table> <Table> --- INTERNATIONAL SMALL COMPANY IA --- CITIGROUP BROAD MARKET $10,000 starting value G$2B EURO-PACIFIC INDEX $13,719 ending value $10,000 starting value $13,194 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR SINCE INCEPTION - ------------------------------------------------------------- International Small Company IA 53.73% 12.57% - ------------------------------------------------------------- International Small Company IB 53.35% 12.32% - ------------------------------------------------------------- Citigroup Broad Market G$2b Euro-Pacific Index 58.10% 10.93% - ------------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER EDWARD L. MAKIN Vice President - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford International Small Company HLS Fund, Class IA returned 53.73% for the 12 months ended December 31, 2003. The Fund outperformed the Lipper International VA-UF Average, which returned 35.41% over the same period. The Fund underperformed the Citigroup Broad Market Less Than $2 billion Euro-Pacific Index, which returned 58.10% over the same period. WHY DID THE FUND PERFORM THIS WAY? The year 2003 was a strong year of recovery in the equity markets worldwide. Liquidity has increased significantly as investors have returned to the equity markets in search of better returns, given historically low yields on bonds and cash. The corporate sector has been reporting profits in line with or ahead of market expectations. In general, 2003 was a great year for the smallest-cap ranges in the market, and the higher-beta stocks saw the strongest recovery, albeit from oversold levels. Relative to its benchmark, performance for the Fund was impacted by relatively weak stock selection within health care, consumer staples and telecommunications services sectors. This was partially offset by relatively strong stock selection within the information technology, consumer discretionary and financials sectors. From a country-specific standpoint, the Fund's strong stock selection in the United Kingdom, Finland, and Germany offset weaker security selection in Japan. The broad-based recovery in the Japanese market occurred without regard to balance sheet quality and the competitive positioning of companies. Conversely, within the Fund, we stuck to our quality criteria. The industrials and consumer discretionary sectors had the greatest impact on the Fund's strong absolute returns. Within the consumer discretionary sector, the media industry in particular was a strong driver. During the period, we took profits on a number of media names that enjoyed a good bounce but we still maintain a large exposure to this area. For the overall Fund, the top three contributing stocks to performance were TPI Corp. (communications, U.S.), and commercial banks Koram (banks, Korea) and Banco Popolare di Milano (banks, Italy). We did not hold Koram at the end of the period. The three biggest detractors from Fund returns were our holdings in Netherlands-based food company Koninklijke Numico N.V. (food, beverage & tobacco, Netherlands); Japanese health care provider BML, Inc. (research & testing facilities, Japan); and Logica PLC (electronics, United Kingdom), an information technology services company located in the United Kingdom. We have eliminated our positions in these three detractors. WHAT IS YOUR OUTLOOK AND STRATEGY? Valuations are reasonable (though not as low as they were in March) and the macro outlook is benign. While some sectors such as technology and commodities appear to be fully valued, as do some markets such as Hong Kong, Australia, and the UK, we continue to find attractive ideas elsewhere in the global markets. Going forward, considerable uncertainty remains as to the long-term impact of currency movements on the real global economy and the role in international trade. Europe appears likely to continue to lag, but already we see some signs that the economy outside of manufacturing is expanding and the manufacturing sector is expected to follow soon. Japan seems close to completing the downsizing, post-bubble write-downs and restructurings it needs to re-enter global markets as a long-term contender. Following exceptional weakness in the U.S. dollar relative to other trading partners over the last two to three years, we started a currency hedging strategy forward twelve months at the end of December. In terms of sectors, we continue to have a large overweight bet in health care, as we believe this group will show continued above-market growth. In addition, we are overweight consumer staples and consumer discretionary and underweight investment technology and industrials. Regionally, we retain a neutral position relative to the benchmark, inline with our long-term goal. 23 Hartford MidCap HLS Fund inception 7/14/1997 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 7/14/97 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> MIDCAP IA S&P MIDCAP 400 INDEX --------- -------------------- 7/14/97 10000 10000 10337 10465 10248 10453 10952 11053 10517 10573 10936 10730 12/97 11381 11146 11126 10934 12262 11839 12881 12373 13202 12598 12728 12032 13389 12108 13183 11639 10612 9474 11227 10358 12180 11283 12953 11846 12/98 14406 13276 14746 12759 14103 12092 15300 12430 16516 13409 16690 13468 17874 14190 17362 13888 17133 13412 16759 12998 17736 13661 18731 14378 12/99 21869 15232 21856 14802 25333 15839 26893 17163 25310 16563 23972 16358 26354 16598 26568 16860 29507 18742 29124 18615 28792 17983 25456 16627 12/00 27427 17898 27844 18297 26249 17254 24036 15972 26311 17734 26757 18147 26693 18075 26158 17805 24951 17223 22032 15081 23455 15749 25405 16921 12/01 26435 17794 25983 17703 26157 17724 27610 18991 27277 18903 27441 18584 25748 17224 23072 15553 22947 15632 20977 14372 22090 14995 24190 15863 12/02 22676 15211 22365 14767 22144 14415 22311 14537 24211 15592 26307 16884 26468 17100 26779 17706 28015 18510 27462 18226 29849 19586 30391 20268 12/03 31218 20610 </Table> <Table> --- MIDCAP IA --- S&P MIDCAP 400 INDEX $10,000 starting value $10,000 starting value $31,218 ending value $20,610 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR SINCE INCEPTION - ------------------------------------------------------------ MidCap IA 37.67% 16.73% 19.24% - ------------------------------------------------------------ MidCap IB(5) 37.33% 16.48% 18.98% - ------------------------------------------------------------ S&P MidCap 400 Index 35.62% 9.22% 11.85% - ------------------------------------------------------------ </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER PHILLIP H. PERELMUTER, CFA Senior Vice President, Partner - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford MidCap HLS Fund, Class IA returned 37.67% for the 12 months ended December 31, 2003. The Fund outperformed both the S&P MidCap 400 Index, which returned 35.62%, and the Lipper Mid Cap Core VA-UF Average, which returned 35.05% over the same period. WHY DID THE FUND PERFORM THIS WAY? The U.S. equity market rallied broadly during the period as a global recovery took shape fueled by an accommodative mix of post-war relief, fiscal stimulus, and favorable monetary policy. Following the shape of a classic cyclical rally, small caps outperformed followed by mid-caps and then large-caps. The Fund's outperformance relative to the index can be largely attributed to strong stock selection among financials and telecommunications names combined with generally favorable sector allocation across the portfolio. We did stumble a bit in terms of stock selection within the consumer staples and consumer discretionary sectors as a handful of our holdings reported disappointing earnings, thereby detracting from our index-relative results. The benefits from our low exposure to the three worst performing sectors in the index (consumer staples, energy, and materials) and high health care exposure were only partially offset by our underweight to technology, the best performing sector during the period. In terms of individual companies, Countrywide Credit Industries, Inc. (banks), American Tower Corp., Class A (communications), and Millennium Pharmaceuticals (health services) were the three securities that contributed the most to portfolio performance on an absolute basis. American Tower Corp., Class A was finally able to lay liquidity concerns to rest with the refinancing of their balance sheet while their core operations continued to deliver solid results. Countrywide Credit Industries, Inc. rose as investors began to recognize the value of the company's large servicing portfolio. Millennium Pharmaceuticals benefited from a resurgence of optimism in biotechnology following evidence that new drug approvals from the FDA may be accelerating under new leadership. The securities that detracted the most from performance during the period were Pepsi Bottling Group, Inc. (food, beverage & tobacco), Newell Rubbermaid (consumer durables), and MGM Mirage, Inc. (hotels & gaming). We have sold all three of these positions from the portfolio. WHAT IS YOUR OUTLOOK AND STRATEGY? As of year-end 2003, investor optimism surrounding the economy and the equity markets had started to consolidate. Tax cuts, a weaker dollar, sustained productivity gains, and healthier balance sheets all bode well for corporate profits. As the economy continues to stabilize, we will look for improved corporate spending and employment trends as key gauges to determine the sustainability of the domestic recovery. At this juncture, we believe a sustainable up-trend will in fact unfold and support growth in 2004. 24 Hartford MidCap Value HLS Fund inception 4/30/2001 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 4/30/01 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> MIDCAP VALUE IA RUSSELL 2500 VALUE INDEX --------------- ------------------------ 4/30/01 10000 10000 10092 10307 6/01 10139 10406 9950 10337 9640 10248 8234 9111 8476 9306 9208 10022 12/01 9959 10593 10012 10690 10207 10823 10776 11493 10790 11690 10597 11498 6/02 10032 11092 8968 9809 8972 9862 8014 9055 8404 9184 9100 9854 12/02 8663 9546 8472 9258 8271 9030 8229 9091 9000 9915 9831 10832 6/03 9936 11026 10296 11505 10798 11968 10749 11883 11472 12791 11880 13313 12/03 12413 13836 </Table> <Table> --- MIDCAP VALUE IA --- RUSSELL 2500 VALUE INDEX $10,000 starting value $10,000 starting value $12,413 ending value $13,836 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR SINCE INCEPTION - ------------------------------------------------------- MidCap Value IA 43.29% 8.43% - ------------------------------------------------------- MidCap Value IB 42.93% 8.19% - ------------------------------------------------------- Russell 2500 Value Index 44.93% 12.92% - ------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER JAMES N. MORDY Senior Vice President, Partner - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford MidCap Value HLS Fund, Class IA returned 43.29% for the 12 months ended December 31, 2003. The Fund outperformed the Lipper Mid Cap Value VA-UF Average, which returned 35.83% over the same period. The Fund underperformed the Russell 2500 Value Index, which returned 44.93% over the same period. WHY DID THE FUND PERFORM THIS WAY? The overriding theme in the equity markets over the past twelve months was that investors once again became comfortable owning stocks with inherently greater levels of either business or financial risk. There were many factors behind this, including increased confidence in the economic recovery, improved corporate governance and accounting scrutiny, a narrowing of credit spreads, and a recognition that valuation disparity between "safer" stocks and "riskier" stocks had grown too large during the preceding year. The Fund's performance benefited from this trend as we have never been shy about taking on a manageable degree of business risk with our stocks as long as we feel we are getting more than compensated for it in the prices we pay. During the period, small caps outperformed mid caps, which in turn did better than large caps. As the Fund has a somewhat higher average market cap than the benchmark, this latter trend worked against our relative performance. The Fund's modest underperformance relative to the market benchmark can be largely attributed to weak relative stock selection within the materials and health care sectors. AK Steel Corp. (metals, minerals & mining) and Cambrex Corp. (chemicals) were two materials names that performed poorly. The Fund was also hindered by our overweight to the energy sector, which lagged most other sectors in the benchmark. Offsetting this weakness was exceptional stock picking within the consumer discretionary sector, as Harman International, Inc. (media & entertainment), UnitedGlobalCom, Inc., Class A (business services) and Foot Locker, Inc. (retail) were among our top contributors. Our overweight and strong relative security selection within the technology sector, the best performing area during the year, also boosted our relative performance. Also contributing handsomely to results was our underweight to financials and utilities as these two sectors lagged the index. WHAT IS YOUR OUTLOOK AND STRATEGY? The Fund is positioned to benefit from the improved manufacturing environment with our overweights in materials and industrials. We have reduced our exposure to technology and consumer discretionary, where valuations have become stretched in our judgment. In addition, we believe that the declining dollar and the lengthening economic recovery are both trends which favor outperformance by large caps in 2004, thus we could see our market cap bias begin to work in our favor going forward. Given the broad advance of stocks in 2003, it is more challenging to identify significantly overlooked pockets of value within the market, though we do continue to find selective opportunities in stocks that are either misunderstood or whose turnaround prospects are not appreciated. We have stuck to our value discipline, which is to invest in stocks with reasonable growth prospects that sell at significant discounts. 25 Hartford Mortgage Securities HLS Fund inception 1/1/1985 (subadvised by Hartford Investment Management Company) PERFORMANCE OVERVIEW 12/31/93 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> LEHMAN MORTGAGE BACKED MORTGAGE SECURITIES IA SECURITIES INDEX ---------------------- ---------------------- 12/31/93 10000 10000 10062 10099 9991 10029 9787 9768 9757 9696 9771 9734 9729 9713 9903 9907 9917 9939 9820 9797 9801 9792 9754 9761 12/94 9839 9839 10037 10049 10270 10306 10327 10354 10456 10502 10799 10833 10867 10895 10862 10913 10973 11026 11060 11123 11174 11222 11298 11350 12/95 11430 11492 11511 11579 11415 11483 11363 11441 11331 11409 11293 11375 11431 11532 11469 11574 11484 11574 11665 11768 11892 11999 12069 12171 12/96 12009 12107 12085 12197 12115 12238 12012 12122 12198 12316 12306 12436 12440 12581 12678 12818 12649 12788 12805 12950 12943 13094 12977 13136 12/97 13092 13256 13222 13388 13240 13416 13291 13473 13365 13550 13468 13640 13530 13705 13602 13774 13740 13899 13887 14067 13855 14049 13921 14119 12/98 13971 14179 14057 14280 14012 14223 14100 14319 14161 14385 14064 14304 14002 14254 13931 14157 13944 14157 14149 14387 14202 14469 14217 14477 12/99 14183 14442 14090 14317 14229 14483 14367 14641 14373 14651 14395 14658 14659 14971 14746 15067 14948 15296 15089 15454 15176 15565 15424 15799 12/00 15642 16054 15861 16304 15956 16397 16051 16492 16045 16515 16120 16625 16147 16660 16431 16956 16552 17106 16765 17362 16985 17602 16869 17439 12/01 16814 17373 16954 17534 17108 17734 16943 17546 17244 17878 17356 18008 17473 18157 17686 18364 17839 18509 17995 18640 18017 18711 18018 18698 12/02 18185 18893 18255 18939 18355 19066 18344 19068 18413 19147 18454 19163 18459 19193 18082 18834 18204 18968 18465 19290 18415 19223 18467 19263 12/03 18602 19469 </Table> <Table> --- MORTGAGE SECURITIES IA --- LEHMAN MORTGAGE BACKED SECURITIES INDEX $10,000 starting value $10,000 starting value $18,602 ending value $19,469 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR 10 YEAR - ------------------------------------------------------ Mortgage Securities IA 2.29% 5.89% 6.40% - ------------------------------------------------------ Mortgage Securities IB(5) 2.03% 5.64% 6.15% - ------------------------------------------------------ Lehman Mortgage Backed Securities Index 3.05% 6.55% 6.89% - ------------------------------------------------------ </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGEMENT TEAM PETER PERROTTI Senior Vice President RUSSELL REGENAUER Vice President - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Mortgage Securities HLS Fund, Class IA returned 2.29% for the 12 months ended December 31, 2003. The Fund outperformed the Lipper U.S. Mortgage VA-UF Average, which returned 2.14% over the same period. The Fund underperformed the Lehman Brothers Mortgage-Backed Securities Index, which returned 3.05% over the same period. WHY DID THE FUND PERFORM THIS WAY? For most of the year, the Fund's performance suffered as mortgage-backed securities experienced significant interest rate sensitivity. As the economic recovery appeared to be taking hold at the beginning of the third quarter, treasury rates started to move upward, which slowed the pace of refinancing. The slowdown in principal flow to bondholders caused mortgage-backed securities to become more price sensitive to changes in interest rates. This occurred just as rates were beginning to rise, forcing large mortgage investors to sell securities and putting more pressure on rates, causing them to rise even further. Even though refinancing slowed and yields of mortgage-backed securities increased, the increased price sensitivity resulted in mortgages under performing. The Fund was overweight in lower coupon mortgages all year. For the second half of the year, 30 year mortgages dominated. At the same time, we began increasing the Fund's exposure to floating rate asset-backed securities and commercial mortgage-backed securities to balance the duration of these securities. This combination helped to mitigate the overall prepayment risk of the Fund, while taking advantage of the higher yields available in the mortgage-backed securities market. During the last quarter of the year, however, any diversification away from the mortgage sector put a drag on the Fund's return due to the strong performance of the mortgage index. The Lehman Brothers Mortgage Index outperformed comparable duration treasuries by over three-quarters of 1% in the last quarter of the year. For the year as a whole, however, the Index performed in line with comparable duration treasuries. The Mortgage Bankers Association Refinancing Index continued to drop, pointing to prepayments slowing further. Investor demand, especially from banks, was robust to take advantage of the improving yields and cheap financing due to low short-term rates. WHAT IS YOUR OUTLOOK AND STRATEGY? During the final quarter of 2003, economic data continued to signal a stronger economy. The employment picture continued to improve as Initial Jobless Claims trended lower. The manufacturing side showed significant strength as the Institute for Supply Management Index hit the highest level in 20 years. Corporations also showed a significant upturn in profits, and the equity markets ended with a strong fourth quarter to post the first positive return in 4 years. Inflation remains very subdued with both capacity utilization and the unemployment rate at levels indicating still a large amount of slack in the economy. Although the job market remains much softer than most would like, there is a good economic base building. With inventory levels low and business spending starting to pickup, there is growing pressure to start hiring. However, with continued low headline inflation and short rates being held at their level, it is unlikely that rates will rise materially in the near term. The mortgage market is fully priced for the current environment. If rates remain range bound, however, the extra yield provided by the sector will continue to generate excess performance. The Fund will maintain its holdings in asset-backed securities and commercial mortgage-backed securities, which offer good total return potential. 26 Hartford Small Company HLS Fund inception 8/9/1996 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 8/9/96 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> SMALL COMPANY IA RUSSELL 2000 GROWTH INDEX ---------------- ------------------------- 8/9/96 10000 10000 10235 10231 10824 10758 10489 10294 10748 10580 12/96 10715 10786 10746 11056 10551 10388 9995 9655 10088 9543 11180 10978 11837 11350 12344 11931 12618 12290 13849 13270 13000 12473 12776 12176 12/97 12684 12183 12278 12020 13679 13081 14252 13630 14393 13714 13644 12717 12/98 13812 12847 13320 11774 10141 9056 11089 9975 11903 10495 12687 11309 14158 12332 14855 12887 13262 11708 14418 12125 15618 13196 15939 13217 17278 13913 17252 13483 16888 12979 17273 13229 17855 13568 19799 15002 12/99 23479 17647 22718 17482 26757 21550 26280 19285 23954 17338 21282 15820 24332 17863 22311 16332 24101 18050 23057 17153 21645 15761 18988 12899 12/00 20398 13689 19545 14797 17404 12768 15919 11608 18101 13029 17880 13330 18168 13694 17203 12526 16487 11743 13882 9849 15019 10796 16466 11697 17355 12425 12/01 17078 11983 16291 11208 17512 12182 17082 11918 16417 11222 15303 10270 12822 8691 12568 8687 12055 8060 12494 8468 13268 9307 12/02 12109 8665 11795 8429 11581 8204 11986 8328 13251 9116 14712 10143 15179 10339 16255 11120 17061 11718 16466 11421 18004 12408 18517 12812 12/03 18874 12870 </Table> <Table> --- SMALL COMPANY IA --- RUSSELL 2000 GROWTH INDEX $10,000 starting value $10,000 starting value $18,874 ending value $12,870 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR SINCE INCEPTION - ----------------------------------------------------------------- Small Company IA 55.87% 5.92% 8.97% - ----------------------------------------------------------------- Small Company IB(4) 55.48% 5.70% 8.74% - ----------------------------------------------------------------- Russell 2000 Growth Index 48.53% 0.86% 3.47% - ----------------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER STEVEN C. ANGELI, CFA Senior Vice President, Partner - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Small Company HLS Fund, Class IA returned 55.87% for the 12 months ended December 31, 2003. The Fund outperformed both the Russell 2000 Growth Index, which returned 48.53%, and the Lipper Small Cap Core VA-UF Average, which returned 41.42% over the same period. WHY DID THE FUND PERFORM THIS WAY? The year 2003 was marked by a spectacular, if somewhat speculative, small cap growth cycle. Small cap growth stocks "rose from the ashes" to the top of the performance charts. This rise of small cap growth stocks fits well with historic patterns, as the market again anticipated a strong recovery in the economy -- and the resulting dramatic impact on small company fundamentals was swiftly discounted in stock prices. All ten sectors of the Russell 2000 Growth Index posted double-digit positive returns for the period, with telecommunications and technology leading the way. The Fund's strong outperformance was driven primarily by excellent stock selection and to a lesser extent by favorable sector allocation decisions. Security selection was additive in all but two sectors, with telecommunications and consumer discretionary leading the way. Within the technology sector, our strategy of re-allocating funds into companies with more leverage to a semiconductor upturn paid off handsomely as stocks like ASE Test Ltd. (electronics) and Micro Semiconductor (electronics) experienced triple digit appreciation. Unable to find reasonable values amid the speculative tech frenzy, we remained underweight to the sector throughout much of the year, which detracted marginally from our index-relative results. The top contributors to absolute returns were American Tower Corp., Class A (communications), Red Hat, Inc. (software & services), and eResearch Technology, Inc. (software & services). After the carnage of the telecom boom and bust, American Tower Corp., Class A remains a dominant leader that is de-leveraging its balance sheet with free cash flow while still growing its core business. Three significant detractors from returns were NDC Health Corp. (health services), Pinnacle West Capital Corp. (utilities), and AGCO Corp. (machinery). All three have been eliminated from the Fund. WHAT IS YOUR OUTLOOK AND STRATEGY? The recovering U.S. economy is shifting into high gear, as manufacturing activity approaches 20-year highs, consumer spending remains brisk, jobless claims are falling, and overall confidence is strong. Going forward, we foresee a synchronized global rebound, driven by industrial and general business strength, tempered by a peaking consumer. The Fund is positioned to benefit from a recovery in the industrial and general business-to-business sectors of the economy. We remain overweight industrials, telecom and consumer discretionary and underweight financials and technology. Similar to other economic recoveries, small companies are once again leading the way with accelerating fundamentals. 27 Hartford SmallCap Growth HLS Fund inception 5/2/1994 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 5/2/94 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> SMALLCAP GROWTH IA RUSSELL 2000 GROWTH INDEX ------------------ ------------------------- 5/2/94 10000 10000 9563 9777 9133 9356 9123 9489 9495 10186 9683 10230 9884 10340 9639 9921 12/94 9811 10156 9728 9950 10134 10409 10194 10713 10426 10875 10428 11017 11352 11776 12385 12694 12445 12850 12944 13115 12547 12470 12885 13020 12/95 12743 13309 12585 13199 13302 13801 13687 14073 14871 15154 15584 15931 14722 14896 13391 13077 14379 14046 15401 14769 14238 14132 14220 14525 12/96 13718 14808 13566 15178 12032 14261 11092 13255 10770 13101 12590 15071 12960 15582 13671 16380 13351 16872 14238 18218 13617 17124 13588 16715 12/97 13913 16725 13638 16502 15115 17959 16088 18712 16047 18827 15217 17459 15815 17637 14649 16164 11631 12433 12360 13694 13212 14408 14843 15525 12/98 16858 16930 18083 17692 15821 16074 17032 16646 17672 18116 17836 18145 20197 19101 20569 18510 21032 17818 21949 18161 25085 18627 28104 20596 12/99 35277 24226 35819 24001 49549 29585 44718 26475 37442 23802 32117 21718 39523 24523 36612 22422 43826 24780 41345 23549 37598 21637 27070 17709 12/00 29958 18792 30427 20313 24939 17529 22433 15935 24613 17886 24612 18300 25555 18800 23720 17196 22184 16122 18100 13520 19935 14821 22175 16058 12/01 23913 17058 23153 16451 21877 15387 24138 16724 23124 16362 21506 15405 19507 14099 16869 11932 16825 11926 15436 11065 16643 11625 18460 12777 12/02 17018 11895 16467 11572 15732 11263 15937 11433 17412 12515 19454 13926 19962 14194 21323 15267 22797 16087 22817 15680 24544 17035 25173 17590 12/03 25537 17669 </Table> <Table> --- SMALLCAP GROWTH IA --- RUSSELL 2000 GROWTH INDEX $10,000 starting value $10,000 starting value $25,537 ending value $17,669 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR SINCE INCEPTION - ----------------------------------------------------------------- SmallCap Growth IA 50.06% 8.66% 10.18% - ----------------------------------------------------------------- SmallCap Growth IB(3) 49.70% 8.40% 9.91% - ----------------------------------------------------------------- Russell 2000 Growth Index 48.53% 0.86% 6.06% - ----------------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGEMENT TEAM DAVID J. ELLIOTT, CFA Vice President JAMES RULLO, CFA Senior Vice President, Partner - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford SmallCap Growth HLS Fund, Class IA returned 50.06% for the 12 months ended December 31, 2003. The Fund outperformed both the Lipper Small Cap Core VA-UF Average, which returned 41.42%, and the Russell 2000 Growth Index, which returned 48.53% over the same period. WHY DID THE FUND PERFORM THIS WAY? Ascending equity markets have generally reflected increased investor confidence in an economic rebound as indicated by increased consumer confidence and firming consumer spending, growing manufacturing output and productivity gains, and accommodating interest rate and tax policies. Small cap stocks benefited the most from this cyclical rally outpacing larger cap names. Within the Russell 2000 Growth Index, the rally was broad based as all ten sectors posted positive returns. Information technology and telecommunication services were the top performing sectors, as they were beneficiaries of investors' appetite for greater risk. The Fund's investment approach is to focus on stock selection rather than attempting to make top-down decisions to underweight or overweight sectors. The Fund's stock selection was strongest in the information technology and industrials sectors. On a relative basis, our weakest results were in the health care and consumer discretionary sectors. For the twelve-month period, the greatest contributors to absolute Fund returns were UnitedGlobalCom, Inc. (business services), Ciphergen Biosystems, Inc. (research & testing facilities), and Dendrite International, Inc. (health services). The largest detractors from absolute Fund returns were Investment Technology Group (financial services), Too, Inc. (retail), and Clarke, Inc. (insurance). WHAT IS YOUR OUTLOOK AND STRATEGY? In the current environment of accelerating growth, productivity is surging and remains well above the rate of the 1990s. This implies better corporate profits, higher investments, and ultimately job creation. We believe the consumption environment will be sound in 2004, bolstered by more jobs, tax cuts, and an improving net worth position of households. Furthermore, the outlook for capital spending is solid and will likely emerge as a new driver of growth. In this environment, we will continue to build a diversified portfolio by focusing on bottom-up stock selection. 28 Hartford Stock HLS Fund inception 8/31/1977 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 12/31/93 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> STOCK IA S&P 500 INDEX -------- ------------- 12/31/93 10000 10000 10260 10340 10130 10059 9630 9621 9673 9745 9808 9904 9550 9662 9866 9979 10230 10387 9957 10133 10023 10361 9651 9984 12/94 9811 10131 9968 10394 10424 10799 10742 11117 10943 11444 11315 11901 11603 12177 11992 12580 12036 12610 12572 13142 12331 13094 12993 13670 12/95 13156 13933 13554 14407 13779 14541 13953 14681 14183 14897 14600 15279 14712 15337 14212 14660 14419 14969 15221 15810 15546 16246 16752 17473 12/96 16361 17127 17391 18196 17477 18340 16878 17588 17857 18636 18930 19769 19970 20655 21419 22297 20059 21048 21119 22199 20430 21458 21317 22451 12/97 21495 22838 21763 23089 23414 24753 24725 26021 25274 26284 24842 25832 26086 26880 26333 26595 22478 22749 23483 24208 25600 26175 27178 27761 12/98 28690 29361 29570 30588 28907 29638 30215 30823 31469 32017 30489 31262 32436 32997 31510 31966 31127 31807 30342 30935 31996 32892 32457 33561 12/99 34366 35538 32504 33752 31986 33114 35292 36351 34245 35258 33629 34534 34033 35386 33369 34833 35017 36995 33450 35043 33642 34894 31607 32145 12/00 31945 32303 32799 33448 30501 30400 28413 28475 30505 30685 30759 30891 29439 30140 29103 29843 27091 27977 25204 25719 25817 26210 27832 28220 12/01 28038 28468 27348 28053 26958 27512 27938 28547 25535 26817 25172 26620 23395 24725 21945 22799 21763 22947 19348 20455 21104 22253 22695 23561 12/02 21239 22178 20685 21599 20277 21275 20361 21481 21921 23249 22997 24473 23340 24786 23929 25223 24244 25714 23855 25442 25119 26879 25354 27115 12/03 26862 28536 </Table> <Table> --- STOCK IA --- S&P 500 INDEX $10,000 starting value $10,000 starting value $26,862 ending value $28,536 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR 10 YEAR - --------------------------------------------- Stock IA 26.47% -1.31% 10.39% - --------------------------------------------- Stock IB(4) 26.16% -1.51% 10.14% - --------------------------------------------- S&P 500 Index 28.67% -0.57% 11.06% - --------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER RAND L. ALEXANDER, CFA Senior Vice President, Partner - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Stock HLS Fund, Class IA returned 26.47% for the 12 months ended December 31, 2003. The Fund outperformed the Lipper Large Cap Core VA-UF Average, which returned 26.43% over the same period. The Fund underperformed the S&P 500 Index, which returned 28.67% over the same period. WHY DID THE FUND PERFORM THIS WAY? The Fund generated strong absolute returns in 2003 as the equity markets rebounded after three years of negative returns. Low interest rates, tax cuts, a stabilizing employment picture, and a weakening dollar provided a boost to the US economy, and in turn, investor confidence. All ten sectors of the S&P 500 Index had positive returns for the year. While the recovery was broad-based by industry, there was a notable divergence in the performance of companies depending on their market capitalization. Investors had a sharp change in risk perception and chased the stocks of the companies that had the most financial and operating leverage. In this environment, there was nearly an inverse relationship between company size and returns; smallest stocks performed the best and mega-cap stocks performed the worst. The Fund generated strong returns through positive sector allocation decisions and solid performance from some individual holdings. We maintained overweight positions in information technology and materials, the two strongest areas of the market during 2003. We also remained underweight telecommunication services, which was the poorest performing sector, as the industry continues to work through capacity issues. Strong absolute contributors during the year included Citigroup, Inc. (banks), Intel Corp. (electronics), and Cisco Systems, Inc. (computers & office equipment). Citigroup, Inc. has executed well, controlled costs and is leveraged to an improvement in capital market activity. Intel Corp. benefited from a strong semiconductor cycle in 2003 as they continually beat earnings expectations. Cisco Systems, Inc. rose sharply during the year driven by a rebound in technology spending and new product introductions. In terms of relative performance, the Fund underperformed the benchmark because of two factors related to stock selection. First, we have a large-cap, high quality bias and did not benefit from the strong performance of the smaller cap, speculative parts of the market, especially in the information technology and telecommunication services. Second, we owned some specific stocks that were poor performers, such as Schering-Plough Corp. (drugs), Baxter International, Inc. (medical instruments & supplies), and Safeway, Inc. (consumer non-durables). Schering-Plough Corp. was weak due to the conversion of the Claritin franchise to the over-the-counter market and competition in other key drugs. Safeway, Inc. struggled as a result of the weak economy as well as competitive pressures from Wal-Mart Stores. Baxter International, Inc. had weak earnings due to pricing and competitive issues in their biosciences business. These stocks are no longer held in the Fund. WHAT IS THE OUTLOOK AND STRATEGY? We have a positive outlook for 2004. Tax cuts, a weaker dollar, sustained productivity, and healthier balance sheets all bode well for corporate profits. The consumer has driven the economic recovery so far; however, we will look for improved corporate spending and employment trends as key gauges to determine the sustainability of the domestic recovery. At this juncture, we believe a sustainable up-trend will in fact unfold over the next several months and support growth in 2004. The portfolio is positioned with a cyclical bias with the largest overweights in capital goods, media, materials, and technology hardware. We believe the environment bodes well for large-cap, multi-national, industry leading companies. 29 Hartford U.S. Government Securities HLS Fund inception 3/24/1987 (subadvised by Hartford Investment Management Company) PERFORMANCE OVERVIEW 12/31/93 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> U.S. GOVERNMENT SECURITIES LEHMAN INTERMEDIATE GOV'T IA BOND INDEX -------------------------- ------------------------- 12/31/93 10000 10000 10108 10099 9875 9961 9545 9815 9369 9751 9346 9758 9300 9760 9485 9888 9481 9917 9317 9834 9288 9836 9276 9793 12/94 9356 9825 9559 9986 9771 10178 9834 10234 9962 10353 10327 10645 10410 10713 10354 10718 10498 10806 10602 10879 10770 10998 10939 11133 12/95 11114 11243 11174 11337 10894 11217 10813 11165 10731 11133 10716 11128 10864 11241 10888 11276 10850 11288 11044 11434 11275 11621 11473 11762 12/96 11359 11699 11398 11743 11417 11762 11285 11695 11459 11827 11555 11919 11690 12022 11985 12243 11887 12196 12064 12329 12222 12473 12257 12501 12/97 12391 12602 12564 12766 12540 12752 12586 12791 12636 12853 12767 12942 12890 13028 12902 13078 13176 13325 13482 13635 13411 13659 13460 13616 12/98 13490 13669 13548 13731 13275 13543 13347 13632 13390 13669 13252 13586 13200 13606 13153 13607 13139 13626 13300 13744 13318 13771 13304 13781 12/99 13229 13738 13172 13691 13309 13805 13474 13962 13449 13957 13454 13994 13705 14217 13812 14311 14022 14471 14140 14597 14246 14698 14502 14914 12/00 14792 15176 14964 15378 15113 15519 15183 15631 15100 15581 15157 15645 15186 15695 15503 15989 15663 16131 15951 16476 16214 16733 15985 16534 12/01 15901 16455 16007 16525 16188 16663 15981 16411 16284 16718 16423 16835 16568 17045 16884 17366 17125 17564 17436 17866 17392 17853 17282 17712 12/02 17607 18040 17622 18000 17842 18204 17827 18207 17909 18259 18166 18545 18144 18515 17541 18065 17611 18098 17943 18490 17825 18309 17848 18311 12/03 17985 18453 </Table> <Table> --- U.S. GOVERNMENT SECURITIES IA --- LEHMAN INTERMEDIATE GOV'T BOND INDEX $10,000 starting value $10,000 starting value $17,985 ending value $18,453 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR 10 YEAR - -------------------------------------------------------------- U.S. Government Securities IA 2.15% 5.92% 6.05% - -------------------------------------------------------------- U.S. Government Securities IB(3) 1.89% 5.66% 5.78% - -------------------------------------------------------------- Lehman Intermediate Gov't Bond Index 2.29% 6.19% 6.32% - -------------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER PETER PERROTTI Senior Vice President - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford U.S. Government Securities HLS Fund, Class IA returned 2.15% for the 12 months ended December 31, 2003. The Fund underperformed both the Lehman Brothers Intermediate Government Bond Index, which returned 2.29% and the Lipper General U.S. Government VA-UF Average, which returned 2.32% over the same period. WHY DID THE FUND PERFORM THIS WAY? The Fund benefited from Agency exposure and from being overweight to mortgages with lower coupons throughout the year. Early this year, refinancing activity hit an all time high as the mortgage market experienced the aftershock of a multi-decade low in rates, and homeowners took advantage of the drop in mortgage rates. During the second and third quarters of the year, the market witnessed significant volatility in interest rates. The mortgage market under performed comparable duration treasuries and the rise in rates slowed the pace of refinancing significantly. As rates crept back up through the quarter, the price sensitivity of the mortgage market increased significantly. Although the rise in rates slowed the rate of prepayment, the sector came under pressure as many investors sold mortgages to rebalance the price sensitivity of their portfolios. During the last quarter of the year, however, the continued drop in refinancing activity and low volatility in the movement in rates, mortgages outperformed comparable duration treasuries by almost three-quarters of 1%. With economic data showing both strong growth and low inflation, the treasury market remained range bound. The environment was very positive for spread products, as both agencies and mortgages outpaced comparable duration treasuries. WHAT IS YOUR OUTLOOK AND STRATEGY? The economy continued to improve as the fourth quarter played out. After a very strong third quarter with Gross Domestic Product growing at 8.2%, many market participants were looking for a let down in fourth quarter data. Although the growth was expected to be less than seen in the prior quarter, economic data surprised to the upside. The Institute for Supply Management Index rose to the highest level in 20 years, pointing to a pickup in the manufacturing sector. Employment also showed signs of picking up, as initial jobless claims fell to the lowest level in almost two years. Inflation continued to trend lower as the Consumer Price Index, excluding the volatile food and energy components, showed a 1.1% increase, the lowest level in thirty-seven years. The official statement from the Federal Open Market Committee said the risks to growth and inflation were balanced, but continued to reiterate that the short-term rates will remain low for a "considerable period." Although the Fed continues to comment on the excess slack in the economy, the trend is toward stronger growth. The Federal Funds Target Rate at 1% anchors short-term rates, and although the curve may steepen further, it is unlikely that longer rates will move substantially higher. With a low volatility rate environment, mortgages and other spread products will likely continue to outpace treasuries. While the mortgage market is fully priced, it continues to offer good diversification and total return potential within the overall government market. Prepayments continue to slow, increasing the overall yield of the mortgage market. The Fund will continue to maintain a significant holding in this sector. Also, the steep yield curve continues to offer excellent opportunities, but the Fund will remain with the bias to reduce price sensitivity to rising rates. 30 Hartford Value HLS Fund inception 4/30/2001 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 4/30/01 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> VALUE IA RUSSELL 1000 VALUE INDEX -------- ------------------------ 4/30/01 10000 10000 10116 10225 6/01 10070 9998 10103 9977 9795 9577 9140 8903 9130 8826 9720 9339 12/01 10006 9559 9831 9486 9806 9501 10026 9950 9559 9609 9597 9657 6/02 9030 9103 8298 8256 8144 8319 7253 7394 7807 7942 8246 8442 12/02 7741 8076 7473 7881 7365 7670 7406 7683 8024 8359 8552 8899 6/03 8630 9010 8708 9144 8885 9286 8742 9196 9267 9759 9416 9891 12/03 9955 10501 </Table> <Table> --- VALUE IA --- RUSSELL 1000 VALUE INDEX $10,000 starting value $10,000 starting value $9,955 ending value $10,501 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR SINCE INCEPTION - ------------------------------------------------------- Value IA 28.60% -0.17% - ------------------------------------------------------- Value IB 28.28% -0.39% - ------------------------------------------------------- Russell 1000 Value Index 30.02% 1.85% - ------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER JOHN R. RYAN, CFA Senior Vice President, Managing Partner - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Value HLS Fund, Class IA returned 28.60% for the 12 months ended December 31, 2003. The Fund outperformed the Lipper Large Cap Value VA-UF Average, which returned 28.50% over the same period. The Fund underperformed the Russell 1000 Value Index, which returned 30.02% over the same period. WHY DID THE FUND PERFORM THIS WAY? For the full year, large-cap growth and value performed similarly, both up approximately 30%. The year 2003 marked the fifth consecutive year of small cap outperformance, following five years of large cap outperformance from 1994-1998. All ten sectors of the Russell 1000 Value Index posted positive gains, with information technology, financials and consumer discretionary leading the way. Our index-relative performance during this period was impacted by positive overall security selection and to a lesser extent unfavorable sector allocation. Positive contributions were led by strong stock picks within health care and industrials. Additionally, the combination of our overweight position and strong stock selection in technology boosted performance. The top three contributors to performance during the period were Citigroup Corp. (banks), Intel Corp. (electronics), and Comcast Corp. (media & entertainment). Citigroup, Inc. has executed well, controlled costs and is leveraged to improving global capital markets. Intel Corp. shares appreciated dramatically following a series of positive announcements regarding improved gross margins and outlook. Comcast Corp. has executed its merger plans for the acquired AT&T Corp. (communications) properties well and is on track to bring the old AT&T Corp. margins up to the levels of the old Comcast Corp. systems. Tempering our successes were poor stock selection within financials, primarily among insurance companies, and an overweight position combined with poor stock selection in telecommunications. The three greatest detractors from returns were Stanley Works (The) (consumer durables), SBC Communications, Inc. (communications), and Verizon Communications, Inc. (communications). SBC Communications, Inc. reported disappointing results as their margins were impacted by pension and health care costs as well as increased spending in DSL and long distance. Having said that, SBC Communications, Inc. is making progress in their DSL business line. As of the end of the period, we eliminated Stanley Works (The) and trimmed SBC Communications, Inc. and Verizon Communications, Inc. as we remain confident in the telecommunications recovery but are disappointed by results thus far. WHAT IS YOUR OUTLOOK AND STRATEGY? As we approach the end of 2003, the economy's recovery rate is accelerating and the bear market of 2000-2002 is becoming a distant memory for many investors. Given that we are two years into an economic expansion and more than one year into a profit recovery, it is well past time that the equity market regains its footing as an anticipatory mechanism rather than a lagging indicator. The global stock market recovery is making up for last year as well as anticipating good news next year. While the market move could be classified as explosive, it should be considered partly compensatory. We expect a return to more normalized progress over the next year. 31 Hartford Value Opportunities HLS Fund inception 5/1/1996 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 5/1/96 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> VALUE OPPORTUNITIES IA RUSSELL 3000 VALUE INDEX ---------------------- ------------------------ 5/1/96 10000 10000 10129 10137 10153 10133 9670 9734 10014 10027 10479 10412 10544 10785 11114 11547 12/96 11149 11452 11532 11968 11682 12137 11265 11712 11663 12172 12334 12880 12654 13443 13334 14410 12878 13968 13492 14820 13122 14407 13693 14996 12/97 13962 15441 14062 15217 14889 16231 15484 17191 15544 17303 15213 17013 15407 17201 14860 16804 12673 14292 13196 15112 14025 16222 14832 16952 12/98 15309 17526 15533 17623 15131 17302 15553 17623 16660 19267 16265 19111 16918 19676 16403 19107 15898 18400 15219 17777 15850 18700 15904 18570 12/99 16680 18691 16009 18090 15064 16911 17405 18824 17527 18627 17776 18790 16677 18026 17072 18277 18357 19281 17909 19438 19251 19881 18618 19164 12/00 19764 20194 20669 20303 20122 19775 19137 19102 20568 20035 20579 20490 20432 20125 19883 20053 18839 19300 16742 17887 16981 17775 18264 18825 12/01 19261 19319 18754 19199 18588 19237 19212 20186 17980 19601 17556 19638 15963 18566 14586 16763 14820 16875 13039 15046 14207 16096 15360 17128 12/02 14455 16385 14126 15983 13680 15550 13697 15585 15291 16965 16498 18104 16717 18337 16939 18656 17669 18977 17651 18790 18776 19968 19401 20277 12/03 20508 21486 </Table> <Table> --- VALUE OPPORTUNITIES IA --- RUSSELL 3000 VALUE INDEX $10,000 starting value $10,000 starting value $20,508 ending value $21,486 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR SINCE INCEPTION - ---------------------------------------------------------------- Value Opportunities IA 41.87% 6.02% 9.81% - ---------------------------------------------------------------- Value Opportunities IB(3) 41.52% 5.76% 9.54% - ---------------------------------------------------------------- Russell 3000 Value Index 31.14% 4.16% 10.48% - ---------------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGEMENT TEAM JAMES H. AVERILL Senior Vice President, Partner JAMES N. MORDY Senior Vice President, Partner DAVID R. FASSNACHT, CFA Senior Vice President, Partner - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Value Opportunities HLS Fund, Class IA returned 41.87% for the 12 months ended December 31, 2003. The Fund outperformed both the Lipper Multi Cap Value VA-UF Average, which returned 31.55% and the Russell 3000 Value Index, which returned 31.14% over the same period. WHY DID THE FUND PERFORM THIS WAY? Psychology reversed this year from the extreme risk aversion prevalent in 2002 and investors regained confidence from a recovering economy and a reasonable outcome to the Iraq War. Yield spreads narrowed and the more speculative stocks led the way in terms of performance. The outperformance of smaller stocks over the last three years has significantly closed the valuation gap with large cap stocks that had built up during the latter half of the 1990s. Value stocks outperformed growth stocks during the fourth quarter, which was a shift from the pattern earlier this year. This was particularly noticeable in some of the more cyclical sectors of the market such as materials and industrials. Our significant overweight position in mid-caps and small-caps, along with our underweight in large-caps, versus the benchmark served us well during the period. The Fund outperformed its market benchmark during the period as a result of both strong stock selection and timely sector allocation. Our overweight and strong stock picking in consumer discretionary, including cable system operators Comcast Corp. (communications), homebuilders Toll Brothers, Inc. (construction) and specialty retailers Foot Locker, Inc. (retail), benefited relative performance as the sector reacted favorably to improving economic fundamentals. Strong stock selection in health care and information technology also contributed to our results. On an absolute basis, Comcast Corp. (communications), Citigroup, Inc. (banks), and Alcoa, Inc. (metals, minerals & mining) were the best performing companies in the Fund. During the period, BJ's Wholesale (retail), Abitibi-Consolidated, Inc. (forest & paper products), and Eaton Corp. (machinery) detracted the most from overall absolute performance. WHAT IS YOUR OUTLOOK AND STRATEGY? We expect stocks invested through our low P/E approach to outperform over the long term. Value stocks, particularly on the large cap side, lagged the overall market in 2003, as small cap and "growthier" equities had their day in the sun. As a result we are finding such large value companies increasingly attractive, and they are gaining a higher weighting in the portfolio. At some point, we would expect the market's frothier areas to retreat in cases where companies are unable to obtain the sales and earnings growth necessary to support their current valuations. In that kind of market we would look for better relative performance from the "solid citizens" -- large low P/E companies with good relative returns on capital and decent growth prospects. 32 HARTFORD ADVISERS HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------- ----------- COLLATERALIZED MORTGAGE OBLIGATIONS V -- 1.2% $ @43,000 AESOP Funding II LLC, Series 1998-1, Class A (Aaa Moodys) 6.14% due 05/20/06.............................. $ 45,152 18,000 Asset Securitization Corp., Series 1997-D4, Class A1D (Aaa Moodys) 7.49% due 04/14/29.............................. 20,312 17,200 Asset Securitization Corp., Series 1997-D5, Class A1E (Aa1 Moodys) 6.93% due 02/14/41.............................. 18,290 20,352 Chase Commercial Mortgage Securities Corp., Series 1997-1, Class A2 (AAA S&P) 7.37% due 02/19/07.............................. 22,264 3,400 Citibank Credit Card Issuance Trust, Series 2001-B1, Class B1 (A2 Moodys) 7.05% due 09/17/07.............................. 3,680 4,000 Citibank Credit Card Master Trust l, Series 1999-7, Class B (A2 Moodys) 6.90% due 11/15/06.............................. 4,183 17,225 Lehman Brothers Commercial Mortgage Trust, Series 1997-C1, Class A3 (Aaa Moodys) 7.38% due 04/18/07.............................. 19,175 3,000 Standard Credit Card Master Trust, Series 1995-1, Class B (A1 Moodys) 8.45% due 01/07/07.............................. 3,206 ----------- 136,262 ----------- Total collateralized mortgage obligations......... $ 136,262 =========== </Table> <Table> <Caption> SHARES - ------------- COMMON STOCKS -- 70.2% BANKS -- 9.3% 2,369 American Express Co. ............................. $ 114,242 2,993 Bank One Corp. ................................... 136,442 2,100 Bank of America Corp. ............................ 168,903 5,787 Citigroup, Inc. .................................. 280,923 1,024 Federal National Mortgage Association............. 76,884 +1,120 HSBC Holdings PLC, ADR............................ 88,255 1,339 KeyCorp. ......................................... 39,248 1,479 State Street Corp. ............................... 77,016 1,687 U.S. Bancorp...................................... 50,230 1,048 Wachovia Corp. ................................... 48,808 ----------- 1,080,951 ----------- BUSINESS SERVICES -- 0.7% *3,083 Accenture Ltd..................................... 81,147 ----------- CHEMICALS -- 1.2% 1,356 Dow Chemical Co. (The)............................ 56,349 1,869 du Pont (E.I.) de Nemours & Co. .................. 85,768 ----------- 142,117 ----------- COMMUNICATIONS -- 0.5% 4,234 Motorola, Inc. ................................... 59,575 ----------- </Table> <Table> <Caption> MARKET SHARES VALUE # - ------------- ----------- COMPUTERS & OFFICE EQUIPMENT -- 5.6% 950 3M Co. ........................................... $ 80,779 *6,828 Cisco Systems, Inc................................ 165,845 *4,197 EMC Corp.......................................... 54,221 6,232 Hewlett-Packard Co. .............................. 143,144 2,182 International Business Machines Corp. ............ 202,228 ----------- 646,217 ----------- CONSUMER DURABLES -- 0.5% 2,027 Masco Corp. ...................................... 55,557 ----------- CONSUMER NON-DURABLES -- 2.1% 588 Cardinal Health, Inc. ............................ 35,974 3,303 Gillette Co. (The)................................ 121,334 914 Procter & Gamble Co. (The)........................ 91,290 ----------- 248,598 ----------- DRUGS -- 7.9% 2,357 Abbott Laboratories............................... 109,822 *1,620 Amgen, Inc........................................ 100,122 2,336 Eli Lilly & Co. .................................. 164,277 *1,113 Genzyme Corp...................................... 54,891 1,188 Merck & Co., Inc. ................................ 54,872 9,175 Pfizer, Inc. ..................................... 324,166 2,600 Wyeth............................................. 110,370 ----------- 918,520 ----------- ELECTRONICS -- 4.8% 9,191 General Electric Co. ............................. 284,728 6,975 Intel Corp. ...................................... 224,595 1,808 Texas Instruments, Inc. .......................... 53,107 ----------- 562,430 ----------- ENERGY & SERVICES -- 4.0% 1,119 ChevronTexaco Corp. .............................. 96,636 6,482 Exxon Mobil Corp. ................................ 265,778 1,821 Schlumberger Ltd. ................................ 99,629 ----------- 462,043 ----------- FINANCIAL SERVICES -- 2.1% 827 Franklin Resources, Inc. ......................... 43,064 1,919 Merrill Lynch & Co., Inc. ........................ 112,567 1,508 Morgan Stanley Dean Witter & Co. ................. 87,256 ----------- 242,887 ----------- FOOD, BEVERAGE & TOBACCO -- 3.3% 3,192 Coca-Cola Co. (The)............................... 161,994 +1,682 General Mills, Inc. .............................. 76,172 3,093 PepsiCo, Inc. .................................... 144,205 ----------- 382,371 ----------- FOREST & PAPER PRODUCTS -- 1.1% 1,970 International Paper Co. .......................... 84,927 700 Weyerhaeuser Co. ................................. 44,800 ----------- 129,727 ----------- HEALTH SERVICES -- 0.4% 1,098 HCA, Inc. ........................................ 47,170 ----------- HOTELS & GAMING -- 0.3% 681 Marriott International, Inc., Class A............. 31,453 ----------- </Table> The accompanying notes are an integral part of this financial statement. 33 HARTFORD ADVISERS HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - ------------- ----------- COMMON STOCKS -- (CONTINUED) INSURANCE -- 3.3% 3,284 American International Group, Inc. ............... $ 217,683 2,200 Marsh & McLennan Cos., Inc. ...................... 105,358 3,737 Travelers Property Casualty Corp. -- Class B...... 63,412 ----------- 386,453 ----------- MACHINERY -- 1.4% *1,969 Applied Materials, Inc............................ 44,211 1,398 Caterpillar, Inc. ................................ 116,045 ----------- 160,256 ----------- MEDIA & ENTERTAINMENT -- 4.8% *2,744 Comcast Corp...................................... 90,190 *6,604 Liberty Media Corp., Class A...................... 78,523 *12,300 Time Warner, Inc.................................. 221,277 2,496 Viacom, Inc., Class B............................. 110,759 2,521 Walt Disney Co. (The)............................. 58,815 ----------- 559,564 ----------- MEDICAL INSTRUMENTS & SUPPLIES -- 1.3% 1,450 Johnson & Johnson................................. 74,912 1,665 Medtronic, Inc. .................................. 80,921 ----------- 155,833 ----------- METALS, MINERALS & MINING -- 1.5% 1,790 Alcoa, Inc. ...................................... 68,020 1,259 Illinois Tool Works, Inc. ........................ 105,609 ----------- 173,629 ----------- RETAIL -- 4.0% *3,175 Costco Wholesale Corp............................. 118,035 4,458 Gap, Inc. (The)................................... 103,459 4,093 Home Depot, Inc. (The)............................ 145,275 *554 Kohl's Corp....................................... 24,874 1,894 Target Corp. ..................................... 72,714 ----------- 464,357 ----------- RUBBER & PLASTICS PRODUCTS -- 0.8% 1,300 NIKE, Inc., Class B............................... 88,998 ----------- SOFTWARE & SERVICES -- 5.3% *1,994 Computer Sciences Corp. .......................... 88,186 +1,877 First Data Corp. ................................. 77,142 11,423 Microsoft Corp. .................................. 314,595 *4,456 Oracle Corp. ..................................... 58,824 +1,828 SAP AG, ADR....................................... 75,972 ----------- 614,719 ----------- TRANSPORTATION -- 3.4% 1,248 CSX Corp. ........................................ 44,842 1,387 FedEx Corp. ...................................... 93,609 1,400 Lockheed Martin Corp. ............................ 71,960 809 Northrop Grumman Corp. ........................... 77,302 1,162 United Technologies Corp. ........................ 110,151 ----------- 397,864 ----------- UTILITIES -- 0.6% 2,250 Waste Management, Inc. ........................... 66,585 ----------- Total common stocks............................... $ 8,159,021 =========== </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ----------- CORPORATE NOTES V -- 12.0% BANKS -- 1.4% $ 20,000 Bank One Corp. (Aa3 Moodys) 6.875% due 08/01/06............................. $ 22,117 20,000 Bank of America Corp. (Aa2 Moodys) 5.875% due 02/15/09............................. 21,914 1,000 Bank of America Corp. (Aa3 Moodys) 6.20% due 02/15/06.............................. 1,081 10,000 BankBoston Corp. (A2 Moodys) 6.625% due 02/01/04............................. 10,038 14,825 Banponce Corp. (Baa1 Moodys) 6.75% due 12/15/05.............................. 16,123 25,000 Bayerische Landesbank Girozentrale (Aaa Moodys) 5.65% due 02/01/09.............................. 27,149 1,000 Citigroup, Inc. (Aa1 Moodys) 6.50% due 01/18/11.............................. 1,127 1,500 First Chicago NBD Corp. (A1 Moodys) 7.125% due 05/15/07............................. 1,692 13,685 First Union National Bank (Aa3 Moodys) 5.80% due 12/01/08.............................. 15,005 +1,000 Household Finance Corp. (A1 Moodys) 6.00% due 05/01/04.............................. 1,015 1,500 Inter-American Development Bank (Aaa Moodys) 7.375% due 01/15/10............................. 1,797 1,500 International Bank for Reconstruction & Development (Aaa Moodys) 7.00% due 01/27/05.............................. 1,590 36,745 Key Bank, N.A. (A1 Moodys) 5.80% due 04/01/04.............................. 37,137 750 KeyCorp. Capital II (A3 Moodys) 6.875% due 03/17/29............................. 786 1,500 Mellon Funding Corp. (A2 Moodys) 6.375% due 02/15/10............................. 1,670 1,000 Morgan (J.P.) Chase & Co. (A2 Moodys) 6.75% due 02/01/11.............................. 1,128 750 National City Corp. (A2 Moodys) 6.875% due 05/15/19............................. 866 500 Republic New York Capital I (A2 Moodys) 7.75% due 11/15/26.............................. 539 1,500 Salomon Smith Barney Holdings, Inc. (Aa1 Moodys) 5.875% due 03/15/06............................. 1,615 500 State Street Corp. (A1 Moodys) 7.65% due 06/15/10.............................. 598 1,000 Washington Mutual Financial Corp. (A3 Moodys) 7.25% due 06/15/06.............................. 1,112 1,000 Wells Fargo Bank N.A. (Aa1 Moodys) 6.45% due 02/01/11.............................. 1,123 ----------- 167,222 ----------- </Table> The accompanying notes are an integral part of this financial statement. 34 - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ----------- CORPORATE NOTES V -- (CONTINUED) CHEMICALS -- 0.4% $ 20,000 ICI Wilmington, Inc. (Baa3 Moodys) 6.95% due 09/15/04.............................. $ 20,624 20,000 Rohm & Haas Co. (A3 Moodys) 7.40% due 07/15/09.............................. 23,436 ----------- 44,060 ----------- COMMUNICATIONS -- 0.1% 10,000 Bellsouth Telecommunications, Inc. (Aa3 Moodys) 6.375% due 06/01/28............................. 10,435 500 GTE Corp. (A3 Moodys) 7.51% due 04/01/09.............................. 575 500 Sprint Capital Corp. (Baa3 Moodys) 6.875% due 11/15/28............................. 488 500 Sprint Capital Corp. (Baa3 Moodys) 7.625% due 01/30/11............................. 560 750 Telecommunications de Puerto Rico (Baa1 Moodys) 6.65% due 05/15/06.............................. 813 500 Verizon Global Funding Corp. (A2 Moodys) 7.25% due 12/01/10.............................. 576 500 Verizon Global Funding Corp. (A2 Moodys) 7.75% due 12/01/30.............................. 587 ----------- 14,034 ----------- COMPUTERS & OFFICE EQUIPMENT -- 0.4% 30,000 Hewlett-Packard Co. (A3 Moodys) 7.15% due 06/15/05.............................. 32,254 18,000 Pitney Bowes, Inc. (Aa3 Moodys) 5.50% due 04/15/04.............................. 18,208 ----------- 50,462 ----------- CONSUMER NON-DURABLES -- 0.7% 25,000 Boise Cascade Office Products Corp. (Ba2 Moodys) 7.05% due 05/15/05.............................. 26,043 350 Cardinal Health, Inc. (A2 Moodys) 6.75% due 02/15/11.............................. 400 18,000 Colgate-Palmolive Co. (Aa3 Moodys) 5.58% due 11/06/08.............................. 19,697 750 Procter & Gamble Co. (The) (Aa3 Moodys) 6.875% due 09/15/09............................. 866 21,100 Procter & Gamble Co. (The) (Aa3 Moodys) 9.36% due 01/01/21.............................. 28,302 750 SYSCO Corp. (A1 Moodys) 6.50% due 08/01/28.............................. 831 ----------- 76,139 ----------- CONSUMER SERVICES -- 0.4% 37,832 Postal Square LP (NA Moodys) 8.95% due 06/15/22.............................. 49,553 ----------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ----------- DRUGS -- 0.5% $ 26,000 American Home Products Corp. (Baa1 Moodys) 7.25% due 03/01/23.............................. $ 28,630 750 Bristol-Myers Squibb Co. (A1 Moodys) 6.80% due 11/15/26.............................. 836 29,000 Pharmacia Corp. (Aaa Moodys) 6.60% due 12/01/28.............................. 32,656 ----------- 62,122 ----------- EDUCATION -- 0.1% 10,900 Harvard University (Aaa Moodys) 8.125% due 04/15/07............................. 12,666 ----------- ELECTRICAL EQUIPMENT -- 0.6% 30,000 Danaher Corp. (A2 Moodys) 6.00% due 10/15/08.............................. 32,907 30,000 Rockwell International Corp. (A3 Moodys) 6.70% due 01/15/28.............................. 32,856 ----------- 65,763 ----------- ELECTRONICS -- 0.0% 500 Heller Financial, Inc. (Aaa Moodys) 6.375% due 03/15/06............................. 545 ----------- ENERGY & SERVICES -- 0.1% 12,250 Amoco Co. (Aa1 Moodys) 6.50% due 08/01/07.............................. 13,777 1,000 Conoco, Inc. (A3 Moodys) 6.95% due 04/15/29.............................. 1,134 1,000 Texaco Capital, Inc. (Aa3 Moodys) 8.625% due 06/30/10............................. 1,258 ----------- 16,169 ----------- FINANCIAL SERVICES -- 0.8% 30,000 AXA Financial, Inc. (A3 Moodys) 7.00% due 04/01/28.............................. 33,544 @16,355 ERAC USA Finance Co. (Baa1 Moodys) 7.35% due 06/15/08.............................. 18,686 1,000 Goldman Sachs Group, Inc. (The) (Aa3 Moodys) 6.65% due 05/15/09.............................. 1,131 750 Morgan Stanley Dean Witter & Co. (Aa3 Moodys) 7.75% due 06/15/05.............................. 814 @1,250 Prudential Insurance Co. of America (A2 Moodys) 6.375% due 07/26/06............................. 1,362 30,000 Toyota Motor Credit Corp. (Aaa Moodys) 5.50% due 12/15/08.............................. 32,830 ----------- 88,367 ----------- </Table> The accompanying notes are an integral part of this financial statement. 35 HARTFORD ADVISERS HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ----------- CORPORATE NOTES V -- (CONTINUED) FOOD, BEVERAGE & TOBACCO -- 0.9% $ 750 Anheuser Busch Cos., Inc. (A1 Moodys) 7.55% due 10/01/30.............................. $ 926 30,000 Coca-Cola Enterprises, Inc. (A2 Moodys) 6.75% due 09/15/28.............................. 33,458 500 Coca-Cola Enterprises, Inc. (A2 Moodys) 8.50% due 02/01/22.............................. 647 19,555 ConAgra Foods, Inc. (Baa1 Moodys) 7.875% due 09/15/10............................. 23,332 1,500 Pepsi Bottling Group, Inc. (The) (A3 Moodys) 7.00% due 03/01/29.............................. 1,719 35,000 PepsiAmericas, Inc. (Baa1 Moodys) 6.375% due 05/01/09............................. 38,981 ----------- 99,063 ----------- INSURANCE -- 1.9% 20,000 ACE INA Holdings, Inc. (A3 Moodys) 8.30% due 08/15/06.............................. 22,626 26,485 AmerUs Group Co. (Baa3 Moodys) 6.95% due 06/15/05.............................. 27,819 500 American General Co. (Aaa Moodys) 6.625% due 02/15/29............................. 542 30,000 Cincinnati Financial Corp. (A2 Moodys) 6.90% due 05/15/28.............................. 32,723 @27,000 Jackson National Life Insurance Co. (A3 Moodys) 8.15% due 03/15/27.............................. 31,636 @30,000 Liberty Mutual Insurance (Baa2 Moodys) 8.20% due 05/04/07.............................. 32,863 @30,000 New England Mutual Life Insurance Co. (A1 Moodys) 7.875% due 02/15/24............................. 34,843 1,000 Reliastar Financial Corp. (A1 Moodys) 8.00% due 10/30/06.............................. 1,130 27,600 Torchmark Corp. (A3 Moodys) 8.25% due 08/15/09.............................. 31,992 ----------- 216,174 ----------- MACHINERY -- 0.2% 20,000 Eaton Corp. (A2 Moodys) 6.95% due 11/15/04.............................. 20,896 ----------- MEDIA & ENTERTAINMENT -- 0.7% 30,000 Comcast Cable Communications (Baa3 Moodys) 6.875% due 06/15/09............................. 33,820 1,000 Comcast Cable Communications (Baa3 Moodys) 8.50% due 05/01/27.............................. 1,281 10,400 Times Mirror Co. (The), Class A (A3 Moodys) 7.50% due 07/01/23.............................. 11,802 +35,000 Walt Disney Co. (The) (Baa1 Moodys) 6.375% due 03/01/12............................. 38,486 ----------- 85,389 ----------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ----------- MEDICAL INSTRUMENTS & SUPPLIES -- 0.2% $ +22,000 Becton, Dickinson & Co. (A2 Moodys) 6.70% due 08/01/28.............................. $ 24,482 ----------- REAL ESTATE INVESTMENT TRUST -- 0.2% 20,000 Liberty Property Trust (Baa2 Moodys) 7.25% due 08/15/07.............................. 22,399 ----------- RETAIL -- 0.9% 20,000 Albertson's, Inc. (Baa2 Moodys) 6.55% due 08/01/04.............................. 20,474 30,000 Home Depot, Inc. (The) (Aa3 Moodys) 6.50% due 09/15/04.............................. 31,078 20,200 Target Corp. (A2 Moodys) 5.875% due 11/01/08............................. 22,126 30,000 Wal-Mart Stores, Inc. (Aa2 Moodys) 6.875% due 08/10/09............................. 34,561 ----------- 108,239 ----------- TRANSPORTATION -- 0.2% +500 Boeing Capital Corp. (A3 Moodys) 6.10% due 03/01/11.............................. 540 19,972 Continental Airlines, Inc. (Baa3 Moodys) 6.90% due 01/02/18.............................. 19,713 1,000 DaimlerChrysler North America Holding Corp. (A3 Moodys) 7.40% due 01/20/05.............................. 1,054 750 DaimlerChrysler North America Holding Corp. (A3 Moodys) 7.75% due 01/18/11.............................. 858 500 Ford Motor Co. (Baa1 Moodys) 6.375% due 02/01/29............................. 446 1,250 General Motors Acceptance Corp. (A3 Moodys) 6.15% due 04/05/07.............................. 1,340 1,000 Textron Financial Corp. (A3 Moodys) 7.125% due 12/09/04............................. 1,045 ----------- 24,996 ----------- U.S. GOVERNMENT AGENCIES -- 0.5% 50,000 Tennessee Valley Authority (Aaa Moodys) 6.00% due 03/15/13.............................. 54,908 ----------- UTILITIES -- 0.8% 25,000 Alabama Power Co. (A2 Moodys) 7.125% due 08/15/04............................. 25,881 1,000 Alabama Power Co. (A2 Moodys) 7.125% due 10/01/07............................. 1,137 40,000 Great Plains Energy, Inc. (A3 Moodys) 7.125% due 12/15/05............................. 43,570 567 Niagara Mohawk Power Corp. (Baa3 Moodys) 7.625% due 10/01/05............................. 615 17,285 Northern Border Pipeline Co. (A3 Moodys) 7.75% due 09/01/09.............................. 20,482 ----------- 91,685 ----------- Total corporate notes............................. $ 1,395,333 =========== </Table> The accompanying notes are an integral part of this financial statement. 36 - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ----------- FOREIGN/YANKEE BONDS & NOTES V -- 0.7% BANKS -- 0.2% $ 24,000 Credit National (A1 Moodys) 7.00% due 11/14/05.............................. $ 25,948 ----------- COMMUNICATIONS -- 0.0% 1,250 Telefonica Europe BV (A3 Moodys) 7.35% due 09/15/05.............................. 1,356 1,250 Vodafone Group PLC (A2 Moodys) 7.875% due 02/15/30............................. 1,536 ----------- 2,892 ----------- FINANCIAL SERVICES -- 0.0% 500 Korea Development Bank (A3 Moodys) 7.125% due 04/22/04............................. 505 1,250 Santandar Central Hispano Issuances Ltd. (A1 Moodys) 7.625% due 11/03/09............................. 1,470 ----------- 1,975 ----------- METALS, MINERALS & MINING -- 0.3% 30,000 Alcan, Inc. (Baa1 Moodys) 7.25% due 11/01/28.............................. 34,464 ----------- TRANSPORTATION -- 0.2% @17,639 SCL Terminal Aereo Santiago S.A. (Aaa Moodys) 6.95% due 07/01/12.............................. 19,149 ----------- UTILITIES -- 0.0% 750 TransCanada PipeLines Ltd. (A2 Moodys) 6.49% due 01/21/09.............................. 834 ----------- Total foreign/yankee bonds & notes................ $ 85,262 =========== U.S. TREASURIES & FEDERAL AGENCIES -- 15.1% FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 0.0% $ 673 6.30% due 04/01/08................................ $ 736 3 9.00% due 03/01/21................................ 3 ----------- 739 ----------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 2.0% 74,608 5.50% due 10/15/33................................ 75,928 57,573 6.00% due 06/15/24 -- 11/15/33.................... 59,905 12,141 6.50% due 03/15/26 -- 06/15/28.................... 12,820 69,540 7.00% due 06/15/26 -- 11/15/32.................... 74,140 346 7.50% due 09/15/23................................ 373 10,024 8.00% due 09/15/26 -- 02/15/31.................... 10,907 362 9.00% due 06/20/16 -- 01/15/23.................... 404 16 9.50% due 05/15/20................................ 17 ----------- 234,494 ----------- U.S. TREASURY BONDS -- 3.9% +400,000 6.25% due 08/15/23................................ 455,922 ----------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ----------- U.S. TREASURY NOTES -- 9.2% $ +650,000 1.625% due 09/30/05 -- 10/31/05................... $ 649,402 +200,000 2.375% due 08/15/06............................... 201,078 +200,000 3.25% due 08/15/08................................ 201,219 +10,000 6.00% due 08/15/04................................ 10,302 ----------- 1,062,001 ----------- Total U.S. treasuries & federal agencies.......... $ 1,753,156 =========== <Caption> SHARES - ---------- WARRANTS -- 0.0% COMMUNICATIONS -- 0.0% *@@-- Minorplanet System USA, Inc. ..................... $ -- ----------- Total warrants.................................... $ -- =========== SHORT-TERM SECURITIES -- 14.3% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 13.9% 1,620,168 State Street Navigator Securities Lending Prime Portfolio....................................... $ 1,620,168 <Caption> PRINCIPAL AMOUNT - ---------- REPURCHASE AGREEMENTS -- 0.4% $ 46,935 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04............................. 46,935 ----------- Total short-term securities....................... $ 1,667,103 =========== </Table> <Table> <Caption> DIVERSIFICATION OF NET ASSETS: Total collateralized mortgage obligations (cost $126,243)......... 1.2% $ 136,262 Total common stocks (cost $7,163,600)......................... 70.2 8,159,021 Total corporate notes (cost $1,285,306)......................... 12.0 1,395,333 Total foreign/yankee bonds & notes (cost $76,027)...................... 0.7 85,262 Total warrants (cost $5).............. 0.0 -- Total U.S. treasuries & federal agencies (cost $1,709,086).......... 15.1 1,753,156 Total short-term securities (cost $1,667,103)......................... 14.3 1,667,103 ----- ----------- Total investment in securities (total cost $12,027,370) -- including $1,587,694 of securities loaned (See Note 2(i)).............. 113.5 13,196,137 Cash, receivables and other assets.... 0.4 51,250 Payable for Fund shares redeemed...... (0.0) (4,549) Securities lending collateral payable to brokers (See Note 2(i)).......... (13.9) (1,620,168) Other liabilities..................... (0.0) (580) ----- ----------- Net assets............................ 100.0% $11,622,090 ===== =========== </Table> The accompanying notes are an integral part of this financial statement. 37 HARTFORD ADVISERS HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET VALUE # ----------- SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 9,500,000 shares authorized; 512,286 shares outstanding................................ $ 512 Paid in capital.............................. 11,270,027 Accumulated net investment income............ 104,776 Accumulated net realized loss on investments................................ (921,992) Unrealized appreciation on investments....... 1,168,767 ----------- Net assets................................... $11,622,090 =========== </Table> <Table> <Caption> Class IA Net asset value per share ($10,358,449 / 456,882 shares outstanding) (8,500,000 shares authorized).................................. $22.67 ====== Class IB Net asset value per share ($1,263,641 / 55,404 shares outstanding) (1,000,000 shares authorized).................................. $22.81 ====== </Table> <Table> <Caption> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 2.1% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). @ Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2003, the market value of these securities amounted to $183,691 or 1.6% of net assets (See Note 2(m)). @@ Due to the presentation of the financial statements in thousands, the number of shares and/or market value round to zero. V The bond ratings are unaudited. </Table> The accompanying notes are an integral part of this financial statement. 38 HARTFORD BOND HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- COLLATERALIZED MORTGAGE OBLIGATIONS V -- 7.6% $ @2,509 AQ Finance CEB Trust, Series 2003-CE1A, Class Note (Baa2 Moodys) 6.141% due 08/25/33............................. $ 2,457 10,200 American Express Credit Account Master, Series 1999-2, Class A (Aaa Moodys) 5.95% due 12/15/06.............................. 10,379 4,200 Bank One Issuance Trust, Series 2003-C3, Class C3 (Baa2 Moodys) 4.77% due 02/16/16.............................. 3,985 10,000 Bear Stearns Commercial Mortgage Securities, Inc., Series 2003-T10, Class A2 (AAA S&P) 4.74% due 03/13/40.............................. 9,994 10,000 Bear Stearns Commercial Mortgage Securities, Inc., Series 2002-TOP8, Class A2 (AAA S&P) 4.83% due 08/15/38.............................. 10,104 2,958 Bear Stearns Commercial Mortgage Securities, Inc., Series 2003-T12, Class A1 (AAA S&P) 2.96% due 08/13/39.............................. 2,935 4,847 CS First Boston Mortgage Securities Corp., Series 2003-C3, Class A1 (Aaa Moodys) 2.079% due 05/15/38............................. 4,756 7,608 California Infrastructure Pacific Gas & Electric, Series 1997-1, Class A7 (Aaa Moodys) 6.38% due 09/25/08.............................. 8,103 4,000 California Infrastructure Pacific Gas & Electric, Series 1997-1, Class A8 (Aaa Moodys) 6.48% due 12/26/09.............................. 4,442 5,040 Capital One Multi Asset Execution, Series 2003-B2, Class B2 (A2 Moodys) 3.50% due 02/17/09.............................. 5,068 3,360 Citibank Credit Card Issuance Trust, Series 2003-C4, Class C4 (Baa2 Moodys) 5.00% due 06/10/15.............................. 3,230 16,150 Citibank Credit Card Master Trust I, Series 1999-1, Class A (Aaa Moodys) 5.50% due 02/15/06.............................. 16,235 5,441 Comed Transitional Funding Trust, Series 1998-1, Class A5 (Aaa Moodys) 5.44% due 03/25/07.............................. 5,602 16,645 Daimler Chrysler Auto Trust, Series 2002-A, Class A3 (Aaa Moodys) 3.85% due 04/06/06.............................. 16,833 8,920 Discover Card Master Trust I, Series 2001-5, Class A (Aaa Moodys) 5.30% due 11/16/06.............................. 9,050 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- $ 8,350 Ford Credit Auto Owner Trust, Series 2003-A, Class C (Baa2 Moodys) 4.29% due 11/15/07.............................. $ 8,383 15,000 GMAC Commercial Mortgage Securities Inc., Series 2003-C3, Class A1 (Aaa Moodys) 3.40% due 04/10/40.............................. 15,096 13,250 Honda Auto Receivables Owner Trust, Series 2003-2, Class A2 (Aaa Moodys) 1.34% due 12/21/05.............................. 13,255 6,541 Illinois Power Special Purpose Trust, Series 1998-1, Class A5 (Aaa Moodys) 5.38% due 06/25/07.............................. 6,747 10,792 LB-UBS Commercial Mortgage Trust, Series 2003-C1, Class A1 (Aaa Moodys) 2.72% due 04/15/33.............................. 10,764 10,821 LB-UBS Commercial Mortgage Trust, Series 2003-C7, Class A1 (Aaa Moodys) 3.334% due 09/15/27............................. 10,858 1,749 Morgan Stanley Capital I, Series 1999-WF1, Class A1 (Aaa Moodys) 5.91% due 04/15/08.............................. 1,860 5,475 Morgan Stanley Dean Witter Capital I, Series 2001-IQA, Class A1 (Aaa Moodys) 4.57% due 12/18/32.............................. 5,665 10,000 Morgan Stanley Dean Witter Capital I, Series 2003-TOP9, Class A2 (Aaa Moodys) 4.74% due 11/13/36.............................. 10,018 765 PP&L Transition Bond Co., LLC, Series 1999-1, Class A5 (Aaa Moodys) 6.83% due 03/25/07.............................. 793 1,680 Soundview Home Equity Loan Trust, Series 2000-1, Class M1 (Aa2 Moodys) 8.64% due 05/25/30.............................. 1,747 22,250 Volkswagen Auto Loan Enhanced Trust, Series 2003-1, Class A2 (Aaa Moodys) 1.11% due 12/20/05.............................. 22,228 10,080 WFS Financial Owner Trust, Series 2003-2, Class A4 (Aaa Moodys) 2.41% due 12/20/08.............................. 9,992 @2,968 Whole Auto Loan Trust, Series 2002-1, Class D (Ba2 Moodys) 6.00% due 04/15/09.............................. 2,964 ---------- 233,543 ---------- Total collateralized mortgage obligations......... $ 233,543 ========== </Table> The accompanying notes are an integral part of this financial statement. 39 HARTFORD BOND HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - ---------- ---------- COMMON STOCKS -- 0.4% COMMUNICATIONS -- 0.4% *##66 Global Crossing Ltd............................... $ 2,236 *565 Marconi Corp., PLC, ADR........................... 11,435 13,671 ---------- Total common stocks............................... $ 13,671 ========== <Caption> PRINCIPAL AMOUNT - ---------- CONVERTIBLE BONDS V -- 0.3% SOFTWARE & SERVICES -- 0.3% $ 12,590 America Online, Inc. (Baa2 Moodys) 0.00% due 12/06/19.............................. $ 7,884 ---------- Total convertible bonds........................... $ 7,884 ========== CORPORATE NOTES V -- 26.1% APPAREL & TEXTILE -- 0.1% $ 1,600 Nine West Group, Inc. (Baa2 Moodys) 8.375% due 08/15/05............................. $ 1,733 ---------- BANKS -- 2.5% 12,000 Ford Motor Credit Co. (A3 Moodys) 7.00% due 10/01/13.............................. 12,656 7,000 Ford Motor Credit Co. (A3 Moodys) 7.375% due 02/01/11............................. 7,630 17,430 KFW International Finance, Inc. (Aaa Moodys) 3.00% due 09/15/05.............................. 17,623 8,450 Morgan (J.P.) Chase & Co. (A2 Moodys) 5.25% due 05/01/15.............................. 8,423 7,550 Morgan (J.P.) Chase & Co. (A2 Moodys) 7.875% due 06/15/10............................. 8,991 @11,300 Rabobank Capital Fund II (Aa2 Moodys) 5.26% due 12/31/49.............................. 11,316 3,980 Sovereign Bank (Baa3 Moodys) 5.125% due 03/15/13............................. 3,952 500 St Paul Bancorp, Inc. (A3 Moodys) 7.125% due 02/15/04............................. 503 3,780 Wachovia Corp. (Aa3 Moodys) 7.55% due 08/18/05.............................. 4,121 ---------- 75,215 ---------- BUSINESS SERVICES -- 0.0% 500 Interpool, Inc. (Caa1 Moodys) 7.20% due 08/01/07.............................. 478 ---------- CHEMICALS -- 0.3% 3,025 Millennium America, Inc. (B1 Moodys) 7.625% due 11/15/26............................. 2,813 2,735 Olin Corp. (Baa3 Moodys) 9.125% due 12/15/11............................. 3,325 ##1,700 Pollyone Corp. (B3 Moodys) 6.875% due 12/01/04............................. 1,679 ---------- 7,817 ---------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- COMMUNICATIONS -- 1.3% $ 4,689 AT&T Corp. (Baa2 Moodys) 8.75% due 11/15/31.............................. $ 5,479 @1,700 AT&T Corp. (Baa2 Moodys) 8.75% due 11/15/31.............................. 1,987 12,600 AT&T Wireless Services, Inc. (Baa2 Moodys) 8.125% due 05/01/12............................. 14,817 +3,050 Lucent Technologies, Inc. (Caa1 Moodys) 6.45% due 03/15/29.............................. 2,398 +2,510 Lucent Technologies, Inc. (Caa1 Moodys) 6.50% due 01/15/28.............................. 1,964 @@L300 Nextlink Escrow (Default) 0.00% due 12/01/09...... -- @@L600 Nextlink Escrow (Default) 0.00% due 12/01/09...... -- 1,235 PanAmSat Corp. (Ba2 Moodys) 6.375% due 01/15/08............................. 1,281 +7,765 Qwest Corp. (Ba3 Moodys) 6.875% due 09/15/33............................. 7,377 ##@@-- Voicestream Wireless Corp. (Ba3 Moodys) 10.375% due 11/15/09............................ -- @@17 Voicestream Wireless Corp. (Not Rated) 0.00% due 11/15/09........................................ -- L12,591 WorldCom, Inc. (Default) 8.25% due 05/15/31....... 4,218 ---------- 39,521 ---------- COMPUTERS & OFFICE EQUIPMENT -- 0.4% 7,650 International Game Technology (Baa3 Moodys) 7.875% due 05/15/04............................. 7,809 2,700 International Game Technology (Baa3 Moodys) 8.375% due 05/15/09............................. 3,232 ---------- 11,041 ---------- CONSTRUCTION -- 0.5% 7,800 CRH America, Inc. (Baa1 Moodys) 6.95% due 03/15/12.............................. 8,800 1,500 Chesapeake & Potomac Telephone Co. (Aa3 Moodys) 8.30% due 08/01/31.............................. 1,884 3,500 Toll Corp. (Ba2 Moodys) 8.25% due 02/01/11.............................. 3,850 ---------- 14,534 ---------- CONSUMER DURABLES -- 0.3% 3,105 Corning, Inc. (Ba2 Moodys) 8.30% due 04/04/25.............................. 3,190 6,250 Owens-Brockway (B1 Moodys) 8.75% due 11/15/12.............................. 6,961 ---------- 10,151 ---------- CONSUMER NON-DURABLES -- 0.2% 6,545 Xerox Corp. (B1 Moodys) 9.75% due 01/15/09.............................. 7,658 ---------- </Table> The accompanying notes are an integral part of this financial statement. 40 - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- CORPORATE NOTES V -- (CONTINUED) DRUGS -- 0.3% $ 8,470 Wyeth (Baa1 Moodys) 6.45% due 02/01/24.............................. $ 8,680 ELECTRICAL EQUIPMENT -- 0.7% 8,125 PerkinElmer, Inc. (Ba3 Moodys) 8.875% due 01/15/13............................. 9,303 8,230 Rockwell International Corp. (A3 Moodys) 5.20% due 01/15/98.............................. 6,508 +6,000 Rockwell International Corp. (A3 Moodys) 6.70% due 01/15/28.............................. 6,571 ---------- 22,382 ---------- ENERGY & SERVICES -- 1.6% 9,050 Anadarko Petroleum Corp. (Baa1 Moodys) 5.375% due 03/01/07............................. 9,675 7,935 Conoco, Inc. (A3 Moodys) 5.90% due 04/15/04.............................. 8,036 +7,300 El Paso CGP Co. (Caa1 Moodys) 7.625% due 09/01/08............................. 7,017 5,000 Lasmo, Inc. (A1 Moodys) 7.50% due 06/30/06.............................. 5,585 6,800 Occidental Petroleum Corp. (Baa1 Moodys) 7.375% due 11/15/08............................. 7,844 6,000 Pioneer Natural Resources Co. (Ba1 Moodys) 7.20% due 01/15/28.............................. 6,423 250 Pioneer Natural Resources Co. (Ba1 Moodys) 9.625% due 04/01/10............................. 311 2,500 Union Oil Co. of California (Baa2 Moodys) 9.375% due 02/15/11............................. 3,101 ---------- 47,992 ---------- FINANCIAL SERVICES -- 1.4% 9,035 AvalonBay Communities, Inc. (Baa1 Moodys) 8.25% due 07/15/08.............................. 10,624 6,900 Bear Stearns Cos., Inc. (The) (A1 Moodys) 5.70% due 11/15/14.............................. 7,192 6,300 Credit Suisse First Boston USA, Inc. (Aa3 Moodys) 6.125% due 11/15/11............................. 6,859 3,800 Duke Realty LP (Baa1 Moodys) 5.25% due 01/15/10.............................. 3,972 @2,885 ERAC USA Finance Co. (Baa1 Moodys) 8.25% due 05/01/05.............................. 3,112 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- FINANCIAL SERVICES -- (CONTINUED) $ 5,700 ERP Operating LP (Baa1 Moodys) 6.63% due 04/13/05.............................. $ 6,040 4,150 Goldman Sachs Group, Inc. (The) (Aa3 Moodys) 5.25% due 04/01/13.............................. 4,203 ---------- 42,002 ---------- FOOD, BEVERAGE & TOBACCO -- 1.2% 10,110 ConAgra Foods, Inc. (Baa1 Moodys) 7.50% due 09/15/05.............................. 10,984 3,750 ConAgra Foods, Inc. (Baa1 Moodys) 7.00% due 10/01/28.............................. 4,121 7,500 Delhaize America, Inc. (Ba1 Moodys) 8.125% due 04/15/11............................. 8,625 12,100 General Mills, Inc. (Baa2 Moodys) 2.625% due 10/24/06............................. 12,034 ---------- 35,764 ---------- FOREST & PAPER PRODUCTS -- 1.0% 1,895 Champion International Corp. (Baa2 Moodys) 7.20% due 11/01/26.............................. 2,158 3,005 Georgia-Pacific Corp. (Ba3 Moodys) 7.25% due 06/01/28.............................. 2,881 5,600 International Paper Co. (Baa2 Moodys) 6.875% due 04/15/29............................. 5,945 12,100 Potlatch Corp. (Baa3 Moodys) 12.50% due 12/01/09............................. 14,520 4,200 Willamette Industries, Inc. (Baa2 Moodys) 7.85% due 07/01/26.............................. 4,744 ---------- 30,248 ---------- HEALTH SERVICES -- 0.7% 12,000 HCA, Inc. (Ba1 Moodys) 6.95% due 05/01/12.............................. 12,867 6,540 Manor Care, Inc. (Ba1 Moodys) 7.50% due 06/15/06.............................. 7,096 2,110 Tenet Healthcare Corp. (B1 Moodys) 6.375% due 12/01/11............................. 2,026 ---------- 21,989 ---------- INSURANCE -- 0.7% 3,800 ACE INA Holdings, Inc. (A3 Moodys) 8.20% due 08/15/04.............................. 3,948 700 Aetna, Inc. (Baa2 Moodys) 7.375% due 03/01/06............................. 770 5,400 Humana, Inc. (Baa3 Moodys) 7.25% due 08/01/06.............................. 5,900 @3,500 Prudential Insurance Co. of America (A2 Moodys) 6.375% due 07/26/06............................. 3,813 </Table> The accompanying notes are an integral part of this financial statement. 41 HARTFORD BOND HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- CORPORATE NOTES V -- (CONTINUED) INSURANCE -- (CONTINUED) $ 500 Reliastar Financial Corp. (A1 Moodys) 8.00% due 10/30/06.............................. $ 565 5,815 Wellpoint Health Networks, Inc. (Baa1 Moodys) 6.375% due 06/15/06............................. 6,340 ---------- 21,336 ---------- MEDIA & ENTERTAINMENT -- 2.8% 2,780 AT&T Broadband (Baa3 Moodys) 8.375% due 03/15/13............................. 3,401 @2,700 COX Enterprises, Inc. (Baa1 Moodys) 7.875% due 09/15/10............................. 3,198 4,200 COX Radio, Inc. (Baa3 Moodys) 6.375% due 05/15/05............................. 4,418 7,500 CSC Holdings, Inc. (B1 Moodys) 7.625% due 07/15/18............................. 7,875 6,200 Clear Channel Communications, Inc. (Baa3 Moodys) 6.00% due 11/01/06.............................. 6,702 500 Comcast Cable Communications (Baa3 Moodys) 8.50% due 05/01/27.............................. 641 8,665 Continental Cablevision, Inc. (Baa3 Moodys) 8.875% due 09/15/05............................. 9,562 1,000 Continental Cablevision, Inc. (Baa3 Moodys) 9.50% due 08/01/13.............................. 1,155 @5,200 Echostar DBS Corp. (Ba3 Moodys) 5.75% due 10/01/08.............................. 5,259 8,880 Liberty Media Corp. (Baa3 Moodys) 3.50% due 09/25/06.............................. 8,924 7,000 News America Holdings, Inc. (Baa3 Moodys) 7.70% due 10/30/25.............................. 8,153 10,300 Time Warner Entertainment Co. (Baa1 Moodys) 8.375% due 03/15/23............................. 12,763 7,720 Time Warner, Inc. (Baa1 Moodys) 7.25% due 10/15/17.............................. 8,784 5,040 Walt Disney Co. (The) (Baa1 Moodys) 7.30% due 02/08/05.............................. 5,345 ---------- 86,180 ---------- MEDICAL INSTRUMENTS & SUPPLIES -- 0.1% 1,560 Omnicare, Inc. (Ba2 Moodys) 6.125% due 06/01/13............................. 1,564 ---------- RESEARCH & TESTING FACILITIES -- 0.2% 4,285 Quest Diagnostics, Inc. (Baa3 Moodys) 6.75% due 07/12/06.............................. 4,683 ---------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- RETAIL -- 1.0% $ 8,400 Aramark Services, Inc. (Baa3 Moodys) 7.10% due 12/01/06.............................. $ 9,210 8,400 Fred Meyer, Inc. (Baa3 Moodys) 7.375% due 03/01/05............................. 8,899 5,955 Penney (J.C.) Co., Inc. (Ba3 Moodys) 7.65% due 08/15/16.............................. 6,528 4,965 Staples, Inc. (Baa2 Moodys) 7.125% due 08/15/07............................. 5,463 ---------- 30,100 ---------- SOFTWARE & SERVICES -- 0.1% 3,000 Fiserv, Inc. (Baa2 Moodys) 3.00% due 06/27/08.............................. 2,870 ---------- TRANSPORTATION -- 2.1% +250 Boeing Capital Corp. (A3 Moodys) 6.10% due 03/01/11.............................. 270 ##1,300 Delta Airlines, Inc. (B1 Moodys) 10.50% due 04/30/16............................. 1,028 6,300 Delta Airlines, Inc. (Baa2 Moodys) 7.111% due 09/18/11............................. 6,353 4,500 FedEx Corp. (Baa2 Moodys) 6.625% due 02/12/04............................. 4,523 10,920 Ford Motor Co. (Baa1 Moodys) 6.625% due 10/01/28............................. 10,045 3,650 General Dynamics Corp. (A2 Moodys) 4.50% due 08/15/10.............................. 3,731 +8,000 General Motors Acceptance Corp. (Baa1 Moodys) 7.20% due 01/15/11.............................. 8,796 7,900 Norfolk Southern Corp. (Baa1 Moodys) 7.875% due 02/15/04............................. 7,951 16,779 Northrop Grumman Corp. (Baa3 Moodys) 8.625% due 10/15/04............................. 17,676 4,348 U.S. Airways, Inc. (Baa3 Moodys) 6.76% due 04/15/08.............................. 3,797 ---------- 64,170 ---------- U.S. GOVERNMENT AGENCIES -- 1.5% 2,350 Federal Home Loan Bank (Aaa Moodys) 6.241% due 02/20/07............................. 2,499 +7,300 Federal Home Loan Mortgage Association (Aaa Moodys) 3.125% due 08/25/06............................. 7,382 31,300 Federal Home Loan Mortgage Association (Aaa Moodys) 4.50% due 07/15/13.............................. 30,923 46,200 Tennessee Valley Linked Call Strips (Aaa Moodys) 0.00% due 11/01/25.............................. 10,937 ---------- 51,741 ---------- </Table> The accompanying notes are an integral part of this financial statement. 42 - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- CORPORATE NOTES V -- (CONTINUED) UTILITIES -- 5.1% $ +8,800 Allied Waste North America, Inc. (Ba3 Moodys) 9.25% due 09/01/12.............................. $ 9,988 4,800 Browning-Ferris Industries, Inc. (Ba3 Moodys) 6.375% due 01/15/08............................. 4,764 8,530 Carolina Power & Light Co. (A3 Moodys) 5.125% due 09/15/13............................. 8,637 6,080 Carolina Power & Light Co. (A3 Moodys) 6.125% due 09/15/33............................. 6,249 1,750 Cleveland Electric Illuminating Co. (Aaa Moodys) 7.13% due 07/01/07.............................. 1,967 9,960 Commonwealth Edison Co. (A3 Moodys) 4.70% due 04/15/15.............................. 9,697 4,150 Consolidated Edison Co. of New York (A1 Moodys) 5.875% due 04/01/33............................. 4,205 8,225 Consolidated Natural Gas Co. (A3 Moodys) 5.375% due 11/01/06............................. 8,817 5,575 Consumers Energy Co. (Baa3 Moodys) 6.25% due 09/15/06.............................. 6,020 3,875 Detroit Edison Co. (The) (A3 Moodys) 6.125% due 10/01/10............................. 4,251 6,000 Duke Energy Corp. (A3 Moodys) 3.75% due 03/05/08.............................. 6,047 8,600 FPL Group Capital, Inc. (A2 Moodys) 3.25% due 04/11/06.............................. 8,750 @3,950 International Transmission Co. (Baa1 Moodys) 4.45% due 07/15/13.............................. 3,813 1,475 Kansas Gas & Electric Co. (Ba1 Moodys) 6.20% due 01/15/06.............................. 1,558 780 Kansas Gas & Electric Co. (Ba2 Moodys) 8.29% due 03/29/16.............................. 813 8,740 Kinder Morgan, Inc. (Baa2 Moodys) 6.65% due 03/01/05.............................. 9,231 5,000 Northern States Power Co. (A3 Moodys) 2.875% due 08/01/06............................. 5,019 7,750 Northern States Power Co. (A3 Moodys) 8.00% due 08/28/12.............................. 9,449 @4,150 Northwestern Corp. (Not Rated) 7.30% due 12/01/06.............................. 4,249 7,300 PacifiCorp. (A3 Moodys) 5.45% due 09/15/13.............................. 7,574 3,100 PacifiCorp. (A3 Moodys) 6.12% due 01/15/06.............................. 3,328 4,850 Public Service Co. of Colorado (Baa1 Moodys) 4.875% due 03/01/13............................. 4,848 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- UTILITIES -- (CONTINUED) $ 4,000 Public Service Electric & Gas Co. (Aaa Moodys) 7.00% due 09/01/24.............................. $ 4,119 7,300 Public Service Enterprise GP (A3 Moodys) 5.375% due 09/01/13............................. 7,530 11,050 Southern California Edison (Baa2 Moodys) 8.00% due 02/15/07.............................. 12,638 850 Tennessee Gas Pipeline Co. (B1 Moodys) 7.00% due 10/15/28.............................. 808 500 Tennessee Gas Pipeline Co. (B1 Moodys) 7.50% due 04/01/17.............................. 516 @4,150 Texas-New Mexico Power Co. (Baa3 Moodys) 6.125% due 06/01/08............................. 4,176 1,560 Westar Energy, Inc. (Ba1 Moodys) 8.50% due 07/01/22.............................. 1,642 ---------- 160,703 ---------- Total corporate notes............................. $ 800,552 ========== FOREIGN/YANKEE BONDS & NOTES V -- 11.3% BANKS -- 0.9% $ 4,980 Abbey National PLC (A1 Moodys) 6.69% due 10/17/05.............................. $ 5,386 +20,750 Kreditanstalt fuer Wiederaufbau (Aaa Moodys) 2.60% due 03/15/06.............................. 20,779 ---------- 26,165 ---------- CHEMICALS -- 0.1% @4,370 Rhodia S.A. (Caa1 Moodys) 8.875% due 06/01/11............................. 4,020 ---------- COMMUNICATIONS -- 1.7% 10,200 BT Group PLC (Baa1 Moodys) 8.875% due 12/15/30............................. 13,338 8,400 Deutsche Telekom International Finance BV (Baa3 Moodys) 8.25% due 06/15/05.............................. 9,112 4,725 Deutsche Telekom International Finance BV (Baa3 Moodys) 8.75% due 06/15/30.............................. 6,036 @@L3,295 KPNQwest N.V. (Default) 8.125% due 06/01/09....... -- ##L1,765 Marconi Corp., PLC (Default) 10.00% due 10/31/08........................................ 1,853 ##L4,070 Marconi Corp., PLC (Default) 8.00% due 04/30/08... 4,131 1,925 Nortel Networks Corp. (B3 Moodys) 4.25% due 09/01/08.............................. 1,822 2,150 Rogers Cable, Inc. (Ba2 Moodys) 6.25% due 06/15/13.............................. 2,166 </Table> The accompanying notes are an integral part of this financial statement. 43 HARTFORD BOND HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNTI VALUE # - ---------- ---------- FOREIGN/YANKEE BONDS & NOTES V -- (CONTINUED) COMMUNICATIONS -- (CONTINUED) 7,500 TELUS Corp. (Ba1 Moodys) 8.00% due 06/01/11.............................. $ 8,770 4,990 Telefonica Europe BV (A3 Moodys) 7.35% due 09/15/05.............................. 5,415 ---------- 52,643 ---------- ENERGY & SERVICES -- 1.5% 2,130 Burlington Resources Finance Co. (Baa1 Moodys) 6.50% due 12/01/11.............................. 2,379 9,540 Burlington Resources Finance Co. (Baa1 Moodys) 6.68% due 02/15/11.............................. 10,722 3,470 EnCana Corp. (Baa1 Moodys) 6.30% due 11/01/11.............................. 3,836 9,000 EnCana Corp. (Baa1 Moodys) 7.20% due 11/01/31.............................. 10,476 6,000 Pemex Project Funding Master Trust Co. (Baa1 Moodys) 7.875% due 02/01/09............................. 6,774 4,635 Petro-Canada (Baa2 Moodys) 5.35% due 07/15/33.............................. 4,143 6,400 Repsol YPF S.A. (Baa2 Moodys) 7.45% due 07/15/05.............................. 6,881 ---------- 45,211 ---------- FINANCIAL SERVICES -- 0.5% 4,460 Abbey National PLC (A1 Moodys) 6.70% due 06/29/49.............................. 4,931 6,000 Pemex Finance Ltd. (Baa1 Moodys) 9.69% due 08/15/09.............................. 7,128 4,000 UFJ Finance Aruba AEC (Baa1 Moodys) 6.75% due 07/15/13.............................. 4,266 ---------- 16,325 ---------- FOOD, BEVERAGE & TOBACCO -- 0.4% 11,500 Cadbury Schweppes Finance PLC (Baa2 Moodys) 5.00% due 06/26/07.............................. 12,046 ---------- FOREIGN GOVERNMENTS -- 4.2% EUR 55,325 Bundesobligation (Aaa Moodys) 3.50% due 10/10/08.............................. 69,777 +9,200 Mexico Government International Bond (Baa2 Moodys) 4.625% due 10/08/08............................. 9,315 AUD 44,520 Queensland Treasury Corp. (Aaa Moodys) 6.50% due 06/14/05.............................. 33,907 5,285 Republic of Panama (Ba1 Moodys) 9.625% due 02/08/11............................. 6,104 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- FOREIGN GOVERNMENTS -- (CONTINUED) $ 3,875 Republic of Philippines (Ba1 Moodys) 10.625% due 03/16/25............................ $ 4,311 5,230 Russia Government International Bond (Baa3 Moodys) 8.25% due 03/31/30.............................. 5,845 ---------- 129,259 ---------- FOREST & PAPER PRODUCTS -- 0.1% 2,750 Abitibi Consolidated, Inc. (Ba1 Moodys) 8.30% due 08/01/05.............................. 2,910 250 Abitibi-Consolidated, Inc. (Ba1 Moodys) 8.85% due 08/01/30.............................. 270 ---------- 3,180 ---------- MACHINERY -- 0.2% @5,550 Fondo LatinoAmericano De Reservas (Aa2 Moodys) 3.00% due 08/01/06.............................. 5,515 ---------- MEDIA & ENTERTAINMENT -- 0.1% 3,660 Shaw Communications, Inc. (Ba2 Moodys) 8.25% due 04/11/10.............................. 4,145 ---------- METALS, MINERALS & MINING -- 0.7% 7,200 Inco Ltd. (Baa3 Moodys) 7.75% due 05/15/12.............................. 8,399 @4,200 Placer Dome, Inc. (Baa2 Moodys) 6.45% due 10/15/35.............................. 4,296 7,300 Placer Dome, Inc. (Baa2 Moodys) 7.125% due 06/15/07............................. 8,130 ---------- 20,825 ---------- TRANSPORTATION -- 0.9% @10,500 Hutchison Whampoa International Ltd. (A3 Moodys) 6.25% due 01/24/14.............................. 10,662 @15,450 Hutchison Whampoa International Ltd. (A3 Moodys) 7.45% due 11/24/33.............................. 16,092 ---------- 26,754 ---------- Total foreign/yankee bonds & notes................ $ 346,088 ========== MUNICIPAL BONDS V -- 0.5% $ 15,200 Illinois State (Aa3 Moodys) 5.10% due 06/01/33.............................. $ 13,976 ---------- Total municipal bonds............................. $ 13,976 ========== <Caption> SHARES - ---------- PREFERRED STOCKS -- 0.1% CONSUMER NON-DURABLES -- 0.1% @53 Xerox Corp........................................ $ 4,259 ---------- Total preferred stocks............................ $ 4,259 ========== </Table> The accompanying notes are an integral part of this financial statement. 44 - -------------------------------------------------------------------------------- <Table> WxPrincipalMarketAMOUNT VALUE # - ------------ ----------- U.S. TREASURIES & FEDERAL AGENCIES -- 50.0% FEDERAL HOME LOAN MORTGAGE ASSOCIATION -- 1.0% $ 29,818 5.50% due 03/01/33 -- 06/01/33.................... $ 30,193 ----------- FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 20.1% 143,196 5.00% due 04/01/18 -- 07/01/33.................... 144,428 198,207 5.50% due 10/01/32 -- 12/01/33.................... 200,888 206,463 6.00% due 07/01/12 -- 12/01/33.................... 213,767 251 6.30% due 04/01/08................................ 275 48,654 6.50% due 11/01/14 -- 01/01/33.................... 50,901 5,618 7.50% due 10/01/22 -- 09/01/31.................... 6,004 ----------- 616,263 ----------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 6.6% 86,688 5.50% due 11/15/32 -- 08/15/33.................... 88,222 24,877 6.00% due 01/15/32 -- 10/15/32.................... 25,881 83,698 6.50% due 02/15/28 -- 06/15/32.................... 88,283 336 7.00% due 06/20/30................................ 357 ----------- 202,743 ----------- U.S. TREASURY BONDS -- 4.6% +123,100 6.25% due 08/15/23................................ 140,310 U.S. TREASURY NOTES -- 17.7% +139,675 1.875% due 11/30/05............................... 139,937 +1,970 3.125% due 09/15/08............................... 1,969 +93,090 3.25% due 08/15/08................................ 93,657 +87,205 3.375% due 12/15/08............................... 87,798 +580 4.25% due 11/15/13................................ 579 +57,675 4.375% due 05/15/07............................... 61,075 +146,925 5.00% due 02/15/11................................ 157,789 ----------- 542,804 ----------- Total U.S. treasuries & federal agencies.......... $ 1,532,313 =========== SHARES - ------------ WARRANTS -- 0.0% COMMUNICATIONS -- 0.0% *##@@1 Iridium World Communications, Inc................. $ -- ----------- Total warrants.................................... $ -- =========== SHORT-TERM SECURITIES -- 27.2% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 24.5% 750,359 State Street Navigator Securities Lending Prime Portfolio....................................... $ 750,359 PRINCIPAL AMOUNT - ------------ REPURCHASE AGREEMENTS -- 2.7% $ 82,929 Joint Repurchase Agreement (See Note 2(d)) 0.84% due 01/02/04.................................... 82,929 ----------- Total short-term securities....................... $ 833,288 =========== </Table> <Table> <Caption> MARKET VALUE # ---------- DIVERSIFICATION OF NET ASSETS: Total collateralized mortgage obligations (cost $233,723).......... 7.6% $ 233,543 Total common stocks (cost $7,719)...... 0.4 13,671 Total convertible bonds (cost $7,441).............................. 0.3 7,884 Total corporate notes (cost $767,246)............................ 26.1 800,552 Total foreign/yankee bonds & notes (cost $332,285)...................... 11.3 346,088 Total municipal bonds (cost $15,200)... 0.5 13,976 Total preferred stocks (cost $2,670)... 0.1 4,259 Total U.S. treasuries & federal agencies (cost $1,526,969)........... 50.0 1,532,313 Total warrants (cost $97).............. 0.0 -- Total short-term securities (cost $833,288)............................ 27.2 833,288 ----- ---------- Total investment in securities (total cost $3,726,638) -- including $735,598 of securities loaned (See Note 2(i))........................... 123.5 3,785,574 Cash, receivables and other assets..... 2.0 62,799 Payable for securities purchased....... (1.0) (30,360) Securities lending collateral payable to brokers (See Note 2(i))........... (24.5) (750,359) Other liabilities...................... (0.0) (543) ----- ---------- Net assets............................. 100.0% $3,067,111 ===== ========== </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 5,000,000 shares authorized; 249,298 shares outstanding....... $ 249 Paid in capital................................ 2,790,919 Accumulated net investment income.............. 149,925 Accumulated net realized gain on investments... 66,843 Unrealized appreciation on investments......... 58,936 Unrealized appreciation on forward foreign currency contracts (See Note 2(g))@@@........ 4 Unrealized appreciation on other assets and liabilities in foreign currencies............ 235 ---------- Net assets..................................... $3,067,111 ========== </Table> <Table> Class IA Net asset value per share ($2,332,343 / 189,300 shares outstanding) (4,400,000 shares authorized)................................... $12.32 ====== Class IB Net asset value per share ($734,768 / 59,998 shares outstanding) (600,000 shares authorized)................................... $12.25 ====== </Table> The accompanying notes are an integral part of this financial statement. 45 HARTFORD BOND HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 11.7% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). @ Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2003, the market value of these securities amounted to $91,188 or 3.0% of net assets. (See Note 2(m)). ## Illiquid Securities. At December 31, 2003, the market value of these securities amounted to $10,927 or 0.4% of net assets (See Note 2(m)). @@ Due to the presentation of the financial statements in thousands, the number of shares and/or market value round to zero. I All principal amounts are in U.S. dollars unless otherwise indicated. AUD -- Australian Dollar EUR -- Euro V The bond ratings are unaudited. L Debt securities are in default due to bankruptcy. </Table> @@@FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING AT DECEMBER 31, 2003 <Table> <Caption> UNREALIZED CONTRACT DELIVERY APPRECIATION DESCRIPTION MARKET VALUE AMOUNT DATE (DEPRECIATION) - ----------- ------------ -------- -------- -------------- British Pound (Sell) $716 $720 1/2/2004 $4 == </Table> The accompanying notes are an integral part of this financial statement. 46 HARTFORD CAPITAL APPRECIATION HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - ------------ ----------- COMMON STOCKS -- 95.8% BANKS -- 10.6% +4,411 Bank One Corp. ................................... $ 201,088 5,762 Citigroup, Inc. .................................. 279,683 1,941 Countrywide Credit Industries, Inc. .............. 147,240 2,417 Federal Home Loan Mortgage Association............ 140,977 2,350 Fleet Boston Financial Corp. ..................... 102,578 1,000 Golden West Financial Corp. ...................... 103,190 -2,000 UBS AG............................................ 136,883 ----------- 1,111,639 ----------- BUSINESS SERVICES -- 1.0% 2,200 Manpower, Inc. ................................... 103,576 ----------- CHEMICALS -- 0.8% -1,311 Shin-Etsu Chemical Co., Ltd. ..................... 53,839 -7,358 Sumitomo Chemical Co., Ltd. ...................... 30,358 ----------- 84,197 ----------- COMMUNICATIONS -- 9.6% +3,935 America Movil S.A. de C.V., ADR................... 107,594 *14,692 MTN Group Ltd. ................................... 62,619 9,572 Motorola, Inc. ................................... 134,671 *+1,430 NTL, Inc. ........................................ 99,736 *16,500 Nextel Communications, Inc., Class A.............. 462,987 *19,565 Nortel Networks Corp. ............................ 82,758 +-893 Telenor ASA....................................... 5,854 5,050 Telkom S.A., Ltd. ................................ 52,544 ----------- 1,008,763 ----------- COMPUTERS & OFFICE EQUIPMENT -- 5.4% 2,513 3M Co. ........................................... 213,680 *5,000 Cisco Systems, Inc. .............................. 121,450 -16,913 HON HAI Precision Industry........................ 66,443 1,746 International Business Machines Corp. ............ 161,829 ----------- 563,402 ----------- CONSUMER DURABLES -- 1.0% *+10,000 Corning, Inc. .................................... 104,300 ----------- CONSUMER NON-DURABLES -- 6.7% +1,500 Cardinal Health, Inc. ............................ 91,740 4,450 McKesson Corp. ................................... 143,109 *4,430 Medco Health Solutions, Inc. ..................... 150,566 +10,255 Tyco International Ltd. .......................... 271,752 *+3,541 Xerox Corp. ...................................... 48,859 ----------- 706,026 ----------- DRUGS -- 3.6% *3,622 Biovail Corp. .................................... 77,841 *2,272 Forest Laboratories, Inc. ........................ 140,391 *2,804 IVAX Corp. ....................................... 66,948 *2,624 King Pharmaceuticals, Inc. ....................... 40,042 1,155 Merck & Co., Inc. ................................ 53,366 ----------- 378,588 ----------- ELECTRONICS -- 3.1% 1,149 Emerson Electric Co. ............................. 74,424 -652 Samsung Electronics............................... 246,880 ----------- 321,304 ----------- </Table> <Table> <Caption> MARKET SHARES VALUE # - ------------ ----------- ENERGY & SERVICES -- 9.9% 1,668 Anadarko Petroleum Corp. ......................... $ 85,069 1,856 Burlington Resources, Inc. ....................... 102,763 @-o3,371 CONSOL Energy, Inc., PIPE......................... 78,585 +2,122 China Petroleum & Chemical Corp., H Shares, ADR... 94,242 +3,500 Halliburton Co. .................................. 91,000 1,330 Peabody Energy Corp. ............................. 55,478 5,029 Petroleo Brasileiro S.A., ADR..................... 134,062 +9,500 Sasol Ltd., ADR................................... 137,655 *491 Transocean, Inc. ................................. 11,789 1,600 Valero Energy Corp. .............................. 74,135 6,033 XTO Energy, Inc. ................................. 170,733 ----------- 1,035,511 ----------- FINANCIAL SERVICES -- 1.1% -3,885 Amvescap PLC...................................... 28,396 -297 Orix Corp. ....................................... 24,633 * @-o2,186 Spirit Finance Corp. ............................. 21,857 7,585 Standard Bank Group Ltd. ......................... 44,520 ----------- 119,406 ----------- FOOD, BEVERAGE & TOBACCO -- 2.8% 2,854 Altria Group, Inc. ............................... 155,326 4,208 Bunge Ltd. ....................................... 138,531 ----------- 293,857 ----------- FOREST & PAPER PRODUCTS -- 3.3% 3,021 Kimberly-Clark Corp. ............................. 178,499 *8,924 Smurfit-Stone Container Corp. .................... 165,726 ----------- 344,225 ----------- HEALTH SERVICES -- 1.4% 3,444 HCA, Inc. ........................................ 147,959 ----------- INSURANCE -- 5.4% 6,500 Ace Ltd. ......................................... 269,230 548 Ambac Financial Group, Inc. ...................... 38,040 374 American International Group, Inc. ............... 24,803 1,853 Marsh & McLennan Cos., Inc. ...................... 88,721 +3,664 St. Paul Cos., Inc. (The)......................... 145,289 ----------- 566,083 ----------- MACHINERY -- 1.9% 2,272 Deere (John) & Co. ............................... 147,813 +1,942 Pall Corp. ....................................... 52,098 ----------- 199,911 ----------- MEDIA & ENTERTAINMENT -- 4.2% *3,605 Comcast Corp., Special Class A ................... 112,774 *+3,053 Interactive Data Corp. ........................... 103,588 *5,000 Liberty Media Corp., Class A...................... 59,450 *9,196 Time Warner, Inc. ................................ 165,440 ----------- 441,252 ----------- MEDICAL INSTRUMENTS & SUPPLIES -- 1.3% 2,235 Guidant Corp. .................................... 134,535 ----------- </Table> The accompanying notes are an integral part of this financial statement. 47 HARTFORD CAPITAL APPRECIATION HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - ------------ ----------- COMMON STOCKS -- (CONTINUED) METALS, MINERALS & MINING -- 8.8% +2,800 Alcoa, Inc. ...................................... $ 106,400 +555 AngloGold Ltd., ADR............................... 25,900 +2,049 Companhia Vale do Rio Doce ADR.................... 119,881 2,238 Engelhard Corp. .................................. 67,016 +3,439 Falconbridge Ltd. ................................ 83,462 621 Freeport-McMoRan Copper & Gold, Inc., Class B..... 26,180 *+1,552 International Steel Group, Inc. .................. 60,434 -6,185 Rio Tinto PLC..................................... 170,222 +4,351 Teck Cominco Ltd. ................................ 73,833 2,680 United States Steel Corp. ........................ 93,836 -5,183 WMC Ltd. ......................................... 25,699 *-17,247 WMC Resources Ltd. ............................... 73,430 ----------- 926,293 ----------- REAL ESTATE INVESTMENT TRUST -- 0.6% 1,705 iStar Financial, Inc. ............................ 66,332 ----------- RETAIL -- 4.7% +7,724 Gap, Inc. (The)................................... 179,267 *+1,830 Neiman Marcus Group, Inc. ........................ 98,227 4,543 Penney (J.C.) Co., Inc. .......................... 119,380 4,128 TJX Cos., Inc. (The).............................. 91,011 ----------- 487,885 ----------- SOFTWARE & SERVICES -- 1.8% *2,257 Computer Sciences Corp. .......................... 99,809 *5,360 VeriSign, Inc. ................................... 87,375 ----------- 187,184 ----------- TRANSPORTATION -- 4.2% 2,176 CSX Corp. ........................................ 78,213 2,343 Honeywell International, Inc. .................... 78,316 3,264 Sabre Holdings Corp. ............................. 70,461 -6,182 Toyota Motor Corp. ............................... 211,444 ----------- 438,434 ----------- UTILITIES -- 2.6% 900 FPL Group, Inc. .................................. 58,878 93 Norsk Hydro ADR................................... 5,760 +2,898 TXU Corp. ........................................ 68,741 4,909 Waste Management, Inc. ........................... 145,306 ----------- 278,685 ----------- Total common stocks............................... $10,049,347 =========== WARRANTS -- 0.3% COMMUNICATIONS -- 0.3% *4,983 Icici Bank Ltd. .................................. $ 32,289 ----------- Total warrants.................................... $ 32,289 =========== </Table> <Table> <Caption> MARKET SHARES VALUE # - ------------ ----------- SHORT-TERM SECURITIES -- 8.0% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 4.7% 1 Federated Prime Cash Obligation Fund.............. $ 1 12 Federated Prime Obligation Fund................... 12 @@-- Provident Temp Fund............................... -- 144,661 Provident TempCash Fund........................... 144,661 10,372 Reserve Primary Fund.............................. 10,372 11 Scudder Money Market Fund......................... 11 341,460 UBS Private Money Market Fund..................... 341,460 2 UBS Select Money Market Fund...................... 2 ----------- 496,519 ----------- <Caption> PRINCIPAL AMOUNT - ------------ REPURCHASE AGREEMENTS -- 3.3% $ 341,239 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... 341,239 ----------- Total short-term securities....................... $ 837,758 =========== </Table> <Table> <Caption> DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $8,001,893).... 95.8% $ 10,049,347 Total warrants (cost $20,287)............ 0.3 32,289 Total short-term securities (cost $837,758).............................. 8.0 837,758 ----- ------------ Total investment in securities (total cost $8,859,938) -- including $478,374 of securities loaned (See Note 2(i))... 104.1 10,919,394 Cash, receivables and other assets....... 1.5 160,247 Payable for securities purchased......... (0.9) (85,848) Payable for Fund shares redeemed......... (0.0) (4,259) Securities lending collateral payable to brokers (See Note 2(i))................ (4.7) (496,519) Other liabilities........................ (0.0) (867) ----- ------------ Net assets............................... 100.0% $ 10,492,148 ===== ============ </Table> <Table> <Caption> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 5,000,000 shares authorized; 233,750 shares outstanding.................................... $ 234 Paid in capital.................................. 9,727,732 Accumulated net investment income................ 2,152 Accumulated net realized loss on investments..... (1,297,379) Unrealized appreciation on investments........... 2,059,456 Unrealized depreciation on forward foreign currency contracts (See Note 2(g)) @@@......... (81) Unrealized appreciation on other assets and liabilities in foreign currencies.............. 34 ----------- Net assets....................................... $10,492,148 =========== </Table> <Table> <Caption> Class IA Net asset value per share ($8,912,749 / 198,466 shares outstanding) (4,250,000 shares authorized)....................................... $44.91 ====== Class IB Net asset value per share ($1,579,399 / 35,284 shares outstanding) (750,000 shares authorized)... $44.76 ====== </Table> The accompanying notes are an integral part of this financial statement. 48 - -------------------------------------------------------------------------------- <Table> <Caption> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 21.1% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). @ Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2003, the market value of these securities amounted to $100,442 or 1.0% of net assets (See Note 2(m)). - Security valued in good faith at fair value by, or under the direction of, the Funds' Board of Directors. The aggregate value of these securities as of December 31, 2003 was $1,174,523 which represents 11.2% of total net assets. o Private placement. PIPE = Private Investment Public Equity @@ Due to the presentation of the financial statements in thousands, the number of shares and/or Market Value round to zero. </Table> @@@FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING AT DECEMBER 31, 2003 <Table> <Caption> UNREALIZED CONTRACT DELIVERY APPRECIATION DESCRIPTION MARKET VALUE AMOUNT DATE (DEPRECIATION) - ----------- ------------ -------- -------- -------------- Australian Dollar (Buy) $ 884 $ 882 1/6/2004 $ 2 Australian Dollar (Buy) 907 895 1/2/2004 12 British Pound (Buy) 934 925 1/2/2004 9 British Pound (Buy) 4,043 4,019 1/5/2004 24 Canadian Dollars (Buy) 177 177 1/6/2004 -- Canadian Dollars (Buy) 2,435 2,433 1/5/2004 2 Canadian Dollars (Buy) 2,774 2,739 1/2/2004 35 Japanese Yen (Buy) 3,389 3,395 1/7/2004 (6) Japanese Yen (Buy) 4,720 4,728 1/5/2004 (8) Japanese Yen (Buy) 6,743 6,758 1/6/2004 (15) Norwegian Krone (Sell) 2,572 2,532 1/2/2004 (40) Norwegian Krone (Sell) 5,665 5,591 1/5/2004 (74) Norwegian Krone (Sell) 8,778 8,691 1/6/2004 (87) South African Rands (Buy) 98 97 1/6/2004 1 South African Rands (Buy) 234 229 1/5/2004 5 South African Rands (Buy) 279 281 1/7/2004 (2) South African Rands (Buy) 333 337 1/8/2004 (4) South African Rands (Buy) 1,967 1,902 1/2/2004 65 ---- $(81) ==== </Table> The accompanying notes are an integral part of this financial statement. 49 HARTFORD DISCIPLINED EQUITY HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- --------- COMMON STOCKS -- 95.7% BANKS -- 13.5% 300 Bank One Corp. ................................... $ 13,695 270 Bank of America Corp. ............................ 21,676 71 Capital One Financial Corp. ...................... 4,376 710 Citigroup, Inc. .................................. 34,461 197 Countrywide Credit Industries, Inc. .............. 14,948 110 Federal National Mortgage Association............. 6,421 244 Federal National Mortgage Association............. 18,307 --------- 113,884 --------- BUSINESS SERVICES -- 1.5% *235 Cendant Corp. .................................... 5,229 89 Omnicom Group, Inc. .............................. 7,751 --------- 12,980 --------- CHEMICALS -- 1.4% 132 Avery Dennison Corp. ............................. 7,378 113 Dow Chemical Co. (The)............................ 4,689 --------- 12,067 --------- COMMUNICATIONS -- 3.8% 347 AT&T Corp. ....................................... 7,038 713 Motorola, Inc. ................................... 10,036 *406 Nextel Communications, Inc., Class A.............. 11,387 144 SBC Communications, Inc. ......................... 3,741 --------- 32,202 --------- COMPUTERS & OFFICE EQUIPMENT -- 5.9% *932 Cisco Systems, Inc. .............................. 22,642 *278 Dell, Inc. ....................................... 9,450 187 International Business Machines Corp. ............ 17,359 --------- 49,451 --------- CONSUMER DURABLES -- 0.6% 45 Johnson Controls, Inc. ........................... 5,260 --------- CONSUMER NON-DURABLES -- 5.4% 449 Gillette Co. (The)................................ 16,481 120 McKesson Corp. ................................... 3,872 *294 Medco Health Solutions, Inc. ..................... 9,996 102 Procter & Gamble Co. (The)........................ 10,208 166 Supervalu. Inc. .................................. 4,737 --------- 45,294 --------- DRUGS -- 8.3% 238 Abbott Laboratories............................... 11,105 *61 Cephalon, Inc. ................................... 2,929 150 Eli Lilly & Co. .................................. 10,531 *200 Genzyme Corp. .................................... 9,873 *468 King Pharmaceuticals, Inc. ....................... 7,134 78 Merck & Co., Inc. ................................ 3,585 421 Pfizer, Inc. ..................................... 14,887 558 Schering-Plough Corp. ............................ 9,705 --------- 69,749 --------- </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- --------- ELECTRONICS -- 5.2% *342 Altera Corp. ..................................... $ 7,772 403 General Electric Co. ............................. 12,470 84 Intel Corp. ...................................... 2,702 *168 National Semiconductor Corp. ..................... 6,629 356 Texas Instruments, Inc. .......................... 10,468 *90 Xilinx, Inc. ..................................... 3,498 --------- 43,539 --------- ENERGY & SERVICES -- 4.2% 54 ChevronTexaco Corp. .............................. 4,631 147 Conoco, Inc. ..................................... 9,665 324 Exxon Mobil Corp. ................................ 13,264 214 Unocal Corp. ..................................... 7,863 --------- 35,423 --------- FINANCIAL SERVICES -- 2.7% 99 Franklin Resources, Inc. ......................... 5,175 38 Goldman Sachs Group, Inc. (The)................... 3,762 239 Merrill Lynch & Co., Inc. ........................ 14,041 --------- 22,978 --------- FOOD, BEVERAGE & TOBACCO -- 4.7% 391 Altria Group, Inc. ............................... 21,272 355 Coca-Cola Co. (The)............................... 18,011 --------- 39,283 --------- FOREST & PAPER PRODUCTS -- 3.3% 124 International Paper Co. .......................... 5,346 145 Kimberly-Clark Corp. ............................. 8,574 213 Weyerhaeuser Co. ................................. 13,606 --------- 27,526 --------- INSURANCE -- 4.7% 72 Ambac Financial Group, Inc. ...................... 5,006 *54 Anthem, Inc. ..................................... 4,058 143 MBIA, Inc. ....................................... 8,488 318 St. Paul Cos., Inc. (The)......................... 12,613 119 XL Capital Ltd., Class A.......................... 9,236 --------- 39,401 --------- MACHINERY -- 0.8% 163 Graco, Inc. ...................................... 6,528 --------- MEDIA & ENTERTAINMENT -- 4.5% *268 Comcast Corp. .................................... 8,818 *237 Comcast Corp. .................................... 7,398 88 Gannett Co., Inc. ................................ 7,873 *774 Time Warner, Inc. ................................ 13,919 --------- 38,008 --------- MEDICAL INSTRUMENTS & SUPPLIES -- 1.7% 240 Guidant Corp. .................................... 14,466 --------- METALS, MINERALS & MINING -- 0.8% 95 Fortune Brands, Inc. ............................. 6,763 --------- RETAIL -- 5.0% 166 CVS Corp. ........................................ 6,010 282 Dollar General Corp. ............................. 5,917 </Table> The accompanying notes are an integral part of this financial statement. 50 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- --------- COMMON STOCKS -- (CONTINUED) RETAIL -- (CONTINUED) 199 Federated Department Stores, Inc. ................ $ 9,388 355 Gap, Inc. (The)................................... 8,240 140 Lowe's Cos., Inc. ................................ 7,782 88 Wal-Mart Stores, Inc. ............................ 4,645 --------- 41,982 --------- RUBBER & PLASTICS PRODUCTS -- 0.6% 78 NIKE, Inc., Class B............................... 5,312 --------- SOFTWARE & SERVICES -- 7.7% 90 Adobe Systems, Inc. .............................. 3,525 404 First Data Corp. ................................. 16,582 170 IMS Health, Inc. ................................. 4,214 *62 Intuit, Inc. ..................................... 3,275 1,348 Microsoft Corp. .................................. 37,116 --------- 64,712 --------- TRANSPORTATION -- 6.0% 190 CSX Corp. ........................................ 6,811 134 Dana Corp. ....................................... 2,450 84 FedEx Corp. ...................................... 5,677 173 General Dynamics Corp. ........................... 15,674 25 General Motors Corp. ............................. 1,340 196 United Technologies Corp. ........................ 18,565 --------- 50,517 --------- UTILITIES -- 3.4% 67 Ameren Corp. ..................................... 3,087 *325 Citizens Communications Co. ...................... 4,030 216 Exelon Corp. ..................................... 14,353 129 TXU Corp. ........................................ 3,069 118 Waste Management, Inc. ........................... 3,493 28,032 --------- Total common stocks............................... $ 805,357 ========= <Caption> PRINCIPAL AMOUNT - --------- SHORT-TERM SECURITIES -- 4.5% REPURCHASE AGREEMENTS -- 4.5% $37,851 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... $ 37,851 --------- Total short-term securities....................... $ 37,851 ========= </Table> <Table> <Caption> MARKET VALUE # --------- DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $704,872)..... 95.7% $ 805,357 Total short-term securities (cost $37,851).............................. 4.5 37,851 ----- --------- Total investment in securities (total cost $742,723)........................ 100.2 843,208 Cash, receivables and other assets...... 0.4 3,308 Payable for securities purchased........ (0.6) (4,774) Other liabilities....................... 0.0 (44) ----- --------- Net assets.............................. 100.0% $ 841,698 ===== ========= </Table> <Table> <Caption> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 3,500,000 shares authorized; 75,213 shares outstanding................................... $ 75 Paid in capital................................. 920,783 Accumulated net investment income............... 422 Accumulated net realized loss on investments.... (181,333) Unrealized appreciation on investments.......... 100,485 Unrealized appreciation on futures contracts ++.................................. 1,266 --------- Net assets...................................... $ 841,698 ========= </Table> <Table> <Caption> Class IA Net asset value per share ($685,888 / 61,224 shares outstanding) (3,300,000 shares authorized)................................... $11.20 ====== Class IB Net asset value per share ($155,810 / 13,989 shares outstanding) (200,000 shares authorized)................................... $11.14 ====== </Table> <Table> <Caption> # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. ++ The Fund had 108 Standard & Poor's 500 March 2004 Futures contracts open as of December 31, 2003. These contracts had a value of $29,986 as of December 31, 2003 and were collateralized by $1,728 of cash. </Table> The accompanying notes are an integral part of this financial statement. 51 HARTFORD DIVIDEND AND GROWTH HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- COMMON STOCKS -- 95.6% BANKS -- 9.6% 1,611 Bank One Corp. ................................... $ 73,450 41 Bank of America Corp. ............................ 3,298 2,887 Citigroup, Inc. .................................. 140,128 587 Comerica, Inc. ................................... 32,890 1,033 Federal Home Loan Mortgage Association............ 60,262 +421 HSBC Holdings PLC, ADR............................ 33,162 1,361 Synovus Financial Corp. .......................... 39,349 592 U.S. Bancorp...................................... 17,621 1,394 Wachovia Corp. ................................... 64,928 ---------- 465,088 ---------- BUSINESS SERVICES -- 0.6% 325 Omnicom Group, Inc. .............................. 28,391 ---------- CHEMICALS -- 4.4% 751 Avery Dennison Corp. ............................. 42,043 758 Dow Chemical Co. (The)............................ 31,489 2,159 du Pont (E.I.) de Nemours & Co. .................. 99,073 979 Rohm & Haas Co. .................................. 41,809 ---------- 214,414 ---------- COMMUNICATIONS -- 5.8% +1,820 AT&T Corp. ....................................... 36,938 2,220 BellSouth Corp. .................................. 62,826 3,018 Motorola, Inc. ................................... 42,467 991 Sony Corp., ADR................................... 34,358 3,003 Verizon Communications, Inc. ..................... 105,336 ---------- 281,925 ---------- COMPUTERS & OFFICE EQUIPMENT -- 4.5% *1,421 Apple Computer, Inc. ............................. 30,356 1,976 Hewlett-Packard Co. .............................. 45,380 1,017 International Business Machines Corp. ............ 94,209 1,225 Pitney Bowes, Inc. ............................... 49,739 ---------- 219,684 ---------- CONSUMER DURABLES -- 0.5% 519 Grainger (W.W.), Inc. ............................ 24,586 ---------- CONSUMER NON-DURABLES -- 3.7% 693 Cardinal Health, Inc. ............................ 42,378 1,157 Gillette Co. (The)................................ 42,504 1,514 Mattel, Inc. ..................................... 29,177 570 McKesson Corp. ................................... 18,318 *+3,485 Xerox Corp. ...................................... 48,092 ---------- 180,469 ---------- DRUGS -- 7.2% 1,635 Abbott Laboratories............................... 76,177 +653 AstraZeneca PLC, ADR.............................. 31,597 +634 Aventis S.A., ADR................................. 41,996 737 Eli Lilly & Co. .................................. 51,826 1,504 Pfizer, Inc. ..................................... 53,152 3,521 Schering-Plough Corp. ............................ 61,225 712 Wyeth............................................. 30,207 ---------- 346,180 ---------- </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- ELECTRONICS -- 2.2% 642 Emerson Electric Co. ............................. $ 41,595 691 General Electric Co. ............................. 21,394 1,409 Texas Instruments, Inc. .......................... 41,399 ---------- 104,388 ---------- ENERGY & SERVICES -- 11.5% 494 Anadarko Petroleum Corp. ......................... 25,219 +1,799 BP Amoco PLC, ADR................................. 88,786 954 ChevronTexaco Corp. .............................. 82,451 231 Conoco, Inc. ..................................... 15,169 1,650 EnCana Corp. ..................................... 65,062 2,824 Exxon Mobil Corp. ................................ 115,774 1,112 Royal Dutch Petroleum Co., N.V., NY Reg Shares.... 58,268 +746 Schlumberger Ltd. ................................ 40,838 710 TotalFinaElf S.A., ADR............................ 65,654 ---------- 557,221 ---------- FINANCIAL SERVICES -- 2.7% 968 Franklin Resources, Inc. ......................... 50,378 723 Merrill Lynch & Co., Inc. ........................ 42,427 659 Morgan Stanley Dean Witter & Co. ................. 38,119 ---------- 130,924 ---------- FOOD, BEVERAGE & TOBACCO -- 4.5% +1,162 Altria Group, Inc. ............................... 63,220 805 General Mills, Inc. .............................. 36,476 1,032 Kraft Foods, Inc. ................................ 33,261 886 PepsiCo, Inc. .................................... 41,319 1,880 Sara Lee Corp. ................................... 40,819 ---------- 215,095 ---------- FOREST & PAPER PRODUCTS -- 5.0% 1,604 Abitibi-Consolidated, Inc. ....................... 13,012 454 Bowater, Inc. .................................... 21,011 819 International Paper Co. .......................... 35,290 820 Kimberly-Clark Corp. ............................. 48,442 638 Temple-Inland, Inc. .............................. 39,952 1,296 Weyerhaeuser Co. ................................. 82,963 ---------- 240,670 ---------- INSURANCE -- 6.1% 576 Ace Ltd. ......................................... 23,874 1,117 American International Group, Inc. ............... 74,055 760 MBIA, Inc. ....................................... 45,009 804 Marsh & McLennan Cos., Inc. ...................... 38,499 +1,009 St. Paul Cos., Inc. (The)......................... 40,019 963 XL Capital Ltd., Class A.......................... 74,642 ---------- 296,098 ---------- MACHINERY -- 2.4% 710 Caterpillar, Inc. ................................ 58,919 998 Parker-Hannifin Corp. ............................ 59,393 ---------- 118,312 ---------- MEDIA & ENTERTAINMENT -- 3.6% *1,024 Comcast Corp., Class A ........................... 33,647 *897 Comcast Corp., Special Class A ................... 28,061 </Table> The accompanying notes are an integral part of this financial statement. 52 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- COMMON STOCKS -- (CONTINUED) MEDIA & ENTERTAINMENT -- (CONTINUED) 539 Gannett Co., Inc. ................................ $ 48,084 379 Harrah's Entertainment, Inc. ..................... 18,863 *2,635 Time Warner, Inc. ................................ 47,396 ---------- 176,051 ---------- MEDICAL INSTRUMENTS & SUPPLIES -- 1.3% 1,324 Baxter International, Inc. ....................... 40,405 591 Becton, Dickinson & Co. .......................... 24,330 ---------- 64,735 ---------- METALS, MINERALS & MINING -- 2.9% 741 Alcan, Inc. ...................................... 34,799 2,160 Alcoa, Inc. ...................................... 82,076 322 Fortune Brands, Inc. ............................. 22,984 ---------- 139,859 ---------- RETAIL -- 1.9% 2,135 McDonald's Corp. ................................. 53,012 1,672 TJX Cos., Inc. (The).............................. 36,861 ---------- 89,873 ---------- SOFTWARE & SERVICES -- 1.0% 1,722 Microsoft Corp. .................................. 47,424 ---------- TRANSPORTATION -- 8.2% 454 Boeing Co. (The).................................. 19,140 870 CP Railway Ltd. .................................. 24,489 1,803 CSX Corp. ........................................ 64,811 +1,152 Delta Airlines, Inc. ............................. 13,610 517 FedEx Corp. ...................................... 34,904 727 General Dynamics Corp. ........................... 65,750 +743 General Motors Corp. ............................. 39,666 1,169 Honeywell International, Inc. .................... 39,093 317 USF Corp. ........................................ 10,845 1,114 Union Pacific Corp. .............................. 77,387 ---------- 389,695 ---------- UTILITIES -- 6.0% 418 Dominion Resources, Inc. ......................... 26,681 999 Exelon Corp. ..................................... 66,268 782 FPL Group, Inc. .................................. 51,126 1,039 Pinnacle West Capital Corp. ...................... 41,597 936 Progress Energy, Inc. ............................ 42,341 1,979 Waste Management, Inc. ........................... 58,567 ---------- 286,580 ---------- Total common stocks............................... $4,617,662 ========== </Table> <Table> <Caption> MARKET SHARES VALUE # - -------- ---------- SHORT-TERM SECURITIES -- 7.7% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 3.3% 159,683 Boston Global Investment Trust........... $ 159,683 ---------- <Caption> PRINCIPAL AMOUNT - --------- REPURCHASE AGREEMENTS -- 4.4% Joint Repurchase Agreement (See Note $210,163 2(d)) 0.833% due 01/02/04................ 210,163 ---------- Total short-term securities.............. $ 369,846 ========== </Table> <Table> DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $4,075,513)...... 95.6% $4,617,662 Total short-term securities (cost $369,846)................................ 7.7 369,846 ----- ---------- Total investment in securities (total cost $4,445,359) -- including $156,503 of securities loaned (See Note 2(i)).................................... 103.3 4,987,508 Cash, receivables and other assets......... 0.5 25,653 Payable for securities purchased........... (0.5) (22,876) Payable for Fund shares redeemed........... (0.0) (163) Securities lending collateral payable to brokers (See Note 2(i)).................. (3.3) (159,683) Other liabilities.......................... (0.0) (245) ----- ---------- Net assets................................. 100.0% $4,830,194 ===== ========== </Table> <Table> <Caption> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 4,000,000 shares authorized; 257,489 shares outstanding..................................... $ 257 Paid in capital................................... 4,418,129 Accumulated net investment income................. 1,538 Accumulated net realized loss on investments...... (131,879) Unrealized appreciation on investments............ 542,149 ---------- Net assets........................................ $4,830,194 ========== </Table> <Table> Class IA Net asset value per share ($3,927,415 / 209,270 shares outstanding) (3,500,000 shares authorized)....................................... $18.77 ====== Class IB Net asset value per share ($902,779 / 48,219 shares outstanding) (500,000 shares authorized).......... $18.72 ====== </Table> <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 10.2% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2 (i)). </Table> The accompanying notes are an integral part of this financial statement. 53 HARTFORD EQUITY INCOME HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ------- COMMON STOCKS -- 97.5% BANKS -- 21.6% 5 Bank of America Corp. ............................ $ 414 9 Citigroup, Inc. .................................. 446 1 Federal National Mortgage Association............. 74 7 National City Corp. .............................. 229 5 PNC Financial Services Group...................... 273 2 SunTrust Banks, Inc. ............................. 132 4 U.S. Bancorp...................................... 119 6 Wachovia Corp. ................................... 263 4 Washington Mutual, Inc. .......................... 156 1 Wells Fargo Co. .................................. 79 ------- 2,185 ------- CHEMICALS -- 5.0% 4 Dow Chemical Co. (The)............................ 151 2 PPG Industries, Inc. ............................. 103 5 du Pont (E.I.) de Nemours & Co. .................. 248 ------- 502 ------- COMMUNICATIONS -- 4.0% 2 BellSouth Corp. .................................. 61 7 Nokia Corp., ADR.................................. 123 2 SBC Communications, Inc. ......................... 61 4 Verizon Communications, Inc. ..................... 156 ------- 401 ------- COMPUTERS & OFFICE EQUIPMENT -- 2.6% 12 Hewlett-Packard Co. .............................. 266 ------- CONSUMER DURABLES -- 2.0% 7 Masco Corp. ...................................... 204 ------- DRUGS -- 3.4% 2 Merck & Co., Inc. ................................ 79 6 Pfizer, Inc. ..................................... 208 1 Wyeth............................................. 56 ------- 343 ------- ELECTRICAL EQUIPMENT -- 1.1% 3 Rockwell Automation, Inc. ........................ 113 ------- ELECTRONICS -- 3.9% 6 Emerson Electric Co. ............................. 394 ------- ENERGY & SERVICES -- 13.3% 3 BP Amoco PLC, ADR................................. 135 4 ChevronTexaco Corp. .............................. 319 2 Conoco, Inc. ..................................... 106 12 Exxon Mobil Corp. ................................ 475 7 Shell Transport & Trading Co., PLC, ADR........... 313 ------- 1,348 ------- FINANCIAL SERVICES -- 7.7% 3 Goldman Sachs Group, Inc. (The)................... 290 4 Merrill Lynch & Co., Inc. ........................ 252 4 Morgan Stanley Dean Witter & Co. ................. 240 ------- 782 ------- </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ------- FOOD, BEVERAGE & TOBACCO -- 4.7% 3 Altria Group, Inc. ............................... $ 154 2 General Mills, Inc. .............................. 97 2 Heinz (H.J.) Co. ................................. 55 4 Kellogg Co. ...................................... 166 ------- 472 ------- FOREST & PAPER PRODUCTS -- 4.2% 2 Kimberly-Clark Corp. ............................. 107 5 Weyerhaeuser Co. ................................. 316 ------- 423 ------- INSURANCE -- 6.1% 2 Chubb Corp. (The)................................. 153 2 Marsh & McLennan Cos., Inc. ...................... 112 4 St. Paul Cos., Inc. (The)......................... 139 3 XL Capital Ltd., Class A.......................... 218 ------- 622 ------- MACHINERY -- 4.3% 5 Caterpillar, Inc. ................................ 434 ------- MEDIA & ENTERTAINMENT -- 1.0% 1 Gannett Co., Inc. ................................ 101 ------- MEDICAL INSTRUMENTS & SUPPLIES -- 1.3% 4 Baxter International, Inc. ....................... 136 ------- METALS, MINERALS & MINING -- 3.4% 9 Alcoa, Inc. ...................................... 349 ------- TRANSPORTATION -- 3.2% 6 General Motors Corp. ............................. 324 ------- UTILITIES -- 4.7% 3 Dominion Resources, Inc. ......................... 188 2 Exelon Corp. ..................................... 130 2 FPL Group, Inc. .................................. 103 2 Scana Corp. ...................................... 52 ------- 473 ------- Total common stocks............................... $ 9,872 ======= </Table> <Table> <Caption> PRINCIPAL AMOUNT - --------- SHORT-TERM SECURITIES -- 6.9% REPURCHASE AGREEMENTS -- 6.9% $696 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04............................... $ 696 ------- Total short-term securities....................... $ 696 ======= </Table> The accompanying notes are an integral part of this financial statement. 54 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET VALUE # ------- DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $9,319)............ 97.5% $ 9,872 Total short-term securities (cost $696)...... 6.9 696 ----- ------- Total investment in securities (total cost $10,015)................................... 104.4 10,568 Cash, receivables and other assets........... 1.4 140 Payable for securities purchased............. (5.7) (579) Other liabilities............................ (0.1) (9) ----- ------- Net assets................................... 100.0% $10,120 ===== ======= </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 800,000 shares authorized; 942 shares outstanding.......... $ 1 Paid in capital...................................... 9,564 Accumulated net investment income.................... 1 Accumulated net realized gain on investments......... 1 Unrealized appreciation on investments............... 553 ------- Net assets........................................... $10,120 ======= </Table> <Table> Class IA Net asset value per share ($8,511 / 792 shares outstanding) (600,000 shares authorized).......... $10.75 ====== Class IB Net asset value per share ($1,609 / 150 shares outstanding) (200,000 shares authorized).......... $10.74 ====== </Table> <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 5.6% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. </Table> The accompanying notes are an integral part of this financial statement. 55 HARTFORD FOCUS HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ------- COMMON STOCKS -- 99.2% BANKS -- 10.9% 54 American Express Co. ............................. $ 2,600 39 Bank of America Corp. ............................ 3,137 84 Citigroup, Inc. .................................. 4,063 ------- 9,800 ------- COMPUTERS & OFFICE EQUIPMENT -- 8.7% *103 Cisco Systems, Inc. .............................. 2,495 123 Hewlett-Packard Co. .............................. 2,821 27 International Business Machines Corp. ............ 2,456 ------- 7,772 ------- DRUGS -- 16.1% *42 Amgen, Inc. ...................................... 2,589 35 Eli Lilly & Co. .................................. 2,447 *39 Genzyme Corp. .................................... 1,919 128 Pfizer, Inc. ..................................... 4,515 69 Wyeth............................................. 2,925 ------- 14,395 ------- ELECTRONICS -- 6.3% 108 General Electric Co. ............................. 3,333 72 Intel Corp. ...................................... 2,325 ------- 5,658 ------- FINANCIAL SERVICES -- 5.8% 39 Merrill Lynch & Co., Inc. ........................ 2,287 50 Morgan Stanley Dean Witter & Co. ................. 2,917 ------- 5,204 ------- INSURANCE -- 8.1% 66 American International Group, Inc. ............... 4,368 60 Marsh & McLennan Cos., Inc. ...................... 2,859 ------- 7,227 ------- MACHINERY -- 2.4% 26 Caterpillar, Inc. ................................ 2,192 ------- MEDIA & ENTERTAINMENT -- 7.0% *186 Time Warner, Inc. ................................ 3,337 67 Viacom, Inc., Class B............................. 2,960 ------- 6,297 ------- MEDICAL INSTRUMENTS & SUPPLIES -- 2.8% 51 Medtronic, Inc. .................................. 2,489 ------- RETAIL -- 8.7% *71 Costco Wholesale Corp. ........................... 2,629 111 Gap, Inc. (The)................................... 2,579 72 Home Depot, Inc. (The)............................ 2,552 ------- 7,760 ------- RUBBER & PLASTICS PRODUCTS -- 2.9% 38 NIKE, Inc., Class B............................... 2,601 ------- </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ------- SOFTWARE & SERVICES -- 10.9% *57 Computer Sciences Corp. .......................... $ 2,530 62 First Data Corp. ................................. 2,535 170 Microsoft Corp. .................................. 4,667 ------- 9,732 ------- TRANSPORTATION -- 8.6% 39 FedEx Corp. ...................................... 2,606 48 Lockheed Martin Corp. ............................ 2,462 28 United Technologies Corp. ........................ 2,663 ------- 7,731 ------- Total common stocks............................... $88,858 ======= <Caption> PRINCIPAL AMOUNT - --------- SHORT-TERM SECURITIES -- 0.5% REPURCHASE AGREEMENTS -- 0.5% $ 484 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... $ 484 ------- Total short-term securities....................... $ 484 ======= </Table> <Table> <Caption> DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $76,881)........... 99.2% $88,858 Total short-term securities (cost $484)...... 0.5 484 ----- ------- Total investment in securities (total cost $77,365)................................... 99.7 89,342 Cash, receivables and other assets........... 0.3 227 Other liabilities............................ (0.0) (4) ----- ------- Net assets................................... 100.0% $89,565 ===== ======= </Table> <Table> <Caption> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 800,000 shares authorized; 9,063 shares outstanding........ $ 9 Paid in capital...................................... 84,549 Accumulated net investment income.................... 202 Accumulated net realized loss on investments......... (7,172) Unrealized appreciation on investments............... 11,977 ------- Net assets........................................... $89,565 ======= </Table> <Table> <Caption> Class IA Net asset value per share ($49,891 / 5,039 shares outstanding) (600,000 shares authorized).......... $9.90 ===== Class IB Net asset value per share ($39,674 / 4,024 shares outstanding) (200,000 shares authorized).......... $9.86 ===== </Table> <Table> # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. </Table> The accompanying notes are an integral part of this financial statement. 56 HARTFORD GLOBAL ADVISERS HLS FUND SCHEDULE OF INVESTMENTS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ --------- COLLATERALIZED MORTGAGE OBLIGATIONS V -- 2.0% UNITED STATES OF AMERICA -- 2.0% $ 350 Arms, Series GL, Class A (Aaa Moodys) 1.401% due 09/10/34............................. $ 350 387 BMW Vehicle Owner Trust, Series 2003-A, Class A2 (Aaa Moodys) 1.45% due 11/25/05.............................. 388 450 Bear Stearns Commercial Mortgage Securities, Inc., Series 2001-TOP4, Class A3 (Aaa Moodys) 5.61% due 11/15/33.............................. 480 595 Bear Stearns Commercial Mortgage Securities, Inc., Series 2003-T12, Class A4 (Aaa Moodys) 4.68% due 08/13/39.............................. 589 140 CS First Boston Mortgage Securities Corp., Series 1997-C1, Class A1B (Aaa Moodys) 7.15% due 08/20/06.............................. 140 450 CS First Boston Mortgage Securities Corp., Series 2003-C3, Class A5 (Aaa Moodys) 3.936% due 05/15/38............................. 422 236 Crusade Global Trust, Series 2003-1, Class A (Aaa Moodys) 1.356% due 01/17/34............................. 236 456 Crusade Global Trust, Series 2003-2, Class A (Aaa Moodys) 1.36% due 09/18/34.............................. 456 @298 GS Mortgage Securities Corp. II, Series 2000-GSFL, Class A (Aaa Moodys) 1.443% due 08/15/04............................. 298 529 Holmes Financial PLC, Series 4, Class 1A (Aaa Moodys) 1.34% due 07/15/15.............................. 529 385 John Deere Owner Trust, Series 2003-A, Class A2 (Aaa Moodys) 1.31% due 01/15/06.............................. 385 401 Medallion Trust, Series 2003-1G, Class A (Aaa Moodys) 1.36% due 12/21/33.............................. 401 600 Morgan Stanley Dean Witter Capital I, Series 2001-TOP3, Class A3 (Aaa Moodys) 6.20% due 07/15/33.............................. 660 145 Nelnet Student Loan Trust, Series 2003-2, Class A1 (Aaa Moodys) 1.18% due 04/25/09.............................. 145 500 Nomura Asset Securities Corp., Series 1998-D6, Class A1B (Aaa Moodys) 6.59% due 03/17/28.............................. 560 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ --------- UNITED STATES OF AMERICA -- (CONTINUED) $ 570 Prudential Commercial Mortgage Trust, Series 2003-PWR1, Class A2 (AAA S&P) 4.493% due 02/11/36............................. $ 559 @538 RMAC, Series 2003-NS2A, Class A1B (Aaa Moodys) 1.32% due 06/12/18.............................. 538 --------- 7,136 --------- Total collateralized mortgage obligations (cost $6,996)......................................... $ 7,136 ========= <Caption> SHARES - ------------ COMMON STOCKS -- 60.5% CANADA -- 0.9% *+46 Research in Motion Ltd. (Communications).......... $ 3,041 --------- FINLAND -- 0.1% -25 Nokia Oyj (Agriculture & Fishing)................. 431 --------- FRANCE -- 3.8% -33 Pinault Printemps Redoute S.A. (Retail)........... 3,181 -15 Renault S.A. (Transportation)..................... 1,058 -9 Sanofi-Synthelabo S.A. (Medical Instruments & Supplies)....................................... 703 -29 TotalFinaElf S.A., B Shares (Energy & Services)... 5,399 *369 Wanadoo (Communications).......................... 3,022 --------- 13,363 --------- GERMANY -- 7.9% -33 Allianz AG (Insurance)............................ 4,151 56 BMW AG (Transportation)........................... 2,587 -43 Deutsche Bank AG (Banks).......................... 3,533 -149 Deutsche Telekom AG (Communications).............. 2,706 -31 Muenchener Rueckversicherungs Gesellschaft AG (Insurance)..................................... 3,812 -18 SAP AG (Software & Services)...................... 2,931 53 Schering AG (Drugs)............................... 2,689 +-71 Siemens AG (Electronics).......................... 5,625 --------- 28,034 --------- HONG KONG -- 1.4% 1,256 China Merchants Holdings International Co., Ltd. (Aerospace & Defense)........................... 1,658 -885 Cnooc Ltd. (Energy & Services).................... 1,746 -524 Techtronic Industries Co. (Electrical Equipment)...................................... 1,462 --------- 4,866 --------- ISRAEL -- 0.5% 34 Teva Pharmaceutical Industries Ltd., ADR (Drugs)......................................... 1,928 --------- </Table> The accompanying notes are an integral part of this financial statement. 57 HARTFORD GLOBAL ADVISERS HLS FUND SCHEDULE OF INVESTMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - ------------ --------- COMMON STOCKS -- (CONTINUED) ITALY -- 0.9% -265 Mediaset S.p.A. (Media & Entertainment)........... $ 3,161 --------- JAPAN -- 2.2% -10 Advantest Corp. (Software & Services)............. 785 -@@-- DDI Corp. (Communications)........................ 1,110 -@@-- Dentsu, Inc. (Business Services).................. 1,168 -27 Fast Retailing Co., Ltd. (Retail)................. 1,638 -@@-- Japan Tobacco, Inc. (Food, Beverage & Tobacco).... 616 -189 Matsushita Electric Industrial Co. (Electronics)................................... 2,630 --------- 7,947 --------- NETHERLANDS -- 0.9% *42 ASM Lithography Holding N.V., NY Reg Shares (Electronics)................................... 850 *-33 ASML Holding N.V. (Machinery)..................... 663 +-76 European Aeronautic Defense & Space Co. (Aerospace & Defense)...................................... 1,813 --------- 3,326 --------- RUSSIA -- 0.8% 43 JSC Mining & Smelting Co., ADR (Metals, Minerals & Mining)......................................... 2,808 --------- SOUTH KOREA -- 0.4% -4 Samsung Electronics (Electronics)................. 1,493 --------- SWEDEN -- 2.4% -142 Atlas Copco AB (Machinery)........................ 5,107 -1,873 Telefonaktiebolaget LM Ericcson (Communications)................................ 3,307 --------- 8,414 --------- SWITZERLAND -- 3.9% +929 ABB Ltd. (Construction)........................... 4,711 -84 Credit Suisse Group (Banks)....................... 3,082 -59 Roche Holdings AG (Drugs)......................... 5,935 --------- 13,728 --------- UNITED KINGDOM -- 5.8% -52 AstraZeneca PLC (Drugs)........................... 2,499 *-569 British Airways PLC (Transportation).............. 2,370 -730 Carphone Warehouse Group PLC (Communications)..... 1,927 -319 Compass Group PLC (Food, Beverage & Tobacco)...... 2,174 *1,777 Corus Group PLC (Metals, Minerals & Mining)....... 954 -112 Imperial Tobacco Group PLC (Food, Beverage & Tobacco)........................................ 2,201 -526 Kingfisher PLC (Retail)........................... 2,633 -2,255 Vodafone Group PLC (Communications)............... 5,603 --------- 20,361 --------- </Table> <Table> <Caption> MARKET SHARES VALUE # - ------------ --------- UNITED STATES OF AMERICA -- 28.6% *84 Altera Corp. (Electronics)........................ $ 1,902 96 Altria Group, Inc. (Food, Beverage & Tobacco)..... 5,224 27 Analog Devices, Inc. (Electronics)................ 1,242 29 Apache Corp. (Energy & Services).................. 2,352 *17 Apollo Group, Inc. (Education).................... 1,170 93 Bank One Corp. (Banks)............................ 4,235 *94 Boston Scientific Corp. (Medical Instruments & Supplies)....................................... 3,463 *242 Cendant Corp. (Business Services)................. 5,398 *148 Cisco Systems, Inc. (Computers & Office Equipment)...................................... 3,585 92 Citigroup, Inc. (Banks)........................... 4,480 18 Clear Channel Communications, Inc. (Media & Entertainment).................................. 838 *125 Comcast Corp., Class A (Media & Entertainment).... 3,910 14 Countrywide Credit Industries, Inc. (Banks)....... 1,052 48 Deere (John) & Co. (Machinery).................... 3,116 *81 Dell, Inc. (Computers & Office Equipment)......... 2,754 50 Eli Lilly & Co. (Drugs)........................... 3,531 57 Exxon Mobil Corp. (Energy & Services)............. 2,329 25 Federal Home Loan Mortgage Association (Banks).... 1,446 *65 Forest Laboratories, Inc. (Drugs)................. 4,029 172 Gillette Co. (The) (Consumer Non-Durables)........ 6,299 86 Guidant Corp. (Medical Instruments & Supplies).... 5,189 *15 KLA-Tencor Corp. (Electrical Equipment)........... 862 9 Lennar Corp. (Construction)....................... 845 *50 Medco Health Solutions, Inc. (Drugs).............. 1,683 66 Merrill Lynch & Co., Inc. (Financial Services).... 3,847 80 Microsoft Corp. (Software & Services)............. 2,192 *28 NTL, Inc. (Communications)........................ 1,946 *67 Noble Corp. (Energy & Services)................... 2,379 93 Pfizer, Inc. (Drugs).............................. 3,289 48 Schlumberger Ltd. (Energy & Services)............. 2,632 *47 Staples, Inc. (Retail)............................ 1,269 119 Tyco International Ltd. (Consumer Non-Durables)... 3,151 40 United Technologies Corp. (Transportation)........ 3,781 *38 Univision Communications, Inc. (Media & Entertainment).................................. 1,496 </Table> The accompanying notes are an integral part of this financial statement. 58 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - ------------ --------- COMMON STOCKS -- (CONTINUED) UNITED STATES OF AMERICA -- (CONTINUED) *+25 XM Satellite Radio Holdings, Inc. (Communications)................................ $ 670 *83 Yahoo!, Inc. (Software & Services)................ 3,727 --------- 101,313 --------- Total common stocks (cost $182,345)............... $ 214,214 ========= <Caption> PRINCIPAL AMOUNT - ------------ CORPORATE NOTES V -- 4.1% $ @225 Anthem Insurance Cos., Inc. (Insurance) (A3 Moodys) 9.00% due 04/01/27.............................. $ 306 225 Burlington Resources Finance Co. (Energy & Services) (Baa1 Moodys) 6.68% due 02/15/11.............................. 253 600 Citigroup, Inc. (Banks) (Aa2 Moodys) 6.00% due 10/31/33.............................. 600 300 Comcast Cable Communications (Media & Entertainment) (Baa3 Moodys) 8.375% due 05/01/07............................. 348 95 Commonwealth Edison Co. (Utilities) (A3 Moodys) 6.15% due 03/15/12.............................. 104 300 ConAgra Foods, Inc. (Food, Beverage & Tobacco) (Baa1 Moodys) 6.00% due 09/15/06.............................. 324 550 DaimlerChrysler North America Holding Corp. (Transportation) (A3 Moodys) 6.50% due 11/15/13.............................. 579 300 Everest Reinsurance Group Ltd. (Insurance) (A3 Moodys) 8.50% due 03/15/05.............................. 322 350 FPL Group Capital, Inc. (Utilities) (A2 Moodys) 6.125% due 05/15/07............................. 382 1,200 Federal Home Loan Bank (U.S. Government Agencies) (Aaa Moodys) 5.75% due 05/15/12.............................. 1,307 @390 Florida Windstorm Underwriting Association (Insurance) (Aaa Moodys) 6.85% due 08/25/07.............................. 441 450 Ford Motor Co. (Transportation) (Baa1 Moodys) 6.375% due 02/01/29............................. 401 800 General Electric Capital Corp. (Banks) (Aaa Moodys) 5.45% due 01/15/13.............................. 832 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT I VALUE # - ------------ --------- $ 500 General Motors Acceptance Corp. (Transportation) (A3 Moodys) 7.25% due 03/02/11.............................. $ 549 275 Health Net, Inc. (Insurance) (Baa3 Moodys) 8.375% due 04/15/11............................. 330 600 Household Finance Corp. (Banks) (A1 Moodys) 4.75% due 07/15/13.............................. 584 EUR 325 International Paper Co. (Forest & Paper Products) (Baa2 Moodys) 5.375% due 08/11/06............................. 427 325 Kraft Foods, Inc. (Food, Beverage & Tobacco) (A3 Moodys) 1.37% due 11/26/04.............................. 325 500 Liberty Media Corp. (Media & Entertainment) (Baa3 Moodys) 2.67% due 09/17/06.............................. 506 GBP 85 McDonald's Corp. (Retail) (A2 Moodys) 5.875% due 04/23/32............................. 160 **450 Miller Brewing Co. (Food, Beverage & Tobacco) (Baa1 Moodys) 4.25% due 08/15/08.............................. 456 400 NAC RE Corp. (Insurance) (A2 Moodys) 7.15% due 11/15/05.............................. 435 300 NSTAR (Utilities) (A2 Moodys) 8.00% due 02/15/10.............................. 361 200 News America Holdings, Inc. (Media & Entertainment) (Baa3 Moodys) 8.875% due 04/26/23............................. 256 195 Ocean Energy, Inc. (Energy & Services) (Baa3 Moodys) 4.375% due 10/01/07............................. 201 275 Pulte Homes, Inc. (Construction) (Baa3 Moodys) 6.375% due 05/15/33............................. 268 @178 Southern Capital Corp. (Financial Services) (Aaa Moodys) 5.70% due 06/30/23.............................. 185 250 St. Paul Cos., Inc. (The) (Insurance) (A3 Moodys) 5.75% due 03/15/07.............................. 270 EUR **225 Staples, Inc. (Retail) (Baa2 Moodys) 5.875% due 11/15/04............................. 291 150 Time Warner, Inc. (Media & Entertainment) (Baa1 Moodys) 9.125% due 01/15/13............................. 191 EUR 511 Toyota Motor Credit Corp. (Financial Services) (Aaa Moodys) 4.75% due 06/17/05.............................. 664 340 UnitedHealth Group, Inc. (Insurance) (A3 Moodys) 5.20% due 01/17/07.............................. 364 </Table> The accompanying notes are an integral part of this financial statement. 59 HARTFORD GLOBAL ADVISERS HLS FUND SCHEDULE OF INVESTMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT I VALUE # - ------------ --------- CORPORATE NOTES V -- (CONTINUED) $ 285 Verizon Communications, Inc. (Communications) (Aa3 Moodys) 6.50% due 09/15/11.............................. $ 314 195 Virginia Electric & Power Co. (Utilities) (A3 Moodys) 5.375% due 02/01/07............................. 208 500 Wellpoint Health Networks, Inc. (Insurance) (Baa1 Moodys) 6.375% due 01/15/12............................. 551 400 Weyerhaeuser Co. (Forest & Paper Products) (Baa2 Moodys) 6.125% due 03/15/07............................. 434 --------- 14,529 --------- Total corporate notes (cost $13,466).............. $ 14,529 ========= FOREIGN/YANKEE BONDS & NOTES V -- 26.0% AUSTRALIA -- 2.5% AUD 9,175 Australian Government Bond (Foreign Governments) (Aaa Moodys) 7.50% due 09/15/09.............................. $ 7,550 300 National Australia Bank Ltd. (Banks) (A1 Moodys) 8.60% due 05/19/10.............................. 372 EUR 700 National Australia Bank Ltd. (Banks) (Aa3 Moodys) 2.183% due 08/06/04............................. 883 --------- 8,805 --------- AUSTRIA -- 0.5% EUR @1,340 Austria Government Bond (Foreign Governments) (Aaa Moodys) 5.00% due 07/15/12.............................. 1,784 --------- CANADA -- 4.5% CAD 16,170 Canadian Government Bond (Foreign Governments) (Aaa Moodys) 3.00% due 12/01/05.............................. 12,520 CAD 835 Canadian Government Bond (Foreign Governments) (Aaa Moodys) 5.50% due 06/01/10.............................. 689 CAD 365 Canadian Government Bond (Foreign Governments) (Aaa Moodys) 5.75% due 06/01/29.............................. 304 CAD 2,765 Canadian Government Bond (Foreign Governments) (Aaa Moodys) 6.00% due 09/01/05.............................. 2,247 175 Potash Corp. of Saskatchewan, Inc. (Chemicals) (Baa2 Moodys) 7.75% due 05/31/11.............................. 205 --------- 15,965 --------- CHILE -- 0.0% @130 Inversiones CMPC S.A. (Forest & Paper Products) (Baa2 Moodys) 4.875% due 06/18/13............................. 125 --------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT I VALUE # - ------------ --------- DENMARK -- 1.7% EUR 4,035 Denmark Government Bond (Foreign Governments) (Aaa Moodys) 4.875% due 04/18/07............................. $ 5,357 DKK 3,676 Denmark Government Bond (Foreign Governments) (Aaa Moodys) 6.00% due 11/15/09.............................. 690 --------- 6,047 --------- FINLAND -- 0.8% EUR 1,070 Finnish Government Bond (Foreign Governments) (Aaa Moodys) 5.375% due 07/04/13............................. 1,462 EUR 225 Nordea Bank Finland PLC (Banks) (A1 Moodys) 5.75% due 03/26/14.............................. 306 1,050 Republic of Finland (Foreign Governments) (Aaa Moodys) 4.75% due 03/06/07.............................. 1,113 --------- 2,881 --------- FRANCE -- 0.1% 340 AXA (Financial Services) (A3 Moodys) 8.60% due 12/15/30.............................. 429 --------- GERMANY -- 5.0% EUR 7,490 Deutsche Bundesrepublik (Foreign Governments) (Aaa Moodys) 3.75% due 07/04/13.............................. 9,068 EUR 935 Deutsche Bundesrepublik (Foreign Governments) (Aaa Moodys) 5.00% due 01/04/12.............................. 1,249 EUR 2,605 Deutsche Bundesrepublik (Foreign Governments) (Aaa Moodys) 5.50% due 01/04/31.............................. 3,583 EUR 250 Deutsche Bundesrepublik (Foreign Governments) (Aaa Moodys) 6.00% due 01/05/06.............................. 335 EUR 720 Deutsche Bundesrepublik (Foreign Governments) (Aaa Moodys) 6.25% due 01/04/30.............................. 1,082 EUR 1,450 Deutsche Bundesrepublik (Foreign Governments) (Aaa Moodys) 6.50% due 07/04/27.............................. 2,227 --------- 17,544 --------- HUNGARY -- 0.1% HUF 65,960 Hungary Government Bond (Foreign Governments) (A1 Moodys) 5.50% due 02/12/14.............................. 258 --------- </Table> The accompanying notes are an integral part of this financial statement. 60 - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT I VALUE # - ------------ --------- FOREIGN/YANKEE BONDS & NOTES V -- (CONTINUED) JAPAN -- 3.8% JPY 543,050 Japan Government Ten Year Bond (Foreign Governments) (A2 Moodys) 0.50% due 06/20/13.............................. $ 4,707 JPY 266,000 Japan Government Ten Year Bond (Foreign Governments) (A2 Moodys) 1.10% due 12/22/08.............................. 2,546 JPY 75,000 Japan Government Ten Year Bond (Foreign Governments) (A2 Moodys) 1.40% due 06/22/09.............................. 728 JPY 391,400 Japan Government Ten Year Bond (Foreign Governments) (A2 Moodys) 1.50% due 09/20/13.............................. 3,709 JPY 156,000 Japan Government Ten Year Bond (Foreign Governments) (A2 Moodys) 2.40% due 06/20/07.............................. 1,560 JPY 20,500 Japan Government Twenty Year Bond (Foreign Governments) (A2 Moodys) 2.60% due 03/20/19.............................. 217 --------- 13,467 --------- MEXICO -- 0.1% EUR **175 Pemex Project Funding Master Trust Co. (Energy & Services) (Baa1 Moodys) 6.625% due 04/04/10............................. 228 95 United Mexican States (Foreign Governments) (Baa2 Moodys) 8.125% due 12/30/19............................. 106 --------- 334 --------- NETHERLANDS -- 1.4% 430 Koninklijke KPN N.V. (Communications) (Baa1 Moodys) 8.00% due 10/01/10.............................. 514 EUR 175 Netherlands Government Bond (Foreign Governments) (Aaa Moodys) 7.75% due 03/01/05.............................. 234 EUR 2,080 Netherlands Treasury Certificate (Foreign Governments) (Aaa Moodys) 0.00% due 02/27/04.............................. 2,615 500 Telefonica Europe BV (Communications) (A3 Moodys) 7.75% due 09/15/10.............................. 594 EUR 800 Unilever N.V. (Consumer Non-Durables) (A1 Moodys) 4.75% due 06/07/04.............................. 1,019 --------- 4,976 --------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT I VALUE # - ------------ --------- SINGAPORE -- 1.0% EUR **425 Oversea-Chinese Banking Corp., Ltd. (Banks) (A1 Moodys) 7.25% due 09/06/11.............................. $ 621 SGD 3,575 Singapore Government Bond (Foreign Governments) (Aaa Moodys) 2.25% due 07/01/13.............................. 1,853 SGD 1,430 Singapore Government Bond (Foreign Governments) (Aaa Moodys) 4.00% due 03/01/07.............................. 897 --------- 3,371 --------- SOUTH AFRICA -- 0.1% EUR 425 Republic of South Africa (Foreign Governments) (Baa2 Moodys) 5.25% due 05/16/13.............................. 512 --------- UNITED KINGDOM -- 4.3% 250 BT Group PLC (Communications) (Baa1 Moodys) 8.875% due 12/15/30............................. 327 **500 HBOS PLC (Banks) (Aa2 Moodys) 3.75% due 09/30/08.............................. 500 **595 HBOS PLC (Banks) (Aa3 Moodys) 6.00% due 11/01/33.............................. 589 EUR 800 Lloyds TSB Bank PLC (Banks) (Aa1 Moodys) 5.25% due 07/14/08.............................. 1,064 EUR 400 National Grid Transco PLC (Energy & Services) (Baa1 Moodys) 5.00% due 07/02/18.............................. 482 GBP 355 U.K. Treasury Gilt (Foreign Governments) (Aaa Moodys) 4.25% due 06/07/32.............................. 592 GBP 965 U.K. Treasury Gilt (Foreign Governments) (Aaa Moodys) 4.25% due 03/07/36.............................. 1,613 GBP 3,355 U.K. Treasury Gilt (Foreign Governments) (Aaa Moodys) 5.75% due 12/07/09.............................. 6,340 GBP 1,885 U.K. Treasury Gilt (Foreign Governments) (Aaa Moodys) 6.25% due 11/25/10.............................. 3,680 --------- 15,187 --------- VENEZUELA -- 0.1% EUR 130 Corp. Andina De Fomento (Foreign Governments) (A2 Moodys) 6.375% due 06/18/09............................. 178 --------- Total foreign/yankee bonds & notes (cost $82,999)........................................ $ 91,863 ========= </Table> The accompanying notes are an integral part of this financial statement. 61 HARTFORD GLOBAL ADVISERS HLS FUND SCHEDULE OF INVESTMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ --------- MUNICIPAL BONDS V -- 0.1% UNITED STATES OF AMERICA -- 0.1% $ 350 California State (Baa1 Moodys) 5.25% due 02/01/23.............................. $ 362 --------- Total municipal bonds (cost $370)................. $ 362 ========= <Caption> SHARES - ------------ OPTIONS CALL PURCHASED -- 0.1% ISSUER/EXPIRATION DATE/EXERCISE PRICE -- 0.1% 2,465 Australian Dollar vs. Euro/August 2004/ 1.66...... $ 32 5,304 Euro vs. DBR/October 2004/ 104.93................. 242 3,340 Euro vs. United Kingdom Pound/June 2004/ 0.71..... 88 1,670 Euro vs. United Kingdom Pound/ June 2004/ 0.75.... 8 760 U.S. Dollar vs. Euro/ December 2004/ 115.00....... 10 3,040 U.S. Dollar vs. New Zealand Dollar/ June 2004/ 0.62............................................ 35 --------- 415 --------- Total call options purchased (cost $447).......... $ 415 ========= OPTIONS PUT PURCHASED -- 0.0% ISSUER/EXPIRATION DATE/EXERCISE PRICE -- 0.0% 660 Euro vs. Polish Zloty/ December 2004/ 4.77........ $ 24 @@797 Japanese Yen Swaption/ January 2004/ 0.60......... -- 210,000 Japanese Yen vs. South Korea Won/ April 2004/ 10.88........................................... 11 1,420 Swiss Franc vs. Japanese Yen/ September 2004/ 83.30........................................... 21 8,085 U.S. Dollar vs. Israeli Shekel/ June 2004/ 4.40... 112 --------- 168 --------- Total put options purchased (cost $228)........... $ 168 ========= <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ --------- U.S. TREASURIES & FEDERAL AGENCIES -- 6.7% UNITED STATES OF AMERICA -- 6.7% $ 965 3.489% due 04/01/29............................... $ 998 640 4.25% due 08/15/13................................ 641 11,585 4.375% due 08/15/12............................... 11,815 7,129 6.00% due 11/15/28 - 04/15/33..................... 7,416 345 6.30% due 06/01/09................................ 379 300 6.50% due 09/15/28 - 10/15/28..................... 317 22 7.00% due 02/01/29................................ 24 1,641 7.50% due 11/15/27 - 07/15/29..................... 1,738 460 8.00% due 10/15/29 - 12/15/30..................... 501 --------- 23,829 --------- Total U.S. treasuries & federal agencies (cost $23,574)........................................ $ 23,829 ========= SHORT-TERM SECURITIES -- 15.1% COMMERCIAL PAPER -- 0.2% $ 750 Svenska Handelsbanken 1.113% due 02/14/05......... $ 750 --------- <Caption> SHARES - ------------ INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 3.7% 12,949 State Street Navigator Securities Lending Prime Portfolio....................................... 12,949 --------- <Caption> PRINCIPAL AMOUNT - ------------ REPURCHASE AGREEMENT -- 11.2% $ 39,681 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... 39,681 --------- Total short-term securities (cost $53,379)........ $ 53,380 ========= INVESTMENTS IN SECURITIES AT VALUE (TOTAL COST $363,804) -- 114.6%.............................................. $ 405,896 OTHER ASSETS, LESS LIABILITIES -- (14.6)%........................ $ (51,810) --------- NET ASSETS -- 100.0%............................................. $ 354,086 ========= </Table> The accompanying notes are an integral part of this financial statement. 62 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET VALUE # --------- DIVERSIFICATION BY INDUSTRY COMMON STOCKS Aerospace & Defense..................... 1.0% $ 3,471 Agriculture & Fishing................... 0.1 431 Banks................................... 5.0 17,828 Business Services....................... 1.9 6,566 Communications.......................... 6.6 23,332 Computers & Office Equipment............ 1.8 6,339 Construction............................ 1.6 5,556 Consumer Non-Durables................... 3.2 11,133 Drugs................................... 6.8 23,900 Education............................... 0.3 1,170 Electrical Equipment.................... 0.7 2,324 Electronics............................. 3.9 13,742 Energy & Services....................... 4.8 16,837 Financial Services...................... 1.1 3,847 Food, Beverage & Tobacco................ 2.9 10,215 Insurance............................... 2.3 7,963 Machinery............................... 2.5 8,886 Media & Entertainment................... 2.7 9,405 Medical Instruments & Supplies.......... 2.6 9,355 Metals, Minerals & Mining............... 1.1 3,762 Retail.................................. 2.4 8,721 Software & Services..................... 2.6 9,635 Transportation.......................... 2.7 9,796 ----- --------- Total common stocks................... 60.6% $ 214,214 ===== ========= CORPORATE NOTES Banks................................... 0.6% $ 2,016 Communications.......................... 0.1 314 Construction............................ 0.1 268 Energy & Services....................... 0.1 454 Financial Services...................... 0.2 849 Food, Beverage & Tobacco................ 0.3 1,105 Forest & Paper Products................. 0.2 861 Insurance............................... 0.9 3,019 Media & Entertainment................... 0.4 1,301 Retail.................................. 0.1 451 Transportation.......................... 0.4 1,529 U.S. Government Agencies................ 0.4 1,307 Utilities............................... 0.3 1,055 ----- --------- Total corporate notes................. 4.1% $ 14,529 ===== ========= FOREIGN/YANKEE BONDS & NOTES Banks................................... 1.2% $ 4,335 Chemicals............................... 0.1 205 Communications.......................... 0.4 1,435 Consumer Non-Durables................... 0.3 1,019 Energy & Services....................... 0.2 710 Financial Services...................... 0.1 429 Foreign Governments..................... 23.7 83,605 Forest & Paper Products................. -- 125 ----- --------- Total foreign/yankee bonds & notes.... 26.0% $ 91,863 ===== ========= </Table> <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 57.9% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). @ Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2003, the market value of these securities amounted to $3,677 or 1.0% of net assets (See Note 2(m)). - Security valued in good faith at fair value by, or under the direction of, the Funds' Board of Directors. The aggregate value of these securities as of December 31, 2003 was $88,653, which represents 25.1% of total net assets. ** Securities contain some restriction as to public resale. At December 31, 2003, the market value of these securities amounted to $2,685 or 0.8% of net assets (See Note 2(m)). @@ Due to the presentation of the financial statements in thousands, the number of shares and/or market value round to zero. I All principal amounts are in U.S. dollars unless otherwise indicated. AUD -- Australian Dollar CAD -- Canadian Dollar DKK -- Denmark Krone EUR -- Euro GBP -- British Pound HUF -- Hungary Forint JPY -- Japanese Yen SGN -- Singapore Dollar V The bond ratings are unaudited. </Table> The accompanying notes are an integral part of this financial statement. 63 HARTFORD GLOBAL ADVISERS HLS FUND SCHEDULE OF INVESTMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- *** FUTURES CONTRACTS OPEN AS OF DECEMBER 31, 2003 <Table> <Caption> UNREALIZED NUMBER APPRECIATION DESCRIPTION OF CONTRACTS POSITION EXPIRATION (DEPRECIATION) - ----------- ------------ -------- ------------ -------------- CBT 5 Year U.S. Treasury Note futures contracts 141 short March 2004 $ (36) S&P 500 Index futures contracts 11 short March 2004 (136) FTSE 100 Index futures contracts 9 short March 2004 (20) SFE SPI 200 Index futures contracts 2 short March 2004 (3) HKFE Hang Seng Index future contract 1 short January 2004 (1) TSE TOPIX Index futures contracts 5 short March 2004 (21) OMX Stock Index futures contracts 10 short July 2003 (3) MIB 30 Index future contract 1 short March 2004 4 Eurex EURO-BUND futures contracts 4 long March 2004 3 Eurex DAX Index future contract 1 short March 2004 (3) CAC 40 Index futures contracts 6 short March 2004 (4) IBEX 35 Index futures contracts 1 short January 2004 (2) ----- $(222) ===== These contracts had a market value of ($20,387) as of December 31, 2003 and were collateralized by various U.S. Treasury Notes with a market value of $1,282. </Table> @@@FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING AT DECEMBER 31, 2003 <Table> <Caption> UNREALIZED MARKET CONTRACT DELIVERY APPRECIATION DESCRIPTION VALUE AMOUNT DATE (DEPRECIATION) - ----------- ------------ --------------- --------- -------------- Australian Dollar (Buy) $ 114 $ 104 1/23/2004 $ 10 Australian Dollar (Buy) 305 298 3/24/2004 7 Australian Dollar (Buy) 818 747 1/23/2004 71 Australian Dollar (Buy) 1,548 1,510 1/23/2004 38 Australian Dollar (Buy) 5,691 5,662 1/23/2004 29 Australian Dollar (Sell) 27 25 1/23/2004 (2) Australian Dollar (Sell) 425 418 3/24/2004 (7) Australian Dollar (Sell) 818 763 1/23/2004 (55) Australian Dollar (Sell) 5,661 5,583 1/23/2004 (78) Australian Dollar (Sell) 5,711 5,672 1/7/2004 (39) British Pound (Buy) 121 121 1/5/2004 -- British Pound (Buy) 214 206 1/20/2004 8 British Pound (Buy) 483 456 1/20/2004 27 British Pound (Buy) 535 530 1/20/2004 5 British Pound (Buy) 1,016 959 1/20/2004 57 British Pound (Buy) 1,871 1,764 1/20/2004 107 British Pound (Buy) 2,807 2,624 1/20/2004 183 British Pound (Buy) 5,208 5,192 1/20/2004 16 British Pound (Sell) 265 259 3/24/2004 (6) British Pound (Sell) 432 422 3/24/2004 (10) British Pound (Sell) 1,023 948 1/20/2004 (75) British Pound (Sell) 1,052 1,026 1/20/2004 (26) British Pound (Sell) 1,158 1,092 1/20/2004 (66) British Pound (Sell) 1,568 1,452 1/20/2004 (116) British Pound (Sell) 5,172 5,052 1/20/2004 (120) British Pound (Sell) 5,230 5,197 1/7/2004 (33) British Pound (Sell) 7,079 6,622 1/20/2004 (457) Canadian Dollars (Buy) 2,512 2,503 2/10/2004 9 Canadian Dollars (Buy) 73 72 1/13/2004 1 Canadian Dollars (Buy) 73 72 1/13/2004 1 Canadian Dollars (Sell) 503 491 2/10/2004 (12) Canadian Dollars (Sell) 503 493 2/10/2004 (10) </Table> The accompanying notes are an integral part of this financial statement. 64 - -------------------------------------------------------------------------------- <Table> <Caption> UNREALIZED MARKET CONTRACT DELIVERY APPRECIATION DESCRIPTION VALUE AMOUNT DATE (DEPRECIATION) - ----------- ------------ --------------- --------- -------------- Canadian Dollars (Sell) $ 515 $ 502 2/10/2004 $ (13) Canadian Dollars (Sell) 991 982 2/10/2004 (9) Canadian Dollars (Sell) 1,029 1,021 2/10/2004 (8) Canadian Dollars (Sell) 1,046 1,043 2/10/2004 (3) Czech Koruna (Buy) 764 729 2/20/2004 35 Danish Krone (Sell) 717 688 2/9/2004 (29) EURO (Buy) 97 97 3/24/2004 -- EURO (Buy) 134 131 3/24/2004 3 EURO (Buy) 176 168 1/26/2004 8 EURO (Buy) 380 358 1/26/2004 22 EURO (Buy) 503 464 1/26/2004 39 EURO (Buy) 771 708 1/26/2004 63 EURO (Buy) 942 939 1/26/2004 3 EURO (Buy) 993 944 1/26/2004 49 EURO (Buy) 1,044 948 1/26/2004 96 EURO (Buy) 1,044 950 1/26/2004 94 EURO (Buy) 1,084 1,015 1/26/2004 69 EURO (Buy) 2,707 2,530 1/26/2004 177 EURO (Buy) 4,102 4,040 1/26/2004 62 EURO (Buy) 4,180 4,043 1/26/2004 137 EURO (Buy) 5,137 4,870 1/26/2004 267 EURO (Buy) 5,348 5,268 1/26/2004 80 EURO (Buy) 5,541 5,315 1/26/2004 226 EURO (Buy) 11,015 10,316 1/26/2004 699 EURO (Buy) 5 5 1/13/2004 -- EURO (Sell) 97 97 1/16/2004 -- EURO (Sell) 128 117 1/26/2004 (11) EURO (Sell) 221 204 1/26/2004 (17) EURO (Sell) 226 223 1/26/2004 (3) EURO (Sell) 260 257 3/31/2004 (3) EURO (Sell) 302 302 1/26/2004 -- EURO (Sell) 352 319 1/26/2004 (33) EURO (Sell) 519 505 3/24/2004 (14) EURO (Sell) 945 940 1/6/2004 (5) EURO (Sell) 1,050 950 1/26/2004 (100) EURO (Sell) 1,057 963 1/26/2004 (94) EURO (Sell) 1,479 1,373 1/26/2004 (106) EURO (Sell) 2,162 2,049 1/26/2004 (113) EURO (Sell) 2,606 2,567 1/26/2004 (39) EURO (Sell) 2,841 2,634 1/26/2004 (207) EURO (Sell) 3,528 3,286 1/26/2004 (242) EURO (Sell) 4,272 4,049 1/26/2004 (223) EURO (Sell) 5,249 5,036 1/26/2004 (213) EURO (Sell) 5,306 4,961 1/26/2004 (345) EURO (Sell) 6,301 5,894 1/26/2004 (407) EURO (Sell) 7,585 7,108 1/26/2004 (477) EURO (Sell) 13,361 12,512 1/26/2004 (849) EURO (Sell) 20,684 19,371 1/26/2004 (1,313) Japanese Yen (Buy) 422 420 3/11/2004 2 Japanese Yen (Buy) 512 509 1/21/2004 3 Japanese Yen (Buy) 997 985 1/21/2004 12 Japanese Yen (Buy) 1,365 1,348 1/21/2004 17 Japanese Yen (Buy) 1,662 1,658 1/21/2004 4 Japanese Yen (Buy) 1,741 1,719 1/21/2004 22 Japanese Yen (Sell) 205 205 1/21/2004 -- Japanese Yen (Sell) 383 378 1/21/2004 (5) Japanese Yen (Sell) 422 420 3/24/2004 (2) </Table> The accompanying notes are an integral part of this financial statement. 65 HARTFORD GLOBAL ADVISERS HLS FUND SCHEDULE OF INVESTMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> UNREALIZED MARKET CONTRACT DELIVERY APPRECIATION DESCRIPTION VALUE AMOUNT DATE (DEPRECIATION) - ----------- ------------ --------------- --------- -------------- Japanese Yen (Sell) $ 476 $ 477 3/11/2004 $ 1 Japanese Yen (Sell) 488 485 1/21/2004 (3) Japanese Yen (Sell) 557 547 1/21/2004 (10) Japanese Yen (Sell) 13,516 13,356 1/21/2004 (160) New Zealand Dollar (Sell) 24 23 1/13/2004 (1) New Zealand Dollar (Sell) 1,527 1,507 2/9/2004 (20) Norwegian Krone (Buy) 470 472 1/14/2004 (2) Norwegian Krone (Buy) 542 500 1/14/2004 42 Norwegian Krone (Buy) 1,034 1,024 1/14/2004 10 Singapore Dollar (Sell) 937 920 1/16/2004 (17) Singapore Dollar (Sell) 1,878 1,867 1/16/2004 (11) South African Rands (Buy) 252 251 1/27/2004 1 South African Rands (Buy) 256 255 1/27/2004 1 South Korean Won (Buy) 708 711 1/26/2004 (3) South Korean Won (Buy) 922 950 1/13/2004 (28) South Korean Won (Sell) 922 917 1/13/2004 (5) Swedish Krona (Buy) 2,075 1,984 1/22/2004 91 Swedish Krona (Buy) 2,297 2,195 1/22/2004 102 Swedish Krona (Sell) 18 17 1/22/2004 (1) Swedish Krona (Sell) 87 85 1/23/2004 (2) Swedish Krona (Sell) 149 141 1/22/2004 (8) Swedish Krona (Sell) 26 25 1/13/2004 (1) Swiss Franc (Buy) 540 530 1/13/2004 10 Swiss Franc (Buy) 857 773 1/13/2004 84 Swiss Franc (Buy) 2,139 2,055 1/13/2004 84 Swiss Franc (Sell) 113 111 1/13/2004 (2) Swiss Franc (Sell) 1,044 947 1/13/2004 (97) Swiss Franc (Sell) 1,044 949 1/26/2004 (95) Swiss Franc (Sell) 1,048 953 1/13/2004 (95) Swiss Franc (Sell) 1,280 1,161 1/13/2004 (119) ------- $(3,491) ======= </Table> ### FORWARD FOREIGN BONDS OUTSTANDING AT DECEMBER 31, 2003 <Table> <Caption> UNREALIZED MARKET CONTRACT DELIVERY APPRECIATION DESCRIPTION VALUE AMOUNT DATE (DEPRECIATION) - ----------- ------------ --------------- --------- -------------- Australian Government $ (5,097) $ (5,042) 2/19/2004 $ (55) Bundesobligation (7,055) (6,993) 2/4/2004 (62) Canadian Government (2,285) (2,277) 1/8/2004 (8) Canadian Government (12,464) (12,404) 2/10/2004 (60) Japanese Government (957) (959) 2/13/2004 (2) Japanese Government (1,575) (1,566) 2/18/2004 (9) Japanese Government (3,284) (3,305) 2/13/2004 21 U.K. Treasury Gilt (4,963) (4,864) 2/4/2004 (99) U.S. Treasury Notes (1,858) (1,842) 2/18/2004 (16) ----- $(286) ===== </Table> The accompanying notes are an integral part of this financial statement. 66 - -------------------------------------------------------------------------------- <Table> <Caption> STATEMENT OF ASSETS AND LIABILITIES: ASSETS Investment in securities, at value (total cost $363,805) -- including $12,413 of securities loaned (See Note 2(I)) -- see accompanying portfolio.................. $405,896 Receivable for securities sold.............................. 53,576 Receivable for Fund shares sold............................. 131 Receivable for dividends and interest....................... 2,179 Receivable for forward foreign bonds........................ 39,252 Cash and other assets....................................... 36 -------- Total assets................................................ $501,070 -------- LIABILITIES Payable for securities purchased............................ $ 94,334 Payable for futures contracts............................... 31 Payable for forward foreign bonds........................... 39,538 Securities lending collateral payable to brokers (See Note 2(i))..................................................... 12,949 Other liabilities........................................... -- Accrued expenses............................................ 81 Option contracts written (Premium received $32)............. 51 -------- Total liabilities........................................... 146,984 -------- Net assets.................................................. $354,086 ======== </Table> <Table> <Caption> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 1,000,000 shares authorized; 31,789 shares outstanding..................... $ 32 Paid in capital............................................. 363,878 Accumulated net investment income........................... 3,362 Accumulated net realized loss on investments................ (50,729) Unrealized appreciation on investments...................... 42,092 Unrealized depreciation on futures contracts *** ........... (222) Unrealized depreciation on forward foreign bonds ### ....... (286) Unrealized depreciation on forward foreign currency contracts (See Note 2(g)) @@@............................. (3,491) Unrealized depreciation on other assets and liabilities in foreign currencies........................................ (531) Unrealized depreciation on option contracts written (See Note 2(f))................................................ (19) -------- Net assets.................................................. $354,086 ======== </Table> <Table> <Caption> Class IA Net asset value per share ($312,492 / 28,038 shares outstanding) (800,000 shares authorized)................ $11.15 ====== Class IB Net asset value per share ($41,594 / 3,751 shares outstanding) (200,000 shares authorized)................ $11.09 ====== </Table> The accompanying notes are an integral part of this financial statement. 67 HARTFORD GLOBAL COMMUNICATIONS HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ------- COMMON STOCKS -- 91.6% AUSTRIA -- 4.3% - @95 Telekom Austria AG (Communications)............... $ 1,178 ------- BELGIUM -- 5.7% @28 Mobistar S.A. (Communications).................... 1,576 ------- BRAZIL -- 4.4% +76 Brasil Telecom S.A., ADR (Communications)......... 1,203 ------- FRANCE -- 4.7% -45 France Telecom S.A. (Communications).............. 1,295 ------- GREECE -- 4.1% 83 Cosmote Mobile Communications S.A. (Software & Services)....................................... 1,131 ------- INDONESIA -- 3.8% 64 PT Telekomunikasi Indonesia ADR (Communications)................................ 1,048 ------- ITALY -- 3.1% *+423 Telecom Italia S.p.A. (Communications)............ 861 ------- JAPAN -- 6.8% @@--- DDI Corp. (Communications)........................ 1,237 @@--- Nippon Telegraph & Telephone Corp. (Communications)................................ 629 ------- 1,866 ------- NETHERLANDS -- 3.2% *-114 Koninklijke KPN N.V. (Communications)............. 879 ------- NORWAY -- 9.1% - @383 Telenor ASA (Communications)...................... 2,510 ------- PHILIPPINES -- 9.1% *-144 Philippine Long Distance Telephone Co. (Communications)................................ 2,503 ------- SOUTH AFRICA -- 4.1% 27 Telekom South Africa Ltd., ADR (Communications)... 1,142 ------- SOUTH KOREA -- 2.2% -4 SK Telecom Co., Ltd. (Communications)............. 609 ------- TAIWAN -- 1.0% 18 Chunghwa Telecom Co., Ltd., ADR (Communications)................................ 267 ------- UNITED KINGDOM -- 4.8% -536 Vodafone Group PLC (Communications)............... 1,331 ------- UNITED STATES OF AMERICA -- 21.2% *92 Citizens Communications Co. (Utilities)........... 1,136 *63 Nextel Communications, Inc., Class A (Communications)................................ 1,772 *+114 Nextel Partners, Inc. (Communications)............ 1,535 *329 Qwest Communications International, Inc. (Communications)................................ 1,420 ------- 5,863 ------- Total common stocks............................... $25,262 ======= <Caption> PRINCIPAL MARKET AMOUNT VALUE # - --------- ------- CORPORATE NOTES V -- 2.3% UNITED STATES OF AMERICA -- 2.3% $ +630 Qwest Capital Funding, Inc. (Communications) (Caa2 Moodys) 7.25% due 02/15/11.............................. $ 621 ------- Total corporate notes............................. $ 621 ======= <Caption> SHARES - --------- SHORT-TERM SECURITIES -- 19.2% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 12.9% 3,570 State Street Navigator Securities Lending Prime Portfolio....................................... $ 3,570 ------- <Caption> PRINCIPAL AMOUNT - --------- REPURCHASE AGREEMENT -- 6.3% $1,738 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... 1,738 ------- Total short-term securities....................... $ 5,308 ======= </Table> <Table> <Caption> DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $18,104)........ 91.6% $25,262 Total corporate notes (cost $385)......... 2.3 621 Total short-term securities (cost $5,308)................................. 19.2 5,308 ----- ------- Total investment in securities (total cost $23,797) -- including $3,479 of securities loaned (See Note 2(i))....... 113.1 31,191 Cash, receivables and other assets........ 3.0 829 Payable for securities purchased.......... (3.2) (853) Securities lending collateral payable to brokers (See Note 2(i))................. (12.9) (3,570) Other liabilities......................... (0.0) (7) ----- ------- Net assets................................ 100.0% $27,590 ===== ======= </Table> <Table> <Caption> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 800,000 shares authorized; 3,851 shares outstanding.... $ 4 Paid in capital.................................. 25,398 Accumulated net investment income................ 2 Accumulated net realized loss on investments..... (5,209) Unrealized appreciation on investments........... 7,394 Unrealized appreciation on other assets and liabilities in foreign currencies.............. 1 ------- Net assets....................................... $27,590 ======= </Table> <Table> Class IA Net asset value per share ($17,302 / 2,412 shares outstanding) (600,000 shares authorized)....... $7.17 ===== Class IB Net asset value per share ($10,288 / 1,439 shares outstanding) (200,000 shares authorized)....... $7.15 ===== </Table> The accompanying notes are an integral part of this financial statement. 68 <Table> <Caption> MARKET VALUE # ------- DIVERSIFICATION BY INDUSTRY Communications............................. 83.3% $22,995 Software & Services........................ 4.1 1,131 Utilities.................................. 4.2 1,136 ---- ------- Total common stocks........................ 91.6% $25,262 ==== ======= </Table> <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 70.3% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). @ Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2003, the market value of these securities amounted to $5,264 or 19.1% of net assets. (See Note 2(m)). - Security valued in good faith at fair value by, or under the direction of, the Funds' Board of Directors. The aggregate value of these securities as of December 31, 2003 was $12,171, which represents 44.1% of total net assets. @@ Due to the presentation of the financial statements in thousands, the number of shares and/or market value round to zero. V The bond ratings are unaudited. </Table> The accompanying notes are an integral part of this financial statement. 69 HARTFORD GLOBAL FINANCIAL SERVICES HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ------- COMMON STOCKS -- 97.0% BANKS -- 57.8% -119 Banca Intesa S.p.A. .............................. $ 465 *45 Banco Latinoamericano de Exportaciones S.A., E Shares.......................................... 869 +-3 Banco Popular Espanol S.A. ....................... 185 +-100 Banco Santander Central Hispano S.A. ............. 1,196 34 Bank One Corp. ................................... 1,532 14 Bank of America Corp. ............................ 1,142 17 Bank of Bermuda Ltd. ............................. 754 16 Bank of Hawaii Corp. ............................. 688 -67 Barclays PLC...................................... 605 3 Canadian Western Bank............................. 98 31 Citigroup, Inc. .................................. 1,487 5 Countrywide Credit Industries, Inc. .............. 407 -36 Credit Agricole S.A. ............................. 862 10 Federal National Mortgage Association............. 607 18 Federal Home Loan Mortgage Association............ 1,366 5 Golden West Financial Corp. ...................... 516 -93 HSBC Holdings PLC................................. 1,463 41 Hibernia Corp., Class A........................... 955 -@@-- Mitsubishi Tokyo Financial Group, Inc. ........... 444 3 People's Bank..................................... 85 -41 Royal Bank of Scotland Group PLC.................. 1,198 -7 Societe Generale.................................. 584 +-@@-- Sumitomo Mitsui Financial Group, Inc. ............ 227 -20 UBS AG............................................ 1,356 7 Unibanco GDR...................................... 180 -81 Westpac Banking Corp. ............................ 973 ------- 20,244 ------- FINANCIAL SERVICES -- 14.5% -24 ABSA Group Ltd. .................................. 151 -89 Amvescap PLC...................................... 651 13 Converium Holding AG, ADR......................... 337 -11 Credit Saison Co., Ltd. .......................... 238 -8 Danske Bank....................................... 179 9 Federated Investors, Inc., Class B................ 252 8 Franklin Resources, Inc. ......................... 416 7 Goldman Sachs Group, Inc. (The)................... 691 10 Merrill Lynch & Co., Inc. ........................ 604 6 Morgan Stanley Dean Witter & Co. ................. 347 *10 Nasdaq Stock Market, Inc. ........................ 98 30 Standard Bank Group Ltd. ......................... 176 +-172 UniCredito Italiano S.p.A. ....................... 930 ------- 5,070 ------- INSURANCE -- 24.7% 32 Ace Ltd. ......................................... 1,309 14 Ambac Financial Group, Inc. ...................... 978 18 American International Group, Inc. ............... 1,213 29 Cincinnati Financial Corp. ....................... 1,195 *44 Clark, Inc. ...................................... 839 13 MBIA, Inc. ....................................... 746 23 Marsh & McLennan Cos., Inc. ...................... 1,101 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ------- INSURANCE -- (CONTINUED) -28 Nomura Securities................................. $ 475 20 Reinsurance Group of America, Inc. ............... 769 ------- 8,625 ------- Total common stocks............................... $33,939 ======= SHORT-TERM SECURITIES -- 10.8% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 6.4% 2,227 State Street Navigator Securities Lending Prime Portfolio....................................... $ 2,227 <Caption> PRINCIPAL AMOUNT - --------- REPURCHASE AGREEMENTS -- 4.4% $ 1,536 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... 1,536 ------- Total short-term securities....................... $ 3,763 ======= </Table> <Table> <Caption> DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $29,734)........... 97.0% $33,939 Total short-term securities (cost $3,763).... 10.8 3,763 ----- ------- Total investment in securities (total cost $33,497) -- including $2,111 of securities loaned (See Note 2(i))..................... 107.8 37,702 Cash, receivables and other assets........... 0.4 171 Payable for securities purchased............. (1.8) (645) Securities lending collateral payable to brokers (See Note 2(i)).................... (6.4) (2,227) Other liabilities............................ (0.0) (5) ----- ------- Net assets................................... 100.0% $34,996 ===== ======= </Table> <Table> <Caption> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 800,000 shares authorized; 3,629 shares outstanding........ $ 4 Paid in capital...................................... 32,574 Accumulated net investment loss...................... (5) Accumulated net realized loss on investments......... (1,783) Unrealized appreciation on investments............... 4,205 Unrealized appreciation on forward foreign currency contracts (See Note 2(g))@@@....................... 2 Unrealized depreciation on other assets and liabilities in foreign currencies.................. (1) ------- Net assets........................................... $34,996 ======= </Table> <Table> <Caption> Class IA Net asset value per share ($18,940 / 1,962 shares outstanding) (600,000 shares authorized)........... $9.65 ===== Class IB Net asset value per share ($16,056 / 1,667 shares outstanding) (200,000 shares authorized)........... $9.63 ===== </Table> The accompanying notes are an integral part of this financial statement. 70 - -------------------------------------------------------------------------------- <Table> <Caption> PERCENTAGE OF NET ASSETS ------------- DIVERSIFICATION BY COUNTRY: United States of America........................ 68.3% United Kingdom.................................. 11.2 Switzerland..................................... 4.8 France.......................................... 4.1 Italy........................................... 4.0 Japan........................................... 4.0 Spain........................................... 3.9 Australia....................................... 2.8 Panama.......................................... 2.5 South Africa.................................... 0.9 Brazil.......................................... 0.5 Denmark......................................... 0.5 Canada.......................................... 0.3 ----- Total......................................... 107.8% ===== </Table> <Table> <Caption> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 39.5% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). - Security valued in good faith at fair value by, or under the direction of, the Funds' Board of Directors. The aggregate value of these securities as of December 31, 2003 was $12,182, which represents 34.8% of total net assets. @@ Due to the presentation of the financial statements in thousands, the number of shares and/or market value round to zero. </Table> @@@FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING AT DECEMBER 31, 2003 <Table> <Caption> UNREALIZED CONTRACT DELIVERY APPRECIATION DESCRIPTION MARKET VALUE AMOUNT DATE (DEPRECIATION) - ----------- -------------- -------- -------- -------------- Canadian Dollars (Buy) $ 3 $ 3 1/6/2004 $-- Danish Krone (Buy) 7 7 1/2/2004 -- EURO (Buy) 63 62 1/2/2004 1 South African Rands (Buy) 29 28 1/2/2004 1 --- $ 2 === </Table> The accompanying notes are an integral part of this financial statement. 71 HARTFORD GLOBAL HEALTH HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- 97.7% CHEMICALS -- 0.9% +-110 Bayer AG.......................................... $ 3,230 -------- CONSUMER NON-DURABLES -- 7.7% 114 Cardinal Health, Inc. ............................ 6,960 253 McKesson Corp. ................................... 8,149 *397 Medco Health Solutions, Inc. ..................... 13,487 -------- 28,596 -------- DRUGS -- 59.0% 442 Abbott Laboratories............................... 20,588 *+223 Abgenix, Inc. .................................... 2,779 +369 AstraZeneca PLC, ADR.............................. 17,843 *+130 AtheroGenics, Inc. ............................... 1,942 +241 Aventis S.A., ADR................................. 15,962 *+87 Cephalon, Inc. ................................... 4,212 *+73 Connetics Corp. .................................. 1,333 *+473 Elan Corp., ADR................................... 3,257 229 Eli Lilly & Co. .................................. 16,120 *147 Forest Laboratories, Inc. ........................ 9,072 *338 Fujisawa Pharmaceutical Co., Ltd. ................ 7,207 *295 Genzyme Corp. .................................... 14,531 *110 Gilead Sciences, Inc. ............................ 6,395 *97 Ilex Oncology, Inc. .............................. 2,051 *318 King Pharmaceuticals, Inc. ....................... 4,854 *+166 Medicines Co. (The)............................... 4,884 *201 Millennium Pharmaceuticals, Inc. ................. 3,755 -325 Novartis AG....................................... 14,859 *+42 OSI Pharmaceuticals, Inc. ........................ 1,356 170 Schering AG....................................... 8,614 1,460 Schering-Plough Corp. ............................ 25,395 -12 Serono S.A., Class B.............................. 8,418 -393 Shionogi & Co., Ltd. ............................. 7,338 *101 Vertex Pharmaceuticals, Inc. ..................... 1,030 *68 Watson Pharmaceuticals, Inc. ..................... 3,114 292 Wyeth............................................. 12,400 *24 Zymogenetics, Inc. ............................... 372 -------- 219,681 -------- HEALTH SERVICES -- 2.6% *165 Edwards Lifesciences Corp. ....................... 4,975 *+120 Human Genome Sciences, Inc. ...................... 1,593 *79 Laboratory Corp. of American Holdings............. 2,930 -------- 9,498 -------- INSURANCE -- 4.0% 47 Aetna, Inc. ...................................... 3,170 *156 Anthem, Inc. ..................................... 11,723 -------- 14,893 -------- MEDICAL INSTRUMENTS & SUPPLIES -- 17.1% 284 Baxter International, Inc. ....................... 8,677 118 Beckman Coulter, Inc. ............................ 5,993 197 Becton, Dickinson & Co. .......................... 8,100 *115 CTI Molecular Imaging, Inc. ...................... 1,936 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- -------- MEDICAL INSTRUMENTS & SUPPLIES -- (CONTINUED) 268 Chugai Pharmaceutical Co., Ltd. .................. $ 3,849 -306 Eisai Co., Ltd. .................................. 8,278 +-518 Gambro, B Shares.................................. 4,281 183 Guidant Corp. .................................... 11,011 -182 Olympus Optical Co., Ltd. ........................ 3,972 -92 Takeda Chemical Industries Ltd. .................. 3,643 *+198 Viasys Healthcare, Inc. .......................... 4,071 -------- 63,811 -------- RESEARCH & TESTING FACILITIES -- 6.0% *+136 Amylin Pharmaceuticals, Inc. ..................... 3,015 *554 Applera Corp. -- Celera Genomics Group............ 7,712 *48 Ariad Pharmaceuticals, Inc. ...................... 359 *+202 CV Therapeutics, Inc. ............................ 2,954 *+212 Ciphergen Biosystems, Inc. ....................... 2,384 *+521 Exelixis, Inc. ................................... 3,687 *+162 Regeneron Pharmaceuticals, Inc. .................. 2,389 -------- 22,500 -------- SOFTWARE & SERVICES -- 0.4% *+28 Cerner Corp. ..................................... 1,048 *+31 Dendrite International, Inc. ..................... 481 -------- 1,529 -------- Total common stocks............................... $363,738 ======== SHORT-TERM SECURITIES -- 21.1% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 17.4% 64,931 State Street Navigator Securities Lending Prime Portfolio....................................... $ 64,931 -------- <Caption> PRINCIPAL AMOUNT - --------- REPURCHASE AGREEMENTS -- 3.7% $ 13,600 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... 13,600 -------- Total short-term securities....................... $ 78,531 ======== </Table> <Table> DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $332,691)............... 97.7% $363,738 Total short-term securities (cost $78,531)........ 21.1 78,531 ----- -------- Total investment in securities (total cost $411,222) -- including $63,120 of securities loaned (See Note 2(i))............... 118.8 442,269 Cash, receivables and other assets................ 0.3 1,170 Payable for securities purchased.................. (1.7) (6,039) Payable for Fund shares redeemed.................. (0.0) (11) Securities lending collateral payable to brokers (See Note 2(i))................................. (17.4) (64,931) Other liabilities................................. (0.0) (22) ----- -------- Net assets........................................ 100.0% $372,436 ===== ======== </Table> The accompanying notes are an integral part of this financial statement. 72 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET VALUE # -------- SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 800,000 shares authorized; 24,032 shares outstanding...... $ 24 Paid in capital..................................... 327,769 Accumulated net investment income................... 172 Accumulated net realized gain on investments........ 13,429 Unrealized appreciation on investments.............. 31,047 Unrealized appreciation on forward foreign currency contracts (See Note 2(g))@@@...................... 19 Unrealized depreciation on other assets and liabilities in foreign currencies................. (24) -------- Net assets.......................................... $372,436 ======== </Table> <Table> <Caption> Class IA Net asset value per share ($268,844 / 17,318 shares outstanding) (600,000 shares authorized).......... $15.52 ====== Class IB Net asset value per share ($103,592 / 6,714 shares outstanding) (200,000 shares authorized).......... $15.43 ====== </Table> <Table> <Caption> PERCENTAGE OF NET ASSETS ------------- DIVERSIFICATION BY COUNTRY: United States of America........................ 89.1% Japan........................................... 9.2 Switzerland..................................... 6.2 United Kingdom.................................. 4.8 France.......................................... 4.3 Germany......................................... 3.2 Sweden.......................................... 1.1 Ireland......................................... 0.9 ----- Total......................................... 118.8% ===== </Table> <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 29.7% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). - Security valued in good faith at fair value by, or under the direction of, the Funds' Board of Directors. The aggregate value of these securities as of December 31, 2003 was $54,019, which represents 14.5% of total net assets. </Table> @@@FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING AT DECEMBER 31, 2003 <Table> <Caption> UNREALIZED CONTRACT DELIVERY APPRECIATION DESCRIPTION MARKET VALUE AMOUNT DATE (DEPRECIATION) - ----------- ------------ -------- -------- -------------- EURO (Buy) $1,856 $1,837 1/2/2004 $ 19 Japanese Yen (Buy) 153 153 1/7/2004 -- ---- $ 19 ==== </Table> The accompanying notes are an integral part of this financial statement. 73 HARTFORD GLOBAL LEADERS HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- --------- COMMON STOCKS -- 96.8% AEROSPACE & DEFENSE -- 1.5% +4,434 China Merchants Holdings International Co., Ltd. ........................................... $ 5,854 +-291 European Aeronautic Defense & Space Co. .......... 6,952 --------- 12,806 --------- AGRICULTURE & FISHING -- 0.2% -93 Nokia Oyj......................................... 1,594 BANKS -- 8.0% 365 Bank One Corp. ................................... 16,627 339 Citigroup, Inc. .................................. 16,474 54 Countrywide Credit Industries, Inc. .............. 4,126 -331 Credit Suisse Group............................... 12,064 -162 Deutsche Bank AG.................................. 13,366 97 Federal Home Loan Mortgage Association............ 5,645 --------- 68,302 --------- BUSINESS SERVICES -- 2.9% *922 Cendant Corp. .................................... 20,537 -1 Dentsu, Inc. ..................................... 4,594 --------- 25,131 --------- COMMUNICATIONS -- 10.4% -2,875 Carphone Warehouse Group PLC...................... 7,585 -1 DDI Corp. ........................................ 4,337 -571 Deutsche Telekom AG............................... 10,368 *109 NTL, Inc. ........................................ 7,617 *+185 Research in Motion Ltd. .......................... 12,350 -7,326 Telefonaktiebolaget LM Ericsson................... 12,931 -8,724 Vodafone Group PLC................................ 21,677 *+1,209 Wanadoo........................................... 9,916 *+100 XM Satellite Radio Holdings, Inc. ................ 2,628 --------- 89,409 --------- COMPUTERS & OFFICE EQUIPMENT -- 2.9% *578 Cisco Systems, Inc. .............................. 14,047 *317 Dell, Inc. ....................................... 10,762 --------- 24,809 --------- CONSTRUCTION -- 2.5% 3,634 ABB Ltd. ......................................... 18,423 34 Lennar Corp. ..................................... 3,283 --------- 21,706 --------- CONSUMER NON-DURABLES -- 5.0% 659 Gillette Co. (The)................................ 24,190 *195 Medco Health Solutions, Inc. ..................... 6,611 466 Tyco International Ltd. .......................... 12,338 --------- 43,139 --------- DRUGS -- 10.9% -198 AstraZeneca PLC................................... 9,495 197 Eli Lilly & Co. .................................. 13,873 *261 Forest Laboratories, Inc. ........................ 16,136 373 Pfizer, Inc. ..................................... 13,180 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- --------- DRUGS -- (CONTINUED) -230 Roche Holdings AG................................. $ 23,227 213 Schering AG....................................... 10,767 +117 Teva Pharmaceutical Industries Ltd., ADR.......... 6,646 --------- 93,324 --------- EDUCATION -- 0.5% *67 Apollo Group, Inc. ............................... 4,576 --------- ELECTRICAL EQUIPMENT -- 1.0% *59 KLA-Tencor Corp. ................................. 3,444 -1,958 Techtronic Industries Co. ........................ 5,462 --------- 8,906 --------- ELECTRONICS -- 5.7% *328 Altera Corp. ..................................... 7,450 106 Analog Devices, Inc. ............................. 4,857 -738 Matsushita Electric Industrial Co. ............... 10,270 @=30 Samsung Electronics Co., Ltd., GDR................ 5,636 +-263 Siemens AG........................................ 20,961 --------- 49,174 --------- ENERGY & SERVICES -- 7.6% 114 Apache Corp. ..................................... 9,205 -3,306 Cnooc Ltd. ....................................... 6,522 217 Exxon Mobil Corp. ................................ 8,909 *260 Noble Corp. ...................................... 9,317 189 Schlumberger Ltd. ................................ 10,315 -114 TotalFinaElf S.A., B Shares....................... 21,096 --------- 65,364 --------- FINANCIAL SERVICES -- 1.7% 254 Merrill Lynch & Co., Inc. ........................ 14,888 FOOD, BEVERAGE & TOBACCO -- 5.2% 375 Altria Group, Inc. ............................... 20,429 -1,262 Compass Group PLC................................. 8,602 -655 Imperial Tobacco Group PLC........................ 12,914 - @@-- Japan Tobacco, Inc. .............................. 2,428 --------- 44,373 --------- INSURANCE -- 3.6% -126 Allianz AG........................................ 15,996 -120 Muenchener Rueckversicherungs Gesellschaft AG..... 14,666 --------- 30,662 --------- MACHINERY -- 4.3% *-296 ASML Holding N.V. ................................ 5,923 -530 Atlas Copco AB.................................... 19,031 179 Deere (John) & Co. ............................... 11,657 --------- 36,611 --------- MEDIA & ENTERTAINMENT -- 4.2% 71 Clear Channel Communications, Inc. ............... 3,325 *466 Comcast Corp., Special Class A.................... 14,580 +-1,017 Mediaset S.p.A. .................................. 12,107 *148 Univision Communications, Inc. ................... 5,854 --------- 35,866 --------- </Table> The accompanying notes are an integral part of this financial statement. 74 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- --------- COMMON STOCKS -- (CONTINUED) MEDICAL INSTRUMENTS & SUPPLIES -- 4.2% *361 Boston Scientific Corp. .......................... $ 13,263 329 Guidant Corp. .................................... 19,782 -35 Sanofi-Synthelabo S.A. ........................... 2,662 --------- 35,707 --------- METALS, MINERALS & MINING -- 1.7% *6,927 Corus Group PLC................................... 3,720 +165 JSC Mining & Smelting Co., ADR.................... 10,737 --------- 14,457 --------- RETAIL -- 3.9% -103 Fast Retailing Co., Ltd. ......................... 6,307 -2,000 Kingfisher PLC.................................... 10,009 -126 Pinault Printemps Redoute S.A. ................... 12,253 *180 Staples, Inc. .................................... 4,914 --------- 33,483 --------- SOFTWARE & SERVICES -- 4.5% -40 Advantest Corp. .................................. 3,204 306 Microsoft Corp. .................................. 8,436 -69 SAP AG............................................ 11,441 *334 Yahoo!, Inc. ..................................... 15,074 --------- 38,155 --------- TRANSPORTATION -- 4.4% 217 BMW AG............................................ 10,073 *-2,229 British Airways PLC............................... 9,291 +-60 Renault S.A. ..................................... 4,120 150 United Technologies Corp. ........................ 14,168 --------- 37,652 --------- Total common stocks............................... $ 830,094 ========= </Table> <Table> SHORT-TERM SECURITIES -- 10.9% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 7.2% 61,510 State Street Navigator Securities Lending Prime Portfolio....................................... $ 61,510 --------- PRINCIPAL AMOUNT ------- REPURCHASE AGREEMENTS -- 3.7% $32,220 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... 32,220 --------- Total short-term securities....................... $ 93,730 ========= </Table> <Table> <Caption> MARKET VALUE # --------- DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $710,266)........ 96.8% $ 830,094 Total short-term securities (cost $93,730)................................. 10.9 93,730 ----- --------- Total investment in securities (total cost $803,996) -- including $58,863 of securities loaned (See Note 2(i))........ 107.7 923,824 Cash, receivables and other assets......... 0.2 2,058 Payable for securities purchased........... (0.4) (3,926) Payable for Fund shares redeemed........... (0.3) (3,002) Securities lending collateral payable to brokers (See Note 2(i)).................. (7.2) (61,510) Other liabilities.......................... (0.0) (80) ----- --------- Net assets................................. 100.0% $ 857,364 ===== ========= </Table> <Table> <Caption> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 3,400,000 shares authorized; 55,251 shares outstanding................................... $ 55 Paid in capital................................. 922,167 Accumulated net investment income............... 1,723 Accumulated net realized loss on investments.... (186,432) Unrealized appreciation on investments.......... 119,828 Unrealized appreciation on forward foreign currency contracts (See Note 2(g))@@@......... 4 Unrealized appreciation on other assets and liabilities in foreign currencies............. 19 --------- Net assets...................................... $ 857,364 ========= </Table> <Table> <Caption> Class IA Net asset value per share ($728,049 / 46,890 shares outstanding) (3,200,000 shares authorized)................................... $15.53 ====== Class IB Net asset value per share ($129,315 / 8,362 shares outstanding) (200,000 shares authorized)................................... $15.47 ====== </Table> <Table> <Caption> PERCENTAGE OF NET ASSETS DIVERSIFICATION BY COUNTRY: ---------- United States of America........................... 56.6% Germany............................................ 12.6 United Kingdom..................................... 9.7 Switzerland........................................ 6.3 France............................................. 5.8 Sweden............................................. 3.7 Japan.............................................. 3.6 Hong Kong.......................................... 2.1 Netherlands........................................ 1.5 Canada............................................. 1.4 Italy.............................................. 1.4 Russia............................................. 1.3 Israel............................................. 0.8 South Korea........................................ 0.7 Finland............................................ 0.2 ----- Total............................................ 107.7% ===== </Table> The accompanying notes are an integral part of this financial statement. 75 HARTFORD GLOBAL LEADERS HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 51.1% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). @ Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2003, the market value of these securities amounted to $5,636 or 0.7% of net assets (See Note 2(m)). - Security valued in good faith at fair value by, or under the direction of, the Funds' Board of Directors. The aggregate value of these securities as of December 31, 2003 was $343,455, which represents 40.1% of total net assets. @@ Due to the presentation of the financial statements in thousands, the number of shares and/or market value round to zero. </Table> @@@FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING AT DECEMBER 31, 2003 <Table> <Caption> UNREALIZED MARKET CONTRACT DELIVERY APPRECIATION DESCRIPTION VALUE AMOUNT DATE (DEPRECIATION) - ----------- ------ -------- -------- -------------- British Pound (Buy) $516 $512 1/5/2004 $4 == </Table> The accompanying notes are an integral part of this financial statement. 76 HARTFORD GLOBAL TECHNOLOGY HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- 99.6% BUSINESS SERVICES -- 5.0% *144 Accenture Ltd. ................................... $ 3,795 *241 Cendant Corp. .................................... 5,376 -------- 9,171 -------- COMMUNICATIONS -- 11.7% 57 ADTRAN, Inc. ..................................... 1,761 *70 Foundry Networks, Inc. ........................... 1,923 *+295 McDATA Corp. ..................................... 2,814 404 Motorola, Inc. ................................... 5,689 204 Nokia Corp., ADR.................................. 3,468 *389 Nortel Networks Corp. ............................ 1,645 *26 Plantronics, Inc. ................................ 855 *@117 Quanta Computer, Inc., GDR........................ 1,444 *104 Telefonaktiebolaget LM Ericsson ADR............... 1,843 -------- 21,442 -------- COMPUTERS & OFFICE EQUIPMENT -- 17.8% *206 Brocade Communications Systems, Inc. ............. 1,192 *246 Cisco Systems, Inc. .............................. 5,973 *225 Dell, Inc. ....................................... 7,648 *278 EMC Corp. ........................................ 3,590 *68 Emulex Corp. ..................................... 1,806 379 Hewlett-Packard Co. .............................. 8,708 *319 Maxtor Corp. ..................................... 3,543 -------- 32,460 -------- CONSUMER DURABLES -- 2.8% *494 Corning, Inc. .................................... 5,153 -------- ELECTRICAL EQUIPMENT -- 1.5% *47 KLA-Tencor Corp. ................................. 2,757 -------- ELECTRONICS -- 30.5% *+135 ASE Test Ltd. .................................... 2,027 *+154 ASM Lithography Holding N.V., NY Reg Shares....... 3,087 *219 Altera Corp. ..................................... 4,962 43 American Power Conversion Corp. .................. 1,051 99 Analog Devices, Inc. ............................. 4,497 *141 Fairchild Semiconductor International Corp., Class A............................................... 3,511 *29 NEC Electronics Corp. ............................ 2,136 *34 QLogic Corp. ..................................... 1,729 *+314 RF Micro Devices, Inc. ........................... 3,153 +260 STMicroelectronics N.V., NY Reg Shares............ 7,031 **-11 Samsung Electronics Co., Ltd., GDR................ 2,020 *+199 Skyworks Solutions, Inc. ......................... 1,730 -63 Sony Corp. ....................................... 2,183 *-773 Taiwan Semiconductor Manufacturing Co., Ltd. ..... 1,441 155 Texas Instruments, Inc. .......................... 4,554 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- -------- ELECTRONICS -- (CONTINUED) -24 Tokyo Electron Ltd. .............................. $ 1,827 *-1,719 United Microelectronics Corp. .................... 1,472 *+40 Varian Semiconductor Equipment Associates, Inc. ........................................... 1,748 *145 Xilinx, Inc. ..................................... 5,625 -------- 55,784 -------- MACHINERY -- 1.0% *79 Applied Materials, Inc. .......................... 1,774 -------- MEDIA & ENTERTAINMENT -- 1.0% *101 Time Warner, Inc. ................................ 1,812 -------- RETAIL -- 0.0% *12 Compucom Systems, Inc. ........................... 62 -------- SOFTWARE & SERVICES -- 27.7% *148 BEA Systems, Inc. ................................ 1,814 *93 BISYS Group, Inc. (The)........................... 1,381 *56 Cadence Design Systems, Inc. ..................... 1,001 *70 Cognos, Inc. ..................................... 2,128 *69 Computer Sciences Corp. .......................... 3,061 *+1 Embarcadero Technologies, Inc. ................... 16 181 First Data Corp. ................................. 7,441 *10 Intuit, Inc. ..................................... 524 550 Microsoft Corp. .................................. 15,152 *+270 Red Hat, Inc. .................................... 5,064 *30 Symantec Corp. ................................... 1,033 *235 VeriSign, Inc. ................................... 3,824 *168 Yahoo!, Inc. ..................................... 7,566 *+67 webMethods, Inc. ................................. 611 -------- 50,616 -------- TRANSPORTATION -- 0.6% 44 Sabre Holdings Corp. ............................. 948 -------- Total common stocks............................... $181,979 ======== SHORT-TERM SECURITIES -- 9.2% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 8.4% 15,301 State Street Navigator Securities Lending Prime Portfolio....................................... $ 15,301 -------- <Caption> PRINCIPAL AMOUNT - --------- REPURCHASE AGREEMENTS -- 0.8% $ 1,484 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... 1,484 -------- Total short-term securities....................... $ 16,785 ======== </Table> The accompanying notes are an integral part of this financial statement. 77 <Table> MARKET VALUE # -------- DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $159,892)...... 99.6% $181,979 Total short-term securities (cost $16,785)............................... 9.2 16,785 ----- -------- Total investment in securities (total cost $176,677) -- including $14,843 of securities loaned (See Note 2(i))...... 108.8 198,764 Cash, receivables and other assets....... 2.3 4,127 Payable for securities purchased......... (2.5) (4,581) Payable for Fund shares redeemed......... (0.2) (321) Securities lending collateral payable to brokers (See Note 2(i))................ (8.4) (15,301) Other liabilities........................ (0.0) (13) ----- -------- Net assets............................... 100.0% $182,675 ===== ======== </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 800,000 shares authorized; 37,521 shares outstanding................................... $ 38 Paid in capital................................. 240,164 Accumulated net investment loss................. (7) Accumulated net realized loss on investments.... (79,607) Unrealized appreciation on investments.......... 22,087 Unrealized appreciation on forward foreign currency contracts (See Note 2(g))@@@......... 2 Unrealized depreciation on other assets and liabilities in foreign currencies............. (2) -------- Net assets...................................... $182,675 ======== </Table> <Table> Class IA Net asset value per share ($138,243 / 28,345 shares outstanding) (600,000 shares authorized).................................... $4.88 ===== Class IB Net asset value per share ($44,432 / 9,176 shares outstanding) (200,000 shares authorized)....... $4.84 ===== </Table> <Table> <Caption> PERCENTAGE OF NET ASSETS ------------- DIVERSIFICATION BY COUNTRY: United States of America..................... 90.3% Switzerland.................................. 3.8 Taiwan....................................... 3.5 Japan........................................ 3.4 Canada....................................... 2.1 Finland...................................... 1.9 Netherlands.................................. 1.7 South Korea.................................. 1.1 Sweden....................................... 1.0 ----- Total...................................... 108.8% ===== </Table> <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 18.5% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). - Security valued in good faith at fair value by, or under the direction of, the Funds' Board of Directors. The aggregate value of these securities as of December 31, 2003 was $8,944, which represents 4.9% of total net assets. @ Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2003, the market value of these securities amounted to $1,444 or 0.8% of net assets (See Note 2(m)). ** Securities contain some restriction as to public resale. At December 31, 2003, the market value of these securities amounted to $2,020 or 1.1% of net assets (See Note 2(m)). </Table> @@@FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING AT DECEMBER 31, 2003 <Table> <Caption> UNREALIZED CONTRACT DELIVERY APPRECIATION DESCRIPTION MARKET VALUE AMOUNT DATE (DEPRECIATION) - ----------- ------------ -------- -------- -------------- Japanese Yen (Sell) $ 1,160 $1,162 1/7/2004 $ 2 --- $ 2 === </Table> The accompanying notes are an integral part of this financial statement. 78 HARTFORD GROWTH HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- 98.5% BANKS -- 9.1% 37 Capital One Financial Corp. ...................... $ 2,278 110 Citigroup, Inc. .................................. 5,322 134 Countrywide Credit Industries, Inc. .............. 10,176 29 Federal National Mortgage Association............. 2,144 -------- 19,920 -------- BUSINESS SERVICES -- 3.8% 94 Omnicom Group, Inc. .............................. 8,230 -------- COMMUNICATIONS -- 2.6% *33 NTL, Inc. ........................................ 2,323 *124 Telefonaktiebolaget LM Ericsson ADR............... 2,191 *43 XM Satellite Radio Holdings, Inc. ................ 1,143 -------- 5,657 -------- COMPUTERS & OFFICE EQUIPMENT -- 7.7% *298 Dell, Inc. ....................................... 10,130 *309 EMC Corp. ........................................ 3,988 145 Seagate Technology................................ 2,745 -------- 16,863 -------- CONSTRUCTION -- 1.3% 30 Lennar Corp. ..................................... 2,850 -------- CONSUMER DURABLES -- 3.4% *708 Corning, Inc. .................................... 7,388 -------- CONSUMER NON-DURABLES -- 2.1% 30 McKesson Corp. ................................... 969 *107 Medco Health Solutions, Inc. ..................... 3,625 -------- 4,594 -------- DRUGS -- 14.1% 84 Abbott Laboratories............................... 3,917 167 AstraZeneca PLC, ADR.............................. 8,103 121 Eli Lilly & Co. .................................. 8,494 *88 Forest Laboratories, Inc. ........................ 5,410 *33 Genzyme Corp. .................................... 1,609 *20 Gilead Sciences, Inc. ............................ 1,167 123 Serono S.A., ADR.................................. 2,163 -------- 30,863 -------- EDUCATION -- 4.5% *144 Apollo Group, Inc. ............................... 9,803 -------- ELECTRICAL EQUIPMENT -- 1.5% *57 KLA-Tencor Corp. ................................. 3,331 -------- ELECTRONICS -- 5.5% *245 Altera Corp. ..................................... 5,564 106 Analog Devices, Inc. ............................. 4,819 *40 Xilinx, Inc. ..................................... 1,543 -------- 11,926 -------- FINANCIAL SERVICES -- 1.0% 44 Franklin Resources, Inc. ......................... 2,265 -------- INSURANCE -- 1.6% 83 Ace Ltd. ......................................... 3,448 -------- </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- -------- MEDIA & ENTERTAINMENT -- 8.1% 49 Clear Channel Communications, Inc. ............... $ 2,291 *156 Comcast Corp. .................................... 4,877 *63 COX Communications, Inc. ......................... 2,166 *97 EchoStar Communications Corp., Class A............ 3,287 *129 Univision Communications, Inc. ................... 5,131 -------- 17,752 -------- MEDICAL INSTRUMENTS & SUPPLIES -- 4.9% 159 Guidant Corp. .................................... 9,548 22 Medtronic, Inc. .................................. 1,077 -------- 10,625 -------- RESEARCH & TESTING FACILITIES -- 1.5% 54 Moody's Corp. .................................... 3,259 -------- RETAIL -- 7.3% *77 AutoZone, Inc. ................................... 6,582 35 Best Buy Co., Inc. ............................... 1,835 *115 eBay, Inc. ....................................... 7,440 -------- 15,857 -------- SOFTWARE & SERVICES -- 18.5% *84 Amdocs Ltd., ADR.................................. 1,883 211 First Data Corp. ................................. 8,651 *20 Intuit, Inc. ..................................... 1,076 *53 Mercury Interactive Corp. ........................ 2,578 196 Microsoft Corp. .................................. 5,410 52 SAP AG, ADR....................................... 2,168 *68 SunGard Data Systems, Inc. ....................... 1,892 *174 Symantec Corp. ................................... 6,042 *232 Yahoo!, Inc. ..................................... 10,460 -------- 40,160 -------- Total common stocks............................... $214,791 ======== <Caption> PRINCIPAL AMOUNT - --------- SHORT-TERM SECURITIES -- 2.8% REPURCHASE AGREEMENTS -- 2.8% $6,188 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... $ 6,188 -------- Total short-term securities....................... $ 6,188 ======== </Table> <Table> <Caption> DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $194,679)...... 98.5% $214,791 Total short-term securities (cost $6,188)................................ 2.8 6,188 ----- -------- Total investment in securities (total cost $200,867)......................... 101.3 220,979 Cash, receivables and other assets....... 0.8 1,784 Payable for securities purchased......... (2.1) (4,618) Other liabilities........................ (0.0) (13) ----- -------- Net assets............................... 100.0% $218,132 ===== ======== </Table> The accompanying notes are an integral part of this financial statement. 79 <Table> <Caption> MARKET VALUE # -------- SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 800,000 shares authorized; 19,578 shares outstanding................................... $ 20 Paid in capital................................. 195,672 Accumulated net investment income............... 1 Accumulated net realized gain on investments.... 2,327 Unrealized appreciation on investments.......... 20,112 -------- Net assets...................................... $218,132 ======== </Table> <Table> Class IA Net asset value per share ($127,944 / 11,463 shares outstanding) (600,000 shares authorized)................................... $11.16 ====== Class IB Net asset value per share ($90,188 / 8,115 shares outstanding) (200,000 shares authorized)................................... $11.11 ====== </Table> <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 7.6% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. </Table> The accompanying notes are an integral part of this financial statement. 80 HARTFORD GROWTH OPPORTUNITIES HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- 97.5% APPAREL & TEXTILE -- 0.9% -1,084 Burberry Group PLC................................ $ 7,089 -------- BANKS -- 4.6% 161 Bank One Corp. ................................... 7,358 145 Countrywide Credit Industries, Inc. .............. 10,983 81 Federal Home Loan Mortgage Association............ 4,736 154 Federal National Mortgage Association............. 11,582 -------- 34,659 -------- BUSINESS SERVICES -- 2.7% *932 Cendant Corp. .................................... 20,753 -------- COMMUNICATIONS -- 8.7% *1017 American Tower Corp., Class A..................... 11,006 *278 Crown Castle International Corp. ................. 3,065 *150 Level 3 Communications Holdings, Inc. ............ 7,678 *235 NTL, Inc. ........................................ 16,363 *610 Nextel Communications, Inc., Class A.............. 17,111 *+1,745 Sirius Satellite Radio, Inc. ..................... 5,515 *+191 XM Satellite Radio Holdings, Inc. ................ 5,040 -------- 65,778 -------- COMPUTERS & OFFICE EQUIPMENT -- 3.2% 154 CDW Corp. ........................................ 8,907 *221 Dell, Inc. ....................................... 7,502 *252 Netscreen Technologies, Inc. ..................... 6,242 ***117 Quanta Computer, Inc., GDR........................ 1,438 -------- 24,089 -------- CONSTRUCTION -- 5.1% 200 Horton (D.R.), Inc. .............................. 8,656 89 Lennar Corp. ..................................... 8,573 145 Pulte Corp. ...................................... 13,556 -1,599 Rinker Group Ltd. ................................ 7,909 -------- 38,694 -------- CONSUMER DURABLES -- 2.2% *1263 Corning, Inc. .................................... 13,177 *195 Genesis Microchip, Inc. .......................... 3,511 -------- 16,688 -------- CONSUMER NON-DURABLES -- 4.1% 122 AmerisourceBergen Corp. .......................... 6,833 226 Cardinal Health, Inc. ............................ 13,816 *298 Medco Health Solutions, Inc. ..................... 10,139 -------- 30,788 -------- DRUGS -- 8.6% 147 Abbott Laboratories............................... 6,841 *+188 Cephalon, Inc. ................................... 9,087 *259 Forest Laboratories, Inc. ........................ 16,012 *369 IVAX Corp. ....................................... 8,819 *125 Medicines Co. (The)............................... 3,691 *389 Millennium Pharmaceuticals, Inc. ................. 7,257 *+109 NPS Pharmaceuticals, Inc. ........................ 3,341 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- -------- DRUGS -- (CONTINUED) *54 Neurocrine Biosciences, Inc. ..................... $ 2,923 411 Serono S.A., ADR.................................. 7,210 -------- 65,181 -------- EDUCATION -- 3.0% *113 Apollo Group, Inc. ............................... 7,711 *194 Career Education Corp. ........................... 7,774 *240 Education Management Corp. ....................... 7,456 -------- 22,941 -------- ELECTRICAL EQUIPMENT -- 1.1% -3,073 Techtronic Industries Co. ........................ 8,573 -------- ELECTRONICS -- 8.7% *417 Altera Corp. ..................................... 9,473 172 American Power Conversion Corp. .................. 4,208 154 Analog Devices, Inc. ............................. 7,016 *979 ChipPAC, Inc. .................................... 7,430 *+317 Epcos AG, ADR..................................... 7,139 *+280 FuelCell Energy, Inc. ............................ 3,635 *771 MEMC Electronic Materials, Inc. .................. 7,419 *271 Pixelworks, Inc. ................................. 2,987 *183 Quantum Fuel Systems Technologies Worldwide, Inc. ........................................... 1,471 325 STMicroelectronics N.V., NY Reg Shares............ 8,788 *595 Taiwan Semiconductor Manufacturing Co., Ltd., ADR............................................. 6,094 -------- 65,660 -------- ENERGY & SERVICES -- 1.1% 205 Arch Coal, Inc. .................................. 6,387 *57 Universal Tech.................................... 1,710 -------- 8,097 -------- FINANCIAL SERVICES -- 2.4% 114 Blackrock, Inc. .................................. 6,055 148 Federated Investors, Inc., Class B................ 4,354 115 UBS AG............................................ 7,812 -------- 18,221 -------- FOOD, BEVERAGE & TOBACCO -- 3.7% 220 Altria Group, Inc. ............................... 11,994 203 Bunge Ltd. ....................................... 6,679 *289 Constellation Brands, Inc. ....................... 9,530 -------- 28,203 -------- HEALTH SERVICES -- 2.1% *402 Edwards Lifesciences Corp. ....................... 12,101 *280 Human Genome Sciences, Inc. ...................... 3,706 -------- 15,807 -------- MACHINERY -- 0.9% *408 Asyst Technologies, Inc. ......................... 7,075 -------- MEDIA & ENTERTAINMENT -- 2.4% *300 Comcast Corp., Class A............................ 9,858 *162 Entercom Communications Corp. .................... 8,590 -------- 18,448 -------- </Table> The accompanying notes are an integral part of this financial statement. 81 HARTFORD GROWTH OPPORTUNITIES HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- (CONTINUED) MEDICAL INSTRUMENTS & SUPPLIES -- 4.7% 142 DENTSPLY International, Inc. ..................... $ 6,414 191 Guidant Corp. .................................... 11,492 227 Medtronic, Inc. .................................. 11,030 *319 Viasys Healthcare, Inc. .......................... 6,576 -------- 35,512 -------- METALS, MINERALS & MINING -- 1.1% 176 Precision Castparts Corp. ........................ 7,997 -------- RESEARCH & TESTING FACILITIES -- 1.5% 123 Moody's Corp. .................................... 7,454 *168 Telik, Inc. ...................................... 3,859 -------- 11,313 -------- RETAIL -- 9.9% *90 Advance Auto Parts, Inc. ......................... 7,326 *94 Dick's Sporting Goods, Inc. ...................... 4,594 *145 eBay, Inc. ....................................... 9,359 714 Gap, Inc. (The)................................... 16,563 228 Home Depot, Inc. (The)............................ 8,088 278 Michaels Stores, Inc. ............................ 12,301 423 PetSmart, Inc. ................................... 10,077 *256 Rare Hospitality International, Inc. ............. 6,247 -------- 74,555 -------- RUBBER & PLASTICS PRODUCTS -- 1.6% *431 Jarden Corp. ..................................... 11,782 -------- SOFTWARE & SERVICES -- 8.9% *178 Alliance Sata Systems Corp. ...................... 4,930 *502 Amdocs Ltd., ADR.................................. 11,294 *593 BEA Systems, Inc. ................................ 7,290 *173 Intuit, Inc. ..................................... 9,175 *150 Mercury Interactive Corp. ........................ 7,315 *616 Red Hat, Inc. .................................... 11,560 *262 Websense, Inc. ................................... 7,673 *179 Yahoo!, Inc. ..................................... 8,094 -------- 67,331 -------- TRANSPORTATION -- 4.3% 136 Expeditors International Washington, Inc. ........ 5,126 *109 JetBlue Airways Corp. ............................ 2,893 *+236 Ryanair Holdings PLC, ADR......................... 11,931 *633 Sirva, Inc. ...................................... 12,365 -------- 32,315 -------- Total common stocks............................... $737,549 ======== SHORT-TERM SECURITIES -- 8.5% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 4.3% 32,513 Boston Global Investment Trust.................... $ 32,513 -------- PRINCIPAL MARKET AMOUNT VALUE # ------- -------- REPURCHASE AGREEMENTS -- 4.2% $31,537 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04............................. $ 31,537 -------- Total short-term securities....................... $ 64,050 ======== </Table> <Table> DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $609,993)............... 97.5% $737,549 Total short-term securities (cost $64,050)........ 8.5 64,050 ----- -------- Total investment in securities (total cost $674,043) -- including $31,563 of securities loaned (See Note 2(i)).......................... 106.0 801,599 Cash, receivables and other assets................ 0.1 993 Payable for securities purchased.................. (0.2) (1,137) Payable for Fund shares redeemed.................. (1.6) (12,305) Securities lending collateral payable to brokers (See Note 2(i))................................. (4.3) (32,513) Other liabilities................................. (0.0) (51) ----- -------- Net assets........................................ 100.0% $756,586 ===== ======== </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 700,000 shares authorized; 32,103 shares outstanding..................... $ 32 Paid in capital............................................. 769,644 Accumulated net investment loss............................. (12) Accumulated net realized loss on investments................ (140,636) Unrealized appreciation on investments...................... 127,556 Unrealized depreciation on forward foreign currency contracts (See Note 2(g))@@@.............................. (5) Unrealized appreciation on other assets and liabilities in foreign currencies........................................ 7 --------- Net assets.................................................. $ 756,586 ========= </Table> <Table> Class IA Net asset value per share ($696,900 / 29,561 shares outstanding) (500,000 shares authorized)................................... $23.57 ====== Class IB Net asset value per share ($59,686 / 2,542 shares outstanding) (200,000 shares authorized)................................... $23.48 ====== </Table> <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 11.3% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). - Security valued in good faith at fair value by, or under the direction of, the Funds' Board of Directors. The aggregate value of these securities as of December 31, 2003 was $23,571, which represents 3.1% of total net assets. ** Securities contain some restriction as to public resale. At December 31, 2003, the market value of these securities amounted to $1,438 or 0.2% of net assets (See Note 2(m)). </Table> The accompanying notes are an integral part of this financial statement. 82 - -------------------------------------------------------------------------------- @@@FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING AT DECEMBER 31, 2003 <Table> <Caption> UNREALIZED CONTRACT DELIVERY APPRECIATION DESCRIPTION MARKET VALUE AMOUNT DATE (DEPRECIATION) - ----------- ------------ --------------- -------- -------------- British Pound (Sell) $487 $482 01/02/04 $(5) Hong Kong Dollar (Buy) 105 105 01/02/04 -- --- $(5) === </Table> The accompanying notes are an integral part of this financial statement. 83 HARTFORD HIGH YIELD HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - ------------ -------- COMMON STOCKS -- 0.4% BUSINESS SERVICES -- 0.0% *@##-@@-- Hosiery Corp. .................................... $ -- -------- COMMUNICATIONS -- 0.4% *25 Global Crossing Ltd. ............................. 834 *+##116 Marconi Corp., PLC, ADR........................... 2,345 -------- 3,179 -------- Total common stocks............................... $ 3,179 ======== <Caption> PRINCIPAL AMOUNT - ------------ CONVERTIBLE BONDS V -- 0.2% CONSUMER NON-DURABLES -- 0.1% $ 500 Tyco International Group S.A. (Ba2 Moodys) 3.125% due 01/15/23............................. $ 684 -------- MACHINERY -- 0.1% 440 American Standard, Inc. (Ba2 Moodys) 7.625% due 02/15/10............................. 499 -------- Total convertible bonds........................... $ 1,183 ======== <Caption> SHARES - ------------ CONVERTIBLE PREFERRED STOCKS -- 0.3% COMMUNICATIONS -- 0.0% ##21 Adelphia Communications Corp. .................... $ 32 15 McLeodUSA, Inc. .................................. 114 -------- 146 -------- ENERGY & SERVICES -- 0.1% 13 Amerada Hess Corp. ............................... 713 -------- MEDIA & ENTERTAINMENT -- 0.2% 14 Cablevision Systems Corp. ........................ 1,470 -------- Total convertible preferred stocks................ $ 2,329 ======== <Caption> PRINCIPAL AMOUNT - ------------ CORPORATE NOTES V -- 75.6% AEROSPACE & DEFENSE -- 0.3% $ @1,420 DRS Technologies, Inc. (B2 Moodys) 6.875% due 11/01/13............................. $ 1,459 830 DirecTV Holdings LLC (B1 Moodys) 8.375% due 03/15/13............................. 963 -------- 2,422 -------- AGRICULTURE & FISHING -- 0.3% 1,100 Dole Food Co. (B2 Moodys) 7.25% due 06/15/10.............................. 1,133 400 Dole Food Co. (B2 Moodys) 8.625% due 05/01/09............................. 439 @315 Pilgrim's Pride Corp. (B2 Moodys) 9.25% due 11/15/13.............................. 326 -------- 1,898 -------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ -------- APPAREL & TEXTILE -- 0.3% $ 760 Collins & Aikman Floor Cover (B2 Moodys) 9.75% due 02/15/10.............................. $ 813 995 Phillips Van-Heusen (B1 Moodys) 7.75% due 11/15/23.............................. 1,015 @690 Warnaco, Inc. (B2 Moodys) 8.875% due 06/15/13............................. 711 -------- 2,539 -------- BANKS -- 0.3% 705 Capital One Financial Corp. (Baa3 Moodys) 6.25% due 11/15/13.............................. 723 @1,150 Capital One Financial Corp. (Baa3 Moodys) 7.125% due 08/01/08............................. 1,242 225 Western Financial Bank (B1 Moodys) 9.625% due 05/15/12............................. 251 -------- 2,216 -------- BUSINESS SERVICES -- 2.3% 3,000 IPC Acquisition Corp. (B3 Moodys) 11.50% due 12/15/09............................. 3,270 395 Integrated Electrical Services, Inc. (B2 Moodys) 9.375% due 02/01/09............................. 415 600 Interpool, Inc. (Caa1 Moodys) 7.20% due 08/01/07.............................. 574 150 Interpool, Inc. (Caa1 Moodys) 7.35% due 08/01/07.............................. 144 2,000 Iron Mountain, Inc. (B2 Moodys) 6.625% due 01/01/16............................. 1,945 +2,094 Iron Mountain, Inc. (B2 Moodys) 7.75% due 01/15/15.............................. 2,193 855 Lamar Media Corp. (Ba3 Moodys) 7.25% due 01/01/13.............................. 919 @825 Moore North America Finance, Inc. (B1 Moodys) 7.875% due 01/15/11............................. 934 670 United Rentals, Inc. (B1 Moodys) 10.75% due 04/15/08............................. 754 @2,250 United Rentals, Inc. (B2 Moodys) 7.75% due 11/15/13.............................. 2,298 +2,755 United Rentals, Inc. (B2 Moodys) 9.25% due 01/15/09.............................. 2,893 505 Universal Compression, Inc. (B1 Moodys) 7.25% due 05/15/10.............................. 525 -------- 16,864 -------- CHEMICALS -- 2.3% 270 ARCO Chemical Co. (B1 Moodys) 9.80% due 02/01/20.............................. 271 +1,400 Equistar Chemicals LP (B2 Moodys) 8.75% due 02/15/09.............................. 1,463 1,200 FMC Corp. (Ba2 Moodys) 10.25% due 11/01/09............................. 1,404 </Table> The accompanying notes are an integral part of this financial statement. 84 - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT I VALUE # - ------------ -------- CORPORATE NOTES V -- (CONTINUED) CHEMICALS -- (CONTINUED) 575 Geon Co. (B3 Moodys) 6.875% due 12/15/05............................. $ 552 545 Georgia Gulf Corp. (Ba3 Moodys) 7.625% due 11/15/05............................. 574 EUR 210 Huntsman International LLC (Caa1 Moodys) 10.125% due 07/01/09............................ 258 750 IMC Global, Inc. (B1 Moodys) 11.25% due 06/01/11............................. 825 12 IMC Global, Inc. (B2 Moodys) 7.625% due 11/01/05............................. 12 300 Lyondell Chemical Co. (B1 Moodys) 9.50% due 12/15/08.............................. 314 600 Lyondell Chemical Co. (B1 Moodys) 9.50% due 12/15/08.............................. 627 1,190 Lyondell Chemical Co. (B1 Moodys) 9.625% due 05/01/07............................. 1,261 +1,700 Lyondell Chemical Co. (B1 Moodys) 9.875% due 05/01/07............................. 1,794 +1,260 Millennium America, Inc. (B1 Moodys) 7.00% due 11/15/06.............................. 1,292 +785 Millennium America, Inc. (B1 Moodys) 7.625% due 11/15/26............................. 730 @3,185 Nalco Chemical Co. (Caa1 Moodys) 8.875% due 11/15/13............................. 3,376 +410 PolyOne Corp. (B3 Moodys) 10.625% due 05/15/10............................ 410 +925 PolyOne Corp. (B3 Moodys) 8.875% due 05/01/12............................. 851 @1,335 Scotts Co. (The) (Ba3 Moodys) 6.625% due 11/15/13............................. 1,372 -------- 17,386 -------- COMMUNICATIONS -- 9.9% @1,100 ACC Escrow Corp. (B2 Moodys) 10.00% due 08/01/11............................. 1,227 400 Adelphia Communications Corp. (Default) 8.875% due 01/15/07............................. 388 1,210 Avaya, Inc. (B2 Moodys) 11.125% due 04/01/09............................ 1,416 @2,350 Cincinnati Bell, Inc. (B3 Moodys) 8.375% due 01/15/14............................. 2,526 @1,790 Dex Media, Inc. (B3 Moodys) 9.875% due 08/15/13............................. 2,081 2,460 Level 3 Communications, Inc. (Ba3 Moodys) 6.125% due 07/15/13............................. 2,478 1,500 Level 3 Communications, Inc. (Ba3 Moodys) 7.625% due 06/15/12............................. 1,626 200 Level 3 Communications, Inc. (Caa2 Moodys) 0.00% due 03/15/10.............................. 168 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT I VALUE # - ------------ -------- COMMUNICATIONS -- (CONTINUED) $ @1,300 Level 3 Communications, Inc. (Caa2 Moodys) 10.75% due 10/15/11............................. $ 1,375 +3,205 Level 3 Communications, Inc. (Caa2 Moodys) 11.00% due 03/15/08............................. 3,141 EUR 1,175 Level 3 Communications, Inc. (Caa2 Moodys) 11.25% due 03/15/10............................. 1,423 +5,000 Level 3 Communications, Inc. (Caa2 Moodys) 11.25% due 03/15/10............................. 4,800 +1,600 Lucent Technologies, Inc. (Caa1 Moodys) 5.50% due 11/15/08.............................. 1,488 +2,459 Lucent Technologies, Inc. (Caa1 Moodys) 6.45% due 03/15/29.............................. 1,933 L3,150 Metromedia Fiber Network, Inc. (Default) 10.00% due 11/15/08............................. 189 EUR L450 Metromedia Fiber Network, Inc. (Default) 10.00% due 12/15/09............................. 34 L365 Metromedia Fiber Network, Inc. (Default) 10.00% due 12/15/09............................. 22 12,470 Nextel Communications, Inc. (B2 Moodys) 7.375% due 08/01/15............................. 13,405 @@L1,990 Nextlink Escrow (Default) 0.00% due 04/15/06.............................. -- @@L445 Nextlink Escrow (Default) 0.00% due 11/15/08.............................. -- @@L750 Nextlink Escrow (Default) 0.00% due 12/01/09.............................. -- @@L600 Nextlink Escrow (Default) 0.00% due 12/01/09.............................. -- +250 Northern Telecom Capital (B3 Moodys) 7.875% due 06/15/26............................. 250 570 PanAmSat Corp. (Ba2 Moodys) 6.375% due 01/15/08............................. 591 2,570 PanAmSat Corp. (Ba2 Moodys) 6.875% due 01/15/28............................. 2,573 6,525 PanAmSat Corp. (Ba3 Moodys) 8.50% due 02/01/12.............................. 7,243 +4,220 Qwest Capital Funding, Inc. (Caa2 Moodys) 7.25% due 02/15/11.............................. 4,157 3,530 Qwest Capital Funding, Inc. (Caa2 Moodys) 7.625% due 08/03/21............................. 3,248 5,685 Qwest Corp. (Ba3 Moodys) 6.875% due 09/15/33............................. 5,401 845 Qwest Corp. (Ba3 Moodys) 7.20% due 11/01/04.............................. 864 1,630 Qwest Corp. (Ba3 Moodys) 7.25% due 10/15/35.............................. 1,622 </Table> The accompanying notes are an integral part of this financial statement. 85 HARTFORD HIGH YIELD HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ -------- CORPORATE NOTES V -- (CONTINUED) COMMUNICATIONS -- (CONTINUED) $ +1,500 RCN Corp. (Ca Moodys) 11.125% due 10/15/07............................ $ 728 +6,080 RCN Corp. (Ca Moodys) 9.80% due 02/15/08.............................. 2,858 280 Rexnord Corp. (B3 Moodys) 10.125% due 12/15/12............................ 307 960 Sprint Capital Corp. (Baa3 Moodys) 7.90% due 03/15/05.............................. 1,023 ##@@-- Voicestream Wireless Corp. (Ba3 Moodys) 10.375% due 11/15/09............................ 1 L1,925 WorldCom, Inc. (Default) 7.50% due 05/15/11.............................. 645 L6,655 WorldCom, Inc. (Default) 8.25% due 05/15/31.............................. 2,229 -------- 73,460 -------- CONSTRUCTION -- 2.2% +1,100 Champion Home Builders Co. (B2 Moodys) 11.25% due 04/15/07............................. 1,189 2,140 Horton (D.R.), Inc. (Ba1 Moodys) 6.875% due 05/01/13............................. 2,279 350 Kaufman & Broad Home Corp. (Ba1 Moodys) 7.75% due 10/15/04.............................. 359 2,200 Kaufman & Broad Home Corp. (Ba2 Moodys) 9.50% due 02/15/11.............................. 2,453 2,450 Schuler Homes, Inc., Class A (Ba1 Moodys) 9.375% due 07/15/09............................. 2,756 +680 Schuler Homes, Inc., Class A (Ba2 Moodys) 10.50% due 07/15/11............................. 789 +590 Standard Pacific Corp. (Ba2 Moodys) 6.50% due 10/01/08.............................. 608 2,000 Standard Pacific Corp. (Ba2 Moodys) 6.875% due 05/15/11............................. 2,070 +2,360 Toll Corp. (Ba2 Moodys) 8.00% due 05/01/09.............................. 2,472 1,200 Toll Corp. (Ba2 Moodys) 8.25% due 02/01/11.............................. 1,320 -------- 16,295 -------- CONSUMER DURABLES -- 1.5% 3,250 Corning, Inc. (Ba2 Moodys) 8.30% due 04/04/25.............................. 3,339 1,100 Owens-Brockway (B1 Moodys) 7.75% due 05/15/11.............................. 1,181 5,220 Owens-Brockway (B1 Moodys) 8.875% due 02/15/09............................. 5,722 1,015 Peabody Energy Corp. (Ba3 Moodys) 6.875% due 03/15/13............................. 1,071 -------- 11,313 -------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ -------- CONSUMER NON-DURABLES -- 3.2% $ 900 Airgas, Inc. (Ba1 Moodys) 7.75% due 09/15/06.............................. $ 945 1,200 Airgas, Inc. (Ba2 Moodys) 9.125% due 10/01/11............................. 1,347 430 Hasbro, Inc. (Ba3 Moodys) 6.60% due 07/15/28.............................. 415 1,850 Johnsondiversey, Inc. (B2 Moodys) 9.625% due 05/15/12............................. 2,063 @4,035 Perry Ellis International, Inc. (B3 Moodys) 8.875% due 09/15/13............................. 4,247 3,575 Tyco International Group S.A. (Ba2 Moodys) 6.375% due 02/15/06............................. 3,807 +5,375 Tyco International Group S.A. (Ba2 Moodys) 6.75% due 02/15/11.............................. 5,872 +1,800 Xerox Corp. (B1 Moodys) 7.125% due 06/15/10............................. 1,926 990 Xerox Corp. (B1 Moodys) 7.625% due 06/15/13............................. 1,069 1,445 Xerox Corp. (B1 Moodys) 9.75% due 01/15/09.............................. 1,691 -------- 23,382 -------- CONSUMER SERVICES -- 1.2% @520 Donnelley (R.H.) Finance Corp. (B1 Moodys) 8.875% due 12/15/10............................. 585 @630 Sensus Metering Systems (Caa1 Moodys) 8.625% due 12/15/13............................. 647 +4,030 Service Corp. International (B1 Moodys) 6.50% due 03/15/08.............................. 4,141 830 Service Corp. International (B1 Moodys) 7.70% due 04/15/09.............................. 886 2,000 Service Corp. International (B1 Moodys) 7.70% due 04/15/09.............................. 2,135 400 Service Corp. International (B1 Moodys) 7.875% due 02/01/13............................. 407 -------- 8,801 -------- DRUGS -- 0.1% 800 Watson Pharmaceuticals, Inc. (Ba1 Moodys) 7.125% due 05/15/08............................. 859 -------- </Table> The accompanying notes are an integral part of this financial statement. 86 - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ -------- CORPORATE NOTES V -- (CONTINUED) ELECTRICAL EQUIPMENT -- 1.2% $ 1,285 Bio-Rad Laboratories, Inc. (Ba3 Moodys) 7.50% due 08/15/13.............................. $ 1,414 1,070 Fisher Scientific International (B2 Moodys) 8.00% due 09/01/13.............................. 1,148 782 Fisher Scientific International (B2 Moodys) 8.125% due 05/01/12............................. 839 5,000 PerkinElmer, Inc. (Ba3 Moodys) 8.875% due 01/15/13............................. 5,725 -------- 9,126 -------- ELECTRONICS -- 0.5% +900 Amkor Technology, Inc. (B1 Moodys) 7.75% due 05/15/13.............................. 965 2,735 Rayovac Corp. (B3 Moodys) 8.50% due 10/01/13.............................. 2,899 -------- 3,864 -------- ENERGY & SERVICES -- 4.6% @1,340 Chesapeake Energy Corp. (Ba3 Moodys) 6.875% due 01/15/16............................. 1,380 720 Chesapeake Energy Corp. (Ba3 Moodys) 7.50% due 09/15/13.............................. 779 +955 CONSOL Energy, Inc. (Ba3 Moodys) 7.875% due 03/01/12............................. 1,008 1,805 Forest Oil Corp. (Ba3 Moodys) 8.00% due 06/15/08.............................. 1,967 @250 Houston Exploration Co. (B2 Moodys) 7.00% due 06/15/13.............................. 258 300 Key Energy Services, Inc. (Ba2 Moodys) 6.375% due 05/01/13............................. 305 920 Key Energy Services, Inc. (Ba2 Moodys) 8.375% due 03/01/08............................. 984 +1,385 Magnum Hunter Resources, Inc. (B2 Moodys) 9.60% due 03/15/12.............................. 1,572 3,000 Newfield Exploration Co. (Ba2 Moodys) 7.45% due 10/15/07.............................. 3,315 1,425 Newfield Exploration Co. (Ba2 Moodys) 7.625% due 03/01/11............................. 1,589 1,300 Newpark Resources, Inc. (B2 Moodys) 8.625% due 12/15/07............................. 1,346 +375 Nuevo Energy Co. (B2 Moodys) 9.375% due 10/01/10............................. 412 161 Nuevo Energy Co. (B2 Moodys) 9.50% due 06/01/08.............................. 169 1,750 Pioneer Natural Resources Co. (Ba1 Moodys) 6.50% due 01/15/08.............................. 1,894 3,670 Pioneer Natural Resources Co. (Ba1 Moodys) 7.20% due 01/15/28.............................. 3,929 500 Pioneer Natural Resources Co. (Ba1 Moodys) 9.625% due 04/01/10............................. 622 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ -------- ENERGY & SERVICES -- (CONTINUED) $ 800 Plains Exploration & Production Co. (B2 Moodys) 8.75% due 07/01/12.............................. $ 879 1,480 Port Arthur Finance Corp. (Ba3 Moodys) 12.50% due 01/15/09............................. 1,758 215 Premcor Refining Group, Inc. (The) (Ba3 Moodys) 9.25% due 02/01/10.............................. 241 @1,395 Southern Star Central Corp. (B1 Moodys) 8.50% due 08/01/10.............................. 1,541 470 Star Gas Partners LP (B3 Moodys) 10.25% due 02/15/13............................. 512 1,250 TECO Energy, Inc. (Ba1 Moodys) 10.50% due 12/01/07............................. 1,459 +2,595 TECO Energy, Inc. (Ba1 Moodys) 7.20% due 05/01/11.............................. 2,699 1,960 Tesoro Petroleum Corp. (Ba3 Moodys) 8.00% due 04/15/08.............................. 2,083 485 Tom Brown, Inc. (Ba3 Moodys) 7.25% due 09/15/13.............................. 513 685 Vintage Petroleum, Inc. (Ba3 Moodys) 8.25% due 05/01/12.............................. 745 @200 Westport Resources Corp. (Ba3 Moodys) 8.25% due 11/01/11.............................. 220 -------- 34,179 -------- FINANCIAL SERVICES -- 2.9% @700 Couche-Tard Finance Corp. (Ba3 Moodys) 7.50% due 12/15/13.............................. 733 5,050 Felcor Lodging LP (B1 Moodys) 10.00% due 09/15/08............................. 5,454 201 HMH Properties, Inc. (Ba3 Moodys) 8.45% due 12/01/08.............................. 210 4,600 Host Marriott Corp. (Ba3 Moodys) 7.875% due 08/01/08............................. 4,784 @1,295 Host Marriott LP (Ba3 Moodys) 7.125% due 11/01/13............................. 1,321 450 Host Marriott LP (Ba3 Moodys) 9.25% due 10/01/07.............................. 503 @675 Poster Financial Group, Inc. (B2 Moodys) 8.75% due 12/01/11.............................. 714 60 RFS Partnership LP (B2 Moodys) 9.75% due 03/01/12.............................. 64 2,500 Senior Housing Properties Trust (Ba2 Moodys) 7.875% due 04/15/15............................. 2,625 1,310 Tanger Properties LP (Ba1 Moodys) 7.875% due 10/24/04............................. 1,357 </Table> The accompanying notes are an integral part of this financial statement. 87 HARTFORD HIGH YIELD HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ -------- CORPORATE NOTES V -- (CONTINUED) FINANCIAL SERVICES -- (CONTINUED) $ 1,000 Tanger Properties LP (Ba1 Moodys) 9.125% due 02/15/08............................. $ 1,090 2,130 Ventas, Inc. (Ba3 Moodys) 9.00% due 05/01/12.............................. 2,364 -------- 21,219 -------- FOOD, BEVERAGE & TOBACCO -- 2.7% 170 B&G Foods, Inc. (B3 Moodys) 9.625% due 08/01/07............................. 175 720 Canandaigua Brands, Inc. (Ba2 Moodys) 8.625% due 08/01/06............................. 799 1,070 Del Monte Corp. (B2 Moodys) 8.625% due 12/15/12............................. 1,172 5,880 Delhaize America, Inc. (Ba1 Moodys) 8.125% due 04/15/11............................. 6,762 900 Delhaize America, Inc. (Ba1 Moodys) 9.00% due 04/15/31.............................. 1,094 390 Hercules, Inc. (Ba1 Moodys) 6.60% due 08/01/27.............................. 397 +1,400 Hercules, Inc. (Ba2 Moodys) 11.125% due 11/15/07............................ 1,677 4,500 PSF Group Holdings, Inc. (B1 Moodys) 9.25% due 06/15/11.............................. 4,545 1,725 Smithfield Foods, Inc. (Ba2 Moodys) 7.75% due 05/15/13.............................. 1,794 955 Smithfield Foods, Inc. (Ba2 Moodys) 8.00% due 10/15/09.............................. 1,008 @400 United Agri Products (B3 Moodys) 8.25% due 12/15/11.............................. 411 -------- 19,834 -------- FOREST & PAPER PRODUCTS -- 3.9% 4,075 Abitibi Consolidated Finance LP (Ba1 Moodys) 7.875% due 08/01/09............................. 4,407 1,740 Boise Cascade Corp. (Ba2 Moodys) 7.35% due 02/01/16.............................. 1,766 1,460 Boise Cascade Corp. (Ba2 Moodys) 7.50% due 02/01/08.............................. 1,567 3,450 Bowater Canada Finance (Ba1 Moodys) 7.95% due 11/15/11.............................. 3,664 +2,300 Bowater, Inc. (Ba1 Moodys) 6.50% due 06/15/13.............................. 2,232 600 Georgia-Pacific Corp. (Ba3 Moodys) 7.25% due 06/01/28.............................. 575 1,230 Georgia-Pacific Corp. (Ba3 Moodys) 7.50% due 05/15/06.............................. 1,301 @2,250 Georgia-Pacific Corp. (Ba3 Moodys) 8.00% due 01/15/24.............................. 2,295 +580 Georgia-Pacific Corp. (Ba3 Moodys) 8.875% due 05/15/31............................. 638 825 Georgia-Pacific Corp. (Ba3 Moodys) 9.875% due 11/01/21............................. 862 780 Longview Fibre Co. (B2 Moodys) 10.00% due 01/15/09............................. 856 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ -------- FOREST & PAPER PRODUCTS -- (CONTINUED) $ 1,350 Potlatch Corp. (Baa3 Moodys) 12.50% due 12/01/09............................. $ 1,620 665 Smurfit-Stone Container Corp. (B2 Moodys) 7.50% due 06/01/13.............................. 695 1,000 Smurfit-Stone Container Corp. (B2 Moodys) 8.25% due 10/01/12.............................. 1,085 5,050 Stone Container Corp. (B2 Moodys) 9.75% due 02/01/11.............................. 5,580 -------- 29,143 -------- HEALTH SERVICES -- 2.7% +1,900 HCA, Inc. (Ba1 Moodys) 6.95% due 05/01/12.............................. 2,037 170 HCA, Inc. (Ba1 Moodys) 7.00% due 07/01/07.............................. 186 1,261 HCA, Inc. (Ba1 Moodys) 7.125% due 06/01/06............................. 1,366 530 HCA, Inc. (Ba1 Moodys) 7.50% due 11/15/95.............................. 508 1,400 Manor Care, Inc. (Ba1 Moodys) 7.50% due 06/15/06.............................. 1,519 270 Manor Care, Inc. (Ba1 Moodys) 8.00% due 03/01/08.............................. 305 @1,415 Mariner Health Care, Inc. (B3 Moodys) 8.25% due 12/15/13.............................. 1,429 2,200 Province Healthcare Co. (B3 Moodys) 7.50% due 06/01/13.............................. 2,200 2,110 Select Medical Corp. (B2 Moodys) 7.50% due 08/01/13.............................. 2,237 1,380 Select Medical Corp. (B2 Moodys) 9.50% due 06/15/09.............................. 1,515 +500 Tenet Healthcare Corp. (B1 Moodys) 5.00% due 07/01/07.............................. 484 795 Tenet Healthcare Corp. (B1 Moodys) 6.375% due 12/01/11............................. 763 2,000 Tenet Healthcare Corp. (B1 Moodys) 6.50% due 06/01/12.............................. 1,918 1,955 Tenet Healthcare Corp. (B1 Moodys) 7.375% due 02/01/13............................. 1,965 620 United Surgical Partners International, Inc. (B3 Moodys) 10.00% due 12/15/11............................. 704 570 Ventas Realty LP (Ba3 Moodys) 8.75% due 05/01/09.............................. 626 -------- 19,762 -------- HOTELS & GAMING -- 4.5% 2,000 Aztar Corp. (Ba3 Moodys) 8.875% due 05/15/07............................. 2,088 1,150 Boyd Gaming Corp. (Ba3 Moodys) 9.25% due 08/01/09.............................. 1,285 6,445 Hammons (John Q.) Hotels LP (B2 Moodys) 8.875% due 05/15/12............................. 7,106 </Table> The accompanying notes are an integral part of this financial statement. 88 - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ -------- CORPORATE NOTES V -- (CONTINUED) HOTELS & GAMING -- (CONTINUED) $ 2,100 Hilton Hotels Corp. (Ba1 Moodys) 7.625% due 05/15/08............................. $ 2,336 +750 Hilton Hotels Corp. (Ba1 Moodys) 7.625% due 12/01/12............................. 843 1,000 Hilton Hotels Corp. (Ba1 Moodys) 8.25% due 02/15/11.............................. 1,153 +1,200 MGM Mirage, Inc. (Ba1 Moodys) 6.875% due 02/06/08............................. 1,281 1,400 MGM Mirage, Inc. (Ba1 Moodys) 8.50% due 09/15/10.............................. 1,607 +1,450 MGM Mirage, Inc. (Ba2 Moodys) 8.375% due 02/01/11............................. 1,642 900 Mandalay Resort Group (Ba3 Moodys) 7.625% due 07/15/13............................. 956 +950 Mandalay Resort Group (Ba2 Moodys) 6.50% due 07/31/09.............................. 986 1,570 Mandalay Resort Group (Ba2 Moodys) 9.50% due 08/01/08.............................. 1,833 +2,790 Mirage Resorts, Inc. (Ba1 Moodys) 7.25% due 10/15/06.............................. 3,006 980 Mohegan Tribal Gaming Authority (Ba2 Moodys) 8.125% due 01/01/06............................. 1,056 3,700 Starwood Hotels & Resorts Worldwide, Inc. (Ba1 Moodys) 7.375% due 05/01/07............................. 3,996 1,450 Starwood Hotels & Resorts Worldwide, Inc. (Ba1 Moodys) 7.875% due 05/01/12............................. 1,631 515 Venetian Casino (B3 Moodys) 11.00% due 06/15/10............................. 597 -------- 33,402 -------- INSURANCE -- 0.0% 250 AdvancePCS (Ba2 Moodys) 8.50% due 04/01/08.............................. 271 -------- MACHINERY -- 2.2% 3,021 Agco Corp. (Ba3 Moodys) 9.50% due 05/01/08.............................. 3,308 510 American Standard Cos., Inc. (Ba2 Moodys) 7.375% due 02/01/08............................. 564 +1,540 Briggs & Stratton Corp. (Ba1 Moodys) 8.875% due 03/15/11............................. 1,810 1,920 Cummins, Inc. (Ba2 Moodys) 6.75% due 02/15/27.............................. 2,011 635 Cummins, Inc. (Ba2 Moodys) 7.125% due 03/01/28............................. 591 450 Joy Global, Inc. (B2 Moodys) 8.75% due 03/15/12.............................. 502 650 SPX Corp. (Ba3 Moodys) 6.25% due 06/15/11.............................. 668 1,600 SPX Corp. (Ba3 Moodys) 7.50% due 01/01/13.............................. 1,740 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ -------- MACHINERY -- (CONTINUED) $ +975 Terex Corp. (B3 Moodys) 10.375% due 04/01/11............................ $ 1,092 @3,970 Terex Corp. (B3 Moodys) 7.375% due 01/15/14............................. 4,059 -------- 16,345 -------- MEDIA & ENTERTAINMENT -- 5.1% 1,170 American Greetings Corp. (Ba1 Moodys) 6.10% due 08/01/28.............................. 1,205 @375 CBD Media, Inc. (B3 Moodys) 8.625% due 06/01/11............................. 413 1,500 CSC Holdings, Inc. (B1 Moodys) 7.25% due 07/15/08.............................. 1,560 +1,000 CSC Holdings, Inc. (B1 Moodys) 7.625% due 04/01/11............................. 1,053 500 CSC Holdings, Inc. (B1 Moodys) 7.875% due 12/15/07............................. 528 950 CSC Holdings, Inc. (B1 Moodys) 8.125% due 07/15/09............................. 1,021 2,000 Cablevision Systems Corp. (B1 Moodys) 8.125% due 08/15/09............................. 2,150 +1,820 Charter Communications Holdings LLC (Ca Moodys) 10.00% due 04/01/09............................. 1,620 1,395 Charter Communications Holdings LLC (Ca Moodys) 10.00% due 05/15/11............................. 1,214 +5,355 Charter Communications Holdings LLC (Ca Moodys) 9.625% due 11/15/09............................. 4,712 @2,875 EchoStar DBS Corp. (Ba3 Moodys) 5.75% due 10/01/08.............................. 2,907 2,566 EchoStar DBS Corp. (Ba3 Moodys) 9.125% due 01/15/09............................. 2,871 2,450 EchoStar DBS Corp. (Ba3 Moodys) 9.375% due 02/01/09............................. 2,576 2,130 Hollinger International Publishing (B2 Moodys) 9.00% due 12/15/10.............................. 2,263 +1,300 Mediacom LLC (B2 Moodys) 9.50% due 01/15/13.............................. 1,378 @1,350 Medianews Group, Inc. (B2 Moodys) 6.875% due 10/01/13............................. 1,374 +2,000 Park Place Entertainment Corp. (Ba1 Moodys) 7.50% due 09/01/09.............................. 2,200 1,100 Park Place Entertainment Corp. (Ba2 Moodys) 8.125% due 05/15/11............................. 1,233 550 Park Place Entertainment Corp. (Ba2 Moodys) 9.375% due 02/15/07............................. 623 +350 PRIMEDIA, Inc. (B3 Moodys) 7.625% due 04/01/08............................. 354 @1,300 PRIMEDIA, Inc. (B3 Moodys) 8.00% due 05/15/13.............................. 1,326 </Table> The accompanying notes are an integral part of this financial statement. 89 HARTFORD HIGH YIELD HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ -------- CORPORATE NOTES V -- (CONTINUED) MEDIA & ENTERTAINMENT -- (CONTINUED) $ 2,100 Six Flags, Inc. (B2 Moodys) 8.875% due 02/01/10............................. $ 2,155 +300 Six Flags, Inc. (B2 Moodys) 9.50% due 02/01/09.............................. 314 +730 Time Warner Telecom, Inc. (B3 Moodys) 9.75% due 07/15/08.............................. 752 -------- 37,802 -------- MEDICAL INSTRUMENTS & SUPPLIES -- 0.4% 1,095 Bausch & Lomb, Inc. (Ba1 Moodys) 6.95% due 11/15/07.............................. 1,196 305 Hanger Orthopedic Group, Inc. (B2 Moodys) 10.375% due 02/15/09............................ 346 @695 Medex, Inc. (B3 Moodys) 8.875% due 05/15/13............................. 747 470 Omnicare, Inc. (Ba2 Moodys) 6.125% due 06/01/13............................. 471 -------- 2,760 -------- METALS, MINERALS & MINING -- 1.1% +400 AK Steel Holding Corp. (B3 Moodys) 7.75% due 06/15/12.............................. 342 +3,410 AK Steel Holding Corp. (B3 Moodys) 7.875% due 02/15/09............................. 2,992 2,180 Ball Corp. (Ba3 Moodys) 6.875% due 12/15/12............................. 2,278 495 Crown Cork & Seal Co. (B3 Moodys) 8.00% due 04/15/23.............................. 463 290 Cyprus Amax Minerals Co. (Baa3 Moodys) 8.375% due 02/01/23............................. 301 375 Earle M. Jorgensen Co. (B2 Moodys) 9.75% due 06/01/12.............................. 416 1,140 United States Steel LLC (B1 Moodys) 10.75% due 08/01/08............................. 1,334 -------- 8,126 -------- REAL ESTATE -- 0.9% 640 Forest City Enterprises, Inc. (Ba3 Moodys) 7.625% due 06/01/15............................. 679 3,025 LNR Property Corp. (Ba3 Moodys) 7.625% due 07/15/13............................. 3,184 2,330 Stewart Enterprises, Inc. (B2 Moodys) 10.75% due 07/01/08............................. 2,633 -------- 6,496 -------- RETAIL -- 2.9% 1,190 Ahold Finance USA, Inc. (B1 Moodys) 8.25% due 07/15/10.............................. 1,297 750 Autonation, Inc. (Ba2 Moodys) 9.00% due 08/01/08.............................. 861 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ -------- RETAIL -- (CONTINUED) $ 255 Dillard's, Inc. (B2 Moodys) 7.13% due 08/01/18.............................. $ 252 560 Dillard's, Inc., Class A (B2 Moodys) 7.375% due 06/01/06............................. 580 @935 General Nutrition Centers (B3 Moodys) 8.50% due 12/01/10.............................. 958 750 Ingles Markets, Inc. (Ba3 Moodys) 8.875% due 12/01/11............................. 754 850 Penney (J.C.) Co., Inc. (Ba3 Moodys) 7.65% due 08/15/16.............................. 932 1,825 Penney (J.C.) Co., Inc. (Ba3 Moodys) 8.125% due 04/01/27............................. 1,982 +1,232 Penney (J.C.) Co., Inc. (Ba3 Moodys) 8.25% due 08/15/22.............................. 1,274 1,500 Saks, Inc. (B1 Moodys) 7.50% due 12/01/10.............................. 1,628 5,400 Sonic Automotive, Inc. (B2 Moodys) 8.625% due 08/15/13............................. 5,697 @940 Suburban Propane Partners LP (B1 Moodys) 6.875% due 12/15/13............................. 949 410 Toys "R" Us, Inc. (Baa3 Moodys) 7.375% due 10/15/18............................. 410 1,285 United Auto Group, Inc. (B3 Moodys) 9.625% due 03/15/12............................. 1,439 2,000 YUM! Brands, Inc. (Ba1 Moodys) 7.70% due 07/01/12.............................. 2,303 -------- 21,316 -------- RUBBER & PLASTICS PRODUCTS -- 0.3% 1,097 Armkel LLC (B2 Moodys) 9.50% due 08/15/09.............................. 1,204 955 Plastipak Holdings, Inc. (B3 Moodys) 10.75% due 09/01/11............................. 1,062 -------- 2,266 -------- SOFTWARE & SERVICES -- 0.3% +1,100 Unisys Corp. (Ba1 Moodys) 7.25% due 01/15/05.............................. 1,140 550 Unisys Corp. (Ba1 Moodys) 7.875% due 04/01/08............................. 570 700 United Components, Inc. (B3 Moodys) 9.375% due 06/15/13............................. 765 -------- 2,475 -------- TRANSPORTATION -- 2.2% 1,850 Dana Corp. (Ba3 Moodys) 6.50% due 03/15/08.............................. 1,954 1,350 Dana Corp. (Ba3 Moodys) 7.00% due 03/01/29.............................. 1,342 +@1,400 Dana Credit Corp. (Ba3 Moodys) 8.375% due 08/15/07............................. 1,505 +120 Delta Airlines, Inc. (B3 Moodys) 7.90% due 12/15/09.............................. 97 2,435 Delta Airlines, Inc. (B3 Moodys) 8.30% due 12/15/29.............................. 1,610 </Table> The accompanying notes are an integral part of this financial statement. 90 - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ -------- CORPORATE NOTES V -- (CONTINUED) TRANSPORTATION -- (CONTINUED) $ +633 Delta Airlines, Inc. (B3 Moodys) 9.00% due 05/15/16.............................. $ 457 1,500 Delta Airlines, Inc. (Baa2 Moodys) 7.57% due 11/18/10.............................. 1,554 3,410 Group 1 Automotive, Inc. (B1 Moodys) 8.25% due 08/15/13.............................. 3,649 +726 Navistar International Corp. (Ba3 Moodys) 9.375% due 06/01/06............................. 801 1,075 Sequa Corp. (B1 Moodys) 8.875% due 04/01/08............................. 1,166 365 TD Funding Corp. (B3 Moodys) 8.375% due 07/15/11............................. 388 1,060 TRW Automotive, Inc. (B1 Moodys) 9.375% due 02/15/13............................. 1,211 @605 Wabtec Corp. (Ba2 Moodys) 6.875% due 07/31/13............................. 627 -------- 16,361 -------- UTILITIES -- 13.3% @5,280 AES Corp. (The) (B2 Moodys) 8.75% due 05/15/13.............................. 5,900 405 Allied Waste North America, Inc. (Ba3 Moodys) 7.625% due 01/01/06............................. 426 +2,570 Allied Waste North America, Inc. (Ba3 Moodys) 7.875% due 01/01/09............................. 2,679 1,100 Allied Waste North America, Inc. (Ba3 Moodys) 7.875% due 04/15/13............................. 1,191 2,800 Allied Waste North America, Inc. (Ba3 Moodys) 8.875% due 04/02/08............................. 3,136 +350 Allied Waste North America, Inc. (Ba3 Moodys) 9.25% due 09/01/12.............................. 397 3,150 Aquila, Inc. (B S&P) 7.625% due 11/15/09............................. 3,095 650 Browning-Ferris Industries, Inc. (Ba3 Moodys) 6.375% due 01/15/08............................. 645 1,505 Browning-Ferris Industries, Inc. (Ba3 Moodys) 7.40% due 09/15/35.............................. 1,426 500 Browning-Ferris Industries, Inc. (Ba3 Moodys) 7.875% due 03/15/05............................. 523 @1,180 CMS Energy Corp. (B3 Moodys) 7.75% due 08/01/10.............................. 1,240 120 CMS Energy Corp. (B3 Moodys) 8.50% due 04/15/11.............................. 130 +2,215 CMS Energy Corp. (B3 Moodys) 8.90% due 07/15/08.............................. 2,403 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ -------- UTILITIES -- (CONTINUED) $ +8,400 Calpine Canada Energy Finance LLC (Caa1 Moodys) 8.50% due 05/01/08.............................. $ 6,699 +200 Calpine Corp. (Caa1 Moodys) 8.625% due 08/15/10............................. 156 +@2,635 Calpine Corp. (NA Moodys) 8.75% due 07/15/13.............................. 2,569 @1,750 Centerpoint Energy Resources (Ba1 Moodys) 7.875% due 04/01/13............................. 1,981 @1,500 Centerpoint Energy, Inc. (Ba1Moodys) 6.85% due 06/01/15.............................. 1,542 @3,740 Dynegy Holdings, Inc. (B3 Moodys) 10.125% due 07/15/13............................ 4,301 +940 Edison Mission Energy (B2 Moodys) 7.73% due 06/15/09.............................. 895 3,915 Edison Mission Energy (B2 Moodys) 9.875% due 04/15/11............................. 4,072 +975 El Paso Corp. (Caa1 Moodys) 7.75% due 01/15/32.............................. 831 960 El Paso Corp. (Caa1 Moodys) 7.80% due 08/01/31.............................. 817 +3,500 El Paso Corp. (Caa1 Moodys) 7.875% due 06/15/12............................. 3,308 125 El Paso Electric Co. (Baa3 Moodys) 9.40% due 05/01/11.............................. 146 9,070 El Paso Natural Gas Co. (B1 Moodys) 7.625% due 08/01/10............................. 9,319 1,315 GulfTerra Energy Partners LP (Ba3 Moodys) 6.25% due 06/01/10.............................. 1,368 1,145 Illinois Power Co. (B3 Moodys) 11.50% due 12/15/10............................. 1,374 1,275 Illinova Corp. (B3 Moodys) 7.50% due 06/15/09.............................. 1,403 2,215 Illinova Corp. (B3 Moodys) 7.50% due 07/15/25.............................. 2,193 560 Kansas Gas & Electric Co. (Ba1 Moodys) 6.50% due 08/01/05.............................. 585 935 Kansas Gas & Electric Co. (Ba2 Moodys) 8.29% due 03/29/16.............................. 975 1,510 Monongahela Power Co. (Ba1Moodys) 5.00% due 10/01/06.............................. 1,536 @440 Nevada Power Co. (Ba2 Moodys) 9.00% due 08/15/13.............................. 487 150 NorAm Energy Corp. (Ba1 Moodys) 7.75% due 02/15/11.............................. 169 @1,455 PG&E Corp. (Not Rated) 6.875% due 07/15/08............................. 1,575 +1,780 Sierra Pacific Power Co. (Ba2 Moodys) 8.00% due 06/01/08.............................. 1,927 1,230 Sierra Pacific Resources (Ba2 Moodys) 6.20% due 04/15/04.............................. 1,238 1,100 Sierra Pacific Resources (Ba2 Moodys) 8.50% due 01/01/23.............................. 1,123 </Table> The accompanying notes are an integral part of this financial statement. 91 HARTFORD HIGH YIELD HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT I VALUE # - ------------ -------- CORPORATE NOTES V -- (CONTINUED) UTILITIES -- (CONTINUED) 1,000 Southern California Edison (Baa2 Moodys) 8.00% due 02/15/07.............................. $ 1,144 2,100 Tennessee Gas Pipeline Co. (B1 Moodys) 7.50% due 04/01/17.............................. 2,168 440 Texas Utilities Co. (Ba1 Moodys) 6.375% due 01/01/08............................. 463 1,700 Transcontinental Gas Pipe Corp. (B1 Moodys) 8.875% due 07/15/12............................. 2,010 1,865 Westar Energy, Inc. (Ba1 Moodys) 8.50% due 07/01/22.............................. 1,963 860 Westar Energy, Inc. (Ba2 Moodys) 9.75% due 05/01/07.............................. 977 1,000 Western Resources, Inc. (Ba1 Moodys) 7.65% due 04/15/23.............................. 1,051 +1,000 Williams Cos., Inc. (The) (B3 Moodys) 8.125% due 03/15/12............................. 1,110 4,210 Williams Cos., Inc. (The) (B3 Moodys) 8.625% due 06/01/10............................. 4,726 2,500 Williams Cos., Inc. (The) (B3 Moodys) 8.75% due 03/15/32.............................. 2,825 @3,260 Xcel Energy, Inc. (B2 Moodys) 8.00% due 12/15/13.............................. 3,427 -------- 97,644 -------- Total corporate notes............................. $559,826 ======== FOREIGN/YANKEE BONDS & NOTES V -- 13.0% CHEMICALS -- 0.9% 400 Methanex Corp. (Ba1 Moodys) 7.75% due 08/15/05.............................. $ 422 1,275 Methanex Corp. (Ba1 Moodys) 8.75% due 08/15/12.............................. 1,422 +@1,800 Rhodia S.A. (Caa1 Moodys) 8.875% due 06/01/11............................. 1,656 EUR @3,250 Rhodia S.A. (Caa1 Moodys) 9.25% due 06/01/11.............................. 3,341 -------- 6,841 -------- COMMUNICATIONS -- 4.1% 1,000 CF Cable TV, Inc. (Ba3 Moodys) 9.125% due 07/15/07............................. 1,055 EUR L780 KPNQwest N.V. (Default) 7.125% due 06/01/09............................. 5 @@L2,665 KPNQwest N.V. (Default) 8.125% due 06/01/09............................. -- 362 Marconi Corp., PLC (Not Rated) 10.00% due 10/31/08............................. 380 835 Marconi Corp., PLC (Not Rated) 8.00% due 04/30/08.............................. 847 7,960 Nortel Networks Corp. (B3 Moodys) 4.25% due 09/01/08.............................. 7,532 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT I VALUE # - ------------ -------- COMMUNICATIONS -- (CONTINUED) 835 Nortel Networks Corp. (B3 Moodys) 6.875% due 09/01/23............................. $ 793 2,785 Rogers Cable, Inc. (Ba2 Moodys) 6.25% due 06/15/13.............................. 2,806 4,200 Rogers Cable, Inc. (Ba2 Moodys) 8.75% due 05/01/32.............................. 4,783 3,725 Rogers Cantel, Inc. (Ba3 Moodys) 9.375% due 06/01/08............................. 3,897 575 Rogers Cantel, Inc. (Ba3 Moodys) 9.75% due 06/01/16.............................. 693 550 Rogers Wireless Communications, Inc. (Ba3 Moodys) 9.625% due 05/01/11............................. 657 3,250 TELUS Corp. (Ba1 Moodys) 8.00% due 06/01/11.............................. 3,800 @2,850 Vivendi Universal S.A. (B1 Moodys) 6.25% due 07/15/08.............................. 3,001 -------- 30,249 -------- CONSUMER DURABLES -- 0.3% EUR @1,875 BSN Glasspack Obligation S.A. (B1 Moodys) 9.25% due 08/01/09.............................. 2,531 -------- ELECTRONICS -- 0.3% 2,030 FIMEP S.A. (B1 Moodys) 10.50% due 02/15/13............................. 2,395 -------- FINANCIAL SERVICES -- 0.2% EUR @1,200 Fresenius Finance B.V. (BB+ S&P) 7.75% due 04/30/09.............................. 1,635 -------- FOOD, BEVERAGE & TOBACCO -- 0.5% @3,350 Burns Philp Capital Property Ltd. (B3 Moodys) 9.75% due 07/15/12.............................. 3,585 EUR @285 Remy Cointreau S.A. (Ba2 Moodys) 6.50% due 07/01/10.............................. 372 -------- 3,957 -------- FOREIGN GOVERNMENTS -- 2.3% 1,850 Brazilian Government International Bond (B2 Moodys) 10.00% due 08/07/11............................. 2,044 1,350 Brazilian Government International Bond (B2 Moodys) 12.75% due 01/15/20............................. 1,715 EUR 3,700 Bundesschatzanweisungen (Aaa Moodys) 2.50% due 09/16/05.............................. 4,667 2,225 Colombia Government International Bond (Ba2 Moodys) 10.00% due 01/23/12............................. 2,436 1,255 Republic of Panama (Ba1 Moodys) 9.625% due 02/08/11............................. 1,450 </Table> The accompanying notes are an integral part of this financial statement. 92 - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT I VALUE # - ------------ -------- FOREIGN/YANKEE BONDS & NOTES V -- (CONTINUED) FOREIGN GOVERNMENTS -- (CONTINUED) GBP $1,550 U.K. Treasury Gilt (Aaa Moodys) 8.50% due 12/07/05.............................. $ 2,990 1,900 Venezuela Government International Bond (Caa1 Moodys) 9.25% due 09/15/27.............................. 1,729 -------- 17,031 -------- FOREST & PAPER PRODUCTS -- 1.9% +950 Abitibi-Consolidated, Inc. (Ba1 Moodys) 6.00% due 06/20/13.............................. 911 1,400 Abitibi-Consolidated, Inc. (Ba1 Moodys) 8.85% due 08/01/30.............................. 1,513 3,030 Cascade, Inc. (Ba1 Moodys) 7.25% due 02/15/13.............................. 3,197 EUR 585 Kappa Beheer BV (B2 Moodys) 10.625% due 07/15/09............................ 786 +1,395 Norske Skogindustrier (Ba2 Moodys) 8.625% due 06/15/11............................. 1,465 635 Pacifica Papers, Inc. (Ba2 Moodys) 10.00% due 03/15/09............................. 673 3,512 Tembec Industries, Inc. (Ba3 Moodys) 7.75% due 03/15/12.............................. 3,494 +875 Tembec Industries, Inc. (Ba3 Moodys) 8.50% due 02/01/11.............................. 906 1,450 Tembec Industries, Inc. (Ba3 Moodys) 8.625% due 06/30/09............................. 1,494 -------- 14,439 -------- HOTELS & GAMING -- 0.2% @1,310 Intrawest Corp. (B1 Moodys) 7.50% due 10/15/13.............................. 1,362 -------- MACHINERY -- 0.1% EUR 381 Flowserve Finance BV (B S&P) 12.25% due 08/15/10............................. 543 -------- MEDIA & ENTERTAINMENT -- 1.4% 2,150 British Sky Broadcasting PLC (Baa3 Moodys) 8.20% due 07/15/09.............................. 2,560 2,640 CanWest Media, Inc. (B1 Moodys) 7.625% due 04/15/13............................. 2,891 1,445 Quebecor Media, Inc. (B2 Moodys) 11.125% due 07/15/11............................ 1,673 1,600 Shaw Communications, Inc. (Ba2 Moodys) 8.25% due 04/11/10.............................. 1,812 1,000 Sun Media Corp. (Ba3 Moodys) 7.625% due 02/15/13............................. 1,070 -------- 10,006 -------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ -------- METALS, MINERALS & MINING -- 0.3% $ +1,954 Crown European Holdings S.A. (B1 Moodys) 9.50% due 03/01/11.............................. $ 2,213 -------- RUBBER & PLASTICS PRODUCTS -- 0.1% 340 Norampac, Inc. (Ba2 Moodys) 6.75% due 06/01/13.............................. 354 -------- TRANSPORTATION -- 0.4% @945 Bombardier Recreational (B3 Moodys) 8.375% due 12/15/13............................. 988 1,285 CP Ships Ltd. (Ba3 Moodys) 10.375% due 07/15/12............................ 1,491 -------- 2,479 -------- Total foreign/yankee bonds & notes................ $ 96,035 ======== <Caption> SHARES - ------------ PREFERRED STOCKS -- 0.0% CONSUMER NON-DURABLES -- 0.0% *@4 Xerox Corp. ...................................... $ 311 -------- Total preferred stocks............................ $ 311 ======== WARRANTS -- 0.0% COMMUNICATIONS -- 0.0% *##@@-- Minorplanet System USA, Inc. ..................... $ -- *##3 Powertel, Inc. ................................... 76 *##1 Solutia, Inc. .................................... 29 *##5 TELUS Corp. ...................................... 17 -------- 122 -------- CONSUMER SERVICES -- 0.0% *##1 Splitrock Services, Inc. ......................... 17 -------- Total warrants.................................... $ 139 ======== SHORT-TERM SECURITIES -- 19.6% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 11.1% 81,868 State Street Navigator Securities Lending Prime Portfolio....................................... $ 81,868 -------- PRINCIPAL AMOUNT - ------------ REPURCHASE AGREEMENTS -- 8.5% $ 63,085 Joint Repurchase Agreement (See Note 2(d)) 0.84% due 01/02/04.............................. 63,085 -------- Total short-term securities....................... $144,953 ======== </Table> The accompanying notes are an integral part of this financial statement. 93 HARTFORD HIGH YIELD HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET VALUE # --------- DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $1,960)....... 0.4% $ 3,179 Total convertible bonds (cost $1,000)... 0.2 1,183 Total convertible preferred stocks (cost $2,720)............................... 0.3 2,329 Total corporate notes (cost $526,090)... 75.6 559,826 Total foreign/yankee bonds & notes (cost $91,261).............................. 13.0 96,035 Total preferred stocks (cost $195)...... 0.0 311 Total warrants (cost $79)............... 0.0 139 Total short-term securities (cost $144,953)............................. 19.6 144,953 ----- --------- Total investment in securities (total cost $768,258) - including $80,201 of securities loaned (See Note 2(i))..... 109.1 807,955 Cash, receivables and other assets...... 2.0 14,805 Securities lending collateral payable to brokers (See Note 2(i))............... (11.1) (81,868) Other liabilities....................... (0.0) (33) ----- --------- Net assets.............................. 100.0% $ 740,859 ===== ========= </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 2,800,000 shares authorized; 73,849 shares outstanding................................... $ 74 Paid in capital................................. 724,752 Accumulated net investment income............... 35,327 Accumulated net realized loss on investments.... (59,038) Unrealized appreciation on investments.......... 39,697 Unrealized appreciation on other assets and liabilities in foreign currencies............. 47 -------- Net assets...................................... $740,859 ======== </Table> <Table> Class IA Net asset value per share ($481,315 / 47,848 shares outstanding) (2,600,000 shares authorized)................................... $10.06 ====== Class IB Net asset value per share ($259,544 / 26,001 shares outstanding) (200,000 shares authorized)................................... $ 9.98 ====== </Table> <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 13.4% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). @ Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2003, the market value of these securities amounted to $91,377 or 12.3% of net assets (See Note 2(m)). ## Illiquid Securities. At December 31, 2003 the market value of these securities amounted to $2,517 or 0.3% of net assets (See Note 2(m)). - Security valued in good faith at fair value by, or under the direction of, the Funds' Board of Directors. The aggregate value of these securities as of December 31, 2003, was @@$-, which represents 0.0% of total net assets. @@ Due to the presentation of the financial statements in thousands, the number of shares and/or market value round to zero. I All principal amounts are in U.S. dollars unless otherwise indicated. EUR -- Euro GBP -- British Pound V The bond ratings are unaudited. L Debt securities are in default due to bankruptcy. </Table> The accompanying notes are an integral part of this financial statement. 94 HARTFORD INDEX HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- COMMON STOCKS -- 99.5% AEROSPACE & DEFENSE -- 0.1% 86 Raytheon Co. ..................................... $ 2,575 ---------- APPAREL & TEXTILE -- 0.1% 26 Jones Apparel Group, Inc. ........................ 916 23 Liz Claiborne, Inc. .............................. 798 22 V. F. Corp. ...................................... 964 ---------- 2,678 ---------- BANKS -- 13.0% 72 AmSouth Bancorp................................... 1,773 265 American Express Co. ............................. 12,781 113 BB&T Corp. ....................................... 4,352 230 Bank One Corp. ................................... 10,500 306 Bank of America Corp. ............................ 24,625 159 Bank of New York Co., Inc. (The).................. 5,279 48 Capital One Financial Corp. ...................... 2,914 46 Charter One Financial, Inc. ...................... 1,584 1,063 Citigroup, Inc. .................................. 51,592 36 Comerica, Inc. ................................... 2,024 38 Countrywide Credit Industries, Inc. .............. 2,877 143 Federal Home Loan Mortgage Association............ 8,361 200 Federal National Mortgage Association............. 15,030 117 Fifth Third Bancorp............................... 6,930 26 First Tennessee National Corp. ................... 1,142 217 Fleet Boston Financial Corp. ..................... 9,485 31 Golden West Financial Corp. ...................... 3,234 47 Huntington Bancshares, Inc. ...................... 1,060 86 KeyCorp. ......................................... 2,532 263 MBNA Corp. ....................................... 6,542 47 Marshall & Ilsley Corp. .......................... 1,786 89 Mellon Financial Corp. ........................... 2,847 420 Morgan (J.P.) Chase & Co. ........................ 15,440 125 National City Corp. .............................. 4,250 31 North Fork Bancorp, Inc. ......................... 1,267 45 Northern Trust Corp. ............................. 2,109 57 PNC Financial Services Group...................... 3,125 *60 Providian Financial Corp. ........................ 696 46 Regions Financial Corp. .......................... 1,701 93 SLM Corp. ........................................ 3,499 68 SouthTrust Corp. ................................. 2,238 69 State Street Corp. ............................... 3,586 58 SunTrust Banks, Inc. ............................. 4,150 62 Synovus Financial Corp. .......................... 1,798 397 U.S. Bancorp...................................... 11,834 39 Union Planters Corp. ............................. 1,225 273 Wachovia Corp. ................................... 12,707 185 Washington Mutual, Inc. .......................... 7,433 349 Wells Fargo Co. .................................. 20,527 19 Zions Bancorp..................................... 1,135 ---------- 277,970 ---------- BUSINESS SERVICES -- 0.8% *209 Cendant Corp. .................................... 4,648 *96 Concord EFS, Inc. ................................ 1,422 *30 Convergys Corp. .................................. 515 29 Equifax, Inc. .................................... 702 17 Fluor Corp. ...................................... 672 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- BUSINESS SERVICES -- (CONTINUED) 85 Interpublic Group of Cos., Inc. (The)............. $ 1,333 *23 Monster Worldwide, Inc. .......................... 509 39 Omnicom Group, Inc. .............................. 3,421 78 Paychex, Inc. .................................... 2,891 *35 Robert Half International, Inc. .................. 824 ---------- 16,937 ---------- CHEMICALS -- 1.5% 47 Air Products & Chemicals, Inc. ................... 2,475 23 Avery Dennison Corp. ............................. 1,276 190 Dow Chemical Co. (The)............................ 7,882 205 du Pont (E.I.) de Nemours & Co. .................. 9,425 16 Eastman Chemical Co. ............................. 631 10 Great Lakes Chemical Corp. ....................... 283 19 International Flavors & Fragrances, Inc. ......... 676 54 Monsanto Co. ..................................... 1,554 35 PPG Industries, Inc. ............................. 2,239 67 Praxair, Inc. .................................... 2,561 46 Rohm & Haas Co. .................................. 1,959 ---------- 30,961 ---------- COMMUNICATIONS -- 4.6% *166 ADC Telecommunications, Inc. ..................... 493 64 ALLTEL Corp. ..................................... 2,995 163 AT&T Corp. ....................................... 3,303 *559 AT&T Wireless Services, Inc. ..................... 4,468 *32 Andrew Corp. ..................................... 364 *86 Avaya, Inc. ...................................... 1,111 381 BellSouth Corp. .................................. 10,775 *98 CIENA Corp. ...................................... 648 30 CenturyTel, Inc. ................................. 969 *40 Comverse Technology, Inc. ........................ 699 *864 Lucent Technologies, Inc. ........................ 2,454 480 Motorola, Inc. ................................... 6,748 *71 Network Appliance, Inc. .......................... 1,459 *227 Nextel Communications, Inc., Class A.............. 6,357 165 QUALCOMM, Inc. ................................... 8,893 *364 Qwest Communications International, Inc. ......... 1,574 36 Rockwell Collins, Inc. ........................... 1,094 682 SBC Communications, Inc. ......................... 17,783 31 Scientific-Atlanta, Inc. ......................... 854 *213 Sprint Corp. -- PCS Group ........................ 1,199 186 Sprint Corp. -- FON Group ........................ 3,058 *86 Tellabs, Inc. .................................... 725 569 Verizon Communications, Inc. ..................... 19,959 ---------- 97,982 ---------- COMPUTERS & OFFICE EQUIPMENT -- 6.2% 162 3M Co. ........................................... 13,751 *75 Apple Computer, Inc. ............................. 1,595 *1,422 Cisco Systems, Inc. .............................. 34,550 *528 Dell, Inc. ....................................... 17,917 *495 EMC Corp. ........................................ 6,397 *67 Gateway, Inc. .................................... 307 628 Hewlett-Packard Co. .............................. 14,431 354 International Business Machines Corp. ............ 32,855 71 International Game Technology..................... 2,546 </Table> The accompanying notes are an integral part of this financial statement. 95 HARTFORD INDEX HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- COMMON STOCKS -- (CONTINUED) COMPUTERS & OFFICE EQUIPMENT -- (CONTINUED) *41 Jabil Circuit, Inc. .............................. $ 1,166 *27 Lexmark International, Inc. ...................... 2,086 48 Pitney Bowes, Inc. ............................... 1,957 *172 Solectron Corp. .................................. 1,018 48 Symbol Technologies, Inc. ........................ 803 ---------- 131,379 ---------- CONSTRUCTION -- 0.2% 13 Centex Corp. ..................................... 1,377 10 Kaufman & Broad Home Corp. ....................... 693 13 Pulte Corp. ...................................... 1,193 ---------- 3,263 ---------- CONSUMER DURABLES -- 0.5% *274 Corning, Inc. .................................... 2,858 19 Grainger (W.W.), Inc. ............................ 891 19 Johnson Controls, Inc. ........................... 2,157 40 Leggett & Platt, Inc. ............................ 855 95 Masco Corp. ...................................... 2,616 56 Newell Rubbermaid, Inc. .......................... 1,286 27 Visteon Corp. .................................... 281 ---------- 10,944 ---------- CONSUMER NON-DURABLES -- 4.0% 12 Alberto-Culver Co., Class B....................... 762 23 AmerisourceBergen Corp. .......................... 1,297 49 Avon Products, Inc. .............................. 3,290 13 Brown-Forman Corp., Class B....................... 1,170 89 Cardinal Health, Inc. ............................ 5,453 43 Clorox Co. (The).................................. 2,111 111 Colgate-Palmolive Co. ............................ 5,540 59 Eastman Kodak Co. ................................ 1,515 53 Ecolab, Inc. ..................................... 1,452 208 Gillette Co. (The)................................ 7,656 36 Hasbro, Inc. ..................................... 766 89 Mattel, Inc. ..................................... 1,707 60 McKesson Corp. ................................... 1,931 *56 Medco Health Solutions, Inc. ..................... 1,892 267 Procter & Gamble Co. (The)........................ 26,681 133 SYSCO Corp. ...................................... 4,965 *91 Safeway, Inc. .................................... 1,997 28 Supervalu, Inc. .................................. 791 30 Tiffany & Co. .................................... 1,365 +412 Tyco International Ltd. .......................... 10,916 *163 Xerox Corp. ...................................... 2,252 ---------- 85,509 ---------- CONSUMER SERVICES -- 0.2% 35 Cintas Corp. ..................................... 1,765 37 H&R Block, Inc. .................................. 2,034 13 Ryder System, Inc. ............................... 451 ---------- 4,250 ---------- DRUGS -- 7.9% 322 Abbott Laboratories............................... 15,012 *266 Amgen, Inc. ...................................... 16,423 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- DRUGS -- (CONTINUED) *68 Biogen Idec, Inc. ................................ $ 2,483 400 Bristol-Myers Squibb Co. ......................... 11,428 *39 Chiron Corp. ..................................... 2,205 231 Eli Lilly & Co. .................................. 16,272 *75 Forest Laboratories, Inc. ........................ 4,654 *46 Genzyme Corp. .................................... 2,280 *50 King Pharmaceuticals, Inc. ....................... 759 *51 MedImmune, Inc. .................................. 1,295 458 Merck & Co., Inc. ................................ 21,180 1,572 Pfizer, Inc. ..................................... 55,550 303 Schering-Plough Corp. ............................ 5,265 14 Sigma-Aldrich Corp. .............................. 819 *22 Watson Pharmaceuticals, Inc. ..................... 1,022 274 Wyeth............................................. 11,646 ---------- 168,293 ---------- EDUCATION -- 0.1% *36 Apollo Group, Inc. ............................... 2,468 ---------- ELECTRICAL EQUIPMENT -- 0.8% *98 Agilent Technologies, Inc. ....................... 2,866 27 Allergan, Inc. ................................... 2,061 43 Applera Corp. -- Applied Biosystems Group......... 888 32 Danaher Corp. .................................... 2,905 *40 KLA-Tencor Corp. ................................. 2,351 *10 Millipore Corp. .................................. 433 26 PerkinElmer, Inc. ................................ 445 38 Rockwell Automation, Inc. ........................ 1,368 17 Tektronix, Inc. .................................. 550 *39 Teradyne, Inc. ................................... 1,004 *34 Thermo Electron Corp. ............................ 845 *25 Waters Corp. ..................................... 829 ---------- 16,545 ---------- ELECTRONICS -- 7.4% *72 Advanced Micro Devices, Inc. ..................... 1,071 *78 Altera Corp. ..................................... 1,771 41 American Power Conversion Corp. .................. 1,000 76 Analog Devices, Inc. ............................. 3,457 *63 Applied Micro Circuits Corp. ..................... 379 *62 Broadcom Corp., Class A........................... 2,127 19 Cooper Industries Ltd. ........................... 1,113 87 Emerson Electric Co. ............................. 5,615 2,069 General Electric Co. ............................. 64,090 1,346 Intel Corp. ...................................... 43,336 *296 JDS Uniphase Corp. ............................... 1,079 *78 LSI Logic Corp. .................................. 692 64 Linear Technology Corp. .......................... 2,709 68 Maxim Integrated Products, Inc. .................. 3,371 16 Maytag Corp. ..................................... 451 *126 Micron Technology, Inc. .......................... 1,695 39 Molex, Inc. ...................................... 1,370 *33 NVIDIA Corp. ..................................... 777 *38 National Semiconductor Corp. ..................... 1,503 *31 Novellus Systems, Inc. ........................... 1,320 *36 PMC-Sierra, Inc. ................................. 717 *17 Power-One, Inc. .................................. 186 *20 QLogic Corp. ..................................... 1,006 </Table> The accompanying notes are an integral part of this financial statement. 96 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- COMMON STOCKS -- (CONTINUED) ELECTRONICS -- (CONTINUED) *107 Sanmina-SCI Corp. ................................ $ 1,344 357 Texas Instruments, Inc. .......................... 10,477 12 Thomas & Betts Corp. ............................. 277 14 Whirlpool Corp. .................................. 1,042 *71 Xilinx, Inc. ..................................... 2,732 ---------- 156,707 ---------- ENERGY & SERVICES -- 5.7% 18 Amerada Hess Corp. ............................... 983 52 Anadarko Petroleum Corp. ......................... 2,639 33 Apache Corp. ..................................... 2,710 14 Ashland, Inc. .................................... 623 *33 BJ Services Co. .................................. 1,170 41 Burlington Resources, Inc. ....................... 2,267 220 ChevronTexaco Corp. .............................. 19,029 140 Conoco, Inc. ..................................... 9,197 48 Devon Energy Corp. ............................... 2,743 24 EOG Resources, Inc. .............................. 1,094 1,362 Exxon Mobil Corp. ................................ 55,835 90 Halliburton Co. .................................. 2,346 21 Kerr-McGee Corp. ................................. 964 64 Marathon Oil Corp. ............................... 2,115 *30 Nabors Industries Ltd. ........................... 1,255 *28 Noble Corp. ...................................... 988 79 Occidental Petroleum Corp. ....................... 3,351 *19 Rowan Cos., Inc. ................................. 449 121 Schlumberger Ltd. ................................ 6,598 16 Sunoco, Inc. ..................................... 813 *66 Transocean, Inc. ................................. 1,583 53 Unocal Corp. ..................................... 1,966 ---------- 120,718 ---------- FINANCIAL SERVICES -- 2.3% 20 Bear Stearns Cos., Inc. (The)..................... 1,614 279 Charles Schwab Corp. (The)........................ 3,309 22 Federated Investors, Inc., Class B................ 658 52 Franklin Resources, Inc. ......................... 2,693 98 Goldman Sachs Group, Inc. (The)................... 9,636 50 Janus Capital Group, Inc. ........................ 814 56 Lehman Brothers Holdings, Inc. ................... 4,323 195 Merrill Lynch & Co., Inc. ........................ 11,425 223 Morgan Stanley Dean Witter & Co. ................. 12,911 38 Plum Creek Timber Co., Inc. ...................... 1,148 26 T Rowe Price Group, Inc. ......................... 1,218 ---------- 49,749 ---------- FOOD, BEVERAGE & TOBACCO -- 5.0% 8 Adolph Coors Co., Class B......................... 422 418 Altria Group, Inc. ............................... 22,774 168 Anheuser Busch Cos., Inc. ........................ 8,842 133 Archer-Daniels-Midland Co. ....................... 2,028 85 Campbell Soup Co. ................................ 2,265 505 Coca-Cola Co. (The)............................... 25,636 94 Coca-Cola Enterprises, Inc. ...................... 2,049 111 ConAgra Foods, Inc. .............................. 2,918 77 General Mills, Inc. .............................. 3,483 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- FOOD, BEVERAGE & TOBACCO -- (CONTINUED) 72 Heinz (H.J.) Co. ................................. $ 2,640 *23 Hercules, Inc. ................................... 279 27 Hershey Foods Corp. .............................. 2,068 84 Kellogg Co. ...................................... 3,203 29 McCormick & Co., Inc. ............................ 861 54 Pepsi Bottling Group, Inc. (The).................. 1,308 354 PepsiCo, Inc. .................................... 16,488 17 Reynolds (R.J.) Tobacco Holdings, Inc. ........... 1,012 163 Sara Lee Corp. ................................... 3,536 34 UST, Inc. ........................................ 1,219 46 Wrigley (W.M.) Jr. Co. ........................... 2,600 ---------- 105,631 ---------- FOREST & PAPER PRODUCTS -- 0.9% 11 Bemis Co., Inc. .................................. 549 18 Boise Cascade Corp. .............................. 584 52 Georgia-Pacific Corp. ............................ 1,605 99 International Paper Co. .......................... 4,269 104 Kimberly-Clark Corp. ............................. 6,142 *22 Louisiana-Pacific Corp. .......................... 391 41 MeadWestvaco Corp. ............................... 1,231 *32 Pactiv Corp. ..................................... 773 11 Temple-Inland, Inc. .............................. 701 45 Weyerhaeuser Co. ................................. 2,897 ---------- 19,142 ---------- HEALTH SERVICES -- 0.4% *16 Express Scripts, Inc. ............................ 1,076 102 HCA, Inc. ........................................ 4,386 49 Health Management Associates, Inc., Class A....... 1,186 18 Manor Care, Inc. ................................. 634 *96 Tenet Healthcare Corp. ........................... 1,536 ---------- 8,818 ---------- HOTELS & GAMING -- 0.2% 78 Hilton Hotels Corp. .............................. 1,340 48 Marriott International, Inc., Class A............. 2,200 42 Starwood Hotels & Resorts Worldwide, Inc. ........ 1,500 ---------- 5,040 ---------- INSURANCE -- 5.5% 60 Ace Ltd. ......................................... 2,481 31 Aetna, Inc. ...................................... 2,124 108 AFLAC, Inc. ...................................... 3,923 151 Allstate Corp. (The).............................. 6,496 23 Ambac Financial Group, Inc. ...................... 1,589 560 American International Group, Inc. ............... 37,100 *29 Anthem, Inc. ..................................... 2,138 65 Aon Corp. ........................................ 1,547 30 CIGNA Corp. ...................................... 1,708 40 Chubb Corp. (The)................................. 2,743 34 Cincinnati Financial Corp. ....................... 1,442 *33 Humana, Inc. ..................................... 757 30 Jefferson-Pilot Corp. ............................ 1,509 61 John Hancock Financial Services, Inc. ............ 2,295 38 Lincoln National Corp. ........................... 1,520 40 Loews Corp. ...................................... 1,968 </Table> The accompanying notes are an integral part of this financial statement. 97 HARTFORD INDEX HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- COMMON STOCKS -- (CONTINUED) INSURANCE -- (CONTINUED) 31 MBIA, Inc. ....................................... $ 1,833 21 MGIC Investment Corp. ............................ 1,205 109 Marsh & McLennan Cos., Inc. ...................... 5,231 161 MetLife, Inc. .................................... 5,411 68 Principal Financial Group (The)................... 2,259 46 Progressive Corp. (The)........................... 3,871 114 Prudential Financial, Inc. ....................... 4,774 30 SAFECO Corp. ..................................... 1,157 49 St. Paul Cos., Inc. (The)......................... 1,942 24 Torchmark Corp. .................................. 1,090 216 Travelers Property Casualty Corp. -- Class B...... 3,659 121 UnitedHealth Group, Inc. ......................... 7,032 63 UnumProvident Corp. .............................. 987 *31 Wellpoint Health Networks, Inc. .................. 3,039 30 XL Capital Ltd., Class A.......................... 2,288 ---------- 117,118 ---------- MACHINERY -- 1.4% *15 American Standard Cos., Inc. ..................... 1,511 *343 Applied Materials, Inc. .......................... 7,693 69 Baker Hughes, Inc. ............................... 2,218 16 Black & Decker Corp. (The)........................ 788 72 Caterpillar, Inc. ................................ 5,941 9 Cummins, Inc. .................................... 428 49 Deere (John) & Co. ............................... 3,217 42 Dover Corp. ...................................... 1,657 16 Eaton Corp. ...................................... 1,688 36 Ingersoll Rand Co. ............................... 2,426 26 Pall Corp. ....................................... 690 24 Parker-Hannifin Corp. ............................ 1,452 17 Stanley Works (The)............................... 632 ---------- 30,341 ---------- MEDIA & ENTERTAINMENT -- 3.9% *14 American Greetings Corp. ......................... 300 127 Clear Channel Communications, Inc. ............... 5,938 *464 Comcast Corp., Class A ........................... 15,244 23 Donnelly (R.R.) & Sons Co. ....................... 706 17 Dow Jones & Co., Inc. ............................ 837 56 Gannett Co., Inc. ................................ 4,976 23 Harrah's Entertainment, Inc. ..................... 1,131 16 Knight-Ridder, Inc. .............................. 1,274 39 McGraw-Hill Cos., Inc. (The)...................... 2,758 10 Meredith Corp. ................................... 506 31 New York Times Co. (The), Class A................. 1,466 *932 Time Warner, Inc. ................................ 16,761 64 Tribune Co. ...................................... 3,322 *+66 Univision Communications, Inc. ................... 2,635 360 Viacom, Inc., Class B............................. 15,993 421 Walt Disney Co. (The)............................. 9,832 ---------- 83,679 ---------- MEDICAL INSTRUMENTS & SUPPLIES -- 3.4% 11 Bard (C.R.), Inc. ................................ 867 11 Bausch & Lomb, Inc. .............................. 560 126 Baxter International, Inc. ....................... 3,836 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- MEDICAL INSTRUMENT & SUPPLIES -- (CONTINUED) 52 Becton, Dickinson & Co. .......................... $ 2,152 53 Biomet, Inc. ..................................... 1,918 *169 Boston Scientific Corp. .......................... 6,205 64 Guidant Corp. .................................... 3,858 612 Johnson & Johnson................................. 31,591 250 Medtronic, Inc. .................................. 12,139 *36 St. Jude Medical, Inc. ........................... 2,181 41 Stryker Corp. .................................... 3,494 *50 Zimmer Holdings, Inc. ............................ 3,509 ---------- 72,310 ---------- METALS, MINERALS & MINING -- 1.3% 178 Alcoa, Inc. ...................................... 6,776 17 Allegheny Technologies, Inc. ..................... 220 12 Ball Corp. ....................................... 691 12 Crane Co. ........................................ 375 26 Engelhard Corp. .................................. 773 30 Fortune Brands, Inc. ............................. 2,148 38 Freeport-McMoRan Copper & Gold, Inc., Class B..... 1,585 63 Illinois Tool Works, Inc. ........................ 5,323 89 Newmont Mining Corp. ............................. 4,328 16 Nucor Corp. ...................................... 901 *18 Phelps Dodge Corp. ............................... 1,402 12 Snap-On, Inc. .................................... 387 21 United States Steel Corp. ........................ 746 21 Vulcan Materials Co. ............................. 995 18 Worthington Industries, Inc. ..................... 319 ---------- 26,969 ---------- REAL ESTATE INVESTMENT TRUST -- 0.4% 19 Apartment Investment & Management Co., Class A.... 669 82 Equity Office Properties Trust.................... 2,361 57 Equity Residential Properties Trust............... 1,676 37 Prologis.......................................... 1,191 39 Simon Property Group, Inc. ....................... 1,826 ---------- 7,723 ---------- RESEARCH & TESTING FACILITIES -- 0.2% 31 Moody's Corp. .................................... 1,854 *21 Quest Diagnostics, Inc. .......................... 1,565 ---------- 3,419 ---------- RETAIL -- 7.5% 76 Albertson's, Inc. ................................ 1,712 *18 AutoZone, Inc. ................................... 1,558 *57 AutoNation, Inc. ................................. 1,042 *61 Bed Bath & Beyond, Inc. .......................... 2,645 67 Best Buy Co., Inc. ............................... 3,482 *24 Big Lots, Inc. ................................... 342 81 CVS Corp. ........................................ 2,939 43 Circuit City Stores Group......................... 437 *94 Costco Wholesale Corp. ........................... 3,507 34 Darden Restaurants, Inc. ......................... 715 17 Dillard's, Inc., Class A.......................... 282 </Table> The accompanying notes are an integral part of this financial statement. 98 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- COMMON STOCKS -- (CONTINUED) RETAIL -- (CONTINUED) 69 Dollar General Corp. ............................. $ 1,458 *133 eBay, Inc. ....................................... 8,597 36 Family Dollar Stores, Inc. ....................... 1,274 37 Federated Department Stores, Inc. ................ 1,757 185 Gap, Inc. (The)................................... 4,284 469 Home Depot, Inc. (The)............................ 16,638 *70 Kohl's Corp. ..................................... 3,148 *154 Kroger Co. (The).................................. 2,841 106 Limited Brands, Inc. ............................. 1,920 162 Lowe's Cos., Inc. ................................ 8,972 59 May Department Stores Co. (The)................... 1,728 262 McDonald's Corp. ................................. 6,493 28 Nordstrom, Inc. .................................. 973 *65 Office Depot, Inc. ............................... 1,078 56 Penney (J.C.) Co., Inc. .......................... 1,478 34 RadioShack Corp. ................................. 1,038 52 Sears, Roebuck & Co. ............................. 2,381 30 Sherwin-Williams Co. (The)........................ 1,044 *102 Staples, Inc. .................................... 2,785 *81 Starbucks Corp. .................................. 2,665 104 TJX Cos., Inc. (The).............................. 2,286 188 Target Corp. ..................................... 7,211 *44 Toys "R" Us, Inc. ................................ 556 892 Wal-Mart Stores, Inc. ............................ 47,305 211 Walgreen Co. ..................................... 7,686 23 Wendy's International, Inc. ...................... 922 +29 Winn-Dixie Stores, Inc. .......................... 290 *61 YUM! Brands, Inc. ................................ 2,083 ---------- 159,552 ---------- RUBBER & PLASTICS PRODUCTS -- 0.3% 15 Cooper Tire & Rubber Co. ......................... 326 +36 Goodyear Tire & Rubber Co. (The).................. 284 54 NIKE, Inc., Class B............................... 3,705 12 Reebok International Ltd. ........................ 479 *18 Sealed Air Corp. ................................. 950 12 Tupperware Corp. ................................. 210 ---------- 5,954 ---------- SOFTWARE & SERVICES -- 6.1% 48 Adobe Systems, Inc. .............................. 1,894 23 Autodesk, Inc. ................................... 565 123 Automatic Data Processing, Inc. .................. 4,853 *47 BMC Software, Inc. ............................... 869 *34 Citrix Systems, Inc. ............................. 716 119 Computer Associates International, Inc. .......... 3,262 *39 Computer Sciences Corp. .......................... 1,708 *79 Compuware Corp. .................................. 478 10 Deluxe Corp. ..................................... 432 *61 Electronic Arts, Inc. ............................ 2,934 99 Electronic Data Systems Corp. .................... 2,430 150 First Data Corp. ................................. 6,172 *40 Fiserv, Inc. ..................................... 1,578 49 IMS Health, Inc. ................................. 1,226 *41 Intuit, Inc. ..................................... 2,164 *19 Mercury Interactive Corp. ........................ 905 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- SOFTWARE & SERVICES -- (CONTINUED) 2,228 Microsoft Corp. .................................. $ 61,347 *20 NCR Corp. ........................................ 757 *77 Novell, Inc. ..................................... 809 *1,077 Oracle Corp. ..................................... 14,214 *55 Parametric Technology Corp. ...................... 216 *77 PeopleSoft, Inc. ................................. 1,762 *102 Siebel Systems, Inc. ............................. 1,418 *673 Sun Microsystems, Inc. ........................... 3,022 *59 SunGard Data Systems, Inc. ....................... 1,640 *64 Symantec Corp. ................................... 2,200 *68 Unisys Corp. ..................................... 1,011 *88 VERITAS Software Corp. ........................... 3,274 *135 Yahoo!, Inc. ..................................... 6,117 ---------- 129,973 ---------- TRANSPORTATION -- 4.6% 173 Boeing Co. (The).................................. 7,304 19 Brunswick Corp. .................................. 602 77 Burlington Northern Santa Fe Corp. ............... 2,475 44 CSX Corp. ........................................ 1,585 130 Carnival Corp. ................................... 5,157 31 Dana Corp. ....................................... 561 115 Delphi Corp. ..................................... 1,179 25 Delta Airlines, Inc. ............................. 301 61 FedEx Corp. ...................................... 4,148 377 Ford Motor Co. ................................... 6,036 41 General Dynamics Corp. ........................... 3,683 116 General Motors Corp. ............................. 6,168 36 Genuine Parts Co. ................................ 1,191 24 Goodrich Corp. ................................... 720 62 Harley-Davidson, Inc. ............................ 2,966 178 Honeywell International, Inc. .................... 5,939 19 ITT Industries, Inc. ............................. 1,409 93 Lockheed Martin Corp. ............................ 4,774 *14 Navistar International Corp. ..................... 676 80 Norfolk Southern Corp. ........................... 1,902 38 Northrop Grumman Corp. ........................... 3,607 24 PACCAR, Inc. ..................................... 2,046 30 Sabre Holdings Corp. ............................. 638 162 Southwest Airlines Co. ........................... 2,617 28 Textron, Inc. .................................... 1,597 53 Union Pacific Corp. .............................. 3,655 232 United Parcel Service, Inc. ...................... 17,266 97 United Technologies Corp. ........................ 9,190 ---------- 99,392 ---------- UTILITIES -- 3.0% *128 AES Corp. (The)................................... 1,212 *26 Allegheny Energy, Inc. ........................... 334 *66 Allied Waste Industries, Inc. .................... 916 33 Ameren Corp. ..................................... 1,539 81 American Electric Power Co., Inc. ................ 2,482 33 CMS Energy Corp. ................................. 283 *+85 Calpine Corp. .................................... 409 63 Centerpoint Energy, Inc. ......................... 611 37 Cinergy Corp. .................................... 1,425 *59 Citizens Communications Co. ...................... 728 </Table> The accompanying notes are an integral part of this financial statement. 99 HARTFORD INDEX HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- COMMON STOCKS -- (CONTINUED) UTILITIES -- (CONTINUED) 46 Consolidated Edison, Inc. ........................ $ 1,997 34 Constellation Energy Group, Inc. ................. 1,351 35 DTE Energy Co. ................................... 1,366 67 Dominion Resources, Inc. ......................... 4,267 187 Duke Energy Corp. ................................ 3,824 78 Dynegy Inc., Class A.............................. 333 *67 Edison International.............................. 1,472 125 El Paso Corp. .................................... 1,026 47 Entergy Corp. .................................... 2,691 67 Exelon Corp. ..................................... 4,471 38 FPL Group, Inc. .................................. 2,478 68 FirstEnergy Corp. ................................ 2,391 33 KeySpan Corp. .................................... 1,207 25 Kinder Morgan, Inc. .............................. 1,501 9 NICOR, Inc. ...................................... 308 54 NiSource, Inc. ................................... 1,187 *85 PG&E Corp. ....................................... 2,373 37 PPL Corp. ........................................ 1,597 8 Peoples Energy Corp. ............................. 320 19 Pinnacle West Capital Corp. ...................... 751 50 Progress Energy, Inc. ............................ 2,285 48 Public Service Enterprise Group, Inc. ............ 2,121 47 Sempra Energy..................................... 1,402 151 Southern Co. (The)................................ 4,562 +39 TECO Energy, Inc. ................................ 558 67 TXU Corp. ........................................ 1,583 120 Waste Management, Inc. ........................... 3,552 107 Williams Cos., Inc. (The)......................... 1,049 82 Xcel Energy, Inc. ................................ 1,396 ---------- 65,358 ---------- Total common stocks............................... $2,119,347 ========== SHORT-TERM SECURITIES -- 1.6% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 0.4% 8,871 Boston Global Investment Trust.................... $ 8,871 ---------- PRINCIPAL AMOUNT ------- REPURCHASE AGREEMENTS -- 1.1% $22,860 Joint Repurchase Agreement (See Note 2(d)) 0.84% due 01/02/04.................................... 22,860 ---------- U.S. TREASURY BILLS -- 0.1% 1,800 0.84% due 03/18/04................................ 1,797 525 0.84% due 03/18/04................................ 524 ---------- 2,321 ---------- Total short-term securities....................... $ 34,052 ========== </Table> <Table> <Caption> MARKET VALUE # ---------- DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $1,953,628)............. 99.5% $2,119,347 Total short-term securities (cost $34,052)........ 1.6 34,052 ----- ---------- Total investment in securities (total cost $1,987,680) -- including $8,575 of securities loaned (See Note 2(i)).......................... 101.1 2,153,399 Cash, receivables and other assets................ 0.1 3,019 Payable for securities purchased.................. (0.7) (14,647) Payable for Fund shares redeemed.................. (0.1) (2,405) Securities lending collateral payable to brokers (See Note 2(i))................................. (0.4) (8,871) Other liabilities................................. (0.0) (105) ----- ---------- Net assets........................................ 100.0% $2,130,390 ===== ========== </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 4,000,000 shares authorized; 72,006 shares outstanding..................................... $ 72 Paid in capital................................... 1,965,154 Accumulated net investment income................. 1,722 Accumulated net realized loss on investments...... (2,595) Unrealized appreciation on investments............ 165,719 Unrealized appreciation on futures contracts ++... 318 ---------- Net assets........................................ $2,130,390 ========== </Table> <Table> Class IA Net asset value per share ($1,934,490 / 65,362 shares outstanding) (3,500,000 shares authorized)....................................... $29.60 ====== Class IB Net asset value per share ($195,900 / 6,644 shares outstanding) (500,000 shares authorized).......... $29.49 ====== </Table> <Table> # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). ++ The Fund had 49 Standard & Poor's 500 March 2004 Futures contracts open as of December 31, 2003. These contracts had a value of $13,605 as of December 31, 2003 and were collateralized by various U.S. Treasury Bills with a market value of $2,321. </Table> The accompanying notes are an integral part of this financial statement. 100 HARTFORD INTERNATIONAL CAPITAL APPRECIATION HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- 94.5% BRAZIL -- 3.7% 87 Empresa Brasileira de Aeronautica S.A., ADR (Transportation)................................ $ 3,045 71 Unibanco GDR (Banks).............................. 1,771 -------- 4,816 -------- CANADA -- 1.6% *+32 Research in Motion Ltd. (Communications).......... 2,119 -------- FINLAND -- 0.2% -13 Nokia Oyj (Agriculture & Fishing)................. 221 -------- FRANCE -- 19.2% -55 AXA (Financial Services).......................... 1,172 +-74 Alcatel S.A. (Communications)..................... 956 -28 BNP Paribas S.A. (Banks).......................... 1,776 +-30 Club Mediterranee S.A. (Consumer Services)........ 1,117 23 Essilor International S.A. (Retail)............... 1,179 -50 France Telecom S.A. (Communications).............. 1,431 +-57 M6-Metropole Television (Electronics)............. 1,857 -25 Pinault Printemps Redoute S.A. (Retail)........... 2,454 -27 Renault S.A. (Transportation)..................... 1,839 +24 Rodriguez Group (Construction).................... 1,363 -19 TotalFinaElf S.A., B shares (Energy & Services)... 3,451 -18 Unibail Holding Co. (Real Estate)................. 1,638 +-105 Vivendi S.A. (Media & Entertainment).............. 2,558 *277 Wanadoo (Communications).......................... 2,272 -------- 25,063 -------- GERMANY -- 15.3% -27 Allianz AG (Insurance)............................ 3,390 53 BMW AG (Transportation)........................... 2,475 -18 Deutsche Bank AG (Banks).......................... 1,449 -28 Muenchener Rueckversicherungs Gesellschaft AG (Insurance)..................................... 3,436 -16 SAP AG (Software & Services)...................... 2,666 50 Schering AG (Drugs)............................... 2,507 +-51 Siemens AG (Electronics).......................... 4,101 -------- 20,024 -------- HONG KONG -- 4.4% +1,076 China Merchants Holdings International Co., Ltd. (Aerospace & Defense)........................... 1,421 -1,027 Cnooc Ltd. (Energy & Services).................... 2,026 -824 Techtronic Industries Co. (Electrical Equipment).. 2,299 -------- 5,746 -------- IRELAND -- 1.3% *+75 Elan Corp., ADR (Drugs)........................... 519 *+24 Ryanair Holdings PLC, ADR (Transportation)........ 1,215 -------- 1,734 -------- </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- -------- ISRAEL -- 0.7% +18 Teva Pharmaceutical Industries Ltd., ADR (Drugs)......................................... $ 1,015 -------- JAPAN -- 8.7% -@@-- DDI Corp. (Communications)........................ 1,243 -@@-- Dentsu, Inc. (Business Services).................. 1,360 -19 Fast Retailing Co., Ltd. (Retail)................. 1,172 -31 Ito-Yokado Co., Ltd. (Retail)..................... 983 -@@-- Japan Tobacco, Inc. (Food, Beverage & Tobacco).... 1,247 -135 Matsushita Electric Industrial Co. (Electronics)................................... 1,879 -@@-- Nippon Telegraph & Telephone Corp. (Communications)................................ 1,239 -28 Shin-Etsu Chemical Co., Ltd. (Chemicals).......... 1,158 -120 Sumitomo Electric Industries Ltd. (Electrical Equipment)...................................... 1,078 -------- 11,359 -------- NETHERLANDS -- 4.0% *96 ASM Lithography Holding N.V., NY Reg shares (Electronics)................................... 1,932 -112 European Aeronautic Defense & Space Co. (Aerospace & Defense)...................................... 2,666 22 Koninklijke Numico N.V. (Food, Beverage & Tobacco)........................................ 611 -------- 5,209 -------- RUSSIA -- 2.1% +42 JSC Mining & Smelting Co., ADR (Metals, Minerals & Mining)......................................... 2,704 -------- SOUTH AFRICA -- 0.9% 116 Telkom S.A., Ltd. (Communications)................ 1,210 -------- SOUTH KOREA -- 1.9% *-156 Kia Motors Corp. (Transportation)................. 1,421 @6 Samsung Electronics Co., Ltd., GDR (Electronics)................................... 1,053 -------- 2,474 -------- SWEDEN -- 4.3% -89 Atlas Copco AB (Machinery)........................ 3,188 *136 Telefonaktiebolaget LM Ericsson ADR (Communications)................................ 2,409 -------- 5,597 -------- SWITZERLAND -- 7.3% +740 ABB Ltd. (Energy & Services)...................... 3,711 -49 Credit Suisse Group (Banks)....................... 1,771 -40 Roche Holdings AG (Drugs)......................... 4,037 -------- 9,519 -------- </Table> The accompanying notes are an integral part of this financial statement. 101 HARTFORD INTERNATIONAL CAPITAL APPRECIATION HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- (CONTINUED) UNITED KINGDOM -- 18.4% -46 AstraZeneca PLC (Drugs)........................... $ 2,215 19 BP Amoco PLC, ADR (Energy & Services)............. 933 *-425 British Airways PLC (Transportation).............. 1,770 -420 Burberry Group PLC (Apparel & Textile)............ 2,745 -1,213 Carphone Warehouse Group PLC (Communications)..... 3,200 -404 Compass Group PLC (Food, Beverage & Tobacco)...... 2,757 *1,387 Corus Group PLC (Metals, Minerals & Mining)....... 745 -612 EMI Group PLC (Media & Entertainment)............. 1,742 -63 Imperial Tobacco Group PLC (Food, Beverage & Tobacco)........................................ 1,245 -462 Kingfisher PLC (Retail)........................... 2,313 *-110 Lastminute.com PLC (Software & Services).......... 439 359 Polls-Royce Group PLC (Aerospace & Defense)....... 1,138 -1,181 Vodafone Group PLC (Communications)............... 2,935 -------- 24,177 -------- UNITED STATES OF AMERICA -- 0.5% 11 Talisman Energy, Inc. (Energy & Services)......... 628 -------- Total common stocks............................... $123,615 ======== SHORT-TERM SECURITIES -- 23.2% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 17.3% 22,674 State Street Navigator Securities Lending Prime Portfolio....................................... $ 22,674 -------- <Caption> PRINCIPAL AMOUNT - --------- REPURCHASE AGREEMENT -- 5.9% $ 7,705 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... 7,705 -------- Total short-term securities....................... $ 30,379 ======== </Table> <Table> DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $108,021)............... 94.5% $123,615 Total short-term securities (cost $30,379)........ 23.2 30,379 ----- -------- Total investment in securities (total cost $138,400) -- including $21,278 of securities loaned (See Note 2(i)).......................... 117.7 153,994 Cash, receivables and other assets................ 0.3 401 Payable for securities purchased.................. (0.6) (789) Payable for Fund shares redeemed.................. (0.1) (66) Securities lending collateral payable to brokers (See Note 2(i))................................. (17.3) (22,674) Other liabilities................................. (0.0) (21) ----- -------- Net assets........................................ 100.0% $130,845 ===== ======== </Table> <Table> <Caption> MARKET VALUE # -------- SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 800,000 shares authorized; 12,857 shares outstanding..................... $ 13 Paid in capital............................................. 111,710 Accumulated net investment loss............................. (14) Accumulated net realized gain on investments................ 3,541 Unrealized appreciation on investments...................... 15,594 Unrealized appreciation on forward foreign currency contracts (See Note 2(g)) @@@............................. 13 Unrealized depreciation on other assets and liabilities in foreign currencies........................................ (12) -------- Net assets.................................................. $130,845 ======== </Table> <Table> Class IA Net asset value per share ($67,147 / 6,584 shares outstanding) (600,000 shares authorized)................................... $10.20 ====== Class IB Net asset value per share ($63,698 / 6,273 shares outstanding) (200,000 shares authorized)................................... $10.16 ====== </Table> <Table> DIVERSIFICATION BY INDUSTRY Aerospace & Defense....................... 4.0% $ 5,225 Agriculture & Fishing..................... 0.2 221 Apparel & Textile......................... 2.1 2,745 Banks..................................... 5.2 6,767 Business Services......................... 1.0 1,360 Chemicals................................. 0.9 1,158 Communications............................ 14.5 19,014 Construction.............................. 1.0 1,363 Consumer Services......................... 0.9 1,117 Drugs..................................... 7.9 10,293 Electrical Equipment...................... 2.6 3,377 Electronics............................... 8.3 10,822 Energy & Services......................... 8.2 10,749 Financial Services........................ 0.9 1,172 Food, Beverage & Tobacco.................. 4.5 5,860 Insurance................................. 5.2 6,826 Machinery................................. 2.4 3,188 Media & Entertainment..................... 3.3 4,300 Metals, Minerals & Mining................. 2.6 3,449 Real Estate............................... 1.3 1,638 Retail.................................... 6.2 8,101 Software & Services....................... 2.4 3,105 Transportation............................ 8.9 11,765 ---- -------- Total common stocks..................... 94.5% $123,615 ==== ======== </Table> The accompanying notes are an integral part of this financial statement. 102 - -------------------------------------------------------------------------------- <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 94.0% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). @ Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2003, the market value of these securities amounted to $1,053 or 0.8% of net assets (See Note 2(m)). - Security valued in good faith at fair value by, or under the direction of, the Funds' Board of Directors. The aggregate value of these securities as of December 31, 2003 was $85,638, which represents 65.4% of total net assets. @@ Due to the presentation of the financial statements in thousands, the number of shares and/or market value round to zero. </Table> @@@FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING AT DECEMBER 31, 2003 <Table> <Caption> UNREALIZED APPRECIATION DESCRIPTION MARKET VALUE CONTRACT DELIVERY (DEPRECIATION) - ----------- ------------ -------- -------- -------------- Japanese Yen (Buy)......... $ 57 $ 57 1/7/2004 $-- Japanese Yen (Buy)......... 129 129 1/6/2004 -- Japanese Yen (Buy)......... 163 163 1/5/2004 -- South African Rands (Buy).................... 439 426 1/2/2004 13 --- $13 === </Table> The accompanying notes are an integral part of this financial statement. 103 HARTFORD INTERNATIONAL OPPORTUNITIES HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- 98.0% AUSTRALIA -- 0.5% -981 Rinker Group Ltd. (Construction).................. $ 4,853 -------- AUSTRIA -- 0.6% *-413 Telekom Austria AG (Communications)............... 5,101 -------- BRAZIL -- 1.8% 144 Empresa Brasileira de Aeronautica S.A., ADR (Transportation)................................ 5,055 176 Petroleo Brasileiro S.A., ADR (Energy & Services)....................................... 5,146 238 Unibanco GDR (Banks).............................. 5,928 -------- 16,129 -------- CANADA -- 5.6% 133 Canadian National Railway Co. (Transportation).... 8,423 *304 Inco Ltd. (Metals, Minerals & Mining)............. 12,151 +361 National Bank of Canada (Banks)................... 12,041 +156 Royal Bank of Canada (Banks)...................... 7,456 +181 Talisman Energy, Inc. (Energy & Services)......... 10,315 -------- 50,386 -------- CHINA -- 0.6% -13,200 China Telecom Corp., Ltd. (Communications)........ 5,449 -------- FINLAND -- 0.8% -422 Nokia Oyj (Agriculture & Fishing)................. 7,218 -------- FRANCE -- 14.7% -323 AXA (Financial Services).......................... 6,953 -193 Aventis S.A. (Drugs).............................. 12,804 -154 BNP Paribas S.A. (Banks).......................... 9,755 +-186 Carrefour S.A. (Retail)........................... 10,222 +151 Essilor International S.A. (Retail)............... 7,819 +-387 France Telecom S.A. (Communications).............. 11,052 +-220 Lafarge S.A. (Construction)....................... 19,710 +-100 Pinault Printemps Redoute S.A. (Retail)........... 9,645 -165 Schneider Electric S.A. (Electrical Equipment).... 10,784 -223 Societe Television Francaise (Media & Entertainment).................................. 7,801 -139 TotalFinaElf S.A., B shares (Energy & Services)... 25,733 -------- 132,278 -------- GERMANY -- 4.3% 184 BMW AG (Transportation)........................... 8,511 +-142 Metro AG (Retail)................................. 6,271 -54 SAP AG (Software & Services)...................... 8,958 115 Schering AG (Drugs)............................... 5,799 -146 Veba AG (Utilities)............................... 9,516 -------- 39,055 -------- IRELAND -- 0.6% *+218 Elan Corp., ADR (Drugs)........................... 1,503 *513 Ryanair Holdings PLC (Transportation)............. 4,267 -------- 5,770 -------- </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- -------- ITALY -- 3.7% +-680 ENI S.p.A. (Energy & Services).................... $ 12,891 +908 Fiat S.p.A. (Consumer Durables)................... 6,967 +-2,539 UniCredito Italiano S.p.A. (Financial Services)... 13,725 -------- 33,583 -------- JAPAN -- 15.3% +-783 Asahi Glass Co., Ltd. (Construction).............. 6,446 +-1,058 Bank of Yokohama Ltd. (The) (Banks)............... 4,936 -384 Dai Nippon Printing Co., Ltd. (Business Services)....................................... 5,424 -207 Fuji Photo Film Co., Ltd. (Consumer Non- Durables)....................................... 6,762 -180 Honda Motor Co., Ltd. (Transportation)............ 8,104 -1 Japan Tobacco, Inc. (Food, Beverage & Tobacco).... 4,423 -22 Keyence Corp. (Machinery)......................... 4,690 -465 Matsushita Electric Industrial Co. (Electronics)................................... 6,471 -8 NTT DoCoMo, Inc. (Communications)................. 18,200 -59 Nintendo Co., Ltd. (Consumer Non-Durables)........ 5,507 -38 Nomura Research Institut (Business Services)...... 3,767 -186 Nomura Securities (Insurance)..................... 3,156 -30 Obic Co., Ltd. (Software & Services).............. 6,054 -236 Olympus Optical Co., Ltd. (Medical Instruments & Supplies)....................................... 5,150 -73 Orix Corp. (Financial Services)................... 6,088 -54 Rohm Co., Ltd. (Electronics)...................... 6,324 *-5 SKY Perfect Communications, Inc. (Communications)................................ 6,305 -204 Shin-Etsu Chemical Co., Ltd. (Chemicals).......... 8,375 +-252 Shionogi & Co., Ltd. (Drugs)...................... 4,705 -697 Sompo Japan Insurance, Inc. (Insurance)........... 5,752 +-74 Sony Corp. (Electronics).......................... 2,554 122 Sony Corp., ADR (Electronics)..................... 4,226 +-751 Sumitomo Trust & Banking Co., Ltd. (The) (Banks)......................................... 4,484 -------- 137,903 -------- MALAYSIA -- 1.8% -2,500 Berjaya Sports Toto BHD (Software & Services)..... 2,670 -2,045 Malayan Banking (Banks)........................... 5,194 -3,183 Public Bank BHD (Financial Services).............. 2,592 -2,031 Resort World Berhad (Hotels & Gaming)............. 5,390 -------- 15,846 -------- MEXICO -- 0.9% 298 America Movil S.A. de C.V., ADR (Communications)................................ 8,156 -------- NETHERLANDS -- 2.5% -291 Akzo Nobel N.V. (Chemicals)....................... 11,148 *-1,145 Koninklijke KPN N.V. (Communications)............. 8,858 -88 TNT Post Group N.V. (Consumer Services)........... 2,063 -------- 22,069 -------- </Table> The accompanying notes are an integral part of this financial statement. 104 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- (CONTINUED) RUSSIA -- 1.0% 55 JSC Mining & Smelting Co., ADR (Metals, Minerals & Mining)......................................... $ 3,564 44 Sibnef ADR (Energy & Services).................... 1,243 +142 Surgutneftegaz ADR (Energy & Services)............ 4,135 -------- 8,942 -------- SOUTH AFRICA -- 0.5% -106 Anglo American Platinum Corp., Ltd. (Metals, Minerals & Mining).............................. 4,598 -------- SOUTH KOREA -- 4.4% *-957 Kia Motors Corp. (Transportation)................. 8,741 *-294 Kookmin Bank (Banks).............................. 11,146 *-142 LG Electronics, Inc. (Electronics)................ 6,963 *201 SK Corp. (Energy & Services)...................... 4,631 -47 SK Telecom Co., Ltd. (Communications)............. 7,879 -------- 39,360 -------- SWEDEN -- 1.3% -1,560 Nordea AB (Banks)................................. 11,718 -------- SWITZERLAND -- 8.4% +2,526 ABB Ltd. (Construction)........................... 12,804 -76 Nestle S.A. (Food, Beverage & Tobacco)............ 18,856 -175 Roche Holdings AG (Drugs)......................... 17,721 +-241 STMicroelectronics N.V. (Electronics)............. 6,552 -294 UBS AG (Banks).................................... 20,115 -------- 76,048 -------- TAIWAN -- 1.5% @328 China Steel Corp., GDR (Metals, Minerals & Mining)......................................... 5,456 *-9,178 United Microelectronics Corp. (Electronics)....... 7,861 -------- 13,317 -------- TURKEY -- 0.4% 602,883 Akbank TAS (Banks)................................ 3,154 -------- UNITED KINGDOM -- 24.8% -286 AstraZeneca PLC (Drugs)........................... 13,741 -445 Aviva PLC (Financial Services).................... 3,931 -2,632 BP PLC (Energy & Services)........................ 21,400 *-1,696 British Airways PLC (Transportation).............. 7,067 *-524 British Sky Broadcasting PLC (Media & Entertainment).................................. 6,599 -1,178 Capita Group PLC (Business Services).............. 5,145 -2,373 Compass Group PLC (Food, Beverage & Tobacco)...... 16,181 *9,516 Corus Group PLC (Metals, Minerals & Mining)....... 5,110 -604 GlaxoSmithKline PLC (Drugs)....................... 13,930 -318 HBOS PLC (Banks).................................. 4,127 -784 HSBC Holdings PLC (Banks)......................... 12,344 -1,701 Hilton Group PLC (Hotels & Gaming)................ 6,845 -330 Imperial Tobacco Group PLC (Food, Beverage & Tobacco)........................................ 6,503 -1,136 Kingfisher PLC (Retail)........................... 5,687 -1,304 National Grid Transco PLC (Energy & Services)..... 9,382 -648 Pearson PLC (Media & Entertainment)............... 7,216 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- -------- UNITED KINGDOM -- (CONTINUED) -420 Reckitt Benckiser PLC (Consumer Non-Durables)..... $ 9,497 -416 Rio Tinto PLC (Metals, Minerals & Mining)......... 11,455 -641 Royal Bank of Scotland Group PLC (Banks).......... 18,918 -10,248 Vodafone Group PLC (Communications)............... 25,463 -1,317 WWP Group PLC (Business Services)................. 12,927 -------- 223,468 -------- UNITED STATES OF AMERICA -- 2.0% *280 Accenture Ltd. (Business Services)................ 7,377 370 Tyco International Ltd. (Consumer Non-Durables)... 9,794 -------- 17,171 -------- Total common stocks............................... $881,572 ======== SHORT-TERM SECURITIES -- 11.8% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 10.0% 89,576 State Street Navigator Securities Lending Prime Portfolio....................................... $ 89,576 -------- <Caption> PRINCIPAL AMOUNT - --------- REPURCHASE AGREEMENT -- 1.8% $16,632 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... 16,632 -------- Total short-term securities....................... $106,208 ======== </Table> <Table> DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $738,995)............... 98.0% $881,572 Total short-term securities (cost $106,208)....... 11.8 106,208 ----- -------- Total investment in securities (total cost $845,203) -- including $85,210 of securities loaned (See Note 2(i)).......................... 109.8 987,780 Cash, receivables and other assets................ 2.7 24,654 Payable for securities purchased.................. (2.5) (22,294) Payable for Fund shares redeemed.................. (0.0) (405) Securities lending collateral payable to brokers (See Note 2(i))................................. (10.0) (89,576) Other liabilities................................. (0.0) (153) ----- -------- Net assets........................................ 100.0% $900,006 ===== ======== </Table> <Table> <Caption> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 2,625,000 shares authorized; 89,031 shares outstanding..................................... $ 89 Paid in capital................................... 1,113,599 Accumulated net investment income................. 1,085 Accumulated net realized loss on investments...... (357,332) Unrealized appreciation on investments............ 142,577 Unrealized appreciation on forward foreign currency contracts (See Note 2(g)) @@@.......... 22 Unrealized depreciation on other assets and liabilities in foreign currencies............... (34) ---------- Net assets........................................ $ 900,006 ========== </Table> The accompanying notes are an integral part of this financial statement. 105 HARTFORD INTERNATIONAL OPPORTUNITIES HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET VALUE # ------- Class IA Net asset value per share ($823,760 / 81,478 shares outstanding) (2,000,000 shares authorized)................................... $10.11 ====== Class IB Net asset value per share ($76,246 / 7,554 shares outstanding) (625,000 shares authorized)................................... $10.09 ====== </Table> <Table> DIVERSIFICATION BY INDUSTRY Agriculture & Fishing............................. 0.8% $ 7,218 Banks............................................. 14.6 131,316 Business Services................................. 3.8 34,640 Chemicals......................................... 2.2 19,523 Communications.................................... 11.2 100,689 Construction...................................... 4.9 43,813 Consumer Durables................................. 0.8 6,967 Consumer Non-Durables............................. 3.5 31,560 Consumer Services................................. 0.2 2,063 Drugs............................................. 7.8 70,203 Electrical Equipment.............................. 1.2 10,784 Electronics....................................... 4.1 36,725 Energy & Services................................. 10.5 94,876 Financial Services................................ 3.7 33,289 Food, Beverage & Tobacco.......................... 5.1 45,963 Hotels & Gaming................................... 1.4 12,235 Insurance......................................... 1.0 8,908 Machinery......................................... 0.5 4,690 Media & Entertainment............................. 2.4 21,616 Medical Instruments & Supplies.................... 0.6 5,150 Metals, Minerals & Mining......................... 4.7 42,334 Retail............................................ 4.4 39,644 Software & Services............................... 2.0 17,682 Transportation.................................... 5.6 50,168 Utilities......................................... 1.0 9,516 ---- -------- Total common stocks........................... 98.0% $881,572 ==== ======== </Table> <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 96.0% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). @ Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2003, the market value of these securities amounted to $5,456 or 0.6% of net assets (See Note 2(m)). - Security valued in good faith at fair value by, or under the direction of, the Funds' Board of Directors. The aggregate value of these securities as of December 31, 2003 was $710,543, which represents 78.9% of total net assets. </Table> @@@FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING AT DECEMBER 31, 2003 <Table> <Caption> UNREALIZED CONTRACT DELIVERY APPRECIATION DESCRIPTION MARKET VALUE AMOUNT DATE (DEPRECIATION) - ----------- ------------ -------- -------- -------------- British Pound (Buy) $ 749 $ 742 1/2/2004 $ 7 British Pound (Buy) 4,048 4,023 1/5/2004 25 Canadian Dollars (Buy) 298 297 1/6/2004 1 Canadian Dollars (Buy) 1,632 1,630 1/5/2004 2 Canadian Dollars (Buy) 4,643 4,585 1/2/2004 58 EURO (Buy) 1,818 1,811 1/5/2004 7 EURO (Buy) 3,556 3,540 1/6/2004 16 EURO (Sell) 245 241 1/2/2004 (4) EURO (Sell) 313 309 1/2/2004 (4) EURO (Sell) 352 348 1/2/2004 (4) EURO (Sell) 478 474 1/5/2004 (4) EURO (Sell) 684 677 1/2/2004 (7) EURO (Sell) 758 754 1/6/2004 (4) EURO (Sell) 9,438 9,339 1/2/2004 (99) Japanese Yen (Sell) 1,161 1,163 1/7/2004 2 South African Rands (Buy) 870 842 1/2/2004 28 Swiss Franc (Buy) 570 568 1/6/2004 2 ---- $ 22 ==== </Table> The accompanying notes are an integral part of this financial statement. 106 HARTFORD INTERNATIONAL SMALL COMPANY HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ------- COMMON STOCKS -- 96.3% AUSTRALIA -- 3.0% +123 AWB Ltd. (Agriculture & Fishing).................. $ 414 305 Adsteam Marine Ltd. (Transportation).............. 381 -108 Coca-Cola Amatil Ltd. (Food, Beverage & Tobacco)........................................ 508 -138 Mayne Group Ltd. (Health Services)................ 339 -136 STW Communications Group (Communications)......... 332 ------- 1,974 ------- CHINA -- 1.8% -1,388 Beijing Capital International Airport Co., Ltd. (Transportation)................................ 473 2,144 China Oilfield Services Ltd. (Energy & Services).. 759 ------- 1,232 ------- DENMARK -- 2.0% 28 Carlsberg (Food, Beverage & Tobacco).............. 1,312 ------- FINLAND -- 2.2% 22 Orion-Yhtymae OY (Drugs).......................... 479 -21 Pohjola Group PLC (Insurance)..................... 562 -15 TietoEnator Oyj (Software & Services)............. 398 ------- 1,439 ------- FRANCE -- 6.8% +-28 April Group (Financial Services).................. 495 10 Cegedim S.A. (Business Services).................. 565 +-176 Havas S.A. (Business Services).................... 1,022 -60 NRJ Group (Media & Entertainment)................. 1,277 37 Remy Cointreau S.A. (Food, Beverage & Tobacco).... 1,207 ------- 4,566 ------- GERMANY -- 3.2% +50 Aixtron AG (Electrical Equipment)................. 297 -30 Elmos Semiconductor AG (Electronics).............. 475 +23 Fielmann AG (Consumer Durables)................... 1,048 +29 Jenoptik AG (Electrical Equipment)................ 322 ------- 2,142 ------- GREECE -- 4.2% 126 Aktor S.A. Technical Co. (Machinery).............. 828 11 Germanos S.A. (Communications).................... 270 -25 Intralot S.A. (Software & Services)............... 478 -57 Piraeus Bank S.A. (Financial Services)............ 701 40 STET Hellas Telecommunications S.A., ADR (Communications)................................ 523 ------- 2,800 ------- ITALY -- 4.1% 12 Amplifon S.p.A. (Medical Instruments & Supplies).. 341 79 Banca Popolare di Milano SCRL (Banks)............. 519 -55 Brembo S.p.A. (Machinery)......................... 418 +-71 Caltagirone Editore S.p.A. (Media & Entertainment).................................. 618 20 Tod's S.p.A. (Retail)............................. 875 ------- 2,771 ------- </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ------- JAPAN -- 37.8% -176 77 Bank Ltd. (The) (Banks)........................ $ 1,000 +-39 Alpine Electronics, Inc. (Communications)......... 523 +-22 Asatsu-DK, Inc. (Business Services)............... 563 +-21 Avex, Inc. (Media & Entertainment)................ 386 -5 BellSystem24, Inc. (Business Services)............ 972 -23 C&S Co., Ltd. (Retail)............................ 424 -74 Chiba Bank Ltd. (The) (Banks)..................... 305 +-24 Coca-Cola West Japan Co., Ltd. (Food, Beverage & Tobacco)........................................ 467 -43 FamilyMart Co., Ltd. (Retail)..................... 983 8 Fujimi, Inc. (Chemicals).......................... 233 -35 Hitachi Medical Corp. (Medical Instruments & Supplies)....................................... 445 +9 Hokuto Corp. (Agriculture & Fishing).............. 111 -57 House Foods Corp. (Food, Beverage & Tobacco)...... 646 +-53 Ines Corp. (Software & Services).................. 482 -79 Japan Securities Finance Co., Ltd. (Financial Services)....................................... 416 -299 Joyo Bank Ltd. (The) (Financial Services)......... 982 23 Kadokawa Holdings, Inc. (Media & Entertainment)... 608 -43 Keihin Corp. (Transportation)..................... 395 +-60 Kirin Beverage Corp. (Food, Beverage & Tobacco)... 1,087 +-24 Kiyo Bank Ltd. (The) (Banks)...................... 41 -10 Kobayashi Pharmaceutical (Drugs).................. 243 -71 Komori Corp. (Machinery).......................... 1,058 -21 Kose Corp. (Consumer Non-Durables)................ 761 +-19 Milbon Co., Ltd. (Chemicals)...................... 517 -70 NEC System Intergration & Construction Ltd. (Communications)................................ 545 +-140 Nippon Shinyaku Co., Ltd. (Drugs)................. 811 +-108 Okumura (Construction)............................ 461 25 Otsuka Kago Ltd. (Retail)......................... 765 -120 PanaHome Corp. (Construction)..................... 637 182 Shiga Bank Ltd. (The) (Financial Services)........ 839 -242 Sumitomo Osaka Cement Co., Ltd. (Metals, Minerals & Mining)....................................... 477 -115 Suruga Bank Ltd. (The) (Banks).................... 741 120 Taiheiyo Cement Corp. (Construction).............. 339 +-26 Taiyo Ink Manufacturing Co., Ltd. (Chemicals)..... 933 -17 Takara Standard (Consumer Durables)............... 88 -96 Tanabe Seiyaku Co., Ltd. (Drugs).................. 781 4 The Aichi Bank Ltd. (Banks)....................... 231 -55 Tokyo Ohka Kogyo Co., Ltd. (Chemicals)............ 974 +-24 Tokyo Tomin Bank Ltd. (The) (Financial Services).. 417 31 Towa Pharmaceutical Co., Ltd. (Drugs)............. 686 +53 Tsuruha Co., Ltd. (Consumer Durables)............. 961 -7 United Arrows Ltd. (Retail)....................... 307 -26 Xebio Co., Ltd. (Retail).......................... 582 ------- 25,223 ------- MEXICO -- 1.5% 96 Grupo Financiero Banorte S.A. de C.V. (Financial Services)....................................... 334 256 Kimberly Clark de Mexico S.A. de C.V. (Foreign Governments).................................... 656 ------- 990 ------- </Table> The accompanying notes are an integral part of this financial statement. 107 HARTFORD INTERNATIONAL SMALL COMPANY HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ------- COMMON STOCKS -- (CONTINUED) NETHERLANDS -- 4.7% -34 CSM N.V. (Food, Beverage & Tobacco)............... $ 738 *+-72 Equant N.V. (Software & Services)................. 677 51 Koninklijke Vendex N.V. (Retail).................. 705 -20 Randstad Holdings N.V. (Business Services)........ 490 32 Wolters Kluwer N.V. (Forest & Paper Products)..... 505 ------- 3,115 ------- NEW ZEALAND -- 0.8% 158 Warehouse Group Ltd. (Consumer Services).......... 531 ------- PAPUA NEW GUINE -- 0.5% 426 Oil Search Ltd. (Metals, Minerals & Mining)....... 328 ------- SINGAPORE -- 3.1% 565 Keppel Land Ltd. (Real Estate).................... 526 1,073 MobileOne Ltd. (Communications)................... 948 488 SembCorp Logistics Ltd. (Transportation).......... 575 ------- 2,049 ------- SOUTH KOREA -- 3.6% *-2 Cheil Communications, Inc. (Business Services).... 273 *-67 Daegu Bank (Financial Services)................... 325 *-170 Korea Exchange Bank (Financial Services).......... 904 *-120 LG Telecom Ltd. (Communications).................. 365 *-97 Pusan Bank (Banks)................................ 540 ------- 2,407 ------- SPAIN -- 1.1% -136 Telefonica Publicidad e Informacion S.A. (Communications)................................ 745 ------- SWEDEN -- 2.4% 95 Eniro AB (Media & Entertainment).................. 909 -27 JM AB (Construction).............................. 393 -42 NCC AB (Construction)............................. 327 ------- 1,629 ------- SWITZERLAND -- 5.7% 14 Bachem Holding AG (Drugs)......................... 742 -16 Baloise Holding Ltd. (Insurance).................. 673 66 Clariant AG (Chemicals)........................... 971 1 Lindt & Spruengli AG (Food, Beverage & Tobacco)... 466 17 Lonza AG (Chemicals).............................. 985 ------- 3,837 ------- UNITED KINGDOM -- 7.8% 192 Aggreko PLC (Energy & Services)................... 530 *-67 Cambridge Antibody Technology Group PLC (Health Services)....................................... 562 -436 EMI Group PLC (Media & Entertainment)............. 1,241 164 Firstgroup PLC (Transportation)................... 801 -218 HMV Group PLC (Retail)............................ 649 148 Kesa Electricals PLC (Retail)..................... 682 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ------- UNITED KINGDOM -- (CONTINUED) 62 PHS Group PLC (Business Services)................. $ 93 394 Securicor PLC (Consumer Services)................. 672 ------- 5,230 ------- Total common stocks............................... $64,320 ======= SHORT-TERM SECURITIES -- 14.1% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 8.4% 5,652 State Street Navigator Securities Lending Prime Portfolio....................................... $ 5,652 ------- <Caption> PRINCIPAL AMOUNT - --------- REPURCHASE AGREEMENT -- 5.7% $3,789 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... 3,789 ------- Total short-term securities....................... $ 9,441 ======= </Table> <Table> DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $56,049)........... 96.3% $64,320 Total short-term securities (cost $9,441).... 14.1 9,441 ----- ------- Total investment in securities (total cost $65,490) -- including $5,371 of securities loaned (See Note 2(i))..................... 110.4 73,761 Cash, receivables and other assets........... 1.2 822 Payable for securities purchased............. (3.2) (2,112) Securities lending collateral payable to brokers (See Note 2(i)).................... (8.4) (5,652) Other liabilities............................ (0.0) (27) ----- ------- Net assets................................... 100.0% $66,792 ===== ======= </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 800,000 shares authorized; 5,302 shares outstanding........ $ 5 Paid in capital...................................... 57,243 Accumulated net investment income.................... 129 Accumulated net realized gain on investments......... 1,413 Unrealized appreciation on investments............... 8,271 Unrealized depreciation on forward foreign currency contracts (See Note 2(g)) @@@...................... (262) Unrealized depreciation on other assets and liabilities in foreign currencies.................. (7) ------- Net assets........................................... $66,792 ======= </Table> <Table> Class IA Net asset value per share ($44,088 / 3,495 shares outstanding) (600,000 shares authorized).......... $12.62 ====== Class IB Net asset value per share ($22,704 / 1,807 shares outstanding) (200,000 shares authorized).......... $12.56 ====== </Table> The accompanying notes are an integral part of this financial statement. 108 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET VALUE # ------- DIVERSIFICATION BY INDUSTRY Agriculture & Fishing......................... 0.8% $ 525 Banks......................................... 5.1 3,377 Business Services............................. 6.0 3,978 Chemicals..................................... 6.9 4,613 Communications................................ 6.4 4,251 Construction.................................. 3.2 2,157 Consumer Durables............................. 3.1 2,097 Consumer Non-Durables......................... 2.1 1,417 Consumer Services............................. 1.8 1,203 Drugs......................................... 5.6 3,742 Electrical Equipment.......................... 0.9 619 Electronics................................... 0.7 475 Energy & Services............................. 1.9 1,289 Financial Services............................ 8.1 5,413 Food, Beverage & Tobacco...................... 9.6 6,431 Forest & Paper Products....................... 0.8 505 Health Services............................... 1.3 901 Insurance..................................... 1.8 1,235 Machinery..................................... 3.4 2,304 Media & Entertainment......................... 7.5 5,039 Medical Instruments & Supplies................ 1.2 786 Metals, Minerals & Mining..................... 1.2 805 Real Estate................................... 0.8 526 Retail........................................ 9.0 5,972 Software & Services........................... 3.1 2,035 Transportation................................ 4.0 2,625 ---- ------- Total common stocks........................... 96.3% $64,320 ==== ======= </Table> <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 96.3% of total net assets as of December 31, 2003 # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities * Non-income producing during the period + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)) - Security valued in good faith at fair value by, or under the direction of, the Funds' Board of Directors. The aggregate value of these securities as of December 31, 2003 was $37,448, which represents 56.1% of total net assets. </Table> The accompanying notes are an integral part of this financial statement. 109 HARTFORD INTERNATIONAL SMALL COMPANY HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- @@@FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING AT DECEMBER 31, 2003 <Table> <Caption> UNREALIZED APPRECIATION DESCRIPTION MARKET VALUE CONTRACT DELIVERY (DEPRECIATION) - ----------- ------------ -------- -------- -------------- Australian Dollar (Buy).... $ 6 $ 6 01/2/04 $ -- Australian Dollar (Buy).... 16 16 01/6/04 -- Australian Dollar (Buy).... 56 56 01/5/04 -- Australian Dollar (Sell)... 1,257 1,229 12/31/04 (28) Australian Dollar (Sell)... 1,816 1,774 12/31/04 (42) British Pound (Buy)........ 67 66 01/5/04 1 British Pound (Buy)........ 79 78 01/2/04 1 British Pound (Sell)....... 1,867 1,847 12/31/04 (20) British Pound (Sell)....... 3,678 3,581 12/31/04 (97) Danish Krone (Buy)......... 37 37 01/5/04 -- EURO (Buy)................. -- -- 01/6/04 -- EURO (Buy)................. 35 34 01/6/04 1 EURO (Buy)................. 68 68 01/7/04 -- EURO (Buy)................. 140 139 01/2/04 1 EURO (Buy)................. 237 236 01/5/04 1 EURO (Sell)................ 26 26 01/5/04 -- EURO (Sell)................ 37 37 01/2/04 -- EURO (Sell)................ 1,870 1,840 12/31/04 (30) EURO (Sell)................ 3,174 3,120 12/31/04 (54) Hong Kong Dollar (Buy)..... 35 35 01/5/04 -- Japanese Yen (Buy)......... 7 7 01/6/04 -- Japanese Yen (Buy)......... 531 531 01/7/04 -- Japanese Yen (Sell)........ 218 219 01/5/04 1 New Zealand Dollar (Buy)... 15 15 01/6/04 -- Singapore Dollar (Buy)..... 121 120 01/5/04 1 Swedish Krona (Buy)........ 9 9 01/5/04 -- Swedish Krona (Buy)........ 37 36 01/7/04 1 Swiss Franc (Buy).......... 104 103 01/6/04 1 ----- $(262) ===== </Table> The accompanying notes are an integral part of this financial statement. 110 HARTFORD MIDCAP HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- COMMON STOCKS -- 99.5% APPAREL & TEXTILE -- 1.7% 630 Liz Claiborne, Inc. .............................. $ 22,336 *206 Mohawk Industries, Inc. .......................... 14,538 ---------- 36,874 ---------- BANKS -- 9.5% 533 Bank of Hawaii Corp. ............................. 22,510 197 City National Corp. .............................. 12,250 650 Countrywide Credit Industries, Inc. .............. 49,333 230 Golden West Financial Corp. ...................... 23,775 753 Hibernia Corp., Class A........................... 17,701 +578 Hudson City Bancorp, Inc. ........................ 22,079 157 M&T Bank Corp. ................................... 15,403 *1,626 Providian Financial Corp. ........................ 18,928 349 UnionBanCal Corp. ................................ 20,110 ---------- 202,089 ---------- BUSINESS SERVICES -- 4.1% 831 Equifax, Inc. .................................... 20,347 +679 Fluor Corp. ...................................... 26,896 *606 Lamar Advertising Co., Class A.................... 22,608 385 Manpower, Inc. ................................... 18,137 ---------- 87,988 ---------- CHEMICALS -- 1.5% 314 Avery Dennison Corp. ............................. 17,613 +339 Rohm & Haas Co. .................................. 14,468 ---------- 32,081 ---------- COMMUNICATIONS -- 3.2% *+2,256 American Tower Corp., Class A..................... 24,412 *982 Nextel Communications, Inc., Class A.............. 27,566 539 Rockwell Collins, Inc. ........................... 16,177 ---------- 68,155 ---------- COMPUTERS & OFFICE EQUIPMENT -- 3.3% +421 CDW Corp. ........................................ 24,334 429 Diebold, Inc. .................................... 23,099 *3,744 Solectron Corp. .................................. 22,129 ---------- 69,562 ---------- CONSTRUCTION -- 2.1% +278 Lennar Corp. ..................................... 26,673 -3,682 Rinker Group Ltd. ................................ 18,210 ---------- 44,883 ---------- CONSUMER DURABLES -- 2.6% 331 BorgWarner, Inc. ................................. 28,167 232 Johnson Controls, Inc. ........................... 26,963 ---------- 55,130 ---------- CONSUMER NON-DURABLES -- 3.4% 1,359 Mattel, Inc. ..................................... 26,190 537 McKesson Corp. ................................... 17,265 *+2,119 Xerox Corp. ...................................... 29,242 ---------- 72,697 ---------- </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- DRUGS -- 5.0% *+277 Cephalon, Inc. ................................... $ 13,428 *229 Gilead Sciences, Inc. ............................ 13,326 *1,046 IVAX Corp. ....................................... 24,976 *1,474 Millennium Pharmaceuticals, Inc. ................. 27,520 *+662 Vertex Pharmaceuticals, Inc. ..................... 6,773 *440 Watson Pharmaceuticals, Inc. ..................... 20,229 ---------- 106,252 ---------- EDUCATION -- 1.3% *+862 Education Management Corp. ....................... 26,750 ---------- ELECTRICAL EQUIPMENT -- 1.6% *182 KLA-Tencor Corp. ................................. 10,660 *711 Waters Corp. ..................................... 23,561 ---------- 34,221 ---------- ELECTRONICS -- 4.2% *+1,555 ASM Lithography Holding N.V., NY Reg Shares....... 31,172 *364 Altera Corp. ..................................... 8,265 903 American Power Conversion Corp. .................. 22,081 526 Analog Devices, Inc. ............................. 23,994 *86 International Rectifier Corp. .................... 4,229 ---------- 89,741 ---------- ENERGY & SERVICES -- 4.6% 672 EOG Resources, Inc. .............................. 31,008 686 GlobalSantaFe Corp. .............................. 17,038 *435 Nabors Industries Ltd. ........................... 18,072 +1,123 XTO Energy, Inc. ................................. 31,772 ---------- 97,890 ---------- FINANCIAL SERVICES -- 2.7% +312 Blackrock, Inc. .................................. 16,592 262 Federated Investors, Inc., Class B................ 7,695 *287 Investment Technology Group, Inc. ................ 4,643 364 Legg Mason, Inc. ................................. 28,116 ---------- 57,046 ---------- FOOD, BEVERAGE & TOBACCO -- 0.8% *527 Constellation Brands, Inc. ....................... 17,354 ---------- FOREST & PAPER PRODUCTS -- 2.3% 1,455 Abitibi-Consolidated, Inc. ....................... 11,800 *705 Pactiv Corp. ..................................... 16,859 *1,090 Smurfit-Stone Container Corp. .................... 20,243 ---------- 48,902 ---------- HEALTH SERVICES -- 3.2% *+883 Edwards Lifesciences Corp. ....................... 26,549 +1,182 Health Management Associates, Inc., Class A....... 28,375 *1,038 Human Genome Sciences, Inc. ...................... 13,750 ---------- 68,674 ---------- INSURANCE -- 5.7% +303 Ambac Financial Group, Inc. ...................... 21,048 +515 Brown & Brown, Inc. .............................. 16,797 +319 Everest Reinsurance Group Ltd. ................... 26,987 464 Gallagher (Arthur J.) & Co. ...................... 15,066 </Table> The accompanying notes are an integral part of this financial statement. 111 HARTFORD MIDCAP HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- COMMON STOCKS -- (CONTINUED) INSURANCE -- (CONTINUED) 451 IPC Holdings Ltd. ................................ $ 17,579 +51 White Mountains Insurance Group Ltd. ............. 23,227 ---------- 120,704 ---------- MACHINERY -- 2.4% 210 Eaton Corp. ...................................... 22,719 +491 Parker-Hannifin Corp. ............................ 29,232 ---------- 51,951 ---------- MEDIA & ENTERTAINMENT -- 1.0% 151 Scripps (E.W.) Co. (The), Class A................. 14,221 *+202 Univision Communications, Inc. ................... 8,029 ---------- 22,250 ---------- MEDICAL INSTRUMENTS & SUPPLIES -- 1.9% 660 Guidant Corp. .................................... 39,708 ---------- METALS, MINERALS & MINING -- 1.3% 591 Precision Castparts Corp. ........................ 26,833 ---------- REAL ESTATE INVESTMENT TRUST -- 1.8% *1,758 Host Marriott Corp. .............................. 21,657 445 iStar Financial, Inc. ............................ 17,307 ---------- 38,964 ---------- RESEARCH & TESTING FACILITIES -- 1.8% *721 Applera Corp. -- Celera Genomics Group............ 10,030 469 Moody's Corp. .................................... 28,422 ---------- 38,452 ---------- RETAIL -- 4.4% 982 Aramark Corp. .................................... 26,929 *333 Dollar Tree Stores, Inc. ......................... 10,019 654 Michaels Stores, Inc. ............................ 28,894 129 Nordstrom, Inc. .................................. 4,438 968 PetSmart, Inc. ................................... 23,043 ---------- 93,323 ---------- RUBBER & PLASTICS PRODUCTS -- 0.5% *180 Sealed Air Corp. ................................. 9,767 ---------- SOFTWARE & SERVICES -- 11.2% *300 Affiliated Computer Services, Inc., Class A....... 16,343 *520 Alliance Sata Systems Corp. ...................... 14,391 *818 Amdocs Ltd., ADR.................................. 18,389 *989 BEA Systems, Inc. ................................ 12,167 *1,491 BISYS Group, Inc. (The)........................... 22,180 *+417 CheckFree Corp. .................................. 11,527 *309 Choicepoint, Inc. ................................ 11,774 257 GTECH Holdings Corp. ............................. 12,719 *645 Intuit, Inc. ..................................... 34,116 *1,130 PeopleSoft, Inc. ................................. 25,762 *+732 Siebel Systems, Inc. ............................. 10,153 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- SOFTWARE & SERVICES -- (CONTINUED) *488 Symantec Corp. ................................... $ 16,895 *1,968 VeriSign, Inc. ................................... 32,082 ---------- 238,498 ---------- TRANSPORTATION -- 5.5% *+1,814 AMR Corp. ........................................ 23,491 274 CNF Transportation, Inc. ......................... 9,278 -991 Excel PLC......................................... 13,104 *+180 JetBlue Airways Corp. ............................ 4,778 455 Lear Corp. ....................................... 27,917 203 PACCAR, Inc. ..................................... 17,271 *+407 Ryanair Holdings PLC, ADR......................... 20,588 ---------- 116,427 ---------- UTILITIES -- 4.9% 662 Cinergy Corp. .................................... 25,689 *1,350 Citizens Communications Co. ...................... 16,771 639 Energy East Corp. (The)........................... 14,302 413 Pinnacle West Capital Corp. ...................... 16,532 304 Republic Services, Inc. .......................... 7,792 624 Wisconsin Energy Corp. ........................... 20,863 ---------- 101,949 ---------- Total common stocks............................... $2,115,115 ========== SHORT-TERM SECURITIES -- 7.5% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 6.9% 146,112 State Street Navigator Securities Lending Prime Portfolio....................................... $ 146,112 ---------- <Caption> PRINCIPAL AMOUNT - --------- REPURCHASE AGREEMENTS -- 0.6% $ 13,537 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... 13,537 ---------- Total short-term securities....................... $ 159,649 ========== </Table> <Table> DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $1,716,058)...... 99.5% $2,115,115 Total short-term securities (cost $159,649)................................ 7.5 159,649 ----- ---------- Total investment in securities (total cost $1,875,707) -- including $142,566 of securities loaned (See Note 2(i))........ 107.0 2,274,764 Cash, receivables and other assets......... 0.7 13,954 Payable for securities purchased........... (0.8) (16,172) Securities lending collateral payable to brokers (See Note 2(i)).................. (6.9) (146,112) Other liabilities.......................... (0.0) (114) ----- ---------- Net assets................................. 100.0% $2,126,320 ===== ========== </Table> The accompanying notes are an integral part of this financial statement. 112 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET VALUE # ---------- SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 2,400,000 shares authorized; 86,356 shares outstanding..................................... $ 86 Paid in capital................................... 1,862,864 Accumulated net investment income................. 255 Accumulated net realized loss on investments...... (135,942) Unrealized appreciation on investments............ 399,057 Unrealized depreciation on forward foreign currency contracts (See Note 2(g)) @@@.......... (37) Unrealized appreciation on other assets and liabilities in foreign currencies............... 37 ---------- Net assets........................................ $2,126,320 ========== </Table> <Table> Class IA Net asset value per share ($1,946,881 / 79,031 shares outstanding) (1,800,000 shares authorized)....................................... $24.63 ====== Class IB Net asset value per share ($179,439 / 7,325 shares outstanding) (600,000 shares authorized).......... $24.50 ====== </Table> <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 5.3% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). - Security valued in good faith at fair value by, or under the direction of, the Funds' Board of Directors. The aggregate value of these securities as of December 31, 2003 was $31,314, which represents 1.5% of total net assets. </Table> @@@FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING AT DECEMBER 31, 2003 <Table> <Caption> UNREALIZED CONTRACT DELIVERY APPRECIATION DESCRIPTION MARKET VALUE AMOUNT DATE (DEPRECIATION) - ----------- ------------ -------- -------- -------------- British Pound (Sell) $3,826 $3,789 01/02/04 $(37) ---- $(37) ==== </Table> The accompanying notes are an integral part of this financial statement. 113 HARTFORD MIDCAP VALUE HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- 100.0% APPAREL & TEXTILE -- 0.7% 141 V. F. Corp. ...................................... $ 6,114 -------- BANKS -- 8.7% 117 Bank of Hawaii Corp. ............................. 4,933 495 CIT Group, Inc. .................................. 17,806 225 Comerica, Inc. ................................... 12,602 198 FirstMerit Corp. ................................. 5,340 716 Hibernia Corp., Class A........................... 16,831 302 UnionBanCal Corp. ................................ 17,348 96 Webster Financial Corp. .......................... 4,421 -------- 79,281 -------- BUSINESS SERVICES -- 4.1% *1,270 BearingPoint, Inc. ............................... 12,818 *536 United Rentals, Inc. ............................. 10,318 *+1,641 UnitedGlobalCom, Inc., Class A.................... 13,918 -------- 37,054 -------- CHEMICALS -- 3.1% 1,883 IMC Global, Inc. ................................. 18,695 +467 Sensient Technologies Corp. ...................... 9,240 -------- 27,935 -------- CONSTRUCTION -- 2.7% 69 MDC Holdings, Inc. ............................... 4,476 -3,371 Rinker Group Ltd. ................................ 16,671 *+77 Toll Brothers, Inc. .............................. 3,042 -------- 24,189 -------- CONSUMER DURABLES -- 4.2% *931 Arrow Electronics, Inc. .......................... 21,539 165 BorgWarner, Inc. ................................. 14,045 +58 Hughes Supply, Inc. .............................. 2,883 -------- 38,467 -------- CONSUMER NON-DURABLES -- 5.5% 234 AmerisourceBergen Corp. .......................... 13,139 *402 Dean Foods Co. ................................... 13,202 *+476 The Yankee Candle Co., Inc. ...................... 13,009 *271 United Stationers, Inc. .......................... 11,077 -------- 50,427 -------- DRUGS -- 0.9% *+386 Biovail Corp. .................................... 8,293 -------- ELECTRICAL EQUIPMENT -- 0.5% *164 Teradyne, Inc. ................................... 4,176 -------- ELECTRONICS -- 6.1% 265 Ametek, Inc. ..................................... 12,789 *682 Fairchild Semiconductor International Corp., Class A............................................... 17,027 *294 Flextronics International Ltd. ................... 4,366 *+925 Vishay Intertechnology, Inc. ..................... 21,185 -------- 55,367 -------- </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- -------- ENERGY & SERVICES -- 8.3% *+480 Cal Dive International, Inc. ..................... $ 11,563 236 EOG Resources, Inc. .............................. 10,901 -358 IHC Caland N.V. .................................. 19,419 76 Petro-Canada...................................... 3,758 270 Unocal Corp. ..................................... 9,959 698 XTO Energy, Inc. ................................. 19,742 -------- 75,342 -------- EXCHANGE TRADED FUNDS -- 1.9% 168 Midcap SPDR Trust Series I........................ 17,737 -------- FINANCIAL SERVICES -- 1.4% 500 Converium Holding AG, ADR......................... 13,178 -------- FOOD, BEVERAGE & TOBACCO -- 3.9% +540 Bunge Ltd. ....................................... 17,770 *538 Constellation Brands, Inc. ....................... 17,730 -------- 35,500 -------- FOREST & PAPER PRODUCTS -- 3.9% *783 Pactiv Corp. ..................................... 18,721 *898 Smurfit-Stone Container Corp. .................... 16,681 -------- 35,402 -------- INSURANCE -- 12.5% 242 Ace Ltd. ......................................... 10,032 344 Ambac Financial Group, Inc. ...................... 23,877 *83 Anthem, Inc. ..................................... 6,255 52 Endurance Specialty............................... 1,748 41 Gallagher (Arthur J.) & Co. ...................... 1,316 *272 Health Net, Inc. ................................. 8,899 *170 Oxford Health Plans, Inc. ........................ 7,382 274 Radian Group, Inc. ............................... 13,358 +597 Reinsurance Group of America, Inc. ............... 23,062 211 RenaissanceRe Holdings Ltd. ...................... 10,354 192 St. Paul Cos., Inc. (The)......................... 7,617 -------- 113,900 -------- MACHINERY -- 4.7% *+1,327 Axcelis Technologies, Inc. ....................... 13,563 *199 FMC Technologies, Inc. ........................... 4,630 *49 Flowserve Corp. .................................. 1,025 26 Pentair, Inc. .................................... 1,165 545 Timken Co. (The).................................. 10,931 323 York International Corp. ......................... 11,897 -------- 43,211 -------- MEDIA & ENTERTAINMENT -- 1.4% *+1,083 Bally Total Fitness Holding Corp. ................ 7,582 *+243 Penn National Gaming, Inc. ....................... 5,606 -------- 13,188 -------- MEDICAL INSTRUMENTS & SUPPLIES -- 1.2% 232 DENTSPLY International, Inc. ..................... 10,466 -------- </Table> The accompanying notes are an integral part of this financial statement. 114 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- (CONTINUED) METALS, MINERALS & MINING -- 2.0% 537 Engelhard Corp. .................................. $ 16,077 86 Grupo IMSA S.A., ADR.............................. 1,713 *+6 International Steel Group, Inc. .................. 246 -------- 18,036 -------- REAL ESTATE INVESTMENT TRUST -- 1.4% 181 Prologis.......................................... 5,821 155 Rouse Co. (The)................................... 7,262 -------- 13,083 -------- RETAIL -- 5.2% *+86 CEC Entertaining, Inc. ........................... 4,080 922 Foot Locker, Inc. ................................ 21,626 *682 Office Depot, Inc. ............................... 11,391 397 Ross Stores, Inc. ................................ 10,495 -------- 47,592 -------- RUBBER & PLASTICS PRODUCTS -- 2.2% -303 Compagnie Generale des Etablissements Michelin, Class B......................................... 13,892 294 Cooper Tire & Rubber Co. ......................... 6,292 -------- 20,184 -------- SOFTWARE & SERVICES -- 0.8% *507 Unisys Corp. ..................................... 7,522 -------- TRANSPORTATION -- 5.2% 2,395 Bombardier, Inc. ................................. 10,136 427 CNF Transportation, Inc. ......................... 14,458 34 CP Ships Ltd. .................................... 712 328 CSX Corp. ........................................ 11,774 *+38 Continental Airlines, Inc., Class B............... 612 *+282 ExpressJet Holdings, Inc. ........................ 4,232 295 Werner Enterprises, Inc. ......................... 5,747 -------- 47,671 -------- UTILITIES -- 7.5% 108 AGL Resources, Inc. .............................. 3,128 293 Cinergy Corp. .................................... 11,383 395 PPL Corp. ........................................ 17,277 847 Republic Services, Inc. .......................... 21,701 579 TXU Corp. ........................................ 13,743 -------- 67,232 -------- Total common stocks............................... $910,547 ======== SHORT-TERM SECURITIES -- 11.4% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 6.6% 60,472 State Street Navigator Securities Lending Prime Portfolio....................................... $ 60,472 -------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - --------- -------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - --------- -------- REPURCHASE AGREEMENTS -- 4.8% $ 43,551 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... $ 43,551 -------- Total short-term securities....................... $104,023 ======== </Table> <Table> DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $751,818)........ 100.0% $ 910,547 Total short-term securities (cost $104,023)................................ 11.4 104,023 ----- ---------- Total investment in securities (total cost $855,841) -- including $58,794 of securities loaned (See Note 2(i))...................................... 111.4 1,014,570 Cash, receivables and other assets......... 0.5 4,064 Payable for securities purchased........... (3.4) (30,855) Payable for Fund shares redeemed........... (1.9) (17,151) Securities lending collateral payable to brokers (See Note 2(i))...................................... (6.6) (60,472) Other liabilities.......................... (0.0) (49) ----- ---------- Net assets................................. 100.0% $ 910,107 ===== ========== </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 1,200,000 shares authorized; 73,702 shares outstanding..................................... $ 74 Paid in capital................................... 737,058 Accumulated net investment income................. 899 Accumulated net realized gain on investments...... 13,350 Unrealized appreciation on investments............ 158,729 Unrealized appreciation on forward foreign currency contracts (See Note 2(g)) @@@......................................... 10 Unrealized depreciation on other assets and liabilities in foreign currencies............... (13) ---------- Net assets........................................ $ 910,107 ========== </Table> <Table> Class IA Net asset value per share ($592,014 / 47,876 shares outstanding) (800,000 shares authorized).......... $12.37 ====== Class IB Net asset value per share ($318,093 / 25,826 shares outstanding) (400,000 shares authorized).......... $12.32 ====== </Table> <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 11.0% of total net assets as of December 31, 2003 # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities * Non-income producing during the period + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)) - Security valued in good faith at fair value by, or under the direction of, the Funds' Board of Directors. The aggregate value of these securities as of December 31, 2003 was $49,982, which represents 5.5% of total net assets. </Table> The accompanying notes are an integral part of this financial statement. 115 HARTFORD MIDCAP VALUE HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- @@@FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING AT DECEMBER 31, 2003 <Table> <Caption> UNREALIZED CONTRACT DELIVERY APPRECIATION DESCRIPTION MARKET VALUE AMOUNT DATE (DEPRECIATION) - ----------- ------------ -------- ---------- -------------- Australian Dollar (Buy) $177 $175 01/02/2004 $ 2 Australian Dollar (Buy) 289 289 01/06/2004 -- Australian Dollar (Buy) 541 535 01/05/2004 6 EURO (Buy) 30 30 01/02/2004 -- EURO (Buy) 226 225 01/06/2004 1 EURO (Buy) 269 268 01/05/2004 1 --- $10 === </Table> The accompanying notes are an integral part of this financial statement. 116 HARTFORD MONEY MARKET HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - --------- ---------- COMMERCIAL PAPER -- 35.0% $ @50,000 Bradford & Bingley PLC 1.15% due 01/07/05.............................. $ 50,000 55,000 Cafco 1.08% due 02/18/04.............................. 54,921 36,500 Diageo Capital PLC 0.00% due 03/18/04.............................. 36,411 42,500 du Pont (E.I.) de Nemours & Co. 0.00% due 02/10/04.............................. 42,450 50,000 Household Finance Corp. 1.08% due 01/06/04.............................. 49,993 25,000 Nationwide Building Society 0.00% due 01/07/04.............................. 24,995 45,391 Old Line Funding Corp. 0.00% due 01/23/04.............................. 45,360 55,000 Preferred Receivable Funding 0.00% due 02/04/04.............................. 54,944 55,000 Province of Quebec 1.07% due 01/28/04.............................. 54,956 42,500 Sara Lee 1.15% due 02/06/04.............................. 42,451 55,000 Sheffield Receivable Corp. 0.00% due 01/26/04.............................. 54,958 50,000 Spintab 0.00% due 02/03/04.............................. 49,950 44,507 Svenska Handelsbanken 0.00% due 02/17/04.............................. 44,444 42,500 Toyota Motor Credit Corp. 1.06% due 01/22/04.............................. 42,474 ---------- 648,307 ---------- Total commercial paper............................ $ 648,307 ========== CORPORATE NOTES -- 58.7% $ 40,000 American Express Credit 1.261% due 12/27/04............................. $ 40,065 8,500 American Express Credit 1.274% due 12/16/04............................. 8,513 42,500 American General Finance 1.34% due 08/06/04.............................. 42,554 17,000 Bank One Corp. 1.45% due 02/20/04.............................. 17,007 25,000 Bear Stearns Co., Inc. 1.319% due 02/12/04............................. 25,004 8,500 Bear Stearns Co., Inc. 1.423% due 06/01/04............................. 8,510 8,500 Bear Stearns Co., Inc. 1.56% due 09/21/04.............................. 8,525 @25,000 Cargill, Inc. 1.16% due 01/14/04.............................. 25,000 43,000 Caterpillar, Inc. 1.323% due 08/02/04............................. 43,051 42,000 Citigroup Global 1.29% due 06/17/04.............................. 42,030 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - --------- ---------- $ 13,320 Diageo Capital PLC 6.625% due 06/24/04............................. $ 13,660 50,000 Federal Home Loan Bank 1.50% due 12/24/04.............................. 50,000 30,000 Federal Home Loan Mortgage Association 1.25% due 08/27/04.............................. 30,000 50,000 Federal Home Loan Mortgage Association 1.40% due 11/03/04.............................. 50,000 50,000 Federal National Mortgage Association 1.43% due 11/15/04.............................. 50,000 50,000 Fleet Financial Group 1.41% due 02/19/04.............................. 50,014 22,000 General Electric Capital Corp. 1.141% due 01/28/04............................. 22,001 39,000 General Electric Capital Corp. 6.875% due 09/15/04............................. 40,528 50,000 Goldman Sachs Group LP 1.11% due 10/25/04.............................. 50,000 @37,500 Honda Motor Corp. 1.12% due 10/22/04.............................. 37,500 51,000 IBM Corp. 1.295% due 09/27/04............................. 51,067 48,750 Key Bank N.A. 1.298% due 03/01/04............................. 48,763 34,230 Lehman Brother Holdings, Inc. 6.625% due 04/01/04............................. 34,681 20,000 Merrill Lynch & Co., Inc. 1.37% due 08/09/04.............................. 20,029 17,000 Merrill Lynch & Co., Inc. 1.42% due 06/11/04.............................. 17,023 55,000 Morgan (J.P.) Chase & Co. 1.285% due 02/05/04............................. 55,008 54,000 Morgan Stanley Group 1.33% due 03/19/04.............................. 54,023 @30,000 Nationwide Building Society 1.14% due 07/23/04.............................. 30,000 @50,000 Northern Rock PLC 1.15% due 01/16/04.............................. 50,000 42,000 Washington Mutual Bank 1.159% due 07/29/04............................. 41,997 30,000 Wells Fargo & Co. 1.103% due 01/14/04............................. 30,000 ---------- 1,086,553 ---------- Total corporate notes............................. $1,086,553 ========== SHORT-TERM SECURITIES -- 3.3% REPURCHASE AGREEMENTS -- 3.3% $ 61,338 Joint Repurchase Agreement (See Note 2(d)) 0.84% due 01/02/04.................................... $ 61,338 ---------- Total short-term securities....................... $ 61,338 ========== </Table> The accompanying notes are an integral part of this financial statement. 117 HARTFORD MONEY MARKET HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET VALUE # ---------- DIVERSIFICATION OF NET ASSETS: Total commercial paper (cost $648,307)............ 35.0% $ 648,307 Total corporate notes (cost $1,086,553)........... 58.7 1,086,553 Total repurchase agreements (cost $61,338)........ 3.3 61,338 ----- ---------- Total investment in securities (total cost $1,796,198)..................................... 97.0 1,796,198 Cash, receivables and other assets................ 3.0 55,266 Dividends payable................................. (0.0) (1,005) Other liabilities................................. (0.0) (90) ----- ---------- Net assets........................................ 100.0% $1,850,369 ===== ========== </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 7,000,000 shares authorized; 1,850,369 shares outstanding..................................... $ 1,850 Paid in capital................................... 1,848,519 ---------- Net assets........................................ $1,850,369 ========== </Table> <Table> Class IA Net asset value per share ($1,609,439 / 1,609,439 shares outstanding) (6,000,000 shares authorized)........................................ $1.00 ===== Class IB Net asset value per share ($240,930 / 240,930 shares outstanding) (1,000,000 shares authorized)......... $1.00 ===== </Table> <Table> # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. @ Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2003, the market value of these securities amounted to $192,500 or 10.4% of net assets. (See Note 2(m)). </Table> The accompanying notes are an integral part of this financial statement. 118 HARTFORD MORTGAGE SECURITIES HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- -------- COLLATERALIZED MORTGAGE OBLIGATIONSV -- 24.0% $ 5,000 Ameriquest Mortgage Securities, Inc., Series 2002-AR1, Class M1 (Aa2 Moodys) 1.851% due 09/25/32............................. $ 5,020 5,000 Ameriquest Mortgage Securities, Inc., Series 2003-AR3, Class M1 (A2 Moodys) 1.921% due 10/25/33............................. 5,037 5,000 Ameriquest Mortgage Securities, Inc., Series 2003-AR3, Class M1 (Aa2 Moodys) 3.191% due 10/25/33............................. 5,113 4,000 Amortizing Residential Collateral Trust, Series 2002-BC7, Class M5 (A S&P) 2.741% due 10/25/32............................. 4,025 5,000 Amortizing Residential Collateral Trust, Series 2002-BC7, Class M2 (AA S&P) 2.041% due 10/25/32............................. 5,031 500 Citicorp Mortgage Securities, Inc., Series 1998-8, Class A3 (AAA S&P) 6.75% due 09/25/28.............................. 499 3,000 Conseco Finance, Series 2001-C, Class M2 (A3 Moodys) 2.313% due 08/15/33............................. 2,870 @153 DLJ Mortgage Acceptance Corp., Series 1996-1, Class B1 (A S&P) 7.25% due 09/25/11.............................. 153 @51 DLJ Mortgage Acceptance Corp., Series 1996-1, Class B2 (BBB S&P) 7.25% due 09/25/11.............................. 51 1,435 Federal Home Loan Mortgage Association, Series 2302, Class NJ (AAA Moodys) 6.50% due 11/15/29.............................. 1,437 4,939 Federal Home Loan Mortgage Association, Series 2304, Class PG (AAA Moodys) 6.50% due 03/15/30.............................. 5,010 4,466 Federal Home Loan Mortgage Association, Series 2485, Class TY (AAA Moodys) 5.25% due 05/15/26.............................. 4,478 14,670 Federal Home Loan Mortgage Association, Series 2496, Class QM (AAA Moodys) 6.00% due 04/15/28.............................. 15,162 911 Federal National Mortgage Association, Series 2001-67, Class PC (AAA Moodys) 6.00% due 06/25/26.............................. 911 123 Federal National Mortgage Association, Series D, Class 2 (Aaa Moodys) 11.00 due 04/01/09.............................. 134 5,000 First Franklin Mortgage Loan Asset Backed Certificates, Series 2003-FF2, Class M2 (A2 Moodys) 2.769% due 07/25/33............................. 5,043 518 GE Capital Mortgage Services, Inc., Series 1999-16, Class A (AAA S&P) 6.50% due 07/25/14.............................. 517 828 Green Tree Financial Corp., Series 1995-9, Class A6 (Aaa Moodys) 7.30% due 01/15/26.............................. 881 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- -------- $ 10,000 Greenwich Capital Commercial Funding Corp., Series 2003-C2, Class A3 (Aaa Moodys) 4.533% due 07/15/10............................. $ 10,056 328 Housing Securities, Inc., Series 1993-E, Class E15 (Aaa Moodys) 10.00% due 09/25/08............................. 330 5,000 LB-UBS Commercial Mortgage Trust, Series 2003-C8, Class A4 (Aaa Moodys) 5.124% due 11/15/32............................. 5,094 @10,000 Lehman Brothers Floating Rate Commercial Mortgage Trust, Series 2003-LLFA, Class A2 (Aaa Moodys) 1.553% due 12/16/14............................. 10,000 @5,000 Lehman Brothers Floating Rate Commercial Mortgage Trust, Series 2003-LLFA, Class G (A3 Moodys) 2.313% due 12/16/14............................. 5,000 3,000 Master Asset Backed Securities Trust, Series 2003-OPT2, Class M1 (Aa2 Moodys) 1.891% due 05/25/33............................. 3,017 2,000 Master Asset Backed Securities Trust, Series 2003-OPT2, Class M2 (A2 Moodys) 2.941% due 05/25/33............................. 2,029 4,371 Master Asset Securitization Trust, Series 2002-6, Class 6A1 (Aaa Moodys) 6.50% due 10/25/32.............................. 4,553 2,051 Merrill Lynch Mortgage Investors, Inc., Series 2000-FF1, Class M2 (A S&P) 2.141% due 03/01/31............................. 2,058 4,000 Merrill Lynch Mortgage Investors, Inc., Series 2002-HE1, Class M1 (AA+ S&P) 2.241% due 05/25/32............................. 4,066 5,000 Merrill Lynch Mortgage Trust, Series 2003-KEY1, Class A4 (AAA S&P) 5.236% due 11/12/35............................. 5,130 5,000 Morgan Stanley ABS Capital I, Series 2002-NC6, Class M1 (Aa2 Moodys) 2.141% due 11/25/32............................. 5,067 10,000 Morgan Stanley Capital I, Series 2003-IQ6, Class A3 (Aaa Moodys) 4.74% due 12/15/41.............................. 10,000 5,000 Morgan Stanley Dean Witter Capital I, Series 2003-TOP9, Class A2 (Aaa Moodys) 4.74% due 11/13/36.............................. 5,009 533 Norwest Asset Securities Corp., Series 1999-22, Class A1 (AAA S&P) 6.50% due 09/25/14.............................. 541 186 PNC Mortgage Securities Corp., Series 1996-2, Class B1 (AAA Fitch) 6.60% due 02/25/11.............................. 186 62 PNC Mortgage Securities Corp., Series 1996-2, Class B2 (AAA Fitch) 6.60% due 02/25/11.............................. 62 99 PNC Mortgage Securities Corp., Series 1996-2, Class B3 (AA Fitch) 6.60% due 02/25/11.............................. 99 </Table> The accompanying notes are an integral part of this financial statement. 119 HARTFORD MORTGAGE SECURITIES HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- -------- COLLATERALIZED MORTGAGE OBLIGATIONSV -- (CONTINUED) $ 3,769 Prudential Home Mortgage Securities Co., Series 1994-8, Class A3 (Aaa Moodys) 6.75% due 03/25/24.............................. $ 3,765 5,000 Residential Asset Mortgage Products, Inc., Series 2001-RS3, Class AI5 (Aaa Moodys) 5.70% due 10/25/31.............................. 5,209 5,061 Residential Asset Securities Corp., Series 2002-KS1, Class AIIB (Aaa Moodys) 1.441% due 06/25/32............................. 5,066 6,168 Residential Asset Securities Corp., Series 2002-KS4, Class AIIB (Aaa Moodys) 1.391% due 07/25/32............................. 6,169 262 Residential Funding Mortgage Securities I, Inc., Series 1995-S18, Class M3 (AAA S&P) 7.00% due 11/25/10.............................. 261 84 Residential Funding Mortgage Securities I, Inc., Series 1996-S11, Class M3 (AAA S&P) 7.00% due 04/25/11.............................. 85 195 Residential Funding Mortgage Securities I, Inc., Series 1996-S19, Class M3 (AAA S&P) 7.50% due 09/25/11.............................. 195 210 Residential Funding Mortgage Securities I, Inc., Series 1996-S5, Class M3 (AAA S&P) 6.75% due 02/25/11.............................. 209 165 Residential Funding Mortgage Securities I, Inc., Series 1998-S22, Class A1 (AAA S&P) 6.50% due 09/25/13.............................. 165 599 Residential Funding Mortgage Securities I, Inc., Series 1999-S15, Class A2 (AAA S&P) 6.50% due 06/25/14.............................. 598 232 Residential Funding Mortgage Securities I, Inc., Series 1999-S22, Class A2 (AAA S&P) 7.00% due 10/25/14.............................. 232 1,699 Residential Funding Mortgage Securities I, Inc., Series 2001-S25, Class A1 (AAA S&P) 6.25% due 10/25/16.............................. 1,696 2,000 Soundview Home Equity Loan Trust, Series 2000-1, Class M1 (Aa2 Moodys) 8.64% due 05/25/30.............................. 2,079 5,000 Structured Asset Mortgage Investors, Inc., Series 2002-AR4, Class A2 (Aaa Moodys) 1.70% due 02/19/33.............................. 5,008 5,000 Structured Asset Securities Corp., Series 2003-BC2, Class M1 (AA S&P) 2.141% due 02/25/33............................. 5,069 @10,000 Wachovia Bank Commercial Mortgage Trust, Series 2003- WHL2, Class A3 (Aaa Moodys) 1.483% due 06/15/13............................. 9,997 @5,000 Wachovia Bank Commercial Mortgage Trust, Series 2003- WHL2, Class F (A Moodys) 2.213% due 06/15/13............................. 4,998 -------- 184,470 -------- Total collateralized mortgage obligations......... $184,470 ======== </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- -------- INTEREST ONLYV -- 2.4% $ @52,200 Banc of America Commercial Mortgage, Inc., Series 2002-2, Class XP (AAA S&P) 1.804% due 07/11/43............................. $ 4,334 @42,853 Bear Stearns Commercial Mortgage Securities, Inc., Series 2002-TOP8, Class X2 (AAA S&P) 2.126% due 08/15/38............................. 4,381 @62,600 CS First Boston Mortgage Securities Corp., Series 2003-CNP1, Class ASP (AAA S&P) 1.81% due 03/01/35.............................. 4,305 3,575 Federal Home Loan Mortgage Association, Series 2489, Class BI (AAA S&P) 6.00% due 01/15/26.............................. 9 3,599 Federal Home Loan Mortgage Association, Series 2492, Class ID (AAA S&P) 6.00% due 09/15/19.............................. 216 5,207 Federal Home Loan Mortgage Association, Series 2501, Class MI (AAA S&P) 5.50% due 09/15/15.............................. 372 4,191 Federal Home Loan Mortgage Association, Series 2503, Class UD (AAA S&P) 5.50% due 04/15/15.............................. 247 17,898 Federal Home Loan Mortgage Association, Series 2527, Class IW (AAA S&P) 6.00% due 12/15/28.............................. 1,084 @55,232 LB-UBS Commercial Mortgage Trust, Series 2003-C1, Class XCP (AAA S&P) 1.657% due 04/15/33............................. 3,433 -------- 18,381 -------- Total interest only............................... $ 18,381 ======== U.S. TREASURIES & FEDERAL AGENCIES -- 72.0% FEDERAL HOME LOAN MORTGAGE ASSOCIATION -- 22.8% $ 32,000 5.00% due 01/01/34................................ $ 31,580 119,601 5.50% due 03/01/33-07/01/33....................... 121,107 9,737 6.00% due 10/01/22-04/01/33....................... 10,079 10,560 7.00% due 10/01/26-11/01/32....................... 11,174 199 7.50% due 05/01/24-06/01/25....................... 214 309 8.00% due 02/01/13-10/01/24....................... 337 152 8.50% due 10/01/09-10/01/24....................... 166 34 9.00% due 10/01/06................................ 36 106 9.50% due 11/01/08................................ 107 261 10.00% due 09/01/05-11/01/20...................... 291 -------- 175,091 -------- </Table> The accompanying notes are an integral part of this financial statement. 120 - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- -------- U.S. TREASURIES & FEDERAL AGENCIES -- (CONTINUED) FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 40.9% $ 35,612 4.50% due 06/01/18-08/01/33....................... $ 34,814 112,901 5.00% due 01/01/18-01/01/34....................... 112,386 48,273 5.50% due 06/01/33-11/01/33....................... 48,926 64,902 6.00% due 10/01/23-07/01/33....................... 67,146 31,495 6.50% due 04/01/28-08/01/32....................... 32,957 15,518 7.00% due 06/01/11-02/01/32....................... 16,530 1,622 8.00% due 10/01/29-02/01/31....................... 1,754 80 9.00% due 05/01/21-09/01/21....................... 90 -------- 314,603 -------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 7.5% 21,163 6.00% due 01/15/33-02/15/33....................... 22,011 18,274 6.50% due 12/15/28-01/15/32....................... 19,274 10,579 7.00% due 10/15/32................................ 11,274 3,306 7.50% due 04/15/22-04/20/30....................... 3,551 1,017 8.50% due 06/15/17-04/15/30....................... 1,109 507 9.50% due 10/15/09-11/15/09....................... 560 46 10.00% due 05/15/13............................... 52 8 12.50% due 03/15/15............................... 10 -------- 57,841 -------- U.S. TREASURY NOTES -- 0.8% 5,600 2.625% due 11/15/06............................... 5,649 -------- Total U.S. treasuries & federal agencies.......... $553,184 ======== SHORT-TERM SECURITIES -- 3.6% REPURCHASE AGREEMENTS -- 3.6% $ 27,539 Joint Repurchase Agreement (See Note 2(d)) 0.84% due 01/02/04.................................... $ 27,539 -------- Total short-term securities....................... $ 27,539 ======== </Table> <Table> DIVERSIFICATION OF NET ASSETS: Total collaterized mortgage obligations (cost $183,411)........................... 24.0% $184,470 Total interest only (cost $26,718).......... 2.4 18,381 Total U.S. treasuries & federal agencies (cost $551,701)........................... 72.0 553,184 Total short-term securities (cost $27,539).................................. 3.6 27,539 ----- -------- Total investment in securities (total cost $789,369)................................. 101.9 783,574 Cash, receivables and other assets.......... 4.6 35,544 Payable for securities purchased............ (6.3) (48,429) Payable for Fund shares redeemed............ (0.2) (1,730) Other liabilities........................... (0.0) (144) ----- -------- Net assets.................................. 100.0% $768,815 ===== ======== </Table> <Table> <Caption> MARKET VALUE # -------- SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 1,200,000 shares authorized; 65,047 shares outstanding..................... $ 65 Paid in capital............................................. 740,195 Accumulated net investment income........................... 34,310 Accumulated net realized gain on investments................ 40 Unrealized depreciation on investments...................... (5,795) -------- Net assets.................................................. $768,815 ======== </Table> <Table> Class IA Net asset value per share ($587,833 / 49,643 shares outstanding) (900,000 shares authorized)................................... $11.84 ====== Class IB Net asset value per share ($180,982 / 15,404 shares outstanding) (300,000 shares authorized)................................... $11.75 ====== </Table> <Table> # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. @ Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2003, the market value of these securities amounted to $46,652 or 6.1% of net assets (See Note 2(m)). V The bond ratings are unaudited. </Table> The accompanying notes are an integral part of this financial statement. 121 HARTFORD SMALL COMPANY HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- COMMON STOCKS -- 97.7% APPAREL & TEXTILE -- 0.9% 389 K-Swiss, Inc. .................................... $ 9,353 BANKS -- 1.6% 349 Amcore Financial, Inc. ........................... 9,439 455 First Niagara Financial Group, Inc. .............. 6,786 ---------- 16,225 ---------- BUSINESS SERVICES -- 5.3% *1,131 DiamondCluster International, Inc. ............... 11,533 315 Gevity HR, Inc. .................................. 6,999 *+367 LECG Corp. ....................................... 8,398 *771 MPS Group, Inc. .................................. 7,212 *573 Navigant Consulting, Inc. ........................ 10,797 *574 Overland Storage, Inc. ........................... 10,783 ---------- 55,722 ---------- COMMUNICATIONS -- 8.7% *2,105 American Tower Corp., Class A..................... 22,780 *2,180 Crown Castle International Corp. ................. 24,047 *450 Plantronics, Inc. ................................ 14,696 *404 Polycom, Inc. .................................... 7,890 *+6,825 Sirius Satellite Radio, Inc. ..................... 21,567 ---------- 90,980 ---------- COMPUTERS & OFFICE EQUIPMENT -- 2.4% *566 Insight Enterprises, Inc. ........................ 10,648 *863 Scientific Games Corp., Class A................... 14,684 ---------- 25,332 ---------- CONSTRUCTION -- 2.8% 282 MDC Holdings, Inc. ............................... 18,171 *323 Washington Group International, Inc. ............. 10,983 ---------- 29,154 ---------- CONSUMER DURABLES -- 0.9% *509 Genesis Microchip, Inc. .......................... 9,191 ---------- DRUGS -- 4.8% *607 Abgenix, Inc. .................................... 7,562 *995 Alkermes, Inc. ................................... 13,432 *408 AtheroGenics, Inc. ............................... 6,101 *438 Medicines Co. (The)............................... 12,898 *+334 NPS Pharmaceuticals, Inc. ........................ 10,276 ---------- 50,269 ---------- EDUCATION -- 1.5% *221 University of Phoenix Online...................... 15,247 ---------- ELECTRICAL EQUIPMENT -- 1.5% -5,734 Techtronic Industries Co. ........................ 15,995 ---------- ELECTRONICS -- 13.4% *772 ASE Test Ltd. .................................... 11,555 *1,005 Aeroflex, Inc. ................................... 11,752 *359 Artisan Components, Inc. ......................... 7,361 *1,397 ChipPAC, Inc. .................................... 10,605 *+447 FuelCell Energy, Inc. ............................ 5,805 *1,525 MEMC Electronic Materials, Inc. .................. 14,668 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- ELECTRONICS -- (CONTINUED) *341 Microsemi Corp. .................................. $ 8,372 *265 Moog, Inc. ....................................... 13,096 *2,413 ON Semiconductor Corp. ........................... 15,565 *396 Pericom Semiconductor Corp. ...................... 4,217 *788 Pixelworks, Inc. ................................. 8,700 *695 Quantum Fuel Systems Technologies Worldwide, Inc. ........................................... 5,591 *325 Semtech Corp. .................................... 7,392 *345 Wilson Greatbatch Technologies, Inc. ............. 14,584 ---------- 139,263 ---------- ENERGY & SERVICES -- 5.0% 550 Arch Coal, Inc. .................................. 17,134 329 Cabot Oil & Gas Corp. ............................ 9,651 278 Patina Oil & Gas Corp. ........................... 13,596 *78 Universal Tech.................................... 2,331 *494 Whiting Petroleum Corp. .......................... 9,092 ---------- 51,804 ---------- FINANCIAL SERVICES -- 1.3% *188 Affiliated Managers Group, Inc. .................. 13,068 ---------- FOOD, BEVERAGE & TOBACCO -- 0.7% *401 Peet's Coffee & Tea, Inc. ........................ 6,983 ---------- FOREST & PAPER PRODUCTS -- 1.1% *1,252 SunOpta, Inc. .................................... 11,557 ---------- HEALTH SERVICES -- 4.3% *218 AmSurg Corp. ..................................... 8,264 *2,245 Beverly Enterprises, Inc. ........................ 19,289 *298 Genesis Healthcare Corp. ......................... 6,784 *345 Odyssey HealthCare, Inc. ......................... 10,109 ---------- 44,446 ---------- HOTELS & GAMING -- 1.0% *+362 Wynn Resorts Ltd. ................................ 10,134 ---------- INSURANCE -- 5.7% *330 Arch Capital Group Ltd. .......................... 13,164 *979 HealthExtras, Inc. ............................... 13,122 343 Platinum Underwriters Holdings Ltd. .............. 10,286 *281 ProAssurance Corp. ............................... 9,048 *1090 USI Holdings Corp. ............................... 14,219 ---------- 59,839 ---------- MACHINERY -- 1.1% *675 Asyst Technologies, Inc. ......................... 11,712 ---------- MEDIA & ENTERTAINMENT -- 3.7% *610 Cumulus Media, Inc. .............................. 13,416 *1,169 Hollywood Entertainment Corp. .................... 16,075 *358 Lin TV Corp. ..................................... 9,227 ---------- 38,718 ---------- MEDICAL INSTRUMENTS & SUPPLIES -- 4.8% *411 Abaxis, Inc. ..................................... 7,441 *552 Merit Medical Systems, Inc. ...................... 12,280 *293 Orthofix International N.V. ...................... 14,357 </Table> The accompanying notes are an integral part of this financial statement. 122 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- COMMON STOCKS -- (CONTINUED) MEDICAL INSTRUMENTS & SUPPLIES -- (CONTINUED) *+207 Respironics, Inc. ................................ $ 9,320 *193 Zoll Medical Corp. ............................... 6,831 ---------- 50,229 ---------- RESEARCH & TESTING FACILITIES -- 2.0% *+245 CV Therapeutics, Inc. ............................ 3,588 *412 Ciphergen Biosystems, Inc. ....................... 4,630 *629 Exelixis, Inc. ................................... 4,453 *269 Kosan Biosciences, Inc. .......................... 2,655 *226 Telik, Inc. ...................................... 5,191 ---------- 20,517 ---------- RETAIL -- 4.2% *422 AC Moore Arts & Crafts, Inc. ..................... 8,124 *209 Dick's Sporting Goods, Inc. ...................... 10,178 266 Fred's, Inc. ..................................... 8,249 *318 Rare Hospitality International, Inc. ............. 7,767 *+304 Sharper Image Corp. .............................. 9,939 ---------- 44,257 ---------- SOFTWARE & SERVICES -- 10.9% *726 Agile Software Corp. ............................. 7,187 *902 BISYS Group, Inc. (The)........................... 13,416 *237 Cognos, Inc. ..................................... 7,263 *605 Embarcadero Technologies, Inc. ................... 9,654 *696 Networks Associates, Inc. ........................ 10,475 *1,186 Red Hat, Inc. .................................... 22,263 *315 Safenet, Inc. .................................... 9,703 *1,798 Sapient Corp. .................................... 10,067 *794 SkillSoft PLC, ADR................................ 6,871 *1,186 Tumbleweed Communications Corp. .................. 9,938 *766 webMethods, Inc. ................................. 7,007 ---------- 113,844 ---------- TRANSPORTATION -- 8.1% *+1,093 AMR Corp. ........................................ 14,156 310 Arkansas Best Corp. .............................. 9,724 *421 Forward Air Corp. ................................ 11,575 *344 OMI Corp. ........................................ 3,074 *308 Old Dominion Freight Line......................... 10,486 *325 Quality Distribution, Inc. ....................... 6,354 *422 Sirva, Inc. ...................................... 8,243 *+552 Yellow Roadway Corp. ............................. 19,970 ---------- 83,582 ---------- Total common stocks............................... $1,017,421 ========== SHORT-TERM SECURITIES -- 11.0% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 7.3% 76,071 Boston Global Investment Trust.................... $ 76,071 ---------- <Caption> PRINCIPAL MARKET AMOUNT VALUE # - --------- ---------- REPURCHASE AGREEMENTS -- 3.7% $ 38,584 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... $ 38,584 ---------- Total short-term securities....................... $ 114,655 ========== </Table> <Table> DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $847,542)........ 97.7% $1,017,421 Total short-term securities (cost $114,655)................................ 11.0 114,655 ----- ---------- Total investment in securities (total cost $962,197) -- including $73,502 of securities loaned (See Note 2(i))........ 108.7 1,132,076 Cash, receivables and other assets......... 0.9 8,885 Payable for securities purchased........... (0.6) (5,793) Payable for Fund shares redeemed........... (1.7) (17,300) Securities lending collateral payable to brokers (See Note 2(i)).................. (7.3) (76,071) Other liabilities.......................... (0.0) (58) ----- ---------- Net assets................................. 100.0% $1,041,739 ===== ========== </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 1,500,000 shares authorized; 72,036 shares outstanding..................................... $ 72 Paid in capital................................... 1,145,393 Accumulated net investment loss................... (1) Accumulated net realized loss on investments...... (273,604) Unrealized appreciation on investments............ 169,879 ---------- Net assets........................................ $1,041,739 ========== </Table> <Table> Class IA Net asset value per share ($851,283 / 58,765 shares outstanding) (1,125,000 shares authorized)........ $14.49 ====== Class IB Net asset value per share ($190,456 / 13,272 shares outstanding) (375,000 shares authorized).......... $14.35 ====== </Table> <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 5.8% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). - Security valued in good faith at fair value by, or under the direction of, the Funds' Board of Directors. The aggregate value of these securities as of December 31, 2003 was $15,995, which represents 1.5% of total net assets. </Table> The accompanying notes are an integral part of this financial statement. 123 HARTFORD SMALLCAP GROWTH HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- 96.8% APPAREL & TEXTILE -- 1.0% 110 Albany International Corp. ....................... $ 1,848 *115 Steven Madden Ltd. ............................... 2,344 -------- 4,192 -------- BANKS -- 4.4% +177 American Capital Strategies Ltd. ................. 5,262 80 Downey Financial Corp. ........................... 1,972 76 First Bancorp Puerto Rico......................... 1,487 74 Hancock Holding Co. .............................. 1,997 98 Hanmi Financial Corp. ............................ 959 176 Indymac Bancorp, Inc. ............................ 2,607 156 Irwin Financial Corp. ............................ 2,437 10 Old Second Bancorp, Inc. ......................... 243 46 Peoples Bancorp, Inc. ............................ 686 54 State Financial Services Corp. ................... 722 -------- 18,372 -------- BUSINESS SERVICES -- 6.3% 230 Advo, Inc. ....................................... 3,654 *69 Maximus, Inc. .................................... 2,680 *26 PDI, Inc. ........................................ 684 *167 PRG-Schultz International, Inc. .................. 818 *+234 Pegasystems, Inc. ................................ 2,017 *236 Per-Se Technologies, Inc. ........................ 3,603 *39 Resources Connection, Inc. ....................... 1,068 *184 Right Management Consultants...................... 3,424 *660 UnitedGlobalCom, Inc., Class A.................... 5,593 *119 Watson Wyatt & Co. Holdings....................... 2,871 -------- 26,412 -------- CHEMICALS -- 0.8% 54 Minerals Technologies, Inc. ...................... 1,588 162 Sensient Technologies Corp. ...................... 1,597 -------- 3,185 -------- COMMUNICATIONS -- 8.2% *68 Advanced Fibre Communications, Inc. .............. 1,368 *113 Boston Communications Group....................... 1,050 *289 Checkpoint Systems, Inc. ......................... 5,471 *40 Comtech Telecommunications........................ 1,140 *800 Digital Generation Systems........................ 1,792 *302 General Communication............................. 2,629 *417 McDATA Corp., Class A............................. 3,969 *474 PTEK Holdings, Inc. .............................. 4,176 *53 Plantronics, Inc. ................................ 1,724 *369 Primus Telecommunications Group, Inc. ............ 3,760 *+358 Talk America Holdings, Inc. ...................... 4,118 *217 Tekelec........................................... 3,368 -------- 34,565 -------- COMPUTERS & OFFICE EQUIPMENT -- 2.8% 136 Black Box Corp. .................................. 3,147 *70 Emulex Corp. ..................................... 1,854 *449 Rainbow Technologies, Inc. ....................... 5,059 *100 Sierra Wireless, Inc. ............................ 1,538 -------- 11,598 -------- </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- -------- CONSTRUCTION -- 1.0% 4 Granite Construction, Inc. ....................... $ 52 *127 Washington Group International, Inc. ............. 4,307 -------- 4,359 -------- CONSUMER DURABLES -- 0.6% *94 Genesis Microchip, Inc. .......................... 1,694 *34 Select Comfort Corp. ............................. 829 -------- 2,523 -------- CONSUMER NON-DURABLES -- 2.3% +148 Callaway Golf Co. ................................ 2,489 +265 Nautilus Group, Inc. ............................. 3,727 424 Nu Skin Enterprises, Inc. ........................ 3,626 -------- 9,842 -------- CONSUMER SERVICES -- 0.5% *+109 Coinstar, Inc. ................................... 1,970 -------- DRUGS -- 5.6% *359 Abgenix, Inc. .................................... 4,471 158 Alpharma, Inc., Class A........................... 1,592 192 Diagnostic Products Corp. ........................ 4,417 *127 Kos Pharmaceuticals, Inc. ........................ 5,483 *112 NPS Pharmaceuticals, Inc. ........................ 3,434 328 Perrigo Co. ...................................... 2,584 *142 Vertex Pharmaceuticals, Inc. ..................... 1,454 -------- 23,435 -------- EDUCATION -- 0.8% *68 ITT Educational Services, Inc. ................... 3,185 -------- ELECTRICAL EQUIPMENT -- 1.5% *153 Flir Systems, Inc. ............................... 5,566 88 MTS Systems Corp. ................................ 846 -------- 6,412 -------- ELECTRONICS -- 7.5% 60 Ametek, Inc. ..................................... 1,467 *68 Benchmark Electronics, Inc. ...................... 2,350 102 CTS Corp. ........................................ 591 *+131 Conexant Systems, Inc. ........................... 651 *38 Dupont Photomasks, Inc. .......................... 908 *166 ESS Technology.................................... 2,817 *97 Exar Corp. ....................................... 1,652 *65 Fairchild Semiconductor International Corp., Class A............................................... 1,621 *127 Hutchinson Technology, Inc. ...................... 3,898 236 Methode Electronics, Inc. ........................ 1,448 *50 Moog, Inc. ....................................... 2,465 *438 ON Semiconductor Corp. ........................... 2,824 *177 Photronics, Inc. ................................. 3,532 *441 RF Micro Devices, Inc. ........................... 4,427 *25 Silicon Laboratories, Inc. ....................... 1,076 -------- 31,727 -------- ENERGY & SERVICES -- 2.7% 210 Cabot Oil & Gas Corp. ............................ 3,067 464 Chesapeake Energy Corp. .......................... 3,151 </Table> The accompanying notes are an integral part of this financial statement. 124 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- (CONTINUED) ENERGY & SERVICES -- (CONTINUED) *75 Forest Oil Corp. ................................. $ 2,128 126 Patina Oil & Gas Corp. ........................... 3,077 -------- 11,423 -------- FINANCIAL SERVICES -- 1.1% *69 Affiliated Managers Group, Inc. .................. 4,795 -------- FOREST & PAPER PRODUCTS -- 1.8% 132 Glatfelter........................................ 822 720 Longview Fibre Co. ............................... 4,446 70 Schweitzer-Mauduit International, Inc. ........... 1,036 168 Wausau-Mosinee Paper Corp. ....................... 1,136 -------- 7,440 -------- HEALTH SERVICES -- 0.7% *65 Apria Healthcare Group, Inc. ..................... 1,836 *34 LifePoint Hospitals, Inc. ........................ 1,007 -------- 2,843 -------- HOTELS & GAMING -- 0.6% *103 Aztar Corp. ...................................... 2,324 -------- INSURANCE -- 5.3% *80 American Medical Security Group, Inc. ............ 1,794 *61 Amerigroup Corp. ................................. 2,597 *124 Clark, Inc. ...................................... 2,378 86 Landamerica Financial Group, Inc. ................ 2,226 256 Reinsurance Group of America, Inc. ............... 4,928 808 Scottish Annuity & Life Holdings Ltd. ............ 8,401 -------- 22,324 -------- MACHINERY -- 1.2% 192 Graco, Inc. ...................................... 3,838 70 York International Corp. ......................... 1,295 -------- 5,133 -------- MEDIA & ENTERTAINMENT -- 1.2% *53 Argosy Gaming Co. ................................ 1,377 *30 Beasley Broadcast Group, Inc., ADR................ 498 *219 Hollywood Entertainment Corp. .................... 3,007 -------- 4,882 -------- MEDICAL INSTRUMENTS & SUPPLIES -- 7.1% *108 Advanced Medical Optics, Inc. .................... 2,124 *80 Armor Holdings, Inc. ............................. 2,113 *372 Cytyc Corp. ...................................... 5,124 *48 Haemonetics Corp. ................................ 1,142 64 Invacare Corp. ................................... 1,288 *115 Invision Technologies, Inc. ...................... 3,874 80 Owens & Minor, Inc. .............................. 876 442 PolyMedica Corp. ................................. 5,815 *120 Respironics, Inc. ................................ 5,420 *17 Ventana Medical Systems........................... 650 *63 Viasys Healthcare, Inc. .......................... 1,288 -------- 29,714 -------- </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- -------- METALS, MINERALS & MINING -- 1.3% 248 Precision Castparts Corp. ........................ $ 5,617 -------- REAL ESTATE INVESTMENT TRUST -- 0.6% 122 American Home Mortgage Investment Corp. .......... 1,378 50 PS Business Parks, Inc. .......................... 1,040 -------- 2,418 -------- RESEARCH & TESTING FACILITIES -- 7.3% *38 Advisory Board Co. (The).......................... 1,341 *248 Applera Corp. -- Celera Genomics Group............ 3,451 *+253 CV Therapeutics, Inc. ............................ 3,715 *313 Ciphergen Biosystems, Inc. ....................... 3,519 *278 Exelixis, Inc. ................................... 1,970 *489 Gene Logic, Inc. ................................. 2,538 *550 Incyte Genomics, Inc. ............................ 3,763 *175 Kosan Biosciences, Inc. .......................... 1,726 *136 Pharmacopeia, Inc. ............................... 1,930 *243 Regeneron Pharmaceuticals, Inc. .................. 3,570 *+162 Trimeris, Inc. ................................... 3,399 -------- 30,922 -------- RETAIL -- 5.9% *48 AFC Enterprises................................... 934 176 Action Performance Cos., Inc. .................... 1,715 *138 Aeropostale, Inc. ................................ 3,770 *43 Bebe Stores, Inc. ................................ 1,115 *51 CEC Entertaining, Inc. ........................... 2,412 *69 GameStop Corp. ................................... 1,062 *55 Guitar Center, Inc. .............................. 1,792 *122 Hot Topic, Inc. .................................. 3,602 *61 PETCO Animal Supplies, Inc. ...................... 1,857 *309 Pacific Sunwear of California, Inc. .............. 6,521 -------- 24,780 -------- SOFTWARE & SERVICES -- 16.6% *271 Activision, Inc. ................................. 4,924 *320 Actuate Corp. .................................... 995 *149 Acxiom Corp. ..................................... 2,767 *100 Aladdin Knowledge Systems......................... 893 *65 Anteon International Corp. ....................... 2,325 *30 Bankrate, Inc. ................................... 375 *35 CACI International, Inc. ......................... 1,682 *166 CSG Systems International, Inc. .................. 2,071 *150 CyberGuard Corp. ................................. 1,311 *342 Dendrite International, Inc. ..................... 5,365 *173 Digital Insight Corp. ............................ 4,308 *156 Electronics for Imaging, Inc. .................... 4,057 *68 Filenet Corp. .................................... 1,850 *+40 FindWhat.com...................................... 750 *389 Gartner Group, Inc., Class A...................... 4,400 *212 Hypercom Corp. ................................... 1,008 *+117 Hyperion Solutions Corp. ......................... 3,529 *2192 i2 Technologies, Inc. ............................ 3,638 *120 Kronos, Inc. ..................................... 4,747 *794 LookSmart Ltd. ................................... 1,231 *72 Manhattan Associates, Inc. ....................... 1,979 *65 Mentor Graphics Corp. ............................ 942 *362 Radiant Systems, Inc. ............................ 3,041 </Table> The accompanying notes are an integral part of this financial statement. 125 HARTFORD SMALLCAP GROWTH HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- (CONTINUED) SOFTWARE & SERVICES -- (CONTINUED) *101 Transaction Systems Architects, Inc. ............. $ 2,288 *560 Trizetto Group.................................... 3,609 *135 VitalWorks, Inc. ................................. 597 *289 WebEx Communications, Inc. ....................... 5,813 -------- 70,495 -------- UTILITIES -- 0.1% 40 Cleco Corp. ...................................... 719 -------- Total common stocks............................... $407,606 ======== SHORT-TERM SECURITIES -- 17.0% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 5.7% 12,088 Evergreen Institutional Money Market Fund......... $ 12,088 11,977 Evergreen Prime Cash Management Money Market Fund............................................ 11,977 -------- 24,065 -------- <Caption> PRINCIPAL AMOUNT - --------- REPURCHASE AGREEMENTS -- 11.0% $46,355 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... 46,355 -------- 1,000 U.S. TREASURY BILLS -- 0.3% 0.885% due 01/08/04... 1,000 -------- Total short-term securities....................... $ 71,420 ======== </Table> <Table> DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $353,894)......... 96.8% $407,606 Total short-term securities (cost $71,420).................................. 17.0 71,420 ----- -------- Total investment in securities (total cost $425,314) -- including $24,218 of securities loaned (See Note 2(i))......... 113.8 479,026 Cash, receivables and other assets -- including $1,650 of cash held as collateral on Loaned Securities (See Note 2(i))..................................... 0.6 2,712 Payable for securities purchased............ (4.0) (17,223) Payable for Fund shares redeemed............ (4.2) (17,577) Securities lending collateral payable to brokers (See Note 2(i))................... (6.1) (25,715) Other liabilities........................... (0.1) (251) ----- -------- Net assets.................................. 100.0% $420,972 ===== ======== </Table> <Table> <Caption> MARKET VALUE # -------- SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 700,000 shares authorized; 23,983 shares outstanding...... $ 24 Paid in capital..................................... 446,792 Accumulated net investment loss..................... (1) Accumulated net realized loss on investments........ (79,802) Unrealized appreciation on investments.............. 53,712 Unrealized appreciation on futures contracts ++..... 247 -------- Net assets.......................................... $420,972 ======== </Table> <Table> Class IA Net asset value per share ($346,380 / 19,734 shares outstanding) (500,000 shares authorized).......... $17.55 ====== Class IB Net asset value per share ($74,592 / 4,249 shares outstanding) (200,000 shares authorized).......... $17.55 ====== </Table> <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 0.6% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). ++ The Fund had 67 Russell 2000 March 2003 Futures contracts open as of December 31, 2003. These contracts had a value of $18,666 as of December 31, 2003 and were collateralized by various U.S. Treasury Bills with a market value of $1,000. </Table> The accompanying notes are an integral part of this financial statement. 126 HARTFORD STOCK HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ----------- COMMON STOCKS -- 99.6% BANKS -- 13.0% 1,614 American Express Co. ............................. $ 77,838 2,471 Bank One Corp. ................................... 112,662 1,610 Bank of America Corp. ............................ 129,516 4,932 Citigroup, Inc. .................................. 239,404 737 Federal National Mortgage Association............. 55,289 +911 HSBC Holdings PLC, ADR............................ 71,788 1,117 KeyCorp. ......................................... 32,756 1,255 State Street Corp. ............................... 65,340 1,457 U.S. Bancorp...................................... 43,378 516 Wachovia Corp. ................................... 24,054 ----------- 852,025 ----------- BUSINESS SERVICES -- 1.0% *2,503 Accenture Ltd. ................................... 65,871 ----------- CHEMICALS -- 1.6% 1,099 Dow Chemical Co. (The)............................ 45,681 1,362 du Pont (E.I.) de Nemours & Co. .................. 62,493 ----------- 108,174 ----------- COMMUNICATIONS -- 0.7% 3,433 Motorola, Inc. ................................... 48,295 ----------- COMPUTERS & OFFICE EQUIPMENT -- 8.0% 676 3M Co. ........................................... 57,446 *5,942 Cisco Systems, Inc. .............................. 144,341 *3,326 EMC Corp. ........................................ 42,965 5,112 Hewlett-Packard Co. .............................. 117,431 1,798 International Business Machines Corp. ............ 166,648 ----------- 528,831 ----------- CONSUMER DURABLES -- 0.6% 1,438 Masco Corp. ...................................... 39,427 ----------- CONSUMER NON-DURABLES -- 2.9% 477 Cardinal Health, Inc. ............................ 29,198 2,371 Gillette Co. (The)................................ 87,083 743 Procter & Gamble Co. (The)........................ 74,221 ----------- 190,502 ----------- DRUGS -- 11.4% 1,902 Abbott Laboratories............................... 88,638 *1,320 Amgen, Inc. ...................................... 81,564 1,966 Eli Lilly & Co. .................................. 138,269 *943 Genzyme Corp. .................................... 46,528 947 Merck & Co., Inc. ................................ 43,765 7,768 Pfizer, Inc. ..................................... 274,456 1,865 Wyeth............................................. 79,173 ----------- 752,393 ----------- ELECTRONICS -- 7.0% 7,476 General Electric Co. ............................. 231,613 5,678 Intel Corp. ...................................... 182,819 1,467 Texas Instruments, Inc. .......................... 43,106 ----------- 457,538 ----------- </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ----------- ENERGY & SERVICES -- 5.9% 970 ChevronTexaco Corp. .............................. $ 83,808 5,384 Exxon Mobil Corp. ................................ 220,748 1,478 Schlumberger Ltd. ................................ 80,871 ----------- 385,427 ----------- FINANCIAL SERVICES -- 3.0% 695 Franklin Resources, Inc. ......................... 36,192 1,689 Merrill Lynch & Co., Inc. ........................ 99,072 1,114 Morgan Stanley Dean Witter & Co. ................. 64,490 ----------- 199,754 ----------- FOOD, BEVERAGE & TOBACCO -- 4.6% 2,603 Coca-Cola Co. (The)............................... 132,077 1,421 General Mills, Inc. .............................. 64,362 2,344 PepsiCo, Inc. .................................... 109,277 ----------- 305,716 ----------- FOREST & PAPER PRODUCTS -- 1.5% 1,575 International Paper Co. .......................... 67,877 499 Weyerhaeuser Co. ................................. 31,923 ----------- 99,800 ----------- HEALTH SERVICES -- 0.6% 891 HCA, Inc. ........................................ 38,290 ----------- HOTELS & GAMING -- 0.3% 455 Marriott International, Inc., Class A............. 20,998 ----------- INSURANCE -- 4.7% 2,726 American International Group, Inc. ............... 180,699 1,646 Marsh & McLennan Cos., Inc. ...................... 78,803 3,059 Travelers Property Casualty Corp. -- Class B...... 51,913 ----------- 311,415 ----------- MACHINERY -- 1.9% *1,572 Applied Materials, Inc. .......................... 35,289 1,090 Caterpillar, Inc. ................................ 90,475 ----------- 125,764 ----------- MEDIA & ENTERTAINMENT -- 7.2% *2,310 Comcast Corp. .................................... 75,926 +5,997 Liberty Media Corp., Class A...................... 71,307 *10,434 Time Warner, Inc. ................................ 187,711 2,026 Viacom, Inc., Class B............................. 89,901 +1,994 Walt Disney Co. (The)............................. 46,529 ----------- 471,374 ----------- MEDICAL INSTRUMENTS & SUPPLIES -- 1.8% 1,067 Johnson & Johnson................................. 55,111 1,351 Medtronic, Inc. .................................. 65,687 ----------- 120,798 ----------- METALS, MINERALS & MINING -- 2.1% 1,457 Alcoa, Inc. ...................................... 55,362 985 Illinois Tool Works, Inc. ........................ 82,609 ----------- 137,971 ----------- </Table> The accompanying notes are an integral part of this financial statement. 127 HARTFORD STOCK HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ----------- COMMON STOCKS -- (CONTINUED) RETAIL -- 5.5% *2,233 Costco Wholesale Corp. ........................... $ 83,030 +3,672 Gap, Inc. (The)................................... 85,234 3,460 Home Depot, Inc. (The)............................ 122,802 *308 Kohl's Corp. ..................................... 13,828 1,551 Target Corp. ..................................... 59,551 ----------- 364,445 ----------- RUBBER & PLASTICS PRODUCTS -- 1.2% 1,110 NIKE, Inc., Class B............................... 75,956 ----------- SOFTWARE & SERVICES -- 7.5% *1,442 Computer Sciences Corp. .......................... 63,797 1,519 First Data Corp. ................................. 62,432 9,531 Microsoft Corp. .................................. 262,482 *3,490 Oracle Corp. ..................................... 46,073 1,455 SAP AG, ADR....................................... 60,453 ----------- 495,237 ----------- TRANSPORTATION -- 4.8% 848 CSX Corp. ........................................ 30,474 1,122 FedEx Corp. ...................................... 75,755 938 Lockheed Martin Corp. ............................ 48,203 701 Northrop Grumman Corp. ........................... 67,040 947 United Technologies Corp. ........................ 89,728 ----------- 311,200 ----------- UTILITIES -- 0.8% 1,594 Waste Management, Inc. ........................... 47,171 ----------- Total common stocks............................... $ 6,554,372 =========== SHORT-TERM SECURITIES -- 0.9% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 0.5% 33,265 Boston Global Investment Trust.................... $ 33,265 ----------- <Caption> PRINCIPAL AMOUNT - --------- REPURCHASE AGREEMENTS -- 0.4% $ 24,812 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... 24,812 ----------- Total short-term securities....................... $ 58,077 =========== </Table> <Table> <Caption> MARKET VALUE # ----------- DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $6,005,730)..... 99.6% $ 6,554,372 Total short-term securities (cost $58,077)................................ 0.9 58,077 ----- ----------- Total investment in securities (total cost $6,063,807) -- including $32,628 of securities loaned (See Note 2(i))....... 100.5 6,612,449 Cash, receivables and other assets........ 0.2 8,928 Payable for Fund shares redeemed.......... (0.2) (10,130) Securities lending collateral payable to brokers (See Note 2(i))................. (0.5) (33,265) Other liabilities......................... (0.0) (328) ----- ----------- Net assets................................ 100.0% $ 6,577,654 ===== =========== </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 4,000,000 shares authorized; 148,275 shares outstanding..................................... $ 148 Paid in capital................................... 7,057,787 Accumulated net investment income................. 2,302 Accumulated net realized loss on investments...... (1,031,225) Unrealized appreciation on investments............ 548,642 ----------- Net assets........................................ $ 6,577,654 =========== </Table> <Table> Class IA Net asset value per share ($6,014,675 / 135,564 shares outstanding) (3,000,000 shares authorized)....................................... $44.37 ====== Class IB Net asset value per share ($562,979 / 12,711 shares outstanding) (1,000,000 shares authorized)........ $44.29 ====== </Table> <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 2.0% of total net assets as of December 31, 2003. # See Note 2 (b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2 (i)). </Table> The accompanying notes are an integral part of this financial statement. 128 HARTFORD U.S. GOVERNMENT SECURITIES HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - --------- -------- COLLATERALIZED MORTGAGE OBLIGATIONSV -- 1.3% $ 9,000 Federal Home Loan Mortgage Association, Series 2075, Class PH (Aaa Moodys) 6.50% due 08/15/28.............................. $ 9,534 -------- Total collateralized mortgage obligations......... $ 9,534 ======== CORPORATE NOTESV -- 27.5% U.S. GOVERNMENT AGENCIES -- 27.5% $ 29,600 Federal Home Loan Bank (Aaa Moodys) 3.00% due 05/28/08.............................. $ 29,141 29,800 Federal Home Loan Bank (Aaa Moodys) 3.375% due 07/21/08............................. 29,642 23,895 Federal Home Loan Bank (Aaa Moodys) 5.375% due 02/15/06............................. 25,509 +14000 Federal Home Loan Bank (Aaa Moodys) 5.80% due 09/02/08.............................. 15,417 8,000 Federal Home Loan Mortgage Association (Aaa Moodys) 3.00% due 12/15/06.............................. 7,981 22,100 Federal Home Loan Mortgage Association (Aaa Moodys) 3.125% due 08/25/06............................. 22,348 20,000 Federal Home Loan Mortgage Association (Aaa Moodys) 4.50% due 07/23/07.............................. 20,315 30,000 Federal Home Loan Mortgage Association (Aaa Moodys) 5.25% due 01/15/06.............................. 31,912 12,000 Federal National Mortgage Association (Aaa Moodys) 3.75% due 09/15/08.............................. 11,992 11,750 Tennessee Valley Authority (Aaa Moodys) 5.375% due 11/13/08............................. 12,673 -------- 206,930 -------- Total corporate notes............................. $206,930 ======== U.S. TREASURIES & FEDERAL AGENCIES -- 69.1% FEDERAL HOME LOAN MORTGAGE ASSOCIATION -- 7.1% $ 30,678 5.50% due 06/01/33................................ $ 31,065 7,971 6.00% due 10/01/21 -- 04/01/33.................... 8,263 13,396 6.50% due 04/01/28 -- 09/01/32.................... 14,033 99 7.00% due 09/01/29 -- 02/01/31.................... 105 -------- 53,466 -------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - --------- -------- FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 26.4% $ 15,600 5.00% due 01/01/34................................ $ 15,434 140,729 5.50% due 08/01/15 -- 10/01/33.................... 143,677 1,600 5.89% due 12/01/08................................ 1,736 6,576 5.95% due 01/01/09................................ 7,152 1,009 6.00% due 09/01/13 -- 07/01/14.................... 1,061 941 6.01% due 02/01/09................................ 1,022 1,798 6.20% due 01/01/06................................ 1,892 721 6.36% due 04/01/08................................ 789 21,629 6.50% due 05/01/13 -- 10/01/32.................... 22,643 2,410 6.52% due 01/01/08................................ 2,651 270 7.50% due 06/01/23................................ 290 27 8.50% due 04/01/17................................ 30 15 9.00% due 08/01/20 -- 09/01/21.................... 17 94 9.75% due 07/01/20................................ 104 -------- 198,498 -------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 8.9% 45,588 6.00% due 01/15/33 -- 09/20/33.................... 47,367 10,384 6.50% due 11/15/31 -- 08/15/32.................... 10,948 7,768 7.00% due 06/20/30 -- 09/15/32.................... 8,277 505 7.50% due 07/15/27................................ 543 31 9.50% due 05/15/20 -- 12/15/20.................... 35 -------- 67,170 -------- U.S. INFLATION-INDEXED SECURITIES -- 3.3% 22,634 3.00% due 07/15/12................................ 24,675 -------- U.S. TREASURY BONDS -- 0.3% 2,000 10.375% due 11/15/12.............................. 2,552 -------- U.S. TREASURY NOTES -- 23.1% +5,800 1.625% due 10/31/05............................... 5,791 +15,000 2.00% due 05/15/06................................ 15,001 +5,000 2.625% due 05/15/08............................... 4,925 +60,000 2.625% due 11/15/06............................... 60,530 +8,000 3.125% due 10/15/08............................... 7,985 +5,000 3.25% due 08/15/07................................ 5,100 +42,650 3.50% due 11/15/06................................ 44,084 12,000 4.25% due 11/15/13................................ 11,987 +16,690 6.00% due 08/15/09................................ 18,905 -------- 174,308 -------- Total U.S. treasuries & federal agencies.......... $520,669 ======== <Caption> SHARES - --------- SHORT-TERM SECURITIES -- 24.4% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 21.0% 158,397 Boston Global Investment Trust.................... $158,397 -------- </Table> The accompanying notes are an integral part of this financial statement. 129 HARTFORD U.S. GOVERNMENT SECURITIES HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - --------- -------- REPURCHASE AGREEMENTS -- 3.4% $ 25,563 Joint Repurchase Agreement (See Note 2(d)) 0.84% due 01/02/04.................................... $ 25,563 -------- Total short-term securities....................... $183,960 ======== </Table> <Table> DIVERSIFICATION OF NET ASSETS: Total collateralized mortgage obligations (cost $9,404)......................................... 1.3% $ 9,534 Total corporate notes (cost $205,019)............. 27.5 206,930 Total U.S. treasuries & federal agencies (cost $517,559)....................................... 69.1 520,669 Total short-term securities (cost $183,960)....... 24.4 183,960 ----- --------- Total investment in securities (total cost $915,942) -- including $155,229 of securities loaned (See Note 2(i)).......................... 122.3 921,093 Cash, receivables and other assets................ 0.9 6,463 Payable for securities purchased.................. (2.0) (15,394) Payable for Fund shares redeemed.................. (0.2) (463) Securities lending collateral payable to brokers (See Note 2(i))................................. (21.0) (158,397) Other liabilities................................. (0.0) (36) ----- --------- Net assets........................................ 100.0% $ 753,266 ===== ========= </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 700,000 shares authorized; 65,979 shares outstanding..................... $ 66 Paid in capital............................................. 727,184 Accumulated net investment income........................... 26,837 Accumulated net realized loss on investments................ (5,972) Unrealized appreciation on investments...................... 5,151 -------- Net assets.................................................. $753,266 ======== </Table> <Table> Class IA Net asset value per share ($514,243 / 44,992 shares outstanding) (500,000 shares authorized)................................... $11.43 ====== Class IB Net asset value per share ($239,023 / 20,987 shares outstanding) (200,000 shares authorized)................................... $11.39 ====== </Table> <Table> # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)) V The bond ratings are unaudited </Table> The accompanying notes are an integral part of this financial statement. 130 HARTFORD VALUE HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- 99.1% BANKS -- 16.1% 64 Bank One Corp. ................................... $ 2,922 108 Bank of America Corp. ............................ 8,678 246 Citigroup, Inc. .................................. 11,921 37 Federal National Mortgage Association............. 2,740 149 National City Corp. .............................. 5,050 38 PNC Financial Services Group...................... 2,074 94 Washington Mutual, Inc. .......................... 3,779 67 Wells Fargo Co. .................................. 3,957 -------- 41,121 -------- CHEMICALS -- 2.2% 122 du Pont (E.I.) de Nemours & Co. .................. 5,576 -------- COMMUNICATIONS -- 5.7% 180 BellSouth Corp. .................................. 5,094 223 Nokia Corp., ADR.................................. 3,791 115 SBC Communications, Inc. ......................... 3,008 73 Verizon Communications, Inc. ..................... 2,561 -------- 14,454 -------- COMPUTERS & OFFICE EQUIPMENT -- 4.2% 202 Hewlett-Packard Co. .............................. 4,636 65 International Business Machines Corp. ............ 6,043 -------- 10,679 -------- CONSUMER NON-DURABLES -- 2.1% 199 Tyco International Ltd. .......................... 5,268 -------- DRUGS -- 3.1% 227 Pfizer, Inc. ..................................... 8,020 -------- ELECTRICAL EQUIPMENT -- 2.6% 62 Rockwell Automation, Inc. ........................ 2,189 *173 Teradyne, Inc. ................................... 4,405 -------- 6,594 -------- ELECTRONICS -- 2.4% 93 Emerson Electric Co. ............................. 6,015 -------- ENERGY & SERVICES -- 11.9% 80 ChevronTexaco Corp. .............................. 6,920 30 Conoco, Inc. ..................................... 1,941 329 Exxon Mobil Corp. ................................ 13,477 108 GlobalSantaFe Corp. .............................. 2,684 +115 Shell Transport & Trading Co., PLC, ADR........... 5,187 -------- 30,209 -------- FINANCIAL SERVICES -- 4.1% 55 Goldman Sachs Group, Inc. (The)................... 5,430 89 Morgan Stanley Dean Witter & Co. ................. 5,139 -------- 10,569 -------- FOOD, BEVERAGE & TOBACCO -- 4.6% 93 Coca-Cola Enterprises, Inc. ...................... 2,023 109 Kellogg Co. ...................................... 4,135 120 PepsiCo, Inc. .................................... 5,608 -------- 11,766 -------- </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- -------- FOREST & PAPER PRODUCTS -- 3.2% 39 Kimberly-Clark Corp. ............................. $ 2,322 91 Weyerhaeuser Co. ................................. 5,792 -------- 8,114 -------- INSURANCE -- 5.5% 63 Ace Ltd. ......................................... 2,618 43 Chubb Corp. (The)................................. 2,908 28 Marsh & McLennan Cos., Inc. ...................... 1,350 131 St. Paul Cos., Inc. (The)......................... 5,198 32 StanCorp Financial Group, Inc. ................... 2,012 -------- 14,086 -------- MACHINERY -- 3.7% *174 Applied Materials, Inc. .......................... 3,900 68 Caterpillar, Inc. ................................ 5,629 -------- 9,529 -------- MEDIA & ENTERTAINMENT -- 4.4% *158 Comcast Corp. .................................... 4,933 *345 Time Warner, Inc. ................................ 6,210 -------- 11,143 -------- MEDICAL INSTRUMENTS & SUPPLIES -- 4.1% 51 Bard (C.R.), Inc. ................................ 4,160 130 Baxter International, Inc. ....................... 3,958 48 Beckman Coulter, Inc. ............................ 2,430 -------- 10,548 -------- METALS, MINERALS & MINING -- 4.2% 191 Alcoa, Inc. ...................................... 7,239 40 Illinois Tool Works, Inc. ........................ 3,348 -------- 10,587 -------- RETAIL -- 4.2% *35 AutoNation, Inc. ................................. 637 124 CVS Corp. ........................................ 4,482 152 Dollar General Corp. ............................. 3,197 99 McDonald's Corp. ................................. 2,466 -------- 10,782 -------- RUBBER & PLASTICS PRODUCTS -- 1.2% 44 NIKE, Inc., Class B............................... 2,978 -------- TRANSPORTATION -- 3.2% 82 CSX Corp. ........................................ 2,929 62 General Motors Corp. ............................. 3,295 126 Southwest Airlines Co. ........................... 2,037 -------- 8,261 -------- UTILITIES -- 6.4% 46 Dominion Resources, Inc. ......................... 2,911 79 Exelon Corp. ..................................... 5,212 64 National Fuel Gas Co. ............................ 1,557 23 PPL Corp. ........................................ 998 18 Progress Energy, Inc. ............................ 801 </Table> The accompanying notes are an integral part of this financial statement. 131 <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- (CONTINUED) UTILITIES -- (CONTINUED) 107 Republic Services, Inc. .......................... $ 2,750 58 Scana Corp. ...................................... 1,987 -------- 16,216 -------- Total common stocks............................... $252,515 ======== SHORT-TERM SECURITIES -- 1.4% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 0.9% 2,178 Boston Global Investment Trust.................... $ 2,178 -------- <Caption> PRINCIPAL AMOUNT - --------- REPURCHASE AGREEMENTS -- 0.5% $1,348 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... 1,348 -------- Total short-term securities....................... $ 3,526 ======== </Table> <Table> DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $221,034)......... 99.1% $252,515 Total short-term securities (cost $3,526)... 1.4 3,526 ----- -------- Total investment in securities (total cost $224,560) -- including $2,143 of securities loaned (See Note 2(i))......... 100.5 256,041 Cash, receivables and other assets.......... 0.4 1,060 Security lending collateral payable to broker (See Note 2(i)).................... (0.9) (2,178) Other liabilities........................... (0.0) (13) ----- -------- Net assets.................................. 100.0% $254,910 ===== ======== </Table> <Table> <Caption> MARKET VALUE # -------- SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 800,000 shares authorized; 26,260 shares outstanding...... $ 26 Paid in capital..................................... 233,684 Accumulated net investment income................... 731 Accumulated net realized loss on investments........ (11,012) Unrealized appreciation on investments.............. 31,481 -------- Net assets.......................................... $254,910 ======== </Table> <Table> Class IA Net asset value per share ($155,085 / 15,958 shares outstanding) (600,000 shares authorized)........... $9.72 ===== Class IB Net asset value per share ($99,825 / 10,302 shares outstanding) (200,000 shares authorized)........... $9.69 ===== </Table> <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 3.5% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). </Table> The accompanying notes are an integral part of this financial statement. 132 HARTFORD VALUE OPPORTUNITIES HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- 98.9% BANKS -- 21.4% 36 Bank of America Corp. ............................ $ 2,920 89 CIT Group, Inc. .................................. 3,192 156 Citigroup, Inc. .................................. 7,577 45 Comerica, Inc. ................................... 2,540 38 Federal Home Loan Mortgage Association............ 2,216 118 Federal National Mortgage Association............. 8,865 86 Fleet Boston Financial Corp. ..................... 3,750 159 Hibernia Corp., Class A........................... 3,738 33 National City Corp. .............................. 1,117 32 UnionBanCal Corp. ................................ 1,859 71 Washington Mutual, Inc. .......................... 2,828 -------- 40,602 -------- BUSINESS SERVICES -- 1.3% *87 BearingPoint, Inc. ............................... 877 *192 UnitedGlobalCom, Inc., Class A.................... 1,626 -------- 2,503 -------- CHEMICALS -- 1.8% 11 Avery Dennison Corp. ............................. 611 287 IMC Global, Inc. ................................. 2,849 -------- 3,460 -------- COMMUNICATIONS -- 0.2% *+227 McLeodUSA, Inc. .................................. 336 -------- COMPUTERS & OFFICE EQUIPMENT -- 0.5% 10 International Business Machines Corp. ............ 955 -------- CONSTRUCTION -- 5.4% 2 Beazer Homes USA, Inc. ........................... 146 18 MDC Holdings, Inc. ............................... 1,158 -1,091 Rinker Group Ltd. ................................ 5,395 *26 Toll Brothers, Inc. .............................. 1,038 *118 WCI Communities, Inc. ............................ 2,424 -------- 10,161 -------- CONSUMER DURABLES -- 1.0% *85 Arrow Electronics, Inc. .......................... 1,955 -------- CONSUMER NON-DURABLES -- 5.3% 42 AmerisourceBergen Corp. .......................... 2,375 288 Tyco International Ltd. .......................... 7,632 -------- 10,007 -------- DRUGS -- 5.9% +76 Aventis S.A., ADR................................. 5,023 36 Merck & Co., Inc. ................................ 1,645 53 Pfizer, Inc. ..................................... 1,889 60 Wyeth............................................. 2,564 -------- 11,121 -------- ELECTRICAL EQUIPMENT -- 0.8% *58 Teradyne, Inc. ................................... 1,484 -------- </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- -------- ELECTRONICS -- 1.6% *54 Fairchild Semiconductor International Corp., Class A............................................... $ 1,356 *71 Vishay Intertechnology, Inc. ..................... 1,627 -------- 2,983 -------- ENERGY & SERVICES -- 8.7% 60 Devon Energy Corp. ............................... 3,441 32 EnCana Corp. ..................................... 1,269 74 GlobalSantaFe Corp. .............................. 1,835 -26 IHC Caland N.V. .................................. 1,410 *46 Noble Corp. ...................................... 1,646 68 Royal Dutch Petroleum Co., N.V., NY Reg Shares.... 3,547 37 TotalFinaElf S.A., ADR............................ 3,423 -------- 16,571 -------- FOOD, BEVERAGE & TOBACCO -- 1.8% 51 Bunge Ltd. ....................................... 1,669 *54 Constellation Brands, Inc. ....................... 1,772 -------- 3,441 -------- FOREST & PAPER PRODUCTS -- 3.0% 28 Aracruz Celulose S.A., ADR........................ 967 *73 Pactiv Corp. ..................................... 1,749 68 Sappi Ltd., ADR................................... 927 *113 Smurfit-Stone Container Corp. .................... 2,091 -------- 5,734 -------- INSURANCE -- 14.1% 71 Ace Ltd. ......................................... 2,920 *60 Anthem, Inc. ..................................... 4,515 *29 Health Net, Inc. ................................. 955 12 MBIA, Inc. ....................................... 729 *76 Oxford Health Plans, Inc. ........................ 3,306 85 Platinum Underwriters Holdings Ltd. .............. 2,547 34 Radian Group, Inc. ............................... 1,677 46 Reinsurance Group of America, Inc. ............... 1,786 113 RenaissanceRe Holdings Ltd. ...................... 5,538 21 St. Paul Cos., Inc. (The)......................... 837 6 Travelers Property Casualty Corp. -- Class A...... 101 101 Travelers Property Casualty Corp. -- Class B...... 1,716 -------- 26,627 -------- MACHINERY -- 1.5% *199 Axcelis Technologies, Inc. ....................... 2,036 21 York International Corp. ......................... 754 -------- 2,790 -------- MEDIA & ENTERTAINMENT -- 6.2% 7 Blockbuster, Inc., Class A........................ 117 *12 COX Communications, Inc. ......................... 400 *200 Comcast Corp., Special Class A ................... 6,240 *278 Time Warner, Inc. ................................ 5,003 -------- 11,760 -------- </Table> The accompanying notes are an integral part of this financial statement. 133 HARTFORD VALUE OPPORTUNITIES HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- (CONTINUED) METALS, MINERALS & MINING -- 1.7% 51 Alcoa, Inc. ...................................... $ 1,927 39 Engelhard Corp. .................................. 1,153 *1 International Steel Group, Inc. .................. 51 -------- 3,131 -------- RETAIL -- 5.9% *13 CEC Entertaining, Inc. ........................... 597 132 Foot Locker, Inc. ................................ 3,084 *154 Kroger Co. (The).................................. 2,856 78 Ross Stores, Inc. ................................ 2,067 121 TJX Cos., Inc. (The).............................. 2,668 -------- 11,272 -------- RUBBER & PLASTICS PRODUCTS -- 2.8% -114 Compagnie Generale des Etablissements Michelin, Class B......................................... 5,244 -------- SOFTWARE & SERVICES -- 1.5% 51 Microsoft Corp. .................................. 1,402 *97 Unisys Corp. ..................................... 1,446 -------- 2,848 -------- TRANSPORTATION -- 3.0% *+112 AMR Corp. ........................................ 1,447 334 Bombardier, Inc. ................................. 1,415 *+63 Continental Airlines, Inc., Class B............... 1,017 *56 ExpressJet Holdings, Inc. ........................ 839 *75 Pinnacle Airlines Corp. .......................... 1,047 -------- 5,765 -------- UTILITIES -- 3.5% 21 Dominion Resources, Inc. ......................... 1,315 14 Exelon Corp. ..................................... 949 21 PPL Corp. ........................................ 932 23 Progress Energy, Inc. ............................ 1,041 99 TXU Corp. ........................................ 2,358 -------- 6,595 -------- Total common stocks............................... $187,345 ======== SHORT-TERM SECURITIES -- 5.8% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 3.2% 6,053 Boston Global Investment Trust.................... $ 6,053 -------- <Caption> PRINCIPAL AMOUNT - --------- REPURCHASE AGREEMENTS -- 2.6% $4,985 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... 4,985 -------- Total short-term securities....................... $ 11,038 ======== </Table> <Table> <Caption> MARKET VALUE -------- DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $155,650)............... 98.9% $187,345 Total short-term securities (cost $11,038)........ 5.8 11,038 ----- -------- Total investment in securities (total cost $166,688) -- including $5,817 of securities loaned (See Note 2(i)).......................... 104.7 198,383 Cash, receivables and other assets................ 1.8 3,434 Payable for securities purchased.................. (3.3) (6,286) Payable for Fund shares redeemed.................. (0.0) (16) Securities lending collateral payable to brokers (See Note 2(i))................................. (3.2) (6,053) Other liabilities................................. (0.0) (11) ----- -------- Net assets........................................ 100.0% $189,451 ===== ======== </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 700,000 shares authorized; 12,369 shares outstanding...... $ 12 Paid in capital..................................... 173,737 Accumulated net investment income................... 726 Accumulated net realized loss on investments........ (16,715) Unrealized appreciation on investments.............. 31,695 Unrealized appreciation on forward foreign currency contracts (See Note 2(g)) @@@..................... 8 Unrealized depreciation on other assets and liabilities in foreign currencies................. (12) -------- Net assets.......................................... $189,451 ======== </Table> <Table> Class IA Net asset value per share ($156,879 / 10,235 shares outstanding) (500,000 shares authorized)................................... $15.33 ====== Class IB Net asset value per share ($32,572 / 2,134 shares outstanding) (200,000 shares authorized)................................... $15.27 ====== </Table> <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 18.0% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). - Security valued in good faith at fair value by, or under the direction of, the Funds' Board of Directors. The aggregate value of these securities as of December 31, 2003 was $12,049, which represents 6.4% of total net assets. </Table> The accompanying notes are an integral part of this financial statement. 134 - -------------------------------------------------------------------------------- @@@FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING AT DECEMBER 31, 2003 <Table> <Caption> UNREALIZED APPRECIATION DESCRIPTION MARKET VALUE CONTRACT DELIVERY (DEPRECIATION) - ----------- ------------ -------- -------- -------------- Australian Dollar (Buy) $ 135 $ 134 1/2/2004 $ 1 Australian Dollar (Buy) 208 207 1/6/2004 1 Australian Dollar (Buy) 641 635 1/5/2004 6 --- $ 8 === </Table> The accompanying notes are an integral part of this financial statement. 135 HARTFORD HLS MUTUAL FUNDS STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD HARTFORD HARTFORD CAPITAL ADVISERS BOND APPRECIATION HLS FUND HLS FUND HLS FUND ---------- --------- ------------ INVESTMENT INCOME: Dividends................................................. $ 114,696 $ 200 $ 99,648 Interest.................................................. 165,102 122,023 18,754 Securities lending........................................ 1,013 959 582 Miscellaneous............................................. -- -- -- Less: Foreign tax withheld................................ (116) -- (2,754) ---------- -------- ---------- Total investment income (loss).......................... 280,695 123,182 116,230 ---------- -------- ---------- EXPENSES: Investment advisory fees.................................. 45,100 7,690 34,597 Administrative services fees.............................. 20,812 5,802 15,869 Accounting services....................................... 2,081 580 1,587 Board of Directors fees................................... 124 35 92 Custodian fees, gross..................................... 72 71 1,583 Distribution Fees -- Class IB............................. 2,320 1,433 2,398 Other expenses............................................ 1,658 480 1,205 ---------- -------- ---------- Total expenses (before offsets)......................... 72,167 16,091 57,331 ---------- -------- ---------- Expenses paid indirectly (See Note 3(d)).................. 47 13 36 Custodian fees offset (See Note 3(d))..................... 4 29 20 ---------- -------- ---------- Total expenses net...................................... 72,116 16,049 57,275 ---------- -------- ---------- Net investment income (loss).............................. 208,579 107,133 58,955 ---------- -------- ---------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on securities.................... (442,960) 120,269 316,746 Net realized gain (loss) on futures contracts............. -- -- -- Net realized gain (loss) on forward foreign currency contracts............................................... -- 399 908 Net realized gain (loss) on foreign currency transactions............................................ 24 (3,574) (3,884) Net realized gain (loss) on option contracts.............. -- (901) -- Net unrealized appreciation (depreciation) on securities.............................................. 2,029,822 (8,107) 2,610,764 Net unrealized appreciation (depreciation) on futures contracts............................................... -- -- -- Net unrealized appreciation (depreciation) on forward foreign bonds........................................... -- -- -- Net unrealized appreciation (depreciation) on forward foreign currency contracts.............................. -- 4 183 Net unrealized appreciation (depreciation) on translation of other assets and liabilities in foreign currencies... -- (276) (22) Net unrealized appreciation (depreciation) on option contracts............................................... -- -- -- ---------- -------- ---------- Net realized and unrealized gain (loss) on investments.... 1,586,886 107,814 2,924,695 ---------- -------- ---------- Net increase (decrease) in net assets resulting from operations.............................................. $1,795,465 $214,947 $2,983,650 ========== ======== ========== </Table> (1) Formerly, Hartford Growth and Income HLS Fund. (2) Hartford Equity Income HLS Fund's inception date was October 31, 2003. The accompanying notes are an integral part of these financial statements. 136 - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD HARTFORD HARTFORD HARTFORD HARTFORD DISCIPLINED DIVIDEND AND HARTFORD HARTFORD GLOBAL GLOBAL GLOBAL EQUITY GROWTH EQUITY INCOME FOCUS ADVISERS COMMUNICATIONS FINANCIAL SERVICES HLS FUND(1) HLS FUND HLS FUND(2) HLS FUND HLS FUND HLS FUND HLS FUND ------------ ------------ ------------- --------- --------- -------------- ------------------- $ 10,355 $ 83,908 $ 26 $ 853 $ 2,615 $ 137 $ 750 259 2,185 1 25 3,998 74 15 4 358 -- -- 74 6 15 -- -- -- -- -- -- -- -- (1,028) -- -- (169) (8) (39) -------- -------- ---- ------- ------- ------ ------ 10,618 85,423 27 878 6,518 209 741 -------- -------- ---- ------- ------- ------ ------ 3,400 16,673 6 439 1,751 113 185 1,274 7,434 2 135 619 35 57 127 743 -- 14 62 3 6 7 43 -- 1 4 -- -- 19 21 2 5 132 17 22 242 1,417 -- 68 67 13 26 120 574 1 14 48 7 9 -------- -------- ---- ------- ------- ------ ------ 5,189 26,905 11 676 2,683 188 305 -------- -------- ---- ------- ------- ------ ------ 3 17 -- -- 1 -- -- -- 1 -- -- -- -- -- -------- -------- ---- ------- ------- ------ ------ 5,186 26,887 11 676 2,682 188 305 -------- -------- ---- ------- ------- ------ ------ 5,432 58,536 16 202 3,836 21 436 -------- -------- ---- ------- ------- ------ ------ (19,533) (70,530) 2 (1,681) 42,952 1,895 1,418 1,960 -- -- -- (2,292) -- -- -- -- -- -- (8,294) 24 (5) -- 23 -- -- 1,686 (57) (3) -- -- -- -- 863 -- -- 182,629 966,352 553 19,609 23,262 7,065 6,232 1,747 -- -- -- 297 -- -- -- -- -- -- 1,733 -- -- -- -- -- -- (827) -- 2 -- -- -- -- 687 1 -- -- -- -- -- (19) -- -- -------- -------- ---- ------- ------- ------ ------ 166,803 895,845 555 17,928 60,048 8,928 7,644 -------- -------- ---- ------- ------- ------ ------ $172,235 $954,381 $571 $18,130 $63,884 $8,949 $8,080 ======== ======== ==== ======= ======= ====== ====== </Table> 137 HARTFORD HLS MUTUAL FUNDS STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD HARTFORD HARTFORD GLOBAL GLOBAL GLOBAL HEALTH LEADERS TECHNOLOGY HLS FUND HLS FUND HLS FUND --------- --------- ---------- INVESTMENT INCOME: Dividends................................................. $ 2,789 $ 9,231 $ 327 Interest.................................................. 89 232 71 Securities lending........................................ 79 279 14 Miscellaneous............................................. -- -- -- Less: Foreign tax withheld................................ (85) (554) (11) ------- -------- ------- Total investment income (loss).......................... 2,872 9,188 401 ------- -------- ------- EXPENSES: Investment advisory fees.................................. 1,775 3,647 735 Administrative services fees.............................. 552 1,378 226 Accounting services....................................... 55 138 23 Board of Directors fees................................... 3 8 1 Custodian fees, gross..................................... 22 193 15 Distribution Fees -- Class IB............................. 177 208 64 Other expenses............................................ 46 131 21 ------- -------- ------- Total expenses (before offsets)......................... 2,630 5,703 1,085 ------- -------- ------- Expenses paid indirectly (See Note 3(d)).................. 1 3 1 Custodian fees offset (See Note 3(d))..................... -- 3 -- ------- -------- ------- Total expenses net...................................... 2,629 5,697 1,084 ------- -------- ------- Net investment income (loss).............................. 243 3,491 (683) ------- -------- ------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on securities.................... 15,958 115,915 22,312 Net realized gain (loss) on futures contracts............. -- -- -- Net realized gain (loss) on forward foreign currency contracts............................................... (115) 120 (1) Net realized gain (loss) on foreign currency transactions............................................ 43 134 (11) Net realized gain (loss) on option contracts.............. -- -- -- Net unrealized appreciation (depreciation) on securities.............................................. 62,703 98,220 29,557 Net unrealized appreciation (depreciation) on futures contracts............................................... -- -- -- Net unrealized appreciation (depreciation) on forward foreign bonds........................................... -- -- -- Net unrealized appreciation (depreciation) on forward foreign currency contracts.............................. 19 13 2 Net unrealized appreciation (depreciation) on translation of other assets and liabilities in foreign currencies... (24) 29 (2) Net unrealized appreciation (depreciation) on option contracts............................................... -- -- -- ------- -------- ------- Net realized and unrealized gain (loss) on investments.... 78,584 214,431 51,857 ------- -------- ------- Net increase (decrease) in net assets resulting from operations.............................................. $78,827 $217,922 $51,174 ======= ======== ======= </Table> The accompanying notes are an integral part of these financial statements. 138 - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD HARTFORD HARTFORD HARTFORD HARTFORD GROWTH HARTFORD HARTFORD INTERNATIONAL INTERNATIONAL INTERNATIONAL GROWTH OPPORTUNITIES HIGH YIELD INDEX CAPITAL APPRECIATION OPPORTUNITIES SMALL COMPANY HLS FUND HLS FUND HLS FUND HLS FUND HLS FUND HLS FUND HLS FUND --------- ------------- ---------- --------- -------------------- ------------- ------------- $ 632 $ 2,971 $ 134 $ 31,995 $ 854 $ 15,570 $ 897 47 453 37,284 884 15 195 27 -- 92 95 35 59 477 62 -- -- -- -- -- -- 97 (3) (45) -- -- (78) (2,171) (96) ------- -------- -------- -------- ------- -------- ------- 676 3,471 37,513 32,914 850 14,071 987 ------- -------- -------- -------- ------- -------- ------- 623 3,618 2,628 3,587 446 3,861 248 199 -- 964 3,587 137 1,468 76 20 -- 96 359 14 147 8 1 7 5 21 1 9 -- 19 32 19 41 81 523 128 105 63 371 307 78 111 30 17 93 79 277 14 120 10 ------- -------- -------- -------- ------- -------- ------- 984 3,813 4,162 8,179 771 6,239 500 ------- -------- -------- -------- ------- -------- ------- -- 3 2 8 -- 3 -- -- -- 6 -- -- 2 -- ------- -------- -------- -------- ------- -------- ------- 984 3,810 4,154 8,171 771 6,234 500 ------- -------- -------- -------- ------- -------- ------- (308) (339) 33,359 24,743 79 7,837 487 ------- -------- -------- -------- ------- -------- ------- 9,553 84,869 (15,926) 3,345 16,592 32,879 8,344 -- -- -- 2,949 -- -- -- -- (53) 6 -- 69 (143) 46 -- 43 293 -- (201) (631) 107 -- -- -- -- -- -- -- 20,336 131,438 76,806 424,703 13,653 186,703 8,965 -- -- -- 609 -- -- -- -- -- -- -- -- -- -- -- (5) -- -- 13 45 (262) -- 7 5 -- (14) (100) (7) -- -- -- -- -- -- -- ------- -------- -------- -------- ------- -------- ------- 29,889 216,299 61,184 431,606 30,112 218,753 17,193 ------- -------- -------- -------- ------- -------- ------- $29,581 $215,960 $ 94,543 $456,349 $30,191 $226,590 $17,680 ======= ======== ======== ======== ======= ======== ======= </Table> 139 HARTFORD HLS MUTUAL FUNDS STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD HARTFORD HARTFORD MIDCAP MIDCAP VALUE MONEY MARKET HLS FUND HLS FUND HLS FUND --------- ------------ ------------ INVESTMENT INCOME: Dividends................................................. $ 14,703 $ 5,796 $ 64 Interest.................................................. 225 224 27,354 Securities lending........................................ 273 108 -- Miscellaneous............................................. -- -- -- Less: Foreign tax withheld................................ (75) (56) -- -------- -------- ------- Total investment income (loss).......................... 15,126 6,072 27,418 -------- -------- ------- EXPENSES: Investment advisory fees.................................. 7,887 3,282 5,527 Administrative services fees.............................. 3,300 1,116 4,422 Accounting services....................................... 330 112 442 Board of Directors fees................................... 19 6 28 Custodian fees, gross..................................... 51 52 16 Distribution Fees -- Class IB............................. 310 457 675 Other expenses............................................ 259 85 329 -------- -------- ------- Total expenses (before offsets)......................... 12,156 5,110 11,439 -------- -------- ------- Expenses paid indirectly (See Note 3(d)).................. 7 3 10 Custodian fees offset (See Note 3(d))..................... 1 -- -- -------- -------- ------- Total expenses net...................................... 12,148 5,107 11,429 -------- -------- ------- Net investment income (loss).............................. 2,978 965 15,989 -------- -------- ------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on securities.................... 59,372 26,092 -- Net realized gain (loss) on futures contracts............. -- -- -- Net realized gain (loss) on forward foreign currency contracts............................................... 48 101 -- Net realized gain (loss) on foreign currency transactions............................................ 35 (167) -- Net realized gain (loss) on option contracts.............. -- -- -- Net unrealized appreciation (depreciation) on securities.............................................. 473,725 195,500 -- Net unrealized appreciation (depreciation) on futures contracts............................................... -- -- -- Net unrealized appreciation (depreciation) on forward foreign bonds........................................... -- -- -- Net unrealized appreciation (depreciation) on forward foreign currency contracts.............................. (39) 10 -- Net unrealized appreciation (depreciation) on translation of other assets and liabilities in foreign currencies... 41 (13) -- Net unrealized appreciation (depreciation) on option contracts............................................... -- -- -- -------- -------- ------- Net realized and unrealized gain (loss) on investments.... 533,182 221,523 -- -------- -------- ------- Net increase (decrease) in net assets resulting from operations.............................................. $536,160 $222,488 $15,989 ======== ======== ======= </Table> The accompanying notes are an integral part of these financial statements. 140 - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD HARTFORD HARTFORD HARTFORD HARTFORD MORTGAGE SMALL SMALLCAP HARTFORD U.S. GOVERNMENT HARTFORD VALUE SECURITIES COMPANY GROWTH STOCK SECURITIES VALUE OPPORTUNITIES HLS FUND HLS FUND HLS FUND HLS FUND HLS FUND HLS FUND HLS FUND ---------- --------- --------- ---------- --------------- --------- ------------- $ -- $ 1,182 $ 1,334 $ 94,219 $ -- $ 3,847 $ 1,593 28,453 528 174 1,404 25,961 50 37 -- 355 238 66 159 1 34 -- -- -- -- -- -- -- -- -- (1) (96) -- (6) (28) -------- -------- -------- ---------- -------- ------- ------- 28,453 2,065 1,745 95,593 26,120 3,892 1,636 -------- -------- -------- ---------- -------- ------- ------- 2,135 3,949 1,722 14,744 3,685 1,013 836 1,708 1,505 -- 11,445 -- 324 -- 171 151 -- 1,145 -- 32 -- 11 9 3 68 10 2 1 15 37 16 29 8 12 10 413 286 79 1,010 492 153 36 131 118 40 893 133 26 21 -------- -------- -------- ---------- -------- ------- ------- 4,584 6,055 1,860 29,334 4,328 1,562 904 -------- -------- -------- ---------- -------- ------- ------- 4 3 1 26 4 1 1 7 10 -- 1 -- -- -- -------- -------- -------- ---------- -------- ------- ------- 4,573 6,042 1,859 29,307 4,324 1,561 903 -------- -------- -------- ---------- -------- ------- ------- 23,880 (3,977) (114) 66,286 21,796 2,331 733 -------- -------- -------- ---------- -------- ------- ------- 10,521 130,413 11,076 (507,440) 3,901 (1,709) 3,033 -- -- 3,097 -- -- (1) -- -- 40 -- -- -- -- (1) -- (85) -- 7 -- -- (3) -- -- -- -- -- -- -- (16,638) 205,037 99,848 1,817,955 (10,969) 45,211 42,756 -- -- 417 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 8 -- (6) -- -- -- -- (12) -- -- -- -- -- -- -- -------- -------- -------- ---------- -------- ------- ------- (6,117) 335,399 114,438 1,310,522 (7,068) 43,501 45,781 -------- -------- -------- ---------- -------- ------- ------- $ 17,763 $331,422 $114,324 $1,376,808 $ 14,728 $45,832 $46,514 ======== ======== ======== ========== ======== ======= ======= </Table> 141 HARTFORD HLS MUTUAL FUNDS STATEMENTS OF CHANGES IN NET ASSETS (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD ADVISERS HLS FUND --------------------------- FOR THE FOR THE YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, 2003 2002 ------------ ------------ OPERATIONS: Net investment income (loss).............................. $ 208,579 $ 253,749 Net realized gain (loss) on investments................... (442,936) (154,706) Net unrealized appreciation (depreciation) of investments............................................. 2,029,822 (1,855,706) ----------- ----------- Net increase (decrease) in net assets resulting from operations.............................................. 1,795,465 (1,756,663) ----------- ----------- DISTRIBUTIONS TO SHAREHOLDERS: From net investment income Class IA................................................ (233,680) (310,849) Class IB................................................ (23,061) (17,707) From net realized gain on investments Class IA................................................ -- -- Class IB................................................ -- -- ----------- ----------- Total distributions..................................... (256,741) (328,556) ----------- ----------- CAPITAL SHARE TRANSACTIONS: Class IA................................................ (284,304) (609,326) Class IB................................................ 446,195 258,251 ----------- ----------- Net increase (decrease) from capital share transactions... 161,891 (351,075) ----------- ----------- Net increase (decrease) in net assets..................... 1,700,615 (2,436,294) NET ASSETS: Beginning of period....................................... 9,921,475 12,357,769 ----------- ----------- End of period............................................. $11,622,090 $ 9,921,475 =========== =========== Accumulated undistributed net investment income (loss)...... $ 104,776 $ 146,740 =========== =========== </Table> (a) Formerly, Hartford Growth and Income HLS Fund. (b) Hartford Equity Income HLS Fund's inception date was October 31, 2003. The accompanying notes are an integral part of these financial statements. 142 - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD DIVIDEND HARTFORD CAPITAL HARTFORD DISCIPLINED EQUITY AND GROWTH HARTFORD BOND HLS FUND APPRECIATION HLS FUND HLS FUND(A) HLS FUND --------------------------- --------------------------- --------------------------- --------------------------- FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2003 2002 2003 2002 2003 2002 2003 2002 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 107,133 $ 114,109 $ 58,955 $ 49,150 $ 5,432 $ 3,235 $ 58,536 $ 50,483 116,193 23,979 313,770 (1,321,148) (17,573) (112,056) (70,507) (24,164) (8,379) 71,252 2,610,925 (568,703) 184,376 (47,818) 966,352 (548,276) ---------- ---------- ----------- ----------- -------- --------- ---------- ------------ 214,947 209,340 2,983,650 (1,840,701) 172,235 (156,639) 954,381 (521,957) ---------- ---------- ----------- ----------- -------- --------- ---------- ------------ (97,398) (71,918) (44,255) (43,001) (7,093) (2,112) (50,473) (44,489) (23,627) (9,028) (5,412) (2,845) (1,140) (143) (10,033) (4,542) (11,273) (21,013) -- -- -- -- (19,745) (156,583) (2,800) (2,682) -- -- -- -- (3,536) (11,349) ---------- ---------- ----------- ----------- -------- --------- ---------- ------------ (135,098) (104,641) (49,667) (45,846) (8,233) (2,255) (83,787) (216,963) ---------- ---------- ----------- ----------- -------- --------- ---------- ------------ 120,521 505,821 119,749 (712,297) 87,569 188,974 391,568 306,692 338,611 215,658 609,544 299,875 70,390 27,045 429,740 225,899 ---------- ---------- ----------- ----------- -------- --------- ---------- ------------ 459,132 721,479 729,293 (412,422) 157,959 216,019 821,308 532,591 ---------- ---------- ----------- ----------- -------- --------- ---------- ------------ 538,981 826,178 3,663,276 (2,298,969) 321,961 57,125 1,691,902 (206,329) 2,538,130 1,701,952 6,828,872 9,127,841 519,737 462,612 3,138,292 3,344,621 ---------- ---------- ----------- ----------- -------- --------- ---------- ------------ $3,067,111 $2,528,130 $10,492,148 $ 6,828,872 $841,698 $ 519,737 $4,830,194 $ 3,138,292 ========== ========== =========== =========== ======== ========= ========== ============ $ 149,925 $ 121,024 $ 2,152 $ 1,931 $ 422 $ 3,234 $ 1,538 $ 3,506 ========== ========== =========== =========== ======== ========= ========== ============ <Caption> HARTFORD EQUITY INCOME HLS FUND(B) ------------ FOR THE YEAR ENDED DECEMBER 31, 2003 ------------ $ 16 2 553 ------- 571 ------- (13) (3) -- -- ------- (16) ------- 8,033 1,532 ------- 9,565 ------- 10,120 -- ------- $10,120 ======= $ 1 ======= </Table> 143 HARTFORD HLS MUTUAL FUNDS STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> FOCUS GLOBAL ADVISERS HLS FUND HLS FUND --------------------------- --------------------------- FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2003 2002 2003 2002 ------------ ------------ ------------ ------------ OPERATIONS: Net investment income (loss).............................. $ 202 $ 165 $ 3,836 $ 6,377 Net realized gain (loss) on investments................... (1,681) (5,484) 34,915 (34,588) Net unrealized appreciation (depreciation) of investments............................................. 19,609 (9,103) 25,133 (1,856) ------- -------- -------- -------- Net increase (decrease) in net assets resulting from operations.............................................. 18,130 (14,422) 63,884 (30,067) ------- -------- -------- -------- DISTRIBUTIONS TO SHAREHOLDERS: From net investment income Class IA................................................ (118) -- (2,239) (146) Class IB................................................ (48) -- (261) -- From net realized gain on investments Class IA................................................ -- (394) -- (198) Class IB................................................ -- (154) -- (9) From capital Class IA................................................ -- -- -- -- Class IB................................................ -- -- -- -- ------- -------- -------- -------- Total distributions..................................... (166) (548) (2,500) (353) ------- -------- -------- -------- CAPITAL SHARE TRANSACTIONS: Class IA................................................ 4,125 13,367 (12,675) (33,313) Class IB................................................ 13,878 13,430 19,970 5,391 ------- -------- -------- -------- Net increase (decrease) from capital share transactions... 18,003 26,797 7,295 (27,922) ------- -------- -------- -------- Net increase (decrease) in net assets..................... 35,967 11,827 68,679 (58,342) NET ASSETS: Beginning of period....................................... 53,598 41,771 285,407 343,749 ------- -------- -------- -------- End of period............................................. $89,565 $ 53,598 $354,086 $285,407 ======= ======== ======== ======== Accumulated undistributed net investment income (loss)...... $ 202 $ 166 $ 3,362 $ 1,157 ======= ======== ======== ======== </Table> The accompanying notes are an integral part of these financial statements. 144 - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD GLOBAL HARTFORD GLOBAL COMMUNICATIONS FINANCIAL SERVICES HARTFORD GLOBAL HEALTH HARTFORD GLOBAL LEADERS HLS FUND HLS FUND HLS FUND HLS FUND --------------------------- --------------------------- --------------------------- --------------------------- FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2003 2002 2003 2002 2003 2002 2003 2002 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 21 $ 50 $ 436 $ 215 $ 243 $ 144 $ 3,491 $ 6,467 1,862 (3,781) 1,410 (2,258) 15,886 2,312 116,169 (128,933) 7,066 794 6,234 (2,207) 62,698 (51,651) 98,262 (20,675) ------- ------- ------- ------- -------- -------- -------- --------- 8,949 (2,937) 8,080 (4,250) 78,827 (49,195) 217,922 (143,141) ------- ------- ------- ------- -------- -------- -------- --------- -- (49) (243) (196) (270) (26) (2,799) (5,462) -- (11) (187) (64) -- -- (323) (437) -- -- -- -- (2,892) (4,892) -- -- -- -- -- -- (1,013) (1,082) -- -- -- (6) -- (4) -- -- -- -- -- (1) -- (2) -- -- -- -- ------- ------- ------- ------- -------- -------- -------- --------- -- (67) (430) (266) (4,175) (6,000) (3,122) (5,899) ------- ------- ------- ------- -------- -------- -------- --------- 3,079 3,000 (1,212) 4,708 41,861 15,614 (4,281) 197,555 4,678 1,625 6,595 4,163 35,416 22,176 46,523 17,790 ------- ------- ------- ------- -------- -------- -------- --------- 7,757 4,625 5,383 8,871 77,277 37,790 42,242 215,345 ------- ------- ------- ------- -------- -------- -------- --------- 16,706 1,621 13,033 4,355 151,929 (17,405) 257,042 66,305 10,884 9,263 21,963 17,608 220,507 237,912 600,322 534,017 ------- ------- ------- ------- -------- -------- -------- --------- $27,590 $10,884 $34,996 $21,963 $372,436 $220,507 $857,364 $ 600,322 ======= ======= ======= ======= ======== ======== ======== ========= $ 2 $ (8) $ (5) $ (6) $ 172 $ 270 $ 1,723 $ 1,132 ======= ======= ======= ======= ======== ======== ======== ========= </Table> 145 HARTFORD HLS MUTUAL FUNDS STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD GLOBAL TECHNOLOGY HLS FUND --------------------------- FOR THE FOR THE YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, 2003 2002 ------------ ------------ OPERATIONS: Net investment income (loss).............................. $ (683) $ (608) Net realized gain (loss) on investments................... 22,300 (35,351) Net unrealized appreciation (depreciation) of investments............................................. 29,557 (9,018) -------- -------- Net increase (decrease) in net assets resulting from operations.............................................. 51,174 (44,977) -------- -------- DISTRIBUTIONS TO SHAREHOLDERS: From net investment income Class IA................................................ -- -- Class IB................................................ -- -- From net realized gain on investments Class IA................................................ -- -- Class IB................................................ -- -- From capital Class IA................................................ -- -- Class IB................................................ -- -- -------- -------- Total distributions..................................... -- -- -------- -------- CAPITAL SHARE TRANSACTIONS: Class IA................................................ 44,205 5,926 Class IB................................................ 19,091 4,470 -------- -------- Net increase (decrease) from capital share transactions... 63,296 10,396 -------- -------- Net increase (decrease) in net assets..................... 114,470 (34,581) NET ASSETS: Beginning of period....................................... 68,205 102,786 -------- -------- End of period............................................. $182,675 $ 68,205 ======== ======== Accumulated undistributed net investment income (loss)...... $ (7) $ -- ======== ======== </Table> (a) From inception April 30, 2002 through December 31, 2002. (b) Formerly, Fortis Growth Stock Series. The accompanying notes are an integral part of these financial statements. 146 - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD GROWTH HARTFORD GROWTH OPPORTUNITIES HARTFORD HIGH YIELD HLS FUND(A) HLS FUND(B) HLS FUND --------------------------- ----------------------------- --------------------------- FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2003 2002 2003 2002 2003 2002 ------------ ------------ ------------- ------------- ------------ ------------ $ (308) $ (4) $ (339) $ (942) $ 33,359 $ 18,692 9,553 (598) 84,859 (134,893) (15,627) (17,319) 20,336 (224) 131,440 (64,626) 76,811 (13,584) -------- ------- -------- --------- -------- -------- 29,581 (826) 215,960 (200,461) 94,543 (12,211) -------- ------- -------- --------- -------- -------- -- -- -- -- (13,145) (9,980) -- -- -- -- (5,706) (1,721) (3,693) -- -- -- -- -- (2,627) -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -------- ------- -------- --------- -------- -------- (6,320) -- -- -- (18,851) (11,701) -------- ------- -------- --------- -------- -------- 101,489 14,120 12,439 (76,597) 228,151 94,313 71,993 8,095 44,855 5,322 179,915 33,755 -------- ------- -------- --------- -------- -------- 173,482 22,215 57,294 (71,275) 408,066 128,068 -------- ------- -------- --------- -------- -------- 196,743 21,389 273,254 (271,736) 483,758 104,156 21,389 -- 483,332 755,068 257,101 152,945 -------- ------- -------- --------- -------- -------- $218,132 $21,389 $756,586 $ 483,332 $740,859 $257,101 ======== ======= ======== ========= ======== ======== $ 1 $ -- $ (12) $ (16) $ 35,327 $ 18,851 ======== ======= ======== ========= ======== ======== </Table> 147 HARTFORD HLS MUTUAL FUNDS STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD INDEX HLS FUND --------------------------------- FOR THE FOR THE YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, 2003 2002 ------------ ------------ OPERATIONS: Net investment income (loss).............................. $ 24,743 $ 21,815 Net realized gain (loss) on investments................... 6,294 2,513 Net unrealized appreciation (depreciation) on investments............................................. 425,312 (524,681) ---------- ---------- Net increase (decrease) in net assets resulting from operations.............................................. 456,349 (500,353) ---------- ---------- DISTRIBUTIONS TO SHAREHOLDERS: From net investment income Class IA................................................ (23,630) (19,562) Class IB................................................ (2,050) (725) From net realized gain on investments Class IA................................................ (5,282) (71,573) Class IB................................................ (445) (2,010) From capital Class IA................................................ -- -- Class IB................................................ -- -- ---------- ---------- Total distributions..................................... (31,407) (93,870) ---------- ---------- CAPITAL SHARE TRANSACTIONS: Class IA................................................ (12,663) 154,200 Class IB................................................ 96,019 39,698 ---------- ---------- Net increase (decrease) from capital share transactions... 83,356 193,898 ---------- ---------- Net increase (decrease) in net assets..................... 508,298 (400,325) NET ASSETS: Beginning of period....................................... 1,622,092 2,022,417 ---------- ---------- End of period............................................. $2,130,390 $1,622,092 ========== ========== Accumulated net investment income (loss).................... $ 1,722 $ 2,680 ========== ========== </Table> The accompanying notes are an integral part of these financial statements. 148 - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD INTERNATIONAL CAPITAL HARTFORD INTERNATIONAL OPPORTUNITIES HARTFORD INTERNATIONAL SMALL COMPANY APPRECIATION HLS FUND HLS FUND HLS FUND ------------------------------- ------------------------------------- ------------------------------------- FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2003 2002 2003 2002 2003 2002 -------------- -------------- ----------------- ----------------- ----------------- ----------------- $ 79 $ 128 $ 7,837 $ 10,309 $ 487 $ 30 16,460 (6,001) 32,105 (121,588) 8,497 (2,342) 13,652 1,100 186,648 (19,596) 8,696 (536) -------- ------- -------- --------- ------- ------- 30,191 (4,773) 226,590 (130,875) 17,680 (2,848) -------- ------- -------- --------- ------- ------- -- (75) (6,583) (15,535) (355) -- -- (28) (477) (431) (155) -- (3,123) -- -- -- (2,971) (44) (2,977) -- -- -- (1,530) (10) -- -- -- -- -- -- -- -- -- -- -- -- -------- ------- -------- --------- ------- ------- (6,100) (103) (7,060) (15,966) (5,011) (54) -------- ------- -------- --------- ------- ------- 32,483 14,504 (27,267) (151,869) 18,501 14,805 39,025 10,574 34,199 8,043 13,770 4,808 -------- ------- -------- --------- ------- ------- 71,508 25,078 6,932 (143,826) 32,271 19,613 -------- ------- -------- --------- ------- ------- 95,599 20,202 226,462 (290,667) 44,940 16,711 35,246 15,044 673,544 964,211 21,852 5,141 -------- ------- -------- --------- ------- ------- $130,845 $35,246 $900,006 $ 673,544 $66,792 $21,852 ======== ======= ======== ========= ======= ======= $ (14) $ -- $ 1,085 $ 1,082 $ 129 $ (1) ======== ======= ======== ========= ======= ======= </Table> 149 HARTFORD HLS MUTUAL FUNDS STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD MIDCAP HLS FUND --------------------------- FOR THE FOR THE YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, 2003 2002 ------------ ------------ OPERATIONS: Net investment income (loss).............................. $ 2,978 $ 1,269 Net realized gain (loss) on investments................... 59,455 (53,638) Net unrealized appreciation (depreciation) of investments............................................. 473,727 (217,398) ---------- ---------- Net increase (decrease) in net assets resulting from operations.............................................. 536,160 (269,767) ---------- ---------- DISTRIBUTIONS TO SHAREHOLDERS: From net investment income Class IA................................................ (4,016) (1,990) Class IB................................................ -- -- From net realized gain on investments Class IA................................................ -- -- Class IB................................................ -- -- From capital Class IA................................................ -- -- Class IB................................................ -- -- ---------- ---------- Total distributions..................................... (4,016) (1,990) ---------- ---------- CAPITAL SHARE TRANSACTIONS: Class IA................................................ 114,988 (169,584) Class IB................................................ 49,587 (11,769) ---------- ---------- Net increase (decrease) from capital share transactions... 164,575 (181,353) ---------- ---------- Net increase (decrease) in net assets..................... 696,719 (453,110) NET ASSETS: Beginning of period....................................... 1,429,601 1,882,711 ---------- ---------- End of period............................................. $2,126,320 $1,429,601 ========== ========== Accumulated undistributed net investment income (loss)...... $ 255 $ 1,214 ========== ========== </Table> The accompanying notes are an integral part of these financial statements. 150 - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD MIDCAP VALUE HARTFORD MONEY MARKET HARTFORD MORTGAGE SECURITIES HARTFORD SMALL COMPANY HLS FUND HLS FUND HLS FUND HLS FUND --------------------------- --------------------------- ----------------------------- --------------------------- FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2003 2002 2003 2002 2003 2002 2003 2002 ------------ ------------ ------------ ------------ ------------- ------------- ------------ ------------ $ 965 $ 830 $ 15,989 $ 32,127 $ 23,880 $ 23,767 $ (3,977) $ (2,276) 26,026 (12,227) -- 100 10,521 16,454 130,368 (144,424) 195,497 (44,674) -- -- (16,638) 6,769 205,031 (111,484) -------- -------- ---------- ---------- --------- -------- ---------- --------- 222,488 (56,071) 15,989 32,227 17,763 46,990 331,422 (258,184) -------- -------- ---------- ---------- --------- -------- ---------- --------- -- (598) (14,648) (29,732) (22,256) (18,984) -- -- -- (82) (1,341) (2,395) (5,427) -- -- -- -- -- -- (93) (3,447) -- -- -- -- -- -- (7) (863) (1,967) -- -- -- (87) -- -- -- -- -- -- -- (32) -- -- -- -- -- -- -------- -------- ---------- ---------- --------- -------- ---------- --------- -- (799) (15,989) (32,227) (31,993) (20,951) -- -- -------- -------- ---------- ---------- --------- -------- ---------- --------- 168,382 226,021 (710,017) 451,936 (128,449) 279,176 75,621 (15,821) 144,717 84,876 (20,984) 109,785 67,622 87,933 73,244 30,833 -------- -------- ---------- ---------- --------- -------- ---------- --------- 313,099 310,897 (731,001) 561,721 (60,827) 367,109 148,865 15,012 -------- -------- ---------- ---------- --------- -------- ---------- --------- 535,587 254,027 (731,001) 561,721 (75,057) 393,148 480,287 (243,172) 374,520 120,493 2,581,370 2,019,649 843,872 450,724 561,452 804,624 -------- -------- ---------- ---------- --------- -------- ---------- --------- $910,107 $374,520 $1,850,369 $2,581,370 $ 768,815 $843,872 $1,041,739 $ 561,452 ======== ======== ========== ========== ========= ======== ========== ========= $ 899 $ -- $ -- $ -- $ 34,310 $ 27,684 $ (1) $ (34) ======== ======== ========== ========== ========= ======== ========== ========= </Table> 151 HARTFORD HLS MUTUAL FUNDS STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD SMALLCAP GROWTH HLS FUND(A) ---------------------------- FOR THE FOR THE YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, 2003 2002 ------------ ------------ OPERATIONS: Net investment income (loss).............................. $ (114) $ (389) Net realized gain (loss) on investments................... 14,173 (14,819) Net unrealized appreciation (depreciation) of investments............................................. 100,265 (60,942) -------- -------- Net increase (decrease) in net assets resulting from operations.............................................. 114,324 (76,150) -------- -------- DISTRIBUTIONS TO SHAREHOLDERS: From net investment income Class IA................................................ -- -- Class IB................................................ -- -- From net realized gain on investments Class IA................................................ -- -- Class IB................................................ -- -- From capital Class IA................................................ -- -- Class IB................................................ -- -- -------- -------- Total distributions..................................... -- -- -------- -------- CAPITAL SHARE TRANSACTIONS: Class IA................................................ 62,355 (12,126) Class IB................................................ 53,081 7,216 -------- -------- Net increase (decrease) from capital share transactions... 115,436 (4,910) -------- -------- Net increase (decrease) in net assets..................... 229,760 (81,060) NET ASSETS: Beginning of period....................................... 191,212 272,272 -------- -------- End of period............................................. $420,972 $191,212 ======== ======== Accumulated undistributed net investment income (loss)...... $ (1) $ -- ======== ======== </Table> (a) Formerly, Fortis Aggressive Growth Series. (b) Formerly, Fortis U.S. Government Securities Series. (c) Formerly, Fortis Value Series. The accompanying notes are an integral part of these financial statements. 152 - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD U.S. GOVERNMENT HARTFORD VALUE OPPORTUNITIES HARTFORD STOCK HLS FUND SECURITIES HLS FUND(B) HARTFORD VALUE HLS FUND HLS FUND(C) --------------------------- --------------------------- --------------------------- ----------------------------- FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2003 2002 2003 2002 2003 2002 2003 2002 ------------ ------------ ------------ ------------ ------------ ------------ ------------- ------------- $ 66,286 $ 63,506 $ 21,796 $ 12,567 $ 2,331 $ 1,039 $ 733 $ 633 (507,433) (235,322) 3,901 10,899 (1,710) (9,220) 3,029 (19,505) 1,817,955 (1,765,512) (10,969) 11,474 45,211 (14,986) 42,752 (13,227) ---------- ----------- -------- -------- -------- -------- -------- -------- 1,376,808 (1,937,328) 14,728 34,940 45,832 (23,167) 46,514 (32,099) ---------- ----------- -------- -------- -------- -------- -------- -------- (64,140) (58,646) (9,841) (8,732) (1,037) (729) (550) (821) (4,863) (2,766) (3,220) -- (563) (303) (68) -- -- -- -- -- -- -- -- (2,397) -- -- -- -- -- -- -- -- -- -- -- -- -- (6) -- -- -- -- -- -- -- (3) -- -- ---------- ----------- -------- -------- -------- -------- -------- -------- (69,003) (61,412) (13,061) (8,732) (1,600) (1,041) (618) (3,218) ---------- ----------- -------- -------- -------- -------- -------- -------- (290,019) (823,856) (78,702) 392,496 58,458 46,828 28,203 (6,486) 168,825 107,521 138,808 98,456 48,826 28,063 23,399 3,189 ---------- ----------- -------- -------- -------- -------- -------- -------- (121,194) (716,335) 60,106 490,952 107,284 74,891 51,602 (3,297) ---------- ----------- -------- -------- -------- -------- -------- -------- 1,186,611 (2,715,075) 61,773 517,160 151,516 50,683 97,498 (38,614) 5,391,043 8,106,118 691,493 174,333 103,394 52,711 91,953 130,567 ---------- ----------- -------- -------- -------- -------- -------- -------- $6,577,654 $ 5,391,043 $753,266 $691,493 $254,910 $103,394 $189,451 $ 91,953 ========== =========== ======== ======== ======== ======== ======== ======== $ 2,302 $ 5,503 $ 26,837 $ 13,061 $ 731 $ -- $ 726 $ 618 ========== =========== ======== ======== ======== ======== ======== ======== </Table> 153 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- 1. ORGANIZATION: The Hartford HLS Mutual Funds serve as the underlying investment vehicles for certain variable annuity and variable life insurance separate accounts and group pension contracts of Hartford Life Insurance Company and Hartford Life and Annuity Insurance Company (collectively, The Hartford Life Insurance Companies), as well as certain qualified retirement plans. The Hartford Life Insurance Companies are affiliates of the Funds. The Funds are stated below. Hartford Series Fund, Inc. (comprised of twenty-six portfolios; they are Hartford Advisers HLS Fund, Hartford Bond HLS Fund, Hartford Capital Appreciation HLS Fund, Hartford Disciplined Equity HLS Fund (formerly, Hartford Growth and Income HLS Fund), Hartford Dividend and Growth HLS Fund, Hartford Equity Income HLS Fund, Hartford Focus HLS Fund, Hartford Global Advisers HLS Fund, Hartford Global Communications HLS Fund, Hartford Global Financial Services HLS Fund, Hartford Global Health HLS Fund, Hartford Global Leaders HLS Fund, Hartford Global Technology HLS Fund, Hartford Growth HLS Fund, Hartford High Yield HLS Fund, Hartford Index HLS Fund, Hartford International Capital Appreciation HLS Fund, Hartford International Opportunities HLS Fund, Hartford International Small Company HLS Fund, Hartford MidCap HLS Fund, Hartford MidCap Value HLS Fund, Hartford Money Market HLS Fund, Hartford Mortgage Securities HLS Fund, Hartford Small Company HLS Fund, Hartford Stock HLS Fund and Hartford Value HLS Fund) and Hartford HLS Series Fund II, Inc. (comprised of eleven portfolios, four are included in these financial statements; they are Hartford Growth Opportunities HLS Fund, Hartford SmallCap Growth HLS Fund, Hartford U.S. Government Securities HLS Fund and Hartford Value Opportunities HLS Fund). Each "Fund" or together the "Funds" are organized under the laws of the State of Maryland and are registered with the Securities and Exchange Commission (SEC) under the Investment Company Act of 1940, as amended, as diversified open-end management investment companies, except for Hartford Focus HLS Fund, Hartford Global Communications HLS Fund, Hartford Global Financial Services HLS Fund, Hartford Global Health HLS Fund and Hartford Global Technology HLS Fund which are non-diversified. Each Fund is divided into Class IA and IB shares. Each class is offered at net asset value without a sales charge and is subject to the same expenses except that the Class IB shares are subject to distribution fees charged pursuant to a Rule 12b-1 plan. Distribution and Service Plans have been adopted in accordance with Rule 12b-1 of the Investment Company Act of 1940, as amended. Income and expenses, realized and unrealized capital gains and losses are allocated to each class of a Fund based on the ratio of the prior day's net assets. 2. SIGNIFICANT ACCOUNTING POLICIES: The following is a summary of significant accounting policies of the Funds, which are in accordance with generally accepted accounting principles in the investment company industry: a) Security Transactions -- Security transactions are recorded on the trade date (date the order to buy or sell is executed). Security gains and losses are determined on the basis of identified cost. b) Security Valuation and Investment Income -- Equity securities are valued at the last sales price reported on the principal securities exchange on which such securities are traded (domestic or foreign) or on the principal over-the-counter market on which such securities are traded, as of the close of business on the day the securities are being valued. If no sale took place on a particular day, then such securities are valued at the mean between the bid and asked prices. For securities traded on the NASDAQ national market system, the Funds utilize the NASDAQ Official Closing Price which compares the last trade to the bid/ask range of a security. If the last trade falls within the bid/ask range, then that price will be the closing price. If the last trade is outside the bid/ask range, and falls above the ask, the ask will be the closing price. If the last price is below the bid, the bid will be the closing price. The difference between cost and market value for debt and equity securities is recorded in the Statement of Operations and accumulated in net assets. Debt securities (other than short-term obligations) are valued on the basis of valuations furnished by an unaffiliated pricing service, which determines valuations for normal institutional size trading units of debt securities. Mortgage securities are valued at the bid price. Short-term securities held in the Money Market Fund are valued at amortized cost or original cost plus accrued interest receivable, both of which approximate market value. In the remaining 154 - -------------------------------------------------------------------------------- Funds, short-term investments with maturity of 60 days or less when purchased are valued at amortized cost, which approximates market value. Short-term investments purchased with a maturity of more than 60 days when purchased are valued based on market quotations until the remaining days to maturity becomes less than 61 days. From such time until maturity, the investments are valued at amortized cost. The funds use market prices in valuing portfolio securities, but may use fair value estimates, under procedures established by the Board of Directors, if reliable market prices are unavailable. Fair value pricing may be used by a fund when current market values are unavailable or when an event occurs after the close of the exchange on which the fund's portfolio securities are principally traded that is likely to have changed the value of the securities. The Funds are supplied with information from an unaffiliated third party with respect to the fair value of foreign securities. Price movements in futures contracts and ADRs, and various other indices, may be reviewed in the course of making a good faith determination of a security's fair value. The use of fair value pricing by a fund may cause the net asset value of its shares to differ significantly from the net asset value that would be calculated using current market values. Securities of foreign issuers and non-dollar securities are valued on the basis of quotations from the primary market in which they are traded, and are translated from the local currency into U.S. dollars using current exchange rates. Options are valued at the last sales price. If no sale took place on such day, then options are valued at the mean between the bid and asked prices. Securities for which prices are not available from an independent pricing service, but where an active market exists, are valued using market quotations obtained from one or more dealers that make markets in the securities or from an approved quotation system. Investment income such as dividend income is recorded on the ex-dividend date. Interest income, including amortization of bond premium and discount, is recorded on the accrual basis. c) Foreign Currency Transactions -- The accounting records of the Funds are maintained in U.S. dollars. All assets and liabilities initially expressed in foreign currencies are converted into U.S. dollars at prevailing exchange rates. Purchases and sales of investment securities, dividend and interest income and certain expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. The Funds do not isolate that portion of portfolio security valuation resulting from fluctuations in foreign currency exchange rates on portfolio securities from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments in the accompanying financial statements. Net realized foreign exchange gains or losses arise from sales of foreign currencies and the difference between asset and liability amounts initially stated in foreign currencies and the U.S. dollar value of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of other assets and liabilities at the end of the reporting period, resulting from changes in the exchange rates. d) Repurchase Agreements -- A repurchase agreement is an agreement by which the seller of a security agrees to repurchase the security sold at a mutually agreed upon time and price. At the time the Funds enter into a repurchase agreement, the value of the underlying collateral security (ies), including accrued interest, will be equal to or exceed the value of the repurchase agreement. Securities which serve to collateralize the repurchase agreement are held by each Fund's custodian in book entry or physical form in the custodial account of the Fund. Repurchase agreements are valued at cost plus accrued interest receivable. All repurchase agreements are handled through the Funds' custodian, State Street Bank and Trust Company. Certain Funds, together with other investment management companies having investment advisory agreements with Wellington Management Company, LLP ("Wellington") have interests in a joint repurchase agreement dated 12/31/03 each maturing 01/02/04 with the following brokers: $190,380 BNP Paribas Securities, 0.82%; $435,000 ABN Amro, 0.82%; and $1,070,000 UBS Securities, 0.84%. These joint repurchase agreements are collateralized by 155 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- $1,325,076 U.S. Treasury Bonds 3.375% - 12.750% due 11/15/10 - 04/15/32 and $410,208 U.S. Treasury Notes 1.625% - 4.250% due 12/31/04 - 01/15/10. The maturity amounts are as follows: <Table> <Caption> MATURITY FUND AMOUNT ---- -------- Hartford Advisers HLS Fund.................................. $ 46,937 Hartford Capital Appreciation HLS Fund...................... 341,255 Hartford Disciplined Equity HLS Fund........................ 37,853 Hartford Dividend and Growth HLS Fund....................... 210,173 Hartford Equity Income HLS Fund............................. 696 Hartford Focus HLS Fund..................................... 484 Hartford Global Advisers HLS Fund........................... 39,683 Hartford Global Communications HLS Fund..................... 1,738 Hartford Global Financial Services HLS Fund................. 1,536 Hartford Global Health HLS Fund............................. 13,601 Hartford Global Leaders HLS Fund............................ 32,221 Hartford Global Technology HLS Fund......................... 1,484 Hartford Growth HLS Fund.................................... 6,188 Hartford Growth Opportunities HLS Fund...................... 31,538 Hartford International Capital Appreciation HLS Fund........ 7,705 Hartford International Opportunities HLS Fund............... 16,633 Hartford International Small Company HLS Fund............... 3,789 Hartford MidCap HLS Fund.................................... 13,538 Hartford MidCap Value HLS Fund.............................. 43,553 Hartford Small Company HLS Fund............................. 38,586 Hartford SmallCap Growth HLS Fund........................... 46,357 Hartford Stock HLS Fund..................................... 24,813 Hartford Value HLS Fund..................................... 1,348 Hartford Value Opportunities HLS Fund....................... 4,985 </Table> Certain Funds, together with other investment management companies having investment advisory agreements with The Hartford Investment Management Company (Hartford Investment Management), a wholly owned subsidiary of The Hartford Financial Services Group, Inc., (The Hartford), have interests in a joint repurchase agreement dated 12/31/04 each maturing 01/02/04 with the following brokers: $180,326 UBS Warburg, 0.84%; and $150,000 RBS Greenwich Capital Markets, 0.84%. These joint repurchase agreements are collateralized by $336,910 U.S. Treasury Bonds 6.250% - 13.250% due 11/15/09 - 05/15/30. The maturity amounts are as follows: <Table> <Caption> MATURITY FUND AMOUNT ---- -------- Hartford Bond HLS Fund...................................... $82,933 Hartford High Yield HLS Fund................................ 63,088 Hartford Index HLS Fund..................................... 22,861 Hartford Money Market HLS Fund.............................. 61,341 Hartford Mortgage Securities HLS Fund....................... 27,540 Hartford U.S. Government Securities HLS Fund................ 25,565 </Table> e) Joint Trading Account -- Pursuant to an exemptive order issued by the SEC, the Funds may transfer uninvested cash balances into a joint trading account managed by Hartford Investment Management or Wellington. These balances may be invested in one or more repurchase agreements and/or short-term money market instruments. As of December 31, 2003 there are no joint trading accounts. 156 - -------------------------------------------------------------------------------- f) Futures, Options on Futures and Options Transactions -- Certain Funds may invest in futures contracts and options contracts in order to gain exposure to or protect against changes in the market. A futures contract is an agreement between two parties to buy and sell a security at a set price on a future date. When the Funds enter into such contracts, they are required to deposit with their custodian an amount of "initial margin" of cash, commercial paper or U.S. Treasury Bills. Subsequent payments, called maintenance margin, to and from the broker, are made on a daily basis as the price of the underlying security fluctuates, making the long and short positions in the futures contract more or less valuable (i.e., mark-to-market), which results in an unrealized gain or loss to the Funds. The market value of a traded futures contract is the last sale price. In the absence of a last sale price, the last offering price is used. In the absence of either of these prices, fair value is determined according to procedures established by the Funds' Board of Directors. At any time prior to expiration of the futures contract, the Funds may close the position by taking an opposite position, which would operate to terminate the position in the futures contract. A final determination of maintenance margin is then made, additional cash is required to be paid by or released to the Funds and the Funds realize a gain or loss. The use of futures contracts involve elements of market risk, which may exceed the amounts recognized in the Statements of Assets and Liabilities. Change in the value of the futures contracts may decrease the effectiveness of a Fund's strategies and potentially result in loss. The premium paid by a Fund for the purchase of a call or put option is included in the Fund's Statement of Assets and Liabilities as an investment and subsequently "marked-to-market" through net unrealized appreciation (depreciation) of options to reflect the current market value of the option as of the end of the reporting period. If a purchased option expires on its stipulated expiration date, the Fund realizes a loss in the amount of the cost of the option. If the Fund exercises a put option, it realizes a gain or loss from the sale of the underlying security and the proceeds from such sale will be decreased by the premium originally paid. If the Fund exercises a call option, the cost of the security, which the Fund purchases upon exercise, will be increased by the premium originally paid to buy the call. The Funds may write covered options. "Covered" means that so long as a Fund is obligated as the writer of an option, it will own either the underlying securities or currency or the option to purchase or sell the same underlying securities or currency having the expiration date of the covered option and an exercise price equal to or less than the exercise price of the covered option, or will establish or maintain with its custodian for the term of the option a "segregated account" consisting of cash or other liquid securities having a value equal to the fluctuating market value of the option securities or currencies. A Fund receives a premium for writing a call or put option, recorded as a component of other liabilities on the Statements of Assets and Liabilities, which increases the Funds' return, recorded as a realized gain, if the option expires unexercised or is closed out at a net profit. Any loss realized from the covered option is offset by the gain realized on the sale of the underlying securities or currency. Covered options, at times before exercise or close out, are marked-to-market through net unrealized appreciation (depreciation) of options. There is a risk of loss from a change in value of such options, which may exceed the related premiums received. 157 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- The following Funds' had written option activity during the year ended December 31, 2003: <Table> <Caption> HARTFORD BOND HLS FUND OPTION CONTRACTS ACTIVITY DURING THE PERIOD ---------------------------------- PREMIUM REALIZED CALLS WRITTEN SHARES AMOUNTS GAIN/(LOSS) ------------- ------ ------- ----------- Beginning of the period..................................... -- $ -- $ -- Written during the period................................... 4 291 -- Expired during the period................................... (4) (291) 291 Closed during the period.................................... -- -- -- Exercised during the period................................. -- -- -- ---- ----- ---- Balance at the end of the period............................ -- $ -- $291 ==== ===== ==== <Caption> PUTS WRITTEN ------------ Beginning of the period..................................... -- $ -- $ -- Written during the period................................... 4 600 -- Expired during the period................................... (4) (600) 600 Closed during the period.................................... -- -- -- Exercised during the period................................. -- -- -- ---- ----- ---- Balance at the end of the period............................ -- $ -- $600 ==== ===== ==== </Table> <Table> <Caption> HARTFORD GLOBAL ADVISERS HLS FUND OPTION CONTRACTS ACTIVITY DURING THE PERIOD ---------------------------------- PREMIUM REALIZED PUTS WRITTEN SHARES AMOUNTS GAIN/(LOSS) ------------ ------ ------- ----------- Beginning of the period..................................... -- $ -- $ -- Written during the period................................... 15,115 136 -- Expired during the period................................... 2,840 (39) 39 Closed during the period.................................... 4,190 (65) (46) Exercised during the period................................. -- -- -- ------ ---- ---- Balance at the end of the period............................ 8,085 $ 32 $ (7) ====== ==== ==== </Table> g) Forward Foreign Currency Contracts -- As of December 31, 2003, Hartford Bond HLS Fund, Hartford Capital Appreciation HLS Fund, Hartford Global Advisers HLS Fund, Hartford Global Financial Services HLS Fund, Hartford Global Health HLS Fund, Hartford Global Leaders HLS Fund, Hartford Global Technology HLS Fund, Hartford Growth Opportunities HLS Fund, Hartford International Capital Appreciation HLS Fund, Hartford International Opportunities HLS Fund, Hartford International Small Company HLS Fund, Hartford MidCap HLS Fund, Hartford MidCap Value HLS Fund, and Hartford Value Opportunities HLS Fund entered into forward foreign currency exchange contracts that obligate the Funds to repurchase/replace or sell currencies at specified future dates. The Funds enter into forward foreign currency contracts to hedge against adverse fluctuations in exchange rates between currencies. Forward contracts involve elements of market risk in excess of the amount reflected in the Statements of Assets and Liabilities. In addition, risks may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of the contract and from unanticipated movement in the value of foreign currencies relative to the U.S. dollar. h) Indexed Securities -- The Funds may invest in indexed securities whose values are linked to changes in interest rates, indices, or other underlying instruments. The Funds use these securities to increase or decrease their exposure to different underlying instruments and to gain exposure to markets that might be difficult to invest in through conventional securities. Indexed securities are shown at market value in the Statement of Net Assets, if applicable. 158 - -------------------------------------------------------------------------------- Indexed securities may be more volatile than their underlying instruments, but any loss is limited to the amount of the original investment and there is a limit to the potential appreciation of the investment. i) Securities Lending -- The Funds, except for the Hartford Money Market HLS Fund, may lend their securities to certain qualified brokers who pay these Funds negotiated lender fees. The loans are collateralized at all times with cash with a market value at least equal to the market value of the securities on loan. As with other extensions of credit, these Funds may bear the risk of delay in recovery of the loaned securities or even loss of rights in the collateral should the borrower of the securities fail financially. As of December 31, 2003, the market value of the securities loaned and the market value of the collateral were as follows: <Table> <Caption> MARKET VALUE MARKET VALUE FUND OF SECURITIES LOANED OF COLLATERAL ---- -------------------- ------------- Hartford Advisers HLS Fund.................................. $1,587,694 $1,620,168 Hartford Bond HLS Fund...................................... 735,598 750,359 Hartford Capital Appreciation HLS Fund...................... 478,374 496,519 Hartford Dividend and Growth HLS Fund....................... 156,503 159,683 Hartford Global Advisers HLS Fund........................... 12,413 12,949 Hartford Global Communications HLS Fund..................... 3,479 3,570 Hartford Global Financial Services HLS Fund................. 2,111 2,227 Hartford Global Health HLS Fund............................. 63,120 64,931 Hartford Global Leaders HLS Fund............................ 58,863 61,510 Hartford Global Technology HLS Fund......................... 14,843 15,301 Hartford Growth Opportunities HLS Fund...................... 31,563 32,513 Hartford High Yield HLS Fund................................ 80,201 81,868 Hartford Index HLS Fund..................................... 8,575 8,871 Hartford International Capital Appreciation HLS Fund........ 21,278 22,674 Hartford International Opportunities HLS Fund............... 85,210 89,576 Hartford International Small Company HLS Fund............... 5,371 5,652 Hartford MidCap HLS Fund.................................... 142,566 146,112 Hartford MidCap Value HLS Fund.............................. 58,794 60,472 Hartford Small Company HLS Fund............................. 73,502 76,071 Hartford SmallCap Growth HLS Fund........................... 24,218 25,715 Hartford Stock HLS Fund..................................... 32,628 33,265 Hartford U.S. Government Securities HLS Fund................ 155,229 158,397 Hartford Value HLS Fund..................................... 2,143 2,178 Hartford Value Opportunities HLS Fund....................... 5,817 6,053 </Table> j) Federal Income Taxes -- For federal income tax purposes, the Funds intend to continue to qualify as regulated investment companies under Subchapter M of the Internal Revenue Code by distributing substantially all of their taxable net investment income and net realized capital gains to their shareholders or otherwise complying with the requirements of regulated investment companies. Accordingly, no provision for federal income taxes has been made in the accompanying financial statements. k) Fund Share Valuation and Distributions to Shareholders -- Orders for the Funds' shares are executed in accordance with the investment instructions of the contract holders. Dividend income is accrued as of the ex-dividend date, except that certain dividends for foreign securities where the ex-dividend date may have passed, are recorded as soon as the Fund is informed of the ex-dividend date in the exercise of due diligence. Interest income and expenses are accrued on a daily basis. The net asset value of each Fund's shares is determined as of the close of each business day of the New York Stock Exchange (the Exchange). Orders for the purchase of a Fund's shares received prior to the close of the Exchange on any day on which the Fund is open for business are priced at the per-share net asset value determined as 159 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- of the close of the Exchange. Orders received after the close of the Exchange, or on a day on which the Exchange and/or the Fund is not open for business, are priced at the next determined per-share net asset value. Dividends are declared by the Funds' Board of Directors based upon the investment performance of the respective Funds. The policy of all Funds, except the Hartford Money Market HLS Fund, is to pay dividends from net investment income and distribute realized capital gains, if any, at least once a year. Hartford Money Market HLS Fund seeks to maintain a stable net asset value per share of $1.00 by declaring a daily dividend from net investment income, including net short-term capital gains and losses, and by valuing its investments using the amortized cost method. Dividends are declared daily and distributed monthly. Distributions from net investment income, realized capital gains and capital are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States. These differences include the treatment of non-taxable dividends, expiring capital loss carryforwards, foreign currency gains and losses, partnerships, and losses deferred due to wash sales and excise tax regulations. Permanent book and tax basis differences relating to shareholder distributions result in reclassifications to capital accounts (see Note 6). l) Use of Estimates -- The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of income and expenses during the period. Operating results in the future could vary from the amounts derived from management's estimates. m) Illiquid Securities and Other Investments -- Each HLS Fund is permitted to invest in illiquid securities or other investments. An HLS Fund will not, however, acquire illiquid securities or investments if 15% of its net assets (10% for the Money Market HLS Fund) would consist of such securities or other investments. "Illiquid" securities or investments are those that cannot be sold or disposed of in the ordinary course of business within seven days at approximately the same price used to determine a HLS Fund's net asset value. A HLS Fund may not be able to sell illiquid securities or other investments when their sub-advisor considers it desirable to do so or may have to sell such securities or investments at a price that is lower than the price that could be obtained if the securities or investments were more liquid. A sale of illiquid securities or other investments may require more time and may result in higher dealer discounts and other selling expenses than does the sale of those that are liquid. Illiquid securities and investments also may be more difficult to value do to the unavailability of reliable market quotations for such securities or investments, and investment in them may have an adverse impact on net asset value. Each HLS Fund may purchase certain restricted securities (known as 144A securities) that can be resold to institutions and which may be determined to be liquid pursuant to policies and guidelines of the Board of Directors. Under current interpretations of the SEC staff, the following types of securities are considered illiquid: (1) repurchase agreements maturing in more than seven days; (2) certain restricted securities (securities whose public resale is subject to legal or contractual restrictions); (3) options, with respect to specific securities, not traded on a national securities exchange that are not readily marketable; and (4) any other securities or investments that are not readily marketable. The following represents restricted securities of the Funds as of December 31, 2003: <Table> <Caption> ACQUISITION COST PERCENTAGE OF ACQUISITION FUND'S NET MARKET FUND SECURITY ACQUISITION DATE(S) COST ASSETS VALUE ---- -------- ------------------- ----------- ------------- ------- 144A SECURITIES Hartford Advisers HLS Fund Prudential Insurance Co. 7/16/98 $ 1,244 --% $ 1,362 of America Hartford Advisers HLS Fund ERAC USA Finance Co. 6/5/01 16,328 0.1 18,686 Hartford Advisers HLS Fund New England Mutual Life 10/23/98, 11/2/98 32,223 0.3 34,843 Insurance Co. Hartford Advisers HLS Fund Jackson National Life 11/4/98, 11/5/98 29,563 0.3 31,636 Insurance Co. Hartford Advisers HLS Fund AESOP Funding II LLC, 2/19/98, 4/9/98, 5/25/99 42,834 0.4 45,152 Series 1998-1, Class A <Caption> MARKET VALUE PERCENTAGE OF FUND'S NET FUND ASSETS ---- ------------- Hartford Advisers HLS Fund --% Hartford Advisers HLS Fund 0.2 Hartford Advisers HLS Fund 0.3 Hartford Advisers HLS Fund 0.3 Hartford Advisers HLS Fund 0.4 </Table> 160 - -------------------------------------------------------------------------------- <Table> <Caption> ACQUISITION COST PERCENTAGE OF ACQUISITION FUND'S NET MARKET FUND SECURITY ACQUISITION DATE(S) COST ASSETS VALUE ---- -------- ------------------- ----------- ------------- ------- Hartford Advisers HLS Fund Liberty Mutual Insurance 9/9/98, 9/10/98 $31,849 0.3% $32,863 Hartford Advisers HLS Fund SCL Terminal Aereo 12/17/98 17,630 0.2 19,149 Santiago SA Hartford Bond HLS Fund Xerox Corp. 11/20/01 2,670 0.1 4,259 Hartford Bond HLS Fund ERAC USA Finance Co. 4/5/02 2,962 0.1 3,112 Hartford Bond HLS Fund AT&T Corp. 7/30/02 1,354 -- 1,987 Hartford Bond HLS Fund COX Enterprises, Inc. 4/3/03 3,098 0.1 3,198 Hartford Bond HLS Fund Northwestern Corp. 4/9/03 4,150 0.1 4,249 Hartford Bond HLS Fund Whole Auto Loan Trust, 5/2/03 2,949 0.1 2,964 Series 2002-1, Class D Hartford Bond HLS Fund International Transmission 7/1/03 3,947 0.1 3,813 Co. Hartford Bond HLS Fund Fondo Latino Americano De 7/17/03 5,547 0.2 5,515 Reservas Hartford Bond HLS Fund AQ Finance CEB Trust, 7/24/03 2,457 0.1 2,457 Series 2003-CE1A, Class Note Hartford Bond HLS Fund Prudential Insurance Co. 8/4/03 3,807 0.1 3,813 of America Hartford Bond HLS Fund Echostar DBS Corp. 9/18/03 5,200 0.2 5,259 Hartford Bond HLS Fund Placer Dome, Inc. 10/7/03 4,185 0.1 4,296 Hartford Bond HLS Fund Rabobank Capital Fund II 11/14/03 11,300 0.4 11,316 Hartford Bond HLS Fund Hutchison Whampoa 11/19/03 10,489 0.3 10,662 International Ltd Hartford Bond HLS Fund Hutchison Whampoa 11/19/03 15,415 0.5 16,092 International Ltd. Hartford Bond HLS Fund Rhodia S.A. 5/20/03, 5/21/03 4,391 0.1 4,020 Hartford Bond HLS Fund Texas-New Mexico Power Co. 6/5/03 4,132 0.1 4,176 Hartford Capital CONSOL Energy, Inc., PIPE 10/2/03 61,762 0.6 78,585 Appreciation HLS Fund Hartford Capital Spirit Finance Corp. 12/11/03 21,857 0.2 21,857 Appreciation HLS Fund Hartford Global Advisers GS Mortgage Securities 2/17/00 298 0.1 298 HLS Fund Corp. II, Series 2000-GSFL, Class A Hartford Global Advisers Southern Capital Corp. 6/20/02 178 0.1 185 HLS Fund Hartford Global Advisers Anthem Insurance Cos., 5/6/03 298 0.1 306 HLS Fund Inc. Hartford Global Advisers Inversiones CMPC S.A. 6/11/03 130 -- 125 HLS Fund Hartford Global Advisers Florida Windstorm 3/1/02, 3/5/03, 6/11/03 410 0.1 441 HLS Fund Underwriting Association Hartford Global Advisers RMAC, Series 2003-NS2A, 6/18/03, 7/16/03 538 0.2 538 HLS Fund Class A1B Hartford Global Advisers Austria Government Bond 1/9/02 1,186 0.3 1,784 HLS Fund Hartford Global Mobistar S.A. 2/28/03 962 3.5 1,576 Communications HLS Fund Hartford Global Telekom Austria AG 12/13/01, 12/21/01, 848 3.1 1,178 Communications HLS Fund 9/5/02, 10/4/02, 11/5/02, 6/5/03, 9/17/03 Hartford Global Telenor ASA 7/1/03, 8/20/03, 9/17/03, 1,675 6.1 2,510 Communications HLS Fund 9/26/03 Hartford Global Leaders Samsung Electronics Co., 7/16/03, 10/1/03 5,248 0.6 5,636 HLS Fund Ltd., GDR <Caption> MARKET VALUE PERCENTAGE OF FUND'S NET FUND ASSETS ---- ------------- Hartford Advisers HLS Fund 0.3% Hartford Advisers HLS Fund 0.1 Hartford Bond HLS Fund 0.1 Hartford Bond HLS Fund 0.1 Hartford Bond HLS Fund 0.1 Hartford Bond HLS Fund 0.1 Hartford Bond HLS Fund 0.2 Hartford Bond HLS Fund 0.1 Hartford Bond HLS Fund 0.1 Hartford Bond HLS Fund 0.2 Hartford Bond HLS Fund 0.1 Hartford Bond HLS Fund 0.1 Hartford Bond HLS Fund 0.2 Hartford Bond HLS Fund 0.1 Hartford Bond HLS Fund 0.4 Hartford Bond HLS Fund 0.4 Hartford Bond HLS Fund 0.5 Hartford Bond HLS Fund 0.1 Hartford Bond HLS Fund 0.1 Hartford Capital 0.8 Appreciation HLS Fund Hartford Capital 0.2 Appreciation HLS Fund Hartford Global Advisers 0.1 HLS Fund Hartford Global Advisers 0.1 HLS Fund Hartford Global Advisers 0.1 HLS Fund Hartford Global Advisers -- HLS Fund Hartford Global Advisers 0.1 HLS Fund Hartford Global Advisers 0.1 HLS Fund Hartford Global Advisers 0.5 HLS Fund Hartford Global 5.7 Communications HLS Fund Hartford Global 4.3 Communications HLS Fund Hartford Global 9.1 Communications HLS Fund Hartford Global Leaders 0.7 HLS Fund </Table> 161 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> ACQUISITION COST PERCENTAGE OF ACQUISITION FUND'S NET MARKET FUND SECURITY ACQUISITION DATE(S) COST ASSETS VALUE ---- -------- ------------------- ----------- ------------- ------- Hartford Global Technology Quanta Computer, Inc., GDR 11/21/03 $ 1,380 0.8% $ 1,444 HLS Fund Hartford High Yield HLS Hosiery Corp. 10/7/94 4 -- @@ -- Fund Hartford High Yield HLS Powertel, Inc. 1/27/97 19 -- 76 Fund Hartford High Yield HLS Xerox Corp. 11/20/01 195 -- 311 Fund Hartford High Yield HLS Donnelley (RH) Finance 11/26/02 520 0.1 585 Fund Corp. Hartford High Yield HLS Moore North America 3/11/03 819 0.1 934 Fund Finance, Inc. Hartford High Yield HLS Westport Resources Corp. 3/27/03 208 -- 220 Fund Hartford High Yield HLS AES Corp. (The) 5/1/03 5,408 0.7 5,900 Fund Hartford High Yield HLS PRIMEDIA, Inc. 5/8/03 1,300 0.2 1,326 Fund Hartford High Yield HLS Medex, Inc. 5/14/03 695 0.1 747 Fund Hartford High Yield HLS Warnaco, Inc. 6/5/03 690 0.1 711 Fund Hartford High Yield HLS Dana Credit Corp. 6/11/03 1,416 0.2 1,505 Fund Hartford High Yield HLS PG&E Corp. 6/27/03 1,455 0.2 1,575 Fund Hartford High Yield HLS CMS Energy Corp. 7/9/03 1,164 0.2 1,240 Fund Hartford High Yield HLS Calpine Corp. 7/10/03 2,635 0.4 2,569 Fund Hartford High Yield HLS Wabtec Corp. 7/23/03 605 0.1 627 Fund Hartford High Yield HLS Dynegy Holdings, Inc. 8/1/03 3,852 0.5 4,301 Fund Hartford High Yield HLS Southern Star Central 8/1/03 1,395 0.2 1,541 Fund Corp. Hartford High Yield HLS Nevada Power Co. 8/13/03 440 0.1 487 Fund Hartford High Yield HLS Dex Media, Inc. 8/15/03 1,790 0.2 2,081 Fund Hartford High Yield HLS Perry Ellis International, 9/15/03 4,079 0.6 4,247 Fund Inc. Hartford High Yield HLS EchoStar DBS Corp. 9/18/03 2,875 0.4 2,907 Fund Hartford High Yield HLS Level 3 Communications, 9/26/03 1,300 0.2 1,375 Fund Inc Hartford High Yield HLS Scotts Co. (The) 10/1/03 1,335 0.2 1,372 Fund Hartford High Yield HLS Capital One Financial 10/15/03 1,240 0.2 1,242 Fund Corp. Hartford High Yield HLS DRS Technologies, Inc. 10/16/03 1,420 0.2 1,459 Fund Hartford High Yield HLS Host Marriott LP 10/27/03 1,286 0.2 1,321 Fund Hartford High Yield HLS United Rentals, Inc. 10/28/03 2,250 0.3 2,298 Fund <Caption> MARKET VALUE PERCENTAGE OF FUND'S NET FUND ASSETS ---- ------------- Hartford Global Technology 0.8% HLS Fund Hartford High Yield HLS -- Fund Hartford High Yield HLS -- Fund Hartford High Yield HLS -- Fund Hartford High Yield HLS 0.1 Fund Hartford High Yield HLS 0.1 Fund Hartford High Yield HLS -- Fund Hartford High Yield HLS 0.8 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.1 Fund Hartford High Yield HLS 0.1 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.3 Fund Hartford High Yield HLS 0.1 Fund Hartford High Yield HLS 0.6 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.1 Fund Hartford High Yield HLS 0.3 Fund Hartford High Yield HLS 0.6 Fund Hartford High Yield HLS 0.4 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.1 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.3 Fund </Table> 162 - -------------------------------------------------------------------------------- <Table> <Caption> ACQUISITION COST PERCENTAGE OF ACQUISITION FUND'S NET MARKET FUND SECURITY ACQUISITION DATE(S) COST ASSETS VALUE ---- -------- ------------------- ----------- ------------- ------- Hartford High Yield HLS Nalco Chemical Co. 10/29/03 $ 3,185 0.4% $ 3,376 Fund Hartford High Yield HLS Cincinnati Bell, Inc. 10/31/03 2,350 0.3 2,526 Fund Hartford High Yield HLS Pilgrim's Pride Corp. 11/6/03 315 -- 326 Fund Hartford High Yield HLS Terex Corp. 11/10/03 3,935 0.5 4,059 Fund Hartford High Yield HLS Chesapeake Energy Corp. 11/12/03 1,326 0.2 1,380 Fund Hartford High Yield HLS Poster Financial Group, 11/18/03 675 0.1 714 Fund Inc. Hartford High Yield HLS Medianews Group, Inc. 11/20/03 1,338 0.2 1,374 Fund Hartford High Yield HLS General Nutrition Centers 11/25/03 935 0.1 958 Fund Hartford High Yield HLS Georgia-Pacific Corp. 12/4/03 2,250 0.3 2,295 Fund Hartford High Yield HLS Couche-Tard Finance Corp. 12/11/03 700 0.1 733 Fund Hartford High Yield HLS Sensus Metering Systems 12/11/03 630 0.1 647 Fund Hartford High Yield HLS United Agri Products 12/11/03 400 0.1 411 Fund Hartford High Yield HLS Bombardier Recreational 12/11/03 945 0.1 988 Fund Hartford High Yield HLS Mariner Health Care, Inc. 12/12/03 1,415 0.2 1,429 Fund Hartford High Yield HLS Suburban Propane Partners 12/18/03 940 0.1 949 Fund LP Hartford High Yield HLS Xcel Energy, Inc. 12/17/03, 12/18/03 3,309 0.4 3,427 Fund Hartford High Yield HLS Burns Philp Capital 6/14/02, 5/1/03, 5/6/03, 3,343 0.5 3,585 Fund Property Ltd. 5/22/03 Hartford High Yield HLS Rhodia S.A. 7/25/03, 9/4/03 1,786 0.2 1,656 Fund Hartford High Yield HLS ACC Escrow Corp. 7/25/03 1,100 0.1 1,227 Fund Hartford High Yield HLS CBD Media, Inc. 6/9/03 375 0.1 413 Fund Hartford High Yield HLS Centerpoint Energy 3/18/03 1,750 0.2 1,981 Fund Resources Hartford High Yield HLS Centerpoint Energy, Inc. 10/28/03 1,515 0.2 1,542 Fund Hartford High Yield HLS Houston Exploration Co. 6/5/03 250 -- 258 Fund Hartford High Yield HLS BSN Glasspack Obligation 7/29/03 2,154 0.3 2,531 Fund S.A. Hartford High Yield HLS Fresenius Finance B.V. 4/16/03 1,295 0.2 1,635 Fund Hartford High Yield HLS Intrawest Corp. 10/1/03, 10/2/03 1,310 0.2 1,362 Fund Hartford High Yield HLS Remy Cointreau S.A. 6/18/03 337 -- 372 Fund Hartford High Yield HLS Rhodia S.A. 5/22/03 3,818 0.5 3,341 Fund <Caption> MARKET VALUE PERCENTAGE OF FUND'S NET FUND ASSETS ---- ------------- Hartford High Yield HLS 0.5% Fund Hartford High Yield HLS 0.3 Fund Hartford High Yield HLS -- Fund Hartford High Yield HLS 0.5 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.1 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.1 Fund Hartford High Yield HLS 0.3 Fund Hartford High Yield HLS 0.1 Fund Hartford High Yield HLS 0.1 Fund Hartford High Yield HLS 0.1 Fund Hartford High Yield HLS 0.1 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.1 Fund Hartford High Yield HLS 0.5 Fund Hartford High Yield HLS 0.5 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.1 Fund Hartford High Yield HLS 0.3 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS -- Fund Hartford High Yield HLS 0.3 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.1 Fund Hartford High Yield HLS 0.4 Fund </Table> 163 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> ACQUISITION COST PERCENTAGE OF ACQUISITION FUND'S NET MARKET FUND SECURITY ACQUISITION DATE(S) COST ASSETS VALUE ---- -------- ------------------- ----------- ------------- ------- Hartford High Yield HLS Vivendi Universal S.A. 7/2/03 $ 2,847 0.4% $ 3,001 Fund Hartford International Samsung Electronics Co., 10/7/03, 10/16/03, 1,058 0.8 1,053 Capital Appreciation HLS Ltd., GDR 12/1/03, 12/12/03 Fund Hartford International China Steel Corp., GDR 10/16/03 5,110 0.6 5,456 Opportunities HLS Fund Hartford Money Market HLS Nationwide Building 7/17/03 30,000 1.6 30,000 Fund Society Hartford Money Market HLS Honda Motor Corp. 10/20/03 37,500 2.0 37,500 Fund Hartford Money Market HLS Bradford & Bingley PLC 12/8/03 50,000 2.7 50,000 Fund Hartford Money Market HLS Cargill, Inc. 1/9/03 25,000 1.4 25,000 Fund Hartford Money Market HLS Northern Rock PLC 1/16/03 50,000 2.7 50,000 Fund Hartford Mortgage DLJ Mortgage Acceptance 8/22/96 150 -- 153 Securities HLS Fund Corp., Series 1996-1, Class B1 Hartford Mortgage DLJ Mortgage Acceptance 8/22/96 49 -- 51 Securities HLS Fund Corp., Series 1996-1, Class B2 Hartford Mortgage Banc of America Commercial 2/11/03 4,958 0.6 4,334 Securities HLS Fund Mortgage, Inc., Series 2002-2, Class XP Hartford Mortgage Bear Stearns Commercial 2/12/03 4,969 0.6 4,381 Securities HLS Fund Mortgage Securities, Inc., Series 2002-TOP8, Class X2 Hartford Mortgage CS First Boston Mortgage 2/27/03 5,057 0.7 4,305 Securities HLS Fund Securities Corp., Series 2003-CNP1, Class ASP Hartford Mortgage LB-UBS Commercial Mortgage 3/11/03 4,046 0.5 3,433 Securities HLS Fund Trust, Series 2003-C1, Class XCP Hartford Mortgage Lehman Brothers Floating 5/7/03 5,000 0.7 5,000 Securities HLS Fund Rate Commercial Mortgage Trust, Series 2003-LLFA, Class G Hartford Mortgage Lehman Brothers Floating 6/2/03 10,000 1.3 10,000 Securities HLS Fund Rate Commercial Mortgage Trust, Series 2003-LLFA, Class A2 Hartford Mortgage Wachovia Bank Commercial 6/17/03 10,000 1.3 9,997 Securities HLS Fund Mortgage Trust, Series 2003-WHL2, Class A3 Hartford Mortgage Wachovia Bank Commercial 6/17/03 4,998 0.7 4,998 Securities HLS Fund Mortgage Trust, Series 2003-WHL2, Class F ILLIQUID SECURITIES Hartford Bond HLS Fund Delta Airlines, Inc. 10/18/96 1,530 -- 1,028 Hartford Bond HLS Fund Iridium World 7/11/97 97 -- @@ -- Communications, Inc. Hartford Bond HLS Fund Voicestream Wireless Corp. 8/1/97 @@ -- -- @@ -- Hartford Bond HLS Fund Pollyone Corp. 9/19/02 1,693 0.1 1,679 Hartford Bond HLS Fund Global Crossing Ltd. 12/9/03 2,220 0.1 2,236 Hartford Bond HLS Fund Marconi Corp., PLC 5/19/03 1,716 0.1 1,853 <Caption> MARKET VALUE PERCENTAGE OF FUND'S NET FUND ASSETS ---- ------------- Hartford High Yield HLS 0.4% Fund Hartford International 0.8 Capital Appreciation HLS Fund Hartford International 0.6 Opportunities HLS Fund Hartford Money Market HLS 1.6 Fund Hartford Money Market HLS 2.0 Fund Hartford Money Market HLS 2.7 Fund Hartford Money Market HLS 1.4 Fund Hartford Money Market HLS 2.7 Fund Hartford Mortgage -- Securities HLS Fund Hartford Mortgage -- Securities HLS Fund Hartford Mortgage 0.5 Securities HLS Fund Hartford Mortgage 0.6 Securities HLS Fund Hartford Mortgage 0.6 Securities HLS Fund Hartford Mortgage 0.4 Securities HLS Fund Hartford Mortgage 0.7 Securities HLS Fund Hartford Mortgage 1.3 Securities HLS Fund Hartford Mortgage 1.3 Securities HLS Fund Hartford Mortgage 0.7 Securities HLS Fund Hartford Bond HLS Fund -- Hartford Bond HLS Fund -- Hartford Bond HLS Fund -- Hartford Bond HLS Fund 0.1 Hartford Bond HLS Fund 0.1 Hartford Bond HLS Fund 0.1 </Table> 164 - -------------------------------------------------------------------------------- <Table> <Caption> ACQUISITION COST PERCENTAGE OF ACQUISITION FUND'S NET MARKET FUND SECURITY ACQUISITION DATE(S) COST ASSETS VALUE ---- -------- ------------------- ----------- ------------- ------- Hartford Bond HLS Fund Marconi Corp., PLC 5/19/03 $ 3,759 0.1% $ 4,131 Hartford High Yield HLS Hosiery Corp. 10/7/94 4 -- @@ -- Fund Hartford High Yield HLS Voicestream Wireless Corp. 8/1/97 @@ -- -- 1 Fund Hartford High Yield HLS Minorplanet System USA, 2/13/98 3 -- @@ -- Fund Inc. Hartford High Yield HLS Solutia, Inc. 11/11/02 @@ -- -- 29 Fund Hartford High Yield HLS Marconi Corp., PLC, ADR 5/20/03 1,128 0.2 2,345 Fund Hartford High Yield HLS Splitrock Services, Inc. 7/23/98, 8/5/98 15 -- 17 Fund Hartford High Yield HLS TELUS Corp. 8/5/96, 10/3/96, 3/26/01 42 -- 17 Fund Hartford High Yield HLS Adelphia Communications 1/16/02 513 0.1 32 Fund Corp. OTHER RESTRICTED SECURITIES Hartford Global Advisers Miller Brewing Co. 8/6/03 448 0.1 456 HLS Fund Hartford Global Advisers HBOS PLC 9/11/03 499 0.1 500 HLS Fund Hartford Global Advisers HBOS PLC 10/22/03 588 0.2 589 HLS Fund Hartford Global Advisers Staples, Inc. 1/16/03 241 0.1 291 HLS Fund Hartford Global Advisers Oversea-Chinese Banking 1/4/02, 1/8/02, 3/28/02 395 0.1 621 HLS Fund Corp., Ltd. Hartford Global Advisers Pemex Project Funding 7/21/03, 7/24/03 209 0.1 228 HLS Fund Master Trust Co. Hartford Global Technology Samsung Electronics Co., 7/14/03, 7/15/03, 7/23/03, 1,938 1.1 2,020 HLS Fund Ltd., GDR 9/11/03, 9/25/03, 10/16/03, 10/31/03, 12/5/03 Hartford Growth Quanta Computer, Inc., GDR 12/16/03, 12/19/03, 1,471 0.2 1,438 Opportunities HLS Fund 12/22/03 <Caption> MARKET VALUE PERCENTAGE OF FUND'S NET FUND ASSETS ---- ------------- Hartford Bond HLS Fund 0.1% Hartford High Yield HLS -- Fund Hartford High Yield HLS -- Fund Hartford High Yield HLS -- Fund Hartford High Yield HLS -- Fund Hartford High Yield HLS 0.3 Fund Hartford High Yield HLS -- Fund Hartford High Yield HLS -- Fund Hartford High Yield HLS -- Fund Hartford Global Advisers 0.1 HLS Fund Hartford Global Advisers 0.1 HLS Fund Hartford Global Advisers 0.2 HLS Fund Hartford Global Advisers 0.1 HLS Fund Hartford Global Advisers 0.2 HLS Fund Hartford Global Advisers 0.1 HLS Fund Hartford Global Technology 1.1 HLS Fund Hartford Growth 0.2 Opportunities HLS Fund </Table> - --------------- @@ Due to the presentation of the financial statements in thousands, the numbers may round to zero. 3. EXPENSES: a) Investment Management and Advisory Agreements -- HL Investment Advisors, LLC (HL Advisors) an indirect wholly-owned subsidiary of The Hartford, serves as investment manager to the Funds pursuant to investment management agreements approved by each Fund's Board of Directors and shareholders. The schedule below reflects the rates of compensation paid to HL Advisors for services rendered, a portion of which is used to compensate Wellington or Hartford Investment Management: HARTFORD INDEX HLS FUND <Table> <Caption> AVERAGE DAILY NET ASSETS ANNUAL RATE - ------------------------ ----------- All assets......................................................... 0.200% </Table> HARTFORD MONEY MARKET HLS FUND AND HARTFORD MORTGAGE SECURITIES HLS FUND <Table> <Caption> AVERAGE DAILY NET ASSETS ANNUAL RATE - ------------------------ ----------- All assets......................................................... 0.250% </Table> 165 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- HARTFORD BOND HLS FUND AND HARTFORD STOCK HLS FUND <Table> <Caption> AVERAGE DAILY NET ASSETS ANNUAL RATE - ------------------------ ----------- On first $250 million.............................................. 0.325% On next $250 million............................................... 0.300 On next $500 million............................................... 0.275 Over $1 billion.................................................... 0.250 </Table> HARTFORD U.S. GOVERNMENT SECURITIES HLS FUND <Table> <Caption> AVERAGE DAILY NET ASSETS ANNUAL RATE - ------------------------ ----------- On first $50 million............................................... 0.500% Over $50 million................................................... 0.450 </Table> HARTFORD ADVISERS HLS FUND, HARTFORD CAPITAL APPRECIATION HLS FUND, HARTFORD DIVIDEND AND GROWTH HLS FUND, HARTFORD DISCIPLINED EQUITY HLS FUND, HARTFORD GLOBAL ADVISERS HLS FUND, HARTFORD GLOBAL LEADERS HLS FUND, HARTFORD HIGH YIELD HLS FUND, HARTFORD INTERNATIONAL OPPORTUNITIES HLS FUND, HARTFORD MIDCAP HLS FUND AND HARTFORD SMALL COMPANY HLS FUND <Table> <Caption> AVERAGE DAILY NET ASSETS ANNUAL RATE - ------------------------ ----------- On first $250 million.............................................. 0.575% On next $250 million............................................... 0.525 On next $500 million............................................... 0.475 Over $1 billion.................................................... 0.425 </Table> HARTFORD FOCUS HLS FUND, HARTFORD GLOBAL COMMUNICATIONS HLS FUND, HARTFORD GLOBAL FINANCIAL SERVICES HLS FUND, HARTFORD GLOBAL HEALTH HLS FUND, HARTFORD GLOBAL TECHNOLOGY HLS FUND, HARTFORD INTERNATIONAL CAPITAL APPRECIATION HLS FUND AND HARTFORD INTERNATIONAL SMALL COMPANY HLS FUND <Table> <Caption> AVERAGE DAILY NET ASSETS ANNUAL RATE - ------------------------ ----------- On first $250 million.............................................. 0.650% On next $250 million............................................... 0.600 Over $500 million.................................................. 0.550 </Table> HARTFORD EQUITY INCOME HLS FUND, HARTFORD GROWTH HLS FUND, HARTFORD MIDCAP VALUE HLS FUND AND HARTFORD VALUE HLS FUND <Table> <Caption> AVERAGE DAILY NET ASSETS ANNUAL RATE - ------------------------ ----------- On first $250 million.............................................. 0.625% On next $250 million............................................... 0.575 On next $500 million............................................... 0.525 Over $1 Billion.................................................... 0.475 </Table> HARTFORD GROWTH OPPORTUNITIES HLS FUND, HARTFORD SMALLCAP GROWTH HLS FUND AND HARTFORD VALUE OPPORTUNITIES HLS FUND <Table> <Caption> AVERAGE DAILY NET ASSETS ANNUAL RATE - ------------------------ ----------- On first $100 million.............................................. 0.700% Over $100 million.................................................. 0.600 </Table> Pursuant to sub-advisory agreements between HL Advisors and Wellington, Wellington provides the day-to-day investment management services to the Hartford Advisers HLS Fund, Hartford Capital Appreciation HLS Fund, Hartford Disciplined Equity HLS Fund (formerly, Hartford Growth and Income HLS Fund), Hartford Dividend and Growth HLS Fund, Hartford Equity Income HLS Fund, Hartford Focus HLS Fund, Hartford Global Advisers HLS Fund, Hartford Global Communications HLS Fund, Hartford Global Financial Services HLS Fund, Hartford Global Health HLS Fund, Hartford Global Leaders HLS Fund, Hartford Global Technology HLS Fund, Hartford Growth HLS Fund, Hartford Growth Opportunities HLS Fund, Hartford International Capital Appreciation HLS Fund, Hartford International Opportunities HLS Fund, Hartford International Small Company HLS Fund, Hartford MidCap HLS Fund, Hartford MidCap Value HLS Fund, Hartford Small Company HLS Fund, Hartford SmallCap Growth HLS Fund, Hartford Stock HLS Fund, Hartford Value HLS Fund and Hartford Value Opportunities HLS Fund. Pursuant to investment services agreements between HL Advisors and Hartford Investment Management, Hartford Investment Management provides the day-to-day investment management services to the Hartford Bond HLS Fund, Hartford High Yield HLS Fund, Hartford Index HLS Fund, Hartford Money Market HLS Fund, Hartford Mortgage Securities HLS Fund, and Hartford U.S. Government Securities HLS Fund. 166 - -------------------------------------------------------------------------------- Wellington and Hartford Investment Management determine the purchase and sale of portfolio securities and place such orders for execution in the name of the respective Fund. In conjunction with their investment activity, Wellington and Hartford Investment Management regularly furnish reports to the Funds' Board of Directors concerning economic forecasts, investment strategy, portfolio activity and performance of the Funds. b) Administrative Services Agreement -- Under the Administrative Services Agreement between Hartford Life Insurance Company (HL) and each of the following Funds; Hartford Advisers HLS Fund, Hartford Bond HLS Fund, Hartford Capital Appreciation HLS Fund, Hartford Disciplined Equity HLS Fund, Hartford Dividend and Growth HLS Fund, Hartford Equity Income HLS Fund, Hartford Focus HLS Fund, Hartford Global Advisers HLS Fund, Hartford Global Communications HLS Fund, Hartford Global Financial Services HLS Fund, Hartford Global Health HLS Fund, Hartford Global Leaders HLS Fund, Hartford Global Technology HLS Fund, Hartford Growth HLS Fund, Hartford High Yield HLS Fund, Hartford Index HLS Fund, Hartford International Capital Appreciation HLS Fund, Hartford International Opportunities HLS Fund, Hartford International Small Company HLS Fund, Hartford MidCap HLS Fund, Hartford MidCap Value HLS Fund, Hartford Money Market HLS Fund, Hartford Mortgage Securities HLS Fund, Hartford Small Company HLS Fund, Hartford Stock HLS Fund and Hartford Value HLS Fund, HL provides administrative services to the Funds and receives monthly compensation at the annual rate of 0.20% of each Fund's average daily net assets. The Funds assume and pay certain other expenses (including, but not limited to, accounting, custodian, state taxes and directors' fees). Directors' fees represent remuneration paid or accrued to directors not affiliated with HL or any other related company. Accounting Services Agreement -- Under the Fund Accounting Agreement between HL and Hartford Advisers HLS Fund, Hartford Bond HLS Fund, Hartford Capital Appreciation HLS Fund, Hartford Disciplined Equity HLS Fund, Hartford Dividend and Growth HLS Fund, Hartford Equity Income HLS Fund, Hartford Focus HLS Fund, Hartford Global Advisors HLS Fund, Hartford Global Communications HLS Fund, Hartford Global Financial Services HLS Fund, Hartford Global Health HLS Fund, Hartford Global Leaders HLS Fund, Hartford Global Technology HLS Fund, Hartford Growth HLS Fund, Hartford High Yield HLS Fund, Hartford Index HLS Fund, Hartford International Capital Appreciation HLS Fund, Hartford International Opportunities HLS Fund, Hartford International Small Company HLS Fund, Hartford MidCap HLS Fund, Hartford MidCap Value HLS Fund, Hartford Money Market HLS Fund, Hartford Mortgage Securities HLS Fund, Hartford Small Company HLS Fund, Hartford Stock HLS Fund and Hartford Value HLS Fund, HL provides accounting services to the Funds and receives monthly compensation at the annual rate of 0.02% of each Fund's average daily net assets. c) Operating Expenses -- Allocable expenses of the Funds are charged to each Fund based on the ratio of the average net assets of each Fund to the combined average net assets of the Funds. Non-allocable expenses are charged to each fund based on specific identification. d) Expense Offset -- The Funds have asked its investment advisors to direct certain security trades, subject to obtaining the best price and execution, to brokers who have agreed to rebate to the Funds part of the commissions generated. Such rebates are used solely to reduce the Funds' operating expenses. The Funds' custodian bank has also agreed to reduce its fees when the Funds maintain cash on deposit in the non-interest-bearing custody account. For the year ended December 31, 2003, directed brokerage and custodian fee offset arrangements reduced expenses by $202 and $82, respectively. The total expense reduction represented an effective annual rate of 0.00% of the Funds' average net assets. e) Distribution Plan for Class IB shares -- Each Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the 1940 Act for the Class IB shares. Pursuant to the Distribution Plan, each Fund compensates the Distributor, Hartford Securities Distribution Company, Inc. (a wholly owned, ultimate subsidiary of Hartford Life, Inc.) from assets attributable to the Class IB shares for services rendered and expenses borne in connection with activities primarily intended to result in the sale of the Class IB shares. The Distribution Plan provides that each Fund may pay annually up to 0.25% of the average daily net assets of a fund attributable to its Class IB shares for activities primarily intended to result in the sale of Class IB shares. Under the terms of the Distribution Plan and the principal underwriting agreement, each Fund is authorized to make payments 167 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- monthly to the Distributor which may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class IB shares for such entities' fees or expenses incurred or paid in that regard. 4. AFFILIATE HOLDINGS: As of December 31, 2003, HL Advisors and HL held direct interests in shares as follows: <Table> <Caption> PERCENT OF PERCENT OF FUND CLASS IA TOTAL SHARES CLASS IB TOTAL SHARES ---- -------- ------------ -------- ------------ Equity Income HLS Fund................................ 290 30.79% 10 1.06% </Table> The shares held by HL Advisors and HL, at December 31, 2003, have a market value of $3,224 and $1,930, respectively. HL Advisors and HL received income, in the form of dividends, in the amount of $5 and $11, respectively, for the twelve months ended December 31, 2003 5. INVESTMENT TRANSACTIONS: For the year ended December 31, 2003, aggregate purchases and sales of investment securities (excluding short-term investments and U.S. government obligations) were as follows: <Table> <Caption> COST OF SALES FUND PURCHASES PROCEEDS ---- ---------- ---------- Hartford Advisers HLS Fund.................................. $3,125,733 $3,030,477 Hartford Bond HLS Fund...................................... 5,133,903 4,636,117 Hartford Capital Appreciation HLS Fund...................... 7,948,684 7,092,231 Hartford Disciplined Equity HLS Fund........................ 605,772 456,516 Hartford Dividend and Growth HLS Fund....................... 1,844,771 1,106,563 Hartford Equity Income HLS Fund............................. 9,486 169 Hartford Focus HLS Fund..................................... 104,940 85,856 Hartford Global Advisers HLS Fund........................... 1,220,959 1,286,755 Hartford Global Communications HLS Fund..................... 21,714 15,206 Hartford Global Financial Services HLS Fund................. 37,639 32,912 Hartford Global Health HLS Fund............................. 170,066 101,190 Hartford Global Leaders HLS Fund............................ 2,008,240 1,966,897 Hartford Global Technology HLS Fund......................... 238,479 174,608 Hartford Growth HLS Fund.................................... 282,027 117,709 Hartford Growth Opportunities HLS Fund...................... 900,376 836,145 Hartford High Yield HLS Fund................................ 571,080 199,326 Hartford Index HLS Fund..................................... 137,567 49,415 Hartford International Capital Appreciation HLS Fund........ 221,742 161,745 Hartford International Opportunities HLS Fund............... 1,017,873 1,006,116 Hartford International Small Company HLS Fund............... 81,794 56,405 Hartford MidCap HLS Fund.................................... 1,386,548 1,230,197 Hartford MidCap Value HLS Fund.............................. 668,955 332,619 Hartford Mortgage Securities HLS Fund....................... 3,043,584 2,662,962 Hartford Small Company HLS Fund............................. 1,406,247 1,249,682 Hartford SmallCap Growth HLS Fund........................... 380,427 268,232 Hartford Stock HLS Fund..................................... 2,115,707 2,169,020 Hartford U.S. Government Securities HLS Fund................ 2,279,247 2,039,430 Hartford Value HLS Fund..................................... 174,301 65,495 Hartford Value Opportunities HLS Fund....................... 111,331 59,747 </Table> 168 - -------------------------------------------------------------------------------- 6. RECLASSIFICATION OF CAPITAL ACCOUNTS: In accordance with AICPA Statement of Position 93-2, Determination, Disclosure, and Financial Statement Presentation of Income, Capital Gain, and Return of Capital Distributions by Investment Companies, the Funds have recorded several reclassifications in their capital accounts. These reclassifications had no impact on the net asset value per share of the Funds and are designed generally to present undistributed income and realized gains on a tax basis which is considered to be more informative to the shareholder. As of December 31, 2003, the Funds recorded the following reclassifications to increase (decrease) the accounts listed below. <Table> <Caption> ACCUMULATED ACCUMULATED NET REALIZED NET INVESTMENT GAIN (LOSS) ON PAID IN FUND INCOME (LOSS) INVESTMENTS CAPITAL ---- -------------- -------------- ------- Hartford Advisers HLS Fund.................................. $ 6,196 $ (3,375) $(2,821) Hartford Bond HLS Fund...................................... 42,793 (48,413) 5,620 Hartford Capital Appreciation HLS Fund...................... (9,067) 9,067 -- Hartford Disciplined Equity HLS Fund........................ (11) (9,580) 9,591 Hartford Dividend and Growth HLS Fund....................... 1 (1) -- Hartford Equity Income HLS Fund............................. 1 (1) -- Hartford Global Advisers HLS Fund........................... 869 (869) -- Hartford Global Communications HLS Fund..................... (11) 34 (23) Hartford Global Financial Services HLS Fund................. (5) 8 (3) Hartford Global Health HLS Fund............................. (71) 71 -- Hartford Global Leaders HLS Fund............................ 222 (2,706) 2,484 Hartford Global Technology HLS Fund......................... 676 937 (1,613) Hartford Growth HLS Fund.................................... 308 (308) -- Hartford Growth Opportunities HLS Fund...................... 344 69 (413) Hartford High Yield HLS Fund................................ 1,968 (179) (1,789) Hartford Index HLS Fund..................................... (21) 21 -- Hartford International Capital Appreciation HLS Fund........ (94) 94 -- Hartford International Opportunities HLS Fund............... (774) (9,393) 10,167 Hartford International Small Company HLS Fund............... 153 (153) -- Hartford Midcap HLS Fund.................................... 78 (3,193) 3,115 Hartford Midcap Value HLS Fund.............................. (66) 66 -- Hartford Mortgage Securities HLS Fund....................... 10,429 (10,429) -- Hartford Small Company HLS Fund............................. 4,009 (1,999) (2,010) Hartford SmallCap Growth HLS Fund........................... 113 52 (165) Hartford Stock HLS Fund..................................... (484) (1,102) 1,586 Hartford U.S. Government Securities HLS Fund................ 5,041 (5,041) 0 Hartford Value Opportunities HLS Fund....................... (6) 6 -- </Table> 169 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- TAX COST AND UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS: As of December 31, 2003, the aggregate gross unrealized appreciation and (depreciation) of all investments, based on cost for federal income tax purposes, was as follows: <Table> <Caption> AGGREGATE GROSS AGGREGATE GROSS NET UNREALIZED UNREALIZED UNREALIZED APPRECIATION / FUND TAX COST APPRECIATION (DEPRECIATION) (DEPRECIATION) ---- ----------- --------------- --------------- -------------- Hartford Advisers HLS Fund............... $12,065,665 $1,457,050 $(326,578) $1,130,472 Hartford Bond HLS Fund................... 3,726,899 75,009 (16,335) 58,674 Hartford Capital Appreciation HLS Fund... 8,876,631 2,143,083 (100,320) 2,042,763 Hartford Disciplined Equity HLS Fund..... 747,249 113,954 (17,995) 95,959 Hartford Dividend and Growth HLS Fund.... 4,471,212 678,564 (162,268) 516,296 Hartford Equity Income HLS Fund.......... 10,016 571 (20) 551 Hartford Focus HLS Fund.................. 79,579 10,786 (1,023) 9,763 Hartford Global Advisers HLS Fund........ 365,560 41,285 (948) 40,337 Hartford Global Communications HLS Fund................................... 23,980 7,225 (14) 7,211 Hartford Global Financial Services HLS Fund................................... 33,759 4,202 (259) 3,943 Hartford Global Health HLS Fund.......... 412,238 45,836 (15,804) 30,032 Hartford Global Leaders HLS Fund......... 808,360 117,868 (2,405) 115,463 Hartford Global Technology HLS Fund...... 178,692 23,232 (3,160) 20,072 Hartford Growth HLS Fund................. 201,071 22,239 (2,331) 19,908 Hartford Growth Opportunities HLS Fund... 674,043 134,173 (6,616) 127,557 Hartford High Yield HLS Fund............. 770,110 48,569 (10,724) 37,845 Hartford Index HLS Fund.................. 1,997,362 452,189 (296,152) 156,037 Hartford International Capital Appreciation HLS Fund.................. 139,009 15,402 (417) 14,985 Hartford International Opportunities HLS Fund................................... 849,332 140,720 (2,271) 138,449 Hartford International Small Company HLS Fund................................... 65,822 8,252 (313) 7,939 Hartford MidCap HLS Fund................. 1,884,411 430,986 (40,633) 390,353 Hartford MidCap Value HLS Fund........... 858,396 163,787 (7,613) 156,174 Hartford Mortgage Securities HLS Fund.... 789,369 5,955 (11,750) (5,795) Hartford Small Company HLS Fund.......... 965,145 183,361 (16,430) 166,931 Hartford SmallCap Growth HLS Fund........ 430,207 66,002 (15,533) 50,469 Hartford Stock HLS Fund.................. 6,071,269 894,686 (353,506) 541,180 Hartford U.S. Government Securities HLS Fund................................... 916,061 7,267 (2,235) 5,032 Hartford Value HLS Fund.................. 226,982 30,222 (1,164) 29,058 Hartford Value Opportunities HLS Fund.... 171,322 33,784 (6,723) 27,061 </Table> 170 - -------------------------------------------------------------------------------- 7. CAPITAL LOSS CARRYFORWARD: At December 31, 2003, the following Funds had capital loss carryforwards for U.S. Federal Tax purposes of approximately: <Table> <Caption> YEAR OF FUND AMOUNT EXPIRATION ---- ---------- ---------- Hartford Advisers HLS Fund.................................. $ 433,487 2011 Hartford Advisers HLS Fund.................................. 139,365 2010 Hartford Advisers HLS Fund.................................. 291,958 2009 Hartford Advisers HLS Fund.................................. 1,126 2008 Hartford Bond HLS Fund...................................... 654 2009 Hartford Bond HLS Fund...................................... 438 2007 Hartford Capital Appreciation HLS Fund...................... 1,156,841 2010 Hartford Capital Appreciation HLS Fund...................... 123,844 2009 Hartford Disciplined Equity HLS Fund........................ 21,177 2011 Hartford Disciplined Equity HLS Fund........................ 97,169 2010 Hartford Disciplined Equity HLS Fund........................ 48,818 2009 Hartford Disciplined Equity HLS Fund........................ 8,175 2008 Hartford Disciplined Equity HLS Fund........................ 201 2007 Hartford Dividend and Growth HLS Fund....................... 106,025 2011 Hartford Focus HLS Fund..................................... 371 2011 Hartford Focus HLS Fund..................................... 4,587 2010 Hartford Global Advisers HLS Fund........................... 26,784 2010 Hartford Global Advisers HLS Fund........................... 21,915 2009 Hartford Global Communications HLS Fund..................... 3,887 2010 Hartford Global Communications HLS Fund..................... 1,142 2009 Hartford Global Financial Services HLS Fund................. 1,520 2010 Hartford Global Leaders HLS Fund............................ 115,095 2010 Hartford Global Leaders HLS Fund............................ 66,973 2009 Hartford Global Technology HLS Fund......................... 52,496 2010 Hartford Global Technology HLS Fund......................... 25,095 2009 Hartford Growth Opportunities HLS Fund...................... 128,757 2010 Hartford Growth Opportunities HLS Fund...................... 11,879 2009 Hartford High Yield HLS Fund................................ 21,813 2011 Hartford High Yield HLS Fund................................ 8,996 2010 Hartford High Yield HLS Fund................................ 2,700 2009 Hartford High Yield HLS Fund................................ 5,611 2008 Hartford High Yield HLS Fund................................ 5,355 2007 Hartford High Yield HLS Fund................................ 9,320 2006 Hartford High Yield HLS Fund................................ 1,581 2005 Hartford International Opportunities HLS Fund............... 134,281 2010 Hartford International Opportunities HLS Fund............... 215,001 2009 Hartford International Opportunities HLS Fund............... 3,922 2008 Hartford Midcap HLS Fund.................................... 54,183 2010 Hartford Midcap HLS Fund.................................... 73,054 2009 Hartford Small Company HLS Fund............................. 124,207 2010 Hartford Small Company HLS Fund............................. 141,140 2009 Hartford SmallCap Growth HLS Fund........................... 13,310 2010 Hartford SmallCap Growth HLS Fund........................... 63,002 2009 Hartford Stock HLS Fund..................................... 503,997 2011 Hartford Stock HLS Fund..................................... 226,152 2010 Hartford Stock HLS Fund..................................... 287,769 2009 Hartford Stock HLS Fund..................................... 622 2008 Hartford U.S. Government Securities HLS Fund................ 1,398 2008 </Table> 171 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> YEAR OF FUND AMOUNT EXPIRATION ---- ---------- ---------- Hartford U.S. Government Securities HLS Fund................ $ 2,513 2007 Hartford U.S. Government Security HLS Fund.................. 154 2004 Hartford Value HLS Fund..................................... 2,235 2011 Hartford Value HLS Fund..................................... 6,348 2010 Hartford Value Opportunities HLS Fund....................... 12,080 2010 </Table> Based on certain provisions in the Internal Revenue Code, various limitations regarding the future utilization of the Hartford Advisers HLS Fund, Hartford Bond HLS Fund, Hartford Disciplined Equity HLS Fund, Hartford Global Leaders HLS Fund, Hartford High Yield HLS Fund, Hartford International Opportunities HLS Fund and Hartford Stock HLS Fund carry forward may apply. For the fiscal year ended December 31, 2003, the following Funds have elected to defer losses occurring between November 1, 2003 and December 31, 2003 as follows: <Table> <Caption> CAPITAL LOSS CURRENCY LOSS FUND DEFERRED DEFERRED ---- ------------ ------------- Hartford Advisers HLS Fund.................................. $17,761 $ -- Hartford Bond HLS Fund...................................... 15,260 -- Hartford Global Financial Services HLS Fund................. -- 1 Hartford Global Technology HLS Fund......................... -- 5 Hartford Growth Opportunities HLS Fund...................... -- 14 Hartford High Yield HLS Fund................................ 1,810 -- Hartford International Small Company HLS Fund............... -- 134 Hartford Mortgage Securities HLS Fund....................... 1,238 -- Hartford Small Company HLS Fund............................. 5,308 -- Hartford Stock HLS Fund..................................... 5,224 -- Hartford U.S. Government Securities HLS Fund................ 1,786 -- </Table> 172 - -------------------------------------------------------------------------------- 8. DISTRIBUTION TO SHAREHOLDERS: The tax character of distributions paid during 2003 was as follows: <Table> <Caption> ORDINARY LONG-TERM RETURN FUND INCOME CAPITAL GAIN OF CAPITAL ---- -------- ------------ ---------- Hartford Advisers HLS Fund.................................. $256,741 $ -- $-- Hartford Bond HLS Fund...................................... 128,941 6,157 -- Hartford Capital Appreciation HLS Fund...................... 49,667 -- -- Hartford Disciplined Equity HLS Fund........................ 8,233 -- -- Hartford Dividend and Growth HLS Fund....................... 60,506 23,281 -- Hartford Equity Income HLS Fund............................. 16 -- -- Hartford Focus HLS Fund..................................... 166 -- -- Hartford Global Advisers HLS Fund........................... 2,500 -- -- Hartford Global Financial Services HLS Fund................. 430 -- -- Hartford Global Health HLS Fund............................. 3,041 1,134 -- Hartford Global Leaders HLS Fund............................ 3,122 -- -- Hartford Growth HLS Fund.................................... 6,200 120 -- Hartford High Yield HLS Fund................................ 18,851 -- -- Hartford Index HLS Fund..................................... 25,680 5,727 -- Hartford International Capital Appreciation HLS Fund........ 5,800 300 -- Hartford International Opportunities HLS Fund............... 7,059 -- -- Hartford International Small Company HLS Fund............... 4,870 141 -- Hartford Midcap HLS Fund.................................... 4,016 -- -- Hartford Money Market HLS Fund.............................. 15,989 -- -- Hartford Mortgage Securities HLS Fund....................... 30,864 1,129 -- Hartford Stock HLS Fund..................................... 69,003 -- -- Hartford U.S. Government Securities HLS Fund................ 13,061 -- -- Hartford Value HLS Fund..................................... 1,600 -- -- Hartford Value Opportunities HLS Fund....................... 618 -- -- </Table> 173 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- The tax character of distributions paid during 2002 was as follows: <Table> <Caption> ORDINARY LONG-TERM RETURN FUND INCOME CAPITAL GAIN OF CAPITAL ---- -------- ------------ ---------- Hartford Advisers HLS Fund.................................. $328,556 $ -- $ -- Hartford Bond HLS Fund...................................... 95,011 9,630 -- Hartford Capital Appreciation HLS Fund...................... 45,846 -- -- Hartford Dividend and Growth HLS Fund....................... 49,031 167,933 -- Hartford Focus HLS Fund..................................... 548 -- -- Hartford Global Advisers HLS Fund........................... 352 -- -- Hartford Global Communications HLS Fund..................... 60 -- 7 Hartford Global Financial Services HLS Fund................. 260 -- 6 Hartford Global Health HLS Fund............................. 3,890 2,110 -- Hartford Global Leaders HLS Fund............................ 5,899 -- -- Hartford Growth and Income HLS Fund......................... 2,255 -- -- Hartford High Yield HLS Fund................................ 11,701 -- -- Hartford Index HLS Fund..................................... 20,349 73,521 -- Hartford International Capital Appreciation HLS Fund........ 100 -- 2 Hartford International Opportunities HLS Fund............... 15,967 -- -- Hartford International Small Company HLS Fund............... 53 -- -- Hartford MidCap Fund HLS Fund............................... 1,990 -- -- Hartford MidCap Value HLS Fund.............................. 680 -- 119 Hartford Money Market HLS Fund.............................. 32,227 -- -- Hartford Mortgage Securities HLS Fund....................... 20,951 -- -- Hartford Stock HLS Fund..................................... 61,412 -- -- Hartford U.S. Government Securities HLS Fund................ 8,732 -- -- Hartford Value HLS Fund..................................... 1,032 -- 8 Hartford Value Opportunities HLS Fund....................... 1,166 2,051 -- </Table> 174 - -------------------------------------------------------------------------------- As of December 31, 2003, the components of distributable earnings on a tax basis were as follows: <Table> <Caption> UNDISTRIBUTED UNDISTRIBUTED UNDISTRIBUTED UNREALIZED ORDINARY LONG-TERM APPRECIATION FUND INCOME CAPITAL GAIN (DEPRECIATION) ---- ------------- ------------- -------------- Hartford Advisers HLS Fund................................. $104,776 $ -- $1,130,472 Hartford Bond HLS Fund..................................... 228,190 5,198 58,909 Hartford Capital Appreciation HLS Fund..................... 4,215 -- 2,042,798 Hartford Disciplined Equity HLS Fund....................... 421 -- 95,959 Hartford Dividend and Growth HLS Fund...................... 1,534 -- 516,296 Hartford Equity Income HLS Fund............................ 3 -- 551 Hartford Focus HLS Fund.................................... 203 -- 9,763 Hartford Global Advisers HLS Fund.......................... 62 -- 38,944 Hartford Global Communications HLS Fund.................... -- -- 7,212 Hartford Global Financial Services HLS Fund................ -- -- 3,942 Hartford Global Health HLS Fund............................ 2,300 12,335 30,008 Hartford Global Leaders HLS Fund........................... 1,778 -- 115,483 Hartford Global Technology HLS Fund........................ -- -- 20,070 Hartford Growth HLS Fund................................... 2,090 440 19,908 Hartford Growth Opportunities HLS Fund..................... -- -- 127,563 Hartford High Yield HLS Fund............................... 35,325 -- 37,893 Hartford Index HLS Fund.................................... 3,096 6,030 156,037 Hartford International Capital Appreciation HLS Fund....... 4,090 58 14,973 Hartford International Opportunities HLS Fund.............. 1,143 -- 138,416 Hartford International Small Company HLS Fund.............. 1,201 544 7,934 Hartford MidCap HLS Fund................................... 218 -- 390,391 Hartford MidCap Value HLS Fund............................. 9,487 7,327 156,161 Hartford Mortgage Securities HLS Fund...................... 35,588 -- (5,795) Hartford Small Company HLS Fund............................ -- -- 166,931 Hartford SmallCap Growth HLS Fund.......................... -- -- 50,469 Hartford Stock HLS Fund.................................... 2,303 -- 541,181 Hartford U.S. Government Securities HLS Fund............... 26,838 -- 5,032 Hartford Value HLS Fund.................................... 725 -- 29,058 Hartford Value Opportunities HLS Fund...................... 733 -- 27,049 </Table> 9. CAPITAL SHARE TRANSACTIONS: The following information is for the year ended December 31, 2003: <Table> <Caption> HARTFORD CAPITAL HARTFORD ADVISERS HARTFORD BOND APPRECIATION HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold...................... 48,476 $ 1,008,884 99,153 $ 1,205,185 30,209 $ 1,120,299 Shares issued on reinvestment of distributions.................. 10,781 233,680 8,964 108,671 996 44,256 Shares redeemed.................. (74,454) (1,526,868) (98,394) (1,193,335) (29,606) (1,044,806) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... (15,197) $ (284,304) 9,723 $ 120,521 1,599 $ 119,749 =========== =========== ========== =========== ========== =========== </Table> 175 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD DISCIPLINED EQUITY HARTFORD DIVIDEND AND HARTFORD EQUITY INCOME HLS FUND GROWTH HLS FUND HLS FUND --------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ------------ ------------ ---------- ----------- ---------- ----------- CLASS IA Shares sold...................... 39,406 $ 351,751 58,637 $ 967,344 796 $ 8,073 Shares issued in merger.......... 3,434 29,606 -- -- -- -- Shares issued on reinvestment of distributions.................. 674 7,093 3,917 70,219 1 8 Shares redeemed.................. (34,666) (300,881) (39,533) (645,995) (5) (48) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... 8,848 $ 87,569 23,021 $ 391,568 792 $ 8,033 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD GLOBAL HARTFORD FOCUS HARTFORD GLOBAL ADVISERS COMMUNICATIONS HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold...................... 3,264 $ 28,144 17,559 $ 176,992 2,226 $ 12,600 Shares issued on reinvestment of distributions.................. 14 118 202 2,239 -- -- Shares redeemed.................. (2,794) (24,137) (19,147) (191,906) (1,642) (9,521) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... 484 $ 4,125 (1,386) $ (12,675) 584 $ 3,079 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD GLOBAL FINANCIAL HARTFORD GLOBAL HEALTH HARTFORD GLOBAL LEADERS SERVICES HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold...................... 2,736 $ 22,470 15,981 $ 213,991 54,563 $ 690,769 Shares issued in merger.......... -- -- -- -- 953 11,029 Shares issued on reinvestment of distributions.................. 25 243 225 3,162 192 2,799 Shares redeemed.................. (2,861) (23,925) (13,331) (175,292) (56,200) (708,878) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... (100) $ (1,212) 2,875 $ 41,861 (492) $ (4,281) =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD GLOBAL HARTFORD GROWTH TECHNOLOGY HARTFORD GROWTH OPPORTUNITIES HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold...................... 43,621 $ 173,476 13,082 $ 134,227 7,982 $ 166,767 Shares issued on reinvestment of distributions.................. -- -- 330 3,693 -- -- Shares redeemed.................. (33,355) (129,271) (3,503) (36,431) (7,578) (154,328) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... 10,266 $ 44,205 9,909 $ 101,489 404 $ 12,439 =========== =========== ========== =========== ========== =========== </Table> 176 - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD INTERNATIONAL HARTFORD HIGH YIELD HARTFORD INDEX CAPITAL APPRECIATION HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold...................... 116,859 $ 1,108,738 10,924 $ 286,041 12,397 $ 105,123 Shares issued on reinvestment of distributions.................. 1,397 13,145 1,001 28,912 308 3,124 Shares redeemed.................. (93,974) (893,732) (12,780) (327,616) (9,136) (75,764) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... 24,282 $ 228,151 (855) $ (12,663) 3,569 $ 32,483 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD INTERNATIONAL HARTFORD INTERNATIONAL OPPORTUNITIES SMALL COMPANY HARTFORD MIDCAP HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold...................... 192,953 $ 1,515,610 6,918 $ 73,653 34,729 $ 749,674 Shares issued in merger.......... 3,008 22,447 -- -- -- -- Shares issued on reinvestment of distributions.................. 724 6,584 265 3,326 172 4,016 Shares redeemed.................. (199,659) (1,571,908) (5,570) (58,478) (30,603) (638,702) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... (2,974) $ (27,267) 1,613 $ 18,501 4,298 $ 114,988 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD MIDCAP VALUE HARTFORD MONEY MARKET HARTFORD MORTGAGE HLS FUND HLS FUND SECURITIES HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold...................... 55,841 $ 581,574 5,510,526 $ 5,510,526 18,254 $ 217,762 Shares issued on reinvestment of distributions.................. -- -- 14,649 14,649 2,189 25,703 Shares redeemed.................. (39,895) (413,192) (6,235,192) (6,235,192) (31,358) (371,914) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... 15,946 $ 168,382 (710,017) $ (710,017) (10,915) $ (128,449) =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD SMALL COMPANY HARTFORD SMALLCAP HARTFORD STOCK HLS FUND GROWTH HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold...................... 54,637 $ 657,436 32,585 $ 480,810 25,647 $ 986,300 Shares issued in merger.......... -- -- -- -- 406 14,137 Shares issued on reinvestment of distributions.................. -- -- -- -- 1,466 64,146 Shares redeemed.................. (49,141) (581,815) (28,587) (418,455) (35,607) (1,354,602) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... 5,496 $ 75,621 3,998 $ 62,355 (8,088) $ (290,019) =========== =========== ========== =========== ========== =========== </Table> 177 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD VALUE HARTFORD U.S. GOVERNMENT HARTFORD VALUE OPPORTUNITIES SECURITIES HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold...................... 54,708 $ 623,417 20,127 $ 172,622 3,432 $ 44,620 Shares issued on reinvestment of distributions.................. 854 9,841 107 1,037 44 550 Shares redeemed.................. (62,570) (711,960) (13,396) (115,201) (1,417) (16,967) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... (7,008) $ (78,702) 6,838 $ 58,458 2,059 $ 28,203 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD CAPITAL HARTFORD ADVISERS HARTFORD BOND APPRECIATION HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold...................... 23,827 $ 495,611 34,505 $ 419,013 18,133 $ 656,957 Shares issued on reinvestment of distributions.................. 1,026 23,061 2,191 26,427 123 5,411 Shares redeemed.................. (3,527) (72,477) (8,880) (106,829) (1,563) (52,824) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... 21,326 $ 446,195 27,816 $ 338,611 16,693 $ 609,544 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD DISCIPLINED HARTFORD DIVIDEND AND HARTFORD EQUITY EQUITY HLS FUND GROWTH HLS FUND INCOME HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold...................... 8,222 $ 79,512 27,700 $ 447,355 160 $ 1,639 Shares issued on reinvestment of distributions.................. 108 1,140 759 13,568 -- 2 Shares redeemed.................. (1,078) (10,262) (1,981) (31,183) (10) (109) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... 7,252 $ 70,390 26,478 $ 429,740 150 $ 1,532 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD GLOBAL HARTFORD FOCUS HARTFORD GLOBAL ADVISERS COMMUNICATIONS HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold...................... 2,247 $ 18,887 2,415 $ 24,249 1,356 $ 7,555 Shares issued on reinvestment of distributions.................. 6 48 24 261 -- -- Shares redeemed.................. (609) (5,057) (451) (4,540) (523) (2,877) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... 1,644 $ 13,878 1,988 $ 19,970 833 $ 4,678 =========== =========== ========== =========== ========== =========== </Table> 178 - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD GLOBAL FINANCIAL HARTFORD GLOBAL HEALTH HARTFORD GLOBAL LEADERS SERVICES HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold...................... 1,054 $ 8,715 3,289 $ 44,034 4,176 $ 54,489 Shares issued on reinvestment of distributions.................. 19 187 72 1,013 18 323 Shares redeemed.................. (270) (2,307) (736) (9,631) (664) (8,289) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... 803 $ 6,595 2,625 $ 35,416 3,530 $ 46,523 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD GLOBAL HARTFORD GROWTH TECHNOLOGY HARTFORD GROWTH OPPORTUNITIES HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold...................... 6,386 $ 25,954 7,676 $ 76,755 2,313 $ 46,768 Shares issued on reinvestment of distributions.................. -- -- 235 2,627 -- -- Shares redeemed.................. (1,738) (6,863) (714) (7,389) (94) (1,913) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... 4,648 $ 19,091 7,197 $ 71,993 2,219 $ 44,855 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD INTERNATIONAL HARTFORD HIGH YIELD HARTFORD INDEX CAPITAL APPRECIATION HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold...................... 25,562 $ 238,158 4,144 $ 107,088 4,699 $ 41,873 Shares issued on reinvestment of distributions.................. 610 5,706 87 2,495 296 2,976 Shares redeemed.................. (6,934) (63,949) (529) (13,564) (683) (5,824) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... 19,238 $ 179,915 3,702 $ 96,019 4,312 $ 39,025 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD INTERNATIONAL HARTFORD INTERNATIONAL OPPORTUNITIES SMALL COMPANY HARTFORD MIDCAP HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold...................... 12,289 $ 101,772 1,434 $ 15,822 3,163 $ 66,824 Shares issued on reinvestment of distributions.................. 41 477 135 1,685 -- -- Shares redeemed.................. (8,256) (68,050) (341) (3,737) (846) (17,237) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... 4,074 $ 34,199 1,228 $ 13,770 2,317 $ 49,587 =========== =========== ========== =========== ========== =========== </Table> 179 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD MIDCAP VALUE HARTFORD MONEY MARKET HARTFORD MORTGAGE HLS FUND HLS FUND SECURITIES HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold...................... 15,289 $ 153,837 289,678 $ 289,678 9,259 $ 110,060 Shares issued on reinvestment of distributions.................. -- -- 1,341 1,341 539 6,290 Shares redeemed.................. (948) (9,120) (312,003) (312,003) (4,155) (48,728) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... 14,341 $ 144,717 (20,984) $ (20,984) 5,643 $ 67,622 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD SMALL COMPANY HARTFORD SMALLCAP HARTFORD STOCK HLS FUND GROWTH HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold...................... 7,297 $ 86,583 3,970 $ 58,377 5,265 $ 203,385 Shares issued on reinvestment of distributions.................. -- -- -- -- 111 4,863 Shares redeemed.................. (1,217) (13,339) (331) (5,296) (1,043) (39,423) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... 6,080 $ 73,244 3,639 $ 53,081 4,333 $ 168,825 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD VALUE HARTFORD U.S. GOVERNMENT HARTFORD VALUE OPPORTUNITIES SECURITIES HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold...................... 16,467 $ 188,213 6,252 $ 52,306 2,033 $ 25,825 Shares issued on reinvestment of distributions.................. 280 3,219 58 563 5 68 Shares redeemed.................. (4,652) (52,624) (484) (4,043) (195) (2,494) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... 12,095 $ 138,808 5,826 $ 48,826 1,843 $ 23,399 =========== =========== ========== =========== ========== =========== </Table> The following information is for the year ended December 31, 2002: <Table> <Caption> HARTFORD CAPITAL HARTFORD ADVISERS HARTFORD BOND APPRECIATION HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold...................... 207,487 $ 503,856 668,428 $ 815,855 166,965 $ 642,585 Shares issued in merger.......... 220,049 488,111 77,738 90,378 -- -- Shares issued on reinvestment of distributions.................. 105,657 310,849 83,422 92,931 2,847 43,001 Shares redeemed.................. (878,389) (1,912,142) (387,997) (493,343) (395,688) (1,397,883) Shares issued in 1 for 10 stock split.......................... (4,233,249) -- (1,614,335) -- (1,774,749) -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... (4,578,445) $ (609,326) (1,172,744) $ 505,821 (2,000,625) $ (712,297) =========== =========== ========== =========== ========== =========== </Table> 180 - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD DISCIPLINED EQUITY HARTFORD DIVIDEND AND HARTFORD FOCUS HLS FUND GROWTH HLS FUND HLS FUND --------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ------------ ------------ ---------- ----------- ---------- ----------- CLASS IA Shares sold...................... 156,947 $ 178,241 333,066 $ 644,897 25,022 $ 23,818 Shares issued in merger.......... 186,136 200,110 -- -- -- -- Shares issued on reinvestment of distributions.................. 2,171 2,112 96,010 201,073 451 369 Shares redeemed.................. (185,140) (191,489) (302,046) (539,278) (12,497) (10,820) Shares issued in 1 for 10 stock split.......................... (462,598) -- (1,638,206) -- (40,193) -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... (302,484) $ 188,974 (1,511,176) $ 306,692 (27,217) $ 13,367 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD GLOBAL HARTFORD GLOBAL HARTFORD GLOBAL ADVISERS COMMUNICATIONS FINANCIAL SERVICES HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold...................... 59,391 $ 58,817 8,599 $ 4,901 9,916 $ 9,178 Shares issued on reinvestment of distributions.................. 358 344 12 24 29 107 Shares redeemed.................. (91,890) (92,474) (12,234) (1,925) (13,038) (4,577) Shares issued in 1 for 10 stock split.......................... (268,006) -- (6,601) -- (10,011) -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... (300,147) $ (33,313) (10,224) $ 3,000 (13,104) $ 4,708 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD GLOBAL HARTFORD GLOBAL HEALTH HARTFORD GLOBAL LEADERS TECHNOLOGY HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold...................... 145,513 $ 182,644 453,367 $ 595,753 253,790 $ 105,108 Shares issued in merger.......... 183,081 253,327 -- -- Shares issued on in-kind transactions................... -- -- 12,217 6,109* Shares issued on reinvestment of distributions.................. 4,018 4,918 727 5,462 -- -- Shares redeemed.................. (141,592) (171,948) (474,221) (656,987) (257,161) (105,291) Shares issued in 1 for 10 stock split.......................... (130,846) -- (451,449) -- (165,808) -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... (122,907) $ 15,614 (288,495) $ 197,555 (156,962) $ 5,926 =========== =========== ========== =========== ========== =========== </Table> * During the year ended December 31, 2002, the Hartford Global Technology HLS Fund received in-kind subscriptions of securities as noted (including unrealized appreciation (depreciation) of ($925) from a shareholder of an affiliated fund offered by The Hartford in exchange for shares of the Fund noted. 181 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD GROWTH HARTFORD GROWTH OPPORTUNITIES HARTFORD HIGH YIELD HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold...................... 1,687 $ 15,219 1,122 $ 20,116 322,884 $ 335,553 Shares issued in merger.......... -- -- -- -- 50,751 48,048 Shares issued on reinvestment of distributions.................. -- -- -- -- 11,823 9,980 Shares redeemed.................. (133) (1,099) (5,284) (96,713) (299,921) (299,268) Shares issued in 1 for 10 stock split.......................... -- -- -- -- (193,755) -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... 1,554 $ 14,120 (4,162) $ (76,597) (108,218) $ 94,313 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD INTERNATIONAL HARTFORD INTERNATIONAL HARTFORD INDEX CAPITAL APPRECIATION OPPORTUNITIES HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold...................... 67,923 $ 229,511 82,184 $ 67,740 3,291,660 $ 2,907,057 Shares issued in merger.......... 97,999 293,220 -- -- -- -- Shares issued on in-kind transactions................... -- -- -- -- 12,252 11,716* Shares issued on reinvestment of distributions.................. 28,220 91,135 16 68 10,217 15,535 Shares redeemed.................. (156,348) (459,666) (59,640) (53,304) (3,352,850) (3,086,177) Shares issued in 1 for 10 stock split.......................... (592,800) -- (31,146) -- (865,011) -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... (555,006) $ 154,200 (8,586) $ 14,504 (903,732) $ (151,869) =========== =========== ========== =========== ========== =========== </Table> * During the year ended December 31, 2002, the Hartford International Opportunities HLS Fund received in-kind subscriptions of securities as noted (including unrealized appreciation (depreciation) of ($547) from a shareholder of an affiliated fund offered by The Hartford in exchange for shares of the Fund noted. <Table> <Caption> HARTFORD INTERNATIONAL SMALL COMPANY HARTFORD MIDCAP HARTFORD MIDCAP VALUE HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold...................... 29,060 $ 32,822 219,613 $ 471,596 428,431 $ 468,815 Shares issued on in-kind transactions................... -- -- 20,551 42,766* -- -- Shares issued on reinvestment of distributions.................. 37 37 984 1,990 80 685 Shares redeemed.................. (17,693) (18,054) (328,180) (685,936) (236,285) (243,479) Shares issued in 1 for 10 stock split.......................... (14,182) -- (681,615) -- (256,105) -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... (2,778) $ 14,805 (768,647) $ (169,584) (63,879) $ 226,021 =========== =========== ========== =========== ========== =========== </Table> * During the year ended December 31, 2002, the Hartford MidCap HLS Fund received in-kind subscriptions of securities as noted (including unrealized appreciation (depreciation) of $3,125 from a shareholder of an affiliated fund offered by The Hartford in exchange for shares of the Fund noted. 182 - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD MONEY MARKET HARTFORD MORTGAGE HARTFORD SMALL COMPANY HLS FUND SECURITIES LS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold...................... 7,433,161 $ 7,433,161 344,087 $ 424,959 288,006 $ 353,870 Shares issued in merger.......... 122,443 122,443 -- -- -- -- Shares issued on in-kind transactions................... -- -- -- -- 18,874 24,995* Shares issued on reinvestment of distributions.................. 29,756 29,756 16,459 18,984 -- -- Shares redeemed.................. (7,133,424) (7,133,424) (127,120) (164,767) (322,882) (394,686) Shares issued in 1 for 10 stock split.......................... -- -- (540,701) -- (490,203) -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... 451,936 $ 451,936 (307,275) $ 279,176 (506,205) $ (15,821) =========== =========== ========== =========== ========== =========== </Table> * During the year ended December 31, 2002, the Hartford Small Company HLS Fund received in-kind subscriptions of securities as noted (including unrealized appreciation (depreciation) of $2,151 from a shareholder of an affiliated fund offered by The Hartford in exchange for shares of the Fund noted. <Table> <Caption> HARTFORD SMALLCAP GROWTH HARTFORD STOCK HARTFORD U.S. GOVERNMENT HLS FUND HLS FUND SECURITIES HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold...................... 11,815 $ 143,723 82,040 $ 368,314 43,979 $ 482,125 Shares issued on reinvestment of distributions.................. -- -- 2,398 58,646 840 8,732 Shares redeemed.................. (12,644) (155,849) (302,325) (1,250,816) (8,975) (98,361) Shares issued in 1 for 10 stock split.......................... -- -- (1,292,904) -- -- -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... (829) $ (12,126) (1,510,791) $ (823,856) 35,844 $ 392,496 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD VALUE HARTFORD VALUE OPPORTUNITIES HLS FUND HLS FUND ------------------------- ------------------------ SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- CLASS IA Shares sold...................... 62,154 $ 61,107 1,276 $ 15,454 Shares issued on reinvestment of distributions.................. 97 735 218 3,217 Shares redeemed.................. (17,586) (15,014) (2,121) (25,157) Shares issued in 1 for 10 stock split.......................... (76,548) -- -- -- ----------- ----------- ---------- ----------- Net Increase (Decrease).......... (31,883) $ 46,828 (627) $ (6,486) =========== =========== ========== =========== </Table> 183 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD CAPITAL HARTFORD ADVISERS HARTFORD BOND APPRECIATION HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold...................... 127,755 $ 317,874 182,699 $ 240,018 91,808 $ 361,932 Shares issued on reinvestment of distributions.................. 5,569 17,707 10,543 11,710 172 2,845 Shares redeemed.................. (35,672) (77,330) (25,861) (36,070) (18,914) (64,902) Shares issued in 1 for 10 stock split.......................... (284,427) -- (268,394) -- (153,584) -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... (186,775) $ 258,251 (101,013) $ 215,658 (80,518) $ 299,875 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD DISCIPLINED EQUITY HARTFORD DIVIDEND AND HARTFORD FOCUS HLS FUND GROWTH HLS FUND HLS FUND --------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ------------ ------------ ---------- ----------- ---------- ----------- CLASS IB Shares sold...................... 28,959 $ 34,007 115,448 $ 232,771 17,365 $ 16,869 Shares issued on reinvestment of distributions.................. 148 143 7,052 15,891 185 151 Shares redeemed.................. (7,355) (7,105) (13,505) (22,763) (3,663) (3,590) Shares issued in 1 for 10 stock split.......................... (54,940) -- (169,150) -- (19,995) -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... (33,188) $ 27,045 (60,155) $ 225,899 (6,108) $ 13,430 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD GLOBAL HARTFORD GLOBAL FINANCIAL HARTFORD GLOBAL ADVISERS COMMUNICATIONS SERVICES HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ -------------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ----------- ------------ CLASS IB Shares sold...................... 8,058 $ 9,016 4,136 $ 2,232 5,275 $ 4,991 Shares issued on reinvestment of distributions.................. 9 9 5 9 15 58 Shares redeemed.................. (3,545) (3,634) (2,264) (616) (1,904) (886) Shares issued in 1 for 10 stock split.......................... (14,665) -- (3,758) -- (6,144) -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... (10,143) $ 5,391 (1,881) $ 1,625 (2,758) $ 4,163 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD GLOBAL HARTFORD GLOBAL HEALTH HARTFORD GLOBAL LEADERS TECHNOLOGY HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold...................... 20,087 $ 29,128 17,083 $ 25,478 21,490 $ 8,807 Shares issued on reinvestment of distributions.................. 887 1,082 52 437 -- -- Shares redeemed.................. (6,398) (8,034) (6,220) (8,125) (12,716) (4,337) Shares issued in 1 for 10 stock split.......................... (34,864) -- (40,358) -- (38,333) -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... (20,288) $ 22,176 (29,443) $ 17,790 (29,559) $ 4,470 =========== =========== ========== =========== ========== =========== </Table> 184 - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD GROWTH HARTFORD GROWTH OPPORTUNITIES HARTFORD HIGH YIELD HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold...................... 1,033 $ 9,056 329 $ 5,419 60,625 $ 63,346 Shares issued on reinvestment of distributions.................. -- -- -- 2,038 1,713 Shares redeemed.................. (115) (961) (6) (97) (27,423) (31,304) Shares issued in 1 for 10 stock split.......................... -- -- -- -- (55,428) -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... 918 $ 8,095 323 $ 5,322 (20,188) $ 33,755 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD INTERNATIONAL HARTFORD INTERNATIONAL HARTFORD INDEX CAPITAL APPRECIATION OPPORTUNITIES HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold...................... 14,140 $ 46,598 15,438 $ 13,697 174,550 $ 151,571 Shares issued on reinvestment of distributions.................. 801 2,735 7 27 237 431 Shares redeemed.................. (3,519) (9,635) (4,100) (3,150) (161,775) (143,959) Shares issued in 1 for 10 stock split.......................... (22,984) -- (15,295) -- (32,948) -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... (11,562) $ 39,698 (3,950) $ 10,574 (19,936) $ 8,043 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD INTERNATIONAL SMALL COMPANY HARTFORD MIDCAP HARTFORD MIDCAP VALUE HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold...................... 8,267 $ 8,409 3,241 $ 8,382 83,697 $ 91,830 Shares issued on reinvestment of distributions.................. 9 9 -- -- 13 114 Shares redeemed.................. (4,076) (3,610) (10,029) (20,151) (7,700) (7,068) Shares issued in 1 for 10 stock split.......................... (4,440) -- (44,529) -- (89,860) -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... (240) $ 4,808 (51,317) $ (11,769) (13,850) $ 84,876 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD MONEY MARKET HARTFORD MORTGAGE HARTFORD SMALL COMPANY HLS FUND SECURITIES HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold...................... 390,278 $ 390,278 73,211 $ 101,012 32,500 $ 42,028 Shares issued on reinvestment of distributions.................. 2,405 2,405 1,714 1,967 -- -- Shares redeemed.................. (282,898) (282,898) (11,231) (15,046) (9,931) (11,195) Shares issued in 1 for 10 stock split.......................... -- -- (76,646) -- (60,150) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... 109,785 $ 109,785 (12,952) $ 87,933 (37,581) $ 30,833 =========== =========== ========== =========== ========== =========== </Table> 185 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD SMALLCAP GROWTH HARTFORD STOCK HARTFORD U.S. GOVERNMENT HLS FUND HLS FUND SECURITIES HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold...................... 672 $ 7,939 30,948 $ 142,796 9,479 $ 104,947 Shares issued on reinvestment of distributions.................. -- -- 106 2,766 -- -- Shares redeemed.................. (62) (723) (9,557) (38,041) (587) (6,491) Shares issued in 1 for 10 stock split.......................... -- -- (70,496) -- -- -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease).......... 610 $ 7,216 (48,999) $ 107,521 8,892 $ 98,456 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD VALUE HARTFORD VALUE OPPORTUNITIES HLS FUND HLS FUND ------------------------- ------------------------ SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- CLASS IB Shares sold...................... 30,944 $ 31,129 318 $ 3,486 Shares issued on reinvestment of distributions.................. 40 306 -- -- Shares redeemed.................. (3,837) (3,372) (27) (297) Shares issued in 1 for 10 stock split.......................... (34,704) -- -- -- ----------- ----------- ---------- ----------- Net Increase (Decrease).......... (7,557) $ 28,063 291 $ 3,189 =========== =========== ========== =========== </Table> 10. LINE OF CREDIT: The Funds, except for the Hartford Money Market HLS Fund, participate in a $550,000 committed revolving line of credit facility. The facility is to be used for temporary or emergency purposes. The interest rate on borrowings varies depending on the nature of the loan. The facility also requires an eight basis point fee to be paid, to State Street Bank, based on the amount of the commitment, which has not been utilized. During the year ended December 31, 2003, the Funds did not have any borrowings under this facility. 11. REVERSE STOCK SPLITS: a) On November 22, 2002, a reverse stock split was declared for Hartford Advisers HL S Fund, Hartford Bond HLS Fund, Hartford Capital Appreciation HLS Fund, Hartford Disciplined Equity HLS Fund, Hartford Dividend and Growth HLS Fund, Hartford Focus HLS Fund, Hartford Global Advisers HLS Fund, Hartford Global Communications HLS Fund, Hartford Global Financial Services HLS Fund, Hartford Global Health HLS Fund, Hartford Global Leaders HLS Fund, Hartford Global Technology HLS Fund, Hartford High Yield HLS Fund, Hartford Index HLS Fund, Hartford International Capital Appreciation HLS Fund, Hartford International Opportunities HLS Fund, Hartford International Small Company HLS Fund, Hartford MidCap HLS Fund, Hartford MidCap Value HLS Fund, Hartford Mortgage Securities HLS Fund, Hartford Small Company HLS Fund, Hartford Stock HLS Fund and Hartford Value HLS Fund at a one to ten ratio. 186 - -------------------------------------------------------------------------------- b) On September 17, 1999, a reverse stock split was declared for the Class B shares of certain Funds, using the following reverse split percentages: <Table> <Caption> REVERSE SPLIT FUND PERCENTAGE ---- ------------- Hartford Advisers HLS Fund.................................. 29.67% Hartford Bond HLS Fund...................................... 93.07 Hartford Capital Appreciation HLS Fund...................... 15.42 Hartford Dividend and Growth HLS Fund....................... 44.38 Hartford International Opportunities HLS Fund............... 71.63 Hartford Small Company HLS Fund............................. 74.61 Hartford Stock HLS Fund..................................... 9.27 </Table> 12. FUND MERGERS REORGANIZATION OF CERTAIN SERIES OF HARTFORD HLS SERIES FUND II, INC. At a special meeting of shareholders, held on January 15, 2003, shareholders of Hartford American Leaders HLS Fund, Hartford Blue Chip Stock II HLS Fund, Hartford Global Equity HLS Fund, Hartford International Stock II HLS Fund and Hartford Investors Growth HLS Fund (each a "Target Fund") approved a proposed Agreement and Plan of Reorganization between Hartford HLS Series Fund II, Inc. and the Hartford Series Fund, Inc. (the "Plan"). Hartford American Leaders HLS Fund merged into Hartford Stock HLS Fund Hartford Blue Chip Stock II HLS Fund merged into Hartford Disciplined Equity HLS Fund Hartford Global Equity HLS Fund merged into Hartford Global Leaders HLS Fund Hartford International Stock II HLS Fund merged into Hartford International Opportunities HLS Fund Hartford Investors Growth HLS Fund merged into Hartford Disciplined Equity HLS Fund Under the terms of the Plan, and pursuant to the approval by shareholders of each Target Fund, the assets of each Target Fund were acquired by the corresponding Acquiring Fund on January 24, 2003. Each Acquiring Fund acquired the respective Target Fund's assets in exchange for the Acquiring Fund's shares, which were distributed pro rata by each Target Fund to the holders of its shares on January 24, 2003, in complete liquidation of the Target Fund. 187 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- The mergers were accomplished by tax free exchanges as detailed below: <Table> <Caption> HARTFORD GLOBAL LEADERS HLS FUND CLASS IA CLASS IB -------------------------------- ---------- -------- Net assets of Hartford Global Equity HLS Fund on January 24, 2003...................................................... $ 11,029 $ -- Hartford Global Equity HLS Fund shares exchanged............ 1,498 -- Hartford Global Leaders HLS Fund shares issued.............. 953 -- Net assets of Hartford Global Leaders HLS Fund immediately before the merger......................................... $ 574,006 $ 57,372 Net assets of Hartford Global Leaders HLS Fund immediately after the merger.......................................... $ 585,038 $ 57,372 </Table> <Table> <Caption> HARTFORD DISCIPLINED EQUITY HLS FUND CLASS IA CLASS IB ------------------------------------ ---------- -------- Net assets of Hartford Blue Chip Stock II HLS Fund on January 24, 2003.......................................... $ 15,890 $ -- Hartford Blue Chip Stock II HLS Fund shares exchanged....... 3,107 -- Hartford Disciplined Equity HLS Fund shares issued.......... 1,843 -- Net assets of Hartford Investors Growth HLS Fund on January 24, 2003.................................................. $ 13,716 $ -- Hartford Investors Growth HLS Fund shares exchanged......... 2,740 -- Hartford Disciplined Equity HLS Fund shares issued.......... 1,591 -- Net assets of Hartford Disciplined Equity HLS Fund immediately before the merger............................. $ 454,370 $ 60,268 Net assets of Hartford Disciplined Equity HLS Fund immediately after the merger.............................. $ 483,976 $ 60,268 </Table> <Table> <Caption> HARTFORD INTERNATIONAL OPPORTUNITIES HLS FUND CLASS IA CLASS IB --------------------------------------------- ---------- -------- Net Assets of Hartford International Stock II HLS Fund on January 24, 2003.......................................... $ 22,447 $ -- Hartford International Stock II HLS Fund shares exchanged... 3,304 -- Hartford International Opportunities HLS Fund shares issued.................................................... 3,008 -- Net assets of Hartford International Opportunities HLS Fund immediately before the merger............................. $ 684,409 $ 27,363 Net assets of Hartford International Opportunities HLS Fund immediately after the merger.............................. $ 706,856 $ 27,363 </Table> <Table> <Caption> HARTFORD STOCK HLS FUND CLASS IA CLASS IB ----------------------- ---------- -------- Net assets of Hartford American Leaders HLS Fund on January 24, 2003.................................................. $ 14,137 $ -- Hartford American Leaders HLS Fund shares exchanged......... 1,787 -- Hartford Stock HLS Fund shares issued....................... 406 -- Net assets of Hartford Stock HLS Fund immediately before the merger.................................................... $4,971,437 $298,456 Net assets of Hartford Stock HLS Fund immediately after the merger.................................................... $4,985,574 $298,456 </Table> The Hartford American Leaders HLS Fund, Hartford Blue Chip Stock II HLS Fund, Hartford Global Equity HLS Fund, Hartford International Stock II and Hartford Investors Growth HLS Fund had the following unrealized appreciation (depreciation), accumulated net realized gains (losses) and capital stock as of January 24, 2003: <Table> <Caption> UNREALIZED ACCUMULATED APPRECIATION NET REALIZED CAPITAL FUND (DEPRECIATION) (LOSSES) STOCK ---- -------------- ------------ ------- Hartford American Leaders HLS Fund.......................... $(2,855) $ (35) $18,579 Hartford Blue Chip Stock II HLS Fund........................ (4,122) (70) 28,311 Hartford Global Equity HLS Fund............................. (1,039) (37) 14,557 Hartford International Stock II............................. (8,812) (147) 42,026 Hartford Investors Growth HLS Fund.......................... (453) (16) 24,976 </Table> REORGANIZATION OF CERTAIN SERIES OF HARTFORD HLS SERIES FUND II, INC. At a special meeting of shareholders, held on April 29, 2002, shareholders of Fortis Asset Allocation Series, Fortis Global Growth Series, Fortis Growth & Income Series, Fortis High Yield Series, Fortis Diversified Income Series, Fortis S&P 500 Index Series and Fortis Money Market 188 - -------------------------------------------------------------------------------- Series (each a "Fortis Fund") approved a proposed Agreement and Plan of Reorganization between Hartford HLS Series Fund II, Inc. and the Hartford HLS Mutual Funds (the "Plan"). Fortis Asset Allocation Series merged into Hartford Advisers HLS Fund, Inc. Fortis Global Growth Series merged into Hartford Global Leaders HLS Fund Fortis Growth & Income Series merged into Hartford Disciplined Equity HLS Fund Fortis High Yield Series merged into Hartford High Yield HLS Fund Fortis Diversified Income Series merged into Hartford Bond HLS Fund, Inc. Fortis S&P 500 Index Series merged into Hartford Index HLS Fund, Inc. Fortis Money Market Series merged into Hartford Money Market HLS Fund, Inc. Under the terms of the Plan, and pursuant to the approval by shareholders of each Fortis Fund, the assets of each Fortis Fund were acquired by a corresponding series of the Hartford HLS Mutual Funds (the "Hartford Fund") on April 30, 2002. Each Hartford Fund acquired the Fortis Fund's assets in exchange for the Hartford Fund's shares, which were distributed pro rata by each Fortis Fund to the holders of its shares on April 30, 2002, in complete liquidation of the Fortis Fund. The mergers were accomplished by tax free exchanges as detailed below: <Table> <Caption> HARTFORD ADVISERS HLS FUND CLASS IA CLASS IB -------------------------- ----------- -------- Net assets of Fortis Asset Allocation on April 30, 2002..... $ 488,111 $ -- Fortis Asset Allocation shares exchanged.................... 34,477 -- Hartford Advisers shares issued............................. 220,049 -- Net assets of Hartford Advisers immediately before the merger...................................................... $11,086,683 $588,603 Net assets of Hartford Advisers immediately after the merger...................................................... $11,574,794 $588,603 </Table> <Table> <Caption> HARTFORD GLOBAL LEADERS HLS FUND CLASS IA CLASS IB -------------------------------- ----------- -------- Net assets of Fortis Global Growth on April 30, 2002........ $ 253,327 $ -- Fortis Global Growth shares exchanged....................... 17,918 -- Hartford Global Leaders shares issued....................... 183,081 -- Net assets of Hartford Global Leaders immediately before the merger.................................................... $ 469,286 $ 52,090 Net assets of Hartford Global Leaders immediately after the merger.................................................... $ 722,613 $ 52,090 </Table> <Table> <Caption> HARTFORD DISCIPLINED EQUITY HLS FUND CLASS IA CLASS IB ------------------------------------ ----------- -------- Net assets of Fortis Growth & Income on April 30, 2002...... $ 200,110 $ -- Fortis Growth & Income shares exchanged..................... 15,260 -- Hartford Disciplined Equity shares issued................... 186,136 -- Net assets of Hartford Disciplined Equity immediately before the merger................................................ $ 395,598 $ 51,483 Net assets of Hartford Disciplined Equity immediately after the merger................................................ $ 595,708 $ 51,483 </Table> <Table> <Caption> HARTFORD HIGH YIELD HLS FUND CLASS IA CLASS IB ---------------------------- ----------- -------- Net assets of Fortis High Yield on April 30, 2002........... $ 48,048 $ -- Fortis High Yield shares exchanged.......................... 8,528 -- Hartford High Yield shares issued........................... 50,751 -- Net assets of Hartford High Yield immediately before the merger.................................................... $ 142,974 $ 34,629 Net assets of Hartford High Yield immediately after the merger.................................................... $ 191,022 $ 34,629 </Table> 189 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD BOND HLS FUND CLASS IA CLASS IB ---------------------- ----------- -------- Net assets of Fortis Diversified Income on April 30, 2002... $ 90,378 $ -- Fortis Diversified Income shares exchanged.................. 9,225 -- Hartford Bond shares issued................................. 77,738 -- Net assets of Hartford Bond immediately before the merger... $ 1,582,247 $194,002 Net assets of Hartford Bond immediately after the merger.... $ 1,672,625 $194,002 </Table> <Table> <Caption> HARTFORD INDEX HLS FUND CLASS IA CLASS IB ----------------------- ----------- -------- Net assets of Fortis S&P 500 on April 30, 2002.............. $ 293,220 $ -- Fortis S&P 500 Index shares exchanged....................... 19,110 -- Hartford Index shares issued................................ 97,999 -- Net assets of Hartford Index immediately before the merger.................................................... $ 1,846,941 $ 54,976 Net assets of Hartford Index immediately after the merger... $ 2,140,161 $ 54,976 </Table> <Table> <Caption> HARTFORD MONEY MARKET HLS FUND CLASS IA CLASS IB ------------------------------ ----------- -------- Net assets of Fortis Money Market on April 30, 2002......... $ 122,443 $ -- Fortis Money Market shares exchanged........................ 11,346 -- Hartford Money Market shares issued......................... 122,443 -- Net assets of Hartford Money Market immediately before the merger.................................................... $ 1,794,364 $166,561 Net assets of Hartford Money Market immediately after the merger.................................................... $ 1,916,807 $166,561 </Table> The Fortis Asset Allocation Series, Fortis Global Growth Series, Fortis Growth & Income Series, Fortis High Yield Series, Fortis Diversified Income Series, Fortis S&P 500 Index Series and Fortis Money Market Series had the following unrealized appreciation (depreciation), accumulated net realized gains (losses) and capital stock as of April 30, 2002: <Table> <Caption> UNREALIZED ACCUMULATED APPRECIATION NET REALIZED FUND (DEPRECIATION) (LOSSES) CAPITAL STOCK ---- -------------- ------------ ------------- Fortis Asset Allocation Series............................. $(28,666) $(12,278) $529,055 Fortis Global Growth Series................................ 9,623 (3,966) 247,671 Fortis Growth and Income Series............................ (10,883) (792) 211,785 Fortis High Yield Series................................... (11,371) (20,858) 80,264 Fortis Diversified Income Series........................... (3,540) (8,690) 102,606 Fortis S&P 500 Index Series................................ (20,814) -- 293,220 Fortis Money Market Series................................. -- -- 122,443 </Table> 13. FUND MERGERS SUBSEQUENT TO DECEMBER 31, 2003: PROPOSED REORGANIZATION OF HARTFORD MULTISECTOR BOND HLS FUND IN HARTFORD HLS SERIES FUND II, INC. At a meeting held on November 4, 2003, the Boards of Directors of the Hartford Multisector Bond HLS Fund and the Hartford Bond HLS Fund approved, subject to shareholder approval, a reorganization of Hartford Multisector Bond HLS Fund into Hartford Bond HLS Fund. A special meeting of shareholders will be held on April 20, 2004. Shareholders of Hartford Multisector Bond HLS Fund will vote on a proposed Agreement and Plan of Reorganization between Hartford HLS Series Fund II, Inc. and Hartford Series Fund, Inc. Under the terms of the Plan, and pursuant to the approval by shareholders of the Hartford Multisector Bond HLS Fund, the assets of the Hartford Multisector Bond HLS Fund would be acquired by the Hartford Bond HLS Fund on or about April 30, 2004. The Hartford Bond HLS Fund would acquire the Hartford Multisector Bond HLS Fund's assets in exchange for the Hartford Bond HLS Fund's shares, which would be distributed pro rata by the Hartford Multisector Bond HLS Fund to the holders of its shares on April 30, 2004, in complete liquidation of the Hartford Multisector Bond HLS Fund. 190 (This page intentionally left blank) 191 HARTFORD HLS MUTUAL FUNDS FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- <Table> <Caption> -- SELECTED PER-SHARE DATA (4) -- ---------------------------------------------------------------------------------------- NET REALIZED AND NET ASSET NET UNREALIZED TOTAL DIVIDENDS VALUE AT INVESTMENT GAIN FROM FROM NET BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME --------- ---------- ------------ ---------- ---------- HARTFORD ADVISERS HLS FUND For the Year Ended December 31, 2003 Class IA..................... $19.59 $ 0.42 $ 3.18 $ 3.60 $ (0.52) Class IB..................... 19.72 0.41 3.16 3.57 (0.48) For the Year Ended December 31, 2002 Class IA..................... 23.44(5) 0.51(5) (4.10)(5) (3.59)(5) (0.26)(5) Class IB..................... 23.60(5) 0.46(5) (4.10)(5) (3.64)(5) (0.24)(5) For the Year Ended December 31, 2001 Class IA..................... 26.65(5) 0.64(5) (1.85)(5) (1.21)(5) (0.73)(5) Class IB..................... 26.63(5) 0.50(5) (1.77)(5) (1.27)(5) (0.49)(5) For the Year Ended December 31, 2000 Class IA..................... 29.65(5) 0.68(5) (0.88)(5) (0.20)(5) (0.23)(5) Class IB..................... 29.66(5) 0.74(5) (0.98)(5) (0.24)(5) (0.22)(5) For the Year Ended December 31, 1999 Class IA..................... 29.85(5) 0.68(5) 2.21(5) 2.89(5) (0.63)(5) Class IB..................... 35.77(5)(6) 0.61(5)(6) 2.21(5)(6) 2.82(5)(6) (0.64)(5)(6) HARTFORD BOND HLS FUND For the Year Ended December 31, 2003 Class IA..................... 11.95 0.36 0.57 0.93 (0.50) Class IB..................... 11.90 0.40 0.50 0.90 (0.49) For the Year Ended December 31, 2002 Class IA..................... 11.46(5) 0.56(5) (0.01)(5) 0.55(5) (0.05)(5) Class IB..................... 11.43(5) 0.46(5) 0.07(5) 0.53(5) (0.05)(5) For the Year Ended December 31, 2001 Class IA..................... 11.08(5) 0.46(5) 0.48(5) 0.94(5) (0.56)(5) Class IB..................... 11.07(5) 0.41(5) 0.50(5) 0.91(5) (0.55)(5) For the Year Ended December 31, 2000 Class IA..................... 9.94(5) 0.69(5) 0.50(5) 1.19(5) (0.05)(5) Class IB..................... 9.95(5) 0.61(5) 0.56(5) 1.17(5) (0.05)(5) For the Year Ended December 31, 1999 Class IA..................... 10.81(5) 0.62(5) (0.84)(5) (0.22)(5) (0.58)(5) Class IB..................... 10.83(5)(6) 0.61(5)(6) (0.84)(5)(6) (0.23)(5)(6) (0.57)(5)(6) HARTFORD CAPITAL APPRECIATION HLS FUND For the Year Ended December 31, 2003 Class IA..................... 31.70 0.26 13.17 13.43 (0.22) Class IB..................... 31.63 0.19 13.10 13.29 (0.16) For the Year Ended December 31, 2002 Class IA..................... 39.75(5) 0.15(5) (8.01)(5) (7.86)(5) (0.19)(5) Class IB..................... 39.68(5) 0.12(5) (8.03)(5) (7.91)(5) (0.14)(5) For the Year Ended December 31, 2001 Class IA..................... 59.26(5) 0.21(5) (3.36)(5) (3.15)(5) (0.27)(5) Class IB..................... 59.23(5) 0.06(5) (3.29)(5) (3.23)(5) (0.23)(5) For the Year Ended December 31, 2000 Class IA..................... 60.95(5) 0.41(5) 7.57(5) 7.98(5) (0.39)(5) Class IB..................... 60.98(5) (0.77)(5) 8.64(5) 7.87(5) (0.34)(5) For the Year Ended December 31, 1999 Class IA..................... 47.59(5) 0.23(5) 16.43(5) 16.66(5) (0.18)(5) Class IB..................... 64.37(5)(6) 1.50(5)(6) 15.03(5)(6) 16.53(5)(6) (0.13)(5)(6) <Caption> -- SELECTED PER-SHARE DATA (4) -- -------------------------------------------------------- DISTRIBUTIONS DIVIDENDS FROM IN EXCESS OF NET REALIZED DISTRIBUTIONS NET INVESTMENT GAINS ON FROM INCOME INVESTMENTS CAPITAL -------------- ------------- ------------- HARTFORD ADVISERS HLS FUND For the Year Ended December 31, 2003 Class IA..................... $ -- $ -- $ -- Class IB..................... -- -- -- For the Year Ended December 31, 2002 Class IA..................... --(5) --(5) --(5) Class IB..................... --(5) --(5) --(5) For the Year Ended December 31, 2001 Class IA..................... --(5) (1.27)(5) --(5) Class IB..................... --(5) (1.27)(5) --(5) For the Year Ended December 31, 2000 Class IA..................... --(5) (2.57)(5) --(5) Class IB..................... --(5) (2.57)(5) --(5) For the Year Ended December 31, 1999 Class IA..................... --(5) (2.46)(5) --(5) Class IB..................... --(5)(6) (8.29)(5)(6) --(5)(6) HARTFORD BOND HLS FUND For the Year Ended December 31, 2003 Class IA..................... -- (0.06) -- Class IB..................... -- (0.06) -- For the Year Ended December 31, 2002 Class IA..................... --(5) (0.01)(5) --(5) Class IB..................... --(5) (0.01)(5) --(5) For the Year Ended December 31, 2001 Class IA..................... --(5) --(5) --(5) Class IB..................... --(5) --(5) --(5) For the Year Ended December 31, 2000 Class IA..................... --(5) --(5) --(5) Class IB..................... --(5) --(5) --(5) For the Year Ended December 31, 1999 Class IA..................... --(5) (0.07)(5) --(5) Class IB..................... --(5)(6) (0.08)(5)(6) --(5)(6) HARTFORD CAPITAL APPRECIATION HLS FUND For the Year Ended December 31, 2003 Class IA..................... -- -- -- Class IB..................... -- -- -- For the Year Ended December 31, 2002 Class IA..................... --(5) --(5) --(5) Class IB..................... --(5) --(5) --(5) For the Year Ended December 31, 2001 Class IA..................... --(5) (16.09)(5) --(5) Class IB..................... --(5) (16.09)(5) --(5) For the Year Ended December 31, 2000 Class IA..................... --(5) (9.28)(5) --(5) Class IB..................... --(5) (9.28)(5) --(5) For the Year Ended December 31, 1999 Class IA..................... --(5) (3.12)(5) --(5) Class IB..................... --(5)(6) (19.79)(5)(6) --(5)(6) </Table> See Notes to Financial Statements. 192 - -------------------------------------------------------------------------------- <Table> <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - ------------------------------------------------------------------------------------------------------------------- RATIO OF NET INCREASE NET ASSETS EXPENSES (DECREASE) IN NET ASSET AT END OF TO AVERAGE TOTAL NET ASSETS VALUE AT TOTAL PERIOD NET ASSETS DISTRIBUTIONS VALUE END OF PERIOD RETURN(8) (000'S OMITTED) AFTER WAIVERS ------------- ------------- ------------- --------- --------------- ------------- $ (0.52) $ 3.08 $22.67 18.49% $10,358,449 0.67% (0.48) 3.09 22.81 18.20 1,263,641 0.92 (0.26)(5) (3.85)(5) 19.59(5) (13.79) 9,249,397 0.67 (0.24)(5) (3.88)(5) 19.72(5) (13.99) 672,078 0.90 (2.00)(5) (3.21)(5) 23.44(5) (4.64) 11,836,564 0.66 (1.76)(5) (3.03)(5) 23.60(5) (4.81) 521,205 0.84 (2.80)(5) (3.00)(5) 26.65(5) (0.75) 13,430,507 0.66 (2.79)(5) (3.03)(5) 26.63(5) (0.92) 252,247 0.84 (3.09)(5) (0.20)(5) 29.65(5) 10.59 14,082,895 0.65 (8.93)(5)(6) (6.11)(5)(6) 29.66(5)(6) 10.39 137,318 0.83 (0.56) 0.37 12.32 7.85 2,332,343 0.50 (0.55) 0.35 12.25 7.58 734,768 0.75 (0.06)(5) 0.49(5) 11.95(5) 10.08 2,145,266 0.51 (0.06)(5) 0.47(5) 11.90(5) 9.83 382,864 0.75 (0.56)(5) 0.38(5) 11.46(5) 8.68 1,549,698 0.51 (0.55)(5) 0.36(5) 11.43(5) 8.49 152,254 0.69 (0.05)(5) 1.14(5) 11.08(5) 11.99 1,033,043 0.52 (0.05)(5) 1.12(5) 11.07(5) 11.79 31,551 0.70 (0.65)(5) (0.87)(5) 9.94(5) (2.02) 978,861 0.52 (0.65)(5)(6) (0.88)(5)(6) 9.95(5)(6) (2.19) 15,818 0.70 (0.22) 13.21 44.91 42.38 8,912,749 0.69 (0.16) 13.13 44.76 42.02 1,579,399 0.94 (0.19)(5) (8.05)(5) 31.70(5) (19.70) 6,240,859 0.69 (0.14)(5) (8.05)(5) 31.63(5) (19.88) 588,013 0.92 (16.36)(5) (19.51)(5) 39.75(5) (6.94) 8,734,600 0.68 (16.32)(5) (19.55)(5) 39.68(5) (7.10) 393,241 0.86 (9.67)(5) (1.69)(5) 59.26(5) 13.22 9,581,897 0.66 (9.62)(5) (1.75)(5) 59.23(5) 13.02 136,058 0.84 (3.30)(5) 13.36(5) 60.95(5) 37.46 7,963,003 0.66 (19.92)(5)(6) (3.39)(5)(6) 60.98(5)(6) 37.21 22,993 0.84 <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - --- --------------------------------------- RATIO OF RATIO OF NET EXPENSES INVESTMENT TO AVERAGE INCOME PORTFOLIO NET ASSETS TO AVERAGE TURNOVER BEFORE WAIVERS NET ASSETS RATE(7) -------------- ---------- --------- 0.67% 2.03% 48% 0.92 1.78 48 0.67 2.29 47 0.92 2.07 47 0.66 2.51 34 0.91 2.33 34 0.66 2.47 40 0.91 2.29 40 0.66 2.46 38 0.91 2.28 38 0.50 3.74 215 0.75 3.49 215 0.51 5.58 108 0.76 5.34 108 0.51 5.87 185 0.76 5.69 185 0.52 6.54 169 0.77 6.36 169 0.52 6.09 111 0.77 5.91 111 0.69 0.77 94 0.94 0.52 94 0.69 0.64 94 0.94 0.41 94 0.68 0.57 92 0.93 0.39 92 0.66 0.64 108 0.91 0.46 108 0.66 0.46 66 0.91 0.28 66 </Table> 193 HARTFORD HLS MUTUAL FUNDS FINANCIAL HIGHLIGHTS -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> -- SELECTED PER-SHARE DATA (4) -- ---------------------------------------------------------------------------------------- NET REALIZED AND NET ASSET NET UNREALIZED TOTAL DIVIDENDS VALUE AT INVESTMENT GAIN FROM FROM NET BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME --------- ---------- ------------ ---------- ---------- HARTFORD DISCIPLINED EQUITY HLS FUND For the Year Ended December 31, 2003 Class IA..................... $ 8.80 $ 0.07 $ 2.45 $ 2.52 $ (0.12) Class IB..................... 8.75 0.05 2.43 2.48 (0.09) For the Year Ended December 31, 2002 Class IA..................... 11.72(5) 0.05(5) (2.97)(5) (2.92)(5) --(5) Class IB..................... 11.67(5) 0.04(5) (2.96)(5) (2.92)(5) --(5) For the Year Ended December 31, 2001 Class IA..................... 13.26(5) 0.06(5) (1.10)(5) (1.04)(5) --(5) Class IB..................... 13.23(5) 0.05(5) (1.11)(5) (1.06)(5) --(5) For the Year Ended December 31, 2000 Class IA..................... 14.32(5) 0.05(5) (0.85)(5) (0.80)(5) (0.05)(5) Class IB..................... 14.30(5) (0.08)(5) (0.74)(5) (0.82)(5) (0.04)(5) For the Year Ended December 31, 1999 Class IA..................... 11.86(5) 0.04(5) 2.55(5) 2.59(5) (0.04)(5) Class IB..................... 11.85(5) 0.06(5) 2.50(5) 2.56(5) (0.02)(5) HARTFORD DIVIDEND AND GROWTH HLS FUND For the Year Ended December 31, 2003 Class IA..................... 15.09 0.24 3.79 4.03 (0.25) Class IB..................... 15.07 0.21 3.76 3.97 (0.22) For the Year Ended December 31, 2002 Class IA..................... 18.80(5) 0.25(5) (3.64)(5) (3.39)(5) (0.23)(5) Class IB..................... 18.79(5) 0.24(5) (3.66)(5) (3.42)(5) (0.21)(5) For the Year Ended December 31, 2001 Class IA..................... 21.24(5) 0.31(5) (1.14)(5) (0.83)(5) (0.30)(5) Class IB..................... 21.24(5) 0.39(5) (1.25)(5) (0.86)(5) (0.28)(5) For the Year Ended December 31, 2000 Class IA..................... 21.49(5) 0.35(5) 1.78(5) 2.13(5) (0.34)(5) Class IB..................... 21.51(5) 0.40(5) 1.69(5) 2.09(5) (0.32)(5) For the Year Ended December 31, 1999 Class IA..................... 21.60(5) 0.34(5) 0.75(5) 1.09(5) (0.35)(5) Class IB..................... 22.67(5)(6) 0.24(5)(6) 0.77(5)(6) 1.01(5)(6) (0.34)(5)(6) HARTFORD EQUITY INCOME FUND From Inception October 31, 2003 through December 31, 2003 Class IA..................... 10.00 0.02 0.75 0.77 (0.02) Class IB..................... 10.00 0.02 0.74 0.76 (0.02) HARTFORD FOCUS HLS FUND For the Year Ended December 31, 2003 Class IA..................... 7.74 0.03 2.16 2.19 (0.03) Class IB..................... 7.71 0.02 2.15 2.17 (0.02) For the Year Ended December 31, 2002 Class IA..................... 10.38(5) 0.03(5) (2.66)(5) (2.63)(5) --(5) Class IB..................... 10.37(5) 0.02(5) (2.67)(5) (2.65)(5) --(5) From inception April 30, 2001 through December 31, 2001 Class IA..................... 10.00(5) 0.02(5) 0.38(5) 0.40(5) (0.02)(5) Class IB..................... 10.00(5) 0.01(5) 0.37(5) 0.38(5) (0.01)(5) <Caption> -- SELECTED PER-SHARE DATA (4) -- -------------------------------------------------------- DISTRIBUTIONS DIVIDENDS FROM IN EXCESS OF NET REALIZED DISTRIBUTIONS NET INVESTMENT GAINS ON FROM INCOME INVESTMENTS CAPITAL -------------- ------------- ------------- HARTFORD DISCIPLINED EQUITY HLS FUND For the Year Ended December 31, 2003 Class IA..................... $ -- $ -- $ -- Class IB..................... -- -- -- For the Year Ended December 31, 2002 Class IA..................... --(5) --(5) --(5) Class IB..................... --(5) --(5) --(5) For the Year Ended December 31, 2001 Class IA..................... --(5) (0.50)(5) --(5) Class IB..................... --(5) (0.50)(5) --(5) For the Year Ended December 31, 2000 Class IA..................... --(5) (0.21)(5) --(5) Class IB..................... --(5) (0.21)(5) --(5) For the Year Ended December 31, 1999 Class IA..................... --(5) (0.09)(5) --(5) Class IB..................... --(5) (0.09)(5) --(5) HARTFORD DIVIDEND AND GROWTH HLS FUND For the Year Ended December 31, 2003 Class IA..................... -- (0.10) -- Class IB..................... -- (0.10) -- For the Year Ended December 31, 2002 Class IA..................... --(5) (0.09)(5) --(5) Class IB..................... --(5) (0.09)(5) --(5) For the Year Ended December 31, 2001 Class IA..................... --(5) (1.31)(5) --(5) Class IB..................... --(5) (1.31)(5) --(5) For the Year Ended December 31, 2000 Class IA..................... --(5) (2.04)(5) --(5) Class IB..................... --(5) (2.04)(5) --(5) For the Year Ended December 31, 1999 Class IA..................... --(5) (0.85)(5) --(5) Class IB..................... --(5)(6) (1.83)(5)(6) --(5)(6) HARTFORD EQUITY INCOME FUND From Inception October 31, 2003 through December 31, 2003 Class IA..................... -- -- -- Class IB..................... -- -- -- HARTFORD FOCUS HLS FUND For the Year Ended December 31, 2003 Class IA..................... -- -- -- Class IB..................... -- -- -- For the Year Ended December 31, 2002 Class IA..................... --(5) (0.01)(5) --(5) Class IB..................... --(5) (0.01)(5) --(5) From inception April 30, 2001 through December 31, 2001 Class IA..................... --(5) --(5) --(5) Class IB..................... --(5) --(5) --(5) </Table> See Notes to Financial Statements. 194 - -------------------------------------------------------------------------------- <Table> <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - ------------------------------------------------------------------------------------------------------------------- RATIO OF NET INCREASE NET ASSETS EXPENSES (DECREASE) IN NET ASSET AT END OF TO AVERAGE TOTAL NET ASSETS VALUE AT TOTAL PERIOD NET ASSETS DISTRIBUTIONS VALUE END OF PERIOD RETURN(8) (000'S OMITTED) AFTER WAIVERS ------------- ------------- ------------- --------- --------------- ------------- $ (0.12) $ 2.40 $11.20 28.82% $ 685,888 0.78% (0.09) 2.39 11.14 28.50 155,810 1.03 --(5) (2.92)(5) 8.80(5) (24.65) 460,807 0.79 --(5) (2.92)(5) 8.75(5) (24.85) 58,930 1.02 (0.50)(5) (1.54)(5) 11.72(5) (8.02) 416,013 0.79 (0.50)(5) (1.56)(5) 11.67(5) (8.18) 46,599 0.97 (0.26)(5) (1.06)(5) 13.26(5) (5.64) 379,905 0.79 (0.25)(5) (1.07)(5) 13.23(5) (5.81) 14,898 0.97 (0.13)(5) 2.46(5) 14.32(5) 21.82 201,857 0.82 (0.11)(5) 2.45(5) 14.30(5) 21.61 14 1.00 (0.35) 3.68 18.77 26.80 3,927,415 0.69 (0.32) 3.65 18.72 26.48 902,779 0.94 (0.32)(5) (3.71)(5) 15.09(5) (14.23) 2,810,625 0.69 (0.30)(5) (3.72)(5) 15.07(5) (14.42) 327,617 0.92 (1.61)(5) (2.44)(5) 18.80(5) (4.04) 3,190,773 0.68 (1.59)(5) (2.45)(5) 18.79(5) (4.21) 153,848 0.86 (2.38)(5) (0.25)(5) 21.24(5) 10.95 3,189,857 0.68 (2.36)(5) (0.27)(5) 21.24(5) 10.75 35,415 0.86 (1.20)(5) (0.11)(5) 21.49(5) 5.31 3,207,733 0.68 (2.17)(5)(6) (1.16)(5)(6) 21.51(5)(6) 5.12 16,087 0.86 (0.02) 0.75 10.75 7.65(2) 8,511 1.13(1) (0.02) 0.74 10.74 7.59(2) 1,609 1.38(1) (0.03) 2.16 9.90 28.37 49,891 0.90 (0.02) 2.15 9.86 28.05 39,674 1.15 (0.01)(5) (2.64)(5) 7.74(5) (24.59) 35,237 0.88 (0.01)(5) (2.66)(5) 7.71(5) (24.76) 18,361 1.11 (0.02)(5) 0.38(5) 10.38(5) 3.94(2) 32,968 0.95(1) (0.01)(5) 0.37(5) 10.37(5) 3.83(2) 8,803 1.13(1) <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - --- --------------------------------------- RATIO OF RATIO OF NET EXPENSES INVESTMENT TO AVERAGE INCOME PORTFOLIO NET ASSETS TO AVERAGE TURNOVER BEFORE WAIVERS NET ASSETS RATE(7) -------------- ---------- --------- 0.78% 0.89% 73% 1.03 0.64 73 0.79 0.65 92 1.04 0.42 92 0.79 0.54 85 1.04 0.36 85 0.79 0.41 73 1.04 0.23 73 0.82 0.63 54 1.07 0.45 54 0.69 1.61 31 0.94 1.36 31 0.69 1.56 43 0.94 1.33 43 0.68 1.66 61 0.93 1.48 61 0.68 1.70 59 0.93 1.52 59 0.68 1.60 56 0.93 1.42 56 1.13(1) 1.50(1) 2 1.38(1) 1.25(1) 2 0.90 0.40 129 1.15 0.15 129 0.88 0.40 212 1.13 0.17 212 0.95(1) 0.47(1) 113 1.20(1) 0.29(1) 113 </Table> 195 HARTFORD HLS MUTUAL FUNDS FINANCIAL HIGHLIGHTS -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> -- SELECTED PER-SHARE DATA (4) -- --------------------------------------------------------------- NET REALIZED AND NET ASSET NET UNREALIZED TOTAL DIVIDENDS VALUE AT INVESTMENT GAIN FROM FROM NET BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME --------- ---------- ------------ ---------- ---------- HARTFORD GLOBAL ADVISERS HLS FUND For the Year Ended December 31, 2003 Class IA.............................. $ 9.16 $ 0.12 $ 1.95 $ 2.07 $ (0.08) Class IB.............................. 9.12 0.11 1.93 2.04 (0.07) For the Year Ended December 31, 2002 Class IA.............................. 10.07(5) (0.50)(5) (0.41)(5) (0.91)(5) --(5) Class IB.............................. 10.05(5) (0.41)(5) (0.52)(5) (0.93)(5) --(5) For the Year Ended December 31, 2001 Class IA.............................. 11.49(5) 0.23(5) (0.94)(5) (0.71)(5) (0.08)(5) Class IB.............................. 11.47(5) 0.44(5) (1.16)(5) (0.72)(5) (0.07)(5) For the Year Ended December 31, 2000 Class IA.............................. 13.97(5) 0.46(5) (1.34)(5) (0.88)(5) (0.71)(5) Class IB.............................. 13.97(5) 0.48(5) (1.38)(5) (0.90)(5) (0.71)(5) For the Year Ended December 31, 1999 Class IA.............................. 11.55(5) 0.40(5) 2.27(5) 2.67(5) (0.25)(5) From inception November 9, 1999 through December 31, 1999 Class IB.............................. 13.00(5) 0.04(5) 1.18(5) 1.22(5) (0.25)(5) HARTFORD GLOBAL COMMUNICATIONS HLS FUND For the Year Ended December 31, 2003 Class IA.............................. 4.47 0.01 2.69 2.70 -- Class IB.............................. 4.47 0.01 2.67 2.68 -- For the Year Ended December 31, 2002 Class IA.............................. 6.37(5) 0.01(5) (1.89)(5) (1.88)(5) (0.02)(5) Class IB.............................. 6.37(5) 0.01(5) (1.89)(5) (1.88)(5) (0.02)(5) For the Year Ended December 31, 2001 Class IA.............................. 10.00(5) 0.03(5) (3.62)(5) (3.59)(5) (0.04)(5) Class IB.............................. 10.00(5) 0.02(5) (3.62)(5) (3.60)(5) (0.03)(5) HARTFORD GLOBAL FINANCIAL SERVICES HLS FUND For the Year Ended December 31, 2003 Class IA.............................. 7.51 0.13 2.14 2.27 (0.13) Class IB.............................. 7.50 0.11 2.13 2.24 (0.11) For the Year Ended December 31, 2002 Class IA.............................. 9.37(5) 0.08(5) (1.86)(5) (1.78)(5) (0.08)(5) Class IB.............................. 9.36(5) 0.07(5) (1.86)(5) (1.79)(5) (0.07)(5) For the Year Ended December 31, 2001 Class IA.............................. 10.00(5) 0.07(5) (0.66)(5) (0.59)(5) (0.04)(5) Class IB.............................. 10.00(5) 0.04(5) (0.65)(5) (0.61)(5) (0.03)(5) HARTFORD GLOBAL HEALTH HLS FUND For the Year Ended December 31, 2003 Class IA.............................. 11.91 0.01 3.81 3.82 (0.01) Class IB.............................. 11.85 -- 3.78 3.78 -- For the Year Ended December 31, 2002 Class IA.............................. 14.72(5) 0.01(5) (2.79)(5) (2.78)(5) --(5) Class IB.............................. 14.68(5) 0.01(5) (2.81)(5) (2.80)(5) --(5) For the Year Ended December 31, 2001 Class IA.............................. 14.42(5) --(5) 0.30(5) 0.30(5) --(5) Class IB.............................. 14.41(5) (0.03)(5) 0.30(5) 0.27(5) --(5) From inception May,1 2000 through December 31, 2000 Class IA.............................. 10.00(5) 0.03(5) 4.77(5) 4.80(5) (0.03)(5) Class IB.............................. 10.00(5) 0.03(5) 4.75(5) 4.78(5) (0.02)(5) <Caption> -- SELECTED PER-SHARE DATA (4) -- ---------------------------------------------- DISTRIBUTIONS DIVIDENDS FROM IN EXCESS OF NET REALIZED DISTRIBUTIONS NET INVESTMENT GAINS ON FROM INCOME INVESTMENTS CAPITAL -------------- ------------- ------------- HARTFORD GLOBAL ADVISERS HLS FUND For the Year Ended December 31, 2003 Class IA.............................. $ -- $ -- $ -- Class IB.............................. -- -- -- For the Year Ended December 31, 2002 Class IA.............................. --(5) --(5) --(5) Class IB.............................. --(5) --(5) --(5) For the Year Ended December 31, 2001 Class IA.............................. --(5) (0.63)(5) --(5) Class IB.............................. --(5) (0.63)(5) --(5) For the Year Ended December 31, 2000 Class IA.............................. --(5) (0.89)(5) --(5) Class IB.............................. --(5) (0.89)(5) --(5) For the Year Ended December 31, 1999 Class IA.............................. --(5) --(5) --(5) From inception November 9, 1999 through December 31, 1999 Class IB.............................. --(5) --(5) --(5) HARTFORD GLOBAL COMMUNICATIONS HLS FUND For the Year Ended December 31, 2003 Class IA.............................. -- -- -- Class IB.............................. -- -- -- For the Year Ended December 31, 2002 Class IA.............................. --(5) --(5) --(5) Class IB.............................. --(5) --(5) --(5) For the Year Ended December 31, 2001 Class IA.............................. --(5) --(5) --(5) Class IB.............................. --(5) --(5) --(5) HARTFORD GLOBAL FINANCIAL SERVICES HLS FUND For the Year Ended December 31, 2003 Class IA.............................. -- -- -- Class IB.............................. -- -- -- For the Year Ended December 31, 2002 Class IA.............................. --(5) --(5) --(5) Class IB.............................. --(5) --(5) --(5) For the Year Ended December 31, 2001 Class IA.............................. --(5) --(5) --(5) Class IB.............................. --(5) --(5) --(5) HARTFORD GLOBAL HEALTH HLS FUND For the Year Ended December 31, 2003 Class IA.............................. -- (0.20) -- Class IB.............................. -- (0.20) -- For the Year Ended December 31, 2002 Class IA.............................. --(5) (0.03)(5) --(5) Class IB.............................. --(5) (0.03)(5) --(5) For the Year Ended December 31, 2001 Class IA.............................. --(5) --(5) --(5) Class IB.............................. --(5) --(5) --(5) From inception May,1 2000 through December 31, 2000 Class IA.............................. --(5) (0.35)(5) --(5) Class IB.............................. --(5) (0.35)(5) --(5) </Table> See Notes to Financial Statements. 196 - -------------------------------------------------------------------------------- <Table> <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - ----------------------------------------------------------------------------------------------- RATIO OF NET INCREASE NET ASSETS EXPENSES (DECREASE) IN NET ASSET AT END OF TO AVERAGE TOTAL NET ASSETS VALUE AT TOTAL PERIOD NET ASSETS DISTRIBUTIONS VALUE END OF PERIOD RETURN (000'S OMITTED) AFTER WAIVERS ------------- ------------- ------------- --------- --------------- ------------- $(0.08) $ 1.99 $11.15 22.26% $ 312,492 0.84% (0.07) 1.97 11.09 21.97 41,594 1.09 --(5) (0.91)(5) 9.16(5) (8.95) 269,329 0.83 --(5) (0.93)(5) 9.12(5) (9.15) 16,078 1.06 (0.71)(5) (1.42)(5) 10.07(5) (6.25) 331,784 0.86 (0.70)(5) (1.42)(5) 10.05(5) (6.42) 11,965 1.04 (1.60)(5) (2.48)(5) 11.49(5) (6.63) 384,648 0.85 (1.60)(5) (2.50)(5) 11.47(5) (6.80) 4,800 1.03 (0.25)(5) 2.42(5) 13.97(5) 23.16 396,147 0.85 (0.25)(5) 0.97(5) 13.97(5) 9.35(2) 11 1.03(1) -- 2.70 7.17 60.37 17,302 1.01 -- 2.68 7.15 59.97 10,288 1.26 (0.02)(5) (1.90)(5) 4.47(5) (29.36) 8,177 1.01 (0.02)(5) (1.90)(5) 4.47(5) (29.50) 2,707 1.24 (0.04)(5) (3.63)(5) 6.37(5) (35.74) 7,679 0.92 (0.03)(5) (3.63)(5) 6.37(5) (35.88) 1,584 1.10 (0.13) 2.14 9.65 30.29 18,940 0.98 (0.11) 2.13 9.63 29.96 16,056 1.23 (0.08)(5) (1.86)(5) 7.51(5) (18.87) 15,486 1.15 (0.07)(5) (1.86)(5) 7.50(5) (19.04) 6,477 1.38 (0.04)(5) (0.63)(5) 9.37(5) (5.72) 14,216 0.93 (0.03)(5) (0.64)(5) 9.36(5) (5.91) 3,392 1.11 (0.21) 3.61 15.52 32.31 268,844 0.89 (0.20) 3.58 15.43 31.98 103,592 1.14 (0.03)(5) (2.81)(5) 11.91(5) (16.97) 172,037 0.90 (0.03)(5) (2.83)(5) 11.85(5) (17.16) 48,470 1.13 --(5) 0.30(5) 14.72(5) 2.04 202,131 0.89 --(5) 0.27(5) 14.68(5) 1.86 35,781 1.07 (0.38)(5) 4.42(5) 14.42(5) 48.18(2) 123,533 0.90(1) (0.37)(5) 4.41(5) 14.41(5) 48.00(2) 9,347 1.08(1) <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - --- --------------------------------------- RATIO OF RATIO OF NET EXPENSES INVESTMENT TO AVERAGE INCOME PORTFOLIO NET ASSETS TO AVERAGE TURNOVER BEFORE WAIVERS NET ASSETS RATE(7) -------------- ---------- --------- 0.84% 1.26% 452% 1.09 1.01 452 0.83 2.05 288 1.08 1.82 288 0.86 2.21 346 1.11 2.03 346 0.85 2.72 184 1.10 2.54 184 0.85 2.59 142 1.10(1) 2.42(1) 142 1.01 0.19 90 1.26 (0.06) 90 1.01 0.66 100 1.26 0.43 100 0.92 0.38 95 1.17 0.20 95 0.98 1.63 120 1.23 1.38 120 1.15 1.11 80 1.40 0.88 80 0.93 1.04 119 1.18 0.86 119 0.89 0.15 37 1.14 (0.10) 37 0.90 0.10 60 1.15 (0.13) 60 0.89 0.06 62 1.14 (0.12) 62 0.90(1) 0.59(1) 46 1.15(1) 0.41(1) 46 </Table> 197 HARTFORD HLS MUTUAL FUNDS FINANCIAL HIGHLIGHTS -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> -- SELECTED PER-SHARE DATA (4) -- --------------------------------------------------------------- NET REALIZED AND NET ASSET NET UNREALIZED TOTAL DIVIDENDS VALUE AT INVESTMENT GAIN FROM FROM NET BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME --------- ---------- ------------ ---------- ---------- HARTFORD GLOBAL LEADERS HLS FUND For the Year Ended December 31, 2003 Class IA.............................. $11.50 $ 0.07 $ 4.02 $ 4.09 $(0.06) Class IB.............................. 11.47 0.04 4.00 4.04 (0.04) For the Year Ended December 31, 2002 Class IA.............................. 14.43(5) 0.13(5) (2.95)(5) (2.82)(5) (0.11)(5) Class IB.............................. 14.40(5) 0.12(5) (2.96)(5) (2.84)(5) (0.09)(5) For the Year Ended December 31, 2001 Class IA.............................. 17.59(5) 0.11(5) (3.02)(5) (2.91)(5) (0.08)(5) Class IB.............................. 17.57(5) 0.08(5) (3.02)(5) (2.94)(5) (0.06)(5) For the Year Ended December 31, 2000 Class IA.............................. 19.13(5) 0.08(5) (1.42)(5) (1.34)(5) (0.09)(5) Class IB.............................. 19.12(5) (0.06)(5) (1.30)(5) (1.36)(5) (0.08)(5) For the Year Ended December 31, 1999 Class IA.............................. 12.85(5) 0.03(5) 6.42(5) 6.45(5) (0.03)(5) Class IB.............................. 12.85(5) 0.07(5) 6.34(5) 6.41(5) --(5) HARTFORD GLOBAL TECHNOLOGY HLS FUND For the Year Ended December 31, 2003 Class IA.............................. 3.02 -- 1.86 1.86 -- Class IB.............................. 3.01 -- 1.83 1.83 -- For the Year Ended December 31, 2002 Class IA.............................. 4.92(5) (0.05)(5) (1.85)(5) (1.90)(5) --(5) Class IB.............................. 4.90(5) (0.04)(5) (1.85)(5) (1.89)(5) --(5) For the Year Ended December 31, 2001 Class IA.............................. 6.37(5) (0.02)(5) (1.43)(5) (1.45)(5) --(5) Class IB.............................. 6.36(5) (0.02)(5) (1.44)(5) (1.46)(5) --(5) From inception May,1 2000 through December 31, 2000 Class IA.............................. 10.00(5) (0.01)(5) (3.62)(5) (3.63)(5) --(5) Class IB.............................. 10.00(5) (0.01)(5) (3.63)(5) (3.64)(5) --(5) HARTFORD GROWTH HLS FUND For the Year Ended December 31, 2003 Class IA.............................. 8.66 (0.01) 2.85 2.84 -- Class IB.............................. 8.64 (0.02) 2.83 2.81 -- From inception April 30, 2002 through December 31, 2002 Class IA.............................. 10.00 -- (1.34) (1.34) -- Class IB.............................. 10.00 -- (1.36) (1.36) -- HARTFORD GROWTH OPPORTUNITIES HLS FUND For the Year Ended December 31, 2003 Class IA.............................. 16.40 (0.01) 7.18 7.17 -- Class IB.............................. 16.37 (0.01) 7.12 7.11 -- For the Year Ended December 31, 2002 Class IA.............................. 22.66 (0.03) (6.23) (6.26) -- From inception April, 30 2002 through December 31, 2002 Class IB.............................. 21.16 (0.01) (4.78) (4.79) -- For the Year Ended December 31, 2001 Class IA.............................. 40.66 -- (9.21) (9.21) -- For the Year Ended December 31, 2000 Class IA.............................. 45.14 (0.03) 2.99 2.96 -- For the Year Ended December 31, 1999 Class IA.............................. 41.09 (0.05) 17.42 17.37 (0.09) <Caption> -- SELECTED PER-SHARE DATA (4) -- ---------------------------------------------- DISTRIBUTIONS DIVIDENDS FROM IN EXCESS OF NET REALIZED DISTRIBUTIONS NET INVESTMENT GAINS ON FROM INCOME INVESTMENTS CAPITAL -------------- ------------- ------------- HARTFORD GLOBAL LEADERS HLS FUND For the Year Ended December 31, 2003 Class IA.............................. $ -- $ -- $ -- Class IB.............................. -- -- -- For the Year Ended December 31, 2002 Class IA.............................. --(5) --(5) --(5) Class IB.............................. --(5) --(5) --(5) For the Year Ended December 31, 2001 Class IA.............................. --(5) (0.17)(5) --(5) Class IB.............................. --(5) (0.17)(5) --(5) For the Year Ended December 31, 2000 Class IA.............................. --(5) (0.11)(5) --(5) Class IB.............................. --(5) (0.11)(5) --(5) For the Year Ended December 31, 1999 Class IA.............................. --(5) (0.14)(5) --(5) Class IB.............................. --(5) (0.14)(5) --(5) HARTFORD GLOBAL TECHNOLOGY HLS FUND For the Year Ended December 31, 2003 Class IA.............................. -- -- -- Class IB.............................. -- -- -- For the Year Ended December 31, 2002 Class IA.............................. --(5) --(5) --(5) Class IB.............................. --(5) --(5) --(5) For the Year Ended December 31, 2001 Class IA.............................. --(5) --(5) --(5) Class IB.............................. --(5) --(5) --(5) From inception May,1 2000 through December 31, 2000 Class IA.............................. --(5) --(5) --(5) Class IB.............................. --(5) --(5) --(5) HARTFORD GROWTH HLS FUND For the Year Ended December 31, 2003 Class IA.............................. -- (0.34) -- Class IB.............................. -- (0.34) -- From inception April 30, 2002 through December 31, 2002 Class IA.............................. -- -- -- Class IB.............................. -- -- -- HARTFORD GROWTH OPPORTUNITIES HLS FUND For the Year Ended December 31, 2003 Class IA.............................. -- -- -- Class IB.............................. -- -- -- For the Year Ended December 31, 2002 Class IA.............................. -- -- -- From inception April, 30 2002 through December 31, 2002 Class IB.............................. -- -- -- For the Year Ended December 31, 2001 Class IA.............................. -- (8.79) -- For the Year Ended December 31, 2000 Class IA.............................. -- (7.44) -- For the Year Ended December 31, 1999 Class IA.............................. -- (13.23) -- </Table> See Notes to Financial Statements. 198 - -------------------------------------------------------------------------------- <Table> <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - -------------------------------------------------------------------------------------------------- RATIO OF NET INCREASE NET ASSETS EXPENSES (DECREASE) IN NET ASSET AT END OF TO AVERAGE TOTAL NET ASSETS VALUE AT TOTAL PERIOD NET ASSETS DISTRIBUTIONS VALUE END OF PERIOD RETURN(8) (000'S OMITTED) AFTER WAIVERS ------------- ------------- ------------- --------- --------------- ------------- $ (0.06) $ 4.03 $15.53 35.57% $ 728,049 0.80% (0.04) 4.00 15.47 35.24 129,315 1.05 (0.11)(5) (2.93)(5) 11.50(5) (19.51) 544,901 0.81 (0.09)(5) (2.93)(5) 11.47(5) (19.70) 55,421 1.03 (0.25)(5) (3.16)(5) 14.43(5) (16.58) 484,661 0.81 (0.23)(5) (3.17)(5) 14.40(5) (16.73) 49,356 0.99 (0.20)(5) (1.54)(5) 17.59(5) (7.06) 572,517 0.81 (0.19)(5) (1.55)(5) 17.57(5) (7.22) 25,869 0.99 (0.17)(5) 6.28(5) 19.13(5) 50.37 179,675 0.86 (0.14)(5) 6.27(5) 19.12(5) 50.11 69 1.04 -- 1.86 4.88 61.50 138,243 0.90 -- 1.83 4.84 61.10 44,432 1.15 --(5) (1.90)(5) 3.02(5) (38.59) 54,596 0.91 --(5) (1.89)(5) 3.01(5) (38.69) 13,609 1.13 --(5) (1.45)(5) 4.92(5) (22.81) 86,074 0.89 --(5) (1.46)(5) 4.90(5) (22.95) 16,712 1.07 --(5) (3.63)(5) 6.37(5) (37.45)(2) 71,276 0.92(1) --(5) (3.64)(5) 6.36(5) (37.10)(2) 7,340 1.10(1) (0.34) 2.50 11.16 32.81 127,944 0.88 (0.34) 2.47 11.11 32.48 90,188 1.13 -- (1.34) 8.66 (13.43)(2) 13,452 0.99(1) -- (1.36) 8.64 (13.57)(2) 7,937 1.24(1) -- 7.17 23.57 43.79 696,900 0.64 -- 7.11 23.48 43.43 59,686 0.89 -- (6.26) 16.40 (27.65) 478,045 0.66 -- (4.79) 16.37 (22.65)(2) 5,287 0.84(1) (8.79) (18.00) 22.66 (22.85) 755,068 0.65 (7.44) (4.48) 40.66 3.99 1,063,005 0.64 (13.32) 4.05 45.14 55.17 1,044,728 0.66 <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - --- --------------------------------------- RATIO OF RATIO OF NET EXPENSES INVESTMENT TO AVERAGE INCOME PORTFOLIO NET ASSETS TO AVERAGE TURNOVER BEFORE WAIVERS NET ASSETS RATE(7) -------------- ---------- --------- 0.80% 0.54% 292% 1.05 0.29 292 0.81 1.06 324 1.06 0.84 324 0.81 0.71 363 1.06 0.53 363 0.81 0.63 367 1.06 0.45 367 0.91 0.54(3) 207 1.16 0.36(3) 207 0.90 (0.55) 157 1.15 (0.80) 157 0.91 (0.69) 155 1.16 (0.92) 155 0.89 (0.49) 240 1.14 (0.67) 240 0.92(1) (0.44)(1) 150 1.17(1) (0.62)(1) 150 0.88 (0.20) 111 1.13 (0.45) 111 0.99(1) (0.01)(1) 76 1.24(1) (0.25)(1) 76 0.64 (0.05) 145 0.89 (0.30) 145 0.66 (0.16) 189 0.84(1) (0.10)(1) 189 0.65 (0.01) 228 0.64 (0.08) 120 0.66 (0.18) 175 </Table> 199 HARTFORD HLS MUTUAL FUNDS FINANCIAL HIGHLIGHTS -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> -- SELECTED PER-SHARE DATA (4) -- --------------------------------------------------------------- NET REALIZED AND NET ASSET NET UNREALIZED TOTAL DIVIDENDS VALUE AT INVESTMENT GAIN FROM FROM NET BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME --------- ---------- ------------ ---------- ---------- HARTFORD HIGH YIELD HLS FUND For the Year Ended December 31, 2003 Class IA.............................. $ 8.49 $ 0.19 $ 1.75 $ 1.94 $ (0.37) Class IB.............................. 8.44 0.28 1.63 1.91 (0.37) For the Year Ended December 31, 2002 Class IA.............................. 9.64(5) 0.63(5) (1.73)(5) (1.10)(5) (0.05)(5) Class IB.............................. 9.61(5) 0.49(5) (1.61)(5) (1.12)(5) (0.05)(5) For the Year Ended December 31, 2001 Class IA.............................. 9.39(5) 0.78(5) (0.52)(5) 0.26(5) (0.01)(5) Class IB.............................. 9.38(5) 0.84(5) (0.60)(5) 0.24(5) (0.01)(5) For the Year Ended December 31, 2000 Class IA.............................. 10.05(5) 0.78(5) (0.68)(5) 0.10(5) (0.76)(5) Class IB.............................. 10.05(5) 0.04(5) 0.04(5) 0.08(5) (0.75)(5) For the Year Ended December 31, 1999 Class IA.............................. 10.17(5) 0.60(5) (0.13)(5) 0.47(5) (0.59)(5) Class IB.............................. 10.17(5) 0.85(5) (0.39)(5) 0.46(5) (0.58)(5) HARTFORD INDEX HLS FUND For the Year Ended December 31, 2003 Class IA.............................. 23.46 0.36 6.23 6.59 (0.37) Class IB.............................. 23.39 0.31 6.19 6.50 (0.32) For the Year Ended December 31, 2002 Class IA.............................. 31.81(5) 0.32(5) (8.29)(5) (7.97)(5) (0.28)(5) Class IB.............................. 31.75(5) 0.28(5) (8.30)(5) (8.02)(5) (0.24)(5) For the Year Ended December 31, 2001 Class IA.............................. 37.25(5) 0.31(5) (4.87)(5) (4.56)(5) (0.29)(5) Class IB.............................. 37.20(5) 0.30(5) (4.91)(5) (4.61)(5) (0.25)(5) For the Year Ended December 31, 2000 Class IA.............................. 41.89(5) 0.30(5) (4.24)(5) (3.94)(5) (0.31)(5) Class IB.............................. 41.89(5) 0.37(5) (4.39)(5) (4.02)(5) (0.28)(5) For the Year Ended December 31, 1999 Class IA.............................. 35.70(5) 0.34(5) 6.85(5) 7.19(5) (0.40)(5) From inception November 9, 1999 through December 31, 1999 Class IB.............................. 39.22(5) 0.04(5) 2.98(5) 3.02(5) (0.32)(5) HARTFORD INTERNATIONAL CAPITAL APPRECIATION HLS FUND For the Year Ended December 31, 2003 Class IA.............................. 7.09 -- 3.61 3.61 -- Class IB.............................. 7.08 -- 3.58 3.58 -- For the Year Ended December 31, 2002 Class IA.............................. 8.59(5) 0.03(5) (1.51)(5) (1.48)(5) (0.02)(5) Class IB.............................. 8.59(5) 0.01(5) (1.51)(5) (1.50)(5) (0.01)(5) From inception April 30, 2001 through December 31, 2001 Class IA.............................. 10.00(5) 0.01(5) (1.41)(5) (1.40)(5) (0.01)(5) Class IB.............................. 10.00(5) 0.01(5) (1.41)(5) (1.40)(5) (0.01)(5) <Caption> -- SELECTED PER-SHARE DATA (4) -- ---------------------------------------------- DISTRIBUTIONS DIVIDENDS FROM IN EXCESS OF NET REALIZED DISTRIBUTIONS NET INVESTMENT GAINS ON FROM INCOME INVESTMENTS CAPITAL -------------- ------------- ------------- HARTFORD HIGH YIELD HLS FUND For the Year Ended December 31, 2003 Class IA.............................. $ -- $ -- $ -- Class IB.............................. -- -- -- For the Year Ended December 31, 2002 Class IA.............................. --(5) --(5) --(5) Class IB.............................. --(5) --(5) --(5) For the Year Ended December 31, 2001 Class IA.............................. --(5) --(5) --(5) Class IB.............................. --(5) --(5) --(5) For the Year Ended December 31, 2000 Class IA.............................. --(5) --(5) --(5) Class IB.............................. --(5) --(5) --(5) For the Year Ended December 31, 1999 Class IA.............................. --(5) --(5) --(5) Class IB.............................. --(5) --(5) --(5) HARTFORD INDEX HLS FUND For the Year Ended December 31, 2003 Class IA.............................. -- (0.08) -- Class IB.............................. -- (0.08) -- For the Year Ended December 31, 2002 Class IA.............................. --(5) (0.10)(5) --(5) Class IB.............................. --(5) (0.10)(5) --(5) For the Year Ended December 31, 2001 Class IA.............................. --(5) (0.59)(5) --(5) Class IB.............................. --(5) (0.59)(5) --(5) For the Year Ended December 31, 2000 Class IA.............................. --(5) (0.39)(5) --(5) Class IB.............................. --(5) (0.39)(5) --(5) For the Year Ended December 31, 1999 Class IA.............................. --(5) (0.60)(5) --(5) From inception November 9, 1999 through December 31, 1999 Class IB.............................. --(5) (0.03)(5) --(5) HARTFORD INTERNATIONAL CAPITAL APPRECIATION HLS FUND For the Year Ended December 31, 2003 Class IA.............................. -- (0.50) -- Class IB.............................. -- (0.50) -- For the Year Ended December 31, 2002 Class IA.............................. --(5) --(5) --(5) Class IB.............................. --(5) --(5) --(5) From inception April 30, 2001 through December 31, 2001 Class IA.............................. --(5) --(5) --(5) Class IB.............................. --(5) --(5) --(5) </Table> See Notes to Financial Statements. 200 - -------------------------------------------------------------------------------- <Table> <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - -------------------------------------------------------------------------------------------------- RATIO OF NET INCREASE NET ASSETS EXPENSES (DECREASE) IN NET ASSET AT END OF TO AVERAGE TOTAL NET ASSETS VALUE AT TOTAL PERIOD NET ASSETS DISTRIBUTIONS VALUE END OF PERIOD RETURN(8) (000'S OMITTED) AFTER WAIVERS ------------- ------------- ------------- --------- --------------- ------------- $(0.37) $ 1.57 $10.06 23.18% $ 481,315 0.78% (0.37) 1.54 9.98 22.88 259,544 1.03 (0.05)(5) (1.15)(5) 8.49(5) (6.89) 200,017 0.82 (0.05)(5) (1.17)(5) 8.44(5) (7.14) 57,084 1.05 (0.01)(5) 0.25(5) 9.64(5) 2.69 127,044 0.81 (0.01)(5) 0.23(5) 9.61(5) 2.54 25,901 0.99 (0.76)(5) (0.66)(5) 9.39(5) 1.03 66,104 0.81 (0.75)(5) (0.67)(5) 9.38(5) 0.85 2,497 0.99 (0.59)(5) (0.12)(5) 10.05(5) 4.70 52,731 0.72 (0.58)(5) (0.12)(5) 10.05(5) 4.49 102 0.90 (0.45) 6.14 29.60 28.13 1,934,490 0.44 (0.40) 6.10 29.49 27.81 195,900 0.69 (0.38)(5) (8.35)(5) 23.46(5) (22.45) 1,553,260 0.44 (0.34)(5) (8.36)(5) 23.39(5) (22.63) 68,832 0.67 (0.88)(5) (5.44)(5) 31.81(5) (12.31) 1,976,361 0.43 (0.84)(5) (5.45)(5) 31.75(5) (12.47) 46,056 0.61 (0.70)(5) (4.64)(5) 37.25(5) (9.50) 2,387,000 0.43 (0.67)(5) (4.69)(5) 37.20(5) (9.66) 16,272 0.61 (1.00)(5) 6.19(5) 41.89(5) 20.49 2,581,436 0.43 (0.35)(5) 2.67(5) 41.89(5) 7.73(2) 11 0.61(1) (0.50) 3.11 10.20 51.02 67,147 1.01 (0.50) 3.08 10.16 50.65 63,698 1.26 (0.02)(5) (1.50)(5) 7.09(5) (17.21) 21,368 1.26 (0.01)(5) (1.51)(5) 7.08(5) (17.40) 13,878 1.49 (0.01)(5) (1.41)(5) 8.59(5) (13.98)(2) 9,969 1.00(1) (0.01)(5) (1.41)(5) 8.59(5) (14.08)(2) 5,075 1.18(1) <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - --- --------------------------------------- RATIO OF RATIO OF NET EXPENSES INVESTMENT TO AVERAGE INCOME PORTFOLIO NET ASSETS TO AVERAGE TURNOVER BEFORE WAIVERS NET ASSETS RATE(7) -------------- ---------- --------- 0.78% 7.00% 44% 1.03 6.75 44 0.82 9.33 60 1.07 9.10 60 0.81 9.70 63 1.06 9.52 63 0.81 9.15 69 1.06 8.97 69 0.84 8.36(3) 47 1.09 8.18(3) 47 0.44 1.40 3 0.69 1.15 3 0.44 1.18 15 0.69 0.95 15 0.43 0.91 5 0.68 0.73 5 0.43 0.75 7 0.68 0.57 7 0.43 0.95 3 0.68(1) 0.77(1) 3 1.01 0.23 244 1.26 (0.02) 244 1.26 0.59 285 1.51 0.36 285 1.00(1) 0.42(1) 191 1.25(1) 0.24(1) 191 </Table> 201 HARTFORD HLS MUTUAL FUNDS FINANCIAL HIGHLIGHTS -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> -- SELECTED PER-SHARE DATA (4) -- ---------------------------------------------------------------------------------------- NET REALIZED AND NET ASSET NET UNREALIZED TOTAL DIVIDENDS VALUE AT INVESTMENT GAIN FROM FROM NET BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME --------- ---------- ------------ ---------- ---------- HARTFORD INTERNATIONAL OPPORTUNITIES HLS FUND For the Year Ended December 31, 2003 Class IA..................... $ 7.66 $ 0.09 $ 2.44 $ 2.53 $(0.08) Class IB..................... 7.66 0.07 2.43 2.50 (0.07) For the Year Ended December 31, 2002 Class IA..................... 9.53(5) 0.17(5) (1.94)(5) (1.77)(5) (0.10)(5) Class IB..................... 9.51(5) 0.14(5) (1.91)(5) (1.77)(5) (0.08)(5) For the Year Ended December 31, 2001 Class IA..................... 13.64(5) 0.12(5) (2.61)(5) (2.49)(5) (0.01)(5) Class IB..................... 13.65(5) 0.12(5) (2.63)(5) (2.51)(5) (0.02)(5) For the Year Ended December 31, 2000 Class IA..................... 18.76(5) 0.18(5) (3.14)(5) (2.96)(5) (0.23)(5) Class IB..................... 18.76(5) 0.25(5) (3.24)(5) (2.99)(5) (0.19)(5) For the Year Ended December 31, 1999 Class IA..................... 13.55(5) 0.19(5) 5.20(5) 5.39(5) (0.18)(5) Class IB..................... 13.57(5)(6) 0.17(5)(6) 5.19(5)(6) 5.36(5)(6) (0.17)(5)(6) HARTFORD INTERNATIONAL SMALL COMPANY HLS FUND For the Year Ended December 31, 2003 Class IA..................... 8.89 0.09 4.68 4.77 (0.11) Class IB..................... 8.86 0.08 4.64 4.72 (0.09) For the Year Ended December 31, 2002 Class IA..................... 9.39(5) 0.02(5) (0.52)(5) (0.50)(5) --(5) Class IB..................... 9.38(5) 0.01(5) (0.53)(5) (0.52)(5) --(5) From inception April 30, 2001 through December 31, 2001 Class IA..................... 10.00(5) 0.05(5) (0.64)(5) (0.59)(5) (0.02)(5) Class IB..................... 10.00(5) 0.03(5) (0.64)(5) (0.61)(5) (0.01)(5) HARTFORD MIDCAP HLS FUND For the Year Ended December 31, 2003 Class IA..................... 17.93 0.04 6.71 6.75 (0.05) Class IB..................... 17.84 (0.01) 6.67 6.66 -- For the Year Ended December 31, 2002 Class IA..................... 20.93(5) (0.01)(5) (2.99)(5) (3.00)(5) --(5) Class IB..................... 20.84(5) --(5) (3.00)(5) (3.00)(5) --(5) For the Year Ended December 31, 2001 Class IA..................... 24.67(5) 0.03(5) (0.97)(5) (0.94)(5) --(5) Class IB..................... 24.62(5) --(5) (0.98)(5) (0.98)(5) --(5) For the Year Ended December 31, 2000 Class IA..................... 20.53(5) (0.01)(5) 5.18(5) 5.17(5) --(5) Class IB..................... 20.53(5) (0.01)(5) 5.13(5) 5.12(5) --(5) For the Year Ended December 31, 1999 Class IA..................... 14.39(5) --(5) 7.25(5) 7.25(5) --(5) From inception, November 9, 1999 through December 31, 1999 Class IB..................... 17.58(5) --(5) 3.73(5) 3.73(5) --(5) HARTFORD MIDCAP VALUE HLS FUND For the Year Ended December 31, 2003 Class IA..................... 8.63 0.01 3.73 3.74 -- Class IB..................... 8.62 0.01 3.69 3.70 -- For the Year Ended December 31, 2002 Class IA..................... 9.95(5) 0.02(5) (1.32)(5) (1.30)(5) (0.02)(5) Class IB..................... 9.94(5) 0.01(5) (1.32)(5) (1.31)(5) (0.01)(5) From inception April 30, 2001 through December 31, 2001 Class IA..................... 10.00(5) 0.01(5) (0.05)(5) (0.04)(5) (0.01)(5) Class IB..................... 10.00(5) 0.01(5) (0.06)(5) (0.05)(5) (0.01)(5) <Caption> -- SELECTED PER-SHARE DATA (4) -- -------------------------------------------------------- DISTRIBUTIONS DIVIDENDS FROM IN EXCESS OF NET REALIZED DISTRIBUTIONS NET INVESTMENT GAINS ON FROM INCOME INVESTMENTS CAPITAL -------------- ------------- ------------- HARTFORD INTERNATIONAL OPPORTUNITIES HLS FUND For the Year Ended December 31, 2003 Class IA..................... $ -- $ -- $ -- Class IB..................... -- -- -- For the Year Ended December 31, 2002 Class IA..................... --(5) --(5) --(5) Class IB..................... --(5) --(5) --(5) For the Year Ended December 31, 2001 Class IA..................... --(5) (1.61)(5) --(5) Class IB..................... --(5) (1.61)(5) --(5) For the Year Ended December 31, 2000 Class IA..................... --(5) (1.93)(5) --(5) Class IB..................... --(5) (1.93)(5) --(5) For the Year Ended December 31, 1999 Class IA..................... --(5) --(5) --(5) Class IB..................... --(5)(6) --(5)(6) --(5)(6) HARTFORD INTERNATIONAL SMALL COMPANY HLS FUND For the Year Ended December 31, 2003 Class IA..................... -- (0.93) -- Class IB..................... -- (0.93) -- For the Year Ended December 31, 2002 Class IA..................... --(5) --(5) --(5) Class IB..................... --(5) --(5) --(5) From inception April 30, 2001 through December 31, 2001 Class IA..................... --(5) --(5) --(5) Class IB..................... --(5) --(5) --(5) HARTFORD MIDCAP HLS FUND For the Year Ended December 31, 2003 Class IA..................... -- -- -- Class IB..................... -- -- -- For the Year Ended December 31, 2002 Class IA..................... --(5) --(5) --(5) Class IB..................... --(5) --(5) --(5) For the Year Ended December 31, 2001 Class IA..................... --(5) (2.80)(5) --(5) Class IB..................... --(5) (2.80)(5) --(5) For the Year Ended December 31, 2000 Class IA..................... --(5) (1.03)(5) --(5) Class IB..................... --(5) (1.03)(5) --(5) For the Year Ended December 31, 1999 Class IA..................... --(5) (1.11)(5) --(5) From inception, November 9, 1999 through December 31, 1999 Class IB..................... --(5) (0.78)(5) --(5) HARTFORD MIDCAP VALUE HLS FUND For the Year Ended December 31, 2003 Class IA..................... -- -- -- Class IB..................... -- -- -- For the Year Ended December 31, 2002 Class IA..................... --(5) --(5) --(5) Class IB..................... --(5) --(5) --(5) From inception April 30, 2001 through December 31, 2001 Class IA..................... --(5) --(5) --(5) Class IB..................... --(5) --(5) --(5) </Table> See Notes to Financial Statements. 202 - -------------------------------------------------------------------------------- <Table> <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - ----------------------------------------------------------------------------------------------- RATIO OF NET INCREASE NET ASSETS EXPENSES (DECREASE) IN NET ASSET AT END OF TO AVERAGE TOTAL NET ASSETS VALUE AT TOTAL PERIOD NET ASSETS DISTRIBUTIONS VALUE END OF PERIOD RETURN(8) (000'S OMITTED) AFTER WAIVERS ------------- ------------- ------------- --------- --------------- ------------- $(0.08) $ 2.45 $10.11 33.10% $ 823,760 0.83% (0.07) 2.43 10.09 32.76 76,246 1.08 (0.10)(5) (1.87)(5) 7.66(5) (17.93) 646,903 0.81 (0.08)(5) (1.85)(5) 7.66(5) (18.12) 26,641 1.04 (1.62)(5) (4.11)(5) 9.53(5) (18.73) 941,934 0.81 (1.63)(5) (4.14)(5) 9.51(5) (18.88) 22,277 0.99 (2.16)(5) (5.12)(5) 13.64(5) (17.10) 1,326,609 0.78 (2.12)(5) (5.11)(5) 13.65(5) (17.25) 18,682 0.96 (0.18)(5) 5.21(5) 18.76(5) 39.86 1,574,836 0.78 (0.17)(5)(6) 5.19(5)(6) 18.76(5)(6) 39.61 3,203 0.96 (1.04) 3.73 12.62 53.73 44,088 1.23 (1.02) 3.70 12.56 53.35 22,704 1.48 --(5) (0.50)(5) 8.89(5) (5.08) 16,722 1.71 --(5) (0.52)(5) 8.86(5) (5.30) 5,130 1.96 (0.02)(5) (0.61)(5) 9.39(5) (5.98)(2) 4,373 1.00(1) (0.01)(5) (0.62)(5) 9.38(5) (6.09)(2) 768 1.18(1) (0.05) 6.70 24.63 37.67 1,946,881 0.72 -- 6.66 24.50 37.33 179,439 0.97 --(5) (3.00)(5) 17.93(5) (14.22) 1,340,265 0.72 --(5) (3.00)(5) 17.84(5) (14.42) 89,336 0.94 (2.80)(5) (3.74)(5) 20.93(5) (3.62) 1,765,315 0.70 (2.80)(5) (3.78)(5) 20.84(5) (3.79) 117,396 0.88 (1.03)(5) 4.14(5) 24.67(5) 25.42 1,774,047 0.70 (1.03)(5) 4.09(5) 24.62(5) 25.20 50,747 0.88 (1.11)(5) 6.14(5) 20.53(5) 51.81 672,678 0.79 (0.78)(5) 2.95(5) 20.53(5) 21.39(2) 36 0.97(1) -- 3.74 12.37 43.29 592,014 0.83 -- 3.70 12.32 42.93 318,093 1.08 (0.02)(5) (1.32)(5) 8.63(5) (13.02) 275,556 0.88 (0.01)(5) (1.32)(5) 8.62(5) (13.21) 98,964 1.12 (0.01)(5) (0.05)(5) 9.95(5) (0.41)(2) 95,308 0.90(1) (0.01)(5) (0.06)(5) 9.94(5) (0.52)(2) 25,185 1.08(1) <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - --- --------------------------------------- RATIO OF RATIO OF NET EXPENSES INVESTMENT TO AVERAGE INCOME PORTFOLIO NET ASSETS TO AVERAGE TURNOVER BEFORE WAIVERS NET ASSETS RATE(7) -------------- ---------- --------- 0.83% 1.08% 144% 1.08 0.83 144 0.81 1.23 161 1.06 1.00 161 0.81 1.10 144 1.06 0.92 144 0.78 1.16 159 1.03 0.98 159 0.78 1.20 133 1.03 1.02 133 1.23 1.35 150 1.48 1.10 150 1.71 0.23 183 1.96 (0.01) 183 1.00(1) 1.01(1) 168 1.25(1) 0.83(1) 168 0.72 0.20 75 0.97 (0.05) 75 0.72 0.09 90 0.97 (0.14) 90 0.70 0.12 117 0.95 (0.06) 117 0.72 (0.08) 138 0.97 (0.26) 138 0.79 (0.15) 121 1.04(1) (0.32)(1) 121 0.83 0.25 59 1.08 -- 59 0.88 0.36 42 1.13 0.12 42 0.90(1) 0.47(1) 32 1.15(1) 0.29(1) 32 </Table> 203 HARTFORD HLS MUTUAL FUNDS FINANCIAL HIGHLIGHTS -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> -- SELECTED PER-SHARE DATA (4) -- ---------------------------------------------------------------------------------------- NET REALIZED AND NET ASSET NET UNREALIZED TOTAL DIVIDENDS VALUE AT INVESTMENT GAIN FROM FROM NET BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME --------- ---------- ------------ ---------- ---------- HARTFORD MONEY MARKET HLS FUND For the Year Ended December 31, 2003 Class IA..................... $ 1.00 $ 0.01 $ -- $ 0.01 $ (0.01) Class IB..................... 1.00 -- -- -- -- For the Year Ended December 31, 2002 Class IA..................... 1.00 0.01 -- 0.01 (0.01) Class IB..................... 1.00 0.01 -- 0.01 (0.01) For the Year Ended December 31, 2001 Class IA..................... 1.00 0.04 -- 0.04 (0.04) Class IB..................... 1.00 0.04 -- 0.04 (0.04) For the Year Ended December 31, 2000 Class IA..................... 1.00 0.06 -- 0.06 (0.06) Class IB..................... 1.00 0.06 -- 0.06 (0.06) For the Year Ended December 31, 1999 Class IA..................... 1.00 0.07 -- 0.07 (0.07) Class IB..................... 1.00 0.07 -- 0.07 (0.07) HARTFORD MORTGAGE SECURITIES HLS FUND For the Year Ended December 31, 2003 Class IA..................... 12.01 0.35 (0.08) 0.27 (0.38) Class IB..................... 11.94 0.38 (0.14) 0.24 (0.37) For the Year Ended December 31, 2002 Class IA..................... 11.54(5) 0.37(5) 0.15(5) 0.52(5) (0.05)(5) Class IB..................... 11.50(5) 0.31(5) 0.18(5) 0.49(5) (0.05)(5) For the Year Ended December 31, 2001 Class IA..................... 11.38(5) 0.49(5) 0.34(5) 0.83(5) (0.67)(5) Class IB..................... 11.36(5) 0.50(5) 0.31(5) 0.81(5) (0.67)(5) For the Year Ended December 31, 2000 Class IA..................... 10.39(5) 0.75(5) 0.32(5) 1.07(5) (0.08)(5) Class IB..................... 10.39(5) 0.78(5) 0.27(5) 1.05(5) (0.08)(5) For the Year Ended December 31, 1999 Class IA..................... 10.85(5) 0.68(5) (0.52)(5) 0.16(5) (0.62)(5) From inception November 9, 1999 through December 31, 1999 Class IB..................... 11.07(5) 0.09(5) (0.16)(5) (0.07)(5) (0.61)(5) HARTFORD SMALL COMPANY HLS FUND For the Year Ended December 31, 2003 Class IA..................... 9.29 (0.04) 5.24 5.20 -- Class IB..................... 9.23 (0.04) 5.16 5.12 -- For the Year Ended December 31, 2002 Class IA..................... 13.32(5) (0.08)(5) (3.95)(5) (4.03)(5) --(5) Class IB..................... 13.26(5) (0.06)(5) (3.97)(5) (4.03)(5) --(5) For the Year Ended December 31, 2001 Class IA..................... 16.87(5) 0.01(5) (2.53)(5) (2.52)(5) --(5) Class IB..................... 16.83(5) (0.01)(5) (2.53)(5) (2.54)(5) --(5) For the Year Ended December 31, 2000 Class IA..................... 21.88(5) 0.03(5) (2.54)(5) (2.51)(5) --(5) Class IB..................... 21.87(5) 0.03(5) (2.57)(5) (2.54)(5) --(5) For the Year Ended December 31, 1999 Class IA..................... 13.21(5) (0.05)(5) 8.75(5) 8.70(5) --(5) Class IB..................... 13.23(5)(6) (0.04)(5)(6) 8.71(5)(6) 8.67(5)(6) --(5)(6) HARTFORD SMALLCAP GROWTH HLS FUND For the Year Ended December 31, 2003 Class IA..................... 11.70 -- 5.85 5.85 -- Class IB..................... 11.73 (0.01) 5.83 5.82 -- For the Year Ended December 31, 2002 Class IA..................... 16.44 (0.02) (4.72) (4.74) -- From inception April, 30 2002 through December 31, 2002 Class IB..................... 15.96 (0.01) (4.22) (4.23) -- For the Year Ended December 31, 2001 Class IA..................... 23.73 -- (4.91) (4.91) -- For the Year Ended December 31, 2000 Class IA..................... 33.79 -- (3.06) (3.06) -- For the Year Ended December 31, 1999 Class IA..................... 16.70 (0.04) 17.86 17.82 (0.01) <Caption> -- SELECTED PER-SHARE DATA (4) -- -------------------------------------------------------- DISTRIBUTIONS DIVIDENDS FROM IN EXCESS OF NET REALIZED DISTRIBUTIONS NET INVESTMENT GAINS ON FROM INCOME INVESTMENTS CAPITAL -------------- ------------- ------------- HARTFORD MONEY MARKET HLS FUND For the Year Ended December 31, 2003 Class IA..................... $ -- $ -- $ -- Class IB..................... -- -- -- For the Year Ended December 31, 2002 Class IA..................... -- -- -- Class IB..................... -- -- -- For the Year Ended December 31, 2001 Class IA..................... -- -- -- Class IB..................... -- -- -- For the Year Ended December 31, 2000 Class IA..................... -- -- -- Class IB..................... -- -- -- For the Year Ended December 31, 1999 Class IA..................... -- -- -- Class IB..................... -- -- -- HARTFORD MORTGAGE SECURITIES HLS FUND For the Year Ended December 31, 2003 Class IA..................... -- (0.06) -- Class IB..................... -- (0.06) -- For the Year Ended December 31, 2002 Class IA..................... --(5) --(5) --(5) Class IB..................... --(5) --(5) --(5) For the Year Ended December 31, 2001 Class IA..................... --(5) --(5) --(5) Class IB..................... --(5) --(5) --(5) For the Year Ended December 31, 2000 Class IA..................... --(5) --(5) --(5) Class IB..................... --(5) --(5) --(5) For the Year Ended December 31, 1999 Class IA..................... --(5) --(5) --(5) From inception November 9, 1999 through December 31, 1999 Class IB..................... --(5) --(5) --(5) HARTFORD SMALL COMPANY HLS FUND For the Year Ended December 31, 2003 Class IA..................... -- -- -- Class IB..................... -- -- -- For the Year Ended December 31, 2002 Class IA..................... --(5) --(5) --(5) Class IB..................... --(5) --(5) --(5) For the Year Ended December 31, 2001 Class IA..................... --(5) (1.03)(5) --(5) Class IB..................... --(5) (1.03)(5) --(5) For the Year Ended December 31, 2000 Class IA..................... --(5) (2.50)(5) --(5) Class IB..................... --(5) (2.50)(5) --(5) For the Year Ended December 31, 1999 Class IA..................... --(5) (0.03)(5) --(5) Class IB..................... --(5)(6) (0.03)(5)(6) --(5)(6) HARTFORD SMALLCAP GROWTH HLS FUND For the Year Ended December 31, 2003 Class IA..................... -- -- -- Class IB..................... -- -- -- For the Year Ended December 31, 2002 Class IA..................... -- -- -- From inception April, 30 2002 through December 31, 2002 Class IB..................... -- -- -- For the Year Ended December 31, 2001 Class IA..................... -- (2.38) -- For the Year Ended December 31, 2000 Class IA..................... -- (7.00) -- For the Year Ended December 31, 1999 Class IA..................... -- (0.72) -- </Table> See Notes to Financial Statements. 204 - -------------------------------------------------------------------------------- <Table> <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - ----------------------------------------------------------------------------------------------------------------- RATIO OF NET INCREASE NET ASSETS EXPENSES (DECREASE) IN NET ASSET AT END OF TO AVERAGE TOTAL NET ASSETS VALUE AT TOTAL PERIOD NET ASSETS DISTRIBUTIONS VALUE END OF PERIOD RETURN(8) (000'S OMITTED) AFTER WAIVERS ------------- ------------- ------------- --------- --------------- ------------- $ (0.01) $ -- $ 1.00 0.75% $1,609,439 0.49% -- -- 1.00 0.50 240,930 0.74 (0.01) -- 1.00 1.47 2,319,456 0.49 (0.01) -- 1.00 1.24 261,914 0.72 (0.04) -- 1.00 3.87 1,867,520 0.48 (0.04) -- 1.00 3.68 152,129 0.66 (0.06) -- 1.00 6.10 1,242,275 0.48 (0.06) -- 1.00 5.91 36,270 0.66 (0.07) -- 1.00 4.89 1,257,436 0.47 (0.07) -- 1.00 4.71 8,804 0.65 (0.44) (0.17) 11.84 2.29 587,833 0.49 (0.43) (0.19) 11.75 2.03 180,982 0.74 (0.05)(5) 0.47(5) 12.01(5) 8.15 727,323 0.49 (0.05)(5) 0.44(5) 11.94(5) 7.89 116,549 0.73 (0.67)(5) 0.16(5) 11.54(5) 7.50 424,603 0.48 (0.67)(5) 0.14(5) 11.50(5) 7.30 26,121 0.66 (0.08)(5) 0.99(5) 11.38(5) 10.28 310,825 0.48 (0.08)(5) 0.96(5) 11.36(5) 10.08 1,148 0.66 (0.62)(5) 0.46(5) 10.39(5) 1.52 339,767 0.48 (0.61)(5) (0.68)(5) 10.39(5) 0.60(2) 9 0.66(1) -- 5.20 14.49 55.87 851,283 0.76 -- 5.12 14.35 55.48 190,456 1.01 --(5) (4.03)(5) 9.29(5) (30.23) 495,074 0.77 --(5) (4.03)(5) 9.23(5) (30.39) 66,378 1.00 (1.03)(5) (3.55)(5) 13.32(5) (14.92) 745,253 0.76 (1.03)(5) (3.57)(5) 13.26(5) (15.07) 59,371 0.94 (2.50)(5) (5.01)(5) 16.87(5) (13.12) 908,886 0.74 (2.50)(5) (5.04)(5) 16.83(5) (13.28) 40,967 0.92 (0.03)(5) 8.67(5) 21.88(5) 65.83 757,302 0.78 (0.03)(5)(6) 8.64(5)(6) 21.87(5)(6) 65.54 10,200 0.96 -- 5.85 17.55 50.06 346,380 0.66 -- 5.82 17.55 49.70 74,592 0.91 -- (4.74) 11.70 (28.83) 184,062 0.69 -- (4.23) 11.73 (26.51)(2) 7,150 0.89(1) (2.38) (7.29) 16.44 (20.18) 272,272 0.68 (7.00) (10.06) 23.73 (15.08) 352,615 0.66 (0.73) 17.09 33.79 109.25 333,158 0.72 <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - --- --------------------------------------- RATIO OF RATIO OF NET EXPENSES INVESTMENT TO AVERAGE INCOME PORTFOLIO NET ASSETS TO AVERAGE TURNOVER BEFORE WAIVERS NET ASSETS RATE(7) -------------- ---------- --------- 0.49% 0.75% --% 0.74 0.50 -- 0.49 1.43 -- 0.74 1.20 -- 0.48 3.58 -- 0.73 3.40 -- 0.48 5.91 -- 0.73 5.73 -- 0.47 4.81 -- 0.72 4.63 -- 0.49 2.84 111 0.74 2.59 111 0.49 3.86 339 0.74 3.62 339 0.48 5.64 233 0.73 5.46 233 0.48 6.43 534 0.73 6.25 534 0.48 5.98 472 0.73(1) 5.80(1) 472 0.76 (0.49) 171 1.01 (0.74) 171 0.77 (0.30) 222 1.02 (0.53) 222 0.76 0.03 227 1.01 (0.15) 227 0.74 -- 195 0.99 (0.18) 195 0.78 (0.45) 181 1.03 (0.63) 181 0.66 (0.01) 101 0.91 (0.26) 101 0.69 (0.18) 99 0.89(1) (0.13)(1) 99 0.68 (0.02) 164 0.66 0.01 160 0.72 (0.22) 264 </Table> 205 HARTFORD HLS MUTUAL FUNDS FINANCIAL HIGHLIGHTS -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> -- SELECTED PER-SHARE DATA (4) -- ---------------------------------------------------------------------------------------- NET REALIZED AND NET ASSET NET UNREALIZED TOTAL DIVIDENDS VALUE AT INVESTMENT GAIN FROM FROM NET BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME --------- ---------- ------------ ---------- ---------- HARTFORD STOCK HLS FUND For the Year Ended December 31, 2003 Class IA..................... $ 35.46 $ 0.46 $ 8.93 $ 9.39 $ (0.48) Class IB..................... 35.42 0.38 8.88 9.26 (0.39) For the Year Ended December 31, 2002 Class IA..................... 47.36(5) 0.43(5) (11.94)(5) (11.51)(5) (0.39)(5) Class IB..................... 47.31(5) 0.38(5) (11.95)(5) (11.57)(5) (0.32)(5) For the Year Ended December 31, 2001 Class IA..................... 58.80(5) 0.41(5) (7.42)(5) (7.01)(5) (0.38)(5) Class IB..................... 58.79(5) 0.46(5) (7.57)(5) (7.11)(5) (0.32)(5) For the Year Ended December 31, 2000 Class IA..................... 71.47(5) 0.39(5) (5.00)(5) (4.61)(5) (0.41)(5) Class IB..................... 71.51(5) 0.74(5) (5.47)(5) (4.72)(5) (0.34)(5) For the Year Ended December 31, 1999 Class IA..................... 65.62(5) 0.50(5) 11.43(5) 11.93(5) (0.49)(5) Class IB..................... 118.84(5)(6) 0.21(5)(6) 12.00(5)(6) 12.21(5)(6) (0.56)(5)(6) HARTFORD U.S. GOVERNMENT SECURITIES HLS FUND For the Year Ended December 31, 2003 Class IA..................... 11.36 0.31 (0.07) 0.24 (0.17) Class IB..................... 11.34 0.27 (0.05) 0.22 (0.17) For the Year Ended December 31, 2002 Class IA..................... 10.79 0.22 0.89 1.11 (0.54) From inception April 30, 2002 through Decmeber 31, 2002 Class IB..................... 10.51 0.15 0.68 0.83 -- For the Year Ended December 31, 2001 Class IA..................... 10.59 0.50 0.28 0.78 (0.58) For the Year Ended December 31, 2000 Class IA..................... 10.13 0.70 0.46 1.16 (0.70) For the Year Ended December 31, 1999 Class IA..................... 10.93 0.63 (0.84) (0.21) (0.59) HARTFORD VALUE HLS FUND For the Year Ended December 31, 2003 Class IA..................... 7.61 0.10 2.08 2.18 (0.07) Class IB..................... 7.60 0.09 2.06 2.15 (0.06) For the Year Ended December 31, 2002 Class IA..................... 9.94(5) 0.08(5) (2.33)(5) (2.25)(5) (0.08)(5) Class IB..................... 9.93(5) 0.07(5) (2.33)(5) (2.26)(5) (0.07)(5) From inception April 30, 2001 through December 31, 2001 Class IA..................... 10.00(5) 0.03(5) (0.02)(5) 0.01(5) (0.03)(5) Class IB..................... 10.00(5) 0.02(5) (0.03)(5) (0.01)(5) (0.02)(5) <Caption> -- SELECTED PER-SHARE DATA (4) -- -------------------------------------------------------- DISTRIBUTIONS DIVIDENDS FROM IN EXCESS OF NET REALIZED DISTRIBUTIONS NET INVESTMENT GAINS ON FROM INCOME INVESTMENTS CAPITAL -------------- ------------- ------------- HARTFORD STOCK HLS FUND For the Year Ended December 31, 2003 Class IA..................... $ -- $ -- $ -- Class IB..................... -- -- -- For the Year Ended December 31, 2002 Class IA..................... --(5) --(5) --(5) Class IB..................... --(5) --(5) --(5) For the Year Ended December 31, 2001 Class IA..................... --(5) (4.05)(5) --(5) Class IB..................... --(5) (4.05)(5) --(5) For the Year Ended December 31, 2000 Class IA..................... --(5) (7.65)(5) --(5) Class IB..................... --(5) (7.66)(5) --(5) For the Year Ended December 31, 1999 Class IA..................... --(5) (5.59)(5) --(5) Class IB..................... --(5)(6) (58.98)(5)(6) --(5)(6) HARTFORD U.S. GOVERNMENT SECURITIES HLS FUND For the Year Ended December 31, 2003 Class IA..................... -- -- -- Class IB..................... -- -- -- For the Year Ended December 31, 2002 Class IA..................... -- -- -- From inception April 30, 2002 through Decmeber 31, 2002 Class IB..................... -- -- -- For the Year Ended December 31, 2001 Class IA..................... -- -- -- For the Year Ended December 31, 2000 Class IA..................... -- -- -- For the Year Ended December 31, 1999 Class IA..................... -- -- -- HARTFORD VALUE HLS FUND For the Year Ended December 31, 2003 Class IA..................... -- -- -- Class IB..................... -- -- -- For the Year Ended December 31, 2002 Class IA..................... --(5) --(5) --(5) Class IB..................... --(5) --(5) --(5) From inception April 30, 2001 through December 31, 2001 Class IA..................... --(5) (0.04)(5) --(5) Class IB..................... --(5) (0.04)(5) --(5) </Table> See Notes to Financial Statements. 206 - -------------------------------------------------------------------------------- <Table> <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - ----------------------------------------------------------------------------------------------------------------- RATIO OF NET INCREASE NET ASSETS EXPENSES (DECREASE) IN NET ASSET AT END OF TO AVERAGE TOTAL NET ASSETS VALUE AT TOTAL PERIOD NET ASSETS DISTRIBUTIONS VALUE END OF PERIOD RETURN(8) (000'S OMITTED) AFTER WAIVERS ------------- ------------- ------------- --------- --------------- ------------- $ (0.48) $ 8.91 $44.37 26.47% $6,014,675 0.49% (0.39) 8.87 44.29 26.16 562,979 0.74 (0.39)(5) (11.90)(5) 35.46(5) (24.25) 5,094,276 0.49 (0.32)(5) (11.89)(5) 35.42(5) (24.42) 296,767 0.72 (4.43)(5) (11.44)(5) 47.36(5) (12.23) 7,834,643 0.49 (4.37)(5) (11.48)(5) 47.31(5) (12.39) 271,475 0.67 (8.06)(5) (12.67)(5) 58.80(5) (7.04) 9,590,018 0.48 (8.00)(5) (12.72)(5) 58.79(5) (7.21) 136,077 0.66 (6.08)(5) 5.85(5) 71.47(5) 19.78 9,400,385 0.48 (59.54)(5)(6) (4.73)(5)(6) 71.51(5)(6) 19.57 47,439 0.66 (0.17) 0.07 11.43 2.15 514,243 0.47 (0.17) 0.05 11.39 1.89 239,023 0.72 (0.54) 0.57 11.36 10.73 590,626 0.49 -- 0.83 11.34 7.96(2) 100,867 0.74(1) (0.58) 0.20 10.79 7.50 174,333 0.51 (0.70) 0.46 10.59 11.81 141,415 0.52 (0.59) (0.80) 10.13 (1.94) 138,658 0.52 (0.07) 2.11 9.72 28.60 155,085 0.87 (0.06) 2.09 9.69 28.28 99,825 1.12 (0.08)(5) (2.33)(5) 7.61(5) (22.64) 69,388 0.89 (0.07)(5) (2.33)(5) 7.60(5) (22.81) 34,006 1.12 (0.07)(5) (0.06)(5) 9.94(5) 0.06(2) 40,759 0.90(1) (0.06)(5) (0.07)(5) 9.93(5) (0.06)(2) 11,952 1.08(1) <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - --- --------------------------------------- RATIO OF RATIO OF NET EXPENSES INVESTMENT TO AVERAGE INCOME PORTFOLIO NET ASSETS TO AVERAGE TURNOVER BEFORE WAIVERS NET ASSETS RATE(7) -------------- ---------- --------- 0.49% 1.18% 37% 0.74 0.93 37 0.49 0.97 44 0.74 0.75 44 0.49 0.80 39 0.74 0.62 39 0.48 0.64 40 0.73 0.46 40 0.48 0.80 39 0.73 0.62 39 0.47 2.74 191 0.72 2.49 191 0.49 3.47 283 0.74(1) 5.13(1) 283 0.51 5.55 155 0.52 6.28 128 0.52 5.64 97 0.87 1.53 40 1.12 1.28 40 0.89 1.30 37 1.14 1.07 37 0.90(1) 1.02(1) 16 1.15(1) 0.84(1) 16 </Table> 207 HARTFORD HLS MUTUAL FUNDS FINANCIAL HIGHLIGHTS -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> -- SELECTED PER-SHARE DATA (4) -- --------------------------------------------------------------- NET REALIZED AND NET ASSET NET UNREALIZED TOTAL DIVIDENDS VALUE AT INVESTMENT GAIN FROM FROM NET BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME --------- ---------- ------------ ---------- ---------- HARTFORD VALUE OPPORTUNITIES HLS FUND For the Year Ended December 31, 2003 Class IA.............................. $10.86 $ 0.06 $ 4.48 $ 4.54 $ (0.07) Class IB.............................. 10.84 0.08 4.41 4.49 (0.06) For the Year Ended December 31, 2002 Class IA.............................. 14.83 0.07 (3.68) (3.61) (0.09) From inception April 30, 2002 through December 31, 2002 Class IB.............................. 13.51 0.02 (2.69) (2.67) -- For the Year Ended December 31, 2001 Class IA.............................. 17.38 0.08 (0.48) (0.40) (0.11) For the Year Ended December 31, 2000 Class IA.............................. 15.65 0.14 2.68 2.82 (0.13) For the Year Ended December 31, 1999 Class IA.............................. 14.38 0.13 1.15 1.28 -- <Caption> -- SELECTED PER-SHARE DATA (4) -- ---------------------------------------------- DISTRIBUTIONS DIVIDENDS FROM IN EXCESS OF NET REALIZED DISTRIBUTIONS NET INVESTMENT GAINS ON FROM INCOME INVESTMENTS CAPITAL -------------- ------------- ------------- HARTFORD VALUE OPPORTUNITIES HLS FUND For the Year Ended December 31, 2003 Class IA.............................. $ -- $ -- $ -- Class IB.............................. -- -- -- For the Year Ended December 31, 2002 Class IA.............................. -- (0.27) -- From inception April 30, 2002 through December 31, 2002 Class IB.............................. -- -- -- For the Year Ended December 31, 2001 Class IA.............................. -- (2.04) -- For the Year Ended December 31, 2000 Class IA.............................. -- (0.96) -- For the Year Ended December 31, 1999 Class IA.............................. -- (0.01) -- </Table> - --------------- (1) Annualized. (2) Not annualized. (3) Management fees were waived until assets (excluding assets contributed by companies affiliated with HL Advisers) reached $20 million. The ratio of expenses to average net assets would have been higher if management fees were not waived. The ratio of net investment income to average net assets would have been lower if management fees were not waived. (4) Information presented relates to a share of capital stock outstanding for the indicated period. (5) Per shares amounts have been restated to reflect a reverse stock split for Class IB shares effective November 22, 2002. (See Note 11(a)). (6) Per shares amounts have been restated to reflect a reverse stock split for Class IA and IB shares effective September 17, 1999. (See Note 11(b)). (7) Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. (8) Returns include the Fund level expenses, but exclude the insurance charges, if returns had taken into account insurance charges, performance would have been lower. See Notes to Financial Statements. 208 - -------------------------------------------------------------------------------- <Table> <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - ------------------------------------------------------------------------------------------------ RATIO OF NET INCREASE NET ASSETS EXPENSES (DECREASE) IN NET ASSET AT END OF TO AVERAGE TOTAL NET ASSETS VALUE AT TOTAL PERIOD NET ASSETS DISTRIBUTIONS VALUE END OF PERIOD RETURN (000'S OMITTED) AFTER WAIVERS ------------- ------------- ------------- ------- --------------- ------------- $ (0.07) $ 4.47 $15.33 41.87% $ 156,879 0.71% (0.06) 4.43 15.27 41.52 32,572 0.96 (0.36) (3.97) 10.86 (24.95) 88,793 0.73 -- (2.67) 10.84 (19.74)(2) 3,160 0.91(1) (2.15) (2.55) 14.83 (2.55) 130,567 0.73 (1.09) 1.73 17.38 18.49 111,590 0.76 (0.01) 1.27 15.65 8.96 94,583 0.78 <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - --- --------------------------------------- RATIO OF RATIO OF NET EXPENSES INVESTMENT TO AVERAGE INCOME PORTFOLIO NET ASSETS TO AVERAGE TURNOVER BEFORE WAIVERS NET ASSETS RATE(7) -------------- ---------- --------- 0.71% 0.62% 48% 0.96 0.37 48 0.73 0.60 67 0.91(1) 1.06(1) 67 0.73 0.68 147 0.76 0.87 171 0.78 0.85 211 </Table> 209 REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF HARTFORD SERIES FUND, INC. AND HARTFORD HLS SERIES FUND II, INC. - -------------------------------------------------------------------------------- We have audited the accompanying statements of net assets of the Hartford Advisers HLS Fund, Hartford Bond HLS Fund, Hartford Capital Appreciation HLS Fund, Hartford Disciplined Equity HLS Fund (formerly, the Hartford Growth and Income HLS Fund), Hartford Dividend and Growth HLS Fund, Hartford Equity Income HLS Fund, Hartford Focus HLS Fund, Hartford Global Communications HLS Fund, Hartford Global Financial Services HLS Fund, Hartford Global Health HLS Fund, Hartford Global Leaders HLS Fund, Hartford Global Technology HLS Fund, Hartford Growth HLS Fund, Hartford High Yield HLS Fund, Hartford Index HLS Fund, Hartford International Capital Appreciation HLS Fund, Hartford International Opportunities HLS Fund, Hartford International Small Company HLS Fund, Hartford Midcap HLS Fund, Hartford Midcap Value HLS Fund, Hartford Money Market HLS Fund, Hartford Mortgage Securities HLS Fund, Hartford Small Company HLS Fund, Hartford Stock HLS Fund and Hartford Value HLS Fund and the statement of assets and liabilities, including the schedule of investments of the Hartford Global Advisers HLS Fund (twenty-six portfolios comprising Hartford Series Fund, Inc.) and the statements of net assets of the Hartford Growth Opportunities HLS Fund, Hartford SmallCap Growth HLS Fund, Hartford U.S. Government Securities HLS Fund, and Hartford Value Opportunities HLS Fund (four of the portfolios comprising Hartford HLS Series Fund II, Inc.) (collectively, the "Funds") as of December 31, 2003, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for each of the three years in the period ended December 31, 2001 for the Hartford Series Fund, Inc. were audited by other auditors who have ceased operations and whose report, dated February 6, 2002, expressed an unqualified opinion on those financial highlights. The financial highlights for each of the three years in the period ended December 31, 2001 for the Hartford HLS Series Fund II, Inc. were audited by other auditors whose report, dated February 8, 2002, expressed an unqualified opinion on those financial highlights. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights 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 securities owned as of December 31, 2003 by correspondence with the custodian and brokers, or by other appropriate auditing procedures where replies from brokers were not received. 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 and financial highlights referred to above present fairly, in all material respects, the financial position of the Funds identified above at December 31, 2003, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States. /s/ ERNST & YOUNG LLP Boston, Massachusetts February 6, 2004 210 HARTFORD HLS MUTUAL FUNDS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- TAX INFORMATION NOTICE: (UNAUDITED) For the year ended December 31, 2003, the following Funds distributed long-term capital gains dividends as follows: <Table> Hartford Bond HLS Fund ..................................... $ 6,157 Hartford Dividend and Growth HLS Fund....................... 23,281 Hartford Global Health HLS Fund............................. 1,134 Hartford Growth HLS Fund.................................... 120 Hartford Index HLS Fund..................................... 5,727 Hartford International Capital Appreciation HLS Fund........ 300 Hartford International Small Company HLS Fund............... 141 Hartford Mortgage Securities HLS Fund....................... 1,129 </Table> 211 HARTFORD SERIES FUND, INC. AND HARTFORD HLS SERIES FUND II, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) - -------------------------------------------------------------------------------- The Boards of Directors ("Boards") are responsible for overall management of the Funds. The Boards may exercise all powers of the Funds, except those powers that are conferred solely upon or reserved to the shareholders. The following table provides information about the Funds' directors and officers. The business address for all directors and officers is c/o Hartford HLS Funds, P.O. Box 2999, Hartford, CT 06104-2999, except for Tamara L. Fagely and Robert W. Beltz, Jr., whose business address is 500 Bielenberg Dr., Woodbury, MN 55125. - -------------------------------------------------------------------------------- <Table> <Caption> NON-INTERESTED DIRECTORS - -------------------------------------------------------------------------------------------------- TERM OF OFFICE* AND LENGTH OF POSITION HELD TIME SERVED WITH THE -------------- PRINCIPAL OCCUPATION(S) NAME AND AGE COMPANY SF(1) SF2(2) DURING PAST 5 YEARS - -------------------------------------------------------------------------------------------------- LYNN S. BIRDSONG Director 2003 2003 From 1979 to 2002, Mr. Birdsong was a (age 57) managing director of Zurich Scudder Investments, an investment management firm. In 2003, Mr. Birdsong became an independent director of the Atlantic Whitehall Funds and The Japan Fund; during his employment with Scudder, he was an interested director of The Japan Fund. Since 1981, Mr. Birdsong has been a partner in Birdsong Company, an advertising specialty firm. He is also a Director of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - -------------------------------------------------------------------------------------------------- WINIFRED E. COLEMAN Director 1995(3) 2002 Ms. Coleman has served as President of (age 71) Saint Joseph College since 1991 and President of Cashel House, Ltd. (retail) since 1985. She is also a Director of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - -------------------------------------------------------------------------------------------------- ROBERT M. GAVIN Director 2002 1986 Dr. Gavin is an educational consultant. (age 63) Prior to September 1, 2001, he was President of Cranbrook Education Community; and prior to July 1996, he was President of Macalester College, St. Paul, Minnesota. He is also a Director of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - -------------------------------------------------------------------------------------------------- DUANE E. HILL Director 2001 2002 Mr. Hill is Partner Emeritus and a (age 58) founding partner of TSG Capital Group, a private equity investment firm that serves as sponsor and lead investor in leveraged buyouts of middle market companies. Mr. Hill is also a Partner of TSG Ventures L.P., a private equity investment company that invests primarily in minority-owned small businesses. He is also a Director of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - -------------------------------------------------------------------------------------------------- <Caption> NON-INTERESTED DIRECTORS NON-INTERESTED DIRECTORS - ------------------------ ----------------------------------- NUMBER OF PORTFOLIOS IN FUND COMPLEX OTHER OVERSEEN BY DIRECTORSHIPS NAME AND AGE DIRECTOR HELD BY DIRECTOR - ------------------------ ----------------------------------- LYNN S. BIRDSONG 72 N/A (age 57) - -------------------------------------------------------------------------------------------------- WINIFRED E. COLEMAN 72 N/A (age 71) - -------------------------------------------------------------------------------------------------- ROBERT M. GAVIN 72 Dr. Gavin is a (age 63) Director of Systems & Computer Technology Corporation. - -------------------------------------------------------------------------------------------------- DUANE E. HILL 72 N/A (age 58) - -------------------------------------------------------------------------------------------------- </Table> 212 HARTFORD SERIES FUND, INC. AND HARTFORD HLS SERIES FUND II, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> NON-INTERESTED DIRECTORS - -------------------------------------------------------------------------------------------------- TERM OF OFFICE* AND LENGTH OF POSITION HELD TIME SERVED WITH THE -------------- PRINCIPAL OCCUPATION(S) NAME AND AGE COMPANY SF(1) SF2(2) DURING PAST 5 YEARS - -------------------------------------------------------------------------------------------------- PHILLIP O. PETERSON Director 2002 2000 Mr. Peterson is a mutual fund industry (age 59) consultant. He was a partner of KPMG LLP until July 1999. In January 2004, Mr. Peterson was appointed independent president of the Strong Mutual Funds. He is also a Director of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - -------------------------------------------------------------------------------------------------- MILLARD H. PRYOR, JR. Director 1977(3) 2002 Mr. Pryor has served as Managing (age 70) Director of Pryor & Clark Company (real estate investment), Hartford, Connecticut, since June 1992. He is also a Director of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc., and The Hartford Income Shares Fund, Inc. - -------------------------------------------------------------------------------------------------- THOMAS M. MARRA(3) Director and 2002 2002 Mr. Marra is President and Chief (age 45) Chairman of Operating Officer of Hartford Life, the Board Inc. He is also a member of the Board of Directors and a member of the Office of the Chairman for The Hartford Financial Services Group, Inc. ("The Hartford"), the parent company of Hartford Life. Mr. Marra was named President of Hartford Life in 2001 and COO in 2000, and served as Director of Hartford Life's Investment Products Division from 1998 to 2000. He was head of the company's Individual Life and Annuities Division from 1994 to 1998 after being promoted to Senior Vice President in 1994 and to Executive Vice President in 1996. Mr. Marra is also a Managing Member and President of Hartford Investment Financial Services, LLC ("HIFSCO") and HL Investment Advisors LLC ("HL Advisors"). He is also a Director and Chairman of the Board of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - -------------------------------------------------------------------------------------------------- LOWNDES A. SMITH(4) Director 1996 2002 Mr. Smith served as Vice Chairman of (age 64) The Hartford from February 1997 to January 2002, as President and Chief Executive Officer of Hartford Life, Inc. from February 1997 to January 2002, and as President and Chief Operating Officer of The Hartford Life Insurance Companies from January 1989 to January 2002. Mr. Smith is also a Director of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - -------------------------------------------------------------------------------------------------- <Caption> NON-INTERESTED DIRECTORS NON-INTERESTED DIRECTORS - ------------------------ ----------------------------------- NUMBER OF PORTFOLIOS IN FUND COMPLEX OTHER OVERSEEN BY DIRECTORSHIPS NAME AND AGE DIRECTOR HELD BY DIRECTOR - ------------------------ ----------------------------------- PHILLIP O. PETERSON 72 N/A (age 59) - -------------------------------------------------------------------------------------------------- MILLARD H. PRYOR, JR. 72 Mr. Pryor is a (age 70) Director of Infodata Systems, Inc. (software company) and CompuDyne Corporation (security products and services) and August Financial Holding Company (advisory services). - -------------------------------------------------------------------------------------------------- THOMAS M. MARRA(3) 72 Mr. Marra is a (age 45) member of the Board of Directors of The Hartford. - -------------------------------------------------------------------------------------------------- LOWNDES A. SMITH(4) 72 N/A (age 64) - -------------------------------------------------------------------------------------------------- </Table> 213 HARTFORD SERIES FUND, INC. AND HARTFORD HLS SERIES FUND II, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> NON-INTERESTED DIRECTORS - -------------------------------------------------------------------------------------------------- TERM OF OFFICE* AND LENGTH OF POSITION HELD TIME SERVED WITH THE -------------- PRINCIPAL OCCUPATION(S) NAME AND AGE COMPANY SF(1) SF2(2) DURING PAST 5 YEARS - -------------------------------------------------------------------------------------------------- DAVID M. ZNAMIEROWSKI(4) President and 1999 2001 Mr. Znamierowski currently serves as (age 43) Director(5) President of Hartford Investment Management Company ("Hartford Investment"), Senior Vice President for Hartford Life, Inc., and Senior Vice President and Chief Investment Officer for Hartford Life Insurance Company. Mr. Znamierowski is also a Managing Member and Senior Vice President of HIFSCO and HL Advisors. Mr. Znamierowski is Group Senior Vice President and Chief Investment Officer for The Hartford. In addition, he serves as President and Director of The Hartford Mutual Funds, Inc. and as President of The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - -------------------------------------------------------------------------------------------------- ROBERT W. BELTZ, JR. Vice President 2002 1993 Mr. Beltz currently serves as Vice (age 54) President Securities Operations of Hartford Administrative Services Company ("HASCO"). Since December 2001, he has served as Assistant Vice President of Hartford Life Insurance Company. In addition, he is Vice President of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - -------------------------------------------------------------------------------------------------- KEVIN J. CARR Vice President 1996 2001 Mr. Carr has served as The Hartford's (age 49) and Secretary Assistant General Counsel since 1999, Counsel since November 1996 and Associate Counsel since November 1995. Mr. Carr is also Vice President and Assistant Secretary of HL Advisors and HIFSCO and Assistant Secretary of Hartford Investment. He is also Vice President and Secretary of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - -------------------------------------------------------------------------------------------------- WILLIAM H. DAVISON, JR. Vice President 2002 2002 Mr. Davison is a Managing Director and (age 46) Director of the Funds Management Group of Hartford Investment. Mr. Davison is also a Senior Vice President of HIFSCO and HL Advisors. In addition, he serves as Vice President of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - -------------------------------------------------------------------------------------------------- TAMARA L. FAGELY Vice President 2002 1993 Ms. Fagely has been Vice President of (age 45) HASCO since 1998. Prior to 1998, she was Second Vice President of HASCO. Since December 2001, she has served as Assistant Vice President of Hartford Life Insurance Company. In addition, she is Controller of HIFSCO and Vice President, Controller and Treasurer of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - -------------------------------------------------------------------------------------------------- <Caption> NON-INTERESTED DIRECTORS NON-INTERESTED DIRECTORS - ------------------------ ----------------------------------- NUMBER OF PORTFOLIOS IN FUND COMPLEX OTHER OVERSEEN BY DIRECTORSHIPS NAME AND AGE DIRECTOR HELD BY DIRECTOR - ------------------------ ----------------------------------- DAVID M. ZNAMIEROWSKI(4) 53 N/A (age 43) - -------------------------------------------------------------------------------------------------- ROBERT W. BELTZ, JR. N/A N/A (age 54) - -------------------------------------------------------------------------------------------------- KEVIN J. CARR N/A N/A (age 49) - -------------------------------------------------------------------------------------------------- WILLIAM H. DAVISON, JR. N/A N/A (age 46) - -------------------------------------------------------------------------------------------------- TAMARA L. FAGELY N/A N/A (age 45) - -------------------------------------------------------------------------------------------------- </Table> 214 HARTFORD SERIES FUND, INC. AND HARTFORD HLS SERIES FUND II, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> NON-INTERESTED DIRECTORS - -------------------------------------------------------------------------------------------------- TERM OF OFFICE* AND LENGTH OF POSITION HELD TIME SERVED WITH THE -------------- PRINCIPAL OCCUPATION(S) NAME AND AGE COMPANY SF(1) SF2(2) DURING PAST 5 YEARS - -------------------------------------------------------------------------------------------------- BRUCE FERRIS Vice President 2002 2002 Mr. Ferris serves as Senior Vice (age 48) President and a Director of Sales and Marketing in the Investment Products Division of Hartford Life Insurance Company. He is also a Managing Member of HL Advisors. In addition, Mr. Ferris is Vice President of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - -------------------------------------------------------------------------------------------------- MARY JANE FORTIN Vice President 2003 2003 Ms. Fortin is Senior Vice President and (age 39) Director of Mutual Funds and 529 Programs for Hartford Life. In addition, she is Vice President of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. Previously, Ms. Fortin served as Senior Vice President and Chief Accounting Officer of Hartford Life. She joined Hartford Life in 1997. - -------------------------------------------------------------------------------------------------- GEORGE R. JAY Vice 1996 2001 Mr. Jay serves as Assistant Vice (age 51) President, President of Hartford Life Insurance Controller and Company's Equity Products Department. Treasurer He is also Controller of HL Advisors and Vice President of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - -------------------------------------------------------------------------------------------------- STEPHEN T. JOYCE Vice President 2000 2001 Mr. Joyce currently serves as Senior (age 44) Vice President and Director of the Institutional Products Group for Hartford Life Insurance Company. Mr. Joyce is also Senior Vice President HL Advisors and Vice President of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. Previously, he served as Vice President (1997-1999) and Assistant Vice President (1994-1997) of Hartford Life Insurance Company. - -------------------------------------------------------------------------------------------------- DAVID N. LEVENSON Vice President 2000 2001 Mr. Levenson serves as Senior Vice (age 37) President of Hartford Life Insurance Company's Retail Product Management Group and is responsible for all retail product management and profitability. Mr. Levenson is also a Senior Vice President of HIFSCO. In addition, he serves as Vice President of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. Mr. Levenson joined The Hartford in 1995. - -------------------------------------------------------------------------------------------------- <Caption> NON-INTERESTED DIRECTORS NON-INTERESTED DIRECTORS - ------------------------ ----------------------------------- NUMBER OF PORTFOLIOS IN FUND COMPLEX OTHER OVERSEEN BY DIRECTORSHIPS NAME AND AGE DIRECTOR HELD BY DIRECTOR - ------------------------ ----------------------------------- BRUCE FERRIS N/A N/A (age 48) - -------------------------------------------------------------------------------------------------- MARY JANE FORTIN N/A N/A (age 39) - -------------------------------------------------------------------------------------------------- GEORGE R. JAY N/A N/A (age 51) - -------------------------------------------------------------------------------------------------- STEPHEN T. JOYCE N/A N/A (age 44) - -------------------------------------------------------------------------------------------------- DAVID N. LEVENSON N/A N/A (age 37) - -------------------------------------------------------------------------------------------------- </Table> 215 HARTFORD SERIES FUND, INC. AND HARTFORD HLS SERIES FUND II, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> NON-INTERESTED DIRECTORS - -------------------------------------------------------------------------------------------------- TERM OF OFFICE* AND LENGTH OF POSITION HELD TIME SERVED WITH THE -------------- PRINCIPAL OCCUPATION(S) NAME AND AGE COMPANY SF(1) SF2(2) DURING PAST 5 YEARS - -------------------------------------------------------------------------------------------------- JOHN C. WALTERS Vice President 2000 2001 Mr. Walters serves as Executive Vice (age 41) President and Director of the Investment Products Division of Hartford Life Insurance Company. Mr. Walters is also a Managing Member and Executive Vice President of HIFSCO and HL Advisors. In addition, he is Vice President of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. Previously, Mr. Walters was with First Union Securities. - -------------------------------------------------------------------------------------------------- <Caption> NON-INTERESTED DIRECTORS NON-INTERESTED DIRECTORS - ------------------------ ----------------------------------- NUMBER OF PORTFOLIOS IN FUND COMPLEX OTHER OVERSEEN BY DIRECTORSHIPS NAME AND AGE DIRECTOR HELD BY DIRECTOR - ------------------------ ----------------------------------- JOHN C. WALTERS N/A N/A (age 41) - -------------------------------------------------------------------------------------------------- </Table> * Each director and officer may serve until his or her successor is elected and qualifies. (1) Hartford Series Fund, Inc. (2) Hartford HLS Series Fund II, Inc. (3) Ms. Coleman and Mr. Pryor served as directors, beginning in 1995 and 1977, respectively, of certain Maryland corporations (each of which was registered with the SEC as an open-end management investment company) that were reorganized as investment portfolios (series) of Hartford Series Fund, Inc. on August 28, 2002. (4) "Interested person" of each Company as defined in the Investment Company Act of 1940 because of the person's affiliation with or equity ownership of [Hartford Investment Financial Services, LLC] or affiliated companies. (5) President and Director of Hartford Series Fund, Inc.; President but not Director of Hartford HLS Series Fund II, Inc. The Funds' Statements of Additional Information (SAI) include further information about fund directors and are available without charge upon request by calling 1-800-862-6668 or writing: Hartford HLS Funds, c/o Individual Annuity Services, P.O. Box 5085, Hartford, CT 06102-5085. 216 PRIVACY POLICY AND PRACTICES OF THE HARTFORD FINANCIAL SERVICES GROUP, INC. AND ITS AFFILIATES (HEREIN CALLED "WE, OUR, AND US") This Privacy Policy applies to our United States Operations We value your trust. We are committed to the responsible: a) management; b) use; and c) protection; of PERSONAL INFORMATION. This notice describes how we collect, disclose, and protect PERSONAL INFORMATION. We collect PERSONAL INFORMATION to: a) service your TRANSACTIONS with us; and b) support our business functions. We may obtain PERSONAL INFORMATION from: a) YOU; b) your TRANSACTIONS with us; and c) third parties such as a consumer-reporting agency. Based on the type of product or service YOU apply for or get from us, PERSONAL INFORMATION such as: a) your name; b) your address; c) your income; d) your payment; or e) your credit history; may be gathered from sources such as applications, TRANSACTIONS, and consumer reports. To serve YOU and service our business, we may share certain PERSONAL INFORMATION. We will share PERSONAL INFORMATION, only as allowed by law, with affiliates such as: a) our insurance companies; b) our employee agents; c) our brokerage firms; and d) our administrators. As allowed by law, we may share PERSONAL FINANCIAL INFORMATION with our affiliates to: a) market our products; or b) market our services; to YOU without providing YOU with an option to prevent these disclosures. We may also share PERSONAL INFORMATION, only as allowed by law, with unaffiliated third parties including: a) independent agents; b) brokerage firms; c) insurance companies; d) administrators; and e) service providers; who help us serve YOU and service our business. When allowed by law, we may share certain PERSONAL FINANCIAL INFORMATION with other unaffiliated third parties who assist us by performing services or functions such as: a) taking surveys; b) marketing our products or services; or c) offering financial products or services under a joint agreement between us and one or more financial institutions. We will not sell or share your PERSONAL FINANCIAL INFORMATION with anyone for purposes unrelated to our business functions without offering YOU the opportunity to: a) "opt-out;" or b) "opt-in;" as required by law. We only disclose PERSONAL HEALTH INFORMATION with: a) your proper written authorization; or b) as otherwise allowed or required by law. Our employees have access to PERSONAL INFORMATION in the course of doing their jobs, such as: a) underwriting policies; b) paying claims; c) developing new products; or d) advising customers of our products and services. We use manual and electronic security procedures to maintain: a) the confidentiality; and b) the integrity of; PERSONAL INFORMATION that we have. We use these procedures to guard against unauthorized access. 217 Some techniques we use to protect PERSONAL INFORMATION include: a) secured files; b) user authentication; c) encryption; d) firewall technology; and e) the use of detection software. We are responsible for and must: a) identify information to be protected; b) provide an adequate level of protection for that data; c) grant access to protected data only to those people who must use it in the performance of their job-related duties. Employees who violate our Privacy Policy will be subject to discipline, which may include ending their employment with us. At the start of our business relationship, we will give YOU a copy of our current Privacy Policy. We will also give YOU a copy of our current Privacy Policy once a year if YOU maintain a continuing business relationship with us. We will continue to follow our Privacy Policy regarding PERSONAL INFORMATION even when a business relationship no longer exists between us. As used in this Privacy Notice: APPLICATION means your request for our product or service. PERSONAL FINANCIAL INFORMATION means financial information such as: a) credit history; b) income; c) financial benefits; or d) policy or claim information. PERSONAL HEALTH INFORMATION means health information such as: a) your medical records; or b) information about your illness, disability or injury. PERSONAL INFORMATION means information that identifies YOU personally and is not otherwise available to the public. It includes: a) PERSONAL FINANCIAL INFORMATION; and b) PERSONAL HEALTH INFORMATION. TRANSACTION means your business dealings with us, such as: a) your APPLICATION; b) your request for us to pay a claim; and c) your request for us to take an action on your account. YOU means an individual who has given us PERSONAL INFORMATION in conjunction with: a) asking about; b) applying for; or c) obtaining; a financial product or service from us if the product or service is used mainly for personal, family, or household purposes. This Privacy Policy is being provided on behalf of the following affiliates of The Hartford Financial Services Group, Inc.: American Maturity Life Insurance Company; Capstone Risk Management, LLC; First State Insurance Company; Hart Life Insurance Company; Hartford Accident & Indemnity Company; Hartford Administrative Services Company; Hartford Casualty Insurance Company; Hartford Equity Sales Company, Inc.; Hartford Fire Insurance Company; Hartford HLS Series Fund II, Inc.; Hartford Insurance Company of Illinois; Hartford Insurance Company of the Midwest; Hartford Insurance Company of the Southeast; Hartford International Life Reassurance Corporation; Hartford Investment Financial Services, LLC; Hartford Investment Management Company; Hartford Life & Accident Insurance Company; Hartford Life and Annuity Insurance Company; Hartford Life Insurance Company; Hartford Lloyd's Insurance Company; Hartford Securities Distribution Company, Inc.; Hartford Series Fund, Inc.; Hartford Specialty Company; Hartford Underwriters Insurance Company; Hartford-Comprehensive Employee Benefit Service Company; International Corporate Marketing Group, LLC; New England Insurance Company; Nutmeg Insurance Agency, Inc.; Nutmeg Insurance Company; Nutmeg Life Insurance Company; Omni General Agency, Inc.; Omni Indemnity Company; Omni Insurance Company; P2P Link, LLC; Pacific Insurance Company, Limited; Planco Financial Services, Inc.; Property and Casualty Insurance Company of Hartford; Sentinel Insurance Company, Ltd.; Servus Life Insurance Company; Specialty Risk Services, Inc.; The Hartford Income Shares Fund, Inc.; The Hartford Mutual Funds II, Inc.; The Hartford Mutual Funds, Inc.; Trumbull Insurance Company; Trumbull Services, L.L.C.; Twin City Fire Insurance Company; Woodbury Financial Services, Inc. 218 [THE HARTFORD LOGO] HV-2233-10 Printed in U.S.A. (c) The Hartford, Hartford, CT 06115 "The Hartford" is The Hartford Financial Services Group, Inc. and its subsidiaries, including the issuing companies of Hartford Life Insurance Company and Hartford Life and Annuity Insurance Company. - ----------------------- ------------ The Hartford PRESORTED P.O. Box 2999 STANDARD Hartford, CT 06104-2999 U.S. POSTAGE - ----------------------- PAID HUDSON, MA PERMIT NO. 6 ------------ HARTFORD HLS FUNDS ANNUAL REPORT AND MANAGER DISCUSSIONS DECEMBER 31, 2003 For use with Fortis Benefits and First Fortis Variable Insurance Products IMPORTANT NOTICE TO CONTRACT OWNERS The Hartford is committed to doing what we can to prevent improper trading activity within our products, and will continue to react to Industry "best practices" with respect to this type of activity. We have recently enhanced the language in our variable annuity and variable life insurance policies prospectus surrounding our transfer restrictions by adding the following language to your prospectus. The underlying Funds are available for use with many different variable annuity products, variable life insurance policies, and funding agreements, and they are offered directly to certain qualified retirement plans. Some of these products and plans may have different transfer restrictions or no transfer restrictions at all. In addition, as a result of settlement of litigation against Hartford, with respect to certain owners of older Contracts, we currently only have the ability to restrict transfers into certain funds and to limit the total Contract Value invested in any one Fund. The effect on you may include higher transaction costs or lower performance. To obtain a copy of our latest prospectus for your variable annuity, variable life insurance policies or the underlying funds, please log on to www.hartfordinvestor.com or call 800-862-6668, for variable annuity or 800-800-2000, extension 13028, for variable life insurance policies. ARE NOT INSURED BY FDIC OR ANY FEDERAL GOVERNMENT AGENCY MAY LOSE VALUE ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE [/FDIC GRAPHIC] [/BANK GRAPHIC] <Table> Annual Report December 31, 2003 (STAG PHOTO) </Table> - Manager Discussions - Financials (THE HARTFORD LOGO) HARTFORD HLS MUTUAL FUNDS TABLE OF CONTENTS <Table> Manager Discussions 1 Hartford HLS Mutual Funds Financial Statements: Statement of Net Assets or Statement of Assets and Liabilities as of December 31, 2003: Hartford Advisers HLS Fund 27 Hartford Blue Chip Stock HLS Fund 33 Hartford Bond HLS Fund 36 Hartford Capital Appreciation HLS Fund 44 Hartford Capital Opportunities HLS Fund 47 Hartford Disciplined Equity HLS Fund (formerly, Hartford Growth and Income HLS Fund) 50 Hartford Global Leaders HLS Fund 52 Hartford Growth Opportunities HLS Fund 55 Hartford High Yield HLS Fund 58 Hartford Index HLS Fund 69 Hartford International Opportunities HLS Fund 75 Hartford International Stock HLS Fund 78 Hartford LargeCap Growth HLS Fund 80 Hartford MidCap Stock HLS Fund 84 Hartford Money Market HLS Fund 85 Hartford Multisector Bond HLS Fund 87 Hartford SmallCap Growth HLS Fund 94 Hartford SmallCap Value HLS Fund 97 Hartford Stock HLS Fund 99 Hartford U.S. Government Securities HLS Fund 101 Hartford Value Opportunities HLS Fund 103 Statement of Operations for the Year Ended December 31, 2003 106 Statement of Changes in Net Assets for the Two Years in the Year Ended December 31, 2003 110 Notes to Financial Statements 118 Financial Highlights 150 Report of Independent Auditors 161 Tax Information Notice (Unaudited) 162 Boards of Directors and Officer Information (Unaudited) 163 Privacy Policy 168 </Table> Contract owners should refer to the prospectus provided to them at the time of purchase of their contract for a description of investment alternatives available in the Separate Accounts. This prospectus, along with the financial information contained in this report, provides them with complete and up-to-date financial information regarding the Separate Account. This report is prepared for the general information of contract owners and is not an offer of contracts. It should not be used in connection with any offer, except in conjunction with the appropriate prospectus which contains all pertinent information including the applicable sales, administrative and other charges. IMPORTANT INFORMATION The following disclosure applies to all Hartford HLS Mutual Funds: The charts on the following pages represent hypothetical investments in the Hartford HLS Mutual Funds. (Returns include the Fund level expenses, but exclude the insurance charges, if returns had taken into account insurance charges, performance would have been lower). Past performance does not guarantee future results. The value of the contract will fluctuate so that when redeemed, it may be worth more or less than the original investment. Total Returns do not reflect the deduction of taxes that a shareholder would pay on portfolio distributions or the redemption of portfolio shares. <Table> Hartford Advisers HLS Fund(1,)(2,)(4) Hartford International Opportunities HLS Hartford Blue Chip Stock HLS Fund Fund(1,)(2,)(4) Hartford Bond HLS Fund(1,)(2,)(4) Hartford International Stock HLS Fund Hartford Capital Appreciation HLS Hartford LargeCap Growth HLS Fund Fund(1,)(2,)(4) Hartford MidCap Stock HLS Fund Hartford Capital Opportunities HLS Fund Hartford Multisector Bond HLS Fund Hartford Disciplined Equity HLS Fund (formerly, Hartford SmallCap Growth HLS Fund(1,)(3) Hartford Growth and Income HLS Fund)(1,)(2) Hartford SmallCap Value HLS Fund(1,)(6) Hartford Global Leaders HLS Fund(1,)(2) Hartford Stock HLS Fund(1,)(2,)(4) Hartford Growth Opportunities HLS Fund(1,)(3) Hartford U.S. Government Securities HLS Hartford High Yield HLS Fund(1,)(2) Fund(1,)(3) Hartford Index HLS Fund(1,)(2,)(5) Hartford Value Opportunities HLS Fund(1,)(3) </Table> ( 1) Growth of a $10,000 investment in Class IB shares will vary from the results seen on this page due to differences in the expense charged to this share class. ( 2) Performance for periods when fee waivers were in place would have been lower in the absence of the waivers. ( 3) Class IB shares commenced on May 1, 2002. Class IB share performance prior to that date reflects Class IA share performance adjusted to reflect the 12b-1 fee of 0.25% applicable to Class IB shares. The performance after such date reflects actual Class IB share performance. ( 4) Class IB shares commenced on April 1, 1998. Class IB share performance prior to that date reflects Class IA share performance adjusted to reflect the 12b-1 fee of 0.25% applicable to Class IB shares. The performance after such date reflects actual Class IB share performance. ( 5) Class IB shares commenced on November 9, 1999. Class IB share performance prior to that date reflects Class IA share performance adjusted to reflect the 12b-1 fee of 0.25% applicable to Class IB shares. The performance after such date reflects actual Class IB share performance. ( 6) Class IB shares commenced on July 1, 2003. Class IB share performance prior to that date reflects Class IA share performance adjusted to reflect the 12b-1 fee of 0.25% applicable to Class IB shares. The performance after such date reflects actual Class IB share performance. The opinions about future economic and market developments expressed in this report are those of the portfolio manager(s) and are current only through the end of the period of the report as stated on the cover. These views are subject to change at any time based on market and other conditions, and no forecasts can be guaranteed. 1 COMPARATIVE BENCHMARKS appear throughout the fund commentary as a measure of fund performance. You cannot invest directly in any of the indices. LEHMAN BROTHERS GOVERNMENT / CREDIT BOND INDEX is an unmanaged, market-value-weighted index of all debt obligations of the U.S. Treasury and U.S. Government agencies (excluding mortgage-backed securities) and of all publicly issued fixed-rate, nonconvertible, investment grade domestic corporate debt. LEHMAN BROTHERS HIGH YIELD CORPORATE INDEX is an unmanaged broad-based market value-weighted index that tracks the total return performance of non-investment grade, fixed-rate, publicly placed, dollar denominated and nonconvertible debt registered with the SEC. LEHMAN BROTHERS INTERMEDIATE GOVERNMENT INDEX is an unmanaged index of government bonds with maturities of between one and ten years. LEHMAN BROTHERS U.S. AGGREGATE BOND INDEX is an unmanaged index and is composed of securities from the Lehman Brothers Government / Credit Bond Index, Mortgage-Backed Securities Index, Asset-Backed Securities Index and Commercial Mortgage-Backed Securities Index. MSCI AC WORLD FREE EX U.S. INDEX is a broad based, unmanaged, market capitalization weighted, total return index that measures the performance of both developed and emerging stock markets, excluding the U.S. MSCI EAFE - THE MORGAN STANLEY CAPITAL INTERNATIONAL EUROPE, AUSTRALASIA AND FAR EAST INDEX is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. and Canada. MSCI WORLD INDEX is a broad-based unmanaged market capitalization weighted total return index which measures performance of 23 developed-country global stock markets, including the United States, Canada, Europe, Australia, New Zealand and the Far East. RUSSELL 2000 GROWTH INDEX is an unmanaged index of those Russell 2000 Index growth companies with higher price-to-book ratios and higher forecasted growth values. (The Russell 2000 Index is a broad-based unmanaged index comprised of 2,000 of the smallest U.S. domiciled company common stocks (on the basis of capitalization) that are traded in the United States on the New York Stock Exchange, American Stock Exchange and Nasdaq.) RUSSELL 2000 VALUE INDEX is a broad-based unmanaged index comprised of 2,000 of the smallest U.S. domiciled company common stocks (on the basis of capitalization) that are traded in the United States on the New York Stock Exchange, American Stock Exchange and Nasdaq. RUSSELL 2500 INDEX is an unmanaged index that measures the performance of the 2,500 largest U.S. companies based on total market capitalization. RUSSELL 3000 GROWTH INDEX is an unmanaged index that measures the performance of those Russell 3000 Index companies with higher price-to-book ratios and higher forecasted growth values. (The Russell 3000 Index is an unmanaged index that measures the performance of the 3,000 largest U.S. companies based on total market capitalization.) RUSSELL 3000 VALUE INDEX is an unmanaged index measuring the performance of those Russell 3000 Index companies with lower price-to-book ratios and lower forecasted growth values. S&P 500 INDEX is a market capitalization weighted price index composed of 500 widely held common stocks. S&P MIDCAP 400 INDEX is an unmanaged index of common stocks of companies chosen by S&P designed to represent price movements in the mid-cap U.S. equity market. 2 Hartford Advisers HLS Fund inception 3/31/1983 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 12/31/93 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> LEHMAN GOVERNMENT/CREDIT ADVISERS IA S&P 500 INDEX BOND INDEX ----------- ------------- ------------------------ 12/31/93 10000.00 10000.00 10000.00 10210.00 10340.00 10150.00 10058.00 10059.00 9930.00 9667.00 9621.00 9687.00 9666.00 9745.00 9607.00 9744.00 9904.00 9589.00 9556.00 9662.00 9566.00 9814.00 9979.00 9758.00 10040.00 10387.00 9762.00 9801.00 10133.00 9614.00 9825.00 10361.00 9603.00 9604.00 9984.00 9586.00 12/94 9726.00 10131.00 9649.00 9905.00 10394.00 9834.00 10267.00 10799.00 10062.00 10484.00 11117.00 10130.00 10659.00 11444.00 10271.00 11044.00 11901.00 10702.00 11248.00 12177.00 10787.00 11461.00 12580.00 10746.00 11540.00 12610.00 10883.00 11923.00 13142.00 10994.00 11843.00 13094.00 11155.00 12320.00 13670.00 11339.00 12/95 12483.00 13933.00 11506.00 12756.00 14407.00 11577.00 12795.00 14541.00 11332.00 12860.00 14681.00 11237.00 12965.00 14897.00 11160.00 13196.00 15279.00 11141.00 13316.00 15337.00 11290.00 13012.00 14660.00 11316.00 13131.00 14969.00 11288.00 13703.00 15810.00 11489.00 14002.00 16246.00 11757.00 14846.00 17473.00 11973.00 12/96 14553.00 17127.00 11840.00 15189.00 18196.00 11854.00 15249.00 18340.00 11879.00 14819.00 17588.00 11738.00 15488.00 18636.00 11909.00 16180.00 19769.00 12021.00 16882.00 20655.00 12165.00 17931.00 22297.00 12537.00 17045.00 21048.00 12396.00 17767.00 22199.00 12591.00 17444.00 21458.00 12793.00 17965.00 22451.00 12860.00 12/97 18120.00 22838.00 12995.00 18383.00 23089.00 13178.00 19286.00 24753.00 13152.00 20019.00 26021.00 13192.00 20338.00 26284.00 13258.00 20163.00 25832.00 13401.00 20917.00 26880.00 13537.00 21065.00 26595.00 13548.00 19229.00 22749.00 13813.00 20017.00 24208.00 14208.00 21013.00 26175.00 14107.00 21814.00 27761.00 14191.00 12/98 22587.00 29361.00 14226.00 23084.00 30588.00 14327.00 22548.00 29638.00 13987.00 23237.00 30823.00 14056.00 23853.00 32017.00 14091.00 23271.00 31262.00 13946.00 24147.00 32997.00 13902.00 23658.00 31966.00 13864.00 23445.00 31807.00 13853.00 23181.00 30935.00 13977.00 23973.00 32892.00 14014.00 24164.00 33561.00 14006.00 12/99 24978.00 35538.00 13921.00 24110.00 33752.00 13917.00 23960.00 33114.00 14091.00 25583.00 36351.00 14295.00 25044.00 35258.00 14225.00 24740.00 34534.00 14212.00 25107.00 35386.00 14502.00 24873.00 34833.00 14656.00 25761.00 36995.00 14863.00 25088.00 35043.00 14919.00 25251.00 34894.00 15012.00 24434.00 32145.00 15269.00 12/00 24792.00 32303.00 15570.00 25307.00 33448.00 15832.00 24343.00 30400.00 15995.00 23350.00 28475.00 16068.00 24321.00 30685.00 15948.00 24504.00 30891.00 16040.00 23882.00 30140.00 16117.00 23909.00 29843.00 16518.00 23003.00 27977.00 16730.00 22102.00 25719.00 16884.00 22618.00 26210.00 17313.00 23575.00 28220.00 17029.00 12/01 23641.00 28468.00 16894.00 23330.00 28053.00 17018.00 23201.00 27512.00 17163.00 23618.00 28547.00 16815.00 22376.00 26817.00 17140.00 22236.00 26620.00 17299.00 21293.00 24725.00 17446.00 20568.00 22799.00 17656.00 20587.00 22947.00 18052.00 19234.00 20455.00 18440.00 20136.00 22253.00 18264.00 21096.00 23561.00 18275.00 12/02 20381.00 22178.00 18759.00 20024.00 21599.00 18758.00 19886.00 21275.00 19092.00 19924.00 21482.00 19067.00 20944.00 23250.00 19271.00 21803.00 24474.00 19819.00 21977.00 24787.00 19739.00 22093.00 25224.00 18912.00 22336.00 25715.00 19036.00 22261.00 25443.00 19640.00 22982.00 26880.00 19390.00 23141.00 27116.00 19442.00 12/03 24150.00 28538.00 19633.00 </Table> <Table> --- ADVISERS IA --- S&P 500 INDEX MMMM LEHMAN GOVERNMENT/ $10,000 starting value $10,000 starting value CREDIT BOND INDEX $24,150 ending value $28,536 ending value $10,000 starting value $19,633 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR 10 YEAR - -------------------------------------------------- Advisers IA 18.49% 1.35% 9.22% - -------------------------------------------------- Advisers IB(4) 18.20% 1.14% 8.97% - -------------------------------------------------- S&P 500 Index 28.67% -0.57% 11.06% - -------------------------------------------------- Lehman Government/ Credit Bond Index 4.66% 6.65% 6.98% - -------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGEMENT TEAM RAND L. ALEXANDER, CFA Senior Vice President, Partner PAUL D. KAPLAN Senior Vice President, Partner, Director of Fixed Income - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Advisers HLS Fund, Class IA returned 18.49% for the 12 months ended December 31, 2003. The Fund outperformed the Composite Index (S&P 500 Index 55%, Lehman Brothers Government/Credit Bond Index 35% and 90 day Treasury Bills 10%), which returned 17.12% over the same period. The Fund underperformed the Lipper Flexible Portfolio VA-UF Average, which returned 18.59% over the same period. WHY DID THE FUND PERFORM THIS WAY? After a three-year decline, the U.S. equity markets rallied during the period. This surge in the broad market began with the ending of the conflict in Iraq and has been fueled by increases in consumer confidence and manufacturing output, resilience in consumer spending and productivity gains, and support from low interest rates and reduced tax rates. Across both the equity and fixed income asset classes, there was an overall trend of lower quality securities providing superior returns than higher quality investments as the markets shifted from risk aversion to risk pursuit. Among bonds, emerging markets debt and high yield bonds outperformed U.S. Treasuries and other investment grade sectors. Within the equity markets, emerging markets outperformed developed markets, and small caps outperformed large caps. The Fund returns for the year were driven primarily by positive asset allocation decisions during the course of 2003. We entered the year optimistic that low interest rates, tax cuts, a stabilizing employment picture, and the weak dollar would boost the U.S. economy, and in turn, investor confidence. Our equity ratio increased from 62% to 70% of the Fund over the course of the year. This equity exposure matches our highest level ever and expresses our high confidence that equities will provide the most attractive returns over the coming year. With the out-performance of equities over bonds during the year, our positioning enhanced performance. In terms of the equity portion, the Fund generated strong returns through positive sector allocation decisions and solid performance from some individual holdings. We maintained overweight positions in information technology and materials, the two strongest areas of the market during 2003. We also remained underweight in telecommunication services, which was the poorest performing sector, as the industry continues to work through capacity issues. Strong contributors during the year included Citigroup, Inc. (banks) and Intel Corp. (electronics). Citigroup, Inc. has executed well, controlled costs, and is leveraged to an improvement in capital market activity. Intel Corp. benefited from a strong semiconductor cycle in 2003, as they continually beat earnings expectations. Relative equity results were hindered somewhat by our large cap, high quality bias, especially in the information technology sector. Detractors included Schering-Plough Corp. (drugs) and Safeway, Inc. (consumer non-durables); both stocks were eliminated from the Fund. Within the fixed income portion of the Fund, returns were in line with our benchmark. Our fundamental high quality bias generated lower returns than had we invested more aggressively in some of the lower quality segments of the market. Specifically, our low exposure to Ford Motor Co. (transportation) and General Motors Corp. (transportation) detracted from returns this year as bonds of these lower quality issuers outperformed most corporate bonds in 2003. We continue to believe this approach is the correct one as insurance for those unpredictable periods of stock market volatility. Our tactical duration management was a positive factor this year. We had a slightly short duration bias in anticipation of a stronger economy and higher interest rates. As only the first part of this outlook has developed, this bias detracted slightly from returns. 3 - -------------------------------------------------------------------------------- WHAT IS YOUR OUTLOOK AND STRATEGY? The economic and operating environment for businesses has rarely been more favorable for corporate earnings and profitability. Tax cuts, a weaker dollar, sustained productivity, and healthier balance sheets are all evidence of this. As the economy continues to grow, we will look for improved corporate spending and employment trends as key gauges to determine the sustainability of the domestic recovery. This encourages us to maintain our high equity exposure. Within our equity portion we maintain a cyclical bias, with overweight positions in information technology, industrials, and consumer discretionary sectors. On the fixed income side, the economy continues to show signs of a sustained recovery and the bond market struggles with stronger economic indicators. While we have outlined an environment that should be supportive of the business sector and corporate balance sheets in particular, we have begun to shift investments away from corporate bonds and back toward government securities as valuations in the corporate sector are now less than generous and as the Fund increases its exposure to the business sector via its equity holdings. An improving economic environment is also supportive of our slightly shorter duration posture, as interest rates should begin to move upward later this year. 4 Hartford Blue Chip Stock HLS Fund inception 5/1/1996 (subadvised by T. Rowe Price Associates, Inc.) PERFORMANCE OVERVIEW 5/1/96 - 12/31/03 Growth of a $10,000 investment(1) (LINE GRAPH) <Table> <Caption> BLUE CHIP STOCK IA S&P 500 INDEX ------------------ ------------- 5/1/96 10000.00 10000.00 10118.90 10000.00 10134.40 10038.00 9866.50 9594.32 10232.10 9796.76 10858.20 10347.30 11001.60 10632.90 11775.30 11435.70 12/96 11624.10 11209.30 12093.80 11908.70 12121.50 12002.80 11602.10 11510.70 12109.20 12196.70 12810.80 12938.30 13344.70 13517.90 14340.90 14592.60 13700.20 13775.40 14359.80 14528.90 14015.60 14043.70 14443.20 14693.90 12/97 14762.70 14946.60 14932.70 15111.10 16054.40 16200.60 16780.70 17030.00 16944.80 17202.00 16523.50 16906.20 17262.40 17592.50 17082.10 17405.70 14342.30 14889.00 15200.40 15843.40 16490.10 17130.90 17500.10 18168.80 12/98 18905.80 19215.80 19469.50 20019.30 18923.50 19397.20 19628.40 20173.00 20131.30 20954.20 19561.20 20460.10 20758.10 21595.60 20056.60 20921.30 19839.90 20817.10 19456.40 20246.40 20825.40 21527.10 21277.50 21964.70 12/99 22664.40 23258.40 21939.70 22090.00 22166.40 21672.30 24073.70 23791.10 23380.70 23075.30 22868.80 22601.90 24241.40 23159.20 23762.80 22797.40 25763.10 24212.60 24480.10 22934.60 23922.70 22837.40 21626.80 21038.20 12/00 22105.00 21141.40 22425.80 21891.00 20039.50 19896.20 18346.20 18636.50 20168.90 20082.60 20326.70 20217.20 19822.30 19725.90 19312.20 19531.60 17952.50 18310.20 16650.60 16832.20 17317.50 17153.70 18670.60 18469.40 12/01 18919.30 18631.90 18357.20 18360.20 17811.30 18006.00 18650.20 18683.30 17484.20 17551.00 17190.00 17422.20 15703.00 16181.70 14559.70 14921.20 14828.80 15018.20 13298.20 13387.20 14578.10 14563.90 15286.60 15420.30 12/02 14303.80 14515.10 14028.60 14136.30 13882.90 13924.20 14117.50 14059.00 15285.30 15216.10 16073.60 16017.00 16272.20 16221.60 16627.00 16507.80 16824.10 16829.10 16581.10 16650.90 17468.40 17591.70 17651.40 17746.30 12/03 18494.20 18676.30 </Table> <Table> --- BLUE CHIP STOCK IA --- S&P 500 INDEX $10,000 starting value $10,000 starting value $18,494 ending value $18,676 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> SINCE 1 YEAR 5 YEAR INCEPTION - ---------------------------------------------------- Blue Chip Stock IA 29.30% -0.44% 8.35% - ---------------------------------------------------- S&P 500 Index 28.67% -0.57% 8.48% - ---------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGEMENT TEAM LARRY J. PUGLIA, CFA, CFP Vice President and Portfolio Manager DONALD J. EASLEY, CFA Vice President HENRY M. ELLENBOGEN Vice President and Research Analyst ROBERT N. GENSLER Vice President and Portfolio Manager THOMAS J. HUBER, CFA Vice President KRIS H. JENNER, M.D., D. PHIL. Vice President and Portfolio Manager CHRISTOPHER R. LEONARD, CFA Vice President and Research Analyst TIMOTHY E. PARKER Research Analyst ROBERT W. SHARPS, CFA, CPA Vice President and Portfolio Manager ROBERT W. SMITH Vice President and Portfolio Manager - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Blue Chip Stock HLS Fund, Class IA returned 29.30% for the 12 months ended December 31, 2003. The Fund outperformed the Lipper Large Cap Growth VA-UF Average, which returned 28.37% and the S&P 500 Index, which returned 28.67% over the same period. WHY DID THE FUND PERFORM THIS WAY? For the 12 months ended December 31, 2003 the portfolio posted a strong gain that edged the S&P 500 Index. Superior stock selection within the telecom services sector produced the strongest contribution to the portfolio's relative results. Vodafone Group PLC, ADR (communications) and Nextel Communications, Inc., Class A (communications) rallied sharply and were top absolute and relative performance contributors for the year. We were significantly overweight in Nextel Communications, Inc., Class A (up over 140% for the period) versus the index. Vodafone Group PLC, ADR released positive earnings results and news that diminished the threat of competition from Hutchinson Whampoa. Boosted by strong stock selection, the health care sector contributed to relative results despite our overweight position, which limited gains. Strength came mostly from pharmaceuticals and biotechs during the period. Large-cap pharmaceuticals rallied sharply in the fourth quarter as investors sought their perceived safety near year end. Pfizer, Inc. (drugs) was a top absolute performance contributor, and eliminating Merck & Co., Inc. (drugs) and Schering-Plough Corp. (drugs) early in the year also aided relative performance. After posting strong gains for much of 2003, biotechnology holdings, Gilead Sciences, Inc. (drugs), Amgen, Inc. (drugs) and Genentech, Inc. (drugs) stumbled a bit in the fourth quarter, but posted solid 12-month contributions. The consumer discretionary sector was the largest drag on relative results due to stock selection in Kohl's Corp. (retail), Target Corp. (retail), Harley Davidson, Inc. (transportation), Viacom, Inc. (media & entertainment) and Clear Channel Communications, Inc. (media & entertainment). Although the information technology sector led the market higher, the IT services industry languished. Affiliated Computer Services, Inc. (software & services) was the portfolio's largest relative performance detractor. WHAT IS YOUR OUTLOOK AND STRATEGY? As economic growth continues to accelerate into 2004, we expect earnings at many U.S. companies to also show sharp improvement. Despite the strong gains this year, driven mostly by small- and mid-cap stocks, we are optimistic about the prospects for large-cap stocks as history indicates that this group is likely to outperform in the second year of an expansion. Additionally, we believe that many consistent growth companies with strong free cash flow and dividend growth potential appear to be undervalued, providing us with advantageous investing opportunities. 5 Hartford Bond HLS Fund inception 8/31/1977 (subadvised by Hartford Investment Management Company) PERFORMANCE OVERVIEW 12/31/93 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> LEHMAN BROTHERS U.S AGGREGATE BOND BOND IA INDEX ------- ---------------------------------- 12/31/93 10000.00 10000.00 10149.00 10135.00 9909.00 9959.00 9660.00 9713.00 9577.00 9635.00 9568.00 9634.00 9546.00 9613.00 9716.00 9804.00 9718.00 9816.00 9590.00 9672.00 9571.00 9663.00 9553.00 9642.00 12/94 9605.00 9708.00 9781.00 9900.00 9980.00 10136.00 10053.00 10198.00 10178.00 10341.00 10595.00 10741.00 10696.00 10819.00 10633.00 10795.00 10764.00 10926.00 10866.00 11032.00 11031.00 11175.00 11205.00 11343.00 12/95 11381.00 11502.00 11440.00 11578.00 11213.00 11376.00 11137.00 11297.00 11043.00 11233.00 11038.00 11211.00 11175.00 11361.00 11199.00 11392.00 11180.00 11372.00 11376.00 11570.00 11628.00 11827.00 11874.00 12029.00 12/96 11782.00 11918.00 11832.00 11955.00 11884.00 11984.00 11760.00 11851.00 11914.00 12029.00 12046.00 12143.00 12220.00 12288.00 12633.00 12620.00 12501.00 12512.00 12699.00 12698.00 12861.00 12882.00 12943.00 12941.00 12/97 13120.00 13072.00 13300.00 13239.00 13289.00 13228.00 13353.00 13273.00 13410.00 13342.00 13553.00 13469.00 13681.00 13584.00 13676.00 13612.00 13798.00 13834.00 14163.00 14158.00 14011.00 14083.00 14153.00 14163.00 12/98 14189.00 14206.00 14300.00 14306.00 13936.00 14056.00 14020.00 14133.00 14094.00 14179.00 13906.00 14054.00 13825.00 14009.00 13794.00 13950.00 13769.00 13943.00 13904.00 14105.00 13957.00 14157.00 13966.00 14156.00 12/99 13903.00 14088.00 13876.00 14041.00 14044.00 14211.00 14260.00 14399.00 14237.00 14357.00 14246.00 14350.00 14572.00 14648.00 14664.00 14781.00 14849.00 14996.00 14943.00 15090.00 14982.00 15190.00 15208.00 15439.00 12/00 15569.00 15726.00 15930.00 15982.00 16019.00 16121.00 16061.00 16202.00 16032.00 16134.00 16126.00 16231.00 16106.00 16292.00 16489.00 16657.00 16697.00 16849.00 16738.00 17044.00 17038.00 17401.00 16974.00 17161.00 12/01 16921.00 17051.00 16984.00 17189.00 17056.00 17356.00 16817.00 17067.00 17166.00 17398.00 17350.00 17546.00 17346.00 17697.00 17383.00 17911.00 17719.00 18214.00 17873.00 18509.00 17961.00 18424.00 18163.00 18418.00 12/02 18627.00 18800.00 18784.00 18817.00 19081.00 19076.00 19106.00 19062.00 19353.00 19219.00 19798.00 19577.00 19788.00 19538.00 19200.00 18881.00 19351.00 19006.00 19865.00 19510.00 19736.00 19328.00 19827.00 19374.00 12/03 20088.00 19572.00 </Table> <Table> --- BOND IA --- LEHMAN BROTHERS U.S. AGGREGATE BOND $10,000 starting value INDEX $20,088 ending value $10,000 starting value $19,572 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR 10 YEAR - ---------------------------------------------------- Bond IA 7.85% 7.20% 7.22% - ---------------------------------------------------- Bond IB(4) 7.58% 6.98% 6.99% - ---------------------------------------------------- Lehman Brothers U.S. Aggregate Bond Index 4.11% 6.62% 6.95% - ---------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER NASRI TOUTOUNGI Managing Director - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Bond HLS Fund, Class IA returned 7.85% for the 12 months ended December 31, 2003. The Fund outperformed both the Lehman Brothers U.S. Aggregate Bond Index, which returned 4.11%, and the Lipper Intermediate Investment Grade Debt VA-UF Average, which returned 5.14% over the same period. WHY DID THE FUND PERFORM THIS WAY? Judicious sector selection was the major contributor to performance in 2003. In particular, our allocations to high yield and non-dollar securities had a significant impact for the year. During the second half of this year, astute interest rate anticipation versus the index also contributed positively to fund performance. Since the Fund was somewhat short duration going into the rate increase in late July and also during the fourth quarter, performance benefited from the rise in rates. Security selection also added to performance across several sectors. The high yield sector was amongst the best performing sectors in the fixed income market. The Lehman High Yield Corporate Index returned 28.97% for the year ended December 31st. This was due to improved corporate fundamentals and very attractive valuations accompanied by very strong mutual fund demand. The dollar declined against major currencies. In particular, the dollar weakened versus the Euro, declining by 20% from 1.05 to 1.26 dollar per Euro. The twin budget and current account deficit concerns have taken their toll on the exchange rate, despite strong growth in the U.S. WHAT IS YOUR OUTLOOK AND STRATEGY? Improved corporate profitability and stronger balance sheets are facilitating pent-up demand for corporate spending. The Institute of Supply Management's early January report displayed surprising strength. The manufacturing new orders component of this report provided the strongest reading since 1950, while most other components indicated continued acceleration of business activity. While capacity utilization remains well below its long-term average, the sustained upward trend is a constructive sign of growth. Our overall duration position is essentially neutral to slightly defensive. We fully expect interest rates to rise for fundamental reasons once excess capacity in labor and manufacturing is filled, and inflation starts to rise. The yield curve is at near record steep levels, and is currently anchored by the Federal Reserve's resolve to maintain an easing bias to kick start the economy. We remain constructive on corporate bond spreads, but we are not nearly as sanguine as we were last year. While fundamentals for corporate securities continue to improve, bonds have done very well versus their treasury counterparts. We maintain a 6% weight to high yield securities, and while only 2% overweight on investment grade corporates, we continue to favor BBB securities. Approximately a third of the portfolio is in mortgage-backed securities. While these securities are good income generators, we are concerned about price depreciation in the event of a significant move in interest rates. We are also concerned that Agency debentures could experience further volatility, thus we will remain under invested in the sector. We have reentered a position in foreign bonds on an unhedged basis. The currency markets are once again focused on the very large U.S. trade deficit, and in a rising rate environment, European bonds should do well versus U.S. bonds. We hold a 3.5% in foreign government or quasi government bonds and will look to opportunistically increase exposure to international securities. Treasury Inflation Protected Securities should also offer good value long term. We will be watching for leading indicators of inflation before we invest in TIPS later in 2004. 6 Hartford Capital Appreciation HLS Fund inception 4/2/1984 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 12/31/93 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> CAPITAL APPRECIATION IA S&P 500 INDEX ----------------------- ------------- 12/31/93 10000.00 10000.00 10454.00 10340.00 10399.00 10059.00 9841.00 9621.00 9787.00 9745.00 9688.00 9904.00 9403.00 9662.00 9710.00 9979.00 10460.00 10387.00 10436.00 10133.00 10553.00 10361.00 10081.00 9984.00 12/94 10250.00 10131.00 10256.00 10394.00 10618.00 10799.00 10986.00 11117.00 11299.00 11444.00 11593.00 11901.00 12163.00 12177.00 12907.00 12580.00 13098.00 12610.00 13388.00 13142.00 12753.00 13094.00 13319.00 13670.00 12/95 13351.00 13933.00 13554.00 14407.00 13911.00 14541.00 14120.00 14681.00 14797.00 14897.00 15248.00 15279.00 14863.00 15337.00 13801.00 14660.00 14527.00 14969.00 15382.00 15810.00 15366.00 16246.00 16190.00 17473.00 12/96 16115.00 17127.00 16734.00 18196.00 16413.00 18340.00 15489.00 17588.00 15884.00 18636.00 17695.00 19769.00 18462.00 20655.00 19989.00 22297.00 19752.00 21048.00 21065.00 22199.00 19803.00 21458.00 19647.00 22451.00 12/97 19715.00 22838.00 19537.00 23089.00 21385.00 24753.00 22230.00 26021.00 22623.00 26284.00 21628.00 25832.00 22046.00 26880.00 21494.00 26595.00 17216.00 22749.00 18231.00 24208.00 20012.00 26175.00 21260.00 27761.00 12/98 22767.00 29361.00 23756.00 30588.00 22707.00 29638.00 24464.00 30823.00 25618.00 32017.00 25255.00 31262.00 26659.00 32997.00 26374.00 31966.00 26054.00 31807.00 25171.00 30935.00 26865.00 32892.00 28307.00 33561.00 12/99 31295.00 35538.00 30661.00 33752.00 35392.00 33114.00 36252.00 36351.00 34348.00 35258.00 33210.00 34534.00 35280.00 35386.00 35335.00 34833.00 38907.00 36995.00 37495.00 35043.00 36423.00 34894.00 33403.00 32145.00 12/00 35433.00 32303.00 37549.00 33448.00 35860.00 30400.00 33915.00 28475.00 36543.00 30685.00 37043.00 30891.00 35959.00 30140.00 34633.00 29843.00 32901.00 27977.00 29113.00 25719.00 29958.00 26210.00 32119.00 28220.00 12/01 32975.00 28468.00 32093.00 28053.00 31413.00 27512.00 32618.00 28547.00 30861.00 26817.00 30747.00 26620.00 28022.00 24725.00 25766.00 22799.00 26369.00 22947.00 24379.00 20455.00 26193.00 22253.00 28217.00 23561.00 12/02 26479.00 22178.00 25942.00 21599.00 25657.00 21275.00 25362.00 21482.00 27266.00 23250.00 29429.00 24474.00 30205.00 24787.00 30756.00 25224.00 31912.00 25715.00 31790.00 25443.00 34284.00 26880.00 35144.00 27116.00 12/03 37700.00 28538.00 </Table> <Table> --- CAPITAL APPRECIATION IA --- S&P 500 INDEX $10,000 starting value $10,000 starting value $37,700 ending value $28,538 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR 10 YEAR - -------------------------------------------------------- Capital Appreciation IA 42.38% 10.61% 14.19% - -------------------------------------------------------- Capital Appreciation IB(4) 42.02% 10.39% 13.94% - -------------------------------------------------------- S&P 500 Index 28.67% -0.57% 11.06% - -------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER SAUL J. PANNELL, CFA Senior Vice President, Partner - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Capital Appreciation HLS Fund, Class IA returned 42.38% for the 12 months ended December 31, 2003. The Fund outperformed both the Lipper Multi Cap Core VA-UF Average, which returned 31.49% and the Composite Index (Russell 2500 Index 60% and S&P 500 Index 40%), which returned 38.62% over the same period. WHY DID THE FUND PERFORM THIS WAY? Equity markets continued to rise during the period; over the past twelve months the S&P 500 has now gained over 28%. Optimism regarding the economy that fueled the second quarter's sharp rally essentially became the consensus view. All market cap styles benefited, with the performance of small- and mid-cap stocks exceeding that of large-cap equities. All ten benchmark sectors registered positive returns during the period with the strongest results in materials (34%), information technology (62%), and consumer discretionary (43%). The Fund is focused on providing shareholders with maximum total returns. In seeking this level of high total return, our investment approach seeks capital appreciation from all companies regardless of market capitalization size, sector, or country. Our investment decisions, while based primarily on company-by-company fundamental analysis, may also be shaped by secular themes. We try to emphasize differences between our outlook and Wall Street consensus and utilize a broad array of other investment techniques. During the period, the Fund benefited the most from strong stock selection in telecommunication services, energy, and materials. The three largest contributors to absolute returns were Nextel Communications, Inc., Class A (communications), which benefited from continued strength in its push-to-talk phone; Nortel Networks Corp. (communications), which rose on new contract awards and a debt outlook upgrade from a credit agency; and Citigroup, Inc. (banks). Our gains were modestly offset by relatively poor stock selection in information technology and, to a lesser extent, health care. Within technology, IT service companies Concord Communications, Inc. (software & services) and CheckFree Corp. (financial services) underperformed. The three biggest detractors from absolute returns were Northrop Grumman Corp. (aerospace & defense), Schering-Plough Corp. (drugs) and Gold Fields Ltd. (metals, minerals & mining). The Fund has eliminated its positions in these poor performers. It is important to note that as the Fund has gotten larger, the portion of the Fund represented by small-caps has gotten smaller. This underweight relative to the benchmark was slightly detrimental to the overall performance of the Fund as small-caps were the strongest performing market cap category over this period. WHAT IS YOUR OUTLOOK AND STRATEGY? As we enter the new year, corporate profits are surging, borrowing costs remain attractive, and consumer confidence has stabilized. The building blocks for reinvigorated corporate spending, rising employment, and an expanding economy appear to be in place. However, on the heels of robust appreciation in 2003, equity markets generally seem to have already priced-in a healthy cyclical rebound. Over the past year it has paid to invest in companies with high financial and operating leverage. Going forward it will likely be more important to identify companies that can gain market share, grow the top-line, and drive the economic expansion. Toward the end of the 12-month period we initiated or added to positions in the industrials sector including defense-related and education stocks. To fund these positions we eliminated or reduced our holdings in health care services companies on the view that most of these companies, whether they are drug distributors, health insurers, or hospitals, will face increased pricing pressures over the intermediate term. 7 Hartford Capital Opportunities HLS Fund inception 5/1/2000 (subadvised by Massachusetts Financial Services Company) PERFORMANCE OVERVIEW 5/1/00 - 12/31/03 Growth of a $10,000 investment(1) (LINE GRAPH) <Table> <Caption> CAPITAL OPPORTUNITIES IA S&P 500 INDEX ------------------------ ------------- 5/1/00 10000.00 10000.00 9477.37 10000.00 9895.15 10246.60 9718.55 10086.50 10559.50 10712.70 10074.50 10147.20 9802.09 10104.20 8314.71 9308.16 12/00 8832.35 9353.82 9558.26 9685.48 8348.18 8802.90 7504.50 8245.53 8244.84 8885.39 8164.61 8944.92 7797.36 8727.56 7456.89 8641.60 6713.62 8101.18 5741.43 7447.25 6065.11 7589.49 6589.45 8171.61 12/01 6745.68 8243.52 6398.89 8123.29 6286.41 7966.60 6627.63 8266.25 6200.51 7765.30 6013.35 7708.30 5396.52 7159.46 4863.14 6601.74 4910.66 6644.65 4393.88 5923.04 4748.02 6443.68 5162.98 6822.57 12/02 4799.59 6422.08 4690.69 6254.47 4582.54 6160.65 4619.96 6220.30 5049.33 6732.23 5356.43 7086.59 5455.92 7177.12 5529.37 7303.72 5685.24 7445.88 5547.31 7367.04 5795.36 7783.28 5838.96 7851.68 12/03 6113.85 8263.17 </Table> <Table> --- CAPITAL OPPORTUNITIES IA --- S&P 500 INDEX $10,000 starting value $10,000 starting value $6,114 ending value $8,263 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> SINCE 1 YEAR INCEPTION - ------------------------------------------------- Capital Opportunities IA 27.38% -12.55% - ------------------------------------------------- S&P 500 Index 28.67% -5.07% - ------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGEMENT TEAM IRFAN ALI Senior Vice President Massachusetts Financial Services Company KENNETH ENRIGHT Senior Vice President Massachusetts Financial Services Company - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Capital Opportunities HLS Fund, Class IA returned 27.38% for the 12 months ended December 31, 2003. The Fund outperformed the S&P 500 Index, which returned 28.67% over the same period. The Fund underperformed the Lipper Multi Cap Core VA-UF Average, which returned 31.49% over the same period. MARKET OVERVIEW Markets around the world were buoyed over the period by clear signs of recovery, especially in the United States and, to a lesser extent, in Japan and Europe. Worldwide monetary policy was conducive to growth as central banks, including the U.S. Federal Reserve Bank, sought to stimulate economic expansion by keeping interest rates low. We started to see improvements in several key economic indicators, including corporate earnings, capital and consumer spending, and business and consumer confidence. Overall improvement in the global economy helped to drive market rallies that began in mid-March and lasted, with only a few pauses, through the end of 2003. Largely left behind were concerns about an uncertain global political climate and sluggish economic conditions. In our view, investors, like consumers, became more optimistic about the future and aggressively moved into higher-risk, more economically sensitive securities and out of more conservative holdings. DETRACTORS FROM PERFORMANCE The series' holdings in the technology and leisure sectors were main contributors to underperformance relative to the benchmark. In the technology sector, the series' underweighted position in Intel Corp. (software & services) was the leading contributor to underperformance. Investor concerns over Intel Corp.'s weak corporate technology spending abated during the period, while the stock improved on the news that certain product lines, such as laptop PCs, had showed surprising strength. Among other technology sector companies, holdings in Network Associates, Inc. (software & services) and PeopleSoft, Inc. (software & services) also detracted from performance. Network Associates, Inc. stock fell after missing analysts' earnings projections due to reporting a sizable drop in customer spending on its web security and anti-virus software products. The company blamed the shortfall on continued weakness in business technology spending. Despite a continued strong competitive position, a healthy balance sheet, and a boost from Oracle Corp. (software & services) to acquire the company at a premium, PeopleSoft, Inc.'s stock price failed to appreciate as much as the technology sector overall. In basic materials, the stock of Owens Illinois, Inc. (consumer durables), a company that manufactures glass and plastic packaging, was also a source of negative performance. The company coped with pressure from rising prices for the oil used to make its plastic bottles and for the natural gas used to power several of its factories. Investors were also concerned by the company's highly leveraged balance sheet; potential liabilities associated with asbestos in its plants; and disruptions at the company's Venezuela facility. 8 - -------------------------------------------------------------------------------- The Fund's cash position, although it averaged less than 4% of assets over the period, was the biggest detractor from relative performance. In a period when global markets continued to rise, any cash position hurt performance relative to S&P 500 which, like most market indices, has no cash position. CONTRIBUTORS TO PERFORMANCE The Fund generated its best performance relative to the benchmark from its positions in the retail, consumer durables, and health care sectors. Sears, Roebuck & Co. (retail) was the biggest contributor to positive performance in the retail sector. The stock had been selling at low valuations early in the period because of concerns about the performance of Sears, Roebuck & Co.'s credit card division. The company then sold the credit card division at a very attractive price and used the proceeds to buy back some of its own stock. The company's ability to shed an underperforming division and focus on its retail business, coupled with the fact that its stock had been selling at a very cheap multiple, had a very positive effect on its value to investors. Home Depot, Inc. (retail) was another strong retail stock. It began the year selling at a very attractive valuation and then benefited from a series of strong sales figures, an exclusive arrangement with John Deere & Co.(machinery), the remodeling of many of its stores, and from a newly expanded appliance business. In the health care sector, Genentech, Inc. (health services) stock benefited from a string of good news that boosted the company's long-term prospects. New data about its colorectal drug Avastin came in better than expected while the company released promising clinical reports about psoriasis drug Raptiva and arthritis drug Rituxan. The Fund also benefited from an underweight position in health care company Johnson & Johnson (medical instruments & supplies), which underperformed the market during the period. The company had introduced a new drug-coated stent that was highly anticipated by the market. However, the company had constraints on its capacity that mitigated the long-term growth potential offered by the new product, and that contributed to the stock's underperformance. Data about a competing product from Boston Scientific Corp. meanwhile, came in much better than anticipated, further detracting from Johnson & Johnson's growth potential. 9 Hartford Disciplined Equity HLS Fund inception 5/29/1998 (formerly Hartford Growth and Income HLS Fund) (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 5/29/98 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> DISCIPLINED EQUITY IA S&P 500 INDEX --------------------- ------------- 5/29/98 10000.00 10000.00 10406.00 10406.00 10407.00 10295.00 9003.00 8807.00 9619.00 9371.00 10516.00 10133.00 11109.00 10747.00 12/98 11905.00 11366.00 12305.00 11841.00 11852.00 11473.00 12415.00 11932.00 12802.00 12394.00 12558.00 12102.00 13373.00 12774.00 13112.00 12375.00 12929.00 12313.00 12540.00 11976.00 13100.00 12733.00 13461.00 12992.00 12/99 14503.00 13757.00 13701.00 13066.00 13672.00 12819.00 15171.00 14072.00 14555.00 13649.00 14203.00 13369.00 14747.00 13699.00 14646.00 13485.00 15646.00 14322.00 14717.00 13566.00 14645.00 13508.00 13472.00 12444.00 12/00 13684.00 12505.00 14370.00 12949.00 13209.00 11769.00 12481.00 11023.00 13512.00 11879.00 13631.00 11958.00 13352.00 11668.00 13066.00 11553.00 12303.00 10830.00 11282.00 9956.00 11641.00 10146.00 12478.00 10925.00 12/01 12587.00 11021.00 12301.00 10860.00 11946.00 10651.00 12391.00 11051.00 11543.00 10381.00 11432.00 10305.00 10482.00 9572.00 9752.00 8826.00 9821.00 8883.00 8754.00 7919.00 9545.00 8615.00 10049.00 9121.00 12/02 9484.00 8586.00 9178.00 8362.00 9043.00 8236.00 9091.00 8316.00 9803.00 9000.00 10333.00 9474.00 10431.00 9595.00 10581.00 9764.00 10813.00 9954.00 10815.00 9849.00 11447.00 10405.00 11619.00 10497.00 12/03 12217.00 11047.00 </Table> <Table> --- DISCIPLINED EQUITY IA --- S&P 500 INDEX $10,000 starting value $10,000 starting value $12,217 ending value $11,047 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> SINCE 1 YEAR 5 YEAR INCEPTION - ------------------------------------------------------- Disciplined Equity IA 28.82% 0.52% 3.64% - ------------------------------------------------------- Disciplined Equity IB 28.50% 0.31% 3.42% - ------------------------------------------------------- S&P 500 Index 28.67% -0.57% 1.80% - ------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER JAMES A. RULLO, CFA Senior Vice President, Partner - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Disciplined Equity HLS Fund, Class IA returned 28.82% for the 12 months ended December 31, 2003. The Fund outperformed both the Lipper Large Cap Core VA-UF Average, which returned 26.43% and the S&P 500 Index, which returned 28.67% over the same period. WHY DID THE FUND PERFORM THIS WAY? U.S. equity markets rebounded in 2003 as low interest rates, tax cuts, a stabilizing employment picture and the weak dollar provided a boost to the U.S. economy, and in turn, investor confidence. Risk was rewarded in 2003, as more speculative stocks gained favor over companies with strong balance sheets and dependable earnings. News of corporate impropriety, as well as lingering effects from the war in Iraq, failed to dampen investors' enthusiasm. Investors focused on a strengthening economy, better market prospects, and a Federal Reserve committed to keeping interest rates low. The Fund's performance during the period was driven by strong stock selection, particularly in financials, consumer staples, and health care. On an absolute basis, top performers were Cisco Systems, Inc. (computers & office equipment), Citigroup, Inc. (banks), and Intel Corp. (electronics). Cisco Systems, Inc. rose sharply driven by a rebound in technology spending. Citigroup, Inc. has executed well, controlled expenses, and is leveraged to an improvement in capital market activity. Intel Corp. benefited from the strong semiconductor cycle in 2003, as they continually beat earnings expectations. Our relative returns were held back due to our bias toward large cap, high quality names in the information technology sector. The Fund's stocks provided solid absolute returns, but the Fund did not own many of the more speculative, smaller market capitalization names that were the top performers in the technology sector. In addition, some poor performing individual holdings detracted from performance for the year. Schering-Plough Corp. (drugs), Qwest Communications International, Inc. (communications), and Pepsi Bottling Group, Inc. (food, beverages & tobacco) detracted the most from Fund performance, on an absolute basis, during the year. Schering-Plough Corp. (drugs) has been undergoing competitive pressures across several key drug franchises. Qwest Communications International, Inc. (communications) was held back due to delayed audited financials and disappointing earnings results. Pepsi Bottling Group, Inc. underperformed due to severe weather in the first quarter across half of their U.S. territories. Both Qwest Communications International, Inc. and Pepsi Bottling Group, Inc. had been eliminated from the Fund prior to year-end. Schering-Plough Corp. remains a modest holding. WHAT IS YOUR OUTLOOK AND STRATEGY? The economic recovery is now visible on a global scale, with U.S. growth and corporate profits powering ahead. We expect continued, sustainable growth in 2004. A rise in consumer disposable income from tax cuts implemented last summer has kept consumption on an accelerating trend. As the benefit from the tax cut fades, job and salary growth will need to shoulder the consumption burden and signs in the labor market have been generally positive. It is fair to say, however, that with the strong market returns in 2003, we remain cautious looking ahead. We remain cognizant of issues threatening the U.S. equity market, including declining liquidity, looming structural concerns, and relatively high equity valuations. We do not anticipate that the Fed will seriously consider raising rates until the back half of 2004 and expect a decelerating trend in inflation over the coming months. 10 Hartford Global Leaders HLS Fund inception 9/30/1998 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 9/30/98 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> GLOBAL LEADERS IA MSCI WORLD INDEX ----------------- ---------------- 9/30/98 10000.00 10000.00 11346.00 10906.00 12212.00 11556.00 12/98 13188.00 12122.00 13799.00 12389.00 13410.00 12062.00 14140.00 12566.00 14488.00 13063.00 13962.00 12587.00 14974.00 13176.00 15199.00 13138.00 15118.00 13117.00 14930.00 12991.00 15905.00 13668.00 17087.00 14055.00 12/99 19830.00 15194.00 19086.00 14326.00 21213.00 14366.00 21161.00 15361.00 20137.00 14713.00 19563.00 14342.00 20430.00 14827.00 19746.00 14412.00 20868.00 14882.00 19982.00 14093.00 18833.00 13858.00 17723.00 13019.00 12/00 18429.00 13231.00 18436.00 13488.00 16744.00 12350.00 15624.00 11541.00 16849.00 12397.00 16516.00 12243.00 16215.00 11861.00 15819.00 11705.00 14951.00 11145.00 13654.00 10165.00 14039.00 10361.00 15284.00 10975.00 12/01 15373.00 11046.00 14870.00 10712.00 14782.00 10621.00 15250.00 11114.00 14742.00 10720.00 15056.00 10745.00 14111.00 10095.00 12961.00 9245.00 12831.00 9264.00 11285.00 8247.00 12455.00 8857.00 13558.00 9337.00 12/02 12375.00 8886.00 12089.00 8617.00 11818.00 8470.00 11656.00 8447.00 12962.00 9201.00 13754.00 9731.00 14076.00 9904.00 14418.00 10106.00 14833.00 10327.00 14454.00 10392.00 15595.00 11011.00 15972.00 11181.00 12/03 16777.00 11885.00 </Table> <Table> --- GLOBAL LEADERS IA --- MSCI WORLD INDEX $10,000 starting value $10,000 starting value $16,777 ending value $11,885 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> SINCE 1 YEAR 5 YEAR INCEPTION - ------------------------------------------------------ Global Leaders IA 35.57% 4.93% 10.35% - ------------------------------------------------------ Global Leaders IB 35.24% 4.72% 10.13% - ------------------------------------------------------ MSCI World Index 33.76% -0.39% 3.34% - ------------------------------------------------------ </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER ANDREW S. OFFIT Senior Vice President, Partner - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Global Leaders HLS Fund, Class IA returned 35.57% for the 12 months ended December 31, 2003. The Fund outperformed both the Lipper Global Funds VA-UF Average, which returned 33.65% and the Morgan Stanley Capital International (MSCI) World Index, which returned 33.76% over the same period. WHY DID THE FUND PERFORM THIS WAY? The rebound in the global equity markets was broad based, with all developed markets participating in the advance and the majority of the ten broad market sectors of the MSCI World Index registering double-digit returns. The rally was propelled by continued signs of improvement in the global economy and reduced uncertainty in the geopolitical arena. At the regional level, performance was strongest within Emerging Markets and Asia excluding Japan. Performance within the United States and the United Kingdom was less robust during the period, though positive nonetheless. Our outperformance versus the benchmark was primarily driven by strong stock selection and an overweight to technology. The three largest contributors to the Fund's absolute returns were all from this sector: French technology hardware company Alcatel S.A. (communications), the Canadian technology hardware company Nortel Networks Corp. (communications), and the Japanese software services company Yahoo Japan, Inc. (software & services). In addition, the Fund's overweight in consumer discretionary stocks and good stock selection in health care, financials, and telecommunications added to relative performance at the margin. These returns were offset somewhat by the Fund's overweight and poor stock selection in materials. Three of the largest detractors from absolute returns were Lukoil Holdings ADR (energy & services), the Russian oil and gas company, Fast Retailing, Inc. (retail), the Japanese retailer, and Schering-Plough Corp. (drugs), the U.S. pharmaceuticals company. Of these three companies, only Fast Retailing, Inc. is still held. While we do not manage the Fund according to country weights, but instead, focus mainly on sector and stock weights, countries and regions played a part in our outperformance for the period. The Fund was helped by being overweight in Europe, largely due to the depreciation of the U.S. dollar. In addition, the Fund's positions in emerging market securities, though small, contributed to positive relative returns. WHAT IS YOUR OUTLOOK AND STRATEGY? Our outlook remains positive. We are positioned for economic growth and are beginning to see many of the trends play out in stock price performance. We continue to believe that many growth sectors will have "time on their side". 11 Hartford Growth Opportunities HLS Fund inception 3/24/1987 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 12/31/93 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> GROWTH OPPORTUNITIES IA RUSSELL 3000 GROWTH INDEX ----------------------- ------------------------- 12/31/93 10000.00 10000.00 10289.00 10234.00 10336.00 10060.00 9720.00 9562.00 9554.00 9605.00 9378.00 9718.00 8907.00 9420.00 9054.00 9723.00 9696.00 10282.00 9752.00 10159.00 9820.00 10386.00 9529.00 10045.00 12/94 9718.00 10456.00 9621.00 10396.00 9890.00 10836.00 10153.00 11153.00 10137.00 11389.00 10630.00 11762.00 11566.00 12250.00 12290.00 12805.00 12436.00 12834.00 12804.00 13391.00 12427.00 13331.00 12700.00 13856.00 12/95 12407.00 13958.00 12592.00 14366.00 13093.00 14667.00 13080.00 14712.00 13680.00 15175.00 14005.00 15731.00 13798.00 15640.00 12675.00 14621.00 13120.00 15067.00 14262.00 16131.00 14345.00 16149.00 15022.00 17287.00 12/96 14443.00 17012.00 15071.00 18131.00 14240.00 17917.00 13320.00 16921.00 13488.00 17929.00 14870.00 19337.00 15463.00 20100.00 16938.00 21807.00 16397.00 20710.00 17223.00 21794.00 16494.00 20935.00 16345.00 21681.00 12/97 16238.00 21901.00 16023.00 22465.00 17358.00 24182.00 18210.00 25150.00 18302.00 25480.00 17868.00 24652.00 18806.00 26049.00 17891.00 25699.00 14640.00 21672.00 15790.00 23377.00 16548.00 25204.00 17170.00 27124.00 12/98 19325.00 29570.00 19926.00 31277.00 18395.00 29743.00 19401.00 31273.00 19425.00 31501.00 18894.00 30608.00 20332.00 32712.00 20302.00 31674.00 20690.00 32068.00 20782.00 31481.00 22316.00 33749.00 24955.00 35686.00 12/99 29987.00 39573.00 29594.00 37824.00 38282.00 40187.00 34741.00 42460.00 31796.00 40276.00 29867.00 38145.00 34422.00 41171.00 33356.00 39329.00 37905.00 42927.00 37952.00 38996.00 34673.00 37058.00 28093.00 31511.00 12/00 31182.00 30702.00 30665.00 32848.00 26793.00 27348.00 23900.00 24407.00 26292.00 27487.00 26070.00 27159.00 26020.00 26636.00 25428.00 25858.00 23728.00 23776.00 20084.00 21304.00 21115.00 22480.00 23232.00 24621.00 12/01 24055.00 24677.00 23826.00 24210.00 22418.00 23168.00 23598.00 24049.00 22464.00 22186.00 22183.00 21593.00 19725.00 19607.00 17804.00 18395.00 17392.00 18446.00 16017.00 16568.00 17158.00 18045.00 18725.00 19075.00 12/02 17404.00 17757.00 17191.00 17322.00 16967.00 17218.00 17449.00 17535.00 19022.00 18854.00 20474.00 19871.00 21085.00 20151.00 21295.00 20724.00 22242.00 21282.00 21970.00 21031.00 23891.00 22259.00 24673.00 22529.00 12/03 25025.00 23256.00 </Table> <Table> --- GROWTH OPPORTUNITIES IA --- RUSSELL 3000 GROWTH INDEX $10,000 starting value $10,000 starting value $25,025 ending value $23,256 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR 10 YEAR - --------------------------------------------------------- Growth Opportunities IA 43.79% 5.31% 9.61% - --------------------------------------------------------- Growth Opportunities IB(3) 43.43% 5.04% 9.33% - --------------------------------------------------------- Russell 3000 Growth Index 30.97% -4.69% 8.81% - --------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional in formation including inception dates and expenses. PORTFOLIO MANAGER MICHAEL T. CARMEN, CFA Senior Vice President, Partner - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Growth Opportunities HLS Fund, Class IA returned 43.79% for the 12 months ended December 31, 2003. The Fund outperformed both the Lipper Multi Cap Growth VA-UF Average, which returned 35.24% and the Russell 3000 Growth Index, which returned 30.97% over the same period. WHY DID THE FUND PERFORM THIS WAY? Small and mid capitalization stocks were "the place to be" in the U.S. equity markets, as these stocks handily outperformed larger cap stocks and posted strong absolute returns. Boosted by improving news on the economic front and earnings comparisons that were beginning to look more compelling, investors continued to bid up U.S. equities through the end of December, especially small and mid cap stocks. The stagnant labor markets continued to be a source of concern, but investors weren't "losing any sleep" over the issue. Much debate was centered on whether the snapback from the March lows was "too far, too fast" for many stocks, especially information technology names, but the bears lost to the bulls in this debate, at least for now. The two areas that appeared to be showing the most robust recovery, PCs and wireless, ignited the spark of investor sentiment elsewhere in the sector. Since the second quarter of 2003, lower quality and/or high beta names have attracted the most investor interest. The Fund was well-served by our above-index exposure to both small and mid cap companies. In addition, our outperformance can be attributed to strong relative stock selection across a number of sectors. Health care, consumer discretionary, and industrials were the areas in which our investments excelled the most versus the index. Only within information technology were we disappointed with our stock selection and low relative exposure to this outperforming sector. However, we can live with the result, as it was a reflection of our aversion to holding some of the more speculative, high beta names in the universe, which tended to do well during the period. For the twelve-month period, the greatest contributors to absolute Fund returns were Cendant Corp. (business services), American Tower Corp., Class A (communications), and Nextel Communications, Inc. (communications). The stock of global business provider Cendant Corp. gained on continued strength in real estate, improvement in travel services, and progress with its Avis/Budget integration. The largest detractors from absolute Fund returns were Schering-Plough Corp. (drugs), NDC Health Corp. (health services), and AT&T Corp. (communications), all of which were eliminated from the portfolio prior to period end. WHAT IS YOUR OUTLOOK AND STRATEGY? Investor optimism surrounding the economy and the equity markets has mostly taken uniform shape. Tax cuts, a weaker dollar, sustained productivity, and healthier balance sheets all bode well for corporate profits. As the growth trajectory continues, we will continue to look for improved corporate spending and employment trends. Entering 2004, the Fund's consumer discretionary position is significantly overweight relative to the benchmark; we continue to seek companies that we consider market share gainers. In other areas of the growth universe, the Fund's overweight to the telecommunications services sector is a partial offset to the underweight to the information technology sector, where we feel valuations continue to be stretched. 12 Hartford High Yield HLS Fund inception 9/30/1998 (subadvised by Hartford Investment Management Company) PERFORMANCE OVERVIEW 9/30/98 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> HIGH YIELD IA LEHMAN HIGH YIELD CORPORATE INDEX ------------- --------------------------------- 9/30/98 10000.00 10000.00 9992.00 9795.00 10340.00 10202.00 12/98 10368.00 10213.00 10528.00 10364.00 10531.00 10303.00 10695.00 10402.00 10898.00 10603.00 10693.00 10460.00 10703.00 10437.00 10696.00 10479.00 10620.00 10363.00 10599.00 10289.00 10660.00 10221.00 10797.00 10341.00 12/99 10856.00 10457.00 10758.00 10412.00 10730.00 10431.00 10637.00 10212.00 10674.00 10229.00 10576.00 10123.00 10840.00 10330.00 10960.00 10408.00 11113.00 10479.00 11067.00 10388.00 10867.00 10056.00 10596.00 9657.00 12/00 10968.00 9844.00 11691.00 10581.00 11742.00 10722.00 11489.00 10469.00 11337.00 10339.00 11419.00 10525.00 11018.00 10230.00 11198.00 10381.00 11300.00 10503.00 10592.00 9797.00 11030.00 10039.00 11378.00 10406.00 12/01 11263.00 10363.00 11156.00 10436.00 10818.00 10290.00 10905.00 10538.00 11061.00 10706.00 10993.00 10647.00 10409.00 9862.00 9928.00 9431.00 10053.00 9700.00 9791.00 9573.00 9822.00 9489.00 10385.00 10077.00 12/02 10487.00 10218.00 10764.00 10558.00 10952.00 10688.00 11148.00 10995.00 11687.00 11647.00 11860.00 11768.00 12077.00 12106.00 11790.00 11973.00 11936.00 12111.00 12267.00 12442.00 12474.00 12693.00 12632.00 12886.00 12/03 12919.00 13177.00 </Table> <Table> --- HIGH YIELD IA --- LEHMAN HIGH YIELD $10,000 starting value CORPORATE INDEX $12,919 ending value $10,000 starting value $13,177 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR SINCE INCEPTION - --------------------------------------------------------- High Yield IA 23.18% 4.50% 5.00% - --------------------------------------------------------- High Yield IB 22.88% 4.28% 4.78% - --------------------------------------------------------- Lehman High Yield Corporate Index 28.96% 5.23% 5.39% - --------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGEMENT TEAM DAVID HILLMEYER, CFA Vice President CHRISTINE MOZONSKI, CFA, CPA Vice President - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford High Yield HLS Fund, Class IA returned 23.18% for the 12 months ended December 31, 2003. The Fund underperformed both the Lipper High Current Yield VA-UF Average, which returned 23.87%, and the Lehman Brothers High Yield Corporate Index, which returned 28.96% over the same period. WHY DID THE FUND PERFORM THIS WAY? The Fund's performance has benefited throughout the last twelve months from an overweight to the wireline and technology sectors. Our wireline exposure continued to pay off for the Fund as Qwest Corp's (communications) successful tender offer and release of its 2002 financials, which was a catalyst to move this credit higher, contributed to this performance. Also, technology and telecommunications has continued to perform quite well. Nortel Networks Corp. (communications) has seen domestic as well as overseas orders increase, and Nextel Communications, Inc. (communications) outperformed the broader market on very solid subscriber and churn numbers throughout the year and a successful reduction in their overall cost structure. Our opportunistic outlook for technology can be observed in the portfolio's overweight versus the benchmark, but valuations have led us to realize some gains in the sector given the industry's strong performance during the year. Additional improvement in capital expenditures and further signs of a turnaround in manufacturing are also encouraging signs for the high yield market. Additional performance was derived from the portfolio's underweight to the gaming sector, which significantly lagged the broader market. Our more conservative and underweight position to the improving electric utilities sector has caused a drag to performance for most of the year; however, we have been increasing the portfolio's holdings to the sector during the latter half of the year since the companies within the industry seem to be migrating to a "back to basics" style of management. Also issue selection in the airline sector hurt performance. WHAT IS YOUR OUTLOOK AND STRATEGY? The impressive performance of the high yield market in 2003 was not only attributable to the improving fundamentals witnessed by balance sheet improvements but also a very strong technical environment, supported by record flows into retail mutual funds. The institutional investor also provided additional demand to help absorb a near record new issue calendar of approximately $130 billion. As compared to 2002's new issue calendar of $59 billion. Although 2004 won't post the exceptionally high return of the previous year, we believe the sector's return will most likely be commensurate to the coupons earned on the underlying bonds. Furthermore, a friendly macroeconomic environment, which includes an improving labor market and manufacturing sector, and stimulative fiscal and monetary policies all bode well for the sector. In addition, the technical backdrop remains favorable. We continue to favor an overweight to the high yield market. The fundamentals remain solid, and the technical picture continues to look optimistic. Our credit research team sees encouraging signs for the high yield market as enterprise values continue to move higher, volatility remains low, and companies are still mindful of bondholders' interests. We believe the first few months of the year will reap some of the best performance of 2004 as lower rated issues lead the way higher; however, credit selection and curve position become more critical. The fundamentals as well as the technicals are poised to support market prices. 13 Hartford Index HLS Fund inception 5/1/1987 (subadvised by Hartford Investment Management Company) PERFORMANCE OVERVIEW 12/31/93 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> INDEX IA S&P 500 INDEX -------- ------------- 12/31/93 10000.00 10000.00 10331.00 10340.00 10046.00 10059.00 9608.00 9621.00 9726.00 9745.00 9881.00 9904.00 9646.00 9662.00 9959.00 9979.00 10361.00 10387.00 10107.00 10133.00 10328.00 10361.00 9952.00 9984.00 12/94 10094.00 10131.00 10353.00 10394.00 10751.00 10799.00 11062.00 11117.00 11380.00 11444.00 11825.00 11901.00 12093.00 12177.00 12489.00 12580.00 12515.00 12610.00 13030.00 13142.00 12966.00 13094.00 13527.00 13670.00 12/95 13783.00 13933.00 14242.00 14407.00 14365.00 14541.00 14508.00 14681.00 14706.00 14897.00 15080.00 15279.00 15123.00 15337.00 14443.00 14660.00 14740.00 14969.00 15557.00 15810.00 15976.00 16246.00 17178.00 17473.00 12/96 16828.00 17127.00 17863.00 18196.00 17997.00 18340.00 17242.00 17588.00 18270.00 18636.00 19379.00 19769.00 20231.00 20655.00 21831.00 22297.00 20602.00 21048.00 21722.00 22199.00 20991.00 21458.00 21945.00 22451.00 12/97 22315.00 22838.00 22556.00 23089.00 24172.00 24753.00 25399.00 26021.00 25647.00 26284.00 25191.00 25832.00 26212.00 26880.00 25923.00 26595.00 22166.00 22749.00 23583.00 24208.00 25491.00 26175.00 27020.00 27761.00 12/98 28577.00 29361.00 29752.00 30588.00 28816.00 29638.00 29959.00 30823.00 31102.00 32017.00 30347.00 31262.00 32031.00 32997.00 31016.00 31966.00 30860.00 31807.00 30007.00 30935.00 31890.00 32892.00 32526.00 33561.00 12/99 34432.00 35538.00 32692.00 33752.00 32061.00 33114.00 35174.00 36351.00 34105.00 35258.00 33391.00 34534.00 34204.00 35386.00 33658.00 34833.00 35734.00 36995.00 33837.00 35043.00 33682.00 34894.00 31018.00 32145.00 12/00 31161.00 32303.00 32253.00 33448.00 29301.00 30400.00 27436.00 28475.00 29557.00 30685.00 29742.00 30891.00 29005.00 30140.00 28709.00 29843.00 26900.00 27977.00 24709.00 25719.00 25175.00 26210.00 27096.00 28220.00 12/01 27324.00 28468.00 26911.00 28053.00 26384.00 27512.00 27366.00 28547.00 25698.00 26817.00 25494.00 26620.00 23675.00 24725.00 21821.00 22799.00 21955.00 22947.00 19562.00 20455.00 21281.00 22253.00 22521.00 23561.00 12/02 21190.00 22178.00 20628.00 21599.00 20312.00 21275.00 20501.00 21481.00 22193.00 23249.00 23349.00 24473.00 23635.00 24786.00 24044.00 25223.00 24501.00 25714.00 24231.00 25442.00 25593.00 26879.00 25809.00 27115.00 12/03 27152.00 28536.00 </Table> <Table> --- INDEX IA --- S&P 500 INDEX $10,000 starting value $10,000 starting value $27,152 ending value $28,536 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR 10 YEAR - --------------------------------------------- Index IA 28.13% -1.02% 10.50% - --------------------------------------------- Index IB(5) 27.81% -1.23% 10.25% - --------------------------------------------- S&P 500 Index 28.67% -0.57% 11.06% - --------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER JULIET MURPHY, CFA, CPA Investment Officer - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Index HLS Fund, Class IA returned 28.13% for the 12 months ended December 31, 2003. The Fund outperformed the Lipper S&P 500 Index Objective VA-UF Average, which returned 28.01%, over the same period. The Fund underperformed the S&P 500 Index, which returned 28.67% over the same period. WHY DID THE FUND PERFORM THIS WAY? The Fund posted returns of 28.13% in 2003, its first positive return after three years of double-digit negative returns. The Fund led the benchmark by 2 basis points, the result of a cash receipt to settle a class action suit, which was not included in the benchmark. Only three months posted negative returns in 2003 -- January, February, and September. In the beginning of the year, the market reacted strongly to any news out of the Middle East. The threat of a war with Iraq was very real, and days of new releases regarding Iraq and weapons inspections were the days that suffered the greatest losses. We recovered a bit in March, with a slight positive return, and from there on, it was smooth sailing for the year. Volatility declined throughout the year, and market movements were mostly results of geopolitical and economic news, though the market was much less sensitive to such news than it had been during the first few months of the year. April and May were very strong, with positive news out of Iraq, which is to say that U.S. casualties were lower than expected and it seemed that we were making progress. The next three months were slower, as the number of casualties climbed, and we weren't seeing the progress we had seen during the first few months of the war. Add to this the plunging dollar and continued employment weakness, and it would make sense that the market would take a breather for a few months. The month of September was disappointing, with news of mutual fund scandals and poor economic numbers; we saw the negative returns for the first time in seven months. October was strong, though, with improvements in the employment situation and strong earnings. We finished the year on a high note, with the market closing at over 1100 on 12/29 -- the first time it closed over this level since May 2002. During 2002, dips in the market had been viewed as investors running for cover. In 2003, however, such dips were viewed more as opportunities to buy, and it seemed that even the bad news didn't keep investors disinterested for long. After the unprecedented bull market of the late 1990s, and the following three-year decline, it seemed that investors were ready to get involved again. Mutual fund inflows have increased over the last several months, but they are nowhere near the levels they were in the late 1990s. We believe they will continue to increase as the employment situation improves. WHAT IS YOUR OUTLOOK AND STRATEGY? Looking ahead, we have a tough act to follow, after the gains in the last year. Although the late 1990s posted back-to-back gains, we considered that period to be an aberration. The likelihood of another strong year in stocks is low, especially after reviewing the stock market over the past 100 years. As we know, historical data can't be used to predict the future, but it is food for thought. Another concern for 2004 is the possibility of downward earnings revisions by analysts. With the economy gaining strength, analysts have been raising estimates for several quarters, and they appear to be continuing with that trend. Recall the crucial role that earnings estimates and revisions played in 2001 and 2002, as the market was falling. Downward revisions sent the market into a tailspin during that period, and such revisions in 2004 could hit investor psyche especially hard. Another concern is interest rates. It seems likely that investors will start to worry about inflation in the near future, so it isn't unreasonable to assume that the 10-year treasury yields will migrate to the 5.00%-5.25% range. The declining U.S. dollar could prompt foreign investors to demand higher compensation (higher interest rates) to offset the currency risk, and these increases in yields could put pressure on equity valuations, causing the market to soften. In summary, we believe the first half of 2004 will show gains, but beyond that, there are some factors that could cause the market to pull back during the second half. 14 Hartford International Opportunities HLS Fund inception 7/2/1990 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 12/31/93 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> INTERNATIONAL OPPORTUNITIES IA MSCI AC WORLD FREE EX US INDEX ------------------------------ ------------------------------ 12/31/93 10000.00 10000.00 10395.00 10822.00 10033.00 10740.00 9576.00 10249.00 9795.00 10597.00 9837.00 10600.00 9772.00 10675.00 10016.00 10849.00 10394.00 11214.00 10040.00 10936.00 10314.00 11230.00 9850.00 10688.00 12/94 9806.00 10663.00 9426.00 10180.00 9376.00 10124.00 9776.00 10696.00 10040.00 11113.00 10175.00 11064.00 10170.00 10911.00 10725.00 11530.00 10501.00 11131.00 10602.00 11321.00 10585.00 11018.00 10822.00 11277.00 12/95 11172.00 11723.00 11457.00 11884.00 11552.00 11884.00 11721.00 12106.00 12158.00 12473.00 12056.00 12286.00 12049.00 12348.00 11626.00 11938.00 11707.00 12008.00 11894.00 12306.00 11884.00 12182.00 12484.00 12652.00 12/96 12617.00 12506.00 12490.00 12276.00 12543.00 12501.00 12555.00 12475.00 12477.00 12580.00 13295.00 13357.00 13913.00 14094.00 14324.00 14380.00 13271.00 13249.00 13994.00 13965.00 12935.00 12776.00 12731.00 12616.00 12/97 12660.00 12761.00 12807.00 13143.00 13673.00 14020.00 14324.00 14505.00 14654.00 14608.00 14753.00 14344.00 14778.00 14290.00 14934.00 14425.00 12757.00 12391.00 12268.00 12129.00 13167.00 13400.00 13932.00 14120.00 12/98 14326.00 14606.00 14739.00 14591.00 14385.00 14264.00 15205.00 14953.00 15786.00 15701.00 15132.00 14963.00 15873.00 15651.00 16280.00 16018.00 16304.00 16073.00 16401.00 16182.00 16950.00 16785.00 17921.00 17456.00 12/99 20035.00 19121.00 18910.00 18083.00 20283.00 18572.00 20098.00 19270.00 18990.00 18195.00 18193.00 17729.00 18902.00 18484.00 18319.00 17755.00 18568.00 17974.00 17606.00 16977.00 16762.00 16438.00 16005.00 15700.00 12/00 16609.00 16236.00 16708.00 16480.00 15369.00 15175.00 14278.00 14102.00 15346.00 15062.00 14751.00 14646.00 14282.00 14084.00 13969.00 13771.00 13581.00 13429.00 12149.00 12004.00 12472.00 12340.00 13214.00 12905.00 12/01 13498.00 13071.00 12893.00 12511.00 12932.00 12601.00 13652.00 13338.00 13590.00 13372.00 13755.00 13518.00 13152.00 12934.00 11815.00 11673.00 11679.00 11674.00 10297.00 10436.00 11061.00 10996.00 11580.00 11525.00 12/02 11077.00 11153.00 10591.00 10761.00 10285.00 10543.00 10075.00 10338.00 11001.00 11335.00 11634.00 12057.00 11823.00 12390.00 12167.00 12720.00 12615.00 13099.00 12721.00 13466.00 13482.00 14339.00 13760.00 14651.00 12/03 14744.00 15770.00 </Table> <Table> --- INTERNATIONAL OPPORTUNITIES IA --- MSCI AC WORLD FREE EX US INDEX $10,000 starting value $10,000 starting value $14,744 ending value $15,770 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR 10 YEAR - -------------------------------------------------------------- International Opportunities IA 33.10% 0.58% 3.96% - -------------------------------------------------------------- International Opportunities IB(4) 32.76% 0.37% 3.73% - -------------------------------------------------------------- MSCI AC World Free ex US Index 41.40% 1.54% 4.66% - -------------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER TROND SKRAMSTAD Senior Vice President, Partner, Director of International Equities - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford International Opportunities HLS Fund, Class IA returned 33.10% for the 12 months ended December 31, 2003. The Fund underperformed both the Lipper International VA-UF Average, which returned 35.41% and the Morgan Stanley Capital International (MSCI) All-Country World Free ex US Index, which returned 41.40% over the same period. WHY DID THE FUND PERFORM THIS WAY? The global recovery is here. International equity markets climbed strongly over the past twelve months. As measured by the MSCI regional indices, Japan outperformed Pac Basin ex-Japan and Europe in local currency terms during the year. However, in USD terms, MSCI Pac Basin ex-Japan strongly outperformed both Europe and Japan, helped by the appreciation of the Australian currency versus the dollar. The Fund's underperformance versus the Index can be linked to three main drivers. First, our holdings within the consumer discretionary and telecommunications services sectors, while recording strong double-digit returns for the year, lagged the returns of those sectors in the Index. Second, our overweight allocation to the defensive health care sector detracted from relative returns, as the market reflected a more risk-seeking environment benefiting more economically or financially levered cyclicals. The third factor was that the average cap size of our holdings was higher than that of the index, which hurt our relative performance as small and mid cap securities dramatically outpaced larger caps. During the year, the Fund recorded strong absolute returns. Financials sector holdings were a primary driver of Fund returns, led by significant contributor National Bank of Canada (banks). Information technology sector holdings also contributed strongly to Fund returns. After a prolonged slump, global semiconductor sales have improved markedly thanks to higher average selling prices and increased demand from wireless handsets. Consequently, top contributing stocks within the sector included ASML Holding N.V. (machinery) and Nokia Corp. (communications). The top contributor to Fund returns overall was Vodafone Group PLC (communications). WHAT IS YOUR OUTLOOK AND STRATEGY? While equity markets have priced in significant economic growth already, we believe that conditions are ripe for expansion to continue into the first half of 2004, with the growth picture continuing to be bolstered by the massive fiscal and monetary stimulus enacted by governments and central banks around the globe over the last several years. China has positively impacted the world's economic growth this year, helping drive global demand for both raw materials and capital goods. The rest of Asia ex-Japan finds itself at the end of a multi-year adjustment process and is poised to move ahead once again, as the region no longer relies upon the U.S. as its main growth driver. Instead, the Asian consumer is becoming an increasingly important engine of growth. The Japanese recovery appears to be legitimate as corporations have lowered their debt and overcapacity and can now focus on product leadership. We have sold several of our defensive holdings and shifted into companies with greater operational gearing. Europe lagged but is expected to make up ground in 2004. The economic impact of the appreciating euro has adversely slowed growth, but monetary and fiscal stimulus should help drive a cyclical economic upturn. As we move forward into 2004, we are likely to take profits in some of the more economically or financially levered cyclicals that have already performed well. On the other hand, we would look to add those stocks that have either lagged or have not discounted a recovery in earnings to more normal levels. 15 Hartford International Stock HLS Fund inception 1/3/1995 (subadvised by Lazard Asset Management, LLC) PERFORMANCE OVERVIEW 1/3/95 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> INTERNATIONAL STOCK IA MSCI EAFE INDEX ---------------------- --------------- 1/3/95 10000.00 10000.00 9731.90 10000.00 9787.80 9973.86 10047.50 10598.70 10344.60 11000.20 10355.10 10871.90 10487.70 10684.10 11184.90 11352.20 10967.50 10921.90 11217.60 11138.00 10985.50 10841.50 11123.80 11146.00 12/95 11435.10 11597.90 11506.80 11648.30 11655.60 11690.60 11904.20 11941.80 12174.10 12291.90 12137.10 12068.60 12355.50 12139.50 11972.60 11787.80 12001.70 11816.60 12264.60 12133.50 12310.80 12012.40 12914.80 12493.30 12/96 13032.10 12335.60 12721.90 11906.80 13044.80 12104.40 13347.10 12151.20 13274.20 12218.60 13817.30 13016.70 14676.70 13737.50 14993.90 13962.60 14082.40 12922.70 15253.20 13649.50 14311.60 12603.30 14403.90 12477.80 12/97 14594.30 12589.50 14946.70 13168.20 15780.80 14016.20 16713.80 14450.90 17044.80 14568.60 17456.40 14501.20 17301.90 14614.20 17583.00 14765.60 15170.00 12939.60 14374.40 12546.20 15467.80 13857.60 16427.30 14571.00 12/98 16998.40 15149.30 16831.50 15108.00 16456.00 14751.40 17053.80 15370.80 17860.80 15997.10 17271.30 15176.80 17940.90 15772.00 18571.10 16244.40 18947.00 16307.40 18960.60 16475.10 19296.40 17095.80 19690.80 17693.30 12/99 21077.00 19284.80 19574.10 18062.80 19594.40 18552.50 20504.20 19275.30 19717.70 18264.40 19458.10 17821.90 20275.40 18523.10 19773.70 17750.10 19837.40 17907.80 18980.50 17039.40 18735.70 16640.40 18311.80 16019.90 12/00 19014.60 16593.00 18905.30 16585.20 17885.30 15343.10 16530.60 14327.20 17396.50 15332.10 17000.60 14803.10 16429.90 14203.20 15812.10 13945.90 15595.50 13595.60 13795.90 12221.60 13980.60 12534.10 14358.00 12996.90 12/01 14419.10 13074.40 13756.80 12380.70 14002.40 12468.20 14953.00 13209.40 14988.70 13244.10 15229.70 13423.70 14704.40 12894.80 13248.30 11622.80 13407.30 11599.60 12164.70 10357.30 12943.70 10914.50 13317.60 11411.10 12/02 13014.70 11028.80 12334.90 10568.90 12260.10 10326.90 12193.80 10131.70 13233.50 11136.80 13950.00 11822.00 14096.30 12114.50 14179.20 12409.60 14424.70 12711.50 14733.90 13105.80 15494.80 13923.60 15916.20 14235.20 12/03 16920.70 15347.90 </Table> <Table> --- INTERNATIONAL STOCK IA --- MSCI EAFE INDEX $10,000 starting value $10,000 starting value $16,921 ending value $15,348 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> SINCE 1 YEAR 5 YEAR INCEPTION - -------------------------------------------------------- International Stock IA 30.01% -0.09% 6.02% - -------------------------------------------------------- MSCI EAFE Index 39.16% 0.26% 4.88% - -------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. * As we announced on October 2, 2003, Herbert Gullquist, Co-Chief Executive Officer and Chief Investment Officer of Lazard, retired as of December 31, 2003. In preparation for this change, Lazard has created the Lazard Investment Council and the Lazard Oversight Committee. The Investment Council was created to both continue and enhance investment thought leadership. The Oversight Committee was designed to be the central management body for Lazard's investment platform and created to address those issues that most often confront a typical CIO. PORTFOLIO MANAGEMENT TEAM HERBERT W. GULLQUIST* Chief Investment Officer, Co-Chief Executive Officer JOHN R. REINSBERG Managing Director MICHAEL BENNETT Managing Director GABRIELLE BOYLE Managing Director MICHAEL POWERS Director - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford International Stock HLS Fund, Class IA returned 30.01% for the 12 months ended December 31, 2003. The Fund underperformed both the Lipper International VA-UF Average, which returned 35.41% and the Morgan Stanley Capital International (MSCI) Europe, Australasia and Far East (EAFE Index), which returned 39.16% over the same period. WHY DID THE FUND PERFORM THIS WAY? The first two-and-a-half months of 2003, which saw a continuation of the previous year's bear market, proved an anomaly in an otherwise bull market year. In mid-March, just before the start of the second Gulf War, sentiment swung abruptly from very negative to very positive. Investors rotated into stocks that stood to gain the most from an improving economy; the stocks that benefited from this change in sentiment included highly leveraged and economically sensitive companies. In fact, many of the greatest beneficiaries were those same lower-quality companies whose business models had been most questioned during the bear market. Overall, 2003 proved to be a reversal of 2002, in that all sectors in the MSCI EAFE Index(R) rose in 2003, in comparison to the across-the-board falls of 2002. In addition, the technology sector, which led 2002's decline, proved to be 2003's strongest performer. However, late in the year there were signs that the rebound in lower-quality stocks had begun to fade as investors began to focus once again on individual companies' fundamentals. During the year, the Fund's performance was helped by stock selection in the consumer discretionary sector, where Nissan Motor Co. Ltd. (transportation, Japan) benefited from new model introductions and strong U.S. demand. With the leadership of CEO Carlos Ghosn, it has steadily gained market-share, improved its marketing efforts, rolled out new models and implemented good capital discipline. Luxury goods manufacturer Richemont (consumer durables, Switzerland) also performed well as the improving economy has led to a rebound in demand for luxury items, which had been hurt by the decline in travel related to SARS and fears of terrorism. Conversely, the Fund was hurt by stock selection in the financials sector, as we avoided unprofitable Japanese financial stocks such as Sumitomo Corp. (consumer non-durables, Japan), Mizuho (banks, Japan), UFJ Holdings, Inc. (banks, Japan) and Resona (banks, Japan), which significantly outperformed the sector and the market. Stock selection in the technology sector posed a similar problem: unprofitable companies such as Ericsson (communications, Sweden) and Alcatel S.A. (communications, France) also significantly outperformed their peers and the overall market, while companies with consistently high return-on-capital, such as Nokia Oyj (communications, Finland), failed to fully participate in the rally. WHAT IS YOUR OUTLOOK AND STRATEGY? In the past, market recoveries have frequently seen a period during which lower-quality, more cyclical stocks have outperformed. During these initial stages of upswing, investors tend to seek out those companies that stand to gain the most from an improvement in the economic landscape. Frequently, these companies are the most volatile, debt-ridden, and cyclical stocks available. As we may already be seeing, however, investors tend to turn their attention back to the fundamentals underpinning stocks, including a company's ability to generate strong returns on its capital. We remain confident in the Fund's holdings, as they feature this sort of history of strong financial productivity, which over the long term is a key determinant of a stock's performance. 16 Hartford LargeCap Growth HLS Fund inception 5/1/1998 PERFORMANCE OVERVIEW 5/1/98 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> LARGECAP GROWTH IA S&P 500 INDEX ------------------ ------------- 5/1/98 10000.00 10000.00 9797.97 10000.00 10438.90 10406.00 10592.50 10295.50 8772.77 8806.84 9185.09 9371.36 10084.30 10133.00 10647.10 10746.80 12/98 11861.30 11366.10 12972.50 11841.40 12448.40 11473.40 13036.10 11932.40 12900.20 12394.40 12469.50 12102.20 13571.90 12773.80 13206.90 12374.90 13046.00 12313.30 12852.70 11975.80 13797.90 12733.30 14099.70 12992.10 12/99 15090.30 13757.40 14348.80 13066.30 14209.80 12819.20 15981.50 14072.40 15473.40 13649.10 14902.70 13369.00 15355.30 13698.70 15247.50 13484.70 16021.60 14321.80 14392.10 13565.80 14032.70 13508.30 12480.00 12444.10 12/00 12382.30 12505.10 13412.70 12948.50 11352.30 11768.60 10459.20 11023.50 11686.70 11878.90 11645.40 11958.50 11048.00 11667.90 10800.10 11553.00 9876.60 10830.50 9048.04 9956.25 9466.13 10146.40 10416.60 10924.60 12/01 10538.00 11020.80 9994.98 10860.00 9522.50 10650.60 9946.02 11051.20 9138.65 10381.40 8956.17 10305.20 8297.66 9571.50 7703.46 8825.88 7860.15 8883.25 7089.32 7918.53 7685.09 8614.57 7884.48 9121.11 12/02 7267.10 8585.70 7019.89 8361.61 6904.64 8236.19 7147.85 8316.08 7810.03 9000.49 8049.45 9474.25 8020.14 9595.27 8308.40 9764.53 8441.90 9954.59 8273.10 9849.19 8742.19 10405.70 8710.40 10497.10 12/03 8969.09 11047.20 </Table> <Table> --- LARGECAP GROWTH IA --- S&P 500 INDEX $10,000 starting value $10,000 starting value $8,969 ending value $11,047 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> SINCE 1 YEAR 5 YEAR INCEPTION - ---------------------------------------------------- LargeCap Growth IA 23.42% -5.44% -1.90% - ---------------------------------------------------- S&P 500 Index 28.67% -0.57% 1.77% - ---------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGEMENT TEAM ALLIANCE CAPITAL MANAGEMENT, L.P. (Portfolio Manager 01/01/03 - 12/19/03) JAMES G. REILLY Executive Vice President Alliance Capital Management, L.P. SYED J. HASNAIN Senior Vice President Alliance Capital Management, L.P. HOLLAND CAPITAL MANAGEMENT, L.P. (Portfolio Manager 12/19/03 - 12/31/03) LOUIS A. HOLLAND Managing Partner & Chief Investment Officer Holland Capital Management, L.P. MONICA L. WALKER Partner & Portfolio Manager Holland Capital Management, L.P. - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford LargeCap Growth HLS Fund, Class IA returned 23.42% for the 12 months ended December 31, 2003. The Fund underperformed both the Lipper Large Cap Growth VA-UF Average, which returned 28.37%, and the S&P 500 Index, which returned 28.67% over the same period. WHY DID THE FUND PERFORM THIS WAY? (ALLIANCE CAPITAL MANAGEMENT, L.P.) Three months of positive equity returns in the fourth quarter brought to conclusion a year celebrated by many as the U.S. market responded to three years of declines with robust gains in 2003. While technology and consumer discretionary stocks led the year's rally, all sectors of the S&P 500 Index closed the year in positive territory. The Dow Jones Industrials Average closed the year firmly above the 10,000 milestone. Indications of continued strength in the economy at year-end fed the optimistic appetite. Leading the news was the government's release of gross domestic product which shot up to an 8.2 percent annual rate in the third quarter, more than doubling the second quarter's 3.3 percent gain representing the strongest quarterly advance in over 19 years. The Institute for Supply Management reported that the nation's manufacturing sector completed the year with its most robust month of growth in over twenty years, providing encouragement that economic growth was continuing to gain momentum. Unemployment claims as defined by the number of Americans filing first-time applications for state unemployment benefits declined to the lowest level in almost three years in the final week of the year. The Conference Board reported that its consumer confidence index slipped from its 14-month high of 92.5 to 91.3, but still reflected a relatively strong attitude towards the economy. Investors remained divided on whether the Federal Reserve would alter its accommodative stance while the dollar continued to come under pressure, sinking to another round of multi-year lows. Technology stocks finished the year on a strong note as the NASDAQ composite surged over 50 percent, recording its third best year ever and the highest level since January 2001. The fourth quarter brought forth upbeat sentiment for the sector, supported by continued expectations for growth in information-technology spending. Gartner and SoundView Technology Group's survey of 600 executives reported that technology-spending budgets will increase 1.6 percent in 2004 and that the majority of respondents feel "positive or slightly positive" about their organization's outlook next year, with 44 percent expecting their IT budgets to increase in the upcoming year. Financial stocks also rallied during the quarter as investors remained confident the Federal Reserve would stay committed to low interest rates until the economic rebound solidifies. Stocks of investment banks reached 52-week highs during the month as the low interest rates fueled bond issuance and recovering stocks convinced more companies to raise equity capital. Stock and bond underwriting concluded 2003 by topping $5.3 trillion, about 25 percent more than in 2002, according to market research firm Thomson Financial. The retail sector completed a strong year of performance as the S&P Retail 17 - -------------------------------------------------------------------------------- Index ran up 42 percent for 2003. Yet, in the final month of the year the index stumbled as investors became wary that holiday sales would not meet the heightened expectations. Despite any significant change in fundamentals for the sector, healthcare stocks lifted during December. Investors appeared to lock in year-end gains in the higher-beta sectors, rotating into areas such as the larger pharmaceutical companies. The Fund remains broadly diversified with its largest holdings Microsoft Corp. (software & services), Pfizer, Inc. (drugs), Citigroup, Inc. (banks), American Intl Group, Inc. (insurance) and General Electric Co. (electronics). WHAT IS YOUR OUTLOOK AND STRATEGY? (HOLLAND CAPITAL MANAGEMENT, L.P.) Positive stock returns during 2003 were a welcomed relief after the abysmal returns most investors experienced during the prior three years. As it became increasingly evident during the year that the economic recovery was real and that corporate profits had strengthened, money started moving back into stocks. As investors' confidence increased, so did their desire for risk. During the year, low quality stocks outperformed high quality stocks and small stocks (low-priced stocks) outperformed large stocks. And while this trend seemed to reverse somewhat during the last month of the year, it will be interesting to see whether the speculative tone to the market can continue during 2004 since the valuation levels of these issues have become extended due to their superior performance over the past 12-15 months. We believe that during the next year, stocks will continue to do well as the economy continues to grow. But, we do not anticipate stock returns of the same magnitude as were experienced during 2003. And while there presently does not appear to be any economic statistics that point to inflationary pressures, inflationary hedges such as gold, energy, and commodities seem to be discounting the possibility of future inflation. We believe that should signs of inflation or reflation become evident, stocks and other financial assets will likely be poor performers. Despite the superior stock returns achieved during 2003, we believe investors' expectations must be reduced to levels more consistent with the long-term historical real rate of return of +6-8%. We continue to believe that our investment philosophy of purchasing high quality, reasonably priced, large capitalization growth companies with a leadership position in their industries will produce superior results for long-term investors. We expect our growth at a reasonable price approach to provide these results over a complete market cycle which would be measured from market cycle peak-to-peak or trough-to-trough (which would include both a rising market environment and a declining market environment). In other words, we expect our conservative growth philosophy to provide participation in rising markets and protection in declining markets, resulting in superior results for investors over complete market cycles. 18 Hartford MidCap Stock HLS Fund inception 5/1/1998 (subadvised by The Dreyfus Corporation) PERFORMANCE OVERVIEW 5/1/98 - 12/31/03 Growth of a $10,000 investment(1) (LINE GRAPH) <Table> <Caption> MIDCAP STOCK IA S&P MIDCAP 400 INDEX --------------- -------------------- 5/1/98 10000.00 10000.00 9541.48 9550.41 9490.28 9610.58 9143.62 9237.69 7428.45 7518.56 7915.84 8220.04 8297.60 8954.91 8779.16 9401.76 12/98 9711.29 10537.50 9425.79 10127.60 8903.76 9596.90 9090.60 9865.61 9510.14 10643.00 9531.00 10689.90 10110.80 11260.70 9902.26 11022.00 9702.52 10645.00 9390.31 10316.10 9796.24 10842.20 10139.80 11411.40 12/99 10776.20 12089.30 10322.30 11748.30 11146.40 12570.70 11915.30 13622.90 11515.10 13147.50 11298.90 12983.10 11542.10 13174.00 11563.40 13382.10 12724.90 14876.90 12374.50 14775.70 11994.30 14274.80 10766.80 13197.10 12/00 11714.80 14206.70 11824.40 14523.50 10987.70 13694.20 10303.10 12676.70 11525.30 14074.90 11688.10 14402.90 11473.40 14345.30 11275.50 14131.50 10926.30 13669.40 9621.06 11969.00 10076.10 12498.00 10726.40 13427.80 12/01 11226.70 14120.70 11192.30 14045.90 11266.30 14064.10 11965.50 15068.30 12032.60 15002.00 11861.10 14751.50 11097.30 13671.70 10030.40 12345.50 10103.60 12408.50 9380.04 11408.30 9677.36 11902.30 10009.30 12591.50 12/02 9760.66 12074.00 9543.00 11721.40 9304.26 11442.40 9431.69 11538.90 10079.30 12376.60 10828.60 13402.30 10860.70 13573.10 11212.80 14054.80 11592.30 14692.30 11426.50 14467.30 12283.80 15546.60 12720.70 16088.20 12/03 12791.10 16359.70 </Table> <Table> --- MIDCAP STOCK IA --- S&P MIDCAP 400 INDEX $10,000 starting value $10,000 starting value $12,791 ending value $16,360 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR SINCE INCEPTION - --------------------------------------------------------- MidCap Stock IA 31.05% 5.66% 4.44% - --------------------------------------------------------- S&P MidCap 400 Index 35.62% 9.22% 9.09% - --------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER JOHN R. O'TOOLE, CFA Vice President - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford MidCap Stock HLS Fund, Class IA returned 31.05% for the 12 months ended December 31, 2003. The Fund underperformed both the Lipper Mid Cap Core VA-UF Average, which returned 35.05% and the S&P MidCap 400 Index, which returned 35.62% over the same period. WHY DID THE FUND PERFORM THIS WAY? It was a sensational year for stocks. After three consecutive years of negative total returns, equity markets rebounded sharply in 2003. Midcap stocks fully participated in this market rally and outperformed larger cap issues. While the absolute return for the past year was strongly positive, we are nonetheless disappointed that the Fund's performance was less than its benchmark, the S&P MidCap 400 Index. Over the course of the year, the Fund was negatively impacted by the focus of many investors on rewarding low quality issues. And to a lesser extent, the Fund was also negatively impacted late in the year by profit taking and the accompanying selling pressure in issues that had performed well during the year. The blended valuation process used by Dreyfus looks at both growth-oriented and value type factors. During the course of the year, investors appeared to favor low quality type stocks. Many of these types of issues had little or no earnings as the year began, but they nonetheless attracted the attention of many investors. Our quantitative valuation process includes a number of value type factors, such as the price/earnings ratio, but also includes a number of growth related and quality related factors such as earnings growth, profit margins, and cash flow growth. Lower quality/less profitable companies looked less attractive within our valuation process, but these were the types of issues that performed well in 2003. We do not feel these types of companies -- lower quality -- are equity market leaders over the long term, and thus we remain confident in the effectiveness of our process to identify future market leaders. When reviewing our individual stock selections, we were especially rewarded by our selections within the energy sector. Our focus on truly midcap holdings directed us to issues such as Patina Oil & Gas Corp. (energy & services) and XTO Energy, Inc. (energy & services), both of which contributed positively to performance. Both of these companies are domestically based and explore for energy within the United States. The combination of a strong national economy along with an uncertain geopolitical situation caused many investors to focus on domestic energy reserves and production. The Fund also benefited from holding financial services firms such as Doral Financial Corp. (banks) and Countrywide Credit Industries, Inc. (banks). Both of these firms provide home mortgage related products, and both saw strong demand for their services based upon a benign interest rate environment. Our stock selection among business services firms was disappointing. Holdings such as WebMD (health services), Pharmaceutical Product Development, Inc. (research & testing facilities) and Valassis Communication, Inc. (media & entertainment) each experienced company specific developments over the course of the year, which led to disappointing results. Stock selection within the technology sector also did not meet our expectations, but in this sector relative performance was penalized by not owning certain benchmark names such as Lam Research, Inc. (research & testing facilities) and Cypress Semiconductor Corp. (electronics), which moved upward substantially in price during the year. A technology holding that performed well during most of 2003 was SanDisk Corp. (computers & office equipment); but this issue was down late in the year as profit takers appeared to ignore company fundamentals and sell the stock after a substantial upswing in its price for most of the year. WHAT IS YOUR OUTLOOK AND STRATEGY? As we enter 2004, the Fund remains capitalization and economic sector neutral relative to the S&P MidCap 400 Index. The beta of the Fund has also moved upward to now being slightly higher than that of the benchmark. We are optimistic in our economic outlook, and remain confident that midcap stocks continue to offer exciting investment opportunities. 19 *Hartford Multisector Bond HLS Fund inception 1/3/1995 (subadvised by A.I.M. Capital Management, Inc.) PERFORMANCE OVERVIEW 1/3/95 - 12/31/03 Growth of a $10,000 investment(1) (LINE GRAPH) <Table> <Caption> MULTISECTOR BOND IA LEHMAN U.S. AGGREGATE BOND INDEX ------------------- -------------------------------- 1/3/95 10000.00 10000.00 10214.50 10211.80 10452.20 10454.80 11034.60 10518.60 11254.00 10665.90 11526.80 11078.60 11540.80 11159.50 11507.40 11135.00 11263.30 11269.70 11357.00 11379.00 11512.60 11526.90 11738.90 11699.80 12/95 11914.20 11863.60 11844.20 11941.90 11668.90 11734.20 11593.30 11652.00 11561.00 11586.80 11523.10 11563.60 11588.40 11718.50 11760.90 11750.20 11824.80 11730.20 11905.70 11934.30 12164.20 12199.30 12333.30 12407.90 12/96 12310.30 12292.50 11996.90 12330.60 11937.40 12361.40 11796.30 12224.20 11708.50 12407.60 11952.80 12525.40 12083.10 12674.50 12031.50 13016.70 11993.90 12906.00 12254.00 13097.10 12483.60 13287.00 12368.30 13348.10 12/97 12326.90 13482.90 12477.20 13655.50 12559.30 13644.60 12458.90 13691.00 12571.50 13762.10 12671.10 13892.90 12714.60 14011.00 12720.90 14040.40 13048.70 14269.30 13736.20 14603.20 13811.90 14525.80 13646.70 14608.60 12/98 13990.20 14652.40 13831.20 14756.40 13329.70 14498.20 13308.30 14577.90 13273.20 14624.60 13002.20 14495.90 12774.00 14449.50 12962.10 14388.80 12965.60 14381.60 13152.60 14548.40 13101.00 14602.30 12986.90 14600.80 12/99 12936.70 14530.70 12631.40 14482.80 12513.80 14658.00 12809.50 14851.50 12670.10 14808.40 12599.20 14801.00 12874.30 15108.90 12978.30 15246.40 13110.60 15467.40 13151.40 15564.90 13103.80 15667.60 13186.70 15924.60 12/00 13489.60 16220.80 13807.80 16485.20 13940.50 16628.60 13892.70 16711.70 13769.30 16641.50 13864.40 16741.40 13849.30 16805.00 14189.90 17181.40 14339.20 17379.00 14175.20 17580.60 14556.70 17948.00 14398.40 17700.40 12/01 14241.90 17587.10 14324.40 17729.50 14297.20 17901.50 14113.10 17604.30 14332.70 17945.70 14371.20 18098.20 14247.80 18253.90 14023.40 18474.70 14284.10 18787.00 14471.30 19091.30 14269.50 19003.50 14427.40 18997.80 12/02 14802.50 19391.00 14850.30 19408.50 15095.60 19676.30 15151.70 19661.20 15497.80 19824.30 15886.40 20194.00 15897.80 20153.90 15310.80 19476.30 15429.60 19605.60 15909.90 20124.60 15812.30 19937.50 15922.20 19985.20 12/03 16172.60 20188.60 </Table> <Table> --- MULTISECTOR BOND IA --- LEHMAN U.S. AGGREGATE BOND INDEX $10,000 starting value $10,000 starting value $16,173 ending value $20,189 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR SINCE INCEPTION - ------------------------------------------------------------- Multisector Bond IA 9.26% 2.94% 5.49% - ------------------------------------------------------------- Lehman U.S. Aggregate Bond Index 4.11% 6.62% 8.12% - ------------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. * Pursuant to shareholder approval, at a special meeting of shareholders, that is scheduled to be held on April 20, 2004, the Hartford Multisector Bond HLS Fund would merge with the Hartford Bond HLS Fund on or about April 30, 2004. PORTFOLIO MANAGEMENT TEAM ROBERT G. ALLEY, CFA Senior Portfolio Manager JAN H. FRIEDLI Senior Portfolio Manager CAROLYN L. GIBBS, CFA Senior Portfolio Manager SCOT W. JOHNSON, CFA Senior Portfolio Manager - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Multisector Bond HLS Fund, Class IA returned 9.26% for the 12 months ended December 31, 2003. The Fund outperformed both the Lipper Corporate Debt BBB Rated VA-UF Average, which returned 7.78%, and the Lehman Brothers Aggregate Bond Index, which returned 4.11% over the same period. WHY DID THE FUND PERFORM THIS WAY? The Fund's out performance was mostly due to a large overweight position in corporate bonds relative to the Lehman Aggregate Bond Index, as this sector performed very well during 2003. Specifically, corporate bond holdings within the consumer discretionary, financials, utilities, and telecommunication services sectors made significant contributions to the fund's overall return. Within the consumer discretionary sector, bond holdings in media related companies performed particularly well. Exposure to the high-yield sector also helped the Fund's relative performance as this market experienced explosive gains during the year. The Lehman High Yield Corporate Index led the fixed-income market for the period, posting a return of 28.96%. As of December 31, 2003, managers continued to hold overweight positions in corporate bonds and high yield securities, while holding underweight positions in U.S. government and mortgage-backed bonds relative to the Lehman Aggregate Bond Index. Fund managers continue to emphasize thorough credit research and stress risk management through diversification across credit quality, industry, and companies, as well as by adjusting portfolio duration. During the year, managers reduced the duration of the Fund, with the intent of lowering exposure to interest rate risk. Managers also broadened the number of holdings, reducing exposure to single-issuer risk. WHAT IS YOUR OUTLOOK AND STRATEGY? Signs continue to indicate the economy is picking up steam with a stronger GDP reported in the third quarter, corporate earnings moving into positive territory, and companies' balance sheets generally improving. Given this economic scenario, we believe that interest rates in the long run are more inclined to rise rather than fall, and by shortening duration -- primarily through mortgages and short to intermediate Treasury positions as our corporate bonds become more fully valued -- we can protect principal while still generating a significant amount of income. On the other hand, low inflation continues to keep interest rates in check, allowing for robust real returns. Unemployment, albeit lower than in previous quarters, remained at high levels during the fourth quarter of 2003, and the addition of new jobs was well below levels that would suggest corporations are vigorously hiring and creating new positions. Given this backdrop of low inflation and a still moderately soft labor market, we believe it is unlikely the Federal Reserve would hike the Fed Funds Rate in the near future and thus any rise in interest rates should be gradual. If the Fed were to raise interest rates in 2004, amid a stronger than expected economic recovery and a continued rising budget deficit, we believe 2004 could be a less favorable year for high quality bonds, especially Treasury issues. 20 Hartford SmallCap Growth HLS Fund inception 5/2/1994 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 5/2/94 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> SMALLCAP GROWTH IA RUSSELL 2000 GROWTH INDEX ------------------ ------------------------- 5/2/94 10000.00 10000.00 9563.00 9777.00 9133.00 9356.00 9123.00 9489.00 9495.00 10186.00 9683.00 10230.00 9884.00 10340.00 9639.00 9921.00 12/94 9811.00 10156.00 9728.00 9950.00 10134.00 10409.00 10194.00 10713.00 10426.00 10875.00 10428.00 11017.00 11352.00 11776.00 12385.00 12694.00 12445.00 12850.00 12944.00 13115.00 12547.00 12470.00 12885.00 13020.00 12/95 12743.00 13309.00 12585.00 13199.00 13302.00 13801.00 13687.00 14073.00 14871.00 15154.00 15584.00 15931.00 14722.00 14896.00 13391.00 13077.00 14379.00 14046.00 15401.00 14769.00 14238.00 14132.00 14220.00 14525.00 12/96 13718.00 14808.00 13566.00 15178.00 12032.00 14261.00 11092.00 13255.00 10770.00 13101.00 12590.00 15071.00 12960.00 15582.00 13671.00 16380.00 13351.00 16872.00 14238.00 18218.00 13617.00 17124.00 13588.00 16715.00 12/97 13913.00 16725.00 13638.00 16502.00 15115.00 17959.00 16088.00 18712.00 16047.00 18827.00 15217.00 17459.00 15815.00 17637.00 14649.00 16164.00 11631.00 12433.00 12360.00 13694.00 13212.00 14408.00 14843.00 15525.00 12/98 16858.00 16930.00 18083.00 17692.00 15821.00 16074.00 17032.00 16646.00 17672.00 18116.00 17836.00 18145.00 20197.00 19101.00 20569.00 18510.00 21032.00 17818.00 21949.00 18161.00 25085.00 18627.00 28104.00 20596.00 12/99 35277.00 24226.00 35819.00 24001.00 49549.00 29585.00 44718.00 26475.00 37442.00 23802.00 32117.00 21718.00 39523.00 24523.00 36612.00 22422.00 43826.00 24780.00 41345.00 23549.00 37598.00 21637.00 27070.00 17709.00 12/00 29958.00 18792.00 30427.00 20313.00 24939.00 17529.00 22433.00 15935.00 24613.00 17886.00 24612.00 18300.00 25555.00 18800.00 23720.00 17196.00 22184.00 16122.00 18100.00 13520.00 19935.00 14821.00 22175.00 16058.00 12/01 23913.00 17058.00 23153.00 16451.00 21877.00 15387.00 24138.00 16724.00 23124.00 16362.00 21506.00 15405.00 19507.00 14099.00 16869.00 11932.00 16825.00 11926.00 15436.00 11065.00 16643.00 11625.00 18460.00 12777.00 12/02 17018.00 11895.00 16467.00 11572.00 15732.00 11263.00 15937.00 11433.00 17412.00 12515.00 19454.00 13926.00 19962.00 14194.00 21323.00 15267.00 22797.00 16087.00 22817.00 15680.00 24544.00 17035.00 25173.00 17590.00 12/03 25537.00 17669.00 </Table> <Table> --- SMALLCAP GROWTH IA --- RUSSELL 2000 GROWTH INDEX $10,000 starting value $10,000 starting value $25,537 ending value $17,669 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR SINCE INCEPTION - ----------------------------------------------------------------- SmallCap Growth IA 50.06% 8.66% 10.18% - ----------------------------------------------------------------- SmallCap Growth IB(3) 49.70% 8.40% 9.91% - ----------------------------------------------------------------- Russell 2000 Growth Index 48.53% 0.86% 6.06% - ----------------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGEMENT TEAM DAVID J. ELLIOTT, CFA Vice President JAMES RULLO, CFA Senior Vice President, Partner - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford SmallCap Growth HLS Fund, Class IA returned 50.06% for the 12 months ended December 31, 2003. The Fund outperformed both the Lipper Small Cap Core VA-UF Average, which returned 41.42%, and the Russell 2000 Growth Index, which returned 48.53% over the same period. WHY DID THE FUND PERFORM THIS WAY? Ascending equity markets have generally reflected increased investor confidence in an economic rebound as indicated by increased consumer confidence and firming consumer spending, growing manufacturing output and productivity gains, and accommodating interest rate and tax policies. Small cap stocks benefited the most from this cyclical rally outpacing larger cap names. Within the Russell 2000 Growth Index, the rally was broad based as all ten sectors posted positive returns. Information technology and telecommunication services were the top performing sectors, as they were beneficiaries of investors' appetite for greater risk. The Fund's investment approach is to focus on stock selection rather than attempting to make top-down decisions to underweight or overweight sectors. The Fund's stock selection was strongest in the information technology and industrials sectors. On a relative basis, our weakest results were in the health care and consumer discretionary sectors. For the twelve-month period, the greatest contributors to absolute Fund returns were UnitedGlobalCom, Inc. (business services), Ciphergen Biosystems, Inc. (research & testing facilities), and Dendrite International, Inc. (health services). The largest detractors from absolute Fund returns were Investment Technology Group (financial services), Too, Inc. (retail), and Clarke, Inc. (insurance). WHAT IS YOUR OUTLOOK AND STRATEGY? In the current environment of accelerating growth, productivity is surging and remains well above the rate of the 1990s. This implies better corporate profits, higher investments, and ultimately job creation. We believe the consumption environment will be sound in 2004, bolstered by more jobs, tax cuts, and an improving net worth position of households. Furthermore, the outlook for capital spending is solid and will likely emerge as a new driver of growth. In this environment, we will continue to build a diversified portfolio by focusing on bottom-up stock selection. 21 Hartford SmallCap Value HLS Fund inception 5/1/1998 (subadvised by Perkins, Wolf, McDonnell & Company, LLC) PERFORMANCE OVERVIEW 5/1/98 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> SMALLCAP VALUE IA RUSSELL 2000 VALUE INDEX ----------------- ------------------------ 5/1/98 10000.00 10000.00 9579.03 9645.97 9640.00 9591.49 9230.89 8840.22 7641.03 7455.77 8135.82 7876.82 9042.45 8110.71 9179.36 8330.25 12/98 9451.69 8591.46 9450.56 8396.45 8755.21 7823.18 8850.65 7758.64 10050.90 8466.92 10481.00 8727.17 10992.50 9043.16 10735.30 8828.54 10351.30 8505.83 10297.60 8335.77 10172.40 8168.98 10497.40 8211.32 12/99 10901.20 8463.61 10463.90 8242.28 10390.90 8746.06 11268.40 8787.06 11272.90 8839.07 11640.30 8704.19 11271.10 8958.53 11687.40 9257.01 12659.00 9670.87 12472.50 9616.05 12663.30 9581.91 12448.00 9386.85 12/00 13844.40 10395.50 14669.20 10682.40 14436.00 10667.60 14124.90 10496.60 15107.20 10982.40 15505.70 11264.80 16108.90 11718.00 15838.30 11455.30 15572.00 11415.60 13411.60 10155.40 14383.60 10420.70 15632.60 11169.40 12/01 16753.40 11853.30 16974.80 12010.60 16887.50 12083.80 18013.10 12988.70 18228.60 13445.90 17426.00 13001.20 17032.40 12713.40 14634.20 10824.50 14629.20 10776.80 13061.40 10007.40 13408.70 10157.50 14787.00 10968.00 12/02 14211.90 10499.70 13852.70 10203.60 13535.10 9860.78 13618.30 9966.09 14598.10 10912.90 15862.00 12027.10 15979.30 12230.90 16784.80 12840.90 17642.80 13328.60 17167.20 13175.70 18153.80 14249.60 18772.00 14796.50 12/03 19677.20 15331.70 </Table> <Table> --- SMALLCAP VALUE IA --- RUSSELL 2000 VALUE INDEX $10,000 starting value $10,000 starting value $19,677 ending value $15,332 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> SINCE 1 YEAR 5 YEAR INCEPTION - ---------------------------------------------------------- SmallCap Value IA 38.46% 15.80% 12.68% - ---------------------------------------------------------- SmallCap Value IB(6) 38.04% 15.49% 12.39% - ---------------------------------------------------------- Russell 2000 Value Index 46.02% 12.28% 7.83% - ---------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGEMENT TEAM ROBERT H. PERKINS President and Chief Investment Officer THOMAS M. PERKINS Partner - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford SmallCap Value HLS Fund, Class IA returned 38.46% for the 12 months ended December 31, 2003. The fund underperformed both the Lipper SmallCap Value VA-UF Average, which returned 44.49%, and the Russell 2000 Value Index, which returned 46.02% over the same period. MARKET OVERVIEW Positive returns weren't limited to small capitalization equities over the past 12 months as the major U.S. stock market indices ended the fiscal year with gains for the first time since 1999. The Dow Jones Industrial Average added 28.27% and the broad-based Standard & Poor's 500 Index climbed 28.67%. Not to be outdone, the technology-dominated Nasdaq Composite Index surged 50.01% for the period. In the value arena, the S&P 500/Barra Value Index rose 31.79%. The period began with a brief rally that was quickly overcome by worries of a looming conflict with Iraq. Rising unemployment, a persistent lack of new jobs and soaring oil prices also were causes for concern. After hitting a trough in the months leading up to the war, however, both the market and consumer confidence bounced back sharply by the time the hostilities began in mid-March. Later, signs that the manufacturing sector was emerging from a two-year slump and a tax-cut-driven increase in consumer spending also helped to lift investors' spirits. But the health of the economy still was in doubt as job losses mounted. The Federal Reserve acknowledged the mixed picture, cutting its benchmark federal funds rate to a 45-year low of 1% in an attempt to spur corporate investment and hiring. As the fiscal year came to a close, however, stocks added to their gains. Feelings of cautious optimism, fueled by an acceleration of quarterly earnings and better-than-expected economic growth, prevailed despite questions about whether the positive momentum could be sustained. MANAGER'S OVERVIEW Q. HOW DID YOU MANAGE THE PORTFOLIO IN THIS ENVIRONMENT? We have been quite surprised by the persistent strength of the U.S. equity markets in recent months. While we feel good about the resulting healthy absolute returns of the Fund, our somewhat pessimistic view of general market fundamentals going into the period, and the difficulty we had finding attractive values in light of this outlook, led to underperformance relative to our benchmark. All sectors in the Fund had positive returns over the latest period. However, our stock selection was disappointing in a few instances, so we eliminated those positions we felt had developed long-term fundamental problems and added to those whose weakness we believed was due to more temporary and correctable issues. We adhered to our disciplined process of only investing in stocks we felt had attractive risk-reward relationships and therefore missed out on the continued run-up in, what seem to us to be, more speculative stocks. While this also contributed to our relative underperformance, historically this approach has yielded superior long-term relative returns. Q. WHICH HOLDINGS HAD THE GREATEST NEGATIVE IMPACT ON PERFORMANCE? For the period, crane manufacturer Manitowoc (machinery) and municipal truck maker Federal Signal (transportation) weighed most heavily on the Portfolio's results. Meanwhile, visual projection-system developer InFocus (software & services) lagged amid a management shakeup, while upholstered furniture icon La Z Boy (retail) and compressor and small-engine manufacturer Tecumseh Products (machinery) hindered returns as well. 22 - -------------------------------------------------------------------------------- Q. WHICH INDIVIDUAL HOLDINGS HAD THE GREATEST POSITIVE IMPACT ON PERFORMANCE? Mining machinery manufacturer Joy Global, Inc. (machinery) led all advancers, followed by Manor Care, Inc. (health services) an operator of nursing home and assisted living facilities. Two different construction-related concerns -- single-family home builder Standard Pacific Corp. (construction) and Dycom Industries, Inc. (construction) a contractor serving the telecommunications and cable industries -- also performed well, as did wood processor and timberland owner Rayonier, Inc. (real estate investment trust), which progressed with plans to convert into a real estate investment trust in 2004. Q. WHICH SECTORS HAD THE GREATEST IMPACT ON THE FUND'S PERFORMANCE? While our research efforts are tightly focused on company fundamentals, sector performance provides an alternative view of the Fund's advance. Holdings within the information technology and industrials groups, where we were collectively overweight relative to the benchmark, led all gainers on an absolute basis. At the other end of the spectrum, the consumer staples and consumer discretionary sectors performed poorest. A deeper look into the consumer discretionary category shows that our stock selection within this area proved to lag that of the benchmark. Q. HOW WILL YOU MANAGE THE FUND IN THE MONTHS AHEAD? Despite widespread investor optimism surrounding the run up in share prices, we cannot bring ourselves to ignore the confluence of events that has aided the market's ascent. It is our belief that the gathering strength of the economy has had greater impact on stock valuations than it has on the near-term earnings of our investments. While our companies have generally shown good earnings growth this year, we believe our performance has benefited more from increased investor confidence in the fundamental longer term outlook for our holdings. This has reinforced our belief that it is more important to focus on long-term company fundamentals and stock valuations than on near-term economic trends. As always, our focus is on superior balance sheets, cash flow and franchise position at an attractive valuation. This emphasis is especially important now as we continue to believe there are considerable macroeconomic and geopolitical uncertainties in the intermediate and longer term. 23 Hartford Stock HLS Fund inception 8/31/1977 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 12/31/93 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> STOCK IA S&P 500 INDEX -------- ------------- 12/31/93 10000.00 10000.00 10260.00 10340.00 10130.00 10059.00 9630.00 9621.00 9673.00 9745.00 9808.00 9904.00 9550.00 9662.00 9866.00 9979.00 10230.00 10387.00 9957.00 10133.00 10023.00 10361.00 9651.00 9984.00 12/94 9811.00 10131.00 9968.00 10394.00 10424.00 10799.00 10742.00 11117.00 10943.00 11444.00 11315.00 11901.00 11603.00 12177.00 11992.00 12580.00 12036.00 12610.00 12572.00 13142.00 12331.00 13094.00 12993.00 13670.00 12/95 13156.00 13933.00 13554.00 14407.00 13779.00 14541.00 13953.00 14681.00 14183.00 14897.00 14600.00 15279.00 14712.00 15337.00 14212.00 14660.00 14419.00 14969.00 15221.00 15810.00 15546.00 16246.00 16752.00 17473.00 12/96 16361.00 17127.00 17391.00 18196.00 17477.00 18340.00 16878.00 17588.00 17857.00 18636.00 18930.00 19769.00 19970.00 20655.00 21419.00 22297.00 20059.00 21048.00 21119.00 22199.00 20430.00 21458.00 21317.00 22451.00 12/97 21495.00 22838.00 21763.00 23089.00 23414.00 24753.00 24725.00 26021.00 25274.00 26284.00 24842.00 25832.00 26086.00 26880.00 26333.00 26595.00 22478.00 22749.00 23483.00 24208.00 25600.00 26175.00 27178.00 27761.00 12/98 28690.00 29361.00 29570.00 30588.00 28907.00 29638.00 30215.00 30823.00 31469.00 32017.00 30489.00 31262.00 32436.00 32997.00 31510.00 31966.00 31127.00 31807.00 30342.00 30935.00 31996.00 32892.00 32457.00 33561.00 12/99 34366.00 35538.00 32504.00 33752.00 31986.00 33114.00 35292.00 36351.00 34245.00 35258.00 33629.00 34534.00 34033.00 35386.00 33369.00 34833.00 35017.00 36995.00 33450.00 35043.00 33642.00 34894.00 31607.00 32145.00 12/00 31945.00 32303.00 32799.00 33448.00 30501.00 30400.00 28413.00 28475.00 30505.00 30685.00 30759.00 30891.00 29439.00 30140.00 29103.00 29843.00 27091.00 27977.00 25204.00 25719.00 25817.00 26210.00 27832.00 28220.00 12/01 28038.00 28468.00 27348.00 28053.00 26958.00 27512.00 27938.00 28547.00 25535.00 26817.00 25172.00 26620.00 23395.00 24725.00 21945.00 22799.00 21763.00 22947.00 19348.00 20455.00 21104.00 22253.00 22695.00 23561.00 12/02 21239.00 22178.00 20685.00 21599.00 20277.00 21275.00 20361.00 21481.00 21921.00 23249.00 22997.00 24473.00 23340.00 24786.00 23929.00 25223.00 24244.00 25714.00 23855.00 25442.00 25119.00 26879.00 25354.00 27115.00 12/03 26862.00 28536.00 </Table> <Table> --- STOCK IA --- S&P 500 INDEX $10,000 starting value $10,000 starting value $26,862 ending value $28,536 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR 10 YEAR - --------------------------------------------- Stock IA 26.47% -1.31% 10.39% - --------------------------------------------- Stock IB(4) 26.16% -1.51% 10.14% - --------------------------------------------- S&P 500 Index 28.67% -0.57% 11.06% - --------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER RAND L. ALEXANDER, CFA Senior Vice President, Partner - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Stock HLS Fund, Class IA returned 26.47% for the 12 months ended December 31, 2003. The Fund outperformed the Lipper Large Cap Core VA-UF Average, which returned 26.43% over the same period. The Fund underperformed the S&P 500 Index, which returned 28.67% over the same period. WHY DID THE FUND PERFORM THIS WAY? The Fund generated strong absolute returns in 2003 as the equity markets rebounded after three years of negative returns. Low interest rates, tax cuts, a stabilizing employment picture, and a weakening dollar provided a boost to the US economy, and in turn, investor confidence. All ten sectors of the S&P 500 Index had positive returns for the year. While the recovery was broad-based by industry, there was a notable divergence in the performance of companies depending on their market capitalization. Investors had a sharp change in risk perception and chased the stocks of the companies that had the most financial and operating leverage. In this environment, there was nearly an inverse relationship between company size and returns; smallest stocks performed the best and mega-cap stocks performed the worst. The Fund generated strong returns through positive sector allocation decisions and solid performance from some individual holdings. We maintained overweight positions in information technology and materials, the two strongest areas of the market during 2003. We also remained underweight telecommunication services, which was the poorest performing sector, as the industry continues to work through capacity issues. Strong absolute contributors during the year included Citigroup, Inc. (banks), Intel Corp. (electronics), and Cisco Systems, Inc. (computers & office equipment). Citigroup, Inc. has executed well, controlled costs and is leveraged to an improvement in capital market activity. Intel Corp. benefited from a strong semiconductor cycle in 2003 as they continually beat earnings expectations. Cisco Systems, Inc. rose sharply during the year driven by a rebound in technology spending and new product introductions. In terms of relative performance, the Fund underperformed the benchmark because of two factors related to stock selection. First, we have a large-cap, high quality bias and did not benefit from the strong performance of the smaller cap, speculative parts of the market, especially in the information technology and telecommunication services. Second, we owned some specific stocks that were poor performers, such as Schering-Plough Corp. (drugs), Baxter International, Inc. (medical instruments & supplies), and Safeway, Inc. (consumer non-durables). Schering-Plough Corp. was weak due to the conversion of the Claritin franchise to the over-the-counter market and competition in other key drugs. Safeway, Inc. struggled as a result of the weak economy as well as competitive pressures from Wal-Mart Stores. Baxter International, Inc. had weak earnings due to pricing and competitive issues in their biosciences business. These stocks are no longer held in the Fund. WHAT IS THE OUTLOOK AND STRATEGY? We have a positive outlook for 2004. Tax cuts, a weaker dollar, sustained productivity, and healthier balance sheets all bode well for corporate profits. The consumer has driven the economic recovery so far; however, we will look for improved corporate spending and employment trends as key gauges to determine the sustainability of the domestic recovery. At this juncture, we believe a sustainable up-trend will in fact unfold over the next several months and support growth in 2004. The portfolio is positioned with a cyclical bias with the largest overweights in capital goods, media, materials, and technology hardware. We believe the environment bodes well for large-cap, multi-national, industry leading companies. 24 Hartford U.S. Government Securities HLS Fund inception 3/24/1987 (subadvised by Hartford Investment Management Company) PERFORMANCE OVERVIEW 12/31/93 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> LEHMAN INTERMEDIATE GOV'T BOND U.S. GOVERNMENT SECURITIES IA INDEX ----------------------------- ------------------------------ 12/31/93 10000.00 10000.00 10108.00 10099.00 9875.00 9961.00 9545.00 9815.00 9369.00 9751.00 9346.00 9758.00 9300.00 9760.00 9485.00 9888.00 9481.00 9917.00 9317.00 9834.00 9288.00 9836.00 9276.00 9793.00 12/94 9356.00 9825.00 9559.00 9986.00 9771.00 10178.00 9834.00 10234.00 9962.00 10353.00 10327.00 10645.00 10410.00 10713.00 10354.00 10718.00 10498.00 10806.00 10602.00 10879.00 10770.00 10998.00 10939.00 11133.00 12/95 11114.00 11243.00 11174.00 11337.00 10894.00 11217.00 10813.00 11165.00 10731.00 11133.00 10716.00 11128.00 10864.00 11241.00 10888.00 11276.00 10850.00 11288.00 11044.00 11434.00 11275.00 11621.00 11473.00 11762.00 12/96 11359.00 11699.00 11398.00 11743.00 11417.00 11762.00 11285.00 11695.00 11459.00 11827.00 11555.00 11919.00 11690.00 12022.00 11985.00 12243.00 11887.00 12196.00 12064.00 12329.00 12222.00 12473.00 12257.00 12501.00 12/97 12391.00 12602.00 12564.00 12766.00 12540.00 12752.00 12586.00 12791.00 12636.00 12853.00 12767.00 12942.00 12890.00 13028.00 12902.00 13078.00 13176.00 13325.00 13482.00 13635.00 13411.00 13659.00 13460.00 13616.00 12/98 13490.00 13669.00 13548.00 13731.00 13275.00 13543.00 13347.00 13632.00 13390.00 13669.00 13252.00 13586.00 13200.00 13606.00 13153.00 13607.00 13139.00 13626.00 13300.00 13744.00 13318.00 13771.00 13304.00 13781.00 12/99 13229.00 13738.00 13172.00 13691.00 13309.00 13805.00 13474.00 13962.00 13449.00 13957.00 13454.00 13994.00 13705.00 14217.00 13812.00 14311.00 14022.00 14471.00 14140.00 14597.00 14246.00 14698.00 14502.00 14914.00 12/00 14792.00 15176.00 14964.00 15378.00 15113.00 15519.00 15183.00 15631.00 15100.00 15581.00 15157.00 15645.00 15186.00 15695.00 15503.00 15989.00 15663.00 16131.00 15951.00 16476.00 16214.00 16733.00 15985.00 16534.00 12/01 15901.00 16455.00 16007.00 16525.00 16188.00 16663.00 15981.00 16411.00 16284.00 16718.00 16423.00 16835.00 16568.00 17045.00 16884.00 17366.00 17125.00 17564.00 17436.00 17866.00 17392.00 17853.00 17282.00 17712.00 12/02 17607.00 18040.00 17622.00 18000.00 17842.00 18204.00 17827.00 18207.00 17909.00 18259.00 18166.00 18545.00 18144.00 18515.00 17541.00 18065.00 17611.00 18098.00 17943.00 18490.00 17825.00 18309.00 17848.00 18311.00 12/03 17985.00 18453.00 </Table> <Table> --- U.S. GOVERNMENT SECURITIES IA --- LEHMAN INTERMEDIATE GOV'T BOND INDEX $10,000 starting value $10,000 starting value $17,985 ending value $18,453 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR 10 YEAR - -------------------------------------------------------------- U.S. Government Securities IA 2.15% 5.92% 6.05% - -------------------------------------------------------------- U.S. Government Securities IB(3) 1.89% 5.66% 5.78% - -------------------------------------------------------------- Lehman Intermediate Gov't Bond Index 2.29% 6.19% 6.32% - -------------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER PETER PERROTTI Senior Vice President - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford U.S. Government Securities HLS Fund, Class IA returned 2.15% for the 12 months ended December 31, 2003. The Fund underperformed both the Lehman Brothers Intermediate Government Bond Index, which returned 2.29% and the Lipper General U.S. Government VA-UF Average, which returned 2.32% over the same period. WHY DID THE FUND PERFORM THIS WAY? The Fund benefited from Agency exposure and from being overweight to mortgages with lower coupons throughout the year. Early this year, refinancing activity hit an all time high as the mortgage market experienced the aftershock of a multi-decade low in rates, and homeowners took advantage of the drop in mortgage rates. During the second and third quarters of the year, the market witnessed significant volatility in interest rates. The mortgage market under performed comparable duration treasuries and the rise in rates slowed the pace of refinancing significantly. As rates crept back up through the quarter, the price sensitivity of the mortgage market increased significantly. Although the rise in rates slowed the rate of prepayment, the sector came under pressure as many investors sold mortgages to rebalance the price sensitivity of their portfolios. During the last quarter of the year, however, the continued drop in refinancing activity and low volatility in the movement in rates, mortgages outperformed comparable duration treasuries by almost three-quarters of 1%. With economic data showing both strong growth and low inflation, the treasury market remained range bound. The environment was very positive for spread products, as both agencies and mortgages outpaced comparable duration treasuries. WHAT IS YOUR OUTLOOK AND STRATEGY? The economy continued to improve as the fourth quarter played out. After a very strong third quarter with Gross Domestic Product growing at 8.2%, many market participants were looking for a let down in fourth quarter data. Although the growth was expected to be less than seen in the prior quarter, economic data surprised to the upside. The Institute for Supply Management Index rose to the highest level in 20 years, pointing to a pickup in the manufacturing sector. Employment also showed signs of picking up, as initial jobless claims fell to the lowest level in almost two years. Inflation continued to trend lower as the Consumer Price Index, excluding the volatile food and energy components, showed a 1.1% increase, the lowest level in thirty-seven years. The official statement from the Federal Open Market Committee said the risks to growth and inflation were balanced, but continued to reiterate that the short-term rates will remain low for a "considerable period." Although the Fed continues to comment on the excess slack in the economy, the trend is toward stronger growth. The Federal Funds Target Rate at 1% anchors short-term rates, and although the curve may steepen further, it is unlikely that longer rates will move substantially higher. With a low volatility rate environment, mortgages and other spread products will likely continue to outpace treasuries. While the mortgage market is fully priced, it continues to offer good diversification and total return potential within the overall government market. Prepayments continue to slow, increasing the overall yield of the mortgage market. The Fund will continue to maintain a significant holding in this sector. Also, the steep yield curve continues to offer excellent opportunities, but the Fund will remain with the bias to reduce price sensitivity to rising rates. 25 Hartford Value Opportunities HLS Fund inception 5/1/1996 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 5/1/96 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> VALUE OPPORTUNITIES IA RUSSELL 3000 VALUE INDEX ---------------------- ------------------------ 5/1/96 10000.00 10000.00 10129.00 10137.00 10153.00 10133.00 9670.00 9734.00 10014.00 10027.00 10479.00 10412.00 10544.00 10785.00 11114.00 11547.00 12/96 11149.00 11452.00 11532.00 11968.00 11682.00 12137.00 11265.00 11712.00 11663.00 12172.00 12334.00 12880.00 12654.00 13443.00 13334.00 14410.00 12878.00 13968.00 13492.00 14820.00 13122.00 14407.00 13693.00 14996.00 12/97 13962.00 15441.00 14062.00 15217.00 14889.00 16231.00 15484.00 17191.00 15544.00 17303.00 15213.00 17013.00 15407.00 17201.00 14860.00 16804.00 12673.00 14292.00 13196.00 15112.00 14025.00 16222.00 14832.00 16952.00 12/98 15309.00 17526.00 15533.00 17623.00 15131.00 17302.00 15553.00 17623.00 16660.00 19267.00 16265.00 19111.00 16918.00 19676.00 16403.00 19107.00 15898.00 18400.00 15219.00 17777.00 15850.00 18700.00 15904.00 18570.00 12/99 16680.00 18691.00 16009.00 18090.00 15064.00 16911.00 17405.00 18824.00 17527.00 18627.00 17776.00 18790.00 16677.00 18026.00 17072.00 18277.00 18357.00 19281.00 17909.00 19438.00 19251.00 19881.00 18618.00 19164.00 12/00 19764.00 20194.00 20669.00 20303.00 20122.00 19775.00 19137.00 19102.00 20568.00 20035.00 20579.00 20490.00 20432.00 20125.00 19883.00 20053.00 18839.00 19300.00 16742.00 17887.00 16981.00 17775.00 18264.00 18825.00 12/01 19261.00 19319.00 18754.00 19199.00 18588.00 19237.00 19212.00 20186.00 17980.00 19601.00 17556.00 19638.00 15963.00 18566.00 14586.00 16763.00 14820.00 16875.00 13039.00 15046.00 14207.00 16096.00 15360.00 17128.00 12/02 14455.00 16385.00 14126.00 15983.00 13680.00 15550.00 13697.00 15585.00 15291.00 16965.00 16498.00 18104.00 16717.00 18337.00 16939.00 18656.00 17669.00 18977.00 17651.00 18790.00 18776.00 19968.00 19401.00 20277.00 12/03 20508.00 21486.00 </Table> <Table> --- VALUE OPPORTUNITIES IA --- RUSSELL 3000 VALUE INDEX $10,000 starting value $10,000 starting value $20,508 ending value $21,486 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR SINCE INCEPTION - ---------------------------------------------------------------- Value Opportunities IA 41.87% 6.02% 9.81% - ---------------------------------------------------------------- Value Opportunities IB(3) 41.52% 5.76% 9.54% - ---------------------------------------------------------------- Russell 3000 Value Index 31.14% 4.16% 10.48% - ---------------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGEMENT TEAM JAMES H. AVERILL Senior Vice President, Partner JAMES N. MORDY Senior Vice President, Partner DAVID R. FASSNACHT, CFA Senior Vice President, Partner - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Value Opportunities HLS Fund, Class IA returned 41.87% for the 12 months ended December 31, 2003. The Fund outperformed both the Lipper Multi Cap Value VA-UF Average, which returned 31.55% and the Russell 3000 Value Index, which returned 31.14% over the same period. WHY DID THE FUND PERFORM THIS WAY? Psychology reversed this year from the extreme risk aversion prevalent in 2002 and investors regained confidence from a recovering economy and a reasonable outcome to the Iraq War. Yield spreads narrowed and the more speculative stocks led the way in terms of performance. The outperformance of smaller stocks over the last three years has significantly closed the valuation gap with large cap stocks that had built up during the latter half of the 1990s. Value stocks outperformed growth stocks during the fourth quarter, which was a shift from the pattern earlier this year. This was particularly noticeable in some of the more cyclical sectors of the market such as materials and industrials. Our significant overweight position in mid-caps and small-caps, along with our underweight in large-caps, versus the benchmark served us well during the period. The Fund outperformed its market benchmark during the period as a result of both strong stock selection and timely sector allocation. Our overweight and strong stock picking in consumer discretionary, including cable system operators Comcast Corp. (communications), homebuilders Toll Brothers, Inc. (construction) and specialty retailers Foot Locker, Inc. (retail), benefited relative performance as the sector reacted favorably to improving economic fundamentals. Strong stock selection in health care and information technology also contributed to our results. On an absolute basis, Comcast Corp. (communications), Citigroup, Inc. (banks), and Alcoa, Inc. (metals, minerals & mining) were the best performing companies in the Fund. During the period, BJ's Wholesale (retail), Abitibi-Consolidated, Inc. (forest & paper products), and Eaton Corp. (machinery) detracted the most from overall absolute performance. WHAT IS YOUR OUTLOOK AND STRATEGY? We expect stocks invested through our low P/E approach to outperform over the long term. Value stocks, particularly on the large cap side, lagged the overall market in 2003, as small cap and "growthier" equities had their day in the sun. As a result we are finding such large value companies increasingly attractive, and they are gaining a higher weighting in the portfolio. At some point, we would expect the market's frothier areas to retreat in cases where companies are unable to obtain the sales and earnings growth necessary to support their current valuations. In that kind of market we would look for better relative performance from the "solid citizens" -- large low P/E companies with good relative returns on capital and decent growth prospects. 26 HARTFORD ADVISERS HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------- ----------- COLLATERALIZED MORTGAGE OBLIGATIONS V -- 1.2% $ @43,000 AESOP Funding II LLC, Series 1998-1, Class A (Aaa Moodys) 6.14% due 05/20/06.............................. $ 45,152 18,000 Asset Securitization Corp., Series 1997-D4, Class A1D (Aaa Moodys) 7.49% due 04/14/29.............................. 20,312 17,200 Asset Securitization Corp., Series 1997-D5, Class A1E (Aa1 Moodys) 6.93% due 02/14/41.............................. 18,290 20,352 Chase Commercial Mortgage Securities Corp., Series 1997-1, Class A2 (AAA S&P) 7.37% due 02/19/07.............................. 22,264 3,400 Citibank Credit Card Issuance Trust, Series 2001-B1, Class B1 (A2 Moodys) 7.05% due 09/17/07.............................. 3,680 4,000 Citibank Credit Card Master Trust l, Series 1999-7, Class B (A2 Moodys) 6.90% due 11/15/06.............................. 4,183 17,225 Lehman Brothers Commercial Mortgage Trust, Series 1997-C1, Class A3 (Aaa Moodys) 7.38% due 04/18/07.............................. 19,175 3,000 Standard Credit Card Master Trust, Series 1995-1, Class B (A1 Moodys) 8.45% due 01/07/07.............................. 3,206 ----------- 136,262 ----------- Total collateralized mortgage obligations......... $ 136,262 =========== </Table> <Table> <Caption> SHARES - ------------- COMMON STOCKS -- 70.2% BANKS -- 9.3% 2,369 American Express Co. ............................. $ 114,242 2,993 Bank One Corp. ................................... 136,442 2,100 Bank of America Corp. ............................ 168,903 5,787 Citigroup, Inc. .................................. 280,923 1,024 Federal National Mortgage Association............. 76,884 +1,120 HSBC Holdings PLC, ADR............................ 88,255 1,339 KeyCorp. ......................................... 39,248 1,479 State Street Corp. ............................... 77,016 1,687 U.S. Bancorp...................................... 50,230 1,048 Wachovia Corp. ................................... 48,808 ----------- 1,080,951 ----------- BUSINESS SERVICES -- 0.7% *3,083 Accenture Ltd..................................... 81,147 ----------- CHEMICALS -- 1.2% 1,356 Dow Chemical Co. (The)............................ 56,349 1,869 du Pont (E.I.) de Nemours & Co. .................. 85,768 ----------- 142,117 ----------- COMMUNICATIONS -- 0.5% 4,234 Motorola, Inc. ................................... 59,575 ----------- </Table> <Table> <Caption> MARKET SHARES VALUE # - ------------- ----------- COMPUTERS & OFFICE EQUIPMENT -- 5.6% 950 3M Co. ........................................... $ 80,779 *6,828 Cisco Systems, Inc................................ 165,845 *4,197 EMC Corp.......................................... 54,221 6,232 Hewlett-Packard Co. .............................. 143,144 2,182 International Business Machines Corp. ............ 202,228 ----------- 646,217 ----------- CONSUMER DURABLES -- 0.5% 2,027 Masco Corp. ...................................... 55,557 ----------- CONSUMER NON-DURABLES -- 2.1% 588 Cardinal Health, Inc. ............................ 35,974 3,303 Gillette Co. (The)................................ 121,334 914 Procter & Gamble Co. (The)........................ 91,290 ----------- 248,598 ----------- DRUGS -- 7.9% 2,357 Abbott Laboratories............................... 109,822 *1,620 Amgen, Inc........................................ 100,122 2,336 Eli Lilly & Co. .................................. 164,277 *1,113 Genzyme Corp...................................... 54,891 1,188 Merck & Co., Inc. ................................ 54,872 9,175 Pfizer, Inc. ..................................... 324,166 2,600 Wyeth............................................. 110,370 ----------- 918,520 ----------- ELECTRONICS -- 4.8% 9,191 General Electric Co. ............................. 284,728 6,975 Intel Corp. ...................................... 224,595 1,808 Texas Instruments, Inc. .......................... 53,107 ----------- 562,430 ----------- ENERGY & SERVICES -- 4.0% 1,119 ChevronTexaco Corp. .............................. 96,636 6,482 Exxon Mobil Corp. ................................ 265,778 1,821 Schlumberger Ltd. ................................ 99,629 ----------- 462,043 ----------- FINANCIAL SERVICES -- 2.1% 827 Franklin Resources, Inc. ......................... 43,064 1,919 Merrill Lynch & Co., Inc. ........................ 112,567 1,508 Morgan Stanley Dean Witter & Co. ................. 87,256 ----------- 242,887 ----------- FOOD, BEVERAGE & TOBACCO -- 3.3% 3,192 Coca-Cola Co. (The)............................... 161,994 +1,682 General Mills, Inc. .............................. 76,172 3,093 PepsiCo, Inc. .................................... 144,205 ----------- 382,371 ----------- FOREST & PAPER PRODUCTS -- 1.1% 1,970 International Paper Co. .......................... 84,927 700 Weyerhaeuser Co. ................................. 44,800 ----------- 129,727 ----------- HEALTH SERVICES -- 0.4% 1,098 HCA, Inc. ........................................ 47,170 ----------- HOTELS & GAMING -- 0.3% 681 Marriott International, Inc., Class A............. 31,453 ----------- </Table> The accompanying notes are an integral part of this financial statement. 27 HARTFORD ADVISERS HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - ------------- ----------- COMMON STOCKS -- (CONTINUED) INSURANCE -- 3.3% 3,284 American International Group, Inc. ............... $ 217,683 2,200 Marsh & McLennan Cos., Inc. ...................... 105,358 3,737 Travelers Property Casualty Corp. -- Class B................................ 63,412 ----------- 386,453 ----------- MACHINERY -- 1.4% *1,969 Applied Materials, Inc............................ 44,211 1,398 Caterpillar, Inc. ................................ 116,045 ----------- 160,256 ----------- MEDIA & ENTERTAINMENT -- 4.8% *2,744 Comcast Corp...................................... 90,190 *6,604 Liberty Media Corp., Class A...................... 78,523 *12,300 Time Warner, Inc.................................. 221,277 2,496 Viacom, Inc., Class B............................. 110,759 2,521 Walt Disney Co. (The)............................. 58,815 ----------- 559,564 ----------- MEDICAL INSTRUMENTS & SUPPLIES -- 1.3% 1,450 Johnson & Johnson................................. 74,912 1,665 Medtronic, Inc. .................................. 80,921 ----------- 155,833 ----------- METALS, MINERALS & MINING -- 1.5% 1,790 Alcoa, Inc. ...................................... 68,020 1,259 Illinois Tool Works, Inc. ........................ 105,609 ----------- 173,629 ----------- RETAIL -- 4.0% *3,175 Costco Wholesale Corp............................. 118,035 4,458 Gap, Inc. (The)................................... 103,459 4,093 Home Depot, Inc. (The)............................ 145,275 *554 Kohl's Corp....................................... 24,874 1,894 Target Corp. ..................................... 72,714 ----------- 464,357 ----------- RUBBER & PLASTICS PRODUCTS -- 0.8% 1,300 NIKE, Inc., Class B............................... 88,998 ----------- SOFTWARE & SERVICES -- 5.3% *1,994 Computer Sciences Corp. .......................... 88,186 +1,877 First Data Corp. ................................. 77,142 11,423 Microsoft Corp. .................................. 314,595 *4,456 Oracle Corp. ..................................... 58,824 +1,828 SAP AG, ADR....................................... 75,972 ----------- 614,719 ----------- TRANSPORTATION -- 3.4% 1,248 CSX Corp. ........................................ 44,842 1,387 FedEx Corp. ...................................... 93,609 1,400 Lockheed Martin Corp. ............................ 71,960 809 Northrop Grumman Corp. ........................... 77,302 1,162 United Technologies Corp. ........................ 110,151 ----------- 397,864 ----------- UTILITIES -- 0.6% 2,250 Waste Management, Inc. ........................... 66,585 ----------- Total common stocks............................... $ 8,159,021 =========== </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ----------- CORPORATE NOTES V -- 12.0% BANKS -- 1.4% $ 20,000 Bank One Corp. (Aa3 Moodys) 6.875% due 08/01/06............................. $ 22,117 20,000 Bank of America Corp. (Aa2 Moodys) 5.875% due 02/15/09............................. 21,914 1,000 Bank of America Corp. (Aa3 Moodys) 6.20% due 02/15/06.............................. 1,081 10,000 BankBoston Corp. (A2 Moodys) 6.625% due 02/01/04............................. 10,038 14,825 Banponce Corp. (Baa1 Moodys) 6.75% due 12/15/05.............................. 16,123 25,000 Bayerische Landesbank Girozentrale (Aaa Moodys) 5.65% due 02/01/09.............................. 27,149 1,000 Citigroup, Inc. (Aa1 Moodys) 6.50% due 01/18/11.............................. 1,127 1,500 First Chicago NBD Corp. (A1 Moodys) 7.125% due 05/15/07............................. 1,692 13,685 First Union National Bank (Aa3 Moodys) 5.80% due 12/01/08.............................. 15,005 +1,000 Household Finance Corp. (A1 Moodys) 6.00% due 05/01/04.............................. 1,015 1,500 Inter-American Development Bank (Aaa Moodys) 7.375% due 01/15/10............................. 1,797 1,500 International Bank for Reconstruction & Development (Aaa Moodys) 7.00% due 01/27/05.............................. 1,590 36,745 Key Bank, N.A. (A1 Moodys) 5.80% due 04/01/04.............................. 37,137 750 KeyCorp. Capital II (A3 Moodys) 6.875% due 03/17/29............................. 786 1,500 Mellon Funding Corp. (A2 Moodys) 6.375% due 02/15/10............................. 1,670 1,000 Morgan (J.P.) Chase & Co. (A2 Moodys) 6.75% due 02/01/11.............................. 1,128 750 National City Corp. (A2 Moodys) 6.875% due 05/15/19............................. 866 500 Republic New York Capital I (A2 Moodys) 7.75% due 11/15/26.............................. 539 1,500 Salomon Smith Barney Holdings, Inc. (Aa1 Moodys) 5.875% due 03/15/06............................. 1,615 500 State Street Corp. (A1 Moodys) 7.65% due 06/15/10.............................. 598 1,000 Washington Mutual Financial Corp. (A3 Moodys) 7.25% due 06/15/06.............................. 1,112 1,000 Wells Fargo Bank N.A. (Aa1 Moodys) 6.45% due 02/01/11.............................. 1,123 ----------- 167,222 ----------- </Table> The accompanying notes are an integral part of this financial statement. 28 - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ----------- CORPORATE NOTES V -- (CONTINUED) CHEMICALS -- 0.4% $ 20,000 ICI Wilmington, Inc. (Baa3 Moodys) 6.95% due 09/15/04.............................. $ 20,624 20,000 Rohm & Haas Co. (A3 Moodys) 7.40% due 07/15/09.............................. 23,436 ----------- 44,060 ----------- COMMUNICATIONS -- 0.1% 10,000 Bellsouth Telecommunications, Inc. (Aa3 Moodys) 6.375% due 06/01/28............................. 10,435 500 GTE Corp. (A3 Moodys) 7.51% due 04/01/09.............................. 575 500 Sprint Capital Corp. (Baa3 Moodys) 6.875% due 11/15/28............................. 488 500 Sprint Capital Corp. (Baa3 Moodys) 7.625% due 01/30/11............................. 560 750 Telecommunications de Puerto Rico (Baa1 Moodys) 6.65% due 05/15/06.............................. 813 500 Verizon Global Funding Corp. (A2 Moodys) 7.25% due 12/01/10.............................. 576 500 Verizon Global Funding Corp. (A2 Moodys) 7.75% due 12/01/30.............................. 587 ----------- 14,034 ----------- COMPUTERS & OFFICE EQUIPMENT -- 0.4% 30,000 Hewlett-Packard Co. (A3 Moodys) 7.15% due 06/15/05.............................. 32,254 18,000 Pitney Bowes, Inc. (Aa3 Moodys) 5.50% due 04/15/04.............................. 18,208 ----------- 50,462 ----------- CONSUMER NON-DURABLES -- 0.7% 25,000 Boise Cascade Office Products Corp. (Ba2 Moodys) 7.05% due 05/15/05.............................. 26,043 350 Cardinal Health, Inc. (A2 Moodys) 6.75% due 02/15/11.............................. 400 18,000 Colgate-Palmolive Co. (Aa3 Moodys) 5.58% due 11/06/08.............................. 19,697 750 Procter & Gamble Co. (The) (Aa3 Moodys) 6.875% due 09/15/09............................. 866 21,100 Procter & Gamble Co. (The) (Aa3 Moodys) 9.36% due 01/01/21.............................. 28,302 750 SYSCO Corp. (A1 Moodys) 6.50% due 08/01/28.............................. 831 ----------- 76,139 ----------- CONSUMER SERVICES -- 0.4% 37,832 Postal Square LP (NA Moodys) 8.95% due 06/15/22.............................. 49,553 ----------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ----------- DRUGS -- 0.5% $ 26,000 American Home Products Corp. (Baa1 Moodys) 7.25% due 03/01/23.............................. $ 28,630 750 Bristol-Myers Squibb Co. (A1 Moodys) 6.80% due 11/15/26.............................. 836 29,000 Pharmacia Corp. (Aaa Moodys) 6.60% due 12/01/28.............................. 32,656 ----------- 62,122 ----------- EDUCATION -- 0.1% 10,900 Harvard University (Aaa Moodys) 8.125% due 04/15/07............................. 12,666 ----------- ELECTRICAL EQUIPMENT -- 0.6% 30,000 Danaher Corp. (A2 Moodys) 6.00% due 10/15/08.............................. 32,907 30,000 Rockwell International Corp. (A3 Moodys) 6.70% due 01/15/28.............................. 32,856 ----------- 65,763 ----------- ELECTRONICS -- 0.0% 500 Heller Financial, Inc. (Aaa Moodys) 6.375% due 03/15/06............................. 545 ----------- ENERGY & SERVICES -- 0.1% 12,250 Amoco Co. (Aa1 Moodys) 6.50% due 08/01/07.............................. 13,777 1,000 Conoco, Inc. (A3 Moodys) 6.95% due 04/15/29.............................. 1,134 1,000 Texaco Capital, Inc. (Aa3 Moodys) 8.625% due 06/30/10............................. 1,258 ----------- 16,169 ----------- FINANCIAL SERVICES -- 0.8% 30,000 AXA Financial, Inc. (A3 Moodys) 7.00% due 04/01/28.............................. 33,544 @16,355 ERAC USA Finance Co. (Baa1 Moodys) 7.35% due 06/15/08.............................. 18,686 1,000 Goldman Sachs Group, Inc. (The) (Aa3 Moodys) 6.65% due 05/15/09.............................. 1,131 750 Morgan Stanley Dean Witter & Co. (Aa3 Moodys) 7.75% due 06/15/05.............................. 814 @1,250 Prudential Insurance Co. of America (A2 Moodys) 6.375% due 07/26/06............................. 1,362 30,000 Toyota Motor Credit Corp. (Aaa Moodys) 5.50% due 12/15/08.............................. 32,830 ----------- 88,367 ----------- </Table> The accompanying notes are an integral part of this financial statement. 29 HARTFORD ADVISERS HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ----------- CORPORATE NOTES V -- (CONTINUED) FOOD, BEVERAGE & TOBACCO -- 0.9% $ 750 Anheuser Busch Cos., Inc. (A1 Moodys) 7.55% due 10/01/30.............................. $ 926 30,000 Coca-Cola Enterprises, Inc. (A2 Moodys) 6.75% due 09/15/28.............................. 33,458 500 Coca-Cola Enterprises, Inc. (A2 Moodys) 8.50% due 02/01/22.............................. 647 19,555 ConAgra Foods, Inc. (Baa1 Moodys) 7.875% due 09/15/10............................. 23,332 1,500 Pepsi Bottling Group, Inc. (The) (A3 Moodys) 7.00% due 03/01/29.............................. 1,719 35,000 PepsiAmericas, Inc. (Baa1 Moodys) 6.375% due 05/01/09............................. 38,981 ----------- 99,063 ----------- INSURANCE -- 1.9% 20,000 ACE INA Holdings, Inc. (A3 Moodys) 8.30% due 08/15/06.............................. 22,626 26,485 AmerUs Group Co. (Baa3 Moodys) 6.95% due 06/15/05.............................. 27,819 500 American General Co. (Aaa Moodys) 6.625% due 02/15/29............................. 542 30,000 Cincinnati Financial Corp. (A2 Moodys) 6.90% due 05/15/28.............................. 32,723 @27,000 Jackson National Life Insurance Co. (A3 Moodys) 8.15% due 03/15/27.............................. 31,636 @30,000 Liberty Mutual Insurance (Baa2 Moodys) 8.20% due 05/04/07.............................. 32,863 @30,000 New England Mutual Life Insurance Co. (A1 Moodys) 7.875% due 02/15/24............................. 34,843 1,000 Reliastar Financial Corp. (A1 Moodys) 8.00% due 10/30/06.............................. 1,130 27,600 Torchmark Corp. (A3 Moodys) 8.25% due 08/15/09.............................. 31,992 ----------- 216,174 ----------- MACHINERY -- 0.2% 20,000 Eaton Corp. (A2 Moodys) 6.95% due 11/15/04.............................. 20,896 ----------- MEDIA & ENTERTAINMENT -- 0.7% 30,000 Comcast Cable Communications (Baa3 Moodys) 6.875% due 06/15/09............................. 33,820 1,000 Comcast Cable Communications (Baa3 Moodys) 8.50% due 05/01/27.............................. 1,281 10,400 Times Mirror Co. (The), Class A (A3 Moodys) 7.50% due 07/01/23.............................. 11,802 +35,000 Walt Disney Co. (The) (Baa1 Moodys) 6.375% due 03/01/12............................. 38,486 ----------- 85,389 ----------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ----------- MEDICAL INSTRUMENTS & SUPPLIES -- 0.2% $ +22,000 Becton, Dickinson & Co. (A2 Moodys) 6.70% due 08/01/28.............................. $ 24,482 ----------- REAL ESTATE INVESTMENT TRUST -- 0.2% 20,000 Liberty Property Trust (Baa2 Moodys) 7.25% due 08/15/07.............................. 22,399 ----------- RETAIL -- 0.9% 20,000 Albertson's, Inc. (Baa2 Moodys) 6.55% due 08/01/04.............................. 20,474 30,000 Home Depot, Inc. (The) (Aa3 Moodys) 6.50% due 09/15/04.............................. 31,078 20,200 Target Corp. (A2 Moodys) 5.875% due 11/01/08............................. 22,126 30,000 Wal-Mart Stores, Inc. (Aa2 Moodys) 6.875% due 08/10/09............................. 34,561 ----------- 108,239 ----------- TRANSPORTATION -- 0.2% +500 Boeing Capital Corp. (A3 Moodys) 6.10% due 03/01/11.............................. 540 19,972 Continental Airlines, Inc. (Baa3 Moodys) 6.90% due 01/02/18.............................. 19,713 1,000 DaimlerChrysler North America Holding Corp. (A3 Moodys) 7.40% due 01/20/05.............................. 1,054 750 DaimlerChrysler North America Holding Corp. (A3 Moodys) 7.75% due 01/18/11.............................. 858 500 Ford Motor Co. (Baa1 Moodys) 6.375% due 02/01/29............................. 446 1,250 General Motors Acceptance Corp. (A3 Moodys) 6.15% due 04/05/07.............................. 1,340 1,000 Textron Financial Corp. (A3 Moodys) 7.125% due 12/09/04............................. 1,045 ----------- 24,996 ----------- U.S. GOVERNMENT AGENCIES -- 0.5% 50,000 Tennessee Valley Authority (Aaa Moodys) 6.00% due 03/15/13.............................. 54,908 ----------- UTILITIES -- 0.8% 25,000 Alabama Power Co. (A2 Moodys) 7.125% due 08/15/04............................. 25,881 1,000 Alabama Power Co. (A2 Moodys) 7.125% due 10/01/07............................. 1,137 40,000 Great Plains Energy, Inc. (A3 Moodys) 7.125% due 12/15/05............................. 43,570 567 Niagara Mohawk Power Corp. (Baa3 Moodys) 7.625% due 10/01/05............................. 615 17,285 Northern Border Pipeline Co. (A3 Moodys) 7.75% due 09/01/09.............................. 20,482 ----------- 91,685 ----------- Total corporate notes............................. $ 1,395,333 =========== </Table> The accompanying notes are an integral part of this financial statement. 30 - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ----------- FOREIGN/YANKEE BONDS & NOTES V -- 0.7% BANKS -- 0.2% $ 24,000 Credit National (A1 Moodys) 7.00% due 11/14/05.............................. $ 25,948 ----------- COMMUNICATIONS -- 0.0% 1,250 Telefonica Europe BV (A3 Moodys) 7.35% due 09/15/05.............................. 1,356 1,250 Vodafone Group PLC (A2 Moodys) 7.875% due 02/15/30............................. 1,536 ----------- 2,892 ----------- FINANCIAL SERVICES -- 0.0% 500 Korea Development Bank (A3 Moodys) 7.125% due 04/22/04............................. 505 1,250 Santandar Central Hispano Issuances Ltd. (A1 Moodys) 7.625% due 11/03/09............................. 1,470 ----------- 1,975 ----------- METALS, MINERALS & MINING -- 0.3% 30,000 Alcan, Inc. (Baa1 Moodys) 7.25% due 11/01/28.............................. 34,464 ----------- TRANSPORTATION -- 0.2% @17,639 SCL Terminal Aereo Santiago S.A. (Aaa Moodys) 6.95% due 07/01/12.............................. 19,149 ----------- UTILITIES -- 0.0% 750 TransCanada PipeLines Ltd. (A2 Moodys) 6.49% due 01/21/09.............................. 834 ----------- Total foreign/yankee bonds & notes................ $ 85,262 =========== U.S. TREASURIES & FEDERAL AGENCIES -- 15.1% FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 0.0% $ 673 6.30% due 04/01/08................................ $ 736 3 9.00% due 03/01/21................................ 3 ----------- 739 ----------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 2.0% 74,608 5.50% due 10/15/33................................ 75,928 57,573 6.00% due 06/15/24 -- 11/15/33.................... 59,905 12,141 6.50% due 03/15/26 -- 06/15/28.................... 12,820 69,540 7.00% due 06/15/26 -- 11/15/32.................... 74,140 346 7.50% due 09/15/23................................ 373 10,024 8.00% due 09/15/26 -- 02/15/31.................... 10,907 362 9.00% due 06/20/16 -- 01/15/23.................... 404 16 9.50% due 05/15/20................................ 17 ----------- 234,494 ----------- U.S. TREASURY BONDS -- 3.9% +400,000 6.25% due 08/15/23................................ 455,922 ----------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ----------- U.S. TREASURY NOTES -- 9.2% $ +650,000 1.625% due 09/30/05 -- 10/31/05................... $ 649,402 +200,000 2.375% due 08/15/06............................... 201,078 +200,000 3.25% due 08/15/08................................ 201,219 +10,000 6.00% due 08/15/04................................ 10,302 ----------- 1,062,001 ----------- Total U.S. treasuries & federal agencies.......... $ 1,753,156 =========== <Caption> SHARES - ---------- WARRANTS -- 0.0% COMMUNICATIONS -- 0.0% *@@-- Minorplanet System USA, Inc. ..................... $ -- ----------- Total warrants.................................... $ -- =========== SHORT-TERM SECURITIES -- 14.3% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 13.9% 1,620,168 State Street Navigator Securities Lending Prime Portfolio....................................... $ 1,620,168 <Caption> PRINCIPAL AMOUNT - ---------- REPURCHASE AGREEMENTS -- 0.4% $ 46,935 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04............................. 46,935 ----------- Total short-term securities....................... $ 1,667,103 =========== </Table> <Table> <Caption> DIVERSIFICATION OF NET ASSETS: Total collateralized mortgage obligations (cost $126,243)......................... 1.2% $ 136,262 Total common stocks (cost $7,163,600)..... 70.2 8,159,021 Total corporate notes (cost $1,285,306)... 12.0 1,395,333 Total foreign/yankee bonds & notes (cost $76,027)................................ 0.7 85,262 Total warrants (cost $5).................. 0.0 -- Total U.S. treasuries & federal agencies (cost $1,709,086)....................... 15.1 1,753,156 Total short-term securities (cost $1,667,103)............................. 14.3 1,667,103 ----- ----------- Total investment in securities (total cost $12,027,370) -- including $1,587,694 of securities loaned (See Note 2(i)).............................. 113.5 13,196,137 Cash, receivables and other assets........ 0.4 51,250 Payable for Fund shares redeemed.......... (0.0) (4,549) Securities lending collateral payable to brokers (See Note 2(i))................. (13.9) (1,620,168) Other liabilities......................... (0.0) (580) ----- ----------- Net assets................................ 100.0% $11,622,090 ===== =========== </Table> The accompanying notes are an integral part of this financial statement. 31 HARTFORD ADVISERS HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET VALUE # ------------ SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 9,500,000 shares authorized; 512,286 shares outstanding................................... $ 512 Paid in capital................................. 11,270,027 Accumulated net investment income............... 104,776 Accumulated net realized loss on investments.... (921,992) Unrealized appreciation on investments.......... 1,168,767 ------------ Net assets...................................... $ 11,622,090 ============ </Table> <Table> <Caption> Class IA Net asset value per share ($10,358,449 / 456,882 shares outstanding) (8,500,000 shares authorized)...................................... $22.67 ====== Class IB Net asset value per share ($1,263,641 / 55,404 shares outstanding) (1,000,000 shares authorized)...................................... $22.81 ====== </Table> <Table> <Caption> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 2.1% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). @ Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2003, the market value of these securities amounted to $183,691 or 1.6% of net assets (See Note 2(m)). @@ Due to the presentation of the financial statements in thousands, the number of shares and/or market value round to zero. V The bond ratings are unaudited. </Table> The accompanying notes are an integral part of this financial statement. 32 HARTFORD BLUE CHIP STOCK HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - ----------- -------- COMMON STOCKS -- 99.2% BANKS -- 14.0% 29 American Express Co. ............................. $ 1,379 23 Bank of America Corp. ............................ 1,826 27 Bank of New York Co., Inc. (The).................. 884 151 Citigroup, Inc. .................................. 7,347 8 Federal Home Loan Mortgage Association............ 455 33 Federal National Mortgage Association............. 2,477 61 Mellon Financial Corp. ........................... 1,946 28 Northern Trust Corp. ............................. 1,318 40 SLM Corp. ........................................ 1,519 53 State Street Corp. ............................... 2,745 63 U.S. Bancorp...................................... 1,888 30 Wells Fargo Co. .................................. 1,778 -------- 25,562 -------- BUSINESS SERVICES -- 1.8% *36 Accenture Ltd. ................................... 955 *36 Cendant Corp. .................................... 811 13 Omnicom Group, Inc. ............................. 1,127 10 Paychex, Inc. .................................... 379 -------- 3,272 -------- COMMUNICATIONS -- 4.3% *1 NTL, Inc. ........................................ 91 *95 Nextel Communications, Inc., Class A.............. 2,671 42 Nokia Corp., ADR.................................. 707 9 QUALCOMM, Inc. ................................... 475 *1 Research in Motion Ltd. .......................... 67 154 Vodafone Group PLC, ADR........................... 3,849 -------- 7,860 -------- COMPUTERS & OFFICE EQUIPMENT -- 5.5% 5 3M Co. ........................................... 425 *170 Cisco Systems, Inc. .............................. 4,127 *74 Dell, Inc. ....................................... 2,523 *3 EMC Corp. ........................................ 35 3 International Business Machines Corp. ............ 241 50 International Game Technology..................... 1,796 *12 Lexmark International, Inc. ...................... 959 -------- 10,106 -------- CONSUMER NON-DURABLES -- 3.3% 8 Cardinal Health, Inc. ............................ 477 10 Estee Lauder Cos., Inc. (The), Class A............ 397 14 Gillette Co. (The)................................ 518 *10 Medco Health Solutions, Inc. ..................... 347 5 Procter & Gamble Co. (The)........................ 489 32 SYSCO Corp. ...................................... 1,176 101 Tyco International Ltd. .......................... 2,681 -------- 6,085 -------- DRUGS -- 9.3% 31 Abbott Laboratories............................... 1,426 *39 Amgen, Inc. ...................................... 2,423 16 Eli Lilly & Co. .................................. 1,097 *29 Forest Laboratories, Inc. ........................ 1,774 *7 Genentech, Inc. .................................. 646 </Table> <Table> <Caption> MARKET SHARES VALUE # - ----------- -------- DRUGS -- (CONTINUED) *20 Gilead Sciences, Inc. ............................ $ 1,145 *10 MedImmune, Inc. .................................. 264 194 Pfizer, Inc. ..................................... 6,870 3 Teva Pharmaceutical Industries Ltd., ADR.......... 187 26 Wyeth............................................. 1,104 -------- 16,936 -------- EDUCATION -- 1.1% *31 Apollo Group, Inc. ............................... 2,088 -------- ELECTRICAL EQUIPMENT -- 1.8% 36 Danaher Corp. .................................... 3,303 -------- ELECTRONICS -- 7.0% *17 ASM Lithography Holding N.V., NY Reg Shares....... 331 41 Analog Devices, Inc. ............................. 1,849 103 General Electric Co. ............................. 3,203 63 Intel Corp. ...................................... 2,041 47 Maxim Integrated Products, Inc. .................. 2,351 15 Microchip Technology, Inc. ....................... 497 *10 QLogic Corp. ..................................... 537 40 Texas Instruments, Inc. .......................... 1,175 *19 Xilinx, Inc. ..................................... 752 -------- 12,736 -------- ENERGY & SERVICES -- 1.4% *21 BJ Services Co. .................................. 740 34 Schlumberger Ltd. ................................ 1,866 -------- 2,606 -------- FINANCIAL SERVICES -- 4.9% 69 Charles Schwab Corp. (The)........................ 812 22 Franklin Resources, Inc. ......................... 1,145 17 Goldman Sachs Group, Inc. (The)................... 1,678 12 Legg Mason, Inc. ................................. 911 41 Merrill Lynch & Co., Inc. ........................ 2,416 35 Morgan Stanley Dean Witter & Co. ................. 1,997 -------- 8,959 -------- FOOD, BEVERAGE & TOBACCO -- 2.5% 19 Altria Group, Inc. ............................... 1,012 42 Coca-Cola Co. (The)............................... 2,126 3 General Mills, Inc. .............................. 118 29 PepsiCo, Inc. .................................... 1,366 -------- 4,622 -------- HOTELS & GAMING -- 0.2% 9 MGM Mirage, Inc. ................................. 342 -------- INSURANCE -- 8.3% 1 Ambac Financial Group, Inc. ...................... 90 59 American International Group, Inc. ............... 3,930 *3 Anthem, Inc. ..................................... 203 33 Marsh & McLennan Cos., Inc. ...................... 1,590 71 Travelers Property Casualty Corp. -- Class A...... 1,198 </Table> The accompanying notes are an integral part of this financial statement. 33 HARTFORD BLUE CHIP STOCK HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - ----------- -------- COMMON STOCKS -- (CONTINUED) INSURANCE -- (CONTINUED) 100 UnitedHealth Group, Inc. ......................... $ 5,841 *24 Wellpoint Health Networks, Inc. .................. 2,328 -------- 15,180 -------- MACHINERY -- 2.5% *56 Applied Materials, Inc. .......................... 1,266 45 Baker Hughes, Inc. ............................... 1,460 11 Deere (John) & Co. ............................... 722 *29 Smith International, Inc. ........................ 1,183 -------- 4,631 -------- MEDIA & ENTERTAINMENT -- 8.5% 55 Clear Channel Communications, Inc. ............... 2,590 *66 Comcast Corp., Special Class A ................... 2,055 *41 EchoStar Communications Corp., Class A............ 1,391 *40 Interactive Data Corp. ........................... 1,344 13 Scripps (E.W.) Co. (The), Class A................. 1,252 *87 Time Warner, Inc. ................................ 1,567 *40 Univision Communications, Inc. ................... 1,584 69 Viacom, Inc., Class B............................. 3,055 26 Walt Disney Co. (The)............................. 597 @@-- Washington Post................................... 81 -------- 15,516 -------- MEDICAL INSTRUMENTS & SUPPLIES -- 2.9% *27 Boston Scientific Corp. .......................... 993 4 Guidant Corp. .................................... 247 38 Johnson & Johnson................................. 1,979 32 Medtronic, Inc. .................................. 1,546 6 Stryker Corp. .................................... 493 -------- 5,258 -------- METALS, MINERALS & MINING -- 0.8% 19 Alcoa, Inc. ...................................... 733 -28 Broken Hill Proprietary Co., Ltd. ................ 253 3 Illinois Tool Works, Inc. ........................ 277 4 Nucor Corp. ...................................... 230 -------- 1,493 -------- RETAIL -- 6.3% 1 Aramark Corp. .................................... 36 23 Best Buy Co., Inc. ............................... 1,194 *15 eBay, Inc. ....................................... 995 1 Family Dollar Stores, Inc. ....................... 47 78 Home Depot, Inc. (The)............................ 2,779 26 McDonald's Corp. ................................. 648 *28 Starbucks Corp. .................................. 926 3 TJX Cos., Inc. (The).............................. 57 58 Target Corp. ..................................... 2,216 42 Wal-Mart Stores, Inc. ............................ 2,212 8 Walgreen Co. ..................................... 302 -------- 11,412 -------- </Table> <Table> <Caption> MARKET SHARES VALUE # - ----------- -------- SOFTWARE & SERVICES -- 9.4% 19 Adobe Systems, Inc. .............................. $ 735 *25 Affiliated Computer Services, Inc., Class A....... 1,372 *10 Choicepoint, Inc. ................................ 377 64 First Data Corp. ................................. 2,626 *27 Fiserv, Inc. ..................................... 1,059 *34 Intuit, Inc. ..................................... 1,783 208 Microsoft Corp. .................................. 5,723 *3 Oracle Corp. ..................................... 34 *32 Siebel Systems, Inc. ............................. 448 *17 SunGard Data Systems, Inc. ....................... 479 *21 Symantec Corp. ................................... 738 *5 Synopsys, Inc. ................................... 172 *11 VERITAS Software Corp. ........................... 392 *29 Yahoo!, Inc. ..................................... 1,301 -------- 17,239 -------- TRANSPORTATION -- 3.2% 40 Carnival Corp. ................................... 1,567 7 General Dynamics Corp. ........................... 597 38 Harley-Davidson, Inc. ............................ 1,797 3 Honeywell International, Inc. .................... 84 10 Lockheed Martin Corp. ............................ 488 17 United Parcel Service, Inc. ...................... 1,245 -------- 5,778 -------- UTILITIES -- 0.2% 5 Waste Management, Inc. ........................... 154 -------- Total common stocks............................... $181,138 ======== SHORT-TERM SECURITIES -- 0.7% INVESTMENT COMPANIES -- 0.7% 123 SSgA Money Market Fund............................ $ 123 1,238 T Rowe Reserve Fund............................... 1,238 -------- 1,361 -------- Total short-term securities....................... $ 1,361 ======== </Table> <Table> DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $161,650)............... 99.2% $181,138 Total short-term securities (cost $1,361)......... 0.7 1,361 ----- -------- Total investment in securities (total cost $163,011)....................................... 99.9 182,499 Cash, receivables and other assets................ 0.3 633 Payable for securities purchased.................. (0.2) (554) Payable for fund shares redeemed.................. (0.0) (34) Other liabilities................................. (0.0) (14) ----- -------- Net assets........................................ 100.0% $182,530 ===== ======== </Table> The accompanying notes are an integral part of this financial statement. 34 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET VALUE # -------- SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 500,000 shares authorized; 11,118 shares outstanding..................... $ 11 Paid in capital............................................. 194,168 Accumulated net investment income........................... 343 Accumulated net realized loss on investments................ (31,480) Unrealized appreciation on investments...................... 19,488 -------- Net assets.................................................. $182,530 ======== </Table> <Table> Class IA Net asset value per share ($182,530 / 11,118 shares outstanding) (500,000 shares authorized)................................... $16.42 ====== </Table> <Table> & Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 3.0% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. - Security valued in good faith at fair value by, or under the direction of, the Funds' Board of Directors. The aggregate value of these securities as of December 31, 2003 was $253, which represents 0.1% of total net assets. @@ Due to the presentation of the financial statements in thousands, the number of shares and/or market value round to zero. </Table> The accompanying notes are an integral part of this financial statement. 35 HARTFORD BOND HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- COLLATERALIZED MORTGAGE OBLIGATIONS V -- 7.6% $ @2,509 AQ Finance CEB Trust, Series 2003-CE1A, Class Note (Baa2 Moodys) 6.141% due 08/25/33............................. $ 2,457 10,200 American Express Credit Account Master, Series 1999-2, Class A (Aaa Moodys) 5.95% due 12/15/06.............................. 10,379 4,200 Bank One Issuance Trust, Series 2003-C3, Class C3 (Baa2 Moodys) 4.77% due 02/16/16.............................. 3,985 10,000 Bear Stearns Commercial Mortgage Securities, Inc., Series 2003-T10, Class A2 (AAA S&P) 4.74% due 03/13/40.............................. 9,994 10,000 Bear Stearns Commercial Mortgage Securities, Inc., Series 2002-TOP8, Class A2 (AAA S&P) 4.83% due 08/15/38.............................. 10,104 2,958 Bear Stearns Commercial Mortgage Securities, Inc., Series 2003-T12, Class A1 (AAA S&P) 2.96% due 08/13/39.............................. 2,935 4,847 CS First Boston Mortgage Securities Corp., Series 2003-C3, Class A1 (Aaa Moodys) 2.079% due 05/15/38............................. 4,756 7,608 California Infrastructure Pacific Gas & Electric, Series 1997-1, Class A7 (Aaa Moodys) 6.38% due 09/25/08.............................. 8,103 4,000 California Infrastructure Pacific Gas & Electric, Series 1997-1, Class A8 (Aaa Moodys) 6.48% due 12/26/09.............................. 4,442 5,040 Capital One Multi Asset Execution, Series 2003-B2, Class B2 (A2 Moodys) 3.50% due 02/17/09.............................. 5,068 3,360 Citibank Credit Card Issuance Trust, Series 2003-C4, Class C4 (Baa2 Moodys) 5.00% due 06/10/15.............................. 3,230 16,150 Citibank Credit Card Master Trust I, Series 1999-1, Class A (Aaa Moodys) 5.50% due 02/15/06.............................. 16,235 5,441 Comed Transitional Funding Trust, Series 1998-1, Class A5 (Aaa Moodys) 5.44% due 03/25/07.............................. 5,602 16,645 Daimler Chrysler Auto Trust, Series 2002-A, Class A3 (Aaa Moodys) 3.85% due 04/06/06.............................. 16,833 8,920 Discover Card Master Trust I, Series 2001-5, Class A (Aaa Moodys) 5.30% due 11/16/06.............................. 9,050 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- $ 8,350 Ford Credit Auto Owner Trust, Series 2003-A, Class C (Baa2 Moodys) 4.29% due 11/15/07.............................. $ 8,383 15,000 GMAC Commercial Mortgage Securities Inc., Series 2003-C3, Class A1 (Aaa Moodys) 3.40% due 04/10/40.............................. 15,096 13,250 Honda Auto Receivables Owner Trust, Series 2003-2, Class A2 (Aaa Moodys) 1.34% due 12/21/05.............................. 13,255 6,541 Illinois Power Special Purpose Trust, Series 1998-1, Class A5 (Aaa Moodys) 5.38% due 06/25/07.............................. 6,747 10,792 LB-UBS Commercial Mortgage Trust, Series 2003-C1, Class A1 (Aaa Moodys) 2.72% due 04/15/33.............................. 10,764 10,821 LB-UBS Commercial Mortgage Trust, Series 2003-C7, Class A1 (Aaa Moodys) 3.334% due 09/15/27............................. 10,858 1,749 Morgan Stanley Capital I, Series 1999-WF1, Class A1 (Aaa Moodys) 5.91% due 04/15/08.............................. 1,860 5,475 Morgan Stanley Dean Witter Capital I, Series 2001-IQA, Class A1 (Aaa Moodys) 4.57% due 12/18/32.............................. 5,665 10,000 Morgan Stanley Dean Witter Capital I, Series 2003-TOP9, Class A2 (Aaa Moodys) 4.74% due 11/13/36.............................. 10,018 765 PP&L Transition Bond Co., LLC, Series 1999-1, Class A5 (Aaa Moodys) 6.83% due 03/25/07.............................. 793 1,680 Soundview Home Equity Loan Trust, Series 2000-1, Class M1 (Aa2 Moodys) 8.64% due 05/25/30.............................. 1,747 22,250 Volkswagen Auto Loan Enhanced Trust, Series 2003-1, Class A2 (Aaa Moodys) 1.11% due 12/20/05.............................. 22,228 10,080 WFS Financial Owner Trust, Series 2003-2, Class A4 (Aaa Moodys) 2.41% due 12/20/08.............................. 9,992 @2,968 Whole Auto Loan Trust, Series 2002-1, Class D (Ba2 Moodys) 6.00% due 04/15/09.............................. 2,964 ---------- 233,543 ---------- Total collateralized mortgage obligations......... $ 233,543 ========== </Table> The accompanying notes are an integral part of this financial statement. 36 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - ---------- ---------- COMMON STOCKS -- 0.4% COMMUNICATIONS -- 0.4% *##66 Global Crossing Ltd............................... $ 2,236 *565 Marconi Corp., PLC, ADR........................... 11,435 13,671 ---------- Total common stocks............................... $ 13,671 ========== <Caption> PRINCIPAL AMOUNT - ---------- CONVERTIBLE BONDS V -- 0.3% SOFTWARE & SERVICES -- 0.3% $ 12,590 America Online, Inc. (Baa2 Moodys) 0.00% due 12/06/19.............................. $ 7,884 ---------- Total convertible bonds........................... $ 7,884 ========== CORPORATE NOTES V -- 26.1% APPAREL & TEXTILE -- 0.1% $ 1,600 Nine West Group, Inc. (Baa2 Moodys) 8.375% due 08/15/05............................. $ 1,733 ---------- BANKS -- 2.5% 12,000 Ford Motor Credit Co. (A3 Moodys) 7.00% due 10/01/13.............................. 12,656 7,000 Ford Motor Credit Co. (A3 Moodys) 7.375% due 02/01/11............................. 7,630 17,430 KFW International Finance, Inc. (Aaa Moodys) 3.00% due 09/15/05.............................. 17,623 8,450 Morgan (J.P.) Chase & Co. (A2 Moodys) 5.25% due 05/01/15.............................. 8,423 7,550 Morgan (J.P.) Chase & Co. (A2 Moodys) 7.875% due 06/15/10............................. 8,991 @11,300 Rabobank Capital Fund II (Aa2 Moodys) 5.26% due 12/31/49.............................. 11,316 3,980 Sovereign Bank (Baa3 Moodys) 5.125% due 03/15/13............................. 3,952 500 St Paul Bancorp, Inc. (A3 Moodys) 7.125% due 02/15/04............................. 503 3,780 Wachovia Corp. (Aa3 Moodys) 7.55% due 08/18/05.............................. 4,121 ---------- 75,215 ---------- BUSINESS SERVICES -- 0.0% 500 Interpool, Inc. (Caa1 Moodys) 7.20% due 08/01/07.............................. 478 ---------- CHEMICALS -- 0.3% 3,025 Millennium America, Inc. (B1 Moodys) 7.625% due 11/15/26............................. 2,813 2,735 Olin Corp. (Baa3 Moodys) 9.125% due 12/15/11............................. 3,325 ##1,700 Pollyone Corp. (B3 Moodys) 6.875% due 12/01/04............................. 1,679 ---------- 7,817 ---------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- COMMUNICATIONS -- 1.3% $ 4,689 AT&T Corp. (Baa2 Moodys) 8.75% due 11/15/31.............................. $ 5,479 @1,700 AT&T Corp. (Baa2 Moodys) 8.75% due 11/15/31.............................. 1,987 12,600 AT&T Wireless Services, Inc. (Baa2 Moodys) 8.125% due 05/01/12............................. 14,817 +3,050 Lucent Technologies, Inc. (Caa1 Moodys) 6.45% due 03/15/29.............................. 2,398 +2,510 Lucent Technologies, Inc. (Caa1 Moodys) 6.50% due 01/15/28.............................. 1,964 @@L300 Nextlink Escrow (Default) 0.00% due 12/01/09...... -- @@L600 Nextlink Escrow (Default) 0.00% due 12/01/09...... -- 1,235 PanAmSat Corp. (Ba2 Moodys) 6.375% due 01/15/08............................. 1,281 +7,765 Qwest Corp. (Ba3 Moodys) 6.875% due 09/15/33............................. 7,377 ##@@-- Voicestream Wireless Corp. (Ba3 Moodys) 10.375% due 11/15/09............................ -- @@17 Voicestream Wireless Corp. (Not Rated) 0.00% due 11/15/09........................................ -- L12,591 WorldCom, Inc. (Default) 8.25% due 05/15/31....... 4,218 ---------- 39,521 ---------- COMPUTERS & OFFICE EQUIPMENT -- 0.4% 7,650 International Game Technology (Baa3 Moodys) 7.875% due 05/15/04............................. 7,809 2,700 International Game Technology (Baa3 Moodys) 8.375% due 05/15/09............................. 3,232 ---------- 11,041 ---------- CONSTRUCTION -- 0.5% 7,800 CRH America, Inc. (Baa1 Moodys) 6.95% due 03/15/12.............................. 8,800 1,500 Chesapeake & Potomac Telephone Co. (Aa3 Moodys) 8.30% due 08/01/31.............................. 1,884 3,500 Toll Corp. (Ba2 Moodys) 8.25% due 02/01/11.............................. 3,850 ---------- 14,534 ---------- CONSUMER DURABLES -- 0.3% 3,105 Corning, Inc. (Ba2 Moodys) 8.30% due 04/04/25.............................. 3,190 6,250 Owens-Brockway (B1 Moodys) 8.75% due 11/15/12.............................. 6,961 ---------- 10,151 ---------- CONSUMER NON-DURABLES -- 0.2% 6,545 Xerox Corp. (B1 Moodys) 9.75% due 01/15/09.............................. 7,658 ---------- </Table> The accompanying notes are an integral part of this financial statement. 37 HARTFORD BOND HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- CORPORATE NOTES V -- (CONTINUED) DRUGS -- 0.3% $ 8,470 Wyeth (Baa1 Moodys) 6.45% due 02/01/24.............................. $ 8,680 ELECTRICAL EQUIPMENT -- 0.7% 8,125 PerkinElmer, Inc. (Ba3 Moodys) 8.875% due 01/15/13............................. 9,303 8,230 Rockwell International Corp. (A3 Moodys) 5.20% due 01/15/98.............................. 6,508 +6,000 Rockwell International Corp. (A3 Moodys) 6.70% due 01/15/28.............................. 6,571 ---------- 22,382 ---------- ENERGY & SERVICES -- 1.6% 9,050 Anadarko Petroleum Corp. (Baa1 Moodys) 5.375% due 03/01/07............................. 9,675 7,935 Conoco, Inc. (A3 Moodys) 5.90% due 04/15/04.............................. 8,036 +7,300 El Paso CGP Co. (Caa1 Moodys) 7.625% due 09/01/08............................. 7,017 5,000 Lasmo, Inc. (A1 Moodys) 7.50% due 06/30/06.............................. 5,585 6,800 Occidental Petroleum Corp. (Baa1 Moodys) 7.375% due 11/15/08............................. 7,844 6,000 Pioneer Natural Resources Co. (Ba1 Moodys) 7.20% due 01/15/28.............................. 6,423 250 Pioneer Natural Resources Co. (Ba1 Moodys) 9.625% due 04/01/10............................. 311 2,500 Union Oil Co. of California (Baa2 Moodys) 9.375% due 02/15/11............................. 3,101 ---------- 47,992 ---------- FINANCIAL SERVICES -- 1.4% 9,035 AvalonBay Communities, Inc. (Baa1 Moodys) 8.25% due 07/15/08.............................. 10,624 6,900 Bear Stearns Cos., Inc. (The) (A1 Moodys) 5.70% due 11/15/14.............................. 7,192 6,300 Credit Suisse First Boston USA, Inc. (Aa3 Moodys) 6.125% due 11/15/11............................. 6,859 3,800 Duke Realty LP (Baa1 Moodys) 5.25% due 01/15/10.............................. 3,972 @2,885 ERAC USA Finance Co. (Baa1 Moodys) 8.25% due 05/01/05.............................. 3,112 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- FINANCIAL SERVICES -- (CONTINUED) $ 5,700 ERP Operating LP (Baa1 Moodys) 6.63% due 04/13/05.............................. $ 6,040 4,150 Goldman Sachs Group, Inc. (The) (Aa3 Moodys) 5.25% due 04/01/13.............................. 4,203 ---------- 42,002 ---------- FOOD, BEVERAGE & TOBACCO -- 1.2% 10,110 ConAgra Foods, Inc. (Baa1 Moodys) 7.50% due 09/15/05.............................. 10,984 3,750 ConAgra Foods, Inc. (Baa1 Moodys) 7.00% due 10/01/28.............................. 4,121 7,500 Delhaize America, Inc. (Ba1 Moodys) 8.125% due 04/15/11............................. 8,625 12,100 General Mills, Inc. (Baa2 Moodys) 2.625% due 10/24/06............................. 12,034 ---------- 35,764 ---------- FOREST & PAPER PRODUCTS -- 1.0% 1,895 Champion International Corp. (Baa2 Moodys) 7.20% due 11/01/26.............................. 2,158 3,005 Georgia-Pacific Corp. (Ba3 Moodys) 7.25% due 06/01/28.............................. 2,881 5,600 International Paper Co. (Baa2 Moodys) 6.875% due 04/15/29............................. 5,945 12,100 Potlatch Corp. (Baa3 Moodys) 12.50% due 12/01/09............................. 14,520 4,200 Willamette Industries, Inc. (Baa2 Moodys) 7.85% due 07/01/26.............................. 4,744 ---------- 30,248 ---------- HEALTH SERVICES -- 0.7% 12,000 HCA, Inc. (Ba1 Moodys) 6.95% due 05/01/12.............................. 12,867 6,540 Manor Care, Inc. (Ba1 Moodys) 7.50% due 06/15/06.............................. 7,096 2,110 Tenet Healthcare Corp. (B1 Moodys) 6.375% due 12/01/11............................. 2,026 ---------- 21,989 ---------- INSURANCE -- 0.7% 3,800 ACE INA Holdings, Inc. (A3 Moodys) 8.20% due 08/15/04.............................. 3,948 700 Aetna, Inc. (Baa2 Moodys) 7.375% due 03/01/06............................. 770 5,400 Humana, Inc. (Baa3 Moodys) 7.25% due 08/01/06.............................. 5,900 @3,500 Prudential Insurance Co. of America (A2 Moodys) 6.375% due 07/26/06............................. 3,813 </Table> The accompanying notes are an integral part of this financial statement. 38 - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- CORPORATE NOTES V -- (CONTINUED) INSURANCE -- (CONTINUED) $ 500 Reliastar Financial Corp. (A1 Moodys) 8.00% due 10/30/06.............................. $ 565 5,815 Wellpoint Health Networks, Inc. (Baa1 Moodys) 6.375% due 06/15/06............................. 6,340 ---------- 21,336 ---------- MEDIA & ENTERTAINMENT -- 2.8% 2,780 AT&T Broadband (Baa3 Moodys) 8.375% due 03/15/13............................. 3,401 @2,700 COX Enterprises, Inc. (Baa1 Moodys) 7.875% due 09/15/10............................. 3,198 4,200 COX Radio, Inc. (Baa3 Moodys) 6.375% due 05/15/05............................. 4,418 7,500 CSC Holdings, Inc. (B1 Moodys) 7.625% due 07/15/18............................. 7,875 6,200 Clear Channel Communications, Inc. (Baa3 Moodys) 6.00% due 11/01/06.............................. 6,702 500 Comcast Cable Communications (Baa3 Moodys) 8.50% due 05/01/27.............................. 641 8,665 Continental Cablevision, Inc. (Baa3 Moodys) 8.875% due 09/15/05............................. 9,562 1,000 Continental Cablevision, Inc. (Baa3 Moodys) 9.50% due 08/01/13.............................. 1,155 @5,200 Echostar DBS Corp. (Ba3 Moodys) 5.75% due 10/01/08.............................. 5,259 8,880 Liberty Media Corp. (Baa3 Moodys) 3.50% due 09/25/06.............................. 8,924 7,000 News America Holdings, Inc. (Baa3 Moodys) 7.70% due 10/30/25.............................. 8,153 10,300 Time Warner Entertainment Co. (Baa1 Moodys) 8.375% due 03/15/23............................. 12,763 7,720 Time Warner, Inc. (Baa1 Moodys) 7.25% due 10/15/17.............................. 8,784 5,040 Walt Disney Co. (The) (Baa1 Moodys) 7.30% due 02/08/05.............................. 5,345 ---------- 86,180 ---------- MEDICAL INSTRUMENTS & SUPPLIES -- 0.1% 1,560 Omnicare, Inc. (Ba2 Moodys) 6.125% due 06/01/13............................. 1,564 ---------- RESEARCH & TESTING FACILITIES -- 0.2% 4,285 Quest Diagnostics, Inc. (Baa3 Moodys) 6.75% due 07/12/06.............................. 4,683 ---------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- RETAIL -- 1.0% $ 8,400 Aramark Services, Inc. (Baa3 Moodys) 7.10% due 12/01/06.............................. $ 9,210 8,400 Fred Meyer, Inc. (Baa3 Moodys) 7.375% due 03/01/05............................. 8,899 5,955 Penney (J.C.) Co., Inc. (Ba3 Moodys) 7.65% due 08/15/16.............................. 6,528 4,965 Staples, Inc. (Baa2 Moodys) 7.125% due 08/15/07............................. 5,463 ---------- 30,100 ---------- SOFTWARE & SERVICES -- 0.1% 3,000 Fiserv, Inc. (Baa2 Moodys) 3.00% due 06/27/08.............................. 2,870 ---------- TRANSPORTATION -- 2.1% +250 Boeing Capital Corp. (A3 Moodys) 6.10% due 03/01/11.............................. 270 ##1,300 Delta Airlines, Inc. (B1 Moodys) 10.50% due 04/30/16............................. 1,028 6,300 Delta Airlines, Inc. (Baa2 Moodys) 7.111% due 09/18/11............................. 6,353 4,500 FedEx Corp. (Baa2 Moodys) 6.625% due 02/12/04............................. 4,523 10,920 Ford Motor Co. (Baa1 Moodys) 6.625% due 10/01/28............................. 10,045 3,650 General Dynamics Corp. (A2 Moodys) 4.50% due 08/15/10.............................. 3,731 +8,000 General Motors Acceptance Corp. (Baa1 Moodys) 7.20% due 01/15/11.............................. 8,796 7,900 Norfolk Southern Corp. (Baa1 Moodys) 7.875% due 02/15/04............................. 7,951 16,779 Northrop Grumman Corp. (Baa3 Moodys) 8.625% due 10/15/04............................. 17,676 4,348 U.S. Airways, Inc. (Baa3 Moodys) 6.76% due 04/15/08.............................. 3,797 ---------- 64,170 ---------- U.S. GOVERNMENT AGENCIES -- 1.5% 2,350 Federal Home Loan Bank (Aaa Moodys) 6.241% due 02/20/07............................. 2,499 +7,300 Federal Home Loan Mortgage Association (Aaa Moodys) 3.125% due 08/25/06............................. 7,382 31,300 Federal Home Loan Mortgage Association (Aaa Moodys) 4.50% due 07/15/13.............................. 30,923 46,200 Tennessee Valley Linked Call Strips (Aaa Moodys) 0.00% due 11/01/25.............................. 10,937 ---------- 51,741 ---------- </Table> The accompanying notes are an integral part of this financial statement. 39 HARTFORD BOND HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- CORPORATE NOTES V -- (CONTINUED) UTILITIES -- 5.1% $ +8,800 Allied Waste North America, Inc. (Ba3 Moodys) 9.25% due 09/01/12.............................. $ 9,988 4,800 Browning-Ferris Industries, Inc. (Ba3 Moodys) 6.375% due 01/15/08............................. 4,764 8,530 Carolina Power & Light Co. (A3 Moodys) 5.125% due 09/15/13............................. 8,637 6,080 Carolina Power & Light Co. (A3 Moodys) 6.125% due 09/15/33............................. 6,249 1,750 Cleveland Electric Illuminating Co. (Aaa Moodys) 7.13% due 07/01/07.............................. 1,967 9,960 Commonwealth Edison Co. (A3 Moodys) 4.70% due 04/15/15.............................. 9,697 4,150 Consolidated Edison Co. of New York (A1 Moodys) 5.875% due 04/01/33............................. 4,205 8,225 Consolidated Natural Gas Co. (A3 Moodys) 5.375% due 11/01/06............................. 8,817 5,575 Consumers Energy Co. (Baa3 Moodys) 6.25% due 09/15/06.............................. 6,020 3,875 Detroit Edison Co. (The) (A3 Moodys) 6.125% due 10/01/10............................. 4,251 6,000 Duke Energy Corp. (A3 Moodys) 3.75% due 03/05/08.............................. 6,047 8,600 FPL Group Capital, Inc. (A2 Moodys) 3.25% due 04/11/06.............................. 8,750 @3,950 International Transmission Co. (Baa1 Moodys) 4.45% due 07/15/13.............................. 3,813 1,475 Kansas Gas & Electric Co. (Ba1 Moodys) 6.20% due 01/15/06.............................. 1,558 780 Kansas Gas & Electric Co. (Ba2 Moodys) 8.29% due 03/29/16.............................. 813 8,740 Kinder Morgan, Inc. (Baa2 Moodys) 6.65% due 03/01/05.............................. 9,231 5,000 Northern States Power Co. (A3 Moodys) 2.875% due 08/01/06............................. 5,019 7,750 Northern States Power Co. (A3 Moodys) 8.00% due 08/28/12.............................. 9,449 @4,150 Northwestern Corp. (Not Rated) 7.30% due 12/01/06.............................. 4,249 7,300 PacifiCorp. (A3 Moodys) 5.45% due 09/15/13.............................. 7,574 3,100 PacifiCorp. (A3 Moodys) 6.12% due 01/15/06.............................. 3,328 4,850 Public Service Co. of Colorado (Baa1 Moodys) 4.875% due 03/01/13............................. 4,848 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- UTILITIES -- (CONTINUED) $ 4,000 Public Service Electric & Gas Co. (Aaa Moodys) 7.00% due 09/01/24.............................. $ 4,119 7,300 Public Service Enterprise GP (A3 Moodys) 5.375% due 09/01/13............................. 7,530 11,050 Southern California Edison (Baa2 Moodys) 8.00% due 02/15/07.............................. 12,638 850 Tennessee Gas Pipeline Co. (B1 Moodys) 7.00% due 10/15/28.............................. 808 500 Tennessee Gas Pipeline Co. (B1 Moodys) 7.50% due 04/01/17.............................. 516 @4,150 Texas-New Mexico Power Co. (Baa3 Moodys) 6.125% due 06/01/08............................. 4,176 1,560 Westar Energy, Inc. (Ba1 Moodys) 8.50% due 07/01/22.............................. 1,642 ---------- 160,703 ---------- Total corporate notes............................. $ 800,552 ========== FOREIGN/YANKEE BONDS & NOTES V -- 11.3% BANKS -- 0.9% $ 4,980 Abbey National PLC (A1 Moodys) 6.69% due 10/17/05.............................. $ 5,386 +20,750 Kreditanstalt fuer Wiederaufbau (Aaa Moodys) 2.60% due 03/15/06.............................. 20,779 ---------- 26,165 ---------- CHEMICALS -- 0.1% @4,370 Rhodia S.A. (Caa1 Moodys) 8.875% due 06/01/11............................. 4,020 ---------- COMMUNICATIONS -- 1.7% 10,200 BT Group PLC (Baa1 Moodys) 8.875% due 12/15/30............................. 13,338 8,400 Deutsche Telekom International Finance BV (Baa3 Moodys) 8.25% due 06/15/05.............................. 9,112 4,725 Deutsche Telekom International Finance BV (Baa3 Moodys) 8.75% due 06/15/30.............................. 6,036 @@L3,295 KPNQwest N.V. (Default) 8.125% due 06/01/09....... -- ##L1,765 Marconi Corp., PLC (Default) 10.00% due 10/31/08........................................ 1,853 ##L4,070 Marconi Corp., PLC (Default) 8.00% due 04/30/08... 4,131 1,925 Nortel Networks Corp. (B3 Moodys) 4.25% due 09/01/08.............................. 1,822 2,150 Rogers Cable, Inc. (Ba2 Moodys) 6.25% due 06/15/13.............................. 2,166 </Table> The accompanying notes are an integral part of this financial statement. 40 - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNTI VALUE # - ---------- ---------- FOREIGN/YANKEE BONDS & NOTES V -- (CONTINUED) COMMUNICATIONS -- (CONTINUED) 7,500 TELUS Corp. (Ba1 Moodys) 8.00% due 06/01/11.............................. $ 8,770 4,990 Telefonica Europe BV (A3 Moodys) 7.35% due 09/15/05.............................. 5,415 ---------- 52,643 ---------- ENERGY & SERVICES -- 1.5% 2,130 Burlington Resources Finance Co. (Baa1 Moodys) 6.50% due 12/01/11.............................. 2,379 9,540 Burlington Resources Finance Co. (Baa1 Moodys) 6.68% due 02/15/11.............................. 10,722 3,470 EnCana Corp. (Baa1 Moodys) 6.30% due 11/01/11.............................. 3,836 9,000 EnCana Corp. (Baa1 Moodys) 7.20% due 11/01/31.............................. 10,476 6,000 Pemex Project Funding Master Trust Co. (Baa1 Moodys) 7.875% due 02/01/09............................. 6,774 4,635 Petro-Canada (Baa2 Moodys) 5.35% due 07/15/33.............................. 4,143 6,400 Repsol YPF S.A. (Baa2 Moodys) 7.45% due 07/15/05.............................. 6,881 ---------- 45,211 ---------- FINANCIAL SERVICES -- 0.5% 4,460 Abbey National PLC (A1 Moodys) 6.70% due 06/29/49.............................. 4,931 6,000 Pemex Finance Ltd. (Baa1 Moodys) 9.69% due 08/15/09.............................. 7,128 4,000 UFJ Finance Aruba AEC (Baa1 Moodys) 6.75% due 07/15/13.............................. 4,266 ---------- 16,325 ---------- FOOD, BEVERAGE & TOBACCO -- 0.4% 11,500 Cadbury Schweppes Finance PLC (Baa2 Moodys) 5.00% due 06/26/07.............................. 12,046 ---------- FOREIGN GOVERNMENTS -- 4.2% EUR 55,325 Bundesobligation (Aaa Moodys) 3.50% due 10/10/08.............................. 69,777 +9,200 Mexico Government International Bond (Baa2 Moodys) 4.625% due 10/08/08............................. 9,315 AUD 44,520 Queensland Treasury Corp. (Aaa Moodys) 6.50% due 06/14/05.............................. 33,907 5,285 Republic of Panama (Ba1 Moodys) 9.625% due 02/08/11............................. 6,104 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- FOREIGN GOVERNMENTS -- (CONTINUED) $ 3,875 Republic of Philippines (Ba1 Moodys) 10.625% due 03/16/25............................ $ 4,311 5,230 Russia Government International Bond (Baa3 Moodys) 8.25% due 03/31/30.............................. 5,845 ---------- 129,259 ---------- FOREST & PAPER PRODUCTS -- 0.1% 2,750 Abitibi Consolidated, Inc. (Ba1 Moodys) 8.30% due 08/01/05.............................. 2,910 250 Abitibi-Consolidated, Inc. (Ba1 Moodys) 8.85% due 08/01/30.............................. 270 ---------- 3,180 ---------- MACHINERY -- 0.2% @5,550 Fondo LatinoAmericano De Reservas (Aa2 Moodys) 3.00% due 08/01/06.............................. 5,515 ---------- MEDIA & ENTERTAINMENT -- 0.1% 3,660 Shaw Communications, Inc. (Ba2 Moodys) 8.25% due 04/11/10.............................. 4,145 ---------- METALS, MINERALS & MINING -- 0.7% 7,200 Inco Ltd. (Baa3 Moodys) 7.75% due 05/15/12.............................. 8,399 @4,200 Placer Dome, Inc. (Baa2 Moodys) 6.45% due 10/15/35.............................. 4,296 7,300 Placer Dome, Inc. (Baa2 Moodys) 7.125% due 06/15/07............................. 8,130 ---------- 20,825 ---------- TRANSPORTATION -- 0.9% @10,500 Hutchison Whampoa International Ltd. (A3 Moodys) 6.25% due 01/24/14.............................. 10,662 @15,450 Hutchison Whampoa International Ltd. (A3 Moodys) 7.45% due 11/24/33.............................. 16,092 ---------- 26,754 ---------- Total foreign/yankee bonds & notes................ $ 346,088 ========== MUNICIPAL BONDS V -- 0.5% $ 15,200 Illinois State (Aa3 Moodys) 5.10% due 06/01/33.............................. $ 13,976 ---------- Total municipal bonds............................. $ 13,976 ========== <Caption> SHARES - ---------- PREFERRED STOCKS -- 0.1% CONSUMER NON-DURABLES -- 0.1% @53 Xerox Corp........................................ $ 4,259 ---------- Total preferred stocks............................ $ 4,259 ========== </Table> The accompanying notes are an integral part of this financial statement. 41 HARTFORD BOND HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- U.S. TREASURIES & FEDERAL AGENCIES -- 50.0% FEDERAL HOME LOAN MORTGAGE ASSOCIATION -- 1.0% $ 29,818 5.50% due 03/01/33 -- 06/01/33.................... $ 30,193 ---------- FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 20.1% 143,196 5.00% due 04/01/18 -- 07/01/33.................... 144,428 198,207 5.50% due 10/01/32 -- 12/01/33.................... 200,888 206,463 6.00% due 07/01/12 -- 12/01/33.................... 213,767 251 6.30% due 04/01/08................................ 275 48,654 6.50% due 11/01/14 -- 01/01/33.................... 50,901 5,618 7.50% due 10/01/22 -- 09/01/31.................... 6,004 ---------- 616,263 ---------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 6.6% 86,688 5.50% due 11/15/32 -- 08/15/33.................... 88,222 24,877 6.00% due 01/15/32 -- 10/15/32.................... 25,881 83,698 6.50% due 02/15/28 -- 06/15/32.................... 88,283 336 7.00% due 06/20/30................................ 357 ---------- 202,743 ---------- U.S. TREASURY BONDS -- 4.6% +123,100 6.25% due 08/15/23................................ 140,310 U.S. TREASURY NOTES -- 17.7% +139,675 1.875% due 11/30/05............................... 139,937 +1,970 3.125% due 09/15/08............................... 1,969 +93,090 3.25% due 08/15/08................................ 93,657 +87,205 3.375% due 12/15/08............................... 87,798 +580 4.25% due 11/15/13................................ 579 +57,675 4.375% due 05/15/07............................... 61,075 +146,925 5.00% due 02/15/11................................ 157,789 ---------- 542,804 ---------- Total U.S. treasuries & federal agencies.......... $1,532,313 ========== <Caption> SHARES - ---------- WARRANTS -- 0.0% COMMUNICATIONS -- 0.0% *##@@1 Iridium World Communications, Inc................. $ -- ---------- Total warrants.................................... $ -- ========== SHORT-TERM SECURITIES -- 27.2% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 24.5% 750,359 State Street Navigator Securities Lending Prime Portfolio......................... $ 750,359 <Caption> PRINCIPAL AMOUNT - ---------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE - ---------- ---------- REPURCHASE AGREEMENTS -- 2.7% $ 82,929 Joint Repurchase Agreement (See Note 2(d)) 0.84% due 01/02/04.................................... 82,929 ---------- Total short-term securities....................... $ 833,288 ========== </Table> <Table> <Caption> MARKET VALUE # ---------- DIVERSIFICATION OF NET ASSETS: Total collateralized mortgage obligations (cost $233,723)........................ 7.6% $ 233,543 Total common stocks (cost $7,719)........ 0.4 13,671 Total convertible bonds (cost $7,441).... 0.3 7,884 Total corporate notes (cost $767,246).... 26.1 800,552 Total foreign/yankee bonds & notes (cost $332,285).............................. 11.3 346,088 Total municipal bonds (cost $15,200)..... 0.5 13,976 Total preferred stocks (cost $2,670)..... 0.1 4,259 Total U.S. treasuries & federal agencies (cost $1,526,969)...................... 50.0 1,532,313 Total warrants (cost $97)................ 0.0 -- Total short-term securities (cost $833,288).............................. 27.2 833,288 ----- ---------- Total investment in securities (total cost $3,726,638) -- including $735,598 of securities loaned (See Note 2(i))... 123.5 3,785,574 Cash, receivables and other assets....... 2.0 62,799 Payable for securities purchased......... (1.0) (30,360) Securities lending collateral payable to brokers (See Note 2(i))................ (24.5) (750,359) Other liabilities........................ (0.0) (543) ----- ---------- Net assets............................... 100.0% $3,067,111 ===== ========== </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 5,000,000 shares authorized; 249,298 shares outstanding........ $ 249 Paid in capital................................. 2,790,919 Accumulated net investment income............... 149,925 Accumulated net realized gain on investments.... 66,843 Unrealized appreciation on investments.......... 58,936 Unrealized appreciation on forward foreign currency contracts (See Note 2(g))@@@......... 4 Unrealized appreciation on other assets and liabilities in foreign currencies............. 235 ---------- Net assets...................................... $3,067,111 ========== </Table> <Table> Class IA Net asset value per share ($2,332,343 / 189,300 shares outstanding) (4,400,000 shares authorized)..................................... $12.32 ====== Class IB Net asset value per share ($734,768 / 59,998 shares outstanding) (600,000 shares authorized)..................................... $12.25 ====== </Table> The accompanying notes are an integral part of this financial statement. 42 - -------------------------------------------------------------------------------- <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 11.7% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). @ Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2003, the market value of these securities amounted to $91,188 or 3.0% of net assets. (See Note 2(m)). ## Illiquid Securities. At December 31, 2003, the market value of these securities amounted to $10,927 or 0.4% of net assets (See Note 2(m)). @@ Due to the presentation of the financial statements in thousands, the number of shares and/or market value round to zero. I All principal amounts are in U.S. dollars unless otherwise indicated. AUD -- Australian Dollar EUR -- Euro V The bond ratings are unaudited. L Debt securities are in default due to bankruptcy. </Table> @@@FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING AT DECEMBER 31, 2003 <Table> <Caption> UNREALIZED CONTRACT DELIVERY APPRECIATION DESCRIPTION MARKET VALUE AMOUNT DATE (DEPRECIATION) - ----------- ------------ -------- -------- -------------- British Pound (Sell) $716 $720 1/2/2004 $4 == </Table> The accompanying notes are an integral part of this financial statement. 43 HARTFORD CAPITAL APPRECIATION HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - ------------ ----------- COMMON STOCKS -- 95.8% BANKS -- 10.6% +4,411 Bank One Corp. ................................... $ 201,088 5,762 Citigroup, Inc. .................................. 279,683 1,941 Countrywide Credit Industries, Inc. .............. 147,240 2,417 Federal Home Loan Mortgage Association............ 140,977 2,350 Fleet Boston Financial Corp. ..................... 102,578 1,000 Golden West Financial Corp. ...................... 103,190 -2,000 UBS AG............................................ 136,883 ----------- 1,111,639 ----------- BUSINESS SERVICES -- 1.0% 2,200 Manpower, Inc. ................................... 103,576 ----------- CHEMICALS -- 0.8% -1,311 Shin-Etsu Chemical Co., Ltd. ..................... 53,839 -7,358 Sumitomo Chemical Co., Ltd. ...................... 30,358 ----------- 84,197 ----------- COMMUNICATIONS -- 9.6% +3,935 America Movil S.A. de C.V., ADR................... 107,594 *14,692 MTN Group Ltd. ................................... 62,619 9,572 Motorola, Inc. ................................... 134,671 *+1,430 NTL, Inc. ........................................ 99,736 *16,500 Nextel Communications, Inc., Class A.............. 462,987 *19,565 Nortel Networks Corp. ............................ 82,758 +-893 Telenor ASA....................................... 5,854 5,050 Telkom S.A., Ltd. ................................ 52,544 ----------- 1,008,763 ----------- COMPUTERS & OFFICE EQUIPMENT -- 5.4% 2,513 3M Co. ........................................... 213,680 *5,000 Cisco Systems, Inc. .............................. 121,450 -16,913 HON HAI Precision Industry........................ 66,443 1,746 International Business Machines Corp. ............ 161,829 ----------- 563,402 ----------- CONSUMER DURABLES -- 1.0% *+10,000 Corning, Inc. .................................... 104,300 ----------- CONSUMER NON-DURABLES -- 6.7% +1,500 Cardinal Health, Inc. ............................ 91,740 4,450 McKesson Corp. ................................... 143,109 *4,430 Medco Health Solutions, Inc. ..................... 150,566 +10,255 Tyco International Ltd. .......................... 271,752 *+3,541 Xerox Corp. ...................................... 48,859 ----------- 706,026 ----------- DRUGS -- 3.6% *3,622 Biovail Corp. .................................... 77,841 *2,272 Forest Laboratories, Inc. ........................ 140,391 *2,804 IVAX Corp. ....................................... 66,948 *2,624 King Pharmaceuticals, Inc. ....................... 40,042 1,155 Merck & Co., Inc. ................................ 53,366 ----------- 378,588 ----------- ELECTRONICS -- 3.1% 1,149 Emerson Electric Co. ............................. 74,424 -652 Samsung Electronics............................... 246,880 ----------- 321,304 ----------- </Table> <Table> <Caption> MARKET SHARES VALUE # - ------------ ----------- ENERGY & SERVICES -- 9.9% 1,668 Anadarko Petroleum Corp. ......................... $ 85,069 1,856 Burlington Resources, Inc. ....................... 102,763 @-o3,371 CONSOL Energy, Inc., PIPE......................... 78,585 +2,122 China Petroleum & Chemical Corp., H Shares, ADR... 94,242 +3,500 Halliburton Co. .................................. 91,000 1,330 Peabody Energy Corp. ............................. 55,478 5,029 Petroleo Brasileiro S.A., ADR..................... 134,062 +9,500 Sasol Ltd., ADR................................... 137,655 *491 Transocean, Inc. ................................. 11,789 1,600 Valero Energy Corp. .............................. 74,135 6,033 XTO Energy, Inc. ................................. 170,733 ----------- 1,035,511 ----------- FINANCIAL SERVICES -- 1.1% -3,885 Amvescap PLC...................................... 28,396 -297 Orix Corp. ....................................... 24,633 * @-o2,186 Spirit Finance Corp. ............................. 21,857 7,585 Standard Bank Group Ltd. ......................... 44,520 ----------- 119,406 ----------- FOOD, BEVERAGE & TOBACCO -- 2.8% 2,854 Altria Group, Inc. ............................... 155,326 4,208 Bunge Ltd. ....................................... 138,531 ----------- 293,857 ----------- FOREST & PAPER PRODUCTS -- 3.3% 3,021 Kimberly-Clark Corp. ............................. 178,499 *8,924 Smurfit-Stone Container Corp. .................... 165,726 ----------- 344,225 ----------- HEALTH SERVICES -- 1.4% 3,444 HCA, Inc. ........................................ 147,959 ----------- INSURANCE -- 5.4% 6,500 Ace Ltd. ......................................... 269,230 548 Ambac Financial Group, Inc. ...................... 38,040 374 American International Group, Inc. ............... 24,803 1,853 Marsh & McLennan Cos., Inc. ...................... 88,721 +3,664 St. Paul Cos., Inc. (The)......................... 145,289 ----------- 566,083 ----------- MACHINERY -- 1.9% 2,272 Deere (John) & Co. ............................... 147,813 +1,942 Pall Corp. ....................................... 52,098 ----------- 199,911 ----------- MEDIA & ENTERTAINMENT -- 4.2% *3,605 Comcast Corp., Special Class A ................... 112,774 *+3,053 Interactive Data Corp. ........................... 103,588 *5,000 Liberty Media Corp., Class A...................... 59,450 *9,196 Time Warner, Inc. ................................ 165,440 ----------- 441,252 ----------- MEDICAL INSTRUMENTS & SUPPLIES -- 1.3% 2,235 Guidant Corp. .................................... 134,535 ----------- </Table> The accompanying notes are an integral part of this financial statement. 44 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - ------------ ----------- COMMON STOCKS -- (CONTINUED) METALS, MINERALS & MINING -- 8.8% +2,800 Alcoa, Inc. ...................................... $ 106,400 +555 AngloGold Ltd., ADR............................... 25,900 +2,049 Companhia Vale do Rio Doce ADR.................... 119,881 2,238 Engelhard Corp. .................................. 67,016 +3,439 Falconbridge Ltd. ................................ 83,462 621 Freeport-McMoRan Copper & Gold, Inc., Class B..... 26,180 *+1,552 International Steel Group, Inc. .................. 60,434 -6,185 Rio Tinto PLC..................................... 170,222 +4,351 Teck Cominco Ltd. ................................ 73,833 2,680 United States Steel Corp. ........................ 93,836 -5,183 WMC Ltd. ......................................... 25,699 *-17,247 WMC Resources Ltd. ............................... 73,430 ----------- 926,293 ----------- REAL ESTATE INVESTMENT TRUST -- 0.6% 1,705 iStar Financial, Inc. ............................ 66,332 ----------- RETAIL -- 4.7% +7,724 Gap, Inc. (The)................................... 179,267 *+1,830 Neiman Marcus Group, Inc. ........................ 98,227 4,543 Penney (J.C.) Co., Inc. .......................... 119,380 4,128 TJX Cos., Inc. (The).............................. 91,011 ----------- 487,885 ----------- SOFTWARE & SERVICES -- 1.8% *2,257 Computer Sciences Corp. .......................... 99,809 *5,360 VeriSign, Inc. ................................... 87,375 ----------- 187,184 ----------- TRANSPORTATION -- 4.2% 2,176 CSX Corp. ........................................ 78,213 2,343 Honeywell International, Inc. .................... 78,316 3,264 Sabre Holdings Corp. ............................. 70,461 -6,182 Toyota Motor Corp. ............................... 211,444 ----------- 438,434 ----------- UTILITIES -- 2.6% 900 FPL Group, Inc. .................................. 58,878 93 Norsk Hydro ADR................................... 5,760 +2,898 TXU Corp. ........................................ 68,741 4,909 Waste Management, Inc. ........................... 145,306 ----------- 278,685 ----------- Total common stocks............................... $10,049,347 =========== WARRANTS -- 0.3% COMMUNICATIONS -- 0.3% *4,983 Icici Bank Ltd. .................................. $ 32,289 ----------- Total warrants.................................... $ 32,289 =========== </Table> <Table> <Caption> MARKET SHARES VALUE # - ------------ ----------- SHORT-TERM SECURITIES -- 8.0% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 4.7% 1 Federated Prime Cash Obligation Fund.............. $ 1 12 Federated Prime Obligation Fund................... 12 @@-- Provident Temp Fund............................... -- 144,661 Provident TempCash Fund........................... 144,661 10,372 Reserve Primary Fund.............................. 10,372 11 Scudder Money Market Fund......................... 11 341,460 UBS Private Money Market Fund..................... 341,460 2 UBS Select Money Market Fund...................... 2 ----------- 496,519 ----------- <Caption> PRINCIPAL AMOUNT - ------------ REPURCHASE AGREEMENTS -- 3.3% $ 341,239 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... 341,239 ----------- Total short-term securities....................... $ 837,758 =========== </Table> <Table> <Caption> DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $8,001,893)..... 95.8% $ 10,049,347 Total warrants (cost $20,287)............. 0.3 32,289 Total short-term securities (cost $837,758)............................... 8.0 837,758 ----- ------------ Total investment in securities (total cost $8,859,938) -- including $478,374 of securities loaned (See Note 2(i))....... 104.1 10,919,394 Cash, receivables and other assets........ 1.5 160,247 Payable for securities purchased.......... (0.9) (85,848) Payable for Fund shares redeemed.......... (0.0) (4,259) Securities lending collateral payable to brokers (See Note 2(i))................. (4.7) (496,519) Other liabilities......................... (0.0) (867) ----- ------------ Net assets................................ 100.0% $ 10,492,148 ===== ============ </Table> <Table> <Caption> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 5,000,000 shares authorized; 233,750 shares outstanding.... $ 234 Paid in capital.................................... 9,727,732 Accumulated net investment income.................. 2,152 Accumulated net realized loss on investments....... (1,297,379) Unrealized appreciation on investments............. 2,059,456 Unrealized depreciation on forward foreign currency contracts (See Note 2(g)) @@@.................... (81) Unrealized appreciation on other assets and liabilities in foreign currencies................ 34 ----------- Net assets......................................... $10,492,148 =========== </Table> <Table> <Caption> Class IA Net asset value per share ($8,912,749 / 198,466 shares outstanding) (4,250,000 shares authorized)........................................ $44.91 ====== Class IB Net asset value per share ($1,579,399 / 35,284 shares outstanding) (750,000 shares authorized)........... $44.76 ====== </Table> The accompanying notes are an integral part of this financial statement. 45 HARTFORD CAPITAL APPRECIATION HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 21.1% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). @ Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2003, the market value of these securities amounted to $100,442 or 1.0% of net assets (See Note 2(m)). - Security valued in good faith at fair value by, or under the direction of, the Funds' Board of Directors. The aggregate value of these securities as of December 31, 2003 was $1,174,523 which represents 11.2% of total net assets. o Private placement. PIPE = Private Investment Public Equity @@ Due to the presentation of the financial statements in thousands, the number of shares and/or Market Value round to zero. </Table> @@@FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING AT DECEMBER 31, 2003 <Table> <Caption> UNREALIZED CONTRACT DELIVERY APPRECIATION DESCRIPTION MARKET VALUE AMOUNT DATE (DEPRECIATION) - ----------- ------------ -------- -------- -------------- Australian Dollar (Buy) $ 884 $ 882 1/6/2004 $ 2 Australian Dollar (Buy) 907 895 1/2/2004 12 British Pound (Buy) 934 925 1/2/2004 9 British Pound (Buy) 4,043 4,019 1/5/2004 24 Canadian Dollars (Buy) 177 177 1/6/2004 -- Canadian Dollars (Buy) 2,435 2,433 1/5/2004 2 Canadian Dollars (Buy) 2,774 2,739 1/2/2004 35 Japanese Yen (Buy) 3,389 3,395 1/7/2004 (6) Japanese Yen (Buy) 4,720 4,728 1/5/2004 (8) Japanese Yen (Buy) 6,743 6,758 1/6/2004 (15) Norwegian Krone (Sell) 2,572 2,532 1/2/2004 (40) Norwegian Krone (Sell) 5,665 5,591 1/5/2004 (74) Norwegian Krone (Sell) 8,778 8,691 1/6/2004 (87) South African Rands (Buy) 98 97 1/6/2004 1 South African Rands (Buy) 234 229 1/5/2004 5 South African Rands (Buy) 279 281 1/7/2004 (2) South African Rands (Buy) 333 337 1/8/2004 (4) South African Rands (Buy) 1,967 1,902 1/2/2004 65 ---- $(81) ==== </Table> The accompanying notes are an integral part of this financial statement. 46 HARTFORD CAPITAL OPPORTUNITIES HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ------- COMMON STOCKS -- 99.5% BANKS -- 10.3% 3 American Express Co. ............................. $ 145 2 Bank of New York Co., Inc. (The).................. 71 8 Citigroup, Inc. .................................. 384 288 Federal Home Loan Bank............................ 288 3 Federal Home Loan Mortgage Association............ 188 1 Federal National Mortgage Association............. 47 2 Fleet Boston Financial Corp. ..................... 100 3 MBNA Corp. ....................................... 80 9 Mellon Financial Corp. ........................... 275 3 Morgan (J.P.) Chase & Co. ........................ 108 2 Northern Trust Corp. ............................. 79 1 PNC Financial Services Group...................... 66 @@-- SLM Corp. ........................................ 8 ------- 1,839 ------- BUSINESS SERVICES -- 1.2% *4 Akamai Technologies, Inc.......................... 46 *1 Getty Images, Inc. ............................... 30 *3 Lamar Advertising Co., Class A.................... 102 *2 Monster Worldwide, Inc. .......................... 37 ------- 215 ------- CHEMICALS -- 1.0% 2 Air Products & Chemicals, Inc. ................... 104 4 Lyondell Chemical Co. ............................ 71 ------- 175 ------- COMMUNICATIONS -- 9.5% 4 ADTRAN, Inc. ..................................... 109 13 AT&T Corp. ....................................... 270 *54 AT&T Wireless Services, Inc. ..................... 435 *2 Foundry Networks, Inc. ........................... 44 5 Nokia Corp., ADR.................................. 78 *16 Nortel Networks Corp. ............................ 69 @@-- QUALCOMM, Inc..................................... 16 *6 Sprint Corp. ..................................... 31 3 Telephone & Data Systems, Inc. ................... 183 13 Verizon Communications, Inc. ..................... 456 *@@4 Winstar Communications, Inc. ..................... -- ------- 1,691 ------- COMPUTERS & OFFICE EQUIPMENT -- 3.4% *13 Cisco Systems, Inc. .............................. 304 *4 Dell, Inc. ....................................... 122 2 International Business Machines Corp. ............ 177 ------- 603 ------- CONSUMER DURABLES -- 2.4% *5 Corning, Inc. .................................... 49 9 Newell Rubbermaid, Inc. .......................... 204 *14 Owens-Illinois, Inc. ............................. 168 ------- 421 ------- CONSUMER NON-DURABLES -- 2.5% 1 Avon Products, Inc. .............................. 95 13 Tyco International Ltd. .......................... 348 ------- 443 ------- </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ------- DRUGS -- 8.8% 2 Abbott Laboratories............................... $ 95 *1 Amgen, Inc. ...................................... 67 1 Eli Lilly & Co. .................................. 88 *1 Genzyme Corp. .................................... 72 *2 Gilead Sciences, Inc. ............................ 140 5 Merck & Co., Inc. ................................ 220 12 Pfizer, Inc. ..................................... 438 21 Schering-Plough Corp. ............................ 357 2 Wyeth............................................. 91 ------- 1,568 ------- ELECTRICAL EQUIPMENT -- 0.8% 2 Applera Corp. -- Applied Biosystems Group......... 39 @@-- Danaher Corp. .................................... 36 *3 Thermo Electron Corp. ............................ 68 ------- 143 ------- ELECTRONICS -- 7.2% *@@-- Amphenol Corp. ................................... 26 3 Analog Devices, Inc. ............................. 131 1 Cooper Industries Ltd. ........................... 35 1 Emerson Electric Co. ............................. 39 *4 Flextronics International Ltd. ................... 56 10 General Electric Co. ............................. 321 2 Linear Technology Corp. .......................... 79 *2 Marvell Technology Group Ltd. .................... 64 2 Maxim Integrated Products, Inc. .................. 87 2 Microchip Technology, Inc. ....................... 73 2 Molex, Inc. ...................................... 52 *2 Novellus Systems, Inc. ........................... 71 *2 PMC-Sierra, Inc. ................................. 48 3 Texas Instruments, Inc. .......................... 96 *3 Xilinx, Inc. ..................................... 112 ------- 1,290 ------- ENERGY & SERVICES -- 5.8% *4 BJ Services Co. .................................. 134 3 Devon Energy Corp. ............................... 151 11 GlobalSantaFe Corp. .............................. 267 *7 Noble Corp. ...................................... 250 3 Occidental Petroleum Corp. ....................... 107 2 Schlumberger Ltd. ................................ 129 ------- 1,038 ------- FINANCIAL SERVICES -- 2.4% 1 Goldman Sachs Group, Inc. (The)................... 108 6 Merrill Lynch & Co., Inc. ........................ 327 ------- 435 ------- FOOD, BEVERAGE & TOBACCO -- 0.5% 2 PepsiCo, Inc. .................................... 84 ------- FOREST & PAPER PRODUCTS -- 2.3% 1 Boise Cascade Corp. .............................. 26 3 Bowater, Inc. .................................... 117 3 Kimberly-Clark Corp. ............................. 183 *4 Smurfit-Stone Container Corp. .................... 82 ------- 408 ------- </Table> The accompanying notes are an integral part of this financial statement. 47 HARTFORD CAPITAL OPPORTUNITIES HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ------- COMMON STOCKS -- (CONTINUED) HEALTH SERVICES -- 0.6% *7 Tenet Healthcare Corp. ........................... $ 107 ------- HOTELS & GAMING -- 0.6% 5 Hilton Hotels Corp. .............................. 82 1 Starwood Hotels & Resorts Worldwide, Inc. ........ 26 ------- 108 ------- INSURANCE -- 4.2% 2 Ace Ltd. ......................................... 63 5 Allstate Corp. (The).............................. 231 3 American International Group, Inc. ............... 168 1 Marsh & McLennan Cos., Inc. ...................... 50 10 Travelers Property Casualty Corp. -- Class A...... 167 2 UnumProvident Corp. .............................. 33 @@-- XL Capital Ltd., Class A.......................... 33 ------- 745 ------- MACHINERY -- 0.9% *2 Cooper Cameron Corp. ............................. 115 @@-- Eaton Corp. ...................................... 11 1 Parker-Hannifin Corp. ............................ 30 ------- 156 ------- MEDIA & ENTERTAINMENT -- 9.0% *1 Avid Technology, Inc. ............................ 24 *1 COX Communications, Inc. ......................... 36 3 Clear Channel Communications, Inc. ............... 120 *13 Comcast Corp., Special Class A.................... 421 *1 EchoStar Communications Corp., Class A............ 37 *1 Entercom Communications Corp. .................... 32 *3 Interactive Data Corp. ........................... 105 1 New York Times Co. (The), Class A................. 70 *3 Time Warner, Inc. ................................ 50 *2 Univision Communications, Inc. ................... 71 12 Viacom, Inc., Class B............................. 546 @@-- Walt Disney Co. (The)............................. 2 *3 Westwood One, Inc................................. 90 ------- 1,604 ------- MEDICAL INSTRUMENTS & SUPPLIES -- 3.6% 5 Baxter International, Inc. ....................... 162 8 Johnson & Johnson................................. 407 2 Medtronic, Inc. .................................. 80 ------- 649 ------- METALS, MINERALS & MINING -- 1.3% 5 Alcoa, Inc. ...................................... 187 1 Illinois Tool Works, Inc. ........................ 42 ------- 229 ------- RETAIL -- 8.8% 2 CVS Corp. ........................................ 54 *@@-- Chico's FAS, Inc. ................................ 7 5 Home Depot, Inc. (The)............................ 171 *1 Hot Topic, Inc. .................................. 27 *3 Kohl's Corp. ..................................... 121 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ------- RETAIL -- (CONTINUED) *11 Kroger Co. (The).................................. $ 201 3 McDonald's Corp. ................................. 67 2 Outback Steakhouse, Inc. ......................... 80 1 Pier 1 Imports, Inc. ............................. 23 *10 Rite Aid Corp..................................... 58 6 Sears, Roebuck & Co. ............................. 279 *2 Staples, Inc...................................... 66 2 TJX Cos., Inc. (The).............................. 41 4 Target Corp. ..................................... 149 3 Wal-Mart Stores, Inc. ............................ 136 1 Walgreen Co. ..................................... 40 *1 Williams-Sonoma, Inc. ............................ 40 ------- 1,560 ------- RUBBER & PLASTICS PRODUCTS -- 0.4% 2 Reebok International Ltd. ........................ 77 ------- SOFTWARE & SERVICES -- 7.2% *2 Amdocs Ltd., ADR.................................. 34 *3 BEA Systems, Inc. ................................ 34 *3 BISYS Group, Inc. (The)........................... 44 *1 DST Systems, Inc. ................................ 53 *1 Juniper Networks, Inc............................. 26 *1 Manhattan Associates, Inc. ....................... 14 *2 Mercury Interactive Corp. ........................ 88 20 Microsoft Corp. .................................. 562 *12 Networks Associates, Inc. ........................ 180 *6 Oracle Corp. ..................................... 83 *@@-- SunGard Data Systems, Inc. ....................... 13 *1 Synopsys, Inc. ................................... 37 *3 VERITAS Software Corp. ........................... 118 ------- 1,286 ------- TRANSPORTATION -- 1.9% 1 Carnival Corp. ................................... 24 1 FedEx Corp. ...................................... 76 3 Lockheed Martin Corp. ............................ 153 1 Southwest Airlines Co. ........................... 18 1 United Parcel Service, Inc. ...................... 61 ------- 332 ------- UTILITIES -- 2.9% *38 Calpine Corp. .................................... 183 1 FirstEnergy Corp. ................................ 36 6 NiSource, Inc. ................................... 122 7 TXU Corp. ........................................ 157 ------- 498 ------- Total common stocks............................... $17,704 ======= SHORT-TERM SECURITIES -- 0.1% INVESTMENT COMPANIES -- 0.1% 21 SSgA Money Market Fund............................ $ 21 ------- Total short-term securities....................... $ 21 ======= </Table> The accompanying notes are an integral part of this financial statement. 48 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET VALUE # ------- DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $15,478)................ 99.5% $17,704 Total short-term securities (cost $21)............ 0.1 21 ------ ------- Total investment in securities (total cost $15,499)........................................ 99.6 17,725 Cash, receivables and other assets................ 0.6 104 Payable for securities purchased.................. (0.2) (24) Payable for Fund shares redeemed.................. (0.0) (6) Other liabilities................................. (0.0) (5) ------ ------- Net assets........................................ 100.0% $17,794 ====== ======= </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 500,000 shares authorized; 2,753 shares outstanding...... $ 3 Paid in capital.................................... 28,052 Accumulated net investment income.................. -- Accumulated net realized loss on investments....... (12,487) Unrealized appreciation on investments............. 2,226 -------- Net assets......................................... $ 17,794 ======== </Table> <Table> Class IA Net asset value per share ($17,794 / 2,753 shares outstanding) (500,000 shares authorized).......... $6.46 ===== </Table> <Table> & Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 1.4% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. @@ Due to the presentation of the financial statements in thousands, the number of shares and/or market value round to zero. </Table> The accompanying notes are an integral part of this financial statement. 49 HARTFORD DISCIPLINED EQUITY HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- --------- COMMON STOCKS -- 95.7% BANKS -- 13.5% 300 Bank One Corp. ................................... $ 13,695 270 Bank of America Corp. ............................ 21,676 71 Capital One Financial Corp. ...................... 4,376 710 Citigroup, Inc. .................................. 34,461 197 Countrywide Credit Industries, Inc. .............. 14,948 110 Federal National Mortgage Association............. 6,421 244 Federal National Mortgage Association............. 18,307 --------- 113,884 --------- BUSINESS SERVICES -- 1.5% *235 Cendant Corp. .................................... 5,229 89 Omnicom Group, Inc. .............................. 7,751 --------- 12,980 --------- CHEMICALS -- 1.4% 132 Avery Dennison Corp. ............................. 7,378 113 Dow Chemical Co. (The)............................ 4,689 --------- 12,067 --------- COMMUNICATIONS -- 3.8% 347 AT&T Corp. ....................................... 7,038 713 Motorola, Inc. ................................... 10,036 *406 Nextel Communications, Inc., Class A.............. 11,387 144 SBC Communications, Inc. ......................... 3,741 --------- 32,202 --------- COMPUTERS & OFFICE EQUIPMENT -- 5.9% *932 Cisco Systems, Inc. .............................. 22,642 *278 Dell, Inc. ....................................... 9,450 187 International Business Machines Corp. ............ 17,359 --------- 49,451 --------- CONSUMER DURABLES -- 0.6% 45 Johnson Controls, Inc. ........................... 5,260 --------- CONSUMER NON-DURABLES -- 5.4% 449 Gillette Co. (The)................................ 16,481 120 McKesson Corp. ................................... 3,872 *294 Medco Health Solutions, Inc. ..................... 9,996 102 Procter & Gamble Co. (The)........................ 10,208 166 Supervalu. Inc. .................................. 4,737 --------- 45,294 --------- DRUGS -- 8.3% 238 Abbott Laboratories............................... 11,105 *61 Cephalon, Inc. ................................... 2,929 150 Eli Lilly & Co. .................................. 10,531 *200 Genzyme Corp. .................................... 9,873 *468 King Pharmaceuticals, Inc. ....................... 7,134 78 Merck & Co., Inc. ................................ 3,585 421 Pfizer, Inc. ..................................... 14,887 558 Schering-Plough Corp. ............................ 9,705 --------- 69,749 --------- </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- --------- ELECTRONICS -- 5.2% *342 Altera Corp. ..................................... $ 7,772 403 General Electric Co. ............................. 12,470 84 Intel Corp. ...................................... 2,702 *168 National Semiconductor Corp. ..................... 6,629 356 Texas Instruments, Inc. .......................... 10,468 *90 Xilinx, Inc. ..................................... 3,498 --------- 43,539 --------- ENERGY & SERVICES -- 4.2% 54 ChevronTexaco Corp. .............................. 4,631 147 Conoco, Inc. ..................................... 9,665 324 Exxon Mobil Corp. ................................ 13,264 214 Unocal Corp. ..................................... 7,863 --------- 35,423 --------- FINANCIAL SERVICES -- 2.7% 99 Franklin Resources, Inc. ......................... 5,175 38 Goldman Sachs Group, Inc. (The)................... 3,762 239 Merrill Lynch & Co., Inc. ........................ 14,041 --------- 22,978 --------- FOOD, BEVERAGE & TOBACCO -- 4.7% 391 Altria Group, Inc. ............................... 21,272 355 Coca-Cola Co. (The)............................... 18,011 --------- 39,283 --------- FOREST & PAPER PRODUCTS -- 3.3% 124 International Paper Co. .......................... 5,346 145 Kimberly-Clark Corp. ............................. 8,574 213 Weyerhaeuser Co. ................................. 13,606 --------- 27,526 --------- INSURANCE -- 4.7% 72 Ambac Financial Group, Inc. ...................... 5,006 *54 Anthem, Inc. ..................................... 4,058 143 MBIA, Inc. ....................................... 8,488 318 St. Paul Cos., Inc. (The)......................... 12,613 119 XL Capital Ltd., Class A.......................... 9,236 --------- 39,401 --------- MACHINERY -- 0.8% 163 Graco, Inc. ...................................... 6,528 --------- MEDIA & ENTERTAINMENT -- 4.5% *268 Comcast Corp. .................................... 8,818 *237 Comcast Corp. .................................... 7,398 88 Gannett Co., Inc. ................................ 7,873 *774 Time Warner, Inc. ................................ 13,919 --------- 38,008 --------- MEDICAL INSTRUMENTS & SUPPLIES -- 1.7% 240 Guidant Corp. .................................... 14,466 --------- METALS, MINERALS & MINING -- 0.8% 95 Fortune Brands, Inc. ............................. 6,763 --------- RETAIL -- 5.0% 166 CVS Corp. ........................................ 6,010 282 Dollar General Corp. ............................. 5,917 </Table> The accompanying notes are an integral part of this financial statement. 50 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- --------- COMMON STOCKS -- (CONTINUED) RETAIL -- (CONTINUED) 199 Federated Department Stores, Inc. ................ $ 9,388 355 Gap, Inc. (The)................................... 8,240 140 Lowe's Cos., Inc. ................................ 7,782 88 Wal-Mart Stores, Inc. ............................ 4,645 --------- 41,982 --------- RUBBER & PLASTICS PRODUCTS -- 0.6% 78 NIKE, Inc., Class B............................... 5,312 --------- SOFTWARE & SERVICES -- 7.7% 90 Adobe Systems, Inc. .............................. 3,525 404 First Data Corp. ................................. 16,582 170 IMS Health, Inc. ................................. 4,214 *62 Intuit, Inc. ..................................... 3,275 1,348 Microsoft Corp. .................................. 37,116 --------- 64,712 --------- TRANSPORTATION -- 6.0% 190 CSX Corp. ........................................ 6,811 134 Dana Corp. ....................................... 2,450 84 FedEx Corp. ...................................... 5,677 173 General Dynamics Corp. ........................... 15,674 25 General Motors Corp. ............................. 1,340 196 United Technologies Corp. ........................ 18,565 --------- 50,517 --------- UTILITIES -- 3.4% 67 Ameren Corp. ..................................... 3,087 *325 Citizens Communications Co. ...................... 4,030 216 Exelon Corp. ..................................... 14,353 129 TXU Corp. ........................................ 3,069 118 Waste Management, Inc. ........................... 3,493 28,032 --------- Total common stocks............................... $ 805,357 ========= <Caption> PRINCIPAL AMOUNT - --------- SHORT-TERM SECURITIES -- 4.5% REPURCHASE AGREEMENTS -- 4.5% $37,851 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... $ 37,851 --------- Total short-term securities....................... $ 37,851 ========= </Table> <Table> <Caption> MARKET VALUE # --------- DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $704,872)...... 95.7% $ 805,357 Total short-term securities (cost $37,851)............................... 4.5 37,851 ----- --------- Total investment in securities (total cost $742,723)......................... 100.2 843,208 Cash, receivables and other assets....... 0.4 3,308 Payable for securities purchased......... (0.6) (4,774) Other liabilities........................ 0.0 (44) ----- --------- Net assets............................... 100.0% $ 841,698 ===== ========= </Table> <Table> <Caption> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 3,500,000 shares authorized; 75,213 shares outstanding.................................... $ 75 Paid in capital.................................. 920,783 Accumulated net investment income................ 422 Accumulated net realized loss on investments..... (181,333) Unrealized appreciation on investments........... 100,485 Unrealized appreciation on futures contracts ++................................... 1,266 --------- Net assets....................................... $ 841,698 ========= </Table> <Table> <Caption> Class IA Net asset value per share ($685,888 / 61,224 shares outstanding) (3,300,000 shares authorized)..................................... $11.20 ====== Class IB Net asset value per share ($155,810 / 13,989 shares outstanding) (200,000 shares authorized)..................................... $11.14 ====== </Table> <Table> <Caption> # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. ++ The Fund had 108 Standard & Poor's 500 March 2004 Futures contracts open as of December 31, 2003. These contracts had a value of $29,986 as of December 31, 2003 and were collateralized by $1,728 of cash. </Table> The accompanying notes are an integral part of this financial statement. 51 HARTFORD GLOBAL LEADERS HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- --------- COMMON STOCKS -- 96.8% AEROSPACE & DEFENSE -- 1.5% +4,434 China Merchants Holdings International Co., Ltd. ........................................... $ 5,854 +-291 European Aeronautic Defense & Space Co. .......... 6,952 --------- 12,806 --------- AGRICULTURE & FISHING -- 0.2% -93 Nokia Oyj......................................... 1,594 BANKS -- 8.0% 365 Bank One Corp. ................................... 16,627 339 Citigroup, Inc. .................................. 16,474 54 Countrywide Credit Industries, Inc. .............. 4,126 -331 Credit Suisse Group............................... 12,064 -162 Deutsche Bank AG.................................. 13,366 97 Federal Home Loan Mortgage Association............ 5,645 --------- 68,302 --------- BUSINESS SERVICES -- 2.9% *922 Cendant Corp. .................................... 20,537 -1 Dentsu, Inc. ..................................... 4,594 --------- 25,131 --------- COMMUNICATIONS -- 10.4% -2,875 Carphone Warehouse Group PLC...................... 7,585 -1 DDI Corp. ........................................ 4,337 -571 Deutsche Telekom AG............................... 10,368 *109 NTL, Inc. ........................................ 7,617 *+185 Research in Motion Ltd. .......................... 12,350 -7,326 Telefonaktiebolaget LM Ericsson................... 12,931 -8,724 Vodafone Group PLC................................ 21,677 *+1,209 Wanadoo........................................... 9,916 *+100 XM Satellite Radio Holdings, Inc. ................ 2,628 --------- 89,409 --------- COMPUTERS & OFFICE EQUIPMENT -- 2.9% *578 Cisco Systems, Inc. .............................. 14,047 *317 Dell, Inc. ....................................... 10,762 --------- 24,809 --------- CONSTRUCTION -- 2.5% 3,634 ABB Ltd. ......................................... 18,423 34 Lennar Corp. ..................................... 3,283 --------- 21,706 --------- CONSUMER NON-DURABLES -- 5.0% 659 Gillette Co. (The)................................ 24,190 *195 Medco Health Solutions, Inc. ..................... 6,611 466 Tyco International Ltd. .......................... 12,338 --------- 43,139 --------- DRUGS -- 10.9% -198 AstraZeneca PLC................................... 9,495 197 Eli Lilly & Co. .................................. 13,873 *261 Forest Laboratories, Inc. ........................ 16,136 373 Pfizer, Inc. ..................................... 13,180 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- --------- DRUGS -- (CONTINUED) -230 Roche Holdings AG................................. $ 23,227 213 Schering AG....................................... 10,767 +117 Teva Pharmaceutical Industries Ltd., ADR.......... 6,646 --------- 93,324 --------- EDUCATION -- 0.5% *67 Apollo Group, Inc. ............................... 4,576 --------- ELECTRICAL EQUIPMENT -- 1.0% *59 KLA-Tencor Corp. ................................. 3,444 -1,958 Techtronic Industries Co. ........................ 5,462 --------- 8,906 --------- ELECTRONICS -- 5.7% *328 Altera Corp. ..................................... 7,450 106 Analog Devices, Inc. ............................. 4,857 -738 Matsushita Electric Industrial Co. ............... 10,270 @=30 Samsung Electronics Co., Ltd., GDR................ 5,636 +-263 Siemens AG........................................ 20,961 --------- 49,174 --------- ENERGY & SERVICES -- 7.6% 114 Apache Corp. ..................................... 9,205 -3,306 Cnooc Ltd. ....................................... 6,522 217 Exxon Mobil Corp. ................................ 8,909 *260 Noble Corp. ...................................... 9,317 189 Schlumberger Ltd. ................................ 10,315 -114 TotalFinaElf S.A., B Shares....................... 21,096 --------- 65,364 --------- FINANCIAL SERVICES -- 1.7% 254 Merrill Lynch & Co., Inc. ........................ 14,888 FOOD, BEVERAGE & TOBACCO -- 5.2% 375 Altria Group, Inc. ............................... 20,429 -1,262 Compass Group PLC................................. 8,602 -655 Imperial Tobacco Group PLC........................ 12,914 - @@-- Japan Tobacco, Inc. .............................. 2,428 --------- 44,373 --------- INSURANCE -- 3.6% -126 Allianz AG........................................ 15,996 -120 Muenchener Rueckversicherungs Gesellschaft AG..... 14,666 --------- 30,662 --------- MACHINERY -- 4.3% *-296 ASML Holding N.V. ................................ 5,923 -530 Atlas Copco AB.................................... 19,031 179 Deere (John) & Co. ............................... 11,657 --------- 36,611 --------- MEDIA & ENTERTAINMENT -- 4.2% 71 Clear Channel Communications, Inc. ............... 3,325 *466 Comcast Corp., Special Class A.................... 14,580 +-1,017 Mediaset S.p.A. .................................. 12,107 *148 Univision Communications, Inc. ................... 5,854 --------- 35,866 --------- </Table> The accompanying notes are an integral part of this financial statement. 52 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- --------- COMMON STOCKS -- (CONTINUED) MEDICAL INSTRUMENTS & SUPPLIES -- 4.2% *361 Boston Scientific Corp. .......................... $ 13,263 329 Guidant Corp. .................................... 19,782 -35 Sanofi-Synthelabo S.A. ........................... 2,662 --------- 35,707 --------- METALS, MINERALS & MINING -- 1.7% *6,927 Corus Group PLC................................... 3,720 +165 JSC Mining & Smelting Co., ADR.................... 10,737 --------- 14,457 --------- RETAIL -- 3.9% -103 Fast Retailing Co., Ltd. ......................... 6,307 -2,000 Kingfisher PLC.................................... 10,009 -126 Pinault Printemps Redoute S.A. ................... 12,253 *180 Staples, Inc. .................................... 4,914 --------- 33,483 --------- SOFTWARE & SERVICES -- 4.5% -40 Advantest Corp. .................................. 3,204 306 Microsoft Corp. .................................. 8,436 -69 SAP AG............................................ 11,441 *334 Yahoo!, Inc. ..................................... 15,074 --------- 38,155 --------- TRANSPORTATION -- 4.4% 217 BMW AG............................................ 10,073 *-2,229 British Airways PLC............................... 9,291 +-60 Renault S.A. ..................................... 4,120 150 United Technologies Corp. ........................ 14,168 --------- 37,652 --------- Total common stocks............................... $ 830,094 ========= </Table> <Table> SHORT-TERM SECURITIES -- 10.9% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 7.2% 61,510 State Street Navigator Securities Lending Prime Portfolio....................................... $ 61,510 --------- PRINCIPAL AMOUNT ------- REPURCHASE AGREEMENTS -- 3.7% $32,220 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... 32,220 --------- Total short-term securities....................... $ 93,730 ========= </Table> <Table> <Caption> MARKET VALUE # --------- DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $710,266).......... 96.8% $ 830,094 Total short-term securities (cost $93,730)... 10.9 93,730 ----- --------- Total investment in securities (total cost $803,996) -- including $58,863 of securities loaned (See Note 2(i)).......... 107.7 923,824 Cash, receivables and other assets........... 0.2 2,058 Payable for securities purchased............. (0.4) (3,926) Payable for Fund shares redeemed............. (0.3) (3,002) Securities lending collateral payable to brokers (See Note 2(i)).................... (7.2) (61,510) Other liabilities............................ (0.0) (80) ----- --------- Net assets................................... 100.0% $ 857,364 ===== ========= </Table> <Table> <Caption> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 3,400,000 shares authorized; 55,251 shares outstanding.................................... $ 55 Paid in capital.................................. 922,167 Accumulated net investment income................ 1,723 Accumulated net realized loss on investments..... (186,432) Unrealized appreciation on investments........... 119,828 Unrealized appreciation on forward foreign currency contracts (See Note 2(g))@@@.......... 4 Unrealized appreciation on other assets and liabilities in foreign currencies.............. 19 --------- Net assets....................................... $ 857,364 ========= </Table> <Table> <Caption> Class IA Net asset value per share ($728,049 / 46,890 shares outstanding) (3,200,000 shares authorized)..................................... $15.53 ====== Class IB Net asset value per share ($129,315 / 8,362 shares outstanding) (200,000 shares authorized)........ $15.47 ====== </Table> <Table> <Caption> PERCENTAGE OF NET ASSETS DIVERSIFICATION BY COUNTRY: ---------- United States of America............................ 56.6% Germany............................................. 12.6 United Kingdom...................................... 9.7 Switzerland......................................... 6.3 France.............................................. 5.8 Sweden.............................................. 3.7 Japan............................................... 3.6 Hong Kong........................................... 2.1 Netherlands......................................... 1.5 Canada.............................................. 1.4 Italy............................................... 1.4 Russia.............................................. 1.3 Israel.............................................. 0.8 South Korea......................................... 0.7 Finland............................................. 0.2 ----- Total............................................. 107.7% ===== </Table> The accompanying notes are an integral part of this financial statement. 53 HARTFORD GLOBAL LEADERS HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 51.1% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). @ Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2003, the market value of these securities amounted to $5,636 or 0.7% of net assets (See Note 2(m)). - Security valued in good faith at fair value by, or under the direction of, the Funds' Board of Directors. The aggregate value of these securities as of December 31, 2003 was $343,455, which represents 40.1% of total net assets. @@ Due to the presentation of the financial statements in thousands, the number of shares and/or market value round to zero. </Table> @@@FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING AT DECEMBER 31, 2003 <Table> <Caption> UNREALIZED MARKET CONTRACT DELIVERY APPRECIATION DESCRIPTION VALUE AMOUNT DATE (DEPRECIATION) - ----------- ------ -------- -------- -------------- British Pound (Buy) $516 $512 1/5/2004 $4 == </Table> The accompanying notes are an integral part of this financial statement. 54 HARTFORD GROWTH OPPORTUNITIES HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- 97.5% APPAREL & TEXTILE -- 0.9% -1,084 Burberry Group PLC................................ $ 7,089 -------- BANKS -- 4.6% 161 Bank One Corp. ................................... 7,358 145 Countrywide Credit Industries, Inc. .............. 10,983 81 Federal Home Loan Mortgage Association............ 4,736 154 Federal National Mortgage Association............. 11,582 -------- 34,659 -------- BUSINESS SERVICES -- 2.7% *932 Cendant Corp. .................................... 20,753 -------- COMMUNICATIONS -- 8.7% *1017 American Tower Corp., Class A..................... 11,006 *278 Crown Castle International Corp. ................. 3,065 *150 Level 3 Communications Holdings, Inc. ............ 7,678 *235 NTL, Inc. ........................................ 16,363 *610 Nextel Communications, Inc., Class A.............. 17,111 *+1,745 Sirius Satellite Radio, Inc. ..................... 5,515 *+191 XM Satellite Radio Holdings, Inc. ................ 5,040 -------- 65,778 -------- COMPUTERS & OFFICE EQUIPMENT -- 3.2% 154 CDW Corp. ........................................ 8,907 *221 Dell, Inc. ....................................... 7,502 *252 Netscreen Technologies, Inc. ..................... 6,242 ***117 Quanta Computer, Inc., GDR........................ 1,438 -------- 24,089 -------- CONSTRUCTION -- 5.1% 200 Horton (D.R.), Inc. .............................. 8,656 89 Lennar Corp. ..................................... 8,573 145 Pulte Corp. ...................................... 13,556 -1,599 Rinker Group Ltd. ................................ 7,909 -------- 38,694 -------- CONSUMER DURABLES -- 2.2% *1263 Corning, Inc. .................................... 13,177 *195 Genesis Microchip, Inc. .......................... 3,511 -------- 16,688 -------- CONSUMER NON-DURABLES -- 4.1% 122 AmerisourceBergen Corp. .......................... 6,833 226 Cardinal Health, Inc. ............................ 13,816 *298 Medco Health Solutions, Inc. ..................... 10,139 -------- 30,788 -------- DRUGS -- 8.6% 147 Abbott Laboratories............................... 6,841 *+188 Cephalon, Inc. ................................... 9,087 *259 Forest Laboratories, Inc. ........................ 16,012 *369 IVAX Corp. ....................................... 8,819 *125 Medicines Co. (The)............................... 3,691 *389 Millennium Pharmaceuticals, Inc. ................. 7,257 *+109 NPS Pharmaceuticals, Inc. ........................ 3,341 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- -------- DRUGS -- (CONTINUED) *54 Neurocrine Biosciences, Inc. ..................... $ 2,923 411 Serono S.A., ADR.................................. 7,210 -------- 65,181 -------- EDUCATION -- 3.0% *113 Apollo Group, Inc. ............................... 7,711 *194 Career Education Corp. ........................... 7,774 *240 Education Management Corp. ....................... 7,456 -------- 22,941 -------- ELECTRICAL EQUIPMENT -- 1.1% -3,073 Techtronic Industries Co. ........................ 8,573 -------- ELECTRONICS -- 8.7% *417 Altera Corp. ..................................... 9,473 172 American Power Conversion Corp. .................. 4,208 154 Analog Devices, Inc. ............................. 7,016 *979 ChipPAC, Inc. .................................... 7,430 *+317 Epcos AG, ADR..................................... 7,139 *+280 FuelCell Energy, Inc. ............................ 3,635 *771 MEMC Electronic Materials, Inc. .................. 7,419 *271 Pixelworks, Inc. ................................. 2,987 *183 Quantum Fuel Systems Technologies Worldwide, Inc. ........................................... 1,471 325 STMicroelectronics N.V., NY Reg Shares............ 8,788 *595 Taiwan Semiconductor Manufacturing Co., Ltd., ADR............................................. 6,094 -------- 65,660 -------- ENERGY & SERVICES -- 1.1% 205 Arch Coal, Inc. .................................. 6,387 *57 Universal Tech.................................... 1,710 -------- 8,097 -------- FINANCIAL SERVICES -- 2.4% 114 Blackrock, Inc. .................................. 6,055 148 Federated Investors, Inc., Class B................ 4,354 115 UBS AG............................................ 7,812 -------- 18,221 -------- FOOD, BEVERAGE & TOBACCO -- 3.7% 220 Altria Group, Inc. ............................... 11,994 203 Bunge Ltd. ....................................... 6,679 *289 Constellation Brands, Inc. ....................... 9,530 -------- 28,203 -------- HEALTH SERVICES -- 2.1% *402 Edwards Lifesciences Corp. ....................... 12,101 *280 Human Genome Sciences, Inc. ...................... 3,706 -------- 15,807 -------- MACHINERY -- 0.9% *408 Asyst Technologies, Inc. ......................... 7,075 -------- MEDIA & ENTERTAINMENT -- 2.4% *300 Comcast Corp., Class A............................ 9,858 *162 Entercom Communications Corp. .................... 8,590 -------- 18,448 -------- </Table> The accompanying notes are an integral part of this financial statement. 55 HARTFORD GROWTH OPPORTUNITIES HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- (CONTINUED) MEDICAL INSTRUMENTS & SUPPLIES -- 4.7% 142 DENTSPLY International, Inc. ..................... $ 6,414 191 Guidant Corp. .................................... 11,492 227 Medtronic, Inc. .................................. 11,030 *319 Viasys Healthcare, Inc. .......................... 6,576 -------- 35,512 -------- METALS, MINERALS & MINING -- 1.1% 176 Precision Castparts Corp. ........................ 7,997 -------- RESEARCH & TESTING FACILITIES -- 1.5% 123 Moody's Corp. .................................... 7,454 *168 Telik, Inc. ...................................... 3,859 -------- 11,313 -------- RETAIL -- 9.9% *90 Advance Auto Parts, Inc. ......................... 7,326 *94 Dick's Sporting Goods, Inc. ...................... 4,594 *145 eBay, Inc. ....................................... 9,359 714 Gap, Inc. (The)................................... 16,563 228 Home Depot, Inc. (The)............................ 8,088 278 Michaels Stores, Inc. ............................ 12,301 423 PetSmart, Inc. ................................... 10,077 *256 Rare Hospitality International, Inc. ............. 6,247 -------- 74,555 -------- RUBBER & PLASTICS PRODUCTS -- 1.6% *431 Jarden Corp. ..................................... 11,782 -------- SOFTWARE & SERVICES -- 8.9% *178 Alliance Sata Systems Corp. ...................... 4,930 *502 Amdocs Ltd., ADR.................................. 11,294 *593 BEA Systems, Inc. ................................ 7,290 *173 Intuit, Inc. ..................................... 9,175 *150 Mercury Interactive Corp. ........................ 7,315 *616 Red Hat, Inc. .................................... 11,560 *262 Websense, Inc. ................................... 7,673 *179 Yahoo!, Inc. ..................................... 8,094 -------- 67,331 -------- TRANSPORTATION -- 4.3% 136 Expeditors International Washington, Inc. ........ 5,126 *109 JetBlue Airways Corp. ............................ 2,893 *+236 Ryanair Holdings PLC, ADR......................... 11,931 *633 Sirva, Inc. ...................................... 12,365 -------- 32,315 -------- Total common stocks............................... $737,549 ======== SHORT-TERM SECURITIES -- 8.5% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 4.3% 32,513 Boston Global Investment Trust.................... $ 32,513 -------- PRINCIPAL MARKET AMOUNT VALUE # ------- -------- REPURCHASE AGREEMENTS -- 4.2% $31,537 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04............................. $ 31,537 -------- Total short-term securities....................... $ 64,050 ======== </Table> <Table> DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $609,993)............... 97.5% $737,549 Total short-term securities (cost $64,050)........ 8.5 64,050 ----- -------- Total investment in securities (total cost $674,043) -- including $31,563 of securities loaned (See Note 2(i)).......................... 106.0 801,599 Cash, receivables and other assets................ 0.1 993 Payable for securities purchased.................. (0.2) (1,137) Payable for Fund shares redeemed.................. (1.6) (12,305) Securities lending collateral payable to brokers (See Note 2(i))................................. (4.3) (32,513) Other liabilities................................. (0.0) (51) ----- -------- Net assets........................................ 100.0% $756,586 ===== ======== </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 700,000 shares authorized; 32,103 shares outstanding..................... $ 32 Paid in capital............................................. 769,644 Accumulated net investment loss............................. (12) Accumulated net realized loss on investments................ (140,636) Unrealized appreciation on investments...................... 127,556 Unrealized depreciation on forward foreign currency contracts (See Note 2(g))@@@.............................. (5) Unrealized appreciation on other assets and liabilities in foreign currencies........................................ 7 --------- Net assets.................................................. $ 756,586 ========= </Table> <Table> Class IA Net asset value per share ($696,900 / 29,561 shares outstanding) (500,000 shares authorized)................................... $23.57 ====== Class IB Net asset value per share ($59,686 / 2,542 shares outstanding) (200,000 shares authorized)................................... $23.48 ====== </Table> <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 11.3% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). - Security valued in good faith at fair value by, or under the direction of, the Funds' Board of Directors. The aggregate value of these securities as of December 31, 2003 was $23,571, which represents 3.1% of total net assets. ** Securities contain some restriction as to public resale. At December 31, 2003, the market value of these securities amounted to $1,438 or 0.2% of net assets (See Note 2(m)). </Table> The accompanying notes are an integral part of this financial statement. 56 - -------------------------------------------------------------------------------- @@@FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING AT DECEMBER 31, 2003 <Table> <Caption> UNREALIZED CONTRACT DELIVERY APPRECIATION DESCRIPTION MARKET VALUE AMOUNT DATE (DEPRECIATION) - ----------- ------------ --------------- -------- -------------- British Pound (Sell) $487 $482 01/02/04 $(5) Hong Kong Dollar (Buy) 105 105 01/02/04 -- --- $(5) === </Table> The accompanying notes are an integral part of this financial statement. 57 HARTFORD HIGH YIELD HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - ------------ -------- COMMON STOCKS -- 0.4% BUSINESS SERVICES -- 0.0% *@##-@@-- Hosiery Corp. .................................... $ -- -------- COMMUNICATIONS -- 0.4% *25 Global Crossing Ltd. ............................. 834 *+##116 Marconi Corp., PLC, ADR........................... 2,345 -------- 3,179 -------- Total common stocks............................... $ 3,179 ======== <Caption> PRINCIPAL AMOUNT - ------------ CONVERTIBLE BONDS V -- 0.2% CONSUMER NON-DURABLES -- 0.1% $ 500 Tyco International Group S.A. (Ba2 Moodys) 3.125% due 01/15/23............................. $ 684 -------- MACHINERY -- 0.1% 440 American Standard, Inc. (Ba2 Moodys) 7.625% due 02/15/10............................. 499 -------- Total convertible bonds........................... $ 1,183 ======== <Caption> SHARES - ------------ CONVERTIBLE PREFERRED STOCKS -- 0.3% COMMUNICATIONS -- 0.0% ##21 Adelphia Communications Corp. .................... $ 32 15 McLeodUSA, Inc. .................................. 114 -------- 146 -------- ENERGY & SERVICES -- 0.1% 13 Amerada Hess Corp. ............................... 713 -------- MEDIA & ENTERTAINMENT -- 0.2% 14 Cablevision Systems Corp. ........................ 1,470 -------- Total convertible preferred stocks................ $ 2,329 ======== <Caption> PRINCIPAL AMOUNT - ------------ CORPORATE NOTES V -- 75.6% AEROSPACE & DEFENSE -- 0.3% $ @1,420 DRS Technologies, Inc. (B2 Moodys) 6.875% due 11/01/13............................. $ 1,459 830 DirecTV Holdings LLC (B1 Moodys) 8.375% due 03/15/13............................. 963 -------- 2,422 -------- AGRICULTURE & FISHING -- 0.3% 1,100 Dole Food Co. (B2 Moodys) 7.25% due 06/15/10.............................. 1,133 400 Dole Food Co. (B2 Moodys) 8.625% due 05/01/09............................. 439 @315 Pilgrim's Pride Corp. (B2 Moodys) 9.25% due 11/15/13.............................. 326 -------- 1,898 -------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ -------- APPAREL & TEXTILE -- 0.3% $ 760 Collins & Aikman Floor Cover (B2 Moodys) 9.75% due 02/15/10.............................. $ 813 995 Phillips Van-Heusen (B1 Moodys) 7.75% due 11/15/23.............................. 1,015 @690 Warnaco, Inc. (B2 Moodys) 8.875% due 06/15/13............................. 711 -------- 2,539 -------- BANKS -- 0.3% 705 Capital One Financial Corp. (Baa3 Moodys) 6.25% due 11/15/13.............................. 723 @1,150 Capital One Financial Corp. (Baa3 Moodys) 7.125% due 08/01/08............................. 1,242 225 Western Financial Bank (B1 Moodys) 9.625% due 05/15/12............................. 251 -------- 2,216 -------- BUSINESS SERVICES -- 2.3% 3,000 IPC Acquisition Corp. (B3 Moodys) 11.50% due 12/15/09............................. 3,270 395 Integrated Electrical Services, Inc. (B2 Moodys) 9.375% due 02/01/09............................. 415 600 Interpool, Inc. (Caa1 Moodys) 7.20% due 08/01/07.............................. 574 150 Interpool, Inc. (Caa1 Moodys) 7.35% due 08/01/07.............................. 144 2,000 Iron Mountain, Inc. (B2 Moodys) 6.625% due 01/01/16............................. 1,945 +2,094 Iron Mountain, Inc. (B2 Moodys) 7.75% due 01/15/15.............................. 2,193 855 Lamar Media Corp. (Ba3 Moodys) 7.25% due 01/01/13.............................. 919 @825 Moore North America Finance, Inc. (B1 Moodys) 7.875% due 01/15/11............................. 934 670 United Rentals, Inc. (B1 Moodys) 10.75% due 04/15/08............................. 754 @2,250 United Rentals, Inc. (B2 Moodys) 7.75% due 11/15/13.............................. 2,298 +2,755 United Rentals, Inc. (B2 Moodys) 9.25% due 01/15/09.............................. 2,893 505 Universal Compression, Inc. (B1 Moodys) 7.25% due 05/15/10.............................. 525 -------- 16,864 -------- CHEMICALS -- 2.3% 270 ARCO Chemical Co. (B1 Moodys) 9.80% due 02/01/20.............................. 271 +1,400 Equistar Chemicals LP (B2 Moodys) 8.75% due 02/15/09.............................. 1,463 1,200 FMC Corp. (Ba2 Moodys) 10.25% due 11/01/09............................. 1,404 </Table> The accompanying notes are an integral part of this financial statement. 58 - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT I VALUE # - ------------ -------- CORPORATE NOTES V -- (CONTINUED) CHEMICALS -- (CONTINUED) 575 Geon Co. (B3 Moodys) 6.875% due 12/15/05............................. $ 552 545 Georgia Gulf Corp. (Ba3 Moodys) 7.625% due 11/15/05............................. 574 EUR 210 Huntsman International LLC (Caa1 Moodys) 10.125% due 07/01/09............................ 258 750 IMC Global, Inc. (B1 Moodys) 11.25% due 06/01/11............................. 825 12 IMC Global, Inc. (B2 Moodys) 7.625% due 11/01/05............................. 12 300 Lyondell Chemical Co. (B1 Moodys) 9.50% due 12/15/08.............................. 314 600 Lyondell Chemical Co. (B1 Moodys) 9.50% due 12/15/08.............................. 627 1,190 Lyondell Chemical Co. (B1 Moodys) 9.625% due 05/01/07............................. 1,261 +1,700 Lyondell Chemical Co. (B1 Moodys) 9.875% due 05/01/07............................. 1,794 +1,260 Millennium America, Inc. (B1 Moodys) 7.00% due 11/15/06.............................. 1,292 +785 Millennium America, Inc. (B1 Moodys) 7.625% due 11/15/26............................. 730 @3,185 Nalco Chemical Co. (Caa1 Moodys) 8.875% due 11/15/13............................. 3,376 +410 PolyOne Corp. (B3 Moodys) 10.625% due 05/15/10............................ 410 +925 PolyOne Corp. (B3 Moodys) 8.875% due 05/01/12............................. 851 @1,335 Scotts Co. (The) (Ba3 Moodys) 6.625% due 11/15/13............................. 1,372 -------- 17,386 -------- COMMUNICATIONS -- 9.9% @1,100 ACC Escrow Corp. (B2 Moodys) 10.00% due 08/01/11............................. 1,227 400 Adelphia Communications Corp. (Default) 8.875% due 01/15/07............................. 388 1,210 Avaya, Inc. (B2 Moodys) 11.125% due 04/01/09............................ 1,416 @2,350 Cincinnati Bell, Inc. (B3 Moodys) 8.375% due 01/15/14............................. 2,526 @1,790 Dex Media, Inc. (B3 Moodys) 9.875% due 08/15/13............................. 2,081 2,460 Level 3 Communications, Inc. (Ba3 Moodys) 6.125% due 07/15/13............................. 2,478 1,500 Level 3 Communications, Inc. (Ba3 Moodys) 7.625% due 06/15/12............................. 1,626 200 Level 3 Communications, Inc. (Caa2 Moodys) 0.00% due 03/15/10.............................. 168 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT I VALUE # - ------------ -------- COMMUNICATIONS -- (CONTINUED) $ @1,300 Level 3 Communications, Inc. (Caa2 Moodys) 10.75% due 10/15/11............................. $ 1,375 +3,205 Level 3 Communications, Inc. (Caa2 Moodys) 11.00% due 03/15/08............................. 3,141 EUR 1,175 Level 3 Communications, Inc. (Caa2 Moodys) 11.25% due 03/15/10............................. 1,423 +5,000 Level 3 Communications, Inc. (Caa2 Moodys) 11.25% due 03/15/10............................. 4,800 +1,600 Lucent Technologies, Inc. (Caa1 Moodys) 5.50% due 11/15/08.............................. 1,488 +2,459 Lucent Technologies, Inc. (Caa1 Moodys) 6.45% due 03/15/29.............................. 1,933 L3,150 Metromedia Fiber Network, Inc. (Default) 10.00% due 11/15/08............................. 189 EUR L450 Metromedia Fiber Network, Inc. (Default) 10.00% due 12/15/09............................. 34 L365 Metromedia Fiber Network, Inc. (Default) 10.00% due 12/15/09............................. 22 12,470 Nextel Communications, Inc. (B2 Moodys) 7.375% due 08/01/15............................. 13,405 @@L1,990 Nextlink Escrow (Default) 0.00% due 04/15/06.............................. -- @@L445 Nextlink Escrow (Default) 0.00% due 11/15/08.............................. -- @@L750 Nextlink Escrow (Default) 0.00% due 12/01/09.............................. -- @@L600 Nextlink Escrow (Default) 0.00% due 12/01/09.............................. -- +250 Northern Telecom Capital (B3 Moodys) 7.875% due 06/15/26............................. 250 570 PanAmSat Corp. (Ba2 Moodys) 6.375% due 01/15/08............................. 591 2,570 PanAmSat Corp. (Ba2 Moodys) 6.875% due 01/15/28............................. 2,573 6,525 PanAmSat Corp. (Ba3 Moodys) 8.50% due 02/01/12.............................. 7,243 +4,220 Qwest Capital Funding, Inc. (Caa2 Moodys) 7.25% due 02/15/11.............................. 4,157 3,530 Qwest Capital Funding, Inc. (Caa2 Moodys) 7.625% due 08/03/21............................. 3,248 5,685 Qwest Corp. (Ba3 Moodys) 6.875% due 09/15/33............................. 5,401 845 Qwest Corp. (Ba3 Moodys) 7.20% due 11/01/04.............................. 864 1,630 Qwest Corp. (Ba3 Moodys) 7.25% due 10/15/35.............................. 1,622 </Table> The accompanying notes are an integral part of this financial statement. 59 HARTFORD HIGH YIELD HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ -------- CORPORATE NOTES V -- (CONTINUED) COMMUNICATIONS -- (CONTINUED) $ +1,500 RCN Corp. (Ca Moodys) 11.125% due 10/15/07............................ $ 728 +6,080 RCN Corp. (Ca Moodys) 9.80% due 02/15/08.............................. 2,858 280 Rexnord Corp. (B3 Moodys) 10.125% due 12/15/12............................ 307 960 Sprint Capital Corp. (Baa3 Moodys) 7.90% due 03/15/05.............................. 1,023 ##@@-- Voicestream Wireless Corp. (Ba3 Moodys) 10.375% due 11/15/09............................ 1 L1,925 WorldCom, Inc. (Default) 7.50% due 05/15/11.............................. 645 L6,655 WorldCom, Inc. (Default) 8.25% due 05/15/31.............................. 2,229 -------- 73,460 -------- CONSTRUCTION -- 2.2% +1,100 Champion Home Builders Co. (B2 Moodys) 11.25% due 04/15/07............................. 1,189 2,140 Horton (D.R.), Inc. (Ba1 Moodys) 6.875% due 05/01/13............................. 2,279 350 Kaufman & Broad Home Corp. (Ba1 Moodys) 7.75% due 10/15/04.............................. 359 2,200 Kaufman & Broad Home Corp. (Ba2 Moodys) 9.50% due 02/15/11.............................. 2,453 2,450 Schuler Homes, Inc., Class A (Ba1 Moodys) 9.375% due 07/15/09............................. 2,756 +680 Schuler Homes, Inc., Class A (Ba2 Moodys) 10.50% due 07/15/11............................. 789 +590 Standard Pacific Corp. (Ba2 Moodys) 6.50% due 10/01/08.............................. 608 2,000 Standard Pacific Corp. (Ba2 Moodys) 6.875% due 05/15/11............................. 2,070 +2,360 Toll Corp. (Ba2 Moodys) 8.00% due 05/01/09.............................. 2,472 1,200 Toll Corp. (Ba2 Moodys) 8.25% due 02/01/11.............................. 1,320 -------- 16,295 -------- CONSUMER DURABLES -- 1.5% 3,250 Corning, Inc. (Ba2 Moodys) 8.30% due 04/04/25.............................. 3,339 1,100 Owens-Brockway (B1 Moodys) 7.75% due 05/15/11.............................. 1,181 5,220 Owens-Brockway (B1 Moodys) 8.875% due 02/15/09............................. 5,722 1,015 Peabody Energy Corp. (Ba3 Moodys) 6.875% due 03/15/13............................. 1,071 -------- 11,313 -------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ -------- CONSUMER NON-DURABLES -- 3.2% $ 900 Airgas, Inc. (Ba1 Moodys) 7.75% due 09/15/06.............................. $ 945 1,200 Airgas, Inc. (Ba2 Moodys) 9.125% due 10/01/11............................. 1,347 430 Hasbro, Inc. (Ba3 Moodys) 6.60% due 07/15/28.............................. 415 1,850 Johnsondiversey, Inc. (B2 Moodys) 9.625% due 05/15/12............................. 2,063 @4,035 Perry Ellis International, Inc. (B3 Moodys) 8.875% due 09/15/13............................. 4,247 3,575 Tyco International Group S.A. (Ba2 Moodys) 6.375% due 02/15/06............................. 3,807 +5,375 Tyco International Group S.A. (Ba2 Moodys) 6.75% due 02/15/11.............................. 5,872 +1,800 Xerox Corp. (B1 Moodys) 7.125% due 06/15/10............................. 1,926 990 Xerox Corp. (B1 Moodys) 7.625% due 06/15/13............................. 1,069 1,445 Xerox Corp. (B1 Moodys) 9.75% due 01/15/09.............................. 1,691 -------- 23,382 -------- CONSUMER SERVICES -- 1.2% @520 Donnelley (R.H.) Finance Corp. (B1 Moodys) 8.875% due 12/15/10............................. 585 @630 Sensus Metering Systems (Caa1 Moodys) 8.625% due 12/15/13............................. 647 +4,030 Service Corp. International (B1 Moodys) 6.50% due 03/15/08.............................. 4,141 830 Service Corp. International (B1 Moodys) 7.70% due 04/15/09.............................. 886 2,000 Service Corp. International (B1 Moodys) 7.70% due 04/15/09.............................. 2,135 400 Service Corp. International (B1 Moodys) 7.875% due 02/01/13............................. 407 -------- 8,801 -------- DRUGS -- 0.1% 800 Watson Pharmaceuticals, Inc. (Ba1 Moodys) 7.125% due 05/15/08............................. 859 -------- </Table> The accompanying notes are an integral part of this financial statement. 60 - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ -------- CORPORATE NOTES V -- (CONTINUED) ELECTRICAL EQUIPMENT -- 1.2% $ 1,285 Bio-Rad Laboratories, Inc. (Ba3 Moodys) 7.50% due 08/15/13.............................. $ 1,414 1,070 Fisher Scientific International (B2 Moodys) 8.00% due 09/01/13.............................. 1,148 782 Fisher Scientific International (B2 Moodys) 8.125% due 05/01/12............................. 839 5,000 PerkinElmer, Inc. (Ba3 Moodys) 8.875% due 01/15/13............................. 5,725 -------- 9,126 -------- ELECTRONICS -- 0.5% +900 Amkor Technology, Inc. (B1 Moodys) 7.75% due 05/15/13.............................. 965 2,735 Rayovac Corp. (B3 Moodys) 8.50% due 10/01/13.............................. 2,899 -------- 3,864 -------- ENERGY & SERVICES -- 4.6% @1,340 Chesapeake Energy Corp. (Ba3 Moodys) 6.875% due 01/15/16............................. 1,380 720 Chesapeake Energy Corp. (Ba3 Moodys) 7.50% due 09/15/13.............................. 779 +955 CONSOL Energy, Inc. (Ba3 Moodys) 7.875% due 03/01/12............................. 1,008 1,805 Forest Oil Corp. (Ba3 Moodys) 8.00% due 06/15/08.............................. 1,967 @250 Houston Exploration Co. (B2 Moodys) 7.00% due 06/15/13.............................. 258 300 Key Energy Services, Inc. (Ba2 Moodys) 6.375% due 05/01/13............................. 305 920 Key Energy Services, Inc. (Ba2 Moodys) 8.375% due 03/01/08............................. 984 +1,385 Magnum Hunter Resources, Inc. (B2 Moodys) 9.60% due 03/15/12.............................. 1,572 3,000 Newfield Exploration Co. (Ba2 Moodys) 7.45% due 10/15/07.............................. 3,315 1,425 Newfield Exploration Co. (Ba2 Moodys) 7.625% due 03/01/11............................. 1,589 1,300 Newpark Resources, Inc. (B2 Moodys) 8.625% due 12/15/07............................. 1,346 +375 Nuevo Energy Co. (B2 Moodys) 9.375% due 10/01/10............................. 412 161 Nuevo Energy Co. (B2 Moodys) 9.50% due 06/01/08.............................. 169 1,750 Pioneer Natural Resources Co. (Ba1 Moodys) 6.50% due 01/15/08.............................. 1,894 3,670 Pioneer Natural Resources Co. (Ba1 Moodys) 7.20% due 01/15/28.............................. 3,929 500 Pioneer Natural Resources Co. (Ba1 Moodys) 9.625% due 04/01/10............................. 622 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ -------- ENERGY & SERVICES -- (CONTINUED) $ 800 Plains Exploration & Production Co. (B2 Moodys) 8.75% due 07/01/12.............................. $ 879 1,480 Port Arthur Finance Corp. (Ba3 Moodys) 12.50% due 01/15/09............................. 1,758 215 Premcor Refining Group, Inc. (The) (Ba3 Moodys) 9.25% due 02/01/10.............................. 241 @1,395 Southern Star Central Corp. (B1 Moodys) 8.50% due 08/01/10.............................. 1,541 470 Star Gas Partners LP (B3 Moodys) 10.25% due 02/15/13............................. 512 1,250 TECO Energy, Inc. (Ba1 Moodys) 10.50% due 12/01/07............................. 1,459 +2,595 TECO Energy, Inc. (Ba1 Moodys) 7.20% due 05/01/11.............................. 2,699 1,960 Tesoro Petroleum Corp. (Ba3 Moodys) 8.00% due 04/15/08.............................. 2,083 485 Tom Brown, Inc. (Ba3 Moodys) 7.25% due 09/15/13.............................. 513 685 Vintage Petroleum, Inc. (Ba3 Moodys) 8.25% due 05/01/12.............................. 745 @200 Westport Resources Corp. (Ba3 Moodys) 8.25% due 11/01/11.............................. 220 -------- 34,179 -------- FINANCIAL SERVICES -- 2.9% @700 Couche-Tard Finance Corp. (Ba3 Moodys) 7.50% due 12/15/13.............................. 733 5,050 Felcor Lodging LP (B1 Moodys) 10.00% due 09/15/08............................. 5,454 201 HMH Properties, Inc. (Ba3 Moodys) 8.45% due 12/01/08.............................. 210 4,600 Host Marriott Corp. (Ba3 Moodys) 7.875% due 08/01/08............................. 4,784 @1,295 Host Marriott LP (Ba3 Moodys) 7.125% due 11/01/13............................. 1,321 450 Host Marriott LP (Ba3 Moodys) 9.25% due 10/01/07.............................. 503 @675 Poster Financial Group, Inc. (B2 Moodys) 8.75% due 12/01/11.............................. 714 60 RFS Partnership LP (B2 Moodys) 9.75% due 03/01/12.............................. 64 2,500 Senior Housing Properties Trust (Ba2 Moodys) 7.875% due 04/15/15............................. 2,625 1,310 Tanger Properties LP (Ba1 Moodys) 7.875% due 10/24/04............................. 1,357 </Table> The accompanying notes are an integral part of this financial statement. 61 HARTFORD HIGH YIELD HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ -------- CORPORATE NOTES V -- (CONTINUED) FINANCIAL SERVICES -- (CONTINUED) $ 1,000 Tanger Properties LP (Ba1 Moodys) 9.125% due 02/15/08............................. $ 1,090 2,130 Ventas, Inc. (Ba3 Moodys) 9.00% due 05/01/12.............................. 2,364 -------- 21,219 -------- FOOD, BEVERAGE & TOBACCO -- 2.7% 170 B&G Foods, Inc. (B3 Moodys) 9.625% due 08/01/07............................. 175 720 Canandaigua Brands, Inc. (Ba2 Moodys) 8.625% due 08/01/06............................. 799 1,070 Del Monte Corp. (B2 Moodys) 8.625% due 12/15/12............................. 1,172 5,880 Delhaize America, Inc. (Ba1 Moodys) 8.125% due 04/15/11............................. 6,762 900 Delhaize America, Inc. (Ba1 Moodys) 9.00% due 04/15/31.............................. 1,094 390 Hercules, Inc. (Ba1 Moodys) 6.60% due 08/01/27.............................. 397 +1,400 Hercules, Inc. (Ba2 Moodys) 11.125% due 11/15/07............................ 1,677 4,500 PSF Group Holdings, Inc. (B1 Moodys) 9.25% due 06/15/11.............................. 4,545 1,725 Smithfield Foods, Inc. (Ba2 Moodys) 7.75% due 05/15/13.............................. 1,794 955 Smithfield Foods, Inc. (Ba2 Moodys) 8.00% due 10/15/09.............................. 1,008 @400 United Agri Products (B3 Moodys) 8.25% due 12/15/11.............................. 411 -------- 19,834 -------- FOREST & PAPER PRODUCTS -- 3.9% 4,075 Abitibi Consolidated Finance LP (Ba1 Moodys) 7.875% due 08/01/09............................. 4,407 1,740 Boise Cascade Corp. (Ba2 Moodys) 7.35% due 02/01/16.............................. 1,766 1,460 Boise Cascade Corp. (Ba2 Moodys) 7.50% due 02/01/08.............................. 1,567 3,450 Bowater Canada Finance (Ba1 Moodys) 7.95% due 11/15/11.............................. 3,664 +2,300 Bowater, Inc. (Ba1 Moodys) 6.50% due 06/15/13.............................. 2,232 600 Georgia-Pacific Corp. (Ba3 Moodys) 7.25% due 06/01/28.............................. 575 1,230 Georgia-Pacific Corp. (Ba3 Moodys) 7.50% due 05/15/06.............................. 1,301 @2,250 Georgia-Pacific Corp. (Ba3 Moodys) 8.00% due 01/15/24.............................. 2,295 +580 Georgia-Pacific Corp. (Ba3 Moodys) 8.875% due 05/15/31............................. 638 825 Georgia-Pacific Corp. (Ba3 Moodys) 9.875% due 11/01/21............................. 862 780 Longview Fibre Co. (B2 Moodys) 10.00% due 01/15/09............................. 856 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ -------- FOREST & PAPER PRODUCTS -- (CONTINUED) $ 1,350 Potlatch Corp. (Baa3 Moodys) 12.50% due 12/01/09............................. $ 1,620 665 Smurfit-Stone Container Corp. (B2 Moodys) 7.50% due 06/01/13.............................. 695 1,000 Smurfit-Stone Container Corp. (B2 Moodys) 8.25% due 10/01/12.............................. 1,085 5,050 Stone Container Corp. (B2 Moodys) 9.75% due 02/01/11.............................. 5,580 -------- 29,143 -------- HEALTH SERVICES -- 2.7% +1,900 HCA, Inc. (Ba1 Moodys) 6.95% due 05/01/12.............................. 2,037 170 HCA, Inc. (Ba1 Moodys) 7.00% due 07/01/07.............................. 186 1,261 HCA, Inc. (Ba1 Moodys) 7.125% due 06/01/06............................. 1,366 530 HCA, Inc. (Ba1 Moodys) 7.50% due 11/15/95.............................. 508 1,400 Manor Care, Inc. (Ba1 Moodys) 7.50% due 06/15/06.............................. 1,519 270 Manor Care, Inc. (Ba1 Moodys) 8.00% due 03/01/08.............................. 305 @1,415 Mariner Health Care, Inc. (B3 Moodys) 8.25% due 12/15/13.............................. 1,429 2,200 Province Healthcare Co. (B3 Moodys) 7.50% due 06/01/13.............................. 2,200 2,110 Select Medical Corp. (B2 Moodys) 7.50% due 08/01/13.............................. 2,237 1,380 Select Medical Corp. (B2 Moodys) 9.50% due 06/15/09.............................. 1,515 +500 Tenet Healthcare Corp. (B1 Moodys) 5.00% due 07/01/07.............................. 484 795 Tenet Healthcare Corp. (B1 Moodys) 6.375% due 12/01/11............................. 763 2,000 Tenet Healthcare Corp. (B1 Moodys) 6.50% due 06/01/12.............................. 1,918 1,955 Tenet Healthcare Corp. (B1 Moodys) 7.375% due 02/01/13............................. 1,965 620 United Surgical Partners International, Inc. (B3 Moodys) 10.00% due 12/15/11............................. 704 570 Ventas Realty LP (Ba3 Moodys) 8.75% due 05/01/09.............................. 626 -------- 19,762 -------- HOTELS & GAMING -- 4.5% 2,000 Aztar Corp. (Ba3 Moodys) 8.875% due 05/15/07............................. 2,088 1,150 Boyd Gaming Corp. (Ba3 Moodys) 9.25% due 08/01/09.............................. 1,285 6,445 Hammons (John Q.) Hotels LP (B2 Moodys) 8.875% due 05/15/12............................. 7,106 </Table> The accompanying notes are an integral part of this financial statement. 62 - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ -------- CORPORATE NOTES V -- (CONTINUED) HOTELS & GAMING -- (CONTINUED) $ 2,100 Hilton Hotels Corp. (Ba1 Moodys) 7.625% due 05/15/08............................. $ 2,336 +750 Hilton Hotels Corp. (Ba1 Moodys) 7.625% due 12/01/12............................. 843 1,000 Hilton Hotels Corp. (Ba1 Moodys) 8.25% due 02/15/11.............................. 1,153 +1,200 MGM Mirage, Inc. (Ba1 Moodys) 6.875% due 02/06/08............................. 1,281 1,400 MGM Mirage, Inc. (Ba1 Moodys) 8.50% due 09/15/10.............................. 1,607 +1,450 MGM Mirage, Inc. (Ba2 Moodys) 8.375% due 02/01/11............................. 1,642 900 Mandalay Resort Group (Ba3 Moodys) 7.625% due 07/15/13............................. 956 +950 Mandalay Resort Group (Ba2 Moodys) 6.50% due 07/31/09.............................. 986 1,570 Mandalay Resort Group (Ba2 Moodys) 9.50% due 08/01/08.............................. 1,833 +2,790 Mirage Resorts, Inc. (Ba1 Moodys) 7.25% due 10/15/06.............................. 3,006 980 Mohegan Tribal Gaming Authority (Ba2 Moodys) 8.125% due 01/01/06............................. 1,056 3,700 Starwood Hotels & Resorts Worldwide, Inc. (Ba1 Moodys) 7.375% due 05/01/07............................. 3,996 1,450 Starwood Hotels & Resorts Worldwide, Inc. (Ba1 Moodys) 7.875% due 05/01/12............................. 1,631 515 Venetian Casino (B3 Moodys) 11.00% due 06/15/10............................. 597 -------- 33,402 -------- INSURANCE -- 0.0% 250 AdvancePCS (Ba2 Moodys) 8.50% due 04/01/08.............................. 271 -------- MACHINERY -- 2.2% 3,021 Agco Corp. (Ba3 Moodys) 9.50% due 05/01/08.............................. 3,308 510 American Standard Cos., Inc. (Ba2 Moodys) 7.375% due 02/01/08............................. 564 +1,540 Briggs & Stratton Corp. (Ba1 Moodys) 8.875% due 03/15/11............................. 1,810 1,920 Cummins, Inc. (Ba2 Moodys) 6.75% due 02/15/27.............................. 2,011 635 Cummins, Inc. (Ba2 Moodys) 7.125% due 03/01/28............................. 591 450 Joy Global, Inc. (B2 Moodys) 8.75% due 03/15/12.............................. 502 650 SPX Corp. (Ba3 Moodys) 6.25% due 06/15/11.............................. 668 1,600 SPX Corp. (Ba3 Moodys) 7.50% due 01/01/13.............................. 1,740 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ -------- MACHINERY -- (CONTINUED) $ +975 Terex Corp. (B3 Moodys) 10.375% due 04/01/11............................ $ 1,092 @3,970 Terex Corp. (B3 Moodys) 7.375% due 01/15/14............................. 4,059 -------- 16,345 -------- MEDIA & ENTERTAINMENT -- 5.1% 1,170 American Greetings Corp. (Ba1 Moodys) 6.10% due 08/01/28.............................. 1,205 @375 CBD Media, Inc. (B3 Moodys) 8.625% due 06/01/11............................. 413 1,500 CSC Holdings, Inc. (B1 Moodys) 7.25% due 07/15/08.............................. 1,560 +1,000 CSC Holdings, Inc. (B1 Moodys) 7.625% due 04/01/11............................. 1,053 500 CSC Holdings, Inc. (B1 Moodys) 7.875% due 12/15/07............................. 528 950 CSC Holdings, Inc. (B1 Moodys) 8.125% due 07/15/09............................. 1,021 2,000 Cablevision Systems Corp. (B1 Moodys) 8.125% due 08/15/09............................. 2,150 +1,820 Charter Communications Holdings LLC (Ca Moodys) 10.00% due 04/01/09............................. 1,620 1,395 Charter Communications Holdings LLC (Ca Moodys) 10.00% due 05/15/11............................. 1,214 +5,355 Charter Communications Holdings LLC (Ca Moodys) 9.625% due 11/15/09............................. 4,712 @2,875 EchoStar DBS Corp. (Ba3 Moodys) 5.75% due 10/01/08.............................. 2,907 2,566 EchoStar DBS Corp. (Ba3 Moodys) 9.125% due 01/15/09............................. 2,871 2,450 EchoStar DBS Corp. (Ba3 Moodys) 9.375% due 02/01/09............................. 2,576 2,130 Hollinger International Publishing (B2 Moodys) 9.00% due 12/15/10.............................. 2,263 +1,300 Mediacom LLC (B2 Moodys) 9.50% due 01/15/13.............................. 1,378 @1,350 Medianews Group, Inc. (B2 Moodys) 6.875% due 10/01/13............................. 1,374 +2,000 Park Place Entertainment Corp. (Ba1 Moodys) 7.50% due 09/01/09.............................. 2,200 1,100 Park Place Entertainment Corp. (Ba2 Moodys) 8.125% due 05/15/11............................. 1,233 550 Park Place Entertainment Corp. (Ba2 Moodys) 9.375% due 02/15/07............................. 623 +350 PRIMEDIA, Inc. (B3 Moodys) 7.625% due 04/01/08............................. 354 @1,300 PRIMEDIA, Inc. (B3 Moodys) 8.00% due 05/15/13.............................. 1,326 </Table> The accompanying notes are an integral part of this financial statement. 63 HARTFORD HIGH YIELD HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ -------- CORPORATE NOTES V -- (CONTINUED) MEDIA & ENTERTAINMENT -- (CONTINUED) $ 2,100 Six Flags, Inc. (B2 Moodys) 8.875% due 02/01/10............................. $ 2,155 +300 Six Flags, Inc. (B2 Moodys) 9.50% due 02/01/09.............................. 314 +730 Time Warner Telecom, Inc. (B3 Moodys) 9.75% due 07/15/08.............................. 752 -------- 37,802 -------- MEDICAL INSTRUMENTS & SUPPLIES -- 0.4% 1,095 Bausch & Lomb, Inc. (Ba1 Moodys) 6.95% due 11/15/07.............................. 1,196 305 Hanger Orthopedic Group, Inc. (B2 Moodys) 10.375% due 02/15/09............................ 346 @695 Medex, Inc. (B3 Moodys) 8.875% due 05/15/13............................. 747 470 Omnicare, Inc. (Ba2 Moodys) 6.125% due 06/01/13............................. 471 -------- 2,760 -------- METALS, MINERALS & MINING -- 1.1% +400 AK Steel Holding Corp. (B3 Moodys) 7.75% due 06/15/12.............................. 342 +3,410 AK Steel Holding Corp. (B3 Moodys) 7.875% due 02/15/09............................. 2,992 2,180 Ball Corp. (Ba3 Moodys) 6.875% due 12/15/12............................. 2,278 495 Crown Cork & Seal Co. (B3 Moodys) 8.00% due 04/15/23.............................. 463 290 Cyprus Amax Minerals Co. (Baa3 Moodys) 8.375% due 02/01/23............................. 301 375 Earle M. Jorgensen Co. (B2 Moodys) 9.75% due 06/01/12.............................. 416 1,140 United States Steel LLC (B1 Moodys) 10.75% due 08/01/08............................. 1,334 -------- 8,126 -------- REAL ESTATE -- 0.9% 640 Forest City Enterprises, Inc. (Ba3 Moodys) 7.625% due 06/01/15............................. 679 3,025 LNR Property Corp. (Ba3 Moodys) 7.625% due 07/15/13............................. 3,184 2,330 Stewart Enterprises, Inc. (B2 Moodys) 10.75% due 07/01/08............................. 2,633 -------- 6,496 -------- RETAIL -- 2.9% 1,190 Ahold Finance USA, Inc. (B1 Moodys) 8.25% due 07/15/10.............................. 1,297 750 Autonation, Inc. (Ba2 Moodys) 9.00% due 08/01/08.............................. 861 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ -------- RETAIL -- (CONTINUED) $ 255 Dillard's, Inc. (B2 Moodys) 7.13% due 08/01/18.............................. $ 252 560 Dillard's, Inc., Class A (B2 Moodys) 7.375% due 06/01/06............................. 580 @935 General Nutrition Centers (B3 Moodys) 8.50% due 12/01/10.............................. 958 750 Ingles Markets, Inc. (Ba3 Moodys) 8.875% due 12/01/11............................. 754 850 Penney (J.C.) Co., Inc. (Ba3 Moodys) 7.65% due 08/15/16.............................. 932 1,825 Penney (J.C.) Co., Inc. (Ba3 Moodys) 8.125% due 04/01/27............................. 1,982 +1,232 Penney (J.C.) Co., Inc. (Ba3 Moodys) 8.25% due 08/15/22.............................. 1,274 1,500 Saks, Inc. (B1 Moodys) 7.50% due 12/01/10.............................. 1,628 5,400 Sonic Automotive, Inc. (B2 Moodys) 8.625% due 08/15/13............................. 5,697 @940 Suburban Propane Partners LP (B1 Moodys) 6.875% due 12/15/13............................. 949 410 Toys "R" Us, Inc. (Baa3 Moodys) 7.375% due 10/15/18............................. 410 1,285 United Auto Group, Inc. (B3 Moodys) 9.625% due 03/15/12............................. 1,439 2,000 YUM! Brands, Inc. (Ba1 Moodys) 7.70% due 07/01/12.............................. 2,303 -------- 21,316 -------- RUBBER & PLASTICS PRODUCTS -- 0.3% 1,097 Armkel LLC (B2 Moodys) 9.50% due 08/15/09.............................. 1,204 955 Plastipak Holdings, Inc. (B3 Moodys) 10.75% due 09/01/11............................. 1,062 -------- 2,266 -------- SOFTWARE & SERVICES -- 0.3% +1,100 Unisys Corp. (Ba1 Moodys) 7.25% due 01/15/05.............................. 1,140 550 Unisys Corp. (Ba1 Moodys) 7.875% due 04/01/08............................. 570 700 United Components, Inc. (B3 Moodys) 9.375% due 06/15/13............................. 765 -------- 2,475 -------- TRANSPORTATION -- 2.2% 1,850 Dana Corp. (Ba3 Moodys) 6.50% due 03/15/08.............................. 1,954 1,350 Dana Corp. (Ba3 Moodys) 7.00% due 03/01/29.............................. 1,342 +@1,400 Dana Credit Corp. (Ba3 Moodys) 8.375% due 08/15/07............................. 1,505 +120 Delta Airlines, Inc. (B3 Moodys) 7.90% due 12/15/09.............................. 97 2,435 Delta Airlines, Inc. (B3 Moodys) 8.30% due 12/15/29.............................. 1,610 </Table> The accompanying notes are an integral part of this financial statement. 64 - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ -------- CORPORATE NOTES V -- (CONTINUED) TRANSPORTATION -- (CONTINUED) $ +633 Delta Airlines, Inc. (B3 Moodys) 9.00% due 05/15/16.............................. $ 457 1,500 Delta Airlines, Inc. (Baa2 Moodys) 7.57% due 11/18/10.............................. 1,554 3,410 Group 1 Automotive, Inc. (B1 Moodys) 8.25% due 08/15/13.............................. 3,649 +726 Navistar International Corp. (Ba3 Moodys) 9.375% due 06/01/06............................. 801 1,075 Sequa Corp. (B1 Moodys) 8.875% due 04/01/08............................. 1,166 365 TD Funding Corp. (B3 Moodys) 8.375% due 07/15/11............................. 388 1,060 TRW Automotive, Inc. (B1 Moodys) 9.375% due 02/15/13............................. 1,211 @605 Wabtec Corp. (Ba2 Moodys) 6.875% due 07/31/13............................. 627 -------- 16,361 -------- UTILITIES -- 13.3% @5,280 AES Corp. (The) (B2 Moodys) 8.75% due 05/15/13.............................. 5,900 405 Allied Waste North America, Inc. (Ba3 Moodys) 7.625% due 01/01/06............................. 426 +2,570 Allied Waste North America, Inc. (Ba3 Moodys) 7.875% due 01/01/09............................. 2,679 1,100 Allied Waste North America, Inc. (Ba3 Moodys) 7.875% due 04/15/13............................. 1,191 2,800 Allied Waste North America, Inc. (Ba3 Moodys) 8.875% due 04/02/08............................. 3,136 +350 Allied Waste North America, Inc. (Ba3 Moodys) 9.25% due 09/01/12.............................. 397 3,150 Aquila, Inc. (B S&P) 7.625% due 11/15/09............................. 3,095 650 Browning-Ferris Industries, Inc. (Ba3 Moodys) 6.375% due 01/15/08............................. 645 1,505 Browning-Ferris Industries, Inc. (Ba3 Moodys) 7.40% due 09/15/35.............................. 1,426 500 Browning-Ferris Industries, Inc. (Ba3 Moodys) 7.875% due 03/15/05............................. 523 @1,180 CMS Energy Corp. (B3 Moodys) 7.75% due 08/01/10.............................. 1,240 120 CMS Energy Corp. (B3 Moodys) 8.50% due 04/15/11.............................. 130 +2,215 CMS Energy Corp. (B3 Moodys) 8.90% due 07/15/08.............................. 2,403 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ -------- UTILITIES -- (CONTINUED) $ +8,400 Calpine Canada Energy Finance LLC (Caa1 Moodys) 8.50% due 05/01/08.............................. $ 6,699 +200 Calpine Corp. (Caa1 Moodys) 8.625% due 08/15/10............................. 156 +@2,635 Calpine Corp. (NA Moodys) 8.75% due 07/15/13.............................. 2,569 @1,750 Centerpoint Energy Resources (Ba1 Moodys) 7.875% due 04/01/13............................. 1,981 @1,500 Centerpoint Energy, Inc. (Ba1Moodys) 6.85% due 06/01/15.............................. 1,542 @3,740 Dynegy Holdings, Inc. (B3 Moodys) 10.125% due 07/15/13............................ 4,301 +940 Edison Mission Energy (B2 Moodys) 7.73% due 06/15/09.............................. 895 3,915 Edison Mission Energy (B2 Moodys) 9.875% due 04/15/11............................. 4,072 +975 El Paso Corp. (Caa1 Moodys) 7.75% due 01/15/32.............................. 831 960 El Paso Corp. (Caa1 Moodys) 7.80% due 08/01/31.............................. 817 +3,500 El Paso Corp. (Caa1 Moodys) 7.875% due 06/15/12............................. 3,308 125 El Paso Electric Co. (Baa3 Moodys) 9.40% due 05/01/11.............................. 146 9,070 El Paso Natural Gas Co. (B1 Moodys) 7.625% due 08/01/10............................. 9,319 1,315 GulfTerra Energy Partners LP (Ba3 Moodys) 6.25% due 06/01/10.............................. 1,368 1,145 Illinois Power Co. (B3 Moodys) 11.50% due 12/15/10............................. 1,374 1,275 Illinova Corp. (B3 Moodys) 7.50% due 06/15/09.............................. 1,403 2,215 Illinova Corp. (B3 Moodys) 7.50% due 07/15/25.............................. 2,193 560 Kansas Gas & Electric Co. (Ba1 Moodys) 6.50% due 08/01/05.............................. 585 935 Kansas Gas & Electric Co. (Ba2 Moodys) 8.29% due 03/29/16.............................. 975 1,510 Monongahela Power Co. (Ba1Moodys) 5.00% due 10/01/06.............................. 1,536 @440 Nevada Power Co. (Ba2 Moodys) 9.00% due 08/15/13.............................. 487 150 NorAm Energy Corp. (Ba1 Moodys) 7.75% due 02/15/11.............................. 169 @1,455 PG&E Corp. (Not Rated) 6.875% due 07/15/08............................. 1,575 +1,780 Sierra Pacific Power Co. (Ba2 Moodys) 8.00% due 06/01/08.............................. 1,927 1,230 Sierra Pacific Resources (Ba2 Moodys) 6.20% due 04/15/04.............................. 1,238 1,100 Sierra Pacific Resources (Ba2 Moodys) 8.50% due 01/01/23.............................. 1,123 </Table> The accompanying notes are an integral part of this financial statement. 65 HARTFORD HIGH YIELD HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT I VALUE # - ------------ -------- CORPORATE NOTES V -- (CONTINUED) UTILITIES -- (CONTINUED) 1,000 Southern California Edison (Baa2 Moodys) 8.00% due 02/15/07.............................. $ 1,144 2,100 Tennessee Gas Pipeline Co. (B1 Moodys) 7.50% due 04/01/17.............................. 2,168 440 Texas Utilities Co. (Ba1 Moodys) 6.375% due 01/01/08............................. 463 1,700 Transcontinental Gas Pipe Corp. (B1 Moodys) 8.875% due 07/15/12............................. 2,010 1,865 Westar Energy, Inc. (Ba1 Moodys) 8.50% due 07/01/22.............................. 1,963 860 Westar Energy, Inc. (Ba2 Moodys) 9.75% due 05/01/07.............................. 977 1,000 Western Resources, Inc. (Ba1 Moodys) 7.65% due 04/15/23.............................. 1,051 +1,000 Williams Cos., Inc. (The) (B3 Moodys) 8.125% due 03/15/12............................. 1,110 4,210 Williams Cos., Inc. (The) (B3 Moodys) 8.625% due 06/01/10............................. 4,726 2,500 Williams Cos., Inc. (The) (B3 Moodys) 8.75% due 03/15/32.............................. 2,825 @3,260 Xcel Energy, Inc. (B2 Moodys) 8.00% due 12/15/13.............................. 3,427 -------- 97,644 -------- Total corporate notes............................. $559,826 ======== FOREIGN/YANKEE BONDS & NOTES V -- 13.0% CHEMICALS -- 0.9% 400 Methanex Corp. (Ba1 Moodys) 7.75% due 08/15/05.............................. $ 422 1,275 Methanex Corp. (Ba1 Moodys) 8.75% due 08/15/12.............................. 1,422 +@1,800 Rhodia S.A. (Caa1 Moodys) 8.875% due 06/01/11............................. 1,656 EUR @3,250 Rhodia S.A. (Caa1 Moodys) 9.25% due 06/01/11.............................. 3,341 -------- 6,841 -------- COMMUNICATIONS -- 4.1% 1,000 CF Cable TV, Inc. (Ba3 Moodys) 9.125% due 07/15/07............................. 1,055 EUR L780 KPNQwest N.V. (Default) 7.125% due 06/01/09............................. 5 @@L2,665 KPNQwest N.V. (Default) 8.125% due 06/01/09............................. -- 362 Marconi Corp., PLC (Not Rated) 10.00% due 10/31/08............................. 380 835 Marconi Corp., PLC (Not Rated) 8.00% due 04/30/08.............................. 847 7,960 Nortel Networks Corp. (B3 Moodys) 4.25% due 09/01/08.............................. 7,532 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT I VALUE # - ------------ -------- COMMUNICATIONS -- (CONTINUED) 835 Nortel Networks Corp. (B3 Moodys) 6.875% due 09/01/23............................. $ 793 2,785 Rogers Cable, Inc. (Ba2 Moodys) 6.25% due 06/15/13.............................. 2,806 4,200 Rogers Cable, Inc. (Ba2 Moodys) 8.75% due 05/01/32.............................. 4,783 3,725 Rogers Cantel, Inc. (Ba3 Moodys) 9.375% due 06/01/08............................. 3,897 575 Rogers Cantel, Inc. (Ba3 Moodys) 9.75% due 06/01/16.............................. 693 550 Rogers Wireless Communications, Inc. (Ba3 Moodys) 9.625% due 05/01/11............................. 657 3,250 TELUS Corp. (Ba1 Moodys) 8.00% due 06/01/11.............................. 3,800 @2,850 Vivendi Universal S.A. (B1 Moodys) 6.25% due 07/15/08.............................. 3,001 -------- 30,249 -------- CONSUMER DURABLES -- 0.3% EUR @1,875 BSN Glasspack Obligation S.A. (B1 Moodys) 9.25% due 08/01/09.............................. 2,531 -------- ELECTRONICS -- 0.3% 2,030 FIMEP S.A. (B1 Moodys) 10.50% due 02/15/13............................. 2,395 -------- FINANCIAL SERVICES -- 0.2% EUR @1,200 Fresenius Finance B.V. (BB+ S&P) 7.75% due 04/30/09.............................. 1,635 -------- FOOD, BEVERAGE & TOBACCO -- 0.5% @3,350 Burns Philp Capital Property Ltd. (B3 Moodys) 9.75% due 07/15/12.............................. 3,585 EUR @285 Remy Cointreau S.A. (Ba2 Moodys) 6.50% due 07/01/10.............................. 372 -------- 3,957 -------- FOREIGN GOVERNMENTS -- 2.3% 1,850 Brazilian Government International Bond (B2 Moodys) 10.00% due 08/07/11............................. 2,044 1,350 Brazilian Government International Bond (B2 Moodys) 12.75% due 01/15/20............................. 1,715 EUR 3,700 Bundesschatzanweisungen (Aaa Moodys) 2.50% due 09/16/05.............................. 4,667 2,225 Colombia Government International Bond (Ba2 Moodys) 10.00% due 01/23/12............................. 2,436 1,255 Republic of Panama (Ba1 Moodys) 9.625% due 02/08/11............................. 1,450 </Table> The accompanying notes are an integral part of this financial statement. 66 - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT I VALUE # - ------------ -------- FOREIGN/YANKEE BONDS & NOTES V -- (CONTINUED) FOREIGN GOVERNMENTS -- (CONTINUED) GBP $1,550 U.K. Treasury Gilt (Aaa Moodys) 8.50% due 12/07/05.............................. $ 2,990 1,900 Venezuela Government International Bond (Caa1 Moodys) 9.25% due 09/15/27.............................. 1,729 -------- 17,031 -------- FOREST & PAPER PRODUCTS -- 1.9% +950 Abitibi-Consolidated, Inc. (Ba1 Moodys) 6.00% due 06/20/13.............................. 911 1,400 Abitibi-Consolidated, Inc. (Ba1 Moodys) 8.85% due 08/01/30.............................. 1,513 3,030 Cascade, Inc. (Ba1 Moodys) 7.25% due 02/15/13.............................. 3,197 EUR 585 Kappa Beheer BV (B2 Moodys) 10.625% due 07/15/09............................ 786 +1,395 Norske Skogindustrier (Ba2 Moodys) 8.625% due 06/15/11............................. 1,465 635 Pacifica Papers, Inc. (Ba2 Moodys) 10.00% due 03/15/09............................. 673 3,512 Tembec Industries, Inc. (Ba3 Moodys) 7.75% due 03/15/12.............................. 3,494 +875 Tembec Industries, Inc. (Ba3 Moodys) 8.50% due 02/01/11.............................. 906 1,450 Tembec Industries, Inc. (Ba3 Moodys) 8.625% due 06/30/09............................. 1,494 -------- 14,439 -------- HOTELS & GAMING -- 0.2% @1,310 Intrawest Corp. (B1 Moodys) 7.50% due 10/15/13.............................. 1,362 -------- MACHINERY -- 0.1% EUR 381 Flowserve Finance BV (B S&P) 12.25% due 08/15/10............................. 543 -------- MEDIA & ENTERTAINMENT -- 1.4% 2,150 British Sky Broadcasting PLC (Baa3 Moodys) 8.20% due 07/15/09.............................. 2,560 2,640 CanWest Media, Inc. (B1 Moodys) 7.625% due 04/15/13............................. 2,891 1,445 Quebecor Media, Inc. (B2 Moodys) 11.125% due 07/15/11............................ 1,673 1,600 Shaw Communications, Inc. (Ba2 Moodys) 8.25% due 04/11/10.............................. 1,812 1,000 Sun Media Corp. (Ba3 Moodys) 7.625% due 02/15/13............................. 1,070 -------- 10,006 -------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------ -------- METALS, MINERALS & MINING -- 0.3% $ +1,954 Crown European Holdings S.A. (B1 Moodys) 9.50% due 03/01/11.............................. $ 2,213 -------- RUBBER & PLASTICS PRODUCTS -- 0.1% 340 Norampac, Inc. (Ba2 Moodys) 6.75% due 06/01/13.............................. 354 -------- TRANSPORTATION -- 0.4% @945 Bombardier Recreational (B3 Moodys) 8.375% due 12/15/13............................. 988 1,285 CP Ships Ltd. (Ba3 Moodys) 10.375% due 07/15/12............................ 1,491 -------- 2,479 -------- Total foreign/yankee bonds & notes................ $ 96,035 ======== <Caption> SHARES - ------------ PREFERRED STOCKS -- 0.0% CONSUMER NON-DURABLES -- 0.0% *@4 Xerox Corp. ...................................... $ 311 -------- Total preferred stocks............................ $ 311 ======== WARRANTS -- 0.0% COMMUNICATIONS -- 0.0% *##@@-- Minorplanet System USA, Inc. ..................... $ -- *##3 Powertel, Inc. ................................... 76 *##1 Solutia, Inc. .................................... 29 *##5 TELUS Corp. ...................................... 17 -------- 122 -------- CONSUMER SERVICES -- 0.0% *##1 Splitrock Services, Inc. ......................... 17 -------- Total warrants.................................... $ 139 ======== SHORT-TERM SECURITIES -- 19.6% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 11.1% 81,868 State Street Navigator Securities Lending Prime Portfolio....................................... $ 81,868 -------- <Caption> PRINCIPAL AMOUNT - ------------ REPURCHASE AGREEMENTS -- 8.5% $ 63,085 Joint Repurchase Agreement (See Note 2(d)) 0.84% due 01/02/04.............................. 63,085 -------- Total short-term securities....................... $144,953 ======== </Table> The accompanying notes are an integral part of this financial statement. 67 HARTFORD HIGH YIELD HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET VALUE # --------- DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $1,960)......... 0.4% $ 3,179 Total convertible bonds (cost $1,000)..... 0.2 1,183 Total convertible preferred stocks (cost $2,720)................................. 0.3 2,329 Total corporate notes (cost $526,090)..... 75.6 559,826 Total foreign/yankee bonds & notes (cost $91,261)................................ 13.0 96,035 Total preferred stocks (cost $195)........ 0.0 311 Total warrants (cost $79)................. 0.0 139 Total short-term securities (cost $144,953)............................... 19.6 144,953 ----- --------- Total investment in securities (total cost $768,258) - including $80,201 of securities loaned (See Note 2(i))....... 109.1 807,955 Cash, receivables and other assets........ 2.0 14,805 Securities lending collateral payable to brokers (See Note 2(i))................. (11.1) (81,868) Other liabilities......................... (0.0) (33) ----- --------- Net assets................................ 100.0% $ 740,859 ===== ========= </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 2,800,000 shares authorized; 73,849 shares outstanding..................................... $ 74 Paid in capital................................... 724,752 Accumulated net investment income................. 35,327 Accumulated net realized loss on investments...... (59,038) Unrealized appreciation on investments............ 39,697 Unrealized appreciation on other assets and liabilities in foreign currencies............... 47 -------- Net assets........................................ $740,859 ======== </Table> <Table> Class IA Net asset value per share ($481,315 / 47,848 shares outstanding) (2,600,000 shares authorized)..................................... $10.06 ====== Class IB Net asset value per share ($259,544 / 26,001 shares outstanding) (200,000 shares authorized)..................................... $ 9.98 ====== </Table> <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 13.4% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). @ Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2003, the market value of these securities amounted to $91,377 or 12.3% of net assets (See Note 2(m)). ## Illiquid Securities. At December 31, 2003 the market value of these securities amounted to $2,517 or 0.3% of net assets (See Note 2(m)). - Security valued in good faith at fair value by, or under the direction of, the Funds' Board of Directors. The aggregate value of these securities as of December 31, 2003, was @@$-, which represents 0.0% of total net assets. @@ Due to the presentation of the financial statements in thousands, the number of shares and/or market value round to zero. I All principal amounts are in U.S. dollars unless otherwise indicated. EUR -- Euro GBP -- British Pound V The bond ratings are unaudited. L Debt securities are in default due to bankruptcy. </Table> The accompanying notes are an integral part of this financial statement. 68 HARTFORD INDEX HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- COMMON STOCKS -- 99.5% AEROSPACE & DEFENSE -- 0.1% 86 Raytheon Co. ..................................... $ 2,575 ---------- APPAREL & TEXTILE -- 0.1% 26 Jones Apparel Group, Inc. ........................ 916 23 Liz Claiborne, Inc. .............................. 798 22 V. F. Corp. ...................................... 964 ---------- 2,678 ---------- BANKS -- 13.0% 72 AmSouth Bancorp................................... 1,773 265 American Express Co. ............................. 12,781 113 BB&T Corp. ....................................... 4,352 230 Bank One Corp. ................................... 10,500 306 Bank of America Corp. ............................ 24,625 159 Bank of New York Co., Inc. (The).................. 5,279 48 Capital One Financial Corp. ...................... 2,914 46 Charter One Financial, Inc. ...................... 1,584 1,063 Citigroup, Inc. .................................. 51,592 36 Comerica, Inc. ................................... 2,024 38 Countrywide Credit Industries, Inc. .............. 2,877 143 Federal Home Loan Mortgage Association............ 8,361 200 Federal National Mortgage Association............. 15,030 117 Fifth Third Bancorp............................... 6,930 26 First Tennessee National Corp. ................... 1,142 217 Fleet Boston Financial Corp. ..................... 9,485 31 Golden West Financial Corp. ...................... 3,234 47 Huntington Bancshares, Inc. ...................... 1,060 86 KeyCorp. ......................................... 2,532 263 MBNA Corp. ....................................... 6,542 47 Marshall & Ilsley Corp. .......................... 1,786 89 Mellon Financial Corp. ........................... 2,847 420 Morgan (J.P.) Chase & Co. ........................ 15,440 125 National City Corp. .............................. 4,250 31 North Fork Bancorp, Inc. ......................... 1,267 45 Northern Trust Corp. ............................. 2,109 57 PNC Financial Services Group...................... 3,125 *60 Providian Financial Corp. ........................ 696 46 Regions Financial Corp. .......................... 1,701 93 SLM Corp. ........................................ 3,499 68 SouthTrust Corp. ................................. 2,238 69 State Street Corp. ............................... 3,586 58 SunTrust Banks, Inc. ............................. 4,150 62 Synovus Financial Corp. .......................... 1,798 397 U.S. Bancorp...................................... 11,834 39 Union Planters Corp. ............................. 1,225 273 Wachovia Corp. ................................... 12,707 185 Washington Mutual, Inc. .......................... 7,433 349 Wells Fargo Co. .................................. 20,527 19 Zions Bancorp..................................... 1,135 ---------- 277,970 ---------- BUSINESS SERVICES -- 0.8% *209 Cendant Corp. .................................... 4,648 *96 Concord EFS, Inc. ................................ 1,422 *30 Convergys Corp. .................................. 515 29 Equifax, Inc. .................................... 702 17 Fluor Corp. ...................................... 672 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- BUSINESS SERVICES -- (CONTINUED) 85 Interpublic Group of Cos., Inc. (The)............. $ 1,333 *23 Monster Worldwide, Inc. .......................... 509 39 Omnicom Group, Inc. .............................. 3,421 78 Paychex, Inc. .................................... 2,891 *35 Robert Half International, Inc. .................. 824 ---------- 16,937 ---------- CHEMICALS -- 1.5% 47 Air Products & Chemicals, Inc. ................... 2,475 23 Avery Dennison Corp. ............................. 1,276 190 Dow Chemical Co. (The)............................ 7,882 205 du Pont (E.I.) de Nemours & Co. .................. 9,425 16 Eastman Chemical Co. ............................. 631 10 Great Lakes Chemical Corp. ....................... 283 19 International Flavors & Fragrances, Inc. ......... 676 54 Monsanto Co. ..................................... 1,554 35 PPG Industries, Inc. ............................. 2,239 67 Praxair, Inc. .................................... 2,561 46 Rohm & Haas Co. .................................. 1,959 ---------- 30,961 ---------- COMMUNICATIONS -- 4.6% *166 ADC Telecommunications, Inc. ..................... 493 64 ALLTEL Corp. ..................................... 2,995 163 AT&T Corp. ....................................... 3,303 *559 AT&T Wireless Services, Inc. ..................... 4,468 *32 Andrew Corp. ..................................... 364 *86 Avaya, Inc. ...................................... 1,111 381 BellSouth Corp. .................................. 10,775 *98 CIENA Corp. ...................................... 648 30 CenturyTel, Inc. ................................. 969 *40 Comverse Technology, Inc. ........................ 699 *864 Lucent Technologies, Inc. ........................ 2,454 480 Motorola, Inc. ................................... 6,748 *71 Network Appliance, Inc. .......................... 1,459 *227 Nextel Communications, Inc., Class A.............. 6,357 165 QUALCOMM, Inc. ................................... 8,893 *364 Qwest Communications International, Inc. ......... 1,574 36 Rockwell Collins, Inc. ........................... 1,094 682 SBC Communications, Inc. ......................... 17,783 31 Scientific-Atlanta, Inc. ......................... 854 *213 Sprint Corp. -- PCS Group ........................ 1,199 186 Sprint Corp. -- FON Group ........................ 3,058 *86 Tellabs, Inc. .................................... 725 569 Verizon Communications, Inc. ..................... 19,959 ---------- 97,982 ---------- COMPUTERS & OFFICE EQUIPMENT -- 6.2% 162 3M Co. ........................................... 13,751 *75 Apple Computer, Inc. ............................. 1,595 *1,422 Cisco Systems, Inc. .............................. 34,550 *528 Dell, Inc. ....................................... 17,917 *495 EMC Corp. ........................................ 6,397 *67 Gateway, Inc. .................................... 307 628 Hewlett-Packard Co. .............................. 14,431 354 International Business Machines Corp. ............ 32,855 71 International Game Technology..................... 2,546 </Table> The accompanying notes are an integral part of this financial statement. 69 HARTFORD INDEX HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- COMMON STOCKS -- (CONTINUED) COMPUTERS & OFFICE EQUIPMENT -- (CONTINUED) *41 Jabil Circuit, Inc. .............................. $ 1,166 *27 Lexmark International, Inc. ...................... 2,086 48 Pitney Bowes, Inc. ............................... 1,957 *172 Solectron Corp. .................................. 1,018 48 Symbol Technologies, Inc. ........................ 803 ---------- 131,379 ---------- CONSTRUCTION -- 0.2% 13 Centex Corp. ..................................... 1,377 10 Kaufman & Broad Home Corp. ....................... 693 13 Pulte Corp. ...................................... 1,193 ---------- 3,263 ---------- CONSUMER DURABLES -- 0.5% *274 Corning, Inc. .................................... 2,858 19 Grainger (W.W.), Inc. ............................ 891 19 Johnson Controls, Inc. ........................... 2,157 40 Leggett & Platt, Inc. ............................ 855 95 Masco Corp. ...................................... 2,616 56 Newell Rubbermaid, Inc. .......................... 1,286 27 Visteon Corp. .................................... 281 ---------- 10,944 ---------- CONSUMER NON-DURABLES -- 4.0% 12 Alberto-Culver Co., Class B....................... 762 23 AmerisourceBergen Corp. .......................... 1,297 49 Avon Products, Inc. .............................. 3,290 13 Brown-Forman Corp., Class B....................... 1,170 89 Cardinal Health, Inc. ............................ 5,453 43 Clorox Co. (The).................................. 2,111 111 Colgate-Palmolive Co. ............................ 5,540 59 Eastman Kodak Co. ................................ 1,515 53 Ecolab, Inc. ..................................... 1,452 208 Gillette Co. (The)................................ 7,656 36 Hasbro, Inc. ..................................... 766 89 Mattel, Inc. ..................................... 1,707 60 McKesson Corp. ................................... 1,931 *56 Medco Health Solutions, Inc. ..................... 1,892 267 Procter & Gamble Co. (The)........................ 26,681 133 SYSCO Corp. ...................................... 4,965 *91 Safeway, Inc. .................................... 1,997 28 Supervalu, Inc. .................................. 791 30 Tiffany & Co. .................................... 1,365 +412 Tyco International Ltd. .......................... 10,916 *163 Xerox Corp. ...................................... 2,252 ---------- 85,509 ---------- CONSUMER SERVICES -- 0.2% 35 Cintas Corp. ..................................... 1,765 37 H&R Block, Inc. .................................. 2,034 13 Ryder System, Inc. ............................... 451 ---------- 4,250 ---------- DRUGS -- 7.9% 322 Abbott Laboratories............................... 15,012 *266 Amgen, Inc. ...................................... 16,423 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- DRUGS -- (CONTINUED) *68 Biogen Idec, Inc. ................................ $ 2,483 400 Bristol-Myers Squibb Co. ......................... 11,428 *39 Chiron Corp. ..................................... 2,205 231 Eli Lilly & Co. .................................. 16,272 *75 Forest Laboratories, Inc. ........................ 4,654 *46 Genzyme Corp. .................................... 2,280 *50 King Pharmaceuticals, Inc. ....................... 759 *51 MedImmune, Inc. .................................. 1,295 458 Merck & Co., Inc. ................................ 21,180 1,572 Pfizer, Inc. ..................................... 55,550 303 Schering-Plough Corp. ............................ 5,265 14 Sigma-Aldrich Corp. .............................. 819 *22 Watson Pharmaceuticals, Inc. ..................... 1,022 274 Wyeth............................................. 11,646 ---------- 168,293 ---------- EDUCATION -- 0.1% *36 Apollo Group, Inc. ............................... 2,468 ---------- ELECTRICAL EQUIPMENT -- 0.8% *98 Agilent Technologies, Inc. ....................... 2,866 27 Allergan, Inc. ................................... 2,061 43 Applera Corp. -- Applied Biosystems Group......... 888 32 Danaher Corp. .................................... 2,905 *40 KLA-Tencor Corp. ................................. 2,351 *10 Millipore Corp. .................................. 433 26 PerkinElmer, Inc. ................................ 445 38 Rockwell Automation, Inc. ........................ 1,368 17 Tektronix, Inc. .................................. 550 *39 Teradyne, Inc. ................................... 1,004 *34 Thermo Electron Corp. ............................ 845 *25 Waters Corp. ..................................... 829 ---------- 16,545 ---------- ELECTRONICS -- 7.4% *72 Advanced Micro Devices, Inc. ..................... 1,071 *78 Altera Corp. ..................................... 1,771 41 American Power Conversion Corp. .................. 1,000 76 Analog Devices, Inc. ............................. 3,457 *63 Applied Micro Circuits Corp. ..................... 379 *62 Broadcom Corp., Class A........................... 2,127 19 Cooper Industries Ltd. ........................... 1,113 87 Emerson Electric Co. ............................. 5,615 2,069 General Electric Co. ............................. 64,090 1,346 Intel Corp. ...................................... 43,336 *296 JDS Uniphase Corp. ............................... 1,079 *78 LSI Logic Corp. .................................. 692 64 Linear Technology Corp. .......................... 2,709 68 Maxim Integrated Products, Inc. .................. 3,371 16 Maytag Corp. ..................................... 451 *126 Micron Technology, Inc. .......................... 1,695 39 Molex, Inc. ...................................... 1,370 *33 NVIDIA Corp. ..................................... 777 *38 National Semiconductor Corp. ..................... 1,503 *31 Novellus Systems, Inc. ........................... 1,320 *36 PMC-Sierra, Inc. ................................. 717 *17 Power-One, Inc. .................................. 186 *20 QLogic Corp. ..................................... 1,006 </Table> The accompanying notes are an integral part of this financial statement. 70 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- COMMON STOCKS -- (CONTINUED) ELECTRONICS -- (CONTINUED) *107 Sanmina-SCI Corp. ................................ $ 1,344 357 Texas Instruments, Inc. .......................... 10,477 12 Thomas & Betts Corp. ............................. 277 14 Whirlpool Corp. .................................. 1,042 *71 Xilinx, Inc. ..................................... 2,732 ---------- 156,707 ---------- ENERGY & SERVICES -- 5.7% 18 Amerada Hess Corp. ............................... 983 52 Anadarko Petroleum Corp. ......................... 2,639 33 Apache Corp. ..................................... 2,710 14 Ashland, Inc. .................................... 623 *33 BJ Services Co. .................................. 1,170 41 Burlington Resources, Inc. ....................... 2,267 220 ChevronTexaco Corp. .............................. 19,029 140 Conoco, Inc. ..................................... 9,197 48 Devon Energy Corp. ............................... 2,743 24 EOG Resources, Inc. .............................. 1,094 1,362 Exxon Mobil Corp. ................................ 55,835 90 Halliburton Co. .................................. 2,346 21 Kerr-McGee Corp. ................................. 964 64 Marathon Oil Corp. ............................... 2,115 *30 Nabors Industries Ltd. ........................... 1,255 *28 Noble Corp. ...................................... 988 79 Occidental Petroleum Corp. ....................... 3,351 *19 Rowan Cos., Inc. ................................. 449 121 Schlumberger Ltd. ................................ 6,598 16 Sunoco, Inc. ..................................... 813 *66 Transocean, Inc. ................................. 1,583 53 Unocal Corp. ..................................... 1,966 ---------- 120,718 ---------- FINANCIAL SERVICES -- 2.3% 20 Bear Stearns Cos., Inc. (The)..................... 1,614 279 Charles Schwab Corp. (The)........................ 3,309 22 Federated Investors, Inc., Class B................ 658 52 Franklin Resources, Inc. ......................... 2,693 98 Goldman Sachs Group, Inc. (The)................... 9,636 50 Janus Capital Group, Inc. ........................ 814 56 Lehman Brothers Holdings, Inc. ................... 4,323 195 Merrill Lynch & Co., Inc. ........................ 11,425 223 Morgan Stanley Dean Witter & Co. ................. 12,911 38 Plum Creek Timber Co., Inc. ...................... 1,148 26 T Rowe Price Group, Inc. ......................... 1,218 ---------- 49,749 ---------- FOOD, BEVERAGE & TOBACCO -- 5.0% 8 Adolph Coors Co., Class B......................... 422 418 Altria Group, Inc. ............................... 22,774 168 Anheuser Busch Cos., Inc. ........................ 8,842 133 Archer-Daniels-Midland Co. ....................... 2,028 85 Campbell Soup Co. ................................ 2,265 505 Coca-Cola Co. (The)............................... 25,636 94 Coca-Cola Enterprises, Inc. ...................... 2,049 111 ConAgra Foods, Inc. .............................. 2,918 77 General Mills, Inc. .............................. 3,483 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- FOOD, BEVERAGE & TOBACCO -- (CONTINUED) 72 Heinz (H.J.) Co. ................................. $ 2,640 *23 Hercules, Inc. ................................... 279 27 Hershey Foods Corp. .............................. 2,068 84 Kellogg Co. ...................................... 3,203 29 McCormick & Co., Inc. ............................ 861 54 Pepsi Bottling Group, Inc. (The).................. 1,308 354 PepsiCo, Inc. .................................... 16,488 17 Reynolds (R.J.) Tobacco Holdings, Inc. ........... 1,012 163 Sara Lee Corp. ................................... 3,536 34 UST, Inc. ........................................ 1,219 46 Wrigley (W.M.) Jr. Co. ........................... 2,600 ---------- 105,631 ---------- FOREST & PAPER PRODUCTS -- 0.9% 11 Bemis Co., Inc. .................................. 549 18 Boise Cascade Corp. .............................. 584 52 Georgia-Pacific Corp. ............................ 1,605 99 International Paper Co. .......................... 4,269 104 Kimberly-Clark Corp. ............................. 6,142 *22 Louisiana-Pacific Corp. .......................... 391 41 MeadWestvaco Corp. ............................... 1,231 *32 Pactiv Corp. ..................................... 773 11 Temple-Inland, Inc. .............................. 701 45 Weyerhaeuser Co. ................................. 2,897 ---------- 19,142 ---------- HEALTH SERVICES -- 0.4% *16 Express Scripts, Inc. ............................ 1,076 102 HCA, Inc. ........................................ 4,386 49 Health Management Associates, Inc., Class A....... 1,186 18 Manor Care, Inc. ................................. 634 *96 Tenet Healthcare Corp. ........................... 1,536 ---------- 8,818 ---------- HOTELS & GAMING -- 0.2% 78 Hilton Hotels Corp. .............................. 1,340 48 Marriott International, Inc., Class A............. 2,200 42 Starwood Hotels & Resorts Worldwide, Inc. ........ 1,500 ---------- 5,040 ---------- INSURANCE -- 5.5% 60 Ace Ltd. ......................................... 2,481 31 Aetna, Inc. ...................................... 2,124 108 AFLAC, Inc. ...................................... 3,923 151 Allstate Corp. (The).............................. 6,496 23 Ambac Financial Group, Inc. ...................... 1,589 560 American International Group, Inc. ............... 37,100 *29 Anthem, Inc. ..................................... 2,138 65 Aon Corp. ........................................ 1,547 30 CIGNA Corp. ...................................... 1,708 40 Chubb Corp. (The)................................. 2,743 34 Cincinnati Financial Corp. ....................... 1,442 *33 Humana, Inc. ..................................... 757 30 Jefferson-Pilot Corp. ............................ 1,509 61 John Hancock Financial Services, Inc. ............ 2,295 38 Lincoln National Corp. ........................... 1,520 40 Loews Corp. ...................................... 1,968 </Table> The accompanying notes are an integral part of this financial statement. 71 HARTFORD INDEX HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- COMMON STOCKS -- (CONTINUED) INSURANCE -- (CONTINUED) 31 MBIA, Inc. ....................................... $ 1,833 21 MGIC Investment Corp. ............................ 1,205 109 Marsh & McLennan Cos., Inc. ...................... 5,231 161 MetLife, Inc. .................................... 5,411 68 Principal Financial Group (The)................... 2,259 46 Progressive Corp. (The)........................... 3,871 114 Prudential Financial, Inc. ....................... 4,774 30 SAFECO Corp. ..................................... 1,157 49 St. Paul Cos., Inc. (The)......................... 1,942 24 Torchmark Corp. .................................. 1,090 216 Travelers Property Casualty Corp. -- Class B...... 3,659 121 UnitedHealth Group, Inc. ......................... 7,032 63 UnumProvident Corp. .............................. 987 *31 Wellpoint Health Networks, Inc. .................. 3,039 30 XL Capital Ltd., Class A.......................... 2,288 ---------- 117,118 ---------- MACHINERY -- 1.4% *15 American Standard Cos., Inc. ..................... 1,511 *343 Applied Materials, Inc. .......................... 7,693 69 Baker Hughes, Inc. ............................... 2,218 16 Black & Decker Corp. (The)........................ 788 72 Caterpillar, Inc. ................................ 5,941 9 Cummins, Inc. .................................... 428 49 Deere (John) & Co. ............................... 3,217 42 Dover Corp. ...................................... 1,657 16 Eaton Corp. ...................................... 1,688 36 Ingersoll Rand Co. ............................... 2,426 26 Pall Corp. ....................................... 690 24 Parker-Hannifin Corp. ............................ 1,452 17 Stanley Works (The)............................... 632 ---------- 30,341 ---------- MEDIA & ENTERTAINMENT -- 3.9% *14 American Greetings Corp. ......................... 300 127 Clear Channel Communications, Inc. ............... 5,938 *464 Comcast Corp., Class A ........................... 15,244 23 Donnelly (R.R.) & Sons Co. ....................... 706 17 Dow Jones & Co., Inc. ............................ 837 56 Gannett Co., Inc. ................................ 4,976 23 Harrah's Entertainment, Inc. ..................... 1,131 16 Knight-Ridder, Inc. .............................. 1,274 39 McGraw-Hill Cos., Inc. (The)...................... 2,758 10 Meredith Corp. ................................... 506 31 New York Times Co. (The), Class A................. 1,466 *932 Time Warner, Inc. ................................ 16,761 64 Tribune Co. ...................................... 3,322 *+66 Univision Communications, Inc. ................... 2,635 360 Viacom, Inc., Class B............................. 15,993 421 Walt Disney Co. (The)............................. 9,832 ---------- 83,679 ---------- MEDICAL INSTRUMENTS & SUPPLIES -- 3.4% 11 Bard (C.R.), Inc. ................................ 867 11 Bausch & Lomb, Inc. .............................. 560 126 Baxter International, Inc. ....................... 3,836 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- MEDICAL INSTRUMENT & SUPPLIES -- (CONTINUED) 52 Becton, Dickinson & Co. .......................... $ 2,152 53 Biomet, Inc. ..................................... 1,918 *169 Boston Scientific Corp. .......................... 6,205 64 Guidant Corp. .................................... 3,858 612 Johnson & Johnson................................. 31,591 250 Medtronic, Inc. .................................. 12,139 *36 St. Jude Medical, Inc. ........................... 2,181 41 Stryker Corp. .................................... 3,494 *50 Zimmer Holdings, Inc. ............................ 3,509 ---------- 72,310 ---------- METALS, MINERALS & MINING -- 1.3% 178 Alcoa, Inc. ...................................... 6,776 17 Allegheny Technologies, Inc. ..................... 220 12 Ball Corp. ....................................... 691 12 Crane Co. ........................................ 375 26 Engelhard Corp. .................................. 773 30 Fortune Brands, Inc. ............................. 2,148 38 Freeport-McMoRan Copper & Gold, Inc., Class B..... 1,585 63 Illinois Tool Works, Inc. ........................ 5,323 89 Newmont Mining Corp. ............................. 4,328 16 Nucor Corp. ...................................... 901 *18 Phelps Dodge Corp. ............................... 1,402 12 Snap-On, Inc. .................................... 387 21 United States Steel Corp. ........................ 746 21 Vulcan Materials Co. ............................. 995 18 Worthington Industries, Inc. ..................... 319 ---------- 26,969 ---------- REAL ESTATE INVESTMENT TRUST -- 0.4% 19 Apartment Investment & Management Co., Class A.... 669 82 Equity Office Properties Trust.................... 2,361 57 Equity Residential Properties Trust............... 1,676 37 Prologis.......................................... 1,191 39 Simon Property Group, Inc. ....................... 1,826 ---------- 7,723 ---------- RESEARCH & TESTING FACILITIES -- 0.2% 31 Moody's Corp. .................................... 1,854 *21 Quest Diagnostics, Inc. .......................... 1,565 ---------- 3,419 ---------- RETAIL -- 7.5% 76 Albertson's, Inc. ................................ 1,712 *18 AutoZone, Inc. ................................... 1,558 *57 AutoNation, Inc. ................................. 1,042 *61 Bed Bath & Beyond, Inc. .......................... 2,645 67 Best Buy Co., Inc. ............................... 3,482 *24 Big Lots, Inc. ................................... 342 81 CVS Corp. ........................................ 2,939 43 Circuit City Stores Group......................... 437 *94 Costco Wholesale Corp. ........................... 3,507 34 Darden Restaurants, Inc. ......................... 715 17 Dillard's, Inc., Class A.......................... 282 </Table> The accompanying notes are an integral part of this financial statement. 72 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- COMMON STOCKS -- (CONTINUED) RETAIL -- (CONTINUED) 69 Dollar General Corp. ............................. $ 1,458 *133 eBay, Inc. ....................................... 8,597 36 Family Dollar Stores, Inc. ....................... 1,274 37 Federated Department Stores, Inc. ................ 1,757 185 Gap, Inc. (The)................................... 4,284 469 Home Depot, Inc. (The)............................ 16,638 *70 Kohl's Corp. ..................................... 3,148 *154 Kroger Co. (The).................................. 2,841 106 Limited Brands, Inc. ............................. 1,920 162 Lowe's Cos., Inc. ................................ 8,972 59 May Department Stores Co. (The)................... 1,728 262 McDonald's Corp. ................................. 6,493 28 Nordstrom, Inc. .................................. 973 *65 Office Depot, Inc. ............................... 1,078 56 Penney (J.C.) Co., Inc. .......................... 1,478 34 RadioShack Corp. ................................. 1,038 52 Sears, Roebuck & Co. ............................. 2,381 30 Sherwin-Williams Co. (The)........................ 1,044 *102 Staples, Inc. .................................... 2,785 *81 Starbucks Corp. .................................. 2,665 104 TJX Cos., Inc. (The).............................. 2,286 188 Target Corp. ..................................... 7,211 *44 Toys "R" Us, Inc. ................................ 556 892 Wal-Mart Stores, Inc. ............................ 47,305 211 Walgreen Co. ..................................... 7,686 23 Wendy's International, Inc. ...................... 922 +29 Winn-Dixie Stores, Inc. .......................... 290 *61 YUM! Brands, Inc. ................................ 2,083 ---------- 159,552 ---------- RUBBER & PLASTICS PRODUCTS -- 0.3% 15 Cooper Tire & Rubber Co. ......................... 326 +36 Goodyear Tire & Rubber Co. (The).................. 284 54 NIKE, Inc., Class B............................... 3,705 12 Reebok International Ltd. ........................ 479 *18 Sealed Air Corp. ................................. 950 12 Tupperware Corp. ................................. 210 ---------- 5,954 ---------- SOFTWARE & SERVICES -- 6.1% 48 Adobe Systems, Inc. .............................. 1,894 23 Autodesk, Inc. ................................... 565 123 Automatic Data Processing, Inc. .................. 4,853 *47 BMC Software, Inc. ............................... 869 *34 Citrix Systems, Inc. ............................. 716 119 Computer Associates International, Inc. .......... 3,262 *39 Computer Sciences Corp. .......................... 1,708 *79 Compuware Corp. .................................. 478 10 Deluxe Corp. ..................................... 432 *61 Electronic Arts, Inc. ............................ 2,934 99 Electronic Data Systems Corp. .................... 2,430 150 First Data Corp. ................................. 6,172 *40 Fiserv, Inc. ..................................... 1,578 49 IMS Health, Inc. ................................. 1,226 *41 Intuit, Inc. ..................................... 2,164 *19 Mercury Interactive Corp. ........................ 905 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- SOFTWARE & SERVICES -- (CONTINUED) 2,228 Microsoft Corp. .................................. $ 61,347 *20 NCR Corp. ........................................ 757 *77 Novell, Inc. ..................................... 809 *1,077 Oracle Corp. ..................................... 14,214 *55 Parametric Technology Corp. ...................... 216 *77 PeopleSoft, Inc. ................................. 1,762 *102 Siebel Systems, Inc. ............................. 1,418 *673 Sun Microsystems, Inc. ........................... 3,022 *59 SunGard Data Systems, Inc. ....................... 1,640 *64 Symantec Corp. ................................... 2,200 *68 Unisys Corp. ..................................... 1,011 *88 VERITAS Software Corp. ........................... 3,274 *135 Yahoo!, Inc. ..................................... 6,117 ---------- 129,973 ---------- TRANSPORTATION -- 4.6% 173 Boeing Co. (The).................................. 7,304 19 Brunswick Corp. .................................. 602 77 Burlington Northern Santa Fe Corp. ............... 2,475 44 CSX Corp. ........................................ 1,585 130 Carnival Corp. ................................... 5,157 31 Dana Corp. ....................................... 561 115 Delphi Corp. ..................................... 1,179 25 Delta Airlines, Inc. ............................. 301 61 FedEx Corp. ...................................... 4,148 377 Ford Motor Co. ................................... 6,036 41 General Dynamics Corp. ........................... 3,683 116 General Motors Corp. ............................. 6,168 36 Genuine Parts Co. ................................ 1,191 24 Goodrich Corp. ................................... 720 62 Harley-Davidson, Inc. ............................ 2,966 178 Honeywell International, Inc. .................... 5,939 19 ITT Industries, Inc. ............................. 1,409 93 Lockheed Martin Corp. ............................ 4,774 *14 Navistar International Corp. ..................... 676 80 Norfolk Southern Corp. ........................... 1,902 38 Northrop Grumman Corp. ........................... 3,607 24 PACCAR, Inc. ..................................... 2,046 30 Sabre Holdings Corp. ............................. 638 162 Southwest Airlines Co. ........................... 2,617 28 Textron, Inc. .................................... 1,597 53 Union Pacific Corp. .............................. 3,655 232 United Parcel Service, Inc. ...................... 17,266 97 United Technologies Corp. ........................ 9,190 ---------- 99,392 ---------- UTILITIES -- 3.0% *128 AES Corp. (The)................................... 1,212 *26 Allegheny Energy, Inc. ........................... 334 *66 Allied Waste Industries, Inc. .................... 916 33 Ameren Corp. ..................................... 1,539 81 American Electric Power Co., Inc. ................ 2,482 33 CMS Energy Corp. ................................. 283 *+85 Calpine Corp. .................................... 409 63 Centerpoint Energy, Inc. ......................... 611 37 Cinergy Corp. .................................... 1,425 *59 Citizens Communications Co. ...................... 728 </Table> The accompanying notes are an integral part of this financial statement. 73 HARTFORD INDEX HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- COMMON STOCKS -- (CONTINUED) UTILITIES -- (CONTINUED) 46 Consolidated Edison, Inc. ........................ $ 1,997 34 Constellation Energy Group, Inc. ................. 1,351 35 DTE Energy Co. ................................... 1,366 67 Dominion Resources, Inc. ......................... 4,267 187 Duke Energy Corp. ................................ 3,824 78 Dynegy Inc., Class A.............................. 333 *67 Edison International.............................. 1,472 125 El Paso Corp. .................................... 1,026 47 Entergy Corp. .................................... 2,691 67 Exelon Corp. ..................................... 4,471 38 FPL Group, Inc. .................................. 2,478 68 FirstEnergy Corp. ................................ 2,391 33 KeySpan Corp. .................................... 1,207 25 Kinder Morgan, Inc. .............................. 1,501 9 NICOR, Inc. ...................................... 308 54 NiSource, Inc. ................................... 1,187 *85 PG&E Corp. ....................................... 2,373 37 PPL Corp. ........................................ 1,597 8 Peoples Energy Corp. ............................. 320 19 Pinnacle West Capital Corp. ...................... 751 50 Progress Energy, Inc. ............................ 2,285 48 Public Service Enterprise Group, Inc. ............ 2,121 47 Sempra Energy..................................... 1,402 151 Southern Co. (The)................................ 4,562 +39 TECO Energy, Inc. ................................ 558 67 TXU Corp. ........................................ 1,583 120 Waste Management, Inc. ........................... 3,552 107 Williams Cos., Inc. (The)......................... 1,049 82 Xcel Energy, Inc. ................................ 1,396 ---------- 65,358 ---------- Total common stocks............................... $2,119,347 ========== SHORT-TERM SECURITIES -- 1.6% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 0.4% 8,871 Boston Global Investment Trust.................... $ 8,871 ---------- PRINCIPAL AMOUNT ------- REPURCHASE AGREEMENTS -- 1.1% $22,860 Joint Repurchase Agreement (See Note 2(d)) 0.84% due 01/02/04.............................. 22,860 ---------- U.S. TREASURY BILLS -- 0.1% 1,800 0.84% due 03/18/04................................ 1,797 525 0.84% due 03/18/04................................ 524 ---------- 2,321 ---------- Total short-term securities....................... $ 34,052 ========== </Table> <Table> <Caption> MARKET VALUE # ---------- DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $1,953,628)............. 99.5% $2,119,347 Total short-term securities (cost $34,052)........ 1.6 34,052 ----- ---------- Total investment in securities (total cost $1,987,680) -- including $8,575 of securities loaned (See Note 2(i)).......................... 101.1 2,153,399 Cash, receivables and other assets................ 0.1 3,019 Payable for securities purchased.................. (0.7) (14,647) Payable for Fund shares redeemed.................. (0.1) (2,405) Securities lending collateral payable to brokers (See Note 2(i))................................. (0.4) (8,871) Other liabilities................................. (0.0) (105) ----- ---------- Net assets........................................ 100.0% $2,130,390 ===== ========== </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 4,000,000 shares authorized; 72,006 shares outstanding...... $ 72 Paid in capital..................................... 1,965,154 Accumulated net investment income................... 1,722 Accumulated net realized loss on investments........ (2,595) Unrealized appreciation on investments.............. 165,719 Unrealized appreciation on futures contracts ++..... 318 ---------- Net assets.......................................... $2,130,390 ========== </Table> <Table> Class IA Net asset value per share ($1,934,490 / 65,362 shares outstanding) (3,500,000 shares authorized)......... $29.60 ====== Class IB Net asset value per share ($195,900 / 6,644 shares outstanding) (500,000 shares authorized)........... $29.49 ====== </Table> <Table> # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). ++ The Fund had 49 Standard & Poor's 500 March 2004 Futures contracts open as of December 31, 2003. These contracts had a value of $13,605 as of December 31, 2003 and were collateralized by various U.S. Treasury Bills with a market value of $2,321. </Table> The accompanying notes are an integral part of this financial statement. 74 HARTFORD INTERNATIONAL OPPORTUNITIES HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- 98.0% AUSTRALIA -- 0.5% -981 Rinker Group Ltd. (Construction).................. $ 4,853 -------- AUSTRIA -- 0.6% *-413 Telekom Austria AG (Communications)............... 5,101 -------- BRAZIL -- 1.8% 144 Empresa Brasileira de Aeronautica S.A., ADR (Transportation)................................. 5,055 176 Petroleo Brasileiro S.A., ADR (Energy & Services).............................. 5,146 238 Unibanco GDR (Banks).............................. 5,928 -------- 16,129 -------- CANADA -- 5.6% 133 Canadian National Railway Co. (Transportation).... 8,423 *304 Inco Ltd. (Metals, Minerals & Mining)............. 12,151 +361 National Bank of Canada (Banks)................... 12,041 +156 Royal Bank of Canada (Banks)...................... 7,456 +181 Talisman Energy, Inc. (Energy & Services)......... 10,315 -------- 50,386 -------- CHINA -- 0.6% -13,200 China Telecom Corp., Ltd. (Communications)........ 5,449 -------- FINLAND -- 0.8% -422 Nokia Oyj (Agriculture & Fishing)................. 7,218 -------- FRANCE -- 14.7% -323 AXA (Financial Services).......................... 6,953 -193 Aventis S.A. (Drugs).............................. 12,804 -154 BNP Paribas S.A. (Banks).......................... 9,755 +-186 Carrefour S.A. (Retail)........................... 10,222 +151 Essilor International S.A. (Retail)............... 7,819 +-387 France Telecom S.A. (Communications).............. 11,052 +-220 Lafarge S.A. (Construction)....................... 19,710 +-100 Pinault Printemps Redoute S.A. (Retail)........... 9,645 -165 Schneider Electric S.A. (Electrical Equipment).... 10,784 -223 Societe Television Francaise (Media & Entertainment)................................... 7,801 -139 TotalFinaElf S.A., B shares (Energy & Services)... 25,733 -------- 132,278 -------- GERMANY -- 4.3% 184 BMW AG (Transportation)........................... 8,511 +-142 Metro AG (Retail)................................. 6,271 -54 SAP AG (Software & Services)...................... 8,958 115 Schering AG (Drugs)............................... 5,799 -146 Veba AG (Utilities)............................... 9,516 -------- 39,055 -------- IRELAND -- 0.6% *+218 Elan Corp., ADR (Drugs)........................... 1,503 *513 Ryanair Holdings PLC (Transportation)............. 4,267 -------- 5,770 -------- </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- -------- ITALY -- 3.7% +-680 ENI S.p.A. (Energy & Services).................... $ 12,891 +908 Fiat S.p.A. (Consumer Durables)................... 6,967 +-2,539 UniCredito Italiano S.p.A. (Financial Services)... 13,725 -------- 33,583 -------- JAPAN -- 15.3% +-783 Asahi Glass Co., Ltd. (Construction).............. 6,446 +-1,058 Bank of Yokohama Ltd. (The) (Banks)............... 4,936 -384 Dai Nippon Printing Co., Ltd. (Business Services).............................. 5,424 -207 Fuji Photo Film Co., Ltd. (Consumer Non- Durables)........................................ 6,762 -180 Honda Motor Co., Ltd. (Transportation)............ 8,104 -1 Japan Tobacco, Inc. (Food, Beverage & Tobacco).... 4,423 -22 Keyence Corp. (Machinery)......................... 4,690 -465 Matsushita Electric Industrial Co. (Electronics).................................... 6,471 -8 NTT DoCoMo, Inc. (Communications)................. 18,200 -59 Nintendo Co., Ltd. (Consumer Non-Durables)........ 5,507 -38 Nomura Research Institut (Business Services)...... 3,767 -186 Nomura Securities (Insurance)..................... 3,156 -30 Obic Co., Ltd. (Software & Services).............. 6,054 -236 Olympus Optical Co., Ltd. (Medical Instruments & Supplies)........................................ 5,150 -73 Orix Corp. (Financial Services)................... 6,088 -54 Rohm Co., Ltd. (Electronics)...................... 6,324 *-5 SKY Perfect Communications, Inc. (Communications)................................. 6,305 -204 Shin-Etsu Chemical Co., Ltd. (Chemicals).......... 8,375 +-252 Shionogi & Co., Ltd. (Drugs)...................... 4,705 -697 Sompo Japan Insurance, Inc. (Insurance)........... 5,752 +-74 Sony Corp. (Electronics).......................... 2,554 122 Sony Corp., ADR (Electronics)..................... 4,226 +-751 Sumitomo Trust & Banking Co., Ltd. (The) (Banks).......................................... 4,484 -------- 137,903 -------- MALAYSIA -- 1.8% -2,500 Berjaya Sports Toto BHD (Software & Services)..... 2,670 -2,045 Malayan Banking (Banks)........................... 5,194 -3,183 Public Bank BHD (Financial Services).............. 2,592 -2,031 Resort World Berhad (Hotels & Gaming)............. 5,390 -------- 15,846 -------- MEXICO -- 0.9% 298 America Movil S.A. de C.V., ADR (Communications)................................. 8,156 -------- NETHERLANDS -- 2.5% -291 Akzo Nobel N.V. (Chemicals)....................... 11,148 *-1,145 Koninklijke KPN N.V. (Communications)............. 8,858 -88 TNT Post Group N.V. (Consumer Services)........... 2,063 -------- 22,069 -------- </Table> The accompanying notes are an integral part of this financial statement. 75 HARTFORD INTERNATIONAL OPPORTUNITIES HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- (CONTINUED) RUSSIA -- 1.0% 55 JSC Mining & Smelting Co., ADR (Metals, Minerals & Mining).......................................... $ 3,564 44 Sibnef ADR (Energy & Services).................... 1,243 +142 Surgutneftegaz ADR (Energy & Services)............ 4,135 -------- 8,942 -------- SOUTH AFRICA -- 0.5% -106 Anglo American Platinum Corp., Ltd. (Metals, Minerals & Mining)............................... 4,598 -------- SOUTH KOREA -- 4.4% *-957 Kia Motors Corp. (Transportation)................. 8,741 *-294 Kookmin Bank (Banks).............................. 11,146 *-142 LG Electronics, Inc. (Electronics)................ 6,963 *201 SK Corp. (Energy & Services)...................... 4,631 -47 SK Telecom Co., Ltd. (Communications)............. 7,879 -------- 39,360 -------- SWEDEN -- 1.3% -1,560 Nordea AB (Banks)................................. 11,718 -------- SWITZERLAND -- 8.4% +2,526 ABB Ltd. (Construction)........................... 12,804 -76 Nestle S.A. (Food, Beverage & Tobacco)............ 18,856 -175 Roche Holdings AG (Drugs)......................... 17,721 +-241 STMicroelectronics N.V. (Electronics)............. 6,552 -294 UBS AG (Banks).................................... 20,115 -------- 76,048 -------- TAIWAN -- 1.5% @328 China Steel Corp., GDR (Metals, Minerals & Mining).......................................... 5,456 *-9,178 United Microelectronics Corp. (Electronics)....... 7,861 -------- 13,317 -------- TURKEY -- 0.4% 602,883 Akbank TAS (Banks)................................ 3,154 -------- UNITED KINGDOM -- 24.8% -286 AstraZeneca PLC (Drugs)........................... 13,741 -445 Aviva PLC (Financial Services).................... 3,931 -2,632 BP PLC (Energy & Services)........................ 21,400 *-1,696 British Airways PLC (Transportation).............. 7,067 *-524 British Sky Broadcasting PLC (Media & Entertainment)................................... 6,599 -1,178 Capita Group PLC (Business Services).............. 5,145 -2,373 Compass Group PLC (Food, Beverage & Tobacco).............................. 16,181 *9,516 Corus Group PLC (Metals, Minerals & Mining)....... 5,110 -604 GlaxoSmithKline PLC (Drugs)....................... 13,930 -318 HBOS PLC (Banks).................................. 4,127 -784 HSBC Holdings PLC (Banks)......................... 12,344 -1,701 Hilton Group PLC (Hotels & Gaming)................ 6,845 -330 Imperial Tobacco Group PLC (Food, Beverage & Tobacco)......................................... 6,503 -1,136 Kingfisher PLC (Retail)........................... 5,687 -1,304 National Grid Transco PLC (Energy & Services)..... 9,382 -648 Pearson PLC (Media & Entertainment)............... 7,216 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- -------- UNITED KINGDOM -- (CONTINUED) -420 Reckitt Benckiser PLC (Consumer Non-Durables)..... $ 9,497 -416 Rio Tinto PLC (Metals, Minerals & Mining)......... 11,455 -641 Royal Bank of Scotland Group PLC (Banks).......... 18,918 -10,248 Vodafone Group PLC (Communications)............... 25,463 -1,317 WWP Group PLC (Business Services)................. 12,927 -------- 223,468 -------- UNITED STATES OF AMERICA -- 2.0% *280 Accenture Ltd. (Business Services)................ 7,377 370 Tyco International Ltd. (Consumer Non-Durables)... 9,794 -------- 17,171 -------- Total common stocks............................... $881,572 ======== SHORT-TERM SECURITIES -- 11.8% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 10.0% 89,576 State Street Navigator Securities Lending Prime Portfolio........................................ $ 89,576 -------- <Caption> PRINCIPAL AMOUNT - --------- REPURCHASE AGREEMENT -- 1.8% $16,632 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.............................. 16,632 -------- Total short-term securities....................... $106,208 ======== </Table> <Table> DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $738,995)............... 98.0% $881,572 Total short-term securities (cost $106,208)....... 11.8 106,208 ----- -------- Total investment in securities (total cost $845,203) -- including $85,210 of securities loaned (See Note 2(i)).......................... 109.8 987,780 Cash, receivables and other assets................ 2.7 24,654 Payable for securities purchased.................. (2.5) (22,294) Payable for Fund shares redeemed.................. (0.0) (405) Securities lending collateral payable to brokers (See Note 2(i))................................. (10.0) (89,576) Other liabilities................................. (0.0) (153) ----- -------- Net assets........................................ 100.0% $900,006 ===== ======== </Table> <Table> <Caption> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 2,625,000 shares authorized; 89,031 shares outstanding..................................... $ 89 Paid in capital................................... 1,113,599 Accumulated net investment income................. 1,085 Accumulated net realized loss on investments...... (357,332) Unrealized appreciation on investments............ 142,577 Unrealized appreciation on forward foreign currency contracts (See Note 2(g)) @@@.......... 22 Unrealized depreciation on other assets and liabilities in foreign currencies............... (34) ---------- Net assets........................................ $ 900,006 ========== </Table> The accompanying notes are an integral part of this financial statement. 76 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET VALUE # ------- Class IA Net asset value per share ($823,760 / 81,478 shares outstanding) (2,000,000 shares authorized)................................... $10.11 ====== Class IB Net asset value per share ($76,246 / 7,554 shares outstanding) (625,000 shares authorized)................................... $10.09 ====== </Table> <Table> DIVERSIFICATION BY INDUSTRY Agriculture & Fishing............................. 0.8% $ 7,218 Banks............................................. 14.6 131,316 Business Services................................. 3.8 34,640 Chemicals......................................... 2.2 19,523 Communications.................................... 11.2 100,689 Construction...................................... 4.9 43,813 Consumer Durables................................. 0.8 6,967 Consumer Non-Durables............................. 3.5 31,560 Consumer Services................................. 0.2 2,063 Drugs............................................. 7.8 70,203 Electrical Equipment.............................. 1.2 10,784 Electronics....................................... 4.1 36,725 Energy & Services................................. 10.5 94,876 Financial Services................................ 3.7 33,289 Food, Beverage & Tobacco.......................... 5.1 45,963 Hotels & Gaming................................... 1.4 12,235 Insurance......................................... 1.0 8,908 Machinery......................................... 0.5 4,690 Media & Entertainment............................. 2.4 21,616 Medical Instruments & Supplies.................... 0.6 5,150 Metals, Minerals & Mining......................... 4.7 42,334 Retail............................................ 4.4 39,644 Software & Services............................... 2.0 17,682 Transportation.................................... 5.6 50,168 Utilities......................................... 1.0 9,516 ---- -------- Total common stocks........................... 98.0% $881,572 ==== ======== </Table> <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 96.0% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). @ Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2003, the market value of these securities amounted to $5,456 or 0.6% of net assets (See Note 2(m)). - Security valued in good faith at fair value by, or under the direction of, the Funds' Board of Directors. The aggregate value of these securities as of December 31, 2003 was $710,543, which represents 78.9% of total net assets. </Table> @@@FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING AT DECEMBER 31, 2003 <Table> <Caption> UNREALIZED CONTRACT DELIVERY APPRECIATION DESCRIPTION MARKET VALUE AMOUNT DATE (DEPRECIATION) - ----------- ------------ -------- -------- -------------- British Pound (Buy) $ 749 $ 742 1/2/2004 $ 7 British Pound (Buy) 4,048 4,023 1/5/2004 25 Canadian Dollars (Buy) 298 297 1/6/2004 1 Canadian Dollars (Buy) 1,632 1,630 1/5/2004 2 Canadian Dollars (Buy) 4,643 4,585 1/2/2004 58 EURO (Buy) 1,818 1,811 1/5/2004 7 EURO (Buy) 3,556 3,540 1/6/2004 16 EURO (Sell) 245 241 1/2/2004 (4) EURO (Sell) 313 309 1/2/2004 (4) EURO (Sell) 352 348 1/2/2004 (4) EURO (Sell) 478 474 1/5/2004 (4) EURO (Sell) 684 677 1/2/2004 (7) EURO (Sell) 758 754 1/6/2004 (4) EURO (Sell) 9,438 9,339 1/2/2004 (99) Japanese Yen (Sell) 1,161 1,163 1/7/2004 2 South African Rands (Buy) 870 842 1/2/2004 28 Swiss Franc (Buy) 570 568 1/6/2004 2 ---- $ 22 ==== </Table> The accompanying notes are an integral part of this financial statement. 77 HARTFORD INTERNATIONAL STOCK HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ------- COMMON STOCKS -- 98.4% AUSTRALIA -- 1.5% -160 Broken Hill Proprietary Co., Ltd. (Metals, Minerals & Mining).............................. $ 1,460 ------- DENMARK -- 0.5% 12 Novo Nordisk (Drugs).............................. 485 ------- FINLAND -- 2.9% -160 Nokia Oyj (Agriculture & Fishing)................. 2,741 ------- FRANCE -- 10.9% -22 Aventis S.A. (Drugs).............................. 1,465 +-24 BNP Paribas S.A. (Banks).......................... 1,535 -10 Carrefour S.A. (Retail)........................... 562 -68 Credit Agricole S.A. (Banks)...................... 1,631 +-22 Lagardere S.C.A. (Media & Entertainment).......... 1,249 -12 Schneider Electric S.A. (Electrical Equipment).... 780 -17 TotalFinaElf S.A., B Shares (Energy & Services)... 3,118 ------- 10,340 ------- GERMANY -- 4.9% 13 BMW AG (Transportation)........................... 603 -106 Deutsche Telekom AG (Communications).............. 1,923 -4 Muenchener Rueckversicherungs Gesellschaft AG (Insurance)..................................... 488 -1 Porsche AG (Transportation)....................... 565 +-13 Siemens AG (Electronics).......................... 1,045 ------- 4,624 ------- HONG KONG -- 1.4% 175 CLP Holdings Ltd. (Energy & Services)............. 834 -318 Hong Kong & China Gas (Energy & Services)......... 486 ------- 1,320 ------- IRELAND -- 4.0% 60 Allied Irish Banks PLC (Banks).................... 956 112 Bank of Ireland (Banks)........................... 1,528 -63 CRH PLC (Metals, Minerals & Mining)............... 1,289 ------- 3,773 ------- ITALY -- 3.2% +-112 ENI S.p.A. (Energy & Services).................... 2,115 -219 Snam Rete Gas S.p.A. (Transportation)............. 928 ------- 3,043 ------- JAPAN -- 17.5% -30 Acom Co., Ltd. (Financial Services)............... 1,380 -41 Canon, Inc. (Computers & Office Equipment)........ 1,950 @@-- East Japan Railway Co. (Transportation)........... 1,136 -17 Fanuc Ltd. (Electronics).......................... 995 -2 Funai Electric Co., Ltd. (Electronics)............ 262 -30 Honda Motor Co., Ltd. (Transportation)............ 1,330 -@@-- Japan Tobacco, Inc. (Food, Beverage & Tobacco).... 293 -29 Kao Corp. (Consumer Non-Durables)................. 591 *6 NEC Electronics Corp. (Electronics)............... 432 -1 NTT DoCoMo, Inc. (Communications)................. 1,313 -138 Nissan Motor Co., Ltd. (Transportation)........... 1,553 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ------- JAPAN -- (CONTINUED) -109 Nomura Securities (Insurance)..................... $ 1,850 -4 Rohm Co., Ltd. (Electronics)...................... 495 -12 Shin-Etsu Chemical Co., Ltd. (Chemicals).......... 497 -43 Takeda Chemical Industries Ltd. (Medical Instruments & Supplies)......................... 1,690 232 Tokyo Gas Co., Ltd. (Energy & Services)........... 827 ------- 16,594 ------- NETHERLANDS -- 7.9% -30 ABN AMRO Holdings N.V. (Financial Services)....... 702 34 Heineken N.V. (Food, Beverage & Tobacco).......... 1,283 *-246 Koninklijke KPN N.V. (Communications)............. 1,901 -69 Philips Electronics N.V. (Electronics)............ 2,019 -30 Royal Dutch Petroleum Co. (Energy & Services)..... 1,587 ------- 7,492 ------- NORWAY -- 0.5% -38 Statoil ASA, Class A (Metals, Minerals & Mining)......................................... 431 ------- SINGAPORE -- 2.1% 167 Oversea-Chinese Banking Corp., Ltd. (Banks)....... 1,190 -100 United Overseas Bank Ltd. (Financial Services).... 781 ------- 1,971 ------- SPAIN -- 2.7% -35 Altadis S.A. (Food, Beverage & Tobacco)........... 989 +-84 Endesa S.A. (Utilities)........................... 1,607 ------- 2,596 ------- SWEDEN -- 0.5% +-14 Sandvik AB (Construction)......................... 493 ------- SWITZERLAND -- 9.4% -52 Compagnie Financiere Richemont AG (Retail)........ 1,240 -62 Credit Suisse Group (Banks)....................... 2,244 -17 Roche Holdings AG (Drugs)......................... 1,668 -26 Swiss Reinsurance (Insurance)..................... 1,741 -29 UBS AG (Banks).................................... 2,005 ------- 8,898 ------- UNITED KINGDOM -- 28.5% -249 BP PLC (Energy & Services)........................ 2,028 -246 Barclays PLC (Banks).............................. 2,209 -83 Boots Group PLC (Retail).......................... 1,022 -183 Cadbury Schweppes PLC (Food, Beverage & Tobacco)........................................ 1,348 -120 Diageo PLC (Food, Beverage & Tobacco)............. 1,582 -128 GlaxoSmithKline PLC (Drugs)....................... 2,943 -226 HSBC Holdings PLC (Banks)......................... 3,555 -33 Imperial Tobacco Group PLC (Food, Beverage & Tobacco)........................................ 653 71 Kesa Electricals PLC (Retail)..................... 325 -379 Rentokil Initial PLC (Business Services).......... 1,294 -42 Rio Tinto PLC (Metals, Minerals & Mining)......... 1,145 </Table> The accompanying notes are an integral part of this financial statement. 78 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ------- COMMON STOCKS -- (CONTINUED) -73 Royal Bank of Scotland Group PLC (Banks).......... $ 2,167 -73 Smiths Group PLC (Aerospace & Defense)............ 863 257 Tesco PLC (Retail)................................ 1,187 -104 Unilever PLC (Food, Beverage & Tobacco)........... 966 -1,529 Vodafone Group PLC (Communications)............... 3,800 ------- 27,087 ------- Total common stocks............................... $93,348 ======= SHORT-TERM SECURITIES -- 7.1% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 6.6% 6,215 State Street Navigator Securities Lending Prime Portfolio....................................... $ 6,215 INVESTMENT COMPANIES -- 0.5% 476 SSgA Money Market Fund............................ 476 ------- Total short-term securities....................... $ 6,691 ======= </Table> <Table> DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $76,170)................ 98.4% $ 93,348 Total short-term securities (cost $6,691)......... 7.1 6,691 ----- -------- Total investment in securities (total cost $82,861) -- including $5,913 of securities loaned (See Note 2(i)).......................... 105.5 100,039 Cash, receivables and other assets................ 1.2 1,145 Payable for securities purchased.................. (0.0) (7) Payable for Fund shares redeemed ................. (0.1) (50) Securities lending collateral payable to brokers (See Note 2(i))................................. (6.6) (6,215) Other liabilities................................. (0.0) (17) ----- -------- Net assets........................................ 100.0% $ 94,895 ===== ======== </Table> <Table> MARKET VALUE # -------- SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 700,000 shares authorized; 8,006 shares outstanding...................... $ 8 Paid in capital............................................. 114,438 Accumulated net investment income........................... 280 Accumulated net realized loss on investments................ (37,030) Unrealized appreciation on investments...................... 17,178 Unrealized appreciation on other assets and liabilities in foreign currencies........................................ 21 -------- Net assets.................................................. $ 94,895 ======== </Table> <Table> Class IA Net asset value per share ($94,895 / 8,006 shares outstanding) (700,000 shares authorized)................ $11.85 ====== </Table> <Table> DIVERSIFICATION BY INDUSTRY Aerospace & Defense............................... 0.9% $ 863 Agriculture & Fishing............................. 2.9 2,741 Banks............................................. 20.0 19,020 Business Services................................. 1.4 1,294 Chemicals......................................... 0.5 497 Communications.................................... 9.4 8,937 Computers & Office Equipment...................... 2.1 1,950 Construction...................................... 0.5 493 Consumer Non-Durables............................. 0.6 591 Drugs............................................. 6.9 6,561 Electrical Equipment.............................. 0.8 780 Electronics....................................... 5.5 5,248 Energy & Services................................. 11.6 10,995 Financial Services................................ 3.0 2,863 Food, Beverage & Tobacco.......................... 7.5 7,114 Insurance......................................... 4.3 4,079 Media & Entertainment............................. 1.3 1,249 Medical Instruments & Supplies.................... 1.8 1,690 Metals, Minerals & Mining......................... 4.6 4,325 Retail............................................ 4.6 4,336 Transportation.................................... 6.4 6,115 Utilities......................................... 1.8 1,607 ----- ------- Total common stocks........................... 98.4% $93,348 ===== ======= </Table> <Table> & Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 98.4% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). - Security valued in good faith at fair value by, or under the direction of, the Funds' Board of Directors. The aggregate value of these securities as of December 31, 2003, was $82,562, which represents 87.0% of total net assets. @@ Due to the presentation of the financial statements in thousands, the number of shares and/or market value round to zero. </Table> The accompanying notes are an integral part of this financial statement. 79 HARTFORD LARGECAP GROWTH HLS FUND SCHEDULE OF INVESTMENTS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- 98.9% APPAREL & TEXTILE -- 0.9% 19 Polo Ralph Lauren Corp.................... $ 534 -------- BANKS -- 12.5% 39 Citigroup, Inc. .......................... 1,878 10 Countrywide Credit Industries, Inc. ...... 747 20 Federal National Mortgage Association..... 1,501 23 MBNA Corp. ............................... 577 13 Northern Trust Corp. ..................... 592 15 SLM Corp. ................................ 569 32 Synovus Financial Corp. .................. 918 10 Wells Fargo Co. .......................... 565 -------- 7,347 -------- BUSINESS SERVICES -- 2.4% *33 Cendant Corp. ............................ 728 8 Omnicom Group, Inc. ...................... 668 -------- 1,396 -------- COMMUNICATIONS -- 1.8% 34 Nokia Corp., ADR.......................... 580 13 Verizon Communications, Inc. ............. 460 -------- 1,040 -------- COMPUTERS & OFFICE EQUIPMENT -- 4.4% 14 CDW Corp. ................................ 814 5 International Business Machines Corp. .... 426 *7..... Lexmark International, Inc. .............. 578 *11.... Zebra Technologies Corp. ................. 750 -------- 2,568 -------- CONSUMER DURABLES -- 0.6% 15 Newell Rubbermaid, Inc. .................. 335 -------- CONSUMER NON-DURABLES -- 3.7% 16 Cardinal Health, Inc. .................... 997 29 Estee Lauder Cos., Inc. (The), Class A.... 1,152 -------- 2,149 -------- CONSUMER SERVICES -- 2.6% 18 H&R Block, Inc. .......................... 986 *14 Weight Watchers International, Inc. ...... 553 -------- 1,539 -------- DRUGS -- 9.4% *21 Biogen Idec, Inc.......................... 765 9 Eli Lilly & Co. .......................... 598 69 Pfizer, Inc. ............................. 2,431 34 Schering-Plough Corp. .................... 585 *24 Watson Pharmaceuticals, Inc............... 1,113 -------- 5,492 -------- ELECTRICAL EQUIPMENT -- 3.0% 10 Allergan, Inc. ........................... 772 *31.... Waters Corp. ............................. 1,013 -------- 1,785 -------- </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- -------- ELECTRONICS -- 6.9% 60 General Electric Co. ..................... $ 1,862 28 Intel Corp. .............................. 895 30 Linear Technology Corp. .................. 1,275 -------- 4,032 -------- ENERGY & SERVICES -- 7.3% 11 BP Amoco PLC, ADR......................... 548 11 Burlington Resources, Inc. ............... 595 25 Exxon Mobil Corp. ........................ 1,005 32 Imperial Oil Ltd. ........................ 1,421 25 XTO Energy, Inc. ......................... 715 -------- 4,284 -------- FINANCIAL SERVICES -- 1.1% 6 Goldman Sachs Group, Inc. (The)........... 627 -------- FOOD, BEVERAGE & TOBACCO -- 0.9% 12 PepsiCo, Inc. ............................ 545 -------- HEALTH SERVICES -- 0.9% *28 First Health Group Corp. ................. 544 -------- INSURANCE -- 9.7% 24 AFLAC, Inc. .............................. 868 28 American International Group, Inc. ....... 1,876 19 MBIA, Inc. ............................... 1,099 11 MGIC Investment Corp. .................... 649 36 Willis Group Holdings Ltd. ............... 1,223 -------- 5,715 -------- MEDIA & ENTERTAINMENT -- 6.0% *17 Comcast Corp., Class A.................... 552 20 International Speedway Corp., Class A..... 887 *66 Liberty Media Corp., Class A.............. 783 *36 Time Warner, Inc. ........................ 644 14 Viacom, Inc., Class B..................... 630 -------- 3,496 -------- MEDICAL INSTRUMENTS & SUPPLIES -- 2.1% 12 Johnson & Johnson......................... 594 13 Medtronic, Inc. .......................... 612 -------- 1,206 -------- RETAIL -- 5.8% *7 AutoZone, Inc. ........................... 584 *13 Kohl's Corp. ............................. 575 15 Target Corp. ............................. 588 12 Wal-Mart Stores, Inc. .................... 647 28 Walgreen Co. ............................. 1,004 -------- 3,398 -------- RUBBER & PLASTICS PRODUCTS -- 1.2% 10 NIKE, Inc., Class B....................... 698 -------- </Table> The accompanying notes are an integral part of this financial statement. 80 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- (CONTINUED) SOFTWARE & SERVICES -- 12.2% 14 Adobe Systems, Inc. ...................... $ 542 17 Automatic Data Processing, Inc. .......... 661 *58 Citrix Systems, Inc. ..................... 1,224 *26 Cognos, Inc. ............................. 785 *12 Electronic Arts, Inc. .................... 595 91 Microsoft Corp. .......................... 2,512 *25 Symantec Corp. ........................... 875 -------- 7,194 -------- TRANSPORTATION -- 3.5% 20 Burlington Northern Santa Fe Corp. ....... 634 21 Carnival Corp. ........................... 836 19 Honeywell International, Inc.............. 650 -------- 2,120 -------- Total common stocks (cost $56,834)........ $ 58,044 ======== SHORT-TERM SECURITIES -- 0.8% INVESTMENT COMPANIES -- 0.8% 461 SSgA Money Market Fund.................... $ 461 -------- Total short-term securities (cost $461)... $ 461 ======== INVESTMENTS IN SECURITIES AT VALUE (TOTAL COST $57,295) -- 99.7%......................... 58,505 OTHER ASSETS, LESS LIABILITIES -- 0.3%................ 165 -------- NET ASSETS -- 100.0%.................................. 58,670 ======== </Table> <Table> <Caption> MARKET VALUE # -------- STATEMENT OF ASSETS AND LIABILITIES: ASSETS Investment in securities, at value (total cost $57,295)......................................... $ 58,505 Receivable for securities sold..................... 8,861 Receivable for Fund shares sold.................... 41 Receivable for dividends and interest.............. 35 -------- Total assets....................................... 67,442 -------- LIABILITIES Payable for securities purchased................... 8,767 Accrued Expenses................................... 5 -------- Total liabilities.................................. 8,772 -------- Net assets......................................... $ 58,670 ======== </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 500,000 shares authorized; 6,829 shares outstanding....... $ 7 Paid in capital..................................... 99,821 Accumulated net investment income................... 28 Accumulated net realized loss on investments........ (42,396) Unrealized appreciation on investments.............. 1,210 -------- Net assets.......................................... $ 58,670 ======== </Table> <Table> Class IA Net asset value per share ($58,670 / 6,829 shares outstanding) (500,000 shares authorized)................................... $8.59 ===== </Table> <Table> & Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 7.8% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. </Table> The accompanying notes are an integral part of this financial statement. 81 HARTFORD MIDCAP STOCK HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- 96.9% AEROSPACE & DEFENSE -- 0.6% 6 Garmin Ltd. ...................................... $ 327 -------- AGRICULTURE & FISHING -- 0.3% 11 Pilgrims Pride Corp. ............................. 186 -------- APPAREL & TEXTILE -- 2.7% *21 Coach, Inc. ...................................... 778 *4 Columbia Sportswear Co. .......................... 234 7 Mohawk Industries, Inc. .......................... 480 -------- 1,492 -------- BANKS -- 11.8% 10 Associated Bancorp................................ 435 8 Bank of Hawaii Corp. ............................. 342 7 City National Corp. .............................. 435 7 Commerce Bancshares, Inc. ........................ 365 @@-- Countrywide Credit Industries, Inc. .............. -- 14 Doral Financial Corp. ............................ 445 7 First Tennessee National Corp. ................... 309 11 GreenPoint Financial Corp. ....................... 378 21 Hibernia Corp., Class A........................... 503 3 Marshall & Ilsley Corp. .......................... 130 20 National Commerce Financial Corp. ................ 554 6 New Century Financial Corp. ...................... 242 19 New York Community Bancorp, Inc. ................. 738 7 Northwest Bancorp, Inc. .......................... 145 7 Popular, Inc. .................................... 306 13 Sky Financial Group, Inc. ........................ 324 12 South Financial Group, Inc. (The)................. 320 19 Sovereign Bancorp, Inc. .......................... 456 4 Zions Bancorp..................................... 239 -------- 6,666 -------- BUSINESS SERVICES -- 1.4% *11 Convergys Corp. .................................. 189 8 Manpower, Inc. ................................... 372 *8 Rent-A-Center, Inc. .............................. 239 -------- 800 -------- CHEMICALS -- 2.2% *8 Cytec Industries, Inc. ........................... 311 9 Lubrizol Corp. (The).............................. 302 7 Monsanto Co. ..................................... 187 13 RPM, Inc. ........................................ 212 10 Sensient Technologies Corp. ...................... 200 -------- 1,212 -------- COMMUNICATIONS -- 1.7% *12 Avaya, Inc. ...................................... 151 *12 Plantronics, Inc. ................................ 405 9 Scientific-Atlanta, Inc. ......................... 257 *9 Wireless Facilities, Inc. ........................ 128 -------- 941 -------- </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMPUTERS & OFFICE EQUIPMENT -- 2.5% *10 SanDisk Corp. .................................... $ 636 *16 Storage Technology Corp. ......................... 412 *31 Western Digital Corp. ............................ 363 -------- 1,411 -------- CONSTRUCTION -- 2.7% *4 Hovnanian Enterprises, Inc. ...................... 331 4 Kaufman & Broad Home Corp. ....................... 305 7 Lennar Corp. ..................................... 672 2 Ryland Group, Inc. ............................... 186 -------- 1,494 -------- CONSUMER DURABLES -- 2.7% 5 Carlisle Cos., Inc. .............................. 286 10 Gentex Corp. ..................................... 446 5 Hillenbrand Industries, Inc. ..................... 285 6 Hon Industries, Inc. ............................. 251 11 Pep Boys (The).................................... 247 -------- 1,515 -------- CONSUMER NON-DURABLES -- 2.2% 6 Blyth, Inc. ...................................... 193 9 Dial Corp. ....................................... 256 5 Fresh Del Monte Produce........................... 117 *7 Henry Schein, Inc. ............................... 439 *5 United Stationers, Inc. .......................... 221 -------- 1,226 -------- CONSUMER SERVICES -- 0.3% *8 FTI Consulting, Inc. ............................. 180 -------- DRUGS -- 5.1% *9 Gilead Sciences, Inc. ............................ 535 *3 Invitrogen Corp. ................................. 196 *8 Kos Pharmaceuticals, Inc. ........................ 340 *4 Martex Biosciences Corp. ......................... 240 22 Mylan Laboratories, Inc. ......................... 553 *4 Pharmaceutical Resources, Inc. ................... 274 5 Sigma-Aldrich Corp. .............................. 280 18 Valeant Pharmaceuticals, Inc. .................... 455 -------- 2,873 -------- EDUCATION -- 1.1% *6 Corinthian Colleges, Inc. ........................ 333 *6 ITT Educational Services, Inc. ................... 282 -------- 615 -------- ELECTRICAL EQUIPMENT -- 0.3% *4 Millipore Corp. .................................. 155 -------- </Table> The accompanying notes are an integral part of this financial statement. 82 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- (CONTINUED) ELECTRONICS -- 7.8% *11 Altera Corp. ..................................... $ 238 11 American Power Conversion Corp. .................. 264 *20 Amkor Technology, Inc. ........................... 362 *10 Benchmark Electronics, Inc. ...................... 345 5 Cooper Industries Ltd. ........................... 284 *9 Energizer Holdings, Inc. ......................... 342 *6 Helen of Troy Ltd. ............................... 146 *12 Integrated Circuit Systems, Inc. ................. 350 *7 International Rectifier Corp. .................... 346 *17 MEMC Electronic Materials, Inc. .................. 162 12 Microchip Technology, Inc. ....................... 397 *9 National Semiconductor Corp. ..................... 363 *6 QLogic Corp. ..................................... 320 *36 Sanmina-SCI Corp. ................................ 453 -------- 4,372 -------- ENERGY & SERVICES -- 5.7% *7 Houston Exploration Co. .......................... 256 8 Patina Oil & Gas Corp. ........................... 397 *11 Patterson-UTI Energy, Inc. ....................... 362 *11 Southwestern Energy Co. .......................... 258 4 Sunoco, Inc. ..................................... 210 *15 Unit Corp. ....................................... 346 15 Valero Energy Corp. .............................. 714 23 XTO Energy, Inc. ................................. 645 -------- 3,188 -------- FINANCIAL SERVICES -- 4.0% *5 Affiliated Managers Group, Inc. .................. 320 4 Bear Stearns Cos., Inc. (The)..................... 328 *46 E*TRADE Group, Inc. .............................. 578 *16 Knight Trading Group, Inc. ....................... 233 4 Legg Mason, Inc. ................................. 340 8 Nuveen Investments, Inc. ......................... 216 5 T Rowe Price Group, Inc. ......................... 251 -------- 2,266 -------- FOOD, BEVERAGE & TOBACCO -- 0.6% 4 Bunge Ltd. ....................................... 132 *11 Smithfield Foods, Inc. ........................... 219 -------- 351 -------- FOREST & PAPER PRODUCTS -- 0.9% 5 Bemis Co., Inc. .................................. 245 *12 Pactiv Corp. ..................................... 284 -------- 529 -------- HEALTH SERVICES -- 2.5% *12 Apria Healthcare Group, Inc. ..................... 330 *10 Coventry Health Care, Inc. ....................... 619 *12 First Health Group Corp. ......................... 226 13 Select Medical Corp. ............................. 212 -------- 1,387 -------- </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- -------- HOTELS & GAMING -- 0.3% *8 Aztar Corp. ...................................... $ 176 -------- INSURANCE -- 6.1% 5 Everest Re Group Ltd. ............................ 415 16 Fidelity National Financial, Inc. ................ 630 14 First American Corp. ............................. 420 *15 Health Net, Inc. ................................. 494 7 IPC Holdings Ltd. ................................ 253 20 Old Republic International Corp. ................. 506 *10 Oxford Health Plans, Inc. ........................ 448 5 RenaissanceRe Holdings Ltd. ...................... 240 -------- 3,406 -------- MACHINERY -- 3.3% 3 Briggs & Stratton Corp. .......................... 195 4 Engineered Support Systems, Inc. ................. 237 *25 Oil States International, Inc. ................... 350 8 Pall Corp. ....................................... 215 *7 Varian Medical Systems, Inc. ..................... 470 11 York International Corp. ......................... 390 -------- 1,857 -------- MEDIA & ENTERTAINMENT -- 3.5% *7 Avid Technology, Inc. ............................ 326 *9 COX Radio, Inc., Class A.......................... 225 *6 Entercom Communications Corp. .................... 318 *14 Macrovision Corp. ................................ 307 *11 Valassis Communications, Inc. .................... 317 1 Washington Post................................... 475 -------- 1,968 -------- MEDICAL INSTRUMENTS & SUPPLIES -- 1.2% 8 Beckman Coulter, Inc. ............................ 396 *12 Steris Corp. ..................................... 262 -------- 658 -------- METALS, MINERALS & MINING -- 1.7% 9 Crane Co. ........................................ 261 *4 Phelps Dodge Corp. ............................... 266 10 Precision Castparts Corp. ........................ 445 -------- 972 -------- RESEARCH & TESTING FACILITIES -- 0.7% 3 Moody's Corp. .................................... 182 *7 Pharmaceutical Product Development, Inc. ......... 197 -------- 379 -------- </Table> The accompanying notes are an integral part of this financial statement. 83 HARTFORD MIDCAP STOCK HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- (CONTINUED) RETAIL -- 6.8% *9 Abercrombie & Fitch Co. .......................... $ 220 9 Bob Evans Farms................................... 292 *13 Borders Group, Inc. .............................. 285 *10 Brinker International, Inc. ...................... 325 6 CBRL Group, Inc. ................................. 210 *10 Chico's FAS, Inc. ................................ 351 22 Claire's Stores, Inc. ............................ 418 8 Michaels Stores, Inc. ............................ 336 *7 Movie Gallery, Inc. .............................. 138 14 Pier 1 Imports, Inc. ............................. 313 14 Ross Stores, Inc. ................................ 370 8 Ruby Tuesday, Inc. ............................... 239 *6 Zale Corp. ....................................... 330 -------- 3,827 -------- RUBBER & PLASTICS PRODUCTS -- 0.3% *6 Jarden Corp. ..................................... 168 -------- SOFTWARE & SERVICES -- 5.6% 4 Adobe Systems, Inc. .............................. 149 *8 Affiliated Computer Services, Inc., Class A....... 452 *7 CheckFree Corp. .................................. 199 *13 Citrix Systems, Inc. ............................. 265 6 Deluxe Corp. ..................................... 236 *5 Digital River, Inc. .............................. 102 6 Factset Research Systems, Inc. ................... 229 12 GTECH Holdings Corp. ............................. 604 9 Reynolds & Reynolds Co. (The)..................... 259 *12 SunGard Data Systems, Inc. ....................... 321 *6 Take-Two Interactive Software, Inc. .............. 179 *12 United Online, Inc. .............................. 201 -------- 3,196 -------- TRANSPORTATION -- 3.0% 21 ArvinMeritor, Inc. ............................... 497 7 Harsco Corp. ..................................... 285 *7 JB Hunt Transport Services, Inc. ................. 194 *5 Landstar System, Inc. ............................ 183 3 Magna International, Inc. ........................ 248 8 Robinson (C.H.) Worldwide, Inc. .................. 318 -------- 1,725 -------- UTILITIES -- 5.3% 6 Energen Corp. (The)............................... 254 14 Great Plains Energy, Inc. ........................ 452 8 Hawaiian Electric Industries...................... 360 9 Northeast Utilities............................... 175 12 Questar Corp. .................................... 409 18 Republic Services, Inc. .......................... 464 14 Scana Corp. ...................................... 469 10 WPS Resources Corp. .............................. 444 -------- 3,027 -------- Total common stocks............................... $ 54,545 ======== <Caption> MARKET SHARES VALUE # - --------- -------- WARRANTS -- 0.0% BANKS -- 0.0% *12 Dime Bancorp, Inc................................. $ 2 -------- Total warrants.................................... $ 2 ======== SHORT-TERM SECURITIES -- 2.9% INVESTMENT COMPANIES -- 2.9% 1,641 SSgA Money Market Fund............................ $ 1,641 -------- Total short-term securities....................... $ 1,641 ======== </Table> <Table> DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $43,997)................ 96.9% $ 54,545 Total warrants (cost $ @@ --)..................... 0.0 2 Total short-term securities (cost $1,641)......... 2.9 1,641 ----- -------- Total investment in securities (total cost $45,638)........................................ 99.8 56,188 Cash, receivables and other assets................ 2.9 1,608 Payable for securities purchased.................. (2.6) (1,454) Payable for Fund shares redeemed.................. (0.1) (52) Other liabilities................................. (0.0) (5) ----- -------- Net assets........................................ 100.0% $ 56,285 ===== ======== </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 500,000 shares authorized; 5,022 shares outstanding....... $ 5 Paid in capital..................................... 51,876 Accumulated net investment income................... 76 Accumulated net realized loss on investments........ (6,222) Unrealized appreciation on investments.............. 10,550 ------- Net assets.......................................... $56,285 ======= </Table> <Table> Class IA Net asset value per share ($56,285 / 5,022 shares outstanding) (500,000 shares authorized)......... $11.21 ====== </Table> <Table> & Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 1.0% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. @@ Due to the presentation of the financial statements in thousands, the number of shares and/or market value round to zero. </Table> The accompanying notes are an integral part of this financial statement. 84 HARTFORD MONEY MARKET HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - --------- ---------- COMMERCIAL PAPER -- 35.0% $@50,000 Bradford & Bingley PLC 1.15% due 01/07/05.............................. $ 50,000 55,000 Cafco 1.08% due 02/18/04.............................. 54,921 36,500 Diageo Capital PLC 0.00% due 03/18/04.............................. 36,411 42,500 du Pont (E.I.) de Nemours & Co. 0.00% due 02/10/04.............................. 42,450 50,000 Household Finance Corp. 1.08% due 01/06/04.............................. 49,993 25,000 Nationwide Building Society 0.00% due 01/07/04.............................. 24,995 45,391 Old Line Funding Corp. 0.00% due 01/23/04.............................. 45,360 55,000 Preferred Receivable Funding 0.00% due 02/04/04.............................. 54,944 55,000 Province of Quebec 1.07% due 01/28/04.............................. 54,956 42,500 Sara Lee 1.15% due 02/06/04.............................. 42,451 55,000 Sheffield Receivable Corp. 0.00% due 01/26/04.............................. 54,958 50,000 Spintab 0.00% due 02/03/04.............................. 49,950 44,507 Svenska Handelsbanken 0.00% due 02/17/04.............................. 44,444 42,500 Toyota Motor Credit Corp. 1.06% due 01/22/04.............................. 42,474 ---------- 648,307 ---------- Total commercial paper............................ $ 648,307 ========== CORPORATE NOTES -- 58.7% $ 40,000 American Express Credit 1.261% due 12/27/04............................. $ 40,065 8,500 American Express Credit 1.274% due 12/16/04............................. 8,513 42,500 American General Finance 1.34% due 08/06/04.............................. 42,554 17,000 Bank One Corp. 1.45% due 02/20/04.............................. 17,007 25,000 Bear Stearns Co., Inc. 1.319% due 02/12/04............................. 25,004 8,500 Bear Stearns Co., Inc. 1.423% due 06/01/04............................. 8,510 8,500 Bear Stearns Co., Inc. 1.56% due 09/21/04.............................. 8,525 @25,000 Cargill, Inc. 1.16% due 01/14/04.............................. 25,000 43,000 Caterpillar, Inc. 1.323% due 08/02/04............................. 43,051 42,000 Citigroup Global 1.29% due 06/17/04.............................. 42,030 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - --------- ---------- $ 13,320 Diageo Capital PLC 6.625% due 06/24/04............................. $ 13,660 50,000 Federal Home Loan Bank 1.50% due 12/24/04.............................. 50,000 30,000 Federal Home Loan Mortgage Association 1.25% due 08/27/04.............................. 30,000 50,000 Federal Home Loan Mortgage Association 1.40% due 11/03/04.............................. 50,000 50,000 Federal National Mortgage Association 1.43% due 11/15/04.............................. 50,000 50,000 Fleet Financial Group 1.41% due 02/19/04.............................. 50,014 22,000 General Electric Capital Corp. 1.141% due 01/28/04............................. 22,001 39,000 General Electric Capital Corp. 6.875% due 09/15/04............................. 40,528 50,000 Goldman Sachs Group LP 1.11% due 10/25/04.............................. 50,000 @37,500 Honda Motor Corp. 1.12% due 10/22/04.............................. 37,500 51,000 IBM Corp. 1.295% due 09/27/04............................. 51,067 48,750 Key Bank N.A. 1.298% due 03/01/04............................. 48,763 34,230 Lehman Brother Holdings, Inc. 6.625% due 04/01/04............................. 34,681 20,000 Merrill Lynch & Co., Inc. 1.37% due 08/09/04.............................. 20,029 17,000 Merrill Lynch & Co., Inc. 1.42% due 06/11/04.............................. 17,023 55,000 Morgan (J.P.) Chase & Co. 1.285% due 02/05/04............................. 55,008 54,000 Morgan Stanley Group 1.33% due 03/19/04.............................. 54,023 @30,000 Nationwide Building Society 1.14% due 07/23/04.............................. 30,000 @50,000 Northern Rock PLC 1.15% due 01/16/04.............................. 50,000 42,000 Washington Mutual Bank 1.159% due 07/29/04............................. 41,997 30,000 Wells Fargo & Co. 1.103% due 01/14/04............................. 30,000 ---------- 1,086,553 ---------- Total corporate notes............................. $1,086,553 ========== SHORT-TERM SECURITIES -- 3.3% REPURCHASE AGREEMENTS -- 3.3% $ 61,338 Joint Repurchase Agreement (See Note 2(d)) 0.84% due 01/02/04.................................... $ 61,338 ---------- Total short-term securities....................... $ 61,338 ========== </Table> The accompanying notes are an integral part of this financial statement. 85 HARTFORD MONEY MARKET HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET VALUE # ---------- DIVERSIFICATION OF NET ASSETS: Total commercial paper (cost $648,307)............ 35.0% $ 648,307 Total corporate notes (cost $1,086,553)........... 58.7 1,086,553 Total repurchase agreements (cost $61,338)........ 3.3 61,338 ----- ---------- Total investment in securities (total cost $1,796,198)..................................... 97.0 1,796,198 Cash, receivables and other assets................ 3.0 55,266 Dividends payable................................. (0.0) (1,005) Other liabilities................................. (0.0) (90) ----- ---------- Net assets........................................ 100.0% $1,850,369 ===== ========== </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 7,000,000 shares authorized; 1,850,369 shares outstanding... $ 1,850 Paid in capital..................................... 1,848,519 ---------- Net assets.......................................... $1,850,369 ========== </Table> <Table> Class IA Net asset value per share ($1,609,439 / 1,609,439 shares outstanding) (6,000,000 shares authorized)... $1.00 ===== Class IB Net asset value per share ($240,930 / 240,930 shares outstanding) (1,000,000 shares authorized).......... $1.00 ===== </Table> <Table> # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. @ Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2003, the market value of these securities amounted to $192,500 or 10.4% of net assets. (See Note 2(m)). </Table> The accompanying notes are an integral part of this financial statement. 86 HARTFORD MULTISECTOR BOND HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT I VALUE # - ---------- -------- CONVERTIBLE BONDS V -- 0.3% COMMUNICATIONS -- 0.3% EUR 75 Colt Telecom Group PLC (B3 Moodys) 2.00% due 12/16/06........................................ $ 103 -------- Total convertible bonds........................... $ 103 ======== <Caption> SHARES - ---------- CONVERTIBLE PREFERRED STOCKS -- 0.0% SOFTWARE & SERVICES -- 0.0% @##2 Knology, Inc. .................................... $ 4 -------- Total convertible preferred stocks................ $ 4 ======== <Caption> PRINCIPAL AMOUNT - ---------- CORPORATE NOTES V -- 65.5% AEROSPACE & DEFENSE -- 0.3% $ 75 Raytheon Co. (Baa3 Moodys) 6.75% due 08/15/07.............................. $ 83 -------- BANKS -- 17.9% @##75 American Savings Bank (A3 Moodys) 6.625% due 02/15/06............................. 80 50 Associates Corp. of North America (Aa2 Moodys) 8.15% due 08/01/09.............................. 60 75 BB&T Corp. (A2 Moodys) 5.20% due 12/23/15.............................. 74 125 Bank United (A3 Moodys) 8.00% due 03/15/09.............................. 148 100 Bank of America Corp. (Aa3 Moodys) 8.57% due 11/15/24.............................. 130 @200 Bank of New York Institutional Capital Trust A (A1 Moodys) 7.78% due 12/01/26.............................. 220 175 Barnett Capital Trust I (Aa3 Moodys) 8.06% due 12/01/26.............................. 200 225 Barnett Capital Trust II (Aa3 Moodys) 7.95% due 12/01/26.............................. 255 50 CIT Group, Inc. (A2 Moodys) 7.125% due 10/15/04............................. 52 50 CIT Group, Inc. (A2 Moodys) 7.625% due 08/16/05............................. 54 100 Capital One Bank (Baa2 Moodys) 8.25% due 06/15/05.............................. 108 350..... Capital One Financial Corp. (Baa3 Moodys) 7.25% due 05/01/06.............................. 379 100..... Capital One Financial Corp. (Baa3 Moodys) 8.75% due 02/01/07.............................. 113 @250.... Centura Capital Trust I (A2 Moodys) 8.845% due 06/01/27............................. 286 75 Chase Manhattan Corp. (The) (A2 Moodys) 7.875% due 07/15/06............................. 85 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- -------- BANKS -- (CONTINUED) @200 Citicorp Lease Pass-Through Trust 1999-1 (A3 Moodys) 8.04% due 12/15/19.............................. $ 234 $ @325 Citicorp Lease Pass-Through Trust 1999-1 (Aa1 Moodys) 7.22% due 06/15/05.............................. $ 348 175 Citigroup, Inc. (Aa2 Moodys) 6.00% due 10/31/33.............................. 175 50 Countrywide Home Loans, Inc. (A3 Moodys) 3.50% due 12/19/05.............................. 51 50 Countrywide Home Loans, Inc. (A3 Moodys) 5.50% due 08/01/06.............................. 53 105 First Empire Capital Trust I (Baa1 Moodys) 8.234% due 02/01/27............................. 121 65 Ford Motor Credit Co. (A3 Moodys) 6.70% due 07/16/04.............................. 67 100 Ford Motor Credit Co. (A3 Moodys) 6.875% due 02/01/06............................. 107 60 Ford Motor Credit Co. (A3 Moodys) 7.50% due 03/15/05.............................. 63 100 General Electric Capital Corp. (Aaa Moodys) 4.25% due 12/01/10.............................. 100 160 General Electric Capital Corp. (Aaa Moodys) 5.875% due 02/15/12............................. 172 100 General Electric Capital Corp. (Aaa Moodys) 6.00% due 06/15/12.............................. 108 100 Golden State Bankcorp, Inc. (Aa2 Moodys) 10.00% due 10/01/06............................. 118 15 Household Finance Corp. (A1 Moodys) 3.375% due 02/21/06............................. 15 100 Household Finance Corp. (A1 Moodys) 6.375% due 11/27/12............................. 110 60 Household Finance Corp. (A1 Moodys) 6.50% due 01/24/06.............................. 65 80 Lloyds TSB Bank PLC (Aa1 Moodys) 1.50% due 06/29/49.............................. 67 130 NBD Bank N.A. (Aa3 Moodys) 8.25% due 11/01/24.............................. 164 125 National Rural Utilities Cooperative Finance Corp. (A1 Moodys) 6.00% due 05/15/06.............................. 135 @75 RBS Capital Trust I (A1 Moodys) 4.709% due 12/31/49............................. 72 300 UBS Preferred Funding Trust I (A1 Moodys) 8.622% due 12/29/49............................. 370 100 Union Planters Corp. (A2 Moodys) 4.375% due 12/01/10............................. 100 100 Wachovia Corp. (A1 Moodys) 7.50% due 04/15/35.............................. 120 100 Washington Mutual, Inc. (A3 Moodys) 8.25% due 06/15/05.............................. 109 75 Washington Mutual, Inc. (Baa1 Moodys) 8.25% due 04/01/10.............................. 90 -------- 5,378 -------- </Table> The accompanying notes are an integral part of this financial statement. 87 HARTFORD MULTISECTOR BOND HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- -------- CORPORATE NOTES V -- (CONTINUED) BUSINESS SERVICES -- 0.2% $ 65 United Rentals, Inc. (B1 Moodys) 10.75% due 04/15/08............................. $ 73 -------- CHEMICALS -- 0.1% 40 Equistar Chemicals LP (B2 Moodys) 10.125% due 09/01/08............................ 44 -------- COMMUNICATIONS -- 10.0% L100 Adelphia Communications Corp. (Default) 10.875% due 10/01/10............................ 94 100 Centel Capital Corp. (Baa2 Moodys) 9.00% due 10/15/19.............................. 119 65 Citizens Communications Co. (Baa2 Moodys) 9.25% due 05/15/11.............................. 77 175 Comsat Corp. (Baa2 Moodys) 8.66% due 11/30/06.............................. 201 45 GTE Hawaiian Telephone Co. (Baa1 Moodys) 7.00% due 02/01/06.............................. 49 75 Nextel Communications, Inc. (B2 Moodys) 7.375% due 08/01/15............................. 81 55 Qwest Capital Funding, Inc. (Caa2 Moodys) 7.00% due 08/03/09.............................. 55 80 Qwest Capital Funding, Inc. (Caa2 Moodys) 7.25% due 02/15/11.............................. 79 210 Qwest Corp. (Ba3 Moodys) 5.65% due 11/01/04.............................. 209 250 Sprint Capital Corp. (Baa3 Moodys) 6.00% due 01/15/07.............................. 267 150 Sprint Capital Corp. (Baa3 Moodys) 6.125% due 11/15/08............................. 160 175 Sprint Capital Corp. (Baa3 Moodys) 7.125% due 01/30/06............................. 189 65 Sprint Capital Corp. (Baa3 Moodys) 7.90% due 03/15/05.............................. 69 75 Sprint Capital Corp. (Baa3 Moodys) 8.75% due 03/15/32.............................. 89 225 TCI Communications Finance (Ba1 Moodys) 9.65% due 03/31/27.............................. 271 50 TCI Communications, Inc. (Baa3 Moodys) 8.35% due 02/15/05.............................. 53 350 TeleCorp PCS, Inc. (Baa2 Moodys) 10.625% due 07/15/10............................ 409 275 Tritel PCS, Inc. (Baa2 Moodys) 10.375% due 01/15/11............................ 329 100 Verizon Communications, Inc. (Aa3 Moodys) 5.65% due 11/15/11.............................. 105 75 Verizon Global Funding Corp. (A2 Moodys) 7.75% due 12/01/30.............................. 88 -------- 2,993 -------- CONSTRUCTION -- 1.3% 75 Horton (D.R.), Inc. (Ba1 Moodys) 8.00% due 02/01/09.............................. 85 101 Lennar Corp. (Baa3 Moodys) 9.95% due 05/01/10.............................. 116 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- -------- CONSTRUCTION -- (CONTINUED) $ 125 MDC Holdings, Inc. (Baa3 Moodys) 5.50% due 05/15/13.............................. $ 125 60 WCI Communities, Inc. (Ba3 Moodys) 9.125% due 05/01/12............................. 66 -------- 392 -------- CONSUMER DURABLES -- 0.4% @50 Anchor Glass Container (B2 Moodys) 11.00% due 02/15/13............................. 58 65 Owens-Illinois, Inc. (B3 Moodys) 7.50% due 05/15/10.............................. 67 -------- 125 -------- CONSUMER NON-DURABLES -- 0.2% 60 Safeway, Inc. (Baa2 Moodys) 2.50% due 11/01/05.............................. 59 -------- ELECTRICAL EQUIPMENT -- 0.1% 35 Fisher Scientific International (B2 Moodys) 8.125% due 05/01/12............................. 38 -------- ELECTRONICS -- 0.6% 100 GE Global Insurance Holding Corp. (A1 Moodys) 7.50% due 06/15/10.............................. 115 50 General Electric Global Insurance (A1 Moodys) 7.00% due 02/15/26.............................. 54 -------- 169 -------- ENERGY & SERVICES -- 3.0% 200 Newfield Exploration Co. (Ba2 Moodys) 7.625% due 03/01/11............................. 223 50 Occidental Petroleum Corp. (Baa1 Moodys) 6.50% due 04/01/05.............................. 53 100 R&B Falcon Corp. (Baa3 Moodys) 6.75% due 04/15/05.............................. 106 200 TGT Pipeline LLC (Baa2 Moodys) 5.20% due 06/01/18.............................. 187 125 Transocean, Inc. (Baa2 Moodys) 6.95% due 04/15/08.............................. 140 150 Transocean, Inc. (Baa2 Moodys) 8.00% due 04/15/27.............................. 178 -------- 887 -------- FINANCIAL SERVICES -- 2.2% @150 Corestates Capital Trust (A1 Moodys) 8.00% due 12/15/26.............................. 170 @50 Goldman Sachs Group LP (Aa3 Moodys) 7.25% due 10/01/05.............................. 55 75 Host Marriott LP (Ba3 Moodys) 9.50% due 01/15/07.............................. 83 75 Lehman Brothers, Inc. (A1 Moodys) 11.625% due 05/15/05............................ 84 </Table> The accompanying notes are an integral part of this financial statement. 88 - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- -------- CORPORATE NOTES V -- (CONTINUED) FINANCIAL SERVICES -- (CONTINUED) $ 100 Morgan Stanley (Aa3 Moodys) 6.30% due 01/15/06.............................. $ 108 @##97 Reg Diversified Funding (A1 Moodys) 9.25% due 03/15/30.............................. 107 35 iStar Financial, Inc. (Ba1 Moodys) 8.75% due 08/15/08.............................. 40 -------- 647 -------- FOOD, BEVERAGE & TOBACCO -- 1.0% 90 Altria Group, Inc. (Baa2 Moodys) 7.00% due 11/04/13.............................. 96 35 Constellation Brands, Inc. (Ba3 Moodys) 8.125% due 01/15/12............................. 38 45 Philip Morris Co., Inc. (Baa2 Moodys) 6.375% due 02/01/06............................. 48 120 Philip Morris Co., Inc. (Baa2 Moodys) 7.125% due 10/01/04............................. 124 -------- 306 -------- HEALTH SERVICES -- 0.7% 75 HCA, Inc. (Ba1 Moodys) 6.25% due 02/15/13.............................. 77 100 ING Capital Funding Trust (A2 Moodys) 8.439% due 12/31/49............................. 121 -------- 198 -------- HOTELS & GAMING -- 0.3% 25 Hilton Hotels Corp. (Ba1 Moodys) 7.625% due 12/01/12............................. 28 50 Mohegan Tribal Gaming Authority (Ba3 Moodys) 8.00% due 04/01/12.............................. 54 -------- 82 -------- INSURANCE -- 1.5% @##75 Americo Life, Inc. (Ba1 Moodys) 7.875% due 05/01/13............................. 75 75 International Lease Finance Corp. (A1 Moodys) 2.95% due 05/23/06.............................. 76 @100 John Hancock Global Funding II (Aa3 Moodys) 5.00% due 07/27/07.............................. 106 30 Lincoln National Corp. (A3 Moodys) 9.125% due 10/01/24............................. 33 50 Reliastar Financial Corp. (A1 Moodys) 8.00% due 10/30/06.............................. 57 35 Torchmark Corp. (A3 Moodys) 7.875% due 05/15/23............................. 41 @50 URC Holdings Corp. (Aa3 Moodys) 7.875% due 06/30/06............................. 56 -------- 444 -------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- -------- MEDIA & ENTERTAINMENT -- 9.1% $ 250 American Greetings Corp. (Ba1 Moodys) 6.10% due 08/01/28.............................. $ 258 50 COX Radio, Inc. (Baa3 Moodys) 6.625% due 02/15/06............................. 54 175 CSC Holdings, Inc. (B1 Moodys) 7.25% due 07/15/08.............................. 182 100 CSC Holdings, Inc. (B1 Moodys) 7.875% due 12/15/07............................. 106 350 Clear Channel Communications, Inc. (Ba1 Moodys) 8.00% due 11/01/08.............................. 405 100 Comcast Corp. (Ba2 Moodys) 10.625% due 07/15/12............................ 127 100 Continental Cablevision, Inc. (Baa3 Moodys) 9.50% due 08/01/13.............................. 116 200 Lenfest Communications, Inc. (Ba1 Moodys) 10.50% due 06/15/06............................. 233 200 Liberty Media Corp. (Baa3 Moodys) 3.50% due 09/25/06.............................. 201 125 News America Holdings, Inc. (Baa3 Moodys) 7.70% due 10/30/25.............................. 146 125 News America Holdings, Inc. (Baa3 Moodys) 7.75% due 01/20/24.............................. 147 65 Park Place Entertainment Corp. (Ba1 Moodys) 7.00% due 04/15/13.............................. 69 125 Time Warner, Inc. (Baa1 Moodys) 6.875% due 06/15/18............................. 137 100 Time Warner, Inc. (Baa1 Moodys) 7.25% due 10/15/17.............................. 114 100 Time Warner, Inc. (Baa1 Moodys) 7.57% due 02/01/24.............................. 113 125 Time Warner, Inc. (Baa1 Moodys) 7.75% due 06/15/05.............................. 135 150 Time Warner, Inc. (Baa1 Moodys) 9.15% due 02/01/23.............................. 194 -------- 2,737 -------- MEDICAL INSTRUMENTS & SUPPLIES -- 0.3% 90 Hanger Orthopedic Group, Inc. (B2 Moodys) 10.375% due 02/15/09............................ 102 -------- REAL ESTATE -- 0.3% 75 EOP Operating LP (Baa1 Moodys) 8.375% due 03/15/06............................. 84 -------- REAL ESTATE INVESTMENT TRUST -- 0.2% @##60 First Industrial Realty Trust, Inc. (Baa2 Moodys) 7.375% due 05/15/04 61 -------- RETAIL -- 1.5% 35 Fred Meyer, Inc. (Baa3 Moodys) 7.375% due 03/01/05............................. 37 175 Hertz Corp. (Baa2 Moodys) 1.71% due 08/13/04.............................. 175 </Table> The accompanying notes are an integral part of this financial statement. 89 HARTFORD MULTISECTOR BOND HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- -------- CORPORATE NOTES V -- (CONTINUED) RETAIL -- (CONTINUED) $ 80 McDonald's Corp. (A2 Moodys) 7.05% due 11/15/25.............................. $ 86 @100 Suburban Propane Partners LP (B1 Moodys) 6.875% due 12/15/13............................. 101 55 Wal-Mart Stores, Inc. (Aa2 Moodys) 8.50% due 09/15/24.............................. 59 -------- 458 -------- SOFTWARE & SERVICES -- 0.3% 65 AOL Time Warner, Inc. (Baa1 Moodys) 6.125% due 04/15/06............................. 70 @24 Knology, Inc. (Not Rated) 13.00% due 11/30/09............................. 24 -------- 94 -------- TRANSPORTATION -- 4.2% 225 DaimlerChrysler North America Holding Corp. (A3 Moodys) 3.40% due 12/15/04.............................. 227 75 General Motors Acceptance Corp. (A3 Moodys) 4.50% due 07/15/06.............................. 77 150 General Motors Acceptance Corp. (A3 Moodys) 5.25% due 05/16/05.............................. 155 400 General Motors Acceptance Corp. (A3 Moodys) 6.75% due 01/15/06.............................. 429 325 Roadway Corp. (Ba1 Moodys) 8.25% due 12/01/08.............................. 359 -------- 1,247 -------- U.S. GOVERNMENT AGENCIES -- 1.8% 150 Federal Home Loan Mortgage Association (Aaa Moodys) 2.75% due 03/15/08.............................. 148 200 Federal National Mortgage Association (Aa2 Moodys) 5.25% due 07/01/12.............................. 205 100 Federal National Mortgage Association (Aaa Moodys) 1.875% due 09/15/05............................. 100 100 Federal National Mortgage Association (Aaa Moodys) 4.375% due 09/15/12............................. 99 -------- 552 -------- UTILITIES -- 8.0% 48 AES Red Oak LLC (B2 Moodys) 8.54% due 11/30/19.............................. 52 50 AmerenEnergy Generating Co. (A3 Moodys) 7.75% due 11/01/05.............................. 55 100 American Electric Power Co., Inc. (Baa3 Moodys) 5.25% due 06/01/15.............................. 98 @50 Centerpoint Energy, Inc. (Ba1 Moodys) 5.875% due 06/01/08............................. 52 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- -------- UTILITIES -- (CONTINUED) $ 75 Cinergy Corp. (Baa2 Moodys) 6.25% due 09/01/04.............................. $ 77 125 Consolidated Edison Co. of New York (A1 Moodys) 7.75% due 06/01/26.............................. 138 @##100 Consumers Energy Co. (Baa3 Moodys) 6.00% due 02/15/14.............................. 104 80 Duke Energy Corp. (A3 Moodys) 3.75% due 03/05/08.............................. 81 @60 Dynegy Holdings, Inc. (B3 Moodys) 10.125% due 07/15/13............................ 69 55 GulfTerra Energy Partners LP (B1 Moodys) 8.50% due 06/01/10.............................. 62 98 Kern River Funding Corp. (A3 Moodys) 4.893% due 04/30/18............................. 97 150 Kinder Morgan, Inc. (Baa2 Moodys) 6.80% due 03/01/08.............................. 166 115 Michigan Consolidated Gas Co. (A2 Moodys) 5.70% due 03/15/33.............................. 111 150 New England Telephone & Tele Co. (Aa3 Moodys) 7.65% due 06/15/07.............................. 172 113 Niagara Mohawk Power Corp. (Baa3 Moodys) 7.625% due 10/01/05............................. 123 @##65 Plains All American Pipeline (Ba1 Moodys) 5.625% due 12/15/13............................. 66 85 Public Service Co. of Colorado (Baa1 Moodys) 4.875% due 03/01/13............................. 85 175 Reliant Energy Resources (Ba1 Moodys) 6.50% due 02/01/08.............................. 187 100 Scana Corp. (A1 Moodys) 5.25% due 11/01/18.............................. 100 @100 Southern Power Co. (Baa1 Moodys) 4.875% due 07/15/15............................. 95 225 Waste Management, Inc. (Baa3 Moodys) 7.375% due 08/01/10............................. 260 125 Westar Energy, Inc. (Ba1 Moodys) 7.875% due 05/01/07............................. 140 30 Xcel Energy, Inc. (Baa3 Moodys) 3.40% due 07/01/08.............................. 29 -------- 2,419 -------- Total corporate notes............................. $ 19,672 ======== <Caption> PRINCIPAL AMOUNT - ---------- FOREIGN/YANKEE BONDS & NOTES V -- 22.7% BANKS -- 4.4% $ 100 Abbey National PLC (A1 Moodys) 7.35% due 10/29/49.............................. $ 110 @200 Barclays Bank PLC (Aa3 Moodys) 8.55% due 09/29/49.............................. 246 150 Corp. Andina De Fomento (A2 Moodys) 5.20% due 05/21/13.............................. 149 @75 HSBC Capital Funding LP (A2 Moodys) 4.61% due 12/31/49.............................. 71 </Table> The accompanying notes are an integral part of this financial statement. 90 - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT I VALUE # - ---------- -------- FOREIGN/YANKEE BONDS & NOTES -- (CONTINUED) BANKS -- (CONTINUED) EUR 400 Kreditanstalt fuer Wiederaufbau (Aaa Moodys) 3.50% due 11/15/05.............................. 512 EUR 150 Landesbank Baden-Wuerttemberg Girozentrale (Aaa Moodys) 3.25% due 05/08/08.............................. 187 50 Santander Financial Issuances (A1 Moodys) 7.00% due 04/01/06.............................. 55 -------- 1,330 -------- COMMUNICATIONS -- 2.5% 75 BT Group PLC (Baa1 Moodys) 7.875% due 12/15/05............................. 83 50 Deutsche Telekom International Finance BV (Baa3 Moodys) 8.25% due 06/15/05.............................. 54 @100 Intelsat Ltd. (Baa3 Moodys) 6.50% due 11/01/13.............................. 104 325 TELUS Corp. (Ba1 Moodys) 7.50% due 06/01/07.............................. 364 130 TELUS Corp. (Ba1 Moodys) 8.00% due 06/01/11.............................. 152 -------- 757 -------- ENERGY & SERVICES -- 4.0% 150 Husky Oil Ltd. (Baa2 Moodys) 7.125% due 11/15/06............................. 167 220 Husky Oil Ltd. (Ba1 Moodys) 8.90% due 08/15/28.............................. 254 300 Pemex Project Funding Master Trust Co. (Baa1 Moodys) 7.375% due 12/15/14............................. 320 100 Peteoleos Mexicanos (Baa1 Moodys) 6.50% due 02/01/05.............................. 105 125 Petroleos Mexicanos (Baa1 Moodys) 9.375% due 12/02/08............................. 149 75 Repsol YPF S.A. (Baa2 Moodys) 7.45% due 07/15/05.............................. 81 @110 United Energy Distribution Holdings Ltd. (Aaa Moodys) 4.70% due 04/15/11.............................. 112 -------- 1,188 -------- FINANCIAL SERVICES -- 2.4% 300 Bershire Hathaway, Inc. (Baa2 Moodys) 6.496% due 02/15/08............................. 311 @175 Bershire Hathaway, Inc. (Baa2 Moodys) 8.25% due 02/15/05.............................. 188 70 Pemex Finance Ltd. (Baa1 Moodys) 8.02% due 05/15/07.............................. 77 125 Pemex Finance Ltd. (Baa1 Moodys) 9.69% due 08/15/09.............................. 149 -------- 725 -------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT I VALUE # - ---------- -------- FOREIGN GOVERNMENTS -- 7.0% EUR 500 Bundesobligation (Aaa Moodys) 4.50% due 08/17/07.............................. $ 657 EUR 350 Deutsche Bundesrepublik (Aaa Moodys) 5.00% due 07/04/12.............................. 467 100 Mexico Government International Bond (Baa2 Moodys) 4.625% due 10/08/08............................. 101 150 Mexico Government International Bond (Baa2 Moodys) 6.625% due 03/03/15............................. 155 375 Mexico Government International Bond (Baa2 Moodys) 7.50% due 04/08/33.............................. 387 GBP 175 U.K. Treasury Gilt (Aaa Moodys) 7.25% due 12/07/07.............................. 343 -------- 2,110 -------- HOTELS & GAMING -- 0.3% @75 Intrawest Corp. (B1 Moodys) 7.50% due 10/15/13.............................. 78 -------- MEDIA & ENTERTAINMENT -- 0.7% 200 British Sky Broadcasting PLC (Baa3 Moodys) 7.30% due 10/15/06.............................. 223 -------- UTILITIES -- 1.4% 90 Calpine Canada Energy Finance LLC (Caa1 Moodys) 8.50% due 05/01/08.............................. 72 150 France Telecom S.A. (Baa3 Moodys) 9.75% due 03/01/31.............................. 199 140 Hydro Quebec (NA Moodys) 1.25% due 09/29/49.............................. 125 -------- 396 -------- Total foreign/yankee bonds & notes................ $ 6,807 ======== <Caption> PRINCIPAL AMOUNT - ---------- MUNICIPAL BONDS V -- 0.2% $ 50 Illinois State (Aa3 Moodys) 5.10% due 06/01/33.............................. $ 46 -------- Total municipal bonds............................. $ 46 ======== U.S. TREASURIES & FEDERAL AGENCIES -- 7.7% FEDERAL HOME LOAN MORTGAGE ASSOCIATION -- 1.2% 156 5.50% due 10/01/18................................ $ 162 78 6.00% due 04/01/17 -- 07/01/29.................... 82 33 6.50% due 07/01/31 -- 08/01/32.................... 35 76 7.50% due 09/01/29 -- 11/01/31.................... 81 -------- 360 -------- </Table> The accompanying notes are an integral part of this financial statement. 91 HARTFORD MULTISECTOR BOND HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- -------- U.S. TREASURIES & FEDERAL AGENCIES -- (CONTINUED) FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 4.8% $ 210 5.00% due 02/01/18................................ $ 215 185 5.50% due 06/01/18 -- 10/01/33.................... 190 436 6.00% due 10/01/16 -- 03/01/33.................... 451 317 6.50% due 07/01/16 -- 10/01/32.................... 332 166 7.00% due 02/01/16 -- 09/01/32.................... 176 16 7.50% due 11/01/15 -- 05/01/32.................... 17 28 8.00% due 04/01/32................................ 30 -------- 1,411 -------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 0.9% 98 6.00% due 12/15/31 -- 11/15/32.................... 102 94 6.50% due 03/15/31 -- 09/15/32.................... 99 44 7.00% due 02/15/31 -- 08/15/31.................... 47 3 7.50% due 01/15/32................................ 3 26 8.50% due 11/15/24................................ 28 -------- 279 -------- U.S. TREASURY BONDS -- 0.8% 245 7.25% due 05/15/16................................ $ 248 -------- Total U.S. treasuries & federal agencies.......... $ 2,298 ======== <Caption> SHARES - ---------- WARRANTS -- 0.0% COMMUNICATIONS -- 0.0% @@@- NTELOS, Inc. ..................................... $ -- -------- TRANSPORTATION -- 0.0% @@@- RailAmerica, Inc. ................................ 3 -------- Total warrants.................................... $ 3 ======== <Caption> PRINCIPAL AMOUNT - ---------- SHORT-TERM SECURITIES -- 2.0% REPURCHASE AGREEMENTS -- 2.0% $ 598 dated 12/31/03, maturity amount $598 (Collateralized by $615 FHLB 1.50% due 05/13/05) 0.85% due 01/02/04.............................. $ 598 -------- Total short-term securities....................... $ 598 ======== </Table> <Table> <Caption> MARKET VALUE # -------- DIVERSIFICATION OF NET ASSETS: Total convertible bonds (cost $90)................ 0.3% $ 103 Total convertible preferred stocks (cost $@@--)... 0.0 4 Total corporate notes (cost $19,309).............. 65.5 19,672 Total foreign/yankee bonds & notes (cost $6,432)......................................... 22.7 6,807 Total municipal bonds (cost $50).................. 0.2 46 Total U.S. treasuries & federal agencies (cost $2,285)......................................... 7.7 2,298 Total warrants (cost $1).......................... 0.0 3 Total short-term securities (cost $598)........... 2.0 598 ------ -------- Total investment in securities (total cost $28,765)........................................ 98.4 29,531 Cash, receivables and other assets................ 2.0 596 Payable for securities purchased.................. (0.4) (86) Other liabilities................................. (0.0) (4) ------ -------- Net assets........................................ 100.0% $ 30,037 ====== ======== </Table> The accompanying notes are an integral part of this financial statement. 92 - -------------------------------------------------------------------------------- <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 500,000 shares authorized; 2,680 shares outstanding...................... $ 3 Paid in capital............................................. 29,528 Accumulated net investment income........................... 1,439 Accumulated net realized loss on investments................ (1,606) Unrealized appreciation on investments...................... 766 Unrealized depreciation on futures contracts ++............. (9) Unrealized depreciation on forward foreign currency contracts (See Note 2(g))@@@.............................. (86) Unrealized appreciation on other assets and liabilities in foreign currencies........................................ 2 ------- Net assets.................................................. $30,037 ======= </Table> <Table> Class IA Net asset value per share ($30,037 / 2,680 shares outstanding) (500,000 shares authorized)................................... $11.21 ====== </Table> <Table> & Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 23.0% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes of Financial Statements regarding valuation of securities. @ Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2003, the market value of these securities amounted to $3,245 or 10.8% of net assets (See Note 2(m)). ## Illiquid Securities. At December 31, 2003, the market value of these securities amounted to $497 or 1.7% of net assets. (See Note 2(m)). @@ Due to the presentation of the financial statements in thousands, the number of shares and/or market value round to zero. I All principal amounts are in U.S. dollars unless otherwise indicated. EUR -- Euro GBP -- British Pound V The bond ratings are unaudited. ++ The Fund had 8 U.S. Treasury Note March 2003 Futures contracts open as of December 31, 2003. These contracts had a value of ($1,098) as of December 31, 2003 and were collateralized by U.S. Treasury Bonds, 7.25%, 05/15/16 with a market value of $125. L Debt securities are in default due to bankruptcy. </Table> @@@FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING AT DECEMBER 31, 2003 <Table> <Caption> UNREALIZED CONTRACT DELIVERY APPRECIATION DESCRIPTION MARKET VALUE AMOUNT DATE (DEPRECIATION) - ----------- ------------ -------- -------- -------------- EURO (Sell) $818 $764 01/12/04 $(54) EURO (Sell) 466 434 01/12/04 (32) ---- $(86) ==== </Table> The accompanying notes are an integral part of this financial statement. 93 HARTFORD SMALLCAP GROWTH HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- 96.8% APPAREL & TEXTILE -- 1.0% 110 Albany International Corp. ....................... $ 1,848 *115 Steven Madden Ltd. ............................... 2,344 -------- 4,192 -------- BANKS -- 4.4% +177 American Capital Strategies Ltd. ................. 5,262 80 Downey Financial Corp. ........................... 1,972 76 First Bancorp Puerto Rico......................... 1,487 74 Hancock Holding Co. .............................. 1,997 98 Hanmi Financial Corp. ............................ 959 176 Indymac Bancorp, Inc. ............................ 2,607 156 Irwin Financial Corp. ............................ 2,437 10 Old Second Bancorp, Inc. ......................... 243 46 Peoples Bancorp, Inc. ............................ 686 54 State Financial Services Corp. ................... 722 -------- 18,372 -------- BUSINESS SERVICES -- 6.3% 230 Advo, Inc. ....................................... 3,654 *69 Maximus, Inc. .................................... 2,680 *26 PDI, Inc. ........................................ 684 *167 PRG-Schultz International, Inc. .................. 818 *+234 Pegasystems, Inc. ................................ 2,017 *236 Per-Se Technologies, Inc. ........................ 3,603 *39 Resources Connection, Inc. ....................... 1,068 *184 Right Management Consultants...................... 3,424 *660 UnitedGlobalCom, Inc., Class A.................... 5,593 *119 Watson Wyatt & Co. Holdings....................... 2,871 -------- 26,412 -------- CHEMICALS -- 0.8% 54 Minerals Technologies, Inc. ...................... 1,588 162 Sensient Technologies Corp. ...................... 1,597 -------- 3,185 -------- COMMUNICATIONS -- 8.2% *68 Advanced Fibre Communications, Inc. .............. 1,368 *113 Boston Communications Group....................... 1,050 *289 Checkpoint Systems, Inc. ......................... 5,471 *40 Comtech Telecommunications........................ 1,140 *800 Digital Generation Systems........................ 1,792 *302 General Communication............................. 2,629 *417 McDATA Corp., Class A............................. 3,969 *474 PTEK Holdings, Inc. .............................. 4,176 *53 Plantronics, Inc. ................................ 1,724 *369 Primus Telecommunications Group, Inc. ............ 3,760 *+358 Talk America Holdings, Inc. ...................... 4,118 *217 Tekelec........................................... 3,368 -------- 34,565 -------- COMPUTERS & OFFICE EQUIPMENT -- 2.8% 136 Black Box Corp. .................................. 3,147 *70 Emulex Corp. ..................................... 1,854 *449 Rainbow Technologies, Inc. ....................... 5,059 *100 Sierra Wireless, Inc. ............................ 1,538 -------- 11,598 -------- </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- -------- CONSTRUCTION -- 1.0% 4 Granite Construction, Inc. ....................... $ 52 *127 Washington Group International, Inc. ............. 4,307 -------- 4,359 -------- CONSUMER DURABLES -- 0.6% *94 Genesis Microchip, Inc. .......................... 1,694 *34 Select Comfort Corp. ............................. 829 -------- 2,523 -------- CONSUMER NON-DURABLES -- 2.3% +148 Callaway Golf Co. ................................ 2,489 +265 Nautilus Group, Inc. ............................. 3,727 424 Nu Skin Enterprises, Inc. ........................ 3,626 -------- 9,842 -------- CONSUMER SERVICES -- 0.5% *+109 Coinstar, Inc. ................................... 1,970 -------- DRUGS -- 5.6% *359 Abgenix, Inc. .................................... 4,471 158 Alpharma, Inc., Class A........................... 1,592 192 Diagnostic Products Corp. ........................ 4,417 *127 Kos Pharmaceuticals, Inc. ........................ 5,483 *112 NPS Pharmaceuticals, Inc. ........................ 3,434 328 Perrigo Co. ...................................... 2,584 *142 Vertex Pharmaceuticals, Inc. ..................... 1,454 -------- 23,435 -------- EDUCATION -- 0.8% *68 ITT Educational Services, Inc. ................... 3,185 -------- ELECTRICAL EQUIPMENT -- 1.5% *153 Flir Systems, Inc. ............................... 5,566 88 MTS Systems Corp. ................................ 846 -------- 6,412 -------- ELECTRONICS -- 7.5% 60 Ametek, Inc. ..................................... 1,467 *68 Benchmark Electronics, Inc. ...................... 2,350 102 CTS Corp. ........................................ 591 *+131 Conexant Systems, Inc. ........................... 651 *38 Dupont Photomasks, Inc. .......................... 908 *166 ESS Technology.................................... 2,817 *97 Exar Corp. ....................................... 1,652 *65 Fairchild Semiconductor International Corp., Class A............................................... 1,621 *127 Hutchinson Technology, Inc. ...................... 3,898 236 Methode Electronics, Inc. ........................ 1,448 *50 Moog, Inc. ....................................... 2,465 *438 ON Semiconductor Corp. ........................... 2,824 *177 Photronics, Inc. ................................. 3,532 *441 RF Micro Devices, Inc. ........................... 4,427 *25 Silicon Laboratories, Inc. ....................... 1,076 -------- 31,727 -------- ENERGY & SERVICES -- 2.7% 210 Cabot Oil & Gas Corp. ............................ 3,067 464 Chesapeake Energy Corp. .......................... 3,151 </Table> The accompanying notes are an integral part of this financial statement. 94 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- (CONTINUED) ENERGY & SERVICES -- (CONTINUED) *75 Forest Oil Corp. ................................. $ 2,128 126 Patina Oil & Gas Corp. ........................... 3,077 -------- 11,423 -------- FINANCIAL SERVICES -- 1.1% *69 Affiliated Managers Group, Inc. .................. 4,795 -------- FOREST & PAPER PRODUCTS -- 1.8% 132 Glatfelter........................................ 822 720 Longview Fibre Co. ............................... 4,446 70 Schweitzer-Mauduit International, Inc. ........... 1,036 168 Wausau-Mosinee Paper Corp. ....................... 1,136 -------- 7,440 -------- HEALTH SERVICES -- 0.7% *65 Apria Healthcare Group, Inc. ..................... 1,836 *34 LifePoint Hospitals, Inc. ........................ 1,007 -------- 2,843 -------- HOTELS & GAMING -- 0.6% *103 Aztar Corp. ...................................... 2,324 -------- INSURANCE -- 5.3% *80 American Medical Security Group, Inc. ............ 1,794 *61 Amerigroup Corp. ................................. 2,597 *124 Clark, Inc. ...................................... 2,378 86 Landamerica Financial Group, Inc. ................ 2,226 256 Reinsurance Group of America, Inc. ............... 4,928 808 Scottish Annuity & Life Holdings Ltd. ............ 8,401 -------- 22,324 -------- MACHINERY -- 1.2% 192 Graco, Inc. ...................................... 3,838 70 York International Corp. ......................... 1,295 -------- 5,133 -------- MEDIA & ENTERTAINMENT -- 1.2% *53 Argosy Gaming Co. ................................ 1,377 *30 Beasley Broadcast Group, Inc., ADR................ 498 *219 Hollywood Entertainment Corp. .................... 3,007 -------- 4,882 -------- MEDICAL INSTRUMENTS & SUPPLIES -- 7.1% *108 Advanced Medical Optics, Inc. .................... 2,124 *80 Armor Holdings, Inc. ............................. 2,113 *372 Cytyc Corp. ...................................... 5,124 *48 Haemonetics Corp. ................................ 1,142 64 Invacare Corp. ................................... 1,288 *115 Invision Technologies, Inc. ...................... 3,874 80 Owens & Minor, Inc. .............................. 876 442 PolyMedica Corp. ................................. 5,815 *120 Respironics, Inc. ................................ 5,420 *17 Ventana Medical Systems........................... 650 *63 Viasys Healthcare, Inc. .......................... 1,288 -------- 29,714 -------- </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- -------- METALS, MINERALS & MINING -- 1.3% 248 Precision Castparts Corp. ........................ $ 5,617 -------- REAL ESTATE INVESTMENT TRUST -- 0.6% 122 American Home Mortgage Investment Corp. .......... 1,378 50 PS Business Parks, Inc. .......................... 1,040 -------- 2,418 -------- RESEARCH & TESTING FACILITIES -- 7.3% *38 Advisory Board Co. (The).......................... 1,341 *248 Applera Corp. -- Celera Genomics Group............ 3,451 *+253 CV Therapeutics, Inc. ............................ 3,715 *313 Ciphergen Biosystems, Inc. ....................... 3,519 *278 Exelixis, Inc. ................................... 1,970 *489 Gene Logic, Inc. ................................. 2,538 *550 Incyte Genomics, Inc. ............................ 3,763 *175 Kosan Biosciences, Inc. .......................... 1,726 *136 Pharmacopeia, Inc. ............................... 1,930 *243 Regeneron Pharmaceuticals, Inc. .................. 3,570 *+162 Trimeris, Inc. ................................... 3,399 -------- 30,922 -------- RETAIL -- 5.9% *48 AFC Enterprises................................... 934 176 Action Performance Cos., Inc. .................... 1,715 *138 Aeropostale, Inc. ................................ 3,770 *43 Bebe Stores, Inc. ................................ 1,115 *51 CEC Entertaining, Inc. ........................... 2,412 *69 GameStop Corp. ................................... 1,062 *55 Guitar Center, Inc. .............................. 1,792 *122 Hot Topic, Inc. .................................. 3,602 *61 PETCO Animal Supplies, Inc. ...................... 1,857 *309 Pacific Sunwear of California, Inc. .............. 6,521 -------- 24,780 -------- SOFTWARE & SERVICES -- 16.6% *271 Activision, Inc. ................................. 4,924 *320 Actuate Corp. .................................... 995 *149 Acxiom Corp. ..................................... 2,767 *100 Aladdin Knowledge Systems......................... 893 *65 Anteon International Corp. ....................... 2,325 *30 Bankrate, Inc. ................................... 375 *35 CACI International, Inc. ......................... 1,682 *166 CSG Systems International, Inc. .................. 2,071 *150 CyberGuard Corp. ................................. 1,311 *342 Dendrite International, Inc. ..................... 5,365 *173 Digital Insight Corp. ............................ 4,308 *156 Electronics for Imaging, Inc. .................... 4,057 *68 Filenet Corp. .................................... 1,850 *+40 FindWhat.com...................................... 750 *389 Gartner Group, Inc., Class A...................... 4,400 *212 Hypercom Corp. ................................... 1,008 *+117 Hyperion Solutions Corp. ......................... 3,529 *2192 i2 Technologies, Inc. ............................ 3,638 *120 Kronos, Inc. ..................................... 4,747 *794 LookSmart Ltd. ................................... 1,231 *72 Manhattan Associates, Inc. ....................... 1,979 *65 Mentor Graphics Corp. ............................ 942 *362 Radiant Systems, Inc. ............................ 3,041 </Table> The accompanying notes are an integral part of this financial statement. 95 HARTFORD SMALLCAP GROWTH HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- (CONTINUED) SOFTWARE & SERVICES -- (CONTINUED) *101 Transaction Systems Architects, Inc. ............. $ 2,288 *560 Trizetto Group.................................... 3,609 *135 VitalWorks, Inc. ................................. 597 *289 WebEx Communications, Inc. ....................... 5,813 -------- 70,495 -------- UTILITIES -- 0.1% 40 Cleco Corp. ...................................... 719 -------- Total common stocks............................... $407,606 ======== SHORT-TERM SECURITIES -- 17.0% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 5.7% 12,088 Evergreen Institutional Money Market Fund......... $ 12,088 11,977 Evergreen Prime Cash Management Money Market Fund............................................ 11,977 -------- 24,065 -------- <Caption> PRINCIPAL AMOUNT - --------- REPURCHASE AGREEMENTS -- 11.0% $46,355 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... 46,355 -------- 1,000 U.S. TREASURY BILLS -- 0.3% 0.885% due 01/08/04... 1,000 -------- Total short-term securities....................... $ 71,420 ======== </Table> <Table> DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $353,894)........... 96.8% $407,606 Total short-term securities (cost $71,420).... 17.0 71,420 ----- -------- Total investment in securities (total cost $425,314) -- including $24,218 of securities loaned (See Note 2(i))...................... 113.8 479,026 Cash, receivables and other assets -- including $1,650 of cash held as collateral on Loaned Securities (See Note 2(i))....................................... 0.6 2,712 Payable for securities purchased.............. (4.0) (17,223) Payable for Fund shares redeemed.............. (4.2) (17,577) Securities lending collateral payable to brokers (See Note 2(i))..................... (6.1) (25,715) Other liabilities............................. (0.1) (251) ----- -------- Net assets.................................... 100.0% $420,972 ===== ======== </Table> <Table> <Caption> MARKET VALUE # -------- SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 700,000 shares authorized; 23,983 shares outstanding....... $ 24 Paid in capital...................................... 446,792 Accumulated net investment loss...................... (1) Accumulated net realized loss on investments......... (79,802) Unrealized appreciation on investments............... 53,712 Unrealized appreciation on futures contracts ++...... 247 -------- Net assets........................................... $420,972 ======== </Table> <Table> Class IA Net asset value per share ($346,380 / 19,734 shares outstanding) (500,000 shares authorized)........... $17.55 ====== Class IB Net asset value per share ($74,592 / 4,249 shares outstanding) (200,000 shares authorized)........... $17.55 ====== </Table> <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 0.6% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). ++ The Fund had 67 Russell 2000 March 2003 Futures contracts open as of December 31, 2003. These contracts had a value of $18,666 as of December 31, 2003 and were collateralized by various U.S. Treasury Bills with a market value of $1,000. </Table> The accompanying notes are an integral part of this financial statement. 96 HARTFORD SMALLCAP VALUE HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- 87.3% APPAREL & TEXTILE -- 1.5% 80 Wolverine World Wide, Inc. ....................... $ 1,632 -------- BANKS -- 9.8% 85 Brookline Bancorp, Inc. .......................... 1,309 20 Chittenden Corp. ................................. 656 58 FNB Corp. ........................................ 2,047 52 First Niagara Financial Group, Inc. .............. 772 55 Seacoast Financial Services Corp. ................ 1,508 64 Susquehanna Bancshares, Inc. ..................... 1,601 60 Washington Federal, Inc. ......................... 1,704 37 Waypoint Financial Corp. ......................... 803 -------- 10,400 -------- BUSINESS SERVICES -- 1.1% *122 Spherion Corp..................................... 1,194 -------- CHEMICALS -- 2.1% 68 Lubrizol Corp. (The).............................. 2,195 -------- COMMUNICATIONS -- 1.5% *22 Advanced Fibre Communications, Inc. .............. 433 11 Inter-Tel, Inc. .................................. 285 *29 Openwave Systems, Inc. ........................... 315 *118 Stratex Networks, Inc. ........................... 502 -------- 1,535 -------- CONSTRUCTION -- 3.7% *20 Dycom Industries, Inc. ........................... 536 *36 EMCOR Group, Inc. ................................ 1,558 37 Standard-Pacific Corp. ........................... 1,806 -------- 3,900 -------- CONSUMER DURABLES -- 1.7% 88 La-Z-Boy, Inc. ................................... 1,846 -------- CONSUMER NON-DURABLES -- 3.5% 14 Fresh Del Monte Produce........................... 334 *122 Pinnacle Systems, Inc. ........................... 1,041 *33 Priority Healthcare Corp., Class B................ 788 52 Supervalu, Inc. .................................. 1,492 -------- 3,655 -------- DRUGS -- 1.1% *16 Charles River Laboratories International, Inc. ... 549 40 Perrigo Co. ...................................... 629 -------- 1,178 -------- ELECTRICAL EQUIPMENT -- 2.2% *40 Mettler Toledo International, Inc. ............... 1,688 *37 Newport Corp. .................................... 608 -------- 2,296 -------- ENERGY & SERVICES -- 9.7% 39 Arch Coal, Inc. .................................. 1,216 *69 Cal Dive International, Inc. ..................... 1,664 *43 Forest Oil Corp. ................................. 1,229 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- -------- ENERGY & SERVICES -- (CONTINUED) *193 Key Energy Services, Inc. ........................ $ 1,990 *27 Newfield Exploration Co. ......................... 1,180 35 Tidewater, Inc. .................................. 1,046 *60 Tom Brown, Inc. .................................. 1,935 -------- 10,260 -------- FOOD, BEVERAGE & TOBACCO -- 0.7% 17 Lancaster Colony Corp. ........................... 759 -------- HEALTH SERVICES -- 4.0% *19 Covance, Inc. .................................... 496 *26 LifePoint Hospitals, Inc. ........................ 766 52 Manor Care, Inc. ................................. 1,808 *70 Province Healthcare Co. .......................... 1,120 -------- 4,190 -------- INSURANCE -- 5.3% 25 Harleysville Group, Inc. ......................... 497 84 Horace Mann Educators Corp. ...................... 1,173 35 IPC Holdings Ltd. ................................ 1,363 75 Old Republic International Corp. ................. 1,902 33 Scottish Annuity & Life Holdings Ltd. ............ 686 -------- 5,621 -------- MACHINERY -- 3.1% 75 Joy Global, Inc. ................................. 1,961 50 Kaydon Corp. ..................................... 1,292 -------- 3,253 -------- MEDIA & ENTERTAINMENT -- 1.7% *27 American Greetings Corp. ......................... 580 80 Reader's Digest Association, Inc. (The)........... 1,173 -------- 1,753 -------- MEDICAL INSTRUMENTS & SUPPLIES -- 3.6% *8 Coherent, Inc. ................................... 190 *90 Cytyc Corp. ...................................... 1,238 14 Invacare Corp. ................................... 545 *83 Steris Corp. ..................................... 1,876 -------- 3,849 -------- METALS, MINERALS & MINING -- 4.5% 12 Aptagroup, Inc. .................................. 468 *150 Global Power Equipment Group, Inc. ............... 1,002 *37 Maverick Tube Corp. .............................. 703 *43 Steel Dynamics, Inc. ............................. 998 28 Texas Industries, Inc. ........................... 1,029 30 Worthington Industries, Inc. ..................... 548 -------- 4,748 -------- REAL ESTATE INVESTMENT TRUST -- 8.6% 55 Brandywine Realty Trust........................... 1,472 30 First Industrial Realty Trust, Inc. .............. 1,013 50 Home Properties of NY, Inc. ...................... 2,020 30 Parkway Properties, Inc. ......................... 1,248 </Table> The accompanying notes are an integral part of this financial statement. 97 HARTFORD SMALLCAP VALUE HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- (CONTINUED) REAL ESTATE INVESTMENT TRUST -- (CONTINUED) 50 Prentiss Properties Trust......................... $ 1,650 42 Rayonier, Inc. ................................... 1,723 -------- 9,126 -------- RETAIL -- 1.8% 56 Casey's General Stores, Inc. ..................... 989 *56 Too, Inc. ........................................ 945 -------- 1,934 -------- RUBBER & PLASTICS PRODUCTS -- 2.2% 40 Cooper Tire & Rubber Co. ......................... 855 68 Schulman A, Inc. ................................. 1,450 -------- 2,305 -------- SOFTWARE & SERVICES -- 3.9% *57 Activision, Inc. ................................. 1,037 *40 Covansys Corp. ................................... 437 *96 Informatica Corp. ................................ 989 *40 Internet Security Systems......................... 744 *70 NetIQ Corp. ...................................... 928 -------- 4,135 -------- TRANSPORTATION -- 10.0% 41 AO Smith Corp. ................................... 1,427 25 CNF Transportation, Inc. ......................... 831 19 GATX Corp. ....................................... 532 41 Harsco Corp. ..................................... 1,788 *60 Kansas City Southern.............................. 855 *3 Laidlaw International............................. 37 45 Superior Industries International................. 1,954 23 Teekay Shipping Corp. ............................ 1,312 33 Trinity Industries, Inc. ......................... 1,018 23 USF Corp. ........................................ 776 -------- 10,530 -------- ........ Total common stocks............................... $ 92,294 ======== <Caption> PRINCIPAL AMOUNT - --------- SHORT-TERM SECURITIES -- 13.1% COMMERCIAL PAPER -- 4.7% $5,000 Prudential Funding 0.85% due 01/02/04................................ $ 5,000 -------- CORPORATE NOTES -- 8.4% 8,800 Federal Home Loan Bank 0.75% due 01/02/04................................ 8,800 -------- Total short-term securities....................... $ 13,800 ======== </Table> <Table> <Caption> MARKET VALUE # -------- DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $73,051)................ 87.3% $ 92,294 Total short-term securities (cost $13,800)........ 13.1 13,800 ----- -------- Total investment in securities (total cost $86,851)........................................ 100.4 106,094 Cash, receivables and other assets................ 0.5 547 Payable for securities purchased.................. (0.6) (768) Payable for Fund shares redeemed.................. (0.3) (275) Other liabilities................................. (0.0) (8) ----- -------- Net assets........................................ 100.0% $105,590 ===== ======== </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 700,000 shares authorized; 7,130 shares outstanding...................... $ 7 Paid in capital............................................. 84,555 Accumulated net investment income........................... 702 Accumulated net realized gain on investments................ 1,083 Unrealized appreciation on investments...................... 19,243 -------- Net assets.................................................. $105,590 ======== </Table> <Table> Class IA Net asset value per share ($105,589 / 7,130 shares outstanding) (500,000 shares authorized)................ $14.81 ====== Class IB Net asset value per share ($1 / @@- shares outstanding) (200,000 shares authorized)............................. $14.78 ====== </Table> <Table> & Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 1.6% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. @@ Due to the presentation of the financial statements in thousands, the number of shares and/or market value round to zero. </Table> The accompanying notes are an integral part of this financial statement. 98 HARTFORD STOCK HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ----------- COMMON STOCKS -- 99.6% BANKS -- 13.0% 1,614 American Express Co. ............................. $ 77,838 2,471 Bank One Corp. ................................... 112,662 1,610 Bank of America Corp. ............................ 129,516 4,932 Citigroup, Inc. .................................. 239,404 737 Federal National Mortgage Association............. 55,289 +911 HSBC Holdings PLC, ADR............................ 71,788 1,117 KeyCorp. ......................................... 32,756 1,255 State Street Corp. ............................... 65,340 1,457 U.S. Bancorp...................................... 43,378 516 Wachovia Corp. ................................... 24,054 ----------- 852,025 ----------- BUSINESS SERVICES -- 1.0% *2,503 Accenture Ltd. ................................... 65,871 ----------- CHEMICALS -- 1.6% 1,099 Dow Chemical Co. (The)............................ 45,681 1,362 du Pont (E.I.) de Nemours & Co. .................. 62,493 ----------- 108,174 ----------- COMMUNICATIONS -- 0.7% 3,433 Motorola, Inc. ................................... 48,295 ----------- COMPUTERS & OFFICE EQUIPMENT -- 8.0% 676 3M Co. ........................................... 57,446 *5,942 Cisco Systems, Inc. .............................. 144,341 *3,326 EMC Corp. ........................................ 42,965 5,112 Hewlett-Packard Co. .............................. 117,431 1,798 International Business Machines Corp. ............ 166,648 ----------- 528,831 ----------- CONSUMER DURABLES -- 0.6% 1,438 Masco Corp. ...................................... 39,427 ----------- CONSUMER NON-DURABLES -- 2.9% 477 Cardinal Health, Inc. ............................ 29,198 2,371 Gillette Co. (The)................................ 87,083 743 Procter & Gamble Co. (The)........................ 74,221 ----------- 190,502 ----------- DRUGS -- 11.4% 1,902 Abbott Laboratories............................... 88,638 *1,320 Amgen, Inc. ...................................... 81,564 1,966 Eli Lilly & Co. .................................. 138,269 *943 Genzyme Corp. .................................... 46,528 947 Merck & Co., Inc. ................................ 43,765 7,768 Pfizer, Inc. ..................................... 274,456 1,865 Wyeth............................................. 79,173 ----------- 752,393 ----------- ELECTRONICS -- 7.0% 7,476 General Electric Co. ............................. 231,613 5,678 Intel Corp. ...................................... 182,819 1,467 Texas Instruments, Inc. .......................... 43,106 ----------- 457,538 ----------- </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ----------- ENERGY & SERVICES -- 5.9% 970 ChevronTexaco Corp. .............................. $ 83,808 5,384 Exxon Mobil Corp. ................................ 220,748 1,478 Schlumberger Ltd. ................................ 80,871 ----------- 385,427 ----------- FINANCIAL SERVICES -- 3.0% 695 Franklin Resources, Inc. ......................... 36,192 1,689 Merrill Lynch & Co., Inc. ........................ 99,072 1,114 Morgan Stanley Dean Witter & Co. ................. 64,490 ----------- 199,754 ----------- FOOD, BEVERAGE & TOBACCO -- 4.6% 2,603 Coca-Cola Co. (The)............................... 132,077 1,421 General Mills, Inc. .............................. 64,362 2,344 PepsiCo, Inc. .................................... 109,277 ----------- 305,716 ----------- FOREST & PAPER PRODUCTS -- 1.5% 1,575 International Paper Co. .......................... 67,877 499 Weyerhaeuser Co. ................................. 31,923 ----------- 99,800 ----------- HEALTH SERVICES -- 0.6% 891 HCA, Inc. ........................................ 38,290 ----------- HOTELS & GAMING -- 0.3% 455 Marriott International, Inc., Class A............. 20,998 ----------- INSURANCE -- 4.7% 2,726 American International Group, Inc. ............... 180,699 1,646 Marsh & McLennan Cos., Inc. ...................... 78,803 3,059 Travelers Property Casualty Corp. -- Class B...... 51,913 ----------- 311,415 ----------- MACHINERY -- 1.9% *1,572 Applied Materials, Inc. .......................... 35,289 1,090 Caterpillar, Inc. ................................ 90,475 ----------- 125,764 ----------- MEDIA & ENTERTAINMENT -- 7.2% *2,310 Comcast Corp. .................................... 75,926 +5,997 Liberty Media Corp., Class A...................... 71,307 *10,434 Time Warner, Inc. ................................ 187,711 2,026 Viacom, Inc., Class B............................. 89,901 +1,994 Walt Disney Co. (The)............................. 46,529 ----------- 471,374 ----------- MEDICAL INSTRUMENTS & SUPPLIES -- 1.8% 1,067 Johnson & Johnson................................. 55,111 1,351 Medtronic, Inc. .................................. 65,687 ----------- 120,798 ----------- METALS, MINERALS & MINING -- 2.1% 1,457 Alcoa, Inc. ...................................... 55,362 985 Illinois Tool Works, Inc. ........................ 82,609 ----------- 137,971 ----------- </Table> The accompanying notes are an integral part of this financial statement. 99 HARTFORD STOCK HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ----------- COMMON STOCKS -- (CONTINUED) RETAIL -- 5.5% *2,233 Costco Wholesale Corp. ........................... $ 83,030 +3,672 Gap, Inc. (The)................................... 85,234 3,460 Home Depot, Inc. (The)............................ 122,802 *308 Kohl's Corp. ..................................... 13,828 1,551 Target Corp. ..................................... 59,551 ----------- 364,445 ----------- RUBBER & PLASTICS PRODUCTS -- 1.2% 1,110 NIKE, Inc., Class B............................... 75,956 ----------- SOFTWARE & SERVICES -- 7.5% *1,442 Computer Sciences Corp. .......................... 63,797 1,519 First Data Corp. ................................. 62,432 9,531 Microsoft Corp. .................................. 262,482 *3,490 Oracle Corp. ..................................... 46,073 1,455 SAP AG, ADR....................................... 60,453 ----------- 495,237 ----------- TRANSPORTATION -- 4.8% 848 CSX Corp. ........................................ 30,474 1,122 FedEx Corp. ...................................... 75,755 938 Lockheed Martin Corp. ............................ 48,203 701 Northrop Grumman Corp. ........................... 67,040 947 United Technologies Corp. ........................ 89,728 ----------- 311,200 ----------- UTILITIES -- 0.8% 1,594 Waste Management, Inc. ........................... 47,171 ----------- Total common stocks............................... $ 6,554,372 =========== SHORT-TERM SECURITIES -- 0.9% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 0.5% 33,265 Boston Global Investment Trust.................... $ 33,265 ----------- <Caption> PRINCIPAL AMOUNT - --------- REPURCHASE AGREEMENTS -- 0.4% $ 24,812 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... 24,812 ----------- Total short-term securities....................... $ 58,077 =========== </Table> <Table> <Caption> MARKET VALUE # ----------- DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $6,005,730)...... 99.6% $ 6,554,372 Total short-term securities (cost $58,077)................................. 0.9 58,077 ----- ----------- Total investment in securities (total cost $6,063,807) -- including $32,628 of securities loaned (See Note 2(i))........ 100.5 6,612,449 Cash, receivables and other assets......... 0.2 8,928 Payable for Fund shares redeemed........... (0.2) (10,130) Securities lending collateral payable to brokers (See Note 2(i)).................. (0.5) (33,265) Other liabilities.......................... (0.0) (328) ----- ----------- Net assets................................. 100.0% $ 6,577,654 ===== =========== </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 4,000,000 shares authorized; 148,275 shares outstanding.... $ 148 Paid in capital.................................... 7,057,787 Accumulated net investment income.................. 2,302 Accumulated net realized loss on investments....... (1,031,225) Unrealized appreciation on investments............. 548,642 ----------- Net assets......................................... $ 6,577,654 =========== </Table> <Table> Class IA Net asset value per share ($6,014,675 / 135,564 shares outstanding) (3,000,000 shares authorized)........................................ $44.37 ====== Class IB Net asset value per share ($562,979 / 12,711 shares outstanding) (1,000,000 shares authorized)......... $44.29 ====== </Table> <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 2.0% of total net assets as of December 31, 2003. # See Note 2 (b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2 (i)). </Table> The accompanying notes are an integral part of this financial statement. 100 HARTFORD U.S. GOVERNMENT SECURITIES HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - --------- -------- COLLATERALIZED MORTGAGE OBLIGATIONSV -- 1.3% $ 9,000 Federal Home Loan Mortgage Association, Series 2075, Class PH (Aaa Moodys) 6.50% due 08/15/28.............................. $ 9,534 -------- Total collateralized mortgage obligations......... $ 9,534 ======== CORPORATE NOTESV -- 27.5% U.S. GOVERNMENT AGENCIES -- 27.5% $ 29,600 Federal Home Loan Bank (Aaa Moodys) 3.00% due 05/28/08.............................. $ 29,141 29,800 Federal Home Loan Bank (Aaa Moodys) 3.375% due 07/21/08............................. 29,642 23,895 Federal Home Loan Bank (Aaa Moodys) 5.375% due 02/15/06............................. 25,509 +14000 Federal Home Loan Bank (Aaa Moodys) 5.80% due 09/02/08.............................. 15,417 8,000 Federal Home Loan Mortgage Association (Aaa Moodys) 3.00% due 12/15/06.............................. 7,981 22,100 Federal Home Loan Mortgage Association (Aaa Moodys) 3.125% due 08/25/06............................. 22,348 20,000 Federal Home Loan Mortgage Association (Aaa Moodys) 4.50% due 07/23/07.............................. 20,315 30,000 Federal Home Loan Mortgage Association (Aaa Moodys) 5.25% due 01/15/06.............................. 31,912 12,000 Federal National Mortgage Association (Aaa Moodys) 3.75% due 09/15/08.............................. 11,992 11,750 Tennessee Valley Authority (Aaa Moodys) 5.375% due 11/13/08............................. 12,673 -------- 206,930 -------- Total corporate notes............................. $206,930 ======== U.S. TREASURIES & FEDERAL AGENCIES -- 69.1% FEDERAL HOME LOAN MORTGAGE ASSOCIATION -- 7.1% $ 30,678 5.50% due 06/01/33................................ $ 31,065 7,971 6.00% due 10/01/21 -- 04/01/33.................... 8,263 13,396 6.50% due 04/01/28 -- 09/01/32.................... 14,033 99 7.00% due 09/01/29 -- 02/01/31.................... 105 -------- 53,466 -------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - --------- -------- FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 26.4% $ 15,600 5.00% due 01/01/34................................ $ 15,434 140,729 5.50% due 08/01/15 -- 10/01/33.................... 143,677 1,600 5.89% due 12/01/08................................ 1,736 6,576 5.95% due 01/01/09................................ 7,152 1,009 6.00% due 09/01/13 -- 07/01/14.................... 1,061 941 6.01% due 02/01/09................................ 1,022 1,798 6.20% due 01/01/06................................ 1,892 721 6.36% due 04/01/08................................ 789 21,629 6.50% due 05/01/13 -- 10/01/32.................... 22,643 2,410 6.52% due 01/01/08................................ 2,651 270 7.50% due 06/01/23................................ 290 27 8.50% due 04/01/17................................ 30 15 9.00% due 08/01/20 -- 09/01/21.................... 17 94 9.75% due 07/01/20................................ 104 -------- 198,498 -------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 8.9% 45,588 6.00% due 01/15/33 -- 09/20/33.................... 47,367 10,384 6.50% due 11/15/31 -- 08/15/32.................... 10,948 7,768 7.00% due 06/20/30 -- 09/15/32.................... 8,277 505 7.50% due 07/15/27................................ 543 31 9.50% due 05/15/20 -- 12/15/20.................... 35 -------- 67,170 -------- U.S. INFLATION-INDEXED SECURITIES -- 3.3% 22,634 3.00% due 07/15/12................................ 24,675 -------- U.S. TREASURY BONDS -- 0.3% 2,000 10.375% due 11/15/12.............................. 2,552 -------- U.S. TREASURY NOTES -- 23.1% +5,800 1.625% due 10/31/05............................... 5,791 +15,000 2.00% due 05/15/06................................ 15,001 +5,000 2.625% due 05/15/08............................... 4,925 +60,000 2.625% due 11/15/06............................... 60,530 +8,000 3.125% due 10/15/08............................... 7,985 +5,000 3.25% due 08/15/07................................ 5,100 +42,650 3.50% due 11/15/06................................ 44,084 12,000 4.25% due 11/15/13................................ 11,987 +16,690 6.00% due 08/15/09................................ 18,905 -------- 174,308 -------- Total U.S. treasuries & federal agencies.......... $520,669 ======== <Caption> SHARES - --------- SHORT-TERM SECURITIES -- 24.4% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 21.0% 158,397 Boston Global Investment Trust.................... $158,397 -------- </Table> The accompanying notes are an integral part of this financial statement. 101 HARTFORD U.S. GOVERNMENT SECURITIES HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - --------- -------- REPURCHASE AGREEMENTS -- 3.4% $ 25,563 Joint Repurchase Agreement (See Note 2(d)) 0.84% due 01/02/04.................................... $ 25,563 -------- Total short-term securities....................... $183,960 ======== </Table> <Table> DIVERSIFICATION OF NET ASSETS: Total collateralized mortgage obligations (cost $9,404)......................................... 1.3% $ 9,534 Total corporate notes (cost $205,019)............. 27.5 206,930 Total U.S. treasuries & federal agencies (cost $517,559)....................................... 69.1 520,669 Total short-term securities (cost $183,960)....... 24.4 183,960 ----- --------- Total investment in securities (total cost $915,942) -- including $155,229 of securities loaned (See Note 2(i))............... 122.3 921,093 Cash, receivables and other assets................ 0.9 6,463 Payable for securities purchased.................. (2.0) (15,394) Payable for Fund shares redeemed.................. (0.2) (463) Securities lending collateral payable to brokers (See Note 2(i))................................. (21.0) (158,397) Other liabilities................................. (0.0) (36) ----- --------- Net assets........................................ 100.0% $ 753,266 ===== ========= </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 700,000 shares authorized; 65,979 shares outstanding..................... $ 66 Paid in capital............................................. 727,184 Accumulated net investment income........................... 26,837 Accumulated net realized loss on investments................ (5,972) Unrealized appreciation on investments...................... 5,151 -------- Net assets.................................................. $753,266 ======== </Table> <Table> Class IA Net asset value per share ($514,243 / 44,992 shares outstanding) (500,000 shares authorized)................................... $11.43 ====== Class IB Net asset value per share ($239,023 / 20,987 shares outstanding) (200,000 shares authorized)................................... $11.39 ====== </Table> <Table> # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)) V The bond ratings are unaudited </Table> The accompanying notes are an integral part of this financial statement. 102 HARTFORD VALUE OPPORTUNITIES HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- 98.9% BANKS -- 21.4% 36 Bank of America Corp. ............................ $ 2,920 89 CIT Group, Inc. .................................. 3,192 156 Citigroup, Inc. .................................. 7,577 45 Comerica, Inc. ................................... 2,540 38 Federal Home Loan Mortgage Association............ 2,216 118 Federal National Mortgage Association............. 8,865 86 Fleet Boston Financial Corp. ..................... 3,750 159 Hibernia Corp., Class A........................... 3,738 33 National City Corp. .............................. 1,117 32 UnionBanCal Corp. ................................ 1,859 71 Washington Mutual, Inc. .......................... 2,828 -------- 40,602 -------- BUSINESS SERVICES -- 1.3% *87 BearingPoint, Inc. ............................... 877 *192 UnitedGlobalCom, Inc., Class A.................... 1,626 -------- 2,503 -------- CHEMICALS -- 1.8% 11 Avery Dennison Corp. ............................. 611 287 IMC Global, Inc. ................................. 2,849 -------- 3,460 -------- COMMUNICATIONS -- 0.2% *+227 McLeodUSA, Inc. .................................. 336 -------- COMPUTERS & OFFICE EQUIPMENT -- 0.5% 10 International Business Machines Corp. ............ 955 -------- CONSTRUCTION -- 5.4% 2 Beazer Homes USA, Inc. ........................... 146 18 MDC Holdings, Inc. ............................... 1,158 -1,091 Rinker Group Ltd. ................................ 5,395 *26 Toll Brothers, Inc. .............................. 1,038 *118 WCI Communities, Inc. ............................ 2,424 -------- 10,161 -------- CONSUMER DURABLES -- 1.0% *85 Arrow Electronics, Inc. .......................... 1,955 -------- CONSUMER NON-DURABLES -- 5.3% 42 AmerisourceBergen Corp. .......................... 2,375 288 Tyco International Ltd. .......................... 7,632 -------- 10,007 -------- DRUGS -- 5.9% +76 Aventis S.A., ADR................................. 5,023 36 Merck & Co., Inc. ................................ 1,645 53 Pfizer, Inc. ..................................... 1,889 60 Wyeth............................................. 2,564 -------- 11,121 -------- ELECTRICAL EQUIPMENT -- 0.8% *58 Teradyne, Inc. ................................... 1,484 -------- </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- -------- ELECTRONICS -- 1.6% *54 Fairchild Semiconductor International Corp., Class A............................................... $ 1,356 *71 Vishay Intertechnology, Inc. ..................... 1,627 -------- 2,983 -------- ENERGY & SERVICES -- 8.7% 60 Devon Energy Corp. ............................... 3,441 32 EnCana Corp. ..................................... 1,269 74 GlobalSantaFe Corp. .............................. 1,835 -26 IHC Caland N.V. .................................. 1,410 *46 Noble Corp. ...................................... 1,646 68 Royal Dutch Petroleum Co., N.V., NY Reg Shares.... 3,547 37 TotalFinaElf S.A., ADR............................ 3,423 -------- 16,571 -------- FOOD, BEVERAGE & TOBACCO -- 1.8% 51 Bunge Ltd. ....................................... 1,669 *54 Constellation Brands, Inc. ....................... 1,772 -------- 3,441 -------- FOREST & PAPER PRODUCTS -- 3.0% 28 Aracruz Celulose S.A., ADR........................ 967 *73 Pactiv Corp. ..................................... 1,749 68 Sappi Ltd., ADR................................... 927 *113 Smurfit-Stone Container Corp. .................... 2,091 -------- 5,734 -------- INSURANCE -- 14.1% 71 Ace Ltd. ......................................... 2,920 *60 Anthem, Inc. ..................................... 4,515 *29 Health Net, Inc. ................................. 955 12 MBIA, Inc. ....................................... 729 *76 Oxford Health Plans, Inc. ........................ 3,306 85 Platinum Underwriters Holdings Ltd. .............. 2,547 34 Radian Group, Inc. ............................... 1,677 46 Reinsurance Group of America, Inc. ............... 1,786 113 RenaissanceRe Holdings Ltd. ...................... 5,538 21 St. Paul Cos., Inc. (The)......................... 837 6 Travelers Property Casualty Corp. -- Class A...... 101 101 Travelers Property Casualty Corp. -- Class B...... 1,716 -------- 26,627 -------- MACHINERY -- 1.5% *199 Axcelis Technologies, Inc. ....................... 2,036 21 York International Corp. ......................... 754 -------- 2,790 -------- MEDIA & ENTERTAINMENT -- 6.2% 7 Blockbuster, Inc., Class A........................ 117 *12 COX Communications, Inc. ......................... 400 *200 Comcast Corp., Special Class A ................... 6,240 *278 Time Warner, Inc. ................................ 5,003 -------- 11,760 -------- </Table> The accompanying notes are an integral part of this financial statement. 103 HARTFORD VALUE OPPORTUNITIES HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- (CONTINUED) METALS, MINERALS & MINING -- 1.7% 51 Alcoa, Inc. ...................................... $ 1,927 39 Engelhard Corp. .................................. 1,153 *1 International Steel Group, Inc. .................. 51 -------- 3,131 -------- RETAIL -- 5.9% *13 CEC Entertaining, Inc. ........................... 597 132 Foot Locker, Inc. ................................ 3,084 *154 Kroger Co. (The).................................. 2,856 78 Ross Stores, Inc. ................................ 2,067 121 TJX Cos., Inc. (The).............................. 2,668 -------- 11,272 -------- RUBBER & PLASTICS PRODUCTS -- 2.8% -114 Compagnie Generale des Etablissements Michelin, Class B......................................... 5,244 -------- SOFTWARE & SERVICES -- 1.5% 51 Microsoft Corp. .................................. 1,402 *97 Unisys Corp. ..................................... 1,446 -------- 2,848 -------- TRANSPORTATION -- 3.0% *+112 AMR Corp. ........................................ 1,447 334 Bombardier, Inc. ................................. 1,415 *+63 Continental Airlines, Inc., Class B............... 1,017 *56 ExpressJet Holdings, Inc. ........................ 839 *75 Pinnacle Airlines Corp. .......................... 1,047 -------- 5,765 -------- UTILITIES -- 3.5% 21 Dominion Resources, Inc. ......................... 1,315 14 Exelon Corp. ..................................... 949 21 PPL Corp. ........................................ 932 23 Progress Energy, Inc. ............................ 1,041 99 TXU Corp. ........................................ 2,358 -------- 6,595 -------- Total common stocks............................... $187,345 ======== SHORT-TERM SECURITIES -- 5.8% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 3.2% 6,053 Boston Global Investment Trust.................... $ 6,053 -------- <Caption> PRINCIPAL AMOUNT - --------- REPURCHASE AGREEMENTS -- 2.6% $4,985 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... 4,985 -------- Total short-term securities....................... $ 11,038 ======== </Table> <Table> <Caption> MARKET VALUE -------- DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $155,650)............... 98.9% $187,345 Total short-term securities (cost $11,038)........ 5.8 11,038 ----- -------- Total investment in securities (total cost $166,688) -- including $5,817 of securities loaned (See Note 2(i)).......................... 104.7 198,383 Cash, receivables and other assets................ 1.8 3,434 Payable for securities purchased.................. (3.3) (6,286) Payable for Fund shares redeemed.................. (0.0) (16) Securities lending collateral payable to brokers (See Note 2(i))................................. (3.2) (6,053) Other liabilities................................. (0.0) (11) ----- -------- Net assets........................................ 100.0% $189,451 ===== ======== </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 700,000 shares authorized; 12,369 shares outstanding....... $ 12 Paid in capital...................................... 173,737 Accumulated net investment income.................... 726 Accumulated net realized loss on investments......... (16,715) Unrealized appreciation on investments............... 31,695 Unrealized appreciation on forward foreign currency contracts (See Note 2(g)) @@@...................... 8 Unrealized depreciation on other assets and liabilities in foreign currencies.................. (12) -------- Net assets........................................... $189,451 ======== </Table> <Table> Class IA Net asset value per share ($156,879 / 10,235 shares outstanding) (500,000 shares authorized)................................... $15.33 ====== Class IB Net asset value per share ($32,572 / 2,134 shares outstanding) (200,000 shares authorized)................................... $15.27 ====== </Table> <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 18.0% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). - Security valued in good faith at fair value by, or under the direction of, the Funds' Board of Directors. The aggregate value of these securities as of December 31, 2003 was $12,049, which represents 6.4% of total net assets. </Table> The accompanying notes are an integral part of this financial statement. 104 - -------------------------------------------------------------------------------- @@@FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING AT DECEMBER 31, 2003 <Table> <Caption> UNREALIZED APPRECIATION DESCRIPTION MARKET VALUE CONTRACT DELIVERY (DEPRECIATION) - ----------- ------------ -------- -------- -------------- Australian Dollar (Buy) $ 135 $ 134 1/2/2004 $ 1 Australian Dollar (Buy) 208 207 1/6/2004 1 Australian Dollar (Buy) 641 635 1/5/2004 6 --- $ 8 === </Table> The accompanying notes are an integral part of this financial statement. 105 HARTFORD HLS MUTUAL FUNDS STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD HARTFORD BLUE CHIP ADVISERS STOCK HLS FUND HLS FUND ---------- --------- INVESTMENT INCOME: Dividends................................................. $ 114,696 $ 1,692 Interest.................................................. 165,102 152 Securities lending........................................ 1,013 3 Less: Foreign tax withheld................................ (116) (4) ---------- ------- Total investment income (loss).......................... 280,695 1,843 ---------- ------- EXPENSES: Investment advisory fees.................................. 45,100 1,446 Administrative services fees.............................. 20,812 -- Accounting services....................................... 2,081 -- Board of Directors fees................................... 124 2 Custodian fees, gross..................................... 72 9 Distribution Fees -- Class IB............................. 2,320 -- Other expenses............................................ 1,658 28 ---------- ------- Total expenses (before offsets)......................... 72,167 1,485 ---------- ------- Expenses paid indirectly (see Note 3(d)).................. 47 1 Custodian fees offset (see Note 3(d))..................... 4 -- ---------- ------- Total expenses net...................................... 72,116 1,484 ---------- ------- Net investment income (loss).............................. 208,579 359 ---------- ------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on securities.................... (442,960) (4,967) Net realized gain (loss) on futures contracts............. -- -- Net realized gain (loss) on forward foreign currency contracts............................................... -- (2) Net realized gain (loss) on foreign currency transactions............................................ 24 (14) Net realized gain (loss) on option contracts.............. -- -- Net unrealized appreciation (depreciation) on securities.............................................. 2,029,822 47,041 Net unrealized appreciation (depreciation) on futures contracts............................................... -- -- Net unrealized appreciation (depreciation) on forward foreign currency contracts.............................. -- -- Net unrealized appreciation (depreciation) on translation of other assets and liabilities in foreign currencies... -- -- ---------- ------- Net realized and unrealized gain (loss) on investments.... 1,586,886 42,058 ---------- ------- Net increase (decrease) in net assets resulting from operations.............................................. $1,795,465 $42,417 ========== ======= </Table> (1) Formerly, Hartford Growth and Income HLS Fund. The accompanying notes are an integral part of these financial statements. 106 - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD HARTFORD HARTFORD HARTFORD HARTFORD HARTFORD CAPITAL CAPITAL DISCIPLINED GLOBAL GROWTH HARTFORD BOND APPRECIATION OPPORTUNITIES EQUITY LEADERS OPPORTUNITIES HIGH YIELD HLS FUND HLS FUND HLS FUND HLS FUND(1) HLS FUND HLS FUND HLS FUND --------- ------------ ------------- ----------- -------- ------------- ---------- $ 200 $ 99,648 $ 229 $ 10,355 $ 9,231 $ 2,971 $ 134 122,023 18,754 5 259 232 453 37,284 959 582 -- 4 279 92 95 -- (2,754) -- -- (554) (45) -- -------- ---------- ------ -------- -------- -------- -------- 123,182 116,230 234 10,618 9,188 3,471 37,513 -------- ---------- ------ -------- -------- -------- -------- 7,690 34,597 158 3,400 3,647 3,618 2,628 5,802 15,869 -- 1,274 1,378 -- 964 580 1,587 -- 127 138 -- 96 35 92 -- 7 8 7 5 71 1,583 20 19 193 32 19 1,433 2,398 -- 242 208 63 371 480 1,205 7 120 131 93 79 -------- ---------- ------ -------- -------- -------- -------- 16,091 57,331 185 5,189 5,703 3,813 4,162 -------- ---------- ------ -------- -------- -------- -------- 13 36 -- 3 3 3 2 29 20 -- -- 3 -- 6 -------- ---------- ------ -------- -------- -------- -------- 16,049 57,275 185 5,186 5,697 3,810 4,154 -------- ---------- ------ -------- -------- -------- -------- 107,133 58,955 49 5,432 3,491 (339) 33,359 -------- ---------- ------ -------- -------- -------- -------- 120,269 316,746 281 (19,533) 115,915 84,869 (15,926) -- -- -- 1,960 -- -- -- 399 908 (1) -- 120 (53) 6 (3,574) (3,884) -- -- 134 43 293 (901) -- -- -- -- -- -- (8,107) 2,610,764 3,891 182,629 98,220 131,438 76,806 -- -- -- 1,747 -- -- -- 4 183 -- -- 13 (5) -- (276) (22) -- -- 29 7 5 -------- ---------- ------ -------- -------- -------- -------- 107,814 2,924,695 4,171 166,803 214,431 216,299 61,184 -------- ---------- ------ -------- -------- -------- -------- $214,947 2,983,650 $4,220 $172,235 $217,922 $215,960 $ 94,543 ======== ========== ====== ======== ======== ======== ======== </Table> 107 HARTFORD HLS MUTUAL FUNDS STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEAR ENDED DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD HARTFORD HARTFORD INTERNATIONAL INTERNATIONAL INDEX OPPORTUNITIES STOCK HLS FUND HLS FUND HLS FUND --------- ------------- ------------- INVESTMENT INCOME: Dividends................................................. $ 31,995 $ 15,570 $ 2,479 Interest.................................................. 884 195 8 Securities lending........................................ 35 477 75 Less: Foreign tax withheld................................ -- (2,171) (257) -------- -------- ------- Total investment income (loss).......................... 32,914 14,071 2,305 -------- -------- ------- EXPENSES: Investment advisory fees.................................. 3,587 3,861 704 Administrative services fees.............................. 3,587 1,468 -- Accounting services....................................... 359 147 -- Board of Directors fees................................... 21 9 1 Custodian fees, gross..................................... 41 523 70 Distribution Fees -- Class IB............................. 307 111 -- Other expenses............................................ 277 120 17 -------- -------- ------- Total expenses (before offsets)......................... 8,179 6,239 792 -------- -------- ------- Expenses paid indirectly (See Note 3(d)).................. 8 3 -- Custodian fees offset (See Note 3(d))..................... -- 2 -- -------- -------- ------- Total expenses net...................................... 8,171 6,234 792 -------- -------- ------- Net investment income (loss).............................. 24,743 7,837 1,513 -------- -------- ------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on securities.................... 3,345 32,879 (1,744) Net realized gain (loss) on futures contracts............. 2,949 -- -- Net realized gain (loss) on forward foreign currency contracts............................................... -- (143) (183) Net realized gain (loss) on foreign currency transactions............................................ -- (631) 50 Net realized gain (loss) on option contracts.............. -- -- -- Net unrealized appreciation (depreciation) on securities.............................................. 424,703 186,703 22,793 Net unrealized appreciation (depreciation) on futures contracts............................................... 609 -- -- Net unrealized appreciation (depreciation) on forward foreign currency contracts.............................. -- 45 -- Net unrealized appreciation (depreciation) on translation of other assets and liabilities in foreign currencies... -- (100) 9 -------- -------- ------- Net realized and unrealized gain (loss) on investments.... 431,606 218,753 20,925 -------- -------- ------- Net increase (decrease) in net assets resulting from operations.............................................. $456,349 $226,590 $22,438 ======== ======== ======= </Table> The accompanying notes are an integral part of these financial statements. 108 - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD HARTFORD HARTFORD HARTFORD HARTFORD HARTFORD HARTFORD LARGECAP MIDCAP HARTFORD MULTISECTOR SMALLCAP SMALLCAP HARTFORD U.S. GOVERNMENT VALUE GROWTH STOCK MONEY MARKET BOND GROWTH VALUE STOCK SECURITIES OPPORTUNITIES HLS FUND HLS FUND HLS FUND HLS FUND HLS FUND HLS FUND HLS FUND HLS FUND HLS FUND --------- --------- ------------ ----------- --------- --------- ---------- --------------- ------------- $ 530 $ 502 $ 64 $ -- $ 1,334 $ 1,596 $ 94,219 $ -- $ 1,593 5 11 27,354 1,581 174 102 1,404 25,961 37 3 13 -- -- 238 4 66 159 34 (5) (1) -- -- (1) -- (96) -- (28) ------- ------- ------- ------ -------- ------- ---------- -------- ------- 533 525 27,418 1,581 1,745 1,702 95,593 26,120 1,636 ------- ------- ------- ------ -------- ------- ---------- -------- ------- 487 425 5,527 221 1,722 785 14,744 3,685 836 -- -- 4,422 -- -- -- 11,445 -- -- -- -- 442 -- -- -- 1,145 -- -- 1 1 28 -- 3 1 68 10 1 6 12 16 10 16 16 29 8 10 -- -- 675 -- 79 -- 1,010 492 36 13 11 329 9 40 19 893 133 21 ------- ------- ------- ------ -------- ------- ---------- -------- ------- 507 449 11,439 240 1,860 821 29,334 4,328 904 ------- ------- ------- ------ -------- ------- ---------- -------- ------- -- -- 10 -- 1 -- 26 4 1 -- -- -- -- -- -- 1 -- -- ------- ------- ------- ------ -------- ------- ---------- -------- ------- 507 449 11,429 240 1,859 821 29,307 4,324 903 ------- ------- ------- ------ -------- ------- ---------- -------- ------- 26 76 15,989 1,341 (114) 881 66,286 21,796 733 ------- ------- ------- ------ -------- ------- ---------- -------- ------- (793) 1,485 -- 1,374 11,076 2,137 (507,440) 3,901 3,033 -- -- -- 15 3,097 -- -- -- -- -- -- -- (3) -- -- -- -- (1) 1 -- -- 5 -- 7 -- (3) -- -- -- -- -- -- -- -- -- 12,163 11,472 -- (159) 99,848 26,645 1,817,955 (10,969) 42,756 -- -- -- (9) 417 -- -- -- -- -- -- (86) -- -- -- -- 8 -- -- -- 1 -- -- -- -- (12) ------- ------- ------- ------ -------- ------- ---------- -------- ------- 11,371 12,957 -- 1,138 114,438 28,782 1,310,522 (7,068) 45,781 ------- ------- ------- ------ -------- ------- ---------- -------- ------- $11,397 $13,033 $15,989 $2,479 $114,324 $29,663 $1,376,808 $ 14,728 $46,514 ======= ======= ======= ====== ======== ======= ========== ======== ======= </Table> 109 HARTFORD HLS MUTUAL FUNDS STATEMENTS OF CHANGES IN NET ASSETS (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD ADVISERS HLS FUND --------------------------- FOR THE FOR THE YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, 2003 2002 ------------ ------------ OPERATIONS: Net investment income (loss).............................. $ 208,579 $ 253,749 Net realized gain (loss) on investments................... (442,936) (154,706) Net unrealized appreciation (depreciation) of investments............................................. 2,029,822 (1,855,706) ----------- ----------- Net increase (decrease) in net assets resulting from operations.............................................. 1,795,465 (1,756,663) ----------- ----------- DISTRIBUTIONS TO SHAREHOLDERS: From net investment income Class IA................................................ (233,680) (310,849) Class IB................................................ (23,061) (17,707) From net realized gain on investments Class IA................................................ -- -- Class IB................................................ -- -- ----------- ----------- Total distributions..................................... (256,741) (328,556) ----------- ----------- CAPITAL SHARE TRANSACTIONS: Class IA................................................ (284,304) (609,326) Class IB................................................ 446,195 258,251 ----------- ----------- Net increase (decrease) from capital share transactions... 161,891 (351,075) ----------- ----------- Net increase (decrease) in net assets..................... 1,700,615 (2,436,294) NET ASSETS: Beginning of period....................................... 9,921,475 12,357,769 ----------- ----------- End of period............................................. $11,622,090 $ 9,921,475 =========== =========== Accumulated undistributed net investment income (loss).... $ 104,776 $ 146,740 =========== =========== </Table> <Table> (a) Formerly, Fortis Blue Chip Stock Series. (b) Formerly, Fortis Capital Opportunities Series. </Table> The accompanying notes are an integral part of these financial statements. 110 - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD BLUE CHIP STOCK HARTFORD CAPITAL APPRECIATION HARTFORD CAPITAL OPPORTUNITIES HLS FUND(A) HARTFORD BOND HLS FUND HLS FUND HLS FUND(B) --------------------------- --------------------------- ----------------------------- ------------------------------- FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2003 2002 2003 2002 2003 2002 2003 2002 ------------ ------------ ------------ ------------ ------------- ------------- -------------- -------------- $ 359 $ 67 $ 107,133 $ 114,109 $ 58,955 $ 49,150 $ 49 $ 8 (4,983) (12,626) 116,193 23,979 313,770 (1,321,148) 280 (6,405) 47,041 (44,014) (8,379) 71,252 2,610,925 (568,703) 3,891 (795) -------- -------- ---------- ---------- ----------- ----------- -------- -------- 42,417 (56,573) 214,947 209,340 2,983,650 (1,840,701) 4,220 (7,192) -------- -------- ---------- ---------- ----------- ----------- -------- -------- (58) -- (97,398) (71,918) (44,255) (43,001) (58) -- -- -- (23,627) (9,028) (5,412) (2,845) -- -- -- -- (11,273) (21,013) -- -- -- -- -- -- (2,800) (2,682) -- -- -- -- -------- -------- ---------- ---------- ----------- ----------- -------- -------- (58) -- (135,098) (104,641) (49,667) (45,846) (58) -- -------- -------- ---------- ---------- ----------- ----------- -------- -------- (15,162) (27,691) 120,521 505,821 119,749 (712,297) (2,755) 65 -- -- 338,611 215,658 609,544 299,875 -- -- -------- -------- ---------- ---------- ----------- ----------- -------- -------- (15,162) (27,691) 459,132 721,479 729,293 (412,422) (2,755) 65 -------- -------- ---------- ---------- ----------- ----------- -------- -------- 27,197 (84,264) 538,981 826,178 3,663,276 (2,298,969) 1,407 (7,127) 155,333 239,597 2,528,130 1,701,952 6,828,872 9,127,841 16,387 23,514 -------- -------- ---------- ---------- ----------- ----------- -------- -------- $182,530 $155,333 $3,067,111 $2,528,130 $10,492,148 $ 6,828,872 $ 17,794 $ 16,387 ======== ======== ========== ========== =========== =========== ======== ======== $ 343 $ 58 $ 149,925 121,024 $ 2,152 $ 1,931 $ -- $ 9 ======== ======== ========== ========== =========== =========== ======== ======== </Table> 111 HARTFORD HLS MUTUAL FUNDS STATEMENTS OF CHANGES IN NET ASSETS (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD DISCIPLINED EQUITY HLS FUND --------------------------------- FOR THE FOR THE YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, 2003(A) 2002 ------------ ------------ OPERATIONS: Net investment income (loss).............................. $ 5,432 $ 3,235 Net realized gain (loss) on investments................... (17,573) (112,056) Net unrealized appreciation (depreciation) on investments............................................. 184,376 (47,818) -------- --------- Net increase (decrease) in net assets resulting from operations.............................................. 172,235 (156,639) -------- --------- DISTRIBUTIONS TO SHAREHOLDERS: From net investment income Class IA................................................ (7,093) (2,112) Class IB................................................ (1,140) (143) From net realized gain on investments Class IA................................................ -- -- Class IB................................................ -- -- -------- --------- Total distributions..................................... (8,233) (2,255) -------- --------- CAPITAL SHARE TRANSACTIONS: Class IA................................................ 87,569 188,974 Class IB................................................ 70,390 27,045 -------- --------- Net increase (decrease) from capital share transactions... 157,959 216,019 -------- --------- Net increase (decrease) in net assets..................... 321,961 57,125 NET ASSETS: Beginning of period....................................... 519,737 462,612 -------- --------- End of period............................................. $841,698 $ 519,737 ======== ========= Accumulated net investment income (loss).................. $ 422 $ 3,234 ======== ========= </Table> <Table> (a) Formerly, Hartford Growth and Income HLS Fund. (b) Formerly, Fortis Growth Stock Series. </Table> The accompanying notes are an integral part of these financial statements. 112 - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD GLOBAL LEADERS HARTFORD GROWTH OPPORTUNITIES HARTFORD HIGH YIELD HARTFORD INDEX HLS FUND HLS FUND(B) HLS FUND HLS FUND --------------------------- ----------------------------- --------------------------- --------------------------- FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2003 2002 2003 2002 2003 2002 2003 2002 ------------ ------------ ------------- ------------- ------------ ------------ ------------ ------------ $ 3,491 $ 6,467 $ (339) $ (942) $ 33,359 $ 18,692 $ 24,743 $ 21,815 116,169 (128,933) 84,859 (134,893) (15,627) (17,319) 6,294 2,513 98,262 (20,675) 131,440 (64,626) 76,811 (13,584) 425,312 (524,681) -------- --------- -------- --------- -------- -------- ---------- ---------- 217,922 (143,141) 215,960 (200,461) 94,543 (12,211) 456,349 (500,353) -------- --------- -------- --------- -------- -------- ---------- ---------- (2,799) (5,462) -- -- (13,145) (9,980) (23,630) (19,562) (323) (437) -- -- (5,706) (1,721) (2,050) (725) -- -- -- -- -- -- (5,282) (71,573) -- -- -- -- -- -- (445) (2,010) -------- --------- -------- --------- -------- -------- ---------- ---------- (3,122) (5,899) -- -- (18,851) (11,701) (31,407) (93,870) -------- --------- -------- --------- -------- -------- ---------- ---------- (4,281) 197,555 12,439 (76,597) 228,151 94,313 (12,663) 154,200 46,523 17,790 44,855 5,322 179,915 33,755 96,019 39,698 -------- --------- -------- --------- -------- -------- ---------- ---------- 42,242 215,345 57,294 (71,275) 408,066 128,068 83,356 193,898 -------- --------- -------- --------- -------- -------- ---------- ---------- 257,042 66,305 273,254 (271,736) 483,758 104,156 508,298 (400,325) 600,322 534,017 483,332 755,068 257,101 152,945 1,622,092 2,022,417 -------- --------- -------- --------- -------- -------- ---------- ---------- $857,364 $ 600,322 $756,586 $ 483,332 $740,859 $257,101 $2,130,390 $1,622,092 ======== ========= ======== ========= ======== ======== ========== ========== $ 1,723 $ 1,132 $ (12) $ (16) $ 35,327 $ 18,851 $ 1,722 $ 2,680 ======== ========= ======== ========= ======== ======== ========== ========== </Table> 113 HARTFORD HLS MUTUAL FUNDS STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD INTERNATIONAL HARTFORD INTERNATIONAL STOCK OPPORTUNITIES HLS FUND HLS FUND(A) ---------------------------- ---------------------------- FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2003 2002 2003 2002(A) ------------ ------------ ------------ ------------ OPERATIONS: Net investment income (loss).............................. $ 7,837 $ 10,309 $ 1,513 $ 1,454 Net realized gain (loss) on investments................... 32,105 (121,588) (1,877) (15,926) Net unrealized appreciation (depreciation) of investments............................................. 186,648 (19,596) 22,802 5,068 ---------- -------- ------- -------- Net increase (decrease) in net assets resulting from operations.............................................. 226,590 (130,875) 22,438 (9,404) ---------- -------- ------- -------- DISTRIBUTIONS TO SHAREHOLDERS: From net investment income Class IA................................................ (6,583) (15,535) (2,047) (905) Class IB................................................ (477) (431) -- -- From net realized gain on investments Class IA................................................ -- -- -- -- Class IB................................................ -- -- -- -- ---------- -------- ------- -------- Total distributions..................................... (7,060) (15,966) (2,047) (905) ---------- -------- ------- -------- CAPITAL SHARE TRANSACTIONS: Class IA................................................ (27,267) (151,869) (6,848) (13,652) Class IB................................................ 34,199 8,043 -- -- ---------- -------- ------- -------- Net increase (decrease) from capital share transactions... 6,932 (143,826) (6,848) (13,652) ---------- -------- ------- -------- Net increase (decrease) in net assets..................... 226,462 290,667 13,543 (23,961) NET ASSETS: Beginning of period....................................... 673,544 964,211 81,352 105,313 ---------- -------- ------- -------- End of period............................................. $ 900,006 $673,544 $94,895 $ 81,352 ========== ======== ======= ======== Accumulated undistributed net investment income (loss).... $ 1,085 $ 1,082 $ 280 $ 947 ========== ======== ======= ======== </Table> <Table> (a) Formerly, Fortis International Stock Series. (b) Formerly, Fortis LargeCap Growth Series. (c) Formerly, Fortis MidCap Stock Series. </Table> The accompanying notes are an integral part of these financial statements. 114 - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD LARGECAP GROWTH HARTFORD MIDCAP STOCK HARTFORD MONEY MARKET HLS FUND(B) HLS FUND(C) HLS FUND --------------------------- --------------------------- --------------------------- FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2003 2002(B) 2003 2002 2003 2002 ------------ ------------ ------------ ------------ ------------ ------------ $ 26 $ (125) $ 76 $ 76 $ 15,989 $ 32,127 (792) (18,174) 1,485 (4,177) -- 100 12,163 (7,552) 11,472 (3,319) -- -- ------- ------- ---------- -------- ---------- ---------- 11,397 (25,851) 13,033 (7,420) 15,989 32,227 ------- ------- ---------- -------- ---------- ---------- -- -- (74) -- (14,648) (29,732) -- -- -- -- (1,341) (2,395) -- -- -- -- -- (93) -- -- -- -- -- (7) ------- ------- ---------- -------- ---------- ---------- -- -- (74) -- (15,989) (32,227) ------- ------- ---------- -------- ---------- ---------- (4,671) (8,680) 75 3,913 (710,017) 451,936 -- -- -- -- (20,984) 109,785 ------- ------- ---------- -------- ---------- ---------- (4,671) (8,680) 75 3,913 (731,001) 561,721 ------- ------- ---------- -------- ---------- ---------- 6,726 (34,531) 13,034 (3,507) (731,001) 561,721 51,944 86,475 43,251 46,758 2,581,370 2,019,649 ------- ------- ---------- -------- ---------- ---------- $58,670 $51,944 $ 56,285 $ 43,251 $1,850,369 $2,581,370 ======= ======= ========== ======== ========== ========== $ 28 $ -- $ 76 $ 74 $ -- $ -- ======= ======= ========== ======== ========== ========== </Table> 115 HARTFORD HLS MUTUAL FUNDS STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD MULTISECTOR BOND HARTFORD SMALLCAP GROWTH HLS FUND(A) HLS FUND(B) ---------------------------- ---------------------------- FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2003 2002 2003 2002 ------------ ------------ ------------ ------------ OPERATIONS: Net investment income (loss).............................. $ 1,341 $ 1,571 $ (114) $ (389) Net realized gain (loss) on investments................... 1,391 (1,492) 14,173 (14,819) Net unrealized appreciation (depreciation) on investments............................................. (253) 991 100,265 (60,942) ------- ------- -------- -------- Net increase (decrease) in net assets resulting from operations.............................................. 2,479 1,070 114,324 (76,150) ------- ------- -------- -------- DISTRIBUTIONS TO SHAREHOLDERS: From net investment income Class IA................................................ (1,598) (1,809) -- -- Class IB................................................ -- -- -- -- From net realized gain on investments Class IA................................................ -- -- -- -- Class IB................................................ -- -- -- -- ------- ------- -------- -------- Total distributions..................................... (1,598) (1,809) -- -- ------- ------- -------- -------- CAPITAL SHARE TRANSACTIONS: Class IA................................................ 902 (1,655) 62,355 (12,126) Class IB................................................ -- -- 53,081 7,216 ------- ------- -------- -------- Net increase (decrease) from capital share transactions... 902 (1,655) 115,436 (4,910) ------- ------- -------- -------- Net increase (decrease) in net assets..................... 1,783 (2,394) 229,760 (81,060) NET ASSETS: Beginning of period....................................... 28,254 30,648 191,212 272,272 ------- ------- -------- -------- End of period............................................. $30,037 $28,254 $420,972 $191,212 ======= ======= ======== ======== Accumulated net investment income (loss).................. $ 1,439 $ 1,598 $ (1) $ -- ======= ======= ======== ======== </Table> <Table> (a) Formerly, Fortis Multisector Bond Series. (b) Formerly, Fortis Aggressive Growth Series. (c) Formerly, Fortis SmallCap Value Series. (d) Formerly, Fortis U.S. Government Securities Series. (e) Formerly, Fortis Value Series. </Table> The accompanying notes are an integral part of these financial statements. 116 - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD SMALLCAP VALUE HARTFORD STOCK HARTFORD U.S. GOVERNMENT HARTFORD VALUE OPPORTUNITIES HLS FUND(C) HLS FUND SECURITIES HLS FUND(D) HLS FUND(E) --------------------------- --------------------------- --------------------------- ----------------------------- FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2003 2002 2003 2002 2003 2002 2003 2002 ------------ ------------ ------------ ------------ ------------ ------------ ------------- ------------- $ 881 $ 618 $ 66,286 $ 63,506 $ 21,796 $ 12,567 $ 733 $ 633 2,137 (219) (507,433) (235,322) 3,901 10,899 3,029 (19,505) 26,645 (18,595) 1,817,955 (1,765,512) (10,969) 11,474 42,752 (13,227) -------- -------- ---------- ----------- -------- ----------- -------- -------- 29,663 (18,196) 1,376,808 (1,937,328) 14,728 34,940 46,514 (32,099) -------- -------- ---------- ----------- -------- ----------- -------- -------- (437) (816) (64,140) (58,646) (9,841) (8,732) (550) (821) -- -- (4,863) (2,766) (3,220) -- (68) -- (1,047) (10,698) -- -- -- -- -- (2,397) -- -- -- -- -- -- -- -- -------- -------- ---------- ----------- -------- ----------- -------- -------- (1,484) (11,514) (69,003) (61,412) (13,061) (8,732) (618) (3,218) -------- -------- ---------- ----------- -------- ----------- -------- -------- (7,620) 6,068 (290,019) (823,856) (78,702) 392,496 28,203 (6,486) 1 -- 168,825 107,525 138,808 98,456 23,399 3,189 -------- -------- ---------- ----------- -------- ----------- -------- -------- (7,619) 6,068 (121,194) (716,335) 60,106 490,952 51,602 (3,297) -------- -------- ---------- ----------- -------- ----------- -------- -------- 20,560 (23,642) 1,186,611 (2,715,075) 61,773 517,160 97,498 (38,614) 85,030 108,672 5,391,043 8,106,118 691,493 174,333 91,953 130,567 -------- -------- ---------- ----------- -------- ----------- -------- -------- $105,590 $ 85,030 $6,577,654 $ 5,391,043 $753,266 $ 691,493 $189,451 $ 91,953 ======== ======== ========== =========== ======== =========== ======== ======== $ 702 $ 458 $ 2,302 $ 5,503 $ 26,837 $ 13,061 $ 726 $ 618 ======== ======== ========== =========== ======== =========== ======== ======== </Table> 117 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2003 ($000'S OMITTED) - -------------------------------------------------------------------------------- 1. ORGANIZATION: The Hartford HLS Mutual Funds serve as the underlying investment vehicles for certain variable annuity and variable life insurance separate accounts contracts of Fortis Benefits Insurance Company and First Fortis Life Insurance Company (collectively, The Company), as well as certain qualified retirement plans. The funds are stated below. Hartford Series Fund, Inc. (comprised of twenty-six portfolios, ten are included in these financial statements; they are Hartford Advisers HLS Fund, Hartford Bond HLS Fund, Hartford Capital Appreciation HLS Fund, Hartford Disciplined Equity HLS Fund (formerly, Hartford Growth and Income HLS Fund), Hartford Global Leaders HLS Fund, Hartford High Yield HLS Fund, Hartford Index HLS Fund, Hartford International Opportunities HLS Fund, Hartford Money Market HLS Fund and Hartford Stock HLS Fund.) and Hartford Series Fund II, Inc. (comprised of eleven funds; they are Hartford Blue Chip Stock HLS Fund, Hartford Capital Opportunities HLS Fund, Hartford Growth Opportunities HLS Fund, Hartford International Stock HLS Fund, Hartford LargeCap Growth HLS Fund, Hartford MidCap Stock HLS Fund, Hartford Multisector Bond HLS Fund, Hartford SmallCap Growth HLS Fund, Hartford SmallCap Value HLS Fund, Hartford U.S. Government Securities HLS Fund and Hartford Value Opportunities HLS Fund.). Each "Fund" or together the "Funds" are organized under the laws of the State of Maryland and are registered with the Securities and Exchange Commission (SEC) under the Investment Company Act of 1940, as amended, as diversified open-end management investment companies. Hartford Advisers HLS Fund, Hartford Bond HLS Fund, Hartford Capital Appreciation HLS Fund, Disciplined Equity HLS Fund, Hartford Global Leaders HLS Fund, Hartford Growth Opportunities HLS Fund, Hartford High Yield HLS Fund, Hartford Index HLS Fund, Hartford International Opportunities HLS Fund, Hartford Money Market HLS Fund, Hartford SmallCap Growth HLS Fund, Hartford SmallCap Value HLS Fund, Hartford Stock HLS Fund, Hartford U.S. Government Securities HLS Fund and Hartford Value Opportunities HLS Fund, offer both Class IA and IB shares. The remainder of the funds offer Class IA shares. Each class is offered at net asset value without a sales charge and is subject to the same expenses except that the Class IB shares are subject to distribution fees charged pursuant to a Rule 12b-1 plan. Distribution and Service Plans have been adopted in accordance with Rule 12b-1 of the Investment Company Act of 1940, as amended. Income and expenses, realized and unrealized capital gains and losses are allocated to each class of a Fund based on the ratio of the prior day's net assets. 2. SIGNIFICANT ACCOUNTING POLICIES: The following is a summary of significant accounting policies of the Funds, which are in accordance with generally accepted accounting principles in the investment company industry: a) Security Transactions -- Security transactions are recorded on the trade date (date the order to buy or sell is executed). Security gains and losses are determined on the basis of identified cost. b) Security Valuation and Investment Income -- Equity securities are valued at the last sales price reported on the principal securities exchange on which such securities are traded (domestic or foreign) or on the principal over-the-counter market on which such securities are traded, as of the close of business on the day the securities are being valued. If no sale took place on a particular day, then such securities are valued at the mean between the bid and asked prices. For securities traded on the NASDAQ national market system, the Funds utilize the NASDAQ Official Closing Price which compares the last trade to the bid/ask range of a security. If the last trade falls within the bid/ask range, then that price will be the closing price. If the last trade is outside the bid/ask range, and falls above the ask, the ask will be the closing price. If the last price is below the bid, the bid will be the closing price. The difference between cost and market value for debt and equity securities is recorded in the Statement of Operations and accumulated in net assets. Debt securities (other than short-term obligations) are valued on the basis of valuations furnished by an unaffiliated pricing service, which determines valuations for normal institutional size trading units of debt securities. Mortgage securities are valued at the bid price. Short-term securities held in the Money Market 118 - -------------------------------------------------------------------------------- Fund are valued at amortized cost or original cost plus accrued interest receivable, both of which approximate market value. In the remaining Funds, short-term investments with maturity of 60 days or less when purchased are valued at amortized cost, which approximates market value. Short-term investments purchased with a maturity of more than 60 days when purchased are valued based on market quotations until the remaining days to maturity becomes less than 61 days. From such time until maturity, the investments are valued at amortized cost. The funds use market prices in valuing portfolio securities, but may use fair value estimates, under procedures established by the Board of Directors, if reliable market prices are unavailable. Fair value pricing may be used by a fund when current market values are unavailable or when an event occurs after the close of the exchange on which the fund's portfolio securities are principally traded that is likely to have changed the value of the securities. The Funds are supplied with information from an unaffiliated third party with respect to the fair value of foreign securities. Price movements in futures contracts and ADRs, and various other indices may be reviewed in the course of making a good faith determination of a security's fair value. The use of fair value pricing by a fund may cause the net asset value of its shares to differ significantly from the net asset value that would be calculated using current market values. Securities of foreign issuers and non-dollar securities are valued on the basis of quotations from the primary market in which they are traded, and are translated from the local currency into U.S. dollars using current exchange rates. Options are valued at the last sales price. If no sale took place on such day, then options are valued at the mean between the bid and asked prices. Securities for which prices are not available from an independent pricing service, but where an active market exists, are valued using market quotations obtained from one or more dealers that make markets in the securities or from an approved quotation system. Investment income such as dividend income is recorded on the ex-dividend date. Interest income, including amortization of bond premium and discount, is recorded on the accrual basis. c) Foreign Currency Transactions -- The accounting records of the Funds are maintained in U.S. dollars. All assets and liabilities initially expressed in foreign currencies are converted into U.S. dollars at prevailing exchange rates. Purchases and sales of investment securities, dividend and interest income and certain expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. The Funds do not isolate that portion of portfolio security valuation resulting from fluctuations in foreign currency exchange rates on portfolio securities from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments in the accompanying financial statements. Net realized foreign exchange gains or losses arise from sales of foreign currencies and the difference between asset and liability amounts initially stated in foreign currencies and the U.S. dollar value of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of other assets and liabilities at the end of the reporting period, resulting from changes in the exchange rates. d) Repurchase Agreements -- A repurchase agreement is an agreement by which the seller of a security agrees to repurchase the security sold at a mutually agreed upon time and price. At the time the Funds enter into a repurchase agreement, the value of the underlying collateral security(ies), including accrued interest, will be equal to or exceed the value of the repurchase agreement. Securities which serve to collateralize the repurchase agreement are held by each Fund's custodian in book entry or physical form in the custodial account of the Fund. Repurchase agreements are valued at cost plus accrued interest receivable. All repurchase agreements are handled through the Funds' custodian, State Street Bank and Trust Company. Certain Funds, together with other investment management companies having investment advisory agreements with Wellington Management Company, LLP ("Wellington") have interests in a joint repurchase agreement dated 12/31/03 each maturing 01/02/04 with the following brokers: $190,380 BNP Paribas Securities, 0.82%; $435,000 ABN Amro, 0.82%; and $1,070,000 UBS Securities, 0.84%. These joint repurchase agreements are 119 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- collateralized by $1,325,076 U.S. Treasury Bonds 3.375% -- 12.750% due 11/15/10 - 04/15/32 and $410,208 U.S. Treasury Notes 1.625% -- 4.250% due 12/31/04 - 01/15/10. The maturity amounts are as follows: <Table> <Caption> MATURITY FUND AMOUNT ---- -------- Hartford Advisers HLS Fund.................................. $ 46,937 Hartford Capital Appreciation HLS Fund...................... 341,255 Hartford Disciplined Equity HLS Fund........................ 37,853 Hartford Global Leaders HLS Fund............................ 32,221 Hartford Growth Opportunities HLS Fund...................... 31,538 Hartford International Opportunities HLS Fund............... 16,633 Hartford SmallCap Growth HLS Fund........................... 46,357 Hartford Stock HLS Fund..................................... 24,813 Hartford Value Opportunities HLS Fund....................... 4,985 </Table> Certain Funds, together with other investment management companies having investment advisory agreements with The Hartford Investment Management Company (Hartford Investment Management), a wholly owned subsidiary of The Hartford Financial Services Group, Inc., (The Hartford), have interests in a joint repurchase agreement dated 12/31/03 each maturing 01/02/04 with the following brokers: $180,326 UBS Warburg, 0.84%; and $150,000 RBS Greenwich Capital Markets, 0.84%. These joint repurchase agreements are collateralized by $336,910 U.S. Treasury Bonds 6.250% -- 13.250% due 11/15/09 - 05/15/30. The maturity amounts are as follows: <Table> <Caption> MATURITY FUND AMOUNT ---- -------- Hartford Bond HLS Fund...................................... $82,933 Hartford High Yield HLS Fund................................ 63,088 Hartford Index HLS Fund..................................... 22,861 Hartford Money Market HLS Fund.............................. 61,341 Hartford U.S. Government Securities HLS Fund................ 25,565 </Table> e) Joint Trading Account -- Pursuant to an exemptive order issued by the SEC, the Funds may transfer uninvested cash balances into a joint trading account managed by Hartford Investment Management or Wellington. These balances may be invested in one or more repurchase agreements and/or short-term money market instruments. As of December 31, 2003 there are no joint trading accounts. f) Futures, Options on Futures and Options Transactions -- Certain Funds may invest in futures contracts and options contracts in order to gain exposure to or protect against changes in the market. A futures contract is an agreement between two parties to buy and sell a security at a set price on a future date. When the Funds enter into such contracts, they are required to deposit with their custodian an amount of "initial margin" of cash, commercial paper or U.S. Treasury Bills. Subsequent payments, called maintenance margin, to and from the broker, are made on a daily basis as the price of the underlying security fluctuates, making the long and short positions in the futures contract more or less valuable (i.e., mark-to-market), which results in an unrealized gain or loss to the Funds. The market value of a traded futures contract is the last sale price. In the absence of a last sale price, the last offering price is used. In the absence of either of these prices, fair value is determined according to procedures established by the Funds' Board of Directors. At any time prior to expiration of the futures contract, the Funds may close the position by taking an opposite position, which would operate to terminate the position in the futures contract. A final determination of maintenance margin is then made, additional cash is required to be paid by or released to the Funds and the Funds realize a gain or loss. 120 - -------------------------------------------------------------------------------- The use of futures contracts involve elements of market risk, which may exceed the amounts recognized in the Statements of Assets and Liabilities. Change in the value of the futures contracts may decrease the effectiveness of a Fund's strategies and potentially result in loss. The premium paid by a Fund for the purchase of a call or put option is included in the Fund's Statement of Assets and Liabilities as an investment and subsequently "marked-to-market" through net unrealized appreciation (depreciation) of options to reflect the current market value of the option as of the end of the reporting period. If a purchased option expires on its stipulated expiration date, the Fund realizes a loss in the amount of the cost of the option. If the Fund exercises a put option, it realizes a gain or loss from the sale of the underlying security and the proceeds from such sale will be decreased by the premium originally paid. If the Fund exercises a call option, the cost of the security, which the Fund purchases upon exercise, will be increased by the premium originally paid to buy the call. The Funds may write covered options. "Covered" means that so long as a Fund is obligated as the writer of an option, it will own either the underlying securities or currency or the option to purchase or sell the same underlying securities or currency having the expiration date of the covered option and an exercise price equal to or less than the exercise price of the covered option, or will establish or maintain with its custodian for the term of the option a "segregated account" consisting of cash or other liquid securities having a value equal to the fluctuating market value of the option securities or currencies. A Fund receives a premium for writing a call or put option, recorded as a component of other liabilities on the Statements of Assets and Liabilities, which increases the Funds' return, recorded as a realized gain, if the option expires unexercised or is closed out at a net profit. Any loss realized from the covered option is offset by the gain realized on the sale of the underlying securities or currency. Covered options, at times before exercise or close out, are marked-to-market through net unrealized appreciation (depreciation) of options. There is a risk of loss from a change in value of such options, which may exceed the related premiums received. The following Funds' had written option activity during the year ended December 31, 2003: <Table> <Caption> HARTFORD BOND HLS FUND OPTION CONTRACTS ACTIVITY DURING THE PERIOD ------------------------------ PREMIUM REALIZED SHARES AMOUNTS GAIN/(LOSS) ------ ------- ----------- CALLS WRITTEN Beginning of the period..................................... -- $ -- $ -- Written during the period................................... 4 291 -- Expired during the period................................... (4) (291) 291 Closed during the period.................................... -- -- -- Exercised during the period................................. -- -- -- ---- ----- ---- Balance at the end of the period............................ -- $ -- $291 ==== ===== ==== PUTS WRITTEN Beginning of the period..................................... -- $ -- $ -- Written during the period................................... 4 600 -- Expired during the period................................... (4) (600) 600 Closed during the period.................................... -- -- -- Exercised during the period................................. -- -- -- ---- ----- ---- Balance at the end of the period............................ -- $ -- $600 ==== ===== ==== </Table> g) Forward Foreign Currency Contracts -- As of December 31, 2003, Hartford Bond HLS Fund, Hartford Capital Appreciation HLS Fund, Hartford Global Leaders HLS Fund, Hartford Growth Opportunities HLS Fund, Hartford International Opportunities HLS Fund, Hartford Multisector Bond HLS Fund and Hartford Value Opportunities HLS Fund entered into forward foreign currency exchange contracts that obligate the Funds to repurchase/replace or sell currencies at specified future dates. The Funds enter into forward foreign currency contracts to hedge against adverse fluctuations in exchange rates between currencies. 121 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- Forward contracts involve elements of market risk in excess of the amount reflected in the Statements of Assets and Liabilities. In addition, risks may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of the contract and from unanticipated movement in the value of foreign currencies relative to the U.S. dollar. h) Indexed Securities -- The Funds may invest in indexed securities whose values are linked to changes in interest rates, indices, or other underlying instruments. The Funds use these securities to increase or decrease its exposure to different underlying instruments and to gain exposure to markets that might be difficult to invest in through conventional securities. Indexed securities are shown at market value in the Statement of Net Assets, if applicable. Indexed securities may be more volatile than their underlying instruments, but any loss is limited to the amount of the original investment and there is a limit to the potential appreciation of the investment. i) Securities Lending -- The Funds, except for the Money Market HLS Fund, may lend their securities to certain qualified brokers who pay these Funds negotiated lender fees. The loans are collateralized at all times with cash with a market value at least equal to the market value of the securities on loan. As with other extensions of credit, these Funds may bear the risk of delay in recovery of the loaned securities or even loss of rights in the collateral should the borrower of the securities fail financially. As of December 31, 2003, the market value of the securities loaned and the market value of the collateral were as follows: <Table> <Caption> MARKET VALUE MARKET VALUE FUND OF SECURITIES LOANED OF COLLATERAL ---- -------------------- ------------- Hartford Advisers HLS Fund.................................. $1,587,694 $1,620,168 Hartford Bond HLS Fund...................................... 735,598 750,359 Hartford Capital Appreciation HLS Fund...................... 478,374 496,519 Hartford Global Leaders HLS Fund............................ 58,863 61,510 Hartford Growth Opportunities HLS Fund...................... 31,563 32,513 Hartford High Yield HLS Fund................................ 80,201 81,868 Hartford Index HLS Fund..................................... 8,575 8,871 Hartford International Opportunities HLS Fund............... 85,210 89,576 Hartford International Stock HLS Fund....................... 5,913 6,215 Hartford SmallCap Growth HLS Fund........................... 24,218 25,715 Hartford Stock HLS Fund..................................... 32,628 33,265 Hartford U.S. Government Securities HLS Fund................ 155,229 158,397 Hartford Value Opportunities HLS Fund....................... 5,817 6,053 </Table> j) Federal Income Taxes -- For federal income tax purposes, the Funds intend to continue to qualify as regulated investment companies under Subchapter M of the Internal Revenue Code by distributing substantially all of their taxable net investment income and net realized capital gains to their shareholders or otherwise complying with the requirements of regulated investment companies. Accordingly, no provision for federal income taxes has been made in the accompanying financial statements. k) Fund Share Valuation and Distributions to Shareholders -- Orders for the Funds' shares are executed in accordance with the investment instructions of the contract holders. Dividend income is accrued as of the ex-dividend date, except that certain dividends for foreign securities where the ex-dividend date may have passed, are recorded as soon as the Fund is informed of the ex-dividend date in the exercise of due diligence. Interest income and expenses are accrued on a daily basis. The net asset value of each Fund's shares is determined as of the close of each business day of the New York Stock Exchange (the Exchange). Orders for the purchase of a Fund's shares received prior to the close of the Exchange on any day on which the Fund is open for business are priced at the per-share net asset value determined as of the close of the Exchange. Orders received after the close of the Exchange, or on a day on which the Exchange and/or the Fund is not open for business, are priced at the next determined per-share net asset value. 122 - -------------------------------------------------------------------------------- Dividends are declared by the Funds' Board of Directors based upon the investment performance of the respective Funds. The policy of all Funds except the Hartford Money Market HLS Fund, Inc. is to pay dividends from net investment income and distribute realized capital gains, if any, at least once a year. Hartford Money Market HLS Fund seeks to maintain a stable net asset value per share of $1.00 by declaring a daily dividend from net investment income, including net short-term capital gains and losses, and by valuing its investments using the amortized cost method. Dividends are distributed monthly. Distributions from net investment income, realized capital gains and capital are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States. These differences include the treatment of non-taxable dividends, expiring capital loss carryforwards, foreign currency gains and losses, partnerships, and losses deferred due to wash sales and excise tax regulations. Permanent book and tax basis differences relating to shareholder distributions result in reclassifications to capital accounts (see Note 6). l) Use of Estimates -- The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of income and expenses during the period. Operating results in the future could vary from the amounts derived from management's estimates. m) Illiquid Securities and Other Investments -- Each HLS Fund is permitted to invest in illiquid securities or other investments. An HLS Fund will not, however, acquire illiquid securities or investments if 15% of its net assets (10% for the Money Market HLS Fund) would consist of such securities or other investments. "Illiquid" securities or investments are those that cannot be sold or disposed of in the ordinary course of business within seven days at approximately the same price used to determine a HLS Fund's net asset value. A HLS Fund may not be able to sell illiquid securities or other investments when their sub-advisor considers it desirable to do so or may have to sell such securities or investments at a price that is lower than the price that could be obtained if the securities or investments were more liquid. A sale of illiquid securities or other investments may require more time and may result in higher dealer discounts and other selling expenses than does the sale of those that are liquid. Illiquid securities and investments also may be more difficult to value do to the unavailability of reliable market quotations for such securities or investments, and investment in them may have an adverse impact on net asset value. Each HLS Fund may purchase certain restricted securities (known as 144A securities) that can be resold to institutions and which may be determined to be liquid pursuant to policies and guidelines of the Board of Directors. Under current interpretations of the SEC staff, the following types of securities are considered illiquid: (1) repurchase agreements maturing in more than seven days; (2) certain restricted securities (securities whose public resale is subject to legal or contractual restrictions); (3) options, with respect to specific securities, not traded on a national securities exchange that are not readily marketable; and (4) any other securities or investments that are not readily marketable. The following represents restricted securities of the Funds as of December 31, 2003: <Table> <Caption> ACQUISITION COST PERCENTAGE OF ACQUISITION FUND'S NET MARKET FUND SECURITY ACQUISITION DATE(S) COST ASSETS VALUE ---- -------- ------------------- ----------- ------------- ------- 144A SECURITIES Hartford Advisers HLS Fund Prudential Insurance Co. 7/16/98 $ 1,244 --% $1,362 of America Hartford Advisers HLS Fund ERAC USA Finance Co. 6/5/01 16,328 0.1 18,686 Hartford Advisers HLS Fund New England Mutual Life 10/23/98, 11/2/98 32,223 0.3 34,843 Insurance Co. Hartford Advisers HLS Fund Jackson National Life 11/4/98, 11/5/98 29,563 0.3 31,636 Insurance Co. <Caption> MARKET VALUE PERCENTAGE OF FUND'S NET FUND ASSETS ---- ------------- Hartford Advisers HLS Fund --% Hartford Advisers HLS Fund 0.2 Hartford Advisers HLS Fund 0.3 Hartford Advisers HLS Fund 0.3 </Table> 123 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> ACQUISITION COST PERCENTAGE OF ACQUISITION FUND'S NET MARKET FUND SECURITY ACQUISITION DATE(S) COST ASSETS VALUE ---- -------- ------------------- ----------- ------------- ------- Hartford Advisers HLS Fund AESOP Funding II LLC, 2/19/98, 4/9/98, 5/25/99 $42,834 0.4% $45,152 Series 1998-1, Class A Hartford Advisers HLS Fund Liberty Mutual Insurance 9/9/98, 9/10/98 31,849 0.3 32,863 Hartford Advisers HLS Fund SCL Terminal Aereo 12/17/98 17,630 0.2 19,149 Santiago SA Hartford Bond HLS Fund Xerox Corp. 11/20/01 2,670 0.1 4,259 Hartford Bond HLS Fund ERAC USA Finance Co. 4/5/02 2,962 0.1 3,112 Hartford Bond HLS Fund AT&T Corp. 7/30/02 1,354 -- 1,987 Hartford Bond HLS Fund COX Enterprises, Inc. 4/3/03 3,098 0.1 3,198 Hartford Bond HLS Fund Northwestern Corp. 4/9/03 4,150 0.1 4,249 Hartford Bond HLS Fund Whole Auto Loan Trust, 5/2/03 2,949 0.1 2,964 Series 2002-1, Class D Hartford Bond HLS Fund International Transmission 7/1/03 3,947 0.1 3,813 Co. Hartford Bond HLS Fund Fondo Latino Americano De 7/17/03 5,547 0.2 5,515 Reservas Hartford Bond HLS Fund AQ Finance CEB Trust, 7/24/03 2,457 0.1 2,457 Series 2003-CE1A, Class Note Hartford Bond HLS Fund Prudential Insurance Co. 8/4/03 3,807 0.1 3,813 of America Hartford Bond HLS Fund Echostar DBS Corp. 9/18/03 5,200 0.2 5,259 Hartford Bond HLS Fund Placer Dome, Inc. 10/7/03 4,185 0.1 4,296 Hartford Bond HLS Fund Rabobank Capital Fund II 11/14/03 11,300 0.4 11,316 Hartford Bond HLS Fund Hutchison Whampoa 11/19/03 10,489 0.3 10,662 International Ltd. Hartford Bond HLS Fund Hutchison Whampoa 11/19/03 15,415 0.5 16,092 International Ltd. Hartford Bond HLS Fund Rhodia S.A. 5/20/03, 5/21/03 4,391 0.1 4,020 Hartford Bond HLS Fund Texas-New Mexico Power Co. 6/5/03 4,132 0.1 4,176 Hartford Capital CONSOL Energy, Inc., PIPE 10/2/03 61,762 0.6 78,585 Appreciation HLS Fund Hartford Capital Spirit Finance Corp. 12/11/03 21,857 0.2 21,857 Appreciation HLS Fund Hartford Global Leaders Samsung Electronics Co., 7/16/03, 10/1/03 5,248 0.6 5,636 HLS Fund Ltd., GDR Hartford High Yield HLS Hosiery Corp. 10/7/94 4 -- S-- Fund Hartford High Yield HLS Powertel, Inc. 1/27/97 19 -- 76 Fund Hartford High Yield HLS Xerox Corp. 11/20/01 195 -- 311 Fund Hartford High Yield HLS Donnelley (RH) Finance 11/26/02 520 0.1 585 Fund Corp. Hartford High Yield HLS Moore North America 3/11/03 819 0.1 934 Fund Finance, Inc. Hartford High Yield HLS Westport Resources Corp. 3/27/03 208 -- 220 Fund Hartford High Yield HLS AES Corp. (The) 5/1/03 5,408 0.7 5,900 Fund Hartford High Yield HLS PRIMEDIA, Inc. 5/8/03 1,300 0.2 1,326 Fund Hartford High Yield HLS Medex, Inc. 5/14/03 695 0.1 747 Fund <Caption> MARKET VALUE PERCENTAGE OF FUND'S NET FUND ASSETS ---- ------------- Hartford Advisers HLS Fund 0.4% Hartford Advisers HLS Fund 0.3 Hartford Advisers HLS Fund 0.1 Hartford Bond HLS Fund 0.1 Hartford Bond HLS Fund 0.1 Hartford Bond HLS Fund 0.1 Hartford Bond HLS Fund 0.1 Hartford Bond HLS Fund 0.2 Hartford Bond HLS Fund 0.1 Hartford Bond HLS Fund 0.1 Hartford Bond HLS Fund 0.2 Hartford Bond HLS Fund 0.1 Hartford Bond HLS Fund 0.1 Hartford Bond HLS Fund 0.2 Hartford Bond HLS Fund 0.1 Hartford Bond HLS Fund 0.4 Hartford Bond HLS Fund 0.4 Hartford Bond HLS Fund 0.5 Hartford Bond HLS Fund 0.1 Hartford Bond HLS Fund 0.1 Hartford Capital 0.8 Appreciation HLS Fund Hartford Capital 0.2 Appreciation HLS Fund Hartford Global Leaders 0.7 HLS Fund Hartford High Yield HLS -- Fund Hartford High Yield HLS -- Fund Hartford High Yield HLS -- Fund Hartford High Yield HLS 0.1 Fund Hartford High Yield HLS 0.1 Fund Hartford High Yield HLS -- Fund Hartford High Yield HLS 0.8 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.1 Fund </Table> 124 - -------------------------------------------------------------------------------- <Table> <Caption> ACQUISITION COST PERCENTAGE OF ACQUISITION FUND'S NET MARKET FUND SECURITY ACQUISITION DATE(S) COST ASSETS VALUE ---- -------- ------------------- ----------- ------------- ------- Hartford High Yield HLS Warnaco, Inc. 6/5/03 $ 690 0.1% $ 711 Fund Hartford High Yield HLS Dana Credit Corp. 6/11/03 1,416 0.2 1,505 Fund Hartford High Yield HLS PG&E Corp. 6/27/03 1,455 0.2 1,575 Fund Hartford High Yield HLS CMS Energy Corp. 7/9/03 1,164 0.2 1,240 Fund Hartford High Yield HLS Calpine Corp. 7/10/03 2,635 0.4 2,569 Fund Hartford High Yield HLS Wabtec Corp. 7/23/03 605 0.1 627 Fund Hartford High Yield HLS Dynegy Holdings, Inc. 8/1/03 3,852 0.5 4,301 Fund Hartford High Yield HLS Southern Star Central 8/1/03 1,395 0.2 1,541 Fund Corp. Hartford High Yield HLS Nevada Power Co. 8/13/03 440 0.1 487 Fund Hartford High Yield HLS Dex Media, Inc. 8/15/03 1,790 0.2 2,081 Fund Hartford High Yield HLS Perry Ellis International, 9/15/03 4,079 0.6 4,247 Fund Inc. Hartford High Yield HLS EchoStar DBS Corp. 9/18/03 2,875 0.4 2,907 Fund Hartford High Yield HLS Level 3 Communications, 9/26/03 1,300 0.2 1,375 Fund Inc. Hartford High Yield HLS Scotts Co. (The) 10/1/03 1,335 0.2 1,372 Fund Hartford High Yield HLS Capital One Financial 10/15/03 1,240 0.2 1,242 Fund Corp. Hartford High Yield HLS DRS Technologies, Inc. 10/16/03 1,420 0.2 1,459 Fund Hartford High Yield HLS Host Marriott LP 10/27/03 1,286 0.2 1,321 Fund Hartford High Yield HLS United Rentals, Inc. 10/28/03 2,250 0.3 2,298 Fund Hartford High Yield HLS Nalco Chemical Co. 10/29/03 3,185 0.4 3,376 Fund Hartford High Yield HLS Cincinnati Bell, Inc. 10/31/03 2,350 0.3 2,526 Fund Hartford High Yield HLS Pilgrim's Pride Corp. 11/6/03 315 -- 326 Fund Hartford High Yield HLS Terex Corp. 11/10/03 3,935 0.5 4,059 Fund Hartford High Yield HLS Chesapeake Energy Corp. 11/12/03 1,326 0.2 1,380 Fund Hartford High Yield HLS Poster Financial Group, 11/18/03 675 0.1 714 Fund Inc. Hartford High Yield HLS Medianews Group, Inc. 11/20/03 1,338 0.2 1,374 Fund Hartford High Yield HLS General Nutrition Centers 11/25/03 935 0.1 958 Fund Hartford High Yield HLS Georgia-Pacific Corp. 12/4/03 2,250 0.3 2,295 Fund Hartford High Yield HLS Couche-Tard Finance Corp. 12/11/03 700 0.1 733 Fund <Caption> MARKET VALUE PERCENTAGE OF FUND'S NET FUND ASSETS ---- ------------- Hartford High Yield HLS 0.1% Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.3 Fund Hartford High Yield HLS 0.1 Fund Hartford High Yield HLS 0.6 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.1 Fund Hartford High Yield HLS 0.3 Fund Hartford High Yield HLS 0.6 Fund Hartford High Yield HLS 0.4 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.1 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.3 Fund Hartford High Yield HLS 0.5 Fund Hartford High Yield HLS 0.3 Fund Hartford High Yield HLS -- Fund Hartford High Yield HLS 0.5 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.1 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.1 Fund Hartford High Yield HLS 0.3 Fund Hartford High Yield HLS 0.1 Fund </Table> 125 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> ACQUISITION COST PERCENTAGE OF ACQUISITION FUND'S NET MARKET FUND SECURITY ACQUISITION DATE(S) COST ASSETS VALUE ---- -------- ------------------- ----------- ------------- ------- Hartford High Yield HLS Sensus Metering Systems 12/11/03 $ 630 0.1% $ 647 Fund Hartford High Yield HLS United Agri Products 12/11/03 400 0.1 411 Fund Hartford High Yield HLS Bombardier Recreational 12/11/03 945 0.1 988 Fund Hartford High Yield HLS Mariner Health Care, Inc. 12/12/03 1,415 0.2 1,429 Fund Hartford High Yield HLS Suburban Propane Partners 12/18/03 940 0.1 949 Fund LP Hartford High Yield HLS Xcel Energy, Inc. 12/17/03, 12/18/03 3,309 0.4 3,427 Fund Hartford High Yield HLS Burns Philp Capital 6/14/02, 5/1/03, 5/6/03, 3,343 0.5 3,585 Fund Property Ltd. 5/22/03 Hartford High Yield HLS Rhodia S.A. 7/25/03, 9/4/03 1,786 0.2 1,656 Fund Hartford High Yield HLS ACC Escrow Corp. 7/25/03 1,100 0.1 1,227 Fund Hartford High Yield HLS CBD Media, Inc. 6/9/03 375 0.1 413 Fund Hartford High Yield HLS Centerpoint Energy 3/18/03 1,750 0.2 1,981 Fund Resources Hartford High Yield HLS Centerpoint Energy, Inc. 10/28/03 1,515 0.2 1,542 Fund Hartford High Yield HLS Houston Exploration Co. 6/5/03 250 -- 258 Fund Hartford High Yield HLS BSN Glasspack Obligation 7/29/03 2,154 0.3 2,531 Fund S.A. Hartford High Yield HLS Fresenius Finance B.V. 4/16/03 1,295 0.2 1,635 Fund Hartford High Yield HLS Intrawest Corp. 10/1/03, 10/2/03 1,310 0.2 1,362 Fund Hartford High Yield HLS Remy Cointreau S.A. 6/18/03 337 -- 372 Fund Hartford High Yield HLS Rhodia S.A. 5/22/03 3,818 0.5 3,341 Fund Hartford High Yield HLS Vivendi Universal S.A. 7/2/03 2,847 0.4 3,001 Fund Hartford International China Steel Corp., GDR 10/16/03 5,110 0.6 5,456 Opportunities HLS Fund Hartford Money Market HLS Nationwide Building 7/17/03 30,000 1.6 30,000 Fund Society Hartford Money Market HLS Honda Motor Corp. 10/20/03 37,500 2.0 37,500 Fund Hartford Money Market HLS Bradford & Bingley PLC 12/8/03 50,000 2.7 50,000 Fund Hartford Money Market HLS Cargill, Inc. 1/9/03 25,000 1.4 25,000 Fund Hartford Money Market HLS Northern Rock PLC 1/16/03 50,000 2.7 50,000 Fund Hartford Multisector Bond John Hancock Global 6/12/02 100 0.3 106 HLS Fund Funding II Hartford Multisector Bond Knology, Inc. 11/7/02 S-- -- 4 HLS Fund Hartford Multisector Bond Reg Diversified Funding 1/10/03 108 0.4 107 HLS Fund <Caption> MARKET VALUE PERCENTAGE OF FUND'S NET FUND ASSETS ---- ------------- Hartford High Yield HLS 0.1% Fund Hartford High Yield HLS 0.1 Fund Hartford High Yield HLS 0.1 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.1 Fund Hartford High Yield HLS 0.5 Fund Hartford High Yield HLS 0.5 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.1 Fund Hartford High Yield HLS 0.3 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS -- Fund Hartford High Yield HLS 0.3 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.2 Fund Hartford High Yield HLS 0.1 Fund Hartford High Yield HLS 0.4 Fund Hartford High Yield HLS 0.4 Fund Hartford International 0.6 Opportunities HLS Fund Hartford Money Market HLS 1.6 Fund Hartford Money Market HLS 2.0 Fund Hartford Money Market HLS 2.7 Fund Hartford Money Market HLS 1.4 Fund Hartford Money Market HLS 2.7 Fund Hartford Multisector Bond 0.4 HLS Fund Hartford Multisector Bond -- HLS Fund Hartford Multisector Bond 0.4 HLS Fund </Table> 126 - -------------------------------------------------------------------------------- <Table> <Caption> ACQUISITION COST PERCENTAGE OF ACQUISITION FUND'S NET MARKET FUND SECURITY ACQUISITION DATE(S) COST ASSETS VALUE ---- -------- ------------------- ----------- ------------- ------- Hartford Multisector Bond First Industrial Realty 2/6/03 $ 61 0.2% $ 61 HLS Fund Trust, Inc. Hartford Multisector Bond American Savings Bank 3/5/03 81 0.3 80 HLS Fund Hartford Multisector Bond Goldman Sachs Group LP 3/18/03 54 0.2 55 HLS Fund Hartford Multisector Bond Americo Life, Inc. 4/25/03 74 0.2 75 HLS Fund Hartford Multisector Bond Centerpoint Energy, Inc. 5/21/03 50 0.2 52 HLS Fund Hartford Multisector Bond Centura Capital Trust I 5/22/03 316 1.1 286 HLS Fund Hartford Multisector Bond Bank of New York 6/12/03 234 0.8 220 HLS Fund Institutional Capital Trust A Hartford Multisector Bond Corestates Cap 6/18/03 178 0.6 170 HLS Fund Hartford Multisector Bond Southern Power Co. 7/1/03 100 0.3 95 HLS Fund Hartford Multisector Bond Anchor Glass Container 7/29/03 54 0.2 58 HLS Fund Hartford Multisector Bond Dynegy Holdings, Inc. 8/1/03 60 0.2 69 HLS Fund Hartford Multisector Bond Consumers Energy Co. 10/3/03 102 0.3 104 HLS Fund Hartford Multisector Bond URC Holdings Corp. 10/8/03 56 0.2 56 HLS Fund Hartford Multisector Bond Intelsat Ltd. 10/31/03 100 0.3 104 HLS Fund Hartford Multisector Bond RBS Capital Trust I 11/5/03 71 0.2 72 HLS Fund Hartford Multisector Bond Barclays Bank PLC 11/5/03 246 0.8 246 HLS Fund Hartford Multisector Bond HSBC Capital Funding LP 11/5/03 70 0.2 71 HLS Fund Hartford Multisector Bond United Energy Distribution 11/12/03 110 0.4 112 HLS Fund Holdings Ltd. Hartford Multisector Bond Plains All American 12/3/03 65 0.2 66 HLS Fund Pipeline Hartford Multisector Bond Suburban Propane Partners 12/18/03 100 0.3 101 HLS Fund LP Hartford Multisector Bond Knology, Inc. 11/7/02, 5/31/03, 11/30/03 24 0.1 24 HLS Fund Hartford Multisector Bond Citicorp Lease 5/8/02, 6/19/02, 9/23/03 338 1.1 348 HLS Fund Pass-Through Trust 1999-1 Hartford Multisector Bond Citicorp Lease 6/1/00, 7/14/00, 12/17/02 199 0.7 234 HLS Fund Pass-Through Trust 1999-1 Hartford Multisector Bond Bershire Hathaway, Inc. 9/22/03, 11/12/03 186 0.6 188 HLS Fund Hartford Multisector Bond Intrawest Corp. 12/17/03 78 0.3 78 HLS Fund Hartford Multisector Bond NTELOS, Inc. 7/21/03 1 -- S-- HLS Fund Hartford Multisector Bond RailAmerica, Inc. 8/9/00 S-- -- 3 HLS Fund <Caption> MARKET VALUE PERCENTAGE OF FUND'S NET FUND ASSETS ---- ------------- Hartford Multisector Bond 0.2% HLS Fund Hartford Multisector Bond 0.3 HLS Fund Hartford Multisector Bond 0.2 HLS Fund Hartford Multisector Bond 0.2 HLS Fund Hartford Multisector Bond 0.2 HLS Fund Hartford Multisector Bond 1.0 HLS Fund Hartford Multisector Bond 0.7 HLS Fund Hartford Multisector Bond 0.6 HLS Fund Hartford Multisector Bond 0.3 HLS Fund Hartford Multisector Bond 0.2 HLS Fund Hartford Multisector Bond 0.2 HLS Fund Hartford Multisector Bond 0.3 HLS Fund Hartford Multisector Bond 0.2 HLS Fund Hartford Multisector Bond 0.3 HLS Fund Hartford Multisector Bond 0.2 HLS Fund Hartford Multisector Bond 0.8 HLS Fund Hartford Multisector Bond 0.2 HLS Fund Hartford Multisector Bond 0.4 HLS Fund Hartford Multisector Bond 0.2 HLS Fund Hartford Multisector Bond 0.3 HLS Fund Hartford Multisector Bond 0.1 HLS Fund Hartford Multisector Bond 1.2 HLS Fund Hartford Multisector Bond 0.8 HLS Fund Hartford Multisector Bond 0.6 HLS Fund Hartford Multisector Bond 0.3 HLS Fund Hartford Multisector Bond -- HLS Fund Hartford Multisector Bond -- HLS Fund </Table> 127 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> ACQUISITION COST PERCENTAGE OF ACQUISITION FUND'S NET MARKET FUND SECURITY ACQUISITION DATE(S) COST ASSETS VALUE ---- -------- ------------------- ----------- ------------- ------- ILLIQUID SECURITIES Hartford Bond HLS Fund Delta Airlines, Inc. 10/18/96 $ 1,530 --% $1,028 Hartford Bond HLS Fund Iridium World 7/11/97 97 -- S-- Communications, Inc. Hartford Bond HLS Fund Voicestream Wireless Corp. 8/1/97 S-- -- S-- Hartford Bond HLS Fund Pollyone Corp. 9/19/02 1,693 0.1 1,679 Hartford Bond HLS Fund Global Crossing Ltd. 12/9/03 2,220 0.1 2,236 Hartford Bond HLS Fund Marconi Corp., PLC 5/19/03 1,716 0.1 1,853 Hartford Bond HLS Fund Marconi Corp., PLC 5/19/03 3,759 0.1 4,131 Hartford High Yield HLS Hosiery Corp. 10/7/94 4 -- S-- Fund Hartford High Yield HLS Voicestream Wireless Corp. 8/1/97 S-- -- 1 Fund Hartford High Yield HLS Minorplanet System USA, 2/13/98 3 -- S-- Fund Inc. Hartford High Yield HLS Solutia, Inc. 11/11/02 S-- -- 29 Fund Hartford High Yield HLS Marconi Corp., PLC, ADR 5/20/03 1,128 0.2 2,345 Fund Hartford High Yield HLS Splitrock Services, Inc. 7/23/98, 8/5/98 15 -- 17 Fund Hartford High Yield HLS TELUS Corp. 8/5/96, 10/3/96, 3/26/01 42 -- 17 Fund Hartford High Yield HLS Adelphia Communications 1/16/02 513 0.1 32 Fund Corp. Hartford Multisector Bond Reg Diversified Funding 1/10/03 108 0.4 107 HLS Fund Hartford Multisector Bond First Industrial Realty 2/6/03 61 0.2 61 HLS Fund Trust, Inc. Hartford Multisector Bond American Savings Bank 3/5/03 81 0.3 80 HLS Fund Hartford Multisector Bond Americo Life, Inc. 4/25/03 74 0.2 75 HLS Fund Hartford Multisector Bond Consumers Energy Co. 10/3/03 102 0.3 104 HLS Fund Hartford Multisector Bond Plains All American 12/3/03 65 0.2 66 HLS Fund Pipeline Hartford Multisector Bond Knology, Inc. 11/7/02 S-- -- 4 HLS Fund OTHER RESTRICTED SECURITIES Hartford Growth Quanta Computer, Inc., GDR 12/16/03, 12/19/03, 1,471 0.2 1,438 Opportunities HLS Fund 12/22/03 <Caption> MARKET VALUE PERCENTAGE OF FUND'S NET FUND ASSETS ---- ------------- Hartford Bond HLS Fund --% Hartford Bond HLS Fund -- Hartford Bond HLS Fund -- Hartford Bond HLS Fund 0.1 Hartford Bond HLS Fund 0.1 Hartford Bond HLS Fund 0.1 Hartford Bond HLS Fund 0.1 Hartford High Yield HLS -- Fund Hartford High Yield HLS -- Fund Hartford High Yield HLS -- Fund Hartford High Yield HLS -- Fund Hartford High Yield HLS 0.3 Fund Hartford High Yield HLS -- Fund Hartford High Yield HLS -- Fund Hartford High Yield HLS -- Fund Hartford Multisector Bond 0.4 HLS Fund Hartford Multisector Bond 0.2 HLS Fund Hartford Multisector Bond 0.3 HLS Fund Hartford Multisector Bond 0.2 HLS Fund Hartford Multisector Bond 0.4 HLS Fund Hartford Multisector Bond 0.2 HLS Fund Hartford Multisector Bond -- HLS Fund Hartford Growth 0.2 Opportunities HLS Fund </Table> - --------------- @@ Due to the presentation of the financial statements in thousands, the numbers may round to zero. 128 - -------------------------------------------------------------------------------- 3. EXPENSES: a) Investment Management and Advisory Agreements -- HL Investment Advisors, LLC (HL Advisors) an indirect wholly-owned subsidiary of The Hartford, serves as investment manager to the Funds pursuant to investment management agreements approved by each Fund's Board of Directors and shareholders. The schedule below reflects the rates of compensation paid to HL Advisors for services rendered: HARTFORD INDEX HLS FUND <Table> <Caption> AVERAGE DAILY NET ASSETS ANNUAL RATE - ------------------------ ----------- All assets......................................................... 0.200% </Table> HARTFORD MONEY MARKET HLS FUND <Table> <Caption> AVERAGE DAILY NET ASSETS ANNUAL RATE - ------------------------ ----------- All assets......................................................... 0.250% </Table> HARTFORD BOND HLS FUND AND HARTFORD STOCK HLS FUND <Table> <Caption> AVERAGE DAILY NET ASSETS ANNUAL RATE - ------------------------ ----------- On first $250 million.............................................. 0.325% On next $250 million............................................... 0.300 On next $500 million............................................... 0.275 Over $1 billion.................................................... 0.250 </Table> HARTFORD U.S. GOVERNMENT SECURITIES HLS FUND <Table> <Caption> AVERAGE DAILY NET ASSETS ANNUAL RATE - ------------------------ ----------- On first $50 million............................................... 0.500% Over $50 million................................................... 0.450 </Table> HARTFORD ADVISERS HLS FUND, HARTFORD CAPITAL APPRECIATION HLS FUND, HARTFORD DISCIPLINED EQUITY HLS FUND, HARTFORD GLOBAL LEADERS HLS FUND, HARTFORD HIGH YIELD HLS FUND AND HARTFORD INTERNATIONAL OPPORTUNITIES HLS FUND <Table> <Caption> AVERAGE DAILY NET ASSETS ANNUAL RATE - ------------------------ ----------- On first $250 million.............................................. 0.575% On next $250 million............................................... 0.525 On next $500 million............................................... 0.475 Over $1 billion.................................................... 0.425 </Table> HARTFORD GROWTH OPPORTUNITIES HLS FUND, HARTFORD SMALLCAP GROWTH HLS FUND, AND HARTFORD VALUE OPPORTUNITIES HLS FUND <Table> <Caption> AVERAGE DAILY NET ASSETS ANNUAL RATE - ------------------------ ----------- On first $100 million.............................................. 0.700% Over $100 million.................................................. 0.600 </Table> HARTFORD MULTISECTOR BOND HLS FUND <Table> <Caption> AVERAGE DAILY NET ASSETS ANNUAL RATE - ------------------------ ----------- On first $100 million.............................................. 0.750% Over $100 million.................................................. 0.650 </Table> HARTFORD INTERNATIONAL STOCK HLS FUND <Table> <Caption> AVERAGE DAILY NET ASSETS ANNUAL RATE - ------------------------ ----------- On first $100 million.............................................. 0.850% Over $100 million.................................................. 0.800 </Table> HARTFORD CAPITAL OPPORTUNITIES HLS FUND <Table> <Caption> AVERAGE DAILY NET ASSETS ANNUAL RATE - ------------------------ ----------- On first $200 million.............................................. 0.900% On next $300 million............................................... 0.850 Over $500 million.................................................. 0.800 </Table> HARTFORD LARGECAP GROWTH HLS FUND <Table> <Caption> AVERAGE DAILY NET ASSETS ANNUAL RATE - ------------------------ ----------- On first $100 million.............................................. 0.900% On next $100 million............................................... 0.850 Over $200 million.................................................. 0.800 </Table> 129 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- HARTFORD MIDCAP STOCK HLS FUND <Table> <Caption> AVERAGE DAILY NET ASSETS ANNUAL RATE - ------------------------ ----------- On first $100 million.............................................. 0.900% On next $150 million............................................... 0.850 Over $250 million.................................................. 0.800 </Table> HARTFORD BLUECHIP STOCK HLS FUND <Table> <Caption> AVERAGE DAILY NET ASSETS ANNUAL RATE - ------------------------ ----------- On first $100 million.............................................. 0.900% Over $100 million.................................................. 0.850 </Table> HARTFORD SMALLCAP VALUE HLS FUND <Table> <Caption> AVERAGE DAILY NET ASSETS ANNUAL RATE - ------------------------ ----------- On first 50 million................................................ 0.900% Over $50 million................................................... 0.850 </Table> A portion of the compensation above is used to compensate the Funds respective sub-adviser. Pursuant to sub-advisory agreements between HL Advisers and the sub-advisers, the sub-adviser provides the day-to-day investment management services for the Funds. The sub-advisers determine the purchase and sale of portfolio securities and place such orders for execution in the name of the respective Fund. In conjunction with their respective activity, the sub-advisers regularly furnish reports to the Funds' board of Directors concerning economic forecasts, investment strategy, portfolio activity and performance of the Funds. The Funds and their respective sub-adviser are listed below: <Table> <Caption> FUND SUB-ADVISER ---- ---------------------------------------- Hartford Advisers HLS Fund Wellington Hartford Blue Chip Stock HLS Fund T. Rowe Price Associates, Inc. Hartford Bond HLS Fund Hartford Investment Management Hartford Capital Appreciation HLS Fund Wellington Hartford Capital Opportunities HLS Fund Massachusetts Financial Services Company Hartford Disciplined Equity Wellington Hartford Global Leaders HLS Fund Wellington Hartford Growth Opportunities HLS Fund Wellington Hartford High Yield HLS Fund Hartford Investment Management Hartford Index HLS Fund Hartford Investment Management Hartford International Opportunities HLS Fund Wellington Hartford International Stock HLS Fund Lazard-Freres Asset Management Hartford LargeCap Growth HLS Fund Holland Capital Management, L.P.* Hartford MidCap Stock HLS Fund The Dreyfus Corporation Hartford Money Market HLS Fund Hartford Investment Management Hartford Multisector Bond HLS Fund A.I.M. Capital Management, Inc. Hartford SmallCap Growth HLS Fund Wellington Hartford SmallCap Value HLS Fund Berger Associates Hartford Stock HLS Fund Wellington Hartford U.S. Government Securities HLS Fund Hartford Investment Management Hartford Value Opportunities HLS Fund Wellington </Table> * previously managed by Alliance Capital Management, L.P. until December 19, 2003. b) Administrative Services Agreement -- Under the Administrative Services Agreement between Hartford Life Insurance Company (HL) and the following Funds, Hartford Bond HLS Fund, Hartford Capital Appreciation HLS Fund, Hartford Disciplined Equity HLS Fund, Hartford Global Leaders HLS Fund, Hartford High Yield HLS Fund, Hartford Index HLS Fund, Hartford International Opportunities HLS Fund, Hartford Money Market HLS Fund and Hartford Stock HLS Fund, HL provides administrative services to the Funds 130 - -------------------------------------------------------------------------------- and receives monthly compensation at the annual rate of 0.20% of each Fund's average daily net assets. The Funds assume and pay certain other expenses (including, but not limited to, accounting, custodian, state taxes and directors' fees). Directors' fees represent remuneration paid or accrued to directors not affiliated with HL or any other related company. Accounting Services Agreement -- Under the Fund Accounting Agreement between HL and the following Funds, Hartford Bond HLS Fund, Hartford Capital Appreciation HLS Fund, Hartford Disciplined Equity HLS Fund, Hartford Global Leaders HLS Fund, Hartford High Yield HLS Fund, Hartford Index HLS Fund, Hartford International Opportunities HLS Fund, Hartford Money Market HLS Fund and Hartford Stock HLS Fund, HL provides accounting services to the Funds and receives monthly compensation at the annual rate of 0.02% of each Fund's average daily net assets. c) Operating Expenses -- Allocable expenses of the Funds are charged to each Fund based on the ratio of the average net assets of each fund to the combined average net assets of the Funds. Non-allocable expenses are charged to each fund based on specific identification. d) Expense Offset -- The Funds have asked its investment advisors to direct certain security trades, subject to obtaining the best price and execution, to brokers who have agreed to rebate to the Funds part of the commissions generated. Such rebates are used solely to reduce the Funds' operating expenses. The Funds, custodian bank has also agreed to reduce its fees when the Funds maintain cash on deposit in the non-interest-bearing custody account. For the year ended December 31, 2003, directed brokerage and custodian fee offset arrangements reduced expenses by $202 and $82, respectively. The total expense reduction represented an effective annual rate of 0.00% of the Funds' average net assets. e) Distribution Plan for Class IB shares -- The following Funds, Hartford Advisers HLS Fund, Hartford Bond HLS Fund, Hartford Capital Appreciation HLS Fund, Hartford Disciplined Equity HLS Fund, Hartford Global Leaders HLS Fund Hartford Growth Opportunities HLS Fund, Hartford High Yield HLS Fund, Hartford Index HLS Fund, Hartford International Opportunities HLS Fund, Hartford Money Market HLS Fund, Hartford SmallCap Growth HLS Fund, Hartford Small Cap Value HLS Fund, Hartford Stock HLS Fund, Hartford U.S. Government Securities HLS Fund and Hartford Value Opportunities HLS Fund have adopted a Distribution Plan pursuant to Rule 12b-1 under the 1940 Act for the Class IB shares. Pursuant to the Distribution Plan, each Fund compensates the Distributor, Hartford Securities Distribution Company, Inc. (a wholly owned, ultimate subsidiary of Hartford Life, Inc.) from assets attributable to the Class IB shares for services rendered and expenses borne in connection with activities primarily intended to result in the sale of the Class IB shares. The Distributions Plan provides that each Fund may pay annually up to 0.25% of the average daily net assets of a Fund attributable to its Class IB shares for activity primarily intended to result in the sale of Class IB shares. Under the terms of the Distribution Plan and the principal underwriting agreement, each Fund is authorized to make payments monthly to the Distributor which may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class IB shares for such entities' fees or expenses incurred or paid in that regard. 4. AFFILIATE HOLDINGS: As of December 31, 2003, HL Advisors and HL held direct interests in shares as follows: <Table> <Caption> PERCENT OF PERCENT OF TOTAL TOTAL FUND CLASS IA SHARES CLASS IB SHARES ---- -------- ---------- -------- ---------- Hartford Capital Opportunities HLS Fund................... 298 10.84% -- --% Hartford SmallCap Value HLS Fund.......................... -- -- S-- S-- </Table> 131 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- The shares held by HL Advisors and HL, at December 31, 2003, have a market value of $3,224 and $1,930, respectively. HL Advisors and HL received income, in the form of dividends, in the amounts of $5 and $11, respectively, for the twelve months ended December 31, 2003. @@ Due to the presentation of the financial statements in thousands, the number of shares round to zero. 5. INVESTMENT TRANSACTIONS: For the year ended December 31, 2003, aggregate purchases and sales of investment securities (excludes short-term investments and U.S. government obligations) were as follows: <Table> <Caption> COST OF SALES FUND PURCHASES PROCEEDS ---- ---------- ---------- Hartford Advisers HLS Fund.................................. $3,125,733 $3,030,477 Hartford Blue Chip Stock HLS Fund........................... 45,703 61,170 Hartford Bond HLS Fund...................................... 5,133,903 4,636,117 Hartford Capital Appreciation HLS Fund...................... 7,948,684 7,092,231 Hartford Capital Opportunities HLS Fund..................... 11,618 14,369 Hartford Disciplined Equity HLS Fund........................ 605,772 456,516 Hartford Global Leaders HLS Fund............................ 2,008,240 1,966,897 Hartford Growth Opportunities HLS Fund...................... 900,376 836,145 Hartford High Yield HLS Fund................................ 571,080 199,326 Hartford Index HLS Fund..................................... 137,567 49,415 Hartford International Opportunities HLS Fund.................................................... 1,017,873 1,006,116 Hartford International Stock HLS Fund....................... 35,258 41,986 Hartford LargeCap Growth HLS Fund........................... 65,337 69,569 Hartford MidCap Stock HLS Fund.............................. 35,081 36,803 Hartford Multisector Bond HLS Fund.......................... 43,148 40,561 Hartford SmallCap Growth HLS Fund........................... 380,427 268,232 Hartford SmallCap Value HLS Fund............................ 45,851 59,197 Hartford Stock HLS Fund..................................... 2,115,707 2,169,020 Hartford U.S. Government Securities HLS Fund................ 2,279,247 2,039,430 Hartford Value Opportunities HLS Fund....................... 111,331 59,747 </Table> 6. RECLASSIFICATION OF CAPITAL ACCOUNTS: In accordance with AICPA Statement of Position 93-2, Determination, Disclosure, and Financial Statement Presentation of Income, Capital Gain, and Return of Capital Distributions by Investment Companies, the Funds have recorded several reclassifications in their capital accounts. These reclassifications had no impact on the net asset value per share of the Funds and are designed generally to present undistributed income and realized gains on 132 - -------------------------------------------------------------------------------- a tax basis which is considered to be more informative to the shareholder. As of December 31, 2003, the Funds recorded the following reclassifications to increase (decrease) the accounts listed below. <Table> <Caption> ACCUMULATED ACCUMULATED NET REALIZED NET INVESTMENT GAIN (LOSS) ON PAID IN FUND INCOME (LOSS) INVESTMENTS CAPITAL ---- -------------- -------------- ------- Hartford Advisers HLS Fund................................. $ 6,196 $ (3,375) $(2,821) Hartford Blue Chip Stock HLS Fund.......................... (16) 16 -- Hartford Bond HLS Fund..................................... 42,793 (48,413) 5,620 Hartford Capital Appreciation HLS Fund..................... (9,067) 9,067 -- Hartford Capital Opportunities HLS Fund.................... -- 1 (1) Hartford Disciplined Equity HLS Fund....................... (11) (9,580) 9,591 Hartford Global Leaders HLS Fund........................... 222 (2,706) 2,484 Hartford Growth Opportunities HLS Fund..................... 344 69 (413) Hartford High Yield HLS Fund............................... 1,968 (179) (1,789) Hartford Index HLS Fund.................................... (21) 21 -- Hartford International Opportunities HLS Fund.............. (774) (9,393) 10,167 Hartford International Stock HLS Fund...................... (134) 134 -- Hartford LargeCap Growth HLS Fund.......................... 1 (1) -- Hartford Multisector Bond HLS Fund......................... 98 (98) -- Hartford SmallCap Growth HLS Fund.......................... 113 52 (165) Hartford SmallCap Value HLS Fund........................... (201) 201 -- Hartford Stock HLS Fund.................................... (484) (1,102) 1,586 Hartford U.S. Government Securities HLS Fund............... 5,041 (5,041) -- Hartford Value Opportunities HLS Fund...................... (6) 6 -- </Table> 133 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- TAX COST AND UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS: As of December 31, 2003, the aggregate gross unrealized appreciation and (depreciation) of all investments, based on cost for federal income tax purposes, was as follows: <Table> <Caption> AGGREGATE AGGREGATE GROSS GROSS NET UNREALIZED UNREALIZED UNREALIZED APPRECIATION/ FUND TAX COST APPRECIATION (DEPRECIATION) (DEPRECIATION) ---- ----------- ------------ -------------- -------------- Hartford Advisers HLS Fund.................. $12,065,665 $1,457,050 $(326,578) $1,130,472 Hartford Blue Chip Stock HLS Fund........... 165,766 28,925 (12,192) 16,733 Hartford Bond HLS Fund...................... 3,726,899 75,009 (16,335) 58,674 Hartford Capital Appreciation HLS Fund...... 8,876,631 2,143,083 (100,320) 2,042,763 Hartford Capital Opportunities HLS Fund..... 16,084 2,156 (515) 1,641 Hartford Disciplined Equity HLS Fund........ 747,249 113,954 (17,995) 95,959 Hartford Global Leaders HLS Fund............ 808,360 117,868 (2,405) 115,463 Hartford Growth Opportunities HLS Fund...... 674,043 134,173 (6,616) 127,557 Hartford High Yield HLS Fund................ 770,110 48,569 (10,724) 37,845 Hartford Index HLS Fund..................... 1,997,362 452,189 (296,152) 156,037 Hartford International Opportunities HLS Fund...................................... 849,332 140,720 (2,271) 138,449 Hartford International Stock HLS Fund....... 82,921 17,761 (643) 17,118 Hartford LargeCap Growth HLS Fund........... 57,704 1,957 (1,156) 801 Hartford MidCap Stock HLS Fund.............. 45,651 10,950 (413) 10,537 Hartford Multisector Bond HLS Fund.......... 28,766 989 (223) 766 Hartford SmallCap Growth HLS Fund........... 430,207 66,002 (15,533) 50,469 Hartford SmallCap Value HLS Fund............ 86,795 20,740 (1,441) 19,299 Hartford Stock HLS Fund..................... 6,071,269 894,686 (353,506) 541,180 Hartford U.S. Government Securities HLS Fund...................................... 916,061 7,267 (2,235) 5,032 Hartford Value Opportunities HLS Fund....... 171,322 33,784 (6,723) 27,061 </Table> 7. CAPITAL LOSS CARRYFORWARD: At December 31, 2003, the following Funds had capital loss carryforwards for U.S. Federal Tax purposes of approximately: <Table> <Caption> YEAR OF FUND AMOUNT EXPIRATION ---- ---------- ---------- Hartford Advisers HLS Fund.................................. $ 433,487 2011 Hartford Advisers HLS Fund.................................. 139,365 2010 Hartford Advisers HLS Fund.................................. 291,958 2009 Hartford Advisers HLS Fund.................................. 1,126 2008 Hartford Blue Chip Stock HLS Fund........................... 7,804 2011 Hartford Blue Chip Stock HLS Fund........................... 8,951 2010 Hartford Blue Chip Stock HLS Fund........................... 11,958 2009 Hartford Bond HLS Fund...................................... 654 2009 Hartford Bond HLS Fund...................................... 438 2007 Hartford Capital Appreciation HLS Fund...................... 1,156,841 2010 Hartford Capital Appreciation HLS Fund...................... 123,844 2009 Hartford Capital Opportunities HLS Fund..................... 78 2011 Hartford Capital Opportunities HLS Fund..................... 7,123 2010 Hartford Capital Opportunities HLS Fund..................... 4,664 2009 Hartford Capital Opportunities HLS Fund..................... 37 2008 Hartford Disciplined Equity HLS Fund........................ 21,177 2011 Hartford Disciplined Equity HLS Fund........................ 97,169 2010 Hartford Disciplined Equity HLS Fund........................ 48,818 2009 </Table> 134 - -------------------------------------------------------------------------------- <Table> <Caption> YEAR OF FUND AMOUNT EXPIRATION ---- ---------- ---------- Hartford Disciplined Equity HLS Fund........................ 8,175 2008 Hartford Disciplined Equity HLS Fund........................ 201 2007 Hartford Global Leaders HLS Fund............................ 115,095 2010 Hartford Global Leaders HLS Fund............................ 66,973 2009 Hartford Growth Opportunities HLS Fund...................... 128,757 2010 Hartford Growth Opportunities HLS Fund...................... 11,879 2009 Hartford High Yield HLS Fund................................ 21,813 2011 Hartford High Yield HLS Fund................................ 8,996 2010 Hartford High Yield HLS Fund................................ 2,700 2009 Hartford High Yield HLS Fund................................ 5,611 2008 Hartford High Yield HLS Fund................................ 5,355 2007 Hartford High Yield HLS Fund................................ 9,320 2006 Hartford High Yield HLS Fund................................ 1,581 2005 Hartford International Opportunities HLS Fund............... 134,281 2010 Hartford International Opportunities HLS Fund............... 215,001 2009 Hartford International Opportunities HLS Fund............... 3,922 2008 Hartford International Stock HLS Fund....................... 3,549 2011 Hartford International Stock HLS Fund....................... 14,168 2010 Hartford International Stock HLS Fund....................... 19,256 2009 Hartford LargeCap Growth HLS Fund........................... 1,527 2011 Hartford LargeCap Growth HLS Fund........................... 17,450 2010 Hartford LargeCap Growth HLS Fund........................... 23,010 2009 Hartford MidCap Stock HLS Fund.............................. 3,973 2010 Hartford MidCap Stock HLS Fund.............................. 2,236 2009 Hartford Multisector Bond HLS Fund.......................... 1,377 2010 Hartford Multisector Bond HLS Fund.......................... 180 2009 Hartford Multisector Bond HLS Fund.......................... 52 2008 Hartford SmallCap Growth HLS Fund........................... 13,310 2010 Hartford SmallCap Growth HLS Fund........................... 63,002 2009 Hartford Stock HLS Fund..................................... 503,997 2011 Hartford Stock HLS Fund..................................... 226,152 2010 Hartford Stock HLS Fund..................................... 287,769 2009 Hartford Stock HLS Fund..................................... 622 2008 Hartford U.S. Government Securities HLS Fund................ 1,398 2008 Hartford U.S. Government Securities HLS Fund................ 2,513 2007 Hartford U.S. Government Securities HLS Fund................ 154 2004 Hartford Value Opportunities HLS Fund....................... 12,080 2010 </Table> Based on certain provisions in the Internal Revenue Code, various limitations regarding the future utilization of the Hartford Advisers HLS Fund, Hartford Bond HLS Fund, Hartford Disciplined Equity HLS Fund, Hartford Global Leaders HLS Fund, Hartford High Yield HLS Fund, Hartford International Opportunities HLS Fund and Hartford Stock HLS Fund carryforwards may apply. 135 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- For the fiscal year ended December 31, 2003 the following Funds have elected to defer losses occurring between November 1, 2003 and December 31, 2003 as follows: <Table> <Caption> CAPITAL LOSS CURRENCY LOSS FUND DEFERRED DEFERRED ---- ------------ ------------- Hartford Advisers HLS Fund.................................. $17,761 $ -- Hartford Blue Chip Stock HLS Fund........................... 12 -- Hartford Bond HLS Fund...................................... 15,260 -- Hartford Growth Opportunities HLS Fund...................... -- 14 Hartford High Yield HLS Fund................................ 1,810 -- Hartford International Opportunities HLS Fund............... -- -- Hartford International Stock HLS Fund....................... -- -- Hartford Multisector Bond HLS Fund.......................... 7 -- Hartford Stock HLS Fund..................................... 5,224 -- Hartford U.S. Government Securities HLS Fund................ 1,786 -- </Table> 8. DISTRIBUTION TO SHAREHOLDERS: The tax character of distributions paid during 2003 was as follows: <Table> <Caption> ORDINARY LONG-TERM RETURN FUND INCOME CAPITAL GAIN OF CAPITAL ---- -------- ------------ ---------- Hartford Advisers HLS Fund.................................. $256,741 $ -- $ -- Hartford Blue Chip Stock HLS Fund........................... 58 -- -- Hartford Bond HLS Fund...................................... 128,941 6,157 -- Hartford Capital Appreciation HLS Fund...................... 49,667 -- -- Hartford Capital Opportunities HLS Fund..................... 58 -- -- Hartford Disciplined Equity HLS Fund........................ 8,233 -- -- Hartford Global Leaders HLS Fund............................ 3,122 -- -- Hartford High Yield HLS Fund................................ 18,851 -- -- Hartford Index HLS Fund..................................... 25,680 5,727 -- Hartford International Opportunities HLS Fund............... 7,059 -- -- Hartford International Stock HLS Fund....................... 2,047 -- -- Hartford MidCap Stock HLS Fund.............................. 74 -- -- Hartford Money Market HLS Fund.............................. 15,989 -- -- Hartford Multisector Bond HLS Fund.......................... 1,598 -- -- Hartford SmallCap Value HLS Fund............................ 437 1,047 -- Hartford Stock HLS Fund..................................... 69,003 -- -- Hartford U.S. Government Securities HLS Fund................ 13,061 -- -- Hartford Value Opportunities HLS Fund....................... 618 -- -- </Table> 136 - -------------------------------------------------------------------------------- The tax character of distributions paid during 2002 was as follows: <Table> <Caption> ORDINARY LONG-TERM RETURN FUND INCOME CAPITAL GAIN OF CAPITAL ---- -------- ------------ ---------- Hartford Advisers HLS Fund.................................. $328,556 $ -- $-- Hartford Bond HLS Fund...................................... 95,011 9,630 -- Hartford Capital Appreciation HLS Fund...................... 45,846 -- -- Hartford Global Leaders HLS Fund............................ 5,899 -- -- Hartford Growth and Income HLS Fund......................... 2,255 -- -- Hartford High Yield HLS Fund................................ 11,701 -- -- Hartford Index HLS Fund..................................... 20,349 73,521 -- Hartford International Opportunities HLS Fund............... 15,967 -- -- Hartford International Stock HLS Fund....................... 905 -- -- Hartford Money Market HLS Fund.............................. 32,227 -- -- Hartford Multisector Bond HLS Fund.......................... 1,809 -- -- Hartford SmallCap Value HLS Fund............................ 7,251 4,263 -- Hartford Stock HLS Fund..................................... 61,412 -- -- Hartford U.S. Government Securities HLS Fund................ 8,732 -- -- Hartford Value Opportunities HLS Fund....................... 1,166 2,051 -- </Table> As of December 31, 2003, the components of distributable earnings on a tax basis were as follows: <Table> <Caption> UNDISTRIBUTED UNDISTRIBUTED UNDISTRIBUTED UNREALIZED ORDINARY LONG-TERM APPRECIATION FUND INCOME CAPITAL GAIN (DEPRECIATION) ---- ------------- ------------- -------------- Hartford Advisers HLS Fund................................ $104,776 $ -- $1,130,472 Hartford Blue Chip Stock HLS Fund......................... 344 -- 16,733 Hartford Bond HLS Fund.................................... 228,190 5,198 58,909 Hartford Capital Appreciation HLS Fund.................... 4,215 -- 2,042,798 Hartford Capital Opportunities HLS Fund................... -- -- 1,641 Hartford Disciplined Equity HLS Fund...................... 421 -- 95,959 Hartford Global Leaders HLS Fund.......................... 1,778 -- 115,483 Hartford Growth Opportunities HLS Fund.................... -- -- 127,563 Hartford High Yield HLS Fund.............................. 35,325 -- 37,893 Hartford Index HLS Fund................................... 3,096 6,030 156,037 Hartford International Opportunities HLS Fund............. 1,143 -- 138,416 Hartford International Stock HLS Fund..................... 281 -- 17,140 Hartford LargeCap Growth HLS Fund......................... 27 -- 801 Hartford MidCap Stock HLS Fund............................ 75 -- 10,537 Hartford Multisector Bond HLS Fund........................ 1,352 -- 764 Hartford SmallCap Growth HLS Fund......................... -- -- 50,469 Hartford SmallCap Value HLS Fund.......................... 1,728 -- 19,299 Hartford Stock HLS Fund................................... 2,303 -- 541,181 Hartford U.S. Government Securities HLS Fund.............. 26,838 -- 5,032 Hartford Value Opportunities HLS Fund..................... 733 -- 27,049 </Table> 137 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- 9. CAPITAL SHARE TRANSACTIONS: The following information is for the year ended December 31, 2003: <Table> <Caption> HARTFORD ADVISERS HARTFORD BLUE CHIP STOCK HARTFORD BOND HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold.................... 48,476 $ 1,008,884 661 $ 9,261 99,153 $ 1,205,185 Shares issued on reinvestment of distributions............. 10,781 233,680 4 58 8,964 108,671 Shares redeemed................ (74,454) (1,526,868) (1,776) (24,481) (98,394) (1,193,335) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ (15,197) $ (284,304) (1,111) $ (15,162) 9,723 $ 120,521 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD CAPITAL HARTFORD CAPITAL APPRECIATION OPPORTUNITIES HARTFORD DISCIPLINED HLS FUND HLS FUND EQUITY HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold.................... 30,209 $ 1,120,299 334 $ 1,870 39,406 $ 351,751 Shares issued in merger........ -- -- -- -- 3,434 29,606 Shares issued on reinvestment of distributions............. 995 44,256 8 51 674 7,093 Shares redeemed................ (29,606) (1,044,806) (808) (4,676) (34,666) (300,881) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ 1,598 $ 119,749 (466) $ (2,755) 8,848 $ 87,569 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD GROWTH HARTFORD GLOBAL LEADERS OPPORTUNITIES HARTFORD HIGH YIELD HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold.................... 54,563 $ 690,769 7,982 $ 166,767 116,859 $ 1,108,738 Shares issued in merger........ 953 11,029 -- -- -- -- Shares issued on reinvestment of distributions............. 192 2,799 -- -- 1,397 13,145 Shares redeemed................ (56,200) (708,878) (7,578) (154,328) (93,974) (893,732) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ (492) $ (4,281) 404 $ 12,439 24,282 $ 228,151 =========== =========== ========== =========== ========== =========== </Table> 138 - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD INTERNATIONAL HARTFORD INDEX OPPORTUNITIES HARTFORD INTERNATIONAL HLS FUND HLS FUND STOCK HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold.................... 10,924 $ 286,041 192,953 $ 1,515,610 1,443 $ 13,444 Shares issued in merger........ -- -- 3,008 22,447 -- -- Shares issued on reinvestment of distributions............. 1,001 28,912 724 6,584 188 2,047 Shares redeemed................ (12,780) (327,616) (199,659) (1,571,908) (2,344) (22,339) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ (855) $ (12,663) (2,974) $ (27,267) (713) $ (6,848) =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD LARGECAP HARTFORD MIDCAP HARTFORD MONEY MARKET GROWTH HLS FUND STOCK HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold.................... 621 $ 4,766 840 $ 8,128 5,510,526 $ 5,510,526 Shares issued on reinvestment of distributions............. -- -- 8 74 14,649 14,649 Shares redeemed................ (1,254) (9,437) (876) (8,127) (6,235,192) (6,235,192) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ (633) $ (4,671) (28) $ 75 (710,017) $ (710,017) =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD MULTISECTOR HARTFORD SMALLCAP HARTFORD SMALLCAP VALUE BOND HLS FUND GROWTH HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold.................... 613 $ 6,827 32,585 $ 480,810 799 $ 9,751 Shares issued on reinvestment of distributions............. 145 1,598 -- -- 122 1,484 Shares redeemed................ (682) (7,523) (28,587) (418,455) (1,608) (18,855) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ 76 $ 902 3,998 $ 62,355 (687) $ (7,620) =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD VALUE HARTFORD STOCK HARTFORD U.S. GOVERNMENT OPPORTUNITIES HLS FUND SECURITIES HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold.................... 25,647 $ 986,300 54,708 $ 623,417 3,432 $ 44,620 Shares issued in merger........ 406 14,137 -- -- -- -- Shares issued on reinvestment of distributions............. 1,466 64,146 854 9,841 44 550 Shares redeemed................ (35,607) (1,354,602) (62,570) (711,960) (1,417) (16,967) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ (8,088) $ (290,019) (7,008) $ (78,702) 2,059 $ 28,203 =========== =========== ========== =========== ========== =========== </Table> 139 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD CAPITAL HARTFORD ADVISERS HARTFORD BOND APPRECIATION HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold.................... 23,827 $ 495,611 34,505 $ 419,013 18,133 $ 656,957 Shares issued on reinvestment of distributions............. 1,026 23,061 2,191 26,427 123 5,411 Shares redeemed................ (3,527) (72,477) (8,880) (106,829) (1,563) (52,824) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ 21,326 $ 446,195 27,816 $ 338,611 16,693 $ 609,544 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD GROWTH HARTFORD DISCIPLINED HARTFORD GLOBAL LEADERS OPPORTUNITIES EQUITY HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold.................... 8,222 $ 79,512 4,176 $ 54,489 2,313 $ 46,768 Shares issued on reinvestment of distributions............. 108 1,140 18 323 -- -- Shares redeemed................ (1,078) (10,262) (664) (8,289) (94) (1,913) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ 7,252 $ 70,390 3,530 $ 46,523 2,219 $ 44,855 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD INTERNATIONAL HARTFORD HIGH YIELD HARTFORD INDEX OPPORTUNITIES HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold.................... 25,562 $ 238,158 4,144 $ 107,088 12,289 $ 101,772 Shares issued on reinvestment of distributions............. 610 5,706 87 2,495 41 477 Shares redeemed................ (6,934) (63,949) (529) (13,564) (8,256) (68,050) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ 19,238 $ 179,915 3,702 $ 96,019 4,074 $ 34,199 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD MONEY MARKET HARTFORD SMALLCAP HARTFORD STOCK HLS FUND GROWTH HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold.................... 289,678 $ 289,678 3,970 $ 58,377 5,265 $ 203,385 Shares issued on reinvestment of distributions............. 1,341 1,341 -- -- 111 4,863 Shares redeemed................ (312,003) (312,003) (331) (5,296) (1,043) (39,423) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ (20,984) $ (20,984) 3,639 $ 53,081 4,333 $ 168,825 =========== =========== ========== =========== ========== =========== </Table> 140 - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD VALUE HARTFORD U.S. GOVERNMENT OPPORTUNITIES SECURITIES HLS FUND HLS FUND ------------------------- ------------------------ SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- CLASS IB Shares sold.................... 16,467 $ 188,213 2,033 $ 25,825 Shares issued on reinvestment of distributions............. 280 3,219 5 68 Shares redeemed................ (4,652) (52,624) (195) (2,494) ----------- ----------- ---------- ----------- Net Increase (Decrease)........ 12,095 $ 138,808 1,843 $ 23,399 =========== =========== ========== =========== </Table> The following information is for the year ended December 31, 2002: <Table> <Caption> HARTFORD ADVISERS HARTFORD BLUE CHIP HARTFORD BOND HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold.................... 207,487 $ 503,856 606 $ 8,676 668,428 $ 815,855 Shares issued in merger........ 220,049 488,111 -- -- 77,738 90,378 Shares issued on reinvestment of distributions............. 105,657 310,849 -- -- 83,422 92,931 Shares redeemed................ (878,389) (1,912,142) (2,638) (36,367) (387,997) (493,343) Shares issued in 1 for 10 stock split........................ (4,233,249) -- -- -- (1,614,335) -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ (4,578,445) $ (609,326) (2,032) $ (27,691) (1,172,744) $ 505,821 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD CAPITAL HARTFORD CAPITAL APPRECIATION OPPORTUNITIES HARTFORD DISCIPLINED EQUITY HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ---------------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ------------ ------------- CLASS IA Shares sold.................... 166,965 $ 642,585 700 $ 4,285 156,947 $ 178,241 Shares issued in merger........ -- -- -- -- 186,136 200,110 Shares issued on reinvestment of distributions............. 2,847 43,001 -- -- 2,171 2,112 Shares redeemed................ (395,688) (1,397,883) (767) (4,220) (185,140) (191,489) Shares issued in 1 for 10 stock split........................ (1,774,749) -- -- -- (462,598) -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ (2,000,625) $ (712,297) (67) $ 65 (302,484) $ 188,974 =========== =========== ========== =========== ========== =========== </Table> 141 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD GROWTH HARTFORD GLOBAL LEADERS OPPORTUNITIES HARTFORD HIGH YIELD HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold.................... 453,367 $ 595,753 1,122 $ 20,116 322,884 $ 335,553 Shares issued in merger........ 183,081 253,327 -- -- 50,751 48,048 Shares issued on reinvestment of distributions............. 727 5,462 -- -- 11,823 9,980 Shares redeemed................ (474,221) (656,987) (5,284) (96,713) (299,921) (299,268) Shares issued in 1 for 10 stock split........................ (451,449) -- -- -- (193,755) -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ (288,495) $ 197,555 (4,162) $ (76,597) (108,218) $ 94,313 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD INTERNATIONAL HARTFORD INDEX OPPORTUNITIES HARTFORD INTERNATIONAL HLS FUND HLS FUND STOCK HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold.................... 67,923 $ 229,511 3,291,660 $ 2,907,057 2,189 $ 21,842 Shares issued in merger........ 97,999 293,220 -- -- -- -- Shares issued on in-kind transactions................. -- -- 12,525 *11,716 -- -- Shares issued on reinvestment of distributions............. 28,220 91,135 10,217 15,535 86 905 Shares redeemed................ (156,348) (459,666) (3,352,850) (3,086,177) (3,658) (36,399) Shares issued in 1 for 10 stock split........................ (592,800) -- (865,011) -- -- -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ (555,006) $ 154,200 (903,732) $ (151,869) (1,383) $ (13,652) =========== =========== ========== =========== ========== =========== </Table> * During the year ended December 31, 2002, the Hartford International Opportunities HLS Fund received in-kind subscriptions of securities as noted (including unrealized appreciation (depreciation) of ($547) from a shareholder of an affiliated fund offered by The Hartford in exchange for shares of the Fund noted. <Table> <Caption> HARTFORD LARGECAP HARTFORD MIDCAP STOCK HARTFORD MONEY MARKET GROWTH HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold.................... 606 $ 4,905 1,360 $ 13,314 7,433,161 $ 7,433,161 Shares issued in merger........ -- -- -- -- 122,443 122,443 Shares issued on reinvestment of distributions............. -- -- -- -- 29,756 29,756 Shares redeemed................ (1,711) (13,585) (1,057) (9,401) (7,133,424) (7,133,424) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ (1,105) $ (8,680) 303 $ 3,913 451,936 $ 451,936 =========== =========== ========== =========== ========== =========== </Table> 142 - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD MULTISECTOR HARTFORD SMALLCAP HARTFORD SMALLCAP VALUE HLS FUND GROWTH HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold.................... 769 $ 8,122 11,815 $ 143,723 1,614 $ 20,906 Shares issued on reinvestment of distributions............. 173 1,809 -- -- 846 11,514 Shares redeemed................ (1,103) (11,586) (12,644) (155,849) (2,294) (26,352) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ (161) $ (1,655) (829) $ (12,126) 166 $ 6,068 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD VALUE HARTFORD STOCK HARTFORD U.S. GOVERNMENT OPPORTUNITIES HLS FUND SECURITIES HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold.................... 82,040 $ 368,314 43,979 $ 482,125 1,276 $ 15,454 Shares issued on reinvestment of distributions............. 2,398 58,646 840 8,732 218 3,217 Shares redeemed................ (302,325) (1,250,816) (8,975) (98,361) (2,121) (25,157) Shares issued in 1 for 10 stock split........................ (1,292,904) -- -- -- -- -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ (1,510,791) $ (823,856) 35,844 $ 392,496 (627) $ (6,486) =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD CAPITAL HARTFORD ADVISERS HARTFORD BOND APPRECIATION HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold.................... 127,756 $ 317,874 182,699 $ 240,018 91,808 $ 361,932 Shares issued on reinvestment of distributions............. 5,569 17,707 10,543 11,710 172 2,845 Shares redeemed................ (35,673) (77,330) (25,861) (36,070) (18,914) (64,902) Shares issued in 1 for 10 stock split........................ (284,427) -- (268,394) -- (153,584) -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ (186,775) $ 258,251 (101,013) $ 215,658 (80,518) $ 299,875 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD GROWTH HARTFORD DISCIPLINED EQUITY HARTFORD GLOBAL LEADERS OPPORTUNITIES HLS FUND HLS FUND HLS FUND --------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ------------ ------------ ---------- ----------- ---------- ----------- CLASS IB Shares sold.................... 28,959 $ 34,007 17,083 $ 25,478 329 $ 5,419 Shares issued on reinvestment of distributions............. 148 143 52 437 -- -- Shares redeemed................ (7,355) (7,105) (6,220) (8,125) (6) (97) Shares issued in 1 for 10 stock split........................ (54,940) -- (40,358) -- -- -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ (33,188) $ 27,045 (29,443) $ 17,790 323 $ 5,322 =========== =========== ========== =========== ========== =========== </Table> 143 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD INTERNATIONAL HARTFORD HIGH YIELD HARTFORD INDEX OPPORTUNITIES HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold.................... 60,625 $ 63,346 14,140 $ 46,598 174,550 $ 151,571 Shares issued on reinvestment of distributions............. 2,038 1,713 801 2,735 237 431 Shares redeemed................ (27,423) (31,304) (3,519) 9,635 (161,775) (143,959) Shares issued in 1 for 10 stock split........................ (55,428) -- (22,984) -- (32,948) -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ (20,188) $ 33,755 (11,562) $ 39,698 $ (19,936) $ 8,043 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD MONEY MARKET HARTFORD SMALLCAP HARTFORD STOCK HLS FUND GROWTH HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold.................... 390,278 $ 390,278 672 $ 7,939 30,948 $ 142,796 Shares issued on reinvestment of distributions............. 2,405 2,405 -- -- 106 2,766 Shares redeemed................ (282,898) (282,898) (62) (723) (9,557) (38,041) Shares issued in 1 for 10 stock split........................ -- -- -- -- (70,496) -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ 109,785 $ 109,785 610 $ 7,216 (48,999) $ 107,521 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD VALUE HARTFORD U.S. GOVERNMENT OPPORTUNITIES SECURITIES HLS FUND HLS FUND ------------------------- ------------------------ SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- CLASS IB Shares sold.................... 9,479 $ 104,947 318 $ 3,486 Shares issued on reinvestment of distributions............. -- -- -- -- Shares redeemed................ (587) (6,491) (27) (297) ----------- ----------- ---------- ----------- Net Increase (Decrease)........ 8,892 $ 98,456 291 $ 3,189 =========== =========== ========== =========== </Table> 10. LINE OF CREDIT: The Funds, except for the Hartford Money Market HLS Fund, participate in a $550,000 committed revolving line of credit facility. The facility is to be used for temporary or emergency purposes. The interest rate on borrowings varies depending on the nature of the loan. The facility also requires an eight basis point fee to be paid, to State Street Bank, based on the amount of the commitment, which has not been utilized. During the year ended December 31, 2003, the Funds did not have any borrowings under this facility. 11. REVERSE STOCK SPLITS: a) On November 22, 2002, a reverse stock split was declared for Hartford Advisers HLS Fund, Hartford Bond HLS Fund, Hartford Capital Appreciation HLS Fund, Hartford Index HLS Fund, Hartford International Opportunities HLS Fund and Hartford Stock HLS Fund at a one to ten ratio. 144 - -------------------------------------------------------------------------------- b) On September 17, 1999, a reverse stock split was declared for the Class B shares of certain Funds, using the following reverse split percentages: <Table> <Caption> REVERSE SPLIT FUND PERCENTAGE ---- ------------- Hartford Advisers HLS Fund.................................. 29.67% Hartford Bond HLS Fund...................................... 93.07 Hartford Capital Appreciation HLS Fund...................... 15.42 Hartford International Opportunities HLS Fund............... 71.63 Hartford Stock HLS Fund..................................... 9.27 </Table> 12. FUND MERGERS REORGANIZATION OF CERTAIN SERIES OF HARTFORD HLS SERIES FUND II, INC. IN 2003 At a special meeting of shareholders, held on January 15, 2003, shareholders of Hartford American Leaders HLS Fund, Hartford Blue Chip Stock II HLS Fund, Hartford Global Equity HLS Fund, Hartford International Stock II HLS Fund and Hartford Investors Growth HLS Fund (each a "Target Fund") approved a proposed Agreement and Plan of Reorganization between Hartford HLS Series Fund II, Inc. and the Hartford Series Fund, Inc. (the "Plan"). Hartford American Leaders HLS Fund merged into Hartford Stock HLS Fund Hartford Blue Chip Stock II HLS Fund merged into Hartford Disciplined Equity HLS Fund Hartford Global Equity HLS Fund merged into Hartford Global Leaders HLS Fund Hartford International Stock II HLS Fund merged into Hartford International Opportunities HLS Fund Hartford Investors Growth HLS Fund merged into Hartford Disciplined Equity HLS Fund Under the terms of the Plan, and pursuant to the approval by shareholders of each Target Fund, the assets of each Target Fund were acquired by the corresponding Acquiring Fund on January 24, 2003. Each Acquiring Fund acquired the respective Target Fund's assets in exchange for the Acquiring Fund's shares, which were distributed pro rata by each Target Fund to the holders of its shares on January 24, 2003, in complete liquidation of the Target Fund. The mergers were accomplished by tax free exchanges as detailed below: <Table> <Caption> HARTFORD GLOBAL LEADERS HLS FUND CLASS IA CLASS IB -------------------------------- ---------- -------- Net assets of Hartford Global Equity HLS Fund on January 24, 2003...................................................... $ 11,029 $ -- Hartford Global Equity HLS Fund shares exchanged............ 1,498 -- Hartford Global Leaders HLS Fund shares issued.............. 953 -- Net assets of Hartford Global Leaders HLS Fund immediately before the merger......................................... $ 574,009 $ 57,372 Net assets of Hartford Global Leaders HLS Fund immediately after the merger.......................................... $ 585,038 $ 57,372 </Table> <Table> <Caption> HARTFORD DISCIPLINED EQUITY HLS FUND CLASS IA CLASS IB ------------------------------------ ---------- -------- Net assets of Hartford Blue Chip Stock II HLS Fund on January 24, 2003.......................................... $ 15,890 $ -- Hartford Blue Chip Stock II HLS Fund shares exchanged....... 3,107 -- Hartford Disciplined Equity HLS Fund shares issued.......... 1,843 -- Net assets of Hartford Investors Growth HLS Fund on January 24, 2003.................................................. $ 13,716 $ -- Hartford Investors Growth HLS Fund shares exchanged......... 2,740 -- Hartford Disciplined Equity HLS Fund shares issued.......... 1,591 -- Net assets of Hartford Disciplined Equity HLS Fund immediately before the merger............................. $ 454,370 $ 60,268 Net assets of Hartford Growth and Income HLS Fund immediately after the merger.............................. $ 483,976 $ 60,268 </Table> 145 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD INTERNATIONAL OPPORTUNITIES HLS FUND CLASS IA CLASS IB --------------------------------------------- ---------- -------- Net Assets of Hartford International Stock II HLS Fund on January 24, 2003.......................................... $ 22,447 $ -- Hartford International Stock II HLS Fund shares exchanged... 3,304 -- Hartford International Opportunities HLS Fund shares issued.................................................... 3,008 -- Net assets of Hartford International Opportunities HLS Fund immediately before the merger............................. $ 684,409 $ 27,363 Net assets of Hartford International Opportunities HLS Fund immediately after the merger.............................. $ 706,856 $ 27,363 </Table> <Table> <Caption> HARTFORD STOCK HLS FUND CLASS IA CLASS IB ----------------------- ---------- -------- Net assets of Hartford American Leaders HLS Fund on January 24, 2003.................................................. $ 14,137 $ -- Hartford American Leaders HLS Fund shares exchanged......... 1,787 -- Hartford Stock HLS Fund shares issued....................... 406 -- Net assets of Hartford Stock HLS Fund immediately before the merger.................................................... $4,971,437 $298,456 Net assets of Hartford Stock HLS Fund immediately after the merger.................................................... $4,985,574 $298,456 </Table> The Hartford American Leaders HLS Fund, Hartford Blue Chip Stock II HLS Fund, Hartford Global Equity HLS Fund, Hartford International Stock II and Hartford Investors Growth HLS Fund had the following unrealized appreciation (depreciation), accumulated net realized gains (losses) and capital stock as of January 24, 2003: <Table> <Caption> UNREALIZED ACCUMULATED APPRECIATION NET REALIZED FUND (DEPRECIATION) (LOSSES) CAPITAL STOCK ---- -------------- ------------ ------------- Hartford American Leaders HLS Fund........................ $(2,855) $ (35) $18,579 Hartford Blue Chip Stock II HLS Fund...................... (4,122) (70) 28,311 Hartford Global Equity HLS Fund........................... (1,039) (37) 14,557 Hartford International Stock II........................... (8,812) (147) 42,026 Hartford Investors Growth HLS Fund........................ (453) (16) 24,976 </Table> REORGANIZATION OF CERTAIN SERIES OF HARTFORD HLS SERIES FUND II, INC. At a special meeting of shareholders, held on April 29, 2002, shareholders of Fortis Asset Allocation Series, Fortis Global Growth Series, Fortis Growth & Income Series, Fortis High Yield Series, Fortis Diversified Income Series, Fortis S&P 500 Index Series and Fortis Money Market Series (each a "Fortis Fund") approved a proposed Agreement and Plan of Reorganization between Hartford HLS Series Fund II, Inc. and the Hartford HLS Mutual Funds (the "Plan"). Fortis Asset Allocation Series merged into Hartford Advisers HLS Fund, Inc. Fortis Global Growth Series merged into Hartford Global Leaders HLS Fund Fortis Growth & Income Series merged into Hartford Disciplined Equity HLS Fund Fortis High Yield Series merged into Hartford High Yield HLS Fund Fortis Diversified Income Series merged into Hartford Bond HLS Fund, Inc. Fortis S&P 500 Index Series merged into Hartford Index HLS Fund, Inc. Fortis Money Market Series merged into Hartford Money Market HLS Fund, Inc. 146 - -------------------------------------------------------------------------------- Under the terms of the Plan, and pursuant to the approval by shareholders of each Fortis Fund, the assets of each Fortis Fund were acquired by a corresponding series of the Hartford HLS Mutual Funds (the "Hartford Fund") on April 30, 2002. Each Hartford Fund acquired the Fortis Fund's assets in exchange for the Hartford Fund's shares, which were distributed pro rata by each Fortis Fund to the holders of its shares on April 30, 2002, in complete liquidation of the Fortis Fund. The mergers were accomplished by tax free exchanges as detailed below: <Table> <Caption> HARTFORD ADVISERS HLS FUND CLASS IA CLASS IB -------------------------- ----------- -------- Net assets of Fortis Asset Allocation on April 30, 2002..... $ 488,111 $ -- Fortis Asset Allocation shares exchanged.................... 34,477 -- Hartford Advisers shares issued............................. 220,049 -- Net assets of Hartford Advisers immediately before the merger.................................................... $11,086,683 $588,603 Net assets of Hartford Advisers immediately after the merger.................................................... $11,574,794 $588,603 </Table> <Table> <Caption> HARTFORD GLOBAL LEADERS HLS FUND CLASS IA CLASS IB -------------------------------- ----------- -------- Net assets of Fortis Global Growth on April 30, 2002........ $ 253,327 $ -- Fortis Global Growth shares exchanged....................... 17,918 -- Hartford Global Leaders shares issued....................... 183,081 -- Net assets of Hartford Global Leaders immediately before the merger.................................................... $ 469,286 $ 52,090 Net assets of Hartford Global Leaders immediately after the merger.................................................... $ 722,613 $ 52,090 </Table> <Table> <Caption> HARTFORD DISCIPLINED EQUITY HLS FUND CLASS IA CLASS IB ------------------------------------ ----------- -------- Net assets of Fortis Growth & Income on April 30, 2002...... $ 200,110 $ -- Fortis Growth & Income shares exchanged..................... 15,260 -- Hartford Disciplined Equity shares issued................... 186,136 -- Net assets of Hartford Disciplined Equity immediately before the merger................................................ $ 395,598 $ 51,483 Net assets of Hartford Disciplined Equity immediately after the merger................................................ $ 595,708 $ 51,483 </Table> <Table> <Caption> HARTFORD HIGH YIELD HLS FUND CLASS IA CLASS IB ---------------------------- ----------- -------- Net assets of Fortis High Yield on April 30, 2002........... $ 48,048 $ -- Fortis High Yield shares exchanged.......................... 8,528 -- Hartford High Yield shares issued........................... 50,751 -- Net assets of Hartford High Yield immediately before the merger.................................................... $ 142,974 $ 34,629 Net assets of Hartford High Yield immediately after the merger.................................................... $ 191,022 $ 34,629 </Table> <Table> <Caption> HARTFORD BOND HLS FUND CLASS IA CLASS IB ---------------------- ----------- -------- Net assets of Fortis Diversified Income on April 30, 2002... $ 90,378 $ -- Fortis Diversified Income shares exchanged.................. 9,225 -- Hartford Bond shares issued................................. 77,738 -- Net assets of Hartford Bond immediately before the merger... $ 1,582,247 $194,002 Net assets of Hartford Bond immediately after the merger.... $ 1,672,625 $194,002 </Table> <Table> <Caption> HARTFORD INDEX HLS FUND CLASS IA CLASS IB ----------------------- ----------- -------- Net assets of Fortis S&P 500 on April 30, 2002.............. $ 293,220 $ -- Fortis S&P 500 Index shares exchanged....................... 19,110 -- Hartford Index shares issued................................ 97,999 -- Net assets of Hartford Index immediately before the merger.................................................... $ 1,846,941 $ 54,976 Net assets of Hartford Index immediately after the merger... $ 2,140,161 $ 54,976 </Table> 147 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD MONEY MARKET HLS FUND CLASS IA CLASS IB ------------------------------ ----------- -------- Net assets of Fortis Money Market on April 30, 2002......... $ 122,443 $ -- Fortis Money Market shares exchanged........................ 11,346 -- Hartford Money Market shares issued......................... 122,443 -- Net assets of Hartford Money Market immediately before the merger.................................................... $ 1,794,364 $166,561 Net assets of Hartford Money Market immediately after the merger.................................................... $ 1,916,807 $166,561 </Table> The Fortis Asset Allocation Series, Fortis Global Growth Series, Fortis Growth & Income Series, Fortis High Yield Series, Fortis Diversified Income Series, Fortis S&P 500 Index Series and Fortis Money Market Series had the following unrealized appreciation (depreciation), accumulated net realized gains (losses) and capital stock as of April 30, 2002: <Table> <Caption> UNREALIZED ACCUMULATED APPRECIATION NET REALIZED FUND (DEPRECIATION) (LOSSES) CAPITAL STOCK ---- -------------- ------------ ------------- Fortis Asset Allocation Series............................ $(28,666) $(12,278) $529,055 Fortis Global Growth Series............................... 9,623 (3,966) 247,671 Fortis Growth and Income Series........................... (10,883) (792) 211,785 Fortis High Yield Series.................................. (11,371) (20,858) 80,264 Fortis Diversified Income Series.......................... (3,540) (8,690) 102,606 Fortis S&P 500 Index Series............................... (20,814) -- 293,220 Fortis Money Market Series................................ -- -- 122,443 </Table> 13. FUND MERGERS SUBSEQUENT TO DECEMBER 31, 2003 PROPOSED REORGANIZATION OF HARTFORD MULTISECTOR BOND HLS FUND IN HARTFORD HLS SERIES FUND II, INC. At a meeting held on November 4, 2003, the Boards of Directors of the Hartford Multisector Bond HLS Fund and the Hartford Bond HLS Fund approved, subject to shareholder approval, a reorganization of Hartford Multisector Bond HLS Fund into Hartford Bond HLS Fund. A special meeting of shareholders will be held on April 20, 2004. Shareholders of Hartford Multisector Bond HLS Fund will vote on a proposed Agreement and Plan of Reorganization between Hartford HLS Series Fund II, Inc. and Hartford Series Fund, Inc. Under the terms of the Plan, and pursuant to the approval by shareholders of the Hartford Multisector Bond HLS Fund, the assets of the Hartford Multisector Bond HLS Fund would be acquired by the Hartford Bond HLS Fund on or about April 30, 2004. The Hartford Bond HLS Fund would acquire the Hartford Multisector Bond HLS Fund's assets in exchange for the Hartford Bond HLS Fund's shares, which would be distributed pro rata by the Hartford Multisector Bond HLS Fund to the holders of its shares on April 30, 2004, in complete liquidation of the Hartford Multisector Bond HLS Fund. 148 (This page intentionally left blank) 149 HARTFORD HLS MUTUAL FUNDS FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- <Table> <Caption> -- SELECTED PER-SHARE DATA(4) -- ------------------------------------------------------------------------- NET REALIZED AND NET ASSET NET UNREALIZED TOTAL VALUE AT INVESTMENT GAIN FROM BEGINNING INCOME (LOSS) ON INVESTMENT OF PERIOD (LOSS) INVESTMENTS OPERATIONS --------- ---------- ------------ ---------- HARTFORD ADVISERS HLS FUND For the Year Ended December 31, 2003 Class IA....................... $ 19.59 $ 0.42 $ 3.18 $ 3.60 Class IB....................... 19.72 0.41 3.16 3.57 For the Year Ended December 31, 2002 Class IA....................... 23.44(5) 0.51(5) (4.10)(5) (3.59)(5) Class IB....................... 23.60(5) 0.46(5) (4.10)(5) (3.64)(5) For the Year Ended December 31, 2001 Class IA....................... 26.65(5) 0.64(5) (1.85)(5) (1.21)(5) Class IB....................... 26.63(5) 0.50(5) (1.77)(5) (1.27)(5) For the Year Ended December 31, 2000 Class IA....................... 29.65(5) 0.68(5) (0.88)(5) (0.20)(5) Class IB....................... 29.66(5) 0.74(5) (0.98)(5) (0.24)(5) For the Year Ended December 31, 1999 Class IA....................... 29.85(5) 0.68(5) 2.21(5) 2.89(5) Class IB....................... 35.77(5),(6) 0.61(5),(6) 2.21(5),(6) 2.82(5),(6) HARTFORD BLUE CHIP STOCK HLS FUND For the Year Ended December 31, 2003......................... 12.70 0.03 3.69 3.72 2002........................... 16.80 0.01 (4.11) (4.10) 2001........................... 19.63 -- (2.83) (2.83) 2000........................... 21.93 (0.02) (0.41) (0.43) 1999........................... 18.58 0.02 3.65 3.67 HARTFORD BOND HLS FUND For the Year Ended December 31, 2003 Class IA....................... 11.95 0.36 0.57 0.93 Class IB....................... 11.90 0.40 0.50 0.90 For the Year Ended December 31, 2002 Class IA....................... 11.46(5) 0.56(5) (0.01)(5) 0.55(5) Class IB....................... 11.43(5) 0.46(5) 0.07(5) 0.53(5) For the Year Ended December 31, 2001 Class IA....................... 11.08(5) 0.46(5) 0.48(5) 0.94(5) Class IB....................... 11.07(5) 0.41(5) 0.50(5) 0.91(5) For the Year Ended December 31, 2000 Class IA....................... 9.94(5) 0.69(5) 0.50(5) 1.19(5) Class IB....................... 9.95(5) 0.61(5) 0.56(5) 1.17(5) For the Year Ended December 31, 1999 Class IA....................... 10.81(5) 0.62(5) (0.84)(5) (0.22)(5) Class IB....................... 10.83(5),(6) 0.61(5),(6) (0.84)(5),(6) (0.23)(5),(6) HARTFORD CAPITAL APPRECIATION HLS FUND For the Year Ended December 31, 2003 Class IA....................... 31.70 0.26 13.17 13.43 Class IB....................... 31.63 0.19 13.10 13.29 For the Year Ended December 31, 2002 Class IA....................... 39.75(5) 0.15(5) (8.01)(5) (7.86)(5) Class IB....................... 39.68(5) 0.12(5) (8.03)(5) (7.91)(5) For the Year Ended December 31, 2001 Class IA....................... 59.26(5) 0.21(5) (3.36)(5) (3.15)(5) Class IB....................... 59.23(5) 0.06(5) (3.29)(5) (3.23)(5) For the Year Ended December 31, 2000 Class IA....................... 60.95(5) 0.41(5) 7.57(5) 7.98(5) Class IB....................... 60.98(5) (0.77)(5) 8.64(5) 7.87(5) For the Year Ended December 31, 1999 Class IA....................... 47.59(5) 0.23(5) 16.43(5) 16.66(5) Class IB....................... 64.37(5),(6) 1.50(5),(6) 15.03(5),(6) 16.53(5),(6) HARTFORD CAPITAL OPPORTUNITIES HLS FUND For the Year Ended December 31, 2003......................... 5.09 0.02 1.37 1.39 2002........................... 7.15 -- (2.06) (2.06) 2001........................... 9.37 (0.01) (2.21) (2.22) From inception, May 1, 2000 through December 31, 2000.... 10.61 (0.01) (1.23) (1.24) <Caption> -- SELECTED PER-SHARE DATA(4) -- -------------------------------------------------------------------------- DISTRIBUTIONS DIVIDENDS DIVIDENDS FROM FROM NET IN EXCESS OF NET REALIZED DISTRIBUTIONS INVESTMENT NET INVESTMENT GAINS ON FROM INCOME INCOME INVESTMENTS CAPITAL ---------- -------------- ------------- ------------- HARTFORD ADVISERS HLS FUND For the Year Ended December 31, 2003 Class IA....................... $(0.52) $ -- $ -- $ -- Class IB....................... (0.48) -- -- -- For the Year Ended December 31, 2002 Class IA....................... (0.26)(5) --(5) --(5) --(5) Class IB....................... (0.24)(5) --(5) --(5) --(5) For the Year Ended December 31, 2001 Class IA....................... (0.73)(5) --(5) (1.27)(5) --(5) Class IB....................... (0.49)(5) --(5) (1.27)(5) --(5) For the Year Ended December 31, 2000 Class IA....................... (0.23)(5) --(5) (2.57)(5) --(5) Class IB....................... (0.22)(5) --(5) (2.57)(5) --(5) For the Year Ended December 31, 1999 Class IA....................... (0.63)(5) --(5) (2.46)(5) --(5) Class IB....................... (0.64)(5),(6) --(5),(6) (8.29)(5),(6) --(5),(6) HARTFORD BLUE CHIP STOCK HLS FUND For the Year Ended December 31, 2003......................... -- -- -- -- 2002........................... -- -- -- -- 2001........................... -- -- -- -- 2000........................... -- -- (1.87) -- 1999........................... (0.02) -- (0.30) -- HARTFORD BOND HLS FUND For the Year Ended December 31, 2003 Class IA....................... (0.50) -- (0.06) -- Class IB....................... (0.49) -- (0.06) -- For the Year Ended December 31, 2002 Class IA....................... (0.05)(5) --(5) (0.01)(5) --(5) Class IB....................... (0.05)(5) --(5) (0.01)(5) --(5) For the Year Ended December 31, 2001 Class IA....................... (0.56)(5) --(5) --(5) --(5) Class IB....................... (0.55)(5) --(5) --(5) --(5) For the Year Ended December 31, 2000 Class IA....................... (0.05)(5) --(5) --(5) --(5) Class IB....................... (0.05)(5) --(5) --(5) --(5) For the Year Ended December 31, 1999 Class IA....................... (0.58)(5) --(5) (0.07)(5) --(5) Class IB....................... (0.57)(5),(6) --(5),(6) (0.08)(5),(6) --(5),(6) HARTFORD CAPITAL APPRECIATION HLS FUND For the Year Ended December 31, 2003 Class IA....................... (0.22) -- -- -- Class IB....................... (0.16) -- -- -- For the Year Ended December 31, 2002 Class IA....................... (0.19)(5) --(5) --(5) --(5) Class IB....................... (0.14)(5) --(5) --(5) --(5) For the Year Ended December 31, 2001 Class IA....................... (0.27)(5) --(5) (16.09)(5) --(5) Class IB....................... (0.23)(5) --(5) (16.09)(5) --(5) For the Year Ended December 31, 2000 Class IA....................... (0.39)(5) --(5) (9.28)(5) --(5) Class IB....................... (0.34)(5) --(5) (9.28)(5) --(5) For the Year Ended December 31, 1999 Class IA....................... (0.18)(5) --(5) (3.12)(5) --(5) Class IB....................... (0.13)(5),(6) --(5),(6) (19.79)(5),(6) --(5),(6) HARTFORD CAPITAL OPPORTUNITIES HLS FUND For the Year Ended December 31, 2003......................... (0.02) -- -- -- 2002........................... -- -- -- -- 2001........................... -- -- -- -- From inception, May 1, 2000 through December 31, 2000.... -- -- -- -- </Table> See Notes to Financial Statements. 150 - -------------------------------------------------------------------------------- <Table> <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - ------------------------------------------------------------------------------------------------ RATIO OF NET INCREASE NET ASSETS EXPENSES (DECREASE) IN NET ASSET AT END OF TO AVERAGE TOTAL NET ASSETS VALUE AT TOTAL PERIOD NET ASSETS DISTRIBUTIONS VALUE END OF PERIOD RETURN(12) (000'S OMITTED) AFTER WAIVERS ------------- ------------- ------------- ---------- --------------- ------------- $ (0.52) $ 3.08 $22.67 18.49% $10,358,449 0.67% (0.48) 3.09 22.81 18.20 1,263,641 0.92 (0.26)(5) (3.85)(5) 19.59(5) (13.79) 9,249,397 0.67 (0.24)(5) (3.88)(5) 19.72(5) (13.99) 672,078 0.90 (2.00)(5) (3.21)(5) 23.44(5) (4.64) 11,836,564 0.66 (1.76)(5) (3.03)(5) 23.60(5) (4.81) 521,205 0.84 (2.80)(5) (3.00)(5) 26.65(5) (0.75) 13,430,507 0.66 (2.79)(5) (3.03)(5) 26.63(5) (0.92) 252,247 0.84 (3.09)(5) (0.20)(5) 29.65(5) 10.59 14,082,895 0.65 (8.93)(5),(6) (6.11)(5),(6) 29.66(5),(6) 10.39 137,318 0.83 -- 3.72 16.42 29.30 182,530 0.90 -- (4.10) 12.70 (24.40) 155,333 0.92 -- (2.83) 16.80 (14.41) 239,597 0.92 (1.87) (2.30) 19.63 (2.47) 293,654 0.92 (0.32) 3.35 21.93 19.88 284,229 0.92 (0.56) 0.37 12.32 7.85 2,332,343 0.50 (0.55) 0.35 12.25 7.58 734,768 0.75 (0.06)(5) 0.49(5) 11.95(5) 10.08 2,145,266 0.51 (0.06)(5) 0.47(5) 11.90(5) 9.83 382,864 0.75 (0.56)(5) 0.38(5) 11.46(5) 8.68 1,549,698 0.51 (0.55)(5) 0.36(5) 11.43(5) 8.49 152,254 0.69 (0.05)(5) 1.14(5) 11.08(5) 11.99 1,033,043 0.52 (0.05)(5) 1.12(5) 11.07(5) 11.79 31,551 0.70 (0.65)(5) (0.87)(5) 9.94(5) (2.02) 978,861 0.52 (0.65)(5),(6) (0.88)(5),(6) 9.95(5),(6) (2.19) 15,818 0.70 (0.22) 13.21 44.91 42.38 8,912,749 0.69 (0.16) 13.13 44.76 42.02 1,579,399 0.94 (0.19)(5) (8.05)(5) 31.70(5) (19.70) 6,240,859 0.69 (0.14)(5) (8.05)(5) 31.63(5) (19.88) 588,013 0.92 (16.36)(5) (19.51)(5) 39.75(5) (6.94) 8,734,600 0.68 (16.32)(5) (19.55)(5) 39.68(5) (7.10) 393,241 0.86 (9.67)(5) (1.69)(5) 59.26(5) 13.22 9,581,897 0.66 (9.62)(5) (1.75)(5) 59.23(5) 13.02 136,058 0.84 (3.30)(5) 13.36(5) 60.95(5) 37.46 7,963,003 0.66 (19.92)(5),(6) (3.39)(5),(6) 60.98(5),(6) 37.21 22,993 0.84 (0.02) 1.37 6.46 27.38 17,794 1.06 -- (2.06) 5.09 (28.85) 16,387 1.05 -- (2.22) 7.15 (23.63) 23,514 1.16 -- (1.24) 9.37 (11.68)(2) 16,162 1.31(1)(8) <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - --- --------------------------------------- RATIO OF RATIO OF NET EXPENSES INVESTMENT TO AVERAGE INCOME PORTFOLIO NET ASSETS TO AVERAGE TURNOVER BEFORE WAIVERS NET ASSETS RATE(7) -------------- ---------- --------- 0.67% 2.03% 48% 0.92 1.78 48 0.67 2.29 47 0.92 2.07 47 0.66 2.51 34 0.91 2.33 34 0.66 2.47 40 0.91 2.29 40 0.66 2.46 38 0.91 2.28 38 0.90 0.22 28 0.92 0.04 37 0.92 (0.01) 47 0.92 (0.09) 52 0.92 0.10 40 0.50 3.74 215 0.75 3.49 215 0.51 5.58 108 0.76 5.34 108 0.51 5.87 185 0.76 5.69 185 0.52 6.54 169 0.77 6.36 169 0.52 6.09 111 0.77 5.91 111 0.69 0.77 94 0.94 0.52 94 0.69 0.64 94 0.94 0.41 94 0.68 0.57 92 0.93 0.39 92 0.66 0.64 108 0.91 0.46 108 0.66 0.46 66 0.91 0.28 66 1.06 0.28 68 1.05 0.04 109 1.16 (0.19) 102 1.38(1)(8) (0.12)(1)(8) 63 </Table> 151 HARTFORD HLS MUTUAL FUNDS FINANCIAL HIGHLIGHTS -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> -- SELECTED PER-SHARE DATA(4) -- ------------------------------------------------------------------- NET REALIZED AND NET ASSET NET UNREALIZED TOTAL DIVIDENDS VALUE AT INVESTMENT GAIN FROM FROM NET BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME --------- ---------- ------------ ---------- ---------- HARTFORD DISCIPLINED EQUITY HLS FUND For the Year Ended December 31, 2003 Class IA....................................... $ 8.80 $ 0.07 $ 2.45 $ 2.52 $(0.12) Class IB....................................... 8.75 0.05 2.43 2.48 (0.09) For the Year Ended December 31, 2002 Class IA....................................... 11.72(5) 0.05(5) (2.97)(5) (2.92)(5) --(5) Class IB....................................... 11.67(5) 0.04(5) (2.96)(5) (2.92)(5) --(5) For the Year Ended December 31, 2001 Class IA....................................... 13.26(5) 0.06(5) (1.10)(5) (1.04)(5) --(5) Class IB....................................... 13.23(5) 0.05(5) (1.11)(5) (1.06)(5) --(5) For the Year Ended December 31, 2000 Class IA....................................... 14.32(5) 0.05(5) (0.85)(5) (0.80)(5) (0.05)(5) Class IB....................................... 14.30(5) (0.08)(5) (0.74)(5) (0.82)(5) (0.04)(5) For the Year Ended December 31, 1999 Class IA....................................... 11.86(5) 0.04(5) 2.55(5) 2.59(5) (0.04)(5) Class IB....................................... 11.85(5) 0.06(5) 2.50(5) 2.56(5) (0.02)(5) HARTFORD GLOBAL LEADERS HLS FUND For the Year Ended December 31, 2003 Class IA....................................... 11.50 0.07 4.02 4.09 (0.06) Class IB....................................... 11.47 0.04 4.00 4.04 (0.04) For the Year Ended December 31, 2002 Class IA....................................... 14.43(5) 0.13(5) (2.95)(5) (2.82)(5) (0.11)(5) Class IB....................................... 14.40(5) 0.12(5) (2.96)(5) (2.84)(5) (0.09)(5) For the Year Ended December 31, 2001 Class IA....................................... 17.59(5) 0.11(5) (3.02)(5) (2.91)(5) (0.08)(5) Class IB....................................... 17.57(5) 0.08(5) (3.02)(5) (2.94)(5) (0.06)(5) For the Year Ended December 31, 2000 Class IA....................................... 19.13(5) 0.08(5) (1.42)(5) (1.34)(5) (0.09)(5) Class IB....................................... 19.12(5) (0.06)(5) (1.30)(5) (1.36)(5) (0.08)(5) For the Year Ended December 31, 1999 Class IA....................................... 12.85(5) 0.03(5) 6.42(5) 6.45(5) (0.03)(5) Class IB....................................... 12.85(5) 0.07(5) 6.34(5) 6.41(5) --(5) HARTFORD GROWTH OPPORTUNITIES HLS FUND For the Year Ended December 31, 2003 Class IA....................................... 16.40 (0.01) 7.18 7.17 -- Class IB....................................... 16.37 (0.01) 7.12 7.11 -- For the Year Ended December 31, 2002 Class IA....................................... 22.66 (0.03) (6.23) (6.26) -- From inception April, 30 2002 through December 31, 2002 Class IB..................................... 21.16 (0.01) (4.78) (4.79) -- For the Year Ended December 31, 2001 Class IA....................................... 40.66 -- (9.21) (9.21) -- For the Year Ended December 31, 2000 Class IA....................................... 45.14 (0.03) 2.99 2.96 -- For the Year Ended December 31, 1999 Class IA....................................... 41.09 (0.05) 17.42 17.37 (0.09) <Caption> -- SELECTED PER-SHARE DATA(4) -- ---------------------------------------------- DISTRIBUTIONS DIVIDENDS FROM IN EXCESS OF NET REALIZED DISTRIBUTIONS NET INVESTMENT GAINS ON FROM INCOME INVESTMENTS CAPITAL -------------- ------------- ------------- HARTFORD DISCIPLINED EQUITY HLS FUND For the Year Ended December 31, 2003 Class IA....................................... $ -- $ -- $ -- Class IB....................................... -- -- -- For the Year Ended December 31, 2002 Class IA....................................... --(5) --(5) --(5) Class IB....................................... --(5) --(5) --(5) For the Year Ended December 31, 2001 Class IA....................................... --(5) (0.50)(5) --(5) Class IB....................................... --(5) (0.50)(5) --(5) For the Year Ended December 31, 2000 Class IA....................................... --(5) (0.21)(5) --(5) Class IB....................................... --(5) (0.21)(5) --(5) For the Year Ended December 31, 1999 Class IA....................................... --(5) (0.09)(5) --(5) Class IB....................................... --(5) (0.09)(5) --(5) HARTFORD GLOBAL LEADERS HLS FUND For the Year Ended December 31, 2003 Class IA....................................... -- -- -- Class IB....................................... -- -- -- For the Year Ended December 31, 2002 Class IA....................................... --(5) --(5) --(5) Class IB....................................... --(5) --(5) --(5) For the Year Ended December 31, 2001 Class IA....................................... --(5) (0.17)(5) --(5) Class IB....................................... --(5) (0.17)(5) --(5) For the Year Ended December 31, 2000 Class IA....................................... --(5) (0.11)(5) --(5) Class IB....................................... --(5) (0.11)(5) --(5) For the Year Ended December 31, 1999 Class IA....................................... --(5) (0.14)(5) --(5) Class IB....................................... --(5) (0.14)(5) --(5) HARTFORD GROWTH OPPORTUNITIES HLS FUND For the Year Ended December 31, 2003 Class IA....................................... -- -- -- Class IB....................................... -- -- -- For the Year Ended December 31, 2002 Class IA....................................... -- -- -- From inception April, 30 2002 through December 31, 2002 Class IB..................................... -- -- -- For the Year Ended December 31, 2001 Class IA....................................... -- (8.79) -- For the Year Ended December 31, 2000 Class IA....................................... -- (7.44) -- For the Year Ended December 31, 1999 Class IA....................................... -- (13.23) -- </Table> See Notes to Financial Statements. 152 - -------------------------------------------------------------------------------- <Table> <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - ------------------------------------------------------------------------------------------------- RATIO OF NET INCREASE NET ASSETS EXPENSES (DECREASE) IN NET ASSET AT END OF TO AVERAGE TOTAL NET ASSETS VALUE AT TOTAL PERIOD NET ASSETS DISTRIBUTIONS VALUE END OF PERIOD RETURN (12) (000'S OMITTED) AFTER WAIVERS ------------- ------------- ------------- ----------- --------------- ------------- $ (0.12) $ 2.40 $11.20 28.82% $ 685,888 0.78% (0.09) 2.39 11.14 28.50 155,810 1.03 --(5) (2.92)(5) 8.80(5) (24.65) 460,807 0.79 --(5) (2.92)(5) 8.75(5) (24.85) 58,930 1.02 (0.50)(5) (1.54)(5) 11.72(5) (8.02) 416,013 0.79 (0.50)(5) (1.56)(5) 11.67(5) (8.18) 46,599 0.97 (0.26)(5) (1.06)(5) 13.26(5) (5.64) 379,905 0.79 (0.25)(5) (1.07)(5) 13.23(5) (5.81) 14,898 0.97 (0.13)(5) 2.46(5) 14.32(5) 21.82 201,857 0.82 (0.11)(5) 2.45(5) 14.30(5) 21.61 14 1.00 (0.06) 4.03 15.53 35.57 728,049 0.80 (0.04) 4.00 15.47 35.24 129,315 1.05 (0.11)(5) (2.93)(5) 11.50(5) (19.51) 544,901 0.81 (0.09)(5) (2.93)(5) 11.47(5) (19.70) 55,421 1.03 (0.25)(5) (3.16)(5) 14.43(5) (16.58) 484,661 0.81 (0.23)(5) (3.17)(5) 14.40(5) (16.73) 49,356 0.99 (0.20)(5) (1.54)(5) 17.59(5) (7.06) 572,517 0.81 (0.19)(5) (1.55)(5) 17.57(5) (7.22) 25,869 0.99 (0.17)(5) 6.28(5) 19.13(5) 50.37 179,675 0.86 (0.14)(5) 6.27(5) 19.12(5) 50.11 69 1.04 -- 7.17 23.57 43.79 696,900 0.64 -- 7.11 23.48 43.43 59,686 0.89 -- (6.26) 16.40 (27.65) 478,045 0.66 -- (4.79) 16.37 (22.65)(2) 5,287 0.84(1) (8.79) (18.00) 22.66 (22.85) 755,068 0.65 (7.44) (4.48) 40.66 3.99 1,063,005 0.64 (13.32) 4.05 45.14 55.17 1,044,728 0.66 <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - --- --------------------------------------- RATIO OF RATIO OF NET EXPENSES INVESTMENT TO AVERAGE INCOME PORTFOLIO NET ASSETS TO AVERAGE TURNOVER BEFORE WAIVERS NET ASSETS RATE(7) -------------- ---------- --------- 0.78% 0.89% 73% 1.03 0.64 73 0.79 0.65 92 1.04 0.42 92 0.79 0.54 85 1.04 0.36 85 0.79 0.41 73 1.04 0.23 73 0.82 0.63 54 1.07 0.45 54 0.80 0.54 292 1.05 0.29 292 0.81 1.06 324 1.06 0.84 324 0.81 0.71 363 1.06 0.53 363 0.81 0.63 367 1.06 0.45 367 0.91 0.54(3) 207 1.16 0.36(3) 207 0.64 (0.05) 145 0.89 (0.30) 145 0.66 (0.16) 189 0.84(1) (0.10)(1) 189 0.65 (0.01) 228 0.64 (0.08) 120 0.66 (0.18) 175 </Table> 153 HARTFORD HLS MUTUAL FUNDS FINANCIAL HIGHLIGHTS -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> -- SELECTED PER-SHARE DATA(4) -- ------------------------------------------------------------------- NET REALIZED AND NET ASSET NET UNREALIZED TOTAL DIVIDENDS VALUE AT INVESTMENT GAIN FROM FROM NET BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME --------- ---------- ------------ ---------- ---------- HARTFORD HIGH YIELD HLS FUND For the Year Ended December 31, 2003 Class IA....................................... $ 8.49 $ 0.19 $ 1.75 $ 1.94 $(0.37) Class IB....................................... 8.44 0.28 1.63 1.91 (0.37) For the Year Ended December 31, 2002 Class IA....................................... 9.64(5) 0.63(5) (1.73)(5) (1.10)(5) (0.05)(5) Class IB....................................... 9.61(5) 0.49(5) (1.61)(5) (1.12)(5) (0.05)(5) For the Year Ended December 31, 2001 Class IA....................................... 9.39(5) 0.78(5) (0.52)(5) 0.26(5) (0.01)(5) Class IB....................................... 9.38(5) 0.84(5) (0.60)(5) 0.24(5) (0.01)(5) For the Year Ended December 31, 2000 Class IA....................................... 10.05(5) 0.78(5) (0.68)(5) 0.10(5) (0.76)(5) Class IB....................................... 10.05(5) 0.04(5) 0.04(5) 0.08(5) (0.75)(5) For the Year Ended December 31, 1999 Class IA....................................... 10.17(5) 0.60(5) (0.13)(5) 0.47(5) (0.59)(5) Class IB....................................... 10.17(5) 0.85(5) (0.39)(5) 0.46(5) (0.58)(5) HARTFORD INDEX HLS FUND For the Year Ended December 31, 2003 Class IA....................................... 23.46 0.36 6.23 6.59 (0.37) Class IB....................................... 23.39 0.31 6.19 6.50 (0.32) For the Year Ended December 31, 2002 Class IA....................................... 31.81(5) 0.32(5) (8.29)(5) (7.97)(5) (0.28)(5) Class IB....................................... 31.75(5) 0.28(5) (8.30)(5) (8.02)(5) (0.24)(5) For the Year Ended December 31, 2001 Class IA....................................... 37.25(5) 0.31(5) (4.87)(5) (4.56)(5) (0.29)(5) Class IB....................................... 37.20(5) 0.30(5) (4.91)(5) (4.61)(5) (0.25)(5) For the Year Ended December 31, 2000 Class IA....................................... 41.89(5) 0.30(5) (4.24)(5) (3.94)(5) (0.31)(5) Class IB....................................... 41.89(5) 0.37(5) (4.39)(5) (4.02)(5) (0.28)(5) For the Year Ended December 31, 1999 Class IA....................................... 35.70(5) 0.34(5) 6.85(5) 7.19(5) (0.40)(5) From inception November 9, 1999 through December 31, 1999 Class IB....................................... 39.22(5) 0.04(5) 2.98(5) 3.02(5) (0.32)(5) HARTFORD INTERNATIONAL OPPORTUNITIES HLS FUND For the Year Ended December 31, 2003 Class IA....................................... 7.66 0.09 2.44 2.53 (0.08) Class IB....................................... 7.66 0.07 2.43 2.50 (0.07) For the Year Ended December 31, 2002 Class IA....................................... 9.53(5) 0.17(5) (1.94)(5) (1.77)(5) (0.10)(5) Class IB....................................... 9.51(5) 0.14(5) (1.91)(5) (1.77)(5) (0.08)(5) For the Year Ended December 31, 2001 Class IA....................................... 13.64(5) 0.12(5) (2.61)(5) (2.49)(5) (0.01)(5) Class IB....................................... 13.65(5) 0.12(5) (2.63)(5) (2.51)(5) (0.02)(5) For the Year Ended December 31, 2000 Class IA....................................... 18.76(5) 0.18(5) (3.14)(5) (2.96)(5) (0.23)(5) Class IB....................................... 18.76(5) 0.25(5) (3.24)(5) (2.99)(5) (0.19)(5) For the Year Ended December 31, 1999 Class IA....................................... 13.55(5) 0.19(5) 5.20(5) 5.39(5) (0.18)(5) Class IB....................................... 13.57(5),(6) 0.17(5),(6) 5.19(5),(6) 5.36(5),(6) (0.17)(5),(6) HARTFORD INTERNATIONAL STOCK HLS FUND For the Year Ended December 31, 2003........... 9.33 0.20 2.57 2.77 (0.25) 2002........................................... 10.43 0.17 (1.18) (1.01) (0.09) 2001........................................... 15.07 0.11 (3.62) (3.51) -- 2000........................................... 17.94 0.06 (1.78) (1.72) (0.47) 1999........................................... 14.48 0.18 3.30 3.48 (0.01) <Caption> -- SELECTED PER-SHARE DATA(4) -- ---------------------------------------------- DISTRIBUTIONS DIVIDENDS FROM IN EXCESS OF NET REALIZED DISTRIBUTIONS NET INVESTMENT GAINS ON FROM INCOME INVESTMENTS CAPITAL -------------- ------------- ------------- HARTFORD HIGH YIELD HLS FUND For the Year Ended December 31, 2003 Class IA....................................... $ -- $ -- $ -- Class IB....................................... -- -- -- For the Year Ended December 31, 2002 Class IA....................................... --(5) --(5) --(5) Class IB....................................... --(5) --(5) --(5) For the Year Ended December 31, 2001 Class IA....................................... --(5) --(5) --(5) Class IB....................................... --(5) --(5) --(5) For the Year Ended December 31, 2000 Class IA....................................... --(5) --(5) --(5) Class IB....................................... --(5) --(5) --(5) For the Year Ended December 31, 1999 Class IA....................................... --(5) --(5) --(5) Class IB....................................... --(5) --(5) --(5) HARTFORD INDEX HLS FUND For the Year Ended December 31, 2003 Class IA....................................... -- (0.08) -- Class IB....................................... -- (0.08) -- For the Year Ended December 31, 2002 Class IA....................................... --(5) (0.10)(5) --(5) Class IB....................................... --(5) (0.10)(5) --(5) For the Year Ended December 31, 2001 Class IA....................................... --(5) (0.59)(5) --(5) Class IB....................................... --(5) (0.59)(5) --(5) For the Year Ended December 31, 2000 Class IA....................................... --(5) (0.39)(5) --(5) Class IB....................................... --(5) (0.39)(5) --(5) For the Year Ended December 31, 1999 Class IA....................................... --(5) (0.60)(5) --(5) From inception November 9, 1999 through December 31, 1999 Class IB....................................... --(5) (0.03)(5) --(5) HARTFORD INTERNATIONAL OPPORTUNITIES HLS FUND For the Year Ended December 31, 2003 Class IA....................................... -- -- -- Class IB....................................... -- -- -- For the Year Ended December 31, 2002 Class IA....................................... --(5) --(5) --(5) Class IB....................................... --(5) --(5) --(5) For the Year Ended December 31, 2001 Class IA....................................... --(5) (1.61)(5) --(5) Class IB....................................... --(5) (1.61)(5) --(5) For the Year Ended December 31, 2000 Class IA....................................... --(5) (1.93)(5) --(5) Class IB....................................... --(5) (1.93)(5) --(5) For the Year Ended December 31, 1999 Class IA....................................... --(5) --(5) --(5) Class IB....................................... --(5),(6) --(5),(6) --(5),(6) HARTFORD INTERNATIONAL STOCK HLS FUND For the Year Ended December 31, 2003........... -- -- -- 2002........................................... -- -- -- 2001........................................... -- (1.13) -- 2000........................................... -- (0.68) -- 1999........................................... -- (0.01) -- </Table> See Notes to Financial Statements. 154 - -------------------------------------------------------------------------------- <Table> <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - ------------------------------------------------------------------------------------------------ RATIO OF NET INCREASE NET ASSETS EXPENSES (DECREASE) IN NET ASSET AT END OF TO AVERAGE TOTAL NET ASSETS VALUE AT TOTAL PERIOD NET ASSETS DISTRIBUTIONS VALUE END OF PERIOD RETURN(12) (000'S OMITTED) AFTER WAIVERS ------------- ------------- ------------- ---------- --------------- ------------- $ (0.37) $ 1.57 $10.06 23.18% $ 481,315 0.78% (0.37) 1.54 9.98 22.88 259,544 1.03 (0.05)(5) (1.15)(5) 8.49(5) (6.89) 200,017 0.82 (0.05)(5) (1.17)(5) 8.44(5) (7.14) 57,084 1.05 (0.01)(5) 0.25(5) 9.64(5) 2.69 127,044 0.81 (0.01)(5) 0.23(5) 9.61(5) 2.54 25,901 0.99 (0.76)(5) (0.66)(5) 9.39(5) 1.03 66,104 0.81 (0.75)(5) (0.67)(5) 9.38(5) 0.85 2,497 0.99 (0.59)(5) (0.12)(5) 10.05(5) 4.70 52,731 0.72 (0.58)(5) (0.12)(5) 10.05(5) 4.49 102 0.90 (0.45) 6.14 29.60 28.13 1,934,490 0.44 (0.40) 6.10 29.49 27.81 195,900 0.69 (0.38)(5) (8.35)(5) 23.46(5) (22.45) 1,553,260 0.44 (0.34)(5) (8.36)(5) 23.39(5) (22.63) 68,832 0.67 (0.88)(5) (5.44)(5) 31.81(5) (12.31) 1,976,361 0.43 (0.84)(5) (5.45)(5) 31.75(5) (12.47) 46,056 0.61 (0.70)(5) (4.64)(5) 37.25(5) (9.50) 2,387,000 0.43 (0.67)(5) (4.69)(5) 37.20(5) (9.66) 16,272 0.61 (1.00)(5) 6.19(5) 41.89(5) 20.49 2,581,436 0.43 (0.35)(5) 2.67(5) 41.89(5) 7.73(2) 11 0.61(1) (0.08) 2.45 10.11 33.10 823,760 0.83 (0.07) 2.43 10.09 32.76 76,246 1.08 (0.10)(5) (1.87)(5) 7.66(5) (17.93) 646,903 0.81 (0.08)(5) (1.85)(5) 7.66(5) (18.12) 26,641 1.04 (1.62)(5) (4.11)(5) 9.53(5) (18.73) 941,934 0.81 (1.63)(5) (4.14)(5) 9.51(5) (18.88) 22,277 0.99 (2.16)(5) (5.12)(5) 13.64(5) (17.10) 1,326,609 0.78 (2.12)(5) (5.11)(5) 13.65(5) (17.25) 18,682 0.96 (0.18)(5) 5.21(5) 18.76(5) 39.86 1,574,836 0.78 (0.17)(5),(6) 5.19(5),(6) 18.76(5),(6) 39.61 3,203 0.96 (0.25) 2.52 11.85 30.01 94,895 0.96 (0.09) (1.10) 9.33 (9.74) 81,352 0.97 (1.13) (4.64) 10.43 (24.17) 105,313 0.94 (1.15) (2.87) 15.07 (9.79) 149,229 0.93 (0.02) 3.46 17.94 23.99 143,969 0.94 <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - --- --------------------------------------- RATIO OF RATIO OF NET EXPENSES INVESTMENT TO AVERAGE INCOME PORTFOLIO NET ASSETS TO AVERAGE TURNOVER BEFORE WAIVERS NET ASSETS RATE(7) -------------- ---------- --------- 0.78% 7.00% 44% 1.03 6.75 44 0.82 9.33 60 1.07 9.10 60 0.81 9.70 63 1.06 9.52 63 0.81 9.15 69 1.06 8.97 69 0.84 8.36(3) 47 1.09 8.18(3) 47 0.44 1.40 3 0.69 1.15 3 0.44 1.18 15 0.69 0.95 15 0.43 0.91 5 0.68 0.73 5 0.43 0.75 7 0.68 0.57 7 0.43 0.95 3 0.68(1) 0.77(1) 3 0.83 1.08 144 1.08 0.83 144 0.81 1.23 161 1.06 1.00 161 0.81 1.10 144 1.06 0.92 144 0.78 1.16 159 1.03 0.98 159 0.78 1.20 133 1.03 1.02 133 0.96 1.83 43 0.97 1.53 53 0.94 0.89 58 0.93 0.85 44 0.94 1.26 29 </Table> 155 HARTFORD HLS MUTUAL FUNDS FINANCIAL HIGHLIGHTS -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> -- SELECTED PER-SHARE DATA(4) -- ------------------------------------------------------------------- NET REALIZED AND NET ASSET NET UNREALIZED TOTAL DIVIDENDS VALUE AT INVESTMENT GAIN FROM FROM NET BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME --------- ---------- ------------ ---------- ---------- HARTFORD LARGECAP GROWTH HLS FUND For the Year Ended December 31, 2003........... $ 6.96 $ -- $ 1.63 $ 1.63 $ -- 2002........................................... 10.09 (0.02) (3.11) (3.13) -- 2001........................................... 11.86 (0.01) (1.76) (1.77) -- 2000........................................... 15.05 (0.03) (2.59) (2.62) -- 1999........................................... 12.04 (0.01) 3.28 3.27 -- HARTFORD MIDCAP STOCK HLS FUND For the Year Ended December 31, 2003........... 8.57 0.02 2.64 2.66 (0.02) 2002........................................... 9.85 0.02 (1.30) (1.28) -- 2001........................................... 10.31 0.01 (0.44) (0.43) (0.01) 2000........................................... 10.68 0.02 0.93 0.95 (0.02) 1999........................................... 9.64 0.01 1.04 1.05 (0.01) HARTFORD MONEY MARKET HLS FUND For the Year Ended December 31, 2003 Class IA....................................... 1.00 0.01 -- 0.01 (0.01) Class IB....................................... 1.00 -- -- -- -- For the Year Ended December 31, 2002 Class IA....................................... 1.00 0.01 -- 0.01 (0.01) Class IB....................................... 1.00 0.01 -- 0.01 (0.01) For the Year Ended December 31, 2001 Class IA....................................... 1.00 0.04 -- 0.04 (0.04) Class IB....................................... 1.00 0.04 -- 0.04 (0.04) For the Year Ended December 31, 2000 Class IA....................................... 1.00 0.06 -- 0.06 (0.06) Class IB....................................... 1.00 0.06 -- 0.06 (0.06) For the Year Ended December 31, 1999 Class IA....................................... 1.00 0.07 -- 0.07 (0.07) Class IB....................................... 1.00 0.07 -- 0.07 (0.07) HARTFORD MULTISECTOR BOND HLS FUND For the Year Ended December 31, 2003........... 10.85 0.43 0.54 0.97 (0.61) 2002........................................... 11.09 0.67 (0.26) 0.41 (0.65) 2001........................................... 10.50 0.66 (0.07) 0.59 -- 2000 (11)...................................... 10.26 0.65 (0.21) 0.44 (0.20) 1999........................................... 11.56 0.57 (1.44) (0.87) (0.35) HARTFORD SMALLCAP GROWTH HLS FUND For the Year Ended December 31, 2003 Class IA....................................... 11.70 -- 5.85 5.85 -- Class IB....................................... 11.73 (0.01) 5.83 5.82 -- For the Year Ended December 31, 2002 Class IA....................................... 16.44 (0.02) (4.72) (4.74) -- From inception April 30, 2002 through December 31, 2002 Class IB....................................... 15.96 (0.01) (4.22) (4.23) -- For the Year Ended December 31, 2001 Class IA....................................... 23.73 -- (4.91) (4.91) -- For the Year Ended December 31, 2000 Class IA....................................... 33.79 -- (3.06) (3.06) -- For the Year Ended December 31, 1999 Class IA....................................... 16.70 (0.04) 17.86 17.82 (0.01) HARTFORD SMALLCAP VALUE HLS FUND For the Year Ended December 31, 2003 Class IA....................................... 10.88 0.13 4.01 4.14 (0.06) From inception July 1, 2003 through December 31, 2003 Class IB....................................... 12.06 -- 2.72 2.72 -- For the Year Ended December 31, 2002 Class IA....................................... 14.20 0.07 (1.93) (1.86) (0.10) For the Year Ended December 31, 2001 Class IA....................................... 11.74 0.13 2.33 2.46 -- For the Year Ended December 31, 2000 Class IA....................................... 10.20 0.17 2.54 2.71 (0.17) For the Year Ended December 31, 1999 Class IA....................................... 9.28 0.12 1.27 1.39 (0.11) <Caption> -- SELECTED PER-SHARE DATA(4) -- ---------------------------------------------- DISTRIBUTIONS DIVIDENDS FROM IN EXCESS OF NET REALIZED DISTRIBUTIONS NET INVESTMENT GAINS ON FROM INCOME INVESTMENTS CAPITAL -------------- ------------- ------------- HARTFORD LARGECAP GROWTH HLS FUND For the Year Ended December 31, 2003........... $ -- $ -- $ -- 2002........................................... -- -- -- 2001........................................... -- -- -- 2000........................................... -- (0.57) -- 1999........................................... -- (0.26) -- HARTFORD MIDCAP STOCK HLS FUND For the Year Ended December 31, 2003........... -- -- -- 2002........................................... -- -- -- 2001........................................... -- (0.02) -- 2000........................................... -- (1.30) -- 1999........................................... -- -- -- HARTFORD MONEY MARKET HLS FUND For the Year Ended December 31, 2003 Class IA....................................... -- -- -- Class IB....................................... -- -- -- For the Year Ended December 31, 2002 Class IA....................................... -- -- -- Class IB....................................... -- -- -- For the Year Ended December 31, 2001 Class IA....................................... -- -- -- Class IB....................................... -- -- -- For the Year Ended December 31, 2000 Class IA....................................... -- -- -- Class IB....................................... -- -- -- For the Year Ended December 31, 1999 Class IA....................................... -- -- -- Class IB....................................... -- -- -- HARTFORD MULTISECTOR BOND HLS FUND For the Year Ended December 31, 2003........... -- -- -- 2002........................................... -- -- -- 2001........................................... -- -- -- 2000 (11)...................................... -- -- -- 1999........................................... -- (0.08) -- HARTFORD SMALLCAP GROWTH HLS FUND For the Year Ended December 31, 2003 Class IA....................................... -- -- -- Class IB....................................... -- -- -- For the Year Ended December 31, 2002 Class IA....................................... -- -- -- From inception April 30, 2002 through December 31, 2002 Class IB....................................... -- -- -- For the Year Ended December 31, 2001 Class IA....................................... -- (2.38) -- For the Year Ended December 31, 2000 Class IA....................................... -- (7.00) -- For the Year Ended December 31, 1999 Class IA....................................... -- (0.72) -- HARTFORD SMALLCAP VALUE HLS FUND For the Year Ended December 31, 2003 Class IA....................................... -- (0.15) -- From inception July 1, 2003 through December 31, 2003 Class IB....................................... -- -- -- For the Year Ended December 31, 2002 Class IA....................................... -- (1.36) -- For the Year Ended December 31, 2001 Class IA....................................... -- -- -- For the Year Ended December 31, 2000 Class IA....................................... -- (1.00) -- For the Year Ended December 31, 1999 Class IA....................................... -- (0.36) -- </Table> See Notes to Financial Statements. 156 - -------------------------------------------------------------------------------- <Table> <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - ------------------------------------------------------------------------------------------------ RATIO OF NET INCREASE NET ASSETS EXPENSES (DECREASE) IN NET ASSET AT END OF TO AVERAGE TOTAL NET ASSETS VALUE AT TOTAL PERIOD NET ASSETS DISTRIBUTIONS VALUE END OF PERIOD RETURN(12) (000'S OMITTED) AFTER WAIVERS ------------- ------------- ------------- ---------- --------------- ------------- $ -- $ 1.63 $ 8.59 23.42% $ 58,670 0.93% -- (3.13) 6.96 (31.04) 51,944 0.95 -- (1.77) 10.09 (14.89) 86,475 0.95 (0.57) (3.19) 11.86 (17.95) 98,814 0.96 (0.26) 3.01 15.05 27.22 87,061 0.97 (0.02) 2.64 11.21 31.05 56,285 0.95 -- (1.28) 8.57 (13.06) 43,251 0.97 (0.03) (0.46) 9.85 (4.17) 46,758 1.02 (1.32) (0.37) 10.31 8.71 37,767 1.05 (0.01) 1.04 10.68 10.97 24,800 1.18 (0.01) -- 1.00 0.75 1,609,439 0.49 -- -- 1.00 0.50 240,930 0.74 (0.01) -- 1.00 1.47 2,319,456 0.49 (0.01) -- 1.00 1.24 261,914 0.72 (0.04) -- 1.00 3.87 1,867,520 0.48 (0.04) -- 1.00 3.68 152,129 0.66 (0.06) -- 1.00 6.10 1,242,275 0.48 (0.06) -- 1.00 5.91 36,270 0.66 (0.07) -- 1.00 4.89 1,257,436 0.47 (0.07) -- 1.00 4.71 8,804 0.65 (0.61) 0.36 11.21 9.26 30,037 0.82 (0.65) (0.24) 10.85 3.94 28,254 0.83 -- 0.59 11.09 5.58 30,648 0.86 (0.20) 0.24 10.50 4.27 23,300 0.94 (0.43) (1.30) 10.26 (7.53) 24,926 0.90 -- 5.85 17.55 50.06 346,380 0.66 -- 5.82 17.55 49.70 74,592 0.91 -- (4.74) 11.70 (28.83) 184,062 0.69 -- (4.23) 11.73 (26.51)(2) 7,150 0.89(1) (2.38) (7.29) 16.44 (20.18) 272,272 0.68 (7.00) (10.06) 23.73 (15.08) 352,615 0.66 (0.73) 17.09 33.79 109.25 333,158 0.72 (0.21) 3.93 14.81 38.46 105,589 0.92 -- 2.72 14.78 22.54(2) 1 1.17(1) (1.46) (3.32) 10.88 (15.17) 85,029 0.92 -- 2.46 14.20 21.01 108,672 0.96 (1.17) 1.54 11.74 27.00 58,027 1.03 (0.47) 0.92 10.20 15.34 39,171 1.04 <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - --- --------------------------------------- RATIO OF RATIO OF NET EXPENSES INVESTMENT TO AVERAGE INCOME PORTFOLIO NET ASSETS TO AVERAGE TURNOVER BEFORE WAIVERS NET ASSETS RATE(7) -------------- ---------- --------- 0.93% 0.05% 121% 0.95 (0.19) 44 0.95 (0.11) 77 0.96 (0.27) 68 0.97 (0.09) 50 0.95 0.16 76 0.97 0.16 77 1.02 0.07 79 1.05 0.18 123 1.18 0.15 73 0.49 0.75 -- 0.74 0.50 -- 0.49 1.43 -- 0.74 1.20 -- 0.48 3.58 -- 0.73 3.40 -- 0.48 5.91 -- 0.73 5.73 -- 0.47 4.81 -- 0.72 4.63 -- 0.82 4.54 202 0.83 5.23 100 0.86 6.54 73 0.94 6.22 284 0.90 3.83 194 0.66 (0.01) 101 0.91 (0.26) 101 0.69 (0.18) 99 0.89(1) (0.13)(1) 99 0.68 (0.02) 164 0.66 0.01 160 0.72 (0.22) 264 0.92 0.99 57 1.17(1) 0.74(1) 57 0.92 0.60 44 0.96 1.19 49 1.03 1.71 90 1.04 1.57 68 </Table> 157 HARTFORD HLS MUTUAL FUNDS FINANCIAL HIGHLIGHTS -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> -- SELECTED PER-SHARE DATA(4) -- ------------------------------------------------------------------- NET REALIZED AND NET ASSET NET UNREALIZED TOTAL DIVIDENDS VALUE AT INVESTMENT GAIN FROM FROM NET BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME --------- ---------- ------------ ---------- ---------- HARTFORD STOCK HLS FUND For the Year Ended December 31, 2003 Class IA....................................... $ 35.46 $ 0.46 $ 8.93 $ 9.39 $(0.48) Class IB....................................... 35.42 0.38 8.88 9.26 (0.39) For the Year Ended December 31, 2002 Class IA....................................... 47.36(5) 0.43(5) (11.94)(5) (11.51)(5) (0.39)(5) Class IB....................................... 47.31(5) 0.38(5) (11.95)(5) (11.57)(5) (0.32)(5) For the Year Ended December 31, 2001 Class IA....................................... 58.80(5) 0.41(5) (7.42)(5) (7.01)(5) (0.38)(5) Class IB....................................... 58.79(5) 0.46(5) (7.57)(5) (7.11)(5) (0.32)(5) For the Year Ended December 31, 2000 Class IA....................................... 71.47(5) 0.39(5) (5.00)(5) (4.61)(5) (0.41)(5) Class IB....................................... 71.51(5) 0.74(5) (5.47)(5) (4.72)(5) (0.34)(5) For the Year Ended December 31, 1999 Class IA....................................... 65.62(5) 0.50(5) 11.43(5) 11.93(5) (0.49)(5) Class IB....................................... 118.84(5),(6) 0.21(5),(6) 12.00(5),(6) 12.21(5),(6) (0.56)(5),(6) HARTFORD U.S. GOVERNMENT SECURITIES HLS FUND For the Year Ended December 31, 2003 Class IA....................................... 11.36 0.31 (0.07) 0.24 (0.17) Class IB....................................... 11.34 0.27 (0.05) 0.22 (0.17) For the Year Ended December 31, 2002 Class IA....................................... 10.79 0.22 0.89 1.11 (0.54) From inception April 30, 2002 through December 31, 2002 Class IB..................................... 10.51 0.15 0.68 0.83 -- For the Year Ended December 31, 2001 Class IA....................................... 10.59 0.50 0.28 0.78 (0.58) For the Year Ended December 31, 2000 Class IA....................................... 10.13 0.70 0.46 1.16 (0.70) For the Year Ended December 31, 1999 Class IA....................................... 10.93 0.63 (0.84) (0.21) (0.59) HARTFORD VALUE OPPORTUNITIES HLS FUND For the Year Ended December 31, 2003 Class IA....................................... 10.86 0.06 4.48 4.54 (0.07) Class IB....................................... 10.84 0.08 4.41 4.49 (0.06) For the Year Ended December 31, 2002 Class IA....................................... 14.83 0.07 (3.68) (3.61) (0.09) From inception April 30, 2002 through December 31, 2002 Class IB..................................... 13.51 0.02 (2.69) (2.67) -- For the Year Ended December 31, 2001 Class IA....................................... 17.38 0.08 (0.48) (0.40) (0.11) For the Year Ended December 31, 2000 Class IA....................................... 15.65 0.14 2.68 2.82 (0.13) For the Year Ended December 31, 1999 Class IA....................................... 14.38 0.13 1.15 1.28 -- <Caption> -- SELECTED PER-SHARE DATA(4) -- ---------------------------------------------- DISTRIBUTIONS DIVIDENDS FROM IN EXCESS OF NET REALIZED DISTRIBUTIONS NET INVESTMENT GAINS ON FROM INCOME INVESTMENTS CAPITAL -------------- ------------- ------------- HARTFORD STOCK HLS FUND For the Year Ended December 31, 2003 Class IA....................................... $ -- $ -- $ -- Class IB....................................... -- -- -- For the Year Ended December 31, 2002 Class IA....................................... --(5) --(5) --(5) Class IB....................................... --(5) --(5) --(5) For the Year Ended December 31, 2001 Class IA....................................... --(5) (4.05)(5) --(5) Class IB....................................... --(5) (4.05)(5) --(5) For the Year Ended December 31, 2000 Class IA....................................... --(5) (7.65)(5) --(5) Class IB....................................... --(5) (7.66)(5) --(5) For the Year Ended December 31, 1999 Class IA....................................... --(5) (5.59)(5) --(5) Class IB....................................... --(5),(6) (58.98)(5),(6) --(5),(6) HARTFORD U.S. GOVERNMENT SECURITIES HLS FUND For the Year Ended December 31, 2003 Class IA....................................... -- -- -- Class IB....................................... -- -- -- For the Year Ended December 31, 2002 Class IA....................................... -- -- -- From inception April 30, 2002 through December 31, 2002 Class IB..................................... -- -- -- For the Year Ended December 31, 2001 Class IA....................................... -- -- -- For the Year Ended December 31, 2000 Class IA....................................... -- -- -- For the Year Ended December 31, 1999 Class IA....................................... -- -- -- HARTFORD VALUE OPPORTUNITIES HLS FUND For the Year Ended December 31, 2003 Class IA....................................... -- -- -- Class IB....................................... -- -- -- For the Year Ended December 31, 2002 Class IA....................................... -- (0.27) -- From inception April 30, 2002 through December 31, 2002 Class IB..................................... -- -- -- For the Year Ended December 31, 2001 Class IA....................................... -- (2.04) -- For the Year Ended December 31, 2000 Class IA....................................... -- (0.96) -- For the Year Ended December 31, 1999 Class IA....................................... -- (0.01) -- </Table> - --------------- (1) Annualized. (2) Not annualized. (3) Management fees were waived until assets (excluding assets contributed by companies affiliated with HL Advisers) reached $20 million. The ratio of expenses to average net assets would have been higher if management fees were not waived. The ratio of net investment income to average net assets would have been lower if management fees were not waived. (4) Information presented relates to a share of capital stock outstanding for the indicated period. (5) Per shares amounts have been restated to reflect a reverse stock split for Class IB shares effective November 22, 2002. (See Note 11(a)). (6) Per shares amounts have been restated to reflect a reverse stock split for Class IA and IB shares effective September 17, 1999. (See Note 11(b)). (7) Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. (8) The Fund's previous investment adviser undertook to limit annual expenses for Capital Opportunities Series (exclusive of interest, taxes, brokerage commission and non-recurring extraordinary charges and expenses) to 1.25% of the average net assets until the fund reaches $10,000,000 in average net assets. For the period presented, had the waiver and reimbursement of expenses not been in effect, the ratios of expenses and net investment income to average daily net assets would have been 1.38% and (.19%), respectively. See Notes to Financial Statements. 158 - -------------------------------------------------------------------------------- <Table> <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - ------------------------------------------------------------------------------------------------ RATIO OF NET INCREASE NET ASSETS EXPENSES (DECREASE) IN NET ASSET AT END OF TO AVERAGE TOTAL NET ASSETS VALUE AT TOTAL PERIOD NET ASSETS DISTRIBUTIONS VALUE END OF PERIOD RETURN(12) (000'S OMITTED) AFTER WAIVERS ------------- ------------- ------------- ---------- --------------- ------------- $ (0.48) $ 8.91 $44.37 26.47% $ 6,014,675 0.49% (0.39) 8.87 44.29 26.16 562,979 0.74 (0.39)(5) (11.90)(5) 35.46(5) (24.25) 5,094,276 0.49 (0.32)(5) (11.89)(5) 35.42(5) (24.42) 296,767 0.72 (4.43)(5) (11.44)(5) 47.36(5) (12.23) 7,834,643 0.49 (4.37)(5) (11.48)(5) 47.31(5) (12.39) 271,475 0.67 (8.06)(5) (12.67)(5) 58.80(5) (7.04) 9,590,018 0.48 (8.00)(5) (12.72)(5) 58.79(5) (7.21) 136,077 0.66 (6.08)(5) 5.85(5) 71.47(5) 19.78 9,400,385 0.48 (59.54)(5),(6) (4.73)(5),(6) 71.51(5),(6) 19.57 47,439 0.66 (0.17) 0.07 11.43 2.15 514,243 0.47 (0.17) 0.05 11.39 1.89 239,023 0.72 (0.54) 0.57 11.36 10.73 590,626 0.49 -- 0.83 11.34 7.96(2) 100,867 0.74(1) (0.58) 0.20 10.79 7.50 174,333 0.51 (0.70) 0.46 10.59 11.81 141,415 0.52 (0.59) (0.80) 10.13 (1.94) 138,658 0.52 (0.07) 4.47 15.33 41.87 156,879 0.71 (0.06) 4.43 15.27 41.52 32,572 0.96 (0.36) (3.97) 10.86 (24.95) 88,793 0.73 -- (2.67) 10.84 (19.74)(2) 3,160 0.91(1) (2.15) (2.55) 14.83 (2.55) 130,567 0.73 (1.09) 1.73 17.38 18.49 111,590 0.76 (0.01) 1.27 15.65 8.96 94,583 0.78 <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - --- --------------------------------------- RATIO OF RATIO OF NET EXPENSES INVESTMENT TO AVERAGE INCOME PORTFOLIO NET ASSETS TO AVERAGE TURNOVER BEFORE WAIVERS NET ASSETS RATE(7) -------------- ---------- --------- 0.49% 1.18% 37% 0.74 0.93 37 0.49 0.97 44 0.74 0.75 44 0.49 0.80 39 0.74 0.62 39 0.48 0.64 40 0.73 0.46 40 0.48 0.80 39 0.73 0.62 39 0.47 2.74 191 0.72 2.49 191 0.49 3.47 283 0.74(1) 5.13(1) 283 0.51 5.55 155 0.52 6.28 128 0.52 5.64 97 0.71 0.62 48 0.96 0.37 48 0.73 0.60 67 0.91(1) 1.06(1) 67 0.73 0.68 147 0.76 0.87 171 0.78 0.85 211 </Table> 159 HARTFORD HLS MUTUAL FUNDS FINANCIAL HIGHLIGHTS -- (CONTINUED) - -------------------------------------------------------------------------------- (9) The Fund's previous investment adviser undertook to limit annual expenses for Large Cap Growth Series (exclusive of interest, taxes, brokerage commission and non-recurring extraordinary charges and expenses) to 1.25% of the average net assets. For the period presented, had the waiver and reimbursement of expenses not been in effect, the ratios of expenses and net investment income to average daily net assets would have been 1.27% and .01%, respectively. (10) The Fund's previous investment adviser undertook to limit annual expenses for Mid Cap Stock Series (exclusive of interest, taxes, brokerage commission and non-recurring extraordinary charges and expenses) to 1.25% of the average net assets. For the period presented, had the waiver and reimbursement of expenses not been in effect, the ratios of expenses and net investment income to average daily net assets would have been 1.40% and .04%, respectively. (11) On March 15, 2000, Multisector Bond Series, formerly known as Global Bond Series, changed its investment objective in conjunction with a change in sub-advisor. As Global Bond Series, the Series invested principally in high quality U.S. and foreign government and corporate fixed income securities. The new investment objective of the fund is to invest in U.S. and foreign government obligations and fixed rate corporate debt including investment and non-investment grade bonds. The Series' sub-adviser changed from Mercury Asset Management International Ltd., to AIM Capital Management, Inc. (12) Returns include the Fund level expenses, but exclude the insurance charges, if returns had taken into account insurance charges, performance would have been lower. See Notes to Financial Statements. 160 REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF HARTFORD SERIES FUND, INC. AND HARTFORD HLS SERIES FUND II, INC. - -------------------------------------------------------------------------------- We have audited the accompanying statements of net assets of the Hartford Advisers HLS Fund, Hartford Bond HLS Fund, Hartford Capital Appreciation HLS Fund, Hartford Disciplined Equity HLS Fund (formerly, Hartford Growth and Income HLS Fund), Hartford Global Leaders HLS Fund, Hartford High Yield HLS Fund, Hartford Index HLS Fund, Hartford International Opportunities HLS Fund, Hartford Money Market HLS Fund and Hartford Stock HLS Fund (ten of the twenty-five portfolios comprising Hartford Series Fund, Inc.) and the Hartford Blue Chip HLS Fund, Hartford Capital Opportunities HLS Fund, Hartford Growth Opportunities HLS Fund, Hartford International Stock HLS Fund, Hartford MidCap Stock HLS Fund, Hartford Multisector Bond HLS Fund, Hartford SmallCap Growth HLS Fund, Hartford SmallCap Value Growth HLS Fund, Hartford U.S. Government Securities HLS Fund and Hartford Value Opportunities HLS Fund and the statement of assets and liabilities, including the schedule of investments of Hartford LargeCap Growth HLS Fund (eleven of the portfolios comprising Hartford Series Fund II, Inc.) (collectively, the "Funds") as of December 31, 2003, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for each of the three years in the period ended December 31, 2001 for the Hartford Series Fund, Inc. were audited by other auditors who have ceased operations and whose report, dated February 6, 2002, expressed an unqualified opinion on those financial highlights. The financial highlights for each of the three years in the period ended December 31, 2001 for the Hartford HLS Series Fund II, Inc. were audited by other auditors whose report, dated February 8, 2002, expressed an unqualified opinion on those financial highlights. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights 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 securities owned as of December 31, 2003 by correspondence with the custodian and brokers, or by other appropriate auditing procedures where replies from brokers were not received. 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 and financial highlights referred to above present fairly, in all material respects, the financial position of the Funds identified above at December 31, 2003, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States. /s/ ERNST & YOUNG LLP Boston, Massachusetts February 6, 2004 161 HARTFORD HLS MUTUAL FUNDS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- TAX INFORMATION NOTICE: (UNAUDITED) For the year ended December 31, 2003, the following Funds distributed long-term capital gains dividends as follows: <Table> Hartford Bond HLS Fund...................................... $ 6,157 Hartford SmallCap Value HLS Fund............................ 1,047 </Table> 162 HARTFORD SERIES FUND, INC. AND HARTFORD HLS SERIES FUND II, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) - -------------------------------------------------------------------------------- The Boards of Directors ("Boards") are responsible for overall management of the Funds. The Boards may exercise all powers of the Funds, except those powers that are conferred solely upon or reserved to the shareholders. The following table provides information about the Funds' directors and officers. The business address for all directors and officers is c/o Hartford HLS Funds, P.O. Box 2999, Hartford, CT 06104-2999, except for Tamara L. Fagely and Robert W. Beltz, Jr., whose business address is 500 Bielenberg Dr., Woodbury, MN 55125. - -------------------------------------------------------------------------------- <Table> <Caption> NON-INTERESTED DIRECTORS - ---------------------------------------------------------------------------------------------------- TERM OF OFFICE* AND LENGTH OF POSITION HELD TIME SERVED WITH THE -------------- PRINCIPAL OCCUPATION(S) NAME AND AGE COMPANY SF(1) SF2(2) DURING PAST 5 YEARS - ---------------------------------------------------------------------------------------------------- LYNN S. BIRDSONG Director 2003 2003 From 1979 to 2002, Mr. Birdsong was a (age 57) managing director of Zurich Scudder Investments, an investment management firm. In 2003, Mr. Birdsong became an independent director of the Atlantic Whitehall Funds and The Japan Fund; during his employment with Scudder, he was an interested director of The Japan Fund. Since 1981, Mr. Birdsong has been a partner in Birdsong Company, an advertising specialty firm. He is also a Director of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- WINIFRED E. COLEMAN Director 1995(3) 2002 Ms. Coleman has served as President of (age 71) Saint Joseph College since 1991 and President of Cashel House, Ltd. (retail) since 1985. She is also a Director of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- ROBERT M. GAVIN Director 2002 1986 Dr. Gavin is an educational consultant. (age 63) Prior to September 1, 2001, he was President of Cranbrook Education Community; and prior to July 1996, he was President of Macalester College, St. Paul, Minnesota. He is also a Director of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- DUANE E. HILL Director 2001 2002 Mr. Hill is Partner Emeritus and a (age 58) founding partner of TSG Capital Group, a private equity investment firm that serves as sponsor and lead investor in leveraged buyouts of middle market companies. Mr. Hill is also a Partner of TSG Ventures L.P., a private equity investment company that invests primarily in minority-owned small businesses. He is also a Director of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- <Caption> NON-INTERESTED DIRECTORS NON-INTERESTED DIRECTORS - ------------------------ ----------------------------------- NUMBER OF PORTFOLIOS IN FUND COMPLEX OTHER OVERSEEN BY DIRECTORSHIPS NAME AND AGE DIRECTOR HELD BY DIRECTOR - ------------------------ ----------------------------------- LYNN S. BIRDSONG 72 N/A (age 57) - ---------------------------------------------------------------------------------------------------- WINIFRED E. COLEMAN 72 N/A (age 71) - ---------------------------------------------------------------------------------------------------- ROBERT M. GAVIN 72 Dr. Gavin is a (age 63) Director of Systems & Computer Technology Corporation. - ---------------------------------------------------------------------------------------------------- DUANE E. HILL 72 N/A (age 58) - ---------------------------------------------------------------------------------------------------- </Table> 163 HARTFORD SERIES FUND, INC. AND HARTFORD HLS SERIES FUND II, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> NON-INTERESTED DIRECTORS - ---------------------------------------------------------------------------------------------------- TERM OF OFFICE* AND LENGTH OF POSITION HELD TIME SERVED WITH THE -------------- PRINCIPAL OCCUPATION(S) NAME AND AGE COMPANY SF(1) SF2(2) DURING PAST 5 YEARS - ---------------------------------------------------------------------------------------------------- PHILLIP O. PETERSON Director 2002 2000 Mr. Peterson is a mutual fund industry (age 59) consultant. He was a partner of KPMG LLP until July 1999. In January 2004, Mr. Peterson was appointed independent president of the Strong Mutual Funds. He is also a Director of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- MILLARD H. PRYOR, JR. Director 1977(3) 2002 Mr. Pryor has served as Managing Director (age 70) of Pryor & Clark Company (real estate investment), Hartford, Connecticut, since June 1992. He is also a Director of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc., and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- THOMAS M. MARRA(3) Director and 2002 2002 Mr. Marra is President and Chief (age 45) Chairman of Operating Officer of Hartford Life, Inc. the Board He is also a member of the Board of Directors and a member of the Office of the Chairman for The Hartford Financial Services Group, Inc. ("The Hartford"), the parent company of Hartford Life. Mr. Marra was named President of Hartford Life in 2001 and COO in 2000, and served as Director of Hartford Life's Investment Products Division from 1998 to 2000. He was head of the company's Individual Life and Annuities Division from 1994 to 1998 after being promoted to Senior Vice President in 1994 and to Executive Vice President in 1996. Mr. Marra is also a Managing Member and President of Hartford Investment Financial Services, LLC ("HIFSCO") and HL Investment Advisors LLC ("HL Advisors"). He is also a Director and Chairman of the Board of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- LOWNDES A. SMITH(4) Director 1996 2002 Mr. Smith served as Vice Chairman of The (age 64) Hartford from February 1997 to January 2002, as President and Chief Executive Officer of Hartford Life, Inc. from February 1997 to January 2002, and as President and Chief Operating Officer of The Hartford Life Insurance Companies from January 1989 to January 2002. Mr. Smith is also a Director of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- <Caption> NON-INTERESTED DIRECTORS NON-INTERESTED DIRECTORS - ------------------------ ----------------------------------- NUMBER OF PORTFOLIOS IN FUND COMPLEX OTHER OVERSEEN BY DIRECTORSHIPS NAME AND AGE DIRECTOR HELD BY DIRECTOR - ------------------------ ----------------------------------- PHILLIP O. PETERSON 72 N/A (age 59) - ---------------------------------------------------------------------------------------------------- MILLARD H. PRYOR, JR. 72 Mr. Pryor is a (age 70) Director of Infodata Systems, Inc. (software company) and CompuDyne Corporation (security products and services) and August Financial Holding Company (advisory services). - ---------------------------------------------------------------------------------------------------- THOMAS M. MARRA(3) 72 Mr. Marra is a (age 45) member of the Board of Directors of The Hartford. - ---------------------------------------------------------------------------------------------------- LOWNDES A. SMITH(4) 72 N/A (age 64) - ---------------------------------------------------------------------------------------------------- </Table> 164 HARTFORD SERIES FUND, INC. AND HARTFORD HLS SERIES FUND II, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> NON-INTERESTED DIRECTORS - ---------------------------------------------------------------------------------------------------- TERM OF OFFICE* AND LENGTH OF POSITION HELD TIME SERVED WITH THE -------------- PRINCIPAL OCCUPATION(S) NAME AND AGE COMPANY SF(1) SF2(2) DURING PAST 5 YEARS - ---------------------------------------------------------------------------------------------------- DAVID M. ZNAMIEROWSKI(4) President and 1999 2001 Mr. Znamierowski currently serves as (age 43) Director(5) President of Hartford Investment Management Company ("Hartford Investment"), Senior Vice President for Hartford Life, Inc., and Senior Vice President and Chief Investment Officer for Hartford Life Insurance Company. Mr. Znamierowski is also a Managing Member and Senior Vice President of HIFSCO and HL Advisors. Mr. Znamierowski is Group Senior Vice President and Chief Investment Officer for The Hartford. In addition, he serves as President and Director of The Hartford Mutual Funds, Inc. and as President of The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- ROBERT W. BELTZ, JR. Vice President 2002 1993 Mr. Beltz currently serves as Vice (age 54) President Securities Operations of Hartford Administrative Services Company ("HASCO"). Since December 2001, he has served as Assistant Vice President of Hartford Life Insurance Company. In addition, he is Vice President of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- KEVIN J. CARR Vice President 1996 2001 Mr. Carr has served as The Hartford's (age 49) and Secretary Assistant General Counsel since 1999, Counsel since November 1996 and Associate Counsel since November 1995. Mr. Carr is also Vice President and Assistant Secretary of HL Advisors and HIFSCO and Assistant Secretary of Hartford Investment. He is also Vice President and Secretary of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- WILLIAM H. DAVISON, JR. Vice President 2002 2002 Mr. Davison is a Managing Director and (age 46) Director of the Funds Management Group of Hartford Investment. Mr. Davison is also a Senior Vice President of HIFSCO and HL Advisors. In addition, he serves as Vice President of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- TAMARA L. FAGELY Vice President 2002 1993 Ms. Fagely has been Vice President of (age 45) HASCO since 1998. Prior to 1998, she was Second Vice President of HASCO. Since December 2001, she has served as Assistant Vice President of Hartford Life Insurance Company. In addition, she is Controller of HIFSCO and Vice President, Controller and Treasurer of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- <Caption> NON-INTERESTED DIRECTORS NON-INTERESTED DIRECTORS - ------------------------ ----------------------------------- NUMBER OF PORTFOLIOS IN FUND COMPLEX OTHER OVERSEEN BY DIRECTORSHIPS NAME AND AGE DIRECTOR HELD BY DIRECTOR - ------------------------ ----------------------------------- DAVID M. ZNAMIEROWSKI(4) 53 N/A (age 43) - ---------------------------------------------------------------------------------------------------- ROBERT W. BELTZ, JR. N/A N/A (age 54) - ---------------------------------------------------------------------------------------------------- KEVIN J. CARR N/A N/A (age 49) - ---------------------------------------------------------------------------------------------------- WILLIAM H. DAVISON, JR. N/A N/A (age 46) - ---------------------------------------------------------------------------------------------------- TAMARA L. FAGELY N/A N/A (age 45) - ---------------------------------------------------------------------------------------------------- </Table> 165 HARTFORD SERIES FUND, INC. AND HARTFORD HLS SERIES FUND II, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> NON-INTERESTED DIRECTORS - ---------------------------------------------------------------------------------------------------- TERM OF OFFICE* AND LENGTH OF POSITION HELD TIME SERVED WITH THE -------------- PRINCIPAL OCCUPATION(S) NAME AND AGE COMPANY SF(1) SF2(2) DURING PAST 5 YEARS - ---------------------------------------------------------------------------------------------------- BRUCE FERRIS Vice President 2002 2002 Mr. Ferris serves as Senior Vice (age 48) President and a Director of Sales and Marketing in the Investment Products Division of Hartford Life Insurance Company. He is also a Managing Member of HL Advisors. In addition, Mr. Ferris is Vice President of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- MARY JANE FORTIN Vice President 2003 2003 Ms. Fortin is Senior Vice President and (age 39) Director of Mutual Funds and 529 Programs for Hartford Life. In addition, she is Vice President of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. Previously, Ms. Fortin served as Senior Vice President and Chief Accounting Officer of Hartford Life. She joined Hartford Life in 1997. - ---------------------------------------------------------------------------------------------------- GEORGE R. JAY Vice 1996 2001 Mr. Jay serves as Assistant Vice (age 51) President, President of Hartford Life Insurance Controller and Company's Equity Products Department. He Treasurer is also Controller of HL Advisors and Vice President of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- STEPHEN T. JOYCE Vice President 2000 2001 Mr. Joyce currently serves as Senior Vice (age 44) President and Director of the Institutional Products Group for Hartford Life Insurance Company. Mr. Joyce is also Senior Vice President HL Advisors and Vice President of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. Previously, he served as Vice President (1997-1999) and Assistant Vice President (1994-1997) of Hartford Life Insurance Company. - ---------------------------------------------------------------------------------------------------- DAVID N. LEVENSON Vice President 2000 2001 Mr. Levenson serves as Senior Vice (age 37) President of Hartford Life Insurance Company's Retail Product Management Group and is responsible for all retail product management and profitability. Mr. Levenson is also a Senior Vice President of HIFSCO. In addition, he serves as Vice President of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. Mr. Levenson joined The Hartford in 1995. - ---------------------------------------------------------------------------------------------------- <Caption> NON-INTERESTED DIRECTORS NON-INTERESTED DIRECTORS - ------------------------ ----------------------------------- NUMBER OF PORTFOLIOS IN FUND COMPLEX OTHER OVERSEEN BY DIRECTORSHIPS NAME AND AGE DIRECTOR HELD BY DIRECTOR - ------------------------ ----------------------------------- BRUCE FERRIS N/A N/A (age 48) - ---------------------------------------------------------------------------------------------------- MARY JANE FORTIN N/A N/A (age 39) - ---------------------------------------------------------------------------------------------------- GEORGE R. JAY N/A N/A (age 51) - ---------------------------------------------------------------------------------------------------- STEPHEN T. JOYCE N/A N/A (age 44) - ---------------------------------------------------------------------------------------------------- DAVID N. LEVENSON N/A N/A (age 37) - ---------------------------------------------------------------------------------------------------- </Table> 166 HARTFORD SERIES FUND, INC. AND HARTFORD HLS SERIES FUND II, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> NON-INTERESTED DIRECTORS - ---------------------------------------------------------------------------------------------------- TERM OF OFFICE* AND LENGTH OF POSITION HELD TIME SERVED WITH THE -------------- PRINCIPAL OCCUPATION(S) NAME AND AGE COMPANY SF(1) SF2(2) DURING PAST 5 YEARS - ---------------------------------------------------------------------------------------------------- JOHN C. WALTERS Vice President 2000 2001 Mr. Walters serves as Executive Vice (age 41) President and Director of the Investment Products Division of Hartford Life Insurance Company. Mr. Walters is also a Managing Member and Executive Vice President of HIFSCO and HL Advisors. In addition, he is Vice President of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. Previously, Mr. Walters was with First Union Securities. - ---------------------------------------------------------------------------------------------------- <Caption> NON-INTERESTED DIRECTORS NON-INTERESTED DIRECTORS - ------------------------ ----------------------------------- NUMBER OF PORTFOLIOS IN FUND COMPLEX OTHER OVERSEEN BY DIRECTORSHIPS NAME AND AGE DIRECTOR HELD BY DIRECTOR - ------------------------ ----------------------------------- JOHN C. WALTERS N/A N/A (age 41) - ---------------------------------------------------------------------------------------------------- </Table> * Each director and officer may serve until his or her successor is elected and qualifies. (1) Hartford Series Fund, Inc. (2) Hartford HLS Series Fund II, Inc. (3) Ms. Coleman and Mr. Pryor served as directors, beginning in 1995 and 1977, respectively, of certain Maryland corporations (each of which was registered with the SEC as an open-end management investment company) that were reorganized as investment portfolios (series) of Hartford Series Fund, Inc. on August 28, 2002. (4) "Interested person" of each Company as defined in the Investment Company Act of 1940 because of the person's affiliation with or equity ownership of [Hartford Investment Financial Services, LLC] or affiliated companies. (5) President and Director of Hartford Series Fund, Inc.; President but not Director of Hartford HLS Series Fund II, Inc. The Funds' Statements of Additional Information (SAI) include further information about fund directors and are available without charge upon request by calling 1-800-862-6668 or writing: Hartford HLS Funds, c/o Individual Annuity Services, P.O. Box 5085, Hartford, CT 06102-5085. 167 PRIVACY POLICY AND PRACTICES OF THE HARTFORD FINANCIAL SERVICES GROUP, INC. AND ITS AFFILIATES (HEREIN CALLED "WE, OUR, AND US") This Privacy Policy applies to our United States Operations We value your trust. We are committed to the responsible: a) management; b) use; and c) protection; of PERSONAL INFORMATION. This notice describes how we collect, disclose, and protect PERSONAL INFORMATION. We collect PERSONAL INFORMATION to: a) service your TRANSACTIONS with us; and b) support our business functions. We may obtain PERSONAL INFORMATION from: a) YOU; b) your TRANSACTIONS with us; and c) third parties such as a consumer-reporting agency. Based on the type of product or service YOU apply for or get from us, PERSONAL INFORMATION such as: a) your name; b) your address; c) your income; d) your payment; or e) your credit history; may be gathered from sources such as applications, TRANSACTIONS, and consumer reports. To serve YOU and service our business, we may share certain PERSONAL INFORMATION. We will share PERSONAL INFORMATION, only as allowed by law, with affiliates such as: a) our insurance companies; b) our employee agents; c) our brokerage firms; and d) our administrators. As allowed by law, we may share PERSONAL FINANCIAL INFORMATION with our affiliates to: a) market our products; or b) market our services; to YOU without providing YOU with an option to prevent these disclosures. We may also share PERSONAL INFORMATION, only as allowed by law, with unaffiliated third parties including: a) independent agents; b) brokerage firms; c) insurance companies; d) administrators; and e) service providers; who help us serve YOU and service our business. When allowed by law, we may share certain PERSONAL FINANCIAL INFORMATION with other unaffiliated third parties who assist us by performing services or functions such as: a) taking surveys; b) marketing our products or services; or c) offering financial products or services under a joint agreement between us and one or more financial institutions. We will not sell or share your PERSONAL FINANCIAL INFORMATION with anyone for purposes unrelated to our business functions without offering YOU the opportunity to: a) "opt-out;" or b) "opt-in;" as required by law. We only disclose PERSONAL HEALTH INFORMATION with: a) your proper written authorization; or b) as otherwise allowed or required by law. Our employees have access to PERSONAL INFORMATION in the course of doing their jobs, such as: a) underwriting policies; b) paying claims; c) developing new products; or d) advising customers of our products and services. We use manual and electronic security procedures to maintain: a) the confidentiality; and b) the integrity of; PERSONAL INFORMATION that we have. We use these procedures to guard against unauthorized access. 168 Some techniques we use to protect PERSONAL INFORMATION include: a) secured files; b) user authentication; c) encryption; d) firewall technology; and e) the use of detection software. We are responsible for and must: a) identify information to be protected; b) provide an adequate level of protection for that data; c) grant access to protected data only to those people who must use it in the performance of their job-related duties. Employees who violate our Privacy Policy will be subject to discipline, which may include ending their employment with us. At the start of our business relationship, we will give YOU a copy of our current Privacy Policy. We will also give YOU a copy of our current Privacy Policy once a year if YOU maintain a continuing business relationship with us. We will continue to follow our Privacy Policy regarding PERSONAL INFORMATION even when a business relationship no longer exists between us. As used in this Privacy Notice: APPLICATION means your request for our product or service. PERSONAL FINANCIAL INFORMATION means financial information such as: a) credit history; b) income; c) financial benefits; or d) policy or claim information. PERSONAL HEALTH INFORMATION means health information such as: a) your medical records; or b) information about your illness, disability or injury. PERSONAL INFORMATION means information that identifies YOU personally and is not otherwise available to the public. It includes: a) PERSONAL FINANCIAL INFORMATION; and b) PERSONAL HEALTH INFORMATION. TRANSACTION means your business dealings with us, such as: a) your APPLICATION; b) your request for us to pay a claim; and c) your request for us to take an action on your account. YOU means an individual who has given us PERSONAL INFORMATION in conjunction with: a) asking about; b) applying for; or c) obtaining; a financial product or service from us if the product or service is used mainly for personal, family, or household purposes. This Privacy Policy is being provided on behalf of the following affiliates of The Hartford Financial Services Group, Inc.: American Maturity Life Insurance Company; Capstone Risk Management, LLC; First State Insurance Company; Hart Life Insurance Company; Hartford Accident & Indemnity Company; Hartford Administrative Services Company; Hartford Casualty Insurance Company; Hartford Equity Sales Company, Inc.; Hartford Fire Insurance Company; Hartford HLS Series Fund II, Inc.; Hartford Insurance Company of Illinois; Hartford Insurance Company of the Midwest; Hartford Insurance Company of the Southeast; Hartford International Life Reassurance Corporation; Hartford Investment Financial Services, LLC; Hartford Investment Management Company; Hartford Life & Accident Insurance Company; Hartford Life and Annuity Insurance Company; Hartford Life Insurance Company; Hartford Lloyd's Insurance Company; Hartford Securities Distribution Company, Inc.; Hartford Series Fund, Inc.; Hartford Specialty Company; Hartford Underwriters Insurance Company; Hartford-Comprehensive Employee Benefit Service Company; International Corporate Marketing Group, LLC; New England Insurance Company; Nutmeg Insurance Agency, Inc.; Nutmeg Insurance Company; Nutmeg Life Insurance Company; Omni General Agency, Inc.; Omni Indemnity Company; Omni Insurance Company; P2P Link, LLC; Pacific Insurance Company, Limited; Planco Financial Services, Inc.; Property and Casualty Insurance Company of Hartford; Sentinel Insurance Company, Ltd.; Servus Life Insurance Company; Specialty Risk Services, Inc.; The Hartford Income Shares Fund, Inc.; The Hartford Mutual Funds II, Inc.; The Hartford Mutual Funds, Inc.; Trumbull Insurance Company; Trumbull Services, L.L.C.; Twin City Fire Insurance Company; Woodbury Financial Services, Inc. 169 PRIVACY POLICY AND PRACTICES OF THE HARTFORD FINANCIAL SERVICES GROUP, INC. AND ITS AFFILIATES (HEREIN CALLED "WE, OUR, AND US") This Privacy Policy applies to our United States Operations We value your trust. We are committed to the responsible: a) management; b) use; and c) protection; of PERSONAL INFORMATION. This notice describes how we collect, disclose, and protect PERSONAL INFORMATION. We collect PERSONAL INFORMATION to: a) service your TRANSACTIONS with us; and b) support our business functions. We may obtain PERSONAL INFORMATION from: a) YOU; b) your TRANSACTIONS with us; and c) third parties such as a consumer-reporting agency. Based on the type of product or service YOU apply for or get from us, PERSONAL INFORMATION such as: a) your name; b) your address; c) your income; d) your payment; or e) your credit history; may be gathered from sources such as applications, TRANSACTIONS, and consumer reports. To serve YOU and service our business, we may share certain PERSONAL INFORMATION. We will share PERSONAL INFORMATION, only as allowed by law, with affiliates such as: a) our insurance companies; b) our employee agents; c) our brokerage firms; and d) our administrators. As allowed by law, we may share PERSONAL FINANCIAL INFORMATION with our affiliates to: a) market our products; or b) market our services; to YOU without providing YOU with an option to prevent these disclosures. We may also share PERSONAL INFORMATION, only as allowed by law, with unaffiliated third parties including: a) independent agents; b) brokerage firms; c) insurance companies; d) administrators; and e) service providers; who help us serve YOU and service our business. When allowed by law, we may share certain PERSONAL FINANCIAL INFORMATION with other unaffiliated third parties who assist us by performing services or functions such as: a) taking surveys; b) marketing our products or services; or c) offering financial products or services under a joint agreement between us and one or more financial institutions. We will not sell or share your PERSONAL FINANCIAL INFORMATION with anyone for purposes unrelated to our business functions without offering YOU the opportunity to: a) "opt-out;" or b) "opt-in;" as required by law. We only disclose PERSONAL HEALTH INFORMATION with: a) your proper written authorization; or b) as otherwise allowed or required by law. Our employees have access to PERSONAL INFORMATION in the course of doing their jobs, such as: a) underwriting policies; b) paying claims; c) developing new products; or d) advising customers of our products and services. We use manual and electronic security procedures to maintain: a) the confidentiality; and b) the integrity of; PERSONAL INFORMATION that we have. We use these procedures to guard against unauthorized access. 170 Some techniques we use to protect PERSONAL INFORMATION include: a) secured files; b) user authentication; c) encryption; d) firewall technology; and e) the use of detection software. We are responsible for and must: a) identify information to be protected; b) provide an adequate level of protection for that data; c) grant access to protected data only to those people who must use it in the performance of their job-related duties. Employees who violate our Privacy Policy will be subject to discipline, which may include ending their employment with us. At the start of our business relationship, we will give YOU a copy of our current Privacy Policy. We will also give YOU a copy of our current Privacy Policy once a year if YOU maintain a continuing business relationship with us. We will continue to follow our Privacy Policy regarding PERSONAL INFORMATION even when a business relationship no longer exists between us. As used in this Privacy Notice: APPLICATION means your request for our product or service. PERSONAL FINANCIAL INFORMATION means financial information such as: a) credit history; b) income; c) financial benefits; or d) policy or claim information. PERSONAL HEALTH INFORMATION means health information such as: a) your medical records; or b) information about your illness, disability or injury. PERSONAL INFORMATION means information that identifies YOU personally and is not otherwise available to the public. It includes: a) PERSONAL FINANCIAL INFORMATION; and b) PERSONAL HEALTH INFORMATION. TRANSACTION means your business dealings with us, such as: a) your APPLICATION; b) your request for us to pay a claim; and c) your request for us to take an action on your account. YOU means an individual who has given us PERSONAL INFORMATION in conjunction with: a) asking about; b) applying for; or c) obtaining; a financial product or service from us if the product or service is used mainly for personal, family, or household purposes. This Privacy Policy is being provided on behalf of the following affiliates of The Hartford Financial Services Group, Inc.: American Maturity Life Insurance Company; Capstone Risk Management, LLC; First State Insurance Company; Hart Life Insurance Company; Hartford Accident & Indemnity Company; Hartford Administrative Services Company; Hartford Casualty Insurance Company; Hartford Equity Sales Company, Inc.; Hartford Fire Insurance Company; Hartford HLS Series Fund II, Inc.; Hartford Insurance Company of Illinois; Hartford Insurance Company of the Midwest; Hartford Insurance Company of the Southeast; Hartford International Life Reassurance Corporation; Hartford Investment Financial Services, LLC; Hartford Investment Management Company; Hartford Life & Accident Insurance Company; Hartford Life and Annuity Insurance Company; Hartford Life Insurance Company; Hartford Lloyd's Insurance Company; Hartford Securities Distribution Company, Inc.; Hartford Series Fund, Inc.; Hartford Specialty Company; Hartford Underwriters Insurance Company; Hartford-Comprehensive Employee Benefit Service Company; International Corporate Marketing Group, LLC; New England Insurance Company; Nutmeg Insurance Agency, Inc.; Nutmeg Insurance Company; Nutmeg Life Insurance Company; Omni General Agency, Inc.; Omni Indemnity Company; Omni Insurance Company; P2P Link, LLC; Pacific Insurance Company, Limited; Planco Financial Services, Inc.; Property and Casualty Insurance Company of Hartford; Sentinel Insurance Company, Ltd.; Servus Life Insurance Company; Specialty Risk Services, Inc.; The Hartford Income Shares Fund, Inc.; The Hartford Mutual Funds II, Inc.; The Hartford Mutual Funds, Inc.; Trumbull Insurance Company; Trumbull Services, L.L.C.; Twin City Fire Insurance Company; Woodbury Financial Services, Inc. 171 - ------------------------- PRESORTED The Hartford STANDARD P.O. Box 5085 U.S. POSTAGE Hartford, CT 06102-5085 PAID - ------------------------- HUDSON, MA PERMIT NO. 6 THE TD WATERHOUSE VARIABLE ANNUITY HARTFORD INDEX HLS FUND ANNUAL REPORT AND MANAGER DISCUSSIONS DECEMBER 31, 2003 Issued by: First Fortis Life Insurance Company IMPORTANT NOTICE TO CONTRACT OWNERS The Hartford is committed to doing what we can to prevent improper trading activity within our products, and will continue to react to industry "best practices" with respect to this type of activity. We have recently enhanced the language in our variable annuity and variable life insurance policies prospectus surrounding our transfer restrictions by adding the following language to your prospectus: The underlying Funds are available for use with many different variable annuity products, variable life insurance policies, and funding agreements, and they are offered directly to certain qualified retirement plans. Some of these products and plans may have different transfer restrictions or no transfer restrictions at all. In addition, as a result of settlement of litigation against Hartford, with respect to certain owners of older Contracts, we currently only have the ability to restrict transfers into certain funds and to limit the total Contract Value invested in any one Fund. The effect on you may include higher transaction costs or lower performance. To obtain a copy of our latest prospectus for your variable annuity, variable life insurance policies or the underlying funds, please log on to www.hartfordinvestor.com or call 800-862-6668 for variable annuity or 800-800-2000, extension 13028, for variable life insurance policies. ________________________________________________________________________ ARE NOT INSURED BY FDIC OR ANY FEDERAL GOVERNMENT AGENCY | MAY LOSE VALUE ________________________________________________________________________ ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE ________________________________________________________________________ [NO FDIC LOGO] [NO BANK LOGO] Hartford Index HLS Fund inception 5/1/1987 (subadvised by Hartford Investment Management Company) PERFORMANCE OVERVIEW 12/31/93 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> INDEX IA S&P 500 INDEX -------- ------------- 12/31/93 10000.00 10000.00 10331.00 10340.00 10046.00 10059.00 9608.00 9621.00 9726.00 9745.00 9881.00 9904.00 9646.00 9662.00 9959.00 9979.00 10361.00 10387.00 10107.00 10133.00 10328.00 10361.00 9952.00 9984.00 12/94 10094.00 10131.00 10353.00 10394.00 10751.00 10799.00 11062.00 11117.00 11380.00 11444.00 11825.00 11901.00 12093.00 12177.00 12489.00 12580.00 12515.00 12610.00 13030.00 13142.00 12966.00 13094.00 13527.00 13670.00 12/95 13783.00 13933.00 14242.00 14407.00 14365.00 14541.00 14508.00 14681.00 14706.00 14897.00 15080.00 15279.00 15123.00 15337.00 14443.00 14660.00 14740.00 14969.00 15557.00 15810.00 15976.00 16246.00 17178.00 17473.00 12/96 16828.00 17127.00 17863.00 18196.00 17997.00 18340.00 17242.00 17588.00 18270.00 18636.00 19379.00 19769.00 20231.00 20655.00 21831.00 22297.00 20602.00 21048.00 21722.00 22199.00 20991.00 21458.00 21945.00 22451.00 12/97 22315.00 22838.00 22556.00 23089.00 24172.00 24753.00 25399.00 26021.00 25647.00 26284.00 25191.00 25832.00 26212.00 26880.00 25923.00 26595.00 22166.00 22749.00 23583.00 24208.00 25491.00 26175.00 27020.00 27761.00 12/98 28577.00 29361.00 29752.00 30588.00 28816.00 29638.00 29959.00 30823.00 31102.00 32017.00 30347.00 31262.00 32031.00 32997.00 31016.00 31966.00 30860.00 31807.00 30007.00 30935.00 31890.00 32892.00 32526.00 33561.00 12/99 34432.00 35538.00 32692.00 33752.00 32061.00 33114.00 35174.00 36351.00 34105.00 35258.00 33391.00 34534.00 34204.00 35386.00 33658.00 34833.00 35734.00 36995.00 33837.00 35043.00 33682.00 34894.00 31018.00 32145.00 12/00 31161.00 32303.00 32253.00 33448.00 29301.00 30400.00 27436.00 28475.00 29557.00 30685.00 29742.00 30891.00 29005.00 30140.00 28709.00 29843.00 26900.00 27977.00 24709.00 25719.00 25175.00 26210.00 27096.00 28220.00 12/01 27324.00 28468.00 26911.00 28053.00 26384.00 27512.00 27366.00 28547.00 25698.00 26817.00 25494.00 26620.00 23675.00 24725.00 21821.00 22799.00 21955.00 22947.00 19562.00 20455.00 21281.00 22253.00 22521.00 23561.00 12/02 21190.00 22178.00 20628.00 21599.00 20312.00 21275.00 20501.00 21481.00 22193.00 23249.00 23349.00 24473.00 23635.00 24786.00 24044.00 25223.00 24501.00 25714.00 24231.00 25442.00 25593.00 26879.00 25809.00 27115.00 12/03 27152.00 28536.00 </Table> <Table> --- INDEX IA --- S&P 500 INDEX $10,000 starting value $10,000 starting value $27,152 ending value $28,536 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR 10 YEAR - --------------------------------------------- Index IA 28.13% -1.02% 10.50% - --------------------------------------------- Index IB(5) 27.81% -1.23% 10.25% - --------------------------------------------- S&P 500 Index 28.67% -0.57% 11.06% - --------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER JULIET MURPHY, CFA, CPA Investment Officer - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Index HLS Fund, Class IA returned 28.13% for the 12 months ended December 31, 2003. The Fund outperformed the Lipper S&P 500 Index Objective VA-UF Average, which returned 28.01%, over the same period. The Fund underperformed the S&P 500 Index, which returned 28.67% over the same period. WHY DID THE FUND PERFORM THIS WAY? The Fund posted returns of 28.13% in 2003, its first positive return after three years of double-digit negative returns. The Fund led the benchmark by 2 basis points, the result of a cash receipt to settle a class action suit, which was not included in the benchmark. Only three months posted negative returns in 2003 -- January, February, and September. In the beginning of the year, the market reacted strongly to any news out of the Middle East. The threat of a war with Iraq was very real, and days of new releases regarding Iraq and weapons inspections were the days that suffered the greatest losses. We recovered a bit in March, with a slight positive return, and from there on, it was smooth sailing for the year. Volatility declined throughout the year, and market movements were mostly results of geopolitical and economic news, though the market was much less sensitive to such news than it had been during the first few months of the year. April and May were very strong, with positive news out of Iraq, which is to say that U.S. casualties were lower than expected and it seemed that we were making progress. The next three months were slower, as the number of casualties climbed, and we weren't seeing the progress we had seen during the first few months of the war. Add to this the plunging dollar and continued employment weakness, and it would make sense that the market would take a breather for a few months. The month of September was disappointing, with news of mutual fund scandals and poor economic numbers; we saw the negative returns for the first time in seven months. October was strong, though, with improvements in the employment situation and strong earnings. We finished the year on a high note, with the market closing at over 1100 on 12/29 -- the first time it closed over this level since May 2002. During 2002, dips in the market had been viewed as investors running for cover. In 2003, however, such dips were viewed more as opportunities to buy, and it seemed that even the bad news didn't keep investors disinterested for long. After the unprecedented bull market of the late 1990s, and the following three-year decline, it seemed that investors were ready to get involved again. Mutual fund inflows have increased over the last several months, but they are nowhere near the levels they were in the late 1990s. We believe they will continue to increase as the employment situation improves. WHAT IS YOUR OUTLOOK AND STRATEGY? Looking ahead, we have a tough act to follow, after the gains in the last year. Although the late 1990s posted back-to-back gains, we considered that period to be an aberration. The likelihood of another strong year in stocks is low, especially after reviewing the stock market over the past 100 years. As we know, historical data can't be used to predict the future, but it is food for thought. Another concern for 2004 is the possibility of downward earnings revisions by analysts. With the economy gaining strength, analysts have been raising estimates for several quarters, and they appear to be continuing with that trend. Recall the crucial role that earnings estimates and revisions played in 2001 and 2002, as the market was falling. Downward revisions sent the market into a tailspin during that period, and such revisions in 2004 could hit investor psyche especially hard. Another concern is interest rates. It seems likely that investors will start to worry about inflation in the near future, so it isn't unreasonable to assume that the 10-year treasury yields will migrate to the 5.00%-5.25% range. The declining U.S. dollar could prompt foreign investors to demand higher compensation (higher interest rates) to offset the currency risk, and these increases in yields could put pressure on equity valuations, causing the market to soften. In summary, we believe the first half of 2004 will show gains, but beyond that, there are some factors that could cause the market to pull back during the second half. 1 HARTFORD INDEX HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- COMMON STOCKS -- 99.5% AEROSPACE & DEFENSE -- 0.1% 86 Raytheon Co. ..................................... $ 2,575 ---------- APPAREL & TEXTILE -- 0.1% 26 Jones Apparel Group, Inc. ........................ 916 23 Liz Claiborne, Inc. .............................. 798 22 V. F. Corp. ...................................... 964 ---------- 2,678 ---------- BANKS -- 13.0% 72 AmSouth Bancorp................................... 1,773 265 American Express Co. ............................. 12,781 113 BB&T Corp. ....................................... 4,352 230 Bank One Corp. ................................... 10,500 306 Bank of America Corp. ............................ 24,625 159 Bank of New York Co., Inc. (The).................. 5,279 48 Capital One Financial Corp. ...................... 2,914 46 Charter One Financial, Inc. ...................... 1,584 1,063 Citigroup, Inc. .................................. 51,592 36 Comerica, Inc. ................................... 2,024 38 Countrywide Credit Industries, Inc. .............. 2,877 143 Federal Home Loan Mortgage Association............ 8,361 200 Federal National Mortgage Association............. 15,030 117 Fifth Third Bancorp............................... 6,930 26 First Tennessee National Corp. ................... 1,142 217 Fleet Boston Financial Corp. ..................... 9,485 31 Golden West Financial Corp. ...................... 3,234 47 Huntington Bancshares, Inc. ...................... 1,060 86 KeyCorp. ......................................... 2,532 263 MBNA Corp. ....................................... 6,542 47 Marshall & Ilsley Corp. .......................... 1,786 89 Mellon Financial Corp. ........................... 2,847 420 Morgan (J.P.) Chase & Co. ........................ 15,440 125 National City Corp. .............................. 4,250 31 North Fork Bancorp, Inc. ......................... 1,267 45 Northern Trust Corp. ............................. 2,109 57 PNC Financial Services Group...................... 3,125 *60 Providian Financial Corp. ........................ 696 46 Regions Financial Corp. .......................... 1,701 93 SLM Corp. ........................................ 3,499 68 SouthTrust Corp. ................................. 2,238 69 State Street Corp. ............................... 3,586 58 SunTrust Banks, Inc. ............................. 4,150 62 Synovus Financial Corp. .......................... 1,798 397 U.S. Bancorp...................................... 11,834 39 Union Planters Corp. ............................. 1,225 273 Wachovia Corp. ................................... 12,707 185 Washington Mutual, Inc. .......................... 7,433 349 Wells Fargo Co. .................................. 20,527 19 Zions Bancorp..................................... 1,135 ---------- 277,970 ---------- BUSINESS SERVICES -- 0.8% *209 Cendant Corp. .................................... 4,648 *96 Concord EFS, Inc. ................................ 1,422 *30 Convergys Corp. .................................. 515 29 Equifax, Inc. .................................... 702 17 Fluor Corp. ...................................... 672 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- BUSINESS SERVICES -- (CONTINUED) 85 Interpublic Group of Cos., Inc. (The)............. $ 1,333 *23 Monster Worldwide, Inc. .......................... 509 39 Omnicom Group, Inc. .............................. 3,421 78 Paychex, Inc. .................................... 2,891 *35 Robert Half International, Inc. .................. 824 ---------- 16,937 ---------- CHEMICALS -- 1.5% 47 Air Products & Chemicals, Inc. ................... 2,475 23 Avery Dennison Corp. ............................. 1,276 190 Dow Chemical Co. (The)............................ 7,882 205 du Pont (E.I.) de Nemours & Co. .................. 9,425 16 Eastman Chemical Co. ............................. 631 10 Great Lakes Chemical Corp. ....................... 283 19 International Flavors & Fragrances, Inc. ......... 676 54 Monsanto Co. ..................................... 1,554 35 PPG Industries, Inc. ............................. 2,239 67 Praxair, Inc. .................................... 2,561 46 Rohm & Haas Co. .................................. 1,959 ---------- 30,961 ---------- COMMUNICATIONS -- 4.6% *166 ADC Telecommunications, Inc. ..................... 493 64 ALLTEL Corp. ..................................... 2,995 163 AT&T Corp. ....................................... 3,303 *559 AT&T Wireless Services, Inc. ..................... 4,468 *32 Andrew Corp. ..................................... 364 *86 Avaya, Inc. ...................................... 1,111 381 BellSouth Corp. .................................. 10,775 *98 CIENA Corp. ...................................... 648 30 CenturyTel, Inc. ................................. 969 *40 Comverse Technology, Inc. ........................ 699 *864 Lucent Technologies, Inc. ........................ 2,454 480 Motorola, Inc. ................................... 6,748 *71 Network Appliance, Inc. .......................... 1,459 *227 Nextel Communications, Inc., Class A.............. 6,357 165 QUALCOMM, Inc. ................................... 8,893 *364 Qwest Communications International, Inc. ......... 1,574 36 Rockwell Collins, Inc. ........................... 1,094 682 SBC Communications, Inc. ......................... 17,783 31 Scientific-Atlanta, Inc. ......................... 854 *213 Sprint Corp. -- PCS Group ........................ 1,199 186 Sprint Corp. -- FON Group ........................ 3,058 *86 Tellabs, Inc. .................................... 725 569 Verizon Communications, Inc. ..................... 19,959 ---------- 97,982 ---------- COMPUTERS & OFFICE EQUIPMENT -- 6.2% 162 3M Co. ........................................... 13,751 *75 Apple Computer, Inc. ............................. 1,595 *1,422 Cisco Systems, Inc. .............................. 34,550 *528 Dell, Inc. ....................................... 17,917 *495 EMC Corp. ........................................ 6,397 *67 Gateway, Inc. .................................... 307 628 Hewlett-Packard Co. .............................. 14,431 354 International Business Machines Corp. ............ 32,855 71 International Game Technology..................... 2,546 </Table> The accompanying notes are an integral part of this financial statement. 2 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- COMMON STOCKS -- (CONTINUED) COMPUTERS & OFFICE EQUIPMENT -- (CONTINUED) *41 Jabil Circuit, Inc. .............................. $ 1,166 *27 Lexmark International, Inc. ...................... 2,086 48 Pitney Bowes, Inc. ............................... 1,957 *172 Solectron Corp. .................................. 1,018 48 Symbol Technologies, Inc. ........................ 803 ---------- 131,379 ---------- CONSTRUCTION -- 0.2% 13 Centex Corp. ..................................... 1,377 10 Kaufman & Broad Home Corp. ....................... 693 13 Pulte Corp. ...................................... 1,193 ---------- 3,263 ---------- CONSUMER DURABLES -- 0.5% *274 Corning, Inc. .................................... 2,858 19 Grainger (W.W.), Inc. ............................ 891 19 Johnson Controls, Inc. ........................... 2,157 40 Leggett & Platt, Inc. ............................ 855 95 Masco Corp. ...................................... 2,616 56 Newell Rubbermaid, Inc. .......................... 1,286 27 Visteon Corp. .................................... 281 ---------- 10,944 ---------- CONSUMER NON-DURABLES -- 4.0% 12 Alberto-Culver Co., Class B....................... 762 23 AmerisourceBergen Corp. .......................... 1,297 49 Avon Products, Inc. .............................. 3,290 13 Brown-Forman Corp., Class B....................... 1,170 89 Cardinal Health, Inc. ............................ 5,453 43 Clorox Co. (The).................................. 2,111 111 Colgate-Palmolive Co. ............................ 5,540 59 Eastman Kodak Co. ................................ 1,515 53 Ecolab, Inc. ..................................... 1,452 208 Gillette Co. (The)................................ 7,656 36 Hasbro, Inc. ..................................... 766 89 Mattel, Inc. ..................................... 1,707 60 McKesson Corp. ................................... 1,931 *56 Medco Health Solutions, Inc. ..................... 1,892 267 Procter & Gamble Co. (The)........................ 26,681 133 SYSCO Corp. ...................................... 4,965 *91 Safeway, Inc. .................................... 1,997 28 Supervalu, Inc. .................................. 791 30 Tiffany & Co. .................................... 1,365 +412 Tyco International Ltd. .......................... 10,916 *163 Xerox Corp. ...................................... 2,252 ---------- 85,509 ---------- CONSUMER SERVICES -- 0.2% 35 Cintas Corp. ..................................... 1,765 37 H&R Block, Inc. .................................. 2,034 13 Ryder System, Inc. ............................... 451 ---------- 4,250 ---------- DRUGS -- 7.9% 322 Abbott Laboratories............................... 15,012 *266 Amgen, Inc. ...................................... 16,423 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- DRUGS -- (CONTINUED) *68 Biogen Idec, Inc. ................................ $ 2,483 400 Bristol-Myers Squibb Co. ......................... 11,428 *39 Chiron Corp. ..................................... 2,205 231 Eli Lilly & Co. .................................. 16,272 *75 Forest Laboratories, Inc. ........................ 4,654 *46 Genzyme Corp. .................................... 2,280 *50 King Pharmaceuticals, Inc. ....................... 759 *51 MedImmune, Inc. .................................. 1,295 458 Merck & Co., Inc. ................................ 21,180 1,572 Pfizer, Inc. ..................................... 55,550 303 Schering-Plough Corp. ............................ 5,265 14 Sigma-Aldrich Corp. .............................. 819 *22 Watson Pharmaceuticals, Inc. ..................... 1,022 274 Wyeth............................................. 11,646 ---------- 168,293 ---------- EDUCATION -- 0.1% *36 Apollo Group, Inc. ............................... 2,468 ---------- ELECTRICAL EQUIPMENT -- 0.8% *98 Agilent Technologies, Inc. ....................... 2,866 27 Allergan, Inc. ................................... 2,061 43 Applera Corp. -- Applied Biosystems Group......... 888 32 Danaher Corp. .................................... 2,905 *40 KLA-Tencor Corp. ................................. 2,351 *10 Millipore Corp. .................................. 433 26 PerkinElmer, Inc. ................................ 445 38 Rockwell Automation, Inc. ........................ 1,368 17 Tektronix, Inc. .................................. 550 *39 Teradyne, Inc. ................................... 1,004 *34 Thermo Electron Corp. ............................ 845 *25 Waters Corp. ..................................... 829 ---------- 16,545 ---------- ELECTRONICS -- 7.4% *72 Advanced Micro Devices, Inc. ..................... 1,071 *78 Altera Corp. ..................................... 1,771 41 American Power Conversion Corp. .................. 1,000 76 Analog Devices, Inc. ............................. 3,457 *63 Applied Micro Circuits Corp. ..................... 379 *62 Broadcom Corp., Class A........................... 2,127 19 Cooper Industries Ltd. ........................... 1,113 87 Emerson Electric Co. ............................. 5,615 2,069 General Electric Co. ............................. 64,090 1,346 Intel Corp. ...................................... 43,336 *296 JDS Uniphase Corp. ............................... 1,079 *78 LSI Logic Corp. .................................. 692 64 Linear Technology Corp. .......................... 2,709 68 Maxim Integrated Products, Inc. .................. 3,371 16 Maytag Corp. ..................................... 451 *126 Micron Technology, Inc. .......................... 1,695 39 Molex, Inc. ...................................... 1,370 *33 NVIDIA Corp. ..................................... 777 *38 National Semiconductor Corp. ..................... 1,503 *31 Novellus Systems, Inc. ........................... 1,320 *36 PMC-Sierra, Inc. ................................. 717 *17 Power-One, Inc. .................................. 186 *20 QLogic Corp. ..................................... 1,006 </Table> The accompanying notes are an integral part of this financial statement. 3 HARTFORD INDEX HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- COMMON STOCKS -- (CONTINUED) ELECTRONICS -- (CONTINUED) *107 Sanmina-SCI Corp. ................................ $ 1,344 357 Texas Instruments, Inc. .......................... 10,477 12 Thomas & Betts Corp. ............................. 277 14 Whirlpool Corp. .................................. 1,042 *71 Xilinx, Inc. ..................................... 2,732 ---------- 156,707 ---------- ENERGY & SERVICES -- 5.7% 18 Amerada Hess Corp. ............................... 983 52 Anadarko Petroleum Corp. ......................... 2,639 33 Apache Corp. ..................................... 2,710 14 Ashland, Inc. .................................... 623 *33 BJ Services Co. .................................. 1,170 41 Burlington Resources, Inc. ....................... 2,267 220 ChevronTexaco Corp. .............................. 19,029 140 Conoco, Inc. ..................................... 9,197 48 Devon Energy Corp. ............................... 2,743 24 EOG Resources, Inc. .............................. 1,094 1,362 Exxon Mobil Corp. ................................ 55,835 90 Halliburton Co. .................................. 2,346 21 Kerr-McGee Corp. ................................. 964 64 Marathon Oil Corp. ............................... 2,115 *30 Nabors Industries Ltd. ........................... 1,255 *28 Noble Corp. ...................................... 988 79 Occidental Petroleum Corp. ....................... 3,351 *19 Rowan Cos., Inc. ................................. 449 121 Schlumberger Ltd. ................................ 6,598 16 Sunoco, Inc. ..................................... 813 *66 Transocean, Inc. ................................. 1,583 53 Unocal Corp. ..................................... 1,966 ---------- 120,718 ---------- FINANCIAL SERVICES -- 2.3% 20 Bear Stearns Cos., Inc. (The)..................... 1,614 279 Charles Schwab Corp. (The)........................ 3,309 22 Federated Investors, Inc., Class B................ 658 52 Franklin Resources, Inc. ......................... 2,693 98 Goldman Sachs Group, Inc. (The)................... 9,636 50 Janus Capital Group, Inc. ........................ 814 56 Lehman Brothers Holdings, Inc. ................... 4,323 195 Merrill Lynch & Co., Inc. ........................ 11,425 223 Morgan Stanley Dean Witter & Co. ................. 12,911 38 Plum Creek Timber Co., Inc. ...................... 1,148 26 T Rowe Price Group, Inc. ......................... 1,218 ---------- 49,749 ---------- FOOD, BEVERAGE & TOBACCO -- 5.0% 8 Adolph Coors Co., Class B......................... 422 418 Altria Group, Inc. ............................... 22,774 168 Anheuser Busch Cos., Inc. ........................ 8,842 133 Archer-Daniels-Midland Co. ....................... 2,028 85 Campbell Soup Co. ................................ 2,265 505 Coca-Cola Co. (The)............................... 25,636 94 Coca-Cola Enterprises, Inc. ...................... 2,049 111 ConAgra Foods, Inc. .............................. 2,918 77 General Mills, Inc. .............................. 3,483 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- FOOD, BEVERAGE & TOBACCO -- (CONTINUED) 72 Heinz (H.J.) Co. ................................. $ 2,640 *23 Hercules, Inc. ................................... 279 27 Hershey Foods Corp. .............................. 2,068 84 Kellogg Co. ...................................... 3,203 29 McCormick & Co., Inc. ............................ 861 54 Pepsi Bottling Group, Inc. (The).................. 1,308 354 PepsiCo, Inc. .................................... 16,488 17 Reynolds (R.J.) Tobacco Holdings, Inc. ........... 1,012 163 Sara Lee Corp. ................................... 3,536 34 UST, Inc. ........................................ 1,219 46 Wrigley (W.M.) Jr. Co. ........................... 2,600 ---------- 105,631 ---------- FOREST & PAPER PRODUCTS -- 0.9% 11 Bemis Co., Inc. .................................. 549 18 Boise Cascade Corp. .............................. 584 52 Georgia-Pacific Corp. ............................ 1,605 99 International Paper Co. .......................... 4,269 104 Kimberly-Clark Corp. ............................. 6,142 *22 Louisiana-Pacific Corp. .......................... 391 41 MeadWestvaco Corp. ............................... 1,231 *32 Pactiv Corp. ..................................... 773 11 Temple-Inland, Inc. .............................. 701 45 Weyerhaeuser Co. ................................. 2,897 ---------- 19,142 ---------- HEALTH SERVICES -- 0.4% *16 Express Scripts, Inc. ............................ 1,076 102 HCA, Inc. ........................................ 4,386 49 Health Management Associates, Inc., Class A....... 1,186 18 Manor Care, Inc. ................................. 634 *96 Tenet Healthcare Corp. ........................... 1,536 ---------- 8,818 ---------- HOTELS & GAMING -- 0.2% 78 Hilton Hotels Corp. .............................. 1,340 48 Marriott International, Inc., Class A............. 2,200 42 Starwood Hotels & Resorts Worldwide, Inc. ........ 1,500 ---------- 5,040 ---------- INSURANCE -- 5.5% 60 Ace Ltd. ......................................... 2,481 31 Aetna, Inc. ...................................... 2,124 108 AFLAC, Inc. ...................................... 3,923 151 Allstate Corp. (The).............................. 6,496 23 Ambac Financial Group, Inc. ...................... 1,589 560 American International Group, Inc. ............... 37,100 *29 Anthem, Inc. ..................................... 2,138 65 Aon Corp. ........................................ 1,547 30 CIGNA Corp. ...................................... 1,708 40 Chubb Corp. (The)................................. 2,743 34 Cincinnati Financial Corp. ....................... 1,442 *33 Humana, Inc. ..................................... 757 30 Jefferson-Pilot Corp. ............................ 1,509 61 John Hancock Financial Services, Inc. ............ 2,295 38 Lincoln National Corp. ........................... 1,520 40 Loews Corp. ...................................... 1,968 </Table> The accompanying notes are an integral part of this financial statement. 4 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- COMMON STOCKS -- (CONTINUED) INSURANCE -- (CONTINUED) 31 MBIA, Inc. ....................................... $ 1,833 21 MGIC Investment Corp. ............................ 1,205 109 Marsh & McLennan Cos., Inc. ...................... 5,231 161 MetLife, Inc. .................................... 5,411 68 Principal Financial Group (The)................... 2,259 46 Progressive Corp. (The)........................... 3,871 114 Prudential Financial, Inc. ....................... 4,774 30 SAFECO Corp. ..................................... 1,157 49 St. Paul Cos., Inc. (The)......................... 1,942 24 Torchmark Corp. .................................. 1,090 216 Travelers Property Casualty Corp. -- Class B...... 3,659 121 UnitedHealth Group, Inc. ......................... 7,032 63 UnumProvident Corp. .............................. 987 *31 Wellpoint Health Networks, Inc. .................. 3,039 30 XL Capital Ltd., Class A.......................... 2,288 ---------- 117,118 ---------- MACHINERY -- 1.4% *15 American Standard Cos., Inc. ..................... 1,511 *343 Applied Materials, Inc. .......................... 7,693 69 Baker Hughes, Inc. ............................... 2,218 16 Black & Decker Corp. (The)........................ 788 72 Caterpillar, Inc. ................................ 5,941 9 Cummins, Inc. .................................... 428 49 Deere (John) & Co. ............................... 3,217 42 Dover Corp. ...................................... 1,657 16 Eaton Corp. ...................................... 1,688 36 Ingersoll Rand Co. ............................... 2,426 26 Pall Corp. ....................................... 690 24 Parker-Hannifin Corp. ............................ 1,452 17 Stanley Works (The)............................... 632 ---------- 30,341 ---------- MEDIA & ENTERTAINMENT -- 3.9% *14 American Greetings Corp. ......................... 300 127 Clear Channel Communications, Inc. ............... 5,938 *464 Comcast Corp., Class A ........................... 15,244 23 Donnelly (R.R.) & Sons Co. ....................... 706 17 Dow Jones & Co., Inc. ............................ 837 56 Gannett Co., Inc. ................................ 4,976 23 Harrah's Entertainment, Inc. ..................... 1,131 16 Knight-Ridder, Inc. .............................. 1,274 39 McGraw-Hill Cos., Inc. (The)...................... 2,758 10 Meredith Corp. ................................... 506 31 New York Times Co. (The), Class A................. 1,466 *932 Time Warner, Inc. ................................ 16,761 64 Tribune Co. ...................................... 3,322 *+66 Univision Communications, Inc. ................... 2,635 360 Viacom, Inc., Class B............................. 15,993 421 Walt Disney Co. (The)............................. 9,832 ---------- 83,679 ---------- MEDICAL INSTRUMENTS & SUPPLIES -- 3.4% 11 Bard (C.R.), Inc. ................................ 867 11 Bausch & Lomb, Inc. .............................. 560 126 Baxter International, Inc. ....................... 3,836 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- MEDICAL INSTRUMENT & SUPPLIES -- (CONTINUED) 52 Becton, Dickinson & Co. .......................... $ 2,152 53 Biomet, Inc. ..................................... 1,918 *169 Boston Scientific Corp. .......................... 6,205 64 Guidant Corp. .................................... 3,858 612 Johnson & Johnson................................. 31,591 250 Medtronic, Inc. .................................. 12,139 *36 St. Jude Medical, Inc. ........................... 2,181 41 Stryker Corp. .................................... 3,494 *50 Zimmer Holdings, Inc. ............................ 3,509 ---------- 72,310 ---------- METALS, MINERALS & MINING -- 1.3% 178 Alcoa, Inc. ...................................... 6,776 17 Allegheny Technologies, Inc. ..................... 220 12 Ball Corp. ....................................... 691 12 Crane Co. ........................................ 375 26 Engelhard Corp. .................................. 773 30 Fortune Brands, Inc. ............................. 2,148 38 Freeport-McMoRan Copper & Gold, Inc., Class B..... 1,585 63 Illinois Tool Works, Inc. ........................ 5,323 89 Newmont Mining Corp. ............................. 4,328 16 Nucor Corp. ...................................... 901 *18 Phelps Dodge Corp. ............................... 1,402 12 Snap-On, Inc. .................................... 387 21 United States Steel Corp. ........................ 746 21 Vulcan Materials Co. ............................. 995 18 Worthington Industries, Inc. ..................... 319 ---------- 26,969 ---------- REAL ESTATE INVESTMENT TRUST -- 0.4% 19 Apartment Investment & Management Co., Class A.... 669 82 Equity Office Properties Trust.................... 2,361 57 Equity Residential Properties Trust............... 1,676 37 Prologis.......................................... 1,191 39 Simon Property Group, Inc. ....................... 1,826 ---------- 7,723 ---------- RESEARCH & TESTING FACILITIES -- 0.2% 31 Moody's Corp. .................................... 1,854 *21 Quest Diagnostics, Inc. .......................... 1,565 ---------- 3,419 ---------- RETAIL -- 7.5% 76 Albertson's, Inc. ................................ 1,712 *18 AutoZone, Inc. ................................... 1,558 *57 AutoNation, Inc. ................................. 1,042 *61 Bed Bath & Beyond, Inc. .......................... 2,645 67 Best Buy Co., Inc. ............................... 3,482 *24 Big Lots, Inc. ................................... 342 81 CVS Corp. ........................................ 2,939 43 Circuit City Stores Group......................... 437 *94 Costco Wholesale Corp. ........................... 3,507 34 Darden Restaurants, Inc. ......................... 715 17 Dillard's, Inc., Class A.......................... 282 </Table> The accompanying notes are an integral part of this financial statement. 5 HARTFORD INDEX HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- COMMON STOCKS -- (CONTINUED) RETAIL -- (CONTINUED) 69 Dollar General Corp. ............................. $ 1,458 *133 eBay, Inc. ....................................... 8,597 36 Family Dollar Stores, Inc. ....................... 1,274 37 Federated Department Stores, Inc. ................ 1,757 185 Gap, Inc. (The)................................... 4,284 469 Home Depot, Inc. (The)............................ 16,638 *70 Kohl's Corp. ..................................... 3,148 *154 Kroger Co. (The).................................. 2,841 106 Limited Brands, Inc. ............................. 1,920 162 Lowe's Cos., Inc. ................................ 8,972 59 May Department Stores Co. (The)................... 1,728 262 McDonald's Corp. ................................. 6,493 28 Nordstrom, Inc. .................................. 973 *65 Office Depot, Inc. ............................... 1,078 56 Penney (J.C.) Co., Inc. .......................... 1,478 34 RadioShack Corp. ................................. 1,038 52 Sears, Roebuck & Co. ............................. 2,381 30 Sherwin-Williams Co. (The)........................ 1,044 *102 Staples, Inc. .................................... 2,785 *81 Starbucks Corp. .................................. 2,665 104 TJX Cos., Inc. (The).............................. 2,286 188 Target Corp. ..................................... 7,211 *44 Toys "R" Us, Inc. ................................ 556 892 Wal-Mart Stores, Inc. ............................ 47,305 211 Walgreen Co. ..................................... 7,686 23 Wendy's International, Inc. ...................... 922 +29 Winn-Dixie Stores, Inc. .......................... 290 *61 YUM! Brands, Inc. ................................ 2,083 ---------- 159,552 ---------- RUBBER & PLASTICS PRODUCTS -- 0.3% 15 Cooper Tire & Rubber Co. ......................... 326 +36 Goodyear Tire & Rubber Co. (The).................. 284 54 NIKE, Inc., Class B............................... 3,705 12 Reebok International Ltd. ........................ 479 *18 Sealed Air Corp. ................................. 950 12 Tupperware Corp. ................................. 210 ---------- 5,954 ---------- SOFTWARE & SERVICES -- 6.1% 48 Adobe Systems, Inc. .............................. 1,894 23 Autodesk, Inc. ................................... 565 123 Automatic Data Processing, Inc. .................. 4,853 *47 BMC Software, Inc. ............................... 869 *34 Citrix Systems, Inc. ............................. 716 119 Computer Associates International, Inc. .......... 3,262 *39 Computer Sciences Corp. .......................... 1,708 *79 Compuware Corp. .................................. 478 10 Deluxe Corp. ..................................... 432 *61 Electronic Arts, Inc. ............................ 2,934 99 Electronic Data Systems Corp. .................... 2,430 150 First Data Corp. ................................. 6,172 *40 Fiserv, Inc. ..................................... 1,578 49 IMS Health, Inc. ................................. 1,226 *41 Intuit, Inc. ..................................... 2,164 *19 Mercury Interactive Corp. ........................ 905 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- SOFTWARE & SERVICES -- (CONTINUED) 2,228 Microsoft Corp. .................................. $ 61,347 *20 NCR Corp. ........................................ 757 *77 Novell, Inc. ..................................... 809 *1,077 Oracle Corp. ..................................... 14,214 *55 Parametric Technology Corp. ...................... 216 *77 PeopleSoft, Inc. ................................. 1,762 *102 Siebel Systems, Inc. ............................. 1,418 *673 Sun Microsystems, Inc. ........................... 3,022 *59 SunGard Data Systems, Inc. ....................... 1,640 *64 Symantec Corp. ................................... 2,200 *68 Unisys Corp. ..................................... 1,011 *88 VERITAS Software Corp. ........................... 3,274 *135 Yahoo!, Inc. ..................................... 6,117 ---------- 129,973 ---------- TRANSPORTATION -- 4.6% 173 Boeing Co. (The).................................. 7,304 19 Brunswick Corp. .................................. 602 77 Burlington Northern Santa Fe Corp. ............... 2,475 44 CSX Corp. ........................................ 1,585 130 Carnival Corp. ................................... 5,157 31 Dana Corp. ....................................... 561 115 Delphi Corp. ..................................... 1,179 25 Delta Airlines, Inc. ............................. 301 61 FedEx Corp. ...................................... 4,148 377 Ford Motor Co. ................................... 6,036 41 General Dynamics Corp. ........................... 3,683 116 General Motors Corp. ............................. 6,168 36 Genuine Parts Co. ................................ 1,191 24 Goodrich Corp. ................................... 720 62 Harley-Davidson, Inc. ............................ 2,966 178 Honeywell International, Inc. .................... 5,939 19 ITT Industries, Inc. ............................. 1,409 93 Lockheed Martin Corp. ............................ 4,774 *14 Navistar International Corp. ..................... 676 80 Norfolk Southern Corp. ........................... 1,902 38 Northrop Grumman Corp. ........................... 3,607 24 PACCAR, Inc. ..................................... 2,046 30 Sabre Holdings Corp. ............................. 638 162 Southwest Airlines Co. ........................... 2,617 28 Textron, Inc. .................................... 1,597 53 Union Pacific Corp. .............................. 3,655 232 United Parcel Service, Inc. ...................... 17,266 97 United Technologies Corp. ........................ 9,190 ---------- 99,392 ---------- UTILITIES -- 3.0% *128 AES Corp. (The)................................... 1,212 *26 Allegheny Energy, Inc. ........................... 334 *66 Allied Waste Industries, Inc. .................... 916 33 Ameren Corp. ..................................... 1,539 81 American Electric Power Co., Inc. ................ 2,482 33 CMS Energy Corp. ................................. 283 *+85 Calpine Corp. .................................... 409 63 Centerpoint Energy, Inc. ......................... 611 37 Cinergy Corp. .................................... 1,425 *59 Citizens Communications Co. ...................... 728 </Table> The accompanying notes are an integral part of this financial statement. 6 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- COMMON STOCKS -- (CONTINUED) UTILITIES -- (CONTINUED) 46 Consolidated Edison, Inc. ........................ $ 1,997 34 Constellation Energy Group, Inc. ................. 1,351 35 DTE Energy Co. ................................... 1,366 67 Dominion Resources, Inc. ......................... 4,267 187 Duke Energy Corp. ................................ 3,824 78 Dynegy Inc., Class A.............................. 333 *67 Edison International.............................. 1,472 125 El Paso Corp. .................................... 1,026 47 Entergy Corp. .................................... 2,691 67 Exelon Corp. ..................................... 4,471 38 FPL Group, Inc. .................................. 2,478 68 FirstEnergy Corp. ................................ 2,391 33 KeySpan Corp. .................................... 1,207 25 Kinder Morgan, Inc. .............................. 1,501 9 NICOR, Inc. ...................................... 308 54 NiSource, Inc. ................................... 1,187 *85 PG&E Corp. ....................................... 2,373 37 PPL Corp. ........................................ 1,597 8 Peoples Energy Corp. ............................. 320 19 Pinnacle West Capital Corp. ...................... 751 50 Progress Energy, Inc. ............................ 2,285 48 Public Service Enterprise Group, Inc. ............ 2,121 47 Sempra Energy..................................... 1,402 151 Southern Co. (The)................................ 4,562 +39 TECO Energy, Inc. ................................ 558 67 TXU Corp. ........................................ 1,583 120 Waste Management, Inc. ........................... 3,552 107 Williams Cos., Inc. (The)......................... 1,049 82 Xcel Energy, Inc. ................................ 1,396 ---------- 65,358 ---------- Total common stocks............................... $2,119,347 ========== SHORT-TERM SECURITIES -- 1.6% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 0.4% 8,871 Boston Global Investment Trust.................... $ 8,871 ---------- PRINCIPAL AMOUNT ------- REPURCHASE AGREEMENTS -- 1.1% $22,860 Joint Repurchase Agreement (See Note 2(d)) 0.84% due 01/02/04.................................... 22,860 ---------- U.S. TREASURY BILLS -- 0.1% 1,800 0.84% due 03/18/04................................ 1,797 525 0.84% due 03/18/04................................ 524 ---------- 2,321 ---------- Total short-term securities....................... $ 34,052 ========== </Table> <Table> <Caption> MARKET VALUE # ---------- DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $1,953,628)............. 99.5% $2,119,347 Total short-term securities (cost $34,052)........ 1.6 34,052 ----- ---------- Total investment in securities (total cost $1,987,680) -- including $8,575 of securities loaned (See Note 2(h)).......................... 101.1 2,153,399 Cash, receivables and other assets................ 0.1 3,019 Payable for securities purchased.................. (0.7) (14,647) Payable for Fund shares redeemed.................. (0.1) (2,405) Securities lending collateral payable to brokers (See Note 2(h))................................. (0.4) (8,871) Other liabilities................................. (0.0) (105) ----- ---------- Net assets........................................ 100.0% $2,130,390 ===== ========== </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 4,000,000 shares authorized; 72,006 shares outstanding...... $ 72 Paid in capital..................................... 1,965,154 Accumulated net investment income................... 1,722 Accumulated net realized loss on investments........ (2,595) Unrealized appreciation on investments.............. 165,719 Unrealized appreciation on futures contracts ++..... 318 ---------- Net assets.......................................... $2,130,390 ========== </Table> <Table> Class IA Net asset value per share ($1,934,490 / 65,362 shares outstanding) (3,500,000 shares authorized)......... $29.60 ====== Class IB Net asset value per share ($195,900 / 6,644 shares outstanding) (500,000 shares authorized)........... $29.49 ====== </Table> <Table> # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(h)). ++ The Fund had 49 Standard & Poor's 500 March 2004 Futures contracts open as of December 31, 2003. These contracts had a value of $13,605 as of December 31, 2003 and were collateralized by various U.S. Treasury Bills with a market value of $2,321. </Table> The accompanying notes are an integral part of this financial statement. 7 HARTFORD HLS MUTUAL FUNDS STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD INDEX HLS FUND --------- INVESTMENT INCOME: Dividends................................................. $ 31,995 Interest.................................................. 884 Securities lending........................................ 35 -------- Total investment income (loss).......................... 32,914 -------- EXPENSES: Investment advisory fees.................................. 3,587 Administrative services fees.............................. 3,587 Accounting services....................................... 359 Board of Directors fees................................... 21 Custodian fees, gross..................................... 41 Distribution Fees -- Class IB............................. 307 Other expenses............................................ 277 -------- Total expenses (before offsets)......................... 8,179 -------- Expenses paid indirectly (See Note 3(d)).................. 8 Custodian fees offset (See Note 3(d))..................... -- -------- Total expenses net...................................... 8,171 -------- Net investment income (loss).............................. 24,743 -------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on securities.................... 3,345 Net realized gain (loss) on futures contracts............. 2,949 Net unrealized appreciation (depreciation) on securities.............................................. 424,703 Net unrealized appreciation (depreciation) on futures contracts............................................... 609 -------- Net realized and unrealized gain (loss) on investments.... 431,606 -------- Net increase (decrease) in net assets resulting from operations.............................................. $456,349 ======== </Table> The accompanying notes are an integral part of this financial statement. 8 HARTFORD HLS MUTUAL FUNDS STATEMENTS OF CHANGES IN NET ASSETS (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD INDEX HLS FUND --------------------------------- FOR THE FOR THE YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, 2003 2002 ------------ ------------ OPERATIONS: Net investment income (loss).............................. $ 24,743 $ 21,815 Net realized gain (loss) on investments................... 6,294 2,513 Net unrealized appreciation (depreciation) on investments............................................. 425,312 (524,681) ---------- ---------- Net increase (decrease) in net assets resulting from operations.............................................. 456,349 (500,353) ---------- ---------- DISTRIBUTIONS TO SHAREHOLDERS: From net investment income Class IA................................................ (23,630) (19,562) Class IB................................................ (2,050) (725) From net realized gain on investments Class IA................................................ (5,282) (71,573) Class IB................................................ (445) (2,010) ---------- ---------- Total distributions..................................... (31,407) (93,870) ---------- ---------- CAPITAL SHARE TRANSACTIONS: Class IA................................................ (12,663) 154,200 Class IB................................................ 96,019 39,698 ---------- ---------- Net increase (decrease) from capital share transactions... 83,356 193,898 ---------- ---------- Net increase (decrease) in net assets..................... 508,298 (400,325) NET ASSETS: Beginning of period....................................... 1,622,092 2,022,417 ---------- ---------- End of period............................................. $2,130,390 $1,622,092 ========== ========== Accumulated net investment income (loss).................. $ 1,722 $ 2,680 ========== ========== </Table> 9 HARTFORD INDEX HLS FUND NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2003 ($000'S OMITTED) - -------------------------------------------------------------------------------- 1. ORGANIZATION: Hartford Index HLS Fund (The Fund) is organized under the laws of the State of Maryland and is registered with the Securities and Exchange Commission (SEC) under the Investment Company Act of 1940, as amended, as a diversified open-end management investment company. The Fund is a component of The Hartford HLS Mutual Funds (the "HLS Funds"). The Fund serves as the underlying investment vehicle for certain variable annuity and variable life insurance separate account contracts of First Fortis Life Insurance Company (collectively, The Company). The Fund is divided into Class IA and IB shares. Each class is offered at net asset value without a sales charge and is subject to the same expenses except that the Class IB shares are subject to distribution fees charged pursuant to a Rule 12b-1 plan. Distribution and Service Plans have been adopted in accordance with rule 12b-1 of the Investment Company Act of 1940, as amended. Income and expenses, realized and unrealized capital gains and losses are allocated to each class the Fund based on the ratio of prior day's net assets. 2. SIGNIFICANT ACCOUNTING POLICIES: The following is a summary of significant accounting policies of the Fund, which are in accordance with accounting principles generally accepted in the United States: a) Security Transactions -- Security transactions are recorded on the trade date (the day the order to buy or sell is executed). Security gains and losses are determined on the basis of identified cost. b) Security Valuation and Investment Income -- Equity securities are valued at the last sales price reported on the principal securities exchange on which such securities are traded (domestic or foreign) or on the principal over-the-counter market on which such securities are traded, as of the close of business on the day the securities are being valued. If no sale took place on a particular day, then such securities are valued at the mean between the bid and asked prices. For securities traded on the NASDAQ national market system, the Fund utilizes the NASDAQ Official Closing Price which compares the last trade to the bid/ask range of a security. If the last trade falls within the bid/ask range, then that price will be the closing price. If the last trade is outside the bid/ask range, and falls above the ask, the ask will be the closing price. If the last price is below the bid, the bid will be the closing price. The difference between cost and market value for debt and equity securities is recorded in the Statement of Operations and accumulated in net assets. Debt securities (other than short-term obligations) are valued on the basis of valuations furnished by an unaffiliated pricing service which determines valuations for normal institutional size trading units of debt securities. Mortgage securities are valued at the bid price. In the Fund, short-term investments with maturity of 60 days or less when purchased are valued at amortized cost, which approximates market value. Short-term investments with a maturity of more than 60 days when purchased are valued based on market quotations until the remaining days to maturity become less than 61 days. From such time until maturity, the investments are valued at amortized cost. The Fund uses market prices in valuing portfolio securities, but may use fair value estimates, under procedures established by the Board of Directors, if reliable market prices are unavailable. Fair value pricing may be used by a fund when current market values are unavailable or when an event occurs after the close of the exchange on which the fund's portfolio securities are principally traded that is likely to have changed the value of the securities. The Fund is supplied with information from an unaffiliated third party with respect to the fair value of foreign securities. Price movements in future contracts and ADRs, and various other indices may be reviewed in the course of making a good faith determination of a security's fair value. The use of fair value pricing by the Fund may cause the net asset value of its shares to differ significantly from the net asset value that would be calculated using current market values. Securities of foreign issuers and non-dollar securities are valued on the basis of quotations from the primary market in which they are traded, and are translated from the local currency into U.S. dollars using current exchange rates. Options are valued at the last sales price. If no sale took place on such day, then options are valued at the mean between the bid and asked prices. 10 Securities for which prices are not available from an independent pricing service, but where an active marker exists, are valued using market quotations obtained from one or more dealers that make markets in the securities or from an approved quotation system. Investment income such as dividend income is recorded on the ex-dividend date. Interest income, including amortization of bond premium and discount is recorded on the accrual basis. c) Foreign Currency Transactions -- The accounting records of the Fund is maintained in U.S. dollars. All assets and liabilities initially expressed in foreign currencies are converted into U.S. dollars at the prevailing exchange rates. Purchases and sales of investment securities, dividend and interest income and certain expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. The Fund does not isolate that portion of portfolio security valuation resulting from fluctuations in foreign currency exchange rates on portfolio securities from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments in the accompanying financial statements. Net realized foreign exchange gains or losses arise from sales of foreign currencies and the difference between asset and liability amounts initially stated in foreign currencies and the U.S. dollar value of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of other assets and liabilities at the end of the reporting period, resulting from changes in the exchange rates. d) Repurchase Agreements -- A repurchase agreement is an agreement by which the seller of a security agrees to repurchase the security sold at a mutually agreed upon time and price. At the time the Fund enters into a repurchase agreement, the value of the underlying collateral security(ies), including accrued interest, will be equal to or exceed the value of the repurchase agreement. Securities which serve to collateralize the repurchase agreement are held by the Fund's custodian in book entry or physical form in the custodial account of the Fund. Repurchase agreements are valued at cost plus accrued interest receivable. All repurchase agreements are handled through the Fund's custodian, State Street Bank. The Fund, together with other investment management companies having investment advisory agreements with The Hartford Investment Management Company (Hartford Investment Management), a wholly owned subsidiary of The Hartford Financial Services Group, Inc. (The Hartford), have interests in a joint repurchase agreement dated 12/31/04 each maturing 01/02/04 with the following brokers: $180,326 UBS Warburg, 0.84%; and $150,000 RBS Greenwich Capital Markets, 0.84%. These joint repurchase agreements are collateralized by $336,910 U.S. Treasury Bonds 6.250%-13.250% due 11/15/09-05/15/30. The maturity amount for the Hartford Index HLS Fund is $22,861. c) Joint Trading Account -- Pursuant to an exemptive order issued by the SEC, the Fund may transfer uninvested cash balances into a joint trading account managed by Hartford Investment Management. These balances may be invested in one or more repurchase agreements and/or short-term money market instruments. As of December 31, 2003, there are no joint trading accounts. e) Futures, Options on Futures and Options Transactions -- The Fund may invest in futures contracts and options contracts in order to gain exposure to or protect against changes in the market. A futures contract is an agreement between two parties to buy and sell a security at a set price on a future date. When the Fund enters into such contracts, it is required to deposit with its custodian an amount of "initial margin" of cash, commercial paper or U.S. Treasury Bills. Subsequent payments, called maintenance margin, to and from the broker-dealer, are made on a daily basis as the price of the underlying debt security fluctuates, making the long and short positions in the futures contract more or less valuable (i.e., mark-to-market), which results in an unrealized gain or loss to the Fund. The market value of a traded futures contract is the last sale price. In the absence of a last sale price, the last offering price is used. In the absence of either of these prices, fair value is determined according to procedures established by the Fund's Board of Directors. At any time prior to the expiration of the futures contract, the Fund may close the position by taking an opposite position which, would operate to terminate the position in the futures contract. A final determination of maintenance margin is then made, additional cash is required to be paid by or released to the Fund and the Fund realizes a gain or loss. The use of futures contracts involve elements of market, which may exceed the amounts recognized in the Statements of Assets and Liabilities. Change in the value of the futures contracts may decrease the effectiveness of a Fund's strategies and potentially result in loss. 11 The premium paid by the Fund for the purchase of a call or put option is included in the Fund's Statement of Assets and Liabilities as an investment and subsequently "marked-to-market" through net unrealized appreciation (depreciation) of options to reflect the current market value of the option as of the end of the reporting period. If a purchased option expires on its stipulated expiration date, the Fund realizes a loss in the amount of the cost of the option. If the Fund exercises a put option, it realizes a gain or loss from the sale of the underlying security and the proceeds from such sale will be decreased by the premium originally paid. If the Fund exercises a call option, the cost of the security, which the Fund purchases upon exercise, will be increased by the premium originally paid to buy the call. The Fund may write covered options. "Covered" means that so long as the Fund is obligated as the writer of an option, it will own either the underlying securities or currency or an option to purchase or sell the same underlying securities or currency having an expiration date of the covered option at an exercise price equal to or less than the exercise price of the covered option, or will establish or maintain with its custodian for the term of the option a "segregated account" consisting of cash or other liquid securities having a value equal to the fluctuating market value of the option securities or currencies. The Fund receives a premium from writing a call or put option, recorded as a component of other liabilities on the Statements of Assets and Liabilities, which increases the Fund's return, recorded as a realized gain, if the option expires unexercised or is closed out at a net profit. Any loss realized from the covered option is offset by the gain realized on the sale of the underlying securities or currency. Covered options, at times before exercise of close out, are marked-to-market net unrealized appreciation (depreciation) of options. There is a risk of loss from a change in value of such options, which may exceed the related premiums received. The Fund had no written option activity for the year ended December 31, 2003. g) Indexed Securities -- The Fund may invest in indexed securities whose values are linked to changes in interest rates, indices, or other underlying instruments. The Fund uses these securities to increase or decrease it's exposure to different underlying instruments and to gain exposure to markets that might be difficult to invest in through conventional securities. Indexed securities are shown at market value in the Statement of Net Assets, if applicable. Indexed securities may be more volatile than their underlying instruments, but any loss is limited to the amount of the original investment and there is a limit to the potential appreciation of the investment. h) Securities Lending -- The Fund may lend its securities to certain qualified brokers who pay the Fund's negotiated lender fees. The loans are collateralized at all times with cash with a market value at least equal to the market value of the securities on loan. As with other extensions of credit, the Fund may bear the risk of delay in recovery of the loaned securities or even loss of rights in the collateral should the borrower of the securities fail financially. As of December 31, 2003, the market value of the securities loaned was $8,575 and the market value of the collateral was $8,871. i) Federal Income Taxes -- For federal income tax purposes, the Fund intends to continue to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code by distributing substantially all of its taxable net investment income and net realized capital gains to its shareholders or otherwise complying with the requirements of regulated investment companies. Accordingly, no provision for federal income taxes has been made in the accompanying financial statements. j) Fund Share Valuation and Distributions to Shareholders -- Orders for the Fund's shares are executed in accordance with the investment instructions of the contract holders. Dividend income is accrued as of the ex-dividend date. Interest income and expenses are accrued on a daily basis. The net asset value of the Fund's shares is determined as of the close of each business day of the New York Stock Exchange (the Exchange). Orders for the purchase of the Fund's shares received prior to the close of the Exchange on any day on which the Fund is open for business are priced at the per-share net asset value determined as of the close of the Exchange. Orders received after the close of the Exchange, or on a day on which the Exchange and/or the Fund is not open for business, are priced at the next determined per-share net asset value. Dividends are declared by the Fund's Board of Directors based upon the investment performance of the Fund. The policy of the fund is to pay dividends from net investment income and distribute realized capital gains, if any, at least once a year. Distributions from net investment income, realized capital gains and capital are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States. These differences include the treatment of non-taxable dividends, expiring capital loss carry forwards, foreign currency gains and losses, partnerships, losses deferred due to wash sales and excise tax regulations. 12 Permanent book and tax basis differences relating to shareholder distributions result in reclassifications to capital accounts. (see Note 5) k) Use of Estimates -- The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of income and expenses during the period. Operating results in the future could vary from the amounts derived from management's estimates. m) Illiquid Securities and Other Investments -- Each HLS Fund is permitted to invest in illiquid securities or other investments. An HLS Fund will not, however, acquire illiquid securities or investments in 15% of its net assets would consist of such securities or other investments. "Illiquid" securities of investments are those that may not be sold or disposed of in the ordinary course of business within seven days at approximately the same price used to determine a HLS Fund's net asset value. An HLS Fund may not be able to sell illiquid securities or other investments when their sub-advisor considers it desirable to do so or may have to sell such securities or investments at a price that is lower than the price that could be obtained if the securities or investments were more liquid. A sale of illiquid securities or other investments may require more time and may result in higher dealer discounts and other selling expenses than does the sale of those that are illiquid. Illiquid securities and investments also may be more difficult to value do to the unavailability of reliable market quotations for such securities or investments, and investments in them may have an adverse impact on net asset value. Each HLS Fund may purchase certain restricted securities (known as 144A securities) that can be resold to institutions and which may be determined to be liquid pursuant to policies and guidelines of the Board of Directors. Under current interpretations of the SEC staff, the following types of securities are considered illiquid: (1) repurchase agreements maturing in more than seven days; (2) certain restricted securities (securities whose public resale is subject to legal or contractual restrictions); (3) options, with respect to specific securities, not traded on a national securities exchange that are not readily marketable; and (4) any other securities or investments that are not readily marketable. The Fund had no restricted securities as of December 31, 2003. 3. EXPENSES: a) Investment Management and Advisory Agreements -- HL Investment Advisors, LLC (HL Advisors) an indirect wholly-owned subsidiary of The Hartford, serves as investment manager to the Fund pursuant to investment management agreements approved by the Fund's Board of Directors and shareholders. The rate of compensation paid to HL Advisors for services rendered was 0.20% per annum based on the average daily net assets of the Fund. b) Administrative Services Agreement -- Under the Administrative Services Agreement between Hartford Life Insurance Company (HL) and the Fund, HL provides administrative services to the Fund and receives monthly compensation at the annual rate of 0.20% of the Fund's average daily net assets. The Fund assumes and pays certain other expenses (including, but not limited to, accounting, custody, state taxes and directors' fees). Directors' fees represent remuneration paid or accrued to directors not affiliated with HL or any other related company. Accounting Services Agreement -- Under the Fund Accounting Agreement between HL and the Fund, HL provides accounting services to the Fund and receives monthly compensation at the annual rate of 0.02% of the Fund's average daily net assets. c) Operating Expenses -- Allocable expenses of the Fund are charged to the Fund based on the ratio of the average net assets of the Fund to the combined average net assets of the HLS Funds. Non-allocable expenses are charged to the Fund based on specific identification. d) Expense Offset -- The Fund has asked its investment advisors to direct certain security trades, subject to obtaining the best price and execution, to brokers who have agreed to rebate to the Fund part of the commissions generated. Such rebates are used solely to reduce the Fund's operating expenses. The Fund's custodian bank has also agreed to reduce its fees when the Fund maintain cash on deposit in the non-interest-bearing custody account. For the year ended December 31, 2003, directed brokerage and custodian fee offset arrangements reduced expenses by $8 and $0, respectively. The total expense reduction represented an effective annual rate of 0.00% of the Fund's average net assets. e) Distribution Plan for Class IB shares -- The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the 1940 Act for the Class IB shares. Pursuant to the Distribution Plan, the Fund compensates the Distributor 13 from assets attributable to the Class IB shares for services rendered and expenses borne in connection with activities primarily intended to result in the sale of the Class IB shares. The Distribution Plan provides that the Fund pay annually 0.25% of the average daily net assets of the Fund attributable to its Class IB shares for activities primarily intended to result in the sale of Class IB shares. Under the terms of the Distribution Plan and the principal underwriting agreement, the Fund is authorized to make payments monthly to the Distributor which may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class IB shares for such entities' fees or expenses incurred or paid in that regard. 4. INVESTMENT TRANSACTIONS: For the year ended December 31, 2003, the Fund's aggregate purchases amounted to a cost of $137,567 and the sale of investment securities amounted to proceeds of $49,415. 5. RECLASSIFICATION OF CAPITAL ACCOUNTS: In accordance with AICPA Statement of Position 93-2, Determination, Disclosure, and Financial Statement Presentation of Income, Capital Gain, and Return of Capital Distributions by Investment Companies, the Fund has recorded reclassification in its capital account. This reclassification had no impact on the net asset value per share of the Fund and is designed generally to present undistributed income and realized gains on a tax basis which is considered to be more informative to the shareholder. As of December 31, 2003, the Fund recorded a reclassification of $(21) to accumulated net investment income (loss) and a reclassification of $21 to accumulated net realized gain (loss) on investments. TAX COST AND UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS: As of December 31, 2003, the aggregate gross unrealized appreciation and depreciation of all investments, based on cost for federal income tax purposes, was as follows: <Table> <Caption> AGGREGATE AGGREGATE GROSS GROSS NET UNREALIZED UNREALIZED UNREALIZED APPRECIATION/ FUND TAX COST APPRECIATION DEPRECIATION (DEPRECIATION) ---- ---------- ------------ -------------- -------------- Hartford Index HLS Fund, Inc. ................ $1,997,362 $452,189 $(296,152) $156,037 </Table> 6. DISTRIBUTIONS TO SHAREHOLDERS: The tax character of distributions paid by the Fund during 2003 was $25,680 from ordinary income and $ 5,727 from long-term capital gains. The tax character of distributions paid by the Fund during 2002 was $20,349 from ordinary income and $ 73,521 from long-term capital gains. As of December 31, 2003, the Fund's components of distributable earnings on a tax basis were undistributed ordinary income of $3,096, undistributed long-term capital gain of $6,030, and undistributed unrealized appreciation of $156,037. 7. CAPITAL SHARE TRANSACTIONS: The following information is for the year ended December 31, 2003: <Table> <Caption> CLASS IA CLASS IB ------------------------ ------------------------ HARTFORD INDEX HLS FUND SHARES AMOUNT SHARES AMOUNT ----------------------- ---------- ----------- ---------- ----------- Shares sold........................................... 10,924 $ 286,041 4,144 $ 107,088 Shares issued on reinvestment of distributions........ 1,001 28,912 87 2,495 Shares redeemed....................................... (12,780) (327,616) (529) (13,564) ---------- ----------- ---------- ----------- Net Increase (Decrease)............................... (855) $ (12,663) 3,702 $ 96,019 ========== =========== ========== =========== </Table> 14 The following information is for the year ended December 31, 2002: <Table> <Caption> CLASS IA CLASS IB ------------------------ ------------------------ HARTFORD INDEX HLS FUND SHARES AMOUNT SHARES AMOUNT ----------------------- ---------- ----------- ---------- ----------- Shares sold........................................... 67,923 $ 229,511 14,140 $ 46,598 Shares issued in merger............................... 97,999 293,220 -- -- Shares issued on reinvestment of distributions........ 28,220 91,135 801 2,735 Shares redeemed....................................... (156,348) (459,666) (3,519) (9,635) Shares issued in 1 for 10 stock split................. (592,800) -- (22,984) -- ---------- ----------- ---------- ----------- Net Increase (Decrease)............................... (555,006) $ 154,200 (11,562) $ 39,698 ========== =========== ========== =========== </Table> 8. LINE OF CREDIT: The Fund participates in a $550,000 committed revolving line of credit facility. The facility is to be used for temporary or emergency purposes. The interest rate on borrowings varies depending on the nature of the loan. The facility also requires an eight basis fee to be paid, to State Street Bank, based on the amount of the commitment, which has not been utilized. For the year ended December 31, 2003, the Fund did not have any borrowings under this facility. 9. REVERSE STOCK SPLIT: On November 22, 2002, a reverse stock split was declared for Hartford Index HLS Fund at a one to ten ratio. 10. FUND MERGERS REORGANIZATION OF CERTAIN SERIES OF HARTFORD HLS SERIES FUND II, INC. IN 2002: At a special meeting of shareholders, held on April 29, 2002, shareholders of Fortis S&P 500 Index Series ("the Fund") approved a proposed Agreement and Plan of Reorganization between Hartford HLS Series Fund II, Inc. and the Hartford HLS Mutual Funds (the "Plan"). Fortis S&P 500 Index Series merged into Hartford Index HLS Fund, Inc. Under the terms of the Plan, and pursuant to the approval by shareholders of the Fund, the assets of the Fund were acquired by the Hartford Index HLS Fund on April 30, 2002. The Hartford Index HLS Fund acquired the Fund's assets in exchange for the Hartford Index HLS Fund shares, which were distributed pro rata the Fund to the holders of its shares on April 30, 2002, in complete liquidation of the Fund. The mergers were accomplished by tax free exchanges as detailed below: <Table> <Caption> HARTFORD INDEX HLS FUND, INC. CLASS IA CLASS IB ----------------------------- ---------- -------- Net assets of Fortis S&P 500 on April 30, 2002.............. $ 293,220 $ -- Fortis S&P 500 Index shares exchanged....................... 19,110 -- Hartford Index shares issued................................ 97,999 -- Net assets of Hartford Index immediately before the merger.................................................... $1,846,941 $ 54,976 Net assets of Hartford Index immediately after the merger... $2,140,161 $ 54,976 </Table> The Fortis S&P 500 Index Series had unrealized depreciation of $20,814 and capital stock of $293,220 as of April 30, 2002. 15 HARTFORD HLS MUTUAL FUNDS FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- <Table> <Caption> -- SELECTED PER-SHARE DATA(4) -- ------------------------------------------------------------------- NET REALIZED AND NET ASSET NET UNREALIZED TOTAL DIVIDENDS VALUE AT INVESTMENT GAIN FROM FROM NET BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME --------- ---------- ------------ ---------- ---------- HARTFORD INDEX HLS FUND For the Year Ended December 31, 2003 Class IA....................................... $ 23.46 $ 0.36 $ 6.23 $ 6.59 $(0.37) Class IB....................................... 23.39 0.31 6.19 6.50 (0.32) For the Year Ended December 31, 2002 Class IA....................................... 31.81(3) 0.32(3) (8.29)(3) (7.97)(3) (0.28)(3) Class IB....................................... 31.75(3) 0.28(3) (8.30)(3) (8.02)(3) (0.24)(3) For the Year Ended December 31, 2001 Class IA....................................... 37.25(3) 0.31(3) (4.87)(3) (4.56)(3) (0.29)(3) Class IB....................................... 37.20(3) 0.30(3) (4.91)(3) (4.61)(3) (0.25)(3) For the Year Ended December 31, 2000 Class IA....................................... 41.89(3) 0.30(3) (4.24)(3) (3.94)(3) (0.31)(3) Class IB....................................... 41.89(3) 0.37(3) (4.39)(3) (4.02)(3) (0.28)(3) For the Year Ended December 31, 1999 Class IA....................................... 35.70(3) 0.34(3) 6.85(3) 7.19(3) (0.40)(3) From inception November 9, 1999 through December 31, 1999 Class IB....................................... 39.22(3) 0.04(3) 2.98(3) 3.02(3) (0.32)(3) <Caption> -- SELECTED PER-SHARE DATA(4) -- ---------------------------------------------- DISTRIBUTIONS DIVIDENDS FROM IN EXCESS OF NET REALIZED DISTRIBUTIONS NET INVESTMENT GAINS ON FROM INCOME INVESTMENTS CAPITAL -------------- ------------- ------------- HARTFORD INDEX HLS FUND For the Year Ended December 31, 2003 Class IA....................................... $ -- $ (0.08) $ -- Class IB....................................... -- (0.08) -- For the Year Ended December 31, 2002 Class IA....................................... --(3) (0.10)(3) --(3) Class IB....................................... --(3) (0.10)(3) --(3) For the Year Ended December 31, 2001 Class IA....................................... --(3) (0.59)(3) --(3) Class IB....................................... --(3) (0.59)(3) --(3) For the Year Ended December 31, 2000 Class IA....................................... --(3) (0.39)(3) --(3) Class IB....................................... --(3) (0.39)(3) --(3) For the Year Ended December 31, 1999 Class IA....................................... --(3) (0.60)(3) --(3) From inception November 9, 1999 through December 31, 1999 Class IB....................................... --(3) (0.03)(3) --(3) </Table> - --------------- (1) Annualized. (2) Not annualized. (3) Per shares amounts have been restated to reflect a reverse stock split for Class IB shares effective November 22, 2002. (See Note 11(a)). (4) Information presented relates to a share of capital stock outstanding for the indicated period. (5) Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. (6) Returns include the Fund level expenses, but exclude the insurance charges, if returns had taken into account insurance charges, performance would have been lower. See Notes to Financial Statements. 16 - -------------------------------------------------------------------------------- <Table> <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - ------------------------------------------------------------------------------------------------ RATIO OF NET INCREASE NET ASSETS EXPENSES (DECREASE) IN NET ASSET AT END OF TO AVERAGE TOTAL NET ASSETS VALUE AT TOTAL PERIOD NET ASSETS DISTRIBUTIONS VALUE END OF PERIOD RETURN(6) (000'S OMITTED) AFTER WAIVERS ------------- ------------- ------------- ---------- --------------- ------------- $ (0.45) $ 6.14 $29.60 28.13% $ 1,934,490 0.44% (0.40) 6.10 29.49 27.81 195,900 0.69 (0.38)(3) (8.35)(3) 23.46(3) (22.45) 1,553,260 0.44 (0.34)(3) (8.36)(3) 23.39(3) (22.63) 68,832 0.67 (0.88)(3) (5.44)(3) 31.81(3) (12.31) 1,976,361 0.43 (0.84)(3) (5.45)(3) 31.75(3) (12.47) 46,056 0.61 (0.70)(3) (4.64)(3) 37.25(3) (9.50) 2,387,000 0.43 (0.67)(3) (4.69)(3) 37.20(3) (9.66) 16,272 0.61 (1.00)(3) 6.19(3) 41.89(3) 20.49 2,581,436 0.43 (0.35)(3) 2.67(3) 41.89(3) 7.73(2) 11 0.61(1) <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - --- --------------------------------------- RATIO OF RATIO OF NET EXPENSES INVESTMENT TO AVERAGE INCOME PORTFOLIO NET ASSETS TO AVERAGE TURNOVER BEFORE WAIVERS NET ASSETS RATE(5) -------------- ---------- --------- 0.44% 1.40% 3% 0.69 1.15 3 0.44 1.18 15 0.69 0.95 15 0.43 0.91 5 0.68 0.73 5 0.43 0.75 7 0.68 0.57 7 0.43 0.95 3 0.68(1) 0.77(1) 3 </Table> 17 REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS TO THE SHAREHOLDERS OF THE HARTFORD INDEX HLS FUND AND BOARD OF DIRECTORS OF HARTFORD SERIES FUND, INC. - -------------------------------------------------------------------------------- We have audited the accompanying statement of net assets of the Hartford Index HLS Fund (one of the portfolios comprising Hartford Series Fund, Inc.) (the "Fund") as of December 31, 2003, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for each of the three years in the period ended December 31, 2001 were audited by other auditors who have ceased operations and whose report, dated February 6, 2002, expressed an unqualified opinion on those financial highlights. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights 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 securities owned as of December 31, 2003 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 and financial highlights referred to above present fairly, in all material respects, the financial position of the Hartford HLS Index Fund at December 31, 2003, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States. /s/ ERNST & YOUNG LLP Boston, Massachusetts February 6, 2004 18 HARTFORD SERIES FUND, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) - -------------------------------------------------------------------------------- The Board of Directors ("Board") is responsible for overall management of the Fund. The Board may exercise all powers of the Fund, except those powers that are conferred solely upon or reserved to the shareholders. The following table provides information about the Fund's directors and officers. The business address for all directors and officers is c/o Hartford Series Fund, Inc., P.O. Box 2999, Hartford, CT 06104-2999, except for Tamara L. Fagely and Robert W. Beltz, Jr., whose business address is 500 Bielenberg Dr., Woodbury, MN 55125. - -------------------------------------------------------------------------------- <Table> <Caption> NON-INTERESTED DIRECTORS - --------------------------------------------------------------------------------------------------- TERM OF POSITION HELD OFFICE* AND WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) NAME AND AGE COMPANY TIME SERVED DURING PAST 5 YEARS - --------------------------------------------------------------------------------------------------- LYNN S. BIRDSONG Director 2003 From 1979 to 2002, Mr. Birdsong was a (age 57) managing director of Zurich Scudder Investments, an investment management firm. In 2003, Mr. Birdsong became an independent director of the Atlantic Whitehall Funds and The Japan Fund; during his employment with Scudder, he was an interested director of The Japan Fund. Since 1981, Mr. Birdsong has been a partner in Birdsong Company, an advertising specialty firm. He is also a Director of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - --------------------------------------------------------------------------------------------------- WINIFRED E. COLEMAN Director 1995(1) Ms. Coleman has served as President of (age 71) Saint Joseph College since 1991 and President of Cashel House, Ltd. (retail) since 1985. She is also a Director of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - --------------------------------------------------------------------------------------------------- ROBERT M. GAVIN Director 2002 Dr. Gavin is an educational consultant. (age 63) Prior to September 1, 2001, he was President of Cranbrook Education Community; and prior to July 1996, he was President of Macalester College, St. Paul, Minnesota. He is also a Director of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - --------------------------------------------------------------------------------------------------- DUANE E. HILL Director 2001 Mr. Hill is Partner Emeritus and a founding (age 58) partner of TSG Capital Group, a private equity investment firm that serves as sponsor and lead investor in leveraged buyouts of middle market companies. Mr. Hill is also a Partner of TSG Ventures L.P., a private equity investment company that invests primarily in minority-owned small businesses. He is also a Director of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - --------------------------------------------------------------------------------------------------- <Caption> NON-INTERESTED DIRECTORS NON-INTERESTED DIRECTORS - ------------------------ ----------------------------------- NUMBER OF PORTFOLIOS IN FUND COMPLEX OTHER OVERSEEN BY DIRECTORSHIPS NAME AND AGE DIRECTOR HELD BY DIRECTOR - ------------------------ ----------------------------------- LYNN S. BIRDSONG 72 N/A (age 57) - --------------------------------------------------------------------------------------------------- WINIFRED E. COLEMAN 72 N/A (age 71) - --------------------------------------------------------------------------------------------------- ROBERT M. GAVIN 72 Dr. Gavin is a (age 63) Director of Systems & Computer Technology Corporation. - --------------------------------------------------------------------------------------------------- DUANE E. HILL 72 N/A (age 58) - --------------------------------------------------------------------------------------------------- </Table> 19 HARTFORD SERIES FUND, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> NON-INTERESTED DIRECTORS - --------------------------------------------------------------------------------------------------- TERM OF POSITION HELD OFFICE* AND WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) NAME AND AGE COMPANY TIME SERVED DURING PAST 5 YEARS - --------------------------------------------------------------------------------------------------- PHILLIP O. PETERSON Director 2002 Mr. Peterson is a mutual fund industry (age 59) consultant. He was a partner of KPMG LLP until July 1999. In January 2004, Mr. Peterson was appointed independent president of the Strong Mutual Funds. He is also a Director of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - --------------------------------------------------------------------------------------------------- MILLARD H. PRYOR, JR. Director 1977(1) Mr. Pryor has served as Managing Director (age 70) of Pryor & Clark Company (real estate investment), Hartford, Connecticut, since June 1992. He is also a Director of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc., and The Hartford Income Shares Fund, Inc. - --------------------------------------------------------------------------------------------------- THOMAS M. MARRA(2) Director and 2002 Mr. Marra is President and Chief Operating (age 45) Chairman of Officer of Hartford Life, Inc. He is also a the Board member of the Board of Directors and a member of the Office of the Chairman for The Hartford Financial Services Group, Inc. ("The Hartford"), the parent company of Hartford Life. Mr. Marra was named President of Hartford Life in 2001 and COO in 2000, and served as Director of Hartford Life's Investment Products Division from 1998 to 2000. He was head of the company's Individual Life and Annuities Division from 1994 to 1998 after being promoted to Senior Vice President in 1994 and to Executive Vice President in 1996. Mr. Marra is also a Managing Member and President of Hartford Investment Financial Services, LLC ("HIFSCO") and HL Investment Advisors LLC ("HL Advisors"). He is also a Director and Chairman of the Board of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - --------------------------------------------------------------------------------------------------- LOWNDES A. SMITH(2) Director 1996 Mr. Smith served as Vice Chairman of The (age 64) Hartford from February 1997 to January 2002, as President and Chief Executive Officer of Hartford Life, Inc. from February 1997 to January 2002, and as President and Chief Operating Officer of The Hartford Life Insurance Companies from January 1989 to January 2002. Mr. Smith is also a Director of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - --------------------------------------------------------------------------------------------------- <Caption> NON-INTERESTED DIRECTORS NON-INTERESTED DIRECTORS - ------------------------ ----------------------------------- NUMBER OF PORTFOLIOS IN FUND COMPLEX OTHER OVERSEEN BY DIRECTORSHIPS NAME AND AGE DIRECTOR HELD BY DIRECTOR - ------------------------ ----------------------------------- PHILLIP O. PETERSON 72 N/A (age 59) - --------------------------------------------------------------------------------------------------- MILLARD H. PRYOR, JR. 72 Mr. Pryor is a (age 70) Director of Infodata Systems, Inc. (software company) and CompuDyne Corporation (security products and services) and August Financial Holding Company (advisory services). - --------------------------------------------------------------------------------------------------- THOMAS M. MARRA(2) 72 Mr. Marra is a (age 45) member of the Board of Directors of The Hartford. - --------------------------------------------------------------------------------------------------- LOWNDES A. SMITH(2) 72 N/A (age 64) - --------------------------------------------------------------------------------------------------- </Table> 20 HARTFORD SERIES FUND, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> NON-INTERESTED DIRECTORS - --------------------------------------------------------------------------------------------------- TERM OF POSITION HELD OFFICE* AND WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) NAME AND AGE COMPANY TIME SERVED DURING PAST 5 YEARS - --------------------------------------------------------------------------------------------------- DAVID M. ZNAMIEROWSKI(2) President and 1999 Mr. Znamierowski currently serves as (age 43) Director President of Hartford Investment Management Company ("Hartford Investment"), Senior Vice President for Hartford Life, Inc., and Senior Vice President and Chief Investment Officer for Hartford Life Insurance Company. Mr. Znamierowski is also a Managing Member and Senior Vice President of HIFSCO and HL Advisors. Mr. Znamierowski is Group Senior Vice President and Chief Investment Officer for The Hartford. In addition, he serves as President and Director of The Hartford Mutual Funds, Inc. and as President of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - --------------------------------------------------------------------------------------------------- ROBERT W. BELTZ, JR. Vice President 2002 Mr. Beltz currently serves as Vice (age 54) President Securities Operations of Hartford Administrative Services Company ("HASCO"). Since December 2001, he has served as Assistant Vice President of Hartford Life Insurance Company. In addition, he is Vice President of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - --------------------------------------------------------------------------------------------------- KEVIN J. CARR Vice President 1996 Mr. Carr has served as The Hartford's (age 49) and Secretary Assistant General Counsel since 1999, Counsel since November 1996 and Associate Counsel since November 1995. Mr. Carr is also Vice President and Assistant Secretary of HL Advisors and HIFSCO and Assistant Secretary of Hartford Investment. He is also Vice President and Secretary of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - --------------------------------------------------------------------------------------------------- WILLIAM H. DAVISON, JR. Vice President 2002 Mr. Davison is a Managing Director and (age 46) Director of the Funds Management Group of Hartford Investment. Mr. Davison is also a Senior Vice President of HIFSCO and HL Advisors. In addition, he serves as Vice President of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - --------------------------------------------------------------------------------------------------- TAMARA L. FAGELY Vice President 2002 Ms. Fagely has been Vice President of HASCO (age 45) since 1998. Prior to 1998, she was Second Vice President of HASCO. Since December 2001, she has served as Assistant Vice President of Hartford Life Insurance Company. In addition, she is Controller of HIFSCO, Vice President of Hartford HLS Series Fund II, Inc. and Vice President, Controller and Treasurer of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - --------------------------------------------------------------------------------------------------- <Caption> NON-INTERESTED DIRECTORS NON-INTERESTED DIRECTORS - ------------------------ ----------------------------------- NUMBER OF PORTFOLIOS IN FUND COMPLEX OTHER OVERSEEN BY DIRECTORSHIPS NAME AND AGE DIRECTOR HELD BY DIRECTOR - ------------------------ ----------------------------------- DAVID M. ZNAMIEROWSKI(2) 53 N/A (age 43) - --------------------------------------------------------------------------------------------------- ROBERT W. BELTZ, JR. N/A N/A (age 54) - --------------------------------------------------------------------------------------------------- KEVIN J. CARR N/A N/A (age 49) - --------------------------------------------------------------------------------------------------- WILLIAM H. DAVISON, JR. N/A N/A (age 46) - --------------------------------------------------------------------------------------------------- TAMARA L. FAGELY N/A N/A (age 45) - --------------------------------------------------------------------------------------------------- </Table> 21 HARTFORD SERIES FUND, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> NON-INTERESTED DIRECTORS - --------------------------------------------------------------------------------------------------- TERM OF POSITION HELD OFFICE* AND WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) NAME AND AGE COMPANY TIME SERVED DURING PAST 5 YEARS - --------------------------------------------------------------------------------------------------- BRUCE FERRIS Vice President 2002 Mr. Ferris serves as Senior Vice President (age 48) and a Director of Sales and Marketing in the Investment Products Division of Hartford Life Insurance Company. He is also a Managing Member of HL Advisors. In addition, Mr. Ferris is Vice President of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - --------------------------------------------------------------------------------------------------- MARY JANE FORTIN Vice President 2003 Ms. Fortin is Senior Vice President and (age 39) Director of Mutual Funds and 529 Programs for Hartford Life. In addition, she is Vice President of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. Previously, Ms. Fortin served as Senior Vice President and Chief Accounting Officer of Hartford Life. She joined Hartford Life in 1997. - --------------------------------------------------------------------------------------------------- GEORGE R. JAY Vice 1996 Mr. Jay serves as Assistant Vice President (age 51) President, of Hartford Life Insurance Company's Equity Controller and Products Department. He is also Controller Treasurer of HL Advisors, Vice President, Controller and Treasurer of Hartford HLS Series Fund II, Inc. and Vice President of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - --------------------------------------------------------------------------------------------------- STEPHEN T. JOYCE Vice President 2000 Mr. Joyce currently serves as Senior Vice (age 44) President and Director of the Institutional Products Group for Hartford Life Insurance Company. Mr. Joyce is also Senior Vice President HL Advisors and Vice President of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. Previously, he served as Vice President (1997-1999) and Assistant Vice President (1994-1997) of Hartford Life Insurance Company. - --------------------------------------------------------------------------------------------------- DAVID N. LEVENSON Vice President 2000 Mr. Levenson serves as Senior Vice (age 37) President of Hartford Life Insurance Company's Retail Product Management Group and is responsible for all retail product management and profitability. Mr. Levenson is also a Senior Vice President of HIFSCO. In addition, he serves as Vice President of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. Mr. Levenson joined The Hartford in 1995. - --------------------------------------------------------------------------------------------------- <Caption> NON-INTERESTED DIRECTORS NON-INTERESTED DIRECTORS - ------------------------ ----------------------------------- NUMBER OF PORTFOLIOS IN FUND COMPLEX OTHER OVERSEEN BY DIRECTORSHIPS NAME AND AGE DIRECTOR HELD BY DIRECTOR - ------------------------ ----------------------------------- BRUCE FERRIS N/A N/A (age 48) - --------------------------------------------------------------------------------------------------- MARY JANE FORTIN N/A N/A (age 39) - --------------------------------------------------------------------------------------------------- GEORGE R. JAY N/A N/A (age 51) - --------------------------------------------------------------------------------------------------- STEPHEN T. JOYCE N/A N/A (age 44) - --------------------------------------------------------------------------------------------------- DAVID N. LEVENSON N/A N/A (age 37) - --------------------------------------------------------------------------------------------------- </Table> 22 HARTFORD SERIES FUND, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> NON-INTERESTED DIRECTORS - --------------------------------------------------------------------------------------------------- TERM OF POSITION HELD OFFICE* AND WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) NAME AND AGE COMPANY TIME SERVED DURING PAST 5 YEARS - --------------------------------------------------------------------------------------------------- JOHN C. WALTERS Vice President 2000 Mr. Walters serves as Executive Vice (age 41) President and Director of the Investment Products Division of Hartford Life Insurance Company. Mr. Walters is also a Managing Member and Executive Vice President of HIFSCO and HL Advisors. In addition, he is Vice President of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. Previously, Mr. Walters was with First Union Securities. - --------------------------------------------------------------------------------------------------- <Caption> NON-INTERESTED DIRECTORS NON-INTERESTED DIRECTORS - ------------------------ ----------------------------------- NUMBER OF PORTFOLIOS IN FUND COMPLEX OTHER OVERSEEN BY DIRECTORSHIPS NAME AND AGE DIRECTOR HELD BY DIRECTOR - ------------------------ ----------------------------------- JOHN C. WALTERS N/A N/A (age 41) - --------------------------------------------------------------------------------------------------- </Table> * Each director and officer may serve until his or her successor is elected and qualifies. (1) Ms. Coleman and Mr. Pryor served as directors, beginning in 1995 and 1977, respectively, of certain Maryland corporations (each of which was registered with the SEC as an open-end management investment company) that were reorganized as investment portfolios (series) of Hartford Series Fund, Inc. on August 28, 2002. (2) "Interested person" of the Company as defined in the Investment Company Act of 1940 because of the person's affiliation with or equity ownership of [Hartford Investment Financial Services, LLC] or affiliated companies. The Fund's Statement of Additional Information includes further information about fund directors and is available without charge upon request by calling 1-800-862-6668 or writing: Hartford HLS Funds, c/o Individual Annuity Services, P.O. Box 5085, Hartford, CT 06102-5085. 23 PRIVACY POLICY AND PRACTICES OF THE HARTFORD FINANCIAL SERVICES GROUP, INC. AND ITS AFFILIATES (HEREIN CALLED "WE, OUR, AND US") This Privacy Policy applies to our United States Operations We value your trust. We are committed to the responsible: a) management; b) use; and c) protection; of PERSONAL INFORMATION. This notice describes how we collect, disclose, and protect PERSONAL INFORMATION. We collect PERSONAL INFORMATION to: a) service your TRANSACTIONS with us; and b) support our business functions. We may obtain PERSONAL INFORMATION from: a) YOU; b) your TRANSACTIONS with us; and c) third parties such as a consumer-reporting agency. Based on the type of product or service YOU apply for or get from us, PERSONAL INFORMATION such as: a) your name; b) your address; c) your income; d) your payment; or e) your credit history; may be gathered from sources such as applications, TRANSACTIONS, and consumer reports. To serve YOU and service our business, we may share certain PERSONAL INFORMATION. We will share PERSONAL INFORMATION, only as allowed by law, with affiliates such as: a) our insurance companies; b) our employee agents; c) our brokerage firms; and d) our administrators. As allowed by law, we may share PERSONAL FINANCIAL INFORMATION with our affiliates to: a) market our products; or b) market our services; to YOU without providing YOU with an option to prevent these disclosures. We may also share PERSONAL INFORMATION, only as allowed by law, with unaffiliated third parties including: a) independent agents; b) brokerage firms; c) insurance companies; d) administrators; and e) service providers; who help us serve YOU and service our business. When allowed by law, we may share certain PERSONAL FINANCIAL INFORMATION with other unaffiliated third parties who assist us by performing services or functions such as: a) taking surveys; b) marketing our products or services; or c) offering financial products or services under a joint agreement between us and one or more financial institutions. We will not sell or share your PERSONAL FINANCIAL INFORMATION with anyone for purposes unrelated to our business functions without offering YOU the opportunity to: a) "opt-out;" or b) "opt-in;" as required by law. We only disclose PERSONAL HEALTH INFORMATION with: a) your proper written authorization; or b) as otherwise allowed or required by law. Our employees have access to PERSONAL INFORMATION in the course of doing their jobs, such as: a) underwriting policies; b) paying claims; c) developing new products; or d) advising customers of our products and services. We use manual and electronic security procedures to maintain: a) the confidentiality; and b) the integrity of; PERSONAL INFORMATION that we have. We use these procedures to guard against unauthorized access. 24 Some techniques we use to protect PERSONAL INFORMATION include: a) secured files; b) user authentication; c) encryption; d) firewall technology; and e) the use of detection software. We are responsible for and must: a) identify information to be protected; b) provide an adequate level of protection for that data; c) grant access to protected data only to those people who must use it in the performance of their job-related duties. Employees who violate our Privacy Policy will be subject to discipline, which may include ending their employment with us. At the start of our business relationship, we will give YOU a copy of our current Privacy Policy. We will also give YOU a copy of our current Privacy Policy once a year if YOU maintain a continuing business relationship with us. We will continue to follow our Privacy Policy regarding PERSONAL INFORMATION even when a business relationship no longer exists between us. As used in this Privacy Notice: APPLICATION means your request for our product or service. PERSONAL FINANCIAL INFORMATION means financial information such as: a) credit history; b) income; c) financial benefits; or d) policy or claim information. PERSONAL HEALTH INFORMATION means health information such as: a) your medical records; or b) information about your illness, disability or injury. PERSONAL INFORMATION means information that identifies YOU personally and is not otherwise available to the public. It includes: a) PERSONAL FINANCIAL INFORMATION; and b) PERSONAL HEALTH INFORMATION. TRANSACTION means your business dealings with us, such as: a) your APPLICATION; b) your request for us to pay a claim; and c) your request for us to take an action on your account. YOU means an individual who has given us PERSONAL INFORMATION in conjunction with: a) asking about; b) applying for; or c) obtaining; a financial product or service from us if the product or service is used mainly for personal, family, or household purposes. This Privacy Policy is being provided on behalf of the following affiliates of The Hartford Financial Services Group, Inc.: American Maturity Life Insurance Company; Capstone Risk Management, LLC; First State Insurance Company; Hart Life Insurance Company; Hartford Accident & Indemnity Company; Hartford Administrative Services Company; Hartford Casualty Insurance Company; Hartford Equity Sales Company, Inc.; Hartford Fire Insurance Company; Hartford HLS Series Fund II, Inc.; Hartford Insurance Company of Illinois; Hartford Insurance Company of the Midwest; Hartford Insurance Company of the Southeast; Hartford International Life Reassurance Corporation; Hartford Investment Financial Services, LLC; Hartford Investment Management Company; Hartford Life & Accident Insurance Company; Hartford Life and Annuity Insurance Company; Hartford Life Insurance Company; Hartford Lloyd's Insurance Company; Hartford Securities Distribution Company, Inc.; Hartford Series Fund, Inc.; Hartford Specialty Company; Hartford Underwriters Insurance Company; Hartford-Comprehensive Employee Benefit Service Company; International Corporate Marketing Group, LLC; New England Insurance Company; Nutmeg Insurance Agency, Inc.; Nutmeg Insurance Company; Nutmeg Life Insurance Company; Omni General Agency, Inc.; Omni Indemnity Company; Omni Insurance Company; P2P Link, LLC; Pacific Insurance Company, Limited; Planco Financial Services, Inc.; Property and Casualty Insurance Company of Hartford; Sentinel Insurance Company, Ltd.; Servus Life Insurance Company; Specialty Risk Services, Inc.; The Hartford Income Shares Fund, Inc.; The Hartford Mutual Funds II, Inc.; The Hartford Mutual Funds, Inc.; Trumbull Insurance Company; Trumbull Services, L.L.C.; Twin City Fire Insurance Company; Woodbury Financial Services, Inc. 25 (This page intentionally left blank) 26 (This page intentionally left blank) 27 (This page intentionally left blank) 28 TDWATERAR-1-04 Printed in U.S.A.(C) The Hartford, Hartford, CT 06115 ____________________ PRESORTED The Hartford STANDARD P.O. Box 5085 U.S. POSTAGE Hartford, CT 06102-5085 PAID HUDSON, MA ____________________ PERMIT NO. 6 WELLS FARGO PASSAGE (sm) VARIABLE ANNUITY HARTFORD GLOBAL LEADERS HLS FUND HARTFORD GROWTH OPPORTUNITIES HLS FUND HARTFORD MONEY MARKET HLS FUND ANNUAL REPORT AND MANAGER DISCUSSIONS DECEMBER 31, 2003 Issued by: Fortis Benefits Insurance Company IMPORTANT NOTICE TO CONTRACT OWNERS The Hartford is committed to doing what we can to prevent improper trading activity within our products, and will continue to react to industry "best practices" with respect to this type of activity. We have recently enhanced the language in our variable annuity and variable life insurance policies prospectus surrounding our transfer restrictions by adding the following language to your prospectus: The underlying Funds are available for use with many different variable annuity products, variable life insurance policies, and funding agreements, and they are offered directly to certain qualified retirement plans. Some of these products and plans may have different transfer restrictions or no transfer restrictions at all. In addition, as a result of settlement of litigation against Hartford, with respect to certain owners of older Contracts, we currently only have the ability to restrict transfers into certain funds and to limit the total Contract Value invested in any one Fund. The effect on you may include higher transaction costs or lower performance. To obtain a copy of our latest prospectus for your variable annuity, variable life insurance policies or the underlying funds, please log on to www.hartfordinvestor.com or call 800-862-6668 for variable annuity or 800-800-2000, extension 13028, for variable life insurance policies. ________________________________________________________________________ ARE NOT INSURED BY FDIC OR ANY FEDERAL GOVERNMENT AGENCY | MAY LOSE VALUE ________________________________________________________________________ ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE ________________________________________________________________________ [NO FDIC LOGO] [NO BANK LOGO] Hartford Global Leaders HLS Fund inception 9/30/1998 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 9/30/98 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> GLOBAL LEADERS IA MSCI WORLD INDEX ----------------- ---------------- 9/30/98 10000 10000 11346 10906 12212 11556 12/98 13188 12122 13799 12389 13410 12062 14140 12566 14488 13063 13962 12587 14974 13176 15199 13138 15118 13117 14930 12991 15905 13668 17087 14055 12/99 19830 15194 19086 14326 21213 14366 21161 15361 20137 14713 19563 14342 20430 14827 19746 14412 20868 14882 19982 14093 18833 13858 17723 13019 12/00 18429 13231 18436 13488 16744 12350 15624 11541 16849 12397 16516 12243 16215 11861 15819 11705 14951 11145 13654 10165 14039 10361 15284 10975 12/01 15373 11046 14870 10712 14782 10621 15250 11114 14742 10720 15056 10745 14111 10095 12961 9245 12831 9264 11285 8247 12455 8857 13558 9337 12/02 12375 8886 12089 8617 11818 8470 11656 8447 12962 9201 13754 9731 14076 9904 14418 10106 14833 10327 14454 10392 15595 11011 15972 11181 12/03 16777 11885 </Table> <Table> --- GLOBAL LEADERS IA --- MSCI WORLD INDEX $10,000 starting value $10,000 starting value $16,777 ending value $11,885 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> SINCE 1 YEAR 5 YEAR INCEPTION - ------------------------------------------------------ Global Leaders IA 35.57% 4.93% 10.35% - ------------------------------------------------------ Global Leaders IB 35.24% 4.72% 10.13% - ------------------------------------------------------ MSCI World Index 33.76% -0.39% 3.34% - ------------------------------------------------------ </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER ANDREW S. OFFIT Senior Vice President, Partner - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Global Leaders HLS Fund, Class IA returned 35.57% for the 12 months ended December 31, 2003. The Fund outperformed both the Lipper Global Funds VA-UF Average, which returned 33.65% and the Morgan Stanley Capital International (MSCI) World Index, which returned 33.76% over the same period. WHY DID THE FUND PERFORM THIS WAY? The rebound in the global equity markets was broad based, with all developed markets participating in the advance and the majority of the ten broad market sectors of the MSCI World Index registering double-digit returns. The rally was propelled by continued signs of improvement in the global economy and reduced uncertainty in the geopolitical arena. At the regional level, performance was strongest within Emerging Markets and Asia excluding Japan. Performance within the United States and the United Kingdom was less robust during the period, though positive nonetheless. Our outperformance versus the benchmark was primarily driven by strong stock selection and an overweight to technology. The three largest contributors to the Fund's absolute returns were all from this sector: French technology hardware company Alcatel S.A. (communications), the Canadian technology hardware company Nortel Networks Corp. (communications), and the Japanese software services company Yahoo Japan, Inc. (software & services). In addition, the Fund's overweight in consumer discretionary stocks and good stock selection in health care, financials, and telecommunications added to relative performance at the margin. These returns were offset somewhat by the Fund's overweight and poor stock selection in materials. Three of the largest detractors from absolute returns were Lukoil Holdings ADR (energy & services), the Russian oil and gas company, Fast Retailing, Inc. (retail), the Japanese retailer, and Schering-Plough Corp. (drugs), the U.S. pharmaceuticals company. Of these three companies, only Fast Retailing, Inc. is still held. While we do not manage the Fund according to country weights, but instead, focus mainly on sector and stock weights, countries and regions played a part in our outperformance for the period. The Fund was helped by being overweight in Europe, largely due to the depreciation of the U.S. dollar. In addition, the Fund's positions in emerging market securities, though small, contributed to positive relative returns. WHAT IS YOUR OUTLOOK AND STRATEGY? Our outlook remains positive. We are positioned for economic growth and are beginning to see many of the trends play out in stock price performance. We continue to believe that many growth sectors will have "time on their side". 1 Hartford Growth Opportunities HLS Fund inception 3/24/1987 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 12/31/93 - 12/31/03 Growth of a $10,000 investment(1) (PERFORMANCE LINE GRAPH) <Table> <Caption> GROWTH OPPORTUNITIES IA RUSSELL 3000 GROWTH INDEX ----------------------- ------------------------- 12/31/93 10000 10000 10289 10234 10336 10060 9720 9562 9554 9605 9378 9718 8907 9420 9054 9723 9696 10282 9752 10159 9820 10386 9529 10045 12/94 9718 10456 9621 10396 9890 10836 10153 11153 10137 11389 10630 11762 11566 12250 12290 12805 12436 12834 12804 13391 12427 13331 12700 13856 12/95 12407 13958 12592 14366 13093 14667 13080 14712 13680 15175 14005 15731 13798 15640 12675 14621 13120 15067 14262 16131 14345 16149 15022 17287 12/96 14443 17012 15071 18131 14240 17917 13320 16921 13488 17929 14870 19337 15463 20100 16938 21807 16397 20710 17223 21794 16494 20935 16345 21681 12/97 16238 21901 16023 22465 17358 24182 18210 25150 18302 25480 17868 24652 18806 26049 17891 25699 14640 21672 15790 23377 16548 25204 17170 27124 12/98 19325 29570 19926 31277 18395 29743 19401 31273 19425 31501 18894 30608 20332 32712 20302 31674 20690 32068 20782 31481 22316 33749 24955 35686 12/99 29987 39573 29594 37824 38282 40187 34741 42460 31796 40276 29867 38145 34422 41171 33356 39329 37905 42927 37952 38996 34673 37058 28093 31511 12/00 31182 30702 30665 32848 26793 27348 23900 24407 26292 27487 26070 27159 26020 26636 25428 25858 23728 23776 20084 21304 21115 22480 23232 24621 12/01 24055 24677 23826 24210 22418 23168 23598 24049 22464 22186 22183 21593 19725 19607 17804 18395 17392 18446 16017 16568 17158 18045 18725 19075 12/02 17404 17757 17191 17322 16967 17218 17449 17535 19022 18854 20474 19871 21085 20151 21295 20724 22242 21282 21970 21031 23891 22259 24673 22529 12/03 25025 23256 </Table> <Table> --- GROWTH OPPORTUNITIES IA --- RUSSELL 3000 GROWTH INDEX $10,000 starting value $10,000 starting value $25,025 ending value $23,256 ending value </Table> AVERAGE ANNUAL RETURNS(2) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR 10 YEAR - --------------------------------------------------------- Growth Opportunities IA 43.79% 5.31% 9.61% - --------------------------------------------------------- Growth Opportunities IB(3) 43.43% 5.04% 9.33% - --------------------------------------------------------- Russell 3000 Growth Index 30.97% -4.69% 8.81% - --------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional in formation including inception dates and expenses. PORTFOLIO MANAGER MICHAEL T. CARMEN, CFA Senior Vice President, Partner - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Growth Opportunities HLS Fund, Class IA returned 43.79% for the 12 months ended December 31, 2003. The Fund outperformed both the Lipper Multi Cap Growth VA-UF Average, which returned 35.24% and the Russell 3000 Growth Index, which returned 30.97% over the same period. WHY DID THE FUND PERFORM THIS WAY? Small and mid capitalization stocks were "the place to be" in the U.S. equity markets, as these stocks handily outperformed larger cap stocks and posted strong absolute returns. Boosted by improving news on the economic front and earnings comparisons that were beginning to look more compelling, investors continued to bid up U.S. equities through the end of December, especially small and mid cap stocks. The stagnant labor markets continued to be a source of concern, but investors weren't "losing any sleep" over the issue. Much debate was centered on whether the snapback from the March lows was "too far, too fast" for many stocks, especially information technology names, but the bears lost to the bulls in this debate, at least for now. The two areas that appeared to be showing the most robust recovery, PCs and wireless, ignited the spark of investor sentiment elsewhere in the sector. Since the second quarter of 2003, lower quality and/or high beta names have attracted the most investor interest. The Fund was well-served by our above-index exposure to both small and mid cap companies. In addition, our outperformance can be attributed to strong relative stock selection across a number of sectors. Health care, consumer discretionary, and industrials were the areas in which our investments excelled the most versus the index. Only within information technology were we disappointed with our stock selection and low relative exposure to this outperforming sector. However, we can live with the result, as it was a reflection of our aversion to holding some of the more speculative, high beta names in the universe, which tended to do well during the period. For the twelve-month period, the greatest contributors to absolute Fund returns were Cendant Corp. (business services), American Tower Corp., Class A (communications), and Nextel Communications, Inc. (communications). The stock of global business provider Cendant Corp. gained on continued strength in real estate, improvement in travel services, and progress with its Avis/Budget integration. The largest detractors from absolute Fund returns were Schering-Plough Corp. (drugs), NDC Health Corp. (health services), and AT&T Corp. (communications), all of which were eliminated from the portfolio prior to period end. WHAT IS YOUR OUTLOOK AND STRATEGY? Investor optimism surrounding the economy and the equity markets has mostly taken uniform shape. Tax cuts, a weaker dollar, sustained productivity, and healthier balance sheets all bode well for corporate profits. As the growth trajectory continues, we will continue to look for improved corporate spending and employment trends. Entering 2004, the Fund's consumer discretionary position is significantly overweight relative to the benchmark; we continue to seek companies that we consider market share gainers. In other areas of the growth universe, the Fund's overweight to the telecommunications services sector is a partial offset to the underweight to the information technology sector, where we feel valuations continue to be stretched. 2 HARTFORD GLOBAL LEADERS HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- --------- COMMON STOCKS -- 96.8% AEROSPACE & DEFENSE -- 1.5% +4,434 China Merchants Holdings International Co., Ltd. ........................................... $ 5,854 +-291 European Aeronautic Defense & Space Co. .......... 6,952 --------- 12,806 --------- AGRICULTURE & FISHING -- 0.2% -93 Nokia Oyj......................................... 1,594 BANKS -- 8.0% 365 Bank One Corp. ................................... 16,627 339 Citigroup, Inc. .................................. 16,474 54 Countrywide Credit Industries, Inc. .............. 4,126 -331 Credit Suisse Group............................... 12,064 -162 Deutsche Bank AG.................................. 13,366 97 Federal Home Loan Mortgage Association............ 5,645 --------- 68,302 --------- BUSINESS SERVICES -- 2.9% *922 Cendant Corp. .................................... 20,537 -1 Dentsu, Inc. ..................................... 4,594 --------- 25,131 --------- COMMUNICATIONS -- 10.4% -2,875 Carphone Warehouse Group PLC...................... 7,585 -1 DDI Corp. ........................................ 4,337 -571 Deutsche Telekom AG............................... 10,368 *109 NTL, Inc. ........................................ 7,617 *+185 Research in Motion Ltd. .......................... 12,350 -7,326 Telefonaktiebolaget LM Ericsson................... 12,931 -8,724 Vodafone Group PLC................................ 21,677 *+1,209 Wanadoo........................................... 9,916 *+100 XM Satellite Radio Holdings, Inc. ................ 2,628 --------- 89,409 --------- COMPUTERS & OFFICE EQUIPMENT -- 2.9% *578 Cisco Systems, Inc. .............................. 14,047 *317 Dell, Inc. ....................................... 10,762 --------- 24,809 --------- CONSTRUCTION -- 2.5% 3,634 ABB Ltd. ......................................... 18,423 34 Lennar Corp. ..................................... 3,283 --------- 21,706 --------- CONSUMER NON-DURABLES -- 5.0% 659 Gillette Co. (The)................................ 24,190 *195 Medco Health Solutions, Inc. ..................... 6,611 466 Tyco International Ltd. .......................... 12,338 --------- 43,139 --------- DRUGS -- 10.9% -198 AstraZeneca PLC................................... 9,495 197 Eli Lilly & Co. .................................. 13,873 *261 Forest Laboratories, Inc. ........................ 16,136 373 Pfizer, Inc. ..................................... 13,180 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- --------- DRUGS -- (CONTINUED) -230 Roche Holdings AG................................. $ 23,227 213 Schering AG....................................... 10,767 +117 Teva Pharmaceutical Industries Ltd., ADR.......... 6,646 --------- 93,324 --------- EDUCATION -- 0.5% *67 Apollo Group, Inc. ............................... 4,576 --------- ELECTRICAL EQUIPMENT -- 1.0% *59 KLA-Tencor Corp. ................................. 3,444 -1,958 Techtronic Industries Co. ........................ 5,462 --------- 8,906 --------- ELECTRONICS -- 5.7% *328 Altera Corp. ..................................... 7,450 106 Analog Devices, Inc. ............................. 4,857 -738 Matsushita Electric Industrial Co. ............... 10,270 @30 Samsung Electronics Co., Ltd., GDR................ 5,636 +-263 Siemens AG........................................ 20,961 --------- 49,174 --------- ENERGY & SERVICES -- 7.6% 114 Apache Corp. ..................................... 9,205 -3,306 Cnooc Ltd. ....................................... 6,522 217 Exxon Mobil Corp. ................................ 8,909 *260 Noble Corp. ...................................... 9,317 189 Schlumberger Ltd. ................................ 10,315 -114 TotalFinaElf S.A., B Shares....................... 21,096 --------- 65,364 --------- FINANCIAL SERVICES -- 1.7% 254 Merrill Lynch & Co., Inc. ........................ 14,888 FOOD, BEVERAGE & TOBACCO -- 5.2% 375 Altria Group, Inc. ............................... 20,429 -1,262 Compass Group PLC................................. 8,602 -655 Imperial Tobacco Group PLC........................ 12,914 - @@-- Japan Tobacco, Inc. .............................. 2,428 --------- 44,373 --------- INSURANCE -- 3.6% -126 Allianz AG........................................ 15,996 -120 Muenchener Rueckversicherungs Gesellschaft AG..... 14,666 --------- 30,662 --------- MACHINERY -- 4.3% *-296 ASML Holding N.V. ................................ 5,923 -530 Atlas Copco AB.................................... 19,031 179 Deere (John) & Co. ............................... 11,657 --------- 36,611 --------- MEDIA & ENTERTAINMENT -- 4.2% 71 Clear Channel Communications, Inc. ............... 3,325 *466 Comcast Corp., Special Class A.................... 14,580 +-1,017 Mediaset S.p.A. .................................. 12,107 *148 Univision Communications, Inc. ................... 5,854 --------- 35,866 --------- </Table> The accompanying notes are an integral part of this financial statement. 3 HARTFORD GLOBAL LEADERS HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- --------- COMMON STOCKS -- (CONTINUED) MEDICAL INSTRUMENTS & SUPPLIES -- 4.2% *361 Boston Scientific Corp. .......................... $ 13,263 329 Guidant Corp. .................................... 19,782 -35 Sanofi-Synthelabo S.A. ........................... 2,662 --------- 35,707 --------- METALS, MINERALS & MINING -- 1.7% *6,927 Corus Group PLC................................... 3,720 +165 JSC Mining & Smelting Co., ADR.................... 10,737 --------- 14,457 --------- RETAIL -- 3.9% -103 Fast Retailing Co., Ltd. ......................... 6,307 -2,000 Kingfisher PLC.................................... 10,009 -126 Pinault Printemps Redoute S.A. ................... 12,253 *180 Staples, Inc. .................................... 4,914 --------- 33,483 --------- SOFTWARE & SERVICES -- 4.5% -40 Advantest Corp. .................................. 3,204 306 Microsoft Corp. .................................. 8,436 -69 SAP AG............................................ 11,441 *334 Yahoo!, Inc. ..................................... 15,074 --------- 38,155 --------- TRANSPORTATION -- 4.4% 217 BMW AG............................................ 10,073 *-2,229 British Airways PLC............................... 9,291 +-60 Renault S.A. ..................................... 4,120 150 United Technologies Corp. ........................ 14,168 --------- 37,652 --------- Total common stocks............................... $ 830,094 ========= </Table> <Table> SHORT-TERM SECURITIES -- 10.9% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 7.2% 61,510 State Street Navigator Securities Lending Prime Portfolio....................................... $ 61,510 --------- PRINCIPAL AMOUNT ------- REPURCHASE AGREEMENTS -- 3.7% $32,220 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... 32,220 --------- Total short-term securities....................... $ 93,730 ========= </Table> <Table> <Caption> MARKET VALUE # --------- DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $710,266).......... 96.8% $ 830,094 Total short-term securities (cost $93,730)... 10.9 93,730 ----- --------- Total investment in securities (total cost $803,996) -- including $58,863 of securities loaned (See Note 2(i)).......... 107.7 923,824 Cash, receivables and other assets........... 0.2 2,058 Payable for securities purchased............. (0.4) (3,926) Payable for Fund shares redeemed............. (0.3) (3,002) Securities lending collateral payable to brokers (See Note 2(i)).................... (7.2) (61,510) Other liabilities............................ (0.0) (80) ----- --------- Net assets................................... 100.0% $ 857,364 ===== ========= </Table> <Table> <Caption> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 3,400,000 shares authorized; 55,251 shares outstanding.................................... $ 55 Paid in capital.................................. 922,167 Accumulated net investment income................ 1,723 Accumulated net realized loss on investments..... (186,432) Unrealized appreciation on investments........... 119,828 Unrealized appreciation on forward foreign currency contracts (See Note 2(g))@@@.......... 4 Unrealized appreciation on other assets and liabilities in foreign currencies.............. 19 --------- Net assets....................................... $ 857,364 ========= </Table> <Table> <Caption> Class IA Net asset value per share ($728,049 / 46,890 shares outstanding) (3,200,000 shares authorized)..................................... $15.53 ====== Class IB Net asset value per share ($129,315 / 8,362 shares outstanding) (200,000 shares authorized)........ $15.47 ====== </Table> <Table> <Caption> PERCENTAGE OF NET ASSETS DIVERSIFICATION BY COUNTRY: ---------- United States of America............................ 56.6% Germany............................................. 12.6 United Kingdom...................................... 9.7 Switzerland......................................... 6.3 France.............................................. 5.8 Sweden.............................................. 3.7 Japan............................................... 3.6 Hong Kong........................................... 2.1 Netherlands......................................... 1.5 Canada.............................................. 1.4 Italy............................................... 1.4 Russia.............................................. 1.3 Israel.............................................. 0.8 South Korea......................................... 0.7 Finland............................................. 0.2 ----- Total............................................. 107.7% ===== </Table> The accompanying notes are an integral part of this financial statement. 4 - -------------------------------------------------------------------------------- <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 51.1% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). @ Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2003, the market value of these securities amounted to $5,636 or 0.7% of net assets (See Note 2(m)). - Security valued in good faith at fair value by, or under the direction of, the Funds' Board of Directors. The aggregate value of these securities as of December 31, 2003 was $343,455, which represents 40.1% of total net assets. @@ Due to the presentation of the financial statements in thousands, the number of shares and/or market value round to zero. </Table> @@@FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING AT DECEMBER 31, 2003 <Table> <Caption> UNREALIZED MARKET CONTRACT DELIVERY APPRECIATION DESCRIPTION VALUE AMOUNT DATE (DEPRECIATION) - ----------- ------ -------- -------- -------------- British Pound (Buy) $516 $512 1/5/2004 $4 == </Table> The accompanying notes are an integral part of this financial statement. 5 HARTFORD GROWTH OPPORTUNITIES HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- 97.5% APPAREL & TEXTILE -- 0.9% -1,084 Burberry Group PLC................................ $ 7,089 -------- BANKS -- 4.6% 161 Bank One Corp. ................................... 7,358 145 Countrywide Credit Industries, Inc. .............. 10,983 81 Federal Home Loan Mortgage Association............ 4,736 154 Federal National Mortgage Association............. 11,582 -------- 34,659 -------- BUSINESS SERVICES -- 2.7% *932 Cendant Corp. .................................... 20,753 -------- COMMUNICATIONS -- 8.7% *1017 American Tower Corp., Class A..................... 11,006 *278 Crown Castle International Corp. ................. 3,065 *150 Level 3 Communications Holdings, Inc. ............ 7,678 *235 NTL, Inc. ........................................ 16,363 *610 Nextel Communications, Inc., Class A.............. 17,111 *+1,745 Sirius Satellite Radio, Inc. ..................... 5,515 *+191 XM Satellite Radio Holdings, Inc. ................ 5,040 -------- 65,778 -------- COMPUTERS & OFFICE EQUIPMENT -- 3.2% 154 CDW Corp. ........................................ 8,907 *221 Dell, Inc. ....................................... 7,502 *252 Netscreen Technologies, Inc. ..................... 6,242 ***117 Quanta Computer, Inc., GDR........................ 1,438 -------- 24,089 -------- CONSTRUCTION -- 5.1% 200 Horton (D.R.), Inc. .............................. 8,656 89 Lennar Corp. ..................................... 8,573 145 Pulte Corp. ...................................... 13,556 -1,599 Rinker Group Ltd. ................................ 7,909 -------- 38,694 -------- CONSUMER DURABLES -- 2.2% *1263 Corning, Inc. .................................... 13,177 *195 Genesis Microchip, Inc. .......................... 3,511 -------- 16,688 -------- CONSUMER NON-DURABLES -- 4.1% 122 AmerisourceBergen Corp. .......................... 6,833 226 Cardinal Health, Inc. ............................ 13,816 *298 Medco Health Solutions, Inc. ..................... 10,139 -------- 30,788 -------- DRUGS -- 8.6% 147 Abbott Laboratories............................... 6,841 *+188 Cephalon, Inc. ................................... 9,087 *259 Forest Laboratories, Inc. ........................ 16,012 *369 IVAX Corp. ....................................... 8,819 *125 Medicines Co. (The)............................... 3,691 *389 Millennium Pharmaceuticals, Inc. ................. 7,257 *+109 NPS Pharmaceuticals, Inc. ........................ 3,341 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- -------- DRUGS -- (CONTINUED) *54 Neurocrine Biosciences, Inc. ..................... $ 2,923 411 Serono S.A., ADR.................................. 7,210 -------- 65,181 -------- EDUCATION -- 3.0% *113 Apollo Group, Inc. ............................... 7,711 *194 Career Education Corp. ........................... 7,774 *240 Education Management Corp. ....................... 7,456 -------- 22,941 -------- ELECTRICAL EQUIPMENT -- 1.1% -3,073 Techtronic Industries Co. ........................ 8,573 -------- ELECTRONICS -- 8.7% *417 Altera Corp. ..................................... 9,473 172 American Power Conversion Corp. .................. 4,208 154 Analog Devices, Inc. ............................. 7,016 *979 ChipPAC, Inc. .................................... 7,430 *+317 Epcos AG, ADR..................................... 7,139 *+280 FuelCell Energy, Inc. ............................ 3,635 *771 MEMC Electronic Materials, Inc. .................. 7,419 *271 Pixelworks, Inc. ................................. 2,987 *183 Quantum Fuel Systems Technologies Worldwide, Inc. ........................................... 1,471 325 STMicroelectronics N.V., NY Reg Shares............ 8,788 *595 Taiwan Semiconductor Manufacturing Co., Ltd., ADR............................................. 6,094 -------- 65,660 -------- ENERGY & SERVICES -- 1.1% 205 Arch Coal, Inc. .................................. 6,387 *57 Universal Tech.................................... 1,710 -------- 8,097 -------- FINANCIAL SERVICES -- 2.4% 114 Blackrock, Inc. .................................. 6,055 148 Federated Investors, Inc., Class B................ 4,354 115 UBS AG............................................ 7,812 -------- 18,221 -------- FOOD, BEVERAGE & TOBACCO -- 3.7% 220 Altria Group, Inc. ............................... 11,994 203 Bunge Ltd. ....................................... 6,679 *289 Constellation Brands, Inc. ....................... 9,530 -------- 28,203 -------- HEALTH SERVICES -- 2.1% *402 Edwards Lifesciences Corp. ....................... 12,101 *280 Human Genome Sciences, Inc. ...................... 3,706 -------- 15,807 -------- MACHINERY -- 0.9% *408 Asyst Technologies, Inc. ......................... 7,075 -------- MEDIA & ENTERTAINMENT -- 2.4% *300 Comcast Corp., Class A............................ 9,858 *162 Entercom Communications Corp. .................... 8,590 -------- 18,448 -------- </Table> The accompanying notes are an integral part of this financial statement. 6 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- (CONTINUED) MEDICAL INSTRUMENTS & SUPPLIES -- 4.7% 142 DENTSPLY International, Inc. ..................... $ 6,414 191 Guidant Corp. .................................... 11,492 227 Medtronic, Inc. .................................. 11,030 *319 Viasys Healthcare, Inc. .......................... 6,576 -------- 35,512 -------- METALS, MINERALS & MINING -- 1.1% 176 Precision Castparts Corp. ........................ 7,997 -------- RESEARCH & TESTING FACILITIES -- 1.5% 123 Moody's Corp. .................................... 7,454 *168 Telik, Inc. ...................................... 3,859 -------- 11,313 -------- RETAIL -- 9.9% *90 Advance Auto Parts, Inc. ......................... 7,326 *94 Dick's Sporting Goods, Inc. ...................... 4,594 *145 eBay, Inc. ....................................... 9,359 714 Gap, Inc. (The)................................... 16,563 228 Home Depot, Inc. (The)............................ 8,088 278 Michaels Stores, Inc. ............................ 12,301 423 PetSmart, Inc. ................................... 10,077 *256 Rare Hospitality International, Inc. ............. 6,247 -------- 74,555 -------- RUBBER & PLASTICS PRODUCTS -- 1.6% *431 Jarden Corp. ..................................... 11,782 -------- SOFTWARE & SERVICES -- 8.9% *178 Alliance Sata Systems Corp. ...................... 4,930 *502 Amdocs Ltd., ADR.................................. 11,294 *593 BEA Systems, Inc. ................................ 7,290 *173 Intuit, Inc. ..................................... 9,175 *150 Mercury Interactive Corp. ........................ 7,315 *616 Red Hat, Inc. .................................... 11,560 *262 Websense, Inc. ................................... 7,673 *179 Yahoo!, Inc. ..................................... 8,094 -------- 67,331 -------- TRANSPORTATION -- 4.3% 136 Expeditors International Washington, Inc. ........ 5,126 *109 JetBlue Airways Corp. ............................ 2,893 *+236 Ryanair Holdings PLC, ADR......................... 11,931 *633 Sirva, Inc. ...................................... 12,365 -------- 32,315 -------- Total common stocks............................... $737,549 ======== SHORT-TERM SECURITIES -- 8.5% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 4.3% 32,513 Boston Global Investment Trust.................... $ 32,513 -------- PRINCIPAL MARKET AMOUNT VALUE # ------- -------- REPURCHASE AGREEMENTS -- 4.2% $31,537 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04............................. $ 31,537 -------- Total short-term securities....................... $ 64,050 ======== </Table> <Table> DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $609,993)............... 97.5% $737,549 Total short-term securities (cost $64,050)........ 8.5 64,050 ----- -------- Total investment in securities (total cost $674,043) -- including $31,563 of securities loaned (See Note 2(i)).......................... 106.0 801,599 Cash, receivables and other assets................ 0.1 993 Payable for securities purchased.................. (0.2) (1,137) Payable for Fund shares redeemed.................. (1.6) (12,305) Securities lending collateral payable to brokers (See Note 2(i))................................. (4.3) (32,513) Other liabilities................................. (0.0) (51) ----- -------- Net assets........................................ 100.0% $756,586 ===== ======== </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 700,000 shares authorized; 32,103 shares outstanding..................... $ 32 Paid in capital............................................. 769,644 Accumulated net investment loss............................. (12) Accumulated net realized loss on investments................ (140,636) Unrealized appreciation on investments...................... 127,556 Unrealized depreciation on forward foreign currency contracts (See Note 2(g))@@@.............................. (5) Unrealized appreciation on other assets and liabilities in foreign currencies........................................ 7 --------- Net assets.................................................. $ 756,586 ========= </Table> <Table> Class IA Net asset value per share ($696,900 / 29,561 shares outstanding) (500,000 shares authorized)................................... $23.57 ====== Class IB Net asset value per share ($59,686 / 2,542 shares outstanding) (200,000 shares authorized)................................... $23.48 ====== </Table> <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 11.3% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). - Security valued in good faith at fair value by, or under the direction of, the Funds' Board of Directors. The aggregate value of these securities as of December 31, 2003 was $23,571, which represents 3.1% of total net assets. ** Securities contain some restriction as to public resale. At December 31, 2003, the market value of these securities amounted to $1,438 or 0.2% of net assets (See Note 2(m)). </Table> The accompanying notes are an integral part of this financial statement. 7 HARTFORD GROWTH OPPORTUNITIES HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- @@@FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING AT DECEMBER 31, 2003 <Table> <Caption> UNREALIZED CONTRACT DELIVERY APPRECIATION DESCRIPTION MARKET VALUE AMOUNT DATE (DEPRECIATION) - ----------- ------------ --------------- -------- -------------- British Pound (Sell) $487 $482 01/02/04 $(5) Hong Kong Dollar (Buy) 105 105 01/02/04 -- --- $(5) === </Table> The accompanying notes are an integral part of this financial statement. 8 HARTFORD MONEY MARKET HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - --------- ---------- COMMERCIAL PAPER -- 35.0% $@50,000 Bradford & Bingley PLC 1.15% due 01/07/05.............................. $ 50,000 55,000 Cafco 1.08% due 02/18/04.............................. 54,921 36,500 Diageo Capital PLC 0.00% due 03/18/04.............................. 36,411 42,500 du Pont (E.I.) de Nemours & Co. 0.00% due 02/10/04.............................. 42,450 50,000 Household Finance Corp. 1.08% due 01/06/04.............................. 49,993 25,000 Nationwide Building Society 0.00% due 01/07/04.............................. 24,995 45,391 Old Line Funding Corp. 0.00% due 01/23/04.............................. 45,360 55,000 Preferred Receivable Funding 0.00% due 02/04/04.............................. 54,944 55,000 Province of Quebec 1.07% due 01/28/04.............................. 54,956 42,500 Sara Lee 1.15% due 02/06/04.............................. 42,451 55,000 Sheffield Receivable Corp. 0.00% due 01/26/04.............................. 54,958 50,000 Spintab 0.00% due 02/03/04.............................. 49,950 44,507 Svenska Handelsbanken 0.00% due 02/17/04.............................. 44,444 42,500 Toyota Motor Credit Corp. 1.06% due 01/22/04.............................. 42,474 ---------- 648,307 ---------- Total commercial paper............................ $ 648,307 ========== CORPORATE NOTES -- 58.7% $ 40,000 American Express Credit 1.261% due 12/27/04............................. $ 40,065 8,500 American Express Credit 1.274% due 12/16/04............................. 8,513 42,500 American General Finance 1.34% due 08/06/04.............................. 42,554 17,000 Bank One Corp. 1.45% due 02/20/04.............................. 17,007 25,000 Bear Stearns Co., Inc. 1.319% due 02/12/04............................. 25,004 8,500 Bear Stearns Co., Inc. 1.423% due 06/01/04............................. 8,510 8,500 Bear Stearns Co., Inc. 1.56% due 09/21/04.............................. 8,525 @25,000 Cargill, Inc. 1.16% due 01/14/04.............................. 25,000 43,000 Caterpillar, Inc. 1.323% due 08/02/04............................. 43,051 42,000 Citigroup Global 1.29% due 06/17/04.............................. 42,030 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - --------- ---------- $ 13,320 Diageo Capital PLC 6.625% due 06/24/04............................. $ 13,660 50,000 Federal Home Loan Bank 1.50% due 12/24/04.............................. 50,000 30,000 Federal Home Loan Mortgage Association 1.25% due 08/27/04.............................. 30,000 50,000 Federal Home Loan Mortgage Association 1.40% due 11/03/04.............................. 50,000 50,000 Federal National Mortgage Association 1.43% due 11/15/04.............................. 50,000 50,000 Fleet Financial Group 1.41% due 02/19/04.............................. 50,014 22,000 General Electric Capital Corp. 1.141% due 01/28/04............................. 22,001 39,000 General Electric Capital Corp. 6.875% due 09/15/04............................. 40,528 50,000 Goldman Sachs Group LP 1.11% due 10/25/04.............................. 50,000 @37,500 Honda Motor Corp. 1.12% due 10/22/04.............................. 37,500 51,000 IBM Corp. 1.295% due 09/27/04............................. 51,067 48,750 Key Bank N.A. 1.298% due 03/01/04............................. 48,763 34,230 Lehman Brother Holdings, Inc. 6.625% due 04/01/04............................. 34,681 20,000 Merrill Lynch & Co., Inc. 1.37% due 08/09/04.............................. 20,029 17,000 Merrill Lynch & Co., Inc. 1.42% due 06/11/04.............................. 17,023 55,000 Morgan (J.P.) Chase & Co. 1.285% due 02/05/04............................. 55,008 54,000 Morgan Stanley Group 1.33% due 03/19/04.............................. 54,023 @30,000 Nationwide Building Society 1.14% due 07/23/04.............................. 30,000 @50,000 Northern Rock PLC 1.15% due 01/16/04.............................. 50,000 42,000 Washington Mutual Bank 1.159% due 07/29/04............................. 41,997 30,000 Wells Fargo & Co. 1.103% due 01/14/04............................. 30,000 ---------- 1,086,553 ---------- Total corporate notes............................. $1,086,553 ========== SHORT-TERM SECURITIES -- 3.3% REPURCHASE AGREEMENTS -- 3.3% $ 61,338 Joint Repurchase Agreement (See Note 2(d)) 0.84% due 01/02/04.................................... $ 61,338 ---------- Total short-term securities....................... $ 61,338 ========== </Table> The accompanying notes are an integral part of this financial statement. 9 HARTFORD MONEY MARKET HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET VALUE # ---------- DIVERSIFICATION OF NET ASSETS: Total commercial paper (cost $648,307)............ 35.0% $ 648,307 Total corporate notes (cost $1,086,553)........... 58.7 1,086,553 Total repurchase agreements (cost $61,338)........ 3.3 61,338 ----- ---------- Total investment in securities (total cost $1,796,198)..................................... 97.0 1,796,198 Cash, receivables and other assets................ 3.0 55,266 Dividends payable................................. (0.0) (1,005) Other liabilities................................. (0.0) (90) ----- ---------- Net assets........................................ 100.0% $1,850,369 ===== ========== </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 7,000,000 shares authorized; 1,850,369 shares outstanding... $ 1,850 Paid in capital..................................... 1,848,519 ---------- Net assets.......................................... $1,850,369 ========== </Table> <Table> Class IA Net asset value per share ($1,609,439 / 1,609,439 shares outstanding) (6,000,000 shares authorized)... $1.00 ===== Class IB Net asset value per share ($240,930 / 240,930 shares outstanding) (1,000,000 shares authorized).......... $1.00 ===== </Table> <Table> # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. @ Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2003, the market value of these securities amounted to $192,500 or 10.4% of net assets. (See Note 2(m)). </Table> The accompanying notes are an integral part of this financial statement. 10 HARTFORD HLS MUTUAL FUNDS STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD HARTFORD HARTFORD GLOBAL GROWTH MONEY LEADERS OPPORTUNITIES MARKET HLS FUND HLS FUND HLS FUND -------- ------------- ------------ INVESTMENT INCOME: Dividends................................................. $ 9,231 $ 2,971 $ 64 Interest.................................................. 232 453 27,354 Securities lending........................................ 279 92 -- Less: Foreign tax withheld................................ (554) (45) -- -------- -------- ------- Total investment income (loss).......................... 9,188 3,471 27,418 -------- -------- ------- EXPENSES: Investment advisory fees.................................. 3,647 3,618 5,527 Administrative services fees.............................. 1,378 -- 4,422 Accounting services....................................... 138 -- 442 Board of Directors fees................................... 8 7 28 Custodian fees, gross..................................... 193 32 16 Distribution Fees -- Class IB............................. 208 63 675 Other expenses............................................ 131 93 329 -------- -------- ------- Total expenses (before offsets)......................... 5,703 3,813 11,439 -------- -------- ------- Expenses paid indirectly (see Note 3(d)).................. 3 3 10 Custodian fees offset (see Note 3(d))..................... 3 -- -- -------- -------- ------- Total expenses net...................................... 5,697 3,810 11,429 -------- -------- ------- Net investment income (loss).............................. 3,491 (339) 15,989 -------- -------- ------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on securities.................... 115,915 84,869 -- Net realized gain (loss) on forward foreign currency contracts............................................... 120 (53) -- Net realized gain (loss) on foreign currency transactions............................................ 134 43 -- Net unrealized appreciation (depreciation) on securities.............................................. 98,220 131,438 -- Net unrealized appreciation (depreciation) on forward foreign currency contracts.............................. 13 (5) -- Net unrealized appreciation (depreciation) on translation of other assets and liabilities in foreign currencies... 29 7 -- -------- -------- ------- Net realized and unrealized gain (loss) on investments.... 214,431 216,299 -- -------- -------- ------- Net increase (decrease) in net assets resulting from operations.............................................. $217,922 $215,960 $15,989 ======== ======== ======= </Table> The accompanying notes are an integral part of these financial statements. 11 HARTFORD HLS MUTUAL FUNDS STATEMENTS OF CHANGES IN NET ASSETS (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD GLOBAL LEADERS HLS FUND --------------------------------- FOR THE FOR THE YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, 2003 2002 ------------ ------------ OPERATIONS: Net investment income (loss).............................. $ 3,491 $ 6,467 Net realized gain (loss) on investments................... 116,169 (128,933) Net unrealized appreciation (depreciation) on investments............................................. 98,262 (20,675) -------- --------- Net increase (decrease) in net assets resulting from operations.............................................. 217,922 (143,141) -------- --------- DISTRIBUTIONS TO SHAREHOLDERS: From net investment income Class IA................................................ (2,799) (5,462) Class IB................................................ (323) (437) From net realized gain on investments Class IA................................................ -- -- Class IB................................................ -- -- -------- --------- Total distributions..................................... (3,122) (5,899) -------- --------- CAPITAL SHARE TRANSACTIONS: Class IA................................................ (4,281) 197,555 Class IB................................................ 46,523 17,790 -------- --------- Net increase (decrease) from capital share transactions... 42,242 215,345 -------- --------- Net increase (decrease) in net assets..................... 257,042 66,305 NET ASSETS: Beginning of period....................................... 600,322 534,017 -------- --------- End of period............................................. $857,364 $ 600,322 ======== ========= Accumulated net investment income (loss).................. $ 1,723 $ 1,132 ======== ========= </Table> (a) Formerly, Fortis Growth Stock Series. The accompanying notes are an integral part of these financial statements. 12 - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD GROWTH OPPORTUNITIES HARTFORD MONEY MARKET HLS FUND(A) HLS FUND ----------------------------- --------------------------- FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2003 2002 2003 2002 ------------- ------------- ------------ ------------ $ (339) $ (942) $ 15,989 $ 32,127 84,859 (134,893) -- 100 131,440 (64,626) -- -- -------- --------- ---------- ---------- 215,960 (200,461) 15,989 32,227 -------- --------- ---------- ---------- -- -- (14,648) (29,732) -- -- (1,341) (2,395) -- -- -- (93) -- -- -- (7) -------- --------- ---------- ---------- -- -- (15,989) (32,227) -------- --------- ---------- ---------- 12,439 (76,597) (710,017) 451,936 44,855 5,322 (20,984) 109,785 -------- --------- ---------- ---------- 57,294 (71,275) (731,001) 561,721 -------- --------- ---------- ---------- 273,254 (271,736) (731,001) 561,721 483,332 755,068 2,581,370 2,019,649 -------- --------- ---------- ---------- $756,586 $ 483,332 $1,850,369 $2,581,370 ======== ========= ========== ========== $ (12) $ (16) $ -- $ -- ======== ========= ========== ========== </Table> 13 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2003 ($000'S OMITTED) - -------------------------------------------------------------------------------- 1. ORGANIZATION: The Hartford HLS Mutual Funds serve as the underlying investment vehicles for certain variable annuity and variable life insurance separate account contracts of Fortis Benefits Insurance Company. The Funds are stated below. Hartford Series Fund, Inc. (comprised of twenty-six portfolios, two are included in these financial statements; they are Hartford Global Leaders HLS Fund and Hartford Money Market HLS Fund) and Hartford Series Fund II, Inc. (comprised of eleven portfolios, one is included in these financial statements; it is Hartford Growth Opportunities HLS Fund). Each "Fund" or together the "Funds" are organized under the laws of the State of Maryland and are registered with the Securities and Exchange Commission (SEC) under the Investment Company Act of 1940, as amended, as diversified open-end management investment companies. Each Fund is divided into Class IA and IB shares. Each class is offered at net asset value without a sales charge and is subject to the same expenses except that the Class IB shares are subject to distribution fees charged pursuant to a Rule 12b-1 plan. Distribution and Service Plans have been adopted in accordance with Rule 12b-1 of the Investment Company Act of 1940, as amended. Income and expenses, realized and unrealized capital gains and losses are allocated to each class the Fund based on the ratio of prior day's net assets. 2. SIGNIFICANT ACCOUNTING POLICIES: The following is a summary of significant accounting policies of the Funds, which are in accordance with accounting principles generally accepted in the United States: a) Security Transactions -- Security transactions are recorded on the trade date (the day the order to buy or sell is executed). Security gains and losses are determined on the basis of identified cost. b) Security Valuation and Investment Income -- Equity securities are valued at the last sales price reported on the principal securities exchange on which such securities are traded (domestic or foreign) or on the principal over-the-counter market on which such securities are traded, as of the close of business on the day the securities are being valued. If no sale took place on a particular day, then such securities are valued at the mean between the bid and asked prices. For securities traded on the NASDAQ national market system, the Funds utilize the NASDAQ Official Closing Price which compares the last trade to the bid/ask range of a security. If the last trade falls within the bid/ask range, then that price will be the closing price. If the last trade is outside the bid/ask range, and falls above the ask, the ask will be the closing price. If the last price is below the bid, the bid will be the closing price. The difference between cost and market value for debt and equity securities is recorded in the Statement of Operations and accumulated in net assets. Debt securities (other than short-term obligations) are valued on the basis of valuations furnished by an unaffiliated pricing service which determines valuations for normal institutional size trading units of debt securities. Mortgage securities are valued at the bid price. Short-term securities held in the Money Market Fund are valued at amortized cost or original cost plus accrued interest receivable, both of which approximate market value. In the remaining Funds, short-term investments with maturity of 60 days or less when purchased are valued at amortized cost, which approximates market value. Short-term investments with a maturity of more than 60 days when purchased are valued based on market quotations until the remaining days to maturity become less than 61 days. From such time until maturity, the investments are valued at amortized cost. The Funds use market prices in valuing portfolio securities, but may use fair value estimates, under procedures established by the Board of Directors, if reliable market prices are unavailable. Fair value pricing may be used by a fund when current market values are unavailable or when an event occurs after the close of the exchange on which the fund's portfolio securities are principally traded that is likely to have changed the value of the securities. The Funds are supplied with information from an unaffiliated third party with respect to the fair value of foreign securities. Price movements in future contracts and ADRs, and various other indices may be reviewed in the course of making a good faith determination of a security's fair value. The use of fair value pricing by a fund may cause the net asset value of its shares to differ significantly from the net asset value that would be calculated using current market values. Securities of foreign issuers and non-dollar securities are valued on the basis of quotations 14 - -------------------------------------------------------------------------------- from the primary market in which they are traded, and are translated from the local currency into U.S. dollars using current exchange rates. Options are valued at the last sales price. If no sale took place on such day, then options are valued at the mean between the bid and asked prices. Securities for which prices are not available from an independent pricing service, but where an active marker exists, are valued using market quotations obtained from one or more dealers that make markets in the securities or from an approved quotation system. Investment income such as dividend income is recorded on the ex-dividend date. Interest income, including amortization of bond premium and discount is recorded on the accrual basis. c) Foreign Currency Transactions -- The accounting records of the Funds are maintained in U.S. dollars. All assets and liabilities initially expressed in foreign currencies are converted into U.S. dollars at the prevailing exchange rates. Purchases and sales of investment securities, dividend and interest income and certain expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. The Funds do not isolate that portion of portfolio security valuation resulting from fluctuations in foreign currency exchange rates on portfolio securities from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments in the accompanying financial statements. Net realized foreign exchange gains or losses arise from sales of foreign currencies and the difference between asset and liability amounts initially stated in foreign currencies and the U.S. dollar value of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of other assets and liabilities at the end of the reporting period, resulting from changes in the exchange rates. d) Repurchase Agreements -- A repurchase agreement is an agreement by which the seller of a security agrees to repurchase the security sold at a mutually agreed upon time and price. At the time the Funds enter into a repurchase agreement, the value of the underlying collateral security(ies), including accrued interest, will be equal to or exceed the value of the repurchase agreement. Securities which serve to collateralize the repurchase agreement are held by each Fund's custodian in book entry or physical form in the custodial account of the Fund. Repurchase agreements are valued at cost plus accrued interest receivable. All repurchase agreements are handled through the Funds' custodian, State Street Bank. Certain Funds, together with other investment management companies having investment advisory agreements with Wellington Management Company, LLP ("Wellington") have interests in a joint repurchase agreement dated 12/31/03 each maturing 01/02/04 with the following brokers: $190,380 BNP Paribas Securities, 0.82%; $435,000 ABN Amro, 0.82%; and $1,070,000 UBS Securities, 0.84%. These joint repurchase agreements are collateralized by $1,325,076 U.S. Treasury Bonds 3.375% -- 12.750% due 11/15/10 -- 04/15/32 and $410,208 U.S. Treasury Notes 1.625% -- 4.250% due 12/31/04 -- 01/15/10. The maturity amounts are as follows: <Table> <Caption> MATURITY FUND AMOUNT ---- -------- Hartford Global Leaders HLS Fund............................ $32,221 Hartford Growth Opportunities HLS Fund...................... 31,538 </Table> Certain Funds, together with other investment management companies having investment advisory agreements with The Hartford Investment Management Company (Hartford Investment Management), a wholly owned subsidiary of The Hartford Financial Services Group, Inc. (The Hartford), have interests in a joint repurchase agreement dated 12/31/03 each maturing 01/02/04 with the following brokers: $180,326 UBS Warburg, 0.84%; and $150,000 RBS Greenwich Capital Markets, 0.84%. These joint repurchase agreements are collateralized by $336,910 U.S. Treasury Bonds 6.250% -- 13.250% due 11/15/09 -- 05/15/30. The maturity amount for the Hartford Money Market HLS Fund is $61,341. e) Joint Trading Account -- Pursuant to an exemptive order issued by the SEC, the Funds may transfer uninvested cash balances into a joint trading account managed by Hartford Investment Management or Wellington. These 15 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- balances may be invested in one or more repurchase agreements and/or short-term money market instruments. As of December 31, 2003, the Fund had no joint trading accounts. f) Futures, Options on Futures and Options Transactions -- The Hartford Global Leaders HLS Fund and the Hartford Growth Opportunities HLS Fund may invest in futures contracts and options contracts in order to gain exposure to or protect against changes in the market. A futures contract is an agreement between two parties to buy and sell a security at a set price on a future date. When the Funds enter into such contracts, they are required to deposit with their custodian an amount of "initial margin" of cash, commercial paper or U.S. Treasury Bills. Subsequent payments, called maintenance margin, to and from the broker-dealer, are made on a daily basis as the price of the underlying debt security fluctuates, making the long and short positions in the futures contract more or less valuable (i.e., mark-to-market), which results in an unrealized gain or loss to the Funds. The market value of a traded futures contract is the last sale price. In the absence of a last sale price, the last offering price is used. In the absence of either of these prices, fair value is determined according to procedures established by the Funds' Board of Directors. At any time prior to the expiration of the futures contract, the Funds may close the position by taking an opposite position which, would operate to terminate the position in the futures contract. A final determination of maintenance margin is then made, additional cash is required to be paid by or released to the Funds and the Funds realize a gain or loss. The use of futures contracts involve elements of market, which may exceed the amounts recognized in the Statements of Assets and Liabilities. Change in the value of the futures contracts may decrease the effectiveness of a Fund's strategies and potentially result in loss. The premium paid by a Fund for the purchase of a call or put option is included in the Fund's Statement of Assets and Liabilities as an investment and subsequently "marked-to-market" through net unrealized appreciation (depreciation) of options to reflect the current market value of the option as of the end of the reporting period. If a purchased option expires on its stipulated expiration date, the Fund realizes a loss in the amount of the cost of the option. If the Fund exercises a put option, it realizes a gain or loss from the sale of the underlying security and the proceeds from such sale will be decreased by the premium originally paid. If the Fund exercises a call option, the cost of the security, which the Fund purchases upon exercise, will be increased by the premium originally paid to buy the call. The Funds may write covered options. "Covered" means that so long as the Fund is obligated as the writer of an option, it will own either the underlying securities or currency or an option to purchase or sell the same underlying securities or currency having an expiration date of the covered option at an exercise price equal to or less than the exercise price of the covered option, or will establish or maintain with its custodian for the term of the option a "segregated account" consisting of cash or other liquid securities having a value equal to the fluctuating market value of the option securities or currencies. The Fund receives a premium from writing a call or put option, recorded as a component of other liabilities on the Statements of Assets and Liabilities, which increases the Fund's return, recorded as a realized gain, if the option expires unexercised or is closed out at a net profit. Any loss realized from the covered option is offset by the gain realized on the sale of the underlying securities or currency. Covered options, at times before exercise of close out, are marked-to-market net unrealized appreciation (depreciation) of options. There is a risk of loss from a change in value of such options, which may exceed the related premiums received. The Fund's had no written option activity for the year ended December 31, 2003. g) Forward Foreign Currency Contracts -- As of December 31, 2003, Hartford Global Leaders HLS Fund and Hartford Growth Opportunities HLS Fund had entered into forward foreign currency contracts that obligate the Funds to repurchase/replace or sell currencies at specified future dates. The Funds enter into forward foreign currency contracts to hedge against adverse fluctuations in exchange rates between currencies. The forward foreign currency contracts' costs are included in cash, receivables and other assets or other liabilities, as applicable, in the Fund's Statement of Net Assets. Forward foreign currency contracts involve elements of market risk in excess of the amount reflected in the Statement of Net Assets. In addition, risk may arise upon entering into these contracts from the potential inability 16 - -------------------------------------------------------------------------------- of the counter-parties to meet the terms of the contracts and from unanticipated movements in the value of the foreign currencies relative to the U.S. dollar. h) Indexed Securities -- The Funds may invest in indexed securities whose values are linked to changes in interest rates, indices, or other underlying instruments. The Funds use these securities to increase or decrease its exposure to different underlying instruments and to gain exposure to markets that might be difficult to invest in through conventional securities. Indexed securities are shown at market value in the Statement of Net Assets, if applicable. Indexed securities may be more volatile than their underlying instruments, but any loss is limited to the amount of the original investment and there is a limit to the potential appreciation of the investment. i) Securities Lending -- The Funds, except for Hartford Money Market HLS Fund, may lend their securities to certain qualified brokers who pay these Funds negotiated lender fees. The loans are collateralized at all times with cash with a market value at least equal to the market value of the securities on loan. As with other extensions of credit, these Funds may bear the risk of delay in recovery of the loaned securities or even loss of rights in the collateral should the borrower of the securities fail financially. As of December 31, 2003, the market value of securities loaned for the Hartford Global Leaders HLS Fund was $58,863 and the market value of collateral was $61,510. The market value of securities loaned for the Hartford Growth Opportunities HLS Fund was $31,563 and the market value of collateral was $32,513. j) Federal Income Taxes -- For federal income tax purposes, the Funds intend to continue to qualify as regulated investment companies under Subchapter M of the Internal Revenue Code by distributing substantially all of their taxable net investment income and net realized capital gains to their shareholders or otherwise complying with the requirements of regulated investment companies. Accordingly, no provision for federal income taxes has been made in the accompanying financial statements. k) Fund Share Valuation and Distributions to Shareholders -- Orders for the Funds' shares are executed in accordance with the investment instructions of the contract holders. Dividend income is accrued as of the ex-dividend date, except that certain dividends for foreign securities where the ex-dividend date may have passed, are recorded as soon as the Fund is informed of the ex-dividend date in the exercise of due diligence. Interest income and expenses are accrued on a daily basis. The net asset value of each Fund's shares is determined as of the close of each business day of the New York Stock Exchange (the Exchange). Orders for the purchase of a Fund's shares received prior to the close of the Exchange on any day on which the Fund is open for business are priced at the per-share net asset value determined as of the close of the Exchange. Orders received after the close of the Exchange, or on a day on which the Exchange and/or the Fund is not open for business, are priced at the next determined per-share net asset value. Dividends are declared by the Funds' Board of Directors based upon the investment performance of the respective Funds. The policy of all Funds except the Hartford Money Market HLS Fund is to pay dividends from net investment income and distribute realized capital gains, if any, at least once a year. Hartford Money Market HLS Fund seeks to maintain a stable net asset value per share of $1.00 by declaring a daily dividend from net investment income, including net short-term capital gains and losses, and by valuing its investments using the amortized cost method. Dividends are distributed monthly. Distributions from net investment income, realized capital gains and capital are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States. These differences include the treatment of non-taxable dividends, expiring capital loss carry forwards, foreign currency gains and losses, partnerships, losses deferred due to wash sales and excise tax regulations. Permanent book and tax basis differences relating to shareholder distributions result in reclassifications to capital accounts (see Note 6). l) Use of Estimates -- The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of income and 17 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- expenses during the period. Operating results in the future could vary from the amounts derived from management's estimates. m) Illiquid Securities and Other Investments -- Each HLS Fund is permitted to invest in illiquid securities or other investments. An HLS Fund will not, however, acquire illiquid securities or investments in 15% of its net assets (10% for the Money Market HLS Fund) would consist of such securities or other investments. "Illiquid" securities of investments are those that may not be sold or disposed of in the ordinary course of business within seven days at approximately the same price used to determine a HLS Fund's net asset value. An HLS Fund may not be able to sell illiquid securities or other investments when their sub-advisor considers it desirable to do so or may have to sell such securities or investments at a price that is lower than the price that could be obtained if the securities or investments were more liquid. A sale of illiquid securities or other investments may require more time and may result in higher dealer discounts and other selling expenses than does the sale of those that are illiquid. Illiquid securities and investments also may be more difficult to value do to the unavailability of reliable market quotations for such securities or investments, and investments in them may have an adverse impact on net asset value. Each HLS Fund may purchase certain restricted securities (known as 144A securities) that can be resold to institutions and which may be determined to be liquid pursuant to policies and guidelines of the Board of Directors. Under current interpretations of the SEC staff, the following types of securities are considered illiquid: (1) repurchase agreements maturing in more than seven days; (2) certain restricted securities (securities whose public resale is subject to legal or contractual restrictions); (3) options, with respect to specific securities, not traded on a national securities exchange that are not readily marketable; and (4) any other securities or investments that are not readily marketable. The following represents restricted securities of the Funds as of December 31, 2003: <Table> <Caption> ACQUISITION COST PERCENTAGE OF ACQUISITION FUND'S NET MARKET FUND SECURITY ACQUISITION DATE(S) COST ASSETS VALUE ---- -------- ------------------- ----------- ------------- ------- 144A SECURITIES Hartford Global Leaders Samsung Electronics Co., 7/16/03, 10/1/03 $ 5,248 0.6% $5,636 HLS Fund Ltd., GDR Hartford Money Market HLS Nationwide Building 7/17/03 30,000 1.6 30,000 Fund Society Hartford Money Market HLS Honda Motor Corp. 10/20/03 37,500 2.0 37,500 Fund Hartford Money Market HLS Bradford & Bingley PLC 12/8/03 50,000 2.7 50,000 Fund Hartford Money Market HLS Cargill, Inc. 1/9/03 25,000 1.4 25,000 Fund Hartford Money Market HLS Northern Rock PLC 1/16/03 50,000 2.7 50,000 Fund OTHER RESTRICTED SECURITIES Hartford Growth Quanta Computer, Inc., GDR 12/16/03, 12/19/03, 1,471 0.2 1,438 Opportunities HLS Fund 12/22/03 <Caption> MARKET VALUE PERCENTAGE OF FUND'S NET FUND ASSETS ---- ------------- Hartford Global Leaders 0.7% HLS Fund Hartford Money Market HLS 1.6 Fund Hartford Money Market HLS 2.0 Fund Hartford Money Market HLS 2.7 Fund Hartford Money Market HLS 1.4 Fund Hartford Money Market HLS 2.7 Fund Hartford Growth 0.2 Opportunities HLS Fund </Table> 3. EXPENSES: a) Investment Management and Advisory Agreements -- HL Investment Advisors, LLC (HL Advisors), an indirect wholly-owned subsidiary of The Hartford, serves as investment manager to the Funds pursuant to investment management agreements approved by each Fund's Board of Directors and shareholders. The schedule below reflects the rates of compensation paid to HL Advisors for services rendered: HARTFORD MONEY MARKET HLS FUND <Table> <Caption> AVERAGE DAILY NET ASSETS ANNUAL RATE - ------------------------ ----------- All assets......................................................... 0.250% </Table> 18 - -------------------------------------------------------------------------------- HARTFORD GLOBAL LEADERS HLS FUND <Table> <Caption> AVERAGE DAILY NET ASSETS ANNUAL RATE - ------------------------ ----------- On first $250 million.............................................. 0.575% On next $250 million............................................... 0.525 On next $500 million............................................... 0.475 Over $1 billion.................................................... 0.425 </Table> HARTFORD GROWTH OPPORTUNITIES HLS FUND <Table> <Caption> AVERAGE DAILY NET ASSETS ANNUAL RATE - ------------------------ ----------- On first $100 million.............................................. 0.700% Over $100 million.................................................. 0.600 </Table> Pursuant to sub-advisory agreements between HL Advisors and Wellington, Wellington provides the day-to-day investment management services to Hartford Global Leaders HLS Fund and Hartford Growth Opportunities HLS Fund. Pursuant to investment services agreements between HL Advisors and Hartford Investment Management, Hartford Investment Management provides the day-to-day investment management services to the Hartford Money Market HLS Fund. Wellington and Hartford Investment Management determine the purchase and sale of portfolio securities and place such orders for execution in the name of the respective Fund. In conjunction with their investment activity, Wellington and Hartford Investment Management regularly furnish reports to the Funds' Board of Directors concerning economic forecasts, investment strategy, portfolio activity and performance of the Funds. b) Administrative Services Agreement -- Under the Administrative Services Agreement between Hartford Life Insurance Company (HL) and each of the following Funds: Hartford Global Leaders HLS Fund and Hartford Money Market HLS Fund, HL provides administrative services to the Funds and receives monthly compensation at the annual rate of 0.20% of each Fund's average daily net assets. The Funds assume and pay certain other expenses (including, but not limited to, accounting, custodian, state taxes and directors' fees). Directors' fees represent remuneration paid or accrued to directors not affiliated with HL or any other related company. Accounting Services Agreement -- Under the Fund Accounting Agreement between HL and each of the following Funds: Hartford Global Leaders HLS Fund and Hartford Money Market HLS Fund, HL provides accounting services to the Funds and receives monthly compensation at the annual rate of 0.02% of each Fund's average daily net assets. c) Operating Expenses -- Allocable expenses of the Funds are charged to each Fund based on the ratio of the average net assets of each fund to the combined average net assets of the Funds. Non-allocable expenses are charged to each fund based on specific identification. d) Expense Offset -- The Funds has asked its investment advisors to direct certain security trades, subject to obtaining the best price and execution, to brokers who have agreed to rebate to the Funds' part of the commissions generated. Such rebates are used solely to reduce the Funds' operating expenses. The Funds' custodian bank has also agreed to reduce its fees when the Funds maintain cash on deposit in the non-interest-bearing custody account. For the year ended December 31, 2003, directed brokerage and custodian fee offset arrangements reduced expenses by $16 and $3, respectively. The total expense reduction represented an effective annual rate of 0.00% of the Funds' average net assets. e) Distribution Plan for Class IB shares -- Each Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the 1940 Act for the Class IB shares. Pursuant to the Distribution Plan, each Fund compensates the Distributor from assets attributable to the Class IB shares for services rendered and expenses borne in connection with activities primarily intended to result in the sale of the Class IB shares. The Distribution Plan provides that each Fund pay annually 0.25% of the average daily net assets of a fund attributable to its Class IB shares for activities primarily intended to result in the sale of Class IB shares. Under the terms of the Distribution Plan and the principal underwriting agreement, each Fund is authorized to make payments monthly to the Distributor which may be used to pay or reimburse entities providing distribution 19 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- and shareholder servicing with respect to the Class IB shares for such entities' fees or expenses incurred or paid in that regard. 4. INVESTMENT TRANSACTIONS: For the year ended December 31, 2003, aggregate purchases and sales of investment securities (excluding short-term investments) were as follows: <Table> <Caption> COST OF SALES FUND PURCHASES PROCEEDS ---- ---------- ---------- Hartford Global Leaders HLS Fund............................ $2,008,240 $1,966,897 Hartford Growth Opportunities HLS Fund...................... 900,376 836,145 </Table> 5. RECLASSIFICATION OF CAPITAL ACCOUNTS: In accordance with AICPA Statement of Position 93-2, Determination, Disclosure, and Financial Statement Presentation of Income, Capital Gain, and Return of Capital Distributions by Investment Companies, the Funds have recorded several reclassifications in their capital accounts. These reclassifications had no impact on the net asset value per share of the Funds and are designed generally to present undistributed income and realized gains on a tax basis which is considered to be more informative to the shareholder. As of December 31, 2003, the Funds recorded the following reclassifications to increase (decrease) the accounts listed below. <Table> <Caption> ACCUMULATED ACCUMULATED ACCUMULATED NET REALIZED NET REALIZED NET INVESTMENT GAIN (LOSS) ON GAIN (LOSS) ON FUND INCOME (LOSS) INVESTMENTS INVESTMENTS ---- -------------- -------------- -------------- Hartford Global Leaders HLS Fund....................... $222 $(2,706) $2,484 Hartford Growth Opportunities HLS Fund................. 344 69 (413) </Table> TAX COST AND UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS: As of December 31, 2003, the aggregate gross unrealized appreciation and depreciation of all investments, based on cost for federal income tax purposes, was as follows: <Table> <Caption> AGGREGATE AGGREGATE GROSS GROSS NET UNREALIZED UNREALIZED UNREALIZED APPRECIATION/ FUND TAX COST APPRECIATION DEPRECIATION (DEPRECIATION) ---- -------- ------------ ------------ -------------- Hartford Global Leaders HLS Fund................. $808,360 $117,868 $(2,405) $115,463 Hartford Growth Opportunities HLS Fund........... 674,043 134,173 (6,616) 127,557 </Table> 6. CAPITAL LOSS CARRY FORWARD: At December 31, 2003, the following Funds had capital loss carry forwards for U.S. federal tax purposes of approximately: <Table> <Caption> YEAR OF FUND AMOUNT EXPIRATION ---- -------- ---------- Hartford Global Leaders HLS Fund............................ $115,095 2010 Hartford Global Leaders HLS Fund............................ 66,973 2009 Hartford Growth Opportunities HLS Fund...................... 128,757 2010 Hartford Growth Opportunities HLS Fund...................... 11,879 2009 </Table> Based on certain provisions in the Internal Revenue Code, various limitations regarding the future utilization of the Hartford Global Leaders HLS Fund carry forwards may apply. 20 - -------------------------------------------------------------------------------- For the fiscal year ended December 31, 2003, the following Funds have elected to defer losses occurring between November 1, 2003 and December 31, 2003 as follows: <Table> <Caption> CAPITAL LOSS CURRENCY LOSS FUND DEFERRED DEFERRED ---- ------------ ------------- Hartford Growth Opportunities HLS Fund...................... $ -- $14 </Table> 7. DISTRIBUTION TO SHAREHOLDERS: The tax character of distributions paid during 2003 was as follows: <Table> <Caption> ORDINARY LONG-TERM RETURN FUND INCOME CAPITAL GAIN OF CAPITAL ---- -------- ------------ ---------- Hartford Global Leaders HLS Fund............................ $ 3,122 $ -- $ -- Hartford Money Market HLS Fund.............................. 15,989 -- -- </Table> The tax character of distributions paid during 2002 was as follows: <Table> <Caption> ORDINARY LONG-TERM RETURN FUND INCOME CAPITAL GAIN OF CAPITAL ---- -------- ------------ ---------- Hartford Global Leaders HLS Fund............................ $ 5,899 $ -- $ -- Hartford Money Market HLS Fund.............................. 32,227 -- -- </Table> As of December 31, 2003, the components of distributable earnings on tax basis were as follows: <Table> <Caption> UNDISTRIBUTED UNDISTRIBUTED UNDISTRIBUTED UNREALIZED ORDINARY LONG-TERM APPRECIATION FUND INCOME CAPITAL GAIN (DEPRECIATION) ---- ------------- ------------- -------------- Hartford Global Leaders HLS Fund............................ $1,778 $ -- $115,483 Hartford Growth Opportunities HLS Fund...................... -- -- 127,563 </Table> 8. CAPITAL SHARE TRANSACTIONS: The following information is for the year ended December 31, 2003: <Table> <Caption> HARTFORD GROWTH HARTFORD GLOBAL LEADERS OPPORTUNITIES HARTFORD MONEY MARKET HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold.................... 54,563 $ 690,769 7,982 $ 166,767 5,510,526 $ 5,510,526 Shares issued in merger........ 953 11,029 -- -- -- -- Shares issued on reinvestment of distributions............. 192 2,799 -- -- 14,649 14,649 Shares redeemed................ (56,200) (708,878) (7,578) (154,328) (6,235,192) (6,235,192) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ (492) $ (4,281) 404 $ 12,439 (710,017) $ (710,017) =========== =========== ========== =========== ========== =========== </Table> 21 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD GROWTH HARTFORD GLOBAL LEADERS OPPORTUNITIES HARTFORD MONEY MARKET HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold.................... 4,176 $ 54,489 2,313 $ 46,768 289,678 $ 289,678 Shares issued on reinvestment of distributions............. 18 323 -- -- 1,341 1,341 Shares redeemed................ (664) (8,289) (94) (1,913) (312,003) (312,003) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ (3,530) $ 46,523 2,219 $ 44,855 (20,984) $ (20,984) =========== =========== ========== =========== ========== =========== </Table> The following information is for the year ended December 31, 2002: <Table> <Caption> HARTFORD GROWTH HARTFORD GLOBAL LEADERS OPPORTUNITIES HARTFORD MONEY MARKET HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold.................... 453,367 $ 595,753 1,112 $ 20,116 7,433,161 $ 7,433,161 Shares issued in merger........ 183,081 253,327 -- -- 122,443 122,443 Shares issued on reinvestment of distributions............. 727 5,462 -- -- 29,756 29,756 Shares redeemed................ (474,221) (656,987) (5,284) (96,713) (7,133,424) (7,133,424) Shares in 1 for 10 stock split........................ (451,449) -- -- -- -- -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ (288,495) $ 197,555 (4,162) $ (76,597) 451,936 $ 451,936 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD GROWTH HARTFORD GLOBAL LEADERS OPPORTUNITIES HARTFORD MONEY MARKET HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold.................... 17,083 $ 25,478 329 $ 5,419 390,278 $ 390,278 Shares issued on reinvestment of distributions............. 52 437 -- -- 2,405 2,405 Shares redeemed................ (6,221) (8,125) (6) (97) (282,898) (282,898) Shares in 1 for 10 stock split........................ (40,358) -- -- -- -- -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ (29,443) $ 17,790 323 $ 5,322 109,785 $ 109,785 =========== =========== ========== =========== ========== =========== </Table> 9. LINE OF CREDIT: The Hartford Global Leaders HLS Fund and the Hartford Growth Opportunities HLS Fund participate in a $550,000 committed revolving line of credit facility. The facility is to be used for temporary or emergency purpose. The interest rate on borrowings varies depending on the nature of the loan. The facility also requires an eight basis fee to be paid, to State Street Bank, based on the amount of the commitment, which has not been utilized. For the year ended December 31, 2003, the Funds did not have any borrowings under this facility. 10. REVERSE STOCK SPLIT: On November 22, 2002, a reverse stock split was declared for Hartford Global Leaders HLS Fund at a one to ten ratio. 22 - -------------------------------------------------------------------------------- 11. FUND MERGERS: REORGANIZATION OF CERTAIN SERIES OF HARTFORD HLS SERIES FUND II, INC. IN 2003: At a special meeting of shareholders, held on January 15, 2003, shareholders of Hartford Global Equity HLS Fund ("Target Fund") approved a proposed Agreement and Plan of Reorganization between Hartford HLS Series Fund II, Inc. and the Hartford Series Fund, Inc. (the "Plan"). Hartford Global Equity HLS Fund merged into Hartford Global Leaders HLS Fund Under the terms of the Plan, and pursuant to the approval by shareholders of the Target Fund, the assets of the Target Fund were acquired by the corresponding Acquiring Fund on January 24, 2003. The Acquiring Fund acquired the Target Fund's assets in exchange for the Acquiring Fund's shares, which were distributed pro rata by the Target Fund to the holders of its shares on January 24, 2003, in complete liquidation of the Target Fund. The mergers were accomplished by tax free exchanges as detailed below: <Table> <Caption> HARTFORD GLOBAL LEADERS HLS FUND CLASS IA CLASS IB -------------------------------- -------- -------- Net assets of Hartford Global Equity HLS Fund on January 24, 2003...................................................... $ 11,029 $ -- Hartford Global Equity HLS Fund shares exchanged............ 1,498 -- Hartford Global Leaders HLS Fund shares issued.............. 953 -- Net assets of Hartford Global Leaders HLS Fund immediately before the merger......................................... $574,009 $57,372 Net assets of Hartford Global Leaders HLS Fund immediately after the merger.......................................... $585,038 $57,372 </Table> The Hartford Global Equity HLS Fund had the following unrealized appreciation (depreciation), accumulated net realized gains (losses) and capital stock as of January 24, 2003: <Table> <Caption> UNREALIZED ACCUMULATED APPRECIATION NET REALIZED FUND (DEPRECIATION) (LOSSES) CAPITAL STOCK ---- -------------- ------------ ------------- Hartford Global Equity HLS Fund........................... $(1,039) $(37) $14,557 </Table> REORGANIZATION OF CERTAIN SERIES OF HARTFORD HLS SERIES FUND II, INC. IN 2002: At a special meeting of shareholders, held on April 29, 2002, shareholders of Fortis Global Growth Series and Fortis Money Market Series (each a "Fortis Fund") approved a proposed Agreement and Plan of Reorganization between Hartford HLS Series Fund II, Inc. and the Hartford HLS Mutual Funds (the "Plan"). Fortis Global Growth Series merged into Hartford Global Leaders HLS Fund Fortis Money Market Series merged into Hartford Money Market HLS Fund, Inc. Under the terms of the Plan, and pursuant to the approval by shareholders of each Fortis Fund, the assets of each Fortis Fund were acquired by a corresponding series of the Hartford HLS Mutual Funds (the "Hartford Fund") on April 30, 2002. The Hartford Fund acquired the Fortis Fund's assets in exchange for the Hartford Fund's shares, which were distributed pro rata by each Fortis Fund to the holders of its shares on April 30, 2002, in complete liquidation of the Fortis Fund. The mergers were accomplished by tax free exchanges as detailed below: <Table> <Caption> HARTFORD GLOBAL LEADERS HLS FUND CLASS IA CLASS IB -------------------------------- ---------- -------- Net assets of Fortis Global Growth on April 30, 2002........ $ 253,327 $ -- Fortis Global Growth shares exchanged....................... 17,918 -- Hartford Global Leaders shares issued....................... 183,081 -- Net assets of Hartford Global Leaders immediately before the merger.................................................... $ 469,286 $ 52,090 Net assets of Hartford Global Leaders immediately after the merger.................................................... $ 722,613 $ 52,090 </Table> 23 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD MONEY MARKET HLS FUND, INC. CLASS IA CLASS IB ------------------------------------ ---------- -------- Net assets of Fortis Money Market on April 30, 2002......... $ 122,443 $ -- Fortis Money Market shares exchanged........................ 11,346 -- Hartford Money Market shares issued......................... 122,443 -- Net assets of Hartford Money Market immediately before the merger.................................................... $1,794,364 $166,561 Net assets of Hartford Money Market immediately after the merger.................................................... $1,916,807 $166,561 </Table> The Fortis Global Growth Series and Fortis Money Market Series had unrealized appreciation (depreciation), accumulated net realized gains (losses) and capital stock as follows: <Table> <Caption> UNREALIZED ACCUMULATED APPRECIATION NET REALIZED FUND (DEPRECIATION) (LOSSES) CAPITAL STOCK ---- -------------- ------------ ------------- Fortis Global Growth Series............................... $9,623 $(3,966) $247,671 Fortis Money Market Series................................ -- -- 122,443 </Table> 24 (This page intentionally left blank) 25 HARTFORD HLS MUTUAL FUNDS FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- <Table> <Caption> -- SELECTED PER-SHARE DATA(4) -- ------------------------------------------------------------------- NET REALIZED AND NET ASSET NET UNREALIZED TOTAL DIVIDENDS VALUE AT INVESTMENT GAIN FROM FROM NET BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME --------- ---------- ------------ ---------- ---------- HARTFORD GLOBAL LEADERS HLS FUND For the Year Ended December 31, 2003 Class IA....................................... $ 11.50 $ 0.07 $ 4.02 $ 4.09 $(0.06) Class IB....................................... 11.47 0.04 4.00 4.04 (0.04) For the Year Ended December 31, 2002 Class IA....................................... 14.43(5) 0.13(5) (2.95)(5) (2.82)(5) (0.11)(5) Class IB....................................... 14.40(5) 0.12(5) (2.96)(5) (2.84)(5) (0.09)(5) For the Year Ended December 31, 2001 Class IA....................................... 17.59(5) 0.11(5) (3.02)(5) (2.91)(5) (0.08)(5) Class IB....................................... 17.57(5) 0.08(5) (3.02)(5) (2.94)(5) (0.06)(5) For the Year Ended December 31, 2000 Class IA....................................... 19.13(5) 0.08(5) (1.42)(5) (1.34)(5) (0.09)(5) Class IB....................................... 19.12(5) (0.06)(5) (1.30)(5) (1.36)(5) (0.08)(5) For the Year Ended December 31, 1999 Class IA....................................... 12.85(5) 0.03(5) 6.42(5) 6.45(5) (0.03)(5) Class IB....................................... 12.85(5) 0.07(5) 6.34(5) 6.41(5) --(5) HARTFORD GROWTH OPPORTUNITIES HLS FUND For the Year Ended December 31, 2003 Class IA....................................... 16.40 (0.01) 7.18 7.17 -- Class IB....................................... 16.37 (0.01) 7.12 7.11 -- For the Year Ended December 31, 2002 Class IA....................................... 22.66 (0.03) (6.23) (6.26) -- From inception April, 30 2002 through December 31, 2002 Class IB..................................... 21.16 (0.01) (4.78) (4.79) -- For the Year Ended December 31, 2001 Class IA....................................... 40.66 -- (9.21) (9.21) -- For the Year Ended December 31, 2000 Class IA....................................... 45.14 (0.03) 2.99 2.96 -- For the Year Ended December 31, 1999 Class IA....................................... 41.09 (0.05) 17.42 17.37 (0.09) HARTFORD MONEY MARKET HLS FUND For the Year Ended December 31, 2003 Class IA....................................... 1.00 0.01 -- 0.01 (0.01) Class IB....................................... 1.00 -- -- -- -- For the Year Ended December 31, 2002 Class IA....................................... 1.00 0.01 -- 0.01 (0.01) Class IB....................................... 1.00 0.01 -- 0.01 (0.01) For the Year Ended December 31, 2001 Class IA....................................... 1.00 0.04 -- 0.04 (0.04) Class IB....................................... 1.00 0.04 -- 0.04 (0.04) For the Year Ended December 31, 2000 Class IA....................................... 1.00 0.06 -- 0.06 (0.06) Class IB....................................... 1.00 0.06 -- 0.06 (0.06) For the Year Ended December 31, 1999 Class IA....................................... 1.00 0.07 -- 0.07 (0.07) Class IB....................................... 1.00 0.07 -- 0.07 (0.07) <Caption> -- SELECTED PER-SHARE DATA(4) -- ---------------------------------------------- DISTRIBUTIONS DIVIDENDS FROM IN EXCESS OF NET REALIZED DISTRIBUTIONS NET INVESTMENT GAINS ON FROM INCOME INVESTMENTS CAPITAL -------------- ------------- ------------- HARTFORD GLOBAL LEADERS HLS FUND For the Year Ended December 31, 2003 Class IA....................................... $ -- $ -- $ -- Class IB....................................... -- -- -- For the Year Ended December 31, 2002 Class IA....................................... --(5) --(5) --(5) Class IB....................................... --(5) --(5) --(5) For the Year Ended December 31, 2001 Class IA....................................... --(5) (0.17)(5) --(5) Class IB....................................... --(5) (0.17)(5) --(5) For the Year Ended December 31, 2000 Class IA....................................... --(5) (0.11)(5) --(5) Class IB....................................... --(5) (0.11)(5) --(5) For the Year Ended December 31, 1999 Class IA....................................... --(5) (0.14)(5) --(5) Class IB....................................... --(5) (0.14)(5) --(5) HARTFORD GROWTH OPPORTUNITIES HLS FUND For the Year Ended December 31, 2003 Class IA....................................... -- -- -- Class IB....................................... -- -- -- For the Year Ended December 31, 2002 Class IA....................................... -- -- -- From inception April, 30 2002 through December 31, 2002 Class IB..................................... -- -- -- For the Year Ended December 31, 2001 Class IA....................................... -- (8.79) -- For the Year Ended December 31, 2000 Class IA....................................... -- (7.44) -- For the Year Ended December 31, 1999 Class IA....................................... -- (13.23) -- HARTFORD MONEY MARKET HLS FUND For the Year Ended December 31, 2003 Class IA....................................... -- -- -- Class IB....................................... -- -- -- For the Year Ended December 31, 2002 Class IA....................................... -- -- -- Class IB....................................... -- -- -- For the Year Ended December 31, 2001 Class IA....................................... -- -- -- Class IB....................................... -- -- -- For the Year Ended December 31, 2000 Class IA....................................... -- -- -- Class IB....................................... -- -- -- For the Year Ended December 31, 1999 Class IA....................................... -- -- -- Class IB....................................... -- -- -- </Table> - --------------- (1) Annualized. (2) Not annualized. (3) Management fees were waived until assets (excluding assets contributed by companies affiliated with HL Advisers) reached $20 million. The ratio of expenses to average net assets would have been higher if management fees were not waived. The ratio of net investment income to average net assets would have been lower if management fees were not waived. (4) Per shares amounts have been restated to reflect a reverse stock split for Class IB shares effective November 22, 2002. (See Note 11(a)). (5) Information presented relates to a share of capital stock outstanding for the indicated period. (6) Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. (7) Returns include the Fund level expenses, but exclude the insurance charges, if returns had taken into account insurance charges, performance would have been lower. See Notes to Financial Statements. 26 - -------------------------------------------------------------------------------- <Table> <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - ------------------------------------------------------------------------------------------------ RATIO OF NET INCREASE NET ASSETS EXPENSES (DECREASE) IN NET ASSET AT END OF TO AVERAGE TOTAL NET ASSETS VALUE AT TOTAL PERIOD NET ASSETS DISTRIBUTIONS VALUE END OF PERIOD RETURN (7) (000'S OMITTED) AFTER WAIVERS ------------- ------------- ------------- ---------- --------------- ------------- $ (0.06) $ 4.03 $15.53 35.57% $ 728,049 0.80% (0.04) 4.00 15.47 35.24 129,315 1.05 (0.11)(5) (2.93)(5) 11.50(5) (19.51) 544,901 0.81 (0.09)(5) (2.93)(5) 11.47(5) (19.70) 55,421 1.03 (0.25)(5) (3.16)(5) 14.43(5) (16.58) 484,661 0.81 (0.23)(5) (3.17)(5) 14.40(5) (16.73) 49,356 0.99 (0.20)(5) (1.54)(5) 17.59(5) (7.06) 572,517 0.81 (0.19)(5) (1.55)(5) 17.57(5) (7.22) 25,869 0.99 (0.17)(5) 6.28(5) 19.13(5) 50.37 179,675 0.86 (0.14)(5) 6.27(5) 19.12(5) 50.11 69 1.04 -- 7.17 23.57 43.79 696,900 0.64 -- 7.11 23.48 43.43 59,686 0.89 -- (6.26) 16.40 (27.65) 478,045 0.66 -- (4.79) 16.37 (22.65)(2) 5,287 0.84(1) (8.79) (18.00) 22.66 (22.85) 755,068 0.65 (7.44) (4.48) 40.66 3.99 1,063,005 0.64 (13.32) 4.05 45.14 55.17 1,044,728 0.66 (0.01) -- 1.00 0.75 1,609,439 0.49 -- -- 1.00 0.50 240,930 0.74 (0.01) -- 1.00 1.47 2,319,456 0.49 (0.01) -- 1.00 1.24 261,914 0.72 (0.04) -- 1.00 3.87 1,867,520 0.48 (0.04) -- 1.00 3.68 152,129 0.66 (0.06) -- 1.00 6.10 1,242,275 0.48 (0.06) -- 1.00 5.91 36,270 0.66 (0.07) -- 1.00 4.89 1,257,436 0.47 (0.07) -- 1.00 4.71 8,804 0.65 <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - --- --------------------------------------- RATIO OF RATIO OF NET EXPENSES INVESTMENT TO AVERAGE INCOME PORTFOLIO NET ASSETS TO AVERAGE TURNOVER BEFORE WAIVERS NET ASSETS RATE(6) -------------- ---------- --------- 0.80% 0.54% 292% 1.05 0.29 292 0.81 1.06 324 1.06 0.84 324 0.81 0.71 363 1.06 0.53 363 0.81 0.63 367 1.06 0.45 367 0.91 0.54(3) 207 1.16 0.36(3) 207 0.64 (0.05) 145 0.89 (0.30) 145 0.66 (0.16) 189 0.84(1) (0.10)(1) 189 0.65 (0.01) 228 0.64 (0.08) 120 0.66 (0.18) 175 0.49 0.75 -- 0.74 0.50 -- 0.49 1.43 -- 0.74 1.20 -- 0.48 3.58 -- 0.73 3.40 -- 0.48 5.91 -- 0.73 5.73 -- 0.47 4.81 -- 0.72 4.63 -- </Table> 27 REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF HARTFORD HLS SERIES FUND II, INC. AND HARTFORD SERIES FUND, INC. - -------------------------------------------------------------------------------- We have audited the accompanying statements of net assets of the Hartford Growth Opportunities HLS Fund (one of the portfolios comprising Hartford HLS Series Fund II, Inc.) and the Hartford Global Leaders HLS Fund and Hartford Money Market HLS Fund (two of the portfolios comprising Hartford Series Fund, Inc.) (collectively, the "Funds") as of December 31, 2003, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for each of the three years in the period ended December 31, 2001 for the Hartford Series Fund, Inc. were audited by other auditors who have ceased operations and whose report, dated February 6, 2002, expressed an unqualified opinion on those financial highlights. The financial highlights for each of the three years in the period ended December 31, 2001 for the Hartford HLS Series Fund II, Inc. were audited by other auditors whose report, dated February 8, 2002, expressed an unqualified opinion on those financial highlights. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights 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 securities owned as of December 31, 2003 by correspondence with the custodian and brokers, or by other appropriate auditing procedures where replies from brokers were not received. 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 and financial highlights referred to above present fairly, in all material respects, the financial position of the Funds identified above at December 31, 2003, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States. /s/ ERNST & YOUNG LLP Boston, Massachusetts February 6, 2004 28 HARTFORD SERIES FUND, INC. AND HARTFORD HLS SERIES FUND II, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) - -------------------------------------------------------------------------------- The Boards of Directors ("Boards") are responsible for overall management of the Funds. The Boards may exercise all powers of the Funds, except those powers that are conferred solely upon or reserved to the shareholders. The following table provides information about the Funds' directors and officers. The business address for all directors and officers is c/o Hartford HLS Funds, P.O. Box 2999, Hartford, CT 06104-2999, except for Tamara L. Fagely and Robert W. Beltz, Jr., whose business address is 500 Bielenberg Dr., Woodbury, MN 55125. - -------------------------------------------------------------------------------- <Table> <Caption> NON-INTERESTED DIRECTORS - ---------------------------------------------------------------------------------------------------- TERM OF OFFICE* AND LENGTH OF POSITION HELD TIME SERVED: WITH THE -------------- PRINCIPAL OCCUPATION(S) NAME AND AGE COMPANIES SF(1) SF(2) DURING PAST 5 YEARS - ---------------------------------------------------------------------------------------------------- LYNN S. BIRDSONG Director 2003 2003 From 1979 to 2002, Mr. Birdsong was a (age 57) managing director of Zurich Scudder Investments, an investment management firm. In 2003, Mr. Birdsong became an independent director of the Atlantic Whitehall Funds and The Japan Fund; during his employment with Scudder, he was an interested director of The Japan Fund. Since 1981, Mr. Birdsong has been a partner in Birdsong Company, an advertising specialty firm. He is also a Director of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- WINIFRED E. COLEMAN Director 1995(3) 2002 Ms. Coleman has served as President of (age 71) Saint Joseph College since 1991 and President of Cashel House, Ltd. (retail) since 1985. She is also a Director of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- ROBERT M. GAVIN Director 2002 1986 Dr. Gavin is an educational consultant. (age 63) Prior to September 1, 2001, he was President of Cranbrook Education Community; and prior to July 1996, he was President of Macalester College, St. Paul, Minnesota. He is also a Director of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- DUANE E. HILL Director 2001 2002 Mr. Hill is Partner Emeritus and a (age 58) founding partner of TSG Capital Group, a private equity investment firm that serves as sponsor and lead investor in leveraged buyouts of middle market companies. Mr. Hill is also a Partner of TSG Ventures L.P., a private equity investment company that invests primarily in minority-owned small businesses. He is also a Director of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- PHILLIP O. PETERSON Director 2002 2000 Mr. Peterson is a mutual fund industry (age 59) consultant. He was a partner of KPMG LLP until July 1999. In January 2004, Mr. Peterson was appointed independent president of the Strong Mutual Funds. He is also a Director of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- <Caption> NON-INTERESTED DIRECTORS NON-INTERESTED DIRECTORS - ------------------------ ----------------------------------- NUMBER OF PORTFOLIOS IN FUND COMPLEX OTHER OVERSEEN BY DIRECTORSHIPS NAME AND AGE DIRECTOR HELD BY DIRECTOR - ------------------------ ----------------------------------- LYNN S. BIRDSONG 72 N/A (age 57) - ---------------------------------------------------------------------------------------------------- WINIFRED E. COLEMAN 72 N/A (age 71) - ---------------------------------------------------------------------------------------------------- ROBERT M. GAVIN 72 Dr. Gavin is a (age 63) Director of Systems & Computer Technology Corporation. - ---------------------------------------------------------------------------------------------------- DUANE E. HILL 72 N/A (age 58) - ---------------------------------------------------------------------------------------------------- PHILLIP O. PETERSON 72 N/A (age 59) - ---------------------------------------------------------------------------------------------------- </Table> 29 HARTFORD SERIES FUND, INC. AND HARTFORD HLS SERIES FUND II, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> NON-INTERESTED DIRECTORS - ---------------------------------------------------------------------------------------------------- TERM OF OFFICE* AND LENGTH OF POSITION HELD TIME SERVED: WITH THE -------------- PRINCIPAL OCCUPATION(S) NAME AND AGE COMPANIES SF(1) SF(2) DURING PAST 5 YEARS - ---------------------------------------------------------------------------------------------------- MILLARD H. PRYOR, JR. Director 1977(3) 2002 Mr. Pryor has served as Managing Director (age 70) of Pryor & Clark Company (real estate investment), Hartford, Connecticut, since June 1992. He is also a Director of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc., and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- <Caption> INTERESTED DIRECTORS AND OFFICERS - ------------------------------------------------------------- THOMAS M. MARRA(4) Director and 2002 2002 Mr. Marra is President and Chief (age 45) Chairman of Operating Officer of Hartford Life, Inc. the Board He is also a member of the Board of Directors and a member of the Office of the Chairman for The Hartford Financial Services Group, Inc. ("The Hartford"), the parent company of Hartford Life. Mr. Marra was named President of Hartford Life in 2001 and COO in 2000, and served as Director of Hartford Life's Investment Products Division from 1998 to 2000. He was head of the company's Individual Life and Annuities Division from 1994 to 1998 after being promoted to Senior Vice President in 1994 and to Executive Vice President in 1996. Mr. Marra is also a Managing Member and President of Hartford Investment Financial Services, LLC ("HIFSCO") and HL Investment Advisors LLC ("HL Advisors"). He is also a Director and Chairman of the Board of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- LOWNDES A. SMITH(4) Director 1996 2002 Mr. Smith served as Vice Chairman of The (age 64) Hartford from February 1997 to January 2002, as President and Chief Executive Officer of Hartford Life, Inc. from February 1997 to January 2002, and as President and Chief Operating Officer of The Hartford Life Insurance Companies from January 1989 to January 2002. Mr. Smith is also a Director of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- <Caption> MILLARD H. PRYOR, JR. 72 Mr. Pryor is a (age 70) Director of Infodata Systems, Inc. (software company) and CompuDyne Corporation (security products and services) and August Financial Holding Company (advisory services). - ---------------------------------------------------------------------------------------------------- THOMAS M. MARRA(4) 72 Mr. Marra is a (age 45) member of the Board of Directors of The Hartford. - ---------------------------------------------------------------------------------------------------- LOWNDES A. SMITH(4) 72 N/A (age 64) - ---------------------------------------------------------------------------------------------------- </Table> 30 HARTFORD SERIES FUND, INC. AND HARTFORD HLS SERIES FUND II, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> INTERESTED DIRECTORS AND OFFICERS - ---------------------------------------------------------------------------------------------------- TERM OF OFFICE* AND LENGTH OF POSITION HELD TIME SERVED WITH THE -------------- PRINCIPAL OCCUPATION(S) NAME AND AGE COMPANY SF(1) SF2(2) DURING PAST 5 YEARS - ---------------------------------------------------------------------------------------------------- DAVID M. ZNAMIEROWSKI(4) President and 1999 2001 Mr. Znamierowski currently serves as (age 43) Director(5) President of Hartford Investment Management Company ("Hartford Investment"), Senior Vice President for Hartford Life, Inc., and Senior Vice President and Chief Investment Officer for Hartford Life Insurance Company. Mr. Znamierowski is also a Managing Member and Senior Vice President of HIFSCO and HL Advisors. Mr. Znamierowski is Group Senior Vice President and Chief Investment Officer for The Hartford. In addition, he serves as President and Director of The Hartford Mutual Funds, Inc. and as President of The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- ROBERT W. BELTZ, JR. Vice President 2002 1993 Mr. Beltz currently serves as Vice (age 54) President Securities Operations of Hartford Administrative Services Company ("HASCO"). Since December 2001, he has served as Assistant Vice President of Hartford Life Insurance Company. In addition, he is Vice President of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- KEVIN J. CARR Vice President 1996 2001 Mr. Carr has served as The Hartford's (age 49) and Secretary Assistant General Counsel since 1999, Counsel since November 1996 and Associate Counsel since November 1995. Mr. Carr is also Vice President and Assistant Secretary of HL Advisors and HIFSCO and Assistant Secretary of Hartford Investment. He is also Vice President and Secretary of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- WILLIAM H. DAVISON, JR. Vice President 2002 2002 Mr. Davison is a Managing Director and (age 46) Director of the Funds Management Group of Hartford Investment. Mr. Davison is also a Senior Vice President of HIFSCO and HL Advisors. In addition, he serves as Vice President of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- TAMARA L. FAGELY Vice President 2002 1993 Ms. Fagely has been Vice President of (age 45) HASCO since 1998. Prior to 1998, she was Second Vice President of HASCO. Since December 2001, she has served as Assistant Vice President of Hartford Life Insurance Company. In addition, she is Controller of HIFSCO and Vice President, Controller and Treasurer of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- <Caption> INTERESTED DIRECTORS AND INTERESTED DIRECTORS AND OFFICERS - ------------------------ ----------------------------------- NUMBER OF PORTFOLIOS IN FUND COMPLEX OTHER OVERSEEN BY DIRECTORSHIPS NAME AND AGE DIRECTOR HELD BY DIRECTOR - ------------------------ ----------------------------------- DAVID M. ZNAMIEROWSKI(4) 53 N/A (age 43) - ---------------------------------------------------------------------------------------------------- ROBERT W. BELTZ, JR. N/A N/A (age 54) - ---------------------------------------------------------------------------------------------------- KEVIN J. CARR N/A N/A (age 49) - ---------------------------------------------------------------------------------------------------- WILLIAM H. DAVISON, JR. N/A N/A (age 46) - ---------------------------------------------------------------------------------------------------- TAMARA L. FAGELY N/A N/A (age 45) - ---------------------------------------------------------------------------------------------------- </Table> 31 HARTFORD SERIES FUND, INC. AND HARTFORD HLS SERIES FUND II, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> INTERESTED DIRECTORS AND OFFICERS - ---------------------------------------------------------------------------------------------------- TERM OF OFFICE* AND LENGTH OF POSITION HELD TIME SERVED WITH THE -------------- PRINCIPAL OCCUPATION(S) NAME AND AGE COMPANY SF(1) SF2(2) DURING PAST 5 YEARS - ---------------------------------------------------------------------------------------------------- BRUCE FERRIS Vice President 2002 2002 Mr. Ferris serves as Senior Vice (age 48) President and a Director of Sales and Marketing in the Investment Products Division of Hartford Life Insurance Company. He is also a Managing Member of HL Advisors. In addition, Mr. Ferris is Vice President of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- MARY JANE FORTIN Vice President 2003 2003 Ms. Fortin is Senior Vice President and (age 39) Director of Mutual Funds and 529 Programs for Hartford Life. In addition, she is Vice President of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. Previously, Ms. Fortin served as Senior Vice President and Chief Accounting Officer of Hartford Life. She joined Hartford Life in 1997. - ---------------------------------------------------------------------------------------------------- GEORGE R. JAY Vice 1996 2001 Mr. Jay serves as Assistant Vice (age 51) President, President of Hartford Life Insurance Controller and Company's Equity Products Department. He Treasurer is also Controller of HL Advisors and Vice President of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------- STEPHEN T. JOYCE Vice President 2000 2001 Mr. Joyce currently serves as Senior Vice (age 44) President and Director of the Institutional Products Group for Hartford Life Insurance Company. Mr. Joyce is also Senior Vice President HL Advisors and Vice President of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. Previously, he served as Vice President (1997-1999) and Assistant Vice President (1994-1997) of Hartford Life Insurance Company. - ---------------------------------------------------------------------------------------------------- DAVID N. LEVENSON Vice President 2000 2001 Mr. Levenson serves as Senior Vice (age 37) President of Hartford Life Insurance Company's Retail Product Management Group and is responsible for all retail product management and profitability. Mr. Levenson is also a Senior Vice President of HIFSCO. In addition, he serves as Vice President of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. Mr. Levenson joined The Hartford in 1995. - ---------------------------------------------------------------------------------------------------- <Caption> INTERESTED DIRECTORS AND INTERESTED DIRECTORS AND OFFICERS - ------------------------ ----------------------------------- NUMBER OF PORTFOLIOS IN FUND COMPLEX OTHER OVERSEEN BY DIRECTORSHIPS NAME AND AGE DIRECTOR HELD BY DIRECTOR - ------------------------ ----------------------------------- BRUCE FERRIS N/A N/A (age 48) - ---------------------------------------------------------------------------------------------------- MARY JANE FORTIN N/A N/A (age 39) - ---------------------------------------------------------------------------------------------------- GEORGE R. JAY N/A N/A (age 51) - ---------------------------------------------------------------------------------------------------- STEPHEN T. JOYCE N/A N/A (age 44) - ---------------------------------------------------------------------------------------------------- DAVID N. LEVENSON N/A N/A (age 37) - ---------------------------------------------------------------------------------------------------- </Table> 32 HARTFORD SERIES FUND, INC. AND HARTFORD HLS SERIES FUND II, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> INTERESTED DIRECTORS AND OFFICERS - ---------------------------------------------------------------------------------------------------- TERM OF OFFICE* AND LENGTH OF POSITION HELD TIME SERVED WITH THE -------------- PRINCIPAL OCCUPATION(S) NAME AND AGE COMPANY SF(1) SF2(2) DURING PAST 5 YEARS - ---------------------------------------------------------------------------------------------------- JOHN C. WALTERS Vice President 2000 2001 Mr. Walters serves as Executive Vice (age 41) President and Director of the Investment Products Division of Hartford Life Insurance Company. Mr. Walters is also a Managing Member and Executive Vice President of HIFSCO and HL Advisors. In addition, he is Vice President of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. Previously, Mr. Walters was with First Union Securities. - ---------------------------------------------------------------------------------------------------- <Caption> INTERESTED DIRECTORS AND INTERESTED DIRECTORS AND OFFICERS - ------------------------ ----------------------------------- NUMBER OF PORTFOLIOS IN FUND COMPLEX OTHER OVERSEEN BY DIRECTORSHIPS NAME AND AGE DIRECTOR HELD BY DIRECTOR - ------------------------ ----------------------------------- JOHN C. WALTERS N/A N/A (age 41) - ---------------------------------------------------------------------------------------------------- </Table> * Each director and officer may serve until his or her successor is elected and qualifies. (1) Hartford Series Fund, Inc. (2) Hartford HLS Series Fund II, Inc. (3) Ms. Coleman and Mr. Pryor served as directors, beginning in 1995 and 1977, respectively, of certain Maryland corporations (each of which was registered with the SEC as an open-end management investment company) that were reorganized as investment portfolios (series) of Hartford Series Fund, Inc. on August 28, 2002. (4) "Interested person" of each Company as defined in the Investment Company Act of 1940 because of the person's affiliation with or equity ownership of [Hartford Investment Financial Services, LLC] or affiliated companies. (5) President and Director of Hartford Series Fund, Inc.; President but not Director of Hartford HLS Series Fund II, Inc. The Funds' Statements of Additional Information (SAI) include further information about fund directors and are available without charge upon request by calling 1-800-862-6668 or writing: Hartford HLS Funds, c/o Individual Annuity Services, P.O. Box 5085, Hartford, CT 06102-5085. 33 PRIVACY POLICY AND PRACTICES OF THE HARTFORD FINANCIAL SERVICES GROUP, INC. AND ITS AFFILIATES (HEREIN CALLED "WE, OUR, AND US") This Privacy Policy applies to our United States Operations We value your trust. We are committed to the responsible: a) management; b) use; and c) protection; of PERSONAL INFORMATION. This notice describes how we collect, disclose, and protect PERSONAL INFORMATION. We collect PERSONAL INFORMATION to: a) service your TRANSACTIONS with us; and b) support our business functions. We may obtain PERSONAL INFORMATION from: a) YOU; b) your TRANSACTIONS with us; and c) third parties such as a consumer-reporting agency. Based on the type of product or service YOU apply for or get from us, PERSONAL INFORMATION such as: a) your name; b) your address; c) your income; d) your payment; or e) your credit history; may be gathered from sources such as applications, TRANSACTIONS, and consumer reports. To serve YOU and service our business, we may share certain PERSONAL INFORMATION. We will share PERSONAL INFORMATION, only as allowed by law, with affiliates such as: a) our insurance companies; b) our employee agents; c) our brokerage firms; and d) our administrators. As allowed by law, we may share PERSONAL FINANCIAL INFORMATION with our affiliates to: a) market our products; or b) market our services; to YOU without providing YOU with an option to prevent these disclosures. We may also share PERSONAL INFORMATION, only as allowed by law, with unaffiliated third parties including: a) independent agents; b) brokerage firms; c) insurance companies; d) administrators; and e) service providers; who help us serve YOU and service our business. When allowed by law, we may share certain PERSONAL FINANCIAL INFORMATION with other unaffiliated third parties who assist us by performing services or functions such as: a) taking surveys; b) marketing our products or services; or c) offering financial products or services under a joint agreement between us and one or more financial institutions. We will not sell or share your PERSONAL FINANCIAL INFORMATION with anyone for purposes unrelated to our business functions without offering YOU the opportunity to: a) "opt-out;" or b) "opt-in;" as required by law. We only disclose PERSONAL HEALTH INFORMATION with: a) your proper written authorization; or b) as otherwise allowed or required by law. Our employees have access to PERSONAL INFORMATION in the course of doing their jobs, such as: a) underwriting policies; b) paying claims; c) developing new products; or d) advising customers of our products and services. We use manual and electronic security procedures to maintain: a) the confidentiality; and b) the integrity of; PERSONAL INFORMATION that we have. We use these procedures to guard against unauthorized access. 34 Some techniques we use to protect PERSONAL INFORMATION include: a) secured files; b) user authentication; c) encryption; d) firewall technology; and e) the use of detection software. We are responsible for and must: a) identify information to be protected; b) provide an adequate level of protection for that data; c) grant access to protected data only to those people who must use it in the performance of their job-related duties. Employees who violate our Privacy Policy will be subject to discipline, which may include ending their employment with us. At the start of our business relationship, we will give YOU a copy of our current Privacy Policy. We will also give YOU a copy of our current Privacy Policy once a year if YOU maintain a continuing business relationship with us. We will continue to follow our Privacy Policy regarding PERSONAL INFORMATION even when a business relationship no longer exists between us. As used in this Privacy Notice: APPLICATION means your request for our product or service. PERSONAL FINANCIAL INFORMATION means financial information such as: a) credit history; b) income; c) financial benefits; or d) policy or claim information. PERSONAL HEALTH INFORMATION means health information such as: a) your medical records; or b) information about your illness, disability or injury. PERSONAL INFORMATION means information that identifies YOU personally and is not otherwise available to the public. It includes: a) PERSONAL FINANCIAL INFORMATION; and b) PERSONAL HEALTH INFORMATION. TRANSACTION means your business dealings with us, such as: a) your APPLICATION; b) your request for us to pay a claim; and c) your request for us to take an action on your account. YOU means an individual who has given us PERSONAL INFORMATION in conjunction with: a) asking about; b) applying for; or c) obtaining; a financial product or service from us if the product or service is used mainly for personal, family, or household purposes. This Privacy Policy is being provided on behalf of the following affiliates of The Hartford Financial Services Group, Inc.: American Maturity Life Insurance Company; Capstone Risk Management, LLC; First State Insurance Company; Hart Life Insurance Company; Hartford Accident & Indemnity Company; Hartford Administrative Services Company; Hartford Casualty Insurance Company; Hartford Equity Sales Company, Inc.; Hartford Fire Insurance Company; Hartford HLS Series Fund II, Inc.; Hartford Insurance Company of Illinois; Hartford Insurance Company of the Midwest; Hartford Insurance Company of the Southeast; Hartford International Life Reassurance Corporation; Hartford Investment Financial Services, LLC; Hartford Investment Management Company; Hartford Life & Accident Insurance Company; Hartford Life and Annuity Insurance Company; Hartford Life Insurance Company; Hartford Lloyd's Insurance Company; Hartford Securities Distribution Company, Inc.; Hartford Series Fund, Inc.; Hartford Specialty Company; Hartford Underwriters Insurance Company; Hartford-Comprehensive Employee Benefit Service Company; International Corporate Marketing Group, LLC; New England Insurance Company; Nutmeg Insurance Agency, Inc.; Nutmeg Insurance Company; Nutmeg Life Insurance Company; Omni General Agency, Inc.; Omni Indemnity Company; Omni Insurance Company; P2P Link, LLC; Pacific Insurance Company, Limited; Planco Financial Services, Inc.; Property and Casualty Insurance Company of Hartford; Sentinel Insurance Company, Ltd.; Servus Life Insurance Company; Specialty Risk Services, Inc.; The Hartford Income Shares Fund, Inc.; The Hartford Mutual Funds II, Inc.; The Hartford Mutual Funds, Inc.; Trumbull Insurance Company; Trumbull Services, L.L.C.; Twin City Fire Insurance Company; Woodbury Financial Services, Inc. 35 (This page intentionally left blank) 36 WFPASSAR-1-04 Printed in U.S.A. (c) 2004 The Hartford, Hartford, CT 06115 ____________________ PRESORTED The Hartford STANDARD P.O. Box 5085 U.S. POSTAGE Hartford, CT 06102-5085 PAID HUDSON, MA ____________________ PERMIT NO. 6 ANNUAL REPORT [HARTFORD LOGO] HARTFORD LEADERS suite of tax-deferred variable annuities HARTFORD LIFE INSURANCE COMPANY HARTFORD LIFE & ANNUITY INSURANCE COMPANY December 31, 2003 IMPORTANT NOTICE TO CONTRACT OWNERS The Hartford is committed to doing what we can to prevent improper trading activity within our products, and will continue to react to industry "best practices" with respect to this type of activity. We have recently enhanced the language in our variable annuity prospectus surrounding our transfer restrictions by adding the following language to our prospectus: The underlying Funds are available for use with many different variable annuity products, variable life insurance policies, and funding agreements, and they are offered directly to certain qualified retirement plans. Some of these products and plans may have different transfer restrictions or no transfer restrictions at all. In addition, as a result of settlement of litigation against Hartford, we currently do not have the ability to restrict transfers into the Hartford Money Market HLS Fund with respect to certain owners of older Contracts issued by us. The effect on you may include higher transaction costs or lower performance. To obtain a copy of our latest prospectus for or variable annuity or the underlying funds, please log on to www.hartfordinvestor.com or call 800-862-6668. ________________________________________________________________________ ARE NOT INSURED BY FDIC OR ANY FEDERAL GOVERNMENT AGENCY | MAY LOSE VALUE ________________________________________________________________________ ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE ________________________________________________________________________ [NO FDIC LOGO] [NO BANK LOGO] HARTFORD MONEY MARKET HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - --------- ---------- COMMERCIAL PAPER -- 35.0% $@50,000 Bradford & Bingley PLC 1.15% due 01/07/05.............................. $ 50,000 55,000 Cafco 1.08% due 02/18/04.............................. 54,921 36,500 Diageo Capital PLC 0.00% due 03/18/04.............................. 36,411 42,500 du Pont (E.I.) de Nemours & Co. 0.00% due 02/10/04.............................. 42,450 50,000 Household Finance Corp. 1.08% due 01/06/04.............................. 49,993 25,000 Nationwide Building Society 0.00% due 01/07/04.............................. 24,995 45,391 Old Line Funding Corp. 0.00% due 01/23/04.............................. 45,360 55,000 Preferred Receivable Funding 0.00% due 02/04/04.............................. 54,944 55,000 Province of Quebec 1.07% due 01/28/04.............................. 54,956 42,500 Sara Lee 1.15% due 02/06/04.............................. 42,451 55,000 Sheffield Receivable Corp. 0.00% due 01/26/04.............................. 54,958 50,000 Spintab 0.00% due 02/03/04.............................. 49,950 44,507 Svenska Handelsbanken 0.00% due 02/17/04.............................. 44,444 42,500 Toyota Motor Credit Corp. 1.06% due 01/22/04.............................. 42,474 ---------- 648,307 ---------- Total commercial paper............................ $ 648,307 ========== CORPORATE NOTES -- 58.7% $ 40,000 American Express Credit 1.261% due 12/27/04............................. $ 40,065 8,500 American Express Credit 1.274% due 12/16/04............................. 8,513 42,500 American General Finance 1.34% due 08/06/04.............................. 42,554 17,000 Bank One Corp. 1.45% due 02/20/04.............................. 17,007 25,000 Bear Stearns Co., Inc. 1.319% due 02/12/04............................. 25,004 8,500 Bear Stearns Co., Inc. 1.423% due 06/01/04............................. 8,510 8,500 Bear Stearns Co., Inc. 1.56% due 09/21/04.............................. 8,525 @25,000 Cargill, Inc. 1.16% due 01/14/04.............................. 25,000 43,000 Caterpillar, Inc. 1.323% due 08/02/04............................. 43,051 42,000 Citigroup Global 1.29% due 06/17/04.............................. 42,030 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - --------- ---------- $ 13,320 Diageo Capital PLC 6.625% due 06/24/04............................. $ 13,660 50,000 Federal Home Loan Bank 1.50% due 12/24/04.............................. 50,000 30,000 Federal Home Loan Mortgage Association 1.25% due 08/27/04.............................. 30,000 50,000 Federal Home Loan Mortgage Association 1.40% due 11/03/04.............................. 50,000 50,000 Federal National Mortgage Association 1.43% due 11/15/04.............................. 50,000 50,000 Fleet Financial Group 1.41% due 02/19/04.............................. 50,014 22,000 General Electric Capital Corp. 1.141% due 01/28/04............................. 22,001 39,000 General Electric Capital Corp. 6.875% due 09/15/04............................. 40,528 50,000 Goldman Sachs Group LP 1.11% due 10/25/04.............................. 50,000 @37,500 Honda Motor Corp. 1.12% due 10/22/04.............................. 37,500 51,000 IBM Corp. 1.295% due 09/27/04............................. 51,067 48,750 Key Bank N.A. 1.298% due 03/01/04............................. 48,763 34,230 Lehman Brother Holdings, Inc. 6.625% due 04/01/04............................. 34,681 20,000 Merrill Lynch & Co., Inc. 1.37% due 08/09/04.............................. 20,029 17,000 Merrill Lynch & Co., Inc. 1.42% due 06/11/04.............................. 17,023 55,000 Morgan (J.P.) Chase & Co. 1.285% due 02/05/04............................. 55,008 54,000 Morgan Stanley Group 1.33% due 03/19/04.............................. 54,023 @30,000 Nationwide Building Society 1.14% due 07/23/04.............................. 30,000 @50,000 Northern Rock PLC 1.15% due 01/16/04.............................. 50,000 42,000 Washington Mutual Bank 1.159% due 07/29/04............................. 41,997 30,000 Wells Fargo & Co. 1.103% due 01/14/04............................. 30,000 ---------- 1,086,553 ---------- Total corporate notes............................. $1,086,553 ========== SHORT-TERM SECURITIES -- 3.3% REPURCHASE AGREEMENTS -- 3.3% $ 61,338 Joint Repurchase Agreement (See Note 2(c)) 0.84% due 01/02/04.................................... $ 61,338 ---------- Total short-term securities....................... $ 61,338 ========== </Table> The accompanying notes are an integral part of this financial statement. 1 HARTFORD MONEY MARKET HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET VALUE # ---------- DIVERSIFICATION OF NET ASSETS: Total commercial paper (cost $648,307)............ 35.0% $ 648,307 Total corporate notes (cost $1,086,553)........... 58.7 1,086,553 Total repurchase agreements (cost $61,338)........ 3.3 61,338 ----- ---------- Total investment in securities (total cost $1,796,198)..................................... 97.0 1,796,198 Cash, receivables and other assets................ 3.0 55,266 Dividends payable................................. (0.0) (1,005) Other liabilities................................. (0.0) (90) ----- ---------- Net assets........................................ 100.0% $1,850,369 ===== ========== </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 7,000,000 shares authorized; 1,850,369 shares outstanding... $ 1,850 Paid in capital..................................... 1,848,519 ---------- Net assets.......................................... $1,850,369 ========== </Table> <Table> Class IA Net asset value per share ($1,609,439 / 1,609,439 shares outstanding) (6,000,000 shares authorized)... $1.00 ===== Class IB Net asset value per share ($240,930 / 240,930 shares outstanding) (1,000,000 shares authorized).......... $1.00 ===== </Table> <Table> # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. @ Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2003, the market value of these securities amounted to $192,500 or 10.4% of net assets. (See Note 2(h)). </Table> The accompanying notes are an integral part of this financial statement. 2 HARTFORD HLS MUTUAL FUNDS STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD MONEY MARKET HLS FUND ------------ INVESTMENT INCOME: Dividends................................................. $ 64 Interest.................................................. 27,354 ------- Total investment income (loss).......................... 27,418 ------- EXPENSES: Investment advisory fees.................................. 5,527 Administrative services fees.............................. 4,422 Accounting services....................................... 442 Board of Directors fees................................... 28 Custodian fees, gross..................................... 16 Distribution Fees -- Class IB............................. 675 Other expenses............................................ 329 ------- Total expenses (before offsets)......................... 11,439 ------- Expenses paid indirectly (see Note 3(d)).................. 10 Custodian fees offset (see Note 3(d))..................... -- ------- Total expenses net...................................... 11,429 ------- Net investment income (loss).............................. 15,989 ------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized and unrealized gain (loss) on investments.... -- ------- Net increase (decrease) in net assets resulting from operations.............................................. $15,989 ======= </Table> The accompanying notes are an integral part of this financial statement. 3 HARTFORD HLS MUTUAL FUNDS STATEMENTS OF CHANGES IN NET ASSETS (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD MONEY MARKET HLS FUND --------------------------------- FOR THE FOR THE YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, 2003 2002 ------------ ------------ OPERATIONS: Net investment income (loss).............................. $ 15,989 $ 32,127 Net realized gain (loss) on investments................... -- 100 ---------- ---------- Net increase (decrease) in net assets resulting from operations.............................................. 15,989 32,227 ---------- ---------- DISTRIBUTIONS TO SHAREHOLDERS: From net investment income Class IA................................................ (14,648) (29,732) Class IB................................................ (1,341) (2,395) From net realized gain on investments Class IA................................................ -- (93) Class IB................................................ -- (7) ---------- ---------- Total distributions..................................... (15,989) (32,227) ---------- ---------- CAPITAL SHARE TRANSACTIONS: Class IA................................................ (710,017) 451,936 Class IB................................................ (20,984) 109,785 ---------- ---------- Net increase (decrease) from capital share transactions... (731,001) 561,721 ---------- ---------- Net increase (decrease) in net assets..................... (731,001) 561,721 NET ASSETS: Beginning of period....................................... 2,581,370 2,019,649 ---------- ---------- End of period............................................. $1,850,369 $2,581,370 ========== ========== </Table> The accompanying notes are an integral part of these financial statements. 4 (This page intentionally left blank) 5 HARTFORD HLS MUTUAL FUNDS FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- <Table> <Caption> -- SELECTED PER-SHARE DATA(1) -- ------------------------------------------------------------------- NET REALIZED AND NET ASSET NET UNREALIZED TOTAL DIVIDENDS VALUE AT INVESTMENT GAIN FROM FROM NET BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME --------- ---------- ------------ ---------- ---------- HARTFORD MONEY MARKET HLS FUND For the Year Ended December 31, 2003 Class IA................................................. $ 1.00 $ 0.01 $ -- $ 0.01 $(0.01) Class IB................................................. 1.00 -- -- -- -- For the Year Ended December 31, 2002 Class IA................................................. 1.00 0.01 -- 0.01 (0.01) Class IB................................................. 1.00 0.01 -- 0.01 (0.01) For the Year Ended December 31, 2001 Class IA................................................. 1.00 0.04 -- 0.04 (0.04) Class IB................................................. 1.00 0.04 -- 0.04 (0.04) For the Year Ended December 31, 2000 Class IA................................................. 1.00 0.06 -- 0.06 (0.06) Class IB................................................. 1.00 0.06 -- 0.06 (0.06) For the Year Ended December 31, 1999 Class IA................................................. 1.00 0.07 -- 0.07 (0.07) Class IB................................................. 1.00 0.07 -- 0.07 (0.07) </Table> - --------------- (1) Information presented relates to a share of capital stock outstanding for the indicated period. (2) Returns include the Fund level expenses, but exclude the insurance charges, if returns had taken into account insurance charges, performance would have been lower. See Notes to Financial Statements. 6 - -------------------------------------------------------------------------------- <Table> <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - ------------------------------------------------------------------------------------------------------------------------------ RATIO OF RATIO OF RATIO OF NET NET INCREASE NET ASSETS EXPENSES EXPENSES INVESTMENT (DECREASE) IN NET ASSET AT END OF TO AVERAGE TO AVERAGE INCOME TOTAL NET ASSETS VALUE AT TOTAL PERIOD NET ASSETS NET ASSETS TO AVERAGE DISTRIBUTIONS VALUE END OF PERIOD RETURN(2) (000'S OMITTED) AFTER WAIVERS BEFORE WAIVERS NET ASSETS ------------- ------------- ------------- ---------- --------------- ------------- -------------- ---------- $ (0.01) $ -- $ 1.00 0.75% $ 1,609,439 0.49% 0.49% 0.75% -- -- 1.00 0.50 240,930 0.74 0.74 0.50 (0.01) -- 1.00 1.47 2,319,456 0.49 0.49 1.43 (0.01) -- 1.00 1.24 261,914 0.72 0.74 1.20 (0.04) -- 1.00 3.87 1,867,520 0.48 0.48 3.58 (0.04) -- 1.00 3.68 152,129 0.66 0.73 3.40 (0.06) -- 1.00 6.10 1,242,275 0.48 0.48 5.91 (0.06) -- 1.00 5.91 36,270 0.66 0.73 5.73 (0.07) -- 1.00 4.89 1,257,436 0.47 0.47 4.81 (0.07) -- 1.00 4.71 8,804 0.65 0.72 4.63 </Table> 7 HARTFORD MONEY MARKET HLS FUND NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2003 ($000'S OMITTED) - -------------------------------------------------------------------------------- 1. ORGANIZATION: Hartford Money Market HLS Fund (the "Fund") is organized under the laws of the State of Maryland and is registered with the Securities and Exchange Commission (SEC) under the Investment Company Act of 1940, as amended, as a diversified open-end management investment company. The Fund is a component of The Hartford HLS Mutual Funds (the "HLS Funds"). The Fund serves as the underlying investment vehicle for certain variable annuity and variable life insurance separate accounts and group pension contracts of Hartford Life Insurance Company and Hartford Life and Annuity Insurance Company (collectively, The Hartford Life Insurance Companies) as well as certain qualified retirement plans. The Hartford Life Insurance Companies are affiliates of the Fund. The Fund is divided into Class IA and IB shares. Each class is offered at net asset value without a sales charge and is subject to the same expenses except that the Class IB shares are subject to distribution fees charged pursuant to a Rule 12b-1 plan. Distribution and Service Plans have been adopted in accordance with rule 12b-1 of the Investment Company Act of 1940, as amended. Income and expenses, realized and unrealized capital gains and losses are allocated to each class the Fund based on the ratio of prior day's net assets. 2. SIGNIFICANT ACCOUNTING POLICIES: The following is a summary of significant accounting policies of the Fund, which are in accordance with generally accepted accounting principles in the United States: a) Security Transactions -- Security transactions are recorded on the trade date (the day the order to buy or sell is executed). Security gains and losses are determined on the basis of identified cost. b) Security Valuation and Investment Income -- Short-term securities with maturity of 60 days or less when purchased are valued at amortized cost or original cost plus accrued interest receivable, both of which approximate market value. Short-term investments with a maturity of more than 60 days when purchased are valued based on market quotations until the remaining days to maturity become less than 61 days. From such time until maturity, the investments are valued at amortized cost. c) Repurchase Agreements -- A repurchase agreement is an agreement by which the seller of a security agrees to repurchase the security sold at a mutually agreed upon time and price. At the time the Fund enters into a repurchase agreement, the value of the underlying collateral security(ies), including accrued interest, will be equal to or exceed the value of the repurchase agreement. Securities which serve to collateralize the repurchase agreement are held by the Fund's custodian in book entry or physical form in the custodial account of the Fund. Repurchase agreements are valued at cost plus accrued interest receivable. All repurchase agreements are handled through the Fund's custodian, State Street Bank. The Fund, together with other investment management companies having investment advisory agreements with The Hartford Investment Management Company (Hartford Investment Management), a wholly owned subsidiary of The Hartford Financial Services Group, Inc. (The Hartford), have interests in a joint repurchase agreement dated 12/31/04 each maturing 01/02/04 with the following brokers: $180,326 UBS Warburg, 0.84%; and $150,000 RBS Greenwich Capital Markets, 0.84%. These joint repurchase agreements are collateralized by $336,910 U.S. Treasury Bonds 6.250% - 13.250% due 11/15/09 - 05/15/30. The maturity amount for the Hartford Money Market HLS Fund is $61,341. d) Joint Trading Account -- Pursuant to an exemptive order issued by the SEC, the Fund may transfer uninvested cash balances into a joint trading account managed by Hartford Investment Management. These balances may be invested in one or more repurchase agreements and/or short-term money market instruments. As of December 31, 2003, there are no joint trading accounts. e) Federal Income Taxes -- For federal income tax purposes, the Fund intends to continue to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code by distributing substantially all of its taxable net investment income and net realized capital gains to their shareholders or otherwise complying with the 8 - -------------------------------------------------------------------------------- requirements of regulated investment companies. Accordingly, no provision for federal income taxes has been made in the accompanying financial statements. f) Fund Share Valuation and Distributions to Shareholders -- Orders for the Fund's shares are executed in accordance with the investment instructions of the contract holders. Interest income and expenses are accrued on a daily basis. The net asset value of the Fund's shares is determined as of the close of each business day of the New York Stock Exchange (the Exchange). Orders for the purchase of the Fund's shares received prior to the close of the Exchange on any day on which the Fund is open for business are priced at the per-share net asset value determined as of the close of the Exchange. Orders received after the close of the Exchange, or on a day on which the Exchange and/or the Fund is not open for business, are priced at the next determined per-share net asset value. Hartford Money Market HLS Fund seeks to maintain a stable net asset value per share of $1.00 by declaring a daily dividend from net investment income, including net short-term capital gains and losses, and by valuing its investments using the amortized cost method. Dividends are distributed monthly. g) Use of Estimates -- The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of income and expenses during the period. Operating results in the future could vary from the amounts derived from management's estimates. h) Illiquid Securities and Other Investments -- Each HLS Fund is permitted to invest in illiquid securities or other investments. An HLS Fund will not, however, acquire illiquid securities or investments in 15% of its net assets (10% for the Money Market HLS Fund) would consist of such securities or other investments. "Illiquid" securities of investments are those that may not be sold or disposed of in the ordinary course of business within seven days at approximately the same price used to determine a HLS Fund's net asset value. An HLS Fund may not be able to sell illiquid securities or other investments when their sub-advisor considers it desirable to do so or may have to sell such securities or investments at a price that is lower than the price that could be obtained if the securities or investments were more liquid. A sale of illiquid securities or other investments may require more time and may result in higher dealer discounts and other selling expenses than does the sale of those that are illiquid. Illiquid securities and investments also may be more difficult to value do to the unavailability of reliable market quotations for such securities or investments, and investments in them may have an adverse impact on net asset value. Each HLS Fund may purchase certain restricted securities (known as 144A securities) that can be resold to institutions and which may be determined to be liquid pursuant to policies and guidelines of the Board of Directors. Under current interpretations of the SEC staff, the following types of securities are considered illiquid: (1) repurchase agreements maturing in more than seven days; (2) certain restricted securities (securities whose public resale is subject to legal or contractual restrictions); (3) options, with respect to specific securities, not traded on a national securities exchange that are not readily marketable; and (4) any other securities or investments that are not readily marketable. The following represents restricted securities of the Fund as of December 31, 2003: <Table> <Caption> 144A SECURITIES ---------------------------------------------------------------------------------- ACQUISITION MARKET COST VALUE PERCENTAGE PERCENTAGE ACQUISITION ACQUISITION OF FUND'S MARKET OF FUND'S SECURITY DATE(S) COST NET ASSETS VALUE NET ASSETS -------- ----------- ---------------- --------------- ------------ ------------ Nationwide Building Society.................... 7/17/03 $30,000 1.6% $30,000 1.6% Honda Motor Corp. ........... 10/20/03 37,500 2.0 37,500 2.0 Bradford & Bingley PLC....... 12/8/03 50,000 2.7 50,000 2.7 Cargill, Inc. ............... 1/9/03 25,000 1.4 25,000 1.4 Northern Rock PLC............ 1/16/03 50,000 2.7 50,000 2.7 </Table> 9 HARTFORD MONEY MARKET HLS FUND NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- 3. EXPENSES: a) Investment Management and Advisory Agreements -- HL Investment Advisors, LLC (HL Advisors) an indirect wholly-owned subsidiary of The Hartford, serves as investment manager to the Fund pursuant to investment management agreements approved by the Fund's Board of Directors and shareholders. The rate of compensation paid to HL Advisors for services rendered was 0.250% per annum based on the average daily net assets of the Fund. Pursuant to investment services agreements between HL Advisors and Hartford Investment Management, Hartford Investment Management provides the day-to-day investment management services to the Fund. Hartford Investment Management determines the purchase and sale of portfolio securities and places such orders for execution in the name of the Fund. In conjunction with their investment activity, Hartford Investment Management regularly furnishes reports to the Fund's Board of Directors concerning economic forecasts, investment strategy, portfolio activity and performance of the Fund. b) Administrative Services Agreement -- Under the Administrative Services Agreement between Hartford Life Insurance Company (HL) and the Fund, HL provides administrative services to the Fund and receives monthly compensation at the annual rate of 0.20% of each Fund's average daily net assets. The Fund assumes and pays certain other expenses (including, but not limited to, accounting, custody, state taxes and directors' fees). Directors' fees represent remuneration paid or accrued to directors not affiliated with HL or any other related company. Accounting Services Agreement -- Under the Fund Accounting Agreement between HL and the Fund, HL provides accounting services to the Fund and receives monthly compensation at the annual rate of 0.02% of the Fund's average daily net assets. c) Operating Expenses -- Allocable expenses of the Fund are charged to the Fund based on the ratio of the average net assets of the Fund to the combined average net assets of the HLS Funds. Non-allocable expenses are charged to the Fund based on specific identification. d) Expense Offset -- The Fund has asked its investment advisor to direct certain security trades, subject to obtaining the best price and execution, to brokers who have agreed to rebate to the Fund part of the commissions generated. Such rebates are used solely to reduce the Fund's operating expenses. The Fund's custodian bank has also agreed to reduce its fees when the Fund maintains cash on deposit in the non-interest-bearing custody account. For the year ended December 31, 2003, directed brokerage and custodian fee offset arrangements reduced expenses by $10 and $0, respectively. The total expense reduction represented an effective annual rate of 0.00% of the Fund's average net assets. e) Distribution Plan for Class IB shares -- The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the 1940 Act for the Class IB shares. Pursuant to the Distribution Plan, the Fund compensates the Distributor from assets attributable to the Class IB shares for services rendered and expenses borne in connection with activities primarily intended to result in the sale of the Class IB shares. The Distribution Plan provides that the Fund pay annually 0.25% of the average daily net assets of the Fund attributable to its Class IB shares for activities primarily intended to result in the sale of Class IB shares. Under the terms of the Distribution Plan and the principal underwriting agreement, the Fund is authorized to make payments monthly to the Distributor which may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class IB shares for such entities' fees or expenses incurred or paid in that regard. 4. DISTRIBUTION TO SHAREHOLDERS: The tax character of distributions paid during 2003 and 2002 from ordinary income was $15,989 and $32,227, respectively. 10 - -------------------------------------------------------------------------------- 5. CAPITAL SHARE TRANSACTIONS: The following information is for the year ended December 31, 2003: <Table> <Caption> CLASS IA CLASS IB ------------------------- --------------------- SHARES AMOUNT SHARES AMOUNT ---------- ----------- -------- --------- HARTFORD MONEY MARKET HLS Fund Shares sold.......................... 5,510,526 $ 5,510,526 289,678 $ 289,678 Shares issued on reinvestment of distributions............................... 14,649 14,649 1,341 1,341 Shares redeemed............................... (6,235,192) (6,235,192) (312,003) (312,003) ---------- ----------- -------- --------- Net Increase (Decrease)....................... (710,017) $ (710,017) (20,984) $ (20,984) ========== =========== ======== ========= </Table> The following information is for the year ended December 31, 2002: <Table> <Caption> CLASS IA CLASS IB ------------------------- --------------------- SHARES AMOUNT SHARES AMOUNT ---------- ----------- -------- --------- HARTFORD MONEY MARKET HLS FUND Shares sold................................... 7,433,161 $ 7,433,161 390,278 $ 390,278 Shares issued in merger....................... 122,443 122,443 -- -- Shares issued on reinvestment of distributions............................... 29,756 29,756 2,405 2,405 Shares redeemed............................... (7,133,424) (7,133,424) (282,898) (282,898) ---------- ----------- -------- --------- Net Increase (Decrease)....................... 451,936 $ 451,936 109,785 $ 109,785 ========== =========== ======== ========= </Table> 6. FUND MERGERS: Reorganization of certain series of Hartford HLS Series Fund II, Inc. in 2002: At a special meeting of shareholders, held on April 29, 2002, shareholders of Fortis Money Market Series ("Fortis Fund") approved a proposed Agreement and Plan of Reorganization between Hartford HLS Series Fund II, Inc. and the Hartford HLS Mutual Funds (the "Plan"). Fortis Money Market Series merged into Hartford Money Market HLS Fund, Inc. Under the terms of the Plan, and pursuant to the approval by shareholders of the Fortis Fund, the assets of the Fortis Fund were acquired by a corresponding series of the Hartford HLS Mutual Fund (the "Hartford Fund") on April 30, 2002. The Hartford Fund acquired the Fortis Fund's assets in exchange for the Hartford Fund's shares, which were distributed pro rata by each Fortis Fund to the holders of its shares on April 30, 2002, in complete liquidation of the Fortis Fund. The mergers were accomplished by tax free exchanges as detailed below: <Table> <Caption> CLASS IA CLASS IB ---------- -------- HARTFORD MONEY MARKET HLS FUND Net assets of Fortis Money Market on April 30, 2002......... $ 122,443 $ -- Fortis Money Market shares exchanged........................ 11,346 -- Hartford Money Market shares issued......................... 122,443 -- Net assets of Hartford Money Market immediately before the merger.................................................... $1,794,364 $166,561 Net assets of Hartford Money Market immediately after the merger.................................................... $1,916,807 $166,561 </Table> 11 HARTFORD MONEY MARKET HLS FUND NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- The Fortis Money Market Series had unrealized appreciation (depreciation), accumulated net realized gains (losses) and capital stock as follows: <Table> <Caption> ACCUMULATED UNREALIZED NET APPRECIATION REALIZED CAPITAL FUND (DEPRECIATION) (LOSSES) STOCK ---- -------------- ----------- ------------- Fortis Money Market Series................................ $ -- $ -- $122,443 </Table> 12 REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS TO THE SHAREHOLDERS OF THE HARTFORD MONEY MARKET HLS FUND AND BOARD OF DIRECTORS OF HARTFORD SERIES FUND, INC. - -------------------------------------------------------------------------------- We have audited the accompanying statement of net assets of the Hartford Money Market HLS Fund (one of the portfolios comprising Hartford Series Fund, Inc.) (the "Fund") as of December 31, 2003, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for each of the three years in the period ended December 31, 2001 were audited by other auditors who have ceased operations and whose report, dated February 6, 2002, expressed an unqualified opinion on those financial highlights. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights 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 securities owned as of December 31, 2003 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 and financial highlights referred to above present fairly, in all material respects, the financial position of the Hartford Money Market HLS Fund at December 31, 2003, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States. /s/ ERNST & YOUNG LLP Boston, Massachusetts February 6, 2004 13 HARTFORD SERIES FUND, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) - -------------------------------------------------------------------------------- The Board of Directors ("Board") is responsible for overall management of the Fund. The Board may exercise all powers of the Fund, except those powers that are conferred solely upon or reserved to the shareholders. The following table provides information about the Fund's directors and officers. The business address for all directors and officers is c/o Hartford Series Fund, Inc., P.O. Box 2999, Hartford, CT 06104-2999, except for Tamara L. Fagely and Robert W. Beltz, Jr., whose business address is 500 Bielenberg Dr., Woodbury, MN 55125. <Table> <Caption> NON-INTERESTED DIRECTORS - ------------------------------------------------------------------------------------------------------------------------------- NUMBER OF TERM OF PORTFOLIOS IN POSITION HELD OFFICE* AND FUND COMPLEX OTHER WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTORSHIPS NAME AND AGE COMPANY TIME SERVED: DURING PAST 5 YEARS DIRECTOR HELD BY DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------- LYNN S. BIRDSONG Director 2003 From 1979 to 2002, Mr. Birdsong was 72 N/A (age 57) a managing director of Zurich Scudder Investments, an investment management firm. In 2003, Mr. Birdsong became an independent director of the Atlantic Whitehall Funds and The Japan Fund; during his employment with Scudder, he was an interested director of The Japan Fund. Since 1981, Mr. Birdsong has been a partner in Birdsong Company, an advertising specialty firm. He is also a Director of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ------------------------------------------------------------------------------------------------------------------------------- WINIFRED E. COLEMAN Director 1995 (1) Ms. Coleman has served as President 72 N/A (age 71) of Saint Joseph College since 1991 and President of Cashel House, Ltd. (retail) since 1985. She is also a Director of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ------------------------------------------------------------------------------------------------------------------------------- ROBERT M. GAVIN Director 2002 Dr. Gavin is an educational 72 Dr. Gavin is a (age 63) consultant. Prior to September 1, Director of Systems 2001, he was President of Cranbrook & Computer education Community; and prior to Technology July 1996, he was President of Corporation. Macalester College, St. Paul, Minnesota. He is also a Director of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ------------------------------------------------------------------------------------------------------------------------------- * Each director and officer may serve until his or her successor is elected and qualifies. </Table> 14 HARTFORD SERIES FUND, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> NON-INTERESTED DIRECTORS - ------------------------------------------------------------------------------------------------------------------------------- NUMBER OF TERM OF PORTFOLIOS IN POSITION HELD OFFICE* AND FUND COMPLEX OTHER WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTORSHIPS NAME AND AGE COMPANY TIME SERVED: DURING PAST 5 YEARS DIRECTOR HELD BY DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------- DUANE E. HILL Director 2001 Mr. Hill is Partner Emeritus and a 72 N/A (age 58) founding partner of TSG Capital Group, a private equity investment firm that serves as sponsor and lead investor in leveraged buyouts of middle market companies. Mr. Hill is also a Partner of TSG Ventures L.P., a private equity investment company that invests primarily in minority-owned small businesses. He is also a Director of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ------------------------------------------------------------------------------------------------------------------------------- PHILLIP O. PETERSON Director 2002 Mr. Peterson is a mutual fund 72 N/A (age 59) industry consultant. He was a partner of KPMG LLP until July 1999. In January 2004, Mr. Peterson was appointed independent president of the Strong Mutual Funds. He is also a Director of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ------------------------------------------------------------------------------------------------------------------------------- MILLARD H. PRYOR, JR. Director 1977 (1) Mr. Pryor has served as Managing 72 Mr. Pryor is a (age 70) Director of Pryor & Clark Company Director of Infodata (real estate investment), Hartford, Systems, Inc. Connecticut, since June 1992. He is (software company) also a Director of Hartford HLS and CompuDyne Series Fund II, Inc., The Hartford Corporation Mutual Funds, Inc., The Hartford (security products Mutual Funds II, Inc., and The and services) and Hartford Income Shares Fund, Inc. August Financial Holding Company (advisory services). - ------------------------------------------------------------------------------------------------------------------------------- </Table> 15 HARTFORD SERIES FUND, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> INTERESTED DIRECTORS AND OFFICERS - ------------------------------------------------------------------------------------------------------------------------------------ NUMBER OF TERM OF PORTFOLIOS IN POSITION HELD OFFICE* AND FUND COMPLEX OTHER WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTORSHIPS NAME AND AGE COMPANY TIME SERVED: DURING PAST 5 YEARS DIRECTOR HELD BY DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------------ THOMAS M. MARRA(2) Director and 2002 Mr. Marra is President and Chief 72 Mr. Marra is a (age 45) Chairman of Operating Officer of Hartford Life, member of the Board the Board Inc. He is also a member of the of Directors of The Board of Directors and a member of Hartford. the Office of the Chairman for The Hartford Financial Services Group, Inc. ("The Hartford"), the parent company of Hartford Life. Mr. Marra was named President of Hartford Life in 2001 and COO in 2000, and served as Director of Hartford Life's Investment Products Division from 1998 to 2000. He was head of the company's Individual Life and Annuities Division from 1994 to 1998 after being promoted to Senior Vice President in 1994 and to Executive Vice President in 1996. Mr. Marra is also a Managing Member and President of Hartford Investment Financial Services, LLC ("HIFSCO") and HL Investment Advisors LLC ("HL Advisors"). He is also a Director and Chairman of the Board of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ LOWNDES A. SMITH(2) Director 1996 Mr. Smith served as Vice Chairman of 72 N/A (age 64) The Hartford from February 1997 to January 2002, as President and Chief Executive Officer of Hartford Life, Inc. from February 1997 to January 2002, and as President and Chief Operating Officer of The Hartford Life Insurance Companies from January 1989 to January 2002. Mr. Smith is also a Director of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ </Table> 16 HARTFORD SERIES FUND, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> INTERESTED DIRECTORS AND OFFICERS - ------------------------------------------------------------------------------------------------------------------------------------ NUMBER OF TERM OF PORTFOLIOS IN POSITION HELD OFFICE* AND FUND COMPLEX OTHER WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTORSHIPS NAME AND AGE COMPANY TIME SERVED: DURING PAST 5 YEARS DIRECTOR HELD BY DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------------ DAVID M. ZNAMIEROWSKI(2) President and 1999 Mr. Znamierowski currently serves as 53 N/A (age 43) Director President of Hartford Investment Management Company ("Hartford Investment"), Senior Vice President for Hartford Life, Inc., and Senior Vice President and Chief Investment Officer for Hartford Life Insurance Company. Mr. Znamierowski is also a Managing Member and Senior Vice President of HIFSCO and HL Advisors. Mr. Znamierowski is Group Senior Vice President and Chief Investment Officer for The Hartford. In addition, he serves as President and Director of The Hartford Mutual Funds, Inc. and as President of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ ROBERT W. BELTZ, JR. Vice President 2002 Mr. Beltz currently serves as Vice N/A N/A (age 54) President Securities Operations of Hartford Administrative Services Company ("HASCO"). Since December 2001, he has served as Assistant Vice President of Hartford Life Insurance Company. In addition, he is Vice President of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ KEVIN J. CARR Vice President 1996 Mr. Carr has served as The N/A N/A (age 49) and Secretary Hartford's Assistant General Counsel since 1999, Counsel since November 1996 and Associate Counsel since November 1995. Mr. Carr is also Vice President and Assistant Secretary of HL Advisors and HIFSCO and Assistant Secretary of Hartford Investment. He is also Vice President and Secretary of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ WILLIAM H. DAVISON, JR. Vice President 2002 Mr. Davison is a Managing Director N/A N/A (age 46) and Director of the Funds Management Group of Hartford Investment. Mr. Davison is also a Senior Vice President of HIFSCO and HL Advisors. In addition, he serves as Vice President of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ </Table> 17 HARTFORD SERIES FUND, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> INTERESTED DIRECTORS AND OFFICERS - ------------------------------------------------------------------------------------------------------------------------------------ NUMBER OF TERM OF PORTFOLIOS IN POSITION HELD OFFICE* AND FUND COMPLEX OTHER WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTORSHIPS NAME AND AGE COMPANY TIME SERVED: DURING PAST 5 YEARS DIRECTOR HELD BY DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------------ TAMARA L. FAGELY Vice President 2002 Ms. Fagely has been Vice President N/A N/A (age 45) of HASCO since 1998. Prior to 1998, she was Second Vice President of HASCO. Since December 2001, she has served as Assistant Vice President of Hartford Life Insurance Company. In addition, she is Controller of HIFSCO, Vice President of Hartford HLS Series Fund II, Inc. and Vice President, Controller and Treasurer of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ BRUCE FERRIS Vice President 2002 Mr. Ferris serves as Senior Vice N/A N/A (age 48) President and a Director of Sales and Marketing in the Investment Products Division of Hartford Life Insurance Company. He is also a Managing Member of HL Advisors. In addition, Mr. Ferris is Vice President of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ MARY JANE FORTIN Vice President 2003 Ms. Fortin is Senior Vice President N/A N/A (age 39) and Director of Mutual Funds and 529 Programs for Hartford Life. In addition, she is Vice President of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. Previously, Ms. Fortin served as Senior Vice President and Chief Accounting Officer of Hartford Life. She joined Hartford Life in 1997. - ------------------------------------------------------------------------------------------------------------------------------------ GEORGE R. JAY Vice 1996 Mr. Jay serves as Assistant Vice N/A N/A (age 51) President, President of Hartford Life Insurance Controller and Company's Equity Products Treasurer Department. He is also Controller of HL Advisors, Vice President, Controller and Treasurer of Hartford HLS Series Fund II, Inc. and Vice President of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ </Table> 18 HARTFORD SERIES FUND, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> INTERESTED DIRECTORS AND OFFICERS - ------------------------------------------------------------------------------------------------------------------------------------ NUMBER OF TERM OF PORTFOLIOS IN POSITION HELD OFFICE* AND FUND COMPLEX OTHER WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTORSHIPS NAME AND AGE COMPANY TIME SERVED: DURING PAST 5 YEARS DIRECTOR HELD BY DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------------ STEPHEN T. JOYCE Vice President 2000 Mr. Joyce currently serves as Senior N/A N/A (age 44) Vice President and Director of the Institutional Products Group for Hartford Life Insurance Company. Mr. Joyce is also Senior Vice President HL Advisors and Vice President of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. Previously, he served as Vice President (1997-1999) and Assistant Vice President (1994-1997) of Hartford Life Insurance Company. - ------------------------------------------------------------------------------------------------------------------------------------ DAVID N. LEVENSON Vice President 2000 Mr. Levenson serves as Senior Vice N/A N/A (age 37) President of Hartford Life Insurance Company's Retail Product Management Group and is responsible for all retail product management and profitability. Mr. Levenson is also a Senior Vice President of HIFSCO. In addition, he serves as Vice President of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. Mr. Levenson joined The Hartford in 1995. - ------------------------------------------------------------------------------------------------------------------------------------ JOHN C. WALTERS Vice President 2000 Mr. Walters serves as Executive Vice N/A N/A (age 41) President and Director of the Investment Products Division of Hartford Life Insurance Company. Mr. Walters is also a Managing Member and Executive Vice President of HIFSCO and HL Advisors. In addition, he is Vice President of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. Previously, Mr. Walters was with First Union Securities. - ------------------------------------------------------------------------------------------------------------------------------------ </Table> * Each director and officer may serve until his or her successor is elected and qualifies. (1) Ms. Coleman and Mr. Pryor served as directors, beginning in 1995 and 1977, respectively, of certain Maryland corporations (each of which was registered with the SEC as an open-end management investment company) that were reorganized as investment portfolios (series) of Hartford Series Fund, Inc. on August 28, 2002. (2) "Interested person" of the Company as defined in the Investment Company Act of 1940 because of the person's affiliation with or equity ownership of [HARTFORD INVESTMENT FINANCIAL SERVICES, LLC] or affiliated companies. The Fund's Statement of Additional Information includes further information about fund directors and is available without charge upon request by calling 1-800-862-6668 or writing: Hartford HLS Funds, c/o Individual Annuity Services, P.O. Box 5085, Hartford, CT 06102-5085. 19 PRIVACY POLICY AND PRACTICES OF THE HARTFORD FINANCIAL SERVICES GROUP, INC. AND ITS AFFILIATES (HEREIN CALLED "WE, OUR, AND US") This Privacy Policy applies to our United States Operations We value your trust. We are committed to the responsible: a) management; b) use; and c) protection; of PERSONAL INFORMATION. This notice describes how we collect, disclose, and protect PERSONAL INFORMATION. We collect PERSONAL INFORMATION to: a) service your TRANSACTIONS with us; and b) support our business functions. We may obtain PERSONAL INFORMATION from: a) YOU; b) your TRANSACTIONS with us; and c) third parties such as a consumer-reporting agency. Based on the type of product or service YOU apply for or get from us, PERSONAL INFORMATION such as: a) your name; b) your address; c) your income; d) your payment; or e) your credit history; may be gathered from sources such as applications, TRANSACTIONS, and consumer reports. To serve YOU and service our business, we may share certain PERSONAL INFORMATION. We will share PERSONAL INFORMATION, only as allowed by law, with affiliates such as: a) our insurance companies; b) our employee agents; c) our brokerage firms; and d) our administrators. As allowed by law, we may share PERSONAL FINANCIAL INFORMATION with our affiliates to: a) market our products; or b) market our services; to YOU without providing YOU with an option to prevent these disclosures. We may also share PERSONAL INFORMATION, only as allowed by law, with unaffiliated third parties including: a) independent agents; b) brokerage firms; c) insurance companies; d) administrators; and e) service providers; who help us serve YOU and service our business. When allowed by law, we may share certain PERSONAL FINANCIAL INFORMATION with other unaffiliated third parties who assist us by performing services or functions such as: a) taking surveys; b) marketing our products or services; or c) offering financial products or services under a joint agreement between us and one or more financial institutions. We will not sell or share your PERSONAL FINANCIAL INFORMATION with anyone for purposes unrelated to our business functions without offering YOU the opportunity to: a) "opt-out;" or b) "opt-in;" as required by law. We only disclose PERSONAL HEALTH INFORMATION with: a) your proper written authorization; or b) as otherwise allowed or required by law. Our employees have access to PERSONAL INFORMATION in the course of doing their jobs, such as: a) underwriting policies; b) paying claims; c) developing new products; or d) advising customers of our products and services. We use manual and electronic security procedures to maintain: a) the confidentiality; and b) the integrity of; PERSONAL INFORMATION that we have. We use these procedures to guard against unauthorized access. 20 Some techniques we use to protect PERSONAL INFORMATION include: a) secured files; b) user authentication; c) encryption; d) firewall technology; and e) the use of detection software. We are responsible for and must: a) identify information to be protected; b) provide an adequate level of protection for that data; c) grant access to protected data only to those people who must use it in the performance of their job-related duties. Employees who violate our Privacy Policy will be subject to discipline, which may include ending their employment with us. At the start of our business relationship, we will give YOU a copy of our current Privacy Policy. We will also give YOU a copy of our current Privacy Policy once a year if YOU maintain a continuing business relationship with us. We will continue to follow our Privacy Policy regarding PERSONAL INFORMATION even when a business relationship no longer exists between us. As used in this Privacy Notice: APPLICATION means your request for our product or service. PERSONAL FINANCIAL INFORMATION means financial information such as: a) credit history; b) income; c) financial benefits; or d) policy or claim information. PERSONAL HEALTH INFORMATION means health information such as: a) your medical records; or b) information about your illness, disability or injury. PERSONAL INFORMATION means information that identifies YOU personally and is not otherwise available to the public. It includes: a) PERSONAL FINANCIAL INFORMATION; and b) PERSONAL HEALTH INFORMATION. TRANSACTION means your business dealings with us, such as: a) your APPLICATION; b) your request for us to pay a claim; and c) your request for us to take an action on your account. YOU means an individual who has given us PERSONAL INFORMATION in conjunction with: a) asking about; b) applying for; or c) obtaining; a financial product or service from us if the product or service is used mainly for personal, family, or household purposes. This Privacy Policy is being provided on behalf of the following affiliates of The Hartford Financial Services Group, Inc.: American Maturity Life Insurance Company; Capstone Risk Management, LLC; First State Insurance Company; Hart Life Insurance Company; Hartford Accident & Indemnity Company; Hartford Administrative Services Company; Hartford Casualty Insurance Company; Hartford Equity Sales Company, Inc.; Hartford Fire Insurance Company; Hartford HLS Series Fund II, Inc.; Hartford Insurance Company of Illinois; Hartford Insurance Company of the Midwest; Hartford Insurance Company of the Southeast; Hartford International Life Reassurance Corporation; Hartford Investment Financial Services, LLC; Hartford Investment Management Company; Hartford Life & Accident Insurance Company; Hartford Life and Annuity Insurance Company; Hartford Life Insurance Company; Hartford Lloyd's Insurance Company; Hartford Securities Distribution Company, Inc.; Hartford Series Fund, Inc.; Hartford Specialty Company; Hartford Underwriters Insurance Company; Hartford-Comprehensive Employee Benefit Service Company; International Corporate Marketing Group, LLC; New England Insurance Company; Nutmeg Insurance Agency, Inc.; Nutmeg Insurance Company; Nutmeg Life Insurance Company; Omni General Agency, Inc.; Omni Indemnity Company; Omni Insurance Company; P2P Link, LLC; Pacific Insurance Company, Limited; Planco Financial Services, Inc.; Property and Casualty Insurance Company of Hartford; Sentinel Insurance Company, Ltd.; Servus Life Insurance Company; Specialty Risk Services, Inc.; The Hartford Income Shares Fund, Inc.; The Hartford Mutual Funds II, Inc.; The Hartford Mutual Funds, Inc.; Trumbull Insurance Company; Trumbull Services, L.L.C.; Twin City Fire Insurance Company; Woodbury Financial Services, Inc. 21 (This page intentionally left blank) 22 (This page intentionally left blank) 23 (This page intentionally left blank) 24 [THE HARTFORD LOGO] HLMMAR-1-04 Printed in USA (C) 2004 The Hartford, Hartford, CT 06155 "The Hartford" is The Hartford Financial Services Group, Inc. and its subsidiaries, including the issuing companies of Hartford Life Insurance Company and Hartford Life and Annuity Insurance Company. ____________________ PRESORTED The Hartford STANDARD P.O. Box 5085 U.S. POSTAGE Hartford, CT 06102-5085 PAID HUDSON, MA ____________________ PERMIT NO. 6 SOLD THROUGH: BANC OF AMERICA INVESTMENT SERVICES, INC.(TM) AND ITS SUBSIDIARIES AND AGENCIES [PEOPLE PHOTO] NATIONS VARIABLE ANNUITY NATIONS OUTLOOK VARIABLE ANNUITY Tax-Deferred Variable Annuities ANNUAL REPORT December 31, 2003 [THE HARTFORD LOGO] Issued by: Hartford Life Insurance Company THE ANNUITY PRODUCT INTRODUCED TO YOU: - -- IS NOT INSURED BY THE FDIC OR ANY OTHER FEDERAL GOVERNMENT AGENCY. [NO FDIC GRAPHIC] - -- IS NOT A DEPOSIT OR OTHER OBLIGATION OF, AND IS NOT ISSUED, UNDERWRITTEN OR GUARANTEED BY THE BANK OR ANY OF ITS AFFILIATES. [NO BANK GRAPHIC] - -- MAY INVOLVE INVESTMENT RISK, INCLUDING INTEREST RATE RISK. THE MARKET VALUE OF THE INVESTMENT MAY FLUCTUATE, CAUSING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED. - -- IS NOT A CONTRACT THAT THE BANK OR ITS AFFILIATES ARE OBLIGATED TO PROVIDE BENEFITS UNDER OR GUARANTEE PERFORMANCE BY THE INSURER ISSUING THE ANNUITY. - -- IS AVAILABLE THROUGH OTHER LICENSED BROKERS OR AGENTS. YOU NEED NOT PURCHASE ANNUITIES FROM THE BANK, ANY OF ITS AFFILIATES, OR ANY PARTICULAR FINANCIAL INSTITUTION, AGENT, SOLICITOR OR BROKER. YOU NEED NOT AGREE TO REFRAIN FROM PURCHASING ANNUITIES FROM, NOR ARE YOU PROHIBITED FROM OBTAINING ANNUITIES FROM, AN UNAFFILIATED ENTITY. ================================================================================ Neither Hartford Life Insurance Company, Banc of America Investment Services, Inc., nor their agents or affiliates provide financial, tax, legal or accounting advice. Purchase of a variable annuity through a tax-advantaged retirement plan, such as an IRA, results in no additional tax advantage from the variable annuity. Under these circumstances, purchase of a variable annuity should be considered only if it makes sense because of the annuity's other features such as lifetime income payments and death benefit protection. We recommend that you consult with your professional advisers in these areas before taking action. Annuity products are offered through: Banc of America Investment Services, Inc. in AZ, AR, CA, FL, GA, ID, IL, IA, KS, MO, NC, OR, SC, TN, VA, and WA; Banc of America Agency, LLC in DC and MD; Banc of America Agency of Nevada, Inc. in NV; BA Agency, Inc. in NM; Banc of America Agency of Texas, Inc. in TX; and IFMG of Oklahoma, Inc. in OK. IMPORTANT NOTICE TO CONTRACT OWNERS The Hartford is committed to doing what we can to prevent improper trading activity within our products, and will continue to react to industry "best practices" with respect to this type of activity. We have recently enhanced the language in our variable annuity prospectus surrounding our transfer restrictions by adding the following language to your prospectus: The underlying Funds are available for use with many different variable annuity products, variable life insurance policies, and funding agreements, and they are offered directly to certain qualified retirement plans. Some of these products and plans may have different transfer restrictions or no transfer restrictions at all. In addition, as a result of settlement of litigation against Hartford, we currently do not have the ability to restrict transfers into the Hartford Money Market HLS Fund with respect to certain owners of older Contracts issued by us. The effect on you may include higher transaction costs or lower performance. To obtain a copy of our latest prospectus for your variable annuity or the underlying funds, please log on to www.hartfordinvestor.com or call 800-862-6668. <Table> Annual Report December 31, 2003 PHOTO OF STAG </Table> - Manager Discussions - Financials (THE HARTFORD LOGO) IMPORTANT INFORMATION The following disclosure applies to all Hartford HLS Mutual Funds: The charts on the following pages represent hypothetical investments in the Hartford HLS Mutual Funds. (Returns include the Fund level expenses, but exclude the insurance charges, if returns had taken into account insurance charges, performance would have been lower). Past performance does not guarantee future results. The value of the contract will fluctuate so that when redeemed, it may be worth more or less than the original investment. Total Returns do not reflect the deduction of taxes that a shareholder would pay on portfolio distributions or the redemption of portfolio shares. <Table> Hartford Advisers HLS Fund(1,2) Hartford International Opportunities HLS Hartford Bond HLS Fund(1,2) Fund(1,2) Hartford Capital Appreciation HLS Fund(1,2) Hartford Small Company HLS Fund(1,2) Hartford Dividend and Growth HLS Fund(1,2) Hartford Stock HLS Fund(1,2) </Table> (1) Performance for periods when fee waivers were in place would have been lower in the absence of the waivers. (2) Class IB shares commenced on April 1, 1998. Class IB share performance prior to that date reflects Class IA share performance adjusted to reflect the 12b-1 fee of 0.25% applicable to Class IB shares. The performance after such date reflects actual Class IB share performance. COMPARATIVE BENCHMARKS appear throughout the fund commentary as a measure of fund performance. You cannot invest directly in any of these indices. 90 DAY TREASURY BILLS is an unmanaged index of short-term treasury bills. LEHMAN BROTHERS GOVERNMENT / CREDIT BOND INDEX is an unmanaged, market-value-weighted index of all debt obligations of the U.S. Treasury and U.S. Government agencies (excluding mortgage-backed securities) and of all publicly issued fixed-rate, nonconvertible, investment grade domestic corporate debt. LEHMAN BROTHERS U.S. AGGREGATE BOND INDEX is an unmanaged index and is composed of securities from the Lehman Brothers Government / Credit Bond Index, Mortgage-Backed Securities Index, Asset-Backed Securities Index and Commercial Mortgage-Backed Securities Index. MSCI AC WORLD FREE EX U.S. INDEX is a broad based, unmanaged, market capitalization weighted, total return index that measures the performance of both developed and emerging stock markets, excluding the U.S. RUSSELL 2000 GROWTH INDEX is an unmanaged index of those Russell 2000 Index growth companies with higher price-to-book ratios and higher forecasted growth values. (The Russell 2000 Index is a broad-based unmanaged index comprised of 2,000 of the smallest U.S. domiciled company common stocks (on the basis of capitalization) that are traded in the United States on the New York Stock Exchange, American Stock Exchange and Nasdaq.) S&P 500 INDEX is a market capitalization weighted price index composed of 500 widely held common stocks. The opinions about future economic and market developments expressed in this report are those of the portfolio manager(s) and are current only through the end of the period of the report as stated on the cover. These views are subject to change at any time based on market and other conditions, and no forecasts can be guaranteed. 1 Hartford Advisers HLS Fund inception 3/31/1983 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 12/31/93 - 12/31/03 Growth of a $10,000 investment (PERFORMANCE LINE GRAPH) <Table> <Caption> LEHMAN GOVERNMENT/CREDIT ADVISERS IB S&P 500 INDEX BOND INDEX ----------- ------------- ------------------------ 12/31/93 10000 10000 10000 10207 10340 10150 10054 10059 9930 9661 9621 9687 9658 9745 9607 9734 9904 9589 9544 9662 9566 9800 9979 9758 10023 10387 9762 9782 10133 9614 9804 10361 9603 9582 9984 9586 12/94 9702 10131 9649 9878 10394 9834 10237 10799 10062 10451 11117 10130 10624 11444 10271 11005 11901 10702 11206 12177 10787 11415 12580 10746 11492 12610 10883 11871 13142 10994 11789 13094 11155 12261 13670 11339 12/95 12420 13933 11506 12690 14407 11577 12726 14541 11332 12788 14681 11237 12889 14897 11160 13117 15279 11141 13233 15337 11290 12928 14660 11316 13044 14969 11288 13609 15810 11489 13903 16246 11757 14739 17473 11973 12/96 14445 17127 11840 15072 18196 11854 15129 18340 11879 14699 17588 11738 15359 18636 11909 16043 19769 12021 16735 20655 12165 17771 22297 12537 16889 21048 12396 17601 22199 12591 17278 21458 12793 17790 22451 12860 12/97 17939 22838 12995 18196 23089 13178 19086 24753 13152 19807 26021 13192 20119 26284 13258 19942 25832 13401 20684 26880 13537 20827 26595 13548 19009 22749 13813 19785 24208 14208 20766 26175 14107 21554 27761 14191 12/98 22315 29361 14226 22802 30588 14327 22270 29638 13987 22947 30823 14056 23551 32017 14091 22973 31262 13946 23835 32997 13902 23348 31966 13864 23134 31807 13853 22871 30935 13977 23649 32892 14014 23834 33561 14006 12/99 24633 35538 13921 23772 33752 13917 23622 33114 14091 25218 36351 14295 24683 35258 14225 24380 34534 14212 24737 35386 14502 24503 34833 14656 25374 36995 14863 24708 35043 14919 24865 34894 15012 24057 32145 15269 12/00 24405 32303 15570 24909 33448 15832 23956 30400 15995 22976 28475 16068 23928 30685 15948 24104 30891 16040 23487 30140 16117 23511 29843 16518 22615 27977 16730 21727 25719 16884 22231 26210 17313 23168 28220 17029 12/01 23230 28468 16894 22920 28053 17018 22791 27512 17163 23196 28547 16815 21973 26817 17140 21828 26620 17299 20898 24725 17446 20186 22799 17656 20199 22947 18052 18868 20455 18440 19749 22253 18264 20687 23561 18275 12/02 19981 22178 18759 19627 21599 18758 19488 21275 19092 19521 21482 19067 20516 23250 19271 21353 24474 19819 21519 24787 19739 21628 25224 18912 21861 25715 19036 21783 25443 19640 22483 26880 19390 22635 27116 19442 12/03 23617 28538 19633 </Table> <Table> --- ADVISERS IB --- S&P 500 INDEX MMMM LEHMAN GOVERNMENT/ $10,000 starting value $10,000 starting value CREDIT BOND INDEX $23,617 ending value $28,536 ending value $10,000 starting value $19,633 ending value </Table> AVERAGE ANNUAL RETURNS(1) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR 10 YEAR - -------------------------------------------------- Advisers IB(2) 18.20% 1.14% 8.97% - -------------------------------------------------- S&P 500 Index 28.67% -0.57% 11.06% - -------------------------------------------------- Lehman Government/ Credit Bond Index 4.66% 6.65% 6.98% - -------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGEMENT TEAM RAND L. ALEXANDER, CFA Senior Vice President, Partner PAUL D. KAPLAN Senior Vice President, Partner, Director of Fixed Income - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Advisers HLS Fund, Class IB returned 18.20% for the 12 months ended December 31, 2003. The Fund outperformed the Composite Index (S&P 500 Index 55%, Lehman Brothers Government/Credit Bond Index 35% and 90 day Treasury Bills 10%), which returned 17.12% over the same period. The Fund underperformed the Lipper Flexible Portfolio VA-UF Average, which returned 18.59% over the same period. WHY DID THE FUND PERFORM THIS WAY? After a three-year decline, the U.S. equity markets rallied during the period. This surge in the broad market began with the ending of the conflict in Iraq and has been fueled by increases in consumer confidence and manufacturing output, resilience in consumer spending and productivity gains, and support from low interest rates and reduced tax rates. Across both the equity and fixed income asset classes, there was an overall trend of lower quality securities providing superior returns than higher quality investments as the markets shifted from risk aversion to risk pursuit. Among bonds, emerging markets debt and high yield bonds outperformed U.S. Treasuries and other investment grade sectors. Within the equity markets, emerging markets outperformed developed markets, and small caps outperformed large caps. The Fund returns for the year were driven primarily by positive asset allocation decisions during the course of 2003. We entered the year optimistic that low interest rates, tax cuts, a stabilizing employment picture, and the weak dollar would boost the U.S. economy, and in turn, investor confidence. Our equity ratio increased from 62% to 70% of the Fund over the course of the year. This equity exposure matches our highest level ever and expresses our high confidence that equities will provide the most attractive returns over the coming year. With the out-performance of equities over bonds during the year, our positioning enhanced performance. In terms of the equity portion, the Fund generated strong returns through positive sector allocation decisions and solid performance from some individual holdings. We maintained overweight positions in information technology and materials, the two strongest areas of the market during 2003. We also remained underweight in telecommunication services, which was the poorest performing sector, as the industry continues to work through capacity issues. Strong contributors during the year included Citigroup, Inc. (banks) and Intel Corp. (electronics). Citigroup, Inc. has executed well, controlled costs, and is leveraged to an improvement in capital market activity. Intel Corp. benefited from a strong semiconductor cycle in 2003, as they continually beat earnings expectations. Relative equity results were hindered somewhat by our large cap, high quality bias, especially in the information technology sector. Detractors included Schering-Plough Corp. (drugs) and Safeway, Inc. (consumer non-durables); both stocks were eliminated from the Fund. Within the fixed income portion of the Fund, returns were in line with our benchmark. Our fundamental high quality bias generated lower returns than had we invested more aggressively in some of the lower quality segments of the market. Specifically, our low exposure to Ford Motor Co. (transportation) and General Motors Corp. (transportation) detracted from returns this year as bonds of these lower quality issuers outperformed most corporate bonds in 2003. We continue to believe this approach is the correct one as insurance for those unpredictable periods of stock market volatility. Our tactical duration management was a positive factor this year. We had a slightly short duration bias in anticipation of a stronger economy and higher interest rates. As only the first part of this outlook has developed, this bias detracted slightly from returns. 2 - -------------------------------------------------------------------------------- WHAT IS YOUR OUTLOOK AND STRATEGY? The economic and operating environment for businesses has rarely been more favorable for corporate earnings and profitability. Tax cuts, a weaker dollar, sustained productivity, and healthier balance sheets are all evidence of this. As the economy continues to grow, we will look for improved corporate spending and employment trends as key gauges to determine the sustainability of the domestic recovery. This encourages us to maintain our high equity exposure. Within our equity portion we maintain a cyclical bias, with overweight positions in information technology, industrials, and consumer discretionary sectors. On the fixed income side, the economy continues to show signs of a sustained recovery and the bond market struggles with stronger economic indicators. While we have outlined an environment that should be supportive of the business sector and corporate balance sheets in particular, we have begun to shift investments away from corporate bonds and back toward government securities as valuations in the corporate sector are now less than generous and as the Fund increases its exposure to the business sector via its equity holdings. An improving economic environment is also supportive of our slightly shorter duration posture, as interest rates should begin to move upward later this year. 3 Hartford Bond HLS Fund inception 8/31/1977 (subadvised by Hartford Investment Management Company) PERFORMANCE OVERVIEW 12/31/93 - 12/31/03 Growth of a $10,000 investment (PERFORMANCE LINE GRAPH) <Table> <Caption> LEHMAN BROTHERS U.S AGGREGATE BOND BOND IB INDEX ------- ---------------------------------- 12/31/93 10000 10000 10147 10135 9905 9959 9654 9713 9570 9635 9559 9634 9534 9613 9701 9804 9702 9816 9573 9672 9551 9663 9532 9642 12/94 9582 9708 9754 9900 9951 10136 10022 10198 10145 10341 10558 10741 10656 10819 10591 10795 10720 10926 10819 11032 10981 11175 11152 11343 12/95 11324 11502 11380 11578 11152 11376 11075 11297 10978 11233 10972 11211 11106 11361 11127 11392 11105 11372 11298 11570 11546 11827 11788 12029 12/96 11694 11918 11741 11955 11791 11984 11665 11851 11815 12029 11943 12143 12113 12288 12520 12620 12387 12512 12580 12698 12738 12882 12817 12941 12/97 12989 13072 13165 13239 13151 13228 13212 13273 13266 13342 13404 13469 13530 13584 13523 13612 13641 13834 14000 14158 13848 14083 13986 14163 12/98 14019 14206 14127 14306 13766 14056 13847 14133 13917 14179 13730 14054 13647 14009 13615 13950 13589 13943 13719 14105 13770 14157 13777 14156 12/99 13712 14088 13684 14041 13848 14211 14058 14399 14033 14357 14040 14350 14359 14648 14448 14781 14628 14996 14718 15090 14755 15190 14975 15439 12/00 15328 15726 15681 15982 15767 16121 15805 16202 15775 16134 15864 16231 15843 16292 16217 16657 16418 16849 16457 17044 16750 17401 16684 17161 12/01 16629 17051 16689 17189 16757 17356 16520 17067 16860 17398 17036 17546 17029 17697 17062 17911 17387 18214 17535 18509 17618 18424 17812 18418 12/02 18263 18800 18414 18817 18701 19076 18722 19062 18960 19219 19391 19577 19378 19538 18798 18881 18942 19006 19441 19510 19311 19328 19396 19374 12/03 19647 19572 </Table> <Table> --- BOND IB --- LEHMAN BROTHERS U.S. AGGREGATE BOND $10,000 starting value INDEX $19,647 ending value $10,000 starting value $19,572 ending value </Table> AVERAGE ANNUAL RETURNS(1) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR 10 YEAR - ---------------------------------------------------- Bond IB(2) 7.58% 6.98% 6.99% - ---------------------------------------------------- Lehman Brothers U.S. Aggregate Bond Index 4.11% 6.62% 6.95% - ---------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER NASRI TOUTOUNGI Managing Director - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Bond HLS Fund, Class IB returned 7.58% for the 12 months ended December 31, 2003. The Fund outperformed both the Lehman Brothers U.S. Aggregate Bond Index, which returned 4.11% and the Lipper Intermediate Investment Grade Debt VA-UF Average, which returned 5.14% over the same period. WHY DID THE FUND PERFORM THIS WAY? Judicious sector selection was the major contributor to performance in 2003. In particular, our allocations to high yield and non-dollar securities had a significant impact for the year. During the second half of this year, astute interest rate anticipation versus the index also contributed positively to fund performance. Since the Fund was somewhat short duration going into the rate increase in late July and also during the fourth quarter, performance benefited from the rise in rates. Security selection also added to performance across several sectors. The high yield sector was amongst the best performing sectors in the fixed income market. The Lehman High Yield Corporate Index returned 28.97% for the year ended December 31st. This was due to improved corporate fundamentals and very attractive valuations accompanied by very strong mutual fund demand. The dollar declined against major currencies. In particular, the dollar weakened versus the Euro, declining by 20% from 1.05 to 1.26 dollar per Euro. The twin budget and current account deficit concerns have taken their toll on the exchange rate, despite strong growth in the U.S. WHAT IS YOUR OUTLOOK AND STRATEGY? Improved corporate profitability and stronger balance sheets are facilitating pent-up demand for corporate spending. The Institute of Supply Management's early January report displayed surprising strength. The manufacturing new orders component of this report provided the strongest reading since 1950, while most other components indicated continued acceleration of business activity. While capacity utilization remains well below its long-term average, the sustained upward trend is a constructive sign of growth. Our overall duration position is essentially neutral to slightly defensive. We fully expect interest rates to rise for fundamental reasons once excess capacity in labor and manufacturing is filled, and inflation starts to rise. The yield curve is at near record steep levels, and is currently anchored by the Federal Reserve's resolve to maintain an easing bias to kick start the economy. We remain constructive on corporate bond spreads, but we are not nearly as sanguine as we were last year. While fundamentals for corporate securities continue to improve, bonds have done very well versus their treasury counterparts. We maintain a 6% weight to high yield securities, and while only 2% overweight on investment grade corporates, we continue to favor BBB securities. Approximately a third of the portfolio is in mortgage-backed securities. While these securities are good income generators, we are concerned about price depreciation in the event of a significant move in interest rates. We are also concerned that Agency debentures could experience further volatility, thus we will remain under invested in the sector. We have reentered a position in foreign bonds on an unhedged basis. The currency markets are once again focused on the very large U.S. trade deficit, and in a rising rate environment, European bonds should do well versus U.S. bonds. We hold a 3.5% in foreign government or quasi government bonds and will look to opportunistically increase exposure to international securities. Treasury Inflation Protected Securities should also offer good value long term. We will be watching for leading indicators of inflation before we invest in TIPS later in 2004. 4 Hartford Capital Appreciation HLS Fund inception 4/2/1984 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 12/31/93 - 12/31/03 Growth of a $10,000 investment (PERFORMANCE LINE GRAPH) <Table> <Caption> CAPITAL APPRECIATION IB S&P 500 INDEX ----------------------- ------------- 12/31/93 10000 10000 10452 10340 10395 10059 9835 9621 9779 9745 9678 9904 9391 9662 9696 9979 10443 10387 10416 10133 10531 10361 10058 9984 12/94 10225 10131 10229 10394 10587 10799 10952 11117 11262 11444 11552 11901 12117 12177 12856 12580 13044 12610 13330 13142 12695 13094 13255 13670 12/95 13285 13933 13483 14407 13836 14541 14041 14681 14711 14897 15156 15279 14770 15337 13712 14660 14430 14969 15276 15810 15257 16246 16072 17473 12/96 15994 17127 16605 18196 16284 18340 15363 17588 15753 18636 17545 19769 18301 20655 19811 22297 19572 21048 20868 22199 19614 21458 19456 22451 12/97 19519 22838 19339 23089 21164 24753 21995 26021 22379 26284 21391 25832 21801 26880 21252 26595 17019 22749 18020 24208 19777 26175 21008 27761 12/98 22494 29361 23467 30588 22428 29638 24160 30823 25295 32017 24934 31262 26316 32997 26030 31966 25710 31807 24836 30935 26504 32892 27922 33561 12/99 30864 35538 30234 33752 34895 33114 35737 36351 33856 35258 32729 34534 34763 35386 34813 34833 38326 36995 36930 35043 35868 34894 32890 32145 12/00 34883 32303 36961 33448 35293 30400 33374 28475 35955 30685 36441 30891 35370 30140 34060 29843 32352 27977 28623 25719 29449 26210 31568 28220 12/01 32406 28468 31534 28053 30861 27512 32040 28547 30310 26817 30191 26620 27510 24725 25290 22799 25876 22947 23919 20455 25693 22253 27672 23561 12/02 25963 22178 25430 21599 25147 21275 24852 21482 26713 23250 28825 24474 29579 24787 30113 25224 31237 25715 31112 25443 33545 26880 34380 27116 12/03 36873 28538 </Table> <Table> --- CAPITAL APPRECIATION IB --- S&P 500 INDEX $10,000 starting value $10,000 starting value $36,873 ending value $28,538 ending value </Table> AVERAGE ANNUAL RETURNS(1) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR 10 YEAR - -------------------------------------------------------- Capital Appreciation IB(2) 42.02% 10.39% 13.94% - -------------------------------------------------------- S&P 500 Index 28.67% -0.57% 11.06% - -------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER SAUL J. PANNELL, CFA Senior Vice President, Partner - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Capital Appreciation HLS Fund, Class IB returned 42.02% for the 12 months ended December 31, 2003. The Fund outperformed both the Lipper Multi Cap Core VA-UF Average, which returned 31.49% and the Composite Index (Russell 2500 Index 60% and S&P 500 Index 40%), which returned 38.62% over the same period. WHY DID THE FUND PERFORM THIS WAY? Equity markets continued to rise during the period; over the past twelve months the S&P 500 has now gained over 28%. Optimism regarding the economy that fueled the second quarter's sharp rally essentially became the consensus view. All market cap styles benefited, with the performance of small- and mid-cap stocks exceeding that of large-cap equities. All ten benchmark sectors registered positive returns during the period with the strongest results in materials (34%), information technology (62%), and consumer discretionary (43%). The Fund is focused on providing shareholders with maximum total returns. In seeking this level of high total return, our investment approach seeks capital appreciation from all companies regardless of market capitalization size, sector, or country. Our investment decisions, while based primarily on company-by-company fundamental analysis, may also be shaped by secular themes. We try to emphasize differences between our outlook and Wall Street consensus and utilize a broad array of other investment techniques. During the period, the Fund benefited the most from strong stock selection in telecommunication services, energy, and materials. The three largest contributors to absolute returns were Nextel Communications, Inc., Class A (communications), which benefited from continued strength in its push-to-talk phone; Nortel Networks Corp. (communications), which rose on new contract awards and a debt outlook upgrade from a credit agency; and Citigroup, Inc. (banks). Our gains were modestly offset by relatively poor stock selection in information technology and, to a lesser extent, health care. Within technology, IT service companies Concord Communications, Inc. (software & services) and CheckFree Corp. (financial services) underperformed. The three biggest detractors from absolute returns were Northrop Grumman Corp. (aerospace & defense), Schering-Plough Corp. (drugs) and Gold Fields Ltd. (metals, minerals & mining). The Fund has eliminated its positions in these poor performers. It is important to note that as the Fund has gotten larger, the portion of the Fund represented by small-caps has gotten smaller. This underweight relative to the benchmark was slightly detrimental to the overall performance of the Fund as small-caps were the strongest performing market cap category over this period. WHAT IS YOUR OUTLOOK AND STRATEGY? As we enter the new year, corporate profits are surging, borrowing costs remain attractive, and consumer confidence has stabilized. The building blocks for reinvigorated corporate spending, rising employment, and an expanding economy appear to be in place. However, on the heels of robust appreciation in 2003, equity markets generally seem to have already priced-in a healthy cyclical rebound. Over the past year it has paid to invest in companies with high financial and operating leverage. Going forward it will likely be more important to identify companies that can gain market share, grow the top-line, and drive the economic expansion. Toward the end of the 12-month period we initiated or added to positions in the industrials sector including defense-related and education stocks. To fund these positions we eliminated or reduced our holdings in health care services companies on the view that most of these companies, whether they are drug distributors, health insurers, or hospitals, will face increased pricing pressures over the intermediate term. 5 Hartford Dividend and Growth HLS Fund inception 3/9/1994 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 3/9/94 - 12/31/03 Growth of a $10,000 investment (PERFORMANCE LINE GRAPH) <Table> <Caption> DIVIDEND AND GROWTH IB S&P 500 INDEX ---------------------- ------------- 3/9/94 10000 10000 9705 9554 9944 9676 10061 9835 9928 9594 10209 9909 10632 10314 10405 10062 10480 10288 10048 9914 12/94 10176 10060 10388 10321 10743 10723 11005 11039 11226 11364 11734 11817 11793 12091 12070 12491 12273 12522 12896 13050 12785 13001 13399 13574 12/95 13842 13835 14199 14305 14327 14439 14718 14578 14783 14792 15092 15173 15307 15231 14835 14558 15052 14866 15767 15702 16221 16135 17124 17353 12/96 16970 17010 17856 18072 18117 18214 17434 17467 18034 18508 19208 19634 20261 20514 21462 22145 20445 20905 21676 22049 21031 21314 21906 22300 12/97 22326 22682 22645 22933 23647 24586 24929 25844 24806 26104 24392 25656 24737 26697 24562 26414 21447 22595 22872 24043 24462 25997 25197 27572 12/98 25937 29161 25713 30380 25335 29436 25982 30613 27571 31799 26870 31049 27785 32772 26911 31749 26211 31591 25535 30725 27031 32668 26897 33332 12/99 27266 35296 26166 33522 24722 32888 27451 36104 27116 35018 27685 34299 26831 35145 26825 34596 28377 36744 28639 34804 29236 34657 28646 31926 12/00 30199 32083 29762 33220 29466 30193 28525 28282 29987 30476 30522 30680 29746 29935 29962 29640 28982 27786 27088 25543 27098 26031 28601 28028 12/01 28927 28275 28991 27862 29463 27325 30279 28353 29005 26634 29274 26439 27706 24556 25473 22643 25294 22791 22498 20316 24203 22101 25864 23401 12/02 24756 22027 23909 21452 23416 21131 23371 21335 25115 23091 26726 24306 26964 24618 27228 25052 27828 25539 27502 25269 28807 26697 29344 26931 12/03 31312 28343 </Table> <Table> --- DIVIDEND AND GROWTH IB --- S&P 500 INDEX $10,000 starting value $10,000 starting value $31,312 ending value $28,343 ending value </Table> AVERAGE ANNUAL RETURNS(1) (as of 12/31/03) <Table> <Caption> SINCE 1 YEAR 5 YEAR INCEPTION - --------------------------------------------------------- Dividend and Growth IB(2) 26.48% 3.84% 12.33% - --------------------------------------------------------- S&P 500 Index 28.67% -0.57% 11.19% - --------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER EDWARD P. BOUSA, CFA Vice President - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Dividend and Growth HLS Fund, Class IB returned 26.48% for the 12 months ended December 31, 2003. The Fund underperformed both the Lipper Equity Income VA-UF Average, which returned 26.81% and the S&P 500 Index, which returned 28.67% over the same period. WHY DID THE FUND PERFORM THIS WAY? During the 12-month period ending December 31, 2003, the economic picture has improved. With both fiscal and monetary stimulus at sizable levels, the economy should continue to strengthen and we expect GDP to further improve in 2004. Productivity figures have been very strong as well, having a large positive impact on corporate earnings. However, job growth has lagged the recovery, indicating that manufacturing jobs continue to move overseas and that businesses are still cautious about hiring. With respect to the Fund's relative results, our underperformance relative to the S&P 500 can be largely attributed to our low exposure to high beta, speculative information technology names and a couple of poor investments within the telecommunications and utilities sectors. Our technology underweight negatively impacted performance as the sector, fueled by a recovery in semiconductors and hardware providers, returned over 45% for the period. In terms of our diversified telecommunication provider holdings, we were disappointed with the performance of Verizon Communications, Inc. (communications) and AT&T Corp. (communications), which traded lower on weaker-than-expected demand for their core services. On an absolute basis, Schering-Plough Corp. (drugs) was the largest detractor from performance. Schering-Plough Corp. faced competitive pressures across several key drug franchises. At the end of the period, we continued to own AT&T Corp., Verizon Communications, Inc. and Schering-Plough Corp. Our stock selection was particularly strong among financials and energy names. For the period, Citigroup, Inc. (banks) and Caterpillar, Inc. (machinery) were our two top positive absolute contributors. Citigroup, Inc. benefited from its leverage to rising financial markets, while Caterpillar, Inc. experienced a significant up-tick in orders resulting in higher earnings levels relative to previous cycles. At the margin, our macroeconomic strategies "paid off" as our overweight to materials and underweight to health care and consumer staples boosted benchmark-relative returns. WHAT IS YOUR OUTLOOK AND STRATEGY? Although the market favored higher-valued speculative growth stocks and small cap stocks during most of 2003, our strategy of owning reasonably priced companies with good dividend yields showed signs of outperformance in the fourth quarter. This is encouraging for 2004. The combination of a stronger economy, higher interest rates and a weaker dollar is unlikely to lead to further multiple expansions for the speculative stocks, and therefore we believe the Fund is well-positioned as we begin the new year. 6 Hartford International Opportunities HLS Fund inception 7/2/1990 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 12/31/93 - 12/31/03 Growth of a $10,000 investment (PERFORMANCE LINE GRAPH) <Table> <Caption> INTERNATIONAL OPPORTUNITIES IB MSCI AC WORLD FREE EX US INDEX ------------------------------ ------------------------------ 12/31/93 10000 10000 10393 10822 10029 10740 9570 10249 9786 10597 9827 10600 9760 10675 10001 10849 10376 11214 10021 10936 10293 11230 9827 10688 12/94 9782 10663 9400 10180 9349 10124 9745 10696 10007 11113 10139 11064 10132 10911 10683 11530 10457 11131 10556 11321 10537 11018 10770 11277 12/95 11116 11723 11397 11884 11490 11884 11655 12106 12088 12473 11983 12286 11974 12348 11551 11938 11629 12008 11812 12306 11800 12182 12393 12652 12/96 12522 12506 12394 12276 12445 12501 12454 12475 12373 12580 13182 13357 13791 14094 14196 14380 13150 13249 13863 13965 12812 12776 12607 12616 12/97 12534 12761 12677 13143 13531 14020 14173 14505 14496 14608 14592 14344 14615 14290 14766 14425 12613 12391 12127 12129 13015 13400 13768 14120 12/98 14155 14606 14561 14591 14209 14264 15018 14953 15588 15701 14941 14963 15670 15651 16069 16018 16090 16073 16184 16182 16723 16785 17678 17456 12/99 19761 19121 18648 18083 20000 18572 19814 19270 18719 18195 17931 17729 18627 18484 18050 17755 18292 17974 17342 16977 16508 16438 15761 15700 12/00 16352 16236 16448 16480 15128 15175 14051 14102 15100 15062 14512 14646 14048 14084 13739 13771 13356 13429 11945 12004 12261 12340 12988 12905 12/01 13265 13071 12669 12511 12706 12601 13412 13338 13348 13372 13507 13518 12913 12934 11598 11673 11462 11674 10103 10436 10851 10996 11358 11525 12/02 10862 11153 10383 10761 10081 10543 9873 10338 10778 11335 11396 12057 11579 12390 11914 12720 12350 13099 12451 13466 13192 14339 13462 14651 12/03 14421 15770 </Table> <Table> --- INTERNATIONAL OPPORTUNITIES IB --- MSCI AC WORLD FREE EX US INDEX $10,000 starting value $10,000 starting value $14,421 ending value $15,770 ending value </Table> AVERAGE ANNUAL RETURNS(1) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR 10 YEAR - -------------------------------------------------------------- International Opportunities IB(2) 32.76% 0.37% 3.73% - -------------------------------------------------------------- MSCI AC World Free ex US Index 41.40% 1.54% 4.66% - -------------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER TROND SKRAMSTAD Senior Vice President, Partner, Director of International Equities - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford International Opportunities HLS Fund, Class IB returned 32.76% for the 12 months ended December 31, 2003. The Fund underperformed both the Lipper International VA-UF Average, which returned 35.41% and the Morgan Stanley Capital International (MSCI) All-Country World Free ex US Index, which returned 41.40% over the same period. WHY DID THE FUND PERFORM THIS WAY? The global recovery is here. International equity markets climbed strongly over the past twelve months. As measured by the MSCI regional indices, Japan outperformed Pac Basin ex-Japan and Europe in local currency terms during the year. However, in USD terms, MSCI Pac Basin ex-Japan strongly outperformed both Europe and Japan, helped by the appreciation of the Australian currency versus the dollar. The Fund's underperformance versus the Index can be linked to three main drivers. First, our holdings within the consumer discretionary and telecommunications services sectors, while recording strong double-digit returns for the year, lagged the returns of those sectors in the Index. Second, our overweight allocation to the defensive health care sector detracted from relative returns, as the market reflected a more risk-seeking environment benefiting more economically or financially levered cyclicals. The third factor was that the average cap size of our holdings was higher than that of the index, which hurt our relative performance as small and mid cap securities dramatically outpaced larger caps. During the year, the Fund recorded strong absolute returns. Financials sector holdings were a primary driver of Fund returns, led by significant contributor National Bank of Canada (banks). Information technology sector holdings also contributed strongly to Fund returns. After a prolonged slump, global semiconductor sales have improved markedly thanks to higher average selling prices and increased demand from wireless handsets. Consequently, top contributing stocks within the sector included ASML Holding N.V. (machinery) and Nokia Corp. (communications). The top contributor to Fund returns overall was Vodafone Group PLC (communications). WHAT IS YOUR OUTLOOK AND STRATEGY? While equity markets have priced in significant economic growth already, we believe that conditions are ripe for expansion to continue into the first half of 2004, with the growth picture continuing to be bolstered by the massive fiscal and monetary stimulus enacted by governments and central banks around the globe over the last several years. China has positively impacted the world's economic growth this year, helping drive global demand for both raw materials and capital goods. The rest of Asia ex-Japan finds itself at the end of a multi-year adjustment process and is poised to move ahead once again, as the region no longer relies upon the U.S. as its main growth driver. Instead, the Asian consumer is becoming an increasingly important engine of growth. The Japanese recovery appears to be legitimate as corporations have lowered their debt and overcapacity and can now focus on product leadership. We have sold several of our defensive holdings and shifted into companies with greater operational gearing. Europe lagged but is expected to make up ground in 2004. The economic impact of the appreciating euro has adversely slowed growth, but monetary and fiscal stimulus should help drive a cyclical economic upturn. As we move forward into 2004, we are likely to take profits in some of the more economically or financially levered cyclicals that have already performed well. On the other hand, we would look to add those stocks that have either lagged or have not discounted a recovery in earnings to more normal levels. 7 Hartford Small Company HLS Fund inception 8/9/1996 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 8/9/96 - 12/31/03 Growth of a $10,000 investment (PERFORMANCE LINE GRAPH) <Table> <Caption> SMALL COMPANY IB RUSSELL 2000 GROWTH INDEX ---------------- ------------------------- 8/9/96 10000 10000 10234 10231 10820 10758 10483 10294 10740 10580 12/96 10705 10786 10733 11056 10537 10388 9979 9655 10070 9543 11158 10978 11810 11350 12314 11931 12585 12290 13810 13270 12960 12473 12734 12176 12/97 12640 12183 12233 12020 13626 13081 14194 13630 14331 13714 13583 12717 13749 12847 13257 11774 10092 9056 11034 9975 11842 10495 12620 11309 12/98 14082 12332 14773 12887 13187 11708 14335 12125 15526 13196 15842 13217 17170 13913 17142 13483 16778 12979 17157 13229 17733 13568 19661 15002 12/99 23312 17647 22553 17482 26559 21550 26081 19285 23770 17338 21115 15820 24137 17863 22129 16332 23901 18050 22862 17153 21458 15761 18822 12899 12/00 20217 13689 19368 14797 17244 12768 15770 11608 17929 13029 17708 13330 17990 13694 17032 12526 16321 11743 13740 9849 14863 10796 16293 11697 12/01 17170 12425 16891 11983 16111 11208 17315 12182 16888 11918 16227 11222 15123 10270 12668 8691 12415 8687 11905 8060 12336 8468 13098 9307 12/02 11951 8665 11639 8429 11425 8204 11822 8328 13067 9116 14505 10143 14963 10339 16020 11120 16811 11718 16221 11421 17733 12408 18234 12812 12/03 18582 12870 </Table> <Table> --- SMALL COMPANY IB --- RUSSELL 2000 GROWTH INDEX $10,000 starting value $10,000 starting value $18,582 ending value $12,870 ending value </Table> AVERAGE ANNUAL RETURNS(1) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR SINCE INCEPTION - ----------------------------------------------------------------- Small Company IB(2) 55.48% 5.70% 8.74% - ----------------------------------------------------------------- Russell 2000 Growth Index 48.53% 0.86% 3.47% - ----------------------------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER STEVEN C. ANGELI, CFA Senior Vice President, Partner - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Small Company HLS Fund, Class IB returned 55.48% for the 12 months ended December 31, 2003. The Fund outperformed both the Russell 2000 Growth Index, which returned 48.53% and the Lipper Small Cap Core VA-UF Average, which returned 41.42% over the same period. WHY DID THE FUND PERFORM THIS WAY? The year 2003 was marked by a spectacular, if somewhat speculative, small cap growth cycle. Small cap growth stocks "rose from the ashes" to the top of the performance charts. This rise of small cap growth stocks fits well with historic patterns, as the market again anticipated a strong recovery in the economy -- and the resulting dramatic impact on small company fundamentals was swiftly discounted in stock prices. All ten sectors of the Russell 2000 Growth Index posted double-digit positive returns for the period, with telecommunications and technology leading the way. The Fund's strong outperformance was driven primarily by excellent stock selection and to a lesser extent by favorable sector allocation decisions. Security selection was additive in all but two sectors, with telecommunications and consumer discretionary leading the way. Within the technology sector, our strategy of re-allocating funds into companies with more leverage to a semiconductor upturn paid off handsomely as stocks like ASE Test Ltd. (electronics) and Micro Semiconductor (electronics) experienced triple digit appreciation. Unable to find reasonable values amid the speculative tech frenzy, we remained underweight to the sector throughout much of the year, which detracted marginally from our index-relative results. The top contributors to absolute returns were American Tower Corp., Class A (communications), Red Hat, Inc. (software & services), and eResearch Technology, Inc. (software & services). After the carnage of the telecom boom and bust, American Tower Corp., Class A remains a dominant leader that is de-leveraging its balance sheet with free cash flow while still growing its core business. Three significant detractors from returns were NDC Health Corp. (health services), Pinnacle West Capital Corp. (utilities), and AGCO Corp. (machinery). All three have been eliminated from the Fund. WHAT IS YOUR OUTLOOK AND STRATEGY? The recovering U.S. economy is shifting into high gear, as manufacturing activity approaches 20-year highs, consumer spending remains brisk, jobless claims are falling, and overall confidence is strong. Going forward, we foresee a synchronized global rebound, driven by industrial and general business strength, tempered by a peaking consumer. The Fund is positioned to benefit from a recovery in the industrial and general business-to-business sectors of the economy. We remain overweight industrials, telecom and consumer discretionary and underweight financials and technology. Similar to other economic recoveries, small companies are once again leading the way with accelerating fundamentals. 8 Hartford Stock HLS Fund inception 8/31/1977 (subadvised by Wellington Management Company, LLP) PERFORMANCE OVERVIEW 12/31/93 - 12/31/03 Growth of a $10,000 investment (PERFORMANCE LINE GRAPH) <Table> <Caption> STOCK IB S&P 500 INDEX -------- ------------- 12/31/93 10000 10000 10258 10340 10126 10059 9624 9621 9665 9745 9798 9904 9538 9662 9852 9979 10212 10387 9938 10133 10002 10361 9628 9984 12/94 9786 10131 9941 10394 10394 10799 10709 11117 10907 11444 11276 11901 11560 12177 11944 12580 11986 12610 12517 13142 12275 13094 12931 13670 12/95 13090 13933 13483 14407 13704 14541 13875 14681 14101 14897 14512 15279 14620 15337 14121 14660 14323 14969 15116 15810 15436 16246 16630 17473 12/96 16239 17127 17257 18196 17339 18340 16742 17588 17709 18636 18769 19769 19796 20655 21228 22297 19876 21048 20921 22199 20235 21458 21109 22451 12/97 21281 22838 21542 23089 23172 24753 24464 26021 25002 26284 24569 25832 25795 26880 26036 26595 22221 22749 23211 24208 25300 26175 26855 27761 12/98 28345 29361 29211 30588 28551 29638 29839 30823 31073 32017 30101 31262 32018 32997 31099 31966 30717 31807 29938 30935 31565 32892 32014 33561 12/99 33892 35538 32051 33752 31536 33114 34790 36351 33754 35258 33141 34534 33534 35386 32875 34833 34493 36995 32945 35043 33129 34894 31120 32145 12/00 31448 32303 32284 33448 30018 30400 27959 28475 30013 30685 30258 30891 28956 30140 28621 29843 26637 27977 24779 25719 25378 26210 27354 28220 12/01 27552 28468 26871 28053 26483 27512 27442 28547 25078 26817 24716 26620 22967 24725 21539 22799 21355 22947 18982 20455 20700 22253 22257 23561 12/02 20824 22178 20276 21599 19872 21275 19951 21481 21475 23249 22525 24473 22856 24786 23427 25223 23731 25714 23345 25442 24577 26879 24802 27115 12/03 26271 28536 </Table> <Table> --- STOCK IB --- S&P 500 INDEX $10,000 starting value $10,000 starting value $26,271 ending value $28,536 ending value </Table> AVERAGE ANNUAL RETURNS(1) (as of 12/31/03) <Table> <Caption> 1 YEAR 5 YEAR 10 YEAR - --------------------------------------------- Stock IB(2) 26.16% -1.51% 10.14% - --------------------------------------------- S&P 500 Index 28.67% -0.57% 11.06% - --------------------------------------------- </Table> PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Please see Page 1 for important additional information including inception dates and expenses. PORTFOLIO MANAGER RAND L. ALEXANDER, CFA Senior Vice President, Partner - -------------------------------------------------------------------------------- HOW DID THE FUND PERFORM? Hartford Stock HLS Fund, Class IB returned 26.16% for the 12 months ended December 31, 2003. The Fund underperformed both the Lipper Large Cap Core VA-UF Average, which returned 26.43% and the S&P 500 Index, which returned 28.67% over the same period. WHY DID THE FUND PERFORM THIS WAY? The Fund generated strong absolute returns in 2003 as the equity markets rebounded after three years of negative returns. Low interest rates, tax cuts, a stabilizing employment picture, and a weakening dollar provided a boost to the US economy, and in turn, investor confidence. All ten sectors of the S&P 500 Index had positive returns for the year. While the recovery was broad-based by industry, there was a notable divergence in the performance of companies depending on their market capitalization. Investors had a sharp change in risk perception and chased the stocks of the companies that had the most financial and operating leverage. In this environment, there was nearly an inverse relationship between company size and returns; smallest stocks performed the best and mega-cap stocks performed the worst. The Fund generated strong returns through positive sector allocation decisions and solid performance from some individual holdings. We maintained overweight positions in information technology and materials, the two strongest areas of the market during 2003. We also remained underweight telecommunication services, which was the poorest performing sector, as the industry continues to work through capacity issues. Strong absolute contributors during the year included Citigroup, Inc. (banks), Intel Corp. (electronics), and Cisco Systems, Inc. (computers & office equipment). Citigroup, Inc. has executed well, controlled costs and is leveraged to an improvement in capital market activity. Intel Corp. benefited from a strong semiconductor cycle in 2003 as they continually beat earnings expectations. Cisco Systems, Inc. rose sharply during the year driven by a rebound in technology spending and new product introductions. In terms of relative performance, the Fund underperformed the benchmark because of two factors related to stock selection. First, we have a large-cap, high quality bias and did not benefit from the strong performance of the smaller cap, speculative parts of the market, especially in the information technology and telecommunication services. Second, we owned some specific stocks that were poor performers, such as Schering-Plough Corp. (drugs), Baxter International, Inc. (medical instruments & supplies), and Safeway, Inc. (consumer non-durables). Schering-Plough Corp. was weak due to the conversion of the Claritin franchise to the over-the-counter market and competition in other key drugs. Safeway, Inc. struggled as a result of the weak economy as well as competitive pressures from Wal-Mart Stores. Baxter International, Inc. had weak earnings due to pricing and competitive issues in their biosciences business. These stocks are no longer held in the Fund. WHAT IS THE OUTLOOK AND STRATEGY? We have a positive outlook for 2004. Tax cuts, a weaker dollar, sustained productivity, and healthier balance sheets all bode well for corporate profits. The consumer has driven the economic recovery so far; however, we will look for improved corporate spending and employment trends as key gauges to determine the sustainability of the domestic recovery. At this juncture, we believe a sustainable up-trend will in fact unfold over the next several months and support growth in 2004. The portfolio is positioned with a cyclical bias with the largest overweights in capital goods, media, materials, and technology hardware. We believe the environment bodes well for large-cap, multi-national, industry leading companies. 9 HARTFORD ADVISERS HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ------------- ----------- COLLATERALIZED MORTGAGE OBLIGATIONS V -- 1.2% $ @43,000 AESOP Funding II LLC, Series 1998-1, Class A (Aaa Moodys) 6.14% due 05/20/06.............................. $ 45,152 18,000 Asset Securitization Corp., Series 1997-D4, Class A1D (Aaa Moodys) 7.49% due 04/14/29.............................. 20,312 17,200 Asset Securitization Corp., Series 1997-D5, Class A1E (Aa1 Moodys) 6.93% due 02/14/41.............................. 18,290 20,352 Chase Commercial Mortgage Securities Corp., Series 1997-1, Class A2 (AAA S&P) 7.37% due 02/19/07.............................. 22,264 3,400 Citibank Credit Card Issuance Trust, Series 2001-B1, Class B1 (A2 Moodys) 7.05% due 09/17/07.............................. 3,680 4,000 Citibank Credit Card Master Trust l, Series 1999-7, Class B (A2 Moodys) 6.90% due 11/15/06.............................. 4,183 17,225 Lehman Brothers Commercial Mortgage Trust, Series 1997-C1, Class A3 (Aaa Moodys) 7.38% due 04/18/07.............................. 19,175 3,000 Standard Credit Card Master Trust, Series 1995-1, Class B (A1 Moodys) 8.45% due 01/07/07.............................. 3,206 ----------- 136,262 ----------- Total collateralized mortgage obligations......... $ 136,262 =========== </Table> <Table> <Caption> SHARES - ------------- COMMON STOCKS -- 70.2% BANKS -- 9.3% 2,369 American Express Co. ............................. $ 114,242 2,993 Bank One Corp. ................................... 136,442 2,100 Bank of America Corp. ............................ 168,903 5,787 Citigroup, Inc. .................................. 280,923 1,024 Federal National Mortgage Association............. 76,884 +1,120 HSBC Holdings PLC, ADR............................ 88,255 1,339 KeyCorp. ......................................... 39,248 1,479 State Street Corp. ............................... 77,016 1,687 U.S. Bancorp...................................... 50,230 1,048 Wachovia Corp. ................................... 48,808 ----------- 1,080,951 ----------- BUSINESS SERVICES -- 0.7% *3,083 Accenture Ltd..................................... 81,147 ----------- CHEMICALS -- 1.2% 1,356 Dow Chemical Co. (The)............................ 56,349 1,869 du Pont (E.I.) de Nemours & Co. .................. 85,768 ----------- 142,117 ----------- COMMUNICATIONS -- 0.5% 4,234 Motorola, Inc. ................................... 59,575 ----------- </Table> <Table> <Caption> MARKET SHARES VALUE # - ------------- ----------- COMPUTERS & OFFICE EQUIPMENT -- 5.6% 950 3M Co. ........................................... $ 80,779 *6,828 Cisco Systems, Inc................................ 165,845 *4,197 EMC Corp.......................................... 54,221 6,232 Hewlett-Packard Co. .............................. 143,144 2,182 International Business Machines Corp. ............ 202,228 ----------- 646,217 ----------- CONSUMER DURABLES -- 0.5% 2,027 Masco Corp. ...................................... 55,557 ----------- CONSUMER NON-DURABLES -- 2.1% 588 Cardinal Health, Inc. ............................ 35,974 3,303 Gillette Co. (The)................................ 121,334 914 Procter & Gamble Co. (The)........................ 91,290 ----------- 248,598 ----------- DRUGS -- 7.9% 2,357 Abbott Laboratories............................... 109,822 *1,620 Amgen, Inc........................................ 100,122 2,336 Eli Lilly & Co. .................................. 164,277 *1,113 Genzyme Corp...................................... 54,891 1,188 Merck & Co., Inc. ................................ 54,872 9,175 Pfizer, Inc. ..................................... 324,166 2,600 Wyeth............................................. 110,370 ----------- 918,520 ----------- ELECTRONICS -- 4.8% 9,191 General Electric Co. ............................. 284,728 6,975 Intel Corp. ...................................... 224,595 1,808 Texas Instruments, Inc. .......................... 53,107 ----------- 562,430 ----------- ENERGY & SERVICES -- 4.0% 1,119 ChevronTexaco Corp. .............................. 96,636 6,482 Exxon Mobil Corp. ................................ 265,778 1,821 Schlumberger Ltd. ................................ 99,629 ----------- 462,043 ----------- FINANCIAL SERVICES -- 2.1% 827 Franklin Resources, Inc. ......................... 43,064 1,919 Merrill Lynch & Co., Inc. ........................ 112,567 1,508 Morgan Stanley Dean Witter & Co. ................. 87,256 ----------- 242,887 ----------- FOOD, BEVERAGE & TOBACCO -- 3.3% 3,192 Coca-Cola Co. (The)............................... 161,994 +1,682 General Mills, Inc. .............................. 76,172 3,093 PepsiCo, Inc. .................................... 144,205 ----------- 382,371 ----------- FOREST & PAPER PRODUCTS -- 1.1% 1,970 International Paper Co. .......................... 84,927 700 Weyerhaeuser Co. ................................. 44,800 ----------- 129,727 ----------- HEALTH SERVICES -- 0.4% 1,098 HCA, Inc. ........................................ 47,170 ----------- HOTELS & GAMING -- 0.3% 681 Marriott International, Inc., Class A............. 31,453 ----------- </Table> The accompanying notes are an integral part of this financial statement. 10 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - ------------- ----------- COMMON STOCKS -- (CONTINUED) INSURANCE -- 3.3% 3,284 American International Group, Inc. ............... $ 217,683 2,200 Marsh & McLennan Cos., Inc. ...................... 105,358 3,737 Travelers Property Casualty Corp. -- Class B................................ 63,412 ----------- 386,453 ----------- MACHINERY -- 1.4% *1,969 Applied Materials, Inc............................ 44,211 1,398 Caterpillar, Inc. ................................ 116,045 ----------- 160,256 ----------- MEDIA & ENTERTAINMENT -- 4.8% *2,744 Comcast Corp...................................... 90,190 *6,604 Liberty Media Corp., Class A...................... 78,523 *12,300 Time Warner, Inc.................................. 221,277 2,496 Viacom, Inc., Class B............................. 110,759 2,521 Walt Disney Co. (The)............................. 58,815 ----------- 559,564 ----------- MEDICAL INSTRUMENTS & SUPPLIES -- 1.3% 1,450 Johnson & Johnson................................. 74,912 1,665 Medtronic, Inc. .................................. 80,921 ----------- 155,833 ----------- METALS, MINERALS & MINING -- 1.5% 1,790 Alcoa, Inc. ...................................... 68,020 1,259 Illinois Tool Works, Inc. ........................ 105,609 ----------- 173,629 ----------- RETAIL -- 4.0% *3,175 Costco Wholesale Corp............................. 118,035 4,458 Gap, Inc. (The)................................... 103,459 4,093 Home Depot, Inc. (The)............................ 145,275 *554 Kohl's Corp....................................... 24,874 1,894 Target Corp. ..................................... 72,714 ----------- 464,357 ----------- RUBBER & PLASTICS PRODUCTS -- 0.8% 1,300 NIKE, Inc., Class B............................... 88,998 ----------- SOFTWARE & SERVICES -- 5.3% *1,994 Computer Sciences Corp. .......................... 88,186 +1,877 First Data Corp. ................................. 77,142 11,423 Microsoft Corp. .................................. 314,595 *4,456 Oracle Corp. ..................................... 58,824 +1,828 SAP AG, ADR....................................... 75,972 ----------- 614,719 ----------- TRANSPORTATION -- 3.4% 1,248 CSX Corp. ........................................ 44,842 1,387 FedEx Corp. ...................................... 93,609 1,400 Lockheed Martin Corp. ............................ 71,960 809 Northrop Grumman Corp. ........................... 77,302 1,162 United Technologies Corp. ........................ 110,151 ----------- 397,864 ----------- UTILITIES -- 0.6% 2,250 Waste Management, Inc. ........................... 66,585 ----------- Total common stocks............................... $ 8,159,021 =========== </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ----------- CORPORATE NOTES V -- 12.0% BANKS -- 1.4% $ 20,000 Bank One Corp. (Aa3 Moodys) 6.875% due 08/01/06............................. $ 22,117 20,000 Bank of America Corp. (Aa2 Moodys) 5.875% due 02/15/09............................. 21,914 1,000 Bank of America Corp. (Aa3 Moodys) 6.20% due 02/15/06.............................. 1,081 10,000 BankBoston Corp. (A2 Moodys) 6.625% due 02/01/04............................. 10,038 14,825 Banponce Corp. (Baa1 Moodys) 6.75% due 12/15/05.............................. 16,123 25,000 Bayerische Landesbank Girozentrale (Aaa Moodys) 5.65% due 02/01/09.............................. 27,149 1,000 Citigroup, Inc. (Aa1 Moodys) 6.50% due 01/18/11.............................. 1,127 1,500 First Chicago NBD Corp. (A1 Moodys) 7.125% due 05/15/07............................. 1,692 13,685 First Union National Bank (Aa3 Moodys) 5.80% due 12/01/08.............................. 15,005 +1,000 Household Finance Corp. (A1 Moodys) 6.00% due 05/01/04.............................. 1,015 1,500 Inter-American Development Bank (Aaa Moodys) 7.375% due 01/15/10............................. 1,797 1,500 International Bank for Reconstruction & Development (Aaa Moodys) 7.00% due 01/27/05.............................. 1,590 36,745 Key Bank, N.A. (A1 Moodys) 5.80% due 04/01/04.............................. 37,137 750 KeyCorp. Capital II (A3 Moodys) 6.875% due 03/17/29............................. 786 1,500 Mellon Funding Corp. (A2 Moodys) 6.375% due 02/15/10............................. 1,670 1,000 Morgan (J.P.) Chase & Co. (A2 Moodys) 6.75% due 02/01/11.............................. 1,128 750 National City Corp. (A2 Moodys) 6.875% due 05/15/19............................. 866 500 Republic New York Capital I (A2 Moodys) 7.75% due 11/15/26.............................. 539 1,500 Salomon Smith Barney Holdings, Inc. (Aa1 Moodys) 5.875% due 03/15/06............................. 1,615 500 State Street Corp. (A1 Moodys) 7.65% due 06/15/10.............................. 598 1,000 Washington Mutual Financial Corp. (A3 Moodys) 7.25% due 06/15/06.............................. 1,112 1,000 Wells Fargo Bank N.A. (Aa1 Moodys) 6.45% due 02/01/11.............................. 1,123 ----------- 167,222 ----------- </Table> The accompanying notes are an integral part of this financial statement. 11 HARTFORD ADVISERS HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ----------- CORPORATE NOTES V -- (CONTINUED) CHEMICALS -- 0.4% $ 20,000 ICI Wilmington, Inc. (Baa3 Moodys) 6.95% due 09/15/04.............................. $ 20,624 20,000 Rohm & Haas Co. (A3 Moodys) 7.40% due 07/15/09.............................. 23,436 ----------- 44,060 ----------- COMMUNICATIONS -- 0.1% 10,000 Bellsouth Telecommunications, Inc. (Aa3 Moodys) 6.375% due 06/01/28............................. 10,435 500 GTE Corp. (A3 Moodys) 7.51% due 04/01/09.............................. 575 500 Sprint Capital Corp. (Baa3 Moodys) 6.875% due 11/15/28............................. 488 500 Sprint Capital Corp. (Baa3 Moodys) 7.625% due 01/30/11............................. 560 750 Telecommunications de Puerto Rico (Baa1 Moodys) 6.65% due 05/15/06.............................. 813 500 Verizon Global Funding Corp. (A2 Moodys) 7.25% due 12/01/10.............................. 576 500 Verizon Global Funding Corp. (A2 Moodys) 7.75% due 12/01/30.............................. 587 ----------- 14,034 ----------- COMPUTERS & OFFICE EQUIPMENT -- 0.4% 30,000 Hewlett-Packard Co. (A3 Moodys) 7.15% due 06/15/05.............................. 32,254 18,000 Pitney Bowes, Inc. (Aa3 Moodys) 5.50% due 04/15/04.............................. 18,208 ----------- 50,462 ----------- CONSUMER NON-DURABLES -- 0.7% 25,000 Boise Cascade Office Products Corp. (Ba2 Moodys) 7.05% due 05/15/05.............................. 26,043 350 Cardinal Health, Inc. (A2 Moodys) 6.75% due 02/15/11.............................. 400 18,000 Colgate-Palmolive Co. (Aa3 Moodys) 5.58% due 11/06/08.............................. 19,697 750 Procter & Gamble Co. (The) (Aa3 Moodys) 6.875% due 09/15/09............................. 866 21,100 Procter & Gamble Co. (The) (Aa3 Moodys) 9.36% due 01/01/21.............................. 28,302 750 SYSCO Corp. (A1 Moodys) 6.50% due 08/01/28.............................. 831 ----------- 76,139 ----------- CONSUMER SERVICES -- 0.4% 37,832 Postal Square LP (NA Moodys) 8.95% due 06/15/22.............................. 49,553 ----------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ----------- DRUGS -- 0.5% $ 26,000 American Home Products Corp. (Baa1 Moodys) 7.25% due 03/01/23.............................. $ 28,630 750 Bristol-Myers Squibb Co. (A1 Moodys) 6.80% due 11/15/26.............................. 836 29,000 Pharmacia Corp. (Aaa Moodys) 6.60% due 12/01/28.............................. 32,656 ----------- 62,122 ----------- EDUCATION -- 0.1% 10,900 Harvard University (Aaa Moodys) 8.125% due 04/15/07............................. 12,666 ----------- ELECTRICAL EQUIPMENT -- 0.6% 30,000 Danaher Corp. (A2 Moodys) 6.00% due 10/15/08.............................. 32,907 30,000 Rockwell International Corp. (A3 Moodys) 6.70% due 01/15/28.............................. 32,856 ----------- 65,763 ----------- ELECTRONICS -- 0.0% 500 Heller Financial, Inc. (Aaa Moodys) 6.375% due 03/15/06............................. 545 ----------- ENERGY & SERVICES -- 0.1% 12,250 Amoco Co. (Aa1 Moodys) 6.50% due 08/01/07.............................. 13,777 1,000 Conoco, Inc. (A3 Moodys) 6.95% due 04/15/29.............................. 1,134 1,000 Texaco Capital, Inc. (Aa3 Moodys) 8.625% due 06/30/10............................. 1,258 ----------- 16,169 ----------- FINANCIAL SERVICES -- 0.8% 30,000 AXA Financial, Inc. (A3 Moodys) 7.00% due 04/01/28.............................. 33,544 @16,355 ERAC USA Finance Co. (Baa1 Moodys) 7.35% due 06/15/08.............................. 18,686 1,000 Goldman Sachs Group, Inc. (The) (Aa3 Moodys) 6.65% due 05/15/09.............................. 1,131 750 Morgan Stanley Dean Witter & Co. (Aa3 Moodys) 7.75% due 06/15/05.............................. 814 @1,250 Prudential Insurance Co. of America (A2 Moodys) 6.375% due 07/26/06............................. 1,362 30,000 Toyota Motor Credit Corp. (Aaa Moodys) 5.50% due 12/15/08.............................. 32,830 ----------- 88,367 ----------- </Table> The accompanying notes are an integral part of this financial statement. 12 - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ----------- CORPORATE NOTES V -- (CONTINUED) FOOD, BEVERAGE & TOBACCO -- 0.9% $ 750 Anheuser Busch Cos., Inc. (A1 Moodys) 7.55% due 10/01/30.............................. $ 926 30,000 Coca-Cola Enterprises, Inc. (A2 Moodys) 6.75% due 09/15/28.............................. 33,458 500 Coca-Cola Enterprises, Inc. (A2 Moodys) 8.50% due 02/01/22.............................. 647 19,555 ConAgra Foods, Inc. (Baa1 Moodys) 7.875% due 09/15/10............................. 23,332 1,500 Pepsi Bottling Group, Inc. (The) (A3 Moodys) 7.00% due 03/01/29.............................. 1,719 35,000 PepsiAmericas, Inc. (Baa1 Moodys) 6.375% due 05/01/09............................. 38,981 ----------- 99,063 ----------- INSURANCE -- 1.9% 20,000 ACE INA Holdings, Inc. (A3 Moodys) 8.30% due 08/15/06.............................. 22,626 26,485 AmerUs Group Co. (Baa3 Moodys) 6.95% due 06/15/05.............................. 27,819 500 American General Co. (Aaa Moodys) 6.625% due 02/15/29............................. 542 30,000 Cincinnati Financial Corp. (A2 Moodys) 6.90% due 05/15/28.............................. 32,723 @27,000 Jackson National Life Insurance Co. (A3 Moodys) 8.15% due 03/15/27.............................. 31,636 @30,000 Liberty Mutual Insurance (Baa2 Moodys) 8.20% due 05/04/07.............................. 32,863 @30,000 New England Mutual Life Insurance Co. (A1 Moodys) 7.875% due 02/15/24............................. 34,843 1,000 Reliastar Financial Corp. (A1 Moodys) 8.00% due 10/30/06.............................. 1,130 27,600 Torchmark Corp. (A3 Moodys) 8.25% due 08/15/09.............................. 31,992 ----------- 216,174 ----------- MACHINERY -- 0.2% 20,000 Eaton Corp. (A2 Moodys) 6.95% due 11/15/04.............................. 20,896 ----------- MEDIA & ENTERTAINMENT -- 0.7% 30,000 Comcast Cable Communications (Baa3 Moodys) 6.875% due 06/15/09............................. 33,820 1,000 Comcast Cable Communications (Baa3 Moodys) 8.50% due 05/01/27.............................. 1,281 10,400 Times Mirror Co. (The), Class A (A3 Moodys) 7.50% due 07/01/23.............................. 11,802 +35,000 Walt Disney Co. (The) (Baa1 Moodys) 6.375% due 03/01/12............................. 38,486 ----------- 85,389 ----------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ----------- MEDICAL INSTRUMENTS & SUPPLIES -- 0.2% $ +22,000 Becton, Dickinson & Co. (A2 Moodys) 6.70% due 08/01/28.............................. $ 24,482 ----------- REAL ESTATE INVESTMENT TRUST -- 0.2% 20,000 Liberty Property Trust (Baa2 Moodys) 7.25% due 08/15/07.............................. 22,399 ----------- RETAIL -- 0.9% 20,000 Albertson's, Inc. (Baa2 Moodys) 6.55% due 08/01/04.............................. 20,474 30,000 Home Depot, Inc. (The) (Aa3 Moodys) 6.50% due 09/15/04.............................. 31,078 20,200 Target Corp. (A2 Moodys) 5.875% due 11/01/08............................. 22,126 30,000 Wal-Mart Stores, Inc. (Aa2 Moodys) 6.875% due 08/10/09............................. 34,561 ----------- 108,239 ----------- TRANSPORTATION -- 0.2% +500 Boeing Capital Corp. (A3 Moodys) 6.10% due 03/01/11.............................. 540 19,972 Continental Airlines, Inc. (Baa3 Moodys) 6.90% due 01/02/18.............................. 19,713 1,000 DaimlerChrysler North America Holding Corp. (A3 Moodys) 7.40% due 01/20/05.............................. 1,054 750 DaimlerChrysler North America Holding Corp. (A3 Moodys) 7.75% due 01/18/11.............................. 858 500 Ford Motor Co. (Baa1 Moodys) 6.375% due 02/01/29............................. 446 1,250 General Motors Acceptance Corp. (A3 Moodys) 6.15% due 04/05/07.............................. 1,340 1,000 Textron Financial Corp. (A3 Moodys) 7.125% due 12/09/04............................. 1,045 ----------- 24,996 ----------- U.S. GOVERNMENT AGENCIES -- 0.5% 50,000 Tennessee Valley Authority (Aaa Moodys) 6.00% due 03/15/13.............................. 54,908 ----------- UTILITIES -- 0.8% 25,000 Alabama Power Co. (A2 Moodys) 7.125% due 08/15/04............................. 25,881 1,000 Alabama Power Co. (A2 Moodys) 7.125% due 10/01/07............................. 1,137 40,000 Great Plains Energy, Inc. (A3 Moodys) 7.125% due 12/15/05............................. 43,570 567 Niagara Mohawk Power Corp. (Baa3 Moodys) 7.625% due 10/01/05............................. 615 17,285 Northern Border Pipeline Co. (A3 Moodys) 7.75% due 09/01/09.............................. 20,482 ----------- 91,685 ----------- Total corporate notes............................. $ 1,395,333 =========== </Table> The accompanying notes are an integral part of this financial statement. 13 HARTFORD ADVISERS HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ----------- FOREIGN/YANKEE BONDS & NOTES V -- 0.7% BANKS -- 0.2% $ 24,000 Credit National (A1 Moodys) 7.00% due 11/14/05.............................. $ 25,948 ----------- COMMUNICATIONS -- 0.0% 1,250 Telefonica Europe BV (A3 Moodys) 7.35% due 09/15/05.............................. 1,356 1,250 Vodafone Group PLC (A2 Moodys) 7.875% due 02/15/30............................. 1,536 ----------- 2,892 ----------- FINANCIAL SERVICES -- 0.0% 500 Korea Development Bank (A3 Moodys) 7.125% due 04/22/04............................. 505 1,250 Santandar Central Hispano Issuances Ltd. (A1 Moodys) 7.625% due 11/03/09............................. 1,470 ----------- 1,975 ----------- METALS, MINERALS & MINING -- 0.3% 30,000 Alcan, Inc. (Baa1 Moodys) 7.25% due 11/01/28.............................. 34,464 ----------- TRANSPORTATION -- 0.2% @17,639 SCL Terminal Aereo Santiago S.A. (Aaa Moodys) 6.95% due 07/01/12.............................. 19,149 ----------- UTILITIES -- 0.0% 750 TransCanada PipeLines Ltd. (A2 Moodys) 6.49% due 01/21/09.............................. 834 ----------- Total foreign/yankee bonds & notes................ $ 85,262 =========== U.S. TREASURIES & FEDERAL AGENCIES -- 15.1% FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 0.0% $ 673 6.30% due 04/01/08................................ $ 736 3 9.00% due 03/01/21................................ 3 ----------- 739 ----------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 2.0% 74,608 5.50% due 10/15/33................................ 75,928 57,573 6.00% due 06/15/24 -- 11/15/33.................... 59,905 12,141 6.50% due 03/15/26 -- 06/15/28.................... 12,820 69,540 7.00% due 06/15/26 -- 11/15/32.................... 74,140 346 7.50% due 09/15/23................................ 373 10,024 8.00% due 09/15/26 -- 02/15/31.................... 10,907 362 9.00% due 06/20/16 -- 01/15/23.................... 404 16 9.50% due 05/15/20................................ 17 ----------- 234,494 ----------- U.S. TREASURY BONDS -- 3.9% +400,000 6.25% due 08/15/23................................ 455,922 ----------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ----------- U.S. TREASURY NOTES -- 9.2% $ +650,000 1.625% due 09/30/05 -- 10/31/05................... $ 649,402 +200,000 2.375% due 08/15/06............................... 201,078 +200,000 3.25% due 08/15/08................................ 201,219 +10,000 6.00% due 08/15/04................................ 10,302 ----------- 1,062,001 ----------- Total U.S. treasuries & federal agencies.......... $ 1,753,156 =========== <Caption> SHARES - ---------- WARRANTS -- 0.0% COMMUNICATIONS -- 0.0% *@@-- Minorplanet System USA, Inc. ..................... $ -- ----------- Total warrants.................................... $ -- =========== SHORT-TERM SECURITIES -- 14.3% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 13.9% 1,620,168 State Street Navigator Securities Lending Prime Portfolio....................................... $ 1,620,168 <Caption> PRINCIPAL AMOUNT - ---------- REPURCHASE AGREEMENTS -- 0.4% $ 46,935 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04............................. 46,935 ----------- Total short-term securities....................... $ 1,667,103 =========== </Table> <Table> <Caption> DIVERSIFICATION OF NET ASSETS: Total collateralized mortgage obligations (cost $126,243)......................... 1.2% $ 136,262 Total common stocks (cost $7,163,600)..... 70.2 8,159,021 Total corporate notes (cost $1,285,306)... 12.0 1,395,333 Total foreign/yankee bonds & notes (cost $76,027)................................ 0.7 85,262 Total warrants (cost $5).................. 0.0 -- Total U.S. treasuries & federal agencies (cost $1,709,086)....................... 15.1 1,753,156 Total short-term securities (cost $1,667,103)............................. 14.3 1,667,103 ----- ----------- Total investment in securities (total cost $12,027,370) -- including $1,587,694 of securities loaned (See Note 2(i)).............................. 113.5 13,196,137 Cash, receivables and other assets........ 0.4 51,250 Payable for Fund shares redeemed.......... (0.0) (4,549) Securities lending collateral payable to brokers (See Note 2(i))................. (13.9) (1,620,168) Other liabilities......................... (0.0) (580) ----- ----------- Net assets................................ 100.0% $11,622,090 ===== =========== </Table> The accompanying notes are an integral part of this financial statement. 14 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET VALUE # ------------ SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 9,500,000 shares authorized; 512,286 shares outstanding................................... $ 512 Paid in capital................................. 11,270,027 Accumulated net investment income............... 104,776 Accumulated net realized loss on investments.... (921,992) Unrealized appreciation on investments.......... 1,168,767 ------------ Net assets...................................... $ 11,622,090 ============ </Table> <Table> <Caption> Class IA Net asset value per share ($10,358,449 / 456,882 shares outstanding) (8,500,000 shares authorized)...................................... $22.67 ====== Class IB Net asset value per share ($1,263,641 / 55,404 shares outstanding) (1,000,000 shares authorized)...................................... $22.81 ====== </Table> <Table> <Caption> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 2.1% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). @ Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2003, the market value of these securities amounted to $183,691 or 1.6% of net assets (See Note 2(m)). @@ Due to the presentation of the financial statements in thousands, the number of shares and/or market value round to zero. V The bond ratings are unaudited. </Table> The accompanying notes are an integral part of this financial statement. 15 HARTFORD BOND HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- COLLATERALIZED MORTGAGE OBLIGATIONS V -- 7.6% $ @2,509 AQ Finance CEB Trust, Series 2003-CE1A, Class Note (Baa2 Moodys) 6.141% due 08/25/33............................. $ 2,457 10,200 American Express Credit Account Master, Series 1999-2, Class A (Aaa Moodys) 5.95% due 12/15/06.............................. 10,379 4,200 Bank One Issuance Trust, Series 2003-C3, Class C3 (Baa2 Moodys) 4.77% due 02/16/16.............................. 3,985 10,000 Bear Stearns Commercial Mortgage Securities, Inc., Series 2003-T10, Class A2 (AAA S&P) 4.74% due 03/13/40.............................. 9,994 10,000 Bear Stearns Commercial Mortgage Securities, Inc., Series 2002-TOP8, Class A2 (AAA S&P) 4.83% due 08/15/38.............................. 10,104 2,958 Bear Stearns Commercial Mortgage Securities, Inc., Series 2003-T12, Class A1 (AAA S&P) 2.96% due 08/13/39.............................. 2,935 4,847 CS First Boston Mortgage Securities Corp., Series 2003-C3, Class A1 (Aaa Moodys) 2.079% due 05/15/38............................. 4,756 7,608 California Infrastructure Pacific Gas & Electric, Series 1997-1, Class A7 (Aaa Moodys) 6.38% due 09/25/08.............................. 8,103 4,000 California Infrastructure Pacific Gas & Electric, Series 1997-1, Class A8 (Aaa Moodys) 6.48% due 12/26/09.............................. 4,442 5,040 Capital One Multi Asset Execution, Series 2003-B2, Class B2 (A2 Moodys) 3.50% due 02/17/09.............................. 5,068 3,360 Citibank Credit Card Issuance Trust, Series 2003-C4, Class C4 (Baa2 Moodys) 5.00% due 06/10/15.............................. 3,230 16,150 Citibank Credit Card Master Trust I, Series 1999-1, Class A (Aaa Moodys) 5.50% due 02/15/06.............................. 16,235 5,441 Comed Transitional Funding Trust, Series 1998-1, Class A5 (Aaa Moodys) 5.44% due 03/25/07.............................. 5,602 16,645 Daimler Chrysler Auto Trust, Series 2002-A, Class A3 (Aaa Moodys) 3.85% due 04/06/06.............................. 16,833 8,920 Discover Card Master Trust I, Series 2001-5, Class A (Aaa Moodys) 5.30% due 11/16/06.............................. 9,050 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- $ 8,350 Ford Credit Auto Owner Trust, Series 2003-A, Class C (Baa2 Moodys) 4.29% due 11/15/07.............................. $ 8,383 15,000 GMAC Commercial Mortgage Securities Inc., Series 2003-C3, Class A1 (Aaa Moodys) 3.40% due 04/10/40.............................. 15,096 13,250 Honda Auto Receivables Owner Trust, Series 2003-2, Class A2 (Aaa Moodys) 1.34% due 12/21/05.............................. 13,255 6,541 Illinois Power Special Purpose Trust, Series 1998-1, Class A5 (Aaa Moodys) 5.38% due 06/25/07.............................. 6,747 10,792 LB-UBS Commercial Mortgage Trust, Series 2003-C1, Class A1 (Aaa Moodys) 2.72% due 04/15/33.............................. 10,764 10,821 LB-UBS Commercial Mortgage Trust, Series 2003-C7, Class A1 (Aaa Moodys) 3.334% due 09/15/27............................. 10,858 1,749 Morgan Stanley Capital I, Series 1999-WF1, Class A1 (Aaa Moodys) 5.91% due 04/15/08.............................. 1,860 5,475 Morgan Stanley Dean Witter Capital I, Series 2001-IQA, Class A1 (Aaa Moodys) 4.57% due 12/18/32.............................. 5,665 10,000 Morgan Stanley Dean Witter Capital I, Series 2003-TOP9, Class A2 (Aaa Moodys) 4.74% due 11/13/36.............................. 10,018 765 PP&L Transition Bond Co., LLC, Series 1999-1, Class A5 (Aaa Moodys) 6.83% due 03/25/07.............................. 793 1,680 Soundview Home Equity Loan Trust, Series 2000-1, Class M1 (Aa2 Moodys) 8.64% due 05/25/30.............................. 1,747 22,250 Volkswagen Auto Loan Enhanced Trust, Series 2003-1, Class A2 (Aaa Moodys) 1.11% due 12/20/05.............................. 22,228 10,080 WFS Financial Owner Trust, Series 2003-2, Class A4 (Aaa Moodys) 2.41% due 12/20/08.............................. 9,992 @2,968 Whole Auto Loan Trust, Series 2002-1, Class D (Ba2 Moodys) 6.00% due 04/15/09.............................. 2,964 ---------- 233,543 ---------- Total collateralized mortgage obligations......... $ 233,543 ========== </Table> The accompanying notes are an integral part of this financial statement. 16 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - ---------- ---------- COMMON STOCKS -- 0.4% COMMUNICATIONS -- 0.4% *##66 Global Crossing Ltd............................... $ 2,236 *565 Marconi Corp., PLC, ADR........................... 11,435 ---------- 13,671 ---------- Total common stocks............................... $ 13,671 ========== <Caption> PRINCIPAL AMOUNT - ---------- CONVERTIBLE BONDS V -- 0.3% SOFTWARE & SERVICES -- 0.3% $ 12,590 America Online, Inc. (Baa2 Moodys) 0.00% due 12/06/19.............................. $ 7,884 ---------- Total convertible bonds........................... $ 7,884 ========== CORPORATE NOTES V -- 26.1% APPAREL & TEXTILE -- 0.1% $ 1,600 Nine West Group, Inc. (Baa2 Moodys) 8.375% due 08/15/05............................. $ 1,733 ---------- BANKS -- 2.5% 12,000 Ford Motor Credit Co. (A3 Moodys) 7.00% due 10/01/13.............................. 12,656 7,000 Ford Motor Credit Co. (A3 Moodys) 7.375% due 02/01/11............................. 7,630 17,430 KFW International Finance, Inc. (Aaa Moodys) 3.00% due 09/15/05.............................. 17,623 8,450 Morgan (J.P.) Chase & Co. (A2 Moodys) 5.25% due 05/01/15.............................. 8,423 7,550 Morgan (J.P.) Chase & Co. (A2 Moodys) 7.875% due 06/15/10............................. 8,991 @11,300 Rabobank Capital Fund II (Aa2 Moodys) 5.26% due 12/31/49.............................. 11,316 3,980 Sovereign Bank (Baa3 Moodys) 5.125% due 03/15/13............................. 3,952 500 St Paul Bancorp, Inc. (A3 Moodys) 7.125% due 02/15/04............................. 503 3,780 Wachovia Corp. (Aa3 Moodys) 7.55% due 08/18/05.............................. 4,121 ---------- 75,215 ---------- BUSINESS SERVICES -- 0.0% 500 Interpool, Inc. (Caa1 Moodys) 7.20% due 08/01/07.............................. 478 ---------- CHEMICALS -- 0.3% 3,025 Millennium America, Inc. (B1 Moodys) 7.625% due 11/15/26............................. 2,813 2,735 Olin Corp. (Baa3 Moodys) 9.125% due 12/15/11............................. 3,325 ##1,700 Pollyone Corp. (B3 Moodys) 6.875% due 12/01/04............................. 1,679 ---------- 7,817 ---------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- COMMUNICATIONS -- 1.3% $ 4,689 AT&T Corp. (Baa2 Moodys) 8.75% due 11/15/31.............................. $ 5,479 @1,700 AT&T Corp. (Baa2 Moodys) 8.75% due 11/15/31.............................. 1,987 12,600 AT&T Wireless Services, Inc. (Baa2 Moodys) 8.125% due 05/01/12............................. 14,817 +3,050 Lucent Technologies, Inc. (Caa1 Moodys) 6.45% due 03/15/29.............................. 2,398 +2,510 Lucent Technologies, Inc. (Caa1 Moodys) 6.50% due 01/15/28.............................. 1,964 @@L300 Nextlink Escrow (Default) 0.00% due 12/01/09...... -- @@L600 Nextlink Escrow (Default) 0.00% due 12/01/09...... -- 1,235 PanAmSat Corp. (Ba2 Moodys) 6.375% due 01/15/08............................. 1,281 +7,765 Qwest Corp. (Ba3 Moodys) 6.875% due 09/15/33............................. 7,377 ##@@-- Voicestream Wireless Corp. (Ba3 Moodys) 10.375% due 11/15/09............................ -- @@17 Voicestream Wireless Corp. (Not Rated) 0.00% due 11/15/09........................................ -- L12,591 WorldCom, Inc. (Default) 8.25% due 05/15/31....... 4,218 ---------- 39,521 ---------- COMPUTERS & OFFICE EQUIPMENT -- 0.4% 7,650 International Game Technology (Baa3 Moodys) 7.875% due 05/15/04............................. 7,809 2,700 International Game Technology (Baa3 Moodys) 8.375% due 05/15/09............................. 3,232 ---------- 11,041 ---------- CONSTRUCTION -- 0.5% 7,800 CRH America, Inc. (Baa1 Moodys) 6.95% due 03/15/12.............................. 8,800 1,500 Chesapeake & Potomac Telephone Co. (Aa3 Moodys) 8.30% due 08/01/31.............................. 1,884 3,500 Toll Corp. (Ba2 Moodys) 8.25% due 02/01/11.............................. 3,850 ---------- 14,534 ---------- CONSUMER DURABLES -- 0.3% 3,105 Corning, Inc. (Ba2 Moodys) 8.30% due 04/04/25.............................. 3,190 6,250 Owens-Brockway (B1 Moodys) 8.75% due 11/15/12.............................. 6,961 ---------- 10,151 ---------- CONSUMER NON-DURABLES -- 0.2% 6,545 Xerox Corp. (B1 Moodys) 9.75% due 01/15/09.............................. 7,658 ---------- </Table> The accompanying notes are an integral part of this financial statement. 17 HARTFORD BOND HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- CORPORATE NOTES V -- (CONTINUED) DRUGS -- 0.3% $ 8,470 Wyeth (Baa1 Moodys) 6.45% due 02/01/24.............................. $ 8,680 ---------- ELECTRICAL EQUIPMENT -- 0.7% 8,125 PerkinElmer, Inc. (Ba3 Moodys) 8.875% due 01/15/13............................. 9,303 8,230 Rockwell International Corp. (A3 Moodys) 5.20% due 01/15/98.............................. 6,508 +6,000 Rockwell International Corp. (A3 Moodys) 6.70% due 01/15/28.............................. 6,571 ---------- 22,382 ---------- ENERGY & SERVICES -- 1.6% 9,050 Anadarko Petroleum Corp. (Baa1 Moodys) 5.375% due 03/01/07............................. 9,675 7,935 Conoco, Inc. (A3 Moodys) 5.90% due 04/15/04.............................. 8,036 +7,300 El Paso CGP Co. (Caa1 Moodys) 7.625% due 09/01/08............................. 7,017 5,000 Lasmo, Inc. (A1 Moodys) 7.50% due 06/30/06.............................. 5,585 6,800 Occidental Petroleum Corp. (Baa1 Moodys) 7.375% due 11/15/08............................. 7,844 6,000 Pioneer Natural Resources Co. (Ba1 Moodys) 7.20% due 01/15/28.............................. 6,423 250 Pioneer Natural Resources Co. (Ba1 Moodys) 9.625% due 04/01/10............................. 311 2,500 Union Oil Co. of California (Baa2 Moodys) 9.375% due 02/15/11............................. 3,101 ---------- 47,992 ---------- FINANCIAL SERVICES -- 1.4% 9,035 AvalonBay Communities, Inc. (Baa1 Moodys) 8.25% due 07/15/08.............................. 10,624 6,900 Bear Stearns Cos., Inc. (The) (A1 Moodys) 5.70% due 11/15/14.............................. 7,192 6,300 Credit Suisse First Boston USA, Inc. (Aa3 Moodys) 6.125% due 11/15/11............................. 6,859 3,800 Duke Realty LP (Baa1 Moodys) 5.25% due 01/15/10.............................. 3,972 @2,885 ERAC USA Finance Co. (Baa1 Moodys) 8.25% due 05/01/05.............................. 3,112 5,700 ERP Operating LP (Baa1 Moodys) 6.63% due 04/13/05.............................. 6,040 4,150 Goldman Sachs Group, Inc. (The) (Aa3 Moodys) 5.25% due 04/01/13.............................. 4,203 ---------- 42,002 ---------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- FOOD, BEVERAGE & TOBACCO -- 1.2% $ 10,110 ConAgra Foods, Inc. (Baa1 Moodys) 7.50% due 09/15/05.............................. $ 10,984 3,750 ConAgra Foods, Inc. (Baa1 Moodys) 7.00% due 10/01/28.............................. 4,121 7,500 Delhaize America, Inc. (Ba1 Moodys) 8.125% due 04/15/11............................. 8,625 12,100 General Mills, Inc. (Baa2 Moodys) 2.625% due 10/24/06............................. 12,034 ---------- 35,764 ---------- FOREST & PAPER PRODUCTS -- 1.0% 1,895 Champion International Corp. (Baa2 Moodys) 7.20% due 11/01/26.............................. 2,158 3,005 Georgia-Pacific Corp. (Ba3 Moodys) 7.25% due 06/01/28.............................. 2,881 5,600 International Paper Co. (Baa2 Moodys) 6.875% due 04/15/29............................. 5,945 12,100 Potlatch Corp. (Baa3 Moodys) 12.50% due 12/01/09............................. 14,520 4,200 Willamette Industries, Inc. (Baa2 Moodys) 7.85% due 07/01/26.............................. 4,744 ---------- 30,248 ---------- HEALTH SERVICES -- 0.7% 12,000 HCA, Inc. (Ba1 Moodys) 6.95% due 05/01/12.............................. 12,867 6,540 Manor Care, Inc. (Ba1 Moodys) 7.50% due 06/15/06.............................. 7,096 2,110 Tenet Healthcare Corp. (B1 Moodys) 6.375% due 12/01/11............................. 2,026 ---------- 21,989 ---------- INSURANCE -- 0.7% 3,800 ACE INA Holdings, Inc. (A3 Moodys) 8.20% due 08/15/04.............................. 3,948 700 Aetna, Inc. (Baa2 Moodys) 7.375% due 03/01/06............................. 770 5,400 Humana, Inc. (Baa3 Moodys) 7.25% due 08/01/06.............................. 5,900 @3,500 Prudential Insurance Co. of America (A2 Moodys) 6.375% due 07/26/06............................. 3,813 </Table> The accompanying notes are an integral part of this financial statement. 18 - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- CORPORATE NOTES V -- (CONTINUED) INSURANCE -- (CONTINUED) $ 500 Reliastar Financial Corp. (A1 Moodys) 8.00% due 10/30/06.............................. $ 565 5,815 Wellpoint Health Networks, Inc. (Baa1 Moodys) 6.375% due 06/15/06............................. 6,340 ---------- 21,336 ---------- MEDIA & ENTERTAINMENT -- 2.8% 2,780 AT&T Broadband (Baa3 Moodys) 8.375% due 03/15/13............................. 3,401 @2,700 COX Enterprises, Inc. (Baa1 Moodys) 7.875% due 09/15/10............................. 3,198 4,200 COX Radio, Inc. (Baa3 Moodys) 6.375% due 05/15/05............................. 4,418 7,500 CSC Holdings, Inc. (B1 Moodys) 7.625% due 07/15/18............................. 7,875 6,200 Clear Channel Communications, Inc. (Baa3 Moodys) 6.00% due 11/01/06.............................. 6,702 500 Comcast Cable Communications (Baa3 Moodys) 8.50% due 05/01/27.............................. 641 8,665 Continental Cablevision, Inc. (Baa3 Moodys) 8.875% due 09/15/05............................. 9,562 1,000 Continental Cablevision, Inc. (Baa3 Moodys) 9.50% due 08/01/13.............................. 1,155 @5,200 Echostar DBS Corp. (Ba3 Moodys) 5.75% due 10/01/08.............................. 5,259 8,880 Liberty Media Corp. (Baa3 Moodys) 3.50% due 09/25/06.............................. 8,924 7,000 News America Holdings, Inc. (Baa3 Moodys) 7.70% due 10/30/25.............................. 8,153 10,300 Time Warner Entertainment Co. (Baa1 Moodys) 8.375% due 03/15/23............................. 12,763 7,720 Time Warner, Inc. (Baa1 Moodys) 7.25% due 10/15/17.............................. 8,784 5,040 Walt Disney Co. (The) (Baa1 Moodys) 7.30% due 02/08/05.............................. 5,345 ---------- 86,180 ---------- MEDICAL INSTRUMENTS & SUPPLIES -- 0.1% 1,560 Omnicare, Inc. (Ba2 Moodys) 6.125% due 06/01/13............................. 1,564 ---------- RESEARCH & TESTING FACILITIES -- 0.2% 4,285 Quest Diagnostics, Inc. (Baa3 Moodys) 6.75% due 07/12/06.............................. 4,683 ---------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- RETAIL -- 1.0% $ 8,400 Aramark Services, Inc. (Baa3 Moodys) 7.10% due 12/01/06.............................. $ 9,210 8,400 Fred Meyer, Inc. (Baa3 Moodys) 7.375% due 03/01/05............................. 8,899 5,955 Penney (J.C.) Co., Inc. (Ba3 Moodys) 7.65% due 08/15/16.............................. 6,528 4,965 Staples, Inc. (Baa2 Moodys) 7.125% due 08/15/07............................. 5,463 ---------- 30,100 ---------- SOFTWARE & SERVICES -- 0.1% 3,000 Fiserv, Inc. (Baa2 Moodys) 3.00% due 06/27/08.............................. 2,870 ---------- TRANSPORTATION -- 2.1% +250 Boeing Capital Corp. (A3 Moodys) 6.10% due 03/01/11.............................. 270 ##1,300 Delta Airlines, Inc. (B1 Moodys) 10.50% due 04/30/16............................. 1,028 6,300 Delta Airlines, Inc. (Baa2 Moodys) 7.111% due 09/18/11............................. 6,353 4,500 FedEx Corp. (Baa2 Moodys) 6.625% due 02/12/04............................. 4,523 10,920 Ford Motor Co. (Baa1 Moodys) 6.625% due 10/01/28............................. 10,045 3,650 General Dynamics Corp. (A2 Moodys) 4.50% due 08/15/10.............................. 3,731 +8,000 General Motors Acceptance Corp. (Baa1 Moodys) 7.20% due 01/15/11.............................. 8,796 7,900 Norfolk Southern Corp. (Baa1 Moodys) 7.875% due 02/15/04............................. 7,951 16,779 Northrop Grumman Corp. (Baa3 Moodys) 8.625% due 10/15/04............................. 17,676 4,348 U.S. Airways, Inc. (Baa3 Moodys) 6.76% due 04/15/08.............................. 3,797 ---------- 64,170 ---------- U.S. GOVERNMENT AGENCIES -- 1.5% 2,350 Federal Home Loan Bank (Aaa Moodys) 6.241% due 02/20/07............................. 2,499 +7,300 Federal Home Loan Mortgage Association (Aaa Moodys) 3.125% due 08/25/06............................. 7,382 31,300 Federal Home Loan Mortgage Association (Aaa Moodys) 4.50% due 07/15/13.............................. 30,923 46,200 Tennessee Valley Linked Call Strips (Aaa Moodys) 0.00% due 11/01/25.............................. 10,937 ---------- 51,741 ---------- </Table> The accompanying notes are an integral part of this financial statement. 19 HARTFORD BOND HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- CORPORATE NOTES V -- (CONTINUED) UTILITIES -- 5.1% $ +8,800 Allied Waste North America, Inc. (Ba3 Moodys) 9.25% due 09/01/12.............................. $ 9,988 4,800 Browning-Ferris Industries, Inc. (Ba3 Moodys) 6.375% due 01/15/08............................. 4,764 8,530 Carolina Power & Light Co. (A3 Moodys) 5.125% due 09/15/13............................. 8,637 6,080 Carolina Power & Light Co. (A3 Moodys) 6.125% due 09/15/33............................. 6,249 1,750 Cleveland Electric Illuminating Co. (Aaa Moodys) 7.13% due 07/01/07.............................. 1,967 9,960 Commonwealth Edison Co. (A3 Moodys) 4.70% due 04/15/15.............................. 9,697 4,150 Consolidated Edison Co. of New York (A1 Moodys) 5.875% due 04/01/33............................. 4,205 8,225 Consolidated Natural Gas Co. (A3 Moodys) 5.375% due 11/01/06............................. 8,817 5,575 Consumers Energy Co. (Baa3 Moodys) 6.25% due 09/15/06.............................. 6,020 3,875 Detroit Edison Co. (The) (A3 Moodys) 6.125% due 10/01/10............................. 4,251 6,000 Duke Energy Corp. (A3 Moodys) 3.75% due 03/05/08.............................. 6,047 8,600 FPL Group Capital, Inc. (A2 Moodys) 3.25% due 04/11/06.............................. 8,750 @3,950 International Transmission Co. (Baa1 Moodys) 4.45% due 07/15/13.............................. 3,813 1,475 Kansas Gas & Electric Co. (Ba1 Moodys) 6.20% due 01/15/06.............................. 1,558 780 Kansas Gas & Electric Co. (Ba2 Moodys) 8.29% due 03/29/16.............................. 813 8,740 Kinder Morgan, Inc. (Baa2 Moodys) 6.65% due 03/01/05.............................. 9,231 5,000 Northern States Power Co. (A3 Moodys) 2.875% due 08/01/06............................. 5,019 7,750 Northern States Power Co. (A3 Moodys) 8.00% due 08/28/12.............................. 9,449 @4,150 Northwestern Corp. (Not Rated) 7.30% due 12/01/06.............................. 4,249 7,300 PacifiCorp. (A3 Moodys) 5.45% due 09/15/13.............................. 7,574 3,100 PacifiCorp. (A3 Moodys) 6.12% due 01/15/06.............................. 3,328 4,850 Public Service Co. of Colorado (Baa1 Moodys) 4.875% due 03/01/13............................. 4,848 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- UTILITIES -- (CONTINUED) $ 4,000 Public Service Electric & Gas Co. (Aaa Moodys) 7.00% due 09/01/24.............................. $ 4,119 7,300 Public Service Enterprise GP (A3 Moodys) 5.375% due 09/01/13............................. 7,530 11,050 Southern California Edison (Baa2 Moodys) 8.00% due 02/15/07.............................. 12,638 850 Tennessee Gas Pipeline Co. (B1 Moodys) 7.00% due 10/15/28.............................. 808 500 Tennessee Gas Pipeline Co. (B1 Moodys) 7.50% due 04/01/17.............................. 516 @4,150 Texas-New Mexico Power Co. (Baa3 Moodys) 6.125% due 06/01/08............................. 4,176 1,560 Westar Energy, Inc. (Ba1 Moodys) 8.50% due 07/01/22.............................. 1,642 ---------- 160,703 ---------- Total corporate notes............................. $ 800,552 ========== FOREIGN/YANKEE BONDS & NOTES V -- 11.3% BANKS -- 0.9% $ 4,980 Abbey National PLC (A1 Moodys) 6.69% due 10/17/05.............................. $ 5,386 +20,750 Kreditanstalt fuer Wiederaufbau (Aaa Moodys) 2.60% due 03/15/06.............................. 20,779 ---------- 26,165 ---------- CHEMICALS -- 0.1% @4,370 Rhodia S.A. (Caa1 Moodys) 8.875% due 06/01/11............................. 4,020 ---------- COMMUNICATIONS -- 1.7% 10,200 BT Group PLC (Baa1 Moodys) 8.875% due 12/15/30............................. 13,338 8,400 Deutsche Telekom International Finance BV (Baa3 Moodys) 8.25% due 06/15/05.............................. 9,112 4,725 Deutsche Telekom International Finance BV (Baa3 Moodys) 8.75% due 06/15/30.............................. 6,036 @@L3,295 KPNQwest N.V. (Default) 8.125% due 06/01/09....... -- ##L1,765 Marconi Corp., PLC (Default) 10.00% due 10/31/08........................................ 1,853 ##L4,070 Marconi Corp., PLC (Default) 8.00% due 04/30/08... 4,131 1,925 Nortel Networks Corp. (B3 Moodys) 4.25% due 09/01/08.............................. 1,822 2,150 Rogers Cable, Inc. (Ba2 Moodys) 6.25% due 06/15/13.............................. 2,166 </Table> The accompanying notes are an integral part of this financial statement. 20 - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNTI VALUE # - ---------- ---------- FOREIGN/YANKEE BONDS & NOTES V -- (CONTINUED) COMMUNICATIONS -- (CONTINUED) 7,500 TELUS Corp. (Ba1 Moodys) 8.00% due 06/01/11.............................. $ 8,770 4,990 Telefonica Europe BV (A3 Moodys) 7.35% due 09/15/05.............................. 5,415 ---------- 52,643 ---------- ENERGY & SERVICES -- 1.5% 2,130 Burlington Resources Finance Co. (Baa1 Moodys) 6.50% due 12/01/11.............................. 2,379 9,540 Burlington Resources Finance Co. (Baa1 Moodys) 6.68% due 02/15/11.............................. 10,722 3,470 EnCana Corp. (Baa1 Moodys) 6.30% due 11/01/11.............................. 3,836 9,000 EnCana Corp. (Baa1 Moodys) 7.20% due 11/01/31.............................. 10,476 6,000 Pemex Project Funding Master Trust Co. (Baa1 Moodys) 7.875% due 02/01/09............................. 6,774 4,635 Petro-Canada (Baa2 Moodys) 5.35% due 07/15/33.............................. 4,143 6,400 Repsol YPF S.A. (Baa2 Moodys) 7.45% due 07/15/05.............................. 6,881 ---------- 45,211 ---------- FINANCIAL SERVICES -- 0.5% 4,460 Abbey National PLC (A1 Moodys) 6.70% due 06/29/49.............................. 4,931 6,000 Pemex Finance Ltd. (Baa1 Moodys) 9.69% due 08/15/09.............................. 7,128 4,000 UFJ Finance Aruba AEC (Baa1 Moodys) 6.75% due 07/15/13.............................. 4,266 ---------- 16,325 ---------- FOOD, BEVERAGE & TOBACCO -- 0.4% 11,500 Cadbury Schweppes Finance PLC (Baa2 Moodys) 5.00% due 06/26/07.............................. 12,046 ---------- FOREIGN GOVERNMENTS -- 4.2% EUR 55,325 Bundesobligation (Aaa Moodys) 3.50% due 10/10/08.............................. 69,777 +9,200 Mexico Government International Bond (Baa2 Moodys) 4.625% due 10/08/08............................. 9,315 AUD 44,520 Queensland Treasury Corp. (Aaa Moodys) 6.50% due 06/14/05.............................. 33,907 5,285 Republic of Panama (Ba1 Moodys) 9.625% due 02/08/11............................. 6,104 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- FOREIGN GOVERNMENTS -- (CONTINUED) $ 3,875 Republic of Philippines (Ba1 Moodys) 10.625% due 03/16/25............................ $ 4,311 5,230 Russia Government International Bond (Baa3 Moodys) 8.25% due 03/31/30.............................. 5,845 ---------- 129,259 ---------- FOREST & PAPER PRODUCTS -- 0.1% 2,750 Abitibi Consolidated, Inc. (Ba1 Moodys) 8.30% due 08/01/05.............................. 2,910 250 Abitibi-Consolidated, Inc. (Ba1 Moodys) 8.85% due 08/01/30.............................. 270 ---------- 3,180 ---------- MACHINERY -- 0.2% @5,550 Fondo LatinoAmericano De Reservas (Aa2 Moodys) 3.00% due 08/01/06.............................. 5,515 ---------- MEDIA & ENTERTAINMENT -- 0.1% 3,660 Shaw Communications, Inc. (Ba2 Moodys) 8.25% due 04/11/10.............................. 4,145 ---------- METALS, MINERALS & MINING -- 0.7% 7,200 Inco Ltd. (Baa3 Moodys) 7.75% due 05/15/12.............................. 8,399 @4,200 Placer Dome, Inc. (Baa2 Moodys) 6.45% due 10/15/35.............................. 4,296 7,300 Placer Dome, Inc. (Baa2 Moodys) 7.125% due 06/15/07............................. 8,130 ---------- 20,825 ---------- TRANSPORTATION -- 0.9% @10,500 Hutchison Whampoa International Ltd. (A3 Moodys) 6.25% due 01/24/14.............................. 10,662 @15,450 Hutchison Whampoa International Ltd. (A3 Moodys) 7.45% due 11/24/33.............................. 16,092 ---------- 26,754 ---------- Total foreign/yankee bonds & notes................ $ 346,088 ========== MUNICIPAL BONDS V -- 0.5% $ 15,200 Illinois State (Aa3 Moodys) 5.10% due 06/01/33.............................. $ 13,976 ---------- Total municipal bonds............................. $ 13,976 ========== <Caption> SHARES - ---------- PREFERRED STOCKS -- 0.1% CONSUMER NON-DURABLES -- 0.1% @53 Xerox Corp........................................ $ 4,259 ---------- Total preferred stocks............................ $ 4,259 ========== </Table> The accompanying notes are an integral part of this financial statement. 21 HARTFORD BOND HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - ---------- ---------- U.S. TREASURIES & FEDERAL AGENCIES -- 50.0% FEDERAL HOME LOAN MORTGAGE ASSOCIATION -- 1.0% $ 29,818 5.50% due 03/01/33 -- 06/01/33.................... $ 30,193 ---------- FEDERAL NATIONAL MORTGAGE ASSOCIATION -- 20.1% 143,196 5.00% due 04/01/18 -- 07/01/33.................... 144,428 198,207 5.50% due 10/01/32 -- 12/01/33.................... 200,888 206,463 6.00% due 07/01/12 -- 12/01/33.................... 213,767 251 6.30% due 04/01/08................................ 275 48,654 6.50% due 11/01/14 -- 01/01/33.................... 50,901 5,618 7.50% due 10/01/22 -- 09/01/31.................... 6,004 ---------- 616,263 ---------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -- 6.6% 86,688 5.50% due 11/15/32 -- 08/15/33.................... 88,222 24,877 6.00% due 01/15/32 -- 10/15/32.................... 25,881 83,698 6.50% due 02/15/28 -- 06/15/32.................... 88,283 336 7.00% due 06/20/30................................ 357 ---------- 202,743 ---------- U.S. TREASURY BONDS -- 4.6% +123,100 6.25% due 08/15/23................................ 140,310 ---------- U.S. TREASURY NOTES -- 17.7% +139,675 1.875% due 11/30/05............................... 139,937 +1,970 3.125% due 09/15/08............................... 1,969 +93,090 3.25% due 08/15/08................................ 93,657 +87,205 3.375% due 12/15/08............................... 87,798 +580 4.25% due 11/15/13................................ 579 +57,675 4.375% due 05/15/07............................... 61,075 +146,925 5.00% due 02/15/11................................ 157,789 ---------- 542,804 ---------- Total U.S. treasuries & federal agencies.......... $1,532,313 ========== <Caption> SHARES - ---------- WARRANTS -- 0.0% COMMUNICATIONS -- 0.0% *##@@1 Iridium World Communications, Inc................. $ -- ---------- Total warrants.................................... $ -- ========== SHORT-TERM SECURITIES -- 27.2% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 24.5% 750,359 State Street Navigator Securities Lending Prime Portfolio......................... $ 750,359 <Caption> PRINCIPAL AMOUNT - ---------- </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE - ---------- ---------- REPURCHASE AGREEMENTS -- 2.7% $ 82,929 Joint Repurchase Agreement (See Note 2(d)) 0.84% due 01/02/04.................................... 82,929 ---------- Total short-term securities....................... $ 833,288 ========== </Table> <Table> <Caption> MARKET VALUE # ---------- DIVERSIFICATION OF NET ASSETS: Total collateralized mortgage obligations (cost $233,723)........................ 7.6% $ 233,543 Total common stocks (cost $7,719)........ 0.4 13,671 Total convertible bonds (cost $7,441).... 0.3 7,884 Total corporate notes (cost $767,246).... 26.1 800,552 Total foreign/yankee bonds & notes (cost $332,285).............................. 11.3 346,088 Total municipal bonds (cost $15,200)..... 0.5 13,976 Total preferred stocks (cost $2,670)..... 0.1 4,259 Total U.S. treasuries & federal agencies (cost $1,526,969)...................... 50.0 1,532,313 Total warrants (cost $97)................ 0.0 -- Total short-term securities (cost $833,288).............................. 27.2 833,288 ----- ---------- Total investment in securities (total cost $3,726,638) -- including $735,598 of securities loaned (See Note 2(i))... 123.5 3,785,574 Cash, receivables and other assets....... 2.0 62,799 Payable for securities purchased......... (1.0) (30,360) Securities lending collateral payable to brokers (See Note 2(i))................ (24.5) (750,359) Other liabilities........................ (0.0) (543) ----- ---------- Net assets............................... 100.0% $3,067,111 ===== ========== </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 5,000,000 shares authorized; 249,298 shares outstanding........ $ 249 Paid in capital................................. 2,790,919 Accumulated net investment income............... 149,925 Accumulated net realized gain on investments.... 66,843 Unrealized appreciation on investments.......... 58,936 Unrealized appreciation on forward foreign currency contracts (See Note 2(g))@@@......... 4 Unrealized appreciation on other assets and liabilities in foreign currencies............. 235 ---------- Net assets...................................... $3,067,111 ========== </Table> <Table> Class IA Net asset value per share ($2,332,343 / 189,300 shares outstanding) (4,400,000 shares authorized)..................................... $12.32 ====== Class IB Net asset value per share ($734,768 / 59,998 shares outstanding) (600,000 shares authorized)..................................... $12.25 ====== </Table> The accompanying notes are an integral part of this financial statement. 22 - -------------------------------------------------------------------------------- <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 11.7% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). @ Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2003, the market value of these securities amounted to $91,188 or 3.0% of net assets. (See Note 2(m)). ## Illiquid Securities. At December 31, 2003, the market value of these securities amounted to $10,927 or 0.4% of net assets (See Note 2(m)). @@ Due to the presentation of the financial statements in thousands, the number of shares and/or market value round to zero. I All principal amounts are in U.S. dollars unless otherwise indicated. AUD -- Australian Dollar EUR -- Euro V The bond ratings are unaudited. L Debt securities are in default due to bankruptcy. </Table> @@@FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING AT DECEMBER 31, 2003 <Table> <Caption> UNREALIZED CONTRACT DELIVERY APPRECIATION DESCRIPTION MARKET VALUE AMOUNT DATE (DEPRECIATION) - ----------- ------------ -------- -------- -------------- British Pound (Sell) $716 $720 1/2/2004 $4 == </Table> The accompanying notes are an integral part of this financial statement. 23 HARTFORD CAPITAL APPRECIATION HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - ------------ ----------- COMMON STOCKS -- 95.8% BANKS -- 10.6% +4,411 Bank One Corp. ................................... $ 201,088 5,762 Citigroup, Inc. .................................. 279,683 1,941 Countrywide Credit Industries, Inc. .............. 147,240 2,417 Federal Home Loan Mortgage Association............ 140,977 2,350 Fleet Boston Financial Corp. ..................... 102,578 1,000 Golden West Financial Corp. ...................... 103,190 -2,000 UBS AG............................................ 136,883 ----------- 1,111,639 ----------- BUSINESS SERVICES -- 1.0% 2,200 Manpower, Inc. ................................... 103,576 ----------- CHEMICALS -- 0.8% -1,311 Shin-Etsu Chemical Co., Ltd. ..................... 53,839 -7,358 Sumitomo Chemical Co., Ltd. ...................... 30,358 ----------- 84,197 ----------- COMMUNICATIONS -- 9.6% +3,935 America Movil S.A. de C.V., ADR................... 107,594 *14,692 MTN Group Ltd. ................................... 62,619 9,572 Motorola, Inc. ................................... 134,671 *+1,430 NTL, Inc. ........................................ 99,736 *16,500 Nextel Communications, Inc., Class A.............. 462,987 *19,565 Nortel Networks Corp. ............................ 82,758 +-893 Telenor ASA....................................... 5,854 5,050 Telkom S.A., Ltd. ................................ 52,544 ----------- 1,008,763 ----------- COMPUTERS & OFFICE EQUIPMENT -- 5.4% 2,513 3M Co. ........................................... 213,680 *5,000 Cisco Systems, Inc. .............................. 121,450 -16,913 HON HAI Precision Industry........................ 66,443 1,746 International Business Machines Corp. ............ 161,829 ----------- 563,402 ----------- CONSUMER DURABLES -- 1.0% *+10,000 Corning, Inc. .................................... 104,300 ----------- CONSUMER NON-DURABLES -- 6.7% +1,500 Cardinal Health, Inc. ............................ 91,740 4,450 McKesson Corp. ................................... 143,109 *4,430 Medco Health Solutions, Inc. ..................... 150,566 +10,255 Tyco International Ltd. .......................... 271,752 *+3,541 Xerox Corp. ...................................... 48,859 ----------- 706,026 ----------- DRUGS -- 3.6% *3,622 Biovail Corp. .................................... 77,841 *2,272 Forest Laboratories, Inc. ........................ 140,391 *2,804 IVAX Corp. ....................................... 66,948 *2,624 King Pharmaceuticals, Inc. ....................... 40,042 1,155 Merck & Co., Inc. ................................ 53,366 ----------- 378,588 ----------- ELECTRONICS -- 3.1% 1,149 Emerson Electric Co. ............................. 74,424 -652 Samsung Electronics............................... 246,880 ----------- 321,304 ----------- </Table> <Table> <Caption> MARKET SHARES VALUE # - ------------ ----------- ENERGY & SERVICES -- 9.9% 1,668 Anadarko Petroleum Corp. ......................... $ 85,069 1,856 Burlington Resources, Inc. ....................... 102,763 @-o3,371 CONSOL Energy, Inc., PIPE......................... 78,585 +2,122 China Petroleum & Chemical Corp., H Shares, ADR... 94,242 +3,500 Halliburton Co. .................................. 91,000 1,330 Peabody Energy Corp. ............................. 55,478 5,029 Petroleo Brasileiro S.A., ADR..................... 134,062 +9,500 Sasol Ltd., ADR................................... 137,655 *491 Transocean, Inc. ................................. 11,789 1,600 Valero Energy Corp. .............................. 74,135 6,033 XTO Energy, Inc. ................................. 170,733 ----------- 1,035,511 ----------- FINANCIAL SERVICES -- 1.1% -3,885 Amvescap PLC...................................... 28,396 -297 Orix Corp. ....................................... 24,633 * @-o2,186 Spirit Finance Corp. ............................. 21,857 7,585 Standard Bank Group Ltd. ......................... 44,520 ----------- 119,406 ----------- FOOD, BEVERAGE & TOBACCO -- 2.8% 2,854 Altria Group, Inc. ............................... 155,326 4,208 Bunge Ltd. ....................................... 138,531 ----------- 293,857 ----------- FOREST & PAPER PRODUCTS -- 3.3% 3,021 Kimberly-Clark Corp. ............................. 178,499 *8,924 Smurfit-Stone Container Corp. .................... 165,726 ----------- 344,225 ----------- HEALTH SERVICES -- 1.4% 3,444 HCA, Inc. ........................................ 147,959 ----------- INSURANCE -- 5.4% 6,500 Ace Ltd. ......................................... 269,230 548 Ambac Financial Group, Inc. ...................... 38,040 374 American International Group, Inc. ............... 24,803 1,853 Marsh & McLennan Cos., Inc. ...................... 88,721 +3,664 St. Paul Cos., Inc. (The)......................... 145,289 ----------- 566,083 ----------- MACHINERY -- 1.9% 2,272 Deere (John) & Co. ............................... 147,813 +1,942 Pall Corp. ....................................... 52,098 ----------- 199,911 ----------- MEDIA & ENTERTAINMENT -- 4.2% *3,605 Comcast Corp., Special Class A ................... 112,774 *+3,053 Interactive Data Corp. ........................... 103,588 *5,000 Liberty Media Corp., Class A...................... 59,450 *9,196 Time Warner, Inc. ................................ 165,440 ----------- 441,252 ----------- MEDICAL INSTRUMENTS & SUPPLIES -- 1.3% 2,235 Guidant Corp. .................................... 134,535 ----------- </Table> The accompanying notes are an integral part of this financial statement. 24 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - ------------ ----------- COMMON STOCKS -- (CONTINUED) METALS, MINERALS & MINING -- 8.8% +2,800 Alcoa, Inc. ...................................... $ 106,400 +555 AngloGold Ltd., ADR............................... 25,900 +2,049 Companhia Vale do Rio Doce ADR.................... 119,881 2,238 Engelhard Corp. .................................. 67,016 +3,439 Falconbridge Ltd. ................................ 83,462 621 Freeport-McMoRan Copper & Gold, Inc., Class B..... 26,180 *+1,552 International Steel Group, Inc. .................. 60,434 -6,185 Rio Tinto PLC..................................... 170,222 +4,351 Teck Cominco Ltd. ................................ 73,833 2,680 United States Steel Corp. ........................ 93,836 -5,183 WMC Ltd. ......................................... 25,699 *-17,247 WMC Resources Ltd. ............................... 73,430 ----------- 926,293 ----------- REAL ESTATE INVESTMENT TRUST -- 0.6% 1,705 iStar Financial, Inc. ............................ 66,332 ----------- RETAIL -- 4.7% +7,724 Gap, Inc. (The)................................... 179,267 *+1,830 Neiman Marcus Group, Inc. ........................ 98,227 4,543 Penney (J.C.) Co., Inc. .......................... 119,380 4,128 TJX Cos., Inc. (The).............................. 91,011 ----------- 487,885 ----------- SOFTWARE & SERVICES -- 1.8% *2,257 Computer Sciences Corp. .......................... 99,809 *5,360 VeriSign, Inc. ................................... 87,375 ----------- 187,184 ----------- TRANSPORTATION -- 4.2% 2,176 CSX Corp. ........................................ 78,213 2,343 Honeywell International, Inc. .................... 78,316 3,264 Sabre Holdings Corp. ............................. 70,461 -6,182 Toyota Motor Corp. ............................... 211,444 ----------- 438,434 ----------- UTILITIES -- 2.6% 900 FPL Group, Inc. .................................. 58,878 93 Norsk Hydro ADR................................... 5,760 +2,898 TXU Corp. ........................................ 68,741 4,909 Waste Management, Inc. ........................... 145,306 ----------- 278,685 ----------- Total common stocks............................... $10,049,347 =========== WARRANTS -- 0.3% COMMUNICATIONS -- 0.3% *4,983 Icici Bank Ltd. .................................. $ 32,289 ----------- Total warrants.................................... $ 32,289 =========== </Table> <Table> <Caption> MARKET SHARES VALUE # - ------------ ----------- SHORT-TERM SECURITIES -- 8.0% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 4.7% 1 Federated Prime Cash Obligation Fund.............. $ 1 12 Federated Prime Obligation Fund................... 12 @@-- Provident Temp Fund............................... -- 144,661 Provident TempCash Fund........................... 144,661 10,372 Reserve Primary Fund.............................. 10,372 11 Scudder Money Market Fund......................... 11 341,460 UBS Private Money Market Fund..................... 341,460 2 UBS Select Money Market Fund...................... 2 ----------- 496,519 ----------- <Caption> PRINCIPAL AMOUNT - ------------ REPURCHASE AGREEMENTS -- 3.3% $ 341,239 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... 341,239 ----------- Total short-term securities....................... $ 837,758 =========== </Table> <Table> <Caption> DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $8,001,893)..... 95.8% $ 10,049,347 Total warrants (cost $20,287)............. 0.3 32,289 Total short-term securities (cost $837,758)............................... 8.0 837,758 ----- ------------ Total investment in securities (total cost $8,859,938) -- including $478,374 of securities loaned (See Note 2(i))....... 104.1 10,919,394 Cash, receivables and other assets........ 1.5 160,247 Payable for securities purchased.......... (0.9) (85,848) Payable for Fund shares redeemed.......... (0.0) (4,259) Securities lending collateral payable to brokers (See Note 2(i))................. (4.7) (496,519) Other liabilities......................... (0.0) (867) ----- ------------ Net assets................................ 100.0% $ 10,492,148 ===== ============ </Table> <Table> <Caption> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 5,000,000 shares authorized; 233,750 shares outstanding.... $ 234 Paid in capital.................................... 9,727,732 Accumulated net investment income.................. 2,152 Accumulated net realized loss on investments....... (1,297,379) Unrealized appreciation on investments............. 2,059,456 Unrealized depreciation on forward foreign currency contracts (See Note 2(g)) @@@.................... (81) Unrealized appreciation on other assets and liabilities in foreign currencies................ 34 ----------- Net assets......................................... $10,492,148 =========== </Table> <Table> <Caption> Class IA Net asset value per share ($8,912,749 / 198,466 shares outstanding) (4,250,000 shares authorized)........................................ $44.91 ====== Class IB Net asset value per share ($1,579,399 / 35,284 shares outstanding) (750,000 shares authorized)........... $44.76 ====== </Table> The accompanying notes are an integral part of this financial statement. 25 HARTFORD CAPITAL APPRECIATION HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 21.1% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). @ Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2003, the market value of these securities amounted to $100,442 or 1.0% of net assets (See Note 2(m)). - Security valued in good faith at fair value by, or under the direction of, the Funds' Board of Directors. The aggregate value of these securities as of December 31, 2003 was $1,174,523 which represents 11.2% of total net assets. o Private placement. PIPE = Private Investment Public Equity @@ Due to the presentation of the financial statements in thousands, the number of shares and/or Market Value round to zero. </Table> @@@FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING AT DECEMBER 31, 2003 <Table> <Caption> UNREALIZED CONTRACT DELIVERY APPRECIATION DESCRIPTION MARKET VALUE AMOUNT DATE (DEPRECIATION) - ----------- ------------ -------- -------- -------------- Australian Dollar (Buy) $ 884 $ 882 1/6/2004 $ 2 Australian Dollar (Buy) 907 895 1/2/2004 12 British Pound (Buy) 934 925 1/2/2004 9 British Pound (Buy) 4,043 4,019 1/5/2004 24 Canadian Dollars (Buy) 177 177 1/6/2004 -- Canadian Dollars (Buy) 2,435 2,433 1/5/2004 2 Canadian Dollars (Buy) 2,774 2,739 1/2/2004 35 Japanese Yen (Buy) 3,389 3,395 1/7/2004 (6) Japanese Yen (Buy) 4,720 4,728 1/5/2004 (8) Japanese Yen (Buy) 6,743 6,758 1/6/2004 (15) Norwegian Krone (Sell) 2,572 2,532 1/2/2004 (40) Norwegian Krone (Sell) 5,665 5,591 1/5/2004 (74) Norwegian Krone (Sell) 8,778 8,691 1/6/2004 (87) South African Rands (Buy) 98 97 1/6/2004 1 South African Rands (Buy) 234 229 1/5/2004 5 South African Rands (Buy) 279 281 1/7/2004 (2) South African Rands (Buy) 333 337 1/8/2004 (4) South African Rands (Buy) 1,967 1,902 1/2/2004 65 ---- $(81) ==== </Table> The accompanying notes are an integral part of this financial statement. 26 HARTFORD DIVIDEND AND GROWTH HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- COMMON STOCKS -- 95.6% BANKS -- 9.6% 1,611 Bank One Corp. ................................... $ 73,450 41 Bank of America Corp. ............................ 3,298 2,887 Citigroup, Inc. .................................. 140,128 587 Comerica, Inc. ................................... 32,890 1,033 Federal Home Loan Mortgage Association............ 60,262 +421 HSBC Holdings PLC, ADR............................ 33,162 1,361 Synovus Financial Corp. .......................... 39,349 592 U.S. Bancorp...................................... 17,621 1,394 Wachovia Corp. ................................... 64,928 ---------- 465,088 ---------- BUSINESS SERVICES -- 0.6% 325 Omnicom Group, Inc. .............................. 28,391 ---------- CHEMICALS -- 4.4% 751 Avery Dennison Corp. ............................. 42,043 758 Dow Chemical Co. (The)............................ 31,489 2,159 du Pont (E.I.) de Nemours & Co. .................. 99,073 979 Rohm & Haas Co. .................................. 41,809 ---------- 214,414 ---------- COMMUNICATIONS -- 5.8% +1,820 AT&T Corp. ....................................... 36,938 2,220 BellSouth Corp. .................................. 62,826 3,018 Motorola, Inc. ................................... 42,467 991 Sony Corp., ADR................................... 34,358 3,003 Verizon Communications, Inc. ..................... 105,336 ---------- 281,925 ---------- COMPUTERS & OFFICE EQUIPMENT -- 4.5% *1,421 Apple Computer, Inc. ............................. 30,356 1,976 Hewlett-Packard Co. .............................. 45,380 1,017 International Business Machines Corp. ............ 94,209 1,225 Pitney Bowes, Inc. ............................... 49,739 ---------- 219,684 ---------- CONSUMER DURABLES -- 0.5% 519 Grainger (W.W.), Inc. ............................ 24,586 ---------- CONSUMER NON-DURABLES -- 3.7% 693 Cardinal Health, Inc. ............................ 42,378 1,157 Gillette Co. (The)................................ 42,504 1,514 Mattel, Inc. ..................................... 29,177 570 McKesson Corp. ................................... 18,318 *+3,485 Xerox Corp. ...................................... 48,092 ---------- 180,469 ---------- DRUGS -- 7.2% 1,635 Abbott Laboratories............................... 76,177 +653 AstraZeneca PLC, ADR.............................. 31,597 +634 Aventis S.A., ADR................................. 41,996 737 Eli Lilly & Co. .................................. 51,826 1,504 Pfizer, Inc. ..................................... 53,152 3,521 Schering-Plough Corp. ............................ 61,225 712 Wyeth............................................. 30,207 ---------- 346,180 ---------- </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- ELECTRONICS -- 2.2% 642 Emerson Electric Co. ............................. $ 41,595 691 General Electric Co. ............................. 21,394 1,409 Texas Instruments, Inc. .......................... 41,399 ---------- 104,388 ---------- ENERGY & SERVICES -- 11.5% 494 Anadarko Petroleum Corp. ......................... 25,219 +1,799 BP Amoco PLC, ADR................................. 88,786 954 ChevronTexaco Corp. .............................. 82,451 231 Conoco, Inc. ..................................... 15,169 1,650 EnCana Corp. ..................................... 65,062 2,824 Exxon Mobil Corp. ................................ 115,774 1,112 Royal Dutch Petroleum Co., N.V., NY Reg Shares.... 58,268 +746 Schlumberger Ltd. ................................ 40,838 710 TotalFinaElf S.A., ADR............................ 65,654 ---------- 557,221 ---------- FINANCIAL SERVICES -- 2.7% 968 Franklin Resources, Inc. ......................... 50,378 723 Merrill Lynch & Co., Inc. ........................ 42,427 659 Morgan Stanley Dean Witter & Co. ................. 38,119 ---------- 130,924 ---------- FOOD, BEVERAGE & TOBACCO -- 4.5% +1,162 Altria Group, Inc. ............................... 63,220 805 General Mills, Inc. .............................. 36,476 1,032 Kraft Foods, Inc. ................................ 33,261 886 PepsiCo, Inc. .................................... 41,319 1,880 Sara Lee Corp. ................................... 40,819 ---------- 215,095 ---------- FOREST & PAPER PRODUCTS -- 5.0% 1,604 Abitibi-Consolidated, Inc. ....................... 13,012 454 Bowater, Inc. .................................... 21,011 819 International Paper Co. .......................... 35,290 820 Kimberly-Clark Corp. ............................. 48,442 638 Temple-Inland, Inc. .............................. 39,952 1,296 Weyerhaeuser Co. ................................. 82,963 ---------- 240,670 ---------- INSURANCE -- 6.1% 576 Ace Ltd. ......................................... 23,874 1,117 American International Group, Inc. ............... 74,055 760 MBIA, Inc. ....................................... 45,009 804 Marsh & McLennan Cos., Inc. ...................... 38,499 +1,009 St. Paul Cos., Inc. (The)......................... 40,019 963 XL Capital Ltd., Class A.......................... 74,642 ---------- 296,098 ---------- MACHINERY -- 2.4% 710 Caterpillar, Inc. ................................ 58,919 998 Parker-Hannifin Corp. ............................ 59,393 ---------- 118,312 ---------- MEDIA & ENTERTAINMENT -- 3.6% *1,024 Comcast Corp., Class A ........................... 33,647 *897 Comcast Corp., Special Class A ................... 28,061 </Table> The accompanying notes are an integral part of this financial statement. 27 HARTFORD DIVIDEND AND GROWTH HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- COMMON STOCKS -- (CONTINUED) MEDIA & ENTERTAINMENT -- (CONTINUED) 539 Gannett Co., Inc. ................................ $ 48,084 379 Harrah's Entertainment, Inc. ..................... 18,863 *2,635 Time Warner, Inc. ................................ 47,396 ---------- 176,051 ---------- MEDICAL INSTRUMENTS & SUPPLIES -- 1.3% 1,324 Baxter International, Inc. ....................... 40,405 591 Becton, Dickinson & Co. .......................... 24,330 ---------- 64,735 ---------- METALS, MINERALS & MINING -- 2.9% 741 Alcan, Inc. ...................................... 34,799 2,160 Alcoa, Inc. ...................................... 82,076 322 Fortune Brands, Inc. ............................. 22,984 ---------- 139,859 ---------- RETAIL -- 1.9% 2,135 McDonald's Corp. ................................. 53,012 1,672 TJX Cos., Inc. (The).............................. 36,861 ---------- 89,873 ---------- SOFTWARE & SERVICES -- 1.0% 1,722 Microsoft Corp. .................................. 47,424 ---------- TRANSPORTATION -- 8.2% 454 Boeing Co. (The).................................. 19,140 870 CP Railway Ltd. .................................. 24,489 1,803 CSX Corp. ........................................ 64,811 +1,152 Delta Airlines, Inc. ............................. 13,610 517 FedEx Corp. ...................................... 34,904 727 General Dynamics Corp. ........................... 65,750 +743 General Motors Corp. ............................. 39,666 1,169 Honeywell International, Inc. .................... 39,093 317 USF Corp. ........................................ 10,845 1,114 Union Pacific Corp. .............................. 77,387 ---------- 389,695 ---------- UTILITIES -- 6.0% 418 Dominion Resources, Inc. ......................... 26,681 999 Exelon Corp. ..................................... 66,268 782 FPL Group, Inc. .................................. 51,126 1,039 Pinnacle West Capital Corp. ...................... 41,597 936 Progress Energy, Inc. ............................ 42,341 1,979 Waste Management, Inc. ........................... 58,567 ---------- 286,580 ---------- Total common stocks............................... $4,617,662 ========== </Table> <Table> <Caption> MARKET SHARES VALUE # - -------- ---------- SHORT-TERM SECURITIES -- 7.7% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 3.3% 159,683 Boston Global Investment Trust........... $ 159,683 ---------- <Caption> PRINCIPAL AMOUNT - --------- REPURCHASE AGREEMENTS -- 4.4% Joint Repurchase Agreement (See Note $210,163 2(d)) 0.833% due 01/02/04................ 210,163 ---------- Total short-term securities.............. $ 369,846 ========== </Table> <Table> DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $4,075,513)...... 95.6% $4,617,662 Total short-term securities (cost $369,846)................................ 7.7 369,846 ----- ---------- Total investment in securities (total cost $4,445,359) -- including $156,503 of securities loaned (See Note 2(i)).................................... 103.3 4,987,508 Cash, receivables and other assets......... 0.5 25,653 Payable for securities purchased........... (0.5) (22,876) Payable for Fund shares redeemed........... (0.0) (163) Securities lending collateral payable to brokers (See Note 2(i)).................. (3.3) (159,683) Other liabilities.......................... (0.0) (245) ----- ---------- Net assets................................. 100.0% $4,830,194 ===== ========== </Table> <Table> <Caption> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 4,000,000 shares authorized; 257,489 shares outstanding..................................... $ 257 Paid in capital................................... 4,418,129 Accumulated net investment income................. 1,538 Accumulated net realized loss on investments...... (131,879) Unrealized appreciation on investments............ 542,149 ---------- Net assets........................................ $4,830,194 ========== </Table> <Table> Class IA Net asset value per share ($3,927,415 / 209,270 shares outstanding) (3,500,000 shares authorized)....................................... $18.77 ====== Class IB Net asset value per share ($902,779 / 48,219 shares outstanding) (500,000 shares authorized).......... $18.72 ====== </Table> <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 10.2% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2 (i)). </Table> The accompanying notes are an integral part of this financial statement. 28 HARTFORD INTERNATIONAL OPPORTUNITIES HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- 98.0% AUSTRALIA -- 0.5% -981 Rinker Group Ltd. (Construction).................. $ 4,853 -------- AUSTRIA -- 0.6% *-413 Telekom Austria AG (Communications)............... 5,101 -------- BRAZIL -- 1.8% 144 Empresa Brasileira de Aeronautica S.A., ADR (Transportation)................................. 5,055 176 Petroleo Brasileiro S.A., ADR (Energy & Services).............................. 5,146 238 Unibanco GDR (Banks).............................. 5,928 -------- 16,129 -------- CANADA -- 5.6% 133 Canadian National Railway Co. (Transportation).... 8,423 *304 Inco Ltd. (Metals, Minerals & Mining)............. 12,151 +361 National Bank of Canada (Banks)................... 12,041 +156 Royal Bank of Canada (Banks)...................... 7,456 +181 Talisman Energy, Inc. (Energy & Services)......... 10,315 -------- 50,386 -------- CHINA -- 0.6% -13,200 China Telecom Corp., Ltd. (Communications)........ 5,449 -------- FINLAND -- 0.8% -422 Nokia Oyj (Agriculture & Fishing)................. 7,218 -------- FRANCE -- 14.7% -323 AXA (Financial Services).......................... 6,953 -193 Aventis S.A. (Drugs).............................. 12,804 -154 BNP Paribas S.A. (Banks).......................... 9,755 +-186 Carrefour S.A. (Retail)........................... 10,222 +151 Essilor International S.A. (Retail)............... 7,819 +-387 France Telecom S.A. (Communications).............. 11,052 +-220 Lafarge S.A. (Construction)....................... 19,710 +-100 Pinault Printemps Redoute S.A. (Retail)........... 9,645 -165 Schneider Electric S.A. (Electrical Equipment).... 10,784 -223 Societe Television Francaise (Media & Entertainment)................................... 7,801 -139 TotalFinaElf S.A., B shares (Energy & Services)... 25,733 -------- 132,278 -------- GERMANY -- 4.3% 184 BMW AG (Transportation)........................... 8,511 +-142 Metro AG (Retail)................................. 6,271 -54 SAP AG (Software & Services)...................... 8,958 115 Schering AG (Drugs)............................... 5,799 -146 Veba AG (Utilities)............................... 9,516 -------- 39,055 -------- IRELAND -- 0.6% *+218 Elan Corp., ADR (Drugs)........................... 1,503 *513 Ryanair Holdings PLC (Transportation)............. 4,267 -------- 5,770 -------- </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- -------- ITALY -- 3.7% +-680 ENI S.p.A. (Energy & Services).................... $ 12,891 +908 Fiat S.p.A. (Consumer Durables)................... 6,967 +-2,539 UniCredito Italiano S.p.A. (Financial Services)... 13,725 -------- 33,583 -------- JAPAN -- 15.3% +-783 Asahi Glass Co., Ltd. (Construction).............. 6,446 +-1,058 Bank of Yokohama Ltd. (The) (Banks)............... 4,936 -384 Dai Nippon Printing Co., Ltd. (Business Services).............................. 5,424 -207 Fuji Photo Film Co., Ltd. (Consumer Non- Durables)........................................ 6,762 -180 Honda Motor Co., Ltd. (Transportation)............ 8,104 -1 Japan Tobacco, Inc. (Food, Beverage & Tobacco).... 4,423 -22 Keyence Corp. (Machinery)......................... 4,690 -465 Matsushita Electric Industrial Co. (Electronics).................................... 6,471 -8 NTT DoCoMo, Inc. (Communications)................. 18,200 -59 Nintendo Co., Ltd. (Consumer Non-Durables)........ 5,507 -38 Nomura Research Institut (Business Services)...... 3,767 -186 Nomura Securities (Insurance)..................... 3,156 -30 Obic Co., Ltd. (Software & Services).............. 6,054 -236 Olympus Optical Co., Ltd. (Medical Instruments & Supplies)........................................ 5,150 -73 Orix Corp. (Financial Services)................... 6,088 -54 Rohm Co., Ltd. (Electronics)...................... 6,324 *-5 SKY Perfect Communications, Inc. (Communications)................................. 6,305 -204 Shin-Etsu Chemical Co., Ltd. (Chemicals).......... 8,375 +-252 Shionogi & Co., Ltd. (Drugs)...................... 4,705 -697 Sompo Japan Insurance, Inc. (Insurance)........... 5,752 +-74 Sony Corp. (Electronics).......................... 2,554 122 Sony Corp., ADR (Electronics)..................... 4,226 +-751 Sumitomo Trust & Banking Co., Ltd. (The) (Banks).......................................... 4,484 -------- 137,903 -------- MALAYSIA -- 1.8% -2,500 Berjaya Sports Toto BHD (Software & Services)..... 2,670 -2,045 Malayan Banking (Banks)........................... 5,194 -3,183 Public Bank BHD (Financial Services).............. 2,592 -2,031 Resort World Berhad (Hotels & Gaming)............. 5,390 -------- 15,846 -------- MEXICO -- 0.9% 298 America Movil S.A. de C.V., ADR (Communications)................................. 8,156 -------- NETHERLANDS -- 2.5% -291 Akzo Nobel N.V. (Chemicals)....................... 11,148 *-1,145 Koninklijke KPN N.V. (Communications)............. 8,858 -88 TNT Post Group N.V. (Consumer Services)........... 2,063 -------- 22,069 -------- </Table> The accompanying notes are an integral part of this financial statement. 29 HARTFORD INTERNATIONAL OPPORTUNITIES HLS FUND STATEMENT OF NET ASSETS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- -------- COMMON STOCKS -- (CONTINUED) RUSSIA -- 1.0% 55 JSC Mining & Smelting Co., ADR (Metals, Minerals & Mining).......................................... $ 3,564 44 Sibnef ADR (Energy & Services).................... 1,243 +142 Surgutneftegaz ADR (Energy & Services)............ 4,135 -------- 8,942 -------- SOUTH AFRICA -- 0.5% -106 Anglo American Platinum Corp., Ltd. (Metals, Minerals & Mining)............................... 4,598 -------- SOUTH KOREA -- 4.4% *-957 Kia Motors Corp. (Transportation)................. 8,741 *-294 Kookmin Bank (Banks).............................. 11,146 *-142 LG Electronics, Inc. (Electronics)................ 6,963 *201 SK Corp. (Energy & Services)...................... 4,631 -47 SK Telecom Co., Ltd. (Communications)............. 7,879 -------- 39,360 -------- SWEDEN -- 1.3% -1,560 Nordea AB (Banks)................................. 11,718 -------- SWITZERLAND -- 8.4% +2,526 ABB Ltd. (Construction)........................... 12,804 -76 Nestle S.A. (Food, Beverage & Tobacco)............ 18,856 -175 Roche Holdings AG (Drugs)......................... 17,721 +-241 STMicroelectronics N.V. (Electronics)............. 6,552 -294 UBS AG (Banks).................................... 20,115 -------- 76,048 -------- TAIWAN -- 1.5% @328 China Steel Corp., GDR (Metals, Minerals & Mining).......................................... 5,456 *-9,178 United Microelectronics Corp. (Electronics)....... 7,861 -------- 13,317 -------- TURKEY -- 0.4% 602,883 Akbank TAS (Banks)................................ 3,154 -------- UNITED KINGDOM -- 24.8% -286 AstraZeneca PLC (Drugs)........................... 13,741 -445 Aviva PLC (Financial Services).................... 3,931 -2,632 BP PLC (Energy & Services)........................ 21,400 *-1,696 British Airways PLC (Transportation).............. 7,067 *-524 British Sky Broadcasting PLC (Media & Entertainment)................................... 6,599 -1,178 Capita Group PLC (Business Services).............. 5,145 -2,373 Compass Group PLC (Food, Beverage & Tobacco).............................. 16,181 *9,516 Corus Group PLC (Metals, Minerals & Mining)....... 5,110 -604 GlaxoSmithKline PLC (Drugs)....................... 13,930 -318 HBOS PLC (Banks).................................. 4,127 -784 HSBC Holdings PLC (Banks)......................... 12,344 -1,701 Hilton Group PLC (Hotels & Gaming)................ 6,845 -330 Imperial Tobacco Group PLC (Food, Beverage & Tobacco)......................................... 6,503 -1,136 Kingfisher PLC (Retail)........................... 5,687 -1,304 National Grid Transco PLC (Energy & Services)..... 9,382 -648 Pearson PLC (Media & Entertainment)............... 7,216 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- -------- UNITED KINGDOM -- (CONTINUED) -420 Reckitt Benckiser PLC (Consumer Non-Durables)..... $ 9,497 -416 Rio Tinto PLC (Metals, Minerals & Mining)......... 11,455 -641 Royal Bank of Scotland Group PLC (Banks).......... 18,918 -10,248 Vodafone Group PLC (Communications)............... 25,463 -1,317 WWP Group PLC (Business Services)................. 12,927 -------- 223,468 -------- UNITED STATES OF AMERICA -- 2.0% *280 Accenture Ltd. (Business Services)................ 7,377 370 Tyco International Ltd. (Consumer Non-Durables)... 9,794 -------- 17,171 -------- Total common stocks............................... $881,572 ======== SHORT-TERM SECURITIES -- 11.8% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 10.0% 89,576 State Street Navigator Securities Lending Prime Portfolio........................................ $ 89,576 -------- <Caption> PRINCIPAL AMOUNT - --------- REPURCHASE AGREEMENT -- 1.8% $16,632 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04..................................... 16,632 -------- Total short-term securities....................... $106,208 ======== </Table> <Table> DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $738,995)............... 98.0% $881,572 Total short-term securities (cost $106,208)....... 11.8 106,208 ----- -------- Total investment in securities (total cost $845,203) -- including $85,210 of securities loaned (See Note 2(i)).......................... 109.8 987,780 Cash, receivables and other assets................ 2.7 24,654 Payable for securities purchased.................. (2.5) (22,294) Payable for Fund shares redeemed.................. (0.0) (405) Securities lending collateral payable to brokers (See Note 2(i))................................. (10.0) (89,576) Other liabilities................................. (0.0) (153) ----- -------- Net assets........................................ 100.0% $900,006 ===== ======== </Table> <Table> <Caption> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 2,625,000 shares authorized; 89,031 shares outstanding..................................... $ 89 Paid in capital................................... 1,113,599 Accumulated net investment income................. 1,085 Accumulated net realized loss on investments...... (357,332) Unrealized appreciation on investments............ 142,577 Unrealized appreciation on forward foreign currency contracts (See Note 2(g)) @@@.......... 22 Unrealized depreciation on other assets and liabilities in foreign currencies............... (34) ---------- Net assets........................................ $ 900,006 ========== </Table> The accompanying notes are an integral part of this financial statement. 30 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET VALUE # ------- Class IA Net asset value per share ($823,760 / 81,478 shares outstanding) (2,000,000 shares authorized)................................... $10.11 ====== Class IB Net asset value per share ($76,246 / 7,554 shares outstanding) (625,000 shares authorized)................................... $10.09 ====== </Table> <Table> DIVERSIFICATION BY INDUSTRY Agriculture & Fishing............................. 0.8% $ 7,218 Banks............................................. 14.6 131,316 Business Services................................. 3.8 34,640 Chemicals......................................... 2.2 19,523 Communications.................................... 11.2 100,689 Construction...................................... 4.9 43,813 Consumer Durables................................. 0.8 6,967 Consumer Non-Durables............................. 3.5 31,560 Consumer Services................................. 0.2 2,063 Drugs............................................. 7.8 70,203 Electrical Equipment.............................. 1.2 10,784 Electronics....................................... 4.1 36,725 Energy & Services................................. 10.5 94,876 Financial Services................................ 3.7 33,289 Food, Beverage & Tobacco.......................... 5.1 45,963 Hotels & Gaming................................... 1.4 12,235 Insurance......................................... 1.0 8,908 Machinery......................................... 0.5 4,690 Media & Entertainment............................. 2.4 21,616 Medical Instruments & Supplies.................... 0.6 5,150 Metals, Minerals & Mining......................... 4.7 42,334 Retail............................................ 4.4 39,644 Software & Services............................... 2.0 17,682 Transportation.................................... 5.6 50,168 Utilities......................................... 1.0 9,516 ---- -------- Total common stocks........................... 98.0% $881,572 ==== ======== </Table> <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 96.0% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). @ Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2003, the market value of these securities amounted to $5,456 or 0.6% of net assets (See Note 2(m)). - Security valued in good faith at fair value by, or under the direction of, the Funds' Board of Directors. The aggregate value of these securities as of December 31, 2003 was $710,543, which represents 78.9% of total net assets. </Table> @@@FORWARD FOREIGN CURRENCY CONTRACTS OUTSTANDING AT DECEMBER 31, 2003 <Table> <Caption> UNREALIZED CONTRACT DELIVERY APPRECIATION DESCRIPTION MARKET VALUE AMOUNT DATE (DEPRECIATION) - ----------- ------------ -------- -------- -------------- British Pound (Buy) $ 749 $ 742 1/2/2004 $ 7 British Pound (Buy) 4,048 4,023 1/5/2004 25 Canadian Dollars (Buy) 298 297 1/6/2004 1 Canadian Dollars (Buy) 1,632 1,630 1/5/2004 2 Canadian Dollars (Buy) 4,643 4,585 1/2/2004 58 EURO (Buy) 1,818 1,811 1/5/2004 7 EURO (Buy) 3,556 3,540 1/6/2004 16 EURO (Sell) 245 241 1/2/2004 (4) EURO (Sell) 313 309 1/2/2004 (4) EURO (Sell) 352 348 1/2/2004 (4) EURO (Sell) 478 474 1/5/2004 (4) EURO (Sell) 684 677 1/2/2004 (7) EURO (Sell) 758 754 1/6/2004 (4) EURO (Sell) 9,438 9,339 1/2/2004 (99) Japanese Yen (Sell) 1,161 1,163 1/7/2004 2 South African Rands (Buy) 870 842 1/2/2004 28 Swiss Franc (Buy) 570 568 1/6/2004 2 ---- $ 22 ==== </Table> The accompanying notes are an integral part of this financial statement. 31 HARTFORD MONEY MARKET HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - --------- ---------- COMMERCIAL PAPER -- 35.0% $@50,000 Bradford & Bingley PLC 1.15% due 01/07/05.............................. $ 50,000 55,000 Cafco 1.08% due 02/18/04.............................. 54,921 36,500 Diageo Capital PLC 0.00% due 03/18/04.............................. 36,411 42,500 du Pont (E.I.) de Nemours & Co. 0.00% due 02/10/04.............................. 42,450 50,000 Household Finance Corp. 1.08% due 01/06/04.............................. 49,993 25,000 Nationwide Building Society 0.00% due 01/07/04.............................. 24,995 45,391 Old Line Funding Corp. 0.00% due 01/23/04.............................. 45,360 55,000 Preferred Receivable Funding 0.00% due 02/04/04.............................. 54,944 55,000 Province of Quebec 1.07% due 01/28/04.............................. 54,956 42,500 Sara Lee 1.15% due 02/06/04.............................. 42,451 55,000 Sheffield Receivable Corp. 0.00% due 01/26/04.............................. 54,958 50,000 Spintab 0.00% due 02/03/04.............................. 49,950 44,507 Svenska Handelsbanken 0.00% due 02/17/04.............................. 44,444 42,500 Toyota Motor Credit Corp. 1.06% due 01/22/04.............................. 42,474 ---------- 648,307 ---------- Total commercial paper............................ $ 648,307 ========== CORPORATE NOTES -- 58.7% $ 40,000 American Express Credit 1.261% due 12/27/04............................. $ 40,065 8,500 American Express Credit 1.274% due 12/16/04............................. 8,513 42,500 American General Finance 1.34% due 08/06/04.............................. 42,554 17,000 Bank One Corp. 1.45% due 02/20/04.............................. 17,007 25,000 Bear Stearns Co., Inc. 1.319% due 02/12/04............................. 25,004 8,500 Bear Stearns Co., Inc. 1.423% due 06/01/04............................. 8,510 8,500 Bear Stearns Co., Inc. 1.56% due 09/21/04.............................. 8,525 @25,000 Cargill, Inc. 1.16% due 01/14/04.............................. 25,000 43,000 Caterpillar, Inc. 1.323% due 08/02/04............................. 43,051 42,000 Citigroup Global 1.29% due 06/17/04.............................. 42,030 </Table> <Table> <Caption> PRINCIPAL MARKET AMOUNT VALUE # - --------- ---------- $ 13,320 Diageo Capital PLC 6.625% due 06/24/04............................. $ 13,660 50,000 Federal Home Loan Bank 1.50% due 12/24/04.............................. 50,000 30,000 Federal Home Loan Mortgage Association 1.25% due 08/27/04.............................. 30,000 50,000 Federal Home Loan Mortgage Association 1.40% due 11/03/04.............................. 50,000 50,000 Federal National Mortgage Association 1.43% due 11/15/04.............................. 50,000 50,000 Fleet Financial Group 1.41% due 02/19/04.............................. 50,014 22,000 General Electric Capital Corp. 1.141% due 01/28/04............................. 22,001 39,000 General Electric Capital Corp. 6.875% due 09/15/04............................. 40,528 50,000 Goldman Sachs Group LP 1.11% due 10/25/04.............................. 50,000 @37,500 Honda Motor Corp. 1.12% due 10/22/04.............................. 37,500 51,000 IBM Corp. 1.295% due 09/27/04............................. 51,067 48,750 Key Bank N.A. 1.298% due 03/01/04............................. 48,763 34,230 Lehman Brother Holdings, Inc. 6.625% due 04/01/04............................. 34,681 20,000 Merrill Lynch & Co., Inc. 1.37% due 08/09/04.............................. 20,029 17,000 Merrill Lynch & Co., Inc. 1.42% due 06/11/04.............................. 17,023 55,000 Morgan (J.P.) Chase & Co. 1.285% due 02/05/04............................. 55,008 54,000 Morgan Stanley Group 1.33% due 03/19/04.............................. 54,023 @30,000 Nationwide Building Society 1.14% due 07/23/04.............................. 30,000 @50,000 Northern Rock PLC 1.15% due 01/16/04.............................. 50,000 42,000 Washington Mutual Bank 1.159% due 07/29/04............................. 41,997 30,000 Wells Fargo & Co. 1.103% due 01/14/04............................. 30,000 ---------- 1,086,553 ---------- Total corporate notes............................. $1,086,553 ========== SHORT-TERM SECURITIES -- 3.3% REPURCHASE AGREEMENTS -- 3.3% $ 61,338 Joint Repurchase Agreement (See Note 2(d)) 0.84% due 01/02/04.................................... $ 61,338 ---------- Total short-term securities....................... $ 61,338 ========== </Table> The accompanying notes are an integral part of this financial statement. 32 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET VALUE # ---------- DIVERSIFICATION OF NET ASSETS: Total commercial paper (cost $648,307)............ 35.0% $ 648,307 Total corporate notes (cost $1,086,553)........... 58.7 1,086,553 Total repurchase agreements (cost $61,338)........ 3.3 61,338 ----- ---------- Total investment in securities (total cost $1,796,198)..................................... 97.0 1,796,198 Cash, receivables and other assets................ 3.0 55,266 Dividends payable................................. (0.0) (1,005) Other liabilities................................. (0.0) (90) ----- ---------- Net assets........................................ 100.0% $1,850,369 ===== ========== </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 7,000,000 shares authorized; 1,850,369 shares outstanding... $ 1,850 Paid in capital..................................... 1,848,519 ---------- Net assets.......................................... $1,850,369 ========== </Table> <Table> Class IA Net asset value per share ($1,609,439 / 1,609,439 shares outstanding) (6,000,000 shares authorized)... $1.00 ===== Class IB Net asset value per share ($240,930 / 240,930 shares outstanding) (1,000,000 shares authorized).......... $1.00 ===== </Table> <Table> # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. @ Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2003, the market value of these securities amounted to $192,500 or 10.4% of net assets. (See Note 2(m)). </Table> The accompanying notes are an integral part of this financial statement. 33 HARTFORD SMALL COMPANY HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- COMMON STOCKS -- 97.7% APPAREL & TEXTILE -- 0.9% 389 K-Swiss, Inc. .................................... $ 9,353 BANKS -- 1.6% 349 Amcore Financial, Inc. ........................... 9,439 455 First Niagara Financial Group, Inc. .............. 6,786 ---------- 16,225 ---------- BUSINESS SERVICES -- 5.3% *1,131 DiamondCluster International, Inc. ............... 11,533 315 Gevity HR, Inc. .................................. 6,999 *+367 LECG Corp. ....................................... 8,398 *771 MPS Group, Inc. .................................. 7,212 *573 Navigant Consulting, Inc. ........................ 10,797 *574 Overland Storage, Inc. ........................... 10,783 ---------- 55,722 ---------- COMMUNICATIONS -- 8.7% *2,105 American Tower Corp., Class A..................... 22,780 *2,180 Crown Castle International Corp. ................. 24,047 *450 Plantronics, Inc. ................................ 14,696 *404 Polycom, Inc. .................................... 7,890 *+6,825 Sirius Satellite Radio, Inc. ..................... 21,567 ---------- 90,980 ---------- COMPUTERS & OFFICE EQUIPMENT -- 2.4% *566 Insight Enterprises, Inc. ........................ 10,648 *863 Scientific Games Corp., Class A................... 14,684 ---------- 25,332 ---------- CONSTRUCTION -- 2.8% 282 MDC Holdings, Inc. ............................... 18,171 *323 Washington Group International, Inc. ............. 10,983 ---------- 29,154 ---------- CONSUMER DURABLES -- 0.9% *509 Genesis Microchip, Inc. .......................... 9,191 ---------- DRUGS -- 4.8% *607 Abgenix, Inc. .................................... 7,562 *995 Alkermes, Inc. ................................... 13,432 *408 AtheroGenics, Inc. ............................... 6,101 *438 Medicines Co. (The)............................... 12,898 *+334 NPS Pharmaceuticals, Inc. ........................ 10,276 ---------- 50,269 ---------- EDUCATION -- 1.5% *221 University of Phoenix Online...................... 15,247 ---------- ELECTRICAL EQUIPMENT -- 1.5% -5,734 Techtronic Industries Co. ........................ 15,995 ---------- ELECTRONICS -- 13.4% *772 ASE Test Ltd. .................................... 11,555 *1,005 Aeroflex, Inc. ................................... 11,752 *359 Artisan Components, Inc. ......................... 7,361 *1,397 ChipPAC, Inc. .................................... 10,605 *+447 FuelCell Energy, Inc. ............................ 5,805 *1,525 MEMC Electronic Materials, Inc. .................. 14,668 </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- ELECTRONICS -- (CONTINUED) *341 Microsemi Corp. .................................. $ 8,372 *265 Moog, Inc. ....................................... 13,096 *2,413 ON Semiconductor Corp. ........................... 15,565 *396 Pericom Semiconductor Corp. ...................... 4,217 *788 Pixelworks, Inc. ................................. 8,700 *695 Quantum Fuel Systems Technologies Worldwide, Inc. ........................................... 5,591 *325 Semtech Corp. .................................... 7,392 *345 Wilson Greatbatch Technologies, Inc. ............. 14,584 ---------- 139,263 ---------- ENERGY & SERVICES -- 5.0% 550 Arch Coal, Inc. .................................. 17,134 329 Cabot Oil & Gas Corp. ............................ 9,651 278 Patina Oil & Gas Corp. ........................... 13,596 *78 Universal Tech.................................... 2,331 *494 Whiting Petroleum Corp. .......................... 9,092 ---------- 51,804 ---------- FINANCIAL SERVICES -- 1.3% *188 Affiliated Managers Group, Inc. .................. 13,068 ---------- FOOD, BEVERAGE & TOBACCO -- 0.7% *401 Peet's Coffee & Tea, Inc. ........................ 6,983 ---------- FOREST & PAPER PRODUCTS -- 1.1% *1,252 SunOpta, Inc. .................................... 11,557 ---------- HEALTH SERVICES -- 4.3% *218 AmSurg Corp. ..................................... 8,264 *2,245 Beverly Enterprises, Inc. ........................ 19,289 *298 Genesis Healthcare Corp. ......................... 6,784 *345 Odyssey HealthCare, Inc. ......................... 10,109 ---------- 44,446 ---------- HOTELS & GAMING -- 1.0% *+362 Wynn Resorts Ltd. ................................ 10,134 ---------- INSURANCE -- 5.7% *330 Arch Capital Group Ltd. .......................... 13,164 *979 HealthExtras, Inc. ............................... 13,122 343 Platinum Underwriters Holdings Ltd. .............. 10,286 *281 ProAssurance Corp. ............................... 9,048 *1090 USI Holdings Corp. ............................... 14,219 ---------- 59,839 ---------- MACHINERY -- 1.1% *675 Asyst Technologies, Inc. ......................... 11,712 ---------- MEDIA & ENTERTAINMENT -- 3.7% *610 Cumulus Media, Inc. .............................. 13,416 *1,169 Hollywood Entertainment Corp. .................... 16,075 *358 Lin TV Corp. ..................................... 9,227 ---------- 38,718 ---------- MEDICAL INSTRUMENTS & SUPPLIES -- 4.8% *411 Abaxis, Inc. ..................................... 7,441 *552 Merit Medical Systems, Inc. ...................... 12,280 *293 Orthofix International N.V. ...................... 14,357 </Table> The accompanying notes are an integral part of this financial statement. 34 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ---------- COMMON STOCKS -- (CONTINUED) MEDICAL INSTRUMENTS & SUPPLIES -- (CONTINUED) *+207 Respironics, Inc. ................................ $ 9,320 *193 Zoll Medical Corp. ............................... 6,831 ---------- 50,229 ---------- RESEARCH & TESTING FACILITIES -- 2.0% *+245 CV Therapeutics, Inc. ............................ 3,588 *412 Ciphergen Biosystems, Inc. ....................... 4,630 *629 Exelixis, Inc. ................................... 4,453 *269 Kosan Biosciences, Inc. .......................... 2,655 *226 Telik, Inc. ...................................... 5,191 ---------- 20,517 ---------- RETAIL -- 4.2% *422 AC Moore Arts & Crafts, Inc. ..................... 8,124 *209 Dick's Sporting Goods, Inc. ...................... 10,178 266 Fred's, Inc. ..................................... 8,249 *318 Rare Hospitality International, Inc. ............. 7,767 *+304 Sharper Image Corp. .............................. 9,939 ---------- 44,257 ---------- SOFTWARE & SERVICES -- 10.9% *726 Agile Software Corp. ............................. 7,187 *902 BISYS Group, Inc. (The)........................... 13,416 *237 Cognos, Inc. ..................................... 7,263 *605 Embarcadero Technologies, Inc. ................... 9,654 *696 Networks Associates, Inc. ........................ 10,475 *1,186 Red Hat, Inc. .................................... 22,263 *315 Safenet, Inc. .................................... 9,703 *1,798 Sapient Corp. .................................... 10,067 *794 SkillSoft PLC, ADR................................ 6,871 *1,186 Tumbleweed Communications Corp. .................. 9,938 *766 webMethods, Inc. ................................. 7,007 ---------- 113,844 ---------- TRANSPORTATION -- 8.1% *+1,093 AMR Corp. ........................................ 14,156 310 Arkansas Best Corp. .............................. 9,724 *421 Forward Air Corp. ................................ 11,575 *344 OMI Corp. ........................................ 3,074 *308 Old Dominion Freight Line......................... 10,486 *325 Quality Distribution, Inc. ....................... 6,354 *422 Sirva, Inc. ...................................... 8,243 *+552 Yellow Roadway Corp. ............................. 19,970 ---------- 83,582 ---------- Total common stocks............................... $1,017,421 ========== SHORT-TERM SECURITIES -- 11.0% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 7.3% 76,071 Boston Global Investment Trust.................... $ 76,071 ---------- <Caption> PRINCIPAL MARKET AMOUNT VALUE # - --------- ---------- REPURCHASE AGREEMENTS -- 3.7% $ 38,584 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... $ 38,584 ---------- Total short-term securities....................... $ 114,655 ========== </Table> <Table> DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $847,542)........ 97.7% $1,017,421 Total short-term securities (cost $114,655)................................ 11.0 114,655 ----- ---------- Total investment in securities (total cost $962,197) -- including $73,502 of securities loaned (See Note 2(i))........ 108.7 1,132,076 Cash, receivables and other assets......... 0.9 8,885 Payable for securities purchased........... (0.6) (5,793) Payable for Fund shares redeemed........... (1.7) (17,300) Securities lending collateral payable to brokers (See Note 2(i)).................. (7.3) (76,071) Other liabilities.......................... (0.0) (58) ----- ---------- Net assets................................. 100.0% $1,041,739 ===== ========== </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 1,500,000 shares authorized; 72,036 shares outstanding..................................... $ 72 Paid in capital................................... 1,145,393 Accumulated net investment loss................... (1) Accumulated net realized loss on investments...... (273,604) Unrealized appreciation on investments............ 169,879 ---------- Net assets........................................ $1,041,739 ========== </Table> <Table> Class IA Net asset value per share ($851,283 / 58,765 shares outstanding) (1,125,000 shares authorized)........ $14.49 ====== Class IB Net asset value per share ($190,456 / 13,272 shares outstanding) (375,000 shares authorized).......... $14.35 ====== </Table> <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 5.8% of total net assets as of December 31, 2003. # See Note 2(b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2(i)). - Security valued in good faith at fair value by, or under the direction of, the Funds' Board of Directors. The aggregate value of these securities as of December 31, 2003 was $15,995, which represents 1.5% of total net assets. </Table> The accompanying notes are an integral part of this financial statement. 35 HARTFORD STOCK HLS FUND STATEMENT OF NET ASSETS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ----------- COMMON STOCKS -- 99.6% BANKS -- 13.0% 1,614 American Express Co. ............................. $ 77,838 2,471 Bank One Corp. ................................... 112,662 1,610 Bank of America Corp. ............................ 129,516 4,932 Citigroup, Inc. .................................. 239,404 737 Federal National Mortgage Association............. 55,289 +911 HSBC Holdings PLC, ADR............................ 71,788 1,117 KeyCorp. ......................................... 32,756 1,255 State Street Corp. ............................... 65,340 1,457 U.S. Bancorp...................................... 43,378 516 Wachovia Corp. ................................... 24,054 ----------- 852,025 ----------- BUSINESS SERVICES -- 1.0% *2,503 Accenture Ltd. ................................... 65,871 ----------- CHEMICALS -- 1.6% 1,099 Dow Chemical Co. (The)............................ 45,681 1,362 du Pont (E.I.) de Nemours & Co. .................. 62,493 ----------- 108,174 ----------- COMMUNICATIONS -- 0.7% 3,433 Motorola, Inc. ................................... 48,295 ----------- COMPUTERS & OFFICE EQUIPMENT -- 8.0% 676 3M Co. ........................................... 57,446 *5,942 Cisco Systems, Inc. .............................. 144,341 *3,326 EMC Corp. ........................................ 42,965 5,112 Hewlett-Packard Co. .............................. 117,431 1,798 International Business Machines Corp. ............ 166,648 ----------- 528,831 ----------- CONSUMER DURABLES -- 0.6% 1,438 Masco Corp. ...................................... 39,427 ----------- CONSUMER NON-DURABLES -- 2.9% 477 Cardinal Health, Inc. ............................ 29,198 2,371 Gillette Co. (The)................................ 87,083 743 Procter & Gamble Co. (The)........................ 74,221 ----------- 190,502 ----------- DRUGS -- 11.4% 1,902 Abbott Laboratories............................... 88,638 *1,320 Amgen, Inc. ...................................... 81,564 1,966 Eli Lilly & Co. .................................. 138,269 *943 Genzyme Corp. .................................... 46,528 947 Merck & Co., Inc. ................................ 43,765 7,768 Pfizer, Inc. ..................................... 274,456 1,865 Wyeth............................................. 79,173 ----------- 752,393 ----------- ELECTRONICS -- 7.0% 7,476 General Electric Co. ............................. 231,613 5,678 Intel Corp. ...................................... 182,819 1,467 Texas Instruments, Inc. .......................... 43,106 ----------- 457,538 ----------- </Table> <Table> <Caption> MARKET SHARES VALUE # - --------- ----------- ENERGY & SERVICES -- 5.9% 970 ChevronTexaco Corp. .............................. $ 83,808 5,384 Exxon Mobil Corp. ................................ 220,748 1,478 Schlumberger Ltd. ................................ 80,871 ----------- 385,427 ----------- FINANCIAL SERVICES -- 3.0% 695 Franklin Resources, Inc. ......................... 36,192 1,689 Merrill Lynch & Co., Inc. ........................ 99,072 1,114 Morgan Stanley Dean Witter & Co. ................. 64,490 ----------- 199,754 ----------- FOOD, BEVERAGE & TOBACCO -- 4.6% 2,603 Coca-Cola Co. (The)............................... 132,077 1,421 General Mills, Inc. .............................. 64,362 2,344 PepsiCo, Inc. .................................... 109,277 ----------- 305,716 ----------- FOREST & PAPER PRODUCTS -- 1.5% 1,575 International Paper Co. .......................... 67,877 499 Weyerhaeuser Co. ................................. 31,923 ----------- 99,800 ----------- HEALTH SERVICES -- 0.6% 891 HCA, Inc. ........................................ 38,290 ----------- HOTELS & GAMING -- 0.3% 455 Marriott International, Inc., Class A............. 20,998 ----------- INSURANCE -- 4.7% 2,726 American International Group, Inc. ............... 180,699 1,646 Marsh & McLennan Cos., Inc. ...................... 78,803 3,059 Travelers Property Casualty Corp. -- Class B...... 51,913 ----------- 311,415 ----------- MACHINERY -- 1.9% *1,572 Applied Materials, Inc. .......................... 35,289 1,090 Caterpillar, Inc. ................................ 90,475 ----------- 125,764 ----------- MEDIA & ENTERTAINMENT -- 7.2% *2,310 Comcast Corp. .................................... 75,926 +5,997 Liberty Media Corp., Class A...................... 71,307 *10,434 Time Warner, Inc. ................................ 187,711 2,026 Viacom, Inc., Class B............................. 89,901 +1,994 Walt Disney Co. (The)............................. 46,529 ----------- 471,374 ----------- MEDICAL INSTRUMENTS & SUPPLIES -- 1.8% 1,067 Johnson & Johnson................................. 55,111 1,351 Medtronic, Inc. .................................. 65,687 ----------- 120,798 ----------- METALS, MINERALS & MINING -- 2.1% 1,457 Alcoa, Inc. ...................................... 55,362 985 Illinois Tool Works, Inc. ........................ 82,609 ----------- 137,971 ----------- </Table> The accompanying notes are an integral part of this financial statement. 36 - -------------------------------------------------------------------------------- <Table> <Caption> MARKET SHARES VALUE # - --------- ----------- COMMON STOCKS -- (CONTINUED) RETAIL -- 5.5% *2,233 Costco Wholesale Corp. ........................... $ 83,030 +3,672 Gap, Inc. (The)................................... 85,234 3,460 Home Depot, Inc. (The)............................ 122,802 *308 Kohl's Corp. ..................................... 13,828 1,551 Target Corp. ..................................... 59,551 ----------- 364,445 ----------- RUBBER & PLASTICS PRODUCTS -- 1.2% 1,110 NIKE, Inc., Class B............................... 75,956 ----------- SOFTWARE & SERVICES -- 7.5% *1,442 Computer Sciences Corp. .......................... 63,797 1,519 First Data Corp. ................................. 62,432 9,531 Microsoft Corp. .................................. 262,482 *3,490 Oracle Corp. ..................................... 46,073 1,455 SAP AG, ADR....................................... 60,453 ----------- 495,237 ----------- TRANSPORTATION -- 4.8% 848 CSX Corp. ........................................ 30,474 1,122 FedEx Corp. ...................................... 75,755 938 Lockheed Martin Corp. ............................ 48,203 701 Northrop Grumman Corp. ........................... 67,040 947 United Technologies Corp. ........................ 89,728 ----------- 311,200 ----------- UTILITIES -- 0.8% 1,594 Waste Management, Inc. ........................... 47,171 ----------- Total common stocks............................... $ 6,554,372 =========== SHORT-TERM SECURITIES -- 0.9% INVESTMENT COMPANIES HELD AS COLLATERAL ON LOANED SECURITIES -- 0.5% 33,265 Boston Global Investment Trust.................... $ 33,265 ----------- <Caption> PRINCIPAL AMOUNT - --------- REPURCHASE AGREEMENTS -- 0.4% $ 24,812 Joint Repurchase Agreement (See Note 2(d)) 0.833% due 01/02/04.................................... 24,812 ----------- Total short-term securities....................... $ 58,077 =========== </Table> <Table> <Caption> MARKET VALUE # ----------- DIVERSIFICATION OF NET ASSETS: Total common stocks (cost $6,005,730)...... 99.6% $ 6,554,372 Total short-term securities (cost $58,077)................................. 0.9 58,077 ----- ----------- Total investment in securities (total cost $6,063,807) -- including $32,628 of securities loaned (See Note 2(i))........ 100.5 6,612,449 Cash, receivables and other assets......... 0.2 8,928 Payable for Fund shares redeemed........... (0.2) (10,130) Securities lending collateral payable to brokers (See Note 2(i)).................. (0.5) (33,265) Other liabilities.......................... (0.0) (328) ----- ----------- Net assets................................. 100.0% $ 6,577,654 ===== =========== </Table> <Table> SUMMARY OF NET ASSETS: Capital stock, par value 0.001 per share; 4,000,000 shares authorized; 148,275 shares outstanding.... $ 148 Paid in capital.................................... 7,057,787 Accumulated net investment income.................. 2,302 Accumulated net realized loss on investments....... (1,031,225) Unrealized appreciation on investments............. 548,642 ----------- Net assets......................................... $ 6,577,654 =========== </Table> <Table> Class IA Net asset value per share ($6,014,675 / 135,564 shares outstanding) (3,000,000 shares authorized)........................................ $44.37 ====== Class IB Net asset value per share ($562,979 / 12,711 shares outstanding) (1,000,000 shares authorized)......... $44.29 ====== </Table> <Table> (+) Note: Percentage of Investments as shown is the ratio of the total market value to total net assets. Market Value of investments in foreign securities represents 2.0% of total net assets as of December 31, 2003. # See Note 2 (b) of accompanying Notes to Financial Statements regarding valuation of securities. * Non-income producing during the period. + All or a portion of this security was on loan as of December 31, 2003 (See Note 2 (i)). </Table> The accompanying notes are an integral part of this financial statement. 37 HARTFORD HLS MUTUAL FUNDS STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD HARTFORD HARTFORD CAPITAL ADVISERS BOND APPRECIATION HLS FUND HLS FUND HLS FUND ---------- --------- ------------ INVESTMENT INCOME: Dividends................................................. $ 114,696 $ 200 $ 99,648 Interest.................................................. 165,102 122,023 18,754 Securities lending........................................ 1,013 959 582 Less: Foreign tax withheld................................ (116) -- (2,754) ---------- -------- ---------- Total investment income (loss).......................... 280,695 123,182 116,230 ---------- -------- ---------- EXPENSES: Investment advisory fees.................................. 45,100 7,690 34,597 Administrative services fees.............................. 20,812 5,802 15,869 Accounting services....................................... 2,081 580 1,587 Board of Directors fees................................... 124 35 92 Custodian fees, gross..................................... 72 71 1,583 Distribution Fees -- Class IB............................. 2,320 1,433 2,398 Other expenses............................................ 1,658 480 1,205 ---------- -------- ---------- Total expenses (before offsets)......................... 72,167 16,091 57,331 ---------- -------- ---------- Expenses paid indirectly (See Note 3(d)).................. 47 13 36 Custodian fees offset (See Note 3(d))..................... 4 29 20 ---------- -------- ---------- Total expenses net...................................... 72,116 16,049 57,275 ---------- -------- ---------- Net investment income (loss).............................. 208,579 107,133 58,955 ---------- -------- ---------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain (loss) on securities.................... (442,960) 120,269 316,746 Net realized gain (loss) on forward foreign currency contracts............................................... -- 399 908 Net realized gain (loss) on foreign currency transactions............................................ 24 (3,574) (3,884) Net realized gain (loss) on option contracts.............. -- (901) -- Net unrealized appreciation (depreciation) on securities.............................................. 2,029,822 (8,107) 2,610,764 Net unrealized appreciation (depreciation) on forward foreign currency contracts.............................. -- 4 183 Net unrealized appreciation (depreciation) on translation of other assets and liabilities in foreign currencies... -- (276) (22) ---------- -------- ---------- Net realized and unrealized gain (loss) on investments.... 1,586,886 107,814 2,924,695 ---------- -------- ---------- Net increase (decrease) in net assets resulting from operations.............................................. $1,795,465 $214,947 $2,983,650 ========== ======== ========== </Table> The accompanying notes are an integral part of these financial statements. 38 - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD HARTFORD HARTFORD DIVIDEND AND INTERNATIONAL HARTFORD SMALL HARTFORD GROWTH OPPORTUNITIES MONEY MARKET COMPANY STOCK HLS FUND HLS FUND HLS FUND HLS FUND HLS FUND ------------ ------------- ------------ --------- ---------- $ 83,908 $ 15,570 $ 64 $ 1,182 $ 94,219 2,185 195 27,354 528 1,404 358 477 -- 355 66 (1,028) (2,171) -- -- (96) -------- -------- ------- -------- ---------- 85,423 14,071 27,418 2,065 95,593 -------- -------- ------- -------- ---------- 16,673 3,861 5,527 3,949 14,744 7,434 1,468 4,422 1,505 11,445 743 147 442 151 1,145 43 9 28 9 68 21 523 16 37 29 1,417 111 675 286 1,010 574 120 329 118 893 -------- -------- ------- -------- ---------- 26,905 6,239 11,439 6,055 29,334 -------- -------- ------- -------- ---------- 17 3 10 3 26 1 2 -- 10 1 -------- -------- ------- -------- ---------- 26,887 6,234 11,429 6,042 29,307 -------- -------- ------- -------- ---------- 58,536 7,837 15,989 (3,977) 66,286 -------- -------- ------- -------- ---------- (70,530) 32,879 -- 130,413 (507,440) -- (143) -- 40 -- 23 (631) -- (85) 7 -- -- -- -- -- 966,352 186,703 -- 205,037 1,817,955 -- 45 -- -- -- -- (100) -- (6) -- -------- -------- ------- -------- ---------- 895,845 218,753 -- 335,399 1,310,522 -------- -------- ------- -------- ---------- $954,381 $226,590 $15,989 $331,422 $1,376,808 ======== ======== ======= ======== ========== </Table> 39 HARTFORD HLS MUTUAL FUNDS STATEMENTS OF CHANGES IN NET ASSETS (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD ADVISERS HLS FUND HARTFORD BOND HLS FUND --------------------------- --------------------------- FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2003 2002 2003 2002 ------------ ------------ ------------ ------------ OPERATIONS: Net investment income (loss).............................. $ 208,579 $ 253,749 $ 107,133 $ 114,109 Net realized gain (loss) on investments................... (442,936) (154,706) 116,193 23,979 Net unrealized appreciation (depreciation) of investments............................................. 2,029,822 (1,855,706) (8,379) 71,252 ----------- ----------- ---------- ---------- Net increase (decrease) in net assets resulting from operations.............................................. 1,795,465 (1,756,663) 214,947 209,340 ----------- ----------- ---------- ---------- DISTRIBUTIONS TO SHAREHOLDERS: From net investment income Class IA................................................ (233,680) (310,849) (97,398) (71,918) Class IB................................................ (23,061) (17,707) (23,627) (9,028) From net realized gain on investments Class IA................................................ -- -- (11,273) (21,013) Class IB................................................ -- -- (2,800) (2,682) ----------- ----------- ---------- ---------- Total distributions..................................... (256,741) (328,556) (135,098) (104,641) ----------- ----------- ---------- ---------- CAPITAL SHARE TRANSACTIONS: Class IA................................................ (284,304) (609,326) 120,521 505,821 Class IB................................................ 446,195 258,251 338,611 215,658 ----------- ----------- ---------- ---------- Net increase (decrease) from capital share transactions... 161,891 (351,075) 459,132 721,479 ----------- ----------- ---------- ---------- Net increase (decrease) in net assets..................... 1,700,615 (2,436,294) 538,981 826,178 NET ASSETS: Beginning of period....................................... 9,921,475 12,357,769 2,538,130 1,701,952 ----------- ----------- ---------- ---------- End of period............................................. $11,622,090 $ 9,921,475 $3,067,111 $2,528,130 =========== =========== ========== ========== Accumulated undistributed net investment income (loss)...... $ 104,776 $ 146,740 $ 149,925 $ 121,024 =========== =========== ========== ========== </Table> The accompanying notes are an integral part of these financial statements. 40 - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD CAPITAL HARTFORD DIVIDEND AND GROWTH HARTFORD INTERNATIONAL OPPORTUNITIES APPRECIATION HLS FUND HLS FUND HLS FUND --------------------------- ----------------------------- ------------------------------------- FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2003 2002 2003 2002 2003 2002 ------------ ------------ ------------- ------------- ----------------- ----------------- $ 58,955 $ 49,150 $ 58,536 $ 50,483 $ 7,837 $ 10,309 313,770 (1,321,148) (70,507) (24,164) 32,105 (121,588) 2,610,925 (568,703) 966,352 (548,276) 186,648 (19,596) ----------- ----------- ---------- ---------- -------- --------- 2,983,650 (1,840,701) 954,381 (521,957) 226,590 (130,875) ----------- ----------- ---------- ---------- -------- --------- (44,255) (43,001) (50,473) (44,489) (6,583) (15,535) (5,412) (2,845) (10,033) (4,542) (477) (431) -- -- (19,745) (156,583) -- -- -- -- (3,536) (11,349) -- -- ----------- ----------- ---------- ---------- -------- --------- (49,667) (45,846) (83,787) (216,963) (7,060) (15,966) ----------- ----------- ---------- ---------- -------- --------- 119,749 (712,297) 391,568 306,692 (27,267) (151,869) 609,544 299,875 429,740 225,899 34,199 8,043 ----------- ----------- ---------- ---------- -------- --------- 729,293 (412,422) 821,308 532,591 6,932 (143,826) ----------- ----------- ---------- ---------- -------- --------- 3,663,276 (2,298,969) 1,691,902 (206,329) 226,462 (290,667) 6,828,872 9,127,841 3,138,292 3,344,621 673,544 964,211 ----------- ----------- ---------- ---------- -------- --------- $10,492,148 $ 6,828,872 $4,830,194 $3,138,292 $900,006 $ 673,544 =========== =========== ========== ========== ======== ========= $ 2,152 $ 1,931 $ 1,538 $ 3,506 $ 1,085 $ 1,082 =========== =========== ========== ========== ======== ========= </Table> 41 HARTFORD HLS MUTUAL FUNDS STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD MONEY MARKET HLS FUND --------------------------------- FOR THE FOR THE YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, 2003 2002 ------------ ------------ OPERATIONS: Net investment income (loss).............................. $ 15,989 $ 32,127 Net realized gain (loss) on investments................... -- 100 Net unrealized appreciation (depreciation) on investments............................................. -- -- ---------- ---------- Net increase (decrease) in net assets resulting from operations.............................................. 15,989 32,227 ---------- ---------- DISTRIBUTIONS TO SHAREHOLDERS: From net investment income Class IA................................................ (14,648) (29,732) Class IB................................................ (1,341) (2,395) From net realized gain on investments Class IA................................................ -- (93) Class IB................................................ -- (7) ---------- ---------- Total distributions..................................... (15,989) (32,227) ---------- ---------- CAPITAL SHARE TRANSACTIONS: Class IA................................................ (710,017) 451,936 Class IB................................................ (20,984) 109,785 ---------- ---------- Net increase (decrease) from capital share transactions... (731,001) 561,721 ---------- ---------- Net increase (decrease) in net assets..................... (731,001) 561,721 NET ASSETS: Beginning of period....................................... 2,581,370 2,019,649 ---------- ---------- End of period............................................. $1,850,369 $2,581,370 ========== ========== Accumulated net investment income (loss).................... $ -- $ -- ========== ========== </Table> The accompanying notes are an integral part of these financial statements. 42 - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD SMALL COMPANY HLS FUND HARTFORD STOCK HLS FUND ------------------------------- --------------------------- FOR THE FOR THE FOR THE FOR THE YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2003 2002 2003 2002 -------------- -------------- ------------ ------------ $ (3,977) $ (2,276) $ 66,286 $ 63,506 130,368 (144,424) (507,433) (235,322) 205,031 (111,484) 1,817,955 (1,765,512) ---------- --------- ---------- ----------- 331,422 (258,184) 1,376,808 (1,937,328) ---------- --------- ---------- ----------- -- -- (64,140) (58,646) -- -- (4,863) (2,766) -- -- -- -- -- -- -- -- ---------- --------- ---------- ----------- -- -- (69,003) (61,412) ---------- --------- ---------- ----------- 75,621 (15,821) (290,019) (823,856) 73,244 30,833 168,825 107,521 ---------- --------- ---------- ----------- 148,865 15,012 (121,194) (716,335) ---------- --------- ---------- ----------- 480,287 (243,172) 1,186,611 (2,715,075) 561,452 804,624 5,391,043 8,106,118 ---------- --------- ---------- ----------- $1,041,739 $ 561,452 $6,577,654 $ 5,391,043 ========== ========= ========== =========== $ (1) $ (34) $ 2,302 $ 5,503 ========== ========= ========== =========== </Table> 43 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- 1. ORGANIZATION: The Hartford HLS Mutual Funds serve as the underlying investment vehicles for certain variable annuity and variable life insurance separate accounts and group pension contracts of Hartford Life Insurance Company and Hartford Life and Annuity Insurance Company (collectively, The Hartford Life Insurance Companies) as well as certain qualified retirement plans. The Hartford Life Insurance Companies are affiliates of the Funds. The Funds are stated below. Hartford Series Fund, Inc. (comprised of twenty-six portfolios, eight are included in these financial statements; they are Hartford Advisers HLS Fund, Hartford Bond HLS Fund, Hartford Capital Appreciation HLS Fund, Hartford Dividend and Growth HLS Fund, Hartford International Opportunities HLS Fund, Hartford Money Market HLS Fund, Hartford Small Company HLS Fund and Hartford Stock HLS Fund. Each "Fund" or together the "Funds" are organized under the laws of the State of Maryland and are registered with the Securities and Exchange Commission (SEC) under the Investment Company Act of 1940, as amended, as diversified open-end management investment companies. Each Fund is divided into Class IA and IB shares. Each class is offered at net asset value without a sales charge and is subject to the same expenses except that the Class IB shares are subject to distribution fees charged pursuant to a Rule 12b-1 plan. Distribution and Service Plans have been adopted in accordance with Rule 12b-1 of the Investment Company Act of 1940, as amended. Income and expenses, realized and unrealized capital gains and losses are allocated to each class of a Fund based on the ratio of prior day's net assets. 2. SIGNIFICANT ACCOUNTING POLICIES: The following is a summary of significant accounting policies of the Funds, which are in accordance with accounting principles generally accepted in the United States: a) Security Transactions -- Security transactions are recorded on the trade date (the day the order to buy or sell is executed). Security gains and losses are determined on the basis of identified cost. b) Security Valuation and Investment Income -- Equity securities are valued at the last sales price reported on the principal securities exchange on which such securities are traded (domestic or foreign) or on the principal over-the-counter market on which such securities are traded, as of the close of business on the day the securities are being valued. If no sale took place on a particular day, then such securities are valued at the mean between the bid and asked prices. For securities traded on the NASDAQ national market system, the Funds utilize the NASDAQ Official Closing Price which compares the last trade to the bid/ask range of a security. If the last trade falls within the bid/ask range, then that price will be the closing price. If the last trade is outside the bid/ask range, and falls above the ask, the ask will be the closing price. If the last price is below the bid, the bid will be the closing price. The difference between cost and market value for debt and equity securities is recorded in the Statement of Operations and accumulated in net assets. Debt securities (other than short-term obligations) are valued on the basis of valuations furnished by an unaffiliated pricing service which determines valuations for normal institutional size trading units of debt securities. Mortgage securities are valued at the bid price. Short-term securities held in the Money Market Fund are valued at amortized cost or original cost plus accrued interest receivable, both of which approximate market value. In the remaining Funds, short-term investments with maturity of 60 days or less when purchased are valued at amortized cost, which approximates market value. Short-term investments with a maturity of more than 60 days when purchased are valued based on market quotations until the remaining days to maturity become less than 61 days. From such time until maturity, the investments are valued at amortized cost. The Funds use market prices in valuing portfolio securities, but may use fair value estimates, under procedures established by the Board of Directors, if reliable market prices are unavailable. Fair value pricing may be used by a fund when current market values are unavailable or when an event occurs after the close of the exchange on which the fund's portfolio securities are principally traded that is likely to have changed the value of the securities. The Funds are supplied with information from an unaffiliated third party with respect to the fair value of foreign securities. Price movements in future contracts and ADRs, and various other indices may be reviewed in the 44 - -------------------------------------------------------------------------------- course of making a good faith determination of a security's fair value. The use of fair value pricing by a fund may cause the net asset value of its shares to differ significantly from the net asset value that would be calculated using current market values. Securities of foreign issuers and non-dollar securities are valued on the basis of quotations from the primary market in which they are traded, and are translated from the local currency into U.S. dollars using current exchange rates. Options are valued at the last sales price. If no sale took place on such day, then options are valued at the mean between the bid and asked prices. Securities for which prices are not available from an independent pricing service, but where an active marker exists, are valued using market quotations obtained from one or more dealers that make markets in the securities or from an approved quotation system. Investment income such as dividend income is recorded on the ex-dividend date. Interest income, including amortization of bond premium and discount is recorded on the accrual basis. c) Foreign Currency Transactions -- The accounting records of the Funds are maintained in U.S. dollars. All assets and liabilities initially expressed in foreign currencies are converted into U.S. dollars at the prevailing exchange rates. Purchases and sales of investment securities, dividend and interest income and certain expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. The Funds do not isolate that portion of portfolio security valuation resulting from fluctuations in foreign currency exchange rates on portfolio securities from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments in the accompanying financial statements. Net realized foreign exchange gains or losses arise from sales of foreign currencies and the difference between asset and liability amounts initially stated in foreign currencies and the U.S. dollar value of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of other assets and liabilities at the end of the reporting period, resulting from changes in the exchange rates. d) Repurchase Agreements -- A repurchase agreement is an agreement by which the seller of a security agrees to repurchase the security sold at a mutually agreed upon time and price. At the time the Funds enter into a repurchase agreement, the value of the underlying collateral security(ies), including accrued interest, will be equal to or exceed the value of the repurchase agreement. Securities which serve to collateralize the repurchase agreement are held by each Fund's custodian in book entry or physical form in the custodial account of the Fund. Repurchase agreements are valued at cost plus accrued interest receivable. All repurchase agreements are handled through the Funds' custodian, State Street Bank. Certain Funds, together with other investment management companies having investment advisory agreements with Wellington Management Company, LLP ("Wellington") have interests in a joint repurchase agreement dated 12/31/03 each maturing 01/02/04 with the following brokers: $190,380 BNP Paribas Securities, 0.82%; $435,000 ABN Amro, 0.82%; and $1,070,000 UBS Securities, 0.84%. These joint repurchase agreements are collateralized by $1,325,076 U.S. Treasury Bonds 3.375% -- 12.750% due 11/15/10 - 04/15/32 and $410,208 U.S. Treasury Notes 1.625% -- 4.250% due 12/31/04 - 01/15/10. The maturity amounts are as follows: <Table> <Caption> MATURITY FUND AMOUNT ---- -------- Hartford Advisers HLS Fund.................................. $ 46,937 Hartford Capital Appreciation HLS Fund...................... 341,255 Hartford Dividend and Growth HLS Fund....................... 210,173 Hartford International Opportunities HLS Fund............... 16,633 Hartford Small Company HLS Fund............................. 38,586 Hartford Stock HLS Fund..................................... 24,813 </Table> Certain Funds, together with other investment management companies having investment advisory agreements with The Hartford Investment Management Company (Hartford Investment Management), a wholly owned subsidiary of The Hartford Financial Services Group, Inc., (The Hartford), have interests in a joint repurchase 45 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- agreement dated 12/31/03 each maturing 01/02/04 with the following brokers: $180,326 UBS Warburg, 0.84%; and $150,000 RBS Greenwich Capital Markets, 0.84%. These joint repurchase agreements are collateralized by $336,910 U.S. Treasury Bonds 6.250% -- 13.250% due 11/15/09 -- 05/15/30. The maturity amounts are as follows: <Table> <Caption> MATURITY FUND AMOUNT ---- -------- Hartford Bond HLS Fund...................................... $82,933 Hartford Money Market HLS Fund.............................. 61,341 </Table> e) Joint Trading Account -- Pursuant to an exemptive order issued by the SEC, the Funds may transfer uninvested cash balances into a joint trading account managed by Hartford Investment Management or Wellington. These balances may be invested in one or more repurchase agreements and/or short-term money market instruments. As of December 31, 2003 there are no joint trading accounts. f) Futures, Options on Futures and Options Transactions -- Certain Funds may invest in futures contracts and options contracts in order to gain exposure to or protect against changes in the market. A futures contract is an agreement between two parties to buy and sell a security at a set price on a future date. When the Funds enter into such contracts, they are required to deposit with their custodian an amount of "initial margin" of cash, commercial paper or U.S. Treasury Bills. Subsequent payments, called maintenance margin, to and from the broker-dealer, are made on a daily basis as the price of the underlying debt security fluctuates, making the long and short positions in the futures contract more or less valuable (i.e., mark-to-market), which results in an unrealized gain or loss to the Funds. The market value of a traded futures contract is the last sale price. In the absence of a last sale price, the last offering price is used. In the absence of either of these prices, fair value is determined according to procedures established by the Funds' Board of Directors. At any time prior to the expiration of the futures contract, the Funds may close the position by taking an opposite position which, would operate to terminate the position in the futures contract. A final determination of maintenance margin is then made, additional cash is required to be paid by or released to the Funds and the Funds realize a gain or loss. The use of futures contracts involve elements of market, which may exceed the amounts recognized in the Statements of Assets and Liabilities. Change in the value of the futures contracts may decrease the effectiveness of a Fund's strategies and potentially result in loss. The premium paid by a Fund for the purchase of a call or put option is included in the Fund's Statement of Assets and Liabilities as an investment and subsequently "marked-to-market" through net unrealized appreciation (depreciation) of options to reflect the current market value of the option as of the end of the reporting period. If a purchased option expires on its stipulated expiration date, the Fund realizes a loss in the amount of the cost of the option. If the Fund exercises a put option, it realizes a gain or loss from the sale of the underlying security and the proceeds from such sale will be decreased by the premium originally paid. If the Fund exercises a call option, the cost of the security, which the Fund purchases upon exercise, will be increased by the premium originally paid to buy the call. The Funds may write covered options. "Covered" means that so long as the Fund is obligated as the writer of an option, it will own either the underlying securities or currency or an option to purchase or sell the same underlying securities or currency having an expiration date of the covered option at an exercise price equal to or less than the exercise price of the covered option, or will establish or maintain with its custodian for the term of the option a "segregated account" consisting of cash or other liquid securities having a value equal to the fluctuating market value of the option securities or currencies. The Fund receives a premium from writing a call or put option, recorded as a component of other liabilities on the Statements of Assets and Liabilities, which increases the Fund's return, recorded as a realized gain, if the option expires unexercised or is closed out at a net profit. Any loss realized from the covered option is offset by the gain realized on the sale of the underlying securities or currency. Covered options, at times before exercise of close out, are marked-to-market net unrealized appreciation 46 - -------------------------------------------------------------------------------- (depreciation) of options. There is a risk of loss from a change in value of such options, which may exceed the related premiums received. The Fund's had no written option activity for the year ended December 31, 2003. g) Forward Foreign Currency Contracts -- As of December 31, 2003, Hartford Bond HLS Fund, Hartford Capital Appreciation HLS Fund and Hartford International Opportunities HLS Fund entered into forward foreign currency exchange contracts that obligate the Funds to repurchase/replace or sell currencies at specified future dates. The Funds enter into forward foreign currency contracts to hedge against adverse fluctuations in exchange rates between currencies. Forward contracts involve elements of market risk in excess of the amount reflected in the Statements of Assets and Liabilities. In addition, risks may arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of the contract and from unanticipated movements in the value of the foreign currencies relative to the U.S. dollar. h) Indexed Securities -- The Funds may invest in indexed securities whose values are linked to changes in interest rates, indices, or other underlying instruments. The Funds use these securities to increase or decrease its exposure to different underlying instruments and to gain exposure to markets that might be difficult to invest in through conventional securities. Indexed securities are shown at market value in the Statement of Net Assets, if applicable. Indexed securities may be more volatile than their underlying instruments, but any loss is limited to the amount of the original investment and there is a limit to the potential appreciation of the investment. i) Securities Lending -- The Funds, except for Hartford Money Market HLS Fund, may lend their securities to certain qualified brokers who pay these Funds negotiated lender fees. The loans are collateralized at all times with cash with a market value at least equal to the market value of the securities on loan. As with other extensions of credit, these Funds may bear the risk of delay in recovery of the loaned securities or even loss of rights in the collateral should the borrower of the securities fail financially. As of December 31, 2003, the market value of the securities loaned and the market value of the collateral were as follows: <Table> <Caption> MARKET VALUE MARKET VALUE FUND OF SECURITIES LOANED OF COLLATERAL ---- -------------------- ------------- Hartford Advisers HLS Fund.................................. $1,587,694 $1,620,168 Hartford Bond HLS Fund...................................... 735,598 750,359 Hartford Capital Appreciation HLS Fund...................... 478,374 496,519 Hartford Dividend and Growth HLS Fund....................... 156,503 159,683 Hartford International Opportunities HLS Fund............... 85,210 89,576 Hartford Small Company HLS Fund............................. 73,502 76,071 Hartford Stock HLS Fund..................................... 32,628 33,265 </Table> j) Federal Income Taxes -- For federal income tax purposes, the Funds intend to continue to qualify as regulated investment companies under Subchapter M of the Internal Revenue Code by distributing substantially all of their taxable net investment income and net realized capital gains to their shareholders or otherwise complying with the requirements of regulated investment companies. Accordingly, no provision for federal income taxes has been made in the accompanying financial statements. k) Fund Share Valuation and Distributions to Shareholders -- Orders for the Funds' shares are executed in accordance with the investment instructions of the contract holders. Dividend income is accrued as of the ex-dividend date, except that certain dividends for foreign securities where the ex-dividend date may have passed, are recorded as soon as the Fund is informed of the ex-dividend date in the exercise of due diligence. Interest income and expenses are accrued on a daily basis. The net asset value of each Fund's shares is determined as of the close of each business day of the New York Stock Exchange (the Exchange). Orders for the purchase of a Fund's shares received prior to the close of the Exchange on any day on which the Fund is open for business are priced at the per-share net asset value determined as of the close of the Exchange. Orders received after the close of the Exchange, or on a day on which the Exchange and/or the Fund is not open for business, are priced at the next determined per-share net asset value. 47 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- Dividends are declared by the Funds' Board of Directors based upon the investment performance of the respective Funds. The policy of all Funds except the Hartford Money Market HLS Fund is to pay dividends from net investment income and distribute realized capital gains, if any, at least once a year. Hartford Money Market HLS Fund seeks to maintain a stable net asset value per share of $1.00 by declaring a daily dividend from net investment income, including net short-term capital gains and losses, and by valuing its investments using the amortized cost method. Dividends are declared daily and distributed monthly. Distributions from net investment income, realized capital gains and capital are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America. These differences include the treatment of non-taxable dividends, expiring capital loss carryforwards, foreign currency gains and losses, partnerships, and losses deferred due to wash sales and excise tax regulations. Permanent book and tax basis differences relating to shareholder distributions result in reclassifications to capital accounts (see Note 5). l) Use of Estimates -- The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of income and expenses during the period. Operating results in the future could vary from the amounts derived from management's estimates. m) Illiquid Securities and Other Investments -- Each HLS Fund is permitted to invest in illiquid securities or other investments. An HLS Fund will not, however, acquire illiquid securities or investments in 15% of its net assets (10% for the Money Market HLS Fund) would consist of such securities or other investments. "Illiquid" securities of investments are those that may not be sold or disposed of in the ordinary course of business within seven days at approximately the same price used to determine a HLS Fund's net asset value. An HLS Fund may not be able to sell illiquid securities or other investments when their sub-advisor considers it desirable to do so or may have to sell such securities or investments at a price that is lower than the price that could be obtained if the securities or investments were more liquid. A sale of illiquid securities or other investments may require more time and may result in higher dealer discounts and other selling expenses than does the sale of those that are illiquid. Illiquid securities and investments also may be more difficult to value do to the unavailability of reliable market quotations for such securities or investments, and investments in them may have an adverse impact on net asset value. Each HLS Fund may purchase certain restricted securities (known as 144A securities) that can be resold to institutions and which may be determined to be liquid pursuant to policies and guidelines of the Board of Directors. Under current interpretations of the SEC staff, the following types of securities are considered illiquid: (1) repurchase agreements maturing in more than seven days; (2) certain restricted securities (securities whose public resale is subject to legal or contractual restrictions); (3) options, with respect to specific securities, not traded on a national securities exchange that are not readily marketable; and (4) any other securities or investments that are not readily marketable. The following represents restricted securities of the Funds as of December 31, 2003: <Table> <Caption> ACQUISITION COST PERCENTAGE OF ACQUISITION FUND'S NET FUND SECURITY ACQUISITION DATE(S) COST ASSETS ---- -------- ------------------- ----------- ------------- 144A SECURITIES Hartford Advisers HLS Fund Prudential Insurance Co. of 7/16/98 $ 1,244 --% America Hartford Advisers HLS Fund ERAC USA Finance Co. 6/5/01 16,328 0.1 Hartford Advisers HLS Fund New England Mutual Life 10/23/98, 11/2/98 32,223 0.3 Insurance Co. Hartford Advisers HLS Fund Jackson National Life 11/4/98, 11/5/98 29,563 0.3 Insurance Co. Hartford Advisers HLS Fund AESOP Funding II LLC, Series 2/19/98, 4/9/98, 5/25/99 42,834 0.4 1998-1, Class A <Caption> MARKET VALUE PERCENTAGE OF MARKET FUND'S NET FUND VALUE ASSETS ---- ------- ------------- Hartford Advisers HLS Fund $1,362 --% Hartford Advisers HLS Fund 18,686 0.2 Hartford Advisers HLS Fund 34,843 0.3 Hartford Advisers HLS Fund 31,636 0.3 Hartford Advisers HLS Fund 45,152 0.4 </Table> 48 - -------------------------------------------------------------------------------- <Table> <Caption> ACQUISITION COST PERCENTAGE OF ACQUISITION FUND'S NET FUND SECURITY ACQUISITION DATE(S) COST ASSETS ---- -------- ------------------- ----------- ------------- Hartford Advisers HLS Fund Liberty Mutual Insurance 9/9/98, 9/10/98 $31,849 0.3% Hartford Advisers HLS Fund SCL Terminal Aereo Santiago 12/17/98 17,630 0.2 SA Hartford Bond HLS Fund Xerox Corp. 11/20/01 2,670 0.1 Hartford Bond HLS Fund ERAC USA Finance Co. 4/5/02 2,962 0.1 Hartford Bond HLS Fund AT&T Corp. 7/30/02 1,354 -- Hartford Bond HLS Fund COX Enterprises, Inc. 4/3/03 3,098 0.1 Hartford Bond HLS Fund Northwestern Corp. 4/9/03 4,150 0.1 Hartford Bond HLS Fund Whole Auto Loan Trust, 5/2/03 2,949 0.1 Series 2002-1, Class D Hartford Bond HLS Fund International Transmission 7/1/03 3,947 0.1 Co. Hartford Bond HLS Fund Fondo Latino Americano De 7/17/03 5,547 0.2 Reservas Hartford Bond HLS Fund AQ Finance CEB Trust, Series 7/24/03 2,457 0.1 2003-CE1A, Class Note Hartford Bond HLS Fund Prudential Insurance Co. of 8/4/03 3,807 0.1 America Hartford Bond HLS Fund Echostar DBS Corp. 9/18/03 5,200 0.2 Hartford Bond HLS Fund Placer Dome, Inc. 10/7/03 4,185 0.1 Hartford Bond HLS Fund Rabobank Capital Fund II 11/14/03 11,300 0.4 Hartford Bond HLS Fund Hutchison Whampoa 11/19/03 10,489 0.3 International Ltd. Hartford Bond HLS Fund Hutchison Whampoa 11/19/03 15,415 0.5 International Ltd. Hartford Bond HLS Fund Rhodia S.A. 5/20/03, 5/21/03 4,391 0.1 Hartford Bond HLS Fund Texas-New Mexico Power Co. 6/5/03 4,132 0.1 Hartford Capital CONSOL Energy, Inc., PIPE 10/2/03 61,762 0.6 Appreciation HLS Fund Hartford Capital Spirit Finance Corp. 12/11/03 21,857 0.2 Appreciation HLS Fund Hartford International China Steel Corp., GDR 10/16/03 5,110 0.6 Opportunities HLS Fund Hartford Money Market HLS Nationwide Building Society 7/17/03 30,000 1.6 Fund Hartford Money Market HLS Honda Motor Corp. 10/20/03 37,500 2.0 Fund Hartford Money Market HLS Bradford & Bingley PLC 12/8/03 50,000 2.7 Fund Hartford Money Market HLS Cargill, Inc. 1/9/03 25,000 1.4 Fund Hartford Money Market HLS Northern Rock PLC 1/16/03 50,000 2.7 Fund ILLIQUID SECURITIES Hartford Bond HLS Fund Delta Airlines, Inc. 10/18/1996 1,530 -- Hartford Bond HLS Fund Iridium World 7/11/1997 97 -- Communications, Inc. Hartford Bond HLS Fund Voicestream Wireless Corp. 8/1/1997 -- -- Hartford Bond HLS Fund Pollyone Corp. 9/19/2002 1,693 0.1 Hartford Bond HLS Fund Global Crossing Ltd. 12/9/2003 2,220 0.1 Hartford Bond HLS Fund Marconi Corp., PLC 5/19/2003 1,716 0.1 Hartford Bond HLS Fund Marconi Corp., PLC 5/19/2003 3,759 0.1 <Caption> MARKET VALUE PERCENTAGE OF MARKET FUND'S NET FUND VALUE ASSETS ---- ------- ------------- Hartford Advisers HLS Fund $32,863 0.3% Hartford Advisers HLS Fund 19,149 0.1 Hartford Bond HLS Fund 4,259 0.1 Hartford Bond HLS Fund 3,112 0.1 Hartford Bond HLS Fund 1,987 0.1 Hartford Bond HLS Fund 3,198 0.1 Hartford Bond HLS Fund 4,249 0.2 Hartford Bond HLS Fund 2,964 0.1 Hartford Bond HLS Fund 3,813 0.1 Hartford Bond HLS Fund 5,515 0.2 Hartford Bond HLS Fund 2,457 0.1 Hartford Bond HLS Fund 3,813 0.1 Hartford Bond HLS Fund 5,259 0.2 Hartford Bond HLS Fund 4,296 0.1 Hartford Bond HLS Fund 11,316 0.4 Hartford Bond HLS Fund 10,662 0.4 Hartford Bond HLS Fund 16,092 0.5 Hartford Bond HLS Fund 4,020 0.1 Hartford Bond HLS Fund 4,176 0.1 Hartford Capital 78,585 0.8 Appreciation HLS Fund Hartford Capital 21,857 0.2 Appreciation HLS Fund Hartford International 5,456 0.6 Opportunities HLS Fund Hartford Money Market HLS 30,000 1.6 Fund Hartford Money Market HLS 37,500 2.0 Fund Hartford Money Market HLS 50,000 2.7 Fund Hartford Money Market HLS 25,000 1.4 Fund Hartford Money Market HLS 50,000 2.7 Fund Hartford Bond HLS Fund 1,028 -- Hartford Bond HLS Fund -- -- Hartford Bond HLS Fund -- -- Hartford Bond HLS Fund 1,679 0.1 Hartford Bond HLS Fund 2,236 0.1 Hartford Bond HLS Fund 1,853 0.1 Hartford Bond HLS Fund 4,131 0.1 </Table> 49 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- 3. EXPENSES: a) Investment Management and Advisory Agreements -- HL Investment Advisors, LLC (HL Advisors) an indirect wholly-owned subsidiary of The Hartford, serves as investment manager to the Funds pursuant to investment management agreements approved by each Fund's Board of Directors and shareholders. The schedule below reflects the rates of compensation paid to HL Advisors for services rendered, a portion of which is used to compensate Wellington or Hartford Investment Management: HARTFORD MONEY MARKET HLS FUND <Table> <Caption> AVERAGE DAILY NET ASSETS ANNUAL RATE - ------------------------ ----------- All assets......................................................... 0.250% </Table> HARTFORD BOND HLS FUND AND HARTFORD STOCK HLS FUND <Table> <Caption> AVERAGE DAILY NET ASSETS ANNUAL RATE - ------------------------ ----------- On first $250 million.............................................. 0.325% On next $250 million............................................... 0.300 On next $500 million............................................... 0.275 Over $1 billion.................................................... 0.250 </Table> HARTFORD ADVISERS HLS FUND, HARTFORD CAPITAL APPRECIATION HLS FUND, HARTFORD DIVIDEND AND GROWTH HLS FUND, HARTFORD INTERNATIONAL OPPORTUNITIES HLS FUND AND HARTFORD SMALL COMPANY HLS FUND <Table> <Caption> AVERAGE DAILY NET ASSETS ANNUAL RATE - ------------------------ ----------- On first $250 million.............................................. 0.575% On next $250 million............................................... 0.525 On next $500 million............................................... 0.475 Over $1 billion.................................................... 0.425 </Table> Pursuant to sub-advisory agreements between HL Advisors and Wellington, Wellington provides the day-to-day investment management services to the Hartford Advisers HLS Fund, Hartford Capital Appreciation HLS Fund, Hartford Dividend and Growth HLS Fund, Hartford International Opportunities HLS Fund, Hartford Small Company HLS Fund and Hartford Stock HLS Fund. Pursuant to investment services agreements between HL Advisors and Hartford Investment Management, Hartford Investment Management provides the day-to-day investment management services to the Hartford Bond HLS Fund and Hartford Money Market HLS Fund. Wellington and Hartford Investment Management determine the purchase and sale of portfolio securities and place such orders for execution in the name of the respective Fund. In conjunction with their investment activity, Wellington and Hartford Investment Management regularly furnish reports to the Funds' Board of Directors concerning economic forecasts, investment strategy, portfolio activity and performance of the Funds. b) Administrative Services Agreement -- Under the Administrative Services Agreement between Hartford Life Insurance Company (HL) and each of the Funds, HL provides administrative services to the Funds and receives monthly compensation at the annual rate of 0.20% of each Fund's average daily net assets. The Funds assume and pay certain other expenses (including, but not limited to, accounting, custodian, state taxes and directors' fees). Directors' fees represent remuneration paid or accrued to directors not affiliated with HL or any other related company. Accounting Services Agreement -- Under the Fund Accounting Agreement between HL and each of the Funds, HL provides accounting services to the Funds and receives monthly compensation at the annual rate of 0.02% of each Fund's average daily net assets. c) Operating Expenses -- Allocable expenses of the Funds are charged to each Fund based on the ratio of the average net assets of each Fund to the combined average net assets of the Funds. Non-allocable expenses are charged to each Fund based on specific identification. d) Expense Offset -- The Funds has asked its investment advisors to direct certain security trades, subject to obtaining the best price and execution, to brokers who have agreed to rebate to the Funds' part of the commissions generated. Such rebates are used solely to reduce the Funds' operating expenses. The Funds' custodian bank has also agreed to reduce its fees when the Funds maintain cash on deposit in the non-interest-bearing custody 50 - -------------------------------------------------------------------------------- account. For the year ended December 31, 2003, directed brokerage and custodian fee offset arrangements reduced expenses by $202 and $82, respectively. The total expense reduction represented an effective annual rate of 0.00% of the Funds' average net assets. e) Distribution Plan for Class IB shares -- Each Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the 1940 Act for the Class IB shares. Pursuant to the Distribution Plan, each Fund compensates the Distributor from assets attributable to the Class IB shares for services rendered and expenses borne in connection with activities primarily intended to result in the sale of the Class IB shares. The Distribution Plan provides that each Fund may pay annually up to 0.25% of the average daily net assets of a fund attributable to its Class IB shares for activities primarily intended to result in the sale of Class IB shares. Under the terms of the Distribution Plan and the principal underwriting agreement, each Fund is authorized to make payments monthly to the Distributor which may be used to pay or reimburse entities providing distribution and shareholder servicing with respect to the Class IB shares for such entities' fees or expenses incurred or paid in that regard. 4. INVESTMENT TRANSACTIONS: For the year ended December 31, 2003, aggregate purchases and sales of investment securities (excluding short-term investments) were as follows: <Table> <Caption> COST OF SALES FUND PURCHASES PROCEEDS ---- ---------- ---------- Hartford Advisers HLS Fund.................................. $3,125,733 $3,030,477 Hartford Bond HLS Fund...................................... 5,133,903 4,636,117 Hartford Capital Appreciation HLS Fund...................... 7,948,684 7,092,231 Hartford Dividend and Growth HLS Fund....................... 1,844,771 1,106,563 Hartford International Opportunities HLS Fund............... 1,017,873 1,006,116 Hartford Small Company HLS Fund............................. 1,406,247 1,249,682 Hartford Stock HLS Fund..................................... 2,115,707 2,169,020 </Table> 5. RECLASSIFICATION OF CAPITAL ACCOUNTS: In accordance with AICPA Statement of Position 93-2, Determination, Disclosure, and Financial Statement Presentation of Income, Capital Gain, and Return of Capital Distributions by Investment Companies, the Funds have recorded several reclassifications in their capital accounts. These reclassifications had no impact on the net asset value per share of the Funds and are designed generally to present undistributed income and realized gains on a tax basis which is considered to be more informative to the shareholder. As of December 31, 2003, the Funds recorded the following reclassifications to increase (decrease) the accounts listed below. <Table> <Caption> ACCUMULATED ACCUMULATED UNDISTRIBUTED UNDISTRIBUTED NET REALIZED NET INVESTMENT GAIN (LOSS) ON PAID IN FUND INCOME (LOSS) INVESTMENTS CAPITAL ---- -------------- -------------- -------- Hartford Advisers HLS Fund................................ $ 6,196 $ (3,375) $ (2,821) Hartford Bond HLS Fund.................................... 42,793 (48,413) 5,620 Hartford Capital Appreciation HLS Fund.................... (9,067) 9,067 -- Hartford Dividend and Growth HLS Fund..................... 1 (1) -- Hartford International Opportunities HLS Fund............. (774) (9,393) (10,167) Hartford Small Company HLS Fund........................... 4,009 (1,999) (2,010) Hartford Stock HLS Fund................................... (484) (1,102) 1,586 </Table> 51 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- TAX COST AND UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS: As of December 31, 2003, the aggregate gross unrealized appreciation and depreciation of all investments, based on cost for federal income tax purposes, was as follows: <Table> <Caption> AGGREGATE AGGREGATE GROSS GROSS NET UNREALIZED UNREALIZED UNREALIZED APPRECIATION/ FUND TAX COST APPRECIATION DEPRECIATION (DEPRECIATION) ---- ----------- ------------ -------------- -------------- Hartford Advisers HLS Fund.................. $12,065,665 $1,457,050 $(326,578) $1,130,472 Hartford Bond HLS Fund...................... 3,726,899 75,009 (16,335) 58,674 Hartford Capital Appreciation HLS Fund...... 8,876,631 2,143,083 (100,320) 2,042,763 Hartford Dividend and Growth HLS Fund....... 4,471,212 678,564 (162,268) 516,296 Hartford International Opportunities HLS Fund...................................... 849,332 140,720 (2,271) 138,449 Hartford Small Company HLS Fund............. 965,145 183,361 (16,430) 166,931 Hartford Stock HLS Fund..................... 6,071,269 894,686 (353,506) 541,180 </Table> 6. CAPITAL LOSS CARRY FORWARD: At December 31, 2003, the following Funds had capital loss carry forwards for U.S. Federal Tax purposes of approximately: <Table> <Caption> YEAR OF FUND AMOUNT EXPIRATION ---- ---------- ---------- Hartford Advisers HLS Fund.................................. $ 433,487 2011 Hartford Advisers HLS Fund.................................. 139,365 2010 Hartford Advisers HLS Fund.................................. 291,958 2009 Hartford Advisers HLS Fund.................................. 1,126 2008 Hartford Bond HLS Fund...................................... 654 2009 Hartford Bond HLS Fund...................................... 438 2007 Hartford Capital Appreciation HLS Fund...................... 1,156,841 2010 Hartford Capital Appreciation HLS Fund...................... 123,844 2009 Hartford International Opportunities HLS Fund............... 134,281 2010 Hartford International Opportunities HLS Fund............... 215,001 2009 Hartford International Opportunities HLS Fund............... 3,922 2008 Hartford Small Company HLS Fund............................. 124,207 2010 Hartford Small Company HLS Fund............................. 141,140 2009 Hartford Stock HLS Fund..................................... 503,997 2011 Hartford Stock HLS Fund..................................... 226,152 2010 Hartford Stock HLS Fund..................................... 287,769 2009 Hartford Stock HLS Fund..................................... 622 2008 </Table> Based on certain provisions in the Internal Revenue Code, various limitations regarding the future utilization of the Hartford Advisers HLS Fund, Hartford Bond HLS Fund, Hartford International Opportunities HLS Fund and Hartford Stock HLS Fund carry forward may apply. 52 - -------------------------------------------------------------------------------- For the fiscal year ended December 31, 2003, the following Funds have elected to defer losses occurring between November 1, 2003 and December 31, 2003 as follows: <Table> <Caption> CAPITAL LOSS CURRENCY LOSS FUND DEFERRED DEFERRED ---- ------------ ------------- Hartford Advisers HLS Fund.................................. $17,761 $ -- Hartford Bond HLS Fund...................................... 15,260 -- Hartford Small Company HLS Fund............................. 5,308 -- Hartford Stock HLS Fund..................................... 5,224 -- </Table> 7. DISTRIBUTION TO SHAREHOLDERS: The tax character of distributions paid during 2003 was as follows: <Table> <Caption> ORDINARY LONG-TERM RETURN FUND INCOME CAPITAL GAIN OF CAPITAL ---- -------- ------------ ---------- Hartford Advisers HLS Fund.................................. $256,741 $ -- $ -- Hartford Bond HLS Fund...................................... 128,941 6,157 -- Hartford Capital Appreciation HLS Fund...................... 49,667 -- -- Hartford Dividend and Growth HLS Fund....................... 60,506 23,281 -- Hartford International Opportunities HLS Fund............... 7,059 -- -- Hartford Money Market HLS Fund.............................. 15,989 -- -- Hartford Stock HLS Fund..................................... 69,003 -- -- </Table> The tax character of distributions paid during 2002 was as follows: <Table> <Caption> ORDINARY LONG-TERM RETURN FUND INCOME CAPITAL GAIN OF CAPITAL ---- -------- ------------ ---------- Hartford Advisers HLS Fund.................................. $328,556 $ -- $-- Hartford Bond HLS Fund...................................... 95,011 9,630 -- Hartford Capital Appreciation HLS Fund...................... 45,846 -- -- Hartford Dividend and Growth HLS Fund....................... 49,031 167,933 -- Hartford International Opportunities HLS Fund............... 15,967 -- -- Hartford Money Market HLS Fund.............................. 32,227 -- -- Hartford Stock HLS Fund..................................... 61,412 -- -- </Table> As of December 31, 2003, the components of distributable earnings on tax basis were as follows: <Table> <Caption> UNDISTRIBUTED UNDISTRIBUTED UNDISTRIBUTED UNREALIZED ORDINARY LONG-TERM APPRECIATION FUND INCOME CAPITAL GAIN (DEPRECIATION) ---- ------------- ------------- -------------- Hartford Advisers HLS Fund................................ $104,776 $ -- $1,130,472 Hartford Bond HLS Fund.................................... 228,190 5,198 58,909 Hartford Capital Appreciation HLS Fund.................... 4,215 -- 2,042,798 Hartford Dividend and Growth HLS Fund..................... 1,534 -- 516,296 Hartford International Opportunities HLS Fund............. 1,143 -- 138,416 Hartford Small Company HLS Fund........................... -- -- 166,931 Hartford Stock HLS Fund................................... 2,303 541,181 </Table> 53 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- 8. CAPITAL SHARE TRANSACTIONS: The following information is for the year ended December 31, 2003: <Table> <Caption> HARTFORD CAPITAL HARTFORD ADVISORS HARTFORD BOND APPRECIATION HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold.................... 48,476 $ 1,008,884 99,153 $ 1,205,185 30,209 $ 1,120,299 Shares issued on reinvestment of distributions............. 10,781 233,680 8,964 108,671 996 44,256 Shares redeemed................ (74,454) (1,526,868) (98,394) (1,193,335) (29,606) (1,044,806) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ (15,197) $ (284,304) 9,723 $ 120,521 1,599 $ 119,749 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD DIVIDEND HARTFORD INTERNATIONAL HARTFORD AND GROWTH OPPORTUNITIES MONEY MARKET HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold.................... 58,637 $ 967,344 192,953 $ 1,515,610 5,510,526 $ 5,510,526 Shares Issued in merger........ -- -- 3,008 22,447 -- -- Shares issued on reinvestment of distributions............. 3,917 70,219 724 6,584 14,649 14,649 Shares redeemed................ (39,533) (645,995) (199,659) (1,571,908) (6,235,192) (6,235,192) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ 23,021 $ 391,568 (2,974) $ (27,267) (710,017) $ (710,017) =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD SMALL COMPANY HARTFORD STOCK HLS FUND HLS FUND ------------------------- ------------------------ SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- CLASS IA Shares sold.................... 54,637 $ 657,436 25,647 $ 986,300 Shares Issued in merger........ -- -- 406 14,137 Shares issued on reinvestment of distributions............. -- -- 1,466 64,146 Shares redeemed................ (49,141) (581,815) (35,607) (1,354,602) ----------- ----------- ---------- ----------- Net Increase (Decrease)........ 5,496 $ 75,621 (8,088) $ (290,019) =========== =========== ========== =========== </Table> 54 - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD HARTFORD HARTFORD CAPITAL ADVISORS BOND APPRECIATION HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold.................... 23,827 $ 495,611 34,505 $ 419,013 18,133 $ 656,957 Shares issued on reinvestment of distributions............. 1,026 23,061 2,191 26,427 123 5,411 Shares redeemed................ (3,527) (72,477) (8,880) (106,829) (1,563) (52,824) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ 21,326 $ 446,195 27,816 $ 338,611 16,693 $ 609,544 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD DIVIDEND HARTFORD INTERNATIONAL HARTFORD AND GROWTH OPPORTUNITIES MONEY MARKET HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold.................... 27,700 $ 447,355 12,289 $ 101,772 289,678 $ 289,678 Shares issued on reinvestment of distributions............. 759 13,568 41 477 1,341 1,341 Shares redeemed................ (1,981) (31,183) (8,256) (68,050) (312,003) (312,003) ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ 26,478 $ 429,740 4,074 $ 34,199 (20,984) $ (20,984) =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD SMALL COMPANY HARTFORD STOCK HLS FUND HLS FUND ------------------------- ------------------------ SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- CLASS IB Shares sold.................... 7,297 $ 86,583 5,265 $ 203,385 Shares issued on reinvestment of distributions............. -- -- 111 4,863 Shares redeemed................ (1,217) (13,339) (1,043) (39,423) ----------- ----------- ---------- ----------- Net Increase (Decrease)........ 6,080 $ 73,244 4,333 $ 168,825 =========== =========== ========== =========== </Table> The following information is for the year ended December 31, 2002: <Table> <Caption> HARTFORD ADVISERS HARTFORD BOND HARTFORD CAPITAL HLS FUND HLS FUND APPRECIATION HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold.................... 207,487 $ 508,856 668,428 $ 815,855 166,965 $ 642,585 Shares issued in merger........ 220,049 488,111 77,738 90,378 -- -- Shares issued on reinvestment of distributions............. 105,657 310,849 83,422 92,931 2,847 43,001 Shares redeemed................ (878,389) (1,912,142) (387,997) (493,343) (395,688) (1,397,883) Shares issued in 1 for 10 stock split........................ (4,233,249) -- (1,614,335) -- (1,774,749) -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ (4,578,445) $ (609,326) (1,172,744) $ 505,821 (2,000,625) $ (712,297) =========== =========== ========== =========== ========== =========== </Table> 55 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD HARTFORD INTERNATIONAL HARTFORD DIVIDEND AND GROWTH OPPORTUNITIES MONEY MARKET HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IA Shares sold.................... 333,066 $ 644,897 3,291,660 $ 2,907,057 7,433,161 $ 7,433,161 Shares issued in merger........ -- -- -- -- 122,443 122,443 Shares issued on in-kind transactions................. -- -- 12,252 11,716* -- -- Shares issued on reinvestment of distributions............. 96,010 201,073 10,217 15,535 29,756 29,756 Shares redeemed................ (302,046) (539,278) (3,352,850) (3,086,177) (7,133,424) (7,133,424) Shares issued in 1 for 10 stock split........................ (1,638,206) -- (865,011) -- -- -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ (1,511,176) $ 306,692 (903,732) $ (151,869) 451,936 $ 451,936 =========== =========== ========== =========== ========== =========== </Table> * During the year ended December 31, 2002, the Hartford International Opportunities HLS Fund received in-kind subscriptions of securities as noted (including unrealized appreciation (depreciation) of ($547)) from a shareholder of an affiliated Fund offered by The Hartford in exchange for shares of the Fund noted. <Table> <Caption> HARTFORD SMALL COMPANY HARTFORD STOCK HLS FUND HLS FUND ------------------------- ------------------------ SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- CLASS IA Shares sold.................... 288,006 $ 353,870 82,040 $ 368,314 Shares issued on in-kind transactions................. 18,874 24,995* Shares issued on reinvestment of distributions............. -- -- 2,398 58,646 Shares redeemed................ (322,882) (394,686) (302,325) (1,250,816) Shares issued in 1 for 10 stock split........................ (490,203) -- (1,292,904) -- ----------- ----------- ---------- ----------- Net Increase (Decrease)........ (506,205) $ (15,821) (1,510,791) $ (823,856) =========== =========== ========== =========== </Table> * During the year ended December 31, 2002, the Hartford Small Company HLS Fund received in-kind subscriptions of securities as noted (including unrealized appreciation (depreciation) of $2,151) from a shareholder of an affiliated Fund offered by The Hartford in exchange for shares of the Fund noted. <Table> <Caption> HARTFORD CAPITAL HARTFORD ADVISERS HARTFORD BOND APPRECIATION HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold.................... 127,755 $ 317,874 182,699 $ 240,018 91,808 $ 361,932 Shares issued on reinvestment of distributions............. 5,569 17,707 10,543 11,710 172 2,845 Shares redeemed................ (35,672) (77,330) (25,861) (36,070) (18,914) (64,902) Shares issued in 1 for 10 stock split........................ (284,427) -- (268,394) -- (153,584) -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ (186,775) $ 258,251 (101,013) $ 215,658 (80,518) $ 299,875 =========== =========== ========== =========== ========== =========== </Table> 56 - -------------------------------------------------------------------------------- <Table> <Caption> HARTFORD HARTFORD INTERNATIONAL HARTFORD DIVIDEND AND GROWTH OPPORTUNITIES MONEY MARKET HLS FUND HLS FUND HLS FUND ------------------------- ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- ---------- ----------- CLASS IB Shares sold.................... 115,448 $ 232,771 174,550 $ 151,571 390,278 $ 390,278 Shares issued on reinvestment of distributions............. 7,052 15,891 237 431 2,405 2,405 Shares redeemed................ (13,505) (22,763) (161,775) (143,959) (282,898) (282,898) Shares issued in 1 for 10 stock split........................ (169,150) -- (32,948) -- -- -- ----------- ----------- ---------- ----------- ---------- ----------- Net Increase (Decrease)........ (60,155) $ 225,899 (19,936) $ 8,043 109,785 $ 109,785 =========== =========== ========== =========== ========== =========== </Table> <Table> <Caption> HARTFORD SMALL COMPANY HARTFORD STOCK HLS FUND HLS FUND ------------------------- ------------------------ SHARES AMOUNT SHARES AMOUNT ----------- ----------- ---------- ----------- CLASS IB Shares sold.................... 32,500 $ 42,028 30,948 $ 142,796 Shares issued on reinvestment of distributions............. -- -- 106 2,766 Shares redeemed................ (9,931) (11,195) (9,557) (38,041) Shares issued in 1 for 10 stock split........................ (60,150) -- (70,496) -- ----------- ----------- ---------- ----------- Net Increase (Decrease)........ (37,581) $ 30,833 (48,999) $ 107,521 =========== =========== ========== =========== </Table> 9. LINE OF CREDIT: The Funds, except for the Hartford Money Market HLS Fund, participates in a $550,000 committed revolving line of credit facility. The facility is to be used for temporary or emergency purposes. The interest rate on borrowings varies depending on the nature of the loan. The facility also requires an eight basis fee to be paid, to State Street Bank, based on the amount of the commitment, which has not been utilized. For the year ended December 31, 2003, the Funds did not have any borrowings under this facility. 10. REVERSE STOCK SPLIT: a) On November 22, 2002, a reverse stock split was declared for Hartford Advisers HLS Fund, Hartford Bond HLS Fund, Hartford Capital Appreciation HLS Fund, Hartford Dividend and Growth HLS Fund, Hartford International Opportunities HLS Fund, Hartford Small Company HLS Fund and Hartford Stock HLS Fund, at a ten to one ratio. b) On September 17, 1999, a reverse stock split was declared for the Class IB shares of certain Funds, using the following reverse split percentages: <Table> <Caption> REVERSE SPLIT FUND PERCENTAGE ---- ------------- Hartford Advisers HLS Fund, Inc. ........................... 29.67% Hartford Bond HLS Fund, Inc. ............................... 93.07 Hartford Capital Appreciation HLS Fund, Inc. ............... 15.42 Hartford Dividend and Growth HLS Fund, Inc. ................ 44.38 Hartford International Opportunities HLS Fund, Inc. ........ 71.63 Hartford Small Company HLS Fund, Inc. ...................... 74.61 Hartford Stock HLS Fund, Inc. .............................. 9.27 </Table> 57 HARTFORD HLS MUTUAL FUNDS NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) DECEMBER 31, 2003 (000'S OMITTED) - -------------------------------------------------------------------------------- 11. FUND MERGERS: REORGANIZATION OF CERTAIN SERIES OF HARTFORD HLS SERIES FUND II, INC. IN 2003: At a special meeting of shareholders, held on January 15, 2003, shareholders of Hartford American Leaders HLS Fund and Hartford International Stock II HLS Fund (each a "Target Fund") approved a proposed Agreement and Plan of Reorganization between Hartford HLS Series Fund II, Inc. and the Hartford Series Fund, Inc. (the "Plan"). Hartford American Leaders HLS Fund merged into Hartford Stock HLS Fund Hartford International Stock II HLS Fund merged into Hartford International Opportunities HLS Fund Under the terms of the Plan, and pursuant to the approval by shareholders of each Target Fund, the assets of each Target Fund were acquired by the corresponding Acquiring Fund on January 24, 2003. Each Acquiring Fund acquired the respective Target Fund's assets in exchange for the Acquiring Fund's shares, which were distributed pro rata by each Target Fund to the holders of its shares on January 24, 2003, in complete liquidation of the Target Fund. The mergers were accomplished by tax free exchanges as detailed below: <Table> <Caption> HARTFORD INTERNATIONAL OPPORTUNITIES HLS FUND CLASS IA CLASS IB --------------------------------------------- ---------- -------- Net Assets of Hartford International Stock II HLS Fund on January 24, 2003.......................................... $ 22,447 $ -- Hartford International Stock II HLS Fund shares exchanged... 3,304 -- Hartford International Opportunities HLS Fund shares issued.................................................... 3,008 -- Net assets of Hartford International Opportunities HLS Fund immediately before the merger............................. $ 684,409 $ 27,363 Net assets of Hartford International Opportunities HLS Fund immediately after the merger.............................. $ 706,856 $ 27,363 </Table> <Table> <Caption> HARTFORD STOCK HLS FUND CLASS IA CLASS IB ----------------------- ---------- -------- Net assets of Hartford American Leaders HLS Fund on January 24, 2003.................................................. $ 14,137 $ -- Hartford American Leaders HLS Fund shares exchanged......... 1,787 -- Hartford Stock HLS Fund shares issued....................... 406 -- Net assets of Hartford Stock HLS Fund immediately before the merger.................................................... $4,971,437 $298,456 Net assets of Hartford Stock HLS Fund immediately after the merger.................................................... $4,985,574 $298,456 </Table> The Hartford American Leaders HLS Fund and Hartford International Stock II had the following unrealized appreciation (depreciation), accumulated net realized gains (losses) and capital stock as of January 24, 2003: <Table> <Caption> UNREALIZED ACCUMULATED APPRECIATION NET REALIZED FUND (DEPRECIATION) (LOSSES) CAPITAL STOCK ---- -------------- ------------ ------------- Hartford American Leaders HLS Fund........................ $(2,855) $ (35) $18,579 Hartford International Stock II........................... (8,812) (147) 42,026 </Table> REORGANIZATION OF CERTAIN SERIES OF HARTFORD HLS SERIES FUND II, INC. IN 2002: At a special meeting of shareholders, held on April 29, 2002, shareholders of Fortis Money Market Series ("Fortis Fund") approved a proposed Agreement and Plan of Reorganization between Hartford HLS Series Fund II, Inc. and the Hartford HLS Mutual Funds (the "Plan"). Fortis Money Market Series merged into Hartford Money Market HLS Fund, Inc. Under the terms of the Plan, and pursuant to the approval by shareholders of the Fortis Fund, the assets of the Fortis Fund were acquired by a corresponding series of the Hartford HLS Mutual Fund (the "Hartford Fund") on April 30, 2002. The Hartford Fund acquired the Fortis Fund's assets in exchange for the Hartford Fund's shares, which were distributed pro rata by each Fortis Fund to the holders of its shares on April 30, 2002, in complete liquidation of the Fortis Fund. 58 - -------------------------------------------------------------------------------- The mergers were accomplished by tax free exchanges as detailed below: <Table> <Caption> HARTFORD MONEY MARKET HLS FUND CLASS IA CLASS IB ------------------------------ ---------- -------- Net assets of Fortis Money Market on April 30, 2002......... $ 122,443 -- Fortis Money Market shares exchanged........................ 11,346 -- Hartford Money Market shares issued......................... 122,443 -- Net assets of Hartford Money Market immediately before the merger.................................................... $1,794,364 $166,561 Net assets of Hartford Money Market immediately after the merger.................................................... $1,916,807 $166,561 </Table> The Fortis Money Market Series had unrealized appreciation (depreciation), accumulated net realized gains (losses) and capital stock as follows: <Table> <Caption> UNREALIZED ACCUMULATED APPRECIATION NET REALIZED FUND (DEPRECIATION) (LOSSES) CAPITAL STOCK ---- -------------- ------------ ------------- Fortis Money Market Series................................ -- -- $122,443 </Table> 12. FUND MERGERS SUBSEQUENT TO DECEMBER 31, 2003: PROPOSED REORGANIZATION OF HARTFORD MULTISECTOR BOND HLS FUND INTO HARTFORD HLS SERIES FUND II, INC. At a meeting held on November 4, 2003, the Boards of Directors of the Hartford Multisector Bond HLS Fund and the Hartford Bond HLS Fund approved, subject to shareholder approval, a reorganization of Hartford Multisector Bond HLS Fund into Hartford Bond HLS Fund. A special meeting of shareholders will be held on April 20, 2004. Shareholders of Hartford Multisector Bond HLS Fund will vote on a proposed Agreement and Plan of Reorganization between Hartford HLS Series Fund II, Inc. and Hartford Series Fund, Inc. Under the terms of the Plan, and pursuant to the approval by shareholders of the Hartford Multisector Bond HLS Fund, the assets of the Hartford Multisector Bond HLS Fund would be acquired by the Hartford Bond HLS Fund on or about April 30, 2004. The Hartford Bond HLS Fund would acquire the Hartford Multisector Bond HLS Fund's assets in exchange for the Hartford Bond HLS Fund's shares, which would be distributed pro rata by the Hartford Multisector Bond HLS Fund to the holders of its shares on April 30, 2004, in complete liquidation of the Hartford Multisector Bond HLS Fund 59 HARTFORD HLS MUTUAL FUNDS FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- <Table> <Caption> -- SELECTED PER-SHARE DATA (1) -- ---------------------------------------------------------------------------------------------------- NET REALIZED AND DISTRIBUTIONS NET ASSET NET UNREALIZED TOTAL DIVIDENDS FROM VALUE AT INVESTMENT GAIN FROM FROM NET NET REALIZED BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT GAINS ON OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME INVESTMENTS --------- ---------- ------------ ---------- ---------- ------------- HARTFORD ADVISERS HLS FUND For the Year Ended December 31, 2003 Class IA................. $19.59 $ 0.42 $ 3.18 $ 3.60 $(0.52) $ -- Class IB................. 19.72 0.41 3.16 3.57 (0.48) -- For the Year Ended December 31, 2002 Class IA................. 23.44(2) 0.51(2) (4.10)(2) (3.59)(2) (0.26)(2) --(2) Class IB................. 23.60(2) 0.46(2) (4.10)(2) (3.64)(2) (0.24)(2) --(2) For the Year Ended December 31, 2001 Class IA................. 26.65(2) 0.64(2) (1.85)(2) (1.21)(2) (0.73)(2) (1.27)(2) Class IB................. 26.63(2) 0.50(2) (1.77)(2) (1.27)(2) (0.49)(2) (1.27)(2) For the Year Ended December 31, 2000 Class IA................. 29.65(2) 0.68(2) (0.88)(2) (0.20)(2) (0.23)(2) (2.57)(2) Class IB................. 29.66(2) 0.74(2) (0.98)(2) (0.24)(2) (0.22)(2) (2.57)(2) For the Year Ended December 31, 1999 Class IA................. 29.85(2) 0.68(2) 2.21(2) 2.89(2) (0.63)(2) (2.46)(2) Class IB................. 35.77(2)(3) 0.61(2)(3) 2.21(2)(3) 2.82(2)(3) (0.64)(2)(3) (8.29)(2)(3) HARTFORD BOND HLS FUND For the Year Ended December 31, 2003 Class IA................. 11.95 0.36 0.57 0.93 (0.50) (0.06) Class IB................. 11.90 0.40 0.50 0.90 (0.49) (0.06) For the Year Ended December 31, 2002 Class IA................. 11.46(2) 0.56(2) (0.01)(2) 0.55(2) (0.05)(2) (0.01)(2) Class IB................. 11.43(2) 0.46(2) 0.07(2) 0.53(2) (0.05)(2) (0.01)(2) For the Year Ended December 31, 2001 Class IA................. 11.08(2) 0.46(2) 0.48(2) 0.94(2) (0.56)(2) --(2) Class IB................. 11.07(2) 0.41(2) 0.50(2) 0.91(2) (0.55)(2) --(2) For the Year Ended December 31, 2000 Class IA................. 9.94(2) 0.69(2) 0.50(2) 1.19(2) (0.05)(2) --(2) Class IB................. 9.95(2) 0.61(2) 0.56(2) 1.17(2) (0.05)(2) --(2) For the Year Ended December 31, 1999 Class IA................. 10.81(2) 0.62(2) (0.84)(2) (0.22)(2) (0.58)(2) (0.07)(2) Class IB................. 10.83(2)(3) 0.61(2)(3) (0.84)(2)(3) (0.23)(2)(3) (0.57)(2)(3) (0.08)(2)(3) HARTFORD CAPITAL APPRECIATION HLS FUND For the Year Ended December 31, 2003 Class IA................. 31.70 0.26 13.17 13.43 (0.22) -- Class IB................. 31.63 0.19 13.10 13.29 (0.16) -- For the Year Ended December 31, 2002 Class IA................. 39.75(2) 0.15(2) (8.01)(2) (7.86)(2) (0.19)(2) --(2) Class IB................. 39.68(2) 0.12(2) (8.03)(2) (7.91)(2) (0.14)(2) --(2) For the Year Ended December 31, 2001 Class IA................. 59.26(2) 0.21(2) (3.36)(2) (3.15)(2) (0.27)(2) (16.09)(2) Class IB................. 59.23(2) 0.06(2) (3.29)(2) (3.23)(2) (0.23)(2) (16.09)(2) For the Year Ended December 31, 2000 Class IA................. 60.95(2) 0.41(2) 7.57(2) 7.98(2) (0.39)(2) (9.28)(2) Class IB................. 60.98(2) (0.77)(2) 8.64(2) 7.87(2) (0.34)(2) (9.28)(2) For the Year Ended December 31, 1999 Class IA................. 47.59(2) 0.23(2) 16.43(2) 16.66(2) (0.18)(2) (3.12)(2) Class IB................. 64.37(2)(3) 1.50(2)(3) 15.03(2)(3) 16.53(2)(3) (0.13)(2)(3) (19.79)(2)(3) </Table> See Notes to Financial Statements. 60 - -------------------------------------------------------------------------------- <Table> <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - -------------------------------------------------------------------------------------------------------------------- RATIO OF NET INCREASE NET ASSETS EXPENSES (DECREASE) IN NET ASSET AT END OF TO AVERAGE TOTAL NET ASSETS VALUE AT TOTAL PERIOD NET ASSETS DISTRIBUTIONS VALUE END OF PERIOD RETURN(5) (000'S OMITTED) AFTER WAIVERS --------------- -------------------- -------------------- -------------- --------------- ------------- $ (0.52) $ 3.08 $22.67 18.49% $10,358,449 0.67% (0.48) 3.09 22.81 18.20 1,263,641 0.92 (0.26)(2) (3.85)(2) 19.59(2) (13.79) 9,249,397 0.67 (0.24)(2) (3.88)(2) 19.72(2) (13.99) 672,078 0.90 (2.00)(2) (3.21)(2) 23.44(2) (4.64) 11,836,564 0.66 (1.76)(2) (3.03)(2) 23.60(2) (4.81) 521,205 0.84 (2.80)(2) (3.00)(2) 26.65(2) (0.75) 13,430,507 0.66 (2.79)(2) (3.03)(2) 26.63(2) (0.92) 252,247 0.84 (3.09)(2) (0.20)(2) 29.65(2) 10.59 14,082,895 0.65 (8.93)(2)(3) (6.11)(2)(3) 29.66(2)(3) 10.39 137,318 0.83 (0.56) 0.37 12.32 7.85 2,332,343 0.50 (0.55) 0.35 12.25 7.58 734,768 0.75 (0.06)(2) 0.49(2) 11.95(2) 10.08 2,145,266 0.51 (0.06)(2) 0.47(2) 11.90(2) 9.83 382,864 0.75 (0.56)(2) 0.38(2) 11.46(2) 8.68 1,549,698 0.51 (0.55)(2) 0.36(2) 11.43(2) 8.49 152,254 0.69 (0.05)(2) 1.14(2) 11.08(2) 11.99 1,033,043 0.52 (0.05)(2) 1.12(2) 11.07(2) 11.79 31,551 0.70 (0.65)(2) (0.87)(2) 9.94(2) (2.02) 978,861 0.52 (0.65)(2)(3) (0.88)(2)(3) 9.95(2)(3) (2.19) 15,818 0.70 (0.22) 13.21 44.91 42.38 8,912,749 0.69 (0.16) 13.13 44.76 42.02 1,579,399 0.94 (0.19)(2) (8.05)(2) 31.70(2) (19.70) 6,240,859 0.69 (0.14)(2) (8.05)(2) 31.63(2) (19.88) 588,013 0.92 (16.36)(2) (19.51)(2) 39.75(2) (6.94) 8,734,600 0.68 (16.32)(2) (19.55)(2) 39.68(2) (7.10) 393,241 0.86 (9.67)(2) (1.69)(2) 59.26(2) 13.22 9,581,897 0.66 (9.62)(2) (1.75)(2) 59.23(2) 13.02 136,058 0.84 (3.30)(2) 13.36(2) 60.95(2) 37.46 7,963,003 0.66 (19.92)(2)(3) (3.39)(2)(3) 60.98(2)(3) 37.21 22,993 0.84 <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - --- --------------------------------------- RATIO OF RATIO OF NET EXPENSES INVESTMENT TO AVERAGE INCOME PORTFOLIO NET ASSETS TO AVERAGE TURNOVER BEFORE WAIVERS NET ASSETS RATE(4) -------------- ---------- --------- 0.67% 2.03% 48% 0.92 1.78 48 0.67 2.29 47 0.92 2.07 47 0.66 2.51 34 0.91 2.33 34 0.66 2.47 40 0.91 2.29 40 0.66 2.46 38 0.91 2.28 38 0.50 3.74 215 0.75 3.49 215 0.51 5.58 108 0.76 5.34 108 0.51 5.87 185 0.76 5.69 185 0.52 6.54 169 0.77 6.36 169 0.52 6.09 111 0.77 5.91 111 0.69 0.77 94 0.94 0.52 94 0.69 0.64 94 0.94 0.41 94 0.68 0.57 92 0.93 0.39 92 0.66 0.64 108 0.91 0.46 108 0.66 0.46 66 0.91 0.28 66 </Table> 61 HARTFORD HLS MUTUAL FUNDS FINANCIAL HIGHLIGHTS -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> -- SELECTED PER-SHARE DATA (1) -- ---------------------------------------------------------------------------------------------------- NET REALIZED AND DISTRIBUTIONS NET ASSET NET UNREALIZED TOTAL DIVIDENDS FROM VALUE AT INVESTMENT GAIN FROM FROM NET NET REALIZED BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT GAINS ON OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME INVESTMENTS --------- ---------- ------------ ---------- ---------- ------------- HARTFORD DIVIDEND AND GROWTH HLS FUND For the Year Ended December 31, 2003 Class IA................. $15.09 $0.24 $ 3.79 $ 4.03 $(0.25) $(0.10) Class IB................. 15.07 0.21 3.76 3.97 (0.22) (0.10) For the Year Ended December 31, 2002 Class IA................. 18.80(2) 0.25(2) (3.64)(2) (3.39)(2) (0.23)(2) (0.09)(2) Class IB................. 18.79(2) 0.24(2) (3.66)(2) (3.42)(2) (0.21)(2) (0.09)(2) For the Year Ended December 31, 2001 Class IA................. 21.24(2) 0.31(2) (1.14)(2) (0.83)(2) (0.30)(2) (1.31)(2) Class IB................. 21.24(2) 0.39(2) (1.25)(2) (0.86)(2) (0.28)(2) (1.31)(2) For the Year Ended December 31, 2000 Class IA................. 21.49(2) 0.35(2) 1.78(2) 2.13(2) (0.34)(2) (2.04)(2) Class IB................. 21.51(2) 0.40(2) 1.69(2) 2.09(2) (0.32)(2) (2.04)(2) For the Year Ended December 31, 1999 Class IA................. 21.60(2) 0.34(2) 0.75(2) 1.09(2) (0.35)(2) (0.85)(2) Class IB................. 22.67(2)(3) 0.24(2)(3) 0.77(2)(3) 1.01(2)(3) (0.34)(2)(3) (1.83)(2)(3) HARTFORD INTERNATIONAL OPPORTUNITIES HLS FUND For the Year Ended December 31, 2003 Class IA................. 7.66 0.09 2.44 2.53 (0.08) -- Class IB................. 7.66 0.07 2.43 2.50 (0.07) -- For the Year Ended December 31, 2002 Class IA................. 9.53(2) 0.17(2) (1.94)(2) (1.77)(2) (0.10)(2) --(2) Class IB................. 9.51(2) 0.14(2) (1.91)(2) (1.77)(2) (0.08)(2) --(2) For the Year Ended December 31, 2001 Class IA................. 13.64(2) 0.12(2) (2.61)(2) (2.49)(2) (0.01)(2) (1.61)(2) Class IB................. 13.65(2) 0.12(2) (2.63)(2) (2.51)(2) (0.02)(2) (1.61)(2) For the Year Ended December 31, 2000 Class IA................. 18.76(2) 0.18(2) (3.14)(2) (2.96)(2) (0.23)(2) (1.93)(2) Class IB................. 18.76(2) 0.25(2) (3.24)(2) (2.99)(2) (0.19)(2) (1.93)(2) For the Year Ended December 31, 1999 Class IA................. 13.55(2) 0.19(2) 5.20(2) 5.39(2) (0.18)(2) --(2) Class IB................. 13.57(2)(3) 0.17(2)(3) 5.19(2)(3) 5.36(2)(3) (0.17)(2)(3) --(2)(3) HARTFORD MONEY MARKET HLS FUND For the Year Ended December 31, 2003 Class IA................. 1.00 0.01 -- 0.01 (0.01) -- Class IB................. 1.00 -- -- -- -- -- For the Year Ended December 31, 2002 Class IA................. 1.00 0.01 -- 0.01 (0.01) -- Class IB................. 1.00 0.01 -- 0.01 (0.01) -- For the Year Ended December 31, 2001 Class IA................. 1.00 0.04 -- 0.04 (0.04) -- Class IB................. 1.00 0.04 -- 0.04 (0.04) -- For the Year Ended December 31, 2000 Class IA................. 1.00 0.06 -- 0.06 (0.06) -- Class IB................. 1.00 0.06 -- 0.06 (0.06) -- For the Year Ended December 31, 1999 Class IA................. 1.00 0.07 -- 0.07 (0.07) -- Class IB................. 1.00 0.07 -- 0.07 (0.07) -- </Table> See Notes to Financial Statements. 62 - -------------------------------------------------------------------------------- <Table> <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - ------------------------------------------------------------------------------------------------------------- RATIO OF NET INCREASE NET ASSETS EXPENSES (DECREASE) IN NET ASSET AT END OF TO AVERAGE TOTAL NET ASSETS VALUE AT TOTAL PERIOD NET ASSETS DISTRIBUTIONS VALUE END OF PERIOD RETURN(5) (000'S OMITTED) AFTER WAIVERS ------------- --------------- ----------------- ----------------- --------------- ------------- $(0.35) $ 3.68 $18.77 26.80% $3,927,415 0.69% (0.32) 3.65 18.72 26.48 902,779 0.94 (0.32)(2) (3.71)(2) 15.09(2) (14.23) 2,810,625 0.69 (0.30)(2) (3.72)(2) 15.07(2) (14.42) 327,617 0.92 (1.61)(2) (2.44)(2) 18.80(2) (4.04) 3,190,773 0.68 (1.59)(2) (2.45)(2) 18.79(2) (4.21) 153,848 0.86 (2.38)(2) (0.25)(2) 21.24(2) 10.95 3,189,857 0.68 (2.36)(2) (0.27)(2) 21.24(2) 10.75 35,415 0.86 (1.20)(2) (0.11)(2) 21.49(2) 5.31 3,207,733 0.68 (2.17)(2)(3) (1.16)(2)(3) 21.51(2)(3) 5.12 16,087 0.86 (0.08) 2.45 10.11 33.10 823,760 0.83 (0.07) 2.43 10.09 32.76 76,246 1.08 (0.10)(2) (1.87)(2) 7.66(2) (17.93) 646,903 0.81 (0.08)(2) (1.85)(2) 7.66(2) (18.12) 26,641 1.04 (1.62)(2) (4.11)(2) 9.53(2) (18.73) 941,934 0.81 (1.63)(2) (4.14)(2) 9.51(2) (18.88) 22,277 0.99 (2.16)(2) (5.12)(2) 13.64(2) (17.10) 1,326,609 0.78 (2.12)(2) (5.11)(2) 13.65(2) (17.25) 18,682 0.96 (0.18)(2) 5.21(2) 18.76(2) 39.86 1,574,836 0.78 (0.17)(2)(3) 5.19(2)(3) 18.76(2)(3) 39.61 3,203 0.96 (0.01) -- 1.00 0.75 1,609,439 0.49 -- -- 1.00 0.50 240,930 0.74 (0.01) -- 1.00 1.47 2,319,456 0.49 (0.01) -- 1.00 1.24 261,914 0.72 (0.04) -- 1.00 3.87 1,867,520 0.48 (0.04) -- 1.00 3.68 152,129 0.66 (0.06) -- 1.00 6.10 1,242,275 0.48 (0.06) -- 1.00 5.91 36,270 0.66 (0.07) -- 1.00 4.89 1,257,436 0.47 (0.07) -- 1.00 4.71 8,804 0.65 <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - --- --------------------------------------- RATIO OF RATIO OF NET EXPENSES INVESTMENT TO AVERAGE INCOME PORTFOLIO NET ASSETS TO AVERAGE TURNOVER BEFORE WAIVERS NET ASSETS RATE(4) -------------- ---------- --------- 0.69% 1.61% 31% 0.94 1.36 31 0.69 1.56 43 0.94 1.33 43 0.68 1.66 61 0.93 1.48 61 0.68 1.70 59 0.93 1.52 59 0.68 1.60 56 0.93 1.42 56 0.83 1.08 144 1.08 0.83 144 0.81 1.23 161 1.06 1.00 161 0.81 1.10 144 1.06 0.92 144 0.78 1.16 159 1.03 0.98 159 0.78 1.20 133 1.03 1.02 133 0.49 0.75 -- 0.74 0.50 -- 0.49 1.43 -- 0.74 1.20 -- 0.48 3.58 -- 0.73 3.40 -- 0.48 5.91 -- 0.73 5.73 -- 0.47 4.81 -- 0.72 4.63 -- </Table> 63 HARTFORD HLS MUTUAL FUNDS FINANCIAL HIGHLIGHTS -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> -- SELECTED PER-SHARE DATA (1) -- ---------------------------------------------------------------------------------------------------- NET REALIZED AND DISTRIBUTIONS NET ASSET NET UNREALIZED TOTAL DIVIDENDS FROM VALUE AT INVESTMENT GAIN FROM FROM NET NET REALIZED BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT GAINS ON OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME INVESTMENTS --------- ---------- ------------ ---------- ---------- ------------- HARTFORD SMALL COMPANY HLS FUND For the Year Ended December 31, 2003 Class IA................. $ 9.29 $(0.04) $ 5.24 $ 5.20 $ -- $ -- Class IB................. 9.23 (0.04) 5.16 5.12 -- -- For the Year Ended December 31, 2002 Class IA................. 13.32(2) (0.08)(2) (3.95)(2) (4.03)(2) --(2) --(2) Class IB................. 13.26(2) (0.06)(2) (3.97)(2) (4.03)(2) --(2) --(2) For the Year Ended December 31, 2001 Class IA................. 16.87(2) 0.01(2) (2.53)(2) (2.52)(2) --(2) (1.03)(2) Class IB................. 16.83(2) (0.01)(2) (2.53)(2) (2.54)(2) --(2) (1.03)(2) For the Year Ended December 31, 2000 Class IA................. 21.88(2) 0.03(2) (2.54)(2) (2.51)(2) --(2) (2.50)(2) Class IB................. 21.87(2) 0.03(2) (2.57)(2) (2.54)(2) --(2) (2.50)(2) For the Year Ended December 31, 1999 Class IA................. 13.21(2) (0.05)(2) 8.75(2) 8.70(2) --(2) (0.03)(2) Class IB................. 13.23(2)(3) (0.04)(2)(3) 8.71(2)(3) 8.67(2)(3) --(2)(3) (0.03)(2)(3) HARTFORD STOCK HLS FUND For the Year Ended December 31, 2003 Class IA................. 35.46 0.46 8.93 9.39 (0.48) -- Class IB................. 35.42 0.38 8.88 9.26 (0.39) -- For the Year Ended December 31, 2002 Class IA................. 47.36(2) 0.43(2) (11.94)(2) (11.51)(2) (0.39)(2) --(2) Class IB................. 47.31(2) 0.38(2) (11.95)(2) (11.57)(2) (0.32)(2) --(2) For the Year Ended December 31, 2001 Class IA................. 58.80(2) 0.41(2) (7.42)(2) (7.01)(2) (0.38)(2) (4.05)(2) Class IB................. 58.79(2) 0.46(2) (7.57)(2) (7.11)(2) (0.32)(2) (4.05)(2) For the Year Ended December 31, 2000 Class IA................. 71.47(2) 0.39(2) (5.00)(2) (4.61)(2) (0.41)(2) (7.65)(2) Class IB................. 71.51(2) 0.74(2) (5.47)(2) (4.72)(2) (0.34)(2) (7.66)(2) For the Year Ended December 31, 1999 Class IA................. 65.62(2) 0.50(2) 11.43(2) 11.93(2) (0.49)(2) (5.59)(2) Class IB................. 118.84(2)(3) 0.21(2)(3) 12.00(2)(3) 12.21(2)(3) (0.56)(2)(3) (58.98)(2)(3) </Table> - --------------- (1) Information presented relates to a share of capital stock outstanding for the indicated period. (2) Per shares amounts have been restated to reflect a reverse stock split for Class IB shares effective November 22, 2002. (See Note 11(a)). (3) Per shares amounts have been restated to reflect a reverse stock split for Class IA and IB shares effective September 17, 1999. (See Note 11(b)). (4) Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. (5) Returns include the Fund level expenses, but exclude the insurance charges, if returns had taken into account insurance charges, performance would have been lower. See Notes to Financial Statements. 64 - -------------------------------------------------------------------------------- <Table> <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - --------------------------------------------------------------------------------------------------------------- RATIO OF NET INCREASE NET ASSETS EXPENSES (DECREASE) IN NET ASSET AT END OF TO AVERAGE TOTAL NET ASSETS VALUE AT TOTAL PERIOD NET ASSETS DISTRIBUTIONS VALUE END OF PERIOD RETURN(5) (000'S OMITTED) AFTER WAIVERS --------------- ----------------- ----------------- --------------- --------------- ------------- $ -- $ 5.20 $14.49 55.87% $ 851,283 0.76% -- 5.12 14.35 55.48 190,456 1.01 --(2) (4.03)(2) 9.29(2) (30.23) 495,074 0.77 --(2) (4.03)(2) 9.23(2) (30.39) 66,378 1.00 (1.03)(2) (3.55)(2) 13.32(2) (14.92) 745,253 0.76 (1.03)(2) (3.57)(2) 13.26(2) (15.07) 59,371 0.94 (2.50)(2) (5.01)(2) 16.87(2) (13.12) 908,886 0.74 (2.50)(2) (5.04)(2) 16.83(2) (13.28) 40,967 0.92 (0.03)(2) 8.67(2) 21.88(2) 65.83 757,302 0.78 (0.03)(2)(3) 8.64(2)(3) 21.87(2)(3) 65.54 10,200 0.96 (0.48) 8.91 44.37 26.47 6,014,675 0.49 (0.39) 8.87 44.29 26.16 562,979 0.74 (0.39)(2) (11.90)(2) 35.46(2) (24.25) 5,094,276 0.49 (0.32)(2) (11.89)(2) 35.42(2) (24.42) 296,767 0.72 (4.43)(2) (11.44)(2) 47.36(2) (12.23) 7,834,643 0.49 (4.37)(2) (11.48)(2) 47.31(2) (12.39) 271,475 0.67 (8.06)(2) (12.67)(2) 58.80(2) (7.04) 9,590,018 0.48 (8.00)(2) (12.72)(2) 58.79(2) (7.21) 136,077 0.66 (6.08)(2) 5.85(2) 71.47(2) 19.78 9,400,385 0.48 (59.54)(2)(3) (4.73)(2)(3) 71.51(2)(3) 19.57 47,439 0.66 <Caption> -- RATIOS AND SUPPLEMENTAL DATA -- - --- --------------------------------------- RATIO OF RATIO OF NET EXPENSES INVESTMENT TO AVERAGE INCOME PORTFOLIO NET ASSETS TO AVERAGE TURNOVER BEFORE WAIVERS NET ASSETS RATE(4) -------------- ---------- --------- 0.76% (0.49)% 171% 1.01 (0.74) 171 0.77 (0.30) 222 1.02 (0.53) 222 0.76 0.03 227 1.01 (0.15) 227 0.74 -- 195 0.99 (0.18) 195 0.78 (0.45) 181 1.03 (0.63) 181 0.49 1.18 37 0.74 0.93 37 0.49 0.97 44 0.74 0.75 44 0.49 0.80 39 0.74 0.62 39 0.48 0.64 40 0.73 0.46 40 0.48 0.80 39 0.73 0.62 39 </Table> 65 REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF HARTFORD SERIES FUND, INC. - -------------------------------------------------------------------------------- We have audited the accompanying statements of net assets of the Hartford Advisers HLS Fund, Hartford Bond HLS Fund, Hartford Capital Appreciation HLS Fund, Hartford Dividend and Growth HLS Fund, Hartford International Opportunities HLS Fund, Hartford Money Market HLS Fund, Hartford Small Company HLS Fund and Hartford Stock HLS Fund (eight of the portfolios comprising Hartford Series Fund, Inc.) (collectively, the "Funds") as of December 31, 2003, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the two years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for each of the three years in the period ended December 31, 2001 for the Hartford Series Fund, Inc. were audited by other auditors who have ceased operations and whose report, dated February 6, 2002, expressed an unqualified opinion on those financial highlights. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights 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 securities owned as of December 31, 2003 by correspondence with the custodian and brokers, or by other appropriate auditing procedures where replies from brokers were not received. 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 and financial highlights referred to above present fairly, in all material respects, the financial position of the Funds identified above at December 31, 2003, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the two years in the period then ended, in conformity with accounting principles generally accepted in the United States. /s/ ERNST & YOUNG LLP Boston, Massachusetts February 6, 2004 66 HARTFORD SERIES FUND, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) - -------------------------------------------------------------------------------- The Board of Directors ("Board") is responsible for overall management of the Fund. The Board may exercise all powers of the Fund, except those powers that are conferred solely upon or reserved to the shareholders. The following table provides information about the Fund's directors and officers. The business address for all directors and officers is c/o Hartford Series Fund, Inc., P.O. Box 2999, Hartford, CT 06104-2999, except for Tamara L. Fagely and Robert W. Beltz, Jr., whose business address is 500 Bielenberg Dr., Woodbury, MN 55125. - -------------------------------------------------------------------------------- <Table> <Caption> NON-INTERESTED DIRECTORS - ----------------------------------------------------------------------------------------------------- TERM OF POSITION HELD OFFICE* AND WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) NAME AND AGE COMPANY TIME SERVED: DURING PAST 5 YEARS - ----------------------------------------------------------------------------------------------------- LYNN S. BIRDSONG Director 2003 From 1979 to 2002, Mr. Birdsong was a (age 57) managing director of Zurich Scudder Investments, an investment management firm. In 2003, Mr. Birdsong became an independent director of the Atlantic Whitehall Funds and The Japan Fund; during his employment with Scudder, he was an interested director of The Japan Fund. Since 1981, Mr. Birdsong has been a partner in Birdsong Company, an advertising specialty firm. He is also a Director of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ----------------------------------------------------------------------------------------------------- WINIFRED E. COLEMAN Director 1995 (1) Ms. Coleman has served as President of (age 71) Saint Joseph College since 1991 and President of Cashel House, Ltd. (retail) since 1985. She is also a Director of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ----------------------------------------------------------------------------------------------------- ROBERT M. GAVIN Director 2002 Dr. Gavin is an educational consultant. (age 63) Prior to September 1, 2001, he was President of Cranbrook Education Community; and prior to July 1996, he was President of Macalester College, St. Paul, Minnesota. He is also a Director of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ----------------------------------------------------------------------------------------------------- DUANE E. HILL Director 2001 Mr. Hill is Partner Emeritus and a founding (age 58) partner of TSG Capital Group, a private equity investment firm that serves as sponsor and lead investor in leveraged buyouts of middle market companies. Mr. Hill is also a Partner of TSG Ventures L.P., a private equity investment company that invests primarily in minority-owned small businesses. He is also a Director of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ----------------------------------------------------------------------------------------------------- <Caption> NON-INTERESTED DIRECTORS NON-INTERESTED DIRECTORS - ------------------------ ----------------------------------- NUMBER OF PORTFOLIOS IN FUND COMPLEX OTHER OVERSEEN BY DIRECTORSHIPS NAME AND AGE DIRECTOR HELD BY DIRECTOR - ------------------------ ----------------------------------- LYNN S. BIRDSONG 72 N/A (age 57) - ---------------------------------------------------------------------------------- WINIFRED E. COLEMAN 72 N/A (age 71) - ----------------------------------------------------------------------------------------------------- ROBERT M. GAVIN 72 Dr. Gavin is a (age 63) Director of Systems & Computer Technology Corporation. - ----------------------------------------------------------------------------------------------------- DUANE E. HILL 72 N/A (age 58) - ----------------------------------------------------------------------------------------------------- </Table> 67 HARTFORD SERIES FUND, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> NON-INTERESTED DIRECTORS - ----------------------------------------------------------------------------------------------------- TERM OF POSITION HELD OFFICE* AND WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) NAME AND AGE COMPANY TIME SERVED: DURING PAST 5 YEARS - ----------------------------------------------------------------------------------------------------- PHILLIP O. PETERSON Director 2002 Mr. Peterson is a mutual fund industry (age 59) consultant. He was a partner of KPMG LLP until July 1999. In January 2004, Mr. Peterson was appointed independent president of the Strong Mutual Funds. He is also a Director of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ----------------------------------------------------------------------------------------------------- MILLARD H. PRYOR, JR. Director 1977 (1) Mr. Pryor has served as Managing Director (age 70) of Pryor & Clark Company (real estate investment), Hartford, Connecticut, since June 1992. He is also a Director of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc., and The Hartford Income Shares Fund, Inc. - ----------------------------------------------------------------------------------------------------- <Caption> NON-INTERESTED DIRECTORS NON-INTERESTED DIRECTORS - ------------------------ ----------------------------------- NUMBER OF PORTFOLIOS IN FUND COMPLEX OTHER OVERSEEN BY DIRECTORSHIPS NAME AND AGE DIRECTOR HELD BY DIRECTOR - ------------------------ ----------------------------------- PHILLIP O. PETERSON 72 N/A (age 59) - ----------------------------------------------------------------------------------------------------- MILLARD H. PRYOR, JR. 72 Mr. Pryor is a (age 70) Director of Infodata Systems, Inc. (software company) and CompuDyne Corporation (security products and services) and August Financial Holding Company (advisory services). - ----------------------------------------------------------------------------------------------------- </Table> <Table> <Caption> INTERESTED DIRECTORS AND OFFICERS - ---------------------------------------------------------------------------------------------------------------- THOMAS M. MARRA(2) Director and 2002 Mr. Marra is President and Chief 72 (age 45) Chairman of Operating Officer of Hartford Life, Inc. the Board He is also a member of the Board of Directors and a member of the Office of the Chairman for The Hartford Financial Services Group, Inc. ("The Hartford"), the parent company of Hartford Life. Mr. Marra was named President of Hartford Life in 2001 and COO in 2000, and served as Director of Hartford Life's Investment Products Division from 1998 to 2000. He was head of the company's Individual Life and Annuities Division from 1994 to 1998 after being promoted to Senior Vice President in 1994 and to Executive Vice President in 1996. Mr. Marra is also a Managing Member and President of Hartford Investment Financial Services, LLC ("HIFSCO") and HL Investment Advisors LLC ("HL Advisors"). He is also a Director and Chairman of the Board of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - ---------------------------------------------------------------------------------------------------------------- <Caption> INTERESTED DIRECTORS AND OFFICERS - ---------------------------------------------------------------------------------------------------------------- THOMAS M. MARRA(2) Mr. Marra is a member (age 45) of the Board of Directors of The Hartford. - ---------------------------------------------------------------------------------------------------------------- </Table> 68 HARTFORD SERIES FUND, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> INTERESTED DIRECTORS AND OFFICERS - -------------------------------------------------------------------------------------------------- TERM OF POSITION HELD OFFICE* AND WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) NAME AND AGE COMPANY TIME SERVED: DURING PAST 5 YEARS - -------------------------------------------------------------------------------------------------- LOWNDES A. SMITH(2) Director 1996 Mr. Smith served as Vice Chairman of The (age 64) Hartford from February 1997 to January 2002, as President and Chief Executive Officer of Hartford Life, Inc. from February 1997 to January 2002, and as President and Chief Operating Officer of The Hartford Life Insurance Companies from January 1989 to January 2002. Mr. Smith is also a Director of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - -------------------------------------------------------------------------------------------------- DAVID M. ZNAMIEROWSKI(2) President and 1999 Mr. Znamierowski currently serves as (age 43) Director President of Hartford Investment Management Company ("Hartford Investment"), Senior Vice President for Hartford Life, Inc., and Senior Vice President and Chief Investment Officer for Hartford Life Insurance Company. Mr. Znamierowski is also a Managing Member and Senior Vice President of HIFSCO and HL Advisors. Mr. Znamierowski is Group Senior Vice President and Chief Investment Officer for The Hartford. In addition, he serves as President and Director of The Hartford Mutual Funds, Inc. and as President of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - -------------------------------------------------------------------------------------------------- ROBERT W. BELTZ, JR. Vice President 2002 Mr. Beltz currently serves as Vice (age 54) President Securities Operations of Hartford Administrative Services Company ("HASCO"). Since December 2001, he has served as Assistant Vice President of Hartford Life Insurance Company. In addition, he is Vice President of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - -------------------------------------------------------------------------------------------------- KEVIN J. CARR Vice President 1996 Mr. Carr has served as The Hartford's (age 49) and Secretary Assistant General Counsel since 1999, Counsel since November 1996 and Associate Counsel since November 1995. Mr. Carr is also Vice President and Assistant Secretary of HL Advisors and HIFSCO and Assistant Secretary of Hartford Investment. He is also Vice President and Secretary of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - -------------------------------------------------------------------------------------------------- <Caption> INTERESTED DIRECTORS AND INTERESTED DIRECTORS AND OFFICERS - ------------------------ ------------------------------------- NUMBER OF PORTFOLIOS IN FUND COMPLEX OTHER OVERSEEN BY DIRECTORSHIPS NAME AND AGE DIRECTOR HELD BY DIRECTOR - ------------------------ ------------------------------------- LOWNDES A. SMITH(2) 72 N/A (age 64) - -------------------------------------------------------------------------------------------------- DAVID M. ZNAMIEROWSKI(2) 53 N/A (age 43) - -------------------------------------------------------------------------------------------------- ROBERT W. BELTZ, JR. N/A N/A (age 54) - -------------------------------------------------------------------------------------------------- KEVIN J. CARR N/A N/A (age 49) - -------------------------------------------------------------------------------------------------- </Table> 69 HARTFORD SERIES FUND, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> INTERESTED DIRECTORS AND OFFICERS - -------------------------------------------------------------------------------------------------- TERM OF POSITION HELD OFFICE* AND WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) NAME AND AGE COMPANY TIME SERVED: DURING PAST 5 YEARS - -------------------------------------------------------------------------------------------------- WILLIAM H. DAVISON, JR. Vice President 2002 Mr. Davison is a Managing Director and (age 46) Director of the Funds Management Group of Hartford Investment. Mr. Davison is also a Senior Vice President of HIFSCO and HL Advisors. In addition, he serves as Vice President of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - -------------------------------------------------------------------------------------------------- TAMARA L. FAGELY Vice President 2002 Ms. Fagely has been Vice President of (age 45) HASCO since 1998. Prior to 1998, she was Second Vice President of HASCO. Since December 2001, she has served as Assistant Vice President of Hartford Life Insurance Company. In addition, she is Controller of HIFSCO, Vice President of Hartford HLS Series Fund II, Inc. and Vice President, Controller and Treasurer of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - -------------------------------------------------------------------------------------------------- BRUCE FERRIS Vice President 2002 Mr. Ferris serves as Senior Vice (age 48) President and a Director of Sales and Marketing in the Investment Products Division of Hartford Life Insurance Company. He is also a Managing Member of HL Advisors. In addition, Mr. Ferris is Vice President of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - -------------------------------------------------------------------------------------------------- MARY JANE FORTIN Vice President 2003 Ms. Fortin is Senior Vice President and (age 39) Director of Mutual Funds and 529 Programs for Hartford Life. In addition, she is Vice President of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. Previously, Ms. Fortin served as Senior Vice President and Chief Accounting Officer of Hartford Life. She joined Hartford Life in 1997. - -------------------------------------------------------------------------------------------------- GEORGE R. JAY Vice 1996 Mr. Jay serves as Assistant Vice (age 51) President, President of Hartford Life Insurance Controller and Company's Equity Products Department. He Treasurer is also Controller of HL Advisors, Vice President, Controller and Treasurer of Hartford HLS Series Fund II, Inc. and Vice President of The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. - -------------------------------------------------------------------------------------------------- <Caption> INTERESTED DIRECTORS AND INTERESTED DIRECTORS AND OFFICERS - ------------------------ ------------------------------------- NUMBER OF PORTFOLIOS IN FUND COMPLEX OTHER OVERSEEN BY DIRECTORSHIPS NAME AND AGE DIRECTOR HELD BY DIRECTOR - ------------------------ ------------------------------------- WILLIAM H. DAVISON, JR. N/A N/A (age 46) - -------------------------------------------------------------------------------------------------- TAMARA L. FAGELY N/A N/A (age 45) - -------------------------------------------------------------------------------------------------- BRUCE FERRIS N/A N/A (age 48) - -------------------------------------------------------------------------------------------------- MARY JANE FORTIN N/A N/A (age 39) - -------------------------------------------------------------------------------------------------- GEORGE R. JAY N/A N/A (age 51) - -------------------------------------------------------------------------------------------------- </Table> 70 HARTFORD SERIES FUND, INC. DIRECTOR AND OFFICER INFORMATION (UNAUDITED) -- (CONTINUED) - -------------------------------------------------------------------------------- <Table> <Caption> INTERESTED DIRECTORS AND OFFICERS - -------------------------------------------------------------------------------------------------- TERM OF POSITION HELD OFFICE* AND WITH THE LENGTH OF PRINCIPAL OCCUPATION(S) NAME AND AGE COMPANY TIME SERVED: DURING PAST 5 YEARS - -------------------------------------------------------------------------------------------------- STEPHEN T. JOYCE Vice President 2000 Mr. Joyce currently serves as Senior Vice (age 44) President and Director of the Institutional Products Group for Hartford Life Insurance Company. Mr. Joyce is also Senior Vice President HL Advisors and Vice President of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. Previously, he served as Vice President (1997-1999) and Assistant Vice President (1994-1997) of Hartford Life Insurance Company. - -------------------------------------------------------------------------------------------------- DAVID N. LEVENSON Vice President 2000 Mr. Levenson serves as Senior Vice (age 37) President of Hartford Life Insurance Company's Retail Product Management Group and is responsible for all retail product management and profitability. Mr. Levenson is also a Senior Vice President of HIFSCO. In addition, he serves as Vice President of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. Mr. Levenson joined The Hartford in 1995. - -------------------------------------------------------------------------------------------------- JOHN C. WALTERS Vice President 2000 Mr. Walters serves as Executive Vice (age 41) President and Director of the Investment Products Division of Hartford Life Insurance Company. Mr. Walters is also a Managing Member and Executive Vice President of HIFSCO and HL Advisors. In addition, he is Vice President of Hartford HLS Series Fund II, Inc., The Hartford Mutual Funds, Inc., The Hartford Mutual Funds II, Inc. and The Hartford Income Shares Fund, Inc. Previously, Mr. Walters was with First Union Securities. - -------------------------------------------------------------------------------------------------- <Caption> INTERESTED DIRECTORS AND INTERESTED DIRECTORS AND OFFICERS - ------------------------ ------------------------------------- NUMBER OF PORTFOLIOS IN FUND COMPLEX OTHER OVERSEEN BY DIRECTORSHIPS NAME AND AGE DIRECTOR HELD BY DIRECTOR - ------------------------ ------------------------------------- STEPHEN T. JOYCE N/A N/A (age 44) - -------------------------------------------------------------------------------------------------- DAVID N. LEVENSON N/A N/A (age 37) - -------------------------------------------------------------------------------------------------- JOHN C. WALTERS N/A N/A (age 41) - -------------------------------------------------------------------------------------------------- </Table> * Each director and officer may serve until his or her successor is elected and qualifies. (1) Ms. Coleman and Mr. Pryor served as directors, beginning in 1995 and 1977, respectively, of certain Maryland corporations (each of which was registered with the SEC as an open-end management investment company) that were reorganized as investment portfolios (series) of Hartford Series Fund, Inc. on August 28, 2002. (2) "Interested person" of the Company as defined in the Investment Company Act of 1940 because of the person's affiliation with or equity ownership of [HARTFORD INVESTMENT FINANCIAL SERVICES, LLC] or affiliated companies. The Fund's Statement of Additional Information includes further information about fund directors and is available without charge upon request by calling 1-800-862-6668 or writing: Hartford HLS Funds, c/o Individual Annuity Services, P.O. Box 5085, Hartford, CT 06102-5085. 71 PRIVACY POLICY AND PRACTICES OF THE HARTFORD FINANCIAL SERVICES GROUP, INC. AND ITS AFFILIATES (HEREIN CALLED "WE, OUR, AND US") This Privacy Policy applies to our United States Operations We value your trust. We are committed to the responsible: a) management; b) use; and c) protection; of PERSONAL INFORMATION. This notice describes how we collect, disclose, and protect PERSONAL INFORMATION. We collect PERSONAL INFORMATION to: a) service your TRANSACTIONS with us; and b) support our business functions. We may obtain PERSONAL INFORMATION from: a) YOU; b) your TRANSACTIONS with us; and c) third parties such as a consumer-reporting agency. Based on the type of product or service YOU apply for or get from us, PERSONAL INFORMATION such as: a) your name; b) your address; c) your income; d) your payment; or e) your credit history; may be gathered from sources such as applications, TRANSACTIONS, and consumer reports. To serve YOU and service our business, we may share certain PERSONAL INFORMATION. We will share PERSONAL INFORMATION, only as allowed by law, with affiliates such as: a) our insurance companies; b) our employee agents; c) our brokerage firms; and d) our administrators. As allowed by law, we may share PERSONAL FINANCIAL INFORMATION with our affiliates to: a) market our products; or b) market our services; to YOU without providing YOU with an option to prevent these disclosures. We may also share PERSONAL INFORMATION, only as allowed by law, with unaffiliated third parties including: a) independent agents; b) brokerage firms; c) insurance companies; d) administrators; and e) service providers; who help us serve YOU and service our business. When allowed by law, we may share certain PERSONAL FINANCIAL INFORMATION with other unaffiliated third parties who assist us by performing services or functions such as: a) taking surveys; b) marketing our products or services; or c) offering financial products or services under a joint agreement between us and one or more financial institutions. We will not sell or share your PERSONAL FINANCIAL INFORMATION with anyone for purposes unrelated to our business functions without offering YOU the opportunity to: a) "opt-out;" or b) "opt-in;" as required by law. We only disclose PERSONAL HEALTH INFORMATION with: a) your proper written authorization; or b) as otherwise allowed or required by law. Our employees have access to PERSONAL INFORMATION in the course of doing their jobs, such as: a) underwriting policies; b) paying claims; c) developing new products; or d) advising customers of our products and services. We use manual and electronic security procedures to maintain: a) the confidentiality; and b) the integrity of; PERSONAL INFORMATION that we have. We use these procedures to guard against unauthorized access. 72 Some techniques we use to protect PERSONAL INFORMATION include: a) secured files; b) user authentication; c) encryption; d) firewall technology; and e) the use of detection software. We are responsible for and must: a) identify information to be protected; b) provide an adequate level of protection for that data; c) grant access to protected data only to those people who must use it in the performance of their job-related duties. Employees who violate our Privacy Policy will be subject to discipline, which may include ending their employment with us. At the start of our business relationship, we will give YOU a copy of our current Privacy Policy. We will also give YOU a copy of our current Privacy Policy once a year if YOU maintain a continuing business relationship with us. We will continue to follow our Privacy Policy regarding PERSONAL INFORMATION even when a business relationship no longer exists between us. As used in this Privacy Notice: APPLICATION means your request for our product or service. PERSONAL FINANCIAL INFORMATION means financial information such as: a) credit history; b) income; c) financial benefits; or d) policy or claim information. PERSONAL HEALTH INFORMATION means health information such as: a) your medical records; or b) information about your illness, disability or injury. PERSONAL INFORMATION means information that identifies YOU personally and is not otherwise available to the public. It includes: a) PERSONAL FINANCIAL INFORMATION; and b) PERSONAL HEALTH INFORMATION. TRANSACTION means your business dealings with us, such as: a) your APPLICATION; b) your request for us to pay a claim; and c) your request for us to take an action on your account. YOU means an individual who has given us PERSONAL INFORMATION in conjunction with: a) asking about; b) applying for; or c) obtaining; a financial product or service from us if the product or service is used mainly for personal, family, or household purposes. This Privacy Policy is being provided on behalf of the following affiliates of The Hartford Financial Services Group, Inc.: American Maturity Life Insurance Company; Capstone Risk Management, LLC; First State Insurance Company; Hart Life Insurance Company; Hartford Accident & Indemnity Company; Hartford Administrative Services Company; Hartford Casualty Insurance Company; Hartford Equity Sales Company, Inc.; Hartford Fire Insurance Company; Hartford HLS Series Fund II, Inc.; Hartford Insurance Company of Illinois; Hartford Insurance Company of the Midwest; Hartford Insurance Company of the Southeast; Hartford International Life Reassurance Corporation; Hartford Investment Financial Services, LLC; Hartford Investment Management Company; Hartford Life & Accident Insurance Company; Hartford Life and Annuity Insurance Company; Hartford Life Insurance Company; Hartford Lloyd's Insurance Company; Hartford Securities Distribution Company, Inc.; Hartford Series Fund, Inc.; Hartford Specialty Company; Hartford Underwriters Insurance Company; Hartford-Comprehensive Employee Benefit Service Company; International Corporate Marketing Group, LLC; New England Insurance Company; Nutmeg Insurance Agency, Inc.; Nutmeg Insurance Company; Nutmeg Life Insurance Company; Omni General Agency, Inc.; Omni Indemnity Company; Omni Insurance Company; P2P Link, LLC; Pacific Insurance Company, Limited; Planco Financial Services, Inc.; Property and Casualty Insurance Company of Hartford; Sentinel Insurance Company, Ltd.; Servus Life Insurance Company; Specialty Risk Services, Inc.; The Hartford Income Shares Fund, Inc.; The Hartford Mutual Funds II, Inc.; The Hartford Mutual Funds, Inc.; Trumbull Insurance Company; Trumbull Services, L.L.C.; Twin City Fire Insurance Company; Woodbury Financial Services, Inc. 73 If you'd like to write us, please send your note or letter to one of the following addresses: BY REGULAR MAIL: The Hartford Attention: IPS P.O. Box 5085 Hartford, CT 06102-5085 ON THE WORLD WIDE WEB: www.hartfordinvestor.com ISSUER: Hartford Life Insurance Company P.O. Box 2999 Hartford, CT 06104-2999 PRINCIPAL UNDERWRITER: Hartford Securities Distribution Company, Inc. P.O. Box 2999 Hartford, CT 06104-2999 [THE HARTFORD LOGO] INVESTMENT MANAGERS: - - HL Investment Advisors, Inc. P.O. Box 2999 Hartford, CT 06104-2999 INVESTMENT SUB-ADVISERS: Hartford Investment Management Company (HIMCO) P.O. Box 1744 Hartford, CT 06114-1744 Wellington Management Company, LLP 75 State Street Boston, MA 02109 - - Banc of America Capital Management, LLC 101 S. Tryon Street, 9th Floor Charlotte, NC 28255 INVESTMENT SUB-ADVISERS: Brandes Investment Partners, LLC 11988 El Camino Real Suite 500 San Diego, CA 92130-2083 MacKay Shields, LLC 9 West 57th Street, 34th Floor New York, NY 10019 Marsico Capital Management, LLC 1200 17th Street, Suite 1300 Denver, CO 80202 - - AIM Advisors, Inc. 11 Greenway Plaza, Suite 100 Houston, Texas 77046-1173 NATANN-1-04 Printed in U.S.A. (copyright) 2004 The Hartford, Hartford, CT 06115 "The Hartford" is The Hartford Financial Services Group, Inc. and its subsidiaries, including the issuing companies of Hartford Life Insurance Company and Hartford Life and Annuity Insurance Company. The Hartford P.O. Box 5085 Hartford, CT 06102-5085 PRESORTED STANDARD U.S. POSTAGE PAID HUDSON, MA PERMIT NO. 6 ITEM 2. CODE OF ETHICS. Registrant has adopted a code of ethics, which is attached as Exhibit 10(a). ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The Board of Directors of the Registrant has designated Phillip O. Peterson as an Audit Committee Financial Expert. Mr. Peterson is considered by the Board to be an independent director. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. FUND AUDITOR FEE INFORMATION AUDIT FEES. Audit fees for Hartford Series Fund, Inc. totaled approximately $488,761 in 2003 and approximately $265,069 in 2002, including fees associated with the annual audit and filings of the Fund's Form N-1A and Form N-SAR. AUDIT-RELATED FEES. Fees for Hartford Series Fund, Inc. audit-related services totaled approximately $0 in 2003 and approximately $0 in 2002. Audit-related services principally include accounting consultations in connection with new accounting standards. TAX FEES. Fees for tax compliance services to Hartford Series Fund, Inc. totaled approximately $78,710 in 2003 and $54,878 in 2002. ALL OTHER FEES. Fees for all other services to Hartford Series Fund, Inc. not included above totaled approximately $0 in 2003 and $0 in 2002. OTHER AFFILIATE FEES REQUIRED TO BE PRE-APPROVED Beginning with non-audit service contracts entered into on or after May 6, 2003, the audit committee also is required to pre-approve services to certain entities* defined by SEC rules to the extent that the services are determined to have a direct impact on the operations or financial reporting of the fund. The amount of such services that were subject to pre-approval and were pre-approved during 2003 was $105,000 for services classified as Audit-Related, $105,000 for services classified as Tax, and there were no Other services subject to pre-approval. - ---------- * These include the advisor (excluding sub-advisors) and any entity controlling, controlled by or under common control with the advisor that provides ongoing services to the registrant (hereinafter referred to as "affiliates"). AGGREGATE NON-AUDIT FEES The aggregate non-audit fees for Hartford Series Fund, Inc. and all affiliates as defined, totaled approximately $312,332 in 2003 and $236,279 in 2002, including services provided prior to May 6, 2003, the effective date of the pre-approval process. The audit committee has considered the compatibility of the non-audit services that were not subject to pre-approval with the auditor's independence. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable to this filing. ITEM 6. RESERVED. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable to this filing. ITEM 8. RESERVED. ITEM 9. CONTROLS AND PROCEDURES. (a) Based on an evaluation of the Registrant's Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report, the Disclosure Controls and Procedures are effectively designed to ensure that information required to be disclosed by the Registrant is recorded, processed, summarized and reported by the date of this report, including ensuring that information required to be disclosed in the report is accumulated and communicated to the Registrant's management, including the Registrant's officers, as appropriate, to allow timely decisions regarding required disclosure. (b) There were no significant changes in the Registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. ITEM 10. EXHIBITS. (a) Registrant's Code of Ethics in response to Item 2. (b) Section 302 certifications of the principal executive officer and principal financial officer of Registrant. 99 Section 906 certification. 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, thereunto duly authorized. HARTFORD SERIES FUND, INC. Date: February 12, 2004 By: /s/ David M. Znamierowski --------------------------------------- David M. Znamierowski Its: President 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. Date: February 12, 2004 By: /s/ David M. Znamierowksi --------------------------------------- David M. Znamierowski Its: President Date: February 12, 2004 By: /s/ George R. Jay --------------------------------------- George R. Jay Its: Vice President, Controller and Treasurer EXHIBIT LIST 10(a) Code of Ethics 99.CERT 10(b) Certifications (i) Section 302 certification of principal executive officer (ii) Section 302 certification of principal financial officer 99.906CERT 99 Section 906 certification of principal executive officer and principal financial officer