FORM10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

(X) QUARTERLYREPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIESEXCHANGE ACT OF 1934

OR ( ) TRANSITION REPORT UNDERSECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF1934

For The Quarter Ended March 31, 2005

Commission File Number 0-50272

SALOMON SMITHBARNEY AAA ENERGY FUND L.P.II

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(Exact nameof registrant as specified in its charter)

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| NewYork |  | 03-0407557 |
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|                                                              |  |                                      |  |  |  |  |
|--------------------------------------------------------------|--|--------------------------------------|--|--|--|--|
| (Stateor other jurisdiction of incorporation or organization |  | (I.R.S. Employer Identification No.) |
|                                                              |

c/oCitigroup Managed Futures LLC 399 Park Avenue. – 7thFl. New York, New York 10022

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(Address and ZipCode of principal executive offices)

(212) 559-2011

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(Registrant'stelephone number, including area code)

Indicate by checkmark whether the registrant (1) has filed all reports required to befiled by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subjectto such filing requirements for the past 90 days.

YesX        No    

Indicate bycheck mark whether the registrant is an accelerated filer (as definedin Rule 12b-2 of the Exchange Act).

YesX        No    

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SALOMON SMITHBARNEY AAA ENERGY FUND L.P. II

FORM10-Q

INDEX

|                                 |  |                                                                                                                      |  |                                      |  |  |  |  |  |  |
|---------------------------------|--|----------------------------------------------------------------------------------------------------------------------|--|--------------------------------------|--|--|--|--|--|--|
|                            |  |                                                                                                                 |  | PageNumber                           |
| PART I - FinancialInformation:  |  |
|     Item1.  |  | FinancialStatements:                                                                                                 |  |
|                            |  | Statements of FinancialCondition at March 31, 2005 and December 31, 2004(unaudited)                                  |  | 3                                    |
|                            |  | Statements of Income and Expenses and Partners'Capital for the three months ended March 31, 2005 and 2004(unaudited) |  | 4                                    |
|                            |  | Statements of CashFlows for the three months ended March 31, 2005 and 2004(unaudited)                                |  | 5                                    |
|                            |  | Notes to FinancialStatements, including the Financial Statements of SB AAA Master FundLLC (unaudited)                |  | 6 – 14                         |
|     Item2.  |  | Management's Discussion and Analysis of FinancialCondition and Results of Operations                                 |  |     15 –17 |
|     Item 3. |  | Quantitative andQualitative Disclosures about Market Risk                                                            |  | 18                                   |
|     Item 4. |  | Controls andProcedures                                                                                               |  | 19                                   |
| PART II - OtherInformation      |  | 20                                                                                                                   |
|                                 |

2

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PART I

Item 1.Financial Statements

Salomon Smith Barney AAA Energy Fund L.P.II Statements of Financial Condition(Unaudited)

|                                                                                                                                         |  |              |             |                 |  |        |             |        |  |  |
|-----------------------------------------------------------------------------------------------------------------------------------------|--|--------------|-------------|-----------------|--|--------|-------------|--------|--|--|
|                                                                                                                                    |  | March31,2005 |             | December31,2004 |
| Assets:                                                                                                                                 |  |         |        |            |  |   |        |   |
| Investmentin the Master, at fairvalue                                                                                                   |  | $            | 200,758,047 |            |  | $      | 120,251,909 |   |
| Cash                                                                                                                                    |  |         | 102,360     |            |  |   | 50,403      |   |
|                                                                                                                                    |  | $            | 200,860,407 |            |  | $      | 120,302,312 |   |
| Liabilitiesand Partners'Capital:                                                                                                        |  |         |        |            |  |   |        |   |
| Liabilities:                                                                                                                            |  |         |        |            |  |   |        |   |
| Accruedexpenses:                                                                                                                        |  |         |        |            |  |   |        |   |
| Managementfees                                                                                                                          |  | $            | 341,069     |            |  | $      | 203,734     |   |
| Administrativefees                                                                                                                      |  |         | 85,267      |            |  |   | 50,933      |   |
| Other                                                                                                                                   |  |         | 69,842      |            |  |   | 33,562      |   |
| Dueto Special Limited Partner                                                                                                           |  |         | 9,349,327   |            |  |   | —     |   |
| Redemptionspayable                                                                                                                      |  |         | 1,885,807   |            |  |   | 1,990,866   |   |
|                                                                                                                                    |  |         | 11,731,312  |            |  |   | 2,279,095   |   |
| Partners'Capital:                                                                                                                       |  |         |        |            |  |   |        |   |
| General Partner,2,501.2826 Unit equivalents outstanding in 2005 and2004                                                                 |  |         | 3,627,210   |            |  |   | 2,875,825   |   |
| SpecialLimited Partner, 1,486.3421 Redeemable Units of Limited PartnershipInterest outstanding in 2005 and 2004                         |  |         | 2,155,404   |            |  |   | 1,708,907   |   |
| LimitedPartners, 126,433.9069 and 98,664.8238 Redeemable Units of LimitedPartnership Interest outstanding in 2005 and 2004,respectively |  |         | 183,346,481 |            |  |   | 113,438,485 |   |
|                                                                                                                                    |  |         | 189,129,095 |            |  |   | 118,023,217 |   |
|                                                                                                                                    |  | $            | 200,860,407 |            |  | $      | 120,302,312 |   |
|                                                                                                                                         |

SeeAccompanying Notes to Financial Statements.

3

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Salomon Smith Barney AAA Energy Fund L.P.II Statements of Income and Expenses and Partners'Capital(Unaudited)

|                                                                                                                                        |  |                           |             |         |  |        |            |         |  |  |
|----------------------------------------------------------------------------------------------------------------------------------------|--|---------------------------|-------------|---------|--|--------|------------|---------|--|--|
|                                                                                                                                   |  | ThreeMonths EndedMarch31, |
|                                                                                                                                   |  | 2005                      |             | 2004    |
| Income:                                                                                                                                |  |                      |        |    |  |   |       |    |
| Realizedgains on closed positions fromMaster                                                                                           |  | $                         | 11,856,999  |    |  | $      | 9,398,089  |    |
| Change in unrealized gains (losses) on open positionsfrom Master                                                                       |  |                      | 37,234,390  |    |  |   | (495,383   | )  |
| Income allocated from Master                                                                                                           |  |                      | 774,999     |    |  |   | 169,351    |    |
| Expenses allocated fromMaster                                                                                                          |  |                      | (1,233,536  | )  |  |   | (878,831   | )  |
|                                                                                                                                   |  |                      | 48,632,852  |    |  |   | 8,193,226  |    |
| Expenses:                                                                                                                              |  |                      |        |    |  |   |       |    |
| Managementfee                                                                                                                          |  |                      | 859,952     |    |  |   | 479,986    |    |
| Administrativefee                                                                                                                      |  |                      | 214,987     |    |  |   | 119,997    |    |
| Otherexpenses                                                                                                                          |  |                      | 36,280      |    |  |   | 27,791     |    |
|                                                                                                                                   |  |                      | 1,111,219   |    |  |   | 627,774    |    |
| Netincome before allocation to Special LimitedPartner                                                                                  |  |                      | 47,521,633  |    |  |   | 7,565,452  |    |
| Allocationto Special LimitedPartner                                                                                                    |  |                      | (9,349,327  | )  |  |   | —    |    |
| Netincome after allocation to Special LimitedPartner                                                                                   |  |                      | 38,172,306  |    |  |   | 7,565,452  |    |
| Additions– LimitedPartners                                                                                                       |  |                      | 36,875,000  |    |  |   | —    |    |
| Redemptions– LimitedPartners                                                                                                     |  |                      | (3,941,428  | )  |  |   | (8,875,891 | )  |
| Netincrease (decrease) in Partners'capital                                                                                             |  |                      | 71,105,878  |    |  |   | (1,310,439 | )  |
| Partners'capital, beginning ofperiod                                                                                                   |  |                      | 118,023,217 |    |  |   | 96,602,912 |    |
|                                                                                                                                   |  |                      |        |    |  |   |       |    |
| Partners'capital, end ofperiod                                                                                                         |  | $                         | 189,129,095 |    |  | $      | 95,292,473 |    |
| Netasset value per Redeemable Unit (130,421.5316 and 111,427.9026Redeemable Units outstanding at March 31, 2005 and 2004,respectively) |  | $                         | 1,450.14    |    |  | $      | 855.19     |    |
| Netincome per Redeemable Unit of Limited Partnership Interest and GeneralPartner Unitequivalent                                        |  | $                         | 300.40      |    |  | $      | 65.80      |    |
|                                                                                                                                        |

SeeAccompanying Notes to Financial Statements.

4

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Salomon Smith Barney AAA Energy Fund L.P.II Statements of Cash Flows(Unaudited)

|                                                                                           |  |                           |             |         |  |        |            |         |  |  |
|-------------------------------------------------------------------------------------------|--|---------------------------|-------------|---------|--|--------|------------|---------|--|--|
|                                                                                      |  | ThreeMonths EndedMarch31, |
|                                                                                      |  | 2005                      |             | 2004    |
| Cashflows from operatingactivities:                                                       |  |                      |        |    |  |   |       |    |
| Netincome                                                                                 |  | $                         | 38,172,306  |    |  | $      | 7,565,452  |    |
| Adjustmentsto reconcile net income to net cash provided by (used in) operatingactivities: |  |                      |        |    |  |   |       |    |
| Changesin operating assets andliabilities:                                                |  |                      |        |    |  |   |       |    |
| (Increase)decrease in investment in Master, at fairvalue                                  |  |                      | (80,506,138 | )  |  |   | 855,232    |    |
| Accruedexpenses:                                                                          |  |                      |        |    |  |   |       |    |
| Increase(decrease) in managementfees                                                      |  |                      | 137,335     |    |  |   | (1,858     | )  |
| Increase(decrease) in administrativefees                                                  |  |                      | 34,334      |    |  |   | (465       | )  |
| Increase(decrease) inother                                                                |  |                      | 36,280      |    |  |   | 21,791     |    |
| Increase(decrease) in due to Special LimitedPartner                                       |  |                      | 9,349,327   |    |  |   | —    |    |
| Increase(decrease) in redemptionspayable                                                  |  |                      | (105,059    | )  |  |   | 487,319    |    |
| Netcash provided by (used in) operatingactivities                                         |  |                      | (32,881,615 | )  |  |   | 8,927,471  |    |
| Cashflows from financingactivities:                                                       |  |                      |        |    |  |   |       |    |
| Proceeds fromadditions – LimitedPartners                                            |  |                      | 36,875,000  |    |  |   | —    |    |
| Paymentsfor redemptions – LimitedPartners                                           |  |                      | (3,941,428  | )  |  |   | (8,875,891 | )  |
| Netcash provided by (used in) financingactivities                                         |  |                      | 32,933,572  |    |  |   | (8,875,891 | )  |
| Netchange incash                                                                          |  |                      | 51,957      |    |  |   | 51,580     |    |
| Cash, atbeginning ofperiod                                                                |  |                      | 50,403      |    |  |   | 42,632     |    |
| Cash,at end ofperiod                                                                      |  | $                         | 102,360     |    |  | $      | 94,212     |    |
|                                                                                           |

SeeAccompanying Notes to FinancialStatements

5

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SalomonSmith Barney AAA Energy Fund L.P. II Notes to FinancialStatements March 31, 2005(Unaudited)

1.    General:

Salomon Smith Barney AAA Energy Fund L.P. II (the"Partnership") is a limited partnershiporganized on March 25, 2002 under the partnership laws of the State ofNew York to engage, directly or indirectly, in the speculative tradingof a diversified portfolio of commodity interests, including commodityoptions and commodity futures contracts on United States exchanges andcertain foreign exchanges. The Partnership may trade commodity futuresand options contracts of any kind but currently trades solely energyand energy-related products. In addition, the Partnership may enterinto swap contracts on energy-related products. The commodity intereststhat are traded by the Partnership are volatile and involve a highdegree of market risk. During the initial offering period (May 31, 2002through July 1, 2002), the Partnership sold 93,975 redeemable units ofLimited Partnership Interest ("RedeemableUnits"). The Partnership commenced trading on July 1,2002.

Citigroup Managed Futures LLC acts as the General Partner(the "General Partner") of the Partnershipand the managing member of the Master, as defined below. ThePartnership's/Master's commodity broker is Citigroup GlobalMarkets Inc. ("CGM"). CGM is an affiliate ofthe General Partner. The General Partner is wholly owned by CitigroupGlobal Markets Holdings Inc. ("CGMHI"), whichis the sole owner of CGM. CGMHI is a wholly owned subsidiary ofCitigroup Inc. ("Citigroup").

Effective July 1, 2002, the Partnership allocated all of its capitalto SB AAA Master Fund LLC, a New York limited liability company (the"Master"). With this cash, the Partnershippurchased 64,945.0387 Units of the Master with a fair value of$94,925,000. The Master was formed in order to permit commodity poolsmanaged by AAA Capital Management, Inc. (the"Advisor") using the Energy with SwapsProgram, the Advisor's proprietary trading program, to investtogether in one trading vehicle. In addition, the Advisor is a SpecialLimited Partner of the Partnership, an employee of CGM and a relatedparty. Individual and pooled accounts currently managed by the Advisor,including the Partnership (collectively, the "FeederFunds"), are permitted to be non-managing members of theMaster. The General Partner and the Advisor believe that tradingthrough this master/feeder structure should promote efficiency andeconomy in the trading process. Expenses to investors as a result ofthe investment in the Master are approximately the same and redemptionrights are not affected.

As of March 31, 2005, the Partnershipowned approximately 42.0% of the Master. It is thePartnership's intention to continue to invest substantially allof its assets in the Master. The performance of the Partnership isdirectly affected by the performance of the Master. The Master'sStatements of Financial Condition, Statements of Income and Expensesand Members' Capital, Condensed Schedules of Investments andStatements of Cash Flows are included herein.

The accompanyingfinancial statements are unaudited but, in the opinion of management,include all adjustments, consisting only of normal recurringadjustments, necessary for a fair presentation of thePartnership's financial condition at March 31, 2005 and December31, 2004 and the results of its operations and cash flows for the threemonths ended March 31, 2005 and 2004. These financial statementspresent the results of interim periods and do not include alldisclosures normally provided in annual financial statements. Youshould read these financial statements together with the financialstatements and notes included in the Partnership's Annual Reporton Form 10-K filed with the Securities and Exchange Commission for theyear ended December 31, 2004.

Due to the nature of commoditytrading, the results of operations for the interim periods presentedshould not be considered indicative of the results that may be expectedfor the entire year.

The Master's Statements of FinancialCondition and Condensed Schedules of Investments as of March 31, 2005and December 31, 2004 and Statements of Income and Expenses andMembers' Capital and Statements of Cash Flows for the threemonths ended March 31, 2005 and 2004 are presented below:

6

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SalomonSmith Barney AAA Energy Fund L.P. II Notes to FinancialStatements March 31, 2005(Unaudited)

SB AAA Master Fund LLCStatements ofFinancialCondition(Unaudited)

|                                                                                                      |  |              |             |                 |  |        |             |        |  |  |
|------------------------------------------------------------------------------------------------------|--|--------------|-------------|-----------------|--|--------|-------------|--------|--|--|
|                                                                                                 |  | March31,2005 |             | December31,2004 |
| **Assets:**                                                                                          |  |
| Equityin commodity futures tradingaccount:                                                           |  |
| Cash (restricted$3,300,000 and $29,327,275,respectively)                                             |  | $            | 335,287,915 |            |  | $      | 302,866,457 |   |
| Netunrealized appreciation on open futurespositions                                                  |  |         | 77,650,465  |            |  |   | 33,027,068  |   |
| Unrealizedappreciation on open swapspositions                                                        |  |         | 218,994,790 |            |  |   | 93,606,729  |   |
| Commodityoptions owned, at fair value (cost $72,111,136 and $39,565,244,respectively)                |  |         | 106,753,225 |            |  |   | 51,017,766  |   |
|                                                                                                 |  |         | 738,686,395 |            |  |   | 480,518,020 |   |
|                                                                                                 |  |         |        |            |  |   |        |   |
| Duefrombrokers                                                                                       |  |         | 7,307,463   |            |  |   | 2,425,135   |   |
| Interestreceivable                                                                                   |  |         | 835,736     |            |  |   | 459,835     |   |
|                                                                                                 |  | $            | 746,829,594 |            |  | $      | 483,402,990 |   |
| **Liabilitiesand Members'Capital:**                                                                  |  |
| Liabilities:                                                                                         |  |         |        |            |  |   |        |   |
| Unrealizeddepreciation on open swappositions                                                         |  | $            | 198,809,665 |            |  | $      | 89,659,294  |   |
| Commodityoptions written, at market value (premium received $67,888,321 and$54,943,984,respectively) |  |         | 59,652,679  |            |  |   | 52,353,395  |   |
| Accruedexpenses:                                                                                     |  |         |        |            |  |   |        |   |
| Commissions                                                                                          |  |         | 2,638,446   |            |  |   | 1,662,591   |   |
| Professionalfees                                                                                     |  |         | 56,524      |            |  |   | 2,000       |   |
| Due tobrokers                                                                                        |  |         | 6,987,149   |            |  |   | 2,753,610   |   |
| DuetoCGM                                                                                             |  |         | —     |            |  |   | 22,978      |   |
| Distributionpayable                                                                                  |  |         | 828,238     |            |  |   | 453,587     |   |
|                                                                                                 |  |         | 268,972,701 |            |  |   | 146,907,455 |   |
| Members'Capital:                                                                                     |  |         |        |            |  |   |        |   |
| Members'Capital, 198,146.0961 and 185,364.2361 Units outstanding in 2005 and2004,respectively        |  |         | 477,856,893 |            |  |   | 336,495,535 |   |
|                                                                                                 |  | $            | 746,829,594 |            |  | $      | 483,402,990 |   |
|                                                                                                      |

7

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SalomonSmith Barney AAA Energy Fund L.P. II Notes to FinancialStatements March 31, 2005(Unaudited)

SB AAA Master Fund LLCCondensedSchedule of InvestmentsMarch 31, 2005(Unaudited)

|        |  |                               |        |          |             |                                                   |  |        |              |         |  |  |  |  |
|--------|--|-------------------------------|--------|----------|-------------|---------------------------------------------------|--|--------|--------------|---------|--|--|--|--|
| Sector |  | NumberofContracts             |        | Contract |             | FairValue                                         |
| Energy |  |                          |   |     |             |                                              |  |
|   |  |                          |   |     |             | Futurescontracts purchased33.15%                  |  |
|   |  |                          | 8,624  |     |             | NYMEX Crude Oil May 05 - Dec. 085.34%             |  | $      | 25,515,970   |    |
|   |  |                          | 4,653  |     |             | NYMEX Natural Gas July 05 - Dec. 0913.41%         |  |   | 64,088,337   |    |
|   |  |                          |   |     |             | Other14.40%                                       |  |   | 68,806,852   |    |
|   |  |                          |   |     |             |                                              |  |   | 158,411,159  |    |
|   |  |                          |   |     |             |                                              |  |   |         |    |
|   |  |                          |   |     |             | Futurescontracts sold(16.90)%                     |  |   | (80,760,694  | )  |
|   |  |                          |   |     |             | Total futures contracts16.25%                     |  |   | 77,650,465   |    |
|   |  |                          |   |     |             |                                              |  |   |         |    |
|   |  |                          |   |     |             | Optionsowned 22.34%                               |  |   | 106,753,225  |    |
|   |  |                          |   |     |             | Options written(12.48)%                           |  |   | (59,652,679  | )  |
|   |  |                          |   |     |             | Total options9.86%                                |  |   | 47,100,546   |    |
|   |  |                          |   |     |             |                                              |  |   |         |    |
|   |  |                          |   |     |             | Unrealizedappreciation on Swaps contracts 45.58%  |  |
|   |  |                          | 1,000  |     |             | Gulf Coast Unleaded Gas Calendar20055.88%         |  |   | 28,080,112   |    |
|   |  |                          | 1,750  |     |             | GulfCoast Unleaded Gas Calendar 200610.49%        |  |   | 50,144,156   |    |
|   |  |                          | 1,150  |     |             | NYMEXUnleaded Gas Calendar 20057.60%              |  |   | 36,349,297   |    |
|   |  |                          |   |     |             | Other21.61%                                       |  |   | 103,267,120  |    |
|   |  |                          |   |     |             |                                              |  |   | 217,840,685  |    |
|   |  |                          |   |     |             |                                              |  |   |         |    |
|   |  |                          |   |     |             | Unrealizeddepreciation on Swaps contracts(41.36)% |  |   |         |    |
|   |  |                          | 1,000  |     |             | GulfCoast Unleaded Gas Calendar 2005(5.22)%       |  |   | (24,933,372  | )  |
|   |  |                          | 1,750  |     |             | GulfCoast Unleaded Gas Calendar 2006(9.93)%       |  |   | (47,465,498  | )  |
|   |  |                          | 933    |     |             | NYMEXUnleaded Gas Calendar 2005(6.57)%            |  |   | (31,375,248  | )  |
|   |  |                          | 900    |     |             | NYMEXHeating Oil Calendar 2006(5.32)%             |  |   | (25,447,046  | )  |
|   |  |                          |   |     |             | Other(14.32)%                                     |  |   | (68,434,396  | )  |
|   |  |                          |   |     |             |                                              |  |   | (197,655,560 | )  |
|   |  |                          |   |     |             |                                              |  |   |         |    |
|   |  | TotalEnergy Fair Value 30.33% |        | $        | 144,936,136 |                                              |
|        |

|                    |  |                          |             |                              |  |        |        |         |  |  |
|--------------------|--|--------------------------|-------------|------------------------------|--|--------|--------|---------|--|--|
| CountryComposition |  | Investments atFair Value |             | % ofInvestments atFair Value |
| UnitedKingdom      |  | $                        | 4,005,173   |                         |  |   | 2.76   | %  |
| UnitedStates       |  |                     | 140,930,963 |                         |  |   | 97.24  |    |
|               |  | $                        | 144,936,136 |                         |  |   | 100.00 | %  |
|                    |

Percentages are based onMembers' Capital unless otherwise indicated.

8

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SalomonSmith Barney AAA Energy Fund L.P. II Notes to FinancialStatements March 31, 2005(Unaudited)

SB AAA Master Fund LLCCondensedSchedule of InvestmentsDecember 31,2004

|                              |  |                   |            |          |  |                                                    |  |        |             |         |  |  |  |  |
|------------------------------|--|-------------------|------------|----------|--|----------------------------------------------------|--|--------|-------------|---------|--|--|--|--|
| Sector                       |  | NumberofContracts |            | Contract |  | FairValue                                          |
| Energy                       |  |              |       |     |  |                                               |  |
|                         |  |              |       |     |  | Futurescontracts purchased0.37%                    |  | $      | 1,240,430   |    |
|                         |  |              |       |     |  | Futurescontracts sold9.45%                         |  |   |        |    |
|                         |  |              | 2,626      |     |  | NYMEXNatural Gas Feb. 05 – May 096.77%       |  |   | 22,776,795  |    |
|                         |  |              |       |     |  | Other2.68%                                         |  |   | 9,009,843   |    |
|                         |  |              |       |     |  |                                               |  |   | 31,786,638  |    |
|                         |  |              |       |     |  | Totalfutures contracts9.82%                        |  |   | 33,027,068  |    |
|                         |  |              |       |     |  |                                               |  |
|                         |  |              |       |     |  | Optionsowned15.16%                                 |  |   | 51,017,766  |    |
|                         |  |
|                         |  |              |       |     |  | Optionswritten (15.56)%                            |  |
|                         |  |              | 6,992      |     |  | NYMEXNatural Gas Feb. 05 – Jan 06(7.67)%     |  |   | (25,794,540 | )  |
|                         |  |              |       |     |  | Other(7.89)%                                       |  |   | (26,558,855 | )  |
|                         |  |              |       |     |  |                                               |  |   | (52,353,395 | )  |
|                         |  |
|                         |  |              |       |     |  | Unrealizedappreciation on Swaps contracts27.82%    |  |   |        |    |
|                         |  |              | 1,450      |     |  | GulfCoast Unleaded Gas Calendar 20066.50%          |  |   | 21,867,545  |    |
|                         |  |              | 1,080      |     |  | NYMEXUnleaded Gas Calendar 2005 6.98%              |  |   | 23,491,972  |    |
|                         |  |              |       |     |  | Other14.34%                                        |  |   | 48,247,212  |    |
|                         |  |              |       |     |  |                                               |  |   | 93,606,729  |    |
|                         |  |              |       |     |  | Unrealized depreciation on Swaps contracts(26.65)% |  |   |        |    |
|                         |  |              | 1,450      |     |  | GulfCoast Unleaded Gas Calendar 2006(5.60)%        |  |   | (18,846,201 | )  |
|                         |  |              | 820        |     |  | NYMEXUnleaded Gas Calendar 2005(6.29)%             |  |   | (21,159,503 | )  |
|                         |  |              |       |     |  | Other(14.76)%                                      |  |   | (49,653,590 | )  |
|                         |  |              |       |     |  |                                               |  |   | (89,659,294 | )  |
| TotalEnergy Fair Value10.59% |  | $                 | 35,638,874 |     |
|                              |

|                    |  |                          |            |                              |  |        |        |         |  |  |
|--------------------|--|--------------------------|------------|------------------------------|--|--------|--------|---------|--|--|
| CountryComposition |  | Investments atFair Value |            | % ofInvestments atFair Value |
| UnitedKingdom      |  | $                        | 1,752,837  |                         |  |   | 4.92   | %  |
| UnitedStates       |  |                     | 33,886,037 |                         |  |   | 95.08  |    |
|               |  | $                        | 35,638,874 |                         |  |   | 100.00 | %  |
|                    |

Percentagesare based on Members' Capital unless otherwiseindicated.

9

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SalomonSmith Barney AAA Energy Fund L.P. II Notes to FinancialStatements March 31, 2005(Unaudited)

SB AAA Master Fund LLC Statements ofIncome and Expenses and Members' Capital(Unaudited)

|                                                                                                                  |  |                           |             |         |  |        |             |         |  |  |
|------------------------------------------------------------------------------------------------------------------|--|---------------------------|-------------|---------|--|--------|-------------|---------|--|--|
|                                                                                                             |  | ThreeMonths EndedMarch31, |
|                                                                                                             |  | 2005                      |             | 2004    |
| **Income:**                                                                                                      |  |
| Netgains (losses) on trading of commodityinterests:                                                              |  |
| Realized gains on closedpositions                                                                                |  | $                         | 29,816,228  |    |  | $      | 24,591,283  |    |
| Changein unrealized gains (losses) on openpositions                                                              |  |                      | 89,695,707  |    |  |   | (1,039,194  | )  |
|                                                                                                             |  |                      | 119,511,935 |    |  |   | 23,552,089  |    |
| Interestincome                                                                                                   |  |                      | 1,940,110   |    |  |   | 459,513     |    |
|                                                                                                             |  |                      | 121,452,045 |    |  |   | 24,011,602  |    |
| **Expenses:**                                                                                                    |  |
| Brokeragecommissions including clearing fees of $317,204 and $269,728,respectively                               |  |                      | 2,941,658   |    |  |   | 2,327,297   |    |
| Professionalfees                                                                                                 |  |                      | 54,524      |    |  |   | 11,740      |    |
|                                                                                                             |  |                      | 2,996,182   |    |  |   | 2,339,037   |    |
| **Netincome**                                                                                                    |  |                      | 118,455,863 |    |  |   | 21,672,565  |    |
| Additions                                                                                                        |  |                      | 43,025,479  |    |  |   | 1,539,508   |    |
| Redemptions                                                                                                      |  |                      | (18,223,345 | )  |  |   | (17,282,974 | )  |
| Distributionof interest to feederfunds                                                                           |  |                      | (1,896,639  | )  |  |   | (449,958    | )  |
| Netincrease in Members'capital                                                                                   |  |                      | 141,361,358 |    |  |   | 5,479,141   |    |
| Members'capital, beginning ofperiod                                                                              |  |                      | 336,495,535 |    |  |   | 255,057,637 |    |
| Members'capital, end ofperiod                                                                                    |  | $                         | 477,856,893 |    |  | $      | 260,536,778 |    |
| Netasset value per Unit (198,146.0961 and 198,036.9344 Units outstandingin March 31, 2005 and 2004,respectively) |  | $                         | 2,411.64    |    |  | $      | 1,315.61    |    |
| Netincome per Unit of MemberInterest                                                                             |  | $                         | 606.03      |    |  | $      | 109.18      |    |
|                                                                                                                  |

10

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SalomonSmith Barney AAA Energy Fund L.P. II Notes to FinancialStatements March 31, 2005(Unaudited)

SB AAA Master Fund LLC Statements ofCash Flows(Unaudited)

|                                                                                           |  |                           |              |         |  |        |             |         |  |  |
|-------------------------------------------------------------------------------------------|--|---------------------------|--------------|---------|--|--------|-------------|---------|--|--|
|                                                                                      |  | ThreeMonths EndedMarch31, |
|                                                                                      |  | 2005                      |              | 2004    |
| Cashflows from operating activities:                                                      |  |
| Netincome                                                                                 |  | $                         | 118,455,863  |    |  | $      | 21,672,565  |    |
| Adjustmentsto reconcile net income to net cash provided by (used in) operatingactivities: |  |                      |         |    |  |
| Changes inoperating assets and liabilities:                                               |  |
| (Increase)decrease in restrictedcash                                                      |  |                      | 26,027,275   |    |  |   | 17,048,241  |    |
| (Increase)decrease in net unrealized appreciation/depreciation on open futurespositions   |  |                      | (44,623,397  | )  |  |   | 736,070     |    |
| (Increase)decrease in unrealized appreciation on open swapscontracts                      |  |                      | (125,388,061 | )  |  |   | 9,931,257   |    |
| (Increase)decrease in commodity options owned, at fairvalue                               |  |                      | (55,735,459  | )  |  |   | 6,512,237   |    |
| (Increase)decrease in due frombrokers                                                     |  |                      | (4,882,328   | )  |  |   | 1,137,391   |    |
| (Increase)decrease in interestreceivable                                                  |  |                      | (375,901     | )  |  |   | (11,298     | )  |
| Increase(decrease) in unrealized depreciation on open swapscontracts                      |  |                      | 109,150,371  |    |  |   | 9,338,472   |    |
| Increase(decrease) in commodity options written, at fairvalue                             |  |                      | 7,299,284    |    |  |   | (12,478,986 | )  |
| Accruedexpenses:                                                                          |  |
| Increase (decrease) incommissions                                                         |  |                      | 975,855      |    |  |   | 62,823      |    |
| Increase(decrease) in professionalfees                                                    |  |                      | 54,524       |    |  |   | (8,560      | )  |
| Increase(decrease) in due tobrokers                                                       |  |                      | 4,233,539    |    |  |   | (1,478,140  | )  |
| Increase(decrease) in due toCGM                                                           |  |                      | (22,978      | )  |  |   | —     |    |
| Increase(decrease) in distributionpayable                                                 |  |                      | 374,651      |    |  |   | 14,021      |    |
| Netcash provided by (used in) operatingactivities                                         |  |                      | 35,543,238   |    |  |   | 52,476,093  |    |
| Cashflows from financing activities:                                                      |  |
| Proceedsfromadditions                                                                     |  |                      | 43,025,479   |    |  |   | 1,539,508   |    |
| Paymentsforredemptions                                                                    |  |                      | (18,223,345  | )  |  |   | (17,282,974 | )  |
| Distributionof interest to feederfunds                                                    |  |                      | (1,896,639   | )  |  |   | (449,958    | )  |
| Netcash provided by (used in) financingactivities                                         |  |                      | 22,905,495   |    |  |   | (16,193,424 | )  |
| Netchange incash                                                                          |  |                      | 58,448,733   |    |  |   | 36,282,669  |    |
| Unrestrictedcash, at beginning ofperiod                                                   |  |                      | 273,539,182  |    |  |   | 182,889,106 |    |
| Unrestrictedcash, at end ofperiod                                                         |  | $                         | 331,987,915  |    |  | $      | 219,171,775 |    |
|                                                                                           |

11

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SalomonSmith Barney AAA Energy Fund L.P. II Notes to FinancialStatements March 31, 2005(Unaudited)

2.    Financial Highlights:

Changes in Net Asset Value per Redeemable Unit for the three monthsended March 31, 2005 and 2004 were as follows:

|                                                                       |  |                           |          |          |  |        |         |          |  |  |
|-----------------------------------------------------------------------|--|---------------------------|----------|----------|--|--------|---------|----------|--|--|
|                                                                  |  | ThreeMonths EndedMarch31, |
|                                                                  |  |
|                                                                  |  | 2005                      |          | 2004     |
| Netrealized and unrealized gains*                                     |  | $                         | 376.84   |     |  | $      | 69.72   |     |
| Interestincome                                                        |  |                      | 6.10     |     |  |   | 1.43    |     |
| Expenses**                                                            |  |                      | (82.54   | )   |  |   | (5.35   | )   |
| Increasefor the period                                                |  |                      | 300.40   |     |  |   | 65.80   |     |
| NetAsset Value per Redeemable Unit, beginning ofperiod                |  |                      | 1,149.74 |     |  |   | 789.39  |     |
| NetAsset Value per Redeemable Unit, end ofperiod                      |  | $                         | 1,450.14 |     |  | $      | 855.19  |     |
| *  Includesbrokerage commissions allocated from theMaster.  |
| **  Excludesbrokerage commissions allocated from theMaster. |
| Ratios toaverage net assets:***                                       |  |                      |     |     |  |   |    |     |
| Netinvestment loss before incentive feeallocation****                 |  |                      | (4.1     | )%  |  |   | (5.7    | )%  |
| Operatingexpense                                                      |  |                      | 6.2      | %   |  |   | 6.4     | %   |
| Incentivefeeallocation                                                |  |                      | 6.1      | %   |  |   | — |     |
| Totalexpenses and incentive feeallocation                             |  |                      | 12.3     | %   |  |   | 6.4     | %   |
| Totalreturn:                                                          |  |                      |     |     |  |   |    |     |
| Total return beforeincentive feeallocation                            |  |                      | 32.4     | %   |  |   | 8.3     | %   |
| Incentivefeeallocation                                                |  |                      | (6.3     | )%  |  |   | — |     |
| Totalreturn after incentive feeallocation                             |  |                      | 26.1     | %   |  |   | 8.3     | %   |
|                                                                       |

|     |                                                 |
|-----|-------------------------------------------------|
| *** | Annualized(except for incentive fee allocation) |

|      |                                                                            |
|------|----------------------------------------------------------------------------|
| **** | Interest income less total expenses(exclusive of incentive fee allocation) |

The aboveratios may vary for individual investors based on the timing of capitaltransactions during the year. Additionally, these ratios are calculatedfor the Limited Partner class using the Limited Partners' shareof income, expenses and average net assets.

12

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SalomonSmith Barney AAA Energy Fund L.P. II Notes to FinancialStatements March 31, 2005(Unaudited)

Financial Highlights of theMaster:

|                                             |  |                           |          |          |  |        |          |          |  |  |
|---------------------------------------------|--|---------------------------|----------|----------|--|--------|----------|----------|--|--|
|                                        |  | ThreeMonths EndedMarch31, |
|                                        |  | 2005                      |          | 2004     |
| Netrealized and unrealized gains*           |  | $                         | 596.38   |     |  | $      | 106.95   |     |
| InterestIncome                              |  |                      | 9.93     |     |  |   | 2.27     |     |
| Expenses**                                  |  |                      | (0.28    | )   |  |   | (0.04    | )   |
| Increasefor theperiod                       |  |                      | 606.03   |     |  |   | 109.18   |     |
| Distributions                               |  |                      | (9.71    | )   |  |   | (2.23    | )   |
| NetAsset Value per Unit, beginning ofperiod |  |                      | 1,815.32 |     |  |   | 1,208.66 |     |
| NetAsset Value per Unit, end ofperiod       |  | $                         | 2,411.64 |     |  | $      | 1,315.61 |     |
| *  Includesbrokeragecommissions   |
| **  Excludesbrokeragecommissions  |
| Ratiosto average net assets:***             |  |
| Net investmentloss****                      |  |                      | (1.1     | )%  |  |   | (3.0     | )%  |
| Operatingexpense                            |  |                      | 3.0      | %   |  |   | 3.7      | %   |
| Totalreturn                                 |  |                      | 33.4     | %   |  |   | 9.0      | %   |
|                                             |

|     |            |
|-----|------------|
| *** | Annualized |

|      |                                    |
|------|------------------------------------|
| **** | Interestincome less total expenses |

The above ratiosmay vary for individual investors based on the timing of capitaltransactions during the  year.

3.    TradingActivities:

The Partnership was formed for the purpose oftrading contracts in a variety of commodity interests, includingderivative financial instruments and derivative commodity instruments.The Partnership invests the majority of its assets through a"master fund/feeder fund" structure. Theresults of the Partnership's investment in the Master are shownin the Statements of Income and Expenses and Partners' Capitaland are discussed in Item 2, Management's Discussion and Analysisof Financial Condition and Results of Operations.

The respectiveCustomer Agreements between the Partnership and CGM and the Master andCGM give the Partnership and the Master, respectively, the legal rightto net unrealized gains and losses.

All of the commodityinterests owned by the Master are held for trading purposes. Theaverage fair values of these interests during the three and twelvemonths ended March 31, 2005 and December 31, 2004, based on a monthlycalculation, were $77,106,493 and $37,750,006, respectively. The fairvalues of these commodity interests, including options and swapsthereon, if applicable, at March 31, 2005 and December 31, 2004 were$144,936,136 and $35,638,874, respectively. Fair values for exchangetraded commodity futures and options are based on quoted market pricesfor those futures and options. Fair values for all other financialinstruments for which market quotations are not readily available arebased on calculations approved by the General Partner.

13

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SalomonSmith Barney AAA Energy Fund L.P. II Notes to FinancialStatements March 31, 2005(Unaudited)

4.    Financial Instrument Risks:

In the normal course of its business, the Partnership, through itsinvestment in the Master, is party to financial instruments withoff-balance sheet risk, including derivative financial instruments andderivative commodity instruments. These financial instruments mayinclude forwards, futures, options and swaps, whose values are basedupon an underlying asset, index, or reference rate, and generallyrepresent future commitments to exchange currencies or cash flows, topurchase or sell other financial instruments at specific terms atspecified future dates, or, in the case of derivative commodityinstruments, to have a reasonable possibility to be settled in cash,through physical delivery or with another financial instrument. Theseinstruments may be traded on an exchange or over-the-counter("OTC"). Exchange-traded instruments arestandardized and include futures and certain option contracts. OTCcontracts are negotiated between contracting parties and includeforwards and certain options. Each of these instruments is subject tovarious risks similar to those related to the underlying financialinstruments including market and credit risk. In general, the risksassociated with OTC contracts are greater than those associated withexchange-traded instruments because of the greater risk of default bythe counterparty to an OTC contract. The Master's swaps contractsare OTC contracts.

Market risk is the potential for changes inthe value of the financial instruments traded by the Master due tomarket changes, including interest and foreign exchange rate movementsand fluctuations in commodity or security prices. Market risk isdirectly impacted by the volatility and liquidity in the markets inwhich the related underlying assets are traded.

Credit risk isthe possibility that a loss may occur due to the failure of acounterparty to perform according to the terms of a contract. Creditrisk with respect to exchange-traded instruments is reduced to theextent that an exchange or clearing organization acts as a counterpartyto the transactions. The Partnership's/Master's risk ofloss in the event of counterparty default is typically limited to theamounts recognized in the statements of financial condition and notrepresented by the contract or notional amounts of the instruments. ThePartnership, through its investment in the Master, has concentrationrisk because the sole counterparty or broker with respect to theMaster's assets is CGM.

The General Partner monitors andcontrols the Partnership's/Master's risk exposure on adaily basis through financial, credit and risk management monitoringsystems, and accordingly believes that it has effective procedures forevaluating and limiting the credit and market risks to which thePartnership/Master is subject. These monitoring systems allow theGeneral Partner to statistically analyze actual trading results withrisk adjusted performance indicators and correlation statistics. Inaddition, on-line monitoring systems provide account analysis offutures, forwards and options positions by sector, margin requirements,gain and loss transactions and collateral positions.

Themajority of these instruments mature within one year of March 31, 2005.However, due to the nature of the Partnership's/Master'sbusiness, these instruments may not be held tomaturity.

14

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Item2.    Management's Discussion and Analysis of FinancialCondition and Results of Operations.

Liquidity andCapital Resources

The Partnership does not engage inthe sale of goods or services. Its only assets are its investment inthe Master and cash. The Master does not engage in the sale of goods orservices. Because of the low margin deposits normally required incommodity futures trading, relatively small price movements may resultin substantial losses to the Partnership. While substantial lossescould lead to a decrease in liquidity, no such losses occurred duringthe first quarter of 2005.

The Partnership's capitalconsists of the capital contributions of the partners as increased ordecreased by its investment in the Master, expenses, interest income,redemptions of Redeemable Units and distributions of profits, ifany.

For the three months ended March 31, 2005, Partnershipcapital increased 60.2% from $118,023,217 to $189,129,095. Thisincrease was attributable to net income from operations of $38,172,306coupled with the addition of 30,697.3909 Redeemable Units totaling$36,875,000, partially offset by the redemption of 2,928.3077Redeemable Units totaling $3,941,428. Future redemptions can impact theamount of funds available for investment in the Master in subsequentperiods.

The Master's capital consists of the capitalcontributions of the members as increased or decreased by realizedand/or unrealized gains or losses on commodity futures trading,expenses, interest income, redemptions of Units and distributions ofprofits, if any.

For the three months ended March 31, 2005, theMaster's capital increased 42.0% from $336,495,535 to$477,856,893. This increase was attributable to net income fromoperations of $118,455,863, coupled with the addition of 22,540.8173Units totaling $43,025,479 which was partially offset by the redemptionof 9,758.9573 Units totaling $18,223,345 and distributions of interesttotaling $1,896,639 to the non-managing members of the Master. Futureredemptions can impact the amount of funds available for investments incommodity contract positions in subsequent periods.

Critical Accounting Policies

Thepreparation of financial statements in conformity with accountingprinciples generally accepted in the United States of America requiresmanagement to make estimates and assumptions that affect the reportedamounts of assets and liabilities, and disclosures of contingent assetsand liabilities at the date of the financial statements and thereported amounts of revenues and expenses during the reporting period.Actual results could differ from these estimates.

All commodityinterests (including derivative financial instruments and derivativecommodity instruments) are used for trading purposes. The commodityinterests are recorded on trade date and open contracts are recorded inthe statement of financial condition at fair value on the last businessday of the period, which represents market value for those commodityinterests for which market quotations are readily available or othermeasures of fair value deemed appropriate by management of the GeneralPartner for those commodity interests and foreign currencies for whichmarket quotations are not readily available, including dealer quotesfor swaps and certain option contracts. Investments in commodityinterests denominated in foreign currencies are translated into U.S.dollars at the exchange rates prevailing on the last business day ofthe period. Realized gains (losses) and changes in unrealized values oncommodity interests and foreign currencies are recognized in the periodin which the contract is closed or the changes occur and are includedin net gains (losses) on trading of commodity interests.

Thevalue of the Partnership's investment in the Master reflects thePartnership's proportional interest in the members' capitalof the Master. All of the income and expenses and unrealized andrealized gains and losses from the commodity transactions of the Masterare allocated pro rata among the investors at the time of suchdetermination.

Foreign currency contracts are those contractswhere the Partnership agrees to receive or deliver a fixed quantity offoreign currency for an agreed-upon price on an agreed future date.Foreign currency contracts are valued daily, and thePartnership's net equity therein, representing unrealized gain orloss 

15

----

on the contracts as measured by thedifference between the forward foreign exchange rates at the dates ofentry into the contracts and the forward rates at the reporting dates,is included in the statement of financial condition. Realized gains(losses) and changes in unrealized values on foreign currency contractsare recognized in the period in which the contract is closed or thechanges occur and are included in the statements of income and expensesand partners' capital.

Results ofOperations

During the Partnership's firstquarter of 2005, the Net Asset Value per Redeemable Unit increased26.1% from $1,149.74 to $1,450.14 as compared to an increase of8.3% in the first quarter of 2004. The Partnership experienced anet trading gain before brokerage commissions and related fees in thefirst quarter of 2005 of $49,091,389. Gains were primarily attributableto the Master's trading of commodity futures in NYMEX Crude Oil,NYMEX Natural Gas, NYMEX Heating Oil and energy swaps and werepartially offset by losses in NYMEX Unleaded Gas and IPE Gas Oil. ThePartnership experienced a net trading gain before brokerage commissionsand related fees in the first quarter of 2004 of $8,902,706. Gains wereprimarily attributable to the Master's trading of commodityfutures in energy swaps, NYMEX Crude Oil, NYMEX Natural Gas and NYMEXUnleaded Gas and were partially offset by losses in IPE Brent Crude andNYMEX Heating Oil.

The first quarter was a particularly strongperiod for the Partnership's advisor as global energy pricescontinued their historic rise and trading opportunities abounded in theshort term. Crude oil price moves rebounded in January and led to anearly $8.00/barrel rally but encountered resistance just above$50.00/barrel before settling back to the mid-$40s. A combination oflong futures and short options provided profits during this period.February saw follow-through on this move with crude oil moving to low$50s and ultimately to an intra-month all-time high of over $57/barrelin March. These conditions were profitable for the Partnership'soutright and spread positions.

Natural gas trading was alsosuccessful for the quarter as the lack of price volatility helped shortoption positions early in the quarter and later yielded profits whenprices began to move upward in February. In a relatively short time,natural gas moved from a low of $5.71/MMBTU to close to $7.00/MMBTU.This contributed to profits on the near-term positions as well as aidedthe bullish long-term positions.

Overall, thePartnership's advisor is participating in the secular long-termrise in energy prices, managing downside exposure and activelydiversifying the Partnership's positions by sector, time-frameand trading strategy.

Commodity futures markets are highlyvolatile. The potential for broad and rapid price fluctuationsincreases the risks involved in commodity trading, but also increasesthe possibility of profit. The profitability of the Partnership (andthe Master) depends on the Advisor's ability to forecast pricechanges in energy and energy-related commodities. Such price changesare influenced by, among other things, changing supply and demandrelationships, weather, governmental, agricultural, commercial andtrade programs and policies, national and international political andeconomic events and changes in interest rates. To the extent that theAdvisor correctly makes such forecasts, the Partnership (and theMaster) expects to increase capital through operations.

Interestincome on 80% of the Partnership's average daily equityallocated to it by the Master was earned at a 30-day U.S. Treasury billrate determined weekly by CGM based on the average non-competitiveyield on 3-month U.S. Treasury bills maturing in 30 days. CGM maycontinue to maintain the Master's assets in cash and/or place allof the Master's assets in 90-day Treasury bills and pay thePartnership its allocated share of 80% of the interest earned onthe Treasury bills purchased. CGM will retain 20% of anyinterest earned on Treasury bills purchased. Interest income allocatedfrom Master for the three months ended March 31, 2005 increased by$605,648, as compared to the corresponding period in 2004. The increasein interest income is primarily due to an increase in interest ratesduring the three months ended March 31, 2005 as compared to 2004.

Management fees are calculated as a percentage of thePartnership's net asset value as of the end of each month and areaffected by trading performance and redemptions. Management fees forthe three 

16

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months ended March 31, 2005 increased by$379,966, as compared to the corresponding period in 2004. The increasein management fees is due to an increase in net assets during the threemonths ended March 31, 2005 as compared to 2004.

Administrativefees are calculated as a percentage of the Partnership's netasset value as of the end of each month and are affected by tradingperformance and redemptions. Administrative fees for the three monthsended March 31, 2005 increased by $94,990, as compared to thecorresponding period in 2004. The increase in administrative fees isdue to an increase in net assets during the three months ended March31, 2005 as compared to 2004.

Special limited partner profitshare allocations (incentive fees) are based on the new trading profitsgenerated by the Advisor at the end of the year, as defined in theadvisory agreements between the Partnership, the General Partner andthe Advisor. The profit share allocation accrued for the three monthsended March 31, 2005 was $9,349,327. There was no allocation accruedfor the three months ended March 30, 2004.

17

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Item 3.    Quantitative and QualitativeDisclosures about Market Risk

All of the Partnership'sassets are subject to the risk of trading loss through its investmentin the Master. The Master is a speculative commodity pool. The marketsensitive instruments held by it are acquired for speculative tradingpurposes, and all or substantially all of the Master's assets aresubject to the risk of trading loss. Unlike an operating company, therisk of market sensitive instruments is integral, not incidental, tothe Master's main line of business.

Market movementsresult in frequent changes in the fair value of the Master's openpositions and, consequently, in its earnings and cash flow. TheMaster's market risk is influenced by a wide variety of factors,including the level and volatility of interest rates, exchange rates,equity price levels, the value of financial instruments and contracts,the diversification effects of the Master's open positions andthe liquidity of the markets in which it trades.

The Masterrapidly acquires and liquidates both long and short positions in arange of different markets. Consequently, it is not possible to predicthow a particular future market scenario will affect performance, andthe Master's past performance is not necessarily indicative ofits future results.

Value at Risk is a measure of the maximumamount which the Master could reasonably be expected to lose in a givenmarket sector. However, the inherent uncertainty of the Master'sspeculative trading and the recurrence in the markets traded by theMaster of market movements far exceeding expectations could result inactual trading or non-trading losses far beyond the indicated Value atRisk or the Master's experience to date (i.e., "riskof ruin"). In light of the foregoing as well as the risksand uncertainties intrinsic to all future projections, the inclusion ofthe quantification in this section should not be considered toconstitute any assurance or representation that the Master'slosses in any market sector will be limited to Value at Risk or by theMaster's attempts to manage its market risk.

Exchangemaintenance margin requirements have been used by the Master as themeasure of its Value at Risk. Maintenance margin requirements are setby exchanges to equal or exceed the maximum losses reasonably expectedto be incurred in the fair value of any given contract in95%-99% of any one-day interval. Maintenance margin hasbeen used rather than the more generally available initial margin,because initial margin includes a credit risk component, which is notrelevant to Value at Risk.

The following table indicates thetrading Value at Risk associated with the Master's open positionsby market category as of March 31, 2005 and the highest, lowest andaverage value during the three months ended March 31, 2005. All openposition trading risk exposures of the Master have been included incalculating the figures set forth below. As of March 31, 2005, theMaster's total capitalization was $477,856,893. There has been nomaterial change in the trading Value at Risk information previouslydisclosed in the Partnership's Annual Report on Form 10-K for theyear ended December 31, 2004.

March 31, 2005

|              |  |               |            |                          |  |                                 |      |                  |  |                        |            |        |  |        |            |        |  |        |            |        |  |  |
|--------------|--|---------------|------------|--------------------------|--|---------------------------------|------|------------------|--|------------------------|------------|--------|--|--------|------------|--------|--|--------|------------|--------|--|--|
|         |  |          |            |                     |  | ThreeMonths Ended March 31,2005 |
| MarketSector |  | Value at Risk |            | % of TotalCapitalization |  | High Value at Risk              |      | Low Valueat Risk |  | Average Value at Risk* |
| Energy       |  | $             | 34,337,497 |                     |  |                            | 7.19 | %           |  | $                      | 70,573,078 |   |  | $      | 20,895,649 |   |  | $      | 35,657,856 |   |
| EnergySwaps  |  |          | 3,300,000  |                     |  |                            | 0.69 | %           |  | $                      | 3,300,000  |   |  | $      | 3,300,000  |   |  | $      | 3,300,000  |   |
| Total        |  | $             | 37,637,497 |                     |  |                            | 7.88 | %           |  |                   |       |   |  |   |       |   |  |   |       |   |
|              |

|   |                               |
|---|-------------------------------|
| * | Averagemonthly Values at Risk |

18

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Item 4.    Controls and Procedures

Based on their evaluation of the Partnership's disclosurecontrols and procedures as of March 31, 2005, the President and ChiefFinancial Officer of the General Partner have concluded that suchcontrols and procedures are effective.

During thePartnership's last fiscal quarter, no changes occurred in thePartnership's internal control over financial reporting that havematerially affected, or are reasonably likely to materially affect, thePartnership's internal control over financialreporting.

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PART II. OTHERINFORMATION

Item 1.    Legal Proceedings

Thefollowing information supplements and updates our discussion set forthunder Item 3 "Legal Proceedings" in thePartnership's Annual Report on Form 10-K for the fiscal yearended December 31, 2004.

Enron Corp.

 InApril  2005, Citigroup, along with other financial institutiondefendants, reached an agreement-in-principle to settle fourstate-court actions brought by various investment funds, which were notpreviously consolidated or coordinated with the NEWBY action. The fourcases are OCM OPPORTUNITIES FUND III, L.P., et al. v. CITIGROUPINC., et al.; PACIFIC INVESTMENT MANAGEMENT CO. LLC, et al. v.CITIGROUP  INC., et al.; AUSA LIFE INSURANCE v. CITIGROUPINC., et al. and PRINCIPAL GLOBAL INVESTORS v. CITIGROUP  INC.,et al. The amounts to be paid in settlement of these actions arecovered by existing litigation reserves.

DynegyInc.

 The court had previously denied leadplaintiff's motion for leave to amend; no appeal was yet timelywhile the remainder of the case remained pending. On April  15,2005, as part of a global settlement involving all defendants,Citigroup entered into a memorandum of understanding to settle thiscase. The amount to be paid in settlement is covered by existinglitigation reserves.

WorldCom,  Inc.

 TheDistrict Court approved the settlement of the IN RE TARGETS SECURITIESLITIGATION on April  22, 2005.

Global Crossing

 The plaintiffs and the Citigroup Related Defendants haveentered into a definitive settlement agreement in the IN RE GLOBALCROSSING,  LTD SECURITIES LITIGATION; the settlement waspreliminarily approved by the Court on March  8, 2005. The amountto be paid in settlement is covered by existing litigationreserves.

Research

 Two putative class actionsagainst CGMI asserting common law claims on behalf of CGMI customers inconnection with published investment research have been dismissed byUnited States District Courts, the dismissals of which were affirmed bythe United States Court of Appeals for the Third and Ninth Circuits,respectively. Plaintiffs in the Ninth Circuit case have sought reviewby the United States Supreme Court; their petition for a writ ofcertiorari, which CGMI opposed, is pending before that court.

Mutual Funds

 CGMHI entered into a settlement withthe SEC with respect to revenue sharing and sales of classes offunds.

Investigations of Euro Zone Government Bonds Trade

 The German prosecutors have declined to take any actionsagainst the employees in connection with this matter.

Item2.    Unregistered Sales of Equity Securities and Use ofProceeds

For the three months ended March 31, 2005there were additional sales of 37,648.4439 Redeemable Units totaling$36,875,000. The Redeemable Units were issued in reliance uponapplicable exemptions 

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from registration under Section 4(2) of theSecurities Act of 1933, as amended, and Section 506 of Regulation Dpromulgated thereunder.

Proceeds from the sale ofadditional Redeemable Units are used in the trading of commodityinterests including futures contracts, options, forwards and swapcontracts.

The following chart sets forth thepurchases of Redeemable Units by the Partnership.

|                                   |  |                                                 |            |                                             |  |                                                                                               |          |                                                                                                                          |  |        |     |        |  |        |     |        |  |  |
|-----------------------------------|--|-------------------------------------------------|------------|---------------------------------------------|--|-----------------------------------------------------------------------------------------------|----------|--------------------------------------------------------------------------------------------------------------------------|--|--------|-----|--------|--|--------|-----|--------|--|--|
| Period                            |  | (a)Total Number of Shares (or Units) Purchased* |            | (b)Average Price Paid per Share (or Unit)** |  | (c) TotalNumber of Shares (or Units) Purchased as Part of PubliclyAnnounced Plans or Programs |          | (d) Maximum Number (orApproximate Dollar Value) of Shares (or Units) that May YetBe Purchased Under the Plans orPrograms |
| January 1, 2005-January 31,2005   |  |                                            | 977.1872   |                                        |  | $                                                                                             | 1,220.88 |                                                                                                                     |  |   | N/A |   |  |   | N/A |   |
| February1, 2005 -February 28,2005 |  |                                            | 650.6897   |                                        |  | $                                                                                             | 1,325.66 |                                                                                                                     |  |   | N/A |   |  |   | N/A |   |
| March1, 2005 -March 31,2005       |  |                                            | 1,300.4308 |                                        |  | $                                                                                             | 1,450.14 |                                                                                                                     |  |   | N/A |   |  |   | N/A |   |
| Total                             |  |                                            | 2,928.3077 |                                        |  | $                                                                                             | 1,332.23 |                                                                                                                     |  |   | N/A |   |  |   | N/A |   |
|                                   |

|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | *Generally, Limited Partners are permitted to redeem their RedeemableUnits as of the end of each month on 10 days' notice to theGeneral Partner. Under certain circumstances, the General Partner cancompel redemption but to date, the General Partner has not exercisedthis right. Purchases of Redeemable Units by the Partnership reflectedin the chart above were made in the ordinary course of thePartnership's business in connection with effecting redemptionsfor Limited Partners. |

|  |                                                                                                                                           |
|--|-------------------------------------------------------------------------------------------------------------------------------------------|
|  | ** Redemptions of RedeemableUnits are effected as of the last day of each month at the Net AssetValue per Redeemable Unit as of that day. |

Item3.    Defaults Upon Senior Securities – None

Item4.    Submission of Matters to a Vote of Security Holders –None

Item 5.    Other Information – None

Item6.    Exhibits

|        |                                                                                                                                                                                                                |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The exhibits required tobe filed by Item 601 of Regulation S-K are incorporated herein byreference to the exhibit index of the Partnership's Annual Reporton Form 10-K for the period ended December 31, 2004. |

Exhibit - 31.1 - Rule 13a-14(a)/15d-14(a)Certification (Certification of President and Director).

Exhibit – 31.2 – Rule 13a-14(a)/15d-14(a)Certification (Certification of Chief Financial Officer andDirector).

Exhibit – 32.1 – Section 1350Certification (Certification of President and Director).

Exhibit – 32.2 – Section 1350 Certifications(Certification of Chief Financial Officer andDirector).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,the registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized.

SALOMON SMITH BARNEY AAA ENERGY FUND L.P.II

|        |  |                                                              |  |  |  |  |
|--------|--|--------------------------------------------------------------|--|--|--|--|
| By:    |  | CitigroupManaged Futures LLC                                 |
|   |  | (General Partner)                                            |
| By:    |  | /s/David J. Vogel                                            |
|   |  | David J. Vogel Presidentand Director                         |
| Date:  |  | May10, 2005                                                  |
| By:    |  | /s/Daniel R. McAuliffe, Jr.                                  |
|   |  | Daniel R. McAuliffe, Jr.Chief Financial Officer and Director |
| Date:  |  | May10, 2005                                                  |
|        |

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