AUGUSTA PARTNERS, L.P.
FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED
JUNE 30, 1999
(UNAUDITED)
<PAGE>
AUGUSTA PARTNERS, L.P.
FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED
JUNE 30, 1999
(UNAUDITED)
CONTENTS
Statement of Assets, Liabilities and Partners' Capital................. 1
Statement of Operations................................................ 2
Statement of Changes in Partners' Capital - Net Assets................. 3
Notes to Financial Statements.......................................... 4
Schedule of Portfolio Investments...................................... 13
Schedule of Securities Sold, Not Yet Purchased......................... 18
Schedule of Written Options............................................ 20
<PAGE>
AUGUSTA PARTNERS, L.P.
STATEMENT OF ASSETS, LIABILITIES AND PARTNERS' CAPITAL (IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
JUNE 30, 1999
(UNAUDITED)
<S> <C>
ASSETS
Cash $ 6,215
Investments in securities, at market (identified cost - $129,879) 163,127
Due from broker 6,617
Dividends receivable 893
Interest receivable 41
Organizational costs (net of accumulated amortization of $390) 301
Other assets 47
--------
TOTAL ASSETS 177,241
--------
LIABILITIES
Securities sold, not yet purchased, at market (proceeds of sales - $15,982) 16,244
Outstanding options written, at value (premiums received - $1,437) 1,296
Loan interest payable 6
Dividends payable on securities sold, not yet purchased 7
Management fee payable 122
Accrued expenses 298
--------
TOTAL LIABILITIES 17,973
--------
NET ASSETS $159,268
========
PARTNERS' CAPITAL - NET ASSETS
Represented by:
Capital contributions - net $48,932
Accumulated net investment loss (1,617)
Accumulated net realized gain on investments 78,826
Accumulated net unrealized appreciation 33,127
--------
PARTNERS' CAPITAL - NET ASSETS $159,268
========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-1-
<PAGE>
AUGUSTA PARTNERS, L.P.
STATEMENT OF OPERATIONS (IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1999
(UNAUDITED)
ASSETS
<S> <C>
INVESTMENT INCOME
Dividends $ 437
Interest 538
--------
975
--------
EXPENSES
OPERATING EXPENSES:
Management fee 623
Professional fees 174
Administration fees 93
Amortization of organizational costs 69
Custodian fees 47
Insurance expense 15
Individual General Partners' fees and expenses 14
Miscellaneous 14
--------
TOTAL OPERATING EXPENSES 1,049
Interest expense 212
Dividends on securities sold, not yet purchased 48
--------
TOTAL EXPENSES 1,309
--------
NET INVESTMENT LOSS (334)
--------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
REALIZED GAIN (LOSS) ON INVESTMENTS:
Investment securities 37,360
Foreign securities (80)
Purchased options 3,110
Written options 373
Futures transactions (184)
Securities sold, not yet purchased (7,378)
--------
NET REALIZED GAIN ON INVESTMENTS 33,201
--------
NET CHANGE IN UNREALIZED APPRECIATION ON INVESTMENTS 6,072
--------
NET REALIZED AND UNREALIZED GAIN 39,273
--------
INCREASE IN PARTNERS' CAPITAL DERIVED FROM INVESTMENT ACTIVITIES $ 38,939
========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-2-
<PAGE>
AUGUSTA PARTNERS, L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL - NET ASSETS (IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1999 DECEMBER 31, 1998
(UNAUDITED)
<S> <C> <C>
FROM INVESTMENT ACTIVITIES
Net investment loss $ (334) $ (361)
Net realized gain on investments 33,201 13,777
Net change in unrealized appreciation on
investments 6,072 10,678
-------- --------
INCREASE IN PARTNERS' CAPITAL
DERIVED FROM INVESTMENT ACTIVITIES 38,939 24,094
PARTNERS' CAPITAL TRANSACTIONS
Capital contributions 1,975 9,618
Capital withdrawals - General Partner (97) (5,067)
Capital withdrawals - Limited Partners (0) (38,960)
-------- --------
INCREASE (DECREASE) IN PARTNERS' CAPITAL
DERIVED FROM CAPITAL TRANSACTIONS 1,878 (34,409)
PARTNERS' CAPITAL AT BEGINNING OF PERIOD 118,451 128,766
-------- --------
PARTNERS' CAPITAL AT END OF PERIOD $159,268 $118,451
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE>
AUGUSTA PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS - JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION
Augusta Partners, L.P. (the "Partnership") was organized under the
Delaware Revised Uniform Limited Partnership Act on May 30, 1996. The
Partnership is registered under the Investment Company Act of 1940 (the
"Act") as a closed-end, non-diversified management investment company.
The Partnership will operate until December 31, 2021 unless further
extended or sooner terminated as provided for in the Second Amended and
Restated Limited Partnership Agreement, dated as of February 10, 1999.
The Partnership's investment objective is to achieve capital
appreciation. The Partnership pursues this objective by investing
principally in equity securities of publicly-traded U.S. companies. The
Partnership may also invest in equity securities of foreign issuers and
in bonds, options and other fixed-income securities of U.S. and foreign
issuers, as well as other financial instruments.
There are four "Individual General Partners", who serve as the
governing board of the Partnership, and a "Manager." The Manager is
Augusta Management, L.L.C., whose principal members are CIBC World
Markets Corp. (formerly CIBC Oppenheimer Corp.) and Ardsley Advisory
Partners ("Ardsley"). Investment professionals at Ardsley manage the
Partnership's investment portfolio on behalf of the Manager under the
supervision of CIBC World Market Corp. ("CIBC WM").
The acceptance of initial and additional contributions is subject to
approval by the Manager. The Partnership may from time to time offer to
repurchase interests pursuant to written tenders by Partners. Such
repurchases will be made at such times and on such terms as may be
determined by the Individual General Partners, in their complete and
exclusive discretion. The Manager expects that generally it will
recommend to the Individual General Partners that the Partnership
repurchase interests from Partners once in each year effective as of
the end of each such year.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Manager to make estimates
and assumptions that affect the amounts reported in the financial
statements and accompanying notes. The Manager believes that the
estimates utilized in preparing the Partnership's financial statements
are reasonable and prudent; however, actual results could differ from
these estimates.
a. PORTFOLIO VALUATION
Securities and commodities transactions, including related revenue and
expenses, are recorded on a trade-date basis and dividends are recorded
on an ex-dividend date basis. Interest income is recorded on the
accrual basis.
- 4 -
<PAGE>
AUGUSTA PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS - JUNE 30, 1999 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
a. PORTFOLIO VALUATION (CONTINUED)
Domestic exchange traded or NASDAQ listed equity securities will be
valued at their last composite sale prices as reported on the exchanges
where such securities are traded. If no sales of such securities are
reported on a particular day, the securities will be valued based upon
their composite bid prices for securities held long, or their composite
asked prices for securities held short, as reported by such exchanges.
Securities traded on a foreign securities exchange will be valued at
their last sale prices on the exchange where such securities are
primarily traded, or in the absence of a reported sale on a particular
day, at their bid prices (in the case of securities held long) or asked
prices (in the case of securities held short) as reported by such
exchange. Listed options will be valued using last sales prices as
reported by the exchange with the highest reported daily volume for
such options or, in the absence of any sales on a particular day, at
their bid prices as reported by the exchange with the highest volume on
the last day a trade was reported. Other securities for which market
quotations are readily available will be valued at their bid prices (or
asked prices in the case of securities held short) as obtained from one
or more dealers making markets for such securities. If market
quotations are not readily available, securities and other assets will
be valued at fair value as determined in good faith by, or under the
supervision of, the Individual General Partners.
Debt securities will be valued in accordance with the procedures
described above, which with respect to such securities may include the
use of valuations furnished by a pricing service, which employs a
matrix to determine valuation for normal institutional size trading
units, or consultation with brokers and dealers in such securities. The
Individual General Partners will periodically monitor the
reasonableness of valuations provided by any such pricing service. Debt
securities with remaining maturities of 60 days or less will, absent
unusual circumstances, be valued at amortized cost, so long as such
valuation is determined by the Individual General Partners to represent
fair value.
Futures contracts and options thereon, which are traded on commodities
exchanges, are valued at their settlement value as of the close of such
exchanges.
All assets and liabilities initially expressed in foreign currencies
will be converted into U.S. dollars using foreign exchange rates
provided by a pricing service compiled as of 4:00 p.m. London time.
Trading in foreign securities generally is completed, and the values of
such securities are determined, prior to the close of securities
markets in the U.S. Foreign exchange rates are also determined prior to
such close. On occasion, the values of such securities and exchange
rates may be affected by events occurring between the time as of which
determination of such values or exchange rates are made and the time as
of which the net asset value of the Partnership is determined. When
such events materially affect the values of securities held by the
Partnership or its liabilities, such securities and liabilities will be
valued at fair value as determined in good faith by, or under the
supervision of, the Individual General Partners.
-5-
<PAGE>
AUGUSTA PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS - JUNE 30, 1999 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
a. PORTFOLIO VALUATION (CONTINUED)
The Partnership may enter into transactions in financial futures,
foreign exchange options and foreign currency forward contracts that
are used for hedging and nonhedging purposes. These contracts are
valued at fair value with the resulting gains and losses included in
net gain from investment transactions. The Partnership did not hold any
financial futures, foreign exchange options or foreign currency forward
contracts at June 30, 1999.
b. ORGANIZATION COSTS
The expenses incurred by the Partnership in connection with its
organization are being amortized over a 60-month period beginning with
the commencement of operations on September 4, 1996.
c. INCOME TAXES
No provision for the payment of Federal, state or local income taxes on
the profits of the Partnership will be made. The Partners are
individually liable for the income taxes on their share of the
Partnership's income.
3. MANAGEMENT FEE, RELATED PARTY TRANSACTIONS AND OTHER
CIBC WM provides certain management and administrative services to the
Partnership including, among other things, providing office space and
other support services to the Partnership. In exchange for such
services, the Partnership pays CIBC WM a monthly management fee of
.08333% (1% on an annualized basis) of the Partnership's net assets
determined as of the beginning of the month, excluding assets
attributable to the Manager's capital account.
During the six months ended June 30, 1999, CIBC WM earned $16,680 in
brokerage commissions from portfolio transactions executed on behalf of
the Partnership.
At the end of a twelve month period following the admission of a
limited partner to the Partnership, and generally at the end of each
fiscal year thereafter, the Manager is entitled to an incentive
allocation of 20% of net profits, if any, that have been credited to
the capital account of such limited partner during such period. The
incentive allocation will be charged to a limited partner only to the
extent that cumulative net profits with respect to such limited partner
through the close of any period exceeds the highest level of cumulative
net profits with respect to such limited partner through the close of
any prior period.
-6-
<PAGE>
AUGUSTA PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS - JUNE 30, 1999 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
3. MANAGEMENT FEE, RELATED PARTY TRANSACTIONS AND OTHER (CONTINUED)
Each Independent Individual General Partner who is not an "interested
person" of the Partnership, as defined by the Act, receives an annual
retainer of $5,000 plus a fee for each meeting attended. Any Individual
General Partner who is an "interested person" does not receive any
annual or other fee from the Partnership. One Individual General
Partner is an "interested person" of the Partnership. All Individual
General Partners are reimbursed by the Partnership for all reasonable
out-of-pocket expenses incurred by them in performing their duties. For
the six months ended June 30, 1999, fees (including meeting fees and
the annual retainer) and expenses paid to the Individual General
Partners totaled $21,790.
Chase Manhattan Bank serves as Custodian of the Partnership's assets.
PFPC Inc. serves as Administrator and Accounting Agent to the
Partnership, and in that capacity provides certain accounting,
recordkeeping, tax and investor related services.
4. SECURITIES TRANSACTIONS
Aggregate purchases and sales of investment securities, excluding
short-term securities, for the six months ended June 30, 1999, amounted
to $444,534,548 and $479,561,377, respectively.
At June 30, 1999, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes. At June 30, 1999, accumulated net unrealized appreciation on
investments, options, and securities sold, not yet purchased, was
$33,127,316, consisting of $33,539,336 gross unrealized appreciation
and $412,020 gross unrealized depreciation.
Due from broker represents receivables and payables from unsettled
security trades, securities sold, not yet purchased and written
options.
5. SHORT-TERM BORROWINGS
The Partnership has the ability to trade on margin and, in that
connection, borrow funds from brokers and banks for investment
purposes. Trading in equity securities on margin involves an initial
cash requirement representing at least 50% of the underlying security's
value with respect to transactions in U.S. markets and varying
percentages with respect to transactions in foreign markets. The Act
requires the Partnership to satisfy an asset coverage requirement of
300% of its indebtedness, including amounts borrowed, measured at the
time the Partnership incurs the indebtedness. The Partnership pays
interest on outstanding margin borrowings at an annualized rate of
LIBOR plus .875%. The Partnership pledges securities as collateral for
the margin borrowings, which are maintained in a segregated account
held by the Custodian. As of June 30, 1999, the Partnership did not
have any margin borrowings outstanding. For the six months ended June
30, 1999, the average daily amount of such borrowings was $6,106,931.
-7-
<PAGE>
AUGUSTA PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS - JUNE 30, 1999 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
6. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK OR
CONCENTRATIONS OF CREDIT RISK
In the normal course of business, the Partnership may trade various
financial instruments and enter into various investment activities with
off-balance sheet risk. These financial instruments include forward and
futures contracts, options and sales of securities, not yet purchased.
Generally, these financial instruments represent future commitments to
purchase or sell other financial instruments at specific terms at
specified future dates. Each of these financial instruments contains
varying degrees of off-balance sheet risk whereby changes in the market
value of the securities underlying the financial instruments may be in
excess of the amounts recognized in the Statement of Assets,
Liabilities and Partners' Capital.
The Partnership maintains cash in bank deposit accounts which, at
times, may exceed federally insured limits. The Partnership has not
experienced any losses in such accounts and does not believe it is
exposed to any significant credit risk on cash.
The Partnership's foreign exchange trading activities involve the
purchase and sale (writing) of foreign exchange options having various
maturity dates. The Partnership may seek to limit its exposure to
foreign exchange rate movements by hedging such option positions with
foreign exchange positions in spot currency, futures and forward
contracts. At June 30, 1999, the Partnership had no spot currency,
futures or forward contracts outstanding.
Securities sold, not yet purchased represent obligations of the
Partnership to deliver specified securities and thereby creates a
liability to purchase such securities in the market at prevailing
prices. Accordingly, these transactions result in off-balance sheet
risk as the Partnership's ultimate obligation to satisfy the sale of
securities sold, not yet purchased may exceed the amount indicated in
the Statement of Assets, Liabilities and Partners' Capital.
The risk associated with purchasing an option is that the Partnership
pays a premium whether or not the option is exercised. Additionally,
the Partnership bears the risk of loss of premium and change in market
value should the counterparty not perform under the contract. Put and
call options purchased are accounted for in the same manner as
investment securities.
When the Partnership writes an option, the premium received by the
Partnership is recorded as a liability and is subsequently adjusted to
the current market value of the option written. If a call option is
exercised, the premium is added to the proceeds from the sale of the
underlying security or currency in determining whether the Partnership
has realized a gain or loss. In writing an option, the Partnership
bears the market risk of an unfavorable change in the price of the
security or currency underlying the written option.
Exercise of an option written by the Partnership could result in the
Partnership selling or buying a security or currency at a price
different from the current market value.
-8-
<PAGE>
AUGUSTA PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS - JUNE 30, 1999 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
6. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK OR
CONCENTRATIONS OF CREDIT RISK (CONTINUED)
Transactions in purchased options were as follows:
<TABLE>
<CAPTION>
CALL OPTIONS PUT OPTIONS
-------------------------- ---------------------------
NUMBER AMOUNT OF NUMBER AMOUNT OF
OF CONTRACTS PREMIUM OF CONTRACTS PREMIUM
------------ --------- ------------ ---------
<S> <C> <C> <C> <C>
Beginning balance 38,670 $1,751,338 480 $ 721,440
Options purchased 20,805 6,800,008 6,225 2,700,462
Options closed (52,785) (5,390,300) (6,705) (3,421,902)
Expired options ( 840) ( 448,770) 0 0
------- --------- ------- ---------
Options outstanding at
June 30, 1999 5,850 $2,712,276 0 $ 0
======= ========== ======= =========
</TABLE>
Transactions in written options were as follows:
<TABLE>
<CAPTION>
CALL OPTIONS PUT OPTIONS
-------------------------- ---------------------------
NUMBER AMOUNT OF NUMBER AMOUNT OF
OF CONTRACTS PREMIUM OF CONTRACTS PREMIUM
------------ --------- ------------ ---------
<S> <C> <C> <C> <C>
Beginning balance 11,560 $ 5,326,060 0 $ 0
Options written 37,892 15,139,964 280 170,654
Options closed (32,349) (16,377,739) (280) (170,654)
Expired options (10,974) (2,650,699) 0 0
Options split 1,045 0 0 0
------- ----------- ---- --------
Options outstanding at
June 30, 1999 7,174 $ 1,437,586 0 $ 0
======= =========== ==== ========
</TABLE>
-9-
<PAGE>
AUGUSTA PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS - JUNE 30, 1999 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
7. FINANCIAL INSTRUMENTS HELD OR ISSUED FOR TRADING PURPOSES
The Partnership maintains positions in a variety of financial
instruments. The following table summarizes the components of net
realized and unrealized gains from investment transactions:
NET GAINS / (LOSSES)
FOR THE SIX MONTHS ENDED
JUNE 30, 1999
------------------------
Equity securities $35,759,369
Equity options 3,549,606
Equity index options (529,445)
Written options 408,180
Fixed income securities 499,912
Futures (183,773)
FOREIGN SECURITIES:
Equities (230,831)
-----------
$39,273,018
===========
The following table presents the market values of derivative financial
instruments and the average market values of those instruments:
AVERAGE MARKET VALUE
MARKET VALUE AT FOR SIX MONTHS ENDED
JUNE 30, 1999 JUNE 30, 1999
------------- ---------------------
ASSETS:
Equity options $ 4,031,250 $ 1,881,502
LIABILITIES:
Written options ($ 1,296,412) ($ 2,991,661)
Average market values presented above are based upon month-end market
values during the six months ended June 30, 1999.
-10-
<PAGE>
AUGUSTA PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS - JUNE 30, 1999 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
8. SELECTED FINANCIAL RATIOS AND OTHER SUPPLEMENTAL INFORMATION
The following represents the ratios to average net assets and other
supplemental information for each period.
<TABLE>
<CAPTION>
SEPTEMBER 4, 1996
SIX MONTHS YEAR YEAR (COMMENCEMENT OF
ENDED ENDED ENDED OPERATIONS) TO
JUNE 30, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998 1997 1996
<S> <C> <C> <C> <C>
Ratio of net investment loss to
average net assets (0.52%)* (0.25%) (0.48%) (0.83%)*
Ratio of operating expenses to
average net assets 1.62%* 1.57% 1.61% 2.27%*
Ratio of interest expense to
average net assets 0.33%* 0.18% 0.07% 0.01%*
Ratio of dividends on securities
sold, not yet purchased
to average net assets 0.08%* 0.12% 0.12% 0.06%*
Total return *** 32.36% 17.45% 25.94% 17.20%
Portfolio turnover rate 312% 723% 627% 215%
Average commission rate paid ** $ 0.0592 $ 0.0584 $ 0.0527 $ 0.0569
Average debt ratio 4.69% 2.19% 1.04% 0.28%
<FN>
* Annualized.
** Average commission rate paid on purchases and sales of investment securities held long.
*** Total return assumes a purchase of a Limited Partnership interest in the Partnership on the first day
and a sale of the Limited Partnership interest on the last day of the
period noted, before incentive allocation to the Manager, if any. Total
returns for a period of less than a full year are not annualized.
</FN>
</TABLE>
-11-
<PAGE>
AUGUSTA PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS - JUNE 30, 1999 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
9. YEAR 2000
Like other investment companies and financial and business
organizations around the world, the Partnership could be adversely
affected if the computer systems it uses and those used by the
Partnership's brokers and other major service providers do not properly
process and calculate date-related information and data from and after
January 1, 2000. This is commonly known as the "Year 2000 Issue."
The Partnership has assessed its computer systems and the systems
compliance issues of its brokers and other major service providers. The
Partnership has taken steps that it believes are reasonably designed to
address the Year 2000 Issue with respect to the computer systems it
uses and has obtained satisfactory assurances that comparable steps are
being taken by its brokers and other major service providers. At this
time, however, there can be no assurance that these steps will be
sufficient to address all Year 2000 Issues. The inability of the
Partnership or its third party providers to timely complete all
necessary procedures to address the Year 2000 Issue could have a
material adverse effect on the Partnership's operations. Management
will continue to monitor the status of and its exposure to this issue.
For the six months ended June 30, 1999, the Partnership incurred no
Year 2000 related expenses, and it does not expect to incur significant
Year 2000 expenses in the future.
The Partnership intends to develop contingency plans designed to ensure
that third party non-compliance will not materially affect the
Partnership's operations.
-12-
<PAGE>
AUGUSTA PARTNERS, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
JUNE 30, 1999
MARKET VALUE
SHARES
COMMON STOCKS - 91.94%
AGRICULTURAL OPERATIONS - 1.29%
65,000 Delta and Pine Land Co. $ 2,047,500
-----------
APPAREL MANUFACTURERS - 0.97%
45,000 Jones Apparel Group, Inc. * 1,544,085
-----------
APPLICATIONS SOFTWARE - 0.73%
45,000 Peregrine Systems, Inc. 1,155,960
-----------
CABLE TV - 4.10%
45,000 Century Communications Corp., Class A * 2,070,000
60,000 MediaOne Group, Inc. * (a) 4,462,500
-----------
6,532,500
-----------
CELLULAR TELECOMMUNICATIONS - 1.21%
15,000 Telecel-Communicacoes Pessoais, SA 1,933,627
-----------
COMPUTER SOFTWARE - 2.38%
100,000 Aspect Development, Inc. * 1,850,000
140,000 Parametric Technology Corp. * 1,942,500
-----------
3,792,500
-----------
COMPUTERS - INTEGRATED SYSTEMS - 2.23%
75,000 Saville Systems PLC, Sponsored ADR * (a) 1,087,500
150,000 Silicon Graphics, Inc. * 2,456,250
-----------
3,543,750
-----------
CONSULTING SERVICES - 1.69%
105,000 Comdisco, Inc. 2,690,625
-----------
DIALYSIS CENTERS - 1.95%
200,000 Total Renal Care Holdings, Inc. * (a) 3,112,600
-----------
DIVERSIFIED MANUFACTURING OPERATIONS - 9.52%
160,000 Tyco International Ltd. (b) 15,160,000
-----------
The accompanying notes are an integral part of these financial statements.
-13-
<PAGE>
AUGUSTA PARTNERS, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED)(CONTINUED)
- --------------------------------------------------------------------------------
JUNE 30, 1999
MARKET VALUE
SHARES
COMMON STOCK - (CONTINUED)
DRUG DELIVERY SYSTEMS - 1.74%
120,000 Alkermes, Inc. * $ 2,775,000
-----------
FINANCE - CREDIT CARD - 4.12%
100,000 CompuCredit Corp. (a) 1,900,000
50,000 Providian Financial Corp. 4,662,500
-----------
6,562,500
-----------
HEALTHCARE COST CONTAINMENT - 4.05%
600,000 Medaphis Corp. * (a) 3,450,000
400,000 MedPartners, Inc. * (a) 3,000,000
-----------
6,450,000
-----------
INTERNET SOFTWARE - 0.11%
5,000 Northpoint Communications Group, Inc. 182,500
-----------
MEDICAL-BIOMEDICAL/GENE - 0.73%
25,000 Centocor, Inc. 1,165,625
-----------
MEDICAL - DRUGS - 2.32%
80,000 Forest Laboratories, Inc. * 3,700,000
-----------
MEDICAL INFORMATION SYSTEMS - 4.42%
225,000 IMS Health, Inc. 7,031,250
-----------
NETWORKING PRODUCTS - 1.82%
45,000 Cisco Systems, Inc. * 2,899,710
-----------
OFFICE AUTOMATION & EQUIPMENT - 1.41%
400,000 Danka Business Systems PLC, Sponsored ADR 2,250,000
-----------
OIL EXPLORATION & PRODUCTION - 4.49%
70,000 Andarko Petroleum Corp. (a) 2,576,910
325,000 Ocean Energy, Inc. * (a) 3,128,125
135,000 Vintage Petroleum, Inc. 1,451,250
-----------
7,156,285
-----------
The accompanying notes are an integral part of these financial statements.
-14-
<PAGE>
AUGUSTA PARTNERS, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED)(CONTINUED)
- --------------------------------------------------------------------------------
JUNE 30, 1999
MARKET VALUE
SHARES
COMMON STOCK - (CONTINUED)
OIL/GAS DRILLING - 1.07%
125,000 Marine Drilling Companies, Inc. * $ 1,711,000
-----------
PHARMACY SERVICES - 1.70%
215,000 OmniCare, Inc. 2,714,375
-----------
PROPERTY/CASUALTY INSURANCE - 2.13%
120,000 Ace Ltd. 3,390,000
-----------
RETAIL - RESTAURANTS - 2.47%
100,000 Outback Steakhouse, Inc. * 3,931,300
-----------
TELECOMMUNICATIONS EQUIPMENT - 8.20%
75,000 Associated Group, Inc., Class B * 4,889,100
30,000 General Instrument Corp. 1,275,000
205,000 Superior TeleCom, Inc. * (a) 5,125,000
125,000 World Access, Inc. * 1,765,625
-----------
13,054,725
-----------
TELECOMMUNICATIONS SERVICES - 15.23%
75,000 Frontier Corp. 4,396,875
50,000 Global TeleSystems Group, Inc. * 4,050,000
175,000 ICG Communications, Inc. * 3,740,625
140,000 NTL, Inc. * (a) 12,066,320
-----------
24,253,820
-----------
TELEPHONE - INTEGRATED - 2.62%
45,000 AT&T Corp. 2,511,585
150,000 Hellenic Telecommunications
Organization, S.A., ADR 1,659,450
-----------
4,171,035
-----------
TELEPHONE - LOCAL - 2.07%
45,000 Telephone and Data Systems, Inc. 3,290,625
-----------
The accompanying notes are an integral part of these financial statements.
-15-
<PAGE>
AUGUSTA PARTNERS, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED)(CONTINUED)
- --------------------------------------------------------------------------------
JUNE 30, 1999
MARKET VALUE
SHARES
COMMON STOCK - (CONTINUED)
TELEPHONE - LONG DISTANCE - 2.71%
125,000 Embratel Participacoes S.A., ADR $ 1,734,375
30,000 MCI WorldCom, Inc. * 2,581,890
------------
4,316,265
------------
THERAPEUTICS - 2.46%
75,000 Gilead Sciences, Inc. * 3,918,750
------------
TOTAL COMMON STOCKS (COST $115,555,791) 146,437,912
============
PREFERRED STOCK - 4.73%
BROADCASTING SERVICES/PROGRAMMING - 4.73%
150,000 United Global Convertible Preferred, 7.00% 7,537,500
------------
TOTAL PREFERRED STOCK (COST $7,500,000) 7,537,500
============
WARRANTS - 0.19%
TELECOMMUNICATIONS SERVICES - 0.19%
6,000 FirstWorld Communications, $0.01, 04/15/08 300,000
------------
TOTAL WARRANTS (COST $60,000) 300,000
============
FACE
AMOUNT
CONVERTIBLE BONDS - 3.03%
TELECOMMUNICATIONS SERVICES - 3.03%
$6,000,000 FirstWorld Communications,
0.00%, 04/15/08, 144A ** 3,120,000
5,000,000 SmarTalk TeleServices, Inc., 5.75%, 9/15/04 * 1,700,000
------------
4,820,000
------------
TOTAL CONVERTIBLE BONDS (COST $4,050,695) 4,820,000
============
The accompanying notes are an integral part of these financial statements.
-16-
<PAGE>
AUGUSTA PARTNERS, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS (UNAUDITED)(CONTINUED)
- --------------------------------------------------------------------------------
JUNE 30, 1999
MARKET VALUE
NUMBER OF
CONTRACTS
CALL OPTIONS - 2.53%
COMPUTER SOFTWARE - 1.79%
600 Microsoft Corp., 07/17/99, $80.00 $ 637,500
3,000 Oracle Corp., 07/17/99, $30.00 2,212,500
------------
2,850,000
------------
ELECTRONIC COMPONENTS - SEMICONDUCTORS - 0.32%
1,500 National Semiconductor, 07/17/99, $22.50 506,250
------------
MEDICAL - DRUGS - 0.42%
750 Warner-Lambert Co., 07/17/99, $60.00 675,000
------------
TOTAL CALL OPTIONS (COST $2,712,276) 4,031,250
============
TOTAL INVESTMENTS (COST $129,878,762) - 102.42% 163,126,662
============
OTHER ASSETS, LESS LIABILITIES - (2.42%) (3,858,355)
------------
NET ASSETS - 100.00% $159,268,307
============
(a) Partially or wholly held in a pledged account by the Custodian as
collateral for securities sold, not yet purchased.
(b) Partially or wholly held in a pledged account by the Custodian as collateral
for open written options.
* Non-income producing security.
** Security exempt from registration under Rule 144A of the Securities Act of
1933. This security may be resold in transactions exempt from registration
normally to qualified buyers. At June 30, 1999, this security amounted to
$3,120,000 or 1.96% of net assets.
The accompanying notes are an integral part of these financial statements.
-17-
<PAGE>
AUGUSTA PARTNERS, L.P.
SCHEDULE OF SECURITIES SOLD, NOT YET PURCHASED (UNAUDITED)
- --------------------------------------------------------------------------------
JUNE 30, 1999
MARKET VALUE
SHARES
SHORT COMMON STOCK - (10.20%)
APPLICATIONS SOFTWARE - (0.40%)
15,000 I2 Technologies, Inc. $ (645,000)
-----------
COMMERCIAL BANKS - SOUTHERN U.S. - (0.69%)
55,000 Synovus Financial Corp. (1,093,125)
-----------
ELECTRONIC COMPONENTS - SEMICONDUCTORS - (0.54%)
15,000 TriQuint Semiconductor, Inc. (852,188)
-----------
FIBER OPTICS - (1.42%)
75,000 Ciena Corp. (2,264,063)
-----------
FINANCE - INVESTMENT BANKER/BROKER - (0.21%)
10,000 Wit Capital Group, Inc. (340,000)
-----------
FINANCE - MORTGAGE LOAN/BANKER - (0.64%)
15,000 Federal National Mortgage Association (1,025,625)
-----------
INTERNET CONTENT - (0.33%)
10,000 Media Metrix, Inc. (532,500)
-----------
INTERNET SOFTWARE - (0.22%)
15,000 Juno Online Services, Inc. (345,000)
-----------
MACHINERY - ELECTRICAL - (0.76%)
22,500 W.W. Grainger, Inc. (1,210,793)
-----------
MEDICAL PRODUCTS - (0.48%)
25,596 Closure Medical Corp. (767,880)
-----------
RETAIL - APPAREL/SHOES - (0.95%)
37,500 The Children's Place Retail Stores, Inc. (1,518,750)
-----------
RETAIL - INTERNET - (0.12%)
10,000 OnSale, Inc. (189,375)
-----------
The accompanying notes are an integral part of these financial statements.
-18-
<PAGE>
AUGUSTA PARTNERS, L.P.
SCHEDULE OF SECURITIES SOLD, NOT YET PURCHASED (UNAUDITED)
- --------------------------------------------------------------------------------
JUNE 30, 1999
MARKET VALUE
SHARES
SHORT COMMON STOCK - (CONTINUED)
RETAIL - OFFICE SUPPLIES - (0.73%)
52,500 Office Depot, Inc. $ (1,158,281)
------------
TELECOMMUNICATIONS EQUIPMENT - (0.61%)
20,000 Tut Systems, Inc. (978,760)
------------
TELEPHONE - INTEGRATED - (0.80%)
30,000 Deutsche Telekom AG, Sponsored ADR (1,267,500)
------------
THERAPEUTICS - (1.02%)
75,000 Biomatrix, Inc. (1,617,225)
------------
WIRELESS EQUIPMENT - (0.28%)
10,000 Carrier Access Corp. (438,130)
------------
TOTAL SHORT COMMON STOCK (PROCEEDS $15,982,437) $(16,244,195)
============
The accompanying notes are an integral part of these financial statements.
-19-
<PAGE>
AUGUSTA PARTNERS, L.P.
SCHEDULE OF WRITTEN OPTIONS (UNAUDITED)
- --------------------------------------------------------------------------------
JUNE 30, 1999
MARKET VALUE
NUMBER OF
CONTRACTS
WRITTEN CALL OPTIONS - (0.81%)
AGRICULTURAL BIOTECH - (0.07%)
474 Monsanto Co., 10/16/99, $45.00 $ (106,650)
-----------
APPAREL MANUFACTURERS - (0.04%)
300 Jones Apparel Group, Inc., 08/21/99, $35.00 (67,500)
-----------
COMPUTER SOFTWARE - (0.19%)
575 Aspect Development, Inc., 07/17/99, $15.00 (186,875)
430 Aspect Development, Inc., 07/17/99, $17.50 (56,459)
600 Microsoft Corp., 07/17/99, $95 .00 (63,780)
-----------
(307,114)
-----------
COMPUTERS - INTEGRATED SYSTEMS - (0.13%)
750 Saville Systems, PLC, 08/21/99, $25.00 (16,875)
1,500 Silicon Graphics, Inc., 08/21/99, $17.50 (187,500)
-----------
(204,375)
-----------
COSMETICS & TOILETRIES - (0.14%)
220 Colgate-Palmolive Co., 01/22/00, $100.00 (222,750)
-----------
FINANCE - CREDIT CARD - (0.03%)
175 Providian Financial Corp., 07/17/99, $95.00 (54,688)
-----------
RETAIL - RESTAURANTS - (0.11%)
750 Outback Steakhouse, Inc., 08/21/99, $40.00 (182,850)
-----------
TELECOMMUNICATIONS EQUIPMENT - (0.04%)
375 ADC Telecommunications, Inc., 07/17/99, $50.00 (60,935)
-----------
TELECOMMUNICATIONS SERVICES - (0.03%)
500 Global TeleSystems, Inc., 07/17/99, $95.00 (37,500)
150 NTL, Inc., 07/17/99, $100.00 (7,500)
-----------
(45,000)
-----------
The accompanying notes are an integral part of these financial statements.
-20-
<PAGE>
AUGUSTA PARTNERS, L.P.
SCHEDULE OF WRITTEN OPTIONS (UNAUDITED)(CONTINUED)
- --------------------------------------------------------------------------------
JUNE 30, 1999
MARKET VALUE
NUMBER OF
CONTRACTS
WRITTEN CALL OPTIONS - (CONTINUED)
Therapeutics - (0.03%)
375 Gilead Sciences, Inc., 07/17/99, $55.00 $ (44,550)
-----------
TOTAL WRITTEN CALL OPTIONS (PREMIUM $1,437,586) $(1,296,412)
===========
The accompanying notes are an integral part of these financial statements.
-21-
