AUGUSTA PARTNERS, L.P.
FINANCIAL STATEMENTS
WITH REPORT OF INDEPENDENT AUDITORS
FOR THE YEAR ENDED DECEMBER 31, 1999
<PAGE>
AUGUSTA PARTNERS, L.P.
FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1999
CONTENTS
Report of Independent Auditors............................................ 1
Statement of Assets, Liabilities and Partners' Capital.................... 2
Statement of Operations................................................... 3
Statement of Changes in Partners' Capital - Net Assets.................... 4
Notes to Financial Statements............................................. 5
Schedule of Portfolio Investments......................................... 14
Schedule of Securities Sold, Not Yet Purchased............................ 19
Schedule of Written Options............................................... 20
<PAGE>
Report of Independent Auditors
To the Partners of
Augusta Partners, L.P.
We have audited the accompanying statement of assets, liabilities and partners'
capital of Augusta Partners, L.P. (the "Partnership"), including the schedules
of portfolio investments, securities sold, not yet purchased, and written
options as of December 31, 1999, and the related statement of operations for the
year then ended, and the statement of changes in partners' capital--net assets
for each of the two years in the period then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of investments owned at December 31, 1999, by
correspondence with the custodian and brokers. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Augusta Partners, L.P. at
December 31, 1999, the results of its operations for the year then ended, and
the changes in its partners' capital--net assets for each of the two years in
the period then ended, in conformity with accounting principles generally
accepted in the United States.
February 11, 2000
-1-
<PAGE>
AUGUSTA PARTNERS, L.P.
STATEMENT OF ASSETS, LIABILITIES AND PARTNERS' CAPITAL (IN THOUSANDS)
- -------------------------------------------------------------------------------
DECEMBER 31, 1999
ASSETS
Cash $ 18,463
Investments in securities, at market (cost - $150,715) 209,712
Due from broker 6,598
Dividends receivable 55
Interest receivable 54
Organizational costs (net of accumulated amortization of $459) 232
Other assets 24
--------
Total assets 235,138
--------
LIABILITIES
Securities sold, not yet purchased, at market (proceeds - $11,287) 10,598
Outstanding options written, at value (premiums - $4,854) 4,275
Withdrawals payable 37,917
Dividends payable on securities sold, not yet purchased 23
Management fee payable 175
Accrued expenses 310
--------
TOTAL LIABILITIES 53,298
--------
NET ASSETS $181,840
========
PARTNERS' CAPITAL
Represented by:
Capital contributions - (net of syndication costs of $50) $121,011
Capital withdrawals (100,583)
Accumulated net investment loss (2,029)
Accumulated net realized gain on investments 103,175
Accumulated net unrealized appreciation on investments 60,266
--------
Partners' Capital - Net Assets $181,840
========
The accompanying notes are an integral part of these financial statements
-2-
<PAGE>
AUGUSTA PARTNERS, L.P.
STATEMENT OF OPERATIONS (IN THOUSANDS)
- -------------------------------------------------------------------------------
Year Ended
December 31, 1999
INVESTMENT INCOME
Dividends $ 882
Interest 1,049
--------
1,931
--------
EXPENSES
Operating expenses:
Management fee 1,523
Professional fees 271
Administration fees 215
Amortization of organizational costs 138
Custodian fees 87
Insurance expense 30
Individual General Partners' fees and expenses 28
Miscellaneous 25
--------
TOTAL OPERATING EXPENSES 2,317
Interest expense 268
Dividends on securities sold, not yet purchased 91
--------
TOTAL EXPENSES 2,676
--------
NET INVESTMENT LOSS (745)
--------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS REALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Investment securities 79,089
Purchased options 5,065
Futures transactions 193
Written options (11,789)
Securities sold, not yet purchased (15,010)
--------
NET REALIZED GAIN ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS 57,548
NET CHANGE IN UNREALIZED APPRECIATION ON INVESTMENTS 33,212
--------
NET REALIZED AND UNREALIZED GAIN 90,760
--------
INCREASE IN PARTNERS' CAPITAL DERIVED FROM INVESTMENT
ACTIVITIES AND FOREIGN CURRENCY TRANSACTIONS $ 90,015
========
The accompanying notes are an integral part of these financial statements
-3-
<PAGE>
AUGUSTA PARTNERS, L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL - NET ASSETS (IN THOUSANDS)
- -------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998
FROM INVESTMENT ACTIVITIES
Net investment loss $(745) $(361)
Net realized gain on investments
and foreign currency transactions 57,548 13,777
Net change in unrealized
appreciation on investments 33,212 10,678
-------- --------
INCREASE IN PARTNERS' CAPITAL DERIVED
FROM INVESTMENT ACTIVITIES 90,015 24,094
PARTNERS' CAPITAL TRANSACTIONS
Capital contributions 11,388 9,618
Capital withdrawals-General Partner (18,074) (5,067)
Capital withdrawals-Limited Partners (19,940) (38,960)
-------- --------
DECREASE IN PARTNERS' CAPITAL
DERIVED FROM CAPITAL TRANSACTIONS (26,626) (34,409)
PARTNERS' CAPITAL AT BEGINNING OF YEAR 118,451 128,766
-------- --------
PARTNERS' CAPITAL AT END OF YEAR $181,840 $118,451
======== ========
The accompanying notes are an integral part of these financial statements
-4-
<PAGE>
AUGUSTA PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1999
- -------------------------------------------------------------------------------
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 options, bonds 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. ("CIBC WM") (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 CIBC WM's supervision.
The acceptance of initial and additional capital contributions from
Limited Partners 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 an accrual
basis.
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
-5-
<PAGE>
AUGUSTA PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1999 (CONTINUED)
- --------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
A. PORTFOLIO VALUATION (CONTINUED)
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 sold 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 sold 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
sold 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.
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
-6-
<PAGE>
AUGUSTA PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1999 (CONTINUED)
- --------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
A. PORTFOLIO VALUATION (CONTINUED)
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 December 31, 1999.
B. ORGANIZATION COSTS
The expenses incurred by the Partnership in connection with its
organization are being amortized over a 60-month period beginning at
the commencement of operations, September 4, 1996.
C. INCOME TAXES
No provision for the payment of Federal, state or local income taxes on
the profits of the Partnership have been made. The Partners are
individually liable for 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. 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 year ended December 31, 1999, CIBC WM earned $34,830 in
brokerage commissions from portfolio transactions executed on behalf of
the Partnership.
At the end of the 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. During the year ended December 31, 1999, the
incentive allocation to the Manager was $17,587,334.
Each 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.
-7-
<PAGE>
AUGUSTA PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1999 (CONTINUED)
- --------------------------------------------------------------------------------
3. MANAGEMENT FEE, RELATED PARTY TRANSACTIONS AND OTHER (CONTINUED)
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 year ended December 31, 1999, fees paid to the
Individual General Partners (including meeting fees and the annual
retainer) and expenses totaled $28,099.
The 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, record
keeping, tax and investor related services.
4. SECURITIES TRANSACTIONS
Aggregate purchases and sales of investment securities, excluding
short-term securities, for the year ended December 31, 1999, amounted
to $951,727,280 and $1,007,353,230 respectively.
At December 31, 1999, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes. At December 31, 1999, accumulated net unrealized appreciation
on investments was $60,266,086, consisting of $64,862,673 gross
unrealized appreciation and $4,596,587 gross unrealized depreciation.
Due from broker primarily represents receivables and payables from
unsettled security trades, proceeds from 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 0.875%. The Partnership pledges securities as collateral for
the margin borrowings, which are maintained in a segregated account
held by the Custodian. As of December 31, 1999, the Partnership did not
have any margin borrowings outstanding. For the year ended December 31,
1999, the average daily amount of such borrowings was $3,197,211.
-8-
<PAGE>
AUGUSTA PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1999 (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 sold, not yet
purchased. Generally, these financial instruments represent future
commitments to purchase or sell other financial instruments at specific
terms at 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 December 31, 1999, the Partnership had no spot currency,
futures or forward contracts outstanding.
Securities sold, not yet purchased represents 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, index 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.
-9-
<PAGE>
AUGUSTA PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1999 (CONTINUED)
- --------------------------------------------------------------------------------
6. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK OR
CONCENTRATIONS OF CREDIT RISK (CONTINUED)
Transactions in purchased options were as follows:
CALL OPTIONS PUT OPTIONS
-------------------------- -------------------------
NUMBER NUMBER
OF CONTRACTS COST OF CONTRACTS COST
------------ ------------ ------------ ------------
Beginning balance 38,670 $ 1,751,338 480 $ 721,440
Options purchased 100,064 26,053,818 68,540 40,223,806
Options closed (118,865) (23,666,114) (66,965) (39,257,301)
Options expired (9,145) (3,075,51) (1,590) (442,675)
--------- ------------ ------- ------------
Options outstanding at
December 31, 1999 10,724 $ 1,063,530 465 $ 1,245,270
========= ============ ======= ============
Transactions in written options were as follows:
CALL OPTIONS PUT OPTIONS
-------------------------- ------------------------
NUMBER AMOUNT OF NUMBER AMOUNT OF
OF CONTRACTS PREMIUM OF CONTRACTS PREMIUM
------------ ------------ ------------ ----------
Beginning balance 11,560 $ 5,326,061 - $ -
Options written 61,628 35,772,125 2,380 1,488,798
Options closed (52,819) (33,047,505) (1,915) (679,181)
Options expired (18,764) (4,006,420) - -
Options split 1,265 - - -
------- ------------ ----------- ----------
Options outstanding at
December 31, 1999 2,870 $ 4,044,261 465 $ 809,617
======= ============ =========== ==========
-10-
<PAGE>
AUGUSTA PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1999 (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 YEAR ENDED
DECEMBER 31, 1999
Equity securities $ 106,651,758
Securities sold, not yet purchased (10,914,280)
Equity options 7,498,690
Equity index options (2,397,428)
Cross currency options (1,457,760)
Written options (11,315,273)
Fixed income securities 1,594,803
Futures 193,378
FOREIGN SECURITIES:
Equities 994,986
Securities sold, not yet purchased (88,631)
-------------
$ 90,760,243
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 THE YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1999
----------------- -----------------
ASSETS:
Equity options $ 2,295,932 $ 1,571,659
Equity index options - 816,130
Cross currency options - 126,476
LIABILITIES:
Written options $ (4,274,501) $(2,050,791)
Average market values presented above are based upon month-end market
values during the year ended December 31, 1999.
-11-
<PAGE>
AUGUSTA PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1999 (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
(COMMENCEMENT OF
YEAR ENDED YEAR ENDED YEAR ENDED OPERATIONS) TO
DECEMBER 31, 1999 DECEMBER 31, 1998 DECEMBER 31, 1997 DECEMBER 31, 1996
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Ratio of net investment loss to
average net assets (0.48%) (0.25%) (0.48%) (0.83%)*
Ratio of operating expense
to average net assets 1.50% 1.57% 1.61% 2.27%*
Ratio of interest expense to
average net assets 0.17% 0.18% 0.07% 0.01%*
Ratio of dividends on securities
sold, not yet purchased 0.06% 0.12% 0.12% 0.06%*
Total return** 72.69% 17.45% 25.94% 17.20%
Portfolio turnover 617% 723% 627% 215%
Average debt ratio 2.06% 2.19% 1.04% 0.28%
<FN>
* Annualized.
** Total return assumes a purchase of a Limited Partnership interest
in the Partnership on the first day and a sale of the 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>
-12-
<PAGE>
AUGUSTA PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1999 (CONTINUED)
- --------------------------------------------------------------------------------
9. SUBSEQUENT EVENT
On January 1, 2000 the Partnership received initial and additional
capital contributions from Limited Partners of approximately
$15,550,000.
-13-
<PAGE>
AUGUSTA PARTNERS, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1999
MARKET VALUE
SHARES
COMMON STOCK - 105.68%
AIRLINES - 2.05%
75,000 Delta Air Lines, Inc. $ 3,735,975
-----------
APPLICATIONS SOFTWARE - 2.32%
50,000 Peregrine Systems, Inc.* 4,209,400
-----------
AUTO - MEDIUM & HEAVY DUTY TRUCKS - 2.07%
80,000 Navistar International Corp.* 3,760,000
-----------
BROADCASTING SERVICES/PROGRAMMING - 3.30%
85,000 UnitedGlobal Com, Inc., Class A.* (b) 6,003,125
-----------
CABLE TV - 2.53%
60,000 MediaOne Group, Inc. * 4,608,780
-----------
CELLULAR TELECOMMUNICATIONS - 2.21%
95,000 Telesp Cellular Participacoes, S.A., ADR 4,025,625
-----------
COMMERCIAL SERVICES - 2.70%
185,000 Cendant Corp.* 4,914,155
-----------
COMPUTER SOFTWARE - 4.06%
75,000 Cognos, Inc.* 3,459,375
145,000 Parametric Technology Corp. * 3,924,135
-----------
7,383,510
-----------
CONSULTING SERVICES - 0.76%
127,500 Navigant Consulting, Inc.* 1,386,563
-----------
DIALYSIS CENTERS - 2.40%
652,500 Total Renal Care Holdings, Inc. * 4,363,920
-----------
DIVERSIFIED MANUFACTURING OPERATIONS - 6.65%
310,000 Tyco International, Ltd. (a) 12,090,000
-----------
The accompanying notes are an integral part of these financial statements.
-14-
<PAGE>
AUGUSTA PARTNERS, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
DECEMBER 31, 1999
MARKET VALUE
SHARES
COMMON STOCK - (CONTINUED)
DRUG DELIVERY SYSTEMS - 4.06%
95,000 Alkermes, Inc. * $ 4,666,875
40,000 ALZA Corp., Sponsored ADR* 1,385,000
45,000 Elan Corp., PLC, ADR* 1,327,500
-----------
7,379,375
-----------
ELECTRIC - INTEGRATED - 1.69%
85,000 Montana Power Co. 3,065,355
-----------
ELECTRONIC COMPONENTS - SEMICONDUCTORS - 1.18%
50,000 National Semiconductor Corp.* 2,140,650
-----------
FINANCE - CREDIT CARD - 2.65%
125,000 CompuCredit Corp.* 4,812,500
-----------
GOLF - 1.56%
160,000 Callaway Golf Co. 2,830,080
-----------
HEALTH CARE COST CONTAINMENT - 2.91%
1,045,000 Caremark Rx, Inc.* 5,290,835
-----------
INTERNET CONTENT - 2.25%
50,000 El Sitio, Inc.* 1,837,500
60,000 Multex.com, Inc.* 2,257,500
-----------
4,095,000
-----------
INTERNET SOFTWARE - 4.19%
47,500 Marimba, Inc.* 2,187,969
175,000 Rhythms NetConnections, Inc.* 5,425,000
-----------
7,612,969
-----------
The accompanying notes are an integral part of these financial statements.
-15-
<PAGE>
AUGUSTA PARTNERS, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1999
MARKET VALUE
SHARES
COMMON STOCK - (CONTINUED)
MEDICAL - BIOMEDICAL/GENE - 3.70%
50,000 Genentech, Inc.* $6,725,000
----------
MEDICAL INFORMATION SYSTEMS - 4.80%
160,000 Allscripts, Inc.* 7,040,000
200,001 Per-Se Technologies, Inc.* 1,681,209
----------
8,721,209
----------
MULTI-LINE INSURANCE - 1.17%
45,000 Hartford Financial Services Group, Inc. 2,131,875
----------
OFFICE AUTOMATION & EQUIPMENT - 2.97%
425,000 Danka Business Systems, PLC, Sponsored ADR* 5,392,400
----------
OIL COMPANIES - EXPLORATION & PRODUCTION - 3.10%
260,000 Ocean Energy, Inc. * 2,015,000
250,000 Pennaco Energy, Inc.* 2,000,000
135,000 Vintage Petroleum, Inc.* 1,628,505
----------
5,643,505
----------
OIL & GAS DRILLING - 0.46%
50,000 Global Marine, Inc.* 831,250
----------
PHARMACY SERVICES - 2.64%
400,000 OmniCare, Inc. (b) 4,800,000
----------
PIPELINES - 1.26%
75,000 Williams Companies, Inc. 2,292,225
----------
PRINTING - COMMERCIAL - 1.64%
200,000 Consolidated Graphics, Inc.* 2,987,600
----------
RETAIL - RESTAURANTS - 2.35%
165,000 Outback Steakhouse, Inc. * 4,279,770
----------
The accompanying notes are an integral part of these financial statements.
-16-
<PAGE>
AUGUSTA PARTNERS, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1999
MARKET VALUE
SHARES
COMMON STOCK - (CONTINUED)
TELECOMMUNICATIONS EQUIPMENT - 3.79%
75,000 Associated Group, Inc., Class B * $ 6,900,000
------------
TELECOMMUNICATIONS SERVICES - 18.85%
205,000 Global TeleSystems Group, Inc. * (b) 7,123,750
175,000 ICG Communications, Inc. * 3,281,250
125,000 Infonet Services Corp., Class B* 3,281,250
165,000 NTL, Inc. (b) 20,583,750
------------
34,270,000
------------
TELEPHONE - LOCAL - 3.55%
105,000 Tele Norte Leste Participacoes S.A., ADR 2,677,500
30,000 Telephone & Data Systems, Inc. 3,780,000
------------
6,457,500
------------
THERAPEUTICS - 2.42%
75,000 QLT Photo Therapeutics, Inc.* 4,406,250
------------
TOYS - 1.44%
200,000 Mattel, Inc. 2,625,000
------------
TOTAL COMMON STOCK (COST $139,317,044) 192,171,401
============
PREFERRED STOCK - 5.99%
BROADCASTING SERVICES/PROGRAMMING - 5.99%
120,000 UnitedGlobal Com, Inc. Preferred, 7.00% 10,890,000
------------
TOTAL PREFERRED STOCK (COST $6,316,094) 10,890,000
------------
WARRANTS - 0.43%
Internet Content - 0.43%
6,500 FirstWorld Communications, Inc. $0.01, 04/15/08 780,000
------------
TOTAL WARRANTS (COST $92,500) 780,000
============
The accompanying notes are an integral part of these financial statements.
-17-
<PAGE>
AUGUSTA PARTNERS, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1999
MARKET VALUE
FACE
AMOUNT
CONVERTIBLE BONDS - 1.97%
INTERNET CONTENT - 1.97%
$6,500,000 FirstWorld Communications, Inc., 0.00%,
04/15/08, 144A ** $ 3,575,000
------------
TOTAL CONVERTIBLE BONDS (COST $2,680,354) 3,575,000
============
NUMBER OF
CONTRACTS
CALL OPTIONS - 0.71%
OTC DERIVATIVE - 0.71%
6,975 OTC Insurance Basket, 4/25/00 $100.00 827,932
1 OTC Insurance Basket, 6/06/00, $3,749.00 468,250
------------
1,296,182
------------
TOTAL CALL OPTIONS (COST $1,063,530) 1,296,182
============
PUT OPTION - 0.55%
INTERNET CONTENT - 0.55%
465 Doubleclick, Inc., 2/19/00, $230.00 999,750
------------
TOTAL PUT OPTIONS (COST $1,245,270) 999,750
============
TOTAL INVESTMENTS (COST $150,714,792)-115.33% 209,712,333
OTHER ASSETS, LESS LIABILITIES - (15.33%) 27,872,314)
------------
NET ASSETS - 100.00% $181,840,019
============
(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 December 31, 1999, this security amounted
to 1.97% of net assets.
The accompanying notes are an integral part of these financial statements.
-18-
<PAGE>
AUGUSTA PARTNERS, L.P.
SCHEDULE OF SECURITIES SOLD, NOT YET PURCHASED
- --------------------------------------------------------------------------------
December 31, 1999
Market Value
Shares
SECURITIES SOLD, NOT YET PURCHASED - (5.83%)
ELECTRONIC MEASURING INSTRUMENTS - (1.27%)
30,000 Agilent Technologies, Inc. $ (2,319,390)
------------
FINANCE - CREDIT CARD - (0.40%)
25,000 Nextcard, Inc. (721,875)
------------
MONEY CENTER BANKS - (1.74%)
25,000 J.P. Morgan & Co., Inc. (3,165,625)
------------
RETAIL - MAIL ORDER - (0.48%)
25,000 Lands' End, Inc. (868,750)
------------
TELECOMMUNICATIONS EQUIPMENT - (1.94%)
20,000 QUALCOMM, Inc. (3,522,500)
------------
TOTAL SECURITIES SOLD,
NOT YET PURCHASED (PROCEEDS $11,287,308) $(10,598,140)
============
The accompanying notes are an integral part of these financial statements.
-19-
<PAGE>
AUGUSTA PARTNERS, L.P.
SCHEDULE OF WRITTEN OPTIONS
- --------------------------------------------------------------------------------
DECEMBER 31, 1999
MARKET VALUE
NUMBER OF
CONTRACTS
WRITTEN CALL OPTIONS - (1.99%)
APPLICATIONS SOFTWARE - (0.10%)
500 Peregrine Systems, Inc., 1/22/00, $90.00 $ (175,000)
-----------
DIVERSIFIED MANUFACTURING OPERATIONS - (0.05%)
375 General Electric Co., 1/22/00, $160.00 (89,063)
-----------
INDEX - (1.08%)
390 Morgan Stanley Hi-Tech Index,
1/22/00, $1,890.00 (1,969,500)
-----------
INTERNET CONTENT - (0.23%)
155 Doubleclick, Inc., 1/22/00, $250.00 (422,375)
-----------
MEDICAL - BIOMEDICAL/GENE - (0.30%)
500 Genentech, Inc., 1/22/00, $130.00 493,750)
60 Genentech, Inc., 1/22/00, $140.00 (36,000)
90 Genentech, Inc., 1/22/00, $145.00 (23,625)
-----------
(553,375)
-----------
MEDICAL - DRUGS - (0.23%)
800 King Pharmacutical, Inc., 1/22/00, $55.00 (420,000)
-----------
TOTAL WRITTEN CALL OPTIONS (PREMIUM $4,044,261) (3,629,313)
===========
WRITTEN PUT OPTIONS - (0.35%)
INTERNET CONTENT - (0.35%)
465 Doubleclick, Inc., 1/22/00, $230.00 (645,188)
-----------
TOTAL WRITTEN PUT OPTIONS (PREMIUM $809,617) (645,188)
===========
TOTAL WRITTEN OPTIONS (PREMIUM $4,853,878) $(4,274,501)
===========
The accompanying notes are an integral part of these financial statements.
-20-
