FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(X) QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
OR ( ) TRANSITION REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended September 30, 2000
Commission File Number 333-87663
SALOMON SMITH BARNEY DIVERSIFIED 2000 FUTURES FUND L.P.
(Exact name of registrant as specified in its charter)
New York 13-4077759
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
c/o Smith Barney Futures Management LLC
388 Greenwich St. - 7th Fl.
New York, New York 10013
(Address and Zip Code of principal executive offices)
(212) 723-5424
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
<PAGE>
SALOMON SMITH BARNEY DIVERSIFIED 2000 FUTURES FUND L.P.
FORM 10-Q
INDEX
Page
Number
PART I - Financial Information:
Item 1. Financial Statements:
Statement of Financial Condition
at September 30, 2000 (unaudited). 3
Statement of Income and Expenses
and Partners' Capital
for the three months ended
September 30, 2000 and the
period from June 1, 2000
(commencement of operations) to
September 30, 2000 (unaudited). 4
Notes to Financial Statements
(unaudited) 5 - 10
Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations 11 - 12
Item 3. Quantitative and Qualitative
Disclosures of Market Risk 13 - 14
PART II - Other Information 15 - 18
2
<PAGE>
PART I
Item 1. Financial Statements
Salomon Smith Barney Diversified 2000 Futures Fund L.P.
Statement of Financial Condition
(Unaudited)
September 30,
2000
--------------
Assets:
Equity in commodity futures trading account:
Cash $ 24,049,978
Net unrealized depreciation
on open contracts (678,740)
--------------
23,371,238
Interest receivable 95,561
--------------
$ 23,466,799
==============
Liabilities and Partners' Capital:
Liabilities:
Accrued expenses:
Commissions $ 103,727
Management fees 35,721
Incentive Fees 22,168
Other 22,572
Due to SSB 672,046
Redemptions 61,038
--------------
917,272
--------------
Partners' Capital:
General Partner, 243.2823 Unit equivalents
outstanding in 2000 225,569
Limited Partners, 24,076.9114 Units of Limited
Partnership Interest outstanding in 2000 22,323,958
--------------
22,549,527
--------------
$ 23,466,799
==============
See Notes to Financial Statements.
3
<PAGE>
SALOMON SMITH BARNEY DIVERSIFIED 2000 FUTURES FUND L.P.
STATEMENT OF INCOME AND EXPENSES AND PARTNERS' CAPITAL
(UNAUDITED)
PERIOD FROM
JUNE 1, 2000
(COMMENCEMENT OF
THREE TRADING
MONTHS ENDED OPERATIONS) TO
SEPTEMBER 30, SEPTEMBER 30,
------------- -------------
2000 2000
------------- -------------
Income:
Net gains (losses) on trading of
commodity futures:
Realized gains on closed positions $ 500,616 $ 69,413
Change in unrealized losses on
open positions (903,319) (678,740)
------------ ------------
(402,703) (609,327)
Less, brokerage commissions
including clearing fees
of $8,521 and 12,387,
respectively (303,085) (381,841)
------------ ------------
Net realized and unrealized losses (705,788) (991,168)
Interest income 248,486 301,395
------------ ------------
(457,302) (689,773)
------------ ------------
Expenses:
Management fees 96,186 120,334
Other 30,425 63,281
Incentive fees 22,168 22,168
------------ ------------
148,779 205,783
------------ ------------
Net loss (606,081) (895,556)
Additions - Limited Partners 8,024,000 8,024,000
- General Partner 79,000 79,000
Redemptions - Limited Partners (116,917) (116,917)
------------ ------------
Net increase in Partners' capital 7,380,002 7,090,527
Proceeds from offering -Limited Partners 16,046,000
-General Partner 163,000
Offering and organization costs (750,000)
Partners' capital, beginning of period 15,169,525 -
------------ ------------
Partners' capital, end of period $ 22,549,527 $ 22,549,527
============ ============
Net asset value per Unit
(24,320.1937 Units outstanding
at September 30, 2000 $ 927.19 $ 927.19
============ ============
Net loss per Unit of Limited
Partnership Interest and General
Partner Unit equivalent $ (8.68) $ (30.54)
============ ============
Redemption Net Asset Value per Unit $ 953.72 $ 953.72
============ ============
See notes to Financial Statements
4
<PAGE>
Salomon Smith Barney Diversified 2000 Futures Fund L.P.
Notes to Financial Statements
September 30, 2000
(Unaudited)
1. General:
Salomon Smith Barney Diversified 2000 Futures Fund L.P. (the
"Partnership") is a limited partnership organized under the laws of the State of
New York, on August 25, 1999 to engage in the speculative trading of a
diversified portfolio of commodity interests including futures contracts,
options and forward contracts. The commodity interests that are traded by the
Partnership are volatile and involve a high degree of market risk. The
Partnership commenced trading operations on June 1, 2000.
Between January 31, 2000 (commencement of the offering period) and May
31, 2000, 16,047 Units of limited partnership interest and 162 Unit equivalents
representing the general partner's contribution were sold at $1,000 per unit.
The proceeds of the offering were held in an escrow account until May 31, 2000,
at which time they were turned over to the Partnership for trading.
Smith Barney Futures Management LLC acts as the general partner (the
"General Partner") of the Partnership. The Partnership's commodity broker is
Salomon Smith Barney Inc. ("SSB"). SSB is an affiliate of the General
Partner. The General Partner is wholly owned by Salomon Smith Barney Holdings
Inc. ("SSBHI"), which is the sole owner of SSB. SSBHI is a wholly owned
subsidiary of Citigroup Inc. All trading decisions are made for the
Partnership by Campbell & Company, Inc., ("Campbell"), Beacon Management Corp.
("Beacon"), Bridgewater Associates, Inc. ("Bridgewater") and Rabar Market
Research, Inc. ("Rabar") (collectively, the "Advisors").
The accompanying financial statements are unaudited but, in the opinion of
management, include all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of the Partnership's financial
condition at September 30, 2000 and the results of its operations for the period
from June 1, 2000 (commencement of trading operations) to September 30, 2000 and
for the three months ended September 30, 2000. These financial statements
present the results of interim periods and do not include all disclosures
normally provided in annual financial statements.
5
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Salomon Smith Barney Diversified 2000 Futures Fund L.P.
Notes to Financial Statements
September 30, 2000
(Unaudited)
(Continued)
Due to the nature of commodity trading, the results of operations for the
interim periods presented should not be considered indicative of the results
that may be expected for the entire year.
2. Net Asset Value Per Unit:
Changes in net asset value per Unit for the three months ended September
30, 2000 and for the period from August 25, 1999, (date Partnership was
organized) to September 30, 2000 were as follows:
PERIOD FROM
AUGUST 25, 1999
(DATE PARTNERSHIP
THREE MONTHS ENDED WAS ORGANIZED)
SEPTEMBER 30, TO SEPTEMBER 30,
2000 2000
------------------- ---------------
Net realized and
unrealized losses $ (26.92) $ (44.53)
Interest income 11.79 15.05
Expenses (7.94) (11.45)
Other 14.39 10.39
--------- ---------
Decrease for period (8.68) (30.54)
Net Asset Value per Unit,
beginning of period 935.87 1,000.00
Offering & Organization
cost Adjustment -0- (42.27)
--------- ---------
Net Asset Value per Unit,
end of period $927.19 $ 927.19
======== =========
Redemption Net Asset
Value Per Unit * $953.72 $ 953.72
======== =========
* For the purpose of a redemption, any remaining deferred liability for
reimbursement of offering and organization expenses will not reduce redemption
net asset value per unit. (see note 3)
6
<PAGE>
Salomon Smith Barney Diversified 2000 Futures Fund L.P.
Notes to Financial Statements
September 30, 2000
(Unaudited)
(Continued)
3. Offering and Organization Costs:
Offering and organization expenses of approximately $750,000 relating to
the issuance and marketing of the Partnership's Units offered were initially
paid by SSB. These costs have been recorded as due to SSB in the statement of
financial condition. These costs are being reimbursed to SSB by the Partnership
in 24 equal monthly installments (together with interest at the prime rate
quoted by the Chase Manhattan Bank).
As of September 30, 2000, $77,954 of these costs have been reimbursed to
SSB by the Partnership.
In addition, the Partnership has recorded interest expense of $22,522,
through September 30, 2000 which is included in other expenses.
The remaining deferred liability for these costs due to SSB of $672,046
(exclusive of interest charges) will not reduce Net Asset Value per Unit for any
purpose (other than financial reporting), including calculation of advisory and
brokerage fees and the redemption value of Units.
4. Trading Activities:
The Partnership was formed for the purpose of trading contracts in a
variety of commodity interests, including derivative financial instruments and
derivative commodity instruments. The results of the Partnership's trading
activity are shown in the statement of income and expenses and partners'
capital.
The Customer Agreement between the Partnership and SSB gives the
Partnership the legal right to net unrealized gains and losses.
7
<PAGE>
Salomon Smith Barney Diversified 2000 Futures Fund L.P.
Notes to Financial Statements
September 30, 2000
(Unaudited)
(Continued)
All of the commodity interests owned by the Partnership are held for
trading purposes. The average fair value during the period ended September 30,
2000 based on the monthly calculation, was $69,836. The fair value of these
commodity interests, including options thereon, if applicable, at September 30,
2000, was $678,740 as detailed below.
Fair Value
September 30,
2000
Currency:
- Exchange Traded Contracts $(192,157)
- OTC Contracts Energy 3,586
Energy (281,518)
Grains (33,591)
Interest Rates U.S. 140,860
Interest Rates Non-U.S. (117,051)
Livestock (96,750)
Metals 30,084
Softs (37,643)
Indices (94,560)
----------
Total $(678,740)
==========
8
<PAGE>
Salomon Smith Barney Diversified 2000 Futures Fund L.P.
Notes to Financial Statements
September 30, 2000
(Unaudited)
(Continued)
5. Financial Instrument Risk
The Partnership is party to financial instruments with off-balance sheet
risk, including derivative financial instruments and derivative commodity
instruments, in the normal course of its business. These financial instruments
may include forwards, futures and options, whose value is based upon an
underlying asset, index, or reference rate, and generally represent future
commitments to exchange currencies or cash flows, to purchase or sell other
financial instruments at specific terms at specified future dates, or, in the
case of derivative commodity instruments, to have a reasonable possibility to be
settled in cash, through physical delivery or with another financial instrument.
These instruments may be traded on an exchange or over-the-counter ("OTC").
Exchange traded instruments are standardized and include futures and certain
option contracts. OTC contracts are negotiated between contracting parties and
include forwards and certain options. Each of these instruments is subject to
various risks similar to those related to the underlying financial instruments
including market and credit risk. In general, the risks associated with OTC
contracts are greater than those associated with exchange traded instruments
because of the greater risk of default by the counterparty to an OTC contract.
Market risk is the potential for changes in the value of the financial
instruments traded by the Partnership due to market changes, including interest
and foreign exchange rate movements and fluctuations in commodity or security
prices. Market risk is directly impacted by the volatility and liquidity in the
markets in which the related underlying assets are traded.
Credit risk is the possibility that a loss may occur due to the failure of
a counterparty to perform according to the terms of a contract. Credit risk with
respect to exchange traded instruments is reduced to the extent that an exchange
or clearing organization acts as a counterparty to the transactions. The
Partnership's risk of loss in the event of counterparty default is typically
limited to the amounts recognized in the statement of financial condition and
not represented by the contract or notional amounts of the instruments. The
Partnership has concentration risk because the sole counterparty or broker with
respect to the Partnership's assets is SSB.
The General Partner monitors and controls the Partnership's risk exposure
on a daily basis through financial, credit and risk management monitoring
systems and accordingly believes that it has
9
<PAGE>
Salomon Smith Barney Diversified 2000 Futures Fund L.P.
Notes to Financial Statements
September 30, 2000
(Unaudited)
(Continued)
effective procedures for evaluating and limiting the credit and market risks to
which the Partnership is subject. These monitoring systems allow the General
Partner to statistically analyze actual trading results with risk adjusted
performance indicators and correlation statistics. In addition, on-line
monitoring systems provide account analysis of futures, forwards and options
positions by sector, margin requirements, gain and loss transactions and
collateral positions.
The notional or contractual amounts of these instruments, while not
recorded in the financial statements, reflect the extent of the Partnership's
involvement in these instruments. The majority of these instruments mature
within one year of September 30, 2000. However, due to the nature of the
Partnership's business, these instruments may not be held to maturity.
10
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Liquidity and Capital Resources
The Partnership does not engage in the sale of goods or services. Its
only assets are its equity in its commodity futures trading account, consisting
of cash, net unrealized appreciation (depreciation) on open futures and forward
contracts, commodity options, if applicable, and interest receivable. Because of
the low margin deposits normally required in commodity futures trading,
relatively small price movements may result in substantial losses to the
Partnership. While substantial losses could lead to a decrease in liquidity, no
such losses occurred in the third quarter of 2000.
The Partnership's capital consists of the capital contributions of the
partners as increased or decreased by gains or losses on commodity futures
trading, expenses, interest income, additions and redemptions of Units and
distributions of profits, if any.
For the period ended September 30, 2000, Partnership capital increased
39.1% from $16,209,000 (proceeds from offering) to $22,549,527. This increase
was primarily attributable to the additional sales of 8,231.1937 Units totaling
$8,103,000, which was partially offset by the net loss from operations of
$895,556 coupled with the redemption of 120 Units resulting in an outflow of
$116,917 for the period ended September 30, 2000. Future redemptions can impact
the amount of funds available for investment in commodity contract positions in
subsequent months.
Results of Operations
During the Partnership's third quarter 2000, net asset value per unit
decreased 0.9% from $935.87 to $927.19. The Partnership experienced a net
trading loss before brokerage commissions and related fees in the third quarter
of 2000 of $402,703. Losses were primarily attributable to the trading of
commodity contracts in currencies, energy, non-U.S. interest rates, livestock
and indices and were partially offset by gains in grains, softs, metals and U.S.
interest rates. The Partnership commenced trading operations on June 1, 2000,
and as a result, comparative information is not available.
Commodity futures markets are highly volatile. Broad price fluctuations
and rapid inflation increase the risks involved in commodity trading, but also
increase the possibility of profit. The profitability of the Partnership depends
on the existence of major price trends and the ability of the Advisors to
identify correctly those price trends. Price trends are influenced by, among
11
<PAGE>
other things, changing supply and demand relationships, weather, governmental,
agricultural, commercial and trade programs and policies, national and
international political and economic events and changes in interest rates. To
the extent that market trends exist and the Advisors are able to identify them,
the Partnership expects to increase capital through operations.
Interest income on 80% of the Partnership's daily equity maintained in
cash was earned on the monthly average 30-day U.S. Treasury bill rate determined
weekly by SSB based on the non competitive yield on the three month U.S.
Treasury bill maturing in 30 days.
Brokerage commissions are calculated on the adjusted net asset value on
the last day of each month and, therefore, vary according to trading
performance, additions and redemptions.
Management fees are calculated as a percentage of the Partnership's net
asset value as of the end of each month and are affected by trading performance,
additions and redemptions.
Incentive fees are based on the new trading profits generated by each
advisor as defined in the advisory agreements between the Partnership, the
General Partner and each Advisor.
12
<PAGE>
Item 3. Quantitative and Qualitative Disclosures of Market Risk
Introduction
The Partnership is a speculative commodity pool. The market sensitive
instruments held by it are acquired for speculative trading purposes, and all or
substantially all of the Partnership's assets are subject to the risk of trading
loss. Unlike an operating company, the risk of market sensitive instruments is
integral, not incidental, to the Partnership's main line of business.
Market movements result in frequent changes in the fair market value of
the Partnership's open positions and, consequently, in its earnings and cash
flow. The Partnership'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 market value of financial instruments and contracts, the
diversification effects of the Partnership's open positions and the liquidity of
the markets in which it trades.
The Partnership rapidly acquires and liquidates both long and short
positions in a wide range of different markets. Consequently, it is not possible
to predict how a particular future market scenario will affect performance, and
the Partnership's past performance is not necessarily indicative of its future
results.
Value at Risk is a measure of the maximum amount which the Partnership
could reasonably be expected to lose in a given market sector. However, the
inherent uncertainty of the Partnership's speculative trading and the recurrence
in the markets traded by the Partnership of market movements far exceeding
expectations could result in actual trading or non-trading losses far beyond the
indicated Value at Risk or the Partnership's experience to date (i.e., "risk of
ruin"). In light of the foregoing as well as the risks and uncertainties
intrinsic to all future projections, the inclusion of the quantification
included in this section should not be considered to constitute any assurance or
representation that the Partnership's losses in any market sector will be
limited to Value at Risk or by the Partnership's attempts to manage its market
risk.
Exchange maintenance margin requirements have been used by the Partnership
as the measure of its Value at Risk. Maintenance margin requirements are set by
exchanges to equal or exceed the maximum losses reasonably expected to be
incurred in the fair value of any given contract in 95%-99% of any one-day
intervals. Maintenance margin has been used rather than the more generally
available initial margin, because initial margin includes a credit risk
component, which is not relevant to Value at Risk.
13
<PAGE>
The following table indicates the trading Value at Risk associated with
the Partnership's open positions by market category as of September 30, 2000.
All open position trading risk exposures of the Partnership have been included
in calculating the figures set forth below. As of September 30, 2000, the
Partnership's total capitalization was approximately $22,549,527.
September 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Year to Date
% of Total High Low
Market Sector Value at Risk Capitalization Value at Risk Value at Risk
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Currencies:
- Exchange Traded Contracts $ 623,443 2.76% $629,134 $283,123
- OTC Contracts 84,304 0.37% 84,304 13,750
Energy 377,000 1.67% 415,200 103,100
Grains 164,825 0.73% 164,825 27,850
Interest Rates U.S. 264,000 1.17% 327,000 67,843
Interest Rates Non-U.S. 451,804 2.00% 606,385 223,434
Livestock 69,550 0.32% 115,128 9,610
Metals 413,525 1.83% 427,525 100,200
Softs 206,100 0.92% 244,500 50,750
Indices 643,875 2.86% 815,997 228,399
----------- ------
Total $3,298,426 14.63%
=========== ======
</TABLE>
14
<PAGE>
PART II OTHER INFORMATION
Item 1. Legal Proceedings -
There have been no material administrative, civil or criminal actions
within the past five years against Salomon Smith Barney or any of its
individual principals and no such actions are currently pending,
except as follows.
In September 1992, Harris Trust and Savings Bank (as trustee for
Ameritech Pension Trust), Ameritech Corporation, and an officer of
Ameritech sued Salomon Brothers Inc and Salomon Brothers Realty
Corporation in the U.S. District Court for the Northern District of
Illinois (Harris Trust Savings Bank, not individually but solely as
trustee for the Ameritech Pension Trust, Ameritech Corporation and
John A. Edwardson v. Salomon Brothers Inc and Salomon Brothers Realty
Corp.). The complaint alleged that purchases by Ameritech Pension
Trust from the Salomon entities of approximately $20.9 million in
participations in a portfolio of motels owned by Motels of America,
Inc. and Best Inns, Inc. violated the Employee Retirement Income
Security Act ("ERISA"), the Racketeer Influenced and Corrupt
Organization Act ("RICO") and state law. Salomon Brothers Inc had
acquired the participations issued by Motels of America and Best Inns
to finance purchases of motel portfolios and sold 95% of three such
issues and 100% of one such issue to Ameritech Pension Trust.
Ameritech Pension Trust's complaint sought (1) approximately $20.9
million on the ERISA claim, and (2) in excess of $70 million on the
RICO and state law claims as well as other relief. In various
decisions between August 1993 and July 1999, the courts hearing the
case have dismissed all of the allegations in the complaint against
the Salomon entities. In October 1999, Ameritech appealed to the U.S.
Supreme Court seeking review of the decision of the U.S. Court of
Appeals for the Seventh Circuit that dismissed the sole remaining
ERISA claim against the Salomon entities. In June 2000 the Supreme
Court reversed the Seventh Circuit and remanded the case for further
proceedings.
Both the Department of Labor and the Internal Revenue Service have
advised Salomon Brothers Inc that they were or are reviewing the
transactions in which Ameritech Pension Trust acquired such
participations. With respect to the Internal Revenue Service review,
Salomon Smith Barney Holdings, Salomon Brothers Inc and Salomon
Brothers Realty have consented to extensions of time for the
assessment of excise taxes that may be claimed to be due with respect
to the transactions for the years 1987, 1988 and 1989.
15
<PAGE>
In December 1996, a complaint seeking unspecified monetary damages was
filed by Orange County, California against numerous brokerage firms,
including Salomon Smith Barney, in the U.S. Bankruptcy Court for the
Central District of California. (County of Orange et al. v. Bear
Stearns & Co. Inc. et al.) The complaint alleged, among other things,
that the brokerage firms recommended and sold unsuitable securities to
Orange County. Salomon Smith Barney and the remaining brokerage firms
settled with Orange County in mid 1999.
In June 1998, complaints were filed in the U.S. District Court for the
Eastern District of Louisiana in two actions (Board of Liquidations,
City Debt of the City of New Orleans v. Smith Barney Inc. et ano. and
The City of New Orleans v. Smith Barney Inc. et ano.), in which the
City of New Orleans seeks a determination that Smith Barney Inc. and
another underwriter will be responsible for any damages that the City
may incur in the event the IRS denies tax exempt status to the City's
General Obligation Refunding Bonds Series 1991. The complaints were
subsequently amended. Salomon Smith Barney has asked the court to
dismiss the amended complaints. In May 1999, the Court denied Salomon
Smith Barney's motion to dismiss, but stayed the litigation because
the matter was not ripe. In March 2000, the City filed a notice of
discontinuance dismissing the complaints.
In November 1998, a class action complaint was filed in the United
States District Court for the Middle District of Florida (Dwight Brock
as Clerk for Collier County v. Merrill Lynch, et al.). The complaint
alleged that, pursuant to a nationwide conspiracy, 17 broker-dealer
defendants, including Salomon Smith Barney, charged excessive mark-ups
in connection with advanced refunding transactions. Among other
relief, plaintiffs sought compensatory and punitive damages,
restitution and/or rescission of the transactions and disgorgement of
alleged excessive profits. In October 1999, the plaintiff filed a
second amended complaint. Salomon Smith Barney has asked the court to
dismiss the amended complaint.
In connection with the Louisiana and Florida matters, the IRS and SEC
have been conducting an industry-wide investigation into the pricing
of Treasury securities in advanced refunding transactions. In April
2000, seventeen investment banks, including Salomon Smith Barney
entered into an agreement with the federal government to settle
charges related to the pricing of Treasury securities in advanced
refunding transactions.
16
<PAGE>
In December 1998, Salomon Smith Barney was one of twenty-eight market
making firms that reached a settlement with the SEC in the matter
titled In the Matter of Certain Market Making Activities on NASDAQ. A
part of the settlement of that matter, Salomon Smith Barney, without
admitting or denying the factual allegations, agreed to an order that
required that it: (i) cease and desist from committing or causing any
violations of Sections 15(c)(1) and (2) of the Securities Exchange Act
of 1934 and Rules 15c1-2, 15c2-7 and 17a-3 thereunder, (ii) pay
penalties totaling approximately $760,000, and (iii) submit certain
policies and procedures to an independent consultant for review.
In March 1999, a complaint seeking in excess of $250 million was filed
by a hedge fund and its investment advisor against Salomon Smith
Barney in the Supreme Court of the State of New York, County of New
York (MKP Master Fund, LDC et al. v. Salomon Smith Barney Inc.). The
complaint included allegations that, while acting as prime broker for
the hedge fund, Salomon Smith Barney breached its contracts with
plaintiffs, misused their monies, and engaged in tortious (wrongful)
conduct, including breaching its fiduciary duties. Salomon Smith
Barney asked the court to dismiss the complaint in full. In October
1999, the court dismissed the tort claims, including the breach of
fiduciary duty claims. The court allowed the breach of contract and
misuse of money claims to stand. In March 2000, the plaintiff's
request to dismiss Salomon Smith Barney's amended counterclaims was
argued and a decision is pending. Salomon Smith Barney will continue
to contest this lawsuit vigorously.
In the course of its business, Salomon Smith Barney, as a major
futures commission merchant and broker-dealer is a party to various
claims and routine regulatory investigations and proceedings that the
general partner believes do not have a material effect on the business
of Salomon Smith Barney.
Item 2. Changes in Securities and Use of Proceeds -
The Partnership continues to offer units at the net asset value per
Unit as of the end of each quarter. For the period ended September 30,
2000, there were additional sales of 8,150.9114 Units totaling
$8,024,000 and contributions by the General partner representing
80.2823 Units equivalents totaling $79,000.
17
<PAGE>
Proceeds from the sale of additions Units are used in the trading of
commodity interests including futures contracts, options and forwards
contracts.
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders - None
Item 5. Other Information - None
Item 6. (a) Exhibits - None
(b) Reports on Form 8-K - None
18
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
SALOMON SMITH BARNEY DIVERSIFIED 2000 FUTURES FUND L.P.
By: Smith Barney Futures Management LLC
(General Partner)
By: /s/ David J. Vogel, President
David J. Vogel, President
Date: 11/14/00
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By: Smith Barney Futures Management LLC
(General Partner)
By: /s/ David J. Vogel, President
David J. Vogel, President
Date: 11/14/00
By: /s/ Daniel A. Dantuono
Daniel A. Dantuono
Chief Financial Officer and
Director
Date: 11/14/00
19
