<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________
Commission File Number 0-16746
ML FUTURES INVESTMENTS II L.P.
------------------------------
(Exact Name of Registrant as
specified in its charter)
Delaware 13-3481305
- ------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
c/o Merrill Lynch Investment Partners Inc.
(formerly ML Futures Investment Partners Inc.)
Merrill Lynch World Headquarters - South Tower, 6th Fl.
World Financial Center New York, New York 10080-6106
-----------------------------------------------------
(Address of principal excecutive offices)
(Zip Code)
212-236-4161
--------------------------------
(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_____
-----
This document contains 14 pages.
There are no exhibits and no exhibit index filed with this document.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ML FUTURES INVESTMENTS II L.P.
------------------------------
(a Delaware limited partnership)
------------------------------
STATEMENTS OF FINANCIAL CONDITION
---------------------------------
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
-------------- --------------
<S> <C> <C>
ASSETS
- ------
Accrued interest receivable $ 76,564 $ 70,399
Equity in commodity futures trading
accounts:
Cash and options contracts 14,978,749 14,932,872
Net unrealized profit on open 915,152 2,149,465
contracts
------------- -------------
TOTAL $15,970,465 $17,152,736
============= =============
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
LIABILITIES:
Redemptions payable $ 203,591 $ 150,634
New profit share payable 55,748 90,438
Brokerage commissions payable (Note 133,084 142,935
2)
------------- -------------
Total liabilities 392,423 384,007
------------- -------------
PARTNERS' CAPITAL: (Note 1)
General Partner (1,629 and 1,629 247,291 231,044
units)
Limited Partners (100,981 and 15,330,751 16,537,685
116,590 units)
------------- -------------
Total partners' capital 15,578,042 16,768,729
------------- -------------
TOTAL $15,970,465 $17,152,736
============= =============
NET ASSET VALUE PER UNIT $151.82 $141.84
=========== ===========
</TABLE>
See notes to financial statements.
2
<PAGE>
ML FUTURES INVESTMENTS II L.P.
------------------------------
(a Delaware limited partnership)
------------------------------
STATEMENTS OF OPERATIONS
------------------------
<TABLE>
<CAPTION>
For the three For the three For the nine For the nine
months ended months ended months ended months ended
September 30, September 30, September 30, September 30,
1995 1994 1995 1994
------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
REVENUES:
Trading profit (loss):
Realized $707,905 $ 535,821 $ 3,128,007 $1,527,200
Change in unrealized (2,147) (697,221) (1,234,313) (994,674)
---------- ----------- ------------- ------------
Total trading results 705,758 (161,400) 1,893,694 532,526
---------- ----------- ------------- ------------
Interest income (Note 2) 196,379 162,700 626,529 408,432
---------- ----------- ------------- ------------
Total revenues 902,137 1,300 2,520,223 940,958
---------- ----------- ------------- ------------
EXPENSES:
Allocation of new trading profit
share to trading advisors 55,749 15,068 213,566 289,894
Brokerage commissions (Note 2) 396,087 434,833 1,221,407 1,334,934
---------- ----------- ------------- ------------
Total expenses 451,836 449,901 1,434,973 1,624,828
---------- ----------- ------------- ------------
NET INCOME (LOSS) $450,301 $(448,601) $ 1,085,250 $ (683,870)
========== =========== ============= ============
NET INCOME (LOSS) PER UNIT:
Weighted average number of units
outstanding (Note 3) 105,090 125,073 110,332 130,280
======== ========= =========== ==========
Weighted average net income (loss)
per unit $4.28 $(3.59) $9.84 $(5.25)
======== ========= =========== ==========
</TABLE>
See notes to financial statements.
3
<PAGE>
ML FUTURES INVESTMENTS II L.P.
------------------------------
(a Delaware limited partnership)
------------------------------
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
------------------------------------------
For the nine months ended September 30, 1995 and 1994
-----------------------------------------------------
<TABLE>
<CAPTION>
Limited General
Units Partners Partner Total
-------- ------------ --------- ------------
<S> <C> <C> <C> <C>
PARTNERS' CAPITAL,
DECEMBER 31, 1993 136,879 $19,449,662 $234,238 $19,683,900
Net loss - (676,423) (7,447) (683,870)
Redemptions (15,639) (2,119,379) - (2,119,379)
--------- ----------- -------- -----------
PARTNERS' CAPITAL,
SEPTEMBER 30, 1994 121,240 $16,653,860 $226,791 $16,880,651
========= =========== ======== ===========
PARTNERS' CAPITAL,
DECEMBER 31, 1994 118,219 $16,537,685 $231,044 $16,768,729
Net income - 1,069,003 16,247 1,085,250
Redemptions (15,609) (2,275,937) - (2,275,937)
--------- ----------- -------- -----------
PARTNERS' CAPITAL,
SEPTEMBER 30, 1995 102,610 $15,330,751 $247,291 $15,578,042
========= =========== ======== ===========
</TABLE>
See notes to financial statements.
4
<PAGE>
ML FUTURES INVESTMENTS II L.P.
------------------------------
(a Delaware limited partnership)
------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
For the nine months ended September 30, 1995 and 1994
-----------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ML Futures Investments II L.P. (the "Partnership"or the "Fund") was
organized under the Delaware Revised Uniform Limited Partnership Act on
January 20, 1987 and completed its initial public offering of units of limited
partnership interest ("Initial Units") on April 28, 1988. The Partnership
commenced operations on May 2, 1988. The Partnership subsequently made a
second offering of units of limited partnership interest ("Additional Units")
which were later converted into Initial Units. Merrill Lynch Investment
Partners Inc. (formerly ML Futures Investment Partners Inc., the "General
Partner") (a wholly-owned subsidiary of Merrill Lynch Group, Inc., which in
turn is a wholly-owned subsidiary of Merrill Lynch & Co., Inc.) invests in the
Partnership 1% of the total contributions to the Partnership. The General
Partner and each Limited Partner share in the profits and losses of the
Partnership in proportion to the amount of Partnership interest owned by each.
The financial information included herein has been prepared by management
without audit by independent certified public accounts who do not express an
opinion thereon. The statement of financial condition as of December 31, 1994
has been derived from but does not include all the disclosures contained in
the audited financial statements for the year ended December 31, 1994. The
information furnished includes all adjustments which are, in the opinion of
management, necessary for a fair statement of results for the interim period.
The results of operations as presented, however, should not be considered
indicative of the results to be expected for the entire year.
Revenue Recognition
-------------------
Commodity futures, options and forward contract transactions are recorded
on the trade date and open contracts are reflected in the financial statements
at the market value on the last business day of the reporting period. The
difference between the original contract amount and market value is reflected
in income as an unrealized gain or loss. Market value or fair value is based
on quoted market prices. All commodity futures, options and forward contracts
are reflected at fair value in the financial statements. The Partnership does
not report open positions on a net basis.
Operating Expenses, Organization Costs and Selling Commissions
--------------------------------------------------------------
The General Partner paid all organizational and offering costs, and
provides for all routine operating expenses of the Partnership. No selling
commissions were paid by Limited Partners.
Income Taxes
------------
No provision for income taxes has been made in the accompanying financial
statements as each partner is individually responsible for reporting income or
loss based on his respective share of the Partnership's income and expenses as
reported for income tax purposes.
5
<PAGE>
Redemptions
-----------
A Limited Partner may require the Partnership to redeem all or a portion of
his units at the net asset value as of the last business day of any month upon
ten days' written notice to the General Partner.
Dissolution of the Partnership
------------------------------
The Partnership will terminate on December 31, 2007 or at an earlier date
if certain conditions occur, including, among other things, a decline in net
assets to less than $250,000, a decline in the net asset value per unit at any
month-end to less than $25, or under certain other circumstances as defined in
the Limited Partnership Agreement.
2. RELATED PARTY TRANSACTIONS
Substantially all of Partnership's assets are held by Merrill Lynch Futures
Inc. ("MLF") (the commodity broker of the Partnership) as margin deposits in
respect of the Partnership's trading. The Partnership pays MLF brokerage
commissions at a flat rate equal to 0.83% of the Partnership's month-end net
assets. The General Partner estimates that the round-turn equivalent
commission rate charged to the Partnership during the quarters ended September
30, 1995 and 1994 was approximately $24.
MLF pays the Partnership interest on its average daily "available assets"
at the approximate prevailing 91-day Treasury bill rate. Available assets are
all of the Partnership's assets excluding the unrealized profit and loss on
open forward or option positions or assets being held by other commodity
brokers.
The Partnership trades forward contracts through a Foreign Exchange Desk
(the "F/X Desk"). Through the F/X Desk, the Partnership has access to Merrill
Lynch International Bank ("MLIB") and a number of other counterparties. The
F/X Desk contacts at least two counterparties in addition to MLIB for a price
quote on each trade. All counterparties other than MLIB are unaffiliated with
any Merrill Lynch entity. The F/X Desk charges a service fee (at current
exchange rates) of approximately $5.00 to $9.00 per futures-contract
equivalent face amount trade on each purchase or sale of a currency in the
forward markets. No service fee is charged on trades executed through MLIB
(which receives a "bid-ask" spread on such trades). Trades are executed with
MLIB provided that its price (which includes no service charge) is as good or
better than the best price (including the service charge) quoted by any of the
other counterparties contacted. The General Partner estimates the total
amount of these fees at under 0.15 of 1% of the Partnership's month-end net
assets.
The F/X Desk trades on the basis of credit lines provided by a Merrill
Lynch entity. The Partnership is not required to margin or otherwise
guarantee its F/X Desk trading.
The General Partner expects that, in the near future, certain of the
Partnership's currency trades will begin to be executed in the form of
"exchange of futures for physical" ("EFP") transactions involving MLIB and
MLF. In these transactions, a spot or forward (collectively referred to as
"cash") currency position is acquired and exchanged for an equivalent futures
position on the Chicago Mercantile Exchange's International Monetary Market
("IMM"). EFP transactions permit
6
<PAGE>
currency trades to be executed at a single price, as well as out of exchange
hours, and converted into IMM contracts. They also give trading advisors
flexibility as to whether to liquidate positions in the cash (i.e., spot or
forward) or in the futures markets.
In its EFP trading with Merrill Lynch, the Partnership will acquire cash
currency positions through the F/X Desk in the same manner and on the same
terms as in the case of the Partnership's other F/X Desk trading. When the
Partnership exchanges these positions for futures, there will be a
"differential" between the prices of these two positions. This "differential"
reflects, in part, the different settlement dates of the cash and the futures
contracts as well as prevailing interest rates, but also includes a pricing
spread in favor of MLIB or another Merrill Lynch entity. These spreads are
expected to total no more than 0.15 of 1% of the Partnership's average month-
end Net Assets on an annual basis.
The Partnership, to the extent that it has executed currency EFP
transactions in the past, has both acquired its cash positions and effected
the exchange of positions for futures contracts through brokers other than MLF
(to which the futures positions were ultimately given up to be cleared).
3. WEIGHTED AVERAGE UNITS
Weighted average number of units outstanding was computed for purposes of
disclosing net income per weighted average unit. The weighted average units
are equal to the number of units outstanding at the period end, adjusted
proportionately for units redeemed based on their respective time outstanding
during such period.
4. OFF-BALANCE SHEET RISK
The Partnership trades futures, options and forward contracts in
currencies, interest rate and stock indices, metals, commodities and energy.
Risk arises from changes in the value of these contracts (market risk) and the
potential inability of counterparties or brokers to perform under the terms of
the contracts (credit risk). Although numerous factors could have significant
influences on the market risk of these contracts, they are very interest rate
sensitive. All open contracts mature within one year from the balance sheet
date.
<TABLE>
<CAPTION>
September 30, 1995 December 31, 1994
---------------------------------------- ----------------------------------------
Commitment to Commitment to Commitment to Commitment to
Purchase (Futures, Sell (Futures, Purchase (Futures, Sell (Futures,
Options & Forwards) Options & Forwards) Options & Forwards) Options & Forwards)
------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
Interest rate and
stock indices $66,335,119 $ 9,980,174 $36,656,901 $52,422,164
Currencies 6,332,539 7,694,509 18,918,896 24,870,676
Metals 9,687,031 4,031,036 9,865,956 2,923,934
Commodities 7,099,452 1,278,862 7,799,867 808,654
Energy 2,564,601 580,672 5,984,265 1,763,110
----------- ----------- ----------- -----------
$92,018,742 $23,565,253 $79,225,885 $82,788,538
=========== =========== =========== ===========
</TABLE>
A substantial portion of the amounts indicated as off-balance sheet
risk in currencies is due to offsetting commitments to purchase and to sell
the same currency on the same date in the future.
7
<PAGE>
These commitments are economically offsetting but are not, as a technical
matter, offset in the forward market until the settlement date.
Outstanding contract amounts represent the Partnership's extent of
involvement in the particular class of financial instrument, but not the
credit risk associated with counterparty non-performance. The credit risk
associated with these instruments, from counterparty non-performance, is the
net unrealized gain, if any, included on the Statements of Financial
Condition. The Partnership also has credit risk because the sole counterparty
or broker with respect to most of the Partnership's assets is MLF. At
September 30, 1995 and December 31, 1994, $7,591,930 and $5,434,990 of these
assets, respectively, were held in segregated accounts in accordance with
Commodity Futures Trading Commission regulations.
The risks associated with exchange-traded contracts are typically perceived
to be less than those associated with over-the-counter transactions, because
exchanges typically (but not universally) provide clearinghouse arrangements
in which the collective credit (in some cases limited in amount, in some cases
not) of the members of the exchange is pledged to support the financial
integrity of the exchange. Where as in over-the-counter transactions, on the
other hand, traders must rely solely on the credit of their respective
individual counterparties. Margins, which may be subject to loss in the event
of a default, are generally required in exchange trading, and counterparties
may require margin in the over-the-counter markets.
The notional value of exchange traded and non-exchange traded contracts are
as follows:
September 30, 1995
----------------------------------------
Commitment to Commitment to
Purchase(Futures, Sell(Futures,
Options & Forwards) Options & Forwards)
------------------- -------------------
Exchange
traded $84,172,273 $17,161,783
Non-Exchange
traded 7,846,469 6,403,470
----------- -----------
$92,018,742 $23,565,253
=========== ===========
The gross and net unrealized gain on open contracts are as follows:
September 30, 1995
------------------
Exchange Non-Exchange
Traded Traded
----------- ------------
Gross
unrealized gain $ 616,008 $ 118,542
=========== ===========
Net
unrealized gain $ (264,713) $ 242,248
=========== ===========
8
<PAGE>
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of Operation
Operational Overview:
--------------------
Due to the nature of the Fund's business, its results of operations depend
on the Trading Advisors' ability to recognize and capitalize on trends or other
profit opportunities in futures and forward contracts and related options in
different sectors of the world commodity markets. However, the Trading
Advisors' methods are confidential and therefore the only information that can
be furnished regarding the Fund's results of operations is contained in the
performance record of its trading. Unlike many businesses, general economic or
seasonal conditions will not necessarily affect the profit potential of the
Fund, and its past performance is not necessarily indicative of future results.
Liquidity:
---------
Most of the Partnership's assets are held as cash which, in turn, is used
to margin its futures positions and is withdrawn, as necessary, to pay
redemptions and fees. The Partnership has entered into an arrangement with the
Commodity Broker regarding the maintenance of the Partnership's assets, which
will eliminate the interest loss resulting from being unable to invest 100% of
the Partnership's available assets in Treasury bills. Under the arrangement,
the Partnership's assets are ordinarily deposited in cash rather than invested
in Treasury bills and the Commodity Broker credits the Partnership with interest
as if 100% of its available assets were continuously invested in 91-day Treasury
bills. As a result, the Partnership is able to earn a yield on all of its
available assets. In the event that the Partnership's assets are deposited as
initial margin at an exchange clearinghouse, such assets will be invested in
Treasury bills, and any interest earned on such U.S. Treasury bills will be paid
to the Partnership.
On the other hand, the futures contracts in which the Partnership trades
may become illiquid under certain market conditions. Commodity exchanges limit
fluctuations in futures prices during a single day by regulations referred to as
"daily limits." During a single day no trades may be executed at prices beyond
the daily limit. Once the price of a futures contract for a particular
commodity has increased or decreased by an amount equal to the daily limit,
positions in the commodity can generally neither be taken nor liquidated unless
traders are willing to effect trades at or within the limit. Futures contracts
have occasionally moved to the daily limit for several consecutive days with
little or no trading. Such market conditions could prevent the Partnership from
promptly liquidating its futures (including its options) positions. There are
no limitations on the daily price moves in trading foreign currency forward
contracts through banks, although illiquidity may develop in the forward markets
due to large spreads between "bid" and "asked" prices quoted. (Forward
contracts are the bank version of currency futures contracts and are not traded
on exchanges.)
Risk Factors:
------------
The Fund experiences market risk because it's objective as a speculative
commodity pool is to profit from price changes in the futures, options and
forward contracts it trades. The General Partner monitors this market risk by
valuing and reporting each open position daily.
All of the fund's assets are maintained with MLF, the commodity broker of
the Fund and an affiliate of the General Partner. The General Partner monitors
daily the Fund's trading accounts to insure actual trading complies with the
terms of the prospectus. A substantial portion of the Fund's assets are
maintained with MLF in segregated accounts in accordance with Commodity Futures
Trading Commission regulations.
9
<PAGE>
Capital Resources:
-----------------
The Partnership does not have, nor does it expect to have, any capital
assets and has no material commitments for capital expenditures. The
Partnership's use of its assets is solely to supply the necessary margin or
premiums for, and to pay any losses incurred in connection with, its trading
activity and to pay redemptions. Inflation is not a significant factor in the
Fund's profitability, although inflationary cycles give rise to the type of
major price movements which can have a material impact on the Fund's
profitability.
1995:
----
Total assets of the Partnership and Partnership capital at September 30,
1995 were $15,970,465 and $15,578,042, respectively. During the third quarter
of 1995, a total of 3,332 Units were redeemed by Unitholders, for an aggregate
redemption value of $500,388.
1994:
----
Total assets of the Partnership and Partnership capital at September 30,
1994 were $17,141,735 and $16,880,651, respectively. The Partnership permits
Units to be redeemed on a monthly basis. During the third quarter of 1994, a
total of 6,886 Units were redeemed by Unitholders, for an aggregate redemption
value of $945,638.
Results of Operations - General:
-------------------------------
Unlike an operating business, it is difficult to identify "trends" in the
Fund's operations and virtually impossible to make any predictions regarding
future results based on results to date. In general, markets in which sustained
price trends occur with some frequency tend to be favorable to managed futures
investments, but this is not always the case. It is impossible to predict when
trending markets will occur and the advisor is affected differently by trends in
general and particular types of trends. Consequently, the results of operations
of the Fund are difficult to discuss other than in terms of how it has performed
in the past.
1995 Monthly Performance:
------------------------
At September 30, 1995, the Net Asset Value per Unit was $151.82, a 2.91%
increase from the Net Asset Value per Unit of $147.52 at June 30, 1995, and a
7.04% increase from the Net Asset Value per Unit of $141.84 at December 31,
1994.
During January 1995, the Fund's Net Asset Value decreased 3.3%, as trading
profits generated in the stock indices and energy sectors were offset by trading
losses in the interest rates, agriculture and currency sectors.
During February 1995, the Fund's Net Asset Value increased 0.2%, as
trading profits generated in the interest rates, agriculture, stock indices,
currency and energy sectors were offset by trading losses in the metals sector.
During March 1995, the Fund's Net Asset Value increased 5.7%, as trading
profits generated in the interest rates, currency, metals, energy and stock
indices sectors were offset by trading losses in the agriculture sector.
During April 1995, the Fund's Net Asset Value decreased 0.1%, as trading
profits generated in the interest rate and energy sectors were offset by trading
losses in the metals, currency and stock indices sectors.
10
<PAGE>
During May 1995, the Fund's Net Asset Value increased 6.5%, as trading
profits generated in the interest rates, agriculture and stock indices sectors
were offset by trading losses in the energy, currency, and metals sectors.
During June 1995, the Fund's Net Asset Value increased 4.5%, as trading
profits generated in the stock indices trading were offset by trading losses in
the interest rates, currency, metals, agriculture and energy sectors.
During July 1995, the Fund's Net Asset Value decreased 1.4%, as trading
profits generated in the currency trading sectors were offset by trading losses
in the metals, agriculture, energy, stock index and interest rate sectors.
During August 1995, the Fund's Net Asset Value increased 3.4%, as trading
profits generated in the currency, agriculture and energy sectors were offset by
trading losses in the metals and interest rate sectors.
During September 1995, the Fund's Net Asset Value increased 0.9%, as
trading profits generated in the currency, agriculture, interest rate and stock
index sectors were offset by trading losses in the energy and metal sectors.
The Partnership's operations were profitable during the third quarter of
1995 with gross trading gains of $705,758 and interest income of $196,379, less
operating expenses of $451,836 (comprised of brokerage commissions of $396,087
and profit shares of $55,749), resulting in net income of $450,301.
The Partnership's operations were profitable during the first nine months
of 1995 with gross trading gains of $1,893,694 and interest income of $626,529,
less operating expenses of $1,434,975 (comprised of brokerage commissions of
$1,221,409 and profit shares of $213,566), resulting in net income of
$1,085,248.
During the third quarter of 1995, the Fund experienced two profitable
months and one unprofitable month of trading operations, and during the first
nine months of 1995, the Fund experienced six profitable months and three
unprofitable months of trading operations.
The Net Asset Value of a Unit purchased on May 2, 1988 for $100 had
increased to $151.82 as of September 30, 1995.
1994 Monthly Performance:
------------------------
At September 30, 1994, the Net Asset Value per Unit was $139.23, a 2.38%
decrease from the Net Asset Value per Unit of $142.63 at June 30, 1994, and a
3.18% decrease from the Net Asset Value per Unit of $143.81 at December 31,
1993.
During January 1994, the Fund's Net Asset Value decreased 5%, as trading
profits generated in the stock indices and metals sectors were offset by trading
losses in the interest rates, currencies, energy and agricultural sectors.
During February 1994, the Fund's Net Asset Value decreased 3.7%, as
trading profits generated in the metals sector were offset by trading losses in
the interest rates, currencies, stock indices, energy and agricultural sectors.
11
<PAGE>
During March 1994, the Fund's Net Asset Value decreased 2.5%, as trading
losses were generated in the interest rate, currencies, energy, stock indices,
agricultural and metals sectors.
During April 1994, the Fund's Net Asset Value decreased 1%, as trading
profits generated in the interest rates sector were offset by trading losses in
the metals, currencies, agricultural, energy and stock indices sectors.
During May 1994, the Fund's Net Asset Value increased 7.8%, as trading
profits were generated in the agricultural, interest rates and metals sectors.
During June 1994, the Fund's Net Asset Value increased 4.2%, as trading
profits were generated in the interest rates, metals, currencies, agricultural,
energy and stock indices sectors.
During July 1994, the Fund's Net Asset Value decreased 1.9%, as trading
profits generated in the agriculture, energy and metals sectors were offset by
trading losses in the interest rates, currencies and stock indices sectors.
During August 1994, the Fund's Net Asset Value decreased 4.0%, as trading
profits generated in the metals and stock indices sectors were offset by trading
losses in the energy, agriculture, currencies and interest rates sectors.
During September 1994, the Fund's Net Asset Value increased 3.6%, as
trading profits generated in the currencies, interest rates, energy, metals and
agriculture sectors were offset by trading losses in the stock indices sectors.
The Partnership's operations were unprofitable during the third quarter
of 1994 with gross trading losses of $161,400 and interest income of $162,700,
less operating expenses of $449,901 (comprised of brokerage commissions of
$434,833 and profit shares of $15,068), resulting in a net loss of $448,601.
The Partnership's operations were unprofitable during the first nine
months of 1994 with gross trading gains of $532,526 and interest income of
$408,432, less operating expenses of $1,624,828 (comprised of brokerage
commissions of $1,334,934 and profit shares of $289,894), resulting in a net
loss of $683,870.
During the third quarter of 1994, the Fund experienced one profitable
month and two unprofitable months of trading operations, and during the first
nine months of 1994, the Fund experienced three profitable months and six
unprofitable months of trading operations.
The Net Asset Value of a Unit purchased on May 2, 1988 for $100 had
increased to $139.23 as of September 30, 1994.
12
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities.
None.
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. Exhibits and Reports on Form 8-K.
(a) Exhibits
--------
There are no exhibits required to be filed with this document.
(b) Reports on Form 8-K
-------------------
A report on Form 8-K was filed on July 28, 1995 which reflects a name
change of the General Partner from ML Futures Investment Partners Inc. to
Merrill Lynch Investment Partners Inc.
13
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
ML FUTURES INVESTMENTS II L.P.
By: MERRILL LYNCH INVESTMENT PARTNERS INC.
(formerly ML FUTURES INVESTMENT PARTNERS INC.)
(General Partner)
Date: November 13, 1995 By /s/JOHN R. FRAWLEY, JR.
-----------------------
John R. Frawley, Jr.
President, Chief Executive Officer
and Director
Date: November 13, 1995 By /s/JAMES M. BERNARD
-------------------
James M. Bernard
Chief Financial Officer,
Treasurer and Vice President
<TABLE> <S> <C>
<PAGE>
<ARTICLE> BD
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
STATEMENTS OF FINANCIAL CONDITION, CONSOLIDATED STATEMENTS OF OPERATIONS,
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1994 DEC-31-1993
<PERIOD-START> JAN-01-1995 JAN-01-1994
<PERIOD-END> SEP-30-1995 SEP-30-1994
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<RECEIVABLES> 15,970,465 17,141,735
<SECURITIES-RESALE> 0 0
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<INSTRUMENTS-OWNED> 0 0
<PP&E> 0 0
<TOTAL-ASSETS> 15,970,465 17,141,735
<SHORT-TERM> 0 0
<PAYABLES> 392,423 261,084
<REPOS-SOLD> 0 0
<SECURITIES-LOANED> 0 0
<INSTRUMENTS-SOLD> 0 0
<LONG-TERM> 0 0
<COMMON> 0 0
0 0
0 0
<OTHER-SE> 15,578,042 16,880,651
<TOTAL-LIABILITY-AND-EQUITY> 15,970,465 17,141,735
<TRADING-REVENUE> 1,893,694 532,526
<INTEREST-DIVIDENDS> 626,529 408,432
<COMMISSIONS> 1,434,975 1,624,828
<INVESTMENT-BANKING-REVENUES> 0 0
<FEE-REVENUE> 0 0
<INTEREST-EXPENSE> 0 0
<COMPENSATION> 0 0
<INCOME-PRETAX> 1,085,248 (683,870)
<INCOME-PRE-EXTRAORDINARY> 1,085,248 (683,870)
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 1,085,248 (683,870)
<EPS-PRIMARY> 9.84 (5.25)
<EPS-DILUTED> 9.84 (5.25)
</TABLE>
