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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 March 31, 1995
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Commission File Number 0-16526
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HUTTON INVESTORS FUTURES FUND L.P. II
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(Exact name of registrant as specified in its charter)
Delaware 13-3406160
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
c/o Smith Barney Futures Management Inc.
390 Greenwich St. - 1st. Fl.
New York, New York 10013
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(Address and Zip Code of principal executive offices)
(212) 723-5424
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(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
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HUTTON INVESTORS FUTURES FUND L.P. II
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
Page
Number
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<S> <C>
PART I - Financial Information:
Item 1. Financial Statements:
Statements of Financial Condition at
March 31, 1995 and December 31, 1994 3
Statements of Income and Expenses and
Partners' Capital for the Three Months
ended March 31, 1995 and 1994 4
Notes to Financial Statements 5 - 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations 7 - 8
PART II - Other Information 9
</TABLE>
2
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PART 1
Item 1. Financial Statements
HUTTON INVESTORS FUTURES FUND L.P. II
STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1995 1994
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(UNAUDITED)
<S> <C> <C>
ASSETS
Equity in commodity futures trading account:
Cash and cash equivalents $12,527,403 $10,904,167
Net unrealized appreciation
on open futures contracts 2,878,052 1,150,941
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$15,405,455 $12,055,108
=============== ===============
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accrued expenses:
Commissions on open futures contracts $68,101 $64,253
Incentive fees 347,390
Other 33,049 37,835
Redemptions payable 123,280 323,825
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571,820 425,913
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Partners' capital
General Partner, 75 Unit
equivalents outstanding 249,893 194,295
Limited Partners, 4,377 and 4,414 Units
of Limited Partnership Interest
outstanding in 1995 and 1994, respectively 14,583,742 11,434,900
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14,833,635 11,629,195
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$15,405,455 $12,055,108
=============== ===============
</TABLE>
See Notes to Financial Statements.
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HUTTON INVESTORS FUTURES FUND L.P. II
STATEMENTS OF INCOME AND EXPENSES AND PARTNERS' CAPITAL
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, MARCH 31,
1995 1994
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<S> <C> <C>
Income
Net gains (losses) on trading of
commodity futures: $1,962,158 $505,395
Realized gains on closed positions
Change in unrealized gains/losses
on open positions 1,727,111 152,346
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3,689,269 657,741
Less, brokerage commissions and clearing fees
($4,427 and $4,011, respectively) (137,774) (119,151)
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Net realized and unrealized gains 3,551,495 538,590
Interest income 134,955 72,331
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3,686,450 610,921
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Expenses:
Incentive fees 347,390 101,479
Other 11,340 12,600
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358,730 114,079
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Net income 3,327,720 496,842
Redemptions (123,280) (180,173)
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Net increase in Partners' capital 3,204,440 316,669
Partners' capital, beginning of period 11,629,195 13,798,739
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Partners' capital, end of period $14,833,635 $14,115,408
============== ==============
New asset value per Unit
(4,452 and 5,014 Units outstanding at
March 31, 1995 and 1994, respectively) $3,331.90 $2,815.20
============== ==============
</TABLE>
See Notes to Financial Statements.
4
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HUTTON INVESTORS FUTURES FUND L.P. II
NOTES TO FINANCIAL STATEMENTS
March 31, 1995
(Unaudited)
General
Hutton Investors Futures Fund L.P. II (the "Partnership") is a limited
partnership, organized on March 31, 1987 under the partnership laws of the
State of Delaware, to engage in the speculative trading of commodity futures
contracts and other commodity interests, including futures and option contracts
on U.S. Treasury Bills and other financial instruments, foreign currencies and
stock indices. The Partnership commenced operations on July 24, 1987.
Smith Barney Futures Management Inc. acts as the general partner (the
"General Partner") of the Partnership. Smith Barney Inc. ("SB"), an affiliate
of the General Partner, acts as commodity broker for the Partnership. All
trading decisions for the Partnership are made by John W. Henry & Co., Inc. and
TrendLogic Associates, Inc. (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 March 31, 1995 and the results of its operations for the
three months ended March 31, 1995 and 1994. These financial statements present
the results of interim periods and do not include all disclosures normally
provided in annual financial statements. It is suggested that these financial
statements be read in conjunction with the financial statements and notes
included in the Partnership's annual report on Form 10-K filed with the
Securities and Exchange Commission for the year ended December 31, 1994.
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.
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Net Asset Value Per Unit
Changes in net asset value per Unit for the three months ended March 31,
1995 and 1994 were as follows:
<TABLE>
<CAPTION>
THREE-MONTHS ENDED
MARCH 31,
--------------------------------
1995 1994
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<S> <C> <C>
Net realized and unrealized
gains $ 791.15 $ 106.06
Interest income 30.06 14.24
Expenses (79.91) (22.46)
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Increase for period 741.30 97.84
Net Asset Value per Unit,
beginning of period 2,590.60 2,717.36
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Net Asset Value per Unit,
end of period $3,331.90 $2,815.20
========= =========
</TABLE>
6
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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 and cash equivalents (such as U.S. Treasury Bills, which constitutes
approximately 75% of the Partnership's assets at March 31, 1995) and net
unrealized appreciation (depreciation) on open futures contracts. 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 substantial decrease in
liquidity, no such losses occurred in the Partnership's first quarter of 1995.
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, redemptions of Units and distributions of
profits, if any.
For the three months ended March 31, 1995, Partnership capital
increased 27.6% from $11,629,195 to $14,833,635. This increase was
attributable to net income from operations of $3,327,720 which was partially
offset by the redemption of 37 limited partnership Units resulting in an
outflow of $123,280 for the three months ended March 31, 1995. 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 first quarter of 1995, the net asset value
per Unit increased 28.6% from $2,590.60 to $3,331.90, as compared to the first
quarter of 1994 in which the net asset value per Unit increased 3.6%. The
Partnership experienced a net trading gain before commissions and expenses in
the first quarter of 1995 of approximately $3,689,000. Gains were realized in
the trading of international rates, currencies, stock indices, agricultural
products and precious metals commodity futures . These gains were partially
offset by losses realized in the trading of commodity futures in energy
products.
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. These price trends are
influenced by, among
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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 earned on U.S. Treasury Bills increased by
approximately $63,000 for the three months ended March 31, 1995, as compared to
the corresponding period in 1994. The increase in interest income is primarily
due to an increase in interest rates for the first quarter of 1995 as compared
to the first quarter of 1994.
Brokerage commissions are based on the number of trades executed by
the Advisors. Brokerage commissions and clearing fees for the three months
ended March 31, 1995 increased by approximately $19,000 as compared to the
corresponding period in 1994.
Incentive fees are based on the new appreciation generated by each
Advisor as defined in the advisory agreements between the Partnership, the
General Partner and each Advisor. Trading performance for the three months
ended March 31, 1995 resulted in an increase in incentive fees of approximately
$246,000, as compared to the corresponding period in 1994.
8
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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. (a) Exhibits
(b) Reports on Form 8-K - None
9
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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.
HUTTON INVESTORS FUTURES FUND L.P. II
By: Smith Barney Futures Management Inc.
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(General Partner)
By: /s/ Alexander J. Sloane, President
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Alexander J. Sloane, President
Date: 5/10/95
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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 Inc.
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(General Partner)
By: /s/ Alexander J. Sloane, President
-----------------------------------
Alexander J. Sloane, President
Date: 5/10/95
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By /s/ Daniel A. Dantuono
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Daniel A. Dantuono
Chief Financial Officer and Director
Date: 5/10/95
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10
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EXHIBIT INDEX
Exhibit 27 - Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 12,527,403
<SECURITIES> 2,878,052
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 15,405,455
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 15,405,455
<CURRENT-LIABILITIES> 571,820
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 14,833,635
<TOTAL-LIABILITY-AND-EQUITY> 15,405,455
<SALES> 0
<TOTAL-REVENUES> 3,686,450
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 358,730
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3,327,720
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,327,720
<EPS-PRIMARY> 741.30
<EPS-DILUTED> 0
</TABLE>
