<PAGE> 1
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, 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
September 30, 1995 and December 31,
1994 3
Statements of Income and Expenses and
Partners' Capital for the Three and Nine
Months ended September 30, 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 I
Item 1. Financial Statements
HUTTON INVESTORS FUTURES FUND L.P. II
STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1995 1994
ASSETS --------------- --------------
(Unaudited)
<S> <C> <C>
Equity in commodity futures trading account:
Cash and cash equivalents $15,212,211 $10,904,167
Net unrealized appreciation (depreciation)
on open futures contracts (64,504) 1,150,941
--------------- --------------
$15,147,707 $12,055,108
=============== ==============
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accrued expenses:
Commissions on open futures contracts $59,199 $64,253
Other 25,727 37,835
Redemptions payable 165,449 323,825
--------------- --------------
250,375 425,913
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Partners' capital
General Partner, 75 Unit
equivalents outstanding 258,515 194,295
Limited Partners, 4,247 and 4,414 Units
of Limited Partnership Interest
outstanding in 1995 and 1994, respectively 14,638,817 11,434,900
--------------- --------------
14,897,332 11,629,195
--------------- --------------
$15,147,707 $12,055,108
=============== ==============
</TABLE>
See Notes to Financial Statements.
3
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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 NINE-MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------------------- ----------------------------------
1995 1994 1995 1994
----------------- ------------ ------------------- ------------
<S> <C> <C> <C> <C>
Income:
Net gains (losses) on trading
of commodity futures:
Realized gains (losses) on
closed positions ($125,111) ($118,903) $5,474,908 $1,127,739
Change in unrealized gains /
losses on open positions (342,645) (1,107,595) (1,215,445) (862,931)
----------------- ------------ ------------------- ------------
(467,756) (1,226,498) 4,259,463 264,808
Less, brokerage commissions and
clearing fees ($4,160,
$3,660, $12,787 and
$12,068, respectively) (139,843) (112,716) (366,887) (346,152)
----------------- ------------ ------------------- ------------
Net realized and unrealized
gains (losses) (607,599) (1,339,214) 3,892,576 (81,344)
Interest income 171,952 115,981 482,071 283,666
----------------- ------------ ------------------- ------------
(435,647) (1,223,233) 4,374,647 202,322
----------------- ------------ ------------------- ------------
Expenses:
Incentive fees 493,593 293,036
Other 10,372 12,205 33,177 37,545
----------------- ------------ ------------------- ------------
10,372 12,205 526,770 330,581
----------------- ------------ ------------------- ------------
Net income (loss) (446,019) (1,235,438) 3,847,877 (128,259)
Redemptions - Limited Partners (165,449) (303,761) (579,740) (624,907)
- General Partner (642,468) (642,468)
Net increase (decrease) in ----------------- ------------ ------------------- ------------
Partners' capital (611,468) (2,181,667) 3,268,137 (1,395,634)
Partners' capital, beginning
of period 15,508,800 14,584,772 11,629,195 13,798,739
----------------- ------------ ------------------- ------------
Partners' capital, end
of period $14,897,332 $12,403,105 $14,897,332 $12,403,105
================= ============ =================== ============
Net Asset Value per Unit
(4,322 and 4,614
Units outstanding at
September 30, 1995 and 1994, $3,446.86 $2,688.15 $3,446.86 $2,688.15
respectively) ================= ============ =================== ============
</TABLE>
See Notes to Financial Statements.
4
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HUTTON INVESTORS FUTURES FUND L.P. II
NOTES TO FINANCIAL STATEMENTS
September 30, 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 September 30, 1995 and the
results of its operations for the three and nine months ended
September 30, 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.
5
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Net Asset Value Per Unit
Changes in net asset value per Unit for the three and nine months
ended September 30, 1995 and 1994 were as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------ ----------------------
1995 1994 1995 1994
------------------------ ----------------------
<S> <C> <C> <C> <C>
Net realized and
unrealized gains
(losses) $ (139.04) $ (269.68) $ 865.20 $ (20.17)
Interest income 39.35 23.36 108.76 56.62
Expenses (2.37) (2.46) (117.70) (65.66)
---------- ---------- ---------- ----------
Increase (decrease)
for period (102.06) (248.78) 856.26 (29.21)
Net Asset Value
per Unit,beginning
of period 3,548.92 2,936.93 2,590.60 2,717.36
---------- ---------- ---------- ----------
Net Asset Value
per Unit,end of
period $3,446.86 $2,688.15 $3,446.86 $2,688.15
========== ========== ========== ==========
</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 September 30, 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 third 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 nine months ended September 30, 1995, Partnership
capital increased 28.1% from $11,629,195 to $14,897,332. This
increase was attributable to net income from operations of $3,847,877
which was partially offset by the redemption of 167 limited
partnership Units resulting in an outflow of $579,740 for the nine
months ended September 30, 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 third quarter of 1995, the net asset
value per Unit decreased 2.9% from $3,548.92 to $3,446.86, as
compared to the third quarter of 1994 in which the net asset value
per Unit decreased 8.5%. The Partnership experienced a net trading
loss before commissions and expenses in the third quarter of 1995 of
approximately $468,000. Losses were recognized in the trading of
commodity futures in interest rates, stock indices, agricultural
products, energy products and precious metals. These losses were
partially offset by gains recognized in the trading of commodity
futures in currencies.
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
7
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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 $56,000 and $198,000 for the three and nine months
ended September 30, 1995, respectively, as compared to the
corresponding periods in 1994. The increase in interest income is
primarily due to an increase in interest rates during the nine months
ended September 30, 1995 as compared to the corresponding period in
1994.
Brokerage commissions are based on the number of trades executed
by the Advisors. Brokerage commissions and clearing fees for the
three and nine months ended September 30, 1995 increased by
approximately $27,000 and $21,000, respectively, as compared to the
corresponding periods 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. No incentive fees
were earned during the three months ended September 30, 1995. Trading
performance for the nine months ended September 30, 1995 resulted in
an increase in incentive fees of approximately $201,000 as compared
to 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
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By: Smith Barney Futures Management Inc.
------------------------------------
(General Partner)
By: /s/ Alexander J. Sloane, President
------------------------------------
Alexander J. Sloane, President
Date: 11/10/95
----------------
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.
------------------------------------
(General Partner)
By: /s/ Alexander J. Sloane, President
------------------------------------
Alexander J. Sloane, President
Date: 11/10/95
---------------
By /s/ Daniel A. Dantuono
-----------------------------------
Daniel A. Dantuono
Chief Financial Officer and Director
Date: 11/10/95
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10
<PAGE> 11
Exhibit Index
27 - Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JUL-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 15,212,211
<SECURITIES> (64,504)
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 15,147,707
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 15,147,707
<CURRENT-LIABILITIES> 250,375
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 14,897,332
<TOTAL-LIABILITY-AND-EQUITY> 15,147,707
<SALES> 0
<TOTAL-REVENUES> (435,647)
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 10,372
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (446,019)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (446,019)
<EPS-PRIMARY> (102.06)
<EPS-DILUTED> 0
</TABLE>
