<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 June 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
------
<S> <C>
PART I - Financial Information:
Item 1. Financial Statements:
Statements of Financial Condition at
June 30, 1995 and December 31, 1994 3
Statements of Income and Expenses and
Partners' Capital for the Three and Six
Months ended June 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
<PAGE> 3
PART I
Item 1. Financial Statements
HUTTON INVESTORS FUTURES FUND L.P. II
STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1995 1994
ASSETS ----------- ------------
(Unaudited)
<S> <C> <C>
Equity in commodity futures trading account:
Cash and cash equivalents $15,731,312 $10,904,167
Net unrealized appreciation
on open futures contracts 278,141 1,150,941
----------- -----------
$16,009,453 $12,055,108
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accrued expenses:
Commissions on open futures contracts $ 36,974 $ 64,253
Incentive fees 146,203
Other 26,465 37,835
Redemptions payable 291,011 323,825
----------- -----------
500,653 425,913
----------- -----------
Partners' capital
General Partner, 75 Unit
equivalents outstanding 266,169 194,295
Limited Partners, 4,295 and 4,414 Units
of Limited Partnership Interest
outstanding in 1995 and 1994, respectively 15,242,631 11,434,900
----------- -----------
15,508,800 11,629,195
----------- -----------
$16,009,453 $12,055,108
=========== ===========
</TABLE>
See Notes to Financial Statements.
3
<PAGE> 4
HUTTON INVESTORS FUTURES FUND L.P.II
STATEMENT OF INCOME AND EXPENSES AND PARTNERS' CAPITAL
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
--------------------------------- ---------------------------------
1995 1994 1995 1994
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Income:
Net gains (losses) on trading
of commodity futures:
Realized gains on
closed positions $ 3,637,861 $ 741,247 $ 5,600,019 $ 1,246,642
Change in unrealized gains / losses
on open positions (2,599,911) 92,318 (872,800) 244,664
------------ ------------ ------------ ------------
1,037,950 833,565 4,727,219 1,491,306
Less, brokerage commissions and
clearing fees ($4,200,
$4,397, $8,627 and
$8,408, respectively) (89,270) (114,285) (227,044) (233,436)
------------ ------------ ------------ ------------
Net realized and unrealized
gains 948,680 719,280 4,500,175 1,257,870
Interest income 175,164 95,354 310,119 167,685
------------ ------------ ------------ ------------
1,123,844 814,634 4,810,294 1,425,555
------------ ------------ ------------ ------------
Expenses:
Incentive fees 146,203 191,557 493,593 293,036
Other 11,465 12,740 22,805 25,340
------------ ------------ ------------ ------------
157,668 204,297 516,398 318,376
------------ ------------ ------------ ------------
Net income 966,176 610,337 4,293,896 1,107,179
Redemptions (291,011) (140,973) (414,291) (321,146)
------------ ------------ ------------ ------------
Net increase in
Partners' capital 675,165 469,364 3,879,605 786,033
Partners' capital, beginning
of period 14,833,635 14,115,408 11,629,195 13,798,739
------------ ------------ ------------ ------------
Partners' capital, end
of period $ 15,508,800 $ 14,584,772 $ 15,508,800 $ 14,584,772
============ ============ ============ ============
Net asset value per Unit
(4,370 and 4,966
Units outstanding at
June 30, 1995 and 1994, $ 3,548.92 $ 2,936.93 $ 3,548.92 $ 2,936.93
respectively) ============ ============ ============ ============
</TABLE>
See Notes to Financial Statements.
4
<PAGE> 5
HUTTON INVESTORS FUTURES FUND L.P. II
NOTES TO FINANCIAL STATEMENTS
June 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 June 30, 1995 and the results of its operations for the three and
six months ended June 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
<PAGE> 6
Net Asset Value Per Unit
Changes in net asset value per Unit for the three and six months ended June
30, 1995 and 1994 were as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1995 1994 1995 1994
---------------------------- ----------------------------
<S> <C> <C> <C> <C>
Net realized and
unrealized gains $ 213.09 $ 143.45 $ 1,004.24 $ 249.51
Interest income 39.35 19.02 69.41 33.26
Expenses (35.42) (40.74) (115.33) (63.20)
---------- ---------- ---------- ----------
Increase for period 217.02 121.73 958.32 219.57
Net Asset Value
per Unit,beginning
of period 3,331.90 2,815.20 2,590.60 2,717.36
---------- ---------- ---------- ----------
Net Asset Value
per Unit,end of
period $ 3,548.92 $ 2,936.93 $ 3,548.92 $ 2,936.93
========== ========== ========== ==========
</TABLE>
6
<PAGE> 7
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 June 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 second 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 six months ended June 30, 1995, Partnership capital increased
33.4% from $11,629,195 to $15,508,800. This increase was attributable to net
income from operations of $4,293,896 which was partially offset by the
redemption of 119 limited partnership Units resulting in an outflow of $414,291
for the six months ended June 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 second quarter of 1995, the net asset value per
Unit increased 6.5% from $3,331.90 to $3,548.92, as compared to the second
quarter of 1994 in which the net asset value per Unit increased 4.3%. The
Partnership experienced a net trading gain before commissions and expenses in
the second quarter of 1995 of approximately $1,038,000. Gains were recognized in
the trading of interest rates, stock indices, agricultural and energy products
commodity futures. These gains were partially offset by losses recognized in the
trading of commodity futures in precious metals and 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
<PAGE> 8
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
$80,000 and $142,000 for the three and six months ended June 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 six
months ended June 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 six months
ended June 30, 1995 decreased by approximately $25,000 and $6,000, 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. Trading performance for the three and six months ended
June 30, 1995 resulted in a decrease of approximately $45,000, and an increase
of approximately $201,000, respectively, as compared to the corresponding
periods in 1994.
8
<PAGE> 9
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
<PAGE> 10
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.
------------------------------------
(General Partner)
By: /s/ Alexander J. Sloane, President
------------------------------------
Alexander J. Sloane, President
Date: 8/10/95
------------------------------------
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: 8/10/95
------------------------------------
By /s/ Daniel A. Dantuono
------------------------------------
Daniel A. Dantuono
Chief Financial Officer and Director
Date: 8/10/95
------------------------------------
10
<PAGE> 11
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> APR-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 15,731,312
<SECURITIES> 278,141
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 16,009,453
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 16,009,453
<CURRENT-LIABILITIES> 500,653
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 15,508,800
<TOTAL-LIABILITY-AND-EQUITY> 16,009,453
<SALES> 0
<TOTAL-REVENUES> 1,123,844
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 157,668
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 966,176
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 966,176
<EPS-PRIMARY> 217.02
<EPS-DILUTED> 0
</TABLE>
