<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
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QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
---------------------------
For the quarterly period ended June 30, 1996
Commission File Number 33-21663
SUPER FUND PREFERRED LIMITED PARTNERSHIP
-----------------------------------------------------------
(Name of small business issuer as specified in its charter)
Illinois 36-3570836
- ------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Whitehall Street, Suite 1500, New York, New York 10004
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(Address of principal executive office)
(212) 859-0200
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(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past twelve 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>
PART I
Item 1. Financial Statements
Statement of Financial Condition as of June 30, 1996 3
Statements of Operations for the quarters ended June 30,
1996, and June 30, 1995 4
Statements of Operations for the six months ended June 30,
1996, and June 30, 1995 5
Statement of Changes in Partnership Capital for the six months
ended June 30, 1996, and June 30, 1995 6
Notes to Financial Statements 7
No Statement of Cash Flows is presented because the information required by a
Statement of Cash Flows is not material to an understanding of the Partnership's
operations.
2
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SUPER FUND PREFERRED LIMITED PARTNERSHIP
STATEMENT OF FINANCIAL CONDITION
AS OF June 30, 1996
Assets
------
Equity in commodity trading accounts:
Money balance $ 825,235
Net unrealized gain on open commodity interests 31,962
----------
Total equity in commodity trading accounts 857,197
Other Assets 4,810
----------
Total Assets $ 862,007
==========
Liabilities and Partners' Capital
---------------------------------
LIABILITIES:
Redemptions payable (Note F) 15,538
Accrued brokerage commissions and fees 31,988
Accrued professional fees and other liabilities 31,000
---------
Total Liabilities 78,526
---------
PARTNERS' CAPITAL (Note E):
Limited partners 1,064.344 units outstanding 689,069
General partner, 100 units outstanding 94,412
---------
Total Partners' Capital 783,481
---------
Total Liabilities and Partners' Capital $ 862,007
=========
The accompanying notes are an integral part of these statements.
3
<PAGE>
SUPER FUND PREFERRED LIMITED PARTNERSHIP
STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED
JUNE 30, 1996, AND JUNE 30, 1995
1996 1995
---- ----
REVENUES:
Net realized trading gain $ 2,932 $ 627,584
Change in net unrealized trading loss 21,627 (140,162)
Interest income (Note C) 7,384 11,058
--------- ---------
Total Revenues $ 31,943 $ 498,480
EXPENSES:
Brokerage commissions and fees
(Notes B and C) $ 9,460 $ 35,659
Incentive fees (Note D) 1,337 127,690
Professional fees and other 29,500 35,699
--------- ---------
Total Expenses 40,297 199,048
--------- ---------
Net Income (Loss) $( 8,354) $ 299,432
========= =========
Net income (loss) per unit based on the daily weighted
average number of units outstanding:
General Partner Class (100 Units) $ ( .84) $ 29.94
Limited Partner Class (1095.111 Units,
1447.922 Units, respectively) $ ( 7.55) $ 206.80
The accompanying notes are an integral part of these statements.
4
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SUPER FUND PREFERRED LIMITED PARTNERSHIP
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED
JUNE 30, 1996, AND JUNE 30, 1995
1996 1995
---- ----
REVENUES:
Net realized trading gain $ 51,396 $ 797,522
Change in net unrealized trading loss (63,501) ( 91,230)
Interest income (Note C) 15,162 19,812
--------- ---------
Total Revenues $ 3,057 $ 726,104
EXPENSES:
Brokerage commissions and fees
(Notes B and C) $ 21,642 $ 64,943
Incentive fees (Note D) 4,379 140,451
Professional fees and other 53,498 59,650
--------- ---------
Total Expenses 79,519 265,044
--------- ---------
Net Income (Loss) $ (76,462) $ 461,060
========= =========
Net income (loss) per unit based on the daily weighted
average number of units outstanding:
General Partner Class (100 Units) $ ( 7.65) $ 46.11
Limited Partner Class (1102.312 Units,
1491.564 Units, respectively) $ ( 68.67) $ 309.11
The accompanying notes are an integral part of these statements.
5
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SUPER FUND PREFERRED LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE SIX MONTHS ENDED JUNE 30, 1996, AND JUNE 30, 1995
<TABLE>
<CAPTION>
Limited Partners General Partner
---------------------------------------- -------------------------------------
Net Asset Net Asset
Value Value Total
Units Capital Per Unit Units Capital Per Unit Capital
----- ------- -------- ----- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Partners' Capital
December 31, 1994 1,473.776 $1,013,596 $ 687.75 100.000 $ 94,466 $ 944.66 $1,108,062
========= =========
Net Profit 456,449 4,611 461,060
Redemptions 201.011 (171,136) 0 0 (171,136)
--------- ---------- ------- -------- =========
Partners' Capital,
June 30, 1995 1,272.765 $1,298,909 $1,020.54 100.000 $ 99,077 $ 990.77 $1,397,986
========= ========== ========= ======= ======== ========= ==========
Partners' Capital
December 31, 1995 1,111.807 $ 795,475 $ 715.48 100.000 $ 95,177 $ 951.77 $ 890,652
Net Loss (75,697) (765) (76,462)
Redemptions 47.463 (30,709) 0 0 (30,709)
Partners' Capital
June 30, 1996 1,064.344 $ 689,069 $ 647.41 100.000 $ 94,412 $ 944.12 $ 783,481
========= ========== ========= ======= ======== ========= ==========
</TABLE>
The accompanying notes are an integral part of these statements.
6
<PAGE>
NOTES TO FINANCIAL STATEMENTS
SUPER FUND PREFERRED LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
NOTE A ORGANIZATION OF BUSINESS
Super Fund Preferred Limited Partnership (the "Partnership"), an Illinois
limited partnership, commenced its operations on November 8, 1988. The
Partnership's purpose is to realize capital appreciation through speculative
trading of commodity futures, forward and options contracts, and other commodity
interests, pursuant to the trading methods and strategies of the retained
Commodity Trading Advisors ("CTAs"). As of June 30, 1996, the CTAs with
effective advisory agreements with the Partnership were as follows: EMC Capital
Management, Inc. and Loran Futures, Inc. The General Partner of the partnership
is Vision Limited Partnership (the "General Partner"). The General Partner must
maintain a net worth equal to the lesser of one million dollars or 10% of the
aggregate initial capital contributions to the Partnership by the limited
partners.
The clearing brokers of the Partnership are the General Partner and Lind-Waldock
& Company ("Lind-Waldock").
The Partnership is currently closed to new subscriptions and will be dissolved
on December 31, 2008, or upon the occurrence of certain events as specified in
the Limited Partnership Agreement.
NOTE B SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenue Recognition
Futures and option contracts are recorded on the trade date at the transacted
contract price and valued at market. Market values of futures and option
contracts are based upon exchange settlement prices.
Foreign Currency Translation
Assets and liabilities denominated in foreign currencies are translated at
year-end exchange rates. Gains and losses resulting from foreign currency
translations are calculated using month end exchange rates and included in the
accompanying statements of operations. As of June 30, 1996, the Partnership
held assets denominated in foreign currencies equal to US $192,607.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Brokerage Commissions and Fees
These expenses represent all brokerage commissions and exchange, National
Futures Association, and other fees incurred in connection with the execution of
commodity interests trades. Commissions and fees associated with open trades at
the end of the period are accrued on a round-turn basis.
NOTE C RELATED PARTY TRANSACTIONS
Interest Income
The Partnership and the General Partner receive 70% and 20%, respectively, of
the "Overnight Interest" on the Partnership's cash on deposit with the clearing
brokers not committed as margin. The clearing broker receives all remaining
Overnight Interest. Lind-Waldock has agreed to pay interest at a rate equal to
the "Overnight Repurchase Rate". During the six-month period ended June
30, 1996 and 1995, the General Partner received interest in the amount of
$4,332 and $3,275, respectively.
The General Partner has agreed to pay interest at the lesser of the average
repurchase rate or the average Treasury bill rate. For the six-month period
ended June 30, 1996 and 1995, the Partnership received from the General Partner
$ 1,303 and $ 6,653 in interest income, respectively.
Brokerage Commissions and Fees
The General Partner receives directly from the primary clearing broker,
Lind-Waldock & Co., all brokerage commissions in excess of brokerage
commissions paid to the clearing brokers and the trailing commission paid to
all non-affiliated selling agents ("Excess Brokerage Commissions"), which
payment is in lieu of a management fee. For the six month period ended June
31, 1996 and 1995, the General Partner received $ and $32,978 in Excess
Brokerage Commissions, respectively.
8
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NOTES TO FINANCIAL STATEMENTS
NOTE D INCENTIVE FEES
The Partnership pays incentive fees to its CTAs. The incentive fees are
calculated and paid at either the end of each month or the end of each quarter,
in an amount equal to 25% of the Partnership's new trading profits, if any, as
defined by a written agreement between the General Partner and the respective
CTAs. If any incentive fee is paid by the Partnership to the CTAs on account of
new trading profits, and the net asset value of the Partnership account
thereafter declines for any subsequent month or quarter, the CTAs are entitled
to retain such amounts previously paid by the Partnership. However, no
subsequent incentive fee based on new trading profits will be paid to the CTAs
until the Partnership recoups its losses and experiences new trading profits.
The Partnership paid $4,379 and $140,451 in incentive fees during the
six-month period ended June 30, 1996 and 1995, respectively.
NOTE E ALLOCATION OF PROFIT AND LOSS FOR PARTNERSHIP ACCOUNTING
The Partnership's profits and losses are allocated one percent to the General
Partner and ninety-nine percent to the limited partners.
NOTE F REDEMPTIONS
A limited partner (or any assignee thereof) may cause any or all of his units to
be redeemed as of the last day of any month provided that the General Partner
has received a redemption notice in proper form not less than ten days prior to
the end of the month. Redemption value is at the month-end net asset value less
unamortized organization costs per unit. As of June 30, 1996, the
redemption value per partnership unit was $647.
NOTE G OPERATING EXPENSES
The Partnership bears all expenses incurred in connection with its activities.
These expenses include brokerage commissions and fees, incentive fees, and
periodic legal, accounting, and tax return preparation and filing fees.
NOTE H INCOME TAXES
No provision for income taxes has been made in the accompanying financial
statements. Partners are responsible for reporting income or loss based upon
their respective share of revenues and expenses of the Partnership.
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE I FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND
CONCENTRATION OF CREDIT RISK
The Partnership trades financial futures contracts and options. These financial
instruments have elements of off-balance sheet credit and market risk in excess
of the amounts recognized in the statement of financial condition. Futures
contracts are marked to market daily, with variations in value settled on a
daily basis with the exchange upon which they are traded, and with the futures
commission merchant through which the commodity futures and options are
executed.
The broker with which each financial futures contract or option is
executed acts as the counterparty for the above contracts and,
accordingly, creates a risk of non-performance. All of the Partnership's
open financial futures and options positions were transacted with the
General Partner and Lind-Waldock. Based upon a quarterly review of
financial disclosures, including statements of net capital and
segregation requirements, the General Partner monitors the
credit-worthiness of its counterparties and, when deemed necessary,
reduces its exposure to these counterparties. The Partnership's exposure
to credit risk associated with the non-performance of these
counterparties in fulfilling contractual obligations can be directly
impacted by volatile financial markets.
Generally, financial futures contracts and options can be closed out at
the discretion of the CTAs or the General Partner, if he deems it to be
in the best interest of the Partnership. However, an illiquid market
could prevent the closeout of positions.
10
<PAGE>
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
The Partnership's capital consists of capital contributions of the partners as
increased or decreased by gains or losses on commodity interest trading,
interest income, expenses and redemptions of Units and distributions of profits,
if any. Commodity trading is highly leveraged and speculative. Therefore, gains
and losses on such trading are not predictable with any level of reliability.
Much of the market movement in commodities is based upon fundamental and
technical factors which the trading advisors may not be able to identify and are
not subject to the control of the Partnership.
Units of Limited Partnership interest were offered and sold through May 31,
1989. As of the date of this report, the General Partner is not contemplating
the sale of additional Units.
The General Partner may make distributions of profits, if profits are
substantial and certain Net Asset Value levels are achieved. However, no
distributions have been made since the Partnership's inception.
The Limited Partners may redeem their Units as of the last day of the month upon
written notice to the General Partner. The Limited Partners may also redeem
their Units on such other redemption dates as the General Partner in its sole
discretion may declare. Units representing $ 30,709 and $ 171,136 were redeemed
during the six months ended June 30, 1996 and 1995, respectively.
The General Partner believes the Partnership will continue to meet both its
long-term and-short-term cash requirements for operating expenses and unit
redemptions from the cash generated by operations and, if necessary, from
withdrawals of funds from the Trading Advisors' Designated Trading Accounts.
However, the Unit redemption value may be reduced in the event that the
Partnership experiences net operating losses in the future. No assurance can be
given in this regard. There are substantial risks of loss involved in
commodities trading.
For the six months ended June 30, 1996, the Partnership reported
losses from its trading activities, including both net realized trading
gains and the change in net unrealized trading loss of $(12,105), as
compared with profits from trading activities of $ 706,292 for the six
months ended June 30, 1995. The decreased revenues are primarily
attributable to losses on foreign futures relating to currency and other
financial instruments.
11
<PAGE>
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Futures positions are margined with cash or cash equivalents. Funds not
required to be on deposit for margin are held in cash or cash
equivalents which bear interest at rates based on the overnight
repurchase rate, for funds held by Lind, or at the lesser of the
average repurchase rate and the average Treasury Bill rate, for funds
held by the General Partner. The Partnership realized $ 15,162 and $ 19,812
in interest income from this investment during the six months ended
June 30, 1996 and 1995, respectively. The decrease in interest income
experienced by the Partnership for the six months ended June 30,
1996, as compared with the same period ended June 30, 1995, was due to
the a decrease in funds available for trading. Total expenses for the
six months ended June 30, 1996, were $ 79,519 as compared to $ 265,044
for the six months ended June 30, 1995. The six months ended June
30, 1996, exhibited a $ 43,301 decrease in brokerage commissions and fees
due to lower overall trading volume.
The Partnership experienced a net loss of $ 76,462, or $68.67 per limited
partner unit, for the six months ended June 30, 1996, as compared to a net
profit of $ 461,060, or $309.11 per limited partner unit for the six months
ended June 30, 1995. These losses are due primarily to the unprofitable results
of closed positions in foreign future contracts. The General Partner is
unable to predict whether the Partnership will experience net trading gains or
whether it will generate net losses in the future.
12
<PAGE>
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Partnership is not aware of any pending legal proceedings to which it is a
party or to which any of its assets are subject.
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
b. Reports on Form 8-K
There were no reports on Form 8-K filed by the Partnership
during the quarter ended June 30, 1996.
13
<PAGE>
SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Date: August 20, 1996
SUPER FUND PREFERRED LIMITED PARTNERSHIP
By: Vision Limited Partnership, General Partner
By: Vision Capital Management, Inc., General Partner
By: /s/ Howard M. Rothman
--------------------------------------------
Howard M. Rothman, Executive Vice President,
Chief Operating Officer, Secretary, and
Director
/s/ Eric Gaffin
--------------------------------------------
Eric Gaffin, Acting Controller
14
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 857197
<SECURITIES> 0
<RECEIVABLES> 4810
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 862007
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 862007
<CURRENT-LIABILITIES> 78526
<BONDS> 0
0
0
<COMMON> 783481
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 862007
<SALES> 0
<TOTAL-REVENUES> 3057
<CGS> 0
<TOTAL-COSTS> (79519)
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (76462)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (76462)
<EPS-PRIMARY> (63.60)
<EPS-DILUTED> 0
</TABLE>
