<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 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 0-17592
PRUDENTIAL-BACHE DIVERSIFIED FUTURES FUND L.P.
- - -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3464456
- - -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One New York Plaza, 13th Floor, New York, New York 10292
- - --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 778-7866
Securities registered pursuant to Section 12(b) of the Act:
None
- - -------------------------------------------------------------------------------
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
- - -------------------------------------------------------------------------------
(Title of class)
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 CK No _
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [CK]
DOCUMENTS INCORPORATED BY REFERENCE
Agreement of Limited Partnership of the Registrant, dated May 25, 1988, as
amended and restated as of July 12, 1988, included as part of the Registration
Statement on Form S-1 (File No. 33-22100) filed with the Securities and Exchange
Commission on June 1, 1988 pursuant to Rule 424(b) of the Securities Act of
1933, is incorporated by reference into Part IV of this Annual Report on Form
10-K.
Annual Report to Limited Partners for the year ended December 31, 1995 is
incorporated by reference into Parts II and IV of this Annual Report on Form
10-K
Index to exhibits can be found on pages 7 and 8.
<PAGE>
<PAGE>
PRUDENTIAL-BACHE DIVERSIFIED FUTURES FUND L.P.
(a limited partnership)
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I PAGE
<S> <C> <C>
Item 1 Business......................................................................... 3
Item 2 Properties....................................................................... 3
Item 3 Legal Proceedings................................................................ 3
Item 4 Submission of Matters to a Vote of Limited Partners.............................. 3
PART II
Item 5 Market for the Registrant's Units and Related Limited Partner Matters............ 4
Item 6 Selected Financial Data.......................................................... 4
Item 7 Management's Discussion and Analysis of Financial Condition and Results of
Operations..................................................................... 4
Item 8 Financial Statements and Supplementary Data...................................... 5
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure..................................................................... 5
PART III
Item 10 Directors and Executive Officers of the Registrant............................... 5
Item 11 Executive Compensation........................................................... 6
Item 12 Security Ownership of Certain Beneficial Owners and Management................... 6
Item 13 Certain Relationships and Related Transactions................................... 6
PART IV
Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K
Financial Statements and Financial Statement Schedules........................... 7
Exhibits......................................................................... 7
Reports on Form 8-K.............................................................. 8
SIGNATURES.................................................................................. 9
</TABLE>
2
<PAGE>
<PAGE>
PART I
Item 1. Business
General
Prudential-Bache Diversified Futures Fund L.P. (the ``Registrant''), a
Delaware limited partnership, was formed on May 25, 1988 and will terminate on
December 31, 2007 unless terminated sooner under the provisions of the Amended
and Restated Agreement of Limited Partnership (the ``Partnership Agreement'').
The Registrant was formed to engage primarily in the speculative trading of a
portfolio consisting primarily of commodity futures, forward and options
contracts. On October 19, 1988, the Registrant completed its offering and raised
$30,107,800 from the sale of 297,468 units of limited partnership interest and
3,610 units of general partnership interest (collectively, the ``Units'') which
resulted in net proceeds to the Registrant of $29,387,470. The Registrant's
fiscal year for book and tax purposes ends on December 31.
All trading decisions for the Registrant are made by John W. Henry & Co.,
Inc. (the ``Trading Manager''), an independent commodity trading manager which
manages the Registrant's assets pursuant to five trading programs developed by
the Trading Manager. The General Partner retains the authority to override
trading instructions that violate the Registrant's trading policies.
The Registrant is engaged solely in the business of commodity futures,
forwards and options trading; therefore, presentation of industry segment
information is not applicable.
General Partner
The general partner of the Registrant is Seaport Futures Management, Inc.
(the ``General Partner''), which is an affiliate of Prudential Securities
Incorporated (``PSI''), the Registrant's commodity broker. Both the General
Partner and PSI are wholly-owned subsidiaries of Prudential Securities Group
Inc. (``PSGI''). The General Partner is required to maintain at least a 1%
interest in the Registrant as long as it is acting as the Registrant's general
partner.
Competition
The General Partner and its affiliates have formed, and may continue to form,
various entities to engage in the speculative trading of futures, forward and
options contracts which, in part, have certain of the same investment policies
as the Registrant.
The Registrant is a closed-end fund which does not currently, and does not
intend in the future to, solicit the sale of additional Units. As such, the
Registrant does not compete with other entities to attract new fund
participants. However, to the extent that the Trading Manager recommends similar
or identical trades to the Registrant and other accounts which it manages, the
Registrant may compete with those accounts for the execution of the same or
similar trades.
Employees
The Registrant has no employees. Management and administrative services for
the Registrant are performed by the General Partner and its affiliates pursuant
to the Partnership Agreement. See Notes A, C and D to the Registrant's annual
report to limited partners for the year ended December 31, 1995 (``Registrant's
1995 Annual Report'') which is filed as an exhibit hereto.
Item 2. Properties
The Registrant does not own or lease any property.
Item 3. Legal Proceedings
There are no material legal proceedings pending by or against the Registrant
or the General Partner.
Item 4. Submission of Matters to a Vote of Limited Partners
None
3
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<PAGE>
PART II
Item 5. Market for the Registrant's Units and Related Limited Partner Matters
As of March 14, 1996, there were 787 holders of record owning 57,956 Units
which include 3,600 units of general partnership interest. A significant
secondary market for the Units has not developed, and it is not expected that
one will develop in the future. There are also certain restrictions set forth in
the Partnership Agreement limiting the ability of a partner to transfer Units.
The Partnership Agreement does, however, provide that a limited partner may only
redeem its units as of the last business day of any full calendar quarter
(beginning with the end of the first full quarter of the Registrant's
operations, which was March 31, 1989) at the then current net asset value per
Unit reduced by each Unit's pro rata portion of unamortized organizational
costs. Consequently, holders of Units may not be able to liquidate their
investments in the event of an emergency or for any other reason.
There are no material restrictions upon the Registrant's present or future
ability to make distributions in accordance with the provisions of the
Partnership Agreement. No distributions have been made since inception and no
distributions are anticipated in the future.
Item 6. Selected Financial Data
The following table presents selected financial data of the Registrant. This
data should be read in conjunction with the financial statements of the
Registrant and the notes thereto on pages 2 through 9 of the Registrant's 1995
Annual Report which is filed as an exhibit hereto.
<TABLE>
<CAPTION>
Year ended December 31,
---------------------------------------------------------------------
1995 1994 1993 1992 1991
----------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Net realized gain on
commodity transactions...... $ 7,694,647 $ 195,099 $ 6,760,365 $ 7,098,724 $ 1,105,860
----------- ------------ ----------- ------------ -----------
----------- ------------ ----------- ------------ -----------
Change in net unrealized gain
on open commodity
positions................... $ (460,239) $ 215,941 $ 654,157 $ (7,880,542) $ 7,603,442
----------- ------------ ----------- ------------ -----------
----------- ------------ ----------- ------------ -----------
Commissions................... $ 1,668,063 $ 1,641,756 $ 1,667,523 $ 1,543,216 $ 1,654,075
----------- ------------ ----------- ------------ -----------
----------- ------------ ----------- ------------ -----------
Management fees............... $ 763,562 $ 727,169 $ 763,902 $ 681,835 $ 761,425
----------- ------------ ----------- ------------ -----------
----------- ------------ ----------- ------------ -----------
Incentive fees................ $ 268,499 $ 226,735 $ 399,990 $ 121,252 $ 368,073
----------- ------------ ----------- ------------ -----------
----------- ------------ ----------- ------------ -----------
Net income (loss)............. $ 5,284,484 $ (1,739,097) $ 4,939,250 $ (2,713,190) $ 6,754,682
----------- ------------ ----------- ------------ -----------
----------- ------------ ----------- ------------ -----------
Allocation of net income
(loss):
Limited partners............ $ 4,986,601 $ (1,641,114) $ 4,709,119 $ (2,632,558) $ 6,526,939
----------- ------------ ----------- ------------ -----------
----------- ------------ ----------- ------------ -----------
General partner............. $ 297,883 $ (97,983) $ 230,131 $ (80,632) $ 227,743
----------- ------------ ----------- ------------ -----------
----------- ------------ ----------- ------------ -----------
Net income (loss) per weighted
average Unit................ $ 86.19 $ (25.65) $ 66.05 $ (29.78) $ 59.20
----------- ------------ ----------- ------------ -----------
----------- ------------ ----------- ------------ -----------
Total assets.................. $19,467,438 $ 16,120,278 $19,612,027 $ 17,200,931 $24,642,188
----------- ------------ ----------- ------------ -----------
----------- ------------ ----------- ------------ -----------
Redemptions................... $ 2,047,033 $ 1,671,602 $ 2,027,435 $ 4,014,399 $ 4,188,120
----------- ------------ ----------- ------------ -----------
----------- ------------ ----------- ------------ -----------
Net asset value per Unit...... $ 326.48 $ 243.73 $ 270.95 $ 206.07 $ 228.46
----------- ------------ ----------- ------------ -----------
----------- ------------ ----------- ------------ -----------
</TABLE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
This information is incorporated by reference to pages 10 and 11 of the
Registrant's 1995 Annual Report which is filed as an exhibit hereto.
4
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<PAGE>
Item 8. Financial Statements and Supplementary Data
The financial statements are incorporated by reference to pages 2 through 9
of the Registrant's 1995 Annual Report which is filed as an exhibit hereto.
Supplementary data specified by Item 302 of Regulation S-K (selected
quarterly financial data) is not applicable.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None
PART III
Item 10. Directors and Executive Officers of the Registrant
There are no directors or executive officers of the Registrant. The
Registrant is managed by the General Partner.
The General Partner's directors and executive officers, and any persons
holding more than ten percent of the Registrant's Units (``Ten Percent Owners'')
are required to report their initial ownership of such Units and any subsequent
changes in that ownership to the Securities and Exchange Commission on Forms 3,
4, or 5. Such executive officers, directors and Ten Percent Owners are required
by Securities and Exchange Commission regulations to furnish the Registrant with
copies of all Forms 3, 4, and 5 they file. All of these filing requirements were
satisfied on a timely basis. In making these disclosures, the Registrant has
relied solely on written representations of the General Partner's directors and
executive officers or copies of the reports that they have filed with the
Securities and Exchange Commission during and with respect to its most recent
fiscal year.
The directors and executive officers of Seaport Futures Management, Inc. and
their positions with respect to the Registrant are as follows:
Name Position
James M. Kelso President and Director
Barbara J. Brooks Treasurer and Chief Financial Officer
Steven Carlino Vice President and Chief Accounting Officer
A. Laurence Norton, Jr. Director
Guy S. Scarpaci Director
JAMES M. KELSO, age 41, is the President and a Director of Seaport Futures
Management, Inc. He is a Senior Vice President of Futures Administration of PSI.
He is also the President and a Director of Prudential Securities Futures
Management Inc. and serves in various capacities for other affiliated companies.
He has held several positions within PSI since July 1981.
BARBARA J. BROOKS, age 47, is the Treasurer and Chief Financial Officer of
Seaport Futures Management, Inc. She is a Senior Vice President of PSI. She is
also the Treasurer and Chief Financial Officer of Prudential Securities Futures
Management Inc. and serves in various capacities for other affiliated companies.
She has held several positions within PSI since April 1983. Ms. Brooks is a
certified public accountant.
STEVEN CARLINO, age 32, is a Vice President of Seaport Futures Management,
Inc. He is a First Vice President of PSI. He is also a Vice President of
Prudential Securities Futures Management Inc. and serves in various capacities
for other affiliated companies. Prior to joining PSI in October 1992, he was
with Ernst & Young for six years. Mr. Carlino is a certified public accountant.
A. LAURENCE NORTON, JR., age 57, is a Director of Seaport Futures Management,
Inc. He is an Executive Vice President of PSI and head of its Futures Division.
He is also a Director of Prudential Securities Futures Management Inc. Most
recently, he held the position of Executive Director of Retail Development
5
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<PAGE>
and Retail Strategies at PSI. Prior to joining PSI in 1991, Mr. Norton was a
Senior Vice President and Branch Manager of Shearson Lehman Brothers.
GUY S. SCARPACI, age 49, is a Director of Seaport Futures Management, Inc. He
is a First Vice President of the Futures Division of PSI. He is also a Director
of Prudential Securities Futures Management Inc. Mr. Scarpaci has been employed
by PSI in positions of increasing responsibility since August 1974.
James M. Kelso replaced Edward J. Mader as Director and replaced A. Laurence
Norton, Jr. as President effective May 1995. Edward J. Mader ceased to serve as
Vice President effective May 1995. Steven Carlino was elected Vice President
effective July 1995 and replaced Eleanor L. Thomas as Chief Accounting Officer
on behalf of the Registrant. Gale Eisner ceased to serve as Director effective
June 1995.
There are no family relationships among any of the foregoing directors or
executive officers. All of the foregoing directors and/or executive officers
have indefinite terms.
Item 11. Executive Compensation
The Registrant does not pay or accrue any fees, salaries or any other form of
compensation to directors and officers of the General Partner for their
services. Certain directors and officers of the General Partner receive
compensation from affiliates of the General Partner, not from the Registrant,
for services performed for various affiliated entities, which may include
services performed for the Registrant; however, the General Partner believes
that any compensation attributable to services performed for the Registrant is
immaterial. (See also Item 13, Certain Relationships and Related Transactions,
for information regarding compensation to the General Partner.)
Item 12. Security Ownership of Certain Beneficial Owners and Management
As of March 14, 1996, no director or officer of the General Partner owns
directly or beneficially any interest in the voting securities of the General
Partner.
As of March 14, 1996, no director or officer of the General Partner owns
directly or beneficially any of the Units issued by the Registrant.
As of March 14, 1996, no owner of limited partnership units beneficially owns
more than five percent (5%) of the outstanding limited partnership units issued
by the Registrant.
Item 13. Certain Relationships and Related Transactions
The Registrant has and will continue to have certain relationships with the
General Partner and its affiliates. However, there have been no direct financial
transactions between the Registrant and the directors or officers of the General
Partner.
Reference is made to Notes A, C and D to the financial statements of the
Registrant's 1995 Annual Report which is filed as an exhibit hereto, which
identify the related parties and discuss the services provided by these parties
and the amounts paid or payable for their services.
6
<PAGE>
<PAGE>
PART IV
<TABLE>
<CAPTION>
Page in
Annual Report
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
<S> <C> <C> <C>
(a) 1. Financial Statements and Independent Auditors' Report--Incorporated by
reference to the Registrant's 1995 Annual Report which is filed as an
exhibit hereto
Independent Auditors' Report 2
Financial Statements:
Statements of Financial Condition--December 31, 1995 and 1994 3
Statements of Operations--Three years ended December 31, 1995 4
Statements of Changes in Partners' Capital--Three years ended December
31, 1995 4
Notes to Financial Statements 5
2. Financial Statement Schedules and Independent Auditors' Report on
Schedules
All schedules have been omitted because they are not applicable or the
required information is included in the financial statements or the
notes thereto.
3. Exhibits
Description:
3.1 Agreement of Limited Partnership of the Registrant, dated as of May 25,
and 1988 as amended and restated as of July 12, 1988 (incorporated by
4.1 reference to Exhibit 3.1 and 4.1 of Registrant's Annual Report on Form
10-K for the period ended December 31, 1988)
4.2 Subscription Agreement (incorporated by reference to Exhibit 4.2 to the
Registrant's Registration Statement on Form S-1, File No. 33-22100)
4.3 Request for Redemption (incorporated by reference to Exhibit 4.3 to the
Registrant's Registration Statement on Form S-1, File No. 33-22100)
10.1 Escrow Agreement, dated July 14, 1988 among the Registrant, Seaport
Futures Management, Inc., Prudential-Bache Securities Inc. and Bankers
Trust Company (incorporated by reference to Exhibit 10.1 of
Registrant's Annual Report on Form 10-K for the period ended December
31, 1988)
10.2 Brokerage Agreement dated October 18, 1988 between the Registrant and
Prudential-Bache Securities Inc. (incorporated by reference to Exhibit
10.2 of Registrant's Annual Report on Form 10-K for the period ended
December 31, 1988)
10.3 Advisory Agreement dated June 1, 1988 among the Registrant, Seaport
Futures Management, Inc., and John W. Henry & Co., Inc. (incorporated
by reference to Exhibit 10.3 of Registrant's Annual Report on Form 10-K
for the period ended December 31, 1988)
10.4 Addendum to Advisory Agreement dated as of July 13, 1988 among the
Registrant, Seaport Futures Management, Inc., and John W. Henry & Co.,
Inc. (incorporated by reference to Exhibit 10.4 of Registrant's Annual
Report on Form 10-K for the period ended December 31, 1988)
</TABLE>
7
<PAGE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
10.5 Representation Agreement Concerning the Registration Statement and the
Prospectus, dated as of July 14, 1988 among the Registrant, Seaport
Futures Management, Inc., Prudential-Bache Securities Inc. and John W.
Henry & Co., Inc. (incorporated by reference to Exhibit 10.5 of
Registrant's Annual Report on Form 10-K for the period ended December
31, 1988)
10.6 Net Worth Agreement, dated as of July 14, 1988 between Seaport Futures
Management, Inc. and Prudential Securities Group Inc. (incorporated by
reference to Exhibit 10.6 of Registrant's Annual Report on Form 10-K
for the period ended December 31, 1988)
10.7 Secured Demand Note Collateral Agreement dated as of February 15, 1991
between Seaport Futures Management, Inc. and Prudential Securities
Group Inc. (incorporated by reference to Exhibit 10.7 of Registrant's
Annual Report on Form 10-K for the year ended December 31, 1991)
10.8 Amendment to Advisory Agreement as of June 1, 1988 among the
Registrant, Seaport Futures Management, Inc., and John W. Henry & Co.,
Inc. (incorporated by reference to Exhibit 10.8 of Registrant's Annual
Report on Form 10-K for the year ended December 31, 1993)
13 Registrant's 1995 Annual Report (with the exception of the information
and data incorporated by reference in Items 7 and 8 of this Annual
Report on Form 10-K, no other information or data appearing in the
Registrant's 1995 Annual Report is to be deemed filed as part of this
report) (filed herewith)
27. Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the last quarter of the period
covered by this report.
</TABLE>
8
<PAGE>
<PAGE>
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.
<TABLE>
<S> <C>
Prudential-Bache Diversified Futures Fund L.P.
By: Seaport Futures Management, Inc.
A Delaware corporation, General Partner
By: /s/ Steven Carlino Date: March 29, 1996
-----------------------------------------------------------------
Steven Carlino
Vice President and Chief Accounting Officer
</TABLE>
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 (with respect to the General Partner) and on
the dates indicated.
<TABLE>
<S> <C>
By: Seaport Futures Management, Inc.
A Delaware corporation, General Partner
By: /s/ James M. Kelso Date: March 29, 1996
-----------------------------------------------------------------
James M. Kelso
President and Director
By: /s/ Barbara J. Brooks Date: March 29, 1996
-----------------------------------------------------------------
Barbara J. Brooks
Treasurer and Chief Financial Officer
By: /s/ Steven Carlino Date: March 29, 1996
-----------------------------------------------------------------
Steven Carlino
Vice President
By: /s/ A. Laurence Norton, Jr. Date: March 29, 1996
-----------------------------------------------------------------
A. Laurence Norton, Jr.
Director
By: /s/ Guy S. Scarpaci Date: March 29, 1996
-----------------------------------------------------------------
Guy S. Scarpaci
Director
</TABLE>
9
<PAGE>
1995
- - -------------------------------------------------------------------------------
Prudential-Bache Annual
Diversified Futures Fund L.P. Report
<PAGE>
<PAGE>
PRUDENTIAL-BACHE DIVERSIFIED FUTURES FUND L.P.
LETTER TO THE LIMITED PARTNERS FOR THE YEAR ENDED DECEMBER 31, 1995
1
<PAGE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Partners of
Prudential-Bache Diversified Futures Fund L.P.:
We have audited the accompanying statements of financial condition of
Prudential-Bache Diversified Futures Fund L.P. as of December 31, 1995 and 1994,
and the related statements of operations and changes in partners' capital for
each of the three years in the period ended December 31, 1995. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Prudential-Bache Diversified Futures Fund
L.P. as of December 31, 1995 and 1994, and the results of its operations for
each of the three years in the period ended December 31, 1995 in conformity with
generally accepted accounting principles.
January 29, 1996
2
<PAGE>
<PAGE>
PRUDENTIAL-BACHE DIVERSIFIED FUTURES FUND L.P.
(a limited partnership)
STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
December 31,
-----------------------------
<S> <C> <C>
1995 1994
- - ----------------------------------------------------------------------------------------------------
ASSETS
Equity in commodity trading accounts:
Cash $ 3,783,451 $ 2,260,467
U.S. Treasury bills, at amortized cost 14,622,390 12,337,975
Net unrealized gain on open commodity positions 1,061,597 1,521,836
------------ ------------
Total assets $ 19,467,438 $ 16,120,278
------------ ------------
------------ ------------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Redemptions payable $ 425,077 $ 317,093
Management fees payable 64,703 53,515
Accrued expenses 56,340 65,803
------------ ------------
Total liabilities 546,120 436,411
------------ ------------
Commitments
Partners' capital
Limited partners (54,356 and 60,749 units outstanding) 17,745,997 14,806,429
General partner (3,600 units outstanding) 1,175,321 877,438
------------ ------------
Total partners' capital 18,921,318 15,683,867
------------ ------------
Total liabilities and partners' capital $ 19,467,438 $ 16,120,278
------------ ------------
------------ ------------
Net asset value per limited and general partnership unit
(``Units'') $ 326.48 $ 243.73
------------ ------------
------------ ------------
- - ----------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these statements
3
<PAGE>
<PAGE>
PRUDENTIAL-BACHE DIVERSIFIED FUTURES FUND L.P.
(a limited partnership)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year ended December 31,
-------------------------------------------
1995 1994 1993
<S> <C> <C> <C>
- - -----------------------------------------------------------------------------------------------------
REVENUES
Net realized gain on commodity transactions $ 7,694,647 $ 195,099 $ 6,760,365
Change in net unrealized gain on open commodity
positions (460,239) 215,941 654,157
Interest from U.S. Treasury bills 826,589 518,136 447,766
----------- ----------- -----------
8,060,997 929,176 7,862,288
----------- ----------- -----------
EXPENSES
Commissions 1,668,063 1,641,756 1,667,523
Management fees 763,562 727,169 763,902
Incentive fees 268,499 226,735 399,990
General and administrative 76,389 72,119 85,929
Amortization of organizational costs -- 494 5,694
----------- ----------- -----------
2,776,513 2,668,273 2,923,038
----------- ----------- -----------
Net income (loss) $ 5,284,484 $(1,739,097) $ 4,939,250
----------- ----------- -----------
----------- ----------- -----------
ALLOCATION OF NET INCOME (LOSS)
Limited partners $ 4,986,601 $(1,641,114) $ 4,709,119
----------- ----------- -----------
----------- ----------- -----------
General partner $ 297,883 $ (97,983) $ 230,131
----------- ----------- -----------
----------- ----------- -----------
NET INCOME (LOSS) PER WEIGHTED AVERAGE LIMITED AND
GENERAL PARTNERSHIP UNIT
Net income (loss) per weighted average limited and
general partnership unit $ 86.19 $ (25.65) $ 66.05
----------- ----------- -----------
----------- ----------- -----------
Weighted average number of limited and general
partnership units outstanding 61,314 67,805 74,780
----------- ----------- -----------
----------- ----------- -----------
- - -----------------------------------------------------------------------------------------------------
</TABLE>
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
<TABLE>
<CAPTION>
LIMITED GENERAL
UNITS PARTNERS PARTNER TOTAL
<S> <C> <C> <C> <C>
- - -----------------------------------------------------------------------------------------------------
Partners' capital--December 31, 1992 78,532 $15,437,461 $ 745,290 $16,182,751
Net income -- 4,709,119 230,131 4,939,250
Redemptions (8,059) (2,027,435) -- (2,027,435)
------ ----------- ---------- -----------
Partners' capital--December 31, 1993 70,473 18,119,145 975,421 19,094,566
Net loss -- (1,641,114) (97,983) (1,739,097)
Redemptions (6,124) (1,671,602) -- (1,671,602)
------ ----------- ---------- -----------
Partners' capital--December 31, 1994 64,349 14,806,429 877,438 15,683,867
Net income -- 4,986,601 297,883 5,284,484
Redemptions (6,393) (2,047,033) -- (2,047,033)
------ ----------- ---------- -----------
Partners' capital--December 31, 1995 57,956 $17,745,997 $1,175,321 $18,921,318
------ ----------- ---------- -----------
------ ----------- ---------- -----------
- - -----------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these statements
4
<PAGE>
<PAGE>
PRUDENTIAL-BACHE DIVERSIFIED FUTURES FUND L.P.
(a limited partnership)
NOTES TO FINANCIAL STATEMENTS
A. General
Prudential-Bache Diversified Futures Fund L.P. (the ``Partnership'') is a
Delaware limited partnership formed on May 25, 1988 which will terminate on
December 31, 2007 unless terminated sooner under the provisions of the Amended
and Restated Agreement of Limited Partnership (the ``Partnership Agreement'').
On October 19, 1988, the Partnership completed its offering, having raised
$30,107,800 from the sale of 297,468 units of limited partnership interest and
3,610 units of general partnership interest and commenced operations. The
Partnership was formed to engage in the speculative trading of commodity
futures, forward and options contracts. The general partner of the Partnership
is Seaport Futures Management, Inc. (the ``General Partner''), which is an
affiliate of Prudential Securities Incorporated (``PSI''), the Partnership's
commodity broker. Both the General Partner and PSI are wholly-owned subsidiaries
of Prudential Securities Group Inc. (``PSGI''). The General Partner is required
to maintain at least a 1% interest in the Partnership as long as it is acting as
the Partnership's general partner.
The General Partner generally maintains not less than seventy-five percent
(75%) of the Partnership's net asset value (``NAV'') in interest-bearing U.S.
Government obligations (primarily U.S. Treasury bills), a significant portion of
which is utilized for margin purposes for the Partnership's commodity trading
activities. The remaining twenty-five percent (25%) of NAV is held in cash in
the Partnership's commodity trading accounts.
All trading decisions for the Partnership since its inception have been made
by John W. Henry & Co., Inc. (the ``Trading Manager''). The Trading Manager was
initially allocated the Partnership's assets to be traded pursuant to five of
its trading programs as follows: 19% according to the Original Investment
Program, 21% according to the KT Diversified Program, 23% according to the KT
Financial and Metals Portfolios Program, 27% according to the JWH International
Foreign Exchange Program and 10% according to the World Financial Perspective
Program. The Trading Manager may alter the relative percentages only if the
General Partner does not object to any such alteration. No alterations have been
made to date; however, based on trading activity, the relative percentages
change from time to time as a result of the performance of the various trading
programs. The General Partner retains the authority to override trading
instructions that violate the Partnership's trading policies.
B. Summary of Significant Accounting Policies
Basis of accounting
The books and records of the Partnership are maintained on the accrual basis
of accounting in accordance with generally accepted accounting principles.
The preparation of financial statements in conformity with generally accepted
accounting principles requires the General Partner to make estimates and
assumptions that affect the reported amounts of liabilities and disclosure of
contingent liabilities at the date of the financial statements and the reported
amounts of expenses during the reporting period. Actual results could differ
from those estimates.
Commodity futures and forward transactions are reflected in the accompanying
Statements of Financial Condition on trade date. The difference between the
original contract amount and market value is reflected as net unrealized gain or
loss. The market value of each contract is based upon the closing quotation on
the exchange, clearing firm or bank on, or through, which the contract is
traded.
To the extent practicable, the Partnership invests a significant portion of
its NAV in U.S. Treasury bills to fulfill original margin requirements. U.S.
Treasury bills are carried at amortized cost, which approximates market value.
Interest on these obligations accrues for the benefit of the Partnership.
The weighted average number of limited and general partnership units
outstanding was computed for purposes of disclosing net income (loss) per
weighted average limited and general partnership unit. The weighted average
limited and general partnership units are equal to the number of Units
outstanding at year end, adjusted proportionately for Units redeemed based on
their respective time outstanding during such year.
5
<PAGE>
<PAGE>
The Partnership has elected not to provide a Statement of Cash Flows as
permitted by Statement of Financial Accounting Standards No. 102, ``Statement of
Cash Flows--Exemption of Certain Enterprises and Classification of Cash Flows
from Certain Securities Acquired for Resale.''
Certain balances from prior years have been reclassified to conform with the
1995 financial statement presentation.
Income taxes
The Partnership is not required to provide for, or pay, any Federal or state
income taxes. Income tax attributes that arise from its operations are passed
directly to the individual partners. The Partnership may be subject to other
state and local taxes in jurisdictions in which it operates.
Profit and loss allocations, distributions and redemptions
Net realized profits or losses for tax purposes are allocated first to
partners who redeem Units to the extent the amounts received on redemption are
greater than or less than the amounts paid for the redeemed Units by the
partners. Net realized profits or losses remaining after these allocations are
allocated to each partner in proportion to such partner's capital account at
year-end. Net income or loss for financial reporting purposes is allocated
quarterly to all partners on a pro rata basis based on each partner's number of
Units outstanding during the quarter.
Distributions (other than on redemptions of Units) are made at the sole
discretion of the General Partner on a pro rata basis in accordance with the
respective capital accounts of the partners. No distributions have been made
since inception.
The Partnership Agreement provides that a limited partner may redeem its
units as of the last business day of any full calendar quarter (beginning with
the end of the first full calendar quarter of the Partnership's operations,
which was March 31, 1989) at the then current NAV per Unit reduced by each
Unit's pro rata portion of unamortized organizational costs.
C. Costs, Fees and Expenses
Organizational costs
Costs incurred to organize the Partnership, including but not limited to
legal, accounting, registration fees and certain printing costs, are considered
deferred organizational costs. These costs were capitalized and amortized over a
60-month period ending in 1994.
Commissions
The General Partner, on behalf of the Partnership, entered into an agreement
with PSI to act as commodity broker for the Partnership. The Partnership pays
PSI commissions at a flat rate of 3/4 of 1% per month (a 9% annual rate) of the
Partnership's NAV as of the first day of each month.
Management and incentive fees
The Partnership pays the Trading Manager a monthly management fee equal to
1/3 of 1% (a 4% annual rate) of the Partnership's NAV as of the end of each
month. The Partnership also pays the Trading Manager a quarterly incentive fee
equal to 15% of the ``New High Net Trading Profits'' (as defined in the Advisory
Agreement between the Partnership, the General Partner and the Trading Manager).
General and administrative expenses
In addition to the costs, fees and expenses previously discussed, the
Partnership reimburses the General Partner and its affiliates for certain
Partnership operating expenses payable by, or allocable to, the Partnership. The
amount of reimbursement from the Partnership is limited by the provisions of the
Partnership Agreement. The Partnership also pays amounts directly to unrelated
parties for certain operating expenses.
D. Related Parties
Seaport Futures Management, Inc. (the ``General Partner'') and its affiliates
perform services for the Partnership which include, but are not limited to:
brokerage services, accounting and financial management, registrar, transfer and
assignment functions, investor communications, printing and other administrative
services. A portion of the general and administrative expenses of the
Partnership for the years ended December 31, 1995, 1994 and 1993 was borne by
PSI and its affiliates.
6
<PAGE>
<PAGE>
Costs and expenses charged to the Partnership for the years ended December
31, 1995, 1994 and 1993 were:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
----------------------------------------
Commissions $1,668,063 $1,641,756 $1,667,523
Printing 12,175 6,400 10,300
---------- ---------- ----------
$1,680,238 $1,648,156 $1,677,823
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
Expenses payable to the General Partner and its affiliates (which are
included in accrued expenses) as of December 31, 1995 and 1994 were $9,300 and
$13,680, respectively.
The Partnership maintains its trading and cash accounts at PSI. Approximately
75% of the NAV is invested in interest-bearing U.S. Government obligations
(primarily U.S. Treasury bills), a significant portion of which is utilized for
margin purposes for the Partnership's commodity trading activities.
When the Partnership engages in forward foreign currency transactions it
trades with PSI who simultaneously engages in back-to-back transactions with an
affiliate who, pursuant to the Partnership's prospectus, is obligated to charge
a competitive price.
E. Income Taxes
The following is a reconciliation of net income (loss) for financial
reporting purposes to net income (loss) for tax reporting purposes for the years
ended December 31, 1995, 1994 and 1993, respectively:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
-------------------------------------------
Net income (loss) per financial statements $ 5,284,484 $(1,739,097) $ 4,939,250
Change in net unrealized gain on non-regulated
commodity positions (157,188) (35,915) 31,046
----------- ----------- -----------
Tax basis net income (loss) $ 5,127,296 $(1,775,012) $ 4,970,296
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
The differences between the tax and book bases of partners' capital are
primarily attributable to the cumulative effect of the book to tax income
adjustments.
F. Credit and Market Risk
Since the Partnership's business is to trade futures, forward and options
contracts, its capital is at risk due to changes in the value of these contracts
(market risk) or the inability of counterparties to perform under the terms of
the contracts (credit risk).
Futures, forward and options contracts involve varying degrees of off-balance
sheet risk; and changes in the level of volatility of interest rates, foreign
currency exchange rates or the market values of the contracts (or commodities
underlying the contracts) frequently result in changes in the Partnership's
unrealized gain (loss) on open commodity positions reflected in the statements
of financial condition. The Partnership's exposure to market risk is influenced
by a number of factors including the relationships among the contracts held by
the Partnership as well as the liquidity of the markets in which the contracts
are traded.
Futures and options contracts are traded on organized exchanges and are thus
distinguished from forward contracts which are entered into privately by the
parties. The credit risks associated with futures and options contracts are
typically perceived to be less than those associated with forward contracts
because exchanges typically provide clearinghouse arrangements in which the
collective credit (subject to certain limitations) of the members of the
exchanges is pledged to support the financial integrity of the exchange. On the
other hand, the Partnership must rely solely on the credit of its broker (PSI)
with respect to forward transactions.
The General Partner attempts to minimize both credit and market risks by
requiring the Partnership's Trading Manager to abide by various trading
limitations and policies. The General Partner monitors compliance with these
trading limitations and policies which include, but are not limited to,
executing and clearing all trades with creditworthy counterparties (currently
PSI is the sole counterparty or broker); limiting the amount of margin or
premium required for any one commodity or all commodities combined; and
generally limiting transactions to contracts which are traded in sufficient
volume to permit the taking and liquidating of
7
<PAGE>
<PAGE>
positions. The General Partner may impose additional restrictions (through
modifications of such trading limitations and policies) upon the trading
activities of the Trading Manager as it, in good faith, deems to be in the best
interests of the Partnership.
PSI, when acting as the Partnership's futures commission merchant in
accepting orders for the purchase or sale of domestic futures and options
contracts, is required by Commodity Futures Trading Commission (``CFTC'')
regulations to separately account for and segregate as belonging to the
Partnership all assets of the Partnership relating to domestic futures and
options trading and is not to commingle such assets with other assets of PSI. At
December 31, 1995, such segregated assets totalled $10,874,252. Part 30.7 of the
CFTC regulations also requires PSI to secure assets of the Partnership related
to foreign futures trading which totalled $8,704,525 at December 31, 1995. There
are no segregation requirements for assets related to forward trading.
As of December 31, 1995, open forward contracts mature within three months,
but open futures contracts mature within one year.
At December 31, 1995 and 1994 gross contract amounts of open futures and
forward contracts are:
<TABLE>
<CAPTION>
December 31, December 31,
1995 1994
------------ ------------
<S> <C> <C>
Futures Currency Contracts:
Commitments to purchase $ 3,101,098 $ 656,650
Commitments to sell $ 3,918,450 $ 5,993,069
Forward Currency Contracts:
Commitments to purchase $ 14,753,643 $ 17,844,227
Commitments to sell $ 29,445,534 $ 43,860,082
Financial Futures Contracts:
Commitments to purchase $198,771,784 $ 99,127,187
Commitments to sell $ 9,245,157 $ 82,669,558
Commodities Futures Contracts:
Commitments to purchase $ 3,128,616 $ 2,490,153
Commitments to sell $ 4,522,406 $ 15,814,440
</TABLE>
Included in the gross forward contract amounts are offsetting commitments to
purchase and to sell the same currency on the same date in the future. The
commitments are economically offsetting but are not, as a technical matter,
offset in the forward market until the settlement date.
The gross contract amounts represent the Partnership's potential involvement
in a particular class of financial instrument (if it were to take or make
delivery on an underlying futures contract). The gross contract amounts
significantly exceed the future cash requirements as the Partnership intends to
close out open positions prior to settlement and thus is generally subject only
to the risk of loss arising from the change in the value of the contracts. As
such, the Partnership considers the ``fair value'' of its futures, forward
contracts to be the net unrealized gain or loss on the contracts (plus premiums
on options). Thus, the amount at risk associated with counterparty
nonperformance of all contracts is the net unrealized gain included in the
statements of financial condition. The market risk associated with the
Partnership's commitments to sell is unlimited since the Partnership's potential
involvement is to make delivery of an underlying commodity at the contract
price; therefore, it must repurchase the contract at prevailing market prices.
8
<PAGE>
<PAGE>
The following table represents the average fair value of futures and forward
contracts during the year ended December 31, 1995 and the related fair value of
such contracts as of December 31, 1995.
<TABLE>
<CAPTION>
For the year ended
December 31,1995 December 31, 1995
------------------------- -------------------------
Average Fair Value Fair Value
Assets Liabilities Assets Liabilities
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Futures Contracts:
Domestic exchanges
Commodities $ 308,399 $ 49,801 $ 304,613 $ 2,955
Financial 260,585 18,134 361,913 --
Currencies 155,603 38,316 10,305 7,450
Foreign exchanges
Commodities 4,447 3,702 7,120 1,250
Financial 464,058 38,782 507,205 6,565
Forward Contracts:
Currencies 1,419,864 810,141 203,352 314,691
---------- ----------- ---------- -----------
$2,612,956 $ 958,876 $1,394,508 $ 332,911
---------- ----------- ---------- -----------
---------- ----------- ---------- -----------
</TABLE>
The following table represents the net realized gains (losses) and the change
in unrealized gains/losses of futures and forward contracts during the year
ended December 31, 1995.
<TABLE>
<CAPTION>
Change in
Net Realized Unrealized
Gains (Losses) Gains/Losses Total
-------------- -------------------- ----------
<S> <C> <C> <C>
Futures Contracts:
Domestic exchanges
Commodities $ (277,439) $ (399,002) $ (676,441)
Financial 1,926,406 (120,769) 1,805,637
Currencies 1,451,704 18,403 1,470,107
Foreign exchanges
Commodities (26,812) 2,792 (24,020)
Financial 2,172,294 (103,645) 2,068,649
Forward Contracts:
Currencies 2,448,494 141,982 2,590,476
-------------- -------------------- ----------
$7,694,647 $ (460,239) $7,234,408
-------------- -------------------- ----------
-------------- -------------------- ----------
</TABLE>
9
<PAGE>
<PAGE>
PRUDENTIAL-BACHE DIVERSIFIED FUTURES FUND L.P.
(a limited partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
The Partnership commenced operations on October 19, 1988 with gross proceeds
of $30,107,800. After accounting for organizational and offering costs, the
Partnership's net proceeds were $29,387,470.
At December 31, 1995, 100% of the Partnership's total net assets were
allocated to commodities trading (the ``Net Asset Value''). A significant
portion of the Net Asset Value was held in U.S. Treasury bills (which
represented approximately 76% of the Net Asset Value prior to redemptions
payable) and cash, which are used as margin for the Partnership's trading in
commodities. Inasmuch as the sole business of the Partnership is to trade in
commodities, the Partnership continues to own such liquid assets to be used as
margin.
The percentage that the U.S. Treasury bills bear to the total net assets
varies each day, and from month to month, as the market values of commodity
interests change. The balance of the total net assets is held in cash. All
interest earned on the Partnership's interest-bearing funds is paid to the
Partnership.
The commodities contracts are subject to periods of illiquidity because of
market conditions, regulatory considerations and other reasons. For example,
commodity exchanges limit fluctuations in commodity futures contract 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
neither be taken nor liquidated unless traders are willing to effect trades at
or within the limit. Commodity futures prices have occasionally moved the daily
limit for several consecutive days with little or no trading. Such market
conditions could prevent the Partnership from promptly liquidating its commodity
futures positions.
Since the Partnership's business is to trade futures, forward and options
contracts, its capital is at risk due to changes in the value of these contracts
(market risk) or the inability of counterparties to perform under the terms of
the contracts (credit risk). The General Partner attempts to minimize these
risks by requiring the Partnership's Trading Manager to abide by various trading
limitations and policies. See Note F to the financial statements for a further
discussion on the credit and market risks associated with the Partnership's
futures, forward and options contracts.
The Partnership does not have, nor does it expect to have, any capital
assets.
Redemptions by limited partners recorded for the three years ended December
31, 1995, 1994 and 1993 were $2,047,033, $1,671,602 and $2,027,435,
respectively. Redemptions by limited partners recorded from commencement of
operations, October 19, 1988, through December 31, 1995 totalled $37,369,787.
Future redemptions will impact the amount of funds available for investment in
commodity contracts in subsequent periods.
Results of Operations
The Net Asset Value per Unit as of December 31, 1995 was $326.48, a increase
of 33.95% from the December 31, 1994 Net Asset Value per Unit of $243.73, which
was an decrease of 10.05% from the December 31, 1993 Net Asset Value per Unit of
$270.95.
During the year ended December 31, 1995, the Partnership outperformed the MAR
Fund/Pool Index. This index, which tracked the performance of 433 futures funds
for the year ended December 31, 1995 gained 9.66%. The trading environment in
1995 was particularly favorable and the Partnership capitalized on emerging
trends in the world's global markets. Currencies and interest rates experienced
sustained price movements throughout the year generating returns for the
Partnership.
Interest income from U.S. Treasury bills increased by approximately $308,000
during 1995 as compared to 1994 and approximately $70,000 during 1994 as
compared to 1993. These increases were due primarily to increasingly higher
interest rates in the respective years. Additionally, strong trading performance
in 1995 increased the Net Asset Value, including investments in U.S. Treasury
bills and the related interest income.
10
<PAGE>
<PAGE>
Commissions paid to PSI are calculated on the Partnership's Net Asset Value
on the first day of each month and, therefore, vary monthly according to trading
performance and redemptions. Accordingly, they must be compared to the
fluctuations in the monthly Net Asset Values. Commissions increased by
approximately $26,000 during 1995 as compared to 1994 primarily due to strong
trading performance in 1995. Commissions decreased by approximately $26,000
during 1994 as compared to 1993 primarily due to unfavorable trading performance
in the third and fourth quarters of 1994, as well as the effect of redemptions
at the monthly Net Asset Values.
All trading decisions for the Partnership are made by John W. Henry & Co.,
Inc. (the ``Trading Manager''). Management fees are calculated on the
Partnership's Net Asset Value as of the end of each month and, therefore, are
affected by trading performance and redemptions. Management fees increased by
approximately $36,000 during 1995 as compared to 1994 but decreased by
approximately $37,000 during 1994 as compared to 1993 primarily due to
fluctuations in monthly Net Asset Values as further discussed above.
Incentive fees are based on the New High Net Trading profits generated by the
Trading Manager, as defined in the Advisory Agreement between the Partnership,
the General Partner and the Trading Manager. The incentive fees paid in the
years ended December 31, 1995, 1994 and 1993 of approximately $268,000, $227,000
and $400,000 were the result of favorable trading performance during the first
six months of 1995 and 1994 and the last nine months of 1993.
General and administrative expenses include audit, tax and legal fees as well
as printing and postage costs. General and administrative expenses increased
approximately $4,000 in 1995 as compared to 1994 but decreased approximately
$14,000 in 1994 as compared to 1993 due to the timing of certain expense
accruals recorded in the respective years.
Inflation
Inflation has had no material impact on operations or on the financial
condition of the Partnership from inception through December 31, 1995.
11
<PAGE>
<PAGE>
- - --------------------------------------------------------------------------------
I hereby affirm that, to the best of my knowledge and belief, the information
contained herein relating to Prudential-Bache Diversified Futures Fund L.P. is
accurate and complete.
SEAPORT FUTURES
MANAGEMENT, INC.
(General Partner)
by: Barbara J. Brooks
Treasurer and Chief Financial Officer
- - --------------------------------------------------------------------------------
12
<PAGE>
<PAGE>
OTHER INFORMATION
The actual round-term equivalent of brokerage commissions paid per trade for
the year ended December 31, 1995 was $68.
The Partnership's Annual Report on Form 10-K as filed with the Securities and
Exchange Commission is available to limited partners without charge upon written
request to:
Prudential-Bache Diversified Futures Fund L.P.
P.O. Box 2016
Peck Slip Station
New York, NY 10272-2016
13
<PAGE>
<PAGE>
Prudential Securities Incorporated BULK RATE
Peck Slip Station U.S. POSTAGE
P.O. Box 2016 PAID
New York, NY 10272 Automatic Mail
PBDF1/171534
<PAGE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial
information extracted from the financial
statements for P-B Diversified Futures Fund LP
and is qualified in its entirety by reference
to such financial statements
</LEGEND>
<RESTATED>
<CIK> 0000833225
<NAME> P-B Diversified Futures Fund LP
<MULTIPLIER> 1
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> Jan-1-1995
<PERIOD-END> Dec-31-1995
<PERIOD-TYPE> 12-Mos
<CASH> 4,845,048
<SECURITIES> 14,622,390
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 19,467,438
<CURRENT-LIABILITIES> 546,120
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 18,921,318
<TOTAL-LIABILITY-AND-EQUITY> 19,467,438
<SALES> 0
<TOTAL-REVENUES> 8,060,997
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,776,513
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 5,284,484
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,284,484
<EPS-PRIMARY> 326.48
<EPS-DILUTED> 0
</TABLE>
