<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
---------------
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 33-22864
ML FUTURES INVESTMENTS L.P.
---------------------------
(Exact Name of Registrant as
specified in its charter)
Delaware 36-3590615
- ----------------------------------- ----------------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
c/o Merrill Lynch Investment Partners Inc.
Princeton Corporate Campus
800 Scudders Mill Road - Section 2G
Plainsboro, New Jersey 08536
----------------------------
(Address of principal executive offices)
(Zip Code)
609-282-6996
-------------------------------------------------------------
(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
----- -----
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ML FUTURES INVESTMENTS L.P.
---------------------------
(a Delaware limited partnership)
--------------------------------
STATEMENTS OF FINANCIAL CONDITION
---------------------------------
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
---------------- ----------------
<S> <C> <C>
ASSETS
Investment $ 19,285,879 $21,027,263
Receivable from investment 299,812 116,083
---------------- ----------------
TOTAL $ 19,585,691 $21,143,346
================ ================
LIABILITY AND PARTNERS' CAPITAL
Liability-Redemptions payable $ 299,812 $ 116,083
PARTNERS' CAPITAL:
General Partner (1,027 and 1,027 Units) 247,700 247,344
Limited Partners (78,930 and 86,275 Units) 19,038,179 20,779,919
---------------- ----------------
Total partners' capital 19,285,879 21,027,263
---------------- ----------------
TOTAL $ 19,585,691 $21,143,346
================ ================
NET ASSET VALUE PER UNIT
(Based on 79,957 and 87,302 Units outstanding) $ 241.20 $ 240.86
================ ================
</TABLE>
See notes to financial statements.
2
<PAGE>
ML FUTURES INVESTMENTS L.P.
---------------------------
(a Delaware limited partnership)
--------------------------------
STATEMENTS OF OPERATIONS
------------------------
<TABLE>
<CAPTION>
For the three For the three For the six For the six
months ended months ended months ended months ended
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
----------------- ----------------- --------------- ---------------
<S> <C> <C> <C> <C>
REVENUES:
Trading (loss) profits:
Realized $ - $ (756,703) $ - $ (226,528)
Change in unrealized - (208,285) - (579,135)
----------------- ----------------- --------------- ---------------
Total trading results - (964,988) - (805,663)
----------------- ----------------- --------------- ---------------
Interest income - 76,870 - 205,043
Income (loss) from investments 135,786 47,522 23,801 745,337
----------------- ----------------- --------------- ---------------
Total revenues 135,786 (840,596) 23,801 144,717
------------------------------------ --------------- ---------------
EXPENSES:
Brokerage commissions - 128,223 - 351,494
Administrative fees - 3,663 - 10,042
----------------- ----------------- --------------- ---------------
Total expenses - 131,886 - 361,536
----------------- ----------------- --------------- ---------------
NET INCOME (LOSS) $ 135,786 $ (972,482) $ 23,801 $ (216,819)
================= ================= =============== ===============
NET INCOME (LOSS) PER UNIT:
Weighted average number of units
outstanding 82,357 101,967 84,255 104,290
================= ================= =============== ===============
Weighted average net income (loss)
per Limited Partner
and General Partner Unit $ 1.65 $ (9.54) $ 0.28 $ (2.08)
================= ================= =============== ===============
</TABLE>
See notes to financial statements.
3
<PAGE>
ML FUTURES INVESTMENTS L.P.
---------------------------
(a Delaware limited partnership)
--------------------------------
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
------------------------------------------
For the six months ended June 30, 1999 and 1998
-----------------------------------------------
<TABLE>
<CAPTION>
Units Limited Partners General Partner Total
---------------- ----------------- ----------------- ----------------
<S> <C> <C> <C> <C>
PARTNERS' CAPITAL,
December 31, 1997 108,296 $ 23,983,033 $ 402,372 $ 24,385,405
Net loss -- (212,606) (4,213) (216,819)
Redemptions (10,219) (2,137,610) (169,251) (2,306,861)
---------------- ----------------- ----------------- ----------------
PARTNERS' CAPITAL,
June 30, 1998 98,077 $ 21,632,817 $ 228,908 $ 21,861,725
================ ================= ================= ================
PARTNERS' CAPITAL,
December 31, 1998 87,302 $ 20,779,919 $ 247,344 $ 21,027,263
Net income - 23,445 356 23,801
Redemptions (7,345) (1,765,185) - (1,765,185)
---------------- ----------------- ----------------- ----------------
PARTNERS' CAPITAL,
June 30, 1999 79,957 $ 19,038,179 $ 247,700 $ 19,285,879
================ ================= ================= ================
</TABLE>
See notes to financial statements.
4
<PAGE>
ML FUTURES INVESTMENTS L.P.
---------------------------
(A Delaware limited partnership)
--------------------------------
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These financial statements have been prepared without audit. In the opinion of
management, the financial statements contain all adjustments (consisting of
only normal recurring adjustments) necessary to present fairly the financial
position of ML Futures Investments L.P. (the "Partnership" or the "Fund") as
of June 30. 1999, and the results of its operations for the three and six
month periods ended June 30, 1999 and 1998. However, the operating results for
the interim periods may not be indicative of the results expected for the full
year.
Certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with generally accepted accounting
principles have been omitted. It is suggested that these financial statements
be read in conjunction with the financial statements and notes thereto
included in the Partnership's Annual Report on Form 10-K filed with the
Securities and Exchange Commission for the year ended December 31, 1998 (the
"Annual Report").
2. INVESTMENTS
As of June 30, 1999 and December 31, 1998, the Partnership had an investment in
MM LLC of $19,285,879 and $21,027,263, respectively.
Total revenues and fees with respect to the Fund's investment are set forth as
follows:
<TABLE>
<CAPTION>
For the six months Total Brokerage Administrative Profit Income from
ended June 30, 1999 Revenue Commissions Fees Shares Investment
-------------- ---------------- ----------------- ------------- ----------------------
<S> <C> <C> <C> <C> <C>
MM LLC $ 1,013,612 $ 894,713 $ 25,563 $ 69,535 $ 23,801
============== ================ ================= ============= ====================
For the six months Total Brokerage Administrative Profit Income from
ended June 30, 1998 Revenue Commissions Fees Shares Investments
-------------- ---------------- ----------------- ------------- ----------------------
Chesapeake LLC $ 870,260 $ 270,588 $ 7,731 $118,361 $ 473,580
MM LLC 234,031 161,203 4,606 47,939 20,283
SJO LLC 551,017 260,867 7,454 31,222 251,474
-------------- ---------------- ----------------- ------------- --------------------
Total $ 1,655,308 $ 692,658 $ 19,791 $197,522 $ 745,337
============== ================ ================= ============= ====================
For the three months Total Brokerage Administrative Profit Income (loss) from
ended June 30, 1999 Revenue Commissions Fees Shares Investment
-------------- ---------------- ----------------- ------------- ----------------------
MM LLC $ 621,776 $ 439,344 $ 12,553 $ 34,093 $ 135,786
============== ================ ================= ============= ====================
For the three months Total Brokerage Administrative Profit Income (Loss) from
ended June 30, 1998 Revenue Commissions Fees Shares Investments
-------------- ---------------- ----------------- ------------- ----------------------
Chesapeake LLC $ 45,880 $ 108,083 $ 3,088 $(13,332) $ (51,959)
MM LLC 234,031 161,203 4,606 47,939 20,283
SJO LLC 192,515 101,205 2,892 9,220 79,198
-------------- ---------------- ----------------- ------------- --------------------
Total $ 472,426 $ 370,491 $ 10,586 $ 43,827 $ 47,522
============== ================ ================= ============= ====================
</TABLE>
During the second quarter of 1998, the Partnership withdrew its investment in
Chesapeake LLC and SJO LLC.
5
<PAGE>
Condensed statements of financial condition and statements of operations for
MM LLC, Chesapeake LLC and SJO LLC are set forth as follows:
<TABLE>
<CAPTION>
MM LLC
June 30, 1999 December 31, 1998
-------------------------- ------------------------
<S> <C> <C>
Assets $ 111,887,450 $ 125,332,558
================== =================
Liabilities $ 2,489,338 $ 4,949,082
Members' Capital 109,398,112 120,383,476
------------------ -----------------
Total $ 111,887,450 $ 125,332,558
================== =================
<CAPTION>
MM LLC
For the three months For the three months For the six months For the six months
ended June 30, 1999 ended June 30, 1998 ended June 30, 1999 ended June 30, 1998
------------------- -------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
Revenues $ 3,525,206 $ 1,307,775 $ 5,756,093 $ 1,307,775
Expenses 2,686,982 1,187,403 5,492,766 1,187,403
----------------- ----------------- ---------------- ----------------
Net Income $ 838,224 $ 120,372 $ 263,327 $ 120,372
================= ================= ================ ================
<CAPTION>
Chesapeake LLC
For the three months ended For the six months ended
June 30, 1998 June 30, 1998
-------------------------- ------------------------
<S> <C> <C>
Revenues $ 95,555 $ 1,985,575
Expenses 299,321 903,412
------------------- ----------------
Net (Loss) Income $ (203,766) $ 1,082,163
=================== ================
<CAPTION>
SJO LLC
For the three months ended For the six months ended
June 30, 1998 June 30, 1998
-------------------------- ------------------------
<S> <C> <C>
Revenues $ 500,566 $ 1,472,849
Expenses 299,321 802,877
------------------ ----------------
Net Income $ 201,245 $ 669,972
================== ================
</TABLE>
6
<PAGE>
3. FAIR VALUE AND OFF-BALANCE SHEET RISK
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities" (the "Statement"), effective for fiscal
years beginning after June 15, 2000, however, the Fund has adopted the
Statement effective January 1, 1999. This Statement supercedes SFAS No. 119
("Disclosure about Derivative Financial Instruments and Fair Value of Financial
Instruments") and SFAS No. 105 ("Disclosure of information about Financial
Instruments with Off-Balance Sheet Risk and Financial Instruments with
Concentrations of Credit Risk") whereby disclosure of average aggregate fair
values and contract/notional values, respectively, of derivative financial
instruments is no longer required for an entity such as the Partnership which
carries its assets at fair value. Such Statement sets forth a much broader
definition of a derivative instrument. The General Partner does not believe
that the application of the provisions of such statement has a significant
effect on the financial statements.
SFAS No. 133 defines a derivative as a financial instrument or other contract
that has all three of the following characteristics (1) one or more underlyings,
notional amounts or payment provisions (2) requires no initial net investment or
a smaller initial net investment than would be required relative to changes in
market factors (3) terms require or permit net settlement. Generally,
derivatives include a future, forward, swap or option contract, or other
financial instrument with similar characteristics such as caps, floors and
collars.
Market Risk
Derivative instruments involve varying degrees of off-balance sheet market risk,
and changes in the level or volatility of interest rates, foreign currency
exchange rates or the market values of the financial instruments or commodities
underlying such derivative instruments frequently resulted in changes in the
Partnership's net unrealized profit (loss) on such derivative instruments as
reflected in the Statements of Financial Condition or, with respect to
Partnership assets invested in Trading LLCs and in MM LLC, the net unrealized
profit (loss) as reflected in the respective Statements of Financial Condition
of the Trading LLCs and MM LLC. The Partnership's exposure to market risk is
influenced by a number of factors, including the relationships among the
derivative instruments held by the Partnership, the Trading LLCs and currently
MM LLC, as well as the volatility and liquidity of the markets in which such
derivative instruments are traded.
The General Partner has procedures in place intended to control market risk
exposure, although there can be no assurance that they will, in fact, succeed in
doing so. These procedures focus primarily on monitoring the trading of the
Advisors selected from time to time by the Partnership or MM LLC, calculating
the Net Asset Value of their respective Partnership accounts and Trading LLC
accounts or currently MM LLC accounts as of the close of business on each day
and reviewing outstanding positions for over-concentrations both on an Advisor-
by-Advisor and on an overall Partnership basis. While the General Partner does
not itself intervene in the markets to hedge or diversify the Partnership's
market exposure, the General Partner may urge Advisors to reallocate positions,
or itself reallocate Partnership assets among Advisors (although typically only
as of the end of a month) in an attempt to avoid over-concentrations. However,
such interventions are unusual. Except in cases in which it appears that an
Advisor has begun to deviate from past practice or trading policies or to be
trading erratically, the General Partner's basic risk control procedures consist
simply of the ongoing process of Advisor monitoring and selection with the
market risk controls being applied by the Advisors themselves.
Credit Risk
The risks associated with exchange-traded contracts are typically perceived to
be less than those associated with over-the-counter (non-exchange-traded)
transactions, because exchanges typically (but not universally) provide
clearinghouse arrangements in which the collective credit (in some cases limited
in amount, in some cases not) of the members of the exchange is pledged to
support the financial integrity of the exchange. In over-the-counter
transactions, on the other hand, traders must rely solely on the credit of their
respective individual counterparties. Margins, which may be subject to loss in
the event of a default, are generally required in exchange trading, and
counterparties may require margin in the over-the-counter markets.
The credit risk associated with these instruments from counterparty
non-performance is the Partnership's net unrealized profit included on the
Statements of Financial Condition or, with respect to the Partnership assets
invested in Trading LLCs and in MM LLC, the net unrealized profit
included in the respective Statements of Financial Condition of the Trading
LLCs and MM LLC.
The Partnership has credit risk in respect of its counterparties and brokers,
but attempts to control this risk by dealing almost exclusively with Merrill
Lynch entities as counterparties and brokers.
7
<PAGE>
Item 2: Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations
---------------------
MONTH-END NET ASSET VALUE PER UNIT
Jan. Feb. Mar. Apr. May Jun.
- -------------------------------------------------------------------------
1998 $229.37 $231.94 $232.21 $219.61 $222.70 $222.90
- -------------------------------------------------------------------------
1999 $237.81 $240.67 $239.59 $242.21 $240.30 $241.20
- -------------------------------------------------------------------------
Performance Summary
January 1, 1998 to June 30, 1998
- --------------------------------
January 1, 1998 to March 31, 1998
The Fund's positions in the global interest rate markets were profitable during
the quarter. In Europe, an extended bond market rally continued despite an
environment of robust growth in the United States, Canada and the United
Kingdom, as well as a strong pick-up in growth in continental Europe.
Gold prices drifted sideways and lower as Asian demand continued to slow and
demand in the Middle East was affected by low oil prices. Initially buoyed on
concerns about a U.S.-led military strike against Iraq, crude oil fell to a nine
year low, as the globally warm winter, the return of Iraq as a producer and the
Asian economic crisis added to OPEC's supply glut problems.
Trading results in stock index markets were mixed, but profitable, despite a
strong first-quarter performance by the U.S. equity market as several
consecutive weekly gains were recorded with most market averages setting new
highs. Results in currency trading were also mixed, but unprofitable. In
particular, the Swiss franc weakened versus the U.S. dollar.
Agricultural commodity markets provided profitable trading results overall.
Live cattle and hog prices trended downward throughout the quarter. Cotton
prices moved mostly upward during the quarter, but prices dropped off sharply at
the end of March.
April 1, 1998 to June 30, 1998
As swings in the U.S. dollar and developments in Japan affected bond markets,
the Fund's interest rate trading during the quarter resulted in losses,
particularly in Eurodollar deposits and U.S. Treasury bonds. Early in the
quarter, Treasury trading was range-bound, as concern that the economy might be
overheating was balanced by the potential impact of the Asian recession.
Additionally, Australian bonds and bills saw a dramatic drop in prices in early
June, as dollar-bloc currencies remained under pressure versus the U.S. dollar
due to the Japanese/Asian crisis.
Metals and energy trading also resulted in losses. The depressed gold market
weakened further following news of a European Central Bank consensus that ten to
fifteen percent of reserves should be made up of gold bullion which was at the
low end of expectations. Despite production cuts initiated by OPEC at the end
of March, world oil supplies remained excessive and oil prices stood at
relatively low levels throughout the quarter.
Results in currency trading were unprofitable, as the Japanese yen weakened
during June to an eight-year low versus the U.S. dollar. Trading results in
stock index markets were also unprofitable, as the Asia-Pacific region's equity
markets weakened across the board. In particular, Hong Kong's Hang Seng index
trended downward during most of the quarter and traded at a three-year low.
Agricultural commodity trading produced losses. The U.S. soybean crop got off
to a good start which contributed to higher yield expectations and a more
burdensome supply outlook and soybean prices traded in a volatile pattern for
the second half of the quarter. Sugar futures maintained mostly a downtrend, as
no major buyers emerged to support the market. Similarly, coffee prices trended
downward, as good weather conditions in Central America and Mexico increased the
prospects of more output from these countries.
January 1, 1999 to June 30, 1999
- --------------------------------
January 1, 1999 to March 31, 1999
The Fund profited from trading in crude oil, heating oil, and unleaded gas. As
the year opened, the global oil balance continued to show signs of being
lopsided with estimated year-end 1998 inventories at their highest levels since
1984. During January, petroleum stocks rose by 21 million barrels compared with
a typical gain of 6 to 7 million barrels. Then, on March 23, OPEC ratified new
production cuts totaling 1.716 million barrels per day at its conference. These
new production cuts were scheduled to go into effect on April 1 and proved to be
harbingers of higher prices for crude.
8
<PAGE>
Agricultural trading was also profitable overall, as gains in live hogs
and live cattle offset losses in corn positions. Hog prices plummeted due to a
glut of hogs in the market. At the beginning of the quarter, the corn market
continued to struggle despite a stretch of solid export business. The market's
negative sentiment was deepened by ongoing favorable weather in South America
which continued through February, even though there was a sharp reduction in
Argentina's planted area. Lack of enthusiasm for new crop and less than
spectacular demand continued to depress the corn market throughout the quarter.
Interest rate trading proved profitable for the Fund as well, as losses
in Japanese 10-year government bonds were offset by gains in 10-year U.S.
Treasury notes and German 10-year bonds. Early in January, the yield on the
Japanese government 10-year bond increased to 1.8%, sharply above the record low
of 0.695% it reached on October 7, 1998. This was triggered by the Japanese
Trust Fund Bureau's decision to absorb a smaller share of future issues, leaving
the burden of financing future budget deficits to the private sector.
Losses in aluminum overshadowed slight gains in copper during the first
quarter. In January, burdensome warehouse stocks and questionable demand
prospects weighed on base metals as aluminum fell to a 5-year low and copper
fell to nearly an 11-year low. Major surpluses in both metals were expected,
keeping prices down, and there was no supply side response to weak demand and
lower prices. However, the end of March showed copper and aluminum leading a
surge in base metals as prices recovered from multi-year lows.
The Fund also suffered losses in currency trading during the quarter, as
losses in Japanese yen overpowered gains in Swiss francs. On a trade-weighted
basis, the Swiss franc ended the quarter at close to a seven-month low, mostly
as a result of the stronger U.S. dollar. In January, the yen had advanced by
nearly 35% against the dollar since early in August, and the Bank of Japan
lowered rates to keep the economy sufficiently liquid so as to allow fiscal
spending to restore some growth to the economy and to drive down the surging
yen.
Stock index trading was also unprofitable, as losses were sustained in
Hang Seng and CAC40 positions. Also of note, the Dow Jones Industrial Average
closed above the 10,000 mark for the first time ever at the end of March,
setting a record for the index.
April 1, 1999 to June 30, 1999
The Fund profited in interest rate trading from short positions in Euro dollars,
U.S. 10-year Treasury notes and U.S. Treasury bonds as the flight to quality in
the bond market reversed during the first half of 1999 and concerns about higher
interest rates continued to rattle the financial markets.
Stock indices trading also resulted in gains overall for the quarter, as
positions in the Hang Seng, Nikkei 225 and Topix Indices all generated profits
as the equity indices rallied worldwide in April and June.
Trading in the agricultural markets also proved profitable for the Fund. Gains
from live cattle and live hog positions offset losses from short corn positions.
Agricultural commodities, in particular corn, were weak almost across the board
as they are saddled with supply/demand imbalances. In the beginning of the
quarter, continued wetness across the corn belt led to early planting delays.
The energy sector was profitable as positions in crude oil offset losses from
short positions in natural gas and gas oil trading. The focus of attention in
the natural gas markets since the end of winter was the sharply lower than
year-ago storage injection activity. Crude oil prices rallied much higher and
faster than expected following last quarter's ratification of an OPEC/non-OPEC
agreement to cut production by over 2 million barrels per day. Natural gas
prices also rallied sharply over the quarter, reflecting, in part, growing
concerns about a decline in US natural gas production.
Currency trading resulted in losses for the Fund. Gains in Euro trading were
offset by losses sustained in British pound trading and from short positions in
the Canadian dollar.
9
<PAGE>
After suffering under the weight of lower commodity prices and the Asian
recession, the Canadian dollar underwent a significant rally in the first half
of 1999, moving up about 3 cents from the end of 1998.
In the metals sector, gains from short gold positions were overshadowed by
losses in copper and nickel trading. Throughout the first half of 1999, gold
prices were in a state of gradual erosion and in early June, prices hit their
lowest levels in over 20 years. Gold continued to show a lack of response to
political and military events such as Kosovo and also lost much of its role as a
monetary asset and flight to safety vehicle. The economic scenario for Asia,
Brazil, emerging market nations and Europe helped keep copper and other base
metals on the defensive as demand receded with virtually no supply side
response.
YEAR 2000 COMPLIANCE
As the Year 2000 approaches, Merrill Lynch has undertaken initiatives to address
the Year 2000 problem (the "Y2K problem"), as more fully described in the
Partnership's 1998 Form 10-K. The failure of Merrill Lynch's technology systems
relating to a Y2K problem would likely have a material adverse effect on the
company's business, results of operations, and financial condition. This effect
could include disruption of normal business transactions, such as the
settlement, execution, processing, and recording of trades in securities,
commodities, currencies, and other assets. The Y2K problem could also increase
Merrill Lynch's exposure to risk and legal liability and its need for liquidity.
The renovation phase of Merrill Lynch's Year 2000 system efforts, as described
in the Partnership's 1998 Form 10-K, was 100% completed as of June 30, 1999, and
production testing was 100% completed as of that date. In March and April 1999,
Merrill Lynch successfully participated in U.S. industrywide testing sponsored
by the Securities Industry Association. These tests involved an expanded number
of firms, transactions, and conditions compared with those previously conducted.
Merrill Lynch has participated in and continues to participate in numerous
industry tests throughout the world.
In light of the interdependency of the parties in or serving the financial
markets, there can be no assurance that all Y2K problems will be identified and
remedied on a timely basis or that all remediation will be successful. Public
uncertainty regarding successful remedation of the Y2K problem may cause a
reduction in activity in the financial markets. Disruption or suspension of
activity in the world's financial markets is also possible. In some non-U.S.
markets in which Merrill Lynch does business, the level of awareness and
remediation efforts relating to the Y2K problem are thought to be less advanced
than in the U.S. Management is unable at this point to ascertain whether all
significant third parties will successfully address the Y2K problem. Merrill
Lynch will continue to monitor third parties' Year 2000 readiness to determine
if additional or alternative measures are necessary. Contingency plans have been
established for all business units. However, the failure of exchanges, clearing
organizations, vendors, service providers, clients and counterparties,
regulators, or others to resolve their own processing issues in a timely manner
could have a material adverse effect on Merrill Lynch's business, results of
operations, and financial condition.
As of June 25, 1999, the total estimated expenditures of existing and
incremental resources for the Year 2000 compliance initiative are approximately
$520 million. This estimate includes $104 million of occupancy, communications,
and other related overhead expenditures, as Merrill Lynch is applying a fully
costed pricing methodology for this project. Of the total estimated
expenditures, approximately $80 million remains to be spent, primarily on
continued testing, contingency planning, and risk management. There can be no
assurance that the costs associated with remediation efforts will not exceed
those currently anticipated by Merrill Lynch, or that the possible failure of
such remediation efforts will not have a material adverse effect on Merrill
Lynch's business, results of operations, or financial condition.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not Applicable
10
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There are no pending proceedings to which the Partnership or the
General Partner is a party.
Item 2. Changes in Securities and Use of Proceeds
(a) None.
(b) None.
(c) None.
(d) 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.
---------
There are no exhibits required to be filed with this report.
(b) Reports on Form 8-K.
--------------------
There were no reports on Form 8-K filed during the first six months
of fiscal 1999.
11
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
ML FUTURES INVESTMENTS L.P.
By: MERRILL LYNCH INVESTMENT PARTNERS INC.
(General Partner)
Date: August 10, 1999 By /s/ JOHN R. FRAWLEY, JR.
------------------------
John R. Frawley, Jr.
Chairman, Chief Executive Officer,
President and Director
Date: August 10, 1999 By /s/ MICHAEL L. PUNGELLO
-----------------------
Michael L. Pungello
Vice President, Chief Financial Officer
and Treasurer
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> BD
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998
<PERIOD-START> JAN-01-1999 JAN-01-1998
<PERIOD-END> JUN-30-1999 JUN-30-1998
<CASH> 0 0
<RECEIVABLES> 19,585,691 21,143,346
<SECURITIES-RESALE> 0 0
<SECURITIES-BORROWED> 0 0
<INSTRUMENTS-OWNED> 0 0
<PP&E> 0 0
<TOTAL-ASSETS> 19,585,691 21,143,346
<SHORT-TERM> 0 0
<PAYABLES> 299,812 116,083
<REPOS-SOLD> 0 0
<SECURITIES-LOANED> 0 0
<INSTRUMENTS-SOLD> 0 0
<LONG-TERM> 0 0
0 0
0 0
<COMMON> 0 0
<OTHER-SE> 19,285,879 21,027,263
<TOTAL-LIABILITY-AND-EQUITY> 19,585,691 21,143,346
<TRADING-REVENUE> 0 (805,663)
<INTEREST-DIVIDENDS> 0 205,043
<COMMISSIONS> 0 361,536
<INVESTMENT-BANKING-REVENUES> 23,801 745,337
<FEE-REVENUE> 0 0
<INTEREST-EXPENSE> 0 0
<COMPENSATION> 0 0
<INCOME-PRETAX> 23,801 (216,819)
<INCOME-PRE-EXTRAORDINARY> 23,801 (216,819)
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 23,801 (216,819)
<EPS-BASIC> 0.28 (2.08)
<EPS-DILUTED> 0.28 (2.08)
</TABLE>
