<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(X) QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
OR ( ) TRANSITION REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended September 30, 1995
Commission File Number 0-18467
SLH PERFORMANCE PARTNERS FUTURES FUND L.P.
(Exact name of registrant as specified in its charter)
Delaware 13-3486116
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
c/o Smith Barney Futures Management Inc.
390 Greenwich St. - 1st. Fl.
New York, New York 10013
(Address and Zip Code of principal executive offices)
(212) 723-5424
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
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SLH PERFORMANCE PARTNERS FUTURES FUND L.P.
FORM 10-Q
INDEX
Page
Number
------
PART I - Financial Information:
Item 1. Financial Statements:
Statements of Financial Condition
at September 30, 1995 and December 31,
1994 3
Statements of Income and Expenses
and Partners' Capital for the Three
and Nine Months ended September 30,
1995 and 1994 4
Notes to Financial Statements 5 - 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations 7 - 8
PART II - Other Information 9
2
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ITEM 1. FINANCIAL STATEMENTS
SLH PERFORMANCE PARTNERS FUTURES FUND L.P.
STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
ASSETS 1995 1994
------------- ------------
(Unaudited)
<S> <C> <C>
Equity in commodity futures trading account:
Cash and cash equivalents $3,445,529 $3,732,000
Net unrealized depreciation
on open futures contracts (34,221) (39,098)
---------- ----------
3,411,308 3,692,902
Interest receivable 11,997 14,579
---------- ----------
$3,423,305 $3,707,481
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accrued expenses:
Commissions $ 21,396 $ 23,172
Management fees 6,330 7,483
Other 25,833 31,163
Redemptions payable 148,864 190,148
---------- ----------
202,423 251,966
---------- ----------
Partners' Capital
General Partner, 50 Unit
equivalents outstanding in 1995
and 1994, respectively 67,666 58,688
Limited Partners, 2,330 and 2,894
Units of Limited Partnership Interest
outstanding in 1995 and 1994,
respectively 3,153,216 3,396,827
---------- ----------
3,220,882 3,455,515
---------- ----------
$3,423,305 $3,707,481
========== ==========
</TABLE>
See Notes to Financial Statements.
3
<PAGE> 4
SLH PERFORMANCE PARTNERS FUTURES FUND L.P.
STATEMENTS OF INCOME AND EXPENSES AND PARTNERS' CAPITAL
(UNAUDITED)
<TABLE>
<CAPTION>
THREE-MONTHS ENDED NINE-MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------------- ----------------------------
1995 1994 1995 1994
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Income:
Net gains (losses) on trading
of commodity futures:
Realized gains (losses) on
closed positions ($120,335) ($142,755) $ 866,900 $ 594,068
Change in unrealized gains/
losses on open positions (29,107) (258,271) 4,877 (382,138)
---------- ---------- ---------- ----------
(149,442) (401,026) 871,777 211,930
Less, brokerage commissions and
clearing fees ($997, $1,766,
$4,519 and $7,333,
respectively) (71,007) (87,529) (233,750) (321,574)
---------- ---------- ---------- ----------
Net realized and unrealized
gains (losses) (220,449) (488,555) 638,027 (109,644)
Interest income 38,075 39,577 120,854 109,571
---------- ---------- ---------- ----------
(182,374) (448,978) 758,881 (73)
---------- ---------- ---------- ----------
Expenses:
Management fees 19,251 25,092 56,874 84,631
Incentive fees 139,686 99,189
Other 12,211 14,158 33,400 38,050
---------- ---------- ---------- ----------
31,462 39,250 229,960 221,870
---------- ---------- ---------- ----------
Net income (loss) (213,836) (488,228) 528,921 (221,943)
Redemptions - Limited Partners (148,864) (170,173) (763,554) (1,125,398)
- General Partner (144,086) (144,086)
---------- ---------- ---------- ----------
Net decrease in Partners' capital (362,700) (802,487) (234,633) (1,491,427)
Partners' capital, beginning
of period 3,583,582 4,660,528 3,455,515 5,349,468
---------- ---------- ---------- ----------
Partners' capital, end
of period $3,220,882 $3,858,041 $3,220,882 $3,858,041
========== ========== ========== ==========
Net Asset Value per Unit
(2,380 and 3,106 Units
outstanding at September 30,
1995 and 1994, respectively) $ 1,353.31 $ 1,242.13 $ 1,353.31 $ 1,242.13
========== ========== ========== ==========
</TABLE>
See Notes to Financial Statements.
4
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SLH PERFORMANCE PARTNERS FUTURES FUND L.P.
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
(Unaudited)
General
SLH Performance Partners Futures Fund L.P. (the "Partnership") was
organized under the laws of the State of Delaware on October 3, 1988. The
Partnership engages in the speculative trading of commodities, forward
contracts, commodity options and commodity futures contracts, including futures
contracts on U.S. Treasury Bills and other financial instruments, foreign
currencies and stock indices. The Partnership commenced trading operations on
June 6, 1989.
Smith Barney Futures Management Inc. acts as the general partner (the
"General Partner") of the Partnership. Smith Barney Inc. ("SB"), an affiliate of
the General Partner, acts as commodity broker for the Partnership. All trading
decisions for the Partnership are being made by SJO, Inc. and Hyman Beck &
Company, Inc. (the "Advisors").
The accompanying financial statements are unaudited but, in the opinion
of management, include all adjustments (consisting only of normal recurring
adjustments) necessary for a fair presentation of the Partnership's financial
condition as of September 30, 1995 and the results of its operations for the
three and nine months ended September 30, 1995 and 1994. These financial
statements present the results of interim periods and do not include all
disclosures normally provided in annual financial statements. It is suggested
that these financial statements be read in conjunction with the financial
statements and notes included in the Partnership's annual report on Form 10-K
filed with the Securities and Exchange Commission for the year ended December
31, 1994.
Due to the nature of commodity trading, the results of operations for
the interim periods presented should not be considered indicative of the results
that may be expected for the entire year.
5
<PAGE> 6
SLH PERFORMANCE PARTNERS FUTURES FUND L.P.
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
(Continued)
Net Asset Value Per Unit
Changes in net asset value per Unit for the three and nine months ended
September 30, 1995 and 1994 were as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------------------- -------------------------------
1995 1994 1995 1994
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net realized and
unrealized gains(losses) $ (88.54) $ (145.45) $ 217.97 $ (39.52)
Interest income 15.29 11.78 44.76 30.23
Expenses (12.63) (11.67) (83.17) (61.33)
--------- --------- --------- ---------
Increase (decrease)
for period (85.88) (145.34) 179.56 (70.62)
Net Asset Value per
Unit, beginning of
period 1,439.19 1,387.47 1,173.75 1,312.75
--------- --------- --------- ---------
Net Asset Value per
Unit, end of period $1,353.31 $1,242.13 $1,353.31 $1,242.13
========= ========= ========= =========
</TABLE>
6
<PAGE> 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Liquidity and Capital Resources
The Partnership does not engage in the sale of goods or services. Its
only assets are its equity in its commodity futures trading account, net
unrealized appreciation (depreciation) on open futures contracts and interest
receivable. Because of the low margin deposits normally required in commodity
futures trading, relatively small price movements may result in substantial
losses to the Partnership. While substantial losses could lead to a decrease in
liquidity, no such losses occurred in the third quarter of 1995.
The Partnership's capital consists of the capital contributions of the
partners as increased or decreased by gains or losses on commodity futures
trading, expenses, interest income, redemptions of Units and distributions of
profits, if any.
For the nine months ended September 30, 1995, Partnership capital
decreased 6.8% from $3,455,515 to $3,220,882. This decrease was attributable to
the redemption of 564 limited partnership Units resulting in an outflow of
$763,554 which was partially offset by net income from operations of $528,921
for the nine months ended September 30, 1995. Future redemptions can impact the
amount of funds available for investments in commodity contract positions in
subsequent periods.
Results of Operations
During the Partnership's third quarter of 1995, the net asset value per
Unit decreased 6.0% from $1,439.19 to $1,353.31 as compared to the third quarter
of 1994 in which the net asset value per Unit decreased 10.5%. The Partnership
experienced a net trading loss before commissions and expenses in the third
quarter of 1995 of approximately $149,000. Losses were recognized in the trading
of commodity futures in interest rates, precious metals and agricultural
products. These losses were partially offset by gains realized in the trading of
commodity futures in foreign currencies and stock indices.
Commodity futures markets are highly volatile. Broad price fluctuations
and rapid inflation increase the risks involved in commodity trading, but also
increase the possibility of profit. The profitability of the Partnership depends
on the existence of major price trends and the ability of the Advisors to
identify correctly those price trends. These price trends are influenced by,
among other things, changing supply and demand relationships, weather,
governmental, agricultural, commercial and trade programs
7
<PAGE> 8
and policies, national and international political and economic events and
changes in interest rates. To the extent that market trends exist and the
Advisors are able to identify them, the Partnership expects to increase capital
through operations.
Interest income on 80% of the Partnership's daily average equity was
earned on the monthly average 13-week U.S. Treasury bill yield. Interest income
for the three and nine months ended September 30, 1995 decreased by
approximately $2,000 and increased by approximately $11,000, respectively, as
compared to the corresponding periods in 1994. The increase for the quarter
ended September 30, 1995 is a result of higher interest rates during 1995 as
compared to 1994. The effect of redemptions on the Partnership's equity
maintained in cash during the nine months ended September 30, 1995 resulted in a
decrease in interest income as compared to the corresponding period in 1994.
Brokerage commissions are calculated on the adjusted net asset value on
the last day of each month and, therefore, vary according to trading performance
and redemptions. Accordingly, they must be compared in relation to the
fluctuations in the monthly net asset values. Commissions and clearing fees for
the three and nine months ended September 30, 1995 decreased by approximately
$17,000 and $88,000, respectively, as compared to the corresponding periods in
1994.
Management fees are calculated as a percentage of the Partnership's net
asset value as of the end of each month and are affected by trading performance
and redemptions. Management fees for the three and nine months ended September
30, 1995 decreased by approximately $6,000 and $28,000, respectively, as
compared to the corresponding periods in 1994.
Incentive fees are based on the new appreciation generated by each
Advisor as defined in the advisory agreements between the Partnership, the
General Partner and each Advisor. No incentive fees were earned during the three
months ended September 30, 1995. Trading performance for the nine months ended
September 30, 1995 resulted in an increase in incentive fees of approximately
$40,000, as compared to 1994.
8
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PART II OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders -
None
Item 5. Other Information - None
Item 6. (a) Exhibits - None
(b) Reports on Form 8-K - None
9
<PAGE> 10
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
SLH PERFORMANCE PARTNERS FUTURES FUND L.P.
- ------------------------------------------
By: Smith Barney Futures Management Inc.
------------------------------------
(General Partner)
By: /s/ Alexander J. Sloane, President
------------------------------------
Alexander J. Sloane, President
Date: 11/10/95
-------------------
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By: Smith Barney Futures Management Inc.
------------------------------------
(General Partner)
By: /s/ Alexander J. Sloane, President
------------------------------------
Alexander J. Sloane, President
Date: 11/10/95
--------------------
By: /s/ Daniel A. Dantuono
------------------------------------
Daniel A. Dantuono
Chief Financial Officer and
Director
Date: 11/10/95
--------------------
10
<PAGE> 11
Exhibit Index
27 - Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JUL-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 3,445,529
<SECURITIES> (34,221)
<RECEIVABLES> 11,997
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,423,305
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,423,305
<CURRENT-LIABILITIES> 202,423
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 3,220,882
<TOTAL-LIABILITY-AND-EQUITY> 3,423,305
<SALES> 0
<TOTAL-REVENUES> (182,374)
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 31,462
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (213,836)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (213,836)
<EPS-PRIMARY> (85.88)
<EPS-DILUTED> 0
</TABLE>
