<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Fiscal year ended December 31, 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)
Securities registered pursuant to Section 12(b) of the Act: None
--------
Securities registered pursuant to Section 12(g) of the Act: 60,000 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 X 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 / /
<PAGE> 2
PART I
Item 1. Business.
(a) General development of business. SLH Performance Partners
Futures Fund L.P. (the "Partnership") is a limited partnership organized on
October 3, 1988 under the Partnership Laws of the State of Delaware. The
Partnership engages in speculative trading of commodity interests, including
forward contracts on foreign currencies, commodity options and commodity
futures contracts including futures contracts on United States Treasuries and
other financial instruments, foreign currencies and stock indices. The
Partnership commenced trading on June 6, 1989.
A total of 60,000 Units of Limited Partnership Interest in the
Partnership (the "Units") were offered to the public. A Registration Statement
on Form S-1 relating to the public offering of 60,000 Units became effective on
December 29, 1988. Redemptions for the years ended December 31, 1995, 1994 and
1993 are reported in the Statement of Partners' Capital on page F-5 under "Item
8. Financial Statements and Supplementary Data."
The Partnership's trading of futures contracts on commodities is done
primarily on United States commodities exchanges and may, to a lesser extent,
be done on some foreign commodity exchanges. It engages in such trading
through a commodity brokerage account maintained with its commodity broker,
Smith Barney Inc. ("SB")
Smith Barney Futures Management Inc. acts as the general partner (the
"General Partner") of the Partnership. SB is an affiliate of the General
Partner.
2
<PAGE> 3
Under the Limited Partnership Agreement, the General Partner
administers the business and affairs of the Partnership. At December 31, 1995,
the General Partner, on behalf of the Partnership, had entered into
Management Agreements (the "Management Agreements") with SJO, Inc. and Hyman
Beck and Company Inc. ( the "Advisors") who make all commodity trading
decisions for the Partnership. The Advisors are not affiliated with the
General Partner or SB and are not responsible for the organization or operation
of the Partnership.
Pursuant to the terms of the Management Agreements, the Partnership is
obligated to pay the Advisors a monthly management fee ranging from 2% to 2.5%
per annum of the Partnership's Net Assets managed by the Advisors, as defined,
and (ii) an incentive fee, payable quarterly, equal to 20% of the Partnership's
Trading Profits, as defined. Trading Profits do not include interest paid to
the Partnership by SB under the terms of the Customer Agreement (the "Customer
Agreement").
Under the terms of the Customer Agreement entered into with SB, the
Partnership is obligated to pay SB a monthly brokerage fee equal to .625% of
month-end Trading Assets (7-1/2% per year) in lieu of brokerage commissions on
a per trade basis. SB pays a portion of such brokerage fees to certain of its
financial consultants, who are employees that sold Units in the initial
offering. Such financial consultants will receive a portion of the brokerage
fees deemed to be attributable to the Units sold by them. Brokerage fees will
be paid for the life of the Partnership,
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<PAGE> 4
although the rate at which such fees will be paid may be changed. The
Partnership will pay, or reimburse, SB for National Futures Association,
exchange, clearing and floor brokerage fees. These fees depend on the number
of trades entered into by the Advisors.
In addition, SB pays the Partnership interest on 80% of the average
daily equity maintained in cash in its account during each month at the rate of
the average noncompetitive yield of 13-week U.S. Treasury Bills as determined
at the weekly auctions thereof during the month.
(b) Financial information about industry segments. The Partnership's
business consists of only one segment, speculative trading of commodity futures
contracts. The Partnership does not engage in sales of goods or services. The
Partnership's net income (loss) from operations for the years ended December
31, 1995, 1994, 1993, 1992 and 1991 is set forth under "Item 6. Select
Financial Data." The Partnership's capital as of December 31, 1995 was
$3,178,534.
(c) Narrative description of business.
See Paragraphs (a) and (b) above.
(i) through (x) - Not applicable.
(xi) through (xii) - Not applicable.
(xiii) The Partnership has no employees.
(d) Financial Information About Foreign and Domestic Operations and
Export Sales. The Partnership does not engage in sales of goods or services,
and therefore this item is not applicable.
4
<PAGE> 5
Item 2. Description of Properties.
The Partnership does not own or lease any properties. The General
Partner operates out of facilities provided by its affiliate, SB.
Item 3. Legal Proceedings.
There are no pending legal proceedings to which the Partnership is a
party or to which any of its assets is subject. No material legal proceedings
affecting the Partnership were terminated during the fiscal year.
Item 4. Submission of Matters to a Vote of Security Holders.
There were no matters submitted to the security holders for a vote
during the last fiscal year covered by this report.
PART II
Item 5. Market for Registrant's Common Equity and Related Security
Holder Matters.
(a) Market Information. The Partnership has issued no stock. There
is no established public trading market for the Units of Limited
Partnership Interest.
(b) Holders. The number of holders of Units of Limited Partnership
Interest as of December 31, 1995 was 349.
(c) Distribution. The Partnership did not declare a distribution in
1995.
5
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Item 6. Select Financial Data.
Realized and unrealized trading gains (losses), realized and
unrealized gains (losses) on investment in commodity fund,
interest income, net income (loss) and increase (decrease) in
net asset value per Unit for the years ended December 31, 1995,
1994, 1993, 1992 and 1991 and total assets at December 31,
1995, 1994, 1993, 1992, and 1991 were as follows:
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
------------ ----------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Realized and unrealized
trading gains (losses)
net of brokerage commissions
and clearing fees of $298,137,
$401,015, $549,846, $650,877
and $1,132,215, respectively $ 709,968 $ (330,325) $ 414,381 $ (491,523) $ (297,568)
Net realized and
unrealized gains on
investments in commodity
fund 739,157 87,508
Interest Income 156,521 150,334 149,634 163,872 488,204
------------ ------------ ------------ ------------ ------------
$ 866,489 $ (179,991) $ 564,015 $ 411,506 $ 278,144
============ ============ ============ ============ ============
Net Income (loss) $ 605,734 $ (434,321) $ 282,283 $ 87,779 $ (374,450)
============ ============ ============ ============ ============
Increase (decrease) in net
asset value per unit $ 211.84 $ (139.00) $ 54.86 $ 15.31 $ (40.24)
============ ============ ============ ============ ============
Total assets $ 3,348,723 $ 3,707,481 $ 5,838,014 $ 7,451,302 $11,253,473
============ ============ ============ ============ ============
</TABLE>
6
<PAGE> 7
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
(a) Liquidity. The Partnership does not engage in sales of
goods or services. Its only assets are its commodity futures trading accounts,
consisting of cash and cash equivalents, 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. Such substantial losses could lead to a material decrease in
liquidity. To minimize this risk, the Partnership follows certain policies
including:
(1) Partnership funds are invested only in commodity contracts
which are traded in sufficient volume to permit, in the opinion of the
Advisors, ease of taking and liquidating positions.
(2) The Partnership diversifies its positions among various
commodities.
(3) The Partnership does not initiate additional positions in
any commodity if such additional positions would result in aggregate positions
for all commodities requiring as margin more that 66-2/3% of the Partnership's
net assets.
(4) The Partnership may occasionally accept delivery of a
commodity. Unless such delivery is disposed of promptly by retendering the
warehouse receipts representing the delivery to the appropriate clearing house,
the physical commodity position is fully hedged.
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<PAGE> 8
(5) The Partnership does not employ the trading technique
commonly known as "pyramiding", in which the speculator uses unrealized profits
on existing positions as margin for the purchase or sale of additional
positions in the same or related commodities.
(6) The Partnership does not utilize borrowings except
short-term borrowings if the Partnership takes delivery of any cash
commodities.
(7) The Advisors may, from time to time, employ trading
strategies such as spreads or straddles on behalf of the Partnership. The term
"spread" or "straddle" describes a commodity futures trading strategy involving
the simultaneous buying and selling of futures contracts on the same commodity
but involving different delivery dates or markets and in which the trader
expects to earn a profit from a widening or narrowing of the difference between
the prices of the two contracts.
The Partnership is party to financial instruments with off-balance
sheet risk, including derivative financial instruments and derivative commodity
instruments, in the normal course of its business. These financial instruments
include forwards, futures and options, whose value is based upon an underlying
asset, index, or reference rate, and generally represent future commitments to
exchange currencies or cash flows, or to purchase or sell other financial
instruments at specified terms at specified future dates. Each of these
instruments is subject to various risks similar to those relating to the
underlying financial instruments including market and credit risk. The General
Partner monitors and controls
8
<PAGE> 9
the Partnership's risk exposure on a daily basis through financial, credit and
risk management monitoring systems and, accordingly believes that it has
effective procedures for evaluating and limiting the credit and market risks to
which the Partnership is subject. (See also Item 8. "Financial Statement and
Supplementary Data.," for further information on financial instrument risk
included in the notes to financial statements.)
Other than the risks inherent in commodity futures trading, the
Partnership knows of no trends, demands, commitments, events or uncertainties
which will result in or which are reasonably likely to result in the
Partnership's liquidity increasing or decreasing in any material way. The
Limited Partnership Agreement provides that the General Partner may, at its
discretion, cause the Partnership to cease trading operations and liquidate all
open positions upon the first to occur of the following: (i) December 31, 2008;
(ii) a vote to dissolve the Partnership by limited partners owning more than
50% of the Units; (iii) assignment by the General Partner of all of its
interest in the Partnership or withdrawal, removal, bankruptcy or any other
event that causes the General Partner to cease to be a general partner under
the Delaware Revised Uniform Limited Partnership Act unless the Partnership is
continued as described in the Limited Partnership Agreement; (iv) a decline in
the Net Asset Value of a Unit as of the close of business on any business day
to less than $500; (v) a decline in the aggregate Net Assets of the Partnership
to less than $1,000,000; and (vi) the occurrence of any event which shall make
9
<PAGE> 10
it unlawful for the existence of the Partnership to be continued.
(b) Capital resources. (i) The Partnership has made no material
commitments for capital expenditures.
(ii) 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. Gains or losses on commodity futures trading
cannot be predicted. Market moves in commodities are dependent upon
fundamental and technical factors which the Partnership may or may not be able
to identify. Partnership expenses consist of, among other things, commissions,
management fees and incentive fees. The level of these expenses is dependent
upon the level of trading and the ability of the Advisors to identify and take
advantage of price movements in the commodity markets, in addition to the level
of Net Assets maintained. Furthermore, interest income is dependent upon
interest rates over which the Partnership has no control. No forecast can be
made as to the level of redemptions in any given period. For the year ended
December 31, 1995, 624 Units were redeemed for a total of $846,690 and the
General Partner redeemed 26 Unit equivalents totaling $36,025. For the year
ended December 31, 1994, 1,014 Units were redeemed for a total of $1,315,546
and the General Partner redeemed 117 Unit equivalents totaling $144,086. For
the year ended December 31, 1993, 1,231 Units were redeemed for a total of
$1,607,151.
(c) Results of operations. For the year ended December 31, 1995,
the net asset value per Unit increased 18.0% from $1,173.15
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<PAGE> 11
to $1,385.59. For the year ended December 31, 1994, the net asset value per
unit decreased 10.6% from $1,312.75 to $1,173.15. For the year ended December
31, 1993, the net asset value per Unit increased 4.4%, from $1,257.89 to
$1,312.75.
The Partnership experienced net trading gains of $1,008,105 before
commissions and expenses for the year encded December 31, 1995. Realized
trading gains of $852,203 were attributable to gains incurred in the trading of
commodity futures in interest rates, stock indices and currencies. These
realized gains were partially offset by realized losses in precious metals and
agricultural commodity futures.
The Partnership experienced net trading gains of $70,690 before
commissions and expenses for the year ended December 31, 1994. Realized
trading gains of $470,880 were attributable to gains incurred in financial,
precious metals, grains and oils and stock index commodity futures. These
realized gains were partially offset by realized losses experienced in the
trading of foods, agricultural and energy commodity futures.
The Partnership experienced net trading gains of $964,227
before commissions and expenses for the year ended December 31,1993. Realized
trading gains of $637,577 were attributable to trading of commodity futures in
financials, precious metals, and grains and oils. These realized gains were
partially offset by realized losses experienced in the trading of foods,
industrial and stock index commodity futures.
11
<PAGE> 12
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 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.
12
<PAGE> 13
Item 8. Financial Statements and Supplementary Data.
SLH PERFORMANCE PARTNERS FUTURES FUND L.P.
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
Report of Independent Accountants. F-2
Financial Statements:
Statements of Financial Condition at
December 31, 1995 and 1994. F-3
Statements of Income and Expenses for
the years ended December 31, 1995,
1994 and 1993. F-4
Statements of Partners' Capital for the
years ended December 31, 1995, 1994 and
1993. F-5
Notes to Financial Statements. F-6 - F-9
</TABLE>
F-1
CONTINUED
<PAGE> 14
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
SLH Performance Partners Futures Fund L.P.:
We have audited the accompanying statements of financial condition of SLH
PERFORMANCE PARTNERS FUTURES FUND L.P., (a Delaware Limited Partnership) as of
December 31, 1995 and 1994, and the related statements of income and expenses
and of partners' capital for the years ended December 31, 1995, 1994 and 1993.
These financial statements are the responsibility of the management of the
General Partner. 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 the management of the General Partner, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of SLH Performance Partners
Futures Fund L.P. as of December 31, 1995 and 1994, and the results of its
operations for the years ended December 31, 1995, 1994 and 1993, in conformity
with generally accepted accounting principles.
/s/ COOPERS & LYBRAND L.L.P.
Coopers & Lybrand L.L.P.
New York, New York
February 21, 1996
F-2
<PAGE> 15
SLH PERFORMANCE PARTNERS FUTURES FUND L.P.
STATEMENTS OF FINANCIAL CONDITION
DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
ASSETS:
Equity in commodity futures
trading account:
Cash and cash equivalents (Note 3b) $3,219,888 $3,732,000
Net unrealized appreciation
(depreciation) on open futures
contracts 116,804 (39,098)
---------- ----------
3,336,692 3,692,902
Interest receivable 12,031 14,579
---------- ----------
$3,348,723 $3,707,481
========== ==========
LIABILITIES AND PARTNERS' CAPITAL:
Liabilities:
Accrued expenses:
Commissions $20,929 $23,172
Management fees 6,217 7,483
Incentive fees 1,896
Other 21,986 31,163
Redemptions payable (Note 5) 119,161 190,148
---------- ----------
170,189 251,966
---------- ----------
Partners' capital (Notes 1, 5 and 6):
General Partner, 24 and 50 Unit
equivalents outstanding in 1995
and 1994, respectively 33,254 58,688
Limited Partners, 2,270 and 2,894
Units of Limited Partnership Interest
outstanding in 1995 and 1994,
respectively 3,145,280 3,396,827
---------- ----------
3,178,534 3,455,515
---------- ----------
$3,348,723 $3,707,481
========== ==========
</TABLE>
See notes to financial statements.
F-3
<PAGE> 16
SLH PERFORMANCE PARTNERS FUTURES FUND L.P.
STATEMENTS OF INCOME AND EXPENSES
FOR THE YEARS ENDED
DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Income:
Net gains (losses)
on trading of
commodity interests:
Realized gains on
closed positions $852,203 $470,880 $637,577
Change in unrealized
gains/losses
on open positions 155,902 (400,190) 326,650
---------- ---------- ----------
1,008,105 70,690 964,227
Less, Brokerage commissions
and clearing fees ($5,365,
$14,935 and $20,812,
respectively) (Note 3b) (298,137) (401,015) (549,846)
---------- ---------- ----------
Net realized and unrealized
gains (losses) 709,968 (330,325) 414,381
Interest income (Note 3b) 156,521 150,334 149,634
---------- ---------- ----------
866,489 (179,991) 564,015
---------- ---------- ----------
Expenses:
Management fees 75,214 107,797 143,166
Incentive fees (Note 3a) 141,581 99,189 93,477
Other expenses 43,960 47,344 45,089
---------- ---------- ----------
260,755 254,330 281,732
---------- ---------- ----------
Net income (loss) $605,734 $(434,321) $282,283
========== ========== ==========
Net income (loss) per Unit of
Limited Partnership Interest
and General Partner Unit
equivalent (Notes 1 and 6) $211.84 $(139.00) $54.86
========== ========== ==========
</TABLE>
See notes to financial statements.
F-4
<PAGE> 17
SLH PERFORMANCE PARTNERS FUTURES FUND L.P.
STATEMENTS OF PARTNERS' CAPITAL
FOR THE YEARS ENDED
DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
LIMITED GENERAL
PARTNERS PARTNER TOTAL
-------- ------- -----
<S> <C> <C> <C>
Partners' capital at
December 31, 1992 $6,464,269 $210,067 $6,674,336
Net income 273,120 9,163 282,283
Redemption of 1,231
Units of Limited
Partnership Interest (1,607,151) (1,607,151)
----------- --------- -----------
Partners' capital at
December 31, 1993 5,130,238 219,230 5,349,468
Net loss (417,865) (16,456) (434,321)
Redemption of 1,014
Units of Limited
Partnership Interest
and General Partner
redemption representing
117 Unit equivalents (1,315,546) (144,086) (1,459,632)
----------- --------- -----------
Partners' capital at
December 31, 1994 3,396,827 58,688 3,455,515
Net income 595,143 10,591 605,734
Redemption of 624
Units of Limited
Partnership Interest
and General Partner
redemption representing
26 Unit equivalents (846,690) (36,025) (882,715)
--------- --------- ---------
Partners' capital at
December 31, 1995 $3,145,280 $33,254 $3,178,534
========== ========= ==========
</TABLE>
See notes to financial statements.
F-5
<PAGE> 18
SLH PERFORMANCE PARTNERS
FUTURES FUND L.P.
NOTES TO FINANCIAL STATEMENTS
1. Partnership Organization:
SLH Performance Partners Futures Fund L.P., (the "Partnership") is a
limited partnership which was organized on October 3, 1988 under the
partnership laws of the State of Delaware and commenced trading
operations on June 6, 1989. The Partnership is engaged in the
speculative trading of commodity interests, including forward
contracts on foreign currencies, commodity options and commodity
futures contracts on U.S. Treasuries and certain other financial
instruments and foreign currencies. The commodity interests that are
traded by the Partnership are volatile and involve a high degree of
market risk. The Partnership was authorized to sell 60,000 Units of
Limited Partnership Interest ("Units") during the public offering
period of the Partnership.
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 (see Note 3b). The General Partner and each limited
partner share in the profits and losses of the Partnership in
proportion to the amount of partnership interest owned by each except
that no limited partner shall be liable for obligations of the
Partnership in excess of his initial capital contribution and profits,
if any, net of distributions.
The Partnership will be liquidated upon the first to occur of the
following: December 31, 2008; the net asset value per Unit decreases
to less than $500 as of the close of business on any business day; or
under certain other circumstances as defined in the Limited
Partnership Agreement.
2. Accounting Policies:
a. All commodity interests (including derivative financial
instruments and derivative commodity instruments) are used for
trading purposes. The commodity interests are recorded on
trade date and open contracts are recorded in the statement of
financial condition at market value for those commodity
interests for which market quotations are readily available or
at fair value on the last business day of the year.
Investments in commodity interests denominated in foreign
currency are translated into U.S. dollars at the exchange
rates prevailing on the last business day of the year.
Realized gain (loss) and changes in unrealized values on
commodity interests are recognized in the period in which the
contract is closed or the changes occur and are included in
net gains (losses) on trading of commodity interests.
b. Income taxes have not been provided as each partner is
individually liable for the taxes, if any, on his share of the
Partnership's income and expenses.
c. The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial
statements and the
F-6
<PAGE> 19
SLH PERFORMANCE PARTNERS
FUTURES FUND L.P.
NOTES TO FINANCIAL STATEMENTS
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from these estimates.
3. Agreements:
a. Management Agreement:
At December 31, 1995, the General Partner, on behalf of the
Partnership, had entered into Management Agreements with SJO,
Inc. and Hyman Beck & Company, Inc. (the "Advisors") which
provide that each Advisor has sole discretion in determining
the investment of the assets of the Partnership allocated to
such Advisor by the General Partner. As compensation for their
services, the Partnership is obligated to pay the Advisors a
management fee payable monthly ranging from 2% to 2.5% per
annum of the Net Assets, as defined, managed by each Advisor
and an incentive fee payable quarterly equal to 20% of Trading
Profits, as defined.
b. Customer Agreement
The Partnership has entered into a Customer Agreement which
was assigned to SB whereby SB provides services which include,
among other things, the execution of transactions for the
Partnership's account in accordance with orders placed by the
Advisors. The Partnership is obligated to pay brokerage
commissions to SB at .625% of month end Trading Assets per
month (7.5% per year) in lieu of per transaction fees
regardless of how many or how few trades are executed during
the month. A portion of this fee is paid to employees of SB
who have sold Units of the Partnership. This fee does not
include exchange, clearing, floor brokerage and NFA fees which
will be borne by the Partnership. All of the Partnership's
assets are deposited in the Partnership's account at SB. The
Partnership's cash is deposited by SB in segregated bank
accounts, as required by Commodity Futures Trading Commission
regulations. At December 31, 1995, the amount of cash held for
margin requirements was $505,136. SB will pay the Partnership
interest on 80% of the average daily equity in its account
during each month at the rate of the average non-competitive
yield of 13-week U.S. Treasury Bills as determined at the
weekly auctions thereof during the month. The Customer
Agreement may be terminated by either party.
4. Trading Activities:
The Partnership was formed for the purpose of trading contracts in a
variety of commodity interests, including derivative financial
instruments and derivative commodity instruments. The results of the
Partnership's trading activity are shown in the statement of income
and expenses.
F-7
<PAGE> 20
SLH PERFORMANCE PARTNERS
FUTURES FUND L.P.
NOTES TO FINANCIAL STATEMENTS
All of the commodity interests owned by the Partnership are held for
trading purposes. The fair value of these commodity interests,
including options thereon, at December 31, 1995 was $116,804 and the
average fair value during the year then ended, based on monthly
calculation, was $125,387.
5. Distributions and Redemptions:
Distributions of profits, if any, will be made at the sole discretion
of the General Partner; however, a limited partner may redeem all or
some of his Units at the Net Asset Value thereof as of the last day of
any calendar quarter on fifteen days written notice to the General
Partner, provided that no redemption may result in the limited partner
holding fewer than three Units after such redemption is effected.
6. Net Asset Value Per Unit:
Changes in the net asset value per Unit for the years ended December
31, 1995, 1994 and 1993 were as follows:
<TABLE>
<CAPTION>
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Net realized and
unrealized
gains (losses) $248.21 $(110.57) $81.26
Interest income 59.74 43.35 31.05
Expenses (96.11) (71.78) (57.45)
--------- --------- ---------
Increase (decrease)
for year 211.84 (139.00) 54.86
Net asset value per
Unit, beginning
of year 1,173.75 1,312.75 1,257.89
--------- --------- ---------
Net asset value
per Unit, end
of year $1,385.59 $1,173.75 $1,312.75
========= ========= =========
</TABLE>
7. Financial Instrument Risk:
The Partnership is party to financial instruments with off-balance
sheet risk, including derivative financial instruments and derivative
commodity instruments, in the normal course of its business. These
financial instruments include forwards, futures and options, whose
value is based upon an underlying asset, index, or reference rate, and
generally represent future commitments to exchange currencies or cash
flows, to purchase or sell other financial instruments at specific
terms at specified future dates, or, in the case of
F-8
<PAGE> 21
SLH PERFORMANCE PARTNERS
FUTURES FUND L.P.
NOTES TO FINANCIAL STATEMENTS
derivative commodity instruments, to have a reasonable possibility to
be settled in cash or with another financial instrument. These
instruments may be traded on an exchange or over-the-counter ("OTC").
Exchange traded instruments are standardized and include futures and
certain option contracts. OTC contracts are negotiated between
contracting parties and include forwards and certain options. Each of
these instruments is subject to various risks similar to those related
to the underlying financial instruments including market and credit
risk. In general, the risks associated with OTC contracts are greater
than those associated with exchange traded instruments because of the
greater risk of default by the counterparty to an OTC contract.
Market risk is the potential for changes in the value of the financial
instruments traded by the Partnership due to market changes, including
interest and foreign exchange rate movements and fluctuations in
commodity or security prices. Market risk is directly impacted by the
volatility and liquidity in the markets in which the related
underlying assets are traded.
Credit risk is the possibility that a loss may occur due to the
failure of a counterparty to perform according to the terms of a
contract. Credit risk with respect to exchange traded instruments is
reduced to the extent that an exchange or clearing organization acts
as a counterparty to the transactions. The Partnership's risk of loss
in the event of counterparty default is typically limited to the
amounts recognized in the statement of financial condition and not
represented by the contract or notional amounts of the instruments.
The Partnership has concentration risk because the sole counterparty
or broker with respect to the Partnership's assets is SB.
The notional or contractual amounts of these instruments, while not
recorded in the financial statements, reflect the extent of the
Partnership's involvement in these instruments. At December 31, 1995,
the notional or contractual amounts of the Partnership's commitment to
purchase and sell these instruments was $37,596,000 and $15,454,000,
respectively.
F-9
<PAGE> 22
Item 9. Changes in and Disagreements with Accountants on Accounting and
financial disclosure
During the last two fiscal years and any subsequent interim period, no
independent accountant who was engaged as the principal accountant to audit the
Partnership's financial statements has resigned or was dismissed.
PART III
Item 10. Directors and Executive Officers of the Registrant.
The Partnership has no officers or directors and its affairs are
managed by its General Partner, Smith Barney Futures Management Inc. Investment
decisions are made by the Advisors.
Item 11. Executive Compensation.
The Partnership has no directors or officers. Its affairs are managed
by Smith Barney Futures Management Inc., its General Partner, which receives
compensation for its services, as set forth under "Item 1. Business." SB, an
affiliate of the General Partner, is the commodity broker for the Partnership
and receives brokerage commissions for such services, as described under "Item
1. Business." For the year ended December 31, 1995, SB earned $298,137 in
brokerage commissions and clearing fees.
The Advisors manage the Partnership's assets and receive a monthly
management fee and a quarterly incentive fee, as described under "Item 1.
Business." and "Item 8. Financial Statements and Supplementary Data.", Note
3a. For the year ended December 31, 1995, the Advisors earned $75,214 in
management fees and $141,581 in incentive fees.
13
<PAGE> 23
Item 12. Security Ownership of Certain Beneficial Owners and
Management
(a). Security ownership of certain beneficial owners. The Partnership
knows of no person who beneficially owns more than 5% of the Units outstanding.
(b). Security ownership of management. Under the terms of the Limited
Partnership Agreement, the Partnership's affairs are managed by the General
Partner. The General Partner owns Units of general partnership interest
equivalent to 24 Units (1.0%) of Limited Partnership Interest.
(c). Changes in control. None.
Item 13. Certain Relationship and Related Transactions.
Smith Barney Inc. and Smith Barney Futures Management Inc. would be
considered promoters for purposes of item 404(d) of Regulation S-K. The
nature and the amounts of compensation each promoter will receive from the
Partnership are set forth under "Item 1. Business." and "Item 8. Financial
Statements and Supplementary Data.", Notes 3a and 3b and "Item 11. Executive
Compensation."
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K.
(a)(1) Financial Statements:
Statements of Financial Condition at December 31, 1995, and
1994.
Statements of Income and Expenses for the years ended
14
<PAGE> 24
December 31, 1995, 1994 and 1993.
Statements of Partners' Capital for the years ended
December 31, 1995, 1994 and 1993.
(2) Financial Statement Schedules: None.
(3) Exhibits:
3.1 - Limited Partnership Agreement (filed as Exhibit 3.1 to the
Registration Statement No.33-25255 and incorporated herein by
reference).
3.2 - Certificate of Limited Partnership of the Partnership as filed
on October 3, 1988 (filed as Exhibit 3.2 to the Registration
Statement No. 33-25255 and incorporated herein by reference).
10.1- Customer Agreement between the Partnership and Shearson Lehman
Hutton Inc. dated as of December 28, 1988 (previously
filed).
10.2- Escrow Agreement between the Partnership and European American
Bank (previously filed).
10.3- Management Agreement among the Partnership, Hayden Commodities
Corp. and Advisors dated as of December 28, 1988
(previously filed).
10.4- Letter dated May 31, 1990 from General Partner to Advisors
extending Management Agreements (filed as Exhibit 10.4 to Form
10-K for the fiscal year ended December 31, 1990 and
incorporated herein by reference).
10.5- Letter dated May 24, 1991 from General Partner to
15
<PAGE> 25
Advisors extending Management Agreement (filed as Exhibit 10.5
to Form 10-K for the fiscal year ended December 31, 1991 and
incorporated herein by reference).
10.6- Subscription Agreement dated July 31, 1991 among the
Partnership and the Moore Currency Fund, Ltd. (filed as
Exhibit 10.6 to Form 10-K for the fiscal year ended December
31, 1991 and incorporated herein by reference).
10.7- Letter dated November 20, 1992 from General Partner to MCMI
terminating the Management Agreement effective as of November
30, 1992 (filed as Exhibit 10.7 to Form 10-K for the fiscal
year ended December 31, 1992 and incorporated herein by
reference).
10.8- Letter dated November 20, 1992 from General Partner to Bacon
Investment Corp. revising the compensation structure effective
as of December 1, 1992 (filed as Exhibit 10.8 to Form 10-K for
the fiscal year ended December 31, 1992 and incorporated
herein by reference).
10.9- Request for Redemption from the Moore Currency Fund, Ltd.
dated December 14, 1992 (filed as Exhibit 10.9 to Form 10-K
for the fiscal year ended December 31, 1992 and incorporated
herein by reference).
10.10- Management Agreement among the Partnership, the General
Partner and SJO, Inc. dated December 1, 1992
16
<PAGE> 26
(filed as Exhibit 10.10 to Form 10-K for the fiscal year ended
December 31, 1992 and incorporated herein by reference).
10.11- Management Agreement among the Partnership, the General
Partner and Hyman Beck & Company, Inc. dated January 19, 1993
(filed as Exhibit 10.11 to Form 10-K for the fiscal year ended
December 31, 1993 and incorporated herein by reference).
10.12- Letter dated February 3, 1993 from the Moore Currency Fund,
Ltd. confirming the Partnership's Request for Redemption as of
December 31, 1992 (filed as Exhibit 10.12 to Form 10-K for the
fiscal year ended December 31, 1993 and incorporated herein
by reference).
10.13- Letter dated June 23, 1994 terminating Bacon Investment Corp.
as a trading advisor effective June 30, 1994 (filed as Exhibit
10.13 to Form 10-K for the fiscal year ended December 31, 1994
and incorporated herein by reference) .
10.14 Letter dated February 16, 1995 from General Partner to SJO,
Inc. and Hyman Beck and Company, Inc. extending Management
Agreements to June 30, 1995 (filed as Exhibit 10.14 to Form
10-K for the fiscal year ended December 31, 1994 and
incorporated herein by reference).
(b) Reports on 8-K: None Filed.
17
<PAGE> 27
Supplemental Information To Be Furnished With Reports Filed Pursuant
To Section 15(d) Of The Act by Registrants Which Have Not Registered Securities
Pursuant To Section 12 Of the Act.
Annual Report to Limited Partners
18
<PAGE> 28
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized.
SLH PERFORMANCE PARTNERS FUTURES FUND L.P.
- -------------------------------------------
(Registrant)
Date: March 29, 1996
By: Smith Barney Futures Management Inc.
(General Partner)
By: /s/ Alexander J. Sloane, Chief Executive Officer
------------------------------------------------
Alexander J. Sloane, Chief Executive Officer
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 indicated as of March 29, 1996.
/s/ Philip M. Waterman, Jr.
Philip M. Waterman, Jr.
Co-Chairman and Director
/s/ Jack H. Lehman III
Jack H. Lehman III
Co-Chairman and Director
/s/ Alexander J. Sloane
Alexander J. Sloane
President and Director
/s/ Steve J. Keltz
Steve J. Keltz
Director
/s/ David J. Vogel
David J. Vogel
Director
/s/ Daniel A. Dantuono
Daniel A. Dantuono
Chief Financial Officer
and Director
/s/ Daniel R. McAuliffe, Jr.
Daniel R. McAuliffe, Jr.
Director
/s/ Shelley Ullman
Shelley Ullman
Director
/s/ Michael Schaefer
Michael Schaefer
Director
19
<PAGE> 29
EXHIBIT INDEX
3.1 - Limited Partnership Agreement (filed as Exhibit 3.1 to the
Registration Statement No.33-25255 and incorporated herein by
reference).
3.2 - Certificate of Limited Partnership of the Partnership as filed
on October 3, 1988 (filed as Exhibit 3.2 to the Registration
Statement No. 33-25255 and incorporated herein by reference).
10.1- Customer Agreement between the Partnership and Shearson Lehman
Hutton Inc. dated as of December 28, 1988 (previously
filed).
10.2- Escrow Agreement between the Partnership and European American
Bank (previously filed).
10.3- Management Agreement among the Partnership, Hayden Commodities
Corp. and Advisors dated as of December 28, 1988
(previously filed).
10.4- Letter dated May 31, 1990 from General Partner to Advisors
extending Management Agreements (filed as Exhibit 10.4 to Form
10-K for the fiscal year ended December 31, 1990 and
incorporated herein by reference).
10.5- Letter dated May 24, 1991 from General Partner to
Advisors extending Management Agreement (filed as Exhibit 10.5
to Form 10-K for the fiscal year ended December 31, 1991 and
incorporated herein by reference).
<PAGE> 30
10.6- Subscription Agreement dated July 31, 1991 among the
Partnership and the Moore Currency Fund, Ltd. (filed as
Exhibit 10.6 to Form 10-K for the fiscal year ended December
31, 1991 and incorporated herein by reference).
10.7- Letter dated November 20, 1992 from General Partner to MCMI
terminating the Management Agreement effective as of November
30, 1992 (filed as Exhibit 10.7 to Form 10-K for the fiscal
year ended December 31, 1992 and incorporated herein by
reference).
10.8- Letter dated November 20, 1992 from General Partner to Bacon
Investment Corp. revising the compensation structure effective
as of December 1, 1992 (filed as Exhibit 10.8 to Form 10-K for
the fiscal year ended December 31, 1992 and incorporated
herein by reference).
10.9- Request for Redemption from the Moore Currency Fund, Ltd.
dated December 14, 1992 (filed as Exhibit 10.9 to Form 10-K
for the fiscal year ended December 31, 1992 and incorporated
herein by reference).
10.10- Management Agreement among the Partnership, the General
Partner and SJO, Inc. dated December 1, 1992
(filed as Exhibit 10.10 to Form 10-K for the fiscal year ended
December 31, 1992 and incorporated herein by reference).
<PAGE> 31
10.11- Management Agreement among the Partnership, the General
Partner and Hyman Beck & Company, Inc. dated January 19, 1993
(filed as Exhibit 10.11 to Form 10-K for the fiscal year ended
December 31, 1993 and incorporated herein by reference).
10.12- Letter dated February 3, 1993 from the Moore Currency Fund,
Ltd. confirming the Partnership's Request for Redemption as of
December 31, 1992 (filed as Exhibit 10.12 to Form 10-K for the
fiscal year ended December 31, 1993 and incorporated herein
by reference).
10.13- Letter dated June 23, 1994 terminating Bacon Investment Corp.
as a trading advisor effective June 30, 1994 (filed as Exhibit
10.13 to Form 10-K for the fiscal year ended December 31, 1994
and incorporated herein by reference) .
10.14 Letter dated February 16, 1995 from General Partner to SJO,
Inc. and Hyman Beck and Company, Inc. extending Management
Agreements to June 30, 1995 (filed as Exhibit 10.14 to Form
10-K for the fiscal year ended December 31, 1994 and
incorporated herein by reference).
27 Financial Data Schedule
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<ARTICLE> 5
<CIK> 0000841941
<NAME> SLH PERFORMANCE PARTNER FUTURES FUND L.P.
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 3,219,888
<SECURITIES> 116,804
<RECEIVABLES> 12,031
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,348,723
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,348,723
<CURRENT-LIABILITIES> 170,189
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 3,178,534
<TOTAL-LIABILITY-AND-EQUITY> 3,348,723
<SALES> 0
<TOTAL-REVENUES> 866,489
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 260,755
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 605,734
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 605,734
<EPS-PRIMARY> 211.84
<EPS-DILUTED> 0
</TABLE>
