<PAGE>
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: 0-19805
PRUDENTIAL-BACHE OPTIMAX FUTURES FUND, L.P.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 13-3577395
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
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
N/A
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last report
Indicate by check CK 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 __
<PAGE>
Part I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PRUDENTIAL-BACHE OPTIMAX FUTURES FUND, L.P.
(a limited partnership)
STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------
ASSETS
Equity in commodity trading accounts:
Cash $ 3,603,747 $ 3,691,861
U.S. Treasury bills, at amortized cost 12,139,890 12,336,668
Net unrealized gain on open commodity positions 647,123 584,528
----------- ------------
Total assets $16,390,760 $16,613,057
----------- ------------
----------- ------------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Redemptions payable $ 624,976 $ 230,441
Accrued expenses 71,783 70,377
Management fees payable 27,194 27,570
Incentive fees payable 43,388 --
Other transaction fees payable 2,829 1,260
----------- ------------
Total liabilities 770,170 329,648
----------- ------------
Commitments
Partners' capital
Limited partners (77,265.203 and 81,916.579 units outstanding) 15,464,276 16,120,466
General partner (781 and 828 units outstanding) 156,314 162,943
----------- ------------
Total partners' capital 15,620,590 16,283,409
----------- ------------
Total liabilities and partners' capital $16,390,760 $16,613,057
----------- ------------
----------- ------------
Net asset value per limited and general partnership unit ('Units') $ 200.15 $ 196.79
----------- ------------
----------- ------------
- ----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements.
</TABLE>
2
<PAGE>
PRUDENTIAL-BACHE OPTIMAX FUTURES FUND, L.P.
(a limited partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Six months ended Three months ended
June 30, June 30,
-------------------------- -------------------------
<S> <C> <C> <C> <C>
1999 1998 1999 1998
- -------------------------------------------------------------------------------------------------------
REVENUES
Net realized gain on commodity transactions $ 917,209 $ 3,163,429 $ 223,253 $1,185,765
Change in net unrealized gain on open
commodity positions 62,595 (1,240,478) 271,742 (760,191)
Interest from U.S. Treasury bills 264,119 310,852 131,558 149,267
---------- ----------- ---------- ----------
1,243,923 2,233,803 626,553 574,841
---------- ----------- ---------- ----------
EXPENSES
Commissions 653,567 643,148 326,567 319,223
Other transaction fees 22,485 46,022 12,865 28,388
Management fees 164,515 175,627 82,360 85,345
Incentive fees 59,653 411,998 43,388 162,588
General and administrative 68,679 68,373 31,154 20,594
---------- ----------- ---------- ----------
968,899 1,345,168 496,334 616,138
---------- ----------- ---------- ----------
Net income (loss) $ 275,024 $ 888,635 $ 130,219 $ (41,297)
---------- ----------- ---------- ----------
---------- ----------- ---------- ----------
ALLOCATION OF NET INCOME (LOSS)
Limited partners $ 272,272 $ 879,747 $ 128,916 $ (40,884)
---------- ----------- ---------- ----------
---------- ----------- ---------- ----------
General partner $ 2,752 $ 8,888 $ 1,303 $ (413)
---------- ----------- ---------- ----------
---------- ----------- ---------- ----------
NET INCOME (LOSS) PER WEIGHTED AVERAGE
LIMITED AND GENERAL PARTNERSHIP UNIT
Net income (loss) per weighted average
limited and general partnership unit $ 3.36 $ 9.65 $ 1.60 $ (.45)
---------- ----------- ---------- ----------
---------- ----------- ---------- ----------
Weighted average number of limited and
general partnership units outstanding 81,957 92,114 81,169 91,138
---------- ----------- ---------- ----------
---------- ----------- ---------- ----------
- -------------------------------------------------------------------------------------------------------
</TABLE>
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
(Unaudited)
<TABLE>
<CAPTION>
LIMITED GENERAL
UNITS PARTNERS PARTNER TOTAL
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
Partners' capital--December 31, 1998 82,744.579 $16,120,466 $162,943 $16,283,409
Net income -- 272,272 2,752 275,024
Redemptions (4,698.376) (928,462) (9,381 ) (937,843)
---------- ----------- -------- -----------
Partners' capital--June 30, 1999 78,046.203 $15,464,276 $156,314 $15,620,590
---------- ----------- -------- -----------
---------- ----------- -------- -----------
- ----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements.
</TABLE>
3
<PAGE>
PRUDENTIAL-BACHE OPTIMAX FUTURES FUND, L.P.
(a limited partnership)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999
(Unaudited)
A. General
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 Prudential-Bache OptiMax Futures Fund, L.P. (the 'Partnership') as
of June 30, 1999 and the results of its operations for the six and three months
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').
In accordance with the Agreement of Limited Partnership, if the Partnership's
net asset value declines below $10 million, the Partnership will dissolve.
New Accounting Guidance
In June 1999, the Financial Accounting Standards Board ('FASB') issued
Statement No. 137, Accounting for Derivative Instruments and Hedging
Activities--Deferral of the Effective Date of FASB Statement No. 133--an
amendment of FASB Statement No. 133, which delayed the effective date of FASB
Statement No. 133, Accounting for Derivative Instruments and Hedging Activities
('SFAS 133'). The Partnership does not believe the effect of adoption of SFAS
133, now required effective January 1, 2001, will be material.
B. 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 services and other
administrative services.
The costs incurred for these services for the six and three months ended June
30, 1999 and 1998 were:
<TABLE>
<CAPTION>
Six months ended Three months ended
June 30, June 30,
-------------------------- --------------------------
1999 1998 1999 1998
<S> <C> <C> <C> <C>
-------------------------- --------------------------
Commissions $ 653,567 $643,148 $ 326,567 $319,223
General and administrative 32,378 44,519 14,875 21,437
------------- -------- ------------- --------
$ 685,945 $687,667 $ 341,442 $340,660
------------- -------- ------------- --------
------------- -------- ------------- --------
</TABLE>
Expenses payable to the General Partner and its affiliates (which are
included in accrued expenses) were $42,418 and $15,295 as of June 30, 1999 and
December 31, 1998, respectively.
The Partnership's assets are maintained either in trading or cash accounts
with Prudential Securities Incorporated ('PSI'), the Partnership's commodity
broker, or for margin purposes, with the various exchanges on which the
Partnership is permitted to trade.
The Partnership, acting through its trading managers, executes
over-the-counter, spot, forward and/or option foreign exchange transactions with
PSI. PSI then engages in back-to-back trading with an affiliate,
Prudential-Bache Global Markets Inc. ('PBGM'). PBGM attempts to earn a profit on
such transactions. PBGM keeps its prices on foreign currency competitive with
other interbank currency trading desks. All over-the-counter currency
transactions are conducted between PSI and the Partnership pursuant to a line of
credit. PSI may require that collateral be posted against the marked-to-market
positions of the Partnership.
4
<PAGE>
C. 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 or 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 Partnership presents unrealized gains
and losses on open forward positions as a net amount in the statements of
financial condition because it has a master netting agreement with PSI.
The General Partner attempts to minimize both credit and market risks by
requiring the Partnership and its trading managers 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 positions. Additionally, pursuant
to the Advisory Agreements among the Partnership, the General Partner and each
trading manager, a trading manager will automatically be terminated if the net
asset value allocated to that trading manager declines by 33 1/3% since the
first day of any calendar year or since the initial allocation of assets to that
trading manager. Furthermore, the Agreement of Limited Partnership
provides that the Partnership will liquidate its positions, and eventually
dissolve, if the Partnership experiences a decline in the net asset value of 50%
since the commencement of trading activities. In each case, the decline in the
net asset value is after giving effect for distributions and redemptions. The
General Partner may impose additional restrictions (through modifications of
such trading limitations and policies) upon the trading activities of the
trading managers 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
June 30, 1999 such segregated assets totalled $11,096,099. Part 30.7 of the CFTC
regulations also requires PSI to secure assets of the Partnership related to
foreign futures and options trading, which totalled $5,326,484 at June 30, 1999.
There are no segregation requirements for assets related to forward trading.
As of June 30, 1999, all open futures and forward contracts mature within one
year.
5
<PAGE>
At June 30, 1999 and December 31, 1998, gross contract amounts of open
futures and forward contracts were:
<TABLE>
<CAPTION>
1999 1998
------------- ------------
<S> <C> <C>
Financial Futures Contracts:
Commitments to purchase $ 73,530,033 $45,547,184
Commitments to sell 261,659,480 50,274,885
Currency Futures Contracts:
Commitments to purchase 7,288,970 216,163
Commitments to sell 15,360,076 1,262,608
Currency Forward Contracts:
Commitments to purchase 17,014,119 7,750,478
Commitments to sell 21,143,962 7,482,181
Other Futures Contracts:
Commitments to purchase 5,895,234 138,101
Commitments to sell 3,592,716 8,197,840
</TABLE>
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 or forward 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
and forward contracts to be the net unrealized gain or loss on the contracts.
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
purchase commodities is limited to the gross contract amounts involved, while
the market risk associated with its 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.
At June 30, 1999 and December 31, 1998, the fair values of open futures and
forward contracts were:
<TABLE>
<CAPTION>
1999 1998
-------------------------- ------------------------
Assets Liabilities Assets Liabilities
---------- ----------- -------- -----------
<S> <C> <C> <C> <C>
Futures Contracts:
Domestic exchanges
Financial $ 212,652 $ 20,588 $ 3,400 $ 3,572
Currencies 197,673 10,428 20,106 3,388
Other 188,660 10,101 97,898 22,075
Foreign exchanges
Financial 463,104 78,350 644,508 3,568
Other 39,717 303,393 95,112 6,195
Forward Contracts:
Currencies 262,103 293,926 -- 237,698
---------- ----------- -------- -----------
$1,363,909 $ 716,786 $861,024 $ 276,496
---------- ----------- -------- -----------
---------- ----------- -------- -----------
</TABLE>
6
<PAGE>
The following table presents the average fair value of futures, forward and
options contracts during the six months ended June 30, 1999 and 1998,
respectively.
<TABLE>
<CAPTION>
1999 1998
-------------------------- --------------------------
Assets Liabilities Assets Liabilities
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Futures Contracts:
Domestic exchanges
Financial $ 48,250 $ 15,801 $ 98,886 $ 15,787
Currencies 349,524 15,174 256,498 37,079
Other 115,477 13,879 140,157 25,194
Foreign exchanges
Financial 359,472 54,497 451,627 58,393
Other 89,452 133,458 69,057 46,794
Forward Contracts:
Currencies 465,378 272,607 301,815 194,967
Other -- -- 18,118 24,821
Options Contracts:
Domestic exchanges
Financial -- -- 9,692 --
Currencies -- -- 5,896 --
Foreign exchanges
Financial -- -- 1,061 --
Other -- -- 2,072 --
---------- ----------- ---------- -----------
$1,427,553 $ 505,416 $1,354,879 $ 403,035
---------- ----------- ---------- -----------
---------- ----------- ---------- -----------
</TABLE>
The following table presents the average fair value of futures, forward and
options contracts during the three months ended June 30, 1999 and 1998,
respectively.
<TABLE>
<CAPTION>
1999 1998
-------------------------- --------------------------
Assets Liabilities Assets Liabilities
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Futures Contracts:
Domestic exchanges
Financial $ 77,162 $ 23,591 $ 67,797 $ 18,134
Currencies 550,494 16,847 311,587 52,854
Other 103,079 5,762 111,233 37,593
Foreign exchanges
Financial 261,903 55,379 345,794 73,404
Other 45,397 226,124 23,940 39,933
Forward Contracts:
Currencies 606,379 271,130 149,609 180,374
Other -- -- 13,355 43,229
Options Contracts:
Domestic exchanges
Financial -- -- 15,235 --
Currencies -- -- 2,844 --
Foreign exchanges
Financial -- -- 1,857 --
Other -- -- 3,626 --
---------- ----------- ---------- -----------
$1,644,414 $ 598,833 $1,046,877 $ 445,521
---------- ----------- ---------- -----------
---------- ----------- ---------- -----------
</TABLE>
7
<PAGE>
The following table presents trading revenues from futures, forward and
options contracts during the six and three months ended June 30, 1999 and 1998,
respectively.
<TABLE>
<CAPTION>
Six months ended June 30, Three months ended June 30,
------------------------------------ -------------------------------------
1999 1998 1999 1998
----------------- -------------- ------------------ --------------
<S> <C> <C> <C> <C>
Futures Contracts:
Domestic exchanges
Financial $ (117,674) $ (166,732) $(34,252) $ 2,783
Currencies 795,115 (45,894) 433,150 (106,949)
Other (21,273) 87,960 13,375 (68,392)
Foreign exchanges
Financial (458,415) 1,788,225 55,123 695,333
Other (355,250) 206,384 (385,139) 104,699
Forward Contracts:
Currencies 1,137,301 334,108 412,738 98,326
Other -- (111,484) -- (173,281)
Options Contracts:
Domestic exchanges
Financial -- (93,143) -- (78,909)
Currencies -- (66,612) -- (39,561)
Foreign exchanges
Financial -- (8,148) -- (8,148)
Other -- (1,713) -- (327)
----------------- -------------- ------------------ --------------
$ 979,804 $1,922,951 $494,995 $ 425,574
----------------- -------------- ------------------ --------------
----------------- -------------- ------------------ --------------
</TABLE>
8
<PAGE>
PRUDENTIAL-BACHE OPTIMAX FUTURES FUND, L.P.
(a limited partnership)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
The Partnership commenced operations on February 15, 1991 with gross proceeds
of $70,309,500. After accounting for organizational and offering expenses, the
Partnership's net proceeds were $68,609,503.
As of June 30, 1999, a significant portion of the Partnership's net assets
was held in U.S. Treasury bills (which represented approximately 75% of the net
assets 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 U.S. Treasury bills
bears to the net assets varies each day, and from month to month, as the market
value 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 Partnership's exposure to market risk is
influenced by a number of factors including the volatility of interest rates and
foreign currency exchange rates, the liquidity of the markets in which the
contracts are traded and the relationships among the contracts held. The
inherent uncertainty of the Partnership's speculative trading as well as the
development of drastic market occurrences could result in monthly losses
considerably beyond the Partnership's experience to date and could ultimately
lead to a loss of all or substantially all of investors' capital. The General
Partner attempts to minimize these risks by requiring the Partnership and its
trading managers to abide by various trading limitations and policies which
include limiting margin amounts, trading only in liquid markets and utilizing
stop loss provisions. See Note C to the financial statements for a further
discussion on the credit and market risks associated with the Partnership's
futures and forward contracts.
The Partnership does not have, nor does it expect to have, any capital
assets.
Redemptions by limited partners recorded for the six and three months ended
June 30, 1999 were $928,462 and $618,771, respectively. Redemptions by the
General Partner recorded for the six and three months ended June 30, 1999 were
$9,381 and $6,205, respectively. Redemptions by limited partners and the General
Partner from commencement of operations, February 15, 1991, through June 30,
1999 totalled $74,756,344 and $808,619, respectively. Future redemptions will
impact the amount of funds available for investment in commodity contracts in
subsequent periods.
In accordance with the Agreement of Limited Partnership, if the Partnership's
net asset value declines below $10 million, the Partnership will dissolve.
Results of Operations
The net asset value per Unit as of June 30, 1999 was $200.15, an increase of
1.71% from the December 31, 1998 value of $196.79.
Quarterly Market Overview
In the United States, as economic indicators strengthened and the Federal
Reserve Bank announced they would raise interest rates, the U.S. dollar rose
against most major currencies, especially European which
9
<PAGE>
were spurred by deteriorating confidence in the Euro. Throughout the second
quarter, several issues weighed on world markets including significant price
declines in global long-term interest bonds, the U.S. Federal Reserve's
tightening of monetary policy and an increased supply of corporate debt.
Furthermore, as the U.S. economy generated strength, investors feared possible
inflation. U.S. bond prices fell, followed by European bonds which were
depressed by rumors regarding Italy's retreat from the European Economic Union.
Global stock markets recorded gains over the quarter, supported by solid
corporate earnings and improved economies (especially Asian). In the commodity
markets, the energy sector rallied as OPEC announced production cuts and lower
inventories in oil and gasoline. A consistent tone prevailed in the agricultural
and soft commodity markets as favorable seasonal growing conditions continued to
weigh on prices.
Quarterly Partnership Performance
Currency sector positions led by the Swiss franc, Euro, and Deutsche mark
captured gains for the Partnership. The Swiss franc fell in value versus the
U.S. dollar after losing its safe haven attraction as the war in Kosovo ended,
and as the U.S. dollar gained strength when the Federal Reserve increased the
U.S. interest rate by 0.25%. Weakness in the Euro continued due to deteriorating
confidence in that currency and Italy's possible retraction from the European
Economic Union. Consequently, the European Central Bank has been rumored to be
considering an interest rate increase.
In the energy sector, trading in light crude oil and natural gas provided
profits. Crude oil products rallied as extremely hot U.S. weather drove utility
demand during June. The rally continued following statements by oil ministers
from Saudi Arabia and Mexico regarding the high degree of compliance with
current OPEC production cuts. Additionally, natural gas products experienced low
quarterly inventories.
Losses were incurred in the metal sector led by silver, copper, and aluminum.
Base metals rallied sharply following announcements that two major companies
would significantly cut copper output. If carried out, the estimated production
cuts would almost eliminate the estimated global copper supply surplus. Silver
experienced extreme volatility throughout the second quarter and failed to
recognize a trend. Additionally, aluminum rallied through April, until the
market backed off almost 50% of the bullish move in March. As of May 24, the
market corrected, and has since been trending higher.
Interest income is earned on the Partnership's investment in U.S. Treasury
bills and, therefore, varies monthly based on interest rates as well as the
effect of trading performance and redemptions on the level of funds available
for investment in U.S. Treasury bills. Despite a slight increase in the amount
of funds available for investment in 1999, interest income decreased by $47,000
and $18,000 for the six and three months ended June 30, 1999 as compared to the
same periods in 1998 as a result of declining interest rates.
Commissions are calculated on the net asset value on the first day of each
month and, therefore, vary due to trading performance and redemptions.
Commissions increased by $10,000 and $7,000 for the six and three months ended
June 30, 1999 as compared to the same periods in 1998 due to the effect of
positive trading performance since the latter part of 1998 on the monthly net
asset values, partially offset by redemptions.
Other transaction fees consist of National Futures Association, exchange and
clearing fees which are based on the number of trades the trading managers
execute as well as which exchange, clearing firm or bank on, or through, which
the contract is traded. Other transaction fees decreased by $24,000 and $16,000
for the six and three months ended June 30, 1999 as compared to the same periods
in 1998 due to decreased trading volume.
All trading decisions for the Partnership are currently being made by Eagle
Trading Systems, Inc. ('Eagle'), Robert M. Tamiso ('Tamiso') and Hyman Beck &
Company, Inc. ('Hyman Beck'). Management fees are calculated on the portion of
the net asset value allocated to each trading manager at the end of each month,
and, therefore, are affected by trading performance and redemptions. Management
fees decreased by $11,000 and $3,000 for the six and three months ended June 30,
1999 as compared to the same periods in 1998. These decreases were due to a
reduction in the management fee rate from a 3% annual rate to 2% on the portion
of the net assets that were reallocated from Willowbridge Associates, Inc. to
Tamiso during July 1998.
10
<PAGE>
Incentive fees are based on the New High Net Trading Profits generated by
each trading manager, as defined in the Advisory Agreements among the
Partnership, the General Partner and each trading manager. Incentive fees of
$60,000 and $43,000 were earned during the six and three months ended June 30,
1999 by Tamiso. During the six and three months ended June 30, 1998, Eagle
earned incentive fees of $386,000 and $157,000 while Tamiso earned incentive
fees of $26,000 and $6,000.
General and administrative expenses increased by $11,000 for the three months
ended June 30, 1999 as compared to the same period in 1998, but were comparable
over the respective six month periods. These expenses include reimbursements of
costs incurred by the General Partner on behalf of the Partnership, in addition
to accounting, audit, tax and legal fees as well as printing and postage costs
related to reports sent to limited partners.
New Accounting Guidance
In June 1999, the Financial Accounting Standards Board ('FASB') issued
Statement No. 137, Accounting for Derivative Instruments and Hedging
Activities--Deferral of the Effective Date of FASB Statement No. 133--an
amendment of FASB Statement No. 133, which delayed the effective date of FASB
Statement No. 133, Accounting for Derivative Instruments and Hedging Activities
('SFAS 133'). The Partnership does not believe the effect of adoption of SFAS
133, now required effective January 1, 2001, will be material.
Year 2000 Risk
A discussion of Year 2000 risk and its effect on the operations of the
Partnership is included in the Partnership's Annual Report.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information regarding quantitative and qualitative disclosures about market
risk is not required pursuant to Item 305(e) of Regulation S-K.
11
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings--There are no material legal proceedings pending by or
against the Registrant or the General Partner.
Item 2. Changes in Securities--None
Item 3. Defaults Upon Senior Securities--None
Item 4. Submission of Matters to a Vote of Security Holders--None
Item 5. Other Information-- None
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits
3.1 Agreement of Limited Partnership of the Partnership, dated as of
July 12, 1990 as amended as of October 3, 1990 (incorporated by
and reference to Exhibit A to the Registrant's Registration Statement
4.1 on Form S-1, File No. 33-36216)
4.2 Subscription Agreement (incorporated by reference to
Exhibit E to the Registrant's Registration Statement
on Form S-1, File No. 33-36216)
4.3 Request for Redemption (incorporated by reference to
Exhibit B to the Registrant's Registration Statement
on Form S-1, File No. 33-36216)
4.4 Request for Exchange (incorporated by reference to
Exhibit B to the Registrant's Registration Statement
on Form S-1, File No. 33-36216)
27.1 Financial Data Schedule (filed herewith)
(b) Reports on Form 8-K--None
12
<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.
PRUDENTIAL-BACHE OPTIMAX FUTURES FUND, L.P.
By: Seaport Futures Management, Inc.
A Delaware corporation, General Partner
By: /s/ Steven Carlino Date: August 13, 1999
----------------------------------------
Steven Carlino
Vice President and Treasurer
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial
information extracted from the financial
statements for Prudential-Bache OptiMax Futures
Fund, LP and is qualified in its entirety by
reference to such financial statements
</LEGEND>
<RESTATED>
<CIK> 0000866533
<NAME> Prudential-Bache OptiMax Futures Fund, LP
<MULTIPLIER> 1
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-START> Jan-1-1999
<PERIOD-END> Jun-30-1999
<PERIOD-TYPE> 6-Mos
<CASH> 3,603,747
<SECURITIES> 12,787,013
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 16,390,760
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 16,390,760
<CURRENT-LIABILITIES> 770,170
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 15,620,590
<TOTAL-LIABILITY-AND-EQUITY> 16,390,760
<SALES> 0
<TOTAL-REVENUES> 1,243,923
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 968,899
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 275,024
<EPS-BASIC> 3.36
<EPS-DILUTED> 0
</TABLE>
