<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 March 31, 1996
Commission File Number 0-21588
SMITH BARNEY INTERNATIONAL ADVISORS CURRENCY FUND L.P.
(Exact name of registrant as specified in its charter)
New York 13-3616914
(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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SMITH BARNEY INTERNATIONAL ADVISORS CURRENCY FUND
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
Page
Number
------
PART I - Financial Information:
<S> <C>
Item 1. Financial Statements:
Statements of Financial Condition at
March 31, 1996 and December 31, 1995 3
Statements of Income and Expenses and
Partners' Capital for the Three Months
ended March 31, 1996 and 1995 4
Notes to Financial Statements 5 - 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations 7 - 9
PART II - Other Information 10
</TABLE>
2
<PAGE> 3
PART I
Item 1. Financial Statements
SMITH BARNEY INTERNATIONAL ADVISORS CURRENCY FUND L.P.
STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
ASSETS ----------- -----------
(Unaudited)
<S> <C> <C>
Equity in commodity futures trading account:
Cash and cash equivalents $ 3,934,267 $ 6,912,939
Net unrealized appreciation (depreciation)
on open futures contracts 95,503 (22,990)
----------- -----------
4,029,770 6,889,949
Interest receivable 14,110 25,911
Other assets 19,853
----------- -----------
$ 4,043,880 $ 6,935,713
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accrued expenses:
Commissions $ 23,589 $ 40,342
Other 58,990 44,133
Redemptions payable 263,535 2,513,653
Due to Smith Barney 39,194
----------- -----------
Partners' Capital 346,114 2,637,322
----------- -----------
General Partner,
8,000.2096 Unit equivalents
outstanding in 1996 and 1995 76,002 74,402
Limited Partners, 381,154.7197 and
454,095.3092 Units of Limited Partnership
Interest outstanding in 1996 and 1995,
respectively 3,621,764 4,223,989
----------- -----------
3,697,766 4,298,391
----------- -----------
$ 4,043,880 $ 6,935,713
=========== ===========
</TABLE>
See Notes to Financial Statements
3
<PAGE> 4
SMITH BARNEY INTERNATIONAL ADVISORS CURRENCY FUND L.P.
STATEMENTS OF INCOME AND EXPENSES AND PARTNERS' CAPITAL
(UNAUDITED)
<TABLE>
<CAPTION>
THREE-MONTHS THREE-MONTHS
ENDED ENDED
MARCH 31, MARCH 31,
1996 1995
------------ ------------
<S> <C> <C>
Net gains on trading of
commodity futures:
Realized gains on closed positions $ 34,302 $ 512,722
Change in unrealized gains/losses on
open positions 118,493 (220,664)
------------ -------------
152,795 292,058
Less, brokerage commissions and clearing
fees ($582 and $5,555, respectively) (74,959) (218,940)
------------ ------------
Net realized and unrealized gains 77,836 73,118
Interest income 42,935 140,649
------------ ------------
120,771 213,767
------------ ------------
Expenses:
Organization expense and filing fees 19,954 47,271
Other 16,219 32,430
Incentive fees 39,890
------------ ------------
36,173 119,591
------------ ------------
Net income 84,598 94,176
Partners' capital, beginning of period 4,298,391 11,861,869
Sale of Additional Limited Partnership Interest 24,500
Redemptions of Limited Partnership Interest (685,223) (1,081,089)
Redemptions of General Partnership Interest (4,400)
------------ ------------
Partners' capital, end of period $ 3,697,766 $ 10,895,056
============ ============
Net asset value per Unit
(389,154.9293 and 1,103,080.7701 Units
outstanding at March 31, 1996 and
1995, respectively) $ 9.50 $ 9.88
============ ============
Net income (loss) per Unit of Limited
Partnership Interest and General
Partnership Unit equivalent $ .20 $ .09
============ ============
</TABLE>
See Notes to Financial Statements.
4
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SMITH BARNEY INTERNATIONAL ADVISORS CURRENCY FUND L.P.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996
(UNAUDITED)
General
Smith Barney International Advisors Currency Fund L.P., (the
"Partnership") is a limited partnership which was organized on May 29, 1991
under the partnership laws of the State of New York to engage in the speculative
trading of commodity interests, including forward contracts, commodity options
and commodity futures contracts on foreign currencies. The commodity interests
that are traded by the Partnership are volatile and involve a high degree of
market risk. The Partnership commenced trading on March 12, 1992.
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 made by Friedberg Commodity Management Inc.
and Trendview Management Inc. (collectively, the "Advisors"). Commodity Monitors
Inc. and Gill Capital Management were terminated as Advisors effective January
2, 1996. Trendview Capital Management was added as an Advisor on the same date.
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 at March 31, 1996 and the results of its operations for the
three months ended March 31, 1996 and 1995. 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, 1995.
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
Smith Barney International Advisors Currency Fund L.P.
Notes to Financial Statements
March 31, 1996
(Continued)
Net Asset Value Per Unit
Changes in net asset value per Unit for the three months ended March 31, 1996
and 1995 were as follows:
<TABLE>
<CAPTION>
THREE-MONTHS ENDED
MARCH 31,
------------------------
1996 1995
-------- --------
<S> <C> <C>
Net realized and unrealized
gains $ .18 $ .07
Interest income .10 .12
Expenses (.08) (.10)
-------- --------
Increase for period .20 .09
Net Asset Value per Unit,
beginning of period 9.30 9.79
-------- --------
Net Asset Value per Unit,
end of period $ 9.50 $ 9.88
======== ========
</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, consisting
of cash and cash equivalents, net unrealized appreciation (depreciation) on open
futures contracts, deferred organization expense 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 first quarter of 1996.
The Partnership engages in the trading of forward contracts in foreign
currencies. In this connection, the Partnership contracts with SB as the
counterparty to take future delivery of a particular foreign currency. In a
forward transaction, cash settlement does not occur until the agreed upon value
date of the transaction. The Partnership's credit risk 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. At March 31, 1996 the net unrealized appreciation
for off-exchange traded forward currency contracts was approximately $28,000.
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 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.
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 and additions of Units and
distributions of profits, if any.
7
<PAGE> 8
For the three months ended March 31, 1996, Partnership capital
decreased 15.9% from $4,298,391 to $3,697,766. This decrease was attributable to
the redemption of 72,940.5895 Units totaling $685,223 which was partially offset
by a net gain from operations of $84,598 for the three months ended March 31,
1996. 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 first quarter of 1996, the net asset value per
Unit increased 2.2% from $9.30 to $9.50, as compared to a increase of .9% in the
first quarter of 1995. The Partnership experienced a net trading gain before
commissions and expenses in the first quarter of 1996 of $152,795. These gains
were primarily attributable to the trading of major and minor forward currency
contracts and were partially offset by losses realized in the trading of exotic
currencies. The Partnership experienced a net trading gain before commissions
and expenses in the first quarter of 1995 of $292,058. Gains were recognized in
the trading of major and minor currencies and were partially offset by losses
realized in exotic currencies.
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.
Interest income on 85% of the Partnership's daily equity maintained in
cash was earned on the monthly average 13-week U.S. Treasury bill yield.
Interest income for the three months ended March 31, 1996 decreased by $97,714
as compared to the corresponding period in 1995 primarily due to the effect of
redemptions on the Partnership's equity maintained in cash.
Brokerage commissions are calculated on the adjusted net asset value on
the last day of each month and, therefore, vary according to trading
performance, subscriptions 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 months ended March 31, 1996 decreased by $143,981 as
compared to the corresponding period in 1995.
8
<PAGE> 9
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 for the three
months ended March 31, 1996. Trading performance for the three months ended
March 31, 1995 resulted in incentive fees of $39,890.
9
<PAGE> 10
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
10
<PAGE> 11
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.
SMITH BARNEY INTERNATIONAL ADVISORS CURRENCY FUND L.P.
By: Smith Barney Futures Management Inc.
(General Partner)
By: /s/David J. Vogel, President
---------------------------------------
David J. Vogel, President
Date: 5/10/96
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/David J. Vogel, President
---------------------------------------
David J. Vogel, President
Date: 5/10/96
By /s/Daniel A. Dantuono
---------------------------------------
Daniel A. Dantuono
Chief Financial Officer and
Treasurer
Date: 5/10/96
11
<PAGE> 12
EXHIBIT INDEX
-------------
Exhibit
No. Description
- ------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000876716
<NAME> SMITH BARNEY INTERNATIONAL ADVISORS CURRENCY FUND L.P.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 3,934,267
<SECURITIES> 95,503
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,043,880
<CURRENT-LIABILITIES> 346,114
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 3,697,766
<TOTAL-LIABILITY-AND-EQUITY> 4,043,880
<SALES> 0
<TOTAL-REVENUES> 120,771
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 36,173
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 84,598
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 84,598
<EPS-PRIMARY> .20
<EPS-DILUTED> 0
</TABLE>
