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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
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 0-21286
THE FOUR SEASONS FUND II L.P.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of # 54-1640874
incorporation or organization) (I.R.S. Employer
Identification No.)
c/o JAMES RIVER MANAGEMENT CORP.
103 Sabot Park
Manakin-Sabot, Virginia
(Address of principal executive offices)
23103
(Zip Code)
(804) 784-4500 Attention: Mr. Paul Saunders
(Registrant's telephone number, including area code)
Formerly c/o KIDDER PEABODY FUTURES MANAGEMENT CORP.
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or l5(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
-1-
<PAGE>
FORM 10-Q PART 1 ITEM 1 FINANCIAL STATEMENTS
THE FOUR SEASONS FUND II L.P.
STATEMENTS OF PARTNERS' CAPITAL (UNAUDITED) - FOR THE THREE MONTHS ENDED
JUNE 30, 1998, AND MARCH 31, 1998.
<TABLE>
<CAPTION>
UNITS OF
PARTNERSHIP
INTEREST LIMITED PARTNERS GENERAL PARTNER TOTAL
---------- ------------------- ---------------- -------------
<S> <C>
PARTNERS' CAPITAL, DECEMBER 31, 1997 2388.7720 2,568,835 96,767 2,665,601
Capital Contributions - - - -
Capital Withdrawals (50.0000) (56,573) - (56,573)
Capital Distributions - (92,082) (3,469) (95,551)
Net Income - 127,952 4,820 132,772
------------- ------------ ----------- ----------
PARTNERS' CAPITAL, MARCH 31, 1998 2,338.7720 2,548,132 98,118 2,646,249
Capital Contributions - - - -
Capital Withdrawals (174.0000) (124,039) (72,168) (196,207)
Capital Distributions - - - 0
Net Income - (8,659) (333) (8,992)
------------- ------------ ----------- -------------
PARTNERS' CAPITAL, JUNE 30, 1998 2164.7720 2,415,434 25,617 2,441,050
============= ============ =========== =============
NET ASSET VALUE PER PARTNERSHIP UNIT:
December 31, 1997:
Amount $1,115.89
Units outstanding 2388.772
March 31, 1998:
Amount $1,131.47
Units outstanding 2338.772
June 30, 1998:
Amount $1,127.63
Units outstanding 2164.7720
</TABLE>
The Accompanying Notes Are An Integral Part Of The Financial Statements.
<PAGE>
FORM 10-Q PART 1 ITEM 1 FINANCIAL STATEMENTS
THE FOUR SEASONS FUND II L.P.
STATEMENT OF OPERATIONS (UNAUDITED) - FOR THE THREE MONTHS ENDED JUNE 30, 1998
AND JUNE 30, 1997.
<TABLE>
<CAPTION>
06/30/98 06/30/97
--------- ---------
<S> <C>
REVENUES
Trading Profit (Loss)
Net realized gains $ 50,899 $ 16,671
Net option premiums - 3,194
Net change in unrealized gains on open futures
contracts (70,184) 93,100
Net change in unexpired options - (30,650)
--------- ---------
Total Trading Results (19,285) 82,315
Gain on sale of U.S. Treasury Strip Securities 2,201 (1,962)
Interest income 40,315 42,502
--------- ---------
Total Revenues 23,231 122,855
EXPENSES
Brokerage commissions 16,911 17,030
Management fees 6,650 6,658
Sponsor fees 4,994 5,002
Administrative expenses 6,229 8,873
--------- ---------
Total Expenses 34,784 37,563
--------- ---------
INCOME BEFORE ALLOCATION OF MINORITY INTEREST (11,553) 85,292
ALLOCATION OF MINORITY INTEREST 2,561 (2,240)
--------- ---------
NET INCOME: ($8,992) $83,052
========= =========
Limited Partners $ (8,659) $ 80,241
General Partner (333) 2,811
Net income per unit ($3.84) $32.41
</TABLE>
The accompanying notes are an integral part of these combined Financial
Statements.
-3-
<PAGE>
FORM 10-Q PART 1 ITEM 1 FINANCIAL STATEMENTS
THE FOUR SEASONS FUND II L.P.
COMBINED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
June 30, March 31,
1998 1998
------------ -----------
(Unaudited) (Unaudited)
<S> <C>
ASSETS:
Net Receivable From Commodity Broker:
Receivable For Cash Retained $ 482,405 $ 482,362
Net Unrealized Gain on 5,853 76,036
Open Futures Contracts
Net Unexpired Option Premiums - -
Accrued Interest Receivable 1,294 1,580
Other - -
U.S. Treasury Strip Securities (Cost plus Accrued) 2,200,870 2,208,275
------------ -----------
TOTAL ASSETS $ 2,690,422 $ 2,768,253
============ ===========
LIABILITIES:
Accrued Brokerage Commissions $ 10,024 $ 16,281
Accrued Advisory Fees 2,219 4,561
Accrued Sponsor Fees 3,324 5,209
Other Accrued Expenses 14,008 13,229
Redemptions Payable 213,207 56,573
------------ -----------
242,782 95,853
Minority interest in Trading Company 6,590 26,151
------------ -----------
TOTAL LIABILITIES 249,372 122,004
------------ -----------
PARTNERS' CAPITAL:
General Partner ( 22.7171 units - 06/30/98) 25,616 98,118
( 86.7171 units - 03/31/98)
Limited Partners (2142.0549 units - 06/30/98) 2,415,434 2,548,131
(2252.0549 units - 03/31/98)
------------ -----------
TOTAL PARTNERS' CAPITAL 2,441,050 2,646,249
------------ -----------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 2,690,422 $ 2,768,253
============ ===========
PARTNERSHIP UNITS OUTSTANDING 2,164.772 2,338.772
============ ===========
NET ASSET VALUE PER PARTNERSHIP UNIT $ 1,127.62 $ 1,131.47
============ ===========
</TABLE>
The accompanying notes are an integral part of these combined statements.
-4-
<PAGE>
FORM 10-Q PART 1 ITEM 1 FINANCIAL STATEMENTS
THE FOUR SEASONS FUND II L.P.
STATEMENT OF CASH FLOWS (UNAUDITED) - FOR THE THREE MONTHS ENDED JUNE 30, 1998
AND JUNE 30, 1997.
<TABLE>
<CAPTION>
Three months Three months
ended 6/30/98 ended 6/30/97
------------ -------------
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ (8,992) 83,052
Adjustments To Reconcile Net Income To
Net Cash Provided By Operating Activities:
Net Change In Unrealized Gains
On Futures Contracts 70,184 (93,100)
Net Change In Unrealized
Option Premiums 0 30,650
Accrued Interest From U.S. Treasury
Strip Securities (36,191) (39,314)
Gain on Sale of U.S. Treasury
Strip Securities (2,201) 1,962
(Increase) Decrease In Operating Assets:
Net Receivable From Commodity
Broker For Cash Retained (98) 371,672
Net Receivable From Commodity
Broker For Interest Receivable 286 1,670
Increase (Decrease) In Operating Liabilities:
Accrued Brokerage Commissions (6,202) 5,932
Accrued Advisory Fees (2,342) (1,800)
Accrued Sponsor Fees (1,885) 1,875
Other Accrued Expenses 779 2,610
Redemptions Payable 139,633 (2,128,300)
Allocation of Income to Minority Interest (2,561) 2,240
------------ -------------
Net cash (used in) provided by
operating activities 159,403 (1,843,903)
------------ -------------
NET CASH FLOWS FROM FINANCING ACTIVITIES
Limited Partner Additions - -
Limited Partner Redemptions (196,207) (115,769)
Partner Distributions - -
------------ -------------
Net cash used in financing activities (196,207) (115,769)
------------ -------------
NET CASH FLOWS FROM INVESTING ACTIVITIES
Maturity of U.S. Treasury Strip - -
Sale of U.S. Treasury Strip Securities 45,796 1,876,620
------------ -------------
Net cash provided by investing activities 45,796 1,876,620
------------ -------------
NET INCREASE IN CASH - -
CASH AT BEGINNING OF PERIOD - -
------------ -------------
CASH AT END OF PERIOD - -
============ =============
</TABLE>
The Accompanying Notes Are An Integral Part Of The Financial Statements.
- 5 -
<PAGE>
Form 10-Q Part 1 Item 2 Management's Discussion
THE FOUR SEASONS FUND II L.P.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND OPERATING
RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND JUNE 30, 1997:
(A) JUNE 30, JUNE 30,
1998 1997
------------ ------------
PARTNERS' CAPITAL $ 2,441,050 $ 2,580,822
For the three month period ending June 30, 1998, Partners'
Capital decreased $ 205,199, due primarily to net withdrawals of
$ 196,207 and operating expenses of $ 34,784. The decrease in
capital resulting from capital withdrawals and operating expenses
was partially offset by the appreciation in the value of the U.S.
Treasury Strip Securities' interest of $ 36,191. The realized
and unrealized trading losses of futures contracts, options on
futures contracts, and currency forwards were $ (19,285). Largest
losses in futures trading were concentrated in the financial
markets, namely the Australian Bonds.
In comparison, for the three month period ended June 30,1997,
Partners' capital decreased $ 32,718 due to net withdrawals of
$ 115,769 and operating expenses of $ 37,563. The decrease in
capital generated by capital withdrawals and operating expenses
were offset partially by the appreciation in the U.S. Securities'
interest of $ 39,314, and from the realized and unrealized trading
gains of futures contracts, options on futures contracts, and
currency forwards of $ 82,315. Largest gains from futures trading
were concentrated in the financial and currency markets, namely
the S&P 500, US Dollar Index, and the Swiss franc, Deutsche Mark,
and Japanese yen futures contracts. Significant trading gains
were also attributed to currency forwards.
<PAGE>
(B) The U.S. Treasury Strip Securities are valued at the lower of
cost plus accrued interest or market value. As of June 30,
1998, the cost plus accrued interest value (as shown on the
Combined Statement of Financial Condition) of the U.S. Treasury
Strip Securities is $ 2,200,870 and the value of said securities
at market value is $ 2,317,791. As of June 30, 1997, the
value of the U.S. Treasury Strip Securities at cost plus accrued
interest was $ 2,345,784 and the market value was $ 2,401,367.
<PAGE>
EXHIBITS
None
PART II
None
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.
THE FOUR SEASONS FUND II L.P.
(Registrant)
By JAMES RIVER MANAGEMENT CORP.
(General Partner)
By Edward M. Jasinski
----------------------------------------------
Director of Fund Administration
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 1,541,281
<INVESTMENTS-AT-VALUE> 2,317,791
<RECEIVABLES> 483,699
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,690,422
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 232,372
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 2,165
<SHARES-COMMON-PRIOR> 2,339
<ACCUMULATED-NII-CURRENT> 1,923,557
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 114,600
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 2,441,050
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 40,315
<OTHER-INCOME> 0
<EXPENSES-NET> 34,784
<NET-INVESTMENT-INCOME> (11,553)
<REALIZED-GAINS-CURRENT> 53,100
<APPREC-INCREASE-CURRENT> 126,293
<NET-CHANGE-FROM-OPS> (205,199)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> (174)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (77,831)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 6,650
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 34,784
<AVERAGE-NET-ASSETS> 2,616,797
<PER-SHARE-NAV-BEGIN> 1,131.47
<PER-SHARE-NII> (3.84)
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1,127.62
<EXPENSE-RATIO> 1.42
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
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