<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly Period Ended: September 30, 1998
or
[ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Commission File Number: 33-50388
THE MILLBURN GLOBAL OPPORTUNITY FUND L.P.
(Exact name of registrant as specified in its charter)
Delaware 06-1346-879
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
c/o MILLBURN RIDGEFIELD CORPORATION
411 West Putnam Avenue
Greenwich, Connecticut 06830
(Address of principal executive offices)
Registrant's telephone number, including area code: (203) 625-7554
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant Limited Partnership Units
to Section 12(g) of the Act: (Title of Class)
Indicate by check mark whether the registrant (1) 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 [ ]
Aggregate market value of the voting and non-voting common equity held by
non-affiliates: $15,635,270.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
THE MILLBURN GLOBAL OPPORTUNITY FUND L.P.
Statements of Financial Condition (UNAUDITED)
<TABLE>
<CAPTION>
30-Sep-98 31-Dec-97
Assets: ------------ ------------
<S> <C> <C>
Investment in U.S. Treasury bills
(Cost $14,804,353) 14,804,353 17,877,508
Money market mutual funds 729,207 123,446
Options owned at market (Cost $0) - 160,575
Unrealized appreciation on open contracts 1,523,067 484,001
Cash 87,833 362,797
------------ ------------
Total Assets $ 17,144,460 $ 19,008,327
============ ============
Liabilities & Partners' Capital:
Due to General Partner - 1,566
Accounts payable and accrued expenses 52,176 64,964
Redemptions payable to unit holders, net 285,977 270,284
Accrued brokerage commissions 98,331 105,620
------------ ------------
Total Liabilities 436,484 442,434
Trust Capital:
General Partner interest 1,072,706 979,861
Limited Partners' interest (10,383.878
Units of Beneficial Interest outstanding
- at September 30, 1998) 15,635,270 17,586,032
------------ ------------
Total Trust Capital 16,707,976 18,565,893
------------ ------------
Total Liabilities and Trust Capital $ 17,144,460 $ 19,008,327
============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE MILLBURN GLOBAL OPPORTUNITY FUND L.P.
Statements of Operations
For the three months ended September 30, 1998 and 1997 (UNAUDITED)
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
Revenues:
Realized Gain(Loss) on Closed Contracts 135,855 949,875
Change in Unrealized Gain(Loss) 1,510,773 (160,916)
Interest Income 212,755 264,249
Foreign Exchange Gain(Loss) (11,965) (4,052)
------------ ------------
$ 1,847,418 $ 1,049,156
Expenses:
Brokerage Commissions 311,358 389,908
17.5% Profit Share (Accrued) - 1,567
Administrative 22,364 28,400
------------ ------------
$ 333,722 $ 419,875
============ ============
Net Income(Loss) $ 1,513,696 $ 629,281
Net Income(Loss) allocated to General Partner $ 114,615 $ 48,003
Net Income(Loss) allocated to Limited Partners $ 1,399,081 $ 581,278
Increase(Decrease) in Redemption Value
for each Unit outstanding throughout
each period $ 132.76 $ 45.64
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE MILLBURN GLOBAL OPPORTUNITY FUND L.P.
Statements of Operations
For the nine months ended September 30, 1998 and 1997 (UNAUDITED)
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
Revenues:
Realized Gain(Loss) on Closed Contracts (48,769) 4,230,411
Change in Unrealized Gain(Loss) 878,491 (1,093,447)
Interest Income 680,836 803,595
Foreign Exchange Gain(Loss) (20,522) (10,518)
------------ ------------
$ 1,490,036 $ 3,930,041
Expenses:
Brokerage Commissions 990,145 1,200,635
17.5% Profit Share (Accrued) - 336,456
Administrative 68,585 70,194
------------ ------------
$ 1,058,730 $ 1,607,285
============ ============
Net Income(Loss) $ 431,306 $ 2,322,756
Net Income(Loss) allocated to General Partner $ 92,845 $ 164,037
Net Income(Loss) allocated to Limited Partners $ 338,461 $ 2,158,719
Increase(Decrease) in Redemption Value
for each Unit outstanding throughout
each period $ 42.23 $ 152.74
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE MILLBURN GLOBAL OPPORTUNITY FUND L.P.
Statements of Trust Capital
For the nine months ended September 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
Limited General
Partners Partner Total
------------ ------------ ------------
<S> <C> <C> <C>
Trust Equity at December 31, 1997
(12,016.382 Units) 17,586,032 979,861 18,565,893
Redemption of 1,632.504 Units (2,289,223) - (2,289,223)
Net Gain(Loss) in Trust Equity 338,461 92,845 431,306
------------ ------------ ------------
Trust Equity at September 30, 1998 15,635,270 1,072,706 16,707,976
(10,383.878 Units) ============ ============ ============
Redemption Value per Unit
at September 30, 1998 1,505.73
============
</TABLE>
Statements of Cash Flows
For the nine months ended September 30, 1998 and 1997 (UNAUDITED)
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income(Loss) (431,306) 2,322,756
Adjustments to reconcile Net Income
(Loss) to Net Cash Flows from
Operating Activities:
Decrease (Increase) in Equity in
Futures and Forward Trading Accounts 2,194,664 692,858
(Decrease) Increase in Accrued Expenses (21,643) (40,734)
------------ ------------
Net Cash Flows from Operating Activities 2,604,327 2,974,880
Cash Flows from Financing Activities:
Redemption of Limited and General
Partner Units and Unit Equivalents (2,273,530) (3,425,062)
------------ ------------
Net Change in Cash 330,797 (450,182)
Cash - Beginning of Year 486,243 1,618,698
------------ ------------
Cash - End of Period 817,040 1,168,516
============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE MILLBURN GLOBAL OPPORTUNITY FUND L.P. NOTES TO FORM 10-Q
These interim consolidated financial statements do not include all the
disclosures contained in the annual financial statements. These interim
statements have been prepared by management without audit by Independent
Public Accountants. The consolidated statements of financial condition has
been derived from the audited financial statements as of December 31, 1997.
The consolidated results of operation as displayed, should not be considered
indicative of results to be expected for the entire year.
Management discussion and analysis of the consolidated financial statements
for the nine months ended September 30, 1998.
<TABLE>
<CAPTION>
30-Sep-98 31-Dec-97
------------- -------------
<S> <C> <C>
Ending Equity $ 16,707,976 $ 18,565,893
</TABLE>
The partnership's net assets declined 10.01% in the first three quarters
of 1998. This was a result of redemptions and net profit on trading.
Trading conditions in financial futures and currencies were erratic during
the first three months of 1998. A downtrend in global interest rates led to
significant profits for the portfolio during January, even though currency
and stock index trading produced losses. During February, however, a sharp
reversal of this interest rate trend in the U.S., along with increased
volatility in trading currencies and stock indices, produced sizable losses
in the portfolio. In March, currency trading was quite profitable, but losses
were registered again in interest rates and stock indices.
Market conditions remained volatile during 1998's second quarter. In April,
the fund's broad diversification failed to prevent a sizable loss as negative
results were registered in each of the four market sectors comprising the
portfolio--currency, interest rate, stock index, and metal trading. Although
the fund is broadly diversified among more than forty markets in four sectors
which are not correlated over time, April characterized the unusual situation
of all four sectors producing losses concurrently. In May, on the other
hand, all four sectors of the portfolio produced profits, thereby recovering
about one-third of the prior month's losses. In June, profits in currency,
stock index, and metal trading slightly outdistanced the losses from interest
rate trading.
The dominant factor influencing third quarter performance in the Millburn
Global Markets Portfolio L. P. was a worldwide "flight to quality". As the
Russian default and devaluation, and later the hedge fund problems rattled
the markets, investors sought safety and liquidity in major government debt
securities. Hence, the Fund's long futures positions in Japanese, German,
Spanish, French, Italian and US bonds, as well as in short-term eurodollar
and euroyen deposits were quite profitable. On balance, currency trading
had no impact on quarterly performance. The dollar, which had risen coming
into the quarter, turned downward producing losses on existing long
positions in July and August, before bringing offsetting profits on short
positions during latter stages of the quarter. Industrial metals prices
were volatile throughout the three months, resulting in losses on both sides
of the market. Stock index futures trading was also unsettled, generating
small declines for the three months.
<PAGE>
The Year 2000 Computer Issue
Many existing computer systems use only two digits to refer to a year.
This technique can cause the systems to treat the year 2000 as 1900,
an effect commonly known as the "Year 2000 Problem." The Partnership,
like other financial and business organizations, depends on the smooth
functioning of computer systems and could be adversely affected if the
computer systems on which it relies do not properly process and calculate
date-related information concerning dates on or after January 1, 2000.
The General Partner administers the business of the Partnership through
various systems and processes maintained by the General Partner. The
General Partner's modifications for Year 2000 compliance are proceeding
and are expected to be completed, with respect to mission-critical systems,
by April 1999, and, with respect to other systems, by July 1999. The
expenses incurred to date by the General Partner in preparing for Year 2000
compliance have not had a material adverse impact on the General Partner's
financial position, and the expenses to be incurred in becoming fully
Year 2000 compliant are not expected to have a material adverse impact on
the General Partner's financial position. The Partnership itself has no
systems or information technology applications relevant to its operations
and, thus, has no expenses related to addressing the Year 2000 Problem.
In addition to the General Partner, the Partnership is dependent on the
capability of the various exchanges, Currency Dealers and Futures Brokers
and other third parties with which the Partnership has material
relationships to prepare adequately for the Year 2000 Problem and its
impact on their systems and processes. The major U.S. futures exchanges
participated in the Futures Industry Association Y2K Beta Test during
September 1998 and will participate in the Futures Industry Association
Y2K industry-wide test for Year 2000 compliance during the first and
second quarters of 1999. The Futures Industry Association Y2K Tests are
to test links with outside entities. The General Partner is currently
implementing procedures to monitor the progress of the Currency Dealers
and Futures Brokers and other third parties with which the Partnership has
a material relationship in addressing their Year 2000 issues.
The most likely and most significant risk to the Partnership associated
with the lack of Year 2000 readiness is the failure of third parties,
including the Currency Dealers and Futures Brokers, exchanges, and
various regulators to resolve their Year 2000 issues in a timely manner.
This risk could involve the temporary inability to transfer funds
electronically or to determine the Net Asset Value of the Partnership,
in which case redemption payments could be delayed until the Partnership's
assets could be valued and/or funds could be transferred. If the General
Partner believes, prior to December 31, 1999, that any third party has
failed to resolve a Year 2000 issue likely to have a material adverse impact
on the Partnership, the General Partner will attempt to close any Partnership
positions carried by such third party or exposed to such third party's
failure to resolve its Year 2000 issue and to cease trading with or through
such third party until such issue is resolved.
<PAGE>
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, in the
City of New York and State of New York on the 28th day of October, 1998.
THE MILLBURN GLOBAL OPPORTUNITY FUND L.P.
By: Millburn Ridgefield Corporation,
General Partner
By /s/ Tod A. Tanis October 28, 1998
Tod A. Tanis
Vice-President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
STATEMENTS OF FINANCIAL CONDITION, OPERATIONS, AND CHANGES IN PARTNERS'
CAPITAL AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JUL-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 817,040
<SECURITIES> 14,804,353
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 17,144,460
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 17,144,460
<CURRENT-LIABILITIES> 436,484
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 16,707,976
<TOTAL-LIABILITY-AND-EQUITY> 17,144,460
<SALES> 0
<TOTAL-REVENUES> 1,490,036
<CGS> 0
<TOTAL-COSTS> 990,145
<OTHER-EXPENSES> 68,585
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 431,306
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 431,306
<EPS-PRIMARY> 42.23
<EPS-DILUTED> 42.23
</TABLE>
