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, 1996
Commission File Number 0-21586
F-1000 Futures Fund L.P., Series IX
(Exact name of registrant as specified in its charter)
New York 13-3678327
(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: 50,000 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>
PART I
Item 1. Business.
(a) General development of business. F-1000 Futures Fund L.P., Series IX
(the "Partnership") is a limited partnership organized on August 25, 1992 under
the Partnership Laws of the State of New York. 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 certain other financial
instruments, foreign currencies and stock indices. The Partnership maintains a
portion of its assets in interest payments stripped from U.S. Treasury Bonds
under the Treasury's STRIPS program ("Zero Coupons") which payments will be due
May 15, 1999. The Partnership uses the Zero Coupons and its other assets to
margin its commodities account.
A total of 50,000 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 50,000 units became effective on August 25,
1992. Between November 24, 1992 and March 8, 1993, 23,755 Units were sold to the
public at $1,000 per Unit. Proceeds of the offering along with the General
Partners' contribution of $249,000 were held in escrow until March 9, 1993 at
which time an aggregate of $24,005,000 was turned over to the Partnership and
the Partnership commenced trading operations. Redemptions for the years ended
December 31, 1996, 1995 and 1994 are reported in the Statement of Partners
2
<PAGE>
Capital on page F-5 under "Item 8. Financial Statements and Supplementary Data."
The Partnership's trading of futures contracts on commodities is done on
United States and 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.
Under the Limited Partnership Agreement of the Partnership (the "Limited
Partnership Agreement"), the General Partner administers the business and
affairs of the Partnership. As of December 31, 1996 all commodity trading
decisions are made for the Partnership by Trendview Management, Inc. and Rabar
Market Research, Inc. (collectively, the "Advisors"). Neither of the Advisors is
affiliated with the General Partner or SB. The Advisors are not responsible for
the organization or operation of the Partnership.
Pursuant to the terms of the Management Agreements (the "Management
Agreements"), the Partnership is obligated to pay each Advisor: (i) a monthly
management fee equal to 1/6 of 1% of the Net Assets of the Partnership allocated
to each Advisor as of the end of each month (2% per year) and (ii) an incentive
fee payable quarterly, equal to 20% of the New Trading Profits (as defined in
the Management Agreements) of the Partnership.
The Customer Agreement provides that the Partnership will pay
3
<PAGE>
SB a monthly brokerage fee equal to .71% of month-end Net Assets allocated to
the Advisors (8.5% per year) in lieu of brokerage commissions on a per trade
basis. SB will pay a portion of its brokerage fees to its financial consultants
who have sold Units and who are registered as associated persons with the
Commodity Futures Trading Commission (the "CFTC"). The Partnership will pay for
National Futures Association ("NFA") fees, exchange and clearing fees, give-up
and user fees and floor brokerage fees. Brokerage fees will be paid for the life
of the Partnership, although the rate at which such fees are paid may be
changed. The Customer Agreement between the Partnership and SB gives the
Partnership the legal right to net unrealized gains and losses.
In addition, SB will pay the Partnership interest on 75% of the average
daily equity maintained in cash in its account during each month at a 30-day
U.S. Treasury bill rate determined weekly by SB based on the average
non-competitive yield on 3-month U.S. Treasury bills maturing 30 days from the
date on which such weekly rate is determined.
Smith Barney Holdings, Inc. has agreed to contribute up to $50,000,000 to
the Partnership's capital without recourse to the Partnership, the General
Partner or SB to enable the Partnership to meet its margin obligations to SB. As
a result of the agreement, the Partnership should not have to liquidate its Zero
Coupons prior to their due date except to fund redemptions, and investors who
remain limited partners until dissolution of the Partnership should receive an
amount at least equal to their initial investment. The
4
<PAGE>
General Partner will provide a copy of Smith Barney Holdings Inc.'s annual
report as filed with the SEC to any limited partner requesting it.
(b) Financial information about industry segments. The Partnership's
business consists of only one segment, speculative trading of commodity
interests (including, but not limited to, futures contracts, options and forward
contracts on U.S. Treasuries, other financial instruments, foreign currencies,
stock indices and physical commodities). 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, 1996, 1995, 1994 and for the period from March
9, 1993 (commencement of trading operations) to December 31, 1993 is set forth
under "Item 6. Select Financial Data." Partnership capital as of December 31,
1996 was $7,756,766.
(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.
Item 2. Properties.
The Partnership does not own or lease any properties. The General Partner
operates out of facilities provided by its affiliate, SB.
5
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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, 1996 was 584.
(c) Distribution. The Partnership did not declare a
distribution in 1996.
6
<PAGE>
Item 6. Select Financial Data. The Partnership commenced trading operations on
March 9, 1993. Realized and unrealized trading gains, realized and unrealized
gains (losses) on Zero Coupons, interest income, net income (loss) and increase
(decrease) in net asset value per Unit for the years ended December 31, 1996,
1995, 1994 and for the period from March 9, 1993 (commencement of trading
operations) to December 31, 1993 and total assets at December 31, 1996, 1995,
1994, 1993 and 1992 were as follows:
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
----------- ------------ ------------ ----------- -------
<S> <C> <C> <C> <C> <C>
Realized and unrealized
trading gains net of
brokerage commissions and
clearing fees of $271,097,
$368,786, $584,851 and
$653,875, respectively $ 23,106 $ 420,261 $ 222,464 $ 353,586
Realized and unrealized gains
(losses)on Zero Coupons (159,745) 899,375 (1,583,065) 140,604
Interest income 485,260 623,626 929,636 880,622
----------- ------------ ------------ -----------
$ 348,621 $ 1,943,262 $ (430,965) $ 1,374,812
=========== ============ ============ ===========
Net Income (loss) $ 218,128 $ 1,519,530 $ (945,801) $ 934,115
=========== ============ ============ ===========
Increase (decrease) in
net asset value per unit $ 39.64 $ 128.38 $ (42.92) $ 39.06
=========== ============ ============ ===========
Total assets $8,030,154 $11,505,904 $15,407,997 $24,207,383 $ 2,000
=========== ============ ============ ============ ======
</TABLE>
7
<PAGE>
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 equity in its commodity futures trading
account, consisting of cash and cash equivalents, Zero Coupons, 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) No Advisor will initiate additional positions in any commodity if such
additional positions would result in aggregate positions for all commodities
requiring as margin more than 66-2/3% of the Partnership's assets allocated to
the Advisor.
(4) The Partnership may occasionally accept delivery of a commodity.
Unless such delivery is disposed of promptly by retendering the warehouse
receipt representing the delivery to the appropriate clearing house, the
physical commodity position will be fully hedged.
8
<PAGE>
(5) The Partnership will 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 will not utilize borrowings except short-term
borrowing 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 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
9
<PAGE>
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, 2012;
(ii) at the end of the month in which the Zero Coupons purchased by the
Partnership come due (May, 1999); (iii) the vote to dissolve the Partnership by
limited partners owning more than 50% of the Units; (iv) 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 Partnership Act unless the Partnership is
continued as described in the Limited Partnership Agreement; (v) the Partnership
is required to register under the Investment Company Act of 1940 and the General
Partner determines that dissolution is therefore in the Partnership's best
interest; or
10
<PAGE>
(vi) the occurrence of any event which shall make 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 will consist of the capital
contributions of the partners as increased or decreased by gains or losses on
commodity futures trading and by 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's Advisors may or may
not be able to identify. Partnership expenses will 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, the Partnership
will receive no payment on its Zero Coupons until their due date. However, the
Partnership will accrue interest on the Zero Coupons and Limited Partners will
be required to report as interest income on their U.S. tax returns in each year
their prorata share of the accrued interest on the Zero Coupons even though no
interest will be paid prior to their due date. In addition, the amount of
interest income payable by SB is dependent upon interest rates over which the
Partnership has no control.
No forecast can be made as to the level of redemptions in
11
<PAGE>
any given period. Beginning with the fiscal quarter ending at least six months
after trading commences, a Limited Partner may cause all of his Units to be
redeemed by the Partnership at the Net Asset Value thereof as of the last day of
a fiscal quarter (the "Redemption Date") on fifteen days' written notice to the
General Partner. Redemption fees equal to 4%, 3%, 2% and 1% of Net Asset Value
per Unit redeemed were charged to any Limited Partner who redeemed his Units on
the first, second, third or fourth possible Redemption Dates, respectively.
Thereafter, no redemption fee will be charged. During 1994 and 1993, SB received
redemption fees of $52,854 and $77,949, respectively.
For the year ended December 31, 1996 2,810 Units were redeemed totaling
$3,113,939. For the year ended December 31, 1995, 3,095 Units were redeemed for
a total of $3,386,462 which includes the General Partner redemption representing
146 Unit equivalents totaling $164,180. There were 8,933 Units redeemed in the
year ended December 31, 1994, at a value of $8,875,467.
For each Unit redeemed and not offset by a purchase, the Partnership
liquidates $1,000 (principal amount) of Zero Coupons and will continue to
liquidate $1,000 (principal amount) of Zero Coupons per Unit redeemed. These
liquidations will be at market value which will be less than the amount payable
on their due date. Moreover, it is possible that the market value of the Zero
Coupon could be less than its purchase price plus the original issue discount
amortized to date.
12
<PAGE>
(c) Results of operations. For the year ended December 31, 1996, the
net asset value per Unit increased 3.5% from $1,124.52 to $1,164.16. For the
year ended December 31, 1995, the net asset value increased 12.9% from $996.14
to $1,124.52. For the year ended December 31, 1994, the net asset value per Unit
decreased 4.1% from $1,039.06 to $996.14.
The Partnership experienced net trading gains of $294,203 before
commission and expenses for the year ended December 31, 1996. Gains were
attributable to the trading of commodity futures in currencies, energy products
and interest rates and were partially offset by losses in the trading of
commodity futures in metals, agricultural products and indices. The Partnership
experienced a realized loss of $46,071 on Zero Coupons liquidated in conjunction
with the redemption of Units during 1996 and unrealized depreciation of $113,674
on Zero Coupons during 1996.
The Partnership experienced net trading gains of $789,047 before
commissions and expenses for the year ended December 31, 1995. Realized trading
gains of $855,208 were attributable to net trading gains in foreign currencies,
interest rates, stock indices and energy commodity futures. These realized gains
were partially offset by realized losses experienced in the trading of metals
and agricultural commodity futures. The Partnership experienced a realized loss
of $95,508 on Zero Coupons liquidated in conjunction with the redemption of
Units during 1995 and unrealized appreciation of $994,883 on Zero Coupons during
1995.
13
<PAGE>
The Partnership experienced net trading gains of $807,315 before
commissions and expenses for the year ended December 31, 1994. Realized trading
gains of $1,019,135 were attributable to trading in foreign currencies and
agricultural commodity futures. However, these realized trading gains were
partially offset by realized losses experienced in the trading of interest
rates, precious metals, stock indices and energy commodity futures. The
Partnership experienced a realized loss of $526,997 on Zero Coupons liquidated
in conjunction with the redemption of Units during 1994 and unrealized
depreciation of $1,056,068 on Zero Coupons during 1994.
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 those price trends correctly. 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 gain capital from operations.
14
<PAGE>
Item 8. Financial Statements and Supplementary Data.
F-1000 FUTURES FUND L.P., SERIES IX
INDEX TO FINANCIAL STATEMENTS
Page
Number
Report of Independent Accountants. F-2
Financial Statements:
Statement of Financial Condition at
December 31, 1996 and 1995. F-3
Statement of Income and Expenses for
the years ended December 31, 1996, 1995
and 1994. F-4
Statement of Partners' Capital for the
years ended December 31, 1996, 1995
and 1994. F-5
Notes to Financial Statements. F-6 - F-12
F-1
Continued
<PAGE>
Report of Independent Accountants
To the Partners of F-1000 Futures Fund L.P., Series IX:
We have audited the accompanying statement of financial condition of F-1000
FUTURES FUND L.P., SERIES IX (a New York Limited Partnership) as of December 31,
1996 and 1995, and the related statements of income and expenses and of
partners' capital for the years ended December 31, 1996, 1995, and 1994. 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 F-1000 Futures Fund L.P.,
Series IX as of December 31, 1996 and 1995, and the results of its operations
for the years ended December 31, 1996, 1995 and 1994, in conformity with
generally accepted accounting principles.
Coopers & Lybrand L.L.P.
New York, New York
February 28, 1997
F-2
<PAGE>
F-1000 Futures Fund L.P., Series IX
Statement of Financial Condition
December 31, 1996 and 1995
Assets: 1996 1995
Equity in commodity futures
trading account:
Cash and cash equivalents (Note 3c) $ 1,956,801 $ 2,527,638
Net unrealized appreciation
on open futures contracts 107,664 440,322
Commodity options owned, at
market value (cost $960
and $670 in 1996 and 1995,
respectively) 660 690
Zero Coupons, $6,663,000 and
$9,473,000 principal
amount in 1996, and 1995,
respectively, due May 15, 1999,
at market value (amortized
cost $5,858,376 and
$7,888,830 in 1996 and
1995, respectively) (Notes
1 and 2) 5,795,477 7,939,605
----------- -----------
7,860,602 10,908,255
Receivable from SB on sale of
Zero Coupons 162,690 580,941
Interest receivable 6,862 9,187
Deferred organization expense 7,521
----------- -----------
$ 8,030,154 $11,505,904
=========== ===========
Liabilities and Partners' Capital:
Liabilities:
Accrued expenses:
Commissions $ 18,484 $ 24,150
Management fees 4,318 5,642
Other 31,916 26,090
Organization expense 16,708
Commodity options written,
at market value (premiums
received $800 and $300 in
1996 and 1995, respectively) 972 320
Redemptions payable (Note 5) 217,698 780,417
----------- -----------
273,388 853,327
----------- -----------
Partners' Capital (Notes 1, 5 and 7):
General Partner, 103 Unit
equivalents outstanding in
1996 and 1995 119,908 115,825
Limited Partners, 6,560 and
9,370 Units of Limited
Partnership Interest
outstanding in 1996 and
1995, respectively 7,636,858 10,536,752
----------- -----------
7,756,766 10,652,577
----------- -----------
$ 8,030,154 $11,505,904
=========== ===========
See notes to financial statements.
F-3
<PAGE>
F-1000 Futures Fund L.P., Series IX
Statement of Income and Expenses
for the years ended December 31, 1996,
1995 and 1994
1996 1995 1994
Income:
Net gains (losses) on trading of
commodity interests:
Realized gains on closed
positions $ 627,333 $ 855,208 $ 1,019,135
Change in unrealized gains/
losses on open positions (333,130) (66,161) (211,820)
----------- ----------- -----------
294,203 789,047 807,315
Less, Brokerage commissions
and clearing fees ($9,263,
$13,589 and $20,378,
respectively) (Note 3c) (271,097) (368,786) (584,851)
----------- ----------- -----------
Net realized and unrealized
gains 23,106 420,261 222,464
Gain (loss) on sale of
Zero Coupons (46,071) (95,508) (526,997)
Unrealized appreciation
(depreciation) on
Zero Coupons (113,674) 994,883 (1,056,068)
Interest income (Note 2c
and 3c) 485,260 623,626 929,636
----------- ----------- -----------
348,621 1,943,262 (430,965)
----------- ----------- -----------
Expenses:
Organization expense (Note 6) 7,521 139,067 155,137
Management fees (Note 3b) 56,703 76,201 122,064
Incentive fees (Note 3b) 20,099 151,220 183,571
Other expenses 46,170 57,244 54,064
----------- ----------- -----------
130,493 423,732 514,836
----------- ----------- -----------
Net income (loss) $ 218,128 $ 1,519,530 $ (945,801)
=========== =========== ===========
Net income (loss) per Unit of
Limited Partnership Interest
and General Partner Unit
equivalent (Notes 1 and 7) $ 39.64 $ 128.38 $ (42.92)
=========== =========== ===========
See notes to financial statements.
F-4
<PAGE>
F-1000 Futures Fund L.P., Series IX
Statement of Partners' Capital
for the years ended December 31, 1996,
1995 and 1994
Limited General
Partners Partner Total
Partners' capital at
December 31, 1993 $ 22,082,051 $ 258,726 $ 22,340,777
Net loss (935,114) (10,687) (945,801)
Redemption of 8,933
Units of Limited
Partnership Interest (8,875,467) (8,875,467)
------------ ------------ ------------
Partners' capital at
December 31, 1994 12,271,470 248,039 12,519,509
Net income 1,487,564 31,966 1,519,530
Redemption of 2,949
Units of Limited
Partnership Interest
and General Partner
redemption representing
146 Unit equivalents (3,222,282) (164,180) (3,386,462)
------------ ------------ ------------
Partners' capital at
December 31, 1995 10,536,752 115,825 10,652,577
Net income 214,045 4,083 218,128
Redemption of 2,810 Units of
Limited Partnership Interest (3,113,939) (3,113,939)
------------ ------------ ------------
Partners' capital at
December 31, 1996 $ 7,636,858 $ 119,908 $ 7,756,766
============ ============ ============
See notes to financial statements.
F-5
<PAGE>
F-1000 Futures Fund L.P.,
Series IX
Notes to Financial Statements
1. Partnership Organization:
F-1000 Futures Fund L.P., Series IX (the "Partnership") is a limited
partnership which was organized on August 25, 1992 under the partnership laws
of the State of New York to engage in the speculative trading of a
diversified portfolio of commodity interests including futures contracts,
options and forward contracts. The commodity interests that are traded by the
Partnership are volatile and involve a high degree of market risk. The
Partnership maintains a portion of its assets in interest payments stripped
from U.S. Treasury Bonds under the Treasury's STRIPS program which payments
are due approximately six years from the date trading commenced ("Zero
Coupons"). The Partnership was authorized to sell 50,000 Units during the
public offering period.
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 at the end of the month in which the Zero
Coupons purchased by the Partnership come due (May 1999), or upon the earlier
occurrence of certain other circumstances set forth 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.
F-6
<PAGE>
F-1000 Futures Fund L.P.,
Series IX
Notes to Financial Statements
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 original issue discount on the Zero Coupons is being amortized over
their life using the interest method and is included in interest income.
d.Zero Coupons are recorded in the statement of financial condition at market
value. Realized gain (loss) on the sale of Zero Coupons is determined on
the amortized cost basis of the Zero Coupons at the time of sale.
e.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 reported amounts of revenues
and expenses during the reporting period. Actual results could differ from
these estimates.
3. Agreements:
a.Limited Partnership Agreement:
The Limited Partnership Agreement provides that the General Partner shall
manage the business of the Partnership and may make all trading decisions
for the Partnership.
b.Management Agreements:
The General Partner, on behalf of the Partnership, has entered into
Management Agreements with Rabar Market Research, Inc. and Trendview
Management, Inc. (collectively, the "Advisors"), registered commodity
trading advisors. The Advisors are not affiliated with one another and none
is affiliated with the General Partner or SB and are not responsible for
the organization or operation of the Partnership. The Partnership will pay
each Advisor a monthly management fee equal to 1/6 of 1% (2% per year) of
Net Assets allocated to the Advisor as of the end of each month. In
addition, the Partnership is obligated to pay each Advisor an incentive
fee, payable quarterly, equal to 20% of the New Trading Profits of the
Partnership.
F-7
<PAGE>
F-1000 Futures Fund L.P.,
Series IX
Notes to Financial Statements
c.Customer Agreement:
The Partnership has entered into a Customer Agreement, which was assigned
to SB, which provides that the Partnership will pay SB a monthly brokerage
fee equal to .71 of 1% (8.5% per year) of month-end Net Assets, in lieu of
brokerage commissions on a per trade basis. The Partnership will pay for
National Futures Association ("NFA") fees, exchange and clearing fees,
user, give-up and floor brokerage fees. SB will pay a portion of such
brokerage fees to its financial consultants who have sold Units in the
Partnership. All of the Partnership's assets are deposited in the
Partnership's account at SB. The Partnership maintains a portion of these
assets in Zero Coupons and a portion in cash. The Partnership's cash is
deposited by SB in segregated bank accounts as required by Commodity
Futures Trading Commission regulations. At December 31, 1996 and 1995, the
amount of cash held for margin requirements was $340,672 and $703,293,
respectively. Brokerage fees will be paid for the life of the Partnership,
although the rate at which such fees are paid may be changed. SB has agreed
to pay the Partnership interest on 75% 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. The Customer Agreement
between the Partnership and SB gives the Partnership the legal right to net
unrealized gains and losses. The Customer Agreement may be terminated upon
notice 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.
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, 1996 and 1995, was $107,352 and $440,692,
respectively, and the average fair value during the years then ended, based
on monthly calculation, was $204,330 and $384,034, respectively.
F-8
<PAGE>
F-1000 Futures Fund L.P.,
Series IX
Notes to Financial Statements
5. Distributions and Redemptions:
Distributions of profits, if any, will be made at the sole discretion of the
General Partner and at such times as the General Partner may decide.
Beginning with the fiscal quarter ending at least 6 months after the
Partnership commences trading operations, a limited partner may require the
Partnership to redeem his Units at their Net Asset Value as of the last day
of a fiscal quarter on 15 days' notice to the General Partner. Redemption
fees equal to 4%, 3%, 2% and 1% of Net Asset Value per Unit redeemed were
charged to any limited partner who redeemed his Units on the first (September
30, 1993), second (December 31, 1993), third (March 31, 1994) or fourth (June
30, 1994) possible redemption date, respectively. Thereafter, no redemption
fee will be charged. During 1994, SB received redemption fees of $52,854.
Redemptions of partial Units or of less than all the Units owned by a limited
partner are not permitted except at the sole discretion of the General
Partner.
6. Organization and Offering Costs:
Offering and organization expenses of $391,118 relating to the issuance and
marketing of the Units offered to the public were paid by SB's predecessor.
The Partnership is reimbursing SB for all such expenses from the interest
earned on funds held in its account beginning with the second month of
trading. The Partnership is charged interest at the prime rate on the unpaid
organization expense balance. This interest expense of $0, $4,683, and
$13,741 in 1996, 1995 and 1994, respectively, has been included in
organization expense.
F-9
<PAGE>
F-1000 Futures Fund L.P.,
Series IX
Notes to Financial Statements
7. Net Asset Value Per Unit:
Changes in the net asset value per Unit of Partnership interest for the years
ended December 31,1996, 1995 and 1994 were as follows:
1996 1995 1994
Net realized and
unrealized gains $ 12.46 $ 29.80 $ 15.46
Net realized and
unrealized gains
(losses) on Zero Coupons (14.87) 79.53 (81.07)
Interest income 56.98 56.44 50.31
Expenses (14.93) (37.39) (27.62)
------------ ------------ ------------
Increase (decrease)
for year 39.64 128.38 (42.92)
Net asset value per
Unit, beginning of year 1,124.52 996.14 1,039.06
------------ ------------ ------------
Net asset value per
Unit, end of year $ 1,164.16 $ 1,124.52 $ 996.14
============ ============ ============
8. Guarantee:
Smith Barney Holdings, Inc. has agreed to contribute up to $50,000,000 to the
Partnership's capital without recourse to the Partnership, the General
Partner or SB to enable the Partnership to meet its margin obligations to SB.
As a result of the agreement, the Partnership should not have to liquidate
its Zero Coupons prior to their due date except to fund redemptions, and
investors who remain limited partners until dissolution of the Partnership
should receive an amount at least equal to their initial investment.
9. 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 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.
F-10
<PAGE>
F-1000 Futures Fund L.P.,
Series IX
Notes to Financial Statements
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 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. These monitoring systems allow the General Partner to
statistically analyze actual trading results with riskadjusted performance
indicators and correlation statistics. In addition, on-line monitoring
systems provide account analysis on futures, forwards and options positions
by sector, margin requirements, gain and loss transactions and collateral
positions.
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, 1996, the notional or
contractual amounts of the Partnership's commitment to purchase and sell
these instruments was $23,854,687 and $6,255,513, respectively.
F-11
<PAGE>
F-1000 Futures Fund L.P.,
Series IX
Notes to Financial Statements
All of these instruments mature within one year of December 31, 1996.
However, due to the nature of the Partnership's business, these instruments
may not be held to maturity. At December 31, 1996, the fair value of the
Partnership's derivatives, including options thereon, was $107,352, as
detailed below.
Notional or Contractual
Amount of Commitments
To Purchase To Sell Fair Value
Currencies
-Exchange Traded Contracts $ 2,001,920 $ 2,789,567 $ 43,323
-OTC Contracts 18,675 18,675 0
Energy 513,000 0 10,109
Interest Rate Non-U.S 20,264,181 632,942 20,305
Grains 0 453,721 2,914
Metals 630,301 1,900,393 15,219
Indices 88,020 433,390 16,119
Softs 51,640 26,025 1,655
Livestock 286,950 800 (2,292)
----------- ----------- -----------
Total $23,854,687 $ 6,255,513 $ 107,352
=========== =========== ===========
F-12
<PAGE>
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 Trendview Management, Inc. and Rabar Market Research, Inc.
(collectively 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." Brokerage commissions and clearing fees of $271,097
were paid for the year ended December 31, 1996. Management fees and incentive
fees of $56,703 and $20,099, respectively, were paid to the Advisors for the
year ended December 31, 1996.
15
<PAGE>
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 partnership interest equivalent to
103 (1.5%) Units of Limited Partnership Interest.
(c). Changes in control. None.
Item 13. Certain Relationships 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 11. Executive Compensation."
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K.
(a) (1) Financial Statements:
Statement of Financial Condition at December 31, 1996 and
1995.
Statement of Income and Expenses for the years ended
December 31, 1996, 1995 and 1994.
16
<PAGE>
Statement of Partners' Capital for the years ended December
31, 1996, 1995 and 1994.
(2) Financial Statement Schedules: None.
(3) Exhibits:
3.1 - Limited Partnership Agreement (filed as Exhibit
3.1 - to the Registration Statement on Form S-1
(File No. 33-52460) and incorporated herein by
reference).
3.2 - Certificate of Limited Partnership of the
Partnership as filed in the office of the County
Clerk of New York County on August 25, 1992
(filed as Exhibit 3.2 to the Registration
Statement on Form S-1 (File No. 33-52460 and
incorporated herein by reference).
10.1 - Customer Agreement between the Partnership and
Smith Barney Shearson Inc. (filed as Exhibit 10.1
to the Registration Statement on Form S-1 (File
No. 33-52460) and incorporated herein by
reference).
10.3 - Escrow Instructions relating to escrow of
subscription funds (filed as Exhibit 10.3 to the
Registration Statement on Form S-1 (File No. 33-
52460) and incorporated herein by reference).
10.5 - Management Agreement among the Partnership, the
General Partner and A.O. Management Corp. (filed
17
<PAGE>
as Exhibit 10.5 to the Registration Statement on
Form S-1 (File No. 33-52460) and incorporated
herein by reference).
10.6 - Management Agreement among the Partnership, the
General Partner and PRAGMA, Inc. (filed as Exhibit
10.6 to the Registration Statement on Form S-1
(File No. 33-52460) and incorporated herein by
reference).
10.7 - Management Agreement among the Partnership, the
General Partner and Rabar Market Research, Inc.
(filed as Exhibit 10.7 to the Registration
Statement on Form S-1 (Filed No. 33-52460) and
incorporated herein by reference).
10.8 - Management Agreement among the Partnership, the
General Partner and Trendview Management, Inc.
(filed as Exhibit 10.8 to the Registration
Statement on Form S-1 (File No. 33-52460) and
incorporated herein by reference).
10.9 - Letter dated September 7, 1993 from the General
Partner to A.O. Management Corp. terminating the
Management Agreement (filed as Exhibit 10.9 to Form
10-K for the period ended December 31, 1993 and
incorporated herein by reference).
10.10- Management Agreement among the Partnership, the
General Partner and Reynwood Trading Corp. (filed
as Exhibit 10.10 to Form 10-K for the period ended
18
<PAGE>
December 31, 1993 and incorporated herein by reference).
10.11- Letter dated July 29, 1994 from the General Partner to PRAGMA
INC. terminating the Management Agreement (filed as Exhibit
10.11 to Form 10-K for the year ended December 31, 1994 and
incorporated herein by reference).
10.12- Management Agreement among the Partnership, the General
Partner and Friedberg Commodity Management (filed as Exhibit
10.12 to Form 10-K for the year ended December 31, 1994 and
incorporated herein by reference).
10.13- Letters dated February 16, 1995 from the General
Partner to Rabar Market Research, Inc., Trendview
Management, Inc. and Friedberg Commodity
Management, Inc. extending Management Agreements to
June 30, 1995 (filed as Exhibit 10.13 to Form
10-K for the year ended December 31, 1995 and
incorporated herein by reference).
10.14- Letter dated March 31, 1995 from the General
Partner to Friedberg Commodity Management, Inc.
terminating the Management Agreement (filed
herein).
(b) Reports on 8-K: None Filed.
19
<PAGE>
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
20
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement 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 24th day of March 1997.
F-1000 FUTURES FUND L.P., SERIES IX
By: Smith Barney Futures Management Inc.
(General Partner)
By /s/ David J. Vogel
David J. Vogel, President & Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
/s/ David J. Vogel /s/ Jack H. Lehman III
David J. Vogel, Jack H. Lehman III
Director, Principal Executive Chairman and Director
Officer and President
/s/ Michael Schaefer /s/ Daniel A. Dantuono
Michael Schaefer Daniel A. Dantuono
Director Treasurer, Chief Financial
Officer and Director
/s/ Philip M. Waterman, Jr. /s/ Daniel R. McAuliffe, Jr.
Philip M. Waterman, Jr. Daniel R. McAuliffe, Jr.
Director and Vice-Chairman Director
/s/ Steve J. Keltz /s/ Shelley Ullman
Steve J. Keltz Shelley Ullman
Secretary and Director Director
21
<PAGE>
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<NAME> F-1000 FUTURES FUND L.P., SERIES IX
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<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
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