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 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 No. 0-23826
DEAN WITTER WORLD CURRENCY FUND L.P.
(Exact name of registrant as specified in its charter)
Delaware 13-3700691
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
No.)
c/o Demeter Management Corporation
Two World Trade Center, 62 Fl., New York, NY 10048
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 392-5454
(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 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
<PAGE>
<TABLE>
DEAN WITTER WORLD CURRENCY FUND L.P.
INDEX TO QUARTERLY REPORT ON FORM 10-Q
June 30, 1998
<CAPTION>
PART I. FINANCIAL INFORMATION
<S> <C>
Item 1. Financial Statements
Statements of Financial Condition June 30, 1998
(Unaudited) and December 31, 1997....................2
Statements of Operations for the Quarters Ended
June 30, 1998 and 1997 (Unaudited)...................3
Statements of Operations for the Six Months Ended
June 30, 1998 and 1997 (Unaudited)...................4
Statements of Changes in Partners' Capital for the
Six Months Ended June 30, 1998 and 1997
(Unaudited)..........................................5
Statements of Cash Flows for the Six Months Ended
June 30, 1998 and 1997 (Unaudited)...................6
Notes to Financial Statements (Unaudited).........7-11
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.12-17
Part II. OTHER INFORMATION
Item 1. Legal Proceedings................................18
Item 6. Exhibits and Reports on Form 8-K.................19
</TABLE>
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
DEAN WITTER WORLD CURRENCY FUND L.P.
STATEMENTS OF FINANCIAL CONDITION
<CAPTION>
June 30, December 31,
1998 1997
$ $
(Unaudited)
ASSETS
<S> <C> <C>
Equity in Commodity futures trading accounts:
Cash 29,379,174 31,327,827
Net unrealized gain on open contracts664,184 775,529
Net option premiums 254,238 49,687
Total Trading Equity 30,297,596 32,153,043
Interest receivable (DWR) 93,404 106,973
Due from DWR 49,606 -
Total Assets 30,440,606 32,260,016
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Redemptions payable 254,435 305,335
Accrued management fees 76,008 80,650
Accrued administrative expenses 37,241 -
Total Liabilities 367,684 385,985
Partners' Capital
Limited Partners (28,010.066 and
30,865.833 Units, respectively) 28,830,066 30,674,029
General Partner (1,207.506 Units) 1,242,856 1,200,002
Total Partners' Capital 30,072,922 31,874,031
Total Liabilities and Partners' Capital 30,440,606 32,260,016
NET ASSET VALUE PER UNIT 1,029.28 993.79
<FN>
The accompanying notes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER WORLD CURRENCY FUND L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
For the Quarters Ended June 30,
1998 1997
$ $
REVENUES
<S> <C> <C>
Trading profit (loss):
Realized 2,408,497 (758,374)
Net change in unrealized (590,272) 992,899
Total Trading Results 1,818,225 234,525
Interest Income (DWR) 285,996 310,129
Total Revenues 2,104,221 544,654
EXPENSES
Brokerage commissions (DWR) 301,092 241,038
Management fees 221,632 225,665
Administrative expenses 18,385 18,808
Transaction fees and costs 17,391 19,802
Total Expenses 558,500 505,313
NET INCOME 1,545,721 39,341
NET INCOME ALLOCATION
Limited Partners
1,481,122 38,035
General Partner
64,599 1,306
NET INCOME PER UNIT
Limited Partners
53.50 1.08
General Partner
53.50 1.08
<FN>
The accompanying notes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER WORLD CURRENCY FUND L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
For the Six Months Ended June 30,
1998 1997
$ $
REVENUES
<S> <C> <C>
Trading profit (loss):
Realized 1,500,178 6,467,810
Net change in unrealized (111,345) (337,792)
Total Trading Results 1,388,833 6,130,018
Interest Income (DWR) 592,578 614,400
Total Revenues 1,981,411 6,744,418
EXPENSES
Brokerage commissions (DWR) 519,850 476,898
Management fees 449,681 457,329
Administrative expenses 37,246 37,436
Transaction fees and costs 29,107 35,022
Incentive fees - 489,505
Total Expenses 1,035,884 1,496,190
NET INCOME 945,527 5,248,228
NET INCOME ALLOCATION
Limited Partners
902,673 5,076,625
General Partner
42,854 171,603
NET INCOME PER UNIT
Limited Partners
35.49 142.11
General Partner
35.49 142.11
<FN>
The accompanying notes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER WORLD CURRENCY FUND L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For the Six Months Ended June 30, 1998 and 1997
(Unaudited)
<CAPTION>
Units of
Partnership Limited General
Interest Partners Partner Total
<S> <C> <C> <C>
<C>
Partners' Capital,
December 31, 1996 37,200.115 $25,668,776 $861,155
$26,529,931
Net Income - 5,076,625 171,603
5,248,228
Redemptions (3,105.235) (2,617,412) -
(2,617,412)
Partners' Capital,
June 30, 1997 34,094.880 $28,127,989 $1,032,758
$29,160,747
Partners' Capital,
December 31, 1997 32,073.339 $30,674,029 $1,200,002
$31,874,031
Net Income - 902,673 42,854
945,527
Redemptions (2,855.767) (2,746,636) -
(2,746,636)
Partners' Capital,
June 30, 1998 29,217.572 $28,830,066 $1,242,856
$30,072,922
<FN>
The accompanying notes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER WORLD CURRENCY FUND L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
For the Six Months Ended June 30,
1998 1997
$ $
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income 945,527 5
,248,228
Noncash item included in net income:
Net change in unrealized 111,345 337,792
(Increase)decrease in operating assets:
Net option premiums (204,551) 230,200
Interest receivable (DWR) 13,569 (8,084)
Due from DWR (49,606) 40,800
Increase (decrease) in operating liabilities:
Accrued management fees (4,642) 6,279
Accrued administrative expenses 37,241 (9,740)
Accrued brokerage commissions (DWR)- (15,012)
Accrued transaction fees and costs -
(805)
Net cash provided by operating activities 848,883 5
,829,658
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in redemptions payable (50,900) (
137,473)
Redemption of units (2,746,636) (
2,617,412)
Net cash used for financing activities (2,797,536) (
2,754,885)
Net increase (decrease) in cash (1,948,653) 3
,074,773
Balance at beginning of period 31,327,827 2
5,825,801
Balance at end of period 29,379,174 2
8,900,574
<FN>
The accompanying notes are an integral part
of these financial statements.
</TABLE>
<PAGE>
DEAN WITTER WORLD CURRENCY FUND L.P.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
The financial statements include, in the opinion of management,
all adjustments necessary for a fair presentation of the results
of operations and financial condition of Dean Witter World
Currency Fund L.P. (the "Partnership"). The financial statements
and condensed notes herein should be read in conjunction with the
Partnership's December 31, 1997 Annual Report on Form 10-K.
1. Organization
Dean Witter World Currency Fund L.P. is a limited partnership
organized to engage in the speculative trading of commodity
futures contracts, commodity options contracts and forward
contracts on foreign currencies (collectively, "futures
interests"). The general partner is Demeter Management
Corporation ("Demeter"). The non-clearing commodity broker is
Dean Witter Reynolds Inc. ("DWR"), with an unaffiliated clearing
commodity broker, Carr Futures Inc. ("Carr"), providing clearing
and execution services. Both Demeter and DWR are wholly-owned
subsidiaries of Morgan Stanley Dean Witter & Co. ("MSDW").
Demeter has retained John W. Henry & Company, Inc. ("JWH") and
Millburn Ridgefield Corporation as the trading advisors of the
Partnership.
2. Related Party Transactions
The Partnership's cash is on deposit with DWR and Carr in
commodity trading accounts to meet margin requirements as needed.
<PAGE>
DEAN WITTER WORLD CURRENCY FUND L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DWR pays interest on these funds based on current 13-week U.S.
Treasury bill rates. Brokerage expenses incurred by the
Partnership are paid to DWR.
3. Financial Instruments
The Partnership trades commodity futures, options and forward
contracts on foreign currencies. Futures, options and forwards
represent contracts for delayed delivery of an instrument at a
specified date and price. Risk arises from changes in the value
of these contracts and the potential inability of counterparties
to perform under the terms of the contracts. There are numerous
factors which may significantly influence the market value of
these contracts, including interest rate volatility. At June 30,
1998 and December 31, 1997, open contracts were:
Contract or Notional Amount
June 30, 1998 December 31, 1997
$ $
Off-Exchange-Traded
Forward Currency Contracts
Commitments to Purchase 125,628,000 56,832,000
Commitments to Sell 184,064,000 114,502,000
A portion of the amounts indicated as off-balance-sheet risk in
forward currency contracts is due to offsetting forward
commitments to purchase and to sell the same currency on the same
date in the future. These commitments are economically
<PAGE>
DEAN WITTER WORLD CURRENCY FUND L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
offsetting, but are not offset in the forward market until the
settlement date.
The net unrealized gains on open contracts are reported as a
component of "Equity in Commodity futures trading accounts" on
the Statements of Financial Condition and totaled $664,184 and
$775,529 at June 30, 1998 and December 31, 1997, respectively.
Of the $664,184 net unrealized gain on open contracts at June 30,
1998, $13,493 related to exchange-traded futures contracts and
$650,691 related to off-exchange-traded forward currency
contracts.
Of the $775,529 net unrealized gain on open contracts at December
31, 1997, $(24,755) related to exchange-traded futures contracts
and $800,284 related to off-exchange-traded forward currency
contracts.
Exchange-traded futures contracts held by the Partnership at June
30, 1998 and December 31, 1997 mature through September 1998 and
March 1998, respectively. Off-exchange-traded forward currency
contracts held by the Partnership at June 30, 1998 and December
31, 1997 mature through September 1998 and March 1998,
respectively.
<PAGE>
DEAN WITTER WORLD CURRENCY FUND L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The contract amounts in the above table represent the
Partnership's extent of involvement in a particular class of
financial instrument, but not the credit risk associated with
counterparty non-performance. The credit risk associated with
these instruments is limited to the amounts reflected in the
Partnership's Statements of Financial Condition.
The Partnership also has credit risk because DWR and Carr act as
the futures commission merchants or the counterparties, with
respect to most of the Partnership's assets. Exchange-traded
futures and futures styled options contracts are marked to market
on a daily basis, with variations in value settled on a daily
basis. Each of DWR and Carr, as a futures commission merchant
for the Partnership's exchange-traded futures and futures styled
options contracts, are required, pursuant to regulations of the
Commodity Futures Trading Commission ("CFTC"), to segregate from
their own assets and for the sole benefit of their commodity
customers, all funds held by them with respect to exchange-traded
futures and futures styled options contracts, including an amount
equal to the net unrealized gains on all open futures and futures
styled options contracts, which funds, in the aggregate, totaled
$29,392,667 and $31,303,072 at June 30, 1998 and December 31,
1997, respectively. With respect to the Partnership's off-
exchange-traded forward currency contracts, there are no daily
settlements of variations in value nor is there any requirement
<PAGE>
DEAN WITTER WORLD CURRENCY FUND L.P.
NOTES TO FINANCIAL STATEMENTS - (CONCLUDED)
that an amount equal to the net unrealized gain on open forward
contracts be segregated. With respect to those off-exchange-
traded forward currency contracts, the Partnership is at risk to
the ability of Carr, the sole counterparty on all such contracts,
to perform. Carr's parent, Credit Agricole Indosuez, has
guaranteed to the Partnership, payment of the net liquidating
value of the transactions in the Partnership's account with Carr
(including foreign currency contracts).
For the six months ended June 30, 1998 and the year ended
December 31, 1997, the average fair value of financial
instruments held for trading purposes was as follows:
June 30, 1998
Assets Liabilities
$ $
Exchange-Traded Contracts
Options on Financial Futures 12,058,000 -
Off-Exchange-Traded Forward
Currency Contracts 144,891,000 175,890,000
December 31, 1997
Assets Liabilities
$ $
Exchange-Traded Contracts
Financial Futures 6,501,000 19,214,000
Off-Exchange-Traded Forward
Currency Contracts 130,462,000 152,556,000
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity - The Partnership's assets are deposited with DWR, as
non-clearing broker and with Carr, as clearing broker in separate
futures interest trading accounts, and are used by the
Partnership as margin to engage in futures interest trading.
Such assets are held in either non-interest bearing bank accounts
or in securities approved by the CFTC for investment of customer
funds. The Partnership's assets held by DWR and Carr may be used
as margin solely for the Partnership's trading. Since the
Partnership's sole purpose is to trade in futures interests, it
is expected that the Partnership will continue to own such liquid
assets for margin purposes.
The Partnership's investment in futures interests may be
illiquid. If 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 and
result in restrictions on redemptions.
There is no limitation on daily price moves in trading forward
contracts on foreign currencies. The markets for some world
currencies have low trading volume and are illiquid, which may
<PAGE>
prevent the Partnership from trading in potentially profitable
markets or prevent the Partnership from promptly liquidating
unfavorable positions in such markets and subjecting it to
substantial losses. Either of these market conditions could
result in restrictions on redemptions.
Capital Resources. The Partnership does not have, nor does it
expect to have, any capital assets. Redemptions of Units of
Limited Partnership Interest in the future will affect the amount
of funds available for investment in futures interests in
subsequent periods. Since they are at the discretion of the
Limited Partners, it is not possible to estimate the amount and
therefore, the impact of future redemptions.
Results of Operations
For the Quarter and Six Months Ended June 30, 1998
For the quarter ended June 30, 1998, the Partnership recorded
total trading revenues including interest income of $2,104,221
and posted an increase in Net Asset Value per Unit. The most
significant gains were recorded from short positions in the South
African rand held throughout the quarter. Gains were recorded in
April as this currency weakened versus the U.S. dollar and in May
from a devaluation relative to the U.S. dollar late in the month.
Short positions in the rand continued to profit as the value of
the South African rand trended sharply lower relative to the U.S.
dollar in June despite intervention by that country's central
bank late in the month. Additional gains were recorded from
short Japanese yen positions as the value of the yen fell to a
<PAGE>
seven and a half year low versus the U.S. dollar during May amid
growing concerns regarding the Asian economic crisis. Short
Japanese yen positions held during June contributed additional
profits as the value of the yen decreased versus the U.S. dollar
despite coordinated intervention by the U.S. and Japanese
governments during the third week of June in an effort to halt
the downward slide of the yen. Smaller currency gains were
recorded from short positions in the Australian and New Zealand
dollars. A portion of the Partnership's overall gains for the
second quarter was offset by losses recorded from short positions
in the German mark and Swiss franc as the value of these
currencies strengthened relative to other world currencies in
April and May. Transactions involving the German mark continued
to result in losses during June. Smaller losses were experienced
from long British pound positions held during May as the value of
the pound decreased relative to the U.S. dollar, and short pound
positions held during June as the value of the pound increased
sharply during mid-month. Total expenses for the three months
ended June 30, 1998 were $558,500, resulting in net income of
$1,545,721. The value of an individual Unit in the Partnership
increased from $975.78 at March 31, 1998 to $1,029.28 at June 30,
1998.
For the six months ended June 30, 1998, the Partnership recorded
total trading revenues including interest income of $1,981,411
and posted an increase in Net Asset Value per Unit. The most
significant trading gains were recorded from short South African
rand positions as its value moved sharply lower relative to the
<PAGE>
U.S. dollar during the second quarter. Additional gains were
recorded from short Japanese yen positions as the U.S. dollar
strengthened versus the yen during March. Short Japanese yen
positions continued to profit during the second quarter as the
yen reached a seven and a half year low relative to the U.S.
dollar during May and preceded lower until mid-June. A portion
of the Partnership's overall gains was offset by losses from
trading the German mark and British pound throughout the second
quarter. Smaller currency gains recorded from short Australian
and New Zealand dollar positions also contributed to the
Partnership's profits during the first half of 1998. Total
expenses for the six months ended June 30, 1998 were $1,035,884,
resulting in net income of $945,527. The value of an individual
Unit in the Partnership increased from $993.79 at December 31,
1997 to $1,029.28 at June 30, 1998.
For the Quarter and Six Months Ended June 30, 1997
For the quarter ended June 30, 1997, the Partnership recorded
total trading revenues including interest income of $544,654 and
posted an increase in Net Asset Value per Unit. The most
significant trading gains were recorded during April from short
positions in the Japanese yen as the value of the U.S. dollar
continued to strengthen versus the yen. Additional gains were
recorded in the Japanese yen during June as long positions
profited from an increase in value relative to the U.S. dollar.
Trading gains were also recorded during these same months from
transactions involving the German mark. Profits were recorded
from long positions in the British pound as its value increased
<PAGE>
versus the U.S. dollar during June. Smaller gains were recorded
from transactions involving the Spanish peseta during June. A
portion of these gains was offset by losses recorded from trading
the Swiss franc during June as its value moved in a choppy
pattern. Smaller losses were experienced from short positions in
the Singapore dollar as its value moved higher relative to the
U.S. dollar during May and June. Total expenses for the three
months ended June 30, 1997 were $505,313, generating net income
of $39,341. The value of an individual Unit in the Partnership
increased from $854.20 at March 31, 1997 to $855.28 at June 30,
1997.
For the six months ended June 30, 1997, the Partnership recorded
total trading revenues including interest income of $6,744,418
and posted an increase in Net Asset Value per Unit. The most
significant trading gains were recorded during January and
February as a strengthening in the value of the U.S. dollar
relative to most other major currencies emerged. Additional
gains were recorded from transactions involving the Japanese yen
and German mark during April and June. Smaller profits were
experienced from short positions in the Singapore dollar as its
value decreased versus the U.S. dollar during the first four
months of the year. A small portion of the Partnership's overall
gains was offset by losses recorded from long positions in the
British pound during January as its value reversed lower after
previously trending higher. Smaller losses were experienced from
transactions involving the Australian dollar during February,
March and April as its value moved in a trendless pattern. Total
<PAGE>
expenses for the six months ended June 30, 1997 were $1,496,190
resulting in net income of $5,248,228. The value of an
individual Unit in the Partnership increased from $713.17 at
December 31, 1996 to $855.28 at June 30, 1997.
<PAGE>
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Previously reported. See Form 10-Q for the quarter ended March
31, 1998.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
Reports on Form 8-K. - No such reports have been
filed for the quarter ended June 30, 1998.
<PAGE>
SIGNATURE
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.
Dean Witter World Currency Fund
L.P. (Registrant)
By: Demeter Management Corporation
(General Partner)
August 12, 1998 By: /s/ Lewis A. Raibley, III
Lewis A. Raibley, III
Chief Financial Officer
The General Partner which signed the above is the only party
authorized to act for the Registrant. The Registrant has no
principal executive officer, principal financial officer,
controller, or principal accounting officer and has no Board of
Directors.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from Dean
Witter World Currency Fund L.P. and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 29,379,174
<SECURITIES> 0
<RECEIVABLES> 143,010<F1>
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 30,440,606<F2>
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 30,440,606<F3>
<SALES> 0
<TOTAL-REVENUES> 1,981,411<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,035,884
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 945,527
<INCOME-TAX> 0
<INCOME-CONTINUING> 945,527
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 945,527
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Receivables include interest receivable of $93,404 and due from DWR of
$49,606.
<F2)In addition to cash and receivables, total assets include net
unrealized gain on open contracts of $664,184 and net option premiums of
$254,238.
<F3>Liabilities include redemptions payable of $254,435, accrued management
fees of $76,008, and accrued administrative expenses of $37,241.
<F4>Total revenues include realized trading revenue of $1,500,178, net
change in unrealized of $(111,345) and interest income of $592,578.
</FN>
</TABLE>
