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 period ended March 31, 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. 33-71654
DWFCM INTERNATIONAL ACCESS 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>
DWFCM INTERNATIONAL ACCESS FUND L.P.
INDEX TO QUARTERLY REPORT ON FORM 10-Q
March 31, 1998
<CAPTION>
PART I. FINANCIAL INFORMATION
<S> <C>
Item 1. Financial Statements
Statements of Financial Condition
March 31, 1998 (Unaudited) and December 31, 1997 .....2
Statements of Operations for the Quarters Ended
March 31, 1998 and 1997 (Unaudited)...................3
Statements of Changes in Partners' Capital
for the Quarters Ended March 31, 1998 and 1997
(Unaudited)...........................................4
Statements of Cash Flows for the Quarters Ended
March 31, 1998 and 1997 (Unaudited)...................5
Notes to Financial Statements (Unaudited)..........6-10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations..11-14
Part II. OTHER INFORMATION
Item 1. Legal Proceedings..............................15-16
Item 6. Exhibits and Reports on Form 8-K..................17
</TABLE>
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DWFCM INTERNATIONAL ACCESS FUND L.P.
STATEMENTS OF FINANCIAL CONDITION
<CAPTION>
March 31, December 31,
1998 1997
$ $
(Unaudited)
ASSETS
<S> <C> <C>
Equity in Commodity futures trading accounts:
Cash 47,337,872 43,146,223
Net unrealized gain (loss) on open contracts (1,964,289) 5,689,588
Total Trading Equity 45,373,583 48,835,811
Interest receivable (DWR) 158,334 155,295
Total Assets 45,531,917 48,991,106
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Redemptions payable 668,479 343,450
Accrued management fee (DWFCM) 113,566 122,264
Accrued administrative expenses 105,345 85,345
Incentive fee payable (DWFCM) - 437,418
Total Liabilities 887,390 988,477
Partners' Capital
Limited Partners (30,825.213 and
31,675.130 Units, respectively) 43,638,811 46,949,644
General Partner (710.409 Units) 1,005,716 1,052,985
Total Partners' Capital 44,644,527 48,002,629
Total Liabilities and Partners' Capital 45,531,917 48,991,106
NET ASSET VALUE PER UNIT 1,415.69 1,482.22
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<pae>
<TABLE>
DWFCM INTERNATIONAL ACCESS FUND L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
For the Quarters Ended March 31,
1998 1997
$ $
REVENUES
<S> <C> <C>
Trading profit (loss):
Realized 6,024,165 5,772,900
Net change in unrealized (7,653,877) (1,597,028)
Total Trading Results (1,629,712) 4,175,872
Interest Income (DWR) 459,165 476,296
Total Revenues (1,170,547) 4,652,168
EXPENSES
Brokerage commissions (DWR) 560,939 872,010
Management fee (DWFCM) 346,978 372,673
Transaction fees and costs 47,079 40,458
Administrative expenses 20,000 24,000
Total Expenses 974,996 1,309,141
NET INCOME (LOSS) (2,145,543) 3,343,027
NET INCOME (LOSS) ALLOCATION
Limited Partners (2,098,274)
3,281,790
General Partner
(47,269) 61,237
NET INCOME (LOSS) PER UNIT
Limited Partners (66.53)
86.20
General Partner
(66.53) 86.20
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<pae>
<TABLE>
DWFCM INTERNATIONAL ACCESS FUND L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For the Quarters Ended March 31, 1998 and 1997
(Unaudited)
<CAPTION>
Units of
Partnership Limited General
Interest Partners Partner Total
<S> <C> <C> <C>
<C>
Partners' Capital,
December 31, 1996 38,144.001 $43,960,184 $834,270
$44,794,454
Net Income - 3,281,790 61,237
3,343,027
Redemptions (1,072.207) (1,406,598) -
(1,406,598)
Partners' Capital,
March 31, 1997 37,071.794 $45,835,376 $895,507
$46,730,883
Partners' Capital
December 31, 1997 32,385.539 $46,949,644 $1,052,985
$48,002,629
Net Loss - (2,098,274) (47,269)
(2,145,543)
Redemptions (849.917) (1,212,559) -
(1,212,559)
Partners' Capital
March 31, 1998 31,535.622 $43,638,811 $1,005,716
$44,644,527
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DWFCM INTERNATIONAL ACCESS FUND L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
For the Quarters Ended March 31,
1998 1997
$ $
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income (loss) (2,145,543) 3
,343,027
Noncash item included in net income (loss):
Net change in unrealized 7,653,877 1
,597,028
Increase in operating assets:
Interest receivable (DWR) (3,039) (21,960)
Due from DWR - (64,247)
Increase (decrease) in operating liabilities:
Accrued management fee (DWFCM) (8,698) 3,819
Accrued administrative expenses 20,000 14,823
Incentive fee payable (437,418) -
Accrued brokerage commissions (DWR)- 54,843
Accrued transaction fees and costs -
(2,186)
Net cash provided by operating activities 5,079,179 4
,925,147
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in redemptions payable325,029 (
348,474)
Redemptions of units (1,212,559) (
1,406,598)
Net cash used for financing activities (887,530) (
1,755,072)
Net increase in cash 4,191,649 3
,170,075
Balance at beginning of period 43,146,223 4
4,917,336
Balance at end of period 47,337,872 4
8,087,411
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
DWFCM INTERNATIONAL ACCESS 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 DWFCM International
Access 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
DWFCM International Access Fund L.P. is a limited partnership
organized to engage in speculative trading of futures contracts
and forward contracts, options on futures contracts and physical
commodities, and other commodity interests. The general partner
for the Partnership is Demeter Management Corporation
("Demeter"). The non-clearing commodity broker is Dean Witter
Reynolds Inc. ("DWR"), with an unaffiliated broker, Carr Futures,
Inc. ("Carr"), providing clearing and execution services. The
trading manager is Dean Witter Futures & Currency Management Inc.
("DWFCM"). Demeter, DWR and DWFCM are wholly-owned subsidiaries
of Morgan Stanley Dean Witter & Co. ("MSDW").
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.
DWR pays interest on these funds based on current 13-week U.S.
Treasury Bill rates. Brokerage expenses incurred by the
<PAGE>
DWFCM INTERNATIONAL ACCESS FUND L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Partnership are paid to DWR. Management and incentive fees (if
any) incurred by the Partnership are paid to DWFCM.
3. Financial Instruments
The Partnership trades futures and forward contracts in interest
rates, stock indices, commodities and currencies. Futures 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 March 31, 1998 and December 31, 1997, open
contracts were:
Contract or Notional Amount
March 31, 1998 December 31, 1997
$ $
Exchange-Traded Contracts
Financial Futures:
Commitments to Purchase 6,108,000 18,689,000
Commitments to Sell 42,154,000 -
Commodity Futures:
Commitments to Purchase 3,026,000 1,916,000
Commitments to Sell - 15,338,000
Foreign Futures:
Commitments to Purchase 46,830,000 53,487,000
Commitments to Sell 20,775,000 20,289,000
Off-Exchange-Traded
Forward Currency Contracts
Commitments to Purchase 181,027,000 109,180,000
Commitments to Sell 211,781,000 205,569,000
<PAGE>
DWFCM INTERNATIONAL ACCESS FUND L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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
offsetting, but are not offset in the forward market until the
settlement date.
The net unrealized gain (loss) on open contracts is reported as a
component of "Equity in Commodity futures trading accounts" on
the Statements of Financial Condition and totaled $(1,964,289)
and $5,689,588 at March 31, 1998 and December 31, 1997,
respectively.
Of the $(1,964,289) net unrealized loss on open contracts at
March 31, 1998, $(266,443) related to exchange-traded futures
contracts and $(1,697,846) related to off-exchange-traded forward
currency contracts.
Of the $5,689,588 net unrealized gain on open contracts at
December 31, 1997, $995,339 related to exchange-traded futures
contracts and $4,694,249 related to off-exchange-traded forward
currency contracts.
Exchange-traded futures contracts held by the Partnership at
March 31, 1998 and December 31, 1997, mature through December
1998 and
<PAGE>
DWFCM INTERNATIONAL ACCESS FUND L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
March 1998, respectively. Off-exchange-traded forward currency
contracts held at March 31, 1998 and December 31, 1997 mature
through July 1998 and April 1998, respectively.
The contract amounts in the above table represent the
Partnership's extent of involvement in the particular class of
financial instrument, but not the credit risk associated with
counterparty nonperformance. 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 either DWR or Carr
acts as the futures commission merchant or the counterparty, with
respect to most of the Partnership's assets. Exchange-traded
futures contracts are marked to market on a daily basis, with
variations in value settled on a daily basis. DWR and Carr, as
the futures commission merchants for all of the Partnership's
exchange-traded futures 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 contracts including an amount equal to
the net unrealized gain (loss) on all open futures contracts
which funds totaled $47,071,429 and $44,141,562 at March 31, 1998
and
<PAGE>
DWFCM INTERNATIONAL ACCESS FUND L.P.
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
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 that an amount equal to the net unrealized
gain (loss) 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 Carr's obligations to
the Partnership.
For the quarter ended March 31, 1998 and the year ended December
31, 1997, the average fair value of financial instruments held
for trading purposes was as follows:
March 1998
Assets Liabilities
$ $
Exchange-Traded Contracts:
Financial Futures 22,824,000 10,539,000
Commodity Futures 1,236,000 5,700,000
Foreign Futures 52,707,000 21,950,000
Off-Exchange-Traded Forward
Currency Contracts 162,091,000 216,833,000
December 1997
Assets Liabilities
$ $
Exchange-Traded Contracts:
Financial Futures 18,852,000 25,164,000
Commodity Futures 3,726,000 9,818,000
Foreign Futures 65,551,000 41,413,000
Off-Exchange-Traded Forward
Currency Contracts 156,224,000 189,458,000
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity - The Partnership's assets are on deposit in
separate commodity interest trading accounts with DWR and
Carr, the commodity brokers, and are used by the Partnership
as margin to engage in commodity futures, forward contracts
and other commodity interest trading. DWR and Carr hold
such assets in either designated depositories 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 commodity
futures contracts and other commodity interests, it is
expected that the Partnership will continue to own such
liquid assets for margin purposes.
The Partnership's investment in commodity futures contracts,
forward contracts and other commodity interests may be
illiquid. If the price for 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.
<PAGE>
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 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 additional
Units of Limited Partnership Interest in the future will affect
the amount of funds available for investments in subsequent
periods. As redemptions are at the discretion of Limited
Partners, it is not possible to estimate the amount and
therefore, the impact of future redemptions.
Results of Operations
For the Quarter Ended March 31, 1998
For the quarter ended March 31, 1998, the Partnership's total
trading losses net of interest income were $1,170,547. During the
first quarter, the Partnership posted a loss in Net Asset Value
per Unit. The most significant losses were recorded in currency
markets due primarily to short-term volatility caused by the
economic instability in the Far East. During January, the
previous upward trend in the value of the U.S. dollar reversed
lower in response to the Japanese government's proposed economic
<PAGE>
stimulus package. This reversal resulted in losses for
previously established short Japanese yen positions. Additional
currency losses were recorded in February as the value of the yen
moved without consistent direction. Smaller losses were recorded
from transactions involving the German mark, Australian dollar
and British pound. A portion of these losses was offset by gains
in March from transactions involving the German mark, Swiss franc
and Japanese yen. In metals, losses were recorded from long
silver futures positions as silver prices reversed lower in
February after rallying higher during January. Smaller losses
were recorded from trading base metals futures during March. A
portion of the Partnership's overall losses for the quarter was
offset by gains in financial futures trading. The most
significant gains were recorded from long European bond futures
positions, as well as from long S&P 500 Index futures positions,
as prices in these markets trended higher throughout a majority
of the quarter. In the energy markets, gains were recorded from
short crude and heating oil futures positions as prices trended
lower during January and February before reversing higher during
March. Total expenses for the quarter were $974,996, resulting
in a net loss of $2,145,543. The value of an individual Unit in
the Partnership decreased from $1,482.22 at December 31, 1997 to
$1,415.69 at March 31, 1998.
For the Quarter Ended March 31, 1997
For the quarter ended March 31, 1997, the Partnership's total
trading revenues including interest income were $4,652,168.
During the first quarter, the Partnership posted an increase in
<PAGE>
Net Asset Value per Unit. The most significant trading gains
were recorded in the currency markets as a result of a
strengthening in the value of the U.S. dollar versus most major
European currencies and the Japanese yen during January and
February. Smaller currency gains were recorded from short
positions in the Spanish peseta, Swedish krona and Danish krone.
A portion of these gains was offset by losses from transactions
involving the British pound, as well as the Canadian and
Australian dollars, during March. Gains were recorded in the
metals markets from long base metals futures positions as zinc
and copper prices trended higher during the quarter. Smaller
gains were recorded in the metals markets from short gold futures
positions as gold prices, which began trending lower during late
1996, continued to trend lower in January. A portion of the
Partnership's overall gains for the first quarter was offset by
losses resulting from short-term volatile price movement in
global interest rate and energy futures. Total expenses for the
period were $1,309,141, generating net income of $3,343,027. The
value of an individual Unit in the Partnership increased from
$1,174.35 at December 31, 1996 to $1,260.55 at March 31, 1997.
<PAGE>
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
On September 6, 10, and 20, 1996, and on March 13, 1997,
similar purported class actions were filed in the Superior
Court of the State of California, County of Los Angeles, on
behalf of all purchasers of interests in limited partnership
commodity pools sold by DWR. Named defendants include DWR,
Demeter, DWFCM, MSDW (all such parties referred to hereafter
as the "Dean Witter Parties"), certain limited partnership
commodity pools of which Demeter is the general partner, and
certain trading advisors to those pools. On June 16, 1997,
the plaintiffs in the above actions filed a consolidated
amended complaint, alleging, among other things, that the
defendants committed fraud, deceit, negligent misre-
presentation, various violations of the California
Corporations Code, intentional and negligent breach of
fiduciary duty, fraudulent and unfair business practices,
unjust enrichment, and conversion in the sale and operation
of the various limited partnership commodity pools. Similar
purported class actions were also filed on September 18 and
20, 1996, in the Supreme Court of the State of New York, New
York County, and on November 14, 1996 in the Superior Court
of the State of Delaware, New Castle County, against the
Dean Witter Parties and certain trading advisors on behalf
of all purchasers of interests in various limited
partnership commodity pools sold by DWR. A consolidated and
amended complaint in the action pending in the Supreme Court
<PAGE>
of the State of New York was filed on August 13, 1997,
alleging that the defendants committed fraud, breach of
fiduciary duty, and negligent misrepresentation in the sale
and operation of the various limited partnership commodity
pools. On December 16, 1997, upon motion of the plaintiffs,
the action pending in the Superior Court of the State of
Delaware was voluntarily dismissed without prejudice. The
complaints seek unspecified amounts of compensatory and
punitive damages and other relief. It is possible that
additional similar actions may be filed and that, in the
course of these actions, other parties could be added as
defendants. The Dean Witter Parties believe that they have
strong defenses to, and they will vigorously contest, the
actions. Although the ultimate outcome of legal proceedings
cannot be predicted with certainty, it is the opinion of
management of the Dean Witter Parties that the resolution of
the actions will not have a material adverse effect on the
financial condition or the results of operations of any of
the Dean Witter Parties.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(A) Exhibits - None.
(B) Reports on Form 8-K. - None.
<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.
DWFCM International Access Fund
L.P. (Registrant)
By: Demeter Management Corporation
(General Partner)
May 13, 1998 By: /s/ Patti L. Behnke
Patti L. Behnke
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
DWFCM International Access Fund L.P. and is qualified in its entirety
by reference to such financial instruments.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 47,337,872
<SECURITIES> 0
<RECEIVABLES> 158,334<F1>
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 45,531,917<F2>
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 45,531,917<F3>
<SALES> 0
<TOTAL-REVENUES> (1,170,547)<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 974,996
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,145,543)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,145,543)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,145,543)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Receivables include interest receivable of $158,334.
<F2>In addition to cash and receivables, total assets include net unrealized
loss on open contracts of $(1,964,289).
<F3>Liabilities include redemptions payable of $668,479, accrued management
fee of $113,566 and accrued administrative expenses of $105,345.
<F4>Total revenue includes realized trading revenue of $6,024,165, net
change in unrealized of $(7,653,877) and interest income of $459,165.
</FN>
</TABLE>
