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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JULY 31, 2002
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-9202
THE FUTURE FUND
(Exact name of registrant as specified in its charter)
State of jurisdiction or incorporation (Illinois)
IRS EMPLOYER ID NO. #36-3033727
C/O HEINOLD ASSET MANAGEMENT INC.
ONE FINANCIAL PLACE
440 S. LASALLE ST-21 FLOOR
CHICAGO ILLINOIS 60605
PHONE NUMBER 663-7500
SAME
(Former name, former address and former fiscal year, if changed)
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 shortened 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
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
THE FUTURE FUND
(An Illinois Limited Partnership)
STATEMENTS OF FINANCIAL CONDITION
07/31/02 10/31/01
(UNAUDITED) (AUDITED)
ASSETS
Investments in affiliated general partnerships $ 6,013,754 $ 5,463,508
Due from affiliated broker 3,244,980 4,843,869
Other assets 10,061 24,567
----------- -----------
Total assets $ 9,268,795 $10,331,944
LIABILITIES & PARTNERS' CAPITAL
Brokerage commissions 54,040 60,262
Redemptions payable 277,590 39,439
Management fees 30,559 34,105
Incentive fees 27,677 91,719
Other 4,737 1,397
----------- -----------
Total liabilities 394,603 226,922
Partners' capital:
General Partner (220 unit equivalents outstanding 250,358 263,964
at July 31,2002 and October 31, 2001)
Limited Partners (7,578 and 8,202 units
outstanding at July 31, 2002 and October 31, 2001, respectively) 8,623,834 9,841,058
----------- -----------
TOTAL PARTNERS' CAPITAL 8,874,192 10,105,022
----------- -----------
$ 9,268,795 $10,331,944
=========== ===========
NET ASSET VALUE PER UNIT OUTSTANDING $ 1,137.99 $ 1,199.83
THE ACCOMPANYING NOTES ARE AN INTEGRAL
PART OF THE FINANCIAL STATEMENTS.
-2-
THE FUTURE FUND
(An Illinois Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JULY 31, 2002 and 2001 (UNAUDITED)
REVENUES: 2002 2001
NET REALIZED TRADING GAINS (LOSSES) ON CLOSED
FUTURES AND FORWARD CONTRACTS $1,180,877 $ (75,756)
CHANGE IN NET UNREALIZED APPRECIATION OR DEPRECIATION
ON OPEN FUTURES AND FORWARD CONTRACTS 244,177 229,977
INTEREST INCOME 24,457 69,854
---------- ----------
1,449,511 224,075
EXPENSES:
BROKERAGE COMMISSIONS 154,786 168,039
MANAGEMENT FEE 87,436 94,733
PROFIT SHARE 27,677 0
OTHER ADMINISTRATIVE EXPENSES 4,200 6,300
---------- ----------
NET INCOME (LOSS) $1,175,412 $ (44,997)
NET INCOME (LOSS) TO GENERAL PARTNER $ 31,999 $ (1,151)
NET INCOME (LOSS) TO LIMITED PARTNER $1,143,413 $ (43,848)
CHANGE IN NET ASSET VALUE PER UNIT FOR THE PERIOD $ 145.45 $ (5.23)
THE ACCOMPANYING NOTES ARE AN INTEGRAL
PART OF THE FINANCIAL STATEMENTS.
-3-
THE FUTURE FUND
(An Illinois Limited Partnership)
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED JULY 31, 2002 and 2001 (UNAUDITED)
REVENUES: 2002 2001
NET REALIZED TRADING GAINS (LOSSES) ON CLOSED
FUTURES AND FORWARD CONTRACTS $ 420,023 $ 1,930,912
CHANGE IN NET UNREALIZED APPRECIATION OR DEPRECIATION
ON OPEN FUTURES AND FORWARD CONTRACTS (377,815) 139,664
INTEREST INCOME 76,980 278,498
----------- -----------
119,188 2,349,074
EXPENSES:
BROKERAGE COMMISSIONS 459,468 511,087
MANAGEMENT FEE 258,739 287,597
PROFIT SHARE (64,042) 63,376
OTHER ADMINISTRATIVE EXPENSES 22,494 14,700
----------- -----------
676,659 876,760
NET INCOME (LOSS) $ (557,471) $ 1,472,314
NET INCOME (LOSS) TO GENERAL PARTNER $ (543,865) $ 35,198
NET INCOME (LOSS) TO LIMITED PARTNER $ (13,606) $ 1,437,116
CHANGE IN NET ASSET VALUE PER UNIT FOR THE PERIOD $ (61.84) $ 159.99
THE ACCOMPANYING NOTES ARE AN INTEGRAL
PART OF THE FINANCIAL STATEMENTS.
-3A-
THE FUTURE FUND
(An Illinois Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
FOR THE NINE MONTHS ENDED JULY 31, 2002 (UNAUDITED)
LIMITED GENERAL
PARTNERS PARTNER TOTAL
------------ ------------ ------------
PARTNERS' CAPITAL AT OCTOBER 31, 2001 $ 9,841,058 $ 263,964 $ 10,105,022
(8,202 LIMITED PARTNERSHIP UNITS)
REDEMPTION OF 624 LIMITED PARTNERSHIP UNITS (673,359) 0 (673,359)
NET INCOME (543,865) (13,606) (557,471)
------------------------------------------------
PARTNERS' CAPITAL AT JULY 31,2002 $ 8,623,834 $ 250,358 $ 8,874,192
(7,578 LIMITED PARTNERSHIP UNITS) ================================================
THE ACCOMPANYING NOTES ARE AN INTEGRAL
PART OF THE FINANCIAL STATEMENTS.
-4-
THE FUTURE FUND
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JULY 31, 2002 AND 2001 (UNAUDITED)
2002 2,001
CASH FLOWS FROM OPERATING ACTIVITIES
NET INCOME (LOSS) (557,471) 1,472,314
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS)
TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
DUE FROM AFFILIATED BROKER AND GENERAL PARTNERSHIPS 1,063,149 (550,129)
INCREASE (DECREASE) IN BROKERAGE COMMISSION PAYABLES (6,222) 3,291
INCREASE (DECREASE) IN REDEMPTION PAYABLES 238,151 (95,815)
INCREASE (DECREASE) IN MANAGEMENT FEE PAYABLES (3,546) 2,042
DECREASE IN INCENTIVE FEE PAYABLE (64,042) 0
INCREASE (DECREASE) IN ACCRUED EXPENSES 3,340 (13,935)
--------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 673,359 817,768
CASH FLOWS FROM FINANCING ACTIVITIES
REDEMPTION OF LIMITED PARTNERSHIP UNITS (673,359) (817,768)
--------------------------
NET CASH USED IN FINANCING ACTIVITIES (673,359) (817,768)
CHANGE IN CASH BALANCE (0) 0
THE ACCOMPANYING NOTES ARE AN INTEGRAL
PART OF THE FINANCIAL STATEMENTS
-5-
THE FUTURE FUND
(AN ILLINOIS LIMITED PARTNERSHIP)
NOTES TO FORM 10-Q FINANCIAL STATEMENTS
The unaudited interim condensed consolidated financial statements of the Future
Fund ("the Fund) included herein have been prepared in conformity with
accounting principles generally accepted in the United States for interim
financial information and rule 10-01 of Regulation S-X. Accordingly, they do not
include all the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, the unaudited interim condensed financial statements reflect all
adjustments, which are of a normal recurring nature, necessary for fair
presentation of financial position, results of operations and cash flows of the
Funds for the interim periods presented and are not necessarily indicative of a
full year's results.
In preparing the unaudited interim condensed financials statements, management
is required to make estimates and assumptions that affect the amounts reported
in the financial statements. Actual results could differ from those estimates.
These financial statements should be read in conjunction with the Fund audited
financial statements included in the Fund audited financial statements for the
year ended October 31,2001., from which the accompanying Statement of Financial
Condition was derived.
6
The Future Fund
(An Illinois Limited Partnership)
Notes to Form 10-Q Financial Statements, Continued
Item 2, Management's discussion and analysis of financial condition, and
operating results for the nine months ended July 31, 2002
July 31, 2002 31-Oct-2001
Ending Partners' Capital (Note A) $8,874,192 $10,105,022
NOTE A:
Ending capital at July 31,2002 is lower than ending capital at October
31, 2002 due to unprofitable trading and redemptions during the period. For the
nine month period ending July 31,2002, the Partnership's Net Asset Value per
Unit decreased from $1,199.83 at October 31, 2001 to $1,137.99 at July 31, 2002.
The majority of the losses occurred from trading activities in November where
the NAV decreased by 8.49%. These losses were offset by profitable trading
activities for the quarter end July 31, 2002 were the NAV increased by 14.65%
NOTE B:
Nine months Nine months
ended 7/31/2002 ended 7/31/2001
Net Realized and Unrealized Trading Gains (Losses) on Futures
and Forward Contracts 42,208 2,070,576
Interest income 76,980 278,498
Net realized and unrealized trading gains (losses) on Futures and Forward
Contracts for the nine months ended 7/30/2002 is less than net realized and
unrealized trading gains (losses) on futures and forward contracts for the nine
months ended 7/30/2001 due to less profitable trading during the period.
Interest income is earned on the Partnership's investment in U.S. Treasury bills
and varies monthly according to interest rates, as well as the effect of trading
performance and redemptions on the level of interest-bearing funds.
Interest income from U.S. Treasury bills decreased by $201,518 for the nine
months ended July 31,2002 as compared to corresponding period in 2001.
Additionally, interest income decreased from lower overall investment in U.S.
Treasury bills due to the effect of redemptions and unfavorable trading
performance during the nine months ended July 31, 2002.
NOTE C:
Three months Three months
ended 7/31/2002 ended 7/31/2001
Net Realized and Unrealized Trading Gains (Losses) on Futures
and Forward Contracts 1,425,054 154,221
Net realized and unrealized trading gains (Losses) on Futures and Forward
Contracts for the three months ended 7/31/2002 is greater than net realized and
unrealized trading gains (losses) on futures and forward contracts for the three
months ended 7/31/2001 due to more profitable trading during the period.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized on the
11th day of September, 2002.
THE FUTURE FUND
By HEINOLD ASSET MANAGEMENT, INC.
General Partner
By /s/ Thomas M. Harte
---------------------------
Thomas M. Harte
President and Chief Executive Officer
By /s/ Ira Polk
---------------------------
Ira Polk
Chief Financial Officer
CERTIFICATION PURSUANT TO
18 U.S.C.SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of The Future Fund (the "Company") on
Form 10-Q for the period ending June 30, 2002 as filed with the Securities and
Exchange Commission on the date hereof (the "Report"), I, Thomas M. Harte, Chief
Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as
adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:
1) The Report fully complies with the requirements of section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
2) The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the Company.
/s/ Thomas M. Harte
Thomas M. Harte
Chief Executive Officer
September 11, 2002
CERTIFICATION PURSUANT TO
18 U.S.C.SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of The Future Fund (the "Company") on
Form 10-Q for the period ending June 30, 2002 as filed with the Securities and
Exchange Commission on the date hereof (the "Report"), I, Ira Polk, Chief
Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as
adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:
3) The Report fully complies with the requirements of section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
4) The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the Company.
/s/ Ira Polk
Ira Polk
Chief Financial Officer
September 11, 2002