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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2003
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 Number: 333-41780
ROGERS INTERNATIONAL RAW MATERIALS FUND, L.P.
(Exact name of registrant as specified in its charter)
ILLINOIS 36-4368292
(State of organization) (I.R.S. Employer Identification No.)
BEELAND MANAGEMENT COMPANY, LLC
GENERAL PARTNER
1000 HART ROAD, SUITE 210 (847) 304-0450
BARRINGTON, ILLINOIS 60010 (Registrant's telephone number,
(Address of principal executive offices) including area code)
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.
[X] Yes [ ] No
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act) [ ] Yes [X] No
PART I--FINANCIAL INFORMATION
ITEM 1. Financial Statements.
a) Statement of Financial Condition as of September 30, 2003 and
December 31, 2002.
b) Statement of Operations for the three months and nine months
ended September 30, 2003 and 2002
c) Statement of Changes in Partner's Equity for the nine months
ended September 30, 2003.
d) Notes to Financial Statements
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.
ITEM 4. Controls and Procedures
PART II--OTHER INFORMATION
ITEM 1. Legal Proceedings.
ITEM 6. Exhibits and Reports on Form 8-K (ss. 249.308 of this chapter).
a) Exhibits required by Item 601 of Regulation S-K
b) Reports on Form 8-K
ROGERS INTERNATIONAL RAW MATERIALS FUND, L.P.
STATEMENT OF FINANCIAL CONDITION
SEPTEMBER 30, 2003 AND DECEMBER 31, 2002
9/30/2003 12/31/2002
ASSETS
Cash at bank $ 131,081 $ 182,497
Cash at broker 604,969 1,010,459
Investment in securities 6,034,688 5,998,810
Unrealized net trading gain 154,546 332,325
Interest receivable 49,295 239
---------- ----------
Total Assets $6,974,579 $7,524,330
========== ==========
LIABILITIES
Commissions payable $ 2,616 $ 2,839
Accrued management fees 13,078 13,014
Administrative fees payable 31,241 41,161
Organizational costs payable -- 167,699
Redemptions payable -- 21,361
---------- ----------
Total Liabilities 46,935 246,074
---------- ----------
PARTNERSHIP EQUITY
Limited Partners Equity 6,927,644 7,278,256
---------- ----------
Total Liabilities and Partnership Equity $6,974,579 $7,524,330
========== ==========
ROGERS INTERNATIONAL RAW MATERIALS FUND, L.P.
STATEMENT OF OPERATIONS
FOR THE PERIODS ENDED SEPTEMBER 30, 2003 AND 2002
3 m/e 9 m/e 3 m/e 9 m/e
9/30/2003 9/30/2003 9/30/2002 9/30/2002
--------- ----------- ---------- -----------
REVENUE
Realized net trading gain $ 254,702 $ 1,097,882 $ 359,106 $ 1,090,107
Realized gain/(loss) on securities -- 49,935 19,131 (16,750)
Change in unrealized net trading
gain/(loss) 62,329 (177,779) 124,555 277,890
Change in unrealized gain/(loss) on
securities (34,687) (126,948) 19,248 43,423
Foreign exchange gain/(loss) 3,807 15,909 (2,180) 2,100
Interest income - securities 49,279 144,535 10,179 114,891
Interest income 1,525 5,323 3,752 12,186
--------- ----------- --------- -----------
Total Revenue 336,955 1,008,857 533,791 1,523,849
--------- ----------- --------- -----------
EXPENSE
Commissions 11,517 36,416 12,557 34,995
Management fees 38,518 115,129 39,598 103,986
Administrative fees 23,987 74,989 23,800 71,421
Amortization expense -- -- -- 189,265
--------- ----------- --------- -----------
Total Expense 74,022 226,534 75,955 399,667
--------- ----------- --------- -----------
Net Income $ 262,933 $ 782,323 $ 457,836 $ 1,124,182
========= =========== ========= ===========
ROGERS INTERNATIONAL RAW MATERIALS FUND, L.P.
STATEMENT OF CHANGES IN PARTNER'S EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003
9 m/e
9/30/2003
-----------
Beginning of Period Equity $ 7,278,256
Additions 52,550
Net income 782,323
Withdrawals (1,185,485)
-----------
End of Period Equity $ 6,927,644
===========
Per unit data 9/30/2003 12/31/2002
------------- --------- ----------
Net asset value $ 127.56 $ 114.56
========= =========
Units outstanding 54,307 63,531
========= =========
ROGERS INTERNATIONAL RAW MATERIALS FUND, L.P.
NOTES TO FINANCIAL STATEMENTS
September 30, 2003
Note 1. Significant Accounting Policies:
NATURE OF BUSINESS AND ORGANIZATION: Rogers International Raw Materials
Fund, L.P. (the "Partnership") is an Illinois Limited Partnership established in
May 2000 under the laws of the State of Illinois relating to limited
partnerships. The Partnership trades a portfolio of commodity futures contracts
and forward contracts, exclusively on the long side of the market; that is the
Partnership will not sell short any commodity futures contracts or forward
contracts. The Partnership commenced trading during November 2001. The
Partnership will terminate December 31, 2020 or earlier upon certain
circumstances as defined in the Limited Partnership Agreement.
NET ASSETS: The valuation of net assets includes unliquidated commodity
futures and forward contracts owned by the Partnership, if any, at the end of
the period. The unrealized gain or loss on these contracts if any, has been
calculated based on closing prices on the last business day of the year. Foreign
currency is translated into US dollars at the exchange rate prevailing on the
last business day of the year. Net asset value is determined by subtracting
liabilities from assets, which also equals Partnership equity.
PROFIT AND LOSS ALLOCATION: Limited Partners share in the profits and
losses in the Partnership in the proportion in which each partner's capital
account bears to all partner's capital accounts.
INCOME TAXES: No provision for income taxes has been made since the
Partnership is not subject to taxes on income. Each partner is individually
liable for the tax on its share of income or loss. The Partnership prepares a
calendar year information tax return. However, the Fund is subject to a 1.5%
Illinois State replacement tax on its net earnings.
REVENUE RECOGNITION: Commodity futures contracts are recorded on the trade
date, and open positions are reflected in the accompanying statement of
financial condition as the difference between the original contract value and
the market value on the last business day of the reporting period. The market
value of the commodity futures and options contracts is based upon the most
recent available settlement price on the appropriate commodity exchanges. US
Treasury Securities are reported at cost plus accrued interest, net of
unrealized gains or (losses), which approximates market. Changes in unrealized
gains or (losses) represent the total increases (decreases) in unrealized gains
or (increases) decreases in unrealized losses on open positions during the
period.
INTEREST INCOME RECOGNITION: The Partnership records interest income in the
period it is earned.
STATEMENT OF CASH FLOWS: The Partnership has elected not to provide a
statement of cash flows as permitted by Statement of Accounting Standards 102
"Statement of Cash Flows".
Note 2. Agreements and Related Party Transactions:
The Agreement of Limited Partnership vests all responsibility and powers
for the management of the business and affairs of the Partnership with the
General Partner, Beeland Management Company, LLC. The General Partner is the
commodity pool operator for the Partnership and is responsible for the trading
decisions of the Partnership.
Included in organizational costs payable at December 31, 2002 is $167,699
owed to the General Partner for regulatory filing fees, legal fees and expenses
initially advanced for the formation of the Partnership. The Partnership pays a
Subscription fee to the General Partner of up to 5% of the gross offering
proceeds, a portion of which will be reallowed to soliciting dealers as selling
commissions.
The Partnership pays a monthly management fee to the General Partner of
0.1875% of the average monthly sum of all Capital Accounts contributed by
Limited Partners at the close of each month.
If the amount of management fees paid to the Partnership's general partner
during a year does not equal or exceed one percent (1%) of the amount of the
Partnership's net profits for that year, the general partner will receive an
allocation of profits in an amount equal to the difference between one percent
of the net profits and the amount of the management fees paid.
Hart Capital Management, Inc. ("Hart") is the investment manager for the
Partnership. Hart is a division of Arbor Research & Trading, Inc. ("Arbor"),
which is a member of the General Partner. Three members of the General Partner
are also principals of Arbor. Hart provides certain investment management,
advisory and research services with respect to the investing and trading
activities of the Partnership. Hart will be paid an annual advisory fee of 0.5%
of the average month end market value of the Portfolio under management.
ROGERS INTERNATIONAL RAW MATERIALS FUND, L.P.
NOTES TO FINANCIAL STATEMENTS
September 30, 2003
Note 3. Partnership Capital and Redemption's:
Limited Partners may withdraw capital, with no less than 60 days prior
written notice to the General Partner, after a three-month initial holding
period.
Until the initial closing, the purchase price of a unit was $100.
Thereafter, the purchase price of a unit is the net asset value per unit as of
the end of each calendar month. Net asset value per unit is calculated as the
net asset value at month end divided by the number of outstanding units at month
end.
The General Partner and its principals are required to make a minimum
investment of $25,000 in the Partnership. This requirement was exceeded at
September 30, 2003.
Note 4. Financial Instruments with Off-Balance Sheet Credit and Market Risk:
Included in the definition of financial instruments are forward contracts
and futures. The Partnership invests in various commodity-related futures and
forward contracts. These contracts are marked to market daily, with variations
in the value settled on a daily basis with the exchange upon which they are
traded. For these contracts the unrealized gain or loss rather than the notional
amounts, represents the approximate future cash requirements.
Theoretically, the Partnership is exposed to a market risk (loss) equal to
the notional value of financial instruments purchased. Generally financial
instruments can be closed out at the discretion of the General Partner. However,
if the market is not liquid, it could prevent the timely closeout of any
unfavorable positions or require the Partnership to hold these positions and
possibly all positions until maturity, regardless of the changes in their value
or the General Partner's investment strategies.
The Partnership's trading is designed to replicate the positions and
trading which comprise the Rogers International Commodity Index (the "Index").
This Index consists of a basket of commodities employed within the world economy
and traded in seasoned markets, as futures and forward contracts. The broad
based representation of commodities contracts is intended to provide two
important characteristics: The large number of contracts and underlying raw
materials represents "diversification" and the global coverage of these
contracts reflects the current state of international trade and commerce. In
order to minimize market and credit risks, the General Partner monitors the
positions held by the Partnership on a daily basis and no trading discretion is
utilized other than the replication of the Index. Contracts are purchased or
liquidated according to the replication of the index.
Credit risk represents the accounting loss that would be recognized if
counterparties failed completely to perform as contracted. Concentrations of
credit risk (whether on or off balance sheet) that arise from financial
instruments exist for groups of counterparties when they have similar economic
characteristics that would cause their ability to meet contractual obligations
to be similarly affected by changes in economic or other conditions. Futures
contracts have little credit risk because futures exchanges are the
counterparties.
Note 5. Derivative Financial Instruments and Fair Value of Financial
Instruments:
A derivative financial instrument is a financial agreement whose value is
linked to, or derived from, the performance of an underlying asset. The
underlying asset can be currencies, commodities, interest rates, stocks, or any
combination. Changes in the underlying asset indirectly affect the value of the
derivative.
All trading instruments are subject to market risk, the risk that future
changes in market conditions may make an instrument less valuable or more
onerous. As the instruments are recognized at fair market value, those changes
directly affect reported income.
ROGERS INTERNATIONAL RAW MATERIALS FUND, L.P.
NOTES TO FINANCIAL STATEMENTS
September 30, 2003
Futures and forward contracts used for trading purposes are recorded in the
statement of financial condition at fair value at the reporting date. Per
Financial Accounting Standards Board Interpretation No. 39, the fair value of
open contracts in a loss position is offset against the fair value of open
contracts in a gain position. The Partnership applies this industry accepted
accounting practice in the financial statements. Realized and unrealized changes
in fair values are recognized in the period in which the changes occur.
Notional amounts are equivalent to the aggregate face value of the
derivative financial instruments. Notional amounts do not represent the amounts
exchanged by the parties to derivatives and do not measure the Partnership's
exposure to credit or market risks. The amounts exchanged are based on the
notional amounts and other terms of the derivatives.
The Partnership invests in financial instruments, which includes futures
and forward contracts. All contracts are of the same class of derivative
instrument, commodity-related derivatives. Futures contracts are commitments to
either purchase or sell designated financial instruments at a future date for a
specified price and may be settled in cash or through delivery.
The Partnership has funds at the Clearing Broker in accounts, which are
used to meet minimum margin requirements for all of the Partnership's open
positions. These requirements are adjusted, as needed, due to daily fluctuations
in the values of the underlying assets.
Non-Regulated futures contracts have foreign exchange risk since the
contracts are traded in currency denominations other than US dollars. Foreign
currency trading gains or losses are reported under realized and unrealized
trading gains in the statement of operations. Foreign currency gains or losses
are the result of the conversion of the foreign currency denomination to US
dollars.
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
FINANCIAL CONDITION
Total equity decreased by $350,612 in the nine months ended September
30, 2003, due to limited partner additions (withdrawals) of $52,550 and
($1,185,485) and net income of $782,323.
RESULTS OF OPERATIONS
Net Revenues (Losses)
The realized net trading gains of $254,702, $1,097,882, $359,106 and
$1,090,107 are the results of three and nine months of trading ending
September 30, 2003 and 2002. The realized trading gains (losses) on
securities were $0, $49,935, $19,131 and ($16,750) for the same periods.
The interest income includes accrued interest income on securities of
$49,279, $144,535, $10,179 and $114,891 for the same periods.
Operating expenses
The Fund pays substantial fees and expenses that are described in the
annual report filed for the fiscal year ended December 31, 2002. There
have been no material changes in the computation of these fees.
Organizational Costs for the Fund totaled $482,397. These costs were
amortized over the three-month period beginning November 2001. These
costs include legal fees, accounting fees and printing costs.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.
Not Applicable
ITEM 4. Controls and Procedures.
(a) Evaluation of Disclosures and Procedures
As required by new Rule 13a-15 under the Securities and Exchange Act
of 1934, within 90 days prior to the date of this report, the Registrant
carried out an evaluation under the supervision and with the
participation of the Registrant's management, including the Chief
Executive Officer (CEO) and Chief Financial Officer (CFO), of the
effectiveness of the design and operation of the disclosure controls and
procedures. Based upon that evaluation, the management, including the
CEO and CFO, concluded that the disclosure controls and procedures were
effective to ensure that information required to be disclosed by the
Registrant in the reports it files or submits under the Exchange Act is
recorded, processed, summarized and reported, within the time periods
specified in the Securities and Exchange Commission's rules and forms.
In connection with the new rules and as a matter of practice, the
Registrant continues to review and document disclosure controls and
procedures, including internal controls and procedures for financial
reporting. From time to time, the Registrant may make changes aimed at
enhancing the effectiveness of the controls and to ensure that the
systems evolve with the business. There have been no significant changes
in the internal controls or in other factors that could significantly
affect internal controls subsequent to the date the Registrant carried
out its evaluation.
(b) Changes in Internal Controls
None.
PART II--OTHER INFORMATION
ITEM 1. Legal Proceedings.
None
ITEM 6. Exhibits and Reports on Form 8-K (ss. 249.308 of this chapter).
a) Required Exhibits:
Exhibit 2 - Plan of acquisition, reorganization, arrangement,
liquidation, or succession
None
Exhibit 3 - Articles of Incorporation and By-laws
This required exhibit is incorporated by reference from
the exhibit included with Form S-1 Registration Statement
and Amendments No. 333-41780.
Exhibit 4 - Instruments defining the rights of security holders,
including indentures
The required exhibit is incorporated by reference from the
exhibit included with Form S-1 Registration Statement and
Amendments No. 333-41780.
Exhibit 10 - Material Contracts None
Exhibit 11 - Statement re computation of per share earnings
The required exhibit is incorporated by reference from the
information contained in Part I, Item 1, Financial
Information.
Exhibit 15 - Letter re unaudited interim financial information
Not Applicable
Exhibit 18 - Letter re change in accounting principles
Not Applicable
Exhibit 19 - Report furnished to security holders
The required exhibit is incorporated by reference from the
information contained in Part I, Item 1, Financial
Information.
Exhibit 22 - Published report regarding matters submitted to vote of
security holders
Not Applicable
Exhibit 23 - Consent of experts and counsel
Not Applicable
Exhibit 24 - Power of Attorney
Not Applicable
Exhibit 25 - Financial Data Schedule
Not Applicable
Exhibit 31 - Certification of CEO and CFO Pursuant to Section 302 of
the Sarbanes-Oxley Act See Exhibit 31.1 and 31.2
Exhibit 31 - Certification of CEO and CFO Pursuant to Section 906 of
the Sarbanes-Oxley Act See Exhibit 32.1 and 32.2
b) Reports on Forms 8-K
No reports on Form 8-K were filed during the third quarter of
fiscal 2003.
SIGNATURES*
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.
Rogers International Raw Materials Fund, L.P.
---------------------------------------------
(Registrant)
November 7, 2003 /s/ Richard Chambers
- ---------------- --------------------
Date Chief Financial Officer of Beeland Management Company, LLC
----------------------------------------------------------
November 7, 2003 /s/ Walter Thomas Price III
- ---------------- ---------------------------
Date Chief Executive Officer of Beeland Management Company, LLC
----------------------------------------------------------