FUTURES EXPANSION FUND LTD PARTNERSHIP - 10-Q Quarterly Report

Back to GetFilings.com

UNITED STATES 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 0-15298

THE FUTURES EXPANSION FUND LIMITED PARTNERSHIP
----------------------------------------------
(Exact Name of Registrant as
specified in its charter)

Delaware 13-3365950
- ------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)

c/o Merrill Lynch Alternative Investments LLC
Princeton Corporate Campus
800 Scudders Mill Road - Section 2G
Plainsboro, New Jersey 08536
----------------------------
(Address of principal executive offices)
(Zip Code)

609-282-6996
----------------------------------------------------
(Registrant's telephone number, 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. Yes /X/ No/ /

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

THE FUTURES EXPANSION FUND LIMITED PARTNERSHIP
----------------------------------------------
(A Delaware Limited Partnership)
--------------------------------
AND JOINT VENTURE
-----------------

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
----------------------------------------------

See notes to consolidated financial statements.

2

THE FUTURES EXPANSION FUND LIMITED PARTNERSHIP
----------------------------------------------
(A Delaware Limited Partnership)
--------------------------------
AND JOINT VENTURE
-----------------

CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(unaudited)

See notes to consolidated financial statements.

3

THE FUTURES EXPANSION FUND LIMITED PARTNERSHIP
----------------------------------------------
(A Delaware Limited Partnership)
--------------------------------
AND JOINT VENTURE
-----------------

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
-------------------------------------------------------
For the nine months ended September 30, 2003 and 2002
-------------------------------------------------------
(unaudited)

4

See notes to consolidated financial statements.

THE FUTURES EXPANSION FUND LIMITED PARTNERSHIP
----------------------------------------------
(A Delaware Limited Partnership)
--------------------------------
AND JOINT VENTURE
-----------------

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These financial statements have been prepared without audit. In the opinion of
management, the consolidated financial statements contain all adjustments
(consisting of only normal recurring adjustments) necessary to present fairly
the financial position of The Futures Expansion Fund Limited Partnership and
Joint Venture (the "Partnership") as of September 30, 2003, and the results of
its operations for the three and nine months ended September 30, 2003 and 2002.
However, the operating results for the interim periods may not be indicative of
the results for the full year.

Certain information and footnote disclosures normally included in annual
consolidated financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been omitted.
It is suggested that these consolidated financial statements be read in
conjunction with the consolidated financial statements and notes thereto
included in the Partnership's Annual Report on Form 10-K filed with the
Securities and Exchange Commission for the year ended December 31, 2002.

2. FAIR VALUE AND OFF-BALANCE SHEET RISK

The nature of this Partnership has certain risks, which cannot be presented
on the consolidated financial statements. The following summarizes some of
those risks.

Market Risk
- -----------

Derivative instruments involve varying degrees of off-balance sheet market risk.
Changes in the level or volatility of interest rates, foreign currency exchange
rates or the market values of the financial instruments or commodities
underlying such derivative instruments frequently result in changes in the
Partnership's net unrealized profit on such derivative instruments as reflected
in the Statements of Financial Condition. The Partnership's exposure to market
risk is influenced by a number of factors, including the relationships among the
derivative instruments held by the Partnership as well as the volatility and
liquidity of the markets in which the derivative instruments are traded.

Merrill Lynch Alternative Investments LLC ("MLAI LLC"), the General Partner, has
procedures in place intended to control market risk exposure, although there can
be no assurance that they will, in fact, succeed in doing so. These procedures
focus primarily on monitoring the trading of Millburn Ridgefield Corporation
("Millburn"), calculating the Net Asset Value of the Partnership as of the close
of business on each day and reviewing outstanding positions for
over-concentrations. While MLAI LLC does not itself intervene in the markets to
hedge or diversify the Partnership's market exposure, MLAI LLC may urge Millburn
to reallocate positions in an attempt to avoid over-concentrations. However,
such interventions are unusual. Except in cases in which it appears that
Millburn has begun to deviate from past practice or trading policies or to be
trading erratically, MLAI LLC's basic risk control procedures consist simply of
the ongoing process of advisor monitoring, with the market risk controls being
applied by Millburn itself.

5

Credit Risk
- -----------

The risks associated with exchange-traded contracts are typically perceived to
be less than those associated with over-the-counter (non-exchange-traded)
transactions, because exchanges typically (but not universally) provide
clearinghouse arrangements in which the collective credit (in some cases limited
in amount, in some cases not) of the members of the exchange is pledged to
support the financial integrity of the exchange. In over-the-counter
transactions, on the other hand, traders must rely solely on the credit of their
respective individual counterparties. Margins, which may be subject to loss in
the event of a default, are generally required in exchange trading, and
counterparties may also require margin in the over-the-counter markets.

The credit risk associated with these instruments from counterparty
nonperformance is the net unrealized profit, if any, included in the
Consolidated Statements of Financial Condition. The Partnership attempts to
mitigate this risk by dealing exclusively with Merrill Lynch entities as
clearing brokers.

The Partnership, in its normal course of business, enters into various
contracts, with Merrill Lynch, Pierce, Fenner & Smith Inc. ("MLPF&S") acting as
its commodity broker. Pursuant to the brokerage arrangement with MLPF&S (which
includes a netting arrangement), to the extent that such trading results in
receivables from and payables to MLPF&S, these receivables and payables are
offset and reported as a net receivable or payable and included in Equity in
commodity futures trading accounts in the Consolidated Statements of Financial
Condition.

Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations

MONTH-END NET ASSET VALUE PER UNIT

Performance Summary

January 1, 2003 to September 30, 2003
- -------------------------------------

January 1, 2003 to March 31, 2003

The Partnership experienced gains in the energy and interest rate sectors and
losses in the agricultural commodity, metals, stock index and currency sectors.
Overall, for the quarter, the Partnership experienced trading gains.

Energy was the best performing sector for the quarter. With the continuation of
the strike in Venezuela, the tensions with Iraq and the cold winter, long
positions in oil and natural gas were profitable in the beginning of the year.
In February, the best performing month, natural gas prices rose over 40% in a
single day citing expected severely cold weather and supply shortages. The
Partnership profited from this event but the volatility overlay as part of the
trading program resulted in a withdrawal from the market by 75% over the next
two days. This helped the Partnership retain profits as prices declined in crude
oil and natural gas in March.

6

Interest rate futures were the other profitable sector for the quarter. With
inflation under control, the bear market entering its fourth year and the
earnings outlook cloudy, bonds appear to feed an investor appetite for fixed
income investments, which have performed well in recent years. Safe and liquid
government bonds continued to attract investment, causing rates to drop and bond
prices to rise. Although there was a reversal in the intermediate and long term
bond yields, the Partnership is keeping long positions in the interest rate
markets. By the end of March, bond prices seemed to be more attuned to economic
fundamentals rather than the progress of the war.

Trading in agricultural commodities was flat for the quarter. The Partnership
holds positions in corn, cotton and coffee.

The metals sector had slight losses for the quarter. The Partnership holds
positions in gold and industrial metals such as, copper, aluminum and zinc.

Trading the stock index futures sustained losses for the quarter. The
Partnership held positions in the S&P 500, NASDAQ 100, German DAX, Hong Kong's
Hang Seng, and the Japanese Nikkei and Topix.

The currency forward and futures trading had the most significant losses for the
quarter. The weakening U.S. dollar was continuing as it has for over a year,
however, significant changes in the international markets changed the outlooks
of some other currencies as well. Many Asian nations, as part of their monetary
policy, try to help their export markets by trying to keep their currency from
appreciating against the U.S. dollar. This is done by purchasing large amounts
of U.S. dollar securities, a depreciating asset. Many Asian banks are expected
to diversify their holdings from U.S. dollars. Russia announced in February that
it would reduce its U.S. dollar holdings and increase its Euro holdings.

April 1, 2003 to June 30, 2003

The Partnership experienced gains in the interest rate, currency and stock index
sectors and losses in the metals, agriculture and energy sectors.

The interest rate sector provided the Partnership with profits for the second
quarter. May gains outpaced losses in both April and June. The decline in
interest rates resulted in profits in many of the Partnership's long positions.
Some factors that kept the interest rates falling were rumors of deflation,
hedging by long term lenders against the falling interest rates, and foreign
banks buying U.S. Treasuries as part of their monetary policy to control the
value of their currency. The market reversed in June due to disappointing news
about a smaller rate cut by the Federal Reserve then expected.

The currency sector was profitable for the quarter. The U.S. dollar continued to
decline. The U.S. Secretary of the Treasury stated that a strong monetary policy
isn't about the U.S. dollar's value relative to other currencies, signaling
acquiescence in a weaker dollar. Also, U.S. monetary policy has been much looser
and rates lower than in Europe. Federal Reserve Chairman Greenspan's comments
about deflation convinced the market that low rates will be with us for quite a
while.

The stock index futures produced small gains for the quarter capitalizing on the
global upswing in stock prices in June. Investors are reacting to the hope that
deflation and economic contraction are coming to an end in Japan. Reports
indicate that the rally in Japanese stocks has been fueled by foreign mutual
funds, hedge funds and other non-Japanese institutional investors who invested
more than ten times as much as local investors in June.

Metals were essentially flat for the second quarter. Positions in gold shifted
from profitable to not throughout the quarter. Copper and other base metals were
unprofitable.

7

The agricultural commodities sector incurred losses for the second quarter. The
Partnership held positions in corn, cotton and coffee.

The energy sector was the most unprofitable sector. The price declines that
started in March, when the Iraq war became inevitable, continued and short
positions in crude oil, unleaded gasoline and London gas oil were profitable
early in the quarter. The uptrend in natural gas reversed and spiked downward in
June, ironically after Federal Reserve Chairman Greenspan warned of a dangerous
shortage, resulting losses which overshadowed previous gains.

July 1, 2003 to September 30, 2003

During the third quarter the Partnership experienced overall gains with
profits in stock index futures, currencies and metals and losses in the
interest rate, agricultural commodities and energy sectors.

The stock index futures produced the greatest profit among all sectors for
the third quarter. The rise in global stock markets continued to experience
gains in July and August with long positions in the Hong Kong Hang Seng,
Japanese Nikkei and Topix, German DAX and NASDAQ 100. Performance in
September was mixed as the rise in the Japanese yen and euro versus the U.S.
dollar was not constructive to European and Asian stock markets due to
concern that a weak U.S. dollar might derail European and Asian economic
recoveries. Gains on long positions in the German DAX and Japanese Nikkei and
Topix earlier in the month were given back after the Group of Seven
statement. A long position in the Hong Kong Hang Seng remained profitable
since the Hong Kong dollar (and Chinese yuan) are pegged to the dollar and
therefore dropped along with it.

The currency trading sector was profitable for the Partnership for the third
quarter. During July and August, the sector showed losses. The most significant
macro economic event affecting the sector occurred in September. The Group of
Seven finance chiefs made a statement that "more flexibility in exchange rates
is desirable." The market took this as a rebuke of Japanese and other Asian
central bank interventions to weaken their currencies to aid exports. The result
was a sharp appreciation of the Japanese yen, Korean won and Singapore dollar,
and long positions in these currencies were quite profitable helping to carry
profits for the quarter.

The metals sector produced a small profit for this quarter. The bull market in
gold, which took a breather in July, resumed in August and continued through
September with a long position being profitable. A long position in copper was
essentially flat for the quarter.

The interest rate sector incurred losses for the third quarter. The losses
were due to the sharp rise in interest rates, which started in June, the
worst bond rout since 1980. Since June 13, the yield on Ten-year U.S.
Treasuries rose from a 45-year low of 3.11% to over 4.4% at July 31. The
value of the Ten-year U.S.Treasury note dropped almost 10% in six weeks. As
rates rose, refinancing dropped causing the effective maturity of
mortgage-backed securities to lengthen from one year to three years, which
required long hedging positions in U.S. Treasuries to be sold. Other factors
included selling of bonds by hedge funds and other leveraged investors who
had financed longer dated instruments with short-term debt. This strategy is
dangerous when longer-term rates rise. The global uptrend in interest rates
reversed in September on concerns that economic prospects may have been
overestimated and that U.S. dollar weakness may adversely affect stocks and
exports to the U.S.

The agricultural commodities sector incurred losses for the third quarter.
Losses were incurred in long cotton and coffee positions and mixed results with
long and short corn position throughout the quarter.

The energy sector continues to be the most unprofitable for the Partnership. The
plunge in natural gas prices continued in July notwithstanding U.S. Federal
Reserve Chairman Greenspan's June warning of

8

shortages. The energy markets gyrated in September on supply buildups, questions
about Iraq production and an OPEC output cut causing losses to be sustained on a
long position in unleaded gasoline, on short positions in heating oil and London
gas oil, and on both sides of crude oil.

January 1, 2002 to September 30, 2002
- -------------------------------------

January 1, 2002 to March 31, 2002

Trading in the energy sector was the most profitable strategy for the
Partnership. Trading was volatile throughout the quarter. In March, there was a
sharp upsurge in energy prices based on expectations of global economic recovery
and trepidation regarding the possible impact of Middle East violence on energy
supply. Long positions in crude oil, heating oil, unleaded gasoline, London gas
oil and natural gas were profitable.

The interest sector was up slightly for the quarter. In January, significant
profits on a short position in Japanese ten-year bonds was offset by losses on
short positions in German five and ten-year bonds, British ten-year bonds and
U.S. Treasury five and ten-year notes. In February, interest rates moderated
slightly in the U.S. resulting in profits on long positions in short-term
Eurodollar deposits and U.S. Treasury five-year notes. In March, interest rates
in Europe and the U.S. rose as economic activity began to improve. This resulted
in profits on short positions in German five and ten-year bonds and British
ten-year bonds. Long-term interest rates fell in Japan resulting in profits on a
long position in ten-year Japanese bonds.

Metal trading was almost flat for the quarter. In January, small losses were
sustained on long positions in gold, zinc and aluminum. In February, long
positions in copper and aluminum resulted in marginal losses. In March, small
profits on long positions in gold, zinc and copper were offset by a small loss
on a long position in aluminum.

Stock index trading posted losses on difficult market conditions. In January,
gains on short positions in the S&P 500 and Japanese Topix were narrowly
outweighed by losses on long positions in the German DAX, Hong Kong Hang Seng,
NASDAQ 100 and Japanese Nikkei. In February, short positions in the NASDAQ 100
and Hong Kong Hang Seng were profitable but were offset by losses on short
positions in the Japanese Topix and Nikkei. In March, both sides of the Hong
Kong Hang Seng were unprofitable.

Trading in agricultural commodities was unprofitable for the quarter. In
January, a long position in sugar was unprofitable. In February, a long position
in cotton and short positions in coffee and sugar resulted in marginal losses.
In March, short positions in sugar and cotton were unprofitable while a long
position in coffee resulted in a small gain.

Trading in the currencies sector incurred losses for the Partnership. In
January, the U.S. dollar strengthened considerably, particularly versus the
Japanese yen. Short positions in the Japanese yen, Euro and Swiss franc were
profitable early on. In February, the U.S. dollar sold off against major
currencies and losses were sustained on short positions in the Japanese yen,
Euro and Swiss franc. The currency markets presented a volatile and difficult
environment in March. Short positions versus the U.S.

9

dollar in the Swiss franc and Euro were unprofitable, as were long and short
positions of the Japanese yen.

April 1, 2002 to June 30, 2002

Profits resulting from trading in the currency sector provided the Partnership
with a rate of return of over 17% (on the total net assets of the Partnership)
for the second quarter. The decline in the U.S. dollar continued through June
unabated. Positions versus the U.S. dollar were profitable as were non-U.S.
dollar cross trades involving the Euro.

The interest rate sector was profitable for the Partnership despite its slow
start. The Partnership entered the quarter positioned for rising U.S. and
European interest rates. As rates declined, losses were sustained on short
positions. Positions were corrected in the quarter. Despite the weakening U.S.
dollar, interest rates on U.S. Treasuries fell on concerns about the economic
recovery and declines in the stock market in May and June. Long positions
brought in sizable profits.

The trading in stock indices found profits from its short positions in the
NASDAQ 100, German DAX, Hong Kong's Hang Seng, and Japanese Topix index futures.
June was a difficult month for stocks globally. The S&P 500 lost over 7% and the
NASDAQ lost over 9%.

The metals sector sustained slight losses for the quarter. In June, the uptrend
in gold reversed and losses were sustained on a long position eliminating
profits earned earlier in the quarter. Trading activity was also in the zinc,
copper and aluminum markets.

Losses were experienced in the agricultural commodities markets. Long positions
in sugar and short positions in corn futures were mostly to blame.

Energy futures experienced whipsaw markets and trading brought in losses for the
Partnership. The rally in petroleum prices corrected in April and the run up had
completely reversed by May.

July 1, 2002 to September 30, 2002

Interest rates were the profitable sector for the Partnership during the third
quarter. Rates on government debt declined in both the U.S. and Europe in
response to eroding expectations for economic recovery and lackluster stock
markets. In the U.S., factors such as the mortgage industry seeking protection
from the surge in mortgage refinancing, corporate debt facing upward pressure
and the government debt prices rising due to continued flight to quality played
major roles in the sector. In Germany, the re-election of the center-left
coalition was taken as a negative for reform and growth for their economy,
causing rates to drop. In Japan, the Bank of Japan's announcement of the
purchase of stocks from major banks to stabilize the stock market caused the
unintentional sell off of Japanese Government Bonds, which the Partnership had
to cover quickly to limit losses on those positions.

The consistent downward trend of the global stock markets proved profitable for
the Partnership's stock index futures positions. The trend following models
capitalized through short positions.

The energy sector showed mixed performance throughout the quarter but finished
with gains. Energy prices were supported by supply concerns and tensions over
Iraq, making long positions in crude oil products profitable.

Metals trading brought in slight gains for the Partnership. The weakening
economic climate was a factor in price declines for industrial metals, bringing
in gains of short positions in aluminum, copper and zinc. Shorts positions in
gold brought in slight losses for the quarter.

10

Agriculture commodity trading was virtually flat for the quarter. Corn provided
small profits due to concerns over the lack of rain during the growing season.
Positions were also held in cotton and coffee, both incurring small losses.

Currencies were unprofitable for the quarter. U.S. dollar positions were
effected by increased volatility as the U.S. dollar decline ended at the end of
July and began its upturn in August. Non U.S. dollar cross trading was generally
unprofitable for the quarter.

The Partnership, as a member of a class of plaintiffs, received a settlement
payment in August relating to certain copper trades made by a number of
investors, including the Partnership, during a period in the mid-1990s. Members
of the class were those who purchased or sold Comex copper futures or options
contracts between June 24, 1993 and June 15, 1996. The effect of the settlement
payment was included in the Partnership's performance in August.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable

Item 4. Controls and Procedures

Merrill Lynch Alternative Investments LLC, the General Partner of The Futures
Expansion Fund Limited Partnership, with the participation of the General
Partner's Chief Executive Officer and the Chief Financial Officer, has evaluated
the effectiveness of the design and operation of its disclosure controls and
procedures with respect to the Partnership within 90 days of the filing date of
this quarterly report, and, based on their evaluation, have concluded that these
disclosure controls and procedures are effective. Additionally, there were no
significant changes in the Partnership's internal controls or in other factors
that could significantly affect these controls subsequent to the date of their
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.

11

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

There are no pending proceedings to which the Partnership or MLAI
LLC is a party.

Item 2. Changes in Securities and Use of Proceeds

(a) None.
(b) None.
(c) None.
(d) None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security Holders

None.

Item 5. Other Information

None.

Item 6. Exhibits and Reports on Form 8-K.

(a) Exhibits.

There are no exhibits required to be filed as part of this
document.

(b) Reports on Form 8-K.
--------------------

There were no reports on Form 8-K filed during the nine months of
fiscal 2003.

12

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.

THE FUTURES EXPANSION FUND LIMITED PARTNERSHIP

By: MERRILL LYNCH ALTERNATIVE
INVESTMENTS LLC
(General Partner)

Date: November 14, 2003 By /s/ ROBERT M. ALDERMAN
----------------------
Robert M. Alderman
Chairman, Chief Executive Officer
and Manager
(Principal Executive Officer)

Date: November 14, 2003 By /s/ MICHAEL L. PUNGELLO
-----------------------
Michael L. Pungello
Vice President, Chief Financial
Officer and Treasurer
(Principal Financial and Accounting
Officer)

13

EXHIBIT 99

Form of Certification Pursuant to Section 1350 of Chapter 63
------------------------------------------------------------
of Title 180 of the United States Code
--------------------------------------

I, Robert M. Alderman, certify that:

1. I have reviewed this quarterly report on Form 10-Q of The Futures Expansion
Fund Limited Partnership;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report is
being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls;

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: November 14, 2003

- ----------------------
By /s/ ROBERT M. ALDERMAN
----------------------
Robert M. Alderman
Chairman, Chief Executive Officer and Manager
(Principal Executive Officer)

14

EXHIBIT 99 (a)

AS ADOPTED TO
--------------
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
---------------------------------------------

In connection with this quarterly report of The Futures Expansion Fund Limited
Partnership on Form 10-Q for the period ended September 30, 2003 as filed with
the Securities and Exchange Commission on the date hereof, I, Robert M.
Alderman, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant of
the Sarbanes-Oxley Act of 2002, that:

1. This quarterly report fully complies with the requirements of Section 13 or
15(d) of the Securities and Exchange Act of 1934; and

2. The information contained in this quarterly report fairly presents, in all
material respects, the financial condition and results of operations of The
Futures Expansion Fund Limited Partnership.

Date: November 14, 2003

- ----------------------
By /s/ ROBERT M. ALDERMAN
----------------------
Robert M. Alderman
Chairman, Chief Executive Officer and Manager
(Principal Executive Officer)

15

EXHIBIT 99

Form of Certification Pursuant to Section 1350 of Chapter 63
------------------------------------------------------------
of Title 180 of the United States Code
--------------------------------------

I, Michael L. Pungello, certify that:

1. I have reviewed this quarterly report on Form 10-Q of The Futures Expansion
Fund Limited Partnership;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report is
being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls;

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: November 14, 2003

- -----------------------
By /s/ MICHAEL L. PUNGELLO
-----------------------
Michael L. Pungello
Vice President, Chief Financial Officer
and Treasurer
(Principal Financial and Accounting Officer)

16

EXHIBIT 99 (a)

AS ADOPTED TO
-------------
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
---------------------------------------------

In connection with this quarterly report of The Futures Expanion Fund Limited
Partnership on Form 10-Q for the period ended September 30, 2003 as filed with
the Securities and Exchange Commission on the date hereof, I, Michael L.
Pungello, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant of
the Sarbanes-Oxley Act of 2002, that:

1. This quarterly report fully complies with the requirements of Section 13 or
15(d) of the Securities and Exchange Act of 1934; and

2. The information contained in this quarterly report fairly presents, in all
material respects, the financial condition and results of operations of The
Futures Expansion Fund Limited Partnership.

Date: November 14, 2003

- ----------------------
By /s/ MICHAEL L. PUNGELLO
-----------------------
Michael L. Pungello
Vice President, Chief Financial Officer
and Treasurer
(Principal Financial and Accounting Officer)

17