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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 June 28, 2002
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: 0-25787
WORLD MONITOR TRUST--SERIES B
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(Exact name of Registrant as specified in its charter)
Delaware 13-3985041
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One New York Plaza, 13th Floor, New York, New York 10292
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 778-7866
N/A
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Former name, former address and former fiscal year, if changed since last report
Indicate by check CK 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 _CK_ No __
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PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
WORLD MONITOR TRUST--SERIES B
(a Delaware Business Trust)
STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
<Table>
<Caption>
June 28, December 31,
2002 2001
- ---------------------------------------------------------------------------------------------------
ASSETS
Cash $ 9,908,858 $10,752,455
Net unrealized gain (loss) on open futures contracts 659,582 (18,407 )
Accrued interest receivable 579 --
----------- ------------
Total assets $10,569,019 $10,734,048
----------- ------------
----------- ------------
LIABILITIES AND TRUST CAPITAL
Liabilities
Commissions payable $ 59,516 $ 68,108
Management fees payable 15,577 17,858
Redemptions payable 9,349 110,284
----------- ------------
Total liabilities 84,442 196,250
----------- ------------
Commitments
Trust capital
Limited interests (89,182.244 and 95,859.349 interests outstanding) 10,345,373 10,407,513
General interests (1,200 interests outstanding) 139,204 130,285
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Total trust capital 10,484,577 10,537,798
----------- ------------
Total liabilities and trust capital $10,569,019 $10,734,048
----------- ------------
----------- ------------
Net asset value per limited and general interest ('Interests') $ 116.00 $ 108.57
----------- ------------
----------- ------------
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<Caption>
The accompanying notes are an integral part of these statements.
</Table>
2
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WORLD MONITOR TRUST--SERIES B
(a Delaware Business Trust)
Condensed Schedules of Investments
(Unaudited)
<Table>
<Caption>
June 28, 2002 December 31, 2001
-------------------------------- --------------------------------
Net Unrealized Net Unrealized
Gain (Loss) Gain (Loss)
as a % of Net Unrealized as a % of Net Unrealized
Futures Contracts Trust Capital Gain (Loss) Trust Capital Gain (Loss)
<Caption>
- ---------------------------------------------------------------------------------------------------------------
Futures contracts purchased:
Stock indices $ 51,460 $ --
Interest rates 309,000 59,973
Currencies 327,638 17,755
Commodities 27,849 (251,248)
-------------- --------------
Net unrealized gain (loss) on
futures contracts purchased 6.83% 715,947 (1.64)% (173,520)
-------------- --------------
Futures contracts sold:
Stock indices 13,254 (1,200)
Currencies (5,573) 379,750
Commodities (64,046) (223,437)
-------------- --------------
Net unrealized gain (loss) on
futures contracts sold (0.54) (56,365) 1.47 155,113
------ -------------- ------ --------------
Net unrealized gain (loss) on
futures contracts 6.29% $659,582 (0.17)% $ (18,407)
------ -------------- ------ --------------
------ -------------- ------ --------------
Settlement Currency--Futures Contracts
Euro 1.11% $116,723 0.13% $ 13,461
Japanese yen 0.39 41,034 0.05 5,542
U.S. dollar 4.79 501,825 (0.35) (37,410)
------ -------------- ------ --------------
Total 6.29% $659,582 (0.17)% $ (18,407)
------ -------------- ------ --------------
------ -------------- ------ --------------
<Caption>
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The accompanying notes are an integral part of these statements.
</Table>
3
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WORLD MONITOR TRUST--SERIES B
(a Delaware Business Trust)
STATEMENTS OF OPERATIONS
(Unaudited)
<Table>
<Caption>
For the period For the period For the period For the period
from from from from
January 1, 2002 January 1, 2001 March 30, 2002 March 31, 2001
to to to to
June 28, 2002 June 29, 2001 June 28, 2002 June 29, 2001
- -----------------------------------------------------------------------------------------------------------------
REVENUES
Net realized gain (loss) on futures
contracts $ 350,895 $ 1,100,695 $ 586,239 $ (847,234)
Change in net unrealized gain/loss on open
futures contracts 677,989 (1,875,602) 510,945 (296,641)
Interest income 110,745 394,587 54,690 152,084
--------------- --------------- --------------- ---------------
1,139,629 (380,320) 1,151,874 (991,791)
--------------- --------------- --------------- ---------------
EXPENSES
Commissions 382,493 586,108 190,435 257,976
Management fees 98,565 151,030 49,073 66,473
--------------- --------------- --------------- ---------------
481,058 737,138 239,508 324,449
--------------- --------------- --------------- ---------------
Net income (loss) $ 658,571 $(1,117,458) $ 912,366 $(1,316,240)
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
ALLOCATION OF NET INCOME (LOSS)
Limited interests $ 649,652 $(1,102,968) $ 900,256 $(1,299,604)
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
General interests $ 8,919 $ (14,490) $ 12,110 $ (16,636)
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
NET INCOME (LOSS) PER WEIGHTED AVERAGE
LIMITED AND GENERAL INTEREST
Net income (loss) per weighted average
limited and general interest $ 7.00 $ (8.58) $ 9.88 $ (11.04)
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
Weighted average number of limited and
general interests outstanding 94,134 130,233 92,366 119,189
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
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</Table>
STATEMENT OF CHANGES IN TRUST CAPITAL
(Unaudited)
<Table>
<Caption>
LIMITED GENERAL
INTERESTS INTERESTS INTERESTS TOTAL
- -----------------------------------------------------------------------------------------------------
Trust capital--December 31, 2001 97,059.349 $10,407,513 $130,285 $10,537,798
Contributions 378.869 39,871 -- 39,871
Net income 649,652 8,919 658,571
Redemptions (7,055.974) (751,663) -- (751,663)
---------- ----------- --------- -----------
Trust capital--June 28, 2002 90,382.244 $10,345,373 $139,204 $10,484,577
---------- ----------- --------- -----------
---------- ----------- --------- -----------
<Caption>
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The accompanying notes are an integral part of these statements.
</Table>
4
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WORLD MONITOR TRUST--SERIES B
(a Delaware Business Trust)
NOTES TO FINANCIAL STATEMENTS
June 28, 2002
(Unaudited)
A. General
These financial statements have been prepared without audit. In the opinion
of Prudential Securities Futures Management Inc. (the 'Managing Owner'), the
financial statements contain all adjustments (consisting of only normal
recurring adjustments) necessary to state fairly the financial position of World
Monitor Trust--Series B ('Series B') as of June 28, 2002 and the results of its
operations for the periods from January 1, 2002 to June 28, 2002 ('Year-To-Date
2002'), January 1, 2001 to June 29, 2001 ('Year-To-Date 2001'), March 30, 2002
to June 28, 2002 ('Second Quarter 2002') and March 31, 2001 to June 29, 2001
('Second Quarter 2001'). However, the operating results for the interim periods
may not be indicative of the results expected for a full year.
Certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been omitted. It is suggested that
these financial statements be read in conjunction with the financial statements
and notes thereto included in Series B's Annual Report on Form 10-K filed with
the Securities and Exchange Commission for the year ended December 31, 2001.
The Managing Owner suspended the offering of Interests in Series B and World
Monitor Trust--Series C ('Series C') upon the expiration of selling
registrations, which expired by April 30, 2002.
B. Related Parties
The Managing Owner of Series B is a wholly-owned subsidiary of Prudential
Securities Incorporated ('PSI'), which, in turn, is an indirect wholly-owned
subsidiary of Prudential Financial, Inc. The Managing Owner or its affiliates
perform services for Series B, which include but are not limited to: brokerage
services; accounting and financial management; registrar, transfer and
assignment functions; investor communications, printing and other administrative
services. Except for costs related to brokerage services, PSI or its affiliates
pay the costs of these services in addition to the costs of Series B's routine
operational, administrative, legal and auditing costs. Additionally, PSI or its
affiliates paid the costs associated with offering Series B's Interests.
The costs charged to Series B for brokerage services for Year-To-Date 2002,
Year-To-Date 2001, Second Quarter 2002, and Second Quarter 2001 were $382,493,
$586,108, $190,435, and $257,976, respectively.
All of the proceeds of the offering of Series B were received in the name of
Series B and were deposited in trading or cash accounts at PSI, Series B's
commodity broker. Series B's assets are maintained with PSI or, for margin
purposes, with the various exchanges on which Series B is permitted to trade.
PSI credits Series B monthly with 100% of the interest it earns on the average
net assets in Series B's accounts.
Series B, acting through its trading advisor, may execute over-the-counter,
spot, forward and/or option foreign exchange transactions with PSI. PSI then
engages in back-to-back trading with an affiliate, Prudential-Bache Global
Markets Inc. ('PBGM'). PBGM attempts to earn a profit on such transactions. PBGM
keeps its prices on foreign currency competitive with other interbank currency
trading desks. All over-the-counter currency transactions are conducted between
PSI and Series B pursuant to a line of credit. PSI may require that collateral
be posted against the marked-to-market positions of Series B.
As of June 28, 2002, a non-U.S. affiliate of the Managing Owner owned 148.095
limited interests of Series B.
C. Derivative Instruments and Associated Risks
Series B is exposed to various types of risk associated with the derivative
instruments and related markets in which it invests. These risks include, but
are not limited to, risk of loss from fluctuations in the value of derivative
instruments held (market risk) and the inability of counterparties to perform
under the terms of Series B's investment activities (credit risk).
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Market risk
Trading in futures and forward contracts (including foreign exchange)
involves entering into contractual commitments to purchase or sell a particular
commodity at a specified date and price. The gross or face amount of the
contracts, which is typically many times that of Series B's net assets being
traded, significantly exceeds Series B's future cash requirements since Series B
intends to close out its open positions prior to settlement. As a result, Series
B is generally subject only to the risk of loss arising from the change in the
value of the contracts. As such, Series B considers the 'fair value' of its
derivative instruments to be the net unrealized gain or loss on the contracts.
The market risk associated with Series B's commitments to purchase commodities
is limited to the gross or face amount of the contracts held. However, when
Series B enters into a contractual commitment to sell commodities, it must make
delivery of the underlying commodity at the contract price and then repurchase
the contract at prevailing market prices. Since the repurchase price to which a
commodity can rise is unlimited, entering into commitments to sell commodities
exposes Series B to unlimited risk.
Market risk is influenced by a wide variety of factors including government
programs and policies, political and economic events, the level and volatility
of interest rates, foreign currency exchange rates, the diversification effects
among the derivative instruments Series B holds and the liquidity and inherent
volatility of the markets in which Series B trades.
Credit risk
When entering into futures or forward contracts, Series B is exposed to
credit risk that the counterparty to the contract will not meet its obligations.
The counterparty for futures contracts traded on United States and most foreign
futures exchanges is the clearinghouse associated with the particular exchange.
In general, clearinghouses are backed by their corporate members who are
required to share any financial burden resulting from the nonperformance by one
of their members and, as such, should significantly reduce this credit risk. In
cases where the clearinghouse is not backed by the clearing members (i.e., some
foreign exchanges), it is normally backed by a consortium of banks or other
financial institutions. On the other hand, if Series B enters into forward
transactions, the sole counterparty is PSI, Series B's commodity broker. Series
B has entered into a master netting agreement with PSI and, as a result, when
applicable, presents unrealized gains and losses on open forward positions as a
net amount in the statements of financial condition. The amount at risk
associated with counterparty nonperformance of all of Series B's contracts is
the net unrealized gain included in the statements of financial condition;
however, counterparty nonperformance on only certain of Series B's
contracts may result in greater loss than nonperformance on all of
Series B's contracts. There can be no assurance that any counterparty,
clearing member or clearinghouse will meet its obligations to Series B.
The Managing Owner attempts to minimize both credit and market risks by
requiring Series B and its trading advisor to abide by various trading
limitations and policies. The Managing Owner monitors compliance with these
trading limitations and policies which include, but are not limited to,
executing and clearing all trades with creditworthy counterparties; limiting the
amount of margin or premium required for any one commodity or all commodities
combined; and generally limiting transactions to contracts which are traded in
sufficient volume to permit the taking and liquidating of positions.
Additionally, pursuant to the advisory agreement among Series B, the Managing
Owner and the trading advisor, Series B shall automatically terminate the
trading advisor if the net asset value allocated to the trading advisor declines
by 33 1/3% from the value at the beginning of any year or since the commencement
of trading activities. Furthermore, the Second Amended and Restated Declaration
of Trust and Trust Agreement provides that Series B will liquidate its
positions, and eventually dissolve, if Series B experiences a decline in the net
asset value of 50% from the value at the beginning of any year or since the
commencement of trading activities. In each case, the decline in net asset value
is after giving effect for distributions, contributions and redemptions. The
Managing Owner may impose additional restrictions (through modifications of
trading limitations and policies) upon the trading activities of the trading
advisor as it, in good faith, deems to be in the best interests of Series B.
PSI, when acting as Series B's futures commission merchant in accepting
orders for the purchase or sale of domestic futures contracts, is required by
Commodity Futures Trading Commission ('CFTC') regulations to separately account
for and segregate as belonging to Series B all assets of Series B relating to
domestic futures trading and is not allowed to commingle such assets with other
assets of PSI. At June 28, 2002, such segregated assets totalled $7,481,480.
Part 30.7 of the CFTC regulations also requires PSI to secure
6
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assets of Series B related to foreign futures trading which totalled $3,086,960
at June 28, 2002. There are no segregation requirements for assets related to
forward trading.
As of June 28, 2002, all open futures contracts mature within six months.
D. Financial Highlights
<Table>
<Caption>
Year-To-Date Year-To-Date Second Quarter Second Quarter
2002 2001 2002 2001
------------ ------------ -------------- --------------
Performance per Interest
Net asset value, beginning
of period $ 108.57 $ 121.87 $ 105.91 $ 123.31
------------ ------------ -------------- --------------
Net realized gain (loss)
and change in net
unrealized gain/loss on
commodity transactions 11.37 (6.88) 12.10 (9.52)
Interest income 1.18 2.99 0.59 1.28
Expenses (5.12) (5.66) (2.60) (2.75)
------------ ------------ -------------- --------------
Increase (decrease) for the
period 7.43 (9.55) 10.09 (10.99)
------------ ------------ -------------- --------------
Net asset value, end of
period $ 116.00 $ 112.32 $ 116.00 $ 112.32
------------ ------------ -------------- --------------
------------ ------------ -------------- --------------
Total return 6.84% (7.84)% 9.53% (8.91)%
Ratio to average net assets
(annualized)
Interest income 2.21% 5.16% 2.23% 4.55%
Expenses 9.58% 9.65% 9.76% 9.71%
</Table>
These financial highlights represent the overall results of Series B during
Year-To-Date 2002, Year-To-Date 2001, Second Quarter 2002 and Second Quarter
2001. An individual limited owner's actual results may differ depending on the
timing of contributions and redemptions.
7
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WORLD MONITOR TRUST--SERIES B
(a Delaware Business Trust)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
Series B commenced operations on June 10, 1998 with gross proceeds of
$5,709,093 allocated to commodities trading. Additional contributions raised
through the continuous offering during Year-To-Date 2002, Second Quarter 2002
and for the period from June 10, 1998 (commencement of operations) to June 28,
2002 resulted in additional gross proceeds to Series B of $39,871, $1,571 and
$24,385,015, respectively. The Managing Owner suspended the offering of
Interests in Series B and Series C and allowed all selling registrations to
expire by April 30, 2002. As such, Interests owned in one series of World
Monitor Trust may no longer be exchanged for the Interests of one or more other
series of World Monitor Trust.
Interests in Series B may be redeemed on a weekly basis, but are subject to a
redemption fee if transacted within one year of the effective date of purchase.
Redemptions of limited interests for Year-To-Date 2002, Second Quarter 2002 and
for the period from June 10, 1998 (commencement of operations) to June 28, 2002
were $751,663, $392,626 and $19,808,463, respectively. While there were no
redemptions of general interests for Year-To-Date 2002, redemptions of general
interests for the period from June 10, 1998 (commencement of operations) to June
28, 2002 totalled $149,775. Future redemptions will impact the amount of funds
available for investment in commodity contracts in subsequent periods.
At June 28, 2002, 100% of Series B's net assets were allocated to commodities
trading. A significant portion of the net assets was held in cash which was used
as margin for Series B's trading in commodities. Inasmuch as the sole business
of Series B is to trade in commodities, Series B continues to own such liquid
assets to be used as margin. PSI credits Series B monthly with 100% of the
interest it earns on the average net assets in Series B's accounts.
The commodities contracts are subject to periods of illiquidity because of
market conditions, regulatory considerations and other reasons. For example,
commodity exchanges limit fluctuations in certain commodity futures contract
prices during a single day by regulations referred to as 'daily limits.' During
a single day, no trades may be executed at prices beyond the daily limit. Once
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 Series B from promptly liquidating its commodity
futures positions.
Since Series B's business is to trade futures and forward contracts, its
capital is at risk due to changes in the value of these contracts (market risk)
or the inability of counterparties to perform under the terms of the contracts
(credit risk). Series B's exposure to market risk is influenced by a number of
factors including the volatility of interest rates and foreign currency exchange
rates, the liquidity of the markets in which the contracts are traded and the
relationships among the contracts held. The inherent uncertainty of Series B's
speculative trading as well as the development of drastic market occurrences
could result in monthly losses considerably beyond Series B's experience to date
and could ultimately lead to a loss of all or substantially all of investors'
capital. The Managing Owner attempts to minimize these risks by requiring Series
B and its trading advisor to abide by various trading limitations and policies,
which include limiting margin amounts, trading only in liquid markets and
permitting the use of stop loss provisions. See Note C to the financial
statements for a further discussion on the credit and market risks associated
with Series B's futures and forward contracts.
Series B does not have, nor does it expect to have, any capital assets.
Results of Operations
The net asset value per Interest as of June 28, 2002 was $116.00, an increase
of 6.84% from the December 31, 2001 net asset value per Interest of $108.57 and
an increase of 9.53% from the March 29, 2002 net asset value per Interest of
$105.91. Past performance is not necessarily indicative of future results.
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Series B's gross trading gains (losses) were $1,029,000 and $1,097,000 during
Year-To-Date 2002 and Second Quarter 2002, respectively, compared to $(775,000)
and $(1,144,000) during Year-To-Date 2001 and Second Quarter 2001, respectively.
Due to the nature of Series B's trading activities, a period to period
comparison of its trading results is not meaningful. However, a detailed
discussion of Series B's Second Quarter 2002 trading results is presented below.
Quarterly Market Overview
Despite reports by the Federal Reserve Board (the 'Fed') indicating that
overall economic activity expanded at a moderate pace during the second quarter
of 2002, investor sentiment remained bleak. Most major U.S. equity indices
reached new lows as investor confidence worldwide was battered by reports of
corporate leadership misconduct and accounting irregularities. Continued
uncertainty in the Middle East and weaker than expected second quarter corporate
earnings added to investor uncertainty. The U.S. dollar fell against most major
foreign currencies during the quarter, while the price of interest rate
instruments rose. In the U.S., residential real estate markets generally
remained robust, but weakness persisted in most commercial markets. Retail sales
were generally flat and labor markets remained weak. Consumer spending and
manufacturing activity, which helped boost U.S. economic growth in previous
quarters, remained stagnant at a relatively high level. Additionally, continued
softness in the labor markets helped weaken consumer confidence. European and
Asian economic activity mirrored that of the U.S., but to a lesser extent.
Global equity markets moved sharply lower throughout the quarter as investor
confidence collapsed in response to concerns about accounting transparency at
some firms, heightened tension in the Middle East, and decreased corporate sales
and profits. This resulted in investors re-evaluating their outlook for a
near-term economic recovery. In the U.S., concerns that unannounced accounting
problems will eliminate expected corporate profits continued to keep equity
markets down. At quarter-end, the year-to-date returns for the S&P 500, the
NASDAQ and the London FTSE were -14%, -25% and -10.75%, respectively.
In bond markets, prices rose as interest rates fell in the U.S. on concerns
regarding a weak economic recovery and declines in the equity markets.
Additionally, declining equity markets led investors to switch allocations from
equity markets to fixed income markets, which are perceived as the current safe
haven for wealth. The Fed left interest rates unchanged at 1.75% in its two
meetings this quarter, declaring that its economic outlook for the near future
remained 'uncertain'. Other central banks, including the European Central Bank
and the Bank of Japan, generally followed the lead of the Fed leaving rates
unchanged and foreign bond markets rose as well.
In foreign exchange markets, the U.S. dollar moved sharply lower against most
major currencies throughout the quarter, falling to new lows against some
currencies. Weak U.S. economic growth in relation to other economies and
concerns regarding accounting irregularities in major U.S. corporations drove
the dollar downward. Additionally, the decline in U.S. equity markets and
investor confidence decreased the desire to hold U.S. assets driving the U.S.
dollar lower against the euro, British pound, Swiss franc and Japanese yen.
Gold and other precious metals soared throughout most of the quarter in
response to weaknesses in the U.S. dollar and global equity markets and
instability in the Middle East. Gold prices reversed at quarter-end as a result
of profit taking by traders and sentiment that the U.S. dollar would be
supported by U.S. and Japanese central banks.
Quarterly Performance of Series B
The following is a summary of performance for the major sectors in which
Series B traded:
Currencies (+): Long euro and Swiss franc positions resulted in gains as a
weak U.S. economy and falling equity markets caused the U.S. dollar to fall.
Interest rates (+): Global bond markets rose as interest rates declined
during the quarter in response to poor equity market performance. Long positions
in U.S., European and Japanese bonds resulted in gains.
Indices (+): Short positions in the S&P 500, NASDAQ and Euro DAX resulted in
gains as equity indices fell amid concerns regarding U.S. economic recovery,
accounting irregularities and weaker than expected corporate earnings.
Metals (-): Short aluminum positions incurred losses as industrial metals
rallied on the back of output cuts in copper.
9
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Energies (-): Energy prices declined amid increased U.S. supplies suggesting
ample supply for the summer season and anticipation that Russia would
discontinue output restrictions. Long crude oil positions incurred losses.
Decreases in interest income, commissions and management fees during
Year-To-Date 2002 as compared to Year-To-Date 2001 and Second Quarter 2002 as
compared to Second Quarter 2001 are primarily due to the effect of redemptions
as well as unfavorable trading performance during 2001 on Series B's weekly net
asset values offset, in part, by contributions received, as further discussed
below.
Interest income is earned on the average net assets held at PSI and,
therefore, varies weekly according to interest rates, trading performance,
contributions and redemptions. Interest income decreased by approximately
$284,000 and $97,000 during Year-To-Date 2002 as compared to Year-To-Date 2001
and Second Quarter 2002 as compared to Second Quarter 2001, respectively, due to
the decrease in average net asset levels discussed above as well as lower
overall interest rates during 2002 versus 2001.
Commissions are calculated on Series B's net asset value at the end of each
week and, therefore, vary according to weekly trading performance, contributions
and redemptions. Commissions decreased by approximately $204,000 and $68,000
during Year-To-Date 2002 as compared to Year-To-Date 2001 and Second Quarter
2002 as compared to Second Quarter 2001, respectively, due to the decrease in
average net asset levels as discussed above.
All trading decisions for Series B are made by Eclipse Capital Management,
Inc. (the 'Trading Advisor'). Management fees are calculated on Series B's net
asset value at the end of each week and, therefore, are affected by weekly
trading performance, contributions and redemptions. Management fees decreased by
$52,000 and $17,000 during Year-To-Date 2002 as compared to Year-To-Date 2001
and Second Quarter 2002 as compared to Second Quarter 2001, respectively, due to
the decrease in average net asset levels as discussed above.
Incentive fees are based on the 'New High Net Trading Profits' generated by
the Trading Advisor, as defined in the advisory agreement among Series B, the
Managing Owner and the Trading Advisor. Series B did not incur an incentive fee
during Year-To-Date 2002 or Year-To-Date 2001.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information regarding quantitative and qualitative disclosures about market
risk is not required pursuant to Item 305(e) of Regulation S-K.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings--There are no material legal proceedings pending by or
against the Registrant or the Managing Owner.
Item 2. Changes in Securities-- None
Item 3. Defaults Upon Senior Securities--None
Item 4. Submission of Matters to a Vote of Security Holders--None
Item 5. Other Information--Effective May 2002, Steven Weinreb was elected by the
Board of Directors of Prudential Securities Futures Management Inc. as
Chief Financial Officer replacing Barbara Brooks.
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits--
3.1
and
4.1-- Second Amended and Restated Declaration of Trust and Trust
Agreements of World Monitor Trust dated as of March 17, 1998
(incorporated by reference to Exhibits 3.1 and 4.1 to Series B's
Registration Statement on Form S-1, File No. 333-43041)
4.2-- Form of Request for Redemption (incorporated by reference
to Exhibit 4.2 to Series B's Registration Statement on Form
S-1, File No. 333-43041)
4.3-- Form of Exchange Request (incorporated by reference
to Exhibit 4.3 to Series B's Registration Statement
on Form S-1, File No. 333-43041)
4.4-- Form of Subscription Agreement (incorporated
by reference to Exhibit 4.4 to Series B's
Registration Statement on Form S-1, File No. 333-43041)
99.1-- Certificate pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 906 of the SARBANES-OXLEY Act
of 2002 (filed herewith)
(b) Reports on Form 8-K--None
11
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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.
WORLD MONITOR TRUST--SERIES B
By: Prudential Securities Futures Management Inc.
A Delaware corporation, Managing Owner
By: /s/ Steven Weinreb Date: August 12, 2002
----------------------------------------
Steven Weinreb
Chief Financial Officer
12