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 30, 1998
/ / 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: 0-18417
PRUDENTIAL-BACHE CAPITAL RETURN FUTURES FUND L.P.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 13-3516796
- --------------------------------------------------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
One New York Plaza, 13th Floor, New York, New York 10292
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 778-7866
N/A
- --------------------------------------------------------------------------------
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 __
Part I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PRUDENTIAL-BACHE CAPITAL RETURN FUTURES FUND L.P.
(a limited partnership)
STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
June 30, December 31,
1998 1997
- ---------------------------------------------------------------------------------------------------
ASSETS
Equity in commodity trading accounts:
Cash $ 3,687,282 $ 3,259,537
U.S. Treasury bills, at amortized cost 11,732,326 13,007,441
Net unrealized gain (loss) on open commodity positions (658,992) 1,177,521
----------- ------------
Total assets $14,760,616 $17,444,499
----------- ------------
----------- ------------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Redemptions payable $ 299,716 $ 291,915
Management fees payable 48,917 57,913
Accrued expenses 29,088 52,908
Due to affiliates 56,533 17,580
Incentive fee payable -- 12,998
----------- ------------
Total liabilities 434,254 433,314
----------- ------------
Commitments
Partners' capital
Limited partners (104,909 and 113,880 units outstanding) 14,183,056 16,840,972
General partner (1,060 and 1,151 units outstanding) 143,306 170,213
----------- ------------
Total partners' capital 14,326,362 17,011,185
----------- ------------
Total liabilities and partners' capital $14,760,616 $17,444,499
----------- ------------
----------- ------------
Net asset value per limited and general partnership unit ('Units') $ 135.19 $ 147.88
----------- ------------
----------- ------------
- ---------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements.
2
PRUDENTIAL-BACHE CAPITAL RETURN FUTURES FUND L.P.
(a limited partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
Six months ended Three months ended
June 30, June 30,
-------------------------- --------------------------
1998 1997 1998 1997
- ------------------------------------------------------------------------------------------------------
REVENUES
Net realized gain (loss) $ 1,102,050 $ (64,438) $1,127,244 $(1,359,428)
Change in net unrealized gain/loss (1,836,513) 853,179 (1,121,423) 1,555,937
Interest from U.S. Treasury bills 310,078 343,695 142,338 168,481
----------- ---------- ---------- -----------
(424,385) 1,132,436 148,159 364,990
----------- ---------- ---------- -----------
EXPENSES
Commissions 625,500 707,738 295,453 344,244
Management fees 308,985 355,053 147,107 172,096
General and administrative 79,779 69,374 38,682 28,225
----------- ---------- ---------- -----------
1,014,264 1,132,165 481,242 544,565
----------- ---------- ---------- -----------
Net income (loss) $(1,438,649) $ 271 $ (333,083) $ (179,575)
----------- ---------- ---------- -----------
----------- ---------- ---------- -----------
ALLOCATION OF NET INCOME (LOSS)
Limited partners $(1,424,253) $ 268 $ (329,749) $ (177,778)
----------- ---------- ---------- -----------
----------- ---------- ---------- -----------
General partner $ (14,396) $ 3 $ (3,334) $ (1,797)
----------- ---------- ---------- -----------
----------- ---------- ---------- -----------
NET INCOME (LOSS) PER WEIGHTED AVERAGE
LIMITED AND GENERAL PARTNERSHIP UNIT
Net income (loss) per weighted average
limited and general partnership unit $ (12.89) $ -- $ (3.08) $ (1.43)
----------- ---------- ---------- -----------
----------- ---------- ---------- -----------
Weighted average number of limited and
general partnership units outstanding 111,609 128,116 108,186 125,622
----------- ---------- ---------- -----------
----------- ---------- ---------- -----------
- ------------------------------------------------------------------------------------------------------
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
(Unaudited)
LIMITED GENERAL
UNITS PARTNERS PARTNER TOTAL
- ----------------------------------------------------------------------------------------------------
Partners' capital--December 31, 1997 115,031 $16,840,972 $170,213 $17,011,185
Net loss (1,424,253) (14,396) (1,438,649)
Redemptions (9,062) (1,233,663) (12,511) (1,246,174)
-------- ----------- -------- -----------
Partners' capital--June 30, 1998 105,969 $14,183,056 $143,306 $14,326,362
-------- ----------- -------- -----------
-------- ----------- -------- -----------
- ----------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements.
3
PRUDENTIAL-BACHE CAPITAL RETURN FUTURES FUND L.P.
(a limited partnership)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
(Unaudited)
A. General
These financial statements have been prepared without audit. In the opinion
of management, the financial statements contain all adjustments (consisting of
only normal recurring adjustments) necessary to present fairly the financial
position of Prudential-Bache Capital Return Futures Fund L.P. (the
'Partnership') as of June 30, 1998 and the results of its operations for the six
and three months ended June 30, 1998 and 1997. 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 generally accepted accounting
principles have been omitted. It is suggested that these financial statements be
read in conjunction with the financial statements and notes thereto included in
the Partnership's Annual Report on Form 10-K as filed with the Securities and
Exchange Commission for the year ended December 31, 1997.
Certain balances from the prior period have been reclassified to conform with
the current financial statement presentation.
B. Related Parties
Seaport Futures Management, Inc. (the 'General Partner') and its affiliates
perform services for the Partnership 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.
The costs incurred for these services for the six months ended June 30, 1998
and 1997 were:
1998 1997
-------------------------------------------------------------------------------
Commissions $625,500 $707,738
General and administrative 45,727 45,092
-------- --------
$671,227 $752,830
-------- --------
-------- --------
The costs incurred for these services for the three months ended June 30,
1998 and 1997 were:
1998 1997
-------------------------------------------------------------------------------
Commissions $295,453 $344,244
General and administrative 22,777 22,071
-------- --------
$318,230 $366,315
-------- --------
-------- --------
The Partnership maintains its trading and cash accounts at Prudential
Securities Incorporated ('PSI'), the Partnership's commodity broker and an
affiliate of the General Partner. Except for the portion of assets that is
deposited as margin to maintain forward currency contract positions as further
discussed below, the Partnership's assets are maintained either with PSI or, for
margin purposes, with the various exchanges on which the Partnership is
permitted to trade.
The Partnership, acting through its trading manager, executes
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 trading desks. All over-the-counter currency transactions
are conducted between PSI and the Partnership pursuant to a line of
credit. PSI may require that collateral be posted against
the marked-to-market position of the Partnership.
4
C. Credit and Market Risk
Since the Partnership's business is to trade futures, forward and options
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).
Futures, forward and options contracts involve varying degrees of off-balance
sheet risk; and changes in the level of volatility of interest rates, foreign
currency exchange rates or the market values of the contracts (or commodities
underlying the contracts) frequently result in changes in the Partnership's
unrealized gain (loss) on open commodity positions 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 contracts held by
the Partnership as well as the liquidity of the markets in which the contracts
are traded.
Futures and options contracts are traded on organized exchanges and are thus
distinguished from forward contracts which are entered into privately by the
parties. The credit risks associated with futures and options contracts are
typically perceived to be less than those associated with forward contracts,
because exchanges typically provide clearinghouse arrangements in which the
collective credit (subject to certain limitations) of the members of the
exchanges is pledged to support the financial integrity of the exchange. On the
other hand, the Partnership must rely solely on the credit of its broker (PSI)
with respect to forward transactions. The Partnership presents unrealized gains
and losses on open forward positions as a net amount in the statements of
financial condition because it has a master netting agreement with PSI.
The General Partner attempts to minimize both credit and market risks by
requiring the Partnership's trading manager to abide by various trading
limitations and policies. The General Partner monitors compliance with these
trading limitations and policies which include, but are not limited to,
executing and clearing all trades with creditworthy counterparties (currently,
PSI is the sole counterparty or broker); 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. The General Partner
may impose additional restrictions (through modifications of such trading
limitations and policies) upon the trading activities of the trading manager as
it, in good faith, deems to be in the best interest of the Partnership.
PSI, when acting as the Partnership's futures commission merchant in
accepting orders for the purchase or sale of domestic futures and options
contracts, is required by Commodity Futures Trading Commission ('CFTC')
regulations to separately account for and segregate as belonging to the
Partnership all assets of the Partnership relating to domestic futures and
options trading and is not to commingle such assets with other assets of PSI. At
June 30, 1998 and December 31, 1997, such segregated assets totalled $6,912,659
and $9,141,872, respectively. Part 30.7 of the CFTC regulations also requires
PSI to secure assets of the Partnership related to foreign futures and options
trading which totalled $8,680,244 and $7,946,743 at June 30, 1998 and December
31, 1997, respectively. There are no segregation requirements for assets related
to forward trading.
As of June 30, 1998 the Partnership's open forward contracts mature within
three months, but open futures contracts mature within one year.
At June 30, 1998 and December 31, 1997, gross contract amounts of open
futures and forward contracts are:
1998 1997
------------ ------------
Currency Forward Contracts:
Commitments to purchase $ 6,884,149 $ 8,299,224
Commitments to sell 22,851,884 21,741,261
Financial Futures Contracts:
Commitments to purchase 136,329,243 64,953,831
Commitments to sell 33,373,214 28,551,074
Other Futures Contracts:
Commitments to purchase 353,408 3,287,779
Commitments to sell 6,906,485 7,476,710
The gross contract amounts represent the Partnership's potential involvement
in a particular class of financial instrument (if it were to take or make
delivery on an underlying futures or forward contract). The gross contract
amounts significantly exceed the future cash requirements as the Partnership
intends to close out open positions prior to settlement and thus is generally
subject only to the risk of loss arising from
5
the change in the value of the contracts. As such, the Partnership considers the
'fair value' of its futures and forward contracts to be the net unrealized gain
or loss on the contracts. Thus, the amount at risk associated with counterparty
nonperformance of all contracts is the net unrealized gain included in the
statements of financial condition. The market risk associated with the
Partnership's commitments to purchase commodities is limited to the gross
contract amounts involved, while the market risk associated with its commitments
to sell is unlimited since the Partnership's potential involvement is to make
delivery of an underlying commodity at the contract price; therefore, it must
repurchase the contract at prevailing market prices.
At June 30, 1998 and December 31, 1997, the fair value of open futures and
forward contracts were:
1998 1997
-------------------------- --------------------------
Assets Liabilities Assets Liabilities
---------- ----------- ---------- -----------
Futures Contracts:
Domestic exchanges
Financial $ 121,244 $ 20,513 $ 80,344 $ --
Other 152,079 64,615 611,279 68,124
Foreign exchanges
Financial 157,185 182,561 250,118 66,494
Other 29,738 19,262 16,249 1,735
Forward Contracts:
Currencies 70,591 902,878 622,474 266,590
---------- ----------- ---------- -----------
$ 530,837 $ 1,189,829 $1,580,464 $ 402,943
---------- ----------- ---------- -----------
---------- ----------- ---------- -----------
The following table presents the average fair values of futures and forward
contracts during the six months ended June 30, 1998 and 1997, respectively.
1998 1997
-------------------------- --------------------------
Assets Liabilities Assets Liabilities
---------- ----------- ---------- -----------
Futures Contracts:
Domestic exchanges
Financial $ 79,325 $ 16,748 $ 36,219 $ 11,639
Currencies -- -- 60,786 8,795
Other 278,276 61,695 161,161 26,035
Foreign exchanges
Financial 249,017 71,364 149,004 81,790
Other 20,847 9,911 3,275 602
Forward Contracts:
Currencies 481,374 437,052 665,747 236,884
---------- ----------- ---------- -----------
$1,108,839 $ 596,770 $1,076,192 $ 365,745
---------- ----------- ---------- -----------
---------- ----------- ---------- -----------
6
The following table presents the average fair values of futures and forward
contracts during the three months ended June 30, 1998 and 1997, respectively.
1998 1997
------------------------ ------------------------
Assets Liabilities Assets Liabilities
-------- ----------- -------- -----------
Futures Contracts:
Domestic exchanges
Financial $ 42,939 $ 29,310 $ 58,653 $ 13,752
Currencies -- -- 35,984 9,444
Other 197,940 62,013 213,808 44,083
Foreign exchanges
Financial 178,438 78,071 145,068 99,747
Other 20,521 13,466 5,731 1,053
Forward Contracts:
Currencies 494,305 329,698 427,864 155,978
-------- ----------- -------- -----------
$934,143 $ 512,558 $887,108 $ 324,057
-------- ----------- -------- -----------
-------- ----------- -------- -----------
The following table presents the Partnership's trading revenues for the six
and three months ended June 30, 1998 and 1997, respectively.
Six Months Ended Three Months Ended
June 30, June 30,
----------------------- ----------------------
1998 1997 1998 1997
--------- --------- --------- --------
Futures Contracts:
Domestic exchanges
Financial $(189,142) $ (41,025) $(113,188) $(16,950)
Currencies -- 61,494 -- 4,141
Other (77,868) (121,635) 251,232 (81,111)
Foreign exchanges
Financial (198,877) 139,136 (99,195) 10,765
Other 52,247 27,010 963 27,010
Forward Contracts:
Currencies (320,823) 718,819 (33,991) (90,541)
Foreign Currencies -- 4,942 -- 343,195
--------- --------- --------- --------
$(734,463) $ 788,741 $ 5,821 $196,509
--------- --------- --------- --------
--------- --------- --------- --------
7
PRUDENTIAL-BACHE CAPITAL RETURN FUTURES FUND L.P.
(a limited partnership)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
The Partnership commenced operations on May 12, 1989 with gross proceeds of
$139,151,000. After accounting for organizational and offering costs, the
Partnership's net proceeds were $137,151,000.
As of June 30, 1998, 100% of the Partnership's net assets were allocated to
commodities trading. A significant portion of the net asset value was held in
U.S. Treasury bills (which represented approximately 80% of the net asset value
prior to redemptions payable) and cash, which are used as margin for the
Partnership's trading in commodities. Inasmuch as the sole business of the
Partnership is to trade in commodities, the Partnership will continue to own
such liquid assets to be used as margin.
The percentage that U.S. Treasury bills bears to the net asset value varies
each day, and from month to month, as the market value of commodity interests
change. All interest earned on the Partnership's interest-bearing funds is paid
to the Partnership.
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 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 the Partnership from promptly liquidating its commodity
futures positions.
Since the Partnership's business is to trade futures, forward and options
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). The General Partner attempts to minimize these
risks by requiring the Partnership's trading manager to abide by various trading
limitations and policies. See Note C to the financial statements for a further
discussion on the credit and market risks associated with the Partnership's
futures, forward and options contracts.
Redemptions by limited partners recorded for the six and three months ended
June 30, 1998 were $1,233,663 and $296,607, respectively. Redemptions by the
General Partner recorded for the six and three months ended June 30, 1998 were
$12,511 and $3,109, respectively. Redemptions by limited partners and the
General Partner from commencement of operations, May 12, 1989, through June 30,
1998 totalled $141,566,531 and $1,611,259, respectively. Future redemptions will
impact the amount of funds available for investment in commodity contracts in
subsequent periods.
The Partnership does not have, nor does it expect to have, any capital
assets.
Results of Operations
The net asset value per Unit as of June 30, 1998 was $135.19, a decrease of
8.58% from the December 31, 1997 net asset value per Unit of $147.88.
April's negative performance resulted from losses in the financial, currency
and metal sectors. Partially offsetting losses were gains in the soft, grain,
energy and meat sectors. Losses in the financial sector were driven by market
activity in the U.S. and Europe. Early in the month, 30-year U.S. Treasury bond
yields approached record lows driving prices higher. However, the market
suffered what seemed to be a major setback on April 28th on a report that the
Federal Reserve policy makers were leaning toward an interest rate hike, causing
bond prices to fall. Mild inflation data released on April 29th sent bond prices
soaring again, pushing the yield back below 6%. In Europe, bond yields, which
had been declining for much of the first quarter, rose in April, resulting in
losses. In the currency sector, large losses were suffered in German deutsche
mark positions as it rose against the U.S. dollar, reflecting expectations of a
German tax hike. Long Australian dollar positions performed poorly as the
Australian dollar succumbed to a worsening economic picture in Asia. Swiss
franc, French franc and Canadian dollar positions lost value as well. Gains
8
in the soft sector partially offset overall Partnership losses. The Partnership
was able to benefit from a five-year low in sugar prices caused by expectations
of a large Brazilian crop. Positions in coffee were also profitable. Corn and
wheat contracts in the grain sector also added gains, as did positions in light
crude and crude oil in the energy sector.
May's positive performance resulted from gains in the currency, financial,
energy, metal and grain sectors. Losses were experienced in the soft, index and
meat sectors. The Japanese yen, damaged by continuous bank failings and negative
news, continued its slide versus the U.S. dollar. During the month, skeptical
investors drove the yen lower to a new seven-year low, profiting the
Partnership's short positions. Australian dollar, Canadian dollar and German
deutsche mark/Japanese yen crossrate positions were also profitable in the
currency sector. In the financial sector, the Japanese Government bond reached
record highs as it rallied in response to reports that the end of economic
problems in Japan was not yet in sight. This rise profited the Partnership's
long positions. Long positions in Australian three-year bonds also faired well.
In the energy sector, short light crude and crude oil positions gained as both
prices fell in response to a large supply and stagnant demand. Cotton and coffee
positions were unprofitable in the soft sector as were live cattle positions in
the meat sector. Index sector positions in the Nikkei added to losses for the
Partnership as the index continued its decline, reflecting an unstable economy.
June's negative performance resulted from losses in the currency, financial,
metal, index and grain sectors. Mitigating losses were gains in the soft, energy
and meat sectors. In the currency sector, the value of the deutsche mark fell
versus the U.S. dollar as concerns grew over the worsening economic picture in
Russia. This was partially due to the significant amount of outstanding loans to
Russian businesses by German banks. This initiated a flight to the safety of the
British pound, driving it higher versus the U.S. dollar which resulted in losses
for the Partnership. British pound/deutsche mark crossrate positions were also
affected providing further losses. In the financial sector, positions in the
Japanese Government bond led to losses as the yield rose from record lows
following the United States' intervention to support the yen. The yen's reversal
negatively impacted positions in the Australian ten-year and three-year bonds as
well as Eurodollar bonds. With the exception of a mid-month sell-off, the prices
of both silver and gold advanced throughout the month, resulting in losses for
the Partnership. The Partnership experienced gains in short energy sector
positions as prices fell on skepticism as to whether or not OPEC would meet
their planned cutbacks. In the soft sector, coffee prices reached an 18-month
low on indications of a strong supply, profiting the Partnership's short
positions. Trading in cotton led to gains as well.
Interest income from U.S. Treasury bills decreased by approximately $34,000
and $26,000 for the six and three months ended June 30, 1998 as compared to the
same periods in 1997 due to the effect of poor trading performance in the first
six months of 1998 and redemptions on the funds available for investment in U.S.
Treasury bills.
Commissions are calculated on the net asset value on the first day of each
month and, therefore, vary based on monthly trading performance and redemptions.
Commissions decreased by approximately $82,000 and $49,000 for the six and three
months ended June 30, 1998 as compared to the same periods in 1997 primarily due
to the effect of poor trading performance in the first six months of 1998 and
redemptions on the monthly net asset values.
Management fees are calculated on the net asset value as of the end of each
month and, therefore, are affected by trading performance and redemptions.
Management fees decreased by approximately $46,000 and $25,000 for the six and
three months ended June 30, 1998 as compared to the same periods in 1997 for the
same reasons commissions decreased as discussed above.
Incentive fees are based on New High Net Trading Profits generated by the
trading manager, as defined in the Advisory Agreement among the Partnership, the
General Partner and the trading manager. No incentive fees were earned for the
six and three months ended June 30, 1998 and 1997.
General and administrative expenses increased approximately $10,000 for both
the six and three months ended June 30, 1998 as compared to the same periods in
1997. These expenses include reimbursements of cost incurred by the General
Partner on behalf of the Partnership in addition to accounting, audit, tax and
legal fees as well as printing and postage costs related to reports sent to
limited partners.
9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings--There are no material legal proceedings pending by or
against the Registrant or the General Partner.
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--None
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits
4.1 Agreement of Limited Partnership of the Registrant, dated
as of January 26, 1989 as amended and restated as of March
15, 1989 (incorporated by reference to Exhibits 3.1 and
4.1 to the Registrant's Annual Report on Form 10-K for the
period ended December 31, 1989)
4.2 Subscription Agreement (incorporated by
reference to Exhibit 4.2 to the Registrant's
Annual Report on Form 10-K for the period ended
December 31, 1989)
4.3 Request for Redemption (incorporated
by reference to Exhibit 4.3 to the
Registrant's Annual Report on Form
10-K for the period ended December 31, 1989)
27.1 Financial Data Schedule (filed herewith)
(b) Reports on Form 8-K
No reports on Form 8-K were filed for the period covered by this
report.
10
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.
Prudential-Bache Capital Return Futures Fund L.P.
By: Seaport Futures Management, Inc.
A Delaware corporation, General Partner
By: /s/ Steven Carlino Date: August 11, 1998
----------------------------------------
Steven Carlino
Vice President
Chief Accounting Officer for the Registrant
11