<Page>
ML GLOBAL HORIZONS L.P.
(A DELAWARE LIMITED PARTNERSHIP)
Financial Statements for the years ended
December 31, 2004, 2003 and 2002 And Report
of Independent Registered Public Accounting
Firm
[MERRILL LYNCH LOGO]
<Page>
ML GLOBAL HORIZONS L.P.
(A DELAWARE LIMITED PARTNERSHIP)
TABLE OF CONTENTS
<Table>
<Caption>
PAGE
----
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 1
FINANCIAL STATEMENTS:
Statements of Financial Condition as of December 31, 2004 and 2003 2
Statements of Income for the years ended December 31, 2004, 2003 and 2002 3
Statements of Changes in Partners' Capital for the years ended December 31, 2004, 2003 and 2002 4
Financial Data Highlights for the year ended December 31, 2004 5
Notes to Financial Statements 6-13
</Table>
<Page>
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Partners of
ML Global Horizons L.P.:
We have audited the accompanying statements of financial condition of ML Global
Horizons L.P. (the "Partnership") as of December 31, 2004 and 2003, and the
related statements of income and changes in partners' capital for each of the
three years in the period ended December 31, 2004 and the financial data
highlights for the year ended December 31, 2004. These financial statements and
financial data highlights are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements and financial data highlights based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements and financial data highlights are free of
material misstatement. The Partnership is not required to have nor were we
engaged to perform, an audit of its internal control over financial
reporting. An audit includes consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Partnership's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial data highlights
present fairly, in all material respects, the financial position of ML Global
Horizons L.P. as of December 31, 2004 and 2003, and the results of its
operations, changes in its partners' capital and financial data highlights
for each of the periods presented in conformity with accounting principles
generally accepted in the United States of America.
New York, New York
March 28, 2005
<Page>
ML GLOBAL HORIZONS L.P.
(A DELAWARE LIMITED PARTNERSHIP)
STATEMENTS OF FINANCIAL CONDITION
DECEMBER 31, 2004 AND 2003
<Table>
<Caption>
2004 2003
--------------- ---------------
ASSETS:
Equity in commodity futures trading accounts:
Cash $ 148,295,862 $ 47,688,150
Net unrealized profit on open contracts 3,149,341 3,851,353
Accrued interest and other assets 238,759 36,517
--------------- ---------------
TOTAL $ 151,683,962 $ 51,576,020
=============== ===============
LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES:
Profit Shares payable $ 1,107,931 $ 1,302,507
Brokerage commissions payable 862,605 311,605
Redemptions payable 331,608 535,943
Administrative fees payable 31,446 10,745
Incentive Override payable - 759,948
--------------- ---------------
Total liabilities 2,333,590 2,920,748
--------------- ---------------
PARTNERS' CAPITAL:
General Partner (756,618 Units and 2,131 Units) 1,215,470 496,775
Limited Partners (108,712,438 Units and 206,583 Units) 148,134,903 48,158,497
--------------- ---------------
Total partners' capital 149,350,372 48,655,272
--------------- ---------------
TOTAL $ 151,683,962 $ 51,576,020
=============== ===============
</Table>
NET ASSET VALUE PER UNIT (Note 6)
See notes to financial statements.
2
<Page>
ML GLOBAL HORIZONS L.P.
(A DELAWARE LIMITED PARTNERSHIP)
STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
<Table>
<Caption>
2004 2003 2002
-------------- -------------- --------------
TRADING REVENUES:
Trading profit (loss):
Realized $ 8,179,826 $ 13,824,221 $ 3,063,425
Change in unrealized (700,154) (44,489) 2,373,002
Settlement proceeds (Note 7) - - 1,346,689
-------------- -------------- --------------
Total trading revenues 7,479,672 13,779,732 6,783,116
-------------- -------------- --------------
INVESTMENT INCOME:
Interest 1,297,826 496,656 801,151
-------------- -------------- --------------
EXPENSES:
Brokerage commissions 5,725,678 3,601,088 3,571,969
Profit Shares 1,581,140 1,998,129 746,510
Administrative fees 205,144 124,175 123,171
Incentive Override - 805,634 68,966
-------------- -------------- --------------
Total expenses 7,511,962 6,529,026 4,510,616
-------------- -------------- --------------
NET INVESTMENT LOSS (6,214,136) (6,032,370) (3,709,465)
-------------- -------------- --------------
NET INCOME $ 1,265,536 $ 7,747,362 $ 3,073,651
============== ============== ==============
NET INCOME PER UNIT:
Weighted average number of General Partner
and Limited Partner Units outstanding 42,903,351 222,625 261,947
============== ============== ==============
Net income per weighted average General
Partner and Limited Partner Unit $ 0.0295 $ 34.80 $ 11.73
============== ============== ==============
</Table>
See notes to financial statements.
3
<Page>
ML GLOBAL HORIZONS L.P.
(A DELAWARE LIMITED PARTNERSHIP)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
<Table>
<Caption>
GENERAL LIMITED
UNITS PARTNER PARTNERS TOTAL
-------------- -------------- -------------- --------------
PARTNERS' CAPITAL, DECEMBER 31, 2001 278,468 $ 562,414 $ 51,211,046 $ 51,773,460
Net income - 37,151 3,036,500 3,073,651
Redemptions (41,959) (99,596) (7,805,238) (7,904,834)
-------------- -------------- -------------- --------------
PARTNERS' CAPITAL, DECEMBER 31, 2002 236,509 499,969 46,442,308 46,942,277
Net income - 87,257 7,660,105 7,747,362
Redemptions (27,795) (90,451) (5,943,916) (6,034,367)
-------------- -------------- -------------- --------------
PARTNERS' CAPITAL, DECEMBER 31, 2003 208,714 496,775 48,158,497 48,655,272
Additions 109,835,116 698,374 102,941,546 103,639,920
Net income - 20,321 1,245,215 1,265,536
Redemptions (574,774) - (4,210,356) (4,210,356)
-------------- -------------- -------------- --------------
PARTNERS' CAPITAL, DECEMBER 31, 2004 109,469,056 $ 1,215,470 $ 148,134,902 $ 149,350,372
============== ============== ============== ==============
</Table>
See notes to financial statements.
4
<Page>
ML GLOBAL HORIZONS L.P.
(A DELAWARE LIMITED PARTNERSHIP)
FINANCIAL DATA HIGHLIGHTS
FOR THE YEAR ENDED DECEMBER 31, 2004
The following per Unit data and ratios have been derived from information
provided in the financial statements.
<Table>
<Caption>
SERIES F SERIES A SERIES I
---------- ---------- ----------
PER UNIT OPERATING PERFORMANCE:
Net asset value, beginning of year $ 233.12 $ 1.0000 $ 1.0000
Realized trading profit 24.78 0.0367 0.0109
Change in unrealized trading profit (11.10) (0.0056) (0.0315)
Interest income 3.05 0.0120 0.0110
Expenses (19.75) (0.0816) (0.0426)
---------- ---------- ----------
Net asset value, end of year $ 230.10 $ 0.9615 $ 0.9478
========== ========== ==========
TOTAL RETURN:
Total return, before Profit Shares 0.32% -2.21% -4.02%
Profit Shares -1.72% -2.23% -1.30%
Total return -1.29% -4.32% -5.22%
RATIOS TO AVERAGE NET ASSETS:
Expenses (excluding Profit Shares) 6.92% 6.90%(a) 4.21(a)
Profit Shares 1.73% 1.89%(a) 4.73%(a)
---------- ---------- ----------
Expenses 8.65% 8.79% 8.94%
========== ========== ==========
Net investment loss -7.32% -7.09%(a) -6.98%(a)
========== ========== ==========
</Table>
(a) The ratios for the Classes operating for less than one year have been
annualized.
See notes to financial statements.
5
<Page>
ML GLOBAL HORIZONS L.P.
(A DELAWARE LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
ML Global Horizons L.P. (the "Partnership") was organized as an open-end
fund under the Delaware Revised Uniform Limited Partnership Act on May 11,
1993 and commenced trading activities on January 4, 1994. The Partnership
engages in the speculative trading of futures, options on futures and
forward contracts on a wide range of commodities. The Partnership issues
units of limited partnership interest ("Units") at Net Asset Value as of
the beginning of each month. Merrill Lynch Investment Managers, LLC ("MLIM
LLC") is the general partner of the Partnership, and is a wholly-owned
subsidiary of Merrill Lynch Investment Managers, LP ("MLIM"), which in
turn, is an indirect wholly-owned subsidiary of Merrill Lynch & Co. Inc.
("Merrill Lynch"). Merrill Lynch, Pierce, Fenner & Smith Incorporated
("MLPF&S"), a wholly-owned subsidiary of Merrill Lynch, is the
Partnership's commodity broker. MLIM LLC has agreed to maintain a general
partner's interest of at least 1% of the total capital in the Partnership
(see Note 9). MLIM LLC and each Limited Partner share in the profits and
losses of the Partnership in proportion to their respective interests in
it.
MLIM LLC selects independent advisors (the "Advisors") to manage the
Partnership's assets, and allocates and reallocates the Partnership's
assets among existing, replacement and additional Advisors.
ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements as well as the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
REVENUE RECOGNITION
Commodity futures, options on futures and forward contract transactions are
recorded on trade date and open contracts are reflected in "net unrealized
profit on open contracts" in the Statements of Financial Condition at the
difference between the original contract value and the market value (for
those commodity interests for which market quotations are readily
available) or at fair value. The change in unrealized profit (loss) on open
contracts from one period to the next is reflected in "change in
unrealized" in the Statements of Income.
6
<Page>
FOREIGN CURRENCY TRANSACTIONS
The Partnership's functional currency is the U.S. dollar; however, it
transacts business in currencies other than the U.S. dollar. Assets and
liabilities denominated in currencies other than the U.S. dollar are
translated into U.S. dollars at the rates in effect at the dates of the
Statements of Financial Condition. Income and expense items denominated in
currencies other than the U.S. dollar are translated into U.S. dollars at
the rates in effect during the period. Gains and losses resulting from the
translation to U.S. dollars are reported in "realized" in the Statements of
Income.
OPERATING EXPENSES, ONGOING OFFERING COSTS AND SELLING COMMISSIONS
MLIM LLC pays for all routine operating costs (including legal, accounting,
printing, postage and similar administrative expenses) of the Partnership,
including the costs, if any, of the ongoing offering of the Units. MLIM LLC
receives an administrative fee as well as a portion of the brokerage
commissions paid to MLPF&S by the Partnership (see Note 3).
No selling commissions have been or are paid directly by Limited Partners.
All selling commissions are paid by MLIM LLC.
INCOME TAXES
No provision for income taxes has been made in these financial statements
as each Partner is individually responsible for reporting income or loss
based on such Partner's respective share of the Partnership's income and
expenses as reported for income tax purposes.
DISTRIBUTIONS
The Limited Partners are entitled to receive, equally per Unit, any
distributions which may be made by the Partnership. No such distributions
have been declared for the years ended December 31, 2004, 2003 or 2002.
SUBSCRIPTIONS
Units are offered as of the close of business at the end of each month.
Units are purchased as of the first business day of any month at Net Asset
Value, but the subscription request must be submitted at least ten calendar
days before the end of the preceding month. Subscriptions submitted less
than ten days before the end of a month will be applied to Unit
subscriptions as of the beginning of the second month after receipt, unless
revoked by MLIM LLC.
REDEMPTIONS
A Limited Partner may redeem some or all of such Partner's Units at Net
Asset Value as of the close of business on the last business day of any
calendar month upon ten calendar days' notice. Units redeemed on or prior
to the end of the twelfth full month after purchase are assessed an early
redemption charge of 3% of their Net Asset Value as of the date of
redemption.
7
<Page>
The Financial Accounting Standards Board ("FASB") has issued Statement
No. 150, ACCOUNTING FOR CERTAIN FINANCIAL INSTRUMENTS WITH
CHARACTERISTICS OF BOTH LIABILITIES AND EQUITY, ("FAS 150") and is
effective for mandatorily redeemable financial instruments of entities
that are public entities for the first interim period beginning after
June 15, 2003. FAS 150 requires that a mandatorily redeemable financial
instrument shall be classified as a liability if the financial interest
is required be redeemed at a specified date or upon an event certain to
occur. The limited partners' financial interests are not required to be
redeemed at a specified date or upon an event certain to occur and thus
are not considered mandatorily redeemable financial instruments.
However, the limited partner may give 10 days notice for redemption of
their units and redeem at that month's net asset value. The Partnership
records the financial interests redeemed as a liability once the notice
of redemption is received from the limited partner. The adoption of FAS
150 will have no impact on the financial statements of the Partnership.
DISSOLUTION OF THE PARTNERSHIP
The Partnership will terminate on December 31, 2023 or at an earlier date
if certain conditions occur, as well as under certain other circumstances
as set forth in the Limited Partnership Agreement.
8
<Page>
2. CONDENSED SCHEDULE OF INVESTMENTS
The Partnership's investments, defined as Net unrealized profit on open
contracts on the Statements of Financial Condition, as of December 31,
2004, and 2003, are as follows:
2004
<Table>
<Caption>
LONG POSITIONS SHORT POSITIONS
----------------------------------------- -----------------------------------------
COMMODITY NUMBER UNREALIZED PERCENT OF NUMBER UNREALIZED PERCENT OF
INDUSTRY SECTOR OF CONTRACTS PROFIT (LOSS) NET ASSETS OF CONTRACTS PROFIT (LOSS) NET ASSETS
- --------------- ------------ ------------- ---------- ------------ ------------- ----------
Agriculture 543 $ 444,685 0.30% (914) $ (220,473) 0.15%
Currencies 6,483,273 3,673,444 2.46% (8,601,780) (2,712,818) 1.82%
Energy 26 (119,651) -0.08% (175) 170,020 0.11%
Interest rates 3,809 222,329 0.15% (4,491) 640,930 0.43%
Metals 1,113 1,227,276 0.82% (715) (978,357) -0.65%
Stock indices 955 830,596 0.56% (6) (28,640) -0.02%
------------- -------------
Total $ 6,278,679 4.21% $ (3,129,338) -2.10%
============= =============
<Caption>
NET UNREALIZED
COMMODITY PROFIT (LOSS) PERCENT OF
INDUSTRY SECTOR ON OPEN POSITIONS NET ASSETS MATURITY DATES
- --------------- ----------------- ---------- --------------
Agriculture $ 224,212 0.15% January 05 - December 06
Currencies 960,626 0.64% January 05 - March 05
Energy 50,369 0.03% January 05 - April 05
Interest rates 863,259 0.58% March 05 - December 06
Metals 248,919 0.17% January 05 - March 05
Stock indices 801,956 0.54% January 05 - March 05
-----------------
Total $ 3,149,341 2.11%
=================
</Table>
2003
<Table>
<Caption>
LONG POSITIONS SHORT POSITIONS
----------------------------------------- -----------------------------------------
COMMODITY NUMBER UNREALIZED PERCENT OF NUMBER UNREALIZED PERCENT OF
INDUSTRY SECTOR OF CONTRACTS PROFIT ASSETS NET ASSETS OF CONTRACTS PROFIT (LOSS) NET ASSETS
- --------------- ------------ ------------- ---------- ------------ ------------- ----------
Agriculture 338 $ (237,353) -0.49% (274) $ (28,616) -0.06%
Currencies 2,581,185 3,254,887 6.69% (1,489,024) (1,500,757) -3.08%
Energy 175 (33,577) -0.07% - - 0.00%
Interest rates 1,029 350,954 0.72% (438) (367,585) -0.76%
Metals 563 2,461,989 5.06% (67) $ (407,230) -0.84%
Stock indices 202 362,738 0.75% (1) (4,097) -0.01%
------------- -------------
Total $ 6,159,638 12.66% $ (2,308,285) -4.75%
============= =============
<Caption>
NET UNREALIZED
COMMODITY PROFIT (LOSS) PERCENT OF
INDUSTRY SECTOR ON OPEN POSITIONS NET ASSETS MATURITY DATES
- --------------- ----------------- ---------- --------------
Agriculture $ (265,969) -0.55% February 04 - May 04
Currencies 1,754,130 3.61% January 04 - March 04
Energy (33,577) -0.07% January 04 - March 04
Interest rates (16,631) -0.04% March 04 - December 05
Metals 2,054,759 4.22% January 04 - April 04
Stock indices 358,641 0.74% January 04 - March 04
-----------------
$ 3,851,353 7.91%
=================
</Table>
No individual contract's unrealized gain or loss comprised greater than 5% of
the Partner's capital at December 31, 2004 or 2003.
9
<Page>
3. RELATED PARTY TRANSACTIONS
The Partnership's U.S. dollar assets are maintained at MLPF&S. On assets
held in U.S. dollars, Merrill Lynch credits the Partnership with interest
at the prevailing 91-day U.S. Treasury bill rate. The Partnership is
credited with interest on any of its net gains actually held by MLPF&S in
non-U.S. dollar currencies at a prevailing local rate received by Merrill
Lynch. Merrill Lynch may derive certain economic benefit, in excess of the
interest which Merrill Lynch pays to the Partnership, from possession of
such assets.
Merrill Lynch charges the Partnership Merrill Lynch's cost of financing
realized and unrealized losses on the Partnership's non-U.S. dollar
denominated positions. Such amounts are netted against interest income due
to the insignificance of such amounts.
As of February 1, 2004, the Partnership was made available for new
investment. Series A and F units pay brokerage commissions to MLPF&S at a
flat monthly rate of .583 of 1% (a 7.00% annual rate) of the Series'
month-end trading assets. Series I pays brokerage commissions to MLPF&S at
a flat monthly rate of .333 of 1% (a 4.00% annual rate) of the Series'
month-end trading assets. The Partnership pays MLIM LLC a monthly
administrative fee of .021 of 1% (a 0.25% annual rate) of the Partnership's
month-end trading assets. Month-end trading assets are not reduced, for
purposes of calculating brokerage commissions and administrative fees, by
any accrued brokerage commissions, administrative fees, Profit Shares or
other fees or charges. Prior to February 1, 2004 the brokerage commissions
on Series F was a monthly rate of .604 of 1% (a 7.25% annual rate).
MLIM LLC estimates that the round-turn equivalent commission rate charged
to the Partnership by MLPF&S during the years ended December 31, 2004, 2003
and 2002 was approximately $90, $84 and $73, respectively (not including,
in calculating round-turn equivalents, forward contracts on a
futures-equivalent basis).
MLPF&S pays the Advisors annual consulting fees ranging up to 2.00% of the
Partnership's average month-end assets allocated to them for management,
after reduction for a portion of the brokerage commissions accrued with
respect to such assets.
Prior to January 1, 2004, the Partnership paid to MLIM LLC an Incentive
Override equal to 10% of the Net New Gain, as defined. Such payments were
also made to MLIM LLC from the redemption value of Units redeemed as of the
end of interim months during a year, to the extent of any Net New Gain
attributable to such Units when redeemed. For the years ended December 31,
2003 and 2002, an Incentive Override of $805,634 and $68,966 was accrued,
respectively.
The methods by which Incentive Overrides were calculated may have resulted
in certain disproportionate allocations of such fees and possible dilution
among Partners that purchased Units at different times.
4. ADVISORY AGREEMENTS
The Partnership and the Advisors have each entered into Advisory
Agreements. These Advisory Agreements generally renew one year after they
are entered into, subject to certain renewal rights exercisable by the
Partnership. The Advisors determine the commodity futures, options on
futures and forward contract trades to be made on behalf of their
respective Partnership accounts, subject to certain trading policies and to
certain rights reserved by MLIM LLC.
10
<Page>
Profit Shares, generally ranging from 20% to 25% of any New Trading Profit,
as defined, recognized by each Advisor considered individually,
irrespective of the overall performance of the Partnership, as of either
the end of each calendar quarter or year and upon the net reallocation of
assets away from an Advisor, are paid by the Partnership to each Advisor.
Profit Shares are also paid out in respect of Units redeemed as of the end
of interim months, to the extent of the applicable percentage of any New
Trading Profit attributable to such Units.
5. WEIGHTED AVERAGE UNITS
The weighted average number of Units outstanding is computed for purposes
of disclosing net income per weighted average Unit. The weighted average
number of Units outstanding for the years ended December 31, 2004, 2003 and
2002 equals the Units outstanding as of such date, adjusted proportionately
for Units sold and redeemed based on the respective length of time each was
outstanding during the year.
6. NET ASSET VALUE PER UNIT
As of December 31, 2004, and December 31, 2003 the Net Asset Values of the
different series of Units were as follows:
December 31, 2004
<Table>
<Caption>
NET ASSET
NUMBER OF VALUE PER
NET ASSET VALUE UNITS UNIT
--------------- --------------- ---------------
Series A $ 100,146,503 104,152,884 $ 0.9615
Series F 44,347,994 192,730 $ 230.10
Series I 4,855,875 5,123,442 $ 0.9478
--------------- ---------------
$ 149,350,372 109,469,056
=============== ===============
</Table>
Series X Units represent proceeds from ML Multi-Manager LLC liquidation and are
not unitized.
December 31, 2003
<Table>
<Caption>
NET ASSET
NUMBER OF VALUE PER
NET ASSET VALUE UNITS UNIT
--------------- --------------- ---------------
Series F $ 48,655,272 208,714 $ 233.12
=============== ===============
</Table>
7. COPPER SETTLEMENT
The Partnership, as a member of a class of plaintiffs, received a
settlement payment in August 2002 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 2002.
11
<Page>
8. FAIR VALUE AND OFF-BALANCE SHEET RISK
The nature of this Partnership has certain risks, which cannot be presented
on the 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 (loss) 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.
MLIM LLC 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 the
Advisors, 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 MLIM LLC does not itself intervene in the
markets to hedge or diversify the Partnership's market exposure; MLIM LLC
may urge the Advisors to reallocate positions in an attempt to avoid
over-concentrations. However, such interventions are unusual and unless it
appears that the Advisors have begun to deviate from past practice or
trading policies or to be trading erratically, MLIM LLC's basic risk
control procedures consist simply of the ongoing process of advisor
monitoring, with the market risk controls being applied by the Advisors
themselves.
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 on open contracts", if any,
included in the 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 MLPF&S acting as its commodity broker. Pursuant to the
brokerage agreement 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 Net unrealized profit on open
contracts on the Statements of Financial Condition under Equity in
commodity futures trading accounts.
12
<Page>
9. SUBSEQUENT EVENTS
Effective December 31, 2004, after the close of business, ML Multi-Manager
liquidated and placed all of its assets into the Partnership in the sum of
$97,076,618.
As of January 15, 2005, the Partnership changed its name from ML Global
Horizons L.P. to Global Horizons I L.P. No changes have occurred to the
Partnership's investment objective or to the Partnership's structure. On
March 1, 2005, MLIM LLC contributed $430,000 to the Partnership in order to
maintain its 1% general partner interest in the Partnership.
* * * * * * * * * * * * *
To the best of the knowledge and belief of the
undersigned, the information contained in this
report is accurate and complete.
Patrick Hayward
Chief Financial Officer
Merrill Lynch Investment Managers LLC
General Partner of
ML Global Horizons L.P.
13