10-Q 1 midwest2.txt SMITH BARNEY MID-WEST FUTURES FUND L.P. II FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (X) QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter ended June 30, 2001 ------------- Commission File Number 0-28336 ------- SMITH BARNEY MID-WEST FUTURES FUND L.P. II (Exact name of registrant as specified in its charter) -------------------------------------------------------------------------------- New York 13-3772374 -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer) incorporation or organization Identification No.) c/o Smith Barney Futures Management LLC 388 Greenwich St. - 7th Fl. New York, New York 10013 -------------------------------------------------------------------------------- (Address and Zip Code of principal executive offices) (212) 723-5424 -------------------------------------------------------------------------------- (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 ___ SMITH BARNEY MID-WEST FUTURES FUND L.P. II FORM 10-Q INDEX Page Number PART I - Financial Information: Item 1. Financial Statements: Statement of Financial Condition at June 30, 2001 and December 31, 2000 (unaudited). 3 Statement of Income and Expenses and Partners' Capital for the three and six months ended June 30, 2001 and 2000 (unaudited). 4 Notes to Financial Statements (unaudited) 5 - 10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11 - 14 Item 3. Quantitative and Qualitative Disclosures of Market Risk 15 PART II - Other Information 16 2 PART I Item 1. Financial Statements SMITH BARNEY MID-WEST FUTURES FUND L.P. II STATEMENT OF FINANCIAL CONDITION (Unaudited)
June 30, December 31, 2001 2000 ------------ ------------ Assets: Investment in Master Fund $39,689,741 $ -- Cash, in commodity futures trading account 33,993 37,561,240 Net unrealized appreciation on open positions, in commodity futures trading account -- 7,601,505 ----------- ----------- 39,723,734 45,162,745 Interest receivable 87,913 160,983 ----------- ----------- $39,811,647 $45,323,728 =========== =========== LIABILITIES AND PARTNERS' CAPITAL: Liabilities: Accrued expenses: Commissions $ 199,058 $ 226,619 Management fees 65,955 75,079 Administrative fees 32,977 37,539 Other 39,596 49,840 Redemptions payable 297,277 1,153,427 ----------- ----------- 634,863 1,542,504 ----------- ----------- Partners' Capital: General Partner, 608.9156 Unit equivalents outstanding in 2001 and 2000 832,552 855,825 Limited Partners, 28,044.4189 and 30,541.2490 Units of Limited Partnership Interest outstanding in 2001 and 2000, respectively 38,344,232 42,925,399 ----------- ----------- 39,176,784 43,781,224 ----------- ----------- $39,811,647 $45,323,728 =========== ===========
See Notes to Financial Statements. 3 SMITH BARNEY MID-WEST FUTURES FUND L.P. II STATEMENT OF INCOME AND EXPENSES AND PARTNERS' CAPITAL (UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, ---------------------------- ---------------------------- 2001 2000 2001 2000 ------------ ------------ ------------ ------------ Income: Realized gains on closed positions from Master $ (1,802,168) $ -- $ 4,323,895 $ -- Change in unrealized gains (losses) on open positions from Master (3,138,413) -- 2,195,620 -- Net gains (losses) on trading of commodity interests (See Note 1) Realized gains (losses) on closed positions -- (1,943,951) 1,517,732 (11,881,383) Change in unrealized losses on open positions -- (2,462,478) (7,601,505) (618,947) ____________ ____________ ____________ ____________ (4,940,581) (4,406,429) 435,742 (12,500,330) Less, brokerage commissions including clearing fees of $13,105, $13,915, $24,769 and $31,528, respectively (648,642) (823,602) (1,350,802) (1,840,838) ____________ ____________ ____________ ____________ Net realized and unrealized losses (5,589,223) (5,230,031) (915,060) (14,341,168) Interest income 297,617 547,291 714,258 1,244,856 ____________ ____________ ____________ ____________ (5,291,606) (4,682,740) (200,802) (13,096,312) ____________ ____________ ____________ ____________ Expenses: Management fees 204,866 525,274 428,552 1,171,697 Administrative fees 102,433 131,319 214,275 292,924 Other expenses 16,669 18,670 33,507 45,671 ____________ ____________ ____________ ____________ 323,968 675,263 676,334 1,510,292 ____________ ____________ ____________ ____________ Net loss (5,615,574) (5,358,003) (877,136) (14,606,604) Additions -- -- -- 835,000 Redemptions (825,390) (5,948,117) (3,727,304) (14,917,469) ____________ ____________ ____________ ____________ Net decrease in Partners' capital (6,440,964) (11,306,120) (4,604,440) (28,689,073) Partners' capital, beginning of period 45,617,748 55,324,229 43,781,224 72,707,182 ____________ ____________ ____________ ____________ Partners' capital, end of period $ 39,176,784 $ 44,018,109 $ 39,176,784 $ 44,018,109 ------------ ------------ ------------ ------------ Net asset value per Unit (28,653.3345 and 39,959.2219 Units outstanding at June 30, 2001 and 2000, respectively) $ 1,367.27 $ 1,101.58 $ 1,367.27 $ 1,101.58 ------------ ------------ ------------ ------------ Net loss per Unit of Limited Partnership Interest and General Partner Unit equivalent $ (192.88) $ (125.50) $ (38.22) $ (309.93) ------------ ------------ ------------ ------------
See Notes to Financial Statements. 4 Smith Barney Mid-West Futures Fund L.P. II Notes to Financial Statements June 30, 2001 (Unaudited) 1. General: Smith Barney Mid-West Futures Fund L.P. II,(the "Partnership") is a limited partnership which was organized on June 3, 1994 under the partnership laws of the State of New York to engage directly or indirectly in the speculative trading of a diversified portfolio of commodity interests including futures contracts, options and forward contracts. The Partnership commenced trading operations on September 1, 1994. From September 1, 1994 through January 25, 2001, the Partnership engaged directly in the trading of commodity interests. Effective January 26, 2001, the Partnership transferred substantially all of its assets to the JWH Strategic Allocation Master Fund LLC, a New York limited liability company (the "Master"), as a Non-Managing member. The Master was formed in order to permit commodity pools managed now or in the future by John W. Henry & Company, Inc. (the "Advisor") using the Strategic Allocation Program to invest together in one trading vehicle. Smith Barney Futures Management LLC (the "General Partner") is the general partner of the Partnership and the managing member of the Master. There is no material increase in expenses to investors as a result of investment in the Master and redemption rights are not affected. As of June 30, 2001, the Partnership owns 43.62% of the Master. It is the Partnership's intention to continue to invest substantially all of its assets in the Master. The performance of the Partnership is directly affected by the performance of the Master. The financial statements of the Master are attached to this report and should be read together with the Partnership's financial statements. The Partnership's commodity broker is Salomon Smith Barney Inc. ("SSB"). SSB is an affiliate of the General Partner. The General Partner is wholly owned by Salomon Smith Barney Holdings Inc. ("SSBHI"), which is the sole owner of SSB. SSBHI is a wholly owned subsidiary of Citigroup Inc. As of June 30, 2001, all trading decisions for the Partnership are made by John W. Henry & Company, Inc. ("the Advisor"). The accompanying financial statements are unaudited but, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Partnership's financial condition at June 30, 2001 and December 31, 2000 and the results of its operations for the three and six months ended June 30, 2001 and 2000. These financial statements present the results of interim periods and do not include all disclosures normally provided in annual financial statements. You should read these financial statements together with the financial statements and notes included in the Partnership's annual report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2000. 5 Due to the nature of commodity trading, the results of operations for the interim periods presented should not be considered indicative of the results that may be expected for the entire year. The Master's Statement of Financial Condition as of June 30, 2001, and its Statement of Income and Expenses and Members' Capital for the three months and period ended June 30, 2001 were:
Statement Financial Condition (Unaudited) June 30, 2001 Assets: Equity in commodity futures trading account: Cash $89,431,166 Net unrealized appreciation on open futures positions 1,551,184 ----------- $90,982,350 Members' Captial: Members' capital $90,982,350 ----------- $90,982,350 -----------
Statement of Income and Expenses and Members' Capital (Unaudited)
For the period from For the three months ended January 26, 2001 to June 30, 2001 June 30, 2001 Income: Net gains on trading of commodity interests: Realized gains (losses) on closed positions $ (4,113,157) $ 9,739,706 Change in unrealized losses on open positions (7,186,566) (7,446,241) ------------- ------------- (11,296,723) 2,293,465 Less, clearing fees (69,035) (107,273) ------------- ------------- Net income (loss) (11,365,758) 2,186,192 Additions 100,000 20,850,000 Redemptions (5,391,528) (6,955,068) ------------- ------------- Net increase (decrease) in Members' capital (16,657,286) 16,081,124 Members' capital, beginning of period 107,639,636 74,901,226 ------------- ------------- Members' capital, end of period $ 90,982,350 $ 90,982,350 ============= =============
6 Smith Barney Mid-West Futures Fund L.P. II Notes to Financial Statements June 30, 2001 (Unaudited) 1. Financial Highlights: Changes in the Partnership's net asset value per Unit for the three and six months ended June 30, 2001 and 2000 were as follows:
THREE-MONTHS ENDED SIX-MONTHS ENDED JUNE 30, JUNE 30, ------------------------ ---------------------- 2001 2000 2001 2000 ---------- --------- -------- --------- Net realized and unrealized losses $ (191.97) $ (122.58) $ (39.39) $ (304.26) Interest income 10.23 12.44 23.69 26.37 Expenses (11.14) (15.36) (22.52) (32.04) --------- --------- --------- --------- Decrease for period (192.88) (125.50) (38.22) (309.93) Net Asset Value per Unit, beginning of period 1,560.15 1,227.08 1,405.49 1,411.51 --------- --------- --------- --------- Net Asset Value per Unit, end of period $ 1,367.27 $ 1,101.58 $ 1,367.27 $ 1,101.58 ========== ========= ========= ==========
Total Return (12.4)% (2.8)% Ratio of expenses, including brokerage commissions, to average net assets * 9.3% 9.7% Ratio of net loss to average net assets * (53.8)% (4.2)% -------------------------------------------------------------------------------- Financial Highlights of the Master: Total Return (10.6)% 2.9% Ratio of expenses, including brokerage commissions, to average net assets * 0.3% 0.2% Ratio of net loss to average net assets * (46.8)% 4.9% * Annualized 7 Smith Barney Mid-West Futures Fund L.P. II Notes to Financial Statements June 30, 2001 (Unaudited) (Continued) 2. Trading Activities: The Partnership was formed for the purpose of trading contracts in a variety of commodity interests, including derivative financial instruments and derivative commodity instruments. The Partnership invests the majority of its assets through a "master fund/feeder fund" structure. The results of the Partnership's investment in the Master are shown in the statement of income and expenses and are discussed in Note 3 of the Master's Notes to Financial Statements. The respective Customer Agreements between the Partnership and SSB and the Master and SSB give the Partnership and the Master, respectively, the legal right to net unrealized gains and losses. All of the commodity interests owned by the Master are held for trading purposes. The average fair value during the period from January 26, 2001 to June 30, 2001, based on a monthly calculation, was $7,202,155. The fair value of these commodity interests, including opetions thereon, if applicable, at June 30, 2001 was $1,551,184, as detailed below.
Fair Value ------------------- June 30, 2001 ------------------- Currency: - Exchange Traded Contracts $ 78,063 - OTC Contracts 467,245 Energy 539,083 Grains 316,325 Interest Rates U.S. (501,981) Interest Rates Non-U.S. 642,863 Livestock 6,970 Metals: - Exchange Traded Contracts (344,033) - OTC Contracts 145,280 Softs 623,819 Indices (422,450) ` --------------- Total $ 1,551,184 ---------------
As of December 31, 2000, all of the commodity interests owned by the Partnership are held for trading purposes. The average fair value during the twelve months ended December 31, 2000, based on a monthly calculation, was $1,479,528. The fair value of these commodity interests, including options thereon, if applicable, at December 31, 2000, was $7,601,505, as detailed below.
Fair Value --------------------- December 31, 2000 --------------------- Currency: - Exchange Traded Contracts $ 207,188 - OTC Contracts 2,621,875 Energy 1,274,209 Grains 133,604 Interest Rates U.S. 1,617,516 Interest Rates Non-U.S. 1,330,610 Livestock 8,960 Metals: - Exchange Traded Contracts (7,055) - OTC Contracts (62,921) Softs (133,324) Indices 610,843 ------------ Total $ 7,601,505 ===========
8 Smith Barney Mid-West Futures Fund L.P. II Notes to Financial Statements June 30, 2001 (Unaudited) (Continued) 3. Financial Instrument Risk: The Partnership is party to financial instruments with off-balance sheet risk, including derivative financial instruments and derivative commodity instruments, through its investment in the Master. The Master is party to financial instruments with off-balance sheet risk, including derivative financial instruments and derivative commodity instruments, in the normal course of its business. These financial instruments may include forwards, futures and options, whose value is based upon an underlying asset, index, or reference rate, and generally represent future commitments to exchange currencies or cash flows, to purchase or sell other financial instruments at specific terms at specified future dates, or, in the case of derivative commodity instruments, to have a reasonable possibility to be settled in cash, through physical delivery or with another financial instrument. These instruments may be traded on an exchange or over-the-counter ("OTC"). Exchange traded instruments are standardized and include futures and certain option contracts. OTC contracts are negotiated between contracting parties and include forwards and certain options. Each of these instruments is subject to various risks similar to those related to the underlying financial instruments including market and credit risk. In general, the risks associated with OTC contracts are greater than those associated with exchange traded instruments because of the greater risk of default by the counterparty to an OTC contract. Market risk is the potential for changes in the value of the financial instruments traded by the Master due to market changes, including interest and foreign exchange rate movements and fluctuations in commodity or security prices. Market risk is directly impacted by the volatility and liquidity in the markets in which the related underlying assets are traded. Credit risk is the possibility that a loss may occur due to the failure of a counterparty to perform according to the terms of a contract. Credit risk with respect to exchange traded instruments is reduced to the extent that an exchange or clearing organization acts as a counterparty to the transactions. The Master's risk of loss in the event of counterparty default is typically limited to the amounts recognized in the statement of financial condition and not represented by the contract or notional amounts of the instruments. The Master has concentration risk because the sole counterparty or broker with respect to the Master's assets is SSB. The General Partner monitors and controls the Master's risk exposure on a daily basis through financial, credit and risk management monitoring systems and accordingly believes that it has effective procedures for evaluating and limiting the credit and market risks to which the Master is subject. These monitoring systems allow the General Partner to statistically analyze actual trading results with risk adjusted performance indicators and correlation 9 statistics. In addition, on-line monitoring systems provide account analysis of futures, forwards and options positions by sector, margin requirements, gain and loss transactions and collateral positions. The notional or contractual amounts of these instruments, while not recorded in the financial statements, reflect the extent of the Master's involvement in these instruments. The majority of these instruments mature within one year of June 30, 2001. However, due to the nature of the Master's business, these instruments may not be held to maturity. 10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Liquidity and Capital Resources The Partnership does not engage in the sale of goods or services. Its only assets are its investment in the Master and interest receivable. The Master does not engage in the sale of goods or services. Its only assets are its allocated equity in its commodity futures trading account, allocated net unrealized appreciation (depreciation) on open futures and forward contracts, commodity options, if applicable, and interest receivable. Because of the low margin deposits normally required in commodity futures trading, relatively small price movements may result in substantial losses to the Partnership. While substantial losses could lead to a decrease in liquidity, no such losses occurred in the second quarter of 2001. The Partnership's capital consists of the capital contributions of the partners as increased or decreased by its investment in the Master, expenses, interest income, redemptions of Units and distributions of profits, if any. For the six months ended June 30, 2001, Partnership capital decreased 10.5% from $43,781,224 to $39,176,184. This decrease was attributable to net loss from operations of $877,136 coupled with the redemption of 2,496.8301 Units resulting in an outflow of $3,727,304, for the six months ended June 30, 2001. Future redemptions can impact the amount of funds available for investment in the Master in subsequent periods. The Master's capital consists of the capital contributions of the members as increased or decreased by gains or losses on commodity futures trading, expenses, interest income, redemptions of Units and distributions of profits, if any. For the six months ended June 30, 2001, Master capital increased 21.5% from $74,901,226 to $90,982,350. This increase was attributable to net income from operations of $2,186,192 coupled with additions of $20,850,000, which was partially offset by the redemption of $6,955,068, for the period from January 26, 2001 to June 30, 2001. Future redemptions can impact the amount of funds available for investments in commodity contract positions in subsequent periods. Results of Operations During the second quarter of 2001, the Partnership's net asset value per unit decreased 12.4% from $1,560.15 to $1,367.27 as compared to a decrease of 10.2% in the second quarter of 2000. The Partnership experienced a net trading loss before brokerage commissions and related fees in the second quarter of 2001 of $4,940,581. Losses were primarily attributable to the trading of commodity futures, in the Master, in currencies, energy, U.S. and non-U.S. interest rates, livestock, metals, indices and softs and were partially offset by gains in grains. The Master experienced a net trading loss before brokerage commissions and related fees in the second quarter of 2001 of $11,296,723. The Partnership experienced a net trading loss before commissions and related fees in the second quarter of 2000 of $4,406,429. Losses were primarily attributable to the trading of commodity futures in energy, U.S. and non U.S. interest rates, softs, metals 11 and indices and were partially offset by gains in currencies, grains and livestock. Commodity futures markets are highly volatile. Broad price fluctuations and rapid inflation increase the risks involved in commodity trading, but also increase the possibility of profit. The profitability of the Partnership (and Master) depends on the existence of major price trends and the ability of the Advisor to identify correctly those price trends. Price trends are influenced by, among other things, changing supply and demand relationships, weather, governmental, agricultural, commercial and trade programs and policies, national and international political and economic events and changes in interest rates. To the extent that market trends exist and the Advisor is able to identify them, the Partnership (and Master) expects to increase capital through operations. Interest income on 80% of the Partnership's average daily equity, allocated to it by the Master, was earned at the monthly average 30 day U.S. Treasury bill rate. Interest income for the three and six months ended June 30, 2001 decreased by $249,674 and $530,598, respectively, as compared to the corresponding periods in 2000. The decrease in interest income is primarily due to a decrease in interest rates and the effect of redemptions on the Partnership's equity maintained in cash during the six month period ended June 30, 2001. Brokerage commissions are calculated on the adjusted net asset value on the last day of each month and, therefore, vary according to trading performance, additions and redemptions. Accordingly, they must be analyzed in relation to the fluctuations in the monthly net asset values. Commissions and fees for the three and six months ended June 30, 2001 decreased by $174,960 and $490,036, respectively, as compared to the corresponding periods in 2000. Management fees are calculated as a percentage of the Partnership's net asset value as of the end of each month and are affected by trading performance, additions and redemptions. Management fees for the three and six months ended June 30, 2001 decreased by $320,408 and $743,145, respectively, as compared to the corresponding periods in 2000 primarily due to a decrease in the management fee rate during the fourth quarter of 2000. Administrative fees are paid to the General Partner for administering the business and affairs of the Partnership. These fees are calculated as a percentage of the Partnership's net asset value as of the end of each month and are affected by trading performance, additions and redemptions. Administrative fees for the three and six months ended June 30, 2001 decreased by $28,886 and $78,649, respectively, as compared to the corresponding periods in 2000. Incentive fees are based on the new trading profits generated by the Advisor as defined in the advisory agreement between the Partnership, the General Partner and the Advisor. There were no incentive fees earned for the three and six months ended June 30, 2001 or 2000. 12 Item 3. Quantitative and Qualitative Disclosures of Market Risk All of the Partnership's assets are subject to the risk of trading loss through its investment in the Master. The Master is a speculative commodity pool. The market sensitive instruments held by it are acquired for speculative trading purposes, and all or substantially all of the Master's assets are subject to the risk of trading loss. Unlike an operating company, the risk of market sensitive instruments is integral, not incidental, to the Master's main line of business. Market movements result in frequent changes in the fair market value of the Master's open positions and, consequently, in its earnings and cash flow. The Master's market risk is influenced by a wide variety of factors, including the level and volatility of interest rates, exchange rates, equity price levels, the market value of financial instruments and contracts, the diversification effects of the Master's open positions and the liquidity of the markets in which it trades. The Master rapidly acquires and liquidates both long and short positions in a wide range of different markets. Consequently, it is not possible to predict how a particular future market scenario will affect performance, and the Master's past performance is not necessarily indicative of its future results. Value at Risk is a measure of the maximum amount which the Master could reasonably be expected to lose in a given market sector. However, the inherent uncertainty of the Master's speculative trading and the recurrence in the markets traded by the Master of market movements far exceeding expectations could result in actual trading or non-trading losses far beyond the indicated Value at Risk or the Master's experience to date (i.e., "risk of ruin"). In light of the foregoing as well as the risks and uncertainties intrinsic to all future projections, the inclusion of the quantification included in this section should not be considered to constitute any assurance or representation that the Master's losses in any market sector will be limited to Value at Risk or by the Master's attempts to manage its market risk. Exchange maintenance margin requirements have been used by the Master as the measure of its Value at Risk. Maintenance margin requirements are set by exchanges to equal or exceed the maximum losses reasonably expected to be incurred in the fair value of any given contract in 95%-99% of any one-day intervals. Maintenance margin has been used rather than the more generally available initial margin, because initial margin includes a credit risk component, which is not relevant to Value at Risk. 13 The following table indicates the trading Value at Risk associated with the Master's open positions by market category as of June 30, 2001. All open position trading risk exposures of the Master have been included in calculating the figures set forth below. As of June 30, 2001, the Master's total capitalization was $90,982,350.
June 30, 2001 (Unaudited) Year to Date % of Total High Low Market Sector Value at Risk Capitalization Value at Risk -------------------------------------------------------------------------------- Currencies: - Exchange Traded Contracts $ 425,250 0.47% $ 425,250 $ 182,149 - OTC Contracts 4,233,154 4.65% 5,090,588 1,955,574 Energy 2,033,500 2.24% 2,033,500 487,000 Grains 239,825 0.26% 306,150 222,075 Interest Rates U.S. 452,730 0.50% 1,300,700 406,740 Interest Rates Non-U.S 2,131,764 2.34% 4,042,034 1,271,569 Livestock 10,200 0.01% 10,800 7,000 Metals: - Exchange Traded Contracts 344,500 0.38% 479,000 120,000 - OTC Contracts 276,500 0.30% 276,500 77,500 Softs 439,782 0.48% 469,764 188,739 Indices 1,769,764 1.95% 1,769,764 965,339 ----------- ----- Total $12,356,969 13.58% =========== =====
14 PART II OTHER INFORMATION Item 1. Legal Proceedings - None Item 2. Changes in Securities and Use of Proceeds - 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. (a) Exhibits - None (b) Reports on Form 8-K - None 15 SIGNATURES Pursuant to the requirements of Section 13 or 15 (d) 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. SMITH BARNEY MID-WEST FUTURES FUND L.P. II By: Smith Barney Futures Management LLC (General Partner) By: /s/ David J. Vogel, President David J. Vogel, President Date: 8/13/01 --------- Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: Smith Barney Futures Management LLC (General Partner) By: /s/ David J. Vogel, President David J. Vogel, President Date: 8/13/01 --------- By: /s/ Daniel R. McAuliffe, Jr. ---------------------------- Daniel R. McAuliffe, Jr. Chief Financial Officer and Director Date: 8/13/01 --------- 16