-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Uhle58OYmmZ+HCcuYSzWEJ/x3m8CnvwqG6EcjNQa/2h/sI8pogkpdpDCNvau2yLQ pzzXRX6pyLoXxA/mOk3VLQ== 0000950130-98-004023.txt : 19980814 0000950130-98-004023.hdr.sgml : 19980814 ACCESSION NUMBER: 0000950130-98-004023 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980813 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ML PRINCIPAL PROTECTION LP CENTRAL INDEX KEY: 0000917259 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 133750642 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-25000 FILM NUMBER: 98686538 BUSINESS ADDRESS: STREET 1: 6TH FL, SOUTH TOWER, M L WORLD HDQR STREET 2: C/O ML FUTURES INVESTMENT PARTNERS INC CITY: NEW YORK STATE: NY ZIP: 10080-6106 BUSINESS PHONE: 2122364161 MAIL ADDRESS: STREET 1: C/O MERRILL LYNCH INVESTMENT PARTNERS IN STREET 2: WORLD FINANCIAL CENTER S TOWER 6TH FL CITY: NEW YORK STATE: NY ZIP: 10080-6106 FORMER COMPANY: FORMER CONFORMED NAME: ML PRINCIPAL PROTECTION PLUS LP DATE OF NAME CHANGE: 19940616 FORMER COMPANY: FORMER CONFORMED NAME: SECTOR STRATEGY FUND VII LP DATE OF NAME CHANGE: 19940107 10-Q 1 QUARTERLY REPORT 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 30, 1998 --------------- 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 0-25000 ML PRINCIPAL PROTECTION L.P. ---------------------------- ML PRINCIPAL PROTECTION TRADING L.P. ------------------------------------ (Rule 140 Co-Registrant) (Exact Name of Registrant as specified in its charter) Delaware 13-3750642 (Registrant) - --------------------------------- 13-3775509 (Co-Registrant) (State or other jurisdiction of ----------------------------- incorporation or organization) (IRS Employer Identification No.) c/o Merrill Lynch Investment Partners Inc. Merrill Lynch World Headquarters - South Tower, 6th Fl. World Financial Center New York, New York 10080-6106 ----------------------------------------------------- (Address of principal executive offices) (Zip Code) 212-236-5662 -------------------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- PART I - FINANCIAL INFORMATION Item 1. Financial Statements ML PRINCIPAL PROTECTION L.P. ---------------------------- (a Delaware limited partnership) -------------------------------- CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION ----------------------------------------------
1998 1997 ----------------- ----------------- ASSETS Cash $ 1,242 $ 1,423 Accrued interest 903,822 38,562 U.S. Government obligations 77,010,800 94,651,930 Equity in commodity futures trading accounts: Cash and options premiums 25,285,239 6,127,948 Net unrealized profit on open contracts 52,514 2,958,084 ----------------- ----------------- TOTAL $ 103,253,617 $ 103,777,947 ================= ================= LIABILITIES AND PARTNERS' CAPITAL LIABILITIES: Redemptions payable $ 2,906,480 $ 636,155 Profit Shares payable 393,271 591,195 Brokerage commissions payable 553,514 494,349 Administrative fees payable 15,815 14,330 ----------------- ----------------- Total liabilities 3,869,080 1,736,029 ----------------- ----------------- Minority Interest 777,028 815,233 ----------------- ----------------- PARTNERS' CAPITAL: General Partners (6654.61 and 23141.61 Units) 699,455 2,564,153 Limited Partners (951812.25 and 989140.56 Units) 97,908,054 105,628,837 Subscriptions receivable (0 and 69,663.05 Units) - (6,966,305) ----------------- ----------------- Total partners' capital 98,607,509 101,226,685 ----------------- ----------------- TOTAL $ 103,253,617 $ 103,777,947 ================= =================
NET ASSET VALUE PER UNIT (NOTE 2) See notes to consolidated financial statements. 2 ML PRINCIPAL PROTECTION L.P. ---------------------------- (a Delaware limited partnership) -------------------------------- CONSOLIDATED STATEMENTS OF OPERATIONS -------------------------------------
For the three For the three For the six For the six months ended months ended months ended months ended June 30, June 30, June 30, June 30, 1998 1997 1998 1997 ------------------ ----------------- ----------------- ----------------- REVENUES: Trading profit (loss): Realized $ 347,507 $ (869,301) $ 1,596,744 $ 3,722,347 Change in unrealized (1,794,976) (205,905) (2,938,626) (1,403,567) ------------------ ----------------- ----------------- ----------------- Total trading results (1,447,469) (1,075,206) (1,341,882) 2,318,780 ------------------ ----------------- ----------------- ----------------- Interest income 1,483,007 1,069,022 2,970,056 2,182,912 ------------------ ----------------- ----------------- ----------------- Total revenues 35,538 (6,184) 1,628,174 4,501,692 ------------------ ----------------- ----------------- ----------------- EXPENSES: Profit Shares 286,419 (85,054) 704,269 498,398 Brokerage commissions 1,693,272 1,067,741 3,254,852 2,141,245 Administrative fees 48,379 30,507 92,996 61,179 ------------------ ----------------- ----------------- ----------------- Total expenses 2,028,070 1,013,194 4,052,117 2,700,822 ------------------ ----------------- ----------------- ----------------- (LOSS) INCOME BEFORE MINORITY INTEREST (1,992,532) (1,019,378) (2,423,943) 1,800,870 ------------------ ----------------- ----------------- ----------------- Minority interest 27,002 28,337 38,205 (12,289) ------------------ ----------------- ----------------- ----------------- NET (LOSS) INCOME $ (1,965,530) $ (991,041) $ (2,385,738) $ 1,788,581 ================== ================= ================= ================= NET (LOSS) INCOME PER UNIT: Weighted average number of units outstanding 1,029,734 741,218 1,013,441 723,788 ================== ================= ================= ================= Weighted average net (loss) income per Limited Partner and General Partner Unit $ (1.91) $ (1.34) $ (2.35) $ 2.47 ================== ================= ================= =================
See notes to consolidated financial statements. 3 ML PRINCIPAL PROTECTION L.P. ---------------------------- (a Delaware limited partnership) -------------------------------- CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL ------------------------------------------------------- For the six months ended June 30, 1998 and 1997 -----------------------------------------------
Limited General Subscriptions Units Partners Partner Receivable Total ----------- --------------------- --------------- ---------------------- ----------------- PARTNERS' CAPITAL, December 31, 1996 723,659.97 $ 76,542,105 $ 2,301,180 $ - $ 78,843,285 Subscriptions 116,453.00 11,645,300 - - 11,645,300 Distributions - (1,481,675) (33,522) - (1,515,197) Net Income - 1,739,075 49,506 - 1,788,581 Redemptions (95,650) (10,424,401) - - (10,424,401) ----------- --------------------- --------------- ---------------------- ----------------- PARTNERS' CAPITAL, June 30, 1997 744,462.59 $ 78,020,404 $ 2,317,164 $ - $ 80,337,568 =========== ===================== =============== ====================== ================= PARTNERS' CAPITAL, December 31, 1997 942,619.12 $ 105,628,837 $ 2,564,153 $ (6,966,305) $ 101,226,685 Subscriptions 130,030.49 13,003,049 - - 13,003,049 Subscriptions receivable 69,663.26 - - 6,966,305 6,966,305 Distributions - (661,354) (22,156) - (683,510) Net Income - (2,351,043) (34,695) - (2,385,738) Redemptions (183,846.01) (17,711,435) (1,807,847) - (19,519,282) --------- --------------------- --------------- --------------------- ----------------- PARTNERS' CAPITAL, June 30, 1998 958,466.86 $ 97,908,054 $ 699,455 $ - $ 98,607,509 =========== ===================== =============== ==================== =================
See notes to consolidated financial statements. 4 ML PRINCIPAL PROTECTION L.P. ---------------------------- (formerly ML Principal Protection Plus L.P.) (a Delaware limited partnership) -------------------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 consolidated financial position of ML Principal Protection L.P. (the "Partnership" or the "Fund") as of June 30, 1998 and the results of its operations for the six months ended June 30, 1998 and 1997. However, the operating results for the interim periods may not be indicative of the results expected for the 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 filed with the Securities and Exchange Commission for the year ended December 31, 1997 (the "Annual Report"). 5 2. NET ASSET VALUE PER UNIT For financial reporting purposes, the Partnership deducted the total organizational and initial offering costs payable to the General Partner at inception for purposes of determining Net Asset Value. Such deduction was allocated pro-rata among the outstanding Units of each series based upon the aggregate Net Asset Value of each series, and then equally among all Units of the same series. For all other purposes (including computing Net Asset Value for redemptions) the Partnership deducts the organizational and initial offering cost reimbursements only as actually paid. The organizational and initial offering cost reimbursement was completed in October 1997. At June 30, 1998 the Net Asset Values of the different series of Units for financial reporting purposes and for all other purposes were:
June 30, 1998 Net Asset Number Net Asset Value Value of Units per Unit ------------------ ------------------- --------------------- Series A Units $ 14,277,388 127,836.00 $111.69 Series B Units 1,761,344 16,410.00 107.33 Series C Units 2,853,074 27,693.00 103.03 Series D Units 7,325,850 67,842.00 107.98 Series E Units 6,538,511 60,849.04 107.45 Series F Units 4,454,022 43,427.04 102.56 Series G Units 4,245,950 41,921.95 101.28 Series H Units 2,754,573 26,290.73 104.77 Series K Units 7,562,572 74,145.00 102.00 Series L Units 13,541,682 136,301.00 99.35 Series M Units 13,789,850 136,757.56 100.83 Series N Units 6,774,942 69,663.05 97.25 Series O Units 8,109,443 83,046.49 97.65 Series P Units 4,618,308 46,284.00 99.78 ------------------ ------------------- Totals $ 98,607,509 958,466.86 ================== ===================
6
December 31, 1997 Number Net Asset Net Asset Value of Units Value per Unit ----------------------- -------------------- ------------------- Series A Units $ 17,716,313 155,778.00 $113.73 Series B Units 2,865,130 25,100.00 114.15 Series C Units 4,061,256 37,551.00 108.15 Series D Units 10,499,613 95,504.00 109.94 Series E Units 7,685,677 70,255.86 109.40 Series F Units 6,136,370 56,275.48 109.04 Series G Units 5,470,415 51,354.50 106.52 Series H Units 5,610,794 52,626.22 106.62 Series K Units 12,127,411 115,752.00 104.77 Series L Units 14,732,144 144,314.00 102.08 Series M Units 14,321,562 138,108.06 103.70 --------------------- -------------------- Totals $ 101,226,685 942,619.12 ===================== ====================
7 3. ANNUAL DISTRIBUTIONS The Partnership makes annual fixed-rate distributions, payable irrespective of profitability, of between $2 and $5 per Unit on Units issued prior to July 16, 1996. The Partnership may also pay discretionary distributions on such Series of Units of up to 50% of any Distributable New Appreciation, as defined on such Units. No distributions are payable on Units issued after July 16, 1996. As of June 30, 1998, the Partnership has made the following distributions:
Series Distribution Fixed-Rate Discretionary Date Distribution Distribution ---------- ------------------------------------------------------------------- 1998 - --------- Series B 1/1/98 $ 3.50 $ 1.50 Series C 4/1/98 3.50 - Series F 1/1/98 3.50 1.25 Series G 4/1/98 3.50 - 1997 - --------- Series A 10/1/97 $ 3.50 $ - Series B 1/1/97 3.50 3.00 Series C 4/1/97 3.50 4.00 Series D 7/1/97 3.50 1.00 Series E 10/1/97 3.50 2.00 Series F 1/1/97 3.50 2.50 Series G 4/1/97 3.50 3.50 Series H 7/1/97 3.50 2.50 1996 - --------- Series A 10/1/96 $ 3.50 $ 2.50 Series B 1/1/96 3.50 2.50 Series C 4/1/96 3.50 - Series D 7/1/96 3.50 - Series E 10/1/96 3.50 - 1995 - --------- Series A 10/1/95 $ 3.50 $ 2.50
8 4. FAIR VALUE AND OFF-BALANCE SHEET RISK The Partnership's revenues by reporting category for the respective periods were as follows:
For the three For the three For the six For the six months ended months ended months ended months ended June 30, 1998 June 30, 1997 June 30, 1998 June 30, 1997 ------------------ ----------------- ----------------- ---------------- Interest rates $ (1,060,376) $ (547,293) $ (540,665) $ (1,052,121) Stock indices 65,036 178,643 277,773 536,590 Commodities 145,100 225,815 353,250 1,750,969 Currencies 358,665 (677,333) 780,770 1,402,897 Energy (121,978) (452,246) (1,285,040) (932,627) Metals (833,916) 197,208 (927,970) 613,072 ------------------ ----------------- ----------------- ---------------- $ (1,447,469) $ (1,075,206) $ (1,341,882) $ 2,318,780 ================== ================= ================= ================
The contract/notional values of the Trading Partnership's open derivative instrument positions as of June 30, 1998 and December 31, 1997 were as follows:
1998 1997 --------------------------------------------- ---------------------------------------------- Commitment to Commitment to Commitment to Commitment to Purchase (Futures, Sell (Futures, Purchase (Futures, Sell ( Futures, Options & Forwards) Options & Fowards) Options & Forwards) Options & Forwards) --------------------- --------------------- --------------------- --------------------- Interest rates $ 249,550,041 $ 135,894,320 $ 121,435,283 $ 85,620,621 Stock indices 5,325,146 4,915,629 1,665,588 8,854,122 Commodities 10,598,741 11,363,887 11,663,786 21,791,599 Currencies 113,906,739 165,639,599 70,272,888 147,312,282 Energy 1,282,952 3,362,859 1,085,885 9,041,759 Metals 5,397,438 11,361,430 4,412,002 19,039,071 --------------------- --------------------- --------------------- --------------------- $ 386,061,057 $ 332,537,724 $ 210,535,432 $ 291,659,454 ===================== ===================== ===================== =====================
9 The contract/notional values of the Trading Partnership's exchange-traded and non-exchange-traded open derivative instrument positions as of June 30, 1998 and December 31, 1997 were as follows:
1998 1997 ---------------------------------------------- ----------------------------------------- Commitment to Commitment to Commitment to Commitment to Purchase (Futures, Sell (Futures, Purchase (Futures, Sell (Futures, Options & Forwards) Options & Forwards) Options & Forwards) Options & Forwards) ------------------ --------------------- -------------------- ------------------- Exchange traded $ 287,585,593 $ 195,946,736 $ 142,565,779 $ 183,223,917 Non-Exchange traded 98,475,464 136,590,988 67,969,653 108,435,537 ----------------- ---------------------- ------------------ ----------------- $ 386,061,057 $ 332,537,724 $ 210,535,432 $ 291,659,454 ================= ====================== ================== =================
The average fair value, based on contract/notional value, of the Trading Partnership's derivative instrument positions which were open as of the end of each calendar month during the six months ended June 30, 1998 and the year ended December 31, 1997 were as follows:
1998 1997 ------------------------------------------------- --------------------------------------------- Commitment to Commitment to Commitment to Commitment to Purchase (Futures, Sell (Futures, Purchase (Futures, Sell (Futures, Options & Forwards) Options & Forwards) Options & Forwards) Options & Forwards) -------------------- ----------------------- -------------------- ------------------- Interest rates $ 291,479,051 $ 124,704,213 $ 177,189,103 $ 68,697,138 Stock indices 10,507,803 4,125,361 7,544,449 4,040,832 Commodities 11,577,867 18,872,855 13,113,725 11,481,639 Currencies 112,869,157 157,912,629 70,061,899 113,287,725 Energy 2,556,977 5,827,561 3,621,533 3,415,726 Metals 9,957,794 14,795,340 7,369,251 14,913,348 ------------------- ----------------------- -------------------- ------------------- $ 438,948,649 $ 326,237,959 $ 278,899,960 $ 215,836,408 =================== ======================= ==================== ===================
The gross unrealized profit and the net unrealized profit (loss) on the Trading Partnership's open derivative instrument positions as of June 30, 1998 and December 31, 1997 were as follows:
1998 1997 --------------------------------- --------------------------------- Gross Net Gross Net Unrealized Unrealized Unrealized Unrealized Profit Profit (Loss) Profit Profit (Loss) -------------- ---------------- --------------- --------------- Exchange traded $ 1,773,958 $ 123,092 $ 3,263,519 $ 2,416,539 Non-Exchange traded 2,066,767 (70,578) 2,119,281 541,545 -------------- ---------------- --------------- --------------- $ 3,840,725 $ 52,514 $ 5,382,800 $ 2,958,084 ============== ================ =============== ===============
4. SUBSEQUENT EVENTS On July 1, 1998 distributions were announced with respect to Series D Units and Series H Units. Series D Units received an annual fixed rate distribution equal to $3.50 per Unit. Series H Units received an annual fixed rate distribution equal to $3.50 per Unit. 10 Item 2: Management's Discussion and Analysis of Financial Condition and Results ----------------------------------------------------------------------- of Operations - ------------- Performance Summary January 1, 1997 to June 30, 1997 January 1, 1997 to March 31, 1997 In currency markets, the U.S. dollar rallied and started 1997 on a strong note, rising to a four-year high versus the Japanese yen and two-and-a-half year highs versus the Deutsche mark and the Swiss franc. Profitable results were seen throughout the quarter in currency trading. Global interest rate markets began the year on a volatile note, as investors evaluated economic data for signs of inflation. January and March were profitable months for interest rate trading. In energy markets, a slump in crude oil prices was characteristic of its lackluster performance from the beginning of the year. Early in 1997, volatility returned in the energy markets, reflecting the impact of a winter significantly warmer than normal. January and March saw losses in energy trading; February, however, was profitable. Agricultural commodity trading proved profitable in February and March. Soybean prices reached their highest level in over eight years, on continued demand and fears that inventories could fall to critically low levels before the next harvest. April 1, 1997 to June 30, 1997 In the currency markets, the dollar underwent a significant correction in the Spring against the Japanese yen due to the G7 finance ministers' determination that a further dollar advance would be counter-productive to their current goals. Currency trading was unprofitable for the quarter. Global interest rate trading provided unprofitable results for the quarter. Profits were seen in May and June; losses however were apparent in April. During April, U.S. bond prices moved in a directionless pattern, as investors remained concerned over inflation and its impact on further increases in interest rates by the U.S. Federal Reserve. Energy trading was unprofitable throughout the quarter. In June crude oil trended downward during the beginning of the month, before a sudden price reversal occurred amid speculation that Iraq exports could be delayed until August. Price movement of heating oil and unleaded gas proved to be trendless. Agricultural commodity trading proved profitable for the quarter. May's profits were due to coffee prices surging beyond three dollars a pound for the first time in twenty years, on the possibility of frost in Brazil and reports of poor crops in smaller countries. January 1, 1998 to June 30, 1998 January 1, 1998 to March 31, 1998 The Fund's most profitable positions during the quarter were in the global interest rate markets, particularly in European bonds where an extended bond market rally continued despite an environment of robust growth in the United States, Canada and the United Kingdom, as well as a strong pick-up in growth in continental Europe. Specifically, strong gains were recorded in French and German bonds. Gold and crude oil trading resulted in losses. Gold prices drifted sideways and lower as Asian demand continued to slow and demand in the Middle East was affected by low oil prices. Initially buoyed on concerns about a U.S.- led military strike against Iraq, crude oil fell to a nine year low, as the globally warm winter, the return of Iraq as a producer and the Asian economic crisis added to OPEC's supply glut problems. Trading results in stock index markets were mixed, but marginally profitable, despite a strong first-quarter performance by the U.S. equity market as several consecutive weekly gains were recorded with most market averages setting new highs. Results in currency trading were also mixed, but marginally profitable. Strong gains were realized in positions on the Swiss franc, which weakened versus the U.S. dollar, while trading losses resulted from positions in the Deutsche mark and the Australian dollar. 11 Agricultural commodity markets provided profits. Live cattle and hog prices trended downward throughout the quarter resulting in strong gains. Cotton prices moved mostly upward during the quarter, but dropped off sharply at the end of March, causing losses. April 1, 1998 to June 30, 1998 As swings in the U.S. dollar and developments in Japan affected bond markets, the Fund's interest rate trading during the quarter resulted in losses, particularly in Eurodollar deposits and U.S. Treasury bonds. Early in the quarter, Treasury trading was range-bound, as concern that the economy might be overheating was balanced by the potential impact of the Asian recession. Additionally, Australian bonds and bills saw a dramatic drop in prices in early June, as dollar-bloc currencies remained under pressure versus the U.S. dollar due to the Japanese/Asian crisis. Metals and energy trading also resulted in losses. The depressed gold market weakened further following news of a European Central Bank consensus that ten to fifteen percent of reserves should be made up of gold bullion which was at the low end of expectations. Despite production cuts initiated by OPEC at the end of March, world oil supplies remained excessive and oil prices stood at relatively low levels throughout the quarter. Results in currency trading were profitable. Strong gains were realized in positions on the Japanese yen, which weakened during June to an eight-year low versus the U.S. dollar. Trading results in stock index markets were also profitable as the Asia-Pacific region's equity markets weakened across the board. In particular, Hong Kong's Hang Seng index trended downward during most of the quarter and traded at a three-year low. Agricultural commodity trading produced profits. Although the U.S. soybean crop got off to a good start which contributed to higher yield expectations and a more burdensome supply outlook, soybean prices traded in a volatile pattern for the second half of the quarter. Sugar futures maintained mostly a downtrend, as no major buyers emerged to support the market. Similarly, coffee prices trended downward, as good weather conditions in Central America and Mexico increased the prospects of more output from these countries.
MONTH-END NET ASSET VALUE PER SERIES A UNIT Jan. Feb. Mar. Apr. May Jun. - -------------------------------------------------------------------------------------------------------- 1997 $113.00 (a) $114.63 (a) $114.69 (a) $113.89 (a) $112.28 (a) $113.05 (a) - -------------------------------------------------------------------------------------------------------- 1998 $113.84 (b) $113.25 (b) $113.37(b) $111.46 (b) $112.48 (b) $111.69(b) - --------------------------------------------------------------------------------------------------------
(a) After reduction for $6.00 per Series A Unit distribution declared on October 1, 1995 and $6.00 per Series A Unit distribution declared on October 1, 1996. (b) After reduction for a $3.50 per Series A distribution declared on October 1, 1997 and the distributions described in (a), resulting in a total distribution of $15.50 inception to date. As of July 1, 1996, the Fund changed its name to ML Principal Protection L.P. Such change was due to the General Partner restructuring the continuous offerings to be sold without a guaranteed annual fixed-rate distribution or a discretionary distribution as previously offered under ML Principal Protection Plus L.P. Item 3. Quantitative and Qualitative Disclosures About Market Risk Not Applicable 12 PART II - OTHER INFORMATION Item 1. Legal Proceedings There are no pending legal proceedings to which the Partnership or the General Partner is a party. Item 2. Changes in Securities and Use of Proceeds (a) None. (b) None. (c) None. (d) The Fund has 2,250,000 Units of limited partnership interest registered, with an aggregate price of $225,000,000. The Fund has sold 1,598,940.26 Units of limited partnership interest, with an aggregate price of $159,894,026. 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 11, 1998, Jo Ann Di Dario became a Vice President, Treasurer and Chief Financial Officer of Merrill Lynch Investment Partners Inc. (AMLIP@). Ms. Di Dario was born in 1946. Before joining MLIP, she was self-employed for one year. From February 1996 to May 1997, she worked as a consultant for Global Asset Management, an international mutual fund organizer and operator headquartered in London, where she offered advice on restructuring the back office operations. From May 1992 to January 1996, Ms. Di Dario served as Vice President of Meridian Bank Corporation, a regional bank holding company. She was responsible for managing the treasury operations of the bank holding company and its wholly-owned subsidiary, Meridian Investment Company Inc. Ms. Di Dario managed the domestic treasury operation of First Fidelity Bank, a regional bank, from September 1991 to May 1992. From 1985 until December 1990, Ms. Di Dario was Vice President, Secretary and Controller of Caxton Corporation, a commodity pool operator and commodity trading advisor. Her background includes seven years of public accounting experience. She graduated with high honors from Stockton State College with a Bachelor of Science Degree in Accounting. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits There are no exhibits required to be filed with this report. (b) Reports on Form 8-K ------------------- There were no reports on Form 8-K filed during the first six months of fiscal 1998. 13 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. ML PRINCIPAL PROTECTION L.P. ---------------------------- (formerly ML Principal Protection Plus L.P.) By: MERRILL LYNCH INVESTMENT PARTNERS INC. (General Partner) Date: August 11, 1998 By /s/ JOHN R. FRAWLEY, JR. ------------------------- John R. Frawley, Jr. Chairman, Chief Executive Officer, President and Director Date: August 11, 1998 By /s/ JO ANN DI DARIO ------------------- Jo Ann Di Dario Vice President, Chief Financial Officer and Treasurer 14 EX-27 2 FINANCIAL DATA SCHEDULE
BD 6-MOS 6-MOS DEC-31-1998 DEC-31-1997 JAN-01-1998 JAN-01-1997 JUN-30-1998 JUN-30-1997 1,242 1,423 26,241,575 9,124,594 0 0 0 0 77,010,800 94,651,930 0 0 103,253,617 103,777,947 0 0 4,646,108 2,551,262 0 0 0 0 0 0 0 0 0 0 0 0 0 0 98,607,509 101,226,685 103,253,617 103,777,947 (1,341,882) 2,318,780 2,970,056 2,182,912 4,013,912 2,713,111 0 0 0 0 0 0 0 0 (2,385,738) 1,788,581 (2,385,738) 1,788,581 0 0 0 0 (2,385,738) 1,788,581 (2.35) 2.47 (2.35) 2.47
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