10-Q 1 c71747e10vq.txt FORM 10-Q FOR QUARTER ENDING JUNE 30, 2002 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JULY 31, 2002 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 0-9202 THE FUTURE FUND (Exact name of registrant as specified in its charter) State of jurisdiction or incorporation (Illinois) IRS EMPLOYER ID NO. #36-3033727 C/O HEINOLD ASSET MANAGEMENT INC. ONE FINANCIAL PLACE 440 S. LASALLE ST-21 FLOOR CHICAGO ILLINOIS 60605 PHONE NUMBER 663-7500 SAME (Former name, former address and former fiscal year, if changed) 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 shortened 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 PART I. FINANCIAL INFORMATION ITEM I. FINANCIAL STATEMENTS THE FUTURE FUND (An Illinois Limited Partnership) STATEMENTS OF FINANCIAL CONDITION

0407/3031/02 10/31/01 (UNAUDITED) (AUDITED) ASSETS Investments in affiliated general partnerships $ 46,~~621~~013,~~408~~754 $ 5,463,508 Due from affiliated broker 3,~~585~~244,~~913~~980 4,843,869 Other assets -10,061 24,567 ----------- ----------- Total assets $ 89,~~207~~268,~~321~~795 $10,331,944 LIABILITIES & PARTNERS' CAPITAL Brokerage commissions ~~$ 47~~54,~~832~~040 60,262 Redemptions payable 60277,~~168~~590 39,439 Management fees 2730,~~079~~559 34,105 Incentive fees 027,677 91,719 Other 74,~~534~~737 1,397 ----------- ----------- Total liabilities ~~142~~394,~~613~~603 226,922 Partners' capital: General Partner (220 unit equivalents outstanding ~~218~~250,~~359~~358 263,964 at ~~April~~July 3031,2002 and October 31, 2001) Limited Partners (7,~~905~~578 and 8,202 units outstanding at ~~April~~July 3031, 2002 and October 31, 2001, respectively) 78,~~846~~623,~~349~~834 9,841,058 ----------- ----------- TOTAL PARTNERS' CAPITAL 8,~~064~~874,~~708~~192 10,105,022 ----------- ----------- $ 89,~~207~~268,~~321~~795 $10,331,944 =========== =========== NET ASSET VALUE PER UNIT OUTSTANDING $ ~~992~~1,137.5499 $ 1,199.83

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. -2- THE FUTURE FUND (An Illinois Limited Partnership) STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED JULY 31, 2002 and 2001 (UNAUDITED)

REVENUES: 2002 2001 NET REALIZED TRADING GAINS (LOSSES) ON CLOSED FUTURES AND FORWARD CONTRACTS $~~(384~~1,~~374)~~180,877 $ ~~742~~(75,~~953~~756) CHANGE IN NET UNREALIZED APPRECIATION OR DEPRECIATION ON OPEN FUTURES AND FORWARD CONTRACTS ~~144~~244,~~388~~177 ~~(318~~229,~~857)~~977 INTEREST INCOME 2124,~~829~~457 9569,~~076~~854 ---------- ---------- ~~(218~~1,~~157)~~449,511 ~~519~~224,~~173~~075 EXPENSES: BROKERAGE COMMISSIONS ~~145~~154,~~958~~786 ~~173~~168,~~339~~039 MANAGEMENT FEE 8287,~~350~~436 9794,~~502~~733 PROFIT SHARE ~~0 63~~27,~~376~~677 0 OTHER ADMINISTRATIVE EXPENSES 64,200 46,~~700~~300 ---------- ---------- NET INCOME (LOSS) $~~(452~~1,~~665)~~175,412 $ ~~180~~(44,~~255~~997) NET INCOME (LOSS) TO GENERAL PARTNER $ ~~(12~~31,~~058)~~999 $ 4(1,~~378~~151) NET INCOME (LOSS) TO LIMITED PARTNER $~~(440~~1,~~607)~~143,413 $ ~~175~~(43,~~877~~848) CHANGE IN NET ASSET VALUE PER UNIT FOR THE PERIOD $ ~~(54~~145.~~81)~~45 $ 19(5.9023)

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. -3- THE FUTURE FUND (An Illinois Limited Partnership) STATEMENTS OF OPERATIONS FOR THE NINE MONTHS ENDED JULY 31, 2002 and 2001 (UNAUDITED)

REVENUES: 2002 2001 NET REALIZED TRADING GAINS (LOSSES) ON CLOSED FUTURES AND FORWARD CONTRACTS $ ~~(760~~420,~~855)~~023 $ 21,~~006~~930,~~668~~912 CHANGE IN NET UNREALIZED APPRECIATION OR DEPRECIATION ON OPEN FUTURES AND FORWARD CONTRACTS (~~621~~377,~~992~~815) ~~(90~~139,~~313)~~664 INTEREST INCOME 5276,~~525~~980 ~~208~~278,~~647~~498 ----------- ----------- (1119,~~330,322)~~188 2,~~125~~349,~~003~~074 EXPENSES: BROKERAGE COMMISSIONS ~~304~~459,~~682~~468 ~~343~~511,~~047~~087 MANAGEMENT FEE ~~171~~258,~~303~~739 ~~192~~287,~~864~~597 PROFIT SHARE (9164,~~719~~042) 63,376 OTHER ADMINISTRATIVE EXPENSES 1822,~~294~~494 814,~~400~~700 ----------- ----------- ~~402~~676,~~560~~659 ~~607~~876,~~687~~760 NET INCOME (LOSS) $ (1557,~~732,883~~471) $ 1,~~517~~472,~~316~~314 NET INCOME (LOSS) TO GENERAL PARTNER $ (33543,~~547~~865) $ 3635,~~348~~198 NET INCOME (LOSS) TO LIMITED PARTNER $ (113,~~699,336~~606) $ 1,~~480~~437,~~968~~116 CHANGE IN NET ASSET VALUE PER UNIT FOR THE PERIOD $ (~~207~~61.2984) $ ~~165~~159.2299

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. -3A- THE FUTURE FUND (An Illinois Limited Partnership) STATEMENTS OF CHANGES IN PARTNERS' CAPITAL FOR THE NINE MONTHS ENDED JULY 31, 2002 (UNAUDITED)

LIMITED GENERAL PARTNERS PARTNER TOTAL ------------ ------------ ------------~~------------~~ PARTNERS' CAPITAL AT OCTOBER 31, 2001 $ 9,841,058 $ 263,964 $ 10,105,022 (8,202 LIMITED PARTNERSHIP UNITS) REDEMPTION OF ~~297~~624 LIMITED PARTNERSHIP UNITS (~~307~~673,~~434~~359) 0 (~~307~~673,~~434~~359) NET INCOME (1543,~~687,275~~865) (4513,~~605~~606) (1557,~~732,880~~471) ------------------------------------------------ PARTNERS' CAPITAL AT ~~APRIL~~JULY 3031,2002 $ 78,~~846~~623,~~349~~834 $ ~~218~~250,~~359~~358 $ 8,~~064~~874,~~708~~192 (7,~~905~~578 LIMITED PARTNERSHIP UNITS) ================================================

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. -4- THE FUTURE FUND (An Illinois Limited Partnership) STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED JULY 31, 2002 AND 2001 (UNAUDITED)

~~April~~2002 302,001 ~~2002~~CASH ~~31-Oct-2001~~FLOWS ~~Ending~~FROM ~~Partners'~~OPERATING ~~Capital~~ACTIVITIES NET INCOME (~~Note~~LOSS) A(557,471) 81,~~064~~472,~~708~~314 10ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES: DUE FROM AFFILIATED BROKER AND GENERAL PARTNERSHIPS 1,~~105~~063,~~022~~149 (550,129) INCREASE (DECREASE) IN BROKERAGE COMMISSION PAYABLES (6,222) 3,291 INCREASE (DECREASE) IN REDEMPTION PAYABLES 238,151 (95,815) INCREASE (DECREASE) IN MANAGEMENT FEE PAYABLES (3,546) 2,042 DECREASE IN INCENTIVE FEE PAYABLE (64,042) 0 INCREASE (DECREASE) IN ACCRUED EXPENSES 3,340 (13,935) -------------------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 673,359 817,768 CASH FLOWS FROM FINANCING ACTIVITIES REDEMPTION OF LIMITED PARTNERSHIP UNITS (673,359) (817,768) -------------------------- NET CASH USED IN FINANCING ACTIVITIES (673,359) (817,768) CHANGE IN CASH BALANCE (0) 0

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS -5- THE FUTURE FUND (AN ILLINOIS LIMITED PARTNERSHIP) NOTES TO FORM 10-Q FINANCIAL STATEMENTS The unaudited interim condensed consolidated financial statements of the Future Fund ("the Fund) included herein have been prepared in conformity with accounting principles generally accepted in the United States for interim financial information and rule 10-01 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the unaudited interim condensed financial statements reflect all adjustments, which are of a normal recurring nature, necessary for fair presentation of financial position, results of operations and cash flows of the Funds for the interim periods presented and are not necessarily indicative of a full year's results. In preparing the unaudited interim condensed financials statements, management is required to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. These financial statements should be read in conjunction with the Fund audited financial statements included in the Fund audited financial statements for the year ended October 31,2001., from which the accompanying Statement of Financial Condition was derived. 6 The Future Fund (An Illinois Limited Partnership) Notes to Form 10-Q Financial Statements, Continued Item 2, Management's discussion and analysis of financial condition, and operating results for the nine months ended July 31, 2002

~~Six~~July ~~months~~31, ~~Six months ended 4/30/~~2002 ~~ended~~31-Oct-2001 ~~4/30/2002~~Ending ~~Net~~Partners' ~~Realized~~Capital ~~and Unrealized Trading Gains~~ (~~Losses)~~Note ~~on Futures and Forward Contracts (1,382,847~~A) 1$8,~~916~~874,~~355~~192 ~~Interest income 52~~$10,~~525 208~~105,~~647~~022

NOTE A: Ending capital at July 31,2002 is lower than ending capital at October 31, 2002 due to unprofitable trading and redemptions during the period. For the nine month period ending July 31,2002, the Partnership's Net Asset Value per Unit decreased from $1,199.83 at October 31, 2001 to $1,137.99 at July 31, 2002. The majority of the losses occurred from trading activities in November where the NAV decreased by 8.49%. These losses were offset by profitable trading activities for the quarter end July 31, 2002 were the NAV increased by 14.65% NOTE B:

~~Three~~Nine months ~~Three~~Nine months ended 47/3031/2002 ended 47/3031/~~2002~~2001 Net Realized and Unrealized Trading Gains (Losses) on Futures and Forward Contracts ~~(239~~42,~~986)~~208 ~~424~~2,~~096~~070,576 Interest income 76,980 278,498

Net realized and unrealized trading gains (losses) on Futures and Forward Contracts for the nine months ended 7/30/2002 is less than net realized and unrealized trading gains (losses) on futures and forward contracts for the nine months ended 7/30/2001 due to less profitable trading during the period. Interest income is earned on the Partnership's investment in U.S. Treasury bills and varies monthly according to interest rates, as well as the effect of trading performance and redemptions on the level of interest-bearing funds. Interest income from U.S. Treasury bills decreased by $201,518 for the nine months ended July 31,2002 as compared to corresponding period in 2001. Additionally, interest income decreased from lower overall investment in U.S. Treasury bills due to the effect of redemptions and unfavorable trading performance during the nine months ended July 31, 2002. NOTE C:

Net realized and unrealized trading gains (Losses) on Futures and Forward Contracts for the three months ended 7/31/2002 is greater than net realized and unrealized trading gains (losses) on futures and forward contracts for the three months ended 7/31/2001 due to more profitable trading during the period. 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 on the 11th day of September, 2002. THE FUTURE FUND By HEINOLD ASSET MANAGEMENT, INC. General Partner By /s/ Thomas M. Harte --------------------------- Thomas M. Harte President and Chief Executive Officer By /s/ Ira Polk --------------------------- Ira Polk Chief Financial Officer CERTIFICATION PURSUANT TO 18 U.S.C.SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of The Future Fund (the "Company") on Form 10-Q for the period ending June 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Thomas M. Harte, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that: 1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/ Thomas M. Harte Thomas M. Harte Chief Executive Officer September 11, 2002 CERTIFICATION PURSUANT TO 18 U.S.C.SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of The Future Fund (the "Company") on Form 10-Q for the period ending June 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Ira Polk, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that: 3) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 4) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/ Ira Polk Ira Polk Chief Financial Officer September 11, 2002

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