10-Q 1 c77722e10vq.txt QUARTERLY REPORT 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 APRIL 30, 2003 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-20 FLOOR CHICAGO ILLINOIS 60605 PHONE NUMBER (312) 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 1 PART I. FINANCIAL INFORMATION ITEM I. FINANCIAL STATEMENTS THE FUTURE FUND (An Illinois Limited Partnership) STATEMENTS OF FINANCIAL CONDITION

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 APRIL 30, 2003 and 2002 (UNAUDITED)

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS 3 THE FUTURE FUND (An Illinois Limited Partnership) STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED APRIL 30, 2003 and 2002 (UNAUDITED)

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS 4 THE FUTURE FUND (An Illinois Limited Partnership) STATEMENTS OF CHANGES IN PARTNERS' EQUITY FOR THE SIX MONTHS ENDED APRIL 30, 2003 (UNAUDITED)

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS 5 THE FUTURE FUND (An Illinois Limited Partnership) STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED APRIL 30, 2003 and 2002 (UNAUDITED)

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS 6 THE FUTURE FUND (An Illinois Limited Partnership) NOTES TO FORM 10-Q FINANCIAL STATEMENTS The unaudited interim financial statements of the Future Fund (the "Partnership") 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 financial statements reflect all adjustments, which are of a normal recurring nature, necessary for fair presentation of financial position, results of operations, changes in partners' equity and cash flows of the Partnership for the interim periods presented and are not necessarily indicative of a full year's results. In preparing the unaudited interim financial 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. Certain prior year amounts have been reclassified to conform to current year presentation. The financial statements should be read in conjunction with the Partnership's audited financial statements for the year ended October 31, 2002. Recent Accounting Pronouncement In January 2003, the Financial Accounting Standards Board ("FASB") issued FASB Interpretation No. 46, Consolidation of Variable Interest Entities ("FIN 46"). FIN 46 addresses consolidation by business enterprises of variable interest entities. As General Partner of the Partnership, Heinold Asset Management, Inc. has not yet determined if the Partnership would be required to consolidate certain affiliated General Partnerships when FIN 46 becomes effective on August 1, 2003. Each of these related party entities are described in further detail in Note 4 of the Partnership's audited financial statements for the year ended October 31, 2002. FIN 46 would be immediately effective for any similar affiliated General Partnership in which the Partnership has a new investment subsequent to February 1, 2003. The General Partner estimates that the Partnership's maximum exposure to loss as a result of its involvement with these affiliated General Partnerships is limited to their carrying value as recorded in the Statement of Financial Condition. 7 THE FUTURE FUND (An Illinois Limited Partnership) NOTES TO FORM 10-Q FINANCIAL STATEMENTS (CONTINUED) Management's discussion and analysis of financial condition and operating results for the three and six months ended April 30, 2003 and April 30, 2002.

Partners' equity at April 30, 2003 was lower as compared with Partners' equity at October 31, 2002 due to unit redemptions exceeding trading gains for the period (see Note B). Net income for the period of 2.3% and total redemptions of 3.5% caused a decrease in total partner's equity of 1.2% over the period. For the six month period ending April 30, 2003, the Partnership's Net Asset Value per Unit increased from $1,139.17 at October 31, 2002 to $1,168.44, representing a 2.6% gain. The difference between the net income percentage and the percentage gain in Net Asset Value per Unit is due to the timing of capital transactions.

Net Realized and Unrealized Trading Gains for the six months ended April 30, 2003 came from first quarter trading gains of $760,007 which exceeded second quarter losses of $57,824, causing a net trading gain for the period. During the first quarter, gains were seen in both agricultural products and metals, most notably long gold positions as the demand for gold increased due to renewed interest as a safe investment in uncertain times. Long positions on crude oil were also profitable, as the price for oil rose due to tensions in the Middle East. As the weakening US dollar continued to decline in light of the then anticipated conflict with Iraq and potential problems with North Korea, short US dollar positions against other major currencies such as the Euro and the Swiss Franc created significant profits. During the second quarter, the Partnership netted a slight loss. Please see Note C for a more detailed discussion of the gains and losses during the period. The current results of operations proved to be the opposite of the same period last year, when substantial losses were posted in an entirely different environment. The loss for the six months ended April 30, 2002 was due to unprofitable trading for the period, most notably the three months ended January 31, 2002 when the partnership posted a trading loss of $1,142,861. Coupled with loss of $239,986 for the three months ended April 30, 2002, the partnership netted a loss of $1,382,847 six-month period. 8

Net Realized and Unrealized Trading Losses for the three months ended April 30, 2003 came from unprofitable trading during the period. Volatility due to international tensions and economic worries kept the markets from getting a general sense of direction. As a result, the Partnership showed both gains and losses in various commodities, finishing the period with a slight loss. Gains on long crude oil positions due to oil prices reaching highs in February were turned to losses in March, as prices dropped considerably. Trading in currencies also showed both gains and losses as prolonged anxiety about the war was reflected in narrow price changes in most major currencies. US Treasury positions posted losses, then gains, while long Euro Bond positions posted negative returns after sharp price falls. The current loss was not as significant as the results for the three months ended April 30, 2002 when the partnership lost $239,986 due to unprofitable trading. 9 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 on the 12th day of June, 2003. 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 10 CERTIFICATION I, Thomas M. Harte, certify that: 1. I have reviewed this quarterly report on Form 10-Q of The Future Fund; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in the Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: June 12, 2003 /s/ Thomas M. Harte ------------------- Thomas M. Harte Chief Executive Officer 11 CERTIFICATION I, Ira Polk, certify that: 1. I have reviewed this quarterly report on Form 10-Q of The Future Fund; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in the Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: June 12, 2003 /s/ Ira Polk -------------- Ira Polk Chief Financial Officer 12

FUTURE FUND 10-Q