Salina Partnership LP - Page 19




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          26, 1993 partnership meeting, the partners decided to direct BEA to         
          decrease the leverage in Salina’s portfolio in order to reduce the          
          partnership’s level of risk.                                                
               During 1993, Salina earned a gross return of approximately 10          
          percent under the MAPS strategy. After paying BEA’s fee,                    
          Caraville’s management fee, and other partnership fees, Salina’s            
          net return was approximately 8 percent.                                     
               During 1994, the MAPS strategy was hindered by rising interest         
          rates.  During 1994, Salina had no earnings under the MAPS                  
          strategy.                                                                   
               F.  Salina’s Termination and Liquidation                               
               On November 22, 1994, FPL requested that Caraville liquidate           
          Salina.  Accordingly, on November 30, 1994, Salina was liquidated,          
          and its assets were distributed to its partners.  FPL received a            
          total distribution of $79,888,748, consisting of $63,175,099 in             
          cash and $16,713,749 in mortgage-backed securities.  The record             
          does not reflect the specific amounts distributed to Caraville and          
          Pallico or the ultimate disposition of those distributions.                 
          IV.  Tax Reporting                                                          
               A.  Salina’s Partnership Returns                                       
               In July 1993, Salina filed a U.S. Partnership Income Tax               
          Return (Form 1065) for the short tax year December 17 to December           
          27, 1992, reporting investment income of $467,110, investment               
          expenses of $327,812, and unrealized trading profits of $314,526.           






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