UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-K

                  Annual Report Pursuant to Section 13 or 15(d)

                     of the Securities Exchange Act of 1934

                      For the year ended December 31, 2001

Commission File Number 0-22489
                       -------

                SMITH BARNEY PRINCIPAL PLUS FUTURES FUND L.P. II
 ------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

            New York                              13-3862967
 ------------------------------------------------------------------------
         (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)

------------------------------------------------------------------------
              (Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:  None
                                                             ----
Securities registered pursuant to Section 12(g) of the Act: Units
                                                            of Limited
                                                            Partnership
                                                            Interest
                                                            ----------------
                                                            (Title of Class)

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
                                   -----        ----

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
form 10-K [X]

As of February 28, 2002,  Limited  Partnership  Units with an aggregate value of
$13,995,103 were outstanding and held by non-affiliates.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None



<PAGE>





                                               PART I

Item 1. Business.
        ---------
     (a) General  development of business.  Smith Barney  Principal Plus Futures
Fund L.P. II (the "Partnership") is a limited partnership  organized on November
16, 1995 under the  partnership  laws of the State of New York. The  Partnership
engages in speculative  trading of commodity  interests,  including contracts on
foreign currencies,  commodity options and commodity futures contracts including
futures  contracts on United States  Treasury and other  financial  instruments,
foreign currencies and stock indices. The Partnership maintains a portion of its
assets  in  principal  amounts  stripped  from  U.S.  Treasury  Bonds  under the
Treasury's  STRIPS program ("Zero  Coupons") which payments will be due November
15, 2003. The  Partnership  uses the Zero Coupons and its other assets to margin
its commodities account.
     A total of 60,000 Units of Limited Partnership  Interest in the Partnership
(the  "Units")  were offered to the public.  Between April 3, 1996 and August 8,
1996,  19,897 Units were sold to the public at $1,000 per Unit.  Proceeds of the
offering along with the General Partners'  contribution of $203,000 were held in
escrow  until  August 9, 1996 at which time an  aggregate  of  $20,100,000  were
turned over to the Partnership and the Partnership commenced trading operations.
     Smith  Barney  Futures  Management  LLC acts as the  general  partner  (the
"General  Partner") of the Partnership.  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.



                                       2
<PAGE>




("SSBHI"), which is the sole owner of SSB. SSBHI is a wholly owned subsidiary of
Citigroup  Inc.  The  Partnership's  trading of  futures,  forwards  and options
contracts, if applicable, on commodities is done on United States of America and
foreign  commodity  exchanges.  It engages in such  trading  through a commodity
brokerage account maintained with SSB.
     Under the Limited  Partnership  Agreement of the Partnership  (the "Limited
Partnership  Agreement"),  the General  Partner  administers  the  business  and
affairs of the  Partnership.  As of December 31,  2001,  all  commodity  trading
decisions are made for the Partnership by Winton Capital  Management  ("Winton")
and   Willowbridge   Associates   Inc.   ("Willowbridge")   (collectively,   the
"Advisors").  Neither of the Advisors is affiliated  with the General Partner or
SSB. The Advisors are not responsible  for the  organization or operation of the
Partnership.
     Pursuant  to  the  terms  of the  Management  Agreements  (the  "Management
Agreements"),  the  Partnership  is  obligated  to pay  Willowbridge  a  monthly
management  fee  equal  to 1/6 of 1% (2%  per  year)  of  month-end  Net  Assets
allocated to it and pay Winton a monthly management fee equal to 1/8 of 1% (1.5%
per year) of the month-end Net Assets allocated to it. The Partnership will also
pay each Advisor an incentive fee payable  quarterly equal to 20% of New Trading
Profits  earned  by it  for  the  Partnership  (as  defined  in  the  Management
Agreements).
     The Customer Agreement provides that the Partnership will pay SSB a monthly
brokerage  fee equal to 7/12 of 1% of  month-end  Net  Assets  allocated  to the



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<PAGE>



Advisors  (7% per year) in lieu of brokerage  commissions  on a per trade basis.
SSB pays a portion of its brokerage fees to its financial  consultants  who have
sold Units and who are  registered  as  associated  persons  with the  Commodity
Futures  Trading  Commission  (the "CFTC").  The  Partnership  pays for National
Futures  Association  ("NFA") fees, exchange and clearing fees, give-up and user
fees and floor brokerage  fees.  Brokerage fees will be paid for the life of the
Partnership,  although the rate at which such fees are paid may be changed.  The
Customer  Agreement  between the  Partnership  and SSB gives the Partnership the
legal right to net unrealized gains and losses.
     In addition,  SSB pays the Partnership interest on 80% of the average daily
equity  maintained  in cash in its  account  during  each month at a 30-day U.S.
Treasury bill rate determined weekly by SSB based on the average non-competitive
yield on 3-month U.S.  Treasury bills maturing in 30 days from the date on which
such weekly rate is determined.
     In the  unlikely  event that the  Partnership  is required to meet a margin
call  in  excess  of the  cash  balance  in its  trading  accounts,  SSBHI  will
contribute up to an amount equal to the maturity  value of the Zero Coupons held
by the Partnership at the time of such call to the capital of the Partnership to
permit it to meet its  margin  obligations  in excess of its cash  balance.  The
guarantee can only be invoked once. After the guarantee is invoked, trading will
cease and the  General  Partner  will  either wait until the end of the month in
which the Zero Coupons come due (November 2003),  (the "First Payment Date"), or


                                         4
<PAGE>



will  distribute  cash and Zero  Coupons to the  limited  partners.  The General
Partner  will provide a copy of SSBHI's  annual  report as filed with the SEC to
any limited partner requesting it.
     (b)  Financial  information  about  industry  segments.  The  Partnership's
business  consists  of  only  one  segment,  speculative  trading  of  commodity
interests.  The Partnership  does not engage in sales of goods or services.  The
Partnership's  net income from operations for the years ended December 31, 2001,
2000 1999, 1998 and 1997 is set forth under "Item 6. Selected  Financial  Data."
Partnership capital as of December 31, 2001, was $15,415,522.
         (c)        Narrative description of business.
                    ---------------------------------
                    See Paragraphs (a) and (b) above.
                    (i) through (x) - Not applicable.
                    (xi) through (xii) - Not applicable.
                    (xiii) - The Partnership has no employees.
     (d) Financial  Information About Geographic Areas. The Partnership does not
engage in sales of goods or services or own any long lived assets, and therefore
this item is not applicable.
Item 2.  Properties.
         ----------
     The Partnership  does not own or lease any properties.  The General Partner
operates out of facilities provided by its affiliate, SSB.
Item 3.  Legal Proceedings.
         -----------------
     This section  describes  the major pending  legal  proceedings,  other than
ordinary routine litigation  incidental to the business,  to which Salomon Smith
Barney Holdings Inc.  ("SSBH") or its subsidiaries is a party or to which any of
their  property is  subject.  There are no material  legal  proceedings  pending



                                       5
<PAGE>



against the Partnership or the General Partner.
     Salomon  Smith  Barney  Inc.  ("SSB")  is a New York  corporation  with its
principal place of business at 388 Greenwich St., New York, New York 10013.  SSB
is registered as a broker-dealer and futures  commission  merchant ("FCM"),  and
provides futures  brokerage and clearing  services for  institutional and retail
participants  in the  futures  markets.  SSB and  its  affiliates  also  provide
investment banking and other financial services for clients worldwide.
     There have been no  administrative,  civil or criminal actions pending,  on
appeal or concluded  against SSB or any of its individual  principals within the
past five years that  management  believes  may have a material  impact on SSB's
ability to act as an FCM. In the ordinary course of its business, SSB is a party
to various claims and regulatory  inquiries.  Proceedings  deemed to be material
for  purposes  of  Commodity  Futures  Trading  Commission  ("CFTC")  disclosure
requirements are:
     In September 1992,  Harris Trust and Savings Bank (as trustee for Ameritech
Pension Trust ("APT"), Ameritech Corporation,  and an officer of Ameritech filed
suit  against  Salomon   Brothers  Inc.  ("SBI")  and  Salomon  Brothers  Realty
Corporation  ("SBRC") in the U.S.  District  Court for the Northern  District of
Illinois  (Harris Trust Savings Bank, not individually but solely as trustee for
the Ameritech  Pension  Trust,  Ameritech  Corporation  and John A. Edwardson v.
Salomon  Brothers Inc and Salomon  Brothers  Realty  Corp.).  The second amended



                                       6
<PAGE>


complaint  alleges that three purchases by APT from defendants of  participation
interests  in net cash flow or resale  proceeds  of three  portfolios  of motels
owned by Motels of America, Inc. ("MOA"), as well as a fourth purchase by APT of
a similar  participation  interest in a portfolio  of motels owned by Best Inns,
Inc. ("Best"),  violated the Employee  Retirement Income Security Act ("ERISA"),
and  that  APT's  purchase  of the  participation  interests  in the  third  MOA
portfolio  and in the Best  portfolio  violated  the  Racketeer  Influenced  and
Corrupt  Organization Act ("RICO") and the Illinois Consumer Fraud and Deceptive
Practices  Act  ("Consumer  Fraud  Act"),  and  constituted   fraud,   negligent
misrepresentation,  breach of contract and unjust  enrichment.  SBI had acquired
the participation interests when it purchased principal mortgage notes issued by
MOA and Best to finance  purchases  of motel  portfolios;  95% of three of those
interests  and 100% of the fourth were sold to APT for a total of  approximately
$20.9 million.  Plaintiffs'  second amended  complaint seeks judgment (a) on the
ERISA claims for the approximately  $20.9 million purchase price, for rescission
and for  disgorgement of profits,  as well as other relief,  and (b) on the RICO
and state law claims in the amount of $12.3 million, with damages trebled to $37
million on the RICO  claims  and  punitive  damages in excess of $37  million on
certain of the state law claims as well as other  relief.  Following  motions by
defendants,  the court dismissed the RICO, Consumer Fraud Act, fraud,  negligent
misrepresentation,  breach of contract,  and unjust enrichment claims. The court
also found that defendants  were not ERISA  fiduciaries and dismissed two of the
three claims based on that allegation.  Defendants moved for summary judgment on


                                       7
<PAGE>


plaintiffs' only remaining claim,  which alleged an ERISA violation.  The motion
was denied, and defendants appealed to the U.S. Court of Appeals for the Seventh
Circuit.  In July  1999,  the U. S.  Court of Appeals  for the  Seventh  Circuit
reversed the denial of defendants' motion for summary judgment and dismissed the
sole remaining ERISA claim against the Company.  Plaintiffs filed a petition for
certiorari  with the U. S. Supreme Court  seeking  review of the decision of the
Court of  Appeals,  which was  granted  in  January  2000.  After  hearing  oral
argument,  on June 12, 2000,  the U.S.  Supreme Court reversed the U.S. Court of
Appeals for the Seventh Circuit's  judgment,  which had overturned the denial of
defendants'  motion for summary  judgment and dismissed the sole remaining ERISA
claim  against the Company,  and  remanded  the matter to the circuit  court for
further proceedings.  Subsequently, the circuit court remanded the matter to the
U.S.   District  Court  for  the  Northern  District  of  Illinois  for  further
proceedings.
     Both the Department of Labor and the Internal  Revenue Service ("IRS") have
advised SBI that they were or are reviewing the  underlying  transactions.  With
respect to the IRS,  SSBH, SBI and SBRC have consented to extensions of time for
the  assessment  of  excise  taxes  that  may be  claimed  with  respect  to the
transactions  for the years 1987,  1988 and 1989.  In August 1996,  the IRS sent
SSBH,  SBI and SBRC what appeared to be draft  "30-day  letters" with respect to
the  transactions and SSBH, SBI and SBRC were given an opportunity to comment on
whether the IRS should issue 30-day letters,  which would actually  commence the
assessment  process.  In October 1996, SSBH, SBI and SBRC submitted a memorandum
setting  forth reasons why the IRS should not issue such 30-day  letters.  Since
that time, the IRS has not issued such 30-day letters to SSBH, SBI or SBRC.



                                       8
<PAGE>


     In June  1998,  complaints  were filed in the U.S.  district  Court for the
Eastern District of Louisiana in two actions (Board of  Liquidations,  City Debt
of the City of New  Orleans v. Smith  Barney  Inc,  et ano.  and The City of New
Orleans v. Smith Barney Inc. et ano.),  in which the City of New Orleans seeks a
determination that Smith Barney Inc. and another underwriter will be responsible
for any  damages  that the City may incur in the event the IRS denies tax exempt
status to the  City's  General  Obligation  Refunding  Bonds  Series  1991.  The
complaints  were  subsequently  amended.  SSB has asked the court to dismiss the
amended   complaints.   The  Court  denied  the  motion  but  stayed  the  case.
Subsequently, the city withdrew the lawsuit.
     In November  1998, a class action  complaint was filed in the United States
District  Court for the Middle  District of Florida  (Dwight  Brock as Clerk for
Collier County v. Merrill Lynch, et al.). The Complaint  alleged that,  pursuant


                                       9
<PAGE>


to a nationwide conspiracy, 17 broker-dealer defendants,  including SSB, Charged
excessive  mark-ups in connection with advanced  refunding  transactions.  Among
other relief,  plaintiffs sought compensatory and punitive damages,  restitution
and/or  rescission of the  transactions  and  disgorgement of alleged  excessive
profits.  In October 1999, the plaintiff filed a second amended  complaint.  SSB
has asked the court to dismiss the amended  complaint.  In  November  1999,  SSB
moved to dismiss the amended  complaint.  In May 2001, the parties reached,  and
the court preliminarily approved, a tentative settlement. In September 2001, the
court approved the settlement.
     In connection with the Louisiana and Florida matters,  the IRS and SEC have
been  conducting and  industry-wide  investigation  into the pricing of Treasury
securities  in advanced  refunding  transactions,  In April 2000 SSB and several
other broker-dealers entered into a settlement with the IRS and the SEC.
     In December  1998,  SSB was one of  twenty-eight  market  making firms that
reached a settlement  with the SEC in the matter titled In the Matter of Certain
Market Making  Activities on NASDAQ.  As part of the  settlement of that matter,
SSB,  without  admitting or denying the factual  allegation,  agreed to an order
that  required  that it: (i) cease and desist  from  committing  or causing  any
violations of Sections  15(c)(1) and (2) of the Securities  Exchange Act of 1934
and Rules 15cl -2,  15c2-7 and 17a-3  thereunder,  (ii) pay  penalties  totaling
approximately  $760,000,  and (iii) submit certain policies and procedures to an
independent consultant for review.
     In March 1999, a complaint seeking in excess of $250 million was filed by a


                                       10
<PAGE>


hedge fund and its  investment  advisor  against SSB in the Supreme Court of the
State of New York,  County of New York (MKP Master  Fund,  LDC et al. v. Salomon
Smith Barney  Inc.).  Plaintiffs  allege that while acting as their prime broker
SSB breached its contracts with  plaintiffs,  converted  plaintiffs'  monies and
engaged in tortious  conduct,  including  breaching  its  fiduciary  duties.  In
October 1999, the court dismissed plaintiffs' tort claims,  including the breach
of  fiduciary  duty claims,  but allowed the breach of contract  and  conversion
claims  to  stand.   In  December   1999,  SSB  filed  an  answer  and  asserted
counterclaims  against the investment advisor. In response to plaintiffs' motion
to strike the  counterclaims,  in January  2000,  SSB amended its  counterclaims
against  the  investment  advisor  to  seek  indemnification  and  contribution.
Plaintiffs  moved to strike SSB's  amended  counterclaims  in February  2000. In
September   2000,  the  court  denied   plaintiffs'   motion  to  dismiss  SSB's
counterclaims based on indemnification and contribution. Discovery is ongoing.
     SSBH and various subsidiaries have also been named as defendants in various
matters  incident to and typical of the  businesses  in which they are  engaged.
These include numerous civil actions,  arbitration proceedings and other matters
in which  SSBH's  broker-dealer  subsidiaries  have been  named,  arising in the
normal  course  of  business  out  of  activities  as a  broker  and  dealer  in
securities,  as an  underwriter  of  securities,  as  an  investment  banker  or
otherwise.  In the  opinion  of  SSBH's  management,  none of these  actions  is
expected  to have a  material  adverse  effect  on the  results  of  operations,


                                       11
<PAGE>


consolidated financial condition or liquidity of SSBH and its subsidiaries.

Item 4. Submission of Matters to a Vote of Security Holders.
         There were no matters submitted to the security holders for a vote
during the last fiscal year covered by this report.

                                     PART II

Item 5. Market for Registrant's Common Equity and Related Security
        Holder Matters.

        (a)  Market Information.  The  Partnership  has  issued  no stock. There
             is no public market for the Units of Limited Partnership  Interest.
        (b)  Holders.  The number of holders of  Units  of  Limited  Partnership
             Interest as of  December  31, 2001 was 809.
        (c)  Distribution. The  Partnership  did  not  declare a distribution in
             2001 or 2000.
        (d)  Use of Proceeds. There were no  additional sales in the years ended
             December 31, 2001,  2000 and 1999.


                                       12
<PAGE>


     Item 6. Selected  Financial Data. Net realized and unrealized trading gains
(losses),  realized and  unrealized  gains  (losses) on Zero  Coupons,  interest
income,  net income  (loss) and increase  (decrease) in Net Asset Value per Unit
for the years ended  December  31,  2001,  2000,  1999,  1998 and 1997 and total
assets at December 31, 2001, 2000, 1999, 1998 and 1997 were as follows:

<TABLE>
<CAPTION>
                                               2001           2000            1999            1998           1997
                                      -------------   ------------    -------------   ------------   ------------
<S>                                            <C>            <C>             <C>             <C>           <C>
Realized and unrealized trading
gains(losses)net of brokerage
commissions and clearing fees
of $649,493, $624,556, $934,444,
$914,741, and $958,141,
respectively                          $   (164,612)   $    203,233    $ (1,722,069)   $  2,010,123   $    372,990

Realized and unrealized
 appreciation (depreciation)
 on  Zero Coupons                          279,052         471,530      (1,058,378)        644,098        429,903


Interest income                            814,370         970,693       1,106,132       1,126,341      1,212,251
                                      ------------    ------------    ------------    ------------   ------------
                                      $    928,810    $  1,645,456    $ (1,674,315)   $  3,780,562   $  2,015,144
                                      ============    ============    ============    ============   ============
Net income (loss)                     $    698,088    $  1,420,294    $ (2,130,054)   $  3,174,331   $  1,359,429
                                      ============    ============    ============    ============   ============
Increase (decrease) in
 Net Asset Value per Unit             $      58.43    $     119.81    $    (133.74)   $     186.29   $      68.65
                                      ============    ============    ============    ============   ============

Total assets                          $ 15,909,719    $ 17,471,747    $ 19,486,036    $ 23,386,690   $ 23,217,865
                                      ============    ============    ============    ============   ============



</TABLE>



                                       13
<PAGE>


     Item 7.  Management's  Discussion  and Analysis of Financial  Condition and
              Results of Operations.

     (a)  Liquidity.  The  Partnership  does  not  engage  in  sales of goods or
services.  Its only  assets  are its  equity in its  commodity  futures  trading
account,   consisting  of  cash,  Zero  Coupons,  net  unrealized   appreciation
(depreciation) on open futures contracts and interest receivable. Because of the
low margin deposits  normally  required in commodity  trading,  relatively small
price  movements  may  result in  substantial  losses to the  Partnership.  Such
substantial  losses could lead to a material decrease in liquidity.  To minimize
this risk, the Partnership follows certain policies including:
     (1)  Partnership  funds are invested only in commodity  interests which are
traded in sufficient volume to permit,  in the opinion of the Advisors,  ease of
taking and liquidating positions.
     (2) No Advisor will initiate additional  positions in any commodity if such
additional  positions  would result in aggregate  positions for all  commodities
requiring as margin more than 66-2/3% of the  Partnership's  assets allocated to
the Advisor.
     (3) The Partnership will not employ the trading technique commonly known as
"pyramiding",  in which the  speculator  uses  unrealized  profits  on  existing
positions as margin for the purchase or sale of additional positions in the same
or related commodities.
     (4)  The  Partnership  will  not  utilize   borrowings   except  short-term
borrowings if the Partnership takes delivery of any cash commodities.


                                       14
<PAGE>

     (5) The Advisors may, from time to time, employ trading  strategies such as
spreads  or  straddles  on  behalf  of the  Partnership.  The term  "spread"  or
"straddle"   describes  a  commodity  futures  trading  strategy  involving  the
simultaneous buying and selling of contracts on the same commodity but involving
different  delivery  dates or markets and in which the trader  expects to earn a
profit from a widening or narrowing of the difference  between the prices of the
two contracts.
     (6) The Partnership  will not permit the churning of its commodity  trading
accounts.
     (7) The  Partnership  may cease trading and  liquidate  all open  positions
prior to its dissolution if its Net Assets  (excluding assets maintained in Zero
Coupons) decrease to 10% of those assets on the day trading commenced  (adjusted
for redemptions).
     The Partnership 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,  or to purchase or sell other
financial  instruments  at specified  terms at specified  future dates.  Each of
these  instruments  is subject to various risks similar to those relating to the
underlying financial  instruments  including market and credit risk. The General
Partner monitors and controls the  Partnership's  risk exposure on a daily basis


                                       15
<PAGE>


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  Partnership  is  subject.  (See  also  "Item 8.
Financial  Statements  and  Supplementary  Data."  for  further  information  on
financial instrument risk included in the notes to financial statements.)
     Other than the risks inherent in commodity  trading,  the Partnership knows
of no trends, demands, commitments, events or uncertainties which will result in
or  which  are  reasonably  likely  to  result  in the  Partnership's  liquidity
increasing or decreasing in any material way. The Limited Partnership  Agreement
provides that the  Partnership  will cease trading  operations and liquidate all
open positions upon the first to occur of the following:  (i) December 31, 2015;
(ii)  at the end of the  month  in  which  the  Zero  Coupons  purchased  by the
Partnership  come due  (November 15, 2003),  unless the General  Partner  elects
otherwise; (iii) the vote to dissolve the Partnership by limited partners owning
more than 50% of the Units; (iv) assignment by the General Partner of all of its
interest in the  Partnership  or  withdrawal,  removal,  bankruptcy or any other
event that causes the General Partner to cease to be a general partner under the
Partnership  Act unless the Partnership is continued as described in the Limited
Partnership  Agreement;  (v) the  Partnership  is required to register under the
Investment  Company  Act  of  1940  and  the  General  Partner  determines  that
dissolution  is  therefore  in the  Partnership's  best  interest;  or (vi)  the


                                       16
<PAGE>

occurrence  of any event which shall make it unlawful  for the  existence of the
Partnership to be continued.
     (b) Capital resources. (i) The Partnership has made no material commitments
for capital expenditures.
     (ii) The Partnership's capital will consist of the capital contributions of
the partners as  increased or decreased by gains or losses on commodity  trading
and Zero Coupon appreciation or depreciation,  and by expenses, interest income,
redemptions of Units and  distributions  of profits,  if any. Gains or losses on
commodity trading cannot be predicted. Market moves in commodities are dependent
upon  fundamental and technical  factors which the Partnership may or may not be
able to identify.  Partnership  expenses  will  consist of, among other  things,
commissions,  management fees and incentive fees. The level of these expenses is
dependent  upon the level of  trading  gains or losses  and the  ability  of the
Advisors to identify  and take  advantage of price  movements  in the  commodity
markets,  in addition to the level of Net Assets  maintained.  Furthermore,  the
Partnership  will receive no payment on its Zero  Coupons  until their due date.
However,  the  Partnership  will accrue interest on the Zero Coupons and Limited
Partners will be required to report as interest income on their U.S. tax returns
in each year their  pro-rata  share of the accrued  interest on the Zero Coupons
even though no interest will be paid prior to their due date.  In addition,  the
amount of interest  income  payable by SSB is dependent upon interest rates over
which the Partnership has no control.
     No forecast can be made as to the level of redemptions in any given period.


                                       17
<PAGE>

A limited  partner may cause all of his Units to be redeemed by the  Partnership
at the net asset value thereof as of the last day of a quarter (the  "Redemption
Date") on ten days' written notice to the General Partner. Redemption fees equal
to 2% of  redemption  net asset value per Unit  redeemed  will be charged to any
limited  partner who redeems  his Units on the first,  second or third  possible
redemption  dates and 1% on the  fourth  and fifth  possible  redemption  dates,
respectively.  Thereafter, no redemption fee will be charged. For the year ended
December 31, 2001, 1,334 Units were redeemed totaling  $1,856,545.  For the year
ended December 31, 2000, 3,049 Units were redeemed totaling $3,693,417.  For the
year ended December 31, 1999, 1,497 Units were redeemed totaling $1,960,998.
     For each Unit redeemed the Partnership liquidates $1,000 (principal amount)
of Zero Coupons and will continue to liquidate $1,000 (principal amount) of Zero
Coupons per Unit redeemed. These liquidations will be at market value which will
be less than the amount payable on their due date. Moreover, it is possible that
the market value of the Zero Coupon  could be less than its purchase  price plus
the original  issue discount  amortized to date.
     (c) Results of  operations.  For the year ended  December 31, 2001, the Net
Asset Value per Unit increased  4.3% from  $1,348.35 to $1,406.78.  For the year
ended  December  31,  2000,  the Net Asset  Value per Unit  increased  9.8% from
$1,228.54 to  $1,348.35.  For the year ended  December  31, 1999,  the Net Asset
Value per Unit decreased 9.8% from $1,362.28 to $1,228.54.


                                       18
<PAGE>


     The  Partnership   experienced  net  trading  gains  of  $484,881,   before
commissions and expenses in 2001. Gains were  attributable to trading in energy,
grains, softs and U.S. and non-U.S.  interest rates products offset by losses in
currencies,   livestock,   metals  and  indices.  The  Partnership   experienced
unrealized  appreciation  of $215,895 on Zero Coupons  during 2001 and a gain on
the sale of Zero Coupons of $63,157 during 2001.
     The   Partnership   experienced   net  trading  gains  of  $827,789  before
commissions  and  expenses in 2000.  Gains were  primarily  attributable  to the
trading  in  currencies,  energy,  U.S.  and  non-U.S.  interest  rates and were
partially  offset  by  losses  recognized  in  the  trading  of  grains,  softs,
livestock,   metals  and  indices.   The  Partnership   experienced   unrealized
appreciation  of $446,478 on Zero Coupons  during 2000 and a gain on the sale of
Zero Coupons of $25,052 during 2000.
     The   Partnership   experienced  net  trading  losses  of  $787,625  before
commissions  and expenses for the period  ended  December 31, 1999.  Losses were
attributable  to the trading of commodity  futures in non-U.S.  interest  rates,
softs,  indices,  metals,  grains and currencies offset by gains in U.S interest
rates  and  energy.  The  Partnership  experienced  unrealized  depreciation  of
$1,084,077 on Zero Coupons during 1999 and a gain on the sale of Zero coupons of
$25,699 during 1999.
     Commodity 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  depends on the


                                       19
<PAGE>

existence  of major  price  trends and the  ability of the  Advisors to identify
those price  trends  correctly.  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 Advisors are able to identify  them,
the Partnership expects to increase capital through operations.
     (d) Operational Risk
     The Partnership is directly  exposed to market risk and credit risk,  which
arise in the normal course of its business activities. Slightly less direct, but
of critical  importance,  are risks  pertaining to  operational  and back office
support.  This is particularly  the case in a rapidly  changing and increasingly
global environment with increasing  transaction  volumes and an expansion in the
number and complexity of products in the marketplace.
Such risks include:
     Operational/Settlement  Risk - the risk of financial and  opportunity  loss
and legal  liability  attributable to operational  problems,  such as inaccurate
pricing of transactions,  untimely trade execution, clearance and/or settlement,
or the inability to process large volumes of  transactions.  The  Partnership is
subject to increased  risks with respect to its trading  activities  in emerging
market securities,  where clearance,  settlement,  and custodial risks are often
greater than in more established markets.


                                       20
<PAGE>

     Technological  Risk  - the  risk  of  loss  attributable  to  technological
limitations  or hardware  failure that  constrain the  Partnership's  ability to
gather, process, and communicate  information efficiently and securely,  without
interruption,  to  customers,  among units  within the  Partnership,  and in the
markets where the Partnership participates.
     Legal/Documentation Risk - the risk of loss attributable to deficiencies in
the  documentation of transactions  (such as trade  confirmations)  and customer
relationships  (such as master  netting  agreements)  or errors  that  result in
noncompliance with applicable legal and regulatory requirements.
     Financial  Control Risk - the risk of loss  attributable  to limitations in
financial  systems and controls.  Strong  financial  systems and controls ensure
that assets are safeguarded,  that  transactions are executed in accordance with
management's   authorization,   and  that  financial   information  utilized  by
management and  communicated to external  parties,  including the  Partnership's
unitholder, creditors, and regulators, is free of material errors.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Introduction
     The  Partnership  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 Partnership's assets are subject to the risk of trading


                                       21
<PAGE>

loss. Unlike an operating company,  the risk of market sensitive  instruments is
integral, not incidental, to the Partnership's main line of business.
     Market movements result in frequent changes in the fair market value of the
Partnership's open positions and,  consequently,  in its earnings and cash flow.
The  Partnership'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 results among the Partnership's open positions and the liquidity
of the markets in which it trades.
     The  Partnership  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 Partnership's  past performance is not necessarily  indicative of its future
results.
     Value at Risk is a measure  of the  maximum  amount  which the  Partnership
could  reasonably  be expected to lose in a given market  sector.  However,  the
inherent uncertainty of the Partnership's speculative trading and the recurrence
in the markets  traded by the  Partnership  of market  movements  far  exceeding
expectations could result in actual trading or non-trading losses far beyond the
indicated Value at Risk or the Partnership'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


                                       22
<PAGE>


included in this section should not be considered to constitute any assurance or
representation  that the  Partnership's  losses  in any  market  sector  will be
limited to Value at Risk or by the  Partnership's  attempts to manage its market
risk.
 Quantifying the Partnership's Trading Value at Risk

     The following  quantitative  disclosures regarding the Partnership's market
risk exposures contain  "forward-looking  statements"  within the meaning of the
safe harbor from civil  liability  provided for such  statements  by the Private
Securities  Litigation  Reform  Act of 1995  (set  forth in  Section  27A of the
Securities Act of 1933 and Section 21E of the Securities  Exchange Act of 1934).
All  quantitative  disclosures in this section are deemed to be  forward-looking
statements  for purposes of the safe harbor except for  statements of historical
fact (such as the terms of  particular  contracts  and the number of market risk
sensitive instruments held during or at the end of the reporting period).
     The Partnership's risk exposure in the various market sectors traded by the
Advisors is quantified below in terms of Value at Risk. Due to the Partnership's
mark-to-market  accounting, any loss in the fair value of the Partnership's open
positions  is directly  reflected  in the  Partnership's  earnings  (realized or
unrealized).
     Exchange  maintenance margin requirements have been used by the Partnership
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


                                       23
<PAGE>

incurred  in the fair value of any given  contract  in  95%-99%  of any  one-day
intervals.  The  maintenance  margin  levels  are  established  by  dealers  and
exchanges  using  historical  price  studies as well as an assessment of current
market  volatility  (including the implied  volatility of the options on a given
futures contract) and economic fundamentals to provide a probabilistic  estimate
of the maximum expected near-term one-day price fluctuation.  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.
     In the case of market sensitive  instruments  which are not exchange traded
(almost  exclusively  currencies  in the case of the  Partnership),  the  margin
requirements  for the  equivalent  futures  positions have been used as Value at
Risk. In those rare cases in which a futures-equivalent margin is not available,
dealers' margins have been used.
     The fair value of the Partnership's  futures and forward positions does not
have any optionality component. However, certain of the Advisors trade commodity
options. The Value at Risk associated with options is reflected in the following
table as the margin requirement  attributable to the instrument  underlying each
option.  Where this instrument is a futures  contract,  the futures margin,  and
where  this  instrument  is  a  physical   commodity,   the   futures-equivalent



                                       24
<PAGE>


maintenance  margin has been used.  This  calculation is conservative in that it
assumes  that the fair value of an option will decline by the same amount as the
fair value of the underlying  instrument,  whereas,  in fact, the fair values of
the options traded by the  Partnership in almost all cases fluctuate to a lesser
extent than those of the underlying instruments.
     In quantifying the Partnership's  Value at Risk, 100% positive  correlation
in the different  positions  held in each market risk category has been assumed.
Consequently,  the margin  requirements  applicable to the open  contracts  have
simply been added to determine each trading category's  aggregate Value at Risk.
The  diversification  effects  resulting  from the fact  that the  Partnership's
positions  are  rarely,  if  ever,  100%  positively  correlated  have  not been
reflected.


                                       25
<PAGE>



The Partnership's Trading Value at Risk in Different Market Sectors
     The following table indicates the trading Value at Risk associated with the
Partnership's  open  positions by market  category as of December 31, 2001.  All
open position  trading risk exposures of the  Partnership  have been included in
calculating  the  figures  set  forth  below.  As  of  December  31,  2001,  the
Partnership's total capitalization was $15,415,522.


                                       December 31, 2001

<TABLE>
<CAPTION>
                                                                          Year to Date
                                                  % of Total            High         Low
Market Sector                Value at Risk    Capitalization   Value at Risk   Value at Risk
--------------------------------------------------------------------------------------------
<S>                                   <C>              <C>              <C>          <C>
Currencies
 - Exchange Traded Contracts   $  152,825             0.99%  $       214,971   $  117,565
Energy                            147,600             0.96%          284,100       28,220
Grains                            108,893             0.71%          138,012       27,097
Interest rates U.S                 23,425             0.15%          213,500        6,300
Interest rates Non-U.S            197,971             1.28%          860,350      181,465
Livestock                          19,680             0.13%           82,640        6,237
Metals
Exchange Traded Contracts          84,800             0.55%          122,400       38,900
OTC Contracts                      25,100             0.16%           86,200       10,350
Softs                              60,978             0.40%          131,867       47,686
Indices                           204,231             1.32%          280,568          975
Lumber                              1,300             0.01%            7,900          950
                               ----------        ----------
Total                          $1,026,803             6.66%
                               ==========        ==========

</TABLE>




                                       26
<PAGE>



     As of  December  31,  2000,  the  Partnership's  total  capitalization  was
$16,573,979.

                                December 31, 2000

<TABLE>
<CAPTION>
                                                                        Year to Date
                                              % of Total           High            Low
Market Sector                Value at Risk   Capitalization   Value at Risk  Value at Risk
----------------------------------------------------------------------------------------
<S>                                 <C>                <C>            <C>          <C>
Currencies
 - Exchange Traded Contracts   $  197,938            1.19%       $  532,135   $   53,445
Energy                             34,000            0.21%          790,700       25,700
Grains                             66,789            0.40%          209,900        6,300
Interest rates U.S                119,000            0.72%          272,600       10,090
Interest rates Non-U.S            552,984            3.34%          736,677      170,842
Livestock                          28,520            0.17%           56,540        4,500
Metals (Exchange Traded and
 OTC Contracts)                   120,725            0.73%          300,550       18,000
Softs                              61,822            0.37%          209,500       21,500
Indices                            26,202            0.16%          303,411       12,344
Lumber                              2,200            0.01%          170,955        1,100
                               ----------       ----------
Total                          $1,210,180            7.30%
                               ==========       ==========

</TABLE>



                                       27
<PAGE>


     Material Limitations on Value at Risk as an Assessment of Market Risk
     The face value of the market sector  instruments held by the Partnership is
typically  many times the  applicable  maintenance  margin  requirement  (margin
requirements  generally range between 2% and 15% of contract face value) as well
as, many times,  the  capitalization  of the  Partnership.  The magnitude of the
Partnership's  open  positions  creates a "risk of ruin" not typically  found in
most other investment  vehicles.  Because of the size of its positions,  certain
market  conditions -- unusual,  but historically  recurring from time to time --
could cause the  Partnership to incur severe losses over a short period of time.
The  foregoing  Value at Risk  table -- as well as the past  performance  of the
Partnership -- give no indication of this "risk of ruin."
Non-Trading Risk
     The Partnership  has  non-trading  market risk on its foreign cash balances
not needed for margin.  However, these balances (as well as any market risk they
represent) are immaterial.
     Materiality  as  used  in  this  section,   "Qualitative  and  Quantitative
Disclosures About Market Risk," is based on an assessment of reasonably possible
market movements and the potential losses caused by such movements,  taking into
account the leverage,  optionality and multiplier  features of the Partnership's
market sensitive instruments.


                                       28
<PAGE>


Qualitative Disclosures Regarding Primary Trading Risk Exposures
     The following  qualitative  disclosures  regarding the Partnership's market
risk  exposures  - except  for (i)  those  disclosures  that are  statements  of
historical fact and (ii) the  descriptions  of how the  Partnership  manages its
primary market risk exposures - constitute forward-looking statements within the
meaning of Section 27A of the  Securities  Act and Section 21E of the Securities
Exchange Act. The  Partnership's  primary  market risk  exposures as well as the
strategies  used and to be used by the  General  Partner  and the  Advisors  for
managing such exposures are subject to numerous uncertainties, contingencies and
risks, any one of which could cause the actual results of the Partnership's risk
controls to differ materially from the objectives of such strategies. Government
interventions,  defaults and expropriations,  illiquid markets, the emergence of
dominant fundamental factors,  political upheavals,  changes in historical price
relationships,  an influx of new market  participants,  increased regulation and
many  other  factors  could  result in  material  losses as well as in  material
changes to the risk exposures and the management  strategies of the Partnership.
There can be no assurance that the Partnership's  current market exposure and/or
risk  management  strategies  will  not  change  materially  or  that  any  such
strategies will be effective in either the short- or long- term.  Investors must
be  prepared  to  lose  all or  substantially  all of  their  investment  in the
Partnership.


                                       29
<PAGE>


     The following were the primary trading risk exposures of the Partnership as
of December 31, 2001, by market sector.
     Interest Rates.  Interest rate risk is the principal market exposure of the
Partnership.  Interest rate movements  directly  affect the price of the futures
positions  held by the  Partnership  and indirectly the value of its stock index
and  currency  positions.  Interest  rate  movements  in one  country as well as
relative  interest  rate  movements  between  countries  materially  impact  the
Partnership's profitability. The Partnership's primary interest rate exposure is
to interest rate  fluctuations in the United States and the other G-7 countries.
However,  the Partnership also takes futures positions on the government debt of
smaller nations -- e.g.,  Australia.  The General Partner  anticipates  that G-7
interest rates will remain the primary market  exposure of the  Partnership  for
the foreseeable future.
     Currencies.  The  Partnership's  currency  exposure  is  to  exchange  rate
fluctuations,  primarily  fluctuations  which  disrupt  the  historical  pricing
relationships   between   different   currencies  and  currency   pairs.   These
fluctuations  are  influenced  by interest rate changes as well as political and
general  economic  conditions.  The General Partner does not anticipate that the
risk profile of the Partnership's  currency sector will change  significantly in
the future.  The currency  trading Value at Risk figure includes  foreign margin
amounts  converted into U.S.  dollars with an incremental  adjustment to reflect
the exchange rate risk inherent to the  dollar-based  Partnership  in expressing


                                       30
<PAGE>


Value at Risk in a functional currency other than dollars.
     Stock Indices. The Partnership's primary equity exposure is to equity price
risk in the G-7 countries. The stock index futures traded by the Partnership are
by law limited to futures on broadly based indices. As of December 31, 2001, the
Partnership's  primary exposures were in the S&P 500, Financial Times (England),
and CAC40 (France) stock indices.  The General Partner  anticipates  little,  if
any, trading in non-G-7 stock indices.  The Partnership is primarily  exposed to
the risk of adverse price trends or static  markets in the major U.S.,  European
and Japanese  indices.  (Static markets would not cause major market changes but
would make it difficult  for the  Partnership  to avoid being  "whipsawed"  into
numerous small losses.)
     Metals. The Partnership's  primary metal market exposure is to fluctuations
in the price of gold and silver. Although certain of the Advisors will from time
to time trade base  metals such as  aluminum,  zinc and  copper,  the  principal
market  exposures  of the  Partnership  have  consistently  been in the precious
metals,  gold and silver.  The General Partner  anticipates that gold and silver
will remain the primary metals market exposure for the Partnership.
     Softs. The Partnership's  primary  commodities  exposure is to agricultural
price  movements  which  are often  directly  affected  by severe or  unexpected
weather  conditions.   Coffee,   cocoa,  cotton  and  sugar  accounted  for  the
substantial  bulk of the  Partnership's  commodity  exposure as of December  31,
2001.


                                       31
<PAGE>

     Energy. The Partnership's  primary energy market exposure is to gas and oil
price  movements, often  resulting  from political  developments  in the
Middle East. Oil prices can be volatile and substantial  profits and losses have
been and are expected to continue to be experienced in this market.

Qualitative Disclosures Regarding Non-Trading Risk Exposure
-----------------------------------------------------------

  The following were the only  non-trading  risk exposures of the Partnership
as of December 31, 2001.
     Foreign  Currency  Balances.  The  Partnership's  primary foreign  currency
balances are in Japanese yen, Australian dollar, British pounds and Euro dollar.
The  Advisor  regularly  converts  foreign  currency  balances  to dollars in an
attempt to control the Partnership's non-trading risk.
     Securities Positions. The Partnership's only market exposure in instruments
held other than for trading is in its  securitites  portfolio.  The  Partnership
maintains  a portion  of its  assets in  principal  amounts  stripped  from U.S.
Treasury Bonds under the Treasury's  STRIPS  program.  Violent  fluctuations  in
prevailing  interest rates could cause immaterial  mark-to-market  losses on the
Partnership's securities.
Qualitative Disclosures Regarding Means of Managing Risk Exposure
     The General Partner monitors and controls the  Partnership'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


                                       32
<PAGE>


and limiting the credit and market risks to which the Partnership is subject.
     The  General  Partner  monitors  the  Partnership's   performance  and  the
concentration of its open positions,  and consults with the Advisors  concerning
the Partnership's overall risk profile. If the General Partner felt it necessary
to do so, the General Partner could require certain of the Advisors to close out
individual  positions as well as enter certain positions traded on behalf of the
Partnership. However, any such intervention would be a highly unusual event. The
General  Partner  primarily  relies on the Advisors'  own risk control  policies
while maintaining a general  supervisory  overview of the  Partnership's  market
risk exposures.
     Each Advisor applies its own risk management  policies to its trading.  The
Advisors often follow  diversification  guidelines,  margin limits and stop loss
points to exit a  position.  The  Advisors'  research of risk  management  often
suggests ongoing modifications to their trading programs.
     As part of the General  Partner's  risk  management,  the  General  Partner
periodically  meets with the Advisors to discuss  their risk  management  and to
look for any material  changes to the  Advisors'  portfolio  balance and trading
techniques.  The  Advisors  are  required to notify the  General  Partner of any
material changes to their programs.
     In the  unlikely  event that the  Partnership  is required to meet a margin
call  in  excess  of the  cash  balance  in its  trading  accounts,  SSBHI  will
contribute up to an amount equal to the maturity  value of the Zero Coupons held
by the Partnership at the time of such call to the capital of the Partnership to
permit it to meet its margin obligations in excess of its cash balance.



                                       33
<PAGE>



Item 8.    Financial Statements and Supplementary Data.
           --------------------------------------------

                SMITH BARNEY PRINCIPAL PLUS FUTURES FUND L.P. II
                          INDEX TO FINANCIAL STATEMENTS


                                                                      Page
                                                                      Number

                        Oath or Affirmation                            F-2

                        Report of Independent Accountants.             F-3

                        Financial Statements:
                        Statement of Financial Condition at
                        December 31, 2001 and 2000.                    F-4

                        Condensed Schedule of Investments at
                        December 31, 2001                              F-5

                        Statement of Income and Expenses for
                        the years ended December 31, 2001, 2000
                        and 1999.                                      F-6

                        Statement of Partners' Capital for
                        the years ended December 31, 2001, 2000
                        and 1999.                                      F-7

                        Notes to Financial Statements.               F-8 - F-12




                                                  F-1


<PAGE>






                           To The Limited Partners of
                           Smith Barney Principal PLUS
                              Futures Fund L.P. II

To the best of the knowledge and belief of the undersigned, the information
contained herein is accurate and complete.






By:  Daniel R. McAuliffe, Jr.
     Chief Financial Officer and Director
     Smith Barney Futures Management LLC
     General Partner, Smith Barney Principal PLUS
     Futures Fund L.P. II

Smith Barney Futures Management LLC
388 Greenwich Street
7th Floor
New York, N.Y.  10013
212-723-5424



                                        F-2

<PAGE>


                        Report of Independent Accountants

To the Partners of
   Smith Barney Principal PLUS Futures Fund L.P. II:

     In  our  opinion,  the  accompanying   statement  of  financial  condition,
including the condensed  schedule of investments,  and the related statements of
income and expenses and of partners'  capital  present  fairly,  in all material
respects,  the financial  position of Smith Barney  Principal  PLUS Futures Fund
L.P. II at December  31, 2001 and 2000,  and the results of its  operations  for
each of the three years in the period ended  December 31,  2001,  in  conformity
with accounting  principles  generally accepted in the United States of America.
These  financial  statements  are the  responsibility  of the  management of the
General Partner;  our responsibility is to express an opinion on these financial
statements  based on our  audits.  We  conducted  our audits of these  financial
statements  in  accordance  with auditing  standards  generally  accepted in the
United  States of America,  which  require that we plan and perform the audit to
obtain reasonable  assurance about whether the financial  statements are free of
material  misstatement.  An audit includes examining,  on a test basis, evidence
supporting the amounts and  disclosures in the financial  statements,  assessing
the accounting  principles used and significant estimates made by the management
of  the  General  Partner,   and  evaluating  the  overall  financial  statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.



PricewaterhouseCoopers LLP
New York, New York
February 28, 2002






                                        F-3
<PAGE>



                           Smith Barney Principal PLUS
                              Futures Fund L.P. II
                        Statement of Financial Condition
                           December 31, 2001 and 2000

<TABLE>
<CAPTION>
                                                                              2001           2000
                                                                        -----------   -----------
<S>                                                                            <C>           <C>
Assets:
Equity in commodity futures trading account:
   Cash (Note 3c)                                                       $ 4,793,430   $ 4,968,714
   Net unrealized appreciation on open positions                            421,121     1,258,784
   Zero coupons, $10,958,000 and $12,292,000 principal amount in 2001
    and 2000, respectively, due November 15, 2003, at fair value
    (amortized cost $9,777,282 and $10,283,556 in 2001 and 2000,
    respectively) (Notes 1 and 2)                                        10,417,551    10,707,930
                                                                        -----------   -----------
                                                                         15,632,102    16,935,428
   Receivable from SSB on sale of zero coupons                              271,528       514,560
   Interest receivable                                                        6,089        21,759
                                                                        -----------   -----------
                                                                        $15,909,719   $17,471,747
                                                                        -----------   -----------
Liabilities and Partners' Capital:
Liabilities:
  Accrued expenses:
   Commissions                                                          $    41,148   $    45,810
   Management fees                                                            7,190         8,607
   Professional fees                                                         38,545        34,799
   Other                                                                      4,975         3,587
  Redemptions payable (Note 5)                                              402,339       804,965
                                                                        -----------   -----------
                                                                            494,197       897,768
                                                                        -----------   -----------
Partners' capital (Notes 1, 5 and 6):
  General Partner, 203 Unit equivalents outstanding in 2001 and 2000        285,576       273,715
  Limited Partners, 10,755 and 12,089 Units of Limited Partnership
   Interest outstanding in 2001 and 2000, respectively                   15,129,946    16,300,264
                                                                        -----------   -----------
                                                                         15,415,522    16,573,979
                                                                        -----------   -----------
                                                                        $15,909,719   $17,471,747
                                                                        -----------   -----------
</TABLE>

See notes to financial statements.
                                        F-4
<PAGE>


                           Smith Barney Principal PLUS
                              Futures Fund L.P. II
                        Condensed Schedule of Investments
                                December 31, 2001
<TABLE>
<CAPTION>
Sector                                         Contract                             Fair Value
----------                                     ----------                          -----------
<S>                                             <C>                                        <C>
Currencies                                     Futures contract purchased - 0.40% $     62,698
                                               Futures contracts sold - 1.16%          178,335
                                                                                  ------------
  Total Currencies - 1.56%                                                             241,033
                                                                                  ------------

Energy                                         Futures contract purchased - (0.07)%    (10,025)
                                               Futures contracts sold - 0.07%           10,410
                                                                                  ------------
  Total Energy - 0.00%                                                                     385
                                                                                  ------------

Grains                                         Futures contract purchased - 0.00%  *    (1,000)
                                               Futures contracts sold - 0.61%           94,757
                                                                                  ------------
  Total Grains - 0.61%                                                                  93,757
                                                                                  ------------

Interest Rates Non-U.S                         Futures contract - purchased  (0.11)%   (17,938)
                                               Futures contracts sold - 0.34%           52,742
                                                                                  ------------
  Total Interest Rates Non-U.S. - 0.23%                                                 34,804
                                                                                  ------------

Interest Rates                                 Futures contract purchased - 0.03%        5,790
                                               Futures contracts sold - (0.01)%         (2,613)
                                                                                  ------------
  Total Interest Rates U.S. - 0.02%                                                      3,177
                                                                                  ------------

Livestock                                      Futures contract  purchased - 0.08%      12,920
                                               Futures contracts sold - (0.04)%         (6,880)
                                                                                  ------------
  Total Livestock - 0.04%                                                                6,040
                                                                                  ------------

Metals                                         Futures contract  purchased - 0.03%       5,560
                                               Futures contracts sold - (0.19)%        (29,501)
                                                                                  ------------
  Total Metals - (0.16)%                                                               (23,941)
                                                                                  ------------

Total Lumber - (0.01)%                         Futures contract sold (0.01)%            (1,661)
                                                                                  ------------

Softs                                          Futures contract purchased - 0.13%       20,397
                                               Futures contracts sold - 0.03%            4,593
                                                                                  ------------
  Total Softs - 0.16%                                                                   24,990
                                                                                  ------------

Total Indices - 0.28%                          Futures contract purchased - 0.28%       42,537
                                                                                  ------------

Total Fair Value - 2.73%                                                               421,121

Total Zero Coupons - 67.58%                    Zero Coupon Bond, 11/15/2003
                                               (amortized cost $9,777,282)          10,417,551
                                                                                  ------------
Total Investments - 70.31%                                                        $ 10,838,672
                                                                                  ------------

        Country Composition                                Investments              % of Investments
                                                             at Value                   at Value
        -------------------                         ------------------          --------------------
        Australia                                               $7,645                     0.07%
        Canada                                                   8,263                     0.08%
        France                                                   6,113                     0.05%
        Germany                                                 33,361                     0.31%
        Hong Kong                                                  910                     0.01%
        Japan                                                   (1,881)                   (0.02)%
        Singapore                                              (11,076)                   (0.10)%
        United Kingdom                                         (53,418)                   (0.49)%
        United States                                       10,848,756                   100.09%
                                                     ------------------          ----------------
                                                           $10,838,672                   100.00%
                                                     ==================          ================
</TABLE>

Percentages are based on Partners' capital unless otherwise indicated
* Due to rounding.

 See notes to financial statements.
                                        F-5

<PAGE>


                           Smith Barney Principal PLUS
                              Futures Fund L.P. II
                        Statement of Income and Expenses
              for the years ended December 31, 2001, 2000 and 1999

<TABLE>
<CAPTION>
                                                                     2001           2000           1999
                                                             -----------    -----------    -----------
<S>                                                                  <C>            <C>           <C>
Income:
  Net gains (losses) on trading of commodity interests:
   Realized gains (losses) on closed positions               $ 1,322,544    $  (117,327)   $  (197,588)
   Change in unrealized gains (losses) on open positions        (837,663)       945,116       (590,037)
                                                             -----------    -----------    -----------
                                                                 484,881        827,789       (787,625)
  Less, Brokerage commissions including clearing fees of
   $43,765, $38,519 and $25,058, respectively (Note 3c)         (649,493)      (624,556)      (934,444)
                                                             -----------    -----------    -----------
  Net realized and unrealized gains (losses)                    (164,612)       203,233     (1,722,069)
  Gains on sale of zero coupons                                   63,157         25,052         25,699
  Unrealized appreciation (depreciation) on zero coupons         215,895        446,478     (1,084,077)
  Interest income (Notes 2c and 3c)                              814,370        970,693      1,106,132
                                                             -----------    -----------    -----------
                                                                 928,810      1,645,456     (1,674,315)
                                                             -----------    -----------    -----------
Expenses:
  Management fees (Note 3b)                                       96,142        178,204        387,055
  Incentive fees (Note 3b)                                        80,345           --           20,500
  Professional fees                                               44,052         41,096         38,693
  Other expenses                                                  10,183          5,862          9,491
                                                             -----------    -----------    -----------
                                                                 230,722        225,162        455,739
                                                             -----------    -----------    -----------
Net income (loss)                                            $   698,088    $ 1,420,294    $(2,130,054)
                                                             -----------    -----------    -----------

Net income (loss) per Unit of Limited Partnership Interest
  and General Partner Unit equivalent (Notes 1 and 6)        $     58.43    $    119.81    $   (133.74)
                                                             -----------    -----------    -----------
</TABLE>

See notes to financial statements.

                                        F-6

<PAGE>


                           Smith Barney Principal PLUS
                              Futures Fund L.P. II
                         Statement of Partners' Capital
              for the years ended December 31, 2001, 2000 and 1999


<TABLE>
<CAPTION>
                                                               Limited           General
                                                               Partners          Partner           Total
                                                            ------------     -----------    ------------
<S>                                                                <C>              <C>             <C>
Partners' capital at December 31, 1998                      $ 22,661,611    $    276,543    $ 22,938,154
Net loss                                                      (2,102,905)        (27,149)     (2,130,054)
Redemption of 1,497 Units of Limited Partnership Interest     (1,960,998)           --        (1,960,998)
                                                            ------------    ------------    ------------
Partners' capital at December 31, 1999                        18,597,708         249,394      18,847,102
Net income                                                     1,395,973          24,321       1,420,294
Redemption of 3,049 Units of Limited Partnership Interest     (3,693,417)           --        (3,693,417)
                                                            ------------    ------------    ------------
Partners' capital at December 31, 2000                        16,300,264         273,715      16,573,979
Net income                                                       686,227          11,861         698,088
Redemption of 1,334 Units of Limited Partnership Interest     (1,856,545)           --        (1,856,545)
                                                            ------------    ------------    ------------
Partners' capital at December 31, 2001                      $ 15,129,946    $    285,576    $ 15,415,522
                                                            ------------    ------------    ------------

</TABLE>


See notes to financial statements.

                                        F-7
<PAGE>


                           Smith Barney Principal PLUS
                              Futures Fund L.P. II
                          Notes to Financial Statements


1.  Partnership Organization:
     Smith Barney Principal PLUS Futures Fund L.P. II (the  "Partnership")  is a
limited  partnership  which  was  organized  on  November  16,  1995  under  the
partnership  laws of the  State of New  York.  The  Partnership  engages  in the
speculative trading of a diversified portfolio of commodity interests, including
futures contracts,  options and forward contracts.  The commodity interests that
are traded by the  Partnership  are volatile and involve a high degree of market
risk. The Partnership will maintain a portion of its assets in principal amounts
stripped from U.S.  Treasury  Bonds under the  Treasury's  STRIPS  program which
payments  are due  approximately  seven  years from the date  trading  commenced
("Zero Coupons"). The Partnership was authorized to sell 60,000 Units during its
initial offering period.

     Smith  Barney  Futures  Management  LLC acts as the  general  partner  (the
"General  Partner") of the Partnership.  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.

     The  General  Partner  and each  limited  partner  share in the profits and
losses of the  Partnership in proportion to the amount of  partnership  interest
owned by each except that no limited  partner shall be liable for obligations of
the Partnership in excess of his initial capital  contribution  and profits,  if
any, net of distributions.

   The  Partnership  will  be  liquidated  upon  the  first  to  occur  of the
following:  December 31, 2015; at the end of the month in which the Zero Coupons
purchased come due (November,  2003) ("First Payment Date"),  unless the General
Partner elects otherwise, or under certain other circumstances as defined in the
Limited Partnership Agreement. The General Partner, in its sole discretion,  may
elect not to terminate  the  Partnership  as of the First  Payment  Date. In the
event that the General Partner elects to continue the Partnership,  each limited
partner shall have the opportunity to redeem all or some of his Units.

2.  Accounting Policies:
     a. All commodity interests (including  derivative financial instruments and
derivative commodity  instruments) are used for trading purposes.  The commodity
interests  are  recorded on trade date and open  contracts  are  recorded in the
statement of financial  condition at fair value on the last  business day of the
year,  which  represents  market value for those  commodity  interests for which
market  quotations are readily  available.  Investments  in commodity  interests
denominated  in  foreign  currencies  are  translated  into U.S.  dollars at the
exchange rates  prevailing on the last business day of the year.  Realized gains
(losses) and changes in  unrealized  values on commodity  interests  and foreign
currencies  are  recognized in the period in which the contract is closed or the
changes  occur and are  included in net gains  (losses) on trading of  commodity
interests.

     b.  Income  taxes have not been  provided as each  partner is  individually
liable  for the  taxes,  if any,  on his share of the  Partnership's  income and
expenses.

     c. The original issue discount on the Zero Coupons is being  amortized over
their life using the interest method and is included in interest income.

                                        F-8
<PAGE>

     d. Zero  Coupons are recorded in the  statement  of financial  condition at
fair value.  Realized  gain (loss) on the sale of Zero Coupons is  determined on
the amortized cost basis of the Zero Coupons at the time of sale.

     e. The  preparation  of financial  statements in conformity  with generally
accepted  accounting  principles  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial  statements and the reported
amounts of revenues and expenses  during the reporting  period.  Actual  results
could differ from these estimates.

3.  Agreements:
     a. Limited  Partnership  Agreement:  The General  Partner  administers  the
business and affairs of the Partnership including selecting one or more advisors
to make trading decisions for the Partnership.

    b. Management Agreements:
     The  General  Partner,  on  behalf of the  Partnership,  has  entered  into
Management Agreements with Winton Capital Management ("Winton") and Willowbridge
Associates  Inc.  ("Willowbridge")  (the  "Advisors"),  which  provide  that the
Advisors have sole discretion in determining the investment of the assets of the
Partnership  allocated to each Advisor by the General  Partner.  As compensation
for  services,  the  Partnership  is  obligated  to pay  Willowbridge  a monthly
management  fee of 1/6 of 1% (2% per year) of month-end Net Assets  allocated to
it and pay  Winton a  monthly  management  fee of 1/8 of 1% (1.5%  per  year) of
month-end Net Assets allocated to it. The Partnership will also pay each Advisor
an  incentive  fee payable  quarterly  equal to 20% of New Trading  Profits,  as
defined in the Management Agreements.

    c. Customer Agreement:
     The Partnership  has entered into a Customer  Agreement which provides that
the  Partnership  will pay SSB a  monthly  brokerage  fee equal to 7/12 of 1% of
month-end  Net  Assets  allocated  to the  Advisors  (7%  per  year)  in lieu of
brokerage  commissions  on a per trade  basis.  A portion of this fee is paid to
employees  of SSB who  have  sold  Units of the  Partnership.  This fee does not
include exchange,  clearing,  user, give-up,  floor brokerage and NFA fees which
will be borne by the Partnership.  All of the Partnership's assets are deposited
in the  Partnership's  account at SSB.  The  Partnership  maintains a portion of
these assets in Zero Coupons and a portion in cash.  The  Partnership's  cash is
deposited  by  SSB in  segregated  bank  accounts,  to the  extent  required  by
Commodity Futures Trading Commission regulations. At December 31, 2001 and 2000,
the amount of cash held for margin  requirements  was $1,243,463 and $1,408,303,
respectively.  SSB will pay the Partnership interest on 80% of the average daily
equity  maintained  in cash in its  account  during  each month at a 30-day U.S.
Treasury bill rate determined weekly by SSB based on the average  noncompetitive
yield on 3-month U.S.  Treasury bills maturing in 30 days from the date on which
such weekly rate is determined.  The Customer  Agreement between the Partnership
and SSB  gives  the  Partnership  the legal  right to net  unrealized  gains and
losses. The Customer Agreement may be terminated by either party.

                                        F-9
<PAGE>


4.  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  results of the  Partnership's  trading
activity are shown in the statement of income and expenses. All of the commodity
interests owned by the Partnership  are held for trading  purposes.  The average
fair value during the years ended December 31, 2001 and 2000, based on a monthly
calculation,  was $568,840 and $575,395,  respectively.  The fair value of these
commodity interests,  including options thereon, if applicable,  at December 31,
2001 and 2000 was $421,121 and $1,258,784, respectively.

                                                      Fair Value
                                                      December 31,
                                                         2000
                                                     ------------
 Currencies:
        -Exchange Traded Contracts                      $636,230
    Energy                                                20,337
    Grains                                                36,478
    Interest Rates U.S.                                  233,656
    Interest Rates Non-U.S.                              263,893
    Livestock                                             42,715
    Metals:
        -Exchange Traded Contracts                         9,240
    Softs                                                 15,484
    Indices                                               (3,198)
    Lumber                                                 3,949
                                                     ------------
    Total                                             $1,258,784
                                                     ------------



5.  Distributions and Redemptions:
     Distributions  of profits,  if any, will be made at the sole  discretion of
the General Partner.  Beginning with the end of the first full quarter ending at
least six months after trading commenced (March 31, 1997), on 10 days' notice to
the General Partner, a limited partner may require the Partnership to redeem his
Units at  their  Redemption  Net  Asset  Value as of the last day of a  quarter.
Redemption fees equal to 2% of Redemption Net Asset Value per Unit redeemed will
be charged to any limited partner who redeems his Units on the first,  second or
third  possible  redemption  date,  and  1% on the  fourth  and  fifth  possible
redemption dates.  Thereafter,  no redemption fee will be charged. There were no
redemption fees charged during 2001, 2000 and 1999.

                                        F-10

<PAGE>



6.  Financial Highlights:
     Changes in the net asset  value per Unit of  Partnership  interest  for the
years ended December 31, 2001, 2000 and 1999 were as follows:
<TABLE>
<CAPTION>

                                                                  2001         2000         1999
                                                           ------------   ----------   ----------
<S>                                                               <C>          <C>           <C>
    Net realized and unrealized gains (losses)            $     (15.04)$      31.16 $    (109.18)
    Realized and unrealized appreciation (depreciation)
     on Zero Coupons                                             23.63        35.19       (64.64)
    Interest income                                              69.18        69.15        68.06
    Expenses                                                    (19.34)      (15.69)      (27.98)
                                                             ---------    ---------    ---------
    Increase (decrease) for period                               58.43       119.81      (133.74)
    Net asset value per Unit, beginning of year               1,348.35     1,228.54     1,362.28
                                                             ---------    ---------    ---------
    Net asset value per Unit, end of year                 $   1,406.78 $   1,348.35 $   1,228.54
                                                             ---------    ---------    ---------
</TABLE>

    Ratios to average net assets:
    Net income before incentive fee                            4.8%
    Incentive fee                                             (0.5)%
                                                             -------
    Net income after incentive fee                             4.3%
                                                             -------


    Operating expenses                                         4.9%
    Incentive fee                                              0.5%
                                                             -------
    Total expenses and incentive fee                           5.4%
                                                             -------


    Total return:
    Total return before incentive fee                          4.8%
    Incentive fee                                             (0.5)%
                                                             -------
    Total return after incentive fee                           4.3%
                                                             -------

7.  Guarantee:
     In the  unlikely  event that the  Partnership  is required to meet a margin
call  in  excess  of the  cash  balance  in its  trading  accounts,  SSBHI  will
contribute up to an amount equal to the maturity  value of the Zero Coupons held
by the Partnership at the time of such call to the capital of the Partnership to
permit it to meet its  margin  obligations  in excess of its cash  balance.  The
guarantee can only be invoked once. After the guarantee is invoked, trading will
cease and the General  Partner will either wait until the First  Payment Date or
will distribute cash and Zero Coupons to the limited partners.

8.  Financial Instrument Risks:
     The Partnership 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 Partnership 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
Partnership's  risk of loss in the event of  counterparty  default is  typically

                                        F-11
<PAGE>

limited to the amounts  recognized in the  statement of financial  condition and
not  represented  by the contract or notional  amounts of the  instruments.  The
Partnership has credit risk and concentration risk because the sole counterparty
or broker with respect to the Partnership's assets is SSB.

     The General Partner monitors and controls the  Partnership'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  Partnership is
subject.  These  monitoring  systems allow the General Partner to  statistically
analyze actual  trading  results with risk adjusted  performance  indicators and
correlation 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
appropriately  not recorded in the financial  statements,  reflect the extent of
the  Partnership's  involvement  in these  instruments.  The  majority  of these
instruments  mature  within one year of December 31, 2001.  However,  due to the
nature  of the  Partnership's  business,  these  instruments  may not be held to
maturity.

                                        F-12



<PAGE>


     Item 9. Changes in and  Disagreements  with  Accountants  on Accounting and
Financial Disclosure.
     During the last two fiscal  years and any  subsequent  interim  period,  no
independent  accountant who was engaged as the principal accountant to audit the
Partnership's financial statements has resigned or was dismissed.

                                    PART III

     Item   10.   Directors   and   Executive   Officers   of  the   Registrant.
     The Partnership has no officers or directors and its affairs are managed by
its General Partner,  Smith Barney Futures Management LLC. Investment  decisions
are made by the Advisors.

     Item 11. Executive Compensation.
     The  Partnership  has no directors or officers.  Its affairs are managed by
Smith Barney Futures  Management LLC, its General Partner.  SSB, an affiliate of
the General  Partner,  is the commodity  broker for the Partnership and receives
brokerage  commissions for such services, as described under "Item 1. Business."
Brokerage  commissions  and clearing  fees of $649,493  were earned for the year
ended December 31, 2001.  Management fees of $96,142 were earned by the Advisors
for the year ended  December 31, 2001.  Incentive fees of $80,345 were earned by
the Advisors for the year ended December 31, 2001.

     Item 12. Security Ownership of Certain Beneficial Owners and Management.

     (a). Security ownership of certain beneficial owners.
     The Partnership  knows of no person who  beneficially  owns more than 5% of
the Units outstanding.



                                       34
<PAGE>


     (b).  Security  ownership  of  management.  Under the terms of the  Limited
Partnership  Agreement,  the  Partnership's  affairs  are managed by the General
Partner.  The  General  Partner  owns  Units  of  general  partnership  interest
equivalent  to 203 (1.9%) Units of Limited  Partnership  Interest as of December
31, 2001.
     (c). Changes in control. None.

     Item 13. Certain Relationships and Related Transactions.

  Salomon Smith Barney Inc. and Smith Barney Futures  Management LLC would be
considered  promoters for purposes of Item 404(d) of Regulation  S-K. The nature
and the amounts of compensation  each promoter will receive from the Partnership
are set forth under "Item 1. Business.",  "Item 8. -------- Financial Statements
and Supplementary Data." and "Item 11. Executive Compensation."

                                     PART IV

 Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

         (a)  (1)   Financial Statements:
                    Statement  of   Financial  Condition  at  December  31, 2001
                    and 2000.  Statement  of Income and  Expenses  for the years
                    ended December 31, 2001, 2000 and 1999.
                    Statement  of   Partners'  Capital   for  the   years  ended
                    December 31, 2001, 2000 and 1999.
              (2)   Financial Statement  Schedules:  Financial Data Schedule for
                    the year ended December 31, 2001.
              (3)  Exhibits:



                                       35
<PAGE>


3.1  - Limited  Partnership  Agreement (filed as Exhibit 3.1 to the Registration
     Statement  on Form S-1  (File  No.  33-80723)  and  incorporated  herein by
     reference).
3.2  - Certificate  of Limited  Partnership  of the  Partnership as filed in the
     office of the Secretary of State of the State of New York (filed as Exhibit
     3.2 to the  Registration  Statement  on Form S-1  (File No.  33-80723)  and
     incorporated herein by reference).

10.1 - Customer Agreement between the Partnership and Smith Barney Shearson Inc.
     (filed as Exhibit 10.1 to the Registration  Statement on Form S-1 (File No.
     33-80723) and incorporated herein by reference).

10.3 - Escrow  Instructions  relating to escrow of subscription  funds (filed as
     Exhibit 10.3 to the Registration  Statement on Form S-1 (File No. 33-80723)
     and incorporated herein by reference).

10.5 - Management Agreement among the Partnership,  the General Partner and John
     W. Henry & Company,  Inc. (JWH) (filed as Exhibit 10.5 to the  Registration
     Statement  on Form S-1  (File  No.  33-80723)  and  incorporated  herein by
     reference).

10.6 -  Management  Agreement  among the  Partnership,  the General  Partner and
     Willowbridge  Associates  Inc.  (filed as Exhibit 10.6 to the  Registration
     Statement  on Form S-1  (File  No.  33-80723)  and  incorporated  herein by
     reference).


                                       36
<PAGE>


10.7 - Letters  extending  Management  Agreements  with John W. Henry & Company,
     Inc. and Willowbridge Associates Inc. (previously filed).


10.8 - Letter from the General  Partner  terminating  Management  Agreement with
     John W. Henry & Company Inc. (previously filed).

10.9 -  Management  Agreement  among the  Partnership,  the General  Partner and
     Winton Capital Management (previously filed).

10.10-  Letter  extending  the  Management   Agreement  with  Willowbridge  Inc.
     (previously filed).

10.11- Letters extending  Management  Agreements with Winton Capital  Management
     and Willowbridge Associates Inc. for 2001 (filed herein).

(b) Reports on 8-K: None Filed.


                                       37
<PAGE>

     Supplemental  Information  To Be Furnished  With Reports Filed  Pursuant To
Section 15(d) Of The Act by  Registrants  Which Have Not  Registered  Securities
Pursuant To Section 12 Of the Act.




Annual Report to Limited Partners





                                       38
<PAGE>


                                               SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this annual report on Form
10-K to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of New York and State of New York on the 29th day of March 2002.

SMITH BARNEY PRINCIPAL PLUS FUTURES FUND L.P. II


By:       Smith Barney Futures Management LLC
          (General Partner)



By        /s/  David J. Vogel
          -------------------------------------
          David J. Vogel, President & Director

          Pursuant to the requirements of the Securities Exchange Act of 1934,
this annual report on Form 10-K has been signed below by the following persons
in the capacities and on the date indicated.



/s/ David J. Vogel                                            /s/ Shelley Ullman
-----------------------------                                ------------------
David J. Vogel                                                    Director
Director, Principal Executive
Officer and President



/s/ Maureen O'Toole                                           /s/ Steve J. Keltz
-------------------------                                    ------------------
Maureen O'Toole                                           Secretary and Director
Director



/s/ Daniel R. McAuliffe, Jr.
------------------------------
Daniel R. McAuliffe, Jr.
Chief Financial Officer and
Director


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