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, 1999

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
                           390 Greenwich St. - 1st Fl.
                         New York, New York 10013
            (Address and Zip Code of principal executive offices)

                            (212) 723-5424
(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 29, 2000  Limited  Partnership  Units with an aggregate  value of
$18,077,451 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  Law 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 General Partner changed its form of

                                   2
<PAGE>

organization  from a corporation  to a limited  liability  company on October 1,
1999. 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  Partnership's  trading of futures  contracts on commodities is done on
United  States 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,  1999,  all  commodity  trading
decisions are made for the Partnership by John W. Henry & Company,  Inc. ("JWH")
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 JWH a monthly  management fee equal to 1/3 of 1% (4% per
year) of the month-end Net Assets allocated to it. The Partnership will also pay
Willowbridge  an  incentive  fee payable  quarterly  equal to 20% of New Trading

                              3
<PAGE>

Profits earned by it for the  Partnership  and JWH will receive an incentive fee
of 15% of the New Trading Profits (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  Advisors  (7% per  year) in lieu of  brokerage  commissions  on a per trade
basis. SSB will pay 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 will pay 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  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
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

                              4

<PAGE>

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
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, 1999,
1998 and 1997 is set forth under "Item 6. Selected  Financial Data." Partnership
capital as of December 31, 1999 was $18,847,102.
         (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.

                                   5
<PAGE>


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.
         There  have   been   no  material  administrative,  civil  or  criminal
actions  within  the  past  five  years  against  SSB or  any of its  individual
principals and no such actions are currently pending, except as follows.
         In  September  1992,  Harris  Trust and  Savings  Bank (as  trustee for
Ameritech  Pension Trust),  Ameritech  Corporation,  and an officer of Ameritech
sued  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 complaint  alleged that
purchases by Ameritech  Pension Trust from the Salomon entities of approximately
$20.9  million in  participations  in a portfolio  of motels  owned by Motels of
America,  Inc.  and Best Inns,  Inc.  violated the  Employee  Retirement  Income
Security Act ("ERISA"),  the Racketeer  Influenced and Corrupt  Organization Act
("RICO") and state law. SBI had acquired the participations  issued by Motels of
America and Best Inns to finance  purchases of motel  portfolios and sold 95% of
three  such  issues  and 100% of one  such  issue to  Ameritech  Pension  Trust.
Ameritech Pension Trust's  complaint sought (1)  approximately  $20.9 million on

                              6
<PAGE>

the ERISA  claim,  and (2) in excess  of $70  million  on the RICO and state law
claims as well as other relief.  In various  decisions  between  August 1993 and
July 1999, the courts hearing the case have dismissed all of the  allegations in
the complaint against the Salomon entities.  In October 1999, Ameritech appealed
to the U.S.  Supreme Court and in January 2000, the Supreme Court agreed to hear
the case.  The appeal seeks review of the decision of the U.S.  Court of Appeals
for the Seventh  Circuit that dismissed the sole  remaining  ERISA claim against
the Salomon entities.
     Both the Department of Labor and the Internal  Revenue Service ("IRS") have
advised SBI that they were or are reviewing the  transactions in which Ameritech
Pension  Trust  acquired  such  participations.  With respect to the IRS review,
SSBHI,  SBI and SBRC have  consented to extensions of time for the assessment of
excise taxes that may be claimed to be due with respect to the  transactions for
the years 1987,  1988 and 1989.  As of the date of this report,  the IRS has not
issued such 30-day letters to SSBHI, SBI or SBRC.
     In December  1996, a complaint  seeking  unspecified  monetary  damages was
filed by Orange County,  California against numerous brokerage firms,  including
SSB,  in the U.S.  Bankruptcy  Court for the  Central  District  of  California.
(County  of  Orange et al. v. Bear  Stearns  & Co.  Inc.  et al.) The  complaint
alleged,  among other things,  that the  brokerage  firms  recommended  and sold
unsuitable  securities to Orange County.  SSB and the remaining  brokerage firms

                                   7
<PAGE>

settled with Orange County in mid 1999.
     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.  In May 1999, the Court denied SSB's motion to dismiss,  but
stayed the litigation because the matter was not ripe. In March 2000,  the  city
filed a notice of discontinuance dismissing the complaint.
     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
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 connection with the Louisiana and Florida matters,  the IRS and SEC have
been  conducting  an  industry-wide  investigation  into the pricing of Treasury
securities in advanced refunding transactions.

                              8
<PAGE>


         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  allegations,  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  15c1-2,  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 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.).  The complaint  included  allegations  that,  while
acting as prime  broker for the hedge fund,  SSB  breached  its  contracts  with
plaintiffs,  misused their monies, and engaged in tortious  (wrongful)  conduct,
including  breaching  its fiduciary  duties.  SSB asked the court to dismiss the
complaint  in full.  In  October  1999,  the court  dismissed  the tort  claims,
including the breach of fiduciary  duty claims.  The court allowed the breach of
contract and misuse of money  claims to stand.  In December  1999,  SSB filed an
answer and asserted counterclaims against the investment advisor. In response to
plaintiff's motion to strike the counterclaims, in January 2000, SSB amended its

                         9

<PAGE>

counterclaims  against  the  investment  advisor  to  seek  indemnification  and
contribution. Plaintiffs moved to strike SSB's amended counterclaims in February
2000. SSB will continue to contest this lawsuit vigorously.
         In the  course of its  business,  SSB,  as a major  futures  commission
merchant and  broker-dealer is a party to various claims and routine  regulatory
investigations  and proceedings  that the general partner believes do not have a
material  effect on the business of SSB. 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, 1999  was 1,081.
          (c) Distribution.  The Partnership did not declare  a  distribution in
              1999 or 1998.
          (d) Use of Proceeds. There were no additional sales in the years ended
              December 31, 1999, 1998 and 1997.

                              10


<PAGE>


Item 6. Selected Financial Data. The Partnership commenced trading operations on
August 9, 1996.  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, 1999,  1998,  1997 and for the period from August 9, 1996  (commencement  of
trading  operations) to December 31, 1996 and total assets at December 31, 1999,
1998, 1997 and 1996 were as follows:

<TABLE>
<CAPTION>
<S>                                                      <C>             <C>             <C>            <C>
                                                         1999              1998          1997           1996
                                                     -----------      -----------    -----------  -------------
Realized and unrealized trading gains
 (losses) net of brokerage  commissions and
 clearing fees of $934,444, $914,741, $958,141 and
 $346,364, respectively                              $ (1,722,069)   $  2,010,123   $    372,990   $  2,812,357

Realized and unrealized gains
 (losses) on  Zero Coupons                             (1,058,378)        644,098        429,903         80,764

Interest income                                         1,106,132       1,126,341      1,212,251        434,374
                                                     ------------    ------------   ------------   ------------

                                                     $ (1,674,315)   $  3,780,562   $  2,015,144   $  3,327,495
                                                     ============    ============   ============   ============

Net income (loss)                                    $ (2,130,054)   $  3,174,331   $  1,359,429   $  2,717,561
                                                     ============    ============   ============   ============

Increase (decrease) in
 net asset value per unit                            $    (133.74)   $     186.29   $      68.65   $     135.20
                                                     ============    ============   ============   ============

Total assets                                         $ 19,486,036    $ 23,386,690   $ 23,217,865   $ 23,276,499
                                                     ============    ============   ============   ============
</TABLE>


                                                  11
<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  futures  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  contracts 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.

                                   12
<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

                                   13
<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  futures  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  occurrence of any event which shall make it unlawful for

                              14
<PAGE>


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  futures 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 futures 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

                              15
<PAGE>


period.  Beginning  with the first full quarter ending at least six months after
trading commences (March 31, 1997), 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, 1999, 1,497 Units were redeemed
totaling  $1,960,998.  For the year ended  December 31,  1998,  2,130 Units were
redeemed  totaling  $2,542,381.  During 1998,  SSB received  redemption  fees of
$8,992. For the year ended December 31, 1997, 1,132 Units were redeemed totaling
$1,310,786. During 1997, SSB received redemption fees of $19,277. Redemption Net
Asset Value  differs from Net Asset Value  calculated  for  financial  reporting
purposes  in that the  accrued  liability  for  reimbursement  of  offering  and
organization  expenses will not be included in the calculation of Redemption Net
Asset Value.
         Offering and organization expenses of $541,205 relating to the issuance
and marketing of Units offered were initially paid by SSB. The accrued liability
for  reimbursement  of offering and  organization  expenses  will not reduce Net
Asset Value per Unit for any purpose (other than financial reporting), including
calculation of advisory and brokerage  fees and the  redemption  value of Units.

                              16
<PAGE>

Interest  earned  by the  Partnership  will  be used  to  reimburse  SSB for the
offering and organization expenses of the Partnership plus interest at the prime
rate quoted by The Chase  Manhattan  Bank until such time as such  expenses  are
fully  reimbursed.  As of December 31, 1998, the  Partnership had reimbursed SSB
for the offering and  organizational  expenses  plus  interest at the prime rate
quoted by the Chase  Manhattan  Bank totaling  $38,261 from interest paid to the
Partnership.
         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, 1999, the
Net Asset Value per Unit  decreased  9.8% from  $1,362.28 to $1,228.54.  For the
year ended December 31, 1998, the Net Asset Value per Unit increased  15.8% from
$1,175.99 to  $1,362.28.  For the year ended  December  31, 1997,  the Net Asset
Value per Unit increased 6.2% from $1,107.34 to $1,175.99.  The redemption value
per unit at December  31, 1999,  1998 and 1997 were  $1,228.54,  $1,362.28,  and
$1,180.06, respectively.
         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,

                              17
<PAGE>

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.
         The  Partnership  experienced  net trading gains of $2,924,864,  before
commissions  and expenses in 1998.  These gains were  attributable to trading in
energy  and U.S.  and  non-U.S.  interest  rates  products  offset  by losses in
currencies,  grains,  livestock,  metals,  softs and  indices.  The  Partnership
experienced unrealized  appreciation of $565,392 on Zero Coupons during 1998 and
a gain on the sale of Zero Coupons of $78,706 during 1998.
         The  Partnership  experienced  net trading gains of  $1,331,131  before
commissions  and  expenses  for the year ended  December  31,  1997.  Gains were
attributable to the trading of commodity futures in foreign currencies,  grains,
non-U.S.  interest rates, metals, softs and indices and were partially offset by
losses  experienced in the trading of energy products,  U.S.  interest rates and
livestock.  The Partnership  experienced unrealized  appreciation of $415,817 on
Zero  Coupons  during  1997 and a gain on the sale of Zero  Coupons  of  $14,086
during 1997.
         Commodity futures 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  existence  of major  price  trends and the  ability of the  Advisors  to
identify  those price trends  correctly.  Price trends are  influenced by, among

                              18
<PAGE>

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
Technological Risk - the risk of loss attributable to technological  limitations
or hardware failure that constrain the Partnership's ability to gather, process,

                                   19
<PAGE>

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.

Risk of Computer System Failure (Year 2000 Issue)
         SSBHI's computer systems and business  processes  successfully  handled
the date change from December 31, 1999 to January 1, 2000. SSBHI is not aware of
any  significant  year 2000  problems  encountered  internally or with the third
parties with which it interfaces,  including customers and  counterparties,  the
global financial market infrastructure,  and the utility infrastructure on which
all corporations rely.
         Based on operations  since  January 1, 2000,  SSBHI does not expect any

                                   20
<PAGE>


significant  impact to its ongoing  business as a result of the year 2000 issue.
However,  it is  possible  that the full impact of year 2000 issues has not been
fully recognized and no assurances can be given that year 2000 problems will not
emerge.
         The pretax costs  associated  with required  system  modifications  and
conversions totaled approximately $130 million.  These costs were funded through
operating cash flow and expensed in the period in which they were incurred.
                  The expenditures and the General Partner's resources dedicated
to the preparation for Year 2000 did not have a material impact on the operation
or results of the Partnership.
                  The most likely and most  significant  risk to the Partnership
associated  with the lack of Year  2000  readiness  is the  failure  of  outside
organizations,  including the commodities exchanges, clearing organizations,  or
regulators  with which the  Partnership  interacts  to  resolve  their Year 2000
issues in a timely  manner.  This risk could  involve the inability to determine
the value of the  Partnership  at some  point in time and would  make  effecting
purchases  or  redemptions  of Units in the  Partnership  infeasible  until such
valuation was determinable.
         (e)      New Accounting Pronouncements
         The Partnership adopted Statement on Financial Accounting Standards No.
133 ("SFAS 133"),  Accounting For Derivative  Financial  Instruments and Hedging
Activities,  on January 1, 1999. SFAS 133 requires that an entity  recognize all
derivative instruments in the statement of financial condition and measure those
financial instruments at fair value. SFAS 133 has no impact on Partners' Capital


                              21
<PAGE>


and operating results as all derivative  instruments are recorded at fair value,
with changes therein reported in the statement of income and expenses.
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
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


                              22
<PAGE>

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
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).

                              23
<PAGE>


         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  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.

                              24
<PAGE>

         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  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, 1999. All
open position  trading risk exposures of the  Partnership  have been included in
calculating  the  figures  set  forth  below.  As  of  December  31,  1999,  the
Partnership's total capitalization was $18,847,102.

<TABLE>
<CAPTION>
<S>                           <C>        <C>               <C>            <C>

                                December 31, 1999
                                                             Year to Date
                                         % of Total        High           Low
Market Sector          Value at Risk  Capitalization   Value at Risk   Value at Risk
--------------------------------------------------------------------------------
Currencies
 - Exchange Traded        $  257,696      1.37%        $ 238,141    $ 175,309
 - OTC Contracts             226,009      1.20%          372,478      110,492
Energy                       296,300      1.57%          346,300      234,800
Grains                        37,750      0.20%           69,300       31,800
Interest rates U.S           196,000      1.04%          301,400      138,000
Interest rates Non-U.S       297,920      1.58%          787,846      376,063
Livestock                     18,400      0.10%           46,400        8,000
Metals                       232,000      1.23%          359,300      128,900
Softs                        163,067      0.86%          213,689       75,212
Indices                      107,371      0.57%          286,160      286,160
                          ----------      ----
Total                     $1,832,513      9.72%
                          ==========      ====
</TABLE>


                                             26
<PAGE>


As of December 31, 1998, the Partnership's total capitalization was $22,938,154.

                           December 31, 1998
                                       % of Total
Market Sector         Value at Risk  Capitalization

Currencies                $ 89,101      0.39%
Energy                      84,000      0.37%
Grains                      22,300      0.10%
Interest rates U.S         115,800      0.50%
Interest rates Non-U.S     517,604      2.26%
Metals                      81,000      0.35%
Softs                       69,854      0.30%
                          --------      ----
Total                     $979,959      4.27%
                          ========      ====

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.

                              27
<PAGE>

         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.  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

                                   28
<PAGE>

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
         The  following   were  the  primary   trading  risk  exposures  of  the
Partnership as of December 31, 1999, 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. The changes in interest rates which have the most effect
on the  Partnership are changes in long-term,  as opposed to short-term,  rates.
Consequently,  even a material  change in  short-term  rates  would have  little
effect on the Partnership were the medium- to long-term rates to remain steady.

                                   29
<PAGE>


         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
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, 1999,  the  Partnership's  primary  exposures  were in the S&P 500,
Financial  Times  (England),  Nikkei  (Japan)  and Hang Seng (Hong  Kong)  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

                              30
<PAGE>

will from time to time  trade base  metals  such as  aluminum  and  copper,  the
principal  market  exposures of the Partnership  have  consistently  been in the
precious  metals,   gold  and  silver.  The  Advisors'  gold  trading  has  been
increasingly  limited due to the long-lasting and mainly non-volatile decline in
the  price of gold  over the last  10-15  years.  However,  silver  prices  have
remained  volatile  over this period,  and the  Advisors  have from time to time
taken  substantial  positions as they have  perceived  market  opportunities  to
develop.  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,
1999.
     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, 1999.
     Foreign Currency  Balances.   The Partnership's  primary  foreign  currency
balances are in Japanese yen, German  marks,  British  pounds and French francs.

                                     31

<PAGE>

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
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  programs  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.


                                   32
<PAGE>

         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, 1999 and 1998.                             F-4

    Statement of Income and Expenses for
    the year ended December 31, 1999, 1998
    and 1997.                                               F-5

    Statement of Partners' Capital for
    the years ended December 31, 1999, 1998
    and 1997.                                               F-6

    Notes to Financial Statements.                       F-7 -  F-11





                                       F-1

                                    Continued


<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 A. Dantuono, Chief Financial Officer
     Smith Barney Futures Management LLC
     General Partner, Smith Barney Principal PLUS
        Futures Fund L.P. II

     Smith Barney Futures Management LLC
     390 Greenwich Street
     1st 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  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, 1999 and 1998,  and the
results  of its  operations  for each of the  three  years in the  period  ended
December 31, 1999, in conformity with accounting  principles  generally accepted
in the United States.  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,  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 the
opinion expressed above.



                                                      PricewaterhouseCoopers LLP

New York, New York
February 25, 2000



                              F-3
<PAGE>


                           Smith Barney Principal PLUS
                              Futures Fund L.P. II
                        Statement of Financial Condition
                           December 31, 1999 and 1998

                                                        1999            1998
Assets:
Equity in commodity futures trading account:
   Cash (Note 3c)                                   $ 6,813,826   $ 8,835,664
   Net unrealized appreciation on open
    futures contracts                                   313,668       903,705
   Zero coupons,  $15,341,000 and
    $16,838,000 principal amount in 1999 and
    1998, respectively, due November 15, 2003, at
    fair  value  (amortized  cost
    $12,033,954 and $12,384,517 in 1999 and
    1998, respectively) (Notes 1 and 2)              12,011,850    13,446,490
                                                    -----------   -----------
                                                     19,139,344    23,185,859
   Receivable from SSB on sale of zero coupons          322,229       174,309
   Interest Income                                       24,463        26,522
                                                    -----------   -----------
                                                    $19,486,036   $23,386,690
                                                    -----------   -----------
Liabilities and Partners' Capital:
Liabilities:
  Accrued expenses:
   Commissions                                      $    62,619   $    77,866
   Management fees                                       27,821        35,086
   Professional fees                                     34,761        28,314
   Other                                                  7,575         8,931
  Redemptions payable                                   506,158       298,339
                                                    -----------   -----------
                                                        638,934       448,536
                                                    -----------   -----------
Partners' capital (Notes 1, 5, and 7):
  General Partner, 203 Unit equivalents
   outstanding in 1999 and 1998                         249,394       276,543
  Limited Partners, 15,138 and 16,635 Units
   of Limited Partnership Interest outstanding
   in 1999 and 1998, respectively                    18,597,708    22,661,611
                                                    -----------   -----------
                                                     18,847,102    22,938,154
                                                    -----------   -----------
                                                    $19,486,036   $23,386,690
                                                    -----------   -----------

See notes to financial statements.

                                        F-4
<PAGE>


                              Smith Barney Principal PLUS
                                 Futures Fund L.P. II
                           Statement of Income and Expenses
                 for the years ended December 31, 1999, 1998 and 1997


 <TABLE>
<CAPTION>
<S>                                                                 <C>                 <C>            <C>
                                                                     1999            1998            1997
Income:
  Net gains (losses) on trading of commodity interests:
   Realized gains (losses) on closed positions                   $  (197,588)   $ 2,741,433    $   852,313
   Change in unrealized gains (losses) on open positions            (590,037)       183,431        478,818
                                                                 -----------    -----------    -----------
                                                                    (787,625)     2,924,864      1,331,131
  Less, Brokerage commissions including clearing fees of
   $25,058, $19,687 and $16,092, respectively (Note 3c)             (934,444)      (914,741)      (958,141)
                                                                 -----------    -----------    -----------
  Net realized and unrealized gains (losses)                      (1,722,069)     2,010,123        372,990
  Gains on sale of zero coupons                                       25,699         78,706         14,086
  Unrealized appreciation (depreciation) on zero coupons          (1,084,077)       565,392        415,817
  Interest income (Notes 2c, 3c and 6)                             1,106,132      1,126,341      1,212,251
                                                                 -----------    -----------    -----------
                                                                  (1,674,315)     3,780,562      2,015,144
                                                                 -----------    -----------    -----------
Expenses:
  Management fees (Note 3b)                                          387,055        384,863        404,339
  Incentive fees (Note 3b)                                            20,500        167,031        191,624
  Professional fees                                                   38,693         41,032         42,447
  Other expenses                                                       9,491         13,305         17,305
                                                                 -----------    -----------    -----------
                                                                     455,739        606,231        655,715
                                                                 -----------    -----------    -----------
Net income (loss)                                                $(2,130,054)   $ 3,174,331    $ 1,359,429
                                                                 -----------    -----------    -----------

Net income (loss) per Unit of Limited Partnership Interest and
  General Partner Unit equivalent (Notes 1 and 7)                $   (133.74)   $    186.29    $     68.65
                                                                 -----------    -----------    -----------
</TABLE>

See notes to financial statements.

                                        F-5
<PAGE>


                              Smith Barney Principal PLUS
                                 Futures Fund L.P. II
                  Statement of Partners' Capital for the years ended
                           December 31, 1999, 1998 and 1997



<TABLE>
<CAPTION>
<S>                                                             <C>              <C>            <C>
                                                           Limited Partners   General Partner     Total

Partners' capital at December 31, 1996                      $ 22,032,771    $    224,790    $ 22,257,561
Net income                                                     1,345,493          13,936       1,359,429
Redemption of 1,132 Units of Limited Partnership Interest     (1,310,786)           --        (1,310,786)
                                                            ------------    ------------    ------------
Partners' capital at December 31, 1997                        22,067,478         238,726      22,306,204
Net income                                                     3,136,514          37,817       3,174,331
Redemption of 2,130 Units of Limited Partnership Interest     (2,542,381)           --        (2,542,381)
                                                            ------------    ------------    ------------
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
                                                            ------------    ------------    ------------
</TABLE>

See notes to financial statements.

                                   F-6
<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"). Between April 3, 1996 (commencement
    of offering period) and August 8, 1996, 19,896 Units of Limited  Partnership
    Interest  ("Units")  were  sold at  $1,000  per Unit.  The  proceeds  of the
    offering were held in an escrow  account until August 9, 1996, at which time
    they were turned over to the  Partnership  for trading.  The Partnership was
    authorized  to  sell  60,000  Units  during  the  offering   period  of  the
    Partnership. Smith Barney Futures Management LLC acts as the general partner
    (the "General Partner") of the Partnership.  The General Partner changed its
    form of organization  from a corporation to a limited  liability  company on
    October 1, 1999. 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 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.

                                F-7
<PAGE>
                           Smith Barney Principal PLUS
                              Futures Fund L.P. II
                          Notes to Financial Statements

    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.
    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 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 John W. Henry & Company,  Inc.  ("JWH")  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 JWH a monthly
       management  fee of 1/3  of 1% (4%  per  year)  of  month-end  Net  Assets
       allocated to it. The Partnership  will also pay Willowbridge an incentive
       fee payable quarterly equal to 20% of New Trading Profits,  as defined in
       the Management Agreements,  earned by it for the Partnership and JWH will
       receive an incentive fee of 15% of the New Trading Profits.
    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, 1999 and 1998,  the amount of cash held for
       margin requirements was $2,228,172 and $1,083,052, 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-8
<PAGE>
                           Smith Barney Principal PLUS
                              Futures Fund L.P. II
                          Notes to Financial Statements

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, 1999 and 1998,
    based on a monthly calculation, was $855,578 and $982,632, respectively. The
    fair value of these  commodity  interests,  including  options  thereon,  if
    applicable,  at  December  31,  1999  and 1998 was  $313,668  and  $903,705,
    respectively, as detailed below.

                                          Fair Value
                                   December 31,  December 31,
                                      1999          1998
Currencies:
  -Exchange Traded Contracts       $  83,435    $  (6,300)
  -OTC Contracts                     (72,633)      24,255
Energy                                41,632       27,010
Grains                                (3,896)      27,312
Interest Rates U.S.                  163,531      (65,138)
Interest Rates Non-U.S               (42,138)     818,733
Livestock                             (4,260)        --
Metals                                53,025       33,623
Softs                                 74,572       44,210
Indices                               20,400         --
                                   ---------    ---------
Total                              $ 313,668    $ 903,705
                                  -----------  ----------

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  commences  (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.  During 1998 and 1997, SSB received  redemption  fees of $8,992 and
    $19,277.  There were no redemption fees charged during 1999.  Redemption Net
    Asset Value differs from Net Asset Value calculated for financial  reporting
    purposes in that the accrued  liability  for  reimbursement  of offering and
    organization  expenses will not be included in the calculation of Redemption
    Net Asset Value.

6.  Offering and Organization Costs:
    Offering and organization  expenses of $541,205 relating to the issuance and
    marketing of Units offered were initially paid by SSB. The accrued liability
    for reimbursement of offering and organization  expenses will not reduce Net
    Asset  Value per Unit for any  purpose  (other  than  financial  reporting),
    including  calculation  of advisory and  brokerage  fees and the  redemption
    value of Units. Interest earned by the Partnership was used to reimburse SSB

                              F-9
<PAGE>
                           Smith Barney Principal PLUS
                              Futures Fund L.P. II
                          Notes to Financial Statements

    for the offering and organization  expenses of the Partnership plus interest
    at the prime rate quoted by the Chase Manhattan Bank until such time as such
    expenses were fully reimbursed.  As of December 31,1998, the Partnership had
    reimbursed SSB for the offering and  organization  expenses plus interest at
    the prime rate quoted by Chase Manhattan Bank totaling $38,261 from interest
    paid to the Partnership.

7.  Net Asset Value Per Unit:
    Changes  in the net asset  value per Unit of  Partnership  interest  for the
    years ended December 31, 1999, 1998 and 1997 were as follows:

<TABLE>
<CAPTION>

                                                            1999         1998          1997
<S>                                                          <C>          <C>           <C>

Net realized and unrealized gains (losses)              $  (109.18)    $ 120.90   $    18.91
Realized and unrealized appreciation (depreciation)
 on Zero Coupons                                            (64.64)       36.63        22.05
Interest income                                              68.06        63.05        61.06
Expenses                                                    (27.98)      (34.29)      (33.37)
                                                          ---------    ---------    ---------
Increase (decrease) for period                             (133.74)      186.29        68.65
Net asset value per Unit, beginning of period             1,362.28     1,175.99     1,107.34
                                                         ---------    ---------    ---------
Net asset value per Unit, end of period               $   1,228.54  $  1,362.28  $  1,175.99
                                                         ---------    ---------    ---------
Redemption value per Unit, end of period*             $   1,228.54  $  1,362.28  $  1,180.06
                                                         ---------    ---------    ---------
</TABLE>

------------------
    *For the purpose of a redemption, any accrued liability for reimbursement of
    offering and  organization  expenses  will not reduce  redemption  net asset
    value per Unit.

8.  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.

9.  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

                                   F-10
<PAGE>

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

    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  (see table in Note
    4). The Partnership's  risk of loss in the event of counterparty  default is
    typically  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  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, 1999. However, due to the
    nature of the Partnership's  business,  these instruments may not be held to
    maturity.
10.      New Accounting Pronouncements:
    The Partnership adopted Statement on Financial  Accounting Standards No. 133
    ("SFAS 133"),  Accounting for Derivative  Financial  Instruments and Hedging
    Activities,  on January 1, 1999. SFAS 133 requires that an entity  recognize
    all  derivative  instruments  in the  statement of financial  condition  and
    measure those financial instruments at fair value. SFAS 133 has no impact on
    Partners'  Capital and operating  results as all derivative  instruments are
    recorded at fair value,  with changes  therein  reported in the statement of
    income and expenses.

                                   F-11


<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 $934,444 were paid for
the year ended  December  31,  1999.  Management  fees of $387,055  were paid or
payable to the  Advisors  for the year ended  December  31,  1999.  In addition,
incentive  fees of $20,500 were paid to the Advisors for the year ended December
31, 1999.

                                        34

<PAGE>


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.
           (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  partnership interest equivalent
to 203 (1.3%) Units of Limited  Partnership  Interest as of December 31, 1999.
           (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, 1999
                           and 1998.
                           Statement  of Income and Expenses for the years ended
                           December  31,  1999,  1998  and  1997.  Statement  of
                           Partners'  Capital for the years ended  December  31,
                           1999, 1998 and 1997.


                                        35
<PAGE>


              (2) Financial Statement Schedules: Financial Data Schedule for the
                  year ended December 31, 1999.
              (3) Exhibits:
              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).


                                        36

<PAGE>

              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).
              10.7-        Letters  extending Management Agreements with John W.
                           Henry &  Company,  Inc.  and Willowbridge  Associates
                           Inc. (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) 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 30th day of March 2000.


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/     Jack H. Lehman III
David J. Vogel                                      Jack H. Lehman III
Director, Principal Executive                       Chairman and Director
                                                    Officer and President



/s/  Michael R. Schaefer                            /s/   Daniel A. Dantuono
Michael R. Schaefer                                 Daniel A. Dantuono
Director                                            Treasurer, Chief Financial
                                                    Officer and Director



/s/ Daniel R. McAuliffe, Jr.                         /s/    Steve J. Keltz
Daniel R. McAuliffe, Jr.                             Steve J. Keltz
Director                                             Secretary and Director



/s/ Shelley Ullman
Shelley Ullman
Director
                                        39