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 0-28350


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

               New York                              13-3823300
     (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
$26,840,878 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.  (the  "Partnership")  is a limited  partnership  organized on
January  25,  1993  under the  Partnership  Law of the State of New York and was
capitalized on April 12, 1995. No activity occurred between January 25, 1993 and
April 12, 1995.  The  Partnership  engages in  speculative  trading of commodity
interests, including forward contracts on foreign currencies,  commodity options
and commodity  futures  contracts  including  futures contracts on United States
Treasuries and certain other financial instruments, foreign currencies and stock
indices. The commodity interests that are traded by the Partnership are volatile
and involve a high degree of market risk. The Partnership maintains a portion of
its assets in interest  payments  stripped  from U.S.  Treasury  Bonds under the
Treasury's  STRIPS program ("Zero  Coupons") which payments will be due February
15, 2003. The  Partnership  uses the Zero Coupons and its other assets to margin
its commodities account.
         A total  of  100,000  Units  of  Limited  Partnership  Interest  in the
Partnership (the "Units") were offered to the public.  Between July 12, 1995 and
November  16,  1995,  37,131  Units  were sold to the public at $1,000 per Unit.
Proceeds  of the  offering  along with the  General  Partner's  contribution  of
$376,000 were held in escrow until  November 17, 1995 at which time an aggregate
of $37,507,000 were turned over to the Partnership and the Partnership commenced
trading operations.

                                       2
<PAGE>

         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  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"),
Rabar Market Research,  Inc. and Fort Orange Capital  Management  (collectively,
the "Advisors").  None 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 each Advisor a monthly


                                       3
<PAGE>

management  fee equal to 1/6 of 1% (2% per year) of month-end Net Assets (except
JWH,  which  will  receive a monthly  management  fee equal to 1/3 of 1% (4% per
year)) of the Partnership  allocated to each Advisor.  The Partnership will also
pay Fort Orange Capital  Management an incentive fee payable  quarterly equal to
20% of New Trading Profits earned by it for the Partnership; JWH will receive an
incentive fee payable quarterly of 15% of the New Trading Profits (as defined in
the  Management  Agreements);  and Rabar Market  Research  Inc.  will receive an
annual incentive fee of 22.5% of New Trading Profits of the Partnership.
         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. Reference should
be made to "Item 8. Financial  Statements and  Supplementary  Data." for further
information  regarding  the brokerage  commissions  included in the notes to the
financial statements.


                                       4
<PAGE>

         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
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 (February, 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 (including, but not limited to, futures contracts, options and forward
contracts on U.S. Treasuries,  other financial instruments,  foreign currencies,
stock  indices and physical  commodities).  The  Partnership  does not engage in
sales of goods or services. The Partnership's net income from operations for the

                                       5
<PAGE>

year ended December 31, 1999,  1998, 1997, 1996 and for the period from November
17, 1995 (commencement of trading  operations) to December 31, 1995 is set forth
under "Item 6. Selected Financial Data." Partnership  capital as of December 31,
1999 was $27,189,905.
         (c)  Narrative  description  of business.
              See Paragraphs (a) and (b) above.
             (i) through (x) - Not  applicable.
             (xi) through  (xii) - Not  applicable.
             (xiii)  - The  Partnership  has no employees.
         (d) Financial  Information About Geographic Areas. The Partnership does
not  engage in sales of goods or  services  or own any long  lived  assets,  and
therefore this item is not applicable.
Item 2.  Properties.
         The  Partnership  does not own or lease  any  properties.  The  General
Partner operates out of facilities provided by its affiliate, SSB.
Item 3.  Legal Proceedings.
         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


                                       6
<PAGE>

(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
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 and oral argument will be heard April 17, 2000. 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

                                       7
<PAGE>

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
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.


                                       8
<PAGE>

         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.
         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


                                       9
<PAGE>

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
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.

                                       10
<PAGE>





                                     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 1,065.

               (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.




                                       11
<PAGE>


Item 6. Selected Financial Data. The Partnership commenced trading operations on
November 17, 1995. Realized and unrealized trading gains (losses),  realized and
unrealized gains (losses) on Zero Coupons,  interest  income,  net income (loss)
and increase in net asset value per Unit for the years ended  December 31, 1999,
1998,  1997,  1996 and for the period from  November 17, 1995  (commencement  of
trading  operations) to December 31, 1995 and total assets at December 31, 1999,
1998, 1997, 1996 and 1995 were as follows:


<TABLE>
<CAPTION>
<S>                                    <C>           <C>            <C>              <C>             <C>
                                     1999             1998           1997           1996             1995
                                 ------------    ------------    -------------  ------------    ------------
Realized and unrealized
 trading gains(losses) net of
 brokerage commissions and
  clearing fees of $1,148,676,
  $1,357,927, $1,462,372,
  $1,459,014 and $167,420,
  respectively                   $ (3,003,382)   $  1,234,224   $  2,025,344   $  2,053,372    $  1,908,271
Realized and unrealized
   gains (losses) on
   Zero Coupons                    (1,301,703)        923,712        631,119     (1,226,193)        531,953
  Interest income                   1,563,022       1,710,639      1,916,217      1,935,048         250,172
                                 ------------    ------------   ------------   ------------    ------------
                                 $ (2,742,063)   $  3,868,575   $  4,572,680   $  2,762,227    $  2,690,396
                                 ============    ============   ============   ============    ============
  Net income (loss)              $ (3,247,194)   $  2,968,642   $  3,546,888   $  2,043,139    $  2,227,441
                                 ============    ============   ============   ============    ============
  Increase (decrease) in
   net asset value per unit      $    (129.45)   $     109.40   $     115.33   $      58.96    $      59.38
                                 ============    ============   ============   ============    ============
  Total assets                   $ 29,079,820    $ 35,208,540   $ 36,883,726   $ 40,218,283    $ 40,226,379
                                 ============    ============   ============   ============    ============
</TABLE>


                                       12
<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.

                                       13
<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

                                       14
<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 (February 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

                                       15
<PAGE>

interest;  or (vi) the  occurrence of any event which shall make it unlawful for
the existence of the Partnership to be continued.
(b) Capital resources. (i) The Partnership has  made no material commitments for
capital expenditures.
             (ii)  The  Partnership's   capital  will  consist  of  the  capital
contributions  of the  partners as  increased or decreased by gains or losses on
commodity 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's  Advisors  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.

                                       16
<PAGE>

         No  forecast  can be made as to the level of  redemptions  in any given
period.  Beginning  with the first full quarter ending at least six months after
trading  commences (June 30, 1996), a Limited Partner may cause all of his Units
to be redeemed by the  Partnership  at the Redemption Net Asset Value thereof as
of the last day of a quarter 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.  The last date on which a  redemption  fee was
charged was June 30, 1997. During 1997 and 1996, SSB received redemption fees of
$33,328 and $59,478,  respectively.  For the year ended December 31, 1999, 3,123
Units were redeemed totaling  $3,837,307.  For the year ended December 31, 1998,
3,400 Units were redeemed totaling  $4,290,639.  For the year ended December 31,
1997, 5,459 Units were redeemed totaling $6,204,189.
         Offering  and  organization  expenses  relating  to  the  issuance  and
marketing of Units  offered  were  initially  paid by SSB.  Such  expenses  were
initially  estimated to be $550,000 and were charged against the initial capital
of  the  Partnership.   During  1996,  the  Partnership's   total  offering  and
organization expense were determined to be $612,847. The Partnership has charged
the excess of $62,847 to expense.  As of December 31, 1997, the  Partnership had
reimbursed  SSB for the offering and  organization  expense plus interest at the
prime rate quoted by the Chase  Manhattan  Bank  totaling  $34,494 from interest
paid to the Partnership.

                                       17
<PAGE>

         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  9.7% from  $1,328.41 to $1,198.96.  For the
year ended  December 31, 1998 the net asset value per Unit  increased  9.0% from
$1,219.01 to $1,328.41. For the year ended December 31, 1997 the net asset value
per Unit increased 10.4% from $1,103.68 to $1,219.01.
         The  Partnership  experienced  net trading losses of $1,854,706  before
commissions  and  expenses for the year ended  December  31,  1999.  Losses were
primarily attributable to the trading of commodity futures in livestock,  softs,
metals,  U.S. and non- U.S.  interest rates and were  partially  offset by gains
recognized  in  indices,   currencies  and  energy  products.   The  Partnership
experienced a realized loss of $11,715 on Zero Coupons liquidated in conjunction
with  the  redemption  of  Units  during  1999 and  unrealized  depreciation  of
$1,289,988 on Zero Coupons during 1999.
         The  Partnership  experienced  net trading gains of  $2,592,151  before
commissions  and  expenses  for the year ended  December  31,  1998.  Gains were

                                       18
<PAGE>

primarily  attributable to the trading of commodity futures in U.S. and non-U.S.
interest  rates,  livestock  and energy  products and were  partially  offset by
losses recognized in grains, currencies, indices, metals and softs products. The
Partnership experienced a realized gain of $82,242 on Zero Coupons liquidated in
conjuction with the redemption of Units during 1998 and unrealized  appreciation
of $841,470 on Zero Coupons during 1998.
         The  Partnership  experienced  net trading gains of  $3,487,716  before
commissions  and  expenses  for the year ended  December  31,  1997.  Gains were
primarily attributable to the trading of commodity futures in currencies, softs,
grains,  indices,  metals and interest rates and were partially offset by losses
recognized  in livestock  and energy  products.  The  Partnership  experienced a
realized  loss of $93,506 on Zero Coupons  liquidated  in  conjunction  with the
redemption of Units during 1997 and unrealized  appreciation of $724,625 on Zero
Coupons 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
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


                                       19
<PAGE>

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,
and communicate information efficiently and securely, without interruption, with
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


                                       20
<PAGE>

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  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.

                                       21
<PAGE>

                  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 the  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.

                                       22
<PAGE>


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 effects among the Partnership's open positions and the liquidity
of the markets in which it trades.
         The  Partnership  rapidly  acquires and liquidates  both long and short
positions in a wide range of different markets. Consequently, it is not possible
to predict how a particular future market scenario will affect performance,  and
the Partnership's  past performance is not necessarily  indicative of its future
results.
         Value at Risk is a measure of the maximum amount which the  Partnership
could  reasonably  be expected to lose in a given market  sector.  However,  the


                                       23
<PAGE>

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).
         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

                                       24
<PAGE>

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.
         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


                                       25
<PAGE>

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.

                                       26
<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 $27,189,905.


<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
-OTC Contracts               $  249,863      0.92%           $  321,852   $  223,737
-Exchange Traded Contracts      182,954      0.67%              323,143       77,774
Energy                           54,000      0.20%              207,127       72,040
Grains                           32,540      0.12%              106,083       25,175
Interest rates U.S.              94,220      0.35%              287,200       98,951
Interest rates Non-U.S          234,971      0.86%              981,372      393,328
Livestock                        12,450      0.05%               19,020        6,414
Metals                          342,750      1.26%              351,000      203,240
Softs                            44,200      0.16%               81,500       36,200
Indices                         412,109      1.52%              827,809      198,257
Lumber                            2,200      0.01%                9,600        3,200
                              ----------     -----
Total                        $1,662,257      6.12%
                             ==========      =====
</TABLE>


                                       27
<PAGE>


         As of December 31, 1998, the  Partnership's  total  capitalization  was
$34,274,406.

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

Currencies
-OTC Contracts               $  133,688      0.39%
-Exchange Traded Contracts      169,675      0.50%
Energy                          127,800      0.37%
Grains                           92,458      0.27%
Interest rates U.S.             154,200      0.45%
Interest rates Non-U.S          918,655      2.68%
Livestock                        35,975      0.10%
Metals                          250,000      0.73%
Softs                            71,362      0.21%
Indices                          31,284      0.09%
                             ----------      ----
Total                        $1,985,097      5.79%
                             ==========      ====


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."


                                       28
<PAGE>
Non-Trading Risk
         The  Partnership  has  non-trading  market  risk  on its  foreign  cash
balances not needed for margin.  However,  these balances (as well as any market
risk they represent) are immaterial.
         Materiality  as used in this  section,  "Qualitative  and  Quantitative
Disclosures About Market Risk," is based on an assessment of reasonably possible
market movements and the potential losses caused by such movements,  taking into
account the leverage,  optionality and multiplier  features of the Partnership's
market sensitive instruments.
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


                                       29
<PAGE>

many  other  factors  could  result in  material  losses as well as in  material
changes to the risk exposures and the management  strategies of the Partnership.
There can be no assurance that the Partnership's  current market exposure and/or
risk  management  strategies  will  not  change  materially  or  that  any  such
strategies will be effective in either the short- or long- term.  Investors must
be  prepared  to  lose  all or  substantially  all of  their  investment  in the
Partnership
                    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.


                                       30
<PAGE>

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.
                    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.)


                                       31
<PAGE>

                    Metals.  The Partnership's  primary metal market exposure is
to  fluctuations  in the  price  of gold and  silver.  Although  certain  of the
Advisors  will from time to time trade base metals such as aluminum  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.



                                       32
<PAGE>


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.  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 securities  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

                                       33
<PAGE>

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.
         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.



                                       34
<PAGE>





Item 8.    Financial Statements and Supplementary Data.




                  SMITH BARNEY PRINCIPAL PLUS FUTURES FUND L.P.
                          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 years 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.

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.

     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.:

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. 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.
                        Statement of Financial Condition
                           December 31, 1999 and 1998

<TABLE>
<CAPTION>
<S>                                                               <C>          <C>
                                                                 1999          1998
Assets:
Equity in commodity futures trading account:
   Cash (Note 3c)                                           $ 8,748,980   $12,186,981
   Net unrealized appreciation on open
   futures contracts                                            478,762     1,350,548
   Zero coupons,  $22,678,000 and $25,801,000 principal
   amount in 1999 and 1998, respectively, due February 15,
   2003   at  fair  value (amortized  cost
   $18,971,524 and $20,356,124 in 1999 and 1998,
   respectively) (Notes 1 and 2)                             18,629,297    21,303,885
  Commodity options owned,
  at market value (cost $22,793)                                  8,409          --
                                                            -----------   -----------
                                                             27,865,448    34,841,414
  Receivable from SSB on sale of zero coupons                 1,184,588       330,440
  Interest receivable                                            29,784        36,686
                                                            -----------   -----------
                                                            $29,079,820   $35,208,540
                                                            -----------   -----------

Liabilities and Partners' Capital:
Liabilities:
  Accrued expenses:
   Management fees                                          $    32,020   $    47,621
   Commissions                                                   79,735       109,341
   Incentive fees                                                  --         203,874
   Professional fees                                             38,284        31,230
   Other                                                          9,777         9,376
  Redemptions payable                                         1,730,099       532,692
                                                            -----------   -----------
                                                              1,889,915       934,134
                                                            -----------   -----------
Partners' Capital (Notes 1, 5, and 6):
  General Partner, 376 Unit equivalents
  outstanding in 1999 and 1998                                  450,809       499,482
Limited Partners, 22,302 and 25,425 Units
  of Limited Partnership Interest outstanding
  in 1999 and 1998, respectively                             26,739,096    33,774,924
                                                            -----------   -----------
                                                             27,189,905    34,274,406
                                                            -----------   -----------
                                                            $29,079,820   $35,208,540
                                                             -----------   -----------
</TABLE>

See notes to financial statements.

                                                      F-4
<PAGE>


                           Smith Barney Principal PLUS
                                Futures Fund L.P.
                        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               $  (968,536)   $ 2,321,215    $ 2,851,564
   Change in unrealized gains (losses) on open positions        (886,170)       270,936        636,152
                                                             -----------    -----------    -----------
                                                              (1,854,706)     2,592,151      3,487,716
  Less, Brokerage commissions including clearing fees of
   $33,604, $39,374 and $37,258, respectively (Note 3c)       (1,148,676)    (1,357,927)    (1,462,372)
                                                             -----------    -----------    -----------
  Net realized and unrealized gains (losses)                  (3,003,382)     1,234,224      2,025,344
  Gains (losses) on sale of zero coupons                         (11,715)        82,242        (93,506)
  Unrealized appreciation (depreciation) on zero coupons      (1,289,988)       841,470        724,625
  Interest income (Notes 3c)                                   1,563,022      1,710,639      1,916,217
                                                             -----------    -----------    -----------
                                                              (2,742,063)     3,868,575      4,572,680
                                                             -----------    -----------    -----------
Expenses:
  Management fees (Note 3b)                                      434,157        535,282        586,615
  Incentive fees (Note 3b)                                          --          300,523        319,273
  Professional fees                                               60,814         48,798         39,102
  Other expenses                                                  10,160         15,330         80,802
                                                             -----------    -----------    -----------
                                                                 505,131        899,933      1,025,792
                                                             -----------    -----------    -----------
Net income (loss)                                            $(3,247,194)   $ 2,968,642    $ 3,546,888
                                                             -----------    -----------    -----------
Net income (loss) per Unit of Limited Partnership Interest
and  General Partner Unit equivalent (Notes 1 and 6)          $ (129.45)   $    109.40    $    115.33
                                                             -----------    -----------    -----------
</TABLE>

See notes to financial statements.

                                                                      F-5
<PAGE>


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


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

Partners' capital at December 31, 1996   $ 37,838,720    $    414,984    $ 38,253,704
Net income                                  3,503,524          43,364       3,546,888
Redemption of 5,459 Units of Limited
   Partnership Interest                    (6,204,189)           --        (6,204,189)
                                         ------------    ------------    ------------
Partners' capital at December 31, 1997     35,138,055         458,348      35,596,403
Net income                                  2,927,508          41,134       2,968,642
Redemption of 3,400 Units of Limited
   Partnership Interest                    (4,290,639)           --        (4,290,639)
                                         ------------    ------------    ------------
Partners' capital at December 31, 1998     33,774,924         499,482      34,274,406
Net loss                                   (3,198,521)        (48,673)     (3,247,194)
Redemption of 3,123 Units of Limited
   Partnership Interest                    (3,837,307)           --        (3,837,307)
                                         ------------    ------------    ------------
Partners' capital at December 31, 1999   $ 26,739,096    $    450,809    $ 27,189,905
                                         ------------    ------------    ------------
</TABLE>

See notes to financial statements.

                                                       F-6
<PAGE>


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

1.  Partnership Organization:
    Smith  Barney  Principal  PLUS Futures Fund L.P.  (the  "Partnership")  is a
    limited  partnership which was initially organized on January 25, 1993 under
    the  partnership  laws of the State of New York and was capitalized on April
    12, 1995. No activity  occurred between January 25, 1993 and April 12, 1995.
    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 July 12, 1995 and November 16, 1995, 37,131 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  November 17,
    1995,  at which time they were turned over to the  Partnership  for trading.
    The  Partnership  was  authorized  to sell 100,000 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  (February,  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. The  partnership  may purchase and write (sell)  options.  An option is a
       contract  allowing,  but not requiring,  its holder to buy (call) or sell
       (put) a specific or  standard  commodity  or  financial  instrument  at a
       specified price during a specified time period. The option premium is the
       total  price  paid or  received  for the option  contract.  When the fund
       writes an option,  the premium received is recorded as a liability in the
       statement of financial  condition  and marked to market  daily.  When the

                                   F-7
<PAGE>

       fund purchases an option, the premium paid is recorded as an asset in the
       statement of financial condition and marked to market daily.
    c. 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.
    d. The original issue  discount on the Zero Coupons is being  amortized over
       their life using the interest method and is included in interest income.
    e. 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.
    f. 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.,  Fort Orange
       Capital  Management  and Rabar Market  Research Inc.  (collectively,  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 a monthly management fee of 1/6 of 1% (2%
       per year) to Fort Orange  Capital  Management  and Rabar Market  Research
       Inc.,  and 1/3 of 1 % (4% per year) to John W. Henry & Company,  Inc., of
       month-end Net Assets allocated to each advisor. The Partnership will also
       pay Fort Orange  Capital  Management an incentive  fee payable  quarterly
       equal  to  20% of New  Trading  Profits,  as  defined  in the  Management
       Agreements,  earned by it for the  Partnership;  John W. Henry & Company,
       Inc.  will  receive  a  quarterly  incentive  fee of  15% of New  Trading
       Profits;  and Rabar Market Research Inc. will receive an annual incentive
       fee of 22.5% of New Trading Profits of the  Partnership.  Abraham Trading
       Co. was terminated as an Advisor to the  Partnership on January 31, 1999.
       Fort  Orange  Capital  Management  was added as a Advisor on  February 1,
       1999.
    c. Customer Agreement:
       The  Partnership  has entered into a Customer  Agreement with SSB whereby
       SSB provides services which include, among other things, the execution of
       transactions  for the  Partnership's  account in  accordance  with orders
       placed by the  Advisors.  The  Partnership  is obligated to pay a monthly
       brokerage fee to SSB equal to 7/12 of 1 % of month-end Net Assets (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

                                   F-8
<PAGE>

       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  $1,909,496  and  $2,250,973,
       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.

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 $465,450 and $1,147,510,  respectively.
    The fair value of these commodity  interests,  including options thereon, if
    applicable,  at December  31,  1999 and 1998 was  $487,171  and  $1,350,548,
    respectively, as detailed below.

                                                       Fair Value
                                             December 31,   December 31,
                                                    1999           1998
        Currencies:
            -Exchange Traded Contracts       $    27,204    $    54,358
            -OTC Contracts                       (85,269)        53,374
        Energy                                   (29,936)       (47,454)
        Grains                                        18         58,398
        Interest Rates U.S.                      131,062        (82,237)
        Interest Rates Non-U.S                    48,053      1,290,455
        Livestock                                  2,885         25,120
        Metals                                    97,976        (97,212)
        Softs                                    (10,624)        93,013
        Indices                                  308,607          2,733
        Lumber                                    (2,805)          --
                                             -----------    -----------
        Total                                $   487,171    $ 1,350,548
                                             -----------    -----------


5.  Distributions and Redemptions:
    Distributions of profits, if any, will be made at the sole discretion of the
    General Partner. 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 dates, and 1 % on the fourth and fifth possible redemption dates.
    Thereafter,  no redemption  fee will be charged.  During 1997,  SSB received
    redemption  fees of $33,328.  Redemption  Net Asset Value  differs  from Net
    Asset Value calculated for financial  reporting purposes in that any accrued
    liability for  reimbursement of offering and organization  expenses will not
    be included in the calculation of Redemption Net Asset Value.

                                   F-9
<PAGE>

6.  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>
<S>                                                 <C>          <C>         <C>
                                                     1999        1998         1997

Net realized and unrealized gains (losses)     $  (120.12)  $   47.41    $  66.66
Realized and unrealized appreciation
(depreciation) on Zero Coupons                     (51.90)      32.87       21.33
Interest income                                     62.91       61.61       58.85
Expenses                                           (20.34)     (32.49)     (31.51)
                                                 --------    --------    --------
Increase (decrease) for year                      (129.45)     109.40      115.33
Net asset value per Unit, beginning of year      1,328.41    1,219.01    1,103.68
                                                --------    --------    --------
Net asset value per Unit, end of year         $  1,198.96  $ 1,328.41  $ 1,219.01
                                                --------    --------    --------
</TABLE>


7.  Guarantee:
    In the unlikely event that the Partnership is required to meet a margin call
    in excess of the cash balance in its trading accounts, SSBHI will contribute
    up to an amount equal to the maturity  value of the Zero Coupons held by the
    Partnership  at the time of such call to the capital of the  Partnership  to
    permit it to meet its margin obligations in excess of its cash balance.  The
    guarantee can only be invoked once. After the guarantee is invoked,  trading
    will cease and the General  Partner will either wait until the First Payment
    Date or will distribute cash and Zero Coupons to the limited partners.
8.  Financial Instrument Risks:
    The Partnership is party to financial  instruments  with  off-balance  sheet
    risk, including  derivative  financial  instruments and derivative commodity
    instruments,   in  the  normal  course  of  its  business.  These  financial
    instruments may include forwards,  futures and options, whose value is based
    upon an underlying asset,  index, or reference rate, and generally represent
    future commitments to exchange currencies or cash flows, to purchase or sell
    other financial instruments at specific terms at specified future dates, or,
    in the  case of  derivative  commodity  instruments,  to  have a  reasonable
    possibility to be settled in cash, through physical delivery or with another
    financial  instrument.  These  instruments  may be traded on an  exchange or
    over-the-counter  ("OTC").  Exchange traded instruments are standardized and
    include futures and certain option  contracts.  OTC contracts are negotiated
    between contracting  parties and include forwards and certain options.  Each
    of these instruments is subject to various risks similar to those related to
    the underlying  financial  instruments  including market and credit risk. In
    general,  the risks  associated  with OTC  contracts  are greater than those
    associated with exchange traded  instruments  because of the greater risk of
    default by the counterparty to an OTC contract. Market risk is the potential
    for  changes  in  the  value  of the  financial  instruments  traded  by the
    Partnership due to market changes,  including  interest and foreign exchange
    rate movements and fluctuations in commodity or security prices. Market risk
    is directly impacted by the volatility and liquidity in the markets in which
    the related  underlying  assets are traded.  Credit risk is the  possibility
    that a loss may  occur  due to the  failure  of a  counterparty  to  perform
    according  to the terms of a contract.  Credit risk with respect to exchange
    traded  instruments  is reduced to the extent  that an  exchange or clearing
    organization  acts as a counterparty to the transactions  (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

                                   F-10
<PAGE>

    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.

9.  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 $1,148,676 were paid
for the year ended December 31, 1999.  Management  fees of $434,157 were paid to
the Advisors for the year ended December 31, 1999.  There were no incentive fees
paid during the year ended December 31, 1999.

                                       35
<PAGE>


Item 12. Security Ownership of Certain Beneficial Owners and Management.
                   (a). Security ownership of certain beneficial owners.
As of March 1,  2000,  two  beneficial  owners who are  neither a  director  nor
executive  officer  own more than five  percent  (5%) of the  outstanding  Units
issued by the Registrant as follows:

Title           Name and Address of          Amount and Nature of     Percent of
of Class        Beneficial Owner             Beneficial Ownership       Class
--------        -------------------          --------------------     ----------
Units of        CITIC Industrial Bank        5,000 Units                22.0%
Limited         No. 6 Xinyuan Nan Lu
Partnership     Chaoyang District Beijing
Interest

Units of        Marilyn Duke Co. Ttee        1,500 Units                 6.6%
Limited         Evelyn Freed Co. Ttee
Partnership     FBO:  Naomi R Wilden Trust
Interest        P. O. BOX 430
                Rogue River, OR 97537-0430

                  (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 376 (1.6%) Units of Limited Partnership Interest.
                  (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."


                                       36
<PAGE>

                                     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.
                  (2)      Financial Statement Schedules:Financial data schedule
                           for the year ended December 31, 1998.
                  (3)      Exhibits:
                  3.1      Limited  Partnership  Agreement (dated  April 3, 1995
                           and  amended  as of June 22, 1995), (filed as Exhibit
                           3.1 to the  Registration Statement on Form  S-1 (File
                           No. 33-01742) 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 New York  (filed as  Exhibit  3.2 to the
                           Registration   Statement   on  Form  S-1  (File  No.
                           33-91742) and incorporated herein by reference).

                                       37
<PAGE>


                  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. 33-91742)
                         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. 33-91742)
                         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. 33-91742) and incorporated herein by
                         reference).

                  10.6 - Management  Agreement   among   the   Partnership,  the
                         General Partner and Rabar Market Research,  Inc. (filed
                         as Exhibit 10.6 to the  Registration  Statement on Form
                         S-1  (File No.  33-91742)  and  incorporated  herein by
                         reference).

                  10.7 - Management   Agreement   among   the  Partnership,  the
                         General  Partner  and  Abraham  Trading  Co.  (filed as
                         Exhibit 10.7 to the Registration  Statement on Form S-1
                         (File  No.   33-91742)  and   incorporated   herein  by
                         reference).


                                       38
<PAGE>



                  10.8 - Letters   extending   Management  Agreements with Rabar
                         Market Research,  Inc., Abraham Trading Co. and John W.
                         Henry &  Company,  Inc.  for 1997 and 1996  (previously
                         filed).

                  10.9 - Letters   extending   Management  Agreements with Rabar
                         Market  Research,  Inc.  and John W.  Henry &  Company,
                         Inc.for 1998 (previously filed).

                  10.10- Letter from  General   Partner  terminating  Management
                         Agreement with Abraham Trading Co. (previously filed).

                  10.11- Management   Agreement   among  the  Partnership,  the
                         General Partner and Fort Orange Capital  Management for
                         1999 (filed herein)

                  10.12- Letters  extending  Management  Agreements  with  Rabar
                         Market  Research,  Inc.  and John W.  Henry &  Company,
                         Inc.for 1999 (filed herein)

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



                                       39
<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



                                       40
<PAGE>


                                   SIGNATURES

          Pursuant to the  requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934,  the Registrant has duly caused this annual report on Form
10-K to be signed on its behalf by the  undersigned,  thereunto duly authorized,
in the City of New York and State of New York on the 30th day of March 2000.

SMITH BARNEY PRINCIPAL PLUS FUTURES FUND L.P.


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

                                       41