FORM10-Q

SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C.20549

(X) QUARTERLY REPORT UNDER SECTION 13 or 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934

OR ( ) TRANSITION REPORTUNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934

For the Quarter ended June 30, 2005

Commission File Number 0-50735

SMITH BARNEY POTOMAC FUTURES FUND L.P.

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(Exact name ofregistrant as specified in its charter)

|                                |  |                     |  |  |  |  |
|--------------------------------|--|---------------------|--|--|--|--|
| NewYork                        |  | 13-3937275          |
| (State or other jurisdictionof |  | (I.R.S. Employer    |
| incorporation ororganization)  |  | Identification No.) |
|                                |

c/oCitigroup Managed Futures LLC 399 Park Avenue - 7th Fl. NewYork, New York10022

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|  |  |
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(Address and ZipCode of principal executive offices)

(212)559-2011

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(Registrant'stelephone number, including area code)

Indicate by checkmark whether the registrant (1) has filed all reports required to befiled by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subjectto such filing requirements for the past 90 days.

YesX     No    

Indicate by checkmark whether the registrant is an accelerated filer (as defined in rule12b-2 of the Exchange Act).

Yes X     No   

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SMITH BARNEY POTOMACFUTURES FUND L.P.

FORM 10-Q

INDEX

|                               |  |        |    |                                                                                                                            |  |            |                         |        |  |  |  |  |  |  |
|-------------------------------|--|--------|----|----------------------------------------------------------------------------------------------------------------------------|--|------------|-------------------------|--------|--|--|--|--|--|--|
|                          |  |   |    |                                                                                                                       |  | PageNumber |
| PARTI - FinancialInformation: |  |
|                          |  | Item1. |    | FinancialStatements:                                                                                                       |  |       |                    |   |
|                          |  |   |    | Statements ofFinancial Conditionat June 30, 2005 and December 31,2004(unaudited).                                          |  |       | 3                       |   |
|                          |  |   |    | CondensedSchedule of Investments at December 31,2004(unaudited).                                                           |  |       | 4                       |   |
|                          |  |   |    | Statementsof Income and Expensesand Partners' Capital for the three andsix months ended June 30, 2005 and 2004(unaudited). |  |       | 5                       |   |
|                          |  |   |    | Statementsof Cash Flows for thethree and six months ended June 30, 2005 and2004(unaudited).                                |  |       | 6                       |   |
|                          |  |   |    | Notesto Financial Statements, including the Financial Statements of CMFCampbell Master FundL.P.(unaudited).                |  |       | 7 – 14  |   |
|                          |  | Item2. |    | Management's Discussion andAnalysis of FinancialConditionand Results ofOperations                                          |  |       | 15 – 17 |   |
|                          |  | Item3. |    | Quantitative and QualitativeDisclosures about MarketRisk                                                                   |  |       | 18 – 19 |   |
|                          |  | Item4. |    | Controls andProcedures.                                                                                                    |  |       | 20                      |   |
| PARTII - OtherInformation     |  |   | 21 |                                                                                                                       |
|                               |

2

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PART I

Item 1.Financial Statements

Smith Barney Potomac Futures FundL.P.Statements of Financial Condition(Unaudited)

|                                                                                                                                         |  |             |             |                  |  |        |             |        |  |  |
|-----------------------------------------------------------------------------------------------------------------------------------------|--|-------------|-------------|------------------|--|--------|-------------|--------|--|--|
|                                                                                                                                    |  | June30,2005 |             | December 31,2004 |
| Assets:                                                                                                                                 |  |        |        |             |  |   |        |   |
| Investmentin Master, at fair value                                                                                                      |  | $           | 201,856,470 |             |  | $      | —     |   |
| Equityin commodity futures tradingaccount:                                                                                              |  |        |        |             |  |   |        |   |
| Cash(restricted $0 and $19,775,170 in 2005 and 2004,respectively)                                                                       |  |        | 72,169      |             |  |   | 157,080,994 |   |
| Netunrealized appreciation on open futurescontracts                                                                                     |  |        | —     |             |  |   | 2,504,531   |   |
| Unrealizedappreciation on open forwardcontracts                                                                                         |  |        | —     |             |  |   | 9,444,675   |   |
|                                                                                                                                    |  |        | 201,928,639 |             |  |   | 169,030,200 |   |
| Interestreceivable                                                                                                                      |  |        | —     |             |  |   | 205,283     |   |
|                                                                                                                                    |  | $           | 201,928,639 |             |  | $      | 169,235,483 |   |
| Liabilitiesand Partners'Capital:                                                                                                        |  |        |        |             |  |   |        |   |
| Liabilities:                                                                                                                            |  |        |        |             |  |   |        |   |
| Unrealizeddepreciation on open forwardcontracts                                                                                         |  | $           | —     |             |  | $      | 10,366,214  |   |
| Accruedexpenses:                                                                                                                        |  |        |        |             |  |   |        |   |
|     Commissions                                                                                                     |  |        | 1,078,797   |             |  |   | 874,649     |   |
|     Managementfees                                                                                                  |  |        | 330,021     |             |  |   | 267,511     |   |
|     Otherfees                                                                                                       |  |        | 87,055      |             |  |   | 76,978      |   |
| Redemptionspayable                                                                                                                      |  |        | 1,103,754   |             |  |   | 2,967,486   |   |
|                                                                                                                                    |  |        | 2,599,627   |             |  |   | 14,552,838  |   |
| Partners'Capital:                                                                                                                       |  |        |        |             |  |   |        |   |
| General Partner,729.3902 Unit equivalents outstanding in 2005 and2004                                                                   |  |        | 1,314,332   |             |  |   | 1,239,810   |   |
| LimitedPartners, 109,888.5081 and 90,271.8164 Redeemable Units of LimitedPartnership Interest outstanding in 2005 and 2004,respectively |  |        | 198,014,680 |             |  |   | 153,442,835 |   |
|                                                                                                                                    |  |        | 199,329,012 |             |  |   | 154,682,645 |   |
|                                                                                                                                    |  | $           | 201,928,639 |             |  | $      | 169,235,483 |   |
|                                                                                                                                         |

SeeAccompanying Notes to Financial Statements.

3

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Smith Barney Potomac Futures FundL.P.Condensed Schedule of InvestmentsDecember 31,2004(Unaudited)

|                                                           |  |                                                     |  |           |             |         |  |  |  |  |
|-----------------------------------------------------------|--|-----------------------------------------------------|--|-----------|-------------|---------|--|--|--|--|
| Sector                                                    |  | Contract                                            |  | FairValue |
| Currencies                                                |  |                                                |  |      |        |    |
|                                                      |  | Unrealizeddepreciation on forward contracts(6.58)%  |  | $         | (10,181,726 | )  |
|                                                      |  | Unrealizedappreciation on forward contracts6.03%    |  |      | 9,332,621   |    |
|     TotalCurrencies(0.55)%            |  |                                                |  |      | (849,105    | )  |
|                                                      |  |                                                |  |      |        |    |
| Energy(0.20)%                                             |  | Futures contracts purchased(0.20)%                  |  |      | (309,904    | )  |
| InterestRates Non-U.S.                                    |  |                                                |  |      |        |    |
|                                                      |  | Futurescontracts sold0.00%*                         |  |      | 2,190       |    |
|                                                      |  | Futurescontracts purchased0.73%                     |  |      | 1,127,489   |    |
|     TotalInterest Rates Non-U.S.0.73% |  |                                                |  |      | 1,129,679   |    |
|                                                      |  |                                                |  |      |        |    |
| InterestRates U.S.                                        |  | Futures contracts purchased 0.17%                   |  |      | 265,100     |    |
|                                                      |  | Futures contracts sold0.03%                         |  |      | 41,797      |    |
| TotalInterest Rates U.S. 0.20%                            |  |                                                |  |      | 306,897     |    |
|                                                      |  |                                                |  |      |        |    |
| Metals                                                    |  |
|                                                      |  | Unrealizeddepreciation on forward contracts (0.12)% |  |      | (184,488    | )  |
|                                                      |  | Unrealized appreciation onforward contracts 0.07%   |  |      | 112,054     |    |
| Total Metals(0.05)%                                       |  |                                                |  |      | (72,434     | )  |
|                                                      |  |                                                |  |      |        |    |
| Indices0.89%                                              |  | Futures contracts purchased 0.89%                   |  |      | 1,377,859   |    |
|                                                      |  |                                                |  |      |        |    |
| TotalFair Value1.02%                                      |  |                                                |  | $         | 1,582,992   |    |
|                                                           |

|                    |  |                          |           |                              |  |        |        |         |  |  |
|--------------------|--|--------------------------|-----------|------------------------------|--|--------|--------|---------|--|--|
| CountryComposition |  | Investmentsat Fair Value |           | % ofInvestmentsat Fair Value |
| Australia          |  | $                        | 2,190     |                         |  |   | 0.14   | %  |
| Canada             |  |                     | (5,906    | )                       |  |   | (0.37  | )  |
| Germany            |  |                     | 911,575   |                         |  |   | 57.58  |    |
| Hong Kong          |  |                     | 289       |                         |  |   | 0.02   |    |
| Japan              |  |                     | 109,646   |                         |  |   | 6.92   |    |
| Spain              |  |                     | 123,742   |                         |  |   | 7.82   |    |
| United Kingdom     |  |                     | 159,333   |                         |  |   | 10.07  |    |
| United States      |  |                     | 282,123   |                         |  |   | 17.82  |    |
|               |  | $                        | 1,582,992 |                         |  |   | 100.00 | %  |
|                    |

|  |                                                                     |
|--|---------------------------------------------------------------------|
|  | Percentagesare based on Partners' capital unless otherwiseindicated |

|  |                   |
|--|-------------------|
|  | * Due to rounding |

See Accompanying Notes to FinancialStatements.

4

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Smith Barney Potomac Futures FundL.P.Statements of Income and Expenses and Partners'Capital(Unaudited)

|                                                                                                                            |  |                           |             |                         |  |        |             |         |  |        |             |         |  |        |             |         |  |  |
|----------------------------------------------------------------------------------------------------------------------------|--|---------------------------|-------------|-------------------------|--|--------|-------------|---------|--|--------|-------------|---------|--|--------|-------------|---------|--|--|
|                                                                                                                       |  | ThreeMonths EndedJune 30, |             | Six Months EndedJune30, |
|                                                                                                                       |  | 2005                      |             | 2004                    |  | 2005   |             | 2004    |
| Income:                                                                                                                    |  |                      |        |                    |  |   |        |    |  |   |        |    |  |   |        |    |
| Realizedgains on closed positions allocated fromMaster                                                                     |  | $                         | 13,147,431  |                    |  | $      | —     |    |  | $      | 7,431,813   |    |  | $      | —     |    |
| Change in unrealized gains onopen positions allocated from Master                                                          |  |                      | 11,227,417  |                    |  |   | —     |    |  |   | 12,172,061  |    |  |   | —     |    |
| Interest income allocated fromMaster                                                                                       |  |                      | 959,721     |                    |  |   | —     |    |  |   | 1,741,665   |    |  |   |        |    |
| Expensesallocated from Master                                                                                              |  |                      | (81,853     | )                  |  |   | —     |    |  |   | (167,634    | )  |  |   |        |    |
| Net gains(losses) on trading of commodityfutures:                                                                          |  |                      |        |                    |  |   |        |    |  |   |        |    |  |   |        |    |
| Realizedgains (losses) on closedpositions                                                                                  |  |                      | —     |                    |  |   | (8,498,505  | )  |  |   | —     |    |  |   | 15,214,930  |    |
| Change in unrealized (losses) on openpositions                                                                             |  |                      | —     |                    |  |   | (6,469,876  | )  |  |   | (1,582,992  | )  |  |   | (7,640,010  | )  |
|                                                                                                                       |  |                      | 25,252,716  |                    |  |   | (14,968,381 | )  |  |   | 19,594,913  |    |  |   | 7,574,920   |    |
| Interestincome                                                                                                             |  |                      | —     |                    |  |   | 235,458     |    |  |   | —     |    |  |   | 447,798     |    |
|                                                                                                                       |  |                      | 25,252,716  |                    |  |   | (14,732,923 | )  |  |   | 19,594,913  |    |  |   | 8,022,718   |    |
| Expenses:                                                                                                                  |  |
| Brokeragecommissions including clearing fees of $0, $39,788, $0, and $86,304,respectively                                  |  |                      | 3,049,211   |                    |  |   | 2,093,872   |    |  |   | 5,777,653   |    |  |   | 4,151,125   |    |
| Managementfees                                                                                                             |  |                      | 933,342     |                    |  |   | 621,472     |    |  |   | 1,767,408   |    |  |   | 1,231,248   |    |
| Other                                                                                                                      |  |                      | 42,386      |                    |  |   | 6,149       |    |  |   | 65,363      |    |  |   | 12,947      |    |
| Incentivefees                                                                                                              |  |                      | —     |                    |  |   | —     |    |  |   | —     |    |  |   | 3,973,895   |    |
|                                                                                                                       |  |                      | 4,024,939   |                    |  |   | 2,721,493   |    |  |   | 7,610,424   |    |  |   | 9,369,215   |    |
| Net income (loss)                                                                                                          |  |                      | 21,227,777  |                    |  |   | (17,454,416 | )  |  |   | 11,984,489  |    |  |   | (1,346,497  | )  |
| Additions — Limited Partner                                                                                          |  |                      | 15,343,000  |                    |  |   | 20,036,000  |    |  |   | 42,260,000  |    |  |   | 35,628,000  |    |
|   — GeneralPartner                                                                                         |  |                      | —     |                    |  |   | 160,000     |    |  |   | —     |    |  |   | 410,000     |    |
| Redemptions                                                                                                                |  |                      | (6,215,912  | )                  |  |   | (6,140,967  | )  |  |   | (9,598,122  | )  |  |   | (13,449,214 | )  |
| Net increase (decrease) in Partners'capital                                                                                |  |                      | 30,354,865  |                    |  |   | (3,399,383  | )  |  |   | 44,646,367  |    |  |   | 21,242,289  |    |
| Partners' capital, beginningof period                                                                                      |  |                      | 168,974,147 |                    |  |   | 126,978,100 |    |  |   | 154,682,645 |    |  |   | 102,336,428 |    |
| Partners' capital, end ofperiod                                                                                            |  | $                         | 199,329,012 |                    |  | $      | 123,578,717 |    |  | $      | 199,329,012 |    |  | $      | 123,578,717 |    |
| Net asset value per Redeemable Unit (110,617.8983 and75,376.0179 Units outstanding at June 30, 2005 and 2004,respectively) |  | $                         | 1,801.96    |                    |  | $      | 1,639.50    |    |  | $      | 1,801.96    |    |  | $      | 1,639.50    |    |
| Net income (loss) per Redeemable Unit of LimitedPartnership                                                                |  | $                         | 191.90      |                    |  | $      | (238.11     | )  |  | $      | 102.17      |    |  | $      | 4.86        |    |
|                                                                                                                            |

See Accompanying Notes to FinancialStatements

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Smith Barney Potomac Futures FundL.P.Statements of Cash Flows(Unaudited)

|                                                                                                  |  |                           |             |                        |  |        |             |         |  |        |              |         |  |        |             |         |  |  |
|--------------------------------------------------------------------------------------------------|--|---------------------------|-------------|------------------------|--|--------|-------------|---------|--|--------|--------------|---------|--|--------|-------------|---------|--|--|
|                                                                                             |  | ThreeMonths EndedJune 30, |             | Six Months EndedJune30 |
|                                                                                             |  | 2005                      |             | 2004                   |  | 2005   |             | 2004    |
| Cash flows from operatingactivities:                                                             |  |                      |        |                   |  |   |        |    |  |   |         |    |  |   |        |    |
| NetIncome (loss)                                                                                 |  | $                         | 21,227,777  |                   |  | $      | (17,454,416 | )  |  | $      | 11,984,489   |    |  | $      | (1,346,497  | )  |
| Adjustments to reconcile net income (loss) tonet cash provided by (used in) operatingactivities: |  |                      |        |                   |  |   |        |    |  |   |         |    |  |   |        |    |
| Changesin operating assets andliabilities:                                                       |  |                      |        |                   |  |   |        |    |  |   |         |    |  |   |        |    |
| (Increase)decrease in investment in Master, at fairvalue                                         |  |                      | (30,203,673 | )                 |  |   | —     |    |  |   | (201,856,470 | )  |  |   | —     |    |
| (Increase)decrease in restricted cash                                                            |  |                      | —     |                   |  |   | 12,065,342  |    |  |   | 19,775,170   |    |  |   | 5,783,100   |    |
| Netunrealized (appreciation) depreciation on open futurespositions                               |  |                      | —     |                   |  |   | 6,451,118   |    |  |   | 2,504,531    |    |  |   | 7,621,252   |    |
| Unrealized appreciation onopen forward contracts                                                 |  |                      | —     |                   |  |   | (92         | )  |  |   | 9,444,675    |    |  |   | (92         | )  |
| (Increase) decrease in interestreceivable                                                        |  |                      | —     |                   |  |   | (2,288      | )  |  |   | 205,283      |    |  |   | (26,097     | )  |
| Unrealized depreciation on openforward contracts                                                 |  |                      | —     |                   |  |   | 18,850      |    |  |   | (10,366,214  | )  |  |   | 18,850      |    |
| Accruedexpenses:                                                                                 |  |                      |        |                   |  |   |        |    |  |   |         |    |  |   |        |    |
| Increase(decrease) in commissions                                                                |  |                      | 130,722     |                   |  |   | (62,544     | )  |  |   | 204,148      |    |  |   | 92,553      |    |
| Increase (decrease) in managementfees                                                            |  |                      | 40,086      |                   |  |   | (19,061     | )  |  |   | 62,510       |    |  |   | 28,390      |    |
| Increase (decrease) in incentivefees                                                             |  |                      | —     |                   |  |   | (3,973,895  | )  |  |   | —      |    |  |   | (594,066    | )  |
| Increase (decrease) inother                                                                      |  |                      | (12,901     | )                 |  |   | (21,439     | )  |  |   | 10,077       |    |  |   | (14,641     | )  |
| Net cash provided by (used in)operatingactivities                                                |  |                      | (8,817,989  | )                 |  |   | (2,998,425  | )  |  |   | (168,031,801 | )  |  |   | 11,562,752  |    |
|                                                                                             |  |                      |        |                   |  |   |        |    |  |   |         |    |  |   |        |    |
| Cashflows from financingactivities:                                                              |  |                      |        |                   |  |   |        |    |  |   |         |    |  |   |        |    |
| Proceedsfrom additions — Limited Partners                                                  |  |                      | 15,343,000  |                   |  |   | 20,036,000  |    |  |   | 42,260,000   |    |  |   | 35,628,000  |    |
| Proceeds from additions — GeneralPartner                                                   |  |                      | —     |                   |  |   | 160,000     |    |  |   | —      |    |  |   | 410,000     |    |
| Payments for redemptions —Limited Partners                                                 |  |                      | (6,535,765  | )                 |  |   | (5,984,716  | )  |  |   | (11,461,854  | )  |  |   | (13,067,146 | )  |
| Net cash provided by (used in) financingactivities                                               |  |                      | 8,807,235   |                   |  |   | 14,211,284  |    |  |   | 30,798,146   |    |  |   | 22,970,854  |    |
| Net change incash                                                                                |  |                      | (10,754     | )                 |  |   | 11,212,859  |    |  |   | (137,233,655 | )  |  |   | 34,533,606  |    |
| Cash,at beginning of period                                                                      |  |                      | 82,923      |                   |  |   | 110,457,442 |    |  |   | 137,305,824  |    |  |   | 87,136,695  |    |
| Cash, at end of period                                                                           |  | $                         | 72,169      |                   |  | $      | 121,670,301 |    |  | $      | 72,169       |    |  | $      | 121,670,301 |    |
|                                                                                                  |

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SmithBarney Potomac Futures Fund L.P. Notes to FinancialStatements June 30, 2005 (Unaudited)

1.    General:

Smith Barney Potomac Futures Fund L.P.(the "Partnership") is a limited partnershipwhich was organized on March 14, 1997 under the partnership laws of theState of New York to engage in the speculative trading of a diversifiedportfolio of commodity interests including futures contracts, optionsand forward contracts. The commodity interests that are traded by thePartnership are volatile and involve a high degree of market risk. ThePartnership was authorized to sell an unlimited number of redeemableunits of Limited Partnership Interest ("RedeemableUnits") during its initial offering period. ThePartnership continues to offer Redeemable Units.

CitigroupManaged Futures LLC acts as the general partner (the"General Partner") of the Partnership. ThePartnership's commodity broker is Citigroup Global Markets Inc.("CGM"). CGM is an affiliate of the GeneralPartner. The General Partner is wholly owned by Citigroup GlobalMarkets Holdings Inc. ("CGMHI"), which is thesole owner of CGM. CGMHI is a wholly owned subsidiary of CitigroupInc.

Effective January 1, 2005, the Partnership allocatedsubstantially all of its capital to the CMF Campbell Master Fund L.P.,a New York limited liability company (the"Master"). The Partnership purchased173,788.6446 Units of the Master with cash equal to $172,205,653 and acontribution of open commodity futures and forward positions with afair value of $1,582,992. The Master was formed in order to permitaccounts managed by Campbell & Company, Inc. (the"Advisor") using the FME Large PortfolioProgram, the Advisor's proprietary trading program, to investtogether in one trading vehicle. The General Partner of the Partnershipis the General Partner of the Master. Individual and pooled accountscurrently managed by the Advisor, including the Partnership(collectively, the "Feeder Funds") arepermitted to be limited partners of the Master. The General Partner andthe Advisor believe that trading through this master/feeder structurepromotes efficiency and economy in the trading process. Expenses toinvestors as a result of the investment in the Master are approximatelythe same and redemption rights are not affected.

As of June 30,2005, the Partnership owned approximately 67.1% of the Master.It is the Partnership's intention to continue to investsubstantially all of its assets in the Master. The performance of thePartnership is directly affected by the performance of the Master. TheMaster's Statement of Financial Condition, Statement of Incomeand Expenses and Partners' Capital, Condensed Schedule ofInvestments and Statement of Cash Flows are included herein.

Theaccompanying financial statements are unaudited but, in the opinion ofmanagement, include all adjustments, consisting only of normalrecurring adjustments, necessary for a fair presentation of thePartnership's financial condition at June 30, 2005 and December31, 2004 and the results of its operations and cash flows for the threeand six months ended June 30, 2005 and 2004. These financial statementspresent the results of interim periods and do not include alldisclosures normally provided in annual financial statements. Youshould read these financial statements together with the financialstatements and notes included in the Partnership's Annual Reporton Form 10-K filed with the Securities and Exchange Commission for theyear ended December 31, 2004.

Due to the nature of commoditytrading, the results of operations for the interim periods presentedshould not be considered indicative of the results that may be expectedfor the entire year.

The Master's Statement of FinancialCondition and Condensed Schedule of Investments as of June  30,2005 and Statement of Income and Expenses and Partners' Capitaland Statement of Cash Flows for the three and six months ended June 30,2005 are presented below:

7

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SmithBarney Potomac Futures Fund L.P. Notes to FinancialStatements June 30, 2005 (Unaudited)

CMF Campbell Master Fund L.P.Statement of Financial Condition(Unaudited)

|                                                         |  |             |             |        |  |  |
|---------------------------------------------------------|--|-------------|-------------|--------|--|--|
|                                                    |  | June30,2005 |
| Assets:                                                 |  |        |        |   |
| Equityin commodity futures tradingaccount:              |  |        |        |   |
| Cash (restricted$35,609,335)                            |  | $           | 281,421,686 |   |
| Netunrealized appreciation on open futurespositions     |  |        | 9,010,264   |   |
| Unrealizedappreciation on open forwardcontracts         |  |        | 14,633,688  |   |
|                                                    |  |        | 305,065,638 |   |
| Interestreceivable                                      |  |        | 515,922     |   |
|                                                    |  | $           | 305,581,560 |   |
| Liabilitiesand Partners'Capital:                        |  |        |        |   |
| Liabilities:                                            |  |        |        |   |
| Unrealizeddepreciation on open forwardcontracts         |  | $           | 4,390,204   |   |
| Accruedexpenses:                                        |  |        |        |   |
| Professionalfees                                        |  |        | 26,850      |   |
| Distributionpayable                                     |  |        | 515,922     |   |
|                                                    |  |        | 4,932,976   |   |
| Partners'Capital:                                       |  |        |        |   |
| Partners' Capital,274,415.1242 Units outstanding in2005 |  |        | 300,648,584 |   |
|                                                    |  | $           | 305,581,560 |   |
|                                                         |

8

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SmithBarney Potomac Futures Fund L.P. Notes to FinancialStatements June 30, 2005 (Unaudited)

CMF Campbell Master Fund L.P.Condensed Schedule of Investments June 30,2005(Unaudited)

|                                      |  |                                                    |  |           |            |         |  |  |  |  |
|--------------------------------------|--|----------------------------------------------------|--|-----------|------------|---------|--|--|--|--|
| Sector                               |  | Contract                                           |  | FairValue |
| Currencies                           |  |                                               |  |      |       |    |
|                                 |  | Unrealizeddepreciation on forward contracts(1.45)% |  | $         | (4,368,679 | )  |
|                                 |  | Unrealizedappreciation on forward contracts4.80%   |  |      | 14,416,913 |    |
| TotalCurrencies3.35%                 |  |                                               |  |      | 10,048,234 |    |
| Energy                               |  |                                               |  |      |       |    |
|                                 |  | Futurescontracts sold0.35%                         |  |      | 1,060,190  |    |
|                                 |  | Futurescontracts purchased0.01%                    |  |      | 20,160     |    |
| Total Energy0.36%                    |  |                                               |  |      | 1,080,350  |    |
| TotalInterest Rates Non - U.S. 2.26% |  | Futures contractspurchased2.26%                    |  |      | 6,808,030  |    |
| TotalInterest Rates U.S. 0.38%       |  | Futures contracts purchased0.38%                   |  |      | 1,151,095  |    |
| Metals                               |  |                                               |  |      |       |    |
|                                 |  | Unrealizeddepreciation on forward contracts(0.01)% |  |      | (21,525    | )  |
|                                 |  | Unrealizedappreciation on forward contracts0.07%   |  |      | 216,775    |    |
| TotalMetals0.06%                     |  |                                               |  |      | 195,250    |    |
| TotalIndices (0.01)%                 |  | Futures contracts purchased(0.01)%                 |  |      | (29,211    | )  |
| TotalFair Value6.40%                 |  |                                               |  | $         | 19,253,748 |    |
|                                      |

|                    |  |                          |            |                               |  |        |        |         |  |  |
|--------------------|--|--------------------------|------------|-------------------------------|--|--------|--------|---------|--|--|
| CountryComposition |  | Investments at FairValue |            | % of Investments at FairValue |
| Australia          |  | $                        | 3,604      |                          |  |   | 0.02   | %  |
| Canada             |  |                     | (2,572     | )                        |  |   | (0.01  | )  |
| Germany            |  |                     | 4,224,841  |                          |  |   | 21.94  |    |
| HongKong           |  |                     | (56,205    | )                        |  |   | (0.29  | )  |
| Japan              |  |                     | 707,298    |                          |  |   | 3.67   |    |
| Spain              |  |                     | 105,882    |                          |  |   | 0.55   |    |
| UnitedKingdom      |  |                     | 3,159,799  |                          |  |   | 16.41  |    |
| UnitedStates       |  |                     | 11,111,101 |                          |  |   | 57.71  |    |
|               |  | $                        | 19,253,748 |                          |  |   | 100.00 | %  |
|                    |

Percentages are based on Masters'capital unless otherwise indicated

9

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SmithBarney Potomac Futures Fund L.P. Notes to FinancialStatements June 30, 2005 (Unaudited)

CMF Campbell Master FundL.P.Statements of Income and Expenses and Partners'Capital(Unaudited)

|                                                                          |  |                            |             |                         |  |        |             |         |  |  |
|--------------------------------------------------------------------------|--|----------------------------|-------------|-------------------------|--|--------|-------------|---------|--|--|
|                                                                     |  | ThreeMonths Ended June 30, |             | Six Months EndedJune30, |
|                                                                     |  | 2005                       |             | 2005                    |
| Income:                                                                  |  |                       |        |                    |  |   |        |    |
| Netgains (losses) on trading of commodityinterests:                      |  |                       |        |                    |  |   |        |    |
| Realized gainson closed positions and foreigncurrencies                  |  | $                          | 19,502,500  |                    |  | $      | 10,328,518  |    |
| Changein unrealized gains on openpositions                               |  |                       | 17,579,466  |                    |  |   | 16,386,889  |    |
|                                                                     |  |                       | 37,081,966  |                    |  |   | 26,715,407  |    |
| Interestincome                                                           |  |                       | 1,481,454   |                    |  |   | 2,747,368   |    |
|                                                                     |  |                       | 38,563,420  |                    |  |   | 29,462,775  |    |
| Expenses:                                                                |  |                       |        |                    |  |   |        |    |
| Commissionsincluding clearing fees of $49,645 and $85,463,respectively   |  |                       | 111,595     |                    |  |   | 237,149     |    |
| Otherexpenses                                                            |  |                       | 13,650      |                    |  |   | 26,850      |    |
|                                                                     |  |                       | 125,245     |                    |  |   | 263,999     |    |
| Netincome                                                                |  |                       | 38,438,175  |                    |  |   | 29,198,776  |    |
| Additions— LimitedPartners                                         |  |                       | 15,343,000  |                    |  |   | 307,113,300 |    |
| Redemptions— LimitedPartners                                       |  |                       | (25,505,076 | )                  |  |   | (32,916,124 | )  |
| Distributionof interest to FeederFunds                                   |  |                       | (1,481,454  | )                  |  |   | (2,747,368  | )  |
| Netincrease in Partners'capital                                          |  |                       | 26,794,645  |                    |  |   | 300,648,584 |    |
| Partners'capital, beginning ofperiod                                     |  |                       | 273,853,939 |                    |  |   | —     |    |
| Partners'capital, end ofperiod                                           |  | $                          | 300,648,584 |                    |  | $      | 300,648,584 |    |
| Netasset value per Unit (274,415.1242 Units outstanding in June 30,2005) |  | $                          | 1,095.60    |                    |  | $      | 1,095.60    |    |
| Netgain per Unit of Partners'Interest                                    |  | $                          | 137.83      |                    |  | $      | 105.33      |    |
|                                                                          |

10

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SmithBarney Potomac Futures Fund L.P. Notes to FinancialStatements June 30, 2005 (Unaudited)

CMF Campbell Master Fund L.P.Statement of Cash Flows (Unaudited)

|                                                                                          |  |                           |             |                         |  |        |             |         |  |  |
|------------------------------------------------------------------------------------------|--|---------------------------|-------------|-------------------------|--|--------|-------------|---------|--|--|
|                                                                                     |  | ThreeMonths EndedJune 30, |             | Six Months EndedJune30, |
|                                                                                     |  | 2005                      |             | 2005                    |
| Cashflows from operatingactivities:                                                      |  |                      |        |                    |  |   |        |    |
| Netincome                                                                                |  | $                         | 38,438,175  |                    |  | $      | 29,198,776  |    |
| Adjustmentsto reconcile net income to net cash provided by (used in)operatingactivities: |  |                      |        |                    |  |   |        |    |
| Changesin operating assets andliabilities:                                               |  |                      |        |                    |  |   |        |    |
| (Increase)decrease in restrictedcash                                                     |  |                      | (3,783,924  | )                  |  |   | (35,609,335 | )  |
| (Increase)decrease in net unrealized appreciation/depreciation on open futurespositions  |  |                      | (3,875,002  | )                  |  |   | (4,639,786  | )  |
| (Increase)decrease in unrealized appreciation on open forwardcontracts                   |  |                      | (6,184,387  | )                  |  |   | 1,611,087   |    |
| (Increase)decrease in interestreceivable                                                 |  |                      | (19,265     | )                  |  |   | (515,922    | )  |
| Increase(decrease) in unrealized depreciation on open forwardcontracts                   |  |                      | (7,520,077  | )                  |  |   | (13,358,190 | )  |
| Accruedexpenses:                                                                         |  |                      |        |                    |  |   |        |    |
| Increase(decrease) in professionalfees                                                   |  |                      | 13,650      |                    |  |   | 26,850      |    |
| Netcash provided by (used in) operatingactivities                                        |  |                      | 17,069,170  |                    |  |   | (23,286,520 | )  |
| Cashflows from financingactivities:                                                      |  |                      |        |                    |  |   |        |    |
| Proceeds fromadditions                                                                   |  |                      | 15,343,000  |                    |  |   | 304,246,441 |    |
| Paymentsforredemptions                                                                   |  |                      | (25,505,076 | )                  |  |   | (32,916,124 | )  |
| Distributionof interest to feederfunds                                                   |  |                      | (1,462,189  | )                  |  |   | (2,231,446  | )  |
| Netcash provided by (used in) financingactivities                                        |  |                      | (11,624,265 | )                  |  |   | 269,098,871 |    |
| Netchange incash                                                                         |  |                      | 5,444,905   |                    |  |   | 245,812,351 |    |
| Unrestrictedcash, at beginning ofperiod                                                  |  |                      | 240,367,446 |                    |  |   | —     |    |
| Unrestrictedcash, at end ofperiod                                                        |  | $                         | 245,812,351 |                    |  | $      | 245,812,351 |    |
| Noncash financing activities:Contribution of open commodity futuresand forwardspositions |  | $                         | —     |                    |  | $      | 2,866,859   |    |
|                                                                                          |

11

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SmithBarney Potomac Futures Fund L.P. Notes to FinancialStatements June 30, 2005 (Unaudited)

2.    Financial Highlights:

Changes in Net Asset Value per Redeemable Unit of LimitedPartnership Interest for the three and six months ended June 30, 2005and 2004 were asfollows:

|                                                   |  |                   |          |                 |  |        |          |         |  |        |          |         |  |        |          |         |  |  |
|---------------------------------------------------|--|-------------------|----------|-----------------|--|--------|----------|---------|--|--------|----------|---------|--|--------|----------|---------|--|--|
|                                              |  | ThreeMonthe Ended |          | Six MonthsEnded |
|                                              |  | June30,           |          | June 30,        |
|                                              |  | 2005              |          | 2004            |  | 2005   |          | 2004    |
| Net Realized and Unrealized gains(losses)*        |  | $                 | 192.12   |            |  | $      | (232.78  | )  |  | $      | 103.20   |    |  | $      | 76.22    |    |
| Interest Income                                   |  |              | 8.73     |            |  |   | 3.19     |    |  |   | 16.23    |    |  |   | 6.38     |    |
| Expenses**                                        |  |              | (8.95    | )          |  |   | (8.52    | )  |  |   | (17.26   | )  |  |   | (77.74   | )  |
| Increase (decrease) for the period                |  |              | 191.90   |            |  |   | (238.11  | )  |  |   | 102.17   |    |  |   | 4.86     |    |
| Net Assetper Redeemable Unit, beginning of period |  |              | 1,610.06 |            |  |   | 1,877.61 |    |  |   | 1,699.79 |    |  |   | 1,634.64 |    |
| Net Asset per RedeemableUnit, end of period       |  | $                 | 1,801.96 |            |  | $      | 1,639.50 |    |  | $      | 1,801.96 |    |  | $      | 1,639.50 |    |
|                                                   |

|   |                                                                                               |
|---|-----------------------------------------------------------------------------------------------|
| * | IncludesPartnership brokerage commissions and brokerage commissions allocatedfrom the Master. |

|    |                                                                                               |
|----|-----------------------------------------------------------------------------------------------|
| ** | ExcludesPartnership brokerage commissions and brokerage commissions allocatedfrom the Master. |

|                                             |  |                           |         |                         |  |        |         |          |  |        |         |          |  |        |      |          |  |  |
|---------------------------------------------|--|---------------------------|---------|-------------------------|--|--------|---------|----------|--|--------|---------|----------|--|--------|------|----------|--|--|
|                                        |  | ThreeMonths EndedJune 30, |         | Six MonthsEndedJune 30, |
|                                        |  | 2005                      |         | 2004                    |  | 2005   |         | 2004     |
| Ratioto average netassets:***               |  |                      |    |                    |  |   |    |     |  |
| Net investmentloss before incentivefees**** |  |                      | (7.1    | )%                 |  |   | (8.1    | )%  |  |   | (7.0    | )%  |  |   | (8.5 | )%  |
| Operatingexpenses                           |  |                      | 9.2     | %                  |  |   | 8.8     | %   |  |   | 9.1     | %   |  |   | 9.2  | %   |
| Incentivefees                               |  |                      | — |                    |  |   | — |     |  |   | — |     |  |   | 3.4  | %   |
| Totalexpenses                               |  |                      | 9.2     | %                  |  |   | 8.8     | %   |  |   | 9.1     | %   |  |   | 12.6 | %   |
| Totalreturn:                                |  |                      |    |                    |  |   |    |     |  |
| Total return beforeincentivefees            |  |                      | 11.9    | %                  |  |   | (12.7)  | %   |  |   | 6.0     | %   |  |   | 3.5  | %   |
| Incentivefees                               |  |                      | — |                    |  |   | — |     |  |   | — |     |  |   | (3.2 | )%  |
| Totalreturn after incentivefees             |  |                      | 11.9    | %                  |  |   | (12.7)  | %   |  |   | 6.0     | %   |  |   | 0.3  | %   |
|                                             |

|     |                                       |
|-----|---------------------------------------|
| *** | Annualized(other than incentive fees) |

|      |                                                                  |
|------|------------------------------------------------------------------|
| **** | Interest income less total expenses(exclusive of incentive fees) |

The above ratios mayvary for individual investors based on the timing of capitaltransactions during the period. Additionally, these ratios arecalculated for the Limited Partner class using the LimitedPartners' share of income, expenses and average net assets.

12

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SmithBarney Potomac Futures Fund L.P. Notes to FinancialStatements June 30, 2005 (Unaudited)

|  |  |
|--|--|
|  |  |

Financial Highlights oftheMaster:

|                                             |  |                          |          |                        |  |        |          |         |  |  |  |  |  |  |
|---------------------------------------------|--|--------------------------|----------|------------------------|--|--------|----------|---------|--|--|--|--|--|--|
|                                        |  | ThreeMonths EndedJune 30 |          | Six Months EndedJune30 |  |
|                                        |  | 2005                     |          | 2005                   |  |
| Netrealized and unrealizedgains*            |  | $                        | 132.61   |                   |  | $      | 95.69    |    |  |
| InterestIncome                              |  |                     | 5.27     |                   |  |   | 9.73     |    |  |
| Expenses**                                  |  |                     | (0.05    | )                 |  |   | (0.09    | )  |  |
| Increasefor theperiod                       |  |                     | 137.83   |                   |  |   | 105.33   |    |  |
| Distributions                               |  |                     | (5.27    | )                 |  |   | (9.73    | )  |  |
| NetAsset Value per Unit, beginning ofperiod |  |                     | 963.04   |                   |  |   | 1,000.00 |    |  |
| NetAsset Value per Unit, end ofperiod       |  | $                        | 1,095.60 |                   |  | $      | 1,095.60 |    |  |
| *  Includesbrokeragecommissions   |
| **  Excludesbrokeragecommissions  |
| Ratiosto average net assets:***             |  |
| Net investmentincome****                    |  |                     | 1.7      | %                 |  |   | 2.5      | %  |  |
| Operatingexpense                            |  |                     | 0.2      | %                 |  |   | 0.2      | %  |  |
| Totalreturn                                 |  |                     | 14.3     | %                 |  |   | 10.5     | %  |  |
|                                             |

|     |            |
|-----|------------|
| *** | Annualized |

|      |                                    |
|------|------------------------------------|
| **** | Interestincome less total expenses |

|  |                                                                                                                 |
|--|-----------------------------------------------------------------------------------------------------------------|
|  | The above ratios may varyfor individual investors based on the timing of capital transactionsduring the period. |

3.    Trading Activities:

ThePartnership was formed for the purpose of trading contracts in avariety of commodity interests, including derivative financialinstruments and derivative commodity instruments. The results of thePartnership's trading activities are shown in the Statements ofIncome and Expenses and Partners' Capital and are discussed inItem 2, Management's Discussion and Analysis of FinancialCondition and Results of Operations.

The Customer Agreementbetween the Partnership and CGM and the Master and CGM gives thePartnership and the Master, respectively, the legal right to netunrealized gains and losses on open futures positions.

All ofthe commodity interests owned by the Master in 2005 (and owned by thePartnership in 2004) are held for trading purposes. The average fairvalues of these interests during the six and twelve months ended June30, 2005 and December 31, 2004, based on a monthly calculation, were$6,749,869 and $3,194,280, respectively. The fair values of thesecommodity interests, including options thereon, if applicable, at June30, 2005 and December 31, 2004, were $19,253,748 and $1,582,992,respectively. Fair values for exchange traded commodity futures andoptions are based on quoted market prices for those futures andoptions. Fair values for all other financial instruments for whichmarket quotations are not readily available are based on calculationsapproved by the General Partner.

13

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SmithBarney Potomac Futures Fund L.P. Notes to FinancialStatements June 30, 2005 (Unaudited)

4.    Financial Instrument Risks:

In the normal course of its business, the Partnership eitherdirectly or through its investment in the Master, is party to financialinstruments with off-balance sheet risk, including derivative financialinstruments and derivative commodity instruments. These financialinstruments may include forwards, futures and options, whose values arebased upon an underlying asset, index, or reference rate, and generallyrepresent future commitments to exchange currencies or cash flows, topurchase or sell other financial instruments at specific terms atspecified future dates, or, in the case of derivative commodityinstruments, to have a reasonable possibility to be settled in cash,through physical delivery or with another financial instrument. Theseinstruments may be traded on an exchange or over-the-counter("OTC"). Exchange-traded instruments arestandardized and include futures and certain option contracts. OTCcontracts are negotiated between contracting parties and includeforwards and certain options.

Each of these instruments issubject to various risks similar to those related to the underlyingfinancial instruments including market and credit risk. In general, therisks associated with OTC contracts are greater than those associatedwith exchange-traded instruments because of the greater risk of defaultby the counterparty to an OTC contract.

Market risk is thepotential for changes in the value of the financial instruments tradedby the Partnership/Master due to market changes, including interest andforeign exchange rate movements and fluctuations in commodity orsecurity prices. Market risk is directly impacted by the volatility andliquidity in the markets in which the related underlying assets aretraded.

Credit risk is the possibility that a loss may occur dueto the failure of a counterparty to perform according to the terms of acontract. Credit risk with respect to exchange-traded instruments isreduced to the extent that an exchange or clearing organization acts asa counterparty to the transactions. ThePartnership's/Master's risk of loss in the event ofcounterparty default is typically limited to the amounts recognized asunrealized appreciation in the statements of financial condition andnot represented by the contract or notional amounts of the instruments.The Partnership, through its investment in the Master, has credit riskand concentration risk because the sole counterparty or broker withrespect to the Master's assets is CGM.

The General Partnermonitors and controls the Partnership's/Master's riskexposure on a daily basis through financial, credit and risk managementmonitoring systems, and accordingly believes that it has effectiveprocedures for evaluating and limiting the credit and market risks towhich the Partnership/Master is subject. These monitoring systems allowthe General Partner to statistically analyze actual trading resultswith risk-adjusted performance indicators and correlation statistics.In addition, on-line monitoring systems provide account analysis offutures, forward and option positions by sector, margin requirements,gain and loss transactions and collateral positions.

Themajority of these instruments mature within one year of June 30, 2005.However, due to the nature of the Partnership's/Master'sbusiness, these instruments may not be held tomaturity.

14

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Item2.    Management's Discussion and Analysis of FinancialCondition and Results of Operations.

Liquidity andCapital Resources

The Partnership does notengage in the sale of goods or services. Its only assets are itsinvestment in the Master and cash. The Master does not engage in thesale of goods or services. Because of the low margin deposits normallyrequired in commodity futures trading, relatively small price movementsmay result in substantial losses to the Partnership. While substantiallosses could lead to a substantial decrease in liquidity, no suchlosses occurred in the second quarter of 2005.

ThePartnership's capital consists of capital contributions, asincreased or decreased by its investment in the Master, expenses,interest income, redemptions of Redeemable Units and distributions ofprofits, if any.

For the six months ended June 30, 2005,Partnership capital increased 28.9% from $154,682,645 to$199,329,012. This increase was attributable to a net gain fromoperations of $11,984,489 coupled with the additional sales of25,384.3906 Redeemable units of Limited Partnership Interest totaling$42,260,000, which was partially offset by the redemption of 5,767.6989Redeemable Units of Limited Partnership Interest totaling $9,598,122.Future redemptions can impact the amount of funds available forinvestment in commodity contract positions in subsequent periods.

The Master's capital consists of the capitalcontributions of the partners as increased or decreased by realizedand/or unrealized gains or losses on commodity futures trading,expenses, interest income, redemptions of Units and distributions ofprofits, if any.

For the six months ended June 30, 2005,Master's capital increased 5.9% from $283,959,300 to$300,648,584. This increase was attributable to a net gain fromoperations of $29,198,776 coupled with the additional sales of307,582.8470 units totaling $307,113,300, which was partially offset bythe redemption of 33,167.7228 units totaling $32,916,124 anddistribution of interest totaling $2,747,368 to the limited partners ofthe Master. Future redemptions can impact the amount of funds availablefor investments in commodity contract positions in subsequentperiods.

Critical Accounting Policies

The preparation of financial statements in conformity withaccounting principles generally accepted in the United States ofAmerica requires management to make estimates and assumptions thataffect the reported amounts of assets and liabilities, disclosures ofcontingent assets and liabilities at the date of the financialstatements and reported amounts of revenues and expenses during thereporting period. Actual results could differ from these estimates.

All commodity interests (including derivative financialinstruments and derivative commodity instruments) are used for tradingpurposes. The commodity interests are recorded on trade date and opencontracts are recorded in the statements of financial condition at fairvalue on the last business day of the period, which represents marketvalue for those commodity interests for which market quotations arereadily available or other measures of fair value deemed appropriate bymanagement of the General Partner for those commodity interests andforeign currencies for which market quotations are not readilyavailable. Investments in commodity interests denominated in foreigncurrencies are translated into U.S. dollars at the exchange ratesprevailing on the last business day of the period. Realized gains(losses) and changes in unrealized values on open positions arerecognized in the period in which the contract is closed or the changesoccur and are included in net gains (losses) on trading of commodityinterests.

The value of the Partnership's investment in theMaster reflects the Partnership's proportional interest in thepartners' capital of the Master. All of the income and expensesand unrealized and realized gains and losses from the commoditytransactions of the Master are allocated pro rata among the investorsat the time of such determination.

Foreign currencycontracts are those contracts where the Partnership/Master agrees toreceive or deliver a fixed quantity of foreign currency for anagreed-upon price on an agreed future date. Foreign currency contractsare valued daily, and the Partnership's/Master's net equitytherein, representing unrealized gain or loss on the contracts asmeasured by the difference between the forward foreign 

15

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exchange rates at the dates of entry into thecontracts and the forward rates at the reporting date, is included inthe statements of financial condition. Realized gains (losses) andchanges in unrealized values on foreign currency contracts arerecognized in the period in which the contract is closed or the changesoccur and are included in the Statements of Income and Expenses andPartners' capital.

Results ofOperations

During the Partnership'ssecond quarter of 2005 the net asset value per Redeemable unitincreased 11.9% from $1,610.06 to $1,801.96 as compared to adecrease of 12.7% in the second quarter of 2004. The Partnershipexperienced a net trading gain before brokerage commissions and relatedfees in the second quarter of 2005 of $24,374,848. Gains were primarilyattributable to the trading of commodity futures in currencies andnon-U.S. interest rates and were partially offset by losses in energy,U.S. interest rates, metals and indices. The Partnership experienced anet trading loss before brokerage commissions and related fees in thesecond quarter of 2004 of $14,968,381. Losses were primarilyattributable to the trading of commodity futures in currencies, U.S.and non-U.S. interest rates, indices and metals and were partiallyoffset by gains in energy.

Results in the second quarter of 2005reflect improved trading conditions for the trend-following strategiesof the Advisor. April appeared to be a transition period asmacro-economic trends emerged in financial markets and continued strongthrough May and June. Commodity trading was unprofitable as marketsexperienced wide rapid swings in broad ranges.

Lower interestrates in the Europe and the U.S. were the primary drivers ofprofitability for the quarter and had a concomitant impact onstrengthening the U.S. dollar to recent highs versus the Euro, Britishpound and Swiss franc. The fixed income markets shrugged off anotherrate increase by the U.S. Federal Reserve driven by lower inflationreports, weak European markets, and improved productivity. Lowerinterest rates and strong currency trends provided substantial profitsfor the Advisor's positions. However, volatility in the globalequity markets as a result of inflationary concerns and weak earningsreports in April produced net losses in stock index trading for thequarter.

A combination of lower inflation expectations andincreased supplies disrupted prior trends and resulted in losses in thesectors for the Partnership's Advisor. Overall, the Partnershiphad a successful quarter taking advantage of trends that were availableand avoiding serious consequences in the more treacherous markets.

During the Partnership's six months ended June 30,2005 the net asset value per Redeemable unit increased 6.0% from$1,699.79 to $1,801.96 as compared to an increase of 0.3% forthe six months ended June 30, 2004. The Partnership experienced a nettrading gain before brokerage commissions and related fees during thesix months ended June 30, 2005 of $18,020,882. Gains were primarilyattributable to the trading of commodity futures in currencies, energy,U.S. and non-U.S. interest rates and metals and were partially offsetby losses in indices. The Partnership experienced a net trading gainbefore brokerage commissions and related fees for the six months endedJune 30, 2004 of $7,574,920. Gains were primarily attributable to thetrading of commodity futures in currencies, energy, U.S. and non-U.S.interest rates, and were partially offset by losses in indices andmetals.

Commodity futures markets are highly volatile.The potential for broad and rapid price fluctuations increases therisks involved in commodity trading, but also increases the possibilityof profit. The profitability of the Partnership (and the Master)depends on the existence of major price trends and the ability of theAdvisor to correctly identify those price trends. Price trends areinfluenced by, among other things, changing supply and demandrelationships, weather, governmental, agricultural, commercial andtrade programs and policies, national and international political andeconomic events and changes in interest rates. To the extent thatmarket trends exist and the Advisor is able to identify them, thePartnership (and the Master) expects to increase capital throughoperations.

Interest income on 80% of thePartnership's daily average equity allocated to it by the Masterwas earned at a 30-day U.S. Treasury bill rate determined weekly by CGMbased on the average non-competitive yield on 3-month U.S. Treasurybills maturing in 30 days. CGM may continue to maintain theMaster's assets in cash and/or place all of the Master'sassets in 90-day Treasury bills and pay the Partnership 80% ofthe interest earned on the Treasury bills purchased. CGM will retain20% of any interest earned on Treasury bills. Interest incomeallocated from the Master for the three and six months 

16

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ended June 30, 2005 increased by $724,263 and$1,293,867, respectively as compared to the unallocated amount earneddirectly for the corresponding period in 2004. The increase in interestincome is primarily due to higher net assets and higher interest ratesduring the three and six months ended June 30, 2005 as compared to thecorresponding periods in 2004.

Brokerage commissionsare calculated on the Partnership's adjusted net asset value onthe last day of each month and are affected by trading performance,additions and redemptions. Accordingly, they must be analyzed inrelation to the fluctuations in the monthly net asset values.Commissions and fees for the three and six months ended June 30, 2005increased by $955,339 and $1,626,528, respectively as compared to thecorresponding periods in 2004. The increase in brokerage commissionsand fees is due to higher net assets during the three and six monthsended June 30, 2005 as compared to the corresponding periods in2004.

Management fees are calculated as a percentage ofthe Partnership's net asset value as of the end of each month andare affected by trading performance, additions and redemptions.Management fees for the three and six months ended June 30, 2005increased by $311,870 and $536,160, respectively as compared to thecorresponding periods in 2004. The increase in management fees is dueto higher net assets during the three and six months ended June 30,2005 as compared to the corresponding periods in 2004.

Incentive fees are based on the new trading profitsgenerated by the Advisor at the end of the quarter as defined in theadvisory agreements between the Partnership, the General Partner andthe Advisor. There were no incentive fees earned for the three and sixmonths ended June 30, 2005 as well as the three months ended June 30,2004. Trading performance for the six months ended June 30, 2004resulted in incentive fees of $3,973,895.

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Item. 3    Quantitative and QualitativeDisclosures about Market Risk

All of the Partnership'sassets are subject to the risk of trading loss through its investmentin the Master. The Master is a speculative commodity pool. The marketsensitive instruments held by it are acquired for speculative tradingpurposes, and all or substantially all of the Master's assets aresubject to the risk of trading loss. Unlike an operating company, therisk of market sensitive instruments is integral, not incidental, tothe Master's main line of business.

Market movementsresult in frequent changes in the fair market value of theMaster's open positions and, consequently, in its earnings andcash flow. The Master's market risk is influenced by a widevariety of factors, including the level and volatility of interestrates, exchange rates, equity price levels, the market value offinancial instruments and contracts, the diversification effects amongthe Master's open positions and the liquidity of the markets inwhich it trades.

The Master rapidly acquires and liquidates bothlong and short positions in a wide range of different markets.Consequently, it is not possible to predict how a particular futuremarket scenario will affect performance, and the Master's pastperformance is not necessarily indicative of its future results.

Value at Risk is a measure of the maximum amount which the Mastercould reasonably be expected to lose in a given market sector. However,the inherent uncertainty of the Master's speculative trading andthe recurrence in the markets traded by the Master of market movementsfar exceeding expectations could result in actual trading ornon-trading losses far beyond the indicated Value at Risk or theMaster's experience to date (i.e., "risk ofruin"). In light of the foregoing as well as the risks anduncertainties intrinsic to all future projections, the inclusion of thequantification in this section should not be considered to constituteany assurance or representation that the Master's losses in anymarket sector will be limited to Value at Risk or by the Master'sattempts to manage its market risk.

Exchange maintenance marginrequirements have been used by the Master as the measure of its Valueat Risk. Maintenance margin requirements are set by exchanges to equalor exceed the maximum losses reasonably expected to be incurred in thefair value of any given contract in 95%-99% of anyone-day interval. Maintenance margin has been used rather than the moregenerally available initial margin, because initial margin includes acredit risk component, which is not relevant to Value atRisk.

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The following table indicates the tradingValue at Risk associated with the Master's open positions bymarket category as of June 30, 2005 and the highest, lowest and averagevalues during the three months ended June 30, 2005. All open positiontrading risk exposures of the Master have been included in calculatingthe figures set forth below. As of June 30, 2005, the Master'stotal capitalization was $300,648,584.

June 30,2005(Unaudited)

|                        |  |              |            |                          |  |                                 |        |                 |  |                      |            |        |  |        |            |        |  |        |            |        |  |  |
|------------------------|--|--------------|------------|--------------------------|--|---------------------------------|--------|-----------------|--|----------------------|------------|--------|--|--------|------------|--------|--|--------|------------|--------|--|--|
|                   |  |         |            |                     |  | ThreeMonths ended June 30, 2005 |
| Market Sector          |  | Value atRisk |            | % of TotalCapitalization |  | HighValue at Risk               |        | LowValue atRisk |  | AverageValue atRisk* |
| Currencies:            |  |
| —OTC             |  | $            | 13,085,240 |                     |  |                            | 4.35   | %          |  | $                    | 13,884,561 |   |  | $      | 12,052,514 |   |  | $      | 13,199,334 |   |
| Energy                 |  |         | 3,209,075  |                     |  |                            | 1.07   | %          |  |                 | 3,461,280  |   |  |   | 2,683,050  |   |  |   | 3,174,452  |   |
| Interest RatesU.S.     |  |         | 1,678,600  |                     |  |                            | 0.56   | %          |  |                 | 3,410,050  |   |  |   | 427,501    |   |  |   | 1,781,138  |   |
| Interest RatesNon-U.S. |  |         | 6,899,504  |                     |  |                            | 2.29   | %          |  |                 | 10,351,655 |   |  |   | 3,337,092  |   |  |   | 8,500,614  |   |
| Metals                 |  |         |       |                     |  |                            |   |            |  |                 |       |   |  |   |       |   |  |   |       |   |
| —OTC             |  |         | 551,275    |                     |  |                            | 0.18   | %          |  |                 | 640,325    |   |  |   | 222,525    |   |  |   | 442,406    |   |
| Indices                |  |         | 8,106,203  |                     |  |                            | 2.70   | %          |  |                 | 8,106,203  |   |  |   | 1,443,204  |   |  |   | 4,824,330  |   |
| Total                  |  | $            | 33,529,897 |                     |  |                            | 11.15  | %          |  |                 |       |   |  |   |       |   |  |   |       |   |
|                        |

|  |                                      |
|--|--------------------------------------|
|  | *Average of Month-end Values at Risk |

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Item 4.    Controls and Procedures

The General Partner of the Partnership, with the participation ofthe General Partner's Chief Executive Officer and the ChiefFinancial Officer, has evaluated the effectiveness of the design andoperation of its disclosure controls and procedures (as defined inRules 13a-15(e) and 15d-15(e) of the Exchange Act) with respect to thePartnership within 90 days of the filing date of this quarterly report,and based on this evaluation, has concluded that these disclosurecontrols and procedures are effective. Additionally, there were nosignificant changes in the Partnership's internal controls or inother factors that could significantly affect these controls subsequentto the date of this evaluation, including any corrective actions withregard to significant deficiencies and materialweaknesses.

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PART II. OTHERINFORMATION

Item 1.    Legal Proceedings

Thefollowing information supplements and amends our discussion set forthunder Item 3, "Legal Proceedings" in thePartnership's Annual Report on Form 10-K for the year endedDecember 31, 2004 and under Part II, Item 1, "LegalProceedings" in the Partnership's Quarterly Reporton Form 10-Q for the quarter ended March 31, 2005.

Enron-Related Civil Actions

On June 13, 2005, Citigroupannounced a settlement of the Enron class action litigation (Newby, etal. v. Enron Corp., et al.) currently pending in the United StatesDistrict Court for the Southern District of Texas, Houston Division.This settlement resolves all claims against Citigroup brought on behalfof the class of purchasers of publicly traded equity and debtsecurities issued by Enron and Enron-related entities between September9, 1997 and December 2, 2001. The settlement, which involves a pre-taxpayment of $2.0 billion to the settlement class, is fully covered byCitigroup's existing litigation reserves. It is subject toapproval by the Board of Regents of the University of California (thelead plaintiff), The Citigroup Board and the District Court inTexas.

Mutual Funds

On May 31, 2005, Citigroupannounced that Smith Barney Fund Management LLC and Citigroup GlobalMarkets completed a settlement with the SEC resolving an investigationby the SEC into matters relating to arrangements between certain SmithBarney mutual funds, an affiliated transfer agent and an unaffiliatedsub-transfer agent. Under the terms of the settlement, Citigroup agreedto pay fines totaling $208.1 million. The settlement in which Citigroupneither admitted nor denied any wrongdoing or liability, includesallegations of willful misconduct by Smith Barney Fund Management LLCand Citigroup Global Markets in failing to disclose aspects of thetransfer agent arrangements to certain mutual fundinvestors.

Item 2.    Unregistered Sales of Equity Securitiesand Use of Proceeds

For the three months ended June 30, 2005,there were additional sales of 9,345.8413 Redeemable Units of LimitedPartnership totaling $15,343,000. The Redeemable Units were issued inreliance upon applicable exemptions from registration under Section4(2) of the Securities Act of 1933, as amended, and Section 506 ofRegulation D promulgated thereunder.

Proceeds from the sale ofadditional Redeemable Units are used in the trading of commodityinterests including futures contracts, options and forwardscontracts.

The following chart sets forth thepurchases of Redeemable Units by thePartnership.

|                             |  |                                               |            |                                           |  |                                                                                           |          |                                                                                                                    |  |        |     |        |  |        |     |        |  |  |
|-----------------------------|--|-----------------------------------------------|------------|-------------------------------------------|--|-------------------------------------------------------------------------------------------|----------|--------------------------------------------------------------------------------------------------------------------|--|--------|-----|--------|--|--------|-----|--------|--|--|
| Period                      |  | (a)Total Numberof Shares(or Units) Purchased* |            | (b)AveragePrice Paid perShare (or Unit)** |  | (c) TotalNumberof Shares (or Units)Purchased as Partof PubliclyAnnouncedPlans or Programs |          | (d) Maximum Number(orApproximateDollar Value) of Shares(or Units) thatMay YetBePurchased Under thePlans orPrograms |
| April 1, 2005 -April30,2005 |  |                                          | 799.1868   |                                      |  | $                                                                                         | 1,614.57 |                                                                                                               |  |   | N/A |   |  |   | N/A |   |
| May1, 2005 -May 31,2005     |  |                                          | 2,265.2357 |                                      |  | $                                                                                         | 1,687.16 |                                                                                                               |  |   | N/A |   |  |   | N/A |   |
| June1, 2005 -June 30,2005   |  |                                          | 612.5297   |                                      |  | $                                                                                         | 1,801.96 |                                                                                                               |  |   | N/A |   |  |   | N/A |   |
| Total                       |  |                                          | 3,676.9522 |                                      |  | $                                                                                         | 1,701.23 |                                                                                                               |  |   | N/A |   |  |   | N/A |   |
|                             |

|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | *Generally, Limited Partners are permitted to redeem their RedeemableUnits as of the end of each month on 10 days' notice to theGeneral Partner. Under certain circumstances, the General Partner cancompel redemption but to date the General Partner has not exercisedthis right. Purchases of Redeemable Units by the Partnership reflectedin the chart above were made in the ordinary course of thePartnership's business in connection with effecting redemptionsfor Limited Partners. |

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|  |                                                                                                                                           |
|--|-------------------------------------------------------------------------------------------------------------------------------------------|
|  | ** Redemptions of Redeemable Unitsare effected as of the last day of each month at the Net Asset Valueper Redeemable Unit as of that day. |

Item 3.    DefaultsUpon Senior Securities – None

Item 4.    Submission ofMatters to a Vote of Security Holders – None

Item5.    Other Information – None

Item6.    Exhibits

The exhibits required to be filed by Item 601of Regulation S-1 are incorporated herein by reference to the exhibitindex of the Annual Report on Form 10-K for the period ended December31, 2004.

Exhibit - 31.1 - Rule 13a-14(a)/15d-14(a)Certification(Certification of President and Director)

Exhibit – 31.2 – Rule 13a-14(a)/15d-14(a)Certification(Certification of Chief Financial Officer andDirector)

Exhibit – 32.1 – Section 1350Certification(Certification of President and Director).

Exhibit – 32.2 – Section 1350Certification(Certification of Chief Financial Officer andDirector).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,the registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized.

|                                       |  |                                                                                                                                          |  |  |  |  |
|---------------------------------------|--|------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| SMITHBARNEY POTOMAC FUTURES FUND L.P. |
| By:                                   |  | Citigroup ManagedFutures LLC (General Partner)                                                                                           |
| By:                                   |  | /s/ David J.Vogel David J. Vogel, President and Director                                                                                 |
| Date: August 9,2005                   |
| By:                                   |  | /s/Daniel R. McAuliffe, Jr.         Daniel R. McAuliffe,Jr. Chief Financial Officer and Director |
| Date: August 9,2005                   |
|                                       |

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