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 333-61961


            SALOMON SMITH BARNEY GLOBAL DIVERSIFIED FUTURES FUND L.P.
             (Exact name of registrant as specified in its charter)


          New York                                     13-4015586
(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
$89,227,994 were outstanding and held by non-affiliates.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      None


<PAGE>


32

                                     PART I

Item 1. Business.

         (a) General  development  of  business.  Salomon  Smith  Barney  Global
Diversified  Futures  Fund L.P.  (the  "Partnership")  is a limited  partnership
organized under the laws of the State of New York, on June 15, 1998 to engage in
speculative trading of a diversified portfolio of commodity interests, including
futures contracts, options and forwards. The commodity interests that are traded
by the  Partnership  are  volatile  and involve a high degree of market  risk. A
total of  100,000  Units of  Limited  Partnership  Interest  in the  Partnership
("Units") were offered to the public.  Sales of additional  Units and additional
general  partner  contributions  and  redemptions  of Units  for the year  ended
December 31, 1999 are reported in The Statement of Partners' Capital on page F-6
under "Item 8.  Financial  Statement and  Supplementary  Data".  A  Registration
Statement  on Form S-1  relating  to the public  offering  became  effective  on
November 25, 1998.  Between November 25, 1998  (commencement of offering period)
and February 1, 1999, 33,380 Units were sold at $1,000 per Unit. Proceeds of the
offering  were held in an escrow  account and were  transferred,  along with the
general partner's  contribution of $338,000 to the Partnership's trading account
on February 2, 1999 when the Partnership commenced trading.
         The  General  Partner  has  agreed to make  capital  contributions,  if
necessary, so that its general partnership interest will be equal to the greater

                                       2

<PAGE>


of (i) 1% of the partners' contributions to the Partnership or (ii) $25,000. The
Partnership  will be  liquidated  upon the  first  of the  following  to  occur:
December 31, 2018;  the net asset value of a Unit decreases to less than $400 as
of the close of any business day; or under certain  circumstances  as defined in
the Limited Partnership  Agreement of the Partnership (the "Limited  Partnership
Agreement").
         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.
     As of December 31, 1999, all commodity  trading  decisions are made for the
Partnership by Campbell & Company,Inc. ("Campbell"), Eagle Trading Systems, Inc.
("Eagle"), Eckhardt Trading Company ("Eckhardt") and Rabar Market Research, Inc.
("Rabar")  (collectively,  the  "Advisors").  None of the Advisors is affiliated
with one another,  the General  Partner or SSB. The Advisors are not responsible
for the organization or operation of the Partnership.

                                       3
<PAGE>

         Pursuant to the terms of the  Management  Agreements  (the  "Management
Agreements"),  the  Partnership is obligated to pay each Advisor:  (i) a monthly
management  fee equal to 1/6 of 1% (2% per year) of month-end Net Assets (except
that  Eagle's  management  fee will be  reduced  by  Eagle's  pro rata  share of
customary and routine  administrative  expenses of the Partnership) allocated to
each  Advisor  as of the end of each  month and (ii) an  incentive  fee  payable
annually equal to 20% of the New Trading  Profits,  as defined in the Management
Agreements,  except  Eagle,  which will receive an  incentive  fee of 23% of New
Trading Profits, earned by each Advisor for the Partnership.
         The  Partnership  has entered into a Customer  Agreement  with SSB (the
"Customer  Agreement")  which provides that the  Partnership  will pay SSB (i) a
monthly  brokerage fee equal to 9/20 of 1% of month-end Net Assets  allocated to
the  Advisors  (5.4% per year) in lieu of brokerage  commissions  on a per trade
basis. For the period from February 2, 1999 (commencement of trading operations)
to July 31, 1999,  the  Partnership  paid SSB brokerage  commissions  at $54 per
round turn for transactions entered into by Campbell.  SSB pays a portion of its
brokerage  fees to its  financial  consultants  who have sold  Units and who are
registered as associated  persons with the Commodity Futures Trading  Commission
(the "CFTC").  The Partnership  pays for National  Futures  Association  ("NFA")
fees,  exchange and  clearing  fees,  give-up and user fees and floor  brokerage
fees.  The  Customer  Agreement  between  the  Partnership  and  SSB  gives  the

                                       4
<PAGE>

Partnership the legal right to net unrealized  gains and losses.  Brokerage fees
will be paid for the life of the  Partnership,  although  the rate at which such
fees are paid may be changed.
         In addition,  SSB pays the  Partnership  interest on 80% of the average
daily  equity  maintained  in cash in its account  during each month at a 30-day
U.S.  Treasury  bill  rate  determined  weekly  by  SSB  based  on  the  average
non-competitive  yield on 3-month U.S.  Treasury  bills maturing in 30 days from
the date on which such weekly rate is determined.
         (b) Financial  information about industry  segments.  The Partnership's
business  consists  of  only  one  segment,  speculative  trading  of  commodity
interests.  The Partnership  does not engage in sales of goods or services.  The
Partnership's  net loss from  operations  for the period  from  February 2, 1999
(commencement  of trading  operations)  to December  31, 1999 is set forth under
"Item 6. Select Financial Data".  Partnership's capital as of December 31, 1999,
was $87,129,455.
         (c)      Narrative description of business.
                  See Paragraphs (a) and (b) above.
                  (i) through (x) - Not applicable.
                  (xi) through (xii) - Not applicable.
                  (xiii) - The Partnership has no employees.
         (d) Financial  Information About Geographic Areas. The Partnership does
not  engage  in sales of goods or  services  or own any long  lived  assets  and
therefore this item is not applicable.

                                       5

<PAGE>

Item 2.  Properties.
         The  Partnership  does not own or lease  any  properties.  The  General
Partner operates out of facilities provided by its affiliate, SSB.
Item 3.  Legal Proceedings.
                  There have been no material administrative,  civil or criminal
actions  within  the  past  five  years  against  SSB or  any of its  individual
principals and no such actions are currently pending, except as follows.
         In  September  1992,  Harris  Trust and  Savings  Bank (as  trustee for
Ameritech  Pension Trust),  Ameritech  Corporation,  and an officer of Ameritech
sued  Salomon  Brothers  Inc  ("SBI") and Salomon  Brothers  Realty  Corporation
("SBRC")  in the U.S.  District  Court for the  Northern  District  of  Illinois
(Harris  Trust  Savings  Bank,  not  individually  but solely as trustee for the
Ameritech Pension Trust,  Ameritech Corporation and John A. Edwardson v. Salomon
Brothers Inc and Salomon  Brothers  Realty  Corp.).  The complaint  alleged that
purchases by Ameritech  Pension Trust from the Salomon entities of approximately
$20.9  million in  participations  in a portfolio  of motels  owned by Motels of
America,  Inc.  and Best Inns,  Inc.  violated the  Employee  Retirement  Income
Security Act ("ERISA"),  the Racketeer  Influenced and Corrupt  Organization Act
("RICO") and state law. SBI had acquired the participations  issued by Motels of
America and Best Inns to finance  purchases of motel  portfolios and sold 95% of
three  such  issues  and 100% of one  such  issue to  Ameritech  Pension  Trust.
Ameritech Pension Trust's  complaint sought (1)  approximately  $20.9 million on

                                       6
<PAGE>

the ERISA  claim,  and (2) in excess  of $70  million  on the RICO and state law
claims as well as other relief.  In various  decisions  between  August 1993 and
July 1999, the courts hearing the case have dismissed all of the  allegations in
the complaint against the Salomon entities.  In October 1999, Ameritech appealed
to the U.S.  Supreme Court and in January 2000, the Supreme Court agreed to hear
the case 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
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.

                                       7
<PAGE>

         In June 1998,  complaints were filed in the U.S. District Court for the
Eastern District of Louisiana in two actions (Board of  Liquidations,  City Debt
of the City of New  Orleans v. Smith  Barney  Inc.  et ano.  and The City of New
Orleans v. Smith Barney Inc. et ano.),  in which the City of New Orleans seeks a
determination that Smith Barney Inc. and another underwriter will be responsible
for any  damages  that the City may incur in the event the IRS denies tax exempt
status to the  City's  General  Obligation  Refunding  Bonds  Series  1991.  The
complaints  were  subsequently  amended.  SSB has asked the court to dismiss the
amended complaints.  In May 1999, the Court denied SSB's motion to dismiss,  but
stayed the  litigation  because the matter was not ripe. In March 2000, the city
filed a notice of discontinuance dismissing the complaint.
         In November  1998,  a class  action  complaint  was filed in the United
States  District Court for the Middle District of Florida (Dwight Brock as Clerk
for Collier  County v. Merrill  Lynch,  et al.).  The  complaint  alleged  that,
pursuant to a nationwide conspiracy, 17 broker-dealer defendants, including SSB,
charged excessive mark-ups in connection with advanced  refunding  transactions.
Among  other  relief,  plaintiffs  sought  compensatory  and  punitive  damages,
restitution  and/or  rescission of the  transactions and disgorgement of alleged
excessive  profits.  In  October  1999,  the  plaintiff  filed a second  amended
complaint. SSB has asked the court to dismiss the amended complaint.

                                       8
<PAGE>

         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
by a hedge fund and its investment  advisor  against SSB in the Supreme Court of
the  State of New  York,  County of New York  (MKP  Master  Fund,  LDC et al. v.
Salomon  Smith Barney Inc.).  The complaint  included  allegations  that,  while
acting as prime  broker for the hedge fund,  SSB  breached  its  contracts  with
plaintiffs,  misused their monies, and engaged in tortious  (wrongful)  conduct,
including  breaching  its fiduciary  duties.  SSB asked the court to dismiss the
complaint  in full.  In  October  1999,  the court  dismissed  the tort  claims,
including the breach of fiduciary  duty claims.  The court allowed the breach of
contract and misuse of money  claims to stand.  In December  1999,  SSB filed an
answer and asserted counterclaims against the investment advisor. In response to
plaintiff's motion to strike the counterclaims, in January 2000, SSB amended its

                                       9
<PAGE>

counterclaims  against  the  investment  advisor  to  seek  indemnification  and
contribution. Plaintiffs moved to strike SSB's amended counterclaims in February
2000. SSB will continue to contest this lawsuit vigorously.
         In the  course of its  business,  SSB,  as a major  futures  commission
merchant and  broker-dealer is a party to various claims and routine  regulatory
investigations  and proceedings  that the general partner believes do not have a
material  effect on the business of SSB. Item 4. Submission of Matters to a Vote
of Security Holders. There were no matters submitted to the security holders for
a vote during the last fiscal year covered by this report.
                                     PART II
Item 5.   Market for Registrant's Common Equity and Related
          Security Holder Matters.
     (a)  Market  Information.  The Partnership has issued no stock. There is no
          established  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 2,518.
     (c)  Distribution.  The  Partnership did not declare a distribution in 1999
          and 1998.
     (d)  Use of Proceeds.  For the period ended  December 31, 1999,  there were
          additional  sales  of  60,121.0615  Units  totaling   $59,480,000  and
          contributions  by  the  General  Partner  representing  603.9704  Unit
          equivalents  totaling  $598,000.  Proceeds from the sale of additional
          Units are used in the trading of commodity interests including futures
          contracts, options and forward contracts.

                                       10
<PAGE>

Item 6. Selected Financial Data. The Partnership commenced trading operations on
February 2, 1999.  Realized and unrealized trading losses,  interest income, net
loss and  decrease in net asset  value per Unit for the period from  February 2,
1999 (commencement of trading  operations) to December 31, 1999 and total assets
at December 31, 1999 and 1998 were as follows:
                                                1999                    1998
                                            -------------           ------------
Realized and unrealized trading
 losses net of brokerage
 Commissions and clearing fees
 of $3,196,873                              $(3,647,829)              $  -0-

Interest income                               2,047,606                  -0-
                                             =============             =========
Net loss                                    $(3,911,911)              $  -0-
                                            =============             =========

Decrease in net asset
 Value per Unit                                 $(48.61)              $  -0-
                                                =========             =========

Total assets                                $89,065,209               $ 2,000
                                            =============             =========


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, 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

                                       11
<PAGE>

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 futures contracts which are
traded in sufficient volume to permit,  in the opinion of the Advisors,  ease of
taking and liquidating positions.
         (2)  The   Partnership   diversifies   its   positions   among  various
commodities.
         (3) No Advisor initiates  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.
         (4)  The  Partnership  may  occasionally  accept  delivery  of  a
commodity.  Unless such  delivery is  disposed  of promptly by  retendering  the
warehouse receipt  representing the delivery to the appropriate  clearing house,
the physical commodity position will be fully hedged.
         (5) 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.
         (6) The  Partnership  will not  utilize  borrowings  except  short-term
borrowings if the Partnership takes delivery of any cash commodities.

                                       12
<PAGE>

         (7) The Advisor 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 futures  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.
         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
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).

                                       13
<PAGE>

         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  the  Partnership  will cease  trading
operations  and  liquidate  all open  positions  upon the  first to occur of the
following:  (i) December 31, 2018;  (ii) the vote to dissolve the Partnership by
limited  partners  owning more than 50% of the Units;  (iii)  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 New York  Revised  Limited  Partnership  Act
unless the  Partnership  is continued  as  described in the Limited  Partnership
Agreement;  (iv) Net Asset  Value per Unit falls to less than $400 as of the end
of any  trading  day;  or (v) 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 consists of the capital contributions of
the partners as increased or decreased by gains or losses on commodity  trading,
and by expenses,  interest  income,  redemptions of Units and  distributions  of
profits,  if any.  Gains or  losses  on  commodity  futures  trading  cannot  be
predicted.  Market moves in  commodities  are  dependent  upon  fundamental  and
technical  factors  which the  Partnership  may or may not be able to  identify.

                                       14
<PAGE>

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.  In  addition,  the amount of
interest  income  payable by SSB is dependent upon interest rates over which the
Partnership has no control.
         No  forecast  can be made as to the level of  redemptions  in any given
period.  Beginning at the end of six full months after trading  commences August
31, 1999, a Limited Partner may cause all or some of his Units to be redeemed by
the  Partnership at the Redemption Net Asset Value thereof as of the last day of
each month,  ending at least three months after such Units have been issued,  on
ten days'  written  notice to the  General  Partner.  No fee will be charged for
redemptions.  For the year  ended  December  31,  1999,  2,862.0307  Units  were
redeemed totaling $2,754,634.  Redemption Net Asset Value differs from Net Asset
Value calculated for financial  reporting purposes in that the accrued liability
for reimbursement of offering and organization expenses for the Initial Offering
Period will not be included in the calculation of Redemption Net Asset Value.
         Offering and organization expenses of approximately $700,000,  relating
to the issuance and marketing of the Partnership's  Units offered were initially
paid by SSB.  These costs are being  reimbursed to SSB by the  Partnership in 24
equal monthly  installments  (together with interest at the prime rate quoted by
the Chase Manhattan Bank).

                                       15
<PAGE>

         As of December 31, 1999,  $297,315 of these costs have been  reimbursed
to SSB, by the Partnership.
         In addition,  the Partnership has recorded interest expense of $40,947,
for the period ended December 31, 1999, which is included in other expenses.
         The remaining deferred liability for these costs due to SSB of $402,685
(exclusive of interest charges) will not reduce Net Asset Value per Unit for any
purpose (other than financial reporting),  including calculation of advisory and
brokerage fees and the redemption value of Units.
         The  Partnership  continues  to offer  Units at the Net Asset Value per
Unit as of the end of each quarter.  For the year ended December 31, 1999, there
were   additional   sales  of  60,121.0615   Units  totaling   $59,480,000   and
contributions  by the General  Partner  representing  603.9704 Unit  equivalents
totaling $598,000.
         (c)      Results of Operations.
         For  the  period  from  February  2,  1999   (commencement  of  trading
operations)  to December 31, 1999,  the net asset value per Unit  decreased 4.9%
from $1,000 to $951.39. There were no operations for the year ended December 31,
1998.
         The  Partnership  experienced  net trading  losses of  $450,956  before
commissions and expenses for the year ended December 31, 1999. These losses were
primarily attributable to the trading of commodity futures in

                                       16
<PAGE>

currencies,  metals,  livestock,  softs  and  non-U.S.  interest  rates and were
partially  offset by gains  recognized  in the trading of  commodity  futures in
indices, grains, U.S. interest rates and energy.
         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  Advisor to
identify  those price trends  correctly.  Price trends are  influenced by, among
other things, changing supply and demand relationships,  weather,  governmental,
agricultural,   commercial  and  trade  programs  and  policies,   national  and
international  political and economic  events and changes in interest  rates. To
the extent that market  trends  exist and the Advisor is 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.


                                       17
<PAGE>

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
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.

                                       18
<PAGE>

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.
                  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.

                                       19
<PAGE>

         (e)      New Accounting Pronouncements
         The Partnership adopted Statement on Financial Accounting Standards No.
133 ("SFAS 133"),  Accounting For Derivative  Financial  Instruments and Hedging
Activities.   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.

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

                                       20
<PAGE>

flow. The Partnership's  market risk is influenced by a wide variety of factors,
including the level and volatility of interest  rates,  exchange  rates,  equity
price  levels,  the market value of financial  instruments  and  contracts,  the
diversification results among the Partnership's open positions and the liquidity
of the markets in which it trades.
         The  Partnership  rapidly  acquires and liquidates  both long and short
positions in a wide range of different markets. Consequently, it is not possible
to predict how a particular future market scenario will affect performance,  and
the Partnership's  past performance is not necessarily  indicative of its future
results.
         Value at Risk is a measure of the maximum amount which the  Partnership
could  reasonably  be expected to lose in a given market  sector.  However,  the
inherent uncertainty of the Partnership's speculative trading and the recurrence
in the markets  traded by the  Partnership  of market  movements  far  exceeding
expectations could result in actual trading or non-trading losses far beyond the
indicated Value at Risk or the Partnership's  experience to date (i.e., "risk of
ruin").  In  light  of the  foregoing  as well as the  risks  and  uncertainties
intrinsic  to all  future  projections,  the  inclusion  of  the  quantification
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.

                                       21
<PAGE>

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  Advisor  is  quantified  below  in  terms  of  Value  at  Risk.  Due to the
Partnership's  mark-to-market  accounting,  any  loss in the  fair  value of the
Partnership's open positions is directly reflected in the Partnership's earnings
(realized and 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

                                       22
<PAGE>

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.
         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.

                                       23
<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 $87,129,455.
<TABLE>
<CAPTION>

                                December 31, 1999

                                                                         Year to Date
                                                  % of Total         High           Low
Market Sector                 Value at Risk     Capitalization   Value at Risk  Value at Risk
----------------------------------------------------------------------------------------------
<S>                                 <C>               <C>             <C>             <C>

Currencies
- OTC Contracts                  $ 558,527           0.64%        $1,002,296     $  984,599
- Exchange Traded Contracts        822,857           0.94%         1,021,552        334,359
Energy                             573,400           0.66%         1,312,030        710,300
Grains                             185,580           0.21%           245,800        104,800
Interest rates U.S.                596,952           0.69%         1,006,783        367,400
Interest rates Non-U.S.          1,576,125           1.81%         2,040,413      1,217,949
Metals                             747,900           0.86%         1,004,400        438,150
Softs                              149,600           0.18%           185,450         47,200
Livestock                           12,000           0.01%            32,800          1,800
Indices                          1,787,970           2.05%         2,717,417        724,053
                                ----------          ------

Total                           $7,010,911           8.05%
                                ==========          ======
</TABLE>


There was no trading in the year ended December 31, 1998.

                                       24
<PAGE>


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

                                       25
<PAGE>

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

                                       26
<PAGE>

         The  following   were  the  primary   trading  risk  exposures  of  the
Partnership as of December 31, 1999, by market sector.
         Interest Rates.  Interest rate risk is the principal market exposure of
the  Partnership.  Interest  rate  movements  directly  affect  the price of the
futures  positions held by the Partnership and indirectly the value of its stock
index and currency positions.  Interest rate movements in one country as well as
relative  interest  rate  movements  between  countries  materially  impact  the
Partnership's profitability. The Partnership's primary interest rate exposure is
to interest rate  fluctuations in the United States and the other G-7 countries.
However,  the Partnership also takes futures positions on the government debt of
smaller nations -- e.g.,  Australia.  The General Partner  anticipates  that G-7
interest rates will remain the primary market  exposure of the  Partnership  for
the foreseeable future. The changes in interest rates which have the most effect
on the  Partnership are changes in long-term,  as opposed to short-term,  rates.
Consequently,  even a material  change in  short-term  rates  would have  little
effect on the Partnership were the medium- to long-term rates to remain steady.
         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 Partnership's  major exposures have typically
been in the dollar/yen,  dollar/mark  and  dollar/pound  positions.  The General
Partner does not anticipate that the risk profile of the Partnership's  currency


                                       27
<PAGE>

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 Financial
Times (England),  Nikkei (Japan) and SFE (Australian) stock indices. The General
Partner  anticipates  little,  if any,  trading in non-G-7  stock  indices.  The
Partnership  is primarily  exposed to the risk of adverse price trends or static
markets in the major U.S., European and Japanese indices.  (Static markets would
not cause major market  changes but would make it difficult for the  Partnership
to avoid being "whipsawed" into numerous small losses.)
         Metals.   The  Partnership's   primary  metal  market  exposure  is  to
fluctuations  in the price of gold and silver.  Although  the Advisor  will from
time to time trade base metals such as aluminum,  copper and tin, the  principal
market  exposures  of the  Partnership  have  consistently  been in the precious
metals,  gold and silver.  The  Advisor's  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

                                       28

<PAGE>

over  this  period,  and the  Advisor  has 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.

Qualitative Disclosures Regarding Non-Trading RiskExposure
         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.

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 Advisor  concerning
the Partnership's overall risk profile. If the General Partner felt it necessary
to do so, the General  Partner could require the Advisor to close out individual
positions  as  well  as  enter  certain   positions  traded  on  behalf  of  the
Partnership. However, any such intervention would be a highly unusual event. The


                                       29
<PAGE>

General  Partner  primarily  relies on the Advisor's  own risk control  policies
while maintaining a general  supervisory  overview of the  Partnership's  market
risk exposures.
         The Advisor  applies its own risk  management  policies to its trading.
The Advisor often  follows  diversification  guidelines,  margin limits and stop
loss points to exit a position.  The Advisor's research of risk management often
suggests ongoing modifications to its trading programs.
         As part of the General  Partner's risk management,  the General Partner
periodically  meets with the Advisor to discuss its risk  management and to look
for  any  material  changes  to the  Advisor's  portfolio  balance  and  trading
techniques.  The  Advisor  is  required  to notify  the  General  Partner of any
material changes to its programs.

                                       30
<PAGE>


Item 8.   Financial Statements and Supplementary Data.




            SALOMON SMITH BARNEY GLOBAL DIVERSIFIED 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 period from February 2,1999
                  (commencement of trading operations)
                  to December 31, 1999.                            F-5

                  Statement of Partners' Capital for
                  the period from June 15, 1998
                  (date Partnership was organized) to
                  December 31, 1999.                               F-6

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














                                       F-1

                                    Continued


<PAGE>





                           To The Limited Partners of
            Salomon Smith Barney Global Diversified 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, Salomon Smith Barney
     Global Diversified 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
   Salomon Smith Barney Global Diversified 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 Salomon Smith Barney
Global  Diversified  Futures  Fund L.P.  at  December  31, 1999 and 1998 and the
results of its  operations  for the period from June 15, 1998 (date  Partnership
was organized) to 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>



                              Salomon Smith Barney
                      Global Diversified Futures Fund L.P.
                        Statement of Financial Condition
                           December 31, 1999 and 1998
<TABLE>
<CAPTION>
                                                                                1999                1998
<S>                                                                             <C>                 <C>
   Assets:
   Equity in commodity futures trading account:
       Cash (Note 3c)                                                         $85,369,042             $2,000
       Net unrealized appreciation on open futures contracts                    3,293,682                 --
       Commodity options owned, at market value (cost $242,328)                   105,484                 --
                                                                         ---------------     ---------------
                                                                               88,768,208              2,000
   Interest receivable                                                            297,001                 --
                                                                              $89,065,209             $2,000
                                                                          ---------------     --------------
                                                                          ---------------     --------------



   Liabilities and Partners' Capital:
   Liabilities:
     Accrued expenses:
      Commissions                                                               $411,280            $     --
      Management fees                                                            147,997                  --
      Incentive fees                                                             213,409                  --
      Professional fees                                                          173,740                  --
      Other                                                                       30,222                  --
    Due SSB (Note 6)                                                             434,877                  --
    Redemptions Payable (Note 5)                                                 565,176                  --
                                                                         ---------------     ---------------
                                                                               1,976,701                  --
   Partners' capital (Notes 1 and 7):
     General Partner, 941.9704 and 1 Unit equivalent outstanding
      in 1999 and 1998, respectively                                             895,767               1,000
     Limited Partners, 90,639.0308 and 1 Unit of Limited Partnership
      Interest outstanding in 1999 and 1998, respectively                     86,192,741               1,000
                                                                         ---------------     ---------------
                                                                              87,088,508               2,000
                                                                         ---------------     ---------------
                                                                             $89,065,209              $2,000
                                                                          ---------------     --------------
                                                                          ---------------     --------------

</TABLE>

                See notes to financial statements.

                                      F-4
<PAGE>


                              Salomon Smith Barney
                      Global Diversified Futures Fund L.P.
                        Statement of Income and Expenses
                      for the period from February 2, 1999
                      (commencement of trading operations)
                              to December 31, 1999


                                                                       1999
Income:
  Net loss on trading of commodity interests:
   Realized losses on closed positions                              $(3,607,794)
   Change in unrealized gain on open positions                        3,156,838
                                                                  -------------
                                                                       (450,956)
  Less, Brokerage commissions including
   clearing fees of $87,226 (Note 3c)                                (3,196,873)
                                                                  -------------
  Net realized and unrealized losses                                 (3,647,829)
   Interest income (Notes 3c)                                         2,047,606
                                                                  -------------
                                                                     (1,600,223)
                                                                  -------------
 Expenses:
   Management fees (Note 3b)                                          1,119,609
   Incentive fees (Note 3b)                                             213,409
   Professional fees                                                    235,716
   Other expenses                                                        83,901
                                                                  -------------
                                                                      1,652,635
                                                                  -------------
 Net loss                                                           $(3,252,858)
                                                                  -------------
                                                                  -------------
Net loss per Unit of Limited Partnership Interest and
  General Partner Unit equivalent (Notes 1 and 7)                   $    (28.29)
                                                                  -------------
                                                                  -------------


 See notes to financial statements.

                                      F-5
<PAGE>


                              Salomon Smith Barney
                      Global Diversified Futures Fund L.P.
                         Statement of Partners' Capital
                        for the period from June 15, 1998
                        (date Partnership was organized)
                              to December 31, 1999


<TABLE>
<CAPTION>

                                                         Limited            General
                                                        Partners            Partner            Total
<S>                                                         <C>                 <C>               <C>
Initial capital contributions                               $1,000              $1,000            $2,000
Proceeds from offering of 33,379 Units of Limited
  Partnership Interest and General Partner's
  contribution representing 337 Unit equivalents
  (Note 1)                                              33,379,000             337,000        33,716,000
Offering and organization costs (Note 6)                  (693,000)             (7,000)         (700,000)
                                                    --------------      --------------   ---------------
Opening Partnership capital for operations              32,687,000             331,000        33,018,000
Net loss                                                (3,219,625)            (33,233)       (3,252,858)
Sale of 60,121.0615 Units of Limited Partnership
  Interest and General Partner's contribution
  representing 603.9704 Unit equivalents                59,480,000             598,000        60,078,000
Redemption of 2,862.0307 Units of Limited
  Partnership Interest                                  (2,754,634)                 --        (2,754,634)
                                                   ---------------      --------------   ---------------
Partners' capital at December 31, 1999                 $86,192,741            $895,767       $87,088,508
                                                   ---------------     ---------------    --------------
                                                   ---------------     ---------------    --------------
</TABLE>





      See notes to financial statements.


                                      F-6

<PAGE>


                              Salomon Smith Barney
                      Global Diversified Futures Fund L.P.
                          Notes to Financial Statements


1.  Partnership Organization:

    Salomon   Smith  Barney   Global   Diversified   Futures   Fund  L.P.   (the
    "Partnership")  is a  limited  partnership  organized  under the laws of the
    State of New York,  on June 15, 1998 to engage in  speculative  trading of a
    diversified  portfolio of commodity interests,  including futures contracts,
    options  and  forwards.  The  commodity  interests  that are  traded  by the
    Partnership are volatile and involve a high degree of market risk.

    Between November 25, 1998 (commencement of the offering period) and February
    1, 1999, 33,380 Units of Limited Partnership Interest ("Units") were sold at
    $1,000 per Unit. The proceeds of the initial offering were held in an escrow
    account  until  February 2, 1999, at which time they were turned over to the
    Partnership for trading.

    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, 2018; the net asset value of a Unit decreases to less than $400
    as of a close of any business day; or under certain other  circumstances  as
    defined in the Limited Partnership Agreement.

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
       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.

                                      F-7
<PAGE>

    d. 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 Agreement:

       The General  Partner,  on behalf of the  Partnership,  has entered into a
       Management Agreement with Campbell & Company,  Inc.  ("Campbell"),  Eagle
       Trading Systems, Inc. ("Eagle"), Eckhardt Trading Company ("Eckhard") and
       Rabar Market Research,  Inc.  ("Rabar")  (collectively,  the "Advisors"),
       registered  commodity trading  advisors.  The Advisors are not affiliated
       with one another and none is affiliated  with the General  Partner or SSB
       and  are  not  responsible  for  the  organization  or  operation  of the
       Partnership.  The Partnership will pay each Advisor a monthly  management
       fee equal to 1/6 of 1% (2% a year) of month-end  Net Assets  allocated to
       the  Advisor.  In  addition,  the  Partnership  is  obligated to pay each
       Advisor an incentive fee payable annually equal to 20% of the New Trading
       Profits, as defined in the Management Agreements,  earned by each Advisor
       for the  Partnership,  except for Eagle,  which will receive an incentive
       fee of 23% of New Trading Profits.

    c. Customer Agreement:

       The Partnership has entered into a Customer Agreement which provides that
       the Partnership will pay SSB a monthly  brokerage fee equal to 9/20 of 1%
       (5.4% per year) of  month-end  Net Assets,  as defined,  allocated to the
       Advisors,  in lieu of brokerage commissions on a per trade basis. For the
       period from February 2, 1999 (commencement of trading operations) to July
       31, 1999, the Partnership paid SSB brokerage commissions at $54 per round
       turn for transactions entered into by Campbell. SSB will pay a portion of
       brokerage fees to its financial  consultants  who have sold Units in this
       Partnership. Brokerage fees will be paid for the life of the Partnership,
       although  the rate at which  such  fees  are  paid  may be  changed.  The
       Partnership  will pay for  National  Futures  Association  ("NFA")  fees,
       exchange,  clearing,  user,  give-up and floor brokerage fees. All of the
       Partnership's  assets are deposited in the Partnership's  account at SSB.
       The Partnership's cash is deposited by SSB in segregated bank accounts to
       the extent required by Commodity Futures Trading Commission  regulations.
       At December 31, 1999, the amount of cash held for margin requirements was
       $7,885,066.  SSB has agreed to 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 upon notice 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  interests.  The results of the Partnership's  trading
    activity are shown in the statement of income and expenses.

                                      F-8
<PAGE>

    All of the  commodity  interests,  owned  by the  Partnership,  are held for
    trading  purposes.  The average fair value during the period ended  December
    31, 1999, based on a monthly  calculation was $1,447,941.  The fair value of
    these commodity  interests,  including  options thereon,  if applicable,  at
    December 31, 1999, was $3,399,166, as detailed below.

                                                Fair Value
                                               December 31,
                                                   1999
                                               ------------
        Currencies:
          -Exchange Traded Contracts              $286,131
          -OTC Contracts                          (383,900)
        Energy                                     276,537
        Grains                                     (14,942)
        Interest Rates U.S.                        803,746
        Interest Rates Non-U.S.                    306,279
        Livestock                                  (10,200)
        Metals                                     594,978
        Softs                                        1,657
        Indices                                  1,538,880
                                              ------------
        Total                                   $3,399,166
                                               ------------
                                               ------------

5.  Distributions and Redemptions:

    Distributions of profits, if any, will be made at the sole discretion of the
    General  Partner  and at such  times  as the  General  Partner  may  decide.
    Beginning  with the first full month  ending at least three months after the
    commencement  of trading,  a limited  partner may require the Partnership to
    redeem  his Units at their Net Asset  Value as of the last day of a month on
    10 days notice to the General Partner. For the purpose of a redemption,  any
    accrued  liability for  reimbursement of offering and organization  expenses
    for the  Initial  Offering  Period will not reduce Net Asset Value per Unit.
    There is no fee charged to limited partners in connection with redemptions.

6.  Offering and Organization Costs:

    Offering and organization expenses of approximately $700,000 relating to the
    issuance and marketing of the  Partnership's  Units  offered were  initially
    paid by SSB. These costs are being  reimbursed to SSB by the  Partnership in
    24 equal  monthly  installments  (together  with  interest at the prime rate
    quoted by the Chase Manhattan Bank).

    As of December 31,  1999,  $297,315 of these costs have been  reimbursed  to
    SSB, by the Partnership.

    In addition,  the Partnership has recorded interest expense of $40,947,  for
    the period ended December 31, 1999 which is included in other expenses.

    The  remaining  deferred  liability  for these  costs due to SSB of $402,685
    (exclusive of interest charges) will not reduce Net Asset Value per Unit for
    any purpose  (other than  financial  reporting),  including  calculation  of
    advisory and brokerage fees and the redemption value of Units.

                                      F-9
<PAGE>

  7.   Net Asset Value Per Unit:

    Changes  in the net asset  value per Unit of  Partnership  interest  for the
    period  from  February  2, 1999  (commencement  of  trading  operations)  to
    December 31, 1999 were as follows:


                                                        1999
                                                   ------------
    Net realized and unrealized loss                    $(43.11)
    Interest income                                       32.26
    Expenses                                             (17.44)
                                                   ------------
    Decrease for period                                  (28.29)
    Net asset value per Unit, beginning of period      1,000.00
    Offering and organization cost adjustment            (20.76)
                                                   ------------
    Net asset value per Unit, end of period             $950.95
                                                    ------------

                                                    ------------
    Redemption value per Unit, end of period*           $956.34
                                                    ------------
                                                    ------------

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

8.  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, or 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


                                      F-10
<PAGE>

    is  subject.   These  monitoring   systems  allow  the  General  Partner  to
    statistically  analyze actual trading results with risk adjusted performance
    indicators  and  correlation  statistics.  In addition,  on-line  monitoring
    systems provide account analysis of futures,  forwards and options positions
    by sector,  margin  requirements,  gain and loss transactions and collateral
    positions.

    The   notional  or   contractual   amounts  of  these   instruments,   while
    appropriately not recorded in the financial  statements,  reflect the extent
    of the Partnership's involvement in these instruments. The majority of these
    instruments mature within one year of December 31, 1999. However, due to the
    nature of the Partnership's  business,  these instruments may not be held to
    maturity.

9.  Subsequent Events:

    On January 1, 2000 there were additional  sales of 4,516.1762 Units totaling
    $4,319,000 and  contributions by the General Partner  representing  125.4784
    unit  equivalents  totaling  $120,000.   On  January  31,  2000  there  were
    additional redemptions of 1,234.5566 Units totaling $1,179,644.

10.  New Accounting Pronouncements:
    The Partnership adopted Statement on Financial  Accounting Standards No. 133
    ("SFAS 133"),  Accounting for Derivative  Financial  Instruments and Hedging
    Activities.  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 fiscal year 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 will be 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 $3,196,873 were paid
for the year ended  December 31, 1999.  Management  fees and  incentive  fees of
$1,119,609 and $213,409,  respectively, were paid or payable to the Advisors for
the year ended December 31, 1999.

                                       31
<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          Greenawn LLC                8,855.7783 Units            9.7%
Limited           927 Fifth Ave.
Partnership       New York, N.Y. 10021
Interest

Units of          Mel D. Blumenthal &         7,860.3164 Units            8.6%
Limited           Paulette Blumenthal
Partnership       Family Trust
Interest          2184 Mandeville Canyon Rd.
                  Los Angeles, Ca 90094

         (b). Security  ownership of management.  Under the terms of the Limited
Partnership  Agreement,  the  Partnership's  affairs  are managed by the General
Partner.  The  General  Partner  owns  Units  of  general  partnership  interest
equivalent  to  941.9704  Units of Limited  Partnership  Interest  (1.03%) as of
December 31, 1999.
         (c).  Changes in control.   None.
Item 13.  Certain Relationship 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."

                                       32
<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 period from
                          February 2, 1999 (commencement of trading  operations)
                          to December 31, 1999.  Statement of Partners'  Capital
                          for the period  from June 15,  1998 (date  Partnership
                          was organized to December 31, 1999.
             (2)  Financial Statement Schedules: Financial Data
                         Schedule for the year ended December 31, 1999 and 1998.
             (3)  Exhibits:
               3.1  - Limited Partnership Agreement (filed as Exhibit 3.1 to the
                    Registration  Statement on Form S-1 (File No.  333-61961 and
                    incorporated herein by reference).
               3.2  - Certificate of Limited  Partnership of the  Partnership as
                    filed in the office of the  Secretary  of State of the State
                    of New York on June 15,  1998  (filed as Exhibit  3.2 to the
                    Registration  Statement on Form S-1 (File No. 333-61961) and
                    incorporated herein by reference).

                                       33
<PAGE>


               10.1-Customer  Agreement  between  the  Partnership  and  Salomon
                    Smith  Barney  (filed as  Exhibit  10.1 to the  Registration
                    Statement on Form S-1 (File No.  333-61961) 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. 333-61961) and incorporated  herein by
                    reference).
               10.5-Management  Agreement  among the  Partnership,  the  General
                    Partner and Campbell & Company,  Inc. (filed as Exhibit 10.5
                    to  the  Registration   Statement  on  Form  S-1  (File  No.
                    333-61961) and incorporated herein by reference).
               10.6-Management  Agreement  among the  Partnership,  the  General
                    Partner and Eagle Trading  Systems,  Inc.  (filed as Exhibit
                    10.6 to the  Registration  Statement  on Form S-1  (File No.
                    333-61961) and incorporated herein by reference).
               10.7-Management  Agreement  among the  Partnership,  the  General
                    Partner and Eckhardt  Trading Company (filed as Exhibit 10.7
                    to  the  Registration   Statement  on  Form  S-1  (File  No.
                    333-61961) and incorporated herein by reference).

                                       34
<PAGE>


               10.8-Management  Agreement  among the  Partnership,  the  General
                    Partner and Rabar Market  Research (filed as Exhibit 10.8 to
                    the Registration  Statement on Form S-1 (File No. 333-61961)
                    and incorporated herein by reference).
               10.9-Letter  extending  Management  Agreements  with  Campbell  &
                    Company, Inc., Eagle Trading Systems, Inc., Eckhardt Trading
                    Company and Rabar Market Research (filed herein).
          (b)     Reports on 8-K:   None Filed.

                                       35
<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 DIVERSIFIED 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

                                       36