UNITEDSTATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C.20549

FORM 10-K

Annual Report Pursuant to Section 13or 15(d) of the Securities Exchange Act of 1934

For theyear ended December 31, 2004

Commission FileNumber 0-50736

SALOMON SMITH BARNEY FAIRFIELD FUTURESFUND L.P.

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(Exact nameof registrant as specified in its charter)

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| NewYork                                                       |  | 04-3621353                          |
| (State or other jurisdiction ofincorporation or organization) |  | (I.R.S. EmployerIdentification No.) |
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c/o Citigroup Managed FuturesLLC 399 Park Ave. – 7th Fl. New York, New York10022

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(Address andZip Code of principal executive offices)

(212)559-2011

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(Registrant'stelephone number, including area code)

Securitiesregistered pursuant to Section 12(b) of theAct:  None

Securities registeredpursuant to Section 12(g) of the Act: Redeemable Units of LimitedPartnership Interest

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Indicate by check mark whether the registrant (1)has filed all reports required to be filed by Section 13 or 15(d) ofthe Securities Exchange Act of 1934 during the preceding 12 months (orfor such shorter period that the registrant was required to file suchreports), and (2) has been subject to such filing requirements for thepast 90 days.

YesX        No     

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

Indicate by check mark whether the registrant is anaccelerated filer (as defined in Rule 12b-2 of the Act).

YesX        No     

LimitedPartnership Redeemable Units with an aggregate value of $125,746,876were outstanding and held by non-affiliates as of the last business dayof the registrants most recently completed second fiscal quarter.

As of February 28, 2005, 68,794.1179 Limited PartnershipRedeemable Units were outstanding.

DOCUMENTSINCORPORATED BY REFERENCE

None

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PART I

Item1.    Business.

(a)    General development ofbusiness. Salomon Smith Barney Fairfield Futures Fund L.P.("Partnership") is a limited partnershiporganized on March 25, 2002 under the partnership laws of the State ofNew York. The Partnership commenced trading operations on June 5, 2002.The Partnership engages in speculative trading of commodity interests,including futures contracts, options and forward contracts. ThePartnership may also engage in swaps transactions and other derivativetransactions with the approval of the General Partner (definedbelow).

Beginning April 15, 2002, 110,000 redeemable units ofLimited Partnership Interest ("RedeemableUnits") were offered at $1,000 per Redeemable Unit for aperiod of ninety days, subject to increase for up to an additionalsixty days at the sole discretion of the general partner. Between April15, 2002 (commencement of the offering period) and June 4, 2002, 12,423Redeemable Units were sold. Proceeds of the offering were held in anescrow account and were transferred, along with the generalpartner's contribution of $125,000 to the Partnership'strading account on June 5, 2002 when the Partnership commenced trading.The Partnership is not currently offering Redeemable Units. Sales andredemptions of Redeemable units and general partner contributions andredemptions for the year ended December 31, 2004, 2003 and for theperiod from March 25, 2002 (date Partnership was organized) to December31, 2002 are reported in the Statements of Changes in Partners'Capital on page F-8 under "Item 8. FinancialStatements and Supplementary Data."

CitigroupManaged Futures LLC, formerly Smith Barney Futures Management LLC, actsas the general partner (the "GeneralPartner") of the Partnership. The Partnership'scommodity broker is Citigroup Global Markets Inc.("CGM"), formerly Salomon Smith Barney Inc.CGM is an affiliate of the General Partner. The General Partner iswholly owned by Citigroup Global Markets Holdings Inc.("CGMHI"), formerly Salomon Smith BarneyHoldings Inc., which is the sole owner of CGM. CGMHI is a wholly ownedsubsidiary of Citigroup Inc.

The Partnership's trading offutures, forwards and options contracts, if applicable, on commoditiesis done primarily on United States of America and foreign commodityexchanges. It engages in such trading through a commodity brokerageaccount maintained with CGM.

The General Partner has agreed tomake capital contributions, if necessary, so that its generalpartnership interest will be equal to the greater of (i) an amount toentitle it to 1% of each material item of Partnership income,loss, deduction or credit and (ii) the greater of (a) 1% of thepartners' contributions to the Partnership or (b) $25,000. ThePartnership will be liquidated upon the first of the following tooccur: December 31, 2022; the net asset value per Redeemable Unit fallsbelow $400 as of the close of any business day; a decline in net assetsafter trading commences to less than $1,000,000; or under certaincircumstances as defined in the Limited Partnership Agreement of thePartnership (the "Limited PartnershipAgreement").

Under the Limited PartnershipAgreement, dated as of March 25, 2002, the General Partner has soleresponsibility for the administration of the business and affairs ofthe Partnership. The Partnership pays the General Partner a monthlyadministrative fee in return for its services to the Partnership equalto 0.5% of month-end Net Assets per year.

The GeneralPartner has entered into a Management Agreement (the"Management Agreement") with Graham CapitalManagement, L.P. ("Graham"), (the"Advisor") who will make all commoditytrading decisions for the Partnership. The Advisor is not affiliatedwith the General Partner or CGM. The Advisor is not responsible for theorganization or operation of the Partnership.

Pursuant to theterms of the Management Agreement, the Partnership pays the Advisor amonthly management fee equal to 1/6 of 1% (2% per year)of month-end Net Assets allocated to the Advisor and an incentive feepayable quarterly equal to 20% of the New Trading Profits.Month-end Net Assets, for the purpose of calculating management andadministration fees are Net Assets, as defined in the LimitedPartnership Agreement, prior to the reduction of redemptions andincentive fees

The Partnership has entered into a CustomerAgreement with CGM (the "Customer Agreement")which provides that the Partnership will pay CGM a monthly BrokerageFee equal to 4.5% per year of 

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month-end Net Assets, in lieu of brokeragecommissions on a per trade basis. Month-end Net Assets, for the purposeof calculating commissions are Net Assets, as defined in the LimitedPartnership Agreement, prior to the reduction of accrued expenses andredemptions payable. CGM also pays a portion of its brokerage fees toits financial consultants who have sold Redeemable Units of thePartnership and who are registered as associated persons with theCommodity Futures Trading Commission (the"CFTC"). The Partnership pays for NationalFutures Association ("NFA") fees, exchangefees, clearing fees, give-up fees, user fees and floor brokerage fees.The Customer Agreement between the Partnership and CGM gives thePartnership the legal right to net unrealized gains and losses. Inaddition, CGM pays the Partnership interest on 80% of theaverage daily equity maintained in cash in its account during eachmonth 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 from the date on which such weekly rate isdetermined.

(b)    Financial information about industrysegments. The Partnership's business consists of only onesegment, speculative trading of commodity interests (including, but notlimited to, futures contracts, options and forward contracts on U.S.Treasury Bills, other financial instruments, foreign currencies, stockindices and physical commodities). The Partnership does not engage insales of goods or services. The Partnership's net income (loss)from operations for the years ended December 31, 2004, 2003 and forperiod from June 5, 2002 (commencement of trading operations) toDecember 31, 2002 is set forth under "Item 6. SelectedFinancial Data." The Partnership's capital asof December 31, 2004 was $125,370,686.

(c)    Narrativedescription of business.

See Paragraphs (a) and (b)above.

(i) through (xii) — Not applicable.

(xiii) — The Partnership has no employees.

(d)    Financial Information About Geographic Areas. ThePartnership does not engage in sales of goods or services or own anylong lived assets, and therefore this item is not applicable.

(e)    Available Information. The Partnership does nothave an Internet address. The Partnership will provide paper copies ofits annual report on Form 10-K, quarterly reports on Form 10-Q, currentreports on Form 8-K and any amendments to these reports free of chargeupon request.

Item 2.    Properties.

ThePartnership does not own or lease any properties. The General Partneroperates out of facilities provided by its affiliate, CGM.

Item3.    Legal Proceedings.

This section describes themajor pending legal proceedings, other than ordinary routine litigationincidental to the business, to which Citigroup Global Markets HoldingsInc. ("CGMHI") or its subsidiaries is a partyor to which any of their property is subject. There are no materiallegal proceedings pending against the Partnership or the GeneralPartner.

Citigroup Global Markets Inc.("CGM") is a New York corporation with itsprincipal place of business at 388 Greenwich St., New York, New York10013. CGM is registered as a broker-dealer and futures commissionmerchant ("FCM"), and provides futuresbrokerage and clearing services for institutional and retailparticipants in the futures markets. CGM and its affiliates alsoprovide investment banking and other financial services for clientsworldwide.

There have been no material administrative, civil orcriminal actions within the past five years against Citigroup GlobalMarkets (formerly known as Salomon Smith Barney) or any of itsindividual principals and no such actions are currently pending, exceptas follows.

Regulatory Matters

Both the Department ofLabor and the Internal Revenue Service("IRS") have advised CGM that they were orare reviewing transactions in which Ameritech Pension Trust purchasedfrom CGM and 

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certain affiliates approximately $20.9 millionin participations in a portfolio of motels owned by Motels of America,Inc. and Best Inns, Inc. With respect to the IRS review, CGM andcertain affiliated entities have consented to extensions of time forthe assessment of excise taxes that may be claimed to be due withrespect to the transactions for the years 1987, 1988 and1989.

In April 2000, CGM and several other broker-dealersentered into a settlement with the IRS and the SEC, concluding anindustry-wide investigation into the pricing of Treasury securities inadvanced refunding transactions.

IPO Regulatory Inquiries

Since April 2002, CGM and several other broker dealers have receivedsubpoenas and/or requests for information from various governmental andself-regulatory agencies and Congressional committees as part of theirresearch on IPO allocation inquiries. With respect to issues raised bythe NASD, the NYSE and the SEC about CGM's and other firms'e-mail retention practices, CGM and several other broker/dealers andthe NASD, the NYSE and the SEC entered into a settlement agreement inDecember 2002. CGM agreed to pay a penalty in the amount of $1.65million and did not admit any wrongdoing.

IPO CivilLitigation

In April 2002, consolidated amended complaints werefiled against CGM and other investment banks named in numerous allegedclass actions filed in the United States District Court for theSouthern District of New York, alleging violations of certain federalsecurities laws (including Section 11 of the Securities Act of 1933, asamended, and Section 10(b) of the Securities Exchange Act of 1934, asamended) with respect to the allocation of shares for certain initialpublic offerings and related aftermarket transactions and damage toinvestors caused by allegedly biased research analyst reports. OnFebruary 19, 2003, the Court issued an opinion denyingdefendants' motion to dismiss.

On October 13, 2004, thecourt granted in part the motion to certify class actions for six focuscases in the securities litigation. CGM is not a defendant in any ofthe six focus cases. The underwriter defendants in the focus cases havefiled a petition to the United States Court of Appeals for the SecondCircuit seeking review of this decision.

Also filed in theSouthern District of New York against CGM and other investment bankswere several alleged class actions that were consolidated into a singleclass action alleging violations of certain federal and state antitrustlaws in connection with the allocation of shares in initial publicofferings when acting as underwriters. On November 3, 2003, the courtgranted CGM's motion to dismiss the consolidated amendedcomplaint in the antitrust case. An appeal to the Second Circuit of thedismissal granted to CGM in November 2003 with respect to the antitrustcase relating to the allocation of shares for certain initial publicofferings is pending.

Research Settlement

On April 28,2003, CGM announced final agreements with the SEC, the NASD, the NYSEand the New York Attorney General (as lead state among the 50 states,the District Columbia and Puerto Rico) to resolve on a civil basis allof their outstanding investigations into its research and IPOallocation and distribution practices (the "ResearchSettlement"). As part of the Research Settlement, CGM hasconsented to the entry of (1) an injunction under the federalsecurities laws to be entered in the United States District Court forthe Southern District of New York, barring CGM from violatingprovisions of the federal securities laws and related NASD and NYSErules relating to research, certain IPO allocation practices, thesafeguarding of material nonpublic information, and the maintenance ofrequired books and records and requiring CGM to adopt and enforce newrestrictions on the operation of research; (2) an NASD AcceptanceWaiver and Consent requiring CGM to cease and desist from violations ofcorresponding NASD rules and requiring CGM to adopt and enforce thesame new restrictions; (3) an NYSE Stipulation and Consent requiringCGM to cease and desist from violations of corresponding NYSE rules andrequiring CGM to adopt and enforce the same new restrictions; and (4)an Assurance of Discontinuance with the New York Attorney Generalcontaining substantially the same or similar 

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restrictions. The Research Settlement requiresCGM to pay $300 million for retrospective relief, plus $25 million forinvestor education, and commit to spend $75 million to provideindependent third-party research to its clients at no charge. CGMreached these final settlement agreements without admitting or denyingany wrongdoing or liability. The Research Settlement does not establishwrongdoing or liability for purposes of any other proceeding. The $300million was accrued during the 2002 fourth quarter.

Toeffectuate the Research Settlement, the SEC filed a Complaint and FinalJudgment in the United States District Court for the Southern Districtof New York. On October 31, 2003, final judgment was entered againstCGM and nine other investment banks. The NASD has accepted the Letterof Acceptance, Waiver and Consent entered into with CGM in connectionwith the Research Settlement. In May 2003, the NYSE advised CGM thatthe Hearing Panel's Decision, in which it accepted the ResearchSettlement, had become final. As required by the Research Settlement,CGM also has entered into separate settlement agreements with numerousstates and certain U.S. territories.

Several individual actionshave been filed against Citigroup and CGM relating to, among otherthings, research on Qwest Communications International, Inc. allegingviolations of state and federal securities laws.

EnronRegulatory Settlement

On July 28, 2003, Citigroup(CGM's ultimate parent) entered into a final settlement agreementwith the SEC to resolve the SEC's outstanding investigations intoCitigroup transactions with Enron Corp. and Dynegy Inc. Pursuant to thesettlement, Citigroup has, among other terms, (1) consented to theentry of an administrative cease and desist order, which bars Citigroupfrom committing or causing violations of provisions of the federalsecurities laws, and (2) agreed to pay $120 million ($101.25 millionallocable to Enron and $18.75 million allocable to Dynegy). Citigroupentered into this settlement without admitting or denying anywrongdoing or liability, and the settlement does not establishwrongdoing or liability for purposes of any other proceeding. On July28, 2003, Citibank, N.A. entered into an agreement with the Office ofthe Comptroller of the Currency ("OCC") andCitigroup entered into an agreement with the Federal Reserve Bank ofNew York ("FED") to resolve their inquiriesinto certain of Citigroup's transactions with Enron. Pursuant tothe agreements, Citibank and Citigroup have agreed to submit plans tothe OCC and FED, respectively, regarding the handling of complexstructured finance transactions. Also on July 28, 2003, Citigroupentered into a settlement agreement with the Manhattan DistrictAttorney's Office to resolve its investigation into certain ofCitigroup's transactions with Enron. Pursuant to that settlement,Citigroup has agreed to pay $25.5 million and to abide by itsagreements with the SEC, OCC and FED.

Enron-Related CivilAction

CGM, Citigroup and various other Citigroup-relatedentities have been named as defendants in over 20 civil lawsuitspending in state and federal courts throughout the United States,alleging claims against Citigroup and CGM based on their dealings withEnron. The majority of these cases have been brought by purchasers andsellers of Enron equity and debt securities and Enron-linkedsecurities. Many of the plaintiffs in these actions are large,institutional investors that had substantial Enron and Enron-linkedholdings. The lawsuits collectively allege as against Citigroup and/orits affiliates and subsidiaries, among other things, federal securitiesfraud, state law claims of negligent misrepresentation, fraud, breachof fiduciary duty, aiding and abetting a breach of fiduciary duty andrelated claims. In most of these lawsuits, Citigroup is named as aco-defendant along with other investment banks alleged to have haddealings with Enron. The majority of cases pending in the federalcourts have been, or are in the process of being, consolidated before asingle judge in the United States District Court for the SouthernDistrict of Texas. In addition, in five adversary proceedings in theEnron Chapter 11 bankruptcy, Enron and, in one case, its co-debtoraffiliates and subsidiaries, and the Official Committee of UnsecuredCreditors of Enron Corp., et al., have named Citigroup and/or itsaffiliates or subsidiaries as defendants.

A Citigroup affiliate,along with other defendants, settled all claims against it in In Re:Newpower Holdings Securities Litigation, a class action brought onbehalf of certain investors in NewPower securities. Citigroup reachedthis settlement agreement without admitting any wrongdoing. OnSeptember 13, 2004, the United States District Court for the SouthernDistrict of New York preliminarily approved the settlement.

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Worldcom-Related Litigation

Citigroup, CGM and certain executive officers and current and formeremployees have been named as defendants — along with twenty-twoother investment banks, certain current and former WorldCom officersand directors, and WorldCom's former auditors — in aconsolidated class action brought on behalf of individuals and entitieswho purchased or acquired publicly traded securities of WorldCombetween April 29, 1999 and June 25, 2002 In Re: Worldcom, Inc.Securities Litigation. The class action complaint asserts claimsagainst CGM under (i) Sections 11 and 12(a)(2) of the Securities Act of1933, as amended, in connection with certain bond offerings in which itserved as underwriter, and (ii) Sections 10(b) and 20(a) of theSecurities Exchange Act of 1934, as amended, and Rule 10b-5 promulgatedunder Section 10(b), alleging that it participated in the preparationand/or issuance of misleading WorldCom registration statements anddisseminated misleading research reports concerning WorldCom stock. In2003, the district court denied CGM's motion to dismiss theconsolidated class action complaint and granted the plaintiffs'motion for class certification.

Pursuant to an order entered May28, 2003, the District Court consolidated approximately seventy-eightindividual actions with the class action for pretrial proceedings. Theclaims asserted in these individual actions are substantially similarto the claims alleged in the class action and assert state and federalsecurities law claims based on CGM's research reports concerningWorldCom and/or CGM's role as an underwriter in WorldComofferings. Plaintiffs in certain of these actions filed motions toremand their cases to state court. The District Court denied thesemotions and its rulings were upheld on appeal.

Numerous otheractions asserting claims against CGM in connection with its researchreports about WorldCom and/or its role as an investment banker forWorldCom are pending in other federal and state courts around thecountry. These actions have been remanded to various state courts, arepending in other federal courts, or have been conditionally transferredto the United States District Court for the Southern District of NewYork to be consolidated with the class action. In addition to the courtsuits, actions asserting claims against Citigroup and certain of itsaffiliates relating to its WorldCom research reports are pending innumerous arbitrations around the country. These actions assert claimsthat are substantially similar to the claims asserted in the classaction.

On May 10, 2004, Citigroup announced that it had agreedto pay $2.58 billion to settle the WorldCom class action suits. TheUnited States District Court for the Southern District of New Yorkgranted approval to the proposed settlement on November 10,2004.

On September 17, 2004, Weinstein, et al. v. Ebbers, etal., an alleged class action against CGM and others brought onbehalf of holders of WorldCom securities asserting claims based on,among other things, CGM's research reports concerning WorldCom,was dismissed with prejudice in its entirety by the United StatesDistrict Court for the Southern District of New York. The plaintiffsnoticed an appeal of the dismissal to the United States Court ofAppeals for the Second Circuit on October 15, 2004. The parties havereached an agreement in principle on the terms of a settlement of thisaction.

Citigroup and CGM, along with a number of otherdefendants, have settled Retirement Systems of Alabama, et al. v.J.P. Morgan Chase & Co., et al., a WorldCom individual actionthat had been remanded to the Circuit Court of Montgomery County,Alabama. The settlement became final on September 30, 2004.

OnJune 28, 2004, the United States District Court for the SouthernDistrict of New York dismissed all claims under the Securities Act of1933, as amended, and certain claims under the Securities Exchange Actof 1934 in In Re: Targets Securities Litigation, an allegedclass action against Citigroup and CGM and certain former employees,leaving only claims under the 1934 Act for purchases of Targeted GrowthEnhanced Terms Securities With Respect to the Common Stock of MCIWorldCom, Inc. ("TARGETS") after July 30,1999. On October 20, 2004, the parties signed a Memorandum ofUnderstanding setting forth the terms of a settlement of all remainingclaims in this action. The settlement was preliminarily approved by theCourt on January 11, 2005.

A fairness hearing was held onNovember 5, 2004 in connection with the proposed class settlementbetween plaintiffs and the Citigroup-related defendants in In Re:Worldcom, Inc. Securities Litigation.

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Global Crossing

On or aboutJanuary 28, 2003, lead plaintiff in a consolidated alleged class actionin the United States District Court for the Southern District of NewYork (In Re: Global Crossing, Ltd. Securities Litigation) fileda consolidated complaint on behalf of purchasers of the securities ofGlobal Crossing and Asia Global Crossing, which names as defendants,among others, Citigroup, CGM, CGMH and certain executive officers andcurrent and former employees. The purported class action complaintasserts claims under the federal securities laws alleging that thedefendants issued research reports without a reasonable basis in factand failed to disclose conflicts of interest with Global Crossing inconnection with published investment research. On March 22, 2004, thelead plaintiff amended its consolidated complaint to add claims onbehalf of purchasers of the securities of Asia Global Crossing. Theadded claims assert causes of action under the federal securities lawsand common law in connection with CGM's research reports aboutGlobal Crossing and Asia Global Crossing and for CGM's roles asan investment banker for Global Crossing and as an underwriter in theGlobal Crossing and Asia Global Crossing offerings. The Citigrouprelated defendants moved to dismiss all of the claims against them onJuly 2, 2004. The plaintiffs and the Citigroup related defendants havereached an agreement in principle on the terms of a settlement of thisaction.

In addition, on or about January 27, 2004, the GlobalCrossing Estate Representative filed in the United States BankruptcyCourt for the Southern District of New York (i) an adversary proceedingasserting claims against, among others, Citigroup, CGM and certainexecutive officers and current and former employees, asserting claimsunder federal bankruptcy law and common law in connection withCGM's research reports about Global Crossing and for its role asan underwriter in Global Crossing offerings, and (ii) an adversaryproceeding against Citigroup and several other financial institutionsseeking to rescind the payment of a $1 billion loan made to asubsidiary of Global Crossing. The Citigroup related defendants movedto dismiss the former action on June 26, 2004, and the latter on May28, 2004.

In addition, actions asserting claims againstCitigroup and certain of its affiliates relating to its Global Crossingresearch reports are pending in numerous arbitrations around thecountry. These arbitration proceedings assert claims that aresubstantially similar to the claims asserted in the alleged classaction.

Adelphia Communications Corporation

On July 6, 2003, an adversary proceeding was filed by theOfficial Committee of Unsecured Creditors on behalf of AdelphiaCommunications Corporation against certain lenders and investmentbanks, including CGM, Citibank, N.A., Citicorp USA, Inc., and CitigroupFinancial Products, Inc. (together, the Citigroup Parties). Thecomplaint alleges that the Citigroup Parties and numerous otherdefendants committed acts in violation of the Bank Holding Company Actand the common law. The complaint seeks equitable relief and anunspecified amount of compensatory and punitive damages. In November2003, a similar adversary proceeding was filed by the Equity HoldersCommittee of Adelphia. In June 2004, motions to dismiss were filed withrespect to the complaints of the Official Committee of UnsecuredCreditors and the Equity Holders Committee. The motions are currentlypending.

In addition, CGM is among the underwriters named innumerous civil actions brought to date by investors in Adelphia debtsecurities in connection with Adelphia securities offerings betweenSeptember 1997 and October 2001. Three of the complaints also assertclaims against Citigroup Inc. and Citibank, N.A. All of the complaintsallege violations of federal securities laws, and certain of thecomplaints also allege violations of state securities laws and thecommon law. The complaint seeks unspecified damages. In December 2003,a second amended complaint was filed and consolidated before the samejudge of the United States District Court for the Southern District ofNew York. In February 2004, motions to dismiss the class and individualactions pending in the United States District Court for the SouthernDistrict were filed. The motions are currently pending.

Mutual Funds

Citigroup and certain of itsaffiliates have been named in several class action litigations pendingin various federal district courts arising out of alleged violations ofthe federal securities laws, the Investment Company Act and common law(including breach of fiduciary duty and unjust enrichment). The claims

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concern practices in connection with the saleof mutual funds, including allegations involving market timing, revenuesharing, incentive payments for the sale of proprietary funds,undisclosed breakpoint discounts for the sale of certain classes offunds, inappropriate share class recommendations and inappropriate fundinvestments. The litigations involving market timing have beenconsolidated under the MDL rules in the United States District Courtfor the District of Maryland, and the litigations involving revenuesharing, incentive payment and other issues have been consolidated inthe United States District Court for the Southern District of New York.The plaintiffs in these litigations generally seek unspecifiedcompensatory damages, rescissionary damages, injunctive relief, costsand fees. In the principal market timing cases that name Citigroup, alead plaintiff has been appointed but that plaintiff has not yet filedan amended complaint. In the cases concerning revenue sharing,incentive payment and other issues, the lead plaintiff filed aconsolidated and amended complaint on December 15, 2004.

Several issues in the mutual fund industry have come underscrutiny of federal and state regulators. Citigroup has receivedsubpoenas and other requests for information from various governmentregulators regarding market timing, financing, fees, sales practicesand other mutual fund issues in connection with various investigations.Citigroup is cooperating with all such reviews.

Research Analyst Litigation

Since May 2002,CGM and certain executive officers and current and former employeeshave been named as defendants in numerous alleged class actioncomplaints, individual actions, and arbitration demands by purchasersof various securities alleging that they violated federal securitieslaw, including Sections 10 and 20 of the Securities Exchange Act of1934, as amended, and certain state laws for allegedly issuing researchreports without a reasonable basis in fact and for allegedly failing todisclose conflicts of interest with companies in connection withpublished investment research, including Global Crossing, Ltd.,AT&T Corp., Level 3 Communications, Inc., Metromedia Fiber Network,Inc., XO Communications, Inc., Williams Communications Group Inc., andFocal Communications, Inc. The alleged class actions relating toresearch of these companies are pending before a single judge in theUnited States District Court for the Southern District of New York forcoordinated proceedings. The Court has consolidated these actions intoseparate proceedings corresponding to the companies named above. OnDecember 2, 2004, the Court granted in part and denied in part theCitigroup related defendants' motions to dismiss the claimsagainst it in the AT&T, Level 3, XO and Williams actions. OnJanuary 6, 2005, the Court granted in part and denied in partCitigroup's motion to dismiss the claims against it in theMetromedia action.

In addition to the alleged researchclass actions, several individual actions have been filed againstCitigroup and CGM relating to, among other things, research on QwestCommunications International, Inc. These actions allege violations ofstate and federal securities laws in connection with CGM'spublication of research about Qwest and its underwriting of Qwestsecurities.

Two alleged class actions against CGMasserting common law claims in connection with published investmentresearch on behalf of CGM customers have been dismissed by UnitedStates District Courts, one of which was affirmed by the United StatesCourt of Appeals for the Ninth Circuit, and one of which is pending onappeal to the United States Courts of Appeals for the Third Circuit.Two more putative class actions raising similar claims are pendingagainst CGM, one in the United States District Court for the SouthernDistrict of New York (Norman v. Salomon Smith Barney, et al.)and the other in Illinois state court (Disher v. CGM Inc.). OnJune 9, 2004, the District Court denied CGMI's motion to dismissNorman v. Salomon Smith Barney, et al., a case which assertsviolations of the Investment Advisers Act of 1940 and various commonlaw claims in connection with certain investors who maintained guidedportfolio management accounts at Smith Barney.

Supervisory Investigation

In May 2003, theSEC, NYSE and NASD issued a subpoena and letters to CGM requestingdocuments and information with respect to their continuinginvestigation of individuals in connection with the supervision of theresearch and investment banking departments of CGM. Other parties tothe Research Settlement have received similar subpoenas andletters.

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West Virginia Attorney GeneralSuit

On June 23, 2003, the West Virginia AttorneyGeneral filed an action against CGM and nine other firms that wereparties to the Research Settlement. The West Virginia Attorney Generalalleges that the firms violated the West Virginia Consumer Credit andProtection Act in connection with their research activities and seeksmonetary penalties.

Citigroup Shareholder Litigation

InJuly 2002, Citigroup, CGM and certain officers were named as defendantsin an alleged class action filed in the United States District Courtfor the Southern District of New York, brought on behalf of purchasersof Citigroup common stock between July 24, 1999 and July 23, 2002. Thecomplaint seeks unspecified compensatory and punitive damages foralleged violations of Sections 10(b) and 20(a) of the SecuritiesExchange Act of 1934, and for common law fraud. Fourteen virtuallyidentical complaints have been filed and consolidated. The complaintsallege that Citigroup misstated the extent of its Enron-relatedexposure, and that Citigroup's stock price fell once the trueextent of Citigroup's Enron involvements became known. Plaintiffsfiled an amended complaint on March 10, 2003, which incorporated theallegations in the 15 separate actions and added new material as well.The amended complaint focuses on certain transactions between Citigroupand Enron and alleged analyst conflicts of interest. The class periodfor the consolidated amended complaint is July 24, 1999 to December 11,2002. On June 2, 2003, Citigroup filed a motion to dismiss theconsolidated amended complaint. Plaintiffs' response was filed onJuly 30, and Citigroup's reply was filed on October 3, 2003. OnAugust 10, 2004, Judge Swain granted Citigroup's motion todismiss the consolidated amended complaint. The plaintiffs filed anotice of appeal in October 2004.

NASD Settlement

InNovember 2004, CGM entered into a final agreement with the NASD toresolve the NASD's investigation into certain of its sellingpractices. Without admitting or denying any allegations or findings,CGM accepted certain factual findings by the NASD that it (i) soldunits in two managed futures funds to 45 customers for whom theinvestment was not suitable, (ii) failed to maintain records disclosingthe basis upon which its investor suitability determinations were madeand (iii) failed to adequately disclose the risks of investing inmanaged futures products on its website. CGM consented to a censure anda fine of $275,000 and offered to redeem the investment of thecustomers for whom investment in the two managed futures funds wasfound not suitable.

In the course of its business, CGM, as amajor futures commission merchant and broker-dealer is a party tovarious claims and routine regulatory investigations and proceedingsthat the general partner believes do not have a material adverse effecton the business of CGM.

Item 4.    Submission of Mattersto a Vote of Security Holders.

There were no matterssubmitted to the security holders for a vote during the last fiscalyear covered by this report.

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PART II

Item5.    Market for Registrant's Common Equity and RelatedSecurity Holder Matters.

(a)    MarketInformation. The Partnership has issued no stock. There is nopublic market for the Redeemable Units of Limited PartnershipInterest.

(b)    Holders. The number of holders ofRedeemable Units of Limited Partnership Interest as of December 31,2004 was 1,011.

(c)    Distribution. The Partnershipdid not declare a distribution in 2004 or 2003.

(d)    Useof Proceeds. For the twelve months ended December 31, 2003, therewere additional sales of 57,621.1285 Redeemable Units totaling$94,258,000 and General Partner contributions representing 313.0352Unit equivalents totaling $475,000. For the period from March 25, 2002(date Partnership was organized) to December 31, 2002 there wereadditional sales of 32.061.9138 Redeemable Units totaling $43,701,000and General Partner contributions representing 425.8983 Unitequivalents totaling $542,000.

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

Item 6.    Selected FinancialData.

Net realized and unrealized trading gains (losses),interest income, net income (loss) and increase (decrease) in Net AssetValue per Redeemable Unit for the years ended December 31, 2004, 2003and 2002, total assets at December 31, 2004, 2003, and the period fromMarch 25, 2002 (date Partnership was organized) to December 31, 2002were asfollows:

|                                                                                                                                                            |  |        |             |         |  |                                                                                |             |        |  |        |            |        |  |  |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--------|-------------|---------|--|--------------------------------------------------------------------------------|-------------|--------|--|--------|------------|--------|--|--|
|                                                                                                                                                       |  | 2004   |             | 2003    |  | Periodfrom March 25, 2002 (date Partnership wasorganized) to December 31, 2002 |
| Realized andunrealized trading gains (losses), net of brokerage commissions(including clearing fees) of $6,785,010, $5,845,292 and $1,073,575,respectively |  | $      | 1,825,629   |    |  | $                                                                              | 25,659,625  |   |  | $      | 12,429,661 |   |
| Interestincome                                                                                                                                             |  |   | 1,271,443   |    |  |                                                                           | 829,712     |   |  |   | 247,745    |   |
|                                                                                                                                                       |  | $      | 3,097,072   |    |  | $                                                                              | 26,489,337  |   |  | $      | 12,677,406 |   |
| Netincome (loss) before Incentive Fee toAdvisor                                                                                                            |  | $      | (388,341    | )  |  | $                                                                              | 23,516,370  |   |  | $      | 12,067,837 |   |
| Netincome (loss) available for pro rata distribution to partners                                                                                           |  | $      | (3,215,332  | )  |  | $                                                                              | 18,957,935  |   |  | $      | 9,706,515  |   |
| Increase(decrease) in Net Asset Value per RedeemableUnit                                                                                                   |  | $      | (24.06      | )  |  | $                                                                              | 309.07      |   |  | $      | 497.79     |   |
| **Totalassets**                                                                                                                                            |  | $      | 138,246,357 |    |  | $                                                                              | 163,570,882 |   |  | $      | 60,120,802 |   |
|                                                                                                                                                            |

Item7.    Management's Discussion and Analysis of FinancialCondition and Results of Operations.

Overview

ThePartnership aims to achieve substantial capital appreciation throughspeculative trading in U.S. and international markets for currencies,interest rates, stock indices, agricultural and energy products andprecious and base metals. The Partnership may employ futures, optionson futures, and forward, spot and swap contracts in those markets.

The General Partner manages all business of the Partnership. TheGeneral Partner has delegated its responsibility for the investment ofthe Partnership's assets to Graham. The General Partner employs ateam of approximately 20 professionals whose primary emphasis is onattempting to maintain quality control among the advisors to thePartnerships operated or managed by the General Partner. A full-time

9

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staff of due diligence professionals usestate-of-the-art technology and on-site evaluations to monitor new andexisting futures money managers. The accounting and operations staffprovide processing of trading activity and reporting to limitedpartners and regulatory authorities. In selecting the Advisor for thePartnership, the General Partner considered past performance, tradingstyle, volatility of markets traded and fee requirements.

Responsibilities of the General Partnerinclude:

|              |                                           |
|--------------|-------------------------------------------|
| •  | due diligence examinations ofthe Advisor; |

|              |                                                       |
|--------------|-------------------------------------------------------|
| •  | selection, appointment andtermination of the Advisor; |

|              |                                            |
|--------------|--------------------------------------------|
| •  | negotiationof the management agreement;and |

|              |                                        |
|--------------|----------------------------------------|
| •  | monitoring the activity of theAdvisor. |

In addition, the General Partner prepares the books andrecords and provides the administrative and compliance services thatare required by law or regulation from time to time in connection withoperation of the Partnership. These services include the preparation ofrequired books and records and reports to limited partners, governmentagencies and regulators; computation of net asset value; calculation offees; effecting subscriptions, redemptions and limited partnercommunications; and preparation of offering documents and salesliterature.

The General Partner shall seek the best prices andservices available in its commodity futures brokerage transactions. TheGeneral Partner reviews at least annually, the brokerage rates chargedto commodity pools similar to the Partnership to determine that thebrokerage fee the Partnership pays is competitive with other rates.

The K4 Program was developed in 1998 and commenced tradingoperations in January 1999. The K4 Program uses a mathematical model toidentify certain price patterns that have very specific characteristicsindicating that there is a high probability that a significantdirectional move will occur. The K4 Program will normally enter or exita position only when a significant price and volatility spike takesplace. K4 will normally maintain a neutral position in 50% ofthe markets in the portfolio.

The K4 Program trades inapproximately 65 markets including foreign exchange, global interestrates, stock index futures, agricultural futures, metals andenergy.

In addition to the K4 Program, as of December 31, 2004,Graham trades the following futures programs: its Global DiversifiedProgram, the Graham Selective Trading Program, the Proprietary MatrixProgram and the Fed Policy Program.

Graham's successdepends to a great extent upon the occurrence of market conditionsfavorable to its trading strategy. Factors such as lack of major pricetrends or increased governmental control of, or participation in, themarkets, may reduce Graham's ability to trade profitably in thefuture.

As a managed futures Partnership, thePartnership's performance is dependent upon the successfultrading of the Partnership's Advisor to achieve thePartnership's objectives. It is the business of theGeneral Partner to monitor the Advisor's performance toassure compliance with the Partnership's trading policies and todetermine if the Advisor's performance is meeting thePartnership's objectives. Based on 2004 results, the GeneralPartner continues to believe the Advisor and the trading of the K4Program have met the Partnership's objectives and expects tocontinue to allocate the Partnership's assets to the Advisor andthis program unless otherwise indicated.

(a)    Liquidity.

The Partnership does not engagein sales of goods or services. Its only assets are its equity in itscommodity futures trading account, consisting of cash and cashequivalents, net unrealized appreciation (depreciation) on open futurescontracts and interest receivable. Because of the low margin depositsnormally required in commodity futures trading, relatively small pricemovements may result in substantial losses to the Partnership. Suchsubstantial losses could lead to a material loss inliquidity.

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To minimize this risk relating to lowmargin deposits, the Partnership follows certain trading policies,including:

|           |                                                                                                                                                                                                                                                                                                                                                   |
|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (i)  | The Partnership invests itsassets only in commodity interests that an Advisor believes are tradedin sufficient volume to permit ease of taking and liquidatingpositions. Sufficient volume, in this context, refers to a level ofliquidity that the Advisor believes will permit it to enter and exittrades without noticeably moving the market. |

|            |                                                                                                                                                                                                                          |
|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (ii)  | An Advisor will not initiate additionalpositions in any commodity if these positions would result in aggregatepositions requiring a margin of more than66 2/3% of the Partnership's net assetsallocated to that Advisor. |

|             |                                                                                                                                                                                                                                                             |
|-------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (iii)  | ThePartnership may occasionally accept delivery of a commodity. Unlesssuch delivery is disposed of promptly by retendering the warehousereceipt representing the delivery to the appropriate clearinghouse, thephysical commodity position is fully hedged. |

|            |                                                                                                                                                                                                                                                         |
|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (iv)  | The Partnership does not employ the tradingtechnique commonly known as "pyramiding", inwhich the speculator uses unrealized profits on existing positions asmargin for the purchases or sale of additional positions in the same orrelated commodities. |

|           |                                                                                                                                   |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------|
| (v)  | The Partnership doesnot utilize borrowings except short-term borrowings if the Partnershiptakes delivery of any cash commodities. |

|            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (vi)  | The Advisor may, from time to time, employtrading strategies such as spreads or straddles on behalf of thePartnership. The term "spread" or"straddle" describes a commodity futurestrading strategy involving the simultaneous buying and selling offutures contracts on the same commodity but involving differentdelivery dates or markets and in which the trader expects to earn aprofit from a widening or narrowing of the difference between theprices of the two contracts. |

|             |                                                                                                                                                                                                                                                                                       |
|-------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (vii)  | ThePartnership will not permit the churning of its commodity tradingaccount. The term "churning" refers to thepractice of entering and exiting trades with a frequency unwarranted bylegitimate efforts to profit from the trades, driven by the desire togenerate commission income. |

In the normal course of business,the Partnership is party to financial instruments with off-balancesheet risk, including derivative financial instruments and derivativecommodity instruments. These financial instruments include forwards,futures, options and swaps, whose values are based upon an underlyingasset, index or reference rate, and generally represent futurecommitments to exchange currencies or cash flows, or to purchase orsell other financial instruments at specified terms at specified futuredates, or, in the case of derivative commodity interests, to have areasonable possibility to be settled in cash, through physical deliveryor with another financial instrument. These instruments may be tradedon an exchange or over-the-counter ("OTC").Exchange traded instruments are standardized and include futures andcertain option contracts. OTC contracts are negotiated betweencontracting parties and include forwards, swaps and certain options.Each of these instruments is subject to various risks similar to thoserelating to the underlying financial instruments including market andcredit risk. In general, the risks associated with OTC contracts aregreater than those associated with exchange traded instruments becauseof the greater risk of default by the counterparty to an OTCcontract.

Market risk is the potential for changes in the valueof the financial instruments traded by the Partnership due to marketchanges, including interest and foreign exchange rate movements andfluctuations in commodity or security prices. Market risk is directlyimpacted by the volatility and liquidity in the markets in which therelated underlying assets are traded.

Credit risk is thepossibility that a loss may occur due to the failure of a counterpartyto perform according to the terms of a contract. Credit risk withrespect to exchange traded instruments is reduced to the extent that anexchange or clearing organization acts as counterparty to thetransactions. The Partnership's risk of loss in the event ofcounterparty default is typically limited to the amounts recognized inthe statement of financial condition and not represented by thecontract or notional amounts of the instruments. The Partnership hascredit risk and concentration risk because the sole counterparty orbroker with respect to the Partnership's assets is CGM.

11

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The General Partner monitors and controlsthe Partnership's risk exposure on a daily basis throughfinancial, credit and risk management monitoring systems, andaccordingly believes that it has effective procedures for evaluatingand limiting the credit and market risks to which the Partnership issubject. These monitoring systems allow the General Partner tostatistically analyze actual trading results with risk adjustedperformance indicators and correlation statistics. In addition, on-linemonitoring systems provide account analysis of futures, forwards andoptions positions by sector, margin requirements, gain and losstransactions and collateral positions. (See also "Item 8.Financial Statements and Supplementary Data" forfurther information on financial instrument risk included in the notesto financial statements.)

Other than the risks inherent incommodity futures and swaps trading, the Partnership knows of notrends, demands, commitments, events or uncertainties which will resultin or which are reasonably likely to result in the Partnership'sliquidity increasing or decreasing in any material way. The LimitedPartnership Agreement provides that the General Partner may, in itsdiscretion, cause the Partnership to cease trading operations andliquidate all open positions under certain circumstances including adecrease in Net Asset Value per Redeemable Unit to less than $400 as ofthe close of business on any business day.

(b)    Capitalresources.

(i)    The Partnership has made no materialcommitments for capital expenditures.

(ii)    ThePartnership's capital consists of the capital contributions ofthe partners as increased or decreased by gains or losses on tradingand by expenses, interest income, redemptions of Redeemable Units anddistributions of profits, if any. Gains or losses on trading cannot bepredicted. Market moves in commodities are dependent upon fundamentaland technical factors which the Advisors may or may not be able toidentify, such as changing supply and demand relationships, weather,government agricultural, commercial and trade programs and policies,national and international political and economic events and changes ininterest rates. Partnership expenses consist of, among other things,commissions, advisory fees and administrative fees. The level of theseexpenses is dependent upon the level of trading and the ability of theAdvisors to identify and take advantage of price movements in thecommodity markets, in addition to the level of Net Assets maintained.In addition, the amount of interest income payable by CGM is dependentupon interest rates over which the Partnership has no control.

No forecast can be made as to the level of redemptions in any givenperiod. A limited partner may require the Partnership to redeem hisRedeemable Units at their Net Asset Value as of the last day of a monthon 10 days' notice to the General Partner. For the purpose of aredemption, any accrued liability for reimbursement of offering andorganization expenses for the Initial Offering Period will not reduceNet Asset Value per Redeemable Unit. There is no fee charged to limitedpartners in connection with redemptions. For the year ended December31, 2004, 14,668.7146 Redeemable Units were redeemed totaling$24,724,362. For the year ended December 31, 2003, 11,659.7972Redeemable Units were redeemed totaling $18,748,824. For the periodfrom March 25, 2002 (date Partnership was organized) to December 31,2002, 5,575.0488 Redeemable Units were redeemed totaling$8,081,246.

There was no additional sales of Redeemable Unitsfor the year ended December 31, 2004. For the year ended December 31,2003, there were additional sales of 57,621.1285 Redeemable Unitstotaling $94,258,000 and General Partner contributions representing313.0352 Unit equivalents totaling $475,000. For the period from March25, 2002 (date Partnership was organized) to December 31, 2002, therewere additional sales of 32,061.9138 Redeemable Units totaling$43,701,000 and General Partner contributions representing 425.8983Unit equivalents totaling $542,000.

(c)    Results ofOperations.

For the year ended December 31, 2004, the NetAsset Value per Redeemable Unit decreased 1.3% from $1,788.14 to$1,764.08. For the year ended December 31, 2003, the Net Asset Valueper Redeemable Unit increased 20.9% from $1,479.07 to $1,788.14.For the period March 25, 2002 (date Partnership was organized) throughDecember 31, 2002, the Net Asset Value per Redeemable Unit increased50.7% from $1,000 (less offering cost adjustment of $18.72) to$1,479.07.

The Partnership experienced net trading gains of$8,610,639 before commissions and expenses in 2004. Gains wereprimarily attributable to the trading of currencies, U.S. interestrates, livestock, metals and indices and were partially offset bylosses recognized in the trading of energy, non-U.S. interest rates andsofts.

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Trading results for the year 2004 can bedescribed in three distinct periods: the first three months of the yearproduced positive results of nearly 8% with trends carrying overfrom late 2003, the next five months which saw trend disruptions andproduced losses of over 24%, and the period September throughDecember which experienced a recovery period with profits of over17% but from a lower base. Overall, the Partnership ended theyear essentially flat with a decline of approximately 1.3% inthe net asset value per unit. The results for the year were heavilyinfluenced by two historic trends: the decline in the value of the U.S.dollar versus major currencies and the run-up in the price of crude oilto over $50 a barrel.

The year started strongly with many of thetrends from late 2003 continuing into early 2004. Notably lowerinterest rates in both U.S. and other major countries fostered strongglobal economic growth and pressured commodity prices. These resultedin upward trends in many sectors, especially energy, metals and grainsand provided profitable trading opportunities for thePartnership's advisor. These trends persisted into early Marchwhen economic indicators in the U.S. and China suggested risinginflation and markets reversed with higher interest rates, collapsingcommodity prices and the dollar reversal.

This began aprotracted period of tentative and conflicting trends across manysectors. As expected in the nature of trend-following, the strength ofprofitable trends is often followed by temporary but often severeperiods of losses. April though August was such a period thePartnership's advisor adjusted positions from what had beenprofitable, long-term trends to choppy, directionless and volatilemarkets. Particularly treacherous and thus unprofitable was trading incurrencies, U.S. and Asian interest rates and global stock indiceswhile energy and grains provided some offsetting profits. Thefundamental economic concerns hanging over these markets were furtherexacerbated by the uncertainty surrounding the tightly contested U.S.presidential election.

With the year looking dismal going intothe fall, the price of crude oil resumed its climb to $50 a barrelbrought on by a deteriorating security situation in Iraq, Saudi Arabiapolitical turmoil, and renewed threats of terrorism. Long positions inthe energy sector provided profits to the Partnership through the endof the third quarter and into the beginning of the fourth quarter.Later in the fourth quarter the U.S. dollar resumed its slide toward$1.40 to the euro, base metals prices rose and interest rates declinedall generally favorable to the advisor's positions. Global stockmarkets in particular surged along with declining interest rates whichproduced a profitable December for the Partnership. During the fourthquarter, the Partnership's advisor recovered much of the earlierperiod's losses and ended the year with a net slight decline innet asset value per unit.

The Partnership experienced net tradinggains of $31,504,917 before commissions and expenses in 2003. Gainswere primarily attributable to the trading of currencies, energy,grains, U.S. and non-U.S. interest rates, livestock, softs and indicesand were partially offset by losses recognized in the trading ofmetals.

The Partnership experienced net trading gains of$13,503,236 before commissions and expenses during the period March 25,2002 (date Partnership was organized) through December 31, 2002. Gainswere primarily attributable to the trading of currencies, U.S. andnon-U.S. interest rates, indices, softs and livestock and werepartially offset by losses recognized in the trading of energy, grainsand metals.

Commodity markets are highly volatile. Broad pricefluctuations and rapid inflation increase the risks involved incommodity trading, but also increase the possibility of profit. Theprofitability of the Partnership depends on the existence of majorprice trends and the ability of the Advisor to identify those pricetrends correctly. Price trends are influenced by, among other things,changing supply and demand relationships, weather, governmental,agricultural, commercial and trade programs and policies, national andinternational political and economic events and changes in interestrates. To the extent that market trends exist and the Advisor is ableto identify them, the Partnership expects to increase capital throughoperations.

(d)    Operational Risk

ThePartnership is directly exposed to market risk and credit risk, whicharise in the normal course of its business activities. Slightly lessdirect, but of critical importance, are risks pertaining to operationaland back office support. This is particularly the case in a rapidlychanging and increasingly global environment with increasingtransaction volumes and an expansion in the number and complexity ofproducts in the marketplace.

13

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Such risks include:

Operational/Settlement Risk — the risk of financial andopportunity loss and legal liability attributable to operationalproblems, such as inaccurate pricing of transactions, untimely tradeexecution, clearance and/or settlement, or the inability to processlarge volumes of transactions. The Partnership is subject to increasedrisks with respect to its trading activities in emerging marketsecurities, where clearance, settlement, and custodial risks are oftengreater than in more established markets.

TechnologicalRisk — the risk of loss attributable to technologicallimitations or hardware failure that constrain the Partnership'sability to gather, process, and communicate information efficiently andsecurely, without interruption, to customers, among Redeemable Unitswithin the Partnership, and in the markets where the Partnershipparticipates.

Legal/Documentation Risk — the riskof loss attributable to deficiencies in the documentation oftransactions (such as trade confirmations) and customer relationships(such as master netting agreements) or errors that result innoncompliance with applicable legal and regulatory requirements.

Financial Control Risk — the risk of loss attributableto limitations in financial systems and controls. Strong financialsystems and controls ensure that assets are safeguarded, thattransactions are executed in accordance with management'sauthorization, and that financial information utilized by managementand communicated to external parties, including the Partnership'sRedeemable Unit holder, creditors, and regulators, is free of materialerrors.

(e)    Critical Accounting Policies.

The preparation of financial statements in conformity withaccounting principles generally accepted in the United States ofAmerica requires estimates and assumptions that affect the reportedamounts of assets and liabilities, revenues and expenses, and relateddisclosures of contingent assets and liabilities in the financialstatements and accompanying notes.

All commodity interests(including derivative financial instruments and derivative commodityinstruments) are used for trading purposes. The commodity interests arerecorded on trade date and open contracts are recorded in the statementof financial condition at fair value on the last business day of theperiod, which represents market value for those commodity interests forwhich market quotations are readily available or other measures of fairvalue deemed appropriate by management of the General Partner for thosecommodity interests and foreign currencies for which market quotationsare not readily available, including dealer quotes for swaps andcertain option contracts. Investments in commodity interestsdenominated in foreign currencies are translated into U.S. dollars atthe exchange rates prevailing on the last business day of the period.Realized gains (losses) and changes in unrealized values on commodityinterests and foreign currencies are recognized in the period in whichthe contract is closed or the changes occur and are included in netgains (losses) on trading of commodity interests.

Foreigncurrency contracts are those contracts where the Partnership 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 net equity therein,representing unrealized gain or loss on the contracts as measured bythe difference between the forward foreign exchange rates at the datesof entry into the contracts and the forward rates at the reportingdates, is included in the statement of financial condition. Realizedgains (losses) and changes in unrealized values on foreign currencycontracts are recognized in the period in which the contract is closedor the changes occur and are included in the statement of income andexpenses and partners' capital.

The General Partnerbelieves that the accounting policies that will be most critical to thePartnership's financial condition and results of operationsrelate to the valuation of the Partnership's positions. Themajority of the Partnership's positions will be exchange-tradedfutures contracts, which will be valued daily at settlement pricespublished by the exchanges. If applicable, the Partnership's spotand forward foreign currency contracts will also be valued at publisheddaily settlement prices or at dealers' quotes. The GeneralPartner expects that under normal circumstances substantially all ofthe Partnership's assets will be valued by objective measures andwithout difficulty.

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Item 7A.    Quantitative andQualitative Disclosures About Market Risk.

Introduction

The Partnership is a speculative commoditypool. The market sensitive instruments held by it are acquired forspeculative trading purposes, and all or substantially all of thePartnership's assets are subject to the risk of trading loss.Unlike an operating company, the risk of market sensitive instrumentsis integral, not incidental, to the Partnership's main line ofbusiness.

The risk to the limited partners that have purchasedinterests in the Partnership is limited to the amount of their capitalcontributions to the Partnership and their share of Partnership assetsand undistributed profits. This limited liability is a consequence ofthe organization of the Partnership as a limited partnership underapplicable law.

Market movements result in frequent changes inthe fair market value of the Partnership's open positions and,consequently, in its earnings and cash flow. The Partnership'smarket risk is influenced by a wide variety of factors, including thelevel and volatility of interest rates, exchange rates, equity pricelevels, the market value of financial instruments and contracts, thediversification effects among the Partnership's open positionsand the liquidity of the markets in which it trades.

ThePartnership rapidly acquires and liquidates both long and shortpositions in a wide range of different markets. Consequently, it is notpossible to predict how a particular future market scenario will affectperformance, and the Partnership's past performance is notnecessarily indicative of its future results.

Value at Risk is ameasure of the maximum amount which the Partnership could reasonably beexpected to lose in a given market sector. However, the inherentuncertainty of the Partnership's speculative trading and therecurrence in the markets traded by the Partnership of market movementsfar exceeding expectations could result in actual trading ornon-trading losses far beyond the indicated Value at Risk or thePartnership'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 Partnership's losses inany market sector will be limited to Value at Risk or by thePartnership's attempts to manage its market risk.

Quantifying the Partnership's Trading Value at Risk

The following quantitative disclosures regarding thePartnership's market risk exposures contain"forward-looking statements" within themeaning of the safe harbor from civil liability provided for suchstatements by the Private Securities Litigation Reform Act of 1995 (setforth in Section 27A of the Securities Act of 1933 and Section 21E ofthe Securities Exchange Act of 1934). All quantitative disclosures inthis section are deemed to be forward-looking statements for purposesof the safe harbor except for statements of historical fact (such asthe terms of particular contracts and the number of market risksensitive instruments held during or at the end of the reportingperiod).

The Partnership's risk exposure in the variousmarket sectors traded by the Advisor is quantified below in terms ofValue at Risk. Due to the Partnership's mark-to-marketaccounting, any loss in the fair value of the Partnership's openpositions is directly reflected in the Partnership's earnings(realized or unrealized).Exchange maintenance margin requirements havebeen used by the Partnership as the measure of its Value at Risk.Maintenance margin requirements are set by exchanges to equal or exceedthe maximum losses reasonably expected to be incurred in the fair valueof any given contract in 95%–99% of any one-dayintervals. The maintenance margin levels are established by dealers andexchanges using historical price studies as well as an assessment ofcurrent market volatility (including the implied volatility of theoptions on a given futures contract) and economic fundamentals toprovide a probabilistic estimate of the maximum expected near-termone-day price fluctuation. Maintenance margin has been used rather thanthe more generally available initial margin, because initial marginincludes a credit risk component which is not relevant to Value atRisk.

In the case of market sensitive instruments which are notexchange traded (almost exclusively currencies in the case of thePartnership), the margin requirements for the equivalent futurespositions have been used as Value at Risk. In those rare cases in whicha futures-equivalent margin is not available, dealers' marginshave been used.

15

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The fair value of the Partnership'sfutures and forward positions does not have any optionality component.However, the Advisor may trade commodity options. The Value at Riskassociated with options is reflected in the following table as themargin requirement attributable to the instrument underlying eachoption. Where this instrument is a futures contract, the futuresmargin, and where this instrument is a physical commodity, thefutures-equivalent maintenance margin has been used. This calculationis conservative in that it assumes that the fair value of an optionwill decline by the same amount as the fair value of the underlyinginstrument, whereas, in fact, the fair values of the options traded bythe Partnership in almost all cases fluctuate to a lesser extent thanthose of the underlying instruments.

In quantifying thePartnership's Value at Risk, 100% positive correlation inthe different positions held in each market risk category has beenassumed. Consequently, the margin requirements applicable to the opencontracts have simply been added to determine each tradingcategory's aggregate Value at Risk. The diversification effectsresulting from the fact that the Partnership's positions arerarely, if ever, 100% positively correlated have not beenreflected.

The Partnership's Trading Value at Risk inDifferent Market Sectors

The following table indicates thetrading Value at Risk associated with the Partnership's openpositions by market category as of December 31, 2004, and the highest,lowest and average value at any point during the year and the averagevalue for the twelve months ended December 31, 2004. All open positiontrading risk exposures of the Partnership have been included incalculating the figures set forth below. As of December 31, 2004, thePartnership's total capitalization was $125,370,686.

December 31,2004

|                                  |  |               |            |                          |  |                   |        |                   |  |                      |            |        |  |        |         |        |  |        |           |        |  |  |
|----------------------------------|--|---------------|------------|--------------------------|--|-------------------|--------|-------------------|--|----------------------|------------|--------|--|--------|---------|--------|--|--------|-----------|--------|--|--|
|                             |  |          |            |                     |  | Yearto Date       |
| MarketSector                     |  | Value at Risk |            | % ofTotal Capitalization |  | High Value atRisk |        | Low Value at Risk |  | AverageValue atRisk* |
| Currencies:                      |  |          |       |                     |  |              |   |              |  |                 |       |   |  |   |    |   |  |   |      |   |
| –Over-the-counterContracts |  | $             | 5,565,841  |                     |  |              | 4.44   | %            |  | $                    | 5,565,841  |   |  | $      | 4,456   |   |  | $      | 705,744   |   |
| Energy                           |  |          | 297,500    |                     |  |              | 0.24   | %            |  |                 | 2,690,000  |   |  |   | 68,000  |   |  |   | 1,216,842 |   |
| InterestratesU.S.                |  |          | 1,567,950  |                     |  |              | 1.25   | %            |  |                 | 3,913,100  |   |  |   | 180,100 |   |  |   | 2,417,500 |   |
| InterestratesNon-U.S.            |  |          | 3,441,755  |                     |  |              | 2.74   | %            |  |                 | 7,093,441  |   |  |   | 234,668 |   |  |   | 4,218,699 |   |
| Metals                           |  |          |       |                     |  |              |   |              |  |                 |       |   |  |   |    |   |  |   |      |   |
| –Exchange TradedContracts  |  |          | 342,000    |                     |  |              | 0.27   | %            |  |                 | 537,000    |   |  |   | 246,000 |   |  |   | 407,000   |   |
| –Over-the-counterContracts |  |          | 837,725    |                     |  |              | 0.67   | %            |  |                 | 1,939,055  |   |  |   | 45,225  |   |  |   | 269,563   |   |
| Softs                            |  |          | 147,400    |                     |  |              | 0.12   | %            |  |                 | 287,222    |   |  |   | 8,289   |   |  |   | 85,806    |   |
| Indices                          |  |          | 14,446,332 |                     |  |              | 11.52  | %            |  |                 | 14,477,773 |   |  |   | 168,124 |   |  |   | 5,640,488 |   |
| **Total**                        |  | $             | 26,646,503 |                     |  |              | 21.25  | %            |  |                 |       |   |  |   |    |   |  |   |      |   |
|                                  |

|  |
|--|
|  |  |
|  |

|  |                                                  |
|--|--------------------------------------------------|
|  | *Annual average based on month-end value at risk |

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As of December 31, 2003, thePartnership's total capitalization was $13,310,380.

December 31,2003

|                                  |  |               |            |                         |  |                  |        |                  |  |                      |            |        |  |        |           |        |  |        |           |        |  |  |
|----------------------------------|--|---------------|------------|-------------------------|--|------------------|--------|------------------|--|----------------------|------------|--------|--|--------|-----------|--------|--|--------|-----------|--------|--|--|
|                             |  |          |            |                    |  | Yearto Date      |
| MarketSector                     |  | Value at Risk |            | % ofTotalCapitalization |  | HighValue atRisk |        | LowValue at Risk |  | AverageValue atRisk* |
| Currencies                       |  |          |       |                    |  |             |   |             |  |                 |       |   |  |   |      |   |  |
| –Exchange TradedContracts  |  | $             | 5,041,803  |                    |  |             | 3.29   | %           |  | $                    | 5,449,521  |   |  | $      | 1,433,142 |   |  | $      | 3,257,940 |   |
| –Over-the-counterContracts |  |          | 571,850    |                    |  |             | 0.37   | %           |  |                 | 2,807,286  |   |  |   | 17,349    |   |  |   | 1,080,770 |   |
| Energy                           |  |          | 832,500    |                    |  |             | 0.54   | %           |  |                 | 2,295,500  |   |  |   | 17,500    |   |  |   | 1,166,292 |   |
| Grains                           |  |          | 80,600     |                    |  |             | 0.05   | %           |  |                 | 699,150    |   |  |   | 39,200    |   |  |   | 311,696   |   |
| InterestratesU.S.                |  |          | 562,500    |                    |  |             | 0.37   | %           |  |                 | 3,266,250  |   |  |   | 45,600    |   |  |   | 1,288,433 |   |
| InterestratesNon-U.S.            |  |          | 209,196    |                    |  |             | 0.14   | %           |  |                 | 3,726,191  |   |  |   | 156,305   |   |  |   | 1,350,235 |   |
| Metals                           |  |          |       |                    |  |             |   |             |  |                 |       |   |  |   |      |   |  |   |      |   |
| –Exchange TradedContracts  |  |          | 262,500    |                    |  |             | 0.17   | %           |  |                 | 2,345,200  |   |  |   | 192,000   |   |  |   | 237,375   |   |
| –Over-the-counterContracts |  |          | 1,359,525  |                    |  |             | 0.89   | %           |  |                 | 1,682,205  |   |  |   | 54,000    |   |  |   | 857,512   |   |
| Indices                          |  |          | 10,287,679 |                    |  |             | 6.71   | %           |  |                 | 21,583,003 |   |  |   | 907,347   |   |  |   | 7,863,439 |   |
| **Total**                        |  | $             | 19,208,153 |                    |  |             | 12.53  | %           |  |                 |       |   |  |   |      |   |  |   |      |   |
|                                  |

|  |
|--|
|  |  |
|  |

|  |                                                  |
|--|--------------------------------------------------|
|  | *Annual average based on month-end value at risk |

MaterialLimitations on Value at Risk as an Assessment of Market Risk

The face value of the market sector instruments held by thePartnership is typically many times the applicable maintenance marginrequirement (margin requirements generally range between 2% and15% of contract face value) as well as many times thecapitalization of the Partnership. The magnitude of thePartnership's open positions creates a "risk ofruin" not typically found in most other investmentvehicles. Because of the size of its positions, certain marketconditions — unusual, but historically recurring from time totime — could cause the Partnership to incur severe losses over ashort period of time. The foregoing Value at Risk table — as wellas the past performance of the Partnership — give no indicationof this "risk of ruin."

Non-TradingRisk

The Partnership has non-trading market risk on its foreigncash balances not needed for margin. However, these balances (as wellas any market risk they represent) are immaterial.

Materialityas used in this section, "Qualitative and QuantitativeDisclosures About Market Risk," is based on an assessmentof reasonably possible market movements and the potential losses causedby such movements, taking into account the leverage, optionality andmultiplier features of the Partnership's market sensitiveinstruments.

Qualitative Disclosures Regarding Primary TradingRisk Exposures

The following qualitative disclosures regardingthe Partnership's market risk exposures — except for (i)those disclosures that are statements of historical fact and (ii) thedescriptions of how the Partnership manages its primary market riskexposures — constitute forward-looking statements within themeaning of Section 27A of the Securities Act and Section 21E of theSecurities Exchange Act. The Partnership's primary market riskexposures as well as the strategies used and to be used by the GeneralPartner and the Advisor for managing such exposures are subject tonumerous uncertainties, contingencies and risks, any one of which couldcause the actual results of the Partnership's risk controls todiffer materially from the objectives of such strategies. Governmentinterventions, defaults and expropriations, illiquid markets, theemergence of dominant fundamental factors, political upheavals, changesin historical price relationships, an influx of new marketparticipants, increased regulation and many other factors could resultin material losses as well as in material changes to the risk exposuresand the management strategies of the Partnership. There can be noassurance that the Partnership's current market exposure and/orrisk management strategies will not change materially or that any suchstrategies will be effective in either the short or long term.Investors must be prepared to lose all or substantially all of theirinvestment in the Partnership.

17

----

The following were the primary tradingrisk exposures of the Partnership as of December 31, 2004, by marketsector.

Interest Rates. Interest rate movementsdirectly affect the price of the futures positions held by thePartnership and indirectly the value of its stock index and currencypositions. Interest rate movements in one country as well as relativeinterest rate movements between countries materially impact thePartnership's profitability. The Partnership's primaryinterest rate exposure is to interest rate fluctuations in the UnitedStates and the other G-8 countries. However, the Partnership also takesfutures positions on the government debt of smaller nations —e.g., Australia.

Currencies. ThePartnership's currency exposure is to exchange rate fluctuations,primarily fluctuations which disrupt the historical pricingrelationships between different currencies and currency pairs. Thesefluctuations are influenced by interest rate changes as well aspolitical and general economic conditions. The General Partner does notanticipate that the risk profile of the Partnership's currencysector will change significantly in the future. The currency tradingValue at Risk figure includes foreign margin amounts converted intoU.S. dollars with an incremental adjustment to reflect the exchangerate risk inherent to the dollar-based Partnership in expressing Valueat Risk in a functional currency other than dollars.

StockIndices. The Partnership's primary equity exposure is toequity price risk in the G-8 countries. The stock index futures tradedby the Partnership are limited to futures on broadly based indices. Asof December 31, 2004, the Partnership's primary exposures were inthe EUREX and NIKKEI stock indices. The General Partner anticipateslittle, if any, trading in non-G-8 stock indices. The Partnership isprimarily exposed to the risk of adverse price trends or static marketsin the major U.S., European and Japanese indices. (Static markets wouldnot cause major market changes but would make it difficult for thePartnership to avoid being "whipsawed" intonumerous small losses.)

Metals. The Partnership'sprimary metal market exposure is to fluctuations in the price of gold.Although the Advisor trades base metals such as copper, the principalmarket exposures of the Partnership have consistently been in theprecious metals. The General Partner anticipates that gold will remainthe primary metals market exposure for the Partnership.

Softs. The Partnership's primary commodities exposureis to agricultural price movements which are often directly affected bysevere or unexpected weather conditions. Cocoa, cotton and sugaraccounted for the substantial bulk of the Partnership's commodityexposure as of December 31, 2004.

Energy. ThePartnership's primary energy market exposure is to gas and oilprice movements, often resulting from political developments in theMiddle East. Oil prices can be volatile and substantial profits andlosses have been and are expected to continue to be experienced in thismarket.

Qualitative Disclosures Regarding Non-Trading RiskExposure

The following were the only non-trading risk exposuresof the Partnership as of December 31, 2004.

Foreign CurrencyBalances. The Partnership's primary foreign currencybalances are in Japanese yen, Euro dollar and Swiss francs. The Advisorregularly converts foreign currency balances to dollars in an attemptto control the Partnership's non-trading risk.

Qualitative Disclosures Regarding Means of Managing RiskExposure

The General Partner monitors and controls thePartnership's risk exposure on a daily basis through financial,credit and risk management monitoring systems and accordingly believesthat it has effective procedures for evaluating and limiting the creditand market risks to which the Partnership is subject.

TheGeneral Partner monitors the Partnership's performance and theconcentration of its open positions, and consults with the Advisorconcerning the Partnership's overall risk profile. If the GeneralPartner felt it necessary to do so, the General Partner could requirethe Advisor to close out individual positions as well as enter certainpositions traded on behalf of the Partnership. However, any suchintervention would be a highly unusual event. The General Partnerprimarily relies on the Advisor's own risk control policies whilemaintaining a general supervisory overview of the Partnership'smarket risk exposures.

18

----

The Advisor applies its own riskmanagement policies to its trading. The Advisor often followsdiversification guidelines, margin limits and stop loss points to exita position. The Advisor's research of risk management oftensuggests ongoing modifications to its trading programs.

As partof the General Partner's risk management, the General Partnerperiodically meets with the Advisor to discuss its risk management andto look for any material changes to the Advisor's portfoliobalance and trading techniques. The Advisor is required to notify theGeneral Partner of any material changes to itsprograms.

19

----

Item8.    Financial Statements and Supplementary Data.

SALOMON SMITH BARNEY FAIRFIELD FUTURES FUND L.P.

INDEX TOFINANCIALSTATEMENTS

|                                                                                                                                                                                |  |             |  |  |  |  |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|-------------|--|--|--|--|
|                                                                                                                                                                           |  | PageNumber  |
| Oath orAffirmation                                                                                                                                                             |  | F-2         |
| Reportof Independent Registered Public AccountingFirm                                                                                                                          |  | F-3         |
| FinancialStatements:                                                                                                                                                           |  |
| Statements of Financial Condition atDecember 31, 2004 and 2003                                                                                                                 |  | F-4         |
| CondensedSchedules of Investments at December 31, 2004 and 2003                                                                                                                |  | F-5 -F-6    |
| Statements of Income and Expenses for the yearsended December 31, 2004 and 2003 and  for the period June 5,2002 (commencement of trading operations) to December 31,2002       |  | F-7         |
| Statements of Changes inPartners' Capital for the years ended December 31, 2004 and2003 and for the period March 25, 2002 (date Partnership was organized)to December 31, 2002 |  | F-8         |
| Statements ofCash Flows for the years ended December 31, 2004 and 2003 and for theperiod March 25, 2002 (date Partnership was organized) to December 31,2002                   |  | F-9         |
| Notes to FinancialStatements                                                                                                                                                   |  | F-10 - F-14 |
| Selected UnauditedQuarterly FinancialData                                                                                                                                      |  | F-15        |
|                                                                                                                                                                                |

F-1

----

To theLimited Partners ofSalomon Smith Barney Fairfield Futures FundL.P.

To the best of the knowledge and belief of theundersigned, the information contained herein is accurate andcomplete.

|  | /s/ Daniel R. McAuliffe,Jr.                |
|--|-----------------------------------------------------------------------------------------------------------------------|

|  | By: Daniel R.McAuliffe, Jr. |
|--|-----------------------------|

|  | Chief Financial Officer andDirectorCitigroup Managed Futures LLCGeneral Partner, SalomonSmith Barney Fairfield Futures Fund L.P. |
|--|----------------------------------------------------------------------------------------------------------------------------------|

|  | **Citigroup Managed Futures LLC**399 ParkAvenue7th FloorNew York, N.Y.10022212-559-2011 |
|--|-----------------------------------------------------------------------------------------|

F-2

----

Report of Independent Registered PublicAccounting Firm

To the Partners ofSalomon SmithBarney Fairfield Futures Fund L.P.:

We have audited theaccompanying statements of financial condition of Salomon Smith BarneyFairfield Futures Fund L.P. (the Partnership), including the condensedschedules of investments, as of December 31, 2004 and 2003, and therelated statements of income and expenses, changes in partners'capital, and cash flows for each of the years in the two-year periodended December 31, 2004 and for the period from March  25, 2002(date Partnership was organized) to December 31, 2002. These financialstatements are the responsibility of the Partnership'smanagement. Our responsibility is to express an opinion on thesefinancial statements based on our audits.

We conductedour audits in accordance with the standards of the Public CompanyAccounting Oversight Board (United States). Those standards requirethat we plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements. An audit alsoincludes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audits provide areasonable basis for our opinion.

In our opinion, thefinancial statements referred to above present fairly, in all materialrespects, the financial position of Salomon Smith Barney FairfieldFutures Fund L.P. as of December 31, 2004 and 2003, and the results ofits operations, changes in its partners' capital, and its cashflows for each of the years in the two-year period ended December 31,2004 and for the period from March  25, 2002 to December 31,2002, in conformity with U.S. generally accepted accountingprinciples.

/s/ KPMG LLP New York, NewYorkMarch 14, 2005

F-3

----

Salomon Smith Barney FairfieldFutures Fund L.P.Statements of Financial ConditionDecember31, 2004 and2003

|                                                                                                                                        |  |        |             |        |  |        |             |        |  |  |
|----------------------------------------------------------------------------------------------------------------------------------------|--|--------|-------------|--------|--|--------|-------------|--------|--|--|
|                                                                                                                                   |  | 2004   |             | 2003   |
| **Assets:**                                                                                                                            |  |   |        |   |  |
| Equityin commodity futures tradingaccount:                                                                                             |  |   |        |   |  |
| Cash (restricted$29,455,643 and $22,528,015 in 2004 and 2003, respectively) (Note3c)                                                   |  | $      | 129,515,744 |   |  | $      | 147,097,742 |   |
| Netunrealized appreciation on open futurespositions                                                                                    |  |   | 2,936,841   |   |  |   | 7,024,635   |   |
| Unrealizedappreciation on open forwardcontracts                                                                                        |  |   | 5,771,456   |   |  |   | 9,431,409   |   |
|                                                                                                                                   |  |   | 138,224,041 |   |  |   | 163,553,786 |   |
| Interestreceivable (Note3c)                                                                                                            |  |   | 22,316      |   |  |   | 17,096      |   |
|                                                                                                                                   |  | $      | 138,246,357 |   |  | $      | 163,570,882 |   |
| **Liabilitiesand Partners'Capital:**                                                                                                   |  |
| Liabilities:                                                                                                                           |  |
| Unrealizeddepreciation on open forwardcontracts                                                                                        |  | $      | 7,345,959   |   |  | $      | 5,457,368   |   |
| Accruedexpenses:                                                                                                                       |  |
| Commissions (Note3c)                                                                                                                   |  |   | 498,924     |   |  |   | 604,289     |   |
| Managementfees (Note3b)                                                                                                                |  |   | 220,823     |   |  |   | 267,456     |   |
| Administrativefees (Note3a)                                                                                                            |  |   | 55,206      |   |  |   | 66,864      |   |
| Incentivefees (Note3b)                                                                                                                 |  |   | —     |   |  |   | 2,810,786   |   |
| Due toCGM (Note6)                                                                                                                      |  |   | —     |   |  |   | 14,614      |   |
| Professionalfees                                                                                                                       |  |   | 28,251      |   |  |   | 50,378      |   |
| Other                                                                                                                                  |  |   | 16,541      |   |  |   | 3,110       |   |
| Redemptionspayable (Note5)                                                                                                             |  |   | 4,709,967   |   |  |   | 985,637     |   |
|                                                                                                                                   |  |   | 12,875,671  |   |  |   | 10,260,502  |   |
| Partners'Capital (Notes 1 and 5):                                                                                                      |  |
| General Partner,864.9335 Unit equivalents outstanding in 2004 and  2003                                                                |  |   | 1,525,816   |   |  |   | 1,546,626   |   |
| LimitedPartners, 70,203.4817 and 84,872.1963 Redeemable Units of LimitedPartnership Interest outstanding in 2004 and 2003,respectively |  |   | 123,844,870 |   |  |   | 151,763,754 |   |
|                                                                                                                                   |  |   | 125,370,686 |   |  |   | 153,310,380 |   |
|                                                                                                                                   |  | $      | 138,246,357 |   |  | $      | 163,570,882 |   |
|                                                                                                                                   |  |   |        |   |  |
|                                                                                                                                        |

Seeaccompanying notes to financial statements.

F-4

----

Salomon Smith BarneyFairfield FuturesFund L.P.Condensed Schedule of InvestmentsDecember 31,2004

|                                   |  |                                                       |  |           |            |         |  |  |  |  |
|-----------------------------------|--|-------------------------------------------------------|--|-----------|------------|---------|--|--|--|--|
| Sector                            |  | Contract                                              |  | FairValue |
| Currencies                        |  |                                                  |  |
|                              |  | Unrealizedappreciation on forward contracts3.80%      |  | $         | 4,769,286  |    |
|                              |  | Unrealizeddepreciation on forward contracts(4.85)%    |  |      | (6,082,616 | )  |
| TotalCurrencies(1.05)%            |  |                                                  |  |      | (1,313,330 | )  |
| Energy0.22%                       |  | Futures contracts sold0.22%                           |  |      | 274,150    |    |
| InterestRates U.S.                |  |
|                              |  | Futures contracts purchased0.37%                      |  |      | 458,014    |    |
|                              |  | Futurescontracts sold0.08%                            |  |      | 102,760    |    |
| TotalInterest Rates U.S.0.45%     |  |                                                  |  |      | 560,774    |    |
| InterestRates Non-U.S.            |  |
|                              |  | Futures contracts purchased0.10%                      |  |      | 133,530    |    |
|                              |  | Futurescontracts sold(0.06)%                          |  |      | (79,474    | )  |
| TotalInterest Rates Non-U.S.0.04% |  |                                                  |  |      | 54,056     |    |
| Metals                            |  |
|                              |  | Futurescontracts purchased(0.19)%                     |  |      | (244,360   | )  |
|                              |  | Unrealizedappreciation on forward contracts0.80%      |  |      | 1,002,170  |    |
|                              |  | Unrealizeddepreciation on forward contracts(1.01)%    |  |      | (1,263,343 | )  |
|                              |  |     Totalforward contracts(0.21)% |  |      | (261,173   | )  |
| TotalMetals(0.40)%                |  |                                                  |  |      | (505,533   | )  |
| Softs0.09%                        |  | Futures contracts purchased0.09%                      |  |      | 107,831    |    |
| Indices1.74%                      |  | Futures contracts purchased1.74%                      |  |      | 2,184,390  |    |
| TotalFair Value1.09%              |  |                                                  |  | $         | 1,362,338  |    |
|                                   |

|                    |  |                         |           |                              |  |        |        |         |  |  |
|--------------------|--|-------------------------|-----------|------------------------------|--|--------|--------|---------|--|--|
| CountryComposition |  | Investmentsat FairValue |           | % of Investmentsat FairValue |
| Australia          |  | $                       | 4,934     |                         |  |   | 0.36   | %  |
| France             |  |                    | (18,168   | )                       |  |   | (1.33  | )  |
| Germany            |  |                    | (171,260  | )                       |  |   | (12.57 | )  |
| HongKong           |  |                    | (6,741    | )                       |  |   | (0.50  | )  |
| Japan              |  |                    | 63,150    |                         |  |   | 4.64   |    |
| Spain              |  |                    | 250,083   |                         |  |   | 18.36  |    |
| UnitedKingdom      |  |                    | 321,712   |                         |  |   | 23.61  |    |
| UnitedStates       |  |                    | 918,628   |                         |  |   | 67.43  |    |
|               |  | $                       | 1,362,338 |                         |  |   | 100.00 | %  |
|                    |

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

See accompanying notes tofinancial statements.

F-5

----

Salomon Smith BarneyFairfield FuturesFund L.P.Condensed Schedule of InvestmentsDecember 31,2003

|                                |  |                                                     |  |           |            |         |  |  |  |  |
|--------------------------------|--|-----------------------------------------------------|--|-----------|------------|---------|--|--|--|--|
| Sector                         |  | Contract                                            |  | FairValue |
| Currencies                     |  |
|                           |  | Futurescontracts purchased2.19%                     |  | $         | 3,353,014  |    |
|                           |  | Unrealizedappreciation on forward contracts0.00%*   |  |      | 547        |    |
|                           |  | Unrealizeddepreciation on forward contracts(0.46)%  |  |      | (697,168   | )  |
|                           |  | Totalforward contracts(0.46%)                       |  |      | (696,621   | )  |
| TotalCurrencies1.73%           |  |                                                |  |      | 2,656,393  |    |
| Energy(0.30)%                  |  | Futures contracts purchased(0.30)%                  |  |      | (467,020   | )  |
| Grains(0.14)%                  |  | Futures contracts purchased(0.14)%                  |  |      | (212,455   | )  |
| InterestRates U.S. (0.07)%     |  | Futures contracts purchased(0.07)%                  |  |      | (113,875   | )  |
| InterestRates Non-U.S. (0.03)% |  | Futures contracts purchased(0.03)%                  |  |      | (44,191    | )  |
| Metals                         |  |
|                           |  | Futures contracts purchased0.21%                    |  |      | 316,390    |    |
|                           |  | Unrealizedappreciation on forward contracts6.15%    |  |      | 9,430,862  |    |
|                           |  | Unrealizeddepreciation on forward contracts(3.11)%  |  |      | (4,760,200 | )  |
|                           |  |     Totalforward contracts3.04% |  |      | 4,670,662  |    |
| TotalMetals3.25%               |  |                                                |  |      | 4,987,052  |    |
| Indices2.73%                   |  | Futures contracts sold2.73%                         |  |      | 4,192,772  |    |
| TotalFair Value7.17%           |  |                                                |  | $         | 10,998,676 |    |
|                                |

|                    |  |                         |            |                              |  |        |        |         |  |  |
|--------------------|--|-------------------------|------------|------------------------------|--|--------|--------|---------|--|--|
| CountryComposition |  | Investmentsat FairValue |            | % of Investmentsat FairValue |
| France             |  | $                       | 114,273    |                         |  |   | 1.04   | %  |
| Germany            |  |                    | 1,423,867  |                         |  |   | 12.95  |    |
| HongKong           |  |                    | 19,193     |                         |  |   | 0.17   |    |
| Japan              |  |                    | (17,134    | )                       |  |   | (0.16  | )  |
| Spain              |  |                    | 251,047    |                         |  |   | 2.28   |    |
| UnitedKingdom      |  |                    | 4,871,097  |                         |  |   | 44.29  |    |
| UnitedStates       |  |                    | 4,336,333  |                         |  |   | 39.43  |    |
|               |  | $                       | 10,998,676 |                         |  |   | 100.00 | %  |
|                    |

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

See accompanying notes tofinancial statements.

F-6

----

Salomon Smith BarneyFairfield FuturesFund L.P.Statements of Income and Expensesfor the years endedDecember 31, 2004 and 2003 and for the period June 5, 2002(commencement of trading operations) to December 31,2002

|                                                                                                                        |  |        |            |         |  |        |            |        |  |        |            |        |  |  |
|------------------------------------------------------------------------------------------------------------------------|--|--------|------------|---------|--|--------|------------|--------|--|--------|------------|--------|--|--|
|                                                                                                                   |  | 2004   |            | 2003    |  | 2002   |
| Income:                                                                                                                |  |   |       |    |  |   |       |   |  |
| Netgains (losses) on trading of commodityinterests:                                                                    |  |   |       |    |  |   |       |   |  |
| Realized gainson closed positions and foreigncurrencies                                                                |  | $      | 18,246,977 |    |  | $      | 24,151,280 |   |  | $      | 9,858,197  |   |
| Netunrealized gains (losses) on openpositions                                                                          |  |   | (9,636,338 | )  |  |   | 7,353,637  |   |  |   | 3,645,039  |   |
|                                                                                                                   |  |   | 8,610,639  |    |  |   | 31,504,917 |   |  |   | 13,503,236 |   |
| Interestincome (Note3c)                                                                                                |  |   | 1,271,443  |    |  |   | 829,712    |   |  |   | 247,745    |   |
|                                                                                                                   |  |   | 9,882,082  |    |  |   | 32,334,629 |   |  |   | 13,750,981 |   |
| Expenses:                                                                                                              |  |   |       |    |  |
| Brokeragecommissions including clearing fees of $184,032, $209,012 and $31,142,respectively (Note3c)                   |  |   | 6,785,010  |    |  |   | 5,845,292  |   |  |   | 1,073,575  |   |
| Managementfees (Note3b)                                                                                                |  |   | 2,705,964  |    |  |   | 2,295,848  |   |  |   | 427,899    |   |
| Administrativefees (Note3a)                                                                                            |  |   | 676,491    |    |  |   | 573,962    |   |  |   | 106,975    |   |
| Incentivefees (Note3b)                                                                                                 |  |   | 2,826,991  |    |  |   | 4,558,435  |   |  |   | 2,361,322  |   |
| Professionalfees                                                                                                       |  |   | 82,576     |    |  |   | 93,792     |   |  |   | 62,500     |   |
| Otherexpenses                                                                                                          |  |   | 20,382     |    |  |   | 9,365      |   |  |   | 12,195     |   |
|                                                                                                                   |  |   | 13,097,414 |    |  |   | 13,376,694 |   |  |   | 4,044,466  |   |
| Netincome(loss)                                                                                                        |  | $      | (3,215,332 | )  |  | $      | 18,957,935 |   |  | $      | 9,706,515  |   |
| Netincome (loss) per Redeemable Unit of Limited Partnership Interest andGeneral Partner Unit equivalent (Notes 1 and7) |  | $      | (24.06     | )  |  | $      | 309.07     |   |  | $      | 497.79     |   |
|                                                                                                                        |

Seeaccompanying notes to financialstatements.

F-7

----

Salomon Smith BarneyFairfield FuturesFund L.P.Statement of Changes in Partners' Capitalforthe years ended December 31, 2004 and 2003 and for the period June5, 2002 (commencement of trading operations) to December 31,2002

|                                                                                                                                                             |  |                 |             |                |  |        |           |         |  |        |             |         |  |  |  |  |  |  |  |  |  |  |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--|-----------------|-------------|----------------|--|--------|-----------|---------|--|--------|-------------|---------|--|--|--|--|--|--|--|--|--|--|
|                                                                                                                                                        |  | LimitedPartners |             | GeneralPartner |  | Total  |           |
| Initial capital contributions,1 Redeemable Unit of Limited Partnership Interest and GeneralPartner's contribution representing 1 Unitequivalent             |  | $               | 1,000       |           |  | $      | 1,000     |    |  | $      | 2,000       |    |  |
| Proceedsfrom offering of 12,423 Redeemable Units of Limited PartnershipInterest and General Partner's contribution representing 125 Unitequivalents (Note1) |  |            | 12,423,000  |           |  |   | 125,000   |    |  |   | 12,548,000  |    |  |
| Offeringcosts (Note6)                                                                                                                                       |  |            | (49,000     | )         |  |   | (1,000    | )  |  |   | (50,000     | )  |  |
| OpeningPartnershipcapital                                                                                                                                   |  |            | 12,375,000  |           |  |   | 125,000   |    |  |   | 12,500,000  |    |  |
| Netincome                                                                                                                                                   |  |            | 9,557,219   |           |  |   | 149,296   |    |  |   | 9,706,515   |    |  |
| Saleof 32,061.9138 Redeemable Units of Limited Partnership Interest andGeneral Partner's contribution representing 425.8983 Unitequivalents                 |  |            | 43,701,000  |           |  |   | 542,000   |    |  |   | 44,243,000  |    |  |
| Redemptionof 5,575.0488 Redeemable Units of Limited PartnershipInterest                                                                                     |  |            | (8,081,246  | )         |  |   | —   |    |  |   | (8,081,246  | )  |  |
| Partners'capital at December  31,2002                                                                                                                       |  |            | 57,551,973  |           |  |   | 816,296   |    |  |   | 58,368,269  |    |  |
| Netincome                                                                                                                                                   |  |            | 18,702,605  |           |  |   | 255,330   |    |  |   | 18,957,935  |    |  |
| Saleof 57,621.1285 Redeemable Units of Limited Partnership Interest andGeneral Partner's contribution representing 313.0352 Unitequivalents                 |  |            | 94,258,000  |           |  |   | 475,000   |    |  |   | 94,733,000  |    |  |
| Redemptionof 11,659.7972 Redeemable Units of Limited PartnershipInterest                                                                                    |  |            | (18,748,824 | )         |  |   | —   |    |  |   | (18,748,824 | )  |  |
| Partners'capital at December  31,2003                                                                                                                       |  |            | 151,763,754 |           |  |   | 1,546,626 |    |  |   | 153,310,380 |    |  |
| Netloss                                                                                                                                                     |  |            | (3,194,522  | )         |  |   | (20,810   | )  |  |   | (3,215,332  | )  |  |
| Redemptionof 14,668.7146 Redeemable Units of Limited PartnershipInterest                                                                                    |  |            | (24,724,362 | )         |  |   | —   |    |  |   | (24,724,362 | )  |  |
| Partners'capital at December 31,2004                                                                                                                        |  | $               | 123,844,870 |           |  | $      | 1,525,816 |    |  | $      | 125,370,686 |    |  |
|                                                                                                                                                             |

NetAsset Value Per RedeemableUnit:

|       |  |   |          |        |  |  |
|-------|--|---|----------|--------|--|--|
| 2002: |  | $ | 1,479.07 |   |
| 2003: |  | $ | 1,788.14 |   |
| 2004: |  | $ | 1,764.08 |   |
|       |

Seeaccompanying notes to financial statements.

F-8

----

Salomon Smith Barney FairfieldFutures Fund L.P.Statements of Cash Flowsfor the years endedDecember 31, 2004 and 2003 andfor the period March 25, 2002 (datePartnership was organized)to December 31,2002

|                                                                                                 |  |        |             |         |  |        |             |         |  |        |            |         |  |  |
|-------------------------------------------------------------------------------------------------|--|--------|-------------|---------|--|--------|-------------|---------|--|--------|------------|---------|--|--|
|                                                                                            |  | 2004   |             | 2003    |  | 2002   |
| Cashflows from operatingactivities:                                                             |  |   |        |    |  |   |        |    |  |
| Net Income(loss)                                                                                |  | $      | (3,215,332  | )  |  | $      | 18,957,935  |    |  | $      | 9,706,515  |    |
| Adjustmentsto reconcile net income (loss) to net cash provided by (used in)operatingactivities: |  |   |        |    |  |   |        |    |  |
| Changesin operating assets andliabilities:                                                      |  |   |        |    |  |   |        |    |  |
| (Increase)decrease in restrictedcash                                                            |  |   | (6,927,628  | )  |  |   | (16,237,202 | )  |  |   | (6,290,813 | )  |
| (Increase)decrease in net unrealized appreciation/depreciation on open futurespositions         |  |   | 4,087,794   |    |  |   | (2,443,655  | )  |  |   | (4,580,980 | )  |
| (Increase)decrease in unrealized appreciation on open forwardcontracts                          |  |   | 3,659,953   |    |  |   | (9,304,284  | )  |  |   | (127,125   | )  |
| (Increase)decrease in interestreceivable                                                        |  |   | (5,220      | )  |  |   | 28,987      |    |  |   | (46,083    | )  |
| Increase(decrease) in unrealized depreciation on open forwardcontracts                          |  |   | 1,888,591   |    |  |   | 4,394,302   |    |  |   | 1,063,066  |    |
| Accruedexpenses:                                                                                |  |   |        |    |  |   |        |    |  |
| Increase(decrease) incommissions                                                                |  |   | (105,365    | )  |  |   | 378,583     |    |  |   | 225,706    |    |
| Increase(decrease) in managementfees                                                            |  |   | (46,633     | )  |  |   | 167,606     |    |  |   | 99,850     |    |
| Increase(decrease) in administrativefees                                                        |  |   | (11,658     | )  |  |   | 41,901      |    |  |   | 24,963     |    |
| Increase(decrease) in incentivefees                                                             |  |   | (2,810,786  | )  |  |   | 2,719,053   |    |  |   | 91,733     |    |
| Increase(decrease) in due toCGM                                                                 |  |   | (14,614     | )  |  |   | (23,849     | )  |  |   | 38,463     |    |
| Increase(decrease) inother                                                                      |  |   | 13,431      |    |  |   | 261         |    |  |   | 2,849      |    |
| Increase(decrease) in professionalfees                                                          |  |   | (22,127     | )  |  |   | 5,864       |    |  |   | 44,514     |    |
| Increase(decrease) in redemptionspayable                                                        |  |   | 3,724,330   |    |  |   | 824,248     |    |  |   | 161,389    |    |
| Netcash provided by (used in) operatingactivities                                               |  |   | 214,736     |    |  |   | (490,250    | )  |  |   | 414,047    |    |
| Cashflows from financingactivities:                                                             |  |   |        |    |  |   |        |    |  |
| Proceeds fromadditions – LimitedPartners                                                  |  |   | —     |    |  |   | 94,258,000  |    |  |   | 43,701,000 |    |
| Proceedsfrom additions – GeneralPartner                                                   |  |   | —     |    |  |   | 475,000     |    |  |   | 542,000    |    |
| Paymentsfor redemptions – LimitedPartners                                                 |  |   | (24,724,362 | )  |  |   | (18,748,824 | )  |  |   | (8,081,246 | )  |
| Netcash provided by (used in) financingactivities                                               |  |   | (24,724,362 | )  |  |   | 75,984,176  |    |  |   | 36,161,754 |    |
| Netchange incash                                                                                |  |   | (24,509,626 | )  |  |   | 75,493,926  |    |  |   | 36,575,801 |    |
| Unrestrictedcash, at beginning ofperiod                                                         |  |   | 124,569,727 |    |  |   | 49,075,801  |    |  |   | 12,500,000 |    |
| Unrestrictedcash, at end ofperiod                                                               |  | $      | 100,060,101 |    |  | $      | 124,569,727 |    |  | $      | 49,075,801 |    |
|                                                                                                 |

Seeaccompanying notes to financialstatements.

F-9

----

SalomonSmith BarneyFairfield Futures Fund L.P.Notes to FinancialStatements

|          |                          |
|----------|--------------------------|
| 1.  | PartnershipOrganization: |

Salomon Smith Barney Fairfield Futures Fund L.P.(the "Partnership") is a limited partnershipwhich was organized under the partnership laws of the State of New Yorkon March 25, 2002 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.

Between April 15, 2002 (commencement of the offering period) andJune 4, 2002, 12,423 redeemable units of Limited Partnership Interest("Redeemable Units") and 125 Units of GeneralPartnership Interest were sold at $1,000 per Redeemable Unit. Theproceeds of the initial offering were held in an escrow account untilJune 5, 2002, at which time they were remitted to the Partnership fortrading. The Partnership was authorized to sell 50,000 Redeemable Unitsof Limited Partnership Interest during its initial offering period. ThePartnership is not currently offering Redeemable Units.

Citigroup Managed Futures LLC, formerly Smith Barney FuturesManagement LLC, acts as the general partner (the "GeneralPartner") of the Partnership. The Partnership'scommodity broker is Citigroup Global Markets Inc.("CGM"), formerly Salomon Smith Barney Inc.CGM is an affiliate of the General Partner. The General Partner iswholly owned by Citigroup Global Markets Holdings Inc.("CGMHI"), formerly Salomon Smith BarneyHoldings Inc., which is the sole owner of CGM. CGMHI is a wholly ownedsubsidiary of Citigroup Inc.

The General Partner and eachlimited partner share in the profits and losses of the Partnership inproportion to the amount of partnership interest owned by each exceptthat no limited partner shall be liable for obligations of thePartnership in excess of their initial capital contribution andprofits, if any, net of distributions.

The Partnership will beliquidated upon the first to occur of the following: December 31, 2022;the Net Asset Value of a Redeemable Unit decreases to less than $400per Redeemable Unit as of the close of any business day; a decline innet assets after trading commences to less than $1,000,000, or undercertain other circumstances as defined in the Limited PartnershipAgreement.

|          |                      |
|----------|----------------------|
| 2.  | Accounting Policies: |

|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| a.  | All commodity interests (including derivativefinancial instruments and derivative commodity instruments) are usedfor trading purposes. The commodity interests are recorded on tradedate and open contracts are recorded in the statements of financialcondition at fair value on the last business day of the year, whichrepresents market value for those commodity interests for which marketquotations are readily available. Investments in commodity interestsdenominated in foreign currencies are translated into U.S. dollars atthe exchange rates prevailing on the last business day of the year.Realized gains (losses) and changes in unrealized gains (losses) onopen positions are recognized in the period in which the contract isclosed or the changes occur and are included in net gains (losses) ontrading of commodity interests. |

|          |                                                                                                                                                         |
|----------|---------------------------------------------------------------------------------------------------------------------------------------------------------|
| b.  | Incometaxes have not been provided as each partner is individually liable forthe taxes, if any, on their share of the Partnership's income andexpenses. |

|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| c.  | The preparation of financialstatements in conformity with accounting principles generally acceptedin the United States of America requires management to make estimatesand assumptions that affect the reported amounts of assets andliabilities, disclosure of contingent assets and liabilities at thedate of the financial statements and reported amounts of revenues andexpenses during the reporting period. Actual results could differ fromthese estimates. |

|          |                                                                                            |
|----------|--------------------------------------------------------------------------------------------|
| d.  | Certain prior periodamounts have been reclassified to conform to current yearpresentation. |

F-10

----

SalomonSmith BarneyFairfield Futures Fund L.P.Notes to FinancialStatements

|          |             |
|----------|-------------|
| 3.  | Agreements: |

|          |                               |
|----------|-------------------------------|
| a.  | LimitedPartnership Agreement: |

The General Partner administersthe business and affairs of the Partnership including selecting one ormore advisors to make trading decisions for the Partnership. ThePartnership will pay the General Partner an administrative fee equal to0.5% of adjusted net assets per year, payable monthly. Month-endNet Assets, for the purpose of calculating administrative fees are NetAssets, as defined in the Limited Partnership Agreement, prior to thereduction of redemptions and incentive fees.

|          |                       |
|----------|-----------------------|
| b.  | Management Agreement: |

TheGeneral Partner, on behalf of the Partnership, has entered into aManagement Agreement with Graham Capital Management L.P. (the"Advisor"), a registered commodity tradingadvisor. The Advisor is not affiliated with the General Partner or CGMand is not responsible for the organization or operation of thePartnership. The Partnership will pay the Advisor a monthly managementfee equal to 1/6 of 1% (2% per year) of month-end NetAssets allocated to the Advisor. Month-end Net Assets, for the purposeof calculating management fees are Net Assets, as defined in theLimited Partnership Agreement, prior to the reduction of redemptionsand incentive fees.

In addition, the Partnership willpay the Advisor an incentive fee payable quarterly equal to 20%of the New Trading Profits earned by the Advisor for the Partnership,as defined in the Management Agreement.

|          |                     |
|----------|---------------------|
| c.  | Customer Agreement: |

ThePartnership has entered into a Customer Agreement which provides thatthe Partnership will pay CGM a monthly brokerage fee equal to4.5% per year of adjusted net assets. Month-end Net Assets, forthe purpose of calculating commissions are Net Assets, as defined inthe Limited Partnership Agreement, prior to the reduction of accruedexpenses and redemptions payable. CGM will pay a portion of brokeragefees to its financial consultants who have sold Redeemable Units inthis Partnership. Brokerage fees will be paid for the life of thePartnership, although the rate at which such fees are paid may bechanged. The Partnership will pay for National Futures Associationfees, exchange, clearing, user, give-up and floor brokerage fees. Allof the Partnership's assets are deposited in thePartnership's account at CGM. The Partnership's cash isdeposited by CGM in segregated bank accounts to the extent required byCommodity Futures Trading Commission regulations. At December 31, 2004and 2003, the amount of cash held for margin requirements was$29,455,643 and $22,528,015, respectively. CGM has agreed to pay thePartnership interest on 80% of the average daily equity in thePartnership's account during each month (i.e., the sum of thedaily U.S. dollar cash balance in such accounts divided by the numberof calendar days in that month). Interest is earned at the 30-dayTreasury bill rate determined weekly by CGM. Interest is paid to thePartnership based on the average noncompetitive yield on 3-month U.S.Treasury bills maturing in 30 days (or on the maturity date closestthereto) from the date on which such weekly rate is determined. TheCustomer Agreement between the Partnership and CGM gives thePartnership the legal right to net unrealized gains and losses. TheCustomer Agreement may be terminated upon notice by either party.

|          |                     |
|----------|---------------------|
| 4.  | Trading Activities: |

The Partnershipwas formed for the purpose of trading contracts in a variety ofcommodity interests, including derivative financial instruments andderivative commodity instruments. The results of thePartnership's trading activities are shown in the statements ofincome and expenses.

F-11

----

SalomonSmith BarneyFairfield Futures Fund L.P.Notes to FinancialStatements

All of the commodity interests owned bythe Partnership are held for trading purposes. The average fair valueduring the years ended December 31, 2004 and 2003, based on a monthlycalculation, was $4,356,763 and $4,723,567, respectively.

|          |                                |
|----------|--------------------------------|
| 5.  | Distributions and Redemptions: |

Distributions of profits, if any, will be made at the solediscretion of the General Partner and at such times as the GeneralPartner may decide. A limited partner may require the Partnership toredeem their Redeemable Units at their redemption value per RedeemableUnit as of the last day of each month ending at least three monthsafter their issuance on ten days notice to the General Partner. For thepurpose of a redemption, any accrued liability for reimbursement ofoffering and organization expenses for the initial offering period willnot reduce redemption value per Redeemable Unit. There is no feecharged to limited partners in connection with redemptions.

|          |                 |
|----------|-----------------|
| 6.  | Offering Costs: |

Offering costs ofapproximately $50,000 relating to the issuance and marketing of thePartnership's Redeemable Units offered were initially paid byCGM. These costs will be reimbursed to CGM by the Partnership over thefirst 24 months of trading commencing with the month immediatelyfollowing the first twelve month period of operations (together withinterest at the prime rate quoted by JPMorgan Chase & Co.).

For the year ended December 31, 2004, all of these costs have beenreimbursed to CGM by the Partnership. In addition, the Partnership hasrecorded interest expense of $121 and $1,137 for the years endedDecember 31, 2004 and 2003, respectively, and $1,195 for the periodfrom March 25, 2002 to December 31, 2002 which is included in otherexpenses.

|          |                       |
|----------|-----------------------|
| 7.  | Financial Highlights: |

Changes in the Net Asset Value per Redeemable Unit of Partnershipinterest for the years ended December  31, 2004 and 2003 and forthe period from June 5, 2002 (commencement of trading operations) toDecember 31, 2002 were asfollows:

|                                                                                            |  |        |          |         |  |        |          |         |  |        |
|--------------------------------------------------------------------------------------------|--|--------|----------|---------|--|--------|----------|---------|--|--------|
|                                                                                       |  | 2004   |          | 2003    |  | 2002   |
| Netrealized and unrealizedgains*                                                           |  | $      | 36.91    |    |  | $      | 415.49   |    |  | $      | 641.28 |   |
| Interestincome                                                                             |  |   | 16.13    |    |  |   | 12.54    |    |  |   | 9.96 |   |
| Expenses**                                                                                 |  |   | (77.10   | )  |  |   | (118.96  | )  |  |   | (153.45 | )  |
| Increase(decrease) for theperiod                                                           |  |   | (24.06   | )  |  |   | 309.07   |    |  |   | 497.79 |   |
| Netasset value per Redeemable Unit, beginning ofperiod                                     |  |   | 1,788.14 |    |  |   | 1,479.07 |    |  |   | 1,000.00 |   |
| Offeringcostadjustment                                                                     |  |   | —  |    |  |   | —  |    |  |   | (18.72 | )  |
| Netasset value per Redeemable Unit, end ofperiod                                           |  | $      | 1,764.08 |    |  | $      | 1,788.14 |    |  | $      | 1,479.07 |   |
| Redemption/subscriptionvalue per Redeemable Unit versus net asset value per RedeemableUnit |  |   | —  |    |  |   | 0.15     |    |  |   | 0.93 |   |
| Redemption/subscriptionvalue per Redeemable Unit, end ofperiod***                          |  | $      | 1,764.08 |    |  | $      | 1,788.29 |    |  | $      | 1,480.00 |   |
|                                                                                            |

|  |
|--|
|  |  |
|  |

|   |                               |
|---|-------------------------------|
| * | Includesbrokerage commissions |

|    |                               |
|----|-------------------------------|
| ** | Excludes brokeragecommissions |

|     |                                                                                                                                                                                             |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *** | For thepurpose of a redemption/subscription, any remaining accrued liabilityfor reimbursement of offering costs will not reduceredemption/subscription Net Asset Value per Redeemable Unit. |

F-12

----

SalomonSmith BarneyFairfield Futures Fund L.P.Notes to FinancialStatements

|                                              |  |        |      |          |  |        |      |          |  |        |
|----------------------------------------------|--|--------|------|----------|--|--------|------|----------|--|--------|
|                                         |  | 2004   |      | 2003     |  | 2002   |
| Ratiosto average net assets:****             |  |
| Net investmentloss before incentivefees***** |  |   | (6.7 | )%  |  |   | (7.4 | )%  |  |   | (4.5 | )%  |
| Operatingexpenses                            |  |   | 7.6  | %   |  |   | 8.2  | %   |  |   | 5.3 | %  |
| Incentivefees                                |  |   | 2.1  | %   |  |   | 4.2  | %   |  |   | 7.4 | %  |
| Totalexpenses                                |  |   | 9.7  | %   |  |   | 12.4 | %   |  |   | 12.7 | %  |
| Totalreturn:                                 |  |
| Total return before incentivefees            |  |   | 0.9  | %   |  |   | 24.5 | %   |  |   | 56.7 | %  |
| Incentivefees                                |  |   | (2.2 | )%  |  |   | (3.6 | )%  |  |   | (6.0 | )%  |
| Totalreturn after incentivefees              |  |   | (1.3 | )%  |  |   | 20.9 | %   |  |   | 50.7 | %  |
|                                              |

|  |
|--|
|  |  |
|  |

|      |                   |
|------|-------------------|
| **** | Annualizedin 2002 |

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

The aboveratios may vary for individual investors based on the timing of capitaltransactions during the year. Additionally, these ratios are calculatedfor the limited partner class using the limited partners' shareof income, expenses and average net assets.

|          |                             |
|----------|-----------------------------|
| 8.  | Financial Instrument Risks: |

In thenormal course of its business, the Partnership 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 is subject tovarious risks similar to those related to the underlying financialinstruments including market and credit risk. In general, the risksassociated with OTC contracts are greater than those associated withexchange traded instruments because of the greater risk of default bythe counterparty to an OTC contract.

Market risk is thepotential for changes in the value of the financial instruments tradedby the Partnership 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. The Partnership's risk ofloss in the event of counterparty default is typically limited to theamounts recognized in the statements of financial condition and notrepresented by the contract or notional amounts of the instruments. ThePartnership has credit risk and concentration risk because the solecounterparty or broker with respect to the Partnership's assetsis CGM.

The General Partner monitors and controls thePartnership's risk exposure on a daily basis through financial,credit and risk management monitoring systems, and accordingly believesthat it has effective procedures for evaluating and limiting the creditand market risks to which the Partnership is subject. 

F-13

----

SalomonSmith BarneyFairfield Futures Fund L.P.Notes to FinancialStatements

These monitoring systems allow the GeneralPartner to statistically analyze actual trading results with riskadjusted performance indicators and correlation statistics. Inaddition, on-line monitoring systems provide account analysis offutures, forwards and options positions by sector, margin requirements,gain and loss transactions and collateral positions.

Themajority of these instruments mature within one year of December 31,2004. However, due to the nature of the Partnership's business,these instruments may not be held to maturity.

F-14

----

Selectedunaudited quarterly financial data for the years ended December 31,2004 and December 31, 2003 is summarized below:

|                                                                                                                      |  |                                                        |            |                                                       |  |                                                   |            |                                                      |  |   |             |         |  |   |            |        |  |  |
|----------------------------------------------------------------------------------------------------------------------|--|--------------------------------------------------------|------------|-------------------------------------------------------|--|---------------------------------------------------|------------|------------------------------------------------------|--|---|-------------|---------|--|---|------------|--------|--|--|
|                                                                                                                 |  | Forthe period from October 1, 2004 to December 31,2004 |            | For the period from July 1, 2004 to September30, 2004 |  | For the period from April 1, 2004 to June30, 2004 |            | For the period from January 1, 2004 to March31, 2004 |
| Net realized and unrealized trading gains(losses) net of brokerage commissions and clearing fees plus interestincome |  | $                                                      | 20,990,319 |                                                  |  | $                                                 | (7,051,935 | )                                               |  | $ | (26,300,054 | )  |  | $ | 15,458,742 |   |
| Net Income (loss)                                                                                                    |  | $                                                      | 20,170,631 |                                                  |  | $                                                 | (7,816,607 | )                                               |  | $ | (27,174,692 | )  |  | $ | 11,605,336 |   |
| Increase (decrease) in Net Asset Value perUnit                                                                       |  | $                                                      | 268.51     |                                                  |  | $                                                 | (98.05     | )                                               |  | $ | (332.06     | )  |  | $ | 137.54     |   |
|                                                                                                                      |

|                                                                                                                      |  |                                                        |            |                                                       |  |                                                   |             |                                                      |  |   |           |        |  |   |           |        |  |  |
|----------------------------------------------------------------------------------------------------------------------|--|--------------------------------------------------------|------------|-------------------------------------------------------|--|---------------------------------------------------|-------------|------------------------------------------------------|--|---|-----------|--------|--|---|-----------|--------|--|--|
|                                                                                                                 |  | Forthe period from October 1, 2003 to December 31,2003 |            | For the period from July 1, 2003 to September30, 2003 |  | For the period from April 1, 2003 to June30, 2003 |             | For the period from January 1, 2003 to March31, 2003 |
| Net realized and unrealized trading gains(losses) net of brokerage commissions and clearing fees plus interestincome |  | $                                                      | 30,348,621 |                                                  |  | $                                                 | (14,292,595 | )                                               |  | $ | 2,591,249 |   |  | $ | 7,842,062 |   |
| Net Income (loss)                                                                                                    |  | $                                                      | 26,596,905 |                                                  |  | $                                                 | (15,062,903 | )                                               |  | $ | 1,540,337 |   |  | $ | 5,883,596 |   |
| Increase (decrease) in Net Asset Value perUnit                                                                       |  | $                                                      | 326.01     |                                                  |  | $                                                 | (195.99     | )                                               |  | $ | 25.92     |   |  | $ | 153.13    |   |
|                                                                                                                      |

F-15

----

PART III

Item9.    Changes in and Disagreements with Accountants on Accountingand Financial Disclosure.

None

Item9A.    Controls and Procedures.

Based on theirevaluation of the Partnership's disclosure controls andprocedures as of year end the Chief Executive Officer and ChiefFinancial Officer have concluded that such controls and procedures areeffective.

There were no significant changes in thePartnership's internal controls or in other factors that couldsignificantly affect such controls subsequent to the date of theirevaluation as of year end.

Item 10.    Directors andExecutive Officers of the Registrant.

The Partnership hasno officers or directors and its affairs are managed by its GeneralPartner, Citigroup Managed Futures LLC. Investment decisions are madeby John W. Henry & Company, Inc.

The Partnership has notadopted a code of ethics that applies to officers because it has noofficers.

Item 11.    Executive Compensation.

The Partnership has no directors or officers. Its affairs aremanaged by Citigroup Managed Futures LLC, its General Partner. CGM, anaffiliate of the General Partner, is the commodity broker for thePartnership and receives brokerage commissions for such services, asdescribed under "Item 1. Business."Brokerage commissions and clearing fees of $6,785,010 were earned forthe year ended December 31, 2004. Management fees and incentive fees of$2,705,964 and $676,491, respectively were earned by the Advisor forthe year ended December 31, 2004.

Item 12.    SecurityOwnership of Certain Beneficial Owners and Management.

(a)    Security ownership of certain beneficial owners.As of March 1, 2005, one beneficial owner who is neither a director norexecutive officer owns more than five percent (5%) of theoutstanding Redeemable Units issued by the Registrant asfollows:

|                                                                                                 |  |                                                                                             |  |                                          |  |                 |  |  |  |  |  |  |  |  |
|-------------------------------------------------------------------------------------------------|--|---------------------------------------------------------------------------------------------|--|------------------------------------------|--|-----------------|--|--|--|--|--|--|--|--|
| Titleof Class                                                                                   |  | Name and Address of BeneficialOwner                                                         |  | Amount and Nature of BeneficialOwnership |  | Percent ofClass |
| Redeemable Units of     Limited Partnership    Interest |  | JVA Enterprises Holdings, LLCMr. MarkBugge2905 Lucerne Street, SEGrand Rapids, MI49546-7160 |  | 5,363.6823 RedeemableUnits               |  | 7.6%            |
|                                                                                                 |

(b)    Security ownership of management. Under the termsof the Limited Partnership Agreement, the Partnership's affairsare managed by the General Partner. The General Partner owns Units ofgeneral partnership interest equivalent to 864.9335 Units(1.22%) of Limited Partnership Interest as of December 31,2004.

Principals who own Redeemable Units of thePartnership:

David J. Vogel                      35Redeemable Units

(c)    Changes in control. None.

Item 13.    Certain Relationship and RelatedTransactions.

Citigroup Global Markets Inc. and CitigroupManaged Futures LLC would be considered promoters for purposes of item404(d) of Regulation S-K. The nature and the amounts of compensationeach promoter will receive, if any, from the Partnership are set forthunder "Item 1. Business" and"Item 11. ExecutiveCompensation."

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Item 14.    Principal AccountantFees and Services.

(1)    Audit Fees. Theaggregate fees billed for each of the last two fiscal years forprofessional services rendered by KPMG LLP for the audit of thePartnership's annual financial statements, review of financialstatements included in the Partnership's Forms 10-Q and 10-K andother services normally provided in connection with regulatory filingsor engagements are as follows:

2004                $59,840

2003                $15,400

(2)    Audit-Related Fees. None

(3)    TaxFees. The aggregate fees billed for each of the last two fiscalyears for professional services rendered by KPMG LLP for tax complianceand tax advice given in the preparation of the Partnership'sSchedule K1s, the preparation of the Partnership's Form 1065 andpreparation of all State Tax Returns are as follows:

2004                $5,136

2003                $4,809

(4)    All OtherFees. None.

(5)    Not Applicable.

(6)    NotApplicable.

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PART IV

Item15.    Exhibits, Financial Statement Schedules, and Reports onForm 8-K.

|                |                      |
|----------------|----------------------|
| (a) (1)   | FinancialStatements: |

Statements of Financial Condition atDecember 31, 2004 and 2003.

Condensed Schedules ofInvestments at December 31, 2004 and 2003.

Statements ofIncome and Expenses for the years ended December 31, 2004 and 2003 andfor the period from June 5, 2002 (commencement of trading operations)to December 31, 2002.

Statements of Changes inPartners' Capital for the years ended December 31, 2004 and 2003and for the period from March 25, 2002 (date the Partnership wasorganized) to December 31, 2002.

Statements of CashFlows for the years ended December 31, 2004 and 2003 and for the periodMarch 25, 2002 (date Partnership was organized) to December 31,2002.

Notes to Financial Statements.

|           |           |
|-----------|-----------|
| (2)  | Exhibits: |

3.1 – LimitedPartnership Agreement (filed as Exhibit 3.1 to the RegistrationStatement on Form S-1 (File No. 333-24923) and incorporated herein byreference).

3.2 – Certificate of LimitedPartnership of the Partnership as filed in the office of the Secretaryof State of the State of New York (filed as Exhibit 3.2 to theRegistration Statement on Form S-1 (File No. 333-24923) andincorporated herein by reference).

10.1 – CustomerAgreement between the Partnership and Smith Barney (filed as Exhibit10.1 to the Registration Statement on Form S-1 (File No. 333-24923) andincorporated herein by reference).

10.2 –Subscription Agreement (filed as Exhibit 10.2 to the RegistrationStatement on Form S-1 (File No. 333-24923) and incorporated herein byreference).

10.3 – Escrow Instructions relating toescrow of subscription funds (filed as Exhibit 10.3 to the RegistrationStatement on Form S-1 (File No. 333-24923) and incorporated herein byreference).

10.4 – Management Agreement among thePartnership, the General Partner and John W. Henry & Company Inc.(filed as Exhibit 10.4 to the Registration Statement on Form S-1 (FileNo. 333-24923) and incorporated herein by reference).

10.5 – Letter extending the Management Agreementbetween the General Partner and Graham Capital Management L.P. for 2002(previously filed).

10.6 – Letter extending theManagement Agreement between the General Partner and Graham CapitalManagement L.P. for 2003 (previously filed).

10.7– Letter extending the Management Agreement between the GeneralPartner and Graham Capital Management L.P. for 2004 (filedherein).

16.1 – Letter from PricewaterhouseCoopersLLP (previously filed).

The exhibits required to befiled by Item 601 of regulation S-K are incorporated herein byreference

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

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

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

Exhibit 32.2 – Section 1350 Certification(Certification of Chief Financial Officer and Director)

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

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

AnnualReport to Limited Partners

No proxy material has been sent toLimited Partners.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of theSecurities Exchange Act of 1934, the Registrant has duly caused thisannual report on Form 10-K to be signed on its behalf by theundersigned, thereunto duly authorized, in the City of New York andState of New York on the 14th day of March 2005.

SalomonSmith Barney Fairfield Futures Fund L.P.

|           |                                                    |
|-----------|----------------------------------------------------|
| By:  | /s/ Citigroup Managed FuturesLLC (General Partner) |

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

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

|                                     |  |                        |  |  |  |  |
|-------------------------------------|--|------------------------|--|--|--|--|
| /s/ David J. Vogel                  |  | /s/ ShelleyUllman      |
| David J. Vogel                      |  | ShelleyUllman          |
| President andDirector               |  | Director               |
| /s/ MaureenO'Toole                  |  | /s/ Steve J. Keltz     |
| Maureen O'Toole                     |  | Steve J. Keltz         |
| Director                            |  | Secretary and Director |
| /s/ Daniel R. McAuliffe,Jr.         |  |
| Daniel R. McAuliffe, Jr.            |  |
| Chief Financial Officer andDirector |  |
|                                     |

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