RICI Linked - PAM Advisors Fund, LLC - FORM 10-K - EX-13.01 - March 30, 2015

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10-K - 10-K - RICI Linked - PAM Advisors Fund, LLCrici-20141231x10k.htm
EX-32.2 - EX-32.2 - RICI Linked - PAM Advisors Fund, LLCrici-20141231ex3221d444a.htm
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Exhibit 13.01

RICI® Linked – PAM Total Index Series

RICI® Linked – PAM Agricultural Sector Series

each a series of

RICI® Linked - PAM Advisors Fund, LLC

 

Financial Report

December 31, 2014,  2013  and 2012

1

 

 

 

 

 

 

 

 

Financial Statements

 

Page

 

 

 

 

 

              Report of Independent Registered Public Accounting Firm

 

 

 

 

 

 

 

Statements of Financial Condition as of December 31, 2014 and December 31, 2013  

 
4 

 

 

 

 

 

Condensed Schedule of Investments as of December 31, 2014 

 
5 

 

 

 

 

 

Condensed Schedule of Investments as of December 31, 2013 

 
7 

 

 

 

 

 

Statements of Operations for the Years Ended December 31, 2014, 2013 and 2012 

 
9 

 

 

 

 

 

Statements of Changes in Members’ Equity (Net Assets) for the Years Ended December 31, 2014, 2013 and 2012 

 
10 

 

 

 

 

 

Notes to Financial Statements  

 
11 

 

 

 

 

 

 

 

2

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Members
RICI® Linked – PAM Advisors Fund, LLC


We have audited the accompanying statements of financial condition, including the condensed schedules of investments, of RICI® Linked – PAM Total Index Series (the Total Index Series) and RICI® Linked – PAM Agricultural Sector Series (the Agricultural Sector Series), each a series of RICI® Linked – PAM Advisors Fund, LLC (the Company), as of December 31, 2014 and 2013, and the related statements of operations and changes in members’ equity (net assets) for each of three years in the period ended December 31, 2014. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company, the Total Index Series, and the Agricultural Sector Series are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company, the Total Index Series, and the Agricultural Sector Series’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of RICI® Linked – PAM Total Index Series, RICI® Linked – PAM Agricultural Sector Series, and RICI® Linked – PAM Advisors Fund, LLC, as of December 31, 2014 and 2013, and the results of their operations for each of the three years in the period ended December 31, 2014, in conformity with U.S. generally accepted accounting principles.




/s/ McGladrey LLP

Chicago, Illinois
March 30, 2015

 

 

 

 

 

3

 

RICI® Linked - PAM Advisors Fund, LLC

Statements of Financial Condition

 

December 31, 2014 and December 31, 2013 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Index Series

 

Agricultural Sector Series

 

Total RICI® Linked - PAM Advisors Fund, LLC

 

 

December 31, 2014

December 31, 2013

 

December 31, 2014

December 31, 2013

 

December 31, 2014

December 31, 2013

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity in broker trading account

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

$
29,045,258 

$
29,005,532 

 

$
1,573,767 

$
2,152,461 

 

$
30,619,025 

$
31,157,993 

Net unrealized loss on open futures contracts

 

 
(7,138,912)

 
(2,740,705)

 

 
(7,421)

 
(161,948)

 

 
(7,146,333)

 
(2,902,653)

 

 

 
21,906,346 

 
26,264,827 

 

 
1,566,346 

 
1,990,513 

 

 
23,472,692 

 
28,255,340 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 
9,151,574 

 
8,840,635 

 

 
352,420 

 
80,191 

 

 
9,503,994 

 
8,920,826 

Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government-sponsored enterprise securities, at fair value

 

 
126,971,000 

 
184,959,750 

 

 
999,580 

 
4,999,085 

 

 
127,970,580 

 
189,958,835 

Mutual funds, at fair value

 

 

 -

 
8,000,033 

 

 

 -

 
50,001 

 

 

 -

 
8,050,034 

Total assets

 

$
158,028,920 

$
228,065,245 

 

$
2,918,346 

$
7,119,790 

 

$
160,947,266 

$
235,185,035 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Members' Equity (Net Assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accrued operating expenses

 

$
168,961 

$
159,925 

 

$
37,681 

$
65,324 

 

$
206,642 

$
225,249 

Management fee payable to Managing Member

 

 
85,429 

 
123,416 

 

 
1,544 

 
3,803 

 

 
86,973 

 
127,219 

Support services fee payable

 

 
13,136 

 
18,977 

 

 
237 

 
585 

 

 
13,373 

 
19,562 

Servicing fee payable to selling agent

 

 
14,824 

 
20,226 

 

 
1,927 

 
2,538 

 

 
16,751 

 
22,764 

Withdrawals payable

 

 
9,216,197 

 
6,271,310 

 

 
119,824 

 
8,532 

 

 
9,336,021 

 
6,279,842 

Subscriptions received in advance

 

 
90,000 

 

 -

 

 

 -

 

 -

 

 
90,000 

 

 -

 

 

 
9,588,547 

 
6,593,854 

 

 
161,213 

 
80,782 

 

 
9,749,760 

 
6,674,636 

Members' equity (net assets)

 

 
148,440,373 

 
221,471,391 

 

 
2,757,133 

 
7,039,008 

 

 
151,197,506 

 
228,510,399 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and members' equity (net assets)

 

$
158,028,920 

$
228,065,245 

 

$
2,918,346 

$
7,119,790 

 

$
160,947,266 

$
235,185,035 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

 

 

 

 

4

 

RICI® Linked - PAM Advisors Fund, LLC

Condensed Schedule of Investments

December 31, 2014 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Index Series

 

Agricultural Sector Series

 

Total RICI® Linked - PAM Advisors Fund, LLC

 

 

Net Unrealized

 

 

 

Net Unrealized

 

 

 

Net Unrealized

 

 

 

 

Gain (Loss)

Percent of

 

 

Gain (Loss)

Percent of

 

 

Gain (Loss)

Percent of

 

 

 

on Open

Members'

 

 

on Open

Members'

 

 

on Open

Members'

 

 

 

Long Futures

Equity

 

 

Long Futures

Equity

 

 

Long Futures

Equity

 

 

 

Contracts

(Net Assets)

 

 

Contracts

(Net Assets)

 

 

Contracts

(Net Assets)

 

Futures contracts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Agriculture

 

$
(113,639)
(0.08)

%

 

$
(5,158)
(0.19)

%

 

$
(118,797)
(0.08)

%

Energy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

425 Crude Feb 7 Mar 2015 contracts

 

 
(1,942,130)
(1.31)

 

 

 

 -

 -

 

 

 
(1,942,130)
(1.28)

 

Other *

 

 
(1,318,782)
(0.89)

 

 

 

 -

 -

 

 

 
(1,318,782)
(0.87)

 

Metals*

 

 
(314,435)
(0.21)

 

 

 

 -

 -

 

 

 
(314,435)
(0.21)

 

Total futures contracts - United States

 

 
(3,688,986)
(2.49)

 

 

 
(5,158)
(0.19)

 

 

 
(3,694,144)
(2.44)

 

Foreign

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Agriculture*

 

 
(98,704)
(0.07)

 

 

 
(2,263)
(0.08)

 

 

 
(100,967)
(0.07)

 

Energy*

 

 
(1,565,385)
(1.05)

 

 

 

 -

 -

 

 

 
(1,565,385)
(1.04)

 

Metals*

 

 
(1,785,837)
(1.20)

 

 

 

 -

 -

 

 

 
(1,785,837)
(1.18)

 

Total futures contracts - Foreign

 

 
(3,449,926)
(2.32)

 

 

 
(2,263)
(0.08)

 

 

 
(3,452,189)
(2.29)

 

Total net unrealized loss on open futures contracts

 

$
(7,138,912)
(4.81)

%

 

$
(7,421)
(0.27)

%

 

$
(7,146,333)
(4.73)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*  No individual futures contract position constituted greater than 1% of members' equity (net assets). 

Accordingly, the number of contracts and expiration dates are not presented.

The accompanying notes are an integral part of these financial statements.

5

 

RICI® Linked - PAM Advisors Fund, LLC

Condensed Schedule of Investments

December 31, 2014 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Index Series

 

Agricultural Sector Series

 

Total RICI® Linked - PAM Advisors Fund, LLC

 

 

 

 

 

Percent of

 

 

 

 

 

Percent of

 

 

 

 

 

Percent of

 

 

 

 

 

Members'

 

 

 

 

 

Members'

 

 

 

 

 

Members'

Government-sponsored enterprise securities

 

 

 

 

Equity

 

 

 

 

 

Equity

 

 

 

 

 

Equity

United States

Cost

Fair Value

(Net Assets)

 

Cost

Fair Value

(Net Assets)

 

Cost

Fair Value

(Net Assets)

U.S.Treasury Bills

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$  20,000,000 Treasury bill due 01/02/2015

$
19,995,614 

$
20,000,000 
13.47 

%

 

$

 -

$

 -

 -

%

 

$
19,995,614 

$
20,000,000 
13.23 

%

$  17,000,000 Treasury bill due 01/02/2015

 
16,996,272 

 
17,000,000 
11.45 

 

 

 

 -

 

 -

 -

 

 

 
16,996,272 

 
17,000,000 
11.24 

 

$  5,000,000 Treasury bill due 02/12/2015

 
4,998,874 

 
4,999,900 
3.37 

 

 

 

 -

 

 -

 -

 

 

 
4,998,874 

 
4,999,900 
3.31 

 

$  10,000,000 Treasury bill due 03/05/2015

 
9,997,632 

 
9,999,700 
6.74 

 

 

 

 -

 

 -

 -

 

 

 
9,997,632 

 
9,999,700 
6.61 

 

$  5,000,000 Treasury bill due 04/16/2015

 
4,999,000 

 
4,999,500 
3.37 

 

 

 

 -

 

 -

 -

 

 

 
4,999,000 

 
4,999,500 
3.31 

 

$  10,000,000 Treasury bill due 06/11/2015

 
9,995,704 

 
9,997,100 
6.73 

 

 

 

 -

 

 -

 -

 

 

 
9,995,704 

 
9,997,100 
6.61 

 

$  60,000,000 Treasury bill due 06/25/2015

 
59,976,110 

 
59,974,800 
40.40 

 

 

 

 -

 

 -

 -

 

 

 
59,976,110 

 
59,974,800 
39.67 

 

$  1,000,000 Treasury bill due 06/25/2015

 

 -

 

 -

 -

 

 

 
999,607 

 
999,580 
36.25 

 

 

 
999,607 

 
999,580 
0.66 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Government-sponsored enterprise securities

$
126,959,206 

$
126,971,000 
85.53 

%

 

$
999,607 

$
999,580 
36.25 

%

 

$
127,958,813 

$
127,970,580 
84.64 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

6

 

RICI® Linked - PAM Advisors Fund, LLC

Condensed Schedule of Investments

December 31, 2013 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Index Series

 

Agricultural Sector Series

 

Total RICI® Linked - PAM Advisors Fund, LLC

 

 

Net Unrealized

 

 

 

Net Unrealized

 

 

 

Net Unrealized

 

 

 

 

Gain (Loss)

Percent of

 

 

Gain (Loss)

Percent of

 

 

Gain (Loss)

Percent of

 

 

 

on Open

Members'

 

 

on Open

Members'

 

 

on Open

Members'

 

 

 

Long Futures

Equity

 

 

Long Futures

Equity

 

 

Long Futures

Equity

 

 

 

Contracts

(Net Assets)

 

 

Contracts

(Net Assets)

 

 

Contracts

(Net Assets)

 

Futures contracts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Agriculture

 

$
(1,751,053)
(0.79)

%

 

$

 -

 -

%

 

$
(1,895,327)
(0.83)

%

31 March 2014 CBOT Wheat Contracts

 

 

 -

 -

 

 

 
(109,188)
(1.55)

 

 

 

 -

 -

 

Other*

 

 

 -

 -

 

 

 
(35,086)
(0.50)

 

 

 

 -

 -

 

Energy*

 

 
298,019 
0.13 

 

 

 

 -

 -

 

 

 
298,019 
0.13 

 

Metals*

 

 
(738,170)
(0.33)

 

 

 

 -

 -

 

 

 
(738,170)
(0.32)

 

Total futures contracts - United States

 

 
(2,191,204)
(0.99)

 

 

 
(144,274)
(2.05)

 

 

 
(2,335,478)
(1.02)

 

Foreign

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Agriculture*

 

 
(122,960)
(0.06)

 

 

 
(17,674)
(0.25)

 

 

 
(140,634)
(0.06)

 

Energy*

 

 
(128,822)
(0.06)

 

 

 

 -

 -

 

 

 
(128,822)
(0.06)

 

Metals*

 

 
(297,719)
(0.13)

 

 

 

 -

 -

 

 

 
(297,719)
(0.13)

 

Total futures contracts - Foreign

 

 
(549,501)
(0.25)

 

 

 
(17,674)
(0.25)

 

 

 
(567,175)
(0.25)

 

Total net unrealized loss on open futures contracts

 

$
(2,740,705)
(1.24)

%

 

$
(161,948)
(2.30)

%

 

$
(2,902,653)
(1.27)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*  No individual futures contract position constituted greater than 1% of members' equity (net assets). 

Accordingly, the number of contracts and expiration dates are not presented.

The accompanying notes are an integral part of these financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7

 

 

RICI® Linked - PAM Advisors Fund, LLC

Condensed Schedule of Investments

December 31, 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Index Series

 

Agricultural Sector Series

 

Total RICI® Linked - PAM Advisors Fund, LLC

 

 

 

 

 

 

Percent of

 

 

 

 

 

Percent of

 

 

 

 

 

Percent of

 

 

 

 

 

 

Members'

 

 

 

 

 

Members'

 

 

 

 

 

Members'

 

Government-sponsored enterprise securities

 

 

 

 

Equity

 

 

 

 

 

Equity

 

 

 

 

 

Equity

 

United States

Cost

Fair Value

(Net Assets)

 

Cost

Fair Value

(Net Assets)

 

Cost

Fair Value

(Net Assets)

 

U.S.Treasury Bills

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$20,000,000 Treasury bill due 01/09/2014

$
19,999,042 

$
20,000,000 
9.03 

%

 

$

 -

$

 -

 -

%

 

$
19,999,042 

$
20,000,000 
8.75 

%

 

$20,000,000 Treasury bill due 02/13/2014

 
19,993,469 

 
19,999,600 
9.03 

 

 

 

 -

 

 -

 -

 

 

 
19,993,469 

 
19,999,600 
8.75 

 

 

$3,000,000 Treasury bill due 03/13/2014

 

 -

 

 -

 -

 

 

 
2,999,657 

 
2,999,760 
42.62 

 

 

 
2,999,657 

 
2,999,760 
1.31 

 

 

$500,000 Treasury bill due 03/27/2014

 

 -

 

 -

 -

 

 

 
499,900 

 
499,925 
7.10 

 

 

 
499,900 

 
499,925 
0.22 

 

 

$20,000,000 Treasury bill due 03/27/2014

 
19,995,435 

 
19,997,000 
9.03 

 

 

 

 -

 

 -

 -

 

 

 
19,995,435 

 
19,997,000 
8.75 

 

 

$15,000,000 Treasury bill due 04/17/2014

 
14,993,972 

 
14,998,350 
6.77 

 

 

 

 -

 

 -

 -

 

 

 
14,993,972 

 
14,998,350 
6.56 

 

 

$20,000,000 Treasury bill due 05/08/2014

 
19,992,073 

 
19,996,000 
9.03 

 

 

 

 -

 

 -

 -

 

 

 
19,992,073 

 
19,996,000 
8.75 

 

 

$30,000,000 Treasury bill due 06/12/2014

 
29,988,109 

 
29,992,800 
13.54 

 

 

 

 -

 

 -

 -

 

 

 
29,988,109 

 
29,992,800 
13.13 

 

 

$60,000,000 Treasury bill due 06/26/2014

 
59,974,656 

 
59,976,000 
27.08 

 

 

 

 -

 

 -

 -

 

 

 
59,974,656 

 
59,976,000 
26.25 

 

 

$1,500,000 Treasury bill due 06/26/2014

 

 -

 

 -

 -

 

 

 
1,499,372 

 
1,499,400 
21.30 

 

 

 
1,499,372 

 
1,499,400 
0.66 

 

 

Total Government-sponsored enterprise securities

$
184,936,756 

$
184,959,750 
83.51 

%

 

$
4,998,928 

$
4,999,085 
71.02 

%

 

$
189,935,685 

$
189,958,835 
83.13 

%

 

Mutual funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federated Government Obligations Fund

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  (4,000,033 shares)

$
4,000,033 

$
4,000,033 
1.81 

%

 

$

 -

$

 -

 -

%

 

$
4,000,033 

$
4,000,033 
1.75 

%

 

   Federated Government Obligations Fund

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     (50,001 shares)

 

 -

 

 -

-

 

 

 
50,001 

 
50,001 
0.71 

 

 

 
50,001 

 
50,001 
0.02 

 

 

   AIM Government & Agency Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Institutional (4,000,000 shares)

 
4,000,000 

 
4,000,000 
1.81 

 

 

 

 -

 

 -

 -

 

 

 
4,000,000 

 
4,000,000 
1.75 

 

 

Total mutual funds

$
8,000,033 

$
8,000,033 
3.62 

%

 

$
50,001 

$
50,001 
0.71 

%

 

$
8,050,034 

$
8,050,034 
3.52 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8

 

RICI® Linked - PAM Advisors Fund, LLC

Statements of Operations

Years Ended December 31, 2014, 2013, 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Index Series

 

Agricultural Sector Series

 

Total RICI® Linked - PAM Advisors Fund, LLC

 

 

2014

2013

2012

 

2014

2013

2012

 

2014

2013

2012

Realized and unrealized gains (losses) on investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Realized gains (losses) on futures contracts

 

$
(41,826,774)

$
(10,241,195)

$
(715,640)

 

$
(26,500)

$
(1,460,819)

$
467,837 

 

$
(41,853,274)

$
(11,702,014)

$
(247,803)

Realized gains on securities

 

 
113,645 

 
253,520 

 
194,219 

 

 
1,394 

 
10,433 

 
7,445 

 

 
115,039 

 
263,953 

 
201,664 

Change in unrealized gains (losses) on open futures contracts

 

 
(4,398,207)

 
(2,080,251)

 
6,373,625 

 

 
154,527 

 
285,679 

 
(229,374)

 

 
(4,243,680)

 
(1,794,572)

 
6,144,251 

Change in unrealized gains (losses) on securities

 

 
(11,199)

 
(77,256)

 
50,160 

 

 
(184)

 
(4,377)

 
2,016 

 

 
(11,383)

 
(81,633)

 
52,176 

Brokerage commissions

 

 
(442,511)

 
(493,450)

 
(528,501)

 

 
(13,163)

 
(24,601)

 
(27,763)

 

 
(455,674)

 
(518,051)

 
(556,264)

Net realized and unrealized gain (loss) on investments

 

 
(46,565,046)

 
(12,638,632)

 
5,373,863 

 

 
116,074 

 
(1,193,685)

 
220,161 

 

 
(46,448,972)

 
(13,832,317)

 
5,594,024 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 
12,386 

 
16,265 

 
22,159 

 

 
1,492 

 
1,202 

 
1,291 

 

 
13,878 

 
17,467 

 
23,450 

MF Global Recovery

 

 

 -

 

 -

 
5,688,660 

 

 

 -

 

 -

 
347,629 

 

 

 -

 

 -

 
6,036,289 

 

 

 
12,386 

 
16,265 

 
5,710,819 

 

 
1,492 

 
1,202 

 
348,920 

 

 
13,878 

 
17,467 

 
6,059,739 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Management fees

 

 
1,342,837 

 
1,643,869 

 
1,916,415 

 

 
28,049 

 
63,278 

 
84,882 

 

 
1,370,886 

 
1,707,147 

 
2,001,297 

Operating expenses

 

 
393,895 

 
437,194 

 
446,137 

 

 
51,289 

 
55,013 

 
53,447 

 

 
445,184 

 
492,207 

 
499,584 

Support services fee

 

 
211,389 

 
252,766 

 
294,673 

 

 
4,313 

 
9,729 

 
13,052 

 

 
215,702 

 
262,495 

 
307,725 

Servicing fees

 

 
72,661 

 
91,700 

 
109,638 

 

 
8,808 

 
13,351 

 
18,419 

 

 
81,469 

 
105,051 

 
128,057 

 

 

 
2,020,782 

 
2,425,529 

 
2,766,863 

 

 
92,459 

 
141,371 

 
169,800 

 

 
2,113,241 

 
2,566,900 

 
2,936,663 

Net investment income (loss)

 

 
(2,008,396)

 
(2,409,264)

 
2,943,956 

 

 
(90,967)

 
(140,169)

 
179,120 

 

 
(2,099,363)

 
(2,549,433)

 
3,123,076 

Net income (loss)

 

$
(48,573,442)

$
(15,047,896)

$
8,317,819 

 

$
25,107 

$
(1,333,854)

$
399,281 

 

$
(48,548,335)

$
(16,381,750)

$
8,717,100 

The accompanying notes are an integral part of these financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9

 

RICI® Linked - PAM Advisors Fund, LLC

Statement of Changes in Members' Equity (Net Assets)

Years Ended December 31, 2014, 2013 and 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Index Series

 

Agricultural Sector Series

 

Total RICI® Linked - PAM Advisors Fund, LLC

 

 

Managing Member

Non-Managing Members

Total

 

Managing Member

Non-Managing Members

Total

 

Managing Member

Non-Managing Members

Total

Members' equity (net assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2011

 

$
37,002 

$
292,989,365 

$
293,026,367 

 

$
35,511 

$
11,552,735 

$
11,588,246 

 

$
72,513 

$
304,542,100 

$
304,614,613 

Subscriptions, net

 

 

 

 
52,314,590 

 
52,314,590 

 

 

 

 
2,883,284 

 
2,883,284 

 

 

 -

 
55,197,874 

 
55,197,874 

Withdrawals

 

 

 

 
(82,297,680)

 
(82,297,680)

 

 

 

 
(3,055,783)

 
(3,055,783)

 

 

 -

 
(85,353,463)

 
(85,353,463)

Net income

 

 
1,319 

 
8,316,500 

 
8,317,819 

 

 
1,290 

 
397,991 

 
399,281 

 

 
2,609 

 
8,714,491 

 
8,717,100 

Members' equity (net assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2012

 

$
38,321 

$
271,322,775 

$
271,361,096 

 

$
36,801 

$
11,778,227 

$
11,815,028 

 

$
75,122 

$
283,101,002 

$
283,176,124 

Subscriptions, net

 

 

 -

 
40,056,903 

 
40,056,903 

 

 

 -

 
419,157 

 
419,157 

 

 

 -

 
40,476,060 

 
40,476,060 

Withdrawals

 

 

 -

 
(74,898,712)

 
(74,898,712)

 

 

 -

 
(3,861,323)

 
(3,861,323)

 

 

 -

 
(78,760,035)

 
(78,760,035)

Net loss

 

 
(1,904)

 
(15,045,992)

 
(15,047,896)

 

 
(4,449)

 
(1,329,405)

 
(1,333,854)

 

 
(6,353)

 
(16,375,397)

 
(16,381,750)

Members' equity (net assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2013

 

$
36,417 

$
221,434,974 

$
221,471,391 

 

$
32,352 

$
7,006,656 

$
7,039,008 

 

$
68,769 

$
228,441,630 

$
228,510,399 

Subscriptions, net

 

 

 -

 
23,234,417 

 
23,234,417 

 

 

 -

 
81,180 

 
81,180 

 

 

 -

 
23,315,597 

 
23,315,597 

Withdrawals

 

 

 -

 
(47,691,993)

 
(47,691,993)

 

 

 -

 
(4,388,162)

 
(4,388,162)

 

 

 -

 
(52,080,155)

 
(52,080,155)

Net income (loss)

 

 
(8,250)

 
(48,565,192)

 
(48,573,442)

 

 
(2,884)

 
27,991 

 
25,107 

 

 
(11,134)

 
(48,537,201)

 
(48,548,335)

Members' equity (net assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2014

 

$
28,167 

$
148,412,206 

$
148,440,373 

 

$
29,468 

$
2,727,665 

$
2,757,133 

 

$
57,635 

$
151,139,871 

$
151,197,506 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

 

 

 

 

 

 

 

10

 

 

Notes to Financial Statements

Note 1.Nature of Operations and Significant Accounting Policies

RICI® Linked - PAM Advisors Fund, LLC (the Company) is a limited liability company organized under the Delaware Limited Liability Company Act.  The Company engages in the speculative trading of commodity futures, and may engage in the speculative trading of options on futures, forward contracts and other derivatives, on exchanges and markets located in the United States (U.S.) and abroad.  These financial statements incorporate the financial condition, results of operations and changes in members’ equity (net assets) of the Company as a whole, as well as each Series of membership interest in the Company. 

The Company consists of four series (each, a Series) of limited liability company interests (Interests): the RICI® Linked – PAM Total Index Series ( the Total Index Series), the RICI® Linked – PAM Agricultural Sector Series (the Agricultural Sector Series), the RICI® Linked – PAM Energy Sector Series (the Energy Sector Series), and the RICI® Linked – PAM Metals Sector Series (the Metals Sector Series). Each Series invests substantially all of its assets in derivative contracts representing the commodity positions contained in the Rogers International Commodity Index® (Index), or a sub-index thereof. Currently, three Series have commenced trading, the Total Index Series, which began trading May 8, 2007, the Agricultural Sector Series, which began trading February 7, 2008, and the Energy Sector Series, which began trading January 1, 2010.   The Energy Sector Series ceased operations after paying out withdrawal proceeds with respect to the July 31, 2010 withdrawal date.  The Metals Sector Series has not yet commenced operations.

The Company has been granted a license to use the Index pursuant to a sub-licensing arrangement.  If the sub-license arrangement were to terminate and the Company lost use of the Index, the Company would not be able to raise additional capital.

Price Asset Management, Inc. (PAM) is the Managing Member of the Company.  The Company is organized as a “series” limited liability company such that, pursuant to Section 18-215(b) of the Delaware Limited Liability Company Act, the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular Series shall be enforceable only against the assets of such Series and not against the assets of the Company generally or any other Series. Accordingly, the assets of one Series of the Company include only those funds and other assets that are paid to, held by or distributed to the Company on account of and for the benefit of that Series, including, without limitation, funds delivered to the Company for investment in that Series.

Total Index Series: trading is comprised of three commodity product sectors encompassing 37 markets worldwide.

Agricultural Sector Series: trading is comprised of one commodity product sector encompassing 21 agricultural markets worldwide.

Energy Sector Series: trading is comprised of one commodity product sector encompassing 6 energy markets worldwide.

Metals Sector Series: trading is comprised of one commodity product sector encompassing 10 metals markets worldwide.

Accounting policies:   The Company follows generally accepted accounting principles (GAAP), as established by the Financial Accounting Standards Board (FASB), to ensure consistent reporting of financial condition and results of operations.    The Company determined that it meets the definition of an investment company for accounting purposes and therefore follows the investment company accounting guidance.  

Use of estimates:  The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates. 

Cash and cash equivalents: Cash and cash equivalents include highly liquid instruments with original maturities of three months or less at the date of acquisition and investment in money market funds.

Net asset value:  “Net Asset Value” or “Net Assets” associated with each Series is the sum of all cash plus investments, at fair value, plus the liquidating value of all open commodity positions maintained by the Series, plus interest receivable and other assets, less all liabilities of the Series determined in accordance with GAAP. 

Securities and derivative financial instruments:  Investments in securities and derivative financial instruments and related expenses are recorded on trade date and at fair value.  Gains and losses are realized when contracts are liquidated and are included as net realized gain (loss) on investments in the statement of operations.  Unrealized gains or losses on open contracts (the difference between contract purchase price and market price) at the date of the statements of financial condition are included in equity in broker trading accounts as a net unrealized gain or loss, as there exists a right to offset.  The difference between the cost and the fair value of open investments is reflected as unrealized gains (losses) on investments. Any change in

11

 

 

net unrealized gain or loss from the preceding period is reported in the statements of operations.  Brokerage commissions include clearing and exchange fees and are separately reported in the statements of operations.

 

Note 1.Nature of Operations and Significant Accounting Policies (Continued)

Translation of foreign currencies:  The Company’s functional currency is the U.S. dollar; however, it transacts business in foreign currencies.  Investments denominated in foreign currencies are translated into U.S. dollars at the rates in effect at the date of the statements of financial condition.  Income and expense items denominated in foreign currencies are translated into U.S. dollars at the rates in effect during the period.  Gains and losses resulting from the translation to U.S. dollars are reported as part of realized gains and losses in the statements of operations.

Subscriptions:  Non-managing member subscriptions are presented in the statement of changes in members’ equity (net assets), net of sales fees, if any.

Withdrawals payable:  Withdrawals approved by the Managing Member prior to month end with a fixed effective date and fixed amount are recorded as withdrawals payable as of month end.

Ongoing offering expenses:  Ongoing offering expenses are charged to expense as incurred.

Income taxes:  No provision for income taxes has been made in these financial statements because members are individually responsible for reporting income or loss based on their respective shares in the Company’s income and expenses as reported for income tax purposes. 

The FASB provides guidance for how uncertain tax positions should be recognized, measured, disclosed and presented in the financial statements.  The guidance requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained “when challenged” or “when examined” by the applicable tax authority.  Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense and liability in the current year.  Through December 31, 2014 management has determined that there are no material uncertain income tax positions.

The Company is not subject to examination by U.S. Federal and state tax authorities for years before 2011.

Statement of cash flows:  The Company has elected not to provide statements of cash flows as permitted by GAAP as all of the following conditions have been met:

During the period, substantially all of the Company’s investments were classified as Level 1 and Level 2 assets and liabilities within the Fair Value hierarchy;

Substantially all of the Company’s investments are carried at fair value;

The Company had little or no debt during the period; and

The Company’s financial statements include a statement of changes in members’ equity (net assets).

 

Note 2.Fair Value of Financial Instruments

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes valuation techniques to maximize the use of observable inputs and minimize the use of unobservable inputs.  Assets and liabilities recorded at fair value are categorized within the fair value hierarchy based upon the level of judgment associated with the inputs used to measure their value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Inputs are broadly defined as assumptions market participants would use in pricing an asset or liability. The three levels of the fair value hierarchy are described below:

 

Level 1.  Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2.  Inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly; and fair value is determined through the use of models or other valuation methodologies.    

Level 3.  Inputs are unobservable for the asset or liability and include situations where there is little, if any, market activity for the asset or liability.  The inputs into the determination of fair value are based upon the best information in the circumstances and may require significant management judgment or estimation.

12

 

 

Note 2.Fair Value of Financial Instruments (Continued)

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy.  In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.  The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment.  The following section describes the valuation techniques used by the Company to measure different financial instruments at fair value and includes the level within the fair value hierarchy in which the financial instrument is categorized.

The fair values of exchange traded futures contracts are based upon exchange settlement prices.  Shares of mutual funds, which include money market funds, are valued at the net asset value based on quoted market prices.  Government-sponsored enterprise securities are valued using quoted market prices.  These financial instruments are classified as Level 1 of the fair value hierarchy.

The following table summarizes the Company’s assets and liabilities measured at fair value on a recurring basis within the fair value hierarchy as of:    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Index Series

 

Agricultural Sector Series

 

Total RICI® Linked - PAM Advisors Fund, LLC

 

 

December 31,

 

December 31,

 

December 31,

December 31,

 

December 31,

 

December 31,

 

 

2014

 

2013

 

2014

2013

 

2014

 

2013

Description

 

Level 1

 

Level 1

 

Level 1

Level 1

 

Level 1

 

Level 1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity in broker trading

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

accounts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Futures contracts

 

$
(7,138,912)

 

$
(2,740,705)

 

$
(7,421)

$
(161,948)

 

$
(7,146,333)

 

$
(2,902,653)

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

 
8,807,006 

 

 
8,236,611 

 

 
203,815 

 
28,311 

 

 
9,010,821 

 

 
8,264,922 

Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government-sponsored

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

enterprise securities

 

 
126,971,000 

 

 
184,959,750 

 

 
999,580 

 
4,999,085 

 

 
127,970,580 

 

 
189,958,835 

Mutual funds

 

 

 -

 

 
8,000,033 

 

 

 -

 
50,001 

 

 

 -

 

 
8,050,034 

 

 

$
128,639,094 

 

$
198,455,689 

 

$
1,195,974 

$
4,915,449 

 

$
129,835,068 

 

$
203,371,138 

 

At December 31, 2014 and 2013 and for the years then ended, the Company had no Level 2 or Level 3 assets or liabilities.  The Company assesses the levels or assets and liabilities measured at fair value at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstance that caused the transfer.  There was no transfer among Levels 1, 2 and 3 during the years ended December  31, 2014 and 2013.

In addition, substantially all of the Company’s other assets and liabilities are considered financial instruments and are reflected at fair value, or at carrying amounts that approximate fair value because of the short maturity of the instruments.

 

Note 3.Derivative Instruments

The Company’s derivative contracts are comprised of futures contracts. These derivative contracts are recorded on the statements of financial condition as assets measured at fair value and the related realized and unrealized gain (loss) associated with these derivatives is recorded in the statements of operations. The Company has considered the counterparty credit risk related to all its futures contracts and does not deem any counterparty credit risk material at this time.  The Company does not consider any derivative instruments to be hedging instruments, as this term is generally understood under FASB guidance.

13

 

 

Note 3. Derivative Instruments (Continued)

As of December 31, 2014 and December 31, 2013 the Total Index Series’ derivative contracts had the following impact on the statement of financial condition:  

Total Index Series

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Derivatives

Liability Derivatives

 

 

 

Contract Risk

Location

December 31, 2014

December 31, 2014

   Net

 

 

 

 

 

 

 

 

 

Futures:

Commodity price

Equity in broker trading account

Agriculture

 

 

$
1,145,657 

$
(1,358,000)

$
(212,343)

Energy

 

 

 
315 

 
(4,826,612)

 
(4,826,297)

Metals

 

 

 
1,498,882 

 
(3,599,154)

 
(2,100,272)

 

 

 

 

 

 

 

 

 

 

 

 

$
2,644,854 

$
(9,783,766)

$
(7,138,912)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Derivatives

Liability Derivatives

 

 

 

Contract Risk

Location

December 31, 2013

December 31, 2013

   Net

 

 

 

 

 

 

 

 

 

Futures:

Commodity price

Equity in broker trading account

Agriculture

 

 

$
927,126 

$
(2,801,139)

$
(1,874,013)

Energy

 

 

 
585,353 

 
(416,156)

 
169,197 

Metals

 

 

 
2,153,694 

 
(3,189,583)

 
(1,035,889)

 

 

 

 

 

 

 

 

 

 

 

 

$
3,666,173 

$
(6,406,878)

$
(2,740,705)

 

For the years ended December  31, 2014, 2013 and 2012 the Total Index Series’ derivative contracts had the following impact on the statement of operations: 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2014

 

Contract Risk

 

Realized gains (losses) on futures contracts

Change in unrealized gains (losses) on open futures contracts

Net trading gains (losses)

Futures:

Commodity price

 

 

 

 

 

 

 

Agriculture

 

 

$
(6,736,676)

$
1,661,670 

$
(5,075,006)

Energy

 

 

 
(31,873,203)

 
(4,995,494)

 
(36,868,697)

Metals

 

 

 
(3,216,895)

 
(1,064,383)

 
(4,281,278)

 

 

 

 

 

 

 

 

 

 

 

 

$
(41,826,774)

$
(4,398,207)

$
(46,224,981)

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2013

 

Contract Risk

 

Realized gains (losses) on futures contracts

Change in unrealized gains (losses) on open futures contracts

Net trading gains (losses)

Futures:

Commodity price

 

 

 

 

 

 

 

Agriculture

 

 

$
(12,228,573)

$
1,725,753 

$
(10,502,820)

Energy

 

 

 
8,584,100 

 
(403,837)

 
8,180,263 

Metals

 

 

 
(6,596,722)

 
(3,402,167)

 
(9,998,889)

 

 

 

 

 

 

 

 

 

 

 

 

$
(10,241,195)

$
(2,080,251)

$
(12,321,446)

 

 

 

 

 

 

14

 

 

Note 3. Derivative Instruments (Continued)

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31, 2012

 

Contract Risk

 

Realized gains (losses) on futures contracts

Change in unrealized gains (losses) on open futures contracts

Net trading gains (losses)

Futures:

Commodity price

 

 

 

 

 

 

 

Agriculture

 

 

$
6,076,139 

$
(10,497,383)

$
(4,421,244)

Energy

 

 

 
(3,399,815)

 
7,430,349 

 
4,030,534 

Metals

 

 

 
(3,391,964)

 
9,440,659 

 
6,048,695 

 

 

 

 

 

 

 

 

 

 

 

 

$
(715,640)

$
6,373,625 

$
5,657,985 

 

 

 

 

 

 

 

 

 

 

For the years ended December 31, 2014, 2013 and 2012, the monthly average number of futures contracts bought and sold for the Total Index Series was approximately 5,570,  6,440,  and 6,998,  respectively.

 

As of December 31, 2014,  the gross and net information related to the Total Index Series’ derivatives eligible for offset had the following impact on the statement of financial condition:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Amount of

 

 

 

 

Gross Amount Offset

 

Gross Amounts Offset

 

Unrealized Loss Presented

 

 

 

 

Recognized Assets

 

in the Statement of

 

in the Statement

 

 

 

 

and Liabilities

 

Financial Condition

 

of Financial Condition

 

 

Assets

 

 

 

 

 

 

 

 

U.S. and foreign futures contracts

$
2,644,853 

$
(2,644,853)

$

 -

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

U.S. and foreign futures contracts

 
9,783,765 

 
(2,644,853)

 
7,138,912 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2014, the net amount of unrealized gain (loss) by counterparty is not offset by cash collateral posted and deposited.

 

 

 

 

 

 

 

 

 

 

December 31, 2014

 

Net Amount of

 

 

 

 

 

 

 

Unrealized Gain (Loss)

 

Gross Amounts Not Offset in the

 

 

 

Presented in the

 

Statement of Financial Condition

 

 

 

Statement of Financial

Financial

Cash Collateral

 

 

Counterparty

Condition

Instruments

Deposited

Net Amount

Counterparty A

$
(2,262,284)

$

 -

$
2,262,284 

$

 -

Counterparty B

 
(4,876,628)

 

 -

 
4,876,628 

 

 -

Total

 $
(7,138,912)

$

 -

$
7,138,912 

$

 -

 

 

 

 

 

 

 

 

15

 

 

 

Note 3. Derivative Instruments (Continued)

As of December 31, 2013, the gross and net information related to the Total Index Series’ derivatives eligible for offset had the following impact on the statement of financial condition:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Amount of

 

 

 

 

Gross Amount Offset

 

Gross Amounts Offset

 

Unrealized Loss Presented

 

 

 

 

Recognized Assets

 

in the Statement of

 

in the Statement

 

 

 

 

and Liabilities

 

Financial Condition

 

of Financial Condition

 

 

Assets

 

 

 

 

 

 

 

 

U.S. and foreign futures contracts

$
3,666,173 

$
(3,666,173)

$

 -

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

U.S. and foreign futures contracts

 
6,406,878 

 
(3,666,173)

 
2,740,705 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2013, the net amount of unrealized gain (loss) by counterparty is not offset by cash collateral posted and deposited.

 

 

 

 

 

 

 

 

 

 

December 31, 2013

 

Net Amount of

 

 

 

 

 

 

 

Unrealized Gain (Loss)

 

Gross Amounts Not Offset in

 

 

 

Presented in the Statement

 

the Statement of Financial Condition

 

 

Counterparty

of Financial Condition

Financial Instruments

Cash Collateral Posted/Deposited

Net Amount

Counterparty A

$
(2,909,902)

$

 -

$
2,909,902 

$

 -

Counterparty B

 
169,197 

 

 -

 
(169,197)

 

 -

Total

$
(2,740,705)

$

 -

$
2,740,705 

$

 -

 

 

Agricultural Sector Series

As of December 31, 2014, the Agricultural Sector Series’ derivative contracts had the following impact on the statement of financial condition: 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Derivatives

Liability Derivatives

 

 

 

Contract Risk

Location

December 31, 2014

December 31, 2014

 

Net

 

 

 

 

 

 

 

 

 

Futures:

Commodity price

Equity in broker trading account

Agriculture

 

 

$
58,629 

$
(66,050)

$
(7,421)

Energy

 

 

 

 -

 

 -

 

 -

Metals

 

 

 

 -

 

 -

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

$
58,629 

$
(66,050)

$
(7,421)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Derivatives

Liability Derivatives

 

 

 

Contract Risk

Location

December 31, 2013

December 31, 2013

 

Net

 

 

 

 

 

 

 

 

 

Futures:

Commodity price

Equity in broker trading account

Agriculture

 

 

$
84,852 

$
(246,800)

$
(161,948)

Energy

 

 

 

 -

 

 -

 

 -

Metals

 

 

 

 -

 

 -

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

$
84,852 

$
(246,800)

$
(161,948)

16

 

 

 

 

Note 3. Derivative Instruments (Continued)

For the years ended December  31, 2014, 2013 and 2012, the Agricultural Sector Series’ derivative contracts had the following impact on the statement of operations: 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2014

 

Contract Risk

 

Realized gains (losses) on futures contracts

Change in unrealized gains (losses) on open futures contracts

Net trading gains (losses)

Futures:

Commodity price

 

 

 

 

 

 

 

Agriculture

 

 

$
(26,500)

$
154,527 

$
128,027 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$
(26,500)

$
154,527 

$
128,027 

 

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31, 2013

 

Contract Risk

 

Realized gains (losses) on futures contracts

Change in unrealized gains (losses) on open futures contracts

Net trading gains (losses)

Futures:

Commodity price

 

 

 

 

 

 

 

Agriculture

 

 

$
(1,460,819)

$
285,679 

$
(1,175,140)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$
(1,460,819)

$
285,679 

$
(1,175,140)

 

 

 

 

 

 

 

 

 

 

 

 

Year ended December 31, 2012

 

Contract Risk

 

Realized gains (losses) on futures contracts

Change in unrealized gains (losses) on open futures contracts

Net trading gains (losses)

Futures:

Commodity price

 

 

 

 

 

 

 

Agriculture

 

 

$
467,837 

$
(229,374)

$
238,463 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$
467,837 

$
(229,374)

$
238,463 

 

For the years ended December  31, 2014, 2013 and 2012, the monthly average number of futures contracts bought and sold for the Agricultural Sector Series was approximately 177,  328,  and 381, respectively.

17

 

 

Note 3. Derivative Instruments (Continued)

As of December 31, 2014, the gross and net information related to the Agricultural Sector Series’ derivatives eligible for offset had the following impact on the statement of financial condition:

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2014

 

 

 

 

 

 

 

 

Net Amount of

 

 

 

 

Gross Amount Offset

 

Gross Amounts Offset

 

Unrealized Loss Presented

 

 

 

 

Recognized Assets

 

in the Statement of

 

in the Statement

 

 

 

 

and Liabilities

 

Financial Condition

 

of Financial Condition

 

 

Assets

 

 

 

 

 

 

 

 

U.S. and foreign futures contracts

$
58,629 

$
(58,629)

$

 -

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

U.S. and foreign futures contracts

 
66,050 

 
(58,629)

 
7,421 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2014, the net amount of unrealized gain (loss) by counterparty is not offset by cash collateral posted and deposited.

 

 

 

 

 

 

 

 

 

 

December 31, 2014

 

Net Amount of

 

 

 

 

 

 

 

Unrealized Gain (Loss)

 

Gross Amounts Not Offset in

 

 

 

Presented in the Statement

 

the Statement of Financial Condition

 

 

Counterparty

of Financial Condition

Financial Instruments

Cash Collateral Posted/Deposited

Net Amount

Counterparty A

$
644 

$

 -

$
(644)

$

 -

Counterparty B

 
(8,065)

 

 -

 
8,065 

 

 -

Total

$
(7,421)

$

 -

$
7,421 

$

 -

 

As of December 31, 2013, the gross and net information related to the Agricultural Sector Series’ derivatives eligible for offset had the following impact on the statement of financial condition:

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2013

 

 

 

 

 

 

 

 

Net Amount of

 

 

 

 

Gross Amount Offset

 

Gross Amounts Offset

 

Unrealized Loss Presented

 

 

 

 

Recognized Assets

 

in the Statement of

 

in the Statement

 

 

 

 

and Liabilities

 

Financial Condition

 

of Financial Condition

 

 

Assets

 

 

 

 

 

 

 

 

U.S. and foreign futures contracts

$
84,852 

$
(84,852)

$

 -

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

U.S. and foreign futures contracts

 
246,800 

 
(84,852)

 
161,948 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2013, the net amount of unrealized gain (loss) by counterparty is not offset by cash collateral posted and deposited.

 

 

 

 

 

 

 

 

 

 

December 31, 2013

 

Net Amount of

 

 

 

 

 

 

 

Unrealized Gain (Loss)

 

Gross Amounts Not Offset in the

 

 

 

Presented in the

 

Statement of Financial Condition

 

 

 

Statement of Financial

Financial

Cash Collateral

 

 

Counterparty

Condition

Instruments

Deposited

Net Amount

Counterparty A

$
(28,603)

$

 -

$
28,603 

$

 -

Counterparty B

 
(133,345)

 

 -

 
133,345 

 

 -

Total

$
(161,948)

$

 -

$
161,948 

$

 -

 

 

 

 

 

18

 

 

Note 4.Equity in Broker Trading Account

Cash and financial instruments held at the Company’s clearing brokers collateralize amounts due to the clearing brokers, if any, and may serve to satisfy regulatory or clearing broker margin requirements.  The Company earns interest on its assets deposited with brokers.  At December 31, 2014 and 2013, the following amounts of cash were held at clearing brokers to satisfy margin requirements. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2014

 

December 31, 2013

 

 

 

 

 

 

 

Total Index Series

 

$
10,104,672 

 

$
11,154,801 

Agricultural Sector Series

 

 
140,210 

 

 
366,492 

 

 

 

Note 5.MF Global Recovery

On October 31, 2011, MF Global Inc., the Company’s clearing broker at that time (MF Global), reported to the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) possible deficiencies in customer segregated accounts held at the firm.  As a result, the SEC and CFTC determined that a liquidation led by the Securities Investor Protection Corporation (SIPC) would be the safest and most prudent course of action to protect customer accounts and assets, and a SIPC led liquidation commenced.  The Company held $33,268,088 of assets in customer segregated and secured accounts on deposit as required to support futures positions at MF Global as of October 31, 2011, although the majority of the Company’s assets were then held in bank custody accounts. 

In September 2012, based on the current information regarding the bankruptcy proceedings, the Company wrote up the receivable by $2,239,385. On November 1, 2012, the Company sold its MF Global claims for both the Total Index Series and the Agricultural Sector Series.  The sale amount of the claims was booked on October 31, 2012 and the proceeds were received on November 2, 2012 for the Total Index Series and the Agricultural Sector Series in the amount of $16,047,085 and $1,339,829, respectively. After the sale of the MF Global claims, the final net loss was $1,642,019 for the Total Index Series and $139,215 for the Agricultural Sector Series. 

 

Note  6.Subscriptions, Withdrawals, and Distributions

Subscriptions are effective at the opening of business on the first day of trading of the next calendar month.  Class A Interests were issued through October 2011.  Class B Interests were issued for contributions received on or after November 1, 2011 and are identical to Class A Interests in all respects, except that Class A Interests of each Series were allocated items of expense related to events occurring on or prior to October 31, 2011.    

Non-managing members may withdraw some or all of their interest in the Company as of the end of any calendar month upon five business days prior written notice. Withdrawals from any Series made prior to the end of the sixth full calendar month following a non-managing member’s initial investment in such Series are subject to a withdrawal charge, payable to the relevant Series, equal to one percent of the amount withdrawn, provided that such charge will not apply if the withdrawal results from a request to exchange Interests in one Series for Interests in another Series. The Managing Member may defer or suspend withdrawal rights under certain circumstances.

Distributions may be made at the discretion of the Managing Member.    

 

Note 7.The Managing Member

PAM, an Illinois corporation, is the managing member, commodity pool operator and commodity trading advisor of the Company. PAM is also registered with the SEC as a registered investment adviser. 

The Managing Member will maintain a capital account balance in each Series sufficient for such Series to be treated as a partnership for federal income tax purposes (which may be $0) and may make withdrawals from its capital accounts without notice to the non-managing members.  The Managing Member is not subject to the Managing Member’s management fee or support services fee, but will otherwise bear its proportionate share of each Series’ expenses. 

 

 

 

19

 

 

Note 8.Fees and Expenses

Each Series pays the Managing Member a monthly management fee of 0.054167 percent of the month-end Net Asset Value of each non-managing member's capital account in the Company (0.65 percent per annum).  The Managing Member may waive or reduce its management fee in respect of any non-managing member without entitling any other non-managing member to a similar waiver or reduction. There were no waived management fees for the years ended December 31, 2014, 2013 and 2012. 

The management fees during the years ended December 31, 2014, 2013 and 2012 were as follows and are reflected in the statements of operations.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2014

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

Total Index Series

 

$
1,342,837 

 

$
1,643,869 

 

$
1,916,415 

Agricultural Sector Series

 

 
28,049 

 

 
63,278 

 

 
84,882 

The Company

 

$
1,370,886 

 

$
1,707,147 

 

$
2,001,297 

 

Non-managing members in the Company introduced by their respective selling agents may be charged a monthly service fee of 0.0833 percent (1 percent per annum) payable to the selling agent.  They may also be charged an upfront sales fee of up to one percent of the subscriptions amount that is deducted from the subscription proceeds and paid to the applicable selling agent, if any.  For the years ended December 31, 2014, 2013 and 2012 subscriptions are net of the following amounts in sales fees that were charged to applicable non-managing members. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2014

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

Total Index Series

 

$
5,500 

 

$
4,475 

 

$
9,650 

Agricultural Sector Series

 

 
820 

 

 
1,800 

 

 
5,750 

The Company

 

$
6,320 

 

$
6,275 

 

$
15,400 

 

Non-managing members introduced through qualified advisors, including the marketing representative, Uhlmann Price Securities, LLC, will not be charged a service fee.  Uhlmann Price Securities, LLC, an affiliate of the Managing Member, will be paid its introducing fee by the Managing Member without reimbursement from the Company. The Company incurred the following amount of servicing fees to the selling agents during for the years ended December 31, 2014, 2013 and 2012, respectively. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2014

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

Total Index Series

 

$
72,661 

 

$
91,700 

 

$
109,638 

Agricultural Sector Series

 

 
8,808 

 

 
13,351 

 

 
18,419 

The Company

 

$
81,469 

 

$
105,051 

 

$
128,057 

 

The Company pays all of its own legal, accounting, auditing, reporting, administrative and initial offering expenses.

Any expenses of the Company as a whole, and not specific to any Series of the Company, will be allocated ratably among the Series, in the ratio that the Net Asset Value of each Series bears to the aggregate Net Asset Value of all Series.  The Managing Member believes this allocation method to be reasonable. 

Price Futures Group, Inc. (Price Futures), an affiliate of the Managing Member, acts as the introducing broker for the Company, whereby certain accounts of the Company are introduced to the Company’s clearing broker.  A portion of the brokerage fee paid by the Company for clearing transactions is paid to Price Futures by the clearing broker.

The Company pays 0.0083 percent (0.10 percent per annum) of the month-end net asset value, Series by Series, as a support service fee to pay broker-dealers for distribution related services to the Company for hosting distribution platforms or providing custody solutions. 

 

 

 

20

 

 

 

Note 8.Fees and Expenses (Continued)

The Company incurred the following amount of support services fees during the years ended December 31, 2014, 2013 and 2012, respectively.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2014

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

Total Index Series

 

$
211,389 

 

$
252,766 

 

$
294,673 

Agricultural Sector Series

 

 
4,313 

 

 
9,729 

 

 
13,052 

The Company

 

$
215,702 

 

$
262,495 

 

$
307,725 

 

 

 

 

Note 9.Trading Activities and Related Risks

The Company is exposed to both market risk, the risk arising from changes in the market value of the financial instruments, and credit risk, the risk of failure by another party to perform according to the terms of a contract.

Market risk:  The Company engages in the speculative trading of derivative financial instruments that involve varying degrees of off balance sheet market risk whereby changes in the market values of the underlying commodities may result in changes in the value of the derivative financial instruments in excess of the amounts reflected in the statements of financial condition.  Theoretically, the Company is exposed to a market risk equal to the notional value of futures and forward contracts purchased.

Credit risk and concentration of credit risk:  Credit risk arises primarily from the potential inability of counterparties, such as clearing brokers, banks or other financial institutions, to perform in accordance with the terms of a contract.  The Company’s exposure to credit risk associated with counterparty nonperformance is limited to the current cost to replace all contracts in which the Company has a gain.  Exchange traded financial instruments, such as financial futures, generally do not give rise to significant counterparty exposure due to daily cash settlement procedures for daily gains and losses and the margin requirements of the individual exchanges.  The Company clears all of its trades through ADM Investor Services, Inc. and RBC Capital Markets, LLC.  In the event these brokers do not fulfill their obligations, the Company may be exposed to risk.

The Company maintains deposits with financial institutions in amounts that are in excess of federally insured limits; however, the Company does not believe it is exposed to any significant credit risk.

The Managing Member has established procedures to actively monitor the creditworthiness of the counterparties with which it conducts business in order to minimize market and credit risks.  The non-managing members bear the risk of loss only to the extent of the value of their respective investments and, in certain circumstances, distributions and withdrawals received.

 

Note 10.Financial Highlights

Financial highlights for non-managing members of the Company for the years ended December 31, 2014, 2013 and 2012 are as follows: 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Index Series

 

Agricultural Sector Series

 

 

2014

 

2013

 

2012

 

2014

 

2013

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Return

 
(23.28)

%

 
(5.71)

%

 
2.86 

%

 
(9.80)

%

 
(12.87)

%
3.13 

%

Ratios to average members' equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(net assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total expenses (1)

 
0.93 

%

 
0.95 

%

 
0.94 

%

 
2.15 

%

 
1.44 

%
1.30 

%

Net investment gain (loss) (2)

 
(0.93)

%

 
(0.95)

%

 
1.00 

%

 
(2.11)

%

 
(1.42)

%
1.38 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (1) The ratio of operating expenses to average members’ equity (net asset) values does not include brokerage commissions.

(2)  Net investment loss does not include net realized and unrealized gains and losses and the related brokerage commissions of the Series.

Each ratio is calculated for the non-managing members taken as a whole. Total return is based on the change in value during the period of a theoretical investment made in each Series at the beginning of each calendar month during the period. The computation of an individual non-managing member’s ratios may vary from the ratios calculated above based on any fee

21

 

 

waivers,  the timing of capital transactions in participation of gains or losses resulting from MF Global.    The total returns and ratios exclude the effects of any one percent sales fees charged by the selling agents.

Note 11.Indemnifications

In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties that provide indemnifications under certain circumstances.  The Company’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred.  The Managing Member expects the risk of any future obligations under these indemnifications to be remote.

 

Note 12.Subsequent Events 

Subsequent to December 31, 2014,  subscriptions and withdrawals of interests were as follows: 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Index Series

 

Agricultural Sector Series

 

Total RICI® Linked - PAM Advisors Fund, LLC

 

 

Subscriptions

 

Withdrawals

 

Subscriptions

 

Withdrawals

 

Subscriptions

 

Withdrawals

January

 

$
188,102 

 

$
24,722,189 

 

$
15,572 

 

$
126,240 

 

$
203,674 

 

$
24,848,429 

February

 

 
146,108 

 

 
1,028,027 

 

 

 -

 

 
32,322 

 

 
146,108 

 

 
1,060,349 

March

 

 
354,107 

 

 
5,000,000 

(1)

 

 -

 

 

 

 

 
354,107 

 

 
5,000,000 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$
688,316 

 

$
30,750,216 

 

$
15,572 

 

$
158,562 

 

$
703,889 

 

$
30,908,778 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)  Estimate for which final amount will be based on closing NAV at March 31, 2015.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

22

RICI Linked - PAM Advisors Fund, LLC Reports