UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the period ended March 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________.
Commission File Number: 0-15764
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
TEMPO-LP, INC.
(Exact name of registrant as specified in governing instrument)
Dean Witter/Coldwell Banker Tax
Exempt Mortgage Fund, L.P.
Delaware 58-1710934
(State of organization) (IRS Employer Identification No.)
TEMPO-LP, Inc.
58-1710930
(IRS Employer Identification No.)
2 World Trade Center, New York, NY 10048
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 392-1054
Former name, former address and former fiscal year, if changed since last
report: not applicable
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No <PAGE>
<TABLE>
Part I - Financial Information
Item 1. Financial Statements
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
BALANCE SHEETS
<CAPTION>
March 31, December 31,
1995 1994
ASSETS
<S> <C> <C>
Cash and cash equivalents, at cost,
which approximates market $ 4,527,738 $ 4,464,390
Accrued interest receivable 1,149,912 733,012
Investments in revenue bonds 102,795,311 102,992,445
Deferred bond selection fee, net 1,420,736 1,473,980
Other assets 772,875 778,946
$110,666,572 $110,442,773
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and other liabilities $ 952,146 $ 957,538
Partners' capital:
Assigned Benefit Certificates
(7,454,110 ABC's outstanding) 109,714,426 109,485,235
$110,666,572 $110,442,773
See accompanying notes to financial statements.
/TABLE
<PAGE>
<TABLE>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
STATEMENTS OF OPERATIONS
Three months ended March 31, 1995 and 1994
<CAPTION>
1995 1994
<S> <C> <C>
Interest income:
Revenue bonds $1,986,219 $2,037,385
Short-term investments 29,072 7,912
2,015,291 2,045,297
Expenses:
General and administrative 169,777 116,095
Net income $1,845,514 $1,929,202
Net income per Assigned Benefit Certificate $ .24 $ .25
See accompanying notes to financial statements.
/TABLE
<PAGE>
<TABLE>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
STATEMENT OF PARTNERS' CAPITAL
Three months ended March 31, 1995
<CAPTION>
Limited General
Partner Partner Total
<S> <C> <C> <C>
Partners' capital (deficit)
at January 1, 1995 $110,112,694 $(627,459) $109,485,235
Net income 1,808,604 36,910 1,845,514
Cash distributions (1,583,997) (32,326) (1,616,323)
Partners' capital (deficit)
at March 31, 1995 $110,337,301 $(622,875) $109,714,426
See accompanying notes to financial statements.
/TABLE
<PAGE>
<TABLE>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
STATEMENTS OF CASH FLOWS
Three months ended March 31, 1995 and 1994
<CAPTION>
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,845,514 $ 1,929,202
Adjustments to reconcile net income to
net cash provided by operating activities:
Amortization 197,134 187,461
Amortization of deferred bond selection fee 53,244 53,244
(Increase) decrease in accrued interest
receivable (416,900) 32,696
Decrease in accounts payable and other
liabilities (5,392) (103,301)
Net cash provided by operating activities 1,673,600 2,099,302
Cash flows from financing activities:
Cash distributions (1,616,323) (1,616,323)
Decrease (increase) in other assets 6,071 (11,512)
Net cash used in financing activities (1,610,252) (1,627,835)
Increase in cash and cash equivalents 63,348 471,467
Cash and cash equivalents at beginning
of period 4,464,390 3,214,536
Cash and cash equivalents at end
of period $ 4,527,738 $ 3,686,003
See accompanying notes to financial statements.
/TABLE
<PAGE>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
NOTES TO FINANCIAL STATEMENTS
1. The Partnership and Accounting Policies
Dean Witter/Coldwell Banker Tax Exempt Mortgage Fund, L.P. (the
"Partnership") is a limited partnership organized under the laws of the
State of Delaware on August 20, 1986.
The Partnership's records are maintained on the accrual basis of
accounting for financial reporting and tax purposes.
Generally, the investments in revenue bonds are carried at cost. The
Partnership has acquired ownership interests in certain properties
collateralizing the bonds because the owners of such properties defaulted
on the bonds. At the date of acquisition of these ownership interests,
the Partnership adjusted the carrying value of the related bonds to the
net realizable value of the property if such amount was lower than the
book value of the bonds. Subsequently, for those bonds which were
written down to net realizable value, the Partnership records periodic
amortization (netted against bond interest) approximately equal to
depreciation on the property.
Net income per Assigned Benefit Certificate ("ABC") is calculated by
dividing net income allocated to the Investors, in accordance with the
Partnership Agreement, by the number of ABCs outstanding.
In the opinion of management, the accompanying financial statements,
which have not been audited, include all adjustments, consisting only of
normal recurring accruals, necessary to present fairly the results for
the interim periods.
2. Investment in Revenue Bonds
The Partnership recognized provisions for uncollectible interest of
$225,518 and $72,217 for the three months ended March 31, 1995 and 1994,
respectively, which amounts approximate accrued but unpaid interest on
the Park at Landmark revenue bond in 1995 and the Park at Landmark and
SunBrook Apartments revenue bonds in 1994. These amounts are recorded
as a reduction of interest income from revenue bonds.
In 1993, American First REIT Inc. ("AFREIT"), owner of the Township in
Hampton Woods property, informed the Partnership that it intended to
refinance the property and prepay the related mortgage loan. The
Partnership informed AFREIT that the loan documents do not permit pre-
payment before 1996. In March 1994, AFREIT filed suit to compel the
Partnership to accept the prepayment. In February 1995, a Virginia
Court, in a summary judgment, ruled that the loan agreements are clear
that there can be no voluntary prepayments prior to November 1, 1996.
AFREIT did not appeal the decision.
Fountain Head Partners did not pay its share of certain building
improvements the Partnership considered necessary and, in December 1994,
the Partnership and Fountain Head Partners had an arbitration hearing in
which the Partnership sought a 50% reimbursement from Fountain Head
Partners. In April 1995, the arbitrators denied the Partnership's
request for direct co-owner participation. However, the arbitrators
ruled that the Partnership could offset a portion of the repair costs
with funds maintained in the property's replacement reserve account. In
addition, any remaining funding amount would be classified as a priority
loan, payable before any future distributions are paid to the owners.
3. Related Party Transactions
An affiliate of the General Partner performs bond servicing and
administrative functions, processes investor transactions and prepares
tax information for the Partnership. For each three-month period ended
March 31, 1995 and 1994, the Partnership incurred approximately $129,000
for these services. As of March 31, 1995, the affiliate was owed
approximately $110,000 for these services.
Another affiliate of the General Partner earned fees of $26,474 and
$22,766 for the management of the Park at Landmark property during the
three months ended March 31, 1995 and 1994, respectively. As of March
31, 1995, the affiliate was owed approximately $8,900.
4. Cash Distributions
On May 12, 1995, the Partnership paid a cash distribution of $1,863,527
to the Investors ($0.25 per ABC) and $38,031 to the General Partner.
<PAGE>
<TABLE>
TEMPO-LP, INC.
BALANCE SHEETS
<CAPTION>
March 31, December 31,
1995 1994
ASSETS
<C> <C> <C>
Cash $ 900 $ 900
Investment in Partnership, at cost 100 100
$1,000 $1,000
STOCKHOLDER'S EQUITY
Common stock, $1 par value, 1,000 shares
authorized and outstanding $1,000 $1,000
See accompanying note.
</TABLE>
<PAGE>
TEMPO-LP, INC.
NOTE TO BALANCE SHEETS
1. Organization
TEMPO-LP, Inc. (the "Corporation"), was formed in April 1986 to be the
limited partner of the Dean Witter/Coldwell Banker Tax Exempt Mortgage
Fund, L.P. (the "Partnership"). The Partnership issued limited
partnership interests to the Corporation, which in turn assigned those
limited partnership interests to investors. Investors received assigned
benefit certificates to represent the limited partnership interests
assigned to them. The Corporation has had no activity since assignment
of the limited partnership interests in 1986.
The Corporation's capital stock is owned by Dean Witter, Discover & Co.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Liquidity and Capital Resources
The Partnership raised $149,082,200 in a public offering of 7,454,110
ABCs which was terminated in 1987. The Registrants have no plans to
raise additional capital.
The Partnership has purchased ten series of revenue bonds, the proceeds
of which funded the development of the Properties. The Partnership's
acquisition program has been completed. No additional investments are
planned.
Cash flow generated by the Properties is the primary source of all
payments due the Partnership under the terms of the revenue bonds, which
are collateralized by the Properties.
The Partnership's business is indirectly affected by competition to the
extent that Properties may be subject to competition from neighboring
properties. Many residential real estate markets are stabilizing because
new construction has been significantly less than new renter household
formation over the past several years. Another indication of improvement
in the residential market is that rental rates in many metropolitan
areas are slowly increasing. Employment is projected to grow in certain
regions such as the Southwest, Southeast and areas of Florida resulting
in a steady increase in demand for multifamily housing. At several of
the properties securing the mortgage loans in the Partnership's
portfolio, rental rates have recently increased and, therefore, the
Partnership's cash flow from operations has increased.
During the three months ended March 31, 1995, Partnership cash flow from
operations exceeded its distributions and other cash requirements. The
Partnership expects that its cash flow from operations will continue to
exceed its distributions and other cash needs during the remainder of
1995. The Partnership will increase the cash distribution rate from
4.25% to 5% beginning with the cash distribution for the first quarter
of 1995 paid in May 1995.
The payment status of each revenue bond during the three months ended
March 31, 1995 is as follows:
Cash flow from the High Ridge Apartments, Township in Hampton Woods and
Burlington Apartments properties enabled their owners to pay debt service
at effective interest rates of 8.3%, 9.67% and 7.28%, respectively.
These payment rates exceeded the minimum interest rates required on the
respective loans. Such excess payments were applied to base interest due
under the respective loans. During the remainder of 1995, all of these
properties are expected to operate at a modest cash flow surplus after
payment of minimum debt service and, therefore, should be able to
continue to pay a portion of base interest.
Cash flow from the Pine Club Apartments enabled its owner to pay minimum
debt service. The property is expected to generate sufficient cash flow
to fully pay minimum debt service and a portion of additional base
interest during the remainder of 1995.
The owner of Wildcreek Apartments property paid its minimum debt service
and required reserves in full. The Partnership is holding the remaining
proceeds from the letter of credit opened by this owner as additional
security on the loan, approximately $253,000, in a segregated cash
account. The Partnership does not expect that it will need to use these
proceeds to fund minimum debt service or reserve shortfalls of the owner
in the near future.
During the first quarter of 1995, the Fountain Head property, which is
owned 50% each by the Partnership and Fountain Head Partners, an
unaffiliated party, operated at a modest cash flow deficit and the owner
was able to pay its required minimum debt service. However, the property
is expected to continue to operate with a cash flow deficit during the
remainder of 1995, and it is possible the Partnership will need to use
Fountain Head Partners' remaining commitment of approximately $25,000 to
fund any debt service shortfall. See also Note 2 to the financial
statements in Item 1.
Cash flow from the SunBrook property (which is partly owned by the
Partnership) enabled its owner to pay minimum debt service during the
first quarter of 1995. The property is expected to incur modest debt
service shortfalls for the remainder of 1995.
All of the cash flow generated by the Park at Landmark property (which
is partly owned by the Partnership) is paid to the Partnership. During
the three months ended March 31, 1995, the Partnership received $424,170
from the property; this amount was less than required minimum debt
service by $225,518. Cash flow from the property is not expected to be
sufficient to fully pay minimum debt service in the foreseeable future.
On May 12, 1995, the Partnership paid the first quarter cash distribution
of $1,863,527 to the Investors ($0.25 per ABC) and $38,031 to the General
Partner.
In December 1992, the Internal Revenue Service published proposed and
temporary regulations with respect to the modification of debt
instruments. If the regulations are adopted as currently written, they
would limit the type and degree of direct, indirect and implied
modifications that could be made by a bond owner or lender without
adversely affecting the tax-exempt status of the revenue bonds. It is
not clear at this time how the proposed regulations would affect the
Partnership with respect to revenue bonds secured by mortgages on
properties transferred to new borrowers. The regulations have not yet
been finalized.
Operations
Fluctuations in the Partnership's operating results for the three months
ended March 31, 1995 compared to the three months ended March 31, 1994
are primarily attributable to the following:
Interest income from revenue bonds decreased because less interest was
received from the Park at Landmark property in 1995 than in 1994.
The increase in general and administrative expenses in 1995 compared to
1994 was primarily due to increased legal expenses incurred with regard
to the Fountain Head Apartments and Township in Hampton Woods properties.
A summary of the markets in which the Properties are located is as
follows:
Burlington Arboretum Apartments, located in Burlington, MA, a suburb of
Boston, is in a market which has strengthened. Currently, this market
has a 3% vacancy rate. During the first quarter of 1995, occupancy at
the property remained at 98%, and the owner was able to raise rental
rates, as was done in 1994.
The Park at Landmark property, located in Alexandria, VA, competes
against several neighboring apartment buildings in a market experiencing
a vacancy rate of 8%. During the first quarter of 1995, occupancy at the
property decreased slightly from 97% to 96% and the owner was able to
slightly raise rental rates.
Pine Club Apartments, located in Orlando, Fl, operates in a market with
a current vacancy rate of 8%. During the first quarter of 1995,
occupancy at the property remained at 91%.
SunBrook Apartments is located in St. Charles County, MO, a suburb of St.
Louis. Occupancy in this market has begun to increase as a result of
improving economic conditions in the area. Major employers in the area
have ceased additional layoffs while new commercial construction has
begun to increase. In the first quarter of 1995, occupancy at the
property increased slightly from 86% to 87%.
Wildcreek Apartments is located in Clarkston, GA, a suburb of Atlanta.
This market has strengthened in recent years due to a lack of new
residential construction in the area. During the first quarter of 1995,
occupancy at the property remained at 90%.
The Township in Hampton Woods property, located in Hampton, VA, operates
in a market which is primarily dependent on the defense industry.
Although military bases and factories in general have been subject to
cutbacks and closings, this market, with a current vacancy rate of 7%,
has not been adversely affected by this trend. During the first quarter
of 1995, occupancy at the property increased from 90% to 93%.
High Ridge Apartments, located in Albuquerque, NM, operates in a strong
market which has a vacancy rate of 3% and is experiencing an increase in
rental rates. Occupancy at the property remained at 98% during the first
quarter of 1995. New apartment units are under construction in this
market, but they are not expected to compete directly with the property.
Fountain Head Apartments, located in Kansas City, MO, operates in a
market which has a vacancy rate of 5%. During the first quarter of 1995,
occupancy remained at 100%. New apartment units are under construction,
but they are not expected to adversely affect the property's performance.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal proceedings - not applicable.
Item 2. Changes in Securities - not applicable.
Item 3. Defaults upon Senior Securities - not applicable.
Item 4. Submission of Matters to a vote of Security Holders -
not applicable.
Item 5. Other Information - not applicable.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits - not applicable
b) Reports on Form 8-K - Report, dated February 14, 1995,
of the cash distribution rate change per Assigned
Benefit Certificate from $.2125 to $.25 beginning with
the first quarter of 1995 distribution paid in May
1995.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrants have duly caused this report to be signed on their behalf by
the undersigned thereunto duly authorized.
DEAN WITTER/COLDWELL BANKER
TAX EXEMPT MORTGAGE FUND, L.P.
By: TEMPO-GP, INC.
Managing General Partner
Date: May 12, 1995 By: /s/E. Davisson Hardman, Jr.
E. Davisson Hardman, Jr.
President
Date: May 12, 1995 By: /s/Lawrence Volpe
Lawrence Volpe
Controller
(Principal Financial and
Accounting Officer)
TEMPO-LP, INC.
Date: May 12, 1995 By: /s/E. Davisson Hardman, Jr.
E. Davisson Hardman, Jr.
President
Date: May 12, 1995 By: /s/Lawrence Volpe
Lawrence Volpe
Controller
(Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Registrant is a limited partnership which invests in federally tax-exempt
revenue bonds, which financed construction and/or ownership of multi-family
residential properties. In accordance with industry practice, its balance
sheet is unclassified. For full information, refer to the accompanying
unaudited financial statements.
</LEGEND>
<CIK> 0000794449
<NAME> DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 4,527,738
<SECURITIES> 0
<RECEIVABLES> 1,149,912
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 110,666,572<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 109,714,426<F2>
<TOTAL-LIABILITY-AND-EQUITY> 110,666,572<F3>
<SALES> 0
<TOTAL-REVENUES> 2,015,291<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 169,777
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,845,514
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,845,514
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,845,514
<EPS-PRIMARY> .24<F5>
<EPS-DILUTED> 0
<FN>
<F1>In addition to cash and receivables, total assets include investment
in revenue bonds of $102,795,311, net deferred expenses of $1,420,736
and other assets of $772,875.
<F2>Represents partners' capital.
<F3>Liabilities include accounts payable and other liabilities of $952,146.
<F4>Total revenue includes interest income of $2,015,291.
<F5>Represents net income per Assigned Benefit Certificate.
</FN>
</TABLE>
