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 June 30, 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>
June 30, December 31,
1995 1994
ASSETS
<S> <C> <C>
Cash and cash equivalents, at cost,
which approximates market $ 5,604,032 $ 4,464,390
Accrued interest receivable 458,064 733,012
Investments in revenue bonds 102,598,177 102,992,445
Deferred bond selection fee, net 1,367,493 1,473,980
Other assets 653,840 778,946
$110,681,606 $110,442,773
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and other liabilities $ 942,025 $ 957,538
Partners' capital:
Assigned Benefit Certificates
(7,454,110 ABC's outstanding) 109,739,581 109,485,235
$110,681,606 $110,442,773
<FN>
See accompanying notes to financial statements.
/TABLE
<PAGE>
<TABLE>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
STATEMENTS OF OPERATIONS
Three and six months ended June 30, 1995 and 1994
<CAPTION>
Three months ended Six months ended
June 30, June 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Interest income:
Revenue bonds $1,971,117 $1,656,237 $3,957,336 $3,693,622
Short-term investments 38,221 12,893 67,293 20,805
2,009,338 1,669,130 4,024,629 3,714,427
Expenses:
General and administrative 82,624 365,167 252,401 481,262
Net income $1,926,714 $1,303,963 $3,772,228 $3,233,165
Net income per Assigned
Benefit Certificate $ .25 $ .17 $.50 $.42
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
STATEMENT OF PARTNERS' CAPITAL
Six months ended June 30, 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 3,696,783 75,445 3,772,228
Cash distributions (3,447,525) (70,357) (3,517,882)
Partners' capital (deficit)
at June 30, 1995 $110,361,952 $(622,371) $109,739,581
<FN>
See accompanying notes to financial statements.
/TABLE
<PAGE>
<TABLE>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
STATEMENTS OF CASH FLOWS
Six months ended June 30, 1995 and 1994
<CAPTION>
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net income $ 3,772,228 $ 3,233,165
Adjustments to reconcile net income to
net cash provided by operating activities:
Amortization 394,268 374,922
Amortization of deferred bond selection fee 106,487 106,487
Decrease in accrued interest receivable 274,948 31,006
(Decrease) increase in accounts payable and other
liabilities (15,513) 135,888
Net cash provided by operating activities 4,532,418 3,881,468
Cash flows from financing activities:
Cash distributions (3,517,882) (3,232,646)
Decrease (increase) in other assets 125,106 (48,866)
Net cash used in financing activities (3,392,776) (3,281,512)
Increase in cash and cash equivalents 1,139,642 599,956
Cash and cash equivalents at beginning
of period 4,464,390 3,214,536
Cash and cash equivalents at end
of period $ 5,604,032 $ 3,814,492
<FN>
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
$480,679 and $697,337 for the six months ended June 30, 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.
In July 1995, the Partnership was notified that AFREIT was merged into
Mid-America Apartment Communities Inc. REIT without the Partnership's
consent; this is a technical default on the loan, and a notice of default
has been sent to AFREIT. The Partnership and Mid-America are attempting
to resolve this matter.
Fountain Head Partners did not pay its share of certain building
improvement costs totalling $271,000 which the Partnership considered
necessary. 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 reimbursement, but
permitted the Partnership to recover the total cost of the improvements:
first, from the property's replacement reserve of approximately $85,000;
and then from the cash flow from the property before any 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 six-month period ended
June 30, 1995 and 1994, the Partnership incurred approximately $258,000
for these services. As of June 30, 1995, the affiliate was owed
approximately $29,000 for these services.
Another affiliate of the General Partner earned fees of $26,598 and
$26,474 for the management of the Park at Landmark property during the
six months ended June 30, 1995 and 1994, respectively. As of June 30,
1995, the affiliate was owed approximately $8,700 by the property for
these services.
4. Cash Distributions
On August 11, 1995, the Partnership paid a cash distribution of
$1,863,528 to the Investors ($0.25 per ABC) and $38,031 to the General
Partner.
<PAGE>
<TABLE>
TEMPO-LP, INC.
BALANCE SHEETS
<CAPTION>
June 30, December 31,
1995 1994
ASSETS
<S> <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 the Properties may be subject to competition from neighboring
properties.
Residential properties in many areas continue to benefit from stabilized
occupancies and steady demand from tenants. Rental rates are increasing
in many markets. Population and employment growth in Albuquerque,
Atlanta and Orlando have had a positive impact on the properties located
in these markets. 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. Improved performance of residential properties, however, is
leading to apartment construction in certain areas.
During the six months ended June 30, 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 increased 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 six months ended June
30, 1995 is as follows:
Cash flow from the High Ridge Apartments, Township in Hampton Woods and
Burlington Arboretum Apartments properties enabled their owners to pay
debt service at effective interest rates of 8.46%, 9.08% and 7.40%,
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, each of these properties is 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 and Wildcreek Apartments
properties enabled their owners to pay minimum debt service. Each
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.
During the six months ended June 30, 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, but the
owner was able to pay its required minimum debt service. However, the
property is not generating sufficient cash flow to fund real estate tax
escrows and certain operating expenses on a current basis. As of June
30, 1995, Fountain Head Partners has a remaining commitment to fund
property operating deficits of approximately $26,500 secured by a letter
of credit. See 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 six
months ended June 30, 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 six months ended June 30, 1995, the Partnership received $818,696
from the property; this amount was less than required minimum debt
service by $480,679. Cash flow from the property is not expected to be
sufficient to fully pay minimum debt service in the foreseeable future.
On August 11, 1995, the Partnership paid the second quarter cash
distribution of $1,863,528 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 six and three
month periods ended June 30, 1995 compared to 1994 are primarily
attributable to the following:
The increases in interest income from revenue bonds were primarily due
to increases in interest received from the Park at Landmark and SunBrook
properties in the second quarter of 1995.
The decrease in general and administrative expenses was primarily due to
the absence of the Burlington Arboretum debt restructuring costs which
were recognized by the Partnership in the second quarter of 1994.
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 second quarter of 1995, occupancy at
the property remained at 98%. Effective January 1, 1995, the owner
raised rental rates at the property by approximately 10%.
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 second quarter of 1995, occupancy at
the property decreased slightly from 96% to 95%. Effective January 1,
1995, the owner raised rental rates slightly at the property.
Pine Club Apartments, located in Orlando, Fl, operates in a market with
a current vacancy rate of approximately 10%. The market is strengthening
due to employment growth in Orlando's service industries. During the
second quarter of 1995, occupancy at the property decreased slightly from
91% to 90%. New apartment units are under construction in this market,
but are not anticipated to compete directly with Pine Club Apartments.
SunBrook Apartments, located in St. Charles County, MO, a suburb of St.
Louis, is in a market currently experiencing a 5% vacancy rate. In the
second quarter of 1995, a slow-down in single-family home sales and
continued retrenchment of some corporate employers in this market
decreased demand for furnished apartments at the property. During the
second quarter of 1995, occupancy at the property remained at 87%.
Effective April 1, 1995, the owner raised rental rates at the property.
Wildcreek Apartments is located in Clarkston, GA, a suburb of Atlanta.
This market, with a current vacancy rate of approximately 10%, is
beginning to level off due to increased purchases of single-family homes
by prior apartment tenants. During the second quarter of 1995, occupancy
at the property remained at 90% and the owner was able to raise rental
rates.
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 second quarter
of 1995, occupancy at the property remained at 93%.
High Ridge Apartments, located in Albuquerque, NM, operates in a strong
market which has a vacancy rate of 8%. However, new construction and the
affordability of single-family homes may reduce occupancy levels in this
market. Occupancy at the property remained at 98% during the second
quarter of 1995.
Fountain Head Apartments, located in Kansas City, MO, operates in a
market which has a vacancy rate of 5%. During the second quarter of
1995, occupancy decreased slightly from 100% to 99%. New apartment units
are under construction, but they are not expected to adversely affect the
property's performance.<PAGE>
PART II - OTHER INFORMATION
Not applicable<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: August 14, 1995 By: /s/E. Davisson Hardman, Jr.
E. Davisson Hardman, Jr.
President
Date: August 14, 1995 By: /s/Lawrence Volpe
Lawrence Volpe
Controller
(Principal Financial and
Accounting Officer)
TEMPO-LP, INC.
Date: August 14, 1995 By: /s/E. Davisson Hardman, Jr.
E. Davisson Hardman, Jr.
President
Date: August 14, 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 5,604,032
<SECURITIES> 0
<RECEIVABLES> 458,064
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 110,681,606<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 109,739,581<F2>
<TOTAL-LIABILITY-AND-EQUITY> 110,681,606<F3>
<SALES> 0
<TOTAL-REVENUES> 4,024,629<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 252,401
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3,772,228
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,772,228
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,772,228
<EPS-PRIMARY> .50<F5>
<EPS-DILUTED> 0
<FN>
<F1>In addition to cash and receivables, total assets include investment
in revenue bonds of $102,598,177, net deferred expenses of $1,367,493
and other assets of $653,840.
<F2>Represents partners' capital.
<F3>Liabilities include accounts payable and other liabilities of $942,025.
<F4>Total revenue includes interest income of $4,024,629.
<F5>Represents net income per Assigned Benefit Certificate.
</FN>
</TABLE>
