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, 1996
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>
<CAPTION>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
BALANCE SHEETS
March 31, December 31,
1996 1995
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 5,354,832 $ 5,255,586
Investments in revenue bonds 102,004,200 102,201,849
Accrued interest receivable 458,047 543,723
Deferred bond selection fee, net 1,207,762 1,261,006
Escrowed funds 654,402 741,613
Other assets 565,777 585,131
$110,245,020 $110,588,908
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and other liabilities $ 802,675 $ 865,304
Partners' capital:
Assigned Benefit Certificates
(7,454,110 ABC's outstanding) 109,442,345 109,723,604
$110,245,020 $110,588,908
See accompanying notes to financial statements.
/TABLE
<PAGE>
<TABLE>
<CAPTION>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
STATEMENTS OF OPERATIONS
Three months ended March 31, 1996 and 1995
1996 1995
<S> <C> <C>
Interest income:
Revenue bonds $2,060,779 $1,986,219
Other 34,048 29,072
2,094,827 2,015,291
Expenses:
General and administrative 94,216 169,777
Net income $2,000,611 $1,845,514
Net income allocated to:
Limited partner $1,960,599 $1,808,604
General partner 40,012 36,910
$2,000,611 $1,845,514
Net income per Assigned Benefit Certificate $ .26 $ .24
See accompanying notes to financial statements.
/TABLE
<PAGE>
<TABLE>
<CAPTION>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
STATEMENT OF PARTNERS' CAPITAL
Three months ended March 31, 1996
Limited General
Partner Partner Total
<S> <C> <C>
Partners' capital (deficit)
at December 31, 1995 $110,346,295 $(622,691) $109,723,604
Net income 1,960,599 40,012 2,000,611
Cash distributions (2,236,233) (45,637) (2,281,870)
Partners' capital (deficit)
at March 31, 1996 $110,070,661 $(628,316) $109,442,345
See accompanying notes to financial statements.
/TABLE
<PAGE>
<TABLE>
<CAPTION>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
STATEMENTS OF CASH FLOWS
Three months ended March 31, 1996 and 1995
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,000,611 $ 1,845,514
Adjustments to reconcile net income to
net cash provided by operating activities:
Amortization 197,649 197,134
Amortization of deferred bond selection fee 53,244 53,244
Decrease (increase) in accrued interest receivable 85,676 (416,900)
Decrease in escrowed funds 87,211 101,487
Decrease in accounts payable and other
liabilities (62,629) (5,392)
Net cash provided by operating activities 2,361,762 1,775,087
Cash flows from financing activities:
Cash distributions (2,281,870) (1,616,323)
Decrease in other assets 19,354 6,071
Net cash used in financing activities (2,262,516) (1,610,252)
Increase in cash and cash equivalents 99,246 164,835
Cash and cash equivalents at beginning
of period 5,255,586 3,736,746
Cash and cash equivalents at end
of period $ 5,354,832 $ 3,901,581
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.
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.
These financial statements should be read in conjunction with the annual
financial statements and notes thereto included in the Partnership's
annual report on Form 10-K filed with the Securities and Exchange
Commission for the year ended December 31, 1995. Operating results of
interim periods may not be indicative of the operating results for the
entire year.
2. Investment in Revenue Bonds
The Partnership recognized provisions for uncollectible interest of
$254,970 and $225,518 for the three months ended March 31, 1996 and 1995,
respectively, which amounts approximate accrued but unpaid interest on
the Park at Landmark revenue bond in 1996 and 1995. These amounts are
recorded as a reduction of interest income from revenue bonds.
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 of the three-month periods
ended March 31, 1996 and 1995, the Partnership incurred approximately
$129,000 for these services. As of March 31, 1996, the affiliate was
owed approximately $15,800 for these services.
Another affiliate of the General Partner earned fees of $25,115 and
$26,474 for the management of the Park at Landmark property during the
three months ended March 31, 1996 and 1995, respectively. As of March
31, 1996, the affiliate was owed approximately $8,300 by the owner of
Park at Landmark for these services.
4. Cash Distributions
On May 10, 1996, the Partnership paid a cash distribution of $2,236,233
to the Investors ($0.30 per ABC) and $45,637 to the General Partner.
<PAGE>
<TABLE>
<CAPTION>
TEMPO-LP, INC.
BALANCE SHEETS
March 31, December 31,
1996 1995
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 eight multi-family residential
properties (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.
Overall economic expansion has kept household formation relatively strong
and has stimulated demand for apartments. Stabilized vacancies and
rising rental rates have had a positive effect on operating income at
many apartment properties. Improving market conditions for multifamily
properties is leading to apartment construction in several cities of the
midwest and southeast. Nationally, multifamily housing starts are at the
highest level since 1990.
During the three months ended March 31, 1996, Partnership cash flow from
operations exceeded distributions and other cash requirements. The
Partnership increased the annual cash distribution rate from 5% to 6%,
beginning with the cash distribution for the fourth quarter of 1995,
which was paid in February 1996. The Partnership expects that for the
remainder of 1996, it will need to draw upon its cash reserves, in
addition to cash flow from operations, to fund cash distributions.
The payment status of each revenue bond during the three months ended
March 31, 1996 is as follows:
Cash flow from the High Ridge Apartments, Township in Hampton Woods
Apartments and Burlington Arboretum Apartments properties enabled their
owners to pay debt service at effective interest rates of 8.58%, 12.88%
and 7.39%, respectively. These payment rates exceeded the minimum
interest required on the respective loans; the excess payments were
applied to base interest. During the remainder of 1996, 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 during the remainder of 1996. The Partnership also
expects to begin to receive a portion of base interest from Wildcreek in
1996.
During the three months ended March 31, 1996, 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 paid its required minimum debt service and real estate tax escrow
in full. As of March 31, 1996, Fountain Head Partners has a remaining
commitment to fund property operating deficits of approximately $26,500
secured by a letter of credit in favor of the Partnership. During the
remainder of 1996, the Partnership and Fountain Head Partners expect to
fund operating deficits; the Partnership's share of such fundings is not
expected to be material.
Cash flow from the SunBrook property (which is partly owned by the
Partnership) enabled its owner to pay minimum debt service during the
three months ended March 31, 1996. Cash flow from the property is
expected to be sufficient to fully pay minimum debt service for the
remainder of 1996.
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, 1996, the Partnership received $394,717
from the property; this amount was less than required minimum debt
service by $254,970. Cash flow from the property is not expected to be
sufficient to fully pay minimum debt service in the foreseeable future.
On May 10, 1996, the Partnership paid the first quarter cash distribution
of $2,236,233 to the Investors ($0.30 per ABC) and $45,637 to the General
Partner.
Except as discussed herein and in the financial statements, the General
Partner is not aware of any trends or events, commitments or
uncertainties that will have a material impact on liquidity.
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, 1996 compared to the three months ended March 31, 1995
are primarily attributable to the following:
The increase in interest income from revenue bonds was primarily due to
$108,000 of interest received from the Township in Hampton Woods property
pertaining to the settlement of its loan default.
The decrease in general and administrative expenses in 1996 compared to
1995 was primarily due to the absence of legal expenses incurred in the
first quarter of 1995 with respect to the Fountain Head Apartments and
Township in Hampton Woods investments.
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 strong market with a current vacancy rate of 5%. Average
occupancy during the first quarter was 99% and the owner was able to
raise rental rates.
The Park at Landmark property, located in Alexandria, VA, operates in a
market experiencing a vacancy rate of 10%. Competing apartment buildings
are beginning to offer rental concessions to attract new tenants to
offset the effect of low demand for multifamily units. The property
expects to offer concessions on certain types of apartments. Average
occupancy during the first quarter was 90%.
Pine Club Apartments, located in Orlando, Fl, operates in a market with
a current vacancy rate of approximately 7%. The market has remained
strong due to continued employment growth in Orlando's service
industries. Average occupancy during the first quarter was 93%. Newly
constructed apartments in this market are expected to compete directly
with Pine Club Apartments; the impact of this competition is unknown at
this time.
SunBrook Apartments, located in St. Charles County, MO, a suburb of St.
Louis, consists primarily of furnished apartments and offers short-term
leases. These apartments compete primarily with other furnished
apartment units and extended-stay hotels. During the first quarter of
1996, the owner was able to raise rental rates slightly. Demand for this
type of apartment increases in the spring and summer months and decreases
in the fall and winter months. Average occupancy during the first
quarter was 79%.
Wildcreek Apartments is located in Clarkston, GA, a suburb of Atlanta.
The vacancy rate in this market, currently approximately 5%, has leveled
off due to increased purchases of single-family homes by apartment
tenants. Average occupancy during the first quarter was 97%. There is
no new apartment construction in this sub-market although construction
is ongoing in the surrounding Atlanta area.
The Township in Hampton Woods property, located in Hampton, VA, operates
in a market which is primarily dependent on the defense industry. The
market vacancy rate, currently approximately 5%, remains reasonably
stable due to the maintenance of the military population in the area.
Average occupancy during the first quarter was 93% and the owner was able
to raise rental rates. New apartments under construction in the area may
have an impact on the property in the future.
High Ridge Apartments, located in Albuquerque, NM, operates in a
weakening market experiencing a current vacancy rate of 11%. Competing
apartment buildings are beginning to offer rental concessions to attract
new tenants to offset the effect of the affordability of single-family
homes. Newly completed apartments in this market may also have an
adverse effect on the property in the future. Average occupancy during
the first quarter was 97%.
Fountain Head Apartments, located in Kansas City, MO, operates in a
market which has a vacancy rate of 5%. Average occupancy during the
first quarter was 97% and the owner was able to raise rental rates
slightly. New apartment units are under construction, but they are not
expected to adversely affect the property.
Inflation
Inflation has been consistently low during the periods presented in the
financial statements and, as a result, has not had a significant effect
on the operations of the Partnership or its properties.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
An exhibit index has been filed as part of this Report
on Page E1.
(b) Reports on Form 8-K - none
<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 15, 1996 By: /s/E. Davisson Hardman, Jr.
E. Davisson Hardman, Jr.
President
Date: May 15, 1996 By: /s/Lawrence Volpe
Lawrence Volpe
Controller
(Principal Financial and
Accounting Officer)
TEMPO-LP, INC.
Date: May 15, 1996 By: /s/E. Davisson Hardman, Jr.
E. Davisson Hardman, Jr.
President
Date: May 15, 1996 By: /s/E. Davisson Hardman, Jr.
Lawrence Volpe
Controller
(Principal Financial and
Accounting Officer)<PAGE>
<TABLE>
<CAPTION>
Exhibit Index
Quarter Ended March 31, 1996
Exhibit Sequentially
No. Description Numbered Page
<S> <S>
27 Financial Data Schedule
</TABLE>
E1
<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>
<NAME> DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
<CIK> 0000794449
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 5,354,832
<SECURITIES> 0
<RECEIVABLES> 458,047
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 110,245,020<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 109,442,345<F2>
<TOTAL-LIABILITY-AND-EQUITY> 110,245,020<F3>
<SALES> 0
<TOTAL-REVENUES> 2,094,827<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 94,216
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,000,611
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,000,611
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,000,611
<EPS-PRIMARY> .26<F5>
<EPS-DILUTED> 0
<FN>
<F1>In addition to cash and receivables, total assets include investment
in revenue bonds of $102,004,200, net deferred expenses of $1,207,762,
escrowed funds of $654,402 and other assets of $565,777.
<F2>Represents partners' capital.
<F3>Liabilities include accounts payable and other liabilities of $802,675.
<F4>Total revenue includes interest income of $2,094,827.
<F5>Represents net income per Assigned Benefit Certificate.
</FN>
</TABLE>
