UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 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
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
(Title of Class)
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
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ X ]
State the aggregate market value of the voting stock held by nonaffiliates of
the registrant. N/A
DOCUMENTS INCORPORATED BY REFERENCE
None
Page 1 of 46
<PAGE>
PART I
ITEM 1. BUSINESS.
Dean Witter/Coldwell Banker Tax Exempt Mortgage Fund, L.P. (the
"Partnership"), is a limited partnership formed in August 1986 under the
Uniform Limited Partnership Act of the State of Delaware for the purpose
of investing in a portfolio of federally tax-exempt revenue bonds. These
bonds, which are commonly known as industrial development or revenue
bonds, are issued as special obligations of various state or local
governments or their agencies or authorities. The proceeds of such bonds
were used to fund mortgage loans to finance the construction and/or
ownership of income-producing multi-family residential properties. Each
of the revenue bonds is primarily secured by the real property financed
by the mortgage loan.
TEMPO-GP Inc. (the "General Partner"), a Delaware corporation which
is wholly-owned by Dean Witter, Discover & Co. ("DWD") is the sole
general partner of the Partnership. The General Partner manages and
controls the affairs of the Partnership. The terms of the transactions
between the Partnership and the General Partner and its affiliates are
set forth in Item 13 below.
TEMPO-LP Inc. (the "Limited Partner"), a Delaware corporation which
is wholly-owned by DWD, is the sole limited partner of the Partnership.
The Limited Partner assigned its interests in the Partnership to
investors; such interests are represented by assigned benefit
certificates ("ABCs"). The Limited Partner acts as nominee or agent for
the investors with respect to matters pertaining to the Partnership. The
Limited Partner has no power to conduct any other business or investment
activity. The Partnership and the Limited Partner are sometimes
collectively referred to herein as the "Registrants".
In 1986, the Partnership issued 7,454,110 units of ABCs with gross
proceeds from the offering of $149,082,200. The offering has been
terminated and no additional ABCs will be sold.
The proceeds from the offering were used to purchase ten series of
revenue bonds which funded the development of eight multi-family
residential properties (the "Properties"). The terms of the mortgage
loans funded by the revenue bonds mirror the terms of the corresponding
revenue bonds. The mortgage loans are obligations of the respective
owners of the properties and are collateralized by first mortgages on the
properties. The revenue bonds are non-recourse with respect to the
issuers of the bonds. The revenue bonds and the related mortgage loans
and properties are described in Item 2 and the footnotes to the financial
statements in Item 8.
In order to protect the tax-exempt status of the revenue bonds, the
owners of the Properties are required to enter into certain agreements
to own, manage and operate the Properties in accordance with the
requirements of the Internal Revenue Code.
The federally tax-exempt interest may be an item of tax preference
for purposes of the federal alternative minimum tax. The Partnership may
also generate other taxable income for all investors from time to time;
however, such amounts are expected to be nominal.
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.
The Partnership considers its business to include one industry
segment, investment in federally tax-exempt revenue bonds. Financial
information regarding the Partnership is set forth in the Partnership's
financial statements in Item 8 below.
The Partnership has the right to require the issuers of the bonds
to repurchase them within approximately twelve to fifteen years after
completion of construction of the related properties. The Partnership
anticipates holding the revenue bonds for approximately fourteen to
seventeen years from inception; however, the Partnership may retain these
bonds for a longer period of time if market conditions so warrant.
The issuers of the revenue bonds also have the right to prepay the
bonds approximately eight to ten years after their issuance.
The Partnership's business is indirectly affected by competition
to the extent that Properties may be subject to competition from
neighboring properties. Further information regarding competition in the
markets where the Properties are located is set forth in Item 7,
"Management's Discussion and Analysis of Financial Conditions and Results
of Operations".
The Registrants have no employees.
All of the Registrants' business is conducted in the United
States.
<PAGE>
ITEM 2. PROPERTIES.
The Registrants' principal offices are located at Two World Trade
Center, New York, New York 10048. The Registrants have no other offices.
The following table lists the revenue bonds the Partnership has
purchased and the corresponding mortgage loans and Properties:
<TABLE>
<CAPTION>
Original Property Maturity
Bond/Loan Closing Location Occupancy Date
Property Principal date of Property at 12/31/95 of Bond/Loan
<S> <C> <C> <C> <C> <C>
Park at Landmark1 $ 34,650,000 3/12/87 Alexandria, VA 91% 6/1/08
Burlington Arboretum
Apartments 29,326,500 9/22/87 Burlington, MA 99% 9/22/11
SunBrook Apartments2 16,325,000 12/16/87 St. Charles 77% 12/1/11
County, MO
Pine Club Apartments 13,600,000 9/23/88 Orlando, FL 93% 9/1/12
Wildcreek Apartments 11,000,000 7/16/87 Clarkston, GA 97% 7/1/11
The Township in 10,800,000 11/14/88 Hampton, VA 93% 11/1/09
Hampton Woods
High Ridge Apartments 9,900,000 12/21/87 Albuquerque, NM 98% 12/1/11
Fountain Head 4,900,000 12/31/87 Kansas City, MO 98% 12/1/08
Apartments3
Total $130,501,500
1. The Partnership and an affiliate of the General Partner each own a 50% interest in the entity
which owns the property. The property consists of land and two high-rise buildings containing
396 units.
2. The Partnership and an affiliate of the General Partner each own a 50% interest in the entity
which owns the property. The property consists of land and 30 buildings containing 476 units.
3. The Partnership and Fountain Head Partners, an unaffiliated party, each own a 50% interest in
the entity which owns the property. The property consists of land and eight buildings
containing 112 units.
</TABLE>
The carrying values and the terms of the revenue bonds and the
mortgage loans are described in the notes to the financial statements in
Item 8 below.
ITEM 3. LEGAL PROCEEDINGS.
Neither the Registrants nor any of the properties in which the
Partnership has an interest is subject to any material pending legal
proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF ABC HOLDERS.
No matter was submitted during the fourth quarter of the fiscal
year to a vote of ABC holders.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S ASSIGNED BENEFIT CERTIFICATES AND
RELATED ABC HOLDER MATTERS.
An established public trading market for the ABCs does not exist,
and it is not anticipated that such a market will develop in the future.
Accordingly, information as to the market value of an ABC at any given
date is not available. However, the Partnership does allow the ABC
holders (the "Investors") to transfer their ABCs.
As of March 18, 1996, there were 8,174 Investors.
The Partnership is a limited partnership and, accordingly, does not
pay dividends. It does, however, make quarterly distributions of cash
to its partners. Pursuant to the partnership agreement, distributable
cash, as defined, is paid 98% to the Investors and 2% to the General
Partner, until the Investors have received for each year, an annual
return of 9.5%. Thereafter, net income will be distributed 90% to the
Investors and 10% to the General Partner.
Repayments of revenue bond principal will generally be distributed
100% to the Investors. Payments of base and contingent interest (see
Note 4 to the financial statements in Item 8 below) on maturity or sale
or refinancing of the bond will generally be distributed first; 98% to
the Investors and 2% to the General Partner, until the Investors have
received in the aggregate $20.00 per ABC plus distributions sufficient
to provide an average cumulative noncompounded return of 9.5% per annum;
and thereafter, 90% to the Investors and 10% to the General Partner.
During the years ended December 31, 1995 and December 31, 1994, the
Partnership did not distribute any sale or refinancing proceeds.
During the year ended December 31, 1995, the Partnership paid cash
distributions aggregating $7,321,000 with $7,174,581 distributed to the
Investors and $146,419 to the General Partner. During the year ended
December 31, 1994, the Partnership paid cash distributions aggregating
$6,465,300 with $6,335,994 distributed to the Investors and $129,306 to
the General Partner. The distributions aggregated $0.96 per ABC in 1995
and $0.85 per ABC in 1994.
On February 10, 1996, the Partnership paid the fourth quarter
distribution of $2,236,233 to the Investors ($0.30 per ABC) and $45,637
to the General Partner.
The Partnership anticipates making regular distributions to its
partners in the future.
The sole shareholder of TEMPO L.P. Inc. was DWD.
ITEM 6. SELECTED FINANCIAL DATA.
<TABLE>
The following sets forth a summary of the selected financial data for
the Partnership:
Dean Witter/Coldwell Banker Tax Exempt Mortgage Fund, L.P.
Years ended December 31, 1995, 1994, 1993, 1992, and 1991
<CAPTION>
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Total interest
revenues $8,850,629 $8,426,095 $7,566,890 $6,432,862 $5,830,989
Net income (loss) $7,559,369 $6,846,233 $(11,269,051)1 $5,097,284 $5,388,560
Net income (loss) per ABC $0.99 $0.90 $(1.48) $0.67 $0.71
Cash distributions
paid per ABC2 $0.96 $0.85 $.925 $1.00 $1.05
Total assets at
December 31 $116,437,154 $114,045,499 $109,894,827 $127,847,448 $130,572,629
1. Includes a $17.3 million loss on impairment recorded for the Park at Landmark and
Burlington Arboretum Apartments revenue bonds. See Note 4 to the Financial
Statements in Item 8.
2. Distributions paid to the Investors include a return of capital per ABC of $.925,
$.33 and $.34 for the years ended December 31, 1993, 1992 and 1991, respectively,
calculated as the excess of cash distributed per ABC over accumulated earnings
per ABC not previously distributed.
The above financial data should be read in conjunction with the financial
statements and the related notes appearing in Item 8.
</TABLE>
ITEM 7. 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.
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. The strengthening 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.
In 1995, Partnership cash flow from operations exceeded its
distributions and other cash requirements. The Partnership increased the
cash distribution rate from 4.25% to 5% beginning with the cash
distribution for the first quarter of 1995, which was paid in May 1995.
The Partnership increased the cash distribution rate to 6% beginning with
the cash distribution for the fourth quarter of 1995 which was paid in
February 1996. The Partnership expects to incur a modest cash flow
deficit in 1996 which will be funded from Partnership cash reserves.
In connection with the review of the Partnership's financial
statements by the SEC staff in 1996, the Partnership agreed that it would
account for its investments in revenue bonds as investments in debt
securities under the provisions of Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities" ("SFAS 115") effective January 1, 1994, and restated its 1995
and 1994 financial statements to reflect this change. Accordingly,
effective January 1, 1994, investments in revenue bonds are classified
and accounted for as available for sale debt securities. The Partnership
does not intend to sell the revenue bonds but, because the Partnership
has the right to, and expects to require the revenue bond issuers to
repurchase the bonds prior to their maturity, SFAS 115 requires the
Partnership to classify these investments as "available for sale,"
carried at estimated fair value, with unrealized gains and losses
reported in a separate component of partners' capital. The cumulative
effect of adopting this accounting was a decrease in partners' capital
at January 1, 1994 of approximately $2,922,089 due to unrealized holding
losses. At December 31, 1994, the net unrealized loss on revenue bonds
was $547,972. At December 31, 1995, there were net unrealized gains on
revenue bonds of $713,137. These unrealized gains and losses do not
affect the cash flow generated from property operations, distributions
to Investors, the characterization of the tax-exempt income stream or the
financial obligations under the revenue bonds.
Prior to 1994, the Partnership accounted for the investments
in revenue bonds as loans collateralized by real estate, carried at cost
less adjustments, if any. for other than-temporary impairments.
The revenue bonds and the related mortgage loans and properties
are described in Notes 4 and 5 to the financial statements in Item 8.
The payment status of each revenue bond 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 8.30%,
9.18% and 6.54%, 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. In 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 in 1996.
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 1996. The Partnership expects to begin to
receive additional base interest from Wildcreek in 1996.
During 1995, the Fountain Head property, which is owned 50%
each by the Partnership and Fountain Head Partners, an unaffiliated
party, operated at a cash flow deficit, and the owner was unable to pay
its required minimum debt service and the real estate tax escrow in full.
In addition, the property is not generating sufficient cash flow to pay
certain operating expenses on a current basis. As of December 31, 1995,
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 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.
All of the cash flow generated by the SunBrook property (which
is partly owned by the Partnership) is paid to the Partnership. The
property operated at a modest cash flow deficit in 1995 and the owner was
not able to pay its minimum debt service. Cash flow from the property
is expected to be sufficient to fully pay minimum debt service in 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 1995, the Partnership received $1,825,303 from the property; this
amount was less than required minimum debt service by $773,447. Cash
flow from the property is not expected to be sufficient to fully pay
minimum debt service in the foreseeable future.
On February 10, 1996, the Partnership paid the fourth quarter
cash distribution of $2,236,233 to the Investors ($0.30 per ABC) and
$45,637 to the General Partner.
Except as discussed above 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.
Operations
Fluctuations in the Partnership's operating results for the
years ended December 31, 1995 compared to 1994 and 1994 compared to 1993
are primarily attributable to the following:
The increase in interest income from revenue bonds in 1995
compared to 1994 was primarily due to an increase in interest received
from the Park at Landmark property. The increase in 1994 compared to
1993 was primarily due to an increase in interest received from the Park
at Landmark and SunBrook properties.
The increase in interest income from short-term investments in
1995 compared to 1994 was primarily due to higher average balances
invested as well as higher average rates in 1995.
The decrease in equity in losses from property-owning investees
in 1994 compared to 1993 was primarily due to lower depreciation charges
at the Park at Landmark property resulting from the 1993 writedown of the
property.
The decrease in general and administrative expense in 1995
compared to 1994 was primarily due to the absence in 1995 of debt
restructuring costs, and due to lower legal costs in 1995. The increase
in general and administrative expenses in 1994 compared to 1993 was
primarily due to the costs of restructuring the Burlington Arboretum debt
of approximately $255,000.
In 1993, the Partnership recorded a provision for loss on its
investments in the Park at Landmark and Burlington revenue bonds.
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 remained strong in 1995 with
a current vacancy rate of 3%. During 1995, occupancy at the property
increased from 98% to 99%. The owner raised rental rates at the property
by a total of approximately 15% during 1995. Rental rates are also
expected to increase in 1996.
The Park at Landmark property, located in Alexandria, VA,
operates in a weakening market experiencing a vacancy rate of 8%.
Competing apartment buildings are beginning to offer rental concessions
to attract new tenants to offset the effect of low demand for multifamily
units. During 1995, occupancy at the property decreased from 97% to 91%.
Effective January 1, 1995, the owner raised rental rates at the property
slightly.
Pine Club Apartments, located in Orlando, Fl, operates in a
market with a current vacancy rate of approximately 7%. The market is
strengthening due to employment growth in Orlando's service industries.
During 1995, occupancy at the property increased from 91% to 93% and the
owner was able to increase rental rates by approximately 5%. Newly
constructed apartments in this market will 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, is in a market currently experiencing a 2% vacancy
rate. However, a slow-down in single-family home sales and retrenchment
of some corporate employers in this market decreased demand for furnished
apartments at the property. During 1995, average occupancy at the
property was 85%. Effective April 1, 1995, the owner raised rental rates
at the property by approximately 10%.
Wildcreek Apartments is located in Clarkston, GA, a suburb of
Atlanta. This market, with a current vacancy rate of approximately 5%,
is beginning to level off due to increased purchases of single-family
homes by prior apartment tenants. During 1995, occupancy at the property
increased from 90% to 97% and the owner was able to increase rental rates
by 15%. 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 remains reasonably stable at a vacancy rate of 7%
due to the maintenance of the military population in the area. During
1995, occupancy at the property remained at 93%. The owner raised rental
rates by approximately 3%. New apartment 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 8%. Competing
apartment buildings are beginning to offer rental concessions to attract
new tenants to offset the effect of affordability of single-family homes.
Occupancy at the property remained at 98% during 1995 and the owner was
able to raise rental rates approximately 8%. New apartment units in this
market may have an adverse effect on the property in the future.
Fountain Head Apartments, located in Kansas City, MO, operates
in a market which has a vacancy rate of 5%. During 1995, occupancy
decreased slightly from 100% to 98%. New apartment units are under
construction, but they are not expected to adversely affect the property.
Rental rates remained stable during 1995.
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.
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
<TABLE>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
INDEX
(a) Financial Statements
<S> <C>
Independent Auditors' Report 13
Schedules of Investments at December 31, 1995 and 1994 14-17
Balance Sheets at December 31, 1995 and 1994 18
Statements of Operations for the years ended
December 31, 1995, 1994 and 1993 19
Statements of Partners' Capital for the years ended
December 31, 1995, 1994 and 1993 20
Statements of Cash Flows for the years ended
December 31, 1995, 1994 and 1993 21
Notes to Financial Statements 22-35
TEMPO-LP, INC.
Independent Auditors' Report 36
Balance Sheets at December 31, 1995 and 1994 37
Note to Balance Sheets 38
</TABLE>
All schedules other than those indicated above have been omitted because either
the required information is not applicable or the information is shown in the
financial statements or notes thereto.<PAGE>
Independent Auditors' Report
To The Partners of
Dean Witter/Coldwell Banker Tax Exempt Mortgage Fund, L.P.:
We have audited the accompanying balance sheets, including schedules of
revenue bonds, of Dean Witter/Coldwell Banker Tax Exempt Mortgage Fund,
L.P. (the "Partnership") as of December 31, 1995 and 1994, and the
related statements of operations, partners' capital, and cash flows for
each of the three years in the period ended December 31, 1995. These
financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes 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, such financial statements present fairly, in all material
respects, the financial position of Dean Witter/Coldwell Banker Tax
Exempt Mortgage Fund, L.P. as of December 31, 1995 and 1994, and the
results of its operations and its cash flows for each of the three years
in the period ended December 31, 1995 in conformity with generally
accepted accounting principles.
As discussed in Note 2, the accompanying financial statements have been
restated to account for the Partnership's investments in revenue bonds
as debt securities.
/s/Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
March 20, 1996 (June 27, 1996 as to Notes 2, 4 and 5)
<PAGE>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
SCHEDULE OF REVENUE BONDS
December 31, 1995
<TABLE>
<CAPTION>
Fair
Percentage Value
of Portfolio Maturity (Note 2)
<S> <C> <C> <C>
Burlington Arboretum Apartments
City of Burlington, MA
Housing Authority,
Series 1987, MB, 9.00% 21.8% 09/22/11 23,666,449
City of Burlington, MA
Housing Authority, Series
1989A, 9.00% .5% 09/22/11 503,533
22.3% 24,169,982
Park at Landmark
City of Alexandria, VA
MultiFamily Refunding
Revenue Bond, Series
1987A, 9.50% 16.9% 06/01/08 18,384,424
Pine Club Apartments
Orange County, FL
Multifamily Housing Revenue
Bond, Series 1988, 9.50% 12.7% 9/01/12 13,833,145
SunBrook Apartments
County of St. Charles, MO
Industrial Development
Authority Revenue Bond,
Series 1987, 9.25% 14.2% 12/01/11 15,465,596
See accompanying notes to financial statements.
/TABLE
<PAGE>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
SCHEDULE OF REVENUE BONDS (CONTINUED)
December 31, 1995
<TABLE>
<CAPTION> Fair
Percentage Value
of Portfolio Maturity (Note 2)
<S> <C> <C> <C>
Wildcreek Apartments
City of Clarkston, GA
Multifamily Housing
Revenue Bond,
Series 1987, 9.50% 10.3% 07/01/11 11,232,011
Township at Hampton Woods
Hampton, VA Redevelopment and
Housing Authority Multifamily
Mortgage Revenue Note,
Series 1988, 12.00% 9.8% 11/01/09 10,637,822
High Ridge Apartments
State of New Mexico
Mortgage Finance Authority
Multifamily Housing
Revenue Bond, Series
1987A, 9.25% 6.9% 12/01/11 7,440,190
State of New Mexico
Mortgage Finance
Authority Multifamily
Housing Revenue Bond,
Series 1987B, 9.25% 2.3% 12/01/11 2,513,575
9.2% 9,953,765
Fountain Head Apartments
Kansas City, MO Industrial
Development Authority
Multifamily Housing
Refunding Bond, Series
1987, 9.25% 4.6% 12/01/08 4,958,481
Total revenue bonds 100.0% $108,635,226
See accompanying notes to financial statements.
/TABLE
<PAGE>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
SCHEDULE OF REVENUE BONDS
December 31, 1994
<TABLE>
<CAPTION>
Fair
Percentage Value
of Portfolio Maturity (Note 2)
<S> <C> <C> <C>
Burlington Arboretum Apartments
City of Burlington, MA
Housing Authority,
Series 1987, MB, 9.00% 22.9% 09/22/11 24,604,585
City of Burlington, MA
Housing Authority, Series
1989A, 9.00% .5% 09/22/11 523,493
23.4% 25,128,078
Park at Landmark
City of Alexandria, VA
MultiFamily Refunding
Revenue Bond, Series
1987A, 9.50% 16.9% 06/01/08 18,167,816
Pine Club Apartments
Orange County, FL
Multifamily Housing Revenue
Bond, Series 1988, 9.50% 13.4% 9/01/12 14,399,343
SunBrook Apartments
County of St. Charles, MO
Industrial Development
Authority Revenue Bond,
Series 1987, 9.25% 12.4% 12/01/11 13,365,792
See accompanying notes to financial statements.
/TABLE
<PAGE>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
SCHEDULE OF REVENUE BONDS (CONTINUED)
December 31, 1994
<TABLE>
<CAPTION>
Fair
Percentage Value
of Portfolio Maturity (Note 2)
<S> <C> <C> <C>
Wildcreek Apartments
City of Clarkston, GA
Multifamily Housing
Revenue Bond,
Series 1987, 9.50% 10.5% 07/01/11 11,233,516
Township at Hampton Woods
Hampton, VA Redevelopment and
Housing Authority Multifamily
Mortgage Revenue Note,
Series 1988, 12.00% 9.7% 11/01/09 10,370,845
High Ridge Apartments
State of New Mexico
Mortgage Finance Authority
Multifamily Housing
Revenue Bond, Series
1987A, 9.25% 6.8% 12/01/11 7,259,320
State of New Mexico
Mortgage Finance
Authority Multifamily
Housing Revenue Bond,
Series 1987B, 9.25% 2.3% 12/01/11 2,452,470
9.1% 9,711,790
Fountain Head Apartments
Kansas City, MO Industrial
Development Authority
Multifamily Housing
Refunding Bond, Series
1987, 9.25% 4.6% 12/01/08 4,996,937
Total revenue bonds 100.0% $107,374,117
See accompanying notes to financial statements
/TABLE
<PAGE>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
BALANCE SHEETS
December 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 5,255,586 $ 3,736,746
Investment in revenue bonds (Notes 2 and 4) 108,635,226 107,374,117
Deferred bond selection fees, net 1,261,006 1,473,98080
Escrowed funds 741,613 727,644
Accrued interest receivable 543,723 733,012
$116,437,154 $114,045,499
LIABILITIES AND PARTNERS' CAPITAL
Excess of equity in losses of property-owning
investees over investments therein
(Notes 2 and 5) $ 5,135,109 $ 4,150,698
Accounts payable and other liabilities 865,304 957,538
Partners' capital:
Net unrealized gain (loss) on revenue bonds
available for sale (Note 2) 713,137 (547,972)
Assigned Benefit Certificates
(7,454,110 ABCs outstanding) 109,723,604 109,485,235
Total Partners' capital 110,436,741 108,937,263
$116,437,154 $114,045,499
See accompanying notes to financial statements.
</TABLE>
<TABLE>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
STATEMENTS OF OPERATIONS
Years ended December 31, 1995, 1994 and 1993
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Interest income:
Revenue bonds $8,683,309 $ 8,426,095 $ 7,491,957
Short-term investments 167,320 63,673 74,933
8,850,629 8,489,768 7,566,890
Equity in losses of property-
owning investees 926,852 907,886 1,135,497
Expenses:
General and administrative 364,408 735,649 355,047
Provision for losses on investments - - 17,345,397
364,408 735,649 17,700,444
Net income (loss) $7,559,369 $ 6,846,233 $(11,269,051)
Net income (loss) allocated to:
Limited partner $7,408,182 $ 6,709,308 $(11,043,670)
General partner 151,187 136,925 (225,381)
$7,559,369 $ 6,846,233 $(11,269,051)
Net income (loss) per Assigned
Benefit Certificate $ .99 $ .90 $ (1.48)
See accompanying notes to financial statements.
/TABLE
<PAGE>
<TABLE>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
STATEMENTS OF PARTNERS' CAPITAL
Years ended December 31, 1995, 1994 and 1993
<CAPTION>
Net
Unrealized
Gain (Loss)
Limited General on Revenue
Partner Partner Bonds Total
<S> <C> <C> <C> <C>
Partners' capital (deficit) at
December 31, 1992 $127,678,100 $ (268,983) $127,409,117
Net loss (11,043,670) (225,381) (11,269,051)
Cash distributions (6,895,050) (140,714) (7,035,764)
Partners' capital (deficit) at
December 31, 1993 109,739,380 (635,078) 109,104,302
Cumulative effect through
January 1, 1994 of
accounting change (Note 2) $(2,922,089) (2,922,089)
Net income 6,709,308 136,925 6,846,233
Cash distributions (6,335,994) (129,306) (6,465,300)
Net change in fair value of
revenue bonds available
for sale 2,374,117 2,374,117
Partners' capital (deficit) at
December 31, 1994 110,112,694 (627,459) (547,972) 108,937,263
Net income 7,408,182 151,187 7,559,369
Cash distributions (7,174,581) (146,419) (7,321,000)
Net change in fair value of
revenue bonds available
for sale 1,261,109 1,261,109
Partners' capital (deficit) at
December 31, 1995 $110,346,295 $ (622,691) $ 713,137 $110,436,741
See accompanying notes to financial statements.
/TABLE
<PAGE>
<TABLE>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
STATEMENTS OF CASH FLOWS
Years ended December 31, 1995, 1994 and 1993
<CAPTION>
1995 1994 1993
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 7,559,369 $ 6,846,233 $(11,269,051)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Equity in losses of property-owning
investees 926,852 907,886 1,135,497
Amortization of deferred bond selection fee 212,974 212,974 212,974
Decrease (increase) in accrued interest
receivable 189,289 (199,655) 179
Increase in escrowed funds (13,969) (129,796) (398,269)
(Decrease) increase in accounts payable
and other liabilities (92,234) 167,013 352,194
Writedown of investments - - 17,345,397
Net cash provided by operating activities 8,782,281 7,804,655 7,378,921
Cash flows provided by (used in) investing activities:
Investment in property-owning investees 57,559 (388,047) (474,346)
Cash flows from financing activities:
Cash distributions (7,321,000) (6,465,300) (7,035,764)
Other assets - 168,750 (168,750)
Net cash used in financing activities (7,321,000) (6,296,550) (7,204,514)
Increase (decrease) in cash and cash equivalents 1,518,840 1,120,058 (299,939)
Cash and cash equivalents at beginning
of year 3,736,746 2,616,688 2,916,627
Cash and cash equivalents at end of year $ 5,255,586 $ 3,736,746 $ 2,616,688
See accompanying notes to financial statements.
/TABLE
<PAGE>
<PAGE>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
NOTES TO FINANCIAL STATEMENTS
December 31, 1995, 1994 and 1993
1. The Partnership
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 is managed
by TEMPO-GP Inc. (the "General Partner"), a subsidiary of Dean Witter,
Discover & Co. ("DWD").
In 1986, the Partnership sold 7,454,110 units of Assigned Benefit
Certificates ("ABCs") for $149,082,200. The holders of ABC's (the
"Investors") were assigned limited partnership interests in the
Partnership by Tempo-LP Inc. (the "Limited Partner"). Tempo-LP Inc.
is a wholly-owned subsidiary of DWD and the sole limited partner in
the Partnership. No additional ABCs will be sold.
The proceeds from the offering were used to purchase federally tax-
exempt revenue bonds issued by various state or local governments or
their agencies or authorities. The proceeds of the bonds were used
to fund mortgage loans to finance the construction and/or ownership
of income-producing multi-family residential properties. Each of the
revenue bonds is secured by the real property financed by the related
mortgage loan.
2. Summary of Significant Accounting Policies
The Partnership's records are maintained on the accrual basis of
accounting for financial reporting and tax purposes. The preparation
of financial statements in conformity with generally accepted
accounting principles requires management 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.
In connection with the review of the Partnership's financial
statements by the SEC staff in 1996, the Partnership agreed that it
would account for its investments in revenue bonds as investments in
debt securities under the provisions of Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities" ("SFAS 115") effective January 1, 1994,
and restated its 1995 and 1994 financial statements to reflect this
change. Accordingly, effective January 1, 1994, investments in
revenue bonds are classified and accounted for as available for sale
debt securities. The Partnership does not intend to sell the revenue
bonds but, because the Partnership has the right to, and expects to
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
NOTES TO FINANCIAL STATEMENTS
require the revenue bond issuers to repurchase the bonds prior to
their maturity, SFAS 115 requires the Partnership to classify these
investments as "available for sale," carried at estimated fair value,
with unrealized gains and losses reported in a separate component of
partners' capital. The cumulative effect of adopting this accounting
was a decrease in partners' capital at January 1, 1994 of
approximately $2,922,089 due to unrealized holding losses. At
December 31, 1994, the net cumulative unrealized loss on revenue bonds
was $547,972. At December 31, 1995, there were cumulative net
unrealized gains on revenue bonds of $713,137. These unrealized gains
and losses do not affect the cash flow generated from property
operations, distributions to Investors, the characterization of the
tax-exempt income stream or the financial obligations under the
revenue bonds.
Prior to 1994, the Partnership accounted for the investments in
revenue bonds as loans collateralized by real estate, carried at cost
less adjustments, if any. for other than-temporary impairments.
The Partnership periodically evaluates each revenue bond to determine
whether a decline in fair value below the bond's cost basis is other-
than-temporary. Such a decline is considered to be other-than-
temporary if, based on current information and events, it is probable
that the Partnership will be unable to collect all amounts due
according to the existing contractual terms of the bonds. If a
decline is judged to be other-than-temporary, the cost basis of the
bond is written down to its estimated fair value, with the amount of
the write-down accounted for as a realized loss.
Because the revenue bonds are not readily marketable, the Partnership
estimates the fair value of each bond as the present value of its
expected cash flows using a rate of interest for similar investments.
The process of determining the fair value of the revenue bonds is
based upon projections of future economic events affecting the real
estate collateralizing the bonds such as property occupancy rates,
rental rates, operating cost inflation, market capitalization rates,
and upon market interest rates; therefore, amounts ultimately
collected from the revenue bonds may differ materially from their
carrying values. The cash flows used in this process are based on
good faith estimates and assumptions developed by the Managing General
Partner. Unanticipated events and circumstances may occur and some
assumptions may not materialize; therefore, actual results may vary
from the estimates and the variance may be material.
The Partnership acquired ownership interests in certain properties
collateralizing the bonds because the owners of such properties
defaulted on the bonds. These interests are accounted for on the
equity method. At the date of acquisition of these ownership
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
NOTES TO FINANCIAL STATEMENTS
interests, the Partnership adjusted the carrying value of the related
revenue bonds to the estimated fair value of the property if such
amount was lower than the book value of the bonds. See Note 5.
Cash and cash equivalents are carried at cost which approximates
market and consist of cash and highly liquid investments with
maturities, when purchased, of three months or less.
Bond selection fees paid to the General Partner were deferred and
allocated to individual investments purchased based on the relative
cost of the investments. The fees are amortized over the expected
life of the related investments, and the amortization expense is
netted against interest income from the investments.
Escrowed funds represent escrow payments by borrowers primarily for
real estate taxes, insurance and replacement reserves for four of the
Properties.
Net income (loss) per ABC is calculated by dividing net income (loss)
allocated to the Investors, in accordance with the Partnership
Agreement, by the number of ABCs outstanding.
No provision for income taxes has been made in the financial
statements, since any liability for such taxes is that of the
Investors rather than the Partnership.
The accounting policies used for tax reporting purposes differ from
those used for financial reporting as follows: (a) the Partnership's
initial offering costs are capitalized, (b) its unrealized gains and
losses to adjust revenue bonds to fair value, losses on other-than-
temporary impairment and provisions for uncollectible interest will
not be recognized until realized and (c) the equity method is not used
to account for the Partnership's investments in property-owning
entities. The tax basis of the Partnership's assets and liabilities
is approximately $45,723,000 higher than the amounts reported for
financial statement purposes,
Certain amounts relating to the Partnership's investment in property-
owning entities, which were previously netted against certain
investments, have been reclassified as part of the restatement of the
financial statments.
3. Partnership Agreement
The Partnership Agreement provides that, for any given year,
distributable cash, as defined, is paid 98% to the Investors and 2%
to the General Partner, until the Investors have received an annual
return of 9.5% for that year. Thereafter, net income will be
distributed 90% to the Investors and 10% to the General Partner.
Repayments of revenue bond principal will generally be distributed
100% to the Investors. Payments of base and contingent interest (see
Note 4) on maturity or sale of the bond will generally be distributed
first; 98% to the Investors and 2% to the General Partner, until the
Investors have received, in the aggregate, $20.00 per ABC plus
distributions sufficient to provide an average cumulative
noncompounded return of 9.5% per annum; and thereafter, 90% to the
Investors and 10% to the General Partner.
Distributions paid to the Investors include a return of capital per
ABC of $.925, $.33 and $.34 for the years ended December 31, 1993,
1992 and 1991, respectively, calculated as the excess of cash
distributed per ABC over accumulated earnings per ABC not previously
distributed.<PAGE>
4. Investment in Revenue Bonds
At December 31, 1995, the Partnership's portfolio of revenue bonds consisted
of the following:
<TABLE>
<CAPTION>
Par - Interest Rate -
Value Minimum Base
Revenue Bond Location of Property ($000) Rate Rate
<S> <S> <C> <C> <C>
Burlington
Arboretum Burlington, MA $29,326 5.35% 9.00%
Park at Landmark Alexandria, VA 34,650 7.50 9.50
Pine Club
Apartments Orlando, FL 13,750 7.50 9.50
SunBrook
Apartments St. Charles County, MO 16,330 7.25 9.25
Wildcreek
Apartments Clarkston, GA 11,000 7.50 9.50
The Township
in Hampton
Woods Hampton, VA 10,800 8.50 12.00
High Ridge
Apartments Albuquerque, NM 9,900 7.25 9.25
Fountain Head
Apartments Kansas City, MO 4,900 7.25 9.25
$130,656
</TABLE>
General description of bonds
The terms of each revenue bond mirror the terms of the mortgage loan
funded with proceeds from its issuance. The revenue bonds are
collateralized by first mortgages on the underlying projects, and are
non-recourse with respect to the issuers of the bonds.
As additional security for the bonds, the Partnership obtained letters
of credit from certain of the borrowers.
Each bond bears interest at a rate which is comprised of three
components: a minimum rate, a base rate, and a contingent rate.
The minimum interest rate is the contractual rate each borrower must pay
to avoid default. If a property generates cash flow from operations
after payment of interest at the minimum rate, interest is payable at the
base rate. Otherwise, interest at the base rate will be payable at
maturity of the bonds, or from proceeds from the sale or refinancing of
the property.
The terms of the Park at Landmark and Burlington Arboretum bonds limit
the base interest payable from sale or refinancing proceeds to $1,500,000
and $1,200,000, respectively.
The Partnership may also earn contingent interest, the amount of which
is based on the cash flow and sale or refinancing proceeds from the
underlying Properties. Such interest, combined with the stated interest
rates, may not exceed 16% (14% for the Burlington Arboretum bond).
There can be no assurance that the Partnership will be able to collect
any or all base or contingent interest provided for under the revenue
bonds. Interest income above the minimum rate is recorded only when the
Partnership is paid such interest in cash.
The principal of each revenue bond is payable in a lump sum at maturity.
The Partnership has the right to require the issuers of the bonds to
repurchase them within approximately twelve to fifteen years after
completion of construction of the related properties. The Partnership
anticipates holding the revenue bonds for approximately fourteen to
seventeen years from inception; however, the Partnership may retain these
bonds for a longer period of time if market conditions so warrant.
The issuers of the bonds also have the right to prepay the bonds
approximately eight to ten years after their issuance.
Net unrealized gain (loss) on revenue bonds consists of gross unrealized
gains and losses of $3,152,980 and $2,439,843, respectively, at December
31, 1995 and $2,563,666 and $3,111,638, respectively, at December 31,
1994.
As more fully described below, in 1993 the Partnership took writedowns
totaling approximately $17.3 million against the Park at Landmark and
Burlington Arboretum revenue bonds. No further writedowns were required
through December 31, 1995.
Park at Landmark
The Partnership recorded provisions for uncollectible interest of
$773,447, $1,074,591 and $1,808,589 in 1995, 1994 and 1993, respectively,
which amounts approximate accrued but unpaid interest on the revenue
bond. These amounts are recorded as a reduction of interest income from
revenue bonds.
In 1993, Landmark Acquisition Corp., the entity which owns the Park at
Landmark property, determined that it was unlikely that property cash
flows would be sufficient to enable it to recover its investment and,
therefore, reduced the carrying value of the property to $17.4 million,
its estimated fair value at December 31, 1993, and recorded a loss. The
Partnership determined that its investment was similarly impaired and,
accordingly, recorded a loss of $12,018,897, to reduce the carrying value
of the revenue bond to the estimated fair value of the property.
<PAGE>
Summarized financial information for Landmark Acquisition Corp. is as
follows (in thousands):
<TABLE>
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
Land, building and improvements, net $ 16,658 $ 17,038
Other assets 220 253
Total assets $ 16,878 $ 17,291
Long-term debt and accrued interest $ 42,810 $ 41,885
Other liabilities 129 166
Total liabilities 42,939 42,051
Capital deficiency (26,061) (24,760)
Total liabilities and capital deficiency $ 16,878 $ 17,291
Years ended December 31,
1995 1994 1993
Revenues $ 3,488 $ 3,297 $ 3,113
Operating expenses 1,464 1,749 2,064
Interest expense 2,828 2,828 2,828
Loss on impairment of real
estate - - 12,460
Depreciation 497 492 760
4,789 5,069 18,112
Net loss $(1,301) $ (1,772) $(14,999)
</TABLE>
In 1990, the Partnership acquired an interest in Landmark Acquisition
Corp. See Note 5.
SunBrook Apartments
In 1995 and 1993, the Partnership recorded provisions for uncollectible
interest of $40,214 and $350,290, respectively. In 1994, the Partnership
received approximately $42,000 more than required minimum debt service,
which was applied to reduce reserves previously taken.
Summarized financial information for DWR SB Partnership ("DWR SB"), the
entity which owns the Sunbrook property, is as follows (in thousands):
<TABLE>
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
Land, building and improvements, net $ 12,106 $ 12,380
Other assets 171 249
Total assets $ 12,277 $ 12,629
Long-term debt and accrued interest $ 17,171 $ 17,254
Other liabilities 77 95
Total liabilities 17,248 17,349
Capital deficiency (4,971) (4,720)
Total liabilities and capital deficiency $ 12,277 $ 12,629
Years ended December 31,
1995 1994 1993
Revenues $ 2,040 $ 2,071 $ 1,932
Other income 335 212 259
2,375 2,283 2,191
Operating expenses 1,015 1,057 1,304
Interest expense 1,184 1,184 1,184
Depreciation 427 416 376
2,626 2,657 2,864
Net loss $ (251) $ (374) $ (673)
</TABLE>
In 1992, the Partnership acquired an interest in DWR SB. See Note 5.
Burlington Arboretum Apartments
Burlington Arboretum Apartments, consisting of land and 312 apartments
in 16 buildings, is owned by Burlington Arboretum Limited Partnership
(the "Owner"). Because the Owner did not pay minimum interest in full
in 1991 and 1992, the Partnership drew down a total of $633,000 through
April 1993 from the letter of credit opened by the Owner as security. In
1993, the Owner paid required minimum debt service.
On May 6, 1993, the general partner of the Owner was replaced; the new
general partner committed a substantial amount of new capital, and the
Partnership agreed to attempt to modify the revenue bond and related
mortgage loan. However, the new general partner did not pay certain
taxes and other liabilities incurred prior to May 6, 1993 and, in
February 1994, the City of Burlington placed a lien on the property.
This lien represented an event of default on the revenue bond.
In March 1994, the Owner did not pay all of its minimum debt service and
required reserve payments; in response, the Partnership sent the Owner
a notice of default. Pursuant to a settlement between the Partnership
and the Owner, in April 1994, the Owner cured the defaults by paying the
March debt service shortfall and an additional $105,000 to the
Partnership. The Partnership then paid all past due taxes on behalf of
the Owner, and the tax lien was removed.
The debt was modified, effective with the September 1, 1994 payment. The
minimum interest rate was reduced from 7.25% to 5.35%, the earliest call
date was extended to 2006, and the requirement for an operating deficit
guaranty was eliminated. The base interest rate was unchanged, so the
Partnership expects to continue to receive all of the cash flow from the
property as interest.
The Partnership incurred costs of approximately $255,000 to remove the
tax lien and modify the debt; these costs were included in general and
administrative expenses in 1994.
In 1993, the Partnership determined that its investment in the revenue
bond was impaired and, accordingly, recognized a loss of $5,326,500 to
reduce the carrying value of the investment to $24,000,000, the estimated
fair value of the property at December 31, 1993.
<PAGE>
Summarized financial information for the Burlington Arboretum Limited
Partnership is as follows (in thousands):
<TABLE>
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
Land, building and improvements, net $25,994 $26,462
Other assets 1,475 1,615
Total assets $27,469 $28,077
Long-term debt, including accrued interest $31,504 $31,485
Other liabilities 936 907
Total liabilities 32,440 32,392
Capital deficiency (4,971) (4,315)
Total liabilities and capital deficiency $27,469 $28,077
Years ended December 31,
1995 1994 1993
Rental revenues $3,655 $ 3,470 $ 3,367
Other income 46 43 419
3,701 3,513 3,786
Operating expenses 1,492 1,178 1,300
Interest expense 1,981 1,996 2,238
Depreciation and amortization 884 886 921
4,357 4,060 4,459
Net loss $ (656) $ (547) $ (673)
</TABLE>
Wildcreek Apartments
In 1995, Wildcreek paid the required minimum debt service and reserve
payments in full. At December 31, 1995, the Partnership is holding
approximately $259,000 as security for the bond in a segregated cash
account.
Pine Club Apartments
Summarized financial information for the Pine Club Apartments Limited
Partnership, the owner of the property, is as follows (in thousands):
<TABLE>
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
Land, building and improvements, net $ 9,243 $ 9,922
Other assets 916 951
Total assets $10,159 $10,873
Long-term debt $13,600 $13,600
Other liabilities 1,550 1,451
Total liabilities 15,150 15,051
Capital deficiency (4,991) (4,178)
Total liabilities and capital deficiency $10,159 $10,873
Years ended December 31,
1995 1994 1993
Revenues $ 1,815 $ 1,789 $ 1,722
Operating expenses 929 810 772
Interest expense 1,020 1,020 1,020
1,949 1,830 1,792
Loss before depreciation (134) (41) (70)
Depreciation 679 679 679
Net loss $ (813) $ (720) $ (749)
</TABLE>
Cash flow deficits at the property, which approximate losses before
depreciation, have been funded by the owner.
Additional security for the bond is provided by a $500,000 letter of
credit and a $250,000 guaranty by the owner/borrowers' partners. The
guaranty is secured by a special limited partnership interest in Phase
II of the development (in which the Partnership had no prior financial
interest), and certain of the developer's fees from such development.
The General Partner has a 6% special limited partnership interest in the
Phase II development.
The letter of credit will be released when the property achieves and
maintains certain levels of cash flow and satisfies other conditions.
Township in Hampton Woods
In July 1995, the Partnership was notified that the owner of the
property, American First REIT Inc. ("AFREIT"), was merged into Mid-
America Apartment Communities, Inc. REIT, without the Partnership's
consent. This represented a loan default, and a notice of default was
sent to AFREIT. In December 1995, the Partnership negotiated a
settlement with Mid-America in which Mid-America agreed to pay $108,000
in additional contingent interest (which was received in January 1996)
and the first allowable loan prepayment date was extended to June 1997.
5. Investments in Property-Owning Investees
Park at Landmark
As a result of a default by the owner of the Park at Landmark property,
in 1990, the Partnership and an affiliate of the General Partner each
acquired a 50% ownership interest in Landmark Acquisition Corp. The
Partnership also drew $1,000,000 against the letter of credit which the
borrower had provided as additional security, and applied the funds
against the principal of the bond. The Partnership receives all of the
cash flow from the property, which consists of land and 396 apartments
in two high-rise buildings.
The Partnership includes in its equity in losses of property-owning
investees 100% of Landmark Acquisiton Corp's. operating results because
substantially all of the cash flow and other economic benefits (if any)
from this entity are expected to accrue to the Partnership.
SunBrook Apartments
SunBrook Apartments was acquired by DWR SB, a partnership owned 50% by
the Partnership and 50% by an affiliate of the General Partner, as part
of a bankruptcy settlement in May 1992. The Partnership receives all
of the cash flow from the property, which consists of land and 476
apartments in 30 buildings.
The Partnership includes in its equity in losses of property-owning
investees 100% of DWR SB's operating results because substantially all
of the cash flow and other economic benefits (if any) from this entity
are expected to accrue to the Partnership.
Fountain Head Apartments
Fountain Head Apartments, consisting of land and 112 apartments in eight
buildings, are owned by Fountain Head Acquisition Corp., which is owned
50% each by the Partnership and Fountain Head Partners, an unaffiliated
party. The Partnership accounts for its investment on the equity
method.
Pursuant to an agreement among the owners, through December 31, 1995,
the Partnership had advanced $75,000 and Fountain Head Partners had
advanced $50,000 to Fountain Head Acquisition Corp to fund debt service
deficiencies. As of December 31, 1995, Fountain Head Partners is
obligated to fund an additional $26,500 of deficiencies, if necessary.
Fountain Head Partners did not pay its share of certain necessary
building improvement costs totalling $271,000 in 1994; the Partnership
paid these costs. The Partnership and Fountain Head Partners had an
arbitration hearing in which the Partnership sought 50% reimbursement
from Fountain Head Partners; the arbitrators denied the Partnership's
request for immediate reimbursement, but permitted the Partnership to
recover approximately $85,000 of the total cost of the improvements from
the property's replacement reserve, and the remainder from the cash flow
from the property before any distributions are paid to the owners.
6. 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. The Partnership incurred
approximately $516,000 in each of 1995, 1994 and 1993 for these
services. As of December 31, 1995, the affiliate was owed approximately
$16,000 for these services.
Another affiliate of the General Partner earned fees of $104,635,
$99,512 and $125,655 for the management of the Park at Landmark property
during 1995, 1994 and 1993, respectively. As of December 31, 1995, the
affiliate was owed approximately $8,400.
7. Cash Distribution
On February 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>
Independent Auditors' Report
To the Board of Directors and
Stockholders of TEMPO-LP, Inc.:
We have audited the accompanying balance sheets of TEMPO-LP, Inc. (the
"Company") as of December 31, 1995 and 1994. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the balance sheets are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the balance sheets.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall balance sheet presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, such balance sheets present fairly, in all material
respects, the financial position of TEMPO-LP, Inc. as of December 31,
1995 and 1994, in conformity with generally accepted accounting
principles.
/s/Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
March 20, 1996
<PAGE>
<TABLE>
TEMPO-LP, INC.
BALANCE SHEETS
December 31, 1995 and 1994
<CAPTION>
ASSETS 1995 1994
<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
December 31, 1995 and 1994
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 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES.
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTS
The Partnership is a limited partnership which has no directors or
executive officers.
The directors and executive officers of both the General Partner
and Limited Partner are as follows:
Name Position
William B. Smith Chairman of the Board of Directors
E. Davisson Hardman, Jr. President and Director
Lawrence Volpe Controller, Assistant Secretary and
Director
Ronald T. Carman Secretary and Director
All of the directors have been elected to serve until the next
annual meeting of the shareholder of the General Partner and Limited
Partner or until their successors are elected and qualify. Each of the
executive officers has been elected to serve until his successor is
elected and qualifies.
William B. Smith, age 52, is a Managing Director of Dean Witter
Realty Inc. and has been with Dean Witter Realty Inc. since 1982.
He is an Executive Vice President of Dean Witter Reynolds, Inc.
E. Davisson Hardman, Jr., age 46, is a Managing Director of Dean
Witter Realty Inc. and has been with Dean Witter Realty Inc. since 1982.
Lawrence Volpe, age 48, is a Director and the Controller of Dean
Witter Realty Inc. He is a Senior Vice President and Controller of Dean
Witter Reynolds Inc., which he joined in 1983.
Ronald T. Carman, age 44, is a Director and the Secretary of Dean
Witter Realty Inc. He is a Senior Vice President and Associate General
Counsel of Dean Witter, Discover & Co. and of Dean Witter Reynolds, Inc.
which he joined in 1984.
There is no family relationship among any of the foregoing persons.
ITEM 11. EXECUTIVE COMPENSATION.
The General Partner is entitled to receive a share of cash
distributions, when and as cash distributions are made to the Limited
Partner and a share of taxable income or tax loss, if any . Descriptions
of such distributions and allocations are in Item 5 above. The General
Partner received cash distributions of $146,419, $129,306 and $140,714
during the years ended December 31, 1995, 1994 and 1993, respectively.
All of the distributions to the Limited Partner are assigned and
paid to the Investors.
Certain affiliates of the General Partner were paid certain fees
and reimbursed for certain expenses. Information concerning such fees
and reimbursements is contained in Note 6 to the financial statements in
Item 8 above.
The directors and executive officers of the General Partner and the
Limited Partner received no remuneration from the Partnership.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
(a) No person is known to the Partnership to be the beneficial
owner of more than five percent of the ABCs.
(b) The executive officers and directors of the General Partner
and the Limited Partner do not own any ABCs as of March 31, 1996.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The General Partner's share of cash distributions and income or
loss is described in Item 5 above.
All of the outstanding shares of common stock of the General
Partner and the Limited Partner are owned by Dean Witter, Discover & Co.
Additional information with respect to the directors and executive
officers and compensation of the General Partner and Limited Partner is
contained in Items 10 and 11 above.
The General Partner and its affiliates were paid certain fees and
reimbursed for certain expenses. Information concerning such fees and
reimbursements is contained in Note 6 to the financial statements in Item
8 above. The Partnership believes that the payment of fees and the
reimbursement of expenses to the General Partner and its affiliates are
on terms as favorable as would be obtained from unrelated third parties.
The Park at Landmark property is owned by Landmark Acquisition
Corp. The Partnership owns 50% of the common stock of the corporation;
an affiliate of the General Partner owns the remaining 50%.
The SunBrook Apartments property is owned by DWR SB Partnership.
The Partnership owns 50% of DWR SB Partnership; an affiliate of the
General Partner owns the remaining 50%.
The Fountain Head Apartments property is owned by Fountain Head
Acquisition Corp. The Partnership owns 50% of the corporation; an
unaffiliated third party owns the remaining 50%.
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM
8-K.
(a) Documents filed as a part of this report:
1. FINANCIAL STATEMENTS
Financial Statements of the Partnership (see Index to
Financial Statements as part of Item 8 of this Annual Report).
Financial Statements of TEMPO-LP, Inc. (see Index to Financial
Statements as part of Item 8 of this Annual Report).
2. SCHEDULES
Financial Statement Schedules of the Partnership and TEMPO-LP,
Inc. (see Index to respective Financial Statements as part of
Item 8 of this Annual Report).
3. EXHIBITS
(2) Not applicable.
(3)(a) (i) Certificate of Incorporation of TEMPO-LP, Inc.
Incorporated by reference to Exhibit 3(a) to
Registrants' Registration Statement, No 33-6216,
filed on June 4, 1986.
(ii) Certificate of Amendment of Certificates of
Incorporation of TEMPO-LP, Inc. Incorporated by
reference to Exhibit 3(a)(ii) to Pre-Effective
Amendment No. 1 to Registrants' Registration
Statement, No. 33-6216, filed on August 25, 1986.
(3)(b) Bylaws of TEMPO-LP, Inc. Incorporated by
reference to Exhibit 3(b) of Registrants'
Registration Statement, No. 33-6216, filed on
June 4, 1986.
(3)(c) Certificate of Limited Partnership of Dean
Witter/ Coldwell Banker Tax Exempt Mortgage Fund
L.P.Incorporated by reference to Exhibit 4(a)(i)
to Pre-Effective Amendment No. 1 to Registrants'
Registration Statement, No. 33-6216, filed on
August 25, 1986.
(3)(d) Form of Agreement of Limited Partnership.
Incorporated by reference to Exhibit D to
Registrants' Prospectus, dated October 8, 1986,
included in the Registrants' Registration
Statement No. 33-6216.
(4)(a) Certificate of Limited Partnership of Dean
Witter/ Coldwell Banker Tax Exempt Mortgage Fund
L.P. Incorporated by reference to Exhibit 4(a)(i)
to Pre-Effective Amendment No. 1 to Registrants'
Registration Statement, No. 33-6216, filed on
August 25, 1986.
(4)(b) Form of Assigned Benefit Certificate.
Incorporated by reference to Exhibit 4(c) to Pre-
Effective Amendment No. 1 to Registrants'
Registration Statement, No. 33-6216, filed on
August 25, 1986.
(4)(c) Revised Form of Assigned Benefit Certificate.
Incorporated by reference to Exhibit 4(c) to
Registrants' Annual Report on Form 10-K for the
fiscal year ended December 31, 1986.
(4)(d) Form of Assignment Agreement. Incorporated by
reference to Exhibit 4(d) to Registrants' Annual
Report on Form 10-K for the fiscal year ended
December 31, 1986.
(4)(e) Form of Agreement of Limited Partnership.
Incorporated by reference to Exhibit D to
Registrants' Prospectus, dated October 8, 1986,
included in the Registrants' Registration
Statement, No. 33-6216.
(9) Not applicable.
(10)(a) Mortgage bond, dated March 12, 1987, with respect
to Park at Landmark. Incorporated by reference
to Exhibit 10 (a) in Registrants' Report on Form
8-K, Commission File No. 0-15764, dated March 12,
1987.
(10)(b) Mortgage bond, dated July 16, 1987, with respect
to Wildcreek Apartments. Incorporated by
reference to Exhibit 10 (a) in Registrants'
Report on Form 8-K,Commission File No. 0-15764,
dated July 16, 1987.
(10)(c) Mortgage bond, dated September 22, 1987, with
respect to Burlington Arboretum Apartments.
Incorporated by reference to Exhibit 10 (a) in
Registrants' Report on Form 8-K,Commission File
No. 0-15764, dated September 22, 1987.
(10)(d) Mortgage bond, dated December 16, 1987, with
respect to SunBrook Apartments. Incorporated by
reference to Exhibit 10 (a) in Registrants'
Report on Form 8-K,Commission File No. 0-15764,
dated December 16, 1987.
(10)(e) Mortgage bond, dated December 21, 1987, with
respect to Highridge Apartments. Incorporated by
reference to Exhibit 10 (a) in Registrants'
Report on Form 8-K,Commission File No. 0-15764,
dated December 21, 1987.
(10)(f) Mortgage bond, dated December 31, 1987, with
respect to Fountain Head Apartments.
Incorporated by reference to Exhibit 10 (a) in
Registrants' Report on Form 8-K,Commission File
No. 0-15764, dated December 31, 1987.
(10)(g) Mortgage bond, dated September 23, 1988, with
respect to Pine Club Apartments. Incorporated by
reference to Exhibit 10 (a) in Registrants'
Report on Form 8-K,Commission File No. 0-15764,
dated September 23, 1988.
(10)(h) Mortgage bond, dated November 14, 1988, with
respect to Township in Hampton Woods Apartments.
Incorporated by reference to Exhibit 10 (a) in
Registrants' Report on Form 8-K,Commission File
No. 0-15764, dated November 14, 1988.
(10)(i) Amended mortgage bonds, dated July 29, 1994, with
respect to Burlington Arboretum Apartments.
(11) Not applicable.
(12) Not applicable.
(13) Not applicable.
(16) Not applicable.
(18) Not applicable.
(21) Subsidiaries:
Landmark Acquisition Corp., a Virginia Corporation
SBA/DW/CBTemp. Inc., a Missouri Corporation
(22) Not applicable.
(23) Not applicable.
(24) Not applicable.
(27) Financial Data Schedules.
(28) Not applicable.
(99) Not applicable.
(b) No Forms 8-K were filed by the Partnership during the last quarter
of the period covered by this report.
(d) Financial Statements Schedule
(1) Financial statements of Burlington Arboretum Limited
Partnership, an apartment complex located in Burlington,
Massachusetts. <PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrants has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
By: TEMPO-GP, Inc.
Managing General Partner
By: /s/E. Davisson Hardman, Jr. Date: June 28, 1996
E. Davisson Hardman, Jr.
President
By: /s/Lawrence Volpe Date: June 28, 1996
Lawrence Volpe
Controller
(Principal Financial and Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Partnership and in the capacities and on the dates indicated.
TEMPO-GP, Inc.
Managing General Partner
/s/William B. Smith Date: June 28, 1996
William B. Smith
Chairman of the Board of Directors
/s/E. Davisson Hardman, Jr. Date: June 28, 1996
E. Davisson Hardman, Jr.
Director
/s/Lawrence Volpe Date: June 28, 1996
Lawrence Volpe
Director
/s/Ronald T. Carman Date: June 28, 1996
Ronald T. Carman
Director
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrants has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
By: TEMPO-LP, Inc.
By: /s/E. Davisson Hardman, Jr. Date: June 28, 1996
E. Davisson Hardman, Jr.
President
By: /s/Lawrence Volpe Date: June 28, 1996
Lawrence Volpe
Controller
(Principal Financial and Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Partnership and in the capacities and on the dates indicated.
TEMPO-LP, Inc.
/s/William B. Smith Date: June 28, 1996
William B. Smith
Chairman of the Board of Directors
/s/E. Davisson Hardman, Jr. Date: June 28, 1996
E. Davisson Hardman, Jr.
Director
/s/Lawrence Volpe Date: June 28, 1996
Lawrence Volpe
Director
/s/Ronald T. Carman Date: June 28, 1996
Ronald T. Carman
Director
<PAGE>
FINANCIAL STATEMENTS AND
INDEPENDENT AUDITORS' REPORT
BURLINGTON ARBORETUM
LIMITED PARTNERSHIP
DECEMBER 31, 1995 AND 1994<PAGE>
Burlington Arboretum Limited Partnership
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C>
INDEPENDENT AUDITORS' REPORT 3
FINANCIAL STATEMENTS
BALANCE SHEETS 4
STATEMENTS OF OPERATIONS 5
STATEMENTS OF PARTNERS' DEFICIT 6
STATEMENTS OF CASH FLOWS 7
NOTES TO FINANCIAL STATEMENTS 8
SUPPLEMENTAL INFORMATION
INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTAL
INFORMATION 14
SCHEDULES OF EXPENSES 15
/TABLE
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Partners
Burlington Arboretum Limited Partnership
We have audited the accompanying balance sheets of Burlington
Arboretum Limited Partnership as of December 31, 1995 and 1994, and
the related statements of operations, partners' deficit and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility
is to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes 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
Burlington Arboretum Limited Partnership as of December 31, 1995
and 1994, and the results of its operations, the changes in
partners' deficit and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
Boston, Massachusetts
February 16, 1996
<PAGE>
<TABLE>
Burlington Arboretum Limited Partnership
BALANCE SHEETS
December 31, 1995 and 1994
<CAPTION>
1995 1994
ASSETS
<S> <C> <C>
INVESTMENT IN REAL ESTATE
Land $ 2,074,884 $ 2,074,884
Buildings, improvements and
personal property, less
accumulated depreciation of
$5,563,878 and $4,731,848 23,918,733 24,387,172
25,993,617 26,462,056
OTHER ASSETS
Cash 172,005 268,613
Tenant accounts receivable 22,741 45,068
Reserve for replacements 110,525 96,666
Security deposits funded 272,741 249,606
Prepaid expenses and other assets 95,949 102,684
Mortgage costs, net of accumulated
amortization of $714,823 and
$663,197 800,945 852,570
1,474,906 1,615,207
$27,468,523 $28,077,263
LIABILITIES AND PARTNERS' DEFICIT
LIABILITIES APPLICABLE TO INVESTMENT
IN REAL ESTATE
Mortgage payable $29,326,500 $29,326,500
Deferred interest and related
fees on mortgage payable 2,041,122 2,011,796
Advances from general partner 350,267 350,267
Advances from Tempo - GP, Inc. 114,831 114,831
Accrued mortgage interest and
service fees 136,858 147,077
31,969,578 31,950,470
OTHER LIABILITIES
Accounts payable and accrued
expenses 137,962 137,311
Accrued management fees 55,350 45,266
Prepaid rent 5,847 10,274
Security deposits payable 270,478 249,178
469,637 442,029
32,439,215 32,392,500
PARTNERS' DEFICIT (4,970,692) (4,315,237)
$27,468,523 $28,077,263
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
Burlington Arboretum Limited Partnership
STATEMENTS OF OPERATIONS
Years ended December 31, 1995 and 1994
<CAPTION>
1995 1994
<S> <C> <C>
Revenue
Rental income $ 3,715,751 $ 3,555,001
Miscellaneous income 40,662 40,901
3,756,413 3,595,902
Less: Vacancies 30,834 53,820
Tenant concessions and
employee and model
apartments 29,639 72,110
3,695,940 3,469,972
Expenses
Rental 89,766 102,417
Administrative 200,454 109,095
Maintenance 540,552 344,390
Utilities 175,816 190,067
Security - 14,977
Insurance 82,844 76,975
Management fee 118,523 104,314
Real estate taxes 254,742 235,905
1,462,697 1,178,140
2,233,242 2,291,832
Other income (expenses)
Depreciation (832,030) (815,390)
Amortization (51,626) (70,471)
Interest income 5,584 3,405
Interest expense - mortgage (1,907,980) (1,892,987)
Mortgage servicing fees (73,319) (73,316)
Program management fee (29,327) (29,327)
Interest expense - other - (492)
Other income - 39,853
(2,888,698) (2,838,725)
NET LOSS $ (655,455) $ (546,893)
See notes to financial statements
/TABLE
<PAGE>
<TABLE>
Burlington Arboretum Limited Partnership
STATEMENTS OF PARTNERS' DEFICIT
Years ended December 31, 1995 and 1994
<CAPTION>
1995 1994
<S> <C> <C>
Partners' deficit, beginning $4,315,237 $3,768,344
Net loss 655,455 546,893
Partners' deficit, ending $4,970,692 $4,315,237
See notes to financial statements
/TABLE
<PAGE>
<TABLE>
Burlington Arboretum Limited Partnership
STATEMENTS OF CASH FLOWS
Years ended December 31, 1995 and 1994
<CAPTION>
1995 1994
<S> <C> <C>
Cash flows from operating activities
Net loss $ (655,455) $ (546,893)
Adjustments to reconcile net loss to net
cash provided by operating activities
Depreciation 832,030 815,390
Amortization 51,626 70,471
Decrease (increase) in tenant accounts
receivable 22,327 (19,277)
Decrease in accounts receivable - other - 38,732
(Decrease) increase in prepaid expenses
and other assets 6,735 (20,955)
Decrease in accounts payable and accrued
expenses (82,002) (179,994)
Decrease in accrued mortgage interest
and servicing fees (10,219) (36,214)
Increase in deferred interest and related
fees on mortgage payable 29,326 29,327
Increase (decrease ) in accrued management
fees 10,084 (7,837)
Decrease in prepaid rent (4,428) (18,162)
Increase in security deposits - net (1,835) (315)
Net cash provided by operating
activities 198,189 124,273
Cash flows from investing activities
Investment in real estate (280,938) (121,348)
Increase in reserve for replacements (13,859) (41,789)
Net cash used in investing
activities (294,797) (163,137)
Cash flows from financing activities
Repayment on letter of credit - (25,000)
Advances from general partner - 130,267
Advances from Tempo-GP, Inc. - 114,831
Net cash used in financing
activities - 220,098
NET INCREASE IN CASH (96,608) 181,234
Cash, beginning 268,613 87,379
Cash, ending $ 172,005 $ 268,613
Supplemental disclosure of cash flow information
Cash paid during the year for interest $1,918,202 $1,929,202
Significant non-cash investing activity investment
in real estate included in accounts payable $ 82,653 $ -
See notes to financial statements
/TABLE
<PAGE>
Burlington Arboretum Limited Partnership
NOTES TO FINANCIAL STATEMENTS
December 31, 1995 and 1994
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Burlington Arboretum Limited Partnership was organized under the
laws of the Commonwealth of Massachusetts on July 19, 1985, for
the purpose of constructing and operating a rental housing
project. The project consists of 312 units located in
Burlington, Massachusetts and is currently operating under the
name of Burlington Arboretum. The project contains both market
rate rental units and moderate and low-income rentals.
Each building of the project has qualified and been allocated
low-income housing credits pursuant to Internal Revenue Code
Section 42 (Section 42) which regulates the use of the project as
to occupant eligibility and unit gross rent, among other
requirements. Each building of the project must meet the
provisions of these regulations during each of fifteen
consecutive years in order to remain qualified to receive the
credits.
The project's low-income housing credits are contingent on its
ability to maintain compliance with applicable sections of
Section 42. Failure to maintain compliance with occupant
eligibility, and/or unit gross rent, or to correct non-compliance
within a specified time period could result in recapture of
previously taken tax plus interest. In addition, such potential
non-compliance may require an adjustment to the contributed
capital by the limited partner.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management 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 revenue and expenses during the reporting
period. Actual results could differ from those estimates.
<PAGE>
Burlington Arboretum Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1995 and 1994
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES - Continued
Investment in Real Estate
Investment in real estate is carried at cost. Depreciation is
provided for in amounts sufficient to relate the cost of
depreciable assets to operations over their estimated service
lives using the straight-line method for financial reporting
purposes.
Mortgage Costs
Mortgage costs are amortized over the term of the mortgage using
the straight-line method.
Rental Income
Rental income is recognized as rentals become due. Rental
payments received in advance are deferred until earned. All
leases between the Partnership and tenants of the property are
operating leases.
Income Taxes
No provision or benefit for income taxes has been included in
these financial statements since the taxable income or loss
passes through to, and is reportable by, the partners
individually.
NOTE B - INVESTMENT IN REAL ESTATE
Buildings, improvements and personal property at December 31,
1995 and 1994 are summarized as follows:
<TABLE>
<CAPTION>
Category Useful Life 1995 1994
<S> <C> <C> <C>
Buildings and improvements 40 years $28,316,788 $27,970,226
Personal property 5-10 years 1,165,823 1,148,794
29,482,611 29,119,020
Less accumulated depreciation 5,563,878 4,731,848
$23,918,733 $24,387,172
/TABLE
<PAGE>
Burlington Arboretum Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1995 and 1994
NOTE C - MORTGAGE PAYABLE
The Partnership is obligated under the terms of a mortgage,
financed by the issuance of housing revenue bonds, to the
Burlington Housing Authority (a subdivision of the Commonwealth
of Massachusetts). The mortgage bears interest at the rate of 9%
(the Base Interest). Base Interest is payable monthly to the
extent of cash flow, but in no event at a rate less than 7.25%
(the Minimum Base Interest). In March 1994, the Partnership
shorted the interest payment due by approximately $45,000, which
caused the Partnership to be in default on the mortgage. On
April 28, 1994 the lender accepted the March 1994 payment as
payment in full and acknowledged that the mortgage was current.
Effective August 1, 1994, certain terms of the mortgage were
modified and the Minimum Base Interest rate was reduced from
7.25% to 5.35%.
Cumulative unpaid Base Interest up to $1,200,000 is deferred
until sale or refinancing of the project. Other unpaid Base
Interest is payable out of cash flow. Accrued Base Interest at
December 31, 1995 and 1994 was $1,847,567 and $1,847,567,
respectively. To the extent there is cash flow after the payment
of Base Interest at 9%, the Partnership is obligated to pay
additional interest, up to 20% of the excess cash flow, resulting
in a cumulative interest rate not to exceed 14%. Commencing in
1993, the Partnership will only accrue additional Base Interest
to the extent of cash flow due to the uncertainty of payment upon
maturity. During 1995 and 1994, additional Base Interest of $0
and $45,419 was incurred. The unrecorded Base Interest at
December 31, 1995 and 1994 amounted to $1,944,582 and $1,213,180,
respectively. Upon termination of the Partnership Agreement,
maturity or refinance of the mortgage, this additional Base
Interest may be required to be paid.
All unpaid principal and accrued interest are due on the earlier
of September 22, 2011 (maturity) or as noted under the bond
documents, the bond holder has the option to cause the bonds to
be prepaid on any interest payment date on or after September 22,
2003 (the First Mandatory Redemption Date).
<PAGE>
Burlington Arboretum Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1995 and 1994
NOTE C - MORTGAGE PAYABLE - Continued
In connection with the change in the interest rate, as noted
above, the First Mandatory Redemption Date would be extended from
September 22, 2003 to January 1, 2006. The final maturity date
of the bonds will remain September 22, 2011. Such acceleration
requires specification by the lender, in writing, six months
prior to such date. In addition, the bond requirement that there
be a limited operating deficit letter of credit was eliminated.
Under the terms of the mortgage agreement, the Partnership is
also obligated to pay to the lender a monthly service fee of .25%
of the bonds outstanding. During 1995 and 1994, $73,319 and
$73,316, respectively, was charged to operations. In addition,
the Partnership pays an annual program management fee of .10% of
the bonds outstanding. During 1995 and 1994, $29,327 and $29,327
was charged to operations. As of December 31, 1995 and 1994,
$193,555 and $164,229, respectively, has been accrued and is
payable to the extent of available cash flow.
Under agreements with the mortgage lender, the Partnership is
required to make monthly escrow deposits for taxes, insurance and
replacement of project assets.
The liability of the Partnership under the mortgage is limited to
the underlying value of the real estate collateral plus other
amounts deposited with the lender or trustee.
Management believes it is not practical to estimate the fair
value of the mortgage because loans with similar characteristics
are not currently available to the Partnership.
NOTE D - RELATED PARTY TRANSACTIONS
Development Fee
The Partnership owes an affiliate $1,139,900, plus interest at
10%, for a development fee incurred in 1990. Such fee is due
upon sale or refinancing of the project. Due to the uncertainty
regarding the ultimate payment, the fee and accrued interest have
not been recorded as of December 31, 1995 and 1994.
<PAGE>
Burlington Arboretum Limited Partnership
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1995 and 1994
NOTE D - RELATED PARTY TRANSACTIONS - Continued
Management Fee
The Management Agreement is with an affiliate of the general
partner, Burlington Apartments, Inc. (BAI) for a fee of 5% of
gross collections. On November 1, 1994 BAI entered into a
subagent agreement for 3% of gross collections with a non-related
management company. Total management fees charged to operations
in 1995 and 1994 were $118,523 and $104,214.
One requirement of the change in the Minimum Base Interest rate,
as described in Note C, is that the general partner's 2% fee will
be accrued only if the property pays interest on the mortgage at
a rate of 7.25% for 12 consecutive months. Since this interest
payment level was not achieved in 1995 and 1994, the 2% fee has
not been accrued. The unpaid 2% management fee at December 31,
1995 was $55,350, which represents the 1993 fee of $45,266 and
December 1995 fee of $10,084.
During 1994, in conjunction with the change in the Base Minimum
Interest rate described in Note C, the general partner advanced
$105,267 on behalf of the Partnership. In addition, the general
partner paid the final installment on the line of credit of
$25,000. At December 31, 1995 and 1994, the amounts due the
general partner were $350,267, which are noninterest bearing and
due on demand.
NOTE E - ADVANCES FROM TEMPO-GP, INC.
In conjunction with the change in the mortgage described in Note
C, the bond servicer, Tempo-GP, Inc. advanced funds to the
Partnership to pay operating expenses. At December 31, 1995 and
1994, the amounts due to Tempo-GP, Inc. were $114,831, which are
non-interest bearing and due on demand.
NOTE F - CONCENTRATION OF CREDIT RISK
The Partnership maintains its cash balances in two Banks. The
balances are insured by the Federal Deposit Insurance Corporation
up to $100,000 by each bank. As of December 31, 1995, the
uninsured portion of the cash balances held at one of the banks
was $87,268.
<PAGE>
SUPPLEMENTAL INFORMATION<PAGE>
INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTAL INFORMATION
To the Partners
Burlington Arboretum Limited Partnership
Our audits were made for the purpose of forming an opinion on
the basic financial statements taken as a whole. The supplemental
information is presented for purposes of additional analysis and is
not a required part of the basic financial statements. The
supplemental information has been subjected to the auditing
procedures applied in the audits of the basic financial statements
and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
Boston, Massachusetts
February 16, 1996<PAGE>
<TABLE>
Burlington Arboretum Limited Partnership
SCHEDULES OF EXPENSES
Years ended December 31, 1995 and 1994
<CAPTION>
1995 1994
<S> <C> <C>
Rental
Rental salaries $ 34,216 $ 40,741
Advertising 13,969 13,972
Bad debts 33,729 45,884
Miscellaneous renting expenses 7,852 1,820
$ 89,766 $102,417
Administrative
Manager's salaries $ 64,924 $ 48,876
Office salaries 62,634 3,247
Legal 3,654 17,724
Telephone 7,894 6,632
Accounting 10,350 10,000
Trustee fees 5,874 2,676
Office supplies and expense 11,231 5,437
Postage 2,045 2,642
ISC administrative 15,179 -
Consulting fees - 6,731
Miscellaneous administrative 16,669 5,130
$200,454 $109,095
Maintenance
HVAC maintenance $ 3,047 $ 3,210
Decorating contract, salaries and
supplies 177,938 66,562
Cleaning contract 48,173 39,263
Maintenance salaries 72,880 56,263
Grounds maintenance and contract 57,879 27,986
Rubbish removal 25,546 24,836
Miscellaneous maintenance 16,289 8,489
Pool salaries and expenses 13,964 12,927
Repairs - general 44,357 52,351
Repairs - painting exterior - 34,570
Repairs - roof 2,153 350
ISC Maintenance 26,608 -
Fire maintenance 5,122 5,824
Motor vehicle insurance and expenses 7,370 5,280
Snow removal 12,516 5,110
Exterminating 903 858
Recreation services and supplies 22,621 511
Security contract and supplies 3,186 -
$540,552 $344,390
</TABLE>
<PAGE>
<TABLE>
Burlington Arboretum Limited Partnership
SCHEDULES OF EXPENSES - CONTINUED
Years ended December 31, 1995 and 1994
<CAPTION>
1995 1994
<S> <C> <C>
Utilities
Water and sewer $111,681 $128,839
Electricity 59,513 46,202
Gas heat 4,622 14,716
Cable television - 310
$175,816 $190,067
/TABLE
<PAGE>
<TABLE>
Exhibit Index for Dean Witter/Coldwell Banker Realty Tax Exempt Mortgage Fund, L.P.
<CAPTION>
Exhibit Description Sequential
No. Page No.
________ ____________ __________
<S> <C>
(3)(a) (i)* Certificate of Incorporation of TEMPO-LP, Inc. Incorporated by
reference to Exhibit 3(a) to Registrants' Registration
Statement, No 33-6216, filed on June 4, 1986.
(ii)* Certificate of Amendment of Certificates of Incorporation of
TEMPO-LP, Inc. Incorporated by reference to Exhibit 3(a)(ii) to
Pre-Effective Amendment No. 1 to Registrants' Registration
Statement, No. 33-6216, filed on August 25, 1986.
(3)(b)* Bylaws of TEMPO-LP, Inc. Incorporated by reference to Exhibit
3(b) of Registrants' Registration Statement, No. 33-6216, filed
on June 4, 1986.
(3)(c)* Certificate of Limited Partnership of Dean Witter/ Coldwell
Banker Tax Exempt Mortgage Fund L.P.Incorporated by reference
to Exhibit 4(a)(i) to Pre-Effective Amendment No. 1 to
Registrants' Registration Statement, No. 33-6216, filed on
August 25, 1986.
(3)(d)* Form of Agreement of Limited Partnership. Incorporated by
reference to Exhibit D to
Registrants' Prospectus, dated October 8, 1986, included in the
Registrants' Registration Statement No. 33-6216.
(4)(a)* Certificate of Limited Partnership of Dean Witter/ Coldwell
Banker Tax Exempt Mortgage Fund L.P. Incorporated by reference
to Exhibit 4(a)(i) to Pre-Effective Amendment No. 1 to
Registrants' Registration Statement, No. 33-6216, filed on
August 25, 1986.
(4)(b)* Form of Assigned Benefit Certificate. Incorporated by
reference to Exhibit 4(c) to Pre-Effective Amendment No. 1 to
Registrants' Registration Statement, No. 33-6216, filed on
August 25, 1986.
(4)(c)* Revised Form of Assigned Benefit Certificate. Incorporated by
reference to Exhibit 4(c) to Registrants' Annual Report on Form
10-K for the fiscal year ended December 31, 1986.
(4)(d)* Form of Assignment Agreement. Incorporated by reference to
Exhibit 4(d) to Registrants' Annual Report on Form 10-K for the
fiscal year ended December 31, 1986.
(4)(e)* Form of Agreement of Limited Partnership. Incorporated by
reference to Exhibit D to Registrants' Prospectus, dated
October 8, 1986, included in the Registrants' Registration
Statement, No. 33-6216.
(10)(a)* Mortgage bond, dated March 12, 1987, with respect to Park at
Landmark. Incorporated by reference to Exhibit 10 (a) in
Registrants' Report on Form 8-K, Commission File No. 0-15764,
dated March 12, 1987.
(10)(b)* Mortgage bond, dated July 16, 1987, with respect to Wildcreek
Apartments. Incorporated by reference to Exhibit 10 (a) in
Registrants' Report on Form 8-K,Commission File No. 0-15764,
dated July 16, 1987.
(10)(c)* Mortgage bond, dated September 22, 1987, with respect to
Burlington Arboretum Apartments. Incorporated by reference to
Exhibit 10 (a) in Registrants' Report on Form 8-K,Commission
File No. 0-15764, dated September 22, 1987.
(10)(d)* Mortgage bond, dated December 16, 1987, with respect to
SunBrook Apartments. Incorporated by reference to Exhibit 10
(a) in Registrants' Report on Form 8-K,Commission File No. 0-
15764, dated December 16, 1987.
(10)(e)* Mortgage bond, dated December 21, 1987, with respect to
Highridge Apartments. Incorporated by reference to Exhibit 10
(a) in Registrants' Report on Form 8-K,Commission File No. 0-
15764, dated December 21, 1987.
(10)(f)* Mortgage bond, dated December 31, 1987, with respect to
Fountain Head Apartments. Incorporated by reference to Exhibit
10 (a) in Registrants' Report on Form 8-K,Commission File No.
0-15764, dated December 31, 1987.
(10)(g)* Mortgage bond, dated September 23, 1988, with respect to Pine
Club Apartments. Incorporated by reference to Exhibit 10 (a)
in Registrants' Report on Form 8-K,Commission File No. 0-15764,
dated September 23, 1988.
(10)(h)* Mortgage bond, dated November 14, 1988, with respect to
Township in Hampton Woods Apartments. Incorporated by
reference to Exhibit 10 (a) in Registrants' Report on Form 8-
K,Commission File No. 0-15764, dated November 14, 1988.
(10)(i) Amended mortgage bonds, dated July 29, 1994, with respect to
Burlington Arboretum Apartments.
*incorporated by reference
</TABLE>
<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
audited financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 5,255,586
<SECURITIES> 0
<RECEIVABLES> 543,723
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 116,437,154<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 110,436,471<F2>
<TOTAL-LIABILITY-AND-EQUITY> 116,437,154<F3>
<SALES> 0
<TOTAL-REVENUES> 8,850,629<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,291,260<F5>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 7,559,369
<INCOME-TAX> 0
<INCOME-CONTINUING> 7,559,369
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,559,369
<EPS-PRIMARY> .99<F6>
<EPS-DILUTED> 0
<FN>
<F1>In addition to cash and receivables, total assets include investment
in revenue bonds of $108,635,226, net deferred expenses of $1,261,006 and
escrowed funds of $741,613.
<F2>Represents partners' capital.
<F3>Liabilities include accounts payable and other liabilities of $865,304 and
excess of equity in losses of property-owning investees over investments
therein of $5,135,109.
<F4>Total revenue includes interest income of $8,850,629.
<F5>Other expenses include equity in losses of property-owning investees
of $926,852 and general and administrative expenses of $364,408.
<F6>Represents net income per Assigned Benefit Certificate.
</FN>
</TABLE>
