5
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the period ended September 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________.
Commission File Number: 0-15764
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
TEMPO-LP, INC.
(Exact name of registrant as specified in governing instrument)
Dean Witter/Coldwell Banker
Tax
Exempt Mortgage Fund, L.P.
Delaware 58-1710934
(State of organization) (IRS Employer
Identification No.)
TEMPO-LP, Inc.
58-1710930
(IRS Employer Identification
No.)
2 World Trade Center, New York, NY 10048
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212)
392-1054
Former name, former address and former fiscal year, if changed
since last report: not applicable
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
<TABLE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
BALANCE SHEETS
<CAPTION>
September 30,
December 31,
1998 1997
<S> <C>
<C>
ASSETS
Cash and cash equivalents $ 740,997 $
4,231,538
Escrowed funds 8,294,268
747,222
Accrued interest receivable and prepaid expenses -
769,898
Investments in revenue bonds available for sale -
120,317,750
Deferred bond selection fee, net -
835,058
Purchaser's deposit -
6,371,135
$9,035,265
$133,272,601
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and other liabilities $ 87,319 $
1,070,312
Excess of equity in losses of property-owning investees
- - 6,579,631
over investments therein
Purchaser's deposit -
6,371,135
87,319
14,021,078
Partners' capital:
General partner (781,483)
(664,908)
Limited partner Assigned Benefit Certificates
(7,454,110 ABCs outstanding) 9,729,429
96,720,770
Net unrealized gain on revenue bonds available for sale
- - 23,195,661
Total Partners' capital 8,947,946
119,251,523
$9,035,265
$133,272,601
See accompanying notes to financial statements.
</TABLE>
<TABLE>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
STATEMENTS OF OPERATIONS
Three and nine months ended September 30, 1998 and 1997
<CAPTION>
Three months ended Nine
months ended
September 30, September
30,
1998 1997 1998 1997
<S> <C> <C> <C>
<C>
Revenues:
Interest $ 165,433 $2,857,480 $
1,021,462 $7,351,071
Gain on sale of revenue bonds - -
23,615,266 -
Gain on sale of investments in
Property-owning investees - -
10,867,938 -
Equity in losses of property-
owning investees - (524,277)
(244,396) (636,587)
165,433 2,333,203
35,602,270 6,714,484
General and administrative expenses 25,233 136,019
178,590 350,683
Net income $140,200 $2,197,184
$35,081,680 $6,363,801
Net income allocated to:
Limited partners $137,396 $2,153,240
$35,069,710 $6,236,525
General partner 2,804 43,944
11,970 127,276
$140,200 $2,197,184
$35,081,680 $6,363,801
Net income per Assigned Benefit
Certificate $ .01 $ .29 $
4.70 $ .84
See accompanying notes to financial statements.
</TABLE>
<TABLE>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
STATEMENT OF PARTNERS' CAPITAL
Nine months ended September 30, 1998
<CAPTION>
Net
Unrealized
Gain on
Limited General Revenue
Partner Partner Bonds Total
<S> <C> <C> <C>
<C>
Partners' capital (deficit) at
December 31, 1997 $ 96,720,770 $(664,908) $
23,195,661 $ 119,251,523
Net income 35,069,710 11,970 -
35,081,680
Cash distributions (122,061,051) (128,545)
- - (122,189,596)
Net change in fair value of
revenue bonds available for
sale - -
(23,195,661) (23,195,661)
Partners' capital (deficit) at
September 30, 1998 $ 9,729,429 $(781,483) $
- - $ 8,947,946
See accompanying notes to financial statements.
</TABLE>
<TABLE>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
STATEMENTS OF CASH FLOWS
Nine months ended September 30, 1998 and 1997
<CAPTION>
1998 1997
<S> <C>
<C>
Cash flows from operating activities:
Net income $ 35,081,680 $
6,363,801
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Equity in losses of property-owning investees
244,396 636,587
Amortization of deferred bond selection fee
835,058 159,731
Gain on sale of revenue bonds (23,615,266)
- -
Gain on sale of investments in property-owning investees
(10,867,938) -
Decrease in accrued interest receivable and
prepaid expenses 769,898
557,329
Increase in escrowed funds (7,547,046)
(157,495)
(Decrease) increase in accounts payable and other
liabilities (982,993)
219,283
Net cash (used in) provided by operating activities
(6,082,211) 7,779,236
Cash flows provided by (used in) investing activities:
Proceeds from sale of revenue bonds and investments
in property-owning investees 124,781,266
- -
Other -
(78,980)
Cash flows used in financing activities:
Cash distributions (122,189,596)
(7,419,064)
(Decrease) increase in cash and cash equivalents
(3,490,541) 281,192
Cash and cash equivalents at beginning of period
4,231,538 4,743,191
Cash and cash equivalents at end of period $ 740,997 $
5,024,383
See accompanying notes to financial statements.
</TABLE>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
Notes to Financial Statements
1. The Partnership, Basis of Presentation and Accounting
Policies
Dean Witter/Coldwell Banker Tax Exempt Mortgage Fund, L.P.
(the "Partnership") is a limited partnership organized under
the laws of the State of Delaware on August 20, 1986.
On February 26, 1998, the Partnership sold substantially all
of its non-cash assets to an unaffiliated party for an
aggregate sale price of $127,000,000.
Pursuant to the sales agreements, the Partnership was
required to deposit into escrow $8,890,000, for a period of
nine months, for the purpose of satisfying any and all
claims for indemnification against the Partnership. The
escrow shall be released to the Partnership upon the
expiration of that time period, except for amounts subject
to claims made prior to expiration of such period. Amounts
subject to claims shall be disbursed from such escrow
account pursuant to the resolution of such claims by a court
of competent jurisdiction or by agreement between the
Partnership and the purchaser.
At closing, the Partnership received approximately $111
million in cash, representing the sales price net of the
Purchaser's deposit, closing costs, and the escrow fund
described in the preceding paragraph.
At closing, pursuant to the agreements, $750,000 was paid
from the escrow to settle a claim for indemnification.
Accordingly, the amount remaining in such escrow fund at
September 30, 1998 was $8,294,268, which includes interest
earned of $154,268.
Pursuant to the Partnership's Agreement of Limited
Partnership, the sale effectuated the dissolution of the
Partnership and, accordingly, the Partnership is in the
process of winding up its affairs. After the final
distribution of remaining net cash proceeds from the sale
and any other remaining cash from operations or reserves,
the Partnership will terminate.
The Partnership's records are maintained on the accrual
basis of accounting for financial reporting and tax
purposes.
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
Notes to Financial Statements
Net income per Assigned Benefit Certificate ("ABC") is
calculated by dividing net income allocated to the
Investors, in accordance with the Partnership Agreement, by
the number of ABCs outstanding.
In the opinion of management, the accompanying financial
statements, which have not been audited, include all
adjustments necessary to present fairly the results for the
interim periods. Except for the gain on sale of assets
described above, such adjustments consist only of normal
recurring accruals.
These financial statements should be read in conjunction
with the annual financial statements and notes thereto
included in the Partnership's annual report on Form 10-K
filed with the Securities and Exchange Commission for the
year ended December 31, 1997.
The Partnership adopted Financial Accounting Standards Board
Statement No. 130, "Reporting Comprehensive Income" and
Statement No. 131, "Disclosures about Segments of an
Enterprise and Related Information" during the first quarter
of 1998. Adoption of these standards had no impact on the
Partnership's computation or presentation of net income per
Unit of Limited Partnership interest or other disclosures.
2. Investment in Revenue Bonds
The Partnership recognized provisions for uncollectible
interest of $644,095 for the nine months ended September 30,
1997, which represented accrued but unpaid interest on the
Park at Landmark revenue bond in 1997. This amount was
recorded as a reduction of interest income from revenue
bonds.
The amortized cost basis of the revenue bonds was
$97,122,089 at December 31, 1997. Net unrealized gain on
revenue bonds consisted of gross unrealized gains of
$23,195,661.
3. Related Party Transactions
An affiliate of the General Partner performs administrative
functions, processes investor transactions and prepares tax
information for the Partnership and, prior to their sale,
was the servicer of the revenue bonds. For the nine months
ended September 30, 1998 and 1997, the Partnership incurred
approximately $134,000 and $386,000, respectively,
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
Notes to Financial Statements
for these services. As of September 30, 1998, the affiliate
was owed approximately $5,000 for these services.
Another affiliate of the General Partner earned fees of
$15,655 and $52,175 for the management of the Park at
Landmark property during the nine months ended September 30,
1998 and 1997, respectively.
4. Litigation
Various public partnerships sponsored by Realty (including
the Partnership and its Managing General Partner) were
defendants in a class action lawsuit. On July 17, 1998, the
Delaware Chancery Court granted the defendants' motion to
dismiss the complaint in the lawsuit. The Plaintiffs filed
a notice of appeal from the Court's order.
In May 1998, the Partnership and the General Partner
settled, on favorable terms, the action filed by David
Johnson, an ABC Holder, on or about August 27, 1996 in the
Circuit Court of Jackson County, Missouri at Kansas City.
The Partnership did not bear any portion of the settlement.
5. Cash Distributions
On February 11, 1998, the Partnership paid the fourth
quarter cash distribution of $2,422,585 to the Investors
($0.325 per ABC) and $49,441 to the General Partner.
On February 27, 1998 the Partnership distributed
$111,811,650 ($15.00 per ABC) to the Investors from the
proceeds from the sale of its non-cash assets.
On May 11, 1998, the Partnership made a cash distribution
from reserves of $3,876,137 to the Investors ($0.52 per ABC)
and $79,105 to the General Partner.
On June 9, 1998 the Partnership distributed $3,950,678
($0.53 per ABC) to the Investors from reserved sales
proceeds.
The Partnership expects to distribute the remaining net cash
proceeds of the sale and any other remaining cash from
operations or reserves upon winding up its affairs by
December 31, 1998.
<TABLE>
TEMPO-LP INC.
Balance Sheets
<CAPTION>
September 30, December
31,
1998 1997
<S> <C> <C>
ASSETS
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
</TABLE>
See accompanying note.
TEMPO-LP INC.
Note To Balance Sheets
1. Organization
TEMPO-LP, Inc. (the "Corporation"), was formed in April 1986
to be the limited partner of the Dean Witter/Coldwell Banker
Tax Exempt Mortgage Fund, L.P. (the "Partnership"). The
Partnership issued limited partnership interests to the
Corporation, which in turn assigned those limited
partnership interests to investors. Investors received
assigned benefit certificates to represent the limited
partnership interests assigned to them. The Corporation has
had no activity since assignment of the limited partnership
interests in 1986.
The Corporation's capital stock is owned by Morgan Stanley
Dean Witter & Co.
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
TEMPO-LP INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND
RESULTS OF OPERATIONS
Liquidity and Capital Resources
The Partnership raised $149,082,200 in a public offering of
7,454,110 ABCs which was terminated in 1987. The
Registrants have no plans to raise additional capital.
The Partnership purchased ten series of revenue bonds, the
proceeds of which funded the development of eight multi-
family residential properties (the "Properties").
One of the revenue bonds was sold in October 1997. On
February 26, 1998, the Partnership sold the remaining
revenue bonds and its ownership interests in the properties
collateralizing certain bonds. Pursuant to the
Partnership's Agreement of Limited Partnership, the sale
effectuated the dissolution of the Partnership and,
accordingly, after the final distribution of remaining net
cash proceeds from the sale and any other remaining cash
from operations or reserves, the Partnership will terminate.
See Note 1 to the financial statements.
Operations
Fluctuations in the Partnership's operating results for the
three- and nine-month periods ended September 30, 1998
compared to 1997 were attributable to the sale of the
Partnership's revenue bonds and investments in property-
owning investees.
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.
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
TEMPO-LP INC.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
In May 1998, the Partnership and the General
Partner settled, on favorable terms, the action
filed by David Johnson, an ABC Holder, on or about
August 27, 1996 in the Circuit Court of Jackson
County, Missouri at Kansas City. The Partnership did
not bear any portion of the settlement.
On August 14, 1998, the plaintiff in the
Consolidated Action filed a notice of appeal from
the order of the Delaware Chancery Court which
granted the defendants' motion to dismiss the
complaint.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
An exhibit index has been filed as part of
this Report
on Page E1.
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
TEMPO-LP INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrants have duly caused this report to be
signed on their behalf by the undersigned thereunto duly
authorized.
DEAN WITTER/COLDWELL BANKER
TAX EXEMPT MORTGAGE FUND, L.P.
By: TEMPO-GP, INC.
Managing General Partner
Date: November 16, 1998 By: /s/E. Davisson Hardman,
Jr.
E. Davisson Hardman, Jr.
President
Date: November 16, 1998 By: /s/Charles M.
Charrow
Charles M. Charrow
Controller
(Principal Financial and
Accounting Officer)
TEMPO-LP, INC.
Date: November 16, 1998 By: /s/E. Davisson Hardman,
Jr. E.
Davisson Hardman, Jr.
President
Date: November 16, 1998 By: /s/Charles M. Charrow
Charles M. Charrow
Controller
(Principal Financial and
Accounting Officer)
Exhibit Index
Quarter Ended September 30, 1998
Exhibit
No. Description
27 Financial Data Schedule
E1
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Registrant is a limited partnership which invests in federally tax-exempt
revenue bonds, which financed construction and/or ownership of multi-
family residential properties. In accordance with industry practice, its
balance sheet is unclassified. For full informaiton, refer to the
accompanying unaudited financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 740,997
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 9,035,265<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 8,947,946<F2>
<TOTAL-LIABILITY-AND-EQUITY> 9,035,265<F3>
<SALES> 0
<TOTAL-REVENUES> 35,602,270<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 178,590
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 35,081,680
<INCOME-TAX> 0
<INCOME-CONTINUING> 35,081,680
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 35,081,680
<EPS-PRIMARY> 4.70<F5>
<EPS-DILUTED> 0
<FN>
<F1>In addition to cash, total assets include escrowed funds of $8,294,268.
<F2>Represents partners' capital.
<F3>Liabilities include accounts payable and other liabilities of $87,319.
<F4>Total revenue includes interest income of $1,021,462, gain on sale of
assets of $34,483,204 and equity in losses of property-owning investees of
$244,396.
<F5>Represents net income per Assigned Benefit Certificate.
</FN>
</TABLE>
