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 June 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>
June 30, December
31,
1998 1997
<S> <C>
<C>
ASSETS
Cash and cash equivalents $ 752,162 $
4,231,538
Escrowed funds 8,140,000
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
$8,892,162
$133,272,601
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and other liabilities $ 84,416 $
1,070,312
Excess of equity in losses of property-owning investees
- - 6,579,631
over investments therein
Purchaser's deposit -
6,371,135
84,416
14,021,078
Partners' capital:
General partner (784,287)
(664,908)
Limited partner Assigned Benefit Certificates
(7,454,110 ABCs outstanding) 9,592,033
96,720,770
Net unrealized gain on revenue bonds available for sale
- - 23,195,661
Total Partners' capital 8,807,746
119,251,523
$8,892,162
$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 six months ended June 30, 1998 and 1997
<CAPTION>
Three months ended Six
months ended
June 30, June 30,
1998 1997 1998 1997
<S> <C> <C> <C>
<C>
Revenues:
Interest $53,611 $2,256,486 $
856,029 $4,493,591
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 - (40,211)
(244,396) (112,310)
53,611 2,216,275
35,094,837 4,381,281
General and administrative expenses 31,682 96,544
153,357 214,664
Net income $21,929 $2,119,731
$34,941,480 $4,166,617
Net income allocated to:
Limited partners $21,490 $2,077,337
$34,932,314 $4,083,285
General partner 439 42,394
9,166 83,332
$21,929 $2,119,731
$34,941,480 $4,166,617
Net income per Assigned Benefit
Certificate $ .01 $ .28 $
4.69 $ .55
See accompanying notes to financial statements.
</TABLE>
<TABLE>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
STATEMENT OF PARTNERS' CAPITAL
Six months ended June 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 34,932,314 9,166 -
34,941,480
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
June 30, 1998 $ 9,592,033 $(784,287) $
- - $ 8,807,746
See accompanying notes to financial statements.
</TABLE>
<TABLE>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
STATEMENTS OF CASH FLOWS
Six months ended June 30, 1998 and 1997
<CAPTION>
1998 1997
<S> <C>
<C>
Cash flows from operating activities:
Net income $ 34,941,480 $
4,166,617
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Equity in losses of property-owning investees
244,396 112,310
Amortization of deferred bond selection fee
835,058 106,487
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
444,248
Increase in escrowed funds (7,392,778)
(58,193)
Decrease in accounts payable and other liabilities
(985,896) 140,958
Net cash (used in) provided by operating activities
(6,071,046) 4,912,427
Cash flows provided by (used in) investing activities:
Proceeds from sale of revenue bonds and investments
in property-owning investees 124,781,266
- -
Other -
(23,795)
Cash flows used in financing activities:
Cash distributions (122,189,596)
(4,947,035)
Decrease in cash and cash equivalents (3,479,376)
(58,403)
Cash and cash equivalents at beginning of period
4,231,538 4,743,191
Cash and cash equivalents at end of period $ 752,162 $
4,684,788
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 is $8,140,000.
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.
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND,
L.P.
Notes to Financial Statements
The Partnership's records are maintained on the accrual
basis of accounting for financial reporting and tax
purposes.
Net income per Assigned Benefit Certificate ("ABC") is
calculated by dividing net income allocated to the
Investors, in accordance with the Partnership
Agreement, by the number of ABCs outstanding.
In the opinion of management, the accompanying
financial statements, which have not been audited,
include all adjustments 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 six months ended June 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.
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND,
L.P.
Notes to Financial Statements
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 six months ended June
30, 1998 and 1997, the Partnership incurred
approximately $121,000 and $258,000, respectively, for
these services. As of June 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 six months ended June 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 have thirty days during which
to file a notice of appeal from the Court's order; the
Partnership does not know whether they intend to do so.
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.
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND,
L.P.
Notes to Financial Statements
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>
June 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
See accompanying note.
</TABLE>
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 six-month periods ended June 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 July 17, 1998, the Delaware Chancery Court
granted the defendants' motion to dismiss the
complaint in the Consolidated Action.
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: August 13, 1998 By: /s/E. Davisson
Hardman, Jr.
E. Davisson Hardman, Jr.
President
Date: August 13, 1998 By: /s/Charles M.
Charrow
Charles M. Charrow
Controller
(Principal Financial and
Accounting Officer)
TEMPO-LP, INC.
Date: August 13, 1998 By: /s/E. Davisson Hardman,
Jr. E. Davisson Hardman,
Jr.
President
Date: August 13, 1998 By: /s/Charles M. Charrow
Charles M. Charrow
Controller
(Principal Financial and
Accounting Officer)
Exhibit Index
Quarter Ended June 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 752,162
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 8,892,162<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 8,807,746<F2>
<TOTAL-LIABILITY-AND-EQUITY> 8,892,162<F3>
<SALES> 0
<TOTAL-REVENUES> 35,094,837<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 153,357
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 34,941,480
<INCOME-TAX> 0
<INCOME-CONTINUING> 34,941,480
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 34,941,480
<EPS-PRIMARY> 4.69<F5>
<EPS-DILUTED> 0
<FN>
<F1>In addition to cash, total assets include escrowed funds of $8,140,000.
<F2>Represents partners' capital.
<F3>Liabilities include accounts payable and other liabilities of $84,416.
<F4>Total revenue includes interest income of $856,029, 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>
