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 March 31, 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>
March 31,
December 31,
1998 1997
<S> <C>
<C>
ASSETS
Cash and cash equivalents $ 8,446,653 $
4,231,538
Escrowed funds 8,140,000
747,222
Accrued interest receivable and prepaid expenses
240,374 769,898
Investments in revenue bonds available for sale -
120,317,750
Deferred bond selection fee, net -
835,058
Purchaser's deposit -
6,371,135
$16,827,027
$133,272,601
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and other liabilities $ 135,290 $
1,070,312
Excess of equity in losses of property-owning investees
- - 6,579,631
over investments therein
Purchaser's deposit -
6,371,135
135,290
14,021,078
Partners' capital:
General partner (705,622)
(664,908)
Limited partner Assigned Benefit Certificates
(7,454,110 ABCs outstanding) 17,397,359
96,720,770
Net unrealized gain on revenue bonds available for sale
- - 23,195,661
Total Partners' capital 16,691,737
119,251,523
$16,827,027
$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 months ended March 31, 1998 and 1997
<CAPTION>
1998 1997
<S> <C>
<C>
Revenues:
Interest $ 802,418
$2,237,105
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
(244,396) (72,099)
35,041,226
2,165,006
General and administrative expenses 121,675
118,120
Net income $34,919,551
$2,046,886
Net income allocated to:
Limited partners $34,910,824
$2,005,948
General partner 8,727
40,938
$34,919,551
$2,046,886
Net income per Assigned Benefit Certificate $ 4.68 $
.27
See accompanying notes to financial statements.
</TABLE>
<TABLE>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
STATEMENT OF PARTNERS' CAPITAL
Three months ended March 31, 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 34,910,824 8,727 -
34,919,551
Cash distributions (114,234,235) (49,441)
- - (114,283,676)
Net change in fair value of
revenue bonds available for
sale - -
(23,195,661) (23,195,661)
Partners' capital (deficit) at
March 31, 1998 $ 17,397,359 $(705,622) $
- - $ 16,691,737
See accompanying notes to financial statements.
</TABLE>
<TABLE>
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND, L.P.
STATEMENTS OF CASH FLOWS
Three months ended March 31, 1998 and 1997
<CAPTION>
1998 1997
<S> <C>
<C>
Cash flows from operating activities:
Net income $ 34,919,551 $
2,046,886
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Equity in losses of property-owning investees
244,396 72,099
Amortization of deferred bond selection fee
835,058 53,244
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 529,524
557,329
(Increase) decrease in escrowed funds (7,392,778)
105,574
Decrease in accounts payable and other liabilities
(935,022) (14,857)
Net cash (used in) provided by operating activities
(6,282,475) 2,820,275
Cash flows provided by investing activities:
Proceeds from sale of revenue bonds and investments
in property-owning investees 124,781,266
- -
Cash flows used in financing activities:
Cash distributions (114,283,676)
(2,473,518)
Increase in cash and cash equivalents 4,215,115
346,757
Cash and cash equivalents at beginning of period
4,231,538 4,743,191
Cash and cash equivalents at end of period $ 8,446,653 $
5,089,948
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 by CAPREIT. Accordingly, the amount
remaining in such escrow fund is $8,140,000.
On February 27, 1998 the Partnership distributed
$111,811,650 ($15.00 per ABC) to the Investors from the
sales proceeds.
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
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND,
L.P.
NOTES TO FINANCIAL STATEMENTS
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.
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 substantially all of the Partnership's non-cash
assets, as 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 $250,075 for the three months ended March
31, 1997, which represented accrued but unpaid interest
on the Park at Landmark
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND,
L.P.
NOTES TO FINANCIAL STATEMENTS
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 three months ended March
31, 1998 and 1997, the Partnership incurred
approximately $105,000 and $129,000, respectively, for
these services. As of March 31, 1998, the affiliate
was owed approximately $14,000 for these services.
Another affiliate of the General Partner earned fees of
$15,655 and $25,787 for the management of the Park at
Landmark property during the three months ended March
31, 1998 and 1997, respectively.
4. Litigation
Various public partnerships sponsored by Dean Witter
Realty Inc. (including the Partnership and its Managing
General Partner) are defendants in purported class
action lawsuits pending in state and federal courts.
The complaints allege a number of claims, including
breach of fiduciary duty, fraud, misrepresentation and
related claims, and seek an accounting of profits,
compensatory and other damages and quitable relief.
The defendants intend to vigorously defend the actions.
It is impossible to predict the effect, if any, the
outcome of these actions might have on the
Partnership's financial statements.
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND,
L.P.
NOTES TO FINANCIAL STATEMENTS
On or about August 27, 1996, an Investor in the
Partnership filed a petition against the Partnership
and the General Partner. The action seeks access to
the list of Investors and Limited Partners in the
Partnership and unspecified damages for alleged
breaches of fiduciary duty by the General Partner in
connection with the refusal to provide such list. By
court order the list was provided to the plaintiff in
exchange for an agreement to maintain its
confidentiality. The Partnership and the General
Partner believe that they have good defenses to the
remainder of the action and intend vigorously to defend
it.
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 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.
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>
March 31, 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 collaterializing 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-months ended March 31, 1998 compared to the
three-months ended March 31, 1997 were attributable to
the sale of the Partnership's revenue bonds and
investments in property-owning investees. See Note 1
to the financial statements.
On February 26, 1998 the Partnership sold substantially
all of its non-cash assets. Accordingly, information
regarding the markets in which the properties are
located and the occupancy rates at the properties is
not presented.
DEAN WITTER/COLDWELL BANKER TAX EXEMPT MORTGAGE FUND,
L.P.
TEMPO-LP INC.
Inflation
Inflation has been consistently low during the periods
presented in the financial statements and, as a result,
has not had a significant effect on the operations of
the Partnership or its properties.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
An exhibit index has been filed as part
of this Report
on Page E1.
(b) Reports on Form 8-K - Report dated
February 26, 1998 reporting the sale of
substantially all of the Partnership's non-
cash assets.
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: May 15, 1998 By: /s/E. Davisson
Hardman, Jr.
E. Davisson Hardman, Jr.
President
Date: May 15, 1998 By: /s/Lawrence Volpe
Lawrence Volpe
Controller
(Principal Financial and
Accounting Officer)
TEMPO-LP, INC.
Date: May 15, 1998 By: /s/E. Davisson Hardman,
Jr. E. Davisson Hardman,
Jr.
President
Date: May 15, 1998 By: /s/Lawrence Volpe
Lawrence Volpe
Controller
(Principal Financial and
Accounting Officer)
Exhibit Index
Quarter Ended March 31, 1998
Exhibit
No. Description
27 Financial Data Schedule
E1
[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.
<TABLE>
<S> <C>
[PERIOD-TYPE] 3-MOS
[FISCAL-YEAR-END] DEC-31-1998
[PERIOD-END] MAR-31-1998
[CASH] 8,446,653
[SECURITIES] 0
[RECEIVABLES] 240,374
[ALLOWANCES] 0
[INVENTORY] 0
[CURRENT-ASSETS] 0
[PP&E] 0
[DEPRECIATION] 0
[TOTAL-ASSETS] 16,827,027<F1>
[CURRENT-LIABILITIES] 0
[BONDS] 0
[COMMON] 0
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[OTHER-SE] 16,691,737<F2>
[TOTAL-LIABILITY-AND-EQUITY] 16,827,027<F3>
[SALES] 0
[TOTAL-REVENUES] 35,041,226<F4>
[CGS] 0
[TOTAL-COSTS] 0
[OTHER-EXPENSES] 121,675
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 0
[INCOME-PRETAX] 34,919,551
[INCOME-TAX] 0
[INCOME-CONTINUING] 34,919,551
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 34,919,551
[EPS-PRIMARY] 4.68<F5>
[EPS-DILUTED] 0
<FN>
<F1>In addition to cash and receivables, total assets include escrowed funds
of $8,140,000.
<F2>Represents partners' capital.
<F3>Liabilities include accounts payable and other liabilities of $135,290.
<F4>Total revenue includes interest income of $802,418, 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>
