UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the period ended March 31, 1996 or
[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ______________to_____________
Commission File No. 33-25041
DEAN WITTER PRINCIPAL GUARANTEED FUND II L.P.
(Exact name of registrant as specified in its charter)
Delaware 13-3498819
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
c/o Demeter Management Corp.
Two World Trade Center, New York, NY 62 Fl. 10048
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 392-5454
(Former name, former address, and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
<PAGE>
<TABLE>
DEAN WITTER PRINCIPAL GUARANTEED FUND II L.P.
INDEX TO QUARTERLY REPORT ON FORM 10-Q
March 31, 1996
<CAPTION>
PART I. FINANCIAL INFORMATION
<S> <C>
Item 1. Financial Statements
Statements of Financial Condition
March 31, 1996 and December 31, 1995.....................2
Statements of Operations for the Quarters Ended
March 31, 1996 and March 31, 1995 (Unaudited)............3
Statements of Changes in Partners' Capital for
the Quarters Ended March 31, 1996 and March 31, 1995
(Unaudited)..............................................4
Statements of Cash Flows for the Quarters Ended
March 31, 1996 and March 31, 1995 (Unaudited)............5
Notes to Financial Statements (Unaudited)..............6-7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations......................................... 8-9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.................... 10
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER PRINCIPAL GUARANTEED FUND II L.P.
STATEMENTS OF FINANCIAL CONDITION
<CAPTION>
March 31, December 31,
1996 1995
$ $
ASSETS
<S> <C> <C>
Cash 4,944,939 5,224,820
Interest receivable (DWR) 21,510 23,958
Total Assets 4,966,449 5,248,778
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Redemptions payable 4,966,449 83,008
Total Liabilities 4,966,449 83,008
Partners' Capital
Limited Partners (0 and
4,494.128 Units, respectively) - 4,701,302
General Partner (0 and 444 Units) - 464,468
Total Partners' Capital - 5,165,770
Total Liabilities and Partners' Capital 4,966,449 5,248,778
NET ASSET VALUE PER UNIT - 1,046.10
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER PRINCIPAL GUARANTEED FUND II L.P.
STATEMENTS OF OPERATIONS
<CAPTION>
For the Quarters Ended March 31,
1996 1995
(Unaudited)
$ $
<S> <C> <C>
REVENUES
Trading profit (loss):
Realized - (206,559)
Net change in unrealized - 255,469
Total Trading Results - 48,910
Income (DWR) 64,237 326,779
Total Revenues 64,237 375,689
EXPENSES
Letter of credit fees 13,741 67,175
Brokerage fees (DWR) - 84,730
Management fees - 58,100
Transaction fees and costs - 30,958
Total Expenses 13,741 240,963
NET INCOME 50,496 134,726
NET INCOME ALLOCATION
Limited Partners 45,856 131,984
General Partner 4,640 2,742
NET INCOME PER UNIT
Limited Partners 10.45 6.17
General Partner 10.45 6.17
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER PRINCIPAL GUARANTEED FUND II L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For the Quarters Ended March 31, 1996 and 1995
<CAPTION>
Units of
Partnership Limited General
Interest Partners Partner Total
<S> <C> <C> <C> <C>
Partners' Capital
December 31, 1994 24,352.041 $23,308,615 $ 432,868 $23,741,483
Net Income (Unaudited) - 131,984 2,742 134,726
Redemptions (Unaudited) (1,625.661) (1,579,266) - (1,579,266)
Partners' Capital
March 31, 1995 (Unaudited) 22,726.380 $21,861,333 $ 435,610 $22,296,943
Partners' Capital
December 31, 1995 4,938.128 $4,701,302 $464,468 $5,165,770
Net Income - 45,856 4,640 50,496
Redemptions (4,938.128) (4,747,158) (469,108) (5,216,266)
Partners' Capital
March 31, 1996 0 $ 0 $ 0 $ 0
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER PRINCIPAL GUARANTEED FUND II L.P.
STATEMENTS OF CASH FLOWS
<CAPTION>
For the Quarters Ended March 31,
1995 1995
(Unaudited)
$ $
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income 50,496 134,726
Noncash item included in net income:
Net change in unrealized - (255,469)
Decrease in operating assets:
Interest receivable (DWR) 2,448 6,639
Increase (decrease) in operating liabilities:
Accrued brokerage fees (DWR) - 12,283
Accrued management fees - 8,422
Accrued transaction fees and costs - (3,330)
Net cash provided by (used for) operating activities 52,944 (90,069)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in redemptions payable 4,883,441 346,334
Redemptions of units (5,216,266) (1,579,266)
Net cash used for financing activities (332,825) (1,232,932)
Net decrease in cash (279,881) (1,323,001)
Balance at beginning of period 5,224,820 23,482,196
Balance at end of period 4,944,939 22,159,195
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
DEAN WITTER PRINCIPAL GUARANTEED FUND II L.P.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
The financial statements include, in the opinion of management, all
adjustments necessary for a fair presentation of the results of
operations and financial condition. The financial statements and
condensed notes herein should be read in conjunction with the
Partnership's December 31, 1995 Annual Report on Form 10-K.
1. Organization
Dean Witter Principal Guaranteed Fund II L.P. (the "Partnership")
is a limited partnership originally organized to engage in the
speculative trading of commodity futures contracts, commodity
options contracts and forward contracts on foreign currencies.
Demeter Management Corporation ("the General Partner") retained
Commodities Corporation (U.S.A.) N.V. ("C.C.") as trading manager
of the Partnership to make all trading decisions and retain trading
advisors.
On April 20, 1995, with the Net Asset Value per Unit of the
Partnership above $1,000, the General Partner determined it was in
the best interest of investors and the Partnership to terminate
trading and recommended that investors redeem their units. All
trading was terminated and all open positions were liquidated or
paired off on April 20, 1995.
<PAGE>
DEAN WITTER PRINCIPAL GUARANTEED FUND II L.P.
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
The Partnership has been liquidated and a final distribution was
made based on March 31, 1996 Net Asset Value per Unit of $1,056.55.
2. Related Party Transactions
The Partnership had a guaranteed redemption date of March 31, 1996
at which time each investor redeeming was guaranteed a minimum
payment of $1,000 per unit. Through the April 20, 1995 termination
of trading, the commodity broker was Dean Witter Reynolds Inc.
("DWR"). Both the General Partner and DWR are wholly owned
subsidiaries of Dean Witter, Discover & Co. The Partnership's cash
was on deposit with DWR. DWR paid interest on these funds based on
current 13-week U.S. Treasury Bill rates.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
For the Quarter Ended March 31, 1996
For the quarter ended March 31, 1996, the Partnership's total
revenues consisted entirely of interest income of $64,237. The
total expenses representing letter of credit fees for the period
were $13,741, generating net income of $50,496. The value of an
individual Unit in the Partnership increased from $1,046.10 at
December 31, 1995 to $1,056.55 at March 31, 1996. As of March 31,
1996, the Guaranteed Redemption date of the Partnership, the
General Partner determined that it was in the best interest of the
Partnership to terminate and all remaining units of the Principal
Guaranteed Fund II were redeemed at a Net Asset Value per Unit of
$1,056.55.
For the Quarter Ended March 31, 1995
For the quarter ended March 31, 1995, the Partnership's total
revenues including interest income were $375,689. During the first
quarter, the Partnership posted a gain in Net Asset Value per Unit.
Consistent with the Fund's guarantee structure, 83% of the assets
were held in reserve during the quarter while 17% of assets were
allocated to futures trading. Assets held in reserve earn interest
at current U.S. Treasury Bill rates. Assets allocated to trading
earned gains during February and March in the currency markets as
a result of a decrease in value of the U.S., Canadian and
Australian dollars versus the Japanese yen and major European
currencies such as the Swiss franc, German mark and French franc.
<PAGE>
Additional gains were recorded in the financial futures markets as
a result of trading Japanese and U.S. interest rate futures during
the quarter. Trading gains were also recorded from trading cotton
and crude oil and S&P 500 futures. Smaller losses in the metals
markets from trading both base and precious metals and in the
agricultural markets from trading soybean products, corn and wheat
futures offset a portion of overall gains for the Partnership for
the quarter. The total expenses for the period were $240,963,
generating a net gain of $134,726. The value of an individual Unit
in the Partnership increased from $974.93 at December 31, 1994 to
$981.10 at March 31, 1995.
Liquidation of Partnership
The Partnership has been liquidated and a final distribution was
made based on March 31, 1996 Net Asset Value per Unit of $1,056.55.
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
(a) 1. Listing of Financial Statements
The following financial statements and reports of independent
public accountants, all appearing in the accompanying 1996 Annual
Report to Partners, are incorporated by reference in this Form 10-
Q:
- Report of Deloitte & Touche LLP, independent auditors,
for the three months ended March 31, 1996 and the years
ended December 31, 1995, 1994 and 1993.
- Statements of Financial Condition as of March 31, 1996
and December 31, 1995.
- Statements of Operations, Changes in Partners' Capital
and Cash Flows for the three months ended March 31, 1996
and the years ended December 31, 1995, 1994 and 1993.
- Notes to Financial Statements.
With exception of the aforementioned information and the
information incorporated in Items 1 and 2, the 1996 Annual Report
to Partners is not deemed to be filed with this report.
(b) Reports on Form 8-K
Filed on April 29, 1996.
(c) Exhibits
Refer to Exhibit Index on Page E-1.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Dean Witter Principal Guaranteed
Fund II L.P. (Registrant)
By: Demeter Management Corporation
(General Partner)
May 15, 1996 By:/s/ Patti L. Behnke
Patti L. Behnke
Chief Financial Officer
The General Partner which signed the above is the only party
authorized to act for the Registrant. The Registrant has no
principal executive officer, principal financial officer,
controller, or principal accounting officer and has no Board of
Directors.
<PAGE>
EXHIBIT INDEX
ITEM Method of Filing
- -13. December 31, 1996 Annual Report
to Limited Partners (1)
(1) Filed herewith.
- E-1 -
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from Dean
Witter Principal Guaranteed Fund II L.P. and is qualified in its entirety by
references to such financial instruments.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 4,944,939
<SECURITIES> 0
<RECEIVABLES> 21,510
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,966,449
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 4,966,449<F1>
<SALES> 0
<TOTAL-REVENUES> 64,237<F2>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 13,741
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 50,496
<INCOME-TAX> 0
<INCOME-CONTINUING> 50,496
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 50,496
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Liabilities include redemptions payable of $4,966,449.
<F2>Total revenues include interest income of $64,237.
</FN>
</TABLE>
