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 number 33-80146
DEAN WITTER SPECTRUM TECHNICAL L.P.
(Exact name of registrant as specified in its charter)
Delaware 13-3782231
(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 SPECTRUM TECHNICAL 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 (Unaudited) and December 31, 1995...........2
Statements of Operations for the Quarters Ended
March 31, 1996 and 1995 (Unaudited)........................3
Statements of Changes in Partners' Capital for
the Quarters Ended March 31, 1996 and 1995 (Unaudited).......4
Statements of Cash Flows for the Quarters Ended
March 31, 1996 and 1995 (Unaudited)..........................5
Notes to Financial Statements (Unaudited)................. 6-9
tem 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations............................................10-13
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K...................... 14
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER SPECTRUM TECHNICAL L.P.
STATEMENTS OF FINANCIAL CONDITION
<CAPTION>
March 31, December 31,
1996 1995
$ $
(Unaudited)
ASSETS
<S> <C> <C>
Equity in Commodity futures trading accounts:
Cash 64,386,400 52,705,410
Net unrealized gain on open contracts 3,518,179 4,086,548
Total Trading Equity 67,904,579 56,791,958
Subscriptions receivable 3,524,466 3,091,196
Interest receivable (DWR) 215,067 192,688
Total Assets 71,644,112 60,075,842
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Accrued brokerage commissions (DWR) 485,347 387,839
Redemptions payable 421,804 184,326
Accrued management fees 221,873 177,298
Total Liabilities 1,129,024 749,463
Partners' Capital
Limited Partners (6,112,584.397 and
5,105,307.329 Units, respectively) 69,805,530 58,726,495
General Partner (62,133.129 and
52,150.079 Units, respectively) 709,558 599,884
Total Partners' Capital 70,515,088 59,326,379
Total Liabilities and Partners' Capital 71,644,112 60,075,842
NET ASSET VALUE PER UNIT 11.42 11.50
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER SPECTRUM TECHNICAL L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
For the Quarters Ended March 31,
1996 1995
$ $
<S> <C> <C>
REVENUES
Trading profit:
Realized 1,441,709 1,057,577
Net change in unrealized (568,369) 2,255,937
Total Trading Results 873,340 3,313,514
Interest Income (DWR) 617,547 176,506
Total Revenues 1,490,887 3,490,020
EXPENSES
Brokerage commissions (DWR) 1,397,737 374,683
Management fees 638,965 171,284
Incentive fees 12,659 348,332
Total Expenses 2,049,361 894,299
NET INCOME (LOSS) (558,474) 2,595,721
NET INCOME (LOSS) ALLOCATION
Limited Partners (553,148) 2,573,889
General Partner (5,326) 21,832
NET INCOME (LOSS) PER UNIT
Limited Partners (.08) 1.34
General Partner (.08) 1.34
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER SPECTRUM TECHNICAL L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For the Quarters Ended March 31, 1996 and 1995
(Unaudited)
<CAPTION>
Units of
Partnership Limited General
Interest Partners Partner Total
<S> <C> <C> <C> <C>
Partners' Capital
December 31, 1994 1,526,204.420 $14,771,789 $159,265 $14,931,054
Continuous Offering 650,655.368 6,689,040 - 6,689,040
Net Income - 2,573,889 21,832 2,595,721
Partners' Capital
March 31, 1995 2,176,859.788 $24,034,718 $181,097 $24,215,815
Partners' Capital
December 31, 1995 5,157,457.408 $58,726,495 $599,884 $59,326,379
Continuous Offering 1,086,476.234 12,433,034 115,000 12,548,034
Net Loss - (553,148) (5,326) (558,474)
Redemptions (69,216.116) (800,851) - (800,851)
Partners' Capital
March 31, 1996 6,174,717.526 $69,805,530 $709,558 $70,515,088
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER SPECTRUM TECHNICAL L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
For the Quarters Ended March 31,
1996 1995
$ $
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income (loss) (558,474) 2,595,721
Noncash item included in net income (loss):
Net change in unrealized 568,369 (2,255,937)
Increase in operating assets:
Interest receivable (DWR) (22,379) (30,582)
Increase in operating liabilities:
Accrued brokerage commissions (DWR) 97,508 51,468
Accrued management fees 44,575 23,529
Incentive fees payable - 202,950
Net cash provided by operating activities 129,599 587,149
CASH FLOWS FROM FINANCING ACTIVITIES
Continuous offering 12,548,034 6,689,040
Increase in subscriptions receivable (433,270) (43,908)
Increase in redemptions payable 237,478 -
Redemptions of Units (800,851) -
Net cash provided by financing activities 11,551,391 6,645,132
Net increase in cash 11,680,990 7,232,281
Balance at beginning of period 52,705,410 11,829,496
Balance at end of period 64,386,400 19,061,777
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
DEAN WITTER SPECTRUM TECHNICAL 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 Spectrum Technical L.P. (the "Partnership") is a
limited partnership organized to engage in the speculative trading
of futures and forward contracts, options on future contracts and
on physical commodities, and other commodity interests, including
foreign currencies, financial instruments, precious and industrial
metals, energy products and agriculturals. Demeter Management
Corporation ("the General Partner") has retained Campbell & Company
Inc., Chesapeake Capital Corp. and John W. Henry & Co. Inc. as the
trading advisors of the Partnership. Both the General Partner and
the commodity broker Dean Witter Reynolds Inc. ("DWR") are wholly
owned subsidiaries of Dean Witter, Discover & Co.
2. Related Party Transactions
The Partnership's cash is on deposit with DWR in commodity
trading accounts to meet margin requirements as needed. DWR pays
interest on these funds based on prevailing U.S. Treasury Bill
rates. Brokerage expenses incurred by the Partnership are paid to
DWR.
<PAGE>
DEAN WITTER SPECTRUM TECHNICAL L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. Financial Instruments
The Partnership trades futures, forward contracts and related
instruments in interest rates, stock indices, commodities,
currencies, petroleum and precious metals. Futures and forwards
represents contracts for delayed delivery of an instrument at a
specified date and price. Risk arises from changes in the value of
these contracts and the potential inability of counterparties to
perform under the terms of the contracts. There are numerous
factors which may significantly influence the market value of these
contracts, including interest rate volatility. At March 31, 1996
open contracts were:
Contract or
Notional Amount
$
Exchange-Traded Contracts
Financial Futures:
Commitments to Purchase 26,334,000
Commitments to Sell 205,746,000
Foreign Futures:
Commitments to Purchase 68,713,000
Commitments to Sell 8,406,000
Commodity Futures:
Commitments to Purchase 42,066,000
Commitments to Sell 98,438,000
Off-Exchange-Traded Forward
Currency Contracts
Commitments to Purchase 17,466,000
Commitments to Sell 31,126,000
A portion of the amounts indicated as off-balance-sheet risk in
forward currency contracts is due to offsetting forward commitments
to purchase and to sell the same currency on the same date in the
future. These commitments are economically offsetting, but are not
offset in the forward market until the settlement date.
<PAGE>
DEAN WITTER SPECTRUM TECHNICAL L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The unrealized gain on open contracts is reported as a component of
"Equity in Commodity futures trading accounts" on the Statement of
Financial Condition and totaled $3,518,179 at March 31, 1996. Of
this amount, $3,275,259 was related to exchange-traded futures
contracts and $242,920 related to off-exchange-traded forward
currency contracts.
Exchange-traded futures contracts held by the Partnership at March
31, 1996 mature through March 1997. Off-exchange-traded forward
currency contracts held at March 31, 1996 mature through June 1996.
The contract amounts in the above table represent the Partnership's
extent of involvement in the particular class of financial
instrument, but not the credit risk associated with counterparty
non-performance. The credit risk associated with these instruments
is limited to the amounts reflected in the partnership's Statements
of Financial Condition.
The Partnership also has credit risk because the sole counterparty,
with respect to most of the Partnership's assets, is DWR.
Exchange-traded futures contracts are marked to market on a daily
basis, with variations in value settled on a daily basis. DWR, as
the futures commission merchant for all of the Partnership's
exchange-traded futures contracts, is required pursuant to
regulations of the Commodity Futures Trading Commission to
<PAGE>
DEAN WITTER SPECTRUM TECHNICAL L.P.
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
segregate from its own assets and for the sole benefit of its
commodity customers, all funds held by DWR with respect to
exchange-traded futures contracts including an amount equal to the
net unrealized gains on all open futures contracts which funds
totaled $67,661,659 at March 31, 1996. With respect to the
Partnership's off-exchange-traded forward currency contracts, there
are no daily settlements of variations in value nor is there any
requirement that an amount equal to the net unrealized gain on open
forward contracts be segregated. With respect to those off-
exchange-traded forward currency contracts, the Partnership is at
risk to the ability of DWR, the counterparty on all of such
contracts, to perform.
For the quarter ended March 31, 1996, the average fair value of
financial instruments held for trading purposes was as follows:
Assets Liabilities
$ $
Exchange-Traded Contracts:
Financial Futures 75,772,000 96,820,000
Commodity Futures 59,037,000 8,918,000
Foreign Futures 89,629,000 50,420,000
Off-Exchange-Traded Forward
Currency Contracts 19,639,000 43,092,000
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity - The Partnership's assets are on deposit in separate
commodity interest trading accounts with DWR and are used by the
Partnership as margin to engage in commodity futures, forward
contracts on foreign currencies and other commodity interest
trading. DWR holds such assets in either designated depositories
or in securities approved by the Commodity Futures Trading
Commission for investment of customer funds. The Partnership's
assets held by DWR may be used as margin solely for the
Partnership's trading. Since the Partnership's sole purpose is to
trade in commodity futures contracts, forward contracts on foreign
currencies and other commodity interests, it is expected that the
Partnership will continue to own such liquid assets for margin
purposes.
The Partnership's investment in commodity futures and forward
contracts and other commodity interests may be illiquid. If the
price of the futures contract for a particular commodity has
increased or decreased by an amount equal to the "daily limit",
positions in the commodity can neither be taken nor liquidated
unless traders are willing to effect trades at or within the limit.
Commodity futures prices have occasionally moved the daily limit
for several consecutive days with little or no trading. Such
market conditions could prevent the Partnership from promptly
liquidating its commodity futures positions.
<PAGE>
There is no limitation on daily price moves in trading forward
contracts on foreign currency. The markets for some world
currencies have low trading volume and are illiquid, which may
prevent the Partnership from trading in potentially profitable
markets or prevent the Partnership from promptly liquidating
unfavorable positions in such markets and subjecting it to
substantial losses. Either of these market conditions could result
in restrictions on redemptions.
Capital Resources - The Partnership does not have, nor does it
expect to have, any capital assets. Redemptions of additional
Units in the future will impact the amount of funds available for
investments in commodity futures and forward contracts and other
commodity interests. As redemptions are at the discretion of
Limited partners, it is not possible to estimate the amount and
therefore, the impact of future redemptions.
Results of Operations
For the Quarter Ended March 31, 1996
For the quarter ended March 31, 1996, the Partnership's total
trading revenues including interest income were $1,490,887. During
the first quarter, the Partnership posted a decrease in Net Asset
Value per Unit. The most significant losses were recorded in the
currency markets during February. These losses were recorded as a
result of a sharp and sudden reversal in the downward move in the
value of the Japanese yen and most European currencies, which
proved profitable for the Partnership in January. Trading gains
recorded during March from transactions involving the Australian
<PAGE>
dollar and Japanese yen offset a portion of the overall losses
experienced within this market sector during February. Additional
losses were recorded in the financial futures markets as global
interest rate futures prices reversed during February resulting in
a give back of January's gains within this sector. In the energy
markets, short-term volatile movement in gas and oil prices
resulted in losses for the Partnership during January and February.
However, a portion of these losses was offset by gains in crude oil
futures during March. Smaller losses were recorded in the
agricultural, soft commodities and metals markets during the
quarter. The most significant losses were recorded in the currency
markets during February. These losses were recorded as a result of
a sharp and sudden reversal in the downward move in the value of
the Japanese yen and most European currencies, which proved
profitable for the Partnership in January. Trading gains recorded
during March from transactions involving the Australian dollar and
Japanese yen offset a portion of the overall losses experienced
within this market sector during February. Additional losses were
recorded in the financial futures markets as global interest rate
futures prices reversed during February resulting in a give back of
January's gains within this sector. In the energy markets, short-
term volatile movement in gas and oil prices resulted in losses for
the Partnership during January and February. However, a portion of
these losses was offset by gains in crude oil futures during March.
Smaller losses were recorded in the agricultural, soft commodities
and metals markets during the quarter. Total expenses for the
period were $2,049,361, resulting in a net loss of $558,474. The
<PAGE>
value of an individual Unit in the Partnership decreased from
$11.50 at December 31, 1995 to $11.42 at March 31, 1996.
For the Quarter Ended March 31, 1995
For the quarter ended March 31, 1995, the Partnership's total
trading revenues including interest income were $3,490,020. During
the first quarter, the Partnership posted a gain in Net Asset Value
per Unit. The most significant trading gains were recorded during
February and March in the currency markets as a result of a
decrease in value of the U.S. dollar versus the Japanese yen and
major European currencies such as the Swiss franc, German mark and
French franc. Additional trading gains were recorded in the
financial futures markets as a result of trading Japanese bond and
U.S. interest rate futures during the quarter. Gains were also
recorded from cotton, Nikkei stock index, crude oil and natural gas
futures. Smaller trading losses in the metals, international and
agricultural markets offset a portion of overall gains for the
quarter. Total expenses for the period were $894,299, generating
net income of $2,595,721. The value of an individual Unit in the
Partnership increased from $9.78 at December 31, 1994 to $11.12 at
March 31, 1995.
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
A) Exhibits.
None.
B) Reports on Form 8-K. - None.
<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 Spectrum Technical L.P.
(Registrant)
By: Demeter Management Corporation
(General Partner)
May 7, 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>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from Dean
Witter Spectrum Technical L.P. and is qualified in its entirety by
reference to such financial instruments.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 64,386,400
<SECURITIES> 0
<RECEIVABLES> 3,739,533<F1>
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 71,644,112<F2>
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 71,644,112<F3>
<SALES> 0
<TOTAL-REVENUES> 1,490,887<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,049,361
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (558,474)
<INCOME-TAX> 0
<INCOME-CONTINUING> (558,474)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (558,474)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Receivables include subscription receivable of $3,524,466 and interest
receivable of $215,067.
<F2>In addition to cash and receivables, total assets include net unrealized
gain on open contracts of $3,518,179.
<F3>Liabilities include redemptions payable of $421,804, accrued brokerage
commissions of $485,347 and accrued management fees of $221,873.
<F4>Total revenues includes realized trading revenue of $1,441,709, net
change in unrealized of $(568,369) and interest income of $617,547.
</FN>
</TABLE>
