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, 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
June 30, 1996
<CAPTION>
PART I. FINANCIAL INFORMATION
<S> <C>
Item 1. Financial Statements
Statements of Financial Condition
June 30, 1996 (Unaudited) and December 31, 1995............2
Statements of Operations for the Quarters Ended
June 30, 1996 and 1995 (Unaudited) ........................3
Statements of Operations for the Six Months Ended
June 30, 1996 and 1995 (Unaudited) ........................4
Statements of Changes in Partners' Capital for
the Six Months Ended June 30, 1996 and 1995 (Unaudited)....5
Statements of Cash Flows for the Six Months Ended
June 30, 1996 and 1995 (Unaudited).........................6
Notes to Financial Statements (Unaudited)................7-11
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations............................................12-16
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K...................... 17
/TABLE
<PAGE>
<TABLE>
DEAN WITTER SPECTRUM TECHNICAL L.P.
STATEMENTS OF FINANCIAL CONDITION
<CAPTION>
June 30, December 31,
1996 1995
$ $
(Unaudited)
ASSETS
<S> <C> <C>
Equity in Commodity futures trading accounts:
Cash 78,537,769 52,705,410
Net unrealized gain on open contracts 3,500,193 4,086,548
Total Trading Equity 82,037,962 56,791,958
Subscriptions receivable 5,170,213 3,091,196
Interest receivable (DWR) 263,101 192,688
Total Assets 87,471,276 60,075,842
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Redemptions payable 643,870 184,326
Accrued brokerage commissions (DWR) 575,275 387,839
Accrued management fees 262,983 177,298
Total Liabilities 1,482,128 749,463
Partners' Capital
Limited Partners (7,162,981.544 and
5,105,307.329 Units, respectively) 85,124,376 58,726,495
General Partner (72,768.158 and
52,150.079 Units, respectively) 864,772 599,884
Total Partners' Capital 85,989,148 59,326,379
Total Liabilities and Partners' Capital 87,471,276 60,075,842
NET ASSET VALUE PER UNIT 11.88 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 June 30,
1996 1995
$ $
REVENUES
<S> <C> <C>
Trading profit (loss):
Realized 4,640,201 3,649,118
Net change in unrealized (17,986) (2,100,973)
Total Trading Results 4,622,215 1,548,145
Interest Income (DWR) 757,190 294,456
Total Revenues 5,379,405 1,842,601
EXPENSES
Brokerage commissions (DWR) 1,658,141 640,703
Management fees 758,006 292,893
Incentive fees - 252,172
Total Expenses 2,416,147 1,185,768
NET INCOME 2,963,258 656,833
NET INCOME ALLOCATION
Limited Partners 2,933,044 652,882
General Partner 30,214 3,951
NET INCOME PER UNIT
Limited Partners .46 .35
General Partner .46 .35
<FN>
The accompanying footnotes are an integral part
of these financial statements.
/TABLE
<PAGE>
<TABLE>
DEAN WITTER SPECTRUM TECHNICAL L.P.
STATEMENT OF OPERATIONS
(Unaudited)
<CAPTION>
For the Six Months Ended June 30,
1996 1995
$ $
REVENUES
<S> <C> <C>
Trading profit (loss):
Realized 6,081,909 4,706,695
Net change in unrealized (586,355) 154,964
Total Trading Results 5,495,554 4,861,659
Interest Income (DWR) 1,374,738 470,963
Total Revenues 6,870,292 5,332,622
EXPENSES
Brokerage commissions (DWR) 3,055,877 1,015,387
Management fees 1,396,972 464,177
Incentive fees 12,659 600,504
Total Expenses 4,465,508 2,080,068
NET INCOME 2,404,784 3,252,554
NET INCOME ALLOCATION
Limited Partners 2,379,896 3,226,771
General Partner 24,888 25,783
NET INCOME PER UNIT
Limited Partners .38 1.69
General Partner .38 1.69
<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 Six Months Ended June 30, 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 1,901,002.384 20,911,375 210,000 21,121,375
Net Income - 3,226,771 25,783 3,252,554
Redemptions (38,368.937) (442,905) - (442,905)
Partners' Capital
June 30, 1995 3,388,837.867 $38,467,030 $395,048 $38,862,078
Partners' Capital
December 31, 1995 5,157,457.408 $58,726,495 $599,884 $59,326,379
Continuous Offering 2,257,056.773 26,109,899 240,000 26,349,899
Net Income - 2,379,896 24,888 2,404,784
Redemptions (178,764.479) (2,091,914) (2,091,914)
Partners' Capital
June 30, 1996 7,235,749.702 $85,124,376 $864,772 $85,989,148
<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 Six Months Ended June 30,
1996 1995
$ $
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income 2,404,784 3,252,554
Noncash item included in net income:
Net change in unrealized 586,355 (154,964)
Increase in operating assets:
Interest receivable (DWR) (70,413) (64,383)
Net option premiums - (69,748)
Increase (decrease) in operating liabilities:
Accrued brokerage commissions (DWR) 187,436 164,722
Accrued management fees 85,685 75,302
Incentive fees payable - (19,678)
Net cash provided by operating activities 3,193,847 3,183,805
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in subscriptions receivable (2,079,017) (1,677,662)
Continuous offering 26,349,899 21,121,375
Increase in redemptions payable 459,544 98,388
Redemption of units (2,091,914) (442,905)
Net cash provided by financing activities 22,638,512 19,099,196
Net increase in cash 25,832,359 22,283,001
Balance at beginning of period 52,705,410 11,829,496
Balance at end of period 78,537,769 34,112,497
<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 futures 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
<PAGE>
DEAN WITTER SPECTRUM TECHNICAL L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
on these funds based on prevailing U.S. Treasury Bill rates.
Brokerage expenses incurred by the Partnership are paid to DWR.
3. Financial Instruments
The Partnership trades futures and forward contracts in interest
rates, stock indices, commodities, currencies, petroleum and
precious metals. Futures and forwards represent 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 June 30, 1996, open contracts were:
Contract or
Notional Amount
$
Exchange-Traded Contracts
Financial Futures:
Commitments to Purchase 48,751,000
Commitments to Sell 211,955,000
Commodity Futures:
Commitments to Purchase 53,209,000
Commitments to Sell 37,859,000
Foreign Futures:
Commitments to Purchase 124,947,000
Commitments to Sell 79,555,000
Off-Exchange-Traded Forward
Currency Contracts
Commitments to Purchase 22,639,000
Commitments to Sell 21,598,000
<PAGE>
DEAN WITTER SPECTRUM TECHNICAL L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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.
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 $3,500,193 at June 30, 1996. Of
this amount, $3,597,517 related to exchange-traded futures
contracts and ($97,324) related to off-exchange-traded forward
currency contracts.
Exchange-traded futures contracts held by the Partnership at June
30, 1996 mature through June 1997. Off-exchange-traded forward
currency contracts held by the Partnership at June 30, 1996 matured
through September 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 nonperformance. The credit risk associated with
these instruments is limited to the amounts reflected in the
Partnership's Statements of Financial Condition.
<PAGE>
DEAN WITTER SPECTRUM TECHNICAL L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Partnership also has credit risk because DWR acts as the
futures commission merchant or the sole counterparty, with respect
to most of the Partnership's assets. 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 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 gain on all open futures
contracts, which funds totaled $82,135,286 at June 30, 1996. With
respect to the Partnership's off-exchange-traded foreign currency
forward 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 such contracts, to perform.
<PAGE>
DEAN WITTER SPECTRUM TECHNICAL L.P.
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
For the quarter ended June 30, 1996, the average fair value of
financial instruments held for trading purposes was as follows:
Assets Liabilities
$ $
Exchange-Traded Contracts:
Financial Futures 67,263,000 142,296,000
Commodity Futures 56,827,000 18,077,000
Foreign Futures 103,809,000 57,216,000
Off-Exchange-Traded Forward
Currency Contracts 28,520,000 47,313,000
<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, 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 the
Limited Partners, it is not possible to estimate the amount and
therefore, the impact of future redemptions.
Results of Operations
For the Quarter and Six Months Ended June 30, 1996
For the quarter ended June 30, 1996, the Partnership's total
trading revenues including interest income were $5,379,405. During
the second quarter, the Partnership posted an increase in Net Asset
Value per Unit. The most significant gains for the quarter were
experienced in the currency markets during April from short German
mark and Swiss franc positions as the value of these currencies
moved lower relative to the U.S. dollar and other world currencies.
Additional currency gains were recorded from short Japanese yen
positions as the value of the yen moved lower relative to the U.S.
<PAGE>
dollar during mid-May through June. Gains were also recorded in
the energy markets during April and June from long crude oil and
natural gas futures positions and in the metals markets during June
from short copper futures positions as prices moved lower on news
of significant losses by Sumitomo Corporation. Smaller gains were
recorded for the Partnership from agricultural futures trading
particularly from long corn futures positions as prices moved
higher in April and early May. A portion of overall gains for the
second quarter was offset by losses in global interest rate and
global stock index futures as prices moved in a short-term volatile
pattern. Smaller losses were recorded in soft commodities as
losses in coffee futures move than offset gains experienced in
sugar futures. Total expenses for the quarter were $2,416,147,
resulting in net income of $2,963,258. The value of an individual
Unit in the Partnership increased from $11.42 at March 31, 1996 to
$11.88 at June 30, 1996.
For the six months ended June 30, 1996, the Partnership's total
trading revenues including interest income were $6,870,292. During
the first half of the year, the Partnership posted an increase in
Net Asset Value per Unit. The most significant gains were recorded
in the currency markets from short Swiss franc and German mark
positions as the value of these currencies moved lower relative to
the U.S. dollar during January and April. Additional currency
gains were recorded from short Japanese yen positions as the value
of the yen moved lower relative to the U.S. dollar during January
and March. In the energy markets, trading gains were recorded from
long crude oil futures positions as prices increased during March,
<PAGE>
April and, to a lesser extent during June. Additional gains were
recorded from long natural gas futures positions as prices moved
higher during June. In the metals markets, gains recorded from
short positions in copper, gold and silver futures during June more
than offset losses recorded from trading other base metals futures
during the first half of the year. A portion of overall gains for
the first half of the year was offset by losses experienced in
global interest rate futures trading during February, as the
previous upward trend that was profitable in late 1995 and January
1996, reversed sharply lower. Additional losses were recorded in
non-U.S. interest rate futures from March to June as trendless
price movement followed. Losses were also recorded in global stock
index futures as choppy price movement was experienced during
March, May and June. In soft commodities, losses recorded from
trading cotton and coffee futures more than offset gains in sugar
futures during the first half of the year. Total expenses for the
period were $4,465,508, resulting in net income of $2,404,784. The
value of an individual Unit in the Partnership increased from
$11.50 at December 31, 1995 to $11.88 at June 30, 1996.
For the Quarter and Six Months Ended June 30, 1995
For the quarter ended June 30, 1995, the Partnership's total
trading revenues including interest income were $1,842,601. During
the second quarter, the Partnership posted an increase in Net Asset
Value per Unit. The most significant gains were recorded in the
financial markets from trading global interest rate and stock index
futures in April and May. Additional trading gains were recorded
during the second quarter as a result of profits in the soft
<PAGE>
commodities from trading coffee and sugar and in the energy markets
from trading crude oil and natural gas futures. Trading losses in
the currency markets during May and June, coupled with losses in
the metals and agricultural markets in April and May offset a
portion of overall gains recorded for the Partnership during the
quarter. Total expenses for the period were $1,185,768, resulting
in net income of $656,833. The value of an individual Unit in the
Partnership increased from $11.12 at March 31, 1995 to $11.47 at
June 30, 1995.
For the six months ended June 30, 1995, the Partnership's total
trading revenues including interest income weres $5,332,622.
During the first six months, the Partnership posted an increase in
Net Asset Value per Unit. The most significant gains were recorded
during April and May as a result of trading in global interest rate
and stock index futures. Gains were also 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.
Smaller gains were recorded from trading cotton, crude oil and
natural gas futures. Smaller losses in the metals markets from
trading base metals and in the agricultural markets from trading
soybean futures offset a portion of overall gains for the first
half of the year. Total expenses for the period were $2,080,068,
resulting in net income of $3,252,554. The value of an individual
Unit in the Partnership increased from $9.78 at December 31, 1994
to $11.47 at June 30, 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)
August 12, 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> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> JUN-30-1996
<CASH> 78,537,769
<SECURITIES> 0
<RECEIVABLES> 5,433,314<F1>
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 87,471,276<F2>
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 87,471,276<F3>
<SALES> 0
<TOTAL-REVENUES> 6,870,292<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 4,465,508
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,404,784
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,404,784
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,404,784
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Receivables include subscription receivable of $5,170,213 and interest
receivable of $263,101.
<F2>In addition to cash and receivables, total assets include net unrealized
gain on open contracts of $3,500,193.
<F3>Liabilities include redemptions payable of $643,870, accrued brokerage
commissions of $575,275 and accrued management fees of $262,983.
<F4>Total revenues includes realized trading revenue of $6,081,909, net
change in unrealized of $(586,355) and interest income of $1,374,738.
</FN>
</TABLE>
