10-Q 1 deip2ap02-10q.txt QUARTERLY REPORT 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 April 30, 2002 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: 0-18150 DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P. -------------------------------------------------------------------------------- (Exact name of registrant as specified in governing instrument) Delaware 13-3244091 ----------------------- --------------------------------- (State of organization) (IRS Employer Identification No.) 195 Broadway, New York, NY 10007 ---------------------------------------- -------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (800) 829-8585 1221 Avenue of the Americas, New York, NY 10020 -------------------------------------------------------------------------------- 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 PART I - FINANCIAL INFORMATION Item 1. Financial Statements DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P. BALANCE SHEETS April 30, October 31, 2002 2001 -------------------------------------------------------------------------------- ASSETS Cash and cash equivalents $ 535,623 $649,235 Investment in joint venture 4,159 4,159 Other assets 3,667 3,770 -------------------------------------------------------------------------------- $ 543,449 $657,164 ================================================================================ LIABILITIES AND PARTNERS' CAPITAL Accounts payable and other liabilities $ 163,707 $ 245,164 -------------------------------------------------------------------------------- Partners' capital (deficiency): General partners (5,440,414) (5,437,188) Limited partners ($1,000 per Unit, 177,023 Units issued) 5,820,156 5,849,188 -------------------------------------------------------------------------------- Total partners' capital 379,742 412,000 -------------------------------------------------------------------------------- $ 543,449 $657,164 ================================================================================ See accompanying notes to financial statements.

~~2002~~DEAN ~~2001~~WITTER ~~----~~REALTY ~~----~~INCOME ~~Cash~~PARTNERSHIP ~~flows~~II, ~~from~~L.P. ~~operating~~STATEMENTS ~~activities:~~OF ~~Net~~OPERATIONS ~~loss~~Three $and ~~(14,693)~~six $months ~~(16~~ended April 30,~~463)~~ ~~Adjustments~~2002 toand ~~reconcile~~2001 ~~net~~Three ~~loss~~months toended ~~net~~Six ~~cash~~months ~~used~~ended inApril ~~operating~~30, ~~activities:~~April ~~Equity~~30, in----------------- ~~earnings~~---------------- of2002 ~~Taxter~~2001 ~~joint~~2002 ~~venture~~2001 -------------------------------------------------------------------------------- ~~(81)~~Revenues: ~~Decrease~~Equity ~~(increase)~~ in ~~other~~earnings ~~assets~~of ~~103~~joint ~~(6,664)~~venture ~~(Decrease)~~$ ~~increase~~- in$ ~~accounts~~- ~~payable~~$ - $ 81 Interest and other ~~liabilities~~1,420 ~~(90~~7,~~281)~~887 203,~~129~~057 25,720 ----------- --------------------------------------------------------------------- ~~Net~~1,420 ~~cash used in operating activities (104~~7,~~871)~~887 (3,~~079)~~057 25,801 ----------- --------------------------------------------------------------------- ~~Cash~~Expenses: ~~flows~~Property ~~from~~operating ~~investing~~- ~~activities:~~- ~~Distributions~~- ~~from~~(9,995) ~~Taxter~~General ~~joint~~and ~~venture~~administrative --18,985 957,~~559~~126 101,498 ----------- --------------------------------------------------------------------- ~~(Decrease)~~18,985 ~~increase~~57,126 in35,315 ~~cash~~91,503 ~~and~~-------------------------------------------------------------------------------- ~~cash~~Net ~~equivalents~~loss $(~~104~~17,~~871~~565) 6$(49,~~480~~239) ~~Cash~~$(32,258) ~~and~~$(65,702) ~~cash~~================================================================================ ~~equivalents~~Net atloss ~~beginning~~allocated ofto: ~~period~~Limited ~~649~~partners $(15,~~235~~808) $(44,315) $(29,032) $(59,132) General partners (1,~~316~~757) (4,~~641~~924) (3,226) (6,570) ----------- --------------------------------------------------------------------- ~~Cash~~$(17,565) ~~and~~$(49,239) ~~cash~~$(32,258) ~~equivalents~~$(65,702) at================================================================================ ~~end~~Net loss per Unit of ~~period~~limited partnership interest $ ~~544,364~~(0.09) $ ~~1,323,121~~(0.25) $ (0.16) $ (0.33) =========== =====================================================================

See accompanying notes to financial statements. DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P. STATEMENT OF PARTNERS' CAPITAL Six months ended April 30, 2002 Limited General Partners Partners Total ------------------------------------------------------------------------------ Partners' capital (deficiency) at November 1, 2001 $5,849,188 $(5,437,188) $ 412,000 Net loss (29,032) (3,226) (32,258) -------------------------------------------------------------------------------- Partners' capital (deficiency) at April 30, 2002 $5,820,156 $(5,440,414 $ 379,742 ================================================================================ See accompanying notes to financial statements. DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P. STATEMENTS OF CASH FLOWS Six months ended April 30, 2002 and 2001 2002 2001 -------------------------------------------------------------------------------- Cash flows from operating activities: Net loss $ (32,258) $ (65,702) Adjustments to reconcile net loss to net cash used in operating activities: Equity in earnings of Taxter joint venture - (81) Decrease (increase) in other assets 103 (6,797) Decrease in accounts payable and other liabilities (81,457) (13,086) -------------------------------------------------------------------------------- Net cash used in operating activities (113,612) (85,666) -------------------------------------------------------------------------------- Cash flows from investing activities: Distributions from Taxter joint venture - 9,559 -------------------------------------------------------------------------------- Cash flows from financing activities: Cash distributions - (601,878) ------------------------------------------------------------------------------ Decrease in cash and cash equivalents (113,612) (677,985) Cash and cash equivalents at beginning of period 649,235 1,316,641 ------------------------------------------------------------------------------ Cash and cash equivalents at end of period $ 535,623 $ 638,656 ============================================================================== See accompanying notes to financial statements. DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P. Notes to Financial Statements 1. The Partnership Dean Witter Realty Income Partnership II, L.P. (the "Partnership") is a limited partnership organized under the laws of the State of Delaware in 1984. The Partnership's fiscal year ends on October 31. The Partnership's last remaining property investment was its 14.8% interest in the partnership ("TPA") which owned Taxter Corporate Park. TPA sold the Taxter property on May 23, 2000, and this sale has effectuated the dissolution of the Partnership. However, the Partnership can't wind up its affairs, and distribute the balance of the Partnership's cash reserves, until TPA terminates its operations (see Note 2). The Managing General Partner plans to terminate the Partnership as soon as possible. The equity method of accounting had been applied to the Partnership's 14.8% interest in TPA because of the Partnership's continuing ability to exert significant influence over TPA. The Partnership's records are maintained on the accrual basis of accounting for financial reporting and tax reporting purposes. Net loss per Unit of limited partnership interest amounts are calculated by dividing net loss allocated to Limited Partners by the weighted average number of Units outstanding. In the opinion of management, the accompanying financial statements, which have not been audited, include all adjustments, consisting only of normal recurring accruals, necessary to present fairly the results for the interim period. 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 October 31, 2001. Operating results of interim periods may not be indicative of the operating results for the entire year. DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P. Notes to Financial Statements 2. Investment in Joint Venture TPA is currently appealing the amount of real estate taxes it was charged by the local taxing authorities during the 1997 to 2000 tax years. TPA won a judgment in the trial court and the taxing authorities have appealed. The Partnership understands that TPA must resolve this appeal and other outstanding matters, with the buyer of the Taxter property, before TPA can terminate its operations. Resolution of these issues is not anticipated to require any significant funding from the Partnership. 3. Related Party Transactions An affiliate of the Managing General Partner performs administrative functions, processes investor transactions and prepares tax information for the Partnership. For the six months ended April 30, 2002 and 2001, the Partnership incurred approximately $20,000 and $31,000, respectively, for these services. These amounts have been recorded in general and administrative expenses. At April 30, 2002, the Partnership's accounts payable and other liabilities included approximately $20,000 due to the affiliate for the 2002 services it performed for the Partnership and $25,000 of expenses the affiliate paid on behalf of the Partnership. DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources As discussed in Note 1 to the financial statements, the partnership ("TPA") which owned the Taxter office property sold the property on May 23, 2000. The Partnership's interest in TPA was the Partnership's only remaining property interest. The Partnership dissolved pursuant to the terms of its Partnership Agreement, effective May 23, 2000, the date on which the Taxter property was sold. The Partnership owned its 14.8% interest in the Taxter property through a joint venture, and the Partnership will not be able to wind up its affairs and distribute the balance of the Partnership's cash reserves until the joint venture terminates its operations (see note 2 of the financial statements). The Partnership plans to wind up its affairs, distribute its remaining cash reserves and terminate its existence by filing a certificate of cancellation in the office of the Delaware Secretary of State as soon as possible. The Partnership believes that its remaining cash reserves are adequate for its needs until the Partnership is terminated. Except as discussed above and in the financial statements, the Managing General Partner is not aware of any trends or events, commitments or uncertainties that may have a material impact on liquidity. Operations Fluctuations in the Partnership's operating results for the three and six month periods ended April 30, 2002 compared to 2001 are primarily attributable to the following: Interest and other income decreased during the six months ended April 30, 2002 compared to 2001 primarily due to a decrease in interest rates and a decline in average cash held by the Partnership (in February 2001, the Partnership distributed over $600,000 of its cash on hand to the Limited Partners). The negative property operating expense during the six months ended April 30, 2001 was caused by the collection of a tenant receivable which was previously written off by the Partnership. General and administrative expenses decreased in 2002 compared to 2001 primarily due to expense reductions and the decreased level of Partnership activities while the Partnership winds up its affairs. There were no other individually significant factors which caused changes in revenues or expenses. 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. DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P. PART II - OTHER INFORMATION --------------------------- Item 6. Exhibits and Reports on Form 8-K a) Exhibits None b) Reports on Form 8-K None DEAN WITTER REALTY INCOME PARTNERSHIP II, L.P. SIGNATURES 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 there unto duly authorized. DEAN WITTER REALTY INCOME Partnership II, L.P. By: Dean Witter Realty Income Properties II Inc. Managing General Partner Date: June 13, 2002 By: /s/ E. Davisson Hardman, Jr. ------------------------------- E. Davisson Hardman, Jr. President Date: June 13, 2002 By: /s/ Jeffrey D. Hahn ------------------------------- Jeffrey D. Hahn Principal Financial and Accounting Officer

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