10-Q 1 de14907yp-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 June 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: 0-18148 DEAN WITTER REALTY YIELD PLUS, L.P. ----------------------------------- (Exact name of registrant as specified in governing instrument) Delaware 13-3426531 ----------------- -------------------- (State of (IRS Employer organization) Identification No.) 195 Broadway, New York, NY 10007 -------------------------------------- --------- (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code: (800) 829-8585 -------------- 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 / / PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS DEAN WITTER REALTY YIELD PLUS, L.P. CONSOLIDATED BALANCE SHEETS JUNE 30, DECEMBER 31, 2002 2001 ----------- ------------- ASSETS Cash and cash equivalents $2,361,703 $5,321,246 Other assets - 152,532 ----------- ----------- $2,361,703 $5,473,778 =========== =========== LIABILITIES AND PARTNERS' CAPITAL Accounts payable and other liabilities $ 151,970 $ 105,026 Partners' capital (deficiency): ----------- ----------- General Partners (7,571,396) (7,312,194) Limited Partners ($20 per Unit, 8,909,969 Units issued and outstanding) 9,781,129 12,680,946 ----------- ----------- Total Partners' capital 2,209,733 5,368,752 ----------- ---------- $2,361,703 $5,473,778 =========== =========== See accompanying notes to consolidated firnancial statements DEAN WITTER REALTY YIELD PLUS, L.P. CONSOLIDATED STATEMENTS OF OPERATIONS THREE AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001

See accompanying notes to consolidated firnancial statements DEAN WITTER REALTY YIELD PLUS, L.P. CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL (DEFICIENCY) SIX MONTHS ENDED JUNE 30, 2002 LIMITED GENERAL PARTNERS PARTNERS TOTAL Partners' capital (deficiency) at January 1, 2002 $12,680,946 $(7,312,194) $5,368,752 Net income (loss) 93,933 (6,838) 87,095 Cash distribution (2,993,750) (252,364) (3,246,114) ------------ ------------ ----------- Partners' capital (deficiency) at June 30, 2002 $9,781,129 $(7,571,396) $2,209,733 ========== ============ ========== See accompanying notes to consolidated firnancial statements

See accompanying notes to consolidated firnancial statements DEAN WITTER REALTY YIELD PLUS, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. THE PARTNERSHIP Dean Witter Realty Yield Plus, L.P. (the "Partnership") is a limited partnership organized under the laws of the State of Delaware in 1987. The Managing General Partner of the Partnership is Dean Witter Realty Yield Plus Inc., which is wholly-owned by Dean Witter Realty Inc. ("Realty"). The Partnership's last property investments were sold in 2000. The sale of the Deptford Crossing property on December 22, 2000 effectuated the dissolution of the Partnership. Accordingly, the Partnership is in the process of winding up its affairs, and it plans to terminate. However, the Partnership will not terminate until its litigation with respect to the 401 East Ontario property is resolved. The financial statements include the accounts of the Partnership and Deptford Crossing Associates on a consolidated basis. All significant intercompany accounts and transactions have been eliminated. The Partnership's records are maintained on the accrual basis of accounting for financial reporting and tax purposes. Net income per Unit amounts are calculated by dividing net income allocated to Limited Partners, in accordance with the Partnership Agreement, 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 necessary to present fairly the results for the interim periods. Except for the equity in earnings of joint venture income which was recognized during the second quarter of 2002 (see Note 2), such adjustments consist 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, 2001. Operating results of interim periods may not be indicative of the operating results for the entire year. DEAN WITTER REALTY YIELD PLUS, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2. EQUITY IN EARNINGS OF JOINT VENTURE At December 31, 2001, the Partnership's other assets primarily consisted of approximately $111,000 which represented an estimate of the remaining proceeds still due the Partnership from the August 2000 sale of the One Congress Street property. Such proceeds had been placed in escrow to secure the Partnership's obligation to repair the parking lot at the property. During the second quarter of 2002, the repair project was completed, and the Partnership received $266,000 from the escrow account. The Partnership recorded the $155,000 difference between the cash received and the Partnership's receivable as equity in earnings of joint venture income. Because the cash received consisted of undistributed sale proceeds and interest thereon, the Partnership will distribute the $266,000 receipt 100% to the Limited Partners, and it allocated the $155,000 of equity in earnings 100% to the Limited Partners. DEAN WITTER REALTY YIELD PLUS, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS RELATED PARTY TRANSACTIONS Realty performs administrative functions, processes certain investor transactions and prepares tax information for the Partnership. For the six-month periods ended June 30, 2002 and 2001, the Partnership incurred approximately $11,500 and $18,000, respectively, for these services. These amounts are included in general and administrative expenses. At June 30, 2002, the Partnership's accounts payable and other liabilities included approximately $61,500 due to Realty. This amount consisted of the above-mentioned $11,500 due to Realty for 2002 services and a $50,000 payable for the reimbursement of expenses that Realty paid on behalf of the Partnership during 2002. 4. CASH DISTRIBUTIONS On January 30, 2002, the Partnership paid a distribution of approximately $0.34 per Unit (including $0.08 per Unit from the remaining undistributed proceeds received from the December 2000 sale of the Deptford Crossing property and $0.26 per Unit of cash reserves). The Deptford sale proceeds were distributed 100% to the Limited Partners. Total distributions were $3,246,114 with $2,993,750 distributed to the Limited Partners and $252,364 distributed to the General Partners. DEAN WITTER REALTY YIELD PLUS, L.P. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES On December 22, 2000, the Partnership sold its last remaining property interest, the Deptford Crossing shopping center. As a result of this sale, all of the properties in which the Partnership had an interest have either been sold to unaffiliated purchasers or lost through foreclosure. The Partnership Agreement provides that the Partnership shall dissolve upon the sale of the Partnership's last investment, and that dissolution shall be effective on the day on which the event occurs giving rise to the dissolution. Accordingly, the Partnership dissolved pursuant to the terms of its Partnership Agreement, effective December 22, 2000, the date the Partnership sold the Deptford Crossing property. However, the Partnership will not wind up its operations until its outstanding litigation with respect to the 401 East Ontario Street property is resolved. The timing of such resolution is uncertain. As discussed in Note 4 to the consolidated financial statements, on January 30, 2002, the Partnership paid a distribution of $0.34 per Unit. In connection with the 401 East Ontario Street property (sold 1998), the Partnership is vigorously continuing its litigation against the general contractor and others it deems responsible for defects in the building that were repaired, at a cost of $9.2 million, by the Partnership between 1995 and 1997. The Managing General Partner asked the new judge assigned to the case to set the earliest possible trial date. Accordingly, the judge has set a trial date in October 2002. The Managing General Partner expects that conducting a trial for the 401 East Ontario Street litigation would require the Partnership to expend a significant amount of the Partnership's remaining cash reserves during the third and fourth quarters of 2002. The recovery of the Partnership's claims are uncertain, and depends upon the outcome of the litigation. The Partnership has received partial settlements to date of approximately $1,950,000. The Partnership plans to make its final distribution of its cash reserves when the 401 East Ontario Street litigation is resolved and the Partnership has concluded winding up its affairs. The Managing General Partner believes that the Partnership's cash reserves are adequate to fund all Partnership cash requirements while the Partnership winds up its affairs. Except as discussed above and in the consolidated 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 The 2002 equity in earnings of joint venture consists of proceeds from the August 2000 sale of the One Congress Street property received during the second quarter of 2002 which were in excess of the Partnership's receivables for such proceeds (see Note 2 to the consolidated financial statements). Interest and other income decreased during the six months ended June 30, 2002 compared to 2001 primarily due to the absence of the interest earned on the proceeds from the December 2000 sale of the Deptford Crossing property before the majority of such proceeds were distributed to the Limited Partners in 2001. Interest and other income also decreased in the 2002 periods due to a decrease in interest rates and a decline in average cash held by the Partnership (in January 2002, the Partnership distributed over $3,200,000 of its cash on hand to the Limited Partners and General Partners). In 2002 and 2001, property operating expenses included approximately $52,000 and $54,000, respectively, in connection with the above-mentioned 401 East Ontario Street litigation. In 2001, property operating expenses also included $58,000 in connection with the wind up of the operations of the Deptford Crossing property. General and administrative expenses decreased in 2002 compared to 2001 primarily due to expense reductions and the decreased level of Partnership activities as the Partnership winds up its affairs. There were no other individually significant factors which caused significant fluctuations in the Partnership's operating results for the three- and six-month periods ended June 30, 2002 compared to 2001. INFLATION Inflation has been consistently low during the periods presented in the consolidated financial statements and, as a result, has not had a significant effect on the operations of the Partnership. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK Market risk refers to the risk that a change in the level of one or more market prices, rates, indices, volatilities, correlations or other market factors, such as liquidity, will result in losses for a position or portfolio. Other than the Partnership's claims in the 401 East Ontario property litigation, the Partnership's assets consist of cash and short-term time deposits. The Partnership does not hold any instruments for trading purposes. The Partnership's liabilities consist of accounts payable and other short-term liabilities. At June 30, 2002 the Partnership had no material exposure to market risk. It also does not hold any derivative securities. The Partnership's exposure to market risk as of June 30, 2002, and during the three-month and six-month periods ending June 30, 2002, did not change materially compared to the Partnership's exposure to market risk as of June 30, 2001, and during the three-month and six-month periods ending June 30, 2001. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits (99.1) Certification of Periodic Report by William B. Smith, Chairman and Chief Executive Officer of Dean Witter Realty Yield Plus Inc., the Managing General Partner of Dean Witter Realty Yield Plus, L.P. (99.2) Certification of Periodic Report by Jeffrey D. Hahn, Vice President and Principal Financial and Accounting Officer of Dean Witter Realty Yield Plus Inc., the Managing General Partner of Dean Witter Realty Yield Plus, L.P. (b) Reports on Form 8-K. None. DEAN WITTER REALTY YIELD PLUS, 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 thereunto duly authorized. DEAN WITTER REALTY YIELD PLUS, L.P. By: Dean Witter Realty Yield Plus Inc. Managing General Partner Date: August 13, 2002 By: /s/ E. Davisson Hardman, Jr. --------------------------------------- E. Davisson Hardman, Jr. President Date: August 13, 2002 By: /s/ Jeffrey D. Hahn --------------------------------------- Jeffrey D. Hahn Vice President, Principal Financial and Accounting Officer DEAN WITTER REALTY YIELD PLUS, L.P. EXHIBIT INDEX 99.1 Certification of Periodic Report by William B. Smith, Chairman and Chief Executive Officer of Dean Witter Realty Yield Plus Inc., the Managing General Partner of Dean Witter Realty Yield Plus, L.P. 99.2 Certification of Periodic Report by Jeffrey D. Hahn, Vice President and Principal Financial and Accounting Officer of Dean Witter Realty Yield Plus Inc., the Managing General Partner of Dean Witter Realty Yield Plus, L.P.

DEAN WITTER REALTY YIELD PLUS L P 10-Q