10-Q 1 de-ypii063001_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, 2001 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: 0-18149 DEAN WITTER REALTY YIELD PLUS II, L.P. --------------------------------------------------------------- (Exact name of registrant as specified in governing instrument) Delaware 13-3469111 ----------------------- --------------------------------- (State of organization) (IRS Employer Identification No.) 2 World Trade Center, New York, NY 10048 ---------------------------------------- ---------- (Address of principal executive offices) (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 II, L.P. BALANCE SHEETS

~~Three~~June ~~months ended Nine months ended September~~ 30, ~~September~~December 3031, 2001 2000 --------------------- ------------------ ~~2000 1999 2000 1999~~ --------------------- ----------------------------------- ~~Revenues:~~ASSETS ~~Equity~~Cash inand ~~earnings~~cash ofequivalents ~~unconsolidated partnership~~ $~~18,975,293~~ ~~$512~~1,~~679 $19~~194,~~559,286~~655 $ 12,~~151~~860,~~688~~434 ~~Interest~~Other ~~and~~assets ~~other~~-- ~~188~~4,~~834~~729 ~~(2,351) 253,155 72,828~~ -------------------------------------------------------------- ---------------- ------------------ $ 1,194,655 $ 2,865,163 =============================================================================================== LIABILITIES AND PARTNERS' CAPITAL Accounts payable and other liabilities $ 84,817 $ 177,244 Distributions payable to General Partners 173,164 114,481 ------------------ ~~19,164,127 510,328 19,812,441 1,224,516~~ ----------------------------------------------------------------------------- 257,981 291,725 ---------------- ------------------ ------------------ ~~Expenses: General and administrative 28,871 22,359 65,585 67,361~~ ------------------------------------------- Partners' capital (deficiency): General Partners 3,266,552 3,325,464 Limited Partners ($500 per Unit, 173,164 Units issued) (2,329,878) (752,026) ------------------- ---------------- ------------------ ------------------ Net income $19,135,256 $487,969 $19,746,856 $ 1,157,155 ============================================================== ================ ================== ================== Net income allocated to: Limited partners $19,165,402 $439,172 $19,715,842 $ 1,041,440 General partners (30,146) 48,797 31,014 115,715 ------------------------ Total partners' capital 936,674 2,573,438 -------------------------------------- ---------------- ------------------ ----------------------- $~~19,135,256~~ ~~$487~~1,~~969 $19~~194,~~746,856~~655 $ 12,~~157~~865,~~155~~163 ============================================================== ================ ================== ================== Net income per Unit of limited partnership interest $ 110.68 $ 2.53 $ 113.86 $ 6.01 ============================================================== ================ ================== ================== See accompanying notes to financial statements.

See accompanying notes to financial statements. DEAN WITTER REALTY YIELD PLUS II, L.P. STATEMENTS OF OPERATIONS Three and six months ended June 30, 2001 and 2000

~~Limited~~Three ~~General~~months ~~Partners~~ended ~~Partners~~Six ~~Total~~months ended June 30, June 30, 2001 2000 2001 2000 ------------------------------------------------------------------------------------------------------ ~~Partners'~~Revenues: ~~capital~~Equity atin ~~January~~earnings 1,of ~~2000~~joint venture $12 5,~~224~~199 $ 256,~~510~~908 $3 5,~~416,870~~199 $ 15583,~~641,380~~993 ~~Net~~Interest ~~income~~and 19other 9,851 24,275 37,715 64,~~842~~321 31------------------------------------------------------------------------------------------------------ 15,~~014~~050 19281,~~746~~183 42,~~856~~914 648,314 ------------------------------------------------------------------------------------------------------ ~~Cash~~Expenses: ~~Distribution~~General ~~(31~~and administrative 21,~~169~~148 19,~~520)~~945 ~~(31~~45,~~169~~203 36,~~520)~~714 ------------------------------------------------------------------------------------------------------ Net (loss) income $ (6,098) $ 261,238 $ (2,289) $ 611,600 ====================================================================================================== Net (loss) income allocated to: Limited Partners' ~~capital~~$ at(5,488) ~~September~~$ 30235,114 ~~2000~~$ (2,060) $ ~~770~~550,~~832~~440 General Partners (610) 26,124 (229) 61,160 ------------------------------------------------------------------------------------------------------ $3 (6,~~447~~098) $ 261,~~884~~238 $ 4(2,~~218~~289) $ 611,~~716~~600 ====================================================================================================== Net (loss) income per Unit of limited partnership interest $ (0.03) $ 1.36 $ (0.01) $ 3.18 ======================================================================================================

See accompanying notes to financial statements. DEAN WITTER REALTY YIELD PLUS II, L.P. STATEMENT OF PARTNERS' CAPITAL (DEFICIENCY) Six months ended June 30, 2001

~~2000~~Limited ~~1999~~General Partners Partners Total --------------------------------------------------------------------------------------- ~~Cash~~Partners' ~~flows~~capital ~~from~~(deficiency) ~~operating~~at ~~activities:~~January ~~Net income $19,746,856 $~~ 1,~~157,155~~ ~~Adjustments~~2001 to$ ~~reconcile net income to net cash provided by~~ (~~used in~~752,026) ~~operating~~$ ~~activities: Equity in earnings of unconsolidated partnership (19~~3,~~559~~325,~~286)~~464 ~~(1,151,688)~~$ ~~Decrease (increase) in other assets 16~~2,~~412 (6~~573,~~268)~~438 ~~Increase~~Net ~~(decrease)~~loss ~~in accounts payable and other liabilities 11,563~~ (282,~~753~~060) ~~------------------------------------------------------------------------------------ Net cash provided by~~ (~~used in~~229) ~~operating activities 215,545~~ (292,~~554~~289) ~~------------------------------------------------------------------------------------ Cash flows from investing activities:~~ Distributions ~~from unconsolidated partnership 33,504,393~~ (1,~~837~~575,~~119~~792) ~~Contributions to unconsolidated partnership~~ (~~973~~58,~~700~~683) (1,~~108~~634,~~460~~475) ----------------------------------------------------------------------------------- ~~Net cash provided by investing activities 32,530,693 728,659~~ ----~~-------------------------------------------------------------------------------~~ ~~Net~~Partners' ~~cash~~capital ~~flows used in financing activities: Cash distributions~~ (~~31,169,520~~deficiency) ~~- ----------------------------------------------------------------------------------- Increase in cash and cash equivalents 1,576,718 699,105 Cash and cash equivalents~~ at ~~beginning~~June ~~of period 1~~30,~~377,357~~ 2001 $(2,~~062~~329,~~767~~878) ~~----------------------------------------------------------------------------------- Cash and cash equivalents at end of period~~ $2 3,~~954~~266,~~075~~552 $2 936,~~761,872~~674 =================================================================================== ~~See accompanying notes to financial statements.~~====

See accompanying notes to financial statements. DEAN WITTER REALTY YIELD PLUS II, L.P. STATEMENTS OF CASH FLOWS Six months ended June 30, 2001 and 2000

~~Three~~2001 ~~months~~2000 ~~ended Nine months ended September 30, September 30,~~ ------------------ --------------------------------------------------------------------------- ~~2000~~Cash ~~1999~~flows ~~2000~~from ~~1999~~operating activities: Net (loss) income $ (2,289) $ 611,600 Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: Equity in earnings of joint venture (5,199) (583,993) Decrease (increase) in other assets 4,729 (1,159) (Decrease) increase in accounts payable and other liabilities (92,427) 22,629 --------------------------------------------------------------------------------------------- ~~Revenue:~~Net ~~Property~~cash ~~operating~~(used $in) ~~2,257,917~~provided ~~$4,135,795~~by $operating ~~9,776,026~~activities ~~$11~~(95,~~809,008~~186) ~~Gain on sale of real estate 52~~49,~~744,105~~077 - ~~52,744,105~~ - ------------------------------------------------------------------------------------------- ~~55,002,022~~Cash 4flows from investing activities: Distributions from joint venture 5,~~135,795~~199 62909,~~520,131~~792 11Contributions to joint venture -- (254,~~809,008~~600) --------------------------------------------------------------------------------------------- ~~Expenses:~~Net ~~Interest~~cash onprovided ~~the~~by ~~Loan~~investing ~~1,458,105~~activities ~~2,121,396~~ 5,~~694,891~~199 6655,~~213,116~~192 ~~Other interest 712,455 946,272 2,602,559 2,840,202 Property operating 2,846,694 1,595,194 6,128,296 5,038,609 Depreciation and amortization 49,845 618,551 1,476,288 1,873,521~~ --------------------------------------------------------------------------------------------- ~~5,067,099~~Cash ~~5,281,413~~flows 15from financing activities: Distributions (1,~~902~~634,~~034~~475) 15-- Increase in distributions payable to General Partners 58,~~965,448~~683 -- --------------------------------------------------------------------------------------------- Net ~~income~~cash ~~(loss)~~used ~~before~~in ~~extraordinary~~financing ~~item:~~activities ~~49,934,923~~ (1,~~145~~575,~~618~~792) ~~46,618,097~~-- ~~(4,156,440)~~ --------------------------------------------------------------------------------------------- ~~Extraordinary~~(Decrease) ~~item:~~increase ~~Gain~~in oncash ~~extinguishment~~and ofcash ~~debt~~equivalents 11(1,~~215~~665,~~526~~779) -704,269 11Cash and cash equivalents at beginning of period 2,~~215~~860,~~526~~434 -1,377,357 --------------------------------------------------------------------------------------------- ~~Net~~Cash ~~income~~and ~~(loss)~~cash ~~$61,150,449~~equivalents at end of period $( 1,~~145~~194,~~618)~~655 $~~57,833,623~~ ~~$(4~~2,~~156~~081,~~440)~~626 =============================================================================================

See accompanying notes to financial statements. DEAN WITTER REALTY YIELD PLUS II, L.P. Notes to Financial Statements 1. The Partnership --------------- Dean Witter Realty Yield Plus II, L.P. (the "Partnership") is a limited partnership organized under the laws of the State of Delaware in 1988. The Managing General Partner of the Partnership is Dean Witter Realty Yield Plus II Inc., which is wholly-owned by Dean Witter Realty Inc. ("Realty"). The Partnership's last property investment was its 42% interest in the partnership ("GCGA") which owned the One Congress Street property. GCGA sold the property on August 31, 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 GCGA terminates its operations (see Note 2). The Managing General Partner plans to terminate the Partnership in 2001. The Partnership's 42% share of the general partnership interest in GCGA was accounted for on the equity method. The remaining 58% general partnership interest in GCGA was owned by Dean Witter Realty Yield Plus, L.P. ("Yield Plus"), an affiliate. The Partnership's records are maintained on the accrual basis of accounting for financial and tax reporting purposes. Net (loss) income per Unit amounts were calculated by dividing net (loss) 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, consisting only of normal recurring accruals, necessary to present fairly the results for the interim periods. 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, 2000. Operating results of interim periods may not be indicative of the operating results for the entire year. DEAN WITTER REALTY YIELD PLUS II, L.P. Notes to Financial Statements 2. Investments in Joint Venture ---------------------------- As part of the One Congress Street sale agreement, GCGA continues to be responsible for completing the repair work it began relating to the parking garage area of the property. At closing of the sale, $1.2 million was deducted from the sale proceeds GCGA received, and placed in escrow to ensure that GCGA would complete and pay for all the required repair work; the Partnership's 42% share of such escrow deposit was $495,000. The Managing General Partner expects that the remaining repair work will be completed in the Summer of 2001, and the funds needed to complete such work will not exceed the amount of the escrow deposit. GCGA can terminate its operations after GCGA determines that the parking garage repair work has been satisfactorily completed. Summarized income statements of GCGA is as follows:

The property was sold in August 2000. GCGA's second mortgage loan was a participating mortgage loan from the Partnership (42%) and Yield Plus (58%). The Partnership did not recognize interest income on its share of the second mortgage loan; instead, the Partnership recognized its share of GCGA's earnings exclusive of GCGA's interest expense on the second mortgage loan. DEAN WITTER REALTY YIELD PLUS II, L.P. Notes to Financial Statements 3. Related Party Transactions -------------------------- Realty performs administrative functions, processes investor transactions and prepares tax information for the Partnership. During the six-month periods ended June 30, 2001 and 2000, the Partnership incurred approximately $9,000 and $16,500, respectively, for these services. These amounts are included in general and administrative expenses. 4. Distributions ------------- On February 27, 2001, the Partnership paid a distribution, to Limited Partners only, of approximately $1,576,000 ($9.10 per Unit), consisting of $1,048,000 ($6.05 per Unit) from the remaining proceeds from the sale of the One Congress Street property and $528,000 ($3.05 per unit) from Partnership cash reserves. The General Partners deferred receipt of their share (approximately $59,000) of the distribution of cash reserves to ensure that the Partnership would have cash on hand to cover all liabilities that may arise while the Partnership winds up its affairs. The amounts deferred were charged against partners' capital and recorded as distributions payable. DEAN WITTER REALTY YIELD PLUS 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 ("GCGA") which owned the One Congress Street property sold the property on August 31, 2000. The Partnership's interest in GCGA was the Partnership's only remaining property interest. The Partnership dissolved pursuant to the terms of its Partnership Agreement, effective August 31, 2000, the date on which the One Congress Street property was sold. 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 in 2001. As discussed in Note 4 to the Financial Statements, on February 27, 2001, the partnership paid, to Limited Partners only, a distribution of $9.10 per Unit. The Partnership believes that its cash reserves are adequate for its needs until it 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 ---------- The decrease in the Partnership's equity in earnings of joint venture was due to the loss of operating income resulting from the August 2000 sale of the One Congress Street property. There were no other individually significant factors which caused fluctuations in the Partnership's operating results for the three- and six-month periods ended June 30, 2001 compared to 2000. 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 or its properties. DEAN WITTER REALTY YIELD PLUS 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. Report on Form 8-K dated August 4, 2000 disclosing the contract to sell the One Congress Street property. DEAN WITTER REALTY YIELD PLUS 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 thereunto duly authorized. DEAN WITTER REALTY YIELD PLUS II, L.P. By: Dean Witter Realty Yield Plus II Inc. Managing General Partner Date: August 9, 2001 By: /s/ E. Davisson Hardman, Jr. ----------------------------------- E. Davisson Hardman, Jr. (President) Date: August 9, 2001 By: /s/ Raymond E. Koch ----------------------------------- Raymond E. Koch Vice President, Assistant Secretary and Controller (Principal Financial and Accounting Officer)

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