10-Q 1 de-yp10q93001.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 September 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: 0-18148 DEAN WITTER REALTY YIELD PLUS, L.P. ----------------------------------- (Exact name of registrant as specified in governing instrument) Delaware 13-3426531 -------- ---------- (State of organization) (IRS Employer Identification No.) 1221 Avenue of the Americas, New York, NY 10020 ----------------------------------------- ----- (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, L.P. CONSOLIDATED BALANCE SHEETS

See accompanying notes to consolidated financial statements DEAN WITTER REALTY YIELD PLUS, L.P. CONSOLIDATED STATEMENTS OF OPERATIONS THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000

See accompanying notes to consolidated financial statements DEAN WITTER REALTY YIELD PLUS, L.P. CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL (DEFICIENCY) NINE MONTHS ENDED SEPTEMBER 30, 2001 LIMITED GENERAL PARTNERS PARTNERS TOTAL ------------ ------------ ------------ Partners' capital (deficiency) at January 1, 2000 $ 26,110,582 $ (7,308,074) $ 18,802,508 Net loss (24,467) 1,933 (22,534) Cash distribution (13,364,953) -- (13,364,953) ------------ ------------ ------------ Partners' capital (deficiency) at September 30, 2001 $ 12,721,162 $ (7,306,141) $ 5,415,021 ============ ============ ============ See accompanying notes to consolidated financial statements DEAN WITTER REALTY YIELD PLUS, L.P. CONSOLIDATED STATEMENTS OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000

See accompanying notes to consolidated financial 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 has 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, Deptford Crossing Associates and the entities which jointly owned the Military Crossing land on a consolidated basis. All significant intercompany accounts and transactions have been eliminated. The Partnership's 58% share of the general partnership interest in GCGA Limited Partnership ("GCGA"), the partnership which owned the One Congress Street property (sold August 31, 2000), was accounted for under the equity method. The remaining 42% general partnership interest in GCGA was owned by Dean Witter Realty Yield Plus II, L.P. ("YPII"), an affiliate. The Partnership's records are maintained on the accrual basis of accounting for financial reporting and tax purposes. Net (loss) income per Unit amounts are 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 necessary to present fairly the results for the interim periods. Except for the losses on sales of real estate and the gain on the sale of the One Congress Street property included in the equity in earnings of joint venture amounts in 2000, such adjustments consist only 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, 2000. 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. INVESTMENT 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 58% share of such escrow deposit was approximately $700,000. The Managing General Partner expects that the remaining repair work will be completed in the Fall 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 financial information of GCGA are as follows:

DEAN WITTER REALTY YIELD PLUS, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2. INVESTMENT IN JOINT VENTURE (CONT'D) The property was sold in August 2000. GCGA's second mortgage loan (the "Loan") was the participating mortgage loan from the Partnership (58%) and YPII (42%). The balance of the Loan at the date of closing of the sale was approximately $90.3 million. Since GCGA only received net sale proceeds of $75.9 million and had only $3.2 million of additional assets at September 30, 2000, GCGA was not able to repay the Loan in full. As a result, the Partnership and YPII jointly forgave the unpaid Loan balance (approximately $11.2 million; the Partnership's share of this balance was $6.5 million). The Partnership did not recognize interest income and a loss on extinquishment of debt on its share of the Loan; instead, the Partnership recognized its share of GCGA's earnings exclusive of all Loan activity. 3. SALE OF REAL ESTATE During the third quarter of 2001, the Partnership incurred approximately $42,000 of additional costs in connection with the December 2000 sale of the Deptford Crossing property. 4. RELATED PARTY TRANSACTIONS Realty performs administrative functions, processes investor transactions and prepares tax information for the Partnership. For the nine-month periods ended September 30, 2001 and 2000, the Partnership incurred approximately $27,000 and $51,000, respectively, for these services. These amounts are included in general and administrative expenses. The affiliate has also paid certain expenses on behalf of the Partnership. At September 30, 2001, the Partnership's accounts payable and other liabilities include approximately $57,000 due to the affiliate. 5. DISTRIBUTIONS On January 31, 2001, the Partnership paid a distribution, to Limited Partners only, of approximately $13.4 million ($1.50 per Unit), consisting of approximately $10.2 million ($1.14 per Unit) from a portion of the net proceeds received from the December 2000 sale of the Deptford Crossing property and $3.2 million ($0.36 per Unit) from the remaining undistributed proceeds from the August 2000 sale of the One Congress Street property. 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 terminate 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 5 to the financial statements, on January 31, 2001, the Partnership paid, to Limited Partners only, a distribution of $1.50 per Unit. The Managing General Partner believes that the Partnership's remaining cash reserves are adequate to fund all of the Partnership's cash requirements while the Partnership winds up its affairs. In July 2001, the Partnership received approximately $274,400, the remaining proceeds (plus interest) from the sale of the Deptford Crossing property. Such proceeds had been placed in escrow to secure the Partnership's obligations, if any, pursuant to its representations and warranties in the property's purchase and sale agreement. At December 31, 2000, the Partnership's other assets included approximately $500,000 of receivables relating to the Deptford sale; all such amounts were collected in 2001. The Partnership plans to distribute the remaining undistributed proceeds from the Deptford sale (approximately $700,000, which is payable to Limited Partners only) and Partnership cash reserves when the Partnership concludes winding up its affairs. The office of the Managing General Partner was located at the World Trade Center in New York. The Partnership did not hold any assets at this location. The Managing General Partner does not expect that the September 11, 2001 tragedy at the World Trade Center will adversely affect the operations of the Partnership. 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. DEAN WITTER REALTY YIELD PLUS, L.P. OPERATIONS The absence of rental revenues and depreciation and amortization expenses in 2001 and the decrease in property operating expenses in 2001 compared to 2000 were due to the sale of the Deptford Crossing property in December 2000. During the nine months ended September 30, 2001, property operating expenses primarily consisted of approximately $100,000 in connection with the wind-up of the operations of the Deptford Crossing property and $50,000 in connection with the above-mentioned 401 East Ontario Street litigation. The decreases in the Partnership's equity in earnings of joint venture amounts in 2001 compared to 2000 were due to the absence in 2001 of the Partnership's share of the gain on the August 2000 sale of the One Congress Street property (approximately $26.6 million). The gain on sale included in the equity in earnings amounts in 2000 was partially offset by the Partnership's share of parking garage repair costs (approximately $1,312,000 and $994,000 for the nine and three months ended September 30, 2000, respectively). The losses on sale of real estate in 2001 were due to additional costs that the Partnership incurred in connection with the sale of the Deptford Crossing property during the third quarter of 2001. The loss on sale of real estate in 2000 resulted from the February 2000 sale of the Military Crossing land. Interest and other income decreased in 2001 compared to 2000 because interest earned on the proceeds from the One Congress Street sale in September 2000 before such proceeds were distributed to the Limited Partners was greater than interest earned on the Deptford sale in January 2001 before such proceeds were distributed. General and administrative expenses have decreased in 2001 compared to 2000 because the Partnership is winding up its affairs in 2001. There were no other individually significant factors which caused significant fluctuations in the Partnership's operating results for the three- and nine-month period ended September 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, 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 September 11, 2001, disclosing the change of the address of the Partnership's executive office due to the destruction of the World Trade Center. 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: November 13, 2001 By: /s/ E. Davisson Hardman, Jr. ---------------------------- E. Davisson Hardman, Jr. (President) Date: November 13, 2001 By: /s/ Raymond E. Koch ------------------- Raymond E. Koch Vice President, Assistant Secretary and Controller (Principal Financial and Accounting Officer)

DEAN WITTER REALTY YIELD PLUS L P 10-Q