-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UIX6iQ+/A8Lp7pCdkv/mXtakXSnVgYGyK1rjs7X7iXF3CX2z4UsWESfz+6VK4Arj 2nGkb6+pvb9+L9nMt08mFg== 0000710389-96-000005.txt : 19960509 0000710389-96-000005.hdr.sgml : 19960509 ACCESSION NUMBER: 0000710389-96-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960508 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: KRUPP REALTY LTD PARTNERSHIP IV CENTRAL INDEX KEY: 0000710389 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 042772783 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-11987 FILM NUMBER: 96557691 BUSINESS ADDRESS: STREET 1: C/O BERKSHIRE REALTY AFFILIATES STREET 2: 470 ATLANTIC AVENUE CITY: BOSTON STATE: MA ZIP: 02210 BUSINESS PHONE: 6174232233 MAIL ADDRESS: STREET 1: C/O BERKSHIRE REALTY AFFILIATES STREET 2: 470 ATLANTIC AVENUE CITY: BOSTON STATE: MA ZIP: 02210 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 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 0-11987 Krupp Realty Limited Partnership-IV Massachusetts 04-2772783 (State or other jurisdiction of (IRS employer incorporation or organization) identification no.) 470 Atlantic Avenue, Boston, Massachusetts 02210 (Address of principal executive offices) (Zip Code) (617) 423-2233 (Registrant's telephone number, including area code) 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. CONSOLIDATED FINANCIAL STATEMENTS KRUPP REALTY LIMITED PARTNERSHIP-IV AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS March 31, December 31, 1996 1995 Multi-family apartment complexes, net of accumulated depreciation of $23,189,833 and $22,689,200, respectively $16,642,562 $17,088,634 Cash and cash equivalents 2,405,593 2,802,694 Cash restricted for capital improvements 16,595 19,066 Prepaid expenses and other assets 426,074 653,387 Deferred expenses, net of accumulated amortization of $116,720 and $103,355, respectively 281,938 295,303 Total assets $19,772,762 $20,859,084 LIABILITIES AND PARTNERS' DEFICIT Mortgage notes payable $20,753,300 $20,938,160 Accounts payable 27,233 61,162 Due to affiliates (Note 3) 37,528 97,840 Other liabilities 691,547 954,992 Total liabilities 21,509,608 22,052,154 Partners' equity (deficit) (Note 2): Investor Limited Partners (30,000 Units outstanding) (194,060) 322,527 Original Limited Partner (1,266,870) (1,245,119) General Partners (275,916) (270,478) Total Partners' deficit (1,736,846) (1,193,070) Total liabilities and Partners' deficit $19,772,762 $20,859,084 The accompanying notes are an integral part of the consolidated financial statements. KRUPP REALTY LIMITED PARTNERSHIP-IV AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Three Months Ended March 31, 1996 1995 Revenue: Rental $1,802,209 $1,701,812 Other Income 41,941 36,911 Total revenue 1,844,150 1,738,723 Expenses: Operating (Note 3) 566,621 445,717 Maintenance 130,977 123,290 Real estate taxes 168,713 151,937 General and administrative (Note 3) 23,034 18,722 Management fees (Note 3) 68,636 69,764 Depreciation and amortization 513,998 515,904 Interest 325,207 329,284 Total expenses 1,797,186 1,654,618 Income before minority interest 46,964 84,105 Minority interest (1,315) (458) Net income $ 45,649 $ 83,647 Allocation of net income (Note 2): Investor Limited Partner Interest (30,000 Units outstanding) $ 43,367 $ 79,465 Per Unit of Investor Limited Partner $ 1.45 $ 2.65 Original Limited Partner $ 1,826 $ 3,346 General Partners $ 456 $ 836 The accompanying notes are an integral part of the consolidated financial statements. KRUPP REALTY LIMITED PARTNERSHIP-IV AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS __________ For the Three Months Ended March 31, 1996 1995 Operating activities: Net income $ 45,649 $ 83,647 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 513,998 515,904 Decrease in prepaid expenses and other assets 227,313 332,354 Decrease in other liabilities (263,445) (237,283) Increase (decrease) in accounts payable (40,095) 14,232 Increase (decrease) in due to affiliates (60,312) 106,095 Net cash provided by operating activities 423,108 814,949 Investing activities: Decrease in cash restricted for capital improvements 2,471 4,333 Increase in other investments - (486,995) Increase in accounts payable for fixed asset additions 6,166 - Additions to fixed assets (54,561) (43,916) Net cash used in investing activities (45,924) (526,578) Financing activities: Principal payments on mortgage notes payable (184,860) (180,783) Distributions (589,425) (441,958) Increase in deferred expenses - (1,826) Net cash used in financing activities (774,285) (624,567) Net decrease in cash and cash equivalents (397,101) (336,196) Cash and cash equivalents, beginning of period 2,802,694 2,500,074 Cash and cash equivalents, end of period $2,405,593 $2,163,878 The accompanying notes are an integral part of the consolidated financial statements. KRUPP REALTY LIMITED PARTNERSHIP-IV AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) Accounting Policies Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in this report on Form 10-Q pursuant to the Rules and Regulations of the Securities and Exchange Commission. In the opinion of the General Partners of Krupp Realty Limited Partnership-IV and Subsidiaries (the "Partnership"), the disclosures contained in this report are adequate to make the information presented not misleading. See Notes to Consolidated Financial Statements included in the Partnership's Annual Report on Form 10-K for the year ended December 31, 1995 for additional information relevant to significant accounting policies followed by the Partnership. The consolidated financial statements present consolidated assets, liabilities and operations of Pavillion Partners, Ltd., Westbridge Partners, Ltd., and Krupp Realty Limited Partnership-IV. Westcop Corporation has a 1% interest in the operations Westbridge Partners, Ltd. and Pavillion Partners, Ltd. At March 31, 1996, minority interest of $27,478 is included in other liabilities. In the opinion of the General Partners of the Partnership, the accompanying unaudited consolidated financial statements reflect all adjustments (consisting of only normal recurring accruals) necessary to present fairly the Partnership's consolidated financial position as of March 31, 1996 and its results of operations and cash flows for the three months ended March 31, 1996 and 1995. Certain prior year balances have been reclassified to conform with the current year consolidated financial statement presentation. The results of operations for the three months ended March 31, 1996 are not necessarily indicative of the results which may be expected for the full year. See Management's Discussion and Analysis of Financial Condition and Results of Operations included in this report. (2) Changes in Partners' Deficit A summary of changes in Partners' equity (deficit) for the three months ended March 31, 1996 is as follows: Investor Original Total Limited Limited General Partners' Partners Partner Partners Deficit Balance at December 31, 1995 $ 322,527 $(1,245,119) $(270,478) $(1,193,070) Net income 43,367 1,826 456 45,649 Distributions (559,954) (23,577) (5,894) (589,425) Balance at March 31, 1996 $(194,060) $(1,266,870) $(275,916) $(1,736,846) (3) Related Party Transactions Commencing with the date of acquisition of the Partnership's properties, the Partnership entered into agreements under which property management fees are paid to an affiliate of the General Partners for services as management agent. Such agreements provide for management fees payable monthly at a rate of 5% of the gross receipts from the properties under management. The Partnership also reimburses affiliates of the General Partners for certain expenses incurred in connection with the operation of the Partnership and its properties including accounting, computer, insurance, travel, legal and payroll; and with the preparation and mailing of reports and other communications to the Limited Partners. Amounts accrued or paid to the General Partners or their affiliates were as follows: For the Three Months Ended March 31, 1996 1995 Property management fees $ 68,636 $69,764 Expense reimbursements 63,236 12,350 Charged to operations $131,872 $82,114 Due to affiliates consists of the following: March 31, December 31, 1996 1995 Expense reimbursements $37,528 $ 97,840 KRUPP REALTY LIMITED PARTNERSHIP-IV AND SUBSIDIARIES Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources The Partnership's ability to generate cash adequate to meet its needs is dependent primarily on the operations of its remaining real estate investments. Such ability would also be impacted by the future availability of bank borrowings, and upon future refinancing and sale of the Partnership's real estate investments and the collection of any mortgage receivables which may result from such sales. These sources of liquidity will be used by the Partnership for payment of expenses related to real estate operations, capital improvements, refinancing and expenses. Cash Flow, if any, is calculated under Section 8.2(a) of the Partnership Agreement, will then be available for distribution to the Partners. Due to improvements in the operations of the properties and reduced debt service, the Partnership has been able to increase semi-annual distributions from an annual rate of $28.00 per Unit in 1995, to approximately $37.33 per Unit in 1996. In the first quarter of 1996, the Partnership continued capital improvements at its properties and anticipates that these improvements will continue throughout the year. These improvements consist of interior enhancements which include replacement of appliances, carpeting and vinyl flooring. The Partnership believes that these improvements are necessary to compete with current market conditions, produce quality rental units and absorb excess market supply at the properties' respective locations. Cash Flow Shown below is the calculation of Cash Flow as defined by Section 8.2(a) of the Partnership Agreement for the three months ended March 31, 1996. The General Partners provide certain of the information below to meet requirements of the Partnership Agreement and because they believe that it is an appropriate supplemental measure of operating performance. However, Cash Flow should not be considered by the reader as a substitute to net income (loss), as an indicator of the Partnership's operating performance or to cash flows as a measure of liquidity. Rounded to $1,000 Net loss for tax purposes $ (46,000) Items not requiring or (requiring) the use of operating funds: Tax basis depreciation and amortization 479,000 Tax basis principal payments on mortgage (58,000) Expenditures for capital improvements (55,000) Working capital reserves (25,000) Cash Flow $ 295,000 Operations Cash Flow, net of working capital reserves, decreased in the first quarter of 1996, as compared to the first quarter of 1995, as a result of both increased capital improvement expenditures and increased operating and maintenance expenses. Revenue increased in the first three months of 1996, as compared to the first three months of 1995, as a result of increased rental rates implemented in 1995 at the Partnerships' properties. In the first three months of 1996, as compared to the first three months of 1995, operating and maintenance expenses increased due to both a rise in utility consumption at all the Partnership's properties, combined with an increase in snow removal expenditures at Fenland Field as a result of the harsh weather conditions. Real estate taxes increased due to an increase in the assessed value of Walden Pond. Depreciation expense increased in conjunction with fixed asset expenditures in 1995, and the first three months of 1996. General In accordance with Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of", which is effective for fiscal years beginning after December 15, 1995, the Partnership has implemented policies and practices for assessing impairment of its real estate assets. The investments in properties are carried at cost less accumulated depreciation unless the General Partners believe there is a significant impairment in value, in which case a provision to write down investments in properties to fair value will be charged against income. At this time, the General Partners do not believe that any assets of the Partnership are significantly impaired. KRUPP REALTY LIMITED PARTNERSHIP-IV AND SUBSIDIARIES PART II - OTHER INFORMATION Item 1. Legal Proceedings Response: None Item 2. Changes in Securities Response: None Item 3. Defaults upon Senior Securities Response: None Item 4. Submission of Matters to a Vote of Security Holders Response: None Item 5. Other Information Response: None Item 6. Exhibits and Reports on Form 8-K Response: None 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. Krupp Realty Limited Partnership-IV (Registrant) BY: /s/Robert A. Barrows Robert A. Barrows Treasurer and Chief Accounting Officer of the Krupp Corporation, a General Partner. DATE: May 7, 1996 EX-27 2
5 This schedule contains summary financial information extracted from Fund IV Financial Statements for the quarter ended March 31, 1996 and is qualified in its entirety by reference to such financial statements. 3-MOS DEC-31-1996 MAR-31-1996 2,422,188 0 16,763 0 0 409,311 40,231,053 23,306,553 19,772,762 756,308 20,753,300 0 0 1,736,846 0 19,772,762 1,844,150 1,844,150 0 0 1,471,979 0 325,207 45,649 0 45,649 0 0 0 45,649 0 0 Includes apartment complexes of $39,832,395 and deferred expenses of $398,658. Includes depreciation of $23,189,833 and amortization of deferred expenses of $116,720. Represents mortgage notes payable. Represents total deficit of General and Limited Partners of ($275,916) and ($1,460,930), respectively. Includes operating expenses of $556,621, real estate tax expenses of $168,713 and depreciation and amortization of $513,998 and minority interest of $168,713. Net income allocated $456 General Partners, $1,826 Original Limited Partners and $43,367 to the Investor Limited Partners, for the three months ended March 31, 1996. Average net income per Unit of Limited Partners Interest is $1.45 on 30,000 Units outstanding.
-----END PRIVACY-ENHANCED MESSAGE-----