-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, KMcD03013fHgjLLbXc/7Fp0mMLEMxLIkSYz+TYEW9bqBaSOrPIt/X3x/oSWZuPAa PfjHxTJYLeZfTknEFe9TBA== 0000757549-95-000009.txt : 19950814 0000757549-95-000009.hdr.sgml : 19950814 ACCESSION NUMBER: 0000757549-95-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950811 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: KRUPP INSTITUTIONAL MORTGAGE FUND LTD PARTNERSHIP CENTRAL INDEX KEY: 0000757549 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 042860302 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14378 FILM NUMBER: 95561054 BUSINESS ADDRESS: STREET 1: 470 ATLANTIC AVE 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 June 30, 1995 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 0-14378 Krupp Institutional Mortgage Fund Limited Partnership Massachusetts 04-2860302 (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. FINANCIAL STATEMENTS KRUPP INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP BALANCE SHEETS ASSETS
June 30, December 31, 1995 1994 Mortgage notes receivable, net of loan loss reserve of $16,524,000 (Notes 2 and 3) $11,809,503 $11,822,403 Cash and cash equivalents 1,297,264 1,026,664 Accrued interest receivable - mortgage notes, net of reserve for uncollectible interest of $8,519,381 and $7,584,144, respectively (Note 3) 195,872 231,116 Other assets 1,906 12,003 Total assets $13,304,545 $13,092,186 LIABILITIES AND PARTNERS' EQUITY Liabilities $ 10,324 $ 14,324 Partners' equity (Note 4) 13,294,221 13,077,862 Total liabilities and partners' equity $13,304,545 $13,092,186
The accompanying notes are an integral part of the financial statements. KRUPP INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP STATEMENTS OF OPERATIONS
For the Three For the Six Months Ended Months Ended June 30, June 30, 1995 1994 1995 1994 Interest income: Mortgage notes receivable (Notes 2 and 3) $219,745 $263,339 $538,459 $487,992 Cash equivalents 16,566 10,931 30,453 18,433 Total interest income 236,311 274,270 568,912 506,425 Expenses: Expense reimbursements to affiliates 12,816 26,836 25,632 53,671 General and administrative 16,283 18,845 23,295 34,113 Total expenses 29,099 45,681 48,927 87,784 Net income $207,212 $228,589 $519,985 $418,641 Allocation of net income (Note 4): Per Unit of Limited Partner Interest (30,059 Units outstanding) $ 6.82 $ 7.53 $ 17.13 $ 13.79 General Partners $ 2,072 $ 2,286 $ 5,200 $ 4,186
The accompanying notes are an integral part of the financial statements. KRUPP INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 1995 1994 Operating activities: Net income $ 519,985 $ 418,641 Adjustments to reconcile net income to net cash provided by operating activities: Changes in assets and liabilities: Decrease (increase) in accrued interest receivable-mortgage notes 35,244 (212,968) Decrease (increase) in other assets 10,097 (1,274) Increase (decrease) in liabilities (4,000) 5,183 Net cash provided by operating activities 561,326 209,582 Investing activity: Decrease in mortgage notes receivable 12,900 11,678 Financing activity: Distributions (303,626) (227,720) Net increase (decrease) in cash and cash equivalents 270,600 (6,460) Cash and cash equivalents, beginning of period 1,026,664 992,640 Cash and cash equivalents, end of period $1,297,264 $ 986,180
The accompanying notes are an integral part of the financial statements. KRUPP INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP NOTES TO 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 Krupp Corporation and The Krupp Company Limited Partnership-III ("Krupp Co.-III"), the General Partners of Krupp Institutional Mortgage Fund Limited Partnership (the "Partnership"), the disclosures contained in this report are adequate to make the information presented not misleading. See Notes to Financial Statements in the Partnership's Annual Report on Form 10-K for the year ended December 31, 1994 for additional information relevant to significant accounting policies followed by the Partnership. In the opinion of the General Partners of the Partnership, the accompanying unaudited financial statements reflect all adjustments necessary to present fairly the Partnership's financial position as of June 30, 1995, its results of operations for the three and six months ended June 30, 1995 and 1994, and cash flows for the six months ended June 30, 1995 and 1994. The results of operations for the three and six months ended June 30, 1995 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) Krupp Equity Limited Partnership ("KELP") Condensed financial statements of KELP are as follows: CONDENSED BALANCE SHEETS
ASSETS June 30, December 31, 1995 1994 Property, at cost $30,730,504 $30,660,597 Property valuation provision (5,400,000) (5,400,000) Accumulated depreciation (9,529,851) (9,380,069) 15,800,653 15,880,528 Other assets 860,535 1,047,545 Total assets $16,661,188 $16,928,073
Continued KRUPP INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS, Continued (2) Krupp Equity Limited Partnership ("KELP"), Continued LIABILITIES AND PARTNERS' DEFICIT
June 30, December 31, 1995 1994 Mortgage notes payable to KIMF $ 28,333,503 $ 28,346,403 Mortgage notes payable 7,610,347 7,676,531 Notes payable to an affiliate 300,000 300,000 Accrued interest payable to an affiliates 9,004,381 8,089,139 Due to affiliates 624,097 669,473 Other liabilities 496,841 605,065 Total liabilities 46,369,169 45,686,611 Partners' deficit (29,707,981) (28,758,538) Total liabilities and partners' deficit $ 16,661,188 $ 16,928,073
CONDENSED STATEMENTS OF OPERATIONS
For the For the Three Months Ended Six Months Ended June 30, June 30, 1995 1994 1995 1994 Revenues $ 849,533 $1,161,971 $ 1,722,817 $ 2,280,793 Property operating expenses (359,422) (613,039) (674,596) (1,239,604) Income before depreciation, amortization and interest 490,111 548,932 1,048,221 1,041,189 Depreciation and amortization (79,472) (319,310) (158,196) (634,242) Interest expense (923,162) (1,034,244) (1,839,468) (2,059,556) Net loss $(512,523) $ (804,622) $ (949,443) $(1,652,609)
(3) Accrued Interest Receivable The Partnership has recorded additional reserves for uncollectible interest of $935,237 for 1995. The General Partners have estimated that $195,872 of the current interest receivable due on the Participating Notes is collectible. The mortgage note and interest reserves are recorded against the carrying value of the assets to reflect management's current estimates of the underlying property values which, given the inherent uncertainty of real estate valuation in the current market, could differ significantly from the ultimate value obtained from such properties. Continued KRUPP INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS, Continued (3) Accrued Interest Receivable - Continued The Partnership has waived for 90 days the right to pursue its foreclosure remedies. It has received a payment equal to cash flow net of operating and administrative expenses and first mortgage obligations. This waiver is effective only with respect to the payment due July 1995, and KIMF reserves its rights to take any action to which it is entitled in the event any future event of default occurs. (4) Summary of Changes in Partners' Equity A summary of changes in partners' equity (deficit) for the six months ended June 30, 1995 is as follows:
Total Limited General Partners' Partners Partners Equity Balance at December 31, 1994 $13,246,687 $(168,825) $13,077,862 Net income 514,785 5,200 519,985 Cash distributions (300,590) (3,036) (303,626) Balance at June 30, 1995 $13,460,882 $(166,661) $13,294,221
KRUPP INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources Currently, the Partnership has sufficient liquidity to meet its operating needs. The most significant capital need is distributions to investors. However, distributions are currently dependent on cash flow received from KELP's interest payments on the Participating Notes based upon the cash flow of the underlying properties. KELP's properties have not generated cash flow sufficient to meet the terms of their existing obligations. Historically, retail centers have suffered from an economic downturn in retail sales beginning in the late 1980s. Recently, the properties have maintained a consistent level of operating cash flow. However, the properties held by KELP have not materially increased in value since the depressed state of the real estate markets in much of the United States made it unlikely that the properties would be sold at other than very unattractive prices. The partners of KELP have made cumulative capital contributions of approximately $4,673,000 to cover prior operating deficits and have arranged for certain short-term borrowings. Additionally, the affiliated management agent has not received payment of management fees since 1991. The General Partners of the Partnership have declined to proceed toward foreclosure because they determined that there were advantages to allowing KELP to continue to own the properties. By proceeding in this fashion, the General Partners are seeking to avoid a disposition of the portfolio at "forced liquidation" prices. The General Partners intend to closely monitor the operations of each property and the state of the market in which each property is located. At such time as the Partnership believes the disposition of a property by KELP would produce an attractive level of proceeds to the Partnership under the Master Loan Agreement, the General Partners will take the appropriate steps on behalf of the Partnership to require a sale by KELP or commence foreclosure proceedings with respect to such property. Operations The increase in interest earned on cash equivalents for the three and six months ended June 30, 1995 as compared to the same periods in 1994 is due to higher interest rates and balances of investments. Mortgage interest income for the three and six months ended June 30, 1995, as compared to the same periods in 1994, increased due to higher cash flow payments from the KELP properties. Additionally, the Partnership has experienced a reduction in expenses due to savings in investor service costs during the three and six months ended June 30, 1995. These cost savings are anticipated to continue throughout 1995. Distributable Cash from Operations Distributable Cash from Operations, as defined by Section 5.1 of the Partnership Agreement, is equivalent to the net income of the Partnership. Continued KRUPP INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Continued KELP's Results of Operations The following table reflects the analysis of KELP's cash flow for the three and six months ended June 30, 1995 and 1994:
For the For the Three Months Six Months Ended June 30, Ended June 30, 1995 1994 1995 1994 Cash flow from Properties before mortgage debt service and capital improvement expenditures and reserves $ 475,000 $ 612,000 $1,040,000 $1,175,000 Mortgage debt service exclusive of amounts due to Partnership (238,000) (358,000) (477,000) (715,000) Capital improvement expenditures (45,000) (15,000) (70,000) (21,000) Release of (contribution to) capital improvement reserve 4,000 - (2,000) - Cash flow from properties before mortgage debt service to the Partnership 196,000 239,000 491,000 439,000 Mortgage debt service to the Partnership (196,000) (239,000) (491,000) (439,000) KELP general and administrative expenses (7,000) (1,000) (13,000) (15,000) Cash (Deficit) (1) $ (7,000) $ (1,000) $ (13,000) $ (15,000)
(1) Cash deficit equals net loss plus depreciation, amortization, unpaid Participating Note interest less mortgage principal payments, and capital improvement expenditures and capital improvement reserves. KRUPP INSTITUTIONAL MORTGAGE FUND LIMITED PARTNERSHIP 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 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. Krupp Institutional Mortgage Fund Limited Partnership (Registrant) BY: /s/Marianne Pritchard Marianne Pritchard Treasurer of The Krupp Corporation, a General Partner DATE: August 4, 1995 EX-27 2
5 This schedule contains summary financial information extracted from the KIMF financial statement for the quarter ended June 30, 1995 and is qualified in its entirety by reference to such financial statements. 6-MOS DEC-31-1995 JUN-30-1995 1,297,264 0 28,529,375 16,524,000 0 13,302,639 1,906 0 13,304,545 10,234 0 0 0 0 0 13,304,545 0 568,912 0 0 48,927 0 0 0 0 0 0 0 0 519,985 0 0 Other assets
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