-----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, JepIyXCOp7bbYcCd+tYXhwPEcs3t8HR4FWw8hHZ0oDigg5pxAZXQ48sL4v26Ghj+ FX7AAh3O2oSbDh5QSf/dKA== 0000768175-96-000005.txt : 19960502 0000768175-96-000005.hdr.sgml : 19960502 ACCESSION NUMBER: 0000768175-96-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960501 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: KRUPP CASH PLUS LTD PARTNERSHIP CENTRAL INDEX KEY: 0000768175 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 042865878 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14393 FILM NUMBER: 96554731 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 0-14393 Krupp Cash Plus Limited Partnership Massachusetts 04-2865878 (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 CASH PLUS LIMITED PARTNERSHIP BALANCE SHEETS ASSETS
March 31, December 31, 1996 1995 Real estate assets: Retail centers, less accumulated depreciation of $15,791,185 and $15,298,268, respectively $29,815,640 $30,082,471 Mortgage-backed securities ("MBS") (Note 4) 4,909,303 5,151,696 Total real estate assets 34,724,943 35,234,167 Cash and cash equivalents 3,727,377 2,841,353 Other assets 727,945 782,000 Total assets $39,180,265 $38,857,520 LIABILITIES AND PARTNERS' EQUITY (DEFICIT) Accounts payable $ 7,335 $ 6,428 Accrued expenses and other liabilities (Note 2) 1,369,683 963,809 Total liabilities 1,377,018 970,237 Partners' equity (deficit) (Note 3): Limited Partners (4,000,000 Units outstanding) 37,942,109 38,032,296 Corporate Limited Partner (100 Units outstanding) 1,177 1,180 General Partners (140,039) (146,193) Total Partners' equity (deficit) 37,803,247 37,887,283 Total liabilities and Partners' equity (deficit) $39,180,265 $38,857,520
The accompanying notes are an integral part of the financial statements. KRUPP CASH PLUS LIMITED PARTNERSHIP STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 1996 1995 Revenue: Rental $1,547,036 $1,509,244 Interest income - MBS (Note 4) 106,385 120,621 Interest income - other 44,499 27,930 Total revenue 1,697,920 1,657,795 Expenses: Operating (Note 5) 261,227 238,517 Maintenance 75,832 67,051 General and administrative (Note 5) 44,679 41,430 Real estate taxes 295,252 300,472 Management fees (Note 5) 62,499 62,091 Depreciation 492,917 478,792 Total expenses 1,232,406 1,188,353 Net income $ 465,514 $ 469,442 Allocation of net income (Note 3): Unitholders (4,000,000 Units outstanding) $ 456,192 $ 460,042 Net income per Unit of Depositary Receipt $ .11 $ .12 Corporate Limited Partner (100 Units outstanding) $ 11 $ 12 General Partners $ 9,311 $ 9,388
The accompanying notes are an integral part of the financial statements. KRUPP CASH PLUS LIMITED PARTNERSHIP STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1996 1995 Operating activities: Net income $ 465,514 $ 469,442 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 492,917 478,792 Amortization of net MBS premium 263 22 Decrease (increase) in other assets 54,055 (75,739) Decrease in accounts payable (6,093) (31,575) Increase in accrued expenses and other liabilities 405,874 404,170 Net cash provided by operating activities 1,412,530 1,245,112 Investing activities: Increase in other investments - (975,636) Additions to fixed assets (226,086) (179,440) Increase in accounts payable for fixed asset additions 7,000 - Principal collections on MBS 242,130 52,104 Net cash provided by (used in) investing activities 23,044 (1,102,972) Financing activity: Distributions (549,550) (551,908) Net increase (decrease) in cash and cash equivalents 886,024 (409,768) Cash and cash equivalents, beginning of period 2,841,353 2,319,369 Cash and cash equivalents, end of period $3,727,377 $1,909,601
The accompanying notes are an integral part of the financial statements. KRUPP CASH PLUS 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 General Partners of Krupp Cash Plus Limited Partnership (the "Partnership"), the disclosures contained in this Report are adequate to make the information presented not misleading. See Notes to Financial Statements included in the Partnership's Report on Form 10-K for the year ended December 31, 1995 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 (consisting of only normal recurring accruals) necessary to present fairly the Partnership's 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 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) Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consist of the following at March 31, 1996 and December 31, 1995:
March 31, December 31, 1996 1995 Accrued real estate taxes $ 622,709 $685,370 Accrued insurance 125,128 114,397 Prepaid rent 552,772 84,065 Tenant security deposits 48,707 48,707 Other accrued expenses 20,367 31,270 $1,369,683 $963,809
(3) Changes in Partners' Equity (Deficit) A summary of changes in Partners' Equity (Deficit) for the three months ended March 31, 1996 is as follows:
Corporat Total Limited General Partners' Unitholders Partner Partners Equity Balance at December 31, 1995 $38,032,296 $1,180 $(146,193) $37,887,283 Net income 456,192 11 9,311 465,514 Distribution (546,379) (14) (3,157) (549,550) Balance at March 31, 1996 $37,942,109 $1,177 $(140,039) $37,803,24
(4) Mortgage Backed Securities The MBS held by the Partnership are issued by the Federal Home Loan Mortgage Corporation and the Government National Mortgage Association. Additional information on the MBS held is approximated as follows:
March 31, December 31, 1996 1995 Face Value $4,892,886 $5,135,017 Amortized Cost $4,909,303 $5,151,696 Estimated Market Value $5,099,000 $5,435,000
Coupon rates of the MBS range from 8.5% to 9.0% per annum and mature in the years 2008 through 2017. The Partnership's MBS portfolio had gross unrealized gains of approximately $190,000 and $283,500 at March 31, 1996 and December 31, 1995, respectively and no unrealized losses. The Partnership does not expect to realize these gains as it has the intention and ability to hold the MBS until maturity. (5) 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 Unitholders. 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 $ 62,499 $ 62,091 Expense reimbursements 73,780 43,729 Charged to operations $136,279 $105,820
KRUPP CASH PLUS LIMITED PARTNERSHIP 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 upon the operations of its real estate investments. Liquidity is also generated by the MBS portfolio. The Partnership holds MBS that are guaranteed by Government National Mortgage Association ("GNMA") and Federal Home Loan Mortgage Corporation ("FHLMC"). The principal risks in respect of MBS are the credit worthiness of GNMA and FHLMC and the risk that the current value of any MBS may decline as a result of changes in market interest rates. The General Partners believe that the risk is minimal due to the fact that the Partnership has the ability to hold these securities to maturity. The Partnership's sources of future liquidity will be used for payment of expenses related to real estate operations, capital expenditures including tenant build-outs to secure quality tenants, and other administrative expenses. Cash Flow, if any, as calculated under Section 17 of the Partnership Agreement will then be available for distribution to the Partners. The Partnership's retail centers continue to have a relatively consistent level of operating results. However, to attain these results, management has found it necessary to fund a significant portion of tenant build-outs to secure quality tenants in the Partnership's retail centers. The Partnership has ongoing improvements which are necessary at High Point National Furniture Mart to reconfigure space for new tenants and comply with present building code standards. Renovations to an additional floor began in the first quarter of 1996 and are anticipated to be completed in mid-1996. The refurbished show-room spaces have enabled the Partnership to command higher rents and achieve 100% occupancy. Management is currently evaluating leasing issues at Tradewinds. One 17,770 square foot tenant's lease will be terminated as of December 31, 1996. Management is working on finding a new tenant for this space and is negotiating with one of the anchor tenants regarding a possible expansion in 1996. Improvements to the facade at Tradewinds continue in 1996, in order to remain competitive against newer centers. In order to continue to fund the capital improvements noted above, the General Partners have determined that retaining the current annualized distribution rate of approximately $0.55 per Unit will allow the Partnership to maintain adequate reserves to fund the necessary capital improvements. Distributable Cash Flow and Net Cash Proceeds from Capital Transactions Shown below is the calculation of Distributable Cash Flow and Net Cash Proceeds from Capital Transactions as defined by Section 17 of the Partnership Agreement, and the source of cash distributions for the three months ended March 31, 1996 and from the Partnership's inception through 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, Distributable Cash Flow and Net Cash Proceeds From Capital Transactions should not be considered by the reader as a substitute to net income, as an indicator of the Partnership's operating performance or to cash flows as a measure of liquidity.
(In $1,000's except per Unit amounts) For the Three Months Inception to Ended March 31, March 31, 1996 1996 Distributable Cash Flow: Net income for tax purposes $ 552 $ 22,492 Items not requiring or (not providing) the use of operating funds: Tax basis depreciation and amortization 420 16,928 Interest income on note receivable - (371) Gain on sale of assets - (1,686) Additions to fixed assets (226) (8,126) Cash from vacancy guarantee on Luria's Plaza - 873 Fixed asset additions funded from cash reserves - 865 Operating reserve for fixed asset additions - (1,070) Total Distributable Cash Flow ("DCF") $ 746 $ 29,905 Limited Partners' Share of DCF $ 731 $ 29,306 Limited Partners' Share of DCF per Unit $ .18 $ 7.32 General Partners' Share of DCF $ 15 $ 598 Net Proceeds from Capital Transactions: Principal collections on MBS, net $ 242 $ 14,695 Proceeds from sale of MBS - 19,018 Net proceeds from sale of property including interest on mortgage note receivable - 1,208 Mortgage note - 7,150 Reinvestment of MBS principal collections - (16,141) Total Net Proceeds from Capital Transactions $ 242 $ 25,930 Distributions: Limited Partners $ 546(a) $ 54,343(b)(d) Limited Partners' Average per Unit $ .14(a) $ 13.59(b)(c)(d) General Partners $ 15(a) $ 597(b) Total Distributions $ 561(a) $ 54,940(b)
(a) Represents an estimate of the distribution to be paid in May, 1996. (b) Includes an estimate of the distribution to be paid in May, 1996. (c) Includes a $7,150,000 note which was distributed from the Partnership to the Evergreen Plaza Note-Holding Trust whose beneficiaries were the Partnership's Unitholders on record on May 31, 1990. (d) Limited Partners' average per Unit return of capital as of May, 1996 is $6.27 [$13.59 - $7.32]. Operations Distributable Cash Flow decreased for the three months ended March 31, 1996, as compared to the first three months in 1995, due to an increase in capital improvements at the Partnership's properties. The Partnership experienced increased rental revenues during the first three months of 1996, as compared to the same period in 1995. The increase is attributable to increased occupancy rates at all the Partnership's properties. At High Point, refurbished showroom spaces allow for higher rents in 1996 as additional floors are renovated. Exterior improvements at Luria's Plaza have made it more attractive to new tenants, increasing occupancy as compared to first quarter of 1995. Occupancy at Tradewinds has also increased as compared to the first quarter of 1995, due to a new tenant lease in late 1995. MBS interest income decreased during the first quarter of 1996, as compared the first quarter of 1995 due to large prepayments of principal which took place through the first half of 1995. As interest rates rose in 1995, these prepayments declined. During the same time period, interest income earned on commercial paper investments has increased due to higher average cash and cash equivalent balances. In the first quarter of 1996, as compared to the first quarter of 1995, operating and maintenance expenses increased due to adverse weather conditions at the Partnership's properties increasing both utility consumption and snow removal expenditures. Depreciation expense increased in conjuction with the fixed assets 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 CASH PLUS 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 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 Cash Plus Limited Partnership (Registrant) By: /s/Robert A. Barrows Robert A. Barrows Treasurer and Chief Accounting Officer of The Krupp Corporation, a General Partner. Date: April 29, 1996 EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CASH PLUS I FINANCIAL STATEMENTS FROM THE QUARTER ENDED MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATMENTS. 3-MOS DEC-31-1996 MAR-31-1996 3,727,377 4,909,303 505,819 0 0 222,126 45,606,825 15,791,185 39,180,265 1,377,018 0 0 0 37,803,247 0 39,180,265 1,697,920 1,697,920 0 0 1,232,406 0 0 465,514 0 465,514 0 0 0 465,514 0 0 Represents total equity of general partners ($140,039) and limited partners $37,943,286. Includes operating expenses of $261,227, real estate taxes of $295,252 and depreciation expense of $492,917. Net income allocated $9,311 to general partners, $456,192 to limited partners, for the three months ended March 31, 1996. Average net income is .11 per unit $4,000,000 units outstanding.
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