-----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, IM0HpLnsnOis76LlZ1ChTO3NaBfvtIMvn2AKRs+GeYxKfvyWVEaA3oBM3R3R2P9U M9Q3sW6y1mtYM9BwTzOycQ== 0001169232-03-006454.txt : 20031110 0001169232-03-006454.hdr.sgml : 20031110 20031110135826 ACCESSION NUMBER: 0001169232-03-006454 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20030930 FILED AS OF DATE: 20031110 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KRUPP INSURED PLUS III LIMITED PARTNERSHIP CENTRAL INDEX KEY: 0000832091 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] IRS NUMBER: 043007489 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-17691 FILM NUMBER: 03987712 BUSINESS ADDRESS: STREET 1: ONE BEACON ST CITY: BOSTON STATE: MA ZIP: 02108 BUSINESS PHONE: 6175230066 MAIL ADDRESS: STREET 1: ONE BEACON ST CITY: BOSTON STATE: MA ZIP: 02108 10-Q 1 d57359_10q.txt QUARTERLY REPORT --------------------------- OMB APPROVAL --------------------------- OMB Number: 3235-0070 Expires: March 31, 2006 Estimated average burden hours per response: 192.00 --------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2003 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 0-17691 Krupp Insured Plus - III Limited Partnership (Exact name of registrant as specified in its charter) Massachusetts 04-3007489 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) One Beacon Street, Boston, Massachusetts 02108 (Address of principal executive offices) (Zip Code) (617) 523-0066 (Registrant's telephone number, including area code) N/A (Former name, former address and former fiscal year, if changed since last report) 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 |_| Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes |_| No |X| SEC 1296 (08-03) Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. PART I. FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. When used in this Form 10-Q, the words "believes," "anticipates," "expects," "plans," "intends," "estimates," "continue," "may" or "will" (or the negative of such words) and similar expressions are intended to identify forward-looking statements. Such statements are subject to a number of risks and uncertainties, including but not limited to the following: federal, state or local regulations; adverse changes in general economic or local conditions; pre-payments of mortgages; failure of borrowers to pay participation interests due to poor operating results of properties underlying the mortgages; uninsured losses and potential conflicts of interest between the Partnership and its Affiliates, including the General Partners. The Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2002, contain additional information concerning such risk factors. Actual results in the future could differ materially from those described in any forward-looking statements as a result of the risk factors set forth above, and the risk factors described in the Annual Report. -2- KRUPP INSURED PLUS-III LIMITED PARTNERSHIP BALANCE SHEETS -------------- ASSETS
September 30, December 31, 2003 2002 ------------- ------------ Participating Insured Mortgages ("PIMs")(Note 2) $ 12,809,346 $ 12,893,859 Mortgage-Backed Securities and insured mortgage ("MBS")(Note 3) 1,473,337 10,157,171 ------------ ------------ Total mortgage investments 14,282,683 23,051,030 Cash and cash equivalents 1,338,039 1,209,070 Interest receivable and other assets 100,288 156,686 ------------ ------------ Total assets $ 15,721,010 $ 24,416,786 ============ ============ LIABILITIES AND PARTNERS' EQUITY Liabilities $ 23,547 $ 40,505 ------------ ------------ Partners' equity (deficit)(Note 4): Limited Partners (12,770,261 Limited Partner interests outstanding) 15,778,100 24,429,938 General Partners (197,214) (196,121) Accumulated comprehensive income 116,577 142,464 ------------ ------------ Total Partners' equity 15,697,463 24,376,281 ------------ ------------ Total liabilities and Partners' equity $ 15,721,010 $ 24,416,786 ============ ============
The accompanying notes are an integral part of the financial statements. -3- KRUPP INSURED PLUS-III LIMITED PARTNERSHIP STATEMENTS OF INCOME AND COMPREHENSIVE INCOME ----------------
For the Three Months For the Nine Months Ended September 30, Ended September 30, ---------------------- -------------------------- 2003 2002 2003 2002 --------- -------- ----------- ---------- Revenues: Interest income - PIMs: Basic interest $ 256,379 $258,595 $ 770,840 $ 880,393 Participation interest -- -- -- 1,339,172 Interest income - MBS 29,783 197,883 483,588 609,225 Other interest income 3,293 7,492 30,235 49,464 --------- -------- ----------- ---------- Total revenues 289,455 463,970 1,284,663 2,878,254 --------- -------- ----------- ---------- Expenses: Asset management fee to an affiliate 26,988 44,279 96,125 142,563 Expense reimbursements to affiliates 28,674 26,817 115,509 72,898 Amortization of prepaid fees and expenses -- 8,730 -- 62,385 General and administrative 35,632 29,095 118,612 108,252 --------- -------- ----------- ---------- Total expenses 91,294 108,921 330,246 386,098 --------- -------- ----------- ---------- Net income 198,161 355,049 954,417 2,492,156 Other comprehensive income: Net change in unrealized gain on MBS (24,740) 1,001 (25,887) 16,438 --------- -------- ----------- ---------- Total comprehensive income $ 173,421 $356,050 $ 928,530 $2,508,594 ========= ======== =========== ========== Allocation of net income (Note 4): Limited Partners $ 192,216 $344,397 $ 925,784 $2,417,391 ========= ======== =========== ========== Average net income per Limited Partner interest (12,770,261 Limited Partner interests outstanding) $ .01 $ .03 $ .07 $ .19 ========= ======== =========== ========== General Partners $ 5,945 $ 10,652 $ 28,633 $ 74,765 ========= ======== =========== ==========
The accompanying notes are an integral part of the financial statements. -4- KRUPP INSURED PLUS-III LIMITED PARTNERSHIP STATEMENTS OF CASH FLOWS -------------------
For the Nine Months Ended September 30, ------------------------------ 2003 2002 ----------- ------------ Operating activities: Net income $ 954,417 $ 2,492,156 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of prepaid fees and expenses -- 62,385 Shared Appreciation Interest -- (1,004,379) Prepayment premium (235,918) -- Changes in assets and liabilities: Decrease in interest receivable and other assets 56,398 115,864 Decrease in liabilities (16,958) (1,938) ----------- ------------ Net cash provided by operating activities 757,939 1,664,088 ----------- ------------ Investing activities: Principal collections on PIMs including Shared Appreciation Interest of $1,004,379 in 2002 84,513 15,846,283 Principal collections on MBS including a prepayment premium of $235,918 in 2003 8,893,865 925,390 ----------- ------------ Net cash provided by investing activities 8,978,378 16,771,673 ----------- ------------ Financing activities: Quarterly distributions (1,434,445) (3,120,800) Special distributions (8,172,903) (15,835,000) ----------- ------------ Net cash used for financing activities (9,607,348) (18,955,800) ----------- ------------ Net increase (decrease) in cash and cash equivalents 128,969 (520,039) Cash and cash equivalents, beginning of period 1,209,070 1,900,744 ----------- ------------ Cash and cash equivalents, end of period $ 1,338,039 $ 1,380,705 =========== ============ Non cash activities: Increase (decrease) in unrealized gain on MBS $ (25,887) $ 16,438 =========== ============
The accompanying notes are an integral part of the financial statements. -5- KRUPP INSURED PLUS-III LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS -------------------- 1. Accounting Policies Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in this report on Form 10-Q pursuant to the Rules and Regulations of the Securities and Exchange Commission. However, in the opinion of the general partners, Krupp Plus Corporation and Mortgage Services Partners Limited Partnership (collectively the "General Partners"), of Krupp Insured Plus-III 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 Form 10-K for the year ended December 31, 2002 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 September 30, 2003, its results of operations for the three and nine months ended September 30, 2003 and 2002 and its cash flows for the nine months ended September 30, 2003 and 2002. The results of operations for the three and nine months ended September 30, 2003 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. PIMs At September 30, 2003, the Partnership's remaining PIM had a fair value of approximately $12,809,346. Fair value assumes that the GNMA MBS portion of the PIM could be sold at prices that MBS with similar interest rates are currently being sold at. Fair value does not include any value for the participation feature. The PIM matures in 2031 and at September 30, 2003 was not delinquent as to principal or interest. 3. MBS At September 30, 2003, the Partnership's MBS portfolio had an amortized cost of $1,356,760 and gross unrealized gains of $116,577. The portfolio has maturities ranging from 2016 to 2024. On April 10, 2003, the Partnership received a prepayment of the Signature Point insured mortgage for $7,863,532. The Partnership also received a prepayment premium of $235,918 from this payoff. On May 5, 2003, the Partnership paid a special distribution of $0.64 per Limited Partner interest from the proceeds received. Continued -6- KRUPP INSURED PLUS-III LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS, Continued 4. Changes in Partners' Equity A summary of changes in Partners' Equity for the nine months ended September 30, 2003 is as follows:
Accumulated Total Limited General Comprehensive Partners' Partners Partners Income Equity ------------ --------- --------- ------------ Balance at December 31, 2002 $ 24,429,938 $(196,121) $ 142,464 $ 24,376,281 Net income 925,784 28,633 -- 954,417 Quarterly distributions (1,404,719) (29,726) -- (1,434,445) Special distribution (8,172,903) -- -- (8,172,903) Change in unrealized gain on MBS -- -- (25,887) (25,887) ------------ --------- --------- ------------ Balance at September 30, 2003 $ 15,778,100 $(197,214) $ 116,577 $ 15,697,463 ============ ========= ========= ============
-7- Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with the financial statements and accompanying notes contained in the Partnership's 2002 Annual Report on Form 10-K and in this report on Form 10-Q. Certain statements in this Management's Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this report on Form 10-Q constitute "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Partnership's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. These factors include, among other things, federal, state or local regulations; adverse changes in general economic or local conditions; pre-payments of mortgages; failure of borrowers to pay participation interests due to poor operating results at properties underlying the mortgages; uninsured losses and potential conflicts of interest between the Partnership and its Affiliates, including the General Partners. Liquidity and Capital Resources At September 30, 2003, the Partnership had liquidity consisting of cash and cash equivalents of approximately $1.3 million as well as the cash flow provided by its investments in the remaining PIM and MBS. The Partnership anticipates that these sources will be adequate to provide the Partnership with sufficient liquidity to meet its obligations as well as to provide distributions to its investors. The most significant demand on the Partnership's liquidity is the quarterly distribution paid to investors of approximately $383,000. Funds for the quarterly distributions come from scheduled monthly principal and interest payments received on the remaining PIM and MBS, the principal prepayments of the MBS and interest earned on the Partnership's cash and cash equivalents. The portion of distributions attributable to the principal collections and cash reserves reduces the capital resources of the Partnership. As the capital resources decrease, the total cash flows to the Partnership will also decrease and over time will result in periodic adjustments to the distributions paid to investors. The General Partners periodically review the distribution rate to determine whether an adjustment is necessary based on projected future cash flows. In general, the General Partners try to set a distribution rate that provides for level quarterly distributions. To the extent that quarterly distributions do not fully utilize the cash available for distributions and cash balances increase, the General Partners may adjust the distribution rate or distribute such funds through a special distribution. Based on current projections, the General Partners have determined that the Partnership will continue to pay a distribution rate of $0.03 per Limited Partner interest per quarter for the near future. On April 10, 2003, the Partnership received a prepayment of the Signature Point insured mortgage for $7,863,532. The Partnership also received a prepayment premium of $235,918 from this payoff. On May 5, 2003, the Partnership paid a special distribution of $0.64 per Limited Partner interest from the proceeds received. In addition to providing insured and guaranteed monthly principal and basic interest payments from the GNMA MBS portion of the PIM, the Partnership's remaining PIM investment also may provide additional income through a participation interest in the underlying property. The Partnership may receive a share in any operating cash flow that exceeds debt service obligations and capital needs or a share in any appreciation in value when the property is sold or refinanced. However, this participation is neither guaranteed nor insured, and it is dependent upon whether property operations or its terminal value meet certain criteria. The Partnership's only remaining PIM investment is backed by the first mortgage loan on Harbor Club. Presently, the General Partners expect the property to be refinanced during late 2003 or early 2004. There are no contractual obligations remaining that would prevent a prepayment of the first mortgage loan. In response to more competitive market conditions brought on by low interest rates and low unemployment, which encourages more home ownership, Harbor Club began offering generous concessions to attract residents. Although physical occupancy is in the mid 90% range, the economic occupancy continues to hover in the mid 80% range as a result of the concessions. Due to the effect of the low occupancy on property operations and cash flow, the General Partners do not expect Harbor Club to pay the Partnership any participation interest during 2003. In the event that the Harbor Club PIM is paid off, the Partnership would then commence an orderly liquidation of the remaining assets of the Partnership and subsequently pay a liquidating distribution. In the event that the remaining PIM does not pay off as discussed above, the Partnership does have the option to call this PIM by accelerating its maturity. If the call feature is exercised then the insurance feature of the loan would be canceled. -8- Therefore, the Partnership will determine the merits of exercising the call option as economic conditions warrant. Such factors as the condition of the asset, local market conditions, the interest rate environment and availability of financing will affect this decision. Critical Accounting Policies The Partnership's critical accounting policies relate to revenue recognition related to the Partnership's remaining PIM investment, the amortization of Prepaid Fees and Expenses and the carrying value of the MBS. The Partnership's policies are as follows: The Partnership accounts for its MBS portion of its PIM investment in accordance with Financial Accounting Standards Board's Statement 115, "Accounting for Certain Investments in Debt and Equity Securities" ("FAS 115"), under the classification of held to maturity as this investment has a participation feature. As a result, the Partnership would not sell or otherwise dispose of the MBS. Accordingly, the Partnership has both the intention and ability to hold this investment to expected maturity. The Partnership carries this MBS at amortized cost. The Partnership, in accordance with FAS 115, classifies its MBS portfolio as available-for-sale. The Partnership classifies its MBS portfolio as available-for-sale as a portion of the MBS portfolio may remain after all of the PIMs pay off and that it will be necessary to then sell the remaining MBS portfolio at that time in order to close out the Partnership. In addition, other situations such as liquidity needs could arise which would necessitate the sale of a portion of the MBS portfolio. As such, the Partnership carries its MBS at fair market value and reflects any unrealized gains (losses) as a separate component of Partners' Equity. The Partnership amortizes purchase premiums or discounts over the life of the underlying mortgages using the effective interest method. The Partnership also held a Federal Housing Administration ("FHA") insured mortgage which was classified as an MBS. The Partnership held this loan at amortized cost and did not establish loan loss reserves on this investment as it was fully insured by the FHA. Basic interest on PIMs is recognized based on the stated coupon rate of the GNMA MBS. The Partnership recognizes interest related to the participation features when the amount becomes fixed and the transaction that gives rise to such amount is finalized, cash is received and all contingencies are resolved. This could be the sale or refinancing of the underlying real estate, which results in a cash payment to the Partnership or a cash payment made to the Partnership from surplus cash relative to the participation feature. Prepaid fees and expenses consisted of prepaid acquisition fees and expenses and prepaid participation servicing fees paid for the acquisition and servicing of PIMs. The Partnership amortized the prepaid acquisition fees and expenses using a method that approximated the effective interest method over a period of ten to twelve years, which represented the estimated life of the underlying mortgage. The Partnership amortized prepaid participation servicing fees using a method that approximated the effective interest method over a ten year period beginning at final endorsement of the GNMA loan and at closing if a Fannie Mae loan. Upon the repayment of a PIM, any unamortized acquisition fees and expenses and unamortized participation servicing fees related to such loan were expensed. Results of Operations Net income decreased for the three months ended September 30, 2003 as compared to the same period ending September 30, 2002 primarily due to a decrease in MBS interest income and other interest income. This decrease is partially offset by decreases in asset management fees and amortization expense. MBS interest income decreased due primarily to the payoff of the Signature Pointe MBS in April 2003. Other interest income decreased due to lower average cash balances available for short-term investing and lower interest rates earned on those balances in the three month period when compared to the same period in 2002. Asset management fees decreased due to the decline in the Partnership's asset base as a result of principal collections and prepayments. Amortization expense decreased due to the prepaid fees and expenses associated with the Harbor Club PIM being fully amortized as of the end of 2002. Net income decreased for the nine months ended September 30, 2003 as compared to the same period ending September 30, 2002 primarily due to decreases in participation interest, MBS interest income, and basic interest income on PIM's and an increase in expense reimbursement to affiliates. These are partially offset by decreases in amortization expense and asset management fees. Participation interest was greater in 2002 due to the collection of Shared Appreciation Interest and Minimum Additional interest from the Royal Palm Place PIM payoff in February 2002. MBS interest income decreased due to the prepayment of the Signature Pointe MBS in April 2003 and principal collections on the single family MBS. Basic interest income on PIM's decreased due to the Royal Palm Place PIM payoff mentioned above. Expense reimbursement to affiliates increased primarily due to a change in the estimated cost of services provided to the Partnership in 2002. Amortization expense decreased due to the prepaid fees and expenses associated with the Harbor Club PIM being fully amortized as of the end of 2002. Asset management fees decreased due to the decline in the Partnership's asset base as a result of principal collections and prepayments. -9- Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Assessment of Credit Risk The Partnership's investments in its MBS portion of its PIM and MBS are guaranteed and/or insured by the Government National Mortgage Association ("GNMA"), Fannie Mae, the Federal Home Loan Mortgage Corporation ("FHLMC") or the Department of Housing and Urban Development ("HUD") and therefore the certainty of their cash flows and the risk of material loss of the amounts invested depends on the creditworthiness of these entities. Fannie Mae is a federally chartered private corporation that guarantees obligations originated under its programs. FHLMC is a federally chartered corporation that guarantees obligations originated under its programs. These obligations are not guaranteed by the U.S. Government or the Federal Home Loan Bank Board. However, Fannie Mae and FHLMC are two of the largest corporations in the United States, and both have significant experience in mortgage securitizations. In addition, their MBS carry the highest credit rating given to financial instruments. GNMA guarantees the full and timely payment of principal and basic interest on the securities it issues, which represents interest in pooled mortgages insured by HUD. Obligations insured by HUD, an agency of the U.S. Government, are backed by the full faith and credit of the U.S. Government. At September 30, 2003, the Partnership includes in cash and cash equivalents approximately $800,000 of commercial paper, which is issued by entities with a credit rating equal to one of the top two rating categories of a nationally recognized statistical rating organization. Interest Rate Risk The Partnership's primary market risk exposure is to interest rate risk, which can be defined as the exposure of the Partnership's net income, comprehensive income or financial condition to adverse movements in interest rates. At September 30, 2003, the Partnership's remaining PIM and MBS comprise the majority of the Partnership's assets. Decreases in interest rates may accelerate the prepayment of the Partnership's investments. Increases in interest rates may decrease the proceeds from a sale of the MBS. The Partnership does not utilize any derivatives or other instruments to manage this risk as the Partnership plans to hold its PIM investment to expected maturity, while it is expected that substantially all of the MBS will prepay over the same period, thereby mitigating any potential interest rate risk to the disposition value of any remaining MBS The Partnership monitors prepayments and considers prepayment trends, as well as distribution requirements of the Partnership, when setting regular distribution policy. For MBS, the Partnership forecasts prepayments based on trends in similar securities as reported by statistical reporting entities such as Bloomberg. For its remaining PIM, the Partnership incorporates prepayment assumptions into planning as the property notifies the Partnership of the intent to prepay or as it matures. Item 4. CONTROLS AND PROCEDURES (a) Evaluation of Disclosure Controls and Procedures Within the 90 days prior to the date of this Quarterly Report on Form 10-Q, the Senior Vice President and Chief Accounting Officer of Krupp Plus Corporation, a general partner of the Partnership, carried out an evaluation of the effectiveness of the design and operation of the Partnership's disclosure controls and procedures. Based upon that evaluation, the Senior Vice President and the Chief Accounting Officer concluded that the Partnership's disclosure controls and procedures were effective as of the date of their evaluation in timely alerting them to material information relating to the Partnership required to be included in this Quarterly Report on Form 10-Q. (b) Changes in Internal Controls There were no significant changes in the Partnership's internal controls or in other factors that could significantly affect such internal controls subsequent to the date of the evaluation described in paragraph (a) above. -10- KRUPP INSURED PLUS-III LIMITED PARTNERSHIP PART II - OTHER INFORMATION ------------------- Item 1. Legal Proceedings None Item 2. Changes in Securities and Use of Proceeds None Item 3. Defaults upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders None Item 5. Other information None Item 6. Exhibits and Reports on Form 8-K (a) Exhibits (31.1) Senior Vice President Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (31.2) Chief Accounting Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (32.1) Senior Vice President Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (32.2) Chief Accounting Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (b) Reports on Form 8-K None -11- 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 Insured Plus-III Limited Partnership (Registrant) BY: /s/ Alan Reese ------------------------------- Alan Reese Treasurer and Chief Accounting Officer of Krupp Plus Corporation, a General Partner. DATE: October 30, 2003 -12- EX-31.1 3 d57359_ex31-1.txt CERTIFICATION (SEC. 302) (SVP) Exhibit 31.1 Certifications I, Peter F. Donovan, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Krupp Insured Plus - III Limited Partnership; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Date: October 30, 2003 /s/ Peter F. Donovan ---------------------- Peter F. Donovan Senior Vice President EX-31.2 4 d57359_ex31-2.txt CERTIFICATION (SEC. 302) (CAO) Exhibit 31.2 Certifications I, Alan Reese, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Krupp Insured Plus - III Limited Partnership; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Date: October 30, 2003 /s/ Alan Reese ------------------------- Alan Reese Chief Accounting Officer EX-32.1 5 d57359_ex32-1.txt CERTIFICATION (SEC. 906) (SVP) Exhibit 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Krupp Insured Plus III Limited Partnership (the "Partnership") on Form 10-Q for the period ending September 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Peter F. Donovan, Senior Vice President of Krupp Plus Corporation, a General Partner of the Partnership, certify, pursuant to U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership as of September 30, 2003 (the last date of the period covered by the Report). /s/ Peter F. Donovan - ---------------------- Peter F. Donovan, Senior Vice President Date: October 30, 2003 EX-32.2 6 d57359_ex32-2.txt CERTIFICATION (SEC. 906) (CAO) Exhibit 32.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Krupp Insured Plus III Limited Partnership (the "Partnership") on Form 10-Q for the period ending September 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Alan Reese, Chief Accounting Officer of Krupp Plus Corporation, a General Partner of the Partnership, certify, pursuant to U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership as of September 30, 2003 (the last date of the period covered by the Report). /s/ Alan Reese - ------------------------- Alan Reese, Chief Accounting Officer Date: October 30, 2003 -----END PRIVACY-ENHANCED MESSAGE-----