-----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, Rgbtffhr8hgewAptO1qIo8XMo3sfkQRe97ZsWTLZllL1qgikSfrwH/knqZbmB0ob JBu0jHXIiNAiRSCICmyxgg== 0000839427-97-000004.txt : 19970515 0000839427-97-000004.hdr.sgml : 19970515 ACCESSION NUMBER: 0000839427-97-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970514 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: KRUPP CASH PLUS V LIMITED PARTNERSHIP CENTRAL INDEX KEY: 0000839427 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 043021560 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-18498 FILM NUMBER: 97604567 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, 1997 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 0-18498 Krupp Cash Plus-V Limited Partnership Massachusetts 04-3021560 (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 The total number of pages in this document is 13. 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. Actual results could differ materially from those projected in the forward-looking statements as a result of a number of factors, including those identified herein. KRUPP CASH PLUS-V LIMITED PARTNERSHIP BALANCE SHEETS ASSETS
March 31, December 31, 1997 1996 Real estate assets: Investment in Joint Venture, net of accumulated amortization of acquisition costs of $130,732 and $104,586, respectively (Note 2) $22,391,244 $22,729,660 Mortgage-backed securities ("MBS"), net of accumulated amortization (Note 3) 633,197 645,762 Total real estate assets 23,024,441 23,375,422 Cash and cash equivalents 1,454,535 1,524,048 Other assets 16,328 17,097 Total assets $24,495,304 $24,916,567 LIABILITIES AND PARTNERS' EQUITY Liabilities: Accrued expenses and other liabilities $ 7,276 $ 13,500 Due to affiliates (Note 5) 35,799 49,363 Total liabilities 43,075 62,863 Partners' equity (deficit) (Note 4): Unitholders (2,060,350 Units outstanding) 24,503,626 24,904,826 Corporate Limited Partner (100 Units outstanding) (620) (601) General Partner (50,777) (50,521) Total Partners' equity 24,452,229 24,853,704 Total liabilities and Partners' equity $24,495,304 $24,916,567
The accompanying notes are an integral part of the financial statements. KRUPP CASH PLUS-V LIMITED PARTNERSHIP STATEMENTS OF INCOME
For the Three Months Ended March 31, 1997 1996 Revenue: Partnership's share of Joint Venture net income (Note 2) $186,731 $206,240 Interest income - MBS (Note 3) 14,679 20,406 Interest income - other 18,296 26,812 Total revenue 219,706 253,458 Expenses: General and administrative (Note 5) 43,367 23,987 Asset management fees (Note 5) 35,149 35,457 Amortization of acquisition costs (Note 2) 26,146 26,146 Total expenses 104,662 85,590 Net income $115,044 $167,868 Allocation of net income (Note 4): Unitholders (2,060,350 Units outstanding) $113,888 $166,181 Net income per Unit of Depositary Receipt $ .06 $ .08 Corporate Limited Partner (100 Units outstanding) $ 6 $ 8 General Partner $ 1,150 $ 1,679
The accompanying notes are an integral part of the financial statements. KRUPP CASH PLUS-V LIMITED PARTNERSHIP STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1997 1996 Operating activities: Net income $ 115,044 $ 167,868 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of MBS discount, net (131) (569) Amortization of acquisition costs 26,146 26,146 Partnership's share of Joint Venture net income (186,731) (206,240) Distributions from Joint Venture 186,731 206,240 Changes in assets and liabilities: Decrease in other assets 769 2,996 Decrease in accrued expenses and other liabilities (6,224) (4,891) Decrease in due to affiliates (13,564) - Net cash provided by operating activities 122,040 191,550 Investing activities: Distributions from Joint Venture in excess of net income 312,270 13,320 Principal collections on MBS 12,696 42,966 Net cash provided by investing activities 324,966 56,286 Financing activity: Distributions (516,519) (519,585) Net decrease in cash and cash equivalents (69,513) (271,749) Cash and cash equivalents, beginning of period 1,524,048 2,101,121 Cash and cash equivalents, end of period $1,454,535 $1,829,372
The accompanying notes are an integral part of the financial statements. KRUPP CASH PLUS-V 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 Partner of Krupp Cash Plus-V 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 Annual Report on Form 10-K for the year ended December 31, 1996 for additional information relevant to significant accounting policies followed by the Partnership. In the opinion of the General Partner 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, 1997, and its results of operations and cash flows for the three months ended March 31, 1997 and 1996. The results of operations for the three months ended March 31, 1997 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) Investment in Joint Venture The Partnership and an affiliate of the Partnership own a 49.9% and 50.1% interest in Spring Valley Partnership (the "Joint Venture"), respectively. The express purpose of entering into the Joint Venture was to acquire and operate Spring Valley Marketplace (the "Marketplace"). The Marketplace is a 320,684 square foot shopping center located in Spring Valley, Rockland County, New York. The Partnership's investment balance reflects the original cost of the investment, acquisition costs of $1,882,546 which are being amortized over the remaining life of the underlying asset, allocations of net income earned by the Joint Venture and distributions received from the Joint Venture. For the quarter ended March 31, 1997, the Partnership recognized amortization of acquisition costs of $26,146. Condensed financial statements of the Joint Venture are as follows: Spring Valley Partnership Condensed Balance Sheets ASSETS
March 31, December 31, 1997 1996 Real estate asset, at cost $ 53,828,648 $ 53,828,582 Accumulated depreciation (14,463,561) (13,983,325) Total real estate asset 39,365,087 39,845,257 Other assets 2,112,346 2,252,800 Total assets $ 41,477,433 $ 42,098,057 LIABILITIES AND PARTNERS' EQUITY Total liabilities $ 227,693 $ 222,527 Partners' equity: The Partnership 20,639,431 20,951,700 Joint Venture partner 20,610,309 20,923,830 Total Partners' equity 41,249,740 41,875,530 Total liabilities and Partners' equity $ 41,477,433 $ 42,098,057
Spring Valley Partnership Condensed Statements of Operations
For the Three Months Ended March 31, 1997 1996 Revenue $ 1,711,492 $ 1,831,357 Property operating expenses (857,046) (952,636) Depreciation (480,236) (465,415) Net income $ 374,210 $ 413,306
(3) Mortgage Backed Securities The MBS held by the Partnership are issued by the Federal Home Loan Mortgage Corporation. The following is additional information on the MBS held:
March 31, December 31, 1997 1996 Face Value $ 643,862 $ 656,558 Amortized Cost $ 633,197 $ 645,762 Estimated Market Value $ 676,000 $ 694,000
Coupon rates of the MBS range from 9.0% to 9.5% per annum and mature in the years 2016 and 2017. The Partnership's MBS portfolio had gross unrealized gains of approximately $43,000 and $48,000 at March 31, 1997 and December 31, 1996, respectively. The Partnership does not expect to realize these gains as it has the intention and ability to hold the MBS until maturity. (4) Changes in Partners' Equity A summary of changes in Partners' equity (deficit) for the three months ended March 31, 1997 is as follows:
Corporate Total Limited General Partners' Unitholders Partner Partners Equity Balance at December 31, 1996 $24,904,826 $(601) $(50,521) $24,853,704 Net income 113,888 6 1,150 115,044 Distributions (515,088) (25) (1,406) (516,519) Balance at March 31, 1997 $24,503,626 $(620) $(50,777) $24,452,229
The distribution payable to the General Partner of $1,406 was included in accrued expenses and other liabilities at March 31, 1997. (5) Related Party Transactions Under the terms of the Partnership Agreement, the General Partner or its affiliates are entitled to an Asset Management Fee for the management of the Partnership's business equal to .5% per annum of the Total Invested Assets of the Partnership, as defined in the Prospectus, payable quarterly. The Partnership also reimburses affiliates of the General Partner for certain expenses incurred in connection with the preparation and mailing of reports and other communications to the Unitholders. Amounts paid or accrued to the General Partner or its affiliates were as follows:
For the Three Months Ended March 31, 1997 1996 Asset management fees $35,149 $35,457 Expense reimbursements 25,923 12,294 Charged to operations $61,072 $47,751
Due to affiliates consisted of expense reimbursements of $35,799 and $49,363 at March 31, 1997 and December 31, 1996, respectively. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements including those concerning Management's expectations regarding the future financial performance and future events. These forward-looking statements involve significant risk and uncertainties, including those described herein. Actual results may differ materially from those anticipated by such forward-looking statements. Liquidity and Capital Resources The Partnership's sources of liquidity are derived from the distributions it receives from its interest in the Joint Venture, earnings and collections on its MBS, and interest earned on its short-term investments. The Marketplace had an occupancy rate of 97% as of March 31, 1997. The Marketplace will make capital improvements, as necessary, in order to maintain or increase this level of occupancy and to remain competitive within its immediate market. The Marketplace is expected to spend approximately $447,000 for capital improvements in 1997, most of which are tenant buildouts and exterior improvements necessary to attract and retain quality tenants at the shopping center. Parking lot paving which began in 1996 is expected to be completed in 1997. Liquidity provided by the MBS is derived primarily from interest income, scheduled principal payments and prepayments of the portfolio. The level of prepayments is contingent upon the interest rate environment, which in turn, affects the Partnership's liquidity. The liquidity provided by the principal prepayments has been used to fund distributions, which has resulted in a reduction of the Partnership's capital resources. The Partnership holds MBS that are guaranteed by the Federal Home Loan Mortgage Corporation ("FHLMC"). The principal risks with respect to MBS are the credit worthiness of FHLMC and the risk that the current value of any MBS may decline as a result of changes in market interest rates. The General Partner believes that this risk is minimal due to the fact that the Partnership has the ability to hold these securities to maturity. The most significant demands on the Partnership's liquidity are the quarterly distributions. Distributions are funded by MBS principal collections, distributions received from the Marketplace and working capital reserves. Due to fluctuations in MBS principal prepayments and its effect on the Partnership's liquidity, the Partnership may need to periodically adjust its distribution rate. Therefore, sustaining the distribution rate is mainly dependent upon the future performance of the Marketplace. Distributable Cash Flow and Net Proceeds from Capital Transactions Shown below is the calculation of Distributable Cash Flow and Net Proceeds from Capital Transactions as defined by Section 17 of the Partnership Agreement for the three months ended March 31, 1997 and the period from inception to March 31, 1997. The General Partner provides certain of the information below to meet requirements of the Partnership Agreement and because it is believed to be an appropriate supplemental measure of operating performance. However, Distributable Cash Flow and Net 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 flow as a measure of liquidity.
(In $1,000's except per Unit amounts) For the Three Months Inception to Ended March 31, March 31, 1997 1997 Distributable Cash Flow: Net income for tax purposes $ 201 $ 7,608 Items providing / not requiring or (not providing) the use of operating funds: Amortization of acquisition costs 26 131 Amortization of organization costs - 50 Distributions from Joint Venture 499 11,229 Partnership's share of Joint Venture taxable net income (273) (7,729) Total Distributable Cash Flow ("DCF") $ 453 $11,289 Unitholders' Share of DCF $ 448 $11,176 Unitholders' Share of DCF per Unit $ .21 $ 5.42 General Partner's Share of DCF $ 5 $ 113 Net Proceeds from Capital Transactions: Principal collections on MBS, net $ 13 $ 4,736 Distributions: Unitholders $ 515(a) $18,071(b) Unitholders' Average per Unit $ .25(a) $ 8.77(b)(c) General Partner $ 5(a) $ 119(b) Total Distributions $ 520(a) $18,190(b)
(a) Represents an estimate of the distribution to be paid in May, 1997. (b) Includes an estimate of the distribution to be paid in May, 1997. (c) Limited Partners average per Unit return of capital as of May, 1997 is $3.35 ($8.77 - $5.42). Operations Partnership Distributable Cash Flow increased during the three months ended March 31, 1997, as compared to the three months ended March 31, 1996, primarily due to the increase in distributions received from the Joint Venture. Net income for the Partnership decreased for the three months ended March 31, 1997, as compared to the three months ended March 31, 1996, due to a decline in revenue and an increase in expenses. Total revenue decreased as a result of a decrease in net income generated by the Partnership's Joint Venture investment in the Marketplace, as discussed below. MBS interest income decreased due to repayment and prepayments of principal which occur on the MBS portfolio. Interest income on other investments also decreased as a result of lower cash and cash equivalent balances available for investment. Total expenses for the three months ended March 31, 1997 increased, as compared to the same period in 1996, as a result of an increase in charges incurred in connection with the preparation and mailing of Partnership reports and other investor communications. Joint Venture The Marketplace experienced a slight decrease in net income for the three months ended March 31, 1997, as compared to the three months ended March 31, 1996, as the decrease in revenue was greater than the decrease in operating expenses. Rental revenue decreased primarily as a result of lower reimbursable tenant billings derived from lower reimbursable operating expenses. Interest income, however, increased slightly due to the Marketplace's higher average cash and cash equivalent balances. Total expenses at the Marketplace decreased for the three months ended March 31, 1997, as compared to the three months ended March 31, 1996, due to a decrease in maintenance expense partially offset by an increase in real estate taxes. Maintenance expense decreased significantly as a result of an unusual amount of snow removal costs during the first quarter of 1996. The increase in real estate taxes is due to both a rise in the assessed value of the Marketplace and an increase in the school tax rate by the local taxing authority. Depreciation expense increased as a result of continued capital improvement expenditures. KRUPP CASH PLUS-V 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 had duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Krupp Cash Plus-V Limited Partnership (Registrant) BY: /s/Wayne H. Zarozny Wayne H. Zarozny Treasurer and Chief Accounting Officer of the Krupp Corporation, an affiliate of the General Partner. DATE: April 29, 1997 EX-27 2
5 This schedule contains summary financial information extracted from the financial statements for the quarter ended March 31, 1997 and is qualified its entirety be reference to such financial statement. 3-MOS DEC-31-1997 MAR-31-1997 1,454,535 633,197 16,328 0 0 0 22,521,976 (130,732) 24,495,304 43,075 0 24,452,229 0 0 0 24,495,304 0 219,706 0 0 104,662 0 0 0 0 0 0 0 0 115,044 0 0 Includes all receivables with "other assets"on the balance sheet. Includes investment in J.V. of $20,639,430 and costs related to the aquisition of the asset underlying the investment of $1,882,546. Represents amortization of Costs related to the aquisition of the asset underlying the investment. Deficit of General Partners ($50,777), limited partners of $24,503,006 Includes all revenues of Partnership. Includes all expenses of Partnership. Net income allocated $1,150 to the General Partners and $113,888 to the Limited Partners. Average net income is $.06 on 2,060,450 units outstanding.
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