-----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, AlF9gcEho3y/6epgFOqRSdEfqvK7DMZOw+fL0XhU//KwIYlKNeuQnGZAn1w15lOn Zn0yAm1zSfVt1f/iMzWGJQ== 0000839427-97-000006.txt : 19970811 0000839427-97-000006.hdr.sgml : 19970811 ACCESSION NUMBER: 0000839427-97-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970808 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: 97654523 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 (Mark One) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30,1997 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
June 30, December 31, 1997 1996 Real estate assets: Investment in Joint Venture, net of accumulated amortization of acquisition costs of $156,879
and $104,586, respectively (Note 3) $21,917,186 $22,729,660 Mortgage-backed securities ("MBS"), net of accumulated amortization (Note 4) 622,810 645,762 Total real estate assets 22,539,996 23,375,422 Cash and cash equivalents (Note 2) 1,488,884 1,524,048 Other assets 19,633 17,097 Total assets $24,048,513 $24,916,567 LIABILITIES AND PARTNERS' EQUITY
Liabilities: Accrued expenses $ 7,685$ 13,500 Due to affiliates (Note 6) 607 49,363 Total liabilities 8,292 62,863 Partners' equity (deficit)(Note 5): Unitholders (2,060,350 Units outstanding) 24,095,096 24,904,826 Corporate Limited Partner (100 Units outstanding) (640) (601) General Partner (54,235) (50,521) Total Partners' equity $24,040,221 $24,853,704 Total liabilities and Partners' equity $24,048,513 $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 For the Six Months Ended June 30, Ended June 30, 1997 1996 1997 1996 Revenue: Partnership's share of Joint Venture net income (Note 3)$176,837$191,852 $363,568 $398,092 Interest income - MBS (Note 4)14,366 20,171 29,045 40,577 Interest income - other 18,285 23,213 36,581 50,025 Total revenue 209,488 235,236 429,194 488,694 Expenses: General and administrative (Note 6) 40,179 15,081 83,546 39,068 Asset management fees (Note 6)35,523 35,794 70,672 71,251 Amortization of acquisition costs (Note 3) 26,147 26,147 52,293 52,293 Total expenses 101,849 77,022 206,511 162,612 Net income $107,639 $158,214 $222,683 $326,082 Allocation of net income (Note 5): Unitholders (2,060,350 Units outstanding) $106,557 $156,624 $220,445 $322,805 Net income per Unit of Depositary Receipt $ .05 $ .08 $ .11 $ .16 Corporate Limited Partner (100 Units outstanding)$ 5 $ 8 $ 11 $ 16 General Partner $ 1,077 $ 1,582 $ 2,227 $ 3,261 The accompanying notes are an integral part of the financial statements. KRUPP CASH PLUS-V LIMITED PARTNERSHIP STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 1997 1996 Operating activities: Net income$ 222,683 $ 326,082 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of acquisition costs 52,293 52,293 Amortization of MBS discount (217) (1,980) Partnership's share of Joint Venture net income (363,568) (398,092) Distributions from Joint Venture 363,568 398,092 Changes in assets and liabilities: Decrease (increase) in other assets (2,536) 12,815 Decrease in due to affiliates (48,756) - Decrease in accrued expenses (5,815) (2,979) Net cash provided by operating activities 217,652 386,231 Investing activities: Distributions from Joint Venture in excess of net income 760,181 270,568 Principal collections on MBS 23,169 120,726 Other investment - (492,256) Net cash provided by (used in) investing activities 783,350 (100,962) Financing activity: Distributions (1,036,166) (1,036,771) Net decrease in cash and cash equivalents (35,164) (751,502) Cash and cash equivalents, beginning of period 1,524,048 2,101,121 Cash and cash equivalents, end of period $1,488,884 $1,349,619
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 June 30, 1997, its results of operations for the three and six months ended June 30, 1997 and 1996 and its cash flows for the six months ended June 30, 1997 and 1996. The results of operations for the three and six months ended June 30, 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)Cash and Cash Equivalents Cash and cash equivalents consisted of the following:
June 30, December 31, 1997 1996 Cash and money market accounts $ 995,832 $ 778,088 Commercial paper 493,052 745,960 $1,488,884 $ 1,524,048
At June 30, 1997, commercial paper represents corporate issues complying with Section 6.2(a) of the Partnership Agreement purchased through a corporate issuer maturing in the third quarter of 1997. At June 30, 1997, the carrying value of the Partnership's investment in commercial paper approximates fair value. (3)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 by the Joint Venture. For the three and six months ended June 30, 1997, the Partnership recognized amortization of acquisition costs of $26,147 and $52,293, respectively. Continued KRUPP CASH PLUS-V LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS, Continued (3)Investment in Joint Venture, Continued Condensed financial statements of the Joint Venture are as follows: Spring Valley Partnership Condensed Balance Sheets
ASSETS June 30, December 31, 1997 1996 Real estate asset, at cost $ 53,830,612 $ 53,828,582 Accumulated depreciation (14,943,896) (13,983,325) Total real estate asset 38,886,716 39,845,257 Other assets 2,213,957 2,252,800 Total assets $ 41,100,673 $ 42,098,057 LIABILITIES AND PARTNERS' EQUITY Total liabilities $ 748,548 $ 222,527 Partners' equity: The Partnership 20,191,519 20,951,700 Joint Venture partner 20,160,606 20,923,830 Total Partners' equity 40,352,125 41,875,530 Total liabilities and Partners' equity $ 41,100,673 $ 42,098,057
Spring Valley Partnership Condensed Statements of Operations
For the Three Months For the Six Months Ended June 30, Ended June 30, 1997 1996 1997 1996 Revenue $1,669,134 $1,607,720 $3,380,626 $3,439,077 Property operating expenses (834,416) (760,764) (1,691,462) (1,713,400) Depreciation (480,335) (462,481) (960,571) (927,896) Net income $ 354,383 $ 384,475 $ 728,593 $ 797,781
Continued KRUPP CASH PLUS-V LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS, Continued (4)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:
June 30, December 31, 1997 1996 Face Value $633,389 $ 656,558 Amortized Cost $622,810 $ 645,762 Estimated Market Value $670,000 $ 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 $47,000 and $48,000 at June 30, 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. (5)Changes in Partners' Equity A summary of changes in Partners' equity (deficit) for the six months ended June 30, 1997 is as follows:
Corporate Total Limited General Partners' Unitholders Partner Partner Equity Balance at December 31, 1996 $24,904,826$(601) $(50,521)$24,853,704 Net income 220,445 11 2,227 222,683 Distributions (1,030,175) (50) (5,941)(1,036,166) Balance at June 30, 1997$24,095,096$(640) $(54,235)$24,040,221
Continued KRUPP CASH PLUS-V LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS, Continued (6)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 For the Six Months Ended June 30, Ended June 30, 1997 1996 1997 1996 Asset management fees $35,523 $35,794 $70,672 $71,251 Expense reimbursements 29,508 6,156 55,431 18,450 Charged to operations $65,031 $41,950 $126,103 $ 89,701
Due to affiliates consisted of expense reimbursements of $607 and $49,363 at June 30, 1997 and December 31, 1996, respectively. KRUPP CASH PLUS-V LIMITED PARTNERSHIP 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 June 30, 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 $300,000 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 market interest rate 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. Continued KRUPP CASH PLUS-V LIMITED PARTNERSHIP Distributable Cash Flow and Net 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 for the six months ended June 30, 1997 and the period from inception to June 30, 1997. The General Partner provides the information below to meet requirements of the Partnership Agreement. 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 flows as a measure of liquidity.
(In $1,000's except per Unit amounts) For the Six Months Inception to Ended June 30, June 30, 1997 1997 Distributable Cash Flow: Net income for tax purposes $ 391 $ 7,798 Items providing / not requiring or (not providing) the use of operating funds: Amortization of acquisition costs 52 157 Amortization of organization costs - 50 Distributions from Joint Venture 1,124 11,854 Partnership's share of Joint Venture taxable net income (532) (7,988) Total Distributable Cash Flow ("DCF")$1,035$11,871 Unitholders' Share of DCF $1,024 $11,752 Unitholders' Share of DCF per Unit $ .49 $ 5.70(c) General Partner's Share of DCF $ 11 $ 119 Net Proceeds from Capital Transactions: Principal collections on MBS, net $ 23 $ 4,746 Distributions: Unitholders $1,030(a) $18,586(b) Unitholders' Average per Unit $ .50(a) $ 9.02(b)(c) General Partner $ 11(a) $ 125(b) Total Distributions $1,041(a) $18,711(b)
(a)Represents distributions to be paid from 1997 cash flow, including an estimate of the distribution to be paid in August, 1997. (b)Includes an estimate of the distribution to be paid in August, 1997. (c)Unitholders' average per Unit return of capital as of August, 1997 is $3.32 ($9.02 - $5.70). Continued KRUPP CASH PLUS-V LIMITED PARTNERSHIP Operations Partnership Distributable Cash Flow increased during the six months ended June 30, 1997, as compared to the six months ended June 30, 1996, primarily due to the increase in distributions received from the Joint Venture. Net income decreased for the three and six months ended June 30, 1997, as compared to the three and six months ended June 30, 1996, due to an increase in expenses and a decrease in revenue. 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. During the same periods, 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 and six month periods ended June 30, 1997 increased as compared to the same periods 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 decrease in net income for the three and six month periods ended June 30, 1997, as compared to the three and six month periods ended June 30, 1996. For the three month period ended June 30, 1997, as compared to the same period in 1996, the increase in expenses more than offset the increase in revenue. Rental revenue increased due to higher reimbursable tenant billings at the Marketplace as a result of increased reimbursable operating expenses during the period. Interest income also increased due to the Marketplace's higher average cash and cash equivalent balances available for investment. Total expenses at the Marketplace increased for the three month period ended June 30, 1997, as compared to the three month period ended June 30, 1996, due to increased real estate taxes and leasing expenses. Real estate taxes increased 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. Leasing expenses increased due to a slight decrease in occupancy, from an average occupancy rate of 98% for the three months ended June 30, 1996, to 97% for the three months ended June 30, 1997. Depreciation expense increased as a result of continued capital improvement expenditures. For the six month period ended June 30, 1997, compared to the same period in 1996, the decrease in revenue was greater than the decrease in expenses. Rental revenue decreased due to lower reimbursable tenant billings at the Marketplace as a result of decreased reimbursable operating expenses between the two periods. The decrease in rental revenue was slightly offset by an increase in interest income, as discussed above. For the six month period ended June 30, 1997, as compared to the same period in 1996, total expenses increased as a result of increased real estate taxes, increased leasing expenses, and increased depreciation expense as discussed above. These increases are partially offset by a decrease in reimbursable snow removal due to the harsh winter of 1996. 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: August 7, 1997 EX-27 2 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 6-MOS 12-31-1997 06-30-1997 1,488,884 622,810 19,633 0 0 0 22,054,065 156,879 24,048,513 8,292 0 24,040,224 0 0 0 24,048,513 0 429,194 0 0 206,511 0 0 0 0 0 0 0 0 222,683(F6) 0 0 Includes Cash and Cash Equivalents of and investments in commercial paper. Includes all receivables of the partnership included in "other assets" on the balance sheet. Includes investment in the joint venture. Amortization of costs related to aquisition. Equity of general partners (54,235), limited partners 24,094,456. Net income allocated $2,227 to general partner and $220,445 to the limited partners.
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