-----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, H5CBx/XdgdgPApfsTqB46LLZNrgluYYvXk401yKJfsp4Tx979SOaqTEyN2SqBoPn WII1/IgU4Vk9okVuvaRcHA== 0000839427-98-000007.txt : 19981113 0000839427-98-000007.hdr.sgml : 19981113 ACCESSION NUMBER: 0000839427-98-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981112 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: SEC FILE NUMBER: 000-18498 FILM NUMBER: 98745406 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 September 30, 1998 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 14. 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 (Unaudited) September 30, December 31, 1998 1997 Real estate assets: Investment in Joint Venture (Note 3) $ - $15,667,715 Mortgage-backed securities ("MBS"), net of accumulated amortization and unrealized holding gains (Note 4) - 628,909 Total real estate assets - 16,296,624 Cash and cash equivalents (Note 2) 3,554,350 569,231 Other assets 32,176 14,634 Total assets $ 3,586,526$16,880,489 LIABILITIES AND PARTNERS' EQUITY Accrued expenses and other liabilities $ 336,431$ 13,526 Partners' equity (deficit)(Note 5): Unitholders (2,060,350 Units outstanding) 3,377,096 16,943,976 Corporate Limited Partner (100 Units outstanding) (1,645) (987) General Partner (125,356) (122,972) Unrealized holding gains on MBS (Note 4) - 46,946 Total Partners' equity 3,250,095 16,866,963 Total liabilities and Partners' equity$ 3,586,526$16,880,489
The accompanying notes are an integral part of the financial statements. KRUPP CASH PLUS-V LIMITED PARTNERSHIP STATEMENTS OF INCOME (LOSS) (Unaudited)
For the Three Months For the Nine Months Ended September 30, Ended September 30, 1998 1997 1998 1997 Revenue: Interest income - MBS (Note 4)$ - $ 14,118 $ 25,287$ 43,163 Interest income - other 50,103 17,046 376,940 53,627 Total revenue 50,103 31,164 402,227 96,790 Expenses: General and administrative (Note 6) 24,191 40,087 116,416 123,633 Asset management fees (Note 6) - 35,894 12,602 106,566 Amortization of acquisition costs (Note 3) - 26,146 - 78,439 Total expenses 24,191 102,127 129,018 308,638 Income (loss) from operations 25,912 (70,963) 273,209(211,848) Partnership's share of Joint Venture net income (Note 3) - 115,513 131,925 479,081 Income before gain on sale of MBS and loss on dissolution of Joint Venture 25,912 44,550 405,134 267,233 Gain on sale of MBS (Note 4) - - 25,930 - Loss on dissolution of Joint Venture (Note 3) - - (191,452) - Net income (loss) $ 25,912$ 44,550 $ 239,612$267,233 Allocation of net income (loss) (Note 5): Unitholders (2,060,350 Units outstanding): Income before gain on sale of MBS and loss on the dissolution of Joint Venture $ 25,651 $ 44,102 $ 401,063$264,548 Gain on sale of MBS - - 25,929 - Loss on dissolution of Joint Venture - - (189,528) - Net income $ 25,651 $ 44,102 $ 237,464$264,548
Continued KRUPP CASH PLUS-V LIMITED PARTNERSHIP STATEMENTS OF INCOME (LOSS), Continued (Unaudited)
For the Three Months For the Nine Months Ended September 30, Ended September 30, 1998 1997 1998 1997 Net income per Unit of Depositary Receipt: Income before gain on sale of MBS and loss on the dissolution of Joint Venture $ .02 $ .02 $ .20 $ .13 Gain on sale of MBS - - .01 - Loss on dissolution of Joint Venture - - (.09) - Net income $ .02 $ .02$ .12 $ .13 Corporate Limited Partner (100 Units outstanding): Income before gain on sale of MBS and loss on the dissolution of Joint Venture $ 2 $ 2 $ 20 $ 13 Gain on sale of MBS - - 1 - Loss on dissolution of Joint Venture - - (9) - Net income $ 2 $ 2 $ 12 $ 13 General Partner: Income before gain on sale of MBS and loss on the dissolution of Joint Venture $ 259 $ 446 $ 4,051 $ 2,672 Gain on sale of MBS - - - - Loss on the dissolution of Joint Venture - - (1,915) - Net income $ 259 $ 446 $ 2,136 $ 2,672
The accompanying notes are an integral part of the financial statements. KRUPP CASH PLUS-V LIMITED PARTNERSHIP STATEMENTS OF CASH FLOWS (Unaudited)
For the Nine Months Ended September 30, 1998 1997 Operating activities: Net income $ 239,612$ 267,233 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of acquisition costs - 78,439 Amortization of MBS discount - (529) Loss on dissolution of Joint Venture 191,452 - Gain on sale of MBS (25,930) - Partnership's share of Joint Venture net income (131,925) (479,081) Distributions from Joint Venture 131,925 479,081 Changes in assets and liabilities: Increase in other assets (17,542) (312) Decrease in due to affiliates - (49,363) Increase in accrued expenses and other liabilities 322,905 2,442 Net cash provided by operating activities 710,497 297,910 Investing activities: Distributions from Joint Venture in excess of net income 639,134 798,413 Distributions received from Joint Venture sale of property, net 14,837,129 - Principal collections on MBS 88,337 46,092 Proceeds from sale of MBS 519,556 - Net cash provided by investing activities 16,084,156 844,505 Financing activity: Distributions (13,809,534) (1,557,095) Net increase (decrease) in cash and cash equivalents 2,985,119 (414,680) Cash and cash equivalents, beginning of period 569,231 1,524,048 Cash and cash equivalents, end of period $ 3,554,350$ 1,109,368
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, 1997 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 necessary to present fairly the Partnership's financial position as of September 30, 1998, its results of operations for the three and nine months ended September 30, 1998 and 1997 and its cash flows for the nine months ended September 30, 1998 and 1997. The results of operations for the three and nine months ended September 30, 1998 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:
September 30, December 31, 1998 1997 Cash and money market accounts $ 568,171 $ 569,231 Commercial paper 2,986,179 - $ 3,554,350 $ 569,231
(3)Investment in Joint Venture The Partnership and an affiliate of the Partnership (collectively referred to herein as the "Joint Venture Partners") owned 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. Based upon the Joint Venture Partners' assessment of the current and future market conditions, the capital improvements necessary to remain competitive in its market, its capital resources and the differing strategies of the Joint Venture Partners, the Joint Venture Partners determined that it was in their best interests, and that of their respective investors, to sell Spring Valley Marketplace. On January 30, 1998, the Partnership and its Joint Venture Partner sold the Marketplace to unaffiliated third parties. The property was included in a package with thirteen other properties owned by affiliates of the General Partner. The total selling price of the fourteen properties was $138,000,000, of which the Joint Venture Partners Continued KRUPP CASH PLUS-V LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS, Continued (3)Investment in Joint Venture, Continued received $29,571,700, less their share of the closing costs of $246,830. For financial reporting purposes, the Joint Venture recognized a gain of $100,672 on the sale of the property. The gain was calculated as the difference between the property's selling price less net book value of the property and closing costs. The sale is considered a Terminating Capital Transaction as defined by the Spring Valley Partnership Agreement. Consequently, the Joint Venture Partners distributed the remaining assets of the Joint Venture in the second quarter of 1998. In accordance with the Spring Valley Partnership Agreement, the Partnership and its Joint Venture Partner received 49.9% and 50.1%, respectively, of the remaining net assets. Subsequent to the final distribution, the Joint Venture was effectively dissolved. As of September 30, 1998, the Partnership recognized a loss of $191,452 on the dissolution of the Joint Venture. The loss represents the remaining investment balance after allocations of net income earned by the Joint Venture, distributions received from the Joint Venture, liabilities transferred from the Joint Venture and closing costs paid by the Partnership. At December 31, 1997, the Partnership's investment balance reflected the original cost of the investment, acquisition costs of $1,882,546, allocations of net income earned by the Joint Venture and distributions received from the Joint Venture. For the three and nine months ended September 30, 1997, the Partnership recognized amortization of acquisition costs of $26,146 and $78,439, 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 (Unaudited) September 30, December 31, 1998 1997 Real estate asset, at cost $ - $ 54,036,202 Accumulated depreciation - (25,327,070) Total real estate asset - 28,709,132 Other assets - 2,958,231 Total assets $ - $ 31,667,363 LIABILITIES AND PARTNERS' EQUITY Total liabilities $ - $ 380,978 Total Partners' equity - 31,286,385 Total liabilities and Partners' equity $ - $ 31,667,363
Spring Valley Partnership Condensed Statements of Operations (Unaudited)
For the Three Months For the Nine Months Ended September 30, Ended September 30, 1998 1997 1998 1997 Revenue $ - $1,679,830 $ 540,486$ 5,060,456 Property operating expenses - (867,383) (376,779) (2,558,845) Depreciation - (580,957) - (1,541,528) Gain on sale of property - - 100,672 - Net income$ - $ 231,490 $ 264,379$ 960,083
Continued KRUPP CASH PLUS-V LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS, Continued (4)Mortgage Backed Securities On April 29, 1998, the General Partners sold the Partnership's MBS portfolio to an unaffiliated third party for $519,556. For financial reporting purposes, the Partnership recognized a gain on the sale of $25,930. The gain was calculated as the difference between the selling price and net book value of the MBS. The MBS held by the Partnership were issued by the Federal Home Loan Mortgage Corporation. At December 31, 1997, the MBS had a total face value, amortized cost and estimated market value of $592,004, $581,963 and $629,000, respectively. Coupon rates of the MBS ranged from 9.0% to 9.5% per annum and were scheduled to mature in the years 2016 and 2017. At December 31, 1997, the Partnership's MBS portfolio had gross unrealized holding gains of $46,946 on its MBS investments to adjust to market value, based on quoted market prices. (5) Changes in Partners' Equity A summary of changes in Partners' equity (deficit) for the nine months ended September 30, 1998 is as follows:
Unrealized Corporate Holding Limited General Gains on Unitholders Partner Partner MBS Total Balance at December 31, 1997 $16,943,976 $ (987) $(122,972)$ 46,946 $16,866,963 Income before gain on sale of MBS and loss on sale of the Joint Venture 401,063 20 4,051 - 405,134 Unrealized holding gains on MBS - - - (46,946) (46,946) Gain on sale of MBS 25,929 1 - - 25,930 Loss on dissolution of the Joint Venture (189,528) (9) (1,915) - (191,452) Distributions: Operations (515,088) (25) (4,520) - (519,633) Capital Transaction(13,289,256) (645) - - (13,289,901) Balance at September 30, 1998 $ 3,377,096$ (1,645)$(125,356)$ - $ 3,250,095
(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. Continued KRUPP CASH PLUS-V LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS, Continued (6) Related Party Transactions, Continued Amounts paid to the General Partner's affiliates were as follows:
For the Three Months For the Nine Months Ended September 30, Ended September 30, 1998 1997 1998 1997 Asset management fees $ - $35,894 $ 12,602 $106,566 Expense reimbursements 32,157 29,508 85,886 84,939 Charged to operations $ 32,157 $65,402 $ 98,488 $191,505
Due to affiliates consisted of expense reimbursements of $2,075 at September 30, 1998. 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 Based upon the Joint Venture Partners' assessment of the current and future market conditions, the capital improvements necessary to remain competitive in its market, its capital resources and the differing strategies of the Joint Venture Partners, the Joint Venture Partners determined that it was in their best interests, and that of their respective investors, to sell Spring Valley Marketplace. On January 30, 1998, Spring Valley Marketplace was sold to unaffiliated third parties. The property was included in a package with thirteen other properties owned by affiliates of the General Partner. The total selling price of the fourteen properties was $138,000,000, of which the Joint Venture Partners received $29,571,700, less their share of the closing costs (see Note 3). The sale is considered a Terminating Capital Transaction as defined by the Partnership Agreement. On May 15, 1998, the Partnership made a special distribution of $6.45 per Unit based upon approximately 80% of the proceeds of the sale and estimated liquidation value of remaining Partnership assets. Once all necessary reserves and contingent liabilities are funded, the remaining proceeds will be distributed. All Partnership affairs are expected to be completed by year-end. The Partnership held MBS that were guaranteed by the Federal Home Loan Mortgage Corporation. On April 29, 1998, the General Partner sold the Partnership's MBS portfolio to an unaffiliated third party. For financial reporting purposes, the Partnership recognized a gain of $25,930 from the sale. At December 31, 1997, the Partnership recorded unrealized holding gains on its MBS of $46,946 to adjust the investments to market value (see Note 4). KRUPP CASH PLUS-V LIMITED PARTNERSHIP Operations Partnership The following discussion relates to the operations of the Partnership for the three and nine months ended September 30, 1998 and 1997. The sale of the Partnership's Joint Venture property (Spring Valley Marketplace) on January 30, 1998, and the sale of the Partnership's MBS portfolio on April 29, 1998, significantly impacts the comparability of the Partnership's operations between the periods. Net income for the three and nine months ended September 30, 1998 as compared to the three and nine months ended September 30, 1997, net of the Joint Venture activity and MBS portfolio, increased as total revenue increased and total expenses decreased. Interest income on other investments increased due to higher average cash and cash equivalent balances available for investment, as a result of the proceeds received from the sale of the Joint Venture property and MBS portfolio. Total expenses for the three and nine months ended September 30, 1998 decreased when compared to the same periods in 1997, due primarily to the decline in asset management fees and amortization of acquisition costs due to the sale of the Joint Venture property. Joint Venture Spring Valley Marketplace was sold on January 30, 1998 to unaffiliated third parties. See Note 3 for further discussion of this matter. 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: November 10, 1998 EX-27 2
5 This schedule contains summary financial information extracted from Cash Plus V Financial Statements for the nine months ended September 30, 1998 and is qualified in its entirety by reference to such financial statements. 9-MOS DEC-31-1998 SEP-30-1998 3,554,350 0 32,176 0 0 0 0 0 3,586,526 336,431 0 0 0 3,250,095 0 3,586,526 0 534,152 0 0 129,018 0 0 0 0 0 0 165,522 0 239,612 0 0 Includes cash and cash equivalents of $568,171 and investments in commercial paper of A$2,986,179. Includes all receivables of the Partnership included in "Other Assets" on the Balance Sheet. Equity of General Partners ($125,356), Limited Partners $3,375,449. Includes interest income of $402,227 and Partnership's share of Joint Venture net income of $131,925. Includes Gain on sale of MBS of $25,930 and Loss on dissolution of Joint Venture of ($191,452). Net Income allocated $2,136 to General Partners and $237,476 to the Limited Partners. Net Income per unit is $12 on 2,060,450 Units outstanding.
-----END PRIVACY-ENHANCED MESSAGE-----