-----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, BcbkdnQW31AveJtcFPRarLvnUrD0uZUzb6APiunnMparmyCXQa60/DiqXuy05kBP QY1z+5hA3u6JL9uyVcTP+A== 0000839427-96-000004.txt : 19960503 0000839427-96-000004.hdr.sgml : 19960503 ACCESSION NUMBER: 0000839427-96-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960502 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: 96555310 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 THEx SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-18498 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 PART I. FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS KRUPP CASH PLUS-V LIMITED PARTNERSHIP BALANCE SHEETS ASSETS March 31, December 31, 1996 1995 Real estate assets: Investment in Joint Venture, net of accumulated amortization of acquisition costs of $26,146 and $0, respectively (Note 2) $23,147,913 $23,187,379 Mortgage-backed securities ("MBS"), net of accumulated amortization (Note 3) 873,157 915,554 Total real estate assets 24,021,070 24,102,933 Cash and cash equivalents 1,829,372 2,101,121 Other assets 33,194 36,190 Total assets $25,883,636 $26,240,244 LIABILITIES AND PARTNERS' EQUITY Accrued expenses and other liabilities (Note 4) $ 4,838 $ 9,729 Partners' equity (Note 5): Unitholders (2,060,350 Units outstanding) 25,925,022 26,273,929 Corporate Limited Partner (100 Units outstanding) (552) (535) General Partners (45,672) (42,879) Total Partners' equity 25,878,798 26,230,515 Total liabilities and Partners' equity $25,883,636 $26,240,244 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, 1996 1995 Revenue: Partnership's share of Joint Venture net income (Note 2) $206,240 $223,576 Interest income - MBS (Note 3) 20,406 22,300 Interest income - other 26,812 37,755 Total revenue 253,458 283,631 Expenses: General and administrative (Note 6) 23,987 24,707 Asset management fees (Note 6) 35,457 35,552 Amortization of acquisition costs (Note 2) 26,146 - Total expenses 85,590 60,259 Net income $167,868 $223,372 Allocation of net income (Note 5): Unitholders (2,060,350 Units outstanding) $166,181 $221,127 Net income per Unit of Depositary Receipt $ .08 $ .11 Corporate Limited Partner (100 Units outstanding) $ 8 $ 11 General Partners $ 1,679 $ 2,234 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, 1996 1995 Operating activities: Net income $ 167,868 $ 223,372 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of MBS discount, net (569) (350) Amortization of acquisition costs 26,146 - Distributions from Joint Venture 206,240 223,576 Partnership's share of Joint Venture net income (206,240) (223,576) Decrease in other assets 2,996 6,113 Decrease in accrued expenses and other liabilities (4,891) (2,328) Net cash provided by operating activities 191,550 226,807 Investing activities: Distributions from Joint Venture in excess of net income 13,320 18,938 Principal collections on MBS 42,966 27,598 Increase in other investments - (977,406) Net cash provided by (used in) investing activities 56,286 (930,870) Financing activity: Distributions (519,585) (522,239) Net decrease in cash and cash equivalents (271,749) (1,226,302) Cash and cash equivalents, beginning of period 2,101,121 2,665,531 Cash and cash equivalents, end of period $1,829,372 $1,439,229 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 Partners 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, 1995 for additional information relevant to significant accounting policies followed by the Partnership. In the opinion of the General Partners of the Partnership, the accompanying unaudited financial statements reflect all adjustments (consisting of only normal recurring accruals) necessary to present fairly the Partnership's financial position as of March 31, 1996, and its results of operations and cash flows for the three months ended March 31, 1996 and 1995. The results of operations for the three months ended March 31, 1996 are not necessarily indicative of the results which may be expected for the full year. See Management's Discussion and Analysis of Financial Condition and Results of Operations included in this report. (2) Investment in Joint Venture The Partnership and an affiliate of the Partnership own a 49.9% and 50.1% interest in Spring Valley Marketplace Joint Venture (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 shopping center containing 314,673 net leasable square feet located in Spring Valley, Rockland County, New York. The investment balance reflects the original cost of the investment, including $1,882,546 of acquisition costs which are being amortized over the remaining life of the underlying asset. Condensed financial statements of the Joint Venture are as follows: Spring Valley Partnership Condensed Balance Sheets ASSETS March 31, December 31, 1996 1995 Property, at cost $ 53,410,413 $53,409,298 Accumulated depreciation (12,549,726) (12,084,310) 40,860,687 41,324,988 Other assets 1,911,538 1,491,737 Total assets $ 42,772,225 $42,816,725 LIABILITIES AND PARTNERS' EQUITY Total liabilities $ 215,707 $ 233,513 Partners' equity: The Partnership 21,291,513 21,304,833 Joint Venture partner 21,265,005 21,278,379 Total Partners' equity 42,556,518 42,583,212 Total liabilities and Partners' equity $ 42,772,225 $42,816,725 Spring Valley Partnership Condensed Statements of Operations For the Three Months Ended March 31 , 1996 1995 Revenue $ 1,831,357 $1,566,509 Property operating expenses 952,636 665,904 Depreciation 465,415 452,556 Net income $ 413,306 $ 448,049 (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, 1996 1995 Face Value $888,231 $931,197 Amortized Cost $873,157 $915,554 Estimated Market Value $936,000 $940,000 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 $63,092 and $24,446 at March 31, 1996 and December 31, 1995, respectively. The Partnership does not expect to realize these gains as it has the intention and ability to hold the MBS until maturity. (4) Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consist of the following: March 31, December 31, 1996 1995 Accrued audit expense $ 4,838 $ 9,729 (5) Changes in Partners' Equity A summary of changes in Partners' equity (deficit) for the three months ended March 31, 1996 is as follows:
Corporate Total Limited General Partners' Unitholders Partner Partners Equity Balance at December 31, 1995 $26,273,929 $(535) $(42,879) $26,230,515 Net income 166,181 8 1,679 167,868 Distributions (515,088) (25) (4,472) (519,585) Balance at March 31, 1996 $25,925,022 $(552) $(45,672) $25,878,798
(6) Related Party Transactions Under the terms of the Partnership Agreement, the General Partners or their 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 Partners for certain expenses incurred in connection with the preparation and mailing of reports and other communications to the Limited Partners. Amounts paid or accrued to the General Partners or their affiliates were as follows: For the Three Months Ended March 31, 1996 1995 Asset management fees $35,457 $35,552 Expense reimbursements 12,294 14,645 Charged to operations $47,751 $50,197 KRUPP CASH PLUS-V LIMITED PARTNERSHIP Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 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. After experiencing some retail difficulties in 1992 and 1993, the Marketplace has become a strong contributor to the Partnership's liquidity. Revenues at the Marketplace have steadily increased since 1992 as strong national tenants have positively impacted the shopping center. In order to remain competitive within it's immediate market, the Marketplace is expected to spend approximately $275,000 for capital improvements in 1996, most of which are tenant buildouts to attract and retain quality tenants at the shopping center. Liquidity provided by the MBS comes primarily from interest income as principal prepayments have decreased significantly from the principal amounts received in 1994 and 1993. During those years, prepayments were significant due to the low interest rate environment. 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 Partners believe 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 prepayments, distribu-tions received from the Marketplace and working capital reserves. Due to the decrease in MBS principal prepayments and its effect on the Partnership's liquidity, the Partnership may need to periodically adjust the distribution rate. Therefore, sustaining the distribution rate is mainly dependent upon the future performance of the Marketplace. Distributable Cash Flow and Net Cash Proceeds from Capital Transactions Shown below is the calculation of Distributable Cash Flow and Net Cash Proceeds from Capital Transactions as defined by Section 17 of the Partnership Agreement for the three months ended March 31, 1996 and the period from inception to March 31, 1996. The General Partners provide certain of the information below to meet requirements of the Partnership Agreement and because they believe that is an appropriate supplemental measure of operating performance. However, Distributable Cash Flow and Net Cash Proceeds from Capital Transactions should not be considered by the reader as a substitute to net income, as an indicator of the Partnership s operating performance or to cash 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, 1996 1996 Distributable Cash Flow: Net income for tax purposes $ 244 $ 6,635 Items providing / not requiring or (not providing) the use of operating funds: Amortization of acquisition costs 26 26 Amortization of organization costs - 50 Distributions from Joint Venture 220 9,686 Partnership's share of Joint Venture taxable net income (282) (6,509) Total Distributable Cash Flow ("DCF") $ 208 $ 9,888 Limited Partners' Share of DCF $ 206 $ 9,790 Limited Partners' Share of DCF per Unit $ .10 $ 4.76 General Partners' Share of DCF $ 2 $ 98 Net Proceeds from Capital Transactions: Principal collections on MBS, net $ 42 $ 4,495 Distributions: Limited Partners $ 515(a) $16,011(b) Limited Partners' Average per Unit $ .25(a) $ 7.77(b)(c) General Partners $ 2(a) $ 101(b) Total Distributions $ 517(a) $16,112(b)
(a) Represents an estimate of the distribution to be paid in May, 1996. (b) Includes an estimate of the distribution to be paid in May, 1996. (c) Limited Partners average per Unit return of capital as of May, 1996 is $3.01 ($7.77 - $4.76). Operations Partnership Overall, Distributable Cash Flow, as defined in the Partnership Agreement, decreased $44,000 when comparing the quarter ending March 31, 1996 to the quarter ending March 31, 1995. This is primarily due to the decrease in distributions received from the Joint Venture and a decline in interest income. The Partnership's revenue has decreased for the three months ended March 31, 1996 as compared to the same period in 1995, due to a decrease in net income generated by the Marketplace. MBS interest income decreased for the three months ended March 31, 1996 as compared to the same period in 1995 due to repayments and prepayments of principal which occur on the MBS portfolio. Interest income on other investments has also decreased when comparing the first quarter of 1996 to the same period in 1995 due to lower average cash and cash equivalent balances. Expenses for the Partnership increased when comparing the two periods primarily due to amortization of costs relating to the investment in the Marketplace. These costs will continue to be amortized over the remaining life of the Marketplace. Joint Venture The Marketplace experienced a decrease in net income for the three months ended March 31, 1996, as compared to the same period in 1995, as the increase in property expenses more than offset the increase in revenue. Revenue increased approximately $262,000 during this period as a result of a rise in reimbursable tenant billings derived from the increase in real estate taxes and other operating expenses. Interest income increased slightly due to the Marketplace's higher average cash and cash equivalent balances. Total expenses at the Marketplace increased for the three months ended March 31, 1996 as compared to the same period in 1995 due to increases in maintenance expense and real estate taxes. Maintenance expense rose significantly during the two periods as a result of an unusual amount of snowfall requiring removal during the first quarter of 1996. An increase in real estate tax rates resulted in a 13% increase in real estate taxes for the three months ended March 31, 1996 as compared to the same period in 1995. Depreciation expense increased in comparing these two periods as a result of tenant improvements made since the first quarter of 1995. General In accordance with Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of", which is effective for fiscal years beginning after December 15, 1995, the Partnership has implemented policies and practices for assessing impairment of its real estate assets. In assessing the impairment of the underlying real estate owned by the Joint Venture, the General Partners routinely perform market and growth studies combined with periodic appraisals of the underlying property. If the General Partners believe that there is a significant impairment in value, in which case a provision to write down the investment to fair value will be charged against income. At this time, the General Partners do not believe that any asset of the Partnership is significantly impaired. 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/Robert A. Barrows Robert A. Barrows Treasurer and Chief Accounting Officer of Krupp Plus-II Corpora-tion, the General Partner of Krupp Company Limited Partnership-VI DATE: April 30, 1996 EX-27 2
5 This schedule contains summary financial information extracted from Cash Plus V Financial Statements for the quarter ending March 31, 1996 and is qualified in its entirety by reference to such financial statements. 3-MOS DEC-31-1996 MAR-31-1996 1,829,372 873,157 30,427 0 0 2,767 23,174,059 (26,146) 25,883,636 4,838 0 25,878,798 0 0 0 25,883,636 0 253,458 0 0 85,590 0 0 0 0 0 0 0 0 167,868 0 0 Includes all receivalbes of the Partnership included in "Other Assets" on the balance sheet. Includes Investment in Joint Venture $21,291,513 and costs related to the acquisition of the asset underlying the investment $1,882,546. Amortization of $26,146 on the costs related to the acquisition of the asset underlying the investment. Equity of General Partners ($45,672), Limited Partners of $25,924,470. Includes all revenue of the Partnership. Includes all expenses of the Partnership. Net income allocated $1,679 to the General Partners and $166,869 to the Limited Partners. Average net income is $.08 on 2,060,450 Units outstanding.
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