-----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, Re+hyvxMUhSHZOl3KcaKL+OBUUPJxzbXP6PYZQhO/3YQbn5KfnJlEVb7J4qFLaj6 DTwEPHUwtKC87DkuGIjZrA== 0000839427-96-000007.txt : 19960806 0000839427-96-000007.hdr.sgml : 19960806 ACCESSION NUMBER: 0000839427-96-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960731 FILED AS OF DATE: 19960805 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: 96603867 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 June 30, 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 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, 1996 1995 Real estate assets: Investment in Joint Venture, net of accumulated amortization of acquisition costs of $52,293 and $0, respectively (Note 2) $22,864,518 $23,187,379 Mortgage-backed securities ("MBS"), net of accumulated amortization (Note 3) 796,808 915,554 Total real estate assets 23,661,326 24,102,933 Cash and cash equivalents 1,349,619 2,101,121 Other investment (Note 3) 492,256 - Other assets 23,375 36,190 Total assets $25,526,576 $26,240,244 LIABILITIES AND PARTNERS' EQUITY Accrued audit liability $ 6,750 $ 9,729 Partners' equity (Note 4): Unitholders (2,060,350 Units outstanding) 25,566,558 26,273,929 Corporate Limited Partner (100 Units outstanding) (569) (535) General Partners (46,163) (42,879) Total Partners' equity 25,519,826 26,230,515 Total liabilities and Partners' equity $25,526,576 $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 For the Six Months Ended June 30, Ended June 30, 1996 1995 1996 1995 Revenue: Partnership's share of Joint Venture net income (Note 2) $191,852 $272,530 $398,092 $496,106 Interest income - MBS (Note 3) 20,171 21,859 40,577 44,159 Interest income - other 23,213 30,735 50,025 68,490 Total revenue 235,236 325,124 488,694 608,755 Expenses: General and administrative (Note 5) 15,081 32,243 39,068 56,950 Asset management fees (Note 5) 35,794 35,932 71,251 71,484 Amortization of organization costs (Note 2) 26,147 - 52,293 - Total expenses 77,022 68,175 162,612 128,434 Net income $158,214 $256,949 $326,082 $480,321 Allocation of net income (Note 4): Unitholders (2,060,350 Units outstanding) $156,624 $254,368 $322,805 $475,495 Net income per Unit of Depositary Receipt $ .08 $ .12 $ .16 $ .23 Corporate Limited Partner (100 Units outstanding) $ 8 $ 12 $ 16 $ 23 General Partners $ 1,582 $ 2,569 $ 3,261 $ 4,803
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, 1996 1995 Operating activities: Net income $ 326,082 $ 480,321 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of acquisition costs 52,293 - Amortization of MBS discount (1,980) (362) Partnership's share of Joint Venture net income (398,092) (496,106) Distributions from Joint Venture 398,092 496,106 Decrease in other assets 12,815 5,429 Increase (decrease) in accrued audit liability (2,979) 1,500 Net cash provided by operating activities 386,231 486,888 Investing activities: Distributions from Joint Venture in excess of net income 270,568 90,720 Principal collections on MBS 120,726 34,535 Other investment (492,256) (977,406) Net cash used in investing activities (100,962) (852,151) Financing activity: Distributions (1,036,771) (1,039,775) Net decrease in cash and cash equivalents (751,502) (1,405,038) Cash and cash equivalents, beginning of period 2,101,121 2,665,531 Cash and cash equivalents, end of period $ 1,349,619 $ 1,260,493
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 June 30, 1996, its results of operations for the three and six months ended June 30, 1996 and 1995 and its cash flows for the six months ended June 30, 1996 and 1995. The results of operations for the three and six months ended June 30, 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, 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. Condensed financial statements of the Joint Venture are as follows: Spring Valley Partnership Condensed Balance Sheets
ASSETS June 30, December 31, 1996 1995 Property, at cost $ 53,528,871 $ 53,409,298 Accumulated depreciation (13,012,206) (12,084,310) 40,516,665 41,324,988 Other assets 1,757,404 1,491,737 Total assets $ 42,274,069 $ 42,816,725 LIABILITIES AND PARTNERS' EQUITY Total liabilities $ 233,076 $ 233,513 Partners' equity: The Partnership 21,034,265 21,304,833 Joint Venture partner 21,006,728 21,278,379 Total Partners' equity 42,040,993 42,583,212 Total liabilities and Partners' equity $ 42,274,069 $ 42,816,725
Spring Valley Partnership Condensed Statements of Operations For the Three Months For the Six Months Ended June 30, Ended June 30, 1996 1995 1996 1995 Revenue $1,607,720 $1,637,361 $ 3,439,077 $ 3,203,870 Property operating expenses (760,764) (636,134) (1,713,400) (1,302,038) Depreciation (462,481) (455,075) (927,896) (907,631) Net income $ 384,475 $ 546,152 $ 797,781 $ 994,201
(3) Mortgage Backed Securities and Other Investment 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, 1996 1995 Face Value $810,471 $ 931,197 Amortized Cost $798,808 $ 915,554 Estimated Market Value $846,000 $ 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 $49,000 and $24,000 at June 30, 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. At June 30, 1996, the Partnership held an investment in commercial paper maturing within one year. The cost approximates the market value. (4) Changes in Partners' Equity A summary of changes in Partners' equity (deficit) for the six months ended June 30, 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 322,805 16 3,261 326,082 Distributions (1,030,176) (50) (6,545) (1,036,771) Balance at June 30, 1996 $25,566,558 $(569) $(46,163) $25,519,826
(5) 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 Unitholders. Amounts paid or accrued to the General Partners or their affiliates are as follows:
For the Three Months For Six Months Ended June 30, Ended June 30, 1996 1995 1996 1995 Asset management fees $35,794 $35,932 $71,251 $ 71,484 Expense reimbursements 6,156 14,646 18,450 29,291 Charged to operations $41,950 $50,578 $89,701 $100,775
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, a strong contributor to the Partnership's liquidity, in 1996 is currently occupied at a rate of 98%. In order to retain or increase this level of occupancy and to remain competitive within it's immediate market, the Marketplace is expected to spend approximately $670,000 for capital improvements in 1996, most of which are tenant buildouts to attract and retain quality tenants at the shopping center. Improvements are expected to continue throughout the remainder of the year. 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, distributions 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 six months ended June 30, 1996 and the period from inception to June 30, 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 Six Months Inception to Ended June 30, June 30, 1996 1996 Distributable Cash Flow: Net income for tax purposes $ 477 $ 6,868 Items providing / not requiring or (not providing) the use of operating funds: Amortization of acquisition costs 52 52 Amortization of organization costs - 50 Distributions from Joint Venture 669 10,135 Partnership's share of Joint Venture taxable net income (549) (6,776) Total Distributable Cash Flow ("DCF") $ 649 $10,329 Unitholders' Share of DCF $ 642 $10,226 Unitholders' Share of DCF per Unit $ .31 $ 4.97(c) General Partners' Share of DCF $ 7 $ 103 Net Proceeds from Capital Transactions: Principal collections on MBS, net $ 119 $ 4,572 Distributions: Unitholders $1,030(a) $16,526(b) Unitholders' Average per Unit $ .50(a) $ 8.02(b)(c) General Partners $ 7(a) $ 106(b) Total Distributions $1,037(a) $16,632(b)
(a) Represents distributions paid in 1996, except the February, 1996 distribution, which relates to 1995 cash flows and includes an estimate of the distribution to be paid in August, 1996. (b) Includes an estimate of the distribution to be paid in August, 1996. (c) Unitholders average per Unit return of capital as of August, 1996 is $3.05 ($8.02 - $4.97). Operations Partnership Distributable Cash Flow, as defined in the Partnership Agreement, increased in the first six months of 1996, as compared to the first six months of 1995. This increase is primarily due to an increase in distributions received from the Joint Venture. Total revenue for the three and six months ended June 30, 1996 decreased as compared to the same time periods in 1995, as a result of a decrease in net income generated by the Partnership's Joint Venture investment. During this same period, MBS interest income decreased due to repayment and prepayments of principal which occur on the MBS portfolio. Interest income on other investments has 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, 1996 increased as compared to the three and six month periods ended June 30, 1995, as a result of the amortization of costs relating to the investment in the Marketplace which will continue to be amortized over the remaining life of the Marketplace. This increase was partially offset by a decrease in general and administrative expenses incurred with the preparation and mailing of reports and other investor communications. Joint Venture Revenue for the three months ended June 30, 1996, as compared to the same period in 1995, decreased due to lower reimbursable tenant billings at the Marketplace based upon lower reimbursable operating expenses between the two periods. For the six months ended June 30, 1996, as compared to the same period in 1995, revenue increased due to higher reimbursable operating expenses, including snow removal costs from the stormy winter season. Property operating expenses for the three and six months ended June 30, 1996 increased, as compared to the three and six months ended June 30, 1995, due to increased real estate tax and maintenance expenses. Real estate taxes increased as a result of a reassessment of the Marketplace by the local taxing authority. The increase in maintenance expense was due to snow removal expenditures as a result of adverse winter weather conditions. Depreciation expense also increased in conjunction with capital improvement expenditures. General In accordance with Financial Accounting Standard 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, 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 Corporation, the General Partner of Krupp Company Limited Partnership-VI DATE: July , 1996 EX-27 2
5 This schedule contains summary financial information extracted from Cash Plus V Financial Statements for the six months ending June 30, 1996 and is qualified in its entirety by reference to such financial statements. 6-MOS DEC-31-1996 JUN-30-1996 1,841,875 796,808 20,745 0 0 2,630 22,916,811 (52,293) 25,526,576 6,750 0 25,556,558 0 0 0 25,556,558 0 488,694 0 0 162,612 0 0 0 0 0 0 0 0 326,082 0 0 Includes cash and cash equivalents of $1,349,619 and investment in commercial paper of $492,256. Includes all receivables of the Partnership included in "Other Assets" on the balance sheet. Includes Investment in Joint Venture $21,094,265 and costs related to the acquisition of the asset underlying the investment $1,882,546. Represents amortization of costs related to the acquisition of the asset underlying the investment. Equity of General Partners ($46,163), Limited Partners of $25,567,127. Includes all revenue of the Partnership. Includes all expenses of the Partnership. Net income allocated $3,261 to the General Partners and $322,821 to the Limited Partners. Average net income is $.16 on 2,060,450 Units outstanding.
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