-----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, SkRR84bXGn+SIyxhfHuDfMRZdcBTWQZg0uAdXEOzO1kI1jkSm4GRTsvcBQ5Dc0RM wfoZhDnOv/w9XbnINKxgbA== 0000839427-97-000010.txt : 19971113 0000839427-97-000010.hdr.sgml : 19971113 ACCESSION NUMBER: 0000839427-97-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971113 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: SEC FILE NUMBER: 000-18498 FILM NUMBER: 97716522 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, 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 12. 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
September 30,December 31, 1997 1996 Real estate assets: Investment in Joint Venture, net of accumulated amortization of acquisition costs of $183,025 and $104,586, respectively (Note 3) $21,852,808 $22,729,660 Mortgage-backed securities ("MBS"), net of accumulated amortization (Note 4) 600,199 645,762 Total real estate assets 22,453,007 23,375,422 Cash and cash equivalents (Note 2) 1,109,368 1,524,048 Other assets 17,409 17,097 Total assets $23,579,784 $24,916,567 LIABILITIES AND PARTNERS' EQUITY Liabilities: Accrued expenses $ 15,942 $ 13,500 Due to affiliates (Note 6) - 49,363 Total liabilities 15,942 62,863 Partners' equity (deficit) (Note 5): Unitholders (2,060,350 Units outstanding) 23,624,112 24,904,826 Corporate Limited Partner (100 Units outstanding) (663) (601) General Partner (59,607) (50,521) Total Partners' equity 23,563,842 24,853,704 Total liabilities and Partners' equity $23,579,784 $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 Nine Months Ended September 30, Ended September 30, 1997 1996 1997 1996 Revenue: Partnership's share of Joint Venture net income (Note 3) $115,513 $321,642 $479,081 $719,734 Interest income - MBS (Note 4) 14,118 17,391 43,163 57,968 Interest income - other 17,046 24,313 53,627 74,338 Total revenue 146,677 363,346 575,871 852,040 Expenses: General and administrative (Note 6) 40,087 23,508 123,633 62,576 Asset management fees (Note 6) 35,894 35,984 106,566 107,235 Amortization of acquisition costs (Note 3) 26,146 26,146 78,439 78,439 Total expenses 102,127 85,638 308,638 248,250 Net income $ 44,550 $277,708 $267,233$603,790 Allocation of net income (Note 5): Unitholders (2,060,350 Units outstanding) $ 44,102 $274,918 $264,548$597,723 Net income per Unit of Depositary Receipt $ .02 $ .13 $ .13$ .29 Corporate Limited Partner (100 Units outstanding) $ 2 $ 13 $ 13$ 29 General Partner $ 446 $ 2,777 $ 2,672$ 6,038
The accompanying notes are an integral part of the financial statements. KRUPP CASH PLUS-V LIMITED PARTNERSHIP STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1997 1996 Operating activities: Net income $ 267,233 $ 603,790 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of acquisition costs 78,439 78,439 Amortization of MBS discount (529) (4,850) Partnership's share of Joint Venture net income (479,081) (719,734) Distributions from Joint Venture 479,081 719,734 Changes in assets and liabilities: Decrease (increase) in other assets (312) 17,088 Increase in accrued expenses 2,442 396 Increase (decrease) in due to affiliates (49,363) 152 Net cash provided by operating activities 297,910 695,015 Investing activities: Distributions from Joint Venture in excess of net income 798,413 333,156 Principal collections on MBS 46,092 267,678 Net cash provided by investing activities 844,505 600,834 Financing activity: Distributions (1,557,095) (1,556,299) Net decrease in cash and cash equivalents (414,680) (260,450) Cash and cash equivalents, beginning of period 1,524,048 2,101,121 Cash and cash equivalents, end of period $ 1,109,368 $ 1,840,671
The accompanying notes are an integral part of the financial statements. KRUPP CASH PLUS-V LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS 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 necessary to present fairly the Partnership's financial position as of September 30, 1997, its results of operations for the three and nine months ended September 30, 1997 and 1996 and cash flows for the nine months ended September 30, 1997 and 1996. The results of operations for the three and nine months ended September 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:
September 30,December 31, 1997 1996 Cash and money market accounts $ 613,951 $ 778,088 Commercial paper 495,417 745,960 $ 1,109,368 $ 1,524,048
At September 30, 1997, commercial paper represents corporate issues maturing in the fourth quarter of 1997. At September 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 shopping center containing 320,684 net leasable square feet 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 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 September 30, December 31, 1997 1996 Real estate asset, at cost $ 53,901,744 $ 53,828,582 Accumulated depreciation (15,524,853) (13,983,325) Total real estate asset 38,376,891 39,845,257 Other assets 2,350,536 2,252,800 Total assets $ 40,727,427 $ 42,098,057 LIABILITIES AND PARTNERS' EQUITY Total liabilities $ 451,914 $ 222,527 Partners' equity: The Partnership 20,153,287 20,951,700 Joint Venture partner 20,122,226 20,923,830 Total Partners' equity 40,275,513 41,875,530 Total liabilities and Partners' equity $ 40,727,427 $ 42,098,057
Spring Valley Partnership Condensed Statements of Operations
For the Three Months For the Nine Months Ended September 30, Ended September 30, 1997 1996 1997 1996 Revenue $1,679,830 $1,826,598 $5,060,456 $ 5,265,675 Property operating expenses (867,383) (704,553) (2,558,845) (2,417,953) Depreciation (580,957) (477,473) (1,541,528)(1,405,369) Net income$ 231,490 $ 644,572 $ 960,083$ 1,442,353
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:
September 30,December 31, 1997 1996 Face Value $ 610,466$ 656,558 Amortized Cost $ 600,199$ 645,762 Estimated Market Value $ 649,000$ 694,000
Coupon rates of the MBS range from 9.0% to 9.5% per annum and mature in theyears 2016 and 2017. The Partnership's MBS portfolio had gross unrealized gains of approximately $49,000 and $48,000 at September 30, 1997 and December 31, 1996, respectively. The Partnership does not expect to realize these gains in the near future 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 nine months ended September 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 264,548 13 2,672 267,233 Distributions (1,545,262) (75) (11,758) (1,557,095) Balance at September 30, 1997$23,624,112 $ (663) $(59,607) $23,563,842
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 are as follows:
For the Three Months For the Nine Months Ended September 30, Ended September 30, 1997 1996 1997 1996 Asset management fees $35,894 $35,984 $106,566 $107,235 Expense reimbursements 29,508 12,294 84,939 30,744 Charged to operations $65,402 $48,278 $191,505 $137,979
Due to affiliates consisted of expense reimbursements of $49,363 at December 31, 1996. 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 93% as of September 30, 1997. Capital improvements will be made as necessary, in order to maintain or increase this level of occupancy and to remain competitive within the immediate market. The Marketplace has spent approximately $73,000 to date and is expected to spend approximately $220,000 for capital improvements at the property in 1997, most of which are tenant buildouts and exterior improvements to attract and retain quality tenants at the shopping center. Parking lot paving and resurfacing of sidewalks which began in 1996 is expected to be completed in 1997. Painting of the external canopy began in the third quarter of 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 prepayments, 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. KRUPP CASH PLUS-V LIMITED PARTNERSHIP Operations Partnership Net income decreased for the three and nine months ended September 30, 1997, as compared to the three and nine months ended September 30, 1996, due to a decrease 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. During the same periods, MBS interest income decreased due to repayments of principal 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 nine month periods ended September 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 nine month periods ended September 30, 1997, as compared to the three and nine month periods ended September 30, 1996 as revenues decreased and expenses increased. Rental revenue decreased for the three and nine month periods ended September 30, 1997 as compared to the same periods ended September 30, 1996 because of lower reimbursable tenant billings as a result of decreased reimbursable operating expenses. Property operating expenses at the Marketplace increased for the three and nine month periods ended September 30, 1997, as compared to the three and nine month periods ended September 30, 1996, primarily due to increased real estate taxes. 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. In 1996 the property also received a real estate tax refund, further reducing tax expenses last year as compared to 1997. The increase in real estates taxes was partially offset by a decrease in maintenance expense due to additional snow removal expenditures in 1996. 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: November 12, 1997 EX-27 2
5 This schedule contains summary financial information extracted from Cash Plus V Financial Statements for the nine months ended September 30, 1997 and is qualified in its entirety by reference to such financial statements. 9-MOS DEC-31-1997 SEP-30-1997 1,109,368 600,199 17,409 0 0 0 22,035,833 (183,025) 23,579,784 15,942 0 0 0 23,563,842 0 23,579,784 0 575,871 0 0 308,638 0 0 0 0 0 0 0 0 267,233 0 0 Includes cash and cash equivalents of $613,951 and investments in commercial paper of $495,417. Includes all receivables of the Partnership included in "Other Assets" on the Balance Sheet. Includes investment in Joint Venture. Amortization of costs related to acquisition. Equity of General Partners ($59,607) and Limited Partners $23,623,449. Net Income allocated $2,672 to General Partners and $264,561 to the Limited Partners. Net Income per units is $0.13.
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