UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT Of 1934
For the quarterly period ended September 30, 1995
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 2-68727
Krupp Associates 1980-1
Massachusetts 04-2708956
(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
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
KRUPP ASSOCIATES 1980-1
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
<S> <C> <C>
Multi-family apartment complex, net of
accumulated depreciation of $2,498,553
and $2,365,138, respectively $ 2,143,397 $ 2,218,305
Cash 21,500 44,832
Cash restricted for tenant security deposits 38,572 41,529
Escrow for property replacements 66,519 52,444
Prepaid expenses and other assets 103,143 64,360
Deferred expenses, net of accumulated
amortization of $32,118 and $28,976,
respectively 114,507 117,649
Total assets $ 2,487,638 $ 2,539,119
LIABILITIES AND PARTNERS' DEFICIT
Mortgage note payable $ 2,234,623 $ 2,244,913
Notes payable 1,257,385 1,257,385
Accounts payable 86,677 149,866
Accrued expenses and other liabilities 254,171 227,927
Accrued interest due to an affiliate (Note 2) 488,105 394,046
Total liabilities 4,320,961 4,274,137
Partners' deficit (Note 3):
Class A Limited Partners
(4,000 Units outstanding) (251,998) (163,523)
Original Limited Partner (435,462) (426,615)
General Partners (1,145,863) (1,144,880)
Total Partners' deficit (1,833,323) (1,735,018)
Total liabilities and Partners' deficit $ 2,487,638 $ 2,539,119
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP ASSOCIATES 1980-1
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Revenue:
Rental $262,750 $249,185 $772,722 $ 730,794
Other income 3,244 184 3,972 3,292
Total revenue 265,994 249,369 776,694 734,086
Expenses:
Operating 93,705 97,910 272,685 288,341
Maintenance 33,040 19,726 63,736 56,736
Real estate taxes 33,600 29,561 92,313 99,376
Depreciation and
amortization 47,040 44,997 136,557 131,372
General and administrative 12,992 15,939 30,818 24,150
Interest (Note 2) 92,898 88,910 278,890 260,121
Total expenses 313,275 297,043 874,999 860,096
Net loss $(47,281) $(47,674) $(98,305) $(126,010)
Allocation of net loss
(Note 3):
Per Unit of Class A
Limited Partnership
Interest (4,000 Units) $ (10.64) $ (10.73) $ (22.12) $ (28.35)
Original Limited Partner $ (4,255) $ (4,291) $ (8,847) $ (11,341)
General Partners $ (473) $ (477) $ (983) $ (1,260)
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP ASSOCIATES 1980-1
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Nine Months Ended
September 30,
1995 1994
<S> <C> <C>
Operating activities:
Net loss $ (98,305) $(126,010)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 136,557 131,372
Decrease (increase) in cash restricted for
tenant security deposits 2,957 (529)
Increase in prepaid expenses and other
assets (38,783) (42,281)
Increase (decrease) in accounts payable (63,189) 1,063
Increase in accrued expenses and other
liabilities 26,244 50,287
Increase in due to affiliates 94,059 74,491
Net cash provided by operating
activities 59,540 88,393
Investing activities:
Additions to fixed assets (58,507) (53,666)
Increase in escrow for property replacements (14,075) (1,554)
Net cash used in investing activities (72,582) (55,220)
Financing activity:
Principal payments on mortgage note payable (10,290) (9,539)
Net increase (decrease) in cash (23,332) 23,634
Cash, beginning of period 44,832 5,044
Cash, end of period $ 21,500 $ 28,678
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP ASSOCIATES 1980-1
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
Associates 1980-1 (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, 1994 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 September 30, 1995, its
results of operations for the three and nine months ended September 30,
1995 and 1994, and its cash flows for the nine months ended September 30,
1995 and 1994. Certain prior year balances have been reclassified to
conform with current period financial statement presentation.
The results of operations for the three and nine months ended September
30, 1995 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) Related Party Transactions
Interest on notes payable to the General Partner and its affiliates was
$94,059 for the nine months ended September 1995 and $31,381 for the
three months ended September 1995, as compared to $74,491 for the nine
months ended September 1994 and $27,313 for the three months ended
September 1994.
(3) Summary of Changes in Partners' Deficit
A summary of changes in Partners' Deficit for the nine months ended
September 30, 1995 is as follows:
<TABLE>
<CAPTION>
Class A Original Total
General Limited Limited Partners'
Partners Partners Partner Deficit
<C> <C> <C> <C> <C>
Balance at
December 31, 1994 $(1,144,880) $(163,523) $(426,615) $(1,735,018)
Net loss (983) (88,475) (8,847) (98,305)
Balance at
September 30, 1995 $(1,145,863) $(251,998) $(435,462) $(1,833,323)
</TABLE>
<PAGE>
KRUPP ASSOCIATES 1980-1
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Liquidity and Capital Resources
The Partnership's ability to generate cash adequate to meet its needs is
dependent primarily upon the successful operation of Riverside Apartments.
Such ability is also dependent upon the future availability of short-term
borrowings and upon the potential refinancing or sale of the asset. These
sources of liquidity could be used by the Partnership for payment of expenses
related to real estate operations, debt service and expenses. Cash Flow and
Capital Transaction Proceeds, if any, as calculated under Section 8.2(a)
("Cash Flow") and 8.3(a) of the Partnership Agreement would then be available
for distribution to the Partners. The Partnership has discontinued
distributions due to insufficient operating cash flow.
The Partnership has experienced cash flow deficiencies for several years
and currently has very limited liquidity. Expenditures are being monitored
closely and capital improvements are made on an as-needed basis. To date, the
General Partners have been able to arrange financing through borrowings, from
an affiliate of the General Partners, to cover a substantial portion of these
cash flow deficiencies. Also, one of the General Partners, The Krupp Company
Limited Partnership ("The Krupp Company"), contributed an additional $100,000
to the Partnership during 1991. In January 1993, The Krupp Company loaned an
additional $135,000 to the Partnership in the form of a demand note to payoff
a demand note from an unaffiliated bank. In addition, the affiliate lender
has been willing to defer interest payments on the borrowings since late 1990.
Furthermore, the General Partners, through annual negotiations, have continued
to arrange for the waiver of property management fees and expense
reimbursements payable to the management agent, also an affiliate of the
General Partners.
The General Partners are continuing to actively pursue the sale of Riverside
Apartments. Although a prospective local buyer appears interested, at this
time it is not certain that a sale will result. It is likely that all
potential proceeds will be used to satisfy Partnership obligations, and it is
unlikely that the Partners will receive a distribution.
Cash Flow
Shown below is the calculation of Cash Flow for the nine months ended
September 30, 1995.
<TABLE>
<CAPTION>
Rounded to $1,000
<S> <C>
Net loss for tax purposes $(97,000)
Items not requiring (requiring) the use of
operating funds:
Tax basis depreciation and amortization 135,000
Principal payments on mortgage (10,000)
Expenditures for capital improvements (59,000)
Cash Flow Deficit $(31,000)
</TABLE>
Continued
<PAGE>
KRUPP ASSOCIATES 1980-1
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - Continued
Operations
In comparing the three and nine months ended September 30, 1995, to the
same period in 1994, the increase in rental revenue at Riverside Apartments is
due to increases in rental rates at the property.
For the three and nine months ended September 30, 1995, as compared to the
same period in 1994, operating expenses decreased due to a decrease in gas
expense as a result of the warmer winter season and a reduction in insurance
expense due to a favorable claim history. The increase in interest expense is
attributable to a rise in the prime rate from approximately 7% to 9% from the
first nine months of 1994 to the first nine months of 1995, respectively.
<PAGE>
KRUPP ASSOCIATES 1980-1
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
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Krupp Associates 1980-1
(Registrant)
BY: /s/Marianne Pritchard
Marianne Pritchard
Treasurer and Chief Accounting Officer
of The Krupp Corporation, a General
Partner.
DATE: November 2, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Krupp
Associates 1980-1 financial statement for the quarter ended September 30, 1995
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 21,500
<SECURITIES> 0
<RECEIVABLES> 3,227
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 205,007
<PP&E> 4,788,575<F1>
<DEPRECIATION> (2,530,671)<F2>
<TOTAL-ASSETS> 2,487,638<F1>
<CURRENT-LIABILITIES> 828,953
<BONDS> 3,492,008<F3>
<COMMON> (1,833,323)<F4>
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 2,487,638
<SALES> 776,694<F5>
<TOTAL-REVENUES> 776,694
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 596,109<F6>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 278,890
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (98,305)
<EPS-PRIMARY> 0<F7>
<EPS-DILUTED> 0
<FN>
<F1>Includes mutli-family complex of $4,641,950 and deferred expenses of $146,625.
<F2>Includes depreciation of $2,498,553 and amortization of deferred expenses of
$32,118.
<F3>Represents mortgage note payable of $2,234,623 and notes to an affiliated party
of $1,257,385.
<F4>Deficit of General Partners ($1,145,863) and Limited Partners ($687,460).
<F5>Includes all revenue of the Partnership.
<F6>Includes operating expenses of $367,239, real estate tax expense of $92,313 and
depreciation and amortization expense of $136,557.
<F7>Net loss allocated ($983) to the General Partners, ($8,847) to the Original
Limited Partner and ($88,475) to the Investor Limited Partners. Average net
loss is ($22.12) per unit of Investor Limited Partner interest for 4,000 units
outstanding.
</FN>
</TABLE>
