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 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 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 AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
<S> <C> <C>
Multi-family apartment complex, net of
accumulated depreciation of $2,592,444
and $2,549,375, respectively $ 2,149,982 $ 2,180,147
Cash 27,298 11,153
Cash restricted for tenant security deposits 34,475 37,288
Escrow for property replacements 57,536 45,427
Prepaid expenses and other assets 119,763 79,852
Deferred expenses, net of accumulated
amortization of $34,213 and $33,165,
respectively 112,412 113,460
Total assets $ 2,501,466 $ 2,467,327
LIABILITIES AND PARTNERS' DEFICIT
Mortgage note payable $ 2,227,300 $ 2,231,009
Notes payable 1,257,385 1,257,385
Accounts payable 119,766 117,977
Accrued expenses and other liabilities 261,094 230,299
Accrued interest due to affiliate (Note 3) 548,996 519,325
Total liabilities 4,414,541 4,355,995
Partners' deficit (Note 2):
Class A Limited Partners
(4,000 Units outstanding) (198,611) (176,645)
Original Limited Partner (428,812) (426,615)
General Partners (1,285,652) (1,285,408)
Total Partners' deficit (1,913,075) (1,888,668)
Total liabilities and Partners' deficit $ 2,501,466 $ 2,467,327
</TABLE>
The accompanying notes are an integral
part of the consolidated financial statements.
<PAGE>
KRUPP ASSOCIATES 1980-1 AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months
Ended March 31,
1996 1995
<S> <C> <C>
Revenue:
Rental $273,981 $250,839
Other income 433 192
Total revenue 274,414 251,031
Expenses:
Operating 101,580 93,666
Maintenance 10,234 12,593
Real estate taxes 35,178 35,034
Depreciation and amortization 44,117 44,030
General and administrative 16,719 6,295
Interest (Note 3) 90,993 92,600
Total expenses 298,821 284,218
Net loss $(24,407) $(33,187)
Allocation of net loss (Note 2):
Class A Limited Partners $(21,966) $(29,868)
Per Unit of Class A Limited Partner
Interest (4,000 Units outstanding) $ (5.49) $ (7.47)
Original Limited Partner $ (2,197) $ (2,987)
General Partners $ (244) $ (332)
</TABLE>
The accompanying notes are an integral
part of the consolidated financial statements.
<PAGE>
KRUPP ASSOCIATES 1980-1 AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Three Months
Ended March 31,
1996 1995
<S> <C> <C>
Operating activities:
Net loss $(24,407) $(33,187)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 44,117 44,030
Decrease in cash restricted for
tenant security deposits 2,813 2,905
Increase in prepaid expenses and
other assets (39,911) (29,442)
Increase (decrease) in accounts payable (2,536) 5,795
Increase in accrued expenses and other
liabilities 30,795 22,905
Increase in interest due to affiliate 29,671 30,893
Net cash provided by operating
activities 40,542 43,899
Investing activities:
Additions to fixed assets (12,904) (8,839)
Decrease (increase) in escrow for property
replacements (12,109) 12,240
Increase in accounts payable related to fixed
asset additions 4,325 -
Net cash provided by (used in)
investing activities (20,688) 3,401
Financing activity:
Principal payments on mortgage notes payable (3,709) (3,341)
Net increase in cash 16,145 43,959
Cash, beginning of period 11,153 44,832
Cash, end of period $ 27,298 $ 88,791
</TABLE>
The accompanying notes are an integral
part of the consolidated financial statements.
<PAGE> KRUPP ASSOCIATES 1980-1 AND SUBSIDIARY
NOTES TO CONSOLIDATED 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 and Subsidiary
(the "Partnership"), the disclosures contained in this report
are adequate to make the information presented not misleading.
See Notes to Consolidated 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 consolidated financial statements reflect
all adjustments (consisting of only normal recurring accruals)
necessary to present fairly the Partnership's consolidated
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. Certain prior year balances have been
reclassified to conform with current year consolidated financial
statement presentation.
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) Summary of Changes in Partners' Deficit
A summary of changes in Partners' deficit for the three
months ended March 31, 1996 is as follows:
<TABLE>
<CAPTION>
Class A Original Total
General Limited Limited Partners'
Partners Partners Partner Deficit
<S> <C> <C> <C> <C>
Balance at
December 31, 1995 $(1,285,408) $(176,645) $(426,615) $(1,888,668)
Net loss (244) (21,966) (2,197) (24,407)
Balance at
March 31, 1996 $(1,285,652) $(198,611) $(428,812) $(1,913,075)
</TABLE>
(3) Related Party Transactions
Interest on borrowings accrued to the General Partners or their
affiliates was $29,671 and $30,893 for the three months ended
March 31, 1996 and 1995, respectively.
<PAGE>
KRUPP ASSOCIATES 1980-1 AND SUBSIDIARY
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Partnership's ability to generate cash adequate to meet its needs is
dependent primarily upon the operating performance of Riverside Apartments
("Riverside"). Such ability is also dependent upon the future 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 anticipate operating deficits to continue and cannot
guarantee that they will be able to take actions that will cover any
future deficits. If the property is unable to generate funds sufficient
to cover these deficits, the Partnership could default on its mortgage
payments and become subject to foreclosure proceedings. However, the
Partnership is current on its mortgage payments.
In January 1996, the General Partners entered into a purchase and sale
agreement for the sale of Riverside to an unaffiliated buyer scheduled in
the second quarter of 1996 for the selling price of $4,500,000. Two weeks
before the scheduled sale date, the buyer rescinded his offer. The General
Partners continue to actively pursue other opportunities for the sale of
the property.
Cash Deficit
Shown below, as required by the Partnership Agreement, is the calculation
of Cash Flow (Deficit) of the Partnership for the three months ended March
31, 1996. The General Partners provide certain of the information below
to meet requirements of the Partnership Agreement and because they believe
that it is an appropriate supplemental measure of operating performance.
However, Cash Flow (Deficit) should not be considered by the reader as a
substitute to net income (loss), as an indicator of the Partnership's
operating performance or to cash flows as a measure of liquidity.
<TABLE>
<CAPTION>
Rounded to $1,000
<S> <C>
Net loss for tax purposes $(25,000)
Items not requiring or (requiring) the use of
operating funds:
Tax basis depreciation and amortization 45,000
Principal payments on mortgage (4,000)
Expenditures for capital improvements (13,000)
Working capital reserves (3,000)
Cash Deficit $ -0-
</TABLE>
Operations
In comparing the first quarter of 1996 as compared to the same period in
1995, the increase in Cash Flow is attributable to improvements in net
income of approximately $9,000, as increases in rental revenue more than
offset the increase in expenses. Riverside showed an 8% increase in
rental revenue due to the commercial space being fully occupied at 100%
during the first quarter of 1996 as compared to an average commercial
occupancy of 85% during the first quarter of 1995.
Overall total expenses increased approximately 5%, with increases in
operating and general and administrative expenses. The increase in
operating expense is related to an increase in utilities expense resulting
from the unusually cold northern winter. General and administrative
expenses increased due to higher audit expenditures.
<PAGE>
KRUPP ASSOCIATES 1980-1 AND SUBSIDIARY
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/Robert A. Barrows
Robert A. Barrows
Treasurer and Chief Accounting Officer of The Krupp
Corporation, a General Partner.
DATE: May 6, 1996
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Krupp
Associates 1980-1 Financial Statements for the quarter ended March 31, 1996 and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 27,298
<SECURITIES> 0
<RECEIVABLES> 4,574
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 207,200
<PP&E> 4,889,051<F1>
<DEPRECIATION> (2,626,657)<F2>
<TOTAL-ASSETS> 2,501,466
<CURRENT-LIABILITIES> 929,856
<BONDS> 3,484,685<F3>
0
0
<COMMON> (1,913,075)<F4>
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 2,501,466
<SALES> 0
<TOTAL-REVENUES> 274,414<F5>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 207,828<F6>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 90,993
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (24,407)
<EPS-PRIMARY> 0<F7>
<EPS-DILUTED> 0<F7>
<FN>
<F1>Includes multi-family complex of $4,742,426 and deferred expenses of $146,625.
<F2>Includes depreciation of $2,592,444 and amortization of deferred expenses of
$34,213.
<F3>Represents mortgage note payable of $2,227,300 and notes to an affiliated party
of $1,257,385.
<F4>Deficit of General Partners ($1,285,652) and Limited Partners ($627,423).
<F5>Includes all revenue of the Partnership.
<F6>Includes operating expenses of $128,533, real estate tax expense of $35,178 and
depreciation and amortization expense of $44,117.
<F7>Net loss allocated ($244) to the General Partners, ($2,197) to the Original
Limited Partner and ($21,966) to the Investor Limited Partners. Average net
loss is ($5.49) per Unit of Investor Limited Partner interest for 4,000 Units
outstanding.
</FN>
</TABLE>
