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 June 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 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
The total number of pages in this document is
10.
<PAGE> 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 ASSOCIATES 1980-1 AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
Multi-family apartment complex, net of
accumulated depreciation of $2,819,651
<S> <C> <C>
and $2,730,441, respectively $ 2,046,606 $ 2,093,819
Cash and cash equivalents 62,810 75,012
Cash restricted for tenant security deposits 29,585 38,004
Replacement reserve escrow 52,598 49,030
Prepaid expenses and other assets 93,395 86,267
Deferred expenses, net of accumulated
amortization of $39,449 and $37,355,
respectively 107,176 109,270
Total assets $ 2,392,170 $ 2,451,402
LIABILITIES AND PARTNERS' DEFICIT
Liabilities:
Mortgage note payable $ 2,207,229 $ 2,215,574
Notes payable 1,257,385 1,257,385
Accounts payable 77,592 93,704
Accrued expenses and other liabilities 237,277 242,244
Accrued interest due to an affiliate (Note 3)
697,166 637,842
Total liabilities 4,476,649 4,446,749
Partners' deficit (Note 2):
Class A Limited Partners
(4,000 Units outstanding) (352,875) (272,656)
Original Limited Partner (444,238) (436,216)
General Partners (1,287,366) (1,286,475)
Total Partners' deficit (2,084,479) (1,995,347)
Total liabilities and Partners' deficit $2,392,170 $ 2,451,402
</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 For the Six Months
Ended June 30, Ended June 30,
1997 1996 1997 1996
Revenue:
<S> <C> <C> <C> <C>
Rental $272,363 $282,092 $536,818 $556,073
Other income 1,297 843 2,385 1,276
Total revenue 273,660 282,935 539,203 557,349
Expenses:
Operating 96,811 93,131 195,069 194,711
Maintenance 32,016 19,365 47,054 29,599
Real estate taxes 30,680 34,523 65,180 69,701
Management fees (Note 3) 13,263 - 26,767 -
General and administrative 9,882 2,881 21,973 19,600
Depreciation and amortization46,658 45,201 91,304 89,318
Interest (Note 3) 91,018 90,610 180,988 181,603
Total expenses 320,328 285,711 628,335 584,532
Net loss $(46,668) $ (2,776) $(89,132) $(27,183)
Allocation of net loss (Note 2):
Class A Limited Partners $(42,001) $ (2,499) $(80,219) $(24,465)
Per Unit of Class A Limited
Partner Interest (4,000
Units outstanding) $ (10.50) $ (.63) $ (20.05) $ (6.12)
Original Limited Partner $ (4,200) $ (249) $ (8,022) $ (2,446)
General Partners $ (467) $ (28)$ (891) $ (272)
</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 Six Months
Ended June 30,
1997 1996
Operating activities:
<S> <C> <C>
Net loss $(89,132) $ (27,183)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 91,304 89,318
Interest earned on replacement reserve
escrow (230) -
Changes in assets and liabilities:
Decrease in cash restricted for
tenant security deposits 8,419 2,631
Increase in prepaid expenses and other
assets (7,128) (13,017)
Decrease in accounts payable (14,394) (7,657)
Increase (decrease) in accrued expenses
and other liabilities (4,967) 7,820
Increase in interest due to an affiliate 59,324 59,071
Net cash provided by operating
activities 43,196 110,983
Investing activities:
Additions to fixed assets (41,997) (32,078)
Decrease in accounts payable related to
fixed asset additions (1,718) -
Deposits to replacement reserve escrow (24,218) (24,218)
Withdrawals from replacement reserve escrow 20,880 20,535
Net cash used in investing activities (47,053) (35,761)
Financing activity:
Principal payments on mortgage note payable (8,345) (7,516)
Net increase (decrease) in cash and cash
equivalents (12,202) 67,706
Cash and cash equivalents, beginning of period 75,012 11,153
Cash and cash equivalents, end of period $ 62,810 $ 78,859
</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, 1996 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 June 30, 1997, its
results of operations for the three and six
months ended June 30, 1997 and 1996, and its
cash flows for the six months ended June 30,
1997 and 1996. Certain prior year balances
have been reclassified to conform with current
year consolidated financial statement
presentation.
The results of operations for the three and
six months ended June 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) Summary of Changes in Partners' Deficit
A summary of changes in Partners' deficit for
the six months ended June 30, 1997 is as
follows:
<TABLE>
<CAPTION>
Class A Original Total
Limited Limited General Partners'
Partners Partner Partners Deficit
Balance at
<S> <C> <C> <C> <C>
December 31, 1996$ (272,656)$(436,216)$(1,286,475) $(1,995,347)
Net loss (80,219) (8,022) (891) (89,132)
Balance at
June 30, 1997 $ (352,875)$(444,238)$(1,287,366) $(2,084,479)
</TABLE>
(3)Related Party Transactions
Commencing with the date of acquisition of the
Partnership's property, the Partnership
entered into an agreement under which property
management fees are paid to an affiliate of
the General Partners for services as
management agent. Such agreement provides for
management fees payable monthly at a rate of
5% of the gross receipts from the property
under management. This management agreement
was sold to BRI OP Limited Partnership, a
subsidiary of Berkshire Realty Company Inc., a
publicly traded real estate investment trust
and an affiliate of the General Partners, on
February 28, 1997. The Partnership also
reimburses affiliates of the General Partners
for certain expenses incurred in connection
with the operation of the Partnership and
Continued
KRUPP ASSOCIATES 1980-1 AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
(3)Related Party Transactions, Continued
its property, including computer, insurance,
travel, legal and payroll costs, and with the
costs relating to the preparation and mailing
of reports and other communications to the
Limited Partners. From 1991 through 1996, the
General Partners arranged with the management
agent for the annual waivers of management
fees and expense reimbursements. As a result
of the sale of the management agreement,
monthly payments of management fees were
reinstituted in 1997. Property management
fees paid to an affiliate of the General
Partners were $13,262 and $26,767 for the
three and six months ended June 30, 1997,
respectively, and $0 for both the three and
six months ended June 30, 1996.
Interest accrued on borrowings from the
General Partners or their affiliates was
$30,247 and $59,324 for the three and six
months ended June 30, 1997,respectively, and
$29,400 and $59,071 for the three and six
months ended June 30, 1996, respectively.
<PAGE>
KRUPP ASSOCIATES 1980-1 AND SUBSIDIARY
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 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) 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 when necessary. 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
from 1991 through 1996, have arranged for the
waiver of property management fees and expense
reimbursements payable to the management
agent, also an affiliate of the General
Partners. Monthly payments of management fees
were reinstituted in 1997 as a result of the
sale of the property management contract to 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, as of June
30, 1997, the Partnership is current on its
mortgage payments.
Subsequent to the end of the second quarter of
1997, on July 10, 1997, the General Partners
entered into a purchase and sale agreement for
the sale of Riverside to an unaffiliated
buyer, for the selling price of $3,750,000.
It is is expected that the sale will be
consummated during the third quarter of 1997.
It is anticipated that all sale proceeds will
be used to satisfy Partnership obligations and
no funds will be available to investors for
distribution. In the event the property is
sold, the Partnership will be liquidated.
Continued
<PAGE>
KRUPP ASSOCIATES 1980-1 AND SUBSIDIARY
Cash Flow (Deficit)
Shown below, as required by the Partnership
Agreement, is the calculation of Cash Flow
(Deficit) of the Partnership for the six
months ended June 30, 1997. The General
Partners provide the information below to meet
requirements of the Partnership Agreement.
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> <C>
Net loss for tax purposes $ (32,000)
Items not requiring (requiring) the use of
operating funds:
Tax basis depreciation and amortization 34,000
Principal payments on mortgage (8,000)
Expenditures for capital improvements (42,000)
Cash Flow (Deficit) $ (48,000)
</TABLE>
Operations
In comparing the three and six months ended
June 30, 1997 and 1996, the decrease in cash
flow is attributable to an increase in net
loss, as revenue decreased and expenses
increased.
Rental revenue decreased for the three and six
months ended June 30, 1997 and June 30, 1996
due to a decline in the average occupancy of
Riverside's commercial space from being fully
occupied at 100% during both the first and
second quarters of 1996, to an average
occupancy of 85% and 88% during the first and
second quarters of 1997, respectively.
Total expenses increased for the three and six
months ended June 30, 1997 as compared to the
same period in 1996, with increases in
maintenance expense, management fees and
general and administrative expenses.
Maintenance expense increased due to an
increase in cleaning services. Monthly
payments of management fees were reinstituted
in 1997 as a result of the sale of the
property management contract to an affiliate
of the General Partners.
<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/Wayne H. Zarozny
Wayne H. Zarozny
Treasurer and Chief Accounting Officer
of The Krupp Corporation,
a General Partner.
<PAGE>
DATE: August 12, 1997
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Krupp
Associates 1980-1 Financial Statements for the six months ended June 30, 1997
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> 12-31-97
<PERIOD-END> 06-30-97
<CASH> 62,810
<SECURITIES> 0
<RECEIVABLES> 2,217<F1>
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 172,861
<PP&E> 5,012,882<F2>
<DEPRECIATION> (2,859,100)<F3>
<TOTAL-ASSETS> 2,392,170
<CURRENT-LIABILITIES> 1,012,035
<BONDS> 3,464,614<F4>
0
0
<COMMON> (2,084,479)<F5>
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 2,392,170
<SALES> 0
<TOTAL-REVENUES> 539,203<F6>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 447,347<F7>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 180,988
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (89,132)<F8>
<EPS-PRIMARY> 0<F8>
<EPS-DILUTED> 0<F8>
<FN>
<F1>Includes all receivables grouped in "Prepaid Expenses and Other Assets" on
the balance sheet.
<F2>Includes apartment complexes of $4,866,257 and deferred expenses of $146,625.
<F3>Included depreciations of $2,819,651 and amortization of deferred expenses
of $39,449.
<F4>Represents mortgage note payable of $2,207,229 and note payable to affiliate
of $1,257,385.
<F5>Represents total deficit of the general partners (1,287,366) and limited
partners (797,113).
<F6>Includes all revenue of the Partnership.
<F7>Includes operating expenses of $290,863 real estate taxes of $65,180 and
depreciation and amortization of $91,304.
<F8>Net loss allocated (8,022) to general partners and (88,246) to limited
partners. Average net loss of ($20.05) per unit on 4,000 units outstanding.
</FN>
</TABLE>
