<PAGE> 1
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 Ended JUNE 30, 1997
Commission File Number 2-77645
REAL ESTATE ASSOCIATES LIMITED V
(A California Limited Partnership)
I.R.S. Employer Identification No. 95-3768810
9090 WILSHIRE BLVD., SUITE 201
BEVERLY HILLS, CALIF. 90211
Registrant's Telephone Number,
Including Area Code (310) 278-2191
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 twelve 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> 2
REAL ESTATE ASSOCIATES LIMITED V
(A CALIFORNIA LIMITED PARTNERSHIP)
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1997
<TABLE>
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets, June 30, 1997 and December 31, 1996 ....................... 1
Statements of Operations,
Six and Three Months Ended June 30, 1997 and 1996 .................... 2
Statement of Partners' Equity (Deficiency),
Six Months Ended June 30, 1997 ....................................... 3
Statements of Cash Flows,
Six Months Ended June 30, 1997 and 1996 .............................. 4
Notes to Financial Statements ............................................. 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................................... 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings ......................................................... 10
Item 6. Exhibits and Reports on Form 8-K .......................................... 10
Signatures.......................................................................... 11
</TABLE>
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REAL ESTATE ASSOCIATES LIMITED V
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
JUNE 30, 1997 AND DECEMBER 31, 1996
ASSETS
<TABLE>
<CAPTION>
1997 1996
(Unaudited) (Audited)
----------- -----------
<S> <C> <C>
INVESTMENTS IN LIMITED PARTNERSHIPS (Note 2) $ 1,374,060 $ 1,305,672
CASH AND CASH EQUIVALENTS (Note 1) 2,016,814 1,953,506
----------- -----------
TOTAL ASSETS $ 3,390,874 $ 3,259,178
=========== ===========
LIABILITIES AND PARTNERS' EQUITY (DEFICIENCY)
LIABILITIES:
Accounts payable $ 3,147 $ 9,978
----------- -----------
COMMITMENTS AND CONTINGENCIES (Notes 3 and 4)
PARTNERS' EQUITY (DEFICIENCY):
General partners (123,469) (124,854)
Limited partners 3,511,196 3,374,054
----------- -----------
3,387,727 3,249,200
----------- -----------
TOTAL LIABILITIES AND PARTNERS' EQUITY (DEFICIENCY) $ 3,390,874 $ 3,259,178
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
1
<PAGE> 4
REAL ESTATE ASSOCIATES LIMITED V
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
SIX AND THREE MONTHS ENDED JUNE 30, 1997 AND 1996
(Unaudited)
<TABLE>
<CAPTION>
Six months Three months Six months Three months
ended ended ended ended
June 30, 1997 June 30, 1997 June 30, 1996 June 30, 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INTEREST INCOME $ 44,802 $ 23,224 $ 32,400 $ 16,203
--------- --------- --------- ---------
OPERATING EXPENSES:
Legal and accounting 39,252 19,364 39,657 13,521
Management fees - general partner (Note 3) 127,224 63,612 127,224 63,612
Administrative (Note 3) 29,031 17,176 22,042 12,588
--------- --------- --------- ---------
Total operating expenses 195,507 100,152 188,923 89,721
--------- --------- --------- ---------
LOSS FROM OPERATIONS (150,705) (76,928) (156,523) (73,518)
DISTRIBUTIONS FROM LIMITED
PARTNERSHIPS RECOGNIZED AS
INCOME (Note 2) 95,232 30,518 119,913 71,341
EQUITY IN INCOME OF LIMITED
PARTNERSHIP AND AMORTI-
ZATION OF ACQUISITION
COSTS (Note 2) 194,000 97,000 250,000 125,000
--------- --------- --------- ---------
NET INCOME $ 138,527 $ 129,701 $ 213,390 $ 122,823
========= ========= ========= =========
NET INCOME PER LIMITED PARTNERSHIP
INTEREST (Note 1) $ 18 $ 17 $ 27 $ 16
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE> 5
REAL ESTATE ASSOCIATES LIMITED V
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENT OF PARTNERS' EQUITY (DEFICIENCY)
SIX MONTHS ENDED JUNE 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
----------- ---------- ----------
<S> <C> <C> <C>
PARTNERSHIP INTERESTS,
June 30, 1997 7,808
==========
EQUITY (DEFICIENCY),
January 1, 1997 $ (124,854) $3,374,054 $3,249,200
Net income for the six months
ended June 30, 1997 1,385 137,142 138,527
---------- ---------- ----------
EQUITY (DEFICIENCY),
June 30, 1997 $ (123,469) $3,511,196 $3,387,727
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 6
REAL ESTATE ASSOCIATES LIMITED V
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 138,527 $ 213,390
Adjustments to reconcile net income to
net cash used in operating activities:
Equity in income of limited partnerships
and amortization of acquisition costs (194,000) (250,000)
Increase in other assets - (600)
Decrease in accounts payable (6,831) (28,919)
----------- -----------
Net cash used in operating activities (62,304) (66,129)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Distributions from limited partnerships recognized
as a return of capital 125,612 139,633
----------- -----------
NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS 63,308 73,504
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,953,506 1,876,153
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 2,016,814 $ 1,949,657
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 7
REAL ESTATE ASSOCIATES LIMITED V
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL
The information contained in the following notes to the financial
statements is condensed from that which would appear in the annual audited
financial statements; accordingly, the financial statements included herein
should be reviewed in conjunction with the financial statements and related
notes thereto contained in the annual report for the year ended December
31, 1996 prepared by Real Estate Associates Limited V (the "Partnership").
Accounting measurements at interim dates inherently involve greater
reliance on estimates than at year end. The results of operations for the
interim period presented are not necessarily indicative of the results for
the entire year.
In the opinion of the Partnership, the accompanying unaudited financial
statements contain all adjustments (consisting primarily of normal
recurring accruals) necessary to present fairly the financial position as
of June 30, 1997, and the results of operations for the six and three
months then ended and changes in cash flows for the six months then ended.
The general partners have a 1 percent interest in profits and losses of the
Partnership. The limited partners have the remaining 99 percent interest
which is allocated in proportion to their respective individual
investments. National Partnership Investments Corp. (NAPICO) is the
corporate general partner of the Partnership.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
METHOD OF ACCOUNTING FOR INVESTMENT IN LIMITED PARTNERSHIPS
The investment in limited partnerships is accounted for on the equity
method. Acquisition, selection and other costs related to the acquisition
of the projects are capitalized as part of the investment balance and are
being amortized on a straight line basis over the estimated lives of the
underlying assets, which is generally 30 years.
NET INCOME PER LIMITED PARTNERSHIP INTEREST
Net income per limited partnership interest was computed by dividing the
limited partners' share of net income by the number of limited partnership
interests outstanding during the year. The number of limited partnership
interests was 7,808 for the periods presented.
5
<PAGE> 8
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash and bank certificates of deposit
with an original maturity of three months or less. The Partnership has its
cash and cash equivalents on deposit primarily with one high credit quality
financial institution. Such cash and cash equivalents are in excess of the
FDIC insurance limit.
INCOME TAXES
No provision has been made for income taxes in the accompanying financial
statements since such taxes, if any, are the liability of the individual
partners.
IMPAIRMENT OF LONG-LIVED ASSETS
The Partnership adopted Statement of Financial Accounting Standards No.
121, Account for the Improvement of Long-Lived Assets and for Long-Lived
Assets To Be Disposed Of as of January 1, 1996 without a significant effect
on its financial statements. The Partnership reviews long-lived assets to
determine if there has been any permanent impairment whenever events or
changes in circumstances indicate that the carrying amount of the asset may
not be recoverable. If the sum of the expected future cash flows is less
than the carrying amount of the assets, the Partnership recognizes an
impairment loss.
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS
The Partnership holds limited partnership interests in 19 limited
partnerships at June 30, 1997. The partnerships own residential rental
projects consisting of 1,319 apartment units. The mortgage loans of these
projects are insured by various governmental agencies.
The Partnership, as a limited partner, is entitled to 75 percent to 99
percent of the profits and losses in these limited partnerships.
Equity in losses of limited partnerships is recognized in the financial
statements until the limited partnership investment account is reduced to a
zero balance. Losses incurred after the limited partnership investment
account is reduced to zero are not recognized.
Distributions from the limited partnerships are accounted for as a return
of capital until the investment balance is reduced to zero or to a negative
amount equal to further capital contributions required. Subsequent
distributions received are recognized as income.
6
<PAGE> 9
REAL ESTATE ASSOCIATES LIMITED V
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 1997
NOTE 2 - INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
The following is a summary of the investment in limited partnerships for
the six months ended June 30, 1997:
<TABLE>
<S> <C>
Balance, beginning of period $1,305,672
Cash distributions recognized as a
return of capital (125,612)
Amortization of acquisition costs (4,000)
Equity in income of limited partnerships 198,000
----------
Balance, end of period $1,374,060
==========
</TABLE>
The following are unaudited combined estimated statements of operations for
the six months ended June 30, 1997 and 1996 for the limited partnerships in
which the Partnership has investments:
<TABLE>
<CAPTION>
Six months Three months Six months Three months
ended ended ended ended
June 30, 1997 June 30, 1997 June 30, 1996 June 30, 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
REVENUES
Rental income $ 6,322,000 $ 3,161,000 $ 6,308,000 $ 3,154,000
----------- ----------- ----------- -----------
EXPENSES
Depreciation 952,000 476,000 942,000 471,000
Interest 2,680,000 1,340,000 2,758,000 1,379,000
Operating 2,720,000 1,360,000 2,650,000 1,325,000
----------- ----------- ----------- -----------
6,352,000 3,176,000 6,350,000 3,175,000
----------- ----------- ----------- -----------
Net loss $ (30,000) $ (15,000) $ (42,000) $ (21,000)
=========== =========== =========== ===========
</TABLE>
NAPICO, or one of its affiliates, is the general partner and property
management agent for certain of the limited partnerships included above.
The Partnership is undergoing an extensive review of disposition,
refinancing or re-engineering alternatives for the properties in its
Portfolio that are subject to governmental mortgage and rental subsidy
programs. The Partnership has begun to incur expenses in connection with
this review by various third party professionals. Amounts incurred to date
are not material to the operating results of the Partnership.
NOTE 3 - MANAGEMENT FEES AND EXPENSES DUE TO GENERAL PARTNER
Under the terms of the Restated Certificate and Agreement of Limited
Partners, the Partnership is obligated to NAPICO for an annual management
fee equal to 0.4 percent of the invested assets of the limited
partnerships. Invested assets are defined as the costs of acquiring project
interests, including the proportionate amount of the mortgage loans related
to the Partnership's interests in the capital accounts of the respective
partnerships. The fee was approximately $127,000 for the six months ended
June 30, 1997 and 1996.
7
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REAL ESTATE ASSOCIATES LIMITED V
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 1997
NOTE 3 - MANAGEMENT FEES AND EXPENSES DUE TO GENERAL PARTNER (CONTINUED)
The Partnership reimburses NAPICO for certain expenses. The reimbursement
paid to NAPICO was $9,790 and $8,970 for the six months ended June 30, 1997
and 1996, respectively, and is included in administrative expenses.
NOTE 4 - CONTINGENCIES
The corporate general partner of the Partnership is involved in various
lawsuits arising from transactions in the ordinary course of business. In
the opinion of management and the corporate general partner, the claims
will not result in any material liability to the Partnership.
NOTE 5 - FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "Disclosure about Fair
Value of Financial Instruments," requires disclosure of fair value
information about financial instruments. The carrying amount of assets and
liabilities reported on the balance sheets that require such disclosure
approximates fair value due to their short-term maturity.
8
<PAGE> 11
REAL ESTATE ASSOCIATES LIMITED V
(A CALIFORNIA LIMITED PARTNERSHIP)
JUNE 30, 1997
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Partnership's primary sources of funds include interest income earned
from investing available cash and distributions from limited partnerships
in which the Partnership has invested.
RESULTS OF OPERATIONS
Partnership revenues consist primarily of interest income earned on
certificates of deposit and other temporary investment of funds not
required for investment in local partnerships.
Operating expenses consist primarily of recurring general and
administrative expenses and professional fees for services rendered to the
Partnership. In addition, an annual Partnership management fee in an amount
equal to .4 percent of invested assets is payable to the corporate general
partner. Operating expenses are consistent with the prior year.
The Partnership is undergoing an extensive review of disposition,
refinancing or re-engineering alternatives for the properties in its
Portfolio that are subject to governmental mortgage and rental subsidy
programs. The Partnership has begun to incur expenses in connection with
this review by various third party professionals. Amounts incurred to date
are not material to the operating results of the Partnership.
The Partnership accounts for its investments in the local limited
partnerships on the equity method, thereby adjusting its investment balance
by its proportionate share of the income or loss of the local limited
partnerships. Losses incurred after the limited partnership investment
account is reduced to zero are not recognized in accordance with the equity
accounting method.
Distributions received from limited partnerships are recognized as return
of capital until the investment balance has been reduced to zero or to a
negative amount equal to future capital contributions required. Subsequent
distributions received are recognized as income.
Except for certificates of deposit and money market funds, the
Partnership's investments are entirely interests in other limited
partnerships primarily owning government assisted projects. Available cash
is invested in these funds earning interest income as reflected in the
statement of operations. These funds can be converted to cash to meet
obligations as they arise. The Partnership intends to continue investing
available funds in this manner.
9
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REAL ESTATE ASSOCIATES LIMITED V
(A CALIFORNIA LIMITED PARTNERSHIP)
JUNE 30, 1997
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The corporate general partner is involved in various lawsuits. None of these are
related to REAL V.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) No exhibits are required per the provision of Item 7 of regulation
S-K.
10
<PAGE> 13
REAL ESTATE ASSOCIATES LIMITED V
(A CALIFORNIA LIMITED PARTNERSHIP)
JUNE 30, 1997
SIGNATURES
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.
REAL ESTATE ASSOCIATES LIMITED V
(a California limited partnership)
By: National Partnership Investments Corp.
General Partner
Date:
-----------------------------------------
By:
-------------------------------------------
Bruce Nelson
President
Date:
-----------------------------------------
By:
------------------------------------------
Charles H. Boxenbaum
Chief Executive Officer
Date:
-----------------------------------------
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
PARTNERSHIP'S STATEMENTS OF EARNINGS AND BALANCE SHEETS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 2,016,814
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,016,814
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,390,874
<CURRENT-LIABILITIES> 3,147
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 3,387,727
<TOTAL-LIABILITY-AND-EQUITY> 3,390,874
<SALES> 0
<TOTAL-REVENUES> 334,034
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 195,507
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 138,527
<INCOME-TAX> 0
<INCOME-CONTINUING> 138,527
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 138,527
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
