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 0-11987
Krupp Realty Limited Partnership-IV
Massachusetts 04-2772783
(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 REALTY LIMITED PARTNERSHIP-IV AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
September 30, December 31,
1995 1994
<S> <C> <C>
Multi-family apartment complexes,
less accumulated depreciation of
$22,164,276 and $20,636,291,
respectively $17,488,631 $18,714,181
Cash and cash equivalents 2,351,894 2,500,074
Other investments (Note 3) 246,429 -
Cash restricted for capital improvements 21,714 20,340
Prepaid expenses and other assets 636,402 723,507
Deferred expenses, net of accumulated
amortization of $89,991 and $55,358,
respectively 308,667 347,041
Total assets $21,053,737 $22,305,143
LIABILITIES AND PARTNERS' DEFICIT
Mortgage notes payable $21,121,965 $21,667,289
Other liabilities 1,007,295 925,234
Total liabilities 22,129,260 22,592,523
Partners' equity (deficit) (Note 2)
Limited Partners
(30,000 units outstanding) 434,197 1,182,933
Original Limited Partners (1,240,418) (1,208,892)
General Partners (269,302) (261,421)
Total Partner's deficit (1,075,523) (287,380)
Total liabilities and partners' deficit $21,053,737 $22,305,143
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-IV AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Revenues:
Rental income $1,726,117 $1,694,116 $5,172,739 $4,966,195
Other income 43,634 27,784 123,553 86,315
Total revenues 1,769,751 1,721,900 5,296,292 5,052,510
Expenses:
Operating (including
reimbursements of $33,220,
$73,000, $69,491 and
$219,105, respectively) 511,724 526,636 1,395,640 1,581,904
Maintenance 177,516 200,040 452,916 455,883
General and administrative
(including reimbursements
to affiliates of
$9,858, $16,457, $29,576 and
$49,531, respectively) 44,344 48,969 97,136 104,560
Real estate taxes 184,993 141,565 483,799 397,732
Management fees paid to
affiliates 75,161 66,436 215,260 189,668
Depreciation and amortization 528,846 518,073 1,568,300 1,581,417
Interest 327,786 410,798 986,305 1,125,519
Total expenses 1,850,370 1,912,517 5,199,356 5,436,683
Income(loss) before minority
interest (80,619) (190,617) 96,936 (384,173)
Minority interest 481 1,099 (1,017) 1,496
Net income (loss) $ (80,138) $ (189,518) $ 95,919 $ (382,677)
Allocation of net income(loss) (Note 2):
Per Unit of Investor Limited
Partner Interest
(30,000 Units outstanding): $ (2.54) $ (6.00) $ 3.04 $ (12.12)
Original Limited Partner $ (3,206) $ (7,581) $ 3,836 $ (15,307)
General Partners $ (801) $ (1,895) $ 960 $ (3,827)
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-IV AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Nine Months Ended
September 30,
1995 1994
<S> <C> <C>
Operating activities:
Net income(loss) $ 95,919 $ (382,677)
Adjustments to reconcile net income(loss) to
net cash provided by operating activities:
Depreciation and amortization 1,568,300 1,581,417
Decrease in prepaid expenses and
other assets 87,105 243,412
Increase in other liabilities 82,061 73,131
Net cash provided by operating
activities 1,833,385 1,515,283
Investing activities:
Increase in other investments (246,429) -
Increase in cash restricted for capital
improvements (47,145) -
Additions to fixed assets (302,435) (231,922)
Releases from cash restricted for capital
improvements 45,771 148,974
Net cash used in investing
activities (550,238) (82,948)
Financing activities:
Proceeds from refinancing mortgage
note payable - 7,000,000
Repayment of mortgage note payable - (7,623,487)
Increase deferred expenses (1,941) (195,143)
Distributions (884,062) (147,372)
Principal payments on mortgage notes payable (545,324) (523,973)
Net cash used in financing
activities (1,431,327) (1,489,975)
Net decrease in cash and cash equivalents (148,180) (57,640)
Cash and cash equivalents, beginning of period 2,500,074 2,718,901
Cash and cash equivalents, end of period $ 2,351,894 $ 2,661,261
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-IV AND SUBSIDIARIES
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 Realty Limited
Partnership-IV and Subsidiaries (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,
1994 for additional information relevant to significant accounting policies
followed by the Partnership.
The consolidated financial statements present consolidated assets,
liabilities and operations of Pavillion Partners, Ltd., Westbridge Partners,
Ltd., and Krupp Realty Limited Partnership-IV. Westcop has a 1% interest
in the operations of Westbridge Partners, Ltd., and Pavillion Partners,
Ltd. At September 30, 1995, minority interest of $29,020 is included in
other liabilities.
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 and 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 the current year
consolidated 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) Changes in Partners' Deficit
<TABLE>
<CAPTION>
A summary of changes in partners' deficit for the nine months ended
September 30, 1995 is as follows:
Investor Original Total
Limited Limited General Partners'
Partners Partner Partners Deficit
<C> <C> <C> <C> <C>
Balance at
December 31, 1994 $1,182,933 $(1,208,892) $(261,421) $ (287,380)
Net income 91,123 3,836 960 95,919
Distributions $ (839,859) (35,362) (8,841) (884,062)
Balance at
September 30, 1995 $ 434,197 $(1,240,418) $(269,302) $(1,075,523)
</TABLE>
(3) Other Investments
At September 30, 1995, the Partnership held investments in commercial paper
maturing within one year. Cost approximates market value.
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-IV AND SUBSIDIARIES
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 operations of its remaining real estate
investments. Such ability is also dependent upon the future availability of
bank borrowings, and upon the future refinancing and sale of the Partnership's
remaining real estate investments. These sources of liquidity will be used by
the Partnership for payment of expenses related to real estate operations,
capital improvements, refinancings and expenses. Cash Flow, if any, as
calculated under Section 8.2(a) of the Partnership Agreement, will then be
available for distribution to the Partners.
Due to improvements in the operations of the properties and a reduction in
debt service discussed below, the Partnership had sufficient cash flow in 1994
to reinstate semi-annual distributions. The distributions were increased in
February, 1995 to an annualized rate of 3% of remaining invested capital.
The Partnership refinanced Pavillion and Indian Run at lower interest rates
during 1994. As a result of the lower rates, the reduced mortgage payments have
provided additional liquidity to the Partnership. This additional liquidity
will assist the Partnership in funding approximately $400,000 in anticipated
capital improvements to the properties in 1995. These improvements consist
of continued interior enhancements that includes the replacement of
appliances, carpeting, and vinyl flooring as needed.
Cash Flow
Shown below is the calculation of Cash Flow as defined by Section 8.2(a) of
the Partnership Agreement for the nine months ended September 30, 1995:
<TABLE>
<CAPTION>
Rounded to $1,000
<S> <C>
Net loss for tax purposes $ (144,000)
Items not requiring (requiring) the use
of operating funds:
Tax basis depreciation and amortization 1,427,000
Tax basis principal payments on mortgage (162,000)
Expenditures for capital improvements (302,000)
Amount required to maintain reasonable
working capital reserves (156,000)
Cash Flow $ 663,000
</TABLE>
Continued
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-IV AND SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - Continued
Operations
Rental income increased for the three and nine months ended September 30,
1995, as compared to the same period in 1994. The increase in rental revenue is
due to rental rate increases at all of the partnership properties. The increase
in the rental rate is a direct result of the capital improvement programs
implemented in 1994 by management. Occupancy has remained consistent during
this time.
Other income increased for the three and nine months ended September 30, 1995,
as compared to same period in 1994, due to an increase in interest income earned
on short term investments due to higher average cash balances.
For the three and nine months ended September 30, 1995, as compared to the
same period in 1994, the Partnership recognized a reduction in operating,
general and administrative, and interest expenses. The decrease in operating
and general and administrative expenses was due to management's efforts to
reduce reimbursable costs. Certain of these cost savings are anticipated to
continue throughout 1995. The decrease in interest expense was due to the
refinancings of Indian Run and Pavillion in 1994.
For the three and nine months ended September 30, 1995, as compared to the
same period in 1994, real estate taxes increased due an to increase in the
assessed values of Walden Pond and Pavillion.
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-IV AND SUBSIDIARIES
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 Realty Limited Partnership-IV
(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
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 2,373,608
<SECURITIES> 246,429
<RECEIVABLES> 22,824
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 613,578
<PP&E> 40,051,565<F1>
<DEPRECIATION> (22,254,267)<F2>
<TOTAL-ASSETS> 21,053,737
<CURRENT-LIABILITIES> 1,007,295
<BONDS> 21,121,965<F3>
<COMMON> (1,075,523)<F4>
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 21,053,737
<SALES> 5,296,292
<TOTAL-REVENUES> 5,296,292
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 4,214,068<F5>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 986,305
<INCOME-PRETAX> 95,919
<INCOME-TAX> 0
<INCOME-CONTINUING> 95,919
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 95,919
<EPS-PRIMARY> 0<F6>
<EPS-DILUTED> 0<F6>
<FN>
<F1>Includes apartment complexes of $39,652,907 and deferred expenses of
$398,658.
<F2>Includes depreciation of $22,164,276 and amortization of deferred expneses,
$89,991.
<F3>Represents mortgage note payable.
<F4>Represents total equity of general partners ($269,302) and limited partners
($806,221).
<F5>Includes oprating expenses $2,160,952, real estate tax $483,799,
depreciation and amortization of $1,568,300 adn minority interest of $1,017.
<F6>Net income allocated $960 to general partners and $94,959 to limited
partners for the nine months ended 9/30/95. Net income is $3.04 per unit for
30,000 units outstanding.
</FN>
</TABLE>
