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, 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 0-11985
Krupp Realty Limited Partnership-V
Massachusetts 04-2796207
(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
<TABLE>
<CAPTION>
KRUPP REALTY LIMITED PARTNERSHIP-V
BALANCE SHEETS
ASSETS
March 31, December 31,
1995 1994
<S> <C> <C>
Multi-family apartment complexes, net of
accumulated depreciation of $35,741,241
and $34,905,809, respectively $37,707,892 $38,419,783
Cash and cash equivalents 1,209,916 598,443
Cash restricted for tenant security deposits 516,239 516,327
Cash restricted for capital improvements 687,103 919,047
Prepaid expenses and other assets 1,061,418 1,568,572
Deferred expenses, net of accumulated
amortization of $484,936 and $463,623,
respectively 560,695 582,008
Total assets $41,743,263 $42,604,180
LIABILITIES AND PARTNERS' DEFICIT
Mortgage notes payable $47,247,729 $47,390,488
Accounts payable 211,956 370,107
Accrued real estate taxes 1,489,358 1,895,473
Accrued expenses and other liabilities 1,199,184 1,219,501
Due to affiliates 1,230,841 1,266,260
Total liabilities 51,379,068 52,141,829
Commitments and contingencies (Note 2)
Partners' deficit (Note 3) (9,635,805) (9,537,649)
Total liabilities and partners' deficit $41,743,263 $42,604,180
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-V
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months
Ended March 31,
1995 1994
<S> <C> <C>
Revenue:
Rental $3,581,165 $3,329,663
Interest income 20,340 17,356
Total revenue 3,601,505 3,347,019
Expenses:
Operating (including reimbursements
to affiliates of $23,091 and $91,195,
respectively) 968,537 1,013,372
Maintenance 153,426 118,975
General and administrative (including
reimbursements to affiliates of
$14,298 and $20,286, respectively) 20,997 29,113
Real estate taxes 591,266 557,726
Management fees to an affiliate 120,157 143,140
Depreciation and amortization 856,745 814,426
Interest 988,533 998,601
Total expenses 3,699,661 3,675,353
Net loss $ (98,156) $ (328,334)
Allocation of net loss (Note 3):
Per Unit of Investor Limited
Partner Interest (35,200
units outstanding) $ (2.76) $ (9.23)
General Partners $ (982) $ (3,283)
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-V
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
For the Three Months
Ended March 31,
1995 1994
<S> <C> <C>
Operating activities:
Net loss $ (98,156) $ (328,334)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 856,745 814,426
Decrease (increase) in cash restricted for tenant
security deposits 88 (2,690)
Decrease in prepaid expenses and other assets 507,154 405,200
Decrease in accrued real estate taxes (406,115) (428,247)
Decrease in accounts payable (102,662) (537,449)
Increase (decrease) in accrued expenses and
other liabilities (20,317) 8,640
Decrease in due to affiliates (35,419) (67,735)
Net cash provided by (used in) operating
activities 701,318 (136,189)
Investing activities:
Additions to fixed assets (123,541) (327,928)
Decrease in cash restricted for capital
improvements 231,944 221,514
Increase (decrease) in accounts payable related
to fixed asset additions (55,489) 21,423
Net cash provided by (used in)
investing activities 52,914 (84,991)
Financing activities:
Principal payments on mortgage notes payable (142,759) (131,600)
Deferred expenses - (694)
Net cash used in financing activities (142,759) (132,294)
Net increase (decrease) in cash and cash
equivalents 611,473 (353,474)
Cash and cash equivalents, beginning of period 598,443 1,159,301
Cash and cash equivalents, end of period $1,209,916 $ 805,827
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-V
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
Realty Limited Partnership-V (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 recurring accruals) necessary to present fairly the
Partnership's financial position as of March 31, 1995, and its results
of operations and cash flows for the three months ended March 31, 1995
and 1994. Certain prior year balances have been reclassified to conform
with the current period consolidated financial statement presentation.
The results of operations for the three months ended March 31, 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) Legal Proceedings
The Partnership is a defendant in a class action suit related to the
practice of giving discounts for the early or timely payments of rent at
Park Place. The central issue of the complaint was whether the
operative lease, by allowing tenants a discount, of typically $30, if
rent was paid on or before the first day of the month, violated a
Chicago municipal ordinance relating to late fee charges. The ordinance
in question limited late fee charges to $10 per month if the rent was
more than 5 days late. The allegation was that, notwithstanding the
stated rental rate and printed discount, the practice represented an
unlawful means of exacting late fee charges. In addition to seeking
damages for any "forfeited" discounts, plaintiffs seek statutory damages
of two months rent per lease violation plus reasonable attorneys' fees.
To be eligible for such punitive damages plaintiffs must prove that
defendants deliberately used a provision prohibited by the ordinance.
During 1994, the Court ruled in favor of the Defendants, and accepted
the Partnership's Motion to Dismiss the Plaintiff's Third Amended
Complaint. The Plaintiffs have filed an appeal with the Appellate Court
of Illinois, First District, which is pending. Although management
believes that the defendants will prevail on the issue of statutory
damages, the ultimate outcome of this litigation, including an estimate
of any potential loss, cannot be presently determined and accordingly no
provision for loss has been made in the accompanying financial
statements.
Continued
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-V
NOTES TO FINANCIAL STATEMENTS - Continued
(3) Changes in Partners' Deficit
A summary of changes in Partners' deficit for the three months ended
March 31, 1995 is as follows:
<TABLE>
<CAPTION>
Investor Original Total
Limited Limited General Partners'
Partners Partner Partners Deficit
<S> <C> <C> <C> <C>
Balance at
December 31, 1994 $(8,903,710) $(234,539) $(399,400) $(9,537,649)
Net loss (97,174) - (982) (98,156)
Balance at
March 31, 1995 $(9,000,884) $(234,539) $(400,382) $(9,635,805)
</TABLE>
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-V
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 real estate
investments. Such ability is also dependent upon the future availability
of bank borrowing sources as current debt matures. These sources of
liquidity will be used by the Partnership for payment of expenses related
to real estate operations, debt service, capital improvements and expenses.
Cash flow, if any, as calculated under Section 8.2(a) of the Partnership
Agreement ("Cash Flow"), will then be available for distribution to the
Partners. The General Partners discontinued distributions during 1990 due
to insufficient operating cash flow. The Partnership will resume
distributions when the properties generate sustainable cash flow in excess
of operating and capital improvement needs and after paying off any
existing obligations.
The Partnership's major capital improvement project, the repair of Park
Place's building facade, is approximately 95% complete as of March 31,
1995. The Partnership anticipates that the restoration project will be
completed in 1995, and will greatly enhance the appearance of the property.
This improvement, along with extensive interior improvements, is being
funded from established reserves and has resulted in both increased rents
and increased occupancy.
Prior to Park Place's refinancing on September 15, 1993, management
suspended payment of property management fees and expense reimbursements to
an affiliate. At March 31, 1995, past due fees and reimbursements totalled
approximately $1,300,000. Subsequent to the refinancing, the Partnership
resumed current payments of property management fees and expense
reimbursements and expects to generate sufficient cash flow to begin to
repay the accrued obligation.
Currently, Marine Terrace is being marketed for sale in 1995. If the
property is sold, the proceeds from the sale will be used to repay the
mortgage on Marine Terrace, closing costs, and other Partnership
liabilities.
The General Partners are in the process of reviewing liquidity options
for the limited partners in the Partnership. After falling precipitously
during the recession, real estate values have recently begun to recover.
Typically, the only option available to a limited partner to liquidate his
or her partnership interest has been to sell partnership units in the
thinly-traded secondary market or directly to a small number of "vulture
funds" seeking to purchase units at very low prices. While the Partnership
may not be a target, some speculators have made offers to partnerships to
acquire all or a significant portion of the outstanding partnership units
at prices substantially below net asset value. The General Partners are
exploring other options in an effort to provide the Partnership's with an
opportunity to liquidate their partnership interests on reasonable terms
giving due regard to property values and tax consequences.
Continued
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-V
Cash Flow
Shown below, as required by the Partnership Agreement, is the
calculation of Cash Flow for the three months ended March 31, 1995.
<TABLE>
<CAPTION>
Rounded to $1,000
<S> <C>
Net loss for tax purposes $ (95,000)
Items not requiring (requiring)
the use of operating funds:
Tax basis depreciation and amortization 854,000
Expenditures for capital improvements (124,000)
Principal payments on mortgage notes payable (143,000)
Working capital reserves (550,000)
Cash Flow Deficit $ (58,000)
</TABLE>
Operations
The increase in rental revenue for the three months ended March 31, 1995
as compared to the same period in 1994 is due to increases in rental rates
at Park Place and Marine Terrace during the second half of 1994. In
addition, average residential occupancy for the Partnership was 94% for the
three months ended March 31, 1995 and 93% for the same period in 1994. The
increase in interest income is due to a rise in the short-term interest
rates.
In comparing the first quarter of 1995 with the same period in 1994,
total expenses remained relatively stable during the period with the
exception of operating and maintenance expenses. The decrease in operating
expenses was due to management's efforts to reduce reimbursable operating
costs. Certain of these cost savings are anticipated to continue
throughout 1995. The increase in maintenance expenses is primarily for the
painting of the interior units and the installation of window dressings at
Park Place.
<PAGE>
KRUPP REALTY LIMITED PARTNERSHIP-V
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Partnership is a defendant in a class action suit related to the
practice of giving discounts for the early or timely payments of rent at
Park Place. The central issue of the complaint was whether the
operative lease, by allowing tenants a discount, of typically $30, if
rent was paid on or before the first day of the month, violated a
Chicago municipal ordinance relating to late fee charges. The ordinance
in question limited late fee charges to $10 per month if the rent was
more than 5 days late. The allegation was that, notwithstanding the
stated rental rate and printed discount, the practice represented an
unlawful means of exacting late fee charges. In addition to seeking
damages for any "forfeited" discounts, plaintiffs seek statutory damages
of two months rent per lease violation plus reasonable attorneys' fees.
To be eligible for such punitive damages plaintiffs must prove that
defendants deliberately used a provision prohibited by the ordinance.
During 1994, the Court ruled in favor of the Defendants, and accepted
the Partnership's Motion to Dismiss the Plaintiff's Third Amended
Complaint. The Plaintiffs have filed an appeal with the Appellate Court
of Illinois, First District, which is pending.
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>
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.
Krupp Realty Limited Partnership-V
(Registrant)
BY:/s/Marianne Pritchard
Marianne Pritchard
Treasurer and Chief Accounting Officer
The Krupp Corporation, a General Partner
DATE: May 4, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This FDS schedule Krupp Realty Fund-V contains summary finanical
information extracted from the financial statements for the quarter ended
March 31, 1995 and is qualified in its entirety by reference to such
financials statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 1,726,155
<SECURITIES> 0
<RECEIVABLES> 41,311
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,707,210
<PP&E> 74,494,764<F1>
<DEPRECIATION> (36,226,177)<F2>
<TOTAL-ASSETS> 41,743,263
<CURRENT-LIABILITIES> 4,131,339
<BONDS> 47,247,729<F3>
<COMMON> (9,635,805)<F4>
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 41,743,263
<SALES> 3,601,505
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,711,128<F5>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 988,533
<INCOME-PRETAX> (98,156)
<INCOME-TAX> 0
<INCOME-CONTINUING> (98,156)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (98,156)
<EPS-PRIMARY> 0<F6>
<EPS-DILUTED> 0<F6>
<FN>
<F1>Includes apartment complexes of $73,449,133 and deferred expenses of
$1,045,631.
<F2>Includes depreciation of $35,741,241 and amortization of $484,936.
<F3>Represents mortgage notes payable.
<F4>Represents total deficit of general partners and limited partner of ($400,382)
and ($9,235,423), respecitvely.
<F5>Includes operating expenses $1,263,117, real estate tax expense $591,266 and
depreication and amortization of $856,745.
<F6>Net loss allocated ($982) to the G.P.'s and ($97,174) to the L.P.'s for the 3
months ended 3/31/95. Average net income per unit of L.P. interest is ($2.76)
on 35,200 units outstanding.
</FN>
</TABLE>
