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 SECURITIESx
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 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 0-14393
Krupp Cash Plus Limited Partnership
Massachusetts 04-2865878
(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
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 CASH PLUS LIMITED PARTNERSHIP
BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
June 30, December 31,
1996 1995
Real estate assets:
Retail centers, less accumulated
depreciation of $16,304,018 and
<S> <C> <C>
$15,298,268, respectively $29,497,995 $30,082,471
Mortgage-backed securities ("MBS"), net
of accumulated amortization (Note 4) 4,696,820 5,151,696
Total real estate assets 34,194,815 35,234,167
Cash and cash equivalents 3,267,517 2,841,353
Other investment (Note 4) 492,256 -
Other assets 770,676 782,000
Total assets $38,725,264 $38,857,520
LIABILITIES AND PARTNERS' EQUITY
Accounts payable $ 2,870 $ 6,428
Accrued expenses and other liabilities
(Note 2) 1,188,234 963,809
Total liabilities 1,191,104 970,237
Partners' equity (deficit) (Note 3):
Unitholders (4,000,000 Units outstanding) 37,682,082 38,032,296
Corporate Limited Partner (100 Units
outstanding) 1,172 1,180
General Partners (149,094) (146,193)
Total Partners' equity 37,534,160 37,887,283
Total liabilities and Partners'
equity $38,725,264 $38,857,520
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP CASH PLUS LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months For the Six Months
Ended June 30, Ended June 30,
1996 1995 1996 1995
Revenue:
<S> <C> <C> <C> <C>
Rental $1,471,040 $1,480,928 $3,018,076 $2,990,172
Interest income - MBS
(Note 4) 100,160 119,089 206,545 239,710
Interest income - other 51,235 61,143 95,734 89,073
Total revenue 1,622,435 1,661,160 3,320,355 3,318,955
Expenses:
Operating (Note 5) 332,833 279,815 594,060 518,332
Maintenance 82,361 67,123 158,193 134,174
General and administra-
tive (Note 5) 27,264 51,263 71,943 92,693
Real estate taxes 293,355 301,465 588,607 601,937
Management fees
(Note 5) 81,585 72,281 144,084 134,372
Depreciation 512,833 488,295 1,005,750 967,087
Total expenses 1,330,231 1,260,242 2,562,637 2,448,595
Net income $ 292,204 $ 400,918 $ 757,718 $ 870,360
Allocation of net income
(Note 3):
Unitholders (4,000,000
Units outstanding) $ 286,353 $ 392,891 $ 742,545 $ 852,932
Net income per Unit of
Depositary Receipt $ .08 $ .09 $ .19 $ .21
Corporate Limited
Partner (100 Units
outstanding) $ 8 $ 9 $ 19 $ 21
General Partners $ 5,843 $ 8,018 $ 15,154 $ 17,407
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP CASH PLUS LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Six Months
Ended June 30,
1996 1995
Operating activities:
<S> <C> <C>
Net income $ 757,718 $ 870,360
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 1,005,750 967,087
Amortization of MBS premium, net 994 227
Decrease in other assets 11,324 90,642
Decrease in accounts payable (3,558) (85,150)
Increase in accrued expenses and other
liabilities 224,425 273,747
Net cash provided by operating
activities 1,996,653 2,116,913
Investing activities:
Increase in other investments (492,256) (2,352,726)
Additions to fixed assets (421,274) (341,481)
Principal collections on MBS 453,882 144,078
Net cash used in investing
activities (459,648) (2,550,129)
Financing activity:
Distributions (1,110,841) (1,110,610)
Net increase (decrease) in cash and cash
equivalents 426,164 (1,543,826)
Cash and cash equivalents, beginning of period 2,841,353 2,319,369
Cash and cash equivalents, end of period $ 3,267,517 $ 775,543
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP CASH PLUS LIMITED PARTNERSHIP
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
Cash Plus Limited Partnership (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 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 financial statements reflect all adjustments
(consisting of only normal recurring accruals) necessary to present
fairly the Partnership's financial position as of June 30, 1996, its
results of operations for the three and six months ended June 30, 1996
and 1995 and its cash flows for the six months ended June 30, 1996 and
1995. Certain prior year balances have been reclassified to conform
with current year financial statement presentation.
The results of operations for the three and six months ended June 30,
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) Accrued Expenses and Other Liabilities
Accrued expenses and other liabilities consist of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
<S> <C> <C>
Accrued real estate taxes $ 892,751 $685,370
Accrued insurance 133,395 114,397
Prepaid rent 84,419 84,065
Tenant security deposits 48,707 48,707
Other accrued expenses 28,962 31,270
$1,188,234 $963,809
(3) Changes in Partners' Equity
</TABLE>
A summary of changes in Partners' equity (deficit) for the
six months ended June 30, 1996 is as follows:
<PAGE>
<TABLE>
<CAPTION>
Corporate Total
Limited General Partners'
Unitholders Partner Partners Equity
<S> <C> <C> <C> <C>
Balance at December 31, 1995 $38,032,296 $1,180 $(146,193) $37,887,283
Net income 742,545 19 15,154 757,718
Distributions (1,092,759) (27) (18,055) (1,110,841)
Balance at June 30, 1996 $37,682,082 $1,172 $(149,094) $37,534,160
</TABLE>
(4) Mortgage Backed Securities and Other Investment
The MBS held by the Partnership are issued by the Federal Home
Loan Mortgage Corporation and the Government National Mortgage
Association. Additional information on the MBS held is as
follows:
June 30, December 31,
1996 1995
Face Value $4,681,134 $5,135,017
Amortized Cost $4,696,820 $5,151,696
Estimated Market Value $4,815,000 $5,435,000
Coupon rates of the MBS range from 8.5% to 9.0% per annum and
mature in the years 2008 through 2017. The Partnership's MBS
portfolio had gross unrealized gains of approximately $118,000
and $284,000 at June 30, 1996 and December 31, 1995,
respectively and no unrealized losses. The Partnership does not
expect to realize these gains as it currently has the intention
and ability to hold the MBS until maturity.
At June 30, 1996, the Partnership held an investment in
commercial paper maturing within one year. Cost approximates
the market value.
(5) Related Party Transactions
Commencing with the date of acquisition of the Partnership's
properties, the Partnership entered into agreements under which
property management fees are paid to an affiliate of the General
Partners for services as management agent. Such agreements
provide for management fees payable monthly at a rate of 5% of
the gross receipts from the properties under management. The
Partnership also reimburses affiliates of the General Partners
for certain expenses incurred in connection with the operation
of the Partnership and its properties including accounting,
computer, insurance, travel, legal and payroll; and with the
preparation and mailing of reports and other communications to
the Unitholders.
Amounts accrued or paid to the General Partners or their
affiliates are as follows:
<PAGE>
<TABLE>
<CAPTION>
For the Three Months For the Six Months
Ended June 30, Ended June 30,
1996 1995 1996 1995
Property management
<S> <C> <C> <C> <C>
fees $ 81,585 $ 72,281 $144,084 $134,372
Expense
reimbursements 65,697 74,275 139,477 118,004
Charged to
operations $147,282 $146,556 $283,561 $252,376
</TABLE>
KRUPP CASH PLUS LIMITED PARTNERSHIP
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 operations of its real estate investments.
Liquidity is also generated by the MBS portfolio. The Partnership holds
MBS that are guaranteed by Government National Mortgage Association
("GNMA") and Federal Home Loan Mortgage Corporation ("FHLMC"). The
principal risks in respect of MBS are the credit worthiness of GNMA and
FHLMC and the risk that the current value of any MBS may decline as a
result of changes in market interest rates. The General Partners believe
that the risk is minimal due to the fact that the Partnership has the
ability to hold these securities to maturity. The Partnership's sources of
future liquidity will be used for payment of expenses related to real
estate operations, capital expenditures including tenant build-outs to
secure quality tenants, and other administrative expenses. Cash Flow, if
any, as calculated under Section 17 of the Partnership Agreement, will then
be available for distribution to the Partners.
The Partnership's retail centers continue to have a relatively consistent
level of operating results. However, to attain these results, management
has found it necessary to fund a significant portion of tenant build-outs
to secure quality tenants in the Partnership's retail centers.
The Partnership has ongoing improvements which are necessary at High Point
National Furniture Mart to reconfigure space for new tenants and comply
with present building code standards. Renovations to an additional floor,
which began in the first quarter of 1996, were completed during the second
quarter, while renovations to the elevator system began in the second
quarter and are anticipated to be completed in the third quarter. The
refurbished show-room spaces have enabled the Partnership to command higher
rents and achieve 100% occupancy.
<PAGE>
Management is currently evaluating leasing issues at Tradewinds. One
17,770 square foot tenant's lease will be terminated as of December 31,
1996. Management is working on finding a new tenant for this space and is
negotiating with one of the anchor tenants regarding possible expansion in
1996. Improvements to the facade at Tradewinds were completed during the
second quarter of 1996 in order to remain competitive against newer
centers.
In order to continue to fund the capital improvements noted above, the
General Partners, on an ongoing basis, assess the current and future
liquidity needs in determining the levels of working capital the
Partnership should maintain. Adjustments to distributions are made when
appropriate to reflect such assessments. The General Partners have
determined that retaining the current annualized distribution rate of
approximately $0.55 per Unit will allow the Partnership to maintain
adequate reserves to fund the necessary capital improvements.
Distributable Cash Flow and Net Cash Proceeds from Capital Transactions
Shown below is the calculation of Distributable Cash Flow and Net Cash
Proceeds from Capital Transactions as defined by Section 17 of the
Partnership Agreement, and the source of cash distributions for the six
months ended June 30, 1996 and from the Partnership's inception through
June 30, 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, Distributable Cash Flow and Net Cash Proceeds from
Capital Transactions should not be considered by the reader as a substitute
to net income, as an indicator of the Partnership's operating performance
or to cash flows as a measure of liquidity.
<PAGE>
<TABLE>
<CAPTION>
(In $1,000's except per Unit amounts)
For the Six Months Inception to
Ended June 30, June 30,
1996 1996
Distributable Cash Flow:
<S> <C> <C>
Net income for tax purposes $ 943 $ 22,883
Items not requiring or (not providing)
the use of operating funds:
Tax basis depreciation and amortization 840 17,348
Interest income on note receivable - (371)
Gain on sale of assets - (1,686)
Additions to fixed assets (421) (8,321)
Cash from vacancy guarantee on Luria's Plaza - 873
Fixed asset additions funded from cash
reserves - 865
Operating reserve for fixed asset additions - (1,070)
Total Distributable Cash Flow ("DCF") $1,362 $ 30,521
Unitholders' Share of DCF $1,335 $ 29,911
Unitholders' Share of DCF per Unit $ .33 $ 7.47 (d)
General Partners' Share of DCF $ 27 $ 610
Net Proceeds from Capital Transactions:
Principal collections on MBS, net $ 455 $ 14,908
Proceeds from sale of MBS - 19,018
Net proceeds from sale of property
including interest on mortgage
note receivable - 1,208
Mortgage note - 7,150
Reinvestment of MBS principal
collections - (16,141)
Total Net Proceeds from Capital
Transactions $ 455 $ 26,143
Distributions:
Unitholders $1,093 (a) $ 54,890 (b)(d)
Unitholders' Average per Unit $ .27 (a) $ 13.72 (b)(c)(d)
General Partners $ 27 (a) $ 609 (b)
Total Distributions $1,120 (a) $ 55,499 (b)
</TABLE>
(a) Represents distributions paid in 1996, except the February, 1996
distribution, which relates to 1995 cash flows, and includes an
estimate of the distribution to be paid in August, 1996.
(b) Includes an estimate of the distribution to be paid in August, 1996.
(c) Includes a $7,150,000 note which was distributed from the
Partnership to the Evergreen Plaza Note-Holding Trust whose
beneficiaries were the Partnership's Unitholders on record on May
31, 1990.
(d) Unitholders' average per Unit return of capital as of August, 1996
is $6.25 [$13.72-$7.47].
Operations
Distributable Cash Flow decreased for the six months ended June 30, 1996,
as compared to the six months ended June 30, 1995, due to an increase in
capital <PAGE>
improvements at the Partnership's properties and a decrease in net income
due to an increase in total expenses. For the three and six months ended
June 30, 1996, as compared to 1995, the Partnership experienced a slight
increase in rental revenue as a result of continued high occupancy rates
and higher rents at High Point due to refurbished show-room spaces and
increased occupancy at Tradewinds, due to a new tenant lease in late 1995.
This increase in rental revenue was partially offset by a decline in
occupancy at Luria's Plaza due to the unanticipated non-renewal of a 3,000
square foot tenant's lease in April 1996.
MBS interest income decreased during the first and second quarters of 1996,
as compared to the same period in 1995, due to large prepayments and
repayments of principal.
Operating expenses for the three and six months ended June 30, 1996, as
compared to 1995, increased due to higher insurance expense resulting from
prior years' insurance refunds received in 1995, in addition to a rise in
reimbursable expenses incurred in connection with the operation of the
Partnership and its properties, including computer, accounting, travel,
insurance, legal and payroll costs. Operating and maintenance expenses
increased due to adverse weather conditions at the Partnership's properties
increasing utility consumption, snow removal and exterior repair
expenditures. General and administrative expenses decreased in connection
with the preparation and mailing of reports and other investor
communications. Depreciation expense increased in conjunction with fixed
asset expenditures.
General
In accordance with Financial Accounting Standard No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of", which is effective for fiscal years beginning after December
15, 1995, the Partnership has implemented policies and practices for
assessing impairment of its real estate assets.
The investments in properties are carried at cost less accumulated
depreciation unless the General Partners believe there is a significant
impairment in value, in which case a provision to write down investments in
properties to fair value will be charged against income. At this time, the
General Partners do not believe that any assets of the Partnership are
significantly impaired.
<PAGE>
KRUPP CASH PLUS LIMITED PARTNERSHIP
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 Cash Plus Limited Partnership
(Registrant)
By: /s/Robert A. Barrows
Robert A. Barrows
Treasurer and Chief Accounting Officer of The Krupp
Corporation, a General Partner.
Date: July , 1996
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Cash Plus I
financial statements from the six months ended June 30, 1996 and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 3,759,773
<SECURITIES> 4,696,820
<RECEIVABLES> 482,401
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 288,275
<PP&E> 45,802,013
<DEPRECIATION> 16,304,018
<TOTAL-ASSETS> 38,725,264
<CURRENT-LIABILITIES> 1,191,104
<BONDS> 0
0
0
<COMMON> 37,534,160<F1>
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 38,725,264
<SALES> 3,320,355
<TOTAL-REVENUES> 3,320,355
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,562,637<F2>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 757,718
<INCOME-TAX> 0
<INCOME-CONTINUING> 757,718
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 757,718
<EPS-PRIMARY> 0<F3>
<EPS-DILUTED> 0<F3>
<FN>
<F1>Represents total equity of general partners ($149,094) and limited partners
$37,683,254.
<F2>Includes operating expenses of $968,280, real estate taxes of $588,607 and
depreciation expense of $1,005,750.
<F3>Net income allocated $15,154 to general partners, $742,564 to limited partners,
for the six months ended June 30, 1996. Average net income is $.19 per unit,
4,000,000 units outstanding.
</FN>
</TABLE>
