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 March 31,
1998
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
The total number of pages in this document is
12.
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
March 31, December 31,
1998 1997
Real estate assets:
<S> <C> <C>
Retail centers (Note 3) $ - $26,544,659
Mortgage-backed securities ("MBS"),
net of accumulated amortization (Note 7) 3,624,459 3,797,789
Total real estate assets 3,624,459 30,342,448
Cash and cash equivalents (Note 2) 30,044,061 1,021,686
Other assets 426,843 566,679
Total assets $34,095,363 $31,930,813
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Accounts payable $ 1,031 $ 335
Due to affiliates (Note 8) 35,025 -
Accrued expenses and other
liabilities (Note 5) 116,529 857,336
Total liabilities 152,585 857,671
Partners' equity (deficit) (Note 6):
Limited Partners (4,000,000 Units
outstanding) 34,049,539 31,186,226
Corporate Limited Partner (100 Units
outstanding) 1,080 1,009
General Partners (285,655) (283,614)
Unrealized holding gains on MBS (Note 7) 177,814 169,521
Total Partners' equity 33,942,778 31,073,142
Total liabilities and Partners'
equity $34,095,363 $31,930,813
</TABLE>
The accompanying notes are an integral
part of the financial statements.
KRUPP CASH PLUS LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months
Ended March 31,
1998 1997
Revenue:
<S> <C> <C>
Rental $ 579,497 $1,452,013
Interest income - MBS (Note 7) 74,045 91,910
Interest income - other 281,238 60,406
Total revenue 934,780 1,604,329
Expenses:
Operating (Note 8) 215,218 280,305
Maintenance 36,506 74,296
General and administrative (Note 8) 79,915 98,355
Real estate taxes 85,998 304,458
Management fees (Note 8) 24,736 71,645
Depreciation - 498,150
Total expenses 442,373 1,327,209
Income before gain on sale of properties 492,407 277,120
Gain on sale of properties (Note 3) 2,930,843 -
Net income $3,423,250 $ 277,120
Allocation of net income (Note 6):
Unitholders (4,000,000 Units outstanding):
Income before gain on sale of properties$ 482,547 $ 271,571
Gain on sale of properties 2,930,770 -
Net income $3,413,317 $ 271,571
Per Unit of Depositary Receipt:
Income before gain on sale of properties$ .12 $ .07
Gain on sale of properties .73 -
Net income $ .85 $ .07
Corporate Limited Partner
(100 Units outstanding):
Income before gain on sale of properties$ 12 $ 7
Gain on sale of properties 73 -
Net income $ 85 $ 7
General Partners:
Income before gain on sale of properties$ 9,848 $ 5,542
Gain on sale of properties - -
Net income $ 9,848 $ 5,542
The accompanying notes are an integral
part of the financial statements.<PAGE>
KRUPP CASH PLUS LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
For the Three Months
Ended March 31,
1998 1997
Operating activities:
Net income $ 3,423,250$ 277,120
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation - 498,150
Amortization of MBS premium, net 815 (150)
Gain on sale of properties (2,930,843) -
Changes in assets and liabilities:
Decrease (increase) in other assets 57,564 (3,249)
Increase in accounts payable 696 12,145
Increase (decrease) in due to affiliates 35,025 (26,735)
Increase (decrease) in accrued expenses
and other liabilities (740,807) 536,659
Net cash provided by (used in)
operating activities (154,300) 1,293,940
Investing activities:
Additions to fixed assets (627,911) -
Decrease in accounts payable
for fixed asset additions - (41,963)
Principal collections on MBS 180,808 54,814
Proceeds from sale of property, net 30,185,685 -
Net cash provided by investing activities 29,738,582 12,851
Financing activity:
Distributions (561,907) (557,791)
Net increase in cash and cash equivalents 29,022,375 749,000
Cash and cash equivalents, beginning of period1,021,686 4,043,066
Cash and cash equivalents, end of period $30,044,061$4,792,066
Supplemental schedule of noncash investing and financing
activities:
Unrealized holding gains on MBS (Note 7) $ 8,293$ -
</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 Annual Report on
Form 10-K for the year ended December 31, 1997
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 March 31, 1998, and
its results of operations and cash flows for
the three months ended March 31, 1998 and
1997.
The results of operations for the three months
ended March 31, 1998 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)Cash and Cash Equivalents
Cash and cash equivalent consisted of the
following:
March 31, December 31, 1998 1997
Cash and money market accounts
$1,356,483$1,021,686
Commercial paper 28,687,578 -
$30,044,061$1,021,686
(3)Sale of Properties
On January 30, 1998 the Partnership sold its
remaining properties to unaffiliated third
parties. The Partnership's properties were
included in a package with eleven other
properties owned by affiliates of the General
Partners. The total selling price of the
fourteen properties was $138,000,000, of which
the Partnership received $31,247,100, less its
share of closing costs of $1,061,415. For
financial reporting purposes, the Partnership
realized a gain of $2,930,843 on the sale.
The gain was calculated as the difference
between the properties' selling prices less
net book value of the properties and closing
costs.
Continued
KRUPP CASH PLUS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS, Continued
(4)Provision for Losses on Real Estate
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", the
Partnership recorded valuation provisions for
losses on its real estate assets of $4,689,099
at December 31, 1997. These provisions
represented the difference between carrying
values and selling prices less estimated costs
to sell as a result of the sale of the
Partnership's properties on January 30, 1998
(see Note 3).
(5) Accrued Expenses and Other Liabilities
Accrued expenses and other liabilities consisted of the
following:
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
<S> <C> <C>
Accrued real estate taxes $ - $ 588,000
Deferred income and other accrued
expenses 104,640 214,043
Tenant security deposits - 55,293
Distributions payable 11,889 -
$ 116,529 $ 857,336
</TABLE>
(6) Changes in Partners' Equity
A summary of changes in Partners' equity (deficit) for the
three months ended March 31, 1998 is as follows:
<TABLE>
<CAPTION>
Unrealized
Corporate Holding
Limited General Gains on
Unitholders Partner Partner MBS Total
Balance at
<S> <C> <C> <C> <C> <C>
December 31, 1997$ 31,186,226 $ 1,009 $(283,614)$ 169,521$ 31,073,142
Income before gain on
sale of properties 482,547 12 9,848 - 492,407
Gain on sale of
properties 2,930,770 73 - - 2,930,843
Unrealized Holding
Gains on MBS - - - 8,293 8,293
Distributions (550,004) (14) (11,889) - (561,907)
Balance at
March 31, 1998 $ 34,049,539$ 1,080$(285,655)$ 177,814 $33,942,778
</TABLE>
The distributions payable to the General Partners totaled
$11,889 and were included in accrued expenses and other
liabilities at March 31, 1998.
Continued
KRUPP CASH PLUS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS, Continued
(7) Mortgage Backed Securities
The MBS held by the Partnership were issued by the Federal
Home Loan Mortgage Corporation and the Government National
Mortgage Association. The following is additional information
on the MBS held:
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
<S> <C> <C>
Face Value $3,435,180 $ 3,785,509
Amortized Cost $3,446,645 $ 3,628,268
Estimated Market Value $3,624,000 $ 3,798,000
</TABLE>
Coupon rates of the MBS ranged from 8.5% to
9.0% per annum and were due to mature in the
years 2008 through 2017.
In accordance with Financial Accounting
Standard No. 115, "Accounting for Certain
Investments in Debt and Equity Securities",
unrealized holding gains and losses for
available-for-sale securities are reported as
a component of equity until realized. At
March 31, 1998 and December 31, 1997, the
Partnership had unrealized holding gains of
$177,814 and $169,521, respectively on its MBS
investments to adjust to market value,
based on quoted market prices.
(8)Related Party Transactions
The Partnership paid property management fees
to an affiliate of the General Partners for
management services. Payment of these fees
ended in conjunction with the sale of the
Partnership's properties on January 30, 1998
(see Note 3). Pursuant to the agreements,
management fees were payable monthly at a rate
of up to 6% of the gross receipts, net of
leasing commissions, from commercial
properties under management. The Partnership
continues to reimburse affiliates of the
General Partners for certain expenses incurred
in connection with the operation of the
Partnership, including administrative
expenses.
Amounts accrued or paid to the General
Partners' affiliates were as
follows:
<TABLE>
<CAPTION>
For the Three Months
Ended March 31,
1998 1997
Property management
<S> <C> <C>
fees $ 24,736 $ 71,645
Expense
reimbursements 93,398 87,320
Charged to
operations $118,134 $158,965
</TABLE>
Continued
KRUPP CASH PLUS LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS, Continued
(8) Related Party Transactions, Continued
Due to affiliates consisted of expense
reimbursements of $35,024 at March 31, 1998.
In addition to the amounts above, costs paid
to the General Partners' affiliates associated
with the sale of the Partnership's remaining
properties were $250,667 during the three
months ended March 31, 1998.
(9) Subsequent Event
On April 29, 1998, the General Partners sold
the Partnership's MBS portfolio to
unaffiliated third parties for $3,583,068.
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
Based upon the General Partners' assessment of
the current and future market conditions, the
capital improvements necessary to remain
competitive in the properties' markets and the
Partnership's capital resources, the General
Partners determined that it was in their best
interests, and that of their respective
investors, to sell all the Partnership's
properties. On January 30, 1998, the
Partnership sold all of its properties to
unaffiliated third parties. The properties
were included in a package with eleven other
properties owned by affiliates of the General
Partners. The total selling price of the
fourteen properties was $138,000,000, of which
the Partnership received $31,247,100 for the
sale of its properties, less its share of the
closing costs of $1,061,415 (see Note 3). The
sale of the properties is considered a
Terminating Capital Transaction, as defined by
the Partnership Agreement.
The Partnership anticipates making a special
distribution of $6.80 per Unit in the second
quarter of 1998, based upon approximately 80%
of the proceeds of the sale and estimated
liquidation value of remaining Partnership
assets. Once all necessary reserves and
contingent liabilities are funded, the
remaining proceeds will be distributed. All
Partnership affairs are expected to be
completed by year-end.
The Partnership held MBS that were guaranteed
by the Government National Mortgage
Association ("GNMA") and the Federal Home Loan
Mortgage Corporation ("FHLMC"). At March 31,
1998 and December 31, 1997, the Partnership
had unrealized holding gains on its MBS of
$177,814 and $169,521, respectively to adjust
the investments to market value (see Note 7).
Subsequent to March 31, 1998, the General Partners
sold the Partnership's MBS portfolio to
unaffiliated third parties (see Note 9).
KRUPP CASH PLUS LIMITED PARTNERSHIP
Operations
The following discussion relates to the
operations of the Partnership for the three
months ended March 31, 1998 and 1997. The
sale of the Partnership's properties (High
Point National Furniture Mart, Tradewinds
Shopping Center and Luria's Plaza) on January
30, 1998, significantly impacts the
comparability of the Partnership's operations
between the two periods.
Net income for the three months ended March
31, 1998 as compared to the three months ended
March 31, 1997, net of activity of the
Partnership's sold properties, increased as
total revenue increased and total expenses
decreased. Total revenue increased due to
higher average cash and cash equivalent
balances available for investment, as a result
of the sale of the Partnership's properties on
January 30, 1998. Proceeds of approximately
$30,186,000 were received from the sale.
Total expenses for the three months ended
March 31, 1998, net of activity of the
Partnership's sold properties, decreased when
compared to the same period in 1997, due to a
decrease in general and administrative
expense. This decrease is the result of legal
costs incurred in 1997 which related to
unsolicited tender offers to purchase Units of
Depository Receipts.
<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
(a)Exhibits
Response: None
(b)Reports on Form 8-K
Date Event Reported Financial
Statements Filed
January 30, 1998 Disposition of the Pro
Forma Balance Sheet at Partnership's
remaining September 30, 1997.
properties
Pro Forma Statements of Operations for the
nine months ended September 30, 1997 and for
the year ended December 31, 1996.
<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/Wayne H. Zarozny
Wayne H. Zarozny
Treasurer and Chief
Accounting
Officer of The Krupp
Corporation, a General
Partner.
Date: May 13, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Cash Plus I
Financial Statements for the three months ended March 31, 1998 and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 30,044,061
<SECURITIES> 3,624,459
<RECEIVABLES> 197,709<F1>
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 229,134
<PP&E> 0<F2>
<DEPRECIATION> 0<F2>
<TOTAL-ASSETS> 34,095,363
<CURRENT-LIABILITIES> 152,585
<BONDS> 0
0
0
<COMMON> 33,764,964<F3>
<OTHER-SE> 177,814<F4>
<TOTAL-LIABILITY-AND-EQUITY> 34,095,363
<SALES> 0
<TOTAL-REVENUES> 934,780<F5>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 442,373<F6>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 2,930,843<F2>
<CHANGES> 0
<NET-INCOME> 3,423,250<F7>
<EPS-PRIMARY> 0<F7>
<EPS-DILUTED> 0<F7>
<FN>
<F1>Includes all receivables included in "other assets" on the Balance Sheet.
<F2>The Partnership's properties were sold on January 30, 1998 to unaffilated third
parties. The total selling price of the fourteen properties sold was
$138,000,000, of which the Partnership received $31,247,100, less closing costs
of $1,061,415. For financial reporting purposes, the Partnership realized a
gain of $2,930,843 on the sale.
<F3>Deficit of the General Partners of ($285,655) and equity of Limited Partners of
$34,050,619.
<F4>Unrealized holding gain on MBS.
<F5>Includes all revenue of the Partnership.
<F6>Includes all expenses of the Partnership.
<F7>Net income allocated $9,848 to the General Partners and $3,413,402 to the
Limited Partners.
</FN>
</TABLE>
