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 June 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 0-15816
Krupp Cash Plus-II Limited Partnership
Massachusetts 04-2915326
(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 CASH PLUS-II LIMITED PARTNERSHIP
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
<S> <C> <S> <C> <C>
Real estate assets:
Multi-family apartment complex, less
accumulated depreciation of $3,900,732
and $3,670,683, respectively $ 6,287,711 $ 6,424,540
Retail centers, less accumulated depreciation
of $11,692,396 and $10,931,523, respectively 38,111,941 38,858,760
Investment in joint venture (Note 2) 20,937,256 21,339,973
Mortgage-backed securities ("MBS") (Note 3) 9,202,834 9,815,123
Total real estate assets 74,539,742 76,438,396
Cash and cash equivalents 4,740,041 7,072,127
Other investments (Note 3) 3,222,357 -
Other assets 413,295 766,734
Total assets $82,915,435 $84,277,257
LIABILITIES AND PARTNERS' EQUITY
Accounts payable $ 34,802 $ 221,510
Accrued expenses and other liabilities 634,759 593,123
Total liabilities 669,561 814,633
Commitments and contingencies (Note 2)
Partners' equity (Note 4) 82,245,874 83,462,624
Total liabilities and partners' equity $82,915,435 $84,277,257
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP CASH PLUS-II LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30, June 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Revenue:
Rental $1,606,838 $1,481,044 $3,246,166 $3,096,592
Partnership's share of joint venture
net income (Note 2) 115,003 103,397 304,783 280,694
Interest income - MBS 207,446 245,152 422,660 513,750
Interest income - other 116,010 65,428 223,055 114,705
Total revenue 2,045,297 1,895,021 4,196,664 4,005,741
Expenses:
Operating (including reimbursements
to affiliates of $31,240, $55,718,
$49,475, and $111,435, respectively) 198,808 261,725 405,098 509,133
Maintenance 124,493 124,796 196,882 256,406
General and administrative (including
reimbursements to affiliates of
$51,579, $90,097, $103,158 and
$176,837, respectively) 88,998 130,581 160,846 243,131
Real estate taxes 209,635 (39,908) 428,434 201,928
Management fees paid to an
affiliate 92,281 87,679 183,424 176,499
Depreciation 496,069 468,549 990,922 927,445
Total expenses 1,210,284 1,033,422 2,365,606 2,314,542
Net income $ 835,013 $ 861,599 $1,831,058 $1,691,199
Allocation of net income (Note 4):
Net income per Unit of Depositary
Receipt (7,499,818 Units
Outstanding) $ .11 $ .11 $ .24 $ .22
Corporate Limited Partner $ 11 $ 11 $ 24 $ 22
General Partners $ 16,700 $ 17,232 $ 36,621 $ 33,824
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP CASH PLUS-II LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Six Months
Ended June 30,
1995 1994
<S> <C> <C>
Operating activities:
Net income $ 1,831,058 $ 1,691,199
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 990,922 927,445
Partnership's share of joint venture
net income (304,783) (280,694)
Distributions received from joint
venture 707,500 399,000
Amortization of MBS (discount)/
premium, net (1,539) (545)
Decrease in other assets 353,439 221,008
Decrease in accounts payable (186,708) (127,875)
Increase in accrued expenses and other
liabilities 41,636 84,289
Net cash provided by operating
activities 3,431,525 2,913,827
Investing activities:
Additions to fixed assets (107,274) (106,653)
Principal collections on MBS 613,828 1,965,863
Increase in other investments (3,222,357) -
Net cash provided by (used in)
investing activities (2,715,803) 1,859,210
Financing activity:
Distributions (3,047,808) (3,053,983)
Net increase (decrease) in cash and cash
equivalents (2,332,086) 1,719,054
Cash and cash equivalents, beginning of
period 7,072,127 5,622,515
Cash and cash equivalents, end of period $ 4,740,041 $ 7,341,569
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP CASH PLUS-II 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-II 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,
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 normal recurring accruals) necessary to present
fairly the Partnership's financial position as of June 30, 1995 and its
results of operations for the three and six months ended June 30, 1995
and 1994 and cash flows for the six months ended June 30, 1995 and 1994.
The results of operations for the three and six months ended June 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) Investment in Joint Venture
The Partnership and an affiliate of the Partnership each have a 50%
interest in the Joint Venture. The express purpose of entering into the
Joint Venture was to acquire and operate Brookwood Village Mall and
Convenience Center ("Brookwood Village"). Brookwood Village is a
shopping center containing 474,138 net leasable square feet located in
Birmingham, Alabama.
Under the purchase and sale agreement entered into by the Partnership,
its affiliates and the previous owner, the previous owner retained an
interest related to the future development at Brookwood Village. The
seller is entitled to receive up to $5,000,000 of proceeds from the sale
of Brookwood Village and potentially additional amounts related to
expansion and development. The Joint Venture holds title to Brookwood
Village free and clear from all other material liens or encumbrances.
Continued
<PAGE>
KRUPP CASH PLUS-II LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - Continued
(2) Investment in Joint Venture - Continued
Condensed financial statements of the Joint Venture are as follows:
Brookwood Village Joint Venture
Condensed Balance Sheets
<TABLE>
<CAPTION>
ASSETS
June 30, December 31,
1995 1994
<S> <C> <S> <C> <C>
Property, at cost $ 54,947,615 $ 54,898,470
Accumulated depreciation (13,854,740) (12,854,388)
41,092,875 42,044,082
Other assets 1,480,422 1,145,125
Total assets $ 42,573,297 $ 43,189,207
LIABILITIES AND PARTNERS' EQUITY
Total liabilities $ 698,785 $ 509,261
Partners' equity
The Partnership 20,937,256 21,339,973
Joint venture partner 20,937,256 21,339,973
Total partners' equity 41,874,512 42,679,946
Total liabilities and partners' equity $ 42,573,297 $ 43,189,207
</TABLE>
Brookwood Village Joint Venture
Condensed Statements of Operations
<TABLE>
<CAPTION>
For the Three Months For the Six Months
Ended June 30, Ended June 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Revenues $1,470,629 $1,405,901 $ 3,056,497 $ 2,928,886
Property operating
expenses (731,135) (734,820) (1,446,579) (1,442,540)
Income before
depreciation 739,494 671,081 1,609,918 1,486,346
Depreciation (509,488) (464,287) (1,000,352) (924,958)
Net income $ 230,006 $ 206,794 $ 609,566 $ 561,388
Continued
<PAGE>
KRUPP CASH PLUS-II LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS - Continued
(3) MBS and Other Investments
At June 30, 1995, the Partnership's MBS Portfolio had an approximate
market value of $9,685,000 with unrealized gains of $491,000 and
unrealized losses of $9,000. The Partnership does not expect to realize
these gains or losses as it has the intention and ability to hold the
MBS until maturity.
At June 30, 1995, the Partnership held investments in commercial paper
and a banker's acceptance maturing within one year. The cost
approximates the market value.
(4) Changes in Partners' Equity (Deficit)
A summary of changes in partners' equity (deficit) for the six
months ended June 30, 1995 is as follows:
</TABLE>
<TABLE>
<CAPTION>
Corporate Total
Limited General Partners'
Unitholders Partner Partners Equity
<C> <C> <C> <C> <C> <C> <C>
Balance at
December 31, 1994 $83,767,580 $1,322 $(306,278) $83,462,624
Net income 1,794,413 24 36,621 1,831,058
Distributions (2,999,888) (40) (47,880) (3,047,808)
Balance at
June 30, 1995 $82,562,105 $1,306 $(317,537) $82,245,874
<PAGE>
KRUPP CASH PLUS-II LIMITED PARTNERSHIP
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Liquidity and Capital Resources
The Partnership's liquidity is derived from the operations of the
Partnership's properties (Encino Oaks, Alderwood, Canyon Place, Coral Plaza
and Cumberland Glen), distributions from the Partnership's interest in
Brookwood Village Joint Venture, earnings and collections on MBS, and interest
earned on its short-term investments. The Partnership's liquidity is utilized
to pay operating costs and to fund distributions to the partners.
Management has found it necessary in recent years to pay a large share of
tenant buildouts to attract quality tenants to our retail centers. This
policy has proven to be successful in attracting tenants and maintaining high
occupancy at properties where it has been undertaken and is expected to
continue through 1995. In order to remain competitive in their respective
markets, the Partnership's properties are anticipated to spend $834,000 for
fixed assets in 1995 most of which are tenant buildouts at retail centers.
The Joint Venture is expected to spend $628,000 for capital improvements.
Principal collections on MBS have slowed significantly in the first half of
1995 because of increased refinancing activity in 1994 which led to
prepayments of the mortgages underlying the MBS. Management will continue to
monitor liquidity levels to assure that working capital levels are being
maintained.
Continued
<PAGE>
KRUPP CASH PLUS-II LIMITED PARTNERSHIP
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 for the six months ended June 30, 1995 and the period from inception
to June 30, 1995.
</TABLE>
<TABLE>
<CAPTION>
(In $1,000 except per Unit amounts)
For the six months Inception to
Ended June 30, June 30,
1995 1995
<S> <C> <C>
Distributable Cash Flow:
Net income for tax purposes $2,155 $42,867
Items providing/not requiring or (not
providing) the use of operating funds:
Tax basis depreciation and amortization 841 13,945
Acquisition expenses paid from offering
proceeds charged to operations - 248
Partnership's share of joint venture
taxable net income (519) (5,363)
Distributions from joint venture 708 7,815
Additions to fixed assets (107) (2,220)
Amounts released from reserves
for capital improvements - 1,020
Total Distributable Cash Flow ("DCF") $3,078 $58,312
Limited Partners' Share of DCF $3,016 $57,145
Limited Partners' Share of DCF per Unit $ .40 $ 7.62
General Partners' Share of DCF $ 62 $ 1,167
Net Proceeds from Capital Transactions:
Principal collections on MBS $ 612 $35,931
Reinvestment of MBS principal collections - (3,687)
Total Net Proceeds from Capital
Transactions $ 612 $32,244
Distributions:
Limited Partners $3,000(a) $90,818(b)
Limited Partners' Average per Unit $ .40(a) $12.11(b)(c)
General Partners $ 62(a) $ 1,167(b)
Total Distributions $3,062(a) $91,985(b)
</TABLE>
(a) Represents distributions paid in 1995, except the February, 1995
distribution, which relates to 1994 cash flows and includes an estimate
of the distribution to be paid in August, 1995.
(b) Includes estimate of the distribution to be paid in August, 1995
(c) Limited Partners average per Unit return of capital as of August, 1995
is $4.49 [$12.11 - $7.62].
<PAGE>
Continued
KRUPP CASH PLUS-II LIMITED PARTNERSHIP
Operations
Partnership
Rental revenues for the three and six months ended June 30, 1995 as
compared to the same periods in 1994, have increased due mainly to
increases in occupancy at Canyon Place and to increases in rental rates at
Cumberland Glen. Canyon Place experienced a 9% increase for the three
months and an 8% increase for the six months ended June 30, 1995 as
compared to the same periods in 1994. The increase in occupancy at Canyon
is due to the expansion of tenants and to the opening of the 4,391 square
foot Payless Shoes late in 1994. The increase in rental rates at Cumberland
Glen is due mainly to the strong economic environment in the Atlanta,
Georgia area.
MBS interest income decreased in the first half of 1995 as compared to the
same period in 1994 due to the large prepayments of principal which
occurred during the first half of 1994. Interest income on short-term
investments increased during these same periods due to higher average cash
balances and higher interest rates.
Total expenses of the Partnership for the three and six months ended June
30, 1995 as compared to the same periods in 1994 have increased $177,000
and $51,000 respectively due primarily to real estate taxes. The increase
in real estate taxes is due primarily to a refund of approximately $270,000
recorded in the second quarter of 1994 for prior years' real estate taxes
at Coral Plaza. The decrease in operating expenses is due to management's
efforts to reduce reimbursable operating and general and administrative
expenses. Certain of these costs savings are anticipated to continue
throughout 1995. Maintenance expenses have decreased in 1995 as a result
of increased preventive maintenance at Encino Oaks in the first quarter of
1994.
Joint Venture
Brookwood's revenues for the three and six months ended June 30, 1995 as
compared to the same periods in 1994 have increased due to an increase in
reimbursable tenant billings. Total operating expenses have remained
relatively stable in comparing the first and second quarters of 1994 and
1995.
<PAGE>
KRUPP CASH PLUS-II LIMITED PARTNERSHIP
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Response: None
Item 2. Change 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-II Limited Partnership
(Registrant)
bY: /s/Marianne Pritchard
Marianne Pritchard
Treasurer and Chief
Accounting Officer, The
Krupp Corporation, a
General Partner
DATE: August 4, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule is for Cash Plus 2 contains summary financial information
extracted from the financial statements for the quarter ended June 30,
1995 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 7,962,398<F1>
<SECURITIES> 9,202,834
<RECEIVABLES> 305,043
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 108,252
<PP&E> 80,930,036<F2>
<DEPRECIATION> (15,593,128)
<TOTAL-ASSETS> 82,915,435
<CURRENT-LIABILITIES> 669,561
<BONDS> 0
<COMMON> 82,245,874<F3>
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 82,915,435
<SALES> 4,196,664<F4>
<TOTAL-REVENUES> 4,196,664
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,365,606<F5>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,831,058
<EPS-PRIMARY> 0<F6>
<EPS-DILUTED> 0<F6>
<FN>
<F1>Includes cash in bank accounts of $4,740,041 and short term investments of
$3,222,357.
<F2>Includes multi-family complex of $10,188,443, retail centers of $49,804,337 and
investment in J.V. of $20,937,256.
<F3>Equity of General Partners $(317,537), Limited Partners of $82,563,411.
<F4>Includes all revenue of the Partnership.
<F5>Includes all expenses of the Partnership
<F6>Net income allocated $36,621 to the General Partners and $1,794,437 to the
Limited Partners. Average net income is $.24 on 7,499,818 units outstanding.
</FN>
</TABLE>
