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, 1994
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 0-15815
Krupp Insured Plus Limited Partnership
Massachusetts 04-2915281
(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 INSURED PLUS LIMITED PARTNERSHIP
BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
March 31, December 31,
1994 1993
<S> <C> <C>
Participating Insured Mortgages ("PIMs") $ 60,204,914 $ 60,322,532
Mortgage Backed Securities and Insured
Mortgages ("MBS") 32,319,679 34,652,217
Total mortgage investments 92,524,593 94,974,749
Cash and cash equivalents 10,384,673 8,775,797
Interest receivable and other assets 765,256 697,394
Prepaid acquisition fees and expenses, net of
accumulated amortization of $3,084,670 and
$2,893,353, respectively 3,035,838 3,227,155
Prepaid participation servicing fees, net of
accumulated amortization of $1,556,932 and
$1,508,624, respectively 843,067 891,375
Total assets $107,553,427 $108,566,470
LIABILITIES AND PARTNERS' EQUITY
Liabilities $ 4,167 $ 5,376
Partners' equity (Note 2) 107,549,260 108,561,094
Total liabilities and Partners' equity $107,553,427 $108,566,470
</TABLE>
The accompanying notes are an integral
part of the financial statements.
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<PAGE>
KRUPP INSURED PLUS LIMITED PARTNERSHIP
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
For the Three Months
Ended March 31,
1994 1993
Revenues:
<S> <C> <C>
Interest income - PIMs $1,218,843 $1,143,787
Interest income - MBS 691,601 809,698
Other interest income 77,167 92,188
Total revenues 1,987,611 2,045,673
Expenses:
Asset management fee 173,153 192,382
Expense reimbursements to affiliates 61,885 59,047
Amortization of prepaid fees and expenses 239,625 231,380
Other 26,061 40,034
Total expenses 500,724 522,843
Net income $1,486,887 $1,522,830
Allocation of net income (Note 2):
Average net income per Unit
(7,499,999 Units outstanding) $ .19 $ .20
Corporate Limited Partner $ 19 $ 20
General Partners $ 44,607 $ 45,685
</TABLE>
The accompanying notes are an integral
part of the financial statements.
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<PAGE>
KRUPP INSURED PLUS LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Three Months
Ended March 31,
1994 1993
Operating activities:
<S> <C> <C>
Net income $ 1,486,887 $ 1,522,830
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization of prepaid fees and expenses 239,625 231,380
Premium amortization Treasury Note - 55,441
Premium amortization MBS 9,584 6,902
Changes in assets and liabilities:
Increase in interest receivable and
other assets (67,862) (174,421)
Decrease in liabilities (1,209) (8,074)
Net cash provided by operating activities 1,667,025 1,634,058
Investing activities:
Decrease in other investments - 6,000,000
Principal collections on MBS 2,322,954 2,423,726
Principal collections on PIMs 117,618 107,877
Proceeds from insurance claims on PIMs - 475,727
Investment in MBS - (3,297,903)
Net cash provided by investing activities 2,440,572 5,709,427
Financing activities:
Quarterly distributions (2,498,721) (2,585,067)
Special distributions - (450,006)
Net cash used for financing activities (2,498,721) (3,035,073)
Net increase in cash and cash equivalents 1,608,876 4,308,412
Cash and cash equivalents, beginning of period 8,775,797 5,395,292
Cash and cash equivalents, end of period $10,384,673 $ 9,703,704
</TABLE>
The accompanying notes are an integral
part of the financial statements.
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<PAGE>
KRUPP INSURED 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.
However, in the opinion of the General Partners, The Krupp
Corporation and The Krupp Company Limited Partnership-IV
(collectively the "General Partners"), of Krupp Insured 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 Form 10-K for the year ended
December 31, 1993 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, 1994 and its results of operations and
cash flows for the three months ended March 31, 1994 and 1993.
The results of operations for the three months ended March 31,
1994 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.
Certain prior period balances have been reclassified to be
consistent with current year financial statement presentation.
2. Changes in Partners' Equity
A summary of changes in Partners' Equity for the three months
ended March 31, 1994 is as follows:
<TABLE>
<CAPTION>
Corporate Total
Limited General Partners'
Unitholders Partner Partners Equity
<S> <C> <C> <C> <C>
Balance at December 31, 1993 $108,680,479 $1,528 $(120,913) $108,561,094
Net income 1,442,261 19 44,607 1,486,887
Quarterly distributions (2,448,158) (33) (50,530) (2,498,721)
Balance at March 31, 1994 $107,674,582 $1,514 $(126,836) $107,549,260
</TABLE>
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<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
The most significant demand on the Partnership's liquidity is
regular quarterly distributions paid to investors averaging
approximately $10 million per year, and $2.5 million per quarter.
Funds used for investor distributions come from interest received
on the PIMs, MBS, cash and cash equivalents, and the principal
collections received on the PIMs and MBS. The Partnership
received cash inflows related to these items totalling
approximately $4.4 million during the first quarter of 1994. To
the extent the Partnership funds a portion of the distribution
from principal collections, the capital resources of the
Partnership will decrease. As a result of this decrease, the
total cash inflows to the Partnership will also decrease which
may result in periodic adjustments to the quarterly distributions
paid to investors.
At March 31, 1994, the Partnership has significant liquidity
consisting of approximately $10.4 million in cash and cash
equivalents, and the cash inflows provided by PIMs, MBS and cash
equivalents.
Assessment of Credit Risk
The Partnership's investments in mortgages are guaranteed or
insured by the Federal National Mortgage Association ("FNMA"),
the Federal Home Loan Mortgage Corporation ("FHLMC") and HUD and
therefore the certainty of their cash flows and the risk of
material loss of the amounts invested depends on the
creditworthiness of these entities.
FNMA is a federally chartered private corporation that
guarantees obligations originated under its programs. FHLMC is a
federally chartered corporation that guarantees obligations
originated under its programs and is wholly-owned by the twelve
Federal Home Loan Banks. These obligations are not guaranteed by
the U.S. Government or the Federal Home Loan Bank Board. The
Government National Mortgage Association ("GNMA") guarantees the
full and timely payment of principal and basic interest on the
securities it issues, which represents interest in pooled
mortgages insured by HUD. Obligations insured by HUD, an agency
of the U.S. Government, are backed by the full faith and credit
of the U.S. Government.
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<PAGE>
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 three months ended March 31, 1994 and the
period from inception to March 31, 1994. The Partnership
calculated Distributable Cash Flow and Net Cash Proceeds from
Capital Transactions using information prepared according to
generally accepted accounting principles ("GAAP"). (Amounts in
thousands, except per Unit amounts).
<TABLE>
<CAPTION>
Three Months Ended Inception through
March 31, 1994 March 31, 1994
Distributable Cash Flow:
<S> <C> <C>
Net Income $ 1,487 $ 56,311
Items not requiring or (not providing)
the use of operating funds:
Amortization of prepaid expenses
and organization costs 240 4,692
Amortization of MBS premiums 9 278
Acquisition expenses paid from
offering proceeds charged to operations - 1,098
Gain on sale of MBS - (114)
Total Distributable Cash Flow ("DCF") $ 1,736 $ 62,265
Limited Partners Share of DCF $ 1,684 $ 60,397
Limited Partners Share of DCF per Unit $ .22 $ 8.05
General Partners Share of DCF $ 52 $ 1,868
Net Proceeds from Capital Transactions:
Insurance claim proceeds and
principal collections on PIMs $ 118 $ 45,516
Principal collections on MBS 2,323 34,307
Insurance claim proceeds and
principal collections on
PIMs and MBS reinvested in PIMs and MBS - (40,775)
Gain on sale of MBS - 114
Total Net Proceeds from Capital
Transactions $ 2,441 $ 39,162
Cash available for distribution
(DCF plus Net Proceeds from
Capital Transactions) $ 4,177 $101,427
Distributions:
Limited Partners $ 2,395 (a) $ 90,926 (a)
Limited Partners Average per Unit $ .32 (a) $ 12.12 (a)(b)
General Partners $ 49 (a) 1,868 (a)
Total Distributions $ 2,444 $ 92,794
</TABLE>
(a) This includes an estimate of the May 1994 distribution.
(b) Limited Partners average per Unit return of capital as of May
1994 is $4.07 {$12.12-$8.05}. Return of capital represents
that portion of distributions which is not funded from DCF
such as proceeds from the sale of assets and
substantially all of the principal collections
received from MBS and PIMs.
<PAGE>
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<PAGE>
Operations
The following discussion relates to the operations of the
Partnership during the three months ended March 31, 1994 and
1993.
<TABLE>
<CAPTION>
(Amounts in thousands)
1994 1993
<S> <C> <C>
Interest income on PIMs $ 1,219 $1,144
Interest income on MBS 701 817
Other interest income 77 92
Partnership expenses (261) (291)
Distributable Cash Flow $ 1,736 $1,762
</TABLE>
Distributable Cash Flow ("DCF") for the first quarter of
1994 decreased slightly when compared to the first quarter of
1993. This happened since the Partnership had lower average
asset balances in the first quarter of 1994. The Partnership
will continue to see a decrease in DCF as the Investors receive
distributions that represent a return of capital thereby reducing
the overall asset balances held by the Partnership.
-8-
<PAGE>
KRUPP INSURED 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
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<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 Insured Plus Limited Partnership
(Registrant)
BY: /s/Marianne Pritchard
Marianne Pritchard
Treasurer and Chief Accounting
Officer of The Krupp Corporation,
a General Partner of the
Registrant.
DATE: April 23, 1994
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