UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1996
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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 33-15597
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DIVERSIFIED HISTORIC INVESTORS V
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(Exact name of registrant as specified in its charter)
Pennsylvania 23-2479468
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
Suite 500, 1521 Locust Street, Philadelphia, PA 19102
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (215) 735-5001
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N/A
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(Former name, former address and former fiscal year, if changed since last
report)
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.
Consolidated Balance Sheets - March 31, 1996 (unaudited) and December
31, 1995
Consolidated Statements of Operations - Three Months Ended March 31,
1996 and 1995 (unaudited)
Consolidated Statements of Cash Flows - Three Months Ended March 31,
1996 and 1995 (unaudited)
Notes to Consolidated Financial Statements (unaudited)
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
(1) Liquidity
As of March 31, 1996, Registrant had cash of $17,091. Such
funds are expected to be used to pay liabilities and general and administrative
expenses of Registrant, and to fund cash deficits of the properties. Cash
generated from operations is used primarily to fund operating expenses and debt
service. If cash flow proves to be insufficient, the Registrant will attempt to
negotiate loan modifications with the various lenders in order to remain current
on all obligations. The Registrant is not aware of any additional sources of
liquidity.
As of March 31, 1996, Registrant had restricted cash of
$259,764 consisting primarily of funds held as security deposits, replacement
reserves and escrows for taxes and insurance. As a consequence of the
restrictions as to use, Registrant does not deem these funds to be a source of
liquidity.
(2) Capital Resources
Due to the relatively recent rehabilitations of the properties,
any capital expenditures needed are generally replacement items and are funded
out of cash from operations or replacement reserves, if any. However, as part of
the determination of the best ultimate use for the commercial space at St.
Mary's Market, the Registrant will need to identify the source of financing for
the necessary fit-up costs. Such costs have not yet been identified or committed
to, and sources of financing for such costs have not been identified as of the
date hereof. Except for such costs, the Registrant is not aware of any factors
which would cause historical capital expenditure levels not to be indicative of
capital requirements in the future and accordingly, does not believe that it
will have to commit material resources to capital investment for the foreseeable
future.
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<PAGE>
The Registrant will seek to refinance the outstanding Radisson
Redick bonds which are scheduled to mature on November 1, 1996. There can be no
assurances that such financing will be available and if not, the property will
be marketed for sale.
(3) Results of Operations
During the first quarter of 1996, Registrant incurred a net
loss of $183,790 ($16.33 per limited partnership unit) compared to a net loss of
$200,235 ($17.79 per limited partnership unit) for the same period in 1995.
Rental and hotel income combined increased $38,057 from
$892,733 in the first quarter of 1995 to $930,790 in the same period in 1996.
This increase resulted from an increase of $11,000 in rental income and an
increase of $27,000 in hotel income. The increase in rental income is mainly
attributable to an increase in corporate apartment rentals at St. Mary's Market
and an increase in rental income due to an increase in the average occupancy
(90% to 92%) at the Lofts at Red Hill. The increase in hotel income is the
result of an increase in food and beverage sales due to the opening of a new
restaurant in the hotel.
Expense for rental operations decreased by $11,579 from
$182,260 in the first quarter of 1995 to $170,681 in the same period in 1996.
Expenses for rental operations decreased due to lower operating expenses
incurred at St. Mary's Market relating to corporate apartments' expense and
repairs and maintenance. Hotel operations expense increased $35,810 from
$492,049 in the first quarter of 1995 to $527,859 in the same period in 1996 due
to an increase in operating costs and wages and salaries of the new restaurant,
and an increase in management fees (which are based upon hotel revenues).
Depreciation and amortization expense increased $13,033 from
$196,190 in the first quarter of 1995 to $209,223 in the same period in 1996.
The increase is the result of the amortization of loan costs incurred in
connection with the bond refinancing at Radisson Redick.
Interest expense decreased by $14,549 from $197,748 in the
first quarter of 1995 to $183,199 in the same period in 1996. The decrease is
the result of the refinancing of the bonds at Radisson Redick which lowered the
interest rate from 7.75% to a variable rate which averaged 4.31% in the first
quarter of 1996.
Losses incurred during the quarter at the Registrant's three
properties amounted to $160,000, compared to a loss of approximately $175,000
for the same period in 1995.
In the first quarter of 1996, Registrant incurred a loss of
$142,000 at the Radisson Redick Hotel including $134,000 of depreciation and
amortization expense, compared to a loss of $136,000 in the first quarter of
1995, including $123,000 of depreciation expense. The increased loss from the
first quarter of 1995 to the first quarter of 1996 is the result of an increase
in operations expense of $37,000 and an increase in depreciation and
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<PAGE>
amortization expense of $11,000, partially offset by an increase in food and
beverage revenue of $27,000 and a decrease in interest expense of $15,000.
Operations expense increased due to an increase in management fees (which are
based upon hotel revenues) combined with an increase in wages and cost of goods
sold in connection with the opening of a new restaurant in the hotel.
Depreciation and amortization expense increased due to the amortization of loan
fees incurred in connection with the refinancing of bonds. The increase in food
and beverage revenue is due to the opening of a new restaurant in the hotel.
Interest expense decreased due to a decrease in the interest rate from an
average of 6.50% in the first quarter of 1995 to 4.31% in the same period in
1996. Registrant anticipates that operating results in the following quarters
will be similar to those experienced in the first quarter of 1996.
In the first quarter of 1996, Registrant incurred a loss of
$13,000 at the St. Mary's Market, including $61,000 of depreciation expense,
compared to a loss of $31,000 including $59,000 of depreciation expense in the
first quarter of 1995. The decreased loss from the first quarter of 1995 to the
first quarter of 1996 is the result of an increase in corporate apartment
rentals combined with a decrease in corporate apartments' expense and repairs
and maintenance. Repairs and maintenance decreased due to the recarpeting of
several units in 1994 while corporate apartments expense decreased due to a
decrease in furniture rental necessary to furnish the units. Registrant
anticipates that operating results in the following quarters will be similar to
those experienced in the first quarter of 1996.
In the first quarter of 1996, Registrant incurred a loss of
$5,000 at the Lofts at Red Hill, including $14,000 of depreciation expense,
compared to a loss of $8,000 including $14,000 of depreciation expense in the
first quarter of 1995. The decrease in the loss from the first quarter of 1995
to the same period in 1996 is the result of an increase in rental income due to
an increase in the average occupancy (90% to 92%). Registrant anticipates that
operating results in the following quarters will be comparable to those
experienced in the first quarter of 1996.
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<PAGE>
DIVERSIFIED HISTORIC INVESTORS V
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(a Pennsylvania limited partnership)
CONSOLIDATED BALANCE SHEETS
---------------------------
Assets
------
March 31, 1996 December 31, 1995
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(Unaudited)
Rental properties, at cost:
Land $ 1,133,669 $ 1,133,669
Buildings and improvements 17,027,740 17,022,586
Furniture and fixtures 1,389,503 1,351,367
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19,550,912 19,507,622
Less - Accumulated depreciation (6,689,518) (6,514,441)
---------- ----------
12,861,394 12,993,181
Cash and cash equivalents 17,091 40,854
Restricted cash 259,764 241,236
Accounts and notes receivable 165,190 87,647
Other assets (net of amortization
of $224,958 and $190,812 at
March 31, 1996 and December 31,
1995, respectively) 125,308 154,367
---------- ----------
Total $13,428,747 $13,517,285
========== ==========
Liabilities and Partners' Equity
--------------------------------
Liabilities:
Debt obligations $10,432,127 $10,436,965
Accounts payable:
Trade 396,041 327,107
Related parties 2,845 13,426
Taxes 75,942 40,324
Interest payable 10,428 6,877
Accrued liabilities 77,129 73,007
Tenant security deposits 71,602 72,156
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Total liabilities 11,066,114 10,970,862
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Partners' equity 2,362,633 2,546,423
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Total $13,428,747 $13,517,285
========== ==========
The accompanying notes are an integral part of these financial statements.
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<PAGE>
DIVERSIFIED HISTORIC INVESTORS V
--------------------------------
(a Pennsylvania limited partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
For the Three Months Ended March 31, 1996 and 1995
(Unaudited)
Three months Three months
ended ended
March 31, March 31,
1996 1995
Revenues: --------- ---------
Rental income $ 338,374 $ 327,271
Hotel income 592,416 565,462
Interest income 382 365
--------- ---------
Total revenues 931,172 893,098
--------- ---------
Costs and expenses:
Rental operations 170,681 182,260
Hotel operations 527,859 492,049
General and administrative 24,000 25,086
Interest 183,199 197,748
Depreciation and amortization 209,223 196,190
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Total costs and expenses 1,114,962 1,093,333
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Net loss ($ 183,790) ($ 200,235)
========= =========
Net loss per limited partnership unit ($ 16.33) ($ 17.79)
========= =========
The accompanying notes are an integral part of these financial statements.
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<PAGE>
DIVERSIFIED HISTORIC INVESTORS V
--------------------------------
(a Pennsylvania limited partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
For the Three Months Ended March 31, 1996 and 1995
(Unaudited)
Three months ended
March 31,
1996 1995
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Cash flows from operating activities:
Net loss ($ 183,790) ($ 200,235)
Adjustments to reconcile net loss to
net cash provided by (used in) operating
activities: 209,223 196,190
Depreciation and amortization
Changes in assets and liabilities:
(Increase) decrease in restricted cash (18,258) 10,893
Increase in accounts receivable (77,543) (3,667)
Increase in other assets (5,357) (255,067)
Increase in accounts payable - trade 67,934 42,965
(Decrease) increase in accounts payable -
related parties (10,581) 21,725
Increase (decrease) in accounts payable -
taxes 35,618 (19,363)
Increase (decrease) in interest payable 3,551 (38,781)
Increase (decrease) in accrued liabilities 4,122 (25,986)
(Decrease) increase in tenant security deposits (554) 3,452
--------- ---------
Net cash provided by (used in) operating
activities 24,365 (267,874)
--------- ---------
Cash flows from investing activities:
Capital expenditures (43,290 -0-
--------- ---------
Net cash used in investing activities (43,290) -0-
--------- ---------
Cash flows from financing activities:
Proceeds from debt financing -0- 221,555
Principal payments (4,838) (6,274)
--------- ---------
Net cash (used in) provided by financing activities (4,838) 215,281
---------- ---------
Decrease in cash and cash equivalents (23,763) (52,593)
Cash and cash equivalents at beginning of period 40,854 84,643
--------- ---------
Cash and cash equivalents at end of period $ 17,091 $ 32,050
========= =========
The accompanying notes are an integral part of these financial statements.
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<PAGE>
DIVERSIFIED HISTORIC INVESTORS V
--------------------------------
(a Pennsylvania limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The unaudited consolidated financial statements of Diversified Historic
Investors V (the "Registrant") and related notes have been prepared pursuant to
the rules and regulations of the Securities and Exchange Commission.
Accordingly, certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been omitted pursuant to such rules and regulations. The
accompanying consolidated financial statements and related notes should be read
in conjunction with the audited financial statements in Form 10-K of the
Registrant, and notes thereto, for the year ended December 31, 1995.
The information furnished reflects, in the opinion of management, all
adjustments, consisting of normal recurring accruals, necessary for a fair
presentation of the results of the interim periods presented.
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<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
To the best of its knowledge, Registrant is not party to, nor is any
of its property the subject of, any pending material legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted during the quarter covered by this report to
a vote of security holders.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit Number Document
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3 Registrant's Amended and Restated
Certificate of Limited Partnership
and Agreement of Limited Partnership,
previously filed as part of Amendment
No. 2 of Registrant's Registration
Statement on Form S-11, are
incorporated herein by reference.
21 Subsidiaries of the Registrant are
listed in Item 2. Properties on Form
10-K, previously filed and
incorporated herein by reference.
(b) Reports on Form 8-K:
No reports were filed on Form 8-K during the quarter ended March
31, 1996.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: May 13, 1996 DIVERSIFIED HISTORIC INVESTORS V
------------
By: Dover Historic Advisors V, General Partner
By: DHP, Inc., Partner
By: /s/ Donna M. Zangh
--------------------------
DONNA M. ZANGHI,
Secretary and Treasurer
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<ARTICLE> 5
<CIK> 0000818669
<NAME> DHI V
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 17,091
<SECURITIES> 0
<RECEIVABLES> 165,190
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 125,308
<PP&E> 19,550,912
<DEPRECIATION> 6,689,518
<TOTAL-ASSETS> 13,428,747
<CURRENT-LIABILITIES> 474,828
<BONDS> 10,432,127
0
0
<COMMON> 0
<OTHER-SE> 2,362,633
<TOTAL-LIABILITY-AND-EQUITY> 13,428,747
<SALES> 0
<TOTAL-REVENUES> 931,172
<CGS> 0
<TOTAL-COSTS> 722,540
<OTHER-EXPENSES> 209,223
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 183,199
<INCOME-PRETAX> (183,790)
<INCOME-TAX> 0
<INCOME-CONTINUING> (183,790)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (183,790)
<EPS-PRIMARY> (16.33)
<EPS-DILUTED> 0
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