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, 1999
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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.)
1609 Walnut Street, Philadelphia, PA 19103
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (215) 557-9800
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, 1999 (unaudited)
and December 31, 1998
Consolidated Statements of Operations - Three Months
Ended March 31, 1999 and 1998 (unaudited)
Consolidated Statements of Cash Flows - Three Months
Ended March 31, 1999 and 1998 (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, 1999, Registrant had cash of
$7,809. 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, 1999, Registrant had restricted
cash of $160,880 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
Any capital expenditures needed are generally
replacement items and are funded out of cash from operations or
replacement reserves, if any. 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.
(3) Results of Operations
During the first quarter of 1999, Registrant
incurred a net loss of $702,148 ($62.39 per limited partnership unit)
compared to a net loss of $653,740 ($58.09 per limited partnership
unit) for the same period in 1998.
Rental and hotel income combined decreased $81,999
from $286,095 in the first quarter of 1998 to $204,096 in the same
period in 1999. This decrease resulted from a decrease of $4,828 in
rental income and a decrease of $77,171 in hotel income. The decrease
in rental income is the result of a decrease in the average occupancy
at the Lofts at Red Hill (93% to 77%). The decrease in hotel income
is due to a decrease in average occupancy (31% to 28%) combined with a
decrease in average nightly rates ($89.89 to $71.59) at the Redick
Plaza Hotel.
Hotel operations expense decreased $50,728 from
$508,785 in the first quarter of 1998 to $458,057 in the same period
in 1999 due to an overall decrease in operating expenses due to the
decrease in occupancy.
Interest expense increased by $20,463 from
$247,732 in the first quarter of 1998 to $268,195 in the same period
in 1999. The increase is due to the commencement of interest on a new
note placed on the Redick Plaza Hotel in September 1998.
Losses incurred during the quarter at the
Registrant's two properties amounted to $671,685, compared to a loss
of approximately $619,000 for the same period in 1998.
In the first quarter of 1998, Registrant incurred
a loss of $649,000 at the Redick Plaza Hotel including $116,000 of
depreciation and amortization expense compared to a loss of $601,000
in the first quarter of 1998, including $115,000 of depreciation and
amortization expense. The increased loss from the first quarter of
1998 to the first quarter of 1999 is the result of a decrease in hotel
income and an increase in interest expense partially offset by a
decrease in operating expenses. Hotel income decreased due to a
decrease in the average occupancy (31% to 28%) combined with a
decrease in average nightly rates ($89.89 to $71.59). Interest
expense increased due to the commencement of interest on a new note
placed on the Redick Plaza Hotel in September 1998. Operating
expenses decreased due to the decrease in the occupancy.
In the first quarter of 1999, Registrant incurred
a loss of $22,000 at the Lofts at Red Hill, including $15,000 of
depreciation and amortization expense, compared to a loss of $18,000
including $15,000 of depreciation expense in the first quarter of
1998. The increase in the loss from the first quarter of 1998 to the
same period in 1999 is due to a decrease in rental income due to a
decrease in the average occupancy (93% to 77%).
<PAGE>
DIVERSIFIED HISTORIC INVESTORS V
(a Pennsylvania limited partnership)
CONSOLIDATED BALANCE SHEETS
Assets
March 31, 1999 December 31, 1998
(Unaudited)
Rental properties, at cost:
Land $ 347,955 $ 347,955
Buildings and improvements 10,322,476 10,322,476
Furniture and fixtures 1,121,539 1,121,539
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11,791,970 11,791,970
Less - Accumulated depreciation (5,879,460) (5,752,945)
---------- ----------
5,912,510 6,039,025
Cash and cash equivalents 7,809 13,986
Restricted cash 160,880 263,862
Accounts and notes receivable 88,123 99,954
Other assets (net of amortization of
$385,048 and $365,187 at March 31, 1999
and December 31, 1998, respectively) 328,144 348,005
---------- ----------
Total $ 6,497,466 $ 6,764,832
========== ==========
Liabilities and Partners' Equity
Liabilities:
Debt obligations $ 7,569,245 $ 7,566,974
Accounts payable:
Trade 696,366 578,973
Related parties 33,656 33,656
Taxes 182,457 95,258
Interest payable 1,722,775 1,498,851
Accrued liabilities 36,522 33,447
Tenant security deposits 9,065 8,145
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Total liabilities 10,250,086 9,815,304
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Partners' equity (3,752,620) (3,050,472)
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Total $ 6,497,466 $ 6,764,832
========== ==========
The accompanying notes are an integral part of these financial statements.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS V
(a Pennsylvania limited partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 1999 and 1998
(Unaudited)
Three months Three months
ended Ended
March 31, March 31,
1999 1998
Revenues:
Rental income $ 26,992 $ 31,820
Hotel income 177,104 254,275
Interest income 167 689
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Total revenues 204,263 286,784
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Costs and expenses:
Rental operations 17,784 22,456
Hotel operations 458,057 508,785
General and administrative 15,999 15,999
Interest 268,195 247,732
Depreciation and amortization 146,376 145,552
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Total costs and expenses 906,411 940,524
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Net loss ($702,148) ($653,740)
======= =======
Net loss per limited partnership unit ($ 62.39) ($ 58.09)
======= =======
The accompanying notes are an integral part of these financial statements.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS V
(a Pennsylvania limited partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1999 and 1998
(Unaudited)
Three months ended
March 31,
1999 1998
Cash flows from operating activities:
Net loss ($702,148) ($653,740)
Adjustments to reconcile net loss to net cash (used in)
provided by operating activities:
Depreciation and amortization 146,376 145,552
Changes in assets and liabilities:
Decrease (increase) in restricted cash 102,982 (4,369)
Decrease in accounts receivable 11,831 26,929
Increase in accounts payable - trade 117,393 236,460
Decrease in accounts payable - related parties 0 (21,344)
Increase in accounts payable - taxes 87,199 62,710
Increase in interest payable 223,924 232,190
Increase in accrued liabilities 920 435
Increase in tenant security deposits 3,075 7,776
------- -------
Net cash (used in) provided by operating activities (8,448) 32,599
------- -------
Cash flows from investing activities:
Capital expenditures 0 0
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Net cash used in investing activities 0 0
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Cash flows from financing activities:
Borrowings under debt obligations 2,271 3,542
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Net cash provided by financing activities 2,271 3,542
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(Decrease) increase in cash and cash equivalents (6,177) 36,141
Cash and cash equivalents at beginning of period 13,986 57,736
------- -------
Cash and cash equivalents at end of period $ 7,809 $ 93,877
======= =======
The accompanying notes are an integral part of these financial statements.
<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, 1998.
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.
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 Document
Number
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, 1999.
<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: June 7, 1999 DIVERSIFIED HISTORIC INVESTORS V
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By: Dover Historic Advisors V, General Partner
By: EPK, Inc., Partner
By: /s/ Spencer Wertheimer
----------------------
SPENCER WERTHEIMER
President and Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 7,809
<SECURITIES> 0
<RECEIVABLES> 88,123
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 11,791,970
<DEPRECIATION> 5,879,460
<TOTAL-ASSETS> 6,497,466
<CURRENT-LIABILITIES> 696,366
<BONDS> 7,569,245
0
0
<COMMON> 0
<OTHER-SE> (3,752,620)
<TOTAL-LIABILITY-AND-EQUITY> 6,497,466
<SALES> 0
<TOTAL-REVENUES> 204,263
<CGS> 458,057
<TOTAL-COSTS> 17,784
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 268,195
<INCOME-PRETAX> (702,148)
<INCOME-TAX> 0
<INCOME-CONTINUING> (702,148)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (702,148)
<EPS-BASIC> (62.39)
<EPS-DILUTED> 0
</TABLE>
