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 June 30, 2000
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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
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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
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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
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<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Consolidated Balance Sheets - June 30, 2000 (unaudited)
and December 31, 1999
Consolidated Statements of Operations - For the Three
Months and Six Months Ended June 30, 2000 and 1999
(unaudited)
Consolidated Statements of Cash Flows - For the Six
Months Ended June 30, 2000 and 1999 (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 June 30, 2000, Registrant had cash of $7,333.
Such funds are expected to be used to pay liabilities and general
and administrative expenses of Registrant, and to fund cash
deficits of the property. 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 lender in order to remain
current on all obligations. The Registrant is not aware of any
additional sources of liquidity.
As of June 30, 2000, Registrant had restricted cash
of $117,962 consisting primarily of funds held as security
deposits and escrows for taxes. 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 second quarter of 2000, Registrant
incurred a net loss of $66,086 ($5.87 per limited partnership
unit) compared to a net loss of $47,184 ($4.19 per limited
partnership unit) for the same period in 1999. For the first six
months of 2000, Registrant incurred a loss of $116,940 ($10.39
per limited partnership unit) compared to net income of
$3,754,997 ($333.64 per limited partnership unit) for the same
period in 1999.
Rental income increased $2,769 to $32,322 in the
second quarter of 2000 from $29,553 in the same period in 1999
and increased $5,586 to $60,832 for the first six months of 2000
from $55,246 for the same period in 1999. The increase in rental
income is due to an increase in average occupancy during the
second quarter (92% from 88%) and for six months (87% from 82%)
at the Lofts at Red Hill.
Rental operations expense increased $21,276 to
$36,924 in the second quarter of 2000 from $15,648 in the same
period in 1999 and increased $21,056 to $54,938 for the first six
months of 2000 from $33,432 for the same period in 1999 due to an
increase in apartment preparation and commission expenses at the
Lofts at Red Hill due to the increase in average occupancy.
Interest expense increased $391 to $14,904 in the
second quarter of 2000 from $14,513 in the same period in 1999.
The increase is due to a higher principal balance on the
mortgage.
Interest expense decreased $41,935 to $29,709 for
the first six months of 2000 from $71,104 for the same period in
1999. The decrease is due to the foreclosure of the Redick Plaza
Hotel effective as of January 1999, partially offset by an
increase in interest expense at the Lofts at Red Hill due to a
higher principal balance on the mortgage.
As of January 1999 the Redick Plaza Hotel was
foreclosed by the second mortgage lender, with the consent of the
first mortgage lender, by recordation of a deed in lieu of
foreclosure. The deed was recorded in June 1999 to be effective
as of January 15, 1999. As a result, the Registrant realized an
extraordinary gain from forgiveness of indebtedness in the amount
of $3,994,755, which is the difference between the debt of the
hotel and the net book value of its assets in the first quarter
of 1999.
In the second quarter of 2000, Registrant incurred a
loss of approximately $35,000 at the Lofts at Red Hill, including
$15,000 of depreciation and amortization expense, compared to a
loss of $16,000 including $15,000 of depreciation expense in the
second quarter of 1999. The increase in the loss in the second
quarter of 2000 from the same period in 1999 is due to the
increase in rental operations expense, partially offset by the
increase in rental income, both due to the increase in average
occupancy (92% from 88%).
For the first six months of 2000, Registrant
incurred a loss of approximately $54,000 at the Lofts at Red
Hill, including $29,000 of depreciation and amortization expense,
compared to a loss of $37,000 including $29,000 of depreciation
expense in the same period in 1999. The increase in the loss in
the first six months of 2000 from the same period in 1999 is due
to the increase in rental operations expense, partially offset by
the increase in rental income, both due to the increase in
average occupancy (87% from 82%).
The results of operations for the second quarter and
the first six months of 1999 have been restated to reflect the
foreclosure of the Redick Plaza Hotel effective as of January
1999.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS V
(a Pennsylvania limited partnership)
CONSOLIDATED BALANCE SHEETS
Assets
June 30, 2000 December 31, 1999
(Unaudited)
Rental properties, at cost:
Land $ 61,046 $ 61,046
Buildings and improvements 1,445,431 1,445,431
Furniture and fixtures 86,863 86,863
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1,593,340 1,593,340
Less - accumulated depreciation (740,198) (711,121)
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853,142 882,219
Cash and cash equivalents 7,333 3,951
Restricted cash 117,962 116,039
Accounts and notes receivable 1,940 150
Other assets (net of amortization
of $192,697 and $160,475 at
June 30, 2000 and December 31,
1999,respectively) 144,999 177,221
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Total $1,125,376 $1,179,580
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Liabilities and Partners' Equity
Liabilities:
Debt obligations $ 423,108 $ 417,399
Accounts payable:
Trade 152,168 111,524
Related parties 33,656 33,656
Taxes 27,189 13,693
Accrued liabilities 15,256 14,160
Tenant security deposits 11,135 9,344
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Total liabilities 662,512 599,776
Partners' equity 462,864 579,804
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Total $1,125,376 $1,179,580
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The accompanying notes are an integral part of these financial statements.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS V
(a Pennsylvania limited partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months Six months
ended June 30, ended June 30,
2000 1999 2000 1999
Restated Restated
Revenues:
Rental income $32,322 $29,553 $ 60,832 $ 55,246
Hotel income 0 0 0 18,181
Interest income 51 55 172 222
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Total revenues 32,373 29,608 61,004 73,649
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Costs and expenses:
Rental operations 36,924 15,648 54,938 33,432
Hotel operations 0 0 0 96,318
General and
administrative 15,999 15,999 31,998 31,998
Interest 14,904 14,513 29,709 71,104
Depreciation and
amortization 30,632 30,632 61,299 80,555
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Total costs and expenses 98,459 76,792 177,944 313,407
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Net loss before
extraordinary item (66,086) (47,184) (116,940) (239,758)
Extraordinary gain from
from extinguishment of debt 0 0 0 3,994,755
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Net (loss) income ($66,086) ($47,184) ($116,940) $3,754,997
======= ======= ======== ==========
Net loss per limited
partnership unit:
Net loss before
extraordinary item ($ 5.87) ($ 4.19) ($ 10.39) ($ 21.30)
Extraordinary gain 0 0 0 354.95
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Net (loss) income ($ 5.87) ($ 4.19) ($ 10.39) ($ 333.65)
======== ======= ======== ==========
The accompanying notes are an integral part of these finacial statements.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS V
(a Pennsylvania limited partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended
June 30,
2000 1999
Restated
Cash flows from operating activities:
Net (loss) income ($116,940)$3,754,997
Adjustments to reconcile net (loss)
income to net cash provided by (used
in) operating activities:
Depreciation and amortization 61,299 80,555
Extraordinary gain from 0 (3,994,755)
extinguishment of debt
Changes in assets and liabilities:
(Increase) decrease in restricted cash (1,923) 391
Increase in accounts receivable (1,790) (142)
Increase in accounts payable - trade 40,644 67,312
Increase in accounts payable - taxes 13,496 44,063
Increase in interest payable 0 42,320
Increase (decrease) in accrued
liabilities 1,096 (1,421)
Increase in tenant security deposits 1,791 910
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Net cash used in operating activities: (2,327) (5,770)
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Cash flows from financing activities:
Proceeds from debt financings 5,709 4,783
Repayments of debt financings 0 (8,404)
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Net cash provided by (used in)
financing activities: 5,709 (3,621)
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Increase (decrease) in cash and cash
equivalents 3,382 (9,391)
Cash and cash equivalents at
beginning of period 3,951 13,986
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Cash and cash equivalents at end of period $ 7,333 $ 4,595
======== =========
The accompanying notes are an integral part of these finacial 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") 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 and notes thereto in the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1999.
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 a party
to, nor is 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
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.
(b) Reports on Form 8-K:
No reports were filed on Form 8-K during the quarter
ended June 30, 2000.
<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: November 27, 2000 DIVERSIFIED HISTORIC INVESTORS V
By: Dover Historic Advisors V,
General Partner
By: EPK, Inc., Partner
By: /s/ Spencer Wertheimer
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SPENCER WERTHEIMER
President and Treasurer
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