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, 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 - March 31, 2000
(unaudited) and December 31, 1999
Consolidated Statements of Operations - Three Months
Ended March 31, 2000 and 1999 (unaudited)
Consolidated Statements of Cash Flows - Three Months
Ended March 31, 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 March 31, 2000, Registrant had cash of $5,451.
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 March 31, 2000, Registrant had restricted cash
of $115,651 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 first quarter of 2000, Registrant
incurred a net loss of $50,855 ($4.52 per limited partnership
unit) compared to net income of $3,802,180 ($337.84 per limited
partnership unit) for the same period in 1999.
Rental income increased $2,818 to $28,510 in the
first quarter of 2000 from $25,692 in the same period in 1999.
The increase is the result of an increase in average occupancy at
the Lofts at Red Hill (83% from 77%).
Rental operations expense increased $231 to $18,015
in the first quarter of 2000 from $17,784 in the same period in
1999 due to increases in utilities, maintenance and commissions
expenses due to the increase in occupancy, partially offset by a
decrease in real estate taxes.
Interest expense decreased by $41,487 to $14,804 in
the first quarter of 2000 from $56,591 in 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 first quarter of 2000, Registrant incurred a
loss of approximately $19,000 at the Lofts at Red Hill, including
$15,000 of depreciation and amortization expense, compared to a
loss of $22,000 including $15,000 of depreciation expense in the
first quarter of 1999. The decrease in the loss in the first
quarter of 2000 from the same period in 1999 is due to the
increase in rental income, partially offset by an increase in
rental operations expense, both due to the increase in average
occupancy (83% from 77%).
The results of operations for the first quarter 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
March 31, 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 (725,677) (711,121)
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867,663 882,219
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Cash and cash equivalents 5,451 3,951
Restricted cash 115,651 116,039
Accounts and notes receivable 1,581 150
Other assets (net of amortization
of $176,586 and $160,475 at
March 31, 2000 and December 31,
1999, respectively) 161,111 177,221
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Total $1,151,457 $1,179,580
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Liabilities and Partners' Equity
Liabilities:
Debt obligations $ 420,203 $ 417,399
Accounts payable:
Trade 131,974 111,524
Related parties 33,656 33,656
Taxes 13,693 13,693
Accrued liabilities 14,117 14,160
Tenant security deposits 8,865 9,344
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Total liabilities 622,508 599,776
Partners' equity 528,949 579,804
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Total $1,151,457 $1,179,580
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The accompanying notes are an integral part of these finacial statements.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS V
(a Pennsylvania limited partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended
March 31,
2000 1999
(Restated)
Revenues:
Rental income $28,510 $ 25,692
Hotel income 0 18,181
Interest income 120 167
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Total revenues 28,630 44,040
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Costs and expenses:
Rental operations 18,015 17,784
Hotel operations 0 96,318
General and administrative 15,999 15,999
Interest 14,804 56,591
Depreciation and amortization 30,667 49,923
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Total costs and expenses 79,485 236,615
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Net loss before extraordinary item ($50,855) ($192,575)
Extraordinary gain from
extinguishment of debt 0 3,994,755
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Net (loss) income ($ 50,855) $3,802,180
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Net loss per limited
partnership unit:
Net loss before
extraordinary item ($ 4.52) ($ 17.11)
Extraordinary gain 0 354.95
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Net (loss) income ($ 4.52) 337.84
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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 CASH FLOWS
(Unaudited)
Three months ended
March 31,
2000 1999
Restated
Cash flows from operating activities:
Net (loss) income ($50,855) $3,802,180
Adjustments to reconcile net loss to
net cash provided by (used in)
operating activities:
Depreciation and amortization 30,667 49,923
Extraordinary gain from
extinguishment of debt 0 (3,994,755)
Changes in assets and liabilities:
Decrease (increase) in restricted
cash 388 (453)
Increase in accounts receivable (1,431) (537)
Increase in accounts payable - trade 20,450 51,021
Increase in accounts payable - taxes 0 46,638
Increase in interest payable 0 42,320
(Decrease) increase in accrued
liabilities (43) 390
(Decrease) Increase in tenant
security deposits (479) 920
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Net cash used in operating activities (1,303) (2,353)
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Cash flows from financing activities:
Borrowings under debt obligations 2,803 2,271
Repayments of debt financings 0 (8,404)
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Net cash provided by (used in)
financing activities 2,803 (6,133)
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Increase (decrease) in cash and cash
equivalents 1,500 (8,486)
Cash and cash equivalents at
beginning of period 3,951 13,986
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Cash and cash equivalents at end of
period $ 5,451 $ 5,500
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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 and notes thereto on Form 10-K
of the Registrant 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 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 March 31, 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
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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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