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 THEx
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
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 0-18498
Krupp Cash Plus-V Limited Partnership
Massachusetts 04-3021560
(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
This Form 10-Q contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Actual results could differ materially from those
projected in the forward-looking statements as a result of a number of
factors, including those identified herein.
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
Real estate assets:
Investment in Joint Venture, net of
accumulated amortization of
acquisition costs of $52,293
<S> <C> <C>
and $0, respectively (Note 2) $22,864,518 $23,187,379
Mortgage-backed securities ("MBS"), net of
accumulated amortization (Note 3) 796,808 915,554
Total real estate assets 23,661,326 24,102,933
Cash and cash equivalents 1,349,619 2,101,121
Other investment (Note 3) 492,256 -
Other assets 23,375 36,190
Total assets $25,526,576 $26,240,244
LIABILITIES AND PARTNERS' EQUITY
Accrued audit liability $ 6,750 $ 9,729
Partners' equity (Note 4):
Unitholders
(2,060,350 Units outstanding) 25,566,558 26,273,929
Corporate Limited Partner
(100 Units outstanding) (569) (535)
General Partners (46,163) (42,879)
Total Partners' equity 25,519,826 26,230,515
Total liabilities and Partners' equity $25,526,576 $26,240,244
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
For the Three Months For the Six Months
Ended June 30, Ended June 30,
1996 1995 1996 1995
Revenue:
Partnership's share of Joint
<S> <C> <C> <C> <C>
Venture net income (Note 2) $191,852 $272,530 $398,092 $496,106
Interest income - MBS (Note 3) 20,171 21,859 40,577 44,159
Interest income - other 23,213 30,735 50,025 68,490
Total revenue 235,236 325,124 488,694 608,755
Expenses:
General and administrative
(Note 5) 15,081 32,243 39,068 56,950
Asset management fees (Note 5) 35,794 35,932 71,251 71,484
Amortization of organization
costs (Note 2) 26,147 - 52,293 -
Total expenses 77,022 68,175 162,612 128,434
Net income $158,214 $256,949 $326,082 $480,321
Allocation of net income
(Note 4):
Unitholders (2,060,350
Units outstanding) $156,624 $254,368 $322,805 $475,495
Net income per Unit of
Depositary Receipt $ .08 $ .12 $ .16 $ .23
Corporate Limited Partner
(100 Units outstanding) $ 8 $ 12 $ 16 $ 23
General Partners $ 1,582 $ 2,569 $ 3,261 $ 4,803
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Six Months
Ended June 30,
1996 1995
Operating activities:
<S> <C> <C>
Net income $ 326,082 $ 480,321
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization of acquisition costs 52,293 -
Amortization of MBS discount (1,980) (362)
Partnership's share of Joint Venture
net income (398,092) (496,106)
Distributions from Joint Venture 398,092 496,106
Decrease in other assets 12,815 5,429
Increase (decrease) in accrued audit
liability (2,979) 1,500
Net cash provided by operating
activities 386,231 486,888
Investing activities:
Distributions from Joint Venture in
excess of net income 270,568 90,720
Principal collections on MBS 120,726 34,535
Other investment (492,256) (977,406)
Net cash used in investing
activities (100,962) (852,151)
Financing activity:
Distributions (1,036,771) (1,039,775)
Net decrease in cash and cash equivalents (751,502) (1,405,038)
Cash and cash equivalents, beginning of period 2,101,121 2,665,531
Cash and cash equivalents, end of period $ 1,349,619 $ 1,260,493
</TABLE>
The accompanying notes are an integral
part of the financial statements.
<PAGE>
KRUPP CASH PLUS-V 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. In the opinion of the General Partners of Krupp
Cash Plus-V 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 Annual Report on Form 10-K for the year ended December 31,
1995 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 June 30, 1996, its
results of operations for the three and six months ended June 30, 1996
and 1995 and its cash flows for the six months ended June 30, 1996 and
1995.
The results of operations for the three and six months ended June 30,
1996 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.
(2) Investment in Joint Venture
The Partnership and an affiliate of the Partnership own a 49.9% and
50.1% interest in Spring Valley Marketplace Joint Venture (the "Joint
Venture"), respectively. The express purpose of entering into the Joint
Venture was to acquire and operate Spring Valley Marketplace (the
"Marketplace"). The Marketplace is a shopping center containing 314,673
net leasable square feet located in Spring Valley, Rockland County, New
York.
The investment balance reflects the original cost of the investment,
acquisition costs of $1,882,546 which are being amortized over the
remaining life of the underlying asset, allocations of net income earned
by the Joint Venture and distributions received by the Joint Venture.
Condensed financial statements of the Joint Venture are as follows:
<PAGE>
Spring Valley Partnership
Condensed Balance Sheets
<TABLE>
<CAPTION>
ASSETS
June 30, December 31,
1996 1995
<S> <C> <C>
Property, at cost $ 53,528,871 $ 53,409,298
Accumulated depreciation (13,012,206) (12,084,310)
40,516,665 41,324,988
Other assets 1,757,404 1,491,737
Total assets $ 42,274,069 $ 42,816,725
LIABILITIES AND PARTNERS' EQUITY
Total liabilities $ 233,076 $ 233,513
Partners' equity:
The Partnership 21,034,265 21,304,833
Joint Venture partner 21,006,728 21,278,379
Total Partners' equity 42,040,993 42,583,212
Total liabilities and
Partners' equity $ 42,274,069 $ 42,816,725
</TABLE>
<TABLE>
<CAPTION>
Spring Valley Partnership
Condensed Statements of Operations
For the Three Months For the Six Months
Ended June 30, Ended June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenue $1,607,720 $1,637,361 $ 3,439,077 $ 3,203,870
Property operating
expenses (760,764) (636,134) (1,713,400) (1,302,038)
Depreciation (462,481) (455,075) (927,896) (907,631)
Net income $ 384,475 $ 546,152 $ 797,781 $ 994,201
</TABLE>
(3) Mortgage Backed Securities and Other Investment
The MBS held by the Partnership are issued by the Federal Home Loan
Mortgage Corporation. The following is additional information on the
MBS held:
<PAGE>
June 30, December 31,
1996 1995
Face Value $810,471 $ 931,197
Amortized Cost $798,808 $ 915,554
Estimated Market Value $846,000 $ 940,000
Coupon rates of the MBS range from 9.0% to 9.5% per annum and mature in
the years 2016 and 2017. The Partnership's MBS portfolio had gross
unrealized gains of approximately $49,000 and $24,000 at June 30, 1996
and December 31, 1995, respectively. The Partnership does not expect to
realize these gains as it has the intention and ability to hold the MBS
until maturity.
At June 30, 1996, the Partnership held an investment in commercial paper
maturing within one year. The cost approximates the market value.
(4) Changes in Partners' Equity
A summary of changes in Partners' equity (deficit) for the six months
ended June 30, 1996 is as follows:
<TABLE>
<CAPTION>
Corporate Total
Limited General Partners'
Unitholders Partner Partners Equity
Balance at
<S> <C> <C> <C> <C>
December 31, 1995 $26,273,929 $(535) $(42,879) $26,230,515
Net income 322,805 16 3,261 326,082
Distributions (1,030,176) (50) (6,545) (1,036,771)
Balance at June 30, 1996 $25,566,558 $(569) $(46,163) $25,519,826
</TABLE>
(5) Related Party Transactions
Under the terms of the Partnership Agreement, the General Partners or
their affiliates are entitled to an Asset Management Fee for the
management of the Partnership's business equal to .5% per annum of the
Total Invested Assets of the Partnership (as defined in the prospectus),
payable quarterly. The Partnership also reimburses affiliates of the
General Partners for certain expenses incurred in connection with the
preparation and mailing of reports and other communications to the
Unitholders.
Amounts paid or accrued to the General Partners or their affiliates are
as follows:
<PAGE>
<TABLE>
<CAPTION>
For the Three Months For Six Months
Ended June 30, Ended June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Asset management fees $35,794 $35,932 $71,251 $ 71,484
Expense reimbursements 6,156 14,646 18,450 29,291
Charged to operations $41,950 $50,578 $89,701 $100,775
</TABLE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This Management s Discussion and Analysis of Financial Condition and
Results of Operations contains forward-looking statements including those
concerning Management s expectations regarding the future financial
performance and future events. These forward-looking statements involve
significant risk and uncertainties, including those described herein.
Actual results may differ materially from those anticipated by such
forward-looking statements.
Liquidity and Capital Resources
The Partnership's sources of liquidity are derived from the distributions
it receives from its interest in the Joint Venture, earnings and
collections on its MBS, and interest earned on its short-term investments.
The Marketplace, a strong contributor to the Partnership's liquidity, in
1996 is currently occupied at a rate of 98%. In order to retain or
increase this level of occupancy and to remain competitive within it's
immediate market, the Marketplace is expected to spend approximately
$670,000 for capital improvements in 1996, most of which are tenant
buildouts to attract and retain quality tenants at the shopping center.
Improvements are expected to continue throughout the remainder of the year.
Liquidity provided by the MBS comes primarily from interest income as
principal prepayments have decreased significantly from the principal
amounts received in 1994 and 1993. During those years, prepayments were
significant due to the low interest rate environment. The liquidity
provided by the principal prepayments has been used to fund distributions,
which has resulted in a reduction of the Partnership's capital resources.
The Partnership holds MBS that are guaranteed by the Federal Home Loan
Mortgage Corporation ("FHLMC"). The principal risks with respect to MBS
are the credit worthiness of FHLMC and the risk that the current value of
any MBS may decline as a result of changes in market interest rates. The
General Partners believe that this risk is minimal due to the fact that the
Partnership has the ability to hold these securities to maturity.
The most significant demands on the Partnership's liquidity are the
quarterly distributions. Distributions are funded by MBS principal
prepayments, distributions received from the Marketplace and working
capital reserves. Due to the decrease in MBS principal prepayments and its
effect on the Partnership's liquidity, the Partnership may need to
periodically adjust the distribution rate. Therefore, sustaining the
distribution rate is mainly dependent upon the future performance of the
Marketplace.
<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 for the six months ended June 30, 1996 and the period
from inception to June 30, 1996. The General Partners provide certain of
the information below to meet requirements of the Partnership Agreement and
because they believe that is an appropriate supplemental measure of
operating performance. However, Distributable Cash Flow and Net Cash
Proceeds from Capital Transactions should not be considered by the reader
as a substitute to net income, as an indicator of the Partnership s
operating performance or to cash flow as a measure of liquidity.
<TABLE>
<CAPTION>
(In $1,000's except per Unit amounts)
For the Six Months Inception to
Ended June 30, June 30,
1996 1996
Distributable Cash Flow:
<S> <C> <C>
Net income for tax purposes $ 477 $ 6,868
Items providing / not requiring or
(not providing) the use of
operating funds:
Amortization of acquisition costs 52 52
Amortization of organization costs - 50
Distributions from Joint Venture 669 10,135
Partnership's share of Joint Venture
taxable net income (549) (6,776)
Total Distributable Cash Flow ("DCF") $ 649 $10,329
Unitholders' Share of DCF $ 642 $10,226
Unitholders' Share of DCF per Unit $ .31 $ 4.97(c)
General Partners' Share of DCF $ 7 $ 103
Net Proceeds from Capital Transactions:
Principal collections on MBS, net $ 119 $ 4,572
Distributions:
Unitholders $1,030(a) $16,526(b)
Unitholders' Average
per Unit $ .50(a) $ 8.02(b)(c)
General Partners $ 7(a) $ 106(b)
Total Distributions $1,037(a) $16,632(b)
</TABLE>
(a) Represents distributions paid in 1996, except the February, 1996
distribution, which relates to 1995 cash flows and includes an
estimate of the distribution to be paid in August, 1996.
(b) Includes an estimate of the distribution to be paid in August, 1996.
(c) Unitholders average per Unit return of capital as of August, 1996 is
$3.05 ($8.02 - $4.97).
<PAGE>
Operations
Partnership
Distributable Cash Flow, as defined in the Partnership Agreement,
increased in the first six months of 1996, as compared to the first
six months of 1995. This increase is primarily due to an increase
in distributions received from the Joint Venture.
Total revenue for the three and six months ended June 30, 1996
decreased as compared to the same time periods in 1995, as a result
of a decrease in net income generated by the Partnership's Joint
Venture investment. During this same period, MBS interest income
decreased due to repayment and prepayments of principal which occur
on the MBS portfolio. Interest income on other investments has also
decreased as a result of lower cash and cash equivalent balances
available for investment.
Total expenses for the three and six month periods ended June 30,
1996 increased as compared to the three and six month periods ended
June 30, 1995, as a result of the amortization of costs relating to
the investment in the Marketplace which will continue to be
amortized over the remaining life of the Marketplace. This increase
was partially offset by a decrease in general and administrative
expenses incurred with the preparation and mailing of reports and
other investor communications.
Joint Venture
Revenue for the three months ended June 30, 1996, as compared to the
same period in 1995, decreased due to lower reimbursable tenant
billings at the Marketplace based upon lower reimbursable operating
expenses between the two periods.
For the six months ended June 30, 1996, as compared to the same
period in 1995, revenue increased due to higher reimbursable
operating expenses, including snow removal costs from the stormy
winter season.
Property operating expenses for the three and six months ended June
30, 1996 increased, as compared to the three and six months ended
June 30, 1995, due to increased real estate tax and maintenance
expenses. Real estate taxes increased as a result of a reassessment
of the Marketplace by the local taxing authority. The increase in
maintenance expense was due to snow removal expenditures as a result
of adverse winter weather conditions. Depreciation expense also
increased in conjunction with capital improvement expenditures.
General
In accordance with Financial Accounting Standard No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of", which is effective for fiscal years beginning after December
15, 1995, the Partnership has implemented policies and practices for
assessing impairment of its real estate assets.
<PAGE>
In assessing the impairment of the underlying real estate owned by the
Joint Venture, the General Partners routinely perform market and growth
studies combined with periodic appraisals of the underlying property. If
the General Partners believe that there is a significant impairment in
value, a provision to write down the investment to fair value will be
charged against income. At this time, the General Partners do not believe
that any asset of the Partnership is significantly impaired.
<PAGE>
KRUPP CASH PLUS-V 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
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant had duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Krupp Cash Plus-V Limited Partnership
(Registrant)
BY: /s/Robert A. Barrows
Robert A. Barrows
Treasurer and Chief Accounting Officer of Krupp Plus-II
Corporation, the General Partner of Krupp Company Limited
Partnership-VI
DATE: July , 1996
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Cash Plus V
Financial Statements for the six months ending June 30, 1996 and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 1,841,875<F1>
<SECURITIES> 796,808
<RECEIVABLES> 20,745<F2>
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,630
<PP&E> 22,916,811<F3>
<DEPRECIATION> (52,293)<F4>
<TOTAL-ASSETS> 25,526,576
<CURRENT-LIABILITIES> 6,750
<BONDS> 0
25,556,558<F5>
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 25,556,558
<SALES> 0
<TOTAL-REVENUES> 488,694<F6>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 162,612<F7>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 326,082
<EPS-PRIMARY> 0<F8>
<EPS-DILUTED> 0<F8>
<FN>
<F1>Includes cash and cash equivalents of $1,349,619 and investment in commercial
paper of $492,256.
<F2>Includes all receivables of the Partnership included in "Other Assets" on the
balance sheet.
<F3>Includes Investment in Joint Venture $21,094,265 and costs related to the
acquisition of the asset underlying the investment $1,882,546.
<F4>Represents amortization of costs related to the acquisition of the asset
underlying the investment.
<F5>Equity of General Partners ($46,163), Limited Partners of $25,567,127.
<F6>Includes all revenue of the Partnership.
<F7>Includes all expenses of the Partnership.
<F8>Net income allocated $3,261 to the General Partners and $322,821 to the Limited
Partners. Average net income is $.16 on 2,060,450 Units outstanding.
</FN>
</TABLE>
