UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED]
For the fiscal year ended
December 31, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED]
For the transition period from
to
Commission file number
0-18498
Krupp Cash Plus-V Limited Partnership
(Exact name of registrant as specified in its
charter)
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)
(Registrant's telephone number, including area
code) (617) 423-2233
Securities registered pursuant to Section
12(b) of the Act: None
Securities registered pursuant to Section
12(g) of the Act: Depositary Receipts
representing Units
of Limited Partner
Interests
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
Indicate by check mark if disclosure of
delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and
will not be contained, to the best of
registrant's knowledge, in definitive proxy or
information statements incorporated by
reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ].
Aggregate market value of voting securities
held by non-affiliates: Not applicable, since
securities are nonvoting.
Documents incorporated by reference: Part IV,
Item 14.
The exhibit index is located on pages 8-9.
The total number of pages in this document is
37.<PAGE>
PART I
This Form 10-K 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.
ITEM 1. BUSINESS
Krupp Cash Plus-V Limited Partnership (the
"Partnership") was formed on August 22, 1988
by filing a Certificate of Limited Partnership
in The Commonwealth of Massachusetts. Krupp
Plus Corporation and Krupp Company Limited
Partnership-VI were the original General
Partners of the Partnership. On March 15,
1995, Krupp Plus Corporation withdrew as
General Partner from the Partnership and
assigned its rights, title and interest in the
Partnership to Krupp Company Limited
Partnership-VI. Krupp Depositary Corporation
is the Corporate Limited Partner. For
details, see Note A to Financial Statements
included in Appendix A of this report.
On March 3, 1989 the Partnership commenced the
marketing and sale of Depositary Receipts
("Units") and raised $41,203,189 from this
public offering. The Partnership invested the
net proceeds from the offering in Spring
Valley Partnership ("Joint Venture") and
mortgage-backed securities ("MBS") issued or
originated by the Federal Home Loan Mortgage
Corporation ("FHLMC"). The Partnership
considers itself to be engaged only in the
industry segment of investment in real estate
and related assets.
The Partnership's retail real estate
investment is subject to seasonal
fluctuations, as net income may vary somewhat
from quarter to quarter based upon changes in
utility consumption, seasonal maintenance
expenditures and changes in rental income
which are based upon a percentage of gross
receipts of retail tenants. The requirements
for compliance with federal, state and local
regulations have not had an adverse effect on
the Partnership's operations to date, and no
adverse effect therefrom is anticipated in the
future.
On December 2, 1997, Berkshire Realty
Enterprise Limited Partnership, an affiliate
of the General Partner, as agent for the
Partnership and its Joint Venture Partner,
Berkshire Realty Company Inc., (collectively
referred to herein as the "Joint Venture
Partners") entered into an Agreement of Sale
to sell the Joint Venture's property, Spring
Valley Marketplace, a shopping center
containing 320,684 leasable square feet
located in Spring Valley, New York, to Kejack,
Inc. and its permitted assigns, which are
unaffiliated third parties. The property was
included in a package with thirteen other
properties owned by affiliates of the General
Partner. The total selling price of the
fourteen properties was $138,000,000, of which
the Joint Venture Partners received
$29,571,700, less their share of the closing
costs. The transaction was consummated on
January 30, 1998.
The sale is considered a Terminating Capital
Transaction as defined by the Partnership
Agreement. Accordingly, the General Partner
expects to liquidate and distribute the
remaining assets of the Partnership in 1998
(see Note H to Financial Statements, included
in Item 8 (Appendix A) of this report.)
As of December 31, 1997, there was one person
employed on-site by the Joint Venture.
ITEM 2. PROPERTY
As
of December 31, 1997, the Partnership had an
unleveraged joint venture investment in a
shopping center with 320,684 square feet of
leasable space. Additional detailed
information with respect to the property is
contained in Note D to the Financial
Statements as well as the Separate Financial
Statements and Schedule III for Spring Valley
Partnership which are included in Item 8
(Appendix A) of this report.
A summary of the Partnership's real estate investment is
presented below.
Average
Occupancy
For the Year Ended
Year of Current Leasable December 31,
Description Acquisition Square Footage
1997 1996 1995 1994 1993
Spring Valley
Marketplace (1) 1988 320,684 96% 98% 98% 96% 95%
(1) The Partnership has a 49.9% joint venture interest in this
property.
There were four tenants at Spring Valley Marketplace that
occupied greater than 10% of the Partnership's leasable space as of
December 31, 1997.
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the
Partnership is a party or to which its property is the subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
Part II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS
There currently is no public market for the
Units and it is not anticipated that any such
public market will develop. The transfer of
Units is subject to certain limitations
contained in the Partnership Agreement.
The number of investors holding Units
("Unitholders") as of December 31, 1997 is
approximately 2,700.
The Partnership made the following
distributions, in quarterly installments,
during the two years ended December 31, 1997
and 1996:
1997 1996
Amount Per Unit Amount Per Unit
Limited Partners:
Unitholders $2,060,350 1.00 $2,060,351 $1.00
(2,060,350 Units)
Corporate Limited
Partner (100 Units) 100 1.00 100 1.00
General Partner 12,847 14,625$2,073,297 $2,075,076
One of the objectives of the Partnership is to
generate cash available for distribution.
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected
financial information regarding the
Partnership's financial position and operating
results. This information should be read in
conjunction with Management's Discussion and
Analysis of Financial Condition and Results of
Operations and the Financial Statements and
Supplementary Data, which are included in
Items 7 and 8 (Appendix A) of this report,
respectively.
<TABLE>
<CAPTION>
Year ended December 31,
1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
Total income (a)$ 132,375$ 169,594 $ 223,956 $ 221,861 $ 288,831
Net income (loss) (5,960,390) 698,265 887,535 603,140 571,567
Net income (loss)
allocated to Partners:
Unitholders (5,900,500) 691,248 878,617 597,080 565,824
Per Unit (2.86) .34 .43 .29 .27
Corporate Limited
Partner (286) 34 43 29 27
General Partner (59,604) 6,983 8,875 6,031 5,716
Total assets at
December 31 16,880,489 24,916,567 26,240,244 27,437,10428,896,948
Distributions:
Unitholders 2,060,350 2,060,351 2,060,350 2,064,585 2,058,935
Per Unit (b) 1.00 1.00 1.00 1.00 1.00
Corporate Limited
Partner 100 100 100 100 100
General Partner 12,847 14,625 17,139 11,965 12,999
</TABLE>
(a) For comparison, total income for the years 1993
through 1996 has been adjusted to exclude the
Partnership's share of Joint Venture net income
(loss) (see the Partnership's Statements of Income,
in Financial Statements and Supplementary Data
included in Appendix A of this report.)
(b) During the years ended 1997, 1996, 1995, 1994 and
1993 the Unitholders' average per Unit return of
capital based on the Distributable Cash
Flow, as defined by Section 17 of the Partnership
Agreement, was $.24, $.44, $.30, $.28, and $.39,
respectively.<PAGE>
ITEM 7.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.
In 1997, Spring Valley Marketplace (the
"Marketplace") had an average occupancy rate
of 96%. The Marketplace spent approximately
$208,000 for capital improvements in 1997
which included parking lot paving, resurfacing
of the sidewalks and painting of the external
canopy.
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. At December 31, 1997, the
Partnership recorded unrealized holding gains
on its MBS of $46,946 to adjust the
investments to market value (see Note C to
Financial Statements, included in Item 8
(Appendix A) of this report).
The most significant demands on the
Partnership's liquidity are the quarterly
distributions. Distributions are funded by MBS
principal collections, distributions received
from the Marketplace and working capital
reserves.
Based upon the Joint Venture Partners'
assessment of the current and future market
conditions, the capital improvements necessary
to remain competitive in its market, its
capital resources and the differing strategies
of the Joint Venture Partners, the Joint
Venture Partners determined that it was in
their best interests, and that of their
respective investors, to sell Spring Valley
Marketplace. On December 2, 1997, Berkshire
Realty Enterprise Limited Partnership, an
affiliate of the General Partner, as agent for
the Partnership and its Joint Venture Partner,
entered into an Agreement of Sale to sell the
Joint Venture's property, the Marketplace, a
shopping center containing 320,684 leasable
square feet located in Spring Valley, New
York, to Kejack, Inc. and its permitted
assigns, which are unaffiliated third parties.
The property was included in a package with
thirteen other properties owned by affiliates
of the General Partner. The total selling
price of the fourteen properties was
$138,000,000, of which the Joint Venture
Partners received $29,571,700, less their
share of the closing costs. The transaction
was consummated on January 30, 1998 (see Note
H to Financial Statements, included in Item 8
(Appendix A) of this report).
Based on the selling prices of the properties
less estimated costs to sell, the Partnership
recorded provisions for losses on its real
estate at December 31, 1997 (see Note D to the
Financial Statements, included in Item 8
(Appendix A) of this report).
The sale is considered a Terminating Capital
Transaction as defined by the Partnership
Agreement. Accordingly, the General Partner
expects to liquidate and distribute the
remaining assets of the Partnership in 1998.
Operations
Partnership
1997 compared to 1996
Net income, net of the Partnership's share of
the Joint Venture net income (loss), decreased
in 1997 when compared to 1996, with a decrease
in total income and an increase in total
expenses. MBS interest income decreased due to
scheduled payments and prepayments of
principal which occur on the MBS portfolio.
Other interest income decreased as a result of
lower average cash balances available for
investment.
Total expenses for the Partnership increased
in 1997 when compared to 1996. General and
administrative expense increased primarily due
to an increase in charges incurred in
connection with the preparation and mailing of
Partnership reports and other investor
communications. Amortization expense
increased with the acceleration of
amortization of acquisition costs related to
the Partnership's Joint Venture investment,
due to the anticipated sale of the
Marketplace, subsequent to year end.
1996 compared to 1995
Net income, net of the Partnership's share of
Joint Venture net income for the Partnership
decreased from 1995 to 1996, due to both a
decline in interest income and an increase in
total expenses. In 1996, as compared to 1995,
total income decreased primarily due to a
decline in other interest income as a result
of lower cash and cash equivalent balances
available for investment. MBS interest income
decreased due to scheduled payments and
prepayments of principal which occur on the
MBS portfolio.
Total expenses increased in 1996, as compared
to 1995. General and administrative expense
increased primarily due to increased charges
incurred in connection with the preparation
and mailing of Partnership reports and other
investor communications. Also, in 1996, the
Partnership began amortizing costs relating to
the investment in the Joint Venture which were
to be amortized over the remaining life of the
underlying asset.
Joint Venture
1997 compared to 1996
Net income, net of the provision for losses on
real estate, decreased in 1997 as compared to
1996 with a decrease in total revenue and an
increase in total expenses. Rental revenue
decreased due to the Marketplace's lower
average occupancy rate of 96% in 1997, as
compared to 98% in 1996. Rental revenue also
decreased with decreases in reimbursable
tenant billings as a result of lower
reimbursable operating and maintenance
expenses.
Total expenses, net of the provision for
losses on real estate, increased in 1997 as
compared to 1996 with a rise in real estate
taxes and depreciation expense partially
offset by decreases in operating and
maintenance expenses. Real estate taxes
increased due to an increase in the school tax
rate by the local taxing authority.
Depreciation expense increased in conjunction
with capital improvement expenditures.
Operating expense decreased with a decline in
expenses related to the operation of the
property, including administrative expenses.
Maintenance expense decreased in 1997 due to a
milder winter season.
1996 compared to 1995
Net income for the Marketplace experienced a
slight increase when comparing 1995 to 1996.
Revenue increased primarily due to higher
tenant billings at the Marketplace based upon
greater reimbursable expenses, including snow
removal costs from the stormy winter season
and real estate taxes.
During 1996, total expenses increased, as
compared to 1995, primarily due to significant
increases in maintenance expense and real
estate taxes. Maintenance expense increased
due to a rise in snow removal expenditures as
a result of the adverse winter weather
conditions. The increase in real estate taxes
was due to both a rise in the assessed value
of the Marketplace and an increase in the
school tax rate by the local taxing authority.
Operating expense increased due to an increase
in expenses relating to the operation of the
property including administrative expenses.
Management fees also increased in conjunction
with the rise in revenue.
Depreciation expense increased in 1996, as
compared to 1995, as a result of continued
capital improvement expenditures.
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Appendix A to this report.
ITEM 9.CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF
THE REGISTRANT
The Partnership has no directors or executive
officers. Information as to the directors and
executive officers of Krupp Company Limited
Partnership-VI, which is the General Partner
of the Partnership, and Krupp Plus-II
Corporation, which is the General Partner of
Krupp Company Limited Partnership-VI, is as
follows:
Position with
Name and Age Krupp Plus-II Corporation
Douglas Krupp (51) President and Co-Chairman of the Board
George Krupp (53) Co-Chairman of the Board
Wayne H. Zarozny (39) Treasurer
Douglas Krupp is Co-Chairman and Co-Founder
of The Berkshire Group. Established in 1969
as the Krupp Companies, this real estate-based
firm expanded over the years within its areas
of expertise including investment program
sponsorship, property and asset management,
mortgage banking, healthcare facility
ownership and the management of the company.
Mr. Krupp is a graduate of Bryant College. In
1989 he received an honorary Doctor of Science
in Business Administration from this
institution and was elected trustee in 1990.
Mr. Krupp is Chairman of the Board and a
Director of both Berkshire Realty Company,
Inc. (NYSE-BRI) and Harborside Healthcare
Corporation (NYSE-HBR). Mr. Krupp also serves
as Chairman of the Board and Trustee of Krupp
Government Income Trust and as Chairman of the
Board and Trustee of Krupp Government Income
Trust II. George Krupp is Douglas Krupp's
brother.
George Krupp is the Co-Chairman and Co-
Founder of The Berkshire Group. Established
in 1969 as the Krupp Companies, this real
estate-based firm expanded over the years
within its areas of expertise including
investment program sponsorship, property and
asset management, mortgage banking and
healthcare facility ownership. Mr. Krupp
received his undergraduate education from the
University of Pennsylvania and Harvard
University Extension School, and holds a
Master's degree in history from Brown
University.
Wayne H. Zarozny is Vice President of The
Berkshire Group. Mr. Zarozny has held several
positions within The Berkshire Group since
joining the company in 1986 and is currently
responsible for accounting and financial
reporting, treasury, accounts payable and
payroll activities. Prior to joining The
Berkshire Group, he was an audit supervisor
for Pannell Kerr Forster International and on
the audit staff of Deloitte, Haskins and Sells
in Boston. He received a B.S. degree from
Bryant College, a Master's degree in Business
Administration from Clark University and is a
Certified Public Accountant.
ITEM 11. EXECUTIVE COMPENSATION
The Partnership does not have any directors
or executive officers.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
As of December 31, 1997 no person of record
owned or was known by the General Partners to
own beneficially more than 5% of the
Partnership's outstanding 2,060,350 Depositary
Receipts. The only interests held by
management or its affiliates consist of its
General Partner and Corporate Limited Partner
Interests.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
The Partnership does not have any directors,
executive offices or nominees for election as
director. Additionally, as of December 31,
1997 no person of record owned or was known by
the General Partners to own beneficially more
than 5% of the Partnership's outstanding
Units.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT
SCHEDULES AND REPORTS ON FORM 8-K
(a)1. Financial Statements - see Index to
Financial Statements included under Item 8
(Appendix A) on page F-2 of this report.
2. Financial Statement Schedules - all
schedules are omitted as they are not
applicable, not required or the information is
provided in theFinancial Statements or the
Notes thereto.
3. Separate Financial Statements - as
required by Rule 3-09 of Regulation
S-X, the financial statements and
schedule for Spring Valley
Partnership are included under Item
8 (Appendix A) on pages F-15 through
F-27 of this report.
(b) Exhibits:
Number and Description Under Regulation S-K
The following reflects all applicable
Exhibits required under Item 601 of
Regulation S-K:
(4) Instruments defining the rights of
security holders including
indentures:
(4.1)Agreement of Limited Partnership dated
as of February 23, 1989 [Exhibit A to
Prospectus included in Amendment No. 2 of
Registrant's Registration Statement on Form S-
11 dated March 1, 1989 (File No. 33-24181)].*
(4.2)Subscription Agreement Specimen
[Exhibit D to Prospectus included in Amendment
No. 2 of Registrant's Registration Statement
on Form S-11 dated March 1, 1989 (File No. 33-
24181)].*
(4.3)First Amendment to and Restatement of
Certificate of Limited Partnership filed with
the Massachusetts Secretary of State on
February 22, 1989 [Exhibit 4.4 to Prospectus
included in Amendment No. 2 of Registrant's
Registration Statement on Form S-11 dated
March 1, 1989 (File No. 33-24181)].*
(4.4)Krupp Sponsored IRA New Investor
Application [Exhibit 4.5 to Prospectus
included in Amendment No. 1 of Registrant's
Registration Statement on Form S-11 dated
November 30, 1988 (File No. 33-24181)].*
(10) Material Contracts:
Spring Valley Marketplace
(10.1) Purchase and Sale Agreement dated
November 14,1988 between Krupp Realty Company
Limited Partnership, now known as Berkshire
Realty Enterprises L.P. ("BRE"), ("Buyer") and
Valley Associates, Ltd. ("Seller"). [Exhibit
10.1 to Registrant's Report of Form 10-Q for
the Quarter Ended September 30, 1989 (File No.
33-24181)].*
(10.2) Assignment of Agreement dated
December 13, 1988 by and between
Spring Valley Partnership
("Assignee") and BRE ("Assignor").
[Exhibit 10.2 to Registrant's Report
on Form 10-Q for the Quarter Ended
September 30, 1989 (File No. 33-
24181)].*
(10.3) Spring Valley Partnership -
Partnership Agreement dated December
13, 1988 by and among Krupp Cash
Plus-V Limited Partnership and BRE
[Exhibit 10.5 to Prospectus in
Amendment No. 2 of Registrant's
Registration Statement on Form S-11
dated March 1, 1989 (File No. 33-
24181)].*
(10.4) Bargain and Sale Deed dated December
13, 1988 between Spring Valley
Partnership ("Grantee") and BRE
("Grantor") [Exhibit 10.3 to
Registrant's Report on Form 10-Q for
the Quarter Ended September 30, 1989
(File No. 33-24181)].*
(10.5) Additional Sales Price Agreement
dated December 13, 1988 between Krupp
Cash Plus-V Limited Partnership and
BRE [Exhibit 10.6 to Prospectus in
Amendment No. 2 of Registrant's
Registration Statement on Form S-11
dated March 1, 1989 (File No. 33-
24181)].*
(10.6) Property Management Agreement dated
December 16, 1988 between Spring
Valley Partnership ("Owner") and BRE
("Agent") [Exhibit 10.7 to Prospectus
in Amendment No. 2 of Registrant's
Registration Statement on Form S-11
dated March 1, 1989 (File No. 33-
24181)].*
* Incorporated by reference.
(c) Reports on Form 8-K
During the quarter ended December 31,
1997, the Partnership did not file
any reports on Form 8-K.
SIGNATURES
Pursuant to the requirements of Section 13
or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this
report to be signed on its behalf by the
undersigned, thereunto duly authorized, on the
24th day of March, 1998.
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
By: Krupp Company Limited Partnership-VI, the
General Partner, by Krupp Plus-II Corporation,
the General Partner of Krupp Company Limited
Partnership-VI
By: /s/ Douglas Krupp
Douglas Krupp, Co-Chairman (Principal
Executive Officer) and Director of
Krupp Plus-II Corporation
Pursuant to the requirements of the
Securities Exchange Act of 1934, this report
has been signed below by the following persons
on behalf of the registrant and in the
capacities indicated, on the 24th day of
March, 1998.
Signatures Titles
/s/ Douglas Krupp President, Co-Chair-
man (Principal Executive Douglas Krupp
Officer) and Director of Krupp
Plus-II Corporation, the General Partner of
Krupp Company Limited Partnership-VI
/s/ George Krupp
Co-Chairman (Principal Executive Officer)
and George KruppDirector of Krupp Plus-
II Corporation, the General
Partner of Krupp Company
Limited Partnership-VI
/s/ Wayne H. Zarozny Treasurer of Krupp
Plus-
II Corporation,the WayneH. Zarozny General
Partner of Krupp Company Limited Partnership-
VI
APPENDIX A
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
FINANCIAL STATEMENTS
ITEM 8 of FORM 10-K
ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION
For the Year Ended December 31, 1997<PAGE>
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
INDEX TO FINANCIAL STATEMENTS
Report of Independent Accountants F-3
Balance Sheets at December 31, 1997 and
December 31, 1996 F-4
Statements of Income (Loss) for the Years
Ended December 31, 1997,
1996 and 1995 F-5
Statements of Changes in Partners' Equity for
the Years Ended
December 31, 1997, 1996 and 1995 F-6
Statements of Cash Flows for the Years Ended
December 31, 1997,
1996 and 1995 F-7
Notes to Financial Statements F-8 - F-14
Separate Financial Statements - Spring Valley
Partnership F-15 - F-27
All other schedules are omitted as they are
not applicable or not required, or the
information is provided in the financial
statements or the notes thereto.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Krupp Cash Plus-V Limited Partnership:
We have audited the financial statements of
Krupp Cash Plus-V Limited Partnership (the
"Partnership") listed in the index on page F-2
of this Form 10-K. These financial statements
are the responsibility of the Partnership's
management. Our responsibility is to express
an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with
generally accepted auditing standards. Those
standards require that we plan and perform the
audit to obtain reasonable assurance about
whether the financial statements are free of
material misstatement. An audit includes
examining, on a test basis, evidence
supporting the amounts and disclosures in the
financial statements. An audit also includes
assessing the accounting principles used and
significant estimates made by management, as
well as evaluating the overall financial
statement presentation. We believe that our
audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements
referred to above present fairly, in all
material respects, the financial position of
Krupp Cash Plus-V Limited Partnership as of
December 31, 1997 and 1996, and the results of
its operations and its cash flows for each of
the three years in the period ended December
31, 1997 in conformity with generally accepted
accounting principles.
As discussed in Note H, the Partnership's
Joint Venture property was sold on January 30,
1998. As a result, the Partnership will be
liquidated in 1998.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
January 30, 1998
<PAGE>
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
BALANCE SHEETS
December 31, 1997 and 1996
<TABLE>
<CAPTION>
ASSETS
1997 1996
Real estate assets:
<S> <C> <C>
Investment in Joint Venture (Note D) $15,173,852 $22,729,660
Mortgage-backed securities ("MBS")
(Note C) 628,909 645,762
Total real estate assets 15,802,761 23,375,422
Cash and cash equivalents 1,063,094 1,524,048
Interest receivable and other assets 14,634 17,097
Total assets $16,880,489 $24,916,567
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Accrued audit liability $ 13,500 $ 13,500
Due to affiliates (Note F) 26 49,363
Total liabilities 13,526 62,863
Partners' equity (deficit) (Note E):
Unitholders
(2,060,350 Units outstanding) 16,943,976 24,904,826
Corporate Limited Partner
(100 Units outstanding) (987) (601)
General Partner (122,972) (50,521)
Unrealized holding gains on MBS (Note C) 46,946 -
Total Partners' equity 16,866,963 24,853,704
Total liabilities and Partners' equity$16,880,489 $24,916,567
</TABLE>
The accompanying notes are an integral
part of the financial statements.<PAGE>
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
STATEMENTS OF INCOME (LOSS)
For the Years Ended December 31, 1997, 1996 and 1995
<TABLE>
<CAPTION>
1997 1996 1995
Income:
<S> <C> <C> <C>
Interest income - MBS (Note C) $56,747 $72,801 $ 86,939
Interest income - other 75,628 96,793 137,017
Total income 132,375 169,594 223,956
Expenses:
General and administrative
(Note F) 165,861 134,399 99,239
Asset management fees (Note F) 142,453 143,178 144,082
Amortization of acquisition
costs (Note D) 1,777,960 104,586 -
Total expenses 2,086,274 382,163 243,321
Loss from operations (1,953,899) (212,569) (19,365)
Partnership's share of Joint
Venture net income
(loss) (Note D) (4,006,491) 910,834 906,900
Net income (loss) (Note G) $(5,960,390) $ 698,265 $ 887,535
Allocation of net income (loss)
(Note E):
Unitholders
(2,060,350 Units outstanding)$(5,900,500)$ 691,248$ 878,617
Net income (loss) per Unit of
Depositary Receipt $ (2.86) $ .34 $ .43
Corporate Limited Partner
(100 Units outstanding) $ (286) $ 34 $ 43
General Partner $ (59,604) $ 6,983 $ 8,875
</TABLE>
The accompanying notes are an integral
part of the financial statements.<PAGE>
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
STATEMENTS OF CHANGES IN PARTNERS' EQUITY
For the Years Ended December 31, 1997, 1996 and 1995
<TABLE>
<CAPTION>
Corporate Unrealized Total
Limited General Holding Partners'
Unitholders Partner Partner Gains on MBS Equity
Balance at
<S> <C> <C> <C> <C> <C>
December 31, 1994 $27,455,662 $ (478) $ (34,615)$ - $27,420,569
Distributions (2,060,350) (100) (17,139) - (2,077,589)
Net income 878,617 43 8,875 - 887,535
Balance at
December 31, 1995 26,273,929 (535) (42,879) - 26,230,515
Distributions (2,060,351) (100) (14,625) - (2,075,076)
Net income 691,248 34 6,983 - 698,265
Balance at
December 31, 1996 24,904,826 (601) (50,521) - 24,853,704
Distributions
(Note E) (2,060,350) (100) (12,847) - (2,073,297)
Net loss (Note E) (5,900,500) (286) (59,604) - (5,960,390)
Unrealized holding
gains on MBS
(Note C) - - - 46,946 46,946
Balance at
December 31, 1997 $16,943,976$ (987) $(122,972)$ 46,946$16,866,963
</TABLE>
The per Unit distributions for each of the
years ended December 31, 1997, 1996, and 1995
was $1.00, with $.24, $.44 and $.30,
respectively, representing a return of capital
for tax purposes.
The accompanying notes are an integral
part of the financial statements.<PAGE>
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1997, 1996 and 1995
<TABLE>
<CAPTION>
1997 1996 1995
Operating activities:
<S> <C> <C> <C>
Net income (loss) $(5,960,390) $ 698,265 $ 887,535
Adjustments to reconcile net
income (loss) to net cash
provided by (used in)
operating activities:
Amortization of acquisition
costs 1,777,960 104,586 -
Amortization of MBS discount (755) (4,847) (669)
Partnership's share of Joint
Venture net (income) loss 4,006,491 (910,834) (906,900)
Distributions from Joint
Venture - 910,834 906,900
Changes in assets and
liabilities:
Decrease in interest
receivable and other
assets 2,463 19,093 2,279
Increase (decrease) in
due to affiliates (49,337) 49,363 -
Increase (decrease) in
accrued audit liability - 3,771 (6,806)
Net cash provided by
(used in) operating
activities (223,568) 870,231 882,339
Investing activities:
Distributions from Joint Venture
in excess of net income 1,771,357 353,133 561,160
Principal collections on MBS 64,554 274,639 69,680
Net cash provided by
investing activities 1,835,911 627,772 630,840
Financing activity:
Distributions (2,073,297) (2,075,076)(2,077,589)
Net decrease in cash and
cash equivalents (460,954) (577,073) (564,410)
Cash and cash equivalents,
beginning of year 1,524,048 2,101,121 2,665,531
Cash and cash equivalents,
end of year$ 1,063,094 $ 1,524,048 $2,101,121
Supplemental schedule of noncash investing and financing
activities:
Unrealized holding gains on MBS
(Note C) $ 46,946 $ - $ -
</TABLE>
The accompanying notes are an integral
part of the financial statements.
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
A.Organization
Krupp Cash Plus-V Limited Partnership (the
"Partnership") was formed on August 22, 1988
by filing a Certificate of Limited Partnership
in The Commonwealth of Massachusetts. The
Partnership originally issued all of the
General Partner Interests to Krupp Plus
Corporation and The Krupp Company Limited
Partnership-VI in exchange for capital
contributions aggregating $3,000. Except
under certain limited circumstances upon
termination of the Partnership, the General
Partners are not required to make any
additional capital contributions. On March
15, 1995, Krupp Plus Corporation withdrew as
General Partner from the Partnership and
assigned its rights, title and interest in the
Partnership to Krupp Company Limited
Partnership-VI.
The Partnership issued all of the Corporate
Limited Partner Interests to Krupp Depositary
Corporation (the "Corporate Limited Partner")
in exchange for a capital contribution of
$2,000. The Corporate Limited Partner, in
turn, issued Depositary Receipts (the "Units")
to the investors and assigned all of its
rights and interest in the Limited Partner
Interests (except for its $2,000 Limited
Partner's interest) to the holders of the
Units (the "Unitholders"). As of March 1,
1991, the Partnership completed its public
offering having sold 2,060,350 Units for
$41,203,189, net of purchase volume discounts
of $3,811.
On December 2, 1997, Berkshire Realty
Enterprise Limited Partnership, an affiliate
of the General Partner, as agent for the
Partnership and its Joint Venture Partner,
Berkshire Realty Company Inc., (collectively
referred to herein as the "Joint Venture
Partners") entered into an Agreement of Sale
to sell the Joint Venture's property, Spring
Valley Marketplace. The property was included
in a package with thirteen other properties
owned by affiliates of the Joint Venture
Partners. The transaction was consummated on
January 30, 1998 (see Note H).
The sale is considered a Terminating Capital
Transaction as defined by the Partnership
Agreement. Accordingly, the General Partners
expect to liquidate and distribute the
remaining assets of the Partnership in 1998.
All distributions of net cash proceeds from
the Terminating Capital Transaction shall be
governed by the Partnership Agreement.
B.Significant Accounting Policies
The Partnership uses the following accounting
policies for financial reporting purposes,
which may differ in certain respects from
those used for federal income tax purposes
(see Note G):
Risks and Uncertainties
The Partnership invests its cash primarily in
deposits and money market funds with
commercial banks. The Partnership has not
experienced any losses to date on its invested
cash.
The preparation of financial statements in
conformity with generally accepted accounting
principles requires management to make
estimates and assumptions that affect the
reported amount of assets and liabilities,
contingent assets and liabilities and revenues
and expenses during the reporting period.
Actual results could differ from those
estimates.
Continued
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS, Continued
B.Significant Accounting Policies, Continued
Cash and Cash Equivalents
The Partnership includes all short-term
investments with maturities of three months or
less from the date of acquisition in cash and
cash equivalents. Cash equivalents are
recorded at cost, which approximates current
market values.
Deferred Costs
Costs incurred in connection with the
acquisition of computer software are being
amortized over a five year period using the
straight-line method. Costs incurred in
connection with the organization of the
Partnership were amortized over a five year
period using the straight-line method. Costs
incurred in connection with the acquisition of
the Partnership's Joint Venture are amortized
over the remaining life of the underlying
asset (see Note H).
Investment in Joint Venture
The Partnership has a 49.9% interest in the
Spring Valley Partnership (the "Joint
Venture"). This investment was recorded at
cost and is accounted for by the equity method
since the Partnership Agreement requires a
two-thirds majority for all major decisions
regarding the Joint Venture. As such, the
Partnership does not have control of the
operations of the underlying asset. Under the
equity method of accounting, the Partnership's
equity investment in the net income (loss) of
the Joint Venture is included currently in the
Partnership's net income (loss). Cash
distributions received from the Joint Venture
reduce the Partnership's investment (see Note
D).
Mortgage Backed Securities
At December 31, 1997, MBS are classified as
available-for-sale securities and are carried
at market value due to the forthcoming sale of
the Joint Venture's property (see Notes C and
H). The market value of MBS is determined
based on quoted market prices. At December
31, 1996, MBS were classified as held-to-
maturity securities and carried at amortized
cost. Premiums or discounts are amortized over
the life of the underlying mortgages using the
effective yield method.
Income Taxes
The Partnership is not liable for federal or
state income taxes as Partnership income or
loss is allocated to the Partners for income
tax purposes. In the event that the
Partnership's tax returns are examined by the
Internal Revenue Service or state taxing
authority and the examination results in a
change in the Partnership's taxable income or
loss, such change will be reported to the
Partners.
Reclassifications
Certain prior year balances have been
reclassified to conform with current year
financial statement presentation.
Continued<PAGE>
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS, Continued
C.Mortgage-Backed Securities
All of the MBS held by the Partnership are
issued by the Federal Home Loan Mortgage
Corporation. The following is additional
information on the MBS held as of December 31,
1997 and 1996:
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Face Value $592,004 $656,558
Amortized Cost $581,963 $645,762
Estimated Market Value $629,000 $694,000
</TABLE>
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 $46,946 and $48,407
at December 31, 1997 and 1996, respectively.
In accordance with Financial Accounting
Standard No. 115, "Accounting for Certain
Investments in Debt and Equity Securities",
unrealized holding gains and losses for
available-for-sale securities are reported as
a separate component of equity until realized.
At December 31, 1997, the Partnershipr
recorded unrealized holding gains of $46,946
on its MBS investments to adjust to market
value based on quoted market prices.
D.Investment in Joint Venture
On December 14, 1988, the Joint Venture
acquired Spring Valley Marketplace (the
"Marketplace"), a 320,684 square foot shopping
center located on 30 acres of land in Spring
Valley, Rockland County, New York. The Joint
Venture acquired the Marketplace for
$50,000,000 and incurred closing costs of
$359,408 related to the acquisition.
Additionally, the Joint Venture executed a Net
Operating Income Guaranty Agreement ("NOI
Guaranty Agreement") with the seller, by
which, the seller would reimburse the Joint
Venture if the net operating income from the
Marketplace did not meet or exceed $4.3
million annually. In accordance with the Net
Operating Income Guaranty Agreement, the Joint
Venture has collected $1,000,000, the maximum
obligation due from the seller, and has
therefore reduced the cost basis of the
Marketplace by this amount for financial
reporting purposes. The Marketplace, built in
1987, consists of one structure anchored by
five major tenants and is connected by five
sections occupied by smaller tenants.
The Joint Venture owns the Marketplace free
and clear from all material liens or
encumbrances.The Partnership holds a 49.9%
joint venture interest. At December 31, 1997,
the investment balance reflected the original
cost of the investment, allocations of net
income (loss) earned by the Joint Venture and
distributions received by the Joint Venture.
For the year ended December 31, 1997, the
Partnership recognized amortization of
acquisition costs related to the Joint Venture
investment of $1,777,960. Due to the
anticipated sale of the Marketplace subsequent
to year end, the Partnership fully amortized
the remaining net acquisition costs.
Continued
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS, Continued
D.Investment in Joint Venture, Continued
In accordance with Financial Accounting
Standard No. 121, "Accounting for the
Impairment of Long-Lived Assets to Be Disposed
Of", the Joint Venture recordeda valuation
provision for losses on its real estate asset
of $9,277,433 as of December 31, 1997. These
provisions represent the difference between
carrying value and selling price less
estimated costs to sell as a result of the
forthcoming sale of the Joint Venture's
property subsequent to year end (see Note H).
As these assets are held for sale, the Joint
Venture Partnership has discontinued
depreciation.
Separate financial statements for the Joint
Venture are included on pages F-15 through
F-27 of this report.
E. Partners' Equity
Under the Partnership Agreement, profits or
losses from Partnership operations and
Distributable Cash Flow are allocated 99% to
the Unitholders and Corporate Limited Partner
(the "Limited Partners") based on Units held,
and 1% to the General Partner.
Upon the occurrence of a terminating capital
transaction, as defined in the Partnership
Agreement, proceeds will be applied to the
payment of all debts and liabilities of the
Partnership then due and then fund any
reserves for contingent liabilities.
Remaining net cash proceeds will then be
distributed first, to each class of Partner,
the aggregate of the then positive balances in
the capital accounts of the Partners of such
class, second, to the Limited Partners until
the aggregate of the positive balances in the
capital accounts of the Limited Partners is
equal to their invested capital, third, to
the General Partner until the aggregate of the
positive balances in the capital accounts of
the General Partner is equal to their invested
capital, fourth, to the Limited Partners until
they have received any deficiency in the 12%
cumulative return on invested capital through
fiscal years prior to the date of the
terminating capital transaction, fifth, to the
General Partner until they have received an
amount necessary so that the amounts of net
cash proceeds whenever allocated under number
three and number four are in the ratio of 90%
to 10%, and sixth, 90% to the Limited Partners
and 10% to the General Partner.
Continued
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS, Continued
E. Partners' Equity, Continued
As of December 31, 1997, the following cumulative Partner
contributions and allocations have been made since inception of the
Partnership:
<TABLE>
<CAPTION>
Unrealized
Corporate Holding
Limited General Gains on
Unitholders Partner Partner MBS Total
<S> <C> <C> <C> <C> <C>
Capital Contributions$ 41,203,189 $2,000 $ 3,000 - $41,208,189
Syndication Costs (4,826,066) - - - (4,826,066)
Distributions (19,096,891) (1,029) (119,603) - (19,217,523)
Unrealized Holding
Gains on MBS - - - 46,946 46,946
Net Loss (336,256) (1,958) (6,369) - (344,583)
Balance at
December 31, 1997 $ 16,943,976$ (987)$(122,972)$ 46,946$ 16,866,963
</TABLE>
F. Related Party Transactions
Under the terms of the Partnership
Agreement, the General Partner or its
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 Partner for certain
expenses incurred in connection with
the preparation and mailing of reports
and other communications to the
Unitholders.
Amounts paid to the General Partner's
affiliates were as follows:
<TABLE>
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Asset management fees $142,453 $143,178 $144,082
Expense reimbursements 114,447 92,401 53,519
Charged to operations $256,900 $235,579 $197,601
</TABLE>
Due to affiliates consisted of expense reimbursements of $26 and
$49,363 at December 31, 1997 and 1996, respectively.
Continued
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS, Continued
G. Federal Income Taxes
The reconciliation of net income (loss) reported in the accompanying
Statements of Income with the net income reported in the
Partnership's 1997, 1996 and 1995 federal income tax returns is as
follows:
<TABLE>
<CAPTION>
1997 1996 1995
Net income (loss) per Statements
<S> <C> <C> <C>
of Income $(5,960,390) $ 698,265 $ 887,535
Difference in book to tax
amortization 1,673,374 - -
Difference in Partnership's
share of Joint Venture taxable
net income due to book to tax
difference in depreciation 371,582 296,811 264,724
Difference in Partnership's
share of Joint Venture taxable
net income due to book to tax
difference in bad debt (10,692) 7,767 -
Difference in Partnership's
share of Joint Venture taxable
net income due to book to tax
difference in fixed asset
revaluation 4,434,396 - -
Difference in Partnership's
share of difference due to
rental adjustment required by
Generally Accepted Accounting
Principles 983 13,120 (9,071)
Net income for federal income tax
purposes $ 509,253$1,015,963 $1,143,188
The allocation of the 1997 net income for federal income tax
purposes is as follows:
Portfolio Passive
Income Income Total
Unitholders $ 156,699 $347,436 $ 504,135
Corporate Limited Partner 8 17 25
General Partner 1,583 3,510 5,093
$ 158,290 $350,963 $ 509,253
</TABLE>
For the years ended December 31, 1997, 1996 and 1995 the average per
Unit income to the Unitholders for federal income tax purposes was
$.24, $.49 and $.55, respectively.
Continued
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS, Continued
G.Federal Income Taxes, Continued
The basis of the Partnership's assets for
financial reporting purposes is
less than its tax basis by approximately
$8,213,000 and $1,840,000 at December 31, 1997
and 1996, respectively. The tax and book
basis of the Partnership's liabilities are the
same.
H.Subsequent Events
The sale of the Joint Venture's property, as
discussed in Note A, was consummated on
January 30, 1998. The total selling price of
the fourteen properties was $138,000,000, of
which the Joint Venture Partners received
$29,571,700, less their share of the closing
costs.
The sale is considered a Terminating Capital
Transaction as defined by the Partnership
Agreement. Accordingly, the General Partner
expects to liquidate and distribute the
remaining assets of the Partnership in 1998.
All distributions of net cash proceeds from
the Terminating Capital Transaction shall be
governed by Section 8.3(b) of the
PartnershipAgreement as discussed above in
Note E.
As a result of the sale of the Marketplace on
January 30, 1998, the Partnership filed a
report on Form 8-K on February 2, 1998.
SPRING VALLEY PARTNERSHIP
FINANCIAL STATEMENTS AND SCHEDULE
For the Year Ended December 31, 1997
<PAGE>
SPRING VALLEY PARTNERSHIP
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
Report of Independent Accountants F-17
Balance Sheets at December 31, 1997 and
December 31, 1996 F-18
Statements of Operations for the Years Ended
December 31, 1997, 1996 and 1995 F-19
Statements of Changes in Partners' Equity for
the Years
Ended December 31, 1997, 1996 and 1995 F-20
Statements of Cash Flows for the Years Ended
December 31, 1997, 1996 and 1995 F-21
Notes to Financial Statements F-22 - F-26
Schedule III - Real Estate and Accumulated
Depreciation F-27
All other schedules are omitted as they are
not applicable or not required, or the
information is provided in the financial
statements or the notes thereto.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Spring Valley Partnership:
We have audited the financial statements and
financial statement schedule of Spring Valley
Partnership (the "Joint Venture") listed in
the index on page F-16 of these Financial
Statements. These financial statements and
the financial statement schedule are the
responsibility of the Joint Venture's
management. Our responsibility is to express
an opinion on these financial statements and
the financial statement schedule based on our
audits.
We conducted our audits in accordance with
generally accepted auditing standards. Those
standards require that we plan and perform the
audit to obtain reasonable assurance about
whether the financial statements are free of
material misstatement. An audit includes
examining, on a test basis, evidence
supporting the amounts and disclosures in the
financial statements. An audit also includes
assessing the accounting principles used and
significant estimates made by management, as
well as evaluating the overall financial
statement presentation. We believe that our
audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements
referred to above present fairly, in all
material respects, the financial position of
Spring Valley Partnership as of December 31,
1997 and 1996, and the results of its
operations and its cash flows for each of the
three years in the period ended December 31,
1997 in conformity with generally accepted
accounting principles. In addition, in our
opinion, the financial statement schedule
referred to above, when considered in relation
to the basic financial statements taken as a
whole, presents fairly, in all material
respects, the information required to be
included therein.
As discussed in Note I, the Joint Venture's
property was sold on January 30, 1998. As a
result, the Joint Venture will be liquidated
in 1998.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
January 30, 1998<PAGE>
SPRING VALLEY PARTNERSHIP
BALANCE SHEETS
December 31, 1997 and 1996
ASSETS
<TABLE>
<CAPTION>
1997 1996
Real estate assets:
<S> <C> <C>
Land $ 10,403,471$ 10,403,471
Building and improvements 43,632,731 43,425,111
54,036,202 53,828,582
Less accumulated depreciation at
December 31, 1996 (Note G) (25,327,070) (13,983,325)
Total real estate assets 28,709,132 39,845,257
Cash and cash equivalents 575,784 1,153,075
Other assets 1,392,739 1,099,725
Total assets $ 30,677,655$ 42,098,057
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Accrued expenses and other
liabilities (Note C)$ 380,150 $ 185,163
Accounts payable - 30,044
Due to affiliates (Note F) 828 7,320
Total liabilities 380,978 222,527
Partners' equity (Note D) 30,296,677 41,875,530
Total liabilities and Partners' equity $ 30,677,655$ 42,098,057
</TABLE>
The accompanying notes are an integral
part of the financial statements.<PAGE>
SPRING VALLEY PARTNERSHIP
STATEMENTS OF OPERATIONS
For the Years Ended December 31, 1997, 1996 and 1995
<TABLE>
<CAPTION>
1997 1996 1995
Revenue:
<S> <C> <C> <C>
Rental (Note E) $ 6,734,019 $6,938,222 $6,544,064
Other income 51,936 33,438 35,233
Total revenue 6,785,955 6,971,660 6,579,297
Expenses:
Operating (Note F) 344,832 376,480 350,023
Maintenance 493,218 649,491 511,014
Management fees (Note F) 394,601 416,414 398,642
Real estate taxes 2,238,599 1,804,942 1,661,539
Depreciation 2,066,312 1,899,015 1,840,644
Provision for losses on real
estate (Note G) 9,277,433 - -
Total expenses 14,814,995 5,146,342 4,761,862
Net income (loss) (Note H) $(8,029,040)$1,825,318 $1,817,435
Allocation of net income (loss)
(Note D):
Cash Plus-V Limited
Partnership $(4,006,491) $ 910,834 $ 906,900
Berkshire Realty
Company, Inc.$(4,022,549) $ 914,484 $ 910,535
</TABLE>
The accompanying notes are an integral
part of the financial statements.<PAGE>
SPRING VALLEY PARTNERSHIP
STATEMENTS OF CHANGES IN PARTNERS' EQUITY
For the Years Ended December 31, 1997, 1996, and 1995
<TABLE>
<CAPTION>
Berkshire
Cash Plus-V Realty Total
Limited Company, Partners'
Partnership Inc. Equity
Balance at
<S> <C> <C> <C>
December 31, 1994 $21,865,991 $21,841,786 $43,707,777
Distributions (1,468,058) (1,473,942) (2,942,000)
Net income 906,900 910,535 1,817,435
Balance at
December 31, 1995 21,304,833 21,278,379 42,583,212
Distributions (1,263,967) (1,269,033) (2,533,000)
Net income 910,834 914,484 1,825,318
Balance at
December 31, 1996 20,951,700 20,923,830 41,875,530
Distributions (Note D) (1,771,357) (1,778,456) (3,549,813)
Net loss (Note D) (4,006,491) (4,022,549) (8,029,040)
Balance at
December 31, 1997 $15,173,852 $15,122,825 $30,296,677
</TABLE>
The accompanying notes are an integral
part of the financial statements.<PAGE>
SPRING VALLEY PARTNERSHIP
STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1997, 1996 and 1995
<TABLE>
<CAPTION>
1997 1996 1995
Operating activities:
<S> <C> <C>
Net income (loss)$(8,029,040) $ 1,825,318 $ 1,817,435
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation 2,066,312 1,899,015 1,840,644
Provision for losses on real
estate 9,277,433 - -
Changes in assets and liabilities:
Increase in other assets (293,014) (183,554) (143,627)
Increase (decrease) in accounts
payable (23,044) (22,532) 37,044
Increase (decrease) in due to
affiliates (6,492) 4,598 2,722
Increase (decrease) in other
liabilities 194,987 (52) (9,839)
Net cash provided by
operating activities 3,187,142 3,522,793 3,544,379
Investing activities:
Increase (decrease) in accounts
payable related to fixed asset
additions (7,000) 7,000 -
Additions to fixed assets (207,620) (419,284) (279,315)
Net cash used in
investing activities (214,620) (412,284) (279,315)
Financing activity:
Distributions (3,549,813) (2,533,000) (2,942,000)
Net increase (decrease) in cash and
cash equivalents (577,291) 577,509 323,064
Cash and cash equivalents, beginning
of year 1,153,075 575,566 252,502
Cash and cash equivalents, end
of year $ 575,784 $ 1,153,075 $ 575,566
</TABLE>
The accompanying notes are an integral
part of the financial statements.<PAGE>
SPRING VALLEY PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
A.Organization
Spring Valley Partnership (the "Joint
Venture") was formed on December 13, 1988 by
filing a Business Certificate in the
Commonwealth of Massachusetts. The original
General Partner interests were issued to Krupp
Cash Plus-IV Limited Partnership ("Cash Plus-
IV"), at 50.1%; Krupp Cash Plus-V Limited
Partnership ("Cash Plus-V"), at .01%; and
Krupp Realty Company Limited Partnership
("Krupp Realty Company"), at 49.89%. Pursuant
to the original Partnership Agreement, Cash
Plus-V purchased Krupp Realty Company's
interest in the Joint Venture and succeeded to
its capital contributions and its share of
profit and loss allocations and distributions.
On June 25, 1991, The Joint Venture executed
an Amended and Restated Partnership Agreement,
whereby Cash Plus-IV assigned its rights,
title and interest in the Partnership to
Berkshire Realty Company, Inc. ("Berkshire"),
a Delaware Corporation. Pursuant to the
Assignment and First Amendment to Spring
Valley Partnership Amended and Restated
Partnership Agreement dated May 1, 1995,
Berkshire assigned 49.1% of its rights, title
and interest in the Partnership to BRI OP
Limited Partnership ("BRI OP LP"), its
majority owned subsidiary. As of December 31,
1995, the Joint Venture Partners of Spring
Valley Partnership are BRI OP LP (49.1%) and
Berkshire (1%), collectively, "Berkshire
Realty Company, Inc." (50.1%) and Cash Plus-V
Limited Partnership (49.9%). Profits and
losses and distributions will continue to be
allocated to the Joint Venture Partners based
on the percentage of their respective capital
contributions to total Partners' capital
contributions.
On December 14, 1988, the Joint Venture
acquired Spring Valley Marketplace (the
"Marketplace"), a 320,684 square foot shopping
center located on 30 acres of land in Spring
Valley, Rockland County, New York. The Joint
Venture acquired the Marketplace for
$50,000,000 and incurred closing costs of
$359,408 related to the acquisition.
Additionally, the Joint Venture executed a Net
Operating Income Guaranty Agreement ("NOI
Guaranty Agreement") with the seller, by
which, the seller would reimburse the Joint
Venture if the net operating income from the
Marketplace did not meet or exceed $4.3
million annually. Per the NOI Guaranty
Agreement, which expired on December 13, 1990,
the seller's obligation was limited to
$1,000,000 on a cumulative basis. As a result
of the NOI Guaranty Agreement, the Joint
Venture has collected $1,000,000, the maximum
obligation due from the seller, and has
therefore reduced the cost basis of the
Marketplace by this amount for financial
reporting purposes. The Marketplace, built in
1987, consists of one structure anchored by
five major tenants and is connected by five
sections occupied by smaller tenants. The
Joint Venture owns the Marketplace free and
clear from all material liens or encumbrances.
On December 2, 1997, Berkshire Realty
Enterprise Limited Partnership, an affiliate
of the Joint Venture Partners, as agent for
the Joint Venture, entered into an Agreement
of Sale to sell the Joint Venture's property,
Spring Valley Marketplace, to Kejack, Inc. and
its permitted assigns, which are unaffiliated
third parties. Spring Valley Marketplace was
included in a package with thirteen other
properties owned by affiliates of the Joint
Venture Partners. The transaction was
consummated on January 30, 1998 (see Note I).
The sale of the Marketplace is considered a
cause for dissolution of the Joint Venture as
defined by the Partnership Agreement.
Accordingly, the Joint Venture Partners expect
to liquidate and distribute the remaining
assets of the Joint Venture in 1998. All
distributions of net cash proceeds from the
Terminating Capital Transaction shall be
governed by Section 8.3 (b) of the Partnership
Agreement.
Continued
SPRING VALLEY PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS, Continued
B.
Significant Accounting Policies
The Joint Venture uses the following
accounting policies for financial reporting
purposes, which may differ in certain respects
from those used for federal income tax
purposes (see Note H):
Risks and Uncertainties
The Joint Venture invests its cash primarily
in deposits and money market funds with
commercial banks. The Joint Venture has not
experienced any losses to date on its invested
cash.
The preparation of financial statements in
conformity with generally accepted accounting
principles requires management to make
estimates and assumptions that affect the
reported amount of assets and liabilities and
disclosure of contingent assets and
liabilities at the date of the financial
statements and the reported amount of revenues
and expenses during the reporting period.
Actual results could differ from those
estimates.
Cash and Cash Equivalents
The Joint Venture includes all short-term
investments with maturities of three months or
less from the date of acquisition in cash and
cash equivalents. Cash equivalents are
recorded at cost, which approximates current
market value.
Rental Revenues
Commercial leases require the payment of base
rent monthly in advance. Rental revenues are
recorded on the accrual basis. Leases
generally contain provisions for additional
rent based on a percentage of tenant sales and
other provisions which are also recorded on
the accrual basis, but are billed in arrears.
Minimum rental revenue for long term
commercial leases is recognized on a straight-
line basis over the life of the related lease.
Depreciation
Depreciation of building and improvements is
provided for by the use of the straight-line
method over estimated useful lives of 3 to 25
years. Tenant improvements are depreciated
over the life of the lease.
Impairment of Long-Lived Assets
Real estate assets and equipment are stated at
depreciated cost. Pursuant to Statement of
Financial Accounting Standards Opinion No. 121
"Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be
Disposed of", impairment losses are recorded
on long-lived assets used in operations on a
property by property basis, when events and
circumstances indicate that the assets might
be impaired and the estimated undiscounted cash
flows to be generated by those assets are less
than the carrying amount of those assets.
Upon determination that an impairment has
occurred, those assets shall be reduced to
fair value less estimated costs to sell (see Note G).
Leasing Commissions
Leasing commissions are deferred and amortized
over the life of the related lease.
Continued
SPRING VALLEY PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS, Continued
B.Significant Accounting Policies, Continued
Income Taxes
The Joint Venture is not liable for federal or
state income taxes because Joint Venture
income or loss is allocated to the Partners
for income tax purposes. In the event the
Joint Venture's tax returns are examined by
the Internal Revenue Service or state taxing
authority and such an examination results in
a change in Joint Venture taxable income or
loss, such change will be reported to the
Partners.
C.Accrued Expenses and Other Liabilities
Accrued expenses and other liabilities
consisted of the following at December 31,
1997 and 1996:
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Prepaid rent $225,000 $ -
Accrued insurance 89,673 110,846
Tenant security deposits 65,185 71,614
Other accrued expenses 292 2,703
</TABLE>
$380,150 $185,163
D.Partners' Equity
Under the terms of the Partnership Agreement,
profits, losses and distributions are
allocated 49.9% to Cash Plus-V Limited
Partnership and 50.1% to Berkshire Realty
Company, Inc. Upon the occurrence of the sale
by the Joint Venture of all or substantially
all of the Property and other assets owned by
the Joint Venture, the Joint Venture shall be
dissolved. After payment of the debts and
allowances for the liabilities of the Joint
Venture, the remaining assets shall be
distributed to the Joint Venture Partners on
the basis of the amount of each Partner's
capital contribution in proportion to total
capital contributions.
As of December 31, 1997, the following cumulative Partner
contributions and allocations have been made since inception of
the Joint Venture:
<TABLE>
<CAPTION>
Berkshire
Cash Plus-V Realty Total
Limited Company, Partners'
Partnership Inc. Equity
<S> <C> <C> <C>
Capital contributions $ 26,379,755 $ 26,373,641$ 52,753,396
Net income 2,245,368 2,254,369 4,499,737
Distributions (13,451,271) (13,505,185) (26,956,456)
Total at
December 31, 1997 $ 15,173,852 $ 15,122,825 $ 30,296,677
</TABLE>
E. Future Base Rents Due Under Commercial Operating Leases
As a result of the sale of the Marketplace subsequent to year-
end, all commercial operating leases were assumed by the buyer
(see Note I).
Continued
SPRING VALLEY PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS, Continued
F.Related Party Transactions
Property management fees are paid monthly to
an affiliate of the Joint Venture Partners at
the rate of up to 6% of rentals and other
operating income received by the Marketplace.
The Joint Venture also reimburses affiliates
for certain expenses incurred in connection
with operation of the Joint Venture and its
property including administrative expenses.
Amounts paid or accrued to affiliates of the
Joint Venture Partners during the years ended
December 31, 1997, 1996 and 1995 were as
follows:
<TABLE>
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Property management fees$394,601 $416,414 $398,642
Expense reimbursements 42,841 87,766 58,284
Charged to operations$437,442 $504,180 $456,926
</TABLE>
Due to affiliates consisted of expense
reimbursements of $828 and $7,320 at
December 31, 1997 and 1996, respectively.
G.Provision for Losses on Real Estate
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", the Joint
Venture recorded a valuation provision for
losses on its real estate asset of $9,277,433
as of December 31, 1997, these provisions
represent the difference between carrying
value and selling price less estimated costs
to sell as a result of the forthcoming sale of
the Joint Venture's property subsequent to
year end (see Note I). As this asset is held
for sale, the Joint Venture has discontinued
depreciation.
H.Federal Income Taxes
The reconciliation of the net income (loss) for each year
reported in the accompanying Statement of Operations with the
net income reported in the Joint Venture's federal income tax
return is as follows:
<TABLE>
<CAPTION>
1997 1996 1995
Net income (loss) per
<S> <C> <C> <C>
Statement of Operations$(8,029,040) $1,825,318 $1,817,435
Difference in book to tax
depreciation 784,586 624,845 573,232
Difference in book to tax
bad debt (21,428) 15,566 -
Difference in book to tax
fixed asset revaluation 8,886,565 - -
Rental adjustment required
by Generally Accepted
Accounting Principles 1,969 26,293 (18,176)
Net income for federal
income tax purposes $ 1,622,652 $2,492,022 $2,372,491
Continued
SPRING VALLEY PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS, Continued
H. Federal Income Taxes, Continued
The allocation of the 1997 net income for federal income tax
purposes is as follows:
Passive Portfolio
Income Income Total
Cash Plus-V
Limited Partnership $ 763,862 $ 25,915 $ 789,777
Berkshire Realty Company,
Inc. 806,856 26,019 832,875
$1,570,718 $ 51,934 $1,622,652
</TABLE>
The basis of the Joint Venture's assets for
financial reporting purposes is less than its
tax basis by approximately $16,543,000 and
$6,157,000 at December 31, 1997 and 1996,
respectively. The tax and book basis of the Joint
Venture's liabilities are the same.
I.Subsequent Event
The sale of the Joint Venture's property, as
discussed in Note A, was consummated on
January 30, 1998. The total selling price of
the fourteen properties was $138,000,000, of
which the Joint Venture Partners received
$29,571,700, less their share of the closing
costs.
The sale is considered a cause for dissolution
of the Joint Venture as defined by the
Partnership Agreement. Accordingly, the Joint
Venture Partners expect to liquidate and
distribute the remaining assets of the Joint
Venture in 1998. All distributions of net
cash proceeds from the sale and dissolution of
the Joint Venture shall be governed by Section
IV, Paragraph 17, of the Partnership
Agreement, as discussed above in
Note D.
SPRING VALLEY PARTNERSHIP
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1997
<TABLE>
<CAPTION>
Costs
Capitalized
Subsequent to
Initial Cost to Joint Venture Acquisition
Buildings & Buildings & Depreciable
Description Land Improvements Improvements Life
Spring Valley
<S> <C> <C> <C> <C>
Marketplace $10,403,471 $ 41,613,880 $ 2,018,8513 to 25 years
Gross Amounts Carried at
End of Year
Accumulated
Buildings Depreciation Year
and & Valuation
Construction Year
Description Land Improvements Total(a) Provision Completed Acquired
Spring Valley
Marketplace $10,403,471$ 43,632,731$54,036,202$ 25,327,070 1987 1988
Reconciliation of Real Estate and Accumulated Depreciation for
each of the three years in the period ended December 31, 1997:
Real Estate 1997 1996 1995
Balance at
beginning of year $53,828,582 $53,409,298 $53,129,983
Improvements 207,620 419,284 279,315
Balance at
end of year $54,036,202 $53,828,582 $53,409,298
Accumulated Depreciation
and Property Valuation 1997 1996 1995
Balance at
beginning of year $13,983,325 $12,084,310 $10,243,666
Property valuation 9,277,433 - -
Depreciation expense 2,066,312 1,899,015 1,840,644
Balance at end of year$25,327,070 $13,983,325 $12,084,310
</TABLE>
(a) The aggregate cost of the Joint Venture's
real estate for federal income tax purposes
was $53,170,799 and the aggregate accumulated
depreciation for federal income tax purposes
was $8,242,176 for the year ended December 31,
1997.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Cash Plus V
Financial Statements for the twelve months ended December 31, 1997 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 1,063,094<F1>
<SECURITIES> 628,909<F2>
<RECEIVABLES> 13,005
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,629
<PP&E> 15,173,853<F3>
<DEPRECIATION> 0
<TOTAL-ASSETS> 16,880,489
<CURRENT-LIABILITIES> 13,526
<BONDS> 0
0
0
<COMMON> 16,866,963<F4>
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 16,880,489
<SALES> 0
<TOTAL-REVENUES> 132,375
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,092,765<F5>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,960,390)<F6>
<EPS-PRIMARY> 0<F6>
<EPS-DILUTED> 0<F6>
<FN>
<F1>Includes cash and cash equivalents of $569,987 and investments in commercial
paper of $493,107.
<F2>Includes all receivables of the Partnership included in "Other Assets" on the
Balance Sheet.
<F3>Includes investment in Joint Venture.
<F4>Equity of General Partners ($122,972), Limited Partners $16,942,989 and
unrealized holding gain on MBS of $46,946.
<F5>Includes operating expenses of $2,086,274 and Partnership's share of Joint
Venture net loss of $4,006,491.
<F6>Net Loss allocated ($59,604) to General Partners and ($5,900,786) to the
Limited Partners. Net Loss per unit is ($2.86).
</FN>
</TABLE>
