<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 September 30, 2000 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 0-21580
---------------------------------
Wells Real Estate Fund V, L.P.
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-1936904
-------------------------------------- -----------------
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification no.)
6200 The Corners Parkway, Suite 250, Norcross, Georgia 30092
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770) 449-7800
--------------
--------------------------------------------------------------------------------
(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
----- -----
1
<PAGE>
Form 10-Q
---------
Wells Real Estate Fund V, L.P.
------------------------------
INDEX
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<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets - September 30, 2000 and December 31,
1999................................................. 3
Statements of Income for the Three Months and the Nine
Months Ended September 30, 2000 and 1999............. 4
Statement of Partners' Capital for the Year Ended
December 31, 1999, and the Nine Months Ended
September 30, 2000................................... 5
Statements of Cash Flows for the Nine Months Ended
September 30, 2000 and 1999.......................... 6
Condensed Notes to Financial Statements............... 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................... 8
PART II. OTHER INFORMATION............................................... 15
</TABLE>
2
<PAGE>
WELLS REAL ESTATE FUND V, L.P.
(a Georgia Public Limited Partnership)
BALANCE SHEETS
<TABLE>
<CAPTION>
Assets September 30, 2000 December 31, 1999
------ ------------------ -----------------
<S> <C> <C>
Investment in joint ventures (Note 2) $11,762,401 $12,178,473
Cash and cash equivalents 64,937 21,620
Due from affiliates 265,715 299,144
----------- -----------
Total assets $12,093,053 $12,499,237
=========== ===========
Liabilities and Partners' Capital
---------------------------------
Liabilities:
Partnership distributions payable $ 294,100 $ 304,213
----------- -----------
Partners' capital:
Limited partners
Class A - 1,566,416 units outstanding 11,798,953 12,195,024
Class B - 134,186 units outstanding 0 0
----------- -----------
Total partners' capital 11,798,953 12,195,024
----------- -----------
Total liabilities and partners' capital $12,093,053 $12,499,237
=========== ===========
</TABLE>
See accompanying condensed notes to financial statements.
3
<PAGE>
WELLS REAL ESTATE FUND V, L.P.
(a Georgia Public Limited Partnership)
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------- -----------------
Sept 30, 2000 Sept 30, 1999 Sept 30, 2000 Sept 30, 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Interest income $ 4,408 $ 287 $ 4,597 $ 1,232
Equity in income of joint ventures
(Note 2) 171,653 122,488 489,056 526,644
------- ------- ------- -------
176,061 122,775 493,653 527,876
------- ------- ------- -------
Expenses:
Legal and accounting 300 200 15,825 13,932
Computer costs 2,354 2,559 8,847 7,240
Partnership administration 7,370 10,761 34,750 42,237
------- ------- ------- -------
10,024 13,520 59,422 63,409
------- ------- ------- -------
Net income $ 166,037 $ 109,255 $ 434,231 $ 464,467
======= ======= ======= =======
Net income allocated to Class A Limited $ 166,037 $ 109,255 $ 434,231 $ 464,467
Partners
Net loss allocated to Class B Limited $ 0 $ 0 $ 0 $ 0
Partners
Net income per Class A Limited $ 0.11 $ 0.07 $ 0.28 $ 0.30
Partner Unit
Net loss per Class B Limited Partner $ 0 $ 0 $ 0 $ 0
Unit
Cash distribution per Class A Limited
Partner Unit $ 0.19 $ 0.19 $ 0.53 $ 0.57
</TABLE>
See accompanying condensed notes to financial statements.
4
<PAGE>
WELLS REAL ESTATE FUND V, L.P.
(a Georgia Public Limited Partnership)
STATEMENTS OF PARTNERS' CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 1999 AND THE NINE MONTHS ENDED
SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
Limited Partners
------------------------------------------
Class A Class B Total
------------------------ ---------------- General Partners'
Units Amount Units Amount Partners Capital
--------- ------------- -------- ------ -------- ------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, December 31, 1998 1,559,021 $12,760,313 141,581 $0 $0 $12,760,313
Net income 0 625,679 0 0 0 625,679
Partnership distributions 0 (1,190,968) 0 0 0 (1,190,968)
Class B conversion elections 7,395 0 (7,395) 0 0 0
--------- ----------- ------- -- -- -----------
BALANCE, December 31, 1999 1,566,416 12,195,024 134,186 0 0 12,195,024
Net income 0 434,231 0 0 0 434,231
Partnership distributions 0 (830,302) 0 0 0 (830,302)
--------- ----------- ------- -- -- -----------
BALANCE, September 30, 2000 1,566,416 $11,798,953 134,186 $0 $0 $11,798,953
========= =========== ======= == == ===========
</TABLE>
See accompanying condensed notes to financial statements.
5
<PAGE>
WELLS REAL ESTATE FUND V, L.P.
(a Georgia Public Limited Partnership)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
-----------------
Sept 30, 2000 Sept 30, 1999
------------- -------------
<S> <C> <C>
Cash flow from operating activities:
Net income $ 434,231 $ 464,467
Adjustments to reconcile net income to net
cash used in operating activities:
Equity in income of joint venture (489,056) (526,644)
Changes in assets and liabilities:
Accounts payable 0 (4,274)
--------- ----------
Net cash used in operating activities (54,825) (66,451)
--------- ----------
Cash flow from investing activities:
Distributions received from joint ventures 938,556 1,000,276
Investment in joint ventures 0 (69,930)
--------- ----------
Net cash provided by investing activities 938,556 930,346
--------- ----------
Cash flow from financing activities:
Partnership distributions paid (840,414) (860,074)
--------- ----------
Net increase in cash and cash equivalents 43,317 3,821
Cash and cash equivalents, beginning of year 21,620 63,998
--------- ----------
Cash and cash equivalents, end of period $ 64,937 $ 67,819
========= ==========
</TABLE>
See accompanying condensed notes to financial statements.
6
<PAGE>
WELLS REAL ESTATE FUND V, L.P
(A Georgia Public Limited Partnership)
Condensed Notes to Financial Statements
(1) Summary of Significant Accounting Policies
------------------------------------------
(a) General
-----------
Wells Real Estate Fund V, L.P. ("the Partnership") is a Georgia public
limited partnership having Leo F. Wells, III and Wells Partners, L.P., as
General Partners. The Partnership was formed on October 25, 1990, for the
purpose of acquiring, developing, owning, operating, improving, leasing,
and otherwise managing for investment purposes income producing commercial
or industrial properties.
On March 6, 1992, the Partnership commenced an offering of up to
$25,000,000 of Class A or Class B limited partnership units ($10.00 per
unit) pursuant to a Registration Statement on Form S-11 filed under the
Securities Act of 1933. The Partnership did not commence active operations
until it received and accepted subscriptions for a minimum of 125,000 units
on April 27, 1992. The offering was terminated on March 3, 1993, at which
time the Partnership had sold 1,520,967 Class A Units and 179,635 Class B
Units representing $17,006,020 of capital contributions by investors who
were admitted to the Partnership as Limited Partners.
The Partnership owns interests in properties through its equity ownership
in the following joint ventures: (i) Fund IV and Fund V Associates, a joint
venture between the Partnership and Wells Real Estate Fund IV, L.P. (the
"Fund IV - Fund V Joint Venture"); (ii) Fund V and Fund VI Associates, a
joint venture between the Partnership and Wells Real Estate Fund VI, L.P.
(the "Fund V - Fund VI Joint Venture"); and (iii) Fund V, Fund VI, and Fund
VII Associates, a joint venture between the Partnership, Wells Real Estate
Fund VI, L.P. and Wells Real Estate Fund VII, L.P. (the "Fund V-VI-VII
Joint Venture").
As of September 30, 2000, the Partnership owned interests in the following
properties through its ownership in the foregoing joint ventures: (i) a
four-story office building located in Jacksonville, Florida ("IBM
Jacksonville"), which is owned by the Fund IV - Fund V Joint Venture; (ii)
two substantially identical two-story office buildings located in Clayton
County, Georgia (the "Village Overlook"), which are owned by the Fund IV -
Fund V Joint Venture; (iii) a four-story office building located in
metropolitan Hartford, Connecticut (the "Hartford Building"), which is
owned by the Fund V - Fund VI Joint Venture; (iv) two retail buildings
located in Clayton County, Georgia ("Stockbridge Village II"), which are
owned by the Fund V - Fund VI Joint Venture; and (v) a three-story office
building located in Appleton, Wisconsin (the "Marathon Building"), which is
owned by the Fund V-VI-VII Joint Venture. All of the foregoing properties
were acquired on an all cash basis. For further information regarding
these joint ventures and properties, refer to the Partnership's Form 10-K
for the year ended December 31, 1999.
7
<PAGE>
(B) Basis of Presentation
-------------------------
The financial statements of the Partnership have been prepared in
accordance with instructions to Form 10-Q and do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. These quarterly statements
have not been examined by independent accountants, but in the opinion of
the General Partners, the statements for the unaudited interim periods
presented include all adjustments, which are of a normal and recurring
nature, necessary to present a fair presentation of the results for such
periods. For further information, refer to the financial statements and
footnotes included in the Partnership's Form 10-K for year ended December
31, 1999.
(2) Investment in Joint Ventures
----------------------------
The Partnership owns interests in five properties through its investment in
joint ventures of which four are office building properties and one is a
retail property. The Partnership does not have control over the operations
of the joint ventures; however, it does exercise significant influence.
Accordingly, investment in joint ventures is recorded on the equity method.
For further information, refer to the financial statements and footnotes
included in the Partnership's Form 10-K for the year ended December 31,
1999.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
------------------------------------------------------------------------
RESULTS OF OPERATIONS.
----------------------
The following discussion and analysis should be read in conjunction with
the accompanying financial statements of the Partnership and notes thereto.
This Report contains forward-looking statements, within the meaning of
Section 27A of the Securities Act of 1933 and 21E of the Securities
Exchange Act of 1934, including discussion and analysis of the financial
condition of the Partnership, anticipated capital expenditures required to
complete certain projects, amounts of cash distributions anticipated to be
distributed to Limited Partners in the future and certain other matters.
Readers of this Report should be aware that there are various factors that
could cause actual results to differ materially from any forward-looking
statement made in this Report, which include construction costs which may
exceed estimates, construction delays, lease-up risks, inability to obtain
new tenants upon expiration of existing leases, and the potential need to
fund tenant improvements or other capital expenditures out of operating
cash flow.
Results of Operations and Changes in Financial Conditions
---------------------------------------------------------
General
-------
As of September 30, 2000, the properties owned by the Partnership were 94%
occupied as compared to 91% occupied as of September 30, 1999. Gross
revenues of the Partnership were $493,653 for the nine months and $176,061
for the three months ended September 30, 2000, as compared to $527,876 and
$122,775 for the same periods in 1999, respectively. Gross revenues and
net income have decreased for the nine months ended September 30,
8
<PAGE>
2000, over the same period in 1999, due primarily to decreased equity in
income of joint ventures resulting from major repairs at IBM Jacksonville
during the first and second quarters of 2000 and lower common area tenant
reimbursements during 2000, as compared to 1999. Total expenses of the
Partnership have decreased slightly for the nine month period. As a result
of decreased revenue, net income decreased to $434,231 from $464,467 for
the nine months ended September 30, 2000 and 1999 respectively. Total
revenue increased and expenses decreased for the three months ended
September 30, 2000, as compared to the same period of 1999, resulting in
increased net income of $166,037 as compared to $109,255. This three month
increase is due to increased interest income, equity in income of joint
ventures because of decreased repair costs at IBM Jacksonville for the
quarter and lower partnership administrative expenses.
Net cash used in operating activities decreased to $54,825 for the nine
months ended September 30, 2000 from $66,451 for the same period in 1999,
due to decreased expenses, decreased accounts payable and increased
interest income. Net cash provided by investing activities increased in
2000, due primarily to decreased investment in joint ventures. Partnership
distribution decreased to $840,414 in 2000, as compared to $860,074 in
1999. These changes produced cash and cash equivalents of $64,937 and
$67,819 at September 30, 2000 and 1999, respectively.
The Partnership made cash distributions to the Limited Partners holding
Class A Units of $.19 per Class A Unit for the three months ended September
30, 2000, and for the same period in 1999. No cash distributions were
made to the Limited Partners holding Class B Units or to the General
Partners.
The Partnership expects to continue to meet its short-term liquidity
requirements and budget demands generally through net cash provided by
operations which the Partnership believes will continue to be adequate to
meet both operating requirements and distributions to Limited Partners. At
this time, given the nature of the joint ventures in which the Partnership
has invested, there are no known improvements and renovations to the
properties expected to be funded from cash flow from operations.
9
<PAGE>
Property Operations
-------------------
As of September 30, 2000, the Partnership owned interests in the following
operational properties:
The Marathon Building/Fund V-VI-VII Joint Venture
-------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------------ ------------------------------
Sept 30, 2000 Sept 30, 1999 Sept 30, 2000 Sept 30, 1999
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues:
Rental Income $242,763 $243,182 $728,288 $728,690
-------- -------- -------- --------
Expenses:
Depreciation 87,646 87,646 262,939 262,939
Management & leasing expenses 2,361 14,627 7,082 37,314
Other operating expenses 3,555 4,181 14,984 14,592
-------- -------- -------- --------
93,562 106,454 285,005 314,845
-------- -------- -------- --------
Net income $149,201 $136,728 $443,283 $413,845
======== ======== ======== ========
Occupied % 100% 100% 100% 100%
Partnership's Ownership % in the
Fund V-VI-VII Joint Venture 16.5% 16.5% 16.5% 16.5%
Cash Distribution to Partnership $ 39,339 $ 37,219 $117,305 $112,396
Net Income Allocated to the
Partnership $ 24,558 $ 22,505 $ 72,964 $ 68,119
</TABLE>
Rental income remained stable for the nine months and the three months ended
September 30, 2000, as compared to the nine months and the three months ended
September 30, 1999.
Management and leasing fees decreased for both the three months and nine months
ended September 30, 2000, as compared to the same periods in 1999, due to a
lower rate charged starting October, 1999. The management and leasing agreement
reduces fees to 1% after five years on triple-net leases of ten years or more.
As a result, net income and cash distribution to the Partnership increased.
10
<PAGE>
IBM Jacksonville /Fund IV - Fund V Joint Venture
------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
----------------------------- -----------------------------
Sept 30, 2000 Sept 30, 1999 Sept 30, 2000 Sept 30, 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental Income $358,046 $370,168 $1,079,990 $1,110,650
-------- -------- ---------- ----------
Expenses:
Depreciation 80,193 80,089 240,579 239,137
Management & leasing expenses 61,518 51,529 153,636 156,428
Other operating expenses 99,869 113,362 367,588 282,384
-------- -------- ---------- ----------
241,580 244,980 761,803 677,949
-------- -------- ---------- ----------
Net income $116,466 $125,188 $ 318,187 $ 432,701
======== ======== ========== ==========
Occupied % 94% 94% 94% 94%
Partnership's Ownership % 62.3% 62.4% 62.3% 62.4%
Cash Distribution to Partnership $138,821 $140,136 $ 381,930 $ 447,918
Net Income Allocated to the
Partnership $ 72,597 $ 78,150 $ 198,336 $ 270,116
</TABLE>
Rental income for the IBM Jacksonville Property decreased slightly in 2000, as
compared to 1999, even though occupancy remained the same due to holdover rent
from 1998 received in 1999 from a tenant subleasing space from IBM. Operating
expenses increased in 2000, due to substantial increases in the areas of
repairs and maintenance of the irrigation system, the parking lot lighting and
some common areas in the building and decreased common area tenant
reimbursements during the first and second quarters of 2000.
Net income allocated to the Partnership decreased for the nine months ended
September 30, 2000, as compared to the same period in 1999, due primarily to
increased repairs and maintenance costs. Cash distributions decreased for 2000
compared to 1999, due to capital improvements funded from cash flow and
decreased net income. Wells Fund IV contributed cash fundings to the Joint
Venture for tenant improvements and this decreased the Partnership's ownership
interest in the Fund IV - Fund V Joint Venture.
11
<PAGE>
The Village Overlook Property/Fund IV - Fund V Joint Venture
------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
----------------------------- -----------------------------
Sept 30, 2000 Sept 30, 1999 Sept 30, 2000 Sept 30, 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental income $137,937 $ 75,057 $419,036 $340,741
Interest income 3,568 4,224 7,038 7,203
-------- -------- -------- --------
141,505 79,281 426,074 347,944
-------- -------- -------- --------
Expenses:
Depreciation 46,907 44,871 139,965 133,919
Management & leasing expenses 13,872 8,609 45,499 40,496
Other operating expenses 60,894 79,241 177,809 156,341
-------- -------- -------- --------
121,673 132,721 363,273 330,756
-------- -------- -------- --------
Net income (loss) $ 19,832 $(53,440) $ 62,801 $ 17,188
======== ======== ======== ========
Occupied % 80% 62% 80% 62%
Partnership's Ownership % 62.3% 62.4% 62.3% 62.4%
Cash Distribution to Partnership $ 8,031 $ 0 $ 85,110 $ 85,868
Net Income (Loss) Allocated to the
Partnership $ 12,364 $(33,361) $ 39,147 $ 10,729
</TABLE>
Rental income for the Village Overlook Property increased in 2000, over 1999,
due primarily to an increase in the occupancy level of the property. Operating
expenses for the nine months ended September 30, 2000, increased over the same
period in 1999 due to a substantial increase in repairs and maintenance costs
associated with common area floor space. Net income increased for the nine
months ended September 30, 2000, as compared to the same period in 1999, due
primarily to the increase in rental income. Rental income increased for the
three months ended September 30, 2000, as compared to the same period in 1999,
due to the increased occupancy level of the property. Total expenses decreased
for the three month period ended September 30, 2000, as compared to the same
period for 1999 due largely to the decrease in operating expenses. Cash
distributions and net income allocated to the Partnership increased for the
three month period increased for the period ended September 30, 2000, over the
same period in 1999.
Even though net income increased, cash distributions remained stable for the
nine months ended September 30, 2000, as compared to the same period in 1999.
This was due to capital improvements being funded from cash flow. Wells Fund IV
contributed cash fundings to the Joint Venture for tenant improvements and this
decreased the Partnership's ownership interest in the Fund IV - Fund V Joint
Venture.
12
<PAGE>
The Hartford Building/Fund V - Fund VI Joint Venture
----------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
----------------------------- -----------------------------
Sept 30, 2000 Sept 30, 1999 Sept 30, 2000 Sept 30, 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental Income $179,374 $179,374 $538,124 $538,124
-------- -------- -------- --------
Expenses:
Depreciation 73,008 73,008 219,024 219,024
Management & leasing expenses 7,407 7,242 21,891 21,726
Other operating expenses (1,595) 2,643 7,410 7,506
-------- -------- -------- --------
78,820 82,893 248,325 248,256
-------- -------- -------- --------
Net income $100,554 $ 96,481 $289,799 $289,868
======== ======== ======== ========
Occupied % 100% 100% 100% 100%
Partnership's Ownership % in the
Fund V - Fund VI Joint Venture 46.4% 46.4% 46.4% 46.4%
Cash Distribution to Partnership $ 81,315 $ 79,464 $238,441 $238,699
Net Income Allocated to the
Partnership $ 46,661 $ 44,791 $134,476 $134,634
</TABLE>
Net income increased and expenses decreased for the three months ended September
30, 2000, as compared to 1999, due primarily to timing difference in insurance
reimbursement from the tenant, which was recorded in the second quarter of 1999,
but in the third quarter of 2000.
13
<PAGE>
Stockbridge Village II/Fund V - Fund VI Joint Venture
-----------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
----------------------------- -----------------------------
Sept 30, 2000 Sept 30, 1999 Sept 30, 2000 Sept 30, 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Rental Income $77,992 $75,654 $233,496 $230,964
------- ------- -------- --------
Expenses:
Depreciation 26,241 26,304 78,723 78,039
Management & leasing expenses 8,923 9,921 28,536 26,930
Other operating expenses 9,482 17,021 31,128 33,304
------- ------- -------- --------
44,646 53,246 138,387 138,273
------- ------- -------- --------
Net income $33,346 $22,408 $ 95,109 $ 92,691
======= ======= ======== ========
Occupied % 100% 100% 100% 100%
Partnership's Ownership % in the
Fund V - Fund VI Joint Venture 46.4% 46.4% 46.4% 46.4%
Cash Distribution to Partnership $28,209 $20,611 $ 82,341 $ 71,051
Net Income Allocated to the
Partnership $15,473 $10,403 $ 44,133 $ 43,046
</TABLE>
Rental income and net income are relatively stable for the nine months ended
September 30, 2000, as compared to the same period in 1999. Operating expenses
are lower for the three months ended September 30, 2000, as compared to the same
period in 1999, due to timing differences in vendor invoicing of various
operating expenses. Cash distributions are greater in 2000, due primarily to
lease acquisition fees paid in 1999, which lowered the cash available for
distribution in 1999.
14
<PAGE>
PART II - OTHER INFORMATION
---------------------------
ITEM 6 (b). No reports on Form 8-K were filed during the third quarter of 2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
WELLS REAL ESTATE FUND V, L.P.
Dated: November 10, 2000 By:/s/ Leo F. Wells, III
------------------------------------
Leo F. Wells, III, as Individual
General Partner and as President,
Sole Director and Chief Financial
Officer of Wells Capital, Inc., the
General Partner of Wells Partners, L.P.
15
