<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 June 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
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Wells Real Estate Fund V, L.P.
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(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 350 Norcross, GA 30092
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770) 449-7800
--------------
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
-------- -------
1
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Form 10-Q
---------
Wells Real Estate Fund V, L.P.
------------------------------
INDEX
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Page No.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets - June 30, 2000
and December 31, 1999........................ 3
Statements of Income for the Three
Months and Six Months Ended June 30, 2000
and 1999..................................... 4
Statement of Partners' Capital
for the Year Ended December 31, 1999,
and the Six Months Ended June 30, 2000....... 5
Statements of Cash Flows for the Six Months
Ended June 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
2
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WELLS REAL ESTATE FUND V, L.P.
(a Georgia Public Limited Partnership)
BALANCE SHEETS
<TABLE>
<CAPTION>
Assets June 30, 2000 December 31, 1999
------ ------------- -----------------
<S> <C> <C>
Investment in joint ventures (Note 2) $11,886,464 $12,178,473
Cash and cash equivalents 22,970 21,620
Due from affiliates 311,291 299,144
----------- -----------
Total assets $12,220,725 $12,499,237
=========== ===========
Liabilities and Partners' Capital
---------------------------------
Liabilities:
Partnership distributions payable $ 293,709 $ 304,213
----------- -----------
Partners' capital:
Limited partners:
Class A - 1,566,416 units outstanding 11,927,016 12,195,024
Class B - 134,186 units outstanding 0 0
----------- -----------
Total partners' capital 11,927,016 12,195,024
----------- -----------
Total liabilities and partners' $12,220,725 $12,499,237
capital =========== ===========
</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 Six Months Ended
---------------------------------------- ------------------------------------------
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
------------------- ------------------- --------------------- -------------------
<S> <C> <C> <C> <C>
Revenues:
Equity in income of joint
ventures (Note 2) $181,660 $234,312 $317,403 $404,155
Interest income 66 315 189 945
-------- -------- -------- --------
181,726 234,627 317,592 405,100
-------- -------- -------- --------
Expenses:
Legal and accounting 2,743 7,992 15,525 13,732
Computer costs 3,426 1,861 6,493 4,681
Partnership administration 17,480 12,805 27,380 31,475
-------- -------- -------- --------
23,649 22,658 49,398 49,888
-------- -------- -------- --------
Net income $158,077 $211,969 $268,194 $355,212
======== ======== ======== ========
Net income allocated to Class A
Limited Partners $158,077 $211,969 $268,194 $355,212
Net loss allocated to Class B
Limited Partners $ 0 $ 0 $ 0 $ 0
Net income per Class A Limited
Partner Unit $ 0.10 $ 0.14 $ 0.17 $ 0.23
Net loss per Class B Limited Partner
Unit $ 0 $ 0 $ 0 $ 0
Cash distribution per Class A
Limited Partner Unit $ 0.19 $ 0.19 $ 0.34 $ 0.38
</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 SIX MONTHS ENDED
JUNE 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 0 268,194 0 0 0 268,194
Partnership distributions 0 (536,202) 0 0 0 (536,202)
--------- ----------- ------- -- -- -----------
BALANCE, June 30, 2000 1,566,416 $11,927,016 134,186 $0 $0 $11,927,016
========= =========== ======= == == ===========
</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>
Six Months Ended
---------------------------------------------
June 30, 2000 June 30, 1999
------------- -------------
<S> <C> <C>
Cash flow from operating activities:
Net income $ 268,194 $ 355,212
Adjustments to reconcile net income to net
cash used in operating activities:
Equity in income of joint venture (317,403) (404,155)
Changes in assets and liabilities:
Decrease in accounts payable 0 (4,274)
--------- ---------
Net cash used in operating
activities (49,209) (53,217)
--------- ---------
Cash flow from investing activities:
Distributions received from joint
ventures 597,265 606,906
Investment in joint ventures 0 (17,357)
--------- ---------
Net cash provided by investing
activities 597,265 589,549
--------- ---------
Cash flow from financing activities:
Partnership distributions paid (546,706) (557,726)
--------- ---------
Net increase (decrease) in cash
and cash equivalents 1,350 (21,394)
Cash and cash equivalents, beginning of year 21,620 63,998
--------- ---------
Cash and cash equivalents, end of period $ 22,970 $ 42,604
========= =========
</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 June 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
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(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 form 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 June 30, 2000, the properties owned by the Partnership were 94%
occupied as compared to 89% occupied as of June 30, 1999. Gross revenues
were $317,592 for the six months and $181,726 for the three months ended
June 30, 2000, as compared to $405,100 for the six months and $234,627 for
the three months ended June 30, 1999 due to decreased equity in income of
joint ventures resulting from major repairs at IBM Jacksonville during
8
<PAGE>
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 remained relatively stable for both the three and six
month periods. As a result of decreased revenue, net income decreased to
$268,194 from $355,212 for the six months ended June 30, 2000 and 1999
respectively and decreased to $158,077 from $211,969 for the three months
ended June 30, 2000 and 1999.
Net cash used in operating activities decreased to $49,209 for the six
months ended June 30, 2000 from $53,217 for the same period in 1999, due to
decreased expenditures in accounts payables. Net cash provided by
investing activities increased in 2000, due primarily to decreased
investment in joint ventures. Partnership distributions decreased to
$546,706 in 2000, as compared to $557,726 in 1999. These changes produced
cash and cash equivalents of $42,604 and $22,970 at June 30, 1999, and
2000, 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 June 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 June 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 Six Months Ended
------------------------------ ---------------------------------
June 30, 2000 June 30, 1999 June 30, 2000 June 30,1999
-------------- -------------- -------------- -----------------
<S> <C> <C> <C> <C>
Revenues:
Rental Income $242,762 $242,754 $485,525 $485,508
-------- -------- -------- --------
Expenses:
Depreciation 87,647 87,647 175,293 175,293
Management & leasing expenses 2,360 6,443 4,721 22,687
Other operating expenses 6,463 2,865 11,429 10,411
-------- -------- -------- --------
96,470 96,955 191,443 208,391
-------- -------- -------- --------
Net income $146,292 $145,799 $294,082 $277,117
======== ======== ======== ========
Occupied % 100% 100% 100% 100%
Partnership Ownership % in the
Fund V-VI-VII Joint Venture 16.5% 16.5% 16.5% 16.5%
Cash Distribution to Partnership $ 38,860 $ 38,780 $ 77,966 $ 75,176
Net Income Allocated to the
Partnership $ 24,080 $ 23,999 $ 48,406 $ 45,614
</TABLE>
Rental income remained stable for the six months ended June 30, 2000, as
compared to the six months ended June 30, 1999.
Management and leasing fees decreased for the six months ended June 30,
2000, as compared to the same period last year 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.
Operating expenses increased due primarily to increases in administrative
salary.
10
<PAGE>
IBM Jacksonville /Fund IV - Fund V Joint Venture
------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------ ---------------------------------
June 30, 2000 June 30, 1999 June 30, 2000 June 30,1999
-------------- -------------- -------------- -----------------
<S> <C> <C> <C> <C>
Revenues:
Rental Income $361,564 $376,096 $721,944 $740,482
-------- -------- -------- --------
Expenses:
Depreciation 80,193 79,524 160,386 159,048
Management & leasing expenses 46,016 55,114 92,118 104,899
Other operating expenses 114,743 54,045 267,719 169,022
-------- -------- -------- --------
240,952 188,683 520,223 432,969
-------- -------- -------- --------
Net income $120,612 $187,413 $201,721 $307,513
======== ======== ======== ========
Occupied % 94% 94% 94% 94%
Partnership Ownership % 62.3% 62.4% 62.3% 62.4%
Cash Distribution to Partnership $141,404 $171,177 $243,109 $307,783
Net Income Allocated to the
Partnership $ 75,182 $116,994 $125,739 $191,966
</TABLE>
Rental income decreased 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 increase in the areas of repairs and maintenance of the
irrigation system, the parking lot lighting and some common areas in the
building.
Net income allocated to the Partnership decreased for the six months ended
June 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 Six Months Ended
------------------------------ ---------------------------------
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
-------------- -------------- -------------- -----------------
<S> <C> <C> <C> <C>
Revenues:
Rental Income $145,948 $121,106 $281,099 $265,684
Interest Income 2,339 2,404 3,470 2,979
-------- -------- -------- --------
148,287 123,510 284,569 268,663
-------- -------- -------- --------
Expenses:
Depreciation 47,001 44,524 93,058 89,048
Management & leasing expenses 11,844 14,114 31,627 31,887
Other operating expenses 52,254 31,696 116,915 77,100
-------- -------- -------- --------
111,099 90,334 241,600 198,035
-------- -------- -------- --------
Net income $ 37,188 $ 33,176 $ 42,969 $ 70,628
======== ======== ======== ========
Occupied % 82% 50% 82% 50%
Partnership Ownership % 62.3% 62.4% 62.3% 62.4%
Cash Distribution to Partnership $ 54,416 $ 46,294 $ 77,079 $ 91,966
Net Income Allocated to the
Partnership $ 23,179 $ 20,710 $ 26,783 $ 44,090
</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 increased in 2000 over 1999 due to a substantial increase
in repairs and maintenance costs associated with common area floor space.
As a result of these expenses, net income decreased for the six months ended
June 30, 2000, as compared to the same period in 1999. 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
12
<PAGE>
The Hartford Building/Fund V - Fund VI Joint Venture
----------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------ ---------------------------------
June 30, 2000 June 30, 1999 June 30, 2000 June 30,1999
-------------- -------------- -------------- -----------------
<S> <C> <C> <C> <C>
Revenues:
Rental Income $179,375 $179,375 $358,750 $358,750
-------- -------- -------- --------
Expenses:
Depreciation 73,008 73,008 146,016 146,016
Management & leasing expenses 7,242 7,242 14,484 14,484
Other operating expenses 4,888 (456) 9,005 4,863
-------- -------- -------- --------
85,138 79,794 169,505 165,363
-------- -------- -------- --------
Net income $ 94,237 $ 99,581 $189,245 $193,387
======== ======== ======== ========
Occupied % 100% 100% 100% 100%
Partnership Ownership % in the
Fund V-VI Joint Venture 46.4% 46.4% 46.4% 46.4%
Cash Distribution to Partnership $ 78,384 $ 80,922 $157,126 $159,235
Net Income Allocated to the
Partnership $ 43,729 $ 46,242 $ 87,815 $ 89,843
</TABLE>
Net income decreased and expenses increased for the three and six months
ended June 30, 2000, as compared to 1999, due primarily to a greater
insurance reimbursement from the tenant in 1999, which was recorded in the
second quarter of 1999, in other operating expenses.
13
<PAGE>
Stockbridge Village II/Fund V - Fund VI Joint Venture
-----------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------ ---------------------------------
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
-------------- -------------- -------------- -----------------
<S> <C> <C> <C> <C>
Revenues:
Rental Income $77,855 $95,902 $155,504 $155,310
------- ------- -------- --------
Expenses:
Depreciation 26,241 25,992 52,482 51,735
Management & leasing expenses 9,986 10,120 19,613 17,009
Other operating expenses 8,246 3,008 21,646 16,283
------- ------- -------- --------
44,473 39,120 93,741 85,027
------- ------- -------- --------
Net income $33,382 $56,782 $ 61,763 $ 70,283
======= ======= ======== ========
Occupied % 100% 100% 100% 100%
Partnership Ownership % in the
Fund V-VI Joint Venture 46.4% 46.4% 46.4% 46.4%
Cash Distribution to Partnership $28,226 $37,017 $ 54,132 $ 50,440
Net Income Allocated to the
Partnership $15,490 $26,368 $ 28,660 $ 32,643
</TABLE>
Rental income is stable for the six months ended June 30, 2000, as compared
to 1999, while it was lower for the three months ended June 30, 2000, due
to a catch up in rental billing on a new tenant in second quarter of 1999.
Expenses were higher in 2000, due primarily to expenditures for parking lot
repairs in the second quarter of 2000.
14
<PAGE>
PART II - OTHER INFORMATION
---------------------------
ITEM 6 (b). No reports on Form 8-K were filed during the second 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: August 11, 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
