UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the period ended March 31, 1995 ------------------------------------------- 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 0-8229 MCNEIL REAL ESTATE FUND V, LTD. -------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) California 94-6356980 --------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 13760 Noel Road, Suite 700, LB70, Dallas, Texas 75240 --------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (214) 448-5800 ----------------------- 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 and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- ---- MCNEIL REAL ESTATE FUND V, LTD. PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS BALANCE SHEETS (Unaudited) March 31, December 31, ------------------------------- 1995 1994 ----------- ----------- ASSETS Real estate investments: Land..................................................... $11,022,353 $11,022,353 Buildings and improvements............................... 8,858,304 8,799,260 --------- --------- 19,880,657 19,821,613 Less: Accumulated depreciation.......................... (6,023,303) (5,897,942) ---------- ---------- 13,857,354 13,923,671 Cash and cash equivalents................................... 1,811,860 1,799,590 Cash segregated for security deposits....................... 145,882 145,245 Accounts receivable......................................... 2,203 4,326 Prepaid expenses and other asset............................ 63,011 31,953 Deferred borrowing costs (net of accumulated amortization of $22,504 and $20,326 at March 31, 1995 and December 31, 1994, respectively)............................................ 238,829 241,007 ---------- ---------- $16,119,139 $16,145,792 ========== ========== LIABILITIES AND PARTNERS' EQUITY Mortgage note payable....................................... $11,392,947 $11,424,420 Accounts payable............................................ 63,103 70,538 Accrued interest............................................ 68,836 63,663 Accrued expenses............................................ 36,270 21,617 Payable to affiliates - General Partner..................... 16,406 17,212 Security deposits and deferred rental income................ 149,100 147,926 ---------- ---------- 11,726,662 11,745,376 ---------- ---------- Partners' equity: Limited partners - 20,000 limited partnership units authorized; 18,223 limited partnership units outstanding...................................... 4,375,492 4,383,431 General Partner.......................................... 16,985 16,985 ---------- ---------- 4,392,477 4,400,416 ---------- ---------- $16,119,139 $16,145,792 ========== ========== The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. MCNEIL REAL ESTATE FUND V, LTD. STATEMENTS OF INCOME (Unaudited) Three Months Ended March 31, ----------------------------- 1995 1994 ---------- --------- Revenue: Rental revenue................................... $1,035,205 $930,681 Interest......................................... 25,899 12,443 --------- ------- Total revenue.................................. 1,061,104 943,124 --------- ------- Expenses: Interest......................................... 203,705 193,236 Depreciation..................................... 125,361 110,853 Property taxes................................... 60,186 64,761 Personnel expense................................ 90,850 86,553 Utilities........................................ 81,557 77,180 Repairs and maintenance.......................... 89,755 105,054 Property management fees - affiliates............ 51,777 46,736 Other property operating expenses................ 58,740 51,178 General and administrative....................... 7,104 8,884 Partnership management fee....................... 15,000 15,000 ------ ------- Total expenses................................. 784,035 759,435 ------- ------- Net income.......................................... $277,069 $ 183,689 ======= ======= Net income allocable to limited partners............ $277,069 $ 183,689 Net income allocable to General Partner............. - - ------- ------- Net income.......................................... $277,069 $ 183,689 ======= ======= Net income per limited partnership unit............. $ 15.20 $ 10.08 ======= ======== Distributions per limited partnership unit.......... $ 15.64 $ 15.64 ======= ======== The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. MCNEIL REAL ESTATE FUND V, LTD. STATEMENTS OF PARTNERS' EQUITY (Unaudited) For the Three Months Ended March 31, 1995 and 1994 Total General Limited Partners' Partner Partners Equity --------- --------- ---------- Balance at December 31, 1993.............. $16,985 $3,978,206 $3,995,191 Net income................................ - 183,689 183,689 Distributions............................. - (285,004) (285,004) ------ --------- --------- Balance at March 31, 1994................. $16,985 $3,876,891 $3,893,876 ====== ========= ========= Balance at December 31, 1994.............. $16,985 $4,383,431 $4,400,416 Net income................................ - 277,069 277,069 Distributions............................. - (285,008) (285,008) ------ --------- --------- Balance at March 31, 1995................. $16,985 $4,375,492 $4,392,477 ====== ========= ========= The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. MCNEIL REAL ESTATE FUND V, LTD. STATEMENTS OF CASH FLOWS (Unaudited) Increase (Decrease) in Cash and Cash Equivalents Three Months Ended March 31, ---------------------------------- 1995 1994 ---------- --------- Cash flows from operating activities: Cash received from tenants........................ $1,035,443 $ 934,435 Cash paid to suppliers............................ (349,424) (364,945) Cash paid to affiliates........................... (67,583) (65,985) Interest received................................. 25,899 12,443 Interest paid..................................... (196,354) (252,081) Property taxes paid............................... (60,186) (64,761) ------- ------- Net cash provided by operating activities............ 387,795 199,106 ------- ------- Net cash used in investing activities: Additions to real estate investments.............. (59,044) (45,798) ------- ------- Cash flows from financing activities: Principal payments on mortgage note payable....... (31,473) (89,379) Distributions..................................... (285,008) (285,004) -------- -------- Net cash used in financing activities................ (316,481) (374,383) -------- -------- Net increase (decrease) in cash and cash equivalents....................................... 12,270 (221,075) Cash and cash equivalents at beginning of year.............................................. 1,799,590 1,542,656 --------- --------- Cash and cash equivalents at end of year............. $1,811,860 $1,321,581 ========= ========= The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. MCNEIL REAL ESTATE FUND V, LTD. STATEMENTS OF CASH FLOWS (Unaudited) Reconciliation of Net Income to Net Cash Provided by Operating Activities Three Months Ended March 31, -------------------------------- 1995 1994 -------- -------- Net income........................................... $277,069 $183,689 ------- ------- Adjustments to reconcile net income to net cash provided by operating activities: Depreciation...................................... 125,361 110,853 Amortization of deferred borrowing costs.......... 2,178 4,356 Changes in assets and liabilities: Cash segregated for security deposits........... (637) (420) Accounts receivable............................. 2,123 5,319 Prepaid expenses and other assets............... (31,058) (60,623) Accounts payable................................ (7,435) 266 Accrued interest................................ 5,173 (63,201) Accrued expenses................................ 14,653 15,018 Payable to affiliates - General Partner......... (806) (4,249) Security deposits and deferred rental income........................................ 1,174 8,098 ------- ------- Total adjustments............................. 110,726 15,417 ------- ------- Net cash provided by operating activities............ $387,795 $199,106 ======= ======= The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. McNEIL REAL ESTATE FUND V, LTD. Notes to Financial Statements (Unaudited) March 31, 1995 NOTE 1. - ------- McNeil Real Estate Fund V, Ltd. (the "Partnership") was organized September 12, 1974 as a limited partnership under the provisions of the California Uniform Limited Partnership Act. The general partner of the Partnership is McNeil Partners, L.P. (the "General Partner"), a Delaware limited partnership, an affiliate of Robert A. McNeil. The Partnership is governed by an agreement of limited partnership dated September 12, 1974 (the "Partnership Agreement"). The principal place of business for the Partnership and the General Partner is 13760 Noel Road, Suite 700, LB70, Dallas, Texas 75240. In the opinion of management, the financial statements reflect all adjustments necessary for a fair presentation of the Partnership's financial position and results of operations. All adjustments were of a normal recurring nature. However, the results of operations for the three months ended March 31, 1995 are not necessarily indicative of the results to be expected for the year ending December 31, 1995. NOTE 2. - ------- The financial statements should be read in conjunction with the financial statements contained in the Partnership's Annual Report on Form 10-K for the year ended December 31, 1994, and the notes thereto, as filed with the Securities and Exchange Commission, which is available upon request by writing to McNeil Real Estate Fund V, Ltd. c/o McNeil Real Estate Management, Inc., Investor Services, 13760 Noel Road, Suite 700, LB70, Dallas, Texas 75240. NOTE 3. - ------- Certain reclassifications have been made to prior period amounts to conform with current year presentation. NOTE 4. - ------- The Partnership pays property management fees equal to 5% of gross rental receipts of Sycamore Valley, the Partnership's residential property, to McNeil Real Estate Management, Inc. ("McREMI"), an affiliate of the General Partner, for providing management and leasing services. As compensation for administering the affairs of the Partnership, the General Partner receives a partnership management fee equal to 5% of cash from operations, as defined, but only if the limited partners receive distributions of cash from operations equal to a 6% per annum non-cumulative return on their adjusted invested capital. The Partnership is obligated to pay commissions for real estate brokerage services to an affiliate of the General Partner in connection with the sale of the Partnership's property. Such commissions shall not exceed the lesser of (i) the normal and competitive rate for similar services in the locality where the services are performed, (ii) 50% of the standard commission or (iii) one-half of the total acquisition fees which could have been paid to the General Partner under the terms of the Partnership Agreement. Compensation and reimbursements paid to or accrued for the benefit of the General Partner and its affiliates are as follows: Three Months Ended March 31, ------------------------------- 1995 1994 ------- ------- Property management fees............................. $51,777 $46,736 Partnership management fees.......................... 15,000 15,000 ------ ------ $66,777 $61,736 ====== ====== NOTE 5. - ------- The Partnership filed claims with the United States Bankruptcy Court for the Northern District of Texas, Dallas Division (the "Bankruptcy Court") against Southmark for damages relating to improper overcharges, breach of contract and breach of fiduciary duty. The Partnership settled these claims in 1991, and such settlement was approved by the Bankruptcy Court. An Order Granting Motion to Distribute Funds to Class 8 Claimants dated April 14, 1995 was issued by the Bankruptcy Court. In accordance with the Order, in May 1995 the Partnership received in full satisfaction of its claims, $3,325 in cash, and common and preferred stock in the reorganized Southmark currently valued at approximately $1,100, which amounts represent the Partnership's pro-rata share of Southmark assets available for Class 8 Claimants. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND --------------------------------------------------------------- RESULTS OF OPERATIONS --------------------- FINANCIAL CONDITION - ------------------- The Partnership was formed to acquire, operate and ultimately dispose of a portfolio of income-producing real properties. At March 31, 1995, the Partnership owned one apartment property which is subject to a mortgage note. RESULTS OF OPERATIONS - --------------------- Revenue: Total Partnership revenues increased by $117,980 or 13% for the first three months of 1995 as compared to 1994. Rental revenue and interest income increased $104,524 and $13,456, respectively. Rental revenue increased $104,524 or 11% due to the increase in the occupancy rate at Sycamore Valley. The occupancy rate increased to 98% in 1995 up from 93% for the same the same period in 1994. Interest income increased by $13,456 or 108% for the three months ended March 31, 1995. This increase is due the increase in cash being invested in interest-bearing accounts and an increase in the interest rates. Expenses: Total Partnership expenses increased by $24,600 or 3% the first three months of 1995 as compared to the same period in 1994. The most significant increases occurred in depreciation, property management fees-affiliates, and other property operating expenses. The total increase in expense was offset by decreases in repair and maintenance and general and administrative expenses. Depreciation expense for the three months ended March 31, 1995 increased by $14,508 or 13%, as compared to the same period last in 1994. This increase is due to capital improvements made at the property. As of March 31, 1995, the Partnership made $59,044 in capital improvements. For the first three months of 1995 repairs and maintenance expense decreased $15,299 or 15%, as compared to the same period in 1994. This decrease is mainly due to a reduction in landscaping and the replacement of countertops at Sycamore Valley. Due to an increase in occupancy property management fees-affiliates increased $5,041 or 11% over the same three month period in 1994. Property management fees are computed based on rental receipts of the property. Other property operating expenses increased $7,562 or 15% for the first three months of 1995 as compared to 1994 due to the increase in earthquake insurance for Sycamore Valley. General and administrative expense decreased $1,780 or 20% as compared to the same period last year due legal expenses incurred in the first three months of 1994, not incurred in 1995. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- The Partnership's primary source of cash flows is from operating activities, which generated $387,795 for the first three months of 1995 as compared to $199,106 in 1994. The increase in 1995 was partially due to the increase in cash received from tenants and the reduction in the interest paid. The Partnership expended $59,044 and $45,798 for capital improvements to Sycamore Valley in 1995 and 1994, respectively. The Partnership distributed $285,008 and $285,004 to the limited partners in 1995 and 1994, respectively. Principal payments on the mortgage note payable declined by $57,906 in 1995 as compared to the same period last year. This decline is due to the reduction in the mortgage payment and the increase in the interest rate. Short Term Liquidity: At March 31, 1995, the Partnership held $1,811,860 of cash, up $12,270 since December 31, 1994. This balance provides for the working capital needs of the Partnership and allows for distributions to the limited partners. During 1995, operations from Sycamore Valley are expected to provide positive cash flow from operations. Management will perform routine repairs and maintenance on the property to preserve and enhance its value in the market. The Partnership has budgeted to spend approximately $230,000 on capital improvements in 1995, which are expected to be funded from operations of the property. Long Term Liquidity: McNeil has established a revolving credit facility not to exceed $5,000,000 in the aggregate which will be available on a "first-come, first-served" basis to the Partnership and other affiliated partnerships if certain conditions are met. Borrowings under the facility may be used to fund deferred maintenance, refinancing obligations and working capital needs. There is no assurance that the partnership will receive funds under the facility because no amounts will be reserved for any particular partnership. As of March 31, 1995, $2,102,530 remained available for borrowing under the facility; however, additional funds could become available as other partnerships repay existing borrowings. If operations should deteriorate and present resources not be adequate for current needs, the Partnership has no established lines of credit on which to draw for its working capital needs other than any available portion of the $5,000,000 revolving credit facility discussed above, and thus would require other sources of working capital. No such other sources have been identified. Distributions: During 1995, the limited partners received a cash distribution of $258,008. The distribution consisted of funds from operations Any cash not required for current operations is expected to continue to be distributed to the Partners on the semi-annual schedule presently followed. Distributions will be subject to maintenance of adequate levels of cash reserves, and such distributions will only be available from cash generated from operations. PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ------- -------------------------------- (a) Exhibits. Exhibit Number Description 4. Partnership Agreement dated September 12, 1974 and amended and restated January 31, 1975. (1) 11. Statement regarding computation of Net Income per limited partnership unit: Net income per limited partnership unit is computed by dividing net income allocated to the limited partners by the number of limited partnership units outstanding. Per unit information has been computed based on 18,223 limited partnership units outstanding in 1995 and 1994. (1) Incorporated by reference to the Annual Report of McNeil Real Estate Fund V, Ltd. on Form 10-K for the period ended December 31, 1990, as filed with the Securities and Exchange Commission on March 29, 1991. (b) Reports on Form 8-K. There were no reports on Form 8-K filed during the quarter ended March 31, 1995. McNEIL REAL ESTATE FUND V, LTD. SIGNATURES Pursuant to the requirements 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: McNEIL REAL ESTATE FUND V, LTD. By: McNeil Partners, L.P., General Partner By: McNeil Investors, Inc., General Partner May 11, 1995 By: /s/ Donald K. Reed - ---------------------------- -------------------------------------------------- Date Donald K. Reed President and Chief Executive Officer May 11, 1995 By: /s/ Robert C. Irvine - ---------------------------- -------------------------------------------------- Date Robert C. Irvine Chief Financial Officer of McNeil Investors, Inc. Principal Financial Officer May 11, 1995 By: /s/ Brandon K. Flaming - ---------------------------- ------------------------------------------------- Date Brandon K. Flaming Chief Accounting Officer of McNeil Real Estate Management, Inc.