UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2003
[ ] 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 0-11574
SHELTER PROPERTIES V
(Exact Name of Registrant as Specified in Its Charter)
South Carolina 57-0721855
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, PO Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
Issuer's telephone number
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SHELTER PROPERTIES V
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
June 30, 2003
Assets
Cash and cash equivalents $ 765
Receivables and deposits 699
Restricted escrows 277
Other assets 1,578
Investment properties:
Land $ 4,054
Buildings and related personal property 83,157
87,211
Less accumulated depreciation (54,547) 32,664
$ 35,983
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 254
Tenant security deposit liabilities 289
Accrued property taxes 439
Other liabilities 681
Mortgage notes payable 46,066
Partners' Deficit
General partners $ (371)
Limited partners (52,538 units
issued and outstanding) (11,375) (11,746)
$ 35,983
See Accompanying Notes to Consolidated Financial Statements
SHELTER PROPERTIES V
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per unit data)
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
Revenues:
Rental income $ 3,064 $ 3,320 $ 6,165 $ 6,611
Other income 363 333 734 709
Casualty gains (Note D) 75 -- 444 376
Total revenues 3,502 3,653 7,343 7,696
Expenses:
Operating 1,345 1,377 2,867 2,795
General and administrative 106 126 232 262
Depreciation 844 820 1,676 1,610
Interest 885 909 1,760 1,824
Property taxes 251 238 495 489
Total expenses 3,431 3,470 7,030 6,980
Net income $ 71 $ 183 $ 313 $ 716
Net income allocated to general
partners (1%) $ 1 $ 2 $ 3 $ 7
Net income allocated to limited
partners (99%) 70 181 310 709
$ 71 $ 183 $ 313 $ 716
Net income per limited partnership
unit $ 1.33 $ 3.44 $ 5.90 $ 13.49
Distributions per limited
partnership unit $ 6.85 $119.23 $ 6.85 $119.23
See Accompanying Notes to Consolidated Financial Statements
SHELTER PROPERTIES V
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partners Partners Total
Original capital contributions 52,538 $ 2 $52,538 $52,540
Partners' deficit at
December 31, 2002 52,538 $ (374) $(11,325) $(11,699)
Distribution to partners -- -- (360) (360)
Net income for the six months
ended June 30, 2003 -- 3 310 313
Partners' deficit at
June 30, 2003 52,538 $ (371) $(11,375) $(11,746)
See Accompanying Notes to Consolidated Financial Statements
SHELTER PROPERTIES V
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Six Months Ended
June 30,
2003 2002
Cash flows from operating activities:
Net income $ 313 $ 716
Adjustments to reconcile net income to net cash
provided by operating activities:
Casualty gain (444) (376)
Depreciation 1,676 1,610
Amortization of discounts and loan costs 42 42
Change in accounts:
Receivables and deposits 225 319
Other assets (210) (178)
Accounts payable 76 (113)
Tenant security deposit liabilities -- 17
Accrued property taxes 219 143
Other liabilities (15) 182
Net cash provided by operating activities 1,882 2,362
Cash flows from investing activities:
Property improvements and replacements (1,168) (2,011)
Net withdrawals from restricted escrows 124 397
Insurance proceeds received 162 376
Net cash used in investing activities (882) (1,238)
Cash flows from financing activities:
Payments on mortgage notes payable (642) (572)
Loan costs paid -- (4)
Advance from affiliate 219 --
Payments on advance from affiliate (239) --
Distributions to partners (360) (6,316)
Net cash used in financing activities (1,022) (6,892)
Net decrease in cash and cash equivalents (22) (5,768)
Cash and cash equivalents at beginning of period 787 6,401
Cash and cash equivalents at end of period $ 765 $ 633
Supplemental disclosure of cash flow information:
Cash paid for interest $ 1,738 $ 1,645
Supplemental disclosure of non-cash activity:
Property improvements and replacements in accounts
payable $ 109 $ 72
At December 31, 2002 and 2001 approximately $291,000 and $287,000, respectively,
of property improvements and replacements were included in accounts payable.
At June 30, 2003, receivables and deposits include approximately $452,000 of
insurance proceeds received from a casualty at Tar River Estates Apartments held
on deposit with the mortgage lender.
See Accompanying Notes to Consolidated Financial Statements
SHELTER PROPERTIES V
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements of Shelter
Properties V (the "Partnership" or "Registrant") have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Item 310(b) of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. The general partner responsible for management of the
Partnership's business is Shelter Realty V Corporation (the "Corporate General
Partner"). In the opinion of the Corporate General Partner, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three and six month
periods ended June 30, 2003 are not necessarily indicative of the results that
may be expected for the fiscal year ending December 31, 2003. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Partnership's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 2002. The Corporate General Partner is a
subsidiary of Apartment Investment and Management Company ("AIMCO"), a publicly
traded real estate investment trust. The non-corporate general partner, AIMCO
Properties, L.P., is also an affiliate of AIMCO.
Note B - Reconciliation of Cash Flows
As required by the Partnership Agreement, the following is a reconciliation of
"Net cash provided by operating activities" in the accompanying consolidated
statements of cash flows to "Net cash from operations", as defined in the
Partnership Agreement. However, "Net cash from operations" should not be
considered an alternative to net income as an indicator of the Partnership's
operating performance or to cash flows as a measure of liquidity.
Six Months Ended
June 30,
2003 2002
(in thousands)
Net cash provided by operating activities $ 1,882 $ 2,362
Payments on mortgage notes payable (642) (572)
Property improvements and replacements (1,168) (2,011)
Change in restricted escrows, net 124 397
Changes in reserves for net operating
liabilities (295) (370)
Net cash used in operations $ (99) $ (194)
The Corporate General Partner believed it to be in the best interest of the
Partnership to use cash from operations of approximately $99,000 and $194,000
for the six months ended June 30, 2003 and 2002, respectively, to fund
continuing capital improvements in order for the properties to remain
competitive.
Note C - Transactions with Affiliated Parties
The Partnership has no employees and is dependent on the Corporate General
Partner and its affiliates for the management and administration of all
Partnership activities. The Partnership Agreement provides for (i) certain
payments to affiliates for services and (ii) reimbursement of certain expenses
incurred by affiliates on behalf of the Partnership.
During the six months ended June 30, 2003 and 2002, affiliates of the Corporate
General Partner were entitled to receive 5% of gross receipts from all of the
Registrant's properties for providing property management services. The
Registrant paid to such affiliates approximately $344,000 and $372,000 for the
six months ended June 30, 2003 and 2002, respectively, which are included in
operating expenses.
In accordance with the Partnership Agreement, the Corporate General Partner
loaned approximately $219,000 to the Partnership to cover real estate tax
payments at Woodland Village Apartments during the six months ended June 30,
2003. Interest was accrued at the prime rate plus 2% or 6.00% at June 30, 2003.
Interest expense was approximately $1,000 for the six months ended June 30,
2003. During the six months ended June 30, 2003, the Partnership repaid advances
of approximately $239,000 and related interest of approximately $1,000 to the
Corporate General Partner with cash from operations. At June 30, 2003, there
were no outstanding loans or accrued interest. There were no loans from the
Corporate General Partner or associated interest expense during the six months
ended June 30, 2002.
Affiliates of the Corporate General Partner received reimbursement of
accountable administrative expenses amounting to approximately $267,000 and
$390,000 for the six months ended June 30, 2003 and 2002, respectively. Included
in these amounts are fees related to construction management services provided
by an affiliate of the Corporate General Partner of approximately $98,000 and
$192,000 for the six months ended June 30, 2003 and 2002, respectively. The
construction management service fees are calculated based on a percentage of
current additions to investment properties. These amounts are included in
general and administrative expenses and investment properties.
The Partnership insures its properties up to certain limits through coverage
provided by AIMCO which is generally self-insured for a portion of losses and
liabilities related to workers compensation, property casualty and vehicle
liability. The Partnership insures its properties above the AIMCO limits through
insurance policies obtained by AIMCO from insurers unaffiliated with the
Corporate General Partner. During the six months ended June 30, 2003 and 2002,
the Partnership was charged by AIMCO and its affiliates approximately $192,000
and $232,000, respectively, for insurance coverage and fees associated with
policy claims administration.
Note D - Casualty Events
On January 18, 2003, there was a fire at Tar River Estates Apartments causing
damage to eight units. The property incurred damages of approximately $504,000
and lost rents of approximately $41,000. During the six months ended June 30,
2003, the Partnership recognized a gain of approximately $369,000 as a result of
the receipt of insurance proceeds of approximately $452,000, which are on
deposit with the mortgage lender, offset by the write-off of the undepreciated
damaged assets of approximately $83,000.
In June 2002, Foxfire Apartments experienced a fire, causing damage to twelve
units. The property incurred damages of approximately $677,000 as a result of
the fire and lost rents of approximately $43,000. During the year ended December
31, 2002, insurance proceeds of approximately $494,000 were received to cover
the damage to the property, including approximately $59,000 which was held on
deposit with the mortgage lender at December 31, 2002 and released to the
Partnership during the six months ended June 30, 2003. The Partnership
recognized a casualty gain of approximately $394,000 after writing off the
undepreciated cost of the damaged units during the year ended December 31, 2002.
During the six months ended June 30, 2003, the Partnership received additional
proceeds of approximately $103,000 to cover the damages and approximately
$43,000 to cover the lost rents, which are included in rental income. The
Partnership recognized an additional gain of approximately $75,000 for the three
and six months ended June 30, 2003, after writing off additional undepreciated
damaged assets of approximately $28,000.
In September 1999, Tar River Estates Apartments was damaged by severe flooding
which affected certain areas of North Carolina. The property incurred damages of
approximately $6,323,000 as a result of this flooding. During 2000 and 2001,
insurance proceeds of approximately $5,316,000 were received to cover lost rents
and damage to the property, resulting in a casualty gain of approximately
$1,662,000 in 2000. In addition, the Partnership negotiated an agreement with
the city of Greenville, North Carolina, whereby a portion of the land was
condemned and sold to the city on October 17, 2001. Therefore, the apartment
units previously located on this land were not reconstructed. The remaining
damaged units have been completely reconstructed. An additional gain of
approximately $376,000 was recorded during the six months ended June 30, 2002 as
a result of receiving additional insurance proceeds.
Note E - Legal Proceedings
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of California for the County of San Mateo. The plaintiffs named as
defendants, among others, the Partnership, its Corporate General Partner and
several of their affiliated partnerships and corporate entities. The action
purported to assert claims on behalf of a class of limited partners and
derivatively on behalf of a number of limited partnerships (including the
Partnership) that are named as nominal defendants, challenging, among other
things, the acquisition of interests in certain Corporate General Partner
entities by Insignia Financial Group, Inc. ("Insignia") and entities that were,
at one time, affiliates of Insignia; past tender offers by the Insignia
affiliates to acquire limited partnership units; management of the partnerships
by the Insignia affiliates; and the series of transactions which closed on
October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Properties
Trust, respectively, were merged into AIMCO. The plaintiffs sought monetary
damages and equitable relief, including judicial dissolution of the Partnership.
On June 25, 1998, the Corporate General Partner filed a motion seeking dismissal
of the action. In lieu of responding to the motion, the plaintiffs filed an
amended complaint. The Corporate General Partner filed demurrers to the amended
complaint, which were heard February 1999.
Pending the ruling on such demurrers, settlement negotiations commenced. On
November 2, 1999, the parties executed and filed a Stipulation of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the settlement was obtained on November 3, 1999 from the Court, at which time
the Court set a final approval hearing for December 10, 1999. Prior to the
December 10, 1999 hearing, the Court received various objections to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement. On
December 14, 1999, the Corporate General Partner and its affiliates terminated
the proposed settlement. In February 2000, counsel for some of the named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated the settlement. On June 27, 2000, the Court entered an order
disqualifying them from the case and an appeal was taken from the order on
October 5, 2000. On December 4, 2000, the Court appointed the law firm of Lieff
Cabraser Heimann & Bernstein LLP as new lead counsel for plaintiffs and the
putative class. Plaintiffs filed a third amended complaint on January 19, 2001.
On March 2, 2001, the Corporate General Partner and its affiliates filed a
demurrer to the third amended complaint. On May 14, 2001, the Court heard the
demurrer to the third amended complaint. On July 10, 2001, the Court issued an
order sustaining defendants' demurrer on certain grounds. On July 20, 2001,
Plaintiffs filed a motion for reconsideration of the Court's July 10, 2001 order
granting in part and denying in part defendants' demurrer. On September 7, 2001,
Plaintiffs filed a fourth amended class and derivative action complaint. On
September 12, 2001, the Court denied Plaintiffs' motion for reconsideration. On
October 5, 2001, the Corporate General Partner and affiliated defendants filed a
demurrer to the fourth amended complaint, which was heard on December 11, 2001.
On February 2, 2002, the Court served its order granting in part the demurrer.
The Court dismissed without leave to amend certain of the plaintiffs' claims. On
February 11, 2002, plaintiffs filed a motion seeking to certify a putative class
comprised of all non-affiliated persons who own or have owned units in the
partnerships. The Corporate General Partner and affiliated defendants opposed
the motion. On April 29, 2002, the Court held a hearing on plaintiffs' motion
for class certification and took the matter under submission after further
briefing, as ordered by the court, was submitted by the parties. On July 10,
2002, the Court entered an order vacating the trial date of January 13, 2003 (as
well as the pre-trial and discovery cut-off dates) and stayed the case in its
entirety through November 7, 2002 so that the parties could have an opportunity
to discuss settlement. On October 30, 2002, the court entered an order extending
the stay in effect through January 10, 2003.
During the third quarter of 2001, a complaint (the "Heller action") was filed
against the same defendants that are named in the Nuanes action, captioned
Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed
a first amended complaint. The Heller action was brought as a purported
derivative action, and asserted claims for, among other things, breach of
fiduciary duty, unfair competition, conversion, unjust enrichment, and judicial
dissolution. Plaintiffs in the Nuanes action filed a motion to consolidate the
Heller action with the Nuanes action and stated that the Heller action was filed
in order to preserve the derivative claims that were dismissed without leave to
amend in the Nuanes action by the Court order dated July 10, 2001. On October 5,
2001, the Corporate General Partner and affiliated defendants moved to strike
the first amended complaint in its entirety for violating the Court's July 10,
2001 order granting in part and denying in part defendants' demurrer in the
Nuanes action, or alternatively, to strike certain portions of the complaint
based on the statute of limitations. Other defendants in the action demurred to
the fourth amended complaint, and, alternatively, moved to strike the complaint.
On December 11, 2001, the court heard argument on the motions and took the
matters under submission. On February 4, 2002, the Court served notice of its
order granting defendants' motion to strike the Heller complaint as a violation
of its July 10, 2001 order in the Nuanes action. On March 27, 2002, the
plaintiffs filed a notice appealing the order striking the complaint. Before
completing briefing on the appeal, the parties stayed further proceedings in the
appeal in light of a settlement.
On January 8, 2003, the parties filed a Stipulation of Settlement in proposed
settlement of the Nuanes action and the Heller action described below.
In general terms, the proposed settlement provides for certification for
settlement purposes of a settlement class consisting of all limited partners in
this Partnership and others (the "Partnerships") as of December 20, 2002, the
dismissal with prejudice and release of claims in the Nuanes and Heller
litigation, payment by AIMCO of $9.9 million (which shall be distributed to
settlement class members after deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent appraisals of the Partnerships' properties by a Court appointed
appraiser. An affiliate of the Corporate General Partner has also agreed to make
a tender offer to purchase all of the partnership interests in the Partnerships
within one year of final approval, if it is granted, and to provide partners
with the independent appraisals at the time of these tenders. The proposed
settlement also provided for the limitation of the allowable costs which the
Corporate General Partner or its affiliates will charge the Partnerships in
connection with this litigation and imposes limits on the class counsel fees and
costs in this litigation. On April 11, 2003, notice was distributed to limited
partners providing the details of the proposed settlement.
On June 13, 2003, the Court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions.
The Corporate General Partner does not anticipate that any costs to the
Partnership, whether legal or settlement costs, associated with these cases will
be material to the Partnership's overall operations.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature arising in the ordinary course of business.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The matters discussed in this report contain certain forward-looking statements,
including, without limitation, statements regarding future financial performance
and the effect of government regulations. Actual results may differ materially
from those described in the forward-looking statements and will be affected by a
variety of risks and factors including, without limitation: national and local
economic conditions; the terms of governmental regulations that affect the
Registrant and interpretations of those regulations; the competitive environment
in which the Registrant operates; financing risks, including the risk that cash
flows from operations may be insufficient to meet required payments of principal
and interest; real estate risks, including variations of real estate values and
the general economic climate in local markets and competition for tenants in
such markets; litigation, including costs associated with prosecuting and
defending claims and any adverse outcomes, and possible environmental
liabilities. Readers should carefully review the Registrant's financial
statements and the notes thereto, as well as the risk factors described in the
documents the Registrant files from time to time with the Securities and
Exchange Commission.
The Partnership's investment properties consist of seven apartment complexes.
The following table sets forth the average occupancy of the properties for the
six months ended June 30, 2003 and 2002:
June 30,
Property 2003 2002
Foxfire Apartments
Atlanta, Georgia (1) 74% 92%
Old Salem Apartments
Charlottesville, Virginia (2) 91% 96%
Woodland Village Apartments
Columbia, South Carolina 91% 90%
Lake Johnson Mews Apartments
Raleigh, North Carolina (3) 91% 95%
The Lexington Green Apartments
Sarasota, Florida 94% 95%
Millhopper Village Apartments
Gainesville, Florida 95% 96%
Tar River Estates Apartments
Greenville, North Carolina (4) 92% 85%
(1) The Corporate General Partner attributes the decrease in occupancy at
Foxfire Apartments to an increase in home purchases in the Atlanta area as
a result of lower home mortgage interest rates and to the casualty which
occurred in June 2002 (as discussed in "Results of Operations").
(2) The Corporate General Partner attributes the decrease in occupancy at Old
Salem Apartments to unfavorable economic conditions and increased
competition in the Charlottesville area.
(3) The Corporate General Partner attributes the decrease in occupancy at Lake
Johnson Mews Apartments to the slowdown in the economy and an increase in
home purchases in the Raleigh area as a result of lower home mortgage
interest rates.
(4) The Corporate General Partner attributes the increase in occupancy at Tar
River Estates Apartments to completion of property amenities and an
increase in curb appeal.
Results of Operations
The Partnership's net income for the three and six months ended June 30, 2003
was approximately $71,000 and $313,000, respectively, as compared to net income
of approximately $183,000 and $716,000 for the three and six months ended June
30, 2002, respectively. The decrease in net income for the three months ended
June 30, 2003 is due to a decrease in total revenues, partially offset by a
decrease in total expenses. The decrease in net income for the six months ended
June 30, 2003 is due to a decrease in total revenues and an increase in total
expenses. The decrease in total revenues for both the three and six months ended
June 30, 2003 is due to a decrease in rental income, partially offset by
increases in other income and the recognition of casualty gains. The decrease in
rental income is primarily due to the decrease in occupancy at five of the
Partnership's investment properties, the decrease in average rental rate at four
of the properties, and an increase in bad debt expense at four properties. The
decrease in rental income was partially offset by the increases in occupancy at
Woodland Village Apartments and Tar River Estates Apartments, increases in the
average rental rates at Old Salem Apartments, The Lexington Green Apartments,
and Tar River Estates Apartments, and insurance proceeds received to cover lost
rents as a result of the casualty at Foxfire Apartments (as discussed below).
The casualty gains recognized in 2003 are the result of casualties at Foxfire
Apartments and Tar River Estates Apartments (as discussed below). The casualty
gain recognized in 2002 is a result of a casualty at Tar River Estates
Apartments (as discussed below). Other income increased primarily as a result of
an increase in utility reimbursements at Old Salem Apartments, partially offset
by a decrease in student housing fees at Tar River Estates Apartments.
The decrease in total expenses for the three months ended June 30, 2003 is due
to decreases in operating, general and administrative, and interest expenses,
partially offset by increases in both depreciation and property tax expense. The
increase in total expenses for the six months ended June 30, 2003 is due to
increases in operating, depreciation, and property tax expenses, partially
offset by decreases in both interest and general and administrative expense.
Depreciation expense increased as a result of property improvements and
replacements placed into service during the past twelve months. Property tax
expense increased as a result of an increase in the assessed value and tax rate
at the Lexington Green Apartments. Interest expense decreased as a result of
scheduled principal payments made on the mortgages encumbering the Partnership's
investment properties, which reduced the carrying balance of the loans. The
decrease in operating expenses for the three months ended June 30, 2003 is
primarily due to a decrease in maintenance expense at most of the properties as
a result of an increase in the capitalization of certain direct and indirect
costs, primarily payroll related costs. The increase in operating expenses for
the six months ended June 30, 2003 is primarily due to an increase in utility
expenses, primarily at Old Salem Apartments, partially offset by decreases in
property management fees and payroll related expenses at most of the properties.
General and administrative expenses decreased for both the three and six months
ended June 30, 2003 due to a decrease in management reimbursements to the
Corporate General Partner allowed under the Partnership Agreement. In addition,
costs associated with the quarterly and annual communications with investors and
regulatory agencies and the annual audit and appraisals required by the
Partnership Agreement are also included in general and administrative expenses
for the three and six months ended June 30, 2003 and 2002.
On January 18, 2003, there was a fire at Tar River Estates Apartments causing
damage to eight units. The property incurred damages of approximately $504,000
and lost rents of approximately $41,000. During the six months ended June 30,
2003, the Partnership recognized a gain of approximately $369,000 as a result of
the receipt of insurance proceeds of approximately $452,000, which are on
deposit with the mortgage lender, offset by the write-off of the undepreciated
damaged assets of approximately $83,000.
In June 2002, Foxfire Apartments experienced a fire, causing damage to twelve
units. The property incurred damages of approximately $677,000 as a result of
the fire and lost rents of approximately $43,000. During the year ended December
31, 2002, insurance proceeds of approximately $494,000 were received to cover
the damage to the property, including approximately $59,000 which was held on
deposit with the mortgage lender at December 31, 2002 and released to the
Partnership during the six months ended June 30, 2003. The Partnership
recognized a casualty gain of approximately $394,000 after writing off the
undepreciated cost of the damaged units during the year ended December 31, 2002.
During the six months ended June 30, 2003, the Partnership received additional
proceeds of approximately $103,000 to cover the damages and approximately
$43,000 to cover the lost rents, which are included in rental income. The
Partnership recognized an additional gain of approximately $75,000 for the three
and six months ended June 30, 2003, after writing off additional undepreciated
damaged assets of approximately $28,000.
In September 1999, Tar River Estates Apartments was damaged by severe flooding
which affected certain areas of North Carolina. The property incurred damages of
approximately $6,323,000 as a result of this flooding. During 2000 and 2001,
insurance proceeds of approximately $5,316,000 were received to cover lost rents
and damage to the property, resulting in a casualty gain of approximately
$1,662,000 in 2000. In addition, the Partnership negotiated an agreement with
the city of Greenville, North Carolina, whereby a portion of the land was
condemned and sold to the city on October 17, 2001. Therefore, the apartment
units previously located on this land were not reconstructed. The remaining
damaged units have been completely reconstructed. An additional gain of
approximately $376,000 was recorded during the six months ended June 30, 2002 as
a result of receiving additional insurance proceeds.
As part of the ongoing business plan of the Partnership, the Corporate General
Partner monitors the rental market environment of each of its investment
properties to assess the feasibility of increasing rents, maintaining or
increasing occupancy levels and protecting the Partnership from increases in
expense. As part of this plan, the Corporate General Partner attempts to protect
the Partnership from the burden of inflation-related increases in expenses by
increasing rents and maintaining a high overall occupancy level. However, due to
changing market conditions, which can result in the use of rental concessions
and rental reductions to offset softening market conditions, there is no
guarantee that the Corporate General Partner will be able to sustain such a
plan.
Liquidity and Capital Resources
At June 30, 2003, the Partnership had cash and cash equivalents of approximately
$765,000, compared to approximately $633,000 at June 30, 2002. The decrease in
cash and cash equivalents of approximately $22,000 for the six months ended June
30, 2003, from December 31, 2002, is due to approximately $1,022,000 of cash
used in financing activities and approximately $882,000 of cash used in
investing activities, partially offset by approximately $1,882,000 of cash
provided by operating activities. Cash used in financing activities consisted of
distributions to partners, payments of principal on the mortgages encumbering
the Partnership's properties and payments on advances from an affiliate of the
Corporate General Partner, partially offset by an advance from an affiliate of
the Corporate General Partner. Cash used in investing activities consisted of
property improvements and replacements, partially offset by net receipts from
escrow accounts maintained by the mortgage lenders and the receipt of insurance
proceeds. The Partnership invests its working capital reserves in interest
bearing accounts.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the investment properties to adequately maintain the
physical assets and other operating needs of the Partnership and to comply with
Federal, state, and local legal and regulatory requirements. The Corporate
General Partner monitors developments in the area of legal and regulatory
compliance and is studying new federal laws, including the Sarbanes-Oxley Act of
2002. The Sarbanes-Oxley Act of 2002 mandates or suggests additional compliance
measures with regard to governance, disclosure, audit and other areas. In light
of these changes, the Partnership expects that it will incur higher expenses
related to compliance, including increased legal and audit fees. Capital
improvements planned for each of the Partnership's properties are detailed
below.
Millhopper Village Apartments: During the six months ended June 30, 2003, the
Partnership completed approximately $26,000 of capital improvements at
Millhopper Village Apartments, consisting primarily of floor covering
replacement. These improvements were funded from operations. The Partnership
evaluates the capital improvement needs of the property during the year and
currently expects to complete an additional $24,000 in capital improvements
during the remainder of 2003. The additional capital improvements will consist
primarily of exterior improvements and floor covering replacement. Additional
capital improvements may be considered and will depend on the physical condition
of the property as well as the anticipated cash flow generated by the property.
Foxfire Apartments: During the six months ended June 30, 2003, the Partnership
completed approximately $585,000 of capital improvements at Foxfire Apartments,
consisting primarily of plumbing upgrades, structural improvements, floor
covering and appliance replacements, and construction related to the fire
discussed in "Results of Operations". These improvements were funded from
operations and insurance proceeds. The Partnership evaluates the capital
improvement needs of the property during the year and currently expects to
complete an additional $220,000 in capital improvements during the remainder of
2003. The additional capital improvements will consist primarily of construction
related to the 2002 fire, HVAC upgrades, and floor covering and appliance
replacements. Additional capital improvements may be considered and will depend
on the physical condition of the property as well as the anticipated cash flow
generated by the property.
Lake Johnson Mews Apartments: During the six months ended June 30, 2003, the
Partnership completed approximately $107,000 of capital improvements at Lake
Johnson Mews Village Apartments, consisting primarily of swimming pool upgrades,
parking area upgrades, and floor covering replacement. These improvements were
funded from operations. The Partnership evaluates the capital improvement needs
of the property during the year and currently expects to complete an additional
$19,000 in capital improvements during the remainder of 2003. The additional
capital improvements will consist primarily of floor covering replacement.
Additional capital improvements may be considered and will depend on the
physical condition of the property as well as the anticipated cash flow
generated by the property.
Woodland Village Apartments: During the six months ended June 30, 2003, the
Partnership completed approximately $53,000 of capital improvements at Woodland
Village Apartments, consisting primarily of floor covering replacement. These
improvements were funded from operations. The Partnership evaluates the capital
improvement needs of the property during the year and currently expects to
complete an additional $49,000 in capital improvements during the remainder of
2003. The additional capital improvements will consist primarily of floor
covering and appliance replacements. Additional capital improvements may be
considered and will depend on the physical condition of the property as well as
the anticipated cash flow generated by the property.
The Lexington Green Apartments: During the six months ended June 30, 2003, the
Partnership completed approximately $61,000 of capital improvements at The
Lexington Green Apartments, consisting primarily of plumbing upgrades and floor
covering replacement. These improvements were funded from operations. The
Partnership evaluates the capital improvement needs of the property during the
year and currently expects to complete an additional $37,000 in capital
improvements during the remainder of 2003. The additional capital improvements
will consist primarily of floor covering replacement. Additional capital
improvements may be considered and will depend on the physical condition of the
property as well as the anticipated cash flow generated by the property and
replacement reserves.
Tar River Estates Apartments: During the six months ended June 30, 2003, the
Partnership completed approximately $46,000 of capital improvements at Tar River
Estates Apartments, consisting primarily of plumbing upgrades, cabinet upgrades
and floor covering replacement. These improvements were funded from operations
and replacement reserves. The Partnership evaluates the capital improvement
needs of the property during the year and currently expects to complete an
additional $88,000 in capital improvements during the remainder of 2003. The
additional capital improvements will consist primarily of communications
enhancements and floor covering replacement. Additional capital improvements may
be considered and will depend on the physical condition of the property as well
as the anticipated cash flow generated by the property.
Old Salem Apartments: During the six months ended June 30, 2003, the Partnership
completed approximately $108,000 of capital improvements at Old Salem
Apartments, consisting primarily of structural improvements, cabinet upgrades,
and floor covering replacement. These improvements were funded from operations.
The Partnership evaluates the capital improvement needs of the property during
the year and currently expects to complete an additional $33,000 in capital
improvements during the remainder of 2003. The additional capital improvements
will consist primarily of exterior building improvements and floor covering
replacement. Additional capital improvements may be considered and will depend
on the physical condition of the property as well as the anticipated cash flow
generated by the property.
The additional capital expenditures will be incurred only if cash is available
from operations and from Partnership reserves. To the extent that such budgeted
capital improvements are completed, the Registrant's distributable cash flow, if
any, may be adversely affected at least in the short term.
The Registrant's assets are thought to be sufficient for any near-term needs
(exclusive of capital improvements) of the Registrant. The mortgage indebtedness
of approximately $46,066,000 is amortized over varying periods with maturity
dates ranging from November 1, 2019 to January 1, 2022, at which time the loans
are scheduled to be fully amortized.
The Partnership distributed the following amounts during the six months ended
June 30, 2003 and 2002 (in thousands, except per unit data):
Six Months Per Limited Six Months Per Limited
Ended Partnership Ended Partnership
June 30, 2003 Unit June 30, 2002 Unit
Financing Proceeds (1) $ 360 $ 6.85 $3,785 $ 72.05
Sale Proceeds (2) -- -- 2,479 47.18
Other (3) -- -- 52 --
Total $ 360 $ 6.85 $6,316 $119.23
(1) From proceeds from the new financing obtained on Tar River Estates
Apartments in December 2001.
(2) From remaining proceeds from the sale of a portion of land at Tar River
Estates Apartments in October 2001.
(3) Distribution to the general partner of the majority owned sub-tier limited
partnership in connection with the transfer of funds from the majority
owned sub-tier limited partnership to the Partnership.
Future cash distributions will depend on the levels of net cash generated from
operations, the availability of cash reserves, property refinancings and/or
property sales. The Partnership's cash available for distribution is reviewed on
a monthly basis. There can be no assurance, however, that the Partnership will
generate sufficient funds from operations, after required capital expenditures,
to permit any additional distributions to its partners in 2003 or subsequent
periods.
Other
In addition to its indirect ownership of the general partner interests in the
Partnership, AIMCO and its affiliates owned 37,480 limited partnership units
(the "Units") in the Partnership representing 71.34% of the outstanding Units at
June 30, 2003. A number of these Units were acquired pursuant to tender offers
made by AIMCO or its affiliates. It is possible that AIMCO or its affiliates
will acquire additional Units in exchange for cash or a combination of cash and
units in the operating partnership of AIMCO either through private purchases or
tender offers. Pursuant to the Partnership Agreement, unitholders holding a
majority of the Units are entitled to take action with respect to a variety of
matters that include, but are not limited to, voting on certain amendments to
the Partnership Agreement and voting to remove the Corporate General Partner. As
a result of its ownership of 71.34% of the outstanding Units, AIMCO and its
affiliates are in a position to control all voting decisions with respect to the
Partnership. Although the Corporate General Partner owes fiduciary duties to the
limited partners of the Partnership, the Corporate General Partner also owes
fiduciary duties to AIMCO as its sole stockholder. As a result, the duties of
the Corporate General Partner, as corporate general partner, to the Partnership
and its limited partners may come into conflict with the duties of the Corporate
General Partner to AIMCO, as its sole stockholder.
Critical Accounting Policies and Estimates
The consolidated financial statements are prepared in accordance with accounting
principles generally accepted in the United States which require the Partnership
to make estimates and assumptions. The Partnership believes that of its
significant accounting policies, the following may involve a higher degree of
judgment and complexity.
Impairment of Long-Lived Assets
Investment properties are recorded at cost, less accumulated depreciation,
unless considered impaired. If events or circumstances indicate that the
carrying amount of a property may be impaired, the Partnership will make an
assessment of its recoverability by estimating the undiscounted future cash
flows, excluding interest charges, of the property. If the carrying amount
exceeds the aggregate future cash flows, the Partnership would recognize an
impairment loss to the extent the carrying amount exceeds the fair value of the
property.
Real property investments are subject to varying degrees of risk. Several
factors may adversely affect the economic performance and value of the
Partnership's investment properties. These factors include changes in the
national, regional and local economic climate; local conditions, such as an
oversupply of multifamily properties; competition from other available
multifamily property owners and changes in market rental rates. Any adverse
changes in these factors could cause an impairment in the Partnership's assets.
Revenue Recognition
The Partnership generally leases apartment units for twelve-month terms or less.
Rental income attributable to leases is recognized monthly as it is earned and
the Partnership fully reserves all balances outstanding over thirty days. The
Partnership will offer rental concessions during particularly slow months or in
response to heavy competition from other similar complexes in the area. Any
concessions given at the inception of the lease are amortized over the life of
the lease.
ITEM 3. CONTROLS AND PROCEDURES
(a) Disclosure Controls and Procedures. The Partnership's management, with the
participation of the principal executive officer and principal financial officer
of the Corporate General Partner, who are the equivalent of the Partnership's
principal executive officer and principal financial officer, respectively, has
evaluated the effectiveness of the Partnership's disclosure controls and
procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end
of the period covered by this report. Based on such evaluation, the principal
executive officer and principal financial officer of the Corporate General
Partner, who are the equivalent of the Partnership's principal executive officer
and principal financial officer, respectively, have concluded that, as of the
end of such period, the Partnership's disclosure controls and procedures are
effective.
(b) Internal Control Over Financial Reporting. There have not been any changes
in the Partnership's internal control over financial reporting (as such term is
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the
fiscal quarter to which this report relates that have materially affected, or
are reasonably likely to materially affect, the Partnership's internal control
over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of California for the County of San Mateo. The plaintiffs named as
defendants, among others, the Partnership, its Corporate General Partner and
several of their affiliated partnerships and corporate entities. The action
purported to assert claims on behalf of a class of limited partners and
derivatively on behalf of a number of limited partnerships (including the
Partnership) that are named as nominal defendants, challenging, among other
things, the acquisition of interests in certain Corporate General Partner
entities by Insignia Financial Group, Inc. ("Insignia") and entities that were,
at one time, affiliates of Insignia; past tender offers by the Insignia
affiliates to acquire limited partnership units; management of the partnerships
by the Insignia affiliates; and the series of transactions which closed on
October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Properties
Trust, respectively, were merged into AIMCO. The plaintiffs sought monetary
damages and equitable relief, including judicial dissolution of the Partnership.
On June 25, 1998, the Corporate General Partner filed a motion seeking dismissal
of the action. In lieu of responding to the motion, the plaintiffs filed an
amended complaint. The Corporate General Partner filed demurrers to the amended
complaint, which were heard February 1999.
Pending the ruling on such demurrers, settlement negotiations commenced. On
November 2, 1999, the parties executed and filed a Stipulation of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the settlement was obtained on November 3, 1999 from the Court, at which time
the Court set a final approval hearing for December 10, 1999. Prior to the
December 10, 1999 hearing, the Court received various objections to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement. On
December 14, 1999, the Corporate General Partner and its affiliates terminated
the proposed settlement. In February 2000, counsel for some of the named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated the settlement. On June 27, 2000, the Court entered an order
disqualifying them from the case and an appeal was taken from the order on
October 5, 2000. On December 4, 2000, the Court appointed the law firm of Lieff
Cabraser Heimann & Bernstein LLP as new lead counsel for plaintiffs and the
putative class. Plaintiffs filed a third amended complaint on January 19, 2001.
On March 2, 2001, the Corporate General Partner and its affiliates filed a
demurrer to the third amended complaint. On May 14, 2001, the Court heard the
demurrer to the third amended complaint. On July 10, 2001, the Court issued an
order sustaining defendants' demurrer on certain grounds. On July 20, 2001,
Plaintiffs filed a motion for reconsideration of the Court's July 10, 2001 order
granting in part and denying in part defendants' demurrer. On September 7, 2001,
Plaintiffs filed a fourth amended class and derivative action complaint. On
September 12, 2001, the Court denied Plaintiffs' motion for reconsideration. On
October 5, 2001, the Corporate General Partner and affiliated defendants filed a
demurrer to the fourth amended complaint, which was heard on December 11, 2001.
On February 2, 2002, the Court served its order granting in part the demurrer.
The Court dismissed without leave to amend certain of the plaintiffs' claims. On
February 11, 2002, plaintiffs filed a motion seeking to certify a putative class
comprised of all non-affiliated persons who own or have owned units in the
partnerships. The Corporate General Partner and affiliated defendants opposed
the motion. On April 29, 2002, the Court held a hearing on plaintiffs' motion
for class certification and took the matter under submission after further
briefing, as ordered by the court, was submitted by the parties. On July 10,
2002, the Court entered an order vacating the trial date of January 13, 2003 (as
well as the pre-trial and discovery cut-off dates) and stayed the case in its
entirety through November 7, 2002 so that the parties could have an opportunity
to discuss settlement. On October 30, 2002, the court entered an order extending
the stay in effect through January 10, 2003.
During the third quarter of 2001, a complaint (the "Heller action") was filed
against the same defendants that are named in the Nuanes action, captioned
Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed
a first amended complaint. The Heller action was brought as a purported
derivative action, and asserted claims for, among other things, breach of
fiduciary duty, unfair competition, conversion, unjust enrichment, and judicial
dissolution. Plaintiffs in the Nuanes action filed a motion to consolidate the
Heller action with the Nuanes action and stated that the Heller action was filed
in order to preserve the derivative claims that were dismissed without leave to
amend in the Nuanes action by the Court order dated July 10, 2001. On October 5,
2001, the Corporate General Partner and affiliated defendants moved to strike
the first amended complaint in its entirety for violating the Court's July 10,
2001 order granting in part and denying in part defendants' demurrer in the
Nuanes action, or alternatively, to strike certain portions of the complaint
based on the statute of limitations. Other defendants in the action demurred to
the fourth amended complaint, and, alternatively, moved to strike the complaint.
On December 11, 2001, the court heard argument on the motions and took the
matters under submission. On February 4, 2002, the Court served notice of its
order granting defendants' motion to strike the Heller complaint as a violation
of its July 10, 2001 order in the Nuanes action. On March 27, 2002, the
plaintiffs filed a notice appealing the order striking the complaint. Before
completing briefing on the appeal, the parties stayed further proceedings in the
appeal in light of a settlement.
On January 8, 2003, the parties filed a Stipulation of Settlement in proposed
settlement of the Nuanes action and the Heller action described below.
In general terms, the proposed settlement provides for certification for
settlement purposes of a settlement class consisting of all limited partners in
this Partnership and others (the "Partnerships") as of December 20, 2002, the
dismissal with prejudice and release of claims in the Nuanes and Heller
litigation, payment by AIMCO of $9.9 million (which shall be distributed to
settlement class members after deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent appraisals of the Partnerships' properties by a Court appointed
appraiser. An affiliate of the Corporate General Partner has also agreed to make
a tender offer to purchase all of the partnership interests in the Partnerships
within one year of final approval, if it is granted, and to provide partners
with the independent appraisals at the time of these tenders. The proposed
settlement also provided for the limitation of the allowable costs which the
Corporate General Partner or its affiliates will charge the Partnerships in
connection with this litigation and imposes limits on the class counsel fees and
costs in this litigation. On April 11, 2003, notice was distributed to limited
partners providing the details of the proposed settlement.
On June 13, 2003, the Court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions.
The Corporate General Partner does not anticipate that any costs to the
Partnership, whether legal or settlement costs, associated with these cases will
be material to the Partnership's overall operations.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
3 Amended and Restated Certificate and Agreement of
Limited Partnership (Exhibit A to the Prospectus
included in Registrant's Amendment No. 1 to Registration
Statement, filed June 8, 1982 (File No. 2-81308), is
incorporated herein by reference).
31.1 Certification of equivalent of Chief Executive Officer
pursuant to Securities Exchange Act Rules 13a-14(a)/15d-
14(a), as Adopted Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
31.2 Certification of equivalent of Chief Financial Officer
pursuant to Securities Exchange Act Rules 13a-14(a)/15d-
14(a), as Adopted Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
b) Reports on Form 8-K:
None filed during the quarter ended June 30, 2003.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
SHELTER PROPERTIES V
By: Shelter Realty V Corporation
Corporate General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/Thomas C. Novosel
Thomas C. Novosel
Senior Vice President
and Chief Accounting Officer
Date: August 13, 2003
Exhibit 31.1
CERTIFICATION
I, Patrick J. Foye, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Shelter Properties
V;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
evaluation; and
(c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: August 13, 2003
/s/Patrick J. Foye
Patrick J. Foye
Executive Vice President of Shelter Realty V
Corporation, equivalent of the chief
executive officer of the Partnership
Exhibit 31.2
CERTIFICATION
I, Paul J. McAuliffe, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Shelter Properties
V;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
evaluation; and
(c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves
management or other employees who have a significant role in
the registrant's internal control over financial reporting.
Date: August 13, 2003
/s/Paul J. McAuliffe
Paul J. McAuliffe
Executive Vice President and Chief Financial
Officer of Shelter Realty V Corporation,
equivalent of the chief financial officer of
the Partnership
Exhibit 32.1
Certification of CEO and CFO
Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report on Form 10-QSB of Shelter Properties V
(the "Partnership"), for the quarterly period ended June 30, 2003 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"),
Patrick J. Foye, as the equivalent of the chief executive officer of the
Partnership, and Paul J. McAuliffe, as the equivalent of the chief financial
officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that, to the best of his knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Partnership.
/s/Patrick J. Foye
Name: Patrick J. Foye
Date: August 13, 2003
/s/Paul J. McAuliffe
Name: Paul J. McAuliffe
Date: August 13, 2003
This certification is furnished with this Report pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Partnership for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended.