FORM 10-QSB--QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
(As last amended by 34-32231, eff. 6/3/93.)
U. S. 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 February 29, 1996
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 0-11574
SHELTER PROPERTIES V LIMITED PARTNERSHIP
(Exact name of small business issuer as specified in its charter)
South Carolina 57-0721855
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (864) 239-1000
Check whether the issuer (1) 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.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a) SHELTER PROPERTIES V LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEET
(Unaudited)
February 29, 1996
Assets
Cash:
Unrestricted $ 3,565,484
Restricted--tenant security deposits 353,621
Accounts receivable 32,892
Escrow for taxes and insurance 300,973
Restricted escrows 749,570
Other assets 602,272
Investment properties:
Land $ 4,241,860
Buildings and related personal property 68,792,993
73,034,853
Less accumulated depreciation (35,141,192) 37,893,661
$43,498,473
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable $ 256,944
Tenant security deposits 353,621
Accrued taxes 136,918
Other liabilities 586,430
Mortgage notes payable 28,794,212
Partners' Capital (Deficit)
General partners $ (309,009)
Limited partners (52,538 units
issued and outstanding) 13,679,357 13,370,348
$43,498,473
<FN>
See Accompanying Notes to Consolidated Financial Statements
b) SHELTER PROPERTIES V LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
February 29, 1996 February 28,1995
Revenues:
Rental income $3,000,255 $2,972,352
Other income 164,748 157,275
Casualty gain -- 31,949
Total revenues 3,165,003 3,161,576
Expenses:
Operating 828,784 803,500
General and administrative 74,110 85,510
Property management fees 156,291 153,542
Maintenance 374,595 314,997
Depreciation 739,785 701,561
Interest 678,487 697,541
Property taxes 202,069 189,969
Total expenses 3,054,121 2,946,620
Net income $ 110,882 $ 214,956
Net income allocated to general
partners (1%) $ 1,109 $ 2,150
Net income allocated to limited
partners (99%) 109,773 212,806
$ 110,882 $ 214,956
Net income per limited partnership unit $ 2.09 $ 4.05
<FN>
See Accompanying Notes to Consolidated Financial Statements
c) SHELTER PROPERTIES V LIMITED PARTNERSHIP
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
Limited
Partnership General Limited
Units Partners Partners Total
Original capital contributions 52,538 $ 2,000 $52,538,000 $52,540,000
Partners' (deficit) capital
at November 30, 1995 52,538 (310,118) 13,569,584 13,259,466
Net income for the three
months ended February 29, 1996 -- 1,109 109,773 110,882
Partners' (deficit) capital
at February 29, 1996 52,538 $(309,009) $13,679,357 $13,370,348
<FN>
See Accompanying Notes to Consolidated Financial Statements
d) SHELTER PROPERTIES V LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
February 29, 1996 February 28, 1995
Cash flows from operating activities:
Net income $ 110,882 $ 214,956
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 739,785 701,561
Amortization of discounts and loan costs 34,749 41,219
Gain on disposition of property, net of
insurance proceeds -- (31,949)
Change in accounts:
Restricted cash 5,107 (14,514)
Accounts receivable 8,538 (9,079)
Escrows for taxes and insurance 20,706 225,141
Other assets 58,062 6,595
Accounts payable (188,894) (213,555)
Tenant security deposit liabilities (7,284) 1,350
Accrued taxes (59,419) (298,875)
Other liabilities -- 11,594
Net cash provided by
operating activities 722,232 634,444
Cash flows from investing activities:
Property improvements and replacements (208,771) (258,168)
Deposits to restricted escrows (6,153) (9,037)
Receipts from restricted escrows -- 181,051
Insurance proceeds from property damage -- 7,039
Net cash used in
investing activities (214,924) (79,115)
Cash flows from financing activities:
Payments on mortgage notes payable (197,965) (181,589)
Partners' distributions -- (252,036)
Net cash used in
financing activities (197,965) (433,625)
Net increase in cash 309,343 121,704
Cash at beginning of period 3,256,141 3,245,424
Cash at end of period $3,565,484 $3,367,128
Supplemental disclosure of cash flow
information:
Cash paid for interest $ 643,738 $ 654,113
<FN>
See Accompanying Notes to Consolidated Financial Statements
e) SHELTER PROPERTIES V LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited financial statements 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. 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 month
period ended February 29, 1996, are not necessarily indicative of the results
that may be expected for the fiscal year ending November 30, 1996. For further
information, refer to the financial statements and footnotes thereto included
in the Partnership's annual report on Form 10-KSB for the year ended November
30, 1995.
Cash and Cash Equivalents:
Unrestricted - Unrestricted cash includes cash on hand and in banks, money
market funds and Certificates of Deposit with original maturities less than 90
days. At certain times, the amount of cash deposited at a bank may exceed the
limit on insured deposits.
Restricted cash - tenant security deposits - The Partnership requires
security deposits from lessees for the duration of the lease and such deposits
are considered restricted cash. Deposits are refunded when the tenant vacates,
provided the tenant has not damaged its space and is current on its rental
payments.
Certain reclassifications have been made to the 1995 information to conform
to the 1996 presentation.
Note B - Reconciliation of Cash Flows
The following is a reconciliation of the subtotal on the accompanying
statements of cash flows captioned "net cash provided by operating activities"
to "net cash used in operations," as defined in the partnership agreement.
However, "net cash used in 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.
For the Three Months Ended
February 29, 1996 February 28, 1995
Net cash provided by operating activities $ 722,232 $ 634,444
Payments on mortgage notes payable (197,965) (181,589)
Property improvements and replacements (208,771) (258,168)
Change in restricted escrows, net (6,153) 172,014
Changes in reserves for net operating
liabilities 163,184 291,343
Insurance proceeds from property damage -- 7,039
Additional reserves (500,000) (670,000)
Net cash used in operations $ (27,473) $ (4,917)
The General Partner reserved an additional $500,000 at February 29, 1996, to
fund continuing capital improvements and prepare for the possible refinancings
of Woodland Village, Lake Johnson Mews and Millhopper Village. In 1995 the
General Partner believed it to be in the best interest of the Partnership to
reserve an additional $670,000 to fund continuing capital improvements at the
seven properties.
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 payments to
affiliates for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership. Balances and other transactions with
Insignia Financial Group, Inc. and its affiliates in 1996 and 1995 are as
follows:
For the Three Months Ended
February 29, 1996 February 28, 1995
Property management fees $156,291 $153,542
Reimbursement for services of affiliates 51,390 46,385
The Partnership insures its properties under a master policy through an
agency and insurer unaffiliated with the Corporate General Partner. An
affiliate of the Corporate General Partner acquired, in the acquisition of a
business, certain financial obligations from an insurance agency which was
later acquired by the agent who placed the current year's master policy. The
current agent assumed the financial obligations to the affiliate of the
Corporate General Partner, who receives payments on these obligations from the
agent. The amount of the Partnership's insurance premiums accruing to the
benefit of the affiliate of the Corporate General Partner by virtue of the
agent's obligations is not significant.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Partnership's investment properties consist of seven apartment
complexes. The following table sets forth the average occupancy of the
properties for the quarters ended February 29, 1996, and February 28, 1995:
Occupancy for the Three Months Ended
February 29, 1996 February 28, 1995
Foxfire Apartments
Atlanta, Georgia 94% 96%
Old Salem Apartments
Charlottesville, Virginia 85% 94%
Woodland Village Apartments
Columbia, South Carolina 94% 94%
Lake Johnson Mews
Raleigh, North Carolina 95% 97%
The Lexington Apartments
Sarasota, Florida 97% 97%
Millhopper Village Apartments
Gainesville, Florida 99% 98%
Tar River Estates
Greenville, North Carolina 90% 91%
The Corporate General Partner attributes the decrease in occupancy at Old
Salem Apartments to the property billing utilities to the tenants. The
Corporate General Partner believes occupancy will improve with the new tenants
who will be willing to pay utilities in the near future.
The Partnership's net income for the three months ended February 29, 1996,
was $110,882. The Partnership reported net income of $214,956 for the three
months ended February 28, 1995. The decrease in net income is primarily
attributable to increased maintenance expense incurred by several of the
properties due to the harsh winter. The properties had increased costs due to
snow removal, grounds maintenance, and roof and gutter repairs due to damage
caused by the winter storms. Additionally, all of the properties have started
preparing for the spring and summer seasons which includes increased pool
maintenance and grounds improvement costs. Offsetting the decrease in net
income was a decrease in general and administrative expense as a result of
decreased miscellaneous legal, tax and license fees.
During the first quarter of 1995, the Partnership recorded a casualty gain
resulting from a fire at Woodland Village Apartments to the roof and interiors
of four units. The damage resulted in a gain of $31,949.
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 expenses. 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.
At February 29, 1996, the Partnership reported unrestricted cash of
$3,565,484 compared to $3,367,128 at February 28, 1995. Net cash provided by
operating activities increased as a result of the net decrease in the use of
cash for the payment and accrual of taxes. Net cash used to reduce accounts
payable also decreased in 1996 as compared to 1995. Net cash used in investing
activities increased as a result of a decrease in receipts from restricted
escrows in 1996 as compared to 1995. Net cash used in financing activities
decreased due a decrease in partners' distributions in 1996.
The Partnership has no material capital programs scheduled to be performed
in 1996, although certain routine capital expenditures and maintenance expenses
have been budgeted. These capital expenditures and maintenance expenses will
be incurred only if cash is available from operations or is received from the
capital reserve account.
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 property to adequately maintain the physical
assets and other operating needs of the Partnership. Such assets are currently
thought to be sufficient for any near-term needs of the Partnership. The
mortgage indebtedness of $28,794,212, net of discount, is amortized over
varying periods with required balloon payments ranging from January 1, 1997,
to December 10, 2016, at which time the properties will either be refinanced or
sold. The Corporate General Partner is currently assessing the feasibility of
refinancing the mortgages encumbering Woodland Village, Lake Johnson Mews and
Millhopper Village. Future cash distributions will depend on the levels of net
cash generated from operations, property sales, and the availability of cash
reserves. During the first three months of 1996 the Partnership made no
distributions. The Partnership anticipates making a distribution of
approximately $500,000 during the second quarter of 1996. The Partnership
made distributions of $252,036, for the corresponding period of 1995.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
Exhibit 27, Financial Data Schedule, is filed as an exhibit to this
report.
b) Reports on Form 8-K filed during the first quarter ended February 29,
1996:
None.
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 LIMITED PARTNERSHIP
By: Shelter Realty V Corporation
Corporate General Partner
By:/s/William H. Jarrard, Jr.
William H. Jarrard, Jr.
President
By:/s/Ronald Uretta
Ronald Uretta
Principal Financial Officer
and Principal Accounting Officer
Date: April 10, 1996