UNITES STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1994 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 0-11985 Krupp Realty Limited Partnership-V Massachusetts 04-2796207 (State or other jurisdiction of (IRS employer incorporation or organization) identification no.) 470 Atlantic Avenue, Boston, Massachusetts 02210 (Address of principal executive offices) (Zip Code) (617) 423-2233 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No PART I. FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS KRUPP REALTY LIMITED PARTNERSHIP-V BALANCE SHEETS ASSETS June 30, December 31, 1994 1993 Multi-family apartment complexes, net of accumulated depreciation of $33,178,750 and $31,569,120, respectively $38,185,253 $38,739,695 Cash and cash equivalents 702,978 713,196 Cash restricted for tenant security deposits 526,046 566,626 Cash restricted for capital improvements 1,883,331 2,280,342 Prepaid expenses and other assets 1,699,606 1,610,737 Deferred expenses, net of accumulated amortization of $420,997 and $378,371, respectively (Note 2) 624,634 655,122 Total assets $43,621,848 $44,565,718 LIABILITIES AND PARTNERS' DEFICIT Mortgage notes payable $47,667,426 $47,933,327 Accounts payable 129,375 147,975 Accrued expenses and other liabilities 3,473,850 3,186,523 Due to affiliates 1,310,185 1,385,328 Total liabilities 52,580,836 52,653,153 Partners' deficit (Note 3) (8,958,988) (8,087,435) Total liabilities and partners' deficit $43,621,848 $44,565,718 The accompanying notes are an integral part of the financial statements. -2- KRUPP REALTY LIMITED PARTNERSHIP-V STATEMENTS OF OPERATIONS For the Three Months For the Six Months Ended June 30, Ended June 30, 1994 1993 1994 1993 Revenue: Rental $3,351,793 $3,397,390 $6,681,456 $ 6,653,869 Interest income 22,452 54,070 39,808 95,812 Total revenue 3,374,245 3,451,460 6,721,264 6,749,681 Expenses: Operating (including reim- bursements to affiliates of $89,858, $89,859, $179,717 and $179,718, respectively) 1,038,321 1,127,350 2,092,318 2,188,844 Maintenance 290,424 222,445 409,399 359,288 General and administrative (including reimbursements to affiliates of $20,566, $20,286, $42,188 and $40,628, respectively) 35,890 32,209 65,003 63,561 Real estate taxes 551,664 556,004 1,109,390 1,128,966 Management fees to an affiliate 123,316 103,330 266,456 238,124 Depreciation and amortization 837,830 797,863 1,652,256 1,595,038 Interest 1,040,019 1,322,359 1,997,995 2,651,569 Total expenses 3,917,464 4,161,560 7,592,817 8,225,390 Net loss $ (543,219) $ (710,100) $ (871,553) $(1,475,709) Allocation of net loss (Note 3): Per Unit of Investor Limited Partner Interest (35,200 Units outstanding) $ (15.28) $ (19.97) $ (24.51) $ (41.50) General Partners $ (5,432) $ (7,101) $ (8,715) $ (14,757) The accompanying notes are an integral part of the financial statements. -3- KRUPP REALTY LIMITED PARTNERSHIP-V STATEMENTS OF CASH FLOWS For the Six Months Ended June 30, 1994 1993 Operating activities: Net loss $ (871,553) $(1,475,709) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 1,652,256 1,595,038 Amortization of mortgage premium - (105) Decrease in cash restricted for tenant security deposits 40,580 8,771 Decrease (increase) in prepaid expenses and other assets (88,869) 244,649 Increase (decrease) in accounts payable (18,600) 164,490 Increase in accrued expenses and other liabilities 287,327 890,353 Increase (decrease) in due to affiliates (75,143) 227,446 Net cash provided by operating activities 925,998 1,654,933 Investing activities: Additions to fixed assets (1,055,188) (351,576) Decrease (increase) in cash restricted for capital improvements 397,011 (13,327) Net cash used for investing activities (658,177) (364,903) Financing activities: Principal payments on mortgage notes payable (265,901) (129,113) Deferred expenses (12,138) - Net cash used for investing activities (278,039) (129,113) Net increase (decrease) in cash and cash equivalents (10,218) 1,160,917 Cash and cash equivalents, beginning of period 713,196 4,118,300 Cash and cash equivalents, end of period $ 702,978 $ 5,279,217 The accompanying notes are an integral part of the financial statements. -4- KRUPP REALTY LIMITED PARTNERSHIP-V NOTES TO FINANCIAL STATEMENTS (1) Accounting Policies Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in this report on Form 10-Q pursuant to the Rules and Regulations of the Securities and Exchange Commission. In the opinion of the General Partners of Krupp Realty Limited Partnership-V (the "Partnership"), the disclosures contained in this report are adequate to make the information presented not misleading. See Notes to Financial Statements included in the Partnership's Annual Report on Form 10-K for the year ended December 31, 1993 for additional information relevant to significant accounting policies followed by the Partnership. In the opinion of the General Partners of the Partnership, the accompanying unaudited financial statements reflect all adjustments (consisting of only normal recurring accruals) necessary to present fairly the Partnership's financial position as of June 30, 1994, its results of operations for the three and six months ended June 30, 1994 and 1993 and its cash flows for the six months ended June 30, 1994 and 1993. Certain prior year balances have been reclassified to conform with the current period consolidated financial statement presentation. The results of operations for the three and six months ended June 30, 1994 are not necessarily indicative of the results which may be expected for the full year. See Management's Discussion and Analysis of Financial Condition and Results of Operations included in this report. (2) Related Party Transactions Amounts paid to affiliates of the General Partners during the six months ended June 30, 1994 and for the year ended December 31, 1993 for costs related to refinancing activities of the Partnership's mortgage notes were $11,444 and $27,658, respectively. (3) Changes in Partners' Deficit A summary of changes in Partners' Deficit for the six months ended June 30, 1994 is as follows: Investor Original Total Limited Limited General Partners' Partners Partner Partners Deficit Balance at December 31, 1993 $(7,467,998) $(234,539) $(384,898) $(8,087,435) Net loss (862,838) - (8,715) (871,553) Balance at June 30, 1994 $(8,330,836) $(234,539) $(393,613) $(8,958,988) Continued -5- KRUPP REALTY LIMITED PARTNERSHIP-V Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources The Partnership's ability to generate cash adequate to meet its needs is dependent primarily upon the successful operations of its real estate investments. Such ability is also dependent upon the future availability of bank borrowings, the potential refinancing and sale of the Partnership's remaining real estate investments. These sources of liquidity will be used by the Partnership for payment of expenses related to real estate operations, debt service, capital improvements and expenses. Cash flow, if any, as calculated under Section 8.2(a) of the Partnership Agreement ("Cash Flow"), will then be available for distribution to the Partners. The General Partners discontinued distributions during 1990 due to insufficient operating cash flow. The Partnership will resume distributions when the properties generate sustainable cash flow in excess of operating and capital improvement needs to provide for such distributions. The Partnership's major capital improvement project, the repair of Park Place's building facade, is approximately 51% complete as of June 30, 1994. The Partnership anticipates that the restoration project will be completed on schedule in the fourth quarter of 1994, and will greatly enhance the appearance of the property. This improvement, along with extensive interior improvements, is being funded from established reserves and is expected to result in both increased rents and increased occupancy. Prior to Park Place's refinancing, management suspended payment of property management fees and expense reimbursements to an affiliate. At June 30, 1994, past due fees and reimbursements totalled approximately $1,300,000. Subsequent to the refinancing, the Partnership resumed regular payment of property management fees and expense reimbursements and expects to generate sufficient cash flow to begin to repay the accrued obligation. Cash Flow Shown below is the calculation of Cash Flow for the six months ended June 30, 1994. Rounded to $1,000 Net loss for tax purposes $ (848,000) Items not requiring (requiring or not providing) the use of operating funds: Tax basis depreciation and amortization 1,629,000 Expenditures for capital improvements (1,055,000) Principal payments on mortgage notes payable (266,000) Cash Flow Deficit $ (540,000) Continued -6- KRUPP REALTY LIMITED PARTNERSHIP-V Operations Rental revenue increased by $28,000 during the six months ended June 30, 1994 as compared to June 30, 1993. The increase in rental revenue is primarily due to an increase in rental rates at Park Place and Marine Terrace. Interest income for the three and six months ended June 30, 1994 and 1993 decreased due to the reduced earnings of short term investments. Operating expenses for the three and six months ended June 30, 1994 and 1993 remained relatively stable with the exception of depreciation and interest expenses. Depreciation expense has increased as a result of the capital improvement program at Park Place. Interest expense has decreased by approximately $645,000 for the six months ended June 30, 1994 as a result of the refinancing of Park Place's first mortgage during the third quarter of 1993. -7- KRUPP REALTY LIMITED PARTNERSHIP-V PART II - OTHER INFORMATION Item 1. Legal Proceedings Response: None Item 2. Changes in Securities Response: None Item 3. Defaults upon Senior Securities Response: None Item 4. Submission of Matters to a Vote of Security Holders Response: None Item 5. Other Information Response: None Item 6. Exhibits and Reports on Form 8-K Response: None -8- 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. Krupp Realty Limited Partnership-V (Registrant) BY: /s/Marianne Pritchard Marianne Pritchard Treasurer of The Krupp Corporation, a General Partner. DATE: August 1, 1994 -9-