UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THEx
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 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 0-11985
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,
1995 1994
Multi-family apartment complexes, net of
accumulated depreciation of $36,595,812
and $34,905,809, respectively (Note 4) $37,325,298 $38,419,783
Cash and cash equivalents 1,390,703 598,443
Cash restricted for tenant security deposits 514,198 516,327
Cash restricted for capital improvements 681,563 919,047
Prepaid expenses and other assets 1,492,534 1,568,572
Deferred expenses, net of accumulated
amortization of $506,249 and $463,623,
respectively 539,382 582,008
Total assets $41,943,678 $42,604,180
LIABILITIES AND PARTNERS' DEFICIT
Mortgage notes payable $47,102,028 $47,390,488
Accounts payable 337,846 370,107
Accrued real estate taxes 1,998,608 1,895,473
Accrued expenses and other liabilities 1,221,502 1,219,501
Due to affiliates 1,060,927 1,266,260
Total liabilities 51,720,911 52,141,829
Contingencies (Note 2)
Partners' deficit (Note 3) (9,777,233) (9,537,649)
Total liabilities and partners' deficit $41,943,678 $42,604,180
The accompanying notes are an integral
part of the financial statements.
KRUPP REALTY LIMITED PARTNERSHIP-V
STATEMENTS OF OPERATIONS
For the Three Months For the Six Months
Ended June 30, Ended June 30,
1995 1994 1995 1994
Revenue:
Rental $3,652,061 $3,351,793 $7,233,226 $6,681,456
Interest income 35,064 22,452 55,404 39,808
Total revenue 3,687,125 3,374,245 7,288,630 6,721,264
Expenses:
Operating (including reim-
bursements to affiliates
of $61,698, $89,858, $84,788
and $179,717, respectively) 926,581 1,078,946 1,895,118 2,092,318
Maintenance 280,240 290,424 433,666 409,399
General and administrative
(including reimbursements
to affiliates of $12,972,
$20,566, $27,270 and $42,188,
respectively) 35,342 35,890 56,339 65,003
Real estate taxes 591,012 551,664 1,182,278 1,109,390
Management fees to an affiliate 138,975 123,316 259,132 266,456
Depreciation and amortization 875,884 837,830 1,732,629 1,652,256
Interest 980,519 999,394 1,969,052 1,997,995
Total expenses 3,828,553 3,917,464 7,528,214 7,592,817
Net loss $ (141,428) $ (543,219) $ (239,584) $ (871,553)
Allocation of net loss (Note 3):
Per Unit of Investor Limited
Partner Interest (35,200 Units
outstanding) $ (3.98) $ (15.28) $ (6.74) $ (24.51)
General Partners $ (1,414) $ (5,432) $ (2,396) $ (8,715)
The accompanying notes are an integral
part of the financial statements.
KRUPP REALTY LIMITED PARTNERSHIP-V
STATEMENTS OF CASH FLOWS
For the Six Months
Ended June 30,
1995 1994
Operating activities:
Net loss $ (239,584) $ (871,553)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 1,732,629 1,652,256
Decrease in cash restricted for tenant
security deposits 2,129 40,580
Decrease (increase) in prepaid expenses
and other assets 76,038 (88,869)
Decrease in accounts payable (112,317) (464,705)
Increase in accrued real estate taxes 103,135 43,314
Increase in accrued expenses and other
liabilities 2,001 65,572
Decrease in due to affiliates (205,333) (75,143)
Net cash provided by operating
activities 1,358,698 301,452
Investing activities:
Additions to fixed assets (595,518) (1,055,188)
Decrease in cash restricted for capital
improvements 237,484 397,011
Increase in accounts payable
related to fixed asset additions 80,056 178,441
Net cash used in investing
activities (277,978) (479,736)
Financing activities:
Principal payments on mortgage notes payable (288,460) (265,901)
Deferred expenses - (12,138)
Net cash used in investing
activities (288,460) (278,039)
Net increase (decrease) in cash and cash
equivalents 792,260 (456,323)
Cash and cash equivalents, beginning of period 598,443 1,159,301
Cash and cash equivalents, end of period $1,390,703 $ 702,978
The accompanying notes are an integral
part of the financial statements.
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,
1994 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, 1995, its
results of operations for the three and six months ended June 30, 1995
and 1994 and its cash flows for the six months ended June 30, 1995 and
1994. Certain prior year balances have been reclassified to conform
with the current period financial statement presentation.
The results of operations for the three and six months ended June 30,
1995 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)Legal Proceeding
The Partnership is a defendant in a class action suit related to the
practice of giving discounts for the early or timely payments of rent at
Park Place. The central issue of the complaint was whether the
operative lease, by allowing tenants a discount, of typically $30, if
rent was paid on or before the first day of the month, violated a
Chicago municipal ordinance relating to late fee charges. The ordinance
in question limited late fee charges to $10 per month if the rent was
more than 5 days late. The allegation was that, notwithstanding the
stated rental rate and printed discount, the practice represented an
unlawful means of exacting late fee charges. In addition to seeking
damages for any "forfeited" discounts, plaintiffs seek statutory damages
of two months rent per lease violation plus reasonable attorneys' fees.
To be eligible for such punitive damages plaintiffs must prove that
defendants deliberately used a provision prohibited by the ordinance.
During 1994, the Court ruled in favor of the Defendants, and accepted
the Partnership's Motion to Dismiss the Plaintiff's Third Amended
Complaint. The Plaintiffs have filed an appeal with the Appellate Court
of Illinois, First District, which is pending. Although management
believes that the defendants will prevail on the issue of statutory
damages, the ultimate outcome of this litigation, including an estimate
of any potential loss, cannot be presently determined and accordingly no
provision for loss has been made in the accompanying financial
statements.
Continued
KRUPP REALTY LIMITED PARTNERSHIP-V
NOTES TO FINANCIAL STATEMENTS - Continued
(3)Changes in Partners' Deficit
A summary of changes in Partners' Deficit for the six months ended June
30, 1995 is as follows:
Investor Original Total
Limited Limited General Partners'
Partners Partner Partners Deficit
Balance at
December 31, 1994 $(8,903,710) $(234,539) $(399,400) $(9,537,649)
Net loss (237,188) - (2,396) (239,584)
Balance at
June 30, 1995 $(9,140,898) $(234,539) $(401,796) $(9,777,233)
(4)Subsequent Event
On July 19, 1995, the Partnership sold Marine Terrace Apartments for
$6,156,500 resulting in a gain on the sale of approximately $3 million
for financial reporting purposes. Marine Terrace is a 187 unit complex
located in Chicago, Illinois. The Partnership used the proceeds to
satisfy the existing mortgage and pay other partnership liabilities.
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 borrowing sources as current debt matures. 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 and after paying off any
existing obligations.
The Partnership's major capital improvement project, the repair of Park
Place's building facade, is nearing completion as of June 30, 1995. The
Partnership anticipates that the restoration project will be completed in
1995, and will greatly enhance the appearance of the property. This
improvement, along with extensive interior improvements, is being funded
from both established reserves and cash generated by the property and has
resulted in both increased rents and increased occupancy.
On July 19, 1995, the Partnership sold Marine Terrace Apartments for
$6,156,500 resulting in a gain on the sale of approximately $3 million for
financial reporting purposes. The Partnership will use the proceeds to
satisfy the existing mortgage and to payoff closing costs and other
Partnership liabilities.
Cash Flow
Shown below is the calculation of Cash Flow for the six months ended
June 30, 1995.
Rounded to $1,000
Net loss for tax purposes $ (215,000)
Items not requiring (requiring)
the use of operating funds:
Tax basis depreciation and amortization 1,708,000
Expenditures for capital improvements (596,000)
Principal payments on mortgage notes payable (288,000)
Working capital reserves (650,000)
Cash Flow deficit $ (41,000)
Continued
KRUPP REALTY LIMITED PARTNERSHIP-V
Operations
The increase in rental revenue for the three and six months ended June
30, 1995 as compared to the same periods in 1994 is due to increases in
rental rates at Park Place, Marine Terrace and Century II during the second
half of 1994. Average residential occupancy for the Partnership was 94%
for the six months ended June 30, 1995 and 93% for the same period in 1994.
The increase in interest income for the three and six months ended June 30,
1995 as compared to 1994 is due to a rise in the short-term interest rates.
Total expenses of the Partnership for the three and six months ended
June 30, 1995 as compared to the same periods in 1994 have remained stable
with the exception of operating expenses and real estate taxes. The
decrease in operating expenses is due to management's efforts to reduce
reimbursable operating costs. Certain of these cost savings are
anticipated to continue throughout 1995. The increase in real estate taxes
is primarily due to an increase in assessed property value at Park Place
which is directly related to the capital improvement project. Depreciation
expense has increased as a result of these extensive improvements.
KRUPP REALTY LIMITED PARTNERSHIP-V
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Partnership is a defendant in a class action suit related to the
practice of giving discounts for the early or timely payments of rent at
Park Place. The central issue of the complaint was whether the
operative lease, by allowing tenants a discount, of typically $30, if
rent was paid on or before the first day of the month, violated a
Chicago municipal ordinance relating to late fee charges. The ordinance
in question limited late fee charges to $10 per month if the rent was
more than 5 days late. The allegation was that, notwithstanding the
stated rental rate and printed discount, the practice represented an
unlawful means of exacting late fee charges. In addition to seeking
damages for any "forfeited" discounts, plaintiffs seek statutory damages
of two months rent per lease violation plus reasonable attorneys' fees.
To be eligible for such punitive damages plaintiffs must prove that
defendants deliberately used a provision prohibited by the ordinance.
During 1994, the Court ruled in favor of the Defendants, and accepted
the Partnership's Motion to Dismiss the Plaintiff's Third Amended
Complaint. The Plaintiffs have filed an appeal with the Appellate Court
of Illinois, First District, which is pending.
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
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 and Chief Accounting Officer of The Krupp
Corporation, a General Partner.
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DATE: July 31, 1995
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