UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 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 0-14393 Krupp Cash Plus Limited Partnership Massachusetts 04-2865878 (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 CASH PLUS LIMITED PARTNERSHIP BALANCE SHEETS ASSETS September 30, December 31, 1995 1994 Real estate assets: Retail centers, less accumulated depreciation of $14,688,992 and $13,258,690, respectively $30,024,277 $31,025,555 Mortgage-backed securities ("MBS") (Note 2) 5,350,400 5,727,728 Total real estate assets 35,374,677 36,753,283 Cash and cash equivalents 3,944,767 2,319,369 Other assets 981,148 833,507 Total assets $40,300,592 $39,906,159 LIABILITIES AND PARTNERS' EQUITY Accounts payable $ 254,395 $ 358,180 Accrued expenses and other liabilities (Note 3) 1,782,859 851,020 Total liabilities 2,037,254 1,209,200 Partners' equity (deficit)(Note 4) Limited Partners (4,000,100 units outstanding) 38,397,959 38,823,966 General Partners (134,621) (127,007) Total Partners' equity 38,263,338 38,696,959 Total liabilities and Partners' equity $40,300,592 $39,906,159 The accompanying notes are an integral part of the financial statements. KRUPP CASH PLUS LIMITED PARTNERSHIP STATEMENTS OF OPERATIONS For the Three Months Ended For the Nine Months Ended September 30, September 30, 1995 1994 1995 1994 Revenue: Rental $1,415,939 $1,107,926 $4,406,111 $3,785,874 Interest income - MBS 113,783 126,448 353,493 402,446 Interest income - other 57,056 20,563 146,129 53,421 Total revenue 1,586,778 1,254,937 4,905,733 4,241,741 Expenses: Operating (including reimbursements to affiliates of $46,671, $71,394, $108,172 and $214,182, respectively) 261,302 313,005 779,634 931,762 Maintenance 69,098 64,485 203,272 206,526 General and administrative (including reimbursements to affiliates of $28,251, $47,312, $84,754 and $141,936, respectively) 48,089 62,140 140,782 200,152 Real estate taxes 281,776 240,273 883,713 785,419 Management fees to an affiliate 95,726 65,409 230,098 196,467 Depreciation 463,215 465,655 1,430,302 1,393,408 Total expenses 1,219,206 1,210,967 3,667,801 3,713,734 Net income $ 367,572 $ 43,970 $1,237,932 $ 528,007 Allocation of net income (Note 4): Average net income per Unit of Depositary Receipts (4,000,000 Units) $ .09 $ .01 $ .30 $ .13 Corporate Limited Partner $ 9 $ 1 $ 30 $ 13 General Partners $ 7,351 $ 879 $ 24,758 $ 10,560 The accompanying notes are an integral part of the financial statements. KRUPP CASH PLUS LIMITED PARTNERSHIP STATEMENTS OF CASH FLOWS For the Nine Months Ended September 30, 1995 1994 Operating activities: Net income $ 1,237,932 $ 528,007 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 1,430,302 1,393,408 Amortization of MBS premium, net 1,231 1,454 Decrease (increase) in other assets (147,641) 4,845 Decrease in accounts payable (103,785) (286) Increase in accrued expenses and other liabilities 931,839 493,735 Net cash provided by operating activities 3,349,878 2,421,163 Investing activities: Additions to fixed assets (429,024) (655,122) Decrease in accounts payable for fixed asset additions - (1,092,583) Principal collections on MBS 376,097 1,444,435 Net cash used for investing activities (52,927) (303,270) Financing activity: Distributions to partners (1,671,553) (1,630,415) Net increase in cash and cash equivalents 1,625,398 487,478 Cash and cash equivalents, beginning of period 2,319,369 1,897,454 Cash and cash equivalents, end of period $ 3,944,767 $ 2,384,932 The accompanying notes are an integral part of the financial statements. KRUPP CASH PLUS LIMITED PARTNERSHIP 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. However, in the opinion of the General Partners of Krupp Cash Plus Limited Partnership (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 only of normal recurring accruals) necessary to present fairly the Partnership's financial position as of September 30, 1995, its results of operations for the three and nine months ended September 30, 1995 and 1994, and its cash flows for the nine months ended September 30, 1995 and 1994. The results of operations for the three and nine months ended September 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. Certain prior year balances have been reclassified to conform with the current year financial statement presentation. (2) MBS At September 30, 1995, the Partnership's MBS Portfolio had a market value of $5,609,000 and unrealized gains of $258,000. The portfolio has maturity dates ranging from 2008 to 2017. (3) Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consisted of the following at September 30, 1995 and December 31, 1994: September 30, December 31, 1995 1994 Accrued real estate taxes $ 1,077,212 $ 721,200 Prepaid rent 594,994 95,774 Other liabilities 110,653 34,046 $ 1,782,859 $ 851,020 Continued KRUPP CASH PLUS LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS - Continued (4) Changes in Partners' Equity A summary of changes in Partners' equity (deficit) for the nine months ended September 30, 1995 is as follows: Corporate Total Limited General Partners' Unitholders Partner Partners Equity Balance at December 31, 1994 $ 38,822,766 $1,200 $(127,007) $38,696,959 Net income 1,213,144 30 24,758 1,237,932 Distribution (1,639,140) (41) (32,372) (1,671,553) Balance at September 30, 1995 $ 38,396,770 $1,189 $(134,621) $38,263,338 KRUPP CASH PLUS LIMITED PARTNERSHIP Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources The Partnership's liquidity is derived from the operations of the Partnership's properties, Highpoint National Furniture Mart ("Highpoint"), Luria's Plaza, and Tradewinds Shopping Center ("Tradewinds"), earnings and collections on MBS, and interest earned on its short-term investments. The Partnership's liquidity is utilized to pay operating costs and to fund distributions to the partners. Management has found it necessary in recent years to fund a large share of tenant buildouts to attract quality tenants to our retail centers. This policy has proven to be successful in attracting tenants and maintaining high occupancy at properties where it has been undertaken and is expected to continue through 1995. The Partnership continues to renovate Highpoint by reconfiguring space for new tenants in compliance with present building code standards. Renovations of one floor were completed during the first quarter. Improvements for a second floor began in May and were completed by the end of the third quarter. The remaining improvements at Highpoint are anticipated to be completed by 1996. Significant exterior renovations have been started in the second and third quarters of 1995 at Tradewinds and are expected to be completed in the fourth quarter. Management believes these improvements are necessary for Tradewinds to remain competitive as it faces increased competition from newer centers. Principal collections on MBS are at low levels due to a decrease in refinancing activity in 1995. Management expects some slight pickup in refinancing activity for these MBS due to low interest rates, but not a significant pickup since the underlying borrowers have previously had opportunities to refinance at low interest rates. Management will continue to monitor liquidity levels to assure that working capital levels are being maintained. Continued KRUPP CASH PLUS LIMITED PARTNERSHIP Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINAL CONDITION AND RESULTS OF OPERATIONS - Continued Distributable Cash Flow and Net Cash Proceeds from Capital Transactions Shown below is the calculation of Distributable Cash Flow and Net Cash Proceeds from Capital Transactions as defined by Section 17 of the Partnership Agreement, for the nine months ended September 30, 1995 and for the period from inception through September 30, 1995. The General Partners provide certain of the information below to meet requirements of the Partnership Agreement and because they believe that it is an appropriate supplemental measure of operating performance. However, Distributable Cash Flow and Net Cash Proceeds from Capital Transactions should not be considered by the reader as a substitute to net income as an indicator of the Partnership's operating performance or to cash flow as a measure of liquidity. (Rounded to $1,000 except per Unit amounts) For the nine months Inception to ended September 30, September 30, 1995 1995 Distributable Cash Flow: Net income for tax purposes $1,479 $ 21,585 Items not requiring or (not providing) the use of operating funds: Tax basis depreciation and amortization 1,209 16,036 Amortization of MBS premium, net 1 13 Interest income on note receivable - (371) Gain on sale of assets - (1,686) Additions to fixed assets (429) (7,233) Cash from vacancy guarantee on Luria's Plaza - 873 Fixed asset additions funded from cash reserves - 865 Operating reserve - (1,070) Total Distributable Cash Flow ("DCF") $2,260 $ 29,012 Limited Partners' Share of DCF $2,215 $ 28,431 Limited Partners' Share of DCF per Unit$ .55 $ 7.10 (c) General Partners' Share of DCF $ 46 $ 581 Net Proceeds from Capital Transactions: Principal collections on MBS $ 376 $ 14,241 Proceeds from sale of MBS - 19,018 Net proceeds from sale of property including interest on mortgage note receivable - 1,208 Mortgage note - 7,150 Reinvestment of MBS principal collections - (16,141) Total Net Proceeds from Capital Transactions $ 376 $ 25,476 Distributions: Limited Partners $1,659(a) $ 53,251(a)(b) Limited Partners' Average per Unit $ .41(a) $ 13.31(a)(b)(c) General Partners $ 45(a) $ 580(a) Total Distributions $1,677(a) $ 53,804(a) Continued KRUPP CASH PLUS LIMITED PARTNERSHIP Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINAL CONDITION AND RESULTS OF OPERATIONS - Continued Distributable Cash Flow and Net Cash Proceeds from Capital Transactions - Continued (a) Includes an estimate of the distribution to be paid in November, 1995. (b) Includes a $7,150,000 note which was distributed from the Partnership to the Evergreen Plaza Note-Holding Trust whose beneficiaries were the Partnership's Unitholders on record on May 31, 1990. (c) Limited Partners average per Unit return of capital as of November, 1995 is $6.21 [$13.31 - $7.10]. Operations The Partnership experienced increased rental revenues during the three and nine months ended September 30, 1995 as compared to the same periods in 1994. The Partnership benefited in 1994 from High Point's refurbished show-room spaces, and have received higher rents in 1995 from the refurbished floors. The renovated and expanded Cobb Theater, a major tenant located at Luria's Plaza, was reopened in February 1994 with six new screens. The theater expansion has attracted new tenants, and existing tenants are either renewing their current space or expanding into previously vacant space. MBS interest income decreased during the first nine months of 1995 as compared to the same period in 1994 due to the large prepayments of principal which occurred during the first six months of 1994. Interest income on short- term investments increased during these same periods due to higher average cash balances. Total expenses of the partnership for the three and nine months ended September 30, 1995 remained relatively stable. Real estate taxes increased due to expected tax increases at Luria's Plaza and Tradewinds. The decrease in operating and general and administrative expenses was due to management's efforts to reduce reimbursable operating costs. Certain of these cost savings are anticipated to continue through 1995. Depreciation has increased in conjunction with the increase in fixed asset expenditures and tenant buildouts in 1994 and 1995. KRUPP CASH PLUS LIMITED PARTNERSHIP 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 SIGNATURE 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 Cash Plus Limited Partnership (Registrant) BY: /s/ Marianne Pritchard Marianne Pritchard Treasurer and Chief Accounting Officer of the Krupp Corporation, a General Partner of the Partnership DATE: October 30, 1995