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 March 31, 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 0-18498
Krupp Cash Plus-V Limited Partnership
Massachusetts 04-3021560
(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-V LIMITED PARTNERSHIP
BALANCE SHEETS
ASSETS
March 31, December 31,
1996 1995
Real estate assets:
Investment in Joint Venture, net of
accumulated amortization of
acquisition costs of $26,146
and $0, respectively (Note 2) $23,147,913 $23,187,379
Mortgage-backed securities ("MBS"), net of
accumulated amortization (Note 3) 873,157 915,554
Total real estate assets 24,021,070 24,102,933
Cash and cash equivalents 1,829,372 2,101,121
Other assets 33,194 36,190
Total assets $25,883,636 $26,240,244
LIABILITIES AND PARTNERS' EQUITY
Accrued expenses and other liabilities (Note 4) $ 4,838 $ 9,729
Partners' equity (Note 5):
Unitholders
(2,060,350 Units outstanding) 25,925,022 26,273,929
Corporate Limited Partner
(100 Units outstanding) (552) (535)
General Partners (45,672) (42,879)
Total Partners' equity 25,878,798 26,230,515
Total liabilities and
Partners' equity $25,883,636 $26,240,244
The accompanying notes are an integral
part of the financial statements.
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
STATEMENTS OF INCOME
For the Three Months
Ended March 31,
1996 1995
Revenue:
Partnership's share of Joint Venture
net income (Note 2) $206,240 $223,576
Interest income - MBS (Note 3) 20,406 22,300
Interest income - other 26,812 37,755
Total revenue 253,458 283,631
Expenses:
General and administrative (Note 6) 23,987 24,707
Asset management fees (Note 6) 35,457 35,552
Amortization of acquisition costs
(Note 2) 26,146 -
Total expenses 85,590 60,259
Net income $167,868 $223,372
Allocation of net income (Note 5):
Unitholders
(2,060,350 Units outstanding) $166,181 $221,127
Net income per Unit of
Depositary Receipt $ .08 $ .11
Corporate Limited Partner
(100 Units outstanding) $ 8 $ 11
General Partners $ 1,679 $ 2,234
The accompanying notes are an integral
part of the financial statements.
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
For the Three Months
Ended March 31,
1996 1995
Operating activities:
Net income $ 167,868 $ 223,372
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization of MBS discount, net (569) (350)
Amortization of acquisition costs 26,146 -
Distributions from Joint Venture 206,240 223,576
Partnership's share of Joint Venture net
income (206,240) (223,576)
Decrease in other assets 2,996 6,113
Decrease in accrued expenses and other
liabilities (4,891) (2,328)
Net cash provided by operating
activities 191,550 226,807
Investing activities:
Distributions from Joint Venture in excess
of net income 13,320 18,938
Principal collections on MBS 42,966 27,598
Increase in other investments - (977,406)
Net cash provided by (used in)
investing activities 56,286 (930,870)
Financing activity:
Distributions (519,585) (522,239)
Net decrease in cash and cash equivalents (271,749) (1,226,302)
Cash and cash equivalents, beginning
of period 2,101,121 2,665,531
Cash and cash equivalents, end
of period $1,829,372 $1,439,229
The accompanying notes are an integral
part of the financial statements.
KRUPP CASH PLUS-V 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. In the opinion of the General Partners of Krupp
Cash Plus-V 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,
1995 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 March 31, 1996, and
its results of operations and cash flows for the three months ended
March 31, 1996 and 1995.
The results of operations for the three months ended March 31, 1996 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) Investment in Joint Venture
The Partnership and an affiliate of the Partnership own a 49.9% and
50.1% interest in Spring Valley Marketplace Joint Venture (the "Joint
Venture"), respectively. The express purpose of entering into the Joint
Venture was to acquire and operate Spring Valley Marketplace (the
"Marketplace"). The Marketplace is a shopping center containing 314,673
net leasable square feet located in Spring Valley, Rockland County, New
York.
The investment balance reflects the original cost of the investment,
including $1,882,546 of acquisition costs which are being amortized over
the remaining life of the underlying asset.
Condensed financial statements of the Joint Venture are as follows:
Spring Valley Partnership
Condensed Balance Sheets
ASSETS
March 31, December 31,
1996 1995
Property, at cost $ 53,410,413 $53,409,298
Accumulated depreciation (12,549,726) (12,084,310)
40,860,687 41,324,988
Other assets 1,911,538 1,491,737
Total assets $ 42,772,225 $42,816,725
LIABILITIES AND PARTNERS' EQUITY
Total liabilities $ 215,707 $ 233,513
Partners' equity:
The Partnership 21,291,513 21,304,833
Joint Venture partner 21,265,005 21,278,379
Total Partners' equity 42,556,518 42,583,212
Total liabilities and
Partners' equity $ 42,772,225 $42,816,725
Spring Valley Partnership
Condensed Statements of Operations
For the Three Months
Ended March 31 ,
1996 1995
Revenue $ 1,831,357 $1,566,509
Property operating
expenses 952,636 665,904
Depreciation 465,415 452,556
Net income $ 413,306 $ 448,049
(3) Mortgage Backed Securities
The MBS held by the Partnership are issued by the Federal Home Loan
Mortgage Corporation. The following is additional information on the
MBS held:
March 31, December 31,
1996 1995
Face Value $888,231 $931,197
Amortized Cost $873,157 $915,554
Estimated Market Value $936,000 $940,000
Coupon rates of the MBS range from 9.0% to 9.5% per annum and mature in
the years 2016 and 2017. The Partnership's MBS portfolio had gross
unrealized gains of approximately $63,092 and $24,446 at March 31, 1996
and December 31, 1995, respectively. The Partnership does not expect to
realize these gains as it has the intention and ability to hold the MBS
until maturity.
(4) Accrued Expenses and Other Liabilities
Accrued expenses and other liabilities consist of the following:
March 31, December 31,
1996 1995
Accrued audit expense $ 4,838 $ 9,729
(5) Changes in Partners' Equity
A summary of changes in Partners' equity (deficit) for the three months
ended March 31, 1996 is as follows:
Corporate Total
Limited General Partners'
Unitholders Partner Partners Equity
Balance at
December 31, 1995 $26,273,929 $(535) $(42,879) $26,230,515
Net income 166,181 8 1,679 167,868
Distributions (515,088) (25) (4,472) (519,585)
Balance at
March 31, 1996 $25,925,022 $(552) $(45,672) $25,878,798
(6) Related Party Transactions
Under the terms of the Partnership Agreement, the General Partners or
their affiliates are entitled to an Asset Management Fee for the
management of the Partnership's business equal to .5% per annum of the
Total Invested Assets of the Partnership (as defined in the prospectus),
payable quarterly. The Partnership also reimburses affiliates of the
General Partners for certain expenses incurred in connection with the
preparation and mailing of reports and other communications to the
Limited Partners.
Amounts paid or accrued to the General Partners or their affiliates were
as follows:
For the Three Months
Ended March 31,
1996 1995
Asset management fees $35,457 $35,552
Expense reimbursements 12,294 14,645
Charged to operations $47,751 $50,197
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
The Partnership's sources of liquidity are derived from the distributions
it receives from its interest in the Joint Venture, earnings and
collections on its MBS, and interest earned on its short-term investments.
After experiencing some retail difficulties in 1992 and 1993, the
Marketplace has become a strong contributor to the Partnership's liquidity.
Revenues at the Marketplace have steadily increased since 1992 as strong
national tenants have positively impacted the shopping center. In order to
remain competitive within it's immediate market, the Marketplace is
expected to spend approximately $275,000 for capital improvements in 1996,
most of which are tenant buildouts to attract and retain quality tenants at
the shopping center.
Liquidity provided by the MBS comes primarily from interest income as
principal prepayments have decreased significantly from the principal
amounts received in 1994 and 1993. During those years, prepayments were
significant due to the low interest rate environment. The liquidity
provided by the principal prepayments has been used to fund distributions,
which has resulted in a reduction of the Partnership's capital resources.
The Partnership holds MBS that are guaranteed by the Federal Home Loan
Mortgage Corporation ("FHLMC"). The principal risks with respect to MBS
are the credit worthiness of FHLMC and the risk that the current value of
any MBS may decline as a result of changes in market interest rates. The
General Partners believe that this risk is minimal due to the fact that the
Partnership has the ability to hold these securities to maturity.
The most significant demands on the Partnership's liquidity are the
quarterly distributions. Distributions are funded by MBS principal
prepayments, distribu-tions received from the Marketplace and working
capital reserves. Due to the decrease in MBS principal prepayments and its
effect on the Partnership's liquidity, the Partnership may need to
periodically adjust the distribution rate. Therefore, sustaining the
distribution rate is mainly dependent upon the future performance of the
Marketplace.
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 three months ended March 31, 1996 and the
period from inception to March 31, 1996. The General Partners provide
certain of the information below to meet requirements of the Partnership
Agreement and because they believe that 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.
(In $1,000's except per Unit amounts)
For the Three Months Inception to
Ended March 31, March 31,
1996 1996
Distributable Cash Flow:
Net income for tax purposes $ 244 $ 6,635
Items providing / not requiring or
(not providing) the use of
operating funds:
Amortization of acquisition costs 26 26
Amortization of organization costs - 50
Distributions from Joint Venture 220 9,686
Partnership's share of Joint Venture
taxable net income (282) (6,509)
Total Distributable Cash Flow ("DCF") $ 208 $ 9,888
Limited Partners' Share of DCF $ 206 $ 9,790
Limited Partners' Share of DCF
per Unit $ .10 $ 4.76
General Partners' Share of DCF $ 2 $ 98
Net Proceeds from Capital Transactions:
Principal collections on MBS, net $ 42 $ 4,495
Distributions:
Limited Partners $ 515(a) $16,011(b)
Limited Partners' Average
per Unit $ .25(a) $ 7.77(b)(c)
General Partners $ 2(a) $ 101(b)
Total Distributions $ 517(a) $16,112(b)
(a) Represents an estimate of the distribution to be paid in May, 1996.
(b) Includes an estimate of the distribution to be paid in May, 1996.
(c) Limited Partners average per Unit return of capital as of May, 1996
is $3.01 ($7.77 - $4.76).
Operations
Partnership
Overall, Distributable Cash Flow, as defined in the Partnership Agreement,
decreased $44,000 when comparing the quarter ending March 31, 1996 to the
quarter ending March 31, 1995. This is primarily due to the decrease in
distributions received from the Joint Venture and a decline in interest
income.
The Partnership's revenue has decreased for the three months ended March
31, 1996 as compared to the same period in 1995, due to a decrease in net
income generated by the Marketplace. MBS interest income decreased for the
three months ended March 31, 1996 as compared to the same period in 1995
due to repayments and prepayments of principal which occur on the MBS
portfolio. Interest income on other investments has also decreased when
comparing the first quarter of 1996 to the same period in 1995 due to lower
average cash and cash equivalent balances.
Expenses for the Partnership increased when comparing the two periods
primarily due to amortization of costs relating to the investment in the
Marketplace. These costs will continue to be amortized over the remaining
life of the Marketplace.
Joint Venture
The Marketplace experienced a decrease in net income for the three months
ended March 31, 1996, as compared to the same period in 1995, as the
increase in property expenses more than offset the increase in revenue.
Revenue increased approximately $262,000 during this period as a result of
a rise in reimbursable tenant billings derived from the increase in real
estate taxes and other operating expenses. Interest income increased
slightly due to the Marketplace's higher average cash and cash equivalent
balances.
Total expenses at the Marketplace increased for the three months ended
March 31, 1996 as compared to the same period in 1995 due to increases in
maintenance expense and real estate taxes. Maintenance expense rose
significantly during the two periods as a result of an unusual amount of
snowfall requiring removal during the first quarter of 1996. An increase
in real estate tax rates resulted in a 13% increase in real estate taxes
for the three months ended March 31, 1996 as compared to the same period in
1995. Depreciation expense increased in comparing these two periods as a
result of tenant improvements made since the first quarter of 1995.
General
In accordance with Financial Accounting Standards No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of", which is effective for fiscal years beginning after December
15, 1995, the Partnership has implemented policies and practices for
assessing impairment of its real estate assets.
In assessing the impairment of the underlying real estate owned by the
Joint Venture, the General Partners routinely perform market and growth
studies combined with periodic appraisals of the underlying property. If
the General Partners believe that there is a significant impairment in
value, in which case a provision to write down the investment to fair value
will be charged against income. At this time, the General Partners do not
believe that any asset of the Partnership is significantly impaired.
KRUPP CASH PLUS-V 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 had duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Krupp Cash Plus-V Limited Partnership
(Registrant)
BY: /s/Robert A. Barrows
Robert A. Barrows
Treasurer and Chief Accounting Officer of Krupp
Plus-II Corpora-tion, the General Partner of
Krupp Company Limited Partnership-VI
DATE: April 30, 1996