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 THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended
September 30, 1997
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
The total number of pages in this document is
12.
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
This Form 10-Q contains forward-looking
statements within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934.
Actual results could differ materially from
those projected in the forward-looking
statements as a result of a number of factors,
including those identified herein.
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
BALANCE SHEETS
ASSETS
September 30,December 31,
1997 1996
Real estate assets:
Investment in Joint Venture, net of
accumulated amortization of
acquisition costs of $183,025
and $104,586, respectively (Note 3) $21,852,808 $22,729,660
Mortgage-backed securities ("MBS"), net of
accumulated amortization (Note 4) 600,199 645,762
Total real estate assets 22,453,007 23,375,422
Cash and cash equivalents (Note 2) 1,109,368 1,524,048
Other assets 17,409 17,097
Total assets $23,579,784 $24,916,567
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Accrued expenses $ 15,942 $ 13,500
Due to affiliates (Note 6) - 49,363
Total liabilities 15,942 62,863
Partners' equity (deficit) (Note 5):
Unitholders
(2,060,350 Units outstanding) 23,624,112 24,904,826
Corporate Limited Partner
(100 Units outstanding) (663) (601)
General Partner (59,607) (50,521)
Total Partners' equity 23,563,842 24,853,704
Total liabilities and Partners' equity $23,579,784 $24,916,567
The accompanying notes are an integral
part of the financial statements.
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
STATEMENTS OF INCOME
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1997 1996 1997 1996
Revenue:
Partnership's share of Joint
Venture net income
(Note 3) $115,513 $321,642 $479,081 $719,734
Interest income - MBS
(Note 4) 14,118 17,391 43,163 57,968
Interest income - other 17,046 24,313 53,627 74,338
Total revenue 146,677 363,346 575,871 852,040
Expenses:
General and administrative
(Note 6) 40,087 23,508 123,633 62,576
Asset management fees
(Note 6) 35,894 35,984 106,566 107,235
Amortization of acquisition
costs (Note 3) 26,146 26,146 78,439 78,439
Total expenses 102,127 85,638 308,638 248,250
Net income $ 44,550 $277,708 $267,233$603,790
Allocation of net income
(Note 5):
Unitholders (2,060,350
Units outstanding) $ 44,102 $274,918 $264,548$597,723
Net income per Unit of
Depositary Receipt $ .02 $ .13 $ .13$ .29
Corporate Limited Partner
(100 Units outstanding) $ 2 $ 13 $ 13$ 29
General Partner $ 446 $ 2,777 $ 2,672$ 6,038
The accompanying notes are an integral
part of the financial statements.
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
For the Nine Months Ended
September 30,
1997 1996
Operating activities:
Net income $ 267,233 $ 603,790
Adjustments to reconcile net income to
net cash provided by operating activities:
Amortization of acquisition costs 78,439 78,439
Amortization of MBS discount (529) (4,850)
Partnership's share of Joint Venture net
income (479,081) (719,734)
Distributions from Joint Venture 479,081 719,734
Changes in assets and liabilities:
Decrease (increase) in other assets (312) 17,088
Increase in accrued expenses 2,442 396
Increase (decrease) in due to
affiliates (49,363) 152
Net cash provided by operating
activities 297,910 695,015
Investing activities:
Distributions from Joint Venture in excess
of net income 798,413 333,156
Principal collections on MBS 46,092 267,678
Net cash provided by investing
activities 844,505 600,834
Financing activity:
Distributions (1,557,095) (1,556,299)
Net decrease in cash and cash equivalents (414,680) (260,450)
Cash and cash equivalents, beginning of period 1,524,048 2,101,121
Cash and cash equivalents, end of period $ 1,109,368 $ 1,840,671
The accompanying notes are an integral
part of the financial statements.
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
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 Partner 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, 1996
for additional information relevant to
significant accounting policies followed by
the Partnership.
In the opinion of the General Partner of the
Partnership, the accompanying unaudited
financial statements reflect all adjustments
necessary to present fairly the Partnership's
financial position as of September 30, 1997,
its results of operations for the three and
nine months ended September 30, 1997 and 1996
and cash flows for the nine months ended
September 30, 1997 and 1996.
The results of operations for the three and
nine months ended September 30, 1997 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) Cash and Cash Equivalents
Cash and cash equivalents consisted of the following:
September 30,December 31,
1997 1996
Cash and money market accounts $ 613,951 $ 778,088
Commercial paper 495,417 745,960
$ 1,109,368 $ 1,524,048
At September 30, 1997, commercial paper
represents corporate issues maturing in the
fourth quarter of 1997. At September 30,
1997, the carrying value of the Partnership's
investment in commercial paper
approximates fair value.
(3)Investment in Joint Venture
The Partnership and an affiliate of the
Partnership own a 49.9% and 50.1% interest in
Spring Valley Partnership (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 320,684 net
leasable square feet located in Spring Valley,
Rockland County, New York.
The Partnership's investment balance reflects
the original cost of the investment,
acquisition costs of $1,882,546 which are
being amortized over the remaining life of the
underlying asset, allocations of net income
earned by the Joint Venture and distributions
received by the Joint Venture. For the three
and nine months ended September 30, 1997, the
Partnership recognized amortization of
acquisition costs of $26,146 and $78,439,
respectively.
Continued
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS, Continued
(3) Investment in Joint Venture, Continued
Condensed financial statements of the Joint Venture are as
follows:
Spring Valley Partnership
Condensed Balance Sheets
ASSETS
September 30, December 31,
1997 1996
Real estate asset, at cost $ 53,901,744 $ 53,828,582
Accumulated depreciation (15,524,853) (13,983,325)
Total real estate asset 38,376,891 39,845,257
Other assets 2,350,536 2,252,800
Total assets $ 40,727,427 $ 42,098,057
LIABILITIES AND PARTNERS' EQUITY
Total liabilities $ 451,914 $ 222,527
Partners' equity:
The Partnership 20,153,287 20,951,700
Joint Venture partner 20,122,226 20,923,830
Total Partners' equity 40,275,513 41,875,530
Total liabilities and
Partners' equity $ 40,727,427 $ 42,098,057
Spring Valley Partnership
Condensed Statements of Operations
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1997 1996 1997 1996
Revenue $1,679,830 $1,826,598 $5,060,456 $ 5,265,675
Property operating
expenses (867,383) (704,553) (2,558,845) (2,417,953)
Depreciation (580,957) (477,473) (1,541,528)(1,405,369)
Net income$ 231,490 $ 644,572 $ 960,083$ 1,442,353
Continued
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS, Continued
(4) 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:
September 30,December 31,
1997 1996
Face Value $ 610,466$ 656,558
Amortized Cost $ 600,199$ 645,762
Estimated Market Value $ 649,000$ 694,000
Coupon rates of the MBS range from 9.0% to 9.5% per annum and
mature in theyears 2016 and 2017. The Partnership's MBS portfolio
had gross unrealized gains of approximately $49,000 and $48,000 at
September 30, 1997 and December 31, 1996, respectively. The
Partnership does not expect to realize these gains in the near
future as it has the intention and ability to hold the MBS until
maturity.
(5) Changes in Partners' Equity
A summary of changes in Partners' equity (deficit) for the nine
months ended September 30, 1997 is as follows:
Corporate Total
Limited General Partners'
Unitholders Partner Partner Equity
Balance at
December 31, 1996 $24,904,826 $ (601) $(50,521) $24,853,704
Net income 264,548 13 2,672 267,233
Distributions (1,545,262) (75) (11,758) (1,557,095)
Balance at
September 30, 1997$23,624,112 $ (663) $(59,607) $23,563,842
Continued
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS, Continued
(6)Related Party Transactions
Under the terms of the Partnership Agreement,
the General Partner or its 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 Partner for certain expenses incurred
in connection with the preparation and
mailing of reports and other communications
to the Unitholders.
Amounts paid or accrued to the General Partner or its
affiliates are as follows:
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1997 1996 1997 1996
Asset management fees $35,894 $35,984 $106,566 $107,235
Expense reimbursements 29,508 12,294 84,939 30,744
Charged to operations $65,402 $48,278 $191,505 $137,979
Due to affiliates consisted of expense reimbursements of $49,363 at
December 31, 1996.
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management's Discussion and Analysis of
Financial Condition and Results of Operations
contains forward-looking statements including
those concerning Management's expectations
regarding the future financial performance and
future events. These forward-looking
statements involve significant risk and
uncertainties, including those described
herein. Actual results may differ materially
from those anticipated by such forward-looking
statements.
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.
The Marketplace had an occupancy rate of 93%
as of September 30, 1997. Capital
improvements will be made as necessary, in
order to maintain or increase this level of
occupancy and to remain competitive within the
immediate market. The Marketplace has spent
approximately $73,000 to date and is expected
to spend approximately $220,000 for capital
improvements at the property in 1997, most of
which are tenant buildouts and exterior
improvements to attract and retain quality
tenants at the shopping center. Parking lot
paving and resurfacing of sidewalks which
began in 1996 is expected to be completed in
1997. Painting of the external canopy began
in the third quarter of 1997.
Liquidity provided by the MBS is derived
primarily from interest income, scheduled
principal payments and prepayments of the
portfolio. The level of prepayments is
contingent upon the interest rate environment,
which in turn, affects the Partnership's
liquidity. 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 Partner believes
that this market interest rate 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, distributions received
from the Marketplace and working capital
reserves. Due to fluctuations in MBS
principal prepayments and its effect on the
Partnership's liquidity, the Partnership may
need to periodically adjust its distribution
rate. Therefore, sustaining the distribution
rate is mainly dependent upon the future
performance of the Marketplace.
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
Operations
Partnership
Net income decreased for the three and nine
months ended September 30, 1997, as compared
to the three and nine months ended September
30, 1996, due to a decrease in revenue and an
increase in expenses. Total revenue decreased
as a result of a decrease in net income
generated by the Partnership's Joint Venture
investment in the Marketplace, as discussed
below. During the same periods, MBS interest
income decreased due to repayments of
principal on the MBS portfolio. Interest
income on other investments also decreased as
a result of lower cash and cash equivalent
balances available for investment.
Total expenses for the three and nine month
periods ended September 30, 1997 increased as
compared to the same periods in 1996, as a
result of an increase in charges incurred in
connection with the preparation and mailing of
Partnership reports and other investor
communications.
Joint Venture
The Marketplace experienced a decrease in net
income for the three and nine month periods
ended September 30, 1997, as compared to the
three and nine month periods ended September
30, 1996 as revenues decreased and expenses
increased.
Rental revenue decreased for the three and
nine month periods ended September 30, 1997 as
compared to the same periods ended September
30, 1996 because of lower reimbursable tenant
billings as a result of decreased reimbursable
operating expenses.
Property operating expenses at the Marketplace
increased for the three and nine month periods
ended September 30, 1997, as compared to the
three and nine month periods ended September
30, 1996, primarily due to increased real
estate taxes. Real estate taxes increased due
to both a rise in the assessed value of the
Marketplace and an increase in the school tax
rate by the local taxing authority. In 1996
the property also received a real estate tax
refund, further reducing tax expenses last
year as compared to 1997. The increase in
real estates taxes was partially offset by a
decrease in maintenance expense due to
additional snow removal expenditures in 1996.
Depreciation expense increased as a result of
continued capital improvement expenditures.
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/Wayne H. Zarozny
Wayne H. Zarozny
Treasurer and Chief Accounting Officer
of the Krupp Corporation, an affiliate
of the General Partner
DATE: November 12, 1997