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 March 31, 1998 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 13. 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 March 31,December 31, 1998 1997 Real estate assets: Investment in Joint Venture (Note 3) $ 468,949$15,667,715 Mortgage-backed securities ("MBS"), net of accumulated amortization (Note 4) 534,715 628,909 Total real estate assets 1,003,664 16,296,624 Cash and cash equivalents (Note 2) 15,816,155 569,231 Other assets 149,822 14,634 Total assets $16,969,641$16,880,489 LIABILITIES AND PARTNERS' EQUITY Liabilities: Accrued expenses and other liabilities $ 364,745$ 13,500 Due to affiliates (Note 6) 32,458 26 Total liabilities 397,203 13,526 Partners' equity (deficit) (Note 5): Unitholders (2,060,350 Units outstanding) 16,658,333 16,943,976 Corporate Limited Partner (100 Units outstanding) (1,001) (987) General Partner (125,174) (122,972) Unrealized holding gains on MBS (Note 3) 40,280 46,946 Total Partners' equity 16,572,438 16,866,963 Total liabilities and Partners' equity $16,969,641$16,880,489 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, 1998 1997 Revenue: Interest income - MBS (Note 4) $ 13,105 $ 14,679 Interest income - other 144,275 18,296 Total income 157,380 32,975 Expenses: General and administrative (Note 6) 39,066 43,367 Asset management fees (Note 6) 12,540 35,149 Amortization of acquisition costs (Note 3) - 26,146 Total expenses 51,606 104,662 Income (loss) from operations 105,774 (71,687) Partnership's share of Joint Venture net income (Note 3) 126,000 186,731 Net income $ 231,774 $115,044 Allocation of net income (Note 5): Unitholders (2,060,350 Units outstanding) $ 229,445 $113,888 Net income per Unit of Depositary Receipt $ .11 $ .06 Corporate Limited Partner (100 Units outstanding) $ 11 $ 6 General Partner $ 2,318 $ 1,150 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, 1998 1997 Operating activities: Net income $ 231,774 $ 115,044 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of MBS discount, net (1,713) (131) Amortization of acquisition costs - 26,146 Partnership's share of Joint Venture net income (126,000) (186,731) Distributions received from Joint Venture 126,000 186,731 Changes in assets and liabilities: Decrease (increase) in other assets (135,188) 769 Increase (decrease) in accrued expenses and other liabilities 351,245 (6,224) Increase (decrease) in due to affiliates 32,432 (13,564) Net cash provided by operating activities 478,550 122,040 Investing activities: Distributions received from Joint Venture in excess of net income 367,862 312,270 Distribution received from Joint Venture sale of property, net 14,830,904 - Principal collections on MBS 89,241 12,696 Net cash provided by investing activities 15,288,007 324,966 Financing activity: Distributions (519,633) (516,519) Net increase (decrease) in cash and cash equivalents 15,246,924 (69,513) Cash and cash equivalents, beginning of period 569,231 1,524,048 Cash and cash equivalents, end of period $15,816,155 $1,454,535 Supplemental schedule of noncash investing and financing activities: Unrealized holding gains on MBS (Note 4)$ 6,666 $ - 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 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, 1997 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 (consisting of only normal recurring accruals) necessary to present fairly the Partnership's financial position as of March 31, 1998, and its results of operations and cash flows for the three months ended March 31, 1998 and 1997. The results of operations for the three months ended March 31, 1998 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: March 31, December 31, 1998 1997 Cash and money market accounts $ 394,437 $ 569,231 Commercial paper 15,421,718 - $ 15,816,155 $ 569,231 (3) Investment in Joint Venture The Partnership and an affiliate of the Partnership (collectively referred to herein as the "Joint Venture Partners") 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 320,684 square foot shopping center located in Spring Valley, Rockland County, New York. Continued KRUPP CASH PLUS-V LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS, Continued (3)Investment in Joint Venture, Continued Based upon the Joint Venture Partners' assessment of the current and future market conditions, the capital improvements necessary to remain competitive in its market, its capital resources and the differing strategies of the Joint Venture Partners, the Joint Venture Partners determined that it was in their best interests, and that of their respective investors, to sell Spring Valley Marketplace. On January 30, 1998, the Partnership and its Joint Venture Partner sold the Marketplace to unaffiliated third parties. The property was included in a package with thirteen other properties owned by affiliates of the General Partner. The total selling price of the fourteen properties was $138,000,000, of which the Joint Venture Partners received $29,571,700, less their share of the closing costs of $246,830. For financial reporting purposes, the Joint Venture recognized a gain of $101,672 on the sale of the property. The gain was calculated as the difference between the property's selling price less net book value of the property and closing costs. In accordance with Financial Accounting Standard No. 121, "Accounting for the Impairment of Long-Lived Assets to Be Disposed Of", the Joint Venture recordeda valuation provision for losses on its real estate asset of $9,277,433 as of December 31, 1997. This provision represented the difference between carrying value and selling price less estimated costs to sell as a result of the sale of the Joint Venture's property on January 30, 1998. The sale is considered a Terminating Capital Transaction as defined by the Spring Valley Partnership Agreement. Accordingly, the Joint Venture Partners expect to liquidate and distribute the remaining assets of the Joint Venture in 1998. At March 31, 1998, the Partnership's investment balance reflects the original cost of the investment, allocations of net income earned by the Joint Venture and distributions received from the Joint Venture. At March 31, 1997, the Partnership's investment balance reflects the original cost of the investment, acquisition costs of $1,882,546, allocations of net income earned by the Joint Venture and distributions received from the Joint Venture. For the three months ended March 31, 1997, the Partnership recognized amortization of acquisition costs of $26,146. 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 March 31, December 31, 1998 1997 Real estate asset, at cost $ - $ 54,036,202 Accumulated depreciation - (25,327,070) Total real estate asset - 28,709,132 Other assets 567,332 2,958,231 Total assets $ 567,332 $ 31,667,363 LIABILITIES AND PARTNERS' EQUITY Total liabilities $ 11,228 $ 380,978 Total Partners' equity 556,104 31,286,385 Total liabilities and Partners' equity $ 567,332 $ 31,667,363 Spring Valley Partnership Condensed Statements of Operations For the Three Months Ended March 31, 1998 1997 Revenue $ 523,303 $ 1,711,492 Property operating expenses (372,471) (857,046) Depreciation - (480,236) Gain on sale of property 101,672 - Net income $ 252,504 $ 374,210 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: March 31, December 31, 1998 1997 Face Value $ 502,763 $ 592,004 Amortized Cost $ 494,436 $ 581,963 Estimated Market Value $ 535,000 $ 629,000 Coupon rates of the MBS ranged from 9.0% to 9.5% per annum and were due to mature in the years 2016 and 2017. In accordance with Financial Accounting Standard No. 115, "Accounting for Certain Investments in Debt and Equity Securities", unrealized holding gains and losses for available-for-sale securities are reported as a separate component of equity until realized. At March 31, 1998 and December 31, 1997, the Partnership had unrealized holding gains of $40,280 and $46,946 on its MBS investments to adjust to market value based on quoted market prices. (5)Changes in Partners' Equity A summary of changes in Partners' equity (deficit) for the three months ended March 31, 1998 is as follows: Unrealized Corporate Holding Limited General Gains on Unitholders Partner Partner MBS Total Balance at December 31, 1997$ 16,943,976$ (987) $(122,972)$ 46,946 $16,866,963 Net income 229,445 11 2,318 - 231,774 Unrealized Holding Gains on MBS - - - (6,666) (6,666) Distributions (515,088) (25) (4,520) - (519,633) Balance at March 31, 1998 $ 16,658,333$ (1,001)$(125,174)$ 40,280 $16,572,438 The distribution payable to the General Partner of $4,520 was included in accrued expenses and other liabilities at March 31, 1998. 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's affiliates were as follows: For the Three Months Ended March 31, 1998 1997 Asset management fees $ 12,540 $ 35,149 Expense reimbursements 21,572 25,923 Charged to operations $ 34,112 $ 61,072 Due to affiliates consisted of expense reimbursements of $32,458 and $26 at March 31, 1998 and December 31, 1997, respectively. (7) Subsequent Event On April 29, 1998, the General Partner sold the Partnership's MBS portfolio to an unaffiliated third party for $519,556. 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 Based upon the Joint Venture Partners' assessment of the current and future market conditions, the capital improvements necessary to remain competitive in its market, its capital resources and the differing strategies of the Joint Venture Partners, the Joint Venture Partners determined that it was in their best interests, and that of their respective investors, to sell Spring Valley Marketplace. On January 30, 1998, Spring Valley Marketplace was sold to unaffiliated third parties. The property was included in a package with thirteen other properties owned by affiliates of the General Partner. The total selling price of the fourteen properties was $138,000,000, of which the Joint Venture Partners received $29,571,700, less their share of the closing costs. The sale is considered a Terminating Capital Transaction as defined by the Partnership Agreement. The Partnership anticipates making a special distribution of $6.45 per Unit in the second quarter of 1998, based upon approximately 80% of the proceeds of the sale of the Marketplace and estimated liquidation value of remaining Partnership assets. Once all necessary reserves and contingent liabilities are funded, the remaining proceeds will be distributed. All Partnership affairs are expected to be completed by year-end. The Partnership held MBS guaranteed by the Federal Home Loan Mortgage Corporation ("FHLMC"). At March 31, 1998 and December 31, 1997, the Partnership recorded unrealized holding gains on its MBS of $40,280 and $46,946, respectively, to adjust the investments to market value (see Note 3). Subsequent to March 31, 1998, the Partnership sold its MBS portfolio to an unaffiliated third party (see Note 7). Continued KRUPP CASH PLUS-V LIMITED PARTNERSHIP Operations Partnership Net income, net of the Partnership's share of Joint Venture net income, increased for the three months ended March 31, 1998, as compared to the three months ended March 31, 1997, due to an increase in income and a decrease in expenses. Interest income on other investments increased as a result of higher cash and cash equivalent balances available for investment, due to proceeds received from the sale of the Joint Venture. This increase is partially offset by a decrease in MBS interest income due to repayments of principal on the MBS portfolio. Total expenses for the three months ended March 31, 1998 decreased, as compared to the same period in 1997, as a result of a decrease in general and administrative expense related to charges incurred in connection with the preparation and mailing of Partnership reports and other investor communications. The decrease is also attributable to a decline in asset management fees and amortization of acquisition costs due to the sale of the Joint Venture on January 30, 1998. Joint Venture Spring Valley Marketplace was sold on January 30, 1998 to unaffiliated third parties. See Note 3 for further discussion of this matter. 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 (a) Exhibits Response: None (b) Reports on Form 8-K Date Event Reported Financial Statements Filed January 30, 1998 Disposition of Spring Valley Pro Forma Balance Sheet at Marketplace September 30, 1997. Pro Forma Statements of Operations for the nine months ended September 30, 1997 and for the year ended December 31, 1996. 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: May 14, 1998