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, 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
14.
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
(Unaudited)
September 30, December 31,
1998 1997
Real estate assets:
Investment in Joint Venture (Note 3) $ - $15,667,715
Mortgage-backed securities ("MBS"), net of
accumulated amortization and unrealized
holding gains (Note 4) - 628,909
Total real estate assets - 16,296,624
Cash and cash equivalents (Note 2) 3,554,350 569,231
Other assets 32,176 14,634
Total assets $ 3,586,526$16,880,489
LIABILITIES AND PARTNERS' EQUITY
Accrued expenses and other liabilities $ 336,431$ 13,526
Partners' equity (deficit)(Note 5):
Unitholders
(2,060,350 Units outstanding) 3,377,096 16,943,976
Corporate Limited Partner
(100 Units outstanding) (1,645) (987)
General Partner (125,356) (122,972)
Unrealized holding gains on MBS (Note 4) - 46,946
Total Partners' equity 3,250,095 16,866,963
Total liabilities and Partners' equity$ 3,586,526$16,880,489
The accompanying notes are an integral
part of the financial statements.
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
STATEMENTS OF INCOME (LOSS)
(Unaudited)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1998 1997 1998 1997
Revenue:
Interest income - MBS (Note 4)$ - $ 14,118 $ 25,287$ 43,163
Interest income - other 50,103 17,046 376,940 53,627
Total revenue 50,103 31,164 402,227 96,790
Expenses:
General and administrative
(Note 6) 24,191 40,087 116,416 123,633
Asset management fees (Note 6) - 35,894 12,602 106,566
Amortization of acquisition
costs (Note 3) - 26,146 - 78,439
Total expenses 24,191 102,127 129,018 308,638
Income (loss) from operations 25,912 (70,963) 273,209(211,848)
Partnership's share of Joint
Venture net income (Note 3) - 115,513 131,925 479,081
Income before gain on sale of
MBS and loss on dissolution
of Joint Venture 25,912 44,550 405,134 267,233
Gain on sale of MBS (Note 4) - - 25,930 -
Loss on dissolution of Joint
Venture (Note 3) - - (191,452) -
Net income (loss) $ 25,912$ 44,550 $ 239,612$267,233
Allocation of net income (loss)
(Note 5):
Unitholders (2,060,350
Units outstanding):
Income before gain on sale
of MBS and loss on the
dissolution of Joint
Venture $ 25,651 $ 44,102 $ 401,063$264,548
Gain on sale of MBS - - 25,929 -
Loss on dissolution of
Joint Venture - - (189,528) -
Net income $ 25,651 $ 44,102 $ 237,464$264,548
Continued
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
STATEMENTS OF INCOME (LOSS), Continued
(Unaudited)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1998 1997 1998 1997
Net income per Unit of
Depositary Receipt:
Income before gain on sale
of MBS and loss on the
dissolution of Joint
Venture $ .02 $ .02 $ .20 $ .13
Gain on sale of MBS - - .01 -
Loss on dissolution of
Joint Venture - - (.09) -
Net income $ .02 $ .02$ .12 $ .13
Corporate Limited Partner
(100 Units outstanding):
Income before gain on sale
of MBS and loss on the
dissolution of Joint
Venture $ 2 $ 2 $ 20 $ 13
Gain on sale of MBS - - 1 -
Loss on dissolution of
Joint Venture - - (9) -
Net income $ 2 $ 2 $ 12 $ 13
General Partner:
Income before gain on sale
of MBS and loss on the
dissolution of Joint
Venture $ 259 $ 446 $ 4,051 $ 2,672
Gain on sale of MBS - - - -
Loss on the dissolution of
Joint Venture - - (1,915) -
Net income $ 259 $ 446 $ 2,136 $ 2,672
The accompanying notes are an integral
part of the financial statements.
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(Unaudited)
For the Nine Months
Ended September 30,
1998 1997
Operating activities:
Net income $ 239,612$ 267,233
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization of acquisition costs - 78,439
Amortization of MBS discount - (529)
Loss on dissolution of Joint Venture 191,452 -
Gain on sale of MBS (25,930) -
Partnership's share of Joint Venture
net income (131,925) (479,081)
Distributions from Joint Venture 131,925 479,081
Changes in assets and liabilities:
Increase in other assets (17,542) (312)
Decrease in due to affiliates - (49,363)
Increase in accrued expenses and
other liabilities 322,905 2,442
Net cash provided by operating
activities 710,497 297,910
Investing activities:
Distributions from Joint Venture in
excess of net income 639,134 798,413
Distributions received from Joint Venture
sale of property, net 14,837,129 -
Principal collections on MBS 88,337 46,092
Proceeds from sale of MBS 519,556 -
Net cash provided by investing
activities 16,084,156 844,505
Financing activity:
Distributions (13,809,534) (1,557,095)
Net increase (decrease) in cash and cash
equivalents 2,985,119 (414,680)
Cash and cash equivalents, beginning of period 569,231 1,524,048
Cash and cash equivalents, end of period $ 3,554,350$ 1,109,368
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
necessary to present fairly the Partnership's
financial position as of September 30, 1998,
its results of operations for the three and
nine months ended September 30, 1998 and 1997
and its cash flows for the nine months ended
September 30, 1998 and 1997.
The results of operations for the three and
nine months ended September 30, 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:
September 30, December 31,
1998 1997
Cash and money market accounts $ 568,171 $ 569,231
Commercial paper 2,986,179 -
$ 3,554,350 $ 569,231
(3)Investment in Joint Venture
The Partnership and an affiliate of the
Partnership (collectively referred to herein
as the "Joint Venture Partners") owned 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.
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
Continued
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS, Continued
(3)Investment in Joint Venture, Continued
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 $100,672 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.
The sale is considered a Terminating Capital
Transaction as defined by the Spring Valley
Partnership Agreement. Consequently, the
Joint Venture Partners distributed the
remaining assets of the Joint Venture in the
second quarter of 1998. In accordance with
the Spring Valley Partnership Agreement, the
Partnership and its Joint Venture Partner
received 49.9% and 50.1%, respectively, of
the remaining net assets. Subsequent to the
final distribution, the Joint Venture was
effectively dissolved.
As of September 30, 1998, the Partnership
recognized a loss of $191,452 on the
dissolution of the Joint Venture. The loss
represents the remaining investment balance
after allocations of net income earned by the
Joint Venture, distributions received from the
Joint Venture, liabilities transferred from
the Joint Venture and closing costs paid by
the Partnership.
At December 31, 1997, the Partnership's
investment balance reflected 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 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
(Unaudited)
September 30, 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 - 2,958,231
Total assets $ - $ 31,667,363
LIABILITIES AND PARTNERS' EQUITY
Total liabilities $ - $ 380,978
Total Partners' equity - 31,286,385
Total liabilities and
Partners' equity $ - $ 31,667,363
Spring Valley Partnership
Condensed Statements of Operations
(Unaudited)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1998 1997 1998 1997
Revenue $ - $1,679,830 $ 540,486$ 5,060,456
Property operating
expenses - (867,383) (376,779) (2,558,845)
Depreciation - (580,957) - (1,541,528)
Gain on sale of
property - - 100,672 -
Net income$ - $ 231,490 $ 264,379$ 960,083
Continued
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS, Continued
(4)Mortgage Backed Securities
On April 29, 1998, the General Partners sold
the Partnership's MBS portfolio to an
unaffiliated third party for $519,556. For
financial reporting purposes, the Partnership
recognized a gain on the sale of $25,930. The
gain was calculated as the difference between
the selling price and net book value of the
MBS.
The MBS held by the Partnership were issued by
the Federal Home Loan Mortgage Corporation.
At December 31, 1997, the MBS had a total face
value, amortized cost and estimated market
value of $592,004, $581,963 and $629,000,
respectively. Coupon rates of the MBS ranged
from 9.0% to 9.5% per annum and were scheduled
to mature in the years 2016 and 2017. At
December 31, 1997, the Partnership's MBS
portfolio had gross unrealized holding gains
of $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 nine
months ended September 30, 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
Income before gain
on sale of MBS and
loss on sale of the
Joint Venture 401,063 20 4,051 - 405,134
Unrealized holding
gains on MBS - - - (46,946) (46,946)
Gain on sale of MBS 25,929 1 - - 25,930
Loss on dissolution
of the Joint Venture (189,528) (9) (1,915) - (191,452)
Distributions:
Operations (515,088) (25) (4,520) - (519,633)
Capital Transaction(13,289,256) (645) - - (13,289,901)
Balance at
September 30, 1998 $ 3,377,096$ (1,645)$(125,356)$ - $ 3,250,095
(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.
Continued
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS, Continued
(6) Related Party Transactions, Continued
Amounts paid to the General Partner's affiliates were as follows:
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
1998 1997 1998 1997
Asset management fees $ - $35,894 $ 12,602 $106,566
Expense reimbursements 32,157 29,508 85,886 84,939
Charged to operations $ 32,157 $65,402 $ 98,488 $191,505
Due to affiliates consisted of expense reimbursements of $2,075 at
September 30, 1998.
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 (see Note 3). The
sale is considered a Terminating Capital
Transaction as defined by the Partnership
Agreement.
On May 15, 1998, the Partnership made a
special distribution of $6.45 per Unit based
upon approximately 80% of the proceeds of the
sale 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 that were guaranteed
by the Federal Home Loan Mortgage Corporation.
On April 29, 1998, the General Partner sold
the Partnership's MBS portfolio to an
unaffiliated third party. For financial
reporting purposes, the Partnership recognized
a gain of $25,930 from the sale. At December
31, 1997, the Partnership recorded unrealized
holding gains on its MBS of $46,946 to adjust
the investments to market value (see Note 4).
KRUPP CASH PLUS-V LIMITED PARTNERSHIP
Operations
Partnership
The following discussion relates to the
operations of the Partnership for the three
and nine months ended September 30, 1998 and
1997. The sale of the Partnership's Joint
Venture property (Spring Valley Marketplace)
on January 30, 1998, and the sale of the
Partnership's MBS portfolio on April 29, 1998,
significantly impacts the comparability of the
Partnership's operations between the periods.
Net income for the three and nine months ended
September 30, 1998 as compared to the three
and nine months ended September 30, 1997, net
of the Joint Venture activity and MBS
portfolio, increased as total revenue
increased and total expenses decreased.
Interest income on other investments increased
due to higher average cash and cash equivalent
balances available for investment, as a result
of the proceeds received from the sale of the
Joint Venture property and MBS portfolio.
Total expenses for the three and nine months
ended September 30, 1998 decreased when
compared to the same periods in 1997, due
primarily to the decline in asset management
fees and amortization of acquisition costs due
to the sale of the Joint Venture property.
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
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 10, 1998