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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2004
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 0-20164
Krupp Government Income Trust II
(Exact name of registrant as specified in its charter)
Massachusetts 04-3073045
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Beacon Street, Boston, Massachusetts 02108
(Address of principal executive offices) (Zip Code)
(617) 523-0066
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last
report)
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 |_|
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes |_| No |X|
SEC 1296 (01-04) Potential persons who are to respond to the collection of
information contained in this form are not required to respond
unless the form displays a currently valid OMB control number.
-1-
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. When used in this Form 10-Q, the words "believes," "anticipates,"
"expects," "plans," "intends," "estimates," "continue," "may" or "will" (or the
negative of such words) and similar expressions are intended to identify
forward-looking statements. Such statements are subject to a number of risks and
uncertainties, including but not limited to the following: federal, state or
local regulations; adverse changes in general economic or local conditions;
pre-payments of mortgages; failure of borrowers to pay participation interests
due to poor operating results of properties underlying the mortgages; uninsured
losses and potential conflicts of interest between the Trust and its Affiliates,
including the Trustees. The Company's filings with the Securities and Exchange
Commission, including its Annual Report on Form 10-K for the year ended December
31, 2003, contain additional information concerning such risk factors. Actual
results in the future could differ materially from those described in any
forward-looking statements as a result of the risk factors set forth above, and
the risk factors described in the Annual Report.
-2-
KRUPP GOVERNMENT INCOME TRUST II
BALANCE SHEETS
ASSETS
March 31, December 31,
2004 2003
----------- -----------
Participating Insured Mortgage Investments
("PIMIs")(Note 2):
Insured mortgages $26,278,077 $26,402,701
Additional Loans 6,880,000 6,880,000
Participating Insured Mortgages ("PIMs")(Note 2) 7,850,187 7,865,941
Mortgage-Backed Securities ("MBS")(Note 3) 3,533,830 3,930,944
----------- -----------
Total mortgage investments 44,542,094 45,079,586
Cash and cash equivalents 4,147,995 5,454,067
Interest receivable and other assets 271,730 399,184
Prepaid acquisition fees and expenses, net of
accumulated amortization of $1,914,747 and
$1,861,827, respectively 276,375 329,295
Prepaid participation servicing fees, net of
accumulated amortization of $623,984 and
$605,866, respectively 106,390 124,508
----------- -----------
Total assets $49,344,584 $51,386,640
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities $ 89,558 $ 183,379
----------- -----------
Shareholders' equity (Note 4):
Common stock, no par value; 25,000,000
Shares authorized; 18,371,477 Shares
issued and outstanding 49,044,502 51,067,705
Accumulated comprehensive income 210,524 135,556
----------- -----------
Total Shareholders' equity 49,255,026 51,203,261
----------- -----------
Total liabilities and Shareholders' equity $49,344,584 $51,386,640
=========== ===========
The accompanying notes are an integral
part of the financial statements.
-3-
KRUPP GOVERNMENT INCOME TRUST II
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the Three Months
Ended March 31,
----------------------------
2004 2003
----------- -----------
Revenues:
Interest income - PIMs and PIMIs:
Basic interest $ 581,093 $ 1,219,453
Additional Loan interest 120,400 112,187
Participation interest 136,494 2,311,018
Interest income - MBS 50,962 217,229
Interest income - cash and cash equivalents 11,901 108,361
----------- -----------
Total revenues 900,850 3,968,248
----------- -----------
Expenses:
Asset management fee to an affiliate 82,878 172,657
Expense reimbursements to affiliates 111,729 108,710
Amortization of prepaid fees and expenses 71,038 334,032
General and administrative 86,401 114,207
----------- -----------
Total expenses 352,046 729,606
----------- -----------
Net income 548,804 3,238,642
Other comprehensive income:
Net increase in unrealized gain on MBS 74,968 460,877
----------- -----------
Total comprehensive income $ 623,772 $ 3,699,519
=========== ===========
Basic earnings per Share $ .03 $ .18
=========== ===========
Weighted average Shares outstanding 18,371,477 18,371,477
=========== ===========
The accompanying notes are an integral
part of the financial statements.
-4-
KRUPP GOVERNMENT INCOME TRUST II
STATEMENTS OF CASH FLOWS
For The Three Months Ended
March 31,
------------------------------
2004 2003
----------- ------------
Operating activities:
Net income $ 548,804 $ 3,238,642
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization of net premium 14,223 16,825
Amortization of prepaid fees and expenses 71,038 334,032
Changes in assets and liabilities:
Decrease in interest receivable and other assets 127,454 326,423
Decrease in liabilities (93,821) (10,303)
----------- ------------
Net cash provided by operating activities 667,698 3,905,619
----------- ------------
Investing activities:
Principal collections on MBS 457,859 4,293,399
Principal collections on Additional Loans -- 2,290,000
Principal collections on PIMs and Insured Mortgages 140,378 13,266,186
----------- ------------
Net cash provided by investing activities 598,237 19,849,585
----------- ------------
Financing activity:
Dividends (2,572,007) (2,572,007)
----------- ------------
Net (decrease) increase in cash and cash equivalents (1,306,072) 21,183,197
Cash and cash equivalents, beginning of period 5,454,067 20,450,923
----------- ------------
Cash and cash equivalents, end of period $ 4,147,995 $ 41,634,120
=========== ============
Supplemental disclosure of non-cash investing activities:
Reclassification of investment in a PIMI to a MBS $ -- $ 11,199,153
=========== ============
Non cash activities:
Increase in unrealized gain on MBS $ 74,968 $ 460,877
=========== ============
The accompanying notes are an integral
part of the financial statements.
-5-
KRUPP GOVERNMENT INCOME TRUST II
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policies
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles
generally accepted in the United States of America 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
Berkshire Mortgage Advisors Limited Partnership (the "Advisor"), which is
the advisor to Krupp Government Income Trust II (the "Trust"), the
disclosures contained in this report are adequate to make the information
presented not misleading. See Notes to Financial Statements in the Trust's
Form 10-K for the year ended December 31, 2003 for additional information
relevant to significant accounting policies followed by the Trust.
In the opinion of the Advisor of the Trust, the accompanying unaudited
financial statements reflect all adjustments (consisting primarily of
normal recurring accruals) necessary to present fairly the Trust's
financial position as of March 31, 2004 and the results of its operations
for the three months ended March 31, 2004 and 2003 and its cash flows for
the three months ended March 31, 2004 and 2003.
The results of operations for the three months ended March 31, 2004 are
not necessarily indicative of the results that 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. PIMs and PIMIs
At March 31, 2004, the Trust's remaining PIM and PIMIs, including
Additional Loans, had a fair value of $41,670,501 and gross unrealized
gains of $662,237. Fair value assumes that the insured first mortgage of
the remaining PIM and the Fannie Mae MBS portion of the PIMIs could be
sold at prices equal to the amounts being realized by MBS with similar
interest rates. Fair value includes the current carrying value of the
Additional Loans. Fair value does not include any value for the
participation features. The PIM and PIMIs have maturities ranging from
2008 to 2035. At March 31, 2004, there were no PIMs or PIMIs within the
Trust's portfolio that were delinquent as to principal or interest.
3. MBS
At March 31, 2004, the Trust's MBS portfolio had an amortized cost of
$3,323,306 and gross unrealized gains of $210,524. The MBS portfolio has
maturities ranging from 2008 to 2031.
4. Changes in Shareholder's Equity
A summary of changes in Shareholders' equity for the three months ended
March 31, 2004 is as follows:
Accumulated Total
Common Retained Comprehensive Shareholders'
Stock Earnings Income Equity
------------ --------- ------------- ------------
Balance at December 31, 2003 $ 51,067,705 $ -- $135,556 $ 51,203,261
Net income -- 548,804 -- 548,804
Dividends (2,023,203) (548,804) -- (2,572,007)
Change in unrealized gain on MBS -- -- 74,968 74,968
------------ --------- -------- ------------
Balance at March 31, 2004 $ 49,044,502 $ -- $210,524 $ 49,255,026
============ ========= ======== ============
-6-
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
financial statements and accompanying notes contained in the Trust's 2003 Annual
Report on Form 10-K and in this report on Form 10-Q.
Certain statements in this Management's Discussion and Analysis of Financial
Condition and Results of Operations and elsewhere in this report on Form 10-Q
constitute "forward-looking statements" within the meaning of the Federal
Private Securities Litigation Reform Act of 1995. These forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the Trust's actual results, performance or achievements to be
materially different from any future results, performance or achievements
expressed or implied by these forward-looking statements. These factors include,
among other things, federal, state or local regulations; adverse changes in
general economic or local conditions; the inability of the borrower to meet
financial obligations on Additional Loans; pre-payments of mortgages; failure of
borrowers to pay participation interests due to poor operating results at
properties underlying the mortgages; uninsured losses and potential conflicts of
interest between the Trust and its Affiliates, including the Advisor.
Liquidity and Capital Resources
At March 31, 2004, the Trust had liquidity consisting of cash and cash
equivalents of approximately $4.14 million as well as the cash inflows provided
by the remaining PIM, PIMIs, MBS and cash and cash equivalents. The Trust may
also receive additional cash flow from the participation features of its
remaining PIM and PIMIs. The Trust anticipates that these sources will be
adequate to provide the Trust with sufficient liquidity to meet its obligations,
including providing dividends to its investors.
The most significant demand on the Trust's liquidity is the quarterly dividend
paid to investors of approximately $919,000, which represents the current
quarterly dividend rate of $0.05 per share. Dividends are funded by interest
income received on the remaining PIM, PIMIs, MBS and cash and cash equivalents,
net of operating expenses, and the principal collections received on its
remaining PIM, PIMIs and MBS. The portion of dividends funded from principal
collections reduces the capital resources of the Trust. As the capital resources
of the Trust decrease, the total cash flows to the Trust will also decrease
which may result in periodic adjustments to the dividends paid to the investors.
The Advisor periodically reviews the dividend rate to determine whether an
adjustment is necessary based on projected future cash flows. The current
dividend rate is $0.05 per share per quarter. The Trustees, based on the
Advisor's recommendations, generally set a dividend rate that provides for level
quarterly distributions. To the extent quarterly dividends do not fully utilize
the cash available for distribution and cash balances increase, the Trustees may
adjust the dividend rate or distribute such funds through a special dividend.
In addition to providing guaranteed or insured monthly principal and interest
payments from the insured first mortgage or Fannie Mae MBS portion of a PIM or
PIMI, the Trust's investments in the remaining PIM and PIMIs also may provide
additional income through the interest on the Additional Loan portion of the
PIMIs as well as participation interest based on operating cash flow and
increase in the value realized upon the sale or refinance of the underlying
properties. However, these payments and collection of the Additional Loan
principal are neither guaranteed nor insured and depend on the successful
operations of the underlying properties.
Through the three months ended March 31, 2004, the Trust received the first
installment of Additional Loan interest due in 2004 from both of its remaining
PIMI investments.
The Trust received participation interest based on cash flow generated by
property operations from two of its investments during the three months ended
March 31, 2004. The Lakes paid $70,752 and Martin's Landing paid $65,742.
Whether the operating performance of any of the remaining properties will
provide sufficient cash flow from operations to pay either the Additional Loan
interest or participation interest will depend on factors that the Trust has
minimal control over. Should the properties be unable to generate sufficient
cash flow to pay the Additional Loan interest, it would reduce the Trust's
distributable cash flow and could affect the value of the Additional Loan
collateral.
There are contractual restrictions on the prepayment of the remaining PIM and
PIMIs. During the first five years of the investment, borrowers are generally
prohibited from repayment. During the second five years, the PIM borrower can
prepay the insured mortgage by paying the greater of a prepayment premium or the
participation interest due at the time of the prepayment. Similarly, the PIMI
borrowers can prepay the insured mortgage and the Additional Loan by satisfying
the Preferred Return obligation. The participation features and the Additional
Loans are neither insured nor guaranteed. If the prepayment of the remaining PIM
or PIMI results from the foreclosure on the underlying property or an insurance
claim,
-7-
the Trust generally would not receive any participation interest or any amounts
due under the Additional Loan. At this time, the Trust does not expect the
remaining PIM and PIMIs to be subject to an insurance claim or foreclosure.
The Trust has the option to call the remaining PIM and all of the PIMIs by
accelerating their maturity. If the call feature is exercised for an entire PIM
or PIMI then the insurance feature of the loan would be cancelled. Therefore,
the Advisor will determine the merits of exercising the call option for each PIM
and PIMI as economic conditions warrant. The Advisor also has the ability to
modify or waive the prepayment premiums. Such factors as the condition of the
asset, local market conditions, the interest rate environment and available
financing will have an impact on these decisions.
Critical Accounting Policies
The Trust's critical accounting policies relate to revenue recognition related
to the Trust's PIM and PIMI investments, impaired mortgage loans, amortization
of Prepaid Fees and Expenses and the carrying value of its MBS. The Trust's
policies are as follows:
The Trust accounts for its MBS portion of a PIM or PIMI investment in accordance
with the Financial Accounting Standards Board's Statement 115, "Accounting for
Certain Investments in Debt and Equity Securities" ("FAS 115"), under the
classification of held to maturity as these investments have a participation
feature. As a result, the Trust would not sell or otherwise dispose of the MBS.
Accordingly, the Trust has both the intention and ability to hold these
investments to expected maturity. The Trust carries these MBS at amortized cost.
The insured mortgage portion of the Federal Housing Administration ("FHA") PIM
or PIMI is carried at amortized cost. The Trust holds these mortgages at
amortized cost since they are fully insured by the FHA. The Additional Loans are
carried at amortized cost unless the Advisor believes there is an impairment in
value, in which case a valuation allowance is established in accordance with FAS
114 "Accounting by Creditors for Impairment of a Loan" and FAS 118 "Accounting
by Creditors for Impairment of a Loan-Income Recognition and Disclosures". The
Trust, in accordance with the FAS 115, classifies its MBS portfolio as
available-for-sale. The Trust classifies its MBS portfolio as available-for-sale
as a portion of the MBS portfolio may remain after all of the PIMs and PIMIs
payoff. It will be necessary to then sell the remaining MBS portfolio in order
to close out the Trust. In addition, other situations such as liquidity needs
could arise which would necessitate the sale of a portion of the MBS portfolio.
The Trust carries its MBS at fair market value and reflects any unrealized gains
(losses) as a separate component of Shareholders' Equity. The Trust amortizes
purchase premiums or discounts over the life of the underlying mortgages using
the effective interest method.
Basic interest is recognized based on the stated rate of the Department of
Housing and Urban Development ("HUD") Insured Mortgage loan (less the servicer's
fee) or the coupon rate of the Fannie Mae MBS. The Trust recognizes interest
related to the participation features when the amount becomes fixed and the
transaction that gives rise to such amount is finalized, cash is received and
all contingencies are resolved. This could be the sale or refinancing of the
underlying real estate, which results in a cash payment to the Trust or a cash
payment made to the Trust from surplus cash relative to the participation
feature. The Trust defers the recognition of Additional Loan interest payments
as income to the extent these interest payments are from escrows established
with the proceeds of the Additional Loan. When the properties underlying the
PIMIs generate sufficient cash flow to make the required Additional Loan
interest payments and the Additional Loan value is deemed collectible, the Trust
recognizes income as earned and commences amortizing deferred interest amounts
into income over the remaining estimated term of the Additional Loan. During
periods where mortgage loans are impaired the Trust suspends amortizing deferred
interest.
Impaired loans are those Additional Loans for which the Advisor believes the
collection of all amounts due in accordance with the contractual terms of the
loan agreement is not likely. Where necessary, impaired loans are measured based
on the fair value of the underlying collateral net of estimated selling costs.
The Trust measures impairment on these loans quarterly. Interest received on
impaired loans is generally applied against the loan principal.
Prepaid fees and expenses represent prepaid acquisition fees and expenses and
prepaid participation servicing fees paid for the acquisition and servicing of
PIMs and PIMIs. The Trust amortizes prepaid acquisition fees and expenses using
a method that approximates the effective interest method over a period of ten to
twelve years, which represents the estimated life of the underlying mortgage.
The prepaid participation servicing fees are amortized using a method that
approximates the effective interest method over a ten-year period beginning at
final endorsement of the loan if a HUD-insured loan and at closing if a Fannie
Mae loan. Upon the repayment of a PIM or PIMI, any unamortized acquisition fees
and expenses and unamortized participation servicing fees related to such loan
are expensed.
-8-
Results of Operations
The Trust's net income decreased in the first quarter of 2004 as compared to the
first quarter of 2003 primarily due to decreases in basic interest on PIMs and
PIMIs, participation interest and MBS interest income. This decrease was
partially offset by a decrease in amortization expense. Basic interest on PIMs
and PIMIs decreased primarily due to the Mequon Trails, Rivergreens II,
Crossings Village and Fountains payoffs in 2003. Basic interest on PIMs and
PIMIs also decreased due to the reclassification of the Oasis at Springtree PIMI
to a MBS in March 2003. Participation interest decreased primarily due to the
participation interest collected from the payoff of Oasis at Springtree in the
first quarter of 2003, which exceeded the participation interest collected in
the first quarter of 2004. MBS interest income decreased primarily due to
principal collections on the single family MBS and the Willows MBS payoff in
2003. Amortization expense decreased primarily due to the payoffs of the
Rivergreens II and Fountains PIMs and the Oasis at Springtree and Willows MBS in
2003. Amortization expense also decreased due to the full amortization of
prepaid fees and expenses for the Mequon Trails PIM and the Crossings Village
PIMI in 2003.
Off Balance Sheet Arrangements
The Trust has no off balance sheet arrangements as described in Item
303(a)(4)(ii) of Regulation S-K and did not have any such arrangements during
the period covered by this report on Form 10-Q.
Contractual Obligations
The Trust has no contractual obligations as contemplated by Item 303(a)(5) of
Regulation S-K and did not have any such arrangements either during the period
covered by this report on Form 10-Q or during the Partnership's most recent
completed fiscal year.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Assessment of Credit Risk
The Trust's investments in insured mortgages and MBS are guaranteed and/or
insured by Fannie Mae, FHLMC, the Government National Mortgage Association
("GNMA") and HUD, and therefore, the certainty of their cash flows and the risk
of material loss of the amounts invested depends on the creditworthiness of
these entities.
Fannie Mae is a federally chartered private corporation that guarantees
obligations originated under its programs. FHLMC is a federally chartered
corporation that guarantees obligations originated under its programs. These
obligations are not guaranteed by the U.S. Government or the Federal Home Loan
Bank Board. However, Fannie Mae and FHLMC are two of the largest corporations in
the United States, and both have significant experience in mortgage
securitizations. In addition, their MBS carry the highest credit rating given to
financial instruments. GNMA guarantees the full and timely payment of principal
and basic interest on the securities it issues, which represents interest in
pooled mortgages insured by HUD. Obligations insured by HUD, an agency of the
U.S. Government, are backed by the full faith and credit of the U.S. Government.
Collection of the principal and interest of the Additional Loans and interest on
the participation features have risks similar to those associated with higher
risk debt instruments, including: reliance on the owner's operating skills,
ability to maintain occupancy levels, control operating expenses, ability to
maintain the properties and obtain adequate insurance coverage. Operations also
may be affected by adverse changes in general economic conditions, local
conditions, and changes in governmental regulations, real estate zoning laws, or
tax laws; and other circumstances over which the Trust may have little or no
control.
On March 31, 2004, the Trust's investments also include cash and cash
equivalents of approximately $3.9 million of Agency paper, which is issued by
Government Sponsored Enterprises with a credit rating equal to the top rating
category of a nationally recognized statistical rating organization.
Interest Rate Risk
The Trust's primary market risk exposure is to interest rate risk, which can be
defined as the exposure of the Trust's net income, comprehensive income or
financial condition to adverse movements in interest rates. At March 31, 2004,
the Trust's remaining PIM, PIMIs and MBS comprise the majority of the Trust's
assets. Decreases in interest rates may accelerate the prepayment of the Trust's
investments. Increases in interest rates may decrease the proceeds from a sale
of the MBS. The Trust does not utilize any derivatives or other instruments to
manage this risk as the Trust plans to hold all of its PIM and PIMI investments
to expected maturity. It is expected that substantially all of the MBS will
prepay over the same period, mitigating any potential interest rate risk to the
disposition value of any remaining MBS.
-9-
The Trust monitors prepayments and considers prepayment trends, as well as
dividend requirements of the Trust, when setting regular dividend policy. For
MBS, the fund forecasts prepayments based on trends in similar securities as
reported by statistical reporting entities such as Bloomberg. For the remaining
PIM and PIMIs, the Trust incorporates prepayment assumptions into planning as
individual properties notify the Trust of the intent to prepay or as they are
scheduled to mature.
Item 4. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
As of March 31, 2004, the Chief Executive Officer and the Chief Accounting
Officer carried out an evaluation of the effectiveness of the design and
operation of the Trust's disclosure controls and procedures. The Chief Executive
Officer and the Chief Accounting Officer concluded that the Trust's disclosure
controls and procedures were effective, as of the date of their evaluation, in
timely alerting them to material information relating to the Trust required to
be included in this Quarterly Report on Form 10-Q.
(b) Changes in Internal Controls
There were no significant changes in the Trust's internal controls or in other
factors that could significantly affect such internal controls subsequent to the
date of the evaluation described in paragraph (a) above.
-10-
KRUPP GOVERNMENT INCOME TRUST II
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity
Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(31.1) Chief Executive Officer Certification pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
(31.2) Chief Accounting Officer Certification pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
(32.1) Chief Executive Officer Certification pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
(32.2) Chief Accounting Officer Certification pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K
None
-11-
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 Government Income Trust II
(Registrant)
BY: /s/ Alan Reese
------------------------------
Alan Reese
Treasurer and Chief Accounting Officer of
Krupp Government Income Trust II.
Date: May 5, 2004
-12-