UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC. 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, 2002
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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 33-15597
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DIVERSIFIED HISTORIC INVESTORS V
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(Exact name of registrant as specified in its charter)
Pennsylvania 23-2479468
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1521 Locust Street, Philadelphia, PA 19102
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (215) 557-9800
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N/A
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(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
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Consolidated Balance Sheets - March 31, 2002
(unaudited) and December 31, 2001
Consolidated Statements of Operations - Three Months
Ended March 31, 2002 and 2001 (unaudited)
Consolidated Statements of Cash Flows - Three Months
Ended March 31, 2002 and 2001 (unaudited)
Notes to Consolidated Financial Statements (unaudited)
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
(1) Liquidity
As of March 31, 2002, Registrant had cash of $8,693.
Such funds are expected to be used to pay liabilities and general
and administrative expenses of Registrant, and to fund cash
deficits of the property. Cash generated from operations is used
primarily to fund operating expenses and debt service. If cash
flow proves to be insufficient, the Registrant will attempt to
negotiate loan modifications with the lender in order to remain
current on all obligations. The Registrant is not aware of any
additional sources of liquidity.
As of March 31, 2002, Registrant had restricted cash
of $122,155, consisting primarily of funds held as security
deposits and escrows for taxes. As a consequence of the
restrictions as to use, Registrant does not deem these funds to
be a source of liquidity.
(2) Capital Resources
Any capital expenditures needed are generally
replacement items and are funded out of cash from operations or
replacement reserves, if any. The Registrant is not aware of any
factors which would cause historical capital expenditure levels
not to be indicative of capital requirements in the future and,
accordingly, does not believe that it will have to commit
material resources to capital investment for the foreseeable
future.
(3) Results of Operations
During the first quarter of 2002, Registrant
incurred a net loss of $34,913 ($3.10 per limited partnership
unit) compared to net loss of $30,663 ($2.70 per limited
partnership unit) for the same period in 2001.
Rental income, including all operating receipts,
decreased $1,036 from $33,527 in the first quarter of 2001 to
$32,491 in the same period in 2002. Income from actual rental
payments increased $172 from $30,759 in the first quarter of 2001
to $30,931 in the same period in 2002. The increase in is due to
an increase in occupancy for the period (84% to 87%).
Rental operations expense decreased $372 from
$21,182 in the first quarter of 2001 to $20,810 in the same
period in 2002. The decrease in rental operations expense is due
to a decrease in legal and accounting services as well as a
decrease in leasing commissions, partially offset by an increase
in maintenance expense. The decrease in legal and accounting
expense is due to a decrease in services performed during the
first quarter of 2002 compared to those performed during the same
period in 2001. The decrease in leasing commissions is due to a
decrease in the turnover of apartment units and the increase in
maintenance expense is due to an increase in apartment painting
expenses.
Interest expense increased by $737 from $15,400 in
the first quarter of 2001 to $16,137 in the same period in 2002.
The increase in interest expense at the Lofts at Red Hill is due
to an increase in principal balance on which the interest is
calculated.
In the first quarter of 2002, the Registrant
incurred a loss of approximately $20,000 at the Lofts at Red
Hill, including $15,000 of depreciation and amortization expense,
compared to a loss of $17,000, including $15,000 of depreciation
expense, in the first quarter of 2001. The increase in loss from
the first quarter of 2001 to the same period in 2002 is due to a
decrease in interest income, partially offset by an increase in
rental income. The decrease in interest income is due to an
adjustment made in 2001 that reflected unrecorded interest income
from prior periods. The increase in rental income is due to an
increase in average occupancy (84% to 87%).
DIVERSIFIED HISTORIC INVESTORS V
(a Pennsylvania limited partnership)
CONSOLIDATED BALANCE SHEETS
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Assets
March 31, 2002 December 31, 2001
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(Unaudited)
Rental properties, at cost:
Land $ 61,046 $ 61,046
Buildings and improvements 1,445,431 1,445,431
Furniture and fixtures 92,107 92,107
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1,598,584 1,598,584
Less - accumulated depreciation (843,654) (828,871)
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754,930 769,713
Cash and cash equivalents 8,693 4,974
Restricted cash 122,155 118,001
Accounts and notes receivable 13,155 13,931
receivable
Other assets (net of
amortization of $305,474
and $289,363 at
March 31, 2002 and
December 31, 2001,
respectively) 32,222 48,333
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Total $ 931,155 $ 954,952
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Liabilities and Partners' Equity
Liabilities:
Debt obligations $ 463,837 $ 459,699
Accounts payable:
Trade 128,763 127,132
Related parties 33,656 33,656
Taxes 3,178 0
Accrued liabilities 14,453 13,564
Tenant security deposits 10,485 9,205
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Total liabilities 654,372 643,256
Partners' equity 276,783 311,696
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Total $ 931,155 $ 954,952
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The accompanying notes are an integral part of these financial statements.
DIVERSIFIED HISTORIC INVESTORS V
(a Pennsylvania limited partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
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(Unaudited)
Three months ended
March 31,
2002 2001
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(Restated)
Revenues:
Rental income $32,491 $33,526
Interest income 438 3,814
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Total revenues 32,929 37,340
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Costs and expenses:
Rental operations 20,810 21,182
General and administrative 0 596
Interest 16,137 15,400
Depreciation and amortization 30,895 30,825
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Total costs and expenses 67,842 68,003
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Net (loss) income ($34,913) ($30,663)
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Net loss per limited
partnership unit:
Net (loss) income ($ 3.10) ($ 2.70)
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The accompanying notes are an integral part of these financial statements.
DIVERSIFIED HISTORIC INVESTORS V
(a Pennsylvania limited partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
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(Unaudited)
Three months ended
March 31,
2002 2001
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(Restated)
Cash flows from operating activities:
Net (loss) income ($34,913) ($30,663)
Adjustments to reconcile net loss to
net cash provided by (used in)
operating activities:
Depreciation and amortization 30,895 30,825
Changes in assets and liabilities:
Increase in restricted cash (4,154) (1,666)
Increase (decrease) in accounts
receivable 776 (622)
Increase in accounts payable - trade 1,631 1,359
Increase (decrease) in accounts
payable - taxes 3,178 (17,332)
Increase decrease in accrued
liabilities 889 203
Increase (decrease) in tenant
security deposits 1,280 (85)
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Net cash used in operating activities (418) (17,981)
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Cash flows from financing activities:
Repayments of debt financings 4,137 17,601
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Net cash provided by (used in)
financing activities 4,137 17,601
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Increase (decrease) in cash and cash
equivalents 3,719 (380)
Cash and cash equivalents at
beginning of period 4,974 7,545
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Cash and cash equivalents at end of
period $ 8,693 $ 7,165
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The accompanying notes are an integral part of these financial statements.
DIVERSIFIED HISTORIC INVESTORS V
(a Pennsylvania limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The unaudited consolidated financial statements of Diversified
Historic Investors V (the "Registrant") and related notes have
been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, certain
information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been omitted pursuant to such
rules and regulations. The accompanying consolidated financial
statements and related notes should be read in conjunction with
the audited financial statements and notes thereto on Form 10-K
of the Registrant for the year ended December 31, 2001.
The information furnished reflects, in the opinion of management,
all adjustments, consisting of normal recurring accruals,
necessary for a fair presentation of the results of the interim
periods presented.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
To the best of its knowledge, Registrant is not
party to, nor is its property the subject of, any pending
material legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted during the quarter covered
by this report to a vote of security holders.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit Number Document
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3 Registrant's Amended and
Restated Certificate of Limited
Partnership and Agreement of
Limited Partnership, previously
filed as part of Amendment No.
2 of Registrant's Registration
Statement on Form S-11, are
incorporated herein by
reference.
(b) Reports on Form 8-K:
No reports were filed on Form 8-K during the quarter
ended March 31, 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Date: June 4, 2003 DIVERSIFIED HISTORIC INVESTORS V
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By: Dover Historic Advisors V,
General Partner
By: EPK, Inc., Partner
By: /s/ Spencer Wertheimer
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SPENCER WERTHEIMER
President and Treasurer