FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2002
Commission File Number: 0-16561
REALMARK PROPERTY INVESTORS LIMITED PARTNERSHIP - V
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(Exact name of registrant as specified in its charter)
Delaware 16-1275925
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(State of organization) (IRS Employer Identification No.)
2350 North Forest Road, Suite 12A,Getzville, New York 14068
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(Address of principal executive offices)
(716) 636-0280
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(Registrant's telephone number)
Indicate by a 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 [ ]
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
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Condensed Consolidated Balance Sheets
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September 30, December 31,
2002 2001
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Assets
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Cost of property and equipment, all held for sale $ 23,493,976 30,005,949
Less accumulated depreciation 9,079,735 12,371,448
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14,414,241 17,634,501
Cash and equivalents 1,408,632 662,069
Other assets 2,832,058 2,521,519
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Total assets $ 18,654,931 20,818,089
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Liabilities and Partners' Equity
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Mortgage loans payable 15,098,659 19,972,850
Accounts payable and accrued expenses 361,500 295,606
Other liabilities 144,589 220,975
Partners' equity 3,050,183 328,658
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Total liabilities and partners' equity $ 18,654,931 20,818,089
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Condensed Consolidated Statements of Operations
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Three months ended Sept 30, Nine months ended Sept. 30,
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2002 2001 2002 2001
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Rental income $ 725,348 1,041,190 2,712,377 3,258,877
Other income 188,668 226,748 611,254 666,074
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Total income 914,016 1,267,938 3,323,631 3,924,951
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Property operating costs 511,945 576,270 1,570,623 1,656,557
Administrative expense - affiliates 137,237 185,725 437,448 510,739
Other administrative expense 27,341 56,254 201,379 146,975
Mortgage loan interest 315,628 406,911 1,119,517 1,226,874
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Total expenses 992,151 1,225,160 3,328,967 3,541,145
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Income (loss) before gain on (78,135) 42,778 (5,336) 383,806
sale of property
Gain on sale of property 2,726,861 -- 2,726,861 --
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Net income $ 2,648,726 42,778 2,721,525 383,806
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Net income per limited partnership
unit $ 122.33 1.98 125.69 17.73
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Weighted average limited
partnership units 21,003 21,003 21,003 21,003
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Condensed Consolidated Statements of Cash Flows
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Nine months ended September 30,
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2002 2001
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Cash provided (used) by:
Operating activities:
Net income $ 2,721,525 383,806
Adjustments:
Gain on sale of property (2,726,861) --
Other, principally changes in other assets and liabilities (171,328) (145,002)
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Net cash provided (used) by operating activities (176,664) 238,804
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Investing activities:
Additions to property and equipment (75,898) (199,630)
Net proceeds from sale of property 5,873,316 --
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Net cash provided (used) by investing activities 5,620,754 (199,630)
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Financing activities - principal payments on mortgage loans (4,874,191) (187,626)
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Net increase (decrease) in cash and equivalents 746,563 (148,452)
Cash and equivalents at beginning of period 662,069 962,300
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Cash and equivalents at end of period $ 1,408,632 813,848
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Notes to Consolidated Financial Statements
Nine months ended September 30, 2002 and 2001
Organization
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Realmark Property Investors Limited Partnership - V (the Partnership), a
Delaware limited partnership, was formed on February 28, 1986, to invest in a
diversified portfolio of income-producing real estate investments. The general
partners are Realmark Properties, Inc. (the corporate general partner) and
Joseph M. Jayson (the individual general partner). Joseph M. Jayson is the sole
shareholder of J.M. Jayson & Company, Inc. Realmark Properties, Inc. is a
wholly-owned subsidiary of J.M. Jayson & Company, Inc. Under the partnership
agreement, the general partners and their affiliates can receive compensation
for services rendered and reimbursement for expenses incurred on behalf of the
Partnership.
Basis of Presentation
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The accompanying interim financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
and, in the opinion of management, contain all necessary adjustments for a fair
presentation. The Partnership's significant accounting policies are set forth in
its December 31, 2001 Form 10-K. The interim financial statements should be read
in conjunction with the financial statements included therein. The interim
results should not be considered indicative of the annual results.
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Property and Equipment
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At September 30, 2002, the Partnership owned and operated five commercial
properties. All of the properties are being actively marketed for sale and,
therefore, are not being depreciated. Depreciation not recorded on these
properties for the three and nine months ended September 30, 2002 was
approximately $226,000 and $755,000, respectively. Depreciation not recorded for
the three and nine months ended September 30, 2001 was approximately $260,000
and $760,000, respectively.
In its March 31, 2002 and June 30, 2002 Form 10-Qs, the Partnership reported the
existence of a contingent $6,800,000 sales agreement with an unaffiliated
entity, covering Camelot East Apartments. On July 31, 2002, the sale was
consummated for cash of $6,500,000 and a $300,000 four-year promissory note from
the purchaser, resulting in a net gain of approximately $2,700,000.
On a pro forma basis, if the sale of Camelot East had occurred in December 31,
2001, that balance sheet would have shown a decrease in cash and equivalents
from $662,000 to $315,000; the existence of a note receivable in the amount of
$300,000; a decrease in property of $6,576,000, a decrease in mortgage loan
payable of $4,713,000; and an increase in partnership capital of $577,000.
If the property had been sold on January 1, 2001, the pro forma results of
operations for the year ended December 31, 2001 would have been net income of
$534,000 ($24.66 per limited partnership unit) $135,000 more than the reported
net income, resulting from decreases in revenue and expenses of $1,313,000 and
$1,448,000, respectively. For the nine months ended September 30, 2002, the pro
forma operating results would have been an operating profit of $62,000,
resulting from decreases in revenue and expenses of $781,000 and $1,097,000,
respectively. For the three months ended September 30, 2002, the pro forma
operating results would have been a profit of $400, resulting from decreases in
revenue and expenses of $90,000 and $418,000, respectively.
All of the foregoing pro forma operating data excludes the gain on the
disposition of the property and simply reflects the elimination of Camelot
East's operating accounts from the consolidated historical results.
Current Accounting Pronouncements
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Statements of Financial Accounting Standards Nos. 145, 146 and 147 which concern
accounting for gains and losses from the extinguishments of debt, exit or
disposal activities, and acquisitions of certain financial institutions will
become effective for the Partnership in the first quarter of 2003. The
Partnership is currently evaluating the impact of these pronouncements to
determine the effect, if any, they may have on the consolidated financial
position and results of operations.
PART I - Item 2. Management's Discussion and Analysis of Financial Condition
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and Results of Operations
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Liquidity and Capital Resources
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The Partnership continues to maintain sufficient cash to enable it to fund debt
service and capital improvements. As a result of the sale of Camelot East,
management anticipates making a distribution to the Limited Partners. No
distributions to partners have been made since 1998.
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Results of Operations
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The Partnership's operations, excluding the operating accounts of Camelot East,
produced operating income of $400 and $62,000 for the three and nine months
ended September 30, 2002, respectively. Comparable pro forma results for the
same 2001 periods would be an operating loss of $71,000 and operating income of
$473,000, respectively.
Net income at the commercial properties decreased $411,000. The principal reason
for the decrease in net income was lower occupancy at two of the commercial
properties, leading to the decrease in rental income of $368,000 and a decrease
in other income of 23,000, due mainly to a decrease in CAM fees. Total expenses
increased $20,000 as a result of a $37,000 increase in property operating costs,
a $63,000 decrease in administrative expenses to affiliates, a $59,000 increase
in other administrative expenses and a $13,000 decrease in interest expense. The
increase in property operating costs was due mainly to a $37,000 increase in
payroll expense. The decrease in administrative expenses to affiliates was due
mainly to a decrease in management fees as a result of the decrease in net
income. The increase in other administrative expenses was due to an increase in
professional fees. Interest expense decreased due to the declining outstanding
principal balance of mortgages for all properties.
PART I - Item 3. Quantitative and Qualitative Disclosures About Market Risk
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The Partnership's cash equivalents are short-term, interest bearing bank
accounts and its mortgage loans are fixed-rate. It has not entered into any
derivative contracts. Therefore, it has no market risk exposure.
PART I - Item 4. Controls and Procedures
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Within the 90 days prior to the filing date of this report, the Partnership
carried out an evaluation, under the supervision and with the participation of
the Partnership's management, including Joseph M. Jayson (the Partnership's
Individual General Partner and Principal Financial Officer), of the
effectiveness of the design and operation of the Partnership's disclosure
controls and procedures. Based upon that evaluation, the Principal Financial
Officer concluded that the Partnership's disclosure controls and procedures are
effective in timely alerting them to material information relating to the
Partnership (including its consolidated subsidiaries) required to be included in
the Partnership's periodic SEC filings. There have been no significant changes
in the Partnership's internal controls or in other factors that could
significantly affect these controls subsequent to the date of the evaluation.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
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As previously reported, the Partnership, as a nominal defendant, the General
Partners of the Partnership and of affiliated public partnerships (the "Realmark
Partnerships") and the officers and directors of the Corporate General Partner,
as defendants, had been involved in a class action litigation in New York State
court. The Partnership's settlement of this litigation is described in its
Annual Report on Form 10-K for the year ended December 31, 2001. Subsequent to
September 30, 2002, the court appointed a sales agent to work with the General
Partners to continue to sell the Partnership's remaining properties.
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Item 6. Exhibits and Reports on Form 8-K
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(a) Exhibits
99.1 Certification of Principal Financial Officer Pursuant
to Section 302 of the Sarbanes- Oxley Act of 2002.
99.2 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 10-K
None.
SIGNATURES
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.
REALMARK PROPERTY INVESTORS LIMITED PARTNERHIP - V
November 14, 2002 /s/ Joseph M. Jayson
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Date Joseph M. Jayson,
Individual General Partner
and Principal Financial Officer
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