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 June 30, 2003
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Commission File Number: 0-16561
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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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(Unaudited)
June 30, December 31,
2003 2002
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Assets
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Property and equipment, all held for sale $ 23,540,847 23,508,061
Less accumulated depreciation 9,079,734 9,079,734
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14,461,113 14,428,327
Cash and equivalents 55,431 273,847
Other assets 2,624,579 2,931,380
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Total assets $ 17,141,123 17,633,554
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Liabilities and Partners' Equity
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Mortgage loans payable 14,925,910 15,042,196
Accounts payable and accrued expenses 288,484 233,411
Other liabilities 175,321 190,944
Partners' equity 1,751,408 2,167,003
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Total liabilities and partners' equity $ 17,141,123 17,633,554
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Condensed Consolidated Statements of Operations
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(Unaudited)
Three months ended June 30, Six months ended June 30,
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2003 2002 2003 2002
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Rental income $ 385,633 1,006,626 818,909 1,989,830
Other income 245,446 220,422 453,504 419,785
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Total income 631,079 1,227,048 1,272,413 2,409,615
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Property operating costs 399,627 530,722 709,496 1,058,678
Administrative expense - affiliates 102,825 157,594 220,953 300,211
Other administrative expense 74,897 94,342 141,840 174,038
Interest 307,954 402,461 615,719 803,889
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Total expenses 885,303 1,185,119 1,688,008 2,336,816
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Net income (loss) $ (254,224) 41,929 (415,595) 72,799
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Net income (loss) per limited partnership unit $ (11.74) 1.94 (19.19) 3.36
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Weighted average limited partnership units 21,003 21,003 21,003 21,003
outstanding =================== ================ ================ =================
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Condensed Consolidated Statements of Cash Flows
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(Unaudited)
Six months ended June 30,
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2003 2002
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Cash provided (used) by:
Operating activities:
Net income (loss) $ (415,595) 72,799
Adjustments - other, principally changes in other assets and liabilities 346,251 (22,785)
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Net cash provided by (used in) operating activities (69,344) 50,014
Investing activities - additions to property and equipment (32,786) (44,344)
Financing activities - principal payments on mortgage loans (116,286) (135,290)
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Net decrease in cash and equivalents (218,416) (129,620)
Cash and equivalents at beginning of period 273,847 662,069
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Cash and equivalents at end of period $ 55,431 532,449
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Notes to Consolidated Financial Statements
Six months ended June 30, 2003 and 2002
(Unaudited)
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 unaudited interim consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America and the instructions to Form 10-Q. Accordingly, they do
not include all of the information and notes required by accounting principles
generally accepted in the United States of America for complete financial
statements. The balance sheet at December 31, 2002 has been derived from the
audited financial statements at that date. In the opinion of management, all
adjustments (consisting of normal recurring adjustments) considered necessary
for a fair presentation, have been included. The Partnership's significant
accounting policies are set forth in its December 31, 2002 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.
Property and Equipment
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At June 30, 2003, 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 for the three and six months
ended June 30, 2003 was approximately $208,000 and $418,000, respectively.
Depreciation not recorded for the three and six months ended June 30, 2002 was
approximately $265,000 and $530,000, respectively.
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Current Accounting Pronouncements
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Statements of Financial Accounting Standards (SFAS) Nos. 145, 146, 147, and 148
which concern accounting for gains and losses from the extinguishments of debt,
exit or disposal activities, acquisitions of certain financial institutions, and
accounting for stock-based compensation, respectively, became effective for the
Partnership on January 1, 2003 and did not have any effect on the Partnership's
consolidated financial statements.
In April 2003, the Financial Accounting Standards Board issued SFAS No. 149
"Amendment of Statement 133 on Derivative Instruments and Hedging Activities."
This statement is effective for contract and hedging relationships entered into
or modified after June 30, 2003. In May 2003, the Financial Accounting Standards
Board issued SFAS No. 150 "Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equities." This statement is effective
for financial instruments entered into or modified after May 31, 2003 and is
effective for all other financial instruments as of the first interim period
beginning after June 15, 2003. The Partnership does not believe that either
statement will have a material impact on its consolidated financial statements.
In January 2003, the Financial Accounting Standards Board issued Interpretation
No. 46, "Consolidation of Variable Interest Entities." The Partnership does not
believe that the Interpretation will have a material impact on its consolidated
financial statements.
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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Effective January 1, 2001, management began formally marketing all remaining
properties in the Partnership for sale. In the second quarter of 2003, the
Partnership continued to experience difficulties generating sufficient cash to
cover its financial obligations. In the first half of 2003, cash decreased
approximately $218,000. As a result of the sale of Camelot East Apartments
(Camelot) on July 31, 2002, a distribution of $850,000 was made to the limited
partners in December 2002. In accordance with the settlement of the lawsuit
(Part II, Item 1), it is anticipated that with the sale of the remaining
properties, the Partnership may be in a position to make a distribution to the
limited partners.
Results of Operations
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The Partnership's operations produced an operating loss of approximately
$416,000 for the six months ended June 30, 2003. Comparable pro forma results
for the same 2002 period (excluding Camelot) would be an operating profit of
approximately $61,000. Lower occupancy at four of the commercial properties was
the most significant reason for the decrease in net income. Other income
(excluding Camelot) increased approximately $57,000 primarily due to increased
common area maintenance fees. Excluding Camelot, total expenses for the
partnership increased $25,000 due to an increase in property operating costs of
$90,000, decreased administrative expenses of $50,000 and decreased interest
expense of $15,000. The increase in property operating costs was mainly
attributable to increased payroll expenses. The decrease in administrative
expenses was mainly due to a decrease in management fees as a result of the
decrease in rental income. Interest expense decreased due to the declining
outstanding principal balance of mortgages for all properties.
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PART I - Item 3. Quantitative and Qualitative Disclosures About Market Risk
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The Partnership invests only in short term money market instruments, in amounts
in excess of daily working cash requirements. The rates of earnings on those
investments increase or decrease in line with general movement of interest. The
mortgage loans on the Partnership's properties are fixed-rate and therefore, is
not subject to market risk.
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. 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, 2002.
Item 6. Exhibits and Reports on Form 8-K
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(a) Exhibits
31. Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32. Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 is
filed herewith.
(b) Reports on 8-K
None.
SIGNATURES
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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
August 14, 2003 /s/ Joseph M. Jayson
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Date Joseph M. Jayson,
Individual General Partner and
Principal Financial Officer
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