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 June 30, 2001
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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 - June 30, 2001 (unaudited)
and December 31, 2000
Consolidated Statements of Operations - For the Three
Months and Six Months Ended June 30, 2001 and 2000
(unaudited)
Consolidated Statements of Cash Flows - For the Six
Months Ended June 30, 2001 and 2000 (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 June 30, 2001, Registrant had cash of
$10,074. 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 June 30, 2001, Registrant had
restricted cash of $117,096 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 second quarter of 2001, the
Registrant incurred a net loss of $25,598 ($2.27 per limited
partnership unit) compared to a net loss of $66,086 ($5.87 per
limited partnership unit) for the same period in 2000. For the
first six months of 2001, the Registrant incurred a loss of
$59,428 ($5.27 per limited partnership unit) compared to net loss
of $116,940 ($10.39 per limited partnership unit) for the same
period in 2000.
Rental income increased $3,605 from $32,322 in the
second quarter of 2000 to $35,927 in the same period in 2001 and
increased $8,621 from $60,832 for the first six months of 2000 to
$69,453 in the same period in 2001. The increase in rental income
from the second quarter of 2000 to the same period in 2001 is due
to an increase in average monthly rental rates, partially offset
by a decrease in average occupancy (92% to 82%). The increase
during the first six months of 2000 to the same period in 2001 is
due to an increase in average monthly rental rates.
Rental operations expense decreased $18,263 from
$36,924 in the second quarter of 2000 to $18,661 in the same
period in 2001 and decreased $15,096 from $54,938 in the first
six months of 2000 to $39,842 in the same period in 2001. The
decrease in both periods from 2000 to 2001 is due to a decrease
in maintenance expense and real estate tax expense. The decrease
in maintenance expense is due to a decrease in apartment
preparation expenses, and the decrease in real estate tax expense
is due to the decrease in the amount of payments made during the
periods.
Interest expense increased $969 from $14,904 in the
second quarter of 2000 to $15,873 in the same period in 2001. The
increase is due an increase in principal balance on the mortgage
in which the interest is calculated. Interest expense increased
$1,565 from $29,709 in the first six months of 2000 to $31,274
for the first six months of 2001. The increase in the second
quarter and the first six months of 2001 is due to additions to
the principal balance.
In the second quarter of 2001, Registrant incurred a
loss of approximately $14,000 at the Lofts at Red Hill, including
$15,000 of depreciation and amortization expense, compared to a
loss of $35,000 including $15,000 of depreciation expense in the
second quarter of 2000. The decrease in loss from the second
quarter of 2000 to the same period in 2001 is due to a decrease
in rental operations expense due to a decrease in average
occupancy (92% to 82%).
For the first six months of 2001, Registrant
incurred a loss of approximately $30,000 at the Lofts at Red
Hill, including $30,000 of depreciation and amortization expense,
compared to a loss of $54,000 including $29,000 of depreciation
expense in the same period of 2000. The decrease in loss from
the first six months of 2000 to the same period in 2001 is due to
the increase in rental income and a decrease in rental operating
expense. The increase in rental income is due to an increase in
average monthly rental rates. The decrease in rental operating
expense is due to a decrease in maintenance expense and a
decrease in real estate tax expense. The decrease in maintenance
expense is due to a decrease in apartment preparation expense,
and the decrease in real estate tax expense due to a decrease in
the payment amount during the period.
DIVERSIFIED HISTORIC INVESTORS V
(a Pennsylvania limited partnership)
CONSOLIDATED BALANCE SHEETS
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Assets
June 30, 2001 December 31, 2000
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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 89,316 89,316
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1,595,793 1,595,793
Less-accumulated depreciation (799,163) (769,734)
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796,630 826,059
Cash and cash equivalents 10,074 7,545
Restricted cash 117,096 112,630
Accounts and notes receivable 10,640 6,954
Other assets (net of
amortization of $257,141 and
$224,919 at June 30, 2001 and
December 31, 2000,
respectively) 80,556 112,778
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Total $1,014,996 $1,065,966
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Liabilities and Partners' Equity
Liabilities:
Debt obligations $ 451,118 $ 429,645
Accounts payable:
Trade 119,124 115,800
Related parties 33,656 33,656
Taxes 0 17,332
Accrued liabilities 14,329 12,811
Tenant security deposits 9,190 9,715
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Total liabilities 627,417 618,959
Partners' equity 387,579 447,007
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Total $1,014,996 $1,065,966
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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 Six months
ended June 30, ended June 30,
2001 2000 2001 2000
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Restated Restated
Revenues:
Rental income $35,927 $32,322 $ 69,453 $ 60,832
Interest income 3,833 51 3,884 172
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Total revenues 39,760 32,373 73,337 61,004
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Costs and expenses:
Rental operations 18,660 36,924 39,842 54,938
General and
administrative 0 15,999 0 31,998
Interest 15,873 14,904 31,273 29,709
Depreciation and
amortization 30,825 30,632 61,650 61,299
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Total costs and
expenses 65,358 98,459 132,765 177,944
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Net (loss) income ($25,598) ($66,086) ($ 59,428) ($116,940)
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Net (loss) income
per limited
partnership unit ($ 2.27) ($ 5.87) ($ 5.27) ($ 10.39)
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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)
Six months ended
June 30,
2001 2000
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Restated
Cash flows from operating activities:
Net (loss) income ($59,428) ($116,940)
Adjustments to reconcile net (loss)
income to net cash provided by
used in) operating activities:
Depreciation and amortization 61,650 61,299
Extraordinary gain from
extinguishment of debt 0 0
Changes in assets and liabilities:
(Increase) decrease in restricted
cash (4,467) (1,923)
(Increase) decrease in accounts
receivable (3,686) (1,790)
Increase in accounts payable - trade 3,324 40,644
Decrease) increase in accounts
payable - taxes (17,332) 13,496
Increase in accrued liabilities 1,520 1,096
(Decrease) increase in tenant
security deposits (525) 1,791
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Net cash used in operating activities: (18,944) (2,327)
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Cash flows from financing activities:
Proceeds from debt financings 21,473 5,709
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Net cash provided by (used in)
financing activities: 21,473 5,709
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Increase (decrease) in cash and cash
equivalents 2,529 3,382
Cash and cash equivalents at
beginning of period 7,545 3,951
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Cash and cash equivalents at end of
period $10,074 $ 7,333
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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") 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 in the Registrant's Annual
Report on Form 10-K for the year ended December 31, 2000.
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 a
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 June 30, 2001.
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: September 23, 2002 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