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 September 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 - September 30, 2001
(unaudited) and December 31, 2000
Consolidated Statements of Operations - For the Three
Months and Nine Months Ended September 30, 2001 and 2000
(unaudited)
Consolidated Statements of Cash Flows - For the Nine
Months Ended September 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 September 30, 2001, Registrant had cash
of $9,167. Such funds are expected to be used to pay liabilities
and general and administrative expenses of Registrant, and to
fund cash deficits of the properties. 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 September 30, 2001, Registrant had
restricted cash of $111,494 consisting primarily of funds held as
security deposits escrows for real estate 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 third quarter of 2001, Registrant
incurred a net loss of $45,720 ($4.06 per limited partnership
unit) compared to a net loss of $44,916 ($3.99 per limited
partnership unit) for the same period in 2000. For the first
nine months of 2001, Registrant incurred a loss of $105,148
($9.34 per limited partnership unit) compared to a net loss of
$161,855 ($14.38 per limited partnership unit) for the same
period in 2000.
Rental income decreased $5,922 from $38,497 in the
third quarter of 2000 to $32,575 in the same period of 2001 and
increased $2,698 from $99,330 for the first nine months of 2000
to $102,028 for the same period in 2001. The decrease in rental
income in the third quarter is due to a decrease in average
occupancy (98% to 83%). The increase in rental income during the
first nine months is due to an increase in average monthly rental
rates, partially offset by a decrease in average occupancy (91%
to 83%).
Rental operations expense increased $8,380 from
$21,661 in the third quarter of 2000 to $30,041 in the same
period in 2001 and decreased $6,717 from $76,599 for the first
nine months of 2000 to $69,882 for the same period in 2001. The
increase in rental operating expense from the third quarter of
2000 to the same period in 2001 is due to an increase in real
estate tax expense. The decrease from the first nine months of
2000 to the same period in 2001 is due to a decrease in
maintenance expense and commission expense. The overall decrease
in maintenance expense and commission expense is due to a
decrease in occupancy (91% to 83%).
Interest expense increased $1,061 from $15,177 in the
third quarter of 2000 to $16,238 in the same period in 2001 and
increased $2,626 from $44,886 for the first nine months of 2000
to $47,511 for the same period in 2001. The increase in both the
third quarter and the first nine months of 2001 is due to an
increase in principal balance on the mortgage in which the
interest is calculated.
In the third quarter of 2001, Registrant incurred a
loss of approximately $30,000 at the Lofts at Red Hill, including
$17,000 of depreciation and amortization expense, compared to a
loss of approximately $13,000 including $15,000 of depreciation
expense in the third quarter of 2000, and for the first nine
months of 2001, incurred a loss of approximately $60,000,
including $47,000 of depreciation expense compared to a loss of
approximately $67,000 for the first nine months of 2000 including
depreciation expense of $46,000. The increase in loss from the
third quarter of 2000 to the same period in 2001 is due to a
decrease in rental income and an increase in rental operating
expense. The decrease in rental income is due to a decrease in
average occupancy (98% to 83%). The increase in rental operating
expense is due to an increase in real estate tax expense. The
decrease in loss from the first nine months of 2000 to the same
period in 2001 is due to a decrease in rental operating expense.
The decrease in rental operating expense is due to decreases in
maintenance and commission expense due to a decrease in average
occupancy (91% to 83%).
DIVERSIFIED HISTORIC INVESTORS V
(a Pennsylvania limited partnership)
CONSOLIDATED BALANCE SHEETS
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Assets
September 30, December 31,
2001 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 (813,876) (769,734)
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781,917 826,059
Cash and cash equivalents 9,167 7,545
Restricted cash 111,495 112,630
Accounts and notes receivable 12,939 6,954
Other assets (net of
amortization of $274,521 and
$224,919 at September 30, 2001
and December 31, 2000,
respectively) 63,175 112,778
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Total $ 978,693 $1,065,966
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Liabilities and Partners' Equity
Liabilities:
Debt obligations 455,356 429,645
Accounts payable:
Trade 123,594 115,800
Related parties 33,656 33,656
Taxes 1,648 17,332
Accrued liabilities 13,351 12,811
Tenant security deposits 9,230 9,715
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Total liabilities 636,835 618,959
Partners' equity 341,858 447,007
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Total $ 978,693 $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 Nine months
ended September 30, ended September 30,
2001 2000 2001 2000
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Restated Restated
Revenues:
Rental income $32,574 $38,497 $102,028 $ 99,330
Interest income 79 56 3,962 228
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Total revenues 32,653 38,553 105,990 99,558
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Costs and expenses:
Rental operations 30,040 21,661 69,882 76,599
General and
administrative 0 15,999 0 47,997
Interest 16,238 15,177 47,511 44,886
Depreciation and
amortization 32,095 30,632 93,745 91,931
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Total costs and expenses 78,373 83,469 211,138 261,413
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Net (loss) income ($45,720) ($44,916) ($105,148) ($161,855)
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Net (loss) income per
limited partnership unit: ($ 4.06) ($ 3.99) ($ 9.34) ($ 14.38)
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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)
Nine months ended
September 30,
2001 2000
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Restated
Cash flows from operating activities:
Net (loss) income ($105,148) ($161,855)
Adjustments to reconcile net (loss)
income to net cash used in operating
activities:
Depreciation and amortization 93,745 91,931
Changes in assets and liabilities:
Decrease in restricted cash 1,136 2,007
(Increase) in accounts receivable (5,986) (6,859)
Increase in accounts payable - trade 7,793 56,964
(Decrease) increase in accounts
payable - taxes (15,684) 9,315
Increase (decrease) in accrued
liabilities 540 (1,324)
(Decrease) increase in tenant
security deposits (485) 1,826
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Net cash used in operating activities: (24,089) (7,995)
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Cash flows from financing activities:
Proceeds from debt financings 25,711 8,886
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Net cash provided by (used in)
financing activities 25,711 8,886
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Increase (decrease) in cash and cash
equivalents 1,622 891
Cash and cash equivalents at
beginning of period 7,545 3,951
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Cash and cash equivalents at end of
period $ 9,167 $ 4,842
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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 September 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