-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GBX1NYi+web+1ngMOgHwYjDlyoOWvgbWseO7u4/DBzzNIOvqmKNC50gWAXAolKZI 5CUl1H4lcqXk4N4iEChY6g== 0000318140-96-000004.txt : 19960515 0000318140-96-000004.hdr.sgml : 19960515 ACCESSION NUMBER: 0000318140-96-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960514 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MCNEIL REAL ESTATE FUND XI LTD CENTRAL INDEX KEY: 0000318140 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 942669577 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-09783 FILM NUMBER: 96564419 BUSINESS ADDRESS: STREET 1: 13760 NOEL ROAD STREET 2: SUITE 700 LB70 CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 2144485800 MAIL ADDRESS: STREET 1: 13760 NOEL ROAD SUITE 700 LB70 CITY: DALLAS STATE: TX ZIP: 75240 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the period ended March 31, 1996 ------------------------------------------------------ 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 0-9783 MCNEIL REAL ESTATE FUND XI, LTD. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) California 94-2669577 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 13760 Noel Road, Suite 700, LB70, Dallas, Texas 75240 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (214) 448-5800 ------------------------------ 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 and (2) has been subject to such filing requirements for the past 90 days. Yes X No___ MCNEIL REAL ESTATE FUND XI, LTD. PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS - ------- -------------------- BALANCE SHEETS
March 31, December 31, 1996 1995 --------------- -------------- ASSETS - ------ Real estate investments: Land..................................................... $ 5,938,464 $ 5,938,464 Buildings and improvements............................... 58,714,003 58,408,551 -------------- ------------- 64,652,467 64,347,015 Less: Accumulated depreciation.......................... (37,750,897) (37,095,184) -------------- ------------- 26,901,570 27,251,831 Cash and cash equivalents................................... 2,302,067 2,030,544 Cash segregated for security deposits....................... 362,617 386,125 Accounts receivable......................................... 185,158 31,327 Prepaid expenses and other assets........................... 151,537 276,785 Escrow deposits............................................. 1,132,794 904,523 Deferred borrowing costs (net of accumulated amortization of $545,472 and $507,241 at March 31, 1996 and December 31, 1995, respectively)............................................ 1,589,398 1,627,629 -------------- ------------- $ 32,625,141 $ 32,508,764 ============== ============= LIABILITIES AND PARTNERS' DEFICIT - --------------------------------- Mortgage notes payable, net................................. $ 39,570,372 $ 39,684,440 Accounts payable............................................ 101,871 62,056 Accrued interest............................................ 301,463 302,329 Accrued property taxes...................................... 210,687 100,959 Accrued expenses............................................ 224,422 356,025 Deferred gain - storm damage................................ 67,016 67,016 Payable to affiliates - General Partner..................... 3,105,474 2,851,851 Security deposits and deferred rental revenue............... 428,383 407,466 -------------- ------------- 44,009,688 43,832,142 -------------- ------------- Partners' deficit: Limited partners - 159,813 limited partnership units authorized and outstanding at March 31, 1996 and December 31, 1995............................. (4,846,290) (4,983,492) General Partner.......................................... (6,538,257) (6,339,886) -------------- ------------- (11,384,547) (11,323,378) -------------- ------------- $ 32,625,141 $ 32,508,764 ============== =============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. MCNEIL REAL ESTATE FUND XI, LTD. STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended March 31, --------------------------------- 1996 1995 -------------- -------------- Revenue: Rental revenue................................... $ 3,668,760 $ 3,489,989 Interest......................................... 26,962 31,101 ------------- ------------- Total revenue.................................. 3,695,722 3,521,090 ------------- ------------- Expenses: Interest......................................... 961,166 946,754 Depreciation..................................... 655,713 598,257 Property taxes................................... 224,661 240,570 Personnel expenses............................... 486,012 504,772 Utilities........................................ 269,935 233,537 Repair and maintenance........................... 432,483 399,274 Property management fees - affiliates............ 182,174 176,227 Other property operating expenses................ 191,612 207,464 General and administrative....................... 50,217 34,294 General and administrative - affiliates.......... 97,326 116,582 ------------- ------------- Total expenses................................. 3,551,299 3,457,731 ------------- ------------- Net income.......................................... $ 144,423 $ 63,359 ============= ============= Net income allocable to limited partners............ $ 137,202 $ 60,191 Net income allocable to General Partner............. 7,221 3,168 ------------- ------------- Net income.......................................... $ 144,423 $ 63,359 ============= ============= Net income per limited partnership unit............. $ .86 $ .38 ============= =============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. MCNEIL REAL ESTATE FUND XI, LTD. STATEMENTS OF PARTNERS' DEFICIT (Unaudited) For the Three Months Ended March 31, 1996 and 1995
Total General Limited Partners' Partner Partners Deficit --------------- ---------------- --------------- Balance at December 31, 1994.............. $ (5,484,195) $ (5,275,373) $ (10,759,568) Net income................................ 3,168 60,191 63,359 Management Incentive Distribution......... (201,812) - (201,812) ------------- -------------- ------------- Balance at March 31, 1995................. $ (5,682,839) $ (5,215,182) $ (10,898,021) ============= ============== ============= Balance at December 31, 1995.............. $ (6,339,886) $ (4,983,492) $ (11,323,378) Net income................................ 7,221 137,202 144,423 Management Incentive Distribution......... (205,592) - (205,592) ------------- -------------- ------------- Balance at March 31, 1996................. $ (6,538,257) $ (4,846,290) $ (11,384,547) ============= =============== =============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. MCNEIL REAL ESTATE FUND XI, LTD. STATEMENTS OF CASH FLOWS (Unaudited) Increase (Decrease) in Cash and Cash Equivalents
Three Months Ended March 31, ------------------------------------------- 1996 1995 ------------------- ----------------- Cash flows from operating activities: Cash received from tenants........................ $ 3,664,498 $ 3,522,186 Cash paid to suppliers............................ (1,542,028) (1,084,546) Cash paid to affiliates........................... (231,469) (362,317) Interest received................................. 26,962 31,101 Interest paid..................................... (918,084) (840,434) Property taxes paid............................... (303,119) (336,630) ----------------- -------------- Net cash provided by operating activities............ 696,760 929,360 ----------------- -------------- Net cash used in investing activities: Additions to real estate investments.............. (305,452) (336,795) ----------------- -------------- Net cash used in financing activities: Principal payments on mortgage notes payable......................................... (119,785) (120,005) ----------------- -------------- Net increase in cash and cash equivalents............ 271,523 472,560 Cash and cash equivalents at beginning of period............................................ 2,030,544 1,932,351 ----------------- -------------- Cash and cash equivalents at end of period........... $ 2,302,067 $ 2,404,911 ================= ==============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. MCNEIL REAL ESTATE FUND XI, LTD. STATEMENTS OF CASH FLOWS (Unaudited) Reconciliation of Net Income to Net Cash Provided by Operating Activities
Three Months Ended March 31, ---------------------------------------- 1996 1995 ---------------- --------------- Net income........................................... $ 144,423 $ 63,359 --------------- -------------- Adjustments to reconcile net income to net cash provided by operating activities: Depreciation...................................... 655,713 598,257 Amortization of discounts on mortgage notes payable................................... 5,717 5,417 Amortization of deferred borrowing costs.......... 38,231 36,375 Changes in assets and liabilities: Cash segregated for security deposits........... 23,508 16,270 Accounts receivable............................. (153,831) (986) Prepaid expenses and other assets............... 125,248 175,855 Escrow deposits................................. (228,271) (126,427) Accounts payable................................ 39,815 42,838 Accrued interest................................ (866) 64,528 Accrued property taxes.......................... 109,728 114,353 Accrued expenses................................ (131,603) (2,640) Payable to affiliates - General Partner......... 48,031 (69,508) Security deposits and deferred rental revenue....................................... 20,917 11,669 --------------- -------------- Total adjustments............................. 552,337 866,001 --------------- -------------- Net cash provided by operating activities............ $ 696,760 $ 929,360 =============== ==============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. McNEIL REAL ESTATE FUND XI, LTD. Notes to Financial Statements (Unaudited) March 31, 1996 NOTE 1. - ------- McNeil Real Estate Fund XI, Ltd. (the "Partnership") was organized June 2, 1980 as a limited partnership under the provisions of the California Uniform Limited Partnership Act. The general partner of the Partnership is McNeil Partners, L.P. (the "General Partner"), a Delaware limited partnership, an affiliate of Robert A. McNeil. The Partnership is governed by an amended and restated limited partnership agreement, dated August 6, 1991 (the "Amended Partnership Agreement"). The principal place of business for the Partnership and for the General Partner is 13760 Noel Road, Suite 700, LB70, Dallas, Texas 75240. In the opinion of management, the financial statements reflect all adjustments necessary for a fair presentation of the financial position and results of operations of the Partnership. All adjustments were of a normal recurring nature. However, the results of operations for the three months ended March 31, 1996 are not necessarily indicative of the results to be expected for the year ending December 31, 1996. NOTE 2. The financial statements should be read in conjunction with the financial statements contained in the Partnership's Annual Report on Form 10-K for the year ended December 31, 1995, and the notes thereto, as filed with the Securities and Exchange Commission, which is available upon request by writing to McNeil Real Estate Fund XI, Ltd. c/o McNeil Real Estate Management, Inc., Investor Services, 13760 Noel Road, Suite 700, LB70, Dallas, Texas 75240. NOTE 3. Certain reclassifications have been made to prior period amounts to conform with the current year presentation. NOTE 4. The Partnership pays property management fees equal to 5% of gross rental receipts of the Partnership's properties to McNeil Real Estate Management, Inc. ("McREMI"), an affiliate of the General Partner, for providing property management and leasing services. The Partnership reimburses McREMI for its costs, including overhead, of administering the Partnership's affairs. Under terms of the Amended Partnership Agreement, the Partnership is paying a Management Incentive Distribution ("MID") to the General Partner. The maximum MID is calculated as 1% of the tangible asset value of the Partnership. The maximum MID percentage decreases subsequent to 1999. Tangible asset value is determined by using the greater of (i) an amount calculated by applying a capitalization rate of 9% to the annualized net operating income of each property or (ii) a value of $10,000 per apartment unit for residential property and $50 per gross square foot for commercial property to arrive at the property tangible asset value. The property tangible asset value is then added to the book value of all other assets excluding intangible items. MID will be paid to the extent of the lesser of the Partnership's excess cash flow, as defined, or net operating income, as defined ("the Entitlement Amount"), and may be paid (i) in cash, unless there is insufficient cash to pay the distribution in which event any unpaid portion not taken in Units will be deferred and is payable, without interest, from the first available cash and/or (ii) in Units. A maximum of 50% of the MID may be paid in Units. The number of Units issued in payment of the MID is based on the greater of $50 per Unit or the net tangible asset value, as defined, per Unit. Any amount of the MID that is paid to the General Partner in Units will be treated as if cash is distributed to the General Partner and is then contributed to the Partnership by the General Partner. The MID represents a return of equity to the General Partner for increasing cash flow, as defined, and accordingly is treated as a distribution. Compensation, reimbursements and distributions paid to or accrued for the benefit of the General Partner and its affiliates are as follows:
Three Months Ended March 31, ---------------------------------------- 1996 1995 ---------------- --------------- Property management fees - affiliates................ $ 182,174 $ 176,227 Charged to general and administrative - affiliates: Partnership administration........................ 97,326 116,582 --------------- -------------- $ 279,500 $ 292,809 =============== ============== Charged to General Partner's deficit: MID............................................... $ 205,592 $ 201,812 =============== ==============
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND - ------- --------------------------------------------------------------- RESULTS OF OPERATIONS --------------------- FINANCIAL CONDITION - ------------------- The Partnership was formed to acquire, operate and ultimately dispose of a portfolio of income-producing real properties. At March 31, 1996, the Partnership owned eight apartment properties, which are all subject to mortgage notes. RESULTS OF OPERATIONS - --------------------- Revenue: Total Partnership revenues increased by $174,632 or 5% for the three months ended March 31, 1996. Rental revenue increased $178,862 or 5%. Rental revenue for the first three months of 1996 was $3,668,760, as compared to $3,489,989 for the same period in 1995. The increase in rental revenue for the three months ended March 31, 1996 is due to an increase in the rental rates at seven of the Partnership's properties. Expenses: Total Partnership expenses increased by $93,568 or 3% for the period ending March 31, 1996 as compared to the period ending March 31, 1995. Depreciation expense for the three months ended March 31, 1996 increased by $57,546 or 10%. The increase is due to capital improvements made at the properties. During 1996, the Partnership has made $305,452 in capital improvements. Property taxes decreased $15,909 or 7% for the three months ended March 31, 1996. This is due to an decrease in the estimated tax liability at Knollwood, The Park, and The Village. Utilities increased $36,398 or 16% for the three months ended March 31, 1996 due to an increase in water rates charged by local utility providers at Rock Creek and Villa Del Rio. Repairs and maintenance increased by $33,209 or 8% for the three months ended March 31, 1996. This increase can be attributed to the replacement of carpeting, which met the Partnership's criteria for capitalization based on the magnitude of replacements in 1995, but were expensed in 1996. General and administrative increased $15,923 for the three months ended March 31, 1996 as compared to the same period in 1995. The increase was due to costs incurred by the Partnership to defend class action litigation. General and administrative - affiliates for the three months ended March 31, 1996 decreased by $19,256 or 17% due to the reduction of overhead expenses allocable to the Partnership. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- The Partnership generated $696,760 through operating activities for the period ending March 31, 1996 as compared to $929,360 for the same period in 1995. This decrease of $232,600 can be attributed to the increase in the cash paid to suppliers and interest paid. The Partnership funded $305,452 in additions to real estate investments for the three months ending March 31, 1996. All of the Partnership's properties continued capital improvements projects to enhance the value of the properties so they can remain competitive in the market. There was a net use of cash from financing activities of $119,785 for the three months ended March 31, 1996. Short-term liquidity: At March 31, 1996, the Partnership held cash and cash equivalents of $2,302,067. The General Partner considers this level of cash reserves to be adequate to meet the Partnership's operating needs. The General Partner anticipates resuming MID payments if the Partnership's properties continue to perform as projected. The General Partner believes that anticipated operating results for 1996 will be sufficient to fund the Partnership's budgeted $1.3 million in capital improvements for 1996 and to repay the current portion of the Partnership's mortgage notes. During 1996, the Partnership is faced with a mortgage maturity on The Village totaling approximately $2,564,000. It is management's policy to negotiate extensions or arrange refinancings for the mortgage notes due. The General Partner has established a revolving credit facility not to exceed $5,000,000 in the aggregate which is available on a "first-come, first-served" basis to the Partnership and other affiliated partnerships if certain conditions are met. Borrowings under the facility may be used to fund deferred maintenance, refinancing obligations and working capital needs. The Partnership has repaid all the advances received from this facility, and there is no assurance that the Partnership will receive additional funds under the facility because no amounts will be reserved for any particular partnership. As of March 31, 1996, $2,662,819 remained available for borrowing under the facility; however, additional funds could become available as other partnerships repay borrowings. This commitment will terminate on August 6, 1996. Long-term liquidity: For the long term, property operations will remain the primary source of funds. While the present outlook for the Partnership's liquidity is favorable, market conditions may change and property operations can deteriorate. In that event, the Partnership would require other sources of working capital. No such other sources have been identified, and the Partnership has no established lines of credit. Other possible actions to resolve working capital deficiencies include refinancing or renegotiating terms of existing loans, deferring major capital expenditures on Partnership properties except where improvements are expected to enhance the competitiveness or marketability of the properties, or arranging working capital support from affiliates. All or a combination of these steps may be inadequate or unfeasible in resolving such potential working capital deficiencies. Affiliate support has been required in the past, but there is no assurance that support would be provided in the future, since neither the General Partner nor any affiliates have any obligation in this regard in excess of the $5,000,000 revolving credit facility discussed above. Income allocation and distributions: Terms of the Amended Partnership Agreement specify that income before depreciation is allocated to the General Partner to the extent of MID paid in cash. Depreciation is allocated in the ratio of 95:5 to the limited partners and the General Partner, respectively. Therefore, for the three months ended March 31, 1996 and 1995, $7,221 and $3,168, respectively, were allocated to the General Partner. The limited partners received allocations of net income of $137,202, and $60,191 for the three months ended March 31, 1996 and 1995, respectively. With the exception of the MID, distributions to partners have been suspended since 1986 as part of the General Partner's policy of maintaining adequate cash reserves. Distributions to the limited partners will remain suspended for the foreseeable future. The General Partner will continue to monitor the cash reserves and working capital needs of the Partnership to determine when cash flows will support distributions to the limited partners. A distribution of $205,592 for the MID has been accrued by the Partnership for the three month period ending March 31, 1996 for the General Partner. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ------- -------------------------------- (a) Exhibits. Exhibit Number Description ------- ----------- 4. Amended and Restated Limited Partnership Agreement dated as of August 6, 1991. (Incorporated by reference to the Quarterly Report on Form 10-Q, for the quarter ended June 30, 1991). 11. Statement regarding computation of net loss per limited partnership unit: Net loss per limited partnership unit is computed by dividing net loss allocated to the limited partners by the number of limited partnership units outstanding. Per unit information has been computed based on 159,813 limited partnership units outstanding in 1996 and 1995, respectively. 27. Financial Data Schedule for the quarter ended March 31, 1996. (b) Reports on Form 8-K. There were no reports on Form 8-K filed during the quarter ended March 31, 1996. McNEIL REAL ESTATE FUND XI, LTD. 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: McNEIL REAL ESTATE FUND XI, Ltd. By: McNeil Partners, L.P., General Partner By: McNeil Investors, Inc., General Partner May 14, 1996 By: /s/ Donald K. Reed - ------------------- ---------------------------------------- Date Donald K. Reed President and Chief Executive Officer May 14, 1996 By: /s/ Ron K. Taylor - ------------------- ---------------------------------------- Date Ron K. Taylor Acting Chief Financial Officer of McNeil Investors, Inc. May 14, 1996 By: /s/ Brandon K. Flaming - ------------------- ---------------------------------------- Date Brandon K. Flaming Chief Accounting Officer of McNeil Real Estate Management, Inc. EX-27 2
5 3-MOS DEC-31-1996 MAR-31-1996 2,302,067 0 185,158 0 0 0 64,652,467 (37,750,897) 32,625,141 0 39,570,372 0 0 0 0 32,625,141 3,668,760 3,695,722 0 0 2,590,133 0 961,166 0 0 144,423 0 0 0 144,423 0 0
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