-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, L0Q2Ylr7HqRrjhxilg/zmk/4aO6xbZn57hVeAZpRr50s3NMNpzakKjZOltUyCsnl gtim93lu0+vBcqaNTm/MQA== 0000351708-94-000007.txt : 19940816 0000351708-94-000007.hdr.sgml : 19940816 ACCESSION NUMBER: 0000351708-94-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940630 FILED AS OF DATE: 19940810 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MCNEIL REAL ESTATE FUND XII LTD CENTRAL INDEX KEY: 0000351708 STANDARD INDUSTRIAL CLASSIFICATION: 6512 IRS NUMBER: 942717957 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-10743 FILM NUMBER: 94542771 BUSINESS ADDRESS: STREET 1: 13760 NOEL ROAD, STE 700 STREET 2: LB70, CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 2144485800 MAIL ADDRESS: STREET 1: 13760 NOEL ROAD SUITE 700 STREET 2: LB70 CITY: DALLAS STATE: TX ZIP: 75240 10-Q 1 10-Q [.TX]1-16 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 June 30, 1994 ------------------------------------------- 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 0-10743 MCNEIL REAL ESTATE FUND XII, LTD. - - ---------------------------------------------------------------------- (Exact name of registrant as specified in its charter) California 94-2717957 - - ---------------------------------------------------------------------- (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 XII, LTD. PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS - - ------- -------------------- BALANCE SHEETS (Unaudited)
June 30, December 31, 1994 1993 -------- ----------- ASSETS - - ------ Real estate investments: Land $ 6,390,069 $ 7,108,968 Building and improvements 82,003,612 89,085,041 ---------- ---------- 88,393,681 96,194,009 Less: Accumulated depreciation and amortization (41,593,239)(43,889,170) ----------- ---------- 46,800,442 52,304,839 Assets held for sale 15,221,407 11,421,936 Cash and cash equivalents ($219,761 and $347,986 segregated for security deposits at June 30, 1994 and December 31, 1993, respectively) 1,133,695 5,286,015 Accounts receivable, less allowance for doubtful accounts of $36,410 at June 30, 1994 and December 31, 1993, respectively 352,890 381,737 Prepaid expenses and other assets 283,698 289,275 Escrow deposits 1,846,230 1,504,609 Deferred borrowing costs, net of accumulated amortization of $774,265 and $715,830 at June 30, 1994 and December 31, 1993, respectively 1,616,011 1,641,689 ---------- ---------- $67,254,373 $72,830,100 ========== ========== LIABILITIES AND PARTNERS' DEFICIT - - --------------------------------- Mortgage notes payable, net $79,140,189 $79,867,507 Mortgage notes payable - affiliate - 1,603,135 Accounts payable 618,931 647,869 Accrued expenses 60,183 128,240 Accrued interest 1,796,493 1,599,238 Accrued property taxes 1,350,206 1,224,990 Advances from Southmark 31,580 30,655 Advances from affiliates - General Partner 1,739,398 3,346,441 Payable to affiliates - General Partner 5,415,898 5,292,511 Security deposits and deferred rental income 674,801 684,379 ---------- ---------- 90,827,679 94,424,965 ---------- ---------- Partners' deficit: Limited partners - 240,000 limited partnership units authorized; 230,584 and 230,817 limited partnership units issued and outstanding at June 30, 1994 and December 31, 1993, respectively (14,450,147)(13,138,511) General Partner (9,123,159) (8,456,354) ---------- ---------- (23,573,306)(21,594,865) ---------- ---------- $67,254,373 $72,830,100 ========== ==========
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 XII, LTD. STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, ------------------------ ------------------------- 1994 1993 1994 1993 ----------- ----------- ----------- ------------ Revenue: Rental revenue $ 5,382,671 $ 5,958,299 $10,814,456 $11,854,058 Interest 16,028 7,310 29,200 21,599 ---------- ---------- ---------- ---------- Total revenue 5,398,699 5,965,609 10,843,656 11,875,657 ---------- ---------- ---------- ---------- Expenses: Interest 1,882,700 2,370,725 3,750,580 4,732,985 Interest - affiliates 33,106 78,190 64,111 166,039 Depreciation and amortization 1,145,877 1,179,335 2,291,754 2,348,987 Property taxes 448,749 543,524 897,498 1,088,424 Personnel expenses 620,321 770,815 1,338,805 1,427,409 Utilities 426,207 469,445 1,025,909 1,085,965 Repairs and maintenance 636,418 1,019,158 1,332,781 1,694,333 Property management fees - affiliates 271,500 295,966 539,473 592,787 Other property operating expenses 337,986 400,496 659,078 690,444 General and administrative 29,726 120,891 72,254 212,591 General and administrative - affiliates 122,614 204,936 252,082 456,637 ---------- ---------- ---------- ---------- Total expenses 5,955,204 7,453,481 12,224,325 14,496,601 ---------- ---------- ---------- ---------- Net loss $ (556,505) $(1,487,872) $(1,380,669) $(2,620,944) ========== ========== ========== ========== Net loss allocable to limited partners $ (528,680) $(1,413,478) $(1,311,636) $(2,489,897) Net income allocable to General Partner (27,825) (74,394) (69,033) (131,047) ---------- ---------- ---------- ---------- Net loss $ (556,505) $(1,487,872) $(1,380,669) $(2,620,944) ========== ========== ========== ========== Net loss per limited partnership unit $ (2.29) $ (6.12) $ (5.69) $ (10.78) ========== ========= ========= =========
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 XII, LTD. STATEMENTS OF PARTNERS' DEFICIT (Unaudited) For the Six Months Ended June 30, 1994 and 1993
Total General Limited Partners' Partner Partners Deficit ----------- ------------ ------------ Balance at December 31, 1992 $(7,473,458) $(17,108,329) $(24,581,787) Net loss (131,047) (2,489,897) (2,620,944) Contingent Management Incentive Distribution (8,426) - (8,426) ---------- ----------- ----------- Balance at June 30, 1993 $(7,612,931) $(19,598,226) $(27,211,157) ========== =========== =========== Balance at December 31, 1993 $(8,456,354) $(13,138,511) $(21,594,865) Net loss (69,033) (1,311,636) (1,380,669) Contingent Management Incentive Distribution (597,772) - (597,772) ---------- ----------- ----------- Balance at June 30, 1994 $(9,123,159) $(14,450,147) $(23,573,306) ========== =========== ===========
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 XII, LTD. STATEMENTS OF CASH FLOWS (Unaudited) Increase (Decrease) in Cash and Cash Equivalents
Six Months Ended June 30, ---------------------------- 1994 1993 ----------- ----------- Cash flows from operating activities: Cash received from tenants $10,778,643 $11,897,162 Cash paid to suppliers (4,374,237) (4,706,407) Cash paid to affiliates (1,265,940) (586,394) Interest received 29,200 21,599 Interest paid (3,395,878) (4,306,824) Interest paid to affiliates (470,489) (35,994) Property taxes paid (1,204,829) (1,438,876) ---------- ---------- Net cash provided by operating activities 96,470 844,266 ---------- ---------- Cash flows used in investing activities: Additions to real estate investments (586,829) (995,603) ---------- ---------- Cash flows from financing activities: Principal payments on mortgage notes payable (825,405) (637,811) Additions to deferred borrowing costs (32,757) (307,858) Mortgage loans from affiliates - 1,220,535 Repayment of mortgage loans from affiliates (1,603,135) - Advances from affiliates - General Partner - 78,734 Repayment of advances from affiliates - General Partner (1,200,664) - ---------- ---------- Net cash provided by (used in) financing activities (3,661,961) 353,600 ---------- ---------- Net increase (decrease) in cash and cash equivalents (4,152,320) 202,263 Cash and cash equivalents at beginning of period 5,286,015 665,160 ---------- ---------- Cash and cash equivalents at end of period $ 1,133,695 $ 867,423 ========== ==========
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 XII, LTD. STATEMENTS OF CASH FLOWS (Unaudited) Reconciliation of Net Loss to Net Cash Provided by Operating Activities
Six Months Ended June 30, ------------------------- 1994 1993 ----------- ----------- Net loss $(1,380,669) $(2,620,944) ---------- ---------- Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 2,291,754 2,348,987 Amortization of deferred borrowing costs 58,435 133,486 Amortization of discounts on mortgage notes payable 98,087 149,499 Net interest added on advances from affiliates - General Partner 57,011 130,045 Net interest added on advances from Southmark 925 868 Changes in assets and liabilities: Accounts receivable 28,848 (1,350) Prepaid expenses and other assets 5,577 50,065 Escrow deposits (341,622) (325,808) Accounts payable (28,938) 142,642 Accrued expenses (68,057) (92,658) Accrued interest (266,134) 142,308 Accrued property taxes 125,216 219,543 Payable to affiliates - General Partner (474,385) 463,029 Security deposits and deferred rental income (9,578) 104,554 ---------- ---------- Total adjustments 1,477,139 3,465,210 ---------- ---------- Net cash provided by operating activities $ 96,470 $ 844,266 ========== ==========
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 XII, LTD. Notes to Financial Statements (Unaudited) June 30, 1994 NOTE 1. - - ------ McNeil Real Estate Fund XII, Ltd. (the "Partnership") was organized February 2, 1981 as a limited partnership organized 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 ("McNeil"). The Partnership is governed by an amended and restated limited partnership agreement, dated September 6, 1991 (the "Amended Partnership Agreement"). The principal place of business for the Partnership and 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 Partnership's financial position and results of operations. All adjustments were of a normal recurring nature. However, the results of operations for the six months ended June 30, 1994 are not necessarily indicative of the results to be expected for the year ending December 31, 1994. 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, 1993, and the notes thereto, as filed with the Securities and Exchange Commission, which is available upon request by writing to McNeil Real Estate Fund XII, Ltd. c/o McNeil Real Estate Management, Inc., Investor Services, 13760 Noel Road, Suite 700, LB70, Dallas, Texas 75240. NOTE 3. - - ------ The accompanying financial statements have been prepared assuming that the Partnership will continue as a going concern. The Partnership has suffered recurring losses from operations and has a net Partners' deficit that raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. NOTE 4. - - ------ Certain reclassifications have been made to prior period amounts to conform with current period presentation. NOTE 5. - - ------ The Partnership pays property management fees equal to 5% of the 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 services for the Partnership's residential and commercial properties and leasing services for its residential properties. McREMI may choose to provide leasing services for the Partnership's commercial properties, in which case McREMI will receive a property management fee from such commercial properties equal to 3% of the property's gross rental receipts plus commissions based on the prevailing market rate for such services where the property is located. The Partnership reimburses McREMI for its costs, including overhead, of administering the Partnership's affairs. Affiliates of the General Partner have advanced funds to the Partnership to meet working capital requirements. These advances and mortgage loans accrue interest at a rate equal to the prime lending rate plus 1%. 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. 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. Prior to July 1, 1993, the MID consists of two components: (i) the fixed portion which is payable without respect to the net income of the Partnership and is equal to 25% of the maximum MID (the "Fixed MID") and (ii) a contingent portion which is payable only to the extent of the lesser of the Partnership's excess cash flow, as defined, or net operating income (the "Entitlement Amount") and is equal to up to 75% of the maximum MID (the "Contingent MID"). The maximum MID percentage decreases subsequent to 1999. The General Partner amended the Amended Partnership Agreement as a settlement to a class action complaint. This amendment eliminates the Fixed MID portion and makes the entire MID payable to the extent of the Entitlement Amount. In all other respects the calculation and payment of the MID will remain the same. This modified MID became effective July 1, 1993. Fixed MID was payable in limited partnership units ("Units") unless the Entitlement Amount exceeded the amount necessary to pay the Contingent MID in which case, at the General Partner's option, the Fixed MID could have been paid in cash to the extent of such excess. Contingent MID will be paid to the extent of 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 Fixed MID is treated as a fee payable to the General Partner by the Partnership for services rendered. The Contingent MID is treated as a distribution to the General Partner in compliance with terms of the Amended Partnership Agreement. Compensation and reimbursements paid to or accrued for the benefit of the General Partner and its affiliates are as follows:
Six Months Ended June 30, -------------------------- 1994 1993 --------- ----------- Charged to other assets: Prepaid expenses $ - $ 2,105 Property management fees - affiliates 539,473 592,787 Interest - affiliates 64,111 166,039 Charged to general and administrative - affiliates: Partnership administration 252,082 303,614 Fixed MID - 153,023 -------- --------- $ 855,666 $1,217,568 ======== ========= Charged to General Partner's deficit: Contingent MID $ 597,772 $ 8,426 ======== =========
NOTE 6. - - ------ The mortgages encumbering two of the Partnership's properties, Channingway and Village East, contain provisions which may give the lenders the right to accelerate the mortgage debt as a result of the approved restructuring. The General Partner has requested that the lenders waive their right to accelerate the mortgage debt. The lenders may require the payment of fees or additional interest as a condition to granting such waiver. In the event the waiver is not obtained as to any mortgage, and the mortgage debt is accelerated, the Partnership will be required to satisfy the outstanding mortgage debt, which approximated $15.9 million at June 30, 1994. In such event, the Partnership will attempt to arrange alternative sources of mortgage financing. However, any such refinancing may be at an interest rate which is higher or is otherwise on terms which are less favorable than those provided by the current mortgage. Furthermore, if alternative financing cannot be obtained, each lender could foreclose on the property securing its mortgage amount. NOTE 7. - - ------ On June 1, 1994, the Partnership stopped making the debt service payments on Fox Run's mortgage notes due to recurring operating deficits at the property. This constitutes an event of default under terms of Fox Run's mortgage notes and the lenders could foreclose on Fox Run. 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 properties. At June 30, 1994, the Partnership owned nine apartment properties and two shopping centers. All of the Partnership's properties are subject to mortgage notes. There has been no significant change in financial condition of the Partnership since December 31, 1993. The Partnership reported a net loss of $1,380,669 for the first six months of 1994 as compared to a net loss of $2,620,944 for the same period in 1993. Revenues declined in 1994 to $10,843,656 as compared to $11,875,657 in 1993, at the same time expenses decreased to $12,224,325 from $14,496,601. Net cash provided by operating activities was $96,470 for the period. After expenditures of $586,829 for capital improvements, $825,405 in principal payments on mortgage notes, and $32,757 in deferred borrowing costs plus payment of mortgage loans and advances from affiliates of $2,803,799, the net decrease in cash of $4,152,320 was deducted from cash and cash equivalents, giving a balance of $1,113,695 at June 30, 1994 as compared to $867,423 at June 30, 1993. The balances of cash and cash equivalents held at June 30, 1994 include $219,761 for tenant security deposits held in interest bearing accounts, whereas at December 31, 1993, $347,986 was segregated. There has been no significant change in the operations of the Partnership's properties since December 31, 1993. See "Revenue" and "Expenses" below for additional information regarding changes between years. RESULTS OF OPERATIONS - - --------------------- Revenue: Rental revenue for the six months of 1994 was $10,814,456 as compared to $11,854,058 for the same period in 1993. This decrease of $1,039,602 or 8.8% is primarily due to the loss of $1,743,180 in rental revenue generated from Cedar Mill Crossing, which was sold in December 1993. This decrease was offset by rental increases at ten of the remaining eleven properties. Expenses: Partnership expenses decreased by $2,272,276 for the first six months of 1994 as compared to the same period last year primarily due to the sale of Cedar Mill Crossing. The effects from this transaction were declines of $654,900 for interest, $214,452 for depreciation, $164,820 for property taxes, $155,636 for personnel expenses, $156,177 for utilities, $204,860 for repair and maintenance, $86,956 for property management fees - affiliates, and $98,501 other property operating expenses. In addition to the sale of Cedar Mill Crossing, other factors affected the level of expenses reported by the remaining properties. Interest expense decreased $327,505 or 8% due to the refinancing of the mortgage note payable at Brendon Way, and the reduction of the mortgage principal balance through the sale of a parcel of land at Plaza Westlake in 1993. Interest expense - affiliates decreased by $101,928 or 61.4% for the first six months of 1994 as compared to the same period in 1993 due to the repayment of $2,803,799 of affiliate loans and advances. Depreciation expense increased by $157,219 or 7.4% for the six months ended June 30, 1994 as compared to the same period in 1993 due to the increase in capital improvements made at the properties. Personnel expenses increased by $67,032 or 5.3% for the first six months of 1994 as compared to the same period in 1993 due to additional part-time staff, an increase in maintenance employee hours, and an increase in incentive bonus' paid. Personnel expenses, excluding the sale of Cedar Mill Crossing, decreased by $42,936 for the three month period ending June 1994 as compared to the same period in 1993 due to replacement of on-site staff at lower salaries. Utilities increased by $96,121 or 10.3% for the first six months of 1994 as compared to the same period in 1993 due to an increase in the cost and usage of gas and oil during the winter months. Repairs and maintenance decreased by $156,692 or 10.5% for the first six months of 1994 as compared to the same period in 1993 because the increased expenditures for capital improvements the Partnership incurred have reduced certain repairs and maintenance expenditures. Other property operating expenses increased by $67,135 or 11.3% for the first six months of 1994 as compared to the same period in 1993 primarily due to increases in professional services, bad debt and hazard insurance. General and administrative decreased by $140,336 or 66% for the first six months of 1994 as compared to the same period in 1993 primarily due to a reduction in tax preparation and legal costs incurred by the partnership in 1994. General and administrative - affiliates decreased $204,555 or 44.8% for the first six months of 1994 as compared to 1993, primarily due to an amendment to the Amended Partnership Agreement which eliminated the Fixed MID effective July 1993 and also due to a reduction in the Partnership's portion of reimbursable costs. LIQUIDITY AND CAPITAL RESOURCES - - ------------------------------- At June 30, 1994, the Partnership held cash and cash equivalents of $1,133,695 (of which $219,761 was segregated for tenant security deposits), down $4,152,320 from the balance at December 31, 1993. In January, the Partnership paid $2,400,000 to the General Partner for repayment of advances, accrued interest and fees. Also, the Partnership repaid all mortgage loans to McNeil Real Estate Fund XXVII, L.P. ("Fund XXVII") totaling $1,603,135. The Partnership's working capital needs have been supported by advances from affiliates during the past several years. Some of that support was provided on a short-term basis to meet monthly operating requirements, with repayment occurring as funds became available; other advances were longer term in nature due to lack of funds for repayment. The General Partner has also allowed the Partnership to defer payment of Contingent MID and reimbursements until such time as the Partnership's cash reserves allow payments. Finally, the Partnership operations have also been supported by affiliate funding in the form of mortgage notes payable. As previously discussed, $2,809,799 of these advances and loans were repaid in January 1994. The Partnership also repaid $1,193,336 in accrued interest and Fixed MID in January 1994. Operations of the Partnership's properties in 1994, however, are not expected to provide significant levels of cash necessary to complete routine repairs, maintenance, and capital improvements and replacements to preserve and enhance the value of the properties. The Partnership holds $390,207 in escrow accounts for property improvements at specific properties. Because of the low level of cash reserves after the January 1994 payments made to affiliates, capital expenditures other than those which can be recovered from the escrow accounts will be closely reviewed before any funds are committed. No expenditures are expected to exceed the revenues that the properties earn from operations. During 1994, the Partnership is faced with mortgage principal payments and mortgage maturities on Fox Run, Millwood Park and Village East, totalling approximately $7,938,000. It is management's policy to negotiate extensions of such maturities when possible. Management has negotiated a one year extension on Millwood Park and is currently negotiating refinancing for Village East. Management has also ceased making debt service payments on Fox Run. Additionally, the Partnership is faced with approximately $27,275,000 of mortgage principal payments and mortgage maturities in 1995. In the event the Partnership is unable to arrange refinancing or other arrangements for payment or extensions of the remaining loans, the properties securing the mortgages may be lost through foreclosure. McNeil has established a revolving credit facility not to exceed $5,000,000 in the aggregate which will be 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. 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 June 30, 1994, $1,664,971 remained available for borrowing under the facility, however, additional funds could become available as other partnerships repay borrowings. The General Partner is not obligated to advance funds to the Partner- ship and there is no assurance that the Partnership will receive additional funds. Should market conditions change and operations deteriorate, present cash resources may be insufficient to meet current needs. Other than available portions of the $5,000,000 revolving credit facility and any additional financing from Fund XXVII, which may not be available when required by the Partnership, the Partnership has no existing lines of credit from outside sources. Other sources of working capital may be required and no such other sources have been identified. Possible actions to resolve operating deficiencies include sales of properties, refinancing or renegotiating terms of existing loans, deferring major capital expenditures, except where improvements are expected to enhance the competitiveness or marketability of the properties, or arranging additional support from affiliates. Additional affiliate support is not assured, since neither the General Partner nor any affiliates have obligations to make advances in excess of any unused portion of the revolving credit facility. Sales of properties are possibilities, and Fox Run, Village East, Lamar Plaza and Plaza Westlake are currently held for sale. There is no assurance that a sale can be completed, nor that a closing could be timed to coincide with the Partnership's cash needs. The mortgages encumbering two of the Partnership's properties, Channingway and Village East, contain provisions which may give the lenders the right to accelerate the mortgage debt as a result of the approved restructuring. The General Partner has requested that the lenders waive their right to accelerate the mortgage debt. The lenders may require the payment of fees or additional interest as a condition to granting such waiver. In the event the waiver is not obtained as to any mortgage, and the mortgage debt is accelerated, the Partnership will be required to satisfy the outstanding mortgage debt, which approximated $15.9 million at June 30, 1994. In such event, the Partnership will attempt to arrange alternative sources of mortgage financing. However, any such refinancing may be at an interest rate which is higher or is otherwise on terms which are less favorable than those provided by the current mortgage. Furthermore, if alternative financing cannot be obtained, each lender could foreclose on the property securing its mortgage amount. Distributions to limited partners, last paid in 1984, will remain suspended until Partnership cash reserves are rebuilt to an adequate level, and will resume only if clearly supported by property operations. A distribution of $597,772 for the Contingent MID has been accrued by the Partnership at June 30, 1994 for the General Partner. PART II. OTHER INFORMATION ITEM 3. DEFAULTS UPON SENIOR SECURITIES - - ------ ------------------------------- The Partnership is in default on certain terms of Fox Run's mortgage notes. Fox Run's mortgage notes requires monthly debt service payments of $35,328. In addition, the Partnership is required to pay certain escrow amounts on a monthly basis for property taxes. These additional payments total $8,293 for Fox Run. Due to recurring operating deficits at Fox Run Apartments, the real estate securing these mortgage notes, the Partnership stopped making debt service payments with the payment due June 1, 1994. As of August 12, 1994 the amount of the arrearage on Fox Run's mortgage notes is $130,863. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - - ------ -------------------------------- (a) Exhibits.
Exhibit Number Description 3.3 Amended and Restated Partnership Agreement, dated September 6, 1991 (Incorporated by reference to the Quarterly Report on Form 10-Q for the quarter ended September 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 230,584 and 230,817 limited partnership units outstanding in 1994 and 1993.
(b) Reports on Form 8-K. There were no reports on Form 8-K filed during the quarter ended June 30, 1994. McNEIL REAL ESTATE FUND XII, 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 XII, Ltd. By: McNeil Partners, L.P., General Partner By: McNeil Investors, Inc., General Partner August 10, 1994 By: /s/ Donald K. Reed - - ------------------------ ------------------------------------- Date Donald K. Reed President and Chief Executive Officer August 10, 1994 By: /s/ Robert C. Irvine - - ------------------------ ------------------------------------- Date Robert C. Irvine Chief Financial Officer of McNeil Investors, Inc. Principal Financial Officer August 10, 1994 By: /s/ Brandon K. Flaming - - ------------------------ ------------------------------------ Date Brandon K. Flaming Chief Accounting Officer of McNeil Real Estate Management, Inc. -----END PRIVACY-ENHANCED MESSAGE-----