-----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, saYw5YRP0Z6o8bCAilzyyL2fHp3JnwYwylzZiDtYaLyQ+2+oVsI8ziMo5TXKRH8B EUOiH8NIr00WJZRyIVNi2A== 0000351708-94-000013.txt : 19941117 0000351708-94-000013.hdr.sgml : 19941117 ACCESSION NUMBER: 0000351708-94-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941110 SROS: NONE 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: 94558725 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]1-15 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 September 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)
September 30, December 31, 1994 1993 ------------- ------------ Real estate investments: Land $ 7,845,653 $ 7,108,968 Building and improvements 88,945,189 89,085,041 ----------- ----------- 96,790,842 96,194,009 Less: Accumulated depreciation and amortization (45,689,814) (43,889,170) ----------- ----------- 51,101,028 52,304,839 Assets held for sale 10,690,079 11,421,936 Cash and cash equivalents 669,054 4,938,029 Cash segregated for security deposits 216,961 347,986 Accounts receivable, less allowance for doubtful accounts of $36,410 at September 30, 1994 and December 31, 1993, respectively 334,111 381,737 Prepaid expenses and other assets 286,445 289,275 Escrow deposits 1,648,898 1,504,609 Deferred borrowing costs, net of accumulated amortization of $803,609 and $715,830 at September 30, 1994 and December 31, 1993, respectively 1,590,902 1,641,689 ---------- ---------- $66,537,478 $72,830,100 ========== ========== LIABILITIES AND PARTNERS' DEFICIT - - --------------------------------- Mortgage notes payable, net $78,860,501 $79,867,507 Mortgage notes payable - affiliate - 1,603,135 Accounts payable 492,437 647,869 Accrued expenses 240,627 128,240 Accrued interest 1,865,019 1,599,238 Accrued property taxes 1,556,657 1,224,990 Advances from Southmark 32,115 30,655 Advances from affiliates - General Partner 1,775,420 3,346,441 Payable to affiliates - General Partner 5,805,036 5,292,511 Security deposits and deferred rental income 666,405 684,379 ---------- ---------- 91,294,217 94,424,965 ---------- ---------- Partners' deficit: Limited partners - 240,000 limited partnership units authorized; 230,584 and 230,817 limited partner- ship units issued and outstanding at September 30, 1994 and December 31, 1993, respectively (15,316,706) (13,138,511) General Partner ( 9,440,033) (8,456,354) ---------- ---------- (24,756,739) (21,594,865) ---------- ---------- $66,537,478 $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 Nine Months Ended September 30, September 30, ------------------------ ------------------------- 1994 1993 1994 1993 ----------- ----------- ------------ ----------- Revenue: Rental revenue $ 5,466,449 $ 6,166,596 $16,280,905 $18,020,654 Interest 10,036 5,040 39,236 26,639 Gain on disposi- tion of real estate - 198,713 - 198,713 ---------- ---------- ---------- ---------- Total revenue 5,476,485 6,370,349 16,320,141 18,246,006 ---------- ---------- ---------- ---------- Expenses: Interest 1,856,914 2,256,003 5,607,494 6,988,988 Interest - affiliates 36,021 123,435 100,132 289,474 Depreciation and amortization 1,181,244 1,177,365 3,472,998 3,526,352 Property taxes 448,749 550,251 1,346,247 1,638,675 Personnel expenses 762,345 800,735 2,101,150 2,228,144 Utilities 368,702 452,904 1,394,611 1,538,868 Repair and maintenance 888,546 709,543 2,221,327 2,403,876 Property management fees - affiliates 273,323 307,959 812,796 900,746 Other property operating expenses 402,313 392,965 1,061,391 1,083,409 General and administrative 50,481 116,595 122,735 329,186 General and administrative - affiliates 120,015 140,781 372,097 597,418 ---------- ---------- ---------- ---------- Total expenses 6,388,653 7,028,536 18,612,978 21,525,136 ---------- ---------- ---------- ---------- Net loss $ (912,168) $ (658,187) $(2,292,837) $(3,279,130) ========== ========== ========== ========== Net loss allocable to limited partners $ (866,560) $ (625,278) $(2,178,195) $(3,115,174) Net income allocable to General Partner (45,608) (32,909) (114,642) (163,956) ---------- ---------- ---------- ---------- Net loss $ (912,168) $ (658,187) $(2,292,837) $(3,279,130) ========== ========== ========== ========== Net loss per limited partner- ship unit $ (3.76) $ (2.71) $ (9.45) $ (13.49) ========= ========== ========== ==========
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 Nine Months Ended September 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 (163,956) (3,115,174) (3,279,130) Contingent Management Incentive Distribution (804,333) - (804,333) ----------- ------------ ------------ Balance at September 30, 1993 $ (8,441,747) $ (20,223,503) $ (28,665,250) =========== ============ ============ Balance at December 31, 1993 $ (8,456,354) $ (13,138,511) $ (21,594,865) Net loss (114,642) (2,178,195) (2,292,837) Contingent Management Incentive Distribution (869,037) - (869,037) ----------- ------------ ----------- Balance at September 30, 1994 $ (9,440,033) $ (15,316,706) $ (24,756,739) =========== ============ ============
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
Nine Months Ended September 30, ---------------------------- 1994 1993 ------------ ------------ Cash flows from operating activities: Cash received from tenants $ 16,359,986 $ 18,245,294 Cash paid to suppliers (6,634,407) (7,512,365) Cash paid to affiliates (1,541,405) (886,678) Interest received 39,236 26,639 Interest paid (5,105,188) (6,368,019) Interest paid to affiliates (470,489) (142,392) Property taxes paid (1,384,293) (1,958,495) ----------- ----------- Net cash provided by operating activities 1,263,440 1,403,984 ----------- ----------- Cash flows used in investing activities: Proceeds from sale of real estate - 288,663 Additions to real estate investments (1,537,331) (1,594,577) ----------- ----------- Net cash used in investing activities (1,537,331) (1,305,914) ----------- ----------- Cash flows from financing activities: Proceeds from refinancing of mortgage notes payable - 442,665 Principal payments on mortgage notes payable (1,154,293) (1,327,880) Additions to deferred borrowing costs (36,992) (330,794) Mortgage loans from affiliates - 1,547,135 Repayment of mortgage loans from affiliates (1,603,135) - Advances from affiliates - General Partner 6,000 135,554 Repayment of advances from affiliates - General Partner (1,206,664) - ----------- ---------- Net cash provided by (used in) financing activities (3,995,084) 466,680 ----------- ---------- Net increase (decrease) in cash and cash equivalents (4,268,975) 564,750 Cash and cash equivalents at beginning of period 4,938,029 343,859 ----------- ---------- Cash and cash equivalents at end of period $ 669,054 $ 908,609 =========== ==========
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
Nine Months Ended September 30, -------------------------- 1994 1993 ----------- ------------ Net loss $(2,292,837) $(3,279,130) ---------- ---------- Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 3,472,998 3,526,352 Amortization of deferred borrowing costs 87,779 198,771 Amortization of discounts on mortgage notes payable 147,288 227,187 Net interest added on advances from affiliates - General Partner 93,032 147,082 Net interest added on advances from Southmark 1,460 1,309 Loss (gain) on disposition of real estate - (198,713) Changes in assets and liabilities: Cash segregated for security deposits 131,025 (13,606) Accounts receivable 47,626 51,166 Prepaid expenses and other assets 2,830 15,879 Escrow deposits (144,289) (636,236) Accounts payable (155,432) (20,514) Accrued expenses 112,387 (92,075) Accrued interest (197,608) 193,703 Accrued property taxes 331,667 565,615 Payable to affiliates - General Partner (356,512) 611,486 Security deposits and deferred rental income (17,974) 105,708 ---------- ---------- Total adjustments 3,556,277 4,683,114 ---------- ---------- Net cash provided by operating activities $ 1,263,440 $ 1,403,984 ========== ==========
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) September 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 nine months ended September 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 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:
Nine Months Ended September 30, ----------------------------- 1994 1993 ---------- ------------ Charged to other assets: Prepaid expenses $ - $ 2,571 Property management fees - affiliates 812,796 900,746 Interest - affiliates 100,132 289,474 Charged to general and administrative - affiliates: Partnership administration 372,097 444,395 Fixed MID - 153,023 ---------- ---------- $ 1,285,025 $ 1,790,209 ========== ========== Charged to General Partner's deficit: Contingent MID $ 869,037 $ 804,333 ========== ==========
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 $15.8 million at September 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. On October 18, 1994, a receiver was appointed for 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 September 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 $2,292,837 for the first nine months of 1994 as compared to a net loss of $3,279,130 for the same period in 1993. Revenues declined in 1994 to $16,320,141 as compared to $18,246,006 in 1993, at the same time expenses decreased to $18,612,978 from $21,525,136. Net cash provided by operating activities was $1,263,440 for the period. After expenditures of $1,537,331 for capital improvements, $1,154,293 in principal payments on mortgage notes, and $36,992 in deferred borrowing costs plus an advance from affiliates of $6,000 and the repayment of mortgage loans and advances from affiliates of $2,809,799, the net decrease in cash of $4,268,975 was deducted from cash and cash equivalents, giving a balance of $669,054 at September 30, 1994 as compared to $908,609 at September 30, 1993. 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 nine months of 1994 was $16,280,905 as compared to $18,020,654 for the same period in 1993. This decrease of $1,739,749 or 9.7% is primarily due to the loss of $2,611,654 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 $2,912,158 for the first nine 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 $981,296 for interest, $322,206 for depreciation, $253,269 for property taxes, $261,830 for personnel expenses, $239,193 for utilities, $267,700 for repair and maintenance, $130,780 for property management fees - affiliates, and $139,606 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 $400,198 or 6.7% 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 $189,342 or 65.4% for the first nine months of 1994 as compared to the same period in 1993 due to the repayment of $2,809,799 of affiliate loans and advances. Depreciation expense increased by $268,852 or 8.4% for the nine months ended September 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 $134,836 or 6.9% for the first nine 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. Utilities increased by $94,936 or 7.3% for the first nine 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 and an increase in water and sewer rates. The increase in these expenses is also directly related to increased occupancy. Repairs and maintenance increased by $85,151 or 4.0% for the first nine months of 1994 as compared to the same period in 1993 due to increases in electrical and HVAC supplies and repairs, and expenses associated with preparing vacated units for occupancy. Repairs and maintenance increased by $250,576 or 39.2% for the three month period ending September 1994 as compared to the same period in 1993 due to expenses associated with preparing vacated units for occupancy. Property management fees - affiliates increased by $42,830 or 5.6% for the nine months ended September 30, 1994 as compared to the same period last year. The increase is due to an increase in rental receipts at the properties, which is the basis for computing such fees. Other property operating expenses increased by $117,588 or 12.5% for the first nine 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 $206,451 or 62.7% for the first nine months of 1994 as compared to the same period in 1993 primarily due to a reduction in tax preparation, legal costs, and professional fees. General and administrative - affiliates decreased $225,321 or 37.7% for the first nine 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 September 30, 1994, the Partnership held cash and cash equivalents of $669,054, down $4,268,975 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 $296,331 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 has been faced with mortgage principal payments and mortgage maturities on Fox Run, Millwood Park and Village East, totaling approximately $6,519,000. It is management's policy to negotiate extensions of such maturities when possible. Management has negotiated a one year extension on Millwood Park and Village East. In June of 1994, management ceased making debt service payments on Fox Run. On October 18, 1994, a receiver was appointed for Fox Run. Additionally, the Partnership is faced with approximately $27,012,000 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 September 30, 1994, $1,661,671 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 Partnership 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 and Lamar Plaza are currently held for sale. Fox Run was placed in receivership on October 18, 1994 and the Partnership expects to allow the foreclosure of the property in full settlement of the related debt in early 1995. The Partnership has signed a sales contract for Village East and anticipates net proceeds to be approximately $2.8 million. 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 $15.8 million at September 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 $869,037 for the Contingent MID has been accrued by the Partnership at September 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 $52,476. 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 October 18, 1994 the amount of the arrearage on Fox Run's mortgage notes is $303,845. 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. 27. Financial Data Schedule for the year ended December 31, 1993 and for the quarter ended September 30, 1994.
(b) Reports on Form 8-K. There were no reports on Form 8-K filed during the quarter ended September 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 November 10, 1994 By: /s/ Donald K. Reed - - ---------------------- -------------------------------------- Date Donald K. Reed President and Chief Executive Officer November 10, 1994 By: /s/ Robert C. Irvine - - ---------------------- ------------------------------------- Date Robert C. Irvine Chief Financial Officer of McNeil Investors, Inc. Principal Financial Officer November 10, 1994 By: /s/ Brandon K. Flaming - - ----------------------- ------------------------------------- Date Brandon K. Flaming Chief Accounting Officer of McNeil Real Estate Management, Inc. EX-27 2
5 The schedule contains summary financial information extracted from the Balance Sheets and Statement of Operations and is qualified in its entirety by reference to such financial statements. 12-MOS 9-MOS DEC-31-1993 DEC-31-1993 DEC-31-1993 SEP-30-1994 4,938,029 669,054 0 0 418,147 370,521 (36,410) (36,410) 0 0 0 0 96,194,009 96,790,842 (43,889,170) (45,689,814) 72,830,100 66,537,478 0 0 0 0 0 0 0 0 0 0 (21,594,865) (24,756,739) 72,830,100 66,537,478 24,228,119 16,280,905 32,481,572 16,320,141 0 0 0 0 18,682,528 12,905,352 0 0 9,620,288 5,707,626 4,178,756 (2,292,837) 0 0 4,178,756 (2,292,837) 0 0 0 0 0 0 4,178,756 (2,292,837) 0 0 0 0
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