-----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, Ii3ZIL7HIfXhfRBb/quHONTf9GK/lGs5XWGrZS7DYVaVOUhxOw3+rdbAcLt8dZx+ 3Pw+M4RvVh4g8rTKLMwrcA== 0000351708-98-000008.txt : 19980515 0000351708-98-000008.hdr.sgml : 19980515 ACCESSION NUMBER: 0000351708-98-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980514 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MCNEIL REAL ESTATE FUND XII LTD CENTRAL INDEX KEY: 0000351708 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 942717957 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-10743 FILM NUMBER: 98619826 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 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 quarterly period ended March 31, 1998 ------------------------------------------- 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 600, LB70, Dallas, Texas, 75240 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (972) 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 --- --- PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS MCNEIL REAL ESTATE FUND XII, LTD. BALANCE SHEETS (Unaudited)
March 31, December 31, 1998 1997 --------------- -------------- ASSETS - ------ Real estate investments: Land..................................................... $ 4,534,618 $ 4,534,618 Buildings and improvements............................... 58,451,302 58,352,857 -------------- ------------- 62,985,920 62,887,475 Less: Accumulated depreciation and amortization......... (37,514,235) (36,754,194) -------------- ------------- 25,471,685 26,133,281 Asset held for sale......................................... 9,312,971 9,303,533 Cash and cash equivalents................................... 1,644,648 1,423,658 Cash segregated for security deposits ...................... 463,945 456,356 Accounts receivable......................................... 226,697 165,311 Prepaid expenses and other assets........................... 130,932 139,468 Escrow deposits............................................. 1,637,308 1,350,788 Deferred borrowing costs, net of accumulated amorti- zation of $805,059 and $767,891 at March 31, 1998 and December 31, 1997, respectively...................... 1,507,534 1,544,702 -------------- ------------- $ 40,395,720 $ 40,517,097 ============== ============= LIABILITIES AND PARTNERS' DEFICIT - --------------------------------- Mortgage notes payable...................................... $ 54,025,002 $ 54,200,372 Accounts payable............................................ 9,936 9,996 Accrued expenses............................................ 228,689 277,958 Accrued interest............................................ 376,771 378,010 Accrued property taxes...................................... 1,063,758 932,545 Deferred gain - land condemnation........................... 297,754 297,754 Advance from Southmark...................................... 40,424 39,839 Advances from affiliates - General Partner.................. 32,790 32,136 Payable to affiliates - General Partner..................... 4,862,836 4,573,052 Security deposits and deferred rental revenue............... 487,722 519,042 -------------- ------------- 61,425,682 61,260,704 -------------- ------------- Partners' deficit: Limited partners - 240,000 limited partnership units authorized; 229,666 and 229,690 limited partnership units issued and outstanding at March 31, 1998 and December 31, 1997, respectively........................ (10,637,692) (10,579,935) General Partner.......................................... (10,392,270) (10,163,672) -------------- ------------- (21,029,962) (20,743,607) -------------- ------------- $ 40,395,720 $ 40,517,097 ============== =============
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 March 31, -------------------------------- 1998 1997 -------------- -------------- Revenue: Rental revenue................................... $ 4,169,057 $ 3,807,257 Interest......................................... 17,059 22,990 ------------- ------------- Total revenue.................................. 4,186,116 3,830,247 ------------- ------------- Expenses: Interest......................................... 1,193,972 1,208,030 Interest - affiliates............................ 654 637 Depreciation and amortization.................... 760,041 946,959 Property taxes................................... 300,780 303,171 Personnel expenses............................... 463,150 464,384 Utilities........................................ 369,326 420,750 Repair and maintenance........................... 439,372 459,016 Property management fees - affiliates............ 201,019 192,555 Other property operating expenses................ 205,230 217,540 General and administrative....................... 248,175 50,687 General and administrative - affiliates.......... 65,194 54,805 ------------- ------------- Total expenses................................. 4,246,913 4,318,534 ------------- ------------- Net loss............................................ $ (60,797) $ (488,287) ============== ============= Net loss allocable to limited partners.............. $ (57,757) $ (463,873) Net loss allocable to General Partner............... (3,040) (24,414) -------------- ------------- Net loss............................................ $ (60,797) $ (488,287) ============== ============= Net loss per limited partnership unit............... $ (0.25) $ (2.02) ============== =============
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 Three Months Ended March 31, 1998 and 1997
Total General Limited Partners' Partner Partners Deficit --------------- ---------------- ---------------- Balance at December 31, 1996.............. $ (9,232,451) $ (9,148,979) $ (18,381,430) Net loss.................................. (24,414) (463,873) (488,287) Management Incentive Distribution......... (205,048) - (205,048) ------------- ------------- ------------- Balance at March 31, 1997................. $ (9,461,913) $ (9,612,852) $ (19,074,765) ============== ============= ============== Balance at December 31, 1997.............. $ (10,163,672) $ (10,579,935) $ (20,743,607) Net loss.................................. (3,040) (57,757) (60,797) Management Incentive Distribution......... (225,558) - (225,558) ------------- ------------- ------------- Balance at March 31, 1998................. $ (10,392,270) $ (10,637,692) $ (21,029,962) ============== ============= ==============
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
Three Months Ended March 31, ------------------------------------------ 1998 1997 ------------------- ----------------- Cash flows from operating activities: Cash received from tenants........................ $ 4,078,873 $ 3,859,819 Cash paid to suppliers............................ (1,872,349) (1,680,714) Cash paid to affiliates........................... (201,987) (580,332) Interest received................................. 17,059 22,990 Interest paid..................................... (1,157,458) (1,173,811) Property taxes paid............................... (359,895) (377,609) ----------------- -------------- Net cash provided by operating activities............ 504,243 70,343 ----------------- -------------- Cash flows from investing activities: Additions to real estate investments.............. (98,445) (259,343) Additions to assets held for sale................. (9,438) - ------------------ -------------- Net cash used in investing activities................ (107,883) (259,343) ----------------- -------------- Cash used in financing activities: Principal payments on mortgage notes payable......................................... (175,370) (160,444) ----------------- -------------- Net increase (decrease) in cash and cash equivalents. 220,990 (349,444) Cash and cash equivalents at beginning of period............................................ 1,423,658 1,768,249 ----------------- -------------- Cash and cash equivalents at end of period........... $ 1,644,648 $ 1,418,805 ================= ==============
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
Three Months Ended March 31, ----------------------------------------- 1998 1997 ----------------- ---------------- Net loss............................................. $ (60,797) $ (488,287) --------------- -------------- Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization..................... 760,041 946,959 Amortization of deferred borrowing costs.......... 37,168 34,787 Net interest added on advances from affiliates - General Partner.................... 654 637 Net interest added on advances from Southmark....................................... 585 571 Changes in assets and liabilities: Cash segregated for security deposits........... (7,589) (2,429) Accounts receivable............................. (61,386) (4,989) Prepaid expenses and other assets............... 8,536 15,711 Escrow deposits................................. (286,520) (356,890) Accounts payable................................ (60) (6,219) Accrued expenses................................ (49,269) (33,252) Accrued interest................................ (1,239) (1,139) Accrued property taxes.......................... 131,213 234,087 Payable to affiliates - General Partner......... 64,226 (332,972) Security deposits and deferred rental .......... revenue....................................... (31,320) 63,768 --------------- -------------- Total adjustments............................. 565,040 558,630 --------------- -------------- Net cash provided by operating activities............ $ 504,243 $ 70,343 =============== ==============
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) March 31, 1998 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. 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 600, 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 three months ended March 31, 1998 are not necessarily indicative of the results to be expected for the year ending December 31, 1998. 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, 1997, 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 600, LB70, Dallas, Texas 75240. NOTE 3. - ------- 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 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. 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 limited partnership ("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, ---------------------- 1998 1997 ---------- --------- Charged to other assets: Property management fees - affiliates................ $ 201,019 $ 192,555 Interest - affiliates................................ 654 637 Charged to general and administrative affiliates: Partnership administration........................ 65,194 54,805 --------- -------- $ 266,867 $ 247,997 ========= ======== Charged to General Partner's deficit: Management Incentive Distribution................. $ 225,558 $ 205,048 ========= ======== NOTE 4. - ------- The Partnership has become aware of the presence of certain solvent based contamination in ground water under a portion of the Lodge at Aspen Grove. The source of the contamination is related to a documented release of solvents from underground storage tanks located at a Colorado Department of Transportation ("CDOT") facility nearby. The Partnership has been informed that CDOT, as the responsible party, has agreed to remediate the property to comply with state and federal standards. CDOT has submitted a corrective action plan to the Colorado Department of Public Health and Environment and implementation of the plan is ongoing. The Partnership is unable to estimate impairment, if any, to the property at this time. However, due to the existence and involvement of the responsible party, the Partnership does not believe that this event has a material impact on the accompanying financial statements. NOTE 5. - ------- On April 7, 1998, the Partnership sold to W9/PHC Real Estate Limited Partnership, an unaffiliated buyer, Channingway Apartments, a 770 unit apartment complex, located in Columbus, Ohio, for a cash purchase price of $19,150,000. Net cash proceeds to the Partnership, after payoff of the first mortgage note and various closing costs, amounted to approximately $5,706,000. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND - ------- --------------------------------------------------------------- RESULTS OF OPERATIONS --------------------- FINANCIAL CONDITION - ------------------- The Partnership is engaged in diversified real estate activities, including the ownership, operation and management of residential and commercial real estate and other real estate related assets. At March 31, 1998, the Partnership owned five apartment properties and one shopping center. All of the Partnership's properties are subject to mortgage notes. RESULTS OF OPERATIONS - --------------------- Revenue: Partnership revenues increased $355,869 or 9% for the three months ended March 31, 1998 as compared to the same period last year. A decrease of $5,931 in interest income was offset by a $361,800 increase in rental revenue. Rental revenues increased at five of the Partnership's six properties. The properties reporting the largest increases in rental revenue, on a percentage basis, were Castle Bluff Apartments and Plaza Westlake. These properties achieved increased rental revenue ranging from 5% to 23% primarily by increasing their base rental rates. One of the Partnership's properties, Channingway Apartments, reported a decrease in rental revenue. The remainder of the Partnership's properties reported small increases in rental revenue due to increased rental rates that were partially offset by decreased occupancy rates. The increase in rent is also due to an increase in contingent rents billed on Plaza Westlake as compared to the prior year. Expenses: Partnership expenses decreased $71,621 or 2% for the three months ended March 31, 1998 as compared to the same period last year. The Partnership incurred decreases in depreciation and utilities. These expenses were partially offset by increases in general and administrative and general and administrative - affiliates. Depreciation expense decreased $186,918 or 20% for the three months ended March 31, 1998 as compared to the same period last year. This decrease is mainly due to Channingway, which is currently classified as an asset held for sale, for which no depreciation has been recognized since August 1, 1997. Utility expense decreased $51,424 or 12% for the three months ended March 31, 1998 as compared to the same period last year. Warmer winter weather in Indianapolis has resulted in lower gas bills at Brendon Way Apartments. General and administrative expenses increased $197,488 for the three months ended March 31, 1998 as compared to the same period last year. The increase was mainly due to costs incurred to explore alternatives to maximize the value of the Partnership (see Liquidity and Capital Resources). The increase was partially offset by decreases attributable to investor services. During 1997, charges for investor services were provided by a third party vendor. Beginning with 1998, these services are provided by affiliates of the General Partner. General and administrative-affiliate expenses increased $10,389 or 19% for the three months ended March 31, 1998 as compared to the same period of 1997. The increase is due to the change in investor relation charges as discussed above. All other remaining expense categories remained comparable to the same period last year. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- During the first three months of 1998, the Partnership provided $504,243 in cash from operations as compared to $70,343 in cash from operations in 1997. The $433,900 increase in cash can be attributed to the reduction in cash paid to affiliates and increase in cash received from tenants in the first quarter of 1998 as compared to the same period in 1997. The Partnership expended $107,883 and $259,343 for capital improvements to its properties for the three months ended March 31, 1998 and 1997, respectively. Cash used for financing activities was $175,370 for the three months ended March 31, 1998 as compared to $160,444 for the same period in 1997. These funds were used to make principal payments on the Partnership's mortgage notes. Short-term liquidity: At March 31, 1998, the Partnership held cash and cash equivalents of $1,644,648. The General Partner considers this level of cash reserves to be adequate to meet the Partnership's operating needs in 1998. The General Partner believes that anticipated operating results for 1998 will be sufficient to fund the Partnership's budgeted $1.2 million in capital improvements for 1998 and to repay the current portion of the Partnership's mortgage notes. On April 7, 1998, the Partnership sold to W9/PHC Real Estate Limited Partnership, an unaffiliated buyer, Channingway Apartments, a 770 unit apartment complex, located in Columbus, Ohio, for a cash purchase price of $19,150,000. Net cash proceeds to the Partnership, after payoff of the first mortgage note and various closing costs, amounted to approximately $5,706,000. Long-term liquidity: For the long-term, property operations will remain the primary source of funds. In this regard, the General Partner expects that the capital improvements made by the Partnership during the past will yield improved cash flow from property operations in the future. If the Partnership's cash position deteriorates, the General Partner may elect to defer certain of the capital improvements, except where such improvements are expected to increase the competitiveness or marketability of the Partnership's properties. Pursuant to the Partnership's previously announced liquidation plans, the Partnership has recently retained PaineWebber, Incorporated as its exclusive financial advisor to explore alternatives to maximize the value of the Partnership. The alternatives being considered by the Partnership include, without limitation, a transaction in which limited partnership interests in the Partnership are converted into cash. The General Partner of the Partnership or entities or persons affiliated with the General Partner will not be involved as a purchaser in any of the transactions contemplated above. Any transaction will be subject to certain conditions including (i) approval by the limited partners of the Partnership, and (ii) receipt of an opinion from an independent financial advisory firm as to the fairness of the consideration received by the Partnership pursuant to such transaction. Finally, there can be no assurance that any transaction will be consummated, or as to the terms thereof. Income (loss) allocation and distributions: Terms of the Amended Partnership Agreement specify that income (loss) 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, 1998 and 1997, $(3,040) and $(24,414), respectively, was allocated to the General Partner. The limited partners received net loss allocations of $(57,757) and $(463,873) for the three months ended March 31, 1998 and 1997, 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. PART II. OTHER INFORMATION 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 229,666 and 229,690 limited partnership units outstanding in 1998 and 1997. 27. Financial Data Schedule for the quarter ended March 31, 1998. (b) Reports on Form 8-K. There were no reports on Form 8-K filed during the quarter ended March 31, 1998. 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 May 14, 1998 By: /s/ Ron K. Taylor - ------------ ---------------------------------------- Date Ron K. Taylor President and Director of McNeil Investors, Inc. (Principal Financial Officer) May 14, 1998 By: /s/ Brandon K. Flaming - ------------ ---------------------------------------- Date Brandon K. Flaming Vice President of McNeil Investors, Inc. (Principal Accounting Officer) EX-27 2
5 3-MOS DEC-31-1998 MAR-31-1998 1,644,648 0 226,697 0 0 0 62,985,920 (37,514,235) 40,395,720 0 54,025,002 0 0 0 0 40,395,720 4,169,057 4,186,116 0 0 3,052,287 0 1,194,626 0 0 (60,797) 0 0 0 (60,797) 0 0
-----END PRIVACY-ENHANCED MESSAGE-----