-----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, KNZyvsuzBXCdUF7VsxVtI0IReFyjWM3iqtv1o3ExpLeDo/9MU59FMnp1ulWbg+wV E1YC9mLDZuVlS8GbVqoV6g== 0000064309-96-000009.txt : 19960515 0000064309-96-000009.hdr.sgml : 19960515 ACCESSION NUMBER: 0000064309-96-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960514 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MCNEIL PACIFIC INVESTORS FUND 1972 CENTRAL INDEX KEY: 0000064309 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 946279375 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-07162 FILM NUMBER: 96563422 BUSINESS ADDRESS: STREET 1: 13760 NOEL RD STE 700 LB70 CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 2144485800 MAIL ADDRESS: STREET 1: 13760 NOEL ROAD SUITE 700 LB 70 CITY: DALLAS STATE: TX ZIP: 75240 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the period ended March 31, 1996 ------------------------------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to_____________ Commission file number 0-7162 MCNEIL PACIFIC INVESTORS FUND 1972 - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) California 94-6279375 - -------------------------------------------------------------------------------- (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 PACIFIC INVESTORS FUND 1972 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS - ------- -------------------- BALANCE SHEETS (Unaudited)
March 31, December 31, 1996 1995 --------------- --------------- ASSETS - ------ Real estate investment: Land..................................................... $ 2,336,000 $ 2,336,000 Buildings and improvements............................... 5,034,042 5,010,483 -------------- -------------- 7,370,042 7,346,483 Less: Accumulated depreciation.......................... (1,106,666) (1,010,990) -------------- -------------- 6,263,376 6,335,493 Cash and cash equivalents................................... 522,778 523,389 Cash segregated for security deposits....................... 50,117 43,885 Accounts receivable......................................... 565 3,849 Prepaid expenses and other assets........................... 22,548 23,220 Escrow deposits............................................. 73,738 49,353 Deferred borrowing costs, net of accumulated amorti- zation of $39,816 and $37,220 at March 31, 1996 and December 31, 1995, respectively...................... 12,118 14,714 -------------- -------------- $ 6,945,240 $ 6,993,903 ============== ============== LIABILITIES AND PARTNERS' EQUITY - -------------------------------- Mortgage note payable....................................... $ 2,127,914 $ 2,161,204 Accounts payable............................................ 14,147 20,363 Accrued interest............................................ 15,516 10,076 Accrued property taxes...................................... 28,974 - Other accrued expenses...................................... 4,414 24,853 Payable to affiliates - General Partner..................... 13,986 15,227 Security deposits and deferred rental revenue............... 65,785 47,198 -------------- -------------- 2,270,736 2,278,921 -------------- -------------- Partners' equity: Limited partners - 15,000 limited partnership units authorized; 13,752.5 limited partnership units issued and outstanding................................. 4,364,560 4,405,038 General Partner.......................................... 309,944 309,944 -------------- -------------- 4,674,504 4,714,982 -------------- -------------- $ 6,945,240 $ 6,993,903 ============== ==============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. MCNEIL PACIFIC INVESTORS FUND 1972 STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended March 31, ---------------------------------- 1996 1995 -------------- -------------- Revenue: Rental revenue................................... $ 390,949 $ 374,979 Interest......................................... 6,550 8,969 ------------- ------------- Total revenue.................................. 397,499 383,948 ------------- ------------- Expenses: Interest......................................... 55,071 52,188 Depreciation..................................... 95,676 77,844 Property taxes................................... 28,974 29,475 Personnel expenses............................... 72,786 56,458 Utilities........................................ 16,879 21,551 Repair and maintenance........................... 87,105 65,878 Property management fees - affiliates............ 23,867 21,372 Other property operating expenses................ 30,198 44,023 General and administrative....................... 10,435 8,122 General and administrative - affiliates.......... 16,986 20,730 ------------- ------------- Total expenses................................. 437,977 397,641 ------------- ------------- Net loss............................................ $ (40,478) $ (13,693) ============= ============= Net loss allocated to limited partners.............. $ (40,478) $ (13,693) Net loss allocated to General Partner............... - - ------------- ------------- Net loss............................................ $ (40,478) $ (13,693) ============= ============= Net loss per Limited Partnership Unit............... $ (2.94) $ (1.00) ============= =============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. MCNEIL PACIFIC INVESTORS FUND 1972 STATEMENTS OF PARTNERS' EQUITY (Unaudited) For the Three Months Ended March 31, 1996 and 1995
Total General Limited Partners' Partner Partners Equity -------------- -------------- -------------- Balance at December 31, 1994.............. $ 309,944 $ 4,690,924 $ 5,000,868 Net loss.................................. - (13,693) (13,693) ------------- ------------- ------------- Balance at March 31, 1995................. $ 309,944 $ 4,677,231 $ 4,987,175 ============= ============= ============= Balance at December 31, 1995.............. $ 309,944 $ 4,405,038 $ 4,714,982 Net loss.................................. - (40,478) (40,478) ------------- ------------- ------------- Balance at March 31, 1996................. $ 309,944 $ 4,364,560 $ 4,674,504 ============= ============= =============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. MCNEIL PACIFIC INVESTORS FUND 1972 STATEMENTS OF CASH FLOWS (Unaudited) Decrease in Cash and Cash Equivalents
Three Months Ended March 31, ----------------------------------- 1996 1995 --------------- --------------- Cash flows from operating activities: Cash received from tenants....................... $ 405,624 $ 351,291 Cash paid to suppliers........................... (242,422) (168,845) Cash paid to affiliates.......................... (42,094) (119,369) Interest received................................ 6,550 8,969 Interest paid.................................... (47,035) (66,270) Property taxes paid and escrowed................. (24,385) 5,011 -------------- ------------- Net cash provided by operating activities........... 56,238 10,787 ------------- ------------- Cash flows from investing activities: Additions to real estate investments............. (23,559) (186,580) ------------- ------------- Cash flows from financing activities: Principal payments on mortgage notes payable........................................ (33,290) (40,830) ------------- ------------- Net decrease in cash and cash equivalents........... (611) (216,623) Cash and cash equivalents at beginning of period........................................ 523,389 1,062,361 ------------- ------------- Cash and cash equivalents at end of period.......... $ 522,778 $ 845,738 ============= =============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. MCNEIL PACIFIC INVESTORS FUND 1972 STATEMENTS OF CASH FLOWS (Unaudited) Reconciliation of Net Loss to Net Cash Provided by Operating Activities
Three Months Ended March 31, ----------------------------------- 1996 1995 --------------- --------------- Net loss............................................ $ (40,478) $ (13,693) ------------- ------------- Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation..................................... 95,676 77,844 Amortization of deferred borrowing costs......... 2,596 2,597 Changes in assets and liabilities: Cash segregated for security deposits.......... (6,232) (10,478) Accounts receivable............................ 3,284 (29,201) Prepaid expenses and other assets.............. 672 3,053 Escrow deposits................................ (24,385) 5,017 Accounts payable............................... (6,216) 71,725 Accrued interest............................... 5,440 (16,679) Accrued property taxes......................... 28,974 29,469 Other accrued expenses......................... (20,439) (29,668) Payable to affiliates - General Partner........ (1,241) (77,267) Security deposits and deferred rental revenue...................................... 18,587 (1,932) ------------- ------------- Total adjustments............................ 96,716 24,480 ------------- ------------- Net cash provided by operating activities........... $ 56,238 $ 10,787 ============= =============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. MCNEIL PACIFIC INVESTORS FUND 1972 Notes To Financial Statements (Unaudited) March 31, 1996 NOTE 1. - ------- McNeil Pacific Investors Fund 1972 (the "Partnership") is a limited partnership organized under the laws of the State of California to invest in real property. 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 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 three months ended March 31, 1996, are not necessarily indicative of the results to be expected for the year ending December 31, 1996. NOTE 2. - ------- The financial statements should be read in conjunction with the financial statements contained in the Partnership's Annual Report on Form 10-K for the year ended December 31, 1995, and the notes thereto, as filed with the Securities and Exchange Commission, which is available upon request by writing to McNeil Pacific Investors Fund 1972, c/o McNeil Real Estate Management, Inc., Investor Services, 13760 Noel Road, Suite 700, LB70, Dallas, Texas 75240. NOTE 3. - ------- The General Partner is entitled to receive a partnership management fee equal to 9.5% of distributions of cash from operations when distributable cash from operations is distributed to the limited partners. No partnership management fees were incurred during the three month period ended March 31, 1996 and 1995. The Partnership pays property management fees equal to 6% of the gross rental receipts of the Partnership's property to McNeil Real Estate Management, Inc. ("McREMI"), an affiliate of the General Partner, for providing property management and leasing services for the Partnership's property. Prior to December 31, 1994, the Partnership paid property management fees equal to 5% of the gross rental receipts of the Partnership's properties. The Partnership reimburses McREMI for its costs, including overhead, of administering the Partnership's affairs. Compensation and reimbursements paid to or accrued for the benefit of the General Partner and its affiliates are as follows:
Three Months Ended March 31, ---------------------------------- 1996 1995 -------------- -------------- Property management fees - affiliates............... $ 23,867 $ 21,372 Charged to general and administrative - affiliates: Partnership administration....................... 16,986 20,730 ------------- ------------- $ 40,853 $ 42,102 ============= =============
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND - ------- --------------------------------------------------------------- RESULTS OF OPERATIONS --------------------- Since the sale of Pacesetter Apartments in 1994, the focus of the Partnership's efforts have been directed to the renovation program at Palm Bay Apartments (formerly known as Greentree Apartments). During 1994 and 1995, the Partnership completed capital improvements totaling $1,088,676. The Partnership's emphasis in 1996 will be to improve the rental and occupancy rates at Palm Bay Apartments. Although the occupancy rate at Palm Bay Apartments has improved, the Partnership has not been able to increase rental rates at Palm Bay Apartments as quickly as had been hoped. RESULTS OF OPERATIONS - --------------------- Revenues: Rental revenues increased $15,970 or 4.3% for the first three months of 1996 compared to the first three months of 1995. The Partnership implemented small rental rate increases at Palm Bay Apartments. Meanwhile, vacancy losses have started a downward trend as occupancy rates are beginning to improve. Occupancy at the end of the first quarter improved to 93.4%, up from 85.5% at the end of 1995. The Partnership has not been able to increase occupancy rates or base rental rates as quickly as was hoped. Several apartment communities in the immediate area have also undergone major rehabilitation, and several of the competing apartment communities are able to offer their units at rates that have been subsidized by various government programs. The effect of the competition has restricted the increase in rental revenue that was otherwise expected from Palm Bay Apartments. Management has implemented various marketing strategies to increase occupancy and improve the revenue growth of the property. Expenses: Partnership expenses increased $40,336 or 10.1% for the three months ended March 31, 1996. Increased expenses were concentrated in depreciation, personnel expenses, and repair and maintenance expenses. The largest increase, on both an absolute and percentage basis, was the increase in repair and maintenance expense. For the three months ended March 31, 1996, repair and maintenance expense increased $21,227 or 32%. Increased expenses for grounds maintenance and appliance replacements were the principal reasons for the increase. Personnel expenses increased $16,328 or 29% for the first three months of 1996. The Partnership has increased the level of staffing at Palm Bay Apartments in an effort to provide a higher level of service to the tenants of Palm Bay Apartments. One of the strategies the Partnership is using the differentiate itself in the local market is to provide a greater level of services to its tenants. Depreciation increased $17,832 or 23% for the first three months of 1996. In 1994 and 1995, the Partnership placed in service approximately $1.08 million of capital improvements at Palm Bay Apartments. These capital improvements have increased the depreciation expense incurred by the property. The new improvements are generally being depreciated over lives ranging from five to ten years. Increases in repair and maintenance, personnel expenses and depreciation were partially offset by a $13,825 or 31% decrease in other property operating expenses. Most of the decrease is due to a reduction in bad debt expenses incurred by the Partnership. In addition to improving Palm Bay's occupancy rate, management is simultaneously increasing the credit rating requirements of tenants leasing units at Palm Bay. The improved credit requirements have helped to reduce bad debts incurred at the property. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- Cash flows generated by operating activities of the Partnership were $56,238 for the first three months of 1996, compared to $10,787 for the first three months of 1995. The Partnership anticipates that the capital renovation projects at Palm Bay Apartments will continue to yield improved cash flow from operations as the restored and refurbished units are leased to new tenants. However, cash flow from Palm Bay Apartments will not be sufficient to fund all Partnership operating expenses and debt service requirements until the occupancy rate of Palm Bay Apartments improves. For the balance of 1996, the Partnership will use its cash reserves to fund debt service requirements if cash flows from operations are insufficient. Cash flows used in investing activities decreased to $23,559 from $186,580. The capital renovation program at Palm Bay Apartments is complete. The Partnership's capital improvement budget for 1996 forward should remain substantially below the amounts incurred in 1995 and 1994. The financing activities of the Partnership consist of the repayment of the Palm Bay mortgage note through monthly debt service payments. These payments are scheduled to gradually increase until June 1997, when the Palm Bay mortgage note matures. Short Term Liquidity: At March 31, 1996, the Partnership held $522,778 of cash and cash equivalents, down only $611 from the balance at the end of 1995. The General Partner considers the Partnership's cash reserves adequate for anticipated Partnership operations for the balance of 1996. Long Term Liquidity: For the long term, property operations will remain the primary source of funds. While the present outlook for the Partnership's liquidity is favorable, market conditions may change and property operations may deteriorate. The General Partner expects that the capital improvements at Palm Bay Apartments will yield improved cash flow from operations in 1996. The Partnership has budgeted $90,000 of capital improvements for 1996. 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 property. The General Partner has established a revolving credit facility not to exceed $5,000,000 in the aggregate which is available on a "first-come, first-served" basis to the Partnership and other affiliated partnerships if certain conditions are met. However, there is no assurance that the Partnership will receive additional funds under the facility because no amounts will be reserved for any particular partnership. As of March 31, 1996, $2,662,819 remained available for borrowing under the facility; however, additional funds could become available as other partnerships repay borrowings. This commitment will terminate on March 30, 1997. As a additional source of liquidity, the General Partner may attempt to refinance the Palm Bay mortgage note. The General Partner estimates that such a refinancing could yield proceeds to the Partnership in excess of the amount needed to retire the current mortgage note. However, there can be no guarantee that the Partnership will be able to obtain such mortgage refinancing on terms or in amounts favorable to the Partnership, or that the cash proceeds from such refinancing could be timed to coincide with the liquidity needs of the Partnership. Distributions: Distributions to partners have been suspended as part of the General Partner's policy of maintaining adequate cash reserves. Distributions to Unit holders 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 Unit holders. PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ------- -------------------------------- (a) Exhibits. Exhibit Number Description ------- ----------- 3. Restated Certificate and Agreement of Limited Partnership dated of March 8, 1972. (1) 4. Amendment to Restated Certificate and Agree- ment of Limited Partnership dated March 30, 1992. (2) 11. Statement regarding computation of net income per limited partnership unit: Net income per limited partnership unit is computed by dividing net income allocated to the limited partners by the number of limited partnership units outstanding. Per unit information has been computed based on 13,752.5 limited partnership units out- standing in 1996 and 1995. 27. Financial Data Schedule for the quarter ended March 31, 1996. (1) Incorporated by reference to the Annual Report of Registrant on Form 10-K for the period ended December 31, 1990, as filed on March 29, 1991. (2) Incorporated by reference to the Current Report on Form 8-K filed by the Registrant with the Securities and Exchange Commission on April 10, 1992. (b) Reports on Form 8-K. There were no reports on Form 8-K filed during the quarter ended March 31, 1996. McNEIL PACIFIC INVESTORS FUND 1972 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 PACIFIC INVESTORS FUND 1972 By: McNeil Partners, L.P., General Partner By: McNeil Investors, Inc., General Partner May 14, 1996 By: /s/ Donald K. Reed - ------------------- --------------------------------------- Date Donald K. Reed President and Chief Executive Officer May 14, 1996 By: /s/ Ron K. Taylor - ------------------- --------------------------------------- Date Ron K. Taylor Acting Chief Financial Officer of McNeil Investors, Inc. May 14, 1996 By: /s/ Brandon K. Flaming - ------------------- --------------------------------------- Date Brandon K. Flaming Chief Accounting Officer of McNeil Real Estate Management, Inc. EX-27 2
5 3-MOS DEC-31-1996 MAR-31-1996 522,778 0 0 0 0 0 7,370,042 (1,106,666) 6,945,240 0 2,127,914 0 0 0 0 6,945,240 390,949 397,499 0 0 382,906 0 55,071 0 0 (40,478) 0 0 0 (40,478) 0 0
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