-----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, HOGf0QD/rDtvSfogwJTKo2BA/xEXBSX+uBy71bBnrwQ1iFFNDsMd8pq9JyuwYW9S 93iGWOcwTjUqh4n1Jb3yqQ== 0000720392-97-000002.txt : 19970326 0000720392-97-000002.hdr.sgml : 19970326 ACCESSION NUMBER: 0000720392-97-000002 CONFORMED SUBMISSION TYPE: 10KSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970325 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANGELES PARTNERS XII CENTRAL INDEX KEY: 0000720392 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 953903623 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10KSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-13309 FILM NUMBER: 97562217 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLZ STREET 2: PO BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8642391513 MAIL ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLAZA STREET 2: P.O. BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 10KSB 1 U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-KSB (Mark One) [X] Annual Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 [No Fee Required] For the fiscal year ended December 31, 1996 or [ ] Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 [No Fee Required] For the transition period from to Commission file number 0-13309 ANGELES PARTNERS XII California 95-3903623 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Insignia Financial Plaza, P.O. Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) (Zip Code) Issuer's telephone number (864) 239-1000 Securities registered under Section 12(b) of the Exchange Act: None Securities registered under Section 12(g) of the Exchange Act: Limited Partnership Units (Title of class) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [] Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant's knowledge in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.[] State issuer's revenues for its most recent fiscal year. $21,321,000 State the aggregate market value of the voting stock held by nonaffiliates of the Registrant. The aggregate market value shall be computed by reference to the price at which the stock was sold, or the average bid and asked prices of such stock, as of a specified date within the past 60 days. Market value information for Registrant's Partnership Interests is not available. Should a trading market develop for these units, it is the Registrant's belief that such trading would not exceed $25,000,000. DOCUMENTS INCORPORATED BY REFERENCE NONE PART I ITEM 1. DESCRIPTION OF BUSINESS Angeles Partners XII (the "Partnership" or the "Registrant") is a publicly-held limited partnership organized under the California Uniform Limited Partnership Act pursuant to the amended Certificate and Agreement of Limited Partnership (hereinafter referred to as the "Agreement") dated May 26, 1983. The Partnership's Managing General Partner is Angeles Realty Corporation II, a California corporation. The Elliott Accommodation Trust and the Elliott Family Partnership, a California limited partnership, are the Non-Managing General Partners. The Managing General Partner and the Non-Managing General Partners are herein collectively referred to as the "General Partners". The Partnership, through its public offering of Limited Partnership Units, sold 44,773 units aggregating $44,773,000. The Managing General Partner contributed capital in the amount of $1,000 for a 1% interest in the Partnership. The Partnership was formed for the purpose of acquiring fee and other forms of equity interests in various types of real property. The Partnership presently owns ten investment properties and owns a general partnership interest in an eleventh property. The Managing General Partner of the Registrant intends to maximize the operating results and, ultimately, the net realizable value of each of the Registrant's properties in order to achieve the best possible return for the investors. Such results may best be achieved through property sales, refinancings, debt restructurings or relinquishment of the assets. The Registrant intends to evaluate each of its holdings periodically to determine the most appropriate strategy for each of the assets. The Managing General Partner's policy is to only commit cash from operations and financings secured by the real property to support operations, capital improvements and repayment of debt on a property specific basis. The Partnership has no full time employees. The Managing General Partner is vested with full authority as to the general management and supervision of the business and affairs of the Partnership. Limited Partners and Non-Managing General Partners have no right to participate in the management or conduct of such business and affairs. Insignia Residential Group, L.P. provides day-to-day management to all of the Partnership's investment properties. The business in which the Partnership is engaged is highly competitive, and the Partnership is not a significant factor in its industry. Each investment property is located in or near a major urban area and, accordingly, competes for rentals not only with similar properties in its immediate area but with hundreds of similar properties throughout the urban area. Such competition is primarily on the basis of location, rents, services and amenities. In addition, the Partnership competes with significant numbers of individuals and organizations (including similar partnerships, real estate investment trusts and financial institutions) with respect to the sale of improved real properties, primarily on the basis of the prices and terms of such transactions. A further description of the Partnership's business is included in "Management's Discussion and Analysis or Plan of Operation" included in "Item 6." of this Form 10-KSB. ITEM 2. DESCRIPTION OF PROPERTIES: The following table sets forth the Registrant's investments in properties:
Date of Property Purchase Type of Ownership Use Briarwood Apartments 06/25/85 Fee ownership subject to Apartment Cedar Rapids, Iowa first and second mortgages 73 units Chambers Ridge Apartments 07/26/84 Fee ownership subject to Apartment Harrisburg, PA first and second mortgages 324 units Cooper Point Plaza 12/14/84 Fee ownership subject to Retail Center Olympia, Washington a first mortgage 103,473 sq.ft. Gateway Gardens Apartments 12/21/84 Fee ownership subject to Apartment Cedar Rapids, Iowa first and second mortgages 328 units Hunters Glen Apartments - IV 01/31/85 Fee ownership subject to Apartment Plainsboro, New Jersey a first mortgage 264 units Hunters Glen Apartments - V 01/31/85 Fee ownership subject to Apartment Plainsboro, New Jersey first and second mortgages 304 units Hunters Glen Apartments - VI 01/31/85 Fee ownership subject to Apartment Plainsboro, New Jersey first and second mortgages 328 units Pickwick Place Apartments 05/11/84 Fee ownership subject to Apartment Indianapolis, Indiana a first mortgage 336 units Southpointe Apartments 06/12/85 Fee ownership subject to Apartment Bedford Heights, Ohio a first mortgage 499 units Twin Lake Towers Apartments 03/30/84 Fee ownership subject to Apartment Westmont, Illinois first and second mortgages 399 units
The Partnership also has a 44.5% interest in Princeton Golf Course Joint Venture ("Joint Venture"). The Partnership entered into a General Partnership Agreement with Angeles Income Properties, Ltd. II and Angeles Partners XI, both California partnerships and affiliates of the Managing General Partner, to form the Joint Venture. The property owned by the Joint Venture, as of December 31, 1996, is summarized as follows: Date of Property Purchase Type of Ownership Use Princeton Meadows Fee ownership subject to Golf Course Golf Course 07/26/91 a first mortgage Princeton, New Jersey The Joint Venture is carried on Angeles Partners XII's balance sheet on the equity method of accounting and is included in "Investment in joint venture". Schedule of Properties: (dollar amounts in thousands) Gross Carrying Accumulated Federal Property Value Depreciation Rate Method Tax Basis Briarwood Apartments $ 1,785 $ 1,035 5-40 yrs (1) $ 733 Chambers Ridge Apartments 9,517 5,855 5-40 yrs (1) 3,516 Cooper Point Plaza 8,880 4,671 5-40 yrs (1) 5,146 Gateway Gardens Apartments 7,337 4,485 5-40 yrs (1) 2,486 Hunters Glen Apartments-IV 11,072 5,716 5-40 yrs (1) 4,861 Hunters Glen Apartments-V 12,883 6,693 5-40 yrs (1) 5,604 Hunters Glen Apartments-VI 13,872 7,235 5-40 yrs (1) 5,959 Pickwick Place Apartments 8,976 4,998 5-40 yrs (1) 3,741 Southpointe Apartments 9,889 5,951 5-40 yrs (1) 3,489 Twin Lake Towers Apartments 14,954 9,172 5-40 yrs (1) 4,696 $ 99,165 $ 55,811 $ 40,231 (1) Straight line and accelerated See "Note A" of the financial statements included in "Item 7." for a description of the Partnership's depreciation policy. SCHEDULE OF MORTGAGES: (dollar amounts in thousands) Principal Principal Balance At Balance December 31, Interest Period Maturity Due At Property 1996 Rate Amortized Date Maturity Briarwood Apartments 1st mortgage $ 1,578 7.83% 28.67 yrs 10/2003 $ 1,404 2nd mortgage 50 7.83% (1) 10/2003 50 Chambers Ridge Apartments 1st mortgage 5,450 7.83% 28.67 yrs 10/2003 4,849 2nd mortgage 174 7.83% (1) 10/2003 174 Cooper Point Plaza 1st mortgage 4,135 10.5% 28 yrs 09/2012 43 Gateway Gardens Apartments 1st mortgage 6,358 7.83% 28.67 yrs 10/2003 5,657 2nd mortgage 203 7.83% (1) 10/2003 203 Hunters Glen Apartments-IV 1st mortgage 8,418 8.43% 28.67 yrs 10/2003 7,787 Hunters Glen Apartments-V 1st mortgage 8,900 7.83% 28.67 yrs 10/2003 7,920 2nd mortgage 285 7.83% (1) 10/2003 285 Hunters Glen Apartments-VI 1st mortgage 9,263 7.83% 28.67 yrs 10/2003 8,243 2nd mortgage 297 7.83% (1) 10/2003 297 Pickwick Place Apartments 1st mortgage 6,513 9.1% 28 yrs 05/2005 5,775 Southpointe Apartments 1st mortgage 11,000 8.59% (1) 07/1999 11,000 Twin Lake Towers Apartments 1st mortgage 10,995 7.83% 28.67 yrs 10/2003 9,782 2nd mortgage 352 7.83% (1) 10/2003 352 73,971 $ 63,821 Less unamortized discounts (1,215) $ 72,756 (1) Interest only payments. Average annual rental rate and occupancy for 1996 and 1995 for each property: Average Annual Average Annual Rental Rates Occupancy Property 1996 1995 1996 1995 Briarwood Apartments $6,417/unit $6,006/unit 95% 97% Chambers Ridge Apartments (1) 6,846/unit 6,708/unit 89% 92% Cooper Point Plaza (2) 6.38/s.f. 5.84/s.f. 83% 93% Gateway Gardens Apartments (3) 6,205/unit 6,048/unit 93% 97% Hunters Glen Apartments - IV 8,573/unit 8,360/unit 94% 94% Hunters Glen Apartments - V 8,573/unit 8,365/unit 95% 95% Hunters Glen Apartments - VI 8,464/unit 8,298/unit 94% 94% Pickwick Place Apartments 6,468/unit 6,202/unit 95% 95% Southpointe Apartments (4) 5,535/unit 5,437/unit 80% 85% Twin Lake Towers Apartments 7,914/unit 7,724/unit 96% 97% (1) This investment property has been adversely affected by increased rental rates which resulted in decreased rentals and renewals. The Managing General Partner plans to increase rental concessions in order to attract new tenants. (2) This investment property has been adversely affected by the moving out of several small tenants. The Managing General Partner is in the process of making several spaces "rent ready" and also is working to fill vacant spaces. (3) This investment property has been adversely affected by an increase in home buying in the area. Also, residents have left due to construction and maintenance work at the property. (4) This investment property has been adversely affected by an increase in home buying in the area. Also, residents have moved out due to delays in renovations at the property. As noted under "Item 1. Description of Business", the real estate industry is highly competitive. All of the properties of the Partnership are subject to competition from other residential apartment complexes and commercial buildings in the area. The Managing General Partner believes that all of the properties are adequately insured. The multi-family residential properties' lease terms are for one year or less. No residential tenant leases 10% or more of the available rental space. The following is a schedule of the lease expirations for the Partnership's commercial property for the years 1997-2006 (dollar amounts in thousands): Number of Square Annual % of Gross Expirations Feet Rent Annual Rent Cooper Point Plaza 1997 4 7,454 $ 83 9.43% 1998 2 2,400 24 2.77% 1999 (1) 1 1,200 14 1.64% 2000 2 10,727 122 13.93% 2001 0 0 0 0% 2002 0 0 0 0% 2003 0 0 0 0% 2004 2 32,538 356 40.50% 2005 0 0 0 0% 2006 0 0 0 0% (1) A tenant, whose lease expired on 12/31/96 and is not included in the schedule above, renewed their lease for the period 1/1/97 - 12/31/99 with annual rent of approximately $14,200. The following schedule reflects information on tenants occupying 10% or more of the leasable square footage for each property: Square Footage Annual Rent Lease Leased Per Square Foot Expiration Cooper Point Plaza Nature of Business Drug Store 19,527 7.27 09/30/04 Real estate taxes and rates in 1996 for each property were (dollar amounts in thousands): 1996 1996 Billing Rate Briarwood Apartments $ 68* 3.32 Chambers Ridge Apartments 153 1.32 Cooper Point Plaza 98 1.52 Gateway Gardens Apartments 238* 3.15 Hunters Glen Apartments - 1 261 2.31 Hunters Glen Apartments - 2 282 2.31 Hunters Glen Apartments - 3 286 2.31 Pickwick Place Apartments 209** 7.57 Southpointe Apartments 231 5.99 Twin Lake Towers Apartments 280** 6.01 * Represents a fiscal year ending June 30, 1996. ** Estimate for 1996 billing. Tax bills not yet received. ITEM 3. LEGAL PROCEEDINGS The Registrant is unaware of any pending or outstanding litigation that is not of a routine nature. Management of the Registrant believes that all such routine matters are adequately covered by insurance and will be resolved without a material adverse effect upon the Partnership's financial condition, results of operation, or liquidity. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Unit holders of the Partnership did not vote on any matter during the fourth quarter of the fiscal year covered by this report. PART II ITEM 5. MARKET FOR THE PARTNERSHIP'S COMMON EQUITY AND RELATED SECURITY HOLDER MATTERS The Partnership, a publicly-held limited partnership, sold 44,773 Limited Partnership Units during its offering period through February 13, 1985. The Partnership currently has 4,133 Limited Partners of record and 44,718 Limited Partnership Units outstanding. During the year, the number of Limited Partnership Units decreased by 55 units due to limited partners abandoning their Units. In abandoning his or her Limited Partnership Unit, a limited partner relinquishes all right, title and interest in the Partnership as of the date of abandonment. There is no intention to sell additional Limited Partnership Units nor is there an established market for these units. ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION RESULTS OF OPERATIONS The Partnership's net loss for the year ended December 31, 1996, was $1,802,000, versus a net loss for the year ended December 31, 1995, of $1,496,000. The increase in net loss for the year ended December 31, 1996, versus the year ended December 31, 1995, can be attributed to an increase in expenses which are only partially offset by an increase in rental income. Rental income increased slightly due to an increase in rental rates for the year ended December 31, 1996, as compared to the year ended December 31, 1995, despite an overall decrease in occupancy. Hunters Glen Apartments - IV, Hunters Glen Apartments - V, Hunters Glen Apartments - VI, Briarwood Apartments, Twin Lake Towers Apartments, & Pickwick Place Apartments had increased rental income due to an increase in rental rates. These increases were only partially offset by decreases in rental income at Gateway Garden Apartments, Chambers Ridge Apartments, Cooper Point Plaza, and Southpointe Apartments due to decreases in occupancy. Contributing to the increase in expenses for the year ended December 31, 1996, as compared to the year ended December 31, 1995, were increases in operating and depreciation expense. Operating expense increased due to increased snow removal costs and utility expense as a result of the harsh winter in 1996. Depreciation expense increased as a result of placing more assets in service in 1995. The refinancings of Pickwick Place Apartments and Hunters Glen Apartments - IV required that certain renovations be made to these investment properties. In 1996, a full year of depreciation was taken on these assets versus only a half year in 1995. Bad debt expense for the year ended December 31, 1996, results from an increase in the reserve necessary at Cooper Point Plaza and Southpointe Apartments based on a review of tenant accounts receivable. The Partnership has a 44.5% investment in the Princeton Meadows Golf Course Joint Venture. For the year ended December 31, 1996, and December 31, 1995, the Partnership realized equity in loss of the Joint Venture of $67,000 as compared to an equity in loss of the Joint Venture of $140,000, respectively. The decrease in loss at Princeton Meadows Golf Course can be attributed to an increase in revenue. These revenue increases can be attributed to maintenance upgrades at the golf course that have improved the appearance of the property. The increase in expense can be attributed to the purchase of liability insurance necessitated by the environmental issue at the property (see "Note F"). Also, advertising expense increased as a result of an aggressive advertising campaign and salary expense increased due to the hiring of additional personnel, including a full time golf pro for the course. The Partnership also implemented a preventive maintenance program and repairs were made to the cart paths and course. Included in operating expense is approximately $468,000 of major repairs and maintenance comprised mainly of interior and exterior building improvements, exterior painting, swimming pool and parking lot repairs, and major landscaping. The Managing General Partner continues to monitor the rental market environment at its investment properties to assess the feasibility of increasing rents, to maintain or increase the occupancy level and to protect the Partnership from increases in expense. The Managing General Partner expects to be able, at a minimum, to continue protecting the Partnership from inflation-related increases in expenses by increasing rents and maintaining a high overall occupancy level. However, rental concessions and rental reductions needed to offset softening market conditions could affect the ability to sustain this plan. CAPITAL RESOURCES AND LIQUIDITY At December 31, 1996, the Partnership had unrestricted cash of $4,827,000 compared to unrestricted cash of $3,643,000 at December 31, 1995. Net cash provided by operating activities decreased due to an increase in accounts receivable and escrows for taxes and a decrease in other liabilities. This was partially offset by an increase in accounts payable. Net cash used in investing activities decreased due to a decrease in the amount used for property improvements and replacements during 1996. Also, net cash used in investing activities decreased due to decreased deposits to restricted escrows. In conjunction with the refinancings of the debt secured by Pickwick Place Apartments and Hunters Glen Apartments - IV, the Partnership was required to restrict certain funds in an escrow account at the time of the refinancings in 1995. Proceeds from the refinancings resulted in cash provided by financing activities for the year ended December 31, 1995. During the year ended December 31, 1996, cash flows used in financing activities resulted due to payments made on the mortgage notes payable. The Managing General Partner has been unsuccessful in attempts to refinance the $11,000,000 non-recourse mortgage indebtedness secured by Southpointe Apartments which matures in July 1999 and carries a stated interest rate of 8.59%. This property has increasing maintenance needs to adequately maintain the property yet the cash flow of the property does not support incurring such expenditures. While the mortgage is not in default at December 31, 1996, monthly payments of debt service are usually late as the property rents for the current month are used to pay the prior month's debt service. The lender has indicated that foreclosure of the property will occur if the mortgage goes into default. On April 17, 1995, the Partnership refinanced the mortgage encumbering Pickwick Place Apartment. The total mortgage indebtedness, which carried a stated interest rate of 10.5%, was in default since its maturity date in June 1994. The new mortgage indebtedness of $6,600,000 carries a stated interest rate of 9.10% and is being amortized over 28 years with a balloon payment due May 2005. Total capitalized loan costs incurred for the refinancing were $214,000 and are being amortized over the life of the loan. On August 7, 1995, the Partnership refinanced the mortgage encumbering Hunters Glen Apartments - IV . The total mortgage indebtedness, which carried a variable interest rate based on the monthly LIBOR rate plus 2.375% (8.65% at refinancing), was in default since its maturity date in December 1994. The new mortgage indebtedness of $8,500,000 carries a fixed rate of 8.43% with a balloon payment due October 15, 2003. Total capitalized loan costs incurred for the refinancing were $79,000 and are being amortized over the life of the loan. The Partnership's primary source of cash is from the operations of its properties and from financing placed on such properties. Cash from these sources is utilized for property operations, capital improvements, and/or repayment of debt. The sufficiency of existing liquid assets to meet future liquidity and capital expenditure requirements is directly related to the level of capital expenditures required at the investment properties to adequately maintain the physical assets and other operating needs of the Partnership. The Partnership indebtedness amounts to $72,756,000, net of unamortized discounts, with maturity dates ranging from July 1999 to September 2012, at which point $63,821,000 of balloon payments will be due. Future cash distributions will depend on the levels of net cash generated from operations, refinancings and property sales. There were no cash distributions during the year ended December 31, 1996, or December 31, 1995. ITEM 7. FINANCIAL STATEMENTS ANGELES PARTNERS XII LIST OF FINANCIAL STATEMENTS Report of Independent Auditors Consolidated Balance Sheet - December 31, 1996 Consolidated Statements of Operations - Years ended December 31, 1996 and 1995 Consolidated Statement of Changes in Partners' Deficit - Years ended December 31, 1996 and 1995 Consolidated Statements of Cash Flows - Years ended December 31, 1996 and 1995 Notes to Consolidated Financial Statements Report of Ernst & Young LLP, Independent Auditors The Partners Angeles Partners XII We have audited the accompanying consolidated balance sheet of Angeles Partners XII as of December 31, 1996, and the related consolidated statements of operations, changes in partners' deficit and cash flows for each of the two years in the period ended December 31, 1996. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Partnership's management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Angeles Partners XII as of December 31, 1996, and the consolidated results of its operations and its cash flows for each of the two years in the period ended December 31, 1996, in conformity with generally accepted accounting principles. /S/ ERNST & YOUNG LLP Greenville, South Carolina February 10, 1997 ANGELES PARTNERS XII CONSOLIDATED BALANCE SHEET (in thousands, except unit data) December 31, 1996 Assets Cash and cash equivalents: Unrestricted $ 4,827 Restricted--tenant security deposits 923 Accounts receivable, net of allowance for doubtful accounts of $183 165 Escrows for taxes 718 Restricted escrows 1,337 Other assets 1,963 Investment in, and advances of $143 to, joint venture (Note F) 143 Investment properties (Notes B and E): Land $ 10,341 Buildings and related personal property 88,824 99,165 Less accumulated depreciation (55,811) 43,354 $ 53,430 Liabilities and Partners' Deficit Liabilities Accounts payable $ 593 Tenant security deposits 923 Accrued taxes 1,032 Other liabilities 716 Mortgage notes payable (Notes B and E) 72,756 Partners' Deficit General partners $ (611) Limited partners (44,718 units issued and outstanding) (21,979) (22,590) $ 53,430 See Accompanying Notes to Consolidated Financial Statements ANGELES PARTNERS XII CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except unit data) Years Ended December 31, 1996 1995 Revenues: Rental income $ 20,001 $ 19,727 Other income 1,320 1,341 Total revenues 21,321 21,068 Expenses: Operating 6,680 6,510 General and administrative 551 568 Maintenance 2,220 2,149 Depreciation 4,811 4,574 Interest 6,538 6,563 Property taxes 2,089 2,067 Bad debt expense (recovery), net 167 (7) Total expenses 23,056 22,424 Equity in loss of joint venture (Note F) (67) (140) Net loss $ (1,802) $ (1,496) Net loss allocated to general partners (1%) $ (18) $ (15) Net loss allocated to limited partners (99%) (1,784) (1,481) Net loss $ (1,802) $ (1,496) Net loss per limited partnership unit $ (39.85) $ (33.09) See Accompanying Notes to Consolidated Financial Statements ANGELES PARTNERS XII CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT ( in thousands, except unit data) Limited Partnership General Limited Units Partners Partners Total Original capital contributions 44,773 $ 1 $ 44,773 $ 44,774 Partners' deficit at December 31, 1994 44,773 $ (578) $ (18,714) $ (19,292) Net loss for the year ended December 31, 1995 -- ( 15) (1,481) (1,496) Partners' deficit at December 31, 1995 44,773 (593) (20,195) (20,788) Net loss for the year ended December 31, 1996 -- (18) (1,784) (1,802) Abandonment of Limited Partnership Units (Note H) (55) -- -- -- Partners' deficit at December 31, 1996 44,718 $ (611) $ (21,979) $ (22,590) See Accompanying Notes to Consolidated Financial Statements ANGELES PARTNERS XII CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Years Ended December 31, 1996 1995 Cash flows from operating activities: Net loss $ (1,802) $ (1,496) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 4,811 4,574 Amortization of discounts, loan costs, and leasing commissions 415 398 Bad debt expense (recovery), net 167 (7) Equity in loss of joint venture 67 140 Change in accounts: Restricted cash (25) (17) Accounts receivable (192) -- Escrows for taxes (119) 96 Other assets 17 -- Accounts payable 91 (234) Tenant security deposit liabilities 60 (17) Accrued taxes 16 64 Other liabilities (201) 289 Net cash provided by operating activities: 3,305 3,790 Cash flows from investing activities: Property improvements and replacements (1,648) (2,144) Deposits to restricted escrows (142) (1,016) Advances to joint venture (89) -- Withdrawals from restricted escrows 482 623 Net cash used in investing activities (1,397) (2,537) Cash flows from financing activities: Payments on mortgage notes payable (724) (5,964) Proceeds from refinance -- 6,600 Loan costs -- (293) Net cash (used in) provided by financing activities (724) 343 Net increase in cash and cash equivalents 1,184 1,596 Unrestricted cash and cash equivalents at beginning of year 3,643 2,047 Unrestricted cash and cash equivalents at end of year $ 4,827 $ 3,643 Supplemental disclosure of cash flow information Cash paid for interest $ 6,093 $ 5,965 See Accompanying Notes to Consolidated Financial Statements ANGELES PARTNERS XII Notes to Consolidated Financial Statements December 31, 1996 NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Organization: Angeles Partners XII (the "Partnership" or "Registrant") is a California limited partnership organized on May 26, 1983, to acquire and operate residential and commercial real estate properties. The Partnership's Managing General Partner is Angeles Realty Corporation II ("ARC II"), an affiliate of Insignia Financial Group, Inc. As of December 31, 1996, the Partnership operates nine residential properties and one commercial property in or near major urban areas in the United States and owns a general partner interest in a golf course. Principles of Consolidation: The financial statements include the accounts of the Partnership and its majority owned partnerships. All significant interpartnership balances have been eliminated. Minority interest is immaterial and not shown separately in the financial statements. Unrestricted Cash and Cash Equivalents: The Partnership considers all highly liquid investments with a maturity when purchased of three months or less to be cash equivalents. At certain times, the amount of cash deposited at a bank may exceed the limit on insured deposits. Restricted Cash - Tenant Security Deposits: The Partnership requires security deposits from all apartment lessees for the duration of the lease and considers the deposits to be restricted cash. Deposits are refunded when the tenant vacates the apartment if there has been no damage to the unit. Loan Costs: Loan costs of $2,719,000 are included in "Other assets" on the balance sheet and are being amortized on a straight-line basis over the life of the loans. Accumulated amortization is $1,069,000 at December 31, 1996, and is also included in "Other assets" on the balance sheet. Restricted escrows: CAPITAL IMPROVEMENT - At the time of the refinancings of the mortgages encumbering Briarwood Apartments, Chambers Ridge Apartments, Gateway Gardens Apartments, Hunters Glen Apartments and Twin Lake Towers Apartments, $1,610,000 of the proceeds were designated for "Capital Improvement Escrows" for certain capital improvements. The balance in the Capital Improvement Escrows at December 31, 1996, is $416,000. REPLACEMENT RESERVE - In conjunction with the refinancing of the mortgage encumbering Pickwick Place Apartments on April 17, 1995, a replacement reserve was established to fund certain nonrecurring costs for interior and exterior capital improvements at the property. The balance in this escrow account is $166,000 at December 31, 1996. GENERAL - In addition to the Capital Improvement Escrows, General Escrow Accounts of $711,000 were established in conjunction with the refinancings. These funds were established to make necessary repairs and replacements of existing improvements, debt service, out-of-pocket expenses incurred for ordinary and necessary administrative tasks, and payment of real property taxes and insurance premiums. The Partnership is required to deposit net operating income (as defined in the mortgage note) from the refinanced properties to the General Escrow Accounts until the reserve account equals $400 per apartment unit or $808,000. The balance in the General Escrow Accounts at December 31, 1996, is $755,000. Joint Venture: The Partnership accounts for its 44.5% investment in Princeton Meadows Golf Course Joint Venture ("Joint Venture") using the equity method of accounting (see "Note F"). Under the equity method, the Partnership records its equity interest in earnings or losses of the Joint Venture; however, the investment in the Joint Venture will be recorded at an amount less than zero (a liability) to the extent of the Partnership's share of net liabilities of the Joint Venture. Investment Properties: Prior to the fourth quarter of 1995, investment properties were carried at the lower of cost or estimated fair value, which was determined using the higher of the property's non-recourse debt amount, when applicable, or the net operating income of the investment property capitalized at a rate deemed reasonable for the type of property. During the fourth quarter of 1995 the Partnership adopted "FASB Statement No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of", which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. The impairment loss is measured by comparing the fair value of the asset to its carrying amount. The effect of adoption was not material. Depreciation: Depreciation is computed utilizing accelerated and straight-line methods over the estimated useful lives of the investment properties and related personal property. For Federal income tax purposes, depreciation is computed by using the straight-line method over an estimated life of 5 to 20 years for personal property and 15 to 40 years for real property. Allocations and Distributions to Partners: The Partnership will allocate all profits, losses and distributions related to the operations of its investment properties 1% to the General Partners and 99% to the Limited Partners. All profits, losses and distributions related to the sales and/or refinancing of its investment properties will be allocated in accordance with the Agreement. Except as discussed below, the Partnership will allocate distributions 1% to the General Partners and 99% to the Limited Partners. Upon the sale or other disposition, or refinancing, of any asset of the Partnership, the distributable net proceeds shall be distributed as follows: (i) to the Partners in proportion to their interests until the Limited Partners have received cumulative distributions equal to their original capital contributions reduced by the amount of any previous distributions; (ii) to the Partners until the Limited Partners have received distributions from all sources equal to their 6% cumulative distribution; (iii) to the Managing General Partner until it has received an amount equal to 3% of the aggregate Disposition Prices of all properties or other investments sold or otherwise disposed of, or refinanced; (iv) to the Partners in proportion to their interests until the Limited Partners have received cumulative distributions from all sources equal to 150% of the Capital Contribution of the Limited Partners; (v) to the Managing General Partner until it has received an amount equal to 17.6% of the distributions made pursuant to (iv); and (vi) 85% to the Limited Partners and non-Managing General Partners in proportion to their interests and 15% ("Incentive Interest") to the Managing General Partner. Lease Commissions: Lease commissions are being amortized using the straight line method over the term of the respective leases. Leases: The Partnership generally leases apartment units for twelve-month terms or less. Commercial building lease terms are from twelve months to ten years. Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Fair Value: In 1995, the Partnership implemented "Statement of Financial Accounting Standards No. 107, Disclosure about Fair Value of Financial Instruments," which requires disclosure of fair value information about financial instruments for which it is practicable to estimate that value. The carrying amount of the Partnership's cash and cash equivalents approximates fair value due to short-term maturities. The Partnership estimates the fair value of its fixed rate mortgage by discounted cash flow analysis, based on estimated borrowing rates currently available to the Partnership (see "Note B"). Reclassifications: Certain reclassifications have been made to the 1995 balances to conform to the 1996 presentation. NOTE B - MORTGAGE NOTES PAYABLE The principal terms of mortgage notes payable are as follows: (dollar amounts in thousands) Monthly Principal Principal Payment Stated Balance Balance At Including Interest Maturity Due At December 31, Property Interest Rate Date Maturity 1996 Briarwood Apartments 1st mortgage $ 12 7.83% 10/2003 $ 1,404 $ 1,578 2nd mortgage (1) 7.83% 10/2003 50 50 Chambers Ridge Apartments 1st mortgage 41 7.83% 10/2003 4,849 5,450 2nd mortgage 1 7.83% 10/2003 174 174 Cooper Point Plaza 1st mortgage 45 10.5% 09/2012 43 4,135 Gateway Gardens Apartments 1st mortgage 48 7.83% 10/2003 5,657 6,358 2nd mortgage 1 7.83% 10/2003 203 203 Hunters Glen Apartments-IV 1st mortgage 65 8.43% 10/2003 7,787 8,418 Hunters Glen Apartments-V 1st mortgage 67 7.83% 10/2003 7,920 8,900 2nd mortgage 2 7.83% 10/2003 285 285 Hunters Glen Apartments-VI 1st mortgage 70 7.83% 10/2003 8,243 9,263 2nd mortgage 2 7.83% 10/2003 297 297 Pickwick Place Apartments 1st mortgage 54 9.1% 05/2005 5,775 6,513 Southpointe Apartments 1st mortgage 79 8.59% 07/1999 11,000 11,000 Twin Lake Towers Apartments 1st mortgage 83 7.83% 10/2003 9,782 10,995 2nd mortgage 2 7.83% 10/2003 352 352 73,971 Less unamortized discounts at a rate of 8.13% (1,215) Total $ 572 $ 63,821 $ 72,756 (1) Monthly payment is less than $1000 The mortgage notes payable are nonrecourse and are secured by pledge of certain of the Partnership's rental properties and by pledge of revenues from the respective rental properties. Certain of the notes impose prepayment penalties if repaid prior to maturity. The estimated fair value of the Partnership's aggregate mortgage notes payable is approximately $64,967,000 (excluding Southpointe) as compared to the carrying value of $62,971,000 (excluding Southpointe). This estimate is not necessarily indicative of the amounts the Partnership may pay in actual market transactions. The Managing General Partner believes that it is not appropriate to use the Partnership's incremental borrowing rate for the mortgage secured by Southpointe Apartments since there are currently no markets in which the Partnership could obtain similar financing. Therefore, the Managing General Partner considers estimation of fair value for this note to be impractical. Scheduled principal payments of mortgage notes payable subsequent to December 31, 1996, are as follows (in thousands): 1997 $ 792 1998 861 1999 11,936 2000 1,018 2001 1,106 Thereafter 58,258 $ 73,971 On April 17, 1995, the Partnership refinanced the mortgage encumbering Pickwick Place Apartments. The total mortgage indebtedness, which carried a stated interest rate of 10.5%, was in default since its maturity date in June 1994. The new mortgage indebtedness of $6,600,000 carries a stated interest rate of 9.10% and is being amortized over 28 years with a balloon payment due May 2005. Total capitalized loan costs incurred in 1995 for the refinancing were $214,000 and are being amortized over the life of the loan. On August 7, 1995, the Partnership refinanced the mortgage encumbering Hunters Glen Apartments IV. The total mortgage indebtedness which carried a variable interest rate based on the monthly LIBOR rate plus 2.375% (8.65% at refinancing) was in default since its maturity date in December 1994. The new mortgage indebtedness of $8,500,000 carries a fixed rate of 8.43% with a balloon payment due October 15, 2003. Total capitalized loan costs incurred for the refinancing were $79,000 and are being amortized over the life of the loan. NOTE C - INCOME TAXES Taxable income or loss of the Partnership is reported in the income tax returns of its partners. Accordingly, no provision for income taxes is made in the financial statements of the Partnership. Differences between the net loss as reported and Federal taxable loss result primarily from discounts on mortgage notes payable and depreciation over different methods and lives and on differing cost basis of investment properties. The following is a reconciliation of reported net loss and Federal taxable loss: 1996 1995 (in thousands, except unit data) Net loss as reported $ (1,802) $ (1,496) Add (deduct): Depreciation differences 566 311 Unearned income (197) (74) Discounts on mortgage notes payable 19 13 Other 40 17 Federal taxable loss $ (1,374) $ (1,229) Federal taxable loss per limited partnership unit $ (30.42) $ (27.17) The following is a reconciliation between the Partnership's reported amounts and Federal tax basis of net assets and liabilities (in thousands): Net liabilities $ (22,590) Land and buildings 8,669 Accumulated depreciation (11,792) Syndication and distribution costs 6,093 Other 93 Net liabilities - Federal tax basis $ (19,527) NOTE D - TRANSACTIONS WITH AFFILIATED PARTIES The Partnership has no employees and is dependent on the Managing General Partner and its affiliates for the management and administration of all partnership activities. The Partnership Agreement provides for payments to affiliates for services and as reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. The following amounts owed to the Managing General Partner and affiliates for the twelve month periods ended December 31, 1996 and 1995, were paid or accrued: 1996 1995 (in thousands) Property management fees $ 1,033 $ 1,032 Reimbursement for services of affiliates, including $33,000 of construction service reimbursements (included in maintenance expense) 453 443 The Partnership insures its properties under a master policy through an agency and insurer unaffiliated with the Managing General Partner. An affiliate of the Managing General Partner acquired, in the acquisition of a business, certain financial obligations from an insurance agency which were later acquired by the agent who placed the current year's master policy. The current agent assumed the financial obligations to the affiliate of the Managing General Partner who receives payments on these obligations from the agent. The amount of the Partnership's insurance premiums accruing to the benefit of the affiliate of the Managing General Partner by virtue of the agent's obligations is not significant. Angeles Mortgage Investment Trust ("AMIT"), a real estate investment trust, provides financing to the Joint Venture which is secured by the Joint Venture's investment property known as the Princeton Meadows Golf Course, in the amount of $1,567,000 at December 31, 1996. Total interest expense was $200,000 and $203,000 for the years ended December 31, 1996 and 1995, respectively. MAE GP Corporation ("MAE GP"), an affiliate of the Managing General Partner, owns 1,675,113 Class B Shares of AMIT. MAE GP has the option to convert these Class B Shares, in whole or in part, into Class A Shares on the basis of 1 Class A Share for every 49 Class B Shares. These Class B Shares entitle MAE GP to receive 1% of the distributions of net cash distributed by AMIT. These Class B Shares also entitle MAE GP to vote on the same basis as Class A Shares which allows MAE GP to vote approximately 39% of the total shares (unless and until converted to Class A Shares at which time the percentage of the vote controlled represented by the shares held by MAE GP would approximate 1.3% of the vote). Between the date of acquisition of these shares (November 24, 1992) and March 31, 1995, MAE GP declined to vote these shares. Since that date, MAE GP voted its shares at the 1995 and 1996 annual meetings in connection with the election of trustees and other matters. MAE has not exerted, and continues to decline to exert, any management control over or participate in the management of AMIT. In addition, Liquidity Assistance, LLC, ("LAC"), an affiliate of the Managing General Partner and an affiliate of Insignia Financial Group, Inc. ("Insignia"), which provides property management and partnership administration services to the Partnership, owns 126,500 Class A Shares of AMIT at December 31, 1996. As of February 1, 1997, the number of shares owned by LAC decreased to 96,800. These Class A Shares entitle LAC to vote approximately 2.2% of the total shares. In addition, Insignia has engaged and continues to engage in discussions with AMIT regarding various potential business combinations with affiliates of Insignia. As part of a settlement of certain disputes with AMIT, MAE GP granted to AMIT an option to acquire the Class B Shares. This option can be exercised at the end of 10 years or when all loans made by AMIT to partnerships affiliated with MAE GP as of November 9, 1994, which is the date of execution of a definitive Settlement Agreement, have been paid in full, but in no event prior to November 9, 1997. AMIT delivered to MAE GP cash in the sum of $250,000 at closing, which occurred April 14, 1995, as payment for the option. Upon exercise of the option, AMIT will remit to MAE GP an additional $94,000. Simultaneously with the execution of the option, MAE GP executed an irrevocable proxy in favor of AMIT the result of which is MAE GP will be able to vote the Class B Shares on all matters except those involving transactions between AMIT and MAE GP affiliated borrowers or the election of any MAE GP affiliate as an officer or trustee of AMIT. On those matters, MAE GP granted to the AMIT trustees, in their capacity as trustees of AMIT, proxies with regard to the Class B Shares instructing such trustees to vote said Class B Shares in accordance with the vote of the majority of the Class A Shares voting to be determined without consideration of the votes of "Excess Class A Shares" as defined in Section 6.13 of the Declaration of Trust of AMIT. NOTE E - INVESTMENT PROPERTIES AND ACCUMULATED DEPRECIATION Initial Cost To Partnership (in thousands) Cost Buildings Capitalized and Related (Removed) Personal Net Subsequent Description Encumbrances Land Property to Acquisition Investment Properties Briarwood Apartments $ 1,628 $ 136 $ 1,409 $ 240 Chambers Ridge Apartments 5,624 527 7,823 1,167 Cooper Point Plaza 4,135 1,689 5,319 1,872 Gateway Gardens Apartments 6,561 255 6,206 876 Hunters Glen Apartments-IV 8,418 1,552 8,324 1,196 Hunters Glen Apartments-V 9,185 1,820 9,759 1,304 Hunters Glen Apartments-VI 9,560 1,981 10,620 1,271 Pickwick Place Apartments 6,513 603 6,552 1,821 Southpointe Apartments 11,000 663 8,616 610 Twin Lake Towers Apartments 11,347 1,115 12,806 1,033 Totals $ 73,971 $ 10,341 $ 77,434 $ 11,390
Gross Amount At Which Carried At December 31, 1996 (in thousands) Buildings And Related Personal Accumulated Date Depreciable Description Land Property Total Depreciation Acquired Life-Years Briarwood Apartments $ 136 $ 1,649 $ 1,785 $ 1,035 06/25/85 10-20 Chambers Ridge Apartments 527 8,990 9,517 5,855 07/26/84 10-20 Cooper Point Plaza 1,689 7,191 8,880 4,671 12/14/84 10-20 Gateway Gardens Apartments 255 7,082 7,337 4,485 12/21/84 10-20 Hunters Glen Apartments - IV 1,552 9,520 11,072 5,716 01/31/85 10-40 Hunters Glen Apartments - V 1,820 11,063 12,883 6,693 01/31/85 10-40 Hunters Glen Apartments - VI 1,981 11,891 13,872 7,235 01/31/85 10-40 Pickwick Place Apartments 603 8,373 8,976 4,998 05/11/84 10-20 Southpointe Apartments 663 9,226 9,889 5,951 06/12/85 10-20 Twin Lake Towers Apartments 1,115 13,839 14,954 9,172 03/30/84 10-20 Totals $ 10,341 $ 88,824 $ 99,165 $ 55,811
The depreciable lives included above are for the buildings and components. The depreciable lives for related personal property are for 5 to 7 years. Reconciliation of "Investment Properties and Accumulated Depreciation: Year Ended December 31, 1996 1995 (in thousands) Investment Properties Balance at beginning of year $ 97,572 $ 95,576 Property improvements 1,648 2,144 Disposal of assets (55) (148) Balance at end of year $ 99,165 $ 97,572 Accumulated Depreciation Balance at beginning of year $ 51,033 $ 46,563 Additions charged to expense 4,811 4,574 Disposal of assets (33) (104) Balance at end of year $ 55,811 $ 51,033 The aggregate cost of the real estate for Federal income tax purposes at December 31, 1996 and 1995, is $107,834,000 and $106,169,000 respectively. The accumulated depreciation taken for Federal income tax purposes at December 31, 1996 and 1995, is $67,603,000 and $63,357,000, respectively. NOTE F - INVESTMENT IN JOINT VENTURE Condensed balance sheet information of the Joint Venture at December 31, 1996, is as follows: December 31, 1996 (in thousands) Assets Cash $ 76 Deferred charges and other assets 124 Investment properties, net 1,894 Total $ 2,094 Liabilities and Partners' Capital Note payable to AMIT (Note D) $ 1,567 Other liabilities 527 Partners' capital -- $ 2,094 The condensed statements of operations of the Joint Venture for the years ended December 31, 1996 and 1995, are summarized as follows: December 31, 1996 1995 (in thousands) Revenue $ 1,417 $ 1,158 Costs and expenses (1,567) (1,472) Net loss $ (150) $ (314) The Partnership's equity interest in the loss of the Joint Venture was $67,000 and $140,000 for the years ended December 31, 1996 and 1995, respectively. The Princeton Meadows Golf Course property had an underground fuel storage tank that was removed in 1992. This fuel storage tank caused contamination to the area. Management installed monitoring wells in the area where the tank was formerly buried. Some samples from these wells indicated lead and phosphorous readings that were higher than the range prescribed by the New Jersey Department of Environmental Protection ("DEP"). The Joint Venture notified DEP of the findings when they were first discovered. However, DEP had not given any directives as to corrective action until late 1995. In November 1995, representatives of the Joint Venture and the New Jersey DEP met and developed a plan of action to clean-up the contamination site at Princeton Meadows Golf Course. The Joint Venture has engaged an engineering firm to conduct consulting and compliance work and a second firm to perform the field work necessary for the clean-up. The Joint Venture has recorded a liability of $199,000 for the costs of the clean-up. The contracts have been executed and work field is complete with the expected completion date of the compliance work to be sometime in 1997. The Managing General Partner believes the balance of $41,000 in the liability is sufficient to cover all costs associated with this incident. NOTE G - OPERATING LEASES Tenants of the commercial property are responsible for their own utilities and maintenance of their space, and payment of their proportionate share of common area maintenance, utilities, insurance and real estate taxes. Tenants are generally not required to pay a security deposit. Bad debt expense has been within the Managing General Partner's expectations. As of December 31, 1996, the Partnership had minimum future rentals under noncancellable leases with terms ranging from twelve months to ten years (in thousands): 1997 $ 641 1998 551 1999 534 2000 475 2001 412 Thereafter 1,100 $ 3,713 NOTE H - ABANDONED LIMITED PARTNERSHIP UNITS In 1996, the number of Limited Partnership Units decreased by 55 units, due to limited partners abandoning their units. In abandoning his or her Limited Partnership Unit, a limited partner relinquishes all right, title and interest in the Partnership as of the date of abandonment. However, during the year of abandonment, the Limited Partner will still be allocated his or her share of the income or loss. The loss per Limited Partnership Unit in the accompanying Statement of Operations is calculated based on the number of units outstanding at the beginning of the year. ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANT ON ACCOUNTING AND FINANCIAL DISCLOSURES There were no disagreements with Ernst & Young, LLP regarding the 1996 or 1995 audits of the Partnership's financial statements. PART III ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT The names of the directors and executive officers of Angeles Realty Corporation II ("ARC II"), the Partnership's Managing General Partner as of December 31, 1996, their ages and the nature of all positions with ARC II presently held by them are as follows: Name Age Position Carroll D. Vinson 56 President, Director Robert D. Long, Jr. 29 Controller and Principal Accounting Officer William H. Jarrard, Jr. 50 Vice President John K. Lines, Esq. 37 Vice President and Secretary Kelley M. Buechler 39 Assistant Secretary Carroll D. Vinson has been President of Metropolitan Asset Enhancement, L.P., and subsidiaries since August of 1994. Prior to that, during 1993 to August 1994, Mr. Vinson was affiliated with Crisp, Hughes & Co. (regional CPA firm) and engaged in various other investment and consulting activities. Briefly, in early 1993, Mr. Vinson served as President and Chief Executive Officer of Angeles Corporation, a real estate investment firm. From 1991 to 1993, Mr. Vinson was employed by Insignia in various capacities including Managing Director-President during 1991. From 1986 to 1990, Mr. Vinson was President and a Director of U.S. Shelter Corporation, a real estate services company, which sold substantially all of its assets to Insignia in December 1990. Robert D. Long, Jr. is Controller and Principal Accounting Officer. Prior to joining Metropolitan Asset Enhancement, L.P., and subsidiaries, he was an auditor for the State of Tennessee and was associated with the accounting firm of Harshman Lewis and Associates. William H. Jarrard, Jr. has been Managing Director - Partnership Administration of Insignia since January 1991. Mr. Jarrard served as Managing Director - Partnership Administration and Asset Management from July 1994 until January 1996. John K. Lines, Esq. has been Insignia's General Counsel since June 1994 and General Counsel and Secretary since July 1994. From May 1993 until June 1994, Mr. Lines was the Assistant General Counsel and Vice President of Ocwen Financial Corporation in West Palm Beach, Florida. From October 1991 until May 1993, Mr. Lines was a Senior Attorney with Banc One Corporation in Columbus, Ohio. From May 1984 until October 1991, Mr. Lines was employed as an Associate Attorney with Squire Sanders & Dempsey in Columbus, Ohio. Kelley M. Buechler is Assistant Secretary of the General Partner and has served as Secretary of Insignia since 1991. ITEM 10. EXECUTIVE COMPENSATION No direct form of compensation or remuneration was paid by the Partnership to any officer or director of ARC II. The Partnership has no plan, nor does the Partnership presently propose a plan, which will result in any remuneration being paid to any officer or director upon termination of employment. However, fees and other payments have been made to the Partnership's Managing General Partner and its affiliates, as described in "Note D" of the Financial Statements included under "Item 7.", which is incorporated herein by reference. ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT As of January 1, 1997, no person owned of record more than 5% of Limited Partnership Units of the Partnership nor was any person known by the Partnership to own of record and beneficially, or beneficially only, more than 5% of such securities. The Partnership knows of no contractual arrangements, the operation of the terms of which may at a subsequent date result in a change in control of the Partnership, except for: Article 12.1 of the Agreement, which provides that upon a vote of the Limited Partners holding more than 50% of the then outstanding Limited Partnership Units the General Partners may be expelled from the Partnership upon 90 days written notice. In the event that successor general partners have been elected by Limited Partners holding more than 50% of the then outstanding Limited Partnership Units and if said Limited Partners elect to continue the business of the Partnership, the Partnership is required to pay in cash to the expelled Managing General Partner an amount equal to the accrued and unpaid management fee described in Article 10 of the Agreement and to purchase the General Partners' interest in the Partnership on the effective date of the expulsion, which shall be an amount equal to the difference between (i) the balance of the General Partners' capital account and (ii) the fair market value of the share of Distributable Net Proceeds to which the General Partners would be entitled. Such determination of the fair market value of the share of Distributable Net Proceeds is defined in Article 12.2(ii) of the Agreement. ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS No transactions have occurred between the Partnership and any officer or director of ARC II. During the year ended December 31, 1996, the transactions that occurred between the Partnership and ARC II and affiliates of ARC II pursuant to the terms of the Agreement are disclosed under "Note D" of the Partnership's Financial Statements included under "Item 7.", which is hereby incorporated by reference. PART IV ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: See Exhibit Index contained herein. (b) No reports on Form 8-K were filed during the fourth quarter of 1996. SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Angeles Partners XII (A California Limited Partnership) (Registrant) By: Angeles Realty Corporation II By: /s/Carroll D. Vinson Carroll D. Vinson President, Director Date: March 25, 1997 In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Registrant and in the capacities on the date indicated. /s/Carroll D. Vinson President, Director March 25, 1997 Carroll D. Vinson /s/Robert D. Long, Jr. Controller and Principal March 25, 1997 Robert D. Long, Jr. Accounting Officer EXHIBIT INDEX Exhibit Number Description of Exhibit 3.1 Amended Certificate and Agreement of Limited Partnership dated May 26, 1983 filed in Form S-11 dated June 2, 1983 and is incorporated herein by reference. 10.1 Purchase and Sale Agreement with Exhibits - Twin Lake Towers Apartments filed in Form 8K dated March 30, 1984, incorporated herein by reference. 10.2 Purchase and Sale Agreement with Exhibits - Pickwick Place Apartments filed in Form 8K dated May 11, 1984, incorporated herein by reference. 10.3 Purchase and Sale Agreement with Exhibits - Chambers Ridge Apartments filed in Form 8K dated July 26, 1984, incorporated herein by reference. 10.4 Purchase and Sale Agreement with Exhibits - Park Village Plaza filed in Form 8K dated December 21, 1984, incorporated herein by reference. 10.5 Purchase and Sale Agreement with Exhibits - Gateway Gardens Apartments filed in Form 8K dated December 21, 1984, incorporated herein by reference. 10.6 Purchase and Sale Agreement with Exhibits - Hunters Glen Apartments I, II, III filed in Form 8K dated February 1, 1985, incorporated herein by reference. 10.7 Purchase and Sale Agreement with Exhibits - Meadows Apartments filed in Form 8K dated June 12, 1985, incorporated herein by reference. 10.8 Purchase and Sale Agreement with Exhibits - Briarwood Apartments filed in Form 8K dated June 25, 1985, incorporated herein by reference. 10.9 Purchase and Sale Agreement with Exhibits - dated July 26, 1992 between Princeton Golf Course Joint Venture and Lincoln Property Company No. 199 filed in Form 10Q dated August 13, 1992, incorporated herein by reference. 10.10 Princeton Golf Course Joint Venture Agreement with Exhibits - dated August 21, 1991 between the Partnership, Angeles Partners XI and Angeles Income Properties, Ltd. II filed in Form 10Q dated August 13, 1992, incorporated herein by reference. 10.11 Stock Purchase Agreement dated November 24, 1992 showing the purchase of 100% of the outstanding stock of Angeles Realty Corporation II by IAP GP Corporation, a subsidiary of MAE GP Corporation, filed in Form 8-K dated December 31, 1992, which is incorporated herein by reference. 10.12 Contracts related to refinancing of debt (a) First Deeds of Trust and Security Agreements dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation, securing Briarwood. (b) Second Deeds of Trust and Security Agreements dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation, securing Briarwood. (c) First Assignments of Leases and Rents dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation, securing Briarwood. (d) Second Assignments of Leases and Rents dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation, securing Briarwood. (e) First Deeds of Trust Notes dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation securing Briarwood. (f) Second Deeds of Trust Notes dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation securing Briarwood. 10.13 Contracts related to refinancing of debt (a) First Deeds of Trust and Security Agreements dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation, securing Twin Lake Towers. (b) Second Deeds of Trust and Security Agreements dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation, securing Twin Lake Towers. (c) First Assignments of Leases and Rents dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation, securing Twin Lake Towers. (d) Second Assignments of Leases and Rents dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation, securing Twin Lake Towers. (e) First Deeds of Trust Notes dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation securing Twin Lake Towers. (f) Second Deeds of Trust Notes dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation securing Twin Lake Towers. 10.14 Contracts related to refinancing of debt (a) First Deeds of Trust and Security Agreements dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation, securing Hunters Glen. (b) Second Deeds of Trust and Security Agreements dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation, securing Hunters Glen. (c) First Assignments of Leases and Rents dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation, securing Hunters Glen. (d) Second Assignments of Leases and Rents dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation, securing Hunters Glen. (e) First Deeds of Trust Notes dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation securing Hunters Glen. (f) Second Deeds of Trust Notes dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation securing Hunters Glen. 10.15 Contracts related to refinancing of debt. (a) First Deeds of Trust and Security Agreements dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation, securing Chambers Ridge. (b) Second Deeds of Trust and Security Agreements dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation, securing Chambers Ridge. (c) First Assignments of Leases and Rents dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation, securing Chambers Ridge. (d) Second Assignments of Leases and Rents dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation, securing Chambers Ridge. (e) First Deeds of Trust Notes dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation securing Chambers Ridge. (f) Second Deeds of Trust Notes dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation securing Chambers Ridge. 10.16 Contracts related to refinancing of debt (a) First Deeds of Trust and Security Agreements dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation, securing Gateway Gardens. (b) Second Deeds of Trust and Security Agreements dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation, securing Gateway Gardens. (c) First Assignments of Leases and Rents dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation, securing Gateway Gardens. (d) Second Assignments of Leases and Rents dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation, securing Gateway Gardens. (e) First Deeds of Trust Notes dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation securing Gateway Gardens. (f) Second Deeds of Trust Notes dated September 30, 1993 between AP XII Associates Limited Partnership, a South Carolina Limited Partnership and Lexington Mortgage Company, a Virginia Corporation securing Gateway Gardens. 16.1 Letter from the Registrant's former independent accountant regarding its concurrence with the statements made by the Registrant is incorporated by reference to the Exhibit filed with Form 8-K dated September 1, 1993. 27 Financial Data Schedule is filed as an Exhibit to this report. 99.1 Agreement of Limited Partnership for Angeles Partners XII GP Limited Partnership and Angeles Partners XII entered into September 9, 1993. 99.2 Agreement of Limited Partnership for AP XII Associates Limited Partnership and Angeles Partners XII entered into September 9, 1993. 99.3 Agreement of Limited Partnership for Hunters Glen AP XII Limited Partnership and Angeles Partners XII entered into September 17, 1993. EX-27 2
5 This schedule contains summary financial information extracted from Angeles Partners XII 1996 Year-End 10-KSB and is qualified in its entirety by reference to such 10-KSB filing. 0000720392 ANGELES PARTNERS XII 1,000 12-MOS DEC-31-1996 DEC-31-1996 4,827 0 165 183 0 0 99,165 55,811 53,430 0 72,756 0 0 0 (22,590) 53,430 0 21,321 0 0 23,056 0 6,538 (1,802) 0 (1,802) 0 0 0 (1,802) (39.85) 0 Registrant has an unclassified balance sheet.
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