-----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, R/KqxGuf0xYjPHGiBRoqsFkJA6IwYP3FQ5zNSRR4GlasDFyOSugAx+xut25AbHV2 TDf5cQlr22o7CRHk9zEpcw== 0000750334-96-000005.txt : 19960515 0000750334-96-000005.hdr.sgml : 19960515 ACCESSION NUMBER: 0000750334-96-000005 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 REAL ESTATE FUND XX L P CENTRAL INDEX KEY: 0000750334 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 330050225 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14007 FILM NUMBER: 96563412 BUSINESS ADDRESS: STREET 1: 13760 NOEL RD SUITE 700 LB70 CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 2144485800 MAIL ADDRESS: STREET 2: 13760 NOEL ROAD SUITE 700 LB 70 CITY: DALLAS STATE: TX ZIP: 75240 FORMER COMPANY: FORMER CONFORMED NAME: SOUTHMARK INCOME INVESTORS LTD DATE OF NAME CHANGE: 19920413 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 0-14007 MCNEIL REAL ESTATE FUND XX, L.P. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) California 33-0050225 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 13760 Noel Road, Suite 700, LB70, Dallas, Texas, 75240 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (214) 448-5800 ------------------------------ Indicate by check mark whether the registrant, (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No___ MCNEIL REAL ESTATE FUND XX, L.P. PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS - ---------------------------- BALANCE SHEETS (Unaudited)
March 31, December 31, 1996 1995 --------------- -------------- ASSETS - ------ Real estate investments: Land..................................................... $ 699,697 $ 699,697 Buildings and improvements............................... 6,123,527 6,119,787 -------------- ------------- 6,823,224 6,819,484 Less: Accumulated depreciation.......................... (1,177,733) (1,093,107) -------------- ------------- 5,645,491 5,726,377 Mortgage loan investments, net of allowance of $792,013 at March 31, 1996 and December 31, 1995........................................ 3,504,474 3,537,436 Mortgage loan investment - affiliate........................ 733,900 733,900 Cash and cash equivalents .................................. 3,456,079 3,927,223 Cash segregated for security deposits....................... 65,309 59,869 Interest and other accounts receivable...................... 70,940 77,480 Escrow deposits............................................. 174,440 144,844 Deferred borrowing costs, net of accumulated amortization of $34,767 and $31,264 at March 31, 1996 and December 31, 1995, respectively................. 126,727 130,230 Prepaid expenses and other assets........................... 26,677 8,590 -------------- ------------- $ 13,804,037 $ 14,345,949 ============== ============= LIABILITIES AND PARTNERS' EQUITY (DEFICIT) Mortgage note payable, net.................................. $ 2,750,096 $ 2,760,961 Accounts payable and other accrued expenses................. 50,438 120,293 Accrued property taxes...................................... 159,134 123,530 Payable to affiliates - General Partner..................... 68,565 32,849 Deferred revenue............................................ 168,819 170,475 Security deposits and deferred rental revenue............... 61,629 58,213 -------------- ------------- 3,258,681 3,266,321 -------------- ------------- Partners' equity (deficit): Limited partners - 60,000 limited partnership units authorized; 49,512 limited partnership units issued and outstanding at March 31, 1996 and December 31, 1995...................................... 10,864,729 11,399,658 General Partner.......................................... (319,373) (320,030) -------------- ------------- 10,545,356 11,079,628 -------------- ------------- $ 13,804,037 $ 14,345,949 ============== =============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. McNEIL REAL ESTATE FUND XX, L.P. STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended March 31, --------------------------------- 1996 1995 -------------- --------------- Revenue: Rental revenue............................................... $ 362,907 $ 328,983 Interest income on mortgage loan investments................. 71,014 68,220 Interest income on mortgage loan investment - affiliate................................ 15,304 15,137 Other interest income........................................ 46,830 50,453 Total revenue.............................................. 496,055 462,793 Expenses: Interest..................................................... 62,881 63,421 Depreciation................................................. 84,626 81,207 Property taxes............................................... 48,076 46,788 Personnel costs.............................................. 36,984 49,543 Utilities.................................................... 19,710 20,333 Repairs and maintenance...................................... 31,135 29,783 Property management fees -affiliates......................... 16,885 15,500 Other property operating expenses............................ 18,734 19,671 General and administrative................................... 28,099 16,610 General and administrative -affiliates....................... 83,222 95,479 Total expenses............................................. 430,352 438,335 Net income..................................................... $ 65,703 $ 24,458 ============= ============= Net income allocable to limited partners....................... $ 65,046 $ 24,213 Net income allocable to General Partner........................ 657 245 ------------- ------------- Net income..................................................... $ 65,703 $ 24,458 ============= ============= Net income per limited partnership unit........................ $ 1.31 $ .49 ============= ============= Distributions per limited partnership unit..................... $ 12.12 $ 5.05 ============= =============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. MCNEIL REAL ESTATE FUND XX, L.P. STATEMENTS OF PARTNERS' EQUITY (DEFICIT) (Unaudited) For the Three Months Ended March 31, 1996 and 1995
Total General Limited Partners' Partner Partners Equity --------------- -------------- --------------- Balance at December 31, 1994.............. $ (320,671) $ 11,586,184 $ 11,265,513 Net income................................ 245 24,213 24,458 Distributions............................. - (250,001) (250,001) ------------- ------------- ------------- Balance at March 31, 1995................. $ (320,426) $ 11,360,396 $ 11,039,970 ============= ============= ============= Balance at December 31, 1995.............. $ (320,030) $ 11,399,658 $ 11,079,628 Net income................................ 657 65,046 65,703 Distributions............................. - (599,975) (599,975) ------------- ------------- ------------- Balance at March 31, 1996................. $ (319,373) $ 10,864,729 $ 10,545,356 ============= ============= =============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. MCNEIL REAL ESTATE FUND XX, L.P. 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........................ $ 371,445 $ 340,881 Cash paid to suppliers............................ (224,008) (118,172) Cash paid to affiliates........................... (64,391) (107,373) Interest received................................. 116,244 138,982 Interest received from affiliates................. 12,221 12,221 Interest paid..................................... (57,555) (58,551) Property taxes paid............................... (12,472) (5,767) Property taxes escrowed........................... (29,100) (36,678) ------------------ -------------- Net cash provided by operating activities............ 112,384 165,543 ----------------- -------------- Cash flows from investing activities: Additions to real estate investments.............. (3,740) (10,942) Collection of principal on mortgage loan investments..................................... 32,962 39,280 ----------------- -------------- Net cash provided by investing activities............ 29,222 28,338 ----------------- -------------- Cash flows from financing activities: Principal payments on mortgage note payable....... (12,775) (11,779) Distributions paid................................ (599,975) (250,001) ----------------- -------------- Net cash used in financing activities................ (612,750) (261,780) ----------------- -------------- Net decrease in cash and cash equivalents............ (471,144) (67,899) Cash and cash equivalents at beginning of period............................................ 3,927,223 3,734,020 ----------------- -------------- Cash and cash equivalents at end of period........... $ 3,456,079 $ 3,666,121 ================= ==============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. MCNEIL REAL ESTATE FUND XX, L.P. STATEMENTS OF CASH FLOWS (Unaudited) Reconciliation of Net Income to Net Cash Provided by Operating Activities
Three Months Ended March 31, ---------------------------------------- 1996 1995 ---------------- ---------------- Net income........................................... $ 65,703 $ 24,458 --------------- --------------- Adjustments to reconcile net income to net cash provided by operating activities: Depreciation...................................... 84,626 81,207 Amortization of deferred borrowing costs.......... 3,503 3,185 Amortization of discount on mortgage note payable......................................... 1,910 1,765 Changes in assets and liabilities: Cash segregated for security deposits........... (5,440) (6,284) Interest and other accounts receivable.......... 6,540 (9,746) Escrow deposits................................. (29,596) (34,729) Prepaid expenses and other assets............... (18,087) 6,623 Accounts payable and other accrued expenses...................................... (69,855) 9,611 Accrued property taxes.......................... 35,604 41,021 Payable to affiliates - General Partner......... 35,716 3,606 Deferred revenue................................ (1,656) 25,941 Security deposits and deferred rental revenue....................................... 3,416 18,885 --------------- -------------- Total adjustments............................. 46,681 141,085 --------------- -------------- Net cash provided by operating activities............ $ 112,384 $ 165,543 =============== ==============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. MCNEIL REAL ESTATE FUND XX, L.P. Notes to Financial Statements March 31, 1996 (Unaudited) NOTE 1. - ------- McNeil Real Estate Fund XX, L.P. (the "Partnership"), formerly known as Southmark Income Investors, Ltd., was organized on July 19, 1984 as a limited partnership under the provisions of the California Revised Uniform Limited Partnership Act. The general partner of the Partnership is McNeil Partners, L.P. (the "General Partner"), a Delaware limited partnership, an affiliate of Robert A. McNeil ("McNeil"). The principal place of business for the Partnership and the General Partner is 13760 Noel Road, Suite 700, 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 Real Estate Fund XX, L.P., c/o McNeil Real Estate Management, Inc., Investor Services, 13760 Noel Road, Suite 700, Dallas, Texas 75240. NOTE 3. - ------- The Partnership pays property management fees equal to 5% of the gross rental receipts for its properties to McNeil Real Estate Management, Inc. ("McREMI"), an affiliate of the General Partner, for providing property management services. The Partnership reimburses McREMI for its costs, including overhead, of administering the Partnership's affairs. The Partnership is paying an asset management fee which is payable to the General Partner. Through 1999, the asset management fee is calculated as 1% of the Partnership's tangible asset value. Tangible asset value is determined by using the greater of (i) an amount calculated by applying a capitalization rate of 9% to the annualized net operating income of each property, (ii) a value of $10,000 per apartment unit or (iii) on 1130 Sacramento, the net book value of the property is used to arrive at the property tangible asset value. The property tangible asset value is then added to the book value of all other assets excluding intangible items. The fee percentage decreases subsequent to 1999. 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............................. $ 16,885 $ 15,500 Charged to general and administrative - affiliates: Partnership administration........................ 40,881 53,417 Asset management fee.............................. 42,341 42,062 --------------- -------------- $ 100,107 $ 110,979 =============== ==============
Payable to affiliates - General Partner at March 31, 1996 and December 31, 1995 consisted primarily of unpaid property management fees, Partnership general and administrative expenses and asset management fees and are due and payable from current operations. NOTE 4. - ------- Martha Hess, et al. v. Southmark Equity Partners II, Ltd., Southmark Income Investors, Ltd., Southmark Equity Partners, Ltd. (presently known as McNeil Real Estate Fund XXIV, L.P.), Southmark Realty Partners III, Ltd., and Southmark Realty Partners II, Ltd., et al. ("Hess"); Kotowski v. Southmark Equity Partners, Ltd. and Donald Arceri v. Southmark Income Investors, Ltd. The Hess case was filed on May 20, 1988, by Martha Hess, individually and on behalf of a putative class of those similarly situated. The original, first, second and third amended complaints in Hess sought rescission, pursuant to the Illinois Securities Act, of over $2.7 million of principal invested in five Southmark (now McNeil) partnerships, and other relief including damages for breach of fiduciary duty and violation of the Illinois Consumer Fraud and Deceptive Business Practices Act. The original, first, second and third amended complaints in Hess were dismissed against the defendant-group because the Appellate Court held that they were not the proper subject of a class action complaint. Hess was, thereafter, amended a fourth time to state causes of action against unrelated partnership entities. Hess went to judgment against that entity and the judgment, along with the prior dismissals of the class action, was appealed. The claims against the Partnership were dismissed by the Appellate Court. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND - ------- --------------------------------------------------------------- RESULTS OF OPERATIONS --------------------- FINANCIAL CONDITION - ------------------- There has been no significant change in the operations of Sterling Springs Apartments or 1130 Sacramento Condominiums since December 31, 1995. The Partnership reported net income of $65,703 for the first three months of 1996 as compared to net income of $24,458 for the same period in 1995. Revenues in 1996 increased to $496,055 from $462,793 in 1995, while expenses were $430,352 in 1996 as compared to $438,335 in 1995. Net cash provided by operating activities was $112,384 for the three months ended March 31, 1996, a change from the $165,543 provided during the same three month period in 1995. The Partnership expended $3,740 for capital improvements, made $12,775 in principal payments on its mortgage note payable, and collected $32,962 of principal on mortgage loan investments. After distributions of $599,975 to the limited partners, cash and cash equivalents totaled $3,456,079 at March 31, 1996, a net decrease of $471,144 from the balance at December 31, 1995. RESULTS OF OPERATIONS - --------------------- Revenue: Total revenue increased by $33,262 for the three month period ended March 30, 1996 as compared to the same period in 1995. The increase was mainly due to an increase in rental revenue, as discussed below. Rental revenue for the three months ended March 31, 1996 increased by $33,924 as compared to the same period in 1995. The increase was due to an increase in rental rates at Sterling Springs Apartments in July 1995 and again in March 1996. Expenses: Total expenses for the three months ended March 31, 1996 decreased by $7,983 as compared to the same period in 1995. The decrease was due to a decrease in personnel costs and general and administrative - affiliates, offset by an increase in general and administrative expenses, as discussed below. Personnel costs decreased by $12,559 for the three months ended March 31, 1996 as compared to the same period in 1995. The decrease was mainly due to a worker's compensation insurance refund received on Sterling Springs Apartments; the result of an audit performed on prior years' workers' compensation insurance. General and administrative expense increased by $11,489 for the three months ended March 31, 1996 as compared to the same period in 1995. The increase was mainly due to the Partnership incurring approximately $12,000 of costs in 1996 to defend class action litigation. General and administrative - affiliates decreased by $12,257 for the three months ended March 31, 1996 as compared to the same period in 1995. The decrease was mainly due to a decrease in overhead expenses allocated to the Partnership by McREMI. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- The Partnership generated $112,384 through operating activities for the first three months of 1996 as compared to $165,543 for the first three months of 1995. The decrease in 1996 was mainly due to an increase in cash paid to suppliers, the result of outstanding accounts payables in 1995 paid in the first quarter of 1996. Short-term liquidity: At March 31, 1996, the Partnership held cash and cash equivalents of $3,456,079. This balance provides a reasonable level of working capital for the Partnerships immediate needs in operating its properties. In 1996, operations of Sterling Springs Apartments and 1130 Sacramento are expected to provide sufficient positive cash flow for normal operations. Management will perform routine repairs and maintenance on the properties to preserve and enhance their value and competitiveness in the market. The Partnership has budgeted to spend approximately $38,000 on capital improvements to its properties in 1996, which are expected to be funded from operations of the properties. For 1996, management expects that cash from operations of its properties and principal and interest collections on the mortgage loan investments, along with the present balance of cash and cash equivalents held, will allow the Partnership to meet its obligations as they come due. The Partnership distributed $599,975 to the limited partners in the first quarter of 1996. At the present time, the Partnership anticipates making additional distributions to the limited partners in 1996. Management is currently reviewing cash requirements to determine the amount and timing of such distributions. Long-term liquidity: Only one property, Sterling Springs Apartments, is encumbered with mortgage debt. The mortgage on this property is not due until 2003. In the event that the Partnership acquires ownership of other properties through foreclosure, the cash and cash equivalent balances presently held will provide a source for the maintenance and improvement of the properties. Because the timing and number of properties which may be foreclosed is uncertain, there is no assurance that the balances presently held will be sufficient for needed capital improvements. At present, there are no commitments nor any known needs for improvements to the properties securing the Partnership's loans. The Partnership has no existing lines of credit from outside sources. 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. Borrowings under the facility may be used to fund deferred maintenance, refinancing obligations and working capital needs. There is no assurance that the Partnership will receive any funds under the facility because no amounts are 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 existing borrowings. This commitment will terminate on March 30, 1997. Another possible source of funds is the sale of the Partnership's mortgage loan investments or properties securing the Partnership's mortgage loans. Such sales are possibilities only, and since the Partnership does not control the properties securing its loans, sales of those properties may occur only if initiated by the borrower or in the event of foreclosure by the Partnership. There is no assurance that any sales can be contracted or closed to coincide with the Partnership's future cash needs. For the long term, the Partnership will remain dependent on operations of the properties it owns or of the properties securing its loans as the primary source of debt repayment, until the properties can be sold. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS - ------- ----------------- Martha Hess, et al. v. Southmark Equity Partners II, Ltd., Southmark Income Investors, Ltd., Southmark Equity Partners, Ltd. (presently known as McNeil Real Estate Fund XXIV, L.P.), Southmark Realty Partners III, Ltd., and Southmark Realty Partners II, Ltd., et al. ("Hess"); Kotowski v. Southmark Equity Partners, Ltd. and Donald Arceri v. Southmark Income Investors, Ltd. The Hess case was filed on May 20, 1988, by Martha Hess, individually and on behalf of a putative class of those similarly situated. The original, first, second and third amended complaints in Hess sought rescission, pursuant to the Illinois Securities Act, of over $2.7 million of principal invested in five Southmark (now McNeil) partnerships, and other relief including damages for breach of fiduciary duty and violation of the Illinois Consumer Fraud and Deceptive Business Practices Act. The original, first, second and third amended complaints in Hess were dismissed against the defendant-group because the Appellate Court held that they were not the proper subject of a class action complaint. Hess was, thereafter, amended a fourth time to state causes of action against unrelated partnership entities. Hess went to judgment against that entity and the judgment, along with the prior dismissals of the class action, was appealed. The claims against the Partnership were dismissed by the Appellate Court. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ------- -------------------------------- (a) Exhibits. Exhibit Number Document Description -------- -------------------- 4. Amended and Restated Limited Partnership Agreement dated March 30, 1992. (Incorporated by reference to the Current Report of the registrant on Form 8-K dated March 30, 1992, as filed on April 10, 1992). 11. Statement regarding computation of Net Income per Limited Partnership Unit: Net income (loss) per limited partnership unit is computed by dividing net income (loss) allocated to the limited partners by the weighted average number of limited partnership units outstanding. Per unit information has been computed based on 49,512 limited partnership units outstanding in 1996 and 1995. 27. Financial Data Schedule for the quarter ended March 31, 1996. (b) Reports on Form 8-K. There were no reports on Form 8-K filed during the quarter ended March 31, 1996. MCNEIL REAL ESTATE FUND XX, L.P. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized: McNEIL REAL ESTATE FUND XX, L.P. 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/ Carol A. Fahs - ------------------- ------------------------------------------- Date Carol A. Fahs Chief Accounting Officer of McNeil Real Estate Management, Inc. EX-27 2
5 3-MOS DEC-31-1996 MAR-31-1996 3,456,079 0 0 0 0 0 6,823,224 (1,177,733) 13,804,037 0 2,750,096 0 0 0 0 13,804,037 362,907 496,055 0 0 367,471 0 62,881 0 0 65,703 0 0 0 65,703 0 0
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