-----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, CO+6b1+idgm0LB/UMY3aY4rB5dmqSEwVI66WTsn3U81RMY11IWL3JQMgzIA112T4 4GdHWs18emUP8PwDoQRMeQ== 0000751044-97-000007.txt : 19970814 0000751044-97-000007.hdr.sgml : 19970814 ACCESSION NUMBER: 0000751044-97-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970813 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MCNEIL REAL ESTATE FUND XV LTD /CA CENTRAL INDEX KEY: 0000751044 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 942941516 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14258 FILM NUMBER: 97658513 BUSINESS ADDRESS: STREET 1: 13760 NOEL RD STE 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 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 June 30, 1997 ---------------------------------------------------- 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 0-14258 -------- MCNEIL REAL ESTATE FUND XV, LTD. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) California 94-2941516 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 13760 Noel Road, Suite 600, LB70, Dallas, Texas 75240 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (972) 448-5800 ----------------------------- Indicate by check mark whether the registrant, (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- MCNEIL REAL ESTATE FUND XV, LTD. PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS - ------- -------------------- BALANCE SHEETS (Unaudited)
June 30, December 31, 1997 1996 --------------- -------------- ASSETS - ------- Real estate investments: Land..................................................... $ 7,087,195 $ 7,087,195 Buildings and improvements............................... 45,710,052 45,563,139 -------------- ------------- 52,797,247 52,650,334 Less: Accumulated depreciation.......................... (23,433,319) (22,398,841) -------------- ------------- 29,363,928 30,251,493 Cash and cash equivalents................................... 1,047,074 1,362,812 Cash segregated for security deposits....................... 242,693 263,255 Accounts receivable......................................... 337,452 188,831 Prepaid expenses and other assets........................... 42,500 43,266 Escrow deposits............................................. 554,310 310,888 Deferred borrowing costs (net of accumulated amortization of $296,817 and $248,892 at June 30, 1997 and December 31, 1996, respectively)............................................ 712,515 760,440 -------------- ------------- $ 32,300,472 $ 33,180,985 ============== ============= LIABILITIES AND PARTNERS' EQUITY (DEFICIT) - ------------------------------------------ Mortgage notes payable, net................................. $ 23,670,204 $ 23,857,021 Accrued property taxes...................................... 393,017 149,324 Accrued expenses............................................ 111,628 166,600 Accrued interest............................................ 165,141 170,447 Deferred gain - involuntary conversion...................... 92,710 97,210 Payable to affiliates - General Partner..................... 57,369 99,892 Security deposits and deferred rental revenue............... 254,526 247,849 -------------- ------------- 24,744,595 24,788,343 -------------- ------------- Partners' equity (deficit): Limited partners - 120,000 limited partnership units authorized; 102,796 and 102,836 limited partnership units issued and outstanding at June 30, 1997 and December 31, 1996, respectively.................... 7,963,762 8,812,479 General Partner.......................................... (407,885) (419,837) -------------- -------------- 7,555,877 8,392,642 -------------- -------------- $ 32,300,472 $ 33,180,985 ============== ==============
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 XV, LTD. STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, --------------------------------- --------------------------------- 1997 1996 1997 1996 -------------- --------------- -------------- -------------- Revenue: Rental revenue................ $ 1,987,828 $ 2,005,020 $ 3,937,483 $ 3,974,553 Interest...................... 12,467 25,857 29,576 52,447 ------------- ------------- ------------- ------------- Total revenue............... 2,000,295 2,030,877 3,967,059 4,027,000 ------------- ------------- -------------- ------------- Expenses: Interest...................... 533,638 540,383 1,069,472 1,081,884 Depreciation.................. 517,239 509,294 1,034,478 1,014,401 Property taxes................ 111,285 113,943 222,570 228,226 Personnel expenses............ 206,525 203,120 449,765 442,565 Utilities..................... 68,481 76,748 180,999 171,816 Repair and maintenance........ 305,695 251,094 519,301 449,259 Property management fees - affiliates........... 100,264 102,539 201,523 202,483 Other property operating expenses.................... 105,707 120,099 229,901 230,531 General and administrative.... 32,121 21,684 71,917 54,449 General and administrative - affiliates.................. 38,209 55,064 75,735 111,081 ------------- ------------- ------------- ------------- Total expenses.............. 2,019,164 1,993,968 4,055,661 3,986,695 ------------- ------------- ------------- ------------- Net income (loss)................ $ (18,869) $ 36,909 $ (88,602) $ 40,305 ============= ============= ============ ============= Net loss allocable to limited partners...................... $ (163,397) $ (204,021) $ (348,713) $ (200,625) Net income allocable to General Partner............... 144,528 240,930 260,111 240,930 ------------- ------------- ------------ ------------- Net income (loss)................ $ (18,869) $ 36,909 $ (88,602) $ 40,305 ============= ============= ============ ============= Net loss per limited partnership unit.............. $ (1.59) $ (1.98) $ (3.39) $ (1.95) ============= ============ ============ ============= Distribution per limited partnership unit.............. $ - $ - $ 4.96 $ 4.86 ============= ============ ============ =============
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 XV, LTD. STATEMENTS OF PARTNERS' EQUITY (DEFICIT) (Unaudited) For the Six Months Ended June 30, 1997 and 1996
Total General Limited Partners' Partner Partners Equity --------------- ---------------- --------------- Balance at December 31, 1995.............. $ (356,792) $ 10,394,645 $ 10,037,853 Net income (loss)......................... 240,930 (200,625) 40,305 Management Incentive Distribution......... (257,848) - (257,848) Limited partner distribution.............. - (499,991) (499,991) ------------- ------------- ------------- Balance at June 30, 1996.................. $ (373,710) $ 9,694,029 $ 9,320,319 ============= ============== ============== Balance at December 31, 1996.............. $ (419,837) $ 8,812,479 $ 8,392,642 Net income (loss)......................... 260,111 (348,713) (88,602) Management Incentive Distribution......... (248,159) - (248,159) Limited partner distribution.............. - (500,004) (500,004) ------------- ------------- ------------- Balance at June 30, 1997.................. $ (407,885) $ 7,963,762 $ 7,555,877 ============= ============== ==============
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 XV, LTD. STATEMENTS OF CASH FLOWS (Unaudited) Increase (Decrease) in Cash and Cash Equivalents
Six Months Ended June 30, 1997 1996 ------------------- ---------------- Cash flows from operating activities: Cash received from tenants........................ $ 3,816,463 $ 3,988,453 Cash paid to suppliers............................ (1,529,492) (1,339,337) Cash paid to affiliates........................... (297,484) (314,120) Interest received................................. 29,576 52,447 Interest paid..................................... (995,982) (1,012,742) Property taxes paid............................... (207,605) (221,309) ------------------ -------------- Net cash provided by operating activities............ 815,476 1,153,392 ----------------- -------------- Net cash used in investing activities: Additions to real estate investments.............. (146,913) (415,606) ------------------ -------------- Cash flows from financing activities: Principal payments on mortgage notes payable......................................... (213,841) (197,082) Management Incentive Distribution................. (270,456) (251,074) Limited partner distribution...................... (500,004) (499,991) ------------------ -------------- Net cash used in financing activities................ (984,301) (948,147) ----------------- -------------- Net decrease in cash and cash equivalents............ (315,738) (210,361) Cash and cash equivalents at beginning of period............................................ 1,362,812 2,079,352 ----------------- -------------- Cash and cash equivalents at end of period........... $ 1,047,074 $ 1,868,991 ================= ==============
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 XV, LTD. STATEMENTS OF CASH FLOWS (Unaudited) Reconciliation of Net Income (Loss) to Net Cash Provided by Operating Activities
Six Months Ended June 30, ---------------------------------------- 1997 1996 ----------------- --------------- Net income (loss).................................... $ (88,602) $ 40,305 --------------- -------------- Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation...................................... 1,034,478 1,014,401 Amortization of discounts on mortgage notes payable................................... 27,024 25,657 Amortization of deferred borrowing costs.......... 47,925 44,830 Changes in assets and liabilities: Cash segregated for security deposits........... 20,562 (2,008) Accounts receivable............................. (148,621) (4,687) Prepaid expenses and other assets............... 766 (621) Escrow deposits................................. (243,422) (7,580) Accounts payable................................ - 80,336 Accrued property taxes.......................... 222,570 63,351 Accrued expenses................................ (42,196) (114,109) Accrued interest................................ (1,459) (1,345) Payable to affiliates - General Partner......... (20,226) (556) Security deposits and deferred rental revenue....................................... 6,677 15,418 --------------- -------------- Total adjustments............................. 904,078 1,113,087 --------------- -------------- Net cash provided by operating activities............ $ 815,476 $ 1,153,392 =============== ==============
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 XV, LTD. Notes to Financial Statements (Unaudited) June 30, 1997 NOTE 1. - ------- McNeil Real Estate Fund XV, Ltd. (the "Partnership") was organized June 26, 1984 as a limited partnership organized under the provisions of the California Uniform Limited Partnership Act. The general partner of the Partnership is McNeil Partners, L.P. (the "General Partner"), a Delaware limited partnership, an affiliate of Robert A. McNeil. The Partnership is governed by an amended and restated limited partnership agreement, dated October 11, 1991 (the "Amended Partnership Agreement"). The principal place of business for the Partnership and the General Partner is 13760 Noel Road, Suite 600, LB70, Dallas, Texas 75240. In the opinion of management, the financial statements reflect all adjustments necessary for a fair presentation of the Partnership's financial position and results of operations. All adjustments were of a normal recurring nature. However, the results of operations for the six months ended June 30, 1997 are not necessarily indicative of the results to be expected for the year ending December 31, 1997. 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, 1996, and the notes thereto, as filed with the Securities and Exchange Commission, which is available upon request by writing to McNeil Real Estate Fund XV, Ltd., c/o The Herman Group, 2121 San Jacinto St., 26th Floor, Dallas, Texas 75201. NOTE 3. - ------- The Partnership pays property management fees equal to 5% of gross rental receipts of the Partnership's properties to McNeil Real Estate Management, Inc. ("McREMI"), an affiliate of the General Partner, for providing property management services and leasing services. The Partnership reimburses McREMI for its costs, including overhead, of administering the Partnership's affairs. Under terms of the Amended Partnership Agreement, the Partnership is paying a Management Incentive Distribution ("MID") to the General Partner. The maximum MID is calculated as 1% of the tangible asset value of the Partnership. The maximum MID percentage decreases subsequent to 1999. Tangible asset value is determined by using the greater of (i) an amount calculated by applying a capitalization rate of 9% to the annualized net operating income of each property or (ii) a value of $10,000 per apartment unit to arrive at the property tangible asset value. The property tangible asset value is then added to the book value of all other assets excluding intangible items. MID will be paid to the extent of the lesser of the Partnership's excess cash flow, as defined, or net operating income, as defined ("the Entitlement Amount"), and may be paid (i) in cash, unless there is insufficient cash to pay the distribution in which event any unpaid portion not taken in limited partnership units ("Units") will be deferred and is payable, without interest, from the first available cash and/or (ii) in Units. A maximum of 50% of the MID may be paid in Units. The number of Units issued in payment of the MID is based on the greater of $50 per Unit or the net tangible asset value, as defined, per Unit. Any amount of the MID that is paid to the General Partner in Units will be treated as if cash is distributed to the General Partner and is then contributed to the Partnership by the General Partner. The MID represents a return of equity to the General Partner for increasing cash flow, as defined, and accordingly is treated as a distribution. Compensation, reimbursements and distributions paid to or accrued for the benefit of the General Partner and its affiliates are as follows: Six Months Ended June 30, ----------------------- 1997 1996 ---------- ---------- Property management fees - affiliates................ $ 201,523 $ 202,483 Charged to general and administrative - affiliates: Partnership administration........................ 75,735 111,081 --------- --------- $ 277,258 $ 313,564 ========= ========= Charged to General Partner's deficit: MID............................................... $ 248,159 $ 257,848 ========= ========= ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND - ------- --------------------------------------------------------------- RESULTS OF OPERATIONS --------------------- FINANCIAL CONDITION - ------------------- The Partnership is engaged in real estate activities, including the ownership, operation and management of residential and other real estate related assets. At June 30, 1997, the Partnership owned four apartment properties. Three of the four Partnership's properties are subject to mortgage notes. RESULTS OF OPERATIONS - --------------------- Revenue: Partnership revenues decreased by $59,941 for the six months ended June 30, 1997, as compared to the same period last year. Rental revenue and interest income decreased by $37,070 and $22,871, respectively. Rental revenue for the first six months of 1997 was $3,937,483 as compared to $3,974,553 for the same period in 1996. The decrease in rental revenue of $37,070 is due to reduced rental rates at Mountain Shadows and a decrease in the occupancy rate at Cedar Run. Interest income for the six months decreased due to smaller average cash balances invested in interest-bearing accounts. Expenses: Partnership expenses increased by $68,966 or 2% for the six months ended June 30, 1997. Increases in repairs and maintenance, and general and administrative expense were offset by a decrease in general and administrative-affiliates expense. Repairs and maintenance expense for the six months ended June 30, 1997 increased by $70,042 or 16% compared to the same period in 1996. The increase is due to the replacement of carpeting, which met the Partnership's criteria for capitalization based on the magnitude of replacements in 1996, but were expensed in 1997. General and administrative expenses increased $17,468 or 32% for the first six months of 1997 as compared to the same period last year. Costs incurred for investor services were paid to an unrelated third party in 1997. In the first quarter of 1996, these costs were paid to an affiliate of the General Partner and were included in general and administrative - affiliates. General and administrative - affiliates expense decreased by $35,346 or 32% for the first six months of 1997 as compared to the same period last year due to the reduction of overhead expenses allocable to the Partnership. Allocated expenses decreased in part due to investor services being performed by an unrelated third party in 1997, as discussed above. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- The Partnership's primary source of cash flows is from operating activities which generated $815,476 of cash in the first six months of 1997 as compared to $1,153,392 for the same period in 1996. The decrease in cash of $337,916 was mainly the result of an decrease in cash received from tenants and an increase in cash paid to suppliers. The Partnership expended $146,913 and $415,606 for capital improvements to its properties in the first six months of 1997 and 1996, respectively. During the first six months of 1997, the Partnership paid $213,841 in principal payments on the mortgage notes, distributions of $500,004 to the limited partners and MID payments of $270,456. Short-term liquidity: At June 30, 1997, the Partnership held cash and cash equivalents of $1,047,074, down $315,738 from the balance at December 31, 1996. This balance provides a comfortable level of working capital for the Partnership's operations. During 1997, operations of the Partnership's properties are expected to provide positive cash flow from operations. Management will perform routine repairs and maintenance on the properties to preserve and enhance their value in the market. In 1997, the Partnership has budgeted to spend approximately $547,000 on capital improvements, which are expected to be funded from operations of the properties. Long-term liquidity: For the long-term, property operations will remain the primary source of funds. While the present outlook for Partnership's liquidity is favorable, market conditions may change and property operations can deteriorate. In that event, the Partnership would require other sources of working capital. No such other sources have been identified, and the Partnership has no established lines of credit. Other possible actions to resolve working capital deficiencies include refinancing or renegotiating terms of existing loans, deferring major capital expenditures on Partnership properties except where improvements are expected to enhance the competitiveness or marketability of the properties, or arranging working capital support from affiliates. All or a combination of these steps may be inadequate or unfeasible in resolving such potential working capital deficiencies. No affiliate support has been required in the past, and there is no assurance that support would be provided in the future, since neither the General Partner nor any affiliates have any obligation in this regard. The Partnership has determined to begin orderly liquidation of all its assets. Although there can be no assurance as to the timing of the liquidation due to real estate market conditions, the general difficulty of disposing of real estate, and other general economic factors, it is anticipated that such liquidation would result in the dissolution of the Partnership followed by a liquidating distribution to Unitholders by December 2001. In this regard, the Partnership has placed Cedar Run Apartments on the market for sale as of August 1, 1997. Income allocations and distributions: Terms of the Amended Partnership Agreement specify that income before depreciation is allocated to the General Partner to the extent of MID paid in cash. Depreciation is allocated in the ratio of 99:1 to the limited partners and the General Partner, respectively. Therefore, for the six months ended June 30, 1997 and 1996, $260,111 and $240,930, respectively, was allocated to the General Partner. The limited partners received allocations of $(348,713)and $(200,625)for the six months ended June 30, 1997 and 1996, respectively. During 1997, the limited partners received a cash distribution of $500,004. The distribution consisted of funds from operations. A distribution of $248,159 for the MID was accrued by the Partnership for the period ended June 30, 1997 for the General Partner. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS - ------- ----------------- James F. Schofield, Gerald C. Gillett, Donna S. Gillett, Jeffrey Homburger, Elizabeth Jung, Robert Lewis, and Warren Heller et al. v. McNeil Partners L.P., McNeil Investors, Inc., McNeil Real Estate Management, Inc., Robert A. McNeil, Carole J. McNeil, McNeil Pacific Investors Fund 1972, Ltd., McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XII, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund XXI, L.P., McNeil Real Estate Fund XXII, L.P., McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund XXV, L.P., McNeil Real Estate Fund XXVI, L.P., and McNeil Real Estate Fund XXVII, L.P., et al. - Superior Court of the State of California for the County of Los Angeles, Case No. BC133799 (Class and Derivative Action Complaint). The action involves purported class and derivative actions brought by limited partners of each of the fourteen limited partnerships that were named as nominal defendants as listed above (the "Partnerships"). Plaintiffs allege that McNeil Investors, Inc., its affiliate McNeil Real Estate Management, Inc. and three of their senior officers and/or directors (collectively, the "Defendants") breached their fiduciary duties and certain obligations under the respective Amended Partnership Agreement. Plaintiffs allege that Defendants have rendered such Units highly illiquid and artificially depressed the prices that are available for Units on the resale market. Plaintiffs also allege that Defendants engaged in a course of conduct to prevent the acquisition of Units by an affiliate of Carl Icahn by disseminating purportedly false, misleading and inadequate information. Plaintiffs further allege that Defendants acted to advance their own personal interests at the expense of the Partnerships' public unit holders by failing to sell Partnership properties and failing to make distributions to unitholders. On December 16, 1996, the Plaintiffs filed a consolidated and amended complaint. Plaintiffs are suing for breach of fiduciary duty, breach of contract and an accounting, alleging, among other things, that the management fees paid to the McNeil affiliates over the last six years are excessive, that these fees should be reduced retroactively and that the respective Amended Partnership Agreements governing the Partnerships are invalid. Defendants filed a demurrer to the consolidated and amended complaint and a motion to strike on February 14, 1997, seeking to dismiss the consolidated and amended complaint in all respects. A hearing on Defendant's demurrer and motion to strike was held on May 5, 1997. The Court granted Defendants' demurrer, dismissing the consolidated and amended complaint with leave to amend. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ------- -------------------------------- (a) Exhibits. Exhibit Number Description ------- ----------- 3.1 Amended and Restated Partnership Agreement dated October 11, 1991. (1) 11. Statement regarding computation of net loss per limited partnership unit: Net loss per limited partnership unit is computed by dividing net loss allocated to the limited partners by the number of limited partnership units outstanding. Per unit information has been computed based on 102,796 and 102,836 limited partnership units outstanding in 1997 and 1996, respectively. 27. Financial Data Schedule for the quarter ended June 30, 1997. (1) Incorporated by reference to the Annual Report of Registrant, on Form 10-K for the period ended December 31, 1991, as filed on March 30, 1992. (b) Reports on Form 8-K. There were no reports on Form 8-K filed during the quarter ended June 30, 1997. McNEIL REAL ESTATE FUND XV, LTD. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized: McNEIL REAL ESTATE FUND XV, Ltd. By: McNeil Partners, L.P., General Partner By: McNeil Investors, Inc., General Partner August 13, 1997 By: /s/ Ron K. Taylor - ------------------- ---------------------------------------- Date Ron K. Taylor President and Director of McNeil Investors, Inc. (Principal Financial Officer) August 13, 1997 By: /s/ Brandon K. Flaming - ------------------ --------------------------------------- Date Brandon K. Flaming Vice President of McNeil Investors, Inc. (Principal Accounting Officer) EX-27 2
5 6-MOS DEC-31-1997 JUN-30-1997 1,047,074 0 337,452 0 0 0 52,797,247 (23,433,319) 32,300,472 0 23,670,204 0 0 0 0 32,300,472 3,937,483 3,967,059 0 0 2,986,189 0 1,069,472 0 0 (88,602) 0 0 0 (88,602) 0 0
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