<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
---------
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended September 30, 1996
[_] 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 0-10430
DE ANZA PROPERTIES - XII, LTD.
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-3601367
(State or other jurisdiction of (IRS Employer Iden-
incorporation or organization) tification Number)
9171 WILSHIRE BOULEVARD, SUITE 627
BEVERLY HILLS, CALIFORNIA 90210
(Address of principal executive offices, including zip code)
(310) 550-1111
(The registrant's telephone number, including area code)
NO CHANGE
(Former name, former address and former fiscal year,
if changed since last report)
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 (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 X NO ___
---
Pursuant to the Securities Exchange Act of 1934 Release 15502 and Rule
240.0-3(b) (17 CFR 240.0-3(b)), the pages of this document have been numbered
sequentially. The total number of pages contained herein is 17.
1
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TABLE OF CONTENTS
-----------------
<TABLE>
<S> <C> <C>
PART I. FINANCIAL INFORMATION
- ------ ---------------------
ITEM 1. FINANCIAL STATEMENTS
Balance Sheets 3
Statements of Operations 5
Statements of Changes in Partners'
Capital (Deficit) 7
Statements of Cash Flows 8
Notes to Financial Statements 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS 14
PART II. OTHER INFORMATION 16
- ------- -----------------
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DE ANZA PROPERTIES - XII, LTD.
(A Limited Partnership)
Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------- ------------
<S> <C> <C>
ASSETS
CASH AND CASH EQUIVALENTS - including
restricted deposits of $159,096 and
$188,097 at September 30, 1996 and
December 31, 1995, respectively - Note 1 $ 757,720 $ 671,430
ACCOUNTS RECEIVABLE 8,099 8,346
PREPAID EXPENSES 54,375 43,115
----------- -----------
820,194 722,891
----------- -----------
NOTES RECEIVABLE - Note 5 342,057 476,985
----------- -----------
PROPERTY AND EQUIPMENT - Notes 2, 5 and 6
Land 1,184,605 1,184,605
Land improvements 3,430,357 3,234,282
Buildings and improvements 9,933,168 9,933,168
Furniture and equipment 454,735 440,317
----------- -----------
15,002,865 14,792,372
Less accumulated depreciation 6,996,051 6,540,758
----------- -----------
8,006,814 8,251,614
----------- -----------
OTHER ASSETS
Loan costs - less accumulated amortization
of $18,386 and $13,519 at September 30, 1996
and December 31, 1995, respectively 78,948 83,815
Other 4,420 5,136
----------- -----------
83,368 88,951
----------- -----------
$ 9,252,433 $ 9,540,441
=========== ===========
</TABLE>
See accompanying notes to financial statements.
3
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DE ANZA PROPERTIES - XII, LTD.
(A Limited Partnership)
Balance Sheets (Continued)
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------- ------------
<S> <C> <C>
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
ACCOUNTS PAYABLE AND ACCRUED EXPENSES -
including $12,891 and $8,644 due to
related parties at September 30, 1996
and December 31, 1995, respectively $ 229,027 $ 170,016
DEPOSITS AND ADVANCE RENTALS 49,296 53,641
DEFERRED GAIN ON SALE - Note 6 159,096 188,097
MANAGEMENT AND CONDOMINIUM CONVERSION
FEES PAYABLE TO AFFILIATE OR RELATED PARTY -
Note 3 881,945 796,331
SECURED NOTE PAYABLE - Note 2 4,233,885 4,261,943
----------- -----------
5,553,249 5,470,028
----------- -----------
PARTNERS' CAPITAL (DEFICIT)
General partners (1,650,824) (1,652,362)
Limited partners, 22,719 units issued
and outstanding 5,350,008 5,722,775
----------- -----------
3,699,184 4,070,413
----------- -----------
$ 9,252,433 $ 9,540,441
=========== ===========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
DE ANZA PROPERTIES - XII, LTD.
(A Limited Partnership)
Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, September 30,
1996 1995
------------- -------------
<S> <C> <C>
INCOME
Rent $1,685,231 $1,671,845
Interest and dividends 44,506 47,423
Other 36,412 24,730
Gain on sale of property and equipment
- Note 6 29,001 42,000
---------- ----------
1,795,150 1,785,998
---------- ----------
EXPENSES
Depreciation and amortization 460,160 443,073
Interest 237,442 236,497
Maintenance, repairs and supplies 187,954 190,323
Salaries - including $13,759 and
$15,820 paid to related parties
in 1996 and 1995, respectively -
Note 3 146,917 149,398
Utilities 134,275 137,390
Professional fees and services -
including $47,766 and $54,698 paid
to related parties in 1996 and 1995,
respectively - Note 3 125,372 109,870
Real estate taxes 114,940 96,622
Management fees accrued to related
parties - Note 3 85,614 84,775
Other 69,356 68,916
Insurance 48,363 51,066
Payroll taxes and employee benefits 30,986 26,690
---------- ----------
1,641,379 1,594,620
---------- ----------
NET INCOME $ 153,771 $ 191,378
========== ==========
NET INCOME
GENERAL PARTNERS $ 1,538 $ 1,914
========== ==========
LIMITED PARTNERS $ 152,233 $ 189,464
========== ==========
INCOME PER 1% GENERAL
PARTNER INTEREST - Note 4 $ 15.38 $ 19.14
========== ==========
INCOME PER LIMITED
PARTNERSHIP UNIT - Note 4 $ 6.70 $ 8.34
========== ==========
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
DE ANZA PROPERTIES - XII, LTD.
(A Limited Partnership)
Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
September 30, September 30,
1996 1995
------------- -------------
<S> <C> <C>
INCOME
Rent $580,574 $561,844
Interest and dividends 15,132 16,809
Other 8,735 15,638
Gain on sale of property and equipment
- Note 6 29,001 -
-------- --------
633,442 594,291
-------- --------
EXPENSES
Depreciation and amortization 153,387 147,691
Interest 78,223 82,797
Maintenance, repairs and supplies 56,672 68,567
Salaries - including $4,253 and $5,384
paid to related parties in 1996 and
1995, respectively - Note 3 49,410 52,288
Utilities 43,797 47,395
Professional fees and services -
including $16,406 and $16,421 paid
to related parties in 1996 and 1995,
respectively - Note 3 33,080 25,167
Real estate taxes 39,055 38,874
Management fees accrued to related
parties - Note 3 29,453 28,389
Other 25,009 32,921
Insurance 15,818 16,953
Payroll taxes and employee benefits 10,192 8,833
-------- --------
534,096 549,875
-------- --------
NET INCOME $ 99,346 $ 44,416
======== ========
NET INCOME
GENERAL PARTNERS $ 993 $ 444
======== ========
LIMITED PARTNERS $ 98,353 $ 43,972
======== ========
INCOME PER 1% GENERAL
PARTNER INTEREST - Note 4 $ 9.93 $ 4.44
======== ========
INCOME PER LIMITED
PARTNERSHIP UNIT - Note 4 $ 4.33 $ 1.94
======== ========
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
DE ANZA PROPERTIES - XII, LTD.
(A Limited Partnership)
Statements of Changes in Partners' Capital (Deficit)
(Unaudited)
For the Nine Months Ended September 30, 1996 and
For the Year Ended December 31, 1995
<TABLE>
<CAPTION>
General Limited
Total Partners Partners
----------- ------------ -----------
<S> <C> <C> <C>
BALANCE - January 1, 1995 $4,640,780 $(1,654,328) $6,295,108
DISTRIBUTIONS TO PARTNERS (767,000) - (767,000)
NET INCOME - for the year
ended December 31, 1995 196,633 1,966 194,667
---------- ----------- ----------
BALANCE - December 31,
1995 4,070,413 (1,652,362) 5,722,775
DISTRIBUTIONS TO PARTNERS (525,000) - (525,000)
NET INCOME - for the nine
months ended September 30,
1996 153,771 1,538 152,233
---------- ----------- ----------
BALANCE - September 30, 1996 $3,699,184 $(1,650,824) $5,350,008
========== =========== ==========
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
DE ANZA PROPERTIES - XII, LTD.
(A Limited Partnership)
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, September 30,
1996 1995
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Gross rents received from real estate
operations $1,679,250 $ 1,930,645
Cash paid to suppliers and employees -
including $65,194 and $75,665
paid to related parties in 1996
and 1995, respectively (807,505) (1,048,306)
Interest paid (238,503) (235,082)
Interest and other income received 81,671 45,865
---------- -----------
Net cash provided by
operating activities 714,913 693,122
---------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment (210,493) (320,223)
Payments received on notes receivable 134,928 6,940
Sales and closing costs - (3,575)
---------- -----------
Net cash used in
investing activities (75,565) (316,858)
---------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions to partners (525,000) (550,000)
Principal payments on secured
notes payable (28,058) (13,589)
---------- -----------
Net cash used in
financing activities (553,058) (563,589)
---------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 86,290 (187,325)
CASH AND CASH EQUIVALENTS:
BALANCE AT BEGINNING OF PERIOD 671,430 912,914
---------- -----------
BALANCE AT END OF PERIOD $ 757,720 $ 725,589
========== ===========
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
DE ANZA PROPERTIES - XII, LTD.
(A Limited Partnership)
Statements of Cash Flows (Continued)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, September 30,
1996 1995
-------------- --------------
<S> <C> <C>
RECONCILIATION OF NET INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES
Net income $153,771 $ 191,378
Adjustments to reconcile net income
to net cash provided by
operating activities
Depreciation and amortization 460,160 443,073
Gain on sale of property and equipment (29,001) (42,000)
Changes in operating assets and
liabilities
Decrease in accounts receivable 247 244,737
Increase in prepaid expenses (11,260) (13,679)
Decrease in other assets 716 -
Increase (decrease) in accounts payable
and accrued expenses 59,011 (202,937)
Decrease in deposits and advance
rentals (4,345) (12,225)
Increase in management and
condominium conversion fees
payable to affiliate 85,614 84,775
-------- ---------
Net cash provided by
operating activities $714,913 $ 693,122
======== =========
</TABLE>
SUPPLEMENTAL DISCLOSURE
- -----------------------
During the nine months ended September 30, 1995, the MHC cash reserve of $42,000
was released from restricted cash and the Partnership recognized a gain on that
portion of the 1994 sale proceeds.
During the nine months ended September 30, 1996, $29,001 of the Independent
Committee cash reserve was released from restricted cash and the Partnership
recognized a gain on that portion of the 1994 sale proceeds.
See accompanying notes to financial statements.
9
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DE ANZA PROPERTIES - XII, LTD.
(A Limited Partnership)
Notes to Financial Statements
(Unaudited)
September 30, 1996 and December 31, 1995 and
For the Nine and Three Months Ended September 30, 1996 and 1995
NOTE 1 - BASIS OF PRESENTATION
The accompanying financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Regulation S-X.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) have been included.
Operating results during the nine and three months ended September 30,
1996 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1996. For further
information, refer to the financial statements and footnotes thereto
included in the Partnership's annual report on Form 10-K for the year
ended December 31, 1995.
Cash and Cash Equivalents
-------------------------
The Partnership invests its cash not needed for working capital in
highly liquid short-term investments consisting primarily of money
market funds and certificates of deposit, with original maturities
ranging generally from one to three months. The Partnership considers
all such items to be cash equivalents.
NOTE 2 - SECURED NOTE PAYABLE
Secured note payable at September 30, 1996 and December 31, 1995
consisted of:
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------- ------------
<S> <C> <C>
Note collateralized by a first trust
deed, payable in monthly installments
of $26,476, including interest until
December 15, 1994. Thereafter, the
monthly payment changes annually on
each December 15th. Interest accrued
at 6.25% until February 15, 1994, and
thereafter floats at 2.5% over the
FHLB's 11th District Cost of Funds
Index, not to exceed 12.9%, adjusted
monthly. Unpaid principal and accrued
interest are due November 15, 2008.
The interest rate in effect at
September 30, 1996 and December 31,
1995 was 7.32% and 7.62%, respectively. $4,233,885 $4,261,943
---------- ----------
</TABLE>
10
<PAGE>
DE ANZA PROPERTIES - XII, LTD.
(A Limited Partnership)
Notes to Financial Statements (Continued)
(Unaudited)
September 30, 1996 and December 31, 1995 and
For the Nine and Three Months Ended September 30, 1996 and 1995
NOTE 3 - TRANSACTIONS WITH RELATED PARTIES
Pursuant to a former management agreement dated October 1, 1985, as
amended, De Anza Assets, Inc., a former affiliate of the operating
general partner (OGP), was paid a management fee in the amount of 5%
of the annual gross receipts from the operations of the Partnership's
properties. The payment of this fee is subordinated to the priority
distribution to the limited partners of 7% of their adjusted capital
contributions each year and is noncumulative, except in the case of a
sale, refinancing or other disposition of the Partnership's
properties. In that case, the difference between the management fee
actually paid and the management fee that would have been paid if it
were not subordinated is payable out of proceeds of the sale,
refinancing or other disposition after payment of the limited
partners' priority return and capital contribution and the general
partners' incentive interest. However, management fees payable
subsequent to a consummated refinancing are not subordinated to the
limited partners' priority return to the extent the subordination
would have been caused by increased debt service charges. At September
30, 1996 and December 31, 1995, cumulative accrued fees of $565,022 to
De Anza Assets, Inc. have been subordinated and are included in
management and condominium conversion fees payable to affiliate or
related party, as reflected in the balance sheets. Shortly before its
sale to an affiliate of Manufactured Home Communities, Inc. (MHC), as
discussed in Note 6, De Anza Assets, Inc. assigned its rights to
receipt of these fees to the Gelfand Family Trust.
On August 18, 1994, subsequent to the sale of the Mark and the
property management business of De Anza Group, Inc. (DAG), as
discussed in Note 6, the property management of Warner Oaks and the
two remaining spaces at San Luis Bay was assumed by Terra Vista
Management, Inc. (Terra Vista). Terra Vista is wholly owned by Michael
D. Gelfand, president of the OGP and the son of Herbert M. Gelfand.
Herbert M. Gelfand, together with Beverly Gelfand, is the sole
shareholder of the OGP and an individual general partner. Management
fees of $85,614 and $84,775 were accrued but not paid to Terra Vista
for the nine months ended September 30, 1996 and 1995, respectively.
Of the $85,614, $29,453 is attributable to the three months ended
September 30, 1996 (compared to $28,389 accrued for the three months
ended September 30, 1995). At September 30, 1996 and December 31,
1995, cumulative accrued fees to Terra Vista of $239,114 and $153,500,
respectively, have been subordinated and are included in management
and condominium conversion fees payable to affiliate or related
parties, as reflected in the balance sheets. The Gelfand Family Trust
has agreed to share any payment to be made to the Gelfand Family Trust
for deferred management fees equally with Terra Vista until Terra
Vista has been paid all outstanding deferred management fees.
11
<PAGE>
DE ANZA PROPERTIES - XII, LTD.
(A Limited Partnership)
Notes to Financial Statements (Continued)
(Unaudited)
September 30, 1996 and December 31, 1995 and
For the Nine and Three Months Ended September 30, 1996 and 1995
NOTE 3 - TRANSACTIONS WITH RELATED PARTIES (Continued)
Pursuant to the partnership agreement, a condominium conversion fee
equal to 1% of the sales price of the San Luis Bay homesites sold is
due to an affiliate of the OGP (see Note 5). Payment of this fee has
been deferred pursuant to the partnership agreement's requirement
regarding subordination to payment of the limited partners' priority
return and capital contribution, the general partners' incentive
interest and deferred management fees. Subordinated cumulative accrued
fees of $77,809 have been included in management and condominium
conversion fees payable to affiliate or related party at September 30,
1996 and December 31, 1995, as reflected in the balance sheets.
Shortly before the sale to MHC, De Anza Assets, Inc. assigned its
rights to receive these fees to the Gelfand Family Trust.
In addition, Terra Vista or an affiliate of the OGP was paid $65,194
and $75,665 during the nine months ended September 30, 1996 and 1995,
respectively, for performing bookkeeping, legal, regional management,
computer and investor relations services necessary for the operation
of the Partnership and its properties. Of the $65,194, $21,679 is
attributable to the three months ended September 30, 1996 (compared to
$24,813 paid for the three months ended September 30, 1995).
NOTE 4 - INCOME PER 1% GENERAL PARTNER INTEREST AND LIMITED PARTNERSHIP UNIT
Income per limited partnership unit is computed based on the limited
partners' share of net income as shown on the Statements of Income and
Changes in Partners' Capital (Deficit) and the number of limited
partnership units outstanding (22,719 units). The general partners'
share of net income has not been included in this computation. Income
per 1% general partner interest is computed based on the general
partners' share of net income as shown on the Statements of Operations
and Changes in Partners' Capital (Deficit).
NOTE 5 - SALE OF SAN LUIS BAY MOBILE ESTATES
On May 2, 1989, the Partnership entered into an agreement to sell San
Luis Bay Mobile Estates (the 162-space mobile home community in Avila
Beach, California) to the residents for an aggregate sales price of
$8,850,000 and, pursuant to that agreement, subdivided the property
into condominium units in 1991. The Partnership provided purchase
money financing for up to 80% of the individual homesite price,
payable in monthly payments, including interest at 10%, based on a
loan amortization schedule of 30 years, with a balloon payment of
unpaid principal and interest due at the end of seven years. At
September 30, 1996 and December 31, 1995, respectively, the
outstanding amounts due under such notes totaled $342,057 and
$476,985. Those residents who purchased their homesites for cash
received a 10% discount off their purchase price. The Partnership sold
160 homesites prior to 1995. The remaining two homesites are leased to
tenants.
12
<PAGE>
DE ANZA PROPERTIES - XII, LTD.
(A Limited Partnership)
Notes to Financial Statements (Continued)
(Unaudited)
September 30, 1996 and December 31, 1995 and
For the Nine and Three Months Ended September 30, 1996 and 1995
NOTE 6 - SALE OF THE MARK
On August 18, 1994 the Partnership sold The Mark to an affiliate of
MHC, a real estate investment trust, as part of an overall transaction
for the sale of the related management business of DAG and other
mobile home communities affiliated with DAG.
The sales price for The Mark was $5,404,419. Additional proceeds of
$130,094, which were included in the sales price for calculating the
gain on sale of property and equipment, were received from MHC to fund
a General Reserve. In connection with the sale, the Partnership
established various reserves totaling $230,097.
The $230,097 was used to establish the following cash reserves:
<TABLE>
<S> <C>
MHC Reserve $ 42,000
General Reserve 130,094
Independent Committee Reserve 58,003
</TABLE>
The MHC Reserve was required by MHC and released in May 1995.
Accordingly, the gain on sale has been recognized and included in net
income for the nine months ended September 30, 1995. The General
Reserve and Independent Committee Reserve were established to fund
contingent liabilities that may arise out of the MHC transaction. In
August 1996, $29,001 of the Independent Committee Reserve was
released. Thus, the gain on sale has been recognized and included in
net income for the nine months ended September 30, 1996.
Pursuant to the guidelines of Financial Accounting Standards No. 66,
"Accounting for Sales of Real Estate," the Partnership deferred in
1994 the recognition of gain on that portion of the sales proceeds,
represented by the MHC Reserve, General Reserve and Independent
Committee Reserve, totaling $230,097. As these reserves are released
or expended, gain on sale will be recognized. At September 30, 1996,
and December 31, 1995, $159,096 and $188,097, respectively, of sale
proceeds have been deferred and are included in deferred gain on sale,
as reflected in the balance sheets.
13
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity
- ---------
The Partnership's quick ratios were 1.9:1 and 2.1:1, including unrestricted
cash balances of $598,624 and $483,333 at September 30, 1996 and December 31,
1995, respectively. The increase in cash is due mainly to the receipt of notes
receivable prepayments. The Partnership's cash balance is its immediate source
of liquidity.
On a long-term basis, the Partnership's liquidity is sustained primarily from
cash flows from operations, which during the nine months ended September 30,
1996 were approximately $715,000. Cash flow from operations has improved
substantially following the August 1994 sale of The Mark (see Note 6 to the
Financial Statements). The Partnership has reinstated regular operating
distributions to its partners though payment of the management fees continues to
be deferred in accordance with the Partnership Agreement.
Subsequent to the sale of The Mark, the Partnership continues to operate
Warner Oaks, the remaining property, which is managed by Terra Vista. The
Partnership also owns two spaces at San Luis Bay Mobile Estates and various
notes receivables related to that sale (see Note 5 to the Financial Statements).
As a result of the sale of The Mark, the Partnership's liquidity has improved.
The Mark's income fell short of its expenses, thus with the property sold, the
Partnership's income has improved which has improved liquidity. However, should
it become necessary to improve liquidity further, the Partnership can reduce
partner distributions, which totaled $525,000 during the nine months ended
September 30, 1996, arrange a short-term line of credit or refinance Warner
Oaks.
In November 1993, the Partnership refinanced Warner Oaks with a variable
interest rate loan. The interest rate for the initial three months was 6.25%,
thereafter the loan bears interest at 250 basis points over the Eleventh
District Cost of Funds with caps on the maximum annual payment change of 7.5% of
the current payment, and an interest rate cap of 12.9% over the life of the
loan. This loan is subject to negative amortization. Future liquidity will be
affected, unfavorably or favorably, to the extent the payment rate fluctuates.
At September 30, 1996, the interest rate in effect was 7.32%.
The Partnership has sold 160 of 162 spaces at San Luis Bay as of September 30,
1996 (see Note 5 to the Financial Statements). Liquidity is expected to improve
as the notes receivable from the buyers of San Luis Bay spaces mature, as
discussed in Note 5 to the Financial Statements. As of September 30, 1996, the
amount of the notes receivable outstanding was approximately $342,000.
Liquidity also improves when the notes receivable are prepaid and when
additional spaces are sold.
Other than as described elsewhere, there are no known trends, demands,
commitments, events or uncertainties which are reasonably likely to materially
affect the Partnership's liquidity.
14
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
Capital Resources
- -----------------
The Partnership anticipates spending approximately $244,000 in 1996 for
physical improvements at Warner Oaks, approximately $34,000 of which will be
spent during the remainder of 1996. Funds for these improvements will be
provided by cash generated from operations.
Other than as described above, there are no known material trends, favorable or
unfavorable, in the Partnership's capital resources. The Partnership does not
contemplate any other material changes in the mix of its capital resources,
other than as described above.
Results of Operations
- ---------------------
Rental income increased 0.8% and 3.3% during the nine and three months ended
September 30, 1996, over the same periods in 1995, primarily due to improved
third quarter occupancy but also due to higher rental rates and reduced
uncollectible rent. These income increases were offset in part by lower
occupancy in the first half of 1996 and increased rent incentives to improve
occupancy.
Other income increased due to a negative earthquake insurance proceeds
adjustment in 1995 not repeated in 1996 and increased partner transfer fees in
1996.
Expenses increased 2.9% during the nine months ended September 30, 1996 and
decreased 2.9% during the three months ended September 30, 1996 over the same
periods in 1995. Because of the April 1996 tender offer by Moraga Gold, LLC,
professional fees and services increased, comprised of higher legal fees. Real
estate taxes were higher because 1995 included a refund of 1994 taxes in
connection with the reassessment of Warner Oaks following the 1994 earthquake.
Additionally, depreciation and amortization expense increased in 1996 as a
result of depreciation of capitalized costs placed in service during 1995. The
increases were offset in part by lower costs for maintenance, repairs and
supplies in the third quarter of 1996 largely as a result of air conditioning
repairs prompted by an extended heat-wave in 1995 not repeated in 1996.
Other than as described above, there are no known trends or uncertainties
which have had or can be reasonably expected to have a material effect on
continuing operations.
15
<PAGE>
PART II. OTHER INFORMATION
ITEM NUMBER
- -----------
1. LEGAL PROCEEDINGS
No new material legal proceedings were commenced during the three months
ended September 30, 1996 and there are none pending.
2. CHANGES IN SECURITIES
None.
3. DEFAULTS UPON SENIOR SECURITIES
None.
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
5. OTHER INFORMATION
None.
6. EXHIBITS AND REPORTS ON FORM 8-K
None.
16
<PAGE>
PART II. OTHER INFORMATION (Continued)
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.
DE ANZA PROPERTIES - XII, LTD.
(Registrant)
By DE ANZA CORPORATION
A California Corporation
Operating General Partner
Date: November 13, 1996 By /s/ Michael D. Gelfand
----------------------
Michael D. Gelfand
President and
Chief Financial Officer
17
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 757,720
<SECURITIES> 0
<RECEIVABLES> 8,099
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 820,194
<PP&E> 15,002,865
<DEPRECIATION> 6,996,051
<TOTAL-ASSETS> 9,252,433
<CURRENT-LIABILITIES> 315,323
<BONDS> 4,233,885
0
0
<COMMON> 0
<OTHER-SE> 3,699,184
<TOTAL-LIABILITY-AND-EQUITY> 9,252,433
<SALES> 1,685,231
<TOTAL-REVENUES> 1,795,150
<CGS> 0
<TOTAL-COSTS> 943,777
<OTHER-EXPENSES> 460,160
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 237,442
<INCOME-PRETAX> 153,771
<INCOME-TAX> 0
<INCOME-CONTINUING> 153,771
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 153,771
<EPS-PRIMARY> 6.70<F1>
<EPS-DILUTED> 6.70<F1>
<FN>
<F1>EPS is per Limited Partner Unit
</FN>
</TABLE>
