<PAGE>
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, 1994
------------------------------------------------------
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 0-10743
-------
MCNEIL REAL ESTATE FUND XII, LTD.
- - --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 94-2717957
- - --------------------------------------------------------------------------------
(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
--- ---
1
<PAGE>
MCNEIL REAL ESTATE FUND XII, LTD.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
- - ------ --------------------
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1994 1993
------------ -------------
<S> <C> <C>
ASSETS
- - ------
Real estate investments:
Land............................................. $ 7,083,014 $ 7,108,968
Building and improvements........................ 89,071,821 89,085,041
----------- -----------
96,154,835 96,194,009
Less: Accumulated depreciation and amortization.. (44,562,483) (43,889,170)
----------- -----------
51,592,352 52,304,839
Assets held for sale.............................. 11,202,122 11,421,936
Cash and cash equivalents ($251,064 and $347,986
segregated for security deposits at March 31,
1994 and December 31, 1993, respectively)........ 760,883 5,286,015
Accounts receivable, less allowance for doubtful
accounts of $36,410 at March 31, 1994 and
December 31, 1993................................ 473,742 381,737
Prepaid expenses and other assets................. 263,579 289,275
Escrow deposits................................... 1,892,978 1,504,609
Deferred borrowing costs, net of accumulated
amortization of $745,010 and $715,830 at March 31,
1994 and December 31, 1993, respectively......... 1,644,475 1,641,689
----------- -----------
$ 67,830,131 $ 72,830,100
=========== ===========
LIABILITIES AND PARTNERS' DEFICIT
- - ---------------------------------
Mortgage notes payable, net....................... $ 79,443,820 $ 79,867,507
Mortgage notes payable - affiliate................ -- 1,603,135
Accounts payable.................................. 661,753 647,869
Accrued expenses.................................. 18,629 128,240
Accrued interest.................................. 1,666,972 1,599,238
Accrued property taxes............................ 1,329,671 1,224,990
Advances from Southmark........................... 31,088 30,655
Advances from affiliates - General Partner........ 1,706,292 3,346,441
Payable to affiliates - General Partner........... 4,979,555 5,292,511
Security deposits and deferred rental income...... 699,477 684,379
----------- -----------
90,537,257 94,424,965
----------- -----------
Partners' deficit:
Limited partners - 240,000 limited partnership
units authorized; 230,584 and 230,817 limited
partnership units issued and outstanding at
March 31, 1994 and December 31, 1993,
respectively................................... (13,921,467) (13,138,511)
General Partner.................................. (8,785,659) (8,456,354)
----------- -----------
(22,707,126) (21,594,865)
----------- -----------
$ 67,830,131 $ 72,830,100
=========== ===========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
2
<PAGE>
MCNEIL REAL ESTATE FUND XII, LTD.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------------
1994 1993
----------- ------------
<S> <C> <C>
Revenue:
Rental revenue........................... $ 5,431,785 $ 5,897,134
Interest................................. 13,172 14,289
----------- -----------
Total revenue.......................... 5,444,957 5,911,423
----------- -----------
Expenses:
Interest................................. 1,867,880 2,363,195
Interest - affiliates.................... 31,005 86,914
Depreciation and amortization............ 1,145,877 1,169,652
Property taxes........................... 448,749 544,900
Personnel expenses....................... 718,484 656,593
Repairs and maintenance.................. 696,363 675,175
Property management fees - affiliates.... 267,973 296,821
Utilities................................ 599,702 616,520
Other property operating expenses........ 321,092 289,948
General and administrative............... 42,528 93,075
General and administrative - affiliates.. 129,468 251,701
----------- -----------
Total expenses......................... 6,269,121 7,044,494
----------- -----------
Net loss.................................. $ (824,164) $ (1,133,071)
=========== ===========
Net loss allocable to limited partners.... $ (782,956) $ (1,076,418)
Net loss allocable to General Partner..... (41,208) (56,653)
----------- -----------
Net loss.................................. $ (824,164) $ (1,133,071)
=========== ===========
Net loss per limited partnership unit..... $ (3.40) $ (4.66)
=========== ===========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
3
<PAGE>
MCNEIL REAL ESTATE FUND XII, LTD.
STATEMENTS OF PARTNERS' DEFICIT
(Unaudited)
For the Three Months Ended March 31, 1994 and 1993
<TABLE>
<CAPTION>
Total
General Limited Partners'
Partner Partners Deficit
------------- ------------- -------------
<S> <C> <C> <C>
Balance at December 31, 1992..... $ (7,473,458) $(17,108,329) $(24,581,787)
Net loss......................... (56,653) (1,076,418) (1,133,071)
Contingent Management Incentive
Distribution.................... (54,417) -- (54,417)
----------- ----------- -----------
Balance at March 31, 1993........ $ (7,584,528) $(18,184,747) $(25,769,275)
=========== =========== ===========
Balance at December 31, 1993..... $ (8,456,354) $(13,138,511) $(21,594,865)
Net loss......................... (41,208) (782,956) (824,164)
Contingent Management Incentive
Distribution.................... (288,097) -- (288,097)
----------- ----------- -----------
Balance at March 31, 1994........ $ (8,785,659) $(13,921,467) $(22,707,126)
=========== =========== ===========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
4
<PAGE>
MCNEIL REAL ESTATE FUND XII, LTD.
STATEMENTS OF CASH FLOWS
(Unaudited)
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------
1993 1992
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Cash received from tenants..................... $ 5,321,268 $ 5,969,826
Cash paid to suppliers......................... (2,329,260) (2,015,765)
Cash paid to affiliates........................ (998,494) (293,956)
Interest received.............................. 13,172 14,289
Interest paid.................................. (1,721,522) (2,178,157)
Interest paid to affiliates.................... (470,489) (24,522)
Property taxes paid............................ (817,767) (845,576)
----------- -----------
Net cash provided by (used in) operating
activities..................................... (1,003,092) 626,139
----------- -----------
Cash flows used in investing activities:
Additions to real estate investments........... (213,577) (470,745)
----------- -----------
Cash flows from financing activities:
Principal payments on mortgage notes
payable...................................... (472,698) (741,240)
Additions to deferred borrowing costs.......... (31,966) (35,737)
Mortgage loans from affiliates................. -- 793,535
Repayment of mortgage loans from affiliates.... (1,603,135) --
Advances from affiliates - General Partner..... 6,000 --
Repayment of advances from affiliates -
General Partner.............................. (1,206,664) --
----------- -----------
Net cash provided by (used in) financing
activities..................................... (3,308,463) 16,558
----------- -----------
Net increase (decrease) in cash and cash
equivalents.................................... (4,525,132) 171,952
Cash and cash equivalents at beginning of
period......................................... 5,286,015 665,160
----------- -----------
Cash and cash equivalents at end of period...... $ 760,883 $ 837,112
=========== ===========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
5
<PAGE>
MCNEIL REAL ESTATE FUND XII, LTD.
STATEMENTS OF CASH FLOWS
(Unaudited)
Reconciliation of Net Loss to Net Cash Provided by
Operating Activities
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------------
1994 1993
------------- -------------
<S> <C> <C>
Net loss.................................... $ (824,164) $ (1,133,071)
----------- -----------
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation and amortization.............. 1,145,877 1,169,652
Amortization of deferred borrowing costs... 29,180 69,673
Amortization of discounts on mortgage
notes payable............................. 49,011 72,082
Net interest added on advances from
affiliates - General Partner.............. 23,904 62,392
Net interest added on advances from
Southmark................................. 433 432
Changes in assets and liabilities:
Accounts receivable....................... (92,005) 13,584
Prepaid expenses and other assets......... 25,696 32,246
Escrow deposits........................... (388,369) (477,456)
Accounts payable.......................... 13,884 267,765
Accrued expenses.......................... (109,611) 16,066
Accrued interest.......................... (395,654) 42,852
Accrued property taxes.................... 104,681 157,902
Payable to affiliates - General Partner... (601,053) 254,565
Security deposits and deferred rental
income................................... 15,098 77,455
----------- -----------
Total adjustments........................ (178,928) 1,759,210
----------- -----------
Net cash provided by operating activities... $ (1,003,092) $ 626,139
=========== ===========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
6
<PAGE>
McNEIL REAL ESTATE FUND XII, LTD.
Notes to Financial Statements
(Unaudited)
March 31, 1994
NOTE 1.
- - ------
McNeil Real Estate Fund XII, Ltd. (the "Partnership") was organized February 2,
1981 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 ("McNeil"). The Partnership is governed by an
amended and restated limited partnership agreement, dated September 6, 1991 (the
"Amended Partnership Agreement"). The principal place of business for the
Partnership and the General Partner is 13760 Noel Road, Suite 700, LB70, Dallas,
Texas, 75240.
In the opinion of management, the financial statements reflect all adjustments
necessary for a fair presentation of the Partnership's financial position and
results of operations. All adjustments were of a normal recurring nature.
However, the results of operations for the three months ended March 31, 1994 are
not necessarily indicative of the results to be expected for the year ending
December 31, 1994.
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, 1993, and the notes thereto, as filed with the
Securities and Exchange Commission, which is available upon request by writing
to McNeil Real Estate Fund XII, Ltd. c/o McNeil Real Estate Management, Inc.,
Investor Services, 13760 Noel Road, Suite 700, LB70, Dallas, Texas 75240.
NOTE 3.
- - ------
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. The Partnership has suffered
recurring losses from operations and has a net Partners' deficit that raise
substantial doubt about its ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
NOTE 4.
- - ------
Certain reclassifications have been made to prior period amounts to conform with
current period presentation.
NOTE 5.
- - ------
The Partnership pays property management fees equal to 5% of the 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 for the Partnership's residential and commercial properties
and leasing services for its residential properties. McREMI may choose to
provide leasing services for the Partnership's commercial properties, in which
case McREMI will receive a property management fee from such commercial
properties equal to 3% of the property's gross rental receipts plus commissions
based on the prevailing market rate for such services where the property is
located.
The Partnership reimburses McREMI for its costs, including overhead, of
administering the Partnership's affairs.
Affiliates of the General Partner have advanced funds to the Partnership to meet
working capital requirements. These advances and mortgage loans accrue interest
at a rate equal to the prime lending rate plus 1%.
7
<PAGE>
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.
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
for residential property and $50 per gross square foot for commercial property
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. Prior to July 1, 1993, the MID consists of two components: (i) the
fixed portion which is payable without respect to the net income of the
Partnership and is equal to 25% of the maximum MID (the "Fixed MID") and (ii) a
contingent portion which is payable only to the extent of the lesser of the
Partnership's excess cash flow, as defined, or net operating income (the
"Entitlement Amount") and is equal to up to 75% of the maximum MID (the
"Contingent MID"). The maximum MID percentage decreases subsequent to 1999.
The General Partner amended the Amended Partnership Agreement as a settlement to
a class action complaint. This amendment eliminates the Fixed MID portion and
makes the entire MID payable to the extent of the Entitlement Amount. In all
other respects the calculation and payment of the MID will remain the same.
This modified MID became effective July 1, 1993.
Fixed MID was payable in limited partnership units ("Units") unless the
Entitlement Amount exceeded the amount necessary to pay the Contingent MID in
which case, at the General Partner's option, the Fixed MID could have been paid
in cash to the extent of such excess.
Contingent MID will be paid to the extent of 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 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 Fixed MID is treated as a fee
payable to the General Partner by the Partnership for services rendered. The
Contingent MID is treated as a distribution to the General Partner.
Compensation and reimbursements paid to or accrued for the benefit of the
General Partner and its affiliates are as follows:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------
1994 1993
--------- ---------
<S> <C> <C>
Charged to other assets:
Prepaid expenses........................ $ -- $ 1,571
Property management fees - affiliates.... 267,973 296,821
Interest - affiliates.................... 31,005 86,914
Charged to general and administrative -
affiliates:
Partnership administration.............. 129,468 155,141
Fixed MID............................... -- 96,560
--------- ---------
$ 428,446 $ 637,007
========= =========
Charged to General Partner's deficit:
Contingent MID.......................... $ 288,097 $ 54,417
========= =========
</TABLE>
8
<PAGE>
NOTE 5.
- - ------
The mortgages encumbering two of the Partnership's properties, Channingway and
Village East, contain provisions which may give the lenders the right to
accelerate the mortgage debt as a result of the approved restructuring. The
General Partner has requested that the lenders waive their right to accelerate
the mortgage debt. The lenders may require the payment of fees or additional
interest as a condition to granting such waiver. In the event the waiver is not
obtained as to any mortgage, and the mortgage debt is accelerated, the
Partnership will be required to satisfy the outstanding mortgage debt, which
approximated $16 million at March 31, 1994. In such event, the Partnership will
attempt to arrange alternative sources of mortgage financing. However, any such
refinancing may be at an interest rate which is higher or is otherwise on terms
which are less favorable than those provided by the current mortgage.
Furthermore, if alternative financing cannot be obtained, each lender could
foreclose on the property securing its mortgage amount.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- - ------ ---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
FINANCIAL CONDITION
- - -------------------
The Partnership was formed to acquire, operate and ultimately dispose of a
portfolio of income-producing properties. At March 31, 1994, the Partnership
owned nine apartment properties and two shopping centers. All of the
Partnership's properties are subject to mortgage notes.
There has been no significant change in financial condition of the Partnership
since December 31, 1993. The Partnership reported a net loss of $824,164 for
the first three months of 1994 as compared to a net loss of $1,133,071 for the
same period in 1993. Revenues in 1994 were $5,444,957 as compared to $5,911,423
in 1993, while expenses decreased to $6,269,121 from $7,044,494.
Net cash used in operating activities was $1,003,092 for the period. After
expenditures of $213,577 for capital improvements, $423,687 in principal
payments on mortgage notes, and $31,331 in deferred borrowing costs plus payment
of mortgage loans and advances from affiliates of $2,803,799, the net decrease
in cash of $4,525,132 was deducted from cash and cash equivalents, giving a
balance of $760,883 at March 31, 1994 as compared to $837,112 at March 31, 1993.
The balances of cash and cash equivalents held at March 31, 1994 include
$251,064 for tenant security deposits held in interest bearing accounts, whereas
at December 31, 1993, $347,986 was segregated.
There has been no significant change in the operations of the Partnership's
properties since December 31, 1993. See "Revenue" and "Expenses" below for
additional information regarding changes between years.
RESULTS OF OPERATIONS
- - ---------------------
Revenue:
Rental revenue for the first three months of 1994 was $5,431,785 as compared to
$5,897,134 for the same period in 1993. This decrease of $465,349 or 7.9% is
primarily due to the loss of $862,647 in rental revenue generated from Cedar
Mill Crossing, which was sold in December 1993. This decrease was offset by
rental increases at ten of the remaining eleven properties and an overall
average increase in occupancy rates.
Expenses:
Partnership expenses decreased by $775,373 for the first three months of 1994 as
compared to the same period last year primarily due to the sale of Cedar Mill
Crossing. The effects from this transaction were declines of $327,794 for
interest, $106,770 for depreciation, $83,098 for property taxes, $48,079 for
personnel expenses, $79,549 for repairs and maintenance, $43,410 for property
management fees - affiliates, $91,423 for utilities and $44,828 other property
operating expenses.
9
<PAGE>
In addition to the sale of Cedar Mill Crossing, other factors affected the
level of expenses reported by the remaining properties. Interest expense
decreased $167,954 or 8.3% due to the refinancing of the mortgage note payable
at Brendon Way, and the reduction of the mortgage principal balance through the
sale of a parcel of land at Plaza Westlake in 1993. Interest expense -
affiliates decreased by $55,910 or 64.3% for the first three months of 1994 as
compared to the same period in 1993 due to the repayment of affiliate loans and
advances.
Depreciation expense increased by $82,995 or 7.8% for the three months ended
March 31, 1994 as compared to the same period in 1993 due to the increase in
capital improvements made at the properties.
Personnel expenses increased by $109,970 or 18% for the first three months of
1994 as compared to the same period in 1994 due to additional part-time staff,
an increase in maintenance employee hours, and an increase in incentive bonus'
paid.
Repairs and maintenance increased by $101,170 or 17% for the first three months
of 1994 as compared to the same period in 1993 due to increases in grounds
maintenance, snow removal and expenses associated with preparing vacated units
for occupancy.
Utilities increased by $74,605 or 14.2% for the first three months of 1994 as
compared to the same period in 1993 primarily relates to the increase in overall
occupancy at the properties, resulting in an increase in the usage of utilities
by the properties.
Other property operating increased by $75,971 for the first three months of 1994
as compared to the same period in 1993 primarily due to increases in
professional services, bad debt and hazard insurance.
General and administrative decreased by $50,547 or 54.3% for the first three
months of 1994 as compared to the same period in 1993 primarily due to a
reduction in tax preparation costs incurred by the partnership in 1994.
General and administrative - affiliates decreased $122,233 or 48.6% for the
first three months of 1994 as compared to 1993, primarily due to an amendment to
the Amended Partnership agreement which eliminated the Fixed MID effective July
1993.
LIQUIDITY AND CAPITAL RESOURCES
- - -------------------------------
At March 31, 1994, the Partnership held cash and cash equivalents of $760,883
(of which $251,064 was segregated for tenant security deposits), down $5,286,016
from the balance at December 31, 1993. In January, the Partnership paid
$2,400,000 to the General Partner for repayment of advances, accrued interest
and fees. Also, the Partnership repaid all mortgage loans to McNeil Real Estate
Fund XXVII, L.P. ("Fund XXVII") totaling $1,603,135.
The Partnership's working capital needs have been supported by advances from
affiliates during the past several years. Some of that support was provided on
a short-term basis to meet monthly operating requirements, with repayment
occurring as funds became available; other advances were longer term in nature
due to lack of funds for repayment. The General Partner has also allowed the
Partnership to defer payment of Contingent MID and reimbursements until such
time as the Partnership's cash reserves allow payments. Finally, the
Partnership operations have also been supported by affiliate funding in the
form of mortgage notes payable. As previously discussed, $2,809,799 of these
advances and loans were repaid in January 1994. The Partnership also repaid
$1,193,336 in accrued interest and Fixed MID in January 1994.
Operations of the Partnership's properties in 1994, however, are not expected to
provide significant levels of cash necessary to complete routine repairs,
maintenance, and capital improvements and replacements to preserve and enhance
the value of the properties. The Partnership holds $398,538 in escrow accounts
for property improvements at specific properties. Because of the low level of
cash reserves after the January 1994 payments made to affiliates, capital
expenditures other than those which can be recovered from the escrow accounts
will be closely reviewed before any funds are committed. No expenditures are
expected to exceed the revenues that the properties earn from operations.
10
<PAGE>
During 1994, the Partnership is faced with mortgage principal payments and
mortgage maturities on Fox Run, Millwood Park and Village East, totalling
approximately $7,938,000. It is management's policy to negotiate extensions of
such maturities when possible. Management is currently negotiating refinancing
for Village East. Additionally, the Partnership is faced with approximately
$27,275,000 of mortgage principal payments and mortgage maturities in 1995. In
the event the Partnership is unable to arrange refinancing or other arrangements
for payment or extensions of the remaining loans, the properties securing the
mortgages may be lost through foreclosure.
McNeil has established a revolving credit facility not to exceed $5,000,000 in
the aggregate which will be 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 additional funds under the facility because no
amounts will be reserved for any particular partnership. As of March 31, 1994,
$1,685,771 remained available for borrowing under the facility, however,
additional funds could become available as other partnerships repay borrowings.
The General Partner is not obligated to advance funds to the Partnership and
there is no assurance that the Partnership will receive additional funds.
Should market conditions change and operations deteriorate, present cash
resources may be insufficient to meet current needs. Other than available
portions of the $5,000,000 revolving credit facility and any additional
financing from Fund XXVII, which may not be available when required by the
Partnership, the Partnership has no existing lines of credit from outside
sources. Other sources of working capital may be required and no such other
sources have been identified.
Possible actions to resolve operating deficiencies include sales of properties,
refinancing or renegotiating terms of existing loans, deferring major capital
expenditures, except where improvements are expected to enhance the
competitiveness or marketability of the properties, or arranging additional
support from affiliates. Additional affiliate support is not assured, since
neither the General Partner nor any affiliates have obligations to make advances
in excess of any unused portion of the revolving credit facility. Sales of
properties are possibilities, and Village East, Lamar Plaza and Plaza Westlake
are currently held for sale. There is no assurance that a sale can be
completed, nor that a closing could be timed to coincide with the Partnership's
cash needs.
The mortgages encumbering two of the Partnership's properties, Channingway and
Village East, contain provisions which may give the lenders the right to
accelerate the mortgage debt as a result of the approved restructuring. The
General Partner has requested that the lenders waive their right to accelerate
the mortgage debt. The lenders may require the payment of fees or additional
interest as a condition to granting such waiver. In the event the waiver is not
obtained as to any mortgage, and the mortgage debt is accelerated, the
Partnership will be required to satisfy the outstanding mortgage debt, which
approximated $16 million at March 31, 1994. In such event, the Partnership will
attempt to arrange alternative sources of mortgage financing. However, any such
refinancing may be at an interest rate which is higher or is otherwise on terms
which are less favorable than those provided by the current mortgage.
Furthermore, if alternative financing cannot be obtained, each lender could
foreclose on the property securing its mortgage amount.
Distributions to limited partners, last paid in 1984, will remain suspended
until Partnership cash reserves are rebuilt to an adequate level, and will
resume only if clearly supported by property operations. A distribution of
$288,097 for the Contingent MID has been accrued by the Partnership at March 31,
1994 for the General Partner.
11
<PAGE>
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
- - ------- -----------------
On March 28, 1994, McNeil announced that he has suspended discussions originally
announced October 29, 1993, regarding obtaining financing for the possible cash
acquisition by McNeil of all or a portion of the limited partnership interest in
17 publicly-held real estate partnerships for which McNeil Partners, L.P. serves
as a general partner, including the Partnership.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- - ------- --------------------------------
(a) Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number Description
-------- -----------
<C> <S>
3.3 Amended and Restated Partnership Agreement, dated September
6, 1991 (Incorporated by reference to the Quarterly Report
on Form 10-Q for the quarter ended September 30, 1991).
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 230,584 and 230,817 limited partnership units outstanding
in 1994 and 1993.
</TABLE>
(b) Reports on Form 8-K. There were no reports on Form 8-K filed during the
quarter ended March 31, 1994.
12
<PAGE>
McNEIL REAL ESTATE FUND XII, 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 XII, Ltd.
By: McNeil Partners, L.P., General Partner
By: McNeil Investors, Inc., General Partner
May 9, 1994 By: /s/ Donald K. Reed
- - -------------------- -------------------------------------------------
Date Donald K. Reed
President and Chief Executive Officer
May 9, 1994 By: /s/ Robert C. Irvine
- - -------------------- -------------------------------------------------
Date Robert C. Irvine
Chief Financial Officer of McNeil Investors, Inc.
Principal Financial Officer
May 9, 1994 By: /s/ Brandon K. Flaming
- - -------------------- -------------------------------------------------
Date Brandon K. Flaming
Chief Accounting Officer of McNeil
Real Estate
Management, Inc.
13
