[.TX]1-15
<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 September 30, 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
---
<PAGE>
MCNEIL REAL ESTATE FUND XII, LTD.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
- - ------- --------------------
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1994 1993
------------- ------------
<C> <C>
<S>
Real estate investments:
Land $ 7,845,653 $ 7,108,968
Building and improvements 88,945,189 89,085,041
----------- -----------
96,790,842 96,194,009
Less: Accumulated depreciation
and amortization (45,689,814) (43,889,170)
----------- -----------
51,101,028 52,304,839
Assets held for sale 10,690,079 11,421,936
Cash and cash equivalents 669,054 4,938,029
Cash segregated for security
deposits 216,961 347,986
Accounts receivable, less
allowance for doubtful accounts
of $36,410 at September 30, 1994 and
December 31, 1993, respectively 334,111 381,737
Prepaid expenses and other assets 286,445 289,275
Escrow deposits 1,648,898 1,504,609
Deferred borrowing costs, net of
accumulated amortization of $803,609
and $715,830 at September 30, 1994
and December 31, 1993, respectively 1,590,902 1,641,689
---------- ----------
$66,537,478 $72,830,100
========== ==========
LIABILITIES AND PARTNERS' DEFICIT
- - ---------------------------------
Mortgage notes payable, net $78,860,501 $79,867,507
Mortgage notes payable - affiliate - 1,603,135
Accounts payable 492,437 647,869
Accrued expenses 240,627 128,240
Accrued interest 1,865,019 1,599,238
Accrued property taxes 1,556,657 1,224,990
Advances from Southmark 32,115 30,655
Advances from affiliates - General
Partner 1,775,420 3,346,441
Payable to affiliates - General Partner 5,805,036 5,292,511
Security deposits and deferred rental
income 666,405 684,379
---------- ----------
91,294,217 94,424,965
---------- ----------
Partners' deficit:
Limited partners - 240,000 limited
partnership units authorized;
230,584 and 230,817 limited partner-
ship units issued and outstanding
at September 30, 1994 and December
31, 1993, respectively (15,316,706) (13,138,511)
General Partner ( 9,440,033) (8,456,354)
---------- ----------
(24,756,739) (21,594,865)
---------- ----------
$66,537,478 $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.
<PAGE>
MCNEIL REAL ESTATE FUND XII, LTD.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ -------------------------
1994 1993 1994 1993
----------- ----------- ------------ -----------
<C> <C> <C> <C>
<S>
Revenue:
Rental revenue $ 5,466,449 $ 6,166,596 $16,280,905 $18,020,654
Interest 10,036 5,040 39,236 26,639
Gain on disposi-
tion of real
estate - 198,713 - 198,713
---------- ---------- ---------- ----------
Total revenue 5,476,485 6,370,349 16,320,141 18,246,006
---------- ---------- ---------- ----------
Expenses:
Interest 1,856,914 2,256,003 5,607,494 6,988,988
Interest -
affiliates 36,021 123,435 100,132 289,474
Depreciation and
amortization 1,181,244 1,177,365 3,472,998 3,526,352
Property taxes 448,749 550,251 1,346,247 1,638,675
Personnel expenses 762,345 800,735 2,101,150 2,228,144
Utilities 368,702 452,904 1,394,611 1,538,868
Repair and
maintenance 888,546 709,543 2,221,327 2,403,876
Property management
fees - affiliates 273,323 307,959 812,796 900,746
Other property
operating expenses 402,313 392,965 1,061,391 1,083,409
General and
administrative 50,481 116,595 122,735 329,186
General and
administrative -
affiliates 120,015 140,781 372,097 597,418
---------- ---------- ---------- ----------
Total expenses 6,388,653 7,028,536 18,612,978 21,525,136
---------- ---------- ---------- ----------
Net loss $ (912,168) $ (658,187) $(2,292,837) $(3,279,130)
========== ========== ========== ==========
Net loss allocable
to limited
partners $ (866,560) $ (625,278) $(2,178,195) $(3,115,174)
Net income allocable
to General Partner (45,608) (32,909) (114,642) (163,956)
---------- ---------- ---------- ----------
Net loss $ (912,168) $ (658,187) $(2,292,837) $(3,279,130)
========== ========== ========== ==========
Net loss per
limited partner-
ship unit $ (3.76) $ (2.71) $ (9.45) $ (13.49)
========= ========== ========== ==========
</TABLE>
The financial information included herein has been prepared by
management without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
MCNEIL REAL ESTATE FUND XII, LTD.
STATEMENTS OF PARTNERS' DEFICIT
(Unaudited)
For the Nine Months Ended September 30, 1994 and 1993
<TABLE>
<CAPTION>
Total
General Limited Partners'
Partner Partners Deficit
------------ ------------- -------------
<C> <C> <C>
<S>
Balance at December 31,
1992 $ (7,473,458) $ (17,108,329) $ (24,581,787)
Net loss (163,956) (3,115,174) (3,279,130)
Contingent Management
Incentive Distribution (804,333) - (804,333)
----------- ------------ ------------
Balance at September 30,
1993 $ (8,441,747) $ (20,223,503) $ (28,665,250)
=========== ============ ============
Balance at December 31,
1993 $ (8,456,354) $ (13,138,511) $ (21,594,865)
Net loss (114,642) (2,178,195) (2,292,837)
Contingent Management
Incentive Distribution (869,037) - (869,037)
----------- ------------ -----------
Balance at September 30,
1994 $ (9,440,033) $ (15,316,706) $ (24,756,739)
=========== ============ ============
</TABLE>
The financial information included herein has been prepared by
management without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
MCNEIL REAL ESTATE FUND XII, LTD.
STATEMENTS OF CASH FLOWS
(Unaudited)
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
----------------------------
1994 1993
------------ ------------
<C> <C>
<S>
Cash flows from operating activities:
Cash received from tenants $ 16,359,986 $ 18,245,294
Cash paid to suppliers (6,634,407) (7,512,365)
Cash paid to affiliates (1,541,405) (886,678)
Interest received 39,236 26,639
Interest paid (5,105,188) (6,368,019)
Interest paid to affiliates (470,489) (142,392)
Property taxes paid (1,384,293) (1,958,495)
----------- -----------
Net cash provided by operating
activities 1,263,440 1,403,984
----------- -----------
Cash flows used in investing activities:
Proceeds from sale of real estate - 288,663
Additions to real estate investments (1,537,331) (1,594,577)
----------- -----------
Net cash used in investing activities (1,537,331) (1,305,914)
----------- -----------
Cash flows from financing activities:
Proceeds from refinancing of mortgage
notes payable - 442,665
Principal payments on mortgage notes
payable (1,154,293) (1,327,880)
Additions to deferred borrowing costs (36,992) (330,794)
Mortgage loans from affiliates - 1,547,135
Repayment of mortgage loans from
affiliates (1,603,135) -
Advances from affiliates -
General Partner 6,000 135,554
Repayment of advances from affiliates -
General Partner (1,206,664) -
----------- ----------
Net cash provided by (used in) financing
activities (3,995,084) 466,680
----------- ----------
Net increase (decrease) in cash and
cash equivalents (4,268,975) 564,750
Cash and cash equivalents at beginning
of period 4,938,029 343,859
----------- ----------
Cash and cash equivalents at end
of period $ 669,054 $ 908,609
=========== ==========
</TABLE>
The financial information included herein has been prepared by
management without audit by independent public accountants.
See accompanying notes to financial statements.
<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>
Nine Months Ended
September 30,
--------------------------
1994 1993
----------- ------------
<C> <C>
<S>
Net loss $(2,292,837) $(3,279,130)
---------- ----------
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation and amortization 3,472,998 3,526,352
Amortization of deferred borrowing costs 87,779 198,771
Amortization of discounts on mortgage
notes payable 147,288 227,187
Net interest added on advances from
affiliates - General Partner 93,032 147,082
Net interest added on advances from
Southmark 1,460 1,309
Loss (gain) on disposition of real estate - (198,713)
Changes in assets and liabilities:
Cash segregated for security deposits 131,025 (13,606)
Accounts receivable 47,626 51,166
Prepaid expenses and other assets 2,830 15,879
Escrow deposits (144,289) (636,236)
Accounts payable (155,432) (20,514)
Accrued expenses 112,387 (92,075)
Accrued interest (197,608) 193,703
Accrued property taxes 331,667 565,615
Payable to affiliates - General Partner (356,512) 611,486
Security deposits and deferred rental
income (17,974) 105,708
---------- ----------
Total adjustments 3,556,277 4,683,114
---------- ----------
Net cash provided by operating activities $ 1,263,440 $ 1,403,984
========== ==========
</TABLE>
The financial information included herein has been prepared by
management without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND XII, LTD.
Notes to Financial Statements
(Unaudited)
September 30, 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 nine months ended September 30, 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%.
<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 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:
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-----------------------------
1994 1993
---------- ------------
<C> <C>
<S>
Charged to other assets:
Prepaid expenses $ - $ 2,571
Property management fees -
affiliates 812,796 900,746
Interest - affiliates 100,132 289,474
Charged to general and
administrative - affiliates:
Partnership administration 372,097 444,395
Fixed MID - 153,023
---------- ----------
$ 1,285,025 $ 1,790,209
========== ==========
Charged to General Partner's
deficit:
Contingent MID $ 869,037 $ 804,333
========== ==========
</TABLE>
<PAGE>
NOTE 6.
- - ------
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 $15.8 million
at September 30, 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.
NOTE 7.
- - ------
On June 1, 1994, the Partnership stopped making the debt service
payments on Fox Run's mortgage notes due to recurring operating
deficits at the property. This constitutes an event of default
under terms of Fox Run's mortgage notes and the lenders could
foreclose on Fox Run. On October 18, 1994, a receiver was
appointed for Fox Run.
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
September 30, 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 $2,292,837 for the first nine months of
1994 as compared to a net loss of $3,279,130 for the same period
in 1993. Revenues declined in 1994 to $16,320,141 as compared to
$18,246,006 in 1993, at the same time expenses decreased to
$18,612,978 from $21,525,136.
Net cash provided by operating activities was $1,263,440 for the
period. After expenditures of $1,537,331 for capital
improvements, $1,154,293 in principal payments on mortgage notes,
and $36,992 in deferred borrowing costs plus an advance from
affiliates of $6,000 and the repayment of mortgage loans and
advances from affiliates of $2,809,799, the net decrease in cash
of $4,268,975 was deducted from cash and cash equivalents, giving
a balance of $669,054 at September 30, 1994 as compared to
$908,609 at September 30, 1993.
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 nine months of 1994 was $16,280,905 as
compared to $18,020,654 for the same period in 1993. This
decrease of $1,739,749 or 9.7% is primarily due to the loss of
$2,611,654 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.
<PAGE>
Expenses:
Partnership expenses decreased by $2,912,158 for the first nine
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 $981,296 for interest, $322,206 for
depreciation, $253,269 for property taxes, $261,830 for personnel
expenses, $239,193 for utilities, $267,700 for repair and
maintenance, $130,780 for property management fees - affiliates,
and $139,606 other property operating expenses.
In addition to the sale of Cedar Mill Crossing, other factors
affected the level of expenses reported by the remaining
properties. Interest expense decreased $400,198 or 6.7% 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 $189,342 or 65.4% for the first nine
months of 1994 as compared to the same period in 1993 due to the
repayment of $2,809,799 of affiliate loans and advances.
Depreciation expense increased by $268,852 or 8.4% for the nine
months ended September 30, 1994 as compared to the same period in
1993 due to the increase in capital improvements made at the
properties.
Personnel expenses increased by $134,836 or 6.9% for the first
nine months of 1994 as compared to the same period in 1993 due to
additional part-time staff, an increase in maintenance employee
hours, and an increase in incentive bonus' paid.
Utilities increased by $94,936 or 7.3% for the first nine months
of 1994 as compared to the same period in 1993 due to an increase
in the cost and usage of gas and oil during the winter months and
an increase in water and sewer rates. The increase in these
expenses is also directly related to increased occupancy.
Repairs and maintenance increased by $85,151 or 4.0% for the
first nine months of 1994 as compared to the same period in 1993
due to increases in electrical and HVAC supplies and repairs, and
expenses associated with preparing vacated units for occupancy.
Repairs and maintenance increased by $250,576 or 39.2% for the
three month period ending September 1994 as compared to the same
period in 1993 due to expenses associated with preparing vacated
units for occupancy.
Property management fees - affiliates increased by $42,830 or
5.6% for the nine months ended September 30, 1994 as compared to
the same period last year. The increase is due to an increase in
rental receipts at the properties, which is the basis for
computing such fees.
Other property operating expenses increased by $117,588 or 12.5%
for the first nine 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 $206,451 or 62.7% for the
first nine months of 1994 as compared to the same period in 1993
primarily due to a reduction in tax preparation, legal costs, and
professional fees.
General and administrative - affiliates decreased $225,321 or
37.7% for the first nine 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 and
also due to a reduction in the Partnership's portion of
reimbursable costs.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
- - -------------------------------
At September 30, 1994, the Partnership held cash and cash
equivalents of $669,054, down $4,268,975 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 $296,331 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.
During 1994, the Partnership has been faced with mortgage
principal payments and mortgage maturities on Fox Run, Millwood
Park and Village East, totaling approximately $6,519,000. It is
management's policy to negotiate extensions of such maturities
when possible. Management has negotiated a one year extension on
Millwood Park and Village East. In June of 1994, management
ceased making debt service payments on Fox Run. On October 18,
1994, a receiver was appointed for Fox Run. Additionally, the
Partnership is faced with approximately $27,012,000 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 September 30, 1994, $1,661,671 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.
<PAGE>
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 Fox Run, Village East and Lamar Plaza are
currently held for sale. Fox Run was placed in receivership on
October 18, 1994 and the Partnership expects to allow the
foreclosure of the property in full settlement of the related
debt in early 1995. The Partnership has signed a sales contract
for Village East and anticipates net proceeds to be approximately
$2.8 million. 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 $15.8 million
at September 30, 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 $869,037 for the
Contingent MID has been accrued by the Partnership at September 30,
1994 for the General Partner.
<PAGE>
PART II. OTHER INFORMATION
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
- - ------ -------------------------------
The Partnership is in default on certain terms of Fox Run's
mortgage notes. Fox Run's mortgage notes requires monthly debt
service payments of $52,476. In addition, the Partnership is
required to pay certain escrow amounts on a monthly basis for
property taxes. These additional payments total $8,293 for Fox
Run. Due to recurring operating deficits at Fox Run Apartments,
the real estate securing these mortgage notes, the Partnership
stopped making debt service payments with the payment due
June 1, 1994. As of October 18, 1994 the amount of the arrearage
on Fox Run's mortgage notes is $303,845.
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.
27. Financial Data Schedule for the year ended
December 31, 1993 and for the quarter ended
September 30, 1994.
</TABLE>
(b) Reports on Form 8-K. There were no reports on Form 8-K
filed during the quarter ended September 30, 1994.
<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
November 10, 1994 By: /s/ Donald K. Reed
- - ---------------------- --------------------------------------
Date Donald K. Reed
President and Chief Executive Officer
November 10, 1994 By: /s/ Robert C. Irvine
- - ---------------------- -------------------------------------
Date Robert C. Irvine
Chief Financial Officer of McNeil
Investors, Inc.
Principal Financial Officer
November 10, 1994 By: /s/ Brandon K. Flaming
- - ----------------------- -------------------------------------
Date Brandon K. Flaming
Chief Accounting Officer of McNeil
Real Estate Management, Inc.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the Balance
Sheets and Statement of Operations and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1993 DEC-31-1993
<PERIOD-END> DEC-31-1993 SEP-30-1994
<CASH> 4,938,029 669,054
<SECURITIES> 0 0
<RECEIVABLES> 418,147 370,521
<ALLOWANCES> (36,410) (36,410)
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 96,194,009 96,790,842
<DEPRECIATION> (43,889,170) (45,689,814)
<TOTAL-ASSETS> 72,830,100 66,537,478
<CURRENT-LIABILITIES> 0 0
<BONDS> 0 0
<COMMON> 0 0
0 0
0 0
<OTHER-SE> (21,594,865) (24,756,739)
<TOTAL-LIABILITY-AND-EQUITY> 72,830,100 66,537,478
<SALES> 24,228,119 16,280,905
<TOTAL-REVENUES> 32,481,572 16,320,141
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 18,682,528 12,905,352
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 9,620,288 5,707,626
<INCOME-PRETAX> 4,178,756 (2,292,837)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 4,178,756 (2,292,837)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 4,178,756 (2,292,837)
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
