UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the period ended June 30, 1995
-----------------------------------------------
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>
June 30, December 31,
1995 1994
------------ -----------
<S> <C> <C>
Real estate investments:
Land..................................................... $ 6,280,580 $ 6,280,580
Buildings and improvements............................... 72,176,910 71,739,632
----------- -----------
78,457,490 78,020,212
Less: Accumulated depreciation and amortization......... (38,774,221) (37,105,195)
----------- ------------
39,683,269 40,915,017
Assets held for sale........................................ 6,303,881 12,724,693
Cash and cash equivalents................................... 2,691,398 3,313,765
Cash segregated for security deposits ...................... 311,722 303,436
Accounts receivable, less allowance for doubtful
accounts of $5,629 and $36,410 at June 30, 1995
and December 31, 1994, respectively...................... 208,450 317,559
Prepaid expenses and other assets........................... 299,600 258,668
Escrow deposits............................................. 1,000,011 896,234
Deferred borrowing costs, net of accumulated amorti-
zation of $702,539 and $652,691 at June 30, 1995
and December 31, 1994, respectively...................... 1,501,642 1,459,976
----------- -----------
$ 51,999,973 $ 60,189,348
=========== ===========
LIABILITIES AND PARTNERS' DEFICIT
Mortgage notes payable, net................................. $ 57,639,073 $ 68,152,522
Accounts payable............................................ 266,528 220,341
Accrued expenses............................................ 152,165 146,722
Accrued interest............................................ 621,010 1,680,833
Accrued property taxes...................................... 964,021 961,459
Advances from Southmark..................................... 33,919 32,690
Advances from affiliates - General Partner.................. 1,896,828 1,814,115
Payable to affiliates - General Partner..................... 6,682,336 5,926,684
Security deposits and deferred rental income................ 522,913 546,313
----------- -----------
68,778,793 79,481,679
----------- -----------
Partners' deficit:
Limited partners - 240,000 limited partnership units
authorized; 229,980 and 230,594 limited partnership
units issued and outstanding at March 30, 1995 and
December 31, 1994, respectively............... (6,969,498) (9,844,782)
General Partner.......................................... (9,809,322) (9,447,549)
----------- -----------
(16,778,820) (19,292,331)
----------- -----------
$ 51,999,973 $ 60,189,348
=========== ===========
</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 Six Months Ended
June 30, June 30,
----------------------------- -----------------------------
1995 1994 1995 1994
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Revenue:
Rental revenue................ $4,638,056 $5,382,671 $ 9,322,056 $10,814,456
Interest...................... 23,445 16,028 57,160 29,200
Gain on disposition of
real estate................. 2,263,292 - 2,263,292 -
Gain on legal settlement...... 65,857 - 65,856 -
--------- --------- ---------- ----------
Total revenue............... 6,990,650 5,398,699 11,708,364 10,843,656
--------- --------- ---------- ----------
Expenses:
Interest...................... 1,724,571 1,882,700 3,449,339 3,750,580
Interest - affiliates......... 41,945 33,106 82,713 64,111
Depreciation and
amortization................ 1,069,629 1,145,877 2,139,258 2,291,754
Property taxes................ 297,733 448,749 673,786 897,498
Personnel expenses............ 504,524 620,321 1,114,279 1,338,805
Utilities..................... 314,208 426,207 774,346 1,025,909
Repair and maintenance........ 618,405 636,418 1,167,287 1,332,781
Property management
fees - affiliates........... 235,517 271,500 469,310 539,473
Other property operating
expenses.................... 303,135 337,986 604,821 659,078
General and administrative.... 35,101 29,726 69,425 72,254
General and administrative -
affiliates.................. 123,794 122,614 243,810 252,082
--------- --------- ---------- ----------
Total expenses.............. 5,268,562 5,955,204 10,788,374 12,224,325
--------- --------- ---------- ----------
Net income (loss) before
extraordinary item............ 1,722,088 (556,505) 919,990 (1,380,669)
Extraordinary gain on
extinguishment of debt........ 268,433 - 2,106,625 -
--------- --------- ---------- ----------
Net income (loss)................ $1,990,521 $ (556,505) $ 3,026,615 $(1,380,669)
========= ========= ========== ===========
Net income (loss) allocable
to limited partners........... $1,890,995 $ (528,680) $ 2,875,284 $(1,311,636)
Net income (loss) allocable
to General Partner............ 99,526 (27,825) 151,331 (69,033)
--------- --------- --------- ----------
Net income (loss)................ $1,990,521 $ (556,505) $ 3,026,615 $(1,380,669)
========= ========= ========= ==========
Net income (loss) per limited partnership unit:
Income (loss) before
extraordinary item............ $ 7.11 $ (2.29) $ 3.80 $ (5.69)
Extraordinary gain from
extinguishment of debt........ 1.11 - 8.70 -
--------- --------- --------- ----------
Net income (loss) per limited
partnership unit.............. $ 8.22 $ (2.29) $ 12.50 $ (5.69)
========= ========= ========= ==========
</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 Six Months Ended June 30, 1995 and 1994
<TABLE>
<CAPTION>
Total
General Limited Partners'
Partner Partners Deficit
----------- ------------- -------------
<S> <C> <C> <C>
Balance at December 31, 1993.............. $(8,456,354) $(13,138,511) $(21,594,865)
Net loss.................................. (69,033) (1,311,636) (1,380,669)
Contingent Management Incentive
Distribution........................... (597,772) - (597,772)
---------- ----------- -----------
Balance at June 30, 1994.................. $(9,123,159) $(14,450,147) $(23,573,306)
========== =========== ===========
Balance at December 31, 1994.............. $(9,447,549) $ (9,844,782) $(19,292,331)
Net income................................ 151,331 2,875,284 3,026,615
Contingent Management Incentive
Distribution........................... (513,104) - (513,104)
---------- ----------- -----------
Balance at June 30, 1995.................. $(9,809,322) $ (6,969,498) $(16,778,820)
========== =========== ===========
</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>
Six Months Ended
June 30,
----------------------------------
1995 1994
---------- -----------
<S> <C> <C>
Cash flows from operating activities:
Cash received from tenants........................ $ 9,368,587 $10,906,868
Cash received from legal settlement............... 65,856 -
Cash paid to suppliers............................ (3,711,080) (4,374,237)
Cash paid to affiliates........................... (470,572) (1,265,940)
Interest received................................. 57,160 29,200
Interest paid..................................... (2,813,703) (3,395,878)
Interest paid to affiliates....................... - (470,489)
Property taxes paid............................... (752,489) (1,204,829)
Deferred borrowing costs paid..................... (130,070) (32,757)
---------- ----------
Net cash provided by (used in)
operating activities.............................. 1,613,689 191,938
---------- ----------
Cash flows used in investing activities:
Additions to real estate investments.............. (460,266) (586,829)
Net proceeds from disposition of real estate...... 45,000 -
---------- ---------
Net cash used in investing activities................ (415,266) (586,829)
---------- ---------
Cash flows from financing activities:
Proceeds from refinancing of mortgage
notes payable................................... 334,062 -
Principal payments on mortgage notes
payable......................................... (2,154,852) (825,405)
Repayment of mortgage loans from affiliates....... - (1,603,135)
Repayment of advances from affiliates -
General Partner................................. - (1,200,664)
---------- ----------
Net cash used in financing activities................ (1,820,790) (3,629,204)
---------- ----------
Net decrease in cash and cash equivalents............ (622,367) (4,024,095)
Cash and cash equivalents at beginning of
period............................................ 3,313,765 4,938,029
---------- ----------
Cash and cash equivalents at end of period........... $ 2,691,398 $ 913,934
========== ==========
</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 Income (Loss) to Net Cash Provided by
Operating Activities
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-----------------------------------
1995 1994
---------- ------------
<S> <C> <C>
Net income (loss).................................... $3,026,615 $(1,380,669)
--------- ----------
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization..................... 2,139,258 2,291,754
Amortization of deferred borrowing costs.......... 88,404 58,435
Amortization of discounts on mortgage
notes payable................................... 177,388 98,087
Net interest added on advances from
affiliates - General Partner.................... 82,713 57,011
Net interest added on advances from
Southmark....................................... 1,229 925
Extraordinary gain on extinguishment
of debt......................................... (2,106,625) -
Gain on disposition of real estate................ (2,263,292) -
Changes in assets and liabilities:
Cash segregated for security deposits........... (8,286) 128,225
Accounts receivable............................. 109,109 28,848
Prepaid expenses and other assets............... (40,932) 5,577
Escrow deposits................................. (103,777) (341,622)
Deferred borrowing costs........................ (130,070) (32,757)
Accounts payable................................ 46,187 (28,938)
Accrued expenses................................ 5,443 (68,057)
Accrued interest................................ 368,615 (266,134)
Accrued property taxes.......................... 2,562 125,216
Payable to affiliates - General Partner......... 242,548 (474,385)
Security deposits and deferred rental ..........
income........................................ (23,400) (9,578)
---------- ----------
Total adjustments............................. (1,412,926) 1,572,607
---------- ----------
Net cash provided by operating activities............ $ 1,613,689 $ 191,938
========== ==========
</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)
June 30, 1995
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. 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 six months ended June 30, 1995 are
not necessarily indicative of the results to be expected for the year ending
December 31, 1995.
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, 1994, 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%.
Under terms of the Amended Partnership Agreement, the Partnership is paying a
Management Incentive Distribution ("MID") to the General Partner. The maximum
MID is calculated as 1% of the tangible asset value of the Partnership. The
maximum MID percentage decreases subsequent to 1999. Tangible asset value is
determined by using the greater of (i) an amount calculated by applying a
capitalization rate of 9% to the annualized net operating income of each
property or (ii) a value of $10,000 per apartment unit 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").
Effective July 1, 1993, 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.
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 was 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 was 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>
Six Months Ended
June 30,
-----------------------
1995 1994
-------- --------
<S> <C> <C>
Charged to other assets:
Property management fees - affiliates................ $469,310 $539,473
Interest - affiliates................................ 82,713 64,111
Charged to general and administrative - affiliates:
Partnership administration........................ 243,810 252,082
------- -------
$795,833 $855,666
======= =======
Charged to General Partner's deficit:
Contingent MID.................................... $513,104 $597,772
======= =======
</TABLE>
<PAGE>
NOTE 6.
- -------
The Partnership filed claims with the United States Bankruptcy Court for the
Northern District of Texas, Dallas Division (the "Bankruptcy Court") against
Southmark for damages relating to improper overcharges, breach of contract and
breach of fiduciary duty. The Partnership settled these claims in 1991, and such
settlement was approved by the Bankruptcy Court.
An Order Granting Motion to Distribute Funds to Class 8 Claimants dated April
14, 1995 was issued by the Bankruptcy Court. In accordance with the Order, in
May 1995 the Partnership received in full satisfaction of its claims, $49,818 in
cash, and common and preferred stock in the reorganized Southmark currently
valued at approximately $16,000, which amounts represent the Partnership's
pro-rata share of Southmark assets available for Class 8 Claimants. The
Partnership sold the Southmark common and preferred stock in May for $16,038,
which combined with the cash proceeds from Southmark, resulted in a gain on
legal settlement of $65,856.
NOTE 7.
- -------
On March 24, 1995, the Partnership refinanced the mortgage note payable on Plaza
Westlake. The new loan bears an interest rate of 9.5% and will mature January
31, 2000. Following is a summary of the transaction:
<TABLE>
<CAPTION>
<S> <C>
New loan proceeds...................... $4,000,000
Capital improvement account............ (300,000)
Existed debt retired................... (3,365,938)
---------
Cash proceeds from refinancing......... $ 334,062
=========
</TABLE>
In addition, the Partnership incurred loan costs of $130,070 relating to the
refinancing.
On February 26, 1995, the Partnership paid off the interest in net profits on
Buccaneer Village for retirement of $3,588,192 of debt. The debt was retired at
a discounted payoff of $1,750,000, which resulted in an extraordinary gain on
extinguishment of debt of $1,838,192.
NOTE 8.
- -------
On June 19, 1995 the Partnership sold its investment in Sundance to an
unaffiliated buyer for a cash sales price of $45,000 and assumption of the
first, second and third liens by the purchaser. Cash proceeds and the gain on
disposition are detailed below.
<TABLE>
<CAPTION>
Gain on Sale Cash Proceeds
-------------- -------------
<S> <C> <C>
Sales price.......................................... $ 45,000 $ 45,000
Mortgages and accrued interest assumed by
purchaser......................................... 8,191,859
Basis of real estate sold............................ (5,973,567)
----------
Gain on disposition of real estate................... $2,263,292
=========
Net cash proceeds.................................... $ 45,000
=======
</TABLE>
Also related to the sale of Sundance, the Partnership recognized a $268,433 gain
on early extinguishment of debt.
On July 27, 1995, Lamar Plaza, a 151,759 square foot retail center located in
Rosenberg, Texas, was sold to North American Mortgage Investors, an unaffiliated
buyer, for the assumption of the two mortgage liens.
<PAGE>
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 June 30, 1995, the Partnership
owned eight apartment properties and two shopping centers. On June 19, 1995, the
Partnership sold Sundance Apartments. All of the Partnership's properties are
subject to mortgage notes.
RESULTS OF OPERATIONS
- ---------------------
Revenue:
Rental revenue for the six months ended June 30, 1995 was $9,322,056 as compared
to $10,814,456 for the same period last year. This decrease of $1,492,400 is due
to the loss in rental revenue generated by Village East and Fox Run, which were
sold in November and December of 1994. This decrease was partially offset by the
increase in rental revenue at five of the Partnership's properties.
Interest income increased by $27,960 or 95% and $7,417 or 46% for the six and
three months ended June 30, 1995, respectively, as compared to the same period
last year. This increase is due to larger average cash balances being invested
in interest-bearing accounts.
The Partnership also recognized a gain on disposition of real estate of
$2,263,292 as a result of the sale of Sundance in June 1995.
Expenses:
Partnership expenses decreased by $1,435,951 for the first six months of 1995 as
compared to the same period last year primarily due to the sale of Fox Run and
Village East in 1994 and Cedar Mill Crossing in December 1993. The effects from
these transactions were declines of $549,692 for interest, $271,278 for
depreciation, $92,568 for property taxes, $240,963 for personnel expenses,
$177,869 for utilities, $220,260 for repair and maintenance, $70,163 for
property management fees - affiliates, and $54,257 other property operating
expenses.
In addition to the sale of Fox Run, Village East, and Cedar Mill Crossing other
factors affected the level of expenses reported by the remaining properties.
Interest expense - affiliates increased by $18,602 or 29% due to an increases in
the prime rate used to calculate the interest expense on the advances.
Property taxes decreased an additional $131,144 or 16% for the six months ended
June 30, 1995 as compared to the same period last year. This decrease is due to
a reduction in the estimated tax liability at six of the Partnership's
properties and the sale of Sundance in June 1995.
All other remaining expense categories remained comparable to the same period
last year.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Partnership generated $1,613,689 through operating activities for the first
six months of 1995 as compared to a $191,938 generated for the first six months
of 1994. This increase in cash can be attributed to the reduction in interest
paid as a result of the sales of Fox Run and Village East in 1994. Also declines
in cash and interest paid to affiliates attributed to the increase in cash. In
January 1994, the Partnership used the proceeds from the sale of Cedar Mill to
pay down on the affiliate advances and the payment of the Fixed MID. The
Partnership also experienced a reduction in the cash paid to supplies and
property taxes paid but this decrease was somewhat offset by the reduction in
the cash received from tenants and the increase in deferred borrowing costs
paid.
The Partnership expended $460,266 and $586,829 for capital improvements to its
properties for the six months ended June 30, 1995 and 1994, respectively. The
Partnership also received cash proceeds of $45,000 for the sale of Sundance.
During the first six months of 1995, the Partnership expended $1,820,790 for
financing activities as compared to $3,629,204 for the same period in 1994. This
reduction is primarily due to the payoff in 1994 of the mortgage loan from
affiliates and the pay down of the advances from affiliates. During 1995, the
Partnership received cash proceeds of $334,062 for the refinancing of Plaza
Westlake. The increase in the principal payments on mortgage notes is due to
$1,750,000 discounted payoff of the interest in net profits on Buccaneer
Village.
Short Term Liquidity:
At June 30, 1995, the Partnership held cash and cash equivalents of $2,691,398.
The General Partner considers the Partnership's cash reserves adequate for
anticipated operations for 1995.
In 1995, the Partnership's properties are expected to provide positive cash flow
from operations. Management will continue to address ongoing capital improvement
needs in light of the aging condition of the Partnership's properties. The
Partnership has budgeted approximately $1,948,000 for capital improvements for
1995. The General Partner believes these capital improvements are necessary to
allow the Partnership to increase its rental revenues in the competitive markets
in which the Partnership's properties operate. These expenditures also allow the
Partnership to reduce certain repairs and maintenance expenses from amounts that
would otherwise be incurred. During 1994, the Partnership began paying the
Contingent MID and anticipates to continue to make payments to the General
Partner in 1995.
During 1995, the Partnership is faced with mortgage principal payments and
mortgage maturities on Buccaneer Village, Lamar Plaza, Millwood Park, Palisades
at the Galleria, and Plaza Westlake, totaling approximately $28,144,000. It is
management's policy to negotiate extensions or arrange refinancings for the
mortgage notes that are due. In February 1995, the Partnership paid off the
interest in net profits on Buccaneer Village at a discounted payoff of
$1,750,000 for retirement of $3,588,192 of debt which resulted in an
extraordinary gain on extinguishment of debt of $1,838,192. Additionally,
management successfully refinanced Plaza Westlake on March 24, 1995. The new 5
year mortgage note in the amount of $4,000,000 retired the maturing mortgage of
$3,366,000 and yielded $334,062 in proceeds to the Partnership. Management is
currently negotiating the refinancing of Buccaneer Village's first and
second mortgages, Millwood Park and Palisades at the Galleria. Management
anticipates closing on the refinancings by September with expected proceeds
to the Partnership of approximately $4,000,000.
The remaining two properties with 1995 maturities, Lamar Plaza and Sundance,
have maturing debt of approximately $11,700,000 were sold on June 19, 1995 and
July 23, 1995, respectively.
Long Term Liquidity:
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. Additionally, the General Partner has
allowed the Partnership to defer payment of MID and reimbursements until such
time as the Partnership 's cash reserves allow payments. During 1994, the
Partnership began to make repayments to the General Partner for advances and has
paid some of the accrued MID. The Partnership will continue to make such
payments as is allowed by cash reserves and cash flows of the Partnership.
However, the Partnership will not be able to repay the General Partner all
payables outstanding in the foreseeable future. The General Partner will
continue to defer the unpaid sums until the Partnership's cash reserves allow
such payments.
The General Partner has established a revolving credit facility not to exceed
$5,000,000 in the aggregate which is available on a "first-come, first-served"
basis to the Partnership and other affiliated partnerships if certain conditions
are met. Borrowings under the facility may be used to fund deferred maintenance,
refinancing obligations and working capital needs. There is no assurance that
the Partnership will receive additional funds under the facility because no
amounts will be reserved for any particular partnership. At June 30, 1995,
$2,362,034 remained available for borrowing under the facility; however,
additional funds could become available as other partnerships repay borrowings.
<PAGE>
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, discussed above, 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 discussed
above. Sales of properties are possibilities and Millwood Park is currently on
the market 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.
These conditions raise substantial doubt about the Partnership's ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of these uncertainties.
Distributions
With the exception of the Contingent MID, distributions to partners have been
suspended since 1986 as part of the General Partner's policy of maintaining
adequate cash reserves. Distributions to the limited partners will remain
suspended for the foreseeable future. The General Partner will continue to
monitor the cash reserves and working capital needs of the Partnership to
determine when cash flows will support distributions to the limited partners. A
distribution of $513,104 for the Contingent MID has been accrued by the
Partnership for the year ended June 30, 1995 for the General Partner.
<PAGE>
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
- ------- -----------------
On July 27, 1995, Lamar Plaza, a 151,759 square foot retail center located in
Rosenberg, Texas, was sold to North American Mortgage Investors, an unaffiliated
buyer, for the assumption of the two mortgage liens.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------- --------------------------------
(a) Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number Description
<S> <C>
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
229,980 and 230,594 limited partnership
units outstanding in 1995 and 1994.
27. Financial Data Schedule for the quarter
ended June 30, 1995.
</TABLE>
(b) Reports on Form 8-K. On June 26, 1995, the Partnership filed a Current
Report on Form 8-K reporting the sale of Sundance Apartments.
<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:
<TABLE>
<CAPTION>
McNEIL REAL ESTATE FUND XII, Ltd.
By: McNeil Partners, L.P., General Partner
By: McNeil Investors, Inc., General Partner
<S> <C>
September 29, 1995 By: /s/ Donald K. Reed
- ------------------ -------------------------------------------------
Date Donald K. Reed
President and Chief Executive Officer
September 29, 1995 By: /s/ Robert C. Irvine
- ------------------ -------------------------------------------------
Date Robert C. Irvine
Chief Financial Officer of McNeil Investors, Inc.
Principal Financial Officer
September 29, 1995 By: /s/ Brandon K. Flaming
- ------------------ --------------------------------------------------
Date Brandon K. Flaming
Chief Accounting Officer of McNeil Real Estate
Management, Inc.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 2,691,398
<SECURITIES> 0
<RECEIVABLES> 214,079
<ALLOWANCES> (5,629)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 78,457,490
<DEPRECIATION> (38,774,221)
<TOTAL-ASSETS> 51,999,973
<CURRENT-LIABILITIES> 0
<BONDS> 57,639,073
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 61,999,973
<SALES> 9,322,056
<TOTAL-REVENUES> 11,708,364
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 7,256,323
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,532,052
<INCOME-PRETAX> 919,990
<INCOME-TAX> 0
<INCOME-CONTINUING> 919,990
<DISCONTINUED> 0
<EXTRAORDINARY> 2,106,625
<CHANGES> 0
<NET-INCOME> 3,026,615
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
