SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 1997
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the transition period from to
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Commission file number 0-11126
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BALCOR EQUITY PROPERTIES-XII
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(Exact name of registrant as specified in its charter)
Illinois 36-3169763
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2355 Waukegan Road
Bannockburn, Illinois 60015
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 267-1600
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Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
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<PAGE>
BALCOR EQUITY PROPERTIES - XII
(An Illinois Limited Partnership)
BALANCE SHEETS
March 31, 1997 and December 31, 1996
(Unaudited)
ASSETS
1997 1996
--------------- ---------------
Cash and cash equivalents $ 11,371,242 $ 19,824,096
Accounts and accrued interest
receivable 149,729 315,188
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$ 11,520,971 $ 20,139,284
=============== ===============
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 15,000 $ 214,819
Due to affiliates 68,534 74,926
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Total liabilities 83,534 289,745
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Commitments and contingencies
Limited Partners' capital (37,447
Interests issued and outstanding) 11,479,437 19,891,539
General Partner's deficit (42,000) (42,000)
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Total partners' capital 11,437,437 19,849,539
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$ 11,520,971 $ 20,139,284
=============== ===============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PROPERTIES - XII
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended March 31, 1997 and 1996
(Unaudited)
1997 1996
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Income:
Rental and service $ 2,438,263
Interest on short-term investments $ 173,399 41,125
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Total income 173,399 2,479,388
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Expenses:
Interest on mortgage notes payable 720,164
Interest on short-term loan -
affiliate 8,953
Depreciation 318,777
Amortization of deferred expenses 15,154
Property operating 53,019 890,314
Real estate taxes 42,742 184,119
Property management fees 118,708
Administrative 64,165 82,001
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Total expenses 159,926 2,338,190
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Net income $ 13,473 $ 141,198
=============== ===============
Net income allocated to General
Partner None $ 1,412
=============== ===============
Net income alloacted to Limited
Partners $ 13,473 $ 139,786
=============== ===============
Net income per Limited Partnership
Interest (37,447 issued and
outstanding) $ 0.36 $ 3.73
=============== ===============
Distribution to Limited Partners $ 8,425,575 None
=============== ===============
Distribution per Limited Partnership
Interest $ 225.00 None
=============== ===============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PROPERTIES - XII
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
for the quarters ended March 31, 1997 and 1996
(Unaudited)
1997 1996
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Operating activities:
Net income $ 13,473 $ 141,198
Adjustments to reconcile net income
to net cash (used in) provided by
operating activities:
Depreciation of properties 318,777
Amortization of deferred expenses 15,154
Net change in:
Escrow deposits 191,890
Accounts and accrued interest
receivable 165,459 (83,200)
Prepaid expenses 71,555
Accounts payable (199,819) 20,482
Due to affiliates (6,392) 12,998
Accrued liabilities (247,421)
Security deposits (185)
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Net cash (used in) provided by
operating activities (27,279) 441,248
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Financing activities:
Distribution to Limited Partners (8,425,575)
Repayment of loan payable -
affiliate (245,000)
Principal payments on mortgage notes
payable (107,183)
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Net cash used in financing
activities (8,425,575) (352,183)
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Net change in cash and cash
equivalents (8,452,854) 89,065
Cash and cash equivalents at
beginning of year 19,824,096 146,052
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Cash and cash equivalents at end of
period $ 11,371,242 $ 235,117
=============== ===============
The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PROPERTIES-XII
(An Illinois Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policies:
In the opinion of management, all adjustments necessary for a fair presentation
have been made to the accompanying statements for the quarter ended March 31,
1997, and all such adjustments are of a normal and recurring nature.
2. Partnership Termination:
The Partnership Agreement provides for the dissolution of the Partnership upon
the occurrence of certain events, including the disposition of all interests in
real estate. The Partnership sold all of its remaining properties in 1996. The
Partnership distributed a majority of the proceeds from the sales in 1996 and
the first quarter of 1997. An additional distribution was paid in April 1997
representing the remaining available proceeds. The Partnership has retained a
portion of the proceeds from the sales to satisfy obligations of the
Partnership as well as establish a reserve for contingencies. Such
contingencies may include legal and other fees stemming from litigation
involving the Partnership, including but not limited to, the lawsuits discussed
in Note 5 of Notes to Financial Statements. In the absence of any such
contingency, the reserves will be paid within twelve months of the last
property sale. In the event a contingency continues to exist or arises,
reserves may be held by the Partnership for a longer period of time.
3. Interest Expense:
During the quarter ended March 31, 1996, the Partnership incurred and paid
interest expense on mortgage notes payable of $720,164.
4. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
quarter ended March 31, 1997 were:
Paid Payable
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Reimbursement of expenses to
the General Partner, at cost $9,796 $68,534
During 1996, the Partnership repaid the General Partner loan with proceeds from
the sale of the Brierwood Apartments. During the quarter ended March 31, 1996,
the Partnership incurred interest expense of $8,953 and paid interest expense
of $9,172 on the loan. Interest expense on the General Partner loan was
computed at the American Express Company cost of funds rate plus a spread to
cover administrative costs.
<PAGE>
5. Contingencies:
The Partnership is currently involved in two lawsuits whereby the Partnership
and certain affiliates have been named as defendants alleging substantially
similar claims involving certain federal securities law violations with regard
to the adequacy and accuracy of disclosures of information concerning, as well
as marketing efforts related to, the offering of the Limited Partnership
Interests of the Partnership. The defendants continue to vigorously contest
these actions. A plaintiff class has not been certified in either action and,
no determinations of the merits have been made. It is not determinable at this
time whether or not an unfavorable decision in either action would have a
material adverse impact on the financial position, operations and liquidity of
the Partnership. The Partnership believes it has meritorious defenses to
contest the claims.
6. Subsequent Event:
In April 1997, the Partnership paid $9,655,709 ($257.85 per Interest) to
Limited Partners representing Net Cash Proceeds received in connection with the
sale of DeFoors Creek Apartments.
<PAGE>
BALCOR EQUITY PROPERTIES-XII
(An Illinois Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS
Balcor Equity Properties-XII (the "Partnership") was formed in 1981 to invest
in and operate income-producing real property. The Partnership raised
$37,447,000 through the sale of Limited Partnership Interests and utilized
these proceeds to acquire seven real property investments and a minority joint
venture interest in one additional real property. Prior to 1997, all properties
were disposed of, including the property in which the Partnership held a
minority joint venture interest.
Inasmuch as the management's discussion and analysis below relates primarily to
the time period since the end of the last fiscal year, investors are encouraged
to review the financial statements and the management's discussion and analysis
contained in the annual report for 1996 for a more complete understanding of
the Partnership's financial position.
Operations
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Summary of Operations
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The 1996 sales of the Partnership's properties, which were generating income
from operations prior to their sales, were the primary reason net income
decreased during the quarter ended March 31, 1997 as compared to the same
period in 1996. Further discussion of the Partnership's operations is
summarized below.
1997 Compared to 1996
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Discussion of fluctuations between 1997 and 1996 refer to the quarters ended
March 31, 1997 and 1996.
As a result of the 1996 property sales of the Brierwood, Cedar Ridge, DeFoors
Creek, Sandridge - Phase I and Somerset Village apartment complexes, rental and
service income, interest expense on mortgage notes payable, depreciation,
amortization of deferred expenses and property management fees ceased during
1996.
Due to higher average cash balances resulting from net proceeds received in
connection with the 1996 property sales prior to distribution to Limited
Partners, interest income on short-term investments increased during 1997 as
compared to 1996.
During 1996, the Partnership incurred interest on short-term loan - affiliate.
The loan was repaid in 1996 with proceeds from the sale of the Brierwood
Apartments and interest expense ceased.
<PAGE>
As a result of the 1996 property sales, property operating expense decreased
during 1997 as compared to 1996. During 1997, the Partnership paid expenses
related to properties sold in 1996.
As a result of the 1996 property sales, real estate tax expense decreased
during 1997 as compared to 1996. During 1997, the Partnership paid additional
real estate taxes as a result of an increase in the assessed value of the
DeFoors Creek Apartments, which was sold in 1996.
Administrative expenses decreased during 1997 as compared to 1996 primarily due
to higher portfolio management fees incurred in 1996. In addition, the
Partnership incurred printing and postage costs in connection with a tender
offer during the first quarter of 1996, which contributed to the above
decrease.
Liquidity and Capital Resources
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The cash position of the Partnership as of March 31, 1997 decreased by
approximately $8,453,000 as compared to December 31, 1996 primarily due to the
January 1997 distribution to Limited Partners of proceeds received in
connection with the 1996 property sales. Cash of approximately $27,000 was used
in operating activities consisting of the payment of administrative expenses
and expenses related to properties sold in 1996, which were partially offset by
interest income on short-term investments. Cash used in financing activities
consisted of the payment of a distribution to Limited Partners of approximately
$8,426,000. In April 1997, the Partnership made a distribution to Limited
Partners from proceeds received in connection with the sale of DeFoors Creek
Apartments, as discussed below.
The Partnership sold all of its remaining properties during 1996. A majority of
the proceeds from the property sales was distributed to Limited Partners in
October 1996, and in January and April 1997. The Partnership has retained a
portion of the cash to satisfy obligations of the Partnership as well as
establish a reserve for contingencies. The timing of the termination of the
Partnership and final distribution of cash will depend upon the nature and
extent of liabilities and contingencies which exist or may arise. Such
contingencies may include legal and other fees stemming from litigation
involving the Partnership including, but not limited to, the lawsuits discussed
in Note 5 of Notes to Financial Statements. In the absence of any such
contingency, the reserves will be paid within twelve months of the last
property sale. In the event a contingency continues to exist or arises,
reserves may be held by the Partnership for a longer period of time.
During April 1997, the Partnership made a distribution of $9,655,709 ($257.85
per Interest) to Limited Partners from Net Cash Proceeds received from the
DeFoors Creek Apartments sale. To date, investors have received distributions
of Net Cash Receipts of $70 and Net Cash Proceeds of $558.35, totaling $628.35
per $1,000 Interest, as well as certain tax benefits. Since all of the
Partnership's properties have been sold, no additional quarterly distributions
are expected. Investors will not recover all of their original investment.
<PAGE>
BALCOR EQUITY PROPERTIES-XII
(An Illinois Limited Partnership)
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
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(a) Exhibits:
(4) Certificate of Limited Partnership set forth as Exhibit 4.1 to the
Registrant's Registration Statement on Form S-11 dated July 2, 1982
(Registration No. 2-76947) and Form of Confirmation regarding Interests in the
Registrant set forth as Exhibit 4.2 to the Registrant's Report on Form 10-Q for
the quarter ended September 30, 1992 (Commission File No. 0-11126) are hereby
incorporated herein by reference.
10) Material Contracts:
(a) Agreement of Sale relating to the sale of Somerset Village Apartments,
Tempe, Arizona previously filed as Exhibit 10 to the Registrant's Report on
Form 10-Q for the quarter ending June 30, 1996 is incorporated herein by
reference.
(b)(i) Agreement of Sale and attachment thereto relating to the sale of
Sandridge Apartments - Phase I, Pasadena, Texas, previously filed as Exhibit
2(a) to the Partnership's Current Report on Form 8-K dated August 27, 1996 is
incorporated herein by reference.
(ii) Modification Agreement relating to the sale of Sandridge Apartments -
Phase I, Pasadena, Texas, previously filed as Exhibit 2(b) to the Partnership's
Current Report on Form 8-K dated August 27, 1996 is incorporated herein by
reference.
(iii) Second Modification Agreement relating to the sale of Sandridge
Apartments - Phase I, Pasadena, Texas, previously filed as Exhibit 99 to the
Partnership's Current Report on Form 8-K dated September 25, 1996, is
incorporated herein by reference.
(iv) Letter Agreement relating to the sale of Sandridge Apartments - Phase I,
Pasadena, Texas, previously filed as Exhibit (c)(ii) to the Registrant's Report
on Form 10-Q for the quarter ended September 30, 1996, is incorporated herein
by reference.
(c)(i) Agreement of Sale and attachment thereto relating to the sale of DeFoors
Creek Apartments, Atlanta, Georgia, previously filed as Exhibit 2 to the
Partnership's Current Report on Form 8-K dated September 9 1996 is incorporated
herein by reference.
(ii) Letter dated October 2, 1996 relating to the termination of the contract
for the sale of DeFoors Creek Apartments, Atlanta, Georgia, previously filed as
Exhibit (10)(c)(ii) to the Registrant's Report on Form 10-Q for the quarter
ended September 30, 1996, is incorporated herein by reference.
<PAGE>
(iii) First Amendment to Agreement of Sale and Escrow Agreement dated October
10, 1996 reinstating the contract for the sale of DeFoors Creek Apartments,
Atlanta, Georgia, previously filed as Exhibit (10)(c)(iii)to the Registrant's
Report on Form 10-Q for the quarter ended September 30, 1996, is incorporated
herein by reference.
(iv) Second Amendment to Agreement of Sale and Escrow Agreement dated October
17, 1996 relating to the sale of DeFoors Creek Apartments, Atlanta, Georgia,
previously filed as Exhibit (10)(c)(iv) to the Registrant's Report on Form 10-Q
for the quarter ended September 30, 1996, is incorporated herein by reference.
(v) Letter dated October 23, 1996 relating to the termination of the contract
for the sale of DeFoors Creek Apartments, Atlanta, Georgia, previously filed as
Exhibit (10)(c)(v) to the Registrant's Report on Form 10-Q for the quarter
ended September 30, 1996, is incorporated herein by reference.
(vi) Third Amendment of Agreement of Sale and Escrow Agreement dated October
31, 1996 reinstating the contract for the sale of DeFoors Creek Apartments,
Atlanta, Georgia, previously filed as Exhibit (10)(c)(vi) to the Registrant's
Report on Form 10-Q for the quarter ended September 30, 1996, is incorporated
herein by reference.
(d)(i) Agreement of Sale and attachment thereto relating to the sale of Cedar
Ridge Apartments, Baytown, Texas, previously filed as Exhibit 2(i) to the
Partnership's Current Report on Form 8-K dated September 25, 1996 is
incorporated herein by reference.
(ii) Letter Agreement relating to the sale of Cedar Ridge Apartments, Baytown,
Texas, previously filed as Exhibit 2 (ii) to the Partnership's Current Report
on Form 8-K dated September 25, 1996 is incorporated herein by reference.
(27) Financial Data Schedule of the Registrant for the quarter ending March 31,
1997 is incorporated herein by reference.
(b) Reports on Form 8-K: No Reports on Form 8-K were filed during the quarter
ended March 31, 1997.
<PAGE>
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.
BALCOR EQUITY PROPERTIES-XII
By: /s/Thomas E. Meador
-----------------------------
Thomas E. Meador
President and Chief Executive Officer
(Principal Executive Officer) of Balcor
Partners - XII, the General Partner
By: /s/Jayne A. Kosik
------------------------------
Jayne A. Kosik
Managing Director and Chief Financial
Officer (Principal Accounting Officer) of
Balcor Partners - XII, the General Partner
Date: May 12,1997
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<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1997
<CASH> 11371
<SECURITIES> 0
<RECEIVABLES> 150
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 11521
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 11521
<CURRENT-LIABILITIES> 84
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 11437
<TOTAL-LIABILITY-AND-EQUITY> 11521
<SALES> 0
<TOTAL-REVENUES> 173
<CGS> 0
<TOTAL-COSTS> 96
<OTHER-EXPENSES> 64
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 13
<INCOME-TAX> 0
<INCOME-CONTINUING> 13
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13
<EPS-PRIMARY> .36
<EPS-DILUTED> .36
</TABLE>
