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, 1998
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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, 1998 and December 31, 1997
(Unaudited)
ASSETS
1998 1997
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Cash and cash equivalents $ 1,492,275 $ 1,801,748
Accounts and accrued interest
receivable 6,989 26,571
Prepaid expenses 1,372
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$ 1,500,636 $ 1,828,319
=============== ===============
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 26,743 $ 13,705
Due to affiliates 27,462 23,682
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Total liabilities 54,205 37,387
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Commitments and contingencies
Limited Partners' capital (37,447
Interests issued and outstanding) 1,500,843 1,832,932
General Partner's deficit (54,412) (42,000)
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Total partners' capital 1,446,431 1,790,932
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$ 1,500,636 $ 1,828,319
=============== ===============
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, 1998 and 1997
(Unaudited)
1998 1997
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Income:
Interest on short-term investments $ 20,515 $ 173,399
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Total income 20,515 173,399
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Expenses:
Property operating 53,019
Real estate taxes 42,742
Administrative 55,127 64,165
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Total expenses 55,127 159,926
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Net (loss) income $ (34,612) $ 13,473
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Net (loss) allocated to General Partner $ (12,412) None
=============== ===============
Net (loss) income allocated to Limited
Partners $ (22,200) $ 13,473
=============== ===============
Net (loss) income per Limited Partnership
Interest (37,447 issued and
outstanding) - Basic and Diluted $ (0.59) $ 0.36
=============== ===============
Distribution to Limited Partners $ 309,889 $ 8,425,575
=============== ===============
Distribution per Limited Partnership
Interest $ 8.28 $ 225.00
=============== ===============
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, 1998 and 1997
(Unaudited)
1998 1997
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Operating activities:
Net (loss) income $ (34,612) $ 13,473
Adjustments to reconcile net (loss)
income to net cash provided by
(used in) operating activities:
Net change in:
Accounts and accrued interest
receivable 19,582 165,459
Prepaid expenses (1,372)
Accounts payable 13,038 (199,819)
Due to affiliates 3,780 (6,392)
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Net cash provided by (used in)
operating activities 416 (27,279)
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Financing activities:
Distribution to Limited Partners (309,889) (8,425,575)
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Net cash used in financing activities (309,889) (8,425,575)
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Net change in cash and cash
equivalents (309,473) (8,452,854)
Cash and cash equivalents at
beginning of year 1,801,748 19,824,096
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Cash and cash equivalents at end of
period $ 1,492,275 $ 11,371,242
=============== ===============
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:
(a) The loss allocation between the Limited Partners and the General Partner
has been adjusted for financial statement purposes during 1998 in order that
the capital account balances more accurately reflect their remaining economic
interests as provided for in the Partnership Agreement.
(b) 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, 1998, 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 has retained a portion of the cash from the property sales to
satisfy obligations of the Partnership as well as establish a reserve for
contingencies. The timing of the termination of the Partnership and the 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 and costs stemming from litigation involving the Partnership,
including but not limited to, the lawsuits discussed in Note 4 of Notes to the
Financial Statements. Due to this litigation, the Partnership will not be
dissolved and the reserves will be held by the Partnership until the conclusion
of all contingencies. There can be no assurances as to the time frame for
conclusion of these contingencies.
3. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
quarter ended March 31, 1998 were:
Paid Payable
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Reimbursement of expenses to
the General Partner, at cost $ 4,003 $ 27,462
4. 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 state securities and common law violations
with regard to the property acquisition process of the Partnership, and to the
adequacy and accuracy of disclosures of information concerning, as well as
<PAGE>
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.
<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. As of March 31, 1998, the
Partnership has no properties remaining in its portfolio.
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 1997 for a more complete understanding of
the Partnership's financial position.
Operations
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Summary of Operations
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The Partnership recognized a net loss during the quarter ended March 31, 1998
as compared to income during the same period in 1997 primarily due to a large
decrease in interest income earned on short-term investments during 1998 and
the payment of operating expenditures and real estate tax expense related to
properties sold during 1997. Further discussion of the Partnership's
operations is summarized below.
1998 Compared to 1997
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Discussion of fluctuations between 1998 and 1997 refer to the quarters ended
March 31, 1998 and 1997.
During 1997, the Partnership paid additional expenditures related to certain of
the properties sold during 1996. As a result, the Partnership recognized
property operating expense during 1997.
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. As a result, the Partnership recognized real estate tax expense
during 1997.
Administrative expenses decreased during 1998 as compared to 1997 primarily due
to a decrease in accounting fees which was partially offset by higher legal
fees in 1998.
Liquidity and Capital Resources
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The cash position of the Partnership decreased by approximately $309,500 as of
<PAGE>
March 31, 1998 as compared to December 31, 1997 primarily due to a distribution
to the Limited Partners from remaining available Net Cash Proceeds. Cash of
approximately $400 was provided by operating activities consisting of interest
income on short-term investments which was substantially offset by the payment
of administrative expenses. Cash used in financing activities consisted of the
payment of a distribution to the Limited Partners of approximately $309,900.
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 has retained a portion of the cash from the property sales 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 include legal and
other fees and costs stemming from litigation involving the Partnership
including, but not limited to, the lawsuits discussed in Note 4 of Notes to
Financial Statements. Due to this litigation, the Partnership will not be
dissolved and the reserves will be held by the Partnership until the conclusion
of all contingencies. There can be no assurances as to the time frame for
conclusion of these contingencies.
To date, Limited Partners have received distributions of Net Cash Receipts of
$70 and Net Cash Proceeds of $566.63, totaling $636.63 per $1,000 Interest, as
well as certain tax benefits. No distributions are anticipated to be made prior
to the termination of the Partnership. However, after paying final partnership
expenses, any remaining cash reserves will be distributed. Limited Partners
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 Quarterly
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 Registrant'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 Registrant'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
Registrant'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
Quarterly 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 Quarterly 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
Quarterly 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 Quarterly 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 Quarterly 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
Quarterly 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
Registrant'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 Registrant'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,
1998 is attached hereto.
(b) Reports on Form 8-K: No Reports on Form 8-K were filed during the quarter
ended March 31, 1998.
<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
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Jayne A. Kosik
Senior Managing Director and Chief Financial
Officer (Principal Accounting Officer) of
Balcor Partners - XII, the General Partner
Date: April 30, 1998
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<PAGE>
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<PERIOD-END> MAR-31-1998
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