U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
X ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF
1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1995
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number 0-13309
ANGELES PARTNERS XII
California 95-3903623
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer Identification No.)
One Insignia Financial Plaza, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (864) 239-1000
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Limited Partnership Units
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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
Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B contained in this form, and no disclosure will be contained,
to the best of registrant's knowledge in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. X
State issuer's revenues for its most recent fiscal year. $20,845,938
State the aggregate market value of the voting stock held by nonaffiliates of
the Registrant. The aggregate market value shall be computed by reference to
the price at which the stock was sold, or the average bid and asked prices of
such stock, as of a specified date within the past 60 days. Market value
information for Registrant's Partnership Interests is not available. Should a
trading market develop for these units, it is the Registrant's belief that such
trading would not exceed $25,000,000.
DOCUMENTS INCORPORATED BY REFERENCE
None
PART I
Item 1. Description of Business
Angeles Partners XII (the "Partnership" or the "Registrant") is a publicly-
held limited partnership organized under the California Uniform Limited
Partnership Act pursuant to the amended Certificate and Agreement of Limited
Partnership (hereinafter referred to as the "Agreement") dated May 26, 1983.
The Partnership's Managing General Partner is Angeles Realty Corporation II, a
California corporation. The Elliott Accommodation Trust and the Elliott Family
Partnership, a California limited partnership, are the Non-Managing General
Partners. The Managing General Partner and the Non-Managing General Partners
are herein collectively referred to as the "General Partners".
The Partnership, through its public offering of Limited Partnership Units,
sold 44,773 units aggregating $44,773,000. The Managing General Partner
contributed capital in the amount of $1,000 for a 1% interest in the
Partnership. The Partnership was formed for the purpose of acquiring fee and
other forms of equity interests in various types of real property. The
Partnership presently owns ten investment properties and owns a general
partnership interest in an eleventh property. The Managing General Partner of
the Registrant intends to maximize the operating results and, ultimately, the
net realizable value of each of the Registrant's properties in order to achieve
the best possible return for the investors. Such results may best be achieved
through property sales, refinancings, debt restructurings or relinquishment of
the assets. The Registrant intends to evaluate each of its holdings
periodically to determine the most appropriate strategy for each of the assets.
The Managing General Partner's policy is to only commit cash from operations and
financings secured by the real property to support operations, capital
improvements and repayment of debt on a property specific basis.
The Partnership has no full time employees. The Managing General Partner
is vested with full authority as to the general management and supervision of
the business and affairs of the Partnership. Limited Partners and Non-Managing
General Partners have no right to participate in the management or conduct of
such business and affairs. Insignia Management Group, L.P. provides day-to-day
management to all of the Partnership's investment properties.
The business in which the Partnership is engaged is highly competitive, and
the Partnership is not a significant factor in its industry. Each investment
property is located in or near a major urban area and, accordingly, competes for
rentals not only with similar properties in its immediate area but with hundreds
of similar properties throughout the urban area. Such competition is primarily
on the basis of location, rents, services and amenities. In addition, the
Partnership competes with significant numbers of individuals and organizations
(including similar partnerships, real estate investment trusts and financial
institutions) with respect to the sale of improved real properties, primarily on
the basis of the prices and terms of such transactions.
A further description of the Partnership's business is included in
"Management's Discussion and Analysis or Plan of Operation" included in "Item 6"
of this Form 10-KSB.
Item 2. Description of Properties:
The following table sets forth the Registrant's investments in
properties:
<TABLE>
<CAPTION>
Date of
Property Purchase Type of Ownership Use
<S> <C> <C> <C>
Briarwood Apartments 06/25/85 Fee ownership subject to Apartment
Cedar Rapids, Iowa first and second mortgages 73 units
Chambers Ridge Apartments 07/26/84 Fee ownership subject to Apartment
Harrisburg, PA first and second mortgages 324 units
Cooper Point Plaza 12/14/84 Fee ownership subject to Retail Center
Olympia, Washington a first mortgage 173,473 sq.ft.
Gateway Gardens Apartments 12/21/84 Fee ownership subject to Apartment
Cedar Rapids, Iowa first and second mortgages 328 units
Hunters Glen Apartments - IV 01/31/85 Fee ownership subject to Apartment
Plainsboro, New Jersey a first mortgage 264 units
Hunters Glen Apartments - V 01/31/85 Fee ownership subject to Apartment
Plainsboro, New Jersey first and second mortgages 304 units
Hunters Glen Apartments - VI 01/31/85 Fee ownership subject to Apartment
Plainsboro, New Jersey first and second mortgages 328 units
Pickwick Place Apartments 05/11/84 Fee ownership subject to Apartment
Indianapolis, Indiana a first mortgage 336 units
Southpointe Apartments 06/12/85 Fee ownership subject to Apartment
Bedford Heights, Ohio a first mortgage 499 units
Twin Lake Towers Apartments 03/30/84 Fee ownership subject to Apartment
Westmont, Illinois first and second mortgages 399 units
</TABLE>
During 1995, Hunters Glen Apartments was divided into three individual
properties to better facilitate refinancing.
The Partnership also has a 44.5% interest in Princeton Golf Course Joint
Venture ("Joint Venture"). The Partnership entered into a General Partnership
Agreement with Angeles Income Properties, Ltd. II and Angeles Partners XI, both
California partnerships and affiliates of the Managing General Partner, to form
the Joint Venture. The property owned by the Joint Venture, as of December 31,
1995, is summarized as follows:
<TABLE>
<CAPTION>
Date of
Property Purchase Type of Ownership Use
<S> <C>
Princeton Meadows Fee ownership subject to Golf Course
Golf Course 07/26/91 a first mortgage
Princeton, New Jersey
The Joint Venture is carried on Angeles Partners XII balance sheet on the
equity method and is included in "Investment in joint venture".
Schedule of Properties:
</TABLE>
<TABLE>
<CAPTION>
Gross
Carrying Accumulated Federal
Property Value Depreciation Rate Method Tax Basis
<S> <C> <C> <C> <C>
Briarwood Apartments $ 1,756,300 $ 951,393 5-40 yrs (1) $ 777,778
Chambers Ridge Apartments 9,289,328 5,380,585 5-40 yrs (1) 3,770,668
Cooper Point Plaza 8,855,361 4,274,001 5-40 yrs (1) 5,434,662
Gateway Gardens Apartments 7,115,150 4,077,378 5-40 yrs (1) 2,615,240
Hunters Glen Apartments-IV 10,915,183 5,154,339 5-40 yrs (1) 5,192,335
Hunters Glen Apartments-V 12,715,380 6,042,450 5-40 yrs (1) 6,005,308
Hunters Glen Apartments-VI 13,698,170 6,546,253 5-40 yrs (1) 6,398,966
Pickwick Place Apartments 8,550,813 4,589,666 5-40 yrs (1) 3,707,135
Southpointe Apartments 9,838,709 5,502,615 5-40 yrs (1) 3,786,626
Twin Lake Towers Apartments 14,838,061 8,514,842 5-40 yrs (1) 5,122,784
$97,572,455 $51,033,522 $42,811,502
<FN>
(1) Straight line and accelerated
See "Note A" of the financial statements included in "Item 7" for a description
of the Partnership's depreciation policy.
Schedule of Mortgages:
</TABLE>
<TABLE>
<CAPTION>
Principal Principal
Balance At Balance
December 31, Interest Period Maturity Due At
Property 1995 Rate Amortized Date Maturity
<S> <C> <C> <C> <C> <C>
Briarwood Apartments
1st mortgage $ 1,596,400 7.83% 28.67 yrs 10/2003 $ 1,403,524
2nd mortgage 50,490 7.83% (1) 10/2003 50,490
Chambers Ridge Apartments
1st mortgage 5,514,871 7.83% 28.67 yrs 10/2003 4,848,750
2nd mortgage 174,420 7.83% (1) 10/2003 174,420
Cooper Point Plaza
1st mortgage 4,233,090 10.5% 28 yrs 09/2012 42,502
Gateway Gardens Apartments
1st mortgage 6,434,021 7.83% 28.67 yrs 10/2003 5,656,905
2nd mortgage 203,490 7.83% (1) 10/2003 203,490
Hunters Glen Apartments-IV
1st mortgage 8,478,994 8.43% 28.67 yrs 10/2003 7,787,438
Hunters Glen Apartments-V
1st mortgage 9,006,370 7.83% 28.67 yrs 10/2003 7,919,654
2nd mortgage 284,886 7.83% (1) 10/2003 284,886
Hunters Glen Apartments-VI
1st mortgage 9,373,977 7.83% 28.67 yrs 10/2003 8,242,905
2nd mortgage 296,514 7.83% (1) 10/2003 296,514
Pickwick Place Apartments
1st mortgage 6,569,259 9.1% 28 yrs 05/2005 5,775,131
</TABLE>
<TABLE>
<CAPTION>
Principal Principal
Balance At Balance
December 31, Interest Period Maturity Due At
Property 1995 Rate Amortized Date Maturity
<S> <C> <C> <C> <C>
Southpointe Apartments
1st mortgage 11,000,000 8.59% (1) 07/1999 11,000,000
Twin Lake Towers Apartments
1st mortgage 11,126,376 7.83% 28.67 yrs 10/2003 9,782,578
2nd mortgage 351,900 7.83% (1) 10/2003 351,900
74,695,058 $63,821,087
Less unamortized discounts (1,322,831)
$73,372,227
<FN>
(1) Interest only payments.
Average annual rental rate and occupancy for 1995 and 1994 for each property:
Average Annual Average Annual
Rental Rates Occupancy
Property 1995 1994 1995 1994
Briarwood Apartments $6,006/unit $5,911/unit 97% 98%
Chambers Ridge Apartments 6,708/unit 6,625/unit 92% 91%
Cooper Point Plaza 5.84/s.f. 5.47/s.f. 93% 97%
Gateway Gardens Apartments 6,048/unit 5,758/unit 97% 97%
Hunters Glen Apartments - IV 8,360/unit 8,021/unit 94% 92%
Hunters Glen Apartments - V 8,365/unit 8,007/unit 95% 92%
Hunters Glen Apartments - VI 8,298/unit 7,909/unit 94% 93%
Pickwick Place Apartments 6,202/unit 5,960/unit 95% 93%
Southpointe Apartments 5,437/unit 5,308/unit 85% 88%
Twin Lake Towers Apartments 7,724/unit 7,508/unit 97% 96%
As noted under "Item 1. Description of Business", the real estate
industry is highly competitive. All of the properties of the Partnership are
subject to competition from other residential apartment complexes and commercial
buildings in the area. The Managing General Partner believes that all of the
properties are adequately insured. The multi-family residential properties'
lease terms are for one year or less. No residential tenant leases 10% or more
of the available rental space.
The following is a schedule of the lease expirations for the
Partnership's commercial property for the years 1996-2005:
Number of Square Annual % of Gross
Expirations Feet Rent Annual Rent
Cooper Point Plaza
1996 3 4,200 $ 44,875 5.2%
1997 4 12,224 127,364 14.7%
1998 2 2,400 24,000 2.8%
1999 1 1,200 14,400 1.7%
2000 2 10,727 122,429 14.1%
2001 0 0 0 0%
2002 0 0 0 0%
2003 0 0 0 0%
2004 2 32,538 356,031 41.2%
2005 1 70,000 36,500 4.2%
The following schedule reflects information on tenants occupying 10% or
more of the leasable square footage for each property:
Square Footage Annual Rent Lease
Leased Per Square Foot Expiration
Cooper Point Plaza
Nature of Business
Discount Retail 70,000 $0.52 02/28/05
Drug Store 19,527 7.27 09/30/04
Real estate taxes and rates in 1995 for each property were:
1995 1995
Billing Rate
Briarwood $ 63,262* 3.3562
Chambers Ridge 152,831 1.3174
Cooper Point Plaza 99,486 1.5426
Gateway Gardens 223,524* 3.2248
Hunters Glen - 1 245,904 2.1800
Hunters Glen - 2 265,960 2.1800
Hunters Glen - 3 269,448 2.1800
Pickwick Place 211,950** 8.2680
Southpointe 230,246 5.9804
Twin Lake Towers 279,741** 6.1793
* Represents a fiscal year ending June 30, 1995.
** Estimate for 1995 billing. Tax bills not yet received.
Item 3. Legal Proceedings
Angeles Mortgage Investment Trust ("AMIT"), a real estate investment trust,
made a loan to the Joint Venture in September 1991 in the amount of $1,280,000,
secured by the Joint Venture's real property known as Princeton Meadows Golf
Course. The Partnership believed that the loan was a non-recourse obligation.
AMIT asserted that this loan was recourse by virtue of an amendment purportedly
entered into as of November 1, 1992, but which the Partnership has been informed
and believes was actually executed in December 1992 ("Note Modifications"). The
Partnership has been further informed and believes that the amendment was
executed at the direction of Angeles Corporation ("Angeles") by an individual in
his purported capacity as an officer of the Managing General Partner of the
Partnership and the Joint Venture at a time when such person was not in fact an
officer of such entities. Accordingly, the Partnership and the Joint Venture
filed Proofs of Claim in the Angeles bankruptcy proceeding with respect to the
purported amendment. Additionally, the Partnership and the Joint Venture filed
a Proof of Claim in the Angeles Funding Corporation and Angeles Real Estate
Corporation bankruptcy proceedings on similar grounds. Both Angeles Funding
Corporation and Angeles Real Estate Corporation are affiliates of Angeles. In
addition, Angeles has agreed to cooperate with the Partnership and the Joint
Venture in any action commenced by or against them by AMIT asserting that the
$1,280,000 obligation owed to AMIT is recourse to the Partnership. Angeles
further agreed to waive the attorney-client privilege with respect to any
information relating to the Note Modifications. Accordingly, the Partnership
and the Joint Venture withdrew their Proofs of Claim on August 9, 1995.
MAE GP Corporation ("MAE GP"), an affiliate of the Managing General Partner,
owns 1,675,113 Class B Shares of AMIT. MAE GP has the option to convert these
Class B Shares, in whole or in part, into Class A Shares on the basis of 1 Class
A Share for every 49 Class B Shares. These Class B Shares entitle MAE GP to
receive 1.2% of the distributions of net cash distributed by AMIT. These Class
B Shares also entitle MAE GP to vote on the same basis as Class A Shares which
allows MAE GP to vote approximately 37% of the total shares (unless and until
converted to Class A Shares at which time the percentage of the vote controlled
represented by the shares held by MAE GP would approximate 1.2% of the vote).
Between the date of acquisition of these shares (November 24, 1992) and March
31, 1995, MAE GP declined to vote these shares. Since that date, MAE GP voted
its shares at the 1995 annual meeting in connection with the election of
trustees and other matters. MAE GP has not exerted, and continues to decline to
exert, any management control over or participate in the management of AMIT.
MAE GP may choose to vote these shares as it deems appropriate in the future.
In addition, Liquidity Assistance, LLC, ("LAC"), an affiliate of the Managing
General Partner and an affiliate of Insignia Financial Group, Inc., which
provides property management and partnership administration services to the
Partnership, owns 63,200 Class A Shares of AMIT. These Class A Shares entitle
LAC to vote approximately 1.5% of the total shares.
As part of a settlement of certain disputes with AMIT, MAE GP granted to AMIT
an option to acquire the Class B Shares owned by it. This option can be
exercised at the end of 10 years or when all loans made by AMIT to partnerships
affiliated with MAE GP as of November 9, 1994, which is the date of execution of
a definitive Settlement Agreement, have been paid in full, but in no event prior
to November 9, 1997. AMIT delivered to MAE GP cash in the sum of $250,000 at
closing, which occurred April 14, 1995, as payment for the option. Upon
exercise of the option, AMIT will remit to MAE GP an additional $94,000.
Simultaneously with the execution of the option, MAE GP executed an
irrevocable proxy in favor of AMIT the result of which is MAE GP will be able to
vote the Class B Shares on all matters except those involving transactions
between AMIT and MAE GP affiliated borrowers or the election of any MAE GP
affiliate as an officer or trustee of AMIT. On those matters, MAE GP granted to
the AMIT trustees, in their capacity as trustees of AMIT, proxies with regard to
the Class B Shares instructing such trustees to vote said Class B Shares in
accordance with the vote of the majority of the Class A Shares voting to be
determined without consideration of the votes of "Excess Class A Shares" as
defined in Section 6.13 of the Declaration of Trust of AMIT.
Except as mentioned above, the Partnership is not involved in any legal
proceedings other than those arising in the normal course of business. The
Managing General Partner believes that any losses experienced as a result of
such proceedings will not have a material adverse effect upon the Partnership's
operations.
Item 4. Submission of Matters to a Vote of Security Holders
The Unit holders of the Partnership did not vote on any matter during the
fourth quarter of the fiscal year covered by this report.
PART II
Item 5. Market for the Partnership's Common Equity and Related Security Holder
Matters
The Partnership, a publicly-held limited partnership, sold 44,773 Limited
Partnership Units during its offering period through February 13, 1985, and
currently has 4,189 Limited Partners of record. There is no intention to sell
additional Limited Partnership Units nor is there an established market for
these units.
The Partnership has discontinued making cash distributions from operations
until and unless the financial condition of the Partnership and other relevant
factors warrant resumption of distributions.
Item 6. Management's Discussion and Analysis or Plan of Operation
Results of Operations
This item should be read in conjunction with the financial statements and
other items contained elsewhere in this report.
The Partnership's net loss for the year ended December 31, 1995, was
$1,496,488 versus a net loss of $3,412,173 for the year ended December 31, 1994.
This decrease in net loss can be attributed to an increase in revenues and a
decrease in expenses.
Rental income increased partially due to an increase in average rental rates
at all of the properties. Occupancy was consistent with 1994 or higher at all
the investment properties, except Cooper Point Plaza and Southpointe Apartments.
Cooper Point Plaza's occupancy decreased due to a major tenant move-out in the
fourth quarter of 1995. The Managing General Partner attributes the decrease in
occupancy at Southpointe Apartments to personnel turnovers in property staff and
upgrading of the tenant base.
General and administrative expenses decreased due to decreases in professional
fees and cost reimbursements for partnership administration. A milder winter in
1995, as compared to 1994, resulted in a decrease in snow removal and
maintenance expenses. In addition, the Partnership undertook a significant
amount of improvements in 1994 using improvement funds held in restricted escrow
accounts. These improvements were undertaken to a lesser extent in 1995,
contributing to a decrease in maintenance expense in 1995. Interest expense for
1995 decreased due to the pay-off of the second mortgage on Pickwick Place
Apartments in 1994 along with the refinancing, in 1995, of Pickwick Place
Apartments and Hunter's Glen Apartments IV at lower interest rates.
Depreciation expense increased in 1995 at the Hunter's Glen Apartments
properties and Pickwick Place Apartments. This increase is due to depreciation
of the additional capital improvements in 1995. Property taxes increased
primarily due to an increase in the assessed value of the Twin Lake Towers
Apartments property.
The Partnership has a 44.5% investment in the Princeton Meadows Golf Course
Joint Venture. For the year ended December 31, 1995, the Partnership realized
equity in the loss of the Joint Venture of $139,879, as compared to equity in
the loss of the Joint Venture of $83,779 for the year ended December 31, 1994
(See "Note H - Investment in Joint Venture"). The increased loss for the year
ended December 31, 1995, versus the year ended December 31, 1994, can be
attributed to the Partnership's proportionate share of a $199,000 environmental
liability established for the estimated cost of the clean-up of contamination
relating to an underground fuel storage tank (See "Note H" for further
discussion).
The Partnership realized a loss on disposal of assets of $43,920 in 1995 and
$332,501 in 1994. These losses were due to the reroofing work done on Hunters
Glen Apartments VI, Gateway Gardens Apartments, Briarwood Apartments, Chambers
Ridge Apartments and Pickwick Place Apartments in 1995 and Gateway Gardens
Apartments and Hunters Glen Apartments IV in 1994.
The Managing General Partner continues to monitor the rental market
environment in each location of its properties to assess the feasibility of
increasing rents, to maintain or increase occupancy levels and to protect the
Partnership from increases in expense. The Managing General Partner expects to
be able, at a minimum, to continue protecting the Partnership from the burden of
inflation-related increases in expenses by increasing rents and maintaining a
high overall occupancy level. However, rental concessions and rental reductions
needed to offset softening market conditions could affect the ability to sustain
this plan.
Capital Resources and Liquidity
The Partnership had unrestricted cash and cash equivalents of $3,643,002 at
December 31, 1995, versus $2,046,956 at December 31, 1994. Cash flows from
operating activities increased primarily due to the decrease in net loss,
discussed above. Cash used in investing activities was greater in 1995, as
compared to 1994, due to an increase in deposits to and a decrease in
withdrawals from restricted escrows. In 1995, cash was provided by financing
activities primarily due to proceeds from the refinancing of Hunter's Glen
Apartments IV and Pickwick Place Apartments. In 1994, cash was used in
financing activities resulting from repayments on mortgage notes payable. For
the year ended December 31, 1995, the Partnership had an increase in cash and
cash equivalents of $1,596,046 as compared to a decrease of $521,174 for the
year ended December 31, 1994.
On April 1, 1994, in an effort to place Pickwick Place Apartments in a better
position to obtain refinancing, the Managing General Partner restructured this
property into a lower tier partnership, known as Pickwick Place AP XII, L.P. in
which Angeles Partners XII is the 99% limited partner. Although legal ownership
of the asset was transferred to a new entity, Angeles Partners XII retained
substantially all economic benefits from the property.
On April 17, 1995, the Partnership refinanced the mortgage encumbering
Pickwick Place Apartments. The total mortgage indebtedness, which carried a
stated interest rate of 10.5%, was in default since its maturity date in June
1994. The new mortgage indebtedness of $6,600,000 carries a stated interest
rate of 9.10% and is being amortized over 28 years with a balloon payment due
April 1, 2005. Total capitalized loan costs incurred for the refinancing were
$214,136 and are being amortized over the life of the loan.
On August 7, 1995, the Partnership refinanced the mortgage encumbering Hunter
Glen Apartments IV. The total mortgage indebtedness, which carried a variable
interest rate based on the monthly LIBOR rate plus 2.375% (8.65% at
refinancing), was in default since its maturity date in December 1994. The new
mortgage indebtedness of $8,500,000 carries a fixed rate of 8.43% with a balloon
payment due October 15, 2003. Total capitalized loan costs incurred for the
refinancing were $78,622 and are being amortized over the life of the loan.
The Partnership's primary source of cash is from the operations of its
properties and from financing placed on such properties. Cash from these
sources is utilized for property operations, capital improvements, and/or
repayment of debt. The sufficiency of existing liquid assets to meet future
liquidity and capital expenditure requirements is directly related to the level
of capital expenditures required at the investment properties to adequately
maintain the physical assets and other operating needs of the Partnership. The
Partnership indebtedness amounts to $73,372,227, net of unamortized discounts,
with maturity dates ranging from July 1999 to September 2012, at which point
$63,821,087 of balloon payments will be due. Future cash distributions will
depend on the levels of net cash generated from operations, refinancings and
property sales. There were no cash distributions in 1995.
Item 7. Financial Statements
ANGELES PARTNERS XII
LIST OF FINANCIAL STATEMENTS
Report of Independent Auditors
Balance Sheet - December 31, 1995
Statements of Operations - Years ended December 31, 1995 and 1994
Statements of Changes in Partners' Deficit - Years ended December 31, 1995
and 1994
Statements of Cash Flows - Years ended December 31, 1995 and 1994
Notes to Financial Statements
Report of Ernst & Young LLP, Independent Auditors
The Partners
Angeles Partners XII
We have audited the accompanying balance sheet of Angeles Partners XII as of
December 31, 1995, and the related statements of operations, changes in
partners' deficit and cash flows for each of the two years in the period ended
December 31, 1995. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Angeles Partners XII as of
December 31, 1995, and the results of its operations and its cash flows for each
of the two years in the period ended December 31, 1995, in conformity with
generally accepted accounting principles.
/S/ ERNST & YOUNG LLP
Greenville, South Carolina
February 19, 1996
ANGELES PARTNERS XII
BALANCE SHEET
December 31, 1995
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Assets
Cash and cash equivalents:
Unrestricted $ 3,643,002
Restricted--tenant security deposits 898,498
Investment in joint venture (Note G) 66,847
Accounts receivable, net of allowance
of $15,987 140,477
Escrows for taxes 598,603
Restricted escrows 1,677,276
Other assets 2,318,126
Investment properties (Notes C and F):
Land $ 10,340,868
Buildings and related personal
property 87,231,587
97,572,455
Less accumulated depreciation (51,033,522) 46,538,933
$ 55,881,762
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 501,678
Tenant security deposits 862,840
Accrued taxes 1,015,860
Other liabilities 917,445
Mortgage notes payable, (Notes C and F) 73,372,227
Partners' Deficit
General partners $ (592,866)
Limited partners (44,773 units issued and
outstanding) (20,195,422) (20,788,288)
$ 55,881,762
See Accompanying Notes to Financial Statements
ANGELES PARTNERS XII
STATEMENTS OF OPERATIONS
Years Ended December 31,
1995 1994
Revenues:
Rental income $19,504,826 $18,979,376
Other income 1,341,112 1,222,022
Total revenues 20,845,938 20,201,398
Expenses:
Operating 5,401,164 5,430,946
General and administrative 568,405 812,097
Property management fees (Note E) 1,031,693 989,076
Maintenance 2,149,538 2,999,718
Depreciation 4,573,775 4,342,644
Amortization 33,236 29,610
Interest 6,562,955 6,888,989
Property taxes 2,067,413 1,919,523
Bad debt (recovery) expense, net (7,261) 23,265
Tenant reimbursements (222,291) (238,577)
Total expenses 22,158,627 23,197,291
Loss before equity in loss of joint
venture and loss on disposal of asset (1,312,689) (2,995,893)
Equity in loss of joint venture (Note G) (139,879) (83,779)
Loss on disposal of asset (43,920) (332,501)
Net loss $(1,496,488) $(3,412,173)
Net loss allocated to general
partners (1%) $ (14,965) $ (34,122)
Net loss allocated to limited
partners (99%) (1,481,523) (3,378,051)
$(1,496,488) $(3,412,173)
Net loss per limited partnership unit $ (33.09) $ (75.45)
See Accompanying Notes to Financial Statements
ANGELES PARTNERS XII
STATEMENT OF CHANGES IN PARTNERS' DEFICIT
</TABLE>
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partners Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 44,773 $ 1,000 $ 44,773,000 $ 44,774,000
Partners' deficit at
December 31, 1993 44,773 $(543,779) $(15,335,848) $(15,879,627)
Net loss for the year
ended December 31, 1994 -- (34,122) (3,378,051) (3,412,173)
Partners' deficit at
December 31, 1994 44,773 (577,901) (18,713,899) (19,291,800)
Net loss for the year
ended December 31, 1995 -- (14,965) (1,481,523) (1,496,488)
Partners' deficit at
December 31, 1995 44,773 $(592,866) $(20,195,422) $(20,788,288)
<FN>
See Accompanying Notes to Financial Statements
ANGELES PARTNERS XII
STATEMENTS OF CASH FLOWS
</TABLE>
<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net loss $(1,496,488) $(3,412,173)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation 4,573,775 4,342,644
Amortization of discounts, loan costs, and
leasing commissions 397,851 564,821
Bad debt expense -- 23,265
Loss on disposal of asset 43,920 332,501
Equity in loss of joint venture 139,879 83,779
Change in accounts:
Restricted cash (17,241) (9,722)
Accounts receivable (7,631) (61,014)
Escrows for taxes 96,132 21,565
Other assets (43,490) (164,310)
Accounts payable (233,338) 201,098
Tenant security deposit liabilities (17,251) 28,283
Accrued taxes 63,642 52,713
Other liabilities 290,591 97,994
Net cash provided by operating
activities: 3,790,351 2,101,444
Cash flows from investing activities:
Property improvements and replacements (2,143,697) (2,104,340)
Deposits to restricted escrows (1,016,388) (208,226)
Insurance proceeds -- 14,396
Withdrawals from restricted escrows 622,660 1,381,258
Net cash used in investing activities (2,537,425) (916,912)
Cash flows from financing activities:
Repayment of mortgage notes payable -- (800,000)
Payments on mortgage notes payable (5,964,122) (595,170)
Proceeds from refinancing 6,600,000 --
Loan costs (292,758) (310,536)
Net cash provided by (used in)
financing activities 343,120 (1,705,706)
Net increase (decrease) in cash and
cash equivalents 1,596,046 (521,174)
Cash and cash equivalents at beginning of year 2,046,956 2,568,130
Cash and cash equivalents at end of year $ 3,643,002 $ 2,046,956
Supplemental disclosure of cash flow
information
Cash paid for interest $ 5,965,108 $ 6,287,679
<FN>
See Accompanying Notes to Financial Statements
ANGELES PARTNERS XII
Notes to Financial Statements
December 31, 1995
Note A - Organization and Significant Accounting Policies
Organization: Angeles Partners XII (the "Partnership or "Registrant") is a
California limited partnership organized on May 26, 1983, to acquire and operate
residential and commercial real estate properties. The Partnership's Managing
General Partner is Angeles Realty Corporation II ("ARC II"), an affiliate of
Insignia Financial Group, Inc. As of December 31, 1995, the Partnership
operates nine residential properties and one commercial property in or near
major urban areas in the United States and owns a general partner interest in a
golf course.
Principles of Consolidation: The financial statements include the accounts of
the Partnership and its majority owned partnerships. All significant
interpartnership balances have been eliminated. Minority interest is immaterial
and not shown separately in the financial statements.
Cash and Cash Equivalents: The Partnership considers all highly liquid
investments with a maturity when purchased of three months or less to be cash
equivalents. At certain times, the amount of cash deposited at a bank may
exceed the limit on insured deposits.
Tenant Security Deposits: The Partnership requires security deposits from all
apartment lessees for the duration of the lease. Deposits are refunded when the
tenant vacates the apartment if there has been no damage to the unit.
Loan Costs: Loan costs of $2,719,920 are included in "Other assets" and are
being amortized on a straight-line basis over the life of the loans.
Accumulated amortization is $791,943 at December 31, 1995.
Restricted escrows:
Capital Improvement - At the time of the refinancings of the mortgages,
encumbering Briarwood Apartments, Chambers Ridge Apartments, Gateway
Gardens Apartments, Hunters Glen Apartments and Twin Lake Towers
Apartments, $1,610,384 of the proceeds were designated for "Capital
Improvement Escrows" for certain capital improvements. The balance in the
Capital Improvement Escrows at December 31, 1995, is $471,529. Any excess
funds will be released for property operations in 1996.
Replacement Reserve - In conjunction with the refinancing of the mortgage
encumbering Pickwick Place Apartments on April 17, 1995, a replacement
reserve was established to fund certain nonrecurring costs for interior
and exterior capital improvements at the property. The balance in this
escrow account is $481,386 at December 31, 1995.
Note A - Organization and Significant Accounting Policies (continued)
General - In addition to the Capital Improvement Escrows, General Escrow
Accounts of $711,274 were established in conjunction with the
refinancings. These funds were established to make necessary repairs and
replacements of existing improvements, debt service, out-of-pocket
expenses incurred for ordinary and necessary administrative tasks, and
payment of real property taxes and insurance premiums. The Partnership is
required to deposit net operating income (as defined in the mortgage note)
from the refinanced properties to the General Escrow Accounts until the
reserve account equals $400 per apartment unit or $808,000. The balance
in the General Escrow Accounts at December 31, 1995, is $724,361.
Joint Venture: The Partnership accounts for its 44.5% investment in Princeton
Meadows Golf Course Joint Venture ("Joint Venture") using the equity method of
accounting (see "Note H"). Under the equity method, the Partnership records its
equity interest in earnings or losses of the Joint Venture; however, the
investment in the Joint Venture will be recorded at an amount less than zero (a
liability) to the extent of the Partnership's share of net liabilities of the
Joint Venture.
Investment Properties: Prior to the fourth quarter of 1995, investment
properties were carried at the lower of cost or estimated fair value, which was
determined using the higher of the property's non-recourse debt amount, when
applicable, or the net operating income of the investment property capitalized
at a rate deemed reasonable for the type of property. During the fourth quarter
of 1995 the Partnership adopted FASB Statement No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of",
which requires impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets'
carrying amount. The impairment loss is measured by comparing the fair value of
the asset to its carrying amount. The effect of adoption was not material.
Depreciation: Depreciation is computed utilizing accelerated and straight-line
methods over the estimated useful lives of the investment properties and related
personal property. For Federal income tax purposes, depreciation is computed by
using the straight-line method over an estimated life of 5 to 20 years for
personal property and 15 to 40 years for real property.
Allocations and Distributions to Partners: The Partnership will allocate all
profits, losses and distributions related to the operations of its investment
properties 1% to the General Partners and 99% to the Limited Partners. All
profits, losses and distributions related to the sales and/or refinancing of its
investment properties will be allocated in accordance with the Agreement.
Except as discussed below, the Partnership will allocate distributions 1% to the
General Partners and 99% to the Limited Partners.
Note A - Organization and Significant Accounting Policies (continued)
Upon the sale or other disposition, or refinancing, of any asset of the
Partnership, the distributable net proceeds shall be distributed as follows:
(i) to the Partners in proportion to their interests until the Limited Partners
have received cumulative distributions equal to their original capital
contributions reduced by the amount of any previous distributions; (ii) to the
Partners until the Limited Partners have received distributions from all sources
equal to their 6% cumulative distribution; (iii) to the Managing General Partner
until it has received an amount equal to 3% of the aggregate Disposition Prices
of all properties or other investments sold or otherwise disposed of, or
refinanced; (iv) to the Partners in proportion to their interests until the
Limited Partners have received cumulative distributions from all sources equal
to 150% of the Capital Contribution of the Limited Partners; (v) to the Managing
General Partner until it has received an amount equal to 17.6% of the
distributions made pursuant to (iv); and (vi) 85% to the Limited Partners and
non-Managing General Partners in proportion to their interests and 15%
("Incentive Interest") to the Managing General Partner.
Lease Commissions: Lease commissions are being amortized using the straight
line method over the term of the respective leases.
Leases: The Partnership generally leases apartment units for twelve-month terms
or less. Commercial building lease terms are from twelve months to ten years.
Use of Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Fair Value: In 1995, the Partnership implemented Statement of Financial
Accounting Standards No. 107, "Disclosure about Fair Value of Financial
Instruments," which requires disclosure of fair value information about
financial instruments for which it is practicable to estimate that value. The
carrying amount of the Partnership's cash and cash equivalents approximates fair
value due to short-term maturities. The Partnership estimates the fair value of
its fixed rate mortgage by discounted cash flow analysis, based on estimated
borrowing rates currently available to the Partnership (Note C).
Reclassifications: Certain reclassifications have been made to the 1994
balances to
conform to the 1995 presentation.
Note B - Hunters Glen (Phase I) AP XII L.P. and Pickwick Place AP XII L.P.
To facilitate the refinancing of Hunters Glen Apartments-VI, the property was
restructured into a lower tier partnership, known as Hunters Glen (Phase I) AP
XII L.P. In an effort to place Pickwick Place Apartments in a better position
to obtain financing, the property was restructured into a lower tier
partnership, known as Pickwick Place AP XII L.P. Angeles Partners XII is the
99% limited partner in these lower tier partnerships. Although legal ownership
of these assets was transferred to new entities, Angeles Partners XII retained
substantially all economic benefits from the properties.
Note C Mortgage Notes Payable
The principal terms of mortgage notes payable are as follows:
</TABLE>
<TABLE>
<CAPTION>
Monthly Principal Principal
Payment Stated Balance Balance At
Including Interest Maturity Due At December 31,
Property Interest Rate Date Maturity 1995
<S> <C> <C> <C> <C> <C>
Briarwood Apartments
1st mortgage $ 11,931 7.83% 10/2003 $ 1,403,524 $ 1,596,400
2nd mortgage 329 7.83% 10/2003 50,490 50,490
Chambers Ridge Apartments
1st mortgage 41,215 7.83% 10/2003 4,848,750 5,514,871
2nd mortgage 1,138 7.83% 10/2003 174,420 174,420
Cooper Point Plaza
1st mortgage 44,823 10.5% 09/2012 42,502 4,233,090
Gateway Gardens Apartments
1st mortgage 48,084 7.83% 10/2003 5,656,905 6,434,021
2nd mortgage 1,328 7.83% 10/2003 203,490 203,490
Hunters Glen Apartments-IV
1st mortgage 64,936 8.43% 10/2003 7,787,438 8,478,994
Hunters Glen Apartments-V
1st mortgage 67,318 7.83% 10/2003 7,919,654 9,006,370
2nd mortgage 1,859 7.83% 10/2003 284,886 284,886
Hunters Glen Apartments-VI
1st mortgage 70,065 7.83% 10/2003 8,242,905 9,373,977
2nd mortgage 1,935 7.83% 10/2003 296,514 296,514
Pickwick Place Apartments
1st mortgage 54,343 9.1% 05/2005 5,775,131 6,569,259
Southpointe Apartments
1st mortgage 78,742 8.59% 07/1999 11,000,000 11,000,000
Twin Lake Towers Apartments
1st mortgage 83,153 7.83% 10/2003 9,782,578 11,126,376
2nd mortgage 2,296 7.83% 10/2003 351,900 351,900
74,695,058
Less unamortized
discounts at a
rate of 8.13% (1,322,831)
Total $573,495 $63,821,087 $73,372,227
</TABLE>
The mortgage notes payable are nonrecourse and are secured by pledge of certain
of the Partnership's rental properties and by pledge of revenues from the
respective rental properties. Certain of the notes impose prepayment penalties
if repaid prior to maturity.
Note C - Mortgage Notes Payable (continued)
The estimated fair value of the Partnership's aggregate mortgage notes payable
is approximately $76,024,000 as compared to the carrying value of $73,372,227.
This estimate is not necessarily indicative of the amounts the Partnership may
pay in actual market transactions.
Scheduled principal payments of mortgage notes payable subsequent to December
31, 1995, are as follows:
1996 $ 729,196
1997 792,442
1998 861,241
1999 11,936,097
2000 1,017,552
Thereafter 59,358,530
$74,695,058
On April 17, 1995, the Partnership refinanced the mortgage encumbering Pickwick
Place Apartments. The total mortgage indebtedness, which carried a stated
interest rate of 10.5%, was in default since its maturity date in June 1994.
The new mortgage indebtedness of $6,600,000 carries a stated interest rate of
9.10% and is being amortized over 28 years with a balloon payment due May 1,
2005. Total capitalized loan costs incurred in 1995 for the refinancing were
$214,136 and are being amortized over the life of the loan.
On August 7, 1995, the Partnership refinanced the mortgage encumbering Hunter
Glen IV. The total mortgage indebtedness which carried a variable interest rate
based on the monthly LIBOR rate plus 2.375% (8.65% at refinancing) was in
default since its maturity date in December 1994. The new mortgage indebtedness
of $8,500,000 carries a fixed rate of 8.43% with a balloon payment due October
15, 2003. Total capitalized loan costs incurred for the refinancing were
$78,622 and are being amortized over the life of the loan.
Note D - Income Taxes
Taxable income or loss of the Partnership is reported in the income tax returns
of its partners. Accordingly, no provision for income taxes is made in the
financial statements of the Partnership.
Note D - Income Taxes (continued)
Differences between the net loss as reported and Federal taxable loss result
primarily from discounts on mortgage notes payable and depreciation over
different methods and lives and on differing cost basis of investment
properties. The following is a reconciliation of reported net loss and Federal
taxable loss:
1995 1994
Net loss as reported $(1,496,488) $(3,412,173)
Add (deduct):
Depreciation differences 310,915 159,090
Unearned income (73,894) 1,910
Discounts on mortgage
notes payable 12,751 143,149
Other 17,771 399,938
Federal taxable loss $(1,228,945) $(2,708,086)
Federal taxable loss per
limited partnership unit $ (27.17) $ (59.88)
The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets and liabilities:
Net liabilities $(20,788,288)
Land and buildings 8,596,236
Accumulated depreciation (12,323,667)
Syndication and distribution costs 6,093,372
Other 252,156
Net assets - Federal tax basis $(18,170,191)
Note E - Transactions with Affiliated Parties
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
partnership activities. The Partnership Agreement provides for payments to
affiliates for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership. The following payments were made to
the Managing General Partner and affiliates in 1995 and 1994:
1995 1994
Property management fees $1,031,693 $989,076
Reimbursement for services of affiliates 443,417 475,998
The Partnership insures its properties under a master policy through an agency
and insurer unaffiliated with the Managing General Partner. An affiliate of the
Managing General Partner acquired, in the acquisition of a business, certain
financial obligations from an insurance agency which were later acquired by the
agent who placed the current year's master policy. The current agent assumed
the financial obligations to the affiliate of the Managing General Partner, who
receives payments on these obligations from the agent. The amount of the
Partnership's insurance premiums accruing to the benefit of the affiliate of the
Managing General Partner by virtue of the agent's obligations is not
significant.
Angeles Mortgage Investment Trust ("AMIT"), a real estate investment trust,
provides financing to the Joint Venture which is secured by the Joint Venture's
sole investment property known as the Princeton Meadows Golf Course, in the
amount of $1,567,301 at December 31, 1995. Total interest expense was $203,255
and $196,630 for the years ended December 31, 1995 and 1994, respectively.
MAE GP Corporation ("MAE GP"), an affiliate of the Managing General Partner,
owns 1,675,113 Class B Shares of AMIT. MAE GP has the option to convert these
Class B Shares, in whole or in part, into Class A Shares on the basis of 1 Class
A Share for every 49 Class B Shares. These Class B Shares entitle MAE GP to
receive 1.2% of the distributions of net cash distributed by AMIT. These Class
B Shares also entitle MAE GP to vote on the same basis as Class A Shares which
allows MAE GP to vote approximately 37% of the total shares (unless and until
converted to Class A Shares at which time the percentage of the vote controlled
represented by the shares held by MAE GP would approximate 1.2% of the vote).
Between the date of acquisition of these shares (November 24, 1992) and March
31, 1995, MAE GP declined to vote these shares. Since that date, MAE GP voted
its shares at the 1995 annual meeting in connection with the election of
trustees and other matters. MAE has not exerted, and continues to decline to
exert, any management control over or participate in the management of AMIT. In
addition, Liquidity Assistance, LLC, ("LAC"), an affiliate of the Managing
General Partner and an affiliate of Insignia Financial Group, Inc. which
provides property management and partnership administration services to the
Partnership, owns 63,200 Class A Shares of AMIT. These Class A Shares entitle
LAC to vote approximately 1.5% of the total shares.
Note E - Transactions with Affiliated Parties (continued)
As part of a settlement of certain disputes with AMIT, MAE GP granted to AMIT an
option to acquire the Class B Shares. This option can be exercised at the end
of 10 years or when all loans made by AMIT to partnerships affiliated with MAE
GP as of November 9, 1994, which is the date of execution of a definitive
Settlement Agreement, have been paid in full, but in no event prior to November
9, 1997. AMIT delivered to MAE GP cash in the sum of $250,000 at closing, which
occurred April 14, 1995, as payment for the option. Upon exercise of the
option, AMIT will remit to MAE GP an additional $94,000.
Simultaneously with the execution of the option, MAE GP executed an irrevocable
proxy in favor of AMIT the result of which is MAE GP will be able to vote the
Class B Shares on all matters except those involving transactions between AMIT
and MAE GP affiliated borrowers or the election of any MAE GP affiliate as an
officer or trustee of AMIT. On those matters, MAE GP granted to the AMIT
trustees, in their capacity as trustees of AMIT, proxies with regard to the
Class B Shares instructing such trustees to vote said Class B Shares in
accordance with the vote of the majority of the Class A Shares voting to be
determined without consideration of the votes of "Excess Class A Shares" as
defined in Section 6.13 of the Declaration of Trust of AMIT.
Note F - Investment Properties and Accumulated Depreciation
<TABLE>
<CAPTION>
Initial Cost
To Partnership
Buildings Cost
and Related Capitalized,
Personal Net Subsequent
Description Encumbrances Land Property to Acquisition
<S> <C> <C> <C> <C>
Investment Properties
Briarwood Apartments $ 1,646,890 $ 136,050 $ 1,408,950 $ 211,300
Chambers Ridge Apartments 5,689,291 526,830 7,823,170 939,328
Cooper Point Plaza 4,233,090 1,688,900 5,319,100 1,847,361
Gateway Gardens Apartments 6,637,511 254,792 6,206,208 654,150
Hunters Glen Apartments-IV 8,478,994 1,552,377 8,323,863 1,038,943
Hunters Glen Apartments-V 9,291,256 1,820,028 9,759,012 1,136,340
Hunters Glen Apartments-VI 9,670,491 1,980,619 10,620,101 1,097,450
Pickwick Place Apartments 6,569,259 603,494 6,551,506 1,395,813
Southpointe Apartments 11,000,000 662,578 8,616,422 559,709
Twin Lake Towers Apartments 11,478,276 1,115,200 12,805,800 917,061
Totals $74,695,058 $10,340,868 $77,434,132 $9,797,455
Note F - Investment Properties and Accumulated Depreciation (continued)
</TABLE>
<TABLE>
<CAPTION>
Gross Amount At Which Carried
At December 31, 1995
Buildings
And Related
Personal Accumulated Date Depreciable
Description Land Property Total Depreciation Acquired Life-Years
<S> <C> <C> <C> <C> <C> <C>
Briarwood Apartments $ 136,050 $ 1,620,250 $ 1,756,300 $ 951,393 06/25/85 10-20
Chambers Ridge Apartments 526,830 8,762,498 9,289,328 5,380,585 07/26/84 10-20
Cooper Point Plaza 1,688,900 7,166,461 8,855,361 4,274,001 12/14/84 10-20
Gateway Gardens Apartments 254,792 6,860,358 7,115,150 4,077,378 12/21/84 10-20
Hunters Glen Apartments-IV 1,552,377 9,362,806 10,915,183 5,154,339 01/31/85 10-40
Hunters Glen Apartments-V 1,820,028 10,895,352 12,715,380 6,042,450 01/31/85 10-40
Hunters Glen Apartments-VI 1,980,619 11,717,551 13,698,170 6,546,253 01/31/85 10-40
Pickwick Place Apartments 603,494 7,947,319 8,550,813 4,589,666 05/11/84 10-20
Southpointe Apartments 662,578 9,176,131 9,838,709 5,502,615 06/12/85 10-20
Twin Lake Towers Apartments 1,115,200 13,722,861 14,838,061 8,514,842 03/30/84 10-20
Totals $10,340,868 $87,231,587 $97,572,455 $51,033,522
</TABLE>
The depreciable lives included above are for the buildings and components.
The depreciable lives for related personal property are for 5 to 7 years.
Reconciliation of "Investment Properties and Accumulated Depreciation":
Year Ended December 31,
1995 1994
Investment Properties
Balance at beginning of year $95,576,407 $94,509,567
Property improvements 2,143,697 2,104,340
Disposal of assets (147,649) (1,037,500)
Balance at end of year $97,572,455 $95,576,407
Accumulated Depreciation
Balance at beginning of year $46,563,476 $42,911,435
Additions charged to expense 4,573,775 4,342,644
Disposal of assets (103,729) (690,603)
Balance at end of year $51,033,522 $46,563,476
Note F - Investment Properties and Accumulated Depreciation (continued)
The aggregate cost of the real estate for Federal income tax purposes at
December 31, 1995 and 1994, is $106,168,691 and $104,026,446, respectively. The
accumulated depreciation taken for Federal income tax purposes at December 31,
1995 and 1994, is $63,357,189 and $59,094,329, respectively.
Note G - Investment in Joint Venture
Condensed balance sheet information of the Joint Venture at December 31, 1995,
is as follows:
December 31,
1995
Assets
Cash $ 114,589
Deferred charges and other assets 116,790
Investment properties, net 1,897,831
Total $2,129,210
Liabilities and Partners' Capital
Note payable to AMIT (Note E) $1,567,301
Other liabilities 412,688
Partners' capital 149,221
$2,129,210
The condensed statements of operations of the Joint Venture for the years ended
December 31, 1995 and 1994, are summarized as follows:
December 31,
1995 1994
Revenue $ 1,158,070 $ 1,169,094
Costs and expenses (1,472,406) (1,357,362)
Net loss $ (314,336) $ (188,268)
The Partnership's equity interest in the loss of the Joint Venture was $139,879
and $83,779 for the years ended December 31, 1995 and 1994, respectively.
The Princeton Meadows Golf Course property had an underground fuel storage tank
that was removed in 1992. This fuel storage tank caused contamination to the
area. Management installed monitoring wells in the area where the tank was
formerly buried. Some samples from these wells indicated lead and phosphorous
readings that were higher than the range prescribed by the New Jersey Department
of Environmental Protection ("DEP"). The Joint Venture notified DEP of the
findings when they were first discovered. However, DEP had not given any
directives as to corrective action until late 1995.
Note G - Investment in Joint Venture (continued)
In November 1995, representatives of the Joint Venture and the New Jersey DEP
met and developed a plan of action to clean-up the contamination site at
Princeton Meadows Golf Course. The Joint Venture plans to engage two firms.
One engineering firm will be contracted to conduct consulting and compliance
work while a second firm will perform the field work necessary for the clean-up.
Contracts to remediate the site have been received from these two engineering
and environmental firms and are being reviewed. The Joint Venture has recorded
a liability of $199,000 for the costs of the clean-up. The contracts are
expected to be executed in early 1996 with work commencing and expected to be
completed during 1996. The Managing General Partner believes the liability
recorded is sufficient to cover all costs associated with this incident.
Note H - Operating Leases
Tenants of the commercial property are responsible for their own utilities and
maintenance of their space, and payment of their proportionate share of common
area maintenance, utilities, insurance and real estate taxes. Tenants are
generally not required to pay a security deposit. Bad debt expense has been
within the General Partner's expectations.
As of December 31, 1995, the Partnership had minimum future rentals under
noncancellable leases with terms ranging from twelve months to ten years.
1996 $ 711,511
1997 625,935
1998 551,022
1999 534,129
2000 475,096
Thereafter 1,512,129
$4,409,822
Item 8. Changes in and Disagreements with Accountant on Accounting and Financial
Disclosures
There were no disagreements with Ernst & Young, LLP regarding the 1995
or 1994 audits of the Partnership's financial statements.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act
The names of the directors and executive officers of Angeles Realty
Corporation II ("ARC II"), the Partnership's Managing General Partner as of
December 31, 1995, their ages and the nature of all positions with ARC II
presently held by them are as follows:
Name Age Position
Carroll D. Vinson 55 President
Robert D. Long, Jr. 28 Controller and
Principal Accounting
Officer
William H. Jarrard, Jr. 49 Vice President
John K. Lines 36 Secretary
Kelley M. Buechler 38 Assistant Secretary
Carroll D. Vinson has been President of Metropolitan Asset Enhancement, L.P.,
and subsidiaries since August of 1994. Prior to that, during 1993 to August
1994, Mr. Vinson was affiliated with Crisp, Hughes & Co. (regional CPA firm) and
engaged in various other investment and consulting activities. Briefly, in
early 1993, Mr. Vinson served as President and Chief Executive Officer of
Angeles Corporation, a real estate investment firm. From 1991 to 1993, Mr.
Vinson was employed by Insignia in various capacities including Managing
Director-President during 1991. From 1986 to 1990, Mr. Vinson was President and
a Director of U.S. Shelter Corporation, a real estate services company, which
sold substantially all of its assets to Insignia in December 1990.
Robert D. Long, Jr. is Controller and Principal Accounting Officer. Prior to
joining Metropolitan Asset Enhancement, L.P., and subsidiaries, he was an
auditor for the State of Tennessee and was associated with the accounting firm
of Harshman Lewis and Associates. He is a graduate of the University of
Memphis.
William H. Jarrard, Jr. is Managing Director - Partnership Administration of
Insignia Financial Group, Inc. ("Insignia"). During the five years prior to
joining Insignia in 1991, he served in a similar capacity for U.S. Shelter. He
was previously associated with the accounting firm, Ernst & Whinney, for eleven
years. Mr. Jarrard is a graduate of the University of South Carolina and a
certified public accountant.
John K. Lines has been General Counsel and Secretary of Insignia since June
1994. From May 1993 until June 1994, Mr. Lines was the Assistant General
Counsel and Vice President of Ocwen Financial Corporation in West Palm Beach,
Florida. From October 1991 until April 1993, Mr. Lines was a Senior Attorney
with Banc One Corporation in Columbus, Ohio. From May 1984 until October 1991,
Mr. Lines was employed as an Associate Attorney with Squire Sanders & Dempsey in
Columbus, Ohio.
Kelley M. Buechler is Assistant Secretary of Insignia. During the five years
prior to joining Insignia in 1991, she served in a similar capacity for U.S.
Shelter. Ms. Buechler is a graduate of the University of North Carolina.
Item 10. Executive Compensation
No direct form of compensation or remuneration was paid by the Partnership
to any officer or director of ARC II. The Partnership has no plan, nor does the
Partnership presently propose a plan, which will result in any remuneration
being paid to any officer or director upon termination of employment. However,
fees and other payments have been made to the Partnership's Managing General
Partner and its affiliates, as described in "Note E" of the Financial Statements
included under "Item 7", which is incorporated herein by reference.
Item 11. Security Ownership of Certain Beneficial Owners and Management
As of December 31, 1995, no person owned of record more than 5% of Limited
Partnership Units of the Partnership nor was any person known by the Partnership
to own of record and beneficially, or beneficially only, more than 5% of such
securities.
The Partnership knows of no contractual arrangements, the operation of the
terms of which may at a subsequent date result in a change in control of the
Partnership, except for: Article 12.1 of the Agreement, which provides that
upon a vote of the Limited Partners holding more than 50% of the then
outstanding Limited Partnership Units the General Partners may be expelled from
the Partnership upon 90 days written notice. In the event that successor
general partners have been elected by Limited Partners holding more than 50% of
the then outstanding Limited Partnership Units and if said Limited Partners
elect to continue the business of the Partnership, the Partnership is required
to pay in cash to the expelled Managing General Partner an amount equal to the
accrued and unpaid management fee described in Article 10 of the Agreement and
to purchase the General Partners' interest in the Partnership on the effective
date of the expulsion, which shall be an amount equal to the difference between
(i) the balance of the General Partners' capital account and (ii) the fair
market value of the share of Distributable Net Proceeds to which the General
Partners would be entitled. Such determination of the fair market value of the
share of Distributable Net Proceeds is defined in Article 12.2(ii) of the
Agreement.
Item 12. Certain Relationships and Related Transactions
No transactions have occurred between the Partnership and any officer or
director of ARC II.
During the year ended December 31, 1995, the transactions that occurred
between the Partnership and ARC II and affiliates of ARC II pursuant to the
terms of the Agreement are disclosed under "Note E" of the Partnership's
Financial Statements included under "Item 7", which is hereby incorporated by
reference.
PART IV
Item 13. Exhibits and Reports on Form 8-K
(a) Exhibits: See Exhibit Index contained herein.
(b) No reports on Form 8-K were filed during the fourth quarter of 1995.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Angeles Partners XII
(A California Limited Partnership)
(Registrant)
By: Angeles Realty Corporation II
By: /s/Carroll D. Vinson
Carroll D. Vinson
President, Director
Date: March 22, 1996
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities on the date
indicated.
/s/Carroll D. Vinson President, Director March 22, 1996
Carroll D. Vinson
/s/Robert D. Long, Jr. Controller and Principal March 22, 1996
Robert D. Long, Jr. Accounting Officer
Exhibit Index
Exhibit Number Description of Exhibit
3.1 Amended Certificate and Agreement of Limited Partnership dated
May 26, 1983 filed in Form S-11 dated June 2, 1983 and is
incorporated herein by reference.
10.1 Purchase and Sale Agreement with Exhibits - Twin Lake Towers
Apartments filed in Form 8K dated March 30, 1984, incorporated
herein by reference.
10.2 Purchase and Sale Agreement with Exhibits - Pickwick Place
Apartments filed in Form 8K dated May 11, 1984, incorporated
herein by reference.
10.3 Purchase and Sale Agreement with Exhibits - Chambers Ridge
Apartments filed in Form 8K dated July 26, 1984, incorporated
herein by reference.
10.4 Purchase and Sale Agreement with Exhibits - Park Village Plaza
filed in Form 8K dated December 21, 1984, incorporated herein
by reference.
10.5 Purchase and Sale Agreement with Exhibits - Gateway Gardens
Apartments filed in Form 8K dated December 21, 1984,
incorporated herein by reference.
10.6 Purchase and Sale Agreement with Exhibits - Hunters Glen
Apartments I, II, III filed in Form 8K dated February 1, 1985,
incorporated herein by reference.
10.7 Purchase and Sale Agreement with Exhibits - Meadows Apartments
filed in Form 8K dated June 12, 1985, incorporated herein by
reference.
10.8 Purchase and Sale Agreement with Exhibits - Briarwood
Apartments filed in Form 8K dated June 25, 1985, incorporated
herein by reference.
10.9 Purchase and Sale Agreement with Exhibits - dated July 26, 1992
between Princeton Golf Course Joint Venture and Lincoln
Property Company No. 199 filed in Form 10Q dated August 13,
1992, incorporated herein by reference.
10.10 Princeton Golf Course Joint Venture Agreement with Exhibits -
dated August 21, 1991 between the Partnership, Angeles Partners
XI and Angeles Income Properties, Ltd. II filed in Form 10Q
dated August 13, 1992, incorporated herein by reference.
10.11 Stock Purchase Agreement dated November 24, 1992 showing the
purchase of 100% of the outstanding stock of Angeles Realty
Corporation II by IAP GP Corporation, a subsidiary of MAE GP
Corporation, filed in Form 8-K dated December 31, 1992, which
is incorporated herein by reference.
10.12 Contracts related to refinancing of debt
(a) First Deeds of Trust and Security Agreements dated September
30, 1993 between AP XII Associates Limited Partnership, a South
Carolina Limited Partnership and Lexington Mortgage Company, a
Virginia Corporation, securing Briarwood.
(b) Second Deeds of Trust and Security Agreements dated September
30, 1993 between AP XII Associates Limited Partnership, a South
Carolina Limited Partnership and Lexington Mortgage Company, a
Virginia Corporation, securing Briarwood.
(c) First Assignments of Leases and Rents dated September 30, 1993
between AP XII Associates Limited Partnership, a South Carolina
Limited Partnership and Lexington Mortgage Company, a Virginia
Corporation, securing Briarwood.
(d) Second Assignments of Leases and Rents dated September 30, 1993
between AP XII Associates Limited Partnership, a South Carolina
Limited Partnership and Lexington Mortgage Company, a Virginia
Corporation, securing Briarwood.
(e) First Deeds of Trust Notes dated September 30, 1993 between AP
XII Associates Limited Partnership, a South Carolina Limited
Partnership and Lexington Mortgage Company, a Virginia
Corporation securing Briarwood.
(f) Second Deeds of Trust Notes dated September 30, 1993 between AP
XII Associates Limited Partnership, a South Carolina Limited
Partnership and Lexington Mortgage Company, a Virginia
Corporation securing Briarwood.
10.13 Contracts related to refinancing of debt
(a) First Deeds of Trust and Security Agreements dated September
30, 1993 between AP XII Associates Limited Partnership, a South
Carolina Limited Partnership and Lexington Mortgage Company, a
Virginia Corporation, securing Twin Lake Towers.
(b) Second Deeds of Trust and Security Agreements dated September
30, 1993 between AP XII Associates Limited Partnership, a South
Carolina Limited Partnership and Lexington Mortgage Company, a
Virginia Corporation, securing Twin Lake Towers.
(c) First Assignments of Leases and Rents dated September 30, 1993
between AP XII Associates Limited Partnership, a South Carolina
Limited Partnership and Lexington Mortgage Company, a Virginia
Corporation, securing Twin Lake Towers.
(d) Second Assignments of Leases and Rents dated September 30, 1993
between AP XII Associates Limited Partnership, a South Carolina
Limited Partnership and Lexington Mortgage Company, a Virginia
Corporation, securing Twin Lake Towers.
(e) First Deeds of Trust Notes dated September 30, 1993 between AP
XII Associates Limited Partnership, a South Carolina Limited
Partnership and Lexington Mortgage Company, a Virginia
Corporation securing Twin Lake Towers.
(f) Second Deeds of Trust Notes dated September 30, 1993 between AP
XII Associates Limited Partnership, a South Carolina Limited
Partnership and Lexington Mortgage Company, a Virginia
Corporation securing Twin Lake Towers.
10.14 Contracts related to refinancing of debt
(a) First Deeds of Trust and Security Agreements dated September
30, 1993 between AP XII Associates Limited Partnership, a South
Carolina Limited Partnership and Lexington Mortgage Company, a
Virginia Corporation, securing Hunters Glen.
(b) Second Deeds of Trust and Security Agreements dated September
30, 1993 between AP XII Associates Limited Partnership, a South
Carolina Limited Partnership and Lexington Mortgage Company, a
Virginia Corporation, securing Hunters Glen.
(c) First Assignments of Leases and Rents dated September 30, 1993
between AP XII Associates Limited Partnership, a South Carolina
Limited Partnership and Lexington Mortgage Company, a Virginia
Corporation, securing Hunters Glen.
(d) Second Assignments of Leases and Rents dated September 30, 1993
between AP XII Associates Limited Partnership, a South Carolina
Limited Partnership and Lexington Mortgage Company, a Virginia
Corporation, securing Hunters Glen.
(e) First Deeds of Trust Notes dated September 30, 1993 between AP
XII Associates Limited Partnership, a South Carolina Limited
Partnership and Lexington Mortgage Company, a Virginia
Corporation securing Hunters Glen.
(f) Second Deeds of Trust Notes dated September 30, 1993 between AP
XII Associates Limited Partnership, a South Carolina Limited
Partnership and Lexington Mortgage Company, a Virginia
Corporation securing Hunters Glen.
10.15 Contracts related to refinancing of debt
(a) First Deeds of Trust and Security Agreements dated September
30, 1993 between AP XII Associates Limited Partnership, a South
Carolina Limited Partnership and Lexington Mortgage Company, a
Virginia Corporation, securing Chambers Ridge.
(b) Second Deeds of Trust and Security Agreements dated September
30, 1993 between AP XII Associates Limited Partnership, a South
Carolina Limited Partnership and Lexington Mortgage Company, a
Virginia Corporation, securing Chambers Ridge.
(c) First Assignments of Leases and Rents dated September 30, 1993
between AP XII Associates Limited Partnership, a South Carolina
Limited Partnership and Lexington Mortgage Company, a Virginia
Corporation, securing Chambers Ridge.
(d) Second Assignments of Leases and Rents dated September 30, 1993
between AP XII Associates Limited Partnership, a South Carolina
Limited Partnership and Lexington Mortgage Company, a Virginia
Corporation, securing Chambers Ridge.
(e) First Deeds of Trust Notes dated September 30, 1993 between AP
XII Associates Limited Partnership, a South Carolina Limited
Partnership and Lexington Mortgage Company, a Virginia
Corporation securing Chambers Ridge.
(f) Second Deeds of Trust Notes dated September 30, 1993 between AP
XII Associates Limited Partnership, a South Carolina Limited
Partnership and Lexington Mortgage Company, a Virginia
Corporation securing Chambers Ridge.
10.16 Contracts related to refinancing of debt
(a) First Deeds of Trust and Security Agreements dated September
30, 1993 between AP XII Associates Limited Partnership, a South
Carolina Limited Partnership and Lexington Mortgage Company, a
Virginia Corporation, securing Gateway Gardens.
(b) Second Deeds of Trust and Security Agreements dated September
30, 1993 between AP XII Associates Limited Partnership, a South
Carolina Limited Partnership and Lexington Mortgage Company, a
Virginia Corporation, securing Gateway Gardens.
(c) First Assignments of Leases and Rents dated September 30, 1993
between AP XII Associates Limited Partnership, a South Carolina
Limited Partnership and Lexington Mortgage Company, a Virginia
Corporation, securing Gateway Gardens.
(d) Second Assignments of Leases and Rents dated September 30, 1993
between AP XII Associates Limited Partnership, a South Carolina
Limited Partnership and Lexington Mortgage Company, a Virginia
Corporation, securing Gateway Gardens.
(e) First Deeds of Trust Notes dated September 30, 1993 between AP
XII Associates Limited Partnership, a South Carolina Limited
Partnership and Lexington Mortgage Company, a Virginia
Corporation securing Gateway Gardens.
(f) Second Deeds of Trust Notes dated September 30, 1993 between AP
XII Associates Limited Partnership, a South Carolina Limited
Partnership and Lexington Mortgage Company, a Virginia
Corporation securing Gateway Gardens.
16.1 Letter from the Registrant's former independent accountant
regarding its concurrence with the statements made by the
Registrant is incorporated by reference to the Exhibit filed
with Form 8-K dated September 1, 1993.
99.1 Agreement of Limited Partnership for Angeles Partners XII GP
Limited Partnership and Angeles Partners XII entered into
September 9, 1993.
99.2 Agreement of Limited Partnership for AP XII Associates Limited
Partnership and Angeles Partners XII entered into September 9,
1993.
99.3 Agreement of Limited Partnership for Hunters Glen AP XII
Limited Partnership and Angeles Partners XII entered into
September 17, 1993.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Angeles
Partners XII 1995 Year-End 10-KSB and is qualified in its entirety by reference
to such 10-KSB filing.
</LEGEND>
<CIK> 0000720392
<NAME> ANGELES PARTNERS XII
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 3,643,002
<SECURITIES> 0
<RECEIVABLES> 140477
<ALLOWANCES> 145,987
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 97,572,455
<DEPRECIATION> 51,033,522
<TOTAL-ASSETS> 55,881,762
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 73,372,227
0
0
<COMMON> 0
<OTHER-SE> (20,788,288)
<TOTAL-LIABILITY-AND-EQUITY> 55,881,762
<SALES> 0
<TOTAL-REVENUES> 20,845,938
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 22,158,627
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,562,955
<INCOME-PRETAX> (1,496,488)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,496,488)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,496,488)
<EPS-PRIMARY> (33.09)
<EPS-DILUTED> 0
<FN>
<F1>The Registrant has an unclassified balance sheet.
</FN>
</TABLE>
