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 Exchange Act of
1934 [No Fee Required]
For the fiscal year ended December 31, 1996
or
[ ] 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 (I.R.S. Employer
incorporation or organization) 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 []
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.[]
State issuer's revenues for its most recent fiscal year. $21,321,000
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 Residential 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 103,473 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>
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, 1996, is
summarized as follows:
Date of
Property Purchase Type of Ownership Use
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's balance sheet on the
equity method of accounting and is included in "Investment in joint venture".
Schedule of Properties:
(dollar amounts in thousands)
Gross
Carrying Accumulated Federal
Property Value Depreciation Rate Method Tax Basis
Briarwood Apartments $ 1,785 $ 1,035 5-40 yrs (1) $ 733
Chambers Ridge Apartments 9,517 5,855 5-40 yrs (1) 3,516
Cooper Point Plaza 8,880 4,671 5-40 yrs (1) 5,146
Gateway Gardens Apartments 7,337 4,485 5-40 yrs (1) 2,486
Hunters Glen Apartments-IV 11,072 5,716 5-40 yrs (1) 4,861
Hunters Glen Apartments-V 12,883 6,693 5-40 yrs (1) 5,604
Hunters Glen Apartments-VI 13,872 7,235 5-40 yrs (1) 5,959
Pickwick Place Apartments 8,976 4,998 5-40 yrs (1) 3,741
Southpointe Apartments 9,889 5,951 5-40 yrs (1) 3,489
Twin Lake Towers Apartments 14,954 9,172 5-40 yrs (1) 4,696
$ 99,165 $ 55,811 $ 40,231
(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:
(dollar amounts in thousands)
Principal Principal
Balance At Balance
December 31, Interest Period Maturity Due At
Property 1996 Rate Amortized Date Maturity
Briarwood Apartments
1st mortgage $ 1,578 7.83% 28.67 yrs 10/2003 $ 1,404
2nd mortgage 50 7.83% (1) 10/2003 50
Chambers Ridge Apartments
1st mortgage 5,450 7.83% 28.67 yrs 10/2003 4,849
2nd mortgage 174 7.83% (1) 10/2003 174
Cooper Point Plaza
1st mortgage 4,135 10.5% 28 yrs 09/2012 43
Gateway Gardens Apartments
1st mortgage 6,358 7.83% 28.67 yrs 10/2003 5,657
2nd mortgage 203 7.83% (1) 10/2003 203
Hunters Glen Apartments-IV
1st mortgage 8,418 8.43% 28.67 yrs 10/2003 7,787
Hunters Glen Apartments-V
1st mortgage 8,900 7.83% 28.67 yrs 10/2003 7,920
2nd mortgage 285 7.83% (1) 10/2003 285
Hunters Glen Apartments-VI
1st mortgage 9,263 7.83% 28.67 yrs 10/2003 8,243
2nd mortgage 297 7.83% (1) 10/2003 297
Pickwick Place Apartments
1st mortgage 6,513 9.1% 28 yrs 05/2005 5,775
Southpointe Apartments
1st mortgage 11,000 8.59% (1) 07/1999 11,000
Twin Lake Towers Apartments
1st mortgage 10,995 7.83% 28.67 yrs 10/2003 9,782
2nd mortgage 352 7.83% (1) 10/2003 352
73,971 $ 63,821
Less unamortized discounts (1,215)
$ 72,756
(1) Interest only payments.
Average annual rental rate and occupancy for 1996 and 1995 for each property:
Average Annual Average Annual
Rental Rates Occupancy
Property 1996 1995 1996 1995
Briarwood Apartments $6,417/unit $6,006/unit 95% 97%
Chambers Ridge Apartments (1) 6,846/unit 6,708/unit 89% 92%
Cooper Point Plaza (2) 6.38/s.f. 5.84/s.f. 83% 93%
Gateway Gardens Apartments (3) 6,205/unit 6,048/unit 93% 97%
Hunters Glen Apartments - IV 8,573/unit 8,360/unit 94% 94%
Hunters Glen Apartments - V 8,573/unit 8,365/unit 95% 95%
Hunters Glen Apartments - VI 8,464/unit 8,298/unit 94% 94%
Pickwick Place Apartments 6,468/unit 6,202/unit 95% 95%
Southpointe Apartments (4) 5,535/unit 5,437/unit 80% 85%
Twin Lake Towers Apartments 7,914/unit 7,724/unit 96% 97%
(1) This investment property has been adversely affected by increased rental
rates which resulted in decreased rentals and renewals. The Managing
General Partner plans to increase rental concessions in order to attract
new tenants.
(2) This investment property has been adversely affected by the moving out of
several small tenants. The Managing General Partner is in the process of
making several spaces "rent ready" and also is working to fill vacant
spaces.
(3) This investment property has been adversely affected by an increase in
home buying in the area. Also, residents have left due to construction
and maintenance work at the property.
(4) This investment property has been adversely affected by an increase in
home buying in the area. Also, residents have moved out due to delays in
renovations at the property.
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 1997-2006 (dollar amounts in thousands):
Number of Square Annual % of Gross
Expirations Feet Rent Annual Rent
Cooper Point Plaza
1997 4 7,454 $ 83 9.43%
1998 2 2,400 24 2.77%
1999 (1) 1 1,200 14 1.64%
2000 2 10,727 122 13.93%
2001 0 0 0 0%
2002 0 0 0 0%
2003 0 0 0 0%
2004 2 32,538 356 40.50%
2005 0 0 0 0%
2006 0 0 0 0%
(1) A tenant, whose lease expired on 12/31/96 and is not included in the
schedule above, renewed their lease for the period 1/1/97 - 12/31/99 with
annual rent of approximately $14,200.
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
Drug Store 19,527 7.27 09/30/04
Real estate taxes and rates in 1996 for each property were (dollar amounts
in thousands):
1996 1996
Billing Rate
Briarwood Apartments $ 68* 3.32
Chambers Ridge Apartments 153 1.32
Cooper Point Plaza 98 1.52
Gateway Gardens Apartments 238* 3.15
Hunters Glen Apartments - 1 261 2.31
Hunters Glen Apartments - 2 282 2.31
Hunters Glen Apartments - 3 286 2.31
Pickwick Place Apartments 209** 7.57
Southpointe Apartments 231 5.99
Twin Lake Towers Apartments 280** 6.01
* Represents a fiscal year ending June 30, 1996.
** Estimate for 1996 billing. Tax bills not yet received.
ITEM 3. LEGAL PROCEEDINGS
The Registrant is unaware of any pending or outstanding litigation that is not
of a routine nature. Management of the Registrant believes that all such
routine matters are adequately covered by insurance and will be resolved without
a material adverse effect upon the Partnership's financial condition, results of
operation, or liquidity.
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. The
Partnership currently has 4,133 Limited Partners of record and 44,718 Limited
Partnership Units outstanding. During the year, the number of Limited
Partnership Units decreased by 55 units due to limited partners abandoning their
Units. In abandoning his or her Limited Partnership Unit, a limited partner
relinquishes all right, title and interest in the Partnership as of the date of
abandonment. There is no intention to sell additional Limited Partnership Units
nor is there an established market for these units.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
RESULTS OF OPERATIONS
The Partnership's net loss for the year ended December 31, 1996, was $1,802,000,
versus a net loss for the year ended December 31, 1995, of $1,496,000. The
increase in net loss for the year ended December 31, 1996, versus the year ended
December 31, 1995, can be attributed to an increase in expenses which are only
partially offset by an increase in rental income.
Rental income increased slightly due to an increase in rental rates for the year
ended December 31, 1996, as compared to the year ended December 31, 1995,
despite an overall decrease in occupancy. Hunters Glen Apartments - IV, Hunters
Glen Apartments - V, Hunters Glen Apartments - VI, Briarwood Apartments, Twin
Lake Towers Apartments, & Pickwick Place Apartments had increased rental income
due to an increase in rental rates. These increases were only partially offset
by decreases in rental income at Gateway Garden Apartments, Chambers Ridge
Apartments, Cooper Point Plaza, and Southpointe Apartments due to decreases in
occupancy.
Contributing to the increase in expenses for the year ended December 31, 1996,
as compared to the year ended December 31, 1995, were increases in operating and
depreciation expense. Operating expense increased due to increased snow removal
costs and utility expense as a result of the harsh winter in 1996. Depreciation
expense increased as a result of placing more assets in service in 1995. The
refinancings of Pickwick Place Apartments and Hunters Glen Apartments - IV
required that certain renovations be made to these investment properties. In
1996, a full year of depreciation was taken on these assets versus only a half
year in 1995.
Bad debt expense for the year ended December 31, 1996, results from an increase
in the reserve necessary at Cooper Point Plaza and Southpointe Apartments based
on a review of tenant accounts receivable.
The Partnership has a 44.5% investment in the Princeton Meadows Golf Course
Joint Venture. For the year ended December 31, 1996, and December 31, 1995, the
Partnership realized equity in loss of the Joint Venture of $67,000 as compared
to an equity in loss of the Joint Venture of $140,000, respectively. The
decrease in loss at Princeton Meadows Golf Course can be attributed to an
increase in revenue. These revenue increases can be attributed to maintenance
upgrades at the golf course that have improved the appearance of the property.
The increase in expense can be attributed to the purchase of liability insurance
necessitated by the environmental issue at the property (see "Note F"). Also,
advertising expense increased as a result of an aggressive advertising campaign
and salary expense increased due to the hiring of additional personnel,
including a full time golf pro for the course. The Partnership also implemented
a preventive maintenance program and repairs were made to the cart paths and
course.
Included in operating expense is approximately $468,000 of major repairs and
maintenance comprised mainly of interior and exterior building improvements,
exterior painting, swimming pool and parking lot repairs, and major landscaping.
The Managing General Partner continues to monitor the rental market environment
at its investment properties to assess the feasibility of increasing rents, to
maintain or increase the occupancy level 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 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
At December 31, 1996, the Partnership had unrestricted cash of $4,827,000
compared to unrestricted cash of $3,643,000 at December 31, 1995. Net cash
provided by operating activities decreased due to an increase in accounts
receivable and escrows for taxes and a decrease in other liabilities. This was
partially offset by an increase in accounts payable. Net cash used in investing
activities decreased due to a decrease in the amount used for property
improvements and replacements during 1996. Also, net cash used in investing
activities decreased due to decreased deposits to restricted escrows. In
conjunction with the refinancings of the debt secured by Pickwick Place
Apartments and Hunters Glen Apartments - IV, the Partnership was required to
restrict certain funds in an escrow account at the time of the refinancings in
1995. Proceeds from the refinancings resulted in cash provided by financing
activities for the year ended December 31, 1995. During the year ended December
31, 1996, cash flows used in financing activities resulted due to payments made
on the mortgage notes payable.
The Managing General Partner has been unsuccessful in attempts to refinance the
$11,000,000 non-recourse mortgage indebtedness secured by Southpointe Apartments
which matures in July 1999 and carries a stated interest rate of 8.59%. This
property has increasing maintenance needs to adequately maintain the property
yet the cash flow of the property does not support incurring such expenditures.
While the mortgage is not in default at December 31, 1996, monthly payments of
debt service are usually late as the property rents for the current month are
used to pay the prior month's debt service. The lender has indicated that
foreclosure of the property will occur if the mortgage goes into default.
On April 17, 1995, the Partnership refinanced the mortgage encumbering Pickwick
Place Apartment. 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 2005.
Total capitalized loan costs incurred for the refinancing were $214,000 and are
being amortized over the life of the loan.
On August 7, 1995, the Partnership refinanced the mortgage encumbering Hunters
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 $79,000 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 $72,756,000, net of unamortized discounts,
with maturity dates ranging from July 1999 to September 2012, at which point
$63,821,000 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 during the year ended December
31, 1996, or December 31, 1995.
ITEM 7. FINANCIAL STATEMENTS
ANGELES PARTNERS XII
LIST OF FINANCIAL STATEMENTS
Report of Independent Auditors
Consolidated Balance Sheet - December 31, 1996
Consolidated Statements of Operations - Years ended December 31, 1996 and 1995
Consolidated Statement of Changes in Partners' Deficit - Years ended December
31, 1996 and 1995
Consolidated Statements of Cash Flows - Years ended December 31, 1996 and 1995
Notes to Consolidated Financial Statements
Report of Ernst & Young LLP, Independent Auditors
The Partners
Angeles Partners XII
We have audited the accompanying consolidated balance sheet of Angeles Partners
XII as of December 31, 1996, and the related consolidated statements of
operations, changes in partners' deficit and cash flows for each of the two
years in the period ended December 31, 1996. 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 consolidated financial position of Angeles Partners
XII as of December 31, 1996, and the consolidated results of its operations and
its cash flows for each of the two years in the period ended December 31, 1996,
in conformity with generally accepted accounting principles.
/S/ ERNST & YOUNG LLP
Greenville, South Carolina
February 10, 1997
ANGELES PARTNERS XII
CONSOLIDATED BALANCE SHEET
(in thousands, except unit data)
December 31, 1996
Assets
Cash and cash equivalents:
Unrestricted $ 4,827
Restricted--tenant security deposits 923
Accounts receivable, net of allowance
for doubtful accounts of $183 165
Escrows for taxes 718
Restricted escrows 1,337
Other assets 1,963
Investment in, and advances of $143
to, joint venture (Note F) 143
Investment properties (Notes B and E):
Land $ 10,341
Buildings and related personal
property 88,824
99,165
Less accumulated depreciation (55,811) 43,354
$ 53,430
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 593
Tenant security deposits 923
Accrued taxes 1,032
Other liabilities 716
Mortgage notes payable (Notes B and E) 72,756
Partners' Deficit
General partners $ (611)
Limited partners (44,718 units issued and
outstanding) (21,979) (22,590)
$ 53,430
See Accompanying Notes to Consolidated Financial Statements
ANGELES PARTNERS XII
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except unit data)
Years Ended December 31,
1996 1995
Revenues:
Rental income $ 20,001 $ 19,727
Other income 1,320 1,341
Total revenues 21,321 21,068
Expenses:
Operating 6,680 6,510
General and administrative 551 568
Maintenance 2,220 2,149
Depreciation 4,811 4,574
Interest 6,538 6,563
Property taxes 2,089 2,067
Bad debt expense (recovery), net 167 (7)
Total expenses 23,056 22,424
Equity in loss of joint
venture (Note F) (67) (140)
Net loss $ (1,802) $ (1,496)
Net loss allocated to general
partners (1%) $ (18) $ (15)
Net loss allocated to limited
partners (99%) (1,784) (1,481)
Net loss $ (1,802) $ (1,496)
Net loss per limited partnership unit $ (39.85) $ (33.09)
See Accompanying Notes to Consolidated Financial Statements
ANGELES PARTNERS XII
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT
( in thousands, except unit data)
Limited
Partnership General Limited
Units Partners Partners Total
Original capital contributions 44,773 $ 1 $ 44,773 $ 44,774
Partners' deficit at
December 31, 1994 44,773 $ (578) $ (18,714) $ (19,292)
Net loss for the year
ended December 31, 1995 -- ( 15) (1,481) (1,496)
Partners' deficit at
December 31, 1995 44,773 (593) (20,195) (20,788)
Net loss for the year
ended December 31, 1996 -- (18) (1,784) (1,802)
Abandonment of Limited
Partnership Units (Note H) (55) -- -- --
Partners' deficit at
December 31, 1996 44,718 $ (611) $ (21,979) $ (22,590)
See Accompanying Notes to Consolidated Financial Statements
ANGELES PARTNERS XII
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Years Ended December 31,
1996 1995
Cash flows from operating activities:
Net loss $ (1,802) $ (1,496)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation 4,811 4,574
Amortization of discounts, loan costs, and
leasing commissions 415 398
Bad debt expense (recovery), net 167 (7)
Equity in loss of joint venture 67 140
Change in accounts:
Restricted cash (25) (17)
Accounts receivable (192) --
Escrows for taxes (119) 96
Other assets 17 --
Accounts payable 91 (234)
Tenant security deposit liabilities 60 (17)
Accrued taxes 16 64
Other liabilities (201) 289
Net cash provided by operating
activities: 3,305 3,790
Cash flows from investing activities:
Property improvements and replacements (1,648) (2,144)
Deposits to restricted escrows (142) (1,016)
Advances to joint venture (89) --
Withdrawals from restricted escrows 482 623
Net cash used in investing activities (1,397) (2,537)
Cash flows from financing activities:
Payments on mortgage notes payable (724) (5,964)
Proceeds from refinance -- 6,600
Loan costs -- (293)
Net cash (used in) provided by
financing activities (724) 343
Net increase in cash and cash equivalents 1,184 1,596
Unrestricted cash and cash equivalents at
beginning of year 3,643 2,047
Unrestricted cash and cash equivalents at
end of year $ 4,827 $ 3,643
Supplemental disclosure of cash flow
information
Cash paid for interest $ 6,093 $ 5,965
See Accompanying Notes to Consolidated Financial Statements
ANGELES PARTNERS XII
Notes to Consolidated Financial Statements
December 31, 1996
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, 1996, 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.
Unrestricted 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.
Restricted Cash - Tenant Security Deposits: The Partnership requires security
deposits from all apartment lessees for the duration of the lease and considers
the deposits to be restricted cash. Deposits are refunded when the tenant
vacates the apartment if there has been no damage to the unit.
Loan Costs: Loan costs of $2,719,000 are included in "Other assets" on the
balance sheet and are being amortized on a straight-line basis over the life of
the loans. Accumulated amortization is $1,069,000 at December 31, 1996, and is
also included in "Other assets" on the balance sheet.
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, $1,610,000 of the proceeds were designated for "Capital
Improvement Escrows" for certain capital improvements. The balance in the
Capital Improvement Escrows at December 31, 1996, is $416,000.
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 $166,000 at December 31, 1996.
GENERAL - In addition to the Capital Improvement Escrows, General Escrow
Accounts of $711,000 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, 1996, is $755,000.
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 F"). 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.
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 (see "Note B").
Reclassifications: Certain reclassifications have been made to the 1995
balances to conform to the 1996 presentation.
NOTE B - MORTGAGE NOTES PAYABLE
The principal terms of mortgage notes payable are as follows:
(dollar amounts in thousands)
Monthly Principal Principal
Payment Stated Balance Balance At
Including Interest Maturity Due At December 31,
Property Interest Rate Date Maturity 1996
Briarwood Apartments
1st mortgage $ 12 7.83% 10/2003 $ 1,404 $ 1,578
2nd mortgage (1) 7.83% 10/2003 50 50
Chambers Ridge Apartments
1st mortgage 41 7.83% 10/2003 4,849 5,450
2nd mortgage 1 7.83% 10/2003 174 174
Cooper Point Plaza
1st mortgage 45 10.5% 09/2012 43 4,135
Gateway Gardens Apartments
1st mortgage 48 7.83% 10/2003 5,657 6,358
2nd mortgage 1 7.83% 10/2003 203 203
Hunters Glen Apartments-IV
1st mortgage 65 8.43% 10/2003 7,787 8,418
Hunters Glen Apartments-V
1st mortgage 67 7.83% 10/2003 7,920 8,900
2nd mortgage 2 7.83% 10/2003 285 285
Hunters Glen Apartments-VI
1st mortgage 70 7.83% 10/2003 8,243 9,263
2nd mortgage 2 7.83% 10/2003 297 297
Pickwick Place Apartments
1st mortgage 54 9.1% 05/2005 5,775 6,513
Southpointe Apartments
1st mortgage 79 8.59% 07/1999 11,000 11,000
Twin Lake Towers Apartments
1st mortgage 83 7.83% 10/2003 9,782 10,995
2nd mortgage 2 7.83% 10/2003 352 352
73,971
Less unamortized
discounts at a
rate of 8.13% (1,215)
Total $ 572 $ 63,821 $ 72,756
(1) Monthly payment is less than $1000
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.
The estimated fair value of the Partnership's aggregate mortgage notes payable
is approximately $64,967,000 (excluding Southpointe) as compared to the carrying
value of $62,971,000 (excluding Southpointe). This estimate is not necessarily
indicative of the amounts the Partnership may pay in actual market transactions.
The Managing General Partner believes that it is not appropriate to use the
Partnership's incremental borrowing rate for the mortgage secured by Southpointe
Apartments since there are currently no markets in which the Partnership could
obtain similar financing. Therefore, the Managing General Partner considers
estimation of fair value for this note to be impractical.
Scheduled principal payments of mortgage notes payable subsequent to December
31, 1996, are as follows (in thousands):
1997 $ 792
1998 861
1999 11,936
2000 1,018
2001 1,106
Thereafter 58,258
$ 73,971
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 2005.
Total capitalized loan costs incurred in 1995 for the refinancing were $214,000
and are being amortized over the life of the loan.
On August 7, 1995, the Partnership refinanced the mortgage encumbering Hunters
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 $79,000 and are being amortized over the life of the loan.
NOTE C - 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.
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:
1996 1995
(in thousands, except unit data)
Net loss as reported $ (1,802) $ (1,496)
Add (deduct):
Depreciation differences 566 311
Unearned income (197) (74)
Discounts on mortgage
notes payable 19 13
Other 40 17
Federal taxable loss $ (1,374) $ (1,229)
Federal taxable loss per
limited partnership unit $ (30.42) $ (27.17)
The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets and liabilities (in thousands):
Net liabilities $ (22,590)
Land and buildings 8,669
Accumulated depreciation (11,792)
Syndication and distribution costs 6,093
Other 93
Net liabilities - Federal tax basis $ (19,527)
NOTE D - 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 amounts owed to the
Managing General Partner and affiliates for the twelve month periods ended
December 31, 1996 and 1995, were paid or accrued:
1996 1995
(in thousands)
Property management fees $ 1,033 $ 1,032
Reimbursement for services of affiliates,
including $33,000 of construction
service reimbursements (included in
maintenance expense) 453 443
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
investment property known as the Princeton Meadows Golf Course, in the amount of
$1,567,000 at December 31, 1996. Total interest expense was $200,000 and
$203,000 for the years ended December 31, 1996 and 1995, 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% 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 39% 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 1.3% 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 and 1996 annual meetings 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. ("Insignia"),
which provides property management and partnership administration services to
the Partnership, owns 126,500 Class A Shares of AMIT at December 31, 1996. As of
February 1, 1997, the number of shares owned by LAC decreased to 96,800. These
Class A Shares entitle LAC to vote approximately 2.2% of the total shares. In
addition, Insignia has engaged and continues to engage in discussions with AMIT
regarding various potential business combinations with affiliates of Insignia.
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 E - INVESTMENT PROPERTIES AND ACCUMULATED DEPRECIATION
Initial Cost
To Partnership
(in thousands)
Cost
Buildings Capitalized
and Related (Removed)
Personal Net Subsequent
Description Encumbrances Land Property to Acquisition
Investment Properties
Briarwood Apartments $ 1,628 $ 136 $ 1,409 $ 240
Chambers Ridge Apartments 5,624 527 7,823 1,167
Cooper Point Plaza 4,135 1,689 5,319 1,872
Gateway Gardens Apartments 6,561 255 6,206 876
Hunters Glen Apartments-IV 8,418 1,552 8,324 1,196
Hunters Glen Apartments-V 9,185 1,820 9,759 1,304
Hunters Glen Apartments-VI 9,560 1,981 10,620 1,271
Pickwick Place Apartments 6,513 603 6,552 1,821
Southpointe Apartments 11,000 663 8,616 610
Twin Lake Towers Apartments 11,347 1,115 12,806 1,033
Totals $ 73,971 $ 10,341 $ 77,434 $ 11,390
<TABLE>
<CAPTION>
Gross Amount At Which Carried
At December 31, 1996
(in thousands)
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 $ 1,649 $ 1,785 $ 1,035 06/25/85 10-20
Chambers Ridge Apartments 527 8,990 9,517 5,855 07/26/84 10-20
Cooper Point Plaza 1,689 7,191 8,880 4,671 12/14/84 10-20
Gateway Gardens Apartments 255 7,082 7,337 4,485 12/21/84 10-20
Hunters Glen Apartments - IV 1,552 9,520 11,072 5,716 01/31/85 10-40
Hunters Glen Apartments - V 1,820 11,063 12,883 6,693 01/31/85 10-40
Hunters Glen Apartments - VI 1,981 11,891 13,872 7,235 01/31/85 10-40
Pickwick Place Apartments 603 8,373 8,976 4,998 05/11/84 10-20
Southpointe Apartments 663 9,226 9,889 5,951 06/12/85 10-20
Twin Lake Towers Apartments 1,115 13,839 14,954 9,172 03/30/84 10-20
Totals $ 10,341 $ 88,824 $ 99,165 $ 55,811
</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,
1996 1995
(in thousands)
Investment Properties
Balance at beginning of year $ 97,572 $ 95,576
Property improvements 1,648 2,144
Disposal of assets (55) (148)
Balance at end of year $ 99,165 $ 97,572
Accumulated Depreciation
Balance at beginning of year $ 51,033 $ 46,563
Additions charged to expense 4,811 4,574
Disposal of assets (33) (104)
Balance at end of year $ 55,811 $ 51,033
The aggregate cost of the real estate for Federal income tax purposes at
December 31, 1996 and 1995, is $107,834,000 and $106,169,000 respectively. The
accumulated depreciation taken for Federal income tax purposes at December 31,
1996 and 1995, is $67,603,000 and $63,357,000, respectively.
NOTE F - INVESTMENT IN JOINT VENTURE
Condensed balance sheet information of the Joint Venture at December 31, 1996,
is as follows:
December 31,
1996
(in thousands)
Assets
Cash $ 76
Deferred charges and other assets 124
Investment properties, net 1,894
Total $ 2,094
Liabilities and Partners' Capital
Note payable to AMIT (Note D) $ 1,567
Other liabilities 527
Partners' capital --
$ 2,094
The condensed statements of operations of the Joint Venture for the years ended
December 31, 1996 and 1995, are summarized as follows:
December 31,
1996 1995
(in thousands)
Revenue $ 1,417 $ 1,158
Costs and expenses (1,567) (1,472)
Net loss $ (150) $ (314)
The Partnership's equity interest in the loss of the Joint Venture was $67,000
and $140,000 for the years ended December 31, 1996 and 1995, 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.
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 has engaged an engineering firm
to conduct consulting and compliance work and a second firm to perform the field
work necessary for the clean-up. The Joint Venture has recorded a liability of
$199,000 for the costs of the clean-up. The contracts have been executed and
work field is complete with the expected completion date of the compliance work
to be sometime in 1997. The Managing General Partner believes the balance of
$41,000 in the liability is sufficient to cover all costs associated with this
incident.
NOTE G - 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 Managing General Partner's expectations.
As of December 31, 1996, the Partnership had minimum future rentals under
noncancellable leases with terms ranging from twelve months to ten years (in
thousands):
1997 $ 641
1998 551
1999 534
2000 475
2001 412
Thereafter 1,100
$ 3,713
NOTE H - ABANDONED LIMITED PARTNERSHIP UNITS
In 1996, the number of Limited Partnership Units decreased by 55 units, due to
limited partners abandoning their units. In abandoning his or her Limited
Partnership Unit, a limited partner relinquishes all right, title and interest
in the Partnership as of the date of abandonment. However, during the year of
abandonment, the Limited Partner will still be allocated his or her share of the
income or loss. The loss per Limited Partnership Unit in the accompanying
Statement of Operations is calculated based on the number of units outstanding
at the beginning of the year.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANT ON ACCOUNTING AND FINANCIAL
DISCLOSURES
There were no disagreements with Ernst & Young, LLP regarding the 1996 or 1995
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,
1996, their ages and the nature of all positions with ARC II presently held by
them are as follows:
Name Age Position
Carroll D. Vinson 56 President, Director
Robert D. Long, Jr. 29 Controller and Principal
Accounting Officer
William H. Jarrard, Jr. 50 Vice President
John K. Lines, Esq. 37 Vice President and
Secretary
Kelley M. Buechler 39 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.
William H. Jarrard, Jr. has been Managing Director - Partnership Administration
of Insignia since January 1991. Mr. Jarrard served as Managing Director -
Partnership Administration and Asset Management from July 1994 until January
1996.
John K. Lines, Esq. has been Insignia's General Counsel since June 1994 and
General Counsel and Secretary since July 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 May
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 the General Partner and has served
as Secretary of Insignia since 1991.
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 D" 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 January 1, 1997, 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, 1996, 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 D" 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 1996.
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 25, 1997
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 25, 1997
Carroll D. Vinson
/s/Robert D. Long, Jr. Controller and Principal March 25, 1997
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.
27 Financial Data Schedule is filed as an Exhibit to this
report.
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 1996 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> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 4,827
<SECURITIES> 0
<RECEIVABLES> 165
<ALLOWANCES> 183
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 99,165
<DEPRECIATION> 55,811
<TOTAL-ASSETS> 53,430
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 72,756
0
0
<COMMON> 0
<OTHER-SE> (22,590)
<TOTAL-LIABILITY-AND-EQUITY> 53,430
<SALES> 0
<TOTAL-REVENUES> 21,321
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 23,056
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,538
<INCOME-PRETAX> (1,802)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,802)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,802)
<EPS-PRIMARY> (39.85)
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
</FN>
</TABLE>
