FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
QUARTERLY OR TRANSITIONAL REPORT
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________to _________
Commission file number 0-13309
ANGELES PARTNERS XII
(Exact name of small business issuer as specified in its charter)
California 95-3903623
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
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
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
ANGELES PARTNERS XII
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
September 30, 1999
Assets
Cash and cash equivalents $ 9,303
Receivables and deposits (net of allowance for
doubtful accounts of $666) 1,604
Restricted escrows 885
Other assets 1,104
Investment in joint venture 171
Investment properties:
Land $ 7,989
Buildings and related personal property 77,917
85,906
Less accumulated depreciation (56,125) 29,781
$42,848
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 860
Tenant security deposit liabilities 980
Accrued property taxes 911
Other liabilities 681
Mortgage notes payable 56,356
Partners' Deficit
General partners $ 108
Limited partners (44,718 units issued and
outstanding) 17,048 (16,940)
$ 42,848
See Accompanying Notes to Consolidated Financial Statements
b)
ANGELES PARTNERS XII
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 4,979 $ 5,156 $15,129 $15,351
Other income 377 405 1,079 1,080
Gain on sale of investment
properties 8,649 -- 10,827 --
Total revenues 14,005 5,561 27,035 16,431
Expenses:
Operating 1,875 2,358 5,850 6,623
General and administrative 153 153 441 463
Depreciation 1,099 1,250 3,423 3,720
Interest 1,243 1,604 4,287 4,823
Property taxes 402 571 1,556 1,709
Casualty loss 160 141 59 153
Total expenses 4,932 6,077 15,616 17,491
Income (loss) before equity in income of
joint venture and extraordinary items 9,073 (516) 11,419 (1,060)
Equity in income (loss) of joint venture (7) 32 1,314 60
Income (loss) before extraordinary items 9,066 (484) 12,733 (1,000)
Equity in extraordinary loss on the
extinguishment of debt of joint
venture (Note C) -- -- (3) --
Extraordinary loss on extinguishment
of debt (Note E) -- -- (556) --
Net income (loss) $ 9,066 $ (484) $12,174 $(1,000)
Net income (loss) allocated
to general partners $ 91 $ (5) $ 969 $ (10)
Net income (loss) allocated
to limited partners 8,975 (479) 11,205 (990)
$ 9,066 $ (484) $12,174 $(1,000)
Net income (loss) per limited
partnership unit:
Income (loss) before extraordinary
items $200.70 $(10.71) $262.94 $(22.14)
Extraordinary items -- -- (12.37) --
$200.70 $ (10.71) $250.57 $(22.14)
Distributions per limited partnership
unit $ 10.00 $ -- $ 65.79 $ --
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
c)
ANGELES PARTNERS XII
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
(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, 1998 44,718 $ (638) $(25,311) $ (25,949)
Net income for the nine months
ended September 30, 1999 -- 969 11,205 12,174
Distributions to partners -- (223) (2,942) (3,165)
Partners' deficit
at September 30, 1999 44,718 $ 108 $(17,048) $ (16,940)
See Accompanying Notes to Consolidated Financial Statements
d)
ANGELES PARTNERS XII
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Nine Months Ended
September 30,
1999 1998
Cash flows from operating activities:
Net income (loss) $ 12,174 $ (1,000)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation 3,423 3,720
Amortization of discounts, loan costs, and
leasing commissions 251 319
Equity in extraordinary loss on extinguishment of
debt of joint venture 3 --
Extraordinary loss on extinguishment of debt 556 --
Gain on sale of investment properties (10,827) --
Equity in income of joint venture (1,314) (60)
Casualty loss 59 153
Change in accounts:
Receivables and deposits 381 (104)
Other assets (126) 37
Accounts payable 305 232
Tenant security deposit liabilities 21 --
Accrued property taxes (174) 63
Other liabilities 411 (503)
Net cash provided by operating activities 5,143 2,857
Cash flows from investing activities:
Property improvements and replacements (2,860) (1,624)
Net receipts from restricted escrows 384 66
Repayment of advance to joint venture 149 --
Net proceeds from (payments for) casualty gain (loss) 101 (17)
Proceeds from sale of investment properties 5,996
Distributions from joint venture 1,175 --
Net cash provided by (used in) investing activities 4,945 (1,575)
Cash flows from financing activities:
Payments on mortgage notes payable (598) (646)
Repayment of loans (3,905) --
Distributions to partners (3,815) --
Debt extinguishment costs (78) --
Net cash used in financing activities (8,396) (646)
Net increase in cash and cash equivalents 1,692 636
Cash and cash equivalents at beginning of period 7,611 6,459
Cash and cash equivalents at end of period $ 9,303 $ 7,095
Supplemental disclosure of cash flow information:
Cash paid for interest $ 4,149 $ 5,153
See Accompanying Notes to Consolidated Financial Statements
d)
ANGELES PARTNERS XII
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(Unaudited)
(in thousands)
Supplemental disclosure of non-cash activities:
In August 1999, Southpointe Apartments was sold to an unaffiliated third party.
Upon closing, the purchaser agreed to assume the mortgage note payable
encumbering the property and to pay the related accrued interest and outstanding
property taxes, resulting in no proceeds being received by the Partnership. In
connection with the sale, investment properties, mortgage notes payable and
other liabilities were adjusted by approximately $3,175,000, $11,017,000 and
$622,000, respectively for non-cash activity for the nine months ended September
30, 1999.
See Accompanying Notes to Consolidated Financial Statements
e)
ANGELES PARTNERS XII
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Angeles Partners
XII (the "Partnership" or "Registrant") have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of Angeles Realty Corporation II (the "Managing General
Partner"), all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three and nine month periods ended September 30, 1999, are not necessarily
indicative of the results that may be expected for the fiscal year ending
December 31, 1999. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Partnership's Annual Report on
Form 10-KSB for the fiscal year ended December 31, 1998.
Principles of Consolidation
The consolidated financial statements of the Partnership include its 99% limited
partnership interest in Pickwick Place AP XII LP. Because the Partnership may
remove the General Partner of Pickwick Place AP XII LP, this partnership is
controlled and consolidated by the Partnership. The consolidated financial
statements also include the Partnership's interests in AP XII Associate GP, LLC,
Hunters Glen Phase I GP, LLC and Hunters Glen Phase V GP, LLC, single member
limited liability corporations, which are wholly-owned by the Registrant. All
significant inter-entity balances have been eliminated. Minority interest is
immaterial and not shown separately in the financial statements.
NOTE B - TRANSFER OF CONTROL
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia Financial Group, Inc. and Insignia Properties Trust
("IPT") merged into Apartment Investment and Management Company ("AIMCO"), a
publicly traded real estate investment trust, with AIMCO being the surviving
corporation (the "Insignia Merger"). As a result, AIMCO acquired 100% ownership
interest in the Managing General Partner. The Managing General Partner does not
believe that this transaction will have a material effect on the affairs and
operations of the Partnership.
NOTE C - INVESTMENT IN JOINT VENTURE
The Partnership had a 44.5% investment in Princeton Golf Course Joint Venture
("Joint Venture"). On February 26, 1999, the Joint Venture sold its only
investment property, Princeton Meadows Golf Course, to an unaffiliated third
party. The sale resulted in net proceeds of approximately $3,411,000 after
payment of closing costs, resulting in a gain on sale of approximately
$3,088,000. In connection with the sale, a commission of approximately $153,000
was paid to the Joint Venture's Managing General Partner in accordance with the
Joint Venture Agreement. The Partnership's 1999 pro-rata share of this gain is
approximately $1,374,000. The Joint Venture also recognized an extraordinary
loss on early extinguishment of debt of approximately $7,000 as a result of
unamortized loan costs being written off. The Partnership's pro-rata share of
this extraordinary loss is approximately $3,000.
Condensed balance sheet information of the Joint Venture at September 30, 1999,
is as follows (in thousands):
Assets
Cash $ 336
Other assets 51
Total $ 387
Liabilities and Partners' Capital
Other liabilities $ 12
Partners' capital 375
Total $ 387
The condensed statements of operations of the Joint Venture for the three and
nine months ended September 30, 1999 and 1998 are summarized as follows:
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
Revenues $ 4 $ 575 $ 94 $1,319
Costs and expenses -- (490) (230) (1,171)
Income (loss) before gain on sale of
investment property and extraordinary
loss on extinguishment of debt 4 85 (136) 148
Gain (loss) on sale of investment
property (20) -- 3,088 --
Extraordinary loss on extinguishment
of debt -- -- (7) --
Net income (loss) $ (16) $ 85 $ 2,945 $ 148
The Partnership realized equity income of approximately $1,314,000 and $60,000
in the Joint Venture for the nine months ended September 30, 1999 and 1998,
respectively. The Partnership also realized equity in the extraordinary loss on
extinguishment of debt of approximately $3,000 for the nine months ended
September 30, 1999.
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 the DEP of the
findings when they were first discovered. However, the DEP did not give 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 engaged an engineering firm to
conduct consulting and compliance work and a second firm to perform the field
work necessary for the clean-up. Field work was in process, with skimmers
having been installed at three test wells on the site. These skimmers were in
place to detect any residual fuel that may have still been in the ground. The
completion date of field work was expected to be in 1999. Upon the sale of the
golf course, as noted above, the Joint Venture was released from any further
responsibility or liability with respect to the clean-up.
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 (i) payments to
affiliates for services and (ii) reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership.
The following payments owed to the Managing General Partner and its affiliates
during the nine months ended September 30, 1999 and 1998 were paid or accrued:
1999 1998
(in thousands)
Property management fees (included in
operating expense) $782 $776
Reimbursement for services of affiliates (included
in investment properties; operating and general and
administrative expenses) 543 395
During the nine months ended September 30, 1999 and 1998, affiliates of the
Managing General Partner were entitled to receive 5% of gross receipts from all
of the Registrant's residential properties (except Southpointe which was 3%) as
compensation for providing property management services. The Registrant paid to
such affiliates approximately $782,000 and $758,000 for the nine months ended
September 30, 1999 and 1998, respectively. Also, during the nine months ended
September 30, 1998, affiliates of the Managing General Partner were entitled to
varying percentages of gross receipts from the Registrant's commercial property
as compensation for providing management services. The Registrant paid to such
affiliates approximately $18,000 for the nine months ended September 30, 1998.
Effective October 1, 1998 (the effective date of the Insignia Merger), these
services for the commercial property were performed by an unrelated party.
Affiliates of the Managing General Partner received reimbursement of accountable
administrative expenses amounting to approximately $543,000 and $395,000 for the
nine months ended September 30, 1999 and 1998, respectively. Included in these
amounts is approximately $268,000 and $62,000 of construction oversight
reimbursements for the nine months ended September 30, 1999 and 1998,
respectively.
In conjunction with the sale of Cooper Point Plaza in January 1999, the Managing
General Partner was paid a distribution of approximately $186,000 in accordance
with the Partnership Agreement.
Angeles Mortgage Investment Trust ("AMIT"), a real estate investment trust,
provided financing (the "AMIT Loan") to the Princeton Meadows Golf Course Joint
Venture (see "Note C"). Pursuant to a series of transactions, affiliates of the
Managing General Partner acquired ownership interests in AMIT. On September 17,
1998, AMIT was merged with and into IPT, the entity which controlled the
Managing General Partner. Effective February 26, 1999, IPT was merged into
AIMCO. As a result, AIMCO became the current holder of the AMIT loan.
Also on February 26, 1999, Princeton Meadows Golf Course was sold to an
unaffiliated third party. Upon closing, the AMIT principal balance of
$1,567,000 plus accrued interest of approximately $17,000 was paid off.
In addition, the Partnership made advances to the Joint Venture as deemed
appropriate by the Managing General Partner. These advances did not bear
interest nor have stated terms of repayment. In June 1999, the advance
receivable from the Joint Venture of approximately $149,000 was paid off from
the proceeds of the sale of the golf course.
On May 13, 1999 and on August 19, 1999, AIMCO Properties, L.P., an affiliate of
the Managing General Partner commenced tender offers to purchase units of
limited partnership interest in the Partnership for a purchase price of $534 and
$832 per unit, respectively. The June offer expired on July 30, 1999 and the
August offer expired on October 15, 1999. Pursuant to the offers, AIMCO
Properties, L.P. acquired a total of 4,625 units. As a result, AIMCO and its
affiliates currently own 21,297 units of limited partnership interest in the
Partnership representing approximately 47.63% of the total outstanding units.
It is possible that AIMCO or its affiliate will make one or more additional
offers to acquire additional limited partnership interests in the Partnership
for cash or in exchange for units in the operating partnership of AIMCO (See
Note H - Legal Proceedings").
NOTE E - SALE OF INVESTMENT PROPERTIES
On January 4, 1999, the Partnership sold its only commercial property, Cooper
Point Plaza, to an unaffiliated third party for net sales proceeds of
approximately $2,013,000 after payment of closing costs and repayment of the
mortgage encumbering the property. The Partnership realized a gain of
approximately $2,364,000 on the sale as a result of the undepreciated value of
the property being written off and the payment of closing costs. In addition,
the Partnership recorded an extraordinary loss on early extinguishment of debt
of approximately $556,000 as a result of unamortized loan costs being written
off and the payment of a prepayment penalty of approximately $78,000 relating to
the prepayment of the mortgage encumbering the property. In conjunction with
the sale, a distribution of approximately $186,000 was paid to the Managing
General Partner in accordance with the Partnership Agreement. In February 1999,
the Partnership made a distribution of approximately $2,032,000 representing
proceeds from the sale of Cooper Point Plaza.
On August 6, 1999, the Partnership sold Southpointe Apartments to an
unaffiliated third party. Upon closing, the purchaser agreed to assume the
mortgage note payable and other liabilities encumbering the property of
approximately $11,017,000 and to pay the related accrued interest of
approximately $487,000 and outstanding property taxes of approximately $135,000.
Consequently, the Registrant received no proceeds relating to this transaction.
The Partnership realized a gain of approximately $8,463,000 on the sale due to
the purchaser's assumption of the mortgage balance which exceeded the
undepreciated value of the property being written off.
NOTE F - CASUALTY LOSSES
During the nine months ended September 30, 1999, a net casualty loss of
approximately $59,000 was recorded due to the recognition of a casualty gain of
approximately $101,000 at Pickwick Place Apartments and a casualty loss of
approximately $160,000 at Southpointe Apartments. The casualty gain at Pickwick
Place related to storm damage in January 1999 and a small fire in February 1999.
During August 1999, there was another fire which destroyed the indoor tennis
courts and nearby maintenance shed at the property. The estimated cost of
repairs is approximately $500,000 and the anticipated insurance proceeds are
expected to cover these expenses.
The casualty loss at Southpointe Apartments resulted from the write-off of
assets that were replaced in 1999 as a result of damage caused by a fire at the
property in October 1998.
In June 1998, there was a fire at Pickwick Place Apartments which extensively
damaged 12 apartment units. As a result, the Partnership recorded a loss on
disposal of property of approximately $79,000. In addition, there were two
smaller fires in May 1998 at Hunters Glen V and Hunters Glen VI which resulted
in losses on disposal of properties for approximately $2,000 and $4,000,
respectively. There was also some water damage at Southpointe Apartments which
resulted in damages of approximately $10,000. Finally, in the third quarter of
1998, a loss on disposal of
properties was recorded at Chambers Ridge Apartments and Twin Lake Towers
Apartments for approximately $35,000 and $23,000, respectively, as the result of
re-roofing projects at both investment properties. The losses occurred due to
the write-off of the old roofs that were not fully depreciated upon completion
of the new roofing projects.
NOTE G - SEGMENT REPORTING
Description of the types of products and services from which the reportable
segment derives its revenues:
The Partnership has one reportable segment: residential properties consisting of
eight apartment complexes located in six states - Iowa (2 properties),
Pennsylvania (1 property), New Jersey (3 properties), Illinois (1 property), and
Washington (1 property). The Partnership rents apartment units to tenants for
terms that are typically twelve months or less.
Measurement of segment profit or loss:
The Partnership evaluates performance based on net income. The accounting
policies of the reportable segment are the same as those described in the
summary of significant accounting policies in the Partnership's Annual Report on
Form 10-KSB for the year ended December 31, 1998.
Factors management used to identify the Partnership's reportable segment:
The Partnership's reportable segment consists of investment properties that
offer similar products and services. Although each of the investment properties
are managed separately, they have been aggregated into one segment as they
provide services with similar types of products and customers.
Segment information for the nine month periods ended September 30, 1999 and 1998
is shown in the tables below (in thousands). The "Other" column includes
Partnership administration related items and income and expense not allocated to
the reportable segment.
1999 Residential Other Totals
Rental income $15,120 $ 9 $15,129
Other income 924 155 1,079
Gain on sale of property 8,463 2,364 10,827
Interest expense 4,281 6 4,287
Depreciation 3,423 -- 3,423
General and administrative expense -- 441 441
Casualty loss (59) -- (59)
Equity in income of joint venture -- 1,314 1,314
Extraordinary loss on the
extinguishment of debt -- (556) (556)
Equity in extraordinary loss on
debt extinguishment of joint venture -- (3) (3)
Segment profit 9,344 2,830 12,174
Total assets 36,476 6,372 42,848
Capital expenditures for
investment properties 2,860 -- 2,860
1998 Residential Other Totals
Rental income $14,812 $ 539 $15,351
Other income 876 204 1,080
Interest expense 4,484 339 4,823
Depreciation 3,454 266 3,720
General and administrative expense -- 463 463
Casualty loss (153) -- (153)
Equity in income of joint venture -- 60 60
Segment loss (434) (566) (1,000)
Total assets 38,962 10,637 49,599
Capital expenditures for
investment properties 1,624 -- 1,624
NOTE H - LEGAL PROCEEDINGS
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, the Managing General Partner and several of their affiliated
partnerships and corporate entities. The complaint purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition by Insignia Financial Group, Inc.
("Insignia") and entities which were, at one time, affiliates of Insignia
("Insignia Affiliates") of interests in certain general partner entities, past
tender offers by Insignia Affiliates to acquire limited partnership units, the
management of partnerships by Insignia Affiliates and the Insignia Merger (see
"Note B - Transfer of Control"). The complaint seeks monetary damages and
equitable relief, including judicial dissolution of the Partnership. On June
25, 1998, the Managing General Partner filed a motion seeking dismissal of the
action. In lieu of responding to the motion, the plaintiffs have filed an
amended complaint. The Managing General Partner filed demurrers to the amended
complaint which were heard February 1999. Pending the ruling on such demurrers,
settlement negotiations commenced. On November 2, 1999, the parties executed
and filed a Stipulation of Settlement ("Stipulation"), settling claims, subject
to final court approval, on behalf of the Partnership and all limited partners
who own units as of November 3, 1999. The Court has preliminarily approved the
Settlement and scheduled a final approval hearing for December 10, 1999. In
exchange for a release of all claims, the Stipulation provides that, among other
things, an affiliate of the Managing General Partner will make tender offers for
all outstanding limited partnership interests in 49 partnerships, including the
Registrant, subject to the terms and conditions set forth in the Stipulation,
and has agreed to establish a reserve to pay an additional amount in settlement
to qualifying class members (the "Settlement Fund"). At the final approval
hearing, Plaintiffs' counsel will make an application for attorneys' fees and
reimbursement of expenses, to be paid in part by the partnerships and in part
from the Settlement Fund. The Managing General Partner does not anticipate that
costs associated with this case will be material to the Partnership's overall
operations.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature arising in the ordinary course of business.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The matters discussed in this Form 10-QSB contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the
disclosures contained in this Form 10-QSB and the other filings with the
Securities and Exchange Commission made by the Registrant from time to time.
The discussion of the Registrant's business and results of operations, including
forward-looking statements pertaining to such matters, does not take into
account the effects of any changes to the Registrant's business and results of
operation. Accordingly, actual results could differ materially from those
projected in the forward-looking statements as a result of a number of factors,
including those identified herein.
The Partnership's investment properties consist of nine apartment complexes.
The following table sets forth the average occupancy of the properties for the
nine months ended September 30, 1999 and 1998:
Average Occupancy
Property 1999 1998
Hunters Glen - IV Apartments 96% 97%
Plainsboro, New Jersey
Hunters Glen - V Apartments 97% 97%
Plainsboro, New Jersey
Hunters Glen - VI Apartments 96% 96%
Plainsboro, New Jersey
Gateway Gardens Apartments 97% 97%
Cedar Rapids, Iowa
Chambers Ridge Apartments (1) 96% 92%
Harrisburg, Pennsylvania
Briarwood Apartments 98% 97%
Cedar Rapids, Iowa
Twin Lake Towers Apartments 98% 96%
Westmont, Illinois
Pickwick Place Apartments 93% 94%
Indianapolis, Indiana
(1) The occupancy at Chambers Ridge has increased due to improved market
conditions.
Results from Operations
The Partnership's net income for the nine months ended September 30, 1999 was
approximately $12,174,000 compared to a net loss of approximately $1,000,000 for
the corresponding period in 1998. The Partnership recorded net income of
approximately $9,066,000 for the three months ended September 30, 1999 compared
to a net loss of $484,000 for the corresponding period in 1998. The increase in
net income for the nine months ended September 30, 1999 compared with the nine
months ended September 30, 1998 was primarily due to an increase in total
revenues resulting from the gain on sale of Cooper Point Plaza and Southpointe
Apartments, and to a lesser extent, the equity in income from the sale of the
Princeton Meadows Golf Course Joint Venture.
On January 4, 1999, the Partnership sold its only commercial property, Cooper
Point Plaza, to an unaffiliated third party for net sales proceeds of
approximately $2,013,000 after payment of closing costs and repayment of the
mortgage encumbering the property. The Partnership realized a gain of
approximately $2,364,000 on the sale as a result of the undepreciated value of
the property being written off and the payment of closing costs. In addition,
the Partnership recorded an extraordinary loss on early extinguishment of debt
of approximately $556,000 as a result of unamortized loan costs being written
off and the payment of a prepayment penalty of approximately $78,000 relating to
the prepayment of the mortgage encumbering the property. In conjunction with
the sale, a distribution of approximately $186,000 was paid to the Managing
General Partner in accordance with the Partnership Agreement.
On August 6, 1999, the Partnership sold Southpointe Apartments to an
unaffiliated third party. Upon closing, the purchaser agreed to assume the
mortgage note payable and other liabilities encumbering the property of
approximately $11,017,000 and to pay the related accrued interest of
approximately $487,000 and outstanding property taxes of approximately $135,000.
Consequently, the Registrant received no proceeds relating to this transaction.
The Partnership realized a gain of approximately $8,463,000 on the sale due to
the purchaser's assumption of the mortgage balance which exceeded the
undepreciated value of the property being written off.
The Partnership had a 44.5% investment in Princeton Meadows Golf Course Joint
Venture. For the nine months ended September 30, 1999, the Partnership realized
equity in income of the Joint Venture of approximately $1,314,000, which
included the gain on disposal of Princeton Meadows Golf Course of approximately
$1,374,000 and a loss on operations of $60,000, as compared to equity in income
of the Joint Venture of approximately $60,000 for the nine months ended
September 30, 1998. The Partnership also realized equity in the extraordinary
loss on extinguishment of debt of the Joint Venture of $3,000 for the nine
months ended September 30, 1999.
Excluding the impact of the sale of Cooper Point Plaza, Southpointe Apartments
and the Princeton Meadows Golf Course, net income increased approximately
$634,000 and $1,106,000 for the three and nine month periods ended September 30,
1999, respectively, compared to the corresponding periods in 1998. These
increases are due to increases in total revenues in addition to decreases in
total expenses. The increase in total revenues is primarily attributable to an
increase in rental income as a result of increases in average rental rates at
all the Partnership's properties as well as increases in occupancy at Briarwood,
Chambers Ridge and Twin Lake Towers, despite decreases in occupancy at Pickwick
Place and Hunters Glen IV. The decrease in total expenses, is primarily
attributable to a decrease in operating expense, which is partially offset by
increases in depreciation and property tax expense. Operating expense decreased
primarily due to decreases in insurance and maintenance expense. The decrease
in insurance expense is due to lower premiums as a result of a change in
insurance carriers late in 1998. The decrease in maintenance expense is
primarily due to the completion of the following major improvement projects
during the nine months ended September 30, 1998: a parking lot project and
interior and exterior building improvements at Chambers Ridge; swimming pool
repairs, landscaping, and interior building renovations at Hunters Glen IV, V,
and VI.
Depreciation expense increased primarily due to increased property improvements
and replacements at all of the properties during the fourth quarter of 1998 and
the nine months ended September 30, 1999. Property tax expense increased mainly
due to an increase in the assessment value of Gateway Gardens.
Included in general and administrative expenses for both of the nine month
periods ended September 30, 1999 and 1998 are reimbursements to the Managing
General Partner allowed under the Partnership Agreement. In addition, costs
associated with the quarterly and annual communications with investors and
regulatory agencies and the annual audit required by the Partnership Agreement
are also included.
During the nine months ended September 30, 1999, a net casualty loss of
approximately $59,000 was recorded due to the recognition of a net casualty gain
of approximately $101,000 at Pickwick Place Apartments and a net casualty loss
of approximately $160,000 at Southpointe Apartments. The casualty gain at
Pickwick Place related to storm damage in January 1999 and a small fire in
February 1999. During August 1999, there was another fire which destroyed the
indoor tennis courts and nearby maintenance shed at the property. The estimated
cost of repairs is approximately $500,000 and the anticipated insurance proceeds
are expected to cover these expenses. The casualty loss at Southpointe
Apartments resulted from the write-off of assets that were replaced in 1999 as a
result of damage caused by a fire at the property in October 1998.
In June 1998, there was a fire at Pickwick Place Apartments which extensively
damaged 12 apartment units. As a result, the Partnership recorded a loss on
disposal of property of approximately $79,000. In addition, there were two
smaller fires in May 1998 at Hunters Glen V and Hunters Glen VI which resulted
in losses on disposal of properties of approximately $2,000 and $4,000,
respectively. There was also some water damage at Southpointe Apartments which
resulted in damages of approximately $10,000. Finally, in the third quarter of
1998, a loss on disposal of properties was recorded at Chambers Ridge Apartments
and Twin Lake Towers Apartments for approximately $35,000 and $23,000,
respectively, as the result of re-roofing projects at both investment
properties. The losses occurred due to the write-off of the old roofs that were
not fully depreciated upon completion of the new roofing projects.
As part of the ongoing business plan of the Partnership, the Managing General
Partner monitors the rental market environment at its investment properties to
assess the feasibility of increasing rents, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expenses. As part of
this plan, the Managing General Partner attempts to protect the Partnership from
the burden of inflation-related increases in expenses by increasing rents and
maintaining a high overall occupancy level. However, due to changing market
conditions, which can result in the use of rental concessions and rental
reductions to offset softening market conditions, there is no guarantee that the
Managing General Partner will be able to sustain such a plan.
Liquidity and Capital Resources
At September 30, 1999, the Partnership had cash and cash equivalents of
approximately $9,303,000 as compared to approximately $7,095,000 at September
30, 1998. Cash and cash equivalents increased approximately $1,692,000 for the
nine months ended September 30, 1999 from the Registrant's fiscal year end. The
increase is primarily due to approximately $5,143,000 of net cash provided by
operating activities and approximately $4,945,000 of net cash provided by
investing activities, which was partially offset by approximately $8,396,000 of
net cash used in financing activities. Cash provided by investing activities
consisted primarily of net proceeds from the sale of Cooper Point Plaza and
distributions received from the Princeton Meadows Joint Venture and, to a lesser
extent, net receipts from restricted escrows maintained by the mortgage lender,
repayment of an advance to the Joint Venture and net proceeds from a casualty
gain, which were partially offset by property improvements and replacements.
Cash used in financing activities consisted primarily of distributions to
partners and the repayment of mortgage principal upon the sale of Cooper Pointe
Plaza and to a lesser extent, payments of principal made on the mortgages
encumbering the Registrant's properties and debt extinguishment costs. The
Registrant invests its working capital reserves in a money market account.
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 Registrant and to comply with
Federal, state, and local legal and regulatory requirements. Capital
improvements planned for each of the Registrant's properties are detailed below.
Hunters Glen Apartments IV
The Partnership completed approximately $258,000 in capital expenditures at
Hunters Glen Apartments IV as of September 30, 1999 consisting primarily of
interior improvements, air conditioning upgrades and grounds lighting. These
improvements were funded primarily from cash flow. Based on a report received
from an independent third party consultant analyzing necessary exterior
improvements and estimates made by the Managing General Partner on interior
improvements, it is estimated that the property requires approximately
$1,022,000 of capital improvements over the next few years. The Partnership has
budgeted, but is not limited to, capital improvements of approximately
$1,071,000 for 1999 at this property which include certain of the required
improvements and consist of landscaping and irrigation, HVAC condensing unit
replacement and parking lot and pool upgrades.
Hunters Glen Apartments V
The Partnership completed approximately $180,000 in capital expenditures at
Hunters Glen Apartments V as of September 30, 1999 consisting primarily of air
conditioning upgrades, grounds lighting, swimming pool improvements, and
interior improvements. These improvements were funded primarily from cash flow.
Based on a report received from an independent third party consultant analyzing
necessary exterior improvements and estimates made by the Managing General
Partner on interior improvements, it is estimated that the property requires
approximately $1,163,000 of capital improvements over the next few years. The
Partnership has budgeted, but is not limited to, capital improvements of
approximately $1,216,000 for 1999 at this property which include certain of the
required improvements and consist of balcony and stairwell improvements,
landscaping and parking lot upgrades.
Hunters Glen Apartments VI
The Partnership completed approximately $205,000 in capital expenditures at
Hunters Glen Apartments VI as of September 30, 1999 consisting primarily of air
conditioning upgrades, interior improvements, grounds lighting and swimming pool
improvements. These improvements were funded primarily from cash flow. Based
on a report received from an independent third party consultant analyzing
necessary exterior improvements and estimates made by the Managing General
Partner on interior improvements, it is estimated that the property requires
approximately $1,245,000 of capital improvements over the next few years. The
Partnership has budgeted, but is not limited to, capital improvements of
approximately $1,302,000 for 1999 at this property which include certain of the
required improvements and consist of exterior building improvements, landscaping
and irrigation improvements and parking lot upgrades.
Gateway Gardens Apartments
The Partnership completed approximately $239,000 in capital expenditures at
Gateway Gardens Apartments as of September 30, 1999 consisting primarily of
landscaping, interior improvements, electrical and heating improvements,
flooring replacements and new appliances. These improvements were funded
primarily from cash flow and replacement reserves. Based on a report received
from an independent third party consultant analyzing necessary exterior
improvements and estimates made by the Managing General Partner on interior
improvements, it is estimated that the property requires approximately $332,000
of capital improvements over the next few years. The Partnership has budgeted,
but is not limited to, capital improvements of approximately $400,000 for 1999
at this property which include certain of the required improvements and consist
of heating and air conditioning improvements along with electrical and flooring
upgrades.
Chambers Ridge Apartments
The Partnership completed approximately $262,000 in capital expenditures at
Chambers Ridge Apartments as of September 30, 1999 consisting primarily of a
roof replacement project, swimming pool improvements, water heater replacement,
flooring and appliance replacements, equipment purchases and plumbing upgrades.
These improvements were funded primarily from cash flow. Based on a report
received from an independent third party consultant analyzing necessary exterior
improvements and estimates made by the Managing General Partner on interior
improvements, it is estimated that the property requires approximately
$2,264,000 of capital improvements over the next few years. The Partnership has
budgeted, but is not limited to, capital improvements of approximately
$1,544,000 for 1999 at this property which include certain of the required
improvements and consist of landscaping, parking lot and pool upgrades and HVAC
condensing unit replacements.
Briarwood Apartments
The Partnership completed approximately $27,000 in capital expenditures at
Briarwood Apartments as of September 30, 1999 consisting primarily of air
conditioning upgrades, carpet and vinyl replacement, electrical work and roof
improvements. These improvements were funded primarily from cash flow. Based
on a report received from an independent third party consultant analyzing
necessary exterior improvements and estimates made by the Managing General
Partner on interior improvements, it is estimated that the property requires
approximately $66,000 of capital improvements over the next few years. The
Partnership has budgeted, but is not limited to, capital improvements of
approximately $82,000 for 1999 at this property which include certain of the
required improvements and consist of structural improvements and other small
projects.
Twin Lake Towers Apartments
The Partnership completed approximately $554,000 in capital expenditures at Twin
Lake Towers Apartments as of September 30, 1999 consisting primarily of HVAC
condensing unit replacement, carpet replacement and other building improvements.
These improvements were funded primarily from cash flow and replacement
reserves. Based on a report received from an independent third party consultant
analyzing necessary exterior improvements and estimates made by the Managing
General Partner on interior improvements, it is estimated that the property
requires approximately $3,078,000 of capital improvements over the next few
years. The Partnership has budgeted, but is not limited to, capital
improvements of approximately $3,075,000 for 1999 at this property which include
certain of the required improvements and consist of HVAC condensing unit
replacement, parking lot upgrades and landscaping.
Pickwick Place Apartments
The Partnership completed approximately $770,000 in capital expenditures at
Pickwick Place Apartments as of September 30, 1999 consisting primarily of
flooring, roof and drapery replacements, renovations to its recreational
facilities, fencing upgrades, new appliances and replacement of property due to
a fire in June 1998 and August 1999. These improvements were funded primarily
from cash flow and insurance proceeds. Based on a report received from an
independent third party consultant analyzing necessary exterior improvements and
estimates made by the Managing General Partner on interior improvements, it is
estimated that the property requires approximately $319,000 of capital
improvements over the next few years. The Partnership has budgeted, but is not
limited to, capital improvements of approximately $524,000 for 1999 at this
property which include certain of the required improvements and consist of roof,
plumbing, electrical and balcony upgrades.
The additional capital expenditures will be incurred only if cash is available
from operations, capital reserve accounts or from partnership reserves. To the
extent that such budgeted capital improvements are completed, the Registrant's
distributable cash flow, if any, may be adversely affected at least in the short
term.
The Registrant's current assets are thought to be sufficient for any near-term
needs (exclusive of capital improvements) of the Registrant. The Registrant's
mortgage indebtedness encumbering its properties amounts to approximately
$56,356,000, net of unamortized discounts, with maturity dates ranging from
October 2003 to September 2005, during which time balloon payments totaling
$52,778,000 are due. The Managing General Partner may attempt to refinance such
indebtedness and/or sell the properties prior to such maturity dates. If the
properties cannot be refinanced or sold for a sufficient amount, the Partnership
will risk losing such properties through foreclosure.
During the nine months ended September 30, 1999, a distribution of approximately
$3,165,000 was paid to partners, of which approximately $495,000 was paid from
operations, ($484,000 paid to limited partners or $10.82 per limited partnership
unit) and $2,670,000 was paid from surplus funds ($2,458,000 paid to limited
partners or $54.97 per limited partnership unit). Also, in January 1999, the
Partnership paid a distribution of approximately $650,000 to limited partners
($14.54 per limited partnership unit) relating to a distribution payable from
surplus funds as of December 31, 1998. There were no distributions during the
nine months ended September 30, 1998. Future cash distributions will depend on
the levels of net cash generated from operations, the availability of cash
reserves and the timing of the debt maturities, refinancings and/or property
sales. The Partnership's distribution policy is reviewed on a semi-annual
basis. There can be no assurance, however, that the Partnership will generate
sufficient funds from operations, after required capital improvement
expenditures, to permit further distributions to its partners during the
remainder of 1999 or subsequent periods.
Tender Offer
On May 13, 1999 and on August 19, 1999, AIMCO Properties, L.P., an affiliate of
the Managing General Partner commenced tender offers to purchase limited
partnership interest in the Partnership for a purchase price of $534 and $832
per unit, respectively. The June offer expired on July 30, 1999 and the August
offer expired on October 15, 1999. Pursuant to the offers, AIMCO Properties,
L.P. acquired a total of 4,625 units. As a result, AIMCO and its affiliates
currently own 21,297 units of limited partnership interest in the Partnership
representing approximately 47.63% of the total outstanding units. It is
possible that AIMCO or its affiliate will make one or more additional offers to
acquire additional limited partnership interests in the Partnership for cash or
in exchange for units in the operating partnership of AIMCO (See "Item 1.
Financial Statements, Note H - Legal Proceedings").
Year 2000 Compliance
General Description of the Year 2000 Issue and the Nature and Effects of the
Year 2000 on Information Technology (IT) and Non-IT Systems
The Year 2000 issue is the result of computer programs being written using two
digits rather than four digits to define the applicable year. The Partnership
is dependent upon the Managing General Partner and its affiliates for management
and administrative services ("Managing Agent"). Any of the computer programs or
hardware that have date-sensitive software or embedded chips may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result
in a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
send invoices, or engage in similar normal business activities.
Over the past two years, the Managing Agent has determined that it will be
required to modify or replace significant portions of its software and certain
hardware so that those systems will properly utilize dates beyond December 31,
1999. The Managing Agent presently believes that with modifications or
replacements of existing software and certain hardware, the Year 2000 issue can
be mitigated. However, if such modifications and replacements are not made, or
not completed in time, the Year 2000 issue could have a material impact on the
operations of the Partnership.
The Managing Agent's plan to resolve Year 2000 issues involves four phases:
assessment, remediation, testing, and implementation. To date, the Managing
Agent has fully completed its assessment of all the information systems that
could be significantly affected by the Year 2000, and has begun the remediation,
testing and implementation phases on both hardware and software systems.
Assessments are continuing in regards to embedded systems. The status of each
is detailed below.
Status of Progress in Becoming Year 2000 Compliant, Including Timetable for
Completion of Each Remaining Phase
Computer Hardware:
During 1997 and 1998, the Managing Agent identified all of the computer systems
at risk and formulated a plan to repair or replace each of the affected systems.
In August 1998, the main computer system used by the Managing Agent became fully
functional. In addition to the main computer system, PC-based network servers,
routers and desktop PCs were analyzed for compliance. The Managing Agent has
begun to replace each of the non-compliant network connections and desktop PCs
and, as of September 30, 1999, had virtually completed this effort.
The total cost to the Managing Agent to replace the PC-based network servers,
routers and desktop PCs is expected to be approximately $1.5 million of which
$1.3 million has been incurred to date.
Computer Software:
The Managing Agent utilizes a combination of off-the-shelf, commercially
available software programs as well as custom-written programs that are designed
to fit specific needs. Both of these types of programs were studied, and
implementation plans written and executed with the intent of repairing or
replacing any non-compliant software programs.
In April 1999 the Managing Agent embarked on a data center consolidation project
that unifies its core financial systems under its Year 2000 compliant system.
The estimated completion date for this project is October 1999.
During 1998, the Managing agent began converting the existing property
management and rent collection systems to its management properties Year 2000
compliant systems. The estimated additional costs to convert such systems at
all properties, is $200,000, and the implementation and testing process was
completed in June 1999.
The final software area is the office software and server operating systems.
The Managing Agent has upgraded all non-compliant office software systems on
each PC and has upgraded virtually all of the server operating systems.
Operating Equipment:
The Managing Agent has operating equipment, primarily at the property sites,
which needed to be evaluated for Year 2000 compliance. In September 1997, the
Managing Agent began taking a census and inventory of embedded systems
(including those devices that use time to control systems and machines at
specific properties, for example elevators, heating, ventilating, and air
conditioning systems, security and alarm systems, etc.).
The Managing Agent has chosen to focus its attention mainly upon security
systems, elevators, heating, ventilating and air conditioning systems, telephone
systems and switches, and sprinkler systems. While this area is the most
difficult to fully research adequately, management has not yet found any major
non-compliance issues that put the Managing Agent at risk financially or
operationally.
A pre-assessment of the properties by the Managing Agent has indicated virtually
no Year 2000 issues. A complete, formal assessment of all the properties by the
Managing Agent was virtually completed by September 30, 1999. Any operating
equipment that is found non-compliant will be repaired or replaced.
The total cost incurred for all properties managed by the Managing Agent as of
September 30, 1999 to replace or repair the operating equipment was
approximately $75,000. The Managing Agent estimates the cost to replace or
repair any remaining operating equipment is approximately $125,000.
The Managing Agent continues to have "awareness campaigns" throughout the
organization designed to raise awareness and report any possible compliance
issues regarding operating equipment within its enterprise.
Nature and Level of Importance of Third Parties and Their Exposure to the Year
2000
The Managing Agent has banking relationships with three major financial
institutions, all of which have designated their compliance. The Managing Agent
has updated data transmission standards with all of the financial institutions.
All financial institutions have communicated that they are Year 2000 compliant
and accordingly no accounts were required to be moved from the existing
financial institutions.
The Partnership does not rely heavily on any single vendor for goods and
services, and does not have significant suppliers and subcontractors who share
information systems (external agent). To date, the Partnership is not aware of
any external agent with a Year 2000 compliance issue that would materially
impact the Partnership's results of operations, liquidity, or capital resources.
However, the Partnership has no means of ensuring that external agents will be
Year 2000 compliant.
The Managing Agent does not believe that the inability of external agents to
complete their Year 2000 remediation process in a timely manner will have a
material impact on the financial position or results of operations of the
Partnership. However, the effect of non-compliance by external agents is not
readily determinable.
Costs to Address Year 2000
The total cost of the Year 2000 project to the Managing Agent is estimated at
$3.5 million and is being funded from operating cash flows. To date, the
Managing Agent has incurred approximately $2.9 million ($0.7 million expenses
and $2.2 million capitalized for new systems and equipment) related to all
phases of the Year 2000 project. Of the total remaining project costs,
approximately $0.5 million is attributable to the purchase of new software and
operating equipment, which will be capitalized. The remaining $0.2 million
relates to repair of hardware and software and will be expensed as incurred.
The Partnership's portion of these costs are not material.
Risks Associated with the Year 2000
The Managing Agent believes it has an effective program in place to resolve the
Year 2000 issue in a timely manner. As noted above, the Managing Agent has not
yet completed all necessary phases of the Year 2000 program. In the event that
the Managing Agent does not complete any additional phases, certain worst case
scenarios could occur. The worst case scenarios could include elevators,
security and heating, ventilating and air conditioning systems that read
incorrect dates and operate with incorrect schedules (e.g., elevators will
operate on Monday as if it were Sunday). Although such a change would be
annoying to residents, it is not business critical.
In addition, disruptions in the economy generally resulting from Year 2000
issues could also adversely affect the Partnership. The Partnership could be
subject to litigation for, among other things, computer system failures,
equipment shutdowns or failure to properly date business records. The amount of
potential liability and lost revenue cannot be reasonably estimated at this
time.
Contingency Plans Associated with the Year 2000
The Managing Agent has contingency plans for certain critical applications and
is working on such plans for others. These contingency plans involve, among
other actions, manual workarounds and selecting new relationships for such
activities as banking relationships and elevator operating systems.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEDINGS
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, the Managing General Partner and several of their affiliated
partnerships and corporate entities. The complaint purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition by Insignia Financial Group, Inc.
("Insignia") and entities which were, at one time, affiliates of Insignia
("Insignia Affiliates") of interests in certain general partner entities, past
tender offers by Insignia Affiliates to acquire limited partnership units, the
management of partnerships by Insignia Affiliates and the Insignia Merger (see
"Part I _ Financial Information, Item 1. Financial Statements, Note B _ Transfer
of Control"). The complaint seeks monetary damages and equitable relief,
including judicial dissolution of the Partnership. On June 25, 1998, the
Managing General Partner filed a motion seeking dismissal of the action. In
lieu of responding to the motion, the plaintiffs have filed an amended
complaint. The Managing General Partner filed demurrers to the amended complaint
which were heard February 1999. Pending the ruling on such demurrers,
settlement negotiations commenced. On November 2, 1999, the parties executed
and filed a Stipulation of Settlement ("Stipulation"), settling claims, subject
to final court approval, on behalf of the Partnership and all limited partners
who own units as of November 3, 1999. The Court has preliminarily approved the
Settlement and scheduled a final approval hearing for December 10, 1999. In
exchange for a release of all claims, the Stipulation provides that, among other
things, an affiliate of the Managing General Partner will make tender offers for
all outstanding limited partnership interests in 49 partnerships, including the
Registrant, subject to the terms and conditions set forth in the Stipulation,
and has agreed to establish a reserve to pay an additional amount in settlement
to qualifying class members (the "Settlement Fund"). At the final approval
hearing, Plaintiffs' counsel will make an application for attorneys' fees and
reimbursement of expenses, to be paid in part by the partnerships and in part
from the Settlement Fund. The Managing General Partner does not anticipate that
costs associated with this case will be material to the Partnership's overall
operations.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
Exhibit 27 is filed as an exhibit to this report.
b) Reports on Form 8-K filed during the quarter ended September 30,
1999:
Current report on Form 8-K filed on August 20, 1999 disclosing
the sale of Southpointe Apartments.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ANGELES PARTNERS XII
By: Angeles Realty Corporation II
Managing General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/Martha L. Long
Martha L. Long
Senior Vice President and
Controller
Date:
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Angeles
Partners XII 1999 Third Quarter 10-QSB and is qualified in its entirety by
reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000720392
<NAME> ANGELES PARTNERS XII
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 9,303
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 85,906
<DEPRECIATION> 56,125
<TOTAL-ASSETS> 42,848
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 56,356
0
0
<COMMON> 0
<OTHER-SE> (16,940)
<TOTAL-LIABILITY-AND-EQUITY> 42,848
<SALES> 0
<TOTAL-REVENUES> 27,035
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 15,616
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,287
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 12,733
<DISCONTINUED> 0
<EXTRAORDINARY> (559)
<CHANGES> 0
<NET-INCOME> 12,174
<EPS-BASIC> 250.57<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
