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 June 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 (IRS Employer
incorporation or organization) Identification No.)
55 Beattie Place, PO 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)
June 30, 1999
Assets
Cash and cash equivalents $ 8,792
Receivables and deposits, net of allowance for
doubtful accounts of $63 1,761
Restricted escrows 1,452
Other assets 1,176
Investment in joint venture 178
Investment properties:
Land $ 8,652
Buildings and related personal property 85,919
94,571
Less accumulated depreciation (62,193) 32,378
$ 45,737
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 361
Tenant security deposit liabilities 942
Accrued property taxes 1,130
Other liabilities 1,112
Mortgage notes payable ($11,000 in default) 67,560
Partners' Deficit
General partners $ (639)
Limited partners (44,718 units issued and
outstanding) (24,729) (25,368)
$ 45,737
See Accompanying Notes to Consolidated Financial Statements
b)
ANGELES PARTNERS XII
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
Revenues:
Rental income $ 5,061 $ 5,119 $ 10,150 $ 10,195
Other income 348 345 702 675
Casualty gain 101 -- 101 --
Loss (gain) on sale of investment
property (184) -- 2,178 --
Total revenues 5,326 5,464 13,131 10,870
Expenses:
Operating 1,997 2,190 3,975 4,277
General and administrative 124 155 288 310
Depreciation 1,142 1,241 2,324 2,470
Interest 1,528 1,605 3,044 3,219
Property taxes 563 565 1,154 1,138
Total expenses 5,354 5,756 10,785 11,414
(Loss) income before equity in income of
joint venture and extraordinary items (28) (292) 2,346 (544)
Equity in income of joint venture 82 79 1,321 28
Income (loss) before extraordinary items 54 (213) 3,667 (516)
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) $ 54 $ (213) $ 3,108 $ (516)
Net income (loss) allocated to
general partners (1%) $ -- $ (2) $ 31 $ (5)
Net income (loss) allocated to
limited partners (99%) 54 (211) 3,077 (511)
$ 54 $ (213) $ 3,108 $ (516)
Net income (loss) per limited
partnership unit:
Income (loss) before extraordinary
items $ 1.20 $ 4.72 $ 81.18 $ (11.43)
Extraordinary items -- -- (12.37) --
$ 1.20 $ (4.72) $ 68.81 $ (11.43)
Distributions per limited partnership
Unit $ -- $ -- $ 55.79 $ --
See Accompanying Notes to Consolidated Financial Statements
c)
ANGELES PARTNERS XII
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' 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 six months
ended June 30, 1999 -- 31 3,077 3,108
Distributions to partners -- (32) (2,495) (2,527)
Partners' deficit at
June 30, 1999 44,718 $ (639) $(24,729) $(25,368)
See Accompanying Notes to Consolidated Financial Statements
ANGELES PARTNERS XII
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Six Months Ended
June 30,
1999 1998
Cash flows from operating activities:
Net income (loss) $ 3,108 $ (516)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation 2,324 2,470
Amortization of discounts, loan costs, and
leasing commissions 174 213
Equity in extraordinary loss on extinguishment
of debt of joint venture 3 --
Extraordinary loss on extinguishment of debt 556 --
Gain on disposal of investment property (2,178) --
Equity in income of joint venture (1,321) (28)
Casualty (gain) loss (101) 12
Change in accounts:
Receivables and deposits 224 (154)
Other assets (137) 85
Accounts payable (194) (30)
Tenant security deposit liabilities (17) 35
Accrued property taxes 45 33
Other liabilities 220 (593)
Net cash provided by operating activities 2,706 1,527
Cash flows from investing activities:
Property improvements and replacements (1,023) (755)
Net (deposits to) receipts from restricted escrows (183) 100
Repayment of advances to joint venture 149 --
Net proceeds from (payments for) casualty gain
(loss) 101 (14)
Proceeds from sale of investment properties 5,811
Distributions from joint venture 1,175 --
Net cash provided by (used in) investing
activities 6,030 (669)
Cash flows used in financing activities:
Payments on mortgage notes payable (395) (426)
Repayment of loans (3,905) --
Distributions to partners (3,177) --
Debt extinguishment costs (78) --
Net cash used in financing activities (7,555) (426)
Net increase in cash and cash equivalents 1,181 432
Cash and cash equivalents at beginning of period 7,611 6,459
Cash and cash equivalents at end of period $ 8,792 $ 6,891
Supplemental disclosure of cash flow information:
Cash paid for interest $ 2,515 $ 3,650
See Accompanying Notes to Consolidated Financial Statements
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 six month periods ended June 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. The Partnership may remove the
General Partner of Pickwick Place AP XII LP; therefore, this partnership is
controlled and consolidated by the Partnership. The consolidated financial
statements also include the Partnership's interests in AP XII Associates GP,
LLC, Hunters Glen Phase I GP, LLC, 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 JV ("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 $3,108,000. In
connection with the sale, a commission of approximately $153,000 was paid to the
Managing General Partner in accordance with the Joint Venture Agreement. The
Partnership's 1999 pro-rata share of this gain is approximately $1,383,000. 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 is summarized as
follows:
June 30, 1999
(in thousands)
Assets
Cash $ 355
Other assets 51
Total $ 406
Liabilities and Partners' Capital
Other liabilities 15
Partners' capital 391
Total $ 406
The condensed statements of operations of the Joint Venture for the three and
six months ended June 30, 1999 and 1998 are summarized as follows:
Three Months Ended Six Months Ended
June 30, June 30,
(in thousands)
1999 1998 1999 1998
Revenues $ 61 $ 541 $ 91 $ 744
Costs and expenses (100) (364) (231) (681)
(Loss) income before gain on sale of
investment property and extraordinary
loss on extinguishment of debt (39) 177 (140) 63
Gain on sale of investment property 223 -- 3,108 --
Extraordinary loss on extinguishment
of debt -- -- (7) --
Net income $ 184 $ 177 $ 2,961 $ 63
The Partnership realized equity income of approximately $1,321,000 and $28,000
in the Joint Venture for the six months ended June 30, 1999, and 1998,
respectively. The Partnership also realized equity in the extraordinary loss on
extinguishment of debt of approximately $3,000 for the six months ended June 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 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 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. The Joint Venture
originally recorded a liability of $199,000 for the costs of the clean-up. At
February 26, 1999, the balance in the liability for clean-up costs was
approximately $53,000. Upon the sale of the Golf Course, as noted above, the
Joint Venture received documents from the Purchaser releasing the Joint Venture
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 for certain expenses incurred by
affiliates on behalf of the Partnership. The following amounts owed to the
Managing General Partner and affiliates for the six months ended June 30, 1999
and 1998, were paid or accrued:
1999 1998
(in thousands)
Property management fees (included in $519 $515
operating expenses)
Reimbursement for services of affiliates
(included in operating and general and
administrative expenses) 191 247
During the six months ended June 30, 1999 and 1998, affiliates of the Managing
General Partner were entitled to receive 5% of the gross receipts from all of
the Registrant's residential properties (except Southpointe which is 3%) as
compensation for providing property management services. The Registrant paid to
such affiliates $519,000 and $504,000 for the six month periods ended June 30,
1999 and 1998, respectively. Also, during the six months ended June 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 $11,000 for the six months ended June 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 $191,000 and $247,000 for the
six months ended June 30, 1999 and 1998, respectively. Included in these amounts
is approximately $19,000 and $28,000 of construction oversight reimbursements
for the six months ended June 30, 1999 and 1998, respectively.
In conjunction with the sale of Cooper Point Plaza in January 1999, the Managing
General Partner was paid a commission of approximately $186,000 in accordance
with the Partnership Agreement.
Angeles Mortgage Investment Trust ("AMIT"), a real estate investment trust,
provided financing (the "AMIT Loans") 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 is 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, AIMCO Properties, L.P., an affiliate of the Managing General
Partner commenced a tender offer to purchase up to 12,693.65 (28.39% of the
total outstanding units) units of limited partnership interest in the
Partnership for a purchase price of $534 per unit. The offer expired on July
30, 1999. Pursuant to the offer, AIMCO Properties, L.P. acquired 1,224 units.
As a result, AIMCO and its affiliates currently own 17,899 units of limited
partnership interest in the Partnership representing 40.03% 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.
NOTE E - SALE OF INVESTMENT PROPERTY
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 $1,827,000 after payment of closing costs and repayment of the
mortgage encumbering the property. The Registrant realized a gain of
approximately $2,178,000 on the sale and a related $556,000 extraordinary loss
on early extinguishment of debt. In conjunction with the sale, a commission 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.
NOTE F - CASUALTY GAIN
During the six months ended June 30, 1999, a net casualty gain of approximately
$101,000 at Pickwick Place was recorded relating to storm damage in January 1999
and a small fire in February 1999.
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
nine apartment complexes located in six states - Iowa, Pennsylvania, New Jersey,
Ohio, Illinois, and Washington. 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 six month periods ended June 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 $10,139 $ 11 $10,150
Other income 590 112 702
Casualty gain 101 -- 101
Gain on sale of property -- 2,178 2,178
Interest expense 3,038 6 3,044
Depreciation 2,324 -- 2,324
General and administrative expense -- 288 288
Equity in income of joint venture -- 1,321 1,321
Extraordinary loss on the
extinguishment of debt -- (556) (556)
Equity in extraordinary loss on
extinguishment of debt of
joint venture -- (3) (3)
Segment profit 346 2,762 3,108
Total assets 38,928 6,809 45,737
Capital expenditures for
investment properties 1,023 -- 1,023
1998 Residential Other Totals
Rental income $ 9,831 $ 364 $10,195
Other income 544 131 675
Interest expense 2,992 227 3,219
Depreciation 2,293 177 2,470
General and administrative expense -- 310 310
Equity in income of joint venture -- 28 28
Segment loss (123) (393) (516)
Total assets 39,625 10,298 49,923
Capital expenditures
for investment properties 755 -- 755
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 as well as a recently
announced agreement between Insignia and Apartment Investment and Management
Company. 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 filed an amended complaint. The Managing General
Partner has filed demurrers to the amended complaint which were heard during
February 1999. No ruling on such demurrers has been received. The Managing
General Partner does not anticipate that costs associated with this case, if
any, will be material to the Partnership's overall operations.
In July 1998, a limited partner of the Partnership commenced an action in the
Circuit Court for Jackson County, Missouri entitled Bond Purchase LLC v. Angeles
Partners XII, et al. The complaint claims that the Partnership and an affiliate
of the Managing General Partner breached certain contractual and fiduciary
duties allegedly owed to the claimant and seeks damages and injunctive relief.
This case was settled on April 9, 1999. The Partnership is responsible for a
portion of the settlement costs. The costs associated with the settlement are
included in total expenses for the six months ended June 30, 1999, and did not
have a material effect on 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
six months ended June 30, 1999 and 1998:
Average Occupancy
Property 1999 1998
Hunters Glen - IV Apartments 97% 97%
Plainsboro, New Jersey
Hunters Glen - V Apartments 97% 98%
Plainsboro, New Jersey
Hunters Glen - VI Apartments 96% 97%
Plainsboro, New Jersey
Gateway Gardens Apartments 97% 97%
Cedar Rapids, Iowa
Chambers Ridge Apartments (3) 96% 93%
Harrisburg, Pennsylvania
Briarwood Apartments 98% 97%
Cedar Rapids, Iowa
Twin Lake Towers Apartments 98% 98%
Westmont, Illinois
Southpointe Apartments (2) 70% 65%
Bedford Heights, Ohio
Pickwick Place Apartments (1) 87% 94%
Indianapolis, Indiana
(1) The occupancy at Pickwick Place Apartments has decreased due to increased
competition in the local market. Also, due to lower interest rates more
people have been purchasing homes.
(2) The mortgage indebtedness encumbering this property was modified in
December 1997. As part of the agreement, the Partnership was required to
advance funds of $150,000 to Southpointe Apartments for capital improvement
projects. As of June 30, 1999, all of the improvements to be covered by
this advance have been completed. Southpointe Apartments' low occupancy is
due to delays in renovations and the past poor condition of the property.
Extensive renovations are still required at the property, however, there is
not sufficient cash flow to complete these renovations. During March 1999,
the property notified the mortgage lender that it would not be making the
required monthly interest payments due to cash flow problems, thus putting
the debt in default. The Managing General Partner is currently marketing
this property for sale and has notified the mortgage lender of its plan of
action. The mortgage lender has agreed not to proceed with foreclosure
proceedings at this time. There can be no assurance, however, that a
suitable buyer will be found or that a sale will be consummated within the
near future. The Managing General Partner does not plan to commit
additional funds from the Partnership to the property at this time.
(3) The occupancy at Chambers Ridge has increased due to improved market
conditions.
Results of Operations
The Partnership's net income for the six months ended June 30, 1999 was
approximately $3,108,000 compared to a net loss of approximately $516,000 for
the corresponding period in 1998. The Partnership recorded net income of
approximately $54,000 for the three months ended June 30, 1999 compared to a net
loss of $213,000 for the corresponding period in 1998. The increase in net
income for the six months ended June 30, 1999 compared with the six months ended
June 30, 1998 was primarily due to the gain on disposal of Cooper Point Plaza,
the equity in income from the sale of the Princeton Meadows Golf Course Joint
Venture and, to a lesser extent, the recording of a casualty gain at Pickwick
Place during the six months ended June 30, 1999.
On January 4, 1999 the Partnership sold its only commercial property, Cooper
Point Plaza, to an unaffiliated third party for net sales proceeds of $1,827,000
after payment of closing costs and repayment of the mortgage encumbering the
property. The Registrant realized a gain of approximately $2,178,000 on the sale
and a related $556,000 extraordinary loss on early extinguishment of debt. In
conjunction with the sale, a commission of approximately $186,000 was paid to
the Managing General Partner in accordance with the Partnership Agreement.
The Partnership had a 44.5% investment in Princeton Meadows Golf Course Joint
Venture. For the six months ended June 30, 1999 the Partnership realized equity
in income of the Joint Venture of approximately $1,321,000, which included the
gain on disposal of Princeton Meadows Golf Course of approximately $1,383,000
and a loss on operations of approximately $62,000, as compared to equity in
income of the Joint Venture of approximately $28,000 for the six months ended
June 30, 1998. The Partnership also realized equity in the extraordinary loss
on extinguishment of debt of the Joint Venture of $3,000 for the six months
ended June 30, 1999.
During the six months ended June 30, 1999, a net casualty gain of approximately
$101,000 at Pickwick Place was recorded relating to storm damage in January 1999
and a small fire in February 1999.
Excluding the impact of the sale of Cooper Point Plaza and the Princeton Meadows
Golf Course, net income increased approximately $328,000 and $469,000 for the
three and six month periods ended June 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 the Partnership's properties as well as
increases in occupancy at Briarwood, Chambers Ridge and Southpointe, which is
offset by decreases in occupancy at Pickwick Place, Hunters Glen V and Hunters
Glen VI. The decrease in total expenses is primarily attributable to a decrease
in operating expense which is partially offset by increases in depreciation,
property taxes, and interest expense. Operating expense decreased primarily due
to decreases in insurance and maintenance expense which is partially offset by
an increase in property expense. The decrease in insurance expense is due to
lower premiums as a result of a change in insurance carriers. The decrease in
maintenance is primarily due to the completion of the following major
improvement projects during the six months ended June 30, 1998: extensive
exterior building renovations at Southpointe; a parking lot project and interior
and exterior building improvements at Chambers Ridge; swimming pool repairs and
interior building renovations at Hunters Glen IV, V, and VI. Property expense
increased primarily due to increased utility costs at Southpointe and Chambers
Ridge and salaries and related expenses at Southpointe.
Depreciation expense increased primarily due to increased property improvements
and replacements at Gateway Gardens. Property tax expense increased mainly due
to an increase in the assessment value of Gateway Gardens. The increase in
interest expense is primarily due to interest accruing on the mortgage at
Southpoint at the default rate of 10.59%.
Included in general and administrative expenses at both June 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.
As part of the ongoing business plan of the Partnership, the Managing General
Partner monitors the rental market environment of its investment properties to
assess the feasibility of increasing rents, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expense. 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 June 30, 1999, the Partnership had cash and cash equivalents of approximately
$8,792,000 as compared to approximately $6,891,000 at June 30, 1998. Cash and
cash equivalents increased approximately $1,181,000 for the six months ended
June 30, 1999 from the Registrant's fiscal year end. This increase was
primarily due to approximately $1,692,000 of net cash provided by operating
activities and approximately $7,044,000 of net cash provided by investing
activities, which was partially offset by approximately $7,555,000 of net cash
used in financing activities. Cash provided by investing activities consisted
of net receipts from restricted escrows, repayment of an advance to the Joint
Venture, net proceeds from a casualty gain, proceeds from the sale of Cooper
Point Plaza and distributions received from the Joint Venture, partially offset
by property improvements and replacements. Cash used in financing activities
consisted of distributions to partners, debt extinguishment costs, payments of
principal made on the mortgages encumbering the Registrant's properties and the
repayment of mortgage principal upon the sale of Cooper Point Plaza. The
Registrant invests its working capital reserves in a money market account.
The mortgage encumbering Southpointe Apartments was in default from April 1997
until December 31, 1997, due to non-payment of the monthly debt-service
requirements. This property has increasing maintenance needs, some of which have
been completed as of June 30, 1999. Historically, monthly payments of debt
service have been late, as the property rents for the current month are used to
pay the prior month's debt service. The Managing General Partner had been
unsuccessful in attempts to refinance the $11,000,000 mortgage indebtedness
secured by Southpointe Apartments, which carried a maturity date of July 1999
and a stated interest rate of 8.59%. However, a modification was agreed upon at
December 31, 1997, which extends the maturity date of the loan until January
2002. The modification was contingent upon the payment of all delinquent
accrued interest, the installation of new boilers at the property with a cost of
approximately $70,000, approximately $80,000 in capital improvements to be made
over the next two years and a reduction in the management fee taken by the
management company from 5% of gross revenues to 3% of gross revenues. In
addition, in accordance with the mortgage agreement, the lender advanced the
Partnership an additional $23,000 to be used to pay real estate taxes. This
advance is secured by the mortgage agreement and accrues interest at 9%. The
advance matures January 2002. In January 1998, a payment was made to the lender
to satisfy all the accrued interest and secure the modification. All other
terms of the debt remain the same. In March 1999, the Partnership notified the
lender that it would not be making the required monthly interest payments on
this mortgage due to cash flow problems, thus putting the debt in default. The
Managing General Partner is currently marketing this property for sale and has
notified the mortgage lender of its plan of action. The mortgage lender has
agreed not to proceed with foreclosure proceedings at this time. There can be
no assurance, however, that a suitable buyer will be found or that a sale will
be consummated within the near future. The Managing General Partner does not
plan to commit additional funds from the Partnership to the property at this
time.
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, 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 $29,000 in
capital expenditures at Hunters Glen Apartments IV as of June 30, 1999
consisting primarily of carpet and vinyl replacements, cabinet replacements and
other interior decorating. 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 repairs.
Hunters Glen Apartments V: The Partnership completed approximately $24,000 in
capital expenditures at Hunters Glen Apartments V as of June 30, 1999,
consisting primarily of carpet replacements, new appliances and other interior
decorating. 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 repairs, landscaping and
parking lot repairs.
Hunters Glen Apartments VI: The Partnership completed approximately $119,000 in
capital expenditures at Hunters Glen Apartments VI as of June 30, 1999,
consisting primarily of flooring replacements, air conditioning upgrades, and
sewer replacement. 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 painting, landscaping and
irrigation improvements and parking lot repairs.
Gateway Gardens Apartments: The Partnership completed approximately $114,000 in
capital expenditures at Gateway Gardens Apartments as of June 30, 1999,
consisting primarily of landscaping, interior decorating, electrical and heating
improvements, flooring replacements and new appliances. 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 $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 repairs.
Chambers Ridge Apartments: The Partnership completed approximately $131,000 in
capital expenditures at Chambers Ridge Apartments as of June 30, 1999,
consisting primarily of a roof replacement project, water heater replacement,
flooring and appliance replacements, painting 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, approximately $1,544,000 for 1999 at this
property which include certain of the required improvements and consist of
landscaping, parking lot and pool repairs and HVAC condensing unit replacements.
Briarwood Apartments: The Partnership completed approximately $13,000 in capital
expenditures at Briarwood Apartments as of June 30, 1999, consisting primarily
of carpet and vinyl replacement, electrical work and roof repairs. 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 repairs and other small projects.
Twin Lake Towers Apartments: The Partnership completed approximately $144,000 in
capital expenditures at Twin Lake Towers Apartments as of June 30, 1999,
consisting primarily of HVAC condensing unit replacement, carpet replacement and
other building 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 $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, in 1999 at this property which include
certain of the required improvements and consist of HVAC condensing unit
replacement, parking lot repairs and landscaping.
Southpointe Apartments: The Partnership completed approximately $21,000 in
capital expenditures at Southpointe Apartments as of June 30, 1999, consisting
primarily of carpet replacement and new appliances. 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 $614,000 of capital improvements over
the next few years. The Partnership has budgeted, but is not limited to, capital
improvements of approximately $239,000 in 1999 at this property which include
certain of the required improvements and consist of roof repairs, HVAC
condensing unit replacement and parking lot repairs.
Pickwick Place Apartments: The Partnership completed approximately $428,000 in
capital expenditures at Pickwick Place Apartments as of June 30, 1999,
consisting primarily of flooring and drapery replacements, renovations to its
recreational facilities, fencing repairs, new appliances and replacement of
property due to a fire in June 1998. 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 $319,000 of capital improvements over the next
few years. The Partnership has budgeted, but not limited to, capital
improvements of approximately $524,000 in 1999 at this property which include
certain of the required improvements and consist of roof, plumbing, electrical
and balcony repairs.
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 (except in the case of Southpointe) 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 $67,560,000, net of unamortized discounts,
with maturity dates ranging from January 2002 to September 2012, during which
time balloon payments totaling $63,822,000 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 six months ended June 30, 1999, a distribution of approximately
$2,527,000 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 $2,032,000 was paid from surplus funds ($2,011,000 paid to limited
partners or $44.97 per limited partnership unit). Also, in January 1999, the
Partnership paid a distribution of approximately $650,000 ($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 six months ended
June 30, 1998. Subsequent to the quarter ended June 30, 1999, the Managing
General Partner approved a distribution of approximately $450,000 from surplus
funds, of which $446,000 was paid to limited partners ($9.97 per limited
partnership unit). Future cash distributions will depend on the levels of net
cash generated from operations, the availability of cash reserves and the timing
of debt maturities, refinancings, and/or property sales. The Partnership's
distribution policy will be reviewed on a quarterly basis. There can be no
assurance, however, that the Partnership will generate sufficient funds from
operations, after required capital expenditures, to permit any additional
distributions to its partners in 1999 or subsequent periods.
Tender Offer
On May 13, 1999, AIMCO Properties, L.P., an affiliate of the Managing General
Partner commenced a tender offer to purchase up to 12,693.65 (28.39% of the
total outstanding units) units of limited partnership interest in the
Partnership for a purchase price of $534 per unit. The offer expired on July
30, 1999. Pursuant to the offer, AIMCO Properties, L.P. acquired 1,224 units.
As a result, AIMCO and its affiliates currently own 17,899 units of limited
partnership interest in the Partnership representing 40.03% 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.
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 June 30, 1999, had completed approximately 90% of 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. The remaining network connections and
desktop PCs are expected to be upgraded to Year 2000 compliant systems by
September 30, 1999. The completion of this process is scheduled to coincide
with the release of a compliant version of the Managing Agent's operating
system.
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 90% of the server operating systems. The remaining
server operating systems are planned to be upgraded to be Year 2000 compliant by
September, 1999. The completion of this process is scheduled to coincide with
the release of a compliant version of the Managing Agent's operating system.
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 no Year
2000 issues. A complete, formal assessment of all the properties by the
Managing Agent is in process and will be completed in September, 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
June 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 continues to conduct surveys of its banking and other vendor
relationships to assess risks regarding their Year 2000 readiness. The Managing
Agent has banking relationships with three major financial institutions, all of
which have indicated their compliance efforts will be complete before July,
1999. The Managing Agent has updated data transmission standards with all of the
financial institutions. The Managing Agent's contingency plan in this regard is
to move accounts from any institution that cannot be certified Year 2000
compliant by September 1, 1999.
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 expensed
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 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 as well as a recently
announced agreement between Insignia and Apartment Investment and Management
Company. 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 filed an amended complaint. The Managing General
Partner has filed demurrers to the amended complaint which were heard during
February 1999. No ruling on such demurrers has been received. The Managing
General Partner does not anticipate that costs associated with this case, if
any, will be material to the Partnership's overall operations.
In July 1998, a limited partner of the Partnership commenced an action in the
Circuit Court for Jackson County, Missouri entitled Bond Purchase LLC v. Angeles
Partners XII, et al. The complaint claims that the Partnership and an affiliate
of the Managing General Partner breached certain contractual and fiduciary
duties allegedly owed to the claimant and seeks damages and injunctive relief.
This case was settled on April 9, 1999. The Partnership is responsible for a
portion of the settlement costs. The costs associated with the settlement are
included in total expenses for the six months ended June 30, 1999, and did not
have a material effect on 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:
None filed during the quarter ended June 30, 1999.
SIGNATURES
In accordance with the requirements 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/ Carla R. Stoner
Carla R. Stoner
Senior Vice President Finance and
Administration
Date: August 4, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Angeles
Partners XII 1999 Second Quarter 10-QSB and is qualified in its entirety by
reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000720392
<NAME> ANGELES PARTNERS XIV
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 8,792
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 94,571
<DEPRECIATION> 62,193
<TOTAL-ASSETS> 45,737
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 67,560
0
0
<COMMON> 0
<OTHER-SE> (25,368)
<TOTAL-LIABILITY-AND-EQUITY> 45,737
<SALES> 0
<TOTAL-REVENUES> 13,131
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 10,785
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,044
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> (556)
<CHANGES> 0
<NET-INCOME> 3,108
<EPS-BASIC> 55.79<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
