<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1997 Commission File Number 0-13493
TWELVE AMH ASSOCIATES LIMITED PARTNERSHIP
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(Exact name of small business issuer as specified in its charter)
Massachusetts 04-2833662
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One International Place, Boston, MA 02110
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 330-8600
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Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
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PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
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<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
Three Months Ended Six Months Ended
For the Three and Six Months Ended June 30, June 30,
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June 30, 1997 and 1996 (Unaudited) (Note 1) 1997 1996 1997 1996
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<S> <C> <C> <C> <C>
REVENUES:
Interest income $ 2,833 $ 835 $ 6,786 $ 858
Expenses:
Interest 2,011,397 1,828,674 3,975,048 3,614,976
Related party interest -- 399 -- 17,588
Amortization 101,157 101,157 202,315 202,315
Related party management fee 75,000 75,000 150,000 150,000
General and administrative 15,124 13,453 24,673 14,011
----------- ----------- ----------- -----------
2,202,678 2,018,683 4,352,036 3,998,890
----------- ----------- ----------- -----------
Loss from Operations (2,199,845) (2,017,848) (4,345,250) (3,998,032)
Equity in Losses from Operating
Partnerships (436,445) (481,641) (2,083,957) (2,179,538)
----------- ----------- ----------- -----------
Net Loss $(2,636,290) $(2,499,489) $(6,429,207) $(6,177,570)
=========== =========== =========== ===========
Net Loss Allocated to General Partners $ (26,363) $ (24,995) $ (64,292) $ (61,776)
=========== =========== =========== ===========
Net Loss Allocated to Limited Partners $(2,609,927) $(2,474,494) $(6,364,915) $(6,115,794)
=========== =========== =========== ===========
Net Loss per Unit of Limited Partnership
Interest $ (4,350) $ (4,124) $ (10,608) $ (10,193)
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these
financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
BALANCE SHEETS
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June 30, 1997 and December 31, 1996 June 30, December 31,
1997 1996
(Unaudited) (Audited)
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<S> <C> <C>
ASSETS
Cash and cash equivalents $ 212,679 $ 1,043,786
Deferred financing fee, net of accumulated
amortization of $42,775 and $41,109 respectively 7,225 8,891
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TOTAL ASSETS $ 219,904 $ 1,052,677
============ ============
LIABILITIES
Purchase Money Note, net of unamortized discount $ 55,201,428 $ 52,002,242
Notes payable 9,873,978 9,873,978
Accrued interest on operating deficit notes 18,448,726 17,672,864
Investments in Operating Partnerships 2,528,226 243,620
Accrued expenses 1,790 15,010
Due to affiliates 2,650,000 3,300,000
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88,704,148 83,107,714
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PARTNERS' CAPITAL (DEFICIT):
Limited partners - Units of Limited
Partnership Interest, $96,250 stated
value per unit; authorized, issued
and outstanding - 600 Units (87,073,121) (80,708,206)
General partners (1,411,123) (1,346,831)
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(88,484,244) (82,055,037)
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TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 219,904 $ 1,052,677
============ ============
</TABLE>
The accompanying notes are an integral part of these
financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CASH FLOWS
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For the Six Months Ended
June 30, 1997 and 1996 (Unaudited) (Note 1) 1997 1996
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<S> <C> <C>
Cash flows from operating activities:
Net loss $(6,429,207) $(6,177,570)
Adjustments to reconcile net loss to net cash used
in operating activities:
Amortization 202,315 202,315
Equity in loss of Operating Partnerships 2,083,957 2,179,538
Changes in assets and liabilities:
Interest added to loan principal on Purchase Money Note 3,199,186 2,839,114
Increase in accrued interest on operating deficit notes 775,862 775,862
Decrease in accrued expenses (13,220) (24,084)
Decrease in due to affiliates (650,000) (1,868,456)
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Net cash used in operating activities (831,107) (2,073,281)
Cash flows from investing activities:
Cash distribution from Operating Partnerships -- 2,165,570
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Net cash provided by investing activities -- 2,165,570
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(Decrease) increase in cash and cash equivalents
during the year (831,107) 92,289
Cash and cash equivalents, beginning of period 1,043,786 40
----------- -----------
Cash and cash equivalents, end of period $ 212,679 $ 92,329
=========== ===========
</TABLE>
The accompanying notes are an integral part of these
financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
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UNITS OF
For the Three Months Ended LIMITED INVESTOR
June 30, 1997 and 1996 PARTNERSHIP LIMITED GENERAL
(Unaudited) INTEREST PARTNER PARTNER TOTAL
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<S> <C> <C> <C> <C>
Balance, December 31, 1996 600 $(80,708,206) $ (1,346,831) $(82,055,037)
Net loss -- (6,364,915) (64,292) (6,429,207)
------------ ------------ ------------ ------------
Balance, June 30, 1997 600 $(87,073,121) $ (1,411,123) $(88,484,244)
============ ============ ============ ============
Balance, December 31, 1995 600 $(67,272,291) $ (1,211,115) $(68,483,406)
Net loss -- (6,115,794) (61,776) (6,177,570)
------------ ------------ ------------ ------------
Balance June 30, 1996 600 $(73,388,085) $ (1,272,891) $(74,660,976)
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these
financial statements.
5
<PAGE>
NOTES TO FINANCIAL STATEMENTS
June 30, 1997
(Unaudited)
1. ACCOUNTING AND FINANCIAL REPORTING POLICIES
The condensed financial statements included herein have been
prepared by the Registrant, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. The
Registrant's accounting and financial reporting policies conform
with generally accepted accounting principles and include
adjustments in interim periods considered necessary for a fair
presentation of the results of operations. Certain information and
footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and
regulations. It is suggested that these condensed financial
statements be read in conjunction with the financial statements and
the notes thereto included in the Registrant's Annual Report on Form
10-KSB for the year ended December 31, 1996.
The accompanying financial statements reflect the Partnership's
results of operations for an interim period and are not necessarily
indicative of the results of operations for the year ending December
31, 1997.
2. TAX LOSS
The Partnership's taxable loss for 1997 is expected to differ from
that for financial reporting purposes primarily due to accounting
differences in the recognition of depreciation and certain
capitalized costs.
3. RELATED PARTY TRANSACTIONS
Expenses for the six months ended June 30, 1997 and 1996 include a
management fee of $150,000 earned by an affiliate of the General
Partner. Aggregate unpaid management fees to the affiliate amounted
to $2,650,000 and $3,150,000 at June 30, 1997 and 1996,
respectively. A payment of $800,000 was made to this affiliate
during the first quarter of 1997.
Certain fees, loans and interest due to affiliates were repaid in
1996 from the $2,165,570 cash distribution from Square 254. These
included $129,166 to First Winthrop Corporation as a repayment of
its non-interest bearing advances to the Partnership for
administrative expenses and $400,000 for outstanding management
fees; and to Two Winthrop Properties Inc., $822,284 of accrued
interest as of December 31, 1995, $17,588 of accrued interest for
the period January 1 - April 8, 1996 and a $667,000 repayment of
principal on its $667,000 note.
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<PAGE>
ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This Item should be read in conjunction with the financial statements and other
items contained elsewhere in the report.
Liquidity and Capital Resources
The Partnership's only assets consist of its 66.67% general partnership
interests in Square 254 Limited Partnership ("Square 254") and National Place
Land Limited Partnership ("National Place"). Square 254 and National Place own
a multiple-use complex located in Washington D.C. known as National Place, and
the underlying land, respectively.
The Partnership's primary source of revenue is distributions from Square 254
and National Place (collectively, the "Operating Partnerships"). The
Partnership requires cash to pay management fees and general and administrative
expenses and may require cash to satisfy its obligations to fund any operating
deficits of the Operating Partnerships.
The Partnership received no cash distributions from the Operating Partnerships
during the six months ended June 30, 1997. During the six months ended June 30,
1996, the Partnership received two distributions in the aggregate of $2,165,570
from Square 254.
The Partnership's liquidity based on cash and cash equivalents declined from
$1,043,786 at December 31, 1996 to $212,679 at June 30, 1997. This decrease was
primarily the result of an $800,000 payment to an affiliate of the General
Partner for accrued management fees.
Square 254 is not expected to make any future distributions until December
1997, or later, depending upon property operating results in 1997. The
Partnership's current reserves are expected to be sufficient to fund
administrative expenses in the foreseeable future. All future distributions to
the Partnership from Square 254 will be applied first to pay administrative
expenses of the Partnership and to repay unpaid asset management fees, which at
June 30, 1997 were $2,650,000.
Based on the Partnership's current and expected cash flow, the Partnership will
not have sufficient funds to satisfy its existing indebtedness at maturity in
August 1999. Accordingly, if the Partnership cannot refinance or modify this
indebtedness on favorable terms, or sell its interest in the Operating
Partnerships for sufficient value, the Partnership will refinance the debt with
the existing lender under the terms of the refinancing agreement dated August
31, 1984 for an additional ten-year term during which term no cash
distributions are expected to be made to investors. As a result, at this time
it appears that investors in the Partnership will not receive a return of a
significant portion of their investment.
7
<PAGE>
Results of Operations
Loss from operations increased from $3,998,032 for the six months ended June
30, 1996 to $4,345,250 for the six months ended June 30, 1997. This increase is
due to increases in Partnership expenses of 8.8%, or $353,146, which was
partially offset, by an increase in revenues of $5,928. The increase in
expenses resulted from an increase of $360,072 in accrued interest expense on
the loans made to the Partnership to acquire its interests in the Operating
Partnerships. All interest on such loans is accrued and will be due and payable
upon the maturities of such loans. These increases were only partially offset
by a decrease in related party interest of $17,588.
Equity in loss from Operating Partnerships for the six months ended June 30,
1997 decreased 4.4% (from $2,179,538 to $2,083,957) when compared to the same
period last year. This decrease was primarily due to an improvement in the
operating results of Square 254, which was partially offset by a decline in the
operating results of National Place. Net operating income generated by the
Hotel portion of the mixed-use complex owned by Square 254 increased for the
six months ended June 30, 1997 compared to the six months ended June 30, 1996,
due primarily to increases in occupancy and room rates. The operating results
for the office towers portion of the complex decreased for the six months ended
June 30, 1997 primarily due to a decrease in retail revenues. Operating results
for National Place decreased for the six months ended June 30, 1997 compared to
the six months ended June 30, 1996 primarily as a result of an increase in
interest expense.
8
<PAGE>
TWELVE AMH ASSOCIATES LIMITED PARTNERSHIP
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
A. EXHIBITS
Exhibit 27 - Financial Data Schedule
B. REPORTS ON FORM 8-K
No Report on Form 8-K was filed during the period.
9
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
TWELVE AMH ASSOCIATES
LIMITED PARTNERSHIP
(Registrant)
By: Two Winthrop Properties, Inc.
Managing General Partner
By: /s/ Michael L. Ashner
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Michael L. Ashner
Chief Executive Officer
By: /s/ Edward V. Williams
-------------------------
Edward V. Williams
Chief Financial officer
DATED: August 11, 1997
10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from unaudited
financial statements for the six month period ending June 30, 1997 and is
qualified in its entirety by reference to such financial statements
</LEGEND>
<CIK> 0000748524
<NAME> TWELVE AMH ASSOCIATES LIMITED PARTNERSHIP
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1
<CASH> 212,679
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 219,904
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> (88,484,244)
<TOTAL-LIABILITY-AND-EQUITY> 219,904
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 352,315
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,975,048
<INCOME-PRETAX> (6,429,207)
<INCOME-TAX> 0
<INCOME-CONTINUING> (6,429,207)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,429,207)
<EPS-PRIMARY> (10,608.19)
<EPS-DILUTED> (10,608.19)
</TABLE>
