UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the period ended June 30, 1995
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OR
[ ] 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 0-14268
MCNEIL REAL ESTATE FUND XXII, L.P.
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(Exact name of registrant as specified in its charter)
California 33-0085680
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
13760 Noel Road, Suite 700, LB70, Dallas, Texas, 75240
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (214) 448-5800
---------------------------
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 and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
<PAGE>
MCNEIL REAL ESTATE FUND XXII, L.P.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
------ --------------------
BALANCE SHEETS
(Unaudited)
<TABLE>
June 30, December 31,
1995 1994
---------- ----------
<S> <C> <C>
ASSETS
------
Real estate investments:
Land..................................................... $ 380,414 $ 380,414
Buildings and improvements............................... 9,674,967 9,579,406
---------- ----------
10,055,381 9,959,820
Less: Accumulated depreciation and amortization......... (4,507,621) (4,327,711)
---------- ----------
5,547,760 5,632,109
Asset held for sale......................................... 4,393,157
Cash and cash equivalents .................................. 484,125 589,211
Cash segregated for security deposits....................... 77,691 87,838
Accounts receivable......................................... 2,080 141,268
Escrow deposits............................................. 227,172 357,858
Prepaid expenses and other assets, net...................... 25,415 112,720
--------- ----------
$6,364,243 $11,314,161
========= ==========
LIABILITIES AND PARTNERS' DEFICIT
---------------------------------
Mortgage notes payable, net................................. $6,048,667 $ 9,534,751
Accrued property taxes ..................................... 107,832 234,143
Accounts payable and accrued expenses....................... 100,007 147,771
Payable to affiliates - General Partner..................... 1,478,457 1,501,947
Advances from affiliates - General Partner.................. - 915,129
Security deposits and deferred rental income................ 78,794 91,066
--------- ----------
7,813,757 12,424,807
--------- ----------
Partners' deficit:
Limited partners - 55,000,000 Units authorized;
33,208,117 and 33,268,117 Units issued and outstanding
at June 30, 1995 and December 31, 1994, respectively
(19,825,588 and 19,875,588 Current Income Units
outstanding at June 30, 1995 and December 31, 1994,
respectively, and 13,382,529 and 13,392,529
Growth/Shelter Units outstanding at June 30, 1995 and
December 31,1994 respectively)......................... (1,198,500) (863,021)
General Partner.......................................... (251,014) (247,625)
---------- ----------
(1,449,514) (1,110,646)
---------- ----------
$ 6,364,243 $11,314,161
========== ==========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND XXII, L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------- -----------------------------
1995 1994 1995 1994
------ ------ ------ ------
<S> <C> <C> <C> <C>
Revenue:
Rental revenue................ $561,632 $733,669 $ 1,342,053 $1,438,952
Interest...................... 6,956 2,823 12,942 5,209
Gain on legal settlement...... 38,749 - 38,749 -
------- ------- --------- ---------
Total revenue............... 607,337 736,492 1,393,744 1,444,161
------- ------- --------- ---------
Expenses:
Interest...................... 146,651 245,647 391,326 495,050
Interest - affiliates......... 276 17,310 18,568 32,974
Depreciation and
amortization................ 89,955 163,592 254,516 328,766
Property taxes................ 53,901 84,837 122,005 171,344
Personnel costs............... 75,157 73,602 172,845 174,190
Utilities..................... 34,369 40,570 79,182 96,362
Repair and maintenance........ 53,744 82,924 135,009 149,931
Property management
fees - affiliates........... 27,316 38,480 71,613 77,675
Other property operating
expenses.................... 29,495 66,439 71,679 104,723
General and administrative.... 18,322 6,946 39,680 35,959
General and administrative -
affiliates.................. 66,309 71,618 130,552 141,829
Loss on disposition of real
estate...................... - - 245,637 -
------- ------- --------- ---------
Total expenses.............. 595,495 891,965 1,732,612 1,808,803
------- ------- --------- ---------
Net income (loss)................ $ 11,842 $(155,473) $ (338,868) $ (364,642)
======= ======== ========= =========
Net income (loss) allocable
to limited partners - Current
Income Unit................... $ 1,066 $ (13,992) $ (30,498) $ (32,818)
Net income (loss) allocable
to limited partners - Growth
Shelter Unit.................. 10,658 (139,926) (304,981) (328,178)
Net income (loss) allocable
to General Partner............ 118 (1,555) (3,389) (3,646)
------- -------- --------- ---------
Net income (loss)................ $ 11,842 $(155,473) $ (338,868) $ (364,642)
======= ======== ========= =========
Net income (loss) per thousand
limited partnership units:
Current Income Units............. $ .05 $ (.70) $ (1.54) $ (1.65)
======= ======== ========= =========
Growth/Shelter Units............. $ .80 $ (10.44) $ (22.79) $ (24.49)
======= ======== ========= =========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND XXII, L.P.
STATEMENTS OF PARTNERS' DEFICIT
(Unaudited)
For the Six Months Ended June 30, 1995 and 1994
<TABLE>
Total
General Limited Partners'
Partner Partners Deficit
-------- --------- ----------
<S> <C> <C> <C>
Balance at December 31, 1993.............. $(241,965) $ (302,688) $ (544,653)
Net loss
General Partner........................ (3,646) - (3,646)
Current Income Units................... - (32,818) (32,818)
Growth/Shelter Units................... - (328,178) (328,178)
-------- -------- ----------
Total net loss............................ (3,646) (360,996) (364,642)
-------- -------- ----------
Balance at June 30,1994................... $(245,611) $ (663,684) $ (909,295)
======== ======== ==========
Balance at December 31, 1994.............. $(247,625) $ (863,021) $(1,110,646)
Net loss
General Partner........................ (3,389) - (3,389)
Current Income Units................... - (30,498) (30,498)
Growth/Shelter Units................... - (304,981) (304,981)
-------- ---------- ----------
Total net loss............................ (3,389) (335,479) (338,868)
-------- ---------- ----------
Balance at June 30, 1995.................. $(251,014) $(1,198,500) $(1,449,514)
======== ========== ==========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND XXII, L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
Six Months Ended
June 30,
----------------------------------
1995 1994
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Cash received from tenants........................ $1,414,899 $1,481,734
Cash received from legal settlement............... 38,749 -
Cash paid to suppliers............................ (505,101) (548,926)
Cash paid to affiliates........................... (225,655) (75,524)
Interest received................................. 12,942 5,209
Interest paid..................................... (402,209) (472,576)
Interest paid to affiliates....................... (149,043) -
Property taxes paid............................... - (23,655)
Property taxes escrowed........................... (89,698) (140,841)
--------- ---------
Net cash provided by operating activities............ 94,884 225,421
--------- ---------
Cash flows from investing activities:
Additions to real estate investments.............. (102,673) (46,049)
Proceeds from sale of real estate................. 738,914 -
--------- ---------
Net cash provided by (used in)
investing activities.............................. 636,241 (46,049)
--------- ---------
Cash flows from financing activities:
Principal payments on mortgage notes
payable......................................... (51,557) (59,581)
Repayment of advances from affiliates -
General Partner................................. (784,654) (20,874)
--------- ---------
Net cash used in financing activities................ (836,211) (80,455)
--------- ---------
Net increase (decrease) in cash and cash equivalents. (105,086) 98,917
Cash and cash equivalents at beginning of
period............................................ 589,211 378,420
--------- ---------
Cash and cash equivalents at end of period........... $ 484,125 $ 477,337
========= =========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
McNEIL REAL ESTATE FUND XXII, L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
Reconciliation of Net Loss to Net Cash Provided by
Operating Activities
<TABLE>
Six Months Ended
June 30,
-------------------------------
1995 1994
-------- --------
<S> <C> <C>
Net loss............................................. $(338,868) $(364,642)
-------- --------
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation and amortization..................... 254,516 328,766
Amortization of deferred borrowing costs.......... 2,936 5,872
Amortization of discounts on mortgage
notes payable................................... 17,810 17,025
Interest added to advances from affiliates -
General Partner................................. 18,568 32,974
Loss on disposition of real estate................ 245,637
Changes in assets and liabilities:................
Cash segregated for security deposits........... 10,147 (3,649)
Accounts receivable............................. 57,439 56,785
Escrow deposits................................. 130,686 37,679
Prepaid expenses and other assets............... (5,577) 7,089
Property taxes payable.......................... (88,422) (46,558)
Accounts payable and accrued expenses........... (47,764) (143)
Payable to affiliates - General Partner......... (23,490) 143,981
Advances from affiliates - General Partner...... (149,043) -
Security deposits and deferred rental
income........................................ 10,309 10,242
-------- --------
Total adjustments............................. 433,752 590,063
-------- --------
Net cash provided by operating activities............ $ 94,884 $ 225,421
======== ========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
See accompanying notes to financial statements.
<PAGE>
MCNEIL REAL ESTATE FUND XXII, L.P.
Notes to Financial Statements
(Unaudited)
June 30, 1995
NOTE 1.
------
McNeil Real Estate Fund XXII, L.P., (the "Partnership"), formerly known as
Southmark Realty Partners II, Ltd., was organized on November 30, 1984 as a
limited partnership under the provisions of the California Revised Limited
Partnership Act to acquire and operate commercial and residential properties.
The general partner of the Partnership is McNeil Partners, L.P. (the "General
Partner"), a Delaware limited partnership, an affiliate of Robert A. McNeil
("McNeil"). The principal place of business for the Partnership and the General
Partner is 13760 Noel Road, Suite 700, LB70, Dallas, Texas, 75240.
In the opinion of management, the financial statements reflect all adjustments
necessary for a fair presentation of the Partnership's financial position and
results of operations. All adjustments were of a normal recurring nature.
However, the results of operations for the six months ended June 30, 1995 are
not necessarily indicative of the results to be expected for the year ending
December 31, 1995.
NOTE 2.
------
The financial statements should be read in conjunction with the financial
statements contained in the Partnership's Annual Report on Form 10-K for the
year ended December 31, 1994, and the notes thereto, as filed with the
Securities and Exchange Commission, which is available upon request by writing
to McNeil Real Estate Fund XXII, L.P., c/o McNeil Real Estate Management, Inc.,
Investor Services, 13760 Noel Road, Suite 700, LB70, Dallas, Texas 75240.
NOTE 3.
------
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. The Partnership has suffered
recurring losses from operations and has a net Partners' deficit that raise
substantial doubt about its ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
NOTE 4.
------
Certain reclassifications have been made to prior period amounts to conform to
the current period presentation.
NOTE 5.
------
The Partnership pays property management fees equal to 5% of the gross rental
receipts for its residential property and 6% of gross rental revenues for its
commercial property to McNeil Real Estate Management, Inc. ("McREMI"), an
affiliate of McNeil, for providing property management and leasing services.
The Partnership reimburses McREMI for its costs, including overhead, of
administering the Partnership's affairs.
The Partnership is incurring an asset management fee which is payable to the
General Partner. Through 1999, the asset management fee is calculated as 1% of
the Partnership's tangible asset value. Tangible asset value is determined by
using the greater of (i) an amount calculated by applying a capitalization rate
of 9% to the annualized net operating income of each property or (ii) a value of
$10,000 per apartment unit for residential property and $50 per gross square
foot for commercial property to arrive at the property tangible asset value. The
property tangible asset value is then added to the book value of all other
assets excluding intangible items. The fee percentage decreases subsequent to
1999. Total accrued but unpaid asset management fees of $991,884 were
outstanding at June 30, 1995.
The Partnership pays a disposition fee to an affiliate of the General Partner
equal to 3% of the gross sales price for brokerage services performed in
connection with the sale of the Partnership's properties. The fee is due and
payable at the time the sale closes. The Partnership incurred $138,750 of such
fees in connection with the sale of Wyoming Mall on March 31, 1995.
The General Partner has established a revolving credit facility not to exceed
$5,000,000 in the aggregate which is available on a "first-come, first-served"
basis to the Partnership and other affiliated partnerships, if certain
conditions are met. Borrowings under the facility may be used to fund deferred
maintenance, refinancing obligations and working capital needs. There is no
assurance that the Partnership will receive any additional funds under the
facility because no amounts have been reserved for any particular partnership.
As of June 30, 1995, $2,362,004 remained available for borrowing under the
facility; however, additional funds could be available as other partnerships
repay existing borrowings.
The General Partner has, in its discretion, advanced funds to enable the
Partnership to meet its working capital requirements. These advances, which are
unsecured and due on demand, accrue interest at a rate equal to the prime
lending rate plus 1%.
McNeil Real Estate Fund XXI, L.P., an affiliate of the General Partner and joint
owner of Wyoming Mall has advanced funds to the Partnership for tenant
improvements and operations at Wyoming Mall. The advances are unsecured and due
on demand and accrue interest at a rate of prime plus 3 1/2%.
In April 1995, the Partnership utilized the proceeds from the sale of Wyoming
Mall to repay all outstanding affiliate advances and the related accrued
interest.
The total advances from affiliates at June 30, 1995 and December 31, 1994
consist of the following:
<TABLE>
June 30, December 31,
1995 1994
--------- --------
<S> <C> <C>
Advance from General Partner - revolving
credit facility........................................ $ - $167,102
Advances from General Partner - other..................... - 301,155
Advances purchased by General Partner..................... - 16,397
Advances from McNeil Real Estate Fund XXI, L.P............ - 300,000
Accrued interest payable.................................. - 130,475
--------- -------
$ - $915,129
========= =======
</TABLE>
Compensation and reimbursements paid to or accrued for the benefit of the
General Partner and its affiliates are as follows:
<TABLE>
Six Months Ended
June 30,
--------------------------------
1995 1994
------- -------
<S> <C> <C>
Property management fees.................................. $ 71,613 $ 77,675
Charged to interest - affiliates:
Interest on advances from affiliates - General
Partner.............................................. 18,568 32,974
Charged to loss on disposition of real estate:
Disposition fee........................................ 138,750 -
Charged to general and administrative -
affiliates:
Partnership administration............................. 61,825 57,225
Asset management fee................................... 68,727 84,604
------- -------
$359,483 $252,478
======= =======
</TABLE>
NOTE 6.
------
On March 31, 1995, Wyoming Mall was sold to an unrelated third party for a cash
price of $9,250,000. The Partnership had a 50% undivided interest in the assets,
liabilities and operations of Wyoming Mall, owned jointly with McNeil Real
Estate Fund XXI, L.P. Cash proceeds and the loss on the disposition is detailed
below:
<TABLE>
Loss on Sale Cash Proceeds
------------ -------------
<S> <C> <C>
Sales Price.......................................... $4,625,000 $4,625,000
Selling costs........................................ (234,838) (234,838)
Mortgage note prepayment penalty..................... (138,441) (138,441)
Carrying value....................................... (4,325,663)
Accounts receivable.................................. (81,749)
Deferred borrowing costs............................. (49,910)
Prepaid expenses..................................... (40,036)
---------
Loss on disposition of real estate................... $ (245,637)
=========
Retirement of mortgage note.......................... (3,452,337)
Payment of 1994 taxes at closing..................... (23,735)
Real estate tax proration............................ (14,154)
Credit for security deposit liability................ (22,581)
----------
Net cash proceeds.................................... $ 738,914
==========
</TABLE>
NOTE 7.
------
The Partnership filed claims with the United States Bankruptcy Court for the
Northern District of Texas, Dallas Division (the "Bankruptcy Court") against
Southmark for damages relating to improper overcharges, breach of contract and
breach of fiduciary duty. The Partnership settled these claims in 1991, and such
settlement was approved by the Bankruptcy Court.
An Order Granting Motion to Distribute Funds to Class 8 Claimants dated April
14, 1995 was issued by the Bankruptcy Court. In accordance with the Order, in
May 1995 the Partnership received in full satisfaction of its claims, $29,292 in
cash, and common and preferred stock in the reorganized Southmark subsequently
sold for $9,457, which amounts represent the Partnership's pro-rata share of
Southmark assets available for Class 8 Claimants.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
------ ----------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
FINANCIAL CONDITION
-------------------
The Partnership reported a net loss of $338,868 for the first six months of
1995 as compared to $364,642 for the same period in 1994.
On March 31, 1995, Wyoming Mall was sold to an unrelated third party for a cash
price of $9,250,000. The Partnership had a 50% undivided interest in the assets,
liabilities and operations of Wyoming Mall, owned jointly with McNeil Real
Estate Fund XXI, L.P. The Partnership received net cash proceeds of $738,914
from the sale of the property and recorded a loss on disposition of real estate
of $245,637. The Partnership recorded $256,873 of revenue and $268,759 of
expense during the first six months of 1995 for Wyoming Mall.
<PAGE>
Harbour Club III is part of a four-phase apartment complex located in
Belleville, Michigan. Phases I and II of the complex are owned by partnerships
in which McNeil Partners, L.P. is the general partner; while Phase IV is owned
by University Real Estate Fund 12, Ltd., ("UREF 12"). McREMI had been managing
all four phases of the complex until December 1992, when the property management
agreement between McREMI and UREF 12 was canceled. Additionally, in January
1993, Phase I defaulted on the mortgage loan to HUD and unless a refinancing
agreement can be reached with the lender, the property is subject to
foreclosure. If Phase I is lost to foreclosure, it would be extremely difficult
to operate Phases II and III because the pool and clubhouse are located in Phase
I.
No additional advances from affiliates were required during the first six months
of 1995. In January 1995, the Partnership was able to repay $220,000 of
affiliate advances and accrued interest. In April 1995, the proceeds from the
sale of Wyoming Mall enabled the Partnership to repay the remaining $713,697 of
the affiliate advances and accrued interest.
RESULTS OF OPERATIONS
---------------------
Revenue:
Total Partnership revenues were $607,337 and $1,393,744 for the three and six
months ended June 30, 1995, respectively, as compared to $736,492 and
$1,444,161 for the three and six months ended June 30, 1994. Rental revenue
decreased $172,037 and $96,899 for the three and six months ended
June 30, 1995, as compared to the same periods in 1994, primarily due to the
sale of Wyoming Mall.
The Partnership recorded $38,749 of gain on legal settlement during the first
half of 1995. In May 1995, the Partnership received cash of $29,292 and common
and preferred stock in the reorganized Southmark that was subsequently sold for
$9,457, as full satisfaction of claims previously filed in the Bankruptcy Court.
Expenses:
Total expenses decreased $296,470 and $76,191 for the three and six months ended
June 30, 1995, respectively, as compared to the same periods of 1994 primarily
due to the sale of Wyoming Mall. This decrease was partially offset by the
$245,637 loss on the sale of Wyoming Mall recorded in March 1995.
Interest - affiliates decreased $17,034 and $14,406 for the three and six months
ended June 30, 1995, respectively, as compared to the same periods of 1994. The
sale of Wyoming Mall enabled the Partnership to repay all outstanding affiliate
advances, thereby reducing affiliate interest expense.
Property tax expense decreased $30,936 and $49,339 for the three and six months
ended June 30, 1995, respectively, as compared to the same periods of 1994. A
decrease of $19,011 and $39,692 for the respective three and six months periods
is due to the reduction in property tax expense at Harbour Club III Apartments
that occurred from a successful tax appeal. The remaining decrease is due to the
sale of Wyoming Mall.
Utilities decreased $6,201 and $17,180 for the three and six months ended June
30, 1995, respectively, as compared to the same periods of 1994. During the
first quarter of 1994, utilities at Harbour Club Apartments were higher than
usual due to the harsh winter weather. Such weather conditions did not occur
during the first quarter of 1995. The remaining decrease is due to the sale of
Wyoming Mall.
Repairs and maintenance expense decreased $29,180 and $14,922 for the three and
six months ended June 30, 1995, respectively, as compared to the same periods of
1994. Carpet and appliance replacements at Harbour Club III Apartments decreased
due to an ongoing capital replacement program of these items. Additionally, the
decrease is due to the sale of Wyoming Mall.
<PAGE>
Other property operating expense decreased $36,944 and $33,044 for the three and
six months ended June 30, 1995, respectively, as compared to the same periods of
1994. During 1994, Harbour Club III Apartments incurred approximately $10,000 of
legal fees related to a golf course associated with Harbour Club Apartments,
while $2,000 of such fees were incurred during 1995. Additionally, Harbour Club
III Apartments has reduced bad debts approximately $14,000. The remaining
decrease is due to the sale of Wyoming Mall.
General and administrative expenses increased $11,376 and $3,721 for the three
and six months ended June 30, 1995, respectively, as compared to the same
periods of 1994, primarily due to a increase in professional and consulting
fees.
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
The Partnership was provided $94,884 of cash by operating activities during the
first six months of 1995 as compared to $225,421 for the same period in 1994.
Cash received from tenants, cash paid to suppliers, interest paid and property
taxes paid decreased due to the sale of Wyoming Mall. Due to the improved cash
position from the sale of Wyoming Mall, the Partnership was able to pay $149,043
of interest and $225,655 of fees due to affiliates.
Net cash provided by investing activities was $636,241 for the first six months
of 1995 as compared to $46,049 of cash used in investing activities for the same
period of 1994. The Partnership received $738,914 of cash proceeds from the sale
of Wyoming Mall on March 31, 1995. Cash used for additions to real estate
totaled $102,673 during the first six months of 1995 as compared to $46,049
during the same period of 1994. The increase in capital expenditures is
primarily due to an ongoing carpet, appliance and window replacement program as
well as a partial roof replacement at Harbour Club III Apartments.
Net cash used in financing activities was $836,211 during the first six months
of 1995 as compared to $80,455 for the same period of 1994. Principal payments
on mortgage notes payable decreased due to the retirement of the mortgage note
related to Wyoming Mall. During the first six months of 1995, the improved cash
position enabled the Partnership to repay all outstanding advances from
affiliates of the General Partner.
At June 30, 1995, the Partnership held cash and cash equivalents of $484,125.
Short-term liquidity
--------------------
The sale of Wyoming Mall provided the Partnership $738,914 of net cash proceeds.
In April 1995, the Partnership utilized the sale proceeds to repay all
outstanding affiliate advances.
McNeil Real Estate Fund XXI, L.P. has advanced funds to the Partnership for
tenant improvements and operations at Wyoming Mall. The advances were unsecured,
due on demand and accrued interest at a rate of prime plus 3 1/2%. In April
1995, the proceeds from the sale of Wyoming Mall were utilized to repay the
advances plus the accrued interest due to McNeil Real Estate Fund XXI, L.P.
The General Partner has established a revolving credit facility not to exceed
$5,000,000 in the aggregate which is available on a "first-come, first-served"
basis to the Partnership and other affiliated partnerships, if certain
conditions are met. Borrowings under the facility may be used to fund deferred
maintenance, refinancing obligations and working capital needs. There is no
assurance that the Partnership will receive any additional funds under the
facility because no amounts have been reserved for any particular partnership.
As of June 30, 1995, $2,362,004 remained available for borrowing under the
facility; however, additional funds could be available as other partnerships
repay existing borrowings. Additionally, the General Partner has, in its
discretion, advanced funds to the Partnership in addition to the revolving
credit facility. The General Partner is not obligated to advance funds to the
Partnership and there is no assurance that the Partnership will receive
additional funds.
<PAGE>
The balance of cash and cash equivalents can be considered no more than a
minimum level of cash reserves for the remaining property's operations. Harbour
Club III Apartments is expected to provide sufficient positive cash flow for
normal operations and debt service payments for the remainder of 1995. However,
Harbour Club III is in need of major capital improvements in order to maintain
occupancy and rental rates at a level to continue to support operations and debt
service. The necessary capital improvements will have to be funded from outside
sources. No such sources have been identified. Management is currently seeking
additional financing to fund these improvements, however such financing is not
assured. If the property is unable to obtain additional funds and cannot
maintain operations at a level to support its current debt, the property may
ultimately be foreclosed on by the lender.
Long-term liquidity
-------------------
While the outlook for maintenance of adequate levels of liquidity is adequate in
the short term, should operations deteriorate and present cash resources become
insufficient to fund current needs, the Partnership would require other sources
of working capital. No such sources have been identified. The Partnership has no
established lines of credit from outside sources. Other possible actions to
resolve cash deficiencies include refinancing, deferral of capital expenditures
except where improvements are expected to increase the competitiveness and
marketability of the properties, arranging financing from affiliates or the
ultimate sale of the property. A sale or refinancing is a possibility only, and
there are at present no plans for any such sale or refinancing.
These conditions raise substantial doubt about the Partnership's ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of these uncertainties.
Distributions
-------------
To maintain adequate cash balances of the Partnership, distributions to Current
Income Unit holders were suspended in 1988. There have been no distribution to
Growth/Shelter Units holders. Distributions to Unit holders will remain
suspended for the foreseeable future. The General Partner will continue to
monitor the cash reserves and working capital needs of the Partnership to
determine when cash flows will support distributions to the Unit holders.
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
------ --------------------------------
(a) Exhibits.
<TABLE>
Exhibit
Number Description
------- -----------
<S> <C> <C>
4. Amended and Restated Limited Partnership Agreement dated March 26, 1992.
( Incorporated by reference to the Current to the Current Report of the
Registrant on Form 8-K dated March 26, 1992, as filed on April 9, 1992).
11. Statement regarding computation of Net Income (Loss) per Thousand Limited
Partnership Units: Net income (loss) per thousand limited partnership units is
computed by dividing net income (loss) allocated to the limited partners by
the weighted average number of limited partnership units outstanding expressed
in thousands. Per unit information has been computed based on 19,826 and
19,903 weighted average Current Income Units (in thousands) outstanding in
1995 and 1994, respectively, and 13,383 and 13,398 weighted average
Growth/Shelter Units (in thousands) outstanding in 1995 and 1994, respectively.
</TABLE>
(b) Reports on Form 8-K. There were no reports on Form 8-K filed during
the quarter ended June 30, 1995.
<PAGE>
MCNEIL REAL ESTATE FUND XXII, L.P.
SIGNATURES
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:
<TABLE>
<S> <C>
McNEIL REAL ESTATE FUND XXII, L.P.
By: McNeil Partners, L.P., General Partner
By: McNeil Investors, Inc., General Partner
August 14, 1995 By: /s/ Donald K. Reed
------------------------------- -------------------------------------
Date Donald K. Reed
President and Chief Executive Officer
August 14, 1995 By: /s/ Robert C. Irvine
------------------------------- -------------------------------------
Date Robert C. Irvine
Chief Financial Officer of McNeil Investors, Inc.
Principal Financial Officer
August 14, 1995 By: /s/ Carol A. Fahs
------------------------------- -------------------------------------
Date Carol A. Fahs
Chief Accounting Officer of McNeil Real Estate
Management, Inc.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 516,816
<SECURITIES> 0
<RECEIVABLES> 2,080
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 10,055,381
<DEPRECIATION> (4,507,621)
<TOTAL-ASSETS> 6,364,243
<CURRENT-LIABILITIES> 0
<BONDS> 6,048,667
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 6,364,243
<SALES> 1,342,053
<TOTAL-REVENUES> 1,393,744
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,322,718
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 409,894
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (338,868)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
