SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended June 30, 1996 Commission file #0-16111
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
(Exact name of registrant as specified in its charter)
Illinois 36-3314827
(State of organization) (IRS Employer Identification No.)
900 N. Michigan Ave., Chicago, IL 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312/915-1987
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
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . . 3
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . . . . 17
PART II OTHER INFORMATION
Item 3. Defaults Upon Senior Securities. . . . . . . . . . 20
Item 5. Other Information. . . . . . . . . . . . . . . . . 21
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . 23
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1996 AND DECEMBER 31, 1995
(UNAUDITED)
ASSETS
------
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
------------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . $ 22,413,194 15,045,385
Interest, rents and other receivables . . . . . . . . . . . . . . . . 618,380 1,451,221
Escrow deposits and restricted securities . . . . . . . . . . . . . . 10,529,788 10,972,207
Other restricted securities . . . . . . . . . . . . . . . . . . . . . 5,012,325 3,980,279
------------ ------------
Total current assets. . . . . . . . . . . . . . . . . . . . . . 38,573,687 31,449,092
------------ ------------
Investment properties, at cost:
Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,607,682 26,487,675
Buildings and improvements. . . . . . . . . . . . . . . . . . . . . 166,159,593 308,349,093
------------ ------------
179,767,275 334,836,768
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . (65,840,300) (104,766,634)
------------ ------------
Total investment properties, net of
accumulated depreciation. . . . . . . . . . . . . . . . . . . 113,926,975 230,070,134
------------ ------------
Investment in unconsolidated ventures,
at equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,204,071 22,432,665
Deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,058,014 3,852,745
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . . 4,505,138 4,902,626
Venture partners' deficits in ventures. . . . . . . . . . . . . . . . . 12,239,128 8,300,712
------------ ------------
$190,507,013 301,007,974
============ ============
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
Current liabilities:
Current portion of long-term debt . . . . . . . . . . . . . . . . . . $140,595,872 179,862,967
Current portion of notes payable. . . . . . . . . . . . . . . . . . . 70,701 70,701
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . 3,729,639 2,494,207
Amounts due to affiliates . . . . . . . . . . . . . . . . . . . . . . 2,186,007 2,186,007
Accrued interest payable. . . . . . . . . . . . . . . . . . . . . . . 14,848,764 13,583,612
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . . 701,828 486,906
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . 521,652 521,652
------------ ------------
Total current liabilities . . . . . . . . . . . . . . . . . . . 162,654,463 199,206,052
Notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219,733 219,733
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . . 389,897 557,062
Investment in unconsolidated ventures, at equity. . . . . . . . . . . . 25,004,951 22,080,422
Deferred income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,761,753 2,007,580
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 330,000 330,000
Long-term debt, less current portion. . . . . . . . . . . . . . . . . . 59,792,568 108,528,346
------------ ------------
Commitments and contingencies
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . 250,153,365 332,929,195
Venture partners' subordinated equity in ventures . . . . . . . . . . . 8,311,153 5,439,926
Partners' capital accounts (deficits):
General partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . . . 20,000 20,000
Cumulative net earnings (losses). . . . . . . . . . . . . . . . . . (19,185,028) (17,335,834)
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . (1,020,769) (908,722)
------------ ------------
(20,185,797) (18,224,556)
------------ ------------
Limited partners:
Capital contributions, net of offering costs. . . . . . . . . . . . 384,978,681 384,978,681
Cumulative net earnings (losses). . . . . . . . . . . . . . . . . . (391,100,110) (374,108,664)
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . (41,650,279) (30,006,608)
------------ ------------
(47,771,708) (19,136,591)
------------ ------------
Total partners' capital accounts (deficits) . . . . . . . . . (67,957,505) (37,361,147)
------------ ------------
$190,507,013 301,007,974
============ ============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
-------------------------- --------------------------
1996 1995 1996 1995
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Income:
Rental income . . . . . . . . . . . . . . . . . $ 6,654,927 12,344,283 14,997,468 23,955,340
Interest income . . . . . . . . . . . . . . . . 414,507 300,714 781,956 586,963
----------- ---------- ----------- ----------
7,069,434 12,644,997 15,779,424 24,542,303
----------- ---------- ----------- ----------
Expenses:
Mortgage and other interest . . . . . . . . . . 5,856,069 7,805,791 12,027,940 15,629,929
Depreciation. . . . . . . . . . . . . . . . . . 1,127,701 2,710,631 2,668,728 5,415,762
Property operating expenses . . . . . . . . . . 2,933,034 5,013,867 6,651,279 10,124,475
Professional services . . . . . . . . . . . . . 144,024 163,776 402,980 425,865
Amortization of deferred expenses . . . . . . . 213,826 292,942 441,947 549,819
General and administrative. . . . . . . . . . . 463,091 246,824 750,731 436,297
Provisions for value impairment . . . . . . . . -- -- 26,000,000 --
----------- ---------- ----------- ----------
10,737,745 16,233,831 48,943,605 32,582,147
----------- ---------- ----------- ----------
Operating earnings (loss). . . . . . . . . (3,668,311) (3,588,834) (33,164,181) (8,039,844)
Partnership's share of loss from operations of
unconsolidated ventures . . . . . . . . . . . . (4,328,279) (38,585) (5,918,185) (1,723,850)
Venture partners' share of ventures'
operations. . . . . . . . . . . . . . . . . . . 364,873 523,931 5,922,783 1,129,330
----------- ---------- ----------- ----------
Net operating earnings (loss) . . . . . . (7,631,717) (3,103,488) (33,159,583) (8,634,364)
Gain on sale of interest in
unconsolidated ventures . . . . . . . . . . . . 98,871 6,336,896 196,029 6,942,692
Gain on sale of investment
properties, net of venture
partner's share of gain of
$3,113,318 and manager's incentive
fee of $1,730,016 . . . . . . . . . . . . . . . 8,835,590 -- 8,835,590 --
----------- ---------- ----------- ----------
Net earnings (loss) before
extraordinary item and cumulative
effect of an accounting change. . . . . 1,302,744 3,233,408 (24,127,964) (1,691,672)
----------- ---------- ----------- ----------
Extraordinary item - prepayment penalties . . . . (386,202) -- (386,202) --
Extraordinary item - gain on forgiveness
of indebtedness . . . . . . . . . . . . . . . . -- -- 27,873,526 --
Cumulative effect of an accounting change
(net of venture partners' share of
$7,800,000) . . . . . . . . . . . . . . . . . . -- -- (22,200,000) --
----------- ---------- ----------- ----------
Net earnings (loss) . . . . . . . . . . . $ 916,542 3,233,408 (18,840,640) (1,691,672)
=========== ========== =========== ==========
Net loss per limited partnership
interest:
Net operating earnings (loss) . . . . . $ (16.51) (6.71) (71.74) (18.68)
Gain on sale of interests in
unconsolidated ventures . . . . . . . .22 14.14 .44 15.49
Net gain on sale of investment
properties. . . . . . . . . . . . . . 19.71 -- 19.71 --
Extraordinary items . . . . . . . . . . (.86) -- 61.33 --
Cumulative effect of accounting
change. . . . . . . . . . . . . . . . -- -- (48.03) --
----------- ---------- ----------- ----------
$ 2.56 7.43 (38.29) (3.19)
=========== ========== =========== ==========
Cash distributions per
limited partnership
interest. . . . . . . . . . . . . . . . $ 25.00 -- 25.00 8.00
=========== ========== =========== ==========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(UNAUDITED)
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . $(18,840,640) (1,691,672)
Items not requiring (providing) cash or cash equivalents:
Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,668,728 5,415,762
Amortization of deferred expenses . . . . . . . . . . . . . . . . . . . 441,947 549,819
Long-term debt - deferred accrued interest. . . . . . . . . . . . . . . 1,709,437 1,669,250
Partnership's share of loss from operations of
unconsolidated ventures . . . . . . . . . . . . . . . . . . . . . . . 5,918,185 1,723,850
Venture partners' share of ventures' operations,
gain on sale of investment property, extraordinary
item and cumulative effect of an accounting change. . . . . . . . . . (831,154) (1,129,330)
Provisions for value impairment . . . . . . . . . . . . . . . . . . . . 26,000,000 --
Gain on sale of interest in unconsolidated ventures . . . . . . . . . . (196,029) (6,942,692)
Total gain on sale of investment property . . . . . . . . . . . . . . . (11,948,909) --
Extraordinary items . . . . . . . . . . . . . . . . . . . . . . . . . . (37,782,318) --
Cumulative effect of an accounting change . . . . . . . . . . . . . . . 30,000,000 --
------------ -----------
Changes in:
Interest, rents and other receivables . . . . . . . . . . . . . . . . . 232,203 765,081
Current portion of notes receivable . . . . . . . . . . . . . . . . . . -- 11,967
Escrow deposits and restricted securities . . . . . . . . . . . . . . . 442,419 (2,741,458)
Other restricted securities . . . . . . . . . . . . . . . . . . . . . . (1,450,605) (682,000)
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . . 255,572 347,728
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . (360,505) 1,763,204
Amounts due affiliates. . . . . . . . . . . . . . . . . . . . . . . . . -- 100,167
Accrued interest payable. . . . . . . . . . . . . . . . . . . . . . . . 3,117,196 2,653,751
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . . . 241,638 432,223
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . -- 15,000
Deferred income . . . . . . . . . . . . . . . . . . . . . . . . . . . . (245,827) 2,745,058
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . . (121,366) (120,233)
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (15,000)
------------ -----------
Net cash provided by (used in)
operating activities. . . . . . . . . . . . . . . . . . . . . . . (750,028) 4,870,475
------------ -----------
Cash flows from investing activities:
Net sales and maturities of short-term investments. . . . . . . . . . . . -- 717,825
Additions to investment properties. . . . . . . . . . . . . . . . . . . . (983,690) (240,740)
Cash proceeds from sale of interests in venture . . . . . . . . . . . . . 19,942,016 671,006
Partnership's distributions from unconsolidated ventures. . . . . . . . . 1,430,967 1,018,316
Partnership's contributions to unconsolidated ventures. . . . . . . . . . -- (20,000)
Payment of deferred expenses. . . . . . . . . . . . . . . . . . . . . . . (107,553) (178,046)
------------ -----------
Net cash provided by (used in) investing activities . . . . . . . . 20,281,740 1,968,361
------------ -----------
Cash flows from financing activities:
Principal payment on note payable . . . . . . . . . . . . . . . . . . . . -- (70,701)
Principal payments on long-term debt. . . . . . . . . . . . . . . . . . . (172,148) (2,547,245)
Contributions from venture partners . . . . . . . . . . . . . . . . . . . -- 45,000
Distributions to venture partners . . . . . . . . . . . . . . . . . . . . (236,037) --
Distributions to general partners . . . . . . . . . . . . . . . . . . . . (112,047) (35,855)
Distributions to limited partners . . . . . . . . . . . . . . . . . . . . (11,643,671) (3,549,636)
------------ -----------
Net cash provided by (used in) financing activities . . . . . . . . (12,163,903) (6,158,437)
------------ -----------
Net increase (decrease) in cash
and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . 7,367,809 680,399
Cash and cash equivalents, beginning of year. . . . . . . . . . . . 15,045,385 844,080
------------ -----------
Cash and cash equivalents, end of period. . . . . . . . . . . . . . $ 22,413,194 1,524,479
============ ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest . . . . . . . . . . . . . . . . $ 10,762,788 11,306,964
============ ===========
Non-cash investing and financing activities:
Non-cash gain recognized on sale of interests in
unconsolidated ventures . . . . . . . . . . . . . . . . . . . . . . . $ 196,029 6,942,692
============ ===========
Sale of interest in venture:
Sales proceeds, net of selling expenses . . . . . . . . . . . . . . . $ 58,491,799 24,075,000
Payoff of mortgage loan . . . . . . . . . . . . . . . . . . . . . . . (38,549,783) (23,403,994)
------------ -----------
Cash proceeds from sale of interest in venture. . . . . . . . . . $ 19,942,016 671,006
============ ===========
Disposition of investment property:
Balance due on long-term debt canceled. . . . . . . . . . . . . . . . $ 50,853,648 --
Accrued interest expense on accelerated long-term debt. . . . . . . . 1,874,031 --
Reduction of investment property. . . . . . . . . . . . . . . . . . . (14,368,807) --
Reduction of deferred expenses. . . . . . . . . . . . . . . . . . . . (370,442) --
Reduction of other liabilities. . . . . . . . . . . . . . . . . . . . (206,112) --
------------ -----------
Extraordinary item recognized due to lender
realizing upon security . . . . . . . . . . . . . . . . . . . . . $ 37,782,318 --
============ ===========
Incentive fee payable to manager of investment property . . . . . . . . $ 1,730,016 --
============ ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996 AND 1995
(UNAUDITED)
GENERAL
Readers of this quarterly report should refer to the Partnership's
audited financial statements for the fiscal year ended December 31, 1995,
which are included in the Partnership's 1995 Annual Report on Form 10-K
(File No. 0-16111) filed on March 25, 1996, as certain footnote disclosures
which would substantially duplicate those contained in such audited
financial statements have been omitted from this report. Capitalized terms
used but not defined in this quarterly report have the same meanings as in
the Partnership's 1995 Annual Report on Form 10-K.
The preparation of financial statements in accordance with GAAP
requires the Partnership to make estimates and assumptions that affect the
reported or disclosed amount of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from these
estimates.
Statement of Financial Accounting Standards No. 121 was adopted by the
Partnership on January 1, 1996.
TRANSACTIONS WITH AFFILIATES
The Partnership, pursuant to the Partnership Agreement, is permitted
to engage in various transactions involving the Corporate General Partner
and its affiliates, including the reimbursement for salaries and salary-
related expenses of its employees and certain of its officers and other
direct expenses relating to the administration of the Partnership and the
operation of the Partnership's investments. Fees, commissions and other
expenses required to be paid by the Partnership to the General Partners and
their affiliates as of June 30, 1996 and for the six months ended June 30,
1996 and 1995 were as follows:
Unpaid at
June 30,
1996 1995 1996
-------- ------ -------------
Property management and
leasing fees. . . . . . . . $82,486 39,344 1,564,686
Reimbursement (at cost) for
out-of-pocket salary and
salary-related expenses
related to the on-site
personnel and other costs
for the Partnership and
its investment properties. . 105,347 118,787 97,366
-------- ------- ---------
$187,833 158,131 1,662,052
======== ======= =========
An affiliate of the General Partners guaranteed payment to the
unaffiliated third party property manager for the property management and
leasing fees relating to the 260 Franklin property. As of June 30, 1996,
$521,757 and $988,375 of management and leasing fees payable to the
unaffiliated third party property manager and the affiliate of the General
Partners, respectively, were unpaid, of which the Partnership's share is
$365,230 and $691,862, respectively.
JMB/900
Occupancy of this building increased to 98% at the end of the first
quarter. The midtown Manhattan market remains competitive. Approximately
44,000 square feet (approximately 9% of the building's leasable square
footage) of leased space expires in 1996 of which 25,900 square feet
(approximately 5% of the building's leasable square footage) has been
released and 2,045 square feet was renewed to date. The property's
operating cash flow will be adversely affected by lower rental rates
achieved and leasing costs incurred upon releasing this space and may be
adversely affected by increased vacancy during the releasing period.
Through December 31, 1991, it was necessary for JMB/900 to contribute
approximately $4,364,000 ($2,909,000 of which was contributed by the
Partnership) to pay past due real estate taxes and to pay certain costs,
including litigation settlement costs, which were the responsibility of one
of the Venture Partners under the terms of the joint venture agreement to
the extent such funds were not available from the investment property. In
July 1989, JMB/900 filed a lawsuit in Federal court against the former
manager and one of the Venture Partners to recover the amounts contributed
and to recover for certain other joint venture obligations on which the
Venture Partner has defaulted. This lawsuit was dismissed on
jurisdictional grounds. Subsequently, however, the FDIC filed a complaint,
since amended, in a lawsuit against the Venture Partner, the Partnership,
Carlyle-XIV ("C-XIV") and JMB/900, which has enabled JMB/900 to refile its
previously asserted claims against the Venture Partner as part of that
lawsuit in Federal court. There is no assurance that JMB/900 will recover
the amounts of its claims as a result of the litigation. Due to the
uncertainty, no amounts in addition to the amounts advanced to date, noted
above, have been recorded in the financial statements. Settlement
discussions with one of the Venture Partners and the FDIC continue. In
connection with the current settlement discussions, the FDIC has filed two
additional lawsuits against JMB/900 and the non-affiliated defendants, in
an attempt, among other things, to obtain a legal resolution of competing
claims made as to the ownership of the Progress Partners interest of the
Venture Partner. JMB/900 has entered into an agreement with the FDIC to
stay these proceedings against itself pending the outcome of the current
settlement discussions. If a settlement is not achieved and the FDIC
pursues these actions, JMB/900 intends to vigorously defend itself. In
addition, it appears that the Venture Partners may not have the financial
capabilities to repay amounts advanced on their behalf. Consequently, a
final settlement may involve redirecting to JMB/900 amounts otherwise
payable to the Venture Partners in accordance with the venture agreement.
Under certain circumstances, JMB/900 may consider purchasing one or all of
the Venture Partners' positions in Progress Partners in order to resolve
this and potential future disputes. There are no assurances that a
settlement will be finalized or that JMB/900 will be able to recover any
amounts from the Venture Partners.
Pursuant to the extension on the mortgage loan, net cash flow (as
defined) after debt service and capital and after repayment of
approximately $3,229,000 to JMB/900 representing costs associated with and
deposits made by the joint venture in connection with the loan extension
will be paid into an escrow account controlled by the lender to be used,
including interest earned thereon, by the joint venture for releasing costs
associated with leases which expire in 1999 and 2000 (approximately 240,000
square feet of space). The remaining proceeds in this escrow plus interest
earned thereon, if any, will be released to the joint venture once 90% of
such leased space has been renewed or released. To date, no escrow funds
have been deposited into the account for leasing costs. As of the date of
this report, approximately $1,529,000 of the amounts advanced by the joint
venture have been repaid to the joint venture (of which the Partnership's
share is approximately $1,024,000).
CALIFORNIA PLAZA
Net cash flow continues to be escrowed with the lender (included in
escrowed deposits as restricted securities) pursuant to the December 1993
loan modification. The Partnership recorded a provision for value
impairment of $7,200,000 as of January 1, 1996 as the Partnership does not
consider this property to be a source of future long-term liquidity.
SPRINGBROOK SHOPPING CENTER
The Center is currently 55% occupied. A lease for approximately 13%
of the center expired in May 1996 and the tenant did not renew its lease.
The center is expected to operate at a deficit in 1996. Therefore, the
Partnership has decided not to commit significant additional amounts to the
property and ceased making monthly debt service payments in June 1996.
Commencing in June 1996, all net cash flow from the property is being
escrowed with the lender. This will likely result in the Partnership no
longer having an ownership interest in the property. The Partnership
recorded a provision for value impairment of $1,400,000 as of January 1,
1996.
The property was classified as held for sale or disposition as of
April 1, 1996 and therefore has not been subject to continued depreciation.
The accompanying consolidated financial statements include revenues of
$364,710 and $447,748 and operating expenses of $228,009 and $189,591 for
the three months ended June 30, 1996 and 1995. The property had a net
carrying value of $9,912,203 at December 31, 1995.
VILLAGES NORTHEAST
On May 7, 1996, the Partnership sold (through the Villages Northeast
venture) the Dunwoody apartment complex to the unaffiliated venture
partner, pursuant to such venture partner's right of first refusal, for
$47,000,000 less brokerage commissions, transfer taxes and legal fees of
approximately $470,000. Approximately $30,900,000 of the sales proceeds
was utilized to retire the mortgage debt including a prepayment penalty of
approximately $435,000 (of which the Partnership's share of approximately
$304,453 was reported as an extraordinary item in the 1996 financial
consolidated statements). Additionally, approximately $787,000 (of which
the Partnership's share was approximately $551,000) was paid to the State
of Georgia on behalf of the Limited Partners for withholding tax related to
the sale. As a result of the sale, the Partnership recognized a gain of
approximately $7,260,000 for financial reporting purposes at June 30, 1996
and expects to recognize a gain of approximately $18,700,000 for Federal
income tax purposes in 1996.
The property was classified as held for sale or disposition as of
January 1, 1996 and therefore has not been subject to continued
depreciation. The accompanying consolidated financial statements include
revenues of $2,560,507 and $3,691,518 and operating expenses of $2,251,414
and $3,893,497 for the six months ended June 30, 1996 and 1995. The
property had a net carrying value of $35,681,989 at December 31, 1995.
PIPER JAFFRAY TOWER
Occupancy of this building remained at 98% during the quarter.
Under the terms of an August 1992 modification agreement with the
lender, the lender is essentially entitled to all operating cash flow. In
addition to fixed interest on the mortgage notes secured by the Piper
Jaffray Tower, contingent interest is payable in annual installments on
April 1 computed at 50% of gross receipts, as defined, for each fiscal year
in excess of $15,200,000. No such contingent interest was due for 1993,
1994 or 1995. In addition, to the extent the investment property generates
cash flow after payment of the fixed interest on the mortgage, contingent
interest, if any, leasing and capital costs, and 25% of the ground rent,
such amount will be paid to the lender as a reduction of the principal
balance of the mortgage loan. The excess cash flow payments remitted to
the lender for 1993 and 1994 totalled $1,390,910 and $353,251,
respectively. During 1995, excess cash flow generated under this agreement
was $464,178 which was remitted to the lender in April 1996 from cash held
by the venture. On a monthly basis, the venture deposits the property
management fee into an escrow account to be used (including interest earned
thereon) for future leasing costs to the extent cash flow is not sufficient
to cover such items. To date, no escrow funds have been required to be
used for leasing costs. At June 30, 1996, the balance of such escrow
account totalled approximately $3,546,000. The manager of the property
(which was an affiliate of the Corporate General Partner through November
1994) has agreed to defer receipt of its management fee until a later date.
As of June 30, 1996, the manager has deferred approximately $2,896,000
($1,839,000 of which represents deferred fees due to affiliates through
November 1994 of which approximately $919,500 is the Partnership's share)
of management fees.
In addition, upon sale or refinancing, the lender is entitled to a
significant level of proceeds in excess of the then unpaid principal
balance prior to the joint venture's receipt of proceeds. While the
modification provides the joint venture with an opportunity to retain an
ownership position in the property, there must be a significant improvement
in current market and property operating conditions resulting in a
significant increase in the value of the property before the joint venture
can share in sale or refinancing proceeds.
160 SPEAR STREET BUILDING
Title to the property was transferred to the lender in January 1996 in
full satisfaction of the loan secured by the property.
The property was classified as held for sale or disposition as of
January 1, 1996, and therefore, has not been subject to continued
depreciation. The accompanying consolidated financial statements include
$18,200,000 as the cumulative effect of an accounting change to record
value impairment and $23,254,162 of extraordinary gain on extinguishment of
debt upon the lender taking title to the property for the six months ended
June 30, 1996, and $258,038 and $2,977,602 of revenues and $155,927 and
$1,282,455 of operating expenses for the six months ended June 30, 1996 and
1995, respectively. The property had a net carrying value of $33,088,882
at December 31, 1995.
260 FRANKLIN STREET BUILDING
Occupancy of the property at June 30, 1996 has dropped to 95% from 98%
at year-end 1995 and in the remaining portion of 1996, the leases of
tenants occupying approximately 31,000 square feet (approximately 9% of the
property) at the property expire. There can be no assurance that these
leases will be renewed therefore significant costs related to re-leasing
this space may be incurred.
The long-term mortgage loan in the principal amount of approximately
$75,000,000 matured January 1, 1996. Therefore, 260 Franklin as of such
date, began submitting the net operating cash flow of the property to the
lender while seeking an extension or refinancing of the loan. However,
there can be no assurance that the joint venture will be able to obtain any
modification or extension. If 260 Franklin is unable to refinance or
extend the mortgage loan, the Partnership may decide not to commit any
significant additional funds. This may result in 260 Franklin and the
Partnership no longer having an ownership interest in the property. This
would result in 260 Franklin and the Partnership recognizing a gain for
financial reporting and Federal income tax purposes with no distributable
proceeds. The 260 Franklin venture recorded a provision for value
impairment of $17,400,000 as of January 1, 1996.
WELLS FARGO CENTER
The mortgage note secured by the property (with a balance of
$197,376,393 as of June 30, 1996), as well as the promissory note secured
by the Partnership's interest in the joint venture (with a balance of
$22,750,000 and accrued interest of $2,697,500 and $4,062,500 as of
December 31, 1995 and June 30, 1996, respectively) matured December 1,
1994. The Partnership and the joint venture have been in discussions with
the respective lenders regarding an extension of the mortgage note and the
promissory note. Such an extension would likely require a partial paydown
of the mortgage note from venture or Partnership funds. The venture
continues to make interest payments to the lender under the original terms
of the mortgage note and is required to escrow all available cash flow.
The Partnership has ceased making debt service payments on the promissory
note and an extension or refinancing with the lender is likely to be
dependent on the results of negotiations with the lender of the mortgage
note. Such negotiations could involve a restructuring or potential paydown
of the venture's obligations, however, no amounts will be contributed by
the venture or the Partnership unless there is a reasonable expectation of
recovery of such incremental amounts. There is no assurance that the joint
venture or the Partnership will be able to extend or refinance these notes.
In the absence of an extension or refinancing of the notes and due to the
uncertainty as to whether IBM will renew any of its remaining space, the
Partnership may decide not to commit any significant additional amounts to
the property. This would likely result in the Partnership no longer having
an ownership interest in the property, and in such event would result in a
gain for financial reporting and for Federal income tax purposes with no
corresponding distributable proceeds. The promissory note has been
classified as a current liability in the accompanying consolidated
financial statements.
RIVEREDGE PLACE BUILDING
The Partnership ceased making monthly debt service payments effective
July 1, 1992. Since the Partnership ceased making monthly debt service
payments, cash flow generated by the property will likely be remitted to
the lender and therefore these amounts (approximately $5.0 million and $4.0
million at June 30, 1996 and December 31, 1995, respectively) have been
included in other restricted securities in the accompanying consolidated
financial statements. If the Partnership's attempt for the mortgage note
restructuring is not successful, the Partnership would likely decide, based
upon current market conditions and other considerations relating to the
property and the Partnership's portfolio, not to commit significant
additional amounts to the property. This would result in the Partnership
no longer having an ownership interest in the property and would result in
the recognition of a net gain for financial reporting and Federal income
tax purposes without any corresponding distributable proceeds. As of June
30, 1996, the amount of principal and interest payments in arrears is
approximately $15,898,000. The loan has been classified at June 30, 1996
and December 31, 1995 as a current liability in the accompanying
consolidated financial statements.
21900 BURBANK BUILDING
In March 1996, the lender realized upon its security and took title to
the property in full satisfaction of the loan secured by the property.
The property was classified as held for sale or disposition as of
January 1, 1996, and therefore, has not been subject to continued
depreciation. The accompanying consolidated financial statements include
$4,000,000 as cumulative effect of an accounting change to record value
impairment and $4,619,364 of extraordinary gain on extinguishment of debt
upon the lender taking title to the property for the six months ended June
30, 1996, and $395,802 and $1,128,912 of revenues and $222,823 and $385,702
of operating expenses for the six months ended June 30, 1996 and 1995,
respectively. The property had a net carrying value of $11,215,932 at
December 31, 1995.
NEWPARK MALL
As a result of the recent acquisition by Federated Department Stores
of the company which owns the Emporium Capwell store at NewPark Mall,
Federated which also owns the Macy's store at NewPark has approached the
joint venture regarding the possible sale of the Emporium building to the
joint venture. This would be accompanied by the closing of the Emporium
Capwell operations at the mall. In the event that the joint venture
decides to proceed with this transaction, the Partnership would utilize
funds in reserve to pay for its share of the costs of acquiring the
building and re-merchandising the store with a replacement operator.
In response to uncertainty concerning the Partnership's ability to
recover the net carrying value of the NewPark Mall investment property
through future operations or sale and since the Partnership has shortened
its intended holding period for this investment to not later than 1999, the
NewPark venture, in accordance with SFAS 121, recorded a provision for
value impairment at June 30, 1996 in the amount of $8,600,000 of which the
Partnership's share is $3,870,000. Such provision was recorded to reduce
the venture's carrying value of the investment property to its estimated
fair market value.
WOODLAND HILLS APARTMENTS
On May 22, 1996, the Partnership sold the Woodland Hills apartment
complex to an unaffiliated third party for $12,225,000 less selling costs
of approximately $282,000. A portion of the sales proceeds was utilized to
retire the mortgage debt with an outstanding balance of approximately
$8,175,000. As a result of the sale, the Partnership recognized a gain of
approximately $1,500,000 for financial reporting purposes at June 30, 1996
and expects to recognize a gain of approximately $5,600,000 for Federal
income tax purposes.
In February 1991, the Partnership had entered into an agreement with
the seller of Woodland Hills Apartments. Under the terms of the agreement,
the seller canceled its wrap-around mortgage note receivable from the
Partnership and assumed management of the property. Effective February 1,
1991 the seller/manager agreed to guarantee a level of cash flow from the
property equal to the underlying debt service in return for a subordinated
level of cash flow (payable as an incentive management fee) from operations
and sale or refinancing of the property. As a result of the sale of the
property in May 1996, the seller/manager is entitled to receive payment of
approximately $1,730,000 which is included in accounts payable at June 30,
1996. The Partnership has reduced its recognized gain by such amount.
The property was classified as held for sale or disposition as of
January 1, 1996 and therefore has not been subject to continued
depreciation. The accompanying consolidated financial statements include
$778,954 and $955,855 of revenues and $375,467 and $370,287 of operating
expenses for the six months ended June 30, 1996 and 1995. The property had
a net carrying value of approximately $8,375,000 at December 31, 1995.
ADJUSTMENTS
In the opinion of the Corporate General Partner, all adjustments
(consisting solely of normal recurring adjustments) necessary for a fair
presentation have been made to the accompanying figures as of June 30, 1996
and for the three and six months ended June 30, 1996 and 1995.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Reference is made to the notes to the accompanying financial
statements for additional information concerning the Partnership's
investments.
During the second quarter some of the Limited Partners in the
Partnership received from an unaffiliated third party an unsolicited tender
offer to purchase up to 21,591 Interests in the Partnership at between $40
and $50 per Interest. The Partnership recommended against acceptance of
this offer on the basis that, among other things, the offer price was
inadequate. In June such offer expired with approximately 5,227 Interests
being purchased by such unaffiliated third party pursuant to such offer.
In addition, the Partnership has, from time to time, received inquires from
other third parties that may consider making offers for Interests,
including requests for the list of Limited Partners in the Partnership.
These inquiries are generally preliminary in nature. There is no assurance
that any other third party will commence an offer for Interests, the terms
of any such offer or whether any such offer, if made, will be consummated,
amended or withdrawn. The board of directors of JMB Realty Corporation
("JMB") the corporate general partner of the Partnership, has established a
special committee (the "Special Committee") consisting of certain directors
of JMB to deal with all matters relating to tender offers for Interests in
the Partnership, including any and all responses to such tender offers.
The Special Committee has retained independent counsel to advise it in
connection with any potential tender offer for Interests and has retained
Lehman Brothers Inc. as financial advisor to assist the Special Committee
in evaluating and responding to any additional potential tender offers for
Interests. Expenses incurred in connection with the previous tender offers
and additional potential tender offer for Interests are expected to
increase Partnership operating expenses in the third quarter.
After reviewing the remaining properties and their competitive
marketplace, the General Partners of the Partnership expect to be able to
liquidate the remaining assets as quickly as practicable. Therefore, the
affairs of the Partnership are expected to be wound up no later than 1999
(sooner if the properties are sold or disposed in the nearer term), barring
unforeseen economic developments.
Although the Partnership expects to distribute sales proceeds from the
disposition of certain of its remaining investment properties, aggregate
distributions of net cash flow and sale and refinancing proceeds received
by the Limited Partners over the entire term of the Partnerships will be
substantially less than half of their original investment. However, in
connection with sales or other disposition (including transfers of title to
lenders) of properties (or interests therein) owned by the Partnership or
its joint ventures, the Limited Partners may be allocated substantial gain
for Federal income tax purposes, regardless of whether any proceeds are
distributable from such sales or other dispositions.
RESULTS OF OPERATIONS
Significant fluctuations in the accompanying consolidated financial
statements are due to the respective lenders obtaining legal title to the
160 Spear Street and 21900 Burbank Buildings and the sale of the Dunwoody
Crossing and Woodland Hills apartment complexes in 1996. The Partnership
is considering using a portion of these funds for its share of the costs
for a possible acquisition of the Emporium Capwell store at NewPark Mall
and re-merchandising the store with a replacement operator.
The increase in cash at June 30, 1996 as compared to December 31, 1995
is primarily due to the temporary investment of sales proceeds from the
sale of Dunwoody Crossing and Woodland Hills apartments.
The increase in other restricted securities at June 30, 1996 as
compared to December 31, 1995 is due to the continued generation of cash
flow from the RiverEdge Place office building which is anticipated to be
remitted to the property's lender.
The increase in venture partners' deficits in ventures at June 30,
1996 as compared to December 31, 1995 and the increase in venture partners'
share of ventures' operations for the six months ended June 30, 1996 as
compared to the six months ended June 30, 1995 are primarily due to the
provision for value impairment of $17,400,000 ($5,229,000 to the
Partnership) recorded at the 260 Franklin Street Building, partially offset
by the lender obtaining legal title to the 160 Spear Street Building in
January 1996.
The increase in accounts payable at June 30, 1996 as compared to
December 31, 1995 is primarily due to $1,730,016 payable to the manager at
Woodland Hills apartments from sales proceeds.
The increase in accrued interest payable at June 30, 1996 as compared
to December 31, 1995 is primarily due to the continued accrual of unpaid
interest on the mortgage loan secured by the RiverEdge Place investment
property and on the promissory note secured by the Partnership's interest
in the South Tower venture partially offset by the lenders obtaining legal
title to the 160 Spear Street and 21900 Burbank Buildings.
The increase in interest income for the three and six months ended
June 30, 1996 as compared to the three and six months ended June 30, 1995
is primarily due to a higher cash balance on hand and higher effective
yields being earned on U.S. Government obligations held by the Partnership
during 1996.
The increase in Partnership's share of loss from unconsolidated
ventures for the three and six months ended June 30, 1996 as compared to
the three and six months ended June 30, 1995 is primarily due to a
provision for value impairment recorded at NewPark Mall at June 30, 1996 in
the amount of $8,600,000 of which the Partnership's share is $3,870,000.
The provision for value impairment in 1996 relates to reductions in
the carrying values of the Cal Plaza property ($7,200,000), 260 Franklin
Street Building ($17,400,000), and Springbrook Shopping Center
($1,400,000).
The gain on sale of interest in unconsolidated ventures of $98,871 and
$196,029 for the three and six months ended June 30, 1996, respectively,
relates to the receipt of proceeds from the sale of JMB/Owings interest in
the Owings Mills Limited Partnership. The gain on sale of interest in
unconsolidated ventures of $6,336,896 and $6,942,692 for the three and six
months ended June 30, 1995, respectively, related to the receipt of
proceeds from the sale of the JMB/Owings interest and gain from the sale of
the Partnership's interest in the Eastridge Development Company on June 30,
1995.
The gain on sale of investment properties of $8,835,590 for the three
and six months ended June 30, 1996 relates to the recognition of gain from
the sale of the Woodland Hills and Dunwoody apartment complexes of
$1,571,181 and $7,264,409, respectively, in 1996.
The extraordinary item - gain on forgiveness of indebtedness of
$27,873,526 represents the 1996 retirement of the mortgage notes on the 160
Spear Street ($23,254,162) and 21900 Burbank Buildings ($4,619,364) in full
satisfaction upon transfer of title to the properties to the respective
lenders.
The extraordinary item - prepayment penalties represents the costs
incurred on the early extinguishment of debt on the Woodland Hills and
Dunwoody Crossing mortgage notes payable.
The cumulative effect of an accounting change of $22,200,000
represents provisions in 1996 to record value impairment on the 160 Spear
Street ($18,200,000) and 21900 Burbank Buildings ($4,000,000) in compliance
with SFAS 121.
The increase in general and administrative expenses for the six months
ended June 30, 1996 as compared to the six months ended June 30, 1995 is
primarily due to an increase in reimbursable costs to affiliates of the
General Partners in 1996 and the recognition of certain additional prior
year reimbursable costs to such affiliates.
PART II. OTHER INFORMATION
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
The mortgage note secured by the Wells Fargo Center as well as the
promissory note secured by the Partnership's interest in the joint venture
matured December 1, 1994. In addition, in July, 1992, the Partnership
ceased making debt service payments on the mortgage loan secured by the
RiverEdge Place Building. Reference is made to the respective Notes for
these properties in the Notes to Consolidated Financial Statements filed
with this quarterly report for discussion of the defaults under these
loans, which are hereby incorporated herein by reference. The mortgage
loan in the amount of approximately $88,000,000 (including accrued
interest) secured by 260 Franklin Street matured on January 1, 1996. 260
Franklin, as of such date suspended debt service on the loan and began
submitting the net cash flow of the property to the lender (Teachers
Insurance and Annuity Association of America) while seeking an extension or
refinancing of the loan. As of June 30, 1996, approximately $422,740 of
interest on the mortgage loan was in arrears.
In June 1996, the Partnership ceased making the scheduled monthly debt
service payments on the mortgage loan secured by the Springbrook Shopping
Center. As of June 30, 1996, the mortgage loan had a balance of
approximately $11,000,000 (including approximately $246,000 of accrued
interest) classified as a current liability in the accompanying
consolidated financial statements.
<TABLE>
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
OCCUPANCY
The following is a listing of approximate occupancy levels by quarter for the Partnership's investment
properties.
<CAPTION>
1995 1996
-------------------------------------- ------------------------------
At At At At At At At At
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. 900 Third Avenue Building
New York, New York . . . . . 94% 96% 96% 97% 97% 98%
2. Piper Jaffray Tower
Minneapolis, Minnesota . . . 97% 97% 98% 98% 98% 98%
3. RiverEdge Place
Fulton County (Atlanta),
Georgia. . . . . . . . . . . 88% 88% 88% 89% 90% 91%
4. Wells Fargo Center
- IBM Tower
Los Angeles, California. . . 96% 96% 96% 95% 95% 97%
5. Woodland Hills Apartments
DeKalb County (Atlanta),
Georgia. . . . . . . . . . . 99% 99% 99% 100% 97% N/A
6. 160 Spear Street Building
San Francisco, California. . 89% 77% 76% 56% N/A N/A
7. 21900 Burbank Boulevard
Building
Los Angeles (Woodland
Hills), California . . . . . 96% 94% 96% 96% N/A N/A
8. 260 Franklin Street Building
Boston, Massachusetts. . . . 99% 99% 99% 98% 96% 95%
9. California Plaza
Walnut Creek, California . . 95% 94% 93% 90% 91% 89%
10. Dunwoody Crossing
(Phase I, II and III)
Apartments
DeKalb County (Atlanta),
Georgia. . . . . . . . . . . 93% 93% 93% 91% 90% N/A
11. NewPark Mall
Newark (Alameda County),
California . . . . . . . . . 80% 80% 80% 80% 79% 79%
12. Springbrook Shopping Center
Bloomingdale, Illinois . . . 72% 72% 70% 66% 69% 55%
<FN>
- --------------------
An N/A indicates that the property, or the Partnership's interest in
the property was sold or was not owned by the Partnership at the end of the
period.
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3. Amended and Restated Agreement of Limited Partnership,
is hereby incorporated by reference to Exhibit 3 to the Partnership's Form
10-K (File No. 0-16111) for December 31, 1992 dated March 19, 1993.
4-A. Assignment Agreement set forth as Exhibit B to the
Prospectus is hereby incorporated herein by reference to Exhibit 4-A to the
Partnership's report for December 31, 1992 on Form 10-K (File No. 0-16111)
dated March 19, 1993.
4-B. Documents relating to the modification of the mortgage
loan secured by 260 Franklin Street Building are hereby incorporated herein
by reference to Exhibit 4-B to the Partnership's report for December 31,
1992 on Form 10-K (File No. 0-16111) dated March 19, 1993.
4-C. Forbearance agreement relating to the modification of
the mortgage loan secured by NewPark Mall dated October 1995 is
incorporated herein by reference to the Partnership's Report for September
30, 1995 on Form 10-Q (File No. 0-16111) dated November 9, 1995.
10-A. Escrow Deposit Agreement is hereby incorporated herein
by reference to the Partnership Registration Statement on Form S-11 (File
No. 2-95382) dated January 18, 1985.
10-B. Acquisition documents relating to the purchase by the
Partnership of an interest in the 900 Third Avenue Building in New York,
New York, are hereby incorporated herein by reference to the Partnership's
Registration Statement on Form S-11 (File No. 2-95382) dated January 18,
1985.
10-C. Acquisition documents relating to the purchase by the
Partnership of an interest in the Piper Jaffray Tower in Minneapolis,
Minnesota, are hereby incorporated herein by reference to the Partnership's
Registration Statement on Form S-11 (File No. 2-95382) dated January 18,
1985.
10-D. Acquisition documents relating to the purchase by the
Partnership of an interest in the Crocker Center South Tower in Los
Angeles, California, are hereby incorporated herein by reference to the
Partnership's Registration Statement on Amendment No. 2 to Form S-11 (File
No. 2-95382) dated July 5, 1985.
10-E. Acquisition documents relating to the purchase by the
Partnership of an interest in the 260 Franklin Street Building in Boston,
Massachusetts, are hereby incorporated herein by reference to the Partner-
ship's Registration Statement on Post-Effective Amendment No. 4 to Form
S-11 (File No. 2-95382) dated April 30, 1986.
10-F. Acquisition documents relating to the purchase by the
Partnership of an interest in the California Plaza office building in
Walnut Creek, California are hereby incorporated herein by reference to the
Partnership's Registration Statement on Post-Effective Amendment No. 5 to
Form S-11 (File No. 2-95382) dated July 31, 1986.
10-G. Acquisition documents relating to the purchase by the
Partnership of the Springbrook Shopping Center in Bloomingdale, Illinois,
are hereby incorporated herein by reference to the Partnership's report for
December 31, 1989 on Form 10-K (File No. 0-16111) dated March 28, 1990.
10-H. Documents relating to the modification of the mortgage
loan secured by California Plaza are hereby incorporated herein by
reference to the Partnership's report for December 31, 1993 on Form 10-K
(File No. 0-16111) dated March 28, 1994.
10-I. Documents relating to the extension of the mortgage
loan secured by the 900 Third Building are incorporated herein by reference
to the Partnership's report for December 31, 1994 on Form 10-K (File No. 0-
16111) dated March 27, 1995.
10-J. Lockbox and forbearance agreements related to the
mortgage note secured by the Wells Fargo Building are incorporated herein
by reference to the Partnership's report for December 31, 1994 on Form 10-K
(File No. 0-16111) dated March 27, 1995.
10-K. Modification to Reserve Escrow Agreement relating to
the 260 Franklin Street Building is hereby incorporated by reference to the
Partnership's Report for June 30, 1995 on Form 10-Q (File No. 0-16111)
dated August 9, 1995.
27. Financial Data Schedule
---------------
(b) No reports on Form 8-K have been filed for the quarter
covered by this report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
BY: JMB Realty Corporation
(Corporate General Partner)
By: GAILEN J. HULL
Gailen J. Hull, Senior Vice President
Date: August 9, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person in the capacity
and on the date indicated.
GAILEN J. HULL
Gailen J. Hull, Principal Accounting Officer
Date: August 9, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 22,413,194
<SECURITIES> 0
<RECEIVABLES> 16,160,493
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 38,573,687
<PP&E> 179,767,275
<DEPRECIATION> 65,840,300
<TOTAL-ASSETS> 190,507,013
<CURRENT-LIABILITIES> 162,654,463
<BONDS> 59,792,568
<COMMON> 0
0
0
<OTHER-SE> (67,957,505)
<TOTAL-LIABILITY-AND-EQUITY>190,507,013
<SALES> 14,997,468
<TOTAL-REVENUES> 15,779,424
<CGS> 0
<TOTAL-COSTS> 9,761,954
<OTHER-EXPENSES> 1,153,711
<LOSS-PROVISION> 26,000,000
<INTEREST-EXPENSE> 12,027,940
<INCOME-PRETAX> (33,164,181)
<INCOME-TAX> (33,159,583)
<INCOME-CONTINUING> 0
<DISCONTINUED> 9,031,619
<EXTRAORDINARY> 27,487,324
<CHANGES> (22,200,000)
<NET-INCOME> (18,840,640)
<EPS-PRIMARY> (38.29)
<EPS-DILUTED> (38.29)
</TABLE>
