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
March 31, 1998 Commission file #0-16108
JMB INCOME PROPERTIES, LTD. - XII
(Exact name of registrant as specified in its charter)
Illinois 36-3337796
(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 [ ]
<PAGE>
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 . . . . . . . . . 13
PART II OTHER INFORMATION
Item 5. Other Information . . . . . . . . . . . . . 15
Item 6. Exhibits and Reports on Form 8-K. . . . . . 16
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1998 AND DECEMBER 31, 1997
(UNAUDITED)
ASSETS
------
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
------------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents. . . . . . . . . . . . . . . . . . $ 29,796,155 54,580,706
Rents and other receivables, net of allowance for
doubtful accounts of $7,918 at March 31,
1998 and $25,880 at December 31, 1997. . . . . . . . . . . 268,305 217,745
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . 50,870 179,879
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . 448,283 878,669
------------ -----------
Total current assets . . . . . . . . . . . . . . . . . 30,563,613 55,856,999
------------ -----------
Properties held for sale or disposition. . . . . . . . . . . 83,146,318 91,675,837
------------ -----------
Investment in unconsolidated ventures, at equity . . . . . . . 26,223,735 6,353,682
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . 4,913,815 5,000,125
Accrued rents receivable . . . . . . . . . . . . . . . . . . . 1,942,772 1,890,348
------------ -----------
$146,790,253 160,776,991
============ ===========
<PAGE>
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS
------------------------------------------
MARCH 31, DECEMBER 31,
1998 1997
------------- -----------
Current liabilities:
Current portion of long-term debt. . . . . . . . . . . . . . $ 520,149 507,202
Accounts payable . . . . . . . . . . . . . . . . . . . . . . 895,211 533,374
Accrued interest . . . . . . . . . . . . . . . . . . . . . . 481,854 482,884
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . 499,037 272,481
------------ -----------
Total current liabilities. . . . . . . . . . . . . . . 2,396,251 1,795,941
Tenant security deposits . . . . . . . . . . . . . . . . . . . 77,602 147,624
Long-term debt, less current portion . . . . . . . . . . . . . 56,588,530 63,123,525
------------ -----------
Commitments and contingencies
Total liabilities. . . . . . . . . . . . . . . . . . . 59,062,383 65,067,090
Venture partners' subordinated equity in ventures. . . . . . . 14,814,682 25,015,702
Partners' capital accounts:
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . . 11,123 11,123
Cumulative net earnings (losses) . . . . . . . . . . . . . 1,657,754 1,359,410
------------ -----------
1,668,877 1,370,533
------------ -----------
Limited partners (189,684 interests):
Capital contributions, net of offering costs . . . . . . . 171,306,452 171,306,452
Cumulative net earnings (losses) . . . . . . . . . . . . . 21,705,340 (3,091,192)
Cumulative cash distributions. . . . . . . . . . . . . . . (121,767,481) (98,891,594)
------------ -----------
71,244,311 69,323,666
------------ -----------
Total partners' capital accounts . . . . . . . . . . . 72,913,188 70,694,199
------------ -----------
$146,790,253 160,776,991
============ ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(UNAUDITED)
<CAPTION>
1998 1997
------------ -----------
<S> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,900,345 6,898,110
Interest income. . . . . . . . . . . . . . . . . . . . . . . . . 561,054 310,288
Gain on sale of investment property. . . . . . . . . . . . . . . 3,947,247 --
----------- ----------
9,408,646 7,208,398
----------- ----------
Expenses:
Mortgage and other interest. . . . . . . . . . . . . . . . . . . 1,418,020 1,557,394
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . -- 163,118
Property operating expenses. . . . . . . . . . . . . . . . . . . 1,555,391 2,493,304
Professional services. . . . . . . . . . . . . . . . . . . . . . 114,231 76,517
Amortization of deferred expenses. . . . . . . . . . . . . . . . 126,931 276,026
General and administrative . . . . . . . . . . . . . . . . . . . 158,872 112,112
----------- ----------
3,373,445 4,678,471
----------- ----------
6,035,201 2,529,927
Partnership's share of operations of
unconsolidated venture . . . . . . . . . . . . . . . . . . . . . 302,241 339,344
Partnership's share of gain on sale of investment
properties of unconsolidated venture. . . . . . . . . . . . . . 20,826,930 --
Venture partners' share of ventures' operations. . . . . . . . . . (810,379) (921,622)
----------- ----------
Earnings (loss) before Partnership's share of
extraordinary item from unconsolidated venture . . . . . 26,353,993 1,947,649
Partnership's share of extraordinary item from unconsolidated
venture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,259,117) --
----------- ----------
Net earnings (loss). . . . . . . . . . . . . . . . . . . . $25,094,876 1,947,649
=========== ==========
<PAGE>
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED
1998 1997
------------ -----------
Net earnings (loss) per
limited partnership interest:
Earnings (loss) before gain on sale of investment
properties and Partnership's share of extraordinary
item from unconsolidated venture . . . . . . . . . . . $ 8.00 9.86
Gain on sale of investment properties. . . . . . . . . . 129.30 --
Partnership's share of extraordinary item from
unconsolidated venture . . . . . . . . . . . . . . . . 6.57 --
----------- ----------
Net earnings (loss). . . . . . . . . . . . . . . . . $ 143.87 9.86
=========== ==========
Cash distributions per
limited partnership interest . . . . . . . . . . . . . . $ 120.00 --
=========== ==========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(UNAUDITED)
<CAPTION> 1998 1997
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss). . . . . . . . . . . . . . . . . . . . . . . $25,094,876 1,947,649
Items not requiring (providing) cash or cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . -- 163,118
Amortization of deferred expenses. . . . . . . . . . . . . . . 126,931 276,026
Partnership's share of operations of unconsolidated
venture. . . . . . . . . . . . . . . . . . . . . . . . . . . (302,241) (339,344)
Partnership's share of gain on sale of investment
properties of unconsolidated venture . . . . . . . . . . . . (20,826,930) --
Venture partners' share of ventures' operations. . . . . . . . 810,379 921,622
Gain on sale of investment property. . . . . . . . . . . . . . (3,947,247) --
Partnership's share of extraordinary item from
unconsolidated venture . . . . . . . . . . . . . . . . . . . 1,259,117 --
Changes in:
Rents and other receivables. . . . . . . . . . . . . . . . . . (50,560) (223,300)
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . 129,009 (94,459)
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . 430,386 (75,647)
Accrued rents receivable . . . . . . . . . . . . . . . . . . . (71,938) (159,105)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . 361,837 (36,322)
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . (1,030) 33,730
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . . 226,556 (515,202)
Tenant security deposits . . . . . . . . . . . . . . . . . . . (70,022) 37,655
------------ -----------
Net cash provided by (used in) operating activities. . . . 3,169,123 1,936,421
------------ -----------
Cash flows from investing activities:
Additions to investment properties . . . . . . . . . . . . . . . (392,402) (578,005)
Cash proceeds from sale of investment property . . . . . . . . . 6,499,949 --
Payment of deferred expenses . . . . . . . . . . . . . . . . . . (51,887) (138,787)
------------ -----------
Net cash provided by (used in) investing activities. . . . 6,055,660 (716,792)
------------ -----------
<PAGE>
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1998 1997
------------ -----------
Cash flows from financing activities:
Principal payments on long-term debt . . . . . . . . . . . . . . (122,048) (110,343)
Distributions to venture partners. . . . . . . . . . . . . . . . (11,011,399) (1,302,000)
Distributions to limited partners. . . . . . . . . . . . . . . . (22,875,887) --
------------ -----------
Net cash provided by (used in) financing activities. . . . (34,009,334) (1,412,343)
------------ -----------
Net increase (decrease) in cash and cash equivalents . . . (24,784,551) (192,714)
Cash and cash equivalents, beginning of year . . . . . . . 54,580,706 22,821,808
------------ -----------
Cash and cash equivalents, end of period . . . . . . . . .$ 29,796,155 22,629,094
============ ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . . .$ 1,419,050 1,523,664
============ ===========
Non-cash investing and financing activities:
Total sales proceeds from sale of investment property,
net of selling expenses. . . . . . . . . . . . . . . . . . .$ 12,959,625 --
Principal balance due on mortgage payable. . . . . . . . . . . (6,400,000) --
Closing costs payable. . . . . . . . . . . . . . . . . . . . . (59,676) --
------------ -----------
Cash proceeds from sale of investment property,
net of selling expenses. . . . . . . . . . . . . . . . .$ 6,499,949 --
============ ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1998 AND 1997
(UNAUDITED)
GENERAL
Readers of this quarterly report should refer to the Partnership's
audited financial statements for the fiscal year ended December 31, 1997
which are included in the Partnership's 1997 Annual Report, as certain
footnote disclosures which would substantially duplicate those contained in
such audited financial statements have been omitted from this report.
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 those
estimates.
The Partnership adopted Statement of Financial Accounting Standards
No. 121 ("SFAS 121") "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of" as required in the first
quarter of 1996. The Partnership's policy is to consider a property to be
held for sale or disposition when the Partnership has committed to a plan
to sell or dispose of such property and active marketing activity has
commenced or is expected to commence in the near term. In accordance with
SFAS 121, any properties identified as "held for sale or disposition" are
no longer depreciated.
As of March 31, 1998, the Partnership and its consolidated ventures
have or have previously committed to plans to sell or dispose of all their
remaining investment properties. Accordingly, all consolidated properties
have been classified as held for sale or disposition in the accompanying
consolidated financial statements as of the respective date of such plan's
adoption. The results of operations, net of venture partners' share, for
the three months ended March 31, 1998 and 1997 for consolidated properties
classified as held for sale or disposition or sold or disposed of during
the past two years were $1,122,782 and $1,577,621, respectively. In
addition, the accompanying consolidated financial statements include
$302,241 and $339,344, respectively, of the Partnership's share of total
property operations of $604,482 and $678,688 for the three months ended
March 31, 1998 and 1997, respectively, for unconsolidated properties which
are held for sale or disposition or have been sold or disposed of during
the past two years.
<PAGE>
TRANSACTIONS WITH AFFILIATES
The Partnership, pursuant to the Partnership Agreement, is permitted
to engage in various transactions involving the Managing General Partner
and its affiliates, including the reimbursement for salaries and salary-
related expenses of its employees, 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 March 31, 1998 and for the three months ended
March 31, 1998 and 1997 were as follows:
Unpaid at
March 31,
1998 1997 1998
-------- ------ -------------
Property management
and leasing fees. . . . . $ 3,759 21,470 --
Reimbursement (at cost)
for out-of-pocket
salary and salary-
related expenses
related to the on-site
and other costs for the
Partnership and its
investment properties . . 18,995 14,530 11,956
-------- ------- ------
$ 22,754 36,000 11,956
======== ======= ======
Certain of the Partnership's properties were managed by affiliates of
the General Partners or their assignees for fees computed as a percentage
of certain rents received by the properties.
During 1994, certain officers and directors of the Managing General
Partner acquired interests in a company which provides certain property
management services to a property that was owned by the Partnership. The
fees earned by such company from the Partnership for the three months ended
March 31, 1998 and 1997 were approximately $5,400 and $6,800, respectively,
all of which has been paid at March 31, 1998. As such property has been
sold, no further fees are expected to be paid by the Partnership to such
company.
In accordance with the subordination requirements of the Partnership
Agreement, the General Partners have deferred payment of their
distributions of net cash flow from the Partnership. The amount of such
deferred distributions was approximately $8,685,000 as of March 31, 1998.
The Partnership does not expect that the subordination requirements of the
Partnership Agreement will be satisfied to permit payment of the majority
of these amounts. These amounts do not bear interest.
40 BROAD STREET
On December 30, 1997, the Partnership, through a joint venture
partnership (the "Affiliated Joint Venture") with JMB Income Properties,
Ltd. - X (a partnership sponsored by the Managing General Partner of the
Partnership), sold the land, building, related improvements and personal
property of the 40 Broad Street office building to an unaffiliated third
party for a sale price of $34,735,000 (before selling costs). The sale
resulted in a gain of $20,532,803 (due to provisions for value impairment
totaling approximately $52,000,000 recorded in 1990 and 1991, of which the
Partnership's share was approximately $35,651,000), of which the
Partnership's share was $14,077,289 and a loss of $9,703,264, of which the
Partnership's share was $6,652,557 in 1997 for financial reporting and
Federal income tax purposes, respectively. In addition, in connection with
the sale of the property, as is customary in such transactions, the
Affiliated Joint Venture agreed to certain representations, warranties and
<PAGE>
covenants with a stipulated survival period that expires December 1, 1998.
Although it is not expected, the Affiliated Joint Venture and the
Partnership may ultimately have some liability under such representations,
warranties and covenants, but such liability has been limited in the sale
agreement to actual damages in an amount not to exceed $1,500,000 in the
aggregate, of which the Partnership's share is limited to $1,028,400.
SAN JOSE
On February 24, 1998, San Jose sold the land, buildings, related
improvements and personal property of the remaining assets of the Park
Center Financial Plaza office complex to an unaffiliated third party for a
sale price of $76,195,000 (before selling costs and prorations). San Jose
received approximately $49,537,000 of net sale proceeds at closing (of
which the Partnership's share was approximately $24,768,500), after the
repayment by San Jose of the mortgage loans secured by the 170 Almaden, 150
Almaden and 185 Park Avenue buildings with a balance of approximately
$23,281,000, loan prepayment premiums of approximately $2,422,000 and
closing costs. The sale resulted in a gain in 1998 of approximately
$41,654,000 and $22,600,000 for financial reporting and Federal income tax
purposes, respectively, of which approximately $20,827,000 and $11,300,000
of gain was allocated to the Partnership, respectively. The gain for
financial reporting purposes includes the effects of previously recorded
provisions for value impairment for all buildings in the complex of
approximately $24,600,000, of which the Partnership's share was
approximately $12,300,000. In connection with the sale, San Jose recorded
in 1998 an extraordinary loss for financial reporting purposes totaling
approximately $2,518,000 as a result of loan prepayment premiums of
approximately $2,422,000 and the write-off of the deferred mortgage balance
of approximately $96,000, of which the Partnership's share is approximately
$1,211,000 and $48,000, respectively. In addition, in connection with the
sale of the property, as is customary in such transactions, San Jose agreed
to certain representations, warranties and covenants with a stipulated
survival period that expires November 15, 1998. Although it is not
expected, San Jose and the Partnership may ultimately have some liability
under such representations, warranties and covenants, but such liability
has been limited in the sale agreement to actual damages in an amount not
to exceed $2,500,000 in the aggregate, of which the Partnership's share is
limited to $1,250,000.
PLAZA HERMOSA SHOPPING CENTER
On January 13, 1998, the Partnership sold the land, building and
related improvements of the Plaza Hermosa Shopping Center to an
unaffiliated third party for a sale price of $13,335,000 (before selling
costs and prorations). The Partnership received approximately $6,500,000
of net sale proceeds at closing, after the repayment by the Partnership of
the property's bond financing with a balance of $6,400,000 and closing
costs. The sale resulted in a gain in 1998 of approximately $3,947,000 and
$2,356,000 for financial reporting and Federal income tax purposes,
respectively, all of which is allocable to the Partnership. In addition,
in connection with the sale of the property, as is customary in such
transactions, the Partnership agreed to certain representations, warranties
and covenants with a stipulated survival period that expires September 15,
1998. Although it is not expected, the Partnership may ultimately have
some liability under such representations, warranties and covenants, but
such liability has been limited in the sale agreement to actual damages in
an amount not to exceed $800,000 in the aggregate.
TOPANGA PLAZA
Montgomery Ward, a major department store which owns its own facility,
filed for bankruptcy protection pursuant to Chapter 11 of the Federal
bankruptcy code on July 7, 1997. The store continues to operate and
fulfill its obligations under its operating agreement. Topanga is
considering the possibility of purchasing the Ward store to protect the
value of the shopping center and the Partnership has reserved cash to fund
its portion of any purchase. However, there is no assurance that any such
transaction will occur.
<PAGE>
In April, 1998, Topanga made a distribution of operating cash flow for
1998 of $2,000,000 of which the Partnership's share was $1,160,000.
The Topanga venture committed to a plan to sell the property and
therefore classified the property as held for sale as of December 31, 1996.
The property has no longer been subject to continued depreciation beyond
such date.
The Partnership is currently in discussions with the joint venture
partner to explore the possibility of the joint venture partner buying the
Partnership's interest in Topanga. There can be no assurance that any
agreement will be reached in this regard.
Concurrent with the discussions described above, the Partnership has
caused the joint venture to commence marketing the property for sale to
third parties, as provided for under the Topanga venture agreement. Under
such agreement, the joint venture partner and the Partnership each have a
limited right of first refusal to purchase the other's interest if a third
party offer is tendered to the other partner, which could have the effect
of lengthening the time necessary to effect a sale or discouraging offers
for the property. There can be no assurance that any sale transaction will
occur.
UNCONSOLIDATED VENTURES - SUMMARY INFORMATION
The summary income statement information for JMB/San Jose Associates
for the three months ended March 31, 1998 and 1997 is as follows:
1998 1997
---------- ----------
Total income. . . . . . $ 1,887,310 1,958,866
=========== ==========
Operating income. . . . $ 604,482 678,688
=========== ==========
Net earnings to the
Partnership . . . . . $ 302,241 339,344
=========== ==========
Partnership's share
of gain on sale . . . $20,826,930 --
=========== ==========
Partnership's share
of extraordinary item $(1,259,117) --
=========== ==========
ADJUSTMENTS
In the opinion of the Managing General Partner, all adjustments (con-
sisting solely of normal recurring adjustments) necessary for a fair
presentation have been made to the accompanying figures as of March 31,
1998 and for the three months ended March 31, 1998 and 1997.
<PAGE>
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 certain of the
Partnership's investments.
During 1996, 1997 and early 1998, some of the Limited Partners in the
Partnership received from unaffiliated third parties unsolicited tender
offers to purchase up to 4.9% of the Interests in the Partnership at
between $150 and $475 per Interest. The Partnership recommended against
acceptance of these offers on the basis that, among other things, the offer
prices were inadequate. All of such offers have expired. As of the date
of this report, the Partnership is aware that 7.87% of the Interests have
been purchased by such unaffiliated third parties either pursuant to such
tender offers or through negotiated purchases. The Partnership has been
notified that an unaffiliated third party intends to commence an offer for
up to 5,910 Interests (approximately 3.12% of the outstanding Interests)
for $375 per Interest. It is possible that other offers for Interests may
be made by unaffiliated third parties in the future, although 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 managing 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 offers 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.
As of March 31, 1998, the Partnership had consolidated cash and cash
equivalents of approximately $29,796,000 of which approximately $24,478,000
is held by the Partnership. Of the remaining $5,318,000 (held by the
Partnership's consolidated joint ventures), approximately $3,298,000
represents the Partnership's share of undistributed cash. During April
1998, $1,160,000 of such previously undistributed cash was received from
the Topanga venture. These funds are available for distribution to
partners, potential obligations related to representations and warranties
given pursuant to the sales of investment properties in 1997 and 1998 as
more fully described in the Notes, tenant and capital improvements, leasing
commissions, and other expenditures, including the Partnership's share of
the costs associated with a possible expansion and mall enhancement,
including a possible purchase of the Montgomery Ward store, at the Topanga
Plaza Shopping Center. As of March 31, 1998, there was approximately
$52,738,000 (of which the Partnership's share was approximately
$26,369,000) of undistributed cash at the Partnership's unconsolidated
venture which consisted of cash generated from operations and sale proceeds
related to the sale of the remaining assets of the Park Center Financial
Plaza office complex in February 1998 as more fully described in the Notes.
In May 1998, the Partnership expects to make a semi-annual
distribution of cash generated from operations of $5 per Interest and a
distribution of sale proceeds of $165 per Interest related to the sale in
1998 of the Plaza Hermosa and Park Center Financial Plaza investment
properties as more fully described in the Notes. Future distributions from
sales or property operations are expected to be through cash generated by
the Partnership's remaining investment property and through the sale of
such investment.
<PAGE>
After reviewing the remaining property and the marketplace in which it
operates, the General Partners of the Partnership expect to be able to
conduct an orderly liquidation of its remaining investment property as
quickly as practicable. Therefore, the affairs of the Partnership are
expected to be wound up no later than December 31, 1999, barring unforeseen
economic developments.
RESULTS OF OPERATIONS
Significant variances between periods reflected in the accompanying
consolidated financial statements not otherwise reported are primarily the
result of the sales of the 40 Broad Street office building and Plaza
Hermosa Shopping Center in December 1997 and January 1998, respectively.
The increase in investment in unconsolidated ventures, at equity at
March 31, 1998 as compared to December 31, 1997 is primarily due to
undistributed proceeds of approximately $49,537,000, of which the
Partnership's share is approximately $24,768,500, related to the sale in
1998 of the Park Center Financial Plaza investment property.
The increase in accounts payable at March 31, 1998 as compared to
December 31, 1997, is primarily due to an accrual in 1998 of approximately
$353,000 for tenant improvements incurred but not yet paid at the Topanga
Plaza investment property.
The increase in unearned rents at March 31, 1998 as compared to
December 31, 1997 is primarily due to the timing of rental receipts at the
Topanga Plaza investment property.
The increase in interest income for the three months ended March 31,
1998 as compared to the three months ended March 31, 1997 is primarily due
to the temporary investment of proceeds related to the 1997 sale of the 40
Broad Street office building, which were subsequently distributed to the
Limited Partners in February 1998, and the temporary investment of proceeds
related to the 1998 sale of the Plaza Hermosa Shopping Center, which are
expected to be distributed to the Limited Partners in May 1998.
The gain on sale of investment property of $3,947,247 in 1998 is the
gain on the sale of the Plaza Hermosa investment property in January 1998.
The decrease in depreciation expense for the three months ended March
31, 1998 as compared to the three months ended March 31, 1997 is primarily
due to the 40 Broad Street investment property being identified as held for
sale or disposition as of July 1, 1997, and therefore, no longer subject to
depreciation beyond such date.
The increase in general and administrative expenses for the three
months ended March 31, 1998 as compared to the three months ended March 31,
1997 is primarily attributable to an increase in reimbursable costs to
affiliates of the General Partners in 1998.
The Partnership's share of gain on sale of investment properties from
unconsolidated venture of $20,826,930 in 1998 is due to the gain recognized
on the sale of the remaining assets of the Park Center Financial Plaza
investment property in February 1998.
The Partnership's share of extraordinary loss from unconsolidated
venture of $1,259,117 in 1998 comprises loan prepayment premiums of
$1,211,062 and the write-off of the deferred mortgage balance of $48,055
resulting from the sale of the Park Center Financial Plaza investment
property in February 1998.
<PAGE>
<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 owned during 1998.
<CAPTION>
1997 1998
-------------------------------------------------------------
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. Park Center Financial
Plaza
San Jose, California . . . 86% 87% 87% 90% N/A
2. Topanga Plaza
Los Angeles, California. . 97% 98% 98% 98% 96%
3. Plaza Hermosa
Shopping Center
Hermosa Beach, California. 91% 91% 91% 91% N/A
<FN>
An "N/A" indicates that the property was sold and not owned by the Partnership at the end of the quarter.
</TABLE>
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3-A. The Prospectus of the Partnership dated August
23, 1985 as supplemented December 9, 1985 and January 10, pursuant to Rules
424 (b) and 424 (c), as filed with the Commission is hereby incorporated
herein by reference to Exhibit 3-A to the Partnership's Report for December
31, 1992 on Form 10-K (File No. 0-16108) dated March 19, 1993.
3-B. Amended and Restated Agreement of Limited
Partnership set forth as Exhibit A to the Prospectus, which agreement is
hereby incorporated herein by reference to Exhibit 3-B to the Partnership's
Report for December 31, 1992 on Form 10-K (File No. 0-16108) dated March
19, 1993.
3-C. Acknowledgement of rights and duties of the
General Partners of the Partnership between ABPP Associates, L.P. (a
successor Associated General Partner of the Partnership) and JMB Realty
Corporation as of December 31, 1995 is hereby incorporated herein by
reference to the Partnership's Report for June 30, 1996 on Form 10-Q (File
No. 0-16108) dated August 9, 1996.
4-A. Mortgage loan agreement between Topanga and
Connecticut General Life Insurance Company dated January 31, 1992 relating
to Topanga Plaza in Los Angeles, California 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. 0-16108) dated March 19, 1993.
4-B. Mortgage loan modification agreement between
Topanga and Connecticut General Life Insurance dated January 31, 1993
relating to Topanga Plaza in Los Angeles, California is hereby incorporated
herein by reference to Exhibit 4 of the Partnership's Report for September
30, 1993 on Form 10-Q (File No. 0-16108) dated November 11, 1993.
4-C. Letter of credit agreement between JMB Income
Properties, Ltd-XII and Dresdner Bank AG dated November 15, 1994 relating
to the letter of credit extension at Plaza Hermosa is hereby incorporated
herein by reference to the Partnership's Report on Form 10-K (File No. 0-
16108) dated March 27, 1995.
4-D. Mortgage loan agreement, Amended and Restated
Deed of Trust, Security Agreement with assignment of Rents and Fixture
Filing and Real Estate tax escrow and Security Agreement between San Jose
and Connecticut General Life Insurance Co. dated November 30, 1994 is
hereby incorporated herein by reference to the Partnership's Report on Form
10-K (File No. 0-16108) dated March 27, 1995.
<PAGE>
10-A. Acquisition documents including the venture
agreement relating to the purchase by the Partnership of Topanga Plaza in
Los Angeles, California, are hereby incorporated herein by reference to the
Partnership's Report on Form 8-K (File No. 0-16108) dated December 31,
1985.
10-B. Acquisition documents including the venture
agreement relating to the purchase by the Partnership of 40 Broad Street in
New York, New York, are hereby incorporated herein by reference to the
Partnership's Report on Form 8-K (File No. 0-16108) dated December 31,
1985.
10-C. Sale documents relating to the sale of the 40
Broad Street office building in New York, New York are hereby incorporated
by reference to the Partnership's report for December 30, 1997 on Form 8-K
(File No. 0-16108) dated January 14, 1998.
10-D. First Amendment to the Purchase-Sale Agreement
dated February 10, 1998 relating to the sale by San Jose of the Park Center
Financial Plaza office complex in San Jose, California between JMB/San Jose
Associates and Divco West Properties, LLC are hereby incorporated herein by
reference to the Partnership's report for December 31, 1997 on Form 10-K
(File No. 0-16108) dated March 25, 1998.
10-E. Purchase-Sale Agreement with exhibits dated
December 3, 1997 relating to the sale by San Jose of the Park Center
Financial Plaza office complex in San Jose, California between JMB/San Jose
Associates and Divco West Properties, LLC are hereby incorporated herein by
reference to the Partnership's report for December 31, 1997 on Form 10-K
(File No. 0-16108) dated March 25, 1998.
10-F. Purchase-Sale Agreement with amendments thereto
dated November 25, 1997 relating to the sale by the Partnership of the
Plaza Hermosa Shopping Center in Hermosa Beach, California between JMB
Income Properties, Ltd. - XII and Pacific Retail Trust are hereby
incorporated herein by reference to the Partnership's report for December
31, 1997 on Form 10-K (File No. 0-16108) dated March 25, 1998.
27. Financial Data Schedule
(b) No reports on Form 8-K have been filed during the last
quarter of the period covered by this report.
<PAGE>
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.
JMB INCOME PROPERTIES, LTD. - XII
BY: JMB Realty Corporation
(Managing General Partner)
By: GAILEN J. HULL
Gailen J. Hull, Senior Vice President
Date:May 13, 1998
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.
By: GAILEN J. HULL
Gailen J. Hull, Principal Accounting Officer
Date:May 13, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 29,796,155
<SECURITIES> 0
<RECEIVABLES> 767,458
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 30,563,613
<PP&E> 83,146,318
<DEPRECIATION> 0
<TOTAL-ASSETS> 146,790,253
<CURRENT-LIABILITIES> 2,396,251
<BONDS> 56,588,530
<COMMON> 0
0
0
<OTHER-SE> 72,913,188
<TOTAL-LIABILITY-AND-EQUITY>146,790,253
<SALES> 4,900,345
<TOTAL-REVENUES> 9,408,646
<CGS> 0
<TOTAL-COSTS> 1,682,322
<OTHER-EXPENSES> 273,103
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,418,020
<INCOME-PRETAX> 5,527,063
<INCOME-TAX> 0
<INCOME-CONTINUING> 5,527,063
<DISCONTINUED> 20,826,930
<EXTRAORDINARY> (1,259,117)
<CHANGES> 0
<NET-INCOME> 25,094,876
<EPS-PRIMARY> 143.87
<EPS-DILUTED> 143.87
</TABLE>
