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, 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
JUNE 30, 1998 AND DECEMBER 31, 1997
(UNAUDITED)
ASSETS
------
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
------------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents. . . . . . . . . . . . . . . . . . $ 22,606,608 54,580,706
Rents and other receivables, net of allowance for
doubtful accounts of $123,734 at June 30,
1998 and $25,880 at December 31, 1997. . . . . . . . . . . 164,394 217,745
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . -- 179,879
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . 453,247 878,669
------------ -----------
Total current assets . . . . . . . . . . . . . . . . . 23,224,249 55,856,999
------------ -----------
Properties held for sale or disposition. . . . . . . . . . . 83,151,271 91,675,837
------------ -----------
Investment in unconsolidated ventures, at equity . . . . . . . 1,465,931 6,353,682
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . 4,895,418 5,000,125
Accrued rents receivable . . . . . . . . . . . . . . . . . . . 2,014,709 1,890,348
------------ -----------
$114,751,578 160,776,991
============ ===========
<PAGE>
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS
------------------------------------------
JUNE 30, DECEMBER 31,
1998 1997
------------- -----------
Current liabilities:
Current portion of long-term debt. . . . . . . . . . . . . . $ 533,427 507,202
Accounts payable . . . . . . . . . . . . . . . . . . . . . . 489,162 533,374
Accrued interest . . . . . . . . . . . . . . . . . . . . . . 480,796 482,884
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . -- 272,481
------------ -----------
Total current liabilities. . . . . . . . . . . . . . . 1,503,385 1,795,941
Tenant security deposits . . . . . . . . . . . . . . . . . . . 68,867 147,624
Long-term debt, less current portion . . . . . . . . . . . . . 56,450,090 63,123,525
------------ -----------
Commitments and contingencies
Total liabilities. . . . . . . . . . . . . . . . . . . 58,022,342 65,067,090
Venture partners' subordinated equity in ventures. . . . . . . 14,665,925 25,015,702
Partners' capital accounts:
General partners:
Capital contributions. . . . . . . . . . . . . . . . . . . 11,123 11,123
Cumulative net earnings (losses) . . . . . . . . . . . . . 1,720,059 1,359,410
------------ -----------
1,731,182 1,370,533
------------ -----------
Limited partners (189,684 interests):
Capital contributions, net of offering costs . . . . . . . 171,306,452 171,306,452
Cumulative net earnings (losses) . . . . . . . . . . . . . 23,200,666 (3,091,192)
Cumulative cash distributions. . . . . . . . . . . . . . . (154,174,989) (98,891,594)
------------ -----------
40,332,129 69,323,666
------------ -----------
Total partners' capital accounts . . . . . . . . . . . 42,063,311 70,694,199
------------ -----------
$114,751,578 160,776,991
============ ===========
<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 AND SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
----------------------------------------------------
1998 1997 1998 1997
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . $ 4,576,323 5,776,565 9,476,668 12,674,675
Interest income. . . . . . . . . . . . . 421,948 289,035 983,002 599,323
Gain on sale of investment property. . . -- -- 3,947,247 --
----------- ---------- ---------- ----------
4,998,271 6,065,600 14,406,917 13,273,998
----------- ---------- ---------- ----------
Expenses:
Mortgage and other interest. . . . . . . 1,439,025 1,487,344 2,857,045 3,044,738
Depreciation . . . . . . . . . . . . . . -- 165,375 -- 328,493
Property operating expenses. . . . . . . 1,299,472 2,228,212 2,854,863 4,721,516
Professional services. . . . . . . . . . 22,541 92,831 136,772 169,348
Amortization of deferred expenses. . . . 124,208 302,465 251,139 578,491
General and administrative . . . . . . . 106,345 167,640 265,217 279,752
----------- ---------- ---------- ----------
2,991,591 4,443,867 6,365,036 9,122,338
----------- ---------- ---------- ----------
2,006,680 1,621,733 8,041,881 4,151,660
Partnership's share of operations of
unconsolidated venture . . . . . . . . . 242,196 448,849 544,437 788,193
Partnership's share of gain on sale
of investment properties of
unconsolidated venture . . . . . . . . . -- -- 20,826,930 --
Venture partners' share of
ventures' operations . . . . . . . . . . (691,244) (653,541) (1,501,623) (1,575,163)
----------- ---------- ---------- ----------
Earnings (loss) before Partnership's
share of extraordinary item from
unconsolidated venture . . . . . 1,557,632 1,417,041 27,911,625 3,364,690
Partnership's share of extraordinary
item from unconsolidated venture . . . . -- -- (1,259,118) --
----------- ---------- ---------- ----------
Net earnings (loss). . . . . . . . $ 1,557,632 1,417,041 26,652,507 3,364,690
=========== ========== ========== ==========
<PAGE>
JMB INCOME PROPERTIES, LTD. - XII
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
----------------------------------------------------
1998 1997 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 . . . . $ 7.88 7.17 15.88 17.03
Gain on sale of investment
properties . . . . . . . . . . -- -- 129.30 --
Partnership's share of extra-
ordinary item from
unconsolidated venture . . . . -- -- (6.57) --
----------- ---------- ---------- ----------
Net earnings (loss). . . . . $ 7.88 7.17 138.61 17.03
=========== ========== ========== ==========
Cash distributions per
limited partnership interest . . $ 170.00 5.00 290.00 5.00
=========== ========== ========== ==========
<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
SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
<CAPTION> 1998 1997
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss). . . . . . . . . . . . . . . . . . . . . . . $26,652,507 3,364,690
Items not requiring (providing) cash or cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . -- 328,493
Amortization of deferred expenses. . . . . . . . . . . . . . . 251,139 578,491
Partnership's share of operations of unconsolidated
venture. . . . . . . . . . . . . . . . . . . . . . . . . . . (544,437) (788,193)
Partnership's share of gain on sale of investment
properties of unconsolidated venture . . . . . . . . . . . . (20,826,930) --
Venture partners' share of ventures' operations. . . . . . . . 1,501,623 1,575,163
Gain on sale of investment property. . . . . . . . . . . . . . (3,947,247) --
Partnership's share of extraordinary item from
unconsolidated venture . . . . . . . . . . . . . . . . . . . 1,259,118 --
Changes in:
Rents and other receivables. . . . . . . . . . . . . . . . . . 53,351 236,943
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . 179,879 273,865
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . 425,422 (94,267)
Accrued rents receivable . . . . . . . . . . . . . . . . . . . (143,875) (304,578)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . (44,212) (188,284)
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . (2,088) (1,102)
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . . (272,481) (139,314)
Tenant security deposits . . . . . . . . . . . . . . . . . . . (78,757) 11,472
------------ -----------
Net cash provided by (used in) operating activities. . . . 4,463,012 4,853,379
------------ -----------
Cash flows from investing activities:
Additions to investment properties . . . . . . . . . . . . . . . (397,355) (690,341)
Partnership's distributions from unconsolidated venture. . . . . 25,000,000 --
Cash proceeds from sale of investment property . . . . . . . . . 6,499,949 --
Payment of deferred expenses . . . . . . . . . . . . . . . . . . (157,699) (225,891)
------------ -----------
Net cash provided by (used in) investing activities. . . . 30,944,895 (916,232)
------------ -----------
<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 . . . . . . . . . . . . . . (247,210) (223,501)
Distributions to venture partners. . . . . . . . . . . . . . . . (11,851,400) (1,722,000)
Distributions to limited partners. . . . . . . . . . . . . . . . (55,283,395) (948,420)
------------ -----------
Net cash provided by (used in) financing activities. . . . (67,382,005) (2,893,921)
------------ -----------
Net increase (decrease) in cash and cash equivalents . . . (31,974,098) 1,043,226
Cash and cash equivalents, beginning of year . . . . . . . 54,580,706 22,821,808
------------ -----------
Cash and cash equivalents, end of period . . . . . . . . .$ 22,606,608 23,865,034
============ ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest. . . . . . . . . . . .$ 2,859,133 3,045,840
============ ===========
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
JUNE 30, 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 June 30, 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 six months ended June 30, 1998 and 1997 for consolidated properties
classified as held for sale or disposition or sold or disposed of during
the past two years were $2,205,560 and $2,570,868, respectively. In
addition, the accompanying consolidated financial statements include
$544,437 and $788,193, respectively, of the Partnership's share of total
property operations of $1,088,874 and $1,576,386 for the six months ended
June 30, 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 June 30, 1998 and for the six months ended June 30,
1998 and 1997 were as follows:
Unpaid at
June 30,
1998 1997 1998
-------- ------ -------------
Property management
and leasing fees. . . . . $ 4,122 45,166 --
Insurance commissions. . . 45,282 20,382 --
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 . . 37,990 29,060 4,834
-------- ------- ------
$ 87,394 94,608 4,834
======== ======= ======
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 a venture in which the
Partnership owns an interest. The fees earned by such company from such
venture attributable to the Partnership for the six months ended June 30,
1998 and 1997 were approximately $5,400 and $15,037, respectively, all of
which has been paid at June 30, 1998. As such property has been sold, no
further fees are expected to be paid by such venture 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 $8,155,000 as of June 30, 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 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, the joint venture that owned the property ("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 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. The joint venture
that owns the shopping center ("Topanga") is considering the possibility of
purchasing the Wards 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 July, 1998, Topanga made a distribution of operating cash flow for
1998 of $1,600,000 of which the Partnership's share was $928,000.
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 Topanga to actively market 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 six months ended June 30, 1998 and 1997 is as follows:
1998 1997
---------- ----------
Total income. . . . . . $ 2,402,629 4,480,809
=========== ==========
Operating income. . . . $ 1,088,874 1,576,386
=========== ==========
Net earnings to the
Partnership . . . . . $ 544,437 788,193
=========== ==========
Partnership's share
of gain on sale . . . $20,826,930 --
=========== ==========
Partnership's share
of extraordinary item $(1,259,118) --
=========== ==========
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 June 30, 1998
and for the three and six months ended June 30, 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.
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.
During 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 $170 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 7.96% of the Interests have
been purchased by such unaffiliated third parties either pursuant to such
tender offers or through negotiated purchases. 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.
As of June 30, 1998, the Partnership had consolidated cash and cash
equivalents of approximately $22,607,000 of which approximately $18,387,000
is held by the Partnership. Of the remaining $4,220,000 (held by the
Partnership's consolidated joint ventures), approximately $2,675,000
represents the Partnership's share of undistributed cash. During July
1998, $928,000 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.
In May 1998, the Partnership made 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.
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.
<PAGE>
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 decrease in investment in unconsolidated ventures, at equity at
June 30, 1998 as compared to December 31, 1997 is primarily due to the sale
in February 1998 of the Park Center Financial Plaza investment property.
The remaining balance of $1,465,931 represents primarily the Partnership's
share of remaining undistributed cash generated from operations.
The decrease in unearned rents at June 30, 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 and six months ended
June 30, 1998 as compared to the three and six months ended June 30, 1997
is primarily due to the temporary investment of proceeds related to the
1997 sale of the 40 Broad Street office building and the 1998 sale of the
Plaza Hermosa Shopping Center, which were subsequently distributed to the
Limited Partners in February and May 1998, respectively.
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 and six months
ended June 30, 1998 as compared to the three and six months ended June 30,
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 decrease in the Partnership's share of operations of
unconsolidated venture for the three and six months ended June 30, 1998 as
compared to the three and six months ended June 30, 1997 is primarily due
to the sale of the remaining assets of the Park Center Financial Plaza
office complex in February 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 $1,259,118 in 1998 comprises loan prepayment premiums of
$1,211,062 and the write-off of the deferred mortgage balance of $48,056
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 N/A
2. Topanga Plaza
Los Angeles, California. . 97% 98% 98% 98% 96% 97%
3. Plaza Hermosa
Shopping Center
Hermosa Beach, California. 91% 91% 91% 91% N/A 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:August 12, 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:August 12, 1998
<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, 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> JUN-30-1998
<CASH> 22,606,608
<SECURITIES> 0
<RECEIVABLES> 617,641
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 23,224,249
<PP&E> 83,151,271
<DEPRECIATION> 0
<TOTAL-ASSETS> 114,751,578
<CURRENT-LIABILITIES> 1,503,385
<BONDS> 56,450,090
<COMMON> 0
0
0
<OTHER-SE> 42,063,311
<TOTAL-LIABILITY-AND-EQUITY>114,751,578
<SALES> 9,476,668
<TOTAL-REVENUES> 14,406,917
<CGS> 0
<TOTAL-COSTS> 3,106,002
<OTHER-EXPENSES> 401,989
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,857,045
<INCOME-PRETAX> 7,084,695
<INCOME-TAX> 0
<INCOME-CONTINUING> 7,084,695
<DISCONTINUED> 20,826,930
<EXTRAORDINARY> (1,259,118)
<CHANGES> 0
<NET-INCOME> 26,652,507
<EPS-PRIMARY> 138.61
<EPS-DILUTED> 138.61
</TABLE>
