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Table of Contents
 
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
Form 10-Q
 
(Mark One)
 
        x  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended June 30, 2002
 
or
 
        ¨  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE  ACT OF 1934
 
For the transition period from __________ to __________
 
Commission file number 0-30287
 
 
WELLS REAL ESTATE FUND XII, L.P.
(Exact name of registrant as specified in its charter)
 
Georgia
  
58-2438242
(State of other jurisdiction of incorporation or organization)
  
(I.R.S. Employer Identification No.)
     
6200 The Corners Parkway, Suite 250,
Norcross, Georgia
  
30092
(Address of principal executive offices)
  
(Zip Code)
     
Registrant’s telephone number, including area code (770) 449-7800
 
(Former name, former address and former fiscal year, if changed since last report)
 
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
FORM 10-Q
 
WELLS REAL ESTATE FUND XII, L.P.
 
INDEX
 
           
Page No.
PART I.
          
Item 1.
        
  3
         
  4
         
  5
         
  6
         
  7
         
  8
Item 2.
        
12
PART II.
        
15
    
16
      
      
             

2

Table of Contents
PART I.     FINANCIAL INFORMATION
 
Effective July 3, 2002, Wells Real Estate Fund XII (the “Partnership”) engaged Ernst & Young LLP (“Ernst & Young”) as its principal accountants to audit the Partnership’s financial statements. In accordance with the relief granted to former auditing clients of Arthur Andersen LLP in SEC Release No. 34-45589, Ernst & Young completed its review of the unaudited financial statements of the Partnership for the quarter ended March 31, 2002 pursuant to Rule 10-01(d) of Regulation S-X within the 60-day period allowed pursuant to the SEC Release, and no material modifications to the previously reported financial information were required.

3

Table of Contents
WELLS REAL ESTATE FUND XII, L.P.
 
(A Georgia Public Limited Partnership)
 
BALANCE SHEETS
 
    
(unaudited)
June 30,
2002
   
December 31,
2001
ASSETS:
              
Investments in joint ventures (Note 2)
   
$
29,535,172
   
$
30,003,597
Cash and cash equivalents
   
 
15,338
   
 
32,627
Due from affiliates
   
 
709,988
   
 
687,112
Accounts receivable
   
 
4,468
   
 
2,867
    
  
Total assets
   
$
30,264,966
   
$
30,726,203
    
  
LIABILITIES AND PARTNERS’ CAPITAL
              
Liabilities:
              
Accounts payable
   
$
1,098
   
$
2,490
Due to affiliates
   
 
60,000
   
 
0
Partnership distribution payable
   
 
673,285
   
 
659,919
    
  
Total liabilities
   
 
734,383
   
 
662,409
    
  
Partners’ capital:
              
Limited partners:
              
Cash Preferred—2,829,896 units and 2,778,607 units outstanding as of June 30, 2002 and December 31, 2001, respectively
   
 
24,987,661
   
 
24,613,370
Tax Preferred—731,223 units and 782,512 units outstanding as of June 30, 2002 and December 31, 2001, respectively
   
 
4,542,922
   
 
5,450,424
    
  
Total partners’ capital
   
 
29,530,583
   
 
30,063,794
    
  
Total liabilities and partners’ capital
   
$
30,264,966
   
$
30,726,203
    
  
 
The accompanying notes are an integral part of these balance sheets.

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Table of Contents
WELLS REAL ESTATE FUND XII, L.P.
 
(A Georgia Public Limited Partnership)
 
STATEMENTS OF INCOME
 
    
(unaudited)
Three Months Ended
     
(unaudited)
Six Months Ended
  
    
June 30, 2002
     
June 30, 2001
     
June 30, 2002
     
June 30, 2001
  
REVENUES:
                                    
Equity in income of joint ventures (Note 2)
   
$
477,163
 
   
$
362,492
 
   
$
924,908
 
   
$
687,065
 
Interest income
   
 
0
 
   
 
46,607
 
   
 
628
 
   
 
82,175
 
    
  
  
  
    
 
477,163
 
   
 
409,099
 
   
 
925,536
 
   
 
769,240
 
    
  
  
  
EXPENSES:
                                    
Partnership administration
   
 
95,490
 
   
 
22,187
 
   
 
109,049
 
   
 
33,623
 
Legal and accounting
   
 
2,427
 
   
 
4,157
 
   
 
9,363
 
   
 
12,807
 
Computer costs
   
 
1,632
 
   
 
4,295
 
   
 
3,455
 
   
 
5,495
 
    
  
  
  
    
 
99,549
 
   
 
30,639
 
   
 
121,867
 
   
 
51,925
 
    
  
  
  
NET INCOME
   
$
377,614
 
   
$
378,460
 
   
$
803,669
 
   
$
717,315
 
    
  
  
  
NET INCOME ALLOCATED TO CASH PREFERRED LIMITED PARTNERS
   
$
650,353
 
   
$
634,064
 
   
$
1,353,925
 
   
$
1,179,956
 
    
  
  
  
NET LOSS ALLOCATED TO TAX PREFERRED LIMITED PARTNERS
   
$
(272,739
)
   
 
(255,604
)
   
$
(550,256
)
   
$
(462,641
)
    
  
  
  
NET INCOME PER WEIGHTED AVERAGE CASH PREFERRED LIMITED PARTNER UNIT
   
$
0.23
 
   
$
0.27
 
   
$
0.48
 
   
$
0.50
 
    
  
  
  
NET LOSS PER WEIGHTED AVERAGE TAX PREFERRED LIMITED PARTNER UNIT
   
$
(0.37
)
   
$
(0.33
)
   
$
(0.74
)
   
$
(0.60
)
    
  
  
  
CASH DISTRIBUTION PER CASH PREFERRED LIMITED PARTNER UNIT
   
$
0.24
 
   
$
0.26
 
   
$
0.48
 
   
$
0.47
 
    
  
  
  
 
The accompanying notes are an integral part of these statements.

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Table of Contents
WELLS REAL ESTATE FUND XII, L.P.
 
(A Georgia Public Limited Partnership)
 
STATEMENTS OF PARTNERS’ CAPITAL
 
FOR THE YEAR ENDED DECEMBER 31, 2001 AND
 
FOR THE SIX MONTHS ENDED JUNE 30, 2002 (UNAUDITED)
 
 
    
Limited Partners
     
Total Partners’ Capital
  
    
Cash Preferred
     
Tax Preferred
     
    
Units
   
Amounts
     
Units
     
Amounts
     
BALANCE at December 31, 2000
   
1,881,142
   
$
16,589,551
 
   
617,434
 
   
$
5,033,781
 
   
$
21,623,332
 
Net income (loss)
   
0
   
 
2,591,027
 
   
0
 
   
 
(1,035,609
)
   
 
1,555,418
 
Partnership distributions
   
0
   
 
(2,412,208
)
   
0
 
   
 
0
 
   
 
(2,412,208
)
Limited partner contributions
   
823,918
   
 
8,239,183
 
   
238,625
 
   
 
2,386,248
 
   
 
10,625,431
 
Sales commissions and discounts
   
0
   
 
(782,723
)
   
0
 
   
 
(226,693
)
   
 
(1,009,416
)
Other offering expenses
   
0
   
 
(247,176
)
   
0
 
   
 
(71,587
)
   
 
(318,763
)
Tax preferred conversions
   
73,547
   
 
635,716
 
   
(73,547
)
   
 
(635,716
)
   
 
0
 
    
  
  
  
  
BALANCE at December 31, 2001
   
2,778,607
   
 
24,613,370
 
   
782,512
 
   
 
5,450,424
 
   
 
30,063,794
 
Net income (loss)
   
0
   
 
1,353,925
 
   
0
 
   
 
(550,256
)
   
 
803,669
 
Partnership distributions
   
0
   
 
(1,336,880
)
   
0
 
   
 
0
 
   
 
(1,336,880
)
Tax preferred conversions
   
51,289
   
 
357,246
 
   
(51,289
)
   
 
(357,246
)
   
 
0
 
    
  
  
  
  
BALANCE at June 30, 2002 (unaudited)
   
2,829,896
   
$
24,987,661
 
   
731,223
 
   
$
4,542,922
 
   
$
29,530,583
 
    
  
  
  
  
 
The accompanying notes are an integral part of these statements.

6

Table of Contents
WELLS REAL ESTATE FUND XII, L.P.
 
(A Georgia Public Limited Partnership)
 
STATEMENTS OF CASH FLOWS
 
    
(unaudited)
Six Months Ended
  
    
June 30, 2002
     
June 30, 2001
  
CASH FLOWS FROM OPERATING ACTIVITIES:
                  
Net income
   
$
803,669
 
   
$
717,315
 
Adjustments to reconcile net income to net cash used in operating activities:
                  
Equity in income of joint ventures
   
 
(924,908
)
   
 
(687,065
)
Changes in assets and liabilities:
                  
Due to affiliates
   
 
60,000
 
   
 
(23,989
)
Accounts payable
   
 
(1,392
)
   
 
(1,588
)
Accounts receivable
   
 
(1,601
)
   
 
(14,378
)
    
  
Net cash used in operating activities
   
 
(64,232
)
   
 
(9,705
)
    
  
CASH FLOW FROM INVESTING ACTIVITIES:
                  
Investments in joint ventures
   
 
0
 
   
 
(8,926,156
)
Deferred project costs
   
 
0
 
   
 
(371,900
)
Distributions received from joint ventures
   
 
1,370,457
 
   
 
776,331
 
    
  
Net cash provided by (used in) investing activities
   
 
1,370,457
 
   
 
(8,521,725
)
    
  
CASH FLOW FROM FINANCING ACTIVITIES:
             &