FORM 10-QSB—QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF

10QSB 1 ap12.htm FORM 10-QSB—QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-QSB

(Mark One)

[X]

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2006

[ ]

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from _________to _________

Commission file number 0-13309

ANGELES PARTNERS XII

(Exact name of small business issuer as specified in its charter)


California	95-3903623
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	(Identification No.)

55 Beattie Place, P.O. Box 1089

Greenville, South Carolina 29602

(Address of principal executive offices)

(864) 239-1000

(Issuer's telephone number)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 ___

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes __ No X_

PART I – FINANCIAL INFORMATION

Item 1.

Financial Statements

ANGELES PARTNERS XII

CONSOLIDATED BALANCE SHEET

(Unaudited)

(in thousands, except unit data)

March 31, 2006


Assets
Cash and cash equivalents		$ 2,409
Receivables and deposits		756
Other assets		2,609
Investment properties:
Land	$ 6,468
Buildings and related personal property	64,467
	70,935
Less accumulated depreciation	(56,262)	14,673

		$ 20,447

Liabilities and Partners' Deficit
Liabilities
Accounts payable		$ 574
Tenant security deposit liabilities		423
Accrued property taxes		446
Other liabilities		539
Due to affiliates (Note B)		16
Mortgage notes payable		67,757

Partners' Deficit (Note E)
General partners	$ (211)
Limited partners (44,718 units issued and
outstanding)	(49,097)	(49,308)
		$ 20,447

See Accompanying Notes to Consolidated Financial Statements

ANGELES PARTNERS XII

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except per unit data)


	Three Months Ended
	March 31,
	2006	2005
Revenues:		(Restated)
Rental income	$ 3,370	$ 3,164
Other income	345	310
Total revenues	3,715	3,474

Expenses:
Operating	1,213	1,112
General and administrative	111	133
Depreciation	493	456
Interest	1,087	793
Property taxes	375	453
Total expenses	3,279	2,947

Income from continuing operations	436	527
Income from discontinued operations (Note A)	--	126
Loss on sale of discontinued operations (Note C)	(58)	--

Net income	$ 378	$ 653

Net income allocated to general partners (1%)	$ 4	$ 7
Net income allocated to limited partners (99%)	374	646

	$ 378	$ 653

Per limited partnership unit:
Income from continuing operations	$ 9.64	$ 11.65
Income from discontinued operations	--	2.80
Loss on sale of discontinued operations	(1.28)	--

Net income per limited partnership unit	$ 8.36	$ 14.45

Distributions per limited partnership unit	$ --	$ 13.55

See Accompanying Notes to Consolidated Financial Statements

ANGELES PARTNERS XII

CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT

(Unaudited)

(in thousands, except unit data)


	Limited
	Partnership	General	Limited
	Units	Partners	Partners	Total

Original capital contributions	44,773	$ 1	$ 44,773	$ 44,774

Partners' deficit at
December 31, 2005	44,718	$ (215)	$(49,471)	$(49,686)

Net income for the three months
ended March 31, 2006	--	4	374	378

Partners' deficit at
March 31, 2006	44,718	$ (211)	$(49,097)	$(49,308)

See Accompanying Notes to Consolidated Financial Statements

ANGELES PARTNERS XII

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)


	Three Months Ended
	March 31,
	2006	2005
Cash flows from operating activities:
Net income	$ 378	$ 653
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation	493	568
Amortization of loan costs	49	47
Loss on sale of discontinued operations	58	--
Change in accounts:
Receivables and deposits	(57)	43
Other assets	(494)	(213)
Accounts payable	438	(17)
Tenant security deposit liabilities	(10)	(5)
Accrued property taxes	112	113
Due to affiliates	--	(8)
Other liabilities	(98)	(174)
Net cash provided by operating activities	869	1,007

Cash flows from investing activities:
Property improvements and replacements	(661)	(580)
Net receipts from restricted escrows	--	7
Net cash used in investing activities	(661)	(573)

Cash flows from financing activities:
Payments on mortgage notes payable	(263)	(529)
Distributions to partners	--	(612)
Net cash used in financing activities	(263)	(1,141)

Net decrease in cash and cash equivalents	(55)	(707)

Cash and cash equivalents at beginning of period	2,464	1,804

Cash and cash equivalents at end of period	$ 2,409	$ 1,097

Supplemental disclosure of cash flow information:
Cash paid for interest	$ 1,039	$ 1,014
Supplemental disclosure of non-cash activity:
Property improvements and replacements in accounts payable	$ 33	$ 58

At December 31, 2005 and 2004, accounts payable included approximately $191,000 and $88,000 for property improvements and replacements, which are included in property improvements and replacements for the three months ended March 31, 2006 and 2005, respectively.

See Accompanying Notes to Consolidated Financial Statements

ANGELES PARTNERS XII

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note A – Basis of Presentation

The accompanying unaudited consolidated financial statements of Angeles Partners XII (the "Partnership" or "Registrant") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of Angeles Realty Corporation II (the "Managing General Partner"), all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 2006, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2006. For further information, refer to the consolidated financial statements and footnotes thereto included in the Partnership's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2005. The Managing General Partner is a wholly owned subsidiary of Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust.

In accordance with Statement of Financial Accounting Standards ("SFAS") No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the consolidated statement of operations for the three months ended March 31, 2005 has been restated to reflect the operations of Pickwick Place Apartments as income from discontinued operations as of January 1, 2005 due to the sale of the investment property on December 1, 2005. The consolidated statement of operations for the three months ended March 31, 2005 also reflects the operations of Chambers Ridge Apartments as income from discontinued operations due to the investment property being classified as held for sale at March 31, 2005 and being sold on April 26, 2005. Income from discontinued operations is approximately $126,000 for the three months ended March 31, 2005, including combined revenues of approximately $1,184,000 for the three months ended March 31, 2005.

Recent Accounting Pronouncement

In May 2005, the Financial Accounting Standards Board issued SFAS No. 154 “Accounting Changes and Error Corrections”, which replaces APB Opinion No. 20 and SFAS No. 3, and changes the requirements for the accounting for and reporting of a change in accounting principle. This statement is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The Partnership adopted SFAS No. 154 effective January 1, 2006. The adoption of SFAS No. 154 did not have a material effect on the Partnership’s consolidated financial condition or results of operations.

Note B – Transactions with Affiliated Parties

The Partnership has no employees and depends on the Managing General Partner and its affiliates for the management and administration of all Partnership activities. The Partnership Agreement provides for (i) certain payments to affiliates for services and (ii) reimbursement of certain expenses incurred by affiliates on behalf of the Partnership.

Affiliates of the Managing General Partner receive 5% of gross receipts from all of the Partnership's properties as compensation for providing property management services. The Partnership paid to such affiliates approximately $184,000 and $234,000 for the three months ended March 31, 2006 and 2005, respectively, which is included in operating expenses and income from discontinued operations.

The Partnership Agreement provides for a fee equal to 7.5% of "net cash flow from operations", as defined in the Partnership Agreement to be paid to the Managing General Partner for executive and administrative management services. One half of this fee is to be accrued and not paid unless the limited partners have received

distributions equal to a 5% cumulative annual return on their adjusted capital investment as defined in the Partnership Agreement or there are proceeds from the sale of a property. No fee was accrued for the three months ended March 31, 2006 and 2005. The balance payable to the Managing General Partner at March 31, 2006 is approximately $16,000 and is included in due to affiliates. Due to the sale of Pickwick Place Apartments, the accrued fee balance was paid subsequent to March 31, 2006.

Affiliates of the Managing General Partner charged the Partnership for reimbursement of accountable administrative expenses amounting to approximately $110,000 and $147,000 for the three months ended March 31, 2006 and 2005, respectively, which is included in general and administrative expenses, investment properties and assets held for sale. The portion of these reimbursements included in investment properties and assets held for sale for the three months ended March 31, 2006 and 2005 are fees related to construction management services provided by an affiliate of the Managing General Partner of approximately $45,000 and $61,000, respectively.

Pursuant to the Partnership Agreement, the Managing General Partner is entitled to receive a distribution equal to 3% of the aggregate disposition price of sold properties. The Partnership paid a distribution of approximately $186,000 to the Managing General Partner related to the sale of Cooper Point Plaza in 1999. During 2001, the Partnership paid distributions of approximately $85,000 and $375,000 related to the sales of Briarwood and Gateway Gardens Apartments, respectively. These distributions are subordinate to the limited partners receiving their original capital contributions plus a cumulative preferred return of 6% per annum of their adjusted capital investment, as defined in the Partnership Agreement. If the limited partners have not received these returns when the Partnership terminates, the Managing General Partner will return these amounts to the Partnership.

The Partnership insures its properties up to certain limits through coverage provided by AIMCO which is generally self-insured for a portion of losses and liabilities related to workers compensation, property casualty, general liability and vehicle liability. The Partnership insures its properties above the AIMCO limits through insurance policies obtained by AIMCO from insurers unaffiliated with the Managing General Partner. During the three months ended March 31, 2006, the Partnership was charged by AIMCO and its affiliates approximately $420,000 for hazard insurance coverage and fees associated with policy claims administration. Additional charges will be incurred by the Partnership during 2006 as other insurance policies renew later in the year. The Partnership was charged by AIMCO and its affiliates approximately $209,000 for insurance coverage and fees associated with policy claims administration during the year ended December 31, 2005.

Note C – Sale of Investment Properties

On April 26, 2005, the Partnership sold Chambers Ridge Apartments to a third party for net proceeds of approximately $14,076,000 after payment of closing costs. The Partnership used approximately $8,007,000 of the net proceeds to repay the mortgage encumbering the property. The Partnership recognized a gain of approximately $11,147,000 during the year ended December 31, 2005 as a result of the sale. In addition, the Partnership recognized a loss on early extinguishment of debt of approximately $159,000 during the year ended December 31, 2005 as a result of unamortized loan costs being written off, and prepayment penalties paid, which was included in income from discontinued operations for the year ended December 31, 2005. In accordance with SFAS No. 144, the results of the property’s operations of approximately $101,000 have been shown as income from discontinued operations for the three months ended March 31, 2005, including revenues of approximately $627,000.

On December 1, 2005, the Partnership sold Pickwick Place Apartments to a third party for net proceeds of approximately $13,085,000 after payment of closing costs. The

Partnership used approximately $9,333,000 of the net proceeds to repay the mortgage encumbering the property. The Partnership recognized a gain of approximately $9,659,000 during the year ended December 31, 2005 as a result of the sale. In addition, the Partnership recognized a loss on early extinguishment of debt of approximately $104,000 during the year ended December 31, 2005 as a result of unamortized loan costs being written off, and prepayment penalties paid, which was included in income from discontinued operations for the year ended December 31, 2005. In addition, the Partnership recognized a loss on sale of discontinued operations of approximately $58,000 during the three months ended March 31, 2006 as a result of an increase in the estimated costs related to the sale. In accordance with SFAS No. 144, the results of the property’s operations of approximately $25,000 have been shown as income from discontinued operations for the three months ended March 31, 2005, including revenues of approximately $557,000.

Note D – Contingencies

In March 1998, several putative unit holders of limited partnership units of the Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, its Managing General Partner and several of their affiliated partnerships and corporate entities. The action purported to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) that are named as nominal defendants, challenging, among other things, the acquisition of interests in certain Managing General Partner entities by Insignia Financial Group, Inc. ("Insignia") and entities that were, at one time, affiliates of Insignia; past tender offers by the Insignia affiliates to acquire limited partnership units; management of the partnerships by the Insignia affiliates; and the series of transactions which closed on October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Properties Trust, respectively, were merged into AIMCO. The plaintiffs sought monetary damages and equitable relief, including judicial dissolution of the Partnership. In addition, during the third quarter of 2001, a complaint captioned Heller v. Insignia Financial Group (the "Heller action") was filed against the same defendants that are named in the Nuanes action. On or about August 6, 2001, plaintiffs filed a first amended complaint. The Heller action was brought as a purported derivative action, and asserted claims for, among other things, breach of fiduciary duty, unfair competition, conversion, unjust enrichment, and judicial dissolution. On January 28, 2002, the trial court granted defendants motion to strike the complaint. Plaintiffs took an appeal from this order.

On January 8, 2003, the parties filed a Stipulation of Settlement in proposed settlement of the Nuanes action and the Heller action. On June 13, 2003, the court granted final approval of the settlement and entered judgment in both the Nuanes and Heller actions. On August 12, 2003, an objector ("Objector") filed an appeal (the “Appeal”) seeking to vacate and/or reverse the order approving the settlement and entering judgment thereto. On May 4, 2004, the Objector filed a second appeal challenging the court’s use of a referee and its order requiring Objector to pay those fees.

On March 21, 2005, the Court of Appeals issued opinions in both pending appeals. With regard to the settlement and judgment entered thereto, the Court of Appeals vacated the trial court’s order and remanded to the trial court for further findings on the basis that the “state of the record is insufficient to permit meaningful appellate review”. The matter was transferred back to the trial court on June 21, 2005. With regard to the second appeal, the Court of Appeals reversed the order

requiring the Objector to pay referee fees. With respect to the related Heller appeal, on July 28, 2005, the Court of Appeals reversed the trial court’s order striking the first amended complaint.

On August 18, 2005, Objector and his counsel filed a motion to disqualify the trial court based on a peremptory challenge and filed a motion to disqualify for cause on October 17, 2005, both of which were ultimately denied and/or struck by the trial court. On or about October 13, 2005 Objector filed a motion to intervene and on or about October 19, 2005 filed both a motion to take discovery relating to the adequacy of plaintiffs as derivative representatives and a motion to dissolve the anti-suit injunction in connection with settlement. On November 14, 2005, Plaintiffs filed a Motion For Further Findings pursuant to the remand ordered by the Court of Appeals. Defendants joined in that motion. On February 3, 2006, the Court held a hearing on the various matters pending before it and has ordered additional briefing from the parties and Objector. The parties and Objector submitted one final round of briefing to the Court and the matter has been submitted for the Court’s decision.

The Managing General Partner does not anticipate that any costs to the Partnership, whether legal or settlement costs, associated with these cases will be material to the Partnership’s overall operations.

AIMCO Properties L.P. and NHP Management Company, both affiliates of the Managing General Partner, are defendants in a lawsuit alleging that they willfully violated the Fair Labor Standards Act (“FLSA”) by failing to pay maintenance workers overtime for all hours worked in excess of forty per week. The complaint, filed in the United States District Court for the District of Columbia, attempts to bring a collective action under the FLSA and seeks to certify state subclasses in California, Maryland, and the District of Columbia. Specifically, the plaintiffs contend that AIMCO Properties L.P. and NHP Management Company failed to compensate maintenance workers for time that they were required to be "on-call". Additionally, the complaint alleges AIMCO Properties L.P. and NHP Management Company failed to comply with the FLSA in compensating maintenance workers for time that they worked in excess of 40 hours in a week. In June 2005 the Court conditionally certified the collective action on both the on-call and overtime issues, which allows the plaintiffs to provide notice of the collective action to all non-exempt maintenance workers from August 7, 2000 through the present. Notices have been sent out to all current and former hourly maintenance workers. Although 1,049 individuals opted-in to the class the defendants will be challenging the eligibility and timeliness of some. Defendants will have the opportunity to move to decertify the collective action with briefing that commences in August. Because the court denied plaintiffs’ motion to certify state subclasses, on September 26, 2005, the plaintiffs filed a class action with the same allegations in the Superior Court of California (Contra Costa County), and on November 5, 2005 in Montgomery County Maryland Circuit Court. The California case has been stayed, while discovery in the Maryland case proceeds. Although the outcome of any litigation is uncertain, AIMCO Properties, L.P. does not believe that the ultimate outcome will have a material adverse effect on its consolidated financial condition or results of operations. Similarly, the Managing General Partner does not believe that the ultimate outcome will have a material adverse effect on the Partnership’s consolidated financial condition or results of operations.

The Partnership is unaware of any other pending or outstanding litigation matters involving it or its investment properties that are not of a routine nature arising in the ordinary course of business.

Environmental

Various Federal, state and local laws subject property owners or operators to liability for management, and the costs of removal or remediation, of certain hazardous substances present on a property. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release or presence of the hazardous substances. The presence of, or the failure to manage or remedy properly, hazardous substances may adversely affect occupancy at affected apartment communities and the ability to sell or finance affected properties. In addition to the costs associated with investigation and remediation actions brought by government agencies, and potential fines or penalties imposed by such agencies in connection therewith, the presence of hazardous substances on a property could result in claims by private plaintiffs for personal injury, disease, disability or other infirmities. Various laws also impose liability for the cost of removal, remediation or disposal of hazardous substances through a licensed disposal or treatment facility. Anyone who arranges for the disposal or treatment of hazardous substances is potentially liable under such laws. These laws often impose liability whether or not the person arranging for the disposal ever owned or operated the disposal facility. In connection with the ownership, operation and management of its properties, the Partnership could potentially be liable for environmental liabilities or costs associated with its properties.

Mold

The Partnership is aware of lawsuits against owners and managers of multifamily properties asserting claims of personal injury and property damage caused by the presence of mold, some of which have resulted in substantial monetary judgments or settlements. The Partnership has only limited insurance coverage for property damage loss claims arising from the presence of mold and for personal injury claims related to mold exposure. Affiliates of the Managing General Partner have implemented a national policy and procedures to prevent or eliminate mold from its properties and the Managing General Partner believes that these measures will minimize the effects that mold could have on residents. To date, the Partnership has not incurred any material costs or liabilities relating to claims of mold exposure or to abate mold conditions. Because the law regarding mold is unsettled and subject to change the Managing General Partner can make no assurance that liabilities resulting from the presence of or exposure to mold will not have a material adverse effect on the Partnership’s consolidated financial condition or results of operations.

Note E – Subsequent Event

Subsequent to March 31, 2006, the Partnership paid a distribution of approximately $950,000. The distribution to the limited partners was approximately $941,000 or $21.03 per limited partnership unit.

Item 2.

Management's Discussion and Analysis or Plan of Operation

The matters discussed in this report contain certain forward-looking statements, including, without limitation, statements regarding future financial performance and the effect of government regulations. Actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors including, without limitation: national and local economic conditions; the terms of governmental regulations that affect the Registrant and interpretations of those regulations; the competitive environment in which the Registrant operates; financing risks, including the risk that cash flows from operations may be insufficient to meet required payments of principal and interest; real estate risks, including variations of real estate values and the general economic climate in local markets and competition for tenants in such markets; litigation, including costs associated with prosecuting and defending claims and any adverse outcomes, and possible environmental liabilities. Readers should carefully review the Registrant's financial statements and the notes thereto, as well as the risk factors described in the documents the Registrant files from time to time with the Securities and Exchange Commission.

The Partnership's investment properties consist of four apartment complexes. The following table sets forth the average occupancy of the properties for the three months ended March 31, 2006 and 2005:


	Average Occupancy
Property	2006	2005

Hunters Glen Apartments – IV	96%	96%
Plainsboro, New Jersey
Hunters Glen Apartments – V (1)	97%	93%
Plainsboro, New Jersey
Hunters Glen Apartments - VI (1)	96%	91%
Plainsboro, New Jersey
Twin Lake Towers Apartments (2)	98%	94%
Westmont, Illinois

(1)

The Managing General Partner attributes the increase in occupancy at Hunters Glen Apartments V and VI to improved market conditions and increased marketing efforts.

(2)

The Managing General Partner attributes the increase in occupancy at Twin Lake Towers Apartments to improved lease management.

The Partnership’s financial results depend upon a number of factors including the ability to attract and maintain tenants at the investment properties, interest rates on mortgage loans, costs incurred to operate the investment properties, general economic conditions and weather. As part of the ongoing business plan of the Partnership, the Managing General Partner monitors the rental market environment of its investment properties to assess the feasibility of increasing rents, maintaining or increasing occupancy levels and protecting the Partnership from increases in expenses. As part of this plan, the Managing General Partner attempts to protect the Partnership from the burden of inflation-related increases in expenses by increasing rents and maintaining a high overall occupancy level. However, the Managing General Partner may use rental concessions and rental rate reductions to offset softening market conditions, accordingly, there is no guarantee that the Managing General Partner will be able to sustain such a plan. Further, a number of factors that are outside the control of the Partnership such as the local economic climate and weather can adversely or positively affect the Partnership’s financial results.

Results from Operations

The Partnership recognized net income of approximately $378,000 and $653,000 for the three months ended March 31, 2006 and 2005, respectively. The decrease in net income is due to an increase in total expenses, a decrease in income from discontinued operations and the loss on sale of discontinued operations (as discussed below) partially offset by an increase in total revenues.

On December 1, 2005, the Partnership sold Pickwick Place Apartments to a third party for net proceeds of approximately $13,085,000 after payment of closing costs. The Partnership used approximately $9,333,000 of the net proceeds to repay the mortgage encumbering the property. The Partnership recognized a gain of approximately $9,659,000 during the year ended December 31, 2005 as a result of the sale. In addition, the Partnership recognized a loss on early extinguishment of debt of approximately $104,000 during the year ended December 31, 2005 as a result of unamortized loan costs being written off, and prepayment penalties paid, which was included in income from discontinued operations for the year ended December 31, 2005. In accordance with SFAS No. 144, the results of the property’s operations of approximately $25,000 have been shown as income from discontinued operations for the three months ended March 31, 2005 including revenues of approximately $557,000. In addition, the Partnership recognized a loss on sale of discontinued operations of approximately $58,000 during the three months ended March 31, 2006 as a result of an increase in the estimated costs related to the sale.

The Partnership recognized income from continuing operations of approximately $436,000 and $527,000 for the three months ended March 31, 2006 and 2005, respectively. The decrease in income from continuing operations is due to an increase in total expenses partially offset by an increase in total revenues.

Total revenues increased for the three months ended March 31, 2006 primarily due to an increase in rental income and, to a lesser extent, an increase in other income. Rental income increased due to an increase in occupancy at Hunters Glen Apartments V and VI and Twin Lake Towers Apartments, an increase in the average rental rates at all of the Partnership’s properties and due to reduced bad debt expense at Hunters Glen Apartments V. Other income increased primarily due to an increase in resident utility reimbursements at Twin Lake Towers Apartments and interest income as a result of higher cash and cash equivalent balances due to the sales of Chambers Ridge and Pickwick Place Apartments.

Total expenses increased for the three months ended March 31, 2006 due to increases in operating, depreciation and interest expenses partially offset by decreases in general and administrative expenses and property tax expenses. Operating expenses increased primarily due to increases in property and insurance expenses. Property expense increased primarily due to an increase in utility expenses at Twin Lake Towers Apartments and salaries and related benefits at Hunters Glen Apartments V and VI partially offset by a decrease in salaries and related benefits at Twin Lake Towers Apartments and administrative units at Hunters Glen Apartments IV. Insurance expense increased primarily due to an increase in hazard insurance premiums at Hunters Glen Apartments IV, V, and VI. Depreciation expense increased due to property improvements placed into service during the past twelve months at Hunters Glen Apartments IV, V, and VI. Interest expense increased due to the Partnership obtaining second mortgages on Hunters Glen Apartments IV, V, and VI in December 2005. Property tax expense decreased primarily due to decreases in the property tax rates at Hunters Glen Apartments IV, V, and VI partially offset by an increased assessed value at Twin Lake Towers Apartments.

General and administrative expenses decreased for the three months ended March 31, 2006 due to a decrease in the costs of services included in the management reimbursements to the Managing General Partner as allowed under the Partnership Agreement and the partner tax paid to the State of New Jersey partially offset by an increase in the costs associated with the annual audit required by the Partnership Agreement. Also included in general and administrative expenses are costs associated with the quarterly and annual communications with investors and regulatory agencies and Partnership management fees earned by the Managing General Partner for executive and administrative management services.

Liquidity and Capital Resources

At March 31, 2006 the Partnership had cash and cash equivalents of approximately $2,409,000 compared to approximately $1,097,000 at March 31, 2005. Cash and cash equivalents decreased approximately $55,000 since December 31, 2005 due to approximately $661,000 and $263,000 of cash used in investing and financing activities, respectively, partially offset by approximately $869,000 of cash provided by operating activities. Cash used in investing activities consisted of property improvements and replacements. Cash used in financing activities consisted of principal payments on the mortgages encumbering the Partnership’s properties. The Partnership invests its working capital reserves in interest bearing accounts.

The sufficiency of existing liquid assets to meet future liquidity and capital expenditure requirements is directly related to the level of capital expenditures required at the properties to adequately maintain the physical assets and other operating needs of the Partnership and to comply with Federal, state, and local legal and regulatory requirements. The Managing General Partner monitors developments in the area of legal and regulatory compliance. For example, the Sarbanes-Oxley Act of 2002 mandates or suggests additional compliance measures with regard to governance, disclosure, audit and other areas. In light of these changes, the Partnership expects that it will incur higher expenses related to compliance. Capital improvements planned for each of the Partnership's properties are detailed below.

Hunters Glen Apartments IV

During the three months ended March 31, 2006, the Partnership completed approximately $145,000 of capital improvements at the property consisting primarily of floor covering replacements and washer and dryer installation in the apartment units. These improvements were funded from operating cash flow. The Partnership regularly evaluates the capital improvement needs of the property. While the Partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during 2006. Such capital improvements will depend on the physical condition of the property as well as the anticipated cash flow generated by the property.

Hunters Glen Apartments V

During the three months ended March 31, 2006, the Partnership completed approximately $201,000 of capital improvements at the property consisting primarily of floor covering replacements and washer and dryer installation in the apartment units. These improvements were funded from operating cash flow. The Partnership regularly evaluates the capital improvement needs of the property. While the Partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during 2006. Such capital improvements will depend on the physical condition of the property as well as the anticipated cash flow generated by the property.

Hunters Glen Apartments VI

During the three months ended March 31, 2006, the Partnership completed approximately $110,000 of capital improvements at the property consisting primarily of floor covering replacements and washer and dryer installation in the apartment units, heating and air conditioning unit upgrades and structural improvements. These improvements were funded from operating cash flow. The Partnership regularly evaluates the capital improvement needs of the property. While the Partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during 2006. Such capital improvements will depend on the physical condition of the property as well as the anticipated cash flow generated by the property.

Twin Lake Towers Apartments

During the three months ended March 31, 2006, the Partnership completed approximately $47,000 of capital improvements at the property consisting primarily of floor covering replacements and heating upgrades. These improvements were funded from operating cash flow. The Partnership regularly evaluates the capital improvement needs of the property. While the Partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during 2006. Such capital improvements will depend on the physical condition of the property as well as the anticipated cash flow generated by the property.

Capital expenditures will be incurred only to the extent of cash available from operations and Partnership reserves. To the extent that capital improvements are completed, the Partnership's distributable cash flow, if any, may be adversely affected, at least in the short term.

On December 1, 2005, the Partnership obtained second mortgages in the total principal amount of $19,500,000 on Hunters Glen Apartments IV, V, and VI. The new second mortgages bear interest at a fixed interest rate of 5.63% and require monthly payments of principal and interest of approximately $112,000 in the aggregate beginning on January 1, 2006 until the loans mature December 1, 2015, with balloon payments of approximately $16,388,000 in the aggregate due at maturity. Loan costs of approximately $400,000 that were paid in connection with the second mortgages were capitalized during the year ended December 31, 2005.

In connection with the new financing, the Partnership agreed to certain modifications on the existing mortgage loans encumbering Hunters Glen Apartments IV, V, and VI. For Hunters Glen Apartments IV, the interest rate was modified to a fixed rate of 5.51%, and commencing January 1, 2006 through the loan’s maturity date of December 1, 2015 the loan requires monthly payments of principal and interest of approximately $64,000, with a balloon payment of approximately $9,028,000 due at maturity. For Hunters Glen Apartments V and Hunters Glen Apartments VI, the interest rate was modified to a fixed rate of approximately 7.39%, and commencing January 1, 2006 through the loans’ maturity dates of December 1, 2015, the loans require monthly payments of approximately $89,000 and $93,000, respectively, with balloon payments of approximately $10,906,000 and $11,352,000, respectively, due at

maturity. The Partnership has the option of extending the maturity dates for one additional year, to December 1, 2016, during which period the mortgages would require monthly payments of principal and interest and would bear interest at a rate equal to the average of the one month LIBOR plus 250 basis points. The previous terms for the first mortgage on Hunters Glen Apartments IV required monthly payments of approximately $86,000 with a stated fixed interest rate of 5.26% through its maturity of January 1, 2022, at which time the loan was scheduled to be fully amortized. The previous terms for the first mortgages on Hunters Glen Apartments V and Hunters Glen Apartments VI required monthly payments of approximately $112,000 and $117,000, respectively, with a stated fixed interest rate of 7.14% through maturity of January 1, 2022, at which time the loans were scheduled to be fully amortized.

On April 29, 2005, the Partnership refinanced the mortgage encumbering Pickwick Place Apartments. The refinancing replaced the existing mortgage of approximately $5,775,000 with a new mortgage in the amount of approximately $9,431,000. Total capitalized loan costs were approximately $90,000. The Partnership recognized a loss on early extinguishment of debt of approximately $2,000 due to loan costs being written off, and was included in income from discontinued operations during the year ended December 31, 2005.

The April 29, 2005 refinancing of Pickwick Place Apartments was under a credit facility ("Permanent Credit Facility") which also provided for the refinancing of several other properties. The Permanent Credit Facility created separate loans for each property refinanced thereunder, which loans were not cross-collateralized or cross-defaulted with each other. The Permanent Credit Facility matures in September 2007 with an option for the Partnership to elect one five-year extension. Each note under this Permanent Credit Facility is initially a variable rate loan. The interest rate on the variable rate loans is the Fannie Mae discounted mortgage-backed security index plus 85 basis points and the rate resets monthly. Each loan automatically renews at the end of each month. In addition, monthly principal payments are required based on a 30-year amortization schedule, using the interest rate in effect during the first month that the property is financed by the Permanent Credit Facility. The loans may be prepaid without penalty. The Partnership sold Pickwick Place Apartments to a third party on December 1, 2005 and repaid the mortgage encumbering the property.

The Partnership's assets are thought to be generally sufficient for any near-term needs (exclusive of capital improvements) of the Partnership. The Partnership's mortgage indebtedness encumbering Hunter's Glen IV, V and VI Apartments of approximately $56,802,000 matures in December 2015 with a one year extension option and balloon payments of approximately $47,674,000 due at maturity. The mortgage indebtedness encumbering Twin Lake Towers Apartments of approximately $10,955,000 matures in July 2013, at which time a balloon payment totaling approximately $7,385,000 will be due. The Managing General Partner will attempt to refinance the mortgages on Hunters Glen Apartments IV, V, VI, and Twin Lake Towers Apartments and/or sell the properties prior to the maturity dates. If the properties cannot be refinanced or sold for a sufficient amount, the Partnership will risk losing the properties through foreclosure.

The Partnership distributed the following amounts during the three months ended March 31, 2006 and 2005 (in thousands except per unit data):


	Three Months	Per Limited	Three Months	Per Limited
	Ended	Partnership	Ended	Partnership
	March 31, 2006	Unit	March 31, 2005	Unit

Operations	$ --	$ --	$ 612	$ 13.55

Future cash distributions will depend on the levels of cash generated from operations, and the timing of debt maturities, property sales and/or refinancings. The Partnership’s cash available for distribution is reviewed on a monthly basis. Subsequent to March 31, 2006, the Partnership paid a distribution of approximately $950,000. The distribution to the limited partners was approximately $941,000 or $21.03 per limited partnership unit. There can be no assurance that the Partnership will generate sufficient funds from operations, after planned capital improvement expenditures, to permit additional distributions to its partners during 2006.

Other

In addition to its indirect ownership of the general partner interests in the Partnership, AIMCO and its affiliates owned 33,292 limited partnership units (the "Units") in the Partnership representing 74.45% of the outstanding Units at March 31, 2006. A number of these Units were acquired pursuant to tender offers made by AIMCO or its affiliates. It is possible that AIMCO or its affiliates will acquire additional Units in exchange for cash or a combination of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO, either through private purchases or tender offers. Pursuant to the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters that include, but are not limited to, voting on certain amendments to the Partnership Agreement and voting to remove the Managing General Partner. As a result of its ownership of 74.45% of the outstanding Units, AIMCO and its affiliates are in a position to control all voting decisions with respect to the Partnership. Although the Managing General Partner owes fiduciary duties to the limited partners of the Partnership, the Managing General Partner also owes fiduciary duties to AIMCO as its sole stockholder. As a result, the duties of the Managing General Partner, as managing general partner, to the Partnership and its limited partners may come into conflict with the duties of the Managing General Partner to AIMCO as its sole stockholder.

Critical Accounting Policies and Estimates

The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States, which require the Partnership to make estimates and assumptions. The Partnership believes that of its significant accounting policies, the following may involve a higher degree of judgment and complexity.

Impairment of Long-Lived Assets

Investment properties are recorded at cost, less accumulated depreciation, unless the carrying amount of the asset is not recoverable. If events or circumstances indicate that the carrying amount of a property may not be recoverable, the Partnership will make an assessment of its recoverability by comparing the carrying amount to the Partnership’s estimate of the undiscounted future cash flows, excluding interest charges, of the property. If the carrying amount exceeds the aggregate undiscounted future cash flows, the Partnership would recognize an impairment loss to the extent the carrying amount exceeds the estimated fair value of the property.

Real property investment is subject to varying degrees of risk. Several factors may adversely affect the economic performance and value of the Partnership’s investment properties. These factors include, but are not limited to, general economic climate; competition from other apartment communities and other housing options; local conditions, such as loss of jobs or an increase in the supply of apartments that might adversely affect apartment occupancy or rental rates; changes in governmental regulations and the related cost of compliance; increases in operating costs (including real estate taxes) due to inflation and other factors, which may not be offset by increased rents; and changes in tax laws and housing laws, including the enactment of rent control laws or other laws regulating multi-family housing. Any adverse changes in these factors could cause impairment of the Partnership’s assets.

Revenue Recognition

The Partnership generally leases apartment units for twelve-month terms or less. The Partnership will offer rental concessions during particularly slow months or in response to heavy competition from other similar complexes in the area. Rental income attributable to leases, net of any concessions, is recognized on a straight-line basis over the term of the lease. The Partnership evaluates all accounts receivable from residents and establishes an allowance, after the application of security deposits, for accounts greater than 30 days past due on current tenants and all receivables due from former tenants.

Item 3.

Controls and Procedures

(a)

Disclosure Controls and Procedures. The Partnership’s management, with the participation of the principal executive officer and principal financial officer of the Managing General Partner, who are the equivalent of the Partnership’s principal executive officer and principal financial officer, respectively, has evaluated the effectiveness of the Partnership’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the principal executive officer and principal financial officer of the Managing General Partner, who are the equivalent of the Partnership’s principal executive officer and principal financial officer, respectively, have concluded that, as of the end of such period, the Partnership’s disclosure controls and procedures are effective.

(b)

Internal Control Over Financial Reporting. There have not been any changes in the Partnership’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1.

Legal Proceedings

Item 5.

Other Information

None.

Item 6.

Exhibits

See Exhibit Index Attached.

SIGNATURES

In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	ANGELES PARTNERS XII
	(A California Limited Partnership)

	By: Angeles Realty Corporation II
	Managing General Partner

	By: /s/Martha L. Long
	Martha L. Long
	Senior Vice President

	By: /s/Stephen B. Waters
	Stephen B. Waters
	Vice President

	Date: May 12, 2006

ANGELES PARTNERS XII

EXHIBIT INDEX

Exhibit Number

Description of Exhibit

3.1

Amended Certificate and Agreement of Limited Partnership dated May 26, 1983 filed in Form S-11 dated June 2, 1983 and is incorporated herein by reference.

10.22

Multifamily Note secured by a Mortgage or Deed of Trust dated December 20, 2001, between Hunters Glen AP XII Limited Partnership and GMAC Commercial Mortgage, relating to Hunters Glen Apartments V & VI. Filed as Exhibit 10.16(g) to the Partnership's Annual Report on Form 10-KSB for the year ended December 31, 2002 and incorporated herein by reference.

10.24

Multifamily Note dated June 26, 2003, between AIMCO Twin Lake Towers L. P., a Delaware limited partnership, and Keycorp Real Estate Capital Markets, Inc., an Ohio corporation related to Twin Lake Towers Apartments filed with the Registrant's Form 10-QSB for the quarter ended June 30, 2003 and incorporated herein by reference.

10.25

Multifamily Note dated June 30, 2003, between Hunters Glen AP XII Limited Partnership, a South Carolina limited partnership, and GMAC Commercial Mortgage Bank, a Utah corporation related to Hunters Glen IV Apartments filed with the Registrant's Form 10-QSB for the quarter ended June 30, 2003 and incorporated herein by reference.

10.26

Purchase and Sale Contract between APXII Associates Limited Partnership, a South Carolina limited partnership, as Seller, and Elon Group, Ltd., a Pennsylvania corporation, as Purchaser, effective February 2, 2005 and filed with the Registrant’s Form 8-K on February 8, 2005.

10.27

First Amendment to Purchase and Sale Contract between APXII Associates Limited Partnership, a South Carolina limited partnership, as Seller, and Elon Group, Ltd., a Pennsylvania corporation, as Purchaser, effective March 4, 2005 and filed with the Registrant’s Form 8-K on May 2, 2005 and incorporated herein by reference.

10.28

Second Amendment to Purchase and Sale Contract between APXII Associates Limited Partnership, a South Carolina limited partnership, as Seller, and Elon Group, Ltd., a Pennsylvania corporation, as Purchaser, effective March 11, 2005 and filed with the Registrant’s Form 8-K on May 2, 2005 and incorporated herein by reference.

10.29

Multifamily Note dated April 29, 2005 between Pickwick Place AP XII, L.P., a South Carolina limited partnership and GMAC Commercial Mortgage Corporation and filed with the Registrant’s Form 8-K on May 5, 2005 and incorporated herein by reference.

10.30

Multifamily Mortgage, Assignment of Rents and Security Agreement dated April 29, 2005 between Pickwick Place AP XII, L.P. and GMAC Mortgage Corporation and filed with the Registrant’s Form 8-K on May 5, 2005 and incorporated herein by reference.

ANGELES PARTNERS XII

EXHIBIT INDEX - CONTINUED

10.31

Assignment of Security Instrument dated April 29, 2005, between GMAC Commercial Mortgage Corporation and Fannie Mae and filed with the Registrant’s Form 8-K on May 5, 2005 and incorporated herein by reference.

10.32

Guaranty dated April 29, 2005 by AIMCO Properties, L.P., for the benefit of GMAC Commercial Mortgage Corporation and filed with the Registrant’s Form 8-K on May 5, 2005 and incorporated herein by reference.

10.33

Purchase and Sale Contract between Pickwick Place AP XII Limited Partnership and Prime Quest Management, LLC dated August 16, 2005 and filed March 28, 2006 with the Registrant’s Form 10-QSB dated March 28, 2006 and incorporated herein by reference.

10.34

First Amendment to Purchase and Sale Contract between Pickwick Place AP XII Limited Partnership and Prime Quest Management, LLC dated September 16, 2005 and filed March 28, 2006 with the Registrant’s Form 10-QSB dated March 28, 2006 and incorporated herein by reference.

10.35

Reinstatement and Second Amendment to the Purchase and Sale Contract between Pickwick Place AP XII Limited Partnership and Prime Quest Management, LLC dated October 11, 2005 and filed March 28, 2006 with the Registrant’s Form 10-QSB dated March 28, 2006 and incorporated herein by reference.

10.36

Multifamily Note dated December 1, 2005 between Hunters Glen AP XII L.P., a South Carolina limited partnership and GMAC Commercial Mortgage Bank in reference to Hunters Glen IV and filed December 7, 2005 with the Registrant’s Form 8-K dated December 1, 2005 and incorporated herein by reference.

10.37

Amended and Restated Multifamily Note dated December 1, 2005 between Hunters Glen AP XII L.P., a South Carolina limited partnership and GMAC Commercial Mortgage Bank in reference to Hunters Glen IV and filed December 7, 2005 with the Registrant’s Form 8-K dated December 1, 2005 and incorporated herein by reference.

10.38

Multifamily Note dated December 1, 2005 between Hunters Glen AP XII L.P., a South Carolina limited partnership and GMAC Commercial Mortgage Bank in reference to Hunters Glen V and VI and filed December 7, 2005 with the Registrant’s Form 8-K dated December 1, 2005 and incorporated herein by reference.

10.39

Amended and Restated Multifamily Note dated December 1, 2005 between Hunters Glen AP XII L.P., a South Carolina limited partnership and GMAC Commercial Mortgage Bank in reference to Hunters Glen V and VI and filed December 7, 2005 with the Registrant’s Form 8-K dated December 1, 2005 and incorporated herein by reference.

31.1

Certification of equivalent of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of equivalent of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

ANGELES PARTNERS XII

EXHIBIT INDEX - CONTINUED

32.1

Certification of the equivalent of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 31.1

CERTIFICATION

I, Martha L. Long, certify that:

I have reviewed this quarterly report on Form 10-QSB of Angeles Partners XII;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c)

Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and

The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.

Date: May 12, 2006

/s/Martha L. Long

Martha L. Long

Senior Vice President of Angeles Realty Corporation II, equivalent of the chief executive officer of the Partnership

Exhibit 31.2

CERTIFICATION

I, Stephen B. Waters, certify that:

I have reviewed this quarterly report on Form 10-QSB of Angeles Partners XII;

(a)

(b)

(c)

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.

Date: May 12, 2006

/s/Stephen B. Waters

Stephen B. Waters

Vice President of Angeles Realty Corporation II, equivalent of the chief financial officer of the Partnership

Exhibit 32.1

Certification of CEO and CFO

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-QSB of Angeles Partners XII (the "Partnership"), for the quarterly period ended March 31, 2006 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Martha L. Long, as the equivalent of the chief executive officer of the Partnership, and Stephen B. Waters, as the equivalent of the chief financial officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.


	/s/Martha L. Long
	Name: Martha L. Long
	Date: May 12, 2006

	/s/Stephen B. Waters
	Name: Stephen B. Waters
	Date: May 12, 2006

This certification is furnished with this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Partnership for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.