UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1998 -------------------------------------------- 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 0-15446 -------- MCNEIL REAL ESTATE FUND XXV, L.P. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) California 33-0120335 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 13760 Noel Road, Suite 600, LB70, Dallas, Texas, 75240 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (972) 448-5800 ------------------------------ 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 and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS - ------- -------------------- MCNEIL REAL ESTATE FUND XXV, L.P. BALANCE SHEETS (Unaudited) June 30, December 31, 1998 1997 ------------ ------------ ASSETS - ------ Real estate investments: Land ................................................... $ 4,205,425 $ 4,205,425 Buildings and improvements ............................. 48,020,307 47,835,062 ------------ ------------ 52,225,732 52,040,487 Less: Accumulated depreciation and amortization ....... (28,219,775) (27,037,306) ------------ ------------ 24,005,957 25,003,181 Asset held for sale ....................................... 8,989,818 8,989,818 Cash and cash equivalents ................................. 2,533,696 3,044,669 Cash segregated for security deposits ..................... 345,019 340,879 Accounts receivable, net of allowance for doubtful accounts of $602,041 and $730,668 at June 30, 1998 and December 31, 1997, respectively .................... 533,886 539,431 Escrow deposits ........................................... 88,778 56,758 Deferred borrowing costs, net of accumulated amortization of $90,453 and $85,887 at June 30, 1998 and December 31, 1997, respectively ............... 228,297 232,863 Prepaid expenses and other assets ......................... 331,433 355,305 ------------ ------------ $ 37,056,884 $ 38,562,904 ============ ============ LIABILITIES AND PARTNERS' EQUITY (DEFICIT) - ------------------------------------------ Mortgage note payable ..................................... $ 7,125,653 $ 7,155,626 Accounts payable and accrued expenses ..................... 49,829 126,854 Accrued interest .......................................... 60,865 61,121 Accrued property taxes .................................... 511,870 561,973 Payable to affiliates ..................................... 646,476 279,505 Land lease obligation ..................................... 183,065 205,902 Security deposits and deferred rental revenue ............. 467,705 382,684 ------------ ------------ 9,045,463 8,773,665 ------------ ------------ Partners' equity (deficit): Limited partners - 84,000,000 limited partnership units authorized; 82,943,685 limited partnership units issued and outstanding at June 30, 1998 and December 31, 1997 .................................... 28,497,995 30,280,535 General Partner ........................................ (486,574) (491,296) ------------ ------------ 28,011,421 29,789,239 ------------ ------------ $ 37,056,884 $ 38,562,904 ============ ============ The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. McNEIL REAL ESTATE FUND XXV, L.P. STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Six Months Ended June 30, June 30, ------------------------------ ------------------------------ 1998 1997 1998 1997 ----------- ----------- ----------- ----------- Revenue: Rental revenue ............. $ 2,475,140 $ 2,355,776 $ 4,871,499 $ 4,570,896 Interest ................... 30,684 34,244 78,233 73,681 Other revenue .............. 126,035 - 126,035 - ----------- ----------- ----------- ----------- Total revenue ............ 2,631,859 2,390,020 5,075,767 4,644,577 ----------- ----------- ----------- ----------- Expenses: Interest ................... 199,474 205,998 399,334 417,013 Depreciation and amortization ............. 582,883 840,998 1,182,469 1,628,888 Property taxes ............. 205,341 205,343 425,742 410,686 Personnel costs ............ 177,798 187,291 393,266 425,796 Utilities .................. 159,458 163,006 345,998 352,477 Repairs and maintenance .... 265,045 258,615 506,592 516,812 Property management fees - affiliates ........ 151,051 140,285 289,668 267,391 Other property operating expenses ................. 154,258 195,051 335,645 400,552 General and administrative . 176,994 32,178 276,088 83,659 General and administrative - affiliates ............... 230,921 216,570 448,793 415,619 ----------- ----------- ----------- ----------- Total expenses ........... 2,303,223 2,445,335 4,603,595 4,918,893 ----------- ----------- ----------- ----------- Net income (loss) ............. $ 328,636 $ (55,315) $ 472,172 $ (274,316) =========== =========== =========== =========== Net income (loss) allocable to limited partners ........ $ 325,349 $ (54,762) $ 467,450 $ (271,573) Net income (loss) allocable to General Partner ......... 3,287 (553) 4,722 (2,743) ----------- ----------- ----------- ----------- Net income (loss) ............. $ 328,636 $ (55,315) $ 472,172 $ (274,316) =========== =========== =========== =========== Net income (loss) per thousand limited partnership units .. $ 3.93 $ (.66) $ 5.64 $ (3.27) =========== =========== =========== =========== Distributions per thousand limited partnership units .. $ - $ - $ 27.13 $ 6.03 =========== =========== =========== =========== The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. McNEIL REAL ESTATE FUND XXV, L.P. STATEMENTS OF PARTNERS' EQUITY (DEFICIT) (Unaudited) For the Six Months Ended June 30, 1998 and 1997 Total General Limited Partners' Partner Partners Equity (Deficit) ------------- ------------- ---------------- Balance at December 31, 1996 ...... $ (459,375) $ 34,440,696 $ 33,981,321 Net loss .......................... (2,743) (271,573) (274,316) Distributions to limited partners.. - (499,994) (499,994) ------------ ------------ ------------ Balance at June 30, 1997 .......... $ (462,118) $ 33,669,129 $ 33,207,011 ============ ============ ============ Balance at December 31, 1997 ...... $ (491,296) $ 30,280,535 $ 29,789,239 Net income ........................ 4,722 467,450 472,172 Distributions to limited partners.. - (2,249,990) (2,249,990) ------------ ------------ ------------ Balance at June 30, 1998 .......... $ (486,574) $ 28,497,995 $ 28,011,421 ============ ============ ============ The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. McNEIL REAL ESTATE FUND XXV, L.P. STATEMENTS OF CASH FLOWS (Unaudited) Increase (Decrease) in Cash and Cash Equivalents Six Months Ended June 30, -------------------------------- 1998 1997 ------------ ------------ Cash flows from operating activities: Cash received from tenants ............... $ 5,094,632 $ 4,688,821 Cash paid to suppliers ................... (1,921,414) (2,551,759) Cash paid to affiliates .................. (371,490) (741,443) Interest received ........................ 78,233 73,681 Interest paid ............................ (395,024) (529,360) Property taxes paid and escrowed ......... (507,865) (391,557) ----------- ----------- Net cash provided by operating activities.... 1,977,072 548,383 ----------- ----------- Cash flows from investing activities: Additions to real estate investments ..... (185,245) (448,984) ----------- ----------- Cash flows from financing activities: Principal payments on mortgage note payable ................................ (29,973) (197,400) Payments on capitalized land lease obligation ............................. (22,837) (19,271) Distributions to limited partners ........ (2,249,990) (499,994) ----------- ----------- Net cash used in financing activities ....... (2,302,800) (716,665) ----------- ----------- Net decrease in cash and cash equivalents.... (510,973) (617,266) Cash and cash equivalents at beginning of period ................................... 3,044,669 3,256,746 ----------- ----------- Cash and cash equivalents at end of period... $ 2,533,696 $ 2,639,480 =========== =========== The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. McNEIL REAL ESTATE FUND XXV, L.P. STATEMENTS OF CASH FLOWS (Unaudited) Reconciliation of Net Income (Loss) to Net Cash Provided by Operating Activities Six Months Ended June 30, ----------------------------------------- 1998 1997 ---------------- ------------------ Net income (loss).................................... $ 472,172 $ (274,316) --------------- ---------------- Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization..................... 1,182,469 1,628,888 Amortization of deferred borrowing costs.......... 4,566 4,566 Changes in assets and liabilities: Cash segregated for security deposits........... (4,140) 1,443 Accounts receivable, net........................ 5,545 82,994 Escrow deposits................................. (32,020) 24,830 Prepaid expenses and other assets............... 23,872 11,428 Accounts payable and accrued expenses........... (77,025) (774,195) Accrued interest................................ (256) (116,913) Accrued property taxes.......................... (50,103) (24,381) Payable to affiliates........................... 366,971 (58,433) Security deposits and deferred rental revenue....................................... 85,021 42,472 --------------- -------------- Total adjustments............................. 1,504,900 822,699 --------------- -------------- Net cash provided by operating activities............ $ 1,977,072 $ 548,383 =============== ============== The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. MCNEIL REAL ESTATE FUND XXV, L.P. Notes to Financial Statements June 30, 1998 (Unaudited) NOTE 1. - ------- McNeil Real Estate Fund XXV, L.P. (the "Partnership"), formerly known as Southmark Equity Partners II, Ltd., was organized on February 15, 1985 as a limited partnership under the provisions of the California Revised Limited Partnership Act to acquire and operate commercial and residential properties. The general partner of the Partnership is McNeil Partners, L.P. (the "General Partner"), a Delaware limited partnership, an affiliate of Robert A. McNeil ("McNeil"). The principal place of business for the Partnership and the General Partner is 13760 Noel Road, Suite 600, LB70, Dallas, Texas, 75240. In the opinion of management, the financial statements reflect all adjustments necessary for a fair presentation of the Partnership's financial position and results of operations. All adjustments were of a normal recurring nature. However, the results of operations for the six months ended June 30, 1998 are not necessarily indicative of the results to be expected for the year ending December 31, 1998. NOTE 2. - ------- The financial statements should be read in conjunction with the financial statements contained in the Partnership's Annual Report on Form 10-K for the year ended December 31, 1997, and the notes thereto, as filed with the Securities and Exchange Commission, which is available upon request by writing to McNeil Real Estate Fund XXV, L.P., c/o McNeil Real Estate Management, Inc., Investor Services, 13760 Noel Road, Suite 600, LB70, Dallas, Texas 75240. NOTE 3. - ------- The Partnership pays property management fees equal to 5% of the gross rental receipts for its residential property and 6% of gross rental receipts for its commercial properties to McNeil Real Estate Management, Inc. ("McREMI"), an affiliate of the General Partner, for providing property management services for the Partnership's residential and commercial properties and leasing services for its residential properties. McREMI may also choose to provide leasing services for the Partnership's commercial properties, in which case McREMI will receive property management fees from such commercial properties equal to 3% of the property's gross rental receipts plus leasing commissions based on the prevailing market rate for such services where the property is located. The Partnership reimburses McREMI for its costs, including overhead, of administering the Partnership's affairs. The Partnership is paying an asset management fee which is payable to the General Partner. Through 1999, the asset management fee is calculated as 1% of the Partnership's tangible asset value. Tangible asset value is determined by using the greater of (i) an amount calculated by applying a capitalization rate of 9% to the annualized net operating income of each property or (ii) a value of $10,000 per apartment unit for residential property and $50 per gross square foot for commercial properties to arrive at the property tangible asset value. The property tangible asset value is then added to the book value of all other assets excluding intangible items. The fee percentage decreases subsequent to 1999. Compensation and reimbursements paid to or accrued for the benefit of the General Partner or its affiliates are as follows: Six Months Ended June 30, ------------------------- 1998 1997 -------- ---------- Property management fees...................... $ 289,668 $ 267,391 Charged to general and administrative expense: Partnership administration................. 94,941 84,327 Asset management fee....................... 353,852 331,292 -------- --------- $ 738,461 $ 683,010 ======== ========= Payable to affiliates at June 30, 1998 and December 31, 1997 consisted primarily of unpaid property management fees, Partnership general and administrative expenses and asset management fees and are due and payable from current operations. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND - ------- --------------------------------------------------------------- RESULTS OF OPERATIONS --------------------- FINANCIAL CONDITION - ------------------- There has been no significant change in the operations of the Partnership's properties since December 31, 1997. The Partnership reported net income of $472,172 for the first six months of 1998 as compared to a net loss of $274,316 for the first six months of 1997. Revenue in 1998 increased to $5,075,767 from $4,644,577 in 1997, and expenses decreased to $4,603,595 from $4,918,893. Net cash provided by operating activities was $1,977,072 for the six months ended June 30, 1998. The Partnership expended $185,245 for capital improvements, $29,973 for principal payments on its mortgage note payable and $22,837 for payments on the capitalized land lease obligation. After distributions of $2,249,990 to the limited partners, cash and cash equivalents totaled $2,533,696 at June 30, 1998, a net decrease of $510,973 from the balance at December 31, 1997. RESULTS OF OPERATIONS - --------------------- Revenue: Total Partnership revenue increased by $241,839 and $431,190 for the three and six months ended June 30, 1998, respectively, as compared to the same periods in 1997. The increase was mainly due to increases in rental revenue and other revenue, as discussed below. Rental revenue for the three and six months ended June 30, 1998 increased by $119,364 and $300,603, respectively, in relation to the comparable periods in 1997. Rental revenue increased at all of the Partnership's properties in 1998. The largest increase occurred at Fidelity Plaza Office Building where rental revenue increased by approximately $84,000 due to an increase in average occupancy in 1998 and an increase in parking revenue. An increase in rental rates and a decrease in discounts and concessions given to tenants resulted in increases in rental revenue of approximately $67,000, $64,000 and $43,000 at Kellogg Building, Harbour Club I Apartments and Century Park Office Building, respectively. In the second quarter of 1998, the Partnership recognized $126,035 of other revenue consisting of the collection of tenant accounts receivable that had previously been written off. No such other revenue was recognized in the first six months of the prior year. Expenses: Total expenses decreased by $142,112 and $315,298 for the quarter and six months ended June 30, 1998, respectively, as compared to the same periods in 1997. The decrease was primarily due to decreases in depreciation and amortization and other property operating expenses, partially offset by an increase in general and administrative expenses, as discussed below. Depreciation and amortization expense for the three and six months ended June 30, 1998 decreased by $258,115 and $446,419, respectively, in relation to the comparable periods in the prior year. The decrease was mainly due to Northwest Plaza being classified as an asset held for sale by the Partnership effective August 1, 1997. In accordance with the Financial Accounting Standards Board's Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of," the Partnership ceased recording depreciation on the asset at the time it was placed on the market for sale. Other property operating expenses decreased by $40,793 for the three months and by $64,907 for the six months ended June 30, 1998 as compared to the respective periods in the prior year. The decrease was mainly due to decreased earthquake insurance costs at Fidelity Plaza Office Building. In addition, there was a decline in bad debts at Harbour Club I Apartments and Century Park Office Building. General and administrative expenses for the three and six months ended June 30, 1998 increased by $144,816 and $192,429, respectively, as compared to the same periods in 1997. The increase was mainly due to costs incurred to explore alternatives to maximize the value of the Partnership (see Liquidity and Capital Resources). LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- Cash flow provided by operating activities totaled $1,977,072 for the first six months of 1998 as compared to $548,383 provided during the same period in 1997. The increase in cash from operations was partially due to an increase in cash received from tenants as a result of an increase in rental revenue, as previously discussed, and the receipt of $126,035 of tenant accounts receivable that had previously been written off. In addition, in February 1997, the Partnership was required to pay the plaintiffs' attorneys $690,000 for legal expenses for a lawsuit relating to rescission of limited partnership units. In the first quarter of 1997, the Partnership paid $250,000 of deferred asset management fees to an affiliate. In March 1997, defaulted interest of $184,000 was paid to the lender of Harbour Club I in addition to the required monthly cash flow payment. These increases in cash provided by operating activities were partially offset by an increase in property taxes paid and escrowed, mainly due to an increase in the monthly escrow deposit required by the lender on the Harbour Club I loan. The Partnership expended $185,245 and $448,984 for additions to its real estate investments during the six months ended June 30, 1998 and 1997, respectively. A greater amount was spent in 1997 for tenant improvements at Century Park and Fidelity Plaza office buildings. During the six months ended June 30, 1998, the Partnership made $29,973 in principal payments on its mortgage note payable secured by Harbour Club I as compared to $197,400 made in the six months ended June 30, 1997. Effective January 1, 1993, the Partnership ceased making regularly scheduled payments on its loan and began funding debt service with the excess cash flow of the property. In the second quarter of 1997, the Partnership made all delinquent payments and paid all accrued late charges. Regularly scheduled monthly debt service payments were resumed in July 1997. The Partnership distributed $2,249,990 and $499,994 to the limited partners in the first six months of 1998 and 1997, respectively. In light of the discussions relating to the sale transaction as disclosed, the Partnership is presently deferring any decision with respect to the amount or timing of distributions to limited partners. Short-term liquidity: At June 30, 1998, the Partnership held cash and cash equivalents of $2,533,696. This balance provides a reasonable level of working capital for the Partnership's immediate needs in operating its properties. For the Partnership as a whole, management projects positive cash flow from operations for the remainder of 1998. Only one property, Harbour Club I Apartments, is encumbered with mortgage debt and another property, Fidelity Plaza, is encumbered with lease obligations. The Partnership has budgeted approximately $1,179,000 for necessary capital improvements for all properties in 1998, which are expected to be funded from available cash reserves or from operations of the properties. Additional efforts to maintain and improve Partnership liquidity have included continued attention to property management activities. The objective has been to obtain maximum occupancy rates while holding expenses to levels necessary to maximize cash flows. The Partnership has made capital expenditures on its properties where improvements were expected to increase the competitiveness and marketability of the properties. Long-term liquidity: While the outlook for maintenance of adequate levels of liquidity is favorable, should operations deteriorate and present cash resources be insufficient for current needs, the Partnership would require other sources of working capital. No such sources have been identified. The Partnership has no established lines of credit from outside sources. Other possible actions to resolve cash deficiencies include refinancings, deferral of capital expenditures on Partnership properties except where improvements are expected to increase the competitiveness and marketability of the properties, arranging financing from affiliates or the ultimate sale of the properties. As previously announced, the Partnership has retained PaineWebber ("PaineWebber"), Incorporated as its exclusive financial advisor to explore alternatives to maximize the value of the Partnership including, without limitation, a transaction in which limited partnership interests in the Partnership are converted into cash. The Partnership, through PaineWebber, has provided financial and other information to interested parties and is currently conducting discussions with one such party in an attempt to reach a definitive agreement with respect to a sale transaction. It is possible that the General Partner and its affiliates will receive non-cash consideration for their ownership interests in connection with any such transaction. There can be no assurance that any such agreement will be reached nor the terms thereof. Forward-Looking Information: Within this document, certain statements are made as to the expected occupancy trends, financial condition, results of operations, and cash flows of the Partnership for periods after June 30, 1998. All of these statements are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are not historical and involve risks and uncertainties. The Partnership's actual occupancy trends, financial condition, results of operations, and cash flows for future periods may differ materially due to several factors. These factors include, but are not limited to, the Partnership's ability to control costs, make necessary capital improvements, negotiate sales or refinancings of its properties, and respond to changing economic and competitive factors. Other Information: Management has begun to review its information technology infrastructure to identify any systems that could be affected by the year 2000 problem. The year 2000 problem is the result of computer programs being written using two digits rather than four to define the applicable year. Any programs that have time-sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000. This could result in major systems failure or miscalculations. The information systems used by the Partnership for financial reporting and significant accounting functions were made year 2000 compliant during recent systems conversions. The Partnership is in the process of evaluating the computer systems at the various properties. The Partnership also intends to communicate with suppliers, financial institutions and others to coordinate year 2000 issues. Management believes that the remediation of any outstanding year 2000 conversion issues will not have a material or adverse effect on the Partnership's operations. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS - ------- ----------------- James F. Schofield, Gerald C. Gillett, Donna S. Gillett, Jeffrey Homburger, Elizabeth Jung, Robert Lewis, and Warren Heller et al. v. McNeil Partners L.P., McNeil Investors, Inc., McNeil Real Estate Management, Inc., Robert A. McNeil, Carole J. McNeil, McNeil Pacific Investors Fund 1972, Ltd., McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XII, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund XXI, L.P., McNeil Real Estate Fund XXII, L.P., McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund XXV, L.P., McNeil Real Estate Fund XXVI, L.P., and McNeil Real Estate Fund XXVII, L.P., et al. - Superior Court of the State of California for the County of Los Angeles, Case No. BC133799 (Class and Derivative Action Complaint). The action involves purported class and derivative actions brought by limited partners of each of the fourteen limited partnerships that were named as nominal defendants as listed above (the "Partnerships"). Plaintiffs allege that McNeil Investors, Inc., its affiliate McNeil Real Estate Management, Inc. and three of their senior officers and/or directors (collectively, the "Defendants") breached their fiduciary duties and certain obligations under the respective Amended Partnership Agreement. Plaintiffs allege that Defendants have rendered such Units highly illiquid and artificially depressed the prices that are available for Units on the resale market. Plaintiffs also allege that Defendants engaged in a course of conduct to prevent the acquisition of Units by an affiliate of Carl Icahn by disseminating purportedly false, misleading and inadequate information. Plaintiffs further allege that Defendants acted to advance their own personal interests at the expense of the Partnerships' public unit holders by failing to sell Partnership properties and failing to make distributions to unitholders. On December 16, 1996, the Plaintiffs filed a consolidated and amended complaint. Plaintiffs are suing for breach of fiduciary duty, breach of contract and an accounting, alleging, among other things, that the management fees paid to the McNeil affiliates over the last six years are excessive, that these fees should be reduced retroactively and that the respective Amended Partnership Agreements governing the Partnerships are invalid. Defendants filed a demurrer to the consolidated and amended complaint and a motion to strike on February 14, 1997, seeking to dismiss the consolidated and amended complaint in all respects. A hearing on Defendant's demurrer and motion to strike was held on May 5, 1997. The Court granted Defendants' demurrer, dismissing the consolidated and amended complaint with leave to amend. On October 31, 1997, the Plaintiffs filed a second consolidated and amended complaint. The case has been stayed pending settlement discussions. While actively working toward a final resolution, there can be no assurances regarding settlement. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ------- --------------------------------- (a) Exhibits. Exhibit Number Description ------- ----------- 4. Amended and Restated Limited Partnership Agreement dated March 26, 1992 (incorporated by reference to the Current Report of the registrant on Form 8-K dated March 26, 1992, as filed on April 9, 1992). 4.1 Amendment No. 1 to the Amended and Restated Limited Partnership Agreement of McNeil Real Estate Fund XXV, L.P. dated June 1995 (incorporated by reference to the Quarterly Report of the registrant on form 10-Q for the period ended June 30, 1995, as filed on August 14, 1995). 11. Statement regarding computation of Net Income (Loss) per Thousand Limited Partnership Units: Net income (loss) per thousand limited partnership units is computed by dividing net income (loss) allocated to the limited partners by the weighted average number of limited partnership units outstanding expressed in thousands. Per thousand unit information has been computed based on 82,944 weighted average thousand limited partnership units outstanding in 1998 and 1997. 27. Financial Data Schedule for the quarter ended June 30, 1998. (b) Reports on Form 8-K. There were no reports on Form 8-K filed during the quarter ended June 30, 1998. MCNEIL REAL ESTATE FUND XXV, L.P. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized: McNEIL REAL ESTATE FUND XXV, L.P. By: McNeil Partners, L.P., General Partner By: McNeil Investors, Inc., General Partner August 14, 1998 By: /s/ Ron K. Taylor - --------------- ---------------------------------------- Date Ron K. Taylor President and Director of McNeil Investors, Inc. (Principal Financial Officer) August 14, 1998 By: /s/ Carol A. Fahs - --------------- ---------------------------------------- Date Carol A. Fahs Vice President of McNeil Investors, Inc. (Principal Accounting Officer)