<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the period ended June 30, 1994
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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: 0-12537
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FIRST CAPITAL INCOME PROPERTIES, LTD. - SERIES VIII
- - --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 59-2192277
- - ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Two North Riverside Plaza, Suite 950, Chicago, Illinois 60606-2607
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(Address of principal executive offices) (Zip Code)
(312) 207-0020
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(Registrant's telephone number, including area code)
Not applicable
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(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
----- -----
DOCUMENTS INCORPORATED BY REFERENCE:
The First Amended and Restated Certificate and Agreement of Limited Partnership
filed as Exhibit A to the Partnership's Prospectus dated July 28, 1982, included
in the Partnership's Registration Statement on Form S-11, is incorporated herein
by reference in Part I of this report.
<PAGE>
PART I. FINANCIAL INFORMATION
BALANCE SHEETS
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
June 30,
1994 December 31,
(Unaudited) 1993
- - ------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investment in commercial rental properties:
Land $ 7,260,400 $ 8,209,700
Buildings and improvements 35,937,300 66,301,200
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43,197,700 74,510,900
Accumulated depreciation and amortization (11,295,700) (18,136,100)
- - ------------------------------------------------------------------------------
Total investment properties, net of accumulated
depreciation and amortization 31,902,000 56,374,800
Investment in mortgage loan receivable 1,064,000 1,064,000
- - ------------------------------------------------------------------------------
32,966,000 57,438,800
Cash and cash equivalents 15,866,500 10,171,300
Restricted certificate of deposit 75,000
Rents receivable 271,600 291,100
Escrow deposits 144,800 65,300
Other assets (net of accumulated amortization on
loan acquisition costs of $88,100 and $97,500,
respectively) 119,000 528,900
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$ 49,367,900 $ 68,570,400
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LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage loans payable $ 7,000,000 $ 28,611,600
Accounts payable and accrued expenses 497,100 312,500
Due to Affiliates 77,400 86,500
Security deposits 111,100 99,600
Distributions payable 777,800 995,500
Other liabilities 27,000 164,200
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8,490,400 30,269,900
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Partners' capital (deficit):
General Partners 180,500 (44,600)
Limited Partners (70,000 Units authorized, issued
and outstanding) 40,697,000 38,345,100
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40,877,500 38,300,500
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$ 49,367,900 $ 68,570,400
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</TABLE>
STATEMENTS OF PARTNERS' CAPITAL
For the six months ended June 30, 1994
and the year ended December 31, 1993
(Unaudited)
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
- - -------------------------------------------------------------------------------
<S> <C> <C> <C>
Partners' (deficit) capital, January 1,
1993 $ (19,500) $ 41,698,600 $ 41,679,100
Net income (loss) for the year ended
December 31, 1993 261,000 (778,900) (517,900)
Distributions for the year ended
December 31, 1993 (286,100) (2,574,600) (2,860,700)
- - -------------------------------------------------------------------------------
Partners' (deficit) capital, December
31, 1993 (44,600) 38,345,100 38,300,500
Net income for the six months ended
June 30, 1994 380,700 18,801,900 19,182,600
Distributions for the six months ended
June 30, 1994 (155,600) (16,450,000) (16,605,600)
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Partners' capital, June 30, 1994 $ 180,500 $ 40,697,000 $ 40,877,500
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</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATEMENTS OF INCOME AND EXPENSES
For the quarters ended June 30, 1994 and 1993
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)
<TABLE>
<CAPTION>
1994 1993
- - -------------------------------------------------------------------------------
<S> <C> <C>
Income:
Rental $ 1,387,600 $ 2,307,300
Interest on short-term investments 242,500 76,200
Interest on mortgage loan receivable 29,200 37,400
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1,659,300 2,420,900
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Expenses:
Interest 203,300 711,300
Depreciation and amortization 317,100 561,700
Real estate taxes and insurance 183,300 200,800
Repairs and maintenance 132,500 147,100
Property operating 240,900 283,900
General and administrative 42,900 72,200
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1,120,000 1,977,000
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Income before gain on sale of property, provision
for value impairment and extraordinary (loss) on
early extinguishment of debt 539,300 443,900
Gain on sale of property 18,964,600
Provision for value impairment (1,900,000)
- - -------------------------------------------------------------------------------
Net income (loss) before extraordinary (loss) on
early extinguishment of debt 19,503,900 (1,456,100)
Extraordinary (loss) on early extinguishment of
debt (914,300)
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Net income (loss) $18,589,600 $(1,456,100)
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Net income allocated to General Partners $ 302,900 $ 36,500
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Net income (loss) allocated to Limited Partners $18,286,700 $(1,492,600)
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Net income (loss) before extraordinary (loss) on
early extinguishment of debt allocated to Limited
Partners per Unit (70,000 Units authorized, issued
and outstanding) $ 274.14 $ (21.32)
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Net income (loss) allocated to Limited Partners per
Unit (70,000 Units authorized, issued and
outstanding) $ 261.24 $ (21.32)
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</TABLE>
STATEMENTS OF INCOME AND EXPENSES
For the six months ended June 30, 1994 and 1993
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)
<TABLE>
<CAPTION>
1994 1993
- - -------------------------------------------------------------------------------
<S> <C> <C>
Income:
Rental $ 3,592,800 $ 4,595,000
Interest on short-term investments 319,400 190,000
Interest on mortgage loan receivable 58,300 80,000
- - -------------------------------------------------------------------------------
3,970,500 4,865,000
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Expenses:
Interest 794,600 1,502,500
Depreciation and amortization 831,000 1,122,700
Real estate taxes and insurance 363,700 405,900
Repairs and maintenance 264,700 269,000
Property operating 483,900 565,200
General and administrative 100,300 121,500
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2,838,200 3,986,800
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Income before gain on sale of property, (loss) on
disposition of property, provision for value
impairment and extraordinary (loss) on early
extinguishment of debt 1,132,300 878,200
Gain on sale of property 18,964,600
(Loss) on disposition of property (12,600)
Provision for value impairment (1,900,000)
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Net income (loss) before extraordinary (loss) on
early extinguishment of debt 20,096,900 (1,034,400)
Extraordinary (loss) on early extinguishment of
debt (914,300) (540,100)
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Net income (loss) $19,182,600 $(1,574,500)
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Net income allocated to General Partners $ 380,700 $ 86,500
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Net income (loss) allocated to Limited Partners $18,801,900 $(1,661,000)
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Net income (loss) before extraordinary (loss) on
early extinguishment of debt allocated to Limited
Partners per Unit (70,000 Units authorized, issued
and outstanding) $ 281.50 $ (16.09)
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Net income (loss) allocated to Limited Partners per
Unit (70,000 Units authorized, issued and
outstanding) $ 268.60 $ (23.73)
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</TABLE>
STATEMENTS OF CASH FLOWS
For the six months ended June 30, 1994 and 1993
(Unaudited)
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
1994 1993
- - -----------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 19,182,600 $ (1,574,500)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 831,000 1,122,700
(Gain) on sale of property (18,964,600)
Loss on disposition of property 12,600
Provision for value impairment 1,900,000
Extraordinary loss on early extinguishment of
debt 914,300 540,100
Changes in assets and liabilities:
Decrease in rents receivable 19,500 139,300
Decrease in other assets 21,400 132,600
Increase in accounts payable and accrued
expenses 184,600 46,400
(Decrease) increase in due to Affiliates (9,100) 28,200
(Decrease) in other liabilities (137,200) (7,700)
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Net cash provided by operating activities 2,042,500 2,339,700
- - -----------------------------------------------------------------------------
Cash flows from investing activities:
Proceeds from sale of property 43,302,700
Payments for capital and tenant improvements (307,800) (140,900)
(Increase) in escrow deposits (79,500) (91,200)
Maturity of (investment in) restricted
certificate of deposit 75,000 (75,000)
Costs incurred on disposition of property (12,600)
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Net cash provided by (used for) investing
activities 42,990,400 (319,700)
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Cash flows from financing activities:
Proceeds from issuance of mortgage loan 22,500,000
Principal payments on mortgage loans payable (21,611,600) (19,295,000)
Prepayment cost on mortgage loans payable (914,300) (540,100)
Distributions paid to Partners (16,823,300) (993,300)
Loan acquisition costs incurred (387,500)
Refund of deposit on loan refinancing 225,000
Increase (decrease) in security deposits 11,500 (11,300)
- - -----------------------------------------------------------------------------
Net cash (used for) provided by financing
activities (39,337,700) 1,497,800
- - -----------------------------------------------------------------------------
Net increase in cash and cash equivalents 5,695,200 3,517,800
Cash and cash equivalents at the beginning of
the period 10,171,300 6,829,800
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Cash and cash equivalents at the end of the
period $ 15,866,500 $ 10,347,600
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Supplemental information:
Interest paid during the period $ 794,600 $ 1,499,000
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</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
June 30, 1994
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
DEFINITION OF SPECIAL TERMS:
Capitalized terms used in this report have the same meaning as those terms have
in the Partnership's Registration Statement on Form S-11, filed with the
Securities and Exchange Commission. Definitions of these terms are contained in
Article III of the First Amended and Restated Certificate and Agreement of
Limited Partnership, which is incorporated herein by reference.
ACCOUNTING POLICIES:
The financial statements have been prepared in accordance with generally
accepted accounting principles. Under this method of accounting, revenues are
recorded when earned and expenses are recorded when incurred.
The financial information included in these financial statements is unaudited;
however, in management's opinion, all adjustments (consisting of only normal,
recurring accruals) necessary for a fair presentation of the results of
operations for the periods included have been made. Results of operations for
the quarter and six months ended June 30, 1994, are not necessarily indicative
of the operating results for the year ending December 31, 1994.
The financial statements include the Partnership's 50% interest in a joint
venture which owned the El Paso Natural Gas Building ("El Paso"), prior to its
sale on April 6, 1994. The joint venture is operated under the control of the
Managing General Partner. Accordingly, the Partnership's pro rata share of the
venture's revenues, expenses, assets, liabilities and capital is included in
the financial statements.
Cash equivalents are considered all highly liquid investments purchased with a
maturity of three months or less.
Property sales or dispositions are recorded when title transfers and sufficient
consideration has been received by the Partnership. Upon disposition, the
related costs and accumulated depreciation and amortization are removed from
the respective accounts. Any gain or loss on sale or disposition is recognized
in accordance with generally accepted accounting principles.
Restricted certificate of deposit represented funds reserved from loan proceeds
received in connection with the refinancing of El Paso, which funds were placed
in an interest-bearing investment. Under the terms of the loan agreement this
amount was available to be used for future loan servicing costs. As a result of
the sale of El Paso, these funds are no longer restricted.
Reference is made to the Partnership's annual report for the year ended
December 31, 1993, for a description of other accounting policies and
additional details of the Partnership's financial condition, results of
operations, changes in Partners' capital and changes in cash balances for the
year then ended. The details provided in the notes thereto have not changed
except as a result of normal transactions in the interim or as otherwise
disclosed herein.
2. RELATED PARTY TRANSACTIONS:
Subsequent to December 23, 1982, the Termination of the Offering, the General
Partners are entitled to 10% of distributable Cash Flow, as a Partnership
Management Fee. In accordance with the Partnership Agreement, Net Profits
(exclusive of Net Profits from the sale or disposition of Partnership
properties) shall be allocated first to the General Partners in an amount equal
to the greater of the General Partners' Partnership Management Fee, or 1% of
such Net Profits and the balance, if any, to the Unit Holders. Net Profits from
the sale of a Partnership property shall be allocated: first, to the General
Partners and the Unit Holders with negative balances in their capital accounts,
pro rata in proportion to such respective negative balances, to the extent of
the total of such negative balances; second, to the General Partners, in an
amount necessary to make the aggregate amount of their capital accounts equal
to the greater of the Sale Proceeds to be distributed to the General Partners
or 1% of such Net Profits; and third, the balance, if any, to the Unit Holders.
For the quarter and six months ended June 30, 1994, the General Partners were
allocated distributable Cash Flow, and accordingly, Net Profits from operations
of approximately $77,800 and $155,600, respectively, and Net Profits from the
sale of a Partnership property of approximately $225,100, which is net of a
loss on the early extinguishment of debt of approximately $11,400.
Fees and reimbursements paid and payable by the Partnership to Affiliates
during the quarter and six months ended June 30, 1994 are as follows:
<TABLE>
<CAPTION>
Paid
Quarter Six Months Payable
- - -----------------------------------------------------------------------------
<S> <C> <C> <C>
Real estate commissions (a) None None $37,700
Property management and leasing fees $ 81,300 $155,800 34,800
Reimbursement of property insurance premiums, at
cost 13,400 36,500 None
Reimbursement of expenses, at cost:
(1) Accounting 7,600 11,500 2,800
(2) Investor communication 3,400 5,700 2,100
(3) Mortgage servicing 1,100 2,400 None
(4) Legal 16,400 30,600 None
- - -----------------------------------------------------------------------------
$123,200 $242,500 $77,400
- - -----------------------------------------------------------------------------
</TABLE>
(a) As of June 30, 1994, approximately $37,700 was due to the Managing General
Partner for real estate commissions earned in connection with the sales of
two Partnership properties. These commissions have been accrued but not
paid. Under the terms of the Partnership Agreement, these commissions will
not be paid until such time as the Limited Partners have received
cumulative distributions of Sale or Refinancing Proceeds equal to 100% of
their Original Capital Contribution plus a cumulative return (including all
Cash Flow which has been distributed to the Limited Partners from the
initial date of investment) of 6% simple interest per annum on their
Capital Investment from the initial date of investment.
3. PROPERTY SALE:
On April 6, 1994 First Capital Kayser Center, a joint venture in which the
Partnership and an Affiliated partnership each have a 50% interest, sold its
interest in the El Paso Natural Gas Building, located in El Paso, Texas, for a
sale price of $88,450,000. The outstanding indebtedness on this property of
approximately $42,757,000 was satisfied at closing. The joint venture incurred
selling expenses of approximately $3,673,300, of which approximately $1,828,600
related to a prepayment penalty on the early extinguishment of debt. The joint
venture received net sale proceeds of approximately $84,776,700, of which the
Partnership's share was approximately $42,388,400. The net gain reported by the
Partnership for financial statement purposes was approximately $18,050,300. For
tax reporting purposes the Partnership will report a gain of approximately
$28,681,600. This sale was an all-cash sale, with no further involvement on the
part of the Partnership.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Reference is made to the Partnership's annual report for the year ended
December 31, 1993, for a discussion of the Partnership's business.
OPERATIONS
One of the Partnership's objectives is to dispose of its properties when market
conditions allow for the achievement of the maximum possible sales price. In
the interim, the Partnership continues to manage and maintain its remaining
properties. Notwithstanding the Partnership's intention relative to property
sales, another primary objective of the Partnership is to provide cash
distributions to Limited Partners from Cash Flow generated by Partnership
operations. To the extent cash distributions exceed net income, such excess
distributions will be treated as a return of capital. The statements of cash
flows presented in the financial statements represent a reconciliation of the
changes in cash balances. Cash Flow, as defined in the Partnership Agreement,
is generally not equal to Partnership net income or cash flows as determined
under generally accepted accounting principles, since certain items are treated
differently under the Partnership Agreement than under generally accepted
accounting principles. Management believes that in order to facilitate a clear
understanding of the Partnership's operations, an analysis of Cash Flow (as
defined in the Partnership Agreement) should be examined in conjunction with an
analysis of net income or cash flows, as defined by generally accepted
accounting principles. The amount of Cash Flow and the return on Capital
Investment are not indicative of actual distributions and actual returns on
Capital Investment.
<TABLE>
<CAPTION>
Comparative Cash Flow Results
For the Six Months
For the Quarters Ended Ended
6/30/94 6/30/93 6/30/94 6/30/93
- - -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Amount of Cash Flow (as
defined in the Partnership
Agreement) $ 856,400 $ 784,900 $ 1,730,200 $ 1,624,200
Average Capital Investment $64,983,300 $70,000,000 $67,491,700 $70,000,000
Annualized return on average
Capital Investment
(Annualized Cash
Flow/average Capital
Investment) 5.27% 4.49% 5.13% 4.64%
- - -----------------------------------------------------------------------------
</TABLE>
During the disposition phase of the Partnership's life cycle, comparisons of
Cash Flow results between periods are complicated. Partnership Cash Flow is
generally expected to decline as real property interests are sold or disposed
since the Partnership no longer receives Cash Flow generated from such real
property interests. Accordingly, rental income, interest expense, property
operating expenses, repairs and maintenance and real estate taxes are expected
to decline as well, but will continue to comprise the significant components of
Cash Flow and operating results until the final property is sold. Also, during
the disposition phase, cash and cash equivalents increase as Sale Proceeds are
received and decrease as the Partnership utilizes these proceeds for the
purposes of distributions to Limited Partners, mortgage debt repayments or
making improvements to the Partnership's remaining properties. Prior to being
utilized for such purposes, these proceeds are invested in short-term money
market instruments. Sale and Refinancing Proceeds are excluded from the
determination of Cash Flow.
The increase in Cash Flow results for the quarter and six months ended June 30,
1994 when compared to the quarter and six months ended June 30, 1993 was
primarily due to: 1) the significant reduction in debt service payments as a
result of the sale of the El Paso Natural Gas Building ("El Paso") and the
corresponding payoff of its mortgage loan; 2) decreased interest expense due to
the repayment in 1993 of the mortgage loan collateralized by Old Mill Place
Shopping Center ("Old Mill") and Tuckerstone Commons / Rooker Royal Warehouses
I & II ("Rooker"); 3) increased rental revenues earned at Brookwood Metroplex
Office Buildings I and II ("Brookwood") and Walker Springs Plaza Shopping
Center ("Walker Springs"); 4) increased interest income earned on short-term
investments due to an increase in funds available for such investments as a
result of the sale of El Paso; 5) the disposition in August 1993 of Hairston
Memorial Crossing Shopping Center ("Hairston") which had been operating at a
deficit and 6) decreased general and administrative expenses primarily due to
lower professional service costs. Partially offsetting the increase in Cash
Flow results was: 1) the absence of rental revenues under the net lease
agreement at El Paso as a result of its sale and decreased rental revenues at
Old Mill and Rooker; 2) increased real estate tax expense at Walker and Old
Mill and 3) increased property operating expenses at Walker.
Rental revenues at Brookwood for the six months ended June 30, 1994 and 1993
were approximately $1,091,200 and $914,200, respectively, and for the quarters
ended June 30, 1994 and 1993 were approximately $556,800 and $464,200,
respectively. The increase in rental revenues for the periods under comparison
was due to increases in the quarterly and six-month average occupancy rates
from 88% and 89%, respectively, in 1993 to 99% and 96%, respectively, in 1994
as well as to an increase in tenant expense reimbursements.
Rental revenues at El Paso for the six months ended June 30, 1994 and 1993 were
approximately $1,003,400 and $1,806,700, respectively, and for the quarters
ended June 30, 1994 and 1993 were approximately $62,700 and $910,800,
respectively. The decrease in rental revenues for the periods under comparison
was due to the sale of the property on April 6, 1994, as previously discussed.
Rental revenues at Old Mill for the six months ended June 30, 1994 and 1993
were approximately $648,900 and $721,000, respectively, and for the quarters
ended June 30, 1994 and 1993 were approximately $336,000 and $356,800,
respectively. The decrease in rental revenues for the periods under comparison
was due to decreased tenant reimbursements in 1994 for 1993 real estate taxes
as well as a decrease in the average effective rental rates charged to tenants.
Rental revenues at Walker Springs for the six months ended June 30, 1994 and
1993 were approximately $552,300 and $524,000, respectively, and for the
quarters ended June 30, 1994 and 1993 were approximately $277,600 and $265,500,
respectively. The increase in rental revenues during the periods under
comparison was due to an increase in the average effective rental rates charged
to tenants. In addition, tenant reimbursements for real estate taxes increased
for the six months ended June 30, 1994.
Rental revenues at Rooker for the six months ended June 30, 1994 and 1993 were
approximately $296,800 and $347,100, respectively, and for the quarters ended
June 30, 1994 and 1993 were approximately $154,400 and $167,000, respectively.
The decrease in rental revenues for the periods under comparison was due to
decreases in the quarterly and six-month average occupancy rates from 92% and
92%, respectively, in 1993 to 82% and 85%, respectively, in 1994 as a result of
the loss of two major tenants during the third quarter of 1993. Partially
offsetting the decrease in rental revenues was increased tenant reimbursements
in 1994 for 1993 real estate taxes.
To increase occupancy levels at the Partnership's properties, the Managing
General Partner, through its Affiliated asset and property management groups,
continues to take the necessary actions deemed appropriate for the properties
discussed above. Some of these actions include: 1) implementation of marketing
programs, including hiring of third-party leasing agents or providing on-site
leasing personnel, advertising, direct mail campaigns and development of
building brochures; 2) early renewal of existing tenants and addressing any
expansion needs these tenants may have; 3) promotion of local broker events and
networking with local brokers; 4) networking with national level retailers; 5)
cold-calling other businesses and tenants in the market area; and 6) providing
rental concessions or competitively pricing rental rates depending on market
conditions.
LIQUIDITY AND CAPITAL RESOURCES
The increase in the Partnership's cash position as of June 30, 1994 when
compared to December 31, 1993 resulted primarily from the receipt of net
proceeds from the sale of El Paso, after the payoff of the mortgage loan and
prepayment penalty, and the net cash provided by operating activities exceeding
the distributions paid to Partners and the payments for capital and tenant
improvements. The liquid assets of the Partnership as of June 30, 1994, are
comprised of amounts held for working capital purposes, undistributed Cash Flow
and undistributed Sale and Refinancing Proceeds.
Net cash provided by operating activities decreased from approximately
$2,339,700 for the six months ended June 30, 1993 to approximately $2,042,500
for the six months ended June 30, 1994. This decrease was primarily due to the
sale of El Paso and, to a lesser extent, the timing of the collection of rental
revenues. The decrease was partially offset by the increase in Cash Flow
results, as previously discussed.
Net cash (used for) provided by investing activities changed from approximately
($319,700) for the six months ended June 30, 1993 to approximately $42,990,400
for the six months ended June 30, 1994. This change was primarily due to the
receipt of proceeds from the sale of El Paso along with the maturity of the
restricted certificate of deposit established in connection with the El Paso
refinancing completed in 1993, partially offset by an increase in payments for
capital and tenant improvements.
On April 6, 1994 First Capital Kayser Center, a joint venture in which the
Partnership and an Affiliated partnership each had a 50% interest, sold its
interest in El Paso, located in El Paso, Texas, for a sale price of
$88,450,000. The Partnership's share of Sale Proceeds was approximately
$21,009,900 net of selling expenses, including the mortgage prepayment penalty,
and the payoff of the mortgage loan collateralized by the property. The
Partnership distributed $15,050,000 of these proceeds to the Limited Partners
in May 1994. The remaining proceeds were retained by the Partnership and added
to working capital. A portion of these proceeds will be utilized in October
1994 to prepay the Partnership's last remaining mortgage loan which is
collateralized by Brookwood.
During the six months ended June 30, 1994, the Partnership spent approximately
$307,800 for capital and tenant improvements and has budgeted to spend
approximately $350,000 during the remainder of 1994. Of the remaining budgeted
amount, approximately $125,000 and $120,000 relates to anticipated capital and
tenant improvements and leasing costs expected to be incurred at Walker Springs
and Old Mill, respectively. The Managing General Partner believes these
improvements will be necessary to secure new tenants and to maintain occupancy
levels as existing tenant leases expire.
Net cash provided by (used for) financing activities changed from approximately
$1,497,800 for the six months ended June 30, 1993 to approximately
($39,337,700) for the six months ended June 30, 1994. This change was primarily
due to the payoff of the mortgage loan collateralized by El Paso, including a
prepayment penalty, and the distribution of Sale Proceeds to Partners in 1994
exceeding the net proceeds and deposit refund received on the refinancing of El
Paso in 1993, reduced by loan acquisition costs and a prepayment penalty
relating to the previous loan.
The Managing General Partner continues to take a conservative approach to
projections of future rental income and to maintain a significant level of cash
reserves for the Partnership. The cash reserves are needed due to the
anticipated capital and tenant improvements necessary to be made to the
Partnership's remaining properties during the next several years. As a result
of these concerns, the Partnership continues to reserve amounts from Cash Flow
to supplement working capital reserves and has also retained a portion of the
Sale and Refinancing Proceeds discussed in previous paragraphs. For the quarter
and six months ended June 30, 1994, Cash Flow retained to supplement working
capital reserves approximated $78,600 and $174,600, respectively. The Managing
General Partner believes that the Partnership's current cash position along
with any additional amounts retained from future Cash Flow or Sale Proceeds
will be sufficient to cover budgeted expenditures as well as the prepayment of
the Brookwood mortgage loan and any other requirements which may reasonably be
foreseen.
Distributions to Limited Partners for the quarter ended June 30, 1994 were
declared at $10.00 per Unit. Cash distributions are made 60 days after the
quarter-end. The amount of Cash Flow available for distributions to Partners is
ultimately dependent upon the performance of the Partnership's investments as
well as the amount of Cash Flow retained for future cash requirements.
Therefore, there can be no assurance of the amount of future Cash Flow
available for distribution to Partners.
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
- - ------- ---------------------------------
(a) Exhibits: None
(b) Reports on Form 8-K:
A report on Form 8-K dated April 6, 1994 was filed reporting the sale
of the El Paso Natural Gas Building, located in El Paso, Texas.
<PAGE>
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.
FIRST CAPITAL INCOME PROPERTIES, LTD. - SERIES VIII
BY: FIRST CAPITAL FINANCIAL CORPORATION
MANAGING GENERAL PARTNER
Date: August 12, 1994 By: /s/ DOUGLAS CROCKER II
--------------- --------------------------------------------
DOUGLAS CROCKER II
President and Chief Executive Officer
Date: August 12, 1994 By: /s/ MICHAEL J. MCHUGH
--------------- ---------------------------------------------
MICHAEL J. MCHUGH
Senior Vice President and
Chief Financial Officer
