<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, 1996
-----------------------------------------
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 0-12946
------------------------------------------
FIRST CAPITAL INCOME PROPERTIES, LTD. - SERIES IX
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 58-2255857
- ------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Two North Riverside Plaza, Suite 950, Chicago, Illinois 60606-2607
- ------------------------------------------------------- --------------------
(Address of principal executive offices) (Zip Code)
(312) 207-0200
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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 May 24, 1983, included
in the Partnership's Registration Statement on Form S-11, is incorporated herein
by reference in Part I of this report.
<PAGE>
BALANCE SHEETS
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
June 30,
1996 December 31,
(Unaudited) 1995
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<S> <C> <C>
ASSETS
Investment in commercial rental properties:
Land $12,472,900 $12,472,900
Buildings and improvements 59,127,200 58,832,000
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71,600,100 71,304,900
Accumulated depreciation and amortization (18,243,100) (17,073,500)
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Total investment properties, net of accumulated
depreciation and amortization 53,357,000 54,231,400
Cash and cash equivalents 8,026,200 15,524,300
Investments in debt securities 7,897,600
Rents receivable 611,900 708,300
Escrow deposits 44,400 71,200
Other assets (including loan acquisition costs, net
of accumulated amortization of $134,700 and
$115,000, respectively) 306,600 358,900
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$70,243,700 $70,894,100
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LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage loan payable $ 7,640,600 $ 8,039,400
Accounts payable and accrued expenses 1,141,400 1,034,800
Due to Affiliates 110,700 17,200
Distributions payable 1,166,700 1,055,600
Security deposits 146,600 147,200
Other liabilities 4,100 145,100
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10,210,100 10,439,300
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Partners' capital:
General Partners (deficit) (90,000) (90,000)
Limited Partners (100,000 units issued and
outstanding) 60,123,600 60,544,800
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60,033,600 60,454,800
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$70,243,700 $70,894,100
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</TABLE>
STATEMENTS OF PARTNERS' CAPITAL
For the six months ended June 30, 1996 (Unaudited)
and the year ended December 31, 1995
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Partners' (deficit) capital,
January 1, 1995 $ 0 $69,952,300 $69,952,300
Net income (loss) for the year ended
December 31, 1995 298,900 (5,907,500) (5,608,600)
Distributions for the year ended
December 31, 1995 (388,900) (3,500,000) (3,888,900)
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Partners' (deficit) capital,
December 31, 1995 (90,000) 60,544,800 60,454,800
Net income for the six months ended June
30, 1996 227,800 1,628,800 1,856,600
Distributions for the six months ended
June 30, 1996 (227,800) (2,050,000) (2,277,800)
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Partners' (deficit) capital,
June 30, 1996 $(90,000) $60,123,600 $60,033,600
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</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
STATEMENTS OF INCOME AND EXPENSES
For the quarters ended June 30, 1996 and 1995
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)
<TABLE>
<CAPTION>
1996 1995
- ------------------------------------------------------------------------
<S> <C> <C>
Income:
Rental $2,896,300 $2,680,900
Interest 208,300 255,200
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3,104,600 2,936,100
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Expenses:
Interest 193,100 223,400
Depreciation and amortization 597,100 574,600
Property operating:
Affiliates 189,300 170,200
Nonaffiliates 453,700 565,300
Real estate taxes 268,300 224,100
Insurance--Affiliate 30,700 13,000
Repairs and maintenance 288,000 291,800
General and administrative:
Affiliates 11,200 10,700
Nonaffiliates 109,300 87,500
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2,140,700 2,160,600
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Net income $ 963,900 $ 775,500
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Net income allocated to General Partners $ 116,700 $ 94,400
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Net income allocated to Limited Partners $ 847,200 $ 681,100
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Net income allocated to Limited Partners per Unit
(100,000 Units outstanding) $ 8.47 $ 6.81
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</TABLE>
STATEMENTS OF INCOME AND EXPENSES
For the six months ended June 30, 1996 and 1995
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)
<TABLE>
<CAPTION>
1996 1995
- ------------------------------------------------------------------------
<S> <C> <C>
Income:
Rental $5,732,200 $5,335,100
Interest 412,200 489,700
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6,144,400 5,824,800
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Expenses:
Interest 395,300 456,200
Depreciation and amortization 1,189,300 1,147,800
Property operating:
Affiliates 402,200 355,000
Nonaffiliates 905,500 966,600
Real estate taxes 515,600 484,700
Insurance--Affiliate 61,500 53,400
Repairs and maintenance 597,400 583,800
General and administrative:
Affiliates 34,100 34,800
Nonaffiliates 186,900 174,300
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4,287,800 4,256,600
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Net income $1,856,600 $1,568,200
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Net income allocated to General Partners $ 227,800 $ 183,300
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Net income allocated to Limited Partners $1,628,800 $1,384,900
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Net income allocated to Limited Partners per Unit
(100,000 Units outstanding) $ 16.29 $ 13.85
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</TABLE>
STATEMENTS OF CASH FLOWS
For the six months ended June 30, 1996 and 1995
(Unaudited)
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
1996 1995
- -------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,856,600 $ 1,568,200
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,189,300 1,147,800
Changes in assets and liabilities:
Decrease in rents receivable 96,400 59,300
Decrease (increase) in other assets 32,600 (106,500)
Increase in accounts payable and accrued expenses 106,600 15,000
Increase (decrease) in due to Affiliates 93,500 (10,300)
(Decrease) in other liabilities (141,000) (11,000)
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Net cash provided by operating activities 3,234,000 2,662,500
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Cash flows from investing activities:
Payments for capital and tenant improvements (295,200) (1,136,700)
(Increase) in investments in debt securities (7,897,600)
Decrease (increase) in escrow deposits 26,800 (34,800)
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Net cash (used for) investing activities (8,166,000) (1,171,500)
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Cash flows from financing activities:
Proceeds from issuance of mortgage loan payable 8,500,000
Repayment of mortgage loan payable (6,650,000)
Principal payments on mortgage loan payable (398,800) (224,800)
Distributions paid to Partners (2,166,700) (1,611,100)
Loan acquisition costs incurred (69,900)
(Decrease) increase in security deposits (600) 9,100
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Net cash (used for) financing activities (2,566,100) (46,700)
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Net (decrease) increase in cash and cash equivalents (7,498,100) 1,444,300
Cash and cash equivalents at the beginning of the
period 15,524,300 15,085,400
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Cash and cash equivalents at the end of the period $ 8,026,200 $16,529,700
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Supplemental information:
Interest paid during the period $ 332,000 $ 506,200
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</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
June 30, 1996
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 filed with the Securities and
Exchange Commission on Form S-11. Definitions of these terms are contained in
Article III of the First Amended and Restated Certificate and Agreement of
Limited Partnership, which is included in the Registration Statement and
incorporated herein by reference.
ACCOUNTING POLICIES:
The financial statements have been prepared in accordance with generally
accepted accounting principles ("GAAP"). Under this method of accounting,
revenues are recorded when earned and expenses are recorded when incurred.
Preparation of the Partnership's financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
The 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, 1996 are not necessarily indicative
of the operating results for the year ending December 31, 1996.
The financial statements include the Partnership's 50% interest in a joint
venture with an Affiliated partnership. This joint venture was formed for the
purpose of acquiring a 100% interest in certain real property and is operated
under the common control of the Managing General Partner. Accordingly, the
Partnership's pro rata share of the joint venture's revenues, expenses, assets,
liabilities and Partners' capital was included in the financial statements.
Commercial rental properties held for investment are recorded at cost, net of
any provisions for value impairment, and depreciated (exclusive of amounts, if
any, allocated to land and value impairments) on the straight-line method over
their estimated useful lives. Upon classifying a commercial rental property as
held for disposition, no depreciation or amortization of such property is
provided in the financial statements. Lease acquisition fees are recorded at
cost and amortized over the life of the lease. Maintenance and repair costs are
expensed against operations as incurred; expenditures for improvements are
capitalized to the appropriate property accounts and depreciated over the
estimated life of the improvements.
Loan acquisition costs are amortized over the term of the mortgage loan made in
connection with the acquisition of Partnership properties or refinancing of
Partnership loans. When a property is disposed of or a loan is refinanced, the
related loan acquisition costs and accumulated amortization are removed from
the respective accounts and any unamortized balance is expensed.
During the first quarter of 1996, the Partnership adopted Financial Accounting
Standards Board Statement No. 121 "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of" (the "Standard"). The
Standard established guidance for determining if the value of defined assets
are impaired, and if so, how impairment losses should be measured and reported
in the financial statements. The Standard also addressed the accounting for
long-lived assets that are expected to be disposed of. The adoption of the
Standard did not have a material effect on the Partnership's financial
statements.
Cash equivalents are considered all highly liquid investments with maturity of
three months or less when purchased.
Investments in debt securities at June 30, 1996 are comprised of corporate debt
securities of $5,909,100 and obligations of the United States government of
$1,988,500 and are classified as held-to-maturity. These investments are
carried at their amortized cost basis in the financial statements, which
approximated fair market value. All of these securities had maturities of less
than one year when purchased.
Certain reclassifications have been made to the previously reported 1995
statements in order to provide comparability with the 1996 statements. These
reclassifications have no effect on net income or Partners' (deficit) capital.
Reference is made to the Partnership's annual report for the year ended
December 31, 1995 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:
In accordance with the Partnership Agreement, subsequent to October 31, 1983,
the Termination of the Offering, the General Partners are entitled to 10% of
distributable Cash Flow (as defined in the Partnership Agreement), as a
Partnership Management Fee. In addition, Net Profits (exclusive of Net Profits
from the sale or disposition of Partnership properties) are allocated: first,
to the General Partners, in an amount equal to the greater of: (A) the General
Partners' Partnership Management Fee for such fiscal year; or (B) 1% of such
Net Profits; and second, the balance, if any, to the Limited Partners. Net
Profits from the sale or disposition of a Partnership property are allocated:
first, to the General Partners and the Limited Partners 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: (A) the Sale or Refinancing Proceeds
to be distributed to the General Partners with respect to the sale or
disposition for such property; or (B) 1% of such Net Profits; and third, the
balance, if any, to the Limited Partners. Net Losses (exclusive of Net Losses
from the sale, disposition or provision for value impairment of Partnership
properties) are allocated 1% to the General Partners and 99% to the Limited
Partners. Net Losses from the sale, disposition or provision for value
impairment of Partnership properties are allocated: first, to the General
Partners to the extent of the aggregate balance in their capital accounts;
second, to the Limited
4
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
Partners and among them (in the ratio which their respective capital account
balances bear to the aggregate of all capital account balances of the Limited
Partners) until the balance in their capital accounts shall be reduced to zero;
third, the balance, if any, 99% to the Limited Partners and 1% to the General
Partners. In all events there shall be allocated to the General Partners not
less than 1% of Net Profits and Net Losses from the sale, disposition or
provision for value impairment of a Partnership property. For the quarter and
six months ended June 30, 1996, the General Partners were entitled to a
Partnership Management Fee, and accordingly, allocated Net Profits from
operations, of $116,700 and $227,800, respectively.
Fees and reimbursement paid and payable by the Partnership to Affiliates during
the quarter and six months ended June 30, 1996 were as follows:
<TABLE>
<CAPTION>
Paid
-------------------
Quarter Six Months Payable
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Property management and leasing fees $182,200 $282,400 $ 56,600
Reimbursement of property insurance premiums, at
cost 61,500 61,500 None
Real estate commission (a) None None 48,500
Reimbursement of expenses, at cost
--Accounting 8,200 18,700 4,300
--Investor communications 3,200 7,200 1,300
--Legal 13,800 32,900
--Other 800 8,600
- ------------------------------------------------------------------------------
$269,700 $411,300 $110,700
- ------------------------------------------------------------------------------
</TABLE>
(a) As of June 30, 1996, the Partnership owed $48,500 to the Managing General
Partner for a real estate commission earned in connection with the sale of
a Partnership property. This commission has been accrued but not paid. In
accordance with the Partnership Agreement, the Partnership will not pay the
General Partners or any Affiliates a real estate commission from the sale
of a Partnership property until 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 (as defined in the Partnership Agreement) 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.
Firstate Financial A Savings Bank ("Firstate"), an Affiliate of the Managing
General Partner, is obligated to the Partnership under a lease of office space
at Citrus Center. The lease expires in February, 2002. For the quarter and six
months ended June 30, 1996, Firstate paid $62,300 and $124,600, respectively,
in total rents. The rent paid by Firstate is comparable to that paid by other
tenants at Citrus Center.
3. MORTGAGE LOAN PAYABLE:
Mortgage loan payable at June 30, 1996 and December 31, 1995 consisted of the
following non-recourse loan:
<TABLE>
<CAPTION>
Partnership's Share
of Principal Balance
at Average
Property Pledged as --------------------- Interest Maturity
Collateral 6/30/96 12/31/95 Rate (a) Date
- --------------------------------------------------------------
<S> <C> <C> <C> <C>
Glendal Center
Shopping Mall (50%) $7,640,600 $8,039,400 9.97% 1/1/1999
- --------------------------------------------------------------
</TABLE>
(a) This interest rate represents the weighted average for the six months ended
June 30, 1996. This interest rate is subject to change on a monthly basis
in accordance with the provisions of the loan agreement. As of June 30,
1996, the interest rate on this loan was 9.94%.
For additional information regarding the mortgage loan payable, see Notes to
the Financial Statements in the Partnership's annual report for the year ended
December 31, 1995.
5
<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, 1995 for a discussion of the Partnership's business.
OPERATIONS
The table below is a recap of certain operating results of each of the
Partnership's properties for the quarters and six months ended June 30, 1996
and 1995. The discussion following the table should be read in conjunction with
the financial statements and notes thereto appearing in this report.
<TABLE>
<CAPTION>
Comparative Operating Results (a)
For the Quarters For the Six Months
Ended Ended
6/30/96 6/30/95 6/30/96 6/30/95
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<S> <C> <C> <C> <C>
CITRUS CENTER
Rental Revenues $1,219,300 $1,142,200 $2,482,500 $2,296,200
- -------------------------------------------------------------------------
Property net income $ 261,300 $ 218,400 $ 557,500 $ 555,400
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Average Occupancy 98% 97% 98% 97%
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GLENDALE CENTER SHOPPING MALL (50%)
Rental Revenues $ 947,600 $ 846,400 $1,843,000 $1,709,500
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Property net income (loss) $ 170,300 $ (10,400) $ 279,800 $ (8,700)
- -------------------------------------------------------------------------
Average Occupancy 91% 92% 91% 92%
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SHOPPES OF WEST MELBOURNE
Rental Revenues $ 328,300 $ 342,200 $ 678,900 $ 650,800
- -------------------------------------------------------------------------
Property net income $ 199,100 $ 195,500 $ 429,300 $ 353,000
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Average Occupancy 94% 96% 95% 94%
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RICHMOND PLAZA SHOPPING CENTER
Rental Revenues $ 401,100 $ 344,400 $ 727,900 $ 672,900
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Property net income $ 228,300 $ 188,400 $ 390,100 $ 361,900
- -------------------------------------------------------------------------
Average Occupancy 93% 91% 93% 92%
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</TABLE>
(a) Excludes certain income and expense items which are not directly related to
individual property operating results such as interest income and general
and administrative expenses or are related to properties sold by the
Partnership prior to the periods under comparison.
Unless otherwise disclosed, discussions of fluctuations between 1996 and 1995
refer to both the quarters and six months ended June 30, 1996 and 1995.
Net income for the Partnership for the quarter and six months ended June 30,
1996 increased $188,400 and $288,400, respectively, when compared to the
quarter and six months ended June 30, 1995. The increases were primarily due to
improved operating results at all of the Partnership's properties totaling
$267,100 and $395,100, respectively, for the comparable quarterly and six-month
periods. Partially offsetting the increases in net income was: 1) decreased
interest income of $46,900 and $77,500, respectively, due to a decrease in
rates available on the Partnership's short-term investments and 2) increased
general and administrative expense of $22,300 and $11,900, respectively, for
the comparable periods due to an increase in state and county taxes paid,
partially offset by a decrease in printing and mailing, legal and data
processing costs.
Rental revenues increased $215,400 or 8% and $397,100 or 7.4%, respectively,
for the quarter and six months ended June 30, 1996 when compared to the quarter
and six months ended June 30, 1995. The primary factors which caused the
increase in rental revenues were: 1) increased base rents at Shoppes of West
Melbourne ("Shoppes") and Citrus Center as a result of an increase in rental
rates charged to new and renewing tenants and an increase in the average
occupancy at Citrus Center; 2) increased tenant expense reimbursements for real
estate tax expense at Glendale Center Shopping Mall ("Glendale"), Shoppes and
Citrus Center; and 3) the 1996 receipt of payments as consideration for the
early termination of tenants' leases at Glendale and Richmond Plaza Shopping
Center. Partially offsetting the increase in rental revenues for the quarterly
periods under comparison was decreased rental revenues at Shoppes due to a
decrease in tenant expense reimbursements for real estate taxes and common area
maintenance.
Interest expense decreased $30,300 and $60,900, respectively, for the
comparable periods. These decreases were primarily due to a slight reduction in
the variable interest rate as well as the effects of principal payments made
during the last 18 months on the mortgage loan collateralized by Glendale.
Real estate tax expense increased $44,200 and $30,900, respectively, for the
periods under comparison. The primary reason for the increase for the six-month
periods under comparison was that 1995 included the receipt of a refund in the
first quarter for a previously sold property. Real estate tax expense increased
for the quarterly and six-month periods under comparison at Glendale as a
result of an increase in the tax rate imposed by the taxing authority.
Property operating expenses decreased $92,500 and $13,900, respectively, for
the quarterly and six-month comparable periods. The decreases in property
operating expenses were primarily due to: 1) decreased advertising and
promotional costs at Glendale and Citrus Center and 2) decreased utilities at
Citrus Center. Partially offsetting the decreases in property operating
expenses was: 1) increased professional fees at Shoppes and Glendale; 2)
increased security costs at Glendale and 3) increased property management fees
at Citrus Center as a result of increased rental revenues. Also contributing to
the decrease for the quarterly periods under comparison was decreased utilities
at Glendale and Citrus.
Repairs and maintenance expense decreased $3,800 for the quarter ended June 30,
1996 when compared to the quarter ended June 30, 1995. The primary factors
which caused the decrease were a reduction in the amount of expenses incurred
in 1996 to improve the interior and exterior appearance of Glendale and a
decrease in costs associated with the maintenance of the energy plant at
Glendale.
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
Repairs and maintenance expense increased $13,600 for the six-month periods
under comparison due to an increase in repairs made to the escalators and
elevators and increased janitorial services at Citrus Center.
Insurance expense increased $17,700 and $8,100 for the comparable periods as a
result of an increase in premiums relating to the Partnership's coastal
properties.
To increase and/or maintain occupancy levels at the Partnership's properties,
the Managing General Partner, through its Affiliated asset and property
management groups, continues to take the following actions: 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' leases
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
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 four
remaining properties. Notwithstanding the Partnership's intention relative to
property sales, another primary objective of the Partnership is to provide cash
distributions to Partners from Partnership operations. To the extent cumulative
cash distributions exceed net income, such excess distributions will be treated
as a return of capital. Cash Flow (as defined in the Partnership Agreement) is
generally not equal to net income or cash flows as defined by generally
accepted accounting principles ("GAAP"), since certain items are treated
differently under the Partnership Agreement than under GAAP. Management
believes that 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 GAAP. The following table includes a reconciliation of Cash Flow
(as defined in the Partnership Agreement) to cash flow provided by operating
activities as determined by GAAP and are not indicative of actual distributions
to Partners and should not necessarily be considered as an alternative to the
results disclosed in the Statements of Income and Expenses and Statements of
Cash Flow.
<TABLE>
<CAPTION>
Comparative Cash
Flows Results For the
Six Months Ended
6/30/96 6/30/95
- --------------------------------------------------------------------------
<S> <C> <C>
Amount of Cash Flow (as defined in the Partnership
Agreement) $2,647,100 $2,491,200
Items of reconciliation:
Principal payments on mortgage loan 398,800 224,800
Decrease (increase) in current assets 129,000 (47,200)
Increase (decrease) in current liabilities 59,100 (6,300)
- --------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C>
Net cash provided by operating activities $ 3,234,000 $ 2,662,500
- --------------------------------------------------------------------
Net cash (used for) investing activities $(8,166,000) $(1,171,500)
- --------------------------------------------------------------------
Net cash (used for) financing activities $(2,566,100) $ (46,700)
- --------------------------------------------------------------------
</TABLE>
The increase in Cash Flow (as defined in the Partnership Agreement) of $155,900
for the six months ended June 30, 1996 when compared to six months ended June
30, 1995 was primarily due to increased operating results at all of the
Partnership properties, exclusive of depreciation and amortization, as
previously discussed, partially offset by a decrease in interest income and
increased principal payments on the mortgage loan collateralized by Glendale.
The decrease of $7,498,100 in the Partnership's cash position during the six
months ended June 30, 1996 when compared to December 31, 1995 was primarily the
result of the investments in debt securities, payments made for capital, tenant
improvement and leasing costs, principal payments on mortgage loan payable and
distributions paid to Partners exceeding net cash provided by operating
activities. Liquid assets (including cash, cash equivalents and investments in
debt securities) as of June 30, 1996 were comprised of amounts held for working
capital purposes.
The increase in net cash provided by operating activities of $571,500 for the
six months ended June 30, 1996 when compared to the six months ended June 30,
1995 was primarily due to an increase in net income, exclusive of depreciation
and amortization, as previously discussed and the timing of the payment of
certain Partnership expenses and the collection of tenant's rental payments.
Net cash used for investing activities increased $6,994,500 for the six months
ended June 30, 1996 when compared to the six months ended June 30, 1995. This
increase was primarily due to the increase in investments in debt securities,
partially offset by a decrease in payments for capital, tenant improvement and
leasing costs. The increase in investment securities is a result of the
extension of the maturities of certain of the Partnership's short-term
investments in an effort to maximize the return on these amounts as they are
held for working capital purposes. These investments are of investment-grade
and generally mature less than one year from their date of purchase. The
Partnership maintains working capital reserves to pay for capital expenditures.
During the six months ended June 30, 1996, the Partnership spent $295,200 for
capital, tenant improvement and leasing costs and has projected to spend an
additional $450,000 during the remainder of 1996. Of the projected amount,
approximately $200,000, $150,000 and $100,000 relates to anticipated capital,
tenant improvement and leasing costs expected to be incurred at Citrus Center,
Glendale, and Shoppes, respectively. Actual amounts expended in 1996 may vary
depending on a number of factors including actual leasing activity and other
market conditions throughout the year. The Managing General Partner believes
these improvements and leasing costs are necessary in order to increase and/or
maintain occupancy levels in very competitive markets, maximize rental rates
charged to new and renewing tenants and to prepare the remaining properties for
eventual disposition.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
The increase in net cash used for financing activities of $2,519,400 for the
six months ended June 30, 1996 when compared to the six months ended June 30,
1995 was primarily due to: 1) the net proceeds received from the refinancing of
the mortgage loan collateralized by Glendale in 1995 and 2) increased
distributions paid to Partners in 1996.
The Managing General Partner continues to take a conservative approach to
projections of future rental income and to maintain higher levels of cash
reserves due to the anticipated capital, tenant improvement and leasing costs
necessary to be made at the Partnership's properties during the next several
years. The Managing General Partner believes that Cash Flow (as defined in the
Partnership Agreement) is one of the best and least expensive sources of cash.
As a result, cash continues to be retained to supplement working capital
reserves. For the six months ended June 30, 1996, Cash Flow (as defined in the
Partnership Agreement) retained to supplement working capital reserves was
$369,300.
Distributions to Limited Partners for the quarter ended June 30, 1996 were
declared in the amount of $1,050,000, or $10.50 per Unit. Cash distributions
are made 60 days after the last day of each fiscal quarter. The amount of
future distributions to Partners will ultimately be dependent upon the
performance of the Partnership's investments as well as the Managing General
Partner's determination of the amount of cash necessary to supplement working
capital reserves to meet future liquidity requirements of the Partnership.
Accordingly, there can be no assurance as to the amounts and/or availability of
cash for future distributions to Partners.
8
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------- --------------------------------
(a) Exhibits: None
(b) Reports on Form 8-K:
There were no reports filed on Form 8-K during the quarter ended
June 30, 1996.
<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 IX
By: FIRST CAPITAL FINANCIAL CORPORATION
MANAGING GENERAL PARTNER
Date: August 14, 1996 By: /s/ DOUGLAS CROCKER II
--------------- -----------------------------
DOUGLAS CROCKER II
President and Chief Executive
Officer
Date: August 14, 1996 By: /s/ NORMAN M. FIELD
--------------- ----------------------------
NORMAN M. FIELD
Vice President - Finance and
Treasurer
<TABLE> <S> <C>
<PAGE>
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<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 8,026,200
<SECURITIES> 7,897,600
<RECEIVABLES> 611,900
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 16,580,100
<PP&E> 71,600,100
<DEPRECIATION> 18,243,100
<TOTAL-ASSETS> 70,243,700
<CURRENT-LIABILITIES> 2,516,900
<BONDS> 7,640,600
<COMMON> 0
0
0
<OTHER-SE> 60,033,600
<TOTAL-LIABILITY-AND-EQUITY> 70,243,700
<SALES> 0
<TOTAL-REVENUES> 6,144,400
<CGS> 0
<TOTAL-COSTS> 2,482,200
<OTHER-EXPENSES> 221,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 395,300
<INCOME-PRETAX> 1,856,600
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,856,600
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,856,600
<EPS-PRIMARY> 16.29
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