<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 March 31, 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
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First Capital Income Properties, Ltd. - Series IX
- ---------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 59-2255857
------------------------------- ------------------
(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) 207-0020
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(Registrant's telephone number, including area code)
Not applicable
- ------------------------------------------------------------------------------
(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>
March 31,
1996 December 31,
(Unaudited) 1995
- -----------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investment in commercial rental properties:
Land $ 12,472,900 $ 12,472,900
Buildings and improvements 59,107,700 58,832,000
- -----------------------------------------------------------------------------
71,580,600 71,304,900
Accumulated depreciation and amortization (17,655,900) (17,073,500)
- -----------------------------------------------------------------------------
Total investment properties, net of accumulated
depreciation and amortization 53,924,700 54,231,400
Cash and cash equivalents 15,470,400 15,524,300
Rents receivable 720,400 708,300
Escrow deposits 36,100 71,200
Other assets (primarily loan acquisition costs,
net of accumulated amortization of $124,800 and
$115,000, respectively) 332,400 358,900
- -----------------------------------------------------------------------------
$ 70,484,000 $ 70,894,100
- -----------------------------------------------------------------------------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage loan payable $ 7,723,600 $ 8,039,400
Accounts payable and accrued expenses 1,031,800 1,034,800
Due to Affiliates 144,800 17,200
Distributions payable 1,111,100 1,055,600
Security deposits 146,300 147,200
Other liabilities 90,000 145,100
- -----------------------------------------------------------------------------
10,247,600 10,439,300
- -----------------------------------------------------------------------------
Partners' capital:
General Partners (deficit) (90,000) (90,000)
Limited Partners (100,000 Units issued and
outstanding) 60,326,400 60,544,800
- -----------------------------------------------------------------------------
60,236,400 60,454,800
- -----------------------------------------------------------------------------
$ 70,484,000 $ 70,894,100
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</TABLE>
STATEMENTS OF PARTNERS' CAPITAL
For the quarter ended March 31, 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' 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)
- ----------------------------------------------------------------------------
Partners' (deficit) capital,
December 31, 1995 (90,000) 60,544,800 60,454,800
Net income for the quarter ended March
31, 1996 111,100 781,600 892,700
Distributions for the quarter ended
March 31, 1996 (111,100) (1,000,000) (1,111,100)
- ----------------------------------------------------------------------------
Partners' (deficit) capital, March 31,
1996 $ (90,000) $60,326,400 $60,236,400
- ----------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
STATEMENTS OF INCOME AND EXPENSES
For the quarters ended March 31, 1996 and 1995
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)
<TABLE>
<CAPTION>
1996 1995
- ------------------------------------------------------------------------
<S> <C> <C>
Income:
Rental $2,835,900 $2,654,200
Interest 203,900 234,500
- ------------------------------------------------------------------------
3,039,800 2,888,700
- ------------------------------------------------------------------------
Expenses:
Interest 202,200 232,800
Depreciation and amortization 592,200 573,200
Property operating:
Affiliates 205,100 144,200
Nonaffiliates 451,800 441,900
Real estate taxes 247,300 260,600
Insurance--Affiliate 30,800 40,400
Repairs and maintenance 309,400 292,000
General and administrative:
Affiliates 30,700 39,800
Nonaffiliates 77,600 71,100
- ------------------------------------------------------------------------
2,147,100 2,096,000
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Net income $ 892,700 $ 792,700
- ------------------------------------------------------------------------
Net income allocated to General Partners $ 111,100 $ 88,900
- ------------------------------------------------------------------------
Net income allocated to Limited Partners $ 781,600 $ 703,800
- ------------------------------------------------------------------------
Net income allocated to Limited Partners per Unit
(100,000 Units outstanding) $ 7.82 $ 7.04
- ------------------------------------------------------------------------
</TABLE>
STATEMENTS OF CASH FLOWS
For the quarters ended March 31, 1996 and 1995
(Unaudited)
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 892,700 $ 792,700
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 592,200 573,200
Changes in current assets and liabilities:
(Increase) in rents receivable (12,100) (97,700)
Decrease (increase) in other assets 16,700 (122,000)
(Decrease) in accounts payable and accrued expenses (3,000) (145,500)
Increase in due to Affiliates 127,600 44,000
(Decrease) in other liabilities (55,100) (28,800)
- --------------------------------------------------------------------------------
Net cash provided by operating activities 1,559,000 1,015,900
- --------------------------------------------------------------------------------
Cash flows from investing activities:
Payments for capital and tenant improvements (275,700) (423,200)
Decrease (increase) in escrow deposits 35,100 (20,400)
- --------------------------------------------------------------------------------
Net cash (used for) investing activities (240,600) (443,600)
- --------------------------------------------------------------------------------
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 (315,800) (111,100)
Distributions paid to Partners (1,055,600) (722,200)
Loan acquisition costs incurred (38,400)
(Decrease) increase in security deposits (900) 5,700
- --------------------------------------------------------------------------------
Net cash (used for) provided by financing
activities (1,372,300) 984,000
- --------------------------------------------------------------------------------
Net (decrease) increase in cash and cash equivalents (53,900) 1,556,300
Cash and cash equivalents at the beginning of the
period 15,524,300 15,085,400
- --------------------------------------------------------------------------------
Cash and cash equivalents at the end of the period $15,470,400 $16,641,700
- --------------------------------------------------------------------------------
Supplemental information:
Interest paid during the period $ 202,200 $ 282,800
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
March 31, 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. 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
generally accepted accounting principles 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 ended March 31, 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 acquistion costs are amortized over the term of the mortgage loan made in
connection with the acquisition of Partnership properties or refinancing of
Partnership loan. 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 the 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.
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 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 ended March 31, 1996, the General
Partners were entitled to a Partnership Management Fee, and accordingly,
allocated Net Profits, of $111,100.
Fees and reimbursement paid and payable by the Partnership to Affiliates during
the quarter ended March 31, 1996 were as follows:
<TABLE>
<CAPTION>
Paid Payable
- ------------------------------------------------------------------------
<S> <C> <C>
Property management and leasing fees $100,200 $ 59,600
Reimbursement of property insurance premiums, at cost None 30,800
Real estate commission (a) None 48,500
Reimbursement of expenses, at cost:
--Accounting 10,500 4,000
--Investor communication 4,000 1,900
--Legal 19,100 None
--Other 7,800 None
- ------------------------------------------------------------------------
$141,600 $144,800
- ------------------------------------------------------------------------
</TABLE>
(a) As of March 31, 1996, the Partnership owed approximately $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 ended
March 31, 1996, Firstate paid $62,300 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 March 31, 1996 and December 31, 1995 consisted of the
following non-recourse loan:
<TABLE>
<CAPTION>
Partnership's Share
of Principal Balance Average
at Interest Maturity
Property Pledged as Collateral 3/31/96 12/31/95 Rate Date
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Glendale Center Shopping Mall (50%) $7,723,600 $8,039,400 10% (a) 1/1/99
- ----------------------------------------------------------------------------
</TABLE>
(a) This interest rate represents the weighted average for the quarter ended
March 31, 1996. This interest rate is subject to change in accordance with
the provisions of the loan agreement. As of March 31, 1996, the interest
rate on this loan was 9.84%.
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.
4
<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 the Partnership's share of certain operating
results of each of its remaining properties for the quarters ended March 31,
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 Ended
3/31/96 3/31/95
- ------------------------------------------
<S> <C> <C>
CITRUS CENTER
Rental revenues $1,263,100 $1,154,000
- ------------------------------------------
Property net income $ 296,200 $ 337,000
- ------------------------------------------
Average occupancy 99% 96%
- ------------------------------------------
GLENDALE CENTER SHOPPING MALL (50%)
Rental revenues $ 895,400 $ 863,100
- ------------------------------------------
Property net income $ 109,500 $ 1,700
- ------------------------------------------
Average occupancy 91% 92%
- ------------------------------------------
SHOPPES OF WEST MELBOURNE
Rental revenues $ 350,600 $ 308,600
- ------------------------------------------
Property net income $ 230,200 $ 157,500
- ------------------------------------------
Average occupancy 96% 93%
- ------------------------------------------
RICHMOND PLAZA SHOPPING CENTER
Rental revenues $ 326,800 $ 328,500
- ------------------------------------------
Property net income $ 161,800 $ 173,400
- ------------------------------------------
Average occupancy 93% 92%
- ------------------------------------------
</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.
Net income for the Partnership for the quarter ended March 31, 1996 increased
$100,000 when compared to the quarter ended March 31, 1995. This increase was
primarily due to improved operating results at Shoppes of West Melbourne
("Shoppes") and Glendale Center Shopping Mall ("Glendale") totaling $180,500.
Partially offsetting the increase in net income was diminished operating
results at Citrus Center and Richmond Plaza Shopping Center ("Richmond")
totaling $52,400 and decreased interest income of $30,600 due to a decrease in
amounts available for and rates available on the Partnership's short-term
investments.
Rental revenues increased by $181,700 or 6.9% for the quarter ended March 31,
1996 when compared to the quarter ended March 31, 1995. The primary factors
which caused the increase in rental revenues were: 1) an increase in the
average occupancy at Citrus Center and Shoppes and 2) increased base rents and
tenant expense reimbursements for common area expenses at Glendale.
Interest expense decreased by $30,600 for the quarters under comparison
resulting from a lower average outstanding principal balance on the Glendale
mortgage loan during 1996.
Real estate tax expense decreased $13,300 for the quarters under comparison
primarily due to a decrease in expense at Glendale resulting from a decrease in
the assessed value of the property. Real estate tax expense at Shoppes, Citrus
Center and Richmond remained relatively stable.
Insurance expense decreased $9,600 for the quarter ended March 31, 1996, when
compared to the quarter ended March 31, 1995. The decrease was primarily due to
lower group rates on the Partnership's combined insurance coverage as a result
of a minimal amount of claims made over the past several years.
Property operating expenses increased by $70,800 for the quarterly periods
under comparison. The increase in property operating expenses was primarily due
to: 1) increased management and leasing fees at Citrus Center and Glendale
totaling $42,000 resulting from a greater portion of leasing fees being paid to
outside leasing agents during 1995 which were capitalized for financial
reporting purposes; 2) an increase in property operating expense at Shoppes of
$9,900 due to the settlement of an outstanding sales and use tax audit and 3)
increased utilities at Glendale and Citrus Center totaling $19,200.
Repairs and maintenance expense increased $17,400 for the quarter ended March
31, 1996 when compared to the quarter ended March 31, 1995. This was primarily
the result of increased expense of $28,900 at Citrus Center due to the
following: 1) increased janitorial expense; 2) an increase in unreimbursed
common area costs; 3) an increase in minor repairs made to the elevator and
HVAC systems and 4) increased expenses associated with patching, resurfacing
and striping of the parking lot. Partially offsetting the above increase was a
decrease in costs associated with the energy plant at Glendale of $7,400.
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 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
5
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
are treated as a return of capital. Cash Flow (as defined in the Partnership
Agreement) is generally not equal to Partnership 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 defined by GAAP. Such amounts 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 Flows.
<TABLE>
<CAPTION>
Comparative
Cash Flow Results
For the Quarters Ended
3/31/96 3/31/95
- ------------------------------------------------------------------------------
<S> <C> <C>
Cash Flow (as defined in the Partnership Agreement) $ 1,169,100 $1,254,800
Items of reconciliation:
Principal payments on mortgage loans 315,800 111,100
Decrease (increase) in current assets 4,600 (219,700)
Increase (decrease) in current liabilities 69,500 (130,300)
- ------------------------------------------------------------------------------
Net cash provided by operating activities $ 1,559,000 $1,015,900
- ------------------------------------------------------------------------------
Net cash (used for) investing activities $ (240,600) $ (443,600)
- ------------------------------------------------------------------------------
Net cash (used for) provided by financing activities $(1,372,300) $ 984,000
- ------------------------------------------------------------------------------
</TABLE>
The decrease in Cash Flow (as defined in the Partnership Agreement) of $85,700
for the quarter ended March 31, 1996 when compared to the quarter ended March
31, 1995 was primarily due to an increase in debt service payments on the
mortgage loan collateralized by Glendale, partially offset by an increase in
net income, exclusive of depreciation and amortization.
The decrease in the Partnership's cash position as of March 31, 1996 when
compared to December 31, 1995 was primarily the result of payments made for
capital, tenant improvement and leasing costs, distributions paid to Partners
and principal payments on Glendale's mortgage loan exceeding net cash provided
by operating activities. Liquid assets of the Partnership as of March 31, 1996
are comprised of amounts held for working capital purposes.
The increase of $543,100 in net cash provided by operating activities for the
quarter ended March 31, 1996 when compared to the quarter ended March 31, 1995
was primarily due to the increase in net income, exclusive of depreciation and
amortization, as previously discussed and the timing of the payment of
Partnership expenses and the collection of tenants' rental payments.
Net cash (used for) investing activities decreased $203,000 for the quarter
ended March 31, 1996 when compared to the quarter ended March 31, 1995. This
decrease was primarily due to a decrease in payments for capital, tenant
improvement and leasing costs, partially offset by a decrease in escrow
deposits due to the release of $55,000 for a replacement of a chiller at
Glendale. The Partnership maintains working capital reserves to pay for capital
expenditures such as capital, tenant improvement and leasing costs. During the
quarter ended March 31, 1996, the Partnership spent $275,700 for capital,
tenant improvement and leasing costs and has budgeted to spend an additional
$700,000 during the remainder of 1996. Of the remaining budgeted amount,
approximately $350,000, $175,000 and $165,000 relates to anticipated capital,
tenant improvement and leasing costs expected to be incurred at Glendale,
Shoppes and Citrus Center, 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.
Net cash provided by (used for) financing activities changed from $984,000 for
the quarter ended March 31, 1995 to ($1,372,300) for the quarter ended March
31, 1996 primarily due to: 1) the net proceeds received from the refinancing of
the mortgage loan collateralized by Glendale in 1995 and 2) an increase in
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 quarter ended March 31, 1996, Cash Flow (as defined in the
Partnership Agreement) retained to supplement working capital reserves was
$58,000.
Distributions to Limited Partners for the quarter ended March 31, 1996 were
declared in the amount of $1,000,000, or $10.00 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.
6
<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 March 31, 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: May 13, 1996 By: /s/ DOUGLAS CROCKER II
------------ ----------------------------------------
DOUGLAS CROCKER II
President and Chief Executive Officer
Date: May 13, 1996 By: /s/ NORMAN M. FIELD
------------ ----------------------------------------
NORMAN M. FIELD
Vice President - Finance and Treasurer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CIK> 0000716297
<NAME> First Capital Income Properties, Ltd. Series IX
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 15,470,400
<SECURITIES> 0
<RECEIVABLES> 720,400
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 16,226,900
<PP&E> 71,580,600
<DEPRECIATION> 17,655,900
<TOTAL-ASSETS> 70,484,000
<CURRENT-LIABILITIES> 2,385,500
<BONDS> 7,723,600
<COMMON> 0
0
0
<OTHER-SE> 60,236,400
<TOTAL-LIABILITY-AND-EQUITY> 70,484,000
<SALES> 0
<TOTAL-REVENUES> 3,039,800
<CGS> 0
<TOTAL-COSTS> 1,244,400
<OTHER-EXPENSES> 108,300
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 202,200
<INCOME-PRETAX> 892,700
<INCOME-TAX> 0
<INCOME-CONTINUING> 892,700
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 892,700
<EPS-PRIMARY> 7.82
<EPS-DILUTED> 7.82
</TABLE>
