<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 September 30, 1999
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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 0-12946
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First Capital Income Properties, Ltd. - Series IX
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(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 700, 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 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>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BALANCE SHEETS
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
September 30,
1999 December 31,
(Unaudited) 1998
- -------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investment in commercial rental property:
Land $ $ 2,887,600
Building and improvements 11,994,400
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14,882,000
Accumulated depreciation and amortization (7,116,100)
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Total investment property, net of accumulated
depreciation and amortization 7,765,900
Cash and cash equivalents 2,933,500 3,855,000
Investments in debt securities 16,532,300 12,993,400
Rents receivable 259,100
Escrow deposits 197,200
Other assets (including loan acquisition costs, net
of accumulated amortization of $0 and $154,900,
respectively) 16,900 63,400
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$19,482,700 $25,134,000
- -------------------------------------------------------------------------------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage loan payable $ $ 5,570,800
Accounts payable and accrued expenses 72,100 566,000
Due to Affiliates 7,600 53,100
Distributions payable 16,366,700 166,700
Security deposits 10,000
Prepaid rent 65,000
Earnest money deposit 50,000
Other liabilities 377,300 231,800
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16,823,700 6,713,400
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Partners' capital:
General Partners 400
Limited Partners (100,000 units issued and
outstanding) 2,658,600 18,420,600
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2,659,000 18,420,600
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$19,482,700 $25,134,000
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</TABLE>
STATEMENTS OF PARTNERS' CAPITAL
For the nine months ended September 30, 1999 (Unaudited)
and the year ended December 31, 1998
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Partners' capital, January 1, 1998 $ 86,700 $ 28,046,200 $ 28,132,900
Net income for the year ended December
31, 1998 46,600 2,124,400 2,171,000
Distributions for the year ended
December 31, 1998 (133,300) (11,750,000) (11,883,300)
- -------------------------------------------------------------------------------
Partners' capital, December 31, 1998 -- 18,420,600 18,420,600
Net income for the nine months ended
September 30, 1999 50,500 888,000 938,500
Distributions for the nine months ended
September 30, 1999 (50,100) (16,650,000) (16,700,100)
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Partners' capital, September 30, 1999 $ 400 $ 2,658,600 $ 2,659,000
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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 September 30, 1999 and 1998
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)
<TABLE>
<CAPTION>
1999 1998
- ----------------------------------------------------------------------------
<S> <C> <C>
Income:
Rental $ 5,500 $ 800,000
Interest 251,700 330,400
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257,200 1,130,400
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Expenses:
Interest 154,200
Depreciation and amortization 117,600
Property operating:
Affiliates 12,500
Nonaffiliates 1,500 213,200
Real estate taxes (13,500) 117,100
Insurance--Affiliate 16,100
Repairs and maintenance 300 50,500
General and administrative:
Affiliates 9,800 7,300
Nonaffiliates 39,800 41,200
Provision for value impairment 2,000,000
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37,900 2,729,700
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Net income (loss) $219,300 $(1,599,300)
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Net income (loss) allocated to General Partners $ 16,700 $ (89,900)
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Net income (loss) allocated to Limited Partners $202,600 $(1,509,400)
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Net income (loss) allocated to Limited Partners per
Unit (100,000 Units outstanding) $ 2.03 $ (15.09)
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</TABLE>
STATEMENTS OF INCOME AND EXPENSES
For the nine months ended September 30, 1999 and 1998
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)
<TABLE>
<CAPTION>
1999 1998
- -------------------------------------------------------------------------
<S> <C> <C>
Income:
Rental $1,050,900 $2,742,200
Interest 651,400 1,223,500
Other 48,500
Gain on sale of property 35,900 1,990,300
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1,786,700 5,956,000
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Expenses:
Interest 191,200 472,400
Depreciation and amortization 11,600 385,100
Property operating:
Affiliates 6,400 41,200
Nonaffiliates 287,700 648,800
Real estate taxes 118,200 307,800
Insurance--Affiliate 21,700 42,000
Repairs and maintenance 102,500 167,300
General and administrative:
Affiliates 23,800 25,500
Nonaffiliates 85,100 200,100
Provision for value impairment 2,000,000
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848,200 4,290,200
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Net income $ 938,500 $1,665,800
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Net income allocated to General Partners $ 50,500 $ 30,000
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Net income allocated to Limited Partners $ 888,000 $1,635,800
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Net income allocated to Limited Partners per Unit
(100,000 Units outstanding) $ 8.88 $ 16.36
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</TABLE>
STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 1999 and 1998
(Unaudited)
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
1999 1998
- ------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 938,500 $ 1,665,800
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 11,600 385,100
Gain on sale of property (35,900) (1,990,300)
Provision for value impairment 2,000,000
Changes in assets and liabilities:
Decrease in rents receivable 259,100 111,500
Decrease in other assets 18,600 28,300
(Decrease) increase in accounts payable and
accrued expenses (493,900) 96,000
(Decrease) in due to Affiliates (45,500) (6,400)
(Decrease) in prepaid rent (65,000) (20,400)
Increase in other liabilities 145,500 20,600
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Net cash provided by operating activities 733,000 2,290,200
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Cash flows from investing activities:
Payments for capital and tenant improvements (700)
(increase) in investments in debt securities (3,538,900) (2,989,000)
Proceeds from sale of property 7,818,100 10,575,400
(Reduction) in earnest money deposit (50,000)
Decrease (increase) in escrow deposits 197,200 (61,700)
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Net cash provided by investing activities 4,426,400 7,524,000
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Cash flows from financing activities:
Principal payments on mortgage loan payable (672,400) (716,000)
Repayment of mortgage loan payable (4,898,400)
Distributions paid to Partners (500,100) (22,455,600)
(Decrease) in security deposits (10,000) (15,800)
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Net cash (used for) financing activities (6,080,900) (23,187,400)
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Net (decrease) in cash and cash equivalents (921,500) (13,373,200)
Cash and cash equivalents at the beginning of the
period 3,855,000 22,387,300
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Cash and cash equivalents at the end of the
period $ 2,933,500 $ 9,014,100
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Supplemental information:
Interest paid during the period $ 191,200 $ 472,400
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</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
September 30, 1999
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"). The Partnership utilizes the accrual
method of accounting. Under this method, revenues are recorded when earned and
expenses are recorded when incurred. Effective July 1, 1998, the Partnership
recognizes rental income that is contingent upon tenants achieving specified
targets, only to the extent that such targets are achieved.
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 nine months ended September 30, 1999 are not necessarily
indicative of the operating results for the year ending December 31, 1999.
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 until its May
1999 sale was 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 is included in
the financial statements.
The Partnership has one reportable segment as the Partnership is in the
disposition phase of its life cycle, wherein it is seeking to resolve post-
closing matters related to the properties sold by the Partnership.
Commercial rental property is recorded at cost, net of any provisions for value
impairment, and depreciated (exclusive of amounts allocated to land) on the
straight-line method over their estimated useful lives. Lease acquisition fees
are recorded at cost and amortized on the straight-line method over the life of
the respective lease. Maintenance and repair costs are expensed against
operations as incurred; expenditures for improvements are capitalized to the
appropriate property accounts and depreciated on the straight-line method over
the estimated life of such improvements.
The Partnership evaluates its rental property for impairment when conditions
exist which may indicate that it is probable that the sum of expected future
cash flows (undiscounted) from a property is less than its estimated carrying
basis. Upon determination that an impairment has occurred, the basis in the
rental property is reduced to fair value. With the exception of the $2,000,000
provision recorded during the quarter ended September 30, 1998, management was
not aware of any indicator that would result in a significant impairment loss
during the periods reported.
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.
Property sales 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 is recognized in accordance with GAAP.
Cash equivalents are considered all highly liquid investments with maturity of
three months or less when purchased.
Investments in debt securities are comprised of obligations of the United
States government and corporate debt securities 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. These securities
had a maturity of less than one year when purchased.
Reference is made to the Partnership's Annual Report for the year ended
December 31, 1998 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
Cash Flow (as defined in the Partnership Agreement), as a Partnership
Management Fee. 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 and nine months ended September 30, 1999, the General Partners were
paid a Partnership Management Fee, and were allocated Net Profits from
operations, of $16,700 and $50,100, respectively, and for the nine months ended
September 30, 1999 were allocated a gain of $400 from the sale of a Partnership
property.
Fees and reimbursement paid and payable by the Partnership to Affiliates during
the quarter and nine months ended September 30, 1999 were as follows:
<TABLE>
<CAPTION>
Paid
-------------------
Quarter Nine Months Payable
- -------------------------------------------------------------------------
<S> <C> <C> <C>
Asset management fees $ 2,400 $ 7,000 None
Reimbursement of property insurance premiums -- 21,700 None
Legal 2,900 14,500 4,900
Reimbursement of expenses, at cost
--Accounting 3,600 10,400 1,800
--Investor communications 4,200 10,700 900
- -------------------------------------------------------------------------
$13,100 $64,300 $7,600
- -------------------------------------------------------------------------
</TABLE>
The variance between amounts listed in this table and Statement of Income and
Expenses is due to capitalized legal costs.
The Partnership had a recorded liability in the amount of $48,500 payable to
the Managing General Partner for real estate commissions earned in connection
with the sale of Partnership properties in prior years. Under the terms of the
Partnership Agreement, these commissions were not to be paid until such time as
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. During the quarter ended June 30, 1999 following
the sale of the Partnership's final remaining property, it was determined that
the requirement would not be fulfilled and, accordingly, the liability was
written off as other income.
3. PROPERTY SALE AND SPECIAL DISTRIBUTION:
On May 21, 1999, a joint venture in which the Partnership owned a 50% interest
consummated the sale of Glendale Center Shopping Mall, located in Indianapolis,
Indiana. The sale price was $15,700,000. The Partnership's share of Sale
Proceeds from this transaction was approximately $2,919,700, which was net of
actual and estimated closing expenses and the repayment of the mortgage loan
encumbering the property. The Partnership recorded a gain of $35,900 in
connection with this sale and will distribute $2,900,000 or $29.00 per Unit on
November 30, 1999 to Limited Partners of record as of May 21, 1999. In
addition, the Managing General Partner believes that with the sale of the
Partnership's remaining real estate asset, the Partnership's need for cash
reserves has been lessened. Accordingly, the Partnership has declared a special
distribution of $13,300,000 or $133.00 per Unit, which will be paid on November
30, 1999 to Limited Partners of record as of May 21, 1999.
4
<PAGE>
ITEM 2. 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, 1998 for a discussion of the Partnership's business.
Statements contained in this Management's Discussion and Analysis of Financial
Condition and Results of Operations, which are not historical facts, may be
forward-looking statements. Such statements are subject to certain risks and
uncertainties, which could cause actual results to differ materially from those
projected. Readers are cautioned not to place undue reliance on these forward-
looking statements, which speak only as of the date hereof.
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.
During the disposition phase of the Partnership's life cycle, comparisons of
operating results are complicated due to the timing and effect of property
sales. Components of the Partnership's operating results are generally expected
to decline as real property interests are sold since the Partnership no longer
receives income nor incurs expenses from such real property interests. During
the quarter ended June 30, 1999, the Partnership sold its remaining real
property investment.
OPERATIONS
Net (loss) income changed from $(1,599,300) for the quarter ended September 30,
1998 to $219,300 for the quarter ended September 30, 1999. The change was
primarily due to a provision for value impairment recorded in 1998 on Glendale
Center Shopping Mall ("Glendale"). Exclusive of the provision for value
impairment, net income decreased by $181,400 for the quarterly periods under
comparison. The decrease was primarily due to the partial absence of operating
results in 1999 due to the May 1999 sale of Glendale. The decrease was also due
to a decrease in interest earned on the Partnership's short-term investments,
which was due to a decrease in the cash available for investment.
Net income decreased by $727,300 for the nine months ended September 30, 1999
when compared to the nine months ended September 30, 1998. The decrease was
primarily due to a decrease in interest earned on the Partnership's short-term
investments due to a decrease in cash available for investment together with
the absence of 1999 operating results from Shoppes of West Melbourne
("Shoppes") and Glendale due to their 1998 and 1999 respective sales.
Rental revenues decreased by $794,500 and $1,691,300 for the quarter and nine
months ended September 30, 1999 when compared to the quarter and nine months
ended September 30, 1998, respectively. The decreases were due to the effect of
the 1999 sale of Glendale and the 1998 sale of Shoppes.
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.
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 determined 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 determined 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 Flow
Results For the
Nine Months Ended
-------------------------
9/30/99 9/30/98
- ------------------------------------------------------------------------
<S> <C> <C>
Cash Flow (as defined in the Partnership
Agreement) $ 241,800 $ 1,344,600
Items of reconciliation:
Principal payments on mortgage loan 672,400 716,000
Decrease in current assets 277,700 139,800
(Decrease) increase in current liabilities (458,900) 89,800
- ------------------------------------------------------------------------
Net cash provided by operating activities $ 733,000 $ 2,290,200
- ------------------------------------------------------------------------
Net cash provided by investing activities $ 4,426,400 $ 7,524,000
- ------------------------------------------------------------------------
Net cash (used for) financing activities $(6,080,900) $(23,187,400)
- ------------------------------------------------------------------------
</TABLE>
The decrease in Cash Flow (as defined in the Partnership Agreement) of
$1,102,800 for the nine months ended September 30, 1999 when compared to nine
months ended September 30, 1998 was primarily due to the decrease in interest
income earned on the Partnership's short-term investments, as previously
discussed. The decrease was also due to the absence of operating results from
the properties sold by the Partnership during 1998 and 1999.
The decrease of $921,500 in the Partnership's cash position for the nine months
ended September 30, 1999 was primarily the result of the increase in
investments in debt securities, principal payments on and repayment of the
Glendale mortgage loan payable and distributions to Partners exceeding the
receipt of Sale Proceeds from Glendale and cash generated by operating
activities. Liquid assets (including cash, cash equivalents and investments in
debt securities) as of September 30, 1999 were comprised of amounts held for
resolution of post-closing matters and distribution to Partners.
The decrease in net cash provided by operating activities of $1,557,200 for the
nine months ended September 30, 1999 when compared to the nine months ended
September 30, 1998 was primarily due to the decrease in interest income and the
absence of operating results from properties sold by the Partnership, as
previously discussed. In addition, a credit provided to the buyer of Glendale
for the assumption of Glendale's trade liabilities also contributed to the
decrease.
Net cash provided by investing activities decreased by $3,097,600 for the nine
months ended September 30, 1999 when compared to the nine months ended
September 30, 1998. The decrease was primarily due to the 1998 receipt of
proceeds from the sale of Shoppes exceeding the 1999 proceeds realized from the
sale of Glendale. The decrease was also due to an increase in 1999 in the net
amount of cash invested in debt securities as compared to 1998.
Investments in debt securities are a result of the continued 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 post closing
matters related to the Partnership's properties. These investments are of
investment grade and mature less than one year from their date of purchase.
With the repayment of the Partnership's variable rate mortgage debt, the
Partnership has no financial instruments for which there are significant risks.
Due to the timing of the maturities and liquid nature of the Partnership's
investments in debt securities, the Partnership does not believe that it has
material market risk.
On May 21, 1999, a joint venture in which the Partnership owned a 50% interest
consummated the sale of Glendale for a sale price of $15,700,000. Sale
Proceeds, net of actual and estimated closing expenses and the repayment of the
mortgage loan encumbering the property, amounted to $2,919,700. In connection
with this sale, the Partnership will distribute $2,900,000 or $29.00 per Unit
on November 30, 1999 to Limited Partners of record as of May 21, 1999. In
addition, the General Partner believes that with the sale of the Partnership's
remaining real estate asset, the Partnership's need for cash reserves has been
lessened. Accordingly, the Partnership has declared a special distribution in
the amount of $13,300,000 or $133.00 per Unit, which will be paid on November
30, 1999 to Limited Partners of record as of May 21, 1999.
Net cash used for financing activities decreased by $17,106,500 for the nine
months ended September 30, 1999 when compared to the nine months ended
September 30, 1998. The decrease was primarily due to the 1998 special
distribution to Limited Partners of Sale Proceeds from the sales of Shoppes and
Richmond Plaza Shopping Center ("Richmond"). Exclusive of the Shoppes and
Richmond distributions, there was an increase of $3,793,500 in net cash used
for financing activities for the comparable periods. This increase was
primarily due to the repayment of the mortgage loan collateralized by Glendale
in connection with its 1999 sale. The increase was partially offset by a
decrease in distributions of Cash Flow (as defined in the Partnership
Agreement) paid to Partners in line with reduced operating results following
the sale of several Partnership properties.
The Year 2000 problem is the result of the inability of existing computer
programs to distinguish between a year beginning with "20" rather than "19".
This is the result of computer programs using two rather than four digits to
define an applicable year. If not corrected, any program having time-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000. This could result in a variety of problems including miscalculations,
loss of data and failure of entire systems. Critical areas that could be
effected are accounts receivable and rent collections, accounts payable,
general ledger, cash management, investor services, computer hardware and
telecommunications systems.
The Partnership has engaged Affiliated and unaffiliated entities to perform all
of its critical functions that utilize software that may have time-sensitive
applications. All of these service providers are providing these services for
their own organizations as well as for their clients. The Managing General
Partner, on behalf of the Partnership, has been in close communication with
each of these service providers regarding steps that they are taking to assure
that there will be no serious interruption of the operations of the Partnership
resulting from Year 2000 problems. Based on the results of these inquiries, as
well as a review of the disclosures by these service providers, the Managing
General Partner believes that the Partnership will be able to continue normal
business operations and will incur no material costs related to Year 2000
issues.
While the Partnership has not formulated a written contingency plan, it has
selected Year 2000 compliant systems it intends to use beginning in the Year
2000. The Managing General Partner believes that based on the status of the
Partnership's real estate portfolio and its limited number of transactions,
aside from catastrophic failures of banks, governmental agencies, etc., it will
be able to carry out substantially all of its critical operations.
The Managing General Partner has begun the process of wrapping-up the
Partnership's affairs. This process, which is expected to be completed during
the second quarter of 2000, includes resolution of all post-closing property
and Partnership matters together with the expiration of representations and
warranties included in the contract for the sale of Glendale. Following the
resolution of post-closing property matters and the establishment of a reserve
for contingencies and wrap-up expenses, the Managing General Partner will make
a liquidating distribution to Partners.
Distributions to Limited Partners for the quarter ended September 30, 1999 were
declared in the amount of $150,000, or $1.50 per Unit. Cash distributions are
made 60 days after the last day of each fiscal quarter. For the nine months
ended September 30, 1999, the Partnership utilized $258,300 of previously
undistributed Cash Flow (as defined in the Partnership Agreement) for its
distribution to Partners.
5
<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
September 30, 1999.
<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: November 10, 1999 By: /s/ DOUGLAS CROCKER II
----------------- -------------------------------------
DOUGLAS CROCKER II
President and Chief Executive Officer
Date: November 10, 1999 By: /s/ NORMAN M. FIELD
----------------- -------------------------------------
NORMAN M. FIELD
Vice President - Finance and Treasurer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 2,933,500
<SECURITIES> 16,532,300
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 19,465,800
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 19,482,700
<CURRENT-LIABILITIES> 16,446,400
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,659,000
<TOTAL-LIABILITY-AND-EQUITY> 19,482,700
<SALES> 0
<TOTAL-REVENUES> 1,786,700
<CGS> 0
<TOTAL-COSTS> 536,500
<OTHER-EXPENSES> 108,900
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 191,200
<INCOME-PRETAX> 938,500
<INCOME-TAX> 0
<INCOME-CONTINUING> 938,500
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 938,500
<EPS-BASIC> 8.88
<EPS-DILUTED> 8.88
</TABLE>
