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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, 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
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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
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(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.
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BALANCE SHEETS
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
June 30,
1999 December 31,
(Unaudited) 1998
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<S> <C> <C>
ASSETS
Investment in commercial rental property:
Land $ $ 2,887,600
Buildings 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 7,958,400 3,855,000
Investments in debt securities 11,440,300 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) 21,600 63,400
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$19,420,300 $25,134,000
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LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage loan payable $ $ 5,570,800
Accounts payable and accrued expenses 58,900 566,000
Due to Affiliates 11,000 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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16,813,900 6,713,400
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Partners' capital:
General Partners 400
Limited Partners (100,000 units issued and
outstanding) 2,606,000 18,420,600
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2,606,400 18,420,600
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$19,420,300 $25,134,000
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</TABLE>
STATEMENTS OF PARTNERS' CAPITAL
For the six months ended June 30, 1999 (Unaudited)
and the year ended December 31, 1998
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
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<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)
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Partners' capital, December 31, 1998 -- 18,420,600 18,420,600
Net income for the six months ended June
30, 1999 33,800 685,400 719,200
Distributions for the six months ended
June 30, 1999 (33,400) (16,500,000) (16,533,400)
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Partners' capital, June 30, 1999 $ 400 $ 2,606,000 $ 2,606,400
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</TABLE>
The accompanying notes are an integral part of the financial statements
2
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STATEMENTS OF INCOME AND EXPENSES
For the quarters ended June 30, 1999 and 1998
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)
<TABLE>
<CAPTION>
1999 1998
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<S> <C> <C>
Income:
Rental $ 330,500 $ 812,100
Interest 205,600 468,400
Other 48,500
Gain on sale of property 35,900
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620,500 1,280,500
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Expenses:
Interest 67,100 156,800
Depreciation and amortization 4,600 118,000
Property operating:
Affiliates 3,200 9,400
Nonaffiliates 93,100 209,900
Real estate taxes 42,200 88,100
Insurance--Affiliate 6,600 9,500
Repairs and maintenance 49,800 55,600
General and administrative:
Affiliates 7,500 7,900
Nonaffiliates 52,100 58,700
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326,200 713,900
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Net income $ 294,300 $ 566,600
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Net income allocated to General Partners $ 17,100 $ 44,400
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Net income allocated to Limited Partners $ 277,200 $ 522,200
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Net income allocated to Limited Partners per Unit
(100,000 Units outstanding) $ 2.77 $ 5.22
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</TABLE>
STATEMENTS OF INCOME AND EXPENSES
For the six months ended June 30, 1999 and 1998
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)
<TABLE>
<CAPTION>
1999 1998
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<S> <C> <C>
Income:
Rental $1,045,400 $1,942,200
Interest 399,700 893,100
Other 48,500
Gain on sale of property 35,900 1,990,300
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1,529,500 4,825,600
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Expenses:
Interest 191,200 318,200
Depreciation and amortization 11,600 267,500
Property operating:
Affiliates 6,400 28,700
Nonaffiliates 286,200 435,600
Real estate taxes 131,700 190,700
Insurance--Affiliate 21,700 25,900
Repairs and maintenance 102,200 116,800
General and administrative:
Affiliates 14,000 18,200
Nonaffiliates 45,300 158,900
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810,300 1,560,500
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Net income $ 719,200 $3,265,100
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Net income allocated to General Partners $ 33,800 $ 119,900
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Net income allocated to Limited Partners $ 685,400 $3,145,200
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Net income allocated to Limited Partners per Unit
(100,000 Units outstanding) $ 6.85 $ 31.45
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</TABLE>
STATEMENTS OF CASH FLOWS
For the six months ended June 30, 1999 and 1998
(Unaudited)
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
1999 1998
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<S> <C> <C>
Cash flows from operating activities:
Net income $ 719,200 $ 3,265,100
Adjustments to reconcile net income to net cash
provided by operating activities:
Gain on sale of property (35,900) (1,990,300)
Depreciation and amortization 11,600 267,500
Changes in assets and liabilities:
Decrease in rents receivable 259,100 106,800
Decrease (increase) in other assets 13,900 (83,100)
(Decrease) in accounts payable and accrued expenses (507,100) (10,000)
(Decrease) increase in due to Affiliates (42,100) 8,900
(Decrease) in prepaid rent (65,000)
Increase (decrease) in other liabilities 145,500 (400)
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Net cash provided by operating activities 499,200 1,564,500
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Cash flows from investing activities:
Payments for capital and tenant improvements (700)
Proceeds from sale of property 7,818,100 10,575,400
Decrease (increase) in investments in debt securities,
net 1,553,100 (12,027,300)
(Reduction) in earnest money deposit (50,000)
Decrease (increase) in escrow deposits 197,200 (39,100)
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Net cash provided by (used for) investing activities 9,518,400 (1,491,700)
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Cash flows from financing activities:
Principal payments on mortgage loan payable (672,400) (561,300)
Repayment of mortgage loan payable (4,898,400)
Distributions paid to Partners (333,400) (11,461,100)
(Decrease) in security deposits (10,000) (15,700)
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Net cash (used for) financing activities (5,914,200) (12,038,100)
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Net increase (decrease) in cash and cash equivalents 4,103,400 (11,965,300)
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 $7,958,400 $10,422,000
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Supplemental information:
Interest paid during the period $ 191,200 $ 318,200
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</TABLE>
The accompanying notes are an integral part of the financial statements
3
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NOTES TO FINANCIAL STATEMENTS
(Unaudited)
June 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 six months ended June 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 was 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. 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. All of 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
4
<PAGE>
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 six months ended June
30, 1999, the General Partners were paid a Partnership Management Fee, and were
allocated Net Profits from operations, of $16,700 and $33,400, and allocated a
gain of $400 from the sale of a Partnership property, respectively.
Fees and reimbursement paid and payable by the Partnership to Affiliates during
the quarter and six months ended June 30, 1999 were as follows:
<TABLE>
<CAPTION>
Paid
---------------
Six
Quarter Months Payable
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<S> <C> <C> <C>
Asset management fees $ 2,300 $ 4,600 None
Reimbursement of property insurance premiums 6,600 21,700 None
Legal 10,400 11,600 $ 7,500
Reimbursement of expenses, at cost
--Accounting 1,900 6,800 1,900
--Investor communications 2,500 6,500 1,600
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$23,700 $51,200 $11,000
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</TABLE>
On March 31, 1999, the Partnership has 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 last 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.
5
<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 income decreased by $272,300 for the quarter ended June 30, 1999 when
compared to the quarter ended June 30, 1998. The decrease was primarily due to
a decrease in interest earned on the Partnership's short-term investments,
which was due to a decrease in the average amount available for investment.
Net income decreased by $2,545,900 for the six months ended June 30, 1999 when
compared to the six months ended June 30, 1998. The decrease was primarily due
to the gain recorded in 1998 on the sale of Shoppes of West Melbourne
("Shoppes") exceeding the 1999 gain recorded on the sale of Glendale Center
Shopping Mall ("Glendale"). The decrease was also due to a decrease in interest
earned on the Partnership's short-term investments together with the absence of
1999 operating results from Shoppes due to its 1998 sale.
Rental revenues decreased by $481,600 or 59% and $896,800 or 46% for the
quarter and six months ended June 30, 1999 when compared to the quarter and six
months ended June 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
Six Months Ended
-------------------------
6/30/99 6/30/98
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<S> <C> <C>
Cash Flow (as defined in the Partnership Agreement) $ 22,500 $ 981,000
Items of reconciliation:
Principal payments on mortgage loan 672,400 561,300
Decrease in current assets 273,000 23,700
(Decrease) in current liabilities (468,700) (1,500)
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Net cash provided by operating activities $ 499,200 $ 1,564,500
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Net cash provided by (used for) investing
activities $ 9,518,400 $ (1,491,700)
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Net cash (used for) financing activities $(5,914,200) $(12,038,100)
- -------------------------------------------------------------------------------
</TABLE>
The decrease in Cash Flow (as defined in the Partnership Agreement) of $958,500
for the six months ended June 30, 1999 when compared to six months ended June
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 increase of $4,103,400 in the Partnership's cash position for the six
months ended June 30, 1999 was primarily the result of the receipt of Sale
Proceeds from Glendale, the net maturity of certain of the investments in debt
securities and net cash provided by operating activities exceeding, the
repayment of the mortgage encumbering Glendale, principal payments on mortgage
loan payable and distributions paid to Partners. Liquid assets (including cash,
cash equivalents and investments in debt securities) as of June 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 $1,065,300 for the
six months ended June 30, 1999 when compared to the six months ended June 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, the credit provided to the buyer of Glendale for
assuming Glendale's trade liabilities also contributed to the decrease.
Net cash (used for) provided by investing activities changed from $(1,491,700)
for the six months ended June 30, 1998 to $9,518,400 for the six months ended
June 30, 1999. This change was primarily due the 1998 investment of proceeds
from the sale of Shoppes in investments in debt securities. The change was
partially offset by the 1998 receipt of proceeds from the sale of Shoppes
exceeding the 1999 proceeds realized from the sale of Glendale.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
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 owns 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 $13,300,00 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 $6,123,900 for the six
months ended June 30, 1999 when compared to the six months ended June 30, 1998.
The decrease was primarily due to the 1998 special distribution of Sale
Proceeds from the sale of Richmond Plaza Shopping Center ("Richmond").
Exclusive of the Richmond distribution, there was an increase of $4,226,100 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.
The Partnership has not formulated a written contingency plan, however, 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 could carry out
substantially all of its critical operations on a manual basis or easily
convert to systems that are Year 2000 compliant.
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 June 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 six months
ended June 30, 1999, the Partnership utilized $310,900 of previously
undistributed Cash Flow (as defined in the Partnership Agreement) in its
distribution to Partners.
7
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- ----------------------------------------
(a) Exhibits: None
(b) Reports on Form 8-K:
A report was filed on Form 8-K on June 4, 1999 reporting the sale of
Glendale Center Shopping Mall.
<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 13, 1999 By: /s/ DOUGLAS CROCKER II
--------------- --------------------------------------
DOUGLAS CROCKER II
President and Chief Executive Officer
Date: August 13, 1999 By: /s/ NORMAN M. FIELD
--------------- --------------------------------------
NORMAN M. FIELD
Vice President - Finance and Treasurer
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