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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
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FORM 10-Q
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[X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE PERIOD ENDED JUNE 30, 2000
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 NO. 0-12946
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 700, 60606-2607
CHICAGO, ILLINOIS (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
(312) 207-0020
(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.
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<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, 1999 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.
The Partnership has substantially completed the disposition phase of its life
cycle. The Partnership has sold its remaining real property investments and is
working toward resolution of post closing property sale matters.
OPERATIONS
Net income decreased by $279,800 and $693,700 for the quarter and six months
ended June 30, 2000 when compared to the quarter and six months ended June 30,
1999. The decreases were primarily due to the absence of 2000 operating results
from Glendale Center Shopping Center Shopping Mall ("Glendale"), resulting from
its May 1999 sale. The decreases were also due to decreases in interest earned
on the Partnership's short-term investments, which was due to a decrease in
cash available for investment, resulting from a November 1999 special cash
distribution to Limited Partners.
LIQUIDITY AND CAPITAL RESOURCES
The decrease of $135,900 in the Partnership's cash position for the six months
ended June 30, 2000 was primarily the result of distributions paid to Partners
on February 29, 2000. Liquid assets (including cash and cash equivalents) as of
June 30, 2000 were comprised of amounts held for post property sale matters and
Partnership liquidation expenses.
The decrease in net cash provided by operating activities of $468,400 for the
six months ended June 30, 2000 when compared to the six months ended June 30,
1999 was primarily due to the decrease in net income, as previously discussed.
The decrease was partially offset by the satisfaction of liabilities in
connection with the 1999 sale of Glendale.
Net cash provided by investing activities decreased by $9,518,400 for the six
months ended June 30, 2000 when compared to the six months ended June 30, 1999.
The decrease was primarily due to the net maturity, in 1999, of certain of the
Partnership's investments in debt securities together with the proceeds
realized from the sale of Glendale in 1999.
The Partnership has no financial instruments for which there are significant
market risks.
The decrease in net cash used for financing activities of $5,747,500 for the
six months ended June 30, 2000 when compared to the six months ended June 30,
1999 was primarily due to the repayment of the mortgage loan collateralized by
Glendale in conjunction with its May 1999 sale. The decrease was also due to a
decrease in distributions to Partners.
The Partnership is a party to an appeal of the real estate taxes of the Fashion
Atrium Building for fiscal years 1992 and 1993. During these periods the
Partnership owned a 50% interest in the joint venture that owned the Fashion
Atrium Building. There can be no assurance as to the amount that will be
realized or the timing of such realization.
The Managing General Partner is in the process of wrapping-up the Partnership's
affairs. This process includes resolution of all post-closing property and
Partnership matters, including the real estate tax appeal referred to above.
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. In line with reduced
Cash Flow (as defined in the Partnership Agreement) following the sale of its
remaining property, distributions to Partners have been suspended until such
time as the liquidating distribution is paid.
2
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BALANCE SHEETS
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
June 30,
2000 December 31,
(Unaudited) 1999
--------------------------------------------------------------------
<S> <C> <C>
ASSETS
Cash and cash equivalents 3,132,600 3,268,500
Other assets 17,100 16,900
--------------------------------------------------------------------
$3,149,700 $3,285,400
--------------------------------------------------------------------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable and accrued expenses $ 91,900 $ 83,400
Due to Affiliates 300 3,300
Distributions payable 166,700
Other liabilities 389,800 389,800
--------------------------------------------------------------------
482,000 643,200
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Partners' capital:
General Partners 600 300
Limited Partners (100,000 units issued and
outstanding) 2,667,100 2,641,900
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2,667,700 2,642,200
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$3,149,700 $3,285,400
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</TABLE>
STATEMENTS OF PARTNERS' CAPITAL
For the Six Months Ended June 30, 2000 (Unaudited)
and the Year Ended December 31, 1999
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
-------------------------------------------------------------------------------
<S> <C> <C> <C>
Partners' capital, January 1, 1999 $ -- $ 18,420,600 $ 18,420,600
Net income for the year ended December
31, 1999 67,100 1,021,300 1,088,400
Distributions for the year ended
December 31, 1999 (66,800) (16,800,000) (16,866,800)
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Partners' capital, December 31, 1999 300 2,641,900 2,642,200
Net income for the six months ended June
30, 2000 300 25,200 25,500
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Partners' capital, June 30, 2000 $ 600 $ 2,667,100 $ 2,667,700
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</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
STATEMENTS OF INCOME AND EXPENSES
For the Quarters Ended June 30, 2000 and 1999
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)
<TABLE>
<CAPTION>
2000 1999
----------------------------------------------------------------------------
<S> <C> <C>
Income:
Rental $ 1,700 $330,500
Interest 46,500 205,600
Other 48,500
Gain on sale of property 35,900
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48,200 620,500
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Expenses:
Interest 67,100
Depreciation and amortization 4,600
Property operating:
Affiliates 3,200
Nonaffiliates 93,100
Real estate taxes 42,200
Insurance--Affiliate 6,600
Repairs and maintenance 49,800
General and administrative:
Affiliates 3,000 7,500
Nonaffiliates 30,700 52,100
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33,700 326,200
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Net income $14,500 $294,300
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Net income allocated to General Partners $ 200 $ 17,100
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Net income allocated to Limited Partners $14,300 $277,200
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Net income allocated to Limited Partners per Unit (100,000
Units outstanding) $ 0.14 $ 2.77
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</TABLE>
STATEMENTS OF INCOME AND EXPENSES
For the Six Months Ended June 30, 2000 and 1999
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)
<TABLE>
<CAPTION>
2000 1999
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<S> <C> <C>
Income:
Rental $ 2,600 $1,045,400
Interest 91,800 399,700
Other 48,500
Gain on sale of property 35,900
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94,400 1,529,500
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Expenses:
Interest 191,200
Depreciation and amortization 11,600
Property operating:
Affiliates 6,400
Nonaffiliates 286,200
Real estate taxes 131,700
Insurance--Affiliate 21,700
Repairs and maintenance 102,200
General and administrative:
Affiliates 5,900 14,000
Nonaffiliates 63,000 45,300
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68,900 810,300
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Net income $25,500 $ 719,200
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Net income allocated to General Partners $ 300 $ 33,800
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Net income allocated to Limited Partners $25,200 $ 685,400
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Net income allocated to Limited Partners per Unit (100,000
Units outstanding) $ 0.25 $ 6.85
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</TABLE>
STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2000 and 1999
(Unaudited)
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
2000 1999
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<S> <C> <C>
Cash flows from operating activities:
Net income $ 25,500 $ 719,200
Adjustments to reconcile net income to net cash
provided by operating activities:
Gain on sale of property (35,900)
Depreciation and amortization 11,600
Changes in assets and liabilities:
Decrease in rents receivable 259,100
(Increase) decrease in other assets (200) 13,900
Increase (decrease) in accounts payable and accrued
expenses 8,500 (507,100)
(Decrease) in due to Affiliates (3,000) (42,100)
(Decrease) in prepaid rent (65,000)
Increase in other liabilities 145,500
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Net cash provided by operating activities 30,800 499,200
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Cash flows from investing activities:
Proceeds from sale of property 7,818,100
Decrease in investments in debt securities, net 1,553,100
(Reduction) in earnest money deposit (50,000)
Decrease in escrow deposits 197,200
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Net cash provided by investing activities -- 9,518,400
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Cash flows from financing activities:
Principal payments on mortgage loan payable (672,400)
Repayment of mortgage loan payable (4,898,400)
Distributions paid to Partners (166,700) (333,400)
(Decrease) in security deposits (10,000)
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Net cash (used for) financing activities (166,700) (5,914,200)
-------------------------------------------------------------------------------
Net (decrease) increase in cash and cash equivalents (135,900) 4,103,400
Cash and cash equivalents at the beginning of the
period 3,268,500 3,855,000
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Cash and cash equivalents at the end of the period $3,132,600 $ 7,958,400
-------------------------------------------------------------------------------
Supplemental information:
Interest paid during the period $ -- $ 191,200
-------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements
4
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
June 30, 2000
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 Partnership sold its remaining property during 1999. The Partnership is in
the process of resolving post-closing matters related to the sold properties,
which includes reprorations, adjustments and the real estate tax appeal
disclosed in Note 3. Upon completion of this process, together with the
resolution of other pending matters, the Partnership will make a liquidating
distribution to Partners and dissolve.
The financial statements have been prepared in accordance with accounting
principles generally accepted in the United States ("GAAP"). The Partnership
utilizes the accrual method of accounting. Under this method, revenues are
recorded when earned and expenses are recorded when incurred. 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, 2000 are not necessarily indicative
of the operating results for the year ending December 31, 2000.
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.
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.
Reference is made to the Partnership's Annual Report for the year ended
December 31, 1999 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 six months ended June 30, 2000, the General Partners were not
paid a Partnership Management Fee and were allocated Net Profits of $200 and
$300, respectively. 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, 2000 were as follows:
<TABLE>
<CAPTION>
Paid
------------------
Quarter Six Months Payable
--------------------------------------------------------------
<S> <C> <C> <C>
Asset management fees $ 300 $ 600 $None
Reimbursement of expenses, at cost
--Accounting 700 3,600 None
--Investor communications 1,900 4,700 300
--------------------------------------------------------------
$2,900 $8,900 $ 300
--------------------------------------------------------------
</TABLE>
3. REAL ESTATE TAX APPEAL:
The Partnership is a party to appeals of the real estate taxes of the Fashion
Atrium Building for fiscal years 1992 and 1993. During these periods, the
Partnership owned a 50% interest in the joint venture that owned the Fashion
Atrium Building. There can be no assurance as to the amount that will be
realized or the timing of such realization from these appeals.
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 for the quarter ended June 30, 2000.
6
<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
/s/ DOUGLAS CROCKER II
Date: August 14, 2000 By: ______________________________________
DOUGLAS CROCKER II
PRESIDENT AND CHIEF EXECUTIVE OFFICER
/s/ NORMAN M. FIELD
Date: August 14, 2000 By: ______________________________________
NORMAN M. FIELD
VICE PRESIDENT--FINANCE AND TREASURER
7
