<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
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FORM 10-K
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[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1999
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-12946
First Capital Income Properties, Ltd.--Series IX
(Exact name of registrant as specified in its charter)
Florida 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
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code (312) 207-0020
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: Limited Partnership
Units
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 [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]
Documents incorporated by reference:
The First Amended and Restated Certificate and Agreement of Limited Partnership
filed as Exhibit A to the definitive Prospectus dated May 24, 1983, included in
the Registrant's Registration Statement on Form S-11 (Registration
No. 2-82357), is incorporated herein by reference in Part IV of this report.
Exhibit Index--Page A-1
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PART I
ITEM 1. BUSINESS
The registrant, First Capital Income Properties, Ltd.--Series IX (the
"Partnership") is a limited partnership organized in 1983 under the Florida
Uniform Limited Partnership Law. The Partnership sold 100,000 Limited
Partnership Units (the "Units") to the public from June 1983 to October 1983,
pursuant to a Registration Statement on Form S-11 filed with the Securities and
Exchange Commission (Registration Statement No. 2-82357). Capitalized terms
used in this report have the same meaning as those terms have in the
Partnership's Registration Statement.
The Partnership was formed to invest primarily in existing, improved,
commercial income-producing real estate, such as shopping centers, warehouses
and office buildings, and, to a lesser extent, in other types of commercial
income-producing real estate. From July 1984 to May 1986, the Partnership made
four real property investments and purchased 50% interests in four joint
ventures, which were each formed with Affiliated partnerships for the purpose
of acquiring a 100% interest in certain real property. The Partnership's joint
ventures, prior to dissolution, were operated under the common control of First
Capital Financial Corporation (the "Managing General Partner"). In January
1993, the Partnership purchased the remaining 50% interest in one of the four
joint ventures. Through December 31, 1999, the Partnership has sold all of its
real property investments and liquidated all of its interests in joint
ventures. Upon the successful resolution of post-closing matters related to the
properties sold by the Partnership, the Partnership will make a liquidating
distribution and dissolve.
ITEM 2. PROPERTIES
During the year ended December 31, 1999, the Partnership sold its remaining
property interest.
ITEM 3. LEGAL PROCEEDINGS
(a & b) The Partnership and its properties were not a party to, nor the subject
of, any material pending legal proceedings, nor were any such proceedings
terminated during the quarter ended December 31, 1999. Ordinary routine legal
matters incidental to the business which were not deemed material were pursued
during the quarter ended December 31, 1999.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a,b,c & d) None.
2
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S EQUITY AND RELATED SECURITY HOLDER MATTERS
There has not been, nor is there expected to be, a public market for Units.
As of March 1, 2000, there were 9,290 Holders of Units.
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
For the Years Ended December 31,
----------------------------------------------------------
1999 1998 1997 1996 1995
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<S> <C> <C> <C> <C> <C>
Total revenues $1,957,000 $ 7,041,900 $19,285,300 $12,027,300 $11,974,000
Net income (loss) $1,088,400 $ 2,171,000 $12,754,100 $ 829,500 $(5,608,600)
Net income (loss)
allocated to Limited
Partners $1,021,300 $ 2,124,400 $12,206,000 $ 395,400 $(5,907,500)
Net income (loss)
allocated to Limited
Partners per Unit
(100,000 Units
outstanding) $ 10.21 $ 21.24 $ 122.06 $ 3.95 $ (59.08)
Total assets $3,285,400 $25,134,000 $46,634,100 $66,389,400 $70,894,100
Mortgage loan payable None $ 5,570,800 $ 6,559,700 $ 7,339,500 $ 8,039,400
Distributions to Limited
Partners per Unit
(100,000 Units
outstanding) (a) $ 168.00 $ 117.50 $ 409.50 $ 41.50 $ 35.00
Return of capital to
Limited Partners per
Unit (100,000 Units
outstanding) (b) $ 157.79 $ 96.26 $ 287.44 $ 37.55 $ 35.00
Other data:
Investment in commercial
rental properties (net
of accumulated
depreciation and
amortization) None $ 7,765,900 $18,705,800 $49,782,100 $54,231,400
Number of real property
interests owned at
December 31 None 1 2 4 4
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</TABLE>
(a) Distributions to Limited Partners per Unit for the years ended December 31,
1999, 1998 and 1997 included Sales Proceeds of $29.00, $105.50 and $378.50,
respectively. In addition, distributions to Limited Partners for the year
ended December 31, 1999 included cash previously reserved for working
capital purposes of $133.00.
(b) For the purposes of this table, return of capital represents either: 1) the
amount by which distributions, if any, exceed net income for the respective
year or 2) total distributions, if any, when the Partnership incurs a net
loss for the respective year. Pursuant to the Partnership Agreement,
Capital Investment is only reduced by distributions of Sale or Refinancing
Proceeds. Accordingly, return of capital as used in the above table does
not impact Capital Investment.
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 generally accepted accounting principles ("GAAP"):
<TABLE>
<CAPTION>
For the Years Ended December 31,
------------------------------------------------------------------
1999 1998 1997 1996 1995
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<S> <C> <C> <C> <C> <C>
Cash Flow (as defined in
the Partnership
Agreement) (a) $ 396,000 $ 1,585,500 $ 5,143,800 $ 5,240,400 $ 5,345,700
Items of reconciliation:
Principal payments on
mortgage loan payable 672,400 988,900 779,800 699,900 460,600
Changes in current
assets and
liabilities:
Decrease (increase) in
current assets 277,700 244,600 276,100 133,600 (112,900)
(Decrease) in current
liabilities (439,400) (48,800) (50,700) (131,700) (288,400)
- ---------------------------------------------------------------------------------------------
Net cash provided by
operating activities $ 906,700 $ 2,770,200 $ 6,149,000 $ 5,942,200 $ 5,405,000
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Net cash provided by
(used for) investing
activities $ 20,954,400 $ 2,347,700 $ 33,003,500 $ (570,500) $(2,748,500)
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Net cash (used for)
financing activities $(22,447,600) $(23,650,200) $(32,458,700) $(5,202,500) $(2,217,600)
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</TABLE>
(a) Cash Flow is defined in the Partnership Agreement as Partnership revenues
earned from operations (excluding tenant deposits and proceeds from the
sale, disposition or financing of any Partnership properties or the
refinancing of any Partnership indebtedness), minus all expenses incurred
(including Operating Expenses, payments of principal (other than balloon
payments of principal out of Offering Proceeds) and interest on any
Partnership indebtedness, and any reserves of revenues from operations
deemed reasonably necessary by the Managing General Partner), except
depreciation and amortization expenses and capital expenditures, lease
acquisition expenditures made from Offering proceeds and the General
Partners' Partnership Management Fee.
The above selected financial data should be read in conjunction with the
financial statements and the related notes appearing on pages A-1 through A-8
in this report.
3
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The ordinary business of the Partnership is expected to pass through three
phases: (i) Offering of Units and investment in properties; (ii) operation of
properties and (iii) sale or other disposition of properties.
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 commenced the Offering of Units in June 1983 and terminated the
Offering in October 1983 upon the sale of 100,000 Units. From July 1984 through
May 1986, the Partnership made investments in eight real properties, three of
which were 50% joint venture interests and one of which was a 50% joint venture
interest until January 1993, when the Partnership purchased the remaining 50%
joint venture interest from an Affiliated partnership.
In 1992, the Partnership, in addition to being in the operation of properties
phase, entered the disposition phase of its life cycle. 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. Partnership
operating results are generally expected to decline as real property interests
are sold since the Partnership no longer receives income generated from such
real property interests. During the three years ended December 31, 1999 the
Partnership sold four of its properties. Through December 31, 1999, the
Partnership has sold all of its investments in real property.
Operations
Comparison of the year ended December 31, 1999 to the year ended December 31,
1998
Net income decreased by $1,082,600 for the year ended December 31, 1999 when
compared to the year ended December 31, 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 cash available for investment together with a
reduction in operating results from Shoppes of West Melbourne ("Shoppes") and
Glendale Center Shopping Mall ("Glendale") due to their 1998 and 1999
respective sales.
Rental revenues decreased by $2,548,500 for the year ended December 31, 1999
when compared to the year ended December 31, 1998. The decrease was due to the
effects of the May 1999 sale of Glendale and the February 1998 sale of Shoppes.
Comparison of the year ended December 31, 1998 to the year ended December 31,
1997
Net income decreased by $10,583,100 for the year ended December 31, 1998 when
compared to the year ended December 31, 1997. The decrease was primarily due to
the 1997 gains recorded on the sales of Citrus Center and Richmond Plaza
Shopping Center ("Richmond"), which exceeded the 1998 gain recorded on the sale
of Shoppes. The decrease was also due to a provision for value impairment
recorded in 1998 on Glendale and the absence of operating results following the
sales of Citrus Center, Richmond and Shoppes. The decrease was partially offset
by improved operating results at Glendale.
Net income, exclusive of Citrus Center, Richmond and Shoppes and the provision
for value impairment increased by $220,400 for the year ended December 31, 1998
when compared to the year ended December 31, 1997. The increase was primarily
due to improved operating results at Glendale. The increase was also due to an
increase in interest earned on the Partnership's short-term investments, which
was due to an increase in the average cash available for investment resulting
from the funds generated from the sales of Richmond and Shoppes prior to
distribution to Limited Partners.
The following comparative discussion includes the results of Glendale only.
Rental revenues decreased by $156,600 or 4.5% for the year ended December 31,
1998 when compared to the year ended December 31, 1997. The decrease was
primarily the result of the effects of the 1997 early termination of a tenant's
lease. This early termination resulted in additional revenues during 1997 and
reduced occupancy and revenues during 1998. The decrease was also the result of
a decrease in tenant reimbursements for common area maintenance, which was due
to an overestimate of 1997 tenant reimbursements payable in 1998. The decrease
was also due to a decrease in base rents, which is due to the decline in
average occupancy.
Interest expense decreased by $100,800 for the year ended December 31, 1998
when compared to the year ended December 31, 1997. The decrease was primarily
due to the effects of principal payments made during the past 24 months on
Glendale's mortgage loan.
Repairs and maintenance expenses decreased by $90,300 for the year ended
December 31, 1998 when compared to the year ended December 31, 1997. The
decrease was primarily due to a decrease in snow removal costs. In addition,
the decrease was due to a reduction in ordinary repairs to the interior and
exterior of the property.
4
<PAGE>
Property operating expenses decreased by $94,000 for the year ended December
31, 1998 when compared to the year ended December 31, 1997. The decrease was
primarily due to a decrease in security, utility, advertising and promotional
costs at the property.
Real estate tax expense increased by $88,000 for the year ended December 31,
1998 when compared to the year ended December 31, 1997. The increase was
primarily due to an overestimate of 1996 taxes payable in 1997.
The rate of inflation has remained relatively stable during the years under
comparison and has had a minimal impact on the operating results of the
Partnership. The nature of various tenant lease clauses protected the
Partnership to some extent from increases in the rate of inflation. Certain of
the lease clauses provide for: 1) rent increases based on the Consumer Price
Index or graduated rental increases; 2) percentage rentals for which the
Partnership receives as additional rent a percentage of a tenant's sales over
predetermined break-even amounts and 3) total or partial tenant reimbursement
of property operating expenses (e.g., common area maintenance, real estate
taxes, etc.).
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. Cash Flow (as defined in the Partnership
Agreement) is generally not equal to net income or cash flows as determined by
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 second table in
Selected Financial Data 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.
The decrease in Cash Flow (as defined in the Partnership Agreement) of
$1,189,500 for the year ended December 31, 1999 when compared to year ended
December 31, 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. Partially offsetting this
decrease was the effects of reduced scheduled principal payments on the
Partnership's mortgage debt.
The decrease of $586,500 in the Partnership's cash position during the year
ended December 31, 1999 was primarily due to the November 30, 1999 special
distribution to Limited Partners of previously retained cash reserves. The
Partnership utilized all of its investments in debt securities plus other cash
reserved as of December 31, 1998 to make this distribution. In addition the
decrease was due to regular cash flow distributions to Partners exceeding cash
provided by operating activities less regularly scheduled principal payments on
mortgage loan payable.
The decrease in net cash provided by operating activities of $1,863,500 for the
year ended December 31, 1999 when compared to the year ended December 31, 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 increased by $18,606,700 for the year
ended December 31, 1999 when compared to the year ended December 31, 1998. The
increase was primarily due to a net maturity of cash invested in debt
securities during 1999 as compared to a net investment during 1998. The
increase was partially offset by 1998 proceeds realized from the sale of
Shoppes exceeding the 1999 proceeds realized from the sale of Glendale.
The Partnership has no financial instruments for which there are significant
market risks.
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 closing expenses and the repayment of the mortgage loan
encumbering the property, amounted to $2,915,400. In connection with this sale,
the Partnership distributed $2,900,000 or $29.00 per Unit on November 30, 1999
to Limited Partners of record as of May 21, 1999. In addition, in connection
with the sale of the Partnership's remaining real estate asset, the
Partnership's need for cash reserves had been lessened. Accordingly, the
Partnership declared a special distribution of cash previously retained as
working capital reserves in the amount of $13,300,000 or $133.00 per Unit,
which was paid on November 30, 1999 to Limited Partners of record as of May 21,
1999.
5
<PAGE>
The decrease in net cash used for financing activities of $1,202,600 for the
year ended December 31, 1999 when compared to the year ended December 31, 1998
was primarily due to the special distributions in 1998 of Richmond and Shoppes
Sales Proceeds exceeding the 1999 special distribution of Glendale Sale
Proceeds and the special distribution of cash reserves. The decrease was
partially offset by the repayment of the mortgage loan encumbering Glendale in
connection with its May 1999 sale.
In prior years, the Partnership discussed the nature and progress of its plans
to become Year 2000 ready. In late 1999, the Partnership completed its
remediation and testing of systems. As a result of those planning and
implementation efforts, the Partnership experienced no significant disruptions
in mission critical information technology and non-information technology
systems and believes those systems successfully responded to the Year 2000 date
change. The Partnership incurred minimal expenses in connection with
remediating its systems. The Partnership is not aware of any material problems
resulting from Year 2000 issues, either with its products, its internal
systems, or the products and services of third parties. The Partnership will
continue to monitor its mission critical computer applications and those of its
suppliers and vendors throughout the year 2000 to ensure that any latent Year
2000 matters that may arise are addressed promptly.
The Managing General Partner is in 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 reprorations and 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
Partnership will make a liquidating distribution to Partners and dissolve.
Distributions to Limited Partners for the quarter ended December 31, 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 year ended
December 31, 1999, the Partnership distributed Cash Flow (as defined in the
Partnership Agreement) of $600,000 or $6.00 per Unit and utilized $270,800 of
previously established cash reserves to fund these distributions to Partners.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The response to this item is submitted as a separate section of this report.
See page A-1 "Index of Financial Statements, Schedule and Exhibits."
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
6
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a) & (e) DIRECTORS
The Partnership has no directors. First Capital Financial Corporation ("FCFC")
is the Managing General Partner. The directors of FCFC, as of March 31, 2000,
are shown in the table below. Directors serve for one year or until their
successors are elected. The next annual meeting of FCFC will be held in June
2000.
<TABLE>
<CAPTION>
Name Office
---- --------
<S> <C>
Douglas Crocker II.............................................. Director
Sheli Z. Rosenberg.............................................. Director
</TABLE>
Douglas Crocker II, 59, has been President and Chief Executive Officer since
December 1992 and a Director since January 1993 of the Managing General
Partner. Mr. Crocker has been President, Chief Executive Officer and trustee of
Equity Residential Properties Trust since March 31, 1993. Mr. Crocker is a
member of the Board of Directors of Wellsford Real Properties, Inc. and Ventas
Inc. and was a member of the Board of Directors of Horizon Group, Inc. from
July 1996 to June 1998. Mr. Crocker was an Executive Vice President of Equity
Financial and Management Company ("EFMC") from November 1992 until March 1997.
Sheli Z. Rosenberg, 58, was President and Chief Executive Officer of the
Managing General Partner from December 1990 to December 1992 and has been a
Director of the Managing General Partner since September 1983; was Executive
Vice President and General Counsel for EFMC from October 1980 to November 1994;
has been vice chairman of Equity Group Investments, LLC ("EGI") since January
2000. From November 1994 until 1999 has been President and Chief Executive
Officer of EGI. Ms. Rosenberg has been a Director of Great American Management
and Investment Inc. ("Great American") since June 1984 and is a director of
various subsidiaries of Great American. She is also a director of Anixter
International Inc., Capital Trust, Inc., CVS Corporation, Dynergy, Inc., Danka
Business Systems PLC and Manufactured Home Communities, Inc. She is also a
trustee of Equity Residential Properties Trust and Equity Office Properties
Trust. Ms. Rosenberg was a Principal of Rosenberg & Liebentritt, P.C. ("R&L")
from 1980 until 1997. R&L served as counsel to the Partnership, the Managing
General Partner and certain of their Affiliates until its dissolution in 1999.
(b) & (e) EXECUTIVE OFFICERS
The Partnership does not have any executive officers. The executive officers of
the Managing General Partner as of March 31, 2000 are shown in the table. All
officers are elected to serve for one year or until their successors are
elected and qualified.
<TABLE>
<CAPTION>
Name Office
---- ------
<S> <C>
Douglas Crocker II................. President and Chief Executive Officer
Donald J. Liebentritt.............. Vice President
Norman M. Field.................... Vice President--Finance and Treasurer
</TABLE>
PRESIDENT AND CEO--See Table of Directors above.
Donald J. Liebentritt, 49, has been Vice President of the Managing General
Partner since July 1997 and is President of EGI, Vice President and Assistant
Secretary of Great American and was Principal and Chairman of the Board of R&L.
Norman M. Field, 51, has been Vice President of Finance and Treasurer of the
Managing General Partner since February 1984, and also served as Vice President
of Great American from July 1983 until March 1995 and from July 1997 to the
present.
(d) FAMILY RELATIONSHIPS
There are no family relationships among any of the foregoing directors and
officers.
(f) INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
There are no involvements in certain legal proceedings among any of the
foregoing directors and officers.
7
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
(a,b,c & d) As stated in Item 10, the Partnership has no officers or directors.
Neither the Managing General Partner, nor any director or officer of the
Managing General Partner, received any direct remuneration from the Partnership
during the year ended December 31, 1999. However, the Managing General Partner
and Affiliates of the Managing General Partner do compensate the directors and
officers of the Managing General Partner.
For additional information see Item 13 (a) Certain Relationships and Related
Transactions.
(e)None.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) As of March 1, 2000, no person owned of record or was known by the
Partnership to own beneficially more than 5% of the Partnership's 100,000
Units then outstanding.
(b) The Partnership has no directors or executive officers. As of March 1, 2000
the executive officers and directors of First Capital Financial
Corporation, the Managing General Partner, did not own any Units.
(c) None.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(a) Affiliates of the Managing General Partner, provided leasing, property
management and supervisory services to the Partnership. Compensation for
these property management services may not exceed the lesser of the
compensation customarily charged in arm's-length transactions by persons
rendering similar services or 6% of the gross receipts from the property
being managed plus normal out-of-pocket expenses where the Managing General
Partner or Affiliate provides leasing, re-leasing and/or leasing-related
services, or 3% of gross receipts where the Managing General Partner or
Affiliate does not perform leasing, re-leasing and/or leasing-related
services for a particular property. For the year ended December 31, 1999,
these Affiliates were entitled to supervisory management fees of $9,800. In
addition, other Affiliates of the Managing General Partner were entitled to
$45,400 as reimbursements for insurance, personnel and other miscellaneous
services. Compensation for these services are on terms which are fair,
reasonable and no less favorable to the Partnership than reasonably could
be obtained from unaffiliated persons. Of these amounts, a total of $3,300
was due to Affiliates as of December 31, 1999.
The Partnership owed $48,500 to the Managing General Partner for a real
estate commission earned in connection with the sale of a Partnership
property. This commission was accrued but not paid. The total of all real
estate commissions incurred in connection with the sale of the
Partnership's properties shall not exceed the lesser of the compensation
customarily charged in arm's-length transactions or 6% of the sales price
of the property. Under the terms of the Partnership Agreement, this fee
will not 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) of 6%
simple interest per annum on their Capital Investment. During the year
ended December 31, 1999, following the sale of the Partnership's final
property, it was determined that the requirement would not be fulfilled
and, accordingly, the liability was written off and reported as other
income.
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. 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
8
<PAGE>
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 year ended December 31, 1999, the
General Partners were paid a Partnership Management Fee of $66,800, and
allocated Net Profits of $67,100, which included a gain from the sale of
property of $300.
(b) Rosenberg & Liebentritt, P.C. ("Rosenberg"), served as legal counsel to the
Partnership, the Managing General Partner and certain of their Affiliates.
Donald J. Liebentritt, Vice President of the Managing General Partner was a
Principal and the Chairman of the Board of Rosenberg. Compensation for
these services were on terms which were fair, reasonable and no less
favorable to the Partnership than reasonably could have been obtained from
unaffiliated persons. Rosenberg earned legal fees of $27,200 for the year
ended December 31, 1999.
(c) No management person is indebted to the Partnership.
(d) None.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a,c & d) (1,2 & 3) See Index of Financial Statements, Schedule and Exhibits on
page A-1 of Form 10-K.
(b)Reports on Form 8-K:
There were no reports filed on Form 8-K for the quarter ended December 31,
1999.
9
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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
Dated: March 24, 2000 By: ____________________________________
DOUGLAS CROCKER II
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
/s/ DOUGLAS CROCKER II March 24, 2000 President, Chief Executive
______________________________________ Officer and Director of
DOUGLAS CROCKER II the Managing General
Partner
/s/ SHELI Z. ROSENBERG March 24, 2000 Director of the Managing
______________________________________ General Partner
SHELI Z. ROSENBERG
/s/ DONALD J. LIEBENTRITT March 24, 2000 Vice President
______________________________________
DONALD J. LIEBENTRITT
/s/ NORMAN M. FIELD March 24, 2000 Vice President--Finance
______________________________________ and Treasurer
NORMAN M. FIELD
</TABLE>
10
<PAGE>
INDEX OF FINANCIAL STATEMENTS, SCHEDULES AND EXHIBITS
FINANCIAL STATEMENTS FILED AS PART OF THIS REPORT
<TABLE>
<CAPTION>
Pages
- ------------------------------------------------------------------------------
<S> <C>
Report of Independent Auditors A-2
Balance Sheets as of December 31, 1999 and 1998 A-3
Statements of Partners' Capital for the Years Ended December 31,
1999, 1998 and 1997 A-3
Statements of Income and Expenses for the Years Ended December 31,
1999, 1998 and 1997 A-4
Statements of Cash Flows for the Years Ended December 31, 1999,
1998 and 1997 A-4
Notes to Financial Statements A-5 to A-8
- ------------------------------------------------------------------------------
</TABLE>
All schedules have been omitted as inapplicable, or for the reason that the
required information is shown in the financial statements or notes thereto.
EXHIBITS FILED AS PART OF THIS REPORT
EXHIBITS (3 & 4) First Amended and Restated Certificate and Agreement of
Limited Partnership as set forth on pages A-1 through A-30 of the Partnership's
definitive Prospectus dated May 24, 1983; Registration Statement No. 2-82357,
filed pursuant to Rule 424 (b), is incorporated herein by reference.
EXHIBIT (10) Material Contracts
Real Estate Sale Agreement and Closing Documents for the sale of Glendale
Center Shopping Mall filed as an exhibit to the Partnership's Report on Form 8-
K filed on June 4, 1999 is incorporated herein by reference.
Real Estate Sale Agreement and Closing Documents for the sale of Shoppes of
West Melbourne filed as an exhibit of the Partnership's Report on Form 8-K
filed on March 16, 1998 is incorporated herein by reference.
Real Estate Sale Agreement and Closing Documents for the sale of Richmond Plaza
Shopping Center filed as an exhibit to the Partnership's Report on Form 8-K
filed on January 12, 1998 is incorporated herein by reference.
EXHIBIT (13) Annual Report to Security Holders
The 1998 Annual Report to Limited Partners is being sent under separate cover,
not as a filed document and not via EDGAR, for the information of the
Commission.
EXHIBIT (27) Financial Data Schedule
A-1
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Partners
First Capital Income Properties, Ltd.--Series IX
Chicago, Illinois
We have audited the accompanying balance sheets of First Capital Income
Properties, Ltd.--Series IX as of December 31, 1999 and 1998, and the related
statements of income and expenses, partners' capital and cash flows for each of
the three years in the period ended December 31, 1999. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of First Capital Income
Properties, Ltd.--Series IX at December 31, 1999 and 1998, and the results of
its operations and its cash flows for each of the three years in the period
ended December 31, 1999, in conformity with accounting principles generally
accepted in the United States.
Ernst & Young LLP
Chicago, Illinois
February 15, 2000
A-2
<PAGE>
BALANCE SHEETS
December 31, 1999 and 1998
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
1999 1998
- -------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investment in commercial rental property:
Land $ $ 2,887,600
Buildings and improvements 11,994,400
- -------------------------------------------------------------------------------
14,882,000
Accumulated depreciation and amortization (7,116,100)
- -------------------------------------------------------------------------------
Total investment property, net of accumulated
depreciation and amortization 7,765,900
Cash and cash equivalents 3,268,500 3,855,000
Investments in debt securities 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
- -------------------------------------------------------------------------------
$3,285,400 $25,134,000
- -------------------------------------------------------------------------------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage loan payable $ $ 5,570,800
Accounts payable and accrued expenses 83,400 566,000
Due to Affiliates, net 3,300 53,100
Security deposits 10,000
Distributions payable 166,700 166,700
Prepaid rent 65,000
Earnest money deposit 50,000
Other liabilities 389,800 231,800
- -------------------------------------------------------------------------------
643,200 6,713,400
- -------------------------------------------------------------------------------
Partners' capital:
General Partners 300
Limited Partners (100,000 Units issued and
outstanding) 2,641,900 18,420,600
- -------------------------------------------------------------------------------
2,642,200 18,420,600
- -------------------------------------------------------------------------------
$3,285,400 $25,134,000
- -------------------------------------------------------------------------------
</TABLE>
STATEMENTS OF PARTNERS' CAPITAL
For the years ended December 31, 1999, 1998 and 1997
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Partners' (deficit) capital, January 1,
1997 $(117,000) $ 56,790,200 $ 56,673,200
Net income for the year ended December
31, 1997 548,100 12,206,000 12,754,100
Distributions for the year ended
December 31, 1997 (344,400) (40,950,000) (41,294,400)
- -------------------------------------------------------------------------------
Partners' capital, December 31, 1997 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 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)
- -------------------------------------------------------------------------------
Partners' capital, December 31, 1999 $ 300 $ 2,641,900 $ 2,642,200
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
A-3
<PAGE>
STATEMENTS OF INCOME AND EXPENSES
For the years ended December 31, 1999, 1998 and 1997
(All dollars rounded to nearest 00s except per Unit amounts)
<TABLE>
<CAPTION>
1999 1998 1997
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
Income:
Rental $1,041,900 $3,590,400 $ 9,229,600
Interest 835,000 1,460,000 1,386,100
Gain on sales of property 31,600 1,991,500 8,669,600
Other 48,500
- ---------------------------------------------------------------------------
1,957,000 7,041,900 19,285,300
- ---------------------------------------------------------------------------
Expenses:
Interest 191,200 616,500 717,300
Depreciation and amortization 11,600 394,900 1,839,100
Property operating:
Affiliates 8,900 46,100 297,900
Nonaffiliates 291,000 860,100 1,783,800
Real estate taxes 97,900 380,900 681,600
Insurance--Affiliate 21,700 53,500 99,700
Repairs and maintenance 103,000 234,700 864,400
General and administrative:
Affiliates 30,500 35,800 30,000
Nonaffiliates 112,800 248,400 217,400
Provision for value impairment 2,000,000
- ---------------------------------------------------------------------------
868,600 4,870,900 6,531,200
- ---------------------------------------------------------------------------
Net income $1,088,400 $2,171,000 $12,754,100
- ---------------------------------------------------------------------------
Net income allocated to General Partners $ 67,100 $ 46,600 $ 548,100
- ---------------------------------------------------------------------------
Net income allocated to Limited Partners $1,021,300 $2,124,400 $12,206,000
- ---------------------------------------------------------------------------
Net income allocated to Limited Partners
per Unit (100,000 Units outstanding) $ 10.21 $ 21.24 $ 122.06
- ---------------------------------------------------------------------------
</TABLE>
STATEMENTS OF CASH FLOWS
For the years ended December 31, 1999, 1998 and 1997
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
1999 1998 1997
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 1,088,400 $ 2,171,000 $ 12,754,100
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 11,600 394,900 1,839,100
Gain on sales of property (31,600) (1,991,500) (8,669,600)
Provision for value impairment 2,000,000
Changes in assets and liabilities:
Decrease in rents receivable 259,100 239,900 107,800
Decrease in other assets 18,600 4,700 168,300
(Decrease) in accounts payable and
accrued expenses (482,600) (32,500) (284,600)
(Decrease) in due to Affiliates (49,800) (9,500) (61,200)
(Decrease) increase in prepaid rent (65,000) 38,500 (30,400)
Increase (decrease) in other
liabilities 158,000 (45,300) 325,500
- --------------------------------------------------------------------------------
Net cash provided by operating
activities 906,700 2,770,200 6,149,000
- --------------------------------------------------------------------------------
Cash flows from investing activities:
Proceeds from sales of property 7,813,800 10,576,600 38,213,300
Decrease (increase) in investments
in debt securities 12,993,400 (8,131,400) (4,862,000)
Payments for capital and tenant
improvements (700) (267,000)
(Reduction) in earnest money deposit (50,000)
Decrease (increase) in escrow
deposits 197,200 (96,800) (80,800)
- --------------------------------------------------------------------------------
Net cash provided by investing
activities 20,954,400 2,347,700 33,003,500
- --------------------------------------------------------------------------------
Cash flows from financing activities:
Principal payments on mortgage loans
payable (672,400) (988,900) (779,800)
Repayment of mortgage loan payable (4,898,400)
Payment of loan acquisition costs (27,900)
(Decrease) in security deposits (10,000) (11,200) (123,400)
Distributions paid to Partners (16,866,800) (22,622,200) (31,555,500)
- --------------------------------------------------------------------------------
Net cash (used for) financing
activities (22,447,600) (23,650,200) (32,458,700)
- --------------------------------------------------------------------------------
Net (decrease) increase in cash and
cash equivalents (586,500) (18,532,300) 6,693,800
Cash and cash equivalents at the
beginning of the year 3,855,000 22,387,300 15,693,500
- --------------------------------------------------------------------------------
Cash and cash equivalents at the end
of the year $ 3,268,500 $ 3,855,000 $ 22,387,300
- --------------------------------------------------------------------------------
Supplemental information:
Interest paid during the year $ 191,200 $ 616,500 $ 717,300
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
A-4
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 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.
Organization:
The Partnership was formed on February 2, 1983, by the filing of a Certificate
and Agreement of Limited Partnership with the Department of State of the State
of Florida, and commenced the Offering of Units on June 13, 1983. The
Certificate and Agreement, as amended and restated, authorized the sale to the
public of 75,000 Units (with the Managing General Partner's option to increase
the Offering to 100,000 Units) and not less than 1,400 Units pursuant to the
Prospectus. On June 28, 1983, the required minimum subscription level was
reached and the Partnership's operations commenced. The Managing General
Partner exercised its option to increase the Offering to 100,000 Units, which
amount was sold prior to the Termination of the Offering in October, 1983. The
Partnership was formed to invest primarily in existing, improved, income-
producing commercial real estate.
The Partnership has disposed of its real estate properties. Upon resolution of
the various post closing matters related to the sale of the Partnership's
properties, the Partnership will make a liquidating distribution and dissolve.
In 1998, the Company adopted the Financial Accounting Standards Board's
Statement of Financial Accounting Standards No. 131, "Disclosures about
Segments of an Enterprise and Related Information". 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 relating to
properties sold by the Partnership.
The adoption of Statement 131 did not affect the results of operations or
financial position.
The Partnership Agreement provides that the Partnership will be dissolved on or
before December 31, 2014. The Limited Partners, by a majority vote, may
dissolve the Partnership at any time.
Accounting policies:
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. 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 attained.
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 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 is not liable for federal income taxes as the Partners
recognize their proportionate share of the Partnership income or loss in their
income tax returns; therefore, no provision for federal income taxes is made in
the financial statements of the Partnership. In addition, it is not practical
for the Partnership to determine the aggregate tax bases of the Limited
Partners; therefore, the disclosure of the differences between the tax bases
and the reported assets and liabilities of the Partnership would not be
meaningful.
Commercial rental properties are 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. Upon classifying a
commercial rental property as held for disposition, no further depreciation or
amortization of such property is provided for in the financial
A-6
<PAGE>
statements. Lease acquisition fees are recorded at cost and amortized on the
straight-line method over the life of the respective lease. Maintenance and
repairs 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 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. Except as disclosed in Note 4, 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 on sale is recognized in accordance with GAAP.
Cash equivalents are considered all highly liquid investments with a maturity
of three months or less when purchased.
Investments in debt securities as of December 31, 1998, were comprised of
obligations of the United States government and are classified as held-to-
maturity. These investments are carried at their amortized cost basis in the
financial statements, which approximated fair market value. All of these
securities had maturities of less than one year when purchased.
Certain reclassifications have been made to the 1998 and 1997 statements in
order to provide comparability with the 1999 statements. These
reclassifications have no effect on net income or Partners' capital.
The Partnership's financial statements include financial instruments, including
receivables, escrow deposits, trade liabilities and mortgage debt. The
Partnership considers the disclosure of the fair value of its mortgage debt to
be impracticable due to the general illiquid nature of the real estate
financing market and an inability to obtain comparable financing on its
property due to a decline in market value. The fair value of all other
financial instruments, including cash and cash equivalents, were not materially
different from their carrying value at December 31, 1999 and 1998.
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. 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 year ended December 31, 1999, the General
Partners were paid a Partnership Management Fee of $66,800, and allocated Net
Profits of $67,100, which included a gain of $300 from the sale of a
Partnership property. For the year ended December 31, 1998, the General
Partners were paid a Partnership Management Fee of $133,300, and allocated Net
Profits of $46,600, which included a gain of $19,900 from the sale of a
Partnership property and a (loss) of $(106,600) from a provision for value
impairment. For the year ended December 31, 1997, the General Partners were
paid a Partnership Management Fee of $344,400, and allocated Net Profits of
$548,100, which included gains totaling $203,700 from the sale of two
properties.
A-7
<PAGE>
Fees and reimbursements paid and payable to Affiliates for the years ended
December 31, 1999, 1998 and 1997 were as follows:
<TABLE>
<CAPTION>
1999 1998 1997
--------------- ---------------- ---------------------
Payable
Paid Payable Paid Payable Paid (Receivable)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Real estate commission
(a) None None None $48,500 None $48,500
Property management and
leasing fees $ 9,800 None $ 31,100 None $305,600 (2,000)
Reimbursements of
property insurance
premiums 21,700 None 53,500 None 99,700 None
Legal 27,200 None 66,500 None 98,200 15,000
Reimbursements of
expenses, at cost:
--Accounting 12,300 $2,300 16,500 3,200 18,700 900
--Investor
communication 12,700 1,000 8,700 1,400 7,900 200
--Other None None 200 None None None
- -------------------------------------------------------------------------------
$83,700 $3,300 $176,500 $53,100 $530,100 $62,600
- -------------------------------------------------------------------------------
</TABLE>
The variance between the amounts listed in this table and the Statement of
Income and Expense is due to capitalized legal costs.
(a) The Partnership owed $48,500 to the Managing General Partner for a real
estate commission earned in connection with the sale of a Partnership
property. This commission was accrued but not paid. Under the terms of the
Partnership Agreement, this fee will not 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) of 6% simple interest per annum on their Capital
Investment. During the year ended December 31, 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 and reported as other income.
3. Income tax:
The Partnership utilizes the accrual method of accounting for both income tax
reporting and financial statement purposes. Financial statement results will
differ from tax results due to the use of differing depreciation lives and
methods, the recognition of rents received in advance as taxable income, the
Partnership's provisions for value impairment and other factors. For the years
ended December 31, 1999, 1998 and 1997, net (loss) income for income tax
reporting purposes was $(3,131,000), $3,895,200 and $13,135,900, respectively.
4. Property sales:
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 $2,915,400, which was net of closing
expenses and the repayment of the mortgage loan encumbering the property. The
Partnership recorded a gain of $31,600 in connection with this sale and
distributed $2,900,000 or $29.00 per Unit on November 30, 1999 to Limited
Partners of record as of May 21, 1999. In addition, in connection with the sale
of the Partnership's remaining real estate asset, the Partnership's need for
cash reserves had been lessened. Accordingly, the Partnership declared a
special distribution of $13,300,000 or $133.00 per Unit, which was paid on
November 30 , 1999 to Limited Partners of record as of May 21, 1999. Upon
entering into the contract to sell Glendale in 1998 the Partnership recorded a
provision for value impairment in the amount of $2,000,000 which reduce the
carrying basis in Glendale to approximate the contract price less estimated
selling expenses. In addition, the Partnership classified Glendale as Held for
Disposition as of October 1, 1998 which precluded the recording of depreciation
from that point forward.
On February 27, 1998, the Partnership consummated the sale of Shoppes of West
Melbourne, located in West Melbourne, Florida, for a sale price of $11,000,000.
Net proceeds, net of closing expenses, were $10,576,600. The Partnership
recorded a gain of $1,991,500 for the year ended December 31, 1998 and
distributed $10,550,000 or $105.50 per Unit on August 31, 1998 to Limited
Partners of record as of February 27, 1998.
On December 31, 1997, the Partnership consummated the sale of Richmond Plaza
Shopping Center, located in Augusta, Georgia, for a sale price of $10,750,000.
Net proceeds, net of closing expenses, from this transaction were $10,433,400.
The Partnership recorded a gain of $2,441,900 for the year ended December 31,
1997 in connection with this sale and distributed $10,350,000 or $103.50 per
Unit on May 31, 1998 to Limited Partners of record as of December 31, 1997.
A-8
<PAGE>
On August 1, 1997, the Partnership consummated the sale of Citrus Center,
located in Orlando, Florida, for a sale price of $28,500,000. Net proceeds, net
of closing expenses, from this transaction were $27,770,000. The Partnership
recorded a gain of $6,227,700 for the year ended December 31, 1997 in
connection with this sale and distributed $27,500,000 or $275.00 per Unit on
November 30, 1997 to Limited Partners of record as of August 1, 1997.
All of the above sales were all-cash transactions with, the exception of post-
closing matters, no further involvement on the part of the Partnership.
A-9
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 3,268,600
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,268,500
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,285,400
<CURRENT-LIABILITIES> 253,400
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 3,642,200
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 1,957,000
<CGS> 0
<TOTAL-COSTS> 522,500
<OTHER-EXPENSES> 143,300
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 191,200
<INCOME-PRETAX> 1,088,400
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,088,400
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,088,400
<EPS-BASIC> 10.21
<EPS-DILUTED> 10.21
</TABLE>
