<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the period ended March 31, 1995
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OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________________ to _____________________
Commission File Number: 0-14121
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First Capital Income Properties, Ltd. - Series X
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(Exact name of registrant as specified in its charter)
Florida 59-2417973
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Two North Riverside Plaza, Suite 950, 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 Agreement of Limited Partnership filed as Exhibit
A to the Partnership's Prospectus dated September 25, 1984, included in the
Partnership's Registration Statement on Form S-11, is incorporated herein by
reference in Part I of this report.
<PAGE>
BALANCE SHEETS
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
March 31,
1995 December 31,
(Unaudited) 1994
- -----------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investment in commercial rental properties:
Land $ 6,928,400 $ 6,928,400
Buildings and improvements 24,335,400 24,179,500
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31,263,800 31,107,900
Accumulated depreciation and amortization (6,556,300) (6,379,100)
- -----------------------------------------------------------------------------
Total investment properties, net of accumulated
depreciation and amortization 24,707,500 24,728,800
Cash and cash equivalents 2,707,500 1,092,300
Restricted cash 37,500
Rents receivable 650,600 493,800
Escrow deposits 60,300 39,800
Prepaid expenses 200 12,500
Other assets (primarily loan acquisition costs net
of accumulated amortization of $146,900 and
$138,100, respectively) 120,200 90,500
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$28,246,300 $26,495,200
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LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage loans payable $12,377,800 $10,648,600
Accounts payable and accrued expenses 657,700 612,300
Due to Affiliates 47,900 39,300
Security deposits 14,900 13,300
Other liabilities 67,000 51,500
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13,165,300 11,365,000
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Partners' (deficit) capital:
General Partner (500)
Limited Partners (43,861 Units authorized, issued
and outstanding) 15,081,500 15,130,200
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15,081,000 15,130,200
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$28,246,300 $26,495,200
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</TABLE>
STATEMENTS OF PARTNERS' CAPITAL
For the quarter ended March 31, 1995
and the year ended December 31, 1994
(Unaudited)
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
General Limited
Partner Partners Total
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
Partners' (deficit) capital,
January 1, 1994 $(243,100) $16,322,400 $16,079,300
Net income (loss) for the year ended
December 31, 1994 243,100 (1,192,200) (949,100)
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Partners' capital,
December 31, 1994 0 15,130,200 15,130,200
Net (loss) for the quarter ended March
31, 1995 (500) (48,700) (49,200)
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Partners' (deficit) capital,
March 31, 1995 $ (500) $15,081,500 $15,081,000
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</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
STATEMENTS OF INCOME AND EXPENSES
For the quarters ended March 31, 1995 and 1994
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)
<TABLE>
<CAPTION>
1995 1994
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<S> <C> <C>
Income:
Rental $1,011,200 $1,568,900
Interest 36,000 38,800
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1,047,200 1,607,700
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Expenses:
Interest 322,600 349,100
Depreciation and amortization 186,000 303,400
Property operating:
Affiliates 60,100 67,800
Nonaffiliates 203,900 360,700
Real estate taxes 128,300 308,200
Insurance--Affiliate 18,300 34,900
Repairs and maintenance 110,900 181,800
General and administrative:
Affiliates 20,500 13,400
Nonaffiliates 45,800 42,400
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1,096,400 1,661,700
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Net (loss) $ (49,200) $ (54,000)
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Net (loss) allocated to General Partner $ (500) $ (500)
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Net (loss) allocated to Limited Partners $ (48,700) $ (53,500)
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Net (loss) allocated to Limited Partners per Unit
(43,861 Units authorized, issued and outstanding) $ (1.11) $ (1.22)
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</TABLE>
STATEMENTS OF CASH FLOWS
For the quarters ended March 31, 1995 and 1994
(Unaudited)
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
1995 1994
- ----------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) $ (49,200) $ (54,000)
Adjustments to reconcile net (loss) to net cash
provided by operating activities:
Depreciation and amortization 186,000 303,400
Changes in assets and liabilities:
(Increase) in rents receivable (156,800) (71,100)
Decrease (increase) in restricted cash 37,500 (19,100)
Decrease (increase) in prepaid expenses 12,300 (11,200)
(Increase) in other assets (100) (38,500)
Increase in accounts payable and accrued expenses 45,400 289,200
Increase (decrease) in due to Affiliates 8,600 (12,000)
Increase (decrease) in other liabilities 15,500 (25,100)
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Net cash provided by operating activities 99,200 361,600
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Cash flows from investing activities:
Payments for capital and tenant improvements (155,900) (33,400)
(Increase) in escrow deposits (20,500)
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Net cash (used for) investing activities (176,400) (33,400)
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Cash flows from financing activities:
Proceeds from issuance of mortgage loan payable 8,500,000
Principal payments on mortgage loans payable (6,770,800) (9,000)
Loan acquistion costs incurred (38,400)
Increase in security deposits 1,600 18,300
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Net cash provided by financing activities 1,692,400 9,300
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Net increase in cash and cash equivalents 1,615,200 337,500
Cash and cash equivalents at the beginning of the
period 1,092,300 5,051,700
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Cash and cash equivalents at the end of the period $2,707,500 $5,389,200
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Supplemental information:
Interest paid during the period $ 372,700 $ 386,400
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</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
March 31, 1995
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 on Form S-11, filed with the
Securities and Exchange Commission. Definitions of these terms are contained in
Article III of the First Amended and Restated Agreement of Limited Partnership,
which is incorporated herein by reference.
ACCOUNTING POLICIES:
The financial statements have been prepared in accordance with generally
accepted accounting principles. Under this method of accounting, revenues are
recorded when earned and expenses are recorded when incurred.
The financial information included in these financial statements is unaudited;
however, in management's opinion, all adjustments (consisting of only normal,
recurring accruals) necessary for a fair presentation of the results of
operations for the periods included have been made. Results of operations for
the quarter ended March 31, 1995, are not necessarily indicative of the
operating results for the year ending December 31, 1995.
The financial statements include the Partnership's 50% interest in one joint
venture and a 25% interest in another joint venture. The joint ventures are
operated under the control of the General Partner. Accordingly, the
Partnership's pro rata share of the ventures' revenues, expenses, assets and
liabilities is included in the financial statements.
Certain reclassifications have been made to the previously reported 1994
statements in order to provide comparability with the 1995 statements. These
reclassifications have not changed the 1994 results.
Cash equivalents are considered all highly liquid investments purchased with a
maturity of three months or less.
Reference is made to the Partnership's annual report for the year ended
December 31, 1994, 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.
2. RELATED PARTY TRANSACTIONS:
Subsequent to September 24, 1985, the Termination of the Offering, the General
Partner is entitled to 10% of Cash Flow, as a Partnership Management Fee. In
accordance with the Partnership Agreement, Net Profits (exclusive of Net
Profits from the sale or disposition of a Partnership property) shall be
allocated to the General Partner in an amount equal to the greater of 1% of
such Net Profits or the Partnership Management Fee, as defined, and the
balance, if any, to the Unit Holders. Net Losses (exclusive of Net Losses from
the sale or disposition of a Partnership property) shall be allocated 1% to the
General Partner and 99% to the Unit Holders. Net Losses from the sale or
disposition of a Partnership property (including provisions for value
impairment) shall be allocated; first, after giving effect to any distribution
of Sale or Refinancing Proceeds from the transaction, to all Partners with
positive balances in their Capital Accounts, pro rata in proportion to such
respective positive balances, to the extent of the total of such positive
balances; and second, the balance if any, 1% to the General Partner and 99% to
the Unit Holders. Notwithstanding, there shall be allocated to the General
Partner not less than 1% of all items of Partnership income, gain and loss
during the existence of the Partnership. For the quarter ended March 31, 1995,
the General Partner was not allocated a Partnership Management Fee, but was
allocated Net Losses from operations of approximately $500.
Fees and reimbursements paid and payable by the Partnership to Affiliates
during the quarter ended March 31, 1995 were as follows:
<TABLE>
<CAPTION>
Paid Payable
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<S> <C> <C>
Property management and leasing fees $67,800 $17,200
Reimbursement of property insurance premiums, at cost None 18,300
Real estate commission (a) None 10,000
Reimbursement of expenses, at cost
(1) Accounting 6,300 1,900
(2) Investor communication 1,600 500
(3) Legal 14,600 None
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$90,300 $47,900
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</TABLE>
(a) As of March 31, 1995, the Partnership owed $10,000 to the General Partner
for a real estate commission earned in connection with the sale of one
Partnership property. This commission has been accrued but not paid. Under
the terms of the Partnership Agreement, this fee will not be paid until
such time as the 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 Unit Holders) of 6% simple interest per annum on
their Capital Investment from the initial date of investment.
3. MORTGAGE LOANS PAYABLE:
On January 6, 1995, Indianapolis Mall Associates, the joint venture which owns
Glendale Center Shopping Mall, obtained a new mortgage loan in the amount of
$17,000,000 secured by this property. The Partnership's share of the new loan
amount is $8,500,000. The existing loan was paid off in full with the proceeds
from the new loan. The interest rate on the new loan is variable at Libor plus
4.5% and interest is payable monthly. The maturity date of the new loan is
January 1, 1999. Monthly payments of principal are to be made based on an 11-
year amortization and an interest rate of 9.5%. In addition, the Partnership
must pay as additional principal amortization, 50% of all cash flow from the
property for each prior calender year.
4
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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, 1994, for a discussion of the Partnership's business.
OPERATIONS
The Statements of Cash Flows presented in the financial statements represent a
reconciliation of the changes in cash balances. Cash Flow, as defined in the
Partnership Agreement, is generally not equal to Partnership net income or cash
flows as determined under generally accepted accounting principles, since
certain items are treated differently under the Partnership Agreement than
under generally accepted accounting principles. Management believes that in
order to facilitate a clear understanding of the Partnership's operations, an
analysis of Cash Flow (as defined by the Partnership Agreement) should be
examined in conjunction with an analysis of net income or cash flows, as
defined by generally accepted accounting principles. The amount of Cash Flow
and the return on Capital Investment are not indicative of actual distributions
and actual returns on Capital Investment.
<TABLE>
<CAPTION>
Comparative Cash Flow
Results For the
Quarters Ended
3/31/95 3/31/94
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<S> <C> <C>
Amount of Cash Flow (as defined by the Partnership
Agreement) $ 16,000 $ 240,400
Capital Investment $43,861,000 $43,861,000
Annualized return on Capital Investment (Annualized
Cash Flow/Capital Investment) 0.15% 2.19%
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</TABLE>
Comparisons of Cash Flow and operating results between the periods presented in
the above table are complicated by the disposition of the Fashion Atrium
Building on December 9, 1994. The disposition of Fashion Atrium accounted for
the significant decreases in rental income, interest expense, real estate tax
expense, repairs and maintenance and property operating expenses.
The decrease in Cash Flow of approximately $224,400 for the quarter ended March
31, 1995 when compared to the quarter ended March 31, 1994 was primarily due to
decreased operating results at Glendale Center Shopping Mall ("Glendale") of
approximately $220,600, decreased Cash Flow results of approximately $8,700 due
to the absence of the Fashion Atrium Building, a decrease in interest income
earned on short-term investments of $2,800 and an increase in general and
administrative expenses of $10,500, primarily due to an increase in legal costs
offset by a decrease in state and county income taxes paid. Partially
offsetting the decrease in Cash Flow results was increased operating results at
Regency Park Shopping Center ("Regency") of approximately $13,500.
Rental revenues at Glendale for the quarters ended March 31, 1995 and 1994 were
approximately $863,100 and $880,000, respectively. Rental revenues decreased
primarily due to a decrease in tenant expense reimbursements for common area
costs. Partially offsetting the decrease in rental revenues was an increase in
base rental income as a result of an increase in occupied square footage. The
three-month average occupancy rate increased from 85% in 1994 to 92% in 1995.
The increase in the three-month average occupancy rate is somewhat artificially
inflated due to the closing of approximately 44,000 square feet of an unused
section of the building. Also affecting the decrease in Cash Flow for this
property was an increase in debt service of approximately $222,600 due to the
January 1995 refinancing of the mortgage loan collateralized by this property.
Partially offsetting the decrease in Cash Flow for this property was a decrease
in repairs and maintenance and property operating expenses of $9,500 and
$28,900, respectively.
Rental revenues at Regency for the quarters ended March 31, 1995 and 1994 were
approximately $148,100 and $132,100, respectively. Rental revenues increased
primarily due to the increase in occupancy. The three-month average occupancy
rate increased from 78% in 1994 to 88% in 1995. Also contributing to the
increase in operating results was a slight decrease in interest expense from
1994 to 1995, caused by the reduced average indebtedness resulting from the
regularly scheduled principal amortization payments. Partially offsetting the
increase in Cash Flow results for this property were increased repairs and
maintenance and property operating expenses of approximately $3,000 and $3,100,
respectively.
To increase occupancy levels at the Partnership's properties, the General
Partner, through its Affiliated asset and property management groups, continues
to take the necessary actions deemed appropriate for the properties discussed
above. Some of these actions include: 1) implementation of marketing programs,
including hiring of third-party leasing agents or providing on-site leasing
personnel, advertising, direct mail campaigns and development of building
brochures; 2) early renewal of existing tenants and addressing any expansion
needs these tenants may have; 3) promotion of local broker events and
networking with local brokers; 4) networking with national level retailers; 5)
cold-calling other businesses and tenants in the market area; and 6) providing
rental concessions or competitively pricing rental rates depending on market
conditions.
LIQUIDITY AND CAPITAL RESOURCES
The increase in the Partnership's cash position as of March 31, 1995 when
compared to December 31, 1994 was primarily the result of the net proceeds
received in conjunction with the refinancing of the mortgage loan
collateralized by Glendale exceeding expenditures made for capital and tenant
improvements for the Partnership's properties. Liquid assets of the Partnership
as of March 31, 1995 are comprised of amounts held for working capital
purposes.
Net cash provided by operating activities continues to be the Partnership's
primary source of funds. Net cash provided by operating activities decreased
from $361,600 for the quarter ended March 31, 1994 to $99,200 for the quarter
ending March 31, 1995. The decrease was primarily due to the timing of the
payment of certain Partnership expenses, the decrease in the collection of
tenant's rental payments, as well as to the decrease in Cash Flow results as
discussed above.
The primary use of cash for investing activities is capital and tenant
improvements made to the Partnership's properties. Net cash (used for)
investing activities increased from $33,400 for the quarter ended March 31,
1994 to $176,400 for the quarter ended March 31, 1995 primarily due to an
increase in payments for capital and tenant improvements and to a lesser extent
to an increase in escrow deposits.
During the quarter ended March 31, 1995, the Partnership spent approximately
$155,900 for capital and tenant improvements and has budgeted to spend
approximately $654,000 and $48,000 for the remainder of 1995 at Glendale and
Regency, respectively. The General Partner feels that these improvements are
necessary in order to preserve the physical integrity of these properties as
well as to improve occupancy levels and maintain rental rates in very
competitive markets. Generally, working capital reserves are maintained to fund
these types of expenditures.
Net cash provided by financing activities increased from $9,300 for the quarter
ended March 31, 1994 to $1,692,400 for the quarter ended March 31, 1995 due
primarily to the refinancing of the mortgage loan collateralized by Glendale.
On January 6, 1995, Indianapolis Mall Associates, the joint venture which owns
Glendale, obtained a new mortgage loan in the amount of $17,000,000 secured by
Glendale. The Partnership's share of the new loan amount is $8,500,000. The
existing loan was paid off in full with the proceeds from the new loan. The
total cash received by the Partnership in connection with this new loan was
$1,738,900, which was net of $38,400 in loan acquisition costs, and was added
to the Partnership's working capital.
Distributions to Limited Partners continue to be suspended to insure that the
required cash is available when needed to fund anticipated capital and tenant
improvements, potential mortgage principal paydowns and other liquidity
requirements. All Cash Flow earned by the Partnership during the quarter ended
March 31, 1995 was retained to supplement working capital reserves. The General
Partner views Cash Flow as one of the Partnership's best and least expensive
sources of cash. For the quarter ended March 31, 1995, Cash Flow retained to
supplement working capital reserves approximated $16,000.
5
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K:
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(a) Exhibits: Financial Data Schedule
(b) Reports on Form 8-K:
There were no reports filed on Form 8-K during the quarter ended
March 31, 1995.
<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 X
BY: FIRST CAPITAL FINANCIAL CORPORATION
GENERAL PARTNER
Date: May 12, 1995 By: /s/ DOUGLAS CROCKER II
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DOUGLAS CROCKER II
President and Chief Executive Officer
Date: May 12, 1995 By: /s/ NORMAN M. FIELD
------------ ---------------------------------------
NORMAN M. FIELD
Vice President - Finance and Treasurer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<EXCHANGE-RATE> 1
<CASH> 2,707,500
<SECURITIES> 0
<RECEIVABLES> 650,600
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,358,100
<PP&E> 31,263,800
<DEPRECIATION> 6,556,300
<TOTAL-ASSETS> 28,246,300
<CURRENT-LIABILITIES> 695,600
<BONDS> 12,377,800
<COMMON> 0
0
0
<OTHER-SE> 15,081,000
<TOTAL-LIABILITY-AND-EQUITY> 28,246,300
<SALES> 0
<TOTAL-REVENUES> 1,047,200
<CGS> 0
<TOTAL-COSTS> 521,500
<OTHER-EXPENSES> 66,300
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 322,600
<INCOME-PRETAX> (49,200)
<INCOME-TAX> 0
<INCOME-CONTINUING> (49,200)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (49,200)
<EPS-PRIMARY> (1.11)
<EPS-DILUTED> (1.11)
</TABLE>
