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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
---------------
FORM 10-K
---------------
[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 0-14121
FIRST CAPITAL INCOME PROPERTIES, LTD.--SERIES X
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
FLORIDA 59-2417973
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
TWO NORTH RIVERSIDE PLAZA, SUITE 700, 60606-2607
CHICAGO, ILLINOIS
(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 September 25, 1984,
included in the Registrant's Registration Statement on Form S-11 (Registration
No. 2-92364), 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 X (the
"Partnership") is a limited partnership organized in 1984 under the Florida
Uniform Limited Partnership Law. The Partnership sold 43,861 Limited
Partnership Units (the "Units") to the public from September 1984 to September
1985, pursuant to a Registration Statement on Form S-11 filed with the
Securities and Exchange Commission. Unless otherwise defined herein,
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 or to-be-developed
real estate, such as shopping centers, warehouses, office buildings, and, to a
lesser extent, in other types of income-producing commercial real estate. From
December 1984 to February 1988, the Partnership made one real property
investment, purchased 50% interests in two joint ventures and a 25% interest in
one joint venture each with Affiliated partnerships. These joint ventures were
each formed for the purpose of acquiring a 100% interest in certain real
property and, prior to dissolution were operated under the common control of
First Capital Financial Corporation (the "General Partner"). Through December
31, 1999, the Partnership has sold all four of its property investments. Upon
the successful resolution of post-closing matters related to the properties
sold by the Partnership, the Partnership will make a liquidating distribution
to Partners 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 was 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.
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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 2,980 Holders of Units.
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
For the Years Ended December 31,
------------------------------------------------------------
1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total revenues $1,467,000 $ 3,548,500 $ 4,731,800 $ 4,299,700 $ 4,288,100
Net income (loss) $ 646,200 $(1,044,300) $ 1,560,000 $(2,332,100) $(7,271,600)
Net income (loss)
allocated to Limited
Partners $ 639,700 $(1,033,900) $ 1,544,400 $(2,308,800) $(7,198,900)
Net income (loss)
allocated to Limited
Partners per Unit
(43,861 Units
outstanding) $ 14.58 $ (23.57) $ 35.21 $ (52.64) $ (164.13)
Total assets $2,876,300 $12,438,100 $14,350,700 $17,384,800 $20,522,900
Mortgage loans payable None $ 5,570,800 $ 6,559,700 $11,194,100 $11,998,000
Distributions to Limited
Partners per Unit
(43,861 Units
outstanding) (a) $ 97.11 None None None None
Return of capital to
Limited Partners per
Unit (43,861 Units
outstanding) (b) $ 82.53 None None None None
Other data:
Investment in commercial
rental properties (net
of accumulated
depreciation and
amortization) None $ 7,765,900 $10,089,200 $14,416,200 $17,381,000
Number of real property
interests owned at
December 31 None 1 1 2 2
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</TABLE>
(a) Distributions to Limited Partners per Unit for the year ended December 31,
1999 were comprised of Sale Proceeds of $66.11 and a special distribution
of cash previously reserved for working capital purposes of $31.00.
(b) For the purposes of this table, return of capital represents either: 1) the
amount by which distributions, if any, exceeded 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 (Deficit) (as
defined in the
Partnership Agreement)
(a) $ (46,200) $ 330,300 $ 436,700 $ 191,900 $ 288,600
Items of reconciliation:
Principal payments on
mortgage loans payable 672,400 988,900 814,600 803,900 500,600
Changes in current
assets and
liabilities:
Decrease in current
assets 173,300 124,100 138,100 13,900 26,600
(Decrease) increase in
current liabilities (317,900) 118,000 55,400 (6,100) (55,300)
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Net cash provided by
operating activities $ 481,600 $ 1,561,300 $ 1,444,800 $1,003,600 $ 760,500
- ----------------------------------------------------------------------------------------
Net cash provided by
(used for) investing
activities $10,215,400 $(2,610,500) $ 4,121,100 $ (725,200) $ (743,300)
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Net cash (used for)
provided by financing
activities $(9,840,100) $(1,014,100) $(4,649,500) $ (816,800) $1,354,600
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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 General Partner), except depreciation
and amortization expenses and capital expenditures, lease acquisition
expenditures and the General Partner's 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-7
in this report.
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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 on September 25, 1984 and
terminated the Offering on September 24, 1985, upon the sale of 43,861 Units.
From December 1984 to February 1988, the Partnership acquired four real
property interests, including two 50% joint venture interests and one 25% joint
venture interest.
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. Through December 31, 1999, the Partnership has sold
all of its real property investments.
OPERATIONS
COMPARISON OF THE YEAR ENDED DECEMBER 31, 1999 TO THE YEAR ENDED DECEMBER 31,
1998
Net (loss) income changed from $(1,044,300) for the year ended December 31,
1998 to $646,200 for the year ended December 31, 1999. The change was primarily
due to a $2,000,000 provision for value impairment recorded in 1998 on Glendale
Center Shopping Mall ("Glendale"). Exclusive of the provision for value
impairment, net income decreased by $309,500 for the year ended December 31,
1999 when compared to the year ended December 31, 1998. The decrease was
primarily due to the partial absence of operating results on Glendale in 1999
due to its May 1999 sale. The decrease was partially offset by an increase
interest earned on the Partnership's short-term investments, which was due to
an increase in cash available for investment during 1999.
Rental revenues decreased by $2,166,800 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 1999 sale of Glendale.
COMPARISON OF THE YEAR ENDED DECEMBER 31, 1998 TO THE YEAR ENDED DECEMBER 31,
1997
Net income (loss) changed from $1,560,000 for the year ended December 31, 1997
to $(1,044,300) for the year ended December 31, 1998. The change was primarily
due to the gain recorded on the 1997 sale of Regency Park Shopping Center
("Regency") and the 1998 provision for value impairment recorded on Glendale.
Net income, exclusive of Regency and the provision for value impairment,
increased by $212,900 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 due to an increase
in the average cash available for investment during 1998.
The following comparative discussion includes the operating 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, 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.
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 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) annual
rent increases based on the Consumer Price Index or graduated rental
4
<PAGE>
increases; 2) percentage rentals for which the Partnership receives as
additional rent a percentage of a tenant's sales over predetermined amounts and
3) total or partial tenant reimbursement of property operating expenses
including real estate taxes.
LIQUIDITY AND CAPITAL RESOURCES
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. Such amounts 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 diminishment of the amount of Cash Flow (as defined in the Partnership
Agreement) of $376,500 for the year ended December 31, 1999 when compared to
the year ended December 31, 1998 was primarily due to a decrease in operating
results at Glendale, exclusive of gain on sale and depreciation and
amortization. The change was partially offset by an increase in interest income
earned on the Partnership's short-term investments and the effects of reduced
scheduled principal payments on the Partnership's mortgage debt.
The increase in the Partnership's cash position of $856,900 during the year
ended December 31, 1998 was primarily the result of the maturity of a portion
of the 1998 investments in debt securities (see discussion below) partially
offset by amounts that were utilized to fund the special distribution of cash
reserves in November 1999.
The decrease in net cash provided by operating activities of $1,079,700 for the
year ended December 31, 1999 when compared to the year ended December 31, 1998,
was primarily due to the timing of the payment of certain expenses at Glendale.
In connection with the sale of Glendale, the purchaser assumed the obligation
to pay a substantial portion of Glendale's trade liabilities and was provided a
credit from the Partnership. In addition, the decrease was also due to
diminished operating results at Glendale, exclusive of gain on sale and
depreciation and amortization.
Net cash (used for) provided by investing activities changed from $(2,610,500)
for the year ended December 31, 1998 to $10,215,400 for the year ended December
31, 1999. The change was due primarily to the gross proceeds realized from the
1999 sale of Glendale and the net maturity of investments in debt securities
during 1999 as compared to a net investment during 1998.
Investments in debt securities are a result of the continued extension of the
maturities of certain of the Partnership's short-term investments in an effort
to maximize the return on these amounts as they are held for post-closing
matters related to the sales of various Partnership properties. These
investments are of investment grade and mature less than one year from their
date of purchase.
The Partnership has no financial instruments for which there are significant
risks. Due to the timing of the maturities and liquid nature of the
Partnership's investments in debt securities, the Partnership does not believe
that it has material market risk.
On May 21, 1999, the joint venture in which the Partnership owned a 50%
interest consummated the sale of Glendale for a sale price of $15,700,000. The
Partnership's share of 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 $2,899,700 or $66.11 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 property,
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 $1,359,700 or $31.00 per Unit, which
was paid on November 30, 1999 to Limited Partners of record as of May 21, 1999.
Net cash used for financing activities increased by $8,826,000 for the year
ended December 31, 1999 when compared to the year ended December 31, 1998. The
increase was due primarily to the 1999 repayment of the mortgage loan
collateralized by Glendale in connection with its sale. The increase was also
due to the 1999 distribution of Glendale Sale Proceeds and the 1999 special
distribution of cash previously retained as working capital reserves.
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 General Partner has begun the process of wrapping-up the Partnership's
affairs. This process, which is expected to be completed in the second quarter
of 2000, includes resolution of all post-closing property and Partnership
matters together with the expiration of representations and warranties included
in the contract for the sale of Glendale. Following the resolution of post-
closing property matters and the establishment of a reserve for contingencies
and wrap-up expenses, the Partnership will make a liquidating distribution to
Partners and dissolve.
5
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Based upon the current value of its assets, net of its outstanding liabilities,
the Partnership's cumulative distributions to its Limited Partners from
inception through the termination of the Partnership will be substantially less
than such Limited Partners' Original Capital Contribution.
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, Schedules and Exhibits."
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
6
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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 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 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
General Partner from December 1990 to December 1992 and has been a Director of
the 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 had 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 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 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 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
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.
ITEM 11. EXECUTIVE COMPENSATION
(a,b,c & d) As stated in Item 10, the Partnership has no officers or directors.
Neither the General Partner, nor any director or officer of the General
Partner, received any direct remuneration from the Partnership during the year
ended December 31, 1999. However, the General Partner and Affiliates do
compensate certain directors and officers of the 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 43,861
Units outstanding.
7
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(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 General Partner did not own any Units.
(c) None.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(a) An Affiliate of the General Partner provides supervisory and asset
management services to the Partnership. For the year ended December 31,
1999, this Affiliate was entitled to supervisory and asset management fees
and reimbursements of $9,600. In addition, other Affiliates of the General
Partner were entitled to fees, compensation and reimbursements of $36,700
for insurance, personnel, and other miscellaneous services for 1999.
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 the foregoing amounts, a total of $3,300 was due
to Affiliates as of December 31, 1999.
The Partnership owed $10,000 to the 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
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 September 24,
1985, the Termination of the Offering, the General Partner is entitled to
10% of Cash Flow (as defined in the Partnership Agreement), as a Partnership
Management Fee. For the year ended December 31, 1999, in conjunction with
the suspension of distributions of Cash Flow (as defined in the Partnership
Agreement) to Limited Partners, the General Partner was not paid a
Partnership Management Fee.
In accordance with the Partnership Agreement, Net Profits (exclusive of Net
Profits from the sale or disposition of Partnership properties) are
allocated to the General Partner in an amount equal to the greater of 1% of
such Net Profits or the Partnership Management Fee paid by the Partnership
to the General Partner during such year, and the balance, if any, to the
Limited Partners. Net Losses (exclusive of Net Losses from the sale,
disposition and provision for value impairment of Partnership properties)
are allocated 1% to the General Partner and 99% to the Limited Partners. Net
Profits from the sale or disposition of a Partnership property are
allocated: first, prior to giving effect to any distribution of Sale or
Refinancing Proceeds from the transaction, to all 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 Partner in an amount necessary to make the
positive balance in its Capital Account equal to the amount of Sale or
Refinancing Proceeds to be distributed to the General Partner with respect
to the sale or disposition of such property; and third, the balance, if any,
to the Limited Partners. Net Losses from the sale, disposition or provision
for value impairment of Partnership properties are 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 amount of such positive balances; and second, the
balance, if any, 1% to the General Partner and 99% to the Limited Partners.
Notwithstanding anything to the contrary, there shall be allocated to the
General Partner not less than 1% of all items of Partnership income, gain,
loss, deduction and credit during the existence of the Partnership. For the
year ended December 31, 1999, the General Partner was allocated Net Profits
of $6,500.
(b) Rosenberg & Liebentritt, P.C. ("Rosenberg"), served as legal counsel to the
Partnership, the General Partner and certain of their Affiliates. Donald J.
Liebentritt, Vice President of the General Partner, was a Principal and
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 be obtained from unaffiliated persons. Total legal
fees paid to Rosenberg for the year ended December 31, 1999 were $26,200.
(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, Schedules 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.
8
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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 X
BY: FIRST CAPITAL FINANCIAL CORPORATION
GENERAL PARTNER
Dated: March 24, 2000 By: _____________________________________
/s/ DOUGLAS CROCKER II
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 General Partner
/s/ SHELI Z. ROSENBERG March 24, 2000 Director of the 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>
9
<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-7
- ------------------------------------------------------------------------------
</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-32 OF THE PARTNERSHIP'S
DEFINITIVE PROSPECTUS DATED SEPTEMBER 25, 1984; REGISTRATION STATEMENT NO. 2-
92364, 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.
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 X
Chicago, Illinois
We have audited the accompanying balance sheets of First Capital Income
Properties, Ltd.-Series X 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 X 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> <C>
ASSETS
Investment in commercial rental property:
Land $ $ 2,887,600
Buildings and improvements 12,019,600
- -----------------------------------------------------------------------------
14,907,200
Accumulated depreciation and amortization (7,141,300)
- -----------------------------------------------------------------------------
Total investment property, net of accumulated
depreciation and amortization 7,765,900
Cash and cash equivalents 1,635,700 778,800
Investments in debt securities 1,240,600 3,495,000
Rents receivable 159,600
Escrow deposits 197,200
Other assets (primarily loan acquisition costs,
net of accumulated amortization of $0 and
$154,900, respectively) 41,600
- -----------------------------------------------------------------------------
$2,876,300 $12,438,100
- -----------------------------------------------------------------------------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Mortgage loan payable $ $ 5,570,800
Accounts payable and accrued expenses 54,200 465,400
Due to Affiliates, net 3,300 11,600
Security deposits 10,000
Prepaid rent 62,700
Earnest money deposit 50,000
Other liabilities 389,700 225,400
- -----------------------------------------------------------------------------
447,200 6,395,900
- -----------------------------------------------------------------------------
Partners' capital:
General Partner (deficit) (84,300) (90,800)
Limited Partners (43,861 Units issued and
outstanding) 2,513,400 6,133,000
- -----------------------------------------------------------------------------
2,429,100 6,042,200
- -----------------------------------------------------------------------------
$2,876,300 $12,438,100
- -----------------------------------------------------------------------------
</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
Partner Partners Total
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
Partners' (deficit) capital, January 1,
1997 $ (96,000) $5,622,500 $5,526,500
Net income for the year ended December 31,
1997 15,600 1,544,400 1,560,000
- ------------------------------------------------------------------------------
Partners' (deficit) capital, December 31,
1997 (80,400) 7,166,900 7,086,500
Net (loss) for the year ended December 31,
1998 (10,400) (1,033,900) (1,044,300)
- ------------------------------------------------------------------------------
Partners' (deficit) capital, December 31,
1998 (90,800) 6,133,000 6,042,200
Net income for the year ended December 31,
1999 6,500 639,700 646,200
Distributions for the
year ended December 31, 1999 (4,259,300) (4,259,300)
- ------------------------------------------------------------------------------
Partners' (deficit) capital, December 31,
1999 $ (84,300) $2,513,400 $2,429,100
- ------------------------------------------------------------------------------
</TABLE>
A-3
The accompanying notes are an integral part of the financial statements
<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 $1,148,600 $ 3,315,400 $3,754,900
Interest 276,800 233,100 177,500
Gain on sale of property 31,600 799,400
Other 10,000
- --------------------------------------------------------------------------
1,467,000 3,548,500 4,731,800
- --------------------------------------------------------------------------
Expenses:
Interest 191,200 616,500 888,100
Depreciation and amortization 11,600 363,500 490,700
Property operating:
Affiliates 8,900 34,900 60,500
Nonaffiliates 291,100 866,100 978,000
Real estate taxes 97,900 336,200 278,900
Insurance--Affiliate 20,400 50,100 51,100
Repairs and maintenance 103,000 220,900 329,900
General and administrative:
Affiliates 22,000 13,200 12,300
Nonaffiliates 74,700 91,400 82,300
Provision for value impairment 2,000,000
- --------------------------------------------------------------------------
820,800 4,592,800 3,171,800
- --------------------------------------------------------------------------
Net income (loss) $ 646,200 $(1,044,300) $1,560,000
- --------------------------------------------------------------------------
Net income (loss) allocated to General
Partner $ 6,500 $ (10,400) $ 15,600
- --------------------------------------------------------------------------
Net income (loss) allocated to Limited
Partners $ 639,700 $(1,033,900) $1,544,400
- --------------------------------------------------------------------------
Net income (loss) allocated to Limited
Partners per Unit (43,861 Units
outstanding) $ 14.58 $ (23.57) $ 35.21
- --------------------------------------------------------------------------
</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 (loss) $ 646,200 $(1,044,300) $ 1,560,000
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation and amortization 11,600 363,500 490,700
Gain on sale of property (31,600) (799,400)
Provision for value impairment 2,000,000
Changes in assets and liabilities:
Decrease in rents receivable 159,600 137,800 138,600
Decrease (increase) in other assets 13,700 (13,700) (500)
(Decrease) increase in accounts
payable and accrued expenses (411,200) 27,200 (131,600)
(Decrease) increase in due to
Affiliates (8,300) 3,500 (25,100)
(Decrease) increase in prepaid rent (62,700) 42,300 (16,000)
Increase in other liabilities 164,300 45,000 228,100
- -------------------------------------------------------------------------------
Net cash provided by operating
activities 481,600 1,561,300 1,444,800
- -------------------------------------------------------------------------------
Cash flows from investing activities:
Payments for building and tenant
improvements (700)
Proceeds from sale of property 7,813,800 4,687,600
Decrease (increase) in investments in
debt securities 2,254,400 (2,513,000) (485,700)
(Reduction) of earnest money deposit (50,000)
Decrease (increase) in escrow deposits 197,200 (96,800) (80,800)
- -------------------------------------------------------------------------------
Net cash provided by (used for)
investing activities 10,215,400 (2,610,500) 4,121,100
- -------------------------------------------------------------------------------
Cash flows from financing activities:
Repayment of mortgage loan payable (4,898,400) (3,819,800)
Principal payments on mortgage loans
payable (672,400) (988,900) (814,600)
Payment of loan extension costs (27,800)
Distributions paid to Partners (4,259,300)
(Decrease) increase in security
deposits (10,000) 2,600 (15,100)
- -------------------------------------------------------------------------------
Net cash (used for) financing
activities (9,840,100) (1,014,100) (4,649,500)
- -------------------------------------------------------------------------------
Net increase (decrease) in cash and
cash equivalents 856,900 (2,063,300) 916,400
Cash and cash equivalents at the
beginning of the year 778,800 2,842,100 1,925,700
- -------------------------------------------------------------------------------
Cash and cash equivalents at the end of
the year $ 1,635,700 $ 778,800 $ 2,842,100
- -------------------------------------------------------------------------------
Supplemental information:
Interest paid during the year $ 191,200 $ 616,500 $ 912,200
- -------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements
A-4
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
1. ORGANIZATION AND 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 incorporated herein by reference.
ORGANIZATION:
The Partnership was formed on May 31, 1984, 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 September 25, 1984. The
Certificate and Agreement, as amended and restated, authorized the sale to the
public of 50,000 Units and not less than 1,400 Units. On October 23, 1984, the
required minimum subscription level was reached and the Partnership's
operations commenced. In September, 1985, the Offering was Terminated upon the
sale of 43,861 Units. 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 related 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 until its 1999 dissolution, the Partnership's
50% interest in one joint venture and until its dissolution in 1997, its 25%
interest in another joint venture with Affiliated partnerships. These joint
ventures were formed for the purpose of each acquiring a 100% interest in
certain real property and were operated under the common control of the General
Partner. Accordingly, the Partnership's pro rata share of the 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
individual tax returns; therefore, no provision for federal income taxes is
made in the financial statements of the Partnership. In addition, it is not
practicable 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 property is recorded at cost, net of any provisions for value
impairment, and depreciated (exclusive of amounts allocated to land) on the
straight-line method over their estimated useful lives. Upon classifying a
commercial rental property as held for disposition, no further depreciation or
amortization of such property is provided for in the financial statements.
Lease acquisition fees are recorded at cost and amortized on the straight-line
method over the life of each respective lease. Repair and maintenance costs are
expensed as incurred; expenditures for improvements are capitalized and
depreciated on the straight-line method over the estimated life of such
improvements.
The Partnership evaluates its rental property for impairment when conditions
exist which may indicate that it is probable that the sum of expected future
cash flows (undiscounted) from a property is less than its estimated carrying
basis. Upon determination that an impairment has occurred, the basis in the
rental property is reduced to fair value. 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 note issued under 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
refinanced, the related loan acquisition costs and accumulated amortization are
removed from the respective accounts and any unamortized balance is expensed.
Property sales are recorded when title transfers and sufficient consideration
has been received by the Partnership. Upon disposition, the related costs and
accumulated depreciation and amortization are removed from the respective
accounts. Any gain or loss is recognized in accordance with GAAP.
A-5
<PAGE>
Cash equivalents are considered all highly liquid investments with a maturity
of three months or less when purchased.
Investments in debt securities are 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 a maturity of less
than one year when purchased.
Certain reclassifications have been made to the previously reported 1998 and
1997 statements in order to provide comparability with the 1999 statements.
These reclassifications have no effect on net income or Partners' (deficit)
capital.
The Partnership's financial statements include financial instruments, including
receivables, escrow deposits, mortgage debt and trade liabilities. 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 values of all other
financial instruments including cash and cash equivalents, included in the
financial statements, was not materially different from their carrying values
at December 31, 1999 and 1998.
2. RELATED PARTY TRANSACTIONS:
In accordance with the Partnership Agreement, subsequent to September 24, 1985,
the Termination of the Offering, the General Partner is entitled to 10% of Cash
Flow (as defined in the Partnership Agreement), as a Partnership Management
Fee. For the year ended December 31, 1999, in conjunction with the suspension
of distributions of Cash Flow (as defined in the Partnership Agreement) to
Limited Partners, the General Partner was not paid a Partnership Management
Fee.
In accordance with the Partnership Agreement, Net Profits (exclusive of Net
Profits from the sale or disposition of Partnership properties) are allocated
to the General Partner in an amount equal to the greater of 1% of such Net
Profits or the Partnership Management Fee paid by the Partnership to the
General Partner during such year, and the balance, if any, to the Limited
Partners. Net Losses (exclusive of Net Losses from the sale, disposition and
provision for value impairment of Partnership properties) are allocated 1% to
the General Partner and 99% to the Limited Partners. Net Profits from the sale
or disposition of a Partnership property are allocated: first, prior to giving
effect to any distribution of Sale or Refinancing Proceeds from the
transaction, to all 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 Partner in an
amount necessary to make the positive balance in its Capital Account equal to
the amount of Sale or Refinancing Proceeds to be distributed to the General
Partner with respect to the sale or disposition of such property; and third,
the balance, if any, to the Limited Partners. Net Losses from the sale,
disposition or provisions for value impairment of Partnership properties are
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 amount of such positive balances;
and second, the balance, if any, 1% to the General Partner and 99% to the
Limited Partners. Notwithstanding anything to the contrary, there shall be
allocated to the General Partner not less than 1% of all items of Partnership
income, gain, loss, deduction and credit during the existence of the
Partnership. For the year ended December 31, 1999, the General Partner was
allocated net profits of $6,500, which included $300 of a net gain on the sale
of Glendale. For the year ended December 31, 1998 the General Partner was
allocated a net (loss) of $(10,400) which included a (loss) from a provision
for value impairment of $(20,000). For the year ended December 31, 1997, the
General Partner was allocated net profits of $15,600, which included $8,000 of
a net profit from the sale of Regency.
Fees and reimbursements paid and payable by the Partnership to Affiliates were
as follows:
<TABLE>
<CAPTION>
For the years ended December 31,
-------------------------------------------------
1999 1998 1997
--------------- ---------------- ----------------
Paid Payable Paid Payable Paid Payable
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Real estate commission (a) None None None $10,000 None $10,000
Property management and
leasing fees $ 9,600 None $ 19,800 None $ 55,500 (2,400)
Reimbursements of property
insurance premiums 20,400 None 50,100 None 51,100 None
Legal 26,200 None 25,400 None 35,200 None
Reimbursements of
expenses, at cost
--Accounting 8,500 $2,300 7,000 1,100 9,000 400
--Investor communication 6,100 1,000 3,500 500 3,400 100
- ------------------------------------------------------------------------------
$70,800 $3,300 $105,800 $11,600 $154,200 $ 8,100
- ------------------------------------------------------------------------------
</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 $10,000 to the General Partner for a real estate
commission earned in connection with the sale of a Partnership property.
This commission was accrued but not paid. In accordance with the
Partnership Agreement, the Partnership shall not pay the General Partner or
any Affiliate a real estate commission from the sale of a Partnership
property until 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 (as defined
in the Partnership Agreement) which has been distributed to the Limited
Partners from the initial investment date) 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.
A-6
<PAGE>
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 and the
Partnership's provisions for value impairment. For the years ended December 31,
1999, 1998 and 1997 net (loss) income for income tax reporting purposes was
$(3,589,200), $277,600 and $(2,252,100), 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 $2,899,700 or $66.11 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 in the amount of $1,359,700 or $31.00 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 of $2,000,000 to reduce the carrying
basis in Glendale to equal the contract price less estimated selling expenses.
In addition, following the Partnership's classification of Glendale as "Held
for Disposition" (October 1, 1998) the Partnership stopped recording
depreciation on Glendale.
On June 16, 1997, the joint venture in which the Partnership owned a 25%
interest, completed the sale of Regency Park Shopping Center, located in
Jacksonville, Florida, for a sale price of $19,325,000, of which the
Partnership's share was $4,831,300. The Partnership's share of net proceeds
from this transaction was $867,800, which is net of closing expenses and the
repayment of the mortgage loan encumbering the property. The net proceeds have
been retained by the Partnership to supplement working capital reserves. The
Partnership recorded a gain of $799,400 for the year ended December 31, 1997
for financial reporting purposes from this sale.
A-7
<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> 1,635,700
<SECURITIES> 1,240,600
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,876,300
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,876,300
<CURRENT-LIABILITIES> 57,500
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,429,100
<TOTAL-LIABILITY-AND-EQUITY> 2,876,300
<SALES> 0
<TOTAL-REVENUES> 1,467,000
<CGS> 0
<TOTAL-COSTS> 521,300
<OTHER-EXPENSES> 96,700
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 191,200
<INCOME-PRETAX> 646,200
<INCOME-TAX> 0
<INCOME-CONTINUING> 646,200
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 646,200
<EPS-BASIC> 14.58
<EPS-DILUTED> 14.58
</TABLE>
