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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
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FORM 10-Q
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[X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE PERIOD ENDED MARCH 31, 2000
OR
[_]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 0-16888
FIRST CAPITAL INCOME AND GROWTH FUND--SERIES XII
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
ILLINOIS 36-3498223
(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)
(312) 207-0020
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
NOT APPLICABLE
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST
REPORT)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [_]
DOCUMENTS INCORPORATED BY REFERENCE:
The First Amended and Restated Certificate and Agreement of Limited Partnership
filed as Exhibit A to the Partnership's Prospectus dated May 8, 1987, included
in the Partnership's Registration Statement on Form S-11, is incorporated
herein by reference in Part I of this report.
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BALANCE SHEETS
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
March 31,
2000 December 31,
(Unaudited) 1999
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<S> <C> <C>
ASSETS
Cash and cash equivalents $10,968,200 $26,804,700
Investments in debt securities 1,928,300
Escrow deposits 3,400 6,600
Due from Affiliates 200
Other assets 16,600 3,700
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$10,988,400 $28,743,300
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LIABILITIES AND PARTNERS' (DEFICIT)
Liabilities:
Front-End Fees Loan payable to Affiliate $13,434,400 $13,434,400
Accounts payable and accrued expenses 52,000 104,600
Distribution payable 17,999,500
Due to Affiliates 3,900
Other liabilities 104,600 104,600
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13,591,000 31,647,000
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Partners' (deficit)
General Partner (deficit) (2,602,600) (2,903,700)
Limited Partners (1,000,000 Units issued, 949,843
Units outstanding) --
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(2,602,600) (2,903,700)
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$10,988,400 $28,743,300
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</TABLE>
STATEMENTS OF PARTNERS' CAPITAL
For the quarter ended March 31, 2000 (Unaudited) and the year ended December
31, 1999
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
General Limited
Partner Partners Total
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<S> <C> <C> <C>
Partners' (deficit) capital,
January 1, 1999 $(1,146,000) $ 8,474,200 $ 7,328,200
Net (loss) income for the year ended
December 31, 1999 (1,757,700) 15,699,300 13,941,600
Distributions for the year ended
December 31, 1999 (24,173,500) (24,173,500)
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Partners' (deficit) capital,
December 31, 1999 (2,903,700) -- (2,903,700)
Net income for the quarter ended
March 31, 2000 301,100 -- 301,100
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Partners' (deficit) capital,
March 31, 2000 $(2,602,600) -- $ (2,602,600)
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</TABLE>
The accompanying notes are an integral part of the financial statements
2
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STATEMENTS OF INCOME AND EXPENSES
For the quarters ended March 31, 2000 and 1999
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)
<TABLE>
<CAPTION>
2000 1999
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<S> <C> <C>
Income:
Rental $ (2,000) $1,510,100
Interest 308,900 114,700
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306,900 1,624,800
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Expenses:
Interest:
Affiliates 234,700
Nonaffiliates 398,500
Depreciation and amortization 253,700
Property operating:
Affiliates 300 19,600
Nonaffiliates (16,700) 164,600
Real estate taxes 265,500
Insurance--Affiliate (1,100) 12,400
Repairs and maintenance 109,900
General and administrative:
Affiliates 2,900 21,300
Nonaffiliates 20,400 20,200
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22,400 1,500,400
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Net income $301,100 $ 124,400
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Net income allocated to General Partner $301,100 $ 1,200
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Net income allocated to Limited Partners $ -- $ 123,200
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Net income allocated to Limited Partners per Unit
(949,843 Units outstanding) $ -- $ 0.13
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</TABLE>
STATEMENTS OF CASH FLOWS
For the quarters ended March 31, 2000 and 1999
(Unaudited)
(All dollars rounded to nearest 00s)
<TABLE>
<CAPTION>
2000 1999
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<S> <C> <C>
Cash flows from operating activities:
Net income $ 301,100 $ 124,400
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 253,700
Changes in assets and liabilities:
Decrease in rents receivable 317,300
(Increase) decrease in other assets (12,900) 16,700
(Increase) in due from Affiliates (4,100) (20,200)
(Decrease) increase in accounts payable and accrued
expenses (52,600) 97,800
(Decrease) in other liabilities (118,700)
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Net cash provided by operating activities 231,500 671,000
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Cash flows from investing activities:
Payments for capital and tenant improvements (8,800)
Decrease (increase) in investments in debt
securities, net 1,928,300 (3,684,500)
Decrease (increase) in escrow deposits 3,200 (199,800)
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Net cash provided by (used for) investing
activities 1,931,500 (3,893,100)
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Cash flows from financing activities:
Distributions to Partners (17,999,500)
Principal payments on mortgage loans payable (156,000)
(Decrease) in security deposits (400)
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Net cash (used for) financing activities (17,999,500) (156,400)
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Net (decrease) in cash and cash equivalents (15,836,500) (3,378,500)
Cash and cash equivalents at the beginning of the
period 26,804,700 9,704,900
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Cash and cash equivalents at the end of the period $ 10,968,200 $ 6,326,400
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Supplemental information:
Interest paid to nonaffiliates during the period $ -- $ 403,400
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Interest paid to Affiliates during the period $ -- $ 234,700
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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, 2000
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
DEFINITION OF SPECIAL TERMS:
Capitalized terms used in this report have the same meaning as those terms have
in the Partnership's Registration Statement filed with the Securities and
Exchange Commission on Form S-11. Definitions of these terms are contained in
Article III of the First Amended and Restated Agreement of Limited Partnership,
which is included in the Registration Statement and incorporated herein by
reference.
ACCOUNTING POLICIES:
The Partnership sold its remaining properties during 1999. The Partnership is
in the process of resolving post closing matters related to the sold
properties, which include reprorations, adjustments, as well as, expiration of
representations and warranties made to the purchasers of the properties sold
during 1999. Upon completion of this process, together with the resolution of
other pending matters, the Partnership will make a liquidating distribution to
Partners and dissolve.
The financial statements have been prepared in accordance with accounting
principles generally accepted in the United States ("GAAP"). The Partnership
utilizes the accrual method of accounting. Under this method, revenues are
recorded when earned and expenses are recorded when incurred. The Partnership
recognizes rental income that is contingent upon tenants' achieving specified
targets only to the extent that such targets are achieved.
Preparation of the Partnership's financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
The financial information included in these financial statements is unaudited;
however, in management's opinion, all adjustments (consisting of only normal,
recurring accruals) necessary for a fair presentation of the results of
operations for the periods included have been made. Results of operations for
the three months ended March 31, 2000, are not necessarily indicative of the
operating results for the year ending December 31, 2000.
The financial statements include the Partnership's 50% interest in a joint
venture with an Affiliated Partnership, which was formed for the purpose of
acquiring a 100% interest in certain real property. This joint venture was,
until its property was sold in July 1999, operated under the common control of
the General Partner. Accordingly, the Partnership's pro rata share of the joint
ventures' revenues, expenses, assets, liabilities and Partners' capital
(deficit) is included in the financial statements.
The Partnership has one reportable segment as the Partnership is in the
disposition phase of its life cycle, wherein it is seeking to resolve post-
closing property sale matters.
Cash equivalents are considered all highly liquid investments with a maturity
of three months or less when purchased.
Reference is made to the Partnership's annual report for the year ended
December 31, 1999, for a description of other accounting policies and
additional details of the Partnership's financial condition, results of
operations, changes in Partners' capital and changes in cash balances for the
year then ended. The details provided in the notes thereto have not changed
except as a result of normal transactions in the interim or as otherwise
disclosed herein.
2. RELATED PARTY TRANSACTIONS:
In accordance with the Partnership Agreement, as compensation for services
rendered in managing the affairs of the Partnership, the General Partner shall
be entitled to receive subsequent to November 22, 1988, the Termination of the
Offering, a Portfolio Management Fee, payable quarterly, which shall be an
amount equal to the lesser of (i) 0.5% of the gross value of the Partnership's
assets (not reduced by indebtedness collateralized by such assets), all as
estimated by the General Partner in its reasonable discretion, plus, to the
extent the Portfolio Management Fee paid in any prior year was less than 0.5%
of the gross value of the Partnership's assets in such prior year, the amount
of such deficit, or (ii) an amount equal to the remainder obtained by
subtracting the aggregate amount previously paid to the General Partner as
Portfolio Management Fees during such fiscal year, from an amount equal to 10%
of the Partnership's aggregate Cash Flow (as defined in the Partnership
Agreement) (computed prior to the deduction for Portfolio Management Fees) for
such fiscal year. For the three months ended March 31, 2000 and 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 Portfolio Management Fee.
In accordance with the Partnership Agreement, Net Profits and Net Losses
(exclusive of Net Profits and Net Losses from a Major Capital Event) are
allocated 1% to the General Partner and 99% to the Limited Partners as a group.
Net Losses from a Major Capital Event are allocated: first, prior to giving
effect to any distributions of Sale or Refinancing Proceeds from the
transaction, to the General Partner and Limited Partners with positive balances
in their Capital Accounts, in proportion to and to the extent of such positive
balances; and second, the balance, if any, 1% to the General Partner and 99% to
the Limited Partners as a group. Net Profits from a Major Capital Event are
allocated: first, prior to giving effect to any distributions of Sale or
Refinancing Proceeds from the transaction, Net Profit in the amount of the
Minimum Gain (as defined in the Partnership Agreement) attributable to the
property that is the subject of such Major Capital Event is allocated to the
General Partner and Limited Partners with negative balances in their Capital
Accounts, pro rata in proportion to such respective negative balances; second,
to the General Partner and each Limited Partner in proportion to and to the
extent of such amounts, if any, equal to the amount of Sale or Refinancing
Proceeds to be distributed to each such General Partner or Limited Partner with
respect to such Major Capital Event; and third, the balance, if any, 20% to the
General Partner and 80% to the Limited Partners as a group. 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 three months ended
March 31, 2000, the General Partner was allocated 100% of Net Profits of
$284,500, which was not in accordance with the Partnership Agreement. As
Limited Partners are not personally liable for liabilities of the Partnership,
no amounts will be allocated until such time as the cumulative computation of
Limited Partners' capital account would result in a positive balance. For
additional information, refer to Note 2 of Notes to Financial Statements in the
Partnership's annual report on Form 10-K for the year ended December 31, 1999.
For the three months ended March 31, 1999, the General Partner was allocated
Net Profits of $1,200.
Fees and reimbursements paid and payable by the Partnership to Affiliates
during the three months ended March 31, 2000 were as follows:
<TABLE>
<CAPTION>
Payable
Paid (Receivabie)
- ------------------------------------------------------------
<S> <C> <C>
Asset management fees $ 300 $(400)
Refund of property insurance premiums (1,100) None
Reimbursement of expenses, at cost:
--Accounting 3,800 None
--Investor communication 3,200 200
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$ 6,200 $(200)
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</TABLE>
3. FRONT-END FEES LOAN PAYABLE TO AFFILIATE:
The Partnership borrowed $13,434,400, the full amount available pursuant to the
loan's terms, from an Affiliate of the General Partner, an amount needed for
the payment of securities sales commissions, Offering and Organizational
Expenses and other Front-End Fees, other than Acquisition Fees. Repayment of
the principal amount of the Front-End Fees Loan is subordinated (the
"Subordination") to payment to the Limited Partners of 100% of their Original
Capital Contribution from Sale or Refinancing Proceeds (as defined in the
Partnership Agreement). Interest on the outstanding balance of this loan was
due and payable monthly at a rate no greater than the cost of funds obtained by
the Affiliate from unaffiliated lenders. Effective following the May 1999
payment of interest on this loan, the Affiliate of the General Partner waived
further collection of interest on this loan. In the event that the Front-End
Fees loan is not repaid, such amount will be written off to Partners' Capital.
4. DISTRIBUTION TO LIMITED PARTNERS:
On February 29, 2000, the Partnership distributed $17,999,500 or $18.95 per
Unit to Limited Partners of record as of November 12, 1999. The cash proceeds
utilized for this were generated from the November 12, 1999 sale of Deerfield
Mall.
4
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Reference is made to the Partnership's annual report for the year ended
December 31, 1999 for a discussion of the Partnership's business.
Statements contained in this Management's Discussion and Analysis of Financial
Condition and Results of Operations, which are not historical facts, may be
forward-looking statements. Such statements are subject to certain risks and
uncertainties, which could cause actual results to differ materially from those
projected. Readers are cautioned not to place undue reliance on these forward-
looking statements, which speak only as of the date hereof.
The Partnership has substantially completed the disposition phase of its life
cycle. The Partnership has sold its remaining real property investments and is
working toward resolution of post closing property sale matters.
OPERATIONS
Net income for the Partnership increased by $176,700 for the three months ended
March 31, 2000 when compared to the three months ended March 31, 1999. The
increase was primarily due to an increase in interest earned on the
Partnership's short-term investments, which was due to an increase in cash
available for investment. The increase was partially offset by the absence of
results in 2000 from properties sold during 1999.
LIQUIDITY AND CAPITAL RESOURCES
The decrease in the Partnership's cash position of $15,836,500 for the three
months ended March 31, 2000 was primarily the result of the February 29, 2000
distribution of Deerfield Mall Sale Proceeds. The decrease was partially offset
by the maturity of the Partnership's investments in debt securities. Liquid
assets (including cash and cash equivalents) of the Partnership as of March 31,
2000 were comprised of amounts held for post property sale matters and
Partnership liquidation expenses.
Net cash provided by operating activities decreased by $439,500 for the three
months ended March 31, 2000 when compared to the three months ended March 31,
1999. The decrease was primarily the result of the absence of results,
exclusive of depreciation and amortization, in 2000 from properties sold during
1999. The decrease was partially offset by an increase in interest earned on
the Partnership's short-term investments.
Net cash (used for) provided by investing activities changed from $(3,893,100)
for the three months ended March 31, 1999 to $1,931,500 for the three months
ended March 31, 2000. The change was primarily due to the 2000 maturity of the
Partnership's investments in debt securities, which contrasted with the net
investment in debt securities during the comparable 1999 period.
The Partnership has no financial instruments for which there are significant
market risks.
Net cash used for financing activities increased by $17,843,100 for the three
months ended March 31, 2000 when compared to the three months ended March 31,
1999. The increase was primarily due to the February 29, 2000 distribution of
Deerfield Mall Sale Proceeds.
The General Partner has begun the process of wrapping-up the Partnership's
affairs. This process, which is expected to be completed in the fourth quarter
of 2000, includes resolution of all post-closing property and Partnership
matters, together with the expiration of representations and warranties
included in the contracts for the sales of Prentice Plaza and Deerfield Mall.
Following the resolution of these matters and the establishment of a reserve
for contingencies and wrap-up expenses, the Partnership will make a liquidating
distribution to Partners and dissolve.
Based upon the current fair 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.
5
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
(a) Exhibits: None
(b) Reports on Form 8-K:
There were no reports filed on Form 8-K for the three months ended March 31,
2000.
6
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
FIRST CAPITAL INCOME AND GROWTH FUND--
SERIES XII
By: FIRST CAPITAL FINANCIAL CORPORATION
GENERAL PARTNER
Date: May 12, 2000 /s/ DOUGLAS CROCKER II
By: ______________________________________
DOUGLAS CROCKER II
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Date: May 12, 2000 /s/ NORMAN M. FIELD
By: ______________________________________
NORMAN M. FIELD
VICE PRESIDENT--FINANCE AND TREASURER
7
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 10,968,200
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 10,971,800
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 10,971,800
<CURRENT-LIABILITIES> 52,000
<BONDS> 13,434,400
0
0
<COMMON> 0
<OTHER-SE> (2,619,200)
<TOTAL-LIABILITY-AND-EQUITY> 10,971,800
<SALES> 0
<TOTAL-REVENUES> 306,900
<CGS> 0
<TOTAL-COSTS> (900)
<OTHER-EXPENSES> 23,300
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 284,500
<INCOME-TAX> 0
<INCOME-CONTINUING> 284,500
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 284,500
<EPS-BASIC> 0.00
<EPS-DILUTED> 0.00
</TABLE>
