10-Q 1 d10q.txt FORM 10-Q -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 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 JUNE 30, 2001 OR [_]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NUMBER 0-12946 FIRST CAPITAL INCOME PROPERTIES, LTD.--SERIES IX (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) FLORIDA 59-2255857 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) TWO NORTH RIVERSIDE PLAZA, 60606-2607 SUITE 600, (ZIP CODE) CHICAGO, ILLINOIS (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (312) 207-0020 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) NOT APPLICABLE (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST REPORT) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [_] DOCUMENTS INCORPORATED BY REFERENCE: The First Amended and Restated Certificate and Agreement of Limited Partnership filed as Exhibit A to the Partnership's Prospectus dated May 24, 1983, included in the Partnership's Registration Statement on Form S-11, is incorporated herein by reference in Part I of this report. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- BALANCE SHEETS (All dollars rounded to nearest 00s)

STATEMENTS OF PARTNERS' CAPITAL For the six months ended June 30, 2001 (Unaudited) and the year ended December 31, 2000 (All dollars rounded to nearest 00s)

3 The accompanying notes are an integral part of the financial statements STATEMENTS OF INCOME AND EXPENSES For the quarters ended June 30, 2001 and 2000 (Unaudited) (All dollars rounded to nearest 00s except per Unit amounts)

STATEMENTS OF INCOME AND EXPENSES For the six months ended June 30, 2001 and 2000 (Unaudited) (All dollars rounded to nearest 00s except per Unit amounts)

STATEMENTS OF CASH FLOWS For the six months ended June 30, 2001 and 2000 (Unaudited) (All dollars rounded to nearest 00s)

The accompanying notes are an integral part of the financial statements 4 NOTES TO FINANCIAL STATEMENTS (Unaudited) June 30, 2001 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: DEFINITION OF SPECIAL TERMS: Capitalized terms used in this report have the same meaning as those terms have in the Partnership's Registration Statement filed with the Securities and Exchange Commission on Form S-11. Definitions of these terms are contained in Article III of the First Amended and Restated Certificate and Agreement of Limited Partnership, which is included in the Registration Statement and incorporated herein by reference. ACCOUNTING POLICIES: The Partnership 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. 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. Preparation of the Partnership's financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The financial information included in these financial statements is unaudited; however, in management's opinion, all adjustments (consisting of only normal, recurring accruals) necessary for a fair presentation of the results of operations for the periods included have been made. Results of operations for the quarter and six months ended June 30, 2001 are not necessarily indicative of the operating results for the year ending December 31, 2001. The Partnership has one reportable segment as the Partnership is in the disposition phase of its life cycle, wherein it is seeking to resolve post- closing matters related to the properties sold by the Partnership. Cash equivalents are considered all highly liquid investments with maturity of three months or less when purchased. Reference is made to the Partnership's Annual Report for the year ended December 31, 2000 for a description of other accounting policies and additional details of the Partnership's financial condition, results of operations, changes in Partners' capital and changes in cash balances for the year then ended. The details provided in the notes thereto have not changed except as a result of normal transactions in the interim or as otherwise disclosed herein. 2. RELATED PARTY TRANSACTIONS: In accordance with the Partnership Agreement, subsequent to October 31, 1983, the Termination of the Offering, the General Partners are entitled to 10% of Cash Flow (as defined in the Partnership Agreement), as a Partnership Management Fee. Net Profits (exclusive of Net Profits from the sale or disposition of Partnership properties) are allocated: first, to the General Partners, in an amount equal to the greater of: (A) the General Partners' Partnership Management Fee for such fiscal year; or (B) 1% of such Net Profits; and second, the balance, if any, to the Limited Partners. Net Profits from the sale or disposition of a Partnership property are allocated: first, to the General Partners and the Limited Partners with negative balances in their capital accounts, pro rata in proportion to such respective negative balances, to the extent of the total of such negative balances; second, to the General Partners, in an amount necessary to make the aggregate amount of their capital accounts equal to the greater of: (A) the Sale or Refinancing Proceeds to be distributed to the General Partners with respect to the sale or disposition for such property; or (B) 1% of such Net Profits; and third, the balance, if any, to the Limited Partners. Net Losses (exclusive of Net Losses from the sale, disposition or provision for value impairment of Partnership properties) are allocated 1% to the General Partners and 99% to the Limited Partners. Net Losses from the sale, disposition or provision for value impairment of Partnership properties are allocated: first, to the General Partners to the extent of the aggregate balance in their capital accounts; second, to the Limited Partners and among them (in the ratio which their respective capital account balances bear to the aggregate of all capital account balances of the Limited Partners) until the balance in their capital accounts shall be reduced to zero; third, the balance, if any, 99% to the Limited Partners and 1% to the General Partners. In all events there shall be allocated to the General Partners not less than 1% of Net Profits and Net Losses from the sale, disposition or provision for value impairment of a Partnership property. For the quarter and six months ended June 30, 2001, the General Partners were not paid a Partnership Management Fee and were allocated Net Profits of $0 and $100, respectively. For the quarter and six months ended June 30, 2000, the General Partners were not paid a Partnership Management Fee, and were allocated Net Profits from operations, of $200 and $300, respectively. Fees and reimbursement paid and payable by the Partnership to Affiliates during the quarter and six months ended June 30, 2001 were as follows:

3. REAL ESTATE TAX APPEAL: The Partnership is a party to appeals of the real estate taxes of the Fashion Atrium Building for fiscal years 1992 and 1993. During these periods, the Partnership owned a 50% interest in the joint venture that owned the Fashion Atrium Building. There can be no assurance as to the amount that will be realized or the timing of such realization from these appeals. 5 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, 2000 for a discussion of the Partnership's business. Statements contained in this Management's Discussion and Analysis of Financial Condition and Results of Operations, which are not historical facts, may be forward-looking statements. Such statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from those projected. Readers are cautioned not to place undue reliance on these forward- looking statements, which speak only as of the date hereof. The Partnership has substantially completed the disposition phase of its life cycle. The Partnership has sold its remaining real property investments and is working toward resolution of post closing property sale matters. OPERATIONS Net income decreased by $14,500 and $12,600 for the quarter and six months ended June 30, 2001 when compared to the quarter and six months ended June 30, 2000. The decreases were primarily due to the decrease in interest earned on the Partnership's short-term investments, which was due to a decrease in interest rates earned on those investments. LIQUIDITY AND CAPITAL RESOURCES The increase of $255,000 in the Partnership's cash position for the six months ended June 30, 2001 was primarily the result of the settlement of a real estate tax appeal at Glendale Center Shopping Mall. Liquid assets (including cash and cash equivalents) as of June 30, 2001 were comprised of amounts held for post property sale matters and Partnership liquidation expenses. The increase in net cash provided by operating activities of $194,200 for the six months ended June 30, 2001 when compared to the six months ended June 30, 2000 was primarily due to the receipt of the proceeds from the settlement of the real estate tax appeal at Glendale Center Shopping Mall. The increase was partially offset by the decrease in net income, as previously discussed. The Partnership has no financial instruments for which there are significant market risks. Net cash used for financing activities decreased by $166,700 for the six-months ended June 30, 2001 when compared to the six-months ended June 30, 2000. The decrease was due to the suspension of distributions to Partners following the February 29, 2000 distribution. No further distributions will be made to Partners until the dissolution of the Partnership. The Partnership is a party to an appeal of the real estate taxes of the Fashion Atrium Building for fiscal years 1992 and 1993. During these periods the Partnership owned a 50% interest in the joint venture that owned the Fashion Atrium Building. There can be no assurance as to the amount that will be realized or the timing of such realization. The Managing General Partner is in the process of wrapping-up the Partnership's affairs. This process includes resolution of all post-closing property and Partnership matters, including the real estate tax appeal referred to above. Following the resolution of post-closing property matters and the establishment of a reserve for contingencies and wrap-up expenses, the Managing General Partner will make a liquidating distribution to Partners. In line with reduced Cash Flow (as defined in the Partnership Agreement) following the sale of its remaining property, distributions to Partners have been suspended until such time as the liquidating distribution is paid. 2 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K: (a) Exhibits: None (b) Reports on Form 8-K: There were no reports filed on Form 8-K for the quarter ended June 30, 2001. 6 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED. FIRST CAPITAL INCOME PROPERTIES, LTD.-- SERIES IX By: FIRST CAPITAL FINANCIAL LLC MANAGING GENERAL PARTNER /s/ DOUGLAS CROCKER II Date: August 10, 2001 By: ______________________________________ DOUGLAS CROCKER II PRESIDENT AND CHIEF EXECUTIVE OFFICER /s/ PHILIP G. TINKLER Date: August 10, 2001 By: ______________________________________ PHILIP G. TINKLER VICE PRESIDENT--FINANCE AND TREASURER 7

FIRST CAPITAL INCOME PROPERTIES LTD SERIES IX 10-Q