<PAGE>
 

                                UNITED STATES 
                      SECURITIES AND EXCHANGE COMMISSION

                          Washington, D.C. 20549-1004

                                   FORM 10-Q


                                        
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
 
     For the period ended                         June 30, 1997
                                    --------------------------------------------
 
                                      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 1100, Chicago, Illinois         60606-2607
--------------------------------------------------------     -------------------
        (Address of principal executive offices)                 (Zip Code)

 
                                (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 September 25, 1984,
included in the Partnership's Registration Statement on Form S-11, is
incorporated herein by reference in Part I of this report.
<PAGE>
 
BALANCE SHEETS
(All dollars rounded to nearest 00s)
 
<TABLE>
<CAPTION>
                                                      June 30,
                                                        1997      December 31,
                                                     (Unaudited)      1996
------------------------------------------------------------------------------
<S>                                                  <C>          <C>
ASSETS
Investment in commercial rental properties:
 Land                                                $ 2,887,600  $ 3,928,400
 Buildings and improvements                           14,018,900   18,171,900
------------------------------------------------------------------------------
                                                      16,906,500   22,100,300
Accumulated depreciation and amortization             (6,596,300)  (7,684,100)
------------------------------------------------------------------------------
 Total investment properties, net of accumulated
  depreciation and amortization                       10,310,200   14,416,200
Cash and cash equivalents                              3,742,200    1,925,700
Investment in debt securities                                         496,300
Rents receivable                                         422,500      436,000
Escrow deposits                                           53,600       19,600
Other assets (primarily loan acquisition costs, net
 of accumulated amortization of $198,700 and
 $179,000, respectively)                                  66,200       91,000
------------------------------------------------------------------------------
                                                     $14,594,700  $17,384,800
------------------------------------------------------------------------------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
 Mortgage loans payable                              $ 6,988,500  $11,194,100
 Accounts payable and accrued expenses                   581,300      569,800
 Due to Affiliates                                        21,600       33,200
 Security deposits                                         7,100       22,500
 Other liabilities                                       227,400       38,700
------------------------------------------------------------------------------
                                                       7,825,900   11,858,300
------------------------------------------------------------------------------
Partners' capital:
 General Partner (deficit)                               (83,600)     (96,000)
 Limited Partners (43,861 units issued and
  outstanding)                                         6,852,400    5,622,500
------------------------------------------------------------------------------
                                                       6,768,800    5,526,500
------------------------------------------------------------------------------
                                                     $14,594,700  $17,384,800
------------------------------------------------------------------------------
</TABLE>
STATEMENTS OF PARTNERS' CAPITAL
For the six months ended June 30, 1997 (Unaudited)
and the year ended December 31, 1996
(All dollars rounded to nearest 00s)
 
<TABLE>
<CAPTION>
                                            General     Limited
                                            Partner    Partners       Total
-------------------------------------------------------------------------------
<S>                                         <C>       <C>          <C>
Partners' capital, January 1, 1996          $(72,700) $ 7,931,300  $ 7,858,600
Net (loss) for the year ended December 31,
 1996                                        (23,300)  (2,308,800)  (2,332,100)
-------------------------------------------------------------------------------
Partners' (deficit) capital, December 31,
 1996                                        (96,000)   5,622,500    5,526,500
Net income for the six
 months ended June 30, 1997                   12,400    1,229,900    1,242,300
-------------------------------------------------------------------------------
Partners' (deficit) capital, June 30, 1997  $(83,600) $ 6,852,400  $ 6,768,800
-------------------------------------------------------------------------------
</TABLE>
    The accompanying notes are an integral part of the financial statements.
2
<PAGE>
 
STATEMENTS OF INCOME AND EXPENSES
For the quarters ended June 30, 1997 and 1996
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)
 
<TABLE>
<CAPTION>
                                                      1997       1996
------------------------------------------------------------------------
<S>                                                <C>        <C>
Income:
 Rental                                            $1,144,700 $1,098,300
 Interest                                              39,500     31,200
 Gain on sale of Property                             764,800
------------------------------------------------------------------------
                                                    1,949,000  1,129,500
------------------------------------------------------------------------
Expenses:
 Interest                                             240,900    266,000
 Depreciation and amortization                        121,600    150,500
 Property operating:
  Affiliates                                            7,400     77,500
  Nonaffiliates                                       217,600    189,200
 Real estate taxes                                     63,700    139,200
 Insurance--Affiliate                                  11,500     13,800
 Repairs and maintenance                               88,300     86,400
 General and administrative:
  Affiliates                                            4,700      7,200
  Nonaffiliates                                        30,200     25,100
------------------------------------------------------------------------
                                                      785,900    954,900
------------------------------------------------------------------------
Net income                                         $1,163,100 $  174,600
------------------------------------------------------------------------
Net income allocated to General Partner            $   11,600 $    1,700
------------------------------------------------------------------------
Net income allocated to Limited Partners           $1,151,500 $  172,900
------------------------------------------------------------------------
Net income allocated to Limited Partners per Unit
 (43,861 Units outstanding)                        $    26.25 $     3.94
------------------------------------------------------------------------
</TABLE>
 
STATEMENTS OF INCOME AND EXPENSES
For the six months ended June 30, 1997 and 1996
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)
 
<TABLE>
<CAPTION>
                                                      1997       1996
------------------------------------------------------------------------
<S>                                                <C>        <C>
Income:
 Rental                                            $2,187,400 $2,143,200
 Interest                                              70,700     64,200
 Gain on sale of property                             764,800
------------------------------------------------------------------------
                                                    3,022,900  2,207,400
------------------------------------------------------------------------
Expenses:
 Interest                                             495,000    541,600
 Depreciation and amortization                        250,000    303,400
 Property operating:
  Affiliates                                           38,000    154,100
  Nonaffiliates                                       506,900    392,600
 Real estate taxes                                    194,600    257,100
 Insurance--Affiliate                                  26,400     27,700
 Repairs and maintenance                              208,500    186,800
 General and administrative:
  Affiliates                                            7,200     16,200
  Nonaffiliates                                        54,000     57,700
------------------------------------------------------------------------
                                                    1,780,600  1,937,200
------------------------------------------------------------------------
Net income                                         $1,242,300 $  270,200
------------------------------------------------------------------------
Net income allocated to General Partner            $   12,400 $    2,700
------------------------------------------------------------------------
Net income allocated to Limited Partners           $1,229,900 $  267,500
------------------------------------------------------------------------
Net income allocated to Limited Partners per Unit
 (43,861 Units outstanding)                        $    28.04 $     6.10
------------------------------------------------------------------------
</TABLE>
STATEMENTS OF CASH FLOWS
For the six months ended June 30, 1997 and 1996
(Unaudited)
(All dollars rounded to nearest 00s)
 
<TABLE>
<CAPTION>
                                                             1997         1996
----------------------------------------------------------------------------------
<S>                                                       <C>          <C>
Cash flows from operating activities:
 Net income                                               $ 1,242,300  $  270,200
 Adjustments to reconcile net income to net cash
  provided by operating activities:
  Depreciation and amortization                               250,000     303,400
  (Gain) on sale of Property                                 (764,800)
  Changes in assets and liabilities:
   Decrease (increase) in rents receivable                     13,500     (20,500)
   (Increase) decrease in other assets                         (7,500)        400
   Increase in accounts payable and accrued expenses           11,500      62,400
   (Decrease) in due to Affiliates                            (11,600)     (4,700)
   Increase (decrease) in other liabilities                   188,700     (59,400)
----------------------------------------------------------------------------------
    Net cash provided by operating activities                 922,100     551,800
----------------------------------------------------------------------------------
Cash flows from investing activities:
 Payments for capital and tenant improvements                            (134,900)
 Decrease in investments in debt securities                   496,300
 Proceeds from sale of Property                             4,653,000
 (Increase) decrease in escrow deposits                       (34,000)     66,600
----------------------------------------------------------------------------------
    Net cash provided by (used for) investing activities    5,115,300     (68,300)
----------------------------------------------------------------------------------
Cash flows from financing activities:
 Repayment of mortgage loan payable                        (3,819,700)
 Principal payments on mortgage loans payable                (385,800)   (469,200)
 Loan acquisition costs incurred                                           (1,600)
 (Increase) decrease in security deposits                     (15,400)        900
----------------------------------------------------------------------------------
    Net cash (used for) financing activities               (4,220,900)   (469,900)
----------------------------------------------------------------------------------
Net increase in cash and cash equivalents                   1,816,500      13,600
Cash and cash equivalents at the beginning of the period    1,925,700   2,464,100
----------------------------------------------------------------------------------
Cash and cash equivalents at the end of the period        $ 3,742,200  $2,477,700
----------------------------------------------------------------------------------
Supplemental information:
 Interest paid during the period                          $   435,700  $  510,400
----------------------------------------------------------------------------------
</TABLE>
    The accompanying notes are an integral part of the financial statements.
                                                                               3
<PAGE>
 
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
June 30, 1997
 
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 financial statements have been prepared in accordance with generally
accepted accounting principles ("GAAP"). Under this method of accounting,
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, 1997 are not necessarily indicative
of the operating results for the year ending December 31, 1997.
 
The financial statements include the Partnership's 50% interest in one joint
venture and 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 are 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.
 
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. 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 when conditions exist which may
indicate that it is probable that the sum of expected future cash flows
(undiscounted) from such property is less than its carrying basis. Upon
determination that a permanent impairment has occurred, the rental property is
reduced to estimated fair value. Management was not aware of any indicator that
would result in a significant impairment loss during the periods reported.
 
Loan acquisition costs are amortized on the straight-line method over the term
of the mortgage loan made in connection with the acquisition of Partnership
properties or refinancing of Partnership loans. When a property is disposed of
or a loan is refinanced, the related loan acquisition costs and accumulated
amortization are removed from the respective accounts and any unamortized
balance is expensed.
 
Cash equivalents are considered all highly liquid investments with a maturity
of three months or less when purchased.
 
Certain reclassifications have been made to the previously reported 1996
statements in order to provide comparability with the 1997 statements. These
reclassifications had no effect on net (loss) or Partners' (deficit) capital.
 
Reference is made to the Partnership's annual report for the year ended
December 31, 1996 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 September 24, 1985,
the Termination of the Offering, the General Partner is entitled to 10% of
distributable Cash Flow (as defined in the Partnership Agreement), as a
Partnership Management Fee. For the quarter and six months ended June 30, 1996,
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 or
disposition 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
 
4
<PAGE>
 
during the existence of the Partnership. For the quarter and six months ended
June 30, 1997, the General Partner was allocated Net Profits of $11,600 and
$12,400, respectively, which included a gain on the sale of property of $7,600.
The General Partner was allocated 1% of the gain on the sale of property due to
the fact that the gain represented a partial recovery of the loss on provisions
for value impairment taken in prior periods which were allocated 1% to the
General Partner and 99% to the Limited Partners.
 
Fees and reimbursements paid and payable by the Partnership to Affiliates
during the quarter and six months ended June 30, 1997 were as follows:
 
 
<TABLE>
<CAPTION>
                                                         Paid
                                                  ------------------
                                                  Quarter Six Months Payable
----------------------------------------------------------------------------
<S>                                               <C>     <C>        <C>
Property management and leasing fees (a)          $ 5,100    $43,100 $   100
Reimbursement of property insurance premiums, at
 cost                                              15,900     15,900  10,500
Real estate commission (b)                           None       None  10,000
Reimbursement of expenses, at cost:
 --Accounting                                       3,900      5,300     700
 --Investor communication                           1,500      1,900     300
 --Legal                                            1,800     17,800    None
----------------------------------------------------------------------------
                                                  $28,200    $84,000 $21,600
----------------------------------------------------------------------------
</TABLE>
(a) Effective December 31, 1996, the Affiliate providing property management
    and certain leasing services to the Partnership's properties, sold its
    interest in the property management agreements to an unrelated party. The
    payments included in the above table relate to asset management fees and
    prior period property management fees.
(b) As of June 30, 1997, 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 has been 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 from the initial investment
    date.
 
3. MORTGAGE LOANS PAYABLE:
 
Mortgage loans payable at June 30, 1997 and December 31, 1996 consisted of the
following non-recourse loans:
 
<TABLE>
<CAPTION>
                                     Partnership's Share of
                                      Principal Balance at   Average
                                     ---------------------- Interest  Maturity
  Property Pledged as Collateral      6/30/97    12/31/96     Rate      Date
------------------------------------------------------------------------------
<S>                                  <C>        <C>         <C>       <C>
Glendale Center Shopping Mall (50%)  $6,988,500 $ 7,339,500 10.09%(a)  1/1/99
Regency Park Shopping Center (25%)      (b)       3,854,600    (b)      (b)
------------------------------------------------------------------------------
                                     $6,988,500 $11,194,100
------------------------------------------------------------------------------
</TABLE>
(a) This interest rate represents the weighted average for the six months ended
    June 30, 1997. This interest rate is subject to monthly change in
    accordance with the provisions of the loan agreement. As of June 30, 1997,
    the interest rate on this loan was 10.19%.
(b) The joint venture which owns Regency, in which the Partnership has a 25%
    interest with Affiliated partnerships, repaid the mortgage collateralized
    by Regency with proceeds generated from its sale. For further information
    regarding the sale see Note 4.
 
For additional information regarding the mortgage loans payable, see Notes to
the Financial Statements included in the Partnership's Annual Report for the
year ended December 31, 1996.
 
4. PROPERTY SALE:
 
On June 16, 1997, a joint venture in which the Partnership has 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
$4,831,250. The Partnership's share of net proceeds from this transaction was
$833,200, which is net of closing expenses and the repayment of the mortgage
loan encumbering the property. The Partnership recorded a gain of $764,800 in
connection with this sale. Net proceeds received from this transaction will be
retained to supplement working capital reserves.
 
                                                                               5
<PAGE>
 
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, 1996, for a discussion of the Partnership's business.
 
OPERATIONS
The table below is a recap of the Partnership's share of certain operating
results of each of its remaining properties for the quarters and six months
ended June 30, 1997 and 1996. The discussion following the table should be read
in conjunction with the financial statements and notes thereto appearing in
this report.
 
<TABLE>
<CAPTION>
                         Comparative Operating Results (a)
                      For the Quarters    For the Six Months
                            Ended                Ended
                      6/30/97   6/30/96   6/30/97    6/30/96
--------------------------------------------------------------
<S>                  <C>        <C>      <C>        <C>
GLENDALE CENTER SHOPPING MALL (50%)
Rental revenues      $1,030,900 $947,600 $1,899,900 $1,843,000
--------------------------------------------------------------
Property net income  $  375,100 $170,300 $  397,200 $  279,800
--------------------------------------------------------------
Average occupancy           91%      91%        91%        91%
--------------------------------------------------------------
REGENCY PARK SHOPPING CENTER (25%)(B)
Rental revenues      $  113,800 $150,800 $  287,500 $  300,200
--------------------------------------------------------------
Property net income  $   15,500 $  5,400 $   67,600 $      200
--------------------------------------------------------------
Average occupancy                    88%                   88%
--------------------------------------------------------------
</TABLE>
(a) Excludes certain income and expense items which are not directly related to
    individual property operating results such as Partnership interest income
    and general and administrative expenses or are related to properties
    previously owned by the Partnership.
(b) Property was sold on June 16, 1997, net income excludes the gain recorded
    on the sale of the property. For further information see Note 4 of Notes to
    Financial Statements.
 
Unless otherwise disclosed, discussions of fluctuations between 1997 and 1996
refer to both the quarters and six months ended June 30, 1997 and 1996.
 
Net income increased by $988,500 and $972,100 for the quarter and six months
ended June 30, 1997 when compared to the quarter and six months ended June 30,
1996, respectively. The increases were primarily due to the gain recorded on
the sale of Regency Park Shopping Center ("Regency") and improved operating
results at Glendale Shopping Center Mall ("Glendale").
 
Net income, exclusive of the results of Regency, increased by $213,600 and
$139,900 for the quarterly and six-month periods under comparison,
respectively. The increases were primarily due the receipt of $150,000 as
consideration for the early termination of a tenant's lease at Glendale. Also
contributing the increases was a decrease in general and administrative
expenses resulting from a reduction in personnel and accounting costs.
 
The following comparative discussion excludes the results of Regency.
 
Rental revenues increased by $83,300 or 8.8% and $56,900 or 3.1% for the
quarter and six months ended June 30, 1997 when compared to the quarter and six
months ended June 30, 1996, respectively. The increases were primarily due an
increase in consideration received for the early termination of tenants' leases
in 1997 when compared to 1996. The increases were partially offset be a
decrease in percentage rental income which was due diminished sales.
 
Real estate tax expense decreased by $72,200 and $58,900 for the quarterly and
six-month periods under comparison, respectively. The decrease was primarily
due to a reduction in estimated expense for 1997 due to a successful appeal for
a reduction in the taxing authority's assessed value of Glendale.
 
Interest expense decreased by $11,700 and $31,900 for the quarter and six
months ended June 30, 1997 when compared to the quarter and six months ended
June 30, 1996, respectively. The decreases were primarily due to the effects of
principal payments made during the past 18 months on the Glendale mortgage
loan.
 
Property operating expenses decreased by $36,400 for the quarter ended June 30,
1997 when compared to the quarter ended June 30, 1996. The decrease was
primarily the result of a decrease in utility and personnel costs, partially
offset by an increase in advertising and promotional costs. Property operating
expenses remained relatively unchanged for the six-month periods under
comparison.
 
Repairs and maintenance expenses increased by $19,100 for the six months ended
June 30, 1997 when compared to the six months ended June 30, 1996. The increase
was primarily due to increases in snow removal and energy plant expenses.
Repair and maintenance expenses remained relatively unchanged for the quarterly
periods under comparison.
 
To increase and/or maintain occupancy levels at the Partnership's remaining
property, the General Partner, through its Affiliated and unaffiliated asset
and property management groups, continues to take the following actions: 1)
implementation of marketing programs, including hiring of third-party leasing
agents or providing on-site leasing personnel, advertising, direct mail
campaigns and development of property brochures; 2) promotion of local broker
events and networking with local brokers; 3) networking with national level
retailers; 4) cold-calling other businesses and tenants in the market area; and
5) providing rental concessions or competitively pricing rental rates depending
on market conditions.
 
LIQUIDITY AND CAPITAL RESOURCES
One of the Partnership's objectives is to dispose of its properties when market
conditions allow for the achievement of the maximum possible sales price. In
the interim, the Partnership continues to manage and maintain its remaining
property. Cash Flow (as defined in the Partnership Agreement) is generally not
equal to net income or cash flows as determined by generally accepted
accounting principles ("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 following table includes a reconciliation of Cash Flow (as defined in the
Partnership Agreement) to net cash 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
6
<PAGE>
 
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
 
disclosed in the Statements of Income and Expenses and Statements of Cash Flow.
 
<TABLE>
<CAPTION>
                                                           Comparative
                                                        Cash Flow Results
                                                       For the Six Months
                                                              Ended
                                                        6/30/97     6/30/96
-----------------------------------------------------------------------------
<S>                                                   <C>          <C>
Cash Flow (as defined in the Partnership Agreement)   $   341,700  $ 144,200
Items of reconciliation:
 Principal payments on mortgage loans                     385,800    429,400
 Decrease (increase) in current assets                      6,000    (20,100)
 Increase (decrease) in current liabilities               188,600     (1,700)
-----------------------------------------------------------------------------
Net cash provided by operating activities             $   922,100  $ 551,800
-----------------------------------------------------------------------------
Net cash provided by (used for) investing activities  $ 5,115,300  $ (68,300)
-----------------------------------------------------------------------------
Net cash (used for) financing activities              $(4,220,900) $(469,900)
-----------------------------------------------------------------------------
</TABLE>
 
The increase in Cash Flow (as defined in the Partnership Agreement) of $197,500
for the six months ended June 30, 1997 when compared to the six months ended
June 30, 1996 was primarily due to improved operating results, exclusive of
depreciation and amortization, at Glendale.
 
The increase in the Partnership's cash position of $1,816,500 for the six
months ended June 30, 1997 was primarily the result of net cash provided by
operating activities, net proceeds from the sale of Regency, and the decrease
in the Partnership's investments in debt securities exceeding regularly
scheduled principal payments on mortgage debt.
 
The increase in net cash provided by operating activities of $370,300 for the
six months ended June 30, 1997 when compared to the six months ended June 30,
1996 was primarily the result of the receipt of real estate tax refunds at
Glendale, along with the increase in net income due to improved operating
results at Glendale, exclusive of depreciation and amortization, as previously
discussed, partially offset by the timing of the payment of certain expenses at
Glendale.
 
Net cash (used for) provided by investing activities changed from $(68,300) for
the six months ended June 30, 1996 to $5,115,300 for the six months ended June
30, 1997. The change was due to the sale of Regency, the decrease in the
Partnership's investment's in debt securities and a decrease in expenditures
for capital and tenant improvements and leasing costs at the Partnership's
properties. The Partnership maintains working capital reserves to pay for
capital expenditures such as building and tenant improvements and leasing
costs.
 
On June 16, 1997, the joint venture in which the Partnership owns a 25%
interest, completed the sale of Regency. The Partnership's share of the net
proceeds received from this transaction amounted to $833,200. The uncertainty
surrounding Glendale and the Partnership's need to protect its position in the
joint venture, make it necessary for the Partnership to retain all proceeds
received from the sale of Regency.
 
Net cash used for financing activities increased by $3,751,000 for the six
months ended June 30, 1997 when compared to the six months ended June 30, 1996.
The increase was due primarily to the repayment of the mortgage loan
collateralized by Regency.
 
As more fully discussed in the Partnership's Annual Report for the year ended
December 31, 1996, the future tenancy level at Glendale is uncertain. The
potential loss of one or both of its anchor tenants at their lease termination
dates (January 2001) would have a dramatic negative impact on the operations of
the property. The General Partner is continuing to explore alternatives for
Glendale, which include, but are not limited to, pursuing other tenants and the
sale of the property.
 
As a result of the future tenancy matters at Glendale together with the cash
requirements of its mortgage loan, the General Partner believes that it is in
the best interest of the Partnership to retain all cash available. Accordingly,
distributions to Limited Partners continue to be suspended. The amount of
future distributions to Partners will ultimately be dependent upon the
performance of the Partnership's remaining property investment as well as the
General Partner's determination of the amount of cash necessary to supplement
working capital reserves to meet future liquidity requirements. There can be no
assurance as to the amount and/or availability of cash for future distributions
to Partners.
 
Based upon the current estimated value of its assets, net of its outstanding
liabilities, together with its expected operating results and capital
expenditure requirements, the General Partner believes that the Partnership's
cumulative distributions to its Limited Partners from inception through the
termination of the Partnership will be significantly less than such Limited
Partners' original Capital Investment.
 
                                                                               7
<PAGE>
 
 
                          PART II.  OTHER INFORMATION

                                        
Item 6. Exhibits and Reports on Form 8-K:
-----------------------------------------

     (a)  Exhibits:  None

     (b)  Reports on Form 8-K:

          A Report on Form 8-K reporting the sale of Regency, located in
          Jacksonville, Florida, was filed on June 26, 1997.
<PAGE>
 

                                  SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                FIRST CAPITAL INCOME PROPERTIES, LTD. - SERIES X

                                By: FIRST CAPITAL FINANCIAL CORPORATION
                                    GENERAL PARTNER

Date: August 14, 1997           By: /s/ DOUGLAS CROCKER II
      ---------------               --------------------------------------
                                        DOUGLAS CROCKER II
                                    President and Chief Executive Officer

Date: August 14, 1997           By: /s/ NORMAN M. FIELD
      ---------------               --------------------------------------
                                        NORMAN M. FIELD
                                    Vice President - Finance and Treasurer