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<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
---------------------------------------
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 No. 0-7798
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FIRST WILKOW VENTURE
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
ILLINOIS 36-6169280
- ------------------------------- ------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
180 NORTH MICHIGAN AVENUE, CHICAGO, ILLINOIS 60601
- --------------------------------------------- ----------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 726-9622
-----------------------------
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 to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days. YES X NO
----- -----
<PAGE> 2
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
September 30,
1996 December 31,
(Unaudited) 1995
----------- -----------
ASSETS
<S> <C> <C>
REAL ESTATE AND INVESTMENTS IN REAL ESTATE PARTNERSHIPS
Real Estate:
Land $ 7,311,455 $ 8,698,675
Buildings and Improvements 45,413,267 56,540,021
Fixtures and Equipment 116,648 138,384
----------- -----------
Total 52,841,370 65,377,080
Less-Accumulated Depreciation 16,194,752 19,726,068
----------- -----------
Net Real Estate 36,646,618 45,651,012
Investment in Real Estate Partnerships 5,294,055 5,130,522
----------- -----------
Total 41,940,673 50,781,534
----------- -----------
LOANS RECEIVABLE 1,224,274 1,452,639
----------- -----------
OTHER ASSETS
Cash 205,712 328,852
Certificates of Deposit 287,998 162,998
Receivable 416,548 551,307
Prepaid Expenses 5,821 1,062
Deposits 365,822 598,870
Deferred Charges 1,006,332 1,197,568
----------- -----------
Total 2,288,233 2,840,657
----------- -----------
TOTAL ASSETS $45,453,180 $55,074,830
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
MORTGAGES AND LOANS PAYABLE
Mortgages Payable $31,466,093 $37,124,893
Notes Payable 1,254,488 3,649,822
----------- -----------
Total 32,720,581 40,774,715
----------- -----------
OTHER LIABILITIES
Accounts Payable and Accrued Expenses 249,074 240,092
Accrued Property Taxes 1,762,890 2,470,265
Deferred State Income Taxes 200,000 200,000
Security Deposits and Prepaid Rent 389,554 555,767
Accrued Interest 45,366 365,078
----------- -----------
Total 2,646,884 3,831,202
----------- -----------
MINORITY INTEREST 1,432,033 1,579,357
----------- -----------
PARTNERS' CAPITAL (178,972 units authorized and issued) 8,653,682 8,889,556
----------- -----------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $45,453,180 $55,074,830
=========== ===========
</TABLE>
Note: Balance Sheet at 12/31/95 has been taken from the audited financial
statements at that date.
-2-
<PAGE> 3
FIRST WILKOW VENTURE
CONSOLIDATED STATEMENT OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Nine Months
------------------------ ---------------------------
Ended September 30, Ended September 30,
1996 1995 1996 1995
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
REVENUES
Rental Income $2,263,803 $2,748,438 $6,841,820 $ 8,265,824
Hotel Income 0 0 0 1,446,067
Interest Income 41,772 38,909 112,549 118,226
Other Income 55,646 10,200 83,210 48,462
---------- ---------- ---------- -----------
2,361,221 2,797,547 7,037,579 9,878,579
---------- ---------- ---------- -----------
PARTNERSHIP INVESTMENTS' INCOME (LOSS)
Share of Net Income (Loss) 70,361 127,215 206,879 159,501
---------- ---------- ---------- -----------
70,361 127,215 206,879 159,501
---------- ---------- ---------- -----------
EXPENSES
Operating Expenses 683,638 776,314 1,919,026 3,072,486
Real Estate Taxes 577,857 497,859 1,765,205 1,923,439
Depreciation and Amortization 432,389 552,162 1,283,904 1,786,280
Interest Expense 675,839 911,198 2,078,582 3,090,536
Bad Debt Expense 0 106,502 0 106,502
General and Administrative 222,600 127,220 498,289 722,145
---------- ---------- ---------- -----------
2,592,323 2,971,255 7,545,006 10,701,388
---------- ---------- ---------- -----------
INCOME (LOSS) BEFORE
MINORITY INTEREST
AND TAXES (160,741) (46,493) (300,548) (663,308)
MINORITY INTEREST IN
SUBSIDIARIES NET LOSS 20,134 32,709 64,674 77,159
PROVISION FOR STATE
INCOME TAXES 0 0 0 0
---------- ---------- ---------- -----------
NET INCOME (LOSS) $ (140,607) $ (13,784) $ (235,874) $ (586,149)
========== ========== ========== ===========
EARNINGS PER UNIT BASED
ON 178,972 UNITS OUTSTANDING $ (0.79) $ (0.08) $ (1.32) $ (3.27)
========== ========== ========== ===========
DISTRIBUTION PER UNIT $ 0.00 $ 0.00 $ 0.00 $ 0.00
========== ========== ========== ===========
</TABLE>
NOTE 1: No provision for Federal Income Taxes has been made since First Wilkow
Venture is a partnership and the partners report their pro-rata share
of income or loss individually.
-3-
<PAGE> 4
FIRST WILKOW VENTURE
CONSOLIDATED STATEMENT OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------
1996 1995
----------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ (235,874) $ (586,149)
Non Cash Items Included in Net Income
Loss on Sale of Real Estate 271,076 0
Minority Interest in Subsidiaries Net Income/Loss (64,674) (77,159)
Depreciation and Amortization 1,283,904 1,786,280
Amortization of Debt Forgiveness Income (312,827) (55,112)
(Decrease) Increase in Net Payable and Accrued Expense (562,996) 237,625
Share of Parntership's Net (Income) Loss (206,879) (22,256)
Ending Cash of Properties Disposed of During Period 0 (42,453)
Bad Debt Loss 0 106,502
----------- -----------
Total Cash Provided (Used) from Operating Activities 171,730 1,347,278
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Partnership Investment Draws 183,330 215,923
Cash Provided from Sale of Real Estate 8,197,646 -
(Increase) in Land and Buildings (316,634) (501,187)
Investment in Partnerships (139,983) (1,143,943)
(Decrease) Increase in Minority Interest (82,650) 103,905
(Decrease) Increase in Mortgage and Notes Payable (970,333) 2,909,707
(Increase) Decrease in Mortgage and Notes Receivable 228,365 (126,799)
Investment in Deferred Charges (240,362) (242,985)
----------- -----------
Total Cash Provided (Used) from Investing Activites 6,859,379 1,214,621
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Mortgage Principal Payments (7,029,249) (2,154,797)
----------- -----------
Total Cash Provided (Used) from Financing Activities (7,029,249) (2,154,797)
----------- -----------
INCREASE (DECREASE) IN CASH AND EQUIVALENTS 1,860 407,102
CASH AND EQUIVALENTS - BEGINNING OF PERIOD 491,850 529,136
----------- -----------
CASH AND EQUIVALENTS - END OF PERIOD $ 493,710 $ 936,238
=========== ===========
</TABLE>
-4-
<PAGE> 5
FIRST WILKOW VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
Accounting Policies
The financial statements have been prepared in accordance with
generally accepted accounting principles. Under this method of accounting,
revenues are recorded when earned and expenses are recorded when incurred.
Reference is made to the Partnership's annual report for the year
ended December 31, 1995, for a description of other accounting policies and
additional details for the Partnership's financial condition, results of
operations, changes in Partners' capital and statement of cash flows for the
year then ended. The details provided in the notes thereto have not changed as
a result of normal transactions in the interim.
-5-
<PAGE> 6
FIRST WILKOW VENTURE
FORM 10-Q
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
SEPTEMBER 30, 1996
Overview
Reference is made to partnership's annual report for the year ended
December 31, 1995 for a discussion of the partnership's business.
On January 18, 1996, Freeport Office Partners Limited sold the 8505
Freeport Office Building for $8,503,150, resulting in full repayment of the
$5,185,580 first mortgage and the $2,000,000 subordinated debenture. The
Registrant received $615,983 as repayment of previous operating deficit loans.
A provision for loss in book value of $1,400,000, equal to the estimated loss
to the Registrant on the disposition of the property, was recognized in 1995.
An additional loss of $271,076 is included in 1996.
On July 1, 1996, the Registrant invested an additional $98,100 in M &
J/Grove Limited Partnership in connection with the purchase of 981 Call Units.
The Call Unit holders are entitled to a cumulative cash flow priority of 12%
per annum. Upon sale or refinancing, the Call Unit holders will receive the
first $367,500 of available proceeds. Any proceeds remaining thereafter, will
be split 25% to the holders of the Call Units and 75% to the General and Class
A Limited Partners. The proceeds of the M & J/Grove Limited Partnership capital
call were primarily used for a mortgage debt restructuring of the Grove Office
Park. The original $8,000,000 mortgage was paid off at a discounted amount of
$5,600,000 and replaced with a new first mortgage loan in the amount of
$5,500,000, bearing interest at the fixed rate of 8.55% per annum for five
years. A Limited Guaranty covering 28.41%, or $1,562,500 of the mortgage loan
was made by third parties on behalf of M & J/Grove Limited Partnership. The
Registrant guaranteed $520,833, an amount which approximates 28.41% of its
ownership interest in M & J/Grove Limited Partnership, exclusive of
subordinated equity interests which have no value.
On September 30, 1996 M & J/Sheridan Limited Partnership refinanced
the Highland Park Professional Center located at 1893 Sheridan Road in Highland
Park, Illinois. The term of the new loan, with a principal amount of
$1,425,000, is five years. Debt service reflects an interest rate of 8.88% per
annum and amortization based on 20 years.
For the nine months ended September 30, 1996, revenues and expenses
were $7,037,579 and $7,545,006, respectively, compared to $9,878,579 and
$10,701,388 for the nine months ended September 30, 1995. The variances are
primarily due to the disposition of the 8505 Freeport Office Building and Tango
Bay Suites. The decreases in revenues and expenses from the comparative period
of 1995, which are related to the 8505 Freeport Office Building, were
approximately $1,330,000 and $1,133,000, respectively. The decreases in
revenues and expenses from the comparative period of 1995, which are related to
Tango Bay Suites, were approximately $1,446,067 and $1,714,911, respectively.
-6-
<PAGE> 7
REMARKS
In the opinion of the General Partners, the financial information of
this report includes all adjustments, including estimated provisions for items
normally settled at year end, and is a fair statement of the results for the
interim ended September 30, 1996 and 1995.
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 WILKOW VENTURE
By: Marc R. Wilkow
------------------------------------
Marc R. Wilkow, General Partner and
President of M & J Wilkow, Ltd., its
Managing Agent
DATED: November 10, 1996
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, in the capacities indicated, on November 10, 1996.
Clifton J. Wilkow
------------------------------------
Clifton J. Wilkow, General Partner
and Executive Vice President of
M & J Wilkow, Ltd.
Thomas Harrigan
------------------------------------
Thomas Harrigan, Vice President of
M & J Wilkow, Ltd.
-7-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 493,710
<SECURITIES> 0
<RECEIVABLES> 1,224,274
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,281,901
<PP&E> 52,841,370
<DEPRECIATION> 16,194,752
<TOTAL-ASSETS> 45,453,180
<CURRENT-LIABILITIES> 2,011,964
<BONDS> 32,720,581
<COMMON> 0
0
0
<OTHER-SE> 8,653,682
<TOTAL-LIABILITY-AND-EQUITY> 45,453,180
<SALES> 6,841,820
<TOTAL-REVENUES> 7,037,579
<CGS> 0
<TOTAL-COSTS> 1,919,026
<OTHER-EXPENSES> 2,263,494
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,078,582
<INCOME-PRETAX> (235,874)
<INCOME-TAX> 0
<INCOME-CONTINUING> (235,874)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (235,874)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
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