<PAGE> 1
UNITED STATES
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, 1999
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File No. 0-7798
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FIRST WILKOW VENTURE
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(Exact name of registrant as specified in its charter)
ILLINOIS 36-6169280
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
180 NORTH MICHIGAN AVENUE, CHICAGO, ILLINOIS 60601
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 726-9622
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NOT APPLICABLE
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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
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<PAGE> 2
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
September 30,
1999 December 31,
(Unaudited) 1998
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<S> <C> <C>
ASSETS
REAL ESTATE AND INVESTMENTS IN REAL ESTATE PARTNERSHIPS
Real Estate:
Land $ 5,453,351 $ 5,998,791
Buildings and Improvements 44,625,977 46,755,663
Fixtures and Equipment 113,105 113,106
----------- -----------
Total 50,192,433 52,867,560
Less-Accumulated Depreciation 17,698,937 18,462,083
----------- -----------
Net Real Estate 32,493,496 34,405,477
Investment in Real Estate Partnerships 5,351,954 3,960,550
----------- -----------
Total 37,845,450 38,366,027
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LOANS RECEIVABLE 818,087 1,847,019
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OTHER ASSETS
Cash 1,610,131 274,406
Certificates of Deposit 4,330,000 4,825,000
Certificates of Deposit - Restricted 250,000 250,000
Receivable 621,778 825,457
Prepaid Expenses 6,306 3,837
Deposits 1,746,739 1,050,525
Deferred Charges 1,367,506 1,339,072
----------- -----------
Total 9,932,459 8,568,297
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TOTAL ASSETS $48,595,996 $48,781,343
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
MORTGAGES AND LOANS PAYABLE
Mortgages Payable $29,516,188 $33,123,310
Notes Payable 211,027 11,027
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Total 29,727,215 33,134,337
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OTHER LIABILITIES
Accounts Payable and Accrued Expenses 68,515 120,911
Accrued Property Taxes 2,650,795 2,353,683
Deferred State Income Taxes 200,000 200,000
Security Deposits and Prepaid Rent 449,451 925,340
Accrued Interest 35,307 34,500
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Total 3,404,069 3,634,434
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MINORITY INTEREST 1,789,733 1,715,413
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PARTNERS' CAPITAL(170,916 units authorized and issued) 13,674,979 10,297,159
----------- -----------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $48,595,996 $48,781,343
=========== ===========
</TABLE>
Note: Balance Sheet at 12/31/98 has been taken from the audited financial
statements at that date.
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<PAGE> 3
FIRST WILKOW VENTURE
CONSOLIDATED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
------------------------ ------------------------
1999 1998 1999 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
REVENUES
Rental Income $2,391,195 $2,401,336 $7,463,653 $7,286,889
Interest Income 66,496 103,388 299,024 245,332
Other Income 2,762,292 1,363,791 2,987,888 1,363,791
---------- ---------- ---------- ----------
5,219,983 3,868,515 10,750,565 8,896,012
---------- ---------- ---------- ----------
PARTNERSHIP INVESTMENTS' INCOME (LOSS)
Share of Net Income (Loss) 595,882 29,693 716,019 41,640
---------- ---------- ---------- ----------
595,882 29,693 716,019 41,640
---------- ---------- ---------- ----------
EXPENSES
Operating Expenses 760,372 699,952 2,037,256 1,913,705
Real Estate Taxes 539,349 466,468 1,715,431 1,715,870
Depreciation and Amortization 440,720 492,223 1,326,935 1,390,733
Interest Expense 593,284 469,229 1,857,972 1,797,704
General and Administrative 153,539 195,637 465,764 478,465
---------- ---------- ---------- ----------
2,487,264 2,323,509 7,403,358 7,296,477
---------- ---------- ---------- ----------
INCOME (LOSS) BEFORE
MINORITY INTEREST
AND TAXES 3,328,601 1,574,699 4,063,226 1,641,175
MINORITY INTEREST IN
SUBSIDIARIES NET INCOME/LOSS (15,549) 56,520 (198,295) 10,440
PROVISION FOR STATE
INCOME TAXES 0 0 0 0
---------- ---------- ---------- ----------
NET INCOME (LOSS) $3,313,052 $1,631,219 $3,864,930 $1,651,615
========== ========== ========== ==========
UNITS USED TO COMPUTE PER UNIT AMOUNTS 170,916 170,916 170,916 170,916
NET INCOME (LOSS)/PER UNIT $ 19.38 $ 9.54 $ 22.61 $ 9.66
========== ========== ========== ==========
DISTRIBUTION PER UNIT $ 0.50 $ 3.70 $ 2.85 $ 3.95
========== ========== ========== ==========
</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.
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<PAGE> 4
FIRST WILKOW VENTURE
CONSOLIDATED STATEMENT OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
--------------------------------
1999 1998
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $3,864,930 $1,651,615
Non Cash Items Included in Net Income
Minority Interest in Subsidiaries Net Income/Loss 198,295 (10,440)
Depreciation and Amortization 1,326,935 1,390,733
Amortization of Debt Forgiveness Income 0 (257,436)
Net (gain) loss on disposal of land, building and improvements (4,317,840) (1,827,048)
(Decrease) Increase in Net Payable and Accrued Expense (725,368) (167,721)
Share of Partnership's Net (Income) Loss (716,019) (41,640)
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Total Cash Provided (Used) from Operating Activities (369,066) 738,063
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CASH FLOWS FROM INVESTING ACTIVITIES
Partnership Investment Draws 178,590 677,528
Partnership Investment Sale Proceeds 519,146 0
Cash Proceeds from sale of Real Estate 4,317,840 1,827,048
(Increase) Decrease in Land and Buildings 823,791 (431,481)
Investment in Partnerships (1,373,121) (443,707)
(Decrease) Increase in Minority Interest (123,975) (110,200)
(Decrease) Increase in Mortgage and Notes Payable 2,400,000 21,587,513
(Increase) Decrease in Mortgage and Notes Receivable 1,028,932 (825,770)
Investment in Deferred Charges (267,179) (775,890)
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Total Cash Provided (Used) from Investing Activites 7,504,024 21,505,041
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CASH FLOWS FROM FINANCING ACTIVITIES
Cash Distribution to Partners (487,111) (675,118)
Mortgage Principal Payments (5,807,122) (18,965,206)
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Total Cash Provided (Used) from Financing Activities (6,294,233) (19,640,324)
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INCREASE (DECREASE) IN CASH AND EQUIVALENTS 840,725 2,602,780
CASH AND EQUIVALENTS - BEGINNING OF PERIOD 5,099,406 3,186,660
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CASH AND EQUIVALENTS - END OF PERIOD $5,940,131 $5,789,440
========== ==========
</TABLE>
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<PAGE> 5
FIRST WILKOW VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
----------------------------------------------
1. Financial Statements
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, 1998, 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.
2. Subsequent Events
On October 5, 1999, the Partnership made a distribution to its partners
in the amount of $85,458.00 or $.50 per unit based on 170,916 units outstanding
at September 30, 1999.
On October 21, 1999, the Partnership made a loan to 209 West Jackson
LLC in the amount of $2,100,000, and an equity investment for $710,000.
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<PAGE> 6
FIRST WILKOW VENTURE
FORM 10-Q
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
SEPTEMBER 30, 1999
Overview
Reference is made to partnership's annual report for the year ended
December 31, 1998 for a discussion of the partnership's business.
The Partnership made a distributions to its partners this year as
follows:
Date Amount Per unit
---- ------ --------
January 10 $59,820.60 $0.35
April 10 341,832.00 2.00
July 10 85,458.00 0.50
On January 6, 1999, loans were made to Orhow, Cenbuil, and 21st M&J
Venture in the amounts of $315,785, $274,000, and $413,740 respectively. On
September 13, 1999, the loans were repaid plus interest of $18,710.27,
$16,234.50, and $24,514.10 respectively.
On January 6, 1999, the Partnership made an additional investment in
XXI Office Plaza Associates in the amount of $359,625 which was returned on
September 17, 1999. On April 9 and July 12, 1999, the Partnership received a
9% return on this investment equal to $5,394.38 and $8,091.56 respectively.
Then, on September 17, 1999, the remaining investment of $469,953.53 was
returned with a gain on the investment of $527,546.47
On February 10 and March 31, 1999, additional loans were made to
Arlington LLC for the purchase of land parcels in the amounts of $365,106.61
and $178,174.88, respectively. On April 2, 1999, a loan receivable from
Arlington LLC was paid down by $89,487.44. On May 3, 1999, an additional loan
was made to Arlington LLC for the purchase of land parcels in the amount of
$100,000. On September 29, 1999, the loan to Arlington LLC of $1,554,911 was
repaid and an equity investment was made for $1,226,000.
On March 31, 1999, the mortgage debt encumbering a property owned by
M&J/Retail Limited Partnership, Diversey & Sheffield, in the amount of
$1,805,685.86 was paid in full. A new first mortgage loan of $1,300,000
bearing an annual interest rate of 7.95% was provided by Column Financial on
April 12, 1999.
On April 1, 1999, an outlot parcel on a property owned by M&J/Retail
Limited Partnership, Broadway Festival, consisting of 6,000 square feet was sold
for a net gain on sale of $26,390.51, classified as Other Income on the
Consolidated Statement of Operations. The mortgage debt encumbering another
property owned by M&J/Retail Limited Partnership, 111th and Western, in the
amount of $545,823.20 was paid in full on April 1, 1999.
On April 6, 1999, a portion of a property owned by M&J/Retail Limited
Partnership, Diversey & Sheffield, consisting of 3,355 square feet was sold for
a net gain on sale of $199,205, classified as Other Income on the
Consolidated Statement of Operations.
On April 14, 1999, a property owned by M&J/Retail Limited Partnership,
Oak Lawn Square shopping center in Oak Lawn, Illinois, was refinanced with Banc
One Mortgage. The principal of the new first mortgage loan is $900,000 bearing
interest at an annual rate of 8.03%. The existing mortgage loan of $683,821
was paid off resulting in net refinancing proceeds of $185,425.
On June 29, 1999, a loan was made to M&J/NCT Louisville, LP in the
amount of $1,150,000 for the purchase of a 40-story, 723,300 square foot Class A
office building located in Louisville, KY. On September 29, 1999, the loan of
$1,150,000 was repaid and an equity investment was made in M&J/NCT Louisville LP
for $300,000.
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<PAGE> 7
On July 29, 1999, the property owned by the Partnership at 47th and
Halsted was sold for net cash proceeds of $3,192,169 resulting in a gain on sale
of $2,762,292 classified as Other Income on the Consolidated Statement of
Operations. On the same date, the notes payable in the amount of $1,455,000
and $600,000 were paid off in full.
On September 17, 1999 the investments in 21st M&J Venture and Orhow
Associates were returned in the amount of $95,000 and $66,500, resulting in a
loss on investment of $4,900 and $3,500, respectively.
Year 2000 Issue
The Partnership is working to resolve the potential impact of the year
2000 on the ability of the Partnership's computerized information systems to
accurately process information that may be date-sensitive. Any of the
Partnership's programs that recognize a date using "00" as the year 1900 rather
than the year 2000 could result in error or system failures. The Partnership
utilizes a number of computer programs across its entire operation. The
Partnership has not completed its assessment, but currently believes that costs
of addressing this will not have a material adverse impact on the Partnership's
financial position. However, no estimates can be made as to the potential
adverse impact resulting from the failure of third party service providers and
vendors to prepare for the year 2000. The Partnership is attempting to identify
those risks as well as to receive compliance certificates from all third parties
that have a material impact on the Partnership's operations.
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<PAGE> 8
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, 1999 and 1998.
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, 1999
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, 1999.
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.
-8-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 5,940,131
<SECURITIES> 0
<RECEIVABLES> 1,439,865
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 8,564,954
<PP&E> 50,192,433
<DEPRECIATION> 17,698,937
<TOTAL-ASSETS> 48,595,996
<CURRENT-LIABILITIES> 2,719,310
<BONDS> 29,727,215
0
0
<COMMON> 0
<OTHER-SE> 13,674,979
<TOTAL-LIABILITY-AND-EQUITY> 48,595,996
<SALES> 7,463,653
<TOTAL-REVENUES> 10,750,565
<CGS> 0
<TOTAL-COSTS> 2,037,256
<OTHER-EXPENSES> 2,181,195
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,857,972
<INCOME-PRETAX> 3,864,930
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,864,930
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,864,930
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
