<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 June 30, 1999
--------------------------------------------
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
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<PAGE> 2
FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
June 30,
1999 December 31,
(Unaudited) 1998
----------- -----------
<S> <C> <C>
ASSETS
------
REAL ESTATE AND INVESTMENTS IN REAL ESTATE PARTNERSHIPS
- -------------------------------------------------------
Real Estate:
Land $ 5,883,228 $ 5,998,791
Buildings and Improvements 46,032,334 46,755,663
Fixtures and Equipment 113,105 113,106
----------- -----------
Total 52,028,667 52,867,560
Less-Accumulated Depreciation 18,896,990 18,462,083
----------- -----------
Net Real Estate 33,131,677 34,405,477
Investment in Real Estate Partnerships 4,331,147 3,960,550
----------- -----------
Total 37,462,824 38,366,027
----------- -----------
LOANS RECEIVABLE 4,554,338 1,847,019
- ---------------- ----------- -----------
OTHER ASSETS
- ------------
Cash 915,754 274,406
Certificates of Deposit 880,000 4,825,000
Certificates of Deposit - Restricted 250,000 250,000
Receivable 872,343 825,457
Prepaid Expenses 5,264 3,837
Deposits 1,221,300 1,050,525
Deferred Charges 1,360,606 1,339,072
----------- -----------
Total 5,505,267 8,568,297
----------- -----------
TOTAL ASSETS $47,522,430 $48,781,343
------------ =========== ===========
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
MORTGAGES AND LOANS PAYABLE
- ---------------------------
Mortgages Payable $32,054,013 $33,123,310
Notes Payable 11,027 11,027
----------- -----------
Total 32,065,040 33,134,337
----------- -----------
OTHER LIABILITIES
- -----------------
Accounts Payable and Accrued Expenses 69,396 120,911
Accrued Property Taxes 2,439,617 2,353,683
Deferred State Income Taxes 200,000 200,000
Security Deposits and Prepaid Rent 450,445 925,340
Accrued Interest 35,035 34,500
----------- -----------
Total 3,194,494 3,634,434
----------- -----------
MINORITY INTEREST 1,815,508 1,715,413
- ----------------- ----------- -----------
PARTNERS' CAPITAL (170,916 units authorized and issued) 10,447,387 10,297,159
- ----------------- ----------- -----------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $47,522,430 $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
SIX MONTHS ENDED JUNE 30, 1999 AND 1998
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
----------------------- ------------------------
1999 1998 1999 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
REVENUES
- --------
Rental Income $2,597,850 $2,456,113 $5,072,458 $4,885,554
Interest Income 121,631 65,697 232,528 141,945
Other Income 225,596 0 225,596 0
---------- ---------- ---------- ----------
2,945,077 2,521,810 5,530,581 5,027,499
---------- ---------- ---------- ----------
PARTNERSHIP INVESTMENTS' INCOME (LOSS)
- --------------------------------------
Share of Net Income (Loss) 56,515 5,652 120,137 11,948
---------- ---------- ---------- ----------
56,515 5,652 120,137 11,948
---------- ---------- ---------- ----------
EXPENSES
- --------
Operating Expenses 561,043 617,852 1,276,884 1,213,753
Real Estate Taxes 580,851 614,163 1,176,082 1,249,402
Depreciation and Amortization 437,266 457,318 886,215 898,510
Interest Expense 609,093 689,594 1,264,688 1,328,476
General and Administrative 191,874 177,206 312,225 282,828
---------- ---------- ---------- ----------
2,380,127 2,556,133 4,916,093 4,972,969
---------- ---------- ---------- ----------
INCOME (LOSS) BEFORE
- --------------------
MINORITY INTEREST
-----------------
AND TAXES 621,466 (28,671) 734,625 66,478
---------
MINORITY INTEREST IN
- --------------------
SUBSIDIARIES NET INCOME/LOSS (199,739) 6,402 (182,746) (46,080)
----------------------------
PROVISION FOR STATE
- -------------------
INCOME TAXES 0 0 0 0
------------ ---------- ---------- ---------- ----------
NET INCOME (LOSS) $ 421,727 ($22,269) $ 551,880 $ 20,398
- ----------------- ========== ========== ========== ==========
UNITS USED TO COMPUTE PER UNIT AMOUNTS 170,916 170,916 170,916 170,916
NET INCOME (LOSS)/PER UNIT $ 2.47 ($0.13) $ 3.23 $ 0.12
========== ========== ========== ==========
DISTRIBUTION PER UNIT $ 2.00 $ 3.70 $ 2.35 $ 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
SIX MONTHS ENDED JUNE 30, 1999 AND 1998
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended June 30,
--------------------------
1999 1998
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
- ------------------------------------
Net Income (Loss) $ 551,880 $ 20,398
Non Cash Items Included in Net Income
Minority Interest in Subsidiaries Net Income/Loss 182,746 46,080
Depreciation and Amortization 886,215 898,510
Amortization of Debt Forgiveness Income 0 (35,676)
Net (gain) loss on disposal of land, building and improvements (1,125,671) 0
(Decrease) Increase in Net Payable and Accrued Expense (659,028) (225,532)
Share of Partnership's Net (Income) Loss (120,137) (11,948)
---------- ----------
Total Cash Provided (Used) from Operating Activities (283,996) 691,832
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
- ------------------------------------
Partnership Investment Draws 103,771 602,894
Cash Proceeds from sale of Real Estate 1,125,671 0
(Increase) Decrease in Land and Buildings 550,399 (491,634)
Investment in Partnerships (354,231) (508,081)
(Decrease) Increase in Minority Interest (82,650) (110,200)
(Decrease) Increase in Mortgage and Notes Payable 2,200,000 8,947,513
(Increase) Decrease in Mortgage and Notes Receivable (2,707,319) 2,000
Investment in Deferred Charges (184,348) (621,248)
---------- ----------
Total Cash Provided (Used) from Investing Activities 651,293 7,821,244
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
- ------------------------------------
Cash Distribution to Partners (401,653) (675,118)
Mortgage Principal Payments (3,269,296) (7,395,362)
---------- ----------
Total Cash Provided (Used) from Financing Activities (3,670,949) (8,070,480)
---------- ----------
INCREASE (DECREASE) IN CASH AND EQUIVALENTS (3,303,651) 442,596
CASH AND EQUIVALENTS - BEGINNING OF PERIOD 5,099,406 3,186,660
- ------------------------------------------ ---------- ----------
CASH AND EQUIVALENTS - END OF PERIOD $1,795,755 $3,629,256
- ------------------------------------ ========== ==========
</TABLE>
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<PAGE> 5
FIRST WILKOW VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 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 July 10, 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 June 30, 1999.
On July 29, 1999, the property owned by the Partnership at 47th and
Halsted was sold for $3,300,000. This resulted in paying off of the notes
payable in the amount of $1,455,000 and $600,000 for a net gain on sale of
$1,248,730.58.
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<PAGE> 6
FIRST WILKOW VENTURE
FORM 10-Q
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
JUNE 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.
On January 10, 1999, the Partnership made a distribution to its
partners in the amount of $59,820.60, or $.35 per unit.
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 January 6, 1999, the Partnership made an additional investment in
XXI Office Plaza Associates in the amount of $359,625. On April 9, 1999,
Partnership received a 9% return on this investment equal to $5,394.38.
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 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 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 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 10, 1999, the Partnership made a distribution to its partners
in the amount of $341,832.00 or $2.00 per unit based on 170,916 units
outstanding at March 31, 1999.
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.
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<PAGE> 7
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.
-7-
<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 June 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: August 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 August 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 1,795,754
<SECURITIES> 0
<RECEIVABLES> 5,426,681
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,144,661
<PP&E> 52,028,667
<DEPRECIATION> 18,896,990
<TOTAL-ASSETS> 47,522,430
<CURRENT-LIABILITIES> 2,509,013
<BONDS> 32,065,040
0
0
<COMMON> 0
<OTHER-SE> 10,447,387
<TOTAL-LIABILITY-AND-EQUITY> 47,522,430
<SALES> 5,072,458
<TOTAL-REVENUES> 5,530,581
<CGS> 0
<TOTAL-COSTS> 1,276,884
<OTHER-EXPENSES> 1,488,307
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,264,688
<INCOME-PRETAX> 551,880
<INCOME-TAX> 0
<INCOME-CONTINUING> 551,880
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 551,880
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
