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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, 2003
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 0-7798
FIRST WILKOW VENTURE, A LIMITED PARTNERSHIP
(Exact Name of Registrant as Specified in Its Charter)
Illinois 36-6169280
----------------------- ---------------------------------
(State of Organization) (IRS Employer Identification No.)
180 North Michigan Avenue, Chicago, Illinois 60601
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(Address of Principal Executive Offices)
Registrant's Telephone Number, including area code: (312) 726-9622
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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
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FIRST WILKOW VENTURE
(A LIMITED PARTNERSHIP)
CONSOLIDATED BALANCE SHEET
September 30,
2003 December 31,
(Unaudited) 2002
------------- ------------
ASSETS
REAL ESTATE AND INVESTMENTS IN REAL ESTATE PARTNERSHIPS
Real Estate:
Land $ 4,030,069 $ 4,100,376
Buildings and Improvements 31,444,813 31,458,038
Fixtures and Equipment 41,670 41,670
----------- -----------
Total 35,516,552 35,600,084
Less-Accumulated Depreciation 13,555,824 13,070,307
----------- -----------
Net Real Estate 21,960,728 22,529,777
Investments in Real Estate Partnerships 7,188,867 7,181,237
----------- -----------
Total 29,149,595 29,711,014
----------- -----------
LOANS RECEIVABLE 86,963 941,725
----------- -----------
OTHER ASSETS
Cash and Cash Equivalents 5,694,699 4,562,781
Certificates of Deposit - Restricted 250,000 250,000
Receivable 707,292 1,238,092
Deposits 984,615 832,105
Deferred Charges 1,229,094 1,155,828
----------- -----------
Total 8,865,700 8,038,806
----------- -----------
TOTAL ASSETS $38,102,258 $38,691,545
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
MORTGAGES PAYABLE $20,570,445 $20,870,507
----------- -----------
OTHER LIABILITIES
Accounts Payable and Accrued Expenses 170,840 191,688
Accrued Property Taxes 1,233,838 1,329,662
Deferred State Income Taxes 170,000 170,000
Security Deposits and Prepaid Rent 622,138 584,447
----------- -----------
Total 2,196,816 2,275,797
----------- -----------
MINORITY INTEREST 2,598,442 2,578,193
----------- -----------
PARTNERS' CAPITAL (170,916 units authorized and issued) 12,736,555 12,967,048
----------- -----------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $38,102,258 $38,691,545
=========== ===========
Note: Balance Sheet at 12/31/02 taken from the audited financial statements at
that date.
See accompanying notes to consolidated financial statements
FIRST WILKOW VENTURE
CONSOLIDATED STATEMENT OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(UNAUDITED)
Three Months Nine Months
Ended September 30, Ended September 30,
---------------------------- ----------------------------
2003 2002 2003 2002
----------- ----------- ----------- -----------
REVENUES
Rental Income $ 1,993,880 $ 1,961,224 $ 6,124,570 $ 6,120,456
Interest Income 19,006 43,322 66,285 129,665
Gain on disposal of real estate and other revenue 331,531 5,988 341,964 16,354
----------- ----------- ----------- -----------
2,344,417 2,010,534 6,532,819 6,266,475
----------- ----------- ----------- -----------
PARTNERSHIP INVESTMENTS' INCOME
Share of Net Income 57,143 265,819 232,706 444,336
----------- ----------- ----------- -----------
EXPENSES
Operating Expenses 1,092,993 998,277 3,073,093 3,008,230
Real Estate Taxes 377,777 351,506 952,192 977,830
Depreciation and Amortization 313,132 314,735 944,121 942,976
Interest Expense 407,689 413,794 1,229,772 1,240,090
General and Administrative 11,995 47,175 82,392 97,828
----------- ----------- ----------- -----------
2,203,586 2,125,487 6,281,570 6,266,954
----------- ----------- ----------- -----------
INCOME BEFORE MINORITY INTEREST 197,974 150,866 483,955 443,857
MINORITY INTEREST IN
SUBSIDIARIES' NET (INCOME) LOSS (72,405) (4,159) (150,422) 196
----------- ----------- ----------- -----------
NET INCOME $ 125,569 $ 146,707 $ 333,533 $ 444,053
=========== =========== =========== ===========
UNITS USED TO COMPUTE PER UNIT AMOUNTS 170,916 170,916 170,916 170,916
NET INCOME PER UNIT $ 0.73 $ 0.86 $ 1.95 $ 2.60
=========== =========== =========== ===========
DISTRIBUTION PER UNIT $ 1.10 $ 1.10 $ 3.30 $ 5.20
=========== =========== =========== ===========
See accompanying notes to consolidated financial statements
FIRST WILKOW VENTURE
CONSOLIDATED STATEMENT OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(UNAUDITED)
Nine Months Ended September 30,
-------------------------------
2003 2002
------------ -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 333,533 $ 444,053
Noncash Items Included in Net Income:
Depreciation and Amortization 944,121 942,976
Net gain on disposal of land, building and improvements (94,002) 0
Increase (Decrease) In Accounts Payable and Accrued Expenses 326,287 (38,995)
Share of Partnership's Net Income (232,706) (444,336)
----------- -----------
Net Cash Provided by Operating Activities 1,277,233 903,698
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Partnership Investment Draws 603,677 1,397,403
Cash Proceeds from the sale of Real Estate 212,395 0
Collection of Loan Receivable 854,762 0
Investment in Partnerships (378,601) (3,094)
Investment in Land and Buildings (698,572) (272,991)
Increase (Decrease) in Minority Interest 20,249 (994,062)
Investment in Deferred Charges (280,507) (165,014)
----------- -----------
Net Cash Provided (Used) by Investing Activities 333,403 (37,758)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Cash Distribution to Partners (564,023) (888,763)
Proceeds from Mortgage Financing 207,036 0
Mortgage Principal Payments (121,731) (171,903)
----------- -----------
Net Cash Used by Financing Activities (478,718) (1,060,666)
----------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,131,918 (194,726)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 4,562,781 5,990,392
----------- -----------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 5,694,699 $ 5,795,666
=========== ===========
See accompanying notes to consolidated financial statements
FIRST WILKOW VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2003
1 - Financial Statements
The financial statements have been prepared in accordance with U.S.
generally accepted accounting principles. Under this method of accounting,
revenues are recorded when earned and expenses are recorded when incurred.
No provision for federal income taxes has been made since First Wilkow
Venture (the "Registrant") is a partnership and the partners report their
pro rata share of income or loss individually.
Reference is made to the Registrant's annual report for the year ended
December 31, 2002, for a description of other accounting principles and
additional details for the Registrant'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 - Recent Accounting Pronouncements
In January 2003, the FASB issued FASB Interpretation No. 46 ("FIN No. 46"),
"Consolidation of Variable Interest Entities". The objective of this
interpretation is to provide guidance on how to identify a variable interest
entity ("VIE") and determine whether the assets, liabilities,
non-controlling interests, and results of operations of a VIE need to be
included in a company's consolidated financial statements. A company that
holds variable interests in an entity will need to consolidate the entity if
the company's interest in the VIE is such that the company will absorb a
majority of the VIE's expected losses and/or receive a majority of the
entity's expected residual returns, if they occur. FIN No. 46 also requires
additional disclosures by primary beneficiaries and other significant
variable interest holders. In connection with any of the Registrant's
unconsolidated real estate investments that may qualify as a VIE, provisions
of this interpretation are effective at the end of the Registrant's fiscal
year beginning January 1, 2004. The Registrant is currently assessing its
unconsolidated real estate investments to determine the impact of any
potential consolidation requirements in applying FIN No. 46.
3 - Supplemental Schedule of Noncash Investing and Financing Activities
Proceeds from the sale of real estate to retire debt were $385,367 for the
nine months ended September 30, 2003.
4 - Subsequent Events
On October 10, 2003, the Registrant made a distribution to its partners in
the amount of $188,007.60, or $1.10 per unit, based on 170,916 units
outstanding at September 30, 2003.
On October 10, 2003, M & J Retail Limited Partnership received a
distribution related to the sale of Bayfair Mall Shopping Center in the
amount of $1,171,545.
FIRST WILKOW VENTURE
FORM 10-Q
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
SEPTEMBER 30, 2003
Overview
Reference is made to the Registrant's annual report for the year ended
December 31, 2002, for a discussion of the Registrant's business.
On January 10, 2003, the Registrant made a distribution to its partners
in the amount of $188,008, or $1.10 per unit.
In March of 2003, the Registrant received a payment of $123,638 on the
indebtedness from M&J/Dover Limited Partnership.
On April 10, 2003, the Registrant made a distribution to its partners
in the amount of $188,008, or $1.10 per unit.
On May 28, 2003, the Registrant invested $250,000 to obtain an 11.26%
interest in M & J/Louisville LLC which has a 33.33% interest in NW Acquisition
Company LLC which has a 90% interest in CMJ/NCT Louisville, LLC which has a 50%
interest in NCT Louisville LLC which owns National City Tower, an office
building located in Louisville, Kentucky.
In May of 2003, the Registrant received a payment of $1,373,038,
including $641,914 of accrued interest, to satisfy the indebtedness from The
Villas at Monterey Limited Partnership and Tango Bay of Orlando L.C.
On July 8, 2003, a property owned by M & J/Retail Limited Partnership,
Evergreen Commons, was sold for $660,000, resulting in net cash proceeds of
$212,395 after satisfaction of the outstanding mortgage obligation. The
transaction netted a gain on sale of $94,003.
On July 10, 2003, the Registrant made a distribution to its partners in
the amount of $188,007.60, or $1.10 per unit.
On September 29, 2003, Bayfair Mall Shopping Center was sold for
$37,000,000. M & J Retail Limited Partnership received a distribution related to
the sale in October 2003.
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, 2003 and 2002.
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: October 9, 2003
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 October 9, 2003.
By: Clifton J. Wilkow
------------------------------------
Clifton J. Wilkow, General Partner and
Executive Vice President of
M&J Wilkow, Ltd.
By: Thomas Harrigan
------------------------------------
Thomas Harrigan, Senior Vice President
of M&J Wilkow, Ltd.