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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 June 30, 2004
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 Number 0-7798
FIRST WILKOW VENTURE, A LIMITED PARTNERSHIP
(Exact Name of Registrant as Specified in Its Charter)
Illinois 36-6169280
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(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
June 30,
2004 December 31,
(Unaudited) 2003
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ASSETS
REAL ESTATE AND INVESTMENTS IN REAL ESTATE PARTNERSHIPS
Real Estate:
Land $ 4,030,069 $ 4,030,069
Buildings and Improvements 32,044,679 31,659,299
Fixtures and Equipment 23,511 46,999
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Total 36,098,259 35,736,367
Less-Accumulated Depreciation 13,879,182 13,709,271
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Net Real Estate 22,219,077 22,027,096
Investments in Real Estate Partnerships 5,607,704 7,241,842
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Total 27,826,781 29,268,938
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LOANS RECEIVABLE 86,963 86,963
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OTHER ASSETS
Cash and Cash Equivalents 7,884,953 6,602,360
Certificates of Deposit - Restricted 250,000 250,000
Receivables and Prepaid Expenses 935,723 881,089
Deposits 870,400 1,020,331
Deferred Charges 1,133,377 1,196,706
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Total 11,074,453 9,950,486
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TOTAL ASSETS $38,988,197 $39,306,387
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
MORTGAGES PAYABLE $20,450,120 $20,516,241
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OTHER LIABILITIES
Accounts Payable and Accrued Expenses 208,210 345,792
Accrued Property Taxes 1,333,343 1,301,996
Deferred State Income Taxes 170,000 170,000
Security Deposits and Prepaid Rent 560,157 506,740
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Total 2,271,710 2,324,528
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MINORITY INTEREST 2,869,589 3,151,441
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PARTNERS' CAPITAL (170,916 units authorized and issued) 13,396,778 13,314,177
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TOTAL LIABILITIES AND PARTNERS' CAPITAL $38,988,197 $39,306,387
=========== ===========
Note: Balance Sheet at 12/31/03 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 SIX MONTHS ENDED JUNE 30, 2004 AND 2003
(UNAUDITED)
Three Months Six Months
Ended June 30, Ended June 30,
---------------------------- ----------------------------
2004 2003 2004 2003
----------- ----------- ----------- -----------
REVENUES
Rental Income $ 1,980,759 $ 2,124,798 $ 4,313,492 $ 4,130,690
Interest Income 16,724 16,887 36,357 47,279
Gain (Loss) on disposal of real estate and other revenue 5,970 1,027 106,697 10,433
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2,003,453 2,142,712 4,456,546 4,188,402
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PARTNERSHIP INVESTMENTS' INCOME
Share of Net Income 371,657 72,373 700,691 175,563
----------- ----------- ----------- -----------
EXPENSES
Operating Expenses 934,794 960,178 1,917,324 1,980,100
Real Estate Taxes 336,850 333,238 665,774 574,415
Depreciation and Amortization 300,107 303,314 640,952 630,989
Interest Expense 396,960 410,387 799,887 822,083
General and Administrative 66,338 38,833 80,488 70,397
----------- ----------- ----------- -----------
2,035,049 2,045,950 4,104,425 4,077,984
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE MINORITY INTEREST 340,061 169,135 1,052,812 285,981
MINORITY INTEREST IN
SUBSIDIARIES' NET INCOME (LOSS) (101,465) (34,422) (218,179) (78,017)
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 238,596 $ 134,713 $ 834,633 $ 207,964
=========== =========== =========== ===========
UNITS USED TO COMPUTE PER UNIT AMOUNTS 170,916 170,916 170,916 170,916
NET INCOME (LOSS) PER UNIT $ 1.40 $ 0.79 $ 4.88 $ 1.22
=========== =========== =========== ===========
DISTRIBUTION PER UNIT $ 3.30 $ 1.10 $ 4.40 $ 2.20
=========== =========== =========== ===========
See accompanying notes to consolidated financial statements
FIRST WILKOW VENTURE
CONSOLIDATED STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2004 AND 2003
(UNAUDITED)
Six Months Ended June 30,
----------------------------
2004 2003
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CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 834,633 $ 207,964
Noncash Items Included in Net Income:
Depreciation and Amortization 640,952 630,989
Income allocated to minority interests 218,179 78,017
Decrease (Increase) in operating assets:
Receivables and Prepaid Expenses - net (54,634) 568,481
Deposits 149,931 (221,699)
Decrease (Increase) in operating liabilities:
Accounts Payable and Accrued Expenses (137,582) 153,637
Accrued Property Taxes 31,347 (6,504)
Security Deposits and Prepaid Rent 53,417 (46,794)
Share of Partnership Investments' Net Income (700,691) (175,563)
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Net Cash Provided by Operating Activities 1,035,552 1,188,528
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CASH FLOWS FROM INVESTING ACTIVITIES
Partnership Investment Draws 2,442,830 443,072
Collection of Loan Receivable 0 854,762
Investment in Partnerships (108,002) (250,000)
Investment in Land and Buildings and Improvements (699,209) (253,352)
Increase (Decrease) in Minority Interest (500,031) (86,782)
Investment in Deferred Charges (70,396) (131,096)
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Net Cash Provided by Investing Activities 1,065,192 576,604
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CASH FLOWS FROM FINANCING ACTIVITIES
Cash Distribution to Partners (752,030) (376,015)
Proceeds from Mortgage Financing 55,176 82,102
Mortgage Principal Payments (121,297) (85,146)
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Net Cash Used by Financing Activities (818,151) (379,059)
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NET INCREASE IN CASH AND CASH EQUIVALENTS 1,282,593 1,386,073
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 6,602,360 4,562,781
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CASH AND CASH EQUIVALENTS - END OF PERIOD $ 7,884,953 $ 5,948,854
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See accompanying notes to consolidated financial statements
FIRST WILKOW VENTURE
FORM 10-Q
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
JUNE 30, 2004
Overview
Reference is made to the Registrant's annual report for the year ended
December 31, 2003, for a discussion of the Registrant's business.
On January 10, 2004, the Registrant made a distribution to its partners
in the amount of $188,008, or $1.10 per unit.
On February 24, 2004, Tower Square Shopping Center, the sole asset of M
& J/Eden Prairie Limited Partnership, was sold for $13,100,000, resulting in net
cash proceeds of $4,983,000, after satisfaction of the outstanding mortgage
obligation. The transaction netted a gain on sale of $4,285,000. Through June
30, 2004, the Registrant received a distribution related to the sale of
$353,000.
On April 10, 2004 the Registrant made a distribution to its partners in
the amount of $564,022, or $3.30 per unit.
On June 11, 2004, Shops at Clarks Pond, the sole asset of Shops at
Clark's Pond LLC, was sold for $20,050,000, resulting in net cash proceeds of
$3,848,000. The transaction netted a gain on sale of $3,087,000. M & J/Retail
received a distribution related to the sale via its interest in Fulcrum, LLC.
On June 25, 2004, the Registrant exercised its option to purchase the
units of M & J/LaSalle Associates from an investor.
FIRST WILKOW VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2004
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.
In December 2003, the FASB issued Interpretation No. 46R (FIN 46R),
"Consolidation of Variable Interest Entities," which replaces FIN 46,
"Consolidation of Variable Interest Entities," which was issued in January
2003. 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. 46R 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 beginning of the Registrant's fiscal year beginning
January 1, 2005. The Registrant is currently assessing its unconsolidated
real estate investments to determine the impact of any potential
consolidation requirements in applying FIN No. 46R.
Reference is made to the Registrant's annual report for the year ended
December 31, 2003, 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 - Subsequent Events
On July 1, 2004, the Registrant invested $215,000 to obtain a 7.28%
interest in M & J/2121 K Street, LLC, which owns a 22% interest in 2121 K
Street, LLC, which owns an 8-story office building located in Washington
D.C.
On July 10, 2004, the Registrant made a distribution to its partners in
the amount of $188,008, or $1.10 per unit, based on 170,916 units
outstanding as of June 30, 2004.
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, 2004 and 2003.
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, 2004
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, 2004.
By: Clifton J. Wilkow
--------------------------------
Clifton J. Wilkow, General Partner and
Executive Vice President of
M&J Wilkow, Ltd.
By: Thomas Harrigan
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Thomas Harrigan, Senior Vice President
of M&J Wilkow, Ltd.