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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------



For the quarterly period ended December 31, 2004



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 number 000-50161



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FORE HOLDINGS LLC

(Exact name of registrant as specified in its charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Illinois                                                       |  | 36-3974824                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)



100 Half Day Road;
Lincolnshire, Illinois 60069; 847-295-5000

(Address, including zip code, and telephone number, including area code, of
registrants principal executive offices)



N/A

(Former Name, Former Address & Former Fiscal Year, if changed since last report)



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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 periods
as 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 ̈



Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule
12b-2 of the Exchange Act).    YES  x    NO ̈



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##### Table of Contents

FORE HOLDINGS LLC



FORM 10-Q

FOR THE PERIOD ENDED

DECEMBER 31, 2004



INDEX



|           |  |                                                                                                   |  |     
|---------- |  | ------------------------------------------------------------------------------------------------- |  | ----
|           |  |                                                                                                   |  | PAGE
|PART I.    |  | FINANCIAL INFORMATION                                                                             |  |     
|           |  |                                                                                                  
|ITEM 1.    |  | Financial Statements:                                                                             |  |     
|           |  |                                                                                                  
|           |  | Consolidated Balance Sheets - December 31, 2004 (Unaudited), and September 30, 2004               |  | 3   
|           |  |                                                                                                  
|           |  | Consolidated Statements of Operations - Three Months Ended December 31, 2004 and 2003 (Unaudited) |  | 4   
|           |  |                                                                                                  
|           |  | Consolidated Statements of Cash Flows - Three Months Ended December 31, 2004 and 2003 (Unaudited) |  | 5   
|           |  |                                                                                                  
|           |  | Notes to Consolidated Financial Statements                                                        |  | 6   
|           |  |                                                                                                  
|ITEM 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations             |  | 9   
|           |  |                                                                                                  
|ITEM 3.    |  | Quantitative and Qualitative Disclosures about Market Risk                                        |  | 13  
|           |  |                                                                                                  
|ITEM 4.    |  | Controls and Procedures                                                                           |  | 14  
|           |  |                                                                                                  
|PART II.   |  | OTHER INFORMATION                                                                                 |  |     
|           |  |                                                                                                  
|ITEM 1.    |  | Legal Proceedings                                                                                 |  | 14  
|           |  |                                                                                                  
|ITEM 6.    |  | Exhibits                                                                                          |  | 14  
|           | 
|SIGNATURES |  | 15                                                                                               



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PART I. FINANCIAL INFORMATION



ITEM 1. Financial Statements



FORE HOLDINGS LLC

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)



|                                                   |  |                  |         |   |                   |   |         |  
|-------------------------------------------------- |  | ---------------- | ------- | - | ----------------- | - | ------- | -
|                                                   |  | December 31,2004 |         |   | September 30,2004 |  
|                                                   |  | (Unaudited)      |         |   |                   |  
|ASSETS                                             |  |                  |         |   |                   |   |         |  
|                                                   |  |                 
|Current Assets                                     |  |                  |         |   |                   |   |         |  
|Cash and cash equivalents                          |  | $                | 1,946   |   |                   | $ | 5,984   |  
|Prepaid expenses and other current assets          |  |                  | 1       |   |                   |   | 1       |  
|                                                   |  |                  |         |   |                   |   |         |  
|Total current assets                               |  |                  | 1,947   |   |                   |   | 5,985   |  
|                                                   |  |                  |         |   |                   |   |         |  
|Non-Current Assets                                 |  |                  |         |   |                   |   |         |  
|Property and equipment, net                        |  |                  |         |   |                   |   |         |  
|Land                                               |  |                  | 22,364  |   |                   |   | 22,364  |  
|Buildings and building improvements                |  |                  | 253,252 |   |                   |   | 253,252 |  
|Computer equipment                                 |  |                  | 1,978   |   |                   |   | 1,978   |  
|Furniture and equipment                            |  |                  | 7,248   |   |                   |   | 7,248   |  
|                                                   |  |                  |         |   |                   |   |         |  
|                                                   |  |                  | 284,842 |   |                   |   | 284,842 |  
|Less accumulated depreciation                      |  |                  | (64,657 | ) |                   |   | (62,878 | )
|                                                   |  |                  |         |   |                   |   |         |  
|Total property and equipment, net                  |  |                  | 220,185 |   |                   |   | 221,964 |  
|Related party deferred rent receivable (Note 6)    |  |                  | 3,620   |   |                   |   | 3,682   |  
|Due from owners                                    |  |                  | 1,376   |   |                   |   | 1,294   |  
|Deferred loan costs, net                           |  |                  | 828     |   |                   |   | 843     |  
|Investment in Hewitt Associates (Note 4)           |  |                  | 13,104  |   |                   |   | 15,861  |  
|Investment in Overlook Associates (Note 5)         |  |                  | 7,958   |   |                   |   | 3,042   |  
|                                                   |  |                  |         |   |                   |   |         |  
|Total non-current assets                           |  |                  | 247,071 |   |                   |   | 246,686 |  
|                                                   |  |                  |         |   |                   |   |         |  
|Total Assets                                       |  | $                | 249,018 |   |                   | $ | 252,671 |  
|                                                   |  |                  |         |   |                   |   |         |  
|LIABILITIES                                        |  |                  |         |   |                   |   |         |  
|                                                   |  |                 
|Current Liabilities                                |  |                  |         |   |                   |   |         |  
|Accounts payable and accrued expenses              |  | $                | 51      |   |                   | $ | 35      |  
|Current portion of long-term debt                  |  |                  | 9,508   |   |                   |   | 9,348   |  
|                                                   |  |                  |         |   |                   |   |         |  
|Total current liabilities                          |  |                  | 9,559   |   |                   |   | 9,383   |  
|                                                   |  |                  |         |   |                   |   |         |  
|Long-Term Liabilities  debt, less current portion |  |                  | 193,528 |   |                   |   | 195,966 |  
|                                                   |  |                  |         |   |                   |   |         |  
|Total Liabilities                                  |  | $                | 203,087 |   |                   | $ | 205,349 |  
|                                                   |  |                  |         |   |                   |   |         |  
|Commitments and Contingencies (Notes 7)            |  |                  |         |   |                   |   |         |  
|                                                   |  |                 
|Owners Capital                                    |  |                  |         |   |                   |   |         |  
|Paid-in capital and accumulated earnings           |  | $                | 45,110  |   |                   | $ | 46,501  |  
|Accumulated other comprehensive income             |  |                  | 821     |   |                   |   | 821     |  
|                                                   |  |                  |         |   |                   |   |         |  
|Total owners capital                              |  |                  | 45,931  |   |                   |   | 47,322  |  
|                                                   |  |                  |         |   |                   |   |         |  
|Total Liabilities and Owners Capital              |  | $                | 249,018 |   |                   | $ | 252,671 |  
|                                                   |  |                  |         |   |                   |   |         |  



The accompanying notes
are an integral part of these financial statements.



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FORE HOLDINGS LLC

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in thousands)



|                                                 |  |                                 |        |   |      |   |        |  
|------------------------------------------------ |  | ------------------------------- | ------ | - | ---- | - | ------ | -
|                                                 |  | Three Months Ended December 31, |       
|                                                 |  | 2004                            |        |   | 2003 |  
|Rental revenues from Hewitt Associates           |  | $                               | 5,755  |   |      | $ | 5,709  |  
|                                                 |  |                                 |        |   |      |   |        |  
|Operating expenses:                              |  |                                 |        |   |      |   |        |  
|Other operating expenses                         |  |                                 | 1,779  |   |      |   | 1,941  |  
|Selling, general and administrative expenses     |  |                                 | 34     |   |      |   | 354    |  
|Gain on sales of property                        |  |                                 |       |   |      |   | (377   | )
|                                                 |  |                                 |        |   |      |   |        |  
|Total operating expenses                         |  |                                 | 1,813  |   |      |   | 1,918  |  
|                                                 |  |                                 |        |   |      |   |        |  
|Operating income                                 |  |                                 | 3,942  |   |      |   | 3,791  |  
|                                                 |  |                                
|Other income (expenses), net:                    |  |                                 |        |   |      |   |        |  
|Interest expense                                 |  |                                 | (3,496 | ) |      |   | (3,646 | )
|Interest income                                  |  |                                 | 4      |   |      |   | 10     |  
|Equity in earnings of unconsolidated investments |  |                                 | 4,916  |   |      |   | 1,354  |  
|Other income (expense), net                      |  |                                 |       |   |      |   | (35    | )
|                                                 |  |                                 |        |   |      |   |        |  
|                                                 |  |                                 | 1,424  |   |      |   | (2,317 | )
|                                                 |  |                                 |        |   |      |   |        |  
|Income before owner distributions                |  | $                               | 5,366  |   |      | $ | 1,474  |  
|                                                 |  |                                 |        |   |      |   |        |  



The accompanying notes
are an integral part of these financial statements.



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FORE HOLDINGS LLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)



|                                                                                                         |  |                                |        |   |      |   |        |  
|-------------------------------------------------------------------------------------------------------- |  | ------------------------------ | ------ | - | ---- | - | ------ | -
|                                                                                                         |  | Three Months EndedDecember 31, |       
|                                                                                                         |  | 2004                           |        |   | 2003 |  
|Cash flows from operating activities:                                                                    |  |                                |        |   |      |   |        |  
|Income before owner distributions                                                                        |  | $                              | 5,366  |   |      | $ | 1,474  |  
|Adjustments to reconcile income before owner distributions to net cash provided by operating activities: |  |                                |        |   |      |   |        |  
|Depreciation                                                                                             |  |                                | 1,779  |   |      |   | 2,046  |  
|Amortization                                                                                             |  |                                | 15     |   |      |   | 15     |  
|Equity in earnings of unconsolidated investments                                                         |  |                                | (4,916 | ) |      |   | (1,354 | )
|Gain on sale of property                                                                                 |  |                                |       |   |      |   | (377   | )
|Changes in operating assets and liabilities:                                                             |  |                                |        |   |      |   |        |  
|Client receivables and unbilled work in process                                                          |  |                                |       |   |      |   | 607    |  
|Prepaid expenses and other current assets                                                                |  |                                |       |   |      |   | (7     | )
|Related party deferred rent receivable                                                                   |  |                                | 62     |   |      |   | 65     |  
|Accounts payable                                                                                         |  |                                | 16     |   |      |   | (327   | )
|Accrued expenses                                                                                         |  |                                |       |   |      |   | (1,545 | )
|                                                                                                         |  |                                |        |   |      |   |        |  
|Net cash provided by operating activities                                                                |  |                                | 2,322  |   |      |   | 597    |  
|                                                                                                         |  |                               
|Cash flows from investing activities:                                                                    |  |                                |        |   |      |   |        |  
|Distributions from equity investments                                                                    |  |                                |       |   |      |   | 581    |  
|Proceeds from sale of property                                                                           |  |                                |       |   |      |   | 488    |  
|                                                                                                         |  |                                |        |   |      |   |        |  
|Net cash provided by investing activities                                                                |  |                                |       |   |      |   | 1,069  |  
|                                                                                                         |  |                               
|Cash flows from financing activities:                                                                    |  |                                |        |   |      |   |        |  
|Capital contributions (distributions), net                                                               |  |                                | (4,000 | ) |      |   | 3      |  
|Taxes paid on behalf of owners                                                                           |  |                                | (82    | ) |      |   | (541   | )
|Repayments of long-term debt                                                                             |  |                                | (2,278 | ) |      |   | (2,129 | )
|                                                                                                         |  |                                |        |   |      |   |        |  
|Net cash (used in) financing activities                                                                  |  |                                | (6,360 | ) |      |   | (2,667 | )
|                                                                                                         |  |                                |        |   |      |   |        |  
|Net decrease in cash and cash equivalents                                                                |  |                                | (4,038 | ) |      |   | (1,001 | )
|                                                                                                         |  |                               
|Cash and cash equivalents, beginning of period                                                           |  |                                | 5,984  |   |      |   | 5,937  |  
|                                                                                                         |  |                                |        |   |      |   |        |  
|Cash and cash equivalents, end of period                                                                 |  | $                              | 1,946  |   |      | $ | 4,936  |  
|                                                                                                         |  |                                |        |   |      |   |        |  



The accompanying notes
are an integral part of these financial statements.



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FORE HOLDINGS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2004 AND 2003

(Unaudited)

(Dollars in thousands)



1. Description of Business



On April 29, 2004, Hewitt Holdings LLC changed its name to FORE Holdings LLC (FORE Holdings or the Company). FORE Holdings LLC and Subsidiaries
include the Property Entities which consist of Hewitt Properties I LLC, Hewitt Properties II LLC, Hewitt Properties III LLC, Hewitt Properties IV LLC, Hewitt Properties V LLC, Hewitt Properties VI LLC, Hewitt Properties VII LLC and The
Bayview Trust. Prior to July 1, 2003, Hewitt Associates, Inc. and its subsidiaries or its predecessor, Hewitt Associates LLC and Affiliates, (Hewitt Associates) was the principal operating subsidiary of the Company. Hewitt Associates
provides human resources outsourcing and consulting services. FORE Holdings is a holding company whose only business is to own, finance, lease and sell real estate assets.



FORE Holdings owns its real estate assets directly and through its Property Entities. Substantially all of the activities of the Property
Entities involve assets that are leased to Hewitt Associates on terms which at inception, were intended to be comparable to those which would have been obtained in an arms length transaction. The investments in these properties were funded
through capital contributions of FORE Holdings owners (individuals who own limited liability company interests of FORE Holdings) and third-party debt. The debt is a non-recourse obligation of FORE Holdings Property Entities and is not an
obligation of, nor guaranteed by, Hewitt Associates. The properties the Company owns are located in Illinois, Florida, and Texas. FORE Holdings has one business segment consisting of its real estate operations.



2. Summary of Significant Accounting Policies



Basis of Presentation



The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission for quarterly reports on Form 10-Q. In the opinion of management, these financial statements include all adjustments necessary to present fairly the financial position, results of operations and cash flows as of
December 31, 2004, and for all periods presented. All adjustments made have been of a normal and recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. The Company believes that the disclosures included are adequate and provide a fair presentation of interim period results. Interim financial statements are not necessarily indicative of the
financial position or operating results for an entire year. These interim financial statements should be read in conjunction with the audited financial statements and the notes thereto, together with managements discussion and analysis of
financial condition and results of operations, included in the Companys Form 10-K for the fiscal year ended September 30, 2004, as filed with the Securities and Exchange Commission. Certain previously reported amounts have been reclassified to
conform to the current period presentation.



The consolidated financial
statements are prepared on the accrual basis of accounting. The significant accounting policies are summarized below:



Principles of Consolidation



The accompanying consolidated financial statements reflect the operations of the Company and its majority owned subsidiaries after elimination of intercompany
transactions and profits.



Investments in less than 50%-owned affiliated
companies over which the Company has the ability to exercise significant influence are accounted for using the equity method of accounting. The Company applies the equity



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method of accounting and does not consolidate its 51% interest in Overlook Associates, an Illinois partnership, as FORE Holdings does not exercise control
over this partnership. Overlook Associates owns and operates commercial office buildings and develops and sells vacant land in Lincolnshire, Illinois.



Revenue Recognition



The Company leases its real estate properties pursuant to operating leases. The Company records rental income for the full term of each lease on a straight-line basis. Generally, the leases provide for lessee
occupancy during periods for which no rent is due or where minimum rent payments increase during the term of the lease. Accordingly, a receivable is recorded from lessees for the current difference between the straight-line rent and the rent that is
contractually due from the lessee. During the three months ended December 31, 2004, 100% of the Companys rental income was derived from leases with Hewitt Associates.



Use of Estimates



The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, the accounting for the allowance for doubtful accounts,
depreciation and amortization, asset impairment, and any contingencies. Although these estimates are based on managements best knowledge of current events and actions that the Company may undertake in the future, actual results may be
different from the estimates



3. Deferred Loan Costs



At December 31, 2004 and September 30, 2004, intangible assets with definite useful lives
include deferred loan costs with an estimated useful life of 20 years.



|                         |  |                  |       |   |                   |   |       |  
|------------------------ |  | ---------------- | ----- | - | ----------------- | - | ----- | -
|                         |  | December 31,2004 |       |   | September 30,2004 |  
|Deferred loan costs      |  |                  |       |   |                   |   |       |  
|Gross carrying amount    |  | $                | 1,217 |   |                   | $ | 1,217 |  
|Accumulated amortization |  |                  | (389  | ) |                   |   | (374  | )
|                         |  |                  |       |   |                   |   |       |  
|Net                      |  | $                | 828   |   |                   | $ | 843   |  
|                         |  |                  |       |   |                   |   |       |  



The Company tests the deferred loan
costs for impairment whenever indicators of impairment arise. During the three months ended December 31, 2004 and for the year ended September 30, 2004, no impairments on deferred loan costs were recognized.



Amortization expense related to the deferred loan costs, the only definite-lived intangible
asset, was $15 for both the three months ended December 31, 2004 and 2003.



Estimated amortization expense related to deferred loan costs at September 30, 2004, is $62 in each of the five years that end September 30, 2008 and $533 thereafter.



4. Investment in Hewitt Associates



As of December 31, 2004 and September 30, 2004, the Company owned approximately 1% and 2%, respectively, of Hewitt Associates, Inc. The investment in Hewitt Associates
was accounted for using the equity method of accounting for the three months ended December 31, 2003 and using the cost method of accounting for the three months ended December 31, 2004. Prior to January 28, 2004, the majority of directors on Hewitt
Associates Board held limited liability company interests in the Company. On January 28, 2004, the shareholders of Hewitt Associates elected a majority of independent directors to its Board, at which time the Company began accounting for the
investment in Hewitt Associates using the cost method of accounting. The investment is carried at its historical cost and is reduced by distributions to the Companys owners as they occur. The fair market value of the investment in Hewitt
Associates approximated $54,802 at December 31, 2004.





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5. Related Party Transactions



The Company entered into real estate operating leases with Hewitt Associates and its subsidiaries on terms which at inception, were intended
to be comparable to those which would have been obtained in an arms length transaction. The investments in the properties were funded through capital contributions by FORE Holdings owners and third-party debt. The debt is reflected on
the Companys balance sheet and is not an obligation of, nor guaranteed by, Hewitt Associates.



Generally, the leases provide for lessee occupancy during periods for which no rent is due or where minimum rent payments increase during the term of the lease. The Company records rental income for the full term of
each lease on a straight-line basis. Accordingly, a receivable is recorded for the current difference between the straight-line rent and the rent that is contractually due from the lessee. As of December 31, 2004 and September 30, 2004, the deferred
rent receivable with Hewitt Associates was $3,620 and $3,682, respectively.



From May 31, 2002, through September 30, 2007, Hewitt Associates LLC, a subsidiary of Hewitt Associates, is providing certain support services to FORE Holdings, primarily in the financial, real estate and legal departments, as may be
requested by FORE Holdings from time to time. FORE Holdings will pay Hewitt Associates LLC an annual fee of $50 for basic services and an additional fee for additional services on a time-and-materials basis. Fees for services Hewitt Associates LLC
provided under the services agreement totaled $22 and $35 for the three months ended December 31, 2004 and 2003, respectively. All such fees have been paid by FORE Holdings through December 31, 2004.



6. Legal Proceedings



The Company is not party to any legal proceedings that are expected to have a material adverse effect on the Companys business,
financial condition or results of operations. In the ordinary course of business, the Company is routinely audited and subject to inquiries by government and regulatory agencies.



7. Other Comprehensive Income



The following table presents the after-tax components of the Companys other comprehensive income for the periods presented:



|                                             |  |                                |       |      |   |      
|-------------------------------------------- |  | ------------------------------ | ----- | ---- | - | -----
|                                             |  | Three Months EndedDecember 31,
|                                             |  | 2004                           |       | 2003
|Net Income (loss) before owner distributions |  | $                              | 5,366 |      | $ | 1,474
|Other comprehensive income:                  |  |                                |       |      |   |      
|Foreign currency translation adjustments     |  |                                |      |      |   | 589  
|                                             |  |                                |       |      |   |      
|Accumulated other comprehensive income       |  | $                              | 5,366 |      | $ | 2,063
|                                             |  |                                |       |      |   |      



8. Subsequent Event



On January 28, 2005, Hewitt Properties I LLC, Hewitt Properties II LLC, Hewitt Properties
III LLC, and Hewitt Properties IV LLC, together the Sellers, entered into an Agreement of Sale and Purchase to sell certain of the properties the Sellers own for $299,000. All of the lease obligations of these properties would be
assigned to the buyer at closing. The transaction is expected to close on April 28, 2005 and is contingent upon due diligence which must be completed by the buyer by March 29, 2005. The buyer can terminate the agreement without liability by
delivering written notice to the Sellers prior to March 29, 2005.





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ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations



The following information should be read in conjunction with the information contained in our consolidated financial statements and related notes presented earlier in
this Quarterly Report on Form 10-Q. Please also refer to our consolidated financial statements and related notes and the information under the heading Managements Discussion and Analysis of Financial Condition and Results of
Operations included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission for additional information. In addition to historical information, this Quarterly Report on Form 10-Q may contain forward-looking
statements that involve risks, uncertainties and assumptions, which could cause actual results to differ materially from managements expectations. Please see additional risks and uncertainties described below and in the Notes Regarding
Forward-Looking Statements which appears later in this section.



We use the terms FORE Holdings and the Company to refer to FORE Holdings LLC and its subsidiaries, formerly known as Hewitt Holdings LLC and subsidiaries. We use the term Hewitt Associates to refer to
the business of Hewitt Associates, Inc. and its subsidiaries. We use the term Property Entities to refer to FORE Holdings wholly-owned subsidiaries, Hewitt Properties I LLC, Hewitt Properties II LLC, Hewitt Properties III LLC,
Hewitt Properties IV LLC, Hewitt Properties V LLC, Hewitt Properties VI LLC, Hewitt Properties VII LLC and The Bayview Trust.



We use the term owner to refer to the individuals who are current or retired members of FORE Holdings. These individuals (with the exception of our retired
owners) became employees of Hewitt Associates upon the completion of Hewitt Associates transition to a corporate structure on May 31, 2002.



All references to years, unless otherwise noted, refer to our fiscal years, which end on September 30. For example, a reference to 2005or fiscal
2005 means the twelve-month period that ends September 30, 2005. All references to percentages contained in Managements Discussion and Analysis of Financial Condition and Results of Operations refer to calculations based on
the amounts in our consolidated financial statements, presented earlier in this Quarterly Report on Form 10-Q. Certain prior period amounts have been reclassified to conform with the current year presentation.



Overview



FORE Holdings only business is owning, financing and leasing real estate assets which are primarily used by Hewitt Associates in
operating its business. All of the leases with Hewitt Associates are triple net leases. The properties the Company owns are located in Illinois, Florida and Texas. Rentable square footage consists of approximately 1,145,000 square feet in
Lincolnshire, Illinois, approximately 310,000 square feet in Orlando, Florida and approximately 414,000 square feet in The Woodlands, Texas. FORE Holdings has one business segment consisting of its real estate operations.



The Company also has an approximate 1% ownership interest in Hewitt Associates. These shares
are held by the Company on behalf of certain owners who reside outside the United States. Prior to January 28, 2004, the majority of directors on Hewitt Associates Board were interest holders of the Company. On January 28, 2004, FORE Holdings
began accounting for its investment in Hewitt Associates using the cost method of accounting.



Consolidated Financial Highlights



Rental revenues remained relatively flat for the three months ended December 31, 2004 over the comparable prior year period. All of our leases with Hewitt Associates, our only tenant, are triple net leases. Additionally, rent is recorded on
a straight-line basis in accordance with accounting principles generally accepted in the United States of America.



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Operating income increased by 4% in the three months ended December 31, 2004, respectively, over the comparable prior
year period. The increase is primarily a result of decreases in depreciation expense related to furniture and equipment and computer hardware, audit fees, and Securities and Exchange filing fees, offset by a sale of land in the prior year period
with no such sale in the current year period and an increase in real estate taxes.



Critical Accounting Policies and Estimates



Revenues



We lease our real estate properties pursuant to operating leases. We
record rental income for the full term of each lease on a straight-line basis, even if there are periods for which no rent is due or where minimum rental payments increase during the term of the lease. As such, the Company records a receivable from
lessees for the difference between the straight-line rent and the rent that is contractually due from the lessees.



Long-Lived Assets Held and Used



We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If the
undiscounted future cash flows from the long-lived asset are less than the carrying value, we recognize a loss equal to the difference between the carrying value and the discounted future cash flows of the asset.



Our estimate of future cash flows will be based on our experience, knowledge, and typically
third-party advice or market data. However, these estimates can be affected by other factors and economic conditions that can be difficult to predict.



Estimates



Various assumptions and other factors underlie the determination of significant accounting estimates. The process of determining significant estimates is fact specific and takes into account factors such as historical
experience, known facts, current and expected economic conditions. We periodically reevaluate these significant factors and make adjustments when facts and circumstances dictate, however, actual results may differ from estimates.



Historical Results of Operations



The following table sets forth our historical results of operations as a percentage of net
revenues. The information for each of the three month periods is derived from unaudited consolidated financial statements which were prepared on the same basis as the annual consolidated financial statements. The information for the three months
ended December 31, 2004 and 2003 contains all adjustments, consisting only of normal recurring adjustments, necessary, in the opinion of management, to fairly present this information. Operating results for any period are not necessarily indicative
of results for any future periods.



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Three Months Ended December 31, 2004 and 2003



|                                             |  |                                |       |                |                     |        |        |                                                |   |       |   |  |        |   |  |       |   |  |       |  
|-------------------------------------------- |  | ------------------------------ | ----- | -------------- | ------------------- | ------ | ------ | ---------------------------------------------- | - | ----- | - |  | ------ | - |  | ----- | - |  | ----- | -
|                                             |  | Three Months EndedDecember 31, |       |                | Increase/(Decrease) |        |        | % of Net RevenueThree Months EndedDecember 31, |  
|                                             |  | 2004                           |       | 2003           |                     |        | Amount |                                                |   | %     |   |  | 2004   |   |  | 2003  |  
|                                             |  |                                |       | (in thousands) |                     |        |        |                                                |   |       |   |  |        |   |  |       |  
|Rental revenues from Hewitt Associates       |  | $                              | 5,755 |                | $                   | 5,709  |        |                                                | $ | 46    |   |  | 0.8    | % |  | 100.0 | % |  | 100.0 | %
|                                             |  |                                |       |                |                     |        |        |                                                |   |       |   |  |        |   |  |       |   |  |       |  
|Operating expenses:                          |  |                                |       |                |                     |        |        |                                                |   |       |   |  |        |   |  |       |   |  |       |  
|Other operating expenses                     |  |                                | 1,779 |                |                     | 1,941  |        |                                                |   | (162  | ) |  | (8.3   | ) |  | 30.9  |   |  | 34.0  |  
|Selling, general and administrative expenses |  |                                | 34    |                |                     | 354    |        |                                                |   | (320  | ) |  | (90.4  | ) |  | 0.6   |   |  | 6.2   |  
|Gain on sales of property                    |  |                                |      |                |                     | (377   | )      |                                                |   | 377   |   |  | (100.0 | ) |  |      |   |  | (6.6  | )
|                                             |  |                                |       |                |                     |        |        |                                                |   |       |   |  |        |   |  |       |   |  |       |  
|Total operating expenses                     |  |                                | 1,813 |                |                     | 1,918  |        |                                                |   | (105  | ) |  | (5.5   | ) |  | 31.5  |   |  | 33.6  |  
|                                             |  |                                |       |                |                     |        |        |                                                |   |       |   |  |        |   |  |       |   |  |       |  
|Operating income                             |  |                                | 3,942 |                |                     | 3,791  |        |                                                |   | 151   |   |  | 4.0    |   |  | 68.5  |   |  | 66.4  |  
|                                             |  |                                |       |                |                     |       
|Other income (expenses), net                 |  |                                | 1,424 |                |                     | (2,317 | )      |                                                |   | 3,741 |   |  | (161.5 | ) |  | 24.7  |   |  | (40.6 | )
|                                             |  |                                |       |                |                     |        |        |                                                |   |       |   |  |        |   |  |       |   |  |       |  
|Income before owner distributions            |  | $                              | 5,366 |                | $                   | 1,474  |        |                                                | $ | 3,892 |   |  | 264.0  | % |  | 93.2  | % |  | 25.8  | %
|                                             |  |                                |       |                |                     |        |        |                                                |   |       |   |  |        |   |  |       |   |  |       |  



Rental Revenues



Rental revenues remained relatively flat at $5,755 in the three months ended December 31,
2004, compared to $5,709 in the comparable prior year period. All of the leases with Hewitt Associates, our only tenant, are triple net leases. Additionally, rent is recorded on a straight-line basis in accordance with accounting principles
generally accepted in the United States of America.



Other Operating
Expenses



Other operating expenses (which include depreciation and
amortization, and property taxes) decreased by 8.3% to $1,779 in the three months ended December 31, 2004 compared to $1,941 in the comparable prior year period. The decrease is primarily a result of a decrease in depreciation expense related to
furniture and equipment and computer hardware offset by an increase in real estate taxes.



Selling, General and Administrative Expenses



Selling, general and administrative expenses (which includes legal and audit fees) decreased 90.4% to $34 for the three months ended December 31, 2004 compared to $354 in the comparable prior year period. The decrease is primarily a result
of a decrease in audit fees, securities and exchange filing fees, legal fees and a state tax refund in the current quarter with no such refund in the comparative prior year period.



Gain on Sales of Property



Gain on the sales of property (which includes gains on the sales of land and buildings) decreased 100% for the three months ended December 31, 2004 compared to $377 in
the comparable prior year period. The decrease is primarily a result of the sale of land in the three months ended December 31, 2003, with no such sale in the current year period.



Other Income (Expenses), Net



Other income (expenses), net (which primarily includes interest expense, interest income and income from equity investments) totaled $1,424 of other income, net in the
three months ended December 31, 2004, compared to other expense, net of $2,317 in the comparable prior year period. The change is primarily a result of an increase in equity earnings from our unconsolidated investment in Overlook Associates
resulting from a sale of property owned by Overlook Associates, slightly offset by a decrease in interest expense as a result of lower principal balances on the debt due to continued payments.



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Liquidity and Capital Resources



We have historically funded our growth and working capital requirements with funds from operations, capital contributions from owners,
credit facilities, credit tenant notes and term notes.



|                                                 |  |                                |        |   |      |   |        |  
|------------------------------------------------ |  | ------------------------------ | ------ | - | ---- | - | ------ | -
|                                                 |  | Three Months EndedDecember 31, |       
|Summary of Cash Flows                            |  | 2004                           |        |   | 2003 |  
|Cash provided by operating activities            |  | $                              | 2,322  |   |      | $ | 597    |  
|Cash provided by investing activities            |  |                                |       |   |      |   | 1,069  |  
|Cash used in financing activities                |  |                                | (6,360 | ) |      |   | (2,667 | )
|                                                 |  |                                |        |   |      |   |        |  
|Net decrease in cash and cash equivalents        |  |                                | (4,038 | ) |      |   | (1,001 | )
|Cash and cash equivalents at beginning of period |  |                                | 5,984  |   |      |   | 5,937  |  
|                                                 |  |                                |        |   |      |   |        |  
|Cash and cash equivalents at end of period       |  | $                              | 1,946  |   |      | $ | 4,936  |  
|                                                 |  |                                |        |   |      |   |        |  



For the three months ended December
31, 2004 and 2003, cash provided by operating activities was $2,322 and $597, respectively. The increase in cash flows provided by operating activities between the three months ended December 31, 2004 and 2003 is primarily a result of the payment of
accrued expenses and accounts payable in the prior year resulting from the timing of payments.



For the three months ended December 31, 2004, there were no cash flows from investing activities compared to $1,069 of cash provided by investing activities in the comparable prior year period. The decrease is
primarily a result of distributions received from equity investments and proceeds from the sale of land in 2003 with no such activities in the current year quarter.



For the three months ended December 31, 2004 and 2003, cash used in financing activities was $6,360 and $2,667, respectively. The increase
in cash used in financing activities is primarily a result of a $4,000 distribution to owners in the three months ended December 31, 2004 with no such payment in the comparable prior year period and an increase in principal payments of debt, offset
by a decrease in taxes paid on behalf of owners.



At December 31, 2004, our
cash and cash equivalents were $1,946, as compared to $4,936 at December 31, 2003, a decrease of $2,990 or 61%. Cash and cash equivalents decreased primarily as result of a $4,000 distribution to owners in the three months ended December 31, 2004.



Significant ongoing commitments consist primarily of leases and debt.



We have entered into real estate operating leases with Hewitt Associates and
its subsidiaries which, at inception, were on terms comparable to those that would have been obtained in an arms length transaction. The investments in the properties were funded through capital contributions by FORE Holdings owners and
third-party debt. The properties and debt are reflected on our balance sheets and the debt is not an obligation of, nor guaranteed by, Hewitt Associates.



We issued secured credit tenant notes to various noteholders on several dates between October 1997 through May 1999, totaling $203,036 as of December 31, 2004, bearing
interest ranging from 6.52% to 7.13%. The principal on each note is amortized monthly between 15 and 20 years from November 1998 through February 2020.



A number of our debt agreements contain financial and other covenants including, among others, covenants restricting our ability to incur indebtedness and create liens,
to sell the assets or stock of a collateralized subsidiary, and to pay dividends or make distributions to FORE Holdings owners which would result in a default. At December 31, 2004, we were in compliance with the terms of our debt agreements.



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We believe the cash on hand, together with funds from operations and other current assets will satisfy our expected
working capital, contractual obligations, capital expenditures, and investment requirements for at least the next 12 months.



Note Regarding Forward-Looking Statements



This report contains forward-looking statements relating to our operations that are based on our current expectations, estimates and projections. Words such as
anticipates, believes, continues, estimates, expects, goal, intends, may, opportunity, plans, potential,
projects, forecasts, should, will, and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks,
uncertainties, and assumptions that are difficult to predict. Forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Actual outcomes and results may differ materially from what is expressed or
forecasted in these forward-looking statements. As a result, these statements speak only as of the date they were made.



Our actual results may differ from the forward-looking statements for many reasons, including:



| |  | A prolonged economic downturn could have a material adverse effect on our results.
|- |  | ----------------------------------------------------------------------------------



| |  | Our ability to successfully manage our significant capital investments.
|- |  | -----------------------------------------------------------------------



| |  | The cyclical nature of the real estate industry and possible oversupply of, or reduced demand for, space in our core markets could have a material adverse effect on our results.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Changes in interest rates and the availability of financing.
|- |  | ------------------------------------------------------------



| |  | Competition from other properties in our core markets.
|- |  | ------------------------------------------------------



| |  | Further declines in the overall economic activity in our core markets.
|- |  | ----------------------------------------------------------------------



| |  | The bankruptcy, insolvency or credit deterioration of our tenant.
|- |  | -----------------------------------------------------------------



| |  | The need to periodically renovate, repair and re-lease space and the costs thereof.
|- |  | -----------------------------------------------------------------------------------



| |  | Increases in maintenance, insurance and operating costs.
|- |  | --------------------------------------------------------



| |  | Civil unrest, acts of terrorism, earthquakes and other natural disasters or acts of God that may result in uninsured losses.
|- |  | ----------------------------------------------------------------------------------------------------------------------------



| |  | Changes in the availability and affordability of insurance on commercially reasonable terms, in levels of coverage for our real estate assets and in exclusions from insurance
policies for our real estate assets could result in increased premium costs.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Changes in market rental rates and our ability to rent space on favorable terms could adversely impact our results.
|- |  | -------------------------------------------------------------------------------------------------------------------



| |  | Changes in Hewitt Associates performance may affect the value of our investment in Hewitt Associates, thus impacting our results.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------



We undertake no obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or for any other reason.



Item 3. Quantitative and Qualitative Disclosures about Market Risks



We are exposed to market risk related to interest rates primarily through our long-term debt and on our portfolio of cash and cash equivalents.



At December 31, 2004, 100% of our long-term debt was at a fixed rate. Our fixed rate debt consists of our secured credit tenant notes. At
December 31, 2004, a 10 percent decrease in the levels of interest rates with all other variables held constant would result in an increase in the fair market value of our fixed rate debt of $6,695. At December 31, 2004, a 10 percent increase in the
levels of interest rates with all other variables held constant would result in a decrease in the fair market value of our fixed rate debt of $6,430.



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Our portfolio of cash and cash equivalents is designed for safety of principal and liquidity. We maintain a portfolio of
cash equivalents in the highest rated money market investments and continuously monitor the investment ratings. The investments are subject to inherent interest rate risk as investments mature and are reinvested at current market interest rates.



Item 4. Controls and Procedures



Our Chairman and
our chief financial officer has concluded, based on their evaluation as of the end of the period covered by this Quarterly Report, that the Companys disclosure controls and procedures (as defined in the Securities Exchange Act of
1934 Rules 13a-15(e) and 15d-15(e)) are effective to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time
periods specified in the Securities and Exchange Commissions rules and forms. There were no changes in the Companys internal control over financial reporting during the three months ended December 31, 2004, that have materially affected,
or reasonably likely to materially affect, the Companys internal controls over financial reporting.



PART II. OTHER INFORMATION



ITEM 1. Legal Proceedings



The
Company is occasionally subject to lawsuits and claims arising out of the normal conduct of business. Management does not expect the outcome of pending claims to have a material adverse affect on the business, financial condition or results of
operations.



ITEM 5. Other Information



On
January 28, 2005, Hewitt Properties I LLC, Hewitt Properties II LLC, Hewitt Properties III LLC, and Hewitt Properties IV LLC, collectively the Sellers, entered into an Agreement of Sale and Purchase (the Sale Agreement) with
Warmack JDG Investment II, LLC (Buyer), pursuant to which Buyer would purchase certain of the properties owned by the Sellers for a purchase price of $299,000,000. All of the lease obligations of these properties would be assigned to the
Buyer at closing. The transaction is expected to close on April 28, 2005 and is contingent upon due diligence which must be completed by the Buyer by March 29, 2005. The Buyer can terminate the agreement without liability by delivering written
notice to the Sellers prior to March 29, 2005. A copy of the Sale Agreement is attached hereto as Exhibit 2.1.



ITEM 6. Exhibits



| | a. | Exhibits.
| | -- | ---------



| | 2.1 | Agreement of Sale and Purchase between Hewitt Properties I LLC, Hewitt Properties II LLC, Hewitt Properties III LLC, Hewitt Properties IV LLC and Warmack JDG Investment II, LLC.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 31.1 | Certification of Chief Executive Officer pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 31.2 | Certification of Chief Financial Officer pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



ITEMS 2, 3 And 4 Are Not Applicable And Have
Been Omitted



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SIGNATURES



Pursuant to the requirements 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.



|                       |  |                   |  |                  
|---------------------- |  | ----------------- |  | -----------------
|                       |  | FORE HOLDINGS LLC
|                       |  | (Registrant)     
|                       |  |                  
|Date: February 9, 2005 |  | By:               |  | /s/ David L. Hunt
|                       |  |                   |  | David L. Hunt    
|                       |  |                   |  | Chairman         



15