SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
Of the Securities Exchange Act of 1934
For Quarter Ended June 30, 2001 Commission file number 0-11578
AMERICAN REPUBLIC REALTY FUND I
(Exact name of registrant as specified in its charter)
WISCONSIN 39-1421936
(State or other jurisdiction of (IRS Employer
Incorporation or organization Identification
Number)
6210 Campbell Road Suite 140
Dallas, Texas 75248
(Address of principal executive offices)
Registrant's telephone number, including area code: (972)380-8000.
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: Y No:
REGISTRANT IS A LIMITED PARTNERSHIP
TABLE OF CONTENTS
Item 1. Financial Statements
The following Unaudited financial statements are filed herewith:
Consolidated Balance Sheet as of June 30, 2001 and
December 31, 2000 Page 3
Consolidated Statements of Operations for the Three and Six
Months Ended June 30, 2001 and 2000
Page 4
Consolidated Statements of Cash Flows for the Six months ended
June 30, 2001 and 2000
Page 5
Item 2. Results of Operations and Management's Discussion and
Analysis of
Financial Condition Page 6
Liquidity and Capital Resources
Page 7
Other Information Page 8
Signatures Page 9
The statements, insofar as they relate to the period subsequent to
December 31, 2000, are Unaudited.
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
AMERICAN REPUBLIC REALTY FUND I
Condensed Consolidated Balance Sheets
June 30 December 31,
2001 2000
(Unaudited)
ASSETS
Real Estate assets, at cost
Land $1,822,718 $1,822,718
Buildings and improvements 15,757,931 15,757,931
17,580,649 17,580,649
Less: Accumulated depreciation (11,441,467) (11,081,467)
Real Estate, net 6,139,182 6,499,182
Cash including cash investments 637,970 442,739
Escrow deposits 493,958 505,202
Prepaid Expenses 60,494 16,835
Deferred Financing Fees 137,658 149,129
TOTAL ASSETS $7,469,262 $7,613,087
LIABILITIES AND PARTNERS' EQUITY:
LIABILITIES
Mortgage and notes payable $10,392,381 $10,461,310
Note Payable to affiliates 0 0
Amounts due affiliates 0 0
Real estate taxes payable 142,500 0
Security deposits 79,844 73,445
Accounts payable & accrued expenses 185,929 310,272
Total liabilities 10,800,654 10,845,027
PARTNERS CAPITAL (DEFICIT)
Limited Partners (3,377,910) (3,279,452)
General Partner 46,518 47,512
Total Partners Capital (3,331,392) (3,231,940)
(Deficit)
TOTAL LIABILITIES AND
PARTNER DEFICIT $7,469,262 $7,613,087
AMERICAN REPUBLIC REALTY FUND I
Condensed Consolidated Statement of Operations
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
REVENUES 2001 2000 2001 2000
Rental income 700,087 677,399 1,394,473 1,353,120
Other property 21,163 14,546 43,574 32,167
Total revenues 721,250 691,945 1,438,047 1,385,287
EXPENSES
Salaries & wages 69,091 63,764 149,795 130,690
Maintenance & repairs 72,241 57,568 139,519 101,811
Utilities 52,486 28,724 114,488 90,623
Real estate taxes 71,250 68,748 142,500 137,496
General administrative 34,568 33,682 56,429 53,646
Contract services 27,681 26,007 55,427 54,818
Insurance 13,696 11,374 26,085 21,726
Interest 205,008 207,270 410,598 417,248
Depreciation and
amortization 185,736 175,736 371,472 351,472
Property management fees(a) 35,790 34,648 71,186 69,231
Total expenses 767,547 707,521 1,537,499 1,428,761
Net Income ($46,297) ($15,576) ($99,452) ($43,474)
NET INCOME PER UNIT $(4.21) $(1.42) $(9.04) $(3.95)
See Notes to Condensed Consolidated Financial Statements
AMERICAN REPUBLIC REALTY FUND I
Condensed Consolidated Statement of Cash Flows
See Notes to Condensed Consolidated Financial Statements
Unaudited
Six Months Ended
March 31,
2001 2000
CASH FLOWS FROM OPERATING ACTIVITY
Net income (loss) ($99,452) ($43,474)
Adjustments to reconcile net income
(loss) to net cash provided by operating
activities:
Depreciation and amortization 360,000 340,000
Net Effect of changes in operating accounts
Escrow deposits 11,244 114,579
Prepaid expenses (43,659) (35,828)
Accrued real estate taxes 142,500 137,496
Security deposits 6,399 3,390
Accounts payable (124,343) (140,359)
Other assets 11,471 11,471
Net cash provided by (used for)
operating activities 264,160 387,275
CASH FLOWS FROM INVESTING
ACTIVITIES
Repayment of mortgage notes payable (68,929) (63,725)
Repayment of notes payable to affiliates 0 0
Proceeds from amounts due affiliates 0 (165,346)
Repayment of amounts due 0 (4,490)
Net cash used for investing activities (68,929) (233,561)
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 195,231 153,714
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 442,739 116,649
CASH AND CASH EQUIVALENTS, END OF PERIOD $637,970 $270,363
Basis of Presentation:
Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although the
Partnership believes that the disclosures are adequate to make
the information presented not misleading. It is suggested that
these condensed financial statements be read in conjunction
with the financial statements and notes thereto included in the
Partnership's latest annual report on Form 10-K.
Item 2. RESULTS OF OPERATIONS AND MANAGEMENTS DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION
SECOND QUARTER 2001 COMPARED TO SECOND QUARTER 2000
At June 30, 2001 the Partnership owned two properties with
approximately 416,623 net rentable square feet. Both
properties are apartment communities. The portfolio had an
average occupancy of 96.0% for the second quarter of 2001, as
compared to 94.3% for the second quarter of 2000.
Revenue from property operations increased $29,305, or 4.24%,
for the second quarter of 2001, as compared to the 2000-second
quarter. The increase in rental income of $22,668 or 3.35% is
primarily due to an increase in rental rates. The increase in
other income of $6,617 or 45.49% is primarily due to an
increase in Late and other fee collections from the properties.
The following table illustrates the components:
Increase Percent
(Decrease) Change
Rental income 22,688 3.35%
Other property 6,617 45.49%
Net Increase (Decrease) 29,305 4.24%
Property operating expenses increased $60,026, or 8.48%, for
the second quarter of 2001, as compared to the same period in
2000, primarily due to increases in utilities expense. The
increase in utilities expense is due to significantly higher
gas bills. Maintenance and repairs increased $14,673 or 25.49%
primarily due to exterior building maintenance. Salaries &
Wages increased $5,327 or 8.35%due to high salaries. Insurance
increased $2,322 or 20.41% in connection with the annual policy
renewal. The following table illustrates the components by
category:
Increase Percent
(Decrease) Change
Salaries & wages 5,327 8.35%
Maintenance & repairs 14,673 25.49%
Utilities 23,762 82.73%
Real estate taxes 2,502 3.64%
General administrative 886 2.63%
Contract services 1,674 6.44%
Insurance 2,322 20.41%
Interest (2,262) 1.09%
Depreciation and amoritization 10,000 5.69%
Property management fees (a) 1,142 3.30%
Net Increase (Decrease) 60,026 8.48%
SECOND QUARTER 2000 COMPARED TO SECOND QUARTER 1999
Revenue from property operations increased $20,633, or 3.07%,
for the second quarter of 2000, as compared to the 1999-second
quarter. The increase in rental income of $19,797 or 3.01% is
primarily due to an increase in rental rates. The increase in
other income of $836 or 6.10% is primarily due to an increase
in Late and other fee collections from the properties. The
following table illustrates the components:
Increase Percent
(Decrease) Change
Rental income 19,797 3.01%
Other property 836 6.10%
Net Increase (Decrease) 20,633 3.07%
Property operating expenses decreased $49,443, or 6.53%, for
the second quarter of 2000, as compared to the same period in
1999, primarily due to decreases in maintenance and repairs
expense. The decrease in maintenance and repairs expense is
due to a one-time charge in 1999 for resurfacing the parking
lots. Salaries and wages decreased $20,461 or 24.29% primarily
due to staffing shortages. Utilities decreased $14,541 or
33.61% primarily due to decreased consumption. Insurance
increased $1,165 or 11.41% with the annual policy renewal. The
following table illustrates the components by category:
Increase Percent
(Decrease) Change
Salaries & wages (20,461) 24.29%
Maintenance & repairs (13,353) 18.83%
Utilities (14,541) 33.61%
Real estate taxes 1,248 1.85%
General administrative 2,561 8.23%
Contract services (974) 3.61%
Insurance 1,165 11.41%
Interest (2,086) 1.00%
Depreciation and amortization (4,136) 2.30%
Property management fees (a) 1,134 3.38%
Net Increase (Decrease) (49,443) 6.53%
LIQUIDITY AND CAPITAL RESOURCES
While it is the General Partners primary intention to
operate and manage the existing real estate investments, the
General Partner also continually evaluates this investment in
light of current economic conditions and trends to determine if
this asset should be considered for disposal. At this time,
there is no plan to dispose of either property.
As of June 30, 2001, the Partnership had $637,970 in cash
and cash equivalents as compared to $442,739 as of December 31,
2000. The net increase in cash of $195,231 is principally due
to cash flow from operations.
During the first quarter of 2000 ending June 30, the
partnership paid off the remaining balance owned to the general
partner of $165,346. The payment was made with operating cash
flow from the partnership.
Each asset of the fund refinanced its debt during July
1997. The fund retired debt with a face value of $6,500,000
and replaced with debt of $10,800,000. The new mortgages in
the amounts of $4,000,000, $6,800,000 carries interest rates of
7.8% and 7.92% respectively. The notes come due August 2007.
The Partnerships required principal payments due under the
stated terms of the Partnerships mortgage notes payable and
notes payable to affiliates are $120,132 $129,941, and $140,551
for each of the next three years.
Net proceeds from the refinancing were used to reduce the
notes payable to affiliates. During July 1997 payments of
$3,500,000 were made to reduce the debt to affiliates.
A gain on retirement of debt arose with the note
refinancing being triggered by the early retirement of the
debt. The recognized gain of $348,836 was the difference
between the carrying value of the debt and the funds necessary
to retire the debt.
For the foreseeable future, the Partnership anticipates
that mortgage principal payments (excluding any balloon
mortgage payments), improvements and capital expenditures will
be funded by net cash from operations. The primary source of
capital to fund future Partnership acquisitions and balloon
mortgage payments will be proceeds from the sale, financing or
refinancing of the Properties.
Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibit and Reports on Form 8-K
(A)The following documents are filed herewith or
incorporated herein by reference as indicated as
exhibits:
Exhibit Designation Document Description
2 Certificate of Limited partnership, as
Amended, incorporated by reference to
Registration Statement No.2-81074
Effective May 2, 1983.
Limited Partnership Agreement,
Incorporated by reference to
Registration Statement No.2-81074
effective May 2,1983.
11 Not Applicable
15 Not Applicable
18 Not Applicable
19 Not Applicable
20 Not Applicable
23 Not Applicable
24 Not Applicable
25 Power of Attorney, incorporated by
Reference to Registration Statement
No. 2-81074 effective May 2, 1983.
28 None
(B) Reports on Form 8-K for the quarter ended June 30, 2001.
1 None
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.
AMERICAN REPUBLIC REALTY FUND I
A Wisconsin limited partnership
By: /s/ Robert J. Werra
Robert J. Werra,
General Partner
Date: August 1, 2001