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 September 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)
2800 N. Dallas Pkwy Suite 100
Plano, Texas 75093
(Address of principal executive offices)
Registrant's telephone number, including area code: (972)836-8000.
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 September 30, 2001 and
December 31, 2000 Page 3
Consolidated Statements of Operations for the Three and Six
Months Ended September 30, 2001 and 2000 Page 4
Consolidated Statements of Cash Flows for the Nine months ended
September 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 10
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
September 30 December 31,
2001 2000
(Unaudited)
ASSETS
Real Estate assets,
at cost Land $1,822,718 $1,822,718
Buildings and 15,757,931 15,757,931
improvements
17,580,649 17,580,649
Less: Accumulated (11,621,467) (11,081,467)
depreciation
Real Estate, net 5,959,182 6,499,182
Cash including cash 786,805 442,739
investments
Escrow deposits 547,627 505,202
Prepaid Expenses 44,646 16,835
Deferred Financing Fees 131,922 149,129
TOTAL ASSETS $7,470,182 $7,613,087
LIABILITIES AND PARTNERS' EQUITY:
LIABILITIES
Mortgage and notes $10,361,861 $10,461,310
payable
Real estate taxes 213,750 0
payable
Security deposits 82,797 73,445
Accounts payable & 182,039 310,272
accrued expenses
Total liabilities 10,840,447 10,845,027
PARTNERS CAPITAL
(DEFICIT)
Limited Partners (3,416,394) (3,279,452)
General Partner 46,129 47,512
Total Partners Capital (3,370,265) (3,231,940)
(Deficit)
TOTAL LIABILITIES AND $7,470,182 $7,613,087
PARTNER DEFICIT
AMERICAN REPUBLIC REALTY FUND I
Condensed Consolidated Statement of Operations
(Unaudited)
Three Months Ended Nine Months Ended
June 30, September 30,
REVENUES 2001 2000 2001 2000
Rental income 707,029 684,484 2,101,502 2,037,604
Other property 22,183 19,121 65,757 51,288
Total revenues 729,212 703,605 2,167,259 2,088,892
EXPENSES
Salaries & wages 86,152 78,734 235,947 209,424
Maintenance & repairs 60,063 66,576 199,582 168,387
Utilities 55,739 49,529 170,227 140,152
Real estate taxes 71,250 69,582 213,750 207,078
General administrative 26,986 41,372 83,415 95,018
Contract services 26,408 26,634 81,835 81,452
Insurance 15,091 12,389 41,176 34,115
Interest 204,417 206,720 615,015 623,968
Depreciation and 185,736 175,735 557,208 527,207
amortization
Property management 36,243 34,949 107,429 104,180
fees (a)
Total expenses 768,085 762,220 2,305,584 2,190,981
Net Income ($38,873) ($58,615) ($138,325) ($102,089)
NET INCOME PER UNIT $(3.53) $(5.33) $(12.58) $(9.28)
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
Nine Months Ended
September 30,
2001 2000
CASH FLOWS FROM OPERATING ACTIVITY
Net income (loss) ($138,325) ($102,089)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization 540,000 510,000
Net Effect of changes in operating accounts
Escrow deposits (42,425) 6,255
Prepaid expenses (27,811) (23,440)
Accrued real estate taxes 213,750 207,078
Security deposits 9,352 11,021
Accounts payable (128,233) (127,018)
Other assets 17,207 17,207
Net cash provided by (used for) operating 443,515 499,014
activities
CASH FLOWS FROM INVESTING ACTIVITIES
Repayment of mortgage notes payable (99,449) (91,941)
Proceeds from amounts due affiliates 0 (165,346)
Repayment of amounts due affiliates 0 (4,490)
Net cash used for investing activities (99,449) (261,777)
NET INCREASE (DECREASE) IN CASH AND CASH 344,066 237,237
EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF 442,739 116,649
PERIOD
CASH AND CASH EQUIVALENTS, END OF PERIOD $786,805 $353,886
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
THIRD QUARTER 2001 COMPARED TO THIRD QUARTER 2000
At September 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 96.5% for the third quarter of 2001, as
compared to 96.4% for the third quarter of 2000.
Revenue from property operations increased $25,607, or 3.64%,
for the third quarter of 2001, as compared to the 2000-third
quarter. The increase in rental income of $22,545 or 3.29% is
primarily due to an increase in rental rates. The increase in
other income of $3,062 or 16.01% 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 22,545 3.29%
Other property 3,062 16.01%
Net Increase 25,607 3.64%
(Decrease)
Property operating expenses increased $5,865, or 0.77%, for the
third quarter of 2001, as compared to the same period in 2000,
primarily due to increases in utilities expense. Insurance
increased $2,702 or 21.81% in connection with the annual policy
renewal. The increase in utilities expense is due to
significantly higher gas bills. General & Administrative
decreased $14,386 or 34.77% due to decreased legal fees.
Maintenance and repairs decreased $6,513 or 9.78% primarily due
to exterior building maintenance. Salaries & Wages increased
$7,418 or 9.42%due to higher salaries. The following table
illustrates the components by category:
Increase Percent
(Decrease) Change
Salaries & wages 7,418 9.42%
Maintenance & repairs (6,513) 9.78%
Utilities 6,210 12.54%
Real estate taxes 1,668 2.40%
General administrative (14,386) 34.77%
Contract services (226) 0.85%
Insurance 2,702 21.81%
Interest (2,303) 1.11%
Depreciation and amortization 10,001 5.69%
Property management fees (a) 1,294 3.70%
Net Increase (Decrease) 5,865 0.77%
THIRD QUARTER 2000 COMPARED TO THIRD QUARTER 1999
At September 30, 2000 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 96.4% for the third quarter of 2000, as
compared to 96.2% for the third quarter of 1999.
Revenue from property operations increased $20,294, or 2.97%,
for the third quarter of 2000, as compared to the 1999 third
quarter. The increase in rental income of $15,537 or 2.32% is
primarily due to an increase in rental rates. The increase in
other income of $4,757 or 33.12% 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 15,537 2.32%
Other property 4,757 33.12%
Net Increase 20,294 2.97%
(Decrease)
Property operating expenses increased $27,169, or 3.70%, for
the third quarter of 2000, as compared to the same period in
1999, primarily due to increases in general and administrative
expense. The increase in general and administrative expense is
due to legal expenses incurred with regard to a tender offer on
the fund. Salaries and wages increased $7,537 or 10.59%
primarily due to increased staffing. Utilities increased $6,471
or 15.03% primarily due to increased consumption. Insurance
increased $2,037 or 19.68% in connection with the annual policy
renewal. The following table illustrates the components by
category:
Increase Percent
(Decrease) Change
Salaries & wages 7,537 10.59%
Maintenance & repairs 5,131 8.35%
Utilities 6,471 15.03%
Real estate taxes 1,666 2.45%
General administrative 11,410 38.08%
Contract services (1,666) 5.89%
Insurance 2,037 19.68%
Interest (2,130) 1.02%
Depreciation and amortization (4,136) 2.30%
Property management fees 849 2.49%
Net Increase 27,169 3.70%
(Decrease)
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 September 30, 2001, the Partnership had $786,805 in
cash and cash equivalents as compared to $442,739 as of
December 31, 2000. The net increase in cash of $344,066 is
principally due to cash flow from operations.
During the first quarter of 2000 ending September 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 September 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: November 1, 2001