10
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 March 31, 2002 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 75093-4707
(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 March 31, 2002 and
December 31, 2001 Page 3
Consolidated Statements of Operations for the Three
Months Ended March 31, 2002 and 2001
Page 4
Consolidated Statements of Cash Flows for the Three months
Ended
March 31, 2002 and 2001 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, 2001, are Unaudited.
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
AMERICAN REPUBLIC REALTY FUND I
Condensed Consolidated Balance Sheets
March 31 December
31,
2002 2001
(Unaudited)
ASSETS
Real Estate assets, at
cost
Land $1,822,718 $1,822,71
8
Buildings and improvements 15,886,583 15,886,58
3
17,709,301 17,709,30
1
Less: Accumulated (11,940,922) (11,765,9
depreciation 22)
Real Estate, net 5,768,379 5,943,379
Cash including cash 348,645 294,437
investments
Escrow deposits 489,161 552,994
Prepaid Expenses 14,363 24,039
Deferred Financing Fees 120,450 126,186
TOTAL ASSETS $6,740,998 $6,941,03
5
LIABILITIES AND PARTNERS' EQUITY:
LIABILI
TIES
Mortgage and notes payable $10,298,993 $10,341,1
78
Amounts due affiliates 7,591 1,911
Real estate taxes payable 76,248 0
Security deposits 73,434 79,501
Accounts payable & accrued 172,840 342,521
expenses
Total liabilities 10,629,106 10,765,11
1
PARTNERS CAPITAL (DEFICIT)
Limited Partners (3,930,766) (3,867,37
4)
General Partner 42,658 43,298
Total Partners Capital (Deficit) (3,888,108) (3,824,07
6)
TOTAL LIABILITES AND PARTNER $6,740,998 $6,941,03
DEFICIT 5
AMERICAN REPUBLIC REALTY FUND I
Condensed Consolidated Statement of Operations
(Unaudited)
Three Months Ended
March 31,
REVENUES 2002 2001
Rental income 674,226 694,386
Other property 17,773 22,411
Total revenues 691,999 716,797
EXPENSES
Salaries & wages 86,211 80,704
Maintenance & repairs 55,050 67,278
Utilities 51,571 62,002
Real estate taxes 76,248 71,250
General administrative 24,254 21,861
Contract services 26,553 27,746
Insurance 17,676 12,389
Interest 203,194 205,590
Depreciation and 180,736 185,736
amortization
Property management fees 34,538 35,396
(a)
Total expenses 756,031 769,952
NET INCOME before ($64,032 ($53,155)
extraordinary item )
Net Income ($64,032 ($53,155)
)
NET INCOME PER UNIT $ $
(5.82) (4.83)
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
Three Months Ended
March 31,
2002 2001
CASH FLOWS FROM OPERATING ACTIVITY
Net income (loss) ($64,032 ($53,155)
)
Adjustments to reconcile net income
(loss) to net cash
provided by operating activities:
Depreciation and amortization 175,000 180,000
Net Effect of changes in operating
accounts
Escrow deposits 63,833 65,153
Prepaid expenses 9,676 4,389
Accrued real 76,248 71,250
estate taxes
Security deposits (6,067) 4,466
Accounts payable (169,681 (136,567)
)
Other assets 5,736 5,735
Net cash provided by (used for) 90,713 141,271
operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Repayment of mortgage notes (42,185) (39,001)
payable
Proceeds from amounts due 5,680 0
affiliates
Net cash used for investing activities (36,505) (39,001)
NET INCREASE (DECREASE) IN CASH AND 54,208 102,270
CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF 294,437 442,739
PERIOD
CASH AND CASH EQUIVALENTS, END OF $348,645 $545,009
PERIOD
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
FIRST QUARTER 2002 COMPARED TO FIRST QUARTER 2001
At March 31, 2002 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 89.5% for the first quarter of 2002, as
compared to 95.9% for the first quarter of 2001.
Revenue from property operations decreased $24,798, or 3.46%,
for the first quarter of 2002, as compared to the 2001 first
quarter. The decrease in rental income of $20,160 or 2.90% is
primarily due to an increase in vacancy. The decrease in other
income of $4,638 or 20.70% is primarily due to an decrease in
Late and other fee collections from the properties. The
following table illustrates the components:
Increase Perce
nt
(Decreas Chang
e) e
Rental income (20,160) 2.90%
Other property (4,638) 20.70
%
Net Increase (24,798) 3.46%
(Decrease)
Property operating expenses decreased $13,921, or 1.81%, for
the first quarter of 2002, as compared to the same period in
2001, primarily due to decreases in maintenance & repair
expense. The decrease in maintenance & repairs expense is
preventive maintenance projects being completed in 2001.
Utilities decreased $10,431 or 16.82% primarily due to
decreased rates. Insurance increased $5,287 or 42.67% in
connection with the annual policy renewal. The following table
illustrates the components by category:
Increase Perce
nt
(Decreas Chang
e) e
Salaries & wages 5,507 6.82%
Maintenance & (12,228) 18.18
repairs %
Utilities (10,431) 16.82
%
Real estate taxes 4,998 7.01%
General 2,393 10.95
administrative %
Contract services (1,193) 4.30%
Insurance 5,287 42.67
%
Interest (2,396) 1.17%
Depreciation and (5,000) 2.69%
amortization
Property management (858) 2.42%
fees (a)
Net Increase (13,921) 1.81%
(Decrease)
FIRST QUARTER 2001 COMPARED TO FIRST QUARTER 2000
Revenue from property operations increased $23,455, or 3.38%,
for the first quarter of 2001, as compared to the 2000 first
quarter. The increase in rental income of $18,665 or 2.76% is
primarily due to an increase in rental rates. The increase in
other income of $4,790 or 27.18% is primarily due to an
increase in Late and other fee collections from the properties.
The following table illustrates the components:
Increase Percen
t
(Decreas Change
e)
Rental income 18,665 2.76%
Other property 4,790 27.18%
Net Increase 23,455 3.38%
(Decrease)
Property operating expenses increased $48,712, or 6.75%, for
the first quarter of 2001, as compared to the same period in
2000, primarily due to increases in maintenance & repairs
expense. The increase in maintenance & repairs expense is due
to parking lot repaving. Salaries and wages increased $13,778
or 20.59% primarily due to increased staffing. Insurance
increased $2,037 or 19.68% in connection with the annual policy
renewal. The following table illustrates the components by
category:
Increase Percen
t
(Decreas Change
e)
Salaries & wages 13,778 20.59%
Maintenance & 23,035 52.06%
repairs
Utilities 103 0.17%
Real estate taxes 2,502 3.64%
General 1,897 9.50%
administrative
Contract services (1,065) 3.70%
Insurance 2,037 19.68%
Interest (4,388) 2.09%
Depreciation and 10,000 5.69%
amortization
Property management 813 2.35%
fees (a)
Net Increase 48,712 6.75%
(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 March 31, 2002, the Partnership had $348,645 in cash
and cash equivalents as compared to $294,437 as of December 31,
2001. The net increase in cash of $54,208 is principally due to
cash flow from operations.
During the first quarter of 2000 ending March 31, 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 carry 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-
81074effective 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 March 31, 2002.
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: May 1, 2002