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, 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 June 30, 2002 and December 31, 2001 Page 3 Consolidated Statements of Operations for the Six Months Ended June 30, 2002 and 2001 Page 4 Consolidated Statements of Cash Flows for the Six months Ended June 30, 2002 and 2001 Page 5 Item 2. Results of Operations and Managements 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 June 30 December 31, 2002 2001 (Unaudited) ASSETS Real Estate assets, at cost Land $1,822,718 $1,822,718 Buildings and improvements 15,886,583 15,886,583 17,709,301 17,709,301 Less: Accumulated depreciation (12,115,922) (11,765,922) 5,593,379 5,943,379 Real Estate, Net Cash including cash investments 445,028 294,437 Escrow deposits 433,624 552,994 Prepaid Expenses 88,116 24,039 Deferred Financing Fees 114,715 126,186 TOTAL ASSETS $6,674,862 $6,941,035 LIABILITIES AND PARTNERS'EQUITY: LIABILITIES Mortgage and notes payable $10,266,622 $10,341,178 Amounts due affiliates 1,395 1,911 Real estate taxes payable 152,496 0 Security deposits 73,547 79,501 Accounts payable & accrued expenses 158,559 342,521 Total liabilites 10,652,619 10,765,111 PARTNERS CAPITAL (DEFICIT) Limited Partners (4,019,518) (3,867,374) General Partner 41,761 43,298 Total Partners Capital (Deficit) (3,977,757) (3,824,076) TOTAL LIABILITIES AND PARTNERS DEFICIT $6,674,862 $6,941,035 AMERICAN REPUBLIC REALTY FUND I Condensed Consolidated Statement of Operations (Unaudited) Three Months Six Months Ended June 30, Ended June 30, REVENUES 2002 2001 2002 2001 Rental income 656,907 700,087 1,331,133 1,394,473 Other property 15,589 21,163 33,362 43,574 Total revenues 672,496 721,250 1,364,495 1,438,047 EXPENSES Salaries & wages 78,209 69,091 164,420 149,795 Maintenance & repairs 59,996 72,241 115,046 139,519 Utilities 49,980 52,486 101,551 114,488 Real estate taxes 76,248 71,250 152,496 142,500 General administrative 32,775 34,568 57,029 56,429 Contract services 27,059 27,681 53,612 55,427 Insurance 21,010 13,696 38,686 26,085 Interest 202,565 205,008 405,759 410,598 Depreciation and amortization 180,736 185,736 361,472 371,472 Property management fees (a) 33,567 35,790 68,105 71,186 Total expenses 762,145 767,547 1,518,176 1,537,499 Net Income ($89,649) ($46,297) ($153,681) ($99,452) NET INCOME PER UNIT $(8.15) $(4.21) $(13.97) $(9.04) 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 June 30, 2002 2001 CASH FLOWS FROM OPERATING ACTIVITY Net income (loss) ($153,681) ($99,452) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 350,000 360,000 Net Effect of changes in operating accounts Escrow deposits 119,370 11,244 Prepaid expenses (64,077) (43,659) Accrued real estate taxes 152,496 142,500 Security deposits (5,954) 6,399 Accounts payable (183,962) (124,343) Other assets 11,471 11,471 Net cash provided by (used for) operating activities 225,663 264,160 CASH FLOWS FROM INVESTING ACTIVITIES Repayment of mortgage notes payable (74,556) (68,929) Proceeds from amounts due affiliates (516) 0 Net cash used for investing activities (75,072) (68,929) activities NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 150,591 195,231 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 294,437 442,739 CASH AND CASH EQUIVALENTS, END OF PERIOD $445,028 $637,970 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 2002 COMPARED TO SECOND QUARTER 2001 At June 30, 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 87.4% for the second quarter of 2002, as compared to 95.9% for the second quarter of 2001. Revenue from property operations decreased $48,754, or 6.76%, for the second quarter of 2002, as compared to the 2001 second quarter. The decrease in rental income of $43,180 or 6.17% is primarily due to an increase in vacancy. The decrease in other income of $5,574 or 26.34% is primarily due to an decrease in Late and other fee collections from the properties. The following table illustrates the components: Increase Percent (Decrease) Change Rental income (43,180) 6.17% Other property (5,574) 26.34% Net Increase (48,754) 6.76% (Decrease) Property operating expenses decreased $5,402or 0.70%, for the second 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 of $12,245 or 16.95% is preventive maintenance projects being completed in 2001 Insurance increased $7.314 or 53.4% in connection with the annual policy renewal. Salaries increased $9,118 or 13.20% primarily due to increased on site maintenance. The following table illustrates the components by category: Increase Percent (Decrease) Change Salaries & wages 9,118 13.20% Maintenance & repairs (12,245) 16.95% Utilities (2,506) 4.77% Real estate taxes 4,998 7.01% General administrative (1,793) 5.19% Contract services (622) 2.25% Insurance 7,314 53.40% Interest (2,443) 1.19% Depreciation and amortization (5,000) 2.69% Property management fees (a) (2,223) 6.21% Net Increase (5,402) 0.70% (Decrease) 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 29,305 4.24% (Decrease) 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 amortization 10,000 5.69% Property management fees (a) 1,142 3.30% Net Increase 60,026 8.48% (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 June 30, 2002, the Partnership had $445,028 in cash and cash equivalents as compared to $294,437 as of December 31, 2001. The net increase in cash of $150,591 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.2-81074 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, 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: August 1, 2002