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, 2003 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 75093-5994
(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, 2003 and
December 31, 2002 Page 3
Consolidated Statements of Operations for the Six
Months Ended March 31, 2003 and 2002 Page 4
Consolidated Statements of Cash Flows for the Six months
Ended March 31, 2003 and 2002 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, 2002, are Unaudited.
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
AMERICAN REPUBLIC REALTY FUND I
Condensed Consolidated Balance Sheets
March 31 December 31
2003 2002
(Unaudited)
ASSETS
Real Estate assets,
at cost
Land $1,822,718 $1,822,718
Buildings and improvements 16,006,007 16,006,007
17,828,725 17,828,725
Less: Accumulated (12,621,239) (12,446,239)
depreciation
Real 5,207,486 5,382,486
Estate, net
Cash including cash investments 288,675 214,237
Escrow deposits 506,763 572,601
Prepaid Expenses 16,503 32,194
Deferred Financing Fees 97,507 103,242
TOTAL ASSETS $6,116,934 $6,304,760
LIABILITIES AND PARTNERS' EQUITY:
LIABILITIES
Mortgage and notes payable $10,165,608 $10,211,238
Note Payable to affiliates 0 0
Amounts due affiliates 828 1,725
Real estate taxes payable 75,249 0
Security deposits 75,376 75,028
Accounts payable & accrued expenses 172,710 333,000
Total liabilities 10,489,771 10,620,991
PARTNERS CAPITAL (DEFICIT)
Limited Partners (4,413,397) (4,357,357)
General Partner 40,560 41,126
Total Partners Capital (Deficit) (4,372,837) (4,316,231)
TOTAL LIABILITIES AND PARTNER DEFICIT $6,116,934 $6,304,760
AMERICAN REPUBLIC REALTY FUND I
Condensed Consolidated Statement of Operations
(Unaudited)
Three Months Ended March 31,
REVENUES 2003 2002
Rental income 682,658 674,226
Other property 14,796 17,773
Total revenues 697,454 691,999
EXPENSES
Salaries & wages 96,806 86,211
Maintenance & repairs 39,487 55,050
Utilities 54,163 51,571
Real estate taxes 75,249 76,248
General administrative 22,149 24,254
Contract services 26,318 26,553
Insurance 23,691 17,676
Interest 200,602 203,194
Depreciation and amortization 180,736 180,736
Property management fees (a) 34,859 34,538
Total expenses 754,060 756,031
Net Income ($56,606) ($64,032)
NET INCOME PER UNIT $(5.15) $(5.82)
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,
2003 2002
CASH FLOWS FROM OPERATING ACTIVITY
Net income (loss) ($56,606) ($64,032)
Adjustments to reconcile net income
(loss) to net cash provided by operating
activities:
Depreciation and amortization 175,000 175,000
Net Effect of changes in
operating accounts
Escrow deposits 65,838 63,833
Prepaid expenses 15,691 9,676
Accrued real estate taxes 75,249 76,248
Security deposits 348 (6,067)
Accounts payable (160,290) (169,681)
Other assets 5,735 5,736
Net cash provided by (used for)
operating activities 120,965 90,713
CASH FLOWS FROM INVESTING ACTIVITIES
Repayment of mortgage notes payable (45,630) (42,185)
Proceeds from amounts due affiliates (897) 5,680
Net cash used for investing activities (46,527) (36,505)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 74,438 54,208
CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD 214,237 294,437
CASH AND CASH EQUIVALENTS, END OF PERIOD $288,675 $348,645
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 2003 COMPARED TO FIRST QUARTER 2002
At March 31, 2003 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 90.5% for the first quarter of 2003, as
compared to 89.5% for the first quarter of 2002.
Revenue from property operations increased $5,455, or 0.79%,
for the first quarter of 2003, as compared to the 2002 first
quarter. The increase in rental income of $8,432 or 1.25% is
primarily due to an decrease in vacancy. The decrease in other
income of $2,977 or 16.75% 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 8,432 1.25%
Other property (2,977) 16.75%
Net Increase (Decrease) 5,455 0.79%
Property operating expenses decreased $1,971 or 0.26%, for the
first quarter of 2003, as compared to the same period in 2002.
Insurance increased $6,015 or 34.03% in connection with the
annual policy renewal. The decrease in maintenance & repairs
expense of $15,563 or 28.27% is represents decreased turnover
and related costs. Salaries increased $10,595 or 12.29%
primarily due to increased on site maintenance. The following
table illustrates the components by category:
Increase Percent
(Decrease) Change
Salaries & wages 10,595 12.29%
Maintenance & repairs (15,563) 28.27%
Utilities 2,592 5.03%
Real estate taxes (999) 1.31%
General administrative (2,105) 8.68%
Contract services (235) 0.89%
Insurance 6,015 34.03%
Interest (2,592) 1.28%
Depreciation and amortization 0 0.00%
Property management fees (a) 321 0.93%
Net Increase (Decrease) (1,971) 0.26%
FIRST QUARTER 2002 COMPARED TO FIRST QUARTER 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 Percent
(Decrease) Change
Rental income (20,160) 2.90%
Other property (4,638) 20.70%
Net Increase (Decrease) (24,798) 3.46%
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 Percent
(Decrease) Change
Salaries & wages 5,507 6.82%
Maintenance & repairs (12,228) 18.18%
Utilities (10,431) 16.82%
Real estate taxes 4,998 7.01%
General administrative 2,393 10.95%
Contract services (1,193) 4.30%
Insurance 5,287 42.67%
Interest (2,396) 1.17%
Depreciation and amortization (5,000) 2.69%
Property management fees (a) (858) 2.42%
Net Increase (Decrease) (13,921) 1.81%
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, 2003, the Partnership had $288,675 in cash
and cash equivalents as compared to $214,237 as of December 31,
2002. The net increase in cash of $74,438 is principally due to
cash flow from operations.
On September 30, 2002 the partnership distributed $25.00
per limited partnership unit to units of record September 30,
2002. This distribution was made from excess cash on hand from
cash flow from operations.
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 are
$140,551 $152,028, and $164,442 for each of the next three
years.
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 PartnershipAgreement,
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 March 31, 2003.
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: April 25, 2003
CERTIFICATION
I, Robert J Werra, certify that:
1. I have reviewed this annual report on Form 10-Q of American
Republic Realty Fund;
2. Based on my knowledge, this annual report does not contain
any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not
misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly
present in all material respects the financial condition,
results of operations and cash flows of the registrant as of,
and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-
14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to
ensure that material information relating to the
registrant, including its consolidated subsidiaries, is
made known to us by others within those entities,
particularly during the period in which this annual report
is being prepared;
b) evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date within 90
days prior to the filing date of this annual report (the
"Evaluation Date"); and
c) presented in this annual report our conclusions about
the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation
Date;
5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation
of internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and
b) any fraud, whether or not material, that involves
management or other employees who have a significant role
in the registrant's internal controls; and
6. The registrant's other certifying officers and I have
indicated in this annual report whether there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions
with regard to significant deficiencies and material
weaknesses.
Date: April 25, 2003
/s/ Robert J. Werra
General Partner
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION
1350, AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of American Republic
Realty Fund ("the Company") on Form 10-Q for the period
ending March 31, 2002 as filed with the Securities and
Exchange Commission on the date hereof ("the Report"), I,
Robert J. Werra, Acting Principal Executive Officer and Chief
Financial Officer of the Company, certify, pursuant to 18
U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley
Act of 2002, that:
(1) The report fully complies with the requirements of section
13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended; and
(2) The information contained in the Report fairly presents,
in all material respects, the financial condition and results
of operations of the Company.
/s/ Robert J. Werra
Acting Principal Executive Officer and Chief Financial
Officer
April 25, 2003