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, 1999 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 Identification
incorporation or organization 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 March 31, 1999 and
December 31, 1998 Page 3
Consolidated Statements of Operations for the Three
Months Ended March 31, 1999 and 1998 Page 4
Consolidated Statement of Cash Flows for the Three
Months Enede March 31, 1999 and 1998 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, 1998, are Unaudited.
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
AMERICAN REPUBLIC REALTY FUND I
Condensed Consolidated Balance Sheets
March 31, December 31,
1999 1998
(Unaudited)
ASSETS
Real Estate assets, at cost
Land $1,822,718 $1,822,718
Buildings and improvements 15,519,676 15,519,676
17,342,394 17,342,394
Less: Accumulated depreciation (9,867,703) (9,702,703)
Real Estate,net 7,474,691 7,639,691
Cash including cash investments 140,800 146,358
Escrow deposits 373,140 430,820
Prepaid Expenses 11,809 14,421
Deferred Financing Fees 180,145 195,016
TOTAL ASSETS $8,180,585 $8,426,306
LIABILITIES AND PARTNERS'EQUITY:
LIABILITES
Mortgage and notes payable $10,641,716 $10,675,051
Note Payable to affiliates 300,461 399,392
Amounts due affiliates 8,965 46,853
Real estate taxes payable 67,500 0
Security deposits 59,947 56,924
Accounts payable & accrued expenses 218,818 278,099
Total liabilities 11,297,407 11,456,319
PARTNERS CAPITAL (DEFICIT)
Limited Partners (3,171,349) (3,085,408)
General Partner 54,527 55,395
Total Partners Capital (3,116,822) (3,030,013)
Partners Capital (Deficit)
TOTAL LIABILITIES $8,180,585 $8,426,306
AND PARTNER DEFICIT
See notes to Condensed Consolidated Financial Statements
AMERICAN REPUBLIC REALTY FUND I
Condensed Consolidated Statement of Operations
(Unaudited)
Three Months Ended
March 31,
REVENUES 1999 1998
Rental income 663,831 $638,847
Other property 15,028 11,740
Total revenues 678,859 650,587
EXPENSES
Salaries & wages 66,277 61,627
Maintenance & repairs 96,332 87,568
Utilities 43,312 48,033
Real estate taxes 67,500 67,500
General administrative 28,663 26,242
Contract services 28,135 28,218
Insurance 10,612 15,223
Interest 211,080 233,240
Depreciation and amortization 179,871 174,871
Property management fees 33,886 32,528
Total expenses 765,668 775,050
Net (Loss) ($86,809) ($124,463)
NET (Loss) PER UNIT $(7.89) $(11.31)
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,
1999 1998
CASH FLOWS FROM OPERATING ACTIVITY
Net (loss) ($86,809) ($124,463)
Adjustments to reconcile net
(loss) to net cash provided by operating activities:
Depreciation and amortization 165,000 160,000
Net Effect of changes in operating accounts
Escrow deposits 57,680 183,743
Prepaid expenses 2,612 7,222
Accrued real estate taxes 67,500 67,500
Security deposits 3,023 1,578
Accounts payable (59,281) (114,982)
Other assets 14,871 14,871
Net cash provided by operating activities 164,596 195,469
CASH FLOWS FROM INVESTING ACTIVITIES
Repayment of mortgage notes payable (33,335) (30,817)
Repayment of notes payable to affiliates (98,931)
Proceeds from amounts due affiliates (37,888) (69,036)
Repayment of amounts due affiliates (45,112)
Net cash used for investing activities (170,154) (144,965)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (5,558) 50,504
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 146,358 16,900
CASH AND CASH EQUIVALENTS, END OF PERIOD $140,800 $67,404
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 MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION
FIRST QUARTER 1999 COMPARED TO FIRST QUARTER 1998
At March 31, 1999 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 95.8% for the first quarter
of 1999, as compared to 95.7% for the first quarter of 1998.
Revenue from property operations increased $28,272, or 4.35%, for the first
quarter of 1999, as compared to the 1998 first quarter. The increase in
rental income of $24,984 or 3.91% is primarily due to an increase in rental
rates. The increase in other income of $3,288 or 28.01% is primarily due to
an increase in Late and other fee collections from the properties.
The following table illustrates the components:
Increase Per Cent
(Decrease) Change
Rental income 24,984 3.91%
Other property 3,288 28.01%
28,272 4.35%
Property operating expenses decreased $9,382, or 1.21%, for the first quarter
of 1999, as compared to the same period in 1998, primarily due to decreases
in interest expense. The decrease in interest expense is due to principal
payoffs in 1997 of amounts due affiliates. Maintenance and repairs increased
$8,764 or 10.01% primarily due to parking lot resurfacing done in the first
quarter of 1999. Insurance costs decreased $4,611 or 30.29% primarily due
to lower rates as a result of better than expected loss claims. The following
table illustrates the components by category:
Increase Per Cent
(Decrease) Change
Salaries & wages 4,650 7.55%
Maintenance & repairs 8,764 10.01%
Utilities (4,721) 9.83%
General administrative 2,421 9.23%
Contract services (83) 0.29%
Insurance (4,611) 30.29%
Interest (22,160) 9.50%
Depreciation and amortization 5,000 2.86%
amortization
Property management fees (a) 1,358 4.17%
Net Increase (Decrease) (9,382) 1.21%
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, 1999, the Partnership had $140,800 in cash and
cash equivalents as compared to $146,358 as of December 31,
1998 . The net decrease in cash of $5,558 is principally due to
the repayment of notes payable to affiliates.
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
Partnership's required principal payments due under the stated
terms of the Partnership's mortgage notes payable and notes
payable to affiliates are $102,678, $111,063, and $120,132,
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. This
together with interest on the debt reduced the amounts due
affiliates to $300,461at March 31, 1999.
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.
Additionally, the general partner has provided funding to the
Partnership in the form of notes payable with balances at
December 31,1998 totaling $399,392 which accrue interest at
rates ranging from prime plus 2%; to 8.25% and are due on June
30, 2001, or upon demand The general partner is not obligated
to provide additional funding to the Partnership.
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.
The Partnership's required principal payments due under the
stated terms of the Partnership's mortgage notes payable and
notes payable to affiliates are $102,678, $111,063 and $120,131
for each of the next three years.
Year 2000
The Partnership and Management Company have replaced all data
processing systems with the last three years within year 2000
compliant hardware and software. The Partnership and Management
Company has completed testing of its data processing systems.
While no certainty can not be assured, the systems tested to
date are compliant.
Surveys of financial institutions and vendors used by the
Partnership and Management Company also indicate compliance to
date will be completed by June 1999. The Partnership and
Management Company have prepared contingency plans. These
include redundant back-ups and paper copies of all system
reports through 1999.
The Partnership anticipates that it will not incur any costs
associated with its computers and building operating systems as
it relates to the conversion to the year 2000.
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 March 31, 1999.
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 29, 1999
[ARTICLE] 5
[LEGEND]
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BOTH
THE March 31, 1999 BALANCE SHEET AND STATEMENT OF INCOME AND EXPENSES
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
[/LEGEND]
[CIK] 0000711512
[NAME] AMERICAN REPUBLIC REALTY FUND I
[PERIOD-TYPE] 3-MOS
[FISCAL-YEAR-END] DEC-31-1999
[PERIOD-END] MAR-31-1999
[CASH] 140,800
[SECURITIES] 0
[RECEIVABLES] 0
[ALLOWANCES] 0
[INVENTORY] 0
[CURRENT-ASSETS] 0
[PP&E] 17,342,394
[DEPRECIATION] 9,867,703
[TOTAL-ASSETS] 8,180,585
[CURRENT-LIABILITIES] 0
[BONDS] 10,641,716
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[COMMON] 0
[OTHER-SE] (3,116,822)
[TOTAL-LIABILITY-AND-EQUITY] 8,180,585
[SALES] 0
[TOTAL-REVENUES] 678,859
[CGS] 0
[TOTAL-COSTS] 0
[OTHER-EXPENSES] 554,588
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 211,080
[INCOME-PRETAX] 0
[INCOME-TAX] 0
[INCOME-CONTINUING] 0
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] (86,809)
[EPS-PRIMARY] (7.89)
[EPS-DILUTED] 0