IR PASS-THROUGH CORP.
c/o Winthrop Management LLC
7 Bulfinch Place, Suite 500
P.O. Box 9507
Boston, MA 02114-9507
(617) 570-4600
Integrated ARROs Fund I (the "Fund")
February, 2004
Dear Unitholder:
Enclosed for your review are the Fund's audited financial statements as of
December 31, 2003. As you are aware, the Funds' investments are passive in
nature and consist of interest-bearing payment obligations that originated from
a series of net lease real estate partnerships. As such, the primary source of
payment for these obligations is the lease payments received from the
partnerships' corporate tenants. We are pleased to report that all tenant
obligations continue to be met and, on an overall basis, the credit ratings of
these tenants have not materially changed since the initial offering of the
Units.
As previously reported, the Fund has made arrangements with Royal Alliance
Associates (212-551-5100) to act as a market maker and with DCC Securities Corp.
(800-945-0440) to facilitate trading, as a broker, between buyers and sellers of
Units. Please contact these firms directly if you have any questions regarding
such activities.
If you have any specific questions regarding your holdings in the Fund, please
call the Trustee, Bankers Trust Company at (800) 735-7777.
Sincerely,
Integrated ARROs Fund I
By: IR Pass-through Corp., Sponsor
Independent Auditors' Report
To the Unit-holders, Board of Directors of the Sponsor, and Trustee
of Integrated ARROs Fund I
We have audited the accompanying statements of financial condition of Integrated
ARROs Fund I (the "Fund") as of December 31, 2003 and 2002, including the
schedule of portfolio investments as of December 31, 2003, and the related
statements of operations and changes in net assets for the years then ended and
the schedule of selected per unit operating performance, ratios and supplemental
data for each of the two years in the period ended December 31, 2003. These
financial statements and the selected per unit operating performance, ratios and
supplemental data are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and the
selected per unit operating performance, ratios and supplemental data based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and the selected per unit operating performance, ratios and
supplemental data are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and the selected per unit operating
performance, ratios and supplemental data referred to above present fairly, in
all material respects, the financial position of Integrated ARROs Fund I as of
December 31, 2003 and 2002, and the results of its operations and changes in its
net assets for the years then ended and the selected per unit operating
performance, ratios and supplemental data for each of the two years in the
period ended December 31, 2003, in conformity with accounting principles
generally accepted in the United States of America.
As explained in Note 2, the financial statements include investments in payment
obligations valued at $8,729,775 and $9,989,251 as of December 31, 2003 and
2002, respectively, whose values have been stated at the lower of fair market
value, as estimated by the Board of Directors of the Sponsor in the absence of
readily ascertainable market values, or Minimum Termination Amount. We have
reviewed the procedures used by the Board of Directors in arriving at its
estimate of fair market value of such investments and have inspected underlying
documentation, and, in the circumstances, we believe the procedures are
reasonable and the documentation appropriate. However, because of the inherent
uncertainty of valuation, those estimated values may differ significantly from
the values that would have been used had a ready market for the investments
existed, and the differences could be material.
/s/ Imowitz Koenig & Co., LLP
New York, New York
February 12, 2004
Integrated ARROs Fund I
Statements of Financial Condition
December 31,
-------------------------
Assets 2003 2002
----------- -----------
Cash and Cash Equivalents $ 267,957 $ 425,668
Investments in payment obligations, at lower
of fair market value or minimum termination
value (cost $2,302,742 and $2,634,352 for 2003
and 2002, respectively) 8,729,775 9,989,251
----------- -----------
Total Assets 8,997,732 10,414,919
Liabilities
Distributions Payable 267,957 425,668
----------- -----------
Net Assets $ 8,729,775 $ 9,989,251
=========== ===========
Net Asset Value per unit (2,771 units outstanding) $ 3,150.41 $ 3,604.93
=========== ===========
See notes to financial statements
Integrated ARROs Fund I
Statements of Operations
Year Ended December 31,
------------------------
2003 2002
----------- ----------
Investment Income:
Interest and discount earned, net of fund expenses $ 2,417,543 $1,122,307
=========== ==========
See notes to financial statements
Integrated ARROs Fund I
Statements of Changes in Net Assets
Year Ended December 31,
---------------------------
2003 2002
----------- ------------
Decrease in net assets from operations:
Net investment income $ 2,417,543 $ 1,122,307
----------- ------------
Net increase in net assets resulting from operations 2,417,543 1,122,307
Total declared as distributions to Unit Holders (3,677,019) (1,620,768)
----------- ------------
Net decrease in net assets (1,259,476) (498,461)
Net assets:
Beginning of period 9,989,251 10,487,712
----------- ------------
End of period $ 8,729,775 $ 9,989,251
=========== ============
See notes to financial statements
Integrated ARROs Fund I
Notes to Financial Statements
1. ORGANIZATION
Integrated ARROs Fund I (the "Fund") is a grantor trust created under the
laws of the State of New York and registered under the Investment Company
Act of 1940 as a closed-end, non-diversified management investment
company.
The Fund was formed in April 1987 for the purpose of realizing
appreciation in value and deferring the receipt of income through
investments in a portfolio consisting of seven contract rights for the
payment of money (the "Payment Obligations"). The Payment Obligations were
sold to the Fund by IR Pass-through Corporation (the "Sponsor"), formerly
a wholly-owned subsidiary of Integrated Resources, Inc. ("Integrated").
The Payment Obligations were originally entered into by seven privately
offered, single purpose limited partnerships (the "Partnership(s)")
previously sponsored by Integrated that had acquired and net leased
commercial real estate. Pursuant to the Consummation of Integrated's Plan
of Reorganization ("the Plan"), on November 3, 1994, the Sponsor became a
wholly-owned indirect subsidiary of Presidio Capital Corp. ("Presidio")
which subsequently merged with NorthStar Capital Investment Corp. (See
Footnote 3). All capitalized terms, herein not defined, have the same
meaning as defined in the Trust Indenture.
2. SIGNIFICANT ACCOUNTING POLICIES
Security Valuation
The Payment Obligations are valued at the lower of fair market value (as
determined by the Board of Directors of the Sponsor) or Minimum
Termination Amount (as defined in the Trust Indenture).
Federal Income Taxes
The Fund is classified as a grantor trust. As a consequence, the Fund is
not subject to Federal Income Taxation.
Cash and Cash Equivalents
Cash and cash equivalents represents payment obligations received by the
Fund and which were invested in U. S. Treasury bills with maturities of
three months or less.
Use of Estimates
The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts for Investments in payment obligations and the reported amounts
for Net investment income. Actual results could differ from these
estimates.
3. THE SPONSOR
IR Pass-through Corporation is the Sponsor of the Fund and was/is a wholly
owned subsidiary of Integrated Resources, Inc. ("Integrated") and its
post-bankruptcy successor, Presidio Capital Corp. ("Presidio"). Presidio
merged with NorthStar Capital Investment Corp. ("NorthStar Capital") on
February 14, 2002.
Subject to the rights of the unitholders under the Trust Indenture,
NorthStar Capital is responsible for the administration of the Fund
through its indirect ownership of all of the shares of the Sponsor.
NorthStar Presidio Management Company, LLC ("NorthStar Presidio"), an
affiliate of NorthStar Capital, provided administrative services to
Presidio through October 25, 1999. Thereafter, administrative services
were provided to Presidio by AP-PCC III, L.P. ("AP-PCC"), an unaffiliated
third party. NorthStar Presidio and AP-PCC in turn provided services to
the Fund. The board of directors of NorthStar Capital is authorized to
designate the officers and directors of the Sponsor, whose names, titles,
principal occupations during the past five years and the date they began
office is set forth in Note 5, Commitments and Contingencies.
4. THE PAYMENT OBLIGATIONS
The seven Payment Obligations acquired by the Fund were issued from 1981
to 1982 for the sale to the Partnerships of rights to acquire interests in
properties or for services rendered. One of the seven Payment Obligations
(Walstaff) was satisfied in full during 2003.
Payments on the remaining six Payment Obligations are scheduled over a
period not in excess of 40 years from commencement of the initial terms
("Primary Terms"), ranging from 20 to 25 years, of the respective net
leases. Interest at simple interest rates ranging from 13% to 18.5%
accrues on the principal amount for each Payment Obligation. Payments on
the Payment Obligations were scheduled to commence approximately 15 years
after commencement of the Primary Terms of each net lease.
If a net lease is not extended by the lessee beyond the Primary Term, the
Partnership's obligation to pay the balance of the principal of a Payment
Obligation and accrued interest does not accelerate. In such event, the
Partnership may either seek to re-lease or to sell the property, but
there can be no assurance that such a sale or new lease would be made or
that it would be made in a timely manner. If a sale is made, the balance
of the principal and accrued interest thereon may be declared by the Fund,
at its discretion, to be immediately due and payable. Upon the disposition
by a Partnership of its entire interest in the property (or properties),
the Partnership shall be obligated to pay the Fund (after satisfaction of
any obligations senior to that of the Payment Obligation which are then
due and payable) first, accrued unpaid interest and then the unpaid
principal balance of the payment Obligation. The Fund does not have the
right to accelerate the payment of any Payment Obligation in the event
that a Partnership does not sell its property at the end of the Primary
Term, so long as the Partnership remains current on its payments under the
Payment Obligation. As such, it is possible that the Fund may not realize
the entire outstanding principal and interest thereon of the related
Payment Obligation.
5. COMMITMENTS AND CONTINGENCIES
The Trust Indenture provides that the Sponsor will bear all costs of
administering the Fund through the period in which the Fund will be
receiving only primary term payments. However, when the Fund begins
receiving renewal term payments, the Fund shall bear a portion of such
costs equal to the percentage of the renewal term payments received by the
Fund in such year to all of the payments received by the Fund in such
year.
The Trust Indenture provides that the above obligations of the Sponsor
were to be funded through the retention of a portion of the proceeds from
the sale of the Units. However, the Sponsor did not segregate from the
general assets of its then parent, Integrated, a portion of the sale
proceeds for this purpose. Integrated filed for bankruptcy on February 13,
1990 under Chapter 11 of the United States Bankruptcy code. While
Integrated's bankruptcy did not directly affect the Fund, and had no
effect on the portfolio of the Fund, the bankruptcy did affect the
Sponsor, which had no source of revenues other than Integrated. The
Sponsor therefore filed a claim in Integrated's bankruptcy proceedings for
the amounts necessary to fund the Sponsor's obligations to the Fund and to
Integrated ARROs Fund II ("Fund II"), an affiliate. As Integrated's
liabilities far exceeded its assets, and the Sponsor's claim was that of
an unsecured general creditor, it was unlikely that amounts eventually
paid on the Sponsor's claim would be sufficient to fund the Sponsor's
obligations. However, in 1994, in full settlement of the Sponsor's claim,
Integrated paid the Sponsor $450,000. The Sponsor projected at that time
(based on a present value estimate of legal, accounting, trustee fees, and
printing and mailing costs) that this amount would enable the Sponsor to
meet its obligations to the Fund, and its similar obligations to Fund II,
through approximately the year 2000. However, at that time there was no
assurance that the $450,000 paid by Integrated, plus any interest accrued
(the "Settlement Fund"), would in fact be sufficient to fund the Sponsor's
obligations through the year 2000. As of December 31, 1997, approximately
$61,000 remained of the original Settlement Fund. However, the Settlement
Fund was fully depleted during the first half of 1998. The Trustee may
establish a reserve fund, set aside out of the proceeds of the Payment
Obligations, to pay future expenses of administering the Fund.
Consequently, the Trustee paid $38,430 and $51,217 in
such expenses from the proceeds of Payment Obligations received by the
Fund in 2003 and 2002, respectively.
Set forth below is certain information with respect to the Sponsor's
directors and officers. The business address for each of them is c/o
Winthrop Management, LLC, 7 Bulfinch Place, Suite 500, P.O. Box 9507,
Boston, Massachusetts 02114-9507.
NAME POSITION WITH SPONSOR DIRECTOR/OFFICER SINCE PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS
---- --------------------- ---------------------- --------------------------------------------
Richard J. McCready Director and President 2002 Mr. McCready joined NorthStar Capital in
and Secretary 1998. From 1990 until 1998 he was President,
Chief Operating Officer and a director of
First Winthrop Corporation. Previous to
joining First Winthrop Corporation in 1990,
he was in the Corporate and Real Estate
Finance group at the law firm of Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
Steven Kauff Director, Vice President July 1999 Mr. Kauff joined NorthStar Capital in July
and Treasurer 1999. From 1996 to 1999 Mr Kauff was a
Manager in the Real Estate and Hospitality
Services Group of Arthur Andersen LLP .
Prior to joining Arthur Andersen LLP, Mr.
Kauff was with Price Waterhouse LLP in the
Real Estate Industry Services Group.
6. DISTRIBUTION PAYABLE
The Trustee declared a $267,957 ($96.70 per unit) distribution payable to
unitholders of record as of December 31, 2003. Such distribution was paid
on January 15, 2004.
7. SIGNIFICANT TRANSACTIONS
In May 1996, the tenant of the Huntsville, Texas property, one of five
properties owned by Elway Associates, exercised the economic
discontinuance clause contained in its lease. This clause generally allows
the tenant to purchase the property for a predetermined amount set forth
in the lease upon declaring that continued use and occupancy of the
property was economically unsuitable. As a result, Elway Associates wire
transferred sale proceeds of $1,149,699 to the Fund's Trustee in partial
satisfaction of the Elway payment obligation. The amount received in this
case was substantially in excess of the portion of the Minimum Termination
Amount allocable to the Huntsville, Texas property. While the Trust
Indenture provides for the acceptance of involuntary sale (such as in an
economic discontinuance) proceeds in prepayment of a payment obligation in
which the underlying partnership has a single property (lease), it does
not specifically provide for acceptance of involuntary sale proceeds in
partial prepayment of a payment obligation where the underlying
partnership has more than one property (lease) comprising the payment
obligation, as is the case here. The Sponsor believes that the original
intent of the Trust Indenture was to allow for such partial prepayment.
However, the Trustee that received the Elway sale proceeds did not agree
to allow the Elway payment in partial satisfaction of the associated
payment obligation and placed the Elway sale proceeds in an
interest-bearing account separate from that of the Fund, pending
resolution of this issue. The Elway primary and
renewal term payments were reduced on a pro-rata basis to reflect the
involuntary sale of the Huntsville, Texas property.
Effective March 29, 1998, the Sponsor arranged for the replacement of the
Trustee for both Fund II and the Fund with a new trustee (the "Successor
Trustee") which had a broader interpretation of the Trust Indenture with
regard to partial prepayments received from a multi-property partnership.
On April 1, 1998, a supplemental agreement to the original Trust Indenture
was entered into between the Successor Trustee for the Fund, the Sponsor
of the Fund, and the Partnerships (including Elway) that have Payment
Obligations to the Fund. Such agreement allows for, among other things,
the partial prepayment of a multi-property Partnership's Payment
Obligation in the event of an involuntary sale of one of its properties.
As a result of such agreement, the payment of $1,149,699 made by Elway
Associates in May of 1996 in connection with an involuntary sale was
accepted by the Successor Trustee as a partial prepayment of Elway's
Payment Obligation and was subsequently distributed, together with
interest earned since its receipt of $103,526, on June 5, 1998.
The payment made by Elway was insufficient to cover that portion of
Elway's Payment Obligation allocable to the Huntsville Property. In
accordance with the terms of the Supplemental Agreement, such shortfall,
amounting to $381,150 (including accrued interest), was repaid during 1998
from cash flow generated by Elway after the payment of the reduced
payments to the Fund and was included in subsequent distributions made for
1998.
The general partner of Walstaff Associates ("Walstaff") sold the sole
Walstaff property on May 31, 2003 to the tenant of the property, pursuant
to the purchase option defined in the lease (a voluntary sale under the
terms of the Trust Indenture). As a result, Walstaff wired $3,671,816 to
the Fund's Trustee in full satisfaction of the Walstaff payment
obligation. Such proceeds along with interest earned thereon were
distributed to Unitholders in July 2003.
8. IMPAIRMENT OF SECURITY
The carrying value of the Partnership's portfolio investment in Denville
Associates, LP was reduced to its estimated fair market value as of
December 31, 2002 due to a decline in the credit rating of the lessee. In
2003, the lessee's credit rating rebounded and its estimated fair market
value increased accordingly.
Integrated ARROs Fund I
Schedule of Selected Per Unit Operating Performance, Ratios and
Supplemental Data
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------
2003 2002 2001 2000 1999
---------- ---------- ---------- ---------- ----------
Per Unit Operating Performance
Net asset value, beginning of period $ 3,604.93 $ 3,784.81 $ 3,482.78 $ 3,727.45 $ 3,754.79
Net investment income 872.44 405.02 780.32 293.36 509.65
Distributions (1,326.96) (584.90) (478.29) (538.03) (536.99)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period $ 3,150.41 $ 3,604.93 $ 3,784.81 $ 3,482.78 $ 3,727.45
========== ========== ========== ========== ==========
Total investment return $ 872.44 $ 405.02 $ 780.32 $ 293.36 $ 509.65
========== ========== ========== ========== ==========
Ratios/Supplemental Data
Net assets, end of period $8,729,775 $9,989,251 $10,487,712 $9,650,779 $10,328,758
Ratio of expenses to average net assets 0.41% 0.50% 0.37% 0.34% 0.32%
Ratio of net investment income to average
net assets 25.83% 10.96% 21.47% 8.14% 13.62%
Portfolio turnover rate N/A N/A N/A N/A N/A
Integrated ARROs Fund I
Schedule of Portfolio Investments
December 31, 2003
Discount To
Arrive at Lower
Partnership / of Fair Market Value
Date Payment Original Simple or Minimum
Obligation Property Type of Principal Interest Accrued Termination
Incurred Lessee Location(s) Property Amount Rate Interest Amount
- ----------------------------------------------------------------------------------------------------------------------
Walando Walgreen Orlando, FL Office/ $ 820,000 13.0% $ 1,337,244 $ 1,143,651
03/18/81 Company Warehouse
Building
Santex (2) Albertson's Venice, FL Retail 570,000 17.0% 1,007,349 694,440
07/01/81 Inc. Livermore, CA Facilities
Lando Albertson's Portland, OR Retail 783,451 16.0% 1,968,977 1,660,854
10/21/81 Inc. Orlando, FL Facilities
(amended Huntsville, AL
04/15/82)
Denville Xerox Lewisville, TX Plant 963,048 15.0% 2,400,733 2,121,336
12/22/81 Corporation Facility
(amended
01/27/84)
Elway Safeway Billings, MT Retail 1,429,042 18.5% 4,020,594 3,160,923
03/18/82 Stores, Inc. Fort Worth, TX Facilities (4)
Aurora, CO
Mamoth Lakes, CA
Walcreek Hercules Walnut Creek, Office 1,306,709 18.5% 2,556,399 1,652,567
08/01/82 Credit Inc. CA Building
(amended (3)
06/29/83,
12/3/84)
---------- ----------- -----------
$5,872,250 $13,291,296 $10,433,771
========== =========== ===========
Lower of
Partnership / Fair Market Value
Date Payment Periodic or Minimum
Obligation Payment During Termination
Incurred Primary Term (1) Amount
- ---------------------------------------------------
Walando 5/1/96-4/1/06 $1,013,593
03/18/81 $11,883/mo
Santex (2) 9/1/96-8/1/06 882,909
07/01/81 $13,342/mo
Lando 7/1/97-1/1/07 1,091,574
10/21/81 $62,656/semi
(amended
04/15/82)
Denville 8/1/98-7/1/08 1,242,445
12/22/81 $12,038/mo
(amended
01/27/84)
Elway 7/1/97-6/1/07 2,288,713
03/18/82 $22,027/mo (4) (4)
Walcreek 10/1/97-9/1/07 2,210,541
08/01/82 $30,155/mo
(amended
06/29/83,
12/3/84)
----------
$8,729,775
==========
(1) Primary Term of the applicable net lease.
(2) Two Payment Obligations, one for each property, treated as one.
(3) Guaranteed by Hercules Incorporated
(4) As adjusted, due to the exercise of economic discontinuance in the
Huntsville, Texas lease.
INTEGRATED ARROS FUND I
SCHEDULE OF ACCRUED INTEREST ON OUTSTANDING PAYMENT OBLIGATIONS
JANUARY 1, 2003 THROUGH DECEMBER 31, 2003
ACCRUED ACCRUED ACCRUED ACCRUED ACCRUED
DATE INTEREST DATE INTEREST DATE INTEREST DATE INTEREST DATE INTEREST
--------- ---------- --------- ---------- --------- ---------- --------- ---------- --------- ----------
01-Jan-03 15,796,456 23-Feb-03 15,876,173 17-Apr-03 15,866,446 09-Jun-03 13,340,535 01-Aug-03 13,241,206
02-Jan-03 15,799,648 24-Feb-03 15,879,365 18-Apr-03 15,869,637 10-Jun-03 13,343,218 02-Aug-03 13,243,890
03-Jan-03 15,802,839 25-Feb-03 15,882,557 19-Apr-03 15,872,829 11-Jun-03 13,345,901 03-Aug-03 13,246,573
04-Jan-03 15,806,031 26-Feb-03 15,885,749 20-Apr-03 15,876,021 12-Jun-03 13,348,585 04-Aug-03 13,249,256
05-Jan-03 15,809,223 27-Feb-03 15,888,940 21-Apr-03 15,879,213 13-Jun-03 13,351,268 05-Aug-03 13,251,940
06-Jan-03 15,812,415 28-Feb-03 15,892,132 22-Apr-03 15,882,404 14-Jun-03 13,353,951 06-Aug-03 13,254,623
07-Jan-03 15,815,606 01-Mar-03 15,805,879 23-Apr-03 15,885,596 15-Jun-03 13,356,635 07-Aug-03 13,257,306
08-Jan-03 15,818,798 02-Mar-03 15,809,071 24-Apr-03 15,888,788 16-Jun-03 13,359,318 08-Aug-03 13,259,990
09-Jan-03 15,821,990 03-Mar-03 15,812,262 25-Apr-03 15,891,980 17-Jun-03 13,362,001 09-Aug-03 13,262,673
10-Jan-03 15,825,182 04-Mar-03 15,815,454 26-Apr-03 15,895,171 18-Jun-03 13,364,685 10-Aug-03 13,265,356
11-Jan-03 15,828,373 05-Mar-03 15,818,646 27-Apr-03 15,898,363 19-Jun-03 13,367,368 11-Aug-03 13,268,040
12-Jan-03 15,831,565 06-Mar-03 15,821,837 28-Apr-03 15,901,555 20-Jun-03 13,370,052 12-Aug-03 13,270,723
13-Jan-03 15,834,757 07-Mar-03 15,825,029 29-Apr-03 15,904,747 21-Jun-03 13,372,735 13-Aug-03 13,273,407
14-Jan-03 15,837,949 08-Mar-03 15,828,221 30-Apr-03 15,907,938 22-Jun-03 13,375,418 14-Aug-03 13,276,090
15-Jan-03 15,841,140 09-Mar-03 15,831,413 01-May-03 15,821,685 23-Jun-03 13,378,102 15-Aug-03 13,278,773
16-Jan-03 15,844,332 10-Mar-03 15,834,604 02-May-03 15,824,877 24-Jun-03 13,380,785 16-Aug-03 13,281,457
17-Jan-03 15,847,524 11-Mar-03 15,837,796 03-May-03 15,828,069 25-Jun-03 13,383,468 17-Aug-03 13,284,140
18-Jan-03 15,850,716 12-Mar-03 15,840,988 04-May-03 15,831,260 26-Jun-03 13,386,152 18-Aug-03 13,286,823
19-Jan-03 15,853,907 13-Mar-03 15,844,180 05-May-03 15,834,452 27-Jun-03 13,388,835 19-Aug-03 13,289,507
20-Jan-03 15,857,099 14-Mar-03 15,847,371 06-May-03 15,837,644 28-Jun-03 13,391,518 20-Aug-03 13,292,190
21-Jan-03 15,860,291 15-Mar-03 15,850,563 07-May-03 15,840,836 29-Jun-03 13,394,202 21-Aug-03 13,294,873
22-Jan-03 15,863,482 16-Mar-03 15,853,755 08-May-03 15,844,027 30-Jun-03 13,396,885 22-Aug-03 13,297,557
23-Jan-03 15,866,674 17-Mar-03 15,856,947 09-May-03 15,847,219 01-Jul-03 13,247,467 23-Aug-03 13,300,240
24-Jan-03 15,869,866 18-Mar-03 15,860,138 10-May-03 15,850,411 02-Jul-03 13,250,151 24-Aug-03 13,302,923
25-Jan-03 15,873,058 19-Mar-03 15,863,330 11-May-03 15,853,603 03-Jul-03 13,252,834 25-Aug-03 13,305,607
26-Jan-03 15,876,249 20-Mar-03 15,866,522 12-May-03 15,856,794 04-Jul-03 13,255,517 26-Aug-03 13,308,290
27-Jan-03 15,879,441 21-Mar-03 15,869,714 13-May-03 15,859,986 05-Jul-03 13,258,201 27-Aug-03 13,310,973
28-Jan-03 15,882,633 22-Mar-03 15,872,905 14-May-03 15,863,178 06-Jul-03 13,260,884 28-Aug-03 13,313,657
29-Jan-03 15,885,825 23-Mar-03 15,876,097 15-May-03 15,866,370 07-Jul-03 13,263,568 29-Aug-03 13,316,340
30-Jan-03 15,889,016 24-Mar-03 15,879,289 16-May-03 15,869,561 08-Jul-03 13,266,251 30-Aug-03 13,319,023
31-Jan-03 15,892,208 25-Mar-03 15,882,481 17-May-03 15,872,753 09-Jul-03 13,268,934 31-Aug-03 13,321,707
01-Feb-03 15,805,955 26-Mar-03 15,885,672 18-May-03 15,875,945 10-Jul-03 13,271,618 01-Sep-03 13,234,945
02-Feb-03 15,809,147 27-Mar-03 15,888,864 19-May-03 15,879,137 11-Jul-03 13,274,301 02-Sep-03 13,237,629
03-Feb-03 15,812,338 28-Mar-03 15,892,056 20-May-03 15,882,328 12-Jul-03 13,276,984 03-Sep-03 13,240,312
04-Feb-03 15,815,530 29-Mar-03 15,895,248 21-May-03 15,885,520 13-Jul-03 13,279,668 04-Sep-03 13,242,995
05-Feb-03 15,818,722 30-Mar-03 15,898,439 22-May-03 15,888,712 14-Jul-03 13,282,351 05-Sep-03 13,245,679
06-Feb-03 15,821,914 31-Mar-03 15,901,631 23-May-03 15,891,904 15-Jul-03 13,285,034 06-Sep-03 13,248,362
07-Feb-03 15,825,105 01-Apr-03 15,815,378 24-May-03 15,895,095 16-Jul-03 13,287,718 07-Sep-03 13,251,045
08-Feb-03 15,828,297 02-Apr-03 15,818,570 25-May-03 15,898,287 17-Jul-03 13,290,401 08-Sep-03 13,253,729
09-Feb-03 15,831,489 03-Apr-03 15,821,761 26-May-03 15,901,479 18-Jul-03 13,293,084 09-Sep-03 13,256,412
10-Feb-03 15,834,681 04-Apr-03 15,824,953 27-May-03 15,904,671 19-Jul-03 13,295,768 10-Sep-03 13,259,095
11-Feb-03 15,837,872 05-Apr-03 15,828,145 28-May-03 15,907,862 20-Jul-03 13,298,451 11-Sep-03 13,261,779
12-Feb-03 15,841,064 06-Apr-03 15,831,337 29-May-03 15,911,054 21-Jul-03 13,301,134 12-Sep-03 13,264,462
13-Feb-03 15,844,256 07-Apr-03 15,834,528 30-May-03 15,914,246 22-Jul-03 13,303,818 13-Sep-03 13,267,145
14-Feb-03 15,847,448 08-Apr-03 15,837,720 31-May-03 15,917,437 23-Jul-03 13,306,501 14-Sep-03 13,269,829
15-Feb-03 15,850,639 09-Apr-03 15,840,912 01-Jun-03 13,319,068 24-Jul-03 13,309,184 15-Sep-03 13,272,512
16-Feb-03 15,853,831 10-Apr-03 15,844,104 02-Jun-03 13,321,751 25-Jul-03 13,311,868 16-Sep-03 13,275,195
17-Feb-03 15,857,023 11-Apr-03 15,847,295 03-Jun-03 13,324,435 26-Jul-03 13,314,551 17-Sep-03 13,277,879
18-Feb-03 15,860,215 12-Apr-03 15,850,487 04-Jun-03 13,327,118 27-Jul-03 13,317,235 18-Sep-03 13,280,562
19-Feb-03 15,863,406 13-Apr-03 15,853,679 05-Jun-03 13,329,801 28-Jul-03 13,319,918 19-Sep-03 13,283,246
20-Feb-03 15,866,598 14-Apr-03 15,856,871 06-Jun-03 13,332,485 29-Jul-03 13,322,601 20-Sep-03 13,285,929
21-Feb-03 15,869,790 15-Apr-03 15,860,062 07-Jun-03 13,335,168 30-Jul-03 13,325,285 21-Sep-03 13,288,612
22-Feb-03 15,872,982 16-Apr-03 15,863,254 08-Jun-03 13,337,851 31-Jul-03 13,327,968 22-Sep-03 13,291,296
ACCRUED ACCRUED
DATE INTEREST DATE INTEREST
--------- ---------- --------- ----------
23-Sep-03 13,293,979 15-Nov-03 13,257,307
24-Sep-03 13,296,662 16-Nov-03 13,259,990
25-Sep-03 13,299,346 17-Nov-03 13,262,673
26-Sep-03 13,302,029 18-Nov-03 13,265,357
27-Sep-03 13,304,712 19-Nov-03 13,268,040
28-Sep-03 13,307,396 20-Nov-03 13,270,723
29-Sep-03 13,310,079 21-Nov-03 13,273,407
30-Sep-03 13,312,762 22-Nov-03 13,276,090
01-Oct-03 13,226,001 23-Nov-03 13,278,773
02-Oct-03 13,228,684 24-Nov-03 13,281,457
03-Oct-03 13,231,367 25-Nov-03 13,284,140
04-Oct-03 13,234,051 26-Nov-03 13,286,823
05-Oct-03 13,236,734 27-Nov-03 13,289,507
06-Oct-03 13,239,417 28-Nov-03 13,292,190
07-Oct-03 13,242,101 29-Nov-03 13,294,873
08-Oct-03 13,244,784 30-Nov-03 13,297,557
09-Oct-03 13,247,468 01-Dec-03 13,210,795
10-Oct-03 13,250,151 02-Dec-03 13,213,479
11-Oct-03 13,252,834 03-Dec-03 13,216,162
12-Oct-03 13,255,518 04-Dec-03 13,218,845
13-Oct-03 13,258,201 05-Dec-03 13,221,529
14-Oct-03 13,260,884 06-Dec-03 13,224,212
15-Oct-03 13,263,568 07-Dec-03 13,226,895
16-Oct-03 13,266,251 08-Dec-03 13,229,579
17-Oct-03 13,268,934 09-Dec-03 13,232,262
18-Oct-03 13,271,618 10-Dec-03 13,234,945
19-Oct-03 13,274,301 11-Dec-03 13,237,629
20-Oct-03 13,276,984 12-Dec-03 13,240,312
21-Oct-03 13,279,668 13-Dec-03 13,242,995
22-Oct-03 13,282,351 14-Dec-03 13,245,679
23-Oct-03 13,285,034 15-Dec-03 13,248,362
24-Oct-03 13,287,718 16-Dec-03 13,251,045
25-Oct-03 13,290,401 17-Dec-03 13,253,729
26-Oct-03 13,293,085 18-Dec-03 13,256,412
27-Oct-03 13,295,768 19-Dec-03 13,259,095
28-Oct-03 13,298,451 20-Dec-03 13,261,779
29-Oct-03 13,301,135 21-Dec-03 13,264,462
30-Oct-03 13,303,818 22-Dec-03 13,267,146
31-Oct-03 13,306,501 23-Dec-03 13,269,829
01-Nov-03 13,219,740 24-Dec-03 13,272,512
02-Nov-03 13,222,423 25-Dec-03 13,275,196
03-Nov-03 13,225,106 26-Dec-03 13,277,879
04-Nov-03 13,227,790 27-Dec-03 13,280,562
05-Nov-03 13,230,473 28-Dec-03 13,283,246
06-Nov-03 13,233,156 29-Dec-03 13,285,929
07-Nov-03 13,235,840 30-Dec-03 13,288,612
08-Nov-03 13,238,523 31-Dec-03 13,291,296
09-Nov-03 13,241,206
10-Nov-03 13,243,890
11-Nov-03 13,246,573
12-Nov-03 13,249,256
13-Nov-03 13,251,940
14-Nov-03 13,254,623
INTEGRATED ARROS FUND I
-----------------------
FORM N-CSR DECEMBER 31, 2003
----------------------------
CERTIFICATIONS
I, Richard J McCready, certify that:
1. I have reviewed this report on Form N-CSR of Integrated Arros Fund I;
2. Based on my knowledge, this 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
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations, changes in net
assets and cash flows (if the financial statements are required to include
a statement of cash flows) of the registrant as of, and for, the periods
presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Rule 30a-3(C) under the Investment Company Act of 1940) and internal
control over financial reporting (as defined in Rule 30a-3(d) under the
Investment Company Act of 1940) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, 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 report is being prepared;
b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of a date
within 90 days prior to the filing date of this report based on such
evaluation; and
d) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal half-year (the registrant's second fiscal half-year
in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control over financial reporting.
Date: February 17, 2004 /s/ Richard J. McCready
-----------------------
Richard J. McCready
President, Secretary
and Director
INTEGRATED INTEGRATED ARROS FUND I
----------------------------------
FORM N-CSR DECEMBER 31, 2003
----------------------------
CERTIFICATIONS
I, Steven B. Kauff, certify that:
1. I have reviewed this report on Form N-CSR of Integrated Arros Fund I;
2. Based on my knowledge, this 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
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations, changes in net
assets and cash flows (if the financial statements are required to include
a statement of cash flows) of the registrant as of, and for, the periods
presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Rule 30a-3(C) under the Investment Company Act of 1940) and internal
control over financial reporting (as defined in Rule 30a-3(d) under the
Investment Company Act of 1940) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, 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 report is being prepared;
b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of a date
within 90 days prior to the filing date of this report based on such
evaluation; and
d) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal half-year (the registrant's second fiscal half-year
in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control over financial reporting.
Date: February 17, 2004 /s/ Steven B. Kauff
-------------------------
Steven B. Kauff
Vice President, Treasurer
and Director
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Name of Issuer: INTEGRATED ARROS FUND I
In connection with the Report on Form N-CSR of the above-named issuer that
is accompanied by this certification, the undersigned hereby certifies, to his
knowledge, that:
1. The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the issuer.
Date: February 17, 2004
/s/Richard J. McCready
-------------------
Richard J. McCready
President, Secretary
and Director
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Name of Issuer: INTEGRATED ARROS FUND I
In connection with the Report on Form N-CSR of the above-named issuer that
is accompanied by this certification, the undersigned hereby certifies, to his
knowledge, that:
3. The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
4. The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the issuer.
Date: February 17, 2004
/s/Steven B. Kauff
---------------
Steven B. Kauff
Vice President, Treasurer
and Director