-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Mp8yw7Fyjdq9j3MH6MFS83yYo7/ZgRPNNiCmOC3qtm0zGMy6cajB6uhPU70QGQ0b eMcgg9ZtabE0E5bjCA78Xw== 0000711512-97-000013.txt : 19971021 0000711512-97-000013.hdr.sgml : 19971021 ACCESSION NUMBER: 0000711512-97-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971020 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN REPUBLIC REALTY FUND I CENTRAL INDEX KEY: 0000711512 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 391421936 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-11578 FILM NUMBER: 97697854 BUSINESS ADDRESS: STREET 1: 6210 CAMPBELL RD STREET 2: STE 140 CITY: DALLAS STATE: TX ZIP: 75248 BUSINESS PHONE: 2143808000 MAIL ADDRESS: STREET 1: 6210 CAMPBELL RD STREET 2: STE 140 CITY: DALLAS STATE: TX ZIP: 75248 10-Q 1 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 September 30, 1997 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) 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 September 30, 1997 and December 31, 1996 Page 3 Consolidated Statements of Operations for the Three Months Ended September 30, 1997and 1996 Page 4 Consolidated Statements of Cash Flows for the Three Months Ended September 30, 1997 and 1996 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, 1996, are Unaudited. PART 1. FINANCIAL INFORMATION Item 1. Financial Statements ---------------------------------- AMERICAN REPUBLIC REALTY FUND I Condensed Consolidated Balance Sheets September 30, December 31, 1997 1996 ------ ------ (Unaudited) ASSETS Real Estate assets, at cost Land $1,822,718 $1,822,718 Buildings and improvements 14,994,509 14,994,509 ------------- ------------- 16,817,227 16,817,227 Less: Accumulated depreciation (8,850,635) (8,397,635) ------------ ------------- Real Estate,net 7,966,592 8,419,592 Cash including cash investments 2,081 23,211 Escrow deposits 699,797 182,966 Prepaid Expenses 258,871 19,614 ----------- ----------- TOTAL ASSETS $8,927,341 $8,645,383 =========== ============ LIABILITIES AND PARTNERS'EQUITY: LIABILITES Mortgage and notes payable $10,785,087 $7,239,679 Note Payable to affiliates 582,703 2,935,310 Amounts due affiliates 6,957 1,282,696 Real estate taxes payable 200,056 0 Security deposits 50,981 45,746 Accounts payable & 170,731 117,202 accrued expenses ------------ ---------- Total liabilities 11,796,515 11,620,633 ------------ ------------ PARTNERS CAPITAL (DEFICIT) Limited Partners (2,926,177) (3,031,192) General Partner 57,003 55,942 ------------- ------------- Total Partners Capital (Deficit) (2,869,174) (2,975,250) ------------- ------------- TOTAL LIABILITES AND PARTNER $8,927,341 $8,645,383 DEFICIT =========== =========== See notes to Condensed Consolidated Financial Statements AMERICAN REPUBLIC REALTY FUND I Condensed Consolidated Statement of Operations (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, ---------------------- ------------------- REVENUES 1997 1996 1997 1996 ---- ---- ---- ---- Rental income $606,530 $606,345 1,842,164 1,783,439 Other property 15,812 9,829 39,802 27,789 --------- -------- --------- --------- Total revenues 622,342 616,174 1,881,966 1,811,228 EXPENSES Salaries & wages 67,875 63,209 208,513 201,670 Maintenance & repairs 206,704 63,836 318,222 173,057 Utilities 40,825 44,722 133,836 137,312 Real estate taxes 66,900 60,900 200,700 182,700 General administrative 28,665 25,601 58,086 67,967 Contract services 29,282 24,721 88,747 71,955 Insurance 15,227 12,098 40,974 34,962 Interest 387,527 66,971 513,794 202,821 Depreciation and amortization 165,871 155,000 467,871 465,000 Property management fees (a) 31,029 30,825 93,983 90,608 --------- -------- -------- --------- Total expenses 1,039,905 547,883 2,124,726 1,628,052 NET INCOME before ($417,563) $68,291 ($242,760) $183,176 extraordinary item Extraordinary item- $348,836 0 348,836 0 Gain on Debt Extinguish Net Income ($68,727) 68,291 106,076 183,176 =========== ========== ========== ========= NET INCOME PER UNITS $ (6.25) $ 6.21 $ 9.64 $ 16.65 ============ ========== ========= ========= See Notes to Condensed Consolidated Financial Statements AMERICAN REPUBLIC REALTY FUND I Condensed Consolidated Statement of Cash Flows Nine Months Ended September 30, 1997 1996 ---- ---- CASH FLOWS FROM OPERATING ACITIVTY Net income (loss) ($242,760) $183,176 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 53,000 465,000 Extraordinary Item 348,836 Net Effect of changes in operating accounts Escrow deposits (516,831) (222,908) Prepaid expenses (239,257) (14,970) Accrued real estate taxes 200,056 168,700 Security deposits 5,235 9,075 Accounts payable 53,529 120,811 Other assets 0 (9,653) --------- ---------- Net cash provided by (used for) 61,808 699,231 operating activities --------- ----------- CASH FLOWS FROM INVESTING ACTIVITES Proceeds from mortgage notes (10,800,000) 0 Repayment of mortgage notes payable 14,345,408 (636,1040) Repayment of notes payable to affiliates (2,352,607) 0 Repayment from amounts due affiliates (1,275,739) (205,153) Proceeds of amounts due affiliates 0 208,407 ---------- --------- Net cash used for investing activities (82,938) (632,850) ---------- -------- NET INCREASE (DECREASE) IN CASH (21,130) 66,381 AND CASH EQUVILENTS CASH AND CASH EQUIVELNTS, 23,211 19,047 BEGINNING OF PERIOD CASH AND CASH EQUIVELNTS, END OF $2,081 $85,428 PERIOD See Notes to Condensed Consolidated Financial Statements 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 NINE MONTHS 1997 COMPARED TO FIRST NINE MONTHS 1996 At September 30, 1997 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 93.70% for the first Nine Months of 1997, as compared to 94.8% for the first Nine Months of 1996. Revenue from property operations increased $70,738, or 3.91%, for the first Nine Months of 1997, as compared to the 1996 first Nine Months. The increase in other income of $12,013 or 43.23% is primarily due to a increase in late and returned check charges over the prior year. The following table illustrates the components: Increase Per Cent (Decreas Change e) Rental income $58,725 3.29% Other property 12,013 43.23% $70,738 3.91% Property operating expenses increased $496,674, or 30.51%, for the first Nine Months of 1997, as compared to the same period in 1996, primarily due to increases in interest expense and maintenance & repairs. The increase in interest expense is due to the interest paid on the new mortgages and special limited partner equity. Maintenance and repairs increased primarily due to maintenance projects required by under the new mortgage notes. Contract services increased 16,792 or 23.34% due to increased costs for lawn care and rubbish. Insurance costs rose $6,012 or 17.2% due to higher overall insurance costs at the annual renewal. The following table illustrates the components by category: Increase Per Cent (Decrease) Change Salaries & wages $6,843 3.39% Maintenance & repairs 145,165 83.88% Utilities (3,476) 2.53% Real estate taxes 18,000 9.85% General administrative (9,881) 14.54% Contract services 16,792 23.34% Insurance 6,012 17.20% Interest 310,973 153.32% Depreciation and 2,871 0.62% amortization Property management fees 3,375 3.72% (a) Net Increase (Decrease) $496,674 30.51% THIRD QUARTER 1997 COMPARED TO THIRD QUARTER 1996 At September 30, 1997 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 93.8% for the third quarter of 1997, as compared to 97% for the third quarter of 1996. Revenue from property operations increased $6,168, or 1.00%, for the third quarter of 1997, as compared to the 1996 third quarter. The increase in other income of $5,983 or 60.87% is primarily due to an increase in late and returned check charges from the prior year. The following table illustrates the components: Increase Percent (Decrease) Change Rental income $185 0.03% Other property 5,983 60.87 % Net Increase $6,168 1.00% (Decrease) Property operating expenses increased $492,022, or 89.8%, for the third quarter of 1997, as compared to the same period in 1996, primarily due to increases in interest expense and maintenance & repairs. The increase in interest expense is due to the interest paid on the new mortgages and special limited partner equity. Maintenance and repairs increased primarily due to maintenance projects required by under the new mortgage notes. Contract services increased $4,561 or 18.45% due to increased costs for lawn care and rubbish. Insurance costs rose $3,129 or 25.86% due to higher overall insurance costs at the annual renewal.. The following table illustrates the components by category: Increase Percent (Decrease) Change Salaries & wages $4,666 7.38% Maintenance & 142,868 223.8 repairs 0% Utilities (3,897) 8.71% Real estate taxes 6,000 9.85% General 3,064 11.97 administrative % Contract services 4,561 18.45 % Insurance 3,129 25.86 % Interest 320,556 478.6 5% Depreciation and 10,871 7.01% amortization Property management 204 0.66% fees (a) Net Increase $492,022 89.80% (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 September 30, 1997, the Partnership had $2,081 in cash and cash equivalents as compared to $23,211 as of December 31, 1996 . The net decrease in cash of $21,130 is principally due to the partnership reducing it debt to affiliates. Each asset of the fund refinanced its debt during the quarter. The fund retired debt with a face value of $6,500,000 and replace it 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. 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 $582,703 at September 30,1997. 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. The properties were encumbered by two non-recourse mortgage notes as of December 31, 1996. These mortgages payable had a carrying value of $7,239,679 at December 31, 1996. The mortgage notes were entered into during 1993 and 1992 to refinance certain mortgage notes which were in default. The Partnership accounted for these transactions as troubled debt restructuring, and accordingly, are being carried at the total future cash outflows for principal and interest. Accordingly, no interest expense was or will be recorded on these notes. Additionally, the general partner has provided funding to the Partnership in the form of notes payable with balances at December 31,1996 totaling $2,935,310 which accrue interest at prime plus 2% and are due on June 30, 2001, or upon demand. Additional funds have been provided by the general partner in the form of advances which totaled $1,282,696 at December 31, 1996. 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. Formerly, the Partnership's required principal payments due under the stated terms of the Partnership's mortgage notes payable and notes payable to affiliates were $124,505, $2,580,216 and $4,021,625 for each of the next three years. The Partnership was not generating sufficient cash flows to meet these obligations. Management believed it would be able to refinance these debt obligations, and as discussed above management did obtain refinancing. 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 September 30, 1997. 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: October 17, 1997 EX-27 2
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BOTH THE SEPTEMBER 30, 1997 BALANCE SHEET AND STATEMENT OF INCOME AND EXPENSES AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000711512 AMERICAN REPUBLIC REALTY FUND I 9-MOS DEC-31-1997 SEP-30-1997 2,081 0 0 0 0 0 16,817,227 8,850,635 8,927,341 0 10,785,087 0 0 0 (2,869,174) 8,927,341 0 1,842,164 0 0 1,610,932 0 513,794 0 0 0 0 0 0 106,076 9.64 0
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