-----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, A/XhDGz1IMmfbxFcBZuAuJnROGQZI09ndy4+CjUlLAxpDkn4Qr8AVNr8L/+FzlKa TZs5vez7JMeicuMLJ+HcXw== 0000711512-98-000004.txt : 19980424 0000711512-98-000004.hdr.sgml : 19980424 ACCESSION NUMBER: 0000711512-98-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980422 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: 98598555 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 March 31, 1998 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 March 31, 1998 and December 31, 1997 Page 3 Consolidated Statements of Operations for the Three Months Ended March 31, 1998 and 1997 Page 4 Consolidated Statements of Cash Flows for the Three Months Ended March 31, 1998 and 1997 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, in so far as they relate to the period subsequent to December 31, 1997, are Unaudited. PART 1. FINANCIAL INFORMATION Item 1. Financial Statements AMERICAN REPUBLIC REALTY FUND I Condensed Consolidated Balance Sheets March 31 December 31 1998 1997 (Unaudited) ASSETS Real Estate assets, at cost Land $1,822,718 $1,822,718 Buildings and improvements 15,348,507 15,348,507 17,171,225 17,171,225 Less: Accumulated depreciation (9,197,393) (9,037,393) Real Estate,net 7,973,832 8,133,832 Cash including cash investments 67,404 16,900 Escrow deposits 519,212 702,955 Prepaid Expenses 13,464 20,686 Deferred Financing Fees 203,087 217,958 TOTAL ASSETS $8,776,999 $9,092,331 LIABILITIES AND PARTNERS'EQUITY: LIABILITIES Mortgage and notes Payable $10,739,160 $10,769,977 Note Payable to affiliates 690,752 759,788 Amounts due affiliates 123 45,235 Real estate taxes payable 67,500 0 Security deposits 48,169 46,591 Accounts payable & 191,048 306,030 accrued expenses Total liabilities 11,736,752 11,927,621 PARTNERS CAPITAL (DEFICIT) Limited Partners (3,015,850) (2,892,632) General Partner 56,097 57,342 Total Partners Capital (Deficit) (2,959,753) (2,835,290) TOTAL LIABILITIES AND $8,776,999 $9,092,331 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 1998 1997 Rental income $638,847 $599,779 Other property 11,740 8,984 Total revenues 650,587 608,763 EXPENSES Salaries & wages 61,627 63,277 Maintenance & repairs 87,568 52,731 Utilities 48,033 51,936 Real estate taxes 67,500 66,900 General administrative 26,242 7,532 Contract services 28,218 28,126 Insurance 15,223 12,098 Interest 233,240 61,727 Depreciation and amortization 174,871 151,000 Property management fees (a) 32,528 30,419 Total expenses 775,050 525,746 Net Income ($124,463) $83,017 NET INCOME PER UNIT $ (11.31) $ 7.55 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, 1998 1997 CASH FLOWS FROM OPERATING ACTIVITY Net income (loss) ($124,463) $83,017 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 160,000 151,000 Net Effect of changes in operating accounts Escrow deposits 183,743 (60,099) Prepaid expenses 7,222 6,152 Accrued real estate taxes 67,500 66,900 Security deposits 1,578 (489) Accounts payable (114,982) 30,890 Other assets 14,871 0 Net cash provided by 195,469 277,371 (used for) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Repayment of mortgage notes payable (30,817) (220,847) Repayment of notes payable to affiliates (69,036) 0 Repayment of amounts due affiliates (45,112) (23,255) Net cash used for investing activities (144,965) (244,102) NET INCREASE (DECREASE) IN CASH AND 50,504 33,269 CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING 16,900 23,211 OF PERIOD CASH AND CASH EQUIVALENTS, END OF $67,404 $56,480 PERIOD 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 THREE MONTHS 1998 COMPARED TO FIRST THREE MONTHS 1997 At March 31, 1998 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 95.0% for the first Three Months of 1998, as compared to 90.25% for the first Three Months of 1997. Revenue from property operations increased $39,068, or 6.51%, for the first Three Months of 1998, as compared to the 1997 first Three Months. The increase in other income of $2,756 or 30.68% is primarily due to a increase in late and returned check charges over the prior year. The following table illustrates the components: Increase Percent (Decrease) Change Rental income $39,068 6.51% Other property 2,756 30.68% Net Increase (Decrease) $41,824 6.87% Property operating expenses increased $249,304, or 47.42%, for the first Three Months of 1998, as compared to the same period in 1997, primarily due to increases in interest expense and maintenance & repairs. The increase in interest expense is due to the refinancing of the properties within the fund. Maintenance and repairs increased primarily due to maintenance projects required by under the new mortgage notes. Insurance costs rose $3,125 or 25.83% due to higher overall insurance costs at the annual renewal. The following table illustrates the components by category: Increase Percent (Decrease) Change Salaries & wages $(1,650) 2.61% Maintenance & repairs 34,837 66.07% Utilities (3,903) 7.52% Real estate taxes 600 0.90% General administrative 18,710 248.41% Contract services 92 0.33% Insurance 3,125 25.83% Interest 171,513 277.86% Depreciation and amortization 23,871 15.81% Property management fees (a) 2,109 6.93% Net Increase (Decrease) $249,304 47.42% 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, 1998, the Partnership had $67,404 in cash and cash equivalents as compared to $16,900 as of December 31, 1997 . The net decrease in cash of $50,504 is principally due to the properties operations. 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 $2,35,310 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. The Partnership's required principal payments due under the stated terms of the Partnership's mortgage notes payable and notes payable to affiliates are $94,927, $102,678, and $111,063 for each of the next three years. 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 31,1998. 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 22, 1998 EX-27 2
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BOTH THE MARCH 31, 1998 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 3-MOS DEC-31-1998 MAR-31-1998 67,404 0 0 0 0 0 17,171,225 9,197,393 8,776,999 0 10,739,160 0 0 0 (2,959,753) 8,776,999 0 638,847 0 0 541,810 0 233,240 0 0 0 0 0 0 (124,463) (11.31) 0
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