-----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, BkkZzzhnWeQA3OJgvetgYqNJtiE2arl3MU9COk+133Z4owSSD5dMuXydDLFLGK68 f6Tb1Jhay9pOQyZcujW1XA== 0000711512-98-000009.txt : 19980807 0000711512-98-000009.hdr.sgml : 19980807 ACCESSION NUMBER: 0000711512-98-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980806 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: 98678150 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 June 30, 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 June 30, 1998 and December 31, 1997 Page 3 Consolidated Statements of Operations for the Six Months Ended June 30, 1998 and 1997 Page 4 Consolidated Statements of Cash Flows for the Six Months Ended June 30, 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 8 Other Information Page 9 Signatures Page 10 The statements, insofar 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 June 30 December 31, 1998 1997 (Unaudited) ASSETS Real Estate assets, at cost Land $1,822,718 $1,822,718 Buildings and 15,348,507 15,348,507 improvements 17,171,225 17,171,225 Less: Accumulated (9,357,393) (9,037,393) depreciation Real Estate net 7,813,832 8,133,832 Cash including cash 70,429 16,900 investments Escrow deposits 538,552 702,955 Prepaid Expenses 43,888 20,686 Deferred Financing Fees 188,215 217,958 TOTAL ASSETS $8,654,916 $9,092,331 LIABILIBITIES & PARTNERS'EQUITY: LIABILITIES Mortgage and notes payable $10,715,511 $10,769,977 Note Payable to affuliates 674,008 759,788 Amounts due affiliates 749 45,235 Real estate taxes payable 135,000 0 Security deposits 51,562 46,591 Accounts payable & 173,582 306,030 accrued expenses Total liabilities 11,750,412 11,927,621 PARTNERS CAPITAL (DEFICIT) Limited Partners (3,151,236) (2,892,632) General Partner 55,740 57,342 Total Partners Capitral (Deficit) (3,095,496) (2,835,290) TOTAL LIBILITES AND PARTNER DEFICIT $8,654,916 $9,092,331 See notes to Condensed Consolidated Financial Statements AMERICAN REPUBLIC REALTY FUND I Condensed Consolidated Statement of Operations (Unaudited) Three Months Ended Six Months Ended June 30, June 30, REVENUES 1998 1997 1998 1997 Rental income $647,333 $635,855 $1,286,180 $1,235,634 other property 15,565 15,006 27,305 23,990 Total revenues 662,898 650,861 1,313,485 1,259,624 EXPENSES Salaries & wages 75,447 77,361 137,074 140,638 Maintenance & repairs 111,272 58,787 198,840 111,518 Utilities 43,636 41,075 91,669 93,011 Real estate taxes 67,500 66,900 135,000 133,800 General administrative 27,019 21,889 53,261 29,421 Contract services 27,831 31,339 56,049 59,465 Insurance 12,025 13,649 27,248 25,747 Interest 225,913 64,540 459,153 126,267 Depreciation and amortization 174,871 151,000 349,742 302,000 Property management fees (a) 33,127 32,535 65,655 62,954 Total expenses 798,641 559,075 1,573,691 1,084,821 Net Income ($135,743) $91,786 (260,206) $174,803 NET INCOME PER UNITS $(12.34) $8.34 $(23.66) $15.89 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 Six Months Ended June 30, 1998 1997 CASH FLOWS FROM OPERATING ACTIVITY Net income (loss) ($260,206) $174,803 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 320,000 302,000 Net Effect of changes in operating accounts Escrow deposits 164,403 (49,247) Prepaid expenses (23,202) (38,992) Accrued real estate taxes 135,000 133,156 Security deposits 4,971 4,579 Accounts payable (132,448) 29,996 Other assets 29,743 0 Net cash provided by (used for) operating 238,261 556,295 activities CASH FLOWS FROM INVESTING ACTIVITIES Repayment of mortgage notes payable (54,466) (350,311) Repayment of notes payable to affiliates (85,780) 0 Proceeds from amounts due affiliates (44,486) 0 Repayment of amounts due affiliates (167,527) Net cash used for investing activities (184,732) (517,838) NET INCREASE (DECREASE) IN CASH 53,529 38,457 AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, 16,900 23,211 BEGINNING OF PERIOD CASH AND CASH EQUIVALENTS, END OF PEROD $70,429 $61,668 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 SECOND QUARTER 1998 COMPARED TO SECOND QUARTER 1997 At June 30, 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 95.8% for the second quarter of 1998, as compared to 95% for the second quarter of 1996. Revenue from property operations increased $12,037, or 1.85%, for the second quarter of 1998, as compared to the 1997 second quarter. The increase in rental income of $11,478 or 1.81% is primarily due to an increase in occupancy and rental rates. The following table illustrates the components: Increase Per Cent (Decrease) Change Rental income 11,478 1.81% Other property 559 3.73% Net Increase (Decrease) 12,037 1.85% Property operating expenses increased $239,566, or 42.85%, for the second quarter 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 interest paid on the new mortgages. Maintenance and repairs increased $52,485 or 89.28% primarily due to maintenance projects required by under the new mortgage notes. Depreciation and Amortization increased $23,871 or 15.81% primarily due to amortization of fees relating to the new loans. The following table illustrates the components by category: Increase (Decrease) Salaries & wages (1,914) 2.47% Maintenance & repairs 52,485 89.28% Utilities 2,561 6.23% Real estate taxes 600 0.90% General administrative 5,130 23.44% Contract services (3,508) 11.19% Insurance (1,624) 11.90% Interest 161,373 250.04% Depreciation and amortization 23,871 15.81% Property management fees (a) 592 1.82% Net Increase (Decrease) 239,566 42.85% FIRST SIX MONTHS 1998 COMPARED TO FIRST SIX MONTHS 1997 At June 30, 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 95.3% for the first six months of 1998, as compared to 93.7% for the first six months of 1997. Revenue from property operations increased $53,861, or 4.28%, for the first six months of 1998, as compared to the 1997 first six months. The increase in other income of $3,315 or 13.82% is primarily due to a increase in late and returned check charges over the prior year. The increase in rental income of $50,546 or 4.09% is primarily due to an increase in occupancy and rental rates. The following table illustrates the components: Increase Per Cent (Decrease) Change Rental income 50,546 4.09% Other property 3,315 13.82% Net Increase (Decrease) 53,861 4.28% Property operating expenses increased $488,870, or 45.06%, for the first six 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 under the new mortgage notes. General and administrative costs increased $23,840 or 81.03% primarily due to higher advertising costs. The following table illustrates the components by category: Increase (Decrease) Salaries & wages (3,564) 2.53% Maintenance & repairs 87,322 78.30% Utilities (1,342) 1.44% Real estate taxes 1,200 0.90% General administrative 23,840 81.03% Contract services (3,416) 5.74% Insurance 1,501 5.83% Interest 332,886 263.64% Depreciation and 47,742 15.81% amortization Property management fees 2,701 4.29% (a) Net Increase (Decrease) 488,870 45.06% 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 June 30, 1998, the Partnership had $70,429 in cash and cash equivalents as compared to $16,900 as of December 31, 1997 . The net increase in cash of $53,529 is principally due to the properties 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. 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 $674,008 at June 30, 1998. 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 31,1997 totaling $759,788 which accrue interest at prime plus 2% 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. 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 June 30,1998. 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: August 10, 1998 [ARTICLE] 5 [LEGEND] THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BOTH THE JUNE 30, 1998 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-31-1998 [PERIOD-END] JUN-30-1998 [CASH] 70,429 [SECURITIES] 0 [RECEIVABLES] 0 [ALLOWANCES] 0 [INVENTORY] 0 [CURRENT-ASSETS] 0 [PP&E] 17,171,225 [DEPRECIATION] 9,357,393 [TOTAL-ASSETS] 8,654,916 [CURRENT-LIABILITIES] 0 [BONDS] 10,715,511 [PREFERRED-MANDATORY] 0 [PREFERRED] 0 [COMMON] 0 [OTHER-SE] (3,095,496) [TOTAL-LIABILITY-AND-EQUITY] 8,654,916 [SALES] 0 [TOTAL-REVENUES] 662,898 [CGS] 0 [TOTAL-COSTS] 0 [OTHER-EXPENSES] 572,728 [LOSS-PROVISION] 0 [INTEREST-EXPENSE] 225,913 [INCOME-PRETAX] 0 [INCOME-TAX] 0 [INCOME-CONTINUING] 0 [DISCONTINUED] 0 [EXTRAORDINARY] 0 [CHANGES] 0 [NET-INCOME] (135,743) [EPS-PRIMARY] (12.34) [EPS-DILUTED] 0
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