-----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, Cf7B1VYRUkebCdo6YkbKrrpJOvnZJDQRytwLDIGOaKcapB3vzJ8tBNJtcHbzDLWL RZurYrh9MTPfDa0n6ELgiQ== 0000711512-99-000007.txt : 19990430 0000711512-99-000007.hdr.sgml : 19990430 ACCESSION NUMBER: 0000711512-99-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990429 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: 99604147 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, 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
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