-----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, BEAshGNHx44XxLPxZSYVz4zkBcrzOZfyPJPrqP7yI3KeKMOd3vAAFdW4WKUDEJHQ XmRWY8LeigH7Ct1a3DixYg== 0000711512-03-000004.txt : 20030425 0000711512-03-000004.hdr.sgml : 20030425 20030425102333 ACCESSION NUMBER: 0000711512-03-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20030331 FILED AS OF DATE: 20030425 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: 1934 Act SEC FILE NUMBER: 000-11578 FILM NUMBER: 03663611 BUSINESS ADDRESS: STREET 1: 2800 N DALLAS PKWY STREET 2: #100 CITY: PLANO STATE: TX ZIP: 75093-4707 BUSINESS PHONE: 9728368010 MAIL ADDRESS: STREET 1: 2800 N DALLAS PKWY STREET 2: #100 CITY: PLANO STATE: TX ZIP: 75093-4707 10-Q 1 f1q0301.txt FUND 1 10 Q FIRST QTR 2003 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, 2003 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) 2800 N. Dallas Pkwy Suite 100 Plano, Texas 75093-5994 (Address of principal executive offices) Registrant's telephone number, including area code: (972)836-8000. 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, 2003 and December 31, 2002 Page 3 Consolidated Statements of Operations for the Six Months Ended March 31, 2003 and 2002 Page 4 Consolidated Statements of Cash Flows for the Six months Ended March 31, 2003 and 2002 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, 2002, are Unaudited. PART 1. FINANCIAL INFORMATION Item 1. Financial Statements AMERICAN REPUBLIC REALTY FUND I Condensed Consolidated Balance Sheets March 31 December 31 2003 2002 (Unaudited) ASSETS Real Estate assets, at cost Land $1,822,718 $1,822,718 Buildings and improvements 16,006,007 16,006,007 17,828,725 17,828,725 Less: Accumulated (12,621,239) (12,446,239) depreciation Real 5,207,486 5,382,486 Estate, net Cash including cash investments 288,675 214,237 Escrow deposits 506,763 572,601 Prepaid Expenses 16,503 32,194 Deferred Financing Fees 97,507 103,242 TOTAL ASSETS $6,116,934 $6,304,760 LIABILITIES AND PARTNERS' EQUITY: LIABILITIES Mortgage and notes payable $10,165,608 $10,211,238 Note Payable to affiliates 0 0 Amounts due affiliates 828 1,725 Real estate taxes payable 75,249 0 Security deposits 75,376 75,028 Accounts payable & accrued expenses 172,710 333,000 Total liabilities 10,489,771 10,620,991 PARTNERS CAPITAL (DEFICIT) Limited Partners (4,413,397) (4,357,357) General Partner 40,560 41,126 Total Partners Capital (Deficit) (4,372,837) (4,316,231) TOTAL LIABILITIES AND PARTNER DEFICIT $6,116,934 $6,304,760 AMERICAN REPUBLIC REALTY FUND I Condensed Consolidated Statement of Operations (Unaudited) Three Months Ended March 31, REVENUES 2003 2002 Rental income 682,658 674,226 Other property 14,796 17,773 Total revenues 697,454 691,999 EXPENSES Salaries & wages 96,806 86,211 Maintenance & repairs 39,487 55,050 Utilities 54,163 51,571 Real estate taxes 75,249 76,248 General administrative 22,149 24,254 Contract services 26,318 26,553 Insurance 23,691 17,676 Interest 200,602 203,194 Depreciation and amortization 180,736 180,736 Property management fees (a) 34,859 34,538 Total expenses 754,060 756,031 Net Income ($56,606) ($64,032) NET INCOME PER UNIT $(5.15) $(5.82) 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, 2003 2002 CASH FLOWS FROM OPERATING ACTIVITY Net income (loss) ($56,606) ($64,032) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 175,000 175,000 Net Effect of changes in operating accounts Escrow deposits 65,838 63,833 Prepaid expenses 15,691 9,676 Accrued real estate taxes 75,249 76,248 Security deposits 348 (6,067) Accounts payable (160,290) (169,681) Other assets 5,735 5,736 Net cash provided by (used for) operating activities 120,965 90,713 CASH FLOWS FROM INVESTING ACTIVITIES Repayment of mortgage notes payable (45,630) (42,185) Proceeds from amounts due affiliates (897) 5,680 Net cash used for investing activities (46,527) (36,505) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 74,438 54,208 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 214,237 294,437 CASH AND CASH EQUIVALENTS, END OF PERIOD $288,675 $348,645 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 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION FIRST QUARTER 2003 COMPARED TO FIRST QUARTER 2002 At March 31, 2003 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 90.5% for the first quarter of 2003, as compared to 89.5% for the first quarter of 2002. Revenue from property operations increased $5,455, or 0.79%, for the first quarter of 2003, as compared to the 2002 first quarter. The increase in rental income of $8,432 or 1.25% is primarily due to an decrease in vacancy. The decrease in other income of $2,977 or 16.75% is primarily due to an decrease in Late and other fee collections from the properties. The following table illustrates the components: Increase Percent (Decrease) Change Rental income 8,432 1.25% Other property (2,977) 16.75% Net Increase (Decrease) 5,455 0.79% Property operating expenses decreased $1,971 or 0.26%, for the first quarter of 2003, as compared to the same period in 2002. Insurance increased $6,015 or 34.03% in connection with the annual policy renewal. The decrease in maintenance & repairs expense of $15,563 or 28.27% is represents decreased turnover and related costs. Salaries increased $10,595 or 12.29% primarily due to increased on site maintenance. The following table illustrates the components by category: Increase Percent (Decrease) Change Salaries & wages 10,595 12.29% Maintenance & repairs (15,563) 28.27% Utilities 2,592 5.03% Real estate taxes (999) 1.31% General administrative (2,105) 8.68% Contract services (235) 0.89% Insurance 6,015 34.03% Interest (2,592) 1.28% Depreciation and amortization 0 0.00% Property management fees (a) 321 0.93% Net Increase (Decrease) (1,971) 0.26% FIRST QUARTER 2002 COMPARED TO FIRST QUARTER 2001 Revenue from property operations decreased $24,798, or 3.46%, for the first quarter of 2002, as compared to the 2001 first quarter. The decrease in rental income of $20,160 or 2.90% is primarily due to an increase in vacancy. The decrease in other income of $4,638 or 20.70% is primarily due to an decrease in Late and other fee collections from the properties. The following table illustrates the components: Increase Percent (Decrease) Change Rental income (20,160) 2.90% Other property (4,638) 20.70% Net Increase (Decrease) (24,798) 3.46% Property operating expenses decreased $13,921, or 1.81%, for the first quarter of 2002, as compared to the same period in 2001, primarily due to decreases in maintenance & repair expense. The decrease in maintenance & repairs expense is preventive maintenance projects being completed in 2001. Utilities decreased $10,431 or 16.82% primarily due to decreased rates. Insurance increased $5,287 or 42.67% in connection with the annual policy renewal. The following table illustrates the components by category: Increase Percent (Decrease) Change Salaries & wages 5,507 6.82% Maintenance & repairs (12,228) 18.18% Utilities (10,431) 16.82% Real estate taxes 4,998 7.01% General administrative 2,393 10.95% Contract services (1,193) 4.30% Insurance 5,287 42.67% Interest (2,396) 1.17% Depreciation and amortization (5,000) 2.69% Property management fees (a) (858) 2.42% Net Increase (Decrease) (13,921) 1.81% 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, 2003, the Partnership had $288,675 in cash and cash equivalents as compared to $214,237 as of December 31, 2002. The net increase in cash of $74,438 is principally due to cash flow from operations. On September 30, 2002 the partnership distributed $25.00 per limited partnership unit to units of record September 30, 2002. This distribution was made from excess cash on hand from cash flow from 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. The Partnerships required principal payments due under the stated terms of the Partnerships mortgage notes payable are $140,551 $152,028, and $164,442 for each of the next three years. 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. 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 PartnershipAgreement, 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, 2003. 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 25, 2003 CERTIFICATION I, Robert J Werra, certify that: 1. I have reviewed this annual report on Form 10-Q of American Republic Realty Fund; 2. Based on my knowledge, this annual 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 annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a- 14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures 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 annual report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: April 25, 2003 /s/ Robert J. Werra General Partner CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of American Republic Realty Fund ("the Company") on Form 10-Q for the period ending March 31, 2002 as filed with the Securities and Exchange Commission on the date hereof ("the Report"), I, Robert J. Werra, Acting Principal Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, that: (1) The report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Robert J. Werra Acting Principal Executive Officer and Chief Financial Officer April 25, 2003 -----END PRIVACY-ENHANCED MESSAGE-----