-----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, E6F1QRDsL2v7IfcLXpDyuNKM4NkErzW05rBi66SH64CmD5c9GJK0Zoq2PUcw5hMN QCB2gGpqN++BC9Iavi95tg== 0000711512-99-000010.txt : 19990806 0000711512-99-000010.hdr.sgml : 19990806 ACCESSION NUMBER: 0000711512-99-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990805 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: 99678021 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, 1999 Commission file number 0-11578 AMERICAN REPUBLIC REALTY FUND (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, 1999 and December 31, 1998 Page 3 Consolidated Statements of Operations for the Three and Six Months Ended June 30, 1999 and 1998 Page 4 Consolidated Statements of Cash Flows for the Six months Ended June 30, 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 See notes to Condensed Consolidated Financial Statements June 30 December 31, 1999 1998 (Unaudited) Assets: Real Estate assets, at cost Land $1,822,718 $1,822,718 Buildings and 15,519,676 15,519,676 improvements 17,342,394 17,342,394 Less: Accumulated (10,032,703) (9,702,703) depreciation Real Estate, net 7,309,691 7,639,691 Cash including cash 109,932 146,358 investments Escrow deposits 441,044 430,820 Prepaid Expenses 43,007 14,421 Deferred Financing 165,274 195,016 Fees TOTAL ASSETS $8,068,948 $8,426,306 LIABILITIES AND PARTNERS'EQUITY: LIABILITIES Mortgage and notes $10,616,136 $10,675,051 payable Note Payable to 300,461 399,392 affiliates Amounts due affiliates 0 46,853 Real estate taxes 135,000 0 payable Security deposits 64,591 56,924 Accounts payable & 155,234 278,099 accrued expenses Total LIABILITIES 11,271,422 11,456,319 PARTNERS CAPITAL (DEFICIT) Limited Partners (3,256,144) (3,085,408) General Partner 53,670 55,395 Total Partners Capital (Deficit) (3,202,474) (3,030,013) TOTAL LIABILITIES AND PARTNER $8,068,948 $8,426,306 DEFICIT AMERICAN REPUBLIC REALTY FUND I Condensed Consolidated Statement of Operations (Unaudited) Three Six Months Months Ended Ended June June 30, 30, REVENUES 1999 1998 1999 1998 Rental income $657,602 647,333 $1,321,433 $1,286,180 Other property 13,710 15,565 28,738 27,305 Total revenues 671,312 662,898 1,350,171 1,313,485 EXPENSES Salaries & wages 84,225 75,447 150,502 137,074 Maintenance & repairs 70,921 111,272 167,253 198,840 Utilities 43,265 43,636 86,577 91,669 Real estate taxes 67,500 67,500 135,000 135,000 General administrative 31,121 27,019 59,784 53,261 Contract services 26,981 27,831 55,116 56,049 Insurance 10,209 12,025 20,821 27,248 Interest 209,356 225,913 420,436 459,153 Depreciation and 179,872 174,871 359,743 349,742 amortization Property management 33,514 33,127 67,400 65,655 fees (a) Total expenses 756,964 798,641 1,522,632 1,573,691 Net Income ($85,652)($135,743) (172,461) (260,206) NET INCOME PER UNITS $(7.79) $(12.34) $(15.68) $(23.66) AMERICAN REPUBLIC REALTY FUND I Condensed Consolidated Statement of Cash Flows See Notes to Condensed Consolidated Financial Statements Unaudited Six Months Ended June 30, 1999 1998 CASH FLOWS FROM OPERATING ACTIVITY Net income (loss) ($172,461) ($260,206) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 330,000 320,000 Net Effect of changes in operating accounts Escrow Deposits (10,224) 164,403 Prepaid Expenses (28,586) (23,202) Accrued Real Estate Taxes 135,000 135,000 Security Deposits 7,667 4,971 Accounts Payable (122,865) (132,448) Other Assets 29,742 29,743 Net cash provided by (used for) 168,273 238,261 operating activities CASH FLOWS FROM INVESTING ACTIVITIES Repayment of mortgage notes pay. (58,915) (54,466) Repayment of notes payable (98,931) 0 to affiliates Proceeds from amounts due (46,853) (85,780) affiliates Repayment of amounts due (44,486) affiliates Net cash used for investing (204,699) (184,732) activities NET INCREASE (DECREASE) IN CASH (36,426) 53,529 AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, 146,358 16,900 BEGINNING OF PERIOD CASH AND CASH EQUIVALENTS, END OF$109,932 $70,429 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 SECOND QUARTER 1999 COMPARED TO SECOND QUARTER 1998 At June 30, 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 94.2% for the second quarter of 1999, as compared to 95.8% for the second quarter of 1998. Revenue from property operations increased $8,4149, or 1.27%, for the second quarter of 1999, as compared to the 1998 second quarter. The increase in rental income of $10,269 or 1.59% is primarily due to an increase in rental rates. The decrease in other income of $1,855 or 11.92% is primarily due to an decrease in Late and other fee collections from the properties. The following table illustrates the components: Increase Per Cent (Decrease) Change Rental income 10,269 1.59% Other property (1,855) 11.92% Net Increase 8,414 1.27% (Decrease) Property operating expenses decreased $41,677, or 5.22%, for the second quarter of 1999, as compared to the same period in 1998, primarily due to decreases in maintenance and repairs. The decrease in maintenance and repairs is due to fewer deferred maintenance projects than in 1998 as then required by the new mortgage notes. General and administrative increased $4,102 or 15.18% primarily due to costs incurred contesting real estate tax valuations. Insurance costs decreased $1,816 or 15.1% 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 8,778 11.63% Maintenance & (40,351) 36.26% repairs Utilities (371) 0.85% Real estate taxes 0 0.00% General 4,102 15.18% administrative Contract services (850) 3.05% Insurance (1,816) 15.10% Interest (16,557) 7.33% Depreciation and 5,001 2.86% amortization Property management 387 1.17% fees (a) Net Increase (41,677) 5.22% (Decrease) FIRST SIX MONTHS 1999 COMPARED TO FIRST SIX MONTHS 1998 Revenue from property operations increased $36,686, or 2.79%, for the first six months of 1999, as compared to the 1998 first six months. The increase in rental income of $35,253 or 2.74% is primarily due to an increase in rental rates. The increase in other income of $1,433 or 5.25% is primarily due to fee income from the properties. The following table illustrates the components: Increase Per Cent (Decrease) Change Rental income 35,253 2.74% Other property 1,433 5.25% Net Increase (Decrease) 36,686 2.79% Property operating expenses decreased $51,059, or 3.24%, for the first six months of 1999, as compared to the same period in 1998, primarily due to decreases in interest and maintenance and repairs. The decrease in interest is primarily due to the refinancing of both properties at lower interest rates. The decrease in maintenance and repairs is due to fewer deferred maintenance projects than in 1998 as then required by the new mortgage notes. General and administrative increased $6,523 or 12.25% primarily due to costs incurred contesting real estate tax valuations. Insurance costs decreased $6,427 or 23.59% 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 13,428 9.80% Maintenance & repairs (31,587) 15.89% Utilities (5,092) 5.55% Real estate taxes 0 0.00% General administrative 6,523 12.25% Contract services (933) 1.66% Insurance (6,427) 23.59% Interest (38,717) 8.43% Depreciation and 10,001 2.86% amortization Property management fees 1,745 2.66% (a) Net Increase (Decrease) (51,059) 3.24% 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, 1999, the Partnership had $109,932 in cash and cash equivalents as compared to $146,358 as of December 31, 1998 . The net decrease in cash of $36,426 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 $300,461 at June 30, 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.2-81074effective 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, 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: July 29, 1999 [ARTICLE] 5 [LEGEND] THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BOTH THE June 30, 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] JUN-30-1999 [CASH] 109,932 [SECURITIES] 0 [RECEIVABLES] 0 [ALLOWANCES] 0 [INVENTORY] 0 [CURRENT-ASSETS] 0 [PP&E] 17,342,394 [DEPRECIATION] 10,032,703 [TOTAL-ASSETS] 8,068,948 [CURRENT-LIABILITIES] 0 [BONDS] 10,616,136 [PREFERRED-MANDATORY] 0 [PREFERRED] 0 [COMMON] 0 [OTHER-SE] (3,202,474) [TOTAL-LIABILITY-AND-EQUITY] 8,068,948 [SALES] 0 [TOTAL-REVENUES] 671,312 [CGS] 0 [TOTAL-COSTS] 0 [OTHER-EXPENSES] 547,608 [LOSS-PROVISION] 0 [INTEREST-EXPENSE] 209,356 [INCOME-PRETAX] 0 [INCOME-TAX] 0 [INCOME-CONTINUING] 0 [DISCONTINUED] 0 [EXTRAORDINARY] 0 [CHANGES] 0 [NET-INCOME] (85,652) [EPS-BASIC] (7.79) [EPS-DILUTED] 0
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