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, 2000 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, 2000 and
December 31, 1999 Page 3
Consolidated Statements of Operations for the Three and Six Months
Months Ended June 30, 2000 and 1999 Page 4
Consolidated Statements of Cash Flows for the Three months
Ended June 30, 2000 and 1999 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, 1999, are Unaudited.
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
AMERICAN REPUBLIC REALTY FUND I
Condensed Consolidated Balance Sheets
June 30, December 31,
2000 1999
(Unaudited)
ASSETS
Real
Estate
assets, at
cost
Land $1,822,718 $1,822,718
Buildings $15,656,616 $15,656,616
and improvements
17,479,334 17,479,334
Less: ($10,722,557) ($10,382,557)
Accumulated
depreciation
$6,756,777 $7,096,777
Cash $270,364 $116,649
including cash
investments
Escrow $427,495 $542,074
deposits
Prepaid $49,895 $14,067
Expenses
Deferred $160,601 $172,072
Financing Fees
Total $7,665,132 $7,941,639
assets
LIABILITIES AND STOCK HOLDER'S EQUITY
Liabilities
Mortgage $10,508,647 $10,572,372
and notes
payable
Note Payable $0 $165,346
to affiliates
Amounts due $0 $4,490
affiliates
Real estate $137,496 $0
taxes payable
Security $72,000 $68,610
deposits
Accounts $157,251 297,610
payable &
accrued expenses
Total 10,875,394 11,108,428
liabilities
Partner's Deficit ($3,210,262) ($3,166,789)
Total $7,665,132 $7,941,639
liabilities and
partner deficit
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, 1999 June 30, 2000
REVENUES 2000 1999 2000 1999
Rental income 677,399 657,602 1,353,120 $1,321,433
Other property 14,546 13,710 32,167 28,738
Total revenues 691,945 671,312 1,385,287 1,350,171
EXPENSES
Salaries & wages 63,764 84,225 130,690 150,502
Maintenance & repairs 57,568 70,921 101,811 167,253
Utilities 28,724 43,265 90,623 86,577
Real estate taxes 68,748 67,500 137,496 135,000
General administrative 33,682 31,121 53,646 59,784
Contract services 26,007 26,981 54,818 55,116
Insurance 11,374 10,209 21,726 20,821
Interest 207,270 209,356 417,248 420,436
Depreciation and 175,736 179,872 351,472 359,743
amortization
Property management 34,648 33,514 69,231 67,400
fees (a)
Total expenses 707,521 756,964 1,428,761 1,522,632
Net Income ($15,576) ($85,652) (43,474) (172,461)
NET INCOME PER UNIT $(1.42) $(7.79) $(3.95) $(15.68)
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
June 30,
2000 1999
CASH FLOWS FROM OPERATING ACTIVITY
Net income (loss) ($43,474) ($172,461)
Adjustments to reconcile net
income (loss) to net cash
provided by operating activities:
Depreciation and amortization 340,000 330,000
Net Effect of changes in operating accounts
Escrow deposits 114,579 (10,224)
Prepaid expenses (35,828) (28,586)
Accrued real estate taxes 137,496 135,000
Security deposits 3,390 7,667
Accounts payable (140,359) (122,865)
Other assets 11,471 29,742
Net cash provided by (used for) 387,275 168,273
operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Repayment of mortgage notes payable (63,725) (58,915)
Repayment of notes payable to (165,346)
affiliates
Proceeds from amounts due affiliates (4,490) (98,931)
Repayment of amounts due affiliates (46,853)
Net cash used for investing activities (233,561) (204,699)
NET INCREASE (DECREASE) IN CASH 153,714 (36,426)
AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, 116,649 146,358
BEGINNING OF PERIOD
CASH AND CASH EQUIVALENTS, END OF PERIOD $270,363 $109,932
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 2000 COMPARED TO SECOND QUARTER 1999
At June 30, 2000 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 94.3% for the first six months of 2000, as
compared to 94.2% for the second quarter of 1999.
Revenue from property operations increased $20,633, or 3.07%,
for the second quarter of 2000, as compared to the 1999 second
quarter. The increase in rental income of $19,797 or 3.01% is
primarily due to an increase in rental rates. The increase in
other income of $836 or 6.10% is primarily due to an increase
in Late and other fee collections from the properties. The
following table illustrates the components:
Increase Percent
(Decrease) Change
Rental income 19,797 3.01%
Other property 836 6.10%
Net Increase (Decrease) 20,633 3.07%
Property operating expenses decreased $49,443, or 6.53%, for
the second quarter of 2000, as compared to the same period in
1999, primarily due to decreases in maintenance and repairs
expense. The decrease in maintenance and repairs expense is
due to a one time charge in 1999 for resurfacing the parking
lots. Salaries and wages decreased $20,461 or 24.29% primarily
due to staffing shortages. Utilities decreased $14,541 or
33.61% primarily due to decreased consumption. Insurance
increased $2,086 or 11.41% with the annual policy renewal. The
following table illustrates the components by category:
Increase Percent
(Decrease) Change
Salaries & wages (20,461) 24.29%
Maintenance & repairs (13,353) 18.83%
Utilities (14,541) 33.61%
Real estate taxes 1,248 1.85%
General administrative 2,561 8.23%
Contract services (974) 3.61%
Insurance 1,165 11.41%
Interest (2,086) 1.00%
Depreciation and amortization (4,136) 2.30%
Property management fees (a) 1,134 3.38%
Net Increase (Decrease) (49,443) 6.53%
FIRST SIX MONTHS 2000 COMPARED TO FIRST SIX MONTHS 1999
Revenue from property operations increased $35,116, or 2.6%,
for the first six months of 2000, as compared to the 1999 first
six months . The increase in rental income of $35,116 or 2.6%
is primarily due to an increase in rental rates. The increase
in other income of $3,429 or 11.93% is primarily due to an
increase in Late and other fee collections from the properties.
The following table illustrates the components:
Increase Percent
(Decrease) Change
Rental income 31,687 2.40%
Other property 3,429 11.93%
Net Increase 35,116 2.60%
Property operating expenses decreased $93,871, or 6.17%, for
the first six months of 2000, as compared to the same period in
1999, primarily due to decreases in maintenance and repairs
expense. The decrease in maintenance and repairs expense is due
to a one time charge in 1999 for resurfacing the parking lots.
Salaries and wages decreased $19,812 or 13.16% primarily due to
staffing shortages.. Utilities rose $4,046 or 4.67% primarily
due to increases in usage and rates of water and wastewater
charges. General and Administrative decreased $6,138 or 10.27%
primarily due to professional fees relating to cable wiring of
the properties. The following table illustrates the
components by category:
Increase
(Decrease)
Salaries & wages (19,812) 13.16%
Maintenance & repairs (65,442) 39.13%
Utilities 4,046 4.67%
Real estate taxes 2,496 1.85%
General administrative (6,138) 10.27%
Contract services (298) 0.54%
Insurance 905 4.35%
Interest (3,188) 0.76%
Depreciation and amortization (8,271) 2.30%
Property management fees (a) 1,831 2.72%
Net Increase (Decrease) (93,871) 6.17%
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, 2000, the Partnership had $270,364 in cash
and cash equivalents as compared to $116,649 as of December 31,
1999 . The net increase in cash of $153,715 is principally due
to cash flow from operations.
During the first quarter of 2000 ending March 31, the
partnership paid off the remaining balance owned to the general
partner of $165,346. The payment was made with operating cash
flow from the partnership.
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 $111,063, $120,132 and
$129,941, 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 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
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, 2000.
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 1, 2000
[ARTICLE] 5
[LEGEND]
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BOTH
THE June 30, 2000 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
<TABLE>
<S> <C>
[PERIOD-TYPE] 3-MOS
[FISCAL-YEAR-END] DEC-31-2000
[PERIOD-END] JUN-30-2000
[CASH] 270,364
[SECURITIES] 0
[RECEIVABLES] 0
[ALLOWANCES] 0
[INVENTORY] 0
[CURRENT-ASSETS] 0
[PP&E] 17,479,334
[DEPRECIATION] 10,722,557
[TOTAL-ASSETS] 7,665,132
[CURRENT-LIABILITIES] 0
[BONDS] 10,508,647
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[COMMON] 0
[OTHER-SE] (3,210,262)
[TOTAL-LIABILITY-AND-EQUITY] 7,665,132
[SALES] 0
[TOTAL-REVENUES] 691,945
[CGS] 0
[TOTAL-COSTS] 0
[OTHER-EXPENSES] 500,251
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 207,270
[INCOME-PRETAX] 0
[INCOME-TAX] 0
[INCOME-CONTINUING] 0
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] (15,576)
[EPS-BASIC] (1.42)
[EPS-DILUTED] 0
</TABLE>
