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SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITES EXCHANGE ACT OF 1934

For Quarter Ended September 30, 2000 Commission File Number 0-17717

 

FOUNDATION REALTY FUND, LTD

(Exact name of Registrant as specified in its charter)

 

Florida 59-2802896

(State or other jurisdiction of (IRS Employer ID No.)

incorporation or organization)

 

880 Carillon Parkway, St. Petersburg, Florida 33716

(Address of principal executive offices) (Zip Code)

 

Registrant's Telephone Number, Including Area Code - (813) 573-3800

 

 

Indicate by check mark whether the Registrant (1)

has filed all reports to be filed by Section 13 or

15(d) of the Securities Exchange Act of 1934 during

the preceding 12 months (or 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 (X) No

 

 

 

 

Number of share outstanding of each of Registrant's classes of securities.

 

 

Title of Each Class Number of Units

September 30, 2000

Units of Limited Partnership 9,407

Interest: $1,000 per unit

 

 

DOCUMENT INCORPORATION BY REFERENCE

Part IV - Registration Statement S-11, File No. 33-13849

 

 

 

 

 

 

FOUNDATION REALTY FUND, LTD.

(A Florida Limited Partnership)

 

 

 

INDEX TO FINANCIAL STATEMENTS

 

 

Part I - Financial Information

Page No.

Balance Sheets as of September 30, 2000 and December 31, 1999 3

 

Statements of Operations -

For the Nine Months Ended September 30, 2000 and 1999 4

Statement of Operations - 

For the Three Months Ended September 30, 2000 and 1999 5

Statements of Partners' Equity -

For the Nine Months Ended September 30, 2000 and 1999 6

Statements of Cash Flows -

For the Nine Months Ended September 30, 2000 and 1999 7

Notes to Financial Statements 8-10

Management's Discussion and Analysis of Financial

Condition and Results of Operations 11-12

 

 

 

FOUNDATION REALTY FUND, LTD.

(A Florida Limited Partnership)

BALANCE SHEET

September 30, 2000 December 31, 1999

(Unaudited) Audited

ASSETS

Apartment Properties, at Cost $22,542,605 $22,484,922

Less - Accumulated Depreciation (7,829,586) (7,416,918)

14,713,019 15,068,004

 

Cash and Cash Equivalents 1,313,106 1,168,611

Prepaid Expenses 23,936 8,096

Deferred Loan Cost (Net of Accumulated 

Amortization of $124,663 and $93,497) 166,216 197,382

TOTAL ASSETS $16,216,277 $16,442,093

 

 

LIABILITIES AND PARTNERS' EQUITY

 

Liabilities:

Notes Payable $17,422,047 $17,561,620

Accounts Payable 349,827 39,771

Security Deposits 100,325 96,419

Unearned Rents 15,019 36,722

TOTAL LIABILITIES 17,887,218 17,734,532

 

Partner's Equity

Limited Partners' Equity (9,407 units

outstanding @ September 30, 2000 and

December 31, 1999) (1,413,049) (1,037,598)

General Partner's Equity (257,892) (254,841)

 

TOTAL PARTNERS' EQUITY (1,670,941) (1,292,439)

 

TOTAL LIABILITES AND PARTNERS' EQUITY $16,216,277 $16,442,093

 

 

 

 

 

FOUNDATION REALTY FUND, LTD.

(A Florida Limited Partnership)

STATEMENT OF OPERATIONS

(Unaudited)

FOR THE NINE MONTHS ENDED SEPTEMBER 30

2000 1999

Property Operations : 

Rental Income $2,712,945 $2,693,270

Miscellaneous 108,626 74,092

2,821,571 2,767,362

Expenses:

Depreciation 412,668 412,668

Payroll 328,109 271,368

Real Estate Taxes 216,027 211,158

Utilities 157,002 147,328

Repairs & Maintenance 349,466 293,946 Management - General Partner 139,816 136,753 

Landscaping 62,623 60,378 

Other 117,144 106,985 

1,782,855 1,640,584 

 

Income from Property Operations 1,038,716 1,126,778 

Interest Income 28,749 21,026 

1,067,465 1,147,804 

Other Expenses:

Interest 1,007,210 1,017,483 

Amortization 31,166 31,166

General & Administrative - Affiliate 81,144 81,153

Reserve Expense 1,988 970 

Other General & Administrative 6,972 10,150 

1,128,480 1,140,922 

Net Income (Loss) ($61,015) ($ 6,882) 

Allocation of Net Income (Loss) -

Limited Partners ($57,964) ($ 6,538) 

General Partners (3,051) 344 

($61,015) ($ 6,882) 

Net Income (Loss) Per

Limited Partnership Unit ($ 6.16) ($.70) 

Number of Limited Partnership Units 9,407 9,407

 

 

 

 

FOUNDATION REALTY FUND, LTD.

(a Florida Limited Partnership) 

STATEMENT OF OPERATIONS

(Unaudited)

FOR THE THREE MONTHS ENDED September 30

 

 

2000 1999 

Property Operations: 

Rental Income $934,732 $908,320 

Miscellaneous 30,691 31,705 

965,423 940,025 

Expenses:

Depreciation 137,556 137,556 

Payroll 127,001 82,471 

Real Estate Taxes 72,009 70,386 

Utilities 80,246 37,623 

Repairs and Maintenance 111,800 114,936 

Property Management - General Partner 47,167 46,220 

Landscaping 15,347 17,707 

Other 30,084 32,733 

621,210 539,632 

Income from Property Operations 344,213 400,393 

Interest Income 9,886 6,941 

354,099 407,334 

Other Expenses:

Interest 334,845 338,334 

Amortization 10,389 10,389 

General and Administrative -Affiliate 1,288 300

Reserve Expense 523 2,301 

Other General and Administrative 27,048 27,051 

374,093 378,375 

Net Income (Loss) ($19,994) ($28,959) 

Allocation of Net Income (Loss)-

Limited Partners ($18,994) ($27,511) 

General Partners (1,000) (1,448) 

($19,994) ($28,959) 

 

Net Income (Loss) Per

Limited Partnership Unit ($ 2.02) ($2.92) 

Number of Limited Partnership Units 9,407 9,407 

 

 

 

 

 

FOUNDATION REALTY FUND, LTD.

(A Florida Limited Partnership)

STATEMENT OF PARTNERS' EQUITY

(Unaudited)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999

Limited General Total

Partners' Partners' Partners'

Equity Equity Equity

Balance, December 31, 1998 $(830,569) $(262,511) $(1,093,080)

Distribution to Partners (258,693) 0 (258,693)

Net Income (Loss) 6,538 344 6,882

Balance, September 30, 1999 $(1,082,724) $(262,167) $(1,344,891)

 

Balance, December 31, 1999 $(1,037,598) $(254,841) $(1,292,439)

Distribution to Partners (317,487) 0 (317,487)

Net Income (Loss) (57,964) (3,051) (61,051)

Balance, September 30, 2000 $(1,413,049) $(257,892) $(1,670,941)

 

 

 

 

 

FOUNDATION REALTY FUND, LTD.

(A Florida Limited Partnership)

STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999

(Unaudited)

 

2000 1999

Net Cash Provided by Operating Activities: 

Net Income (Loss) $(61,015) $( 6,882) 

Adjustments to Reconcile Net Loss to Net Cash

Provided by Operating Activities

Depreciation: 412,668 412,668 

Amortization 31,166 31,166 

Changes in Operating Assets and Liabilities:

(Increase) in Prepaids (15,840) ( 6,806) 

Increase in Accounts Payable 310,056 284,186 

Increase (Decrease) in Security Deposits 3,906 13,407 

Increase (Decrease) in Unearned Rents (21,703) (17,445) 

Net Cash Provided by Operating Activities 659,238 724,058 

Cash Flows from Investing Activities:

Improvements to Apartment Properties (57,683) (91,624) 

Net Cash Used in Investing Activities (57,683) (91,624) 

 

Payments from Notes Payable (139,573) (129,299) 

Distributions to Partners (317,487) (258,693) 

Net Cash used by Financing Activities (457,060) (387,992) 

Increase (Decrease) in Cash 144,495 244,442 

Cash and Cash Equivalents at Beginning of period 1,168,611 1,057,375 

Cash and Cash Equivalents at End of period 1,313,106 1,301,817 

Supplemental Cash Flow Information:

Interest Paid $1,007,210 $1,017,483 

 

 

 

FOUNDATION REALTY FUND, LTD

A Florida Limited Partnership)

NOTES TO FINANCIAL STATEMENTS 

(Unaudited)

NOTE 1 - ORGANIZATION

Foundation Realty Fund, Ltd., (the "Partnership"), a Florida Limited

Partnership, was formed April 14, 1987 under the laws of Florida.

Operations commenced on January 12, 1988. The Partnership operates

two apartment properties. The Partnership will terminate on

December 31, 2020, or sooner, in accordance with the terms of the

Limited Partnership Agreement. The Partnership has received Limited

and General Partner capital contributions of $9,407,000 and $1,000

respectively. J. Robert Love, an individual, and RJ Properties,

Inc., a wholly owned subsidiary of Raymond James Financial, Inc.

are the General Partners and they manage and control the business of

the Partnership.

Operating profits and losses are allocated 95% to the Limited 

Partners and 5% to the General Partners. Cash from operations will be

shared 95% by the Limited Partners and 5% by the General Partners;

however, distributions to the General Partners are subordinated to

certain preferred returns to the Limited Partners. Profit or loss

and cash distributions from sales of property will be allocated as

formulated in the Limited Partnership Agreement.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:

Basis of Accounting

The Partnership utilizes the accrual basis of accounting whereby

revenues are recognized when earned and expenses are recognized as

obligations are incurred.

Cash and Cash Equivalents

It is the Partnership's policy to include short-term investments

with an original maturity of three months or less in Cash and Cash

Equivalents. These short-term investments are comprised of money

market funds, and repurchase agreements.

Restricted Cash

Cash and Cash Equivalents include $326,979 at September 30, 2000 and

$392,480 at December 31, 1999 of cash held in escrow for the payment

of real estate taxes. Cash and Cash Equivalents also include

$100,325 at September 30, 2000 and $96,419 at December 31, 1999 of tenant

security deposits held in an escrow account.

Income Taxes

No provisions for income taxes has been made in these financial

statements, as income taxes are a liability of the partners rather

than of the Partnership.

 

 

Depreciation

The apartment buildings are being depreciated over 35 years using

the straight-line method. Furniture and fixtures are being depreci-

ated over 8 years using the straight-line method.

NOTE 3 - COMPENSATION, REIMBURSEMENTS AND ACCRUALS TO THE GENERAL

PARTNERS AND AFFILIATES:

The General Partners and affiliates are entitled to the following

types of compensation and reimbursement for costs and expenses

incurred for the Partnership for the nine months ended September 30, 2000.

Property Management Fees $ 139,816 

General and Administrative Costs 1,988

NOTE 4 - LEASES AND APARTMENT PROPERTIES:

The Partnership owns apartment complexes leased to residents under

short term operating leases. A summary of the apartment properties

is as follows:

September 30, December 31

2000 1999

Land 3,141,510 3,141,510

Buildings 17,298,118 17,298,118

Furniture & Fixtures 2,102,977 2,045,294

Apartment Properties, at Cost 22,542,605 22,484,922

Less: Accumulated Depreciation (7,892,586) (7,416,918)

14,713,019 15,068,004

NOTE 5 - NOTES PAYABLE

The notes payable are secured by the apartment properties.

NOTE 6 - BASIS OF PREPARATION:

The unaudited financial statements presented herein have been pre-

pared in accordance with the instructions to Form 10-Q and do not

include all of the information and note disclosures required by

generally accepted accounting principals. These statements should

be read in conjuction with the financial statements and notes thereto

included in the Partnership's Form 10-K for the year ended December

31, 1999. In the opinion of management, such financial statements

include all adjustments, consisting only of normal recurring adjust-

ments, necessary to summarize fairly the Partnership's financial

position and results of operations. The results of operations for

the periods may not be indicative of the result to be expected for

the year.

NOTE 7 - SUBSEQUENT EVENT:

On or about October 31, 2000, the Partnership will pay distributions of

$105,829 to the Limited Partners.

 

 

 

 

 

FOUNDATION REALTY FUND, LTD.

(A Florida Limited Partnership)

Management's Discussion and Analysis of Financial Condition and

Results of Operations

Rental income for the nine months ended September 30, 2000 was

$2,712,945 as compared to $2,693,270 for the comparable period ended

September 30, 1999. Income from property operations for the nine months

ended September 30, 2000 was $1,038,716 as compared to $1,126,778 for the

comparable period ended September 30, 1999. The decrease in income from 

property operations was a result of higher payroll and repair and maintenance

costs primarily of the Springfield Apartments offset slightly by a

higher rental and other income achieved at both properties.

Interest expense decreased from $1,017,483 for the nine months ended September

30, 1999 to $1,007,210 for the nine months ended September 30, 2000. A reserve

expense accrual was begun in 1999 and amounted to $54,096 on September 30,

2000. This reserve accrual was set up to set aside operational proceeds

for upcoming capital expense items at both apartment properties.

Net loss for the nine months ended September 30, 2000 was $61,015 or $6.16

per Limited Partnership Unit outstanding as compared to a net income of

$6,882 or $ .70 per Limited Partnership Unit for the comparable period

ended September 30, 1999

Liquidity and Capital Resources

In management's opinion, working capital reserves and liquidity are

sufficient to meet the short-term operating needs of the Partnership.

Cash provided by operating activities decreased by $64,820 for the nine

month period ended September 30, 2000 as compared to the nine month

period ended September 30, 1999. The change resulted primarily from

a decrease in net income covered by higher operating expenses in the

repair and maintenance and payroll areas.

Cash used by investing activities totaled $57,683 at September 30, 2000 as

compared to $91,624 at September 30, 1999. The $33,941 decrease for the nine 

month period ended September 30, 2000 is attributable to a decrease

in the number of carpets replaced in the apartment units of both apartment

communities and landscaping work performed at the Springfield apartments

in 1999.

Cash used by financing activities increased by $69,068 from the nine

month period ended September 30, 2000 when compared to the nine month period

ended September 30, 1999. The increase is attributed to a $58,749 increase

in distribution to limited partners coupled with $10,274 increase in

principal payments on the partnership's notes payable.

ITEM 6 - EXHIBIT AND REPORTS ON FORM 8-K

a) Exhibits - NONE

b) Reports on Form 8-K - NONE

 

SIGNATURES

 

Pursuant to the requirements of the Securities and Exchange Act of 1934,

the report has been signed by the following persons on behalf of the

Registrant and in the capacities and on the date indicated.

FOUNDATION REALTY FUND, LTD.

A Florida Limited Partnership

By: RJ PROPERTIES, INC. a General Partner

 

 

 

11/06/00 J. Robert Love - President

Date (Signature)

11/06/00 Alan G. Lee - Secretary

Date (Signature)