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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 June 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 Securites Exchange Act of 1934 during
the preceeding 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 securites.
Title of Each Class Number of Units
June 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 June 30, 2000 and December 31, 1999 3
Statements of Operations -
For the Six Months Ended June 30, 2000 and 1999 4
Statement of Operations -
For the Three Months Ended June 30, 2000 and 1999 5
Statements of Partners' Equity -
For the Six Months Ended June 30, 2000 and 1999 6
Statements of Cash Flows -
For the Six Months Ended June 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
June 30, 2000 December 31, 1999
(Unaudited) Audited
ASSETS
Aparment Properties, at Cost $22,515,911 $22,484,922
Less - Accumulated Depreciation (7,692,030) (7,416,918)
14,823,881 15,068,004
Cash and Cash Equivalents 1,272,551 1,168,611
Prepaid Expenses 22,935 8,096
Deferred Loan Cost (Net of Accumulated
Amortization of $114,274 and $93,497) 176,605 197,382
TOTAL ASSETS $16,295,972 $16,442,093
LIABILITIES AND PARTNERS' EQUITY
Liabilites:
Notes Payable $17,469,464 $17,561,620
Accounts Payable 245,964 39,771
Security Deposits 98,017 96,419
Unearned Rents 27,645 36,722
TOTAL LIABILITIES 17,841,090 17,734,532
Partner's Equity
Limited Partners' Equity (9,407 units
outstanding @ June 30, 2000 and
December 31, 1999 (1,288,226) (1,037,598)
General Partner's Equity (256,892) (254,841)
TOTAL PARTNERS' EQUITY (1,545,118) (1,292,439)
TOTAL LIABILITES AND PARTNERS' EQUITY $16,295,972 $16,442,093
FOUNDATION REALTY FUND, LTD.
(A Florida Limited Partnership)
STATEMENT OF OPERATIONS
(Unaudited)
FOR THE SIX MONTHS ENDED JUNE 30
2000 1999
Property Operations :
Rental Income $1,778,213 $1,784,950
Miscellaneous 77,935 42,387
1,856,148 1,827,337
Expenses:
Depreciation 275,112 275,112
Payroll 201,108 188,897
Real Estate Taxes 144,018 140,772
Utilities 76,756 109,705
Repairs & Maintenance 237,666 179,010 Management - General Partner 92,649 90,533
Landscaping 47,276 42,671
Other 87,060 74,252
1,161,645 1,100,952
Income from Property Operations 694,503 726,385
Interest Income 18,863 14,085
713,366 740,470
Other Exenses:
Interest 672,365 679,149
Amortization 20,777 20,777
General & Administrative - Affiliate 700 670
Reserve Expense 54,096 54,102
Other General & Administrative 6,449 7,849
754,387 762,547
Net Income (Loss) ($41,021) ($22,077)
Allocation of Net Income (Loss) -
Limited Partners ($38,970) ($20,973)
General Partners (2,051) 1,104
($41,021) ($22,071)
Net Income (Loss) Per
Limited Partnership Unit ($ 4.14) ($2.23)
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 JUNE 30
2000 1999
Property Operations:
Rental Income $897,338 $891,051
Miscellaneous 44,036 23,461
941,374 914,512
Expenses:
Depreciation 137,556 137,556
Payroll 103,102 91,734
Real Estate Taxes 71,859 70,386
Utilities 36,614 65,502
Repairs and Maintenance 145,624 104,947
Property Management - General Partner 46,530 45,528
Landscaping 23,398 28,671
Other 52,915 44,033
617,598 588,357
Income from Property Operations 323,776 326,155
Interest Income 9,361 6,417
333,137 332,572
Other Expenses:
Interest 335,742 339,167
Amortization 10,389 10,388
General and Administrative -Affiliate 530 560
Reserve Expense 27,048 27,051
Other General and Administrative 4,691 2,558
378,399 379,724
Net Income (Loss) ($45,262) ($47,152)
Allocation of Net Income (Loss)-
Limited Partners ($42,999) ($44,794)
General Partners (2,263) (2,358)
($45,262) ($47,152)
Net Income (Loss) Per
Limited Partnership Unit ($ 4.57) ($4.77)
Number of Limited Partnership Units 9,407 9,407
FOUNDATION REALTY FUND, LTD.
(A Florida Limited Partnership)
STATEMENT OF PARTNERS' EQUITY
(Unaudited)
FOR THE SIX MONTHS ENDED JUNE 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 (211,658) 0 (211,658)
Net Income(Loss) (20,973) (1,104) (22,077)
Balance, June 30, 1999 $(1,063,200) $(263,615) $(1,326,815)
Balance, December 31, 1999 $(1,037,598) $(254,841) $(1,292,439)
Distribution to Partners (211,658) 0 (211,658)
Net Income (38,970) (2,051) (41,021)
Balance, June 30, 2000 $(1,288,226) $(256,892) $(1,545,118)
FOUNDATION REALTY FUND, LTD.
(A Florida Limited Partnership)
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(Unaudited)
2000 1999
Net Cash Provided by Operating Activities:
Net Income (Loss) $(41,021) $(22,077)
Adjustments to Reconcile Net Loss to Net Cash
Provided by Operating Activities
Depreciation: 275,112 275,112
Amortization 20,777 20,777
Changes in Operating Assets and Liabilities:
(Increase) in Prepaids (14,839) (17,797)
Increase in Accounts Payable 206,193 191,682
Increase (Decrease) in Security Deposits 1,598 10,730
Increase (Decrease) in Unearned Rents (9,077) (44,046)
Net Cash Provided by Operating Activities 438,743 414,381
Cash Flows from Investing Activities:
Improvements to Apartment Properties (30,989) (67,463)
Net Cash Used in Investing Activities (30,989) (67,463)
Payments from Notes Payable (92,156) (85,373)
Distributions to Partners (211,658) (211,658)
Net Cash used by Financing Activities (303,814) (297,031)
Increase (Decrease) in Cash 103,940 49,887
Cash and Cash Equivalents at Beginning of period 1,168,611 1,057,375
Cash and Cash Equivalents at End of period 1,272,551 1,107,262
Supplemental Cash Flow Information:
Interest Paid $ 672,365 $ 679,149
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 Part-
ners 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 recongized 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 $268,961 at June 30, 2000 and
$392,486 at December 31, 1999 of cash held in escrow for the payment
of real estate taxes. Cash and Cash Equivalents also include
$98,017 at June 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 reimbursment for costs and expenses
incured for the Partnership for the six months ended June 30, 2000.
Property Management Fees $ 92,649
General and Administrative Costs 700
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:
June 30, December 31
2000 1999
Land 3,141,510 3,141,510
Buildings 17,298,118 17,298,118
Furniture & Fixtures 2,076,283 2,045,294
Apartment Properties, at Cost 22,515,911 22,484,922
Less: Accumulated Depreciation (7,692,030) (7,416,918)
14,823,881 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 July 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 six months ended June 30, 2000 was
$1,778,213 as compared to $1,784,950 for the comparable period ended
June 30, 1999. Income from property operations for the six months
ended June 30, 2000 was $694,503 as compared to $726,385 for the
comparable period ended June 30, 1999. The decrease in income from
property operations was due primarily to higher payroll and maintenance
and repair costs.
Interest expense decreased from $679,149 for the six months ended June
30, 1999 to $672,365 for the six months ended June 30, 2000. A reserve
expense accrual was begun in 1999 and amounted to $54,096 on June 30,
2000. This reserve accrual was set up to set aside operational proceeds
for upcoming capital expense items at both apartment properties.
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 increased by $24,362 for the six
month period ended June 30, 2000 as compared to the six month period ended
June 30, 1999. The $24,362 change resulted primarily from a decrease to the
change in unearned rents of $34,969 and increase to the change of [ accounts payable of $14,511 offset by and $18,944 increase] to net loss and
change in the security deposit reserve of $9,132.
Cash used by investing activities totaled $67,463 at June 30, 1999 as
compared to $30,989 at June 30, 2000. The $36,474 decrease for the six
month period ended June 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.
Cash used by financing activities decreased by $6,783 from the six
month period ended June 30, 2000 when compared to the six month period
ended June 30, 1999. The decrease was attributed to an increase in the
amount of principal payment made on the partnership debt in 2000 verse 1999.
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
7/20/00 J. Robert Love - President
Date (Signature)
7/20/00 Alan G. Lee - Secretary
Date (Signature)
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