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 March 31, 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
March 31, 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 March 31, 2000 and December 31, 1999 3
Statements of Operations -
For the Three Months Ended March 31, 2000 and 1999 4
Statements of Partners' Equity -
For the Three Months Ended March 31, 2000 and 1999 5
Statements of Cash Flows -
For the Three Months Ended March 31, 2000 and 1999 6
Notes to Financial Statements 7-9
Management's Discussion and Analysis if Financial
Condition and Results of Operations 10-11
<TABLE>
FOUNDATION REALTY FUND, LTD.
(A Florida Limited Partnership)
<CAPTION>
BALANCE SHEET
March 31, 2000 December 31, 1999
(Unaudited) Audited
ASSETS
<S> <C> <C>
Aparment Properties, at Cost $22,502,750 $22,484,922
Less - Accumulated Depreciation (7,554,474) (7,416,918)
14,948,276 15,068,004
Cash and Cash Equivalents 1,244,380 1,168,611
Prepaid Expenses 34,810 8,096
Deferred Loan Cost (Net of Accumulated
Amortization of $103,886 and $93,497) 186,993 197,382
TOTAL ASSETS $16,414,459 $16,442,093
LIABILITIES AND PARTNERS' EQUITY
Liabilites:
Notes Payable $17,515,982 $17,561,620
Accounts Payable 163,665 39,771
Security Deposits 100,329 96,419
Unearned Rent 28,510 36,722
TOTAL LIABILITIES 17,808,486 17,734,532
Partner's Equity
Limited Partners' Equity (9,407 units
outstanding @ March 31, 2000 and
December 31, 1999 (1,139,398) (1,037,598)
General Partner's Equity (254,629) (254,841)
TOTAL PARTNERS' EQUITY (1,394,027) (1,292,439)
TOTAL LIABILITES AND PARTNERS' EQUITY $16,414,459 $16,442,093
</TABLE>
<TABLE>
FOUNDATION REALTY FUND, LTD.
<CAPTION> (A Florida Limited Partnership)
STATEMENT OF OPERATIONS
(Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31
<S> 2000 1999
Property Operations : <C> <C>
Rental Income $880,875 $893,899
Miscellaneous 33,899 18,926
914,774 912,825
Expenses:
Depreciation 137,556 137,556
Payroll 98,006 97,163
Real Estate Taxes 72,159 70,386
Utilities 40,142 44,203
Repairs & Maintenance 92,042 74,063
Property Management - General Partner 46,119 45,005
Landscaping 23,878 14,000
Other 34,145 30,219
544,047 512,595
Income from Property Operations 370,727 400,230
Interest Income 9,502 7,668
380,229 407,898
Other Exenses:
Amortization 10,389 10,389
Interest 336,623 339,982
General & Administrative - Affiliate 170 110
Reserve Expense 27,048 27,051
Other General & Administrative 1,758 5,291
375,988 382,823
Net Income (Loss) $ 4,241 $ 25,075
Allocation of Net Income (Loss) -
Limited Partners $ 4,029 $ 23,821
General Partners 212 1,254
$ 4,241 $ 25,075
Net Income (Loss) Per
Limited Partnership Unit $ .43 $ 2.53
Number of Limited Partnership Units 9,407 9,407
</TABLE>
<TABLE>
FOUNDATION REALTY FUND, LTD.
(A Florida Limited Partnership)
<CAPTION>
STATEMENT OF PARTNERS' EQUITY
(Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
Limited General Total
Partners' Partners' Partners'
Equity Equity Equity
<S> <C> <C> <C>
Balance, December 31, 1998 $(830,569) $ (262,511) $(1,093,080)
Distribution to Partners (105,829) 0 (105,829)
Net Loss 23,821 1,284 25,105
Balance, March 31, 1999 $(912,577) $ (261,227) $(1,173,804)
Balance, December 31, 1999 $(1,037,598) $ (254,841) $(1,292,439)
Distribution to Partners (105,829) 0 (105,829)
Net Income 4,029 212 4,241
Balance, March 31, 2000 $(1,139,398) $(254,629) $(1,394,027)
</TABLE>
<TABLE>
FOUNDATION REALTY FUND, LTD.
<CAPTION> (A Florida Limited Partnership)
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(Unaudited)
<S> 2000 1999
Net Cash Provided by Operating Activities: <C> <C>
Net Income (Loss) $ 4,241 $ 25,075
Adjustments to Reconcile Net Loss to Net Cash
Provided by Operating Activities
Depreciation: 137,556 137,556
Amortization 10,389 10,389
Changes in Operating Assets and Liabilities:
(Increase) in Prepaids (26,714) (29,884)
Increase in Accounts Payable 123,894 106,652
Increase in Security Deposits 3,910 3,255
(Decrease) in Unearned Rents (8,212) (38,232)
Net Cash Provided by Operating Activities 245,064 214,811
Cash Flows from Investing Activities:
Improvements to Apartment Properties (17,828) (23,584)
Net Cash Used in Investing Activities (17,828) (23,584)
Cash Flows from Financing Activities:
Payments from Notes Payable (45,638) (42,278)
Distributions to Partners (105,829) (105,829)
Net Cash used by Financing Activities (151,467) (148,107)
Increase (Decrease) in Cash 75,769 43,120
Cash and Cash Equivalents at Beginning of period 1,168,611 1,057,375
Cash and Cash Equivalents at End of period 1,244,380 1,100,495
Supplemental Cash Flow Information:
Interest Paid $ 336,623 $ 339,982
Supplemental Disclosure of Non-Cash
Financing Activities:
</TABLE>
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 $494,251 at March 31, 2000 and
$392,480 at December 31, 1999 of cash held in escrow for the payment
of real estate taxes and capital replacement items. Cash and Cash
Equivalents also include $100,329 at March 31, 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 three months ended March
31, 2000.
Property Management Fees $ 46,119
General and Administrative Costs 170
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:
March 31, December 31
2000 1999
Land 3,141,510 3,141,510
Buildings 17,298,118 17,298,118
Furniture & Fixtures 2,063,122 2,045,294
Apartment Properties, at Cost 22,502,750 22,484,922
Less: Accumulated Depreciation (7,554,474) (7,416,918)
14,948,276 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, 1998. 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 May 1, 2000, the Partnership paid distributions of $105,829
to the Limited Partners and $-0- to the General 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 three months ended March 31, 2000 was
$880,875 as compared to $893,899 for the comparable period ended
March 31, 1999. Income from property operations for the three months
ended March 31, 2000 was $370,727 as compared to $400,230 for the
comparable period ended March 31, 1999. The decrease in rental
income was a result of lower occupancy levels at the Oakwood Village
Apartments in Atlanta, Georgia and higher repair and maintenance expenses
at this same apartment community. The decrease was offset
somewhat by rent increases instituted at both apartment properties
during the last twelve months.
Interest expense decreased from $339,982 for the three months ended
March 31, 1999 to $336,627 for the three months ended March 31, 2000.
This decrease in interest expense is a result of a refinancing of the
original debt to new loans with a lower interest rate and a replacement of
the Oakwood Village First Purchase Money Mortgage with a traditional
amortizing loan.
Net income for the three months ended March 31, 2000 was $4,241 or
$.43 per Limited Partnership Unit outstanding as compared to income
of $25,075 or $2.53 per Limited Partnership Unit for the comparable
period ended March 31, 1999. The $20,834 decrease in net income was primarily
a result of an increase in repairs and maintenance expense of $17,779.
The repair and maintenance expense increase is attributable to an $12,373
increase in plumbing related repairs at the Oakwood Village Apartments
and an increase in apartment turnover expense at the Springfield Apartments.
Year 2000 Disclosure
The partnership's operations were not affected negatively by the advent of
the year 2000. The partnership spent between five and seven thousand dollars
towards the Y2K preparations and these amounts were expensed due to
immateriality.
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 $30,253 for the
three month period ended March 31, 2000 as compared to the three month
period ended March 31, 1999. The change resulted primarily from a
$47,262 increase in accounts payable offset by a decline in net operating
income of $20,834.
Cash used by investing activities totaled $17,828 at March 31, 2000 as
compared to $23,584 at March 31, 1999. The $5,756 increase for the three
month period ended March 31, 2000 is solely attributable to the decrease
in the number of carpets replaced in the apartment units of the Springfield
Apartments.
Cash used by financing activities increased by $3,360 from the three
month period ended March 31, 1999 when compared to the three month
period ended March 31, 2000. The increase is solely attributed to the
increase in principal payments on the partnership debt.
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
5/10/00 J. Robert Love - President
Date (Signature)
5/10/00 Alan G. Lee - Assitant Secretary
Date (Signature)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-2000
<CASH> $1,244,380
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> $1,466,183
<PP&E> $22,502,750
<DEPRECIATION> $7,554,474
<TOTAL-ASSETS> $16,414,459
<CURRENT-LIABILITIES> $292,504
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> (1,394,027)
<TOTAL-LIABILITY-AND-EQUITY> $16,414,459
<SALES> 0
<TOTAL-REVENUES> $924,276
<CGS> 0
<TOTAL-COSTS> $544,047
<OTHER-EXPENSES> $39,365
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> $336,623
<INCOME-PRETAX> $ 4,241
<INCOME-TAX> 0
<INCOME-CONTINUING> $ 4,241
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> $ 4,241
<EPS-BASIC> $ .43
<EPS-DILUTED> $ .43
</TABLE>
