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FORM 10-Q.--QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
For the period ended September 30, 2000
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
For the transition period from ________to________
Commission File Number: 33-26327
RAINES ROAD, L.P.
(Exact name of Registrant as specified in its charter)
Delaware 62-1375245
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification)
4400 Harding Road, Suite 500, Nashville, Tennessee 37205
(Address of principal executive office) (Zip Code)
(615) 292-1040
(Registrant's telephone number, including area code)
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 at least the past 90 days.
YES X NO
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PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
INDEX
Financial Statements
Balance Sheets 3
Statements of Operations 4
Statements of Cash Flows 5
Notes To Financial Statements 6
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<TABLE>
RAINES ROAD, L.P.
(A Limited Partnership)
BALANCE SHEETS
(Unaudited)
<CAPTION>
ASSETS
September 30, December 31,
2000 1999
<S> <C> <C>
CASH $ 49 $ 5,129
RESTRICTED CASH 143,642 143,642
LAND AND LAND IMPROVEMENTS
HELD FOR INVESTMENT 5,599,928 5,599,928
ACCOUNTS RECEIVABLE FROM
AFFILIATES 3,600 2,100
Total Assets $ 5,747,219 $5,750,799
=========== ==========
LIABILITIES AND PARTNERS' DEFICIT
NOTE PAYABLE TO AFFILIATE $4,700,000 $4,700,000
ACCRUED INTEREST PAYABLE TO
AFFILIATE 4,064,634 3,641,634
ACCOUNTS PAYABLE 29,790 29,790
ACCRUED PROPERTY TAXES 226,092 132,255
Total Liabilities 9,020,516 8,503,679
PARTNERS' DEFICIT:
Limited Partners (1,875 units
outstanding) (3,273,297) (2,752,880)
General Partner - -
Total Partners' deficit (3,273,297) (2,752,880)
Total Liabilities &
Partners' Deficit $ 5,747,219 $ 5,750,799
========== ==========
<FN>
See notes to financial statements.
</TABLE>
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<TABLE>
RAINES ROAD, L.P.
(A Limited Partnership)
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
REVENUES:
LAND SALES:
Gross Proceeds $ - $ - $ - $ -
Cost of Land
and Improvements Sold - - - -
Closing Costs - - - -
Gain on Land Sales - - - -
Interest - - - -
------ ------ ------ --------
Total Revenues - - - -
EXPENSES:
Property Taxes 31,279 41,829 70,626 99,191
Interest 141,000 141,000 423,000 423,000
Program Management Fees 750 750 2,250 2,250
Legal & Accounting 400 825 12,549 11,200
Architect & Engineering - - -
Other Administrative
Expenses 3,741 788 11,992 1,515
Total Expenses 177,170 185,192 520,417 537,156
Net Loss $(177,170) $(185,192)$(520,417) $(537,156)
Net Loss per limited
partner unit $ (94.49) $ (98.77) $ (277.56) $(286.48)
<FN>
See notes to financial statements.
</TABLE>
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<TABLE>
RAINES ROAD, L.P.
(A Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Nine Months Ended
September 30,
2000 1999
<S> <C> <C>
Cash flows from operating activities:
Net Loss $(520,417) $(537,156)
Adjustments to reconcile net
loss to net cash used
by operating activities:
Interest Payable 423,000 430,300
(Decrease) Increase in
Accounts Payable - (4,520)
Increase in Restricted Cash - (2,873)
Increase in Accounts Receivable
from Affiliates (1,500) -
Increase in Accrued Property
Taxes 93,837 -
------- --------
Net Cash used in
Operating Activities: (5,080) (114,249)
NET DECREASE IN CASH (5,080) (114,249)
CASH AT JANUARY 1, 5,129 114,342
CASH AT SEPTEMBER 30, $ 49 $ 93
======= =======
Supplemental Disclosures of
Cash Flow Information:
Cash Paid During the Year
For Interest $ - $ 4,400
====== =======
<FN>
See notes to financial statements.
</TABLE>
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RAINES ROAD, L.P.
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Three and Nine Months Ended September 30, 2000 and 1999
(Unaudited)
A.ACCOUNTING POLICIES
The unaudited financial statements presented herein have been
prepared 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 principles. These statements should
be read in conjunction 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 adjustments, necessary to summarize fairly the
Partnership's financial position and results of operations. The
results of operations for the nine month period ended September 30,
2000 may not be indicative of the results that may be expected for
the year ending December 31, 2000.
B.RELATED PARTY TRANSACTIONS
The General Partner and its affiliates have been actively involved
in managing the property. Compensation earned for these services
for the nine months were as follows:
2000 1999
Program Management Fee $ 2,250 $ 2,250
Accounting Fees $ 8,227 $ 2,200
C.COMPREHENSIVE INCOME
During the three and nine month periods ended September 30, 2000
and 1999, the Partnership had no components of other comprehensive
income. Accordingly, comprehensive loss for each of the periods
was the same as net loss.
RAINES ROAD, L.P.
(A Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
For the Three and Nine Months Ended September 30, 2000 and 1999
(Unaudited) (continued)
D. PARTNERSHIP LIQUIDITY
As of September 30, 2000, the Registrant had $49 in cash reserves.
This balance is not sufficient to meet the operating needs of the
Registrant. Unless there are property sales, the General Partner
will assist the Registrant in meeting operational needs through
affiliated loans.
As of November 9, 2000, the Registrant was involved in a
foreclosure process with the Lender for being in default on the
note agreement. Under the foreclosure, the land and cash held at
the time of the foreclosure would go to the Lender. After the
foreclosure is implemented, the Registrant expects to dissolve the
partnership. The foreclosure is expected to take place in the
fourth quarter of 2000. As a result of the foreclosure, the
Registrant expects to record a $3,277,000 gain due to the
forgiveness of debt.
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Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
There have been no sales during the first nine months of 2000 or
1999. Overall operations of the Registrant are comparable to prior
quarters, except for other administrative expenses and property
tax. Other administrative expenses in 2000 include estimated
Tennessee franchise and excise tax of $10,500. Due to new
legislation in Tennessee, partnerships were required to pay
franchise and excise tax beginning January 1, 2000. The decrease
in property tax for 2000 is due to a refund of contested 1999
property taxes of approximately $23,000 received in the first
quarter.
Financial Condition and Liquidity
As of September 30, 2000, the Registrant had $49 in cash reserves.
This balance is not sufficient to meet the operating needs of the
Registrant. Unless there are property sales, the General Partner
will assist the Registrant in meeting operational needs through
affiliated loans.
As of November 9, 2000, the Registrant was involved in a
foreclosure process with the Lender for being in default on the
note agreement. Under the foreclosure, the land and cash held at
the time of the foreclosure would go to the Lender. After the
foreclosure implemented, the Registrant expects to dissolve the
partnership. The foreclosure is expected to take place in the
fourth quartert of 2000. As a result of the foreclosure, the
Registrant expects to record a $3,277,000 gain due to the
forgiveness of debt.
In June 1998, the Financial Accounting Standards Board issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging
Activities." SFAS No. 133 established reporting standards for
derivative instruments, including certain derivative instruments
embedded in other contracts. Under SFAS No. 133, the Company would
recognize all derivatives as either assets or liabilities, measured
at fair value, in the statement of financial position. In July
1999, SFAS No. 137 "Accounting for Derivative Instruments and
Hedging Activities - Deferral of Effective Date of FASB No. 133, An
Amendment of FASB Statement No. 133" was issued deferring the
effective date of SFAS No. 133 to fiscal years beginning after June
15, 2000. In June 2000, SFAS No. 138 "Accounting for Certain
Derivative Instruments and Certain Hedging Activities, an Amendment
of FASB No. 133" was issued clarifying the accounting for
derivatives under the new standard. The General Partner believes
these pronouncements will have no impact on its consolidated
financial statements.
In December 1999, the Securities and Exchange Commission issued
Staff Accounting Bulletin No. 101 "Revenue Recognition in Financial
Statements" ("SAB 101"). SAB 101 establishes specific criterion
for revenue recognition. In June 2000, the Securities and Exchange
Commission issued ("SAB 101B"), which amends SAB 101 no later than
the fourth quarter of its fiscal year ending December 31, 2000.
The General Partner believes that this SAB will have no impact on
the Company's revenue recognition and presentation policies.
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Part II. OTHER INFORMATION
Item 6.Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedule
(b) No 8-K's have been filed during this quarter.
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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.
RAINES ROAD, L.P.
By: 222 RAINES LTD.
General Partner
Date: November 14, 2000 By: /s/ Steven D. Ezell
General Partner
By: 222 PARTNERS, INC.
General Partners
Date: November 14, 2000 By: /s/ Michael A. Hartley
Secretary/Treasurer
