MASTER ANNUAL REPORT

Frenchman’s Creek, Inc. and Subsidiary

Notes to Consolidated Financial Statements ______________________________________________________________________________________________________________

Note 5. Future Major Repairs and Replacements (Continued) The activity in the Replacement Fund for the years ended April 30, 2018 and 2017, is summarized as follows:

Drainage,

Painting and

Dredging

Roof

Infrastructure and Sea Walls

Total

Balance April 30, 2016

$

20,719

$

349,677

$

383,660

$

754,056

Additions

300,000

550,000

66,000

916,000

Expenditures

(216,961)

(429,124)

(90,304)

(736,389)

Interfund transfer

-

134,624

134,624

Balance April 30, 2017

103,758

605,177

359,356

1,068,291

Additions

300,000

750,000

66,000

1,116,000

Expenditures

(275,483)

(371,621)

(45,077) 380,279

(692,181)

Balance April 30, 2018

$

128,275

$

983,556

$

$

1,492,110

Note 6. Deferred Compensation Plan and Investments The Association has a deferred compensation agreement with the Executive Director. The terms of the agreement provide for additional compensation per year beginning June 30, 2002. The Association has con- tributed $1,323,660 and $1,213,420 into the plan as of April 30, 2018 and 2017, respectively, which is includ- ed in deferred compensation investments on the consolidated balance sheets. The contributions are placed in a separate investment account which is adjusted for any earnings or losses of the investments during the preceding year. The investment account consists of a diversified portfolio including cash, stocks, mutual funds and corporate fixed income securities. As of April 30, 2018 and 2017, investments at fair value, to fully fund the deferred compensation plan amounted to $1,739,985 and $1,543,485, respectively. The Executive Director agrees under the provisions of the agreement to assume all risk in connection with any decrease in the value of the amounts which are invested in the plan. Note 7. Long-Term Debt and Lines of Credit The Association has a revolving line of credit in the amount of $1,500,000. The line of credit has an interest rate equal to one month LIBOR plus 1.50% (3.40% as of April 30, 2018) and matures December 1, 2020. There were no borrowings on this line of credit during the years ended April 30, 2018 and 2017. In addition, on June 30, 2016, the Association entered into an additional $2,000,000 reducing revolving loan maturing on December 1, 2020. The available funds decline by $500,000 each year on December 1 until ma- turity. The line has an interest rate of LIBOR daily floating rate plus 1.5% (3.40% as of April 30, 2018) with accrued interest payable on a monthly basis and principal due on December 1 of each year until maturity. The Club had no borrowings or repayments during 2018 and borrowings and repayments of $300,000 in 2017. There are no outstanding borrowings as of April 30, 2018 and 2017.

2018/2019 Annual Report Page 39