<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For quarter ended March 31, 1995
--------------
Commission file number 0-8902
------
REAL ESTATE FUND INVESTMENT TRUST
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
SOUTH CAROLINA 57-0402813
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
304 South Main Street 29644
P.O. Box 396, Fountain Inn, S.C. ----------
---------------------------------------- (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (803) 862-3765
--------------------------------------------------- --------------
Former name, former address and former fiscal year, if changed since last
-------------------------------------------------------------------------
report: N/A
------- ---
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 the past 90
days.
Yes X No
------- -------
The number of shares outstanding of the Registrant's Shares of
Beneficial Interest, as of May 12, 1995: 2,090,108
---------
<PAGE> 2
Real Estate Fund Investment Trust
Index
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed balance sheet--March 31, 1995
Condensed statements of income--Three months ended March 31,
1995 and 1994
Condensed statements of cash flows--Three months ended March
31, 1995 and 1994
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
<PAGE> 3
Part I. Financial Information
Real Estate Fund Investment Trust
Condensed Balance Sheet
<TABLE>
<CAPTION>
MARCH 31,
1995
-----------
(Unaudited)
<S> <C>
ASSETS
Real estate investments:
Equity investments in real estate, less allowances for
depreciation:
Earning $1,529,941
Non-earning 463,424
----------
1,993,365
Net investment in direct financing leases 306,854
Mortgage notes receivable 167,800
----------
474,654
Other assets:
Cash and cash equivalents 466,901
Rents and tenant charges receivable, net of allowance for
uncollectible accounts of $45,000 in 1995 60,919
Sales proceeds held in escrow 146,954
Prepaid expenses and other 50,477
----------
725,251
----------
$3,193,270
==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Accrued property taxes $ 33,182
Other accrued expenses 92,354
Deferred income taxes 2,000
----------
127,536
Shareholders' equity:
Shares of Beneficial Interest, par value $1.00 per
share--unlimited authorization, issued and
outstanding 2,090,108 shares 2,090,108
Additional paid-in capital 759,110
Undistributed net income 216,516
----------
3,065,734
----------
$3,193,270
==========
</TABLE>
<PAGE> 4
Real Estate Fund Investment Trust
Condensed Statements of Income (Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
1995 1994
----------------------------
<S> <C> <C>
Revenues:
Rental income $ 218,644 $ 201,200
Earned income from direct financing leases 11,652 13,691
Interest on mortgage notes and money
market accounts 6,918 7,157
Miscellaneous 84 5
---------- ----------
237,298 222,053
Expenses:
Provision for depreciation 42,832 40,525
Property and miscellaneous taxes 41,528 42,704
Maintenance and repairs, including payments of
$9,000 (1995) and $7,196 (1994) to a
company in which the independent
contractor is a principal owner 24,933 17,622
Other expenses 67,932 67,564
---------- ----------
177,225 168,415
---------- ----------
Income before income taxes 60,073 53,638
Provision for federal and state income taxes 1,100 1,000
---------- ----------
Income from operations 58,973 52,638
Gain on sale of equity investment in real estate,
net of taxes 139,201 --
---------- ----------
Net income $ 198,174 $ 52,638
========== ==========
Net income per Share of Beneficial Interest:
Income from operations $ .03 $ .03
Gain on sale of real estate .07
---------- ----------
$ .10 $ .03
========== ==========
Number of shares used in computation 2,090,108 2,090,108
========== ==========
Cash distributions declared per Share of
Beneficial Interest $ .05 $ .04
========== ==========
</TABLE>
<PAGE> 5
Real Estate Fund Investment Trust
Condensed Statements of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
March 31
1995 1994
-------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 198,174 $ 52,638
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation of equity investments in real estate 42,670 40,403
Gain on sale of equity investment in real estate (139,301) -
Recovery of investment in direct financing leases 10,623 10,333
(Increase) decrease in rents and tenant charges receivable,
prepaid expenses, escrow deposits and other assets (94,232) 26,300
Decrease in accrued property taxes, other accrued
expenses and federal and state income taxes payable (109,101) (129,890)
--------- ---------
Net cash provided by operating activities (91,167) (216)
INVESTING ACTIVITIES
Proceeds from sale of equity investment in real estate,
net of selling expense of $1271 (1995) 146,229 -
Additional costs of equity investments in real estate (30,511) (53,072)
Collections of mortgage notes receivable 4,774 4,430
--------- ---------
Net cash provided (used) by investing activities 120,492 (48,642)
DIVIDENDS PAID (104,505) (83,605)
--------- ---------
Decrease in cash and cash equivalents (75,180) (132,463)
Cash and cash equivalents at beginning of period 542,081 688,124
--------- ---------
Cash and cash equivalents at end of period $ 446,901 $ 555,661
========= =========
</TABLE>
<PAGE> 6
MANAGEMENT'S DISCUSSION AND ANALYSIS
There has been no significant change in the Trust's liquidity or financial
condition since December 31, 1994. At present there are no large capital
expenditures planned that would present a liquidity problem. In the Trust's
Form 10-KSB for the year ended December 31, 1994, disclosure was made of the
shareholders' vote to direct the Board of Trustees to develop a plan of
liquidation of the Trust's assets. Although negotiations are continuing, no
formal sales agreements to sell the Trust's assets have been executed at this
time. The plan of liquidation must also be approved by the shareholders. The
Trust intends to continue to distribute as dividends at least 95% of its
taxable income until such time as the plan of liquidation is approved.
Rental income increased by approximately 9% during the three-month period ended
March 31, 1995, as compared to the three-month period ended March 31, 1994.
This increase is primarily due to recent leases of property, which was vacant
as of March 31, 1994. As of March 31, 1995, the Trust had approximately
109,000 square feet of vacant space as compared to approximately 167,000 square
feet of vacant space at March 31, 1994.
Total expenses have increased by approximately 5% during the three-month period
ended March 31, 1995, as compared to the three-month period ended March 31,
1994. This increase is largely due to an increase in maintenance and repairs.
Maintenance and repairs incurred during the quarter ended March 31, 1995 was
consistent with the amount of maintenance and repairs incurred in prior
quarters. However, maintenance and repair expenditures incurred during the
quarter ended March 31, 1994 was slightly less than the normal amount incurred
during a three-month period.
For 1994 and 1993, the Trust has provided for Federal and state income taxes,
assuming a consistent flow of revenue and expenses for the year. The taxes are
based on estimated taxable income after the 95% dividend distribution required
by IRS code provisions pertaining to real estate investments trusts.
In April of 1995, the Trust sold the Quick Way property located in Anderson,
South Carolina for $85,000. A gain for financial reporting purposes of
approximately $57,000 and a gain for tax purposes of approximately $65,000 will
be reported in the second quarter of 1995 due to this sale. In addition, the
Trust has two outstanding offers for the sale of real estate as of the date of
this report. However, contracts for sale have not been entered into at this
time. Based on preliminary discussions, the Trust anticipates recognizing a
profit for financial statement purposes and for tax purposes if either of these
properties are ultimately sold, pursuant to these two outstanding offers.
<PAGE> 7
Part II. Other Information
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
Exhibit 27 - Financial Data Schedule (For SEC Use Only)
The Trust did not file any reports on Form 8-K during
the three months ended March 31, 1995.
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.
Real Estate Fund Investment Trust
---------------------------------
(Registrant)
Date May 12, 1995 /s/ WERNER B. MCDANNALD
--------------- ---------------------------------
Werner B. McDannald, Manager
Date May 12, 1995 /s/ STEWART H. GARRETT
--------------- ---------------------------------
Stewart H. Garrett, Sec./Treas.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONDENSED
BALANCE SHEET, CONDENSED STATEMENTS OF INCOME AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FIRST QUARTER 10-QSB FOR 1995.
</LEGEND><F1>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 466,901
<SECURITIES> 0
<RECEIVABLES> 273,719
<ALLOWANCES> 45,000
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,193,270
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 2,090,108
0
0
<OTHER-SE> 975,626
<TOTAL-LIABILITY-AND-EQUITY> 3,193,270
<SALES> 0
<TOTAL-REVENUES> 237,298
<CGS> 0
<TOTAL-COSTS> 177,225
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 60,073
<INCOME-TAX> 1,100
<INCOME-CONTINUING> 58,973
<DISCONTINUED> 0
<EXTRAORDINARY> 139,201
<CHANGES> 0
<NET-INCOME> 198,174
<EPS-PRIMARY> .10
<EPS-DILUTED> .10
<FN>
<F1>This company is a real estate investment trust. Therefore, several of the
items requested are not specifically indentified on the 10-QSB. A $3,600.00
provision for doubtful accounts is included with other expenses on the income
statement.
</FN>
</TABLE>
