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, 1996 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, 1996
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, 1996 and December 31, 1995 3
Statements of Operations -
For the Three Months Ended March 31, 1996 and 1995 4
Statements of Partners' Equity -
For the Three Months Ended March 31, 1996 and 1995 5
Statements of Cash Flows -
For the Three Months Ended March 31, 1996 and 1995 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, 1996 December 31, 1995
(Unaudited) Audited
ASSETS
<S> <C> <C>
Aparment Properties, at Cost $22,134,973 $22,114,145
Less - Accumulated Depreciation (5,304,893) (5,129,893)
16,830,080 16,984,252
Cash and Cash Equivalents 1,079,120 978,730
Prepaid Expenses 33,473 584
TOTAL ASSETS $17,942,673 $17,963,566
LIABILITIES AND PARTNERS' EQUITY
Liabilites:
Notes Payable $16,820,862 $16,700,035
Accounts Payable 127,656 46,922
Security Deposits 93,021 95,630
Unearned Rent 12,501 26,735
TOTAL LIABILITIES 17,054,040 16,872,322
Partner's Equity
Limited Partners' Equity (9,407 units
outstanding @ March 31, 1996 and
December 31, 1995 1,079,691 1,272,172
General Partner's Equity (191,058) (180,928)
TOTAL PARTNERS' EQUITY 888,633 1,091,244
TOTAL LIABILITES AND PARTNERS' EQUITY $17,942,673 $17,963,566
</TABLE>
<TABLE>
FOUNDATION REALTY FUND, LTD.
<CAPTION> (A Florida Limited Partnership)
STATEMENT OF OPERATIONS
(Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31
<S> 1996 1995
Property Operations : <C> <C>
Rental Income $855,569 $829,197
Miscellaneous 28,287 23,881
883,856 853,078
Expenses:
Depreciation 175,000 173,000
Payroll 76,107 67,353
Real Estate Taxes 69,054 67,738
Utilities 47,324 51,958
Repairs & Maintenance 50,867 53,358
Property Management - General Partner 44,891 42,602
Landscaping 25,038 20,486
Other 24,149 23,812
512,430 500,307
Income from Property Operations 371,426 352,771
Interest Income 11,355 10,514
382,781 363,285
Other Exenses:
Interest 391,975 381,339
General & Administrative - Affiliate 660 210
Other General & Administrative 953 1,222
393,588 382,771
Net Loss $(10,807) $(19,486)
Allocation of Net Loss -
Limited Partners $(10,267) $(18,512)
General Partners (540) (974)
$(10,807) $(19,486)
Net Loss Per Limited Partnership Unit$ (1.09) $ (1.97)
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, 1996 AND 1995
Limited General Total
Partners' Partners' Partners'
Equity Equity Equity
<S> <C> <C> <C>
Balance, December 31, 1994 $ 2,165,476 $ (133,913) $ 2,031,563
Distribution to Partners (176,381) (9,283) (185,664)
Net Loss (18,512) (974) (19,486)
Balance, March 31, 1995 $ 1,970,583 $ (144,170) $ 1,826,413
Balance, December 31, 1995 $ 1,272,172 $ (180,928) $ 1,091,244
Distribution to Partners (182,214) (9,590) (191,804)
Net Loss (10,267) (540) (10,708)
Balance, March 31, 1996 $ 1,079,691 $ (191,058) $ 888,633
</TABLE>
<TABLE>
FOUNDATION REALTY FUND, LTD.
<CAPTION> (A Florida Limited Partnership)
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(Unaudited)
<S> 1996 1995
Net Cash Provided by Operating Activities: <C> <C>
Net Loss $ (10,807) $ (19,486)
Adjustments to Reconcile Net Loss to Net Cash
Provided by Operating Activities
Depreciation: 175,000 173,000
Changes in Operating Assets and Liabilities:
(Increase) in Prepaids (32,882) (30,791)
Increase in Accounts Payable 77,726 67,738
Increase (Decrease) in Security Deposits (2,609) 1,463
Increase (Decrease) in Unearned Rents (14,234) 4,370
Net Cash Provided by Operating Activities 192,194 196,294
Cash Flows from Investing Activities:
Improvements to Apartment Properties (20,828) (11,384)
Net Cash Used in Investing Activities (20,828) (11,384)
Cash Flows from Financing Activities:
Proceeds from Notes Payable 129,650 118,237
Payments from Notes Payable (8,822) (8,046)
Distributions to Partners (191,804) (185,664)
Net Cash used by Financing Activities (70,976) (75,473)
Increase (Decrease) in Cash 100,390 109,437
Cash and Cash Equivalents at Beginning of period 978,730 828,960
Cash and Cash Equivalents at End of period 1,079,120 938,397
Supplemental Cash Flow Information:
Interest Paid $ 262,325 $ 263,102
Supplemental Disclosure of Non-Cash
Financing Activities:
Deferred Interest on Mortgage Note Payable 129,650 118,237
</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 majority-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 $100,036 at March 31, 1996 and
$46,756 at December 31, 1995 of cash held in escrow for the payment
of real estate taxes. Cash and Cash Equivalents also include
$93,021 at March 31, 1996 and $95630 at December 31, 1995 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, 1996.
Property Management Fees $ 44, 891
General and Administrative Costs 660
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
1996 1996
Land 3,141,510 3,141,510
Buildings 17,298,118 17,298,118
Furniture & Fixtures 1,695,345 1,674,517
Apartment Properties, at Cost 22,134,973 22,114,145
Less: Accumulated Depreciation (5,304,893) (5,129,893)
16,830,080 16,984,252
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, 1995. 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 April 30, 1996, the Partnership paid distributions of $188, 140
to the Limited Partners and $9,902 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, 1996 was
$855,569 as compared to $829,197 for the comparable period ended
March 31, 1995. Income from property operations for the three months
ended March 31, 1996 was $371,771 as compared to $352,771 for the
comparable period ended March 31, 1995. The increase in rental
income was a result of higher rental rates being in effect in 1996
which offset slightly higher operating costs. Operating payroll cost
increased $8,754 or 13% during the three month period ended March 31,
1996 when compared to the three month period ended March 31, 1995. An
employee for a newly created position was hired by the Oakwood Village
Apartments in mid-1995. In addition, incentive compensation increased
approximately $1,000 at the Oakwood Village Apartments and annual pay-
roll increases of between 2%-3% were implemented at both apartment
communities.
Interest income increased from $10,514 for the three months ended
March 31, 1995 to $11,355 for the comparable period in 1996. This
increase resulted from a greater investment balance available and
subsequent interest earnings on this investment balance during the
three months ended March 31, 1996.
Interest expense increased from $381,339 for the three months ended
March 31, 1995 to $391,975 for the three months ended March 31, 1996.
This increase in interest expense is a result of increases to the
principal loan balance. The loan balance increases because interest
accrues and is added to the loan balance for the Oakwood Village
First Purchase Money Mortgage.
Net loss for the three months ended March 31, 1996 was $10,807 or
$1.09 per Limited Partnership Unit outstanding as compared to a
loss of $19,486 or $1.97 per Limited Partnership Unit for the compar-
able period ended March 31, 1995.
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.
Long-term capital resources will be necessary to cover the mortgage
balloon payments of $8,779,077 in 1997 and $8,825,000 in 1998. In
management's opinion, proposed sources of funding to meet these long-
term obligations will include either a debt refinancing or property
sale.
Cash provided by operating activities decreased by $4,100 for the
three month period ended March 31, 1995 as compared to the three month
period ended March 31, 1996. The change resulted from a decrease in
unearned rents of $14,234 offset slightly by a lower operating net
loss.
Cash used by investing activities totaled $11,384 at March 31, 1995 as
compared to $20,828 at March 31, 1996. The $9,444 increase for the
month period ended March 31, 1996 is solely attributable to the in-
cease in the number of carpets replaced in the apartment units of both
apartment communities.
Cash used by financing activities decreased by $4,497 from the three
month period ended March 31, 1996 when compared to the three month
period ended March 31, 1995. An increase in the Oakwood Village
purchase money first mortgage interest accrual of $11, 413 for the
period offset an increase in partner distributions of $6,140 and
principal payments on the Oakwood Village purchase money record
mortgage of $776 to account for this change.
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
5/10/96 J. Robert Love - President
Date (Signature)
5/10/96 Alan G. Lee - Assitant Secretary
Date (Signature)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1996
<CASH> $1,079,120
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> $1,112,593
<PP&E> $22,134,973
<DEPRECIATION> $5,304,893
<TOTAL-ASSETS> $17,942,673
<CURRENT-LIABILITIES> $233,178
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> $888,633
<TOTAL-LIABILITY-AND-EQUITY> $17,942,673
<SALES> 0
<TOTAL-REVENUES> $895,211
<CGS> 0
<TOTAL-COSTS> $512,430
<OTHER-EXPENSES> $1,613
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> $391,975
<INCOME-PRETAX> ($10,807)
<INCOME-TAX> 0
<INCOME-CONTINUING> ($10,807)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> ($10,807)
<EPS-PRIMARY> ($1.09)
<EPS-DILUTED> ($1.09)
</TABLE>
