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, 1997 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, 1997
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, 1997 and December 31, 1996 3
Statements of Operations -
For the Three Months Ended March 31, 1997 and 1996 4
Statements of Partners' Equity -
For the Three Months Ended March 31, 1997 and 1996 5
Statements of Cash Flows -
For the Three Months Ended March 31, 1997 and 1996 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, 1997 December 31, 1996
(Unaudited) Audited
ASSETS
<S> <C> <C>
Aparment Properties, at Cost $22,226,642 $22,209,901
Less - Accumulated Depreciation (5,932,355) (5,759,354)
16,294,287 16,450,547
Cash and Cash Equivalents 1,175,895 1,069,572
Prepaid Expenses 37,359 10,818
TOTAL ASSETS $17,507,541 $17,530,937
LIABILITIES AND PARTNERS' EQUITY
Liabilites:
Notes Payable $17,329,079 $17,196,565
Accounts Payable 117,717 29,541
Security Deposits 93,816 93,797
Unearned Rent 28,943 55,837
TOTAL LIABILITIES 17,569,555 17,375,740
Partner's Equity
Limited Partners' Equity (9,407 units
outstanding @ March 31, 1997 and
December 31, 1996 176,576 382,927
General Partner's Equity (238,590) (227,730)
TOTAL PARTNERS' EQUITY (62,014) 155,197
TOTAL LIABILITES AND PARTNERS' EQUITY $17,507,541 $17,530,937
</TABLE>
<TABLE>
FOUNDATION REALTY FUND, LTD.
<CAPTION> (A Florida Limited Partnership)
STATEMENT OF OPERATIONS
(Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31
<S> 1997 1996
Property Operations : <C> <C>
Rental Income $876,584 $855,569
Miscellaneous 22,860 28,287
899,444 883,856
Expenses:
Depreciation 173,001 175,000
Payroll 84,123 76,107
Real Estate Taxes 70,731 69,054
Utilities 49,727 47,324
Repairs & Maintenance 45,210 50,867
Property Management - General Partner 44,617 44,891
Landscaping 23,407 25,038
Other 29,985 24,149
520,801 512,430
Income from Property Operations 378,643 371,426
Interest Income 11,230 11,355
389,873 382,781
Other Exenses:
Interest 403,662 391,975
General & Administrative - Affiliate 814 660
Other General & Administrative 4,566 953
409,042 393,588
Net Loss $(19,169) $(10,807)
Allocation of Net Loss -
Limited Partners $(18,211) $(10,267)
General Partners (958) (540)
$(19,169) $(10,807)
Net Loss Per Limited Partnership Unit$ (1.94) $ (1.09)
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, 1997 AND 1996
Limited General Total
Partners' Partners' Partners'
Equity Equity Equity
<S> <C> <C> <C>
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) (10,807)
Balance, March 31, 1996 $ 1,079,691 $ (191,058) $ 888,633
Balance, December 31, 1996 $ 382,927 $ (227,730) $ 155,197
Distribution to Partners (188,140) (9,902) (198,042)
Net Loss (18,211) (958) (19,169)
Balance, March 31, 1997 $ 176,576 $ (238,590) $ (62,014)
</TABLE>
<TABLE>
FOUNDATION REALTY FUND, LTD.
<CAPTION> (A Florida Limited Partnership)
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(Unaudited)
<S> 1997 1996
Net Cash Provided by Operating Activities: <C> <C>
Net Loss $ (19,169) $ (10,807)
Adjustments to Reconcile Net Loss to Net Cash
Provided by Operating Activities
Depreciation: 173,001 175,000
Changes in Operating Assets and Liabilities:
(Increase) in Prepaids (26,541) (32,882)
Increase in Accounts Payable 88,176 77,726
Increase (Decrease) in Security Deposits 19 (2,609)
(Decrease) in Unearned Rents (26,894) (14,234)
Net Cash Provided by Operating Activities 188,592 192,194
Cash Flows from Investing Activities:
Improvements to Apartment Properties (16,741) (20,828)
Net Cash Used in Investing Activities (16,741) (20,828)
Cash Flows from Financing Activities:
Proceeds from Notes Payable 142,164 129,650
Payments from Notes Payable (9,650) (8,822)
Distributions to Partners (198,042) (191,804)
Net Cash used by Financing Activities (65,528) (70,976)
Increase (Decrease) in Cash 106,323 100,390
Cash and Cash Equivalents at Beginning of period 1,069,572 978,730
Cash and Cash Equivalents at End of period 1,175,895 1,079,120
Supplemental Cash Flow Information:
Interest Paid $ 261,498 $ 262,325
Supplemental Disclosure of Non-Cash
Financing Activities:
Deferred Interest on Mortgage Note Payable 142,164 129,650
</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 $162,053 at March 31, 1997 and
$108,773 at December 31, 1996 of cash held in escrow for the payment
of real estate taxes. Cash and Cash Equivalents also include
$93,816 at March 31, 1997 and $93,797 at December 31, 1996 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, 1997.
Property Management Fees $ 44,617
General and Administrative Costs 814
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
1997 1996
Land 3,141,510 3,141,510
Buildings 17,298,118 17,298,118
Furniture & Fixtures 1,787,014 1,770,273
Apartment Properties, at Cost 22,226,642 22,209,901
Less: Accumulated Depreciation (5,932,355) (5,759,354)
16,294,287 16,450,547
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, 1996. 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, 1997, 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, 1997 was
$876,584 as compared to $855,569 for the comparable period ended
March 31, 1996. Income from property operations for the three months
ended March 31, 1997 was $378,643 as compared to $371,426 for the
comparable period ended March 31, 1996. The increase in rental
income was a result of higher rental rates being in effect in 1997
which offset slightly higher operating costs.
Interest expense increased from $391,975 for the three months ended
March 31, 1996 to $403,662 for the three months ended March 31, 1997.
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, 1997 was $19,169 or
$1.94 per Limited Partnership Unit outstanding as compared to a
loss of $10,807 or $1.09 per Limited Partnership Unit for the compar-
able period ended March 31, 1996.
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 $8,772,337 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 $3,602 for the
three month period ended March 31, 1996 as compared to the three month
period ended March 31, 1997. The change resulted from an increased
operating net loss and decrease in unearned rents offset by increases
in prepaids and accounts payable from December 31, 1996 to March 31, 1997.
Cash used by investing activities totaled $16,741 at March 31, 1997 as
compared to $20,828 at March 31, 1996. The $4,087 decrease for the three
month period ended March 31, 1997 is solely attributable to the decrease
in the number of carpets replaced in the apartment units of both
apartment communities.
Cash used by financing activities decreased by $5,448 from the three
month period ended March 31, 1997 when compared to the three month
period ended March 31, 1996. An increase in the Oakwood Village
purchase money first mortgage interest accrual of $12,514 for the
period offset an increase in partner distributions of $6,238 and
principal payments on the Oakwood Village purchase money second
mortgage of $828 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
5/10/97 J. Robert Love - President
Date (Signature)
5/10/97 Alan G. Lee - Assitant Secretary
Date (Signature)
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1997
<CASH> $1,175,895
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> $1,213,254
<PP&E> $22,226,642
<DEPRECIATION> $5,932,355
<TOTAL-ASSETS> $17,507,541
<CURRENT-LIABILITIES> $240,476
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> ($62,014)
<TOTAL-LIABILITY-AND-EQUITY> $17,507,541
<SALES> 0
<TOTAL-REVENUES> $910,674
<CGS> 0
<TOTAL-COSTS> $520.801
<OTHER-EXPENSES> $5,380
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> $403,662
<INCOME-PRETAX> ($19,169)
<INCOME-TAX> 0
<INCOME-CONTINUING> ($19,169)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> ($19,169)
<EPS-PRIMARY> ($1.94)
<EPS-DILUTED> ($1.94)
</TABLE>
