UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ XX ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
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 0-7761
URBAN IMPROVEMENT FUND LIMITED 1973
(Exact name of registrant as specified in its charter)
California 95-6442510
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification
No.)
1201 Third Avenue, Suite 5400, Seattle, Washington 98101 3076
(Address of principal executive offices) (ZIP code)
Registrant's telephone number, including area code: (206) 622-9900
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 and (2) has been subject to such filing
requirements for the past 90 days. Yes ___XX____ No __________.
<PAGE>
PART I FINANCIAL INFORMATION
Item 1 Financial Statements
BALANCE SHEETS
URBAN IMPROVEMENT FUND LIMITED 1973
(A Limited Partnership)
<TABLE>
ASSETS
September 30, December 31,
1996 1995
------------- -------------
<S> <C> <C>
Cash $ 292,892 $ 130,115
Accounts receivable 316 316
Investments in and advances to Local
Limited Partnerships accounted for
on the equity method 3,093,776 2,391,556
------------- -------------
$ 3,386,984 $ 2,521,987
============= =============
LIABILITIES AND PARTNERS' CAPITAL
Distribution payable $ 1,950 $ 1,950
Management fee payable 47,122 47,122
------------- -------------
49,072 49,072
Partners' Capital:
General Partner 621 Partnership units
authorized, issued and outstanding 166,896 123,646
Limited Partners 11,811 Partnership
units authorized, issued and outstanding 3,171,016 2,349,269
------------- -------------
3,337,912 2,472,915
------------- -------------
Total Liabilities and Partners' Capital $ 3,386,984 $ 2,521,987
============= =============
</TABLE>
Unaudited. See accompanying notes.
<PAGE>
CAPITALIZATION AND PARTNERS CAPITAL
URBAN IMPROVEMENT FUND LIMITED 1973
(A Limited Partnership)
<TABLE>
September 30, December 31,
1996 1995
------------- -------------
<S> <C> <C>
General Partner Interest -- 621
Partnership units issued
and outstanding $ 621,316 $ 621,316
Limited Partners' Interest -- 11,811
Partnership units issued and
outstanding 11,811,000 11,811,000
------------- -------------
12,432,316 12,432,316
Offering Expenses (1,250,836) (1,250,836)
Distributions to partners (1,448,178) (1,448,178)
Accumulated loss through
December 31, 1995 (7,260,387) (7,260,387)
Income for the nine-month period ended
September 30, 1996 864,997 -0-
------------- -------------
(6,395,390) (7,260,387)
------------- -------------
Partners' Capital at End of Period $ 3,337,912 $ 2,472,915
============= =============
</TABLE>
Unaudited. See accompanying notes.
<PAGE>
STATEMENTS OF INCOME
URBAN IMPROVEMENT FUND LIMITED 1973
(A Limited Partnership)
<TABLE>
For the Three-Month For the Nine-month
Period Ended Period Ended
September 30, September 30,
1996 1995 1996 1995
-------- ------- -------- --------
<S> <C> <C> <C> <C>
Revenues $ 2,702 $ 918 $ 6,118 $ 1,977
Cost and expenses:
Professional fees 1,655 -0- 29,245 26,571
Management fee 15,000 15,000 45,000 45,000
Other 7,016 249 9,185 2,318
Amortization 2,386 2,163 7,158 6,489
-------- ------- -------- --------
26,057 17,412 90,588 80,378
Loss before equity in income
of Local Limited Partnerships (23,355) (16,494) (84,470) (78,401)
Equity in income of Local
Limited Partnerships 386,397 292,027 949,467 626,370
-------- ------- -------- --------
Net income $ 363,042 $ 275,533 $ 864,997 $ 547,969
======== ======= ======== ========
Allocation of net income:
Net income allocated to
General Partner $ 18,152 $ 13,777 $ 43,250 $ 27,398
Net income allocated to
Limited Partners 344,890 261,756 821,747 520,571
-------- ------- -------- --------
$ 363,042 $ 275,533 $ 864,997 $ 547,969
======== ======= ======== ========
Net income allocated to Limited
Partners per Limited Partnership
Unit (11,811 units outstanding
at September 30, 1996 and 1995) $ 29 $ 23 $ 70 $ 46
======== ======= ======== ========
</TABLE>
Unaudited. See accompanying notes.
<PAGE>
STATEMENTS OF CASH FLOWS
URBAN IMPROVEMENT FUND LIMITED 1973
(A Limited Partnership)
<TABLE>
For the Three-Month For the Nine-month
Period Ended Period Ended
September 30, September 30,
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 363,042 $ 275,533 $ 864,997 $ 547,969
Adjustments to reconcile net
income to net cash used by
operating activities:
Amortization 2,386 2,163 7,158 6,489
Equity in income of local
limited partnerships (386,397) (292,027) (949,467) (626,370)
Increase in accounts pay-
able, management fees
payable and payable to
affiliates -0- 15,000 -0- 15,000
-------- -------- -------- --------
Total adjustments (384,011) (274,864) (942,309) (604,881)
-------- -------- -------- --------
Net cash provided
(used) by operating
activities (20,969) 669 (77,312) (56,912)
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions paid -0- (48) -0- (3,248)
-------- -------- -------- --------
Net cash used by
financing activities -0- (48) -0- (3,248)
CASH FLOWS FROM INVESTING ACTIVITIES:
Current period distributions 131,875 136,584 219,130 188,094
Repayments from (advances to)
local limited partnerships (10,000) (1,016) 20,959 763
-------- -------- -------- --------
Net cash provided by
investing activities 121,875 135,568 240,089 188,857
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 100,906 136,189 162,777 128,697
CASH BALANCE AT BEGINNING OF
PERIOD 191,986 63,409 130,115 70,901
-------- -------- -------- --------
CASH BALANCE AT END OF PERIOD $ 292,892 $ 199,598 $ 292,892 $ 199,598
-------- -------- -------- --------
</TABLE>
Unaudited. See accompanying notes.
<PAGE>
NOTES TO SUMMARIZE FINANCIAL INFORMATION
September 30, 1996
URBAN IMPROVEMENT FUND LIMITED 1973
(A Limited Partnership)
Note 1 - Organization
- ---------------------
Urban Improvement Fund Limited 1973 (the Partnership) was formed under
the California Uniform Limited Partnership Act on February 2, 1973, for the
principal purpose of investing in other limited partnerships (Local Limited
Partnerships), which own federal and state-assisted housing projects. The
Partnership issued 11,811 units of limited partnership interest pursuant to a
public offering of such units which terminated in October 1973. The General
Partner, Interfinancial Real Estate Management Company invested $621,316.
The Urban Improvement Fund Limited 1973 prospectus, dated June 27,
1973, specified that the General Partner has approximately five percent
interest in profits, losses and special allocations, and the limited
partners will share the remaining interest in profits, losses and special
allocations in proportion to their respective units of limited partnership
interests.
Note 2 - Method of Accounting
- -----------------------------
Initial rent-up fees paid by the Partnership to the General Partner,
deducted when paid for income tax purposes, are capitalized as acquisition costs
of the Local Limited Partnerships for financial reporting purposes. These costs
and other costs of acquisition are amortized using the straight-line method over
the lives (twenty to forty years) of the Local Limited Partnership Properties.
Amortization is discontinued when the investment is reduced to zero.
Repayment of advances and cash distributions by the Local Limited
Partnerships, after the Partnership investment has been reduced to zero,
are recognized as income by the Partnership in the period received.
Additional advances to Local Limited Partnership, after an investment is
reduced to zero, are recognized as losses in the period paid.
The unaudited interim financial statements furnished in this report
reflect all adjustments which are, in the opinion of management, necessary
to a fair statement of the results for the interim periods presented. All
such adjustments are of a normal recurring nature.
Taxes on Income
- ---------------
No provision for taxes on income has been recorded, since all
taxable income or loss of the Partnership is allocated to the partners for
inclusion in their respective tax returns.
Cash Equivalents
- ----------------
Marketable securities that are highly liquid and have maturities of three
months or less at the date of purchase are classified as cash equivalents.
Note 3 - Management of Urban Improvement Fund Limited 1973
- ----------------------------------------------------------
Under the terms of the Limited Partnership Agreement, the Partnership is
required to pay the General Partner an annual management fee equal to
one-quarter of one percent of invested assets or $133,770 (the fee will not be
more than fifty percent of the Partnership's annual net cash flow as defined,
subject to an annual minimum of $60,000). The Partnership will also pay the
General Partner a liquidation fee for the sale of projects.
The General Partner of the Partnership is a corporation in which
Paul H. Pfleger has a majority interest. Partnership Services, Inc.
(PSI), another corporation in which Paul H. Pfleger is a majority
shareholder, has contracted with the General Partner and the Partnership
to provide certain management and other services in any projects in which
the Partnership has an interest. In addition, as shown in the following
table, PSI has become the General Partner in fourteen of the Local Limited
Partnerships in which the Partnership has investments:
Date PSI Became
Local Limited Partnerships General Partner
-------------------------- ----------------
Antonia Manor April 1975
Glenn Arms Associates April 1975
Hedin House Associates December 1978
Himbola Manor January 1980
Maria Manor April 1975
Marlton Manor Associates April 1975
OGO Associates of Los Arboles August 1976
OGO Associates of Mountclef August 1976
Sheridan Manor IV March 1975
Sheridan Manor X March 1975
The Alexander April 1975
WOGO Associates of Carondelet August 1976
WOGO Associates of Fresno August 1976
W Street Associates December 1977
<PAGE>
Note 4 - Investments in Local Limited Partnerships
- --------------------------------------------------
As of September 30, 1996 and December 31, 1995, the Partnership has
investments in nineteen active real estate Limited Partnerships (Local Limited
Partnerships), which are accounted for on the equity method. The investment
account represents the sum of the capital investment and unamortized costs of
acquisitions less the Partnership's share in losses since the date of
acquisition. The Partnership discontinues recognizing losses and amortizing
cost of acquisition under the equity method when the investment in a particular
Local Limited Partnership is reduced to zero, unless the Partnership
intends to commit additional funds to the Local Limited Partnership.
The investments in Local Limited Partnerships are comprised of:
<TABLE>
September 30, 1996 December 31, 1995
------------------ -----------------
<S> <C> <C>
Capital contributions $6,445,579 $ 6,445,579
Distributions (1,974,817) (1,903,024)
Equity in losses (3,018,659) (3,809,526)
Advances 661,914 671,610
Unamortized costs of acquisitions 979,759 986,917
---------- -----------
$3,093,776 $ 2,391,556
========== ===========
</TABLE>
Item 2 - Management's Discussion and Analysis of
- ------------------------------------------------
Financial Condition and Results of Operations.
----------------------------------------------
The Partnership has followed the practice of investing available
funds not used in the purchase of properties or in operations into short-
term investments. Revenue resulted from such short-term investments. The
Partnership is dependent upon interest earned and the distributions and
repayment of advances from Local Limited Partners for cash flow. The
Partnership advanced funds to selected partnerships in prior years. The
General Partner does not believe these net advances will significantly
affect the operations of the Partnership.
Under the terms of the Limited Partnership Agreement, the Partnership
is required to pay the General Partner an annual management fee equal to
one-quarter of one percent of invested assets or $133,770 (the fee will not
be more than fifty percent of the Partnership's annual net cash flow as
defined, subject to an annual minimum of $60,000). The Partnership
recorded management fee expense of $45,000 for the nine months ended
September 30, 1996 and 1995.
<PAGE>
The components of the Partnership's equity in net income (loss) of the
Local Limited Partnerships for September 30, 1996 and 1995, is summarized
as follows:
<TABLE>
For the Three-Month For the Nine-month
Period Ended Period Ended
September 30, September 30,
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Distributions received from
partnerships with zero
investment
Mystic Valley $ 131,875 $ 136,584 $ 131,875 $ 136,584
Sheridan Manor X -0- -0- -0- 4,182
Edgewood II -0- -0- -0- 15,462
-------- -------- -------- --------
131,875 136,584 131,875 156,228
Repayment from (advances to)
partnerships with zero
investment
Glenn Arms -0- -0- 21,263 -0-
WOGO Fresno -0- -0- (257) -0-
OGO Associates of Mountclef (5,000) (66) 2,272 (4,599)
OGO Associates of Los Arboles (5,000) (524) 4,907 17,001
Sheridan Manor IV -0- (49) -0- (5,112)
Sheridan Manor X -0- (3) (1,754) 118
WOGO Associates of Carondelet -0- (375) (2,405) (6,646)
-------- -------- -------- --------
(10,000) (1,017) 24,026 762
Income from investments with non-
zero investment:
The Alexander 80,670 57,597 242,010 172,791
Antonia Manor 35,908 11,567 107,724 34,701
Hedin Associates 3,195 17,389 9,585 52,167
Maria Manor 52,865 10,799 158,595 32,397
Marlton Manor, Ltd. 79,504 59,108 238,512 177,324
Sheridan IV 12,380 -0- 37,140 -0-
-------- -------- -------- --------
264,522 156,460 793,566 469,380
-------- -------- -------- --------
$ 386,397 $ 292,027 $ 949,467 $ 626,370
======== ======== ======== ========
</TABLE>
<PAGE>
PART II OTHER INFORMATION
Items 1 through 5 not applicable
Item 6 Exhibits and Reports on Form 8-K
a) None
b) The registrant has not filed a report on Form 8-K during the
quarter ending September 30, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
URBAN IMPROVEMENT FUND LIMITED 1973
(Registrant)
By: Interfinancial Real Estate Management
Company, General Partner
Date 11/15/96 Michael Fulbright
-------------------------------------
(Signature)
By: Michael Fulbright, Secretary
Date 11/15/96 John M. Orehek
-------------------------------------
(Signature)
By: John M. Orehek, Senior Vice President
