UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10 Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
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 0-7771
URBAN IMPROVEMENT FUND LIMITED 1973 II
(Exact name of registrant as specified in its charter)
California 95-6398192
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 X No .
PART I FINANCIAL INFORMATION
Item 1 Financial Statements
BALANCE SHEETS
URBAN IMPROVEMENT FUND LIMITED 1973 II
(A Limited Partnership)
ASSETS
March 31, December 31,
1997 1996
Cash $ 5,389 $ 4,876
Investments in and advances to Local
Limited Partnerships accounted for
on the equity method -0- -0-
Total Assets $ 5,389 $ 4,876
LIABILITIES AND PARTNERS' (DEFICIT)
Accounts payable $ 4,860 $ 126
Management fee payable 1,050,667 1,033,167
Advance from General Partner 24,243 24,243
1,079,770 1,057,536
Partners' (Deficit):
General Partner 100 Partnership units
authorized, issued and outstanding (530,218) (529,132)
Limited Partners 11,335 partnership
units authorized, issued and
outstanding (544,163) (523,528)
(1,074,381) (1,052,660)
Total Liabilities and Partners' (Deficit) $ 5,389 $ 4,876
Unaudited. See accompanying notes.
CAPITALIZATION AND PARTNERS' (DEFICIT)
URBAN IMPROVEMENT FUND LIMITED 1973 II
(A Limited Partnership)
March 31, December 31,
1997 1996
General Partner Interest 100
Partnership units issued
and outstanding $ 95,000 $ 95,000
Limited Partners' Interest 11,335
Partnership units issued and
outstanding 11,335,000 11,335,000
Total 11,430,000 11,430,000
Offering Expenses (1,237,673) (1,237,673)
Accumulated loss through
December 31, 1996 (11,244,987) (11,244,987)
Loss for three-month period ended
March 31, 1997 (21,721) -0-
(11,266,708) (11,244,987)
Partners' (Deficit) at End of Period $ (1,074,381) $ (1,052,660)
Unaudited. See accompanying notes.
STATEMENTS OF INCOME
URBAN IMPROVEMENT FUND LIMITED 1973 II
(A Limited Partnership)
For the Three-Month
Period Ended
March 31,
1997 1996
Revenues $ 639 $ 1,646
Cost and expenses:
Professional fees 4,860 5,297
Management fee 17,500 17,500
Net loss $ (21,721) $ (21,151)
Allocation of net loss:
Net loss allocated to General Partner $ (1,086) $ (1,058)
Net loss allocated to Limited Partners (20,635) (20,093)
$ (21,721) $ (21,151)
Net loss allocated to Limited Partners per
Limited Partnership Unit (11,335 units
outstanding at March 31, 1997 and 1996) $ (2) $ (2)
Unaudited. See accompanying notes.
STATEMENTS OF CASH FLOWS
URBAN IMPROVEMENT FUND LIMITED 1973 II
(A Limited Partnership)
For the Three-Month
Period Ended
March 31,
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (21,721) $ (21,151)
Adjustments to reconcile net loss
to net cash used by operating
activities:
Increase in accounts payable
and accrued management fees 22,234 22,300
Total adjustments 22,234 22,300
Net cash provided by
operating activities 513 1,149
NET INCREASE IN CASH AND CASH EQUIVALENTS 513 1,149
CASH BALANCE AT BEGINNING OF PERIOD 4,876 34,577
CASH BALANCE AT END OF PERIOD $ 5,389 $ 35,726
Unaudited. See accompanying notes.
NOTES TO SUMMARIZE FINANCIAL INFORMATION
March 31, 1997
URBAN IMPROVEMENT FUND LIMITED 1973 II
(A Limited Partnership)
Note 1 Organization Urban Improvement Fund Limited 1973 II (the
Partnership) was formed under the California Uniform Limited Partnership Act on
July 1, 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 11,335 units of limited partnership
interest pursuant to a public offering of such units which terminated on
December 31, 1973. The Partnership also issued 100 units of general
partnership interest to Interfinancial Real Estate Management Company (the
General Partner).
The Urban Improvement Fund Limited 1973 II prospectus, dated October 24,
1973, specified that the General Partner has five percent interest in profits,
losses and special allocations, and the limited partners will share the
remaining ninety-five percent 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 (fifteen 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 II 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 $136,548 (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 $70,000). This fee was not payable during the first six years unless annual
tax deductions plus cash distributions aggregated $550 per unit. The required
level of tax deductions was not achieved in these years, and accordingly, the
fee was not paid for those years. However, fees of $350,000 have been recorded
as a liability to the General Partner. Management fees payable totaling
$700,667 for subsequent years have been accrued to the General Partner because
cash flow was not sufficient to pay the fees. 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 two of
the Local Limited Partnerships in which the Partnership has investments:
Date PSI Became
Local Limited Partnerships General Partner
Community Circle 1975
808 Memorial Drive 1978
Note 4 Investments in Local Limited Partnerships As of March 31, 1997 and
1996, the Partnership has investments in ten active real estate Limited
Partnerships (Local Limited Partnership), which are accounted for on the equity
method. The investment account represents the sum of the capital investments
and unamortized costs of acquisitions less the Partnership's share in losses
since the date of acquisition. The Partnership discontinues recognizing losses
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 Partnerships.
The investments in Local Limited Partnerships are comprised of:
March 31, 1997 December 31, 1996
Capital contributions $7,069,998 $7,069,998
Distributions (921,532) (921,532)
Equity in losses (8,211,202) (8,211,202)
Advances 974,875 974,875
Unamortized costs of acquisitions 1,087,861 1,087,861
$ -0- $ -0-
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 has advanced funds to selected
partnerships. 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 $136,548 (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 $70,000). The Partnership recorded management fee
expense of $17,500 for the three-month period ended March 31, 1997 and 1996.
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 March 31, 1997.
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 II
(Registrant)
By: Interfinancial Real Estate Management
Company, General Partner
Date 08-26-97
(Signature)
By: Michael Fulbright, Secretary
(Signature)
By: John M. Orehek, Senior Vice President
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<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1996
<PERIOD-END> MAR-31-1997 DEC-31-1996
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0 0
0 0
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<CGS> 0 0
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<INCOME-PRETAX> (21,721) (21,151)
<INCOME-TAX> (21,721) (21,151)
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<EXTRAORDINARY> 0 0
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<NET-INCOME> (21,721) (21,151)
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