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 June 30, 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 0-8071
URBAN IMPROVEMENT FUND LIMITED - 1974
(Exact name of registrant as specified in its charter)
California 95-6504946
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 .
<PAGE>
PART I FINANCIAL INFORMATION
Item 1 Financial Statements
BALANCE SHEETS
URBAN IMPROVEMENT FUND LIMITED - 1974
(A Limited Partnership)
ASSETS
<TABLE>
<S> <C> <C>
June 30, December 31,
1997 1996
Cash and cash equivalents $1,441,872 $1,394,990
Investments in and advances to
Local Limited Partnerships
accounted for on the equity method 1,224,328 1,161,695
Total Assets $2,666,200 $2,556,685
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ -0- $ 47
Management fee payable 14,255 28,510
Distribution payable 2,096 2,096
16,351 30,653
Partners' Capital:
General Partner - 115
Partnership units
authorized, issued
and outstanding 26,498 25,260
Limited Partners - 11,404
Partnership units
authorized, issued
and outstanding 2,623,351 2,500,772
2,649,849 2,526,032
Total Liabilities and
Partners' Capital $2,666,200 $2,556,685
</TABLE>
Unaudited. See accompanying notes.
<PAGE>
CAPITALIZATION AND PARTNERS' CAPITAL
URBAN IMPROVEMENT FUND LIMITED - 1974
(A Limited Partnership)
<TABLE>
<S> <C> <C>
June 30, December 31,
1997 1996
General Partner Interest - 115
Partnership units issued and
outstanding $ 115,192 $ 115,192
Limited Partners' Interest -
11,404 Partnership units
issued and outstanding 11,404,000 11,404,000
11,519,192 11,519,192
Offering Expenses (1,315,039) (1,315,039)
Distributions to Partners (1,181,501) (1,181,501)
Accumulated loss through
December 31, 1996 (6,496,620) (6,496,620)
Income for six-month
period ended 123,817 -0-
(6,372,803) (6,496,620)
Partners' Capital at End
of Period $ 2,649,849 $ 2,526,032
</TABLE>
Unaudited. See accompanying notes.
<PAGE>
STATEMENTS OF INCOME
URBAN IMPROVEMENT FUND LIMITED - 1974
(A Limited Partnership)
<TABLE>
<S> <C> <C> <C> <C>
For the Three-Month For the Six-Month
Period Ended Period Ended
June 30, June 30,
1997 1996 1997 1996
Revenues $ 14,784 $ 12,290 $ 28,873 $ 35,196
Cost and expenses:
Professional fees 19,730 9,276 23,307 13,374
Management fee 14,255 14,255 28,510 28,510
Other expenses 1,659 2,674 1,666 2,674
Amortization 833 833 1,666 1,666
36,477 27,038 55,149 46,224
Loss before equity in
income of Local Limited
Partnerships (21,693) (14,748) (26,276) (11,028)
Equity in net income
of Local Limited
Partnerships 71,636 47,836 150,093 101,515
Net Income $ 49,943 $ 33,088 $123,817 $ 90,487
Allocation of net income:
Net income allocated to
General Partner $ 499 $ 331 $ 1,238 $ 905
Net income allocated to
Limited Partners 49,444 32,757 122,579 89,582
$ 49,943 $ 33,088 $123,817 $ 90,487
Net income allocated to
Limited Partners per
Limited Partnerships
Unit (11,404 units
outstanding at June 30,
1997 and 1996) $ 4 $ 3 $ 11 $ 8
</TABLE>
Unaudited. See accompanying notes.
<PAGE>
STATEMENTS OF CASH FLOWS
URBAN IMPROVEMENT FUND LIMITED - 1974
(A Limited Partnership)
<TABLE>
<S> <C> <C> <C> <C>
For the Three-Month For the Six-Month
Period Ended Period Ended
June 30, June 30,
1997 1996 1997 1996
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $ 49,943 $ 33,088 $ 123,817 $ 90,487
Adjustments to reconcile
net income to net cash
used by operating
activities:
Amortization of initial
and rent-up fees 833 833 1,666 1,666
Equity in net income of
local limited partnerships (71,636) (47,836) (150,093) (101,515)
Decrease in trade accounts
payable and accrued
management fees (3,577) (3,577) (14,302) -0-
Total adjustments (74,380) (50,580) (162,729) (99,849)
Net cash used by
operating activities (24,437) (17,492) (38,912) (9,362)
CASH FLOWS FROM
INVESTING ACTIVITIES:
Distributions received 54,100 45,337 54,101 45,337
Net advances paid by
limited partnerships 5,083 6,757 31,693 26,351
Net cash provided by
investing activities 59,183 52,094 85,794 71,688
NET INCREASE
(DECREASE) IN CASH
AND CASH EQUIVALENTS 34,746 34,602 46,882 62,326
CASH BALANCE AT
BEGINNING OF PERIOD 1,407,126 1,330,885 1,394,990 1,303,161
CASH BALANCE AT
END OF PERIOD $1,441,872 $1,365,487 $1,441,872 $1,365,487
</TABLE>
Unaudited. See accompanying notes.
<PAGE>
NOTES TO SUMMARIZE FINANCIAL INFORMATION
June 30, 1997
URBAN IMPROVEMENT FUND LIMITED - 1974
(A Limited Partnership)
Note 1 - Organization - Urban Improvement Fund Limited (the Partnership) was
formed under the California Uniform Limited Partnership Act on January 13,
1974, for the principal purpose of investing in other limited partnerships
(Local Limited Partnerships), which own federal and state-assisted housing
projects. The Partnership issued 11,404 units of limited partnership
interest pursuant to a public offering of such units which terminated on
December 31, 1974. The Partnership also issued 115 units of general
partnership interest to Interfinancial Real Estate Management Company
(the General Partner).
The Urban Improvement Fund Limited 1974 prospectus, dated July 23, 1974,
specified that the General Partner will have at least a one percent interest
in profits, losses and special allocations, and the limited partners will
share the remainder of the interest in profits, losses and special
allocations in proportion to their respective units of limited partnership
interests. It is the General Partners' intention to allocate, for income
tax and financial reporting purposes, the profits, losses and special
allocations in the ratio of ninety-nine percent to the limited partners
and one percent to the General Partner.
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.
<PAGE>
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
djustments are of a normal recurring nature.
Taxes on Income
No provision for taxes on income is required 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.
Management of Urban Improvement Fund Limited - 1974
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 $146,065 (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 $57,020). The Partnership will
also pay the General Partner a liquidation fee for the sale of projects.
<PAGE>
The General Partner of the Partnership is a corporation in which Paul H.
Pfleger owns 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 to 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:
<TABLE>
<S> <C>
Date PSI Became
Local Limited Partnership General Partner
Notre Dame Apartments March 1977
Capitol Hill Associates December 1978
</TABLE>
Note 3 - Investments in Local Limited Partnerships - As of June 30, 1997 and
1996, the Partnership has investments in nine 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 Partnership has an investment in one Limited Partnership that sold its
real estate during 1984. This Partnership (Elk Grove Elderly) holds a note
receivable for a portion of the sales proceeds. The investments in Local
Limited Partnerships are comprised of:
<PAGE>
<TABLE>
<S> <C> <C>
June 30, 1997 December 31, 1996
Capital contributions $ 6,195,872 $ 6,195,872
Distributions (2,837,436) (2,783,334)
Equity in losses (3,192,279) (3,342,372)
Advances 150,816 182,509
Unamortized costs of acquisitions 907,355 909,020
$ 1,224,328 $ 1,161,695
</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.
Interest income 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.
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 $146,065 (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 $57,020). The Partnership recorded
management fee expense of $28,510 for the six months ended June 30, 1997
and 1996.
The components of the Partnership's equity in income of the Local Limited
Partnerships for June 30, 1997 and 1996, is summarized as follows:
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
For the Three-Month For the Six-Month
Period Ended Period Ended
June 30, June 30,
1997 1996 1997 1996
Income from investments
with non- zero investment:
Notre Dame $51,848 $33,808 $103,696 $67,616
Repayment from (advances
to) partnerships with
zero investment:
Capitol Hill -0- -0- 26,609 19,871
Norway House (195) -0- (195) -0-
(195) -0- 26,414 19,871
Distribution received
from partnerships with
zero investment:
Norway House -0- 10,653 -0- 10,653
51st and King Drive 4,766 3,375 4,766 3,375
Elk Grove 15,217 -0- 15,217 -0-
19,983 14,028 19,983 14,028
$ 71,636 $ 47,836 $ 150,093 $ 101,515
</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 June 30, 1997.
<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 - 1974
(Registrant)
By: Interfinancial Real Estate Management
Company, General Partner
Date November 3, 1997
Michael Fulbright
(Signature)
By: Michael Fulbright, Secretary
Date November 3, 1997
John M. Orehek
(Signature)
By: John M. Orehek, Senior Vice President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS YEAR
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997 DEC-31-1996
<PERIOD-END> JUN-30-1997 JUN-30-1997 DEC-31-1996
<CASH> 0 1,441,872 1,394,990
<SECURITIES> 0 0 0
<RECEIVABLES> 0 0 0
<ALLOWANCES> 0 0 0
<INVENTORY> 0 0 0
<CURRENT-ASSETS> 0 2,666,200 2,556,685
<PP&E> 0 0 0
<DEPRECIATION> 0 0 0
<TOTAL-ASSETS> 0 2,666,200 2,556,685
<CURRENT-LIABILITIES> 0 16,351 30,653
<BONDS> 0 0 0
0 0 0
0 0 0
<COMMON> 0 0 0
<OTHER-SE> 0 2,649,849 2,526,032
<TOTAL-LIABILITY-AND-EQUITY> 0 2,666,200 2,556,685
<SALES> 0 0 0
<TOTAL-REVENUES> 14,784 28,873 0
<CGS> 0 0 0
<TOTAL-COSTS> 0 0 0
<OTHER-EXPENSES> 36,477 55,149 0
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 0 0 0
<INCOME-PRETAX> 49,943 123,817 0
<INCOME-TAX> 49,943 123,817 0
<INCOME-CONTINUING> 0 0 0
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 49,943 123,817 0
<EPS-PRIMARY> 0 0 0
<EPS-DILUTED> 0 0 0
</TABLE>
