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 0-8071
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.
PART I FINANCIAL INFORMATION
Item 1 Financial Statements
BALANCE SHEETS
URBAN IMPROVEMENT FUND LIMITED 1974
(A Limited Partnership)
ASSETS
March 31, December 31,
1997 1996
Cash and cash equivalents $1,407,126 $1,394,990
Investments in and advances to
Local Limited Partnerships
accounted for on the equity method 1,212,708 1,161,695
Total Assets $2,619,834 $2,556,685
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 3,577 $ 47
Management fee payable 14,255 28,510
Distribution payable 2,096 2,096
19,928 30,653
Partners' Capital:
General Partner 115 Partnership units
authorized, issued and outstanding 25,999 25,260
Limited Partners 11,404 Partnership units
authorized, issued and outstanding 2,573,907 2,500,772
2,599,906 2,526,032
Total Liabilities and Partners' Capital $2,619,834 $2,556,685
Unaudited. See accompanying notes.
CAPITALIZATION AND PARTNERS' CAPITAL
URBAN IMPROVEMENT FUND LIMITED 1974
(A Limited Partnership)
March 31, December 31,
1997 1996
General Partner Interest 115 Partner-
ship 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 three month period ended
March 31, 1997 73,874 -0-
(6,422,746) (6,496,620)
Partners' Capital at End of Period $ 2,599,906 $ 2,526,032
Unaudited. See accompanying notes.
STATEMENTS OF INCOME
URBAN IMPROVEMENT FUND LIMITED 1974
(A Limited Partnership)
For the Three-Month
Period Ended
March 31,
1997 1996
Revenues $ 14,089 $ 22,906
Cost and expenses:
Professional fees 3,577 4,098
Management fee 14,255 14,255
Amortization 833 833
Other expenses 7 -0-
18,672 19,186
Income (loss) before equity in income
of Local Limited Partnerships (4,583) 3,720
Equity in net income of Local Limited
Partnerships 78,457 53,679
Net Income $ 73,874 $ 57,399
Allocation of net income:
Net income allocated to General Partner $ 739 $ 574
Net income allocated to Limited Partners 73,135 56,825
$ 73,874 $ 57,399
Net income allocated to Limited Partners per
Limited Partnerships Unit (11,404 units
outstanding at March 31, 1997 and 1996) $ 6 $ 5
Unaudited. See accompanying notes.
STATEMENTS OF CASH FLOWS
URBAN IMPROVEMENT FUND LIMITED 1974
(A Limited Partnership)
For the Three Month
Period Ended
March 31,
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 73,874 $ 57,399
Adjustments to reconcile net income to net
cash used by operating activities:
Amortization of initial and rent-up fees 833 833
Equity in net income of local
limited partnerships (78,457) (53,679)
Increase (decrease) in trade accounts
payable and accrued management fees (10,723) 3,577
Total adjustments (88,347) (49,269)
Net cash used by operating activities (14,473) 8,130
CASH FLOWS FROM INVESTING ACTIVITIES:
Net advances paid by limited partnerships 26,609 19,594
Net cash used by investing activities 26,690 19,594
NET INCREASE IN CASH AND CASH EQUIVALENTS 12,136 27,724
CASH BALANCE AT BEGINNING OF PERIOD 1,394,990 1,303,161
CASH BALANCE AT END OF PERIOD $1,407,126 $1,330,885
Unaudited. See accompanying notes.
NOTES TO SUMMARIZE FINANCIAL INFORMATION
March 31, 1996
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.
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 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.
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:
Date PSI Became
Local Limited Partnership General Partner
Notre Dame Apartments March 1977
Capitol Hill Associates December 1978
Note 3 Investments in Local Limited Partnerships As of March 31, 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:
March 31, 1997 December 31, 1996
Capital contributions $ 7,280,364 $ 7,280,364
Distributions (4,332,806) (4,332,804)
Equity in losses (2,798,939) (2,877,396)
Advances 155,899 182,509
Unamortized costs of acquisitions 908,190 909,022
$ 1,212,708 $ 1,161,695
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 $14,255 for the three months ended March 31, 1997 and 1996.
The components of the Partnership's equity in income of the Local Limited
Partnerships for March 31, 1997 and 1996, is summarized as follows:
For the Three Month
Period Ended
March 31,
1997 1996
Income from investments with non-zero investment:
Notre Dame $ 51,848 $ 33,808
Repayment from partnerships with zero investment:
Capitol Hill 26,609 19,871
$ 78,457 $ 53,679
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 of the undersigned, thereunto duly authorized.
URBAN IMPROVEMENT FUND LIMITED 1974
(Registrant)
By: Interfinancial Real Estate Management
Company, General Partner
Date 08-26-97
(Signature)
By: Michael Fulbright, Secretary
Date 08-26-97
(Signature)
By: John M. Orehek, Senior Vice President
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<PERIOD-TYPE> 3-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1996
<PERIOD-END> MAR-31-1997 DEC-31-1996
<CASH> 1,407,126 1,394,990
<SECURITIES> 0 0
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<ALLOWANCES> 0 0
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0 0
0 0
<COMMON> 0 0
<OTHER-SE> 2,599,906 2,526,032
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<INCOME-PRETAX> 73,874 57,399
<INCOME-TAX> 73,874 57,399
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