UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
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>
<CAPTION>
<S> <C> <C>
September 30, December 31,
1999 1998
Cash and cash equivalents $2,275,406 $3,818,235
Receivable from affiliates 15,000 -0-
Investments in and advances to
Local Limited Partnerships
accounted for on the equity method 1,599,419 1,490,998
Total Assets $3,889,825 $5,309,233
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 13,200 $ 5,200
Management fee payable -0- 14,255
Distribution payable 2,096 2,096
15,296 21,551
Partners' Capital:
General Partner - 115 Partnership
units authorized, issued and
outstanding 38,757 52,877
Limited Partners - 11,404 Partnership
units authorized, issued and
outstanding 3,835,772 5,234,805
3,874,529 5,287,682
Total Liabilities and Partners'
Capital $3,889,825 $5,309,233
</TABLE>
Unaudited. See accompanying notes.
<PAGE>
CAPITALIZATION AND PARTNERS' CAPITAL
URBAN IMPROVEMENT FUND LIMITED - 1974
(A Limited Partnership)
<TABLE>
<CAPTION>
<S> <C> <C>
September 30, December 31,
1999 1998
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 (2,681,501) (1,181,501)
Accumulated loss through
December 31, 1998 (3,734,970) (3,734,970)
Income for nine-month period
ended September 30, 1999 86,847 -0-
(3,648,123) (3,734,970)
Partners' Capital at End of
Period $ 3,874,529 $ 5,287,682
</TABLE>
Unaudited. See accompanying notes.
<PAGE>
STATEMENTS OF INCOME
URBAN IMPROVEMENT FUND LIMITED - 1974
(A Limited Partnership)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
For the Three-Month For the Nine-month
Period Ended Period Ended
September 30, September 30,
1999 1998 1999 1998
Revenues $ 27,668 $ 50,224 $112,777 $ 111,786
Other income 2,000 -0- 2,000 -0-
29,668 50,224 114,777 111,786
Cost and expenses:
Taxes and licenses -0- 2,075 -0- 34,634
Professional fees 5,000 6,651 15,000 13,502
Management fee 14,255 14,255 42,765 42,765
Other expenses 373 914 71,200 1,225
Amortization 833 833 2,499 2,499
20,461 24,728 131,464 94,625
Income (Loss) before
equity of Local
Limited Partnerships 9,207 25,496 (16,687) 17,161
Equity in net income
of Local Limited
Partnerships (4,370) 90,150 103,534 2,464,058
Net Income $ 4,837 $ 115,646 $ 86,847 $2,481,219
Allocation of net income:
Net income allocated
to General Partner $ 48 $ 1,156 $ 868 $ 24,812
Net income allocated
to Limited Partners 4,789 114,490 85,979 2,456,407
$ 4,837 $ 115,646 $ 86,847 $2,481,219
Net income allocated
to Limited Partners
per Limited Partner-
ships Unit (11,404
units outstanding
at September 30,
1999 and 1998) $ -0- $ 10 $ 8 $ 215
</TABLE>
Unaudited. See accompanying notes.
<PAGE>
STATEMENTS OF CASH FLOWS
URBAN IMPROVEMENT FUND LIMITED - 1974
(A Limited Partnership)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
For the Three-Month For the Nine-month
Period Ended Period Ended
September 30, September 30,
1999 1998 1999 1998
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net income $ 4,837 $115,646 $ 86,847 $2,481,219
Adjustments to reconcile net
income to net cash used by
operating activities:
Amortization of initial
and rent-up fees 833 833 2,499 2,499
Equity in net income of
local limited partner-
ships 4,370 (90,150) (103,534) (2,464,058)
Increase in receivable
from affiliate -0- -0- (15,000) -0-
Increase (decrease) in
trade accounts payable
and accrued management
fees 3,200 (6,350) (6,255) (28,509)
Total adjustments 8,403 (95,667) (122,290) (2,490,068)
Net cash used by
operating activities 13,240 19,979 (35,443) (8,849)
CASH FLOWS FROM
INVESTING ACTIVITIES:
Distributions received 23,470 33,250 30,545 2,330,613
Distributions paid (1,500,000) -0- (1,500,000) -0-
Net advances repaid by
limited partnerships (47,500) (4,500) (37,931) (4,500)
Net cash provided by
investing activities (1,524,030) 28,750 (1,507,386) 2,326,113
NET INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS (1,510,790) 48,729 (1,542,829) 2,317,264
CASH BALANCE AT
BEGINNING OF
PERIOD 3,786,196 3,722,991 3,818,235 1,454,456
CASH BALANCE AT
END OF PERIOD $ 2,275,406 $3,771,720 $ 2,275,406 $3,771,720
</TABLE>
Unaudited. See accompanying notes.
<PAGE>
NOTES TO SUMMARIZE FINANCIAL INFORMATION
September 30, 1999
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 discon-
tinued 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
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.
<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>
<CAPTION>
<S> <C> <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 September 30, 1999
and 1998, 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 note receivable was paid
during the quarter ended March 31, 1998. The Partnership received $2,253,035
as payment in full of the note receivable. The investments in Local Limited
Partnerships are comprised of:
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
September 30, 1999 December 31, 1998
Capital contributions $ 6,226,304 $ 6,226,304
Distributions (2,988,293) (2,957,749)
Equity in losses (2,729,514) (2,833,046)
Advances 191,064 153,134
Unamortized costs
of acquisitions 899,858 902,355
$ 1,599,419 $ 1,490,998
</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 $42,765 for the nine months ended September 30, 1999 and 1998.
The components of the Partnership's equity in income of the Local Limited
Partnerships for September 30, 1999 and 1998, is summarized as follows:
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
For the Three-Month For the Nine-month
Period Ended Period Ended
September 30, September 30,
1999 1998 1999 1998
Income from investments
with non-zero investment:
Notre Dame $ 45,630 $ 56,900 $ 136,890 $ 170,700
Repayment from (advances
to) partnerships with
zero investment:
Capitol Hill (50,000) -0- (40,430) -0-
(50,000) -0- (40,430) -0-
Distribution received
from partnerships with
zero investment:
51st and King Drive -0- -0- 7,074 7,073
Elk Grove -0- -0- -0- 2,253,035
Southern Boulevard -0- 33,250 -0- 33,250
-0- 33,250 7,074 2,293,358
$ (4,370) $ 90,150 $ 103,534 $2,464,058
</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, 1999.
<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 December 7, 1999 Michael Fulbright
(Signature)
By: Michael Fulbright, Secretary
Date December 7, 1999 John M. Orehek
(Signature)
By: John M. Orehek, Senior Vice President
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS YEAR
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1999 DEC-31-1998
<PERIOD-END> SEP-30-1999 SEP-30-1999 DEC-31-1998
<CASH> 0 2,275,406 3,818,235
<SECURITIES> 0 0 0
<RECEIVABLES> 0 15,000 0
<ALLOWANCES> 0 0 0
<INVENTORY> 0 0 0
<CURRENT-ASSETS> 0 1,599,419 1,490,419
<PP&E> 0 0 0
<DEPRECIATION> 0 0 0
<TOTAL-ASSETS> 0 3,889,825 5,309,233
<CURRENT-LIABILITIES> 0 15,296 21,551
<BONDS> 0 0 0
0 0 0
0 0 0
<COMMON> 0 0 0
<OTHER-SE> 0 3,874,529 5,287,682
<TOTAL-LIABILITY-AND-EQUITY> 0 3,889,825 5,309,233
<SALES> 0 0 0
<TOTAL-REVENUES> 29,668 218,311 0
<CGS> 0 0 0
<TOTAL-COSTS> 0 0 0
<OTHER-EXPENSES> 24,831 131,464 0
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 0 0 0
<INCOME-PRETAX> 4,837 86,847 0
<INCOME-TAX> 0 0 0
<INCOME-CONTINUING> 0 0 0
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 4,837 86,847 0
<EPS-BASIC> 0 0 0
<EPS-DILUTED> 0 0 0
</TABLE>
