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 September 30, 2000
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> <C>
September 30, December 31,
2000 1999
Cash and cash equivalents $ 26,005 $1,723,113
Receivable from affiliates 7,838 42,521
Distribution receivable -0- 52,250
Deposits -0- 520,000
Investments in and advances
to Local Limited Partnerships
accounted for on the equity method 6,536,868 1,606,644
Total Assets $6,570,711 $3,944,528
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 5,249 $ -0-
Management fee payable 28,510 14,255
Distribution payable 2,096 2,096
Advance from General Partner 26,757 -0-
62,612 16,351
Partners' Capital:
General Partner - 115 Partnership
units authorized, issued and
outstanding 65,081 39,282
Limited Partners - 11,404
Partnership units
authorized, issued
and outstanding 6,443,018 3,888,895
6,508,099 3,928,177
Total Liabilities and
Partners' Capital $6,570,711 $3,944,528
</TABLE>
Unaudited. See accompanying notes.
<PAGE>
CAPITALIZATION AND PARTNERS' CAPITAL
URBAN IMPROVEMENT FUND LIMITED - 1974
(A Limited Partnership)
<TABLE>
<CAPTION>
<S>
<C> <C> <C>
September 30, December 31,
2000 1999
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) (2,681,501)
Accumulated loss through
December 31, 1999 (3,594,475) (3,594,475)
Income for nine-month period
ended September 30, 2000 2,579,922 -0-
(5,011,093) (7,591,015)
Partners' Capital at End of Period $ 6,508,099 $ 3,928,177
</TABLE>
Unaudited. See accompanying notes.
<PAGE>
STATEMENTS OF INCOME
URBAN IMPROVEMENT FUND LIMITED - 1974
(A Limited Partnership)
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C>
For the Three-Month For the Nine-month
Period Ended Period Ended
September 30, September 30,
2000 1999 2000 1999
Revenues $ 268 $ 27,668 $ 17,366 $ 112,777
Other income -0- 2,000 -0- 2,000
268 29,668 17,366 114,777
Cost and expenses:
Professional fees 10,000 5,000 20,000 15,000
Management fee 14,255 14,255 42,765 42,765
Other expenses 1,085 373 18,218 71,200
Amortization 833 833 2,500 2,499
26,173 20,461 83,483 131,464
Income (Loss) before
equity of Local Limited
Partnerships (25,905) 9,207 (66,117) (16,687)
Equity in net income
of Local Limited
Partnerships 71,039 (4,370) 2,646,039 103,534
Net Income $ 45,134 $ 4,837 $2,579,922 $ 86,847
Allocation of net income:
Net income allocated
to General Partner $ 4,513 $ 48 $ 25,799 $ 868
Net income allocated to
Limited Partners 40,621 4,789 2,554,123 85,979
$ 45,134 $ 4,837 $2,579,922 $ 86,847
Net income allocated
to Limited Partners
per Limited Partner-
ships Unit (11,404
units outstanding
at September 30,
2000 and 1999) $ 4 $ -0- $ 223 $ 8
</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> <C>
For the Three-Month For the Nine-month
Period Ended Period Ended
September 30, September 30,
2000 1999 2000 1999
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net income $ 45,134 $ 4,837 $2,579,922 $ 86,847
Adjustments to
reconcile net
income to net
cash used by
operating activities:
Amortization of
initial and rent-
up fees 833 833 2,500 2,499
Equity in net income
of local limited
partnerships (71,039) 4,370 (2,646,039) (103,534)
(Increase) decrease
in receivable from
affiliate, distribution
and deposit (7,838) -0- 606,934 (15,000)
Increase (decrease)
in trade accounts
payable and accrued
management fees (4,750) 3,200 46,262 (6,255)
Total adjustments (82,794) 8,403 (1,990,343) (122,290)
Net cash used by
operating activities (37,660) 13,240 589,579 (35,443)
CASH FLOWS FROM
INVESTING ACTIVITIES:
Distribution received 36,511 23,470 36,511 30,545
Distributions paid -0- (1,500,000) -0- (1,500,000)
Contributions for
investment -0- -0- (2,347,154) -0-
Net advances repaid by
limited partnerships 26,459 (47,500) 23,956 (37,931)
Net cash provided by
investing activities 62,970 (1,524,030) (2,286,687) (1,507,386)
NET DECREASE IN CASH
AND CASH EQUIVALENTS 25,310 (1,510,790) (1,697,108) (1,542,829)
CASH BALANCE AT
BEGINNING OF
PERIOD 695 3,786,196 1,723,113 3,818,235
CASH BALANCE AT
END OF PERIOD $ 26,005 $2,275,406 $ 26,005 $2,275,406
</TABLE>
Unaudited. See accompanying notes.
<PAGE>
NOTES TO SUMMARIZE FINANCIAL INFORMATION
September 30, 2000
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 adjust-
ments 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 respec-
tive 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, 2000,
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 unamor-
tized 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 Partner-
ship intends to commit additional funds to the Local Limited Partnership.
The investments in Local Limited Partnerships are comprised of:
<PAGE>
<TABLE>
<CAPTION>
<S>
<C> <C> <C>
September 30, 2000 December 31, 1999
Capital contributions $ 8,573,456 $ 6,226,304
Distributions (3,077,053) (3,040,542)
Equity in losses 262,500 (2,669,206)
Advances 167,105 191,064
Unamortized costs of acquisitions 610,860 899,024
$ 6,536,868 $ 1,606,644
</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, 2000 and 1999.
The components of the Partnership's equity in income of the Local Limited
Partnerships for September 30, 2000 and 1999, is summarized as follows:
<PAGE>
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C>
For the Three-Month For the Nine-month
Period Ended Period Ended
September 30, September 30,
2000 1999 2000 1999
Income from investments
with non-zero investment:
Notre Dame $ 37,500 $45,630 $ 112,500 $ 136,890
Income from sale of
real estate:
Monatiquot Village
Associates -0- -0- 2,500,000 -0-
Repayment from
(advances to) part-
nerships with zero
investment:
Capitol Hill 26,459 (50,000) 26,459 (40,430)
Distribution received
from partner-
ships with zero
investment:
51st and King Drive 7,080 -0- 7,080 7,074
$ 71,039 $ (4,370) $2,646,039 $ 103,534
</TABLE>
During February 2000, Monatiquot Village Associates exchanged its real estate
in a tax free exchange. The Partnership's share of the proceeds was $2,500,000
which was recorded as income during the quarter ended March 31, 2000. In
addition, the Partnership contributed an additional $2,347,154 to Monatiquot
Village Associates to fund the purchase of the exchange property. Monatiquot
Village Associates purchased a 460-unit complex in Santa Maria, California.
<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, 2000.
<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 14, 2000 Michael Fulbright
(Signature)
By: Michael Fulbright, Secretary
Date November 14, 2000 John M. Orehek
(Signature)
By: John M. Orehek, Senior Vice President
<PAGE>
