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 2-43162
URBAN IMPROVEMENT FUND LIMITED 1972
(Exact name of registrant as specified in its charter)
California 95-6448384
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 1972
(A Limited Partnership)
ASSETS
March 31, December 31,
1997 1996
Cash $ 25,677 $ 59,063
Investments in and advances to
Local Limited Partnerships
accounted for on the equity
method -0- -0-
Total Assets $ 25,677 $ 59,063
LIABILITIES AND PARTNERS' (DEFICIT)
Accounts payable $ 3,745 $ 4,000
Management fee payable 770,833 780,833
Payable to affiliates 558,586 558,586
Distribution payable 641 641
Total Liabilities 1,333,805 1,344,060
Partners' (Deficit):
General Partner 5 Partnership units
authorized, issued and outstanding (1,121) (1,103)
Limited Partners 5,830 Partnership units
authorized, issued and outstanding (1,307,007) (1,283,894)
(1,308,128) (1,284,997)
Total Liabilities and
Partners' (Deficit) $ 25,677 $ 59,063
Unaudited. See accompanying notes.
CAPITALIZATION AND PARTNERS' (DEFICIT)
URBAN IMPROVEMENT FUND LIMITED 1972
(A Limited Partnership)
March 31, December 31,
1997 1996
General Partner Interest
5 Partnership units issued
and outstanding $ 5,000 $ 5,000
Limited Partners' Interest 5,830
Partnership units issued and
outstanding 5,830,000 5,830,000
Total 5,835,000 5,835,000
Offering Expenses (641,492) (641,492)
Distributions to partners (271,214) (271,214)
Accumulated loss through
December 31, 1996 (6,207,291) (6,207,291)
Loss for the three-month period
ended March 31, 1997 (23,131) -0-
(6,230,422) (6,207,291)
Partners' (deficit) at end of period $(1,308,128) $(1,284,997)
Unaudited. See accompanying notes
STATEMENTS OF INCOME
URBAN IMPROVEMENT FUND LIMITED 1972
(A Limited Partnership)
For the Three-Month
Period Ended
March 31,
1997 1996
$ 331 $ -0-
Cost and expenses:
Professional fees 3,745 4,242
Management fee 10,000 10,000
Other expenses 9,717 -0-
Loss before equity in loss of
Local Limited Partnerships (23,131) (14,242)
Equity in loss of Local Limited
Partnerships -0- -0-
Net loss $ (23,131) $ (14,242)
Allocation of Net Loss:
Net loss allocated to
General Partner $ (20) $ (12)
Net loss allocated to
Limited Partners (23,111) (14,230)
$ (23,131) $ (14,242)
Net loss allocated to Limited Partners per
Limited Partnership Unit
(5,830 units outstanding at
March 31, 1997 and 1996) $ (4) $ (2)
Unaudited. See accompanying notes.
STATEMENTS OF CASH FLOWS
URBAN IMPROVEMENT FUND LIMITED 1972
(A Limited Partnership)
For the Three-Month
Period Ended
March 31,
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (23,131) $ (14,242)
Adjustments to reconcile net loss to net
cash used by operating activities:
Increase in accounts payable, management fees
payable and payable to affiliates (10,255) 13,745
Total adjustments (10,255) 13,745
Net cash provided (used) by operating
activities (33,386) (497)
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (33,386) (497)
CASH BALANCE AT BEGINNING OF PERIOD 59,063 643
CASH BALANCE AT END OF PERIOD $ 25,677 $ 146
Unaudited. See accompanying notes.
NOTES TO SUMMARIZE FINANCIAL INFORMATION
March 31, 1997
URBAN IMPROVEMENT FUND LIMITED 1972
(A Limited Partnership)
Note 1 Organization Urban Improvement Fund Limited (the Partnership) was
formed under the California Uniform Limited Partnership Act on February 22,
1972, for the principal purpose of investing in other limited partnerships
(Local Limited Partnerships), which own federal and state-assisted housing
projects. The Partnership issued 5,830 units of limited partnership interest
pursuant to a public offering of such units which terminated on December 31,
1972. The Partnership also issued five units of general partnership interest
to Interfinancial Real Estate Management Company (the General Partner). For
income tax and financial reporting purposes, profits and losses are allocated
.08659 percent to the General Partner and 99.91341 percent to the Limited
Partners.
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.
Note 3 Management of Urban Improvement Fund Limited
Under the terms of the Limited Partnership Agreement (as amended), the
Partnership is required to pay the General Partner an annual management fee
equal to three tenths of one percent of invested assets or $64,325 (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 $40,000). This fee was not
payable during the first six years unless annual tax deductions plus cash
distributions aggregated $550 per unit on a cumulative basis. The required
level of tax deductions was not achieved; and, accordingly, the fee was not
paid for those years. However, fees of $240,000 were recorded as a liability
to the General Partner. Management fees totaling $530,833 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 three of the Local
Limited Partnerships in which the Partnership has investments.
Date PSI Became
Local Limited Partnership General Partner
(1) Alms Hill Apartments Limited December 1977
Angeles Apartments Associates, No. 1 December 1975
Angeles Apartments Associates, No. 2 December 1975
(1) This property was sold through a resyndication during August, 1984.
Note 4 Investments in Local Limited Partnerships As of March 31, 1997 and
1996, the Partnership has investments in five 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,
advances and unamortized costs of acquisition less the Partnership's share of
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 (Alms Hill
Apartments, Ltd.) holds a note receivable for a portion of the sales proceeds.
The investment in Local Limited Partnerships is comprised of:
March 31, 1997 December 31, 1996
Capital contributions $ 1,954,289 $ 1,954,289
Distributions (486,833) (486,833)
Equity in loss (1,860,639) (1,860,639)
Advances 3,574 3,574
Unamortized costs of acquisitions 389,609 389,609
$ -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.
Revenues 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 (as amended), the
Partnership is required to pay the General Partner an annual management fee
equal to three tenths of one percent of invested assets or $64,325 (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 $40,000). The Partnership recorded
management fee expense of $10,000 for the three-month period ended March 31,
1997 and 1996.
The Partnership has not recognized income or losses of the Local Limited
Partnerships for the period ending March 31, 1997 and 1996 because all
investments have been reduced to zero and no distributions were received and no
advances were repaid during this period.
<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 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 1972
(Registrant)
Date: 08-25-97
By: Interfinancial Real Estate Management Company, General Partner
Date: 08-25-97
By: Michael Fulbright, Secretary
Date: 08-25-97
By: John M. Orehek, Senior Vice President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS YEAR
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1996
<PERIOD-END> MAR-31-1997 DEC-31-1996
<CASH> 25,677 59,063
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 25,677 59,063
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 25,677 59,063
<CURRENT-LIABILITIES> 4,386 4,641
<BONDS> 0 0
0 0
0 0
<COMMON> 0 0
<OTHER-SE> (1,308,128) (1,284,997)
<TOTAL-LIABILITY-AND-EQUITY> 25,677 59,063
<SALES> 0 0
<TOTAL-REVENUES> 331 0
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 23,462 14,242
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (23,131) (14,242)
<INCOME-TAX> (23,131) (14,242)
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (23,131) (14,242)
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
