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, 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
<TABLE>
<S> <C> <C>
September 30, December 31,
1997 1996
Cash $ 23,946 $ 59,063
Accounts Receivable 4,932 -0-
Investments in and advances to Local
Limited Partnerships accounted
for on the equity method -0- -0-
Total Assets $ 28,878 $ 59,063
LIABILITIES AND PARTNERS' (DEFICIT)
Accounts payable $ -0- $ 4,000
Management fee payable 780,833 780,833
Payable to affiliates 558,586 558,586
Distribution payable 641 641
Total Liabilities 1,340,060 1,344,060
Partners' (Deficit):
General Partner - 5 Partnership
units authorized, issued and
outstanding (1,135) (1,103)
Limited Partners - 5,830 Partnership
units authorized, issued and
outstanding (1,310,047) (1,283,894)
(1,311,182) (1,284,997)
Total Liabilities and Partners'
(Deficit) $ 28,878 $ 59,063
</TABLE>
Unaudited. See accompanying notes.
<PAGE>
CAPITALIZATION AND PARTNERS' (DEFICIT)
URBAN IMPROVEMENT FUND LIMITED - 1972
(A Limited Partnership)
<TABLE>
<S>
<C> <C>
September 30, 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 nine-month period
ended September 30, 1997 (26,185) -0-
(6,233,476) (6,207,291)
Partners' (deficit) at end
of period $(1,311,182) $(1,284,997)
</TABLE>
Unaudited. See accompanying notesSTATEMENTS OF INCOME
<PAGE>
URBAN IMPROVEMENT FUND LIMITED 1972
(A Limited Partnership)
<TABLE>
<S>
<C> <C>
For the Three-Month For the Nine-Month
Period Ended Period Ended
September 30, September 30,
1997 1996 1997 1996
Revenues $ -0- $ 519 $ 424 $ 1,122
Cost and expenses:
Professional fees 10,482 3,804 17,632 17,954
Management fee 10,000 10,000 30,000 30,000
Other expenses 5,156 -0- 24,326 -0-
25,638 13,804 71,958 47,954
Loss before equity in
income (loss)
of Local Limited
Partnerships (25,638) (13,285) (71,534) (46,832)
Equity in income (loss)
of Local
Limited Partnerships 34,908 -0- 45,349 74,478
Net income (loss) $ 9,270 $ (13,285) $ (26,185) $ 27,646
Allocation of Net Loss:
Net income (loss)
allocated to General
Partner $ 7 $ (11) $ (23) $ 24
Net income (loss)
allocated to Limited
Partners 9,263 (13,274) (26,162) 27,622
$ 9,270 $ (13,285) $ (26,185) $ 27,646
Net loss allocated
to Limited Partners
per Limited Partner-
ship Unit (5,830 units
outstanding at
September 30,
1997 and 1996) $ 2 $ (2) $ (4) $ 5
</TABLE>
Unaudited. See accompanying notes.STATEMENTS OF CASH FLOWS
<PAGE>
URBAN IMPROVEMENT FUND LIMITED - 1972
(A Limited Partnership)
<TABLE>
<S>
<C> <C>
For the Three-Month For the Nine-Month
Period Ended Period Ended
September 30, September 30,
1997 1996 1997 1996
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net income (loss) $ 9,270 $ (13,285) $(26,185) $27,646
Adjustments to recon-
cile net income (loss)
to net cash used by
operating activities:
Equity in income of
local limited partner-
ships (34,908) -0- (45,349) (74,478)
Increase (decrease)
in accounts payable,
management fees pay-
able and payable to
affiliates (4,932) -0- (8,932) 10,000
Total adjustments (39,840) -0- (54,281) (64,478)
Net cash used by
operating activities (30,570) (13,285) (80,466) (36,832)
CASH FLOWS FROM
INVESTING ACTIVITIES:
Distributions 30,148 -0- 30,148 53,955
Net advances paid by
local limited partner-
ships 4,760 -0- 15,201 20,523
Net cash provided
by investing
activities 34,908 -0- 45,349 74,478
NET INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS 4,338 (13,285) (35,117) 37,646
CASH BALANCE AT
BEGINNING OF PERIOD 19,608 51,574 59,063 643
CASH BALANCE AT END
OF PERIOD $ 23,946 $ 38,289 $ 23,946 $ 38,289
</TABLE>
Unaudited. See accompanying notes.
<PAGE>
NOTES TO SUMMARIZE FINANCIAL INFORMATION
September 30, 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 partner-
ships (Local Limited Partnerships), which own federal and state-assisted
housing projects. The Partnership issued 5,830 units of limited partner-
ship 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 Partner-
ship 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 distributins by 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.
<PAGE>
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 $540,833
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.
<PAGE>
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.
<TABLE>
<S>
<C> <C>
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
</TABLE>
(1) This property was sold through a resyndication during August, 1984.
Note 4 - Investments in Local Limited Partnerships - As of September 30,
1997 and 1996, the Partnership has investments in five active real estate
Limited Partnership (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 additinal funds
to the local Limited Partnership.
<PAGE>
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:
<TABLE>
<S>
<C> <C>
September 30, 1997 December 31, 1996
Capital contributions $ 1,954,289 $ 1,954,289
Distributions (516,980) (486,833)
Equity in loss (1,815,290) (1,860,639)
Advances (11,628) 3,574
Unamortized costs of acquisitions 389,609 389,609
$ -0- $ -0-
</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. 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 $30,000 for the nine-month
period ended September 30, 1997 and 1996.
<PAGE>
The components of the Partnership's equity in net income (loss) of the
local limited partnership for September 30, 1997 and 1996 is summarized
as follows:
<TABLE>
<S>
<C> <C>
For the Three-Month For the Nine-Month
Period Ended Period Ended
September 30, September 30,
1997 1996 1997 1996
Distributions received
from Partnership with
zero investment:
Lakewood Apartments $ -0- $ -0- $ 8,054 $ 8,054
Angeles II -0- -0- 22,094 45,901
-0- -0- 30,148 53,955
Repayment from (advances
to) Partnerships with
zero investment:
Angeles I 34,908 -0- 15,201 20,523
34,908 -0- 15,201 20,523
$ 34,908 $ -0- $ 45,349 $ 74,478
</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, 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 1972
(Registrant)
By: Interfinancial Real Estate Management
Company, General Partner
Date December 9, 1997
Michael Fulbright
(Signature)
By: Michael Fulbright, Secretary
Date December 9. 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 9-MOS YEAR
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997 DEC-31-1996
<PERIOD-END> SEP-30-1997 SEP-30-1997 DEC-31-1996
<CASH> 0 23,946 59,063
<SECURITIES> 0 0 0
<RECEIVABLES> 0 4,932 0
<ALLOWANCES> 0 0 0
<INVENTORY> 0 0 0
<CURRENT-ASSETS> 0 28,878 59,063
<PP&E> 0 0 0
<DEPRECIATION> 0 0 0
<TOTAL-ASSETS> 0 28,878 59,063
<CURRENT-LIABILITIES> 0 0 4,641
<BONDS> 0 0 0
0 0 0
0 0 0
<COMMON> 0 0 0
<OTHER-SE> 0 (1,311,182) (1,284,997)
<TOTAL-LIABILITY-AND-EQUITY> 0 28,878 59,063
<SALES> 0 0 0
<TOTAL-REVENUES> 0 424 0
<CGS> 0 0 0
<TOTAL-COSTS> 0 0 0
<OTHER-EXPENSES> 25,638 71,958 0
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 0 0 0
<INCOME-PRETAX> 9,270 (26,185) 0
<INCOME-TAX> 9,270 (26,185) 0
<INCOME-CONTINUING> 0 0 0
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 9,270 (26,185) 0
<EPS-PRIMARY> 0 0 0
<EPS-DILUTED> 0 0 0
</TABLE>
