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 June 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 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)
<TABLE>
<CAPTION>
ASSETS
June 30, December 31,
1999 1998
<S> <C> <C>
Cash $ 567 $ 1,176
Due from affiliates -0- 15,335
Distribution receivable -0- 32,335
Investments in and
advances to Local
Limited Partnerships
accounted for on the
equity method -0- -0-
Total Assets $ 567 $ 48,846
LIABILITIES AND PARTNERS' (DEFICIT)
Accounts payable $ 10,000 $ 18,200
Management fee payable 820,833 800,833
Payable to affiliates 545,238 558,586
Distribution payable 641 641
Total Liabilities 1,376,712 1,378,260
Partners' (Deficit):
General Partner -
5 Partnership units
authorized, issued
and outstanding (1,182) (1,142)
Limited Partners -
5,830 Partnership units
authorized, issued and
outstanding (1,374,963) (1,328,272)
(1,376,145) (1,329,414)
Total Liabilities and Partners'
(Deficit) $ 567 $ 48,846
</TABLE>
Unaudited. See accompanying notes.
<PAGE>
CAPITALIZATION AND PARTNERS' (DEFICIT)
URBAN IMPROVEMENT FUND LIMITED - 1972
(A Limited Partnership)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
<S> <C> <C>
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, 1998 (6,251,708) (6,251,708)
Loss for the six-month
period ended June 30, 1999 (46,731) -0-
(6,298,439) (6,251,708)
Partners' (deficit) at
end of period $(1,376,145) $(1,329,414)
</TABLE>
Unaudited. See accompanying notes
<PAGE>
STATEMENTS OF INCOME
URBAN IMPROVEMENT FUND LIMITED - 1972
(A Limited Partnership)
<TABLE>
<CAPTION>
For the Three-Month For the Six-month
Period Ended Period Ended
June 30, June 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Revenues $ 274 $ -0- $ 417 $ -0-
Cost and expenses:
Professional fees 5,000 3,175 10,000 6,350
Management fee 10,000 10,000 20,000 20,000
Other expenses 136 817 136 817
15,136 13,992 30,136 27,167
Loss before equity
in loss of Local
Limited Partnerships (14,862) (13,992) (29,719) (27,167)
Equity in loss of
Local Limited
Partnerships (17,012) 15,984 (17,012) 15,984
Net income (loss) $ (31,874) $ 1,992 $ (46,731) $ (11,183)
Allocation of Net Loss:
Net income (loss)
allocated to
General Partner $ (28) $ 1 $ (40) $ (10)
Net income (loss)
allocated to Limited
Partners (31,846) 1,991 (46,691) (11,173)
$ (31,874) $ 1,992 $ (46,731) $ (11,183)
Net loss allocated
to Limited Partners
per Limited Partner-
ship Unit (5,830 units
outstanding at June 30,
1999 and 1998) $ (6) $ -0- $ (8) $ (2)
</TABLE>
Unaudited. See accompanying notes.
<PAGE>
STATEMENTS OF CASH FLOWS
URBAN IMPROVEMENT FUND LIMITED - 1972
(A Limited Partnership)
<TABLE>
<CAPTION>
For the Three-Month For the Six-month
Period Ended Period Ended
June 30, June 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net income (loss) $ (31,874) $1,992 $(46,731) $(11,183)
Adjustments to
reconcile net
income (loss) to
net cash used by
operating activities:
Equity in income
of local limited
partnerships 1,702 (15,983) 17,012 (15,984)
Decrease in
distribution
receivable -0- -0- 32,335 -0-
Decrease (increase)
in receivable from
affiliates -0- 9,123 -0- 9,123
Increase (decrease) in
accounts payable, man-
agement fees payable
and payable to affiliates -0- (16,827) 13,787 (3,651)
Total adjustments 17,012 (23,687) 63,134 (10,512)
Net cash used by
operating activities (14,862) (21,695) 16,403 (21,695)
CASH FLOWS FROM
INVESTING ACTIVITIES:
Distributions 7,946 23,369 7,946 23,369
Net advances paid
to by local limited
partnerships (24,958) (7,385) (24,958) (7,385)
Net cash provided
by investing
activities (17,012) 15,984 (17,012) 15,984
NET INCREASE
(DECREASE) IN
CASH AND CASH
EQUIVALENTS (31,874) (5,711) (609) (5,711)
CASH BALANCE
AT BEGINNING
OF PERIOD 32,441 7,247 1,176 7,247
CASH BALANCE
AT END OF PERIOD $ 567 $ 1,536 $ 567 $ 1,536
</TABLE>
Unaudited. See accompanying notes.
<PAGE>
NOTES TO SUMMARIZE FINANCIAL INFORMATION
June 30, 1999
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.
<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
$580,833 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>
<CAPTION>
<S> <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
<FN>
<F1>
(1) This property was sold through a resyndication during August, 1984.
</FN>
</TABLE>
Note 4 - Investments in Local Limited Partnerships - As of June 30, 1999
and 1998, the Partnership has investments in four 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.
<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>
<CAPTION>
June 30, 1999 December 31, 1998
<S> <C> <C>
Capital contributions $ 1,054,287 $ 1,054,287
Distributions (580,810) (572,684)
Equity in loss (779,851) (763,019)
Advances 39,025 14,067
Unamortized costs
of acquisitions 267,349 267,349
$ -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 $20,000 for the
six-month period ended June 30, 1999 and 1998.
<PAGE>
The components of the Partnership's equity in net income (loss) of the
local limited partnership for June 30, 1999 and 1998 is summarized as
follows:
<TABLE>
<CAPTION>
For the Three-Month For the Six-month
Period Ended Period Ended
June 30, June 30
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Distributions received
from Partnership with
zero investment:
Lakewood Apartments $ 7,946 $ -0- $ 7,946 $ -0-
Angeles II -0- 23,369 -0- 23,369
7,946 23,369 7,946 23,369
Repayment from
(advances to)
Partnerships with
zero investment:
Angeles I (13,078) (7,385) (13,078) (7,385)
Angeles II (11,880) -0- (11,880) -0-
(24,958) (7,385) (24,958) (7,385)
$(17,012) $15,984 $ (17,012) $ 15,984
</TABLE>
Note 5 - Subsequent Events
The Partnership is currently negotiating the sale of Angeles I and Angeles
II. The sale is expected to occur during August 1999.
<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 June 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 - 1972
(Registrant)
By: Interfinancial Real Estate Management
Company, General Partner
Date August 13, 1999 Michael Fulbright
(Signature)
By: Michael Fulbright, Secretary
Date August 13, 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 6-MOS YEAR
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1999 DEC-31-1998
<PERIOD-END> JUN-30-1999 JUN-30-1999 DEC-31-1998
<CASH> 0 567 1,176
<SECURITIES> 0 0 0
<RECEIVABLES> 0 0 47,670
<ALLOWANCES> 0 0 0
<INVENTORY> 0 0 0
<CURRENT-ASSETS> 0 0 0
<PP&E> 0 0 0
<DEPRECIATION> 0 0 0
<TOTAL-ASSETS> 0 567 48,846
<CURRENT-LIABILITIES> 0 1,376,712 1,378,260
<BONDS> 0 0 0
0 0 0
0 0 0
<COMMON> 0 0 0
<OTHER-SE> 0 (1,376,145) (1,329,414)
<TOTAL-LIABILITY-AND-EQUITY> 0 567 48,846
<SALES> 0 0 0
<TOTAL-REVENUES> 274 417 0
<CGS> 0 0 0
<TOTAL-COSTS> 0 0 0
<OTHER-EXPENSES> 32,148 47,148 0
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 0 0 0
<INCOME-PRETAX> (31,874) (46,731) 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> (31,874) (46,731) 0
<EPS-BASIC> 0 0 0
<EPS-DILUTED> 0 0 0
</TABLE>
