United States
Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT of 1934
For the quarterly period ended June 30, 2003
[ ] 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 0-17645
UNITED INVESTORS GROWTH PROPERTIES
(Exact Name of Registrant as Specified in Its Charter)
Missouri 43-1483928
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UNITED INVESTORS GROWTH PROPERTIES
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
June 30, 2003
Assets
Cash and cash equivalents $ 168
Receivables and deposits 63
Restricted escrows 6
Other assets 151
Investment properties:
Land $ 893
Buildings and related personal property 9,242
10,135
Less accumulated depreciation (4,638) 5,497
$ 5,885
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 78
Tenant security deposit liabilities 39
Accrued property taxes 91
Due to affiliates of AIMCO 487
Other liabilities 102
Mortgage notes payable 6,450
Partners' Deficit
General partner $ (19)
Limited partners (39,287 units
issued and outstanding) (1,343) (1,362)
$ 5,885
See Accompanying Notes to Consolidated Financial Statements
UNITED INVESTORS GROWTH PROPERTIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per unit data)
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
Revenues:
Rental income $ 303 $ 350 $ 618 $ 739
Other income 26 40 47 72
Casualty gain 2 -- 15 --
Total revenues 331 390 680 811
Expenses:
Operating 157 185 341 341
General and administrative 18 31 50 64
Depreciation 115 112 226 217
Interest 125 123 250 245
Property taxes 68 53 132 107
Total expenses 483 504 999 974
Net loss $ (152) $ (114) $ (319) $ (163)
Net loss allocated to
general partner (1%) $ (1) $ (1) $ (3) $ (2)
Net loss allocated to
limited partners (99%) (151) (113) (316) (161)
$ (152) $ (114) $ (319) $ (163)
Net loss per limited partnership unit $(3.84) $(2.88) $(8.04) $(4.10)
See Accompanying Notes to Consolidated Financial Statements
UNITED INVESTORS GROWTH PROPERTIES
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partner Partners Total
Original capital contributions 39,297 $ -- $ 9,824 $ 9,824
Partners' deficit at
December 31, 2002 39,287 $ (16) $(1,027) $(1,043)
Net loss for the six months
ended June 30, 2003 -- (3) (316) (319)
Partners' deficit at
June 30, 2003 39,287 $ (19) $(1,343) $(1,362)
See Accompanying Notes to Consolidated Financial Statements
UNITED INVESTORS GROWTH PROPERTIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Six Months Ended
June 30,
2003 2002
Cash flows from operating activities:
Net loss $ (319) $ (163)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Casualty gain (15) --
Depreciation 226 217
Amortization of loan costs 11 11
Change in accounts:
Receivables and deposits (2) 9
Other assets (29) (22)
Accounts payable 34 25
Tenant security deposit liabilities 3 (4)
Accrued property taxes 32 (5)
Due to General Partner 36 27
Other liabilities 30 (60)
Net cash provided by operating activities 7 35
Cash flows from investing activities:
Insurance proceeds received 46 --
Property improvements and replacements (104) (265)
Net withdrawals from restricted escrows 76 17
Net cash provided by (used in) investing
activities 18 (248)
Cash flows from financing activities:
Advances from affiliates of AIMCO 33 297
Payments on advances from affiliates of AIMCO -- (50)
Payments on mortgage notes payable (79) (75)
Net cash (used in) provided by financing
activities (46) 172
Net decrease in cash and cash equivalents (21) (41)
Cash and cash equivalents at beginning of period 189 186
Cash and cash equivalents at end of period $ 168 $ 145
Supplemental disclosure of cash flow information:
Cash paid for interest $ 228 $ 233
See Accompanying Notes to Consolidated Financial Statements
UNITED INVESTORS GROWTH PROPERTIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
June 30, 2003
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements of United Investors
Growth Properties (the "Partnership" or "Registrant") have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Item 310(b) of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of United Investors Real Estate, Inc. (the
"General Partner" or "UIRE"), a Delaware corporation, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three and six month
periods ended June 30, 2003, are not necessarily indicative of the results that
may be expected for the fiscal year ending December 31, 2003. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Partnership's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 2002.
For part of the period ended June 30, 2003, the General Partner was an affiliate
of Apartment Investment and Management Company ("AIMCO"), a publicly traded real
estate investment trust. On May 1, 2003, Everest Properties, Inc., a California
corporation ("Everest") acquired all of the capital stock of the General
Partner. As the sole stockholder of UIRE, Everest is in a position to remove the
current directors and elect the directors of UIRE and consequently to control
the Partnership. In connection with this transaction, the General Partner and
the Partnership have entered into a Services Agreement effective May 1, 2003
(the "Services Agreement") with NHP Management Company ("NHP"), an affiliate of
AIMCO, whereby NHP will provide portfolio management services and property
management services for the Partnership. The portfolio management services shall
include the services the General Partner of the Partnership generally performs
or procures in connection with the management of the Partnership. As
compensation for providing the portfolio management services and the property
management services, the General Partner will pay and assign over to NHP all of
the income, distributions, fees, commissions, reimbursements and other payments
payable by the Partnership to the General Partner or any of its affiliates.
Note B - Transactions with Affiliated Parties
The Partnership has no employees and is dependent on the General Partner or NHP
and its affiliates for the management and administration of all Partnership
activities. The Partnership Agreement provides for (i) certain payments to
affiliates for services and (ii) reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership. Pursuant to the Services Agreement
discussed in "Note A", all such payments for services provided for in the
Partnership Agreement shall be paid to NHP which owns a significant number of
limited partnership units as discussed below.
During the six months ended June 30, 2003 and 2002, affiliates of NHP received
5% of gross receipts from both of the Partnership's residential properties as
compensation for providing property management services. The Partnership paid to
such affiliates approximately $34,000 and $40,000 for the six months ended June
30, 2003 and 2002, respectively, which is included in operating expenses.
An affiliate of NHP received reimbursement of accountable administrative
expenses amounting to approximately $23,000 and $52,000 for the six months ended
June 30, 2003 and 2002, respectively, which is included in general and
administrative expenses and investment properties. Included in these amounts are
fees related to construction management services provided by an affiliate of
AIMCO of approximately $22,000 for the six months ended June 30, 2002. No such
fees were charged during the six months ended June 30, 2003. The construction
management service fees are calculated based on a percentage of current year
additions to investment properties. As of June 30, 2003, the Partnership owed
approximately $75,000 to an affiliate of AIMCO for reimbursement of accountable
administrative expenses.
During the six months ended June 30, 2003 and 2002, an affiliate of AIMCO
advanced the Partnership approximately $33,000 and $297,000, respectively, to
cover operating obligations at Deerfield Apartments. The Partnership was able to
repay approximately $50,000 of such advances during 2002. At June 30, 2003, the
Partnership owed an affiliate of AIMCO approximately $412,000 which includes
advances and accrued interest from 2002. Interest is being charged at the prime
rate plus 2%, or 6.00% at June 30, 2003, in accordance with the Partnership
Agreement. During the six months ended June 30, 2002, the Partnership made
interest payments of approximately $2,000 and recognized interest expense of
approximately $4,000. No payments were made during the six months ended June 30,
2003. During the six months ended June 30, 2003, the Partnership recognized
interest expense of approximately $12,000 relative to obligations to affiliates.
The Partnership insures its properties up to certain limits through coverage
provided by AIMCO which is generally self-insured for a portion of losses and
liabilities related to workers compensation, property casualty and vehicle
liability. The Partnership insures its properties above the AIMCO limits through
insurance policies obtained by AIMCO from insurers unaffiliated with the General
Partner. During the six months ended June 30, 2003 and 2002, the Partnership was
charged by AIMCO and its affiliates approximately $24,000 and $29,000,
respectively, for insurance coverage and fees associated with policy claims
administration.
Note C - Casualty Gain
In October 2002, one of the Partnership's investment properties, Deerfield
Apartments, incurred mold damage. As a result of the damage, approximately
$44,000 of fixed assets and approximately $13,000 of accumulated depreciation
were written off resulting in a net write off of approximately $31,000. During
the six months ended June 30, 2003, the property received approximately $46,000
in proceeds from the insurance company to repair the mold damage and recognized
a casualty gain of approximately $15,000 as a result of the difference between
the proceeds received and the net book value of the buildings which were
damaged.
Note D - Legal Proceedings
The Partnership is unaware of any pending or outstanding litigation that is not
of a routine nature arising in the ordinary course of business.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The matters discussed in this report contain certain forward-looking statements,
including, without limitation, statements regarding future financial performance
and the effect of government regulations. Actual results may differ materially
from those described in the forward-looking statements and will be affected by a
variety of risks and factors including, without limitation: national and local
economic conditions; the terms of governmental regulations that affect the
Registrant and interpretations of those regulations; the competitive environment
in which the Registrant operates; financing risks, including the risk that cash
flows from operations may be insufficient to meet required payments of principal
and interest; real estate risks, including variations of real estate values and
the general economic climate in local markets and competition for tenants in
such markets; litigation, including costs associated with prosecuting and
defending claims and any adverse outcomes, and possible environmental
liabilities. Readers should carefully review the Registrant's financial
statements and the notes thereto, as well as the risk factors described in the
documents the Registrant files from time to time with the Securities and
Exchange Commission.
The Partnership's investment properties consist of two apartment complexes. The
following table sets forth the average occupancy of the properties for each of
the six month periods ended June 30, 2003 and 2002:
Average Occupancy
Property 2003 2002
Terrace Royale Apartments 84% 90%
Bothell, Washington
Deerfield Apartments 80% 88%
Memphis, Tennessee
The General Partner attributes the decrease in occupancy at Terrace Royale
Apartments to major job reductions and increased competition in the local market
of the Seattle area.
The General Partner attributes the decrease in occupancy at Deerfield Apartments
to increased competition in the local market and the evictions of undesirable
tenants.
Results of Operations
The Partnership's net loss for the three and six months ended June 30, 2003 was
approximately $152,000 and $319,000 compared to a net loss of approximately
$114,000 and $163,000 for the three and six months ended June 30, 2002. The
increase in net loss for the three month period is due to a decrease in total
revenues partially offset by a decrease in total expenses. The increase in net
loss for the six month period is due to a decrease in total revenues and an
increase in total expenses. Total revenues for both periods decreased due to
decreases in rental and other income partially offset by a casualty gain. Rental
income decreased due to a decrease in occupancy at both investment properties
and an increase in resident concessions at Deerfield Apartments. Other income
decreased due to a decrease in resident charges and fees at Deerfield
Apartments.
During the six months ended June 30, 2003, a net casualty gain of approximately
$15,000 was recorded at Deerfield Apartments. The casualty gain related to mold
damage to the apartment complex. The property received approximately $46,000 in
proceeds from the insurance company to repair the mold damage and recognized a
casualty gain of approximately $15,000 as a result of the difference between the
proceeds received and the net book value of the buildings which were damaged.
The increase in total expenses for the six month period is due to an increase in
property tax expense. The decrease in total expenses for the three month period
is due to a decrease in operating expenses partially offset by an increase in
property tax expense. Operating expenses decreased due to decreases in
maintenance expense. Maintenance expense decreased due to decreases in contract
labor at Terrace Royal Apartments. Property tax expense increased as a result of
an increase in the assessed value at Deerfield Apartments.
Included in general and administrative expenses are management reimbursements to
the General Partner as allowed under the Partnership Agreement. Also included
are costs associated with the quarterly communications with investors and
regulatory agencies and the annual audit required by the Partnership Agreement.
As part of the ongoing business plan of the Partnership, the General Partner
monitors the rental market environment of its investment properties to assess
the feasibility of increasing rents, maintaining or increasing occupancy levels
and protecting the Partnership from increases in expenses. As part of this plan,
the General Partner attempts to protect the Partnership from the burden of
inflation-related increases in expenses by increasing rents and maintaining a
high overall occupancy level. However, due to changing market conditions, which
can result in the use of rental concessions and rental reductions to offset
softening market conditions, there is no guarantee that the General Partner will
be able to sustain such a plan.
Liquidity and Capital Resources
At June 30, 2003, the Partnership had cash and cash equivalents of approximately
$168,000 compared to approximately $145,000 at June 30, 2002. The decrease in
cash and cash equivalents of approximately $21,000 from December 31, 2002, is
due to approximately $46,000 of cash used in financing activities partially
offset by approximately $18,000 of cash provided by investing activities and
approximately $7,000 of cash provided by operating activities. Cash used in
financing activities consisted of payments of principal made on the mortgages
encumbering the Partnership's investment properties partially offset by advances
from the general partner. Cash provided by investing activities consisted of
insurance proceeds received from the casualty at Deerfield Apartments and net
withdrawals from escrow accounts maintained by the mortgage lender, partially
offset by property improvements and replacements. The Partnership's invests its
working capital reserves in interest bearing accounts.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the properties to adequately maintain the physical
assets and other operating needs of the Partnership and to comply with Federal,
state and local legal and regulatory requirements. The General Partner monitors
developments in the area of legal and regulatory compliance and is studying new
federal laws, including the Sarbanes-Oxley Act of 2002. The Sarbanes-Oxley Act
of 2002 mandates or suggests additional compliance measures with regard to
governance, disclosure, audit and other areas. In light of these changes, the
Partnership expects that it will incur higher expenses related to compliance,
including increased legal and audit fees. Capital improvements planned for each
of the Partnership's properties are detailed below.
Terrace Royale Apartments
During the six months ended June 30, 2003, the Partnership completed
approximately $19,000 of capital improvements at Terrace Royale Apartments,
consisting primarily of appliance, floor covering and window treatment
replacements and sprinkler system upgrades. These improvements were funded from
operations and replacement reserves. The Partnership evaluates the capital
improvement needs of the property during the year and currently expects to
complete an additional $15,000 in capital improvements during the remainder of
2003. The additional capital improvements will consist primarily of floor
covering, cabinet, appliance, and HVAC replacements. Additional capital
improvements may be considered and will depend on the physical condition of the
property as well as the anticipated cash flow generated by the property and
replacement reserves.
Deerfield Apartments
During the six months ended June 30, 2003, the Partnership completed
approximately $85,000 of capital improvements at Deerfield Apartments,
consisting primarily of appliance replacements and additional air conditioning
units. These improvements were funded from operations and replacement reserves.
The Partnership evaluates the capital improvement needs of the property during
the year and currently expects to complete an additional $15,000 in capital
improvements during the remainder of 2003. The additional capital improvements
will consist primarily of floor covering and appliance replacements. Additional
capital improvements may be considered and will depend on the physical condition
of the property as well as the anticipated cash flow generated by the property
and replacement reserves.
The additional capital expenditures will be incurred only if cash is available
from operations or from Partnership reserves. To the extent that such budgeted
capital improvements are completed, the Partnership's distributable cash flow,
if any, may be adversely affected at least in the short term.
The Partnership's assets are thought to be sufficient for any near term needs
(exclusive of capital improvements) of the Partnership. The mortgage
indebtedness of approximately $6,450,000 has maturity dates ranging from
December 2004 to February 2019 with a balloon payment of approximately
$3,303,000 due at maturity in December 2004 for the mortgage encumbering
Deerfield Apartments. The General Partner will attempt to refinance such
indebtedness and/or sell the properties prior to such maturity dates. If the
properties cannot be refinanced and/or sold for a sufficient amount, the
Partnership may risk losing such properties through foreclosure.
The Partnership did not distribute any funds during the six months ended June
30, 2003 and 2002. The Partnership's cash available for distribution is reviewed
on a monthly basis. Future distributions will depend on the levels of net cash
generated from operations, the availability of cash reserves, and the timing of
debt maturities, refinancings, and/or property sales. There can be no assurance,
however, that the Partnership will generate sufficient funds from operations
after required capital expenditures to permit distributions to its partners
during the remainder of 2003 or subsequent periods.
Other
Until May 1, 2003, AIMCO was the indirect sole stockholder of UIRE, the sole
general partner of the Partnership, and therefore held all of the general
partner interest in the Partnership. On May 1, 2003, Everest acquired all of the
capital stock of the General Partner. The capital stock was acquired in
connection with the purchase by Everest or its affiliates of limited partners
interest in partnerships for which UIRE serves as the general partner. In
connection with the acquisition of UIRE, Everest also acquired the 14,328
limited partnership units (the "Units") owned by AIMCO as of May 1, 2003. A
number of these Units were acquired pursuant to tender offers made by AIMCO or
its affiliates. As the sole stockholder of UIRE, Everest is in a position to
remove the current directors and elect the directors of UIRE and consequently to
control the Partnership. An Everest affiliate, Everest Properties, LLC, owns
14,344 Units representing approximately 36.5% of the outstanding Units as of
June 30, 2003. Under the Partnership Agreement, unitholders holding a majority
of the Units are entitled to take action with respect to a variety of matters
that include, but are not limited to, voting on certain amendments to the
Partnership Agreement and voting to remove the General Partner. Although the
General Partner owes fiduciary duties to the limited partners of the
Partnership, the General Partner also owes fiduciary duties to Everest as its
sole stockholder. As a result, the duties of the General Partner, as general
partner, to the Partnership and its limited partners may come into conflict with
the duties of the General Partner to Everest, as it sole stockholder.
Critical Accounting Policies and Estimates
The consolidated financial statements are prepared in accordance with accounting
principles generally accepted in the United States which require the Partnership
to make estimates and assumptions. The Partnership believes that of its
significant accounting policies, the following may involve a higher degree of
judgment and complexity.
Impairment of Long-Lived Assets
Investment properties are recorded at cost, less accumulated depreciation,
unless considered impaired. If events or circumstances indicate that the
carrying amount of a property may be impaired, the Partnership will make an
assessment of its recoverability by estimating the undiscounted future cash
flows, excluding interest charges, of the property. If the carrying amount
exceeds the aggregate future cash flows, the Partnership would recognize an
impairment loss to the extent the carrying amount exceeds the fair value of the
property.
Real property investments are subject to varying degrees of risk. Several
factors may adversely affect the economic performance and value of the
Partnership's investment properties. These factors include changes in the
national, regional and local economic climate; local conditions, such as an
oversupply of multifamily properties; competition from other available
multifamily property owners and changes in market rental rates. Any adverse
changes in these factors could cause an impairment in the Partnership's assets.
Revenue Recognition
The Partnership generally leases apartment units for twelve-month terms or less.
Rental income attributable to leases is recognized monthly as it is earned and
the Partnership fully reserves all balances outstanding over thirty days. The
Partnership will offer rental concessions during particularly slow months or in
response to heavy competition from other similar complexes in the area. Any
concessions given at the inception of the lease are amortized over the life of
the lease.
ITEM 3. CONTROLS AND PROCEDURES
(a) Disclosure Controls and Procedures. The Partnership's management, with the
participation of the principal executive officer and principal financial officer
of the General Partner, who are the equivalent of the Partnership's principal
executive officer and principal financial officer, respectively, has evaluated
the effectiveness of the Partnership's disclosure controls and procedures (as
such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the
period covered by this report. Based on such evaluation, the principal executive
officer and principal financial officer of the General Partner, who are the
equivalent of the Partnership's principal executive officer and principal
financial officer, respectively, have concluded that, as of the end of such
period, the Partnership's disclosure controls and procedures are effective.
(b) Internal Control Over Financial Reporting. There have not been any changes
in the Partnership's internal control over financial reporting (as such term is
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the
fiscal quarter to which this report relates that have materially affected, or
are reasonably likely to materially affect, the Partnership's internal control
over financial reporting.
Item 5. Other Information
On May 1, 2003, there was a change in control of the General Partner of the
Partnership, see Discussion in Part I - Item 2. Management's Discussion and
Analysis or Plan of Operation - Other.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
3.1 Form of Agreement of Limited Partnership (part of the Prospectus
of Partnership contained in the Partnership's Amendment to
Registration Statement filed on June 9, 1988, is incorporated
herein by reference).
3.2 Seventh Amendment to Agreement of Limited Partnership (Exhibit
4.3 to the Partnership's Quarterly Report on Form 10-Q filed on
May 15, 1989, is incorporated herein by reference).
31.1 Certification of equivalent of Chief Executive Officer pursuant
to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification of equivalent of Chief Financial Officer pursuant
to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
b) Reports on Form 8-K:
Current Report filed on Form 8-K dated May 1, 2003 and filed
May 15, 2003 disclosing the acquisition of all capital stock
of United Investor Real Estate, Inc. by Everest Properties,
Inc.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
UNITED INVESTORS GROWTH PROPERTIES
By: United Investors Real Estate, Inc.
Its General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/ Thomas C. Novosel
Thomas C. Novosel
Senior Vice President
and Chief Accounting Officer
Date: August 13, 2003
Exhibit 31.1
CERTIFICATION
I, Patrick J. Foye, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of United Investors
Growth Properties;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
evaluation; and
(c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: August 13, 2003
/s/Patrick J. Foye
Patrick J. Foye
Executive Vice President of United Investors
Real Estate, Inc., equivalent of the chief
executive officer of the Partnership
Exhibit 31.2
CERTIFICATION
I, Paul J. McAuliffe, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of United Investors
Growth Properties;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
evaluation; and
(c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: August 13, 2003
/s/Paul J. McAuliffe
Paul J. McAuliffe
Executive Vice President and Chief Financial
Officer of United Investors Real Estates,
Inc., equivalent of the chief financial
officer of the Partnership
Exhibit 32.1
Certification of CEO and CFO
Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report on Form 10-QSB of United Income Growth
Partnership (the "Partnership"), for the quarterly period ended June 30, 2003 as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), Patrick J. Foye, as the equivalent of the chief executive officer of
the Partnership, and Paul J. McAuliffe, as the equivalent of the chief financial
officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that, to the best of his knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Partnership.
/s/Patrick J. Foye
Name: Patrick J. Foye
Date: August 13, 2003
/s/Paul J. McAuliffe
Name: Paul J. McAuliffe
Date: August 13, 2003
This certification is furnished with this Report pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Partnership for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended.