| For the Quarter Ended March 31, 1998 | Commission File No. 0-15940 |
| MICHIGAN (State or other jurisdiction of incorporation or organization) | 38-2593067 (I.R.S. employer identification number) |
| Yes [X] | No [ ] |
ASSETS March 31, 1998 December 31, 1997
(UNAUDITED)
Properties:
Land $5,280,000 $5,280,000
Buildings And Improvements 23,866,913 23,862,182
Manufactured Homes 658,226 668,108
Furniture And Fixtures 120,945 117,847
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29,926,084 29,928,137
9,012,795 8,805,795
Less Accumulated Depreciation ----------- -----------
20,913,289 21,122,342
Cash And Cash Equivalents 734,789 649,137
Unamoritized Finance Costs 775,228 796,547
Other Assets 595,795 484,407
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Total Assets $23,019,101 $23,052,433
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LIABILITIES March 31, 1998 December 31, 1997
(UNAUDITED)
Accounts Payable $72,147 $116,066
Line of Credit 434,916 358,916
Mortgage Payable (3) 33,288,462 33,355,940
Other Liabilities 1,009,053 891,073
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Total Liablities $34,804,578 $34,721,995
Partners' Equity
General Partner (1,335,054) (1,261,905)
Class A Limited Partners (9,552,702) (9,509,936)
Class B Limited Partners (897,721) (897,721)
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Total Partners' Equity (11,785,477) (11,669,562)
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Total Liabilities And
Partners' Equity $23,019,101 $23,052,433
----------- -----------
THREE MONTHS ENDED
March 31, 1998 March 31, 1997
Income:
Rental Income $1,991,887 $1,937,285
Other 89,980 70,669
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Total Income $2,081,867 $2,007,954
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Operating Expenses:
Administrative Expenses
(Including $103,376 And $99,694
In Property Management Fees Paid
To An Affliate For The Three Month
Period Ended March 31, 1998 and
1997, Respectively) 479,388 432,153
Property Taxes 207,405 211,145
Utilities 112,356 111,205
Property Operations 259,633 206,370
Depreciation And Amortization 228,500 196,186
Interest 702,500 0
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Total Operating Expenses $1,989,782 $1,157,059
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Net Income $92,085 $850,895
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Income Per Limited Partnership Unit:
Class A $0.00 $18.00
Class B $2.00 $25.00
Distribution Per Limited Partnership Unit
Class A $2.00 $1,025.00
Class B $2.00 $1,025.00
Weighted Average Number Of Limited
Partnership Units Outstanding
Class A 20,230 20,230
Class B 9,770 9,770
THREE MONTHS ENDED
March 31, 1998 March 31, 1997
Cash Flows From Operating Activities:
Net Income (Loss) $92,085 $850,895
Adjustments To Reconcile Net Income
(Loss) To Net Cash Provided By
Operating Activities:
Depreciation 207,000 196,186
Amortization 21,500 0
(Increase) Decrease In Other Assets From Operations (111,569) (1,116,150)
Increase (Decrease) In Accounts Payables (43,919) (68,164)
Increase (Decrease) Other Liabilities From Operations 117,980 (285,837)
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Total Adjustments 190,992 (1,273,965)
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Net Cash Provided By (Used In)
Operating Activities 283,077 (423,070)
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Cash Flows From Investing Activities:
Capital Expenditures 2,053 (51,613)
Funds From Line of Credit 76,000 104,700
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Net Cash Provided By (Used In)
Investing Activities 78,053 53,087
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Cash Flows From Financing Activities:
Funds from Mortgage 0 33,500,000
Distributions To Partners (208,000) (1,355,000)
Return of Capital 0 (30,000,000)
Principal Payments on Mortgage (67,478) 0
-------- -----------
Net Cash Provided By (Used In)
Financing Activities (275,478) 2,145,000
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Increase (Decrease) In Cash 85,652 1,775,017
Cash, Beginning 649,137 640,086
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Cash, Ending $734,789 $2,415,103
See Notes to Financial Statements
Presentation:
The balance sheet as of March 31, 1998, the related statements of income and statements of cash flow for the periods ended March 31, 1998 and 1997 have been prepared by management, pursuant to the rules and regulations of the Securities and Exchange Commission, without audit by independent public accountants. In the opinion of management, all adjustments (consisting of only normal recurring accruals) necessary for a fair presentation of such financial statements have been included.
The financial statements and notes are presented as permitted by the rules and regulations of the Securities and Exchange Commission for Form 10-Q and do not contain certain information included in the Company's annual financial statements and notes, which should be consulted.
THREE MONTHS ENDED
March 31, 1998 March 31, 1997
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PROPERTY MANAGEMENT FEE
TO UNIPROP, INC.: $103,376 $99,694
The Partnership's capital resources consist primarily of its four manufactured housing communities. On March 25, 1997 the Partnership borrowed $33,500,000 from Nomura Asset Capital Corporation (the "Financing"). It secured the Financing by placing liens on its four communitites. As a result of the Financing, the Partnership distributed $30,000,000 to the Limited Partners, which represented a full return of the original capital contributions of $1,000 per unit. Liquidity
As a result of the Financing, the Partnership's four properties are mortgaged. At the time of the Financing, the aggregate principal amounts due under the four mortgage notes was $33,500,000 and the aggregate fair market value of the Partnership's mortgaged properties was $53,200,000. The Partnership expects to meet its short-term liquidity needs generally through its working capital provided by operating activities.
The Partnership's long-term liquidity is based, in part, upon its investment strategy. The properties owned by the Partnership were anticipated to be held for seven to ten years after their acquisition. All of the properties have been owned by the Partnership at least ten years. The General Partner may elect to have the Partnership own the properties for as long as, if, in the opinion of the General Partner, it is in the best interest of the Partnership to do so.
The Partnership has a renewable $600,000 line of credit with First of America Bank. The interest rate, on such line of credit, floats 180 basis points above 1 month LIBOR, which on March 31, 1998 was 5.69%. The sole purpose of the line of credit is to purchase new and used homes to be used as model homes and offered for sale within the Partnership's communities. Over the past two years, sales of the new and used model homes has been growing and the General Partner believes that continuing the model home program is in the best interest of the Partnership. As of March 31, 1998, the oustanding balance on the line of credit was $434,916.
The total funds provided by operations and available for aggregate distributions to all Partners in UMHCIF during the quarter ended March 31, 1998 amounted to $320,585. The amount available during the same period in 1997 was $1,047,081. The significant decrease in cash available for distributions is a result of the Partnership now having mortgage debt, which it did not have in place at the end of the quarter ending March 31, 1997.
The quarterly Partnership Management Distribution due and paid to the General Partner for the first quarter was $139,500, or one-fourth of 1.0% of the most recent appraised value of the properties held by the Partnership. ($55,800,000 x .01 = $558,000 / 4 = $139,500)
The cash available after payment of the Partnership Management Distribution amounted to $181,085. From this amount, the General Partner elected to make a total distribution of $75,000 for the first quarter of 1998, 80.0% or $60,000 was paid to the Limited Partners and 20.0% or $15,000 was paid to the General Partner.
While the Partnership is not required to maintain a working capital reserve, the Partnership has not distributed all the cash generated from operations in order to build cash reserves. For the quarter ended March 31, 1998, the Partnership added $106,085 to reserves. During the same quarter in 1997, the Partnership added $198,681 to cash reserves. The amount placed in reserves is at the discretion of the General Partner.
Overall, as illustrated in the tables below, the four properties enjoyed a combined average occupancy of 97.5% (1,779/1,824 sites) at the end of March 1998, versus 97.4% a year ago. The average monthly rent in March 1998 was approximately $394, or 3.1% more than the $382 average monthly rent in March 1997.
Total Occupied Occupancy Average
Capacity Sites Rate Rent
Aztec Estates 645 622 96.4% 411
Kings Manor 314 303 96.5 422
Old Dutch Farms 293 285 97.3 393
Park of the Four Seasons 572 569 99.5 334
--- ---- ----- ----
Total on 3/31/98: 1,824 1,779 97.5% $394
Total on 3/31/97: 1,824 1,777 97.4% $382
GROSS REVENUES NET OPERATING INCOME
3/31/98 3/31/97 3/31/98 3/31/97
Aztec Estates $792,047 $784,746 $408,877 $426,951
Kings Manor 362,743 342,139 217,620 214,760
Old Dutch Farms 337,100 315,840 220,489 205,820
Park of the Four Seasons 582,587 554,821 379,452 335,020
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2,074,477 1,997,546 1,226,438 1,182,551
Partnership Management: 7,390 10,408 (115,183) (95,167)
Other Non-Recurring expenses: --- --- (88,170) (40,303)
Debt Service (702,500) -0-
Depreciation and Amortization --- --- (228,500) (196,186)
----------- --------- ---------- ---------
$ 2,081,867 $2,007,954 $ 92,085 $850,895
Comparison of Quarter Ended March 31, 1998 to Quarter Ended March 31, 1997
Gross revenues increased $73,913, or 3.7%, to $2,081,867 in 1998, as compared to $2,007,954 in 1997. The increase was the result of the increase in average monthly rents and an increase in overall occupancy. (See table on previous page.)
Operating expenses increased $832,723, or 72%, to $1,989,782 in 1998, as compared to $1,157,059 in 1997. The increase was primarily the result of $702,500 in interest expense for the mortgage debt on the Partnership's properties, which was not in place as of the end of the first quarter of 1997. Additionally, partnership management costs increased $20,016, or 21%, to $115,183 in 1998, as compared to $95,167 in 1997. The increase was the result of higher Partnership legal expenses. Property operation costs increased $53,263, or 25.8%, to $259,633 in 1998, as compared to $206,370 in 1997. The increase was the result of approximately $32,000 in non-recurring expenses at two of the Partnership's properties.
As a result of the foregoing factors, net income decreased to $92,085 as of March 31, 1998 from $850,895 as of March 31, 1997.
Net Partnership management expenses paid during the quarter amounted to $115,183. Gross expenses of $122,573 (data processing, accounting and legal expenses, office supplies and wages to employees of the Partnership) were partially offset by income of $7,390 generated by interest on the Partnership's reserves and transfer fees. The figures for last year's first quarter were $95,167, $105,575 and $10,408, respectively.
(a) Exhibits
Exhibit Number Description
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27 Financial Data Schedule
(b) Reports of Form 8-K
There were no reports filed on Form 8-K during
the three months ended March 31, 1998.
Uniprop Manufactured Housing
Communities Income Fund,
A Michigan Limited Partnership
BY: P.I. Associates Limited Partnership,
A Michigan Limited Partnership,
its General Partner
BY: /s/ Paul M. Zlotoff
---------------------------------------------
Paul M. Zlotoff, General Partner
BY: /s/ Gloria A. Koster
---------------------------------------------
Gloria A. Koster, Principal Financial Officer
Dated: May 15, 1998
Exhibit No. Description
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27 Financial Data Schedule