SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 10 Q
For the Quarter Ended September 30,1999
Commission File No.15940
UNIPROP MANUFACTURED HOUSING COMMUNITIES
INCOME FUND,
a
Michigan Limited Partnership
(Exact
name of registrant as specified in its charter)
|
MICHIGAN (State or
other jurisdiction of incorporation
or organization) |
382593067 (I.R.S.
employer identification
number) |
(248)645 9261
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 (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes
[X] No [ ]
UNIPROP
MANUFACTURED HOUSING COMMUNITIES INCOME FUND,
A MICHIGAN LIMITED PARTNERSHIP
September 30, 1999 (Unaudited)
1. Summary of
significant accounting policies:
Presentation:
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.
2. Payments to affiliates:
Nine
Months Ended Three Months Ended
Sept. 30, 1999 Sept. 30, 1998 Sept. 30, 1999 Sept. 30, 1998
Property management fee
to Uniprop, Inc.: $327,796
$312,361 $110,679 $104,362
-6-
ITEM 2.
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Capital Resources
The capital
resources of Uniprop Manufactured Housing Communities Income Fund (the
“Partnership”) consists primarily of its four manufactured housing
communities. On March 25, 1997 the
Partnership borrowed $33,500,000 from Nomura Asset Capital Corporation (the
“Financing”). The Partnership secured
the Financing by placing liens on its four communities. 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.
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 expected to be sold or financed within seven to ten years
after their acquisition. All of the
properties have been owned by the Partnership more than ten years, and they
were financed approximately 11 years after their acquisition. The General
Partner may elect to have the Partnership own the properties for as long as, 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 National City Bank of
Michigan/Illinois (formerly First of America Bank). The interest rate on such line of credit, floats 180 basis points
above 1 month LIBOR, which on September 30, 1999 was 5.66%. 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 have been growing and the General Partner believes that
continuing the model home program is in the best interest of the
Partnership. As of September 30, 1999,
the outstanding balance on the line of credit was $600,000.
Net Cash from
Operations available for aggregate distributions to all Partners in the
Partnership during the quarter ended September 30, 1999 amounted to
$462,000. The amount available during
the same period in 1998 was $419,505.
Management considers Net Cash from Operations to be a supplemental
measure of the Partnership’s operating performance. Net Cash from Operations is defined to mean net income computed
in accordance with generally accepted accounting principles (“GAAP”), plus real
estate related depreciation and amortization.
Net Cash from Operations does not represent cash generated from
operating activities in accordance with GAAP and is not necessarily indicative
of cash available to fund cash needs.
Net Cash from Operations should not be considered as an alternative to
net income as the primary indicator of the Partnership’s operating performance
or as an alternative to cash flow as a measure of liquidity.
The quarterly
Partnership Management Distribution due and paid to the General Partner for the
third quarter was $143,250, or one-fourth of 1.0% of the most recent appraised
value of the properties held by the Partnership.
($57,300,000 x
.01 = $573,000 / 4 = $143,250)
The cash
available, after payment of the Partnership Management Distribution of $143,250
from Net Cash from Operations, was $318,750.
From this amount, the General Partner elected to make a total
distribution of $93,750 for the third quarter of 1999, 80.0% or $75,000 was
paid to the Limited Partners and 20.0% or $18,750 was paid to the General Partner. The General Partner will continue to monitor
on-going Net Cash from Operations generated by the Partnership during the
coming quarters. If Net Cash from
Operations is lower or higher than the amount needed to maintain the current
distribution level, the General Partner may elect to reduce or increase the
level of future distributions paid to the Limited Partners.
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. As of September 30, 1999, the Partnership cash reserves
amounted to $1,202,892. The level of
cash reserves maintained is at the discretion of the General Partner.
Results of Operations
Overall, as
illustrated in the tables below, the four properties enjoyed a combined average
occupancy of 97.1% (1,771/1,824 sites) at the end of September 1999, versus
98.1% a year ago. The average monthly
rent in September 1999 was approximately $410, or 3.1% more than the $396
average monthly rent in September 1998.
| Total Capacity | Occupied sites | Occupancy Rate | Average Rent | |
| Aztec Estates | 645 | 614 | 95.2% | $454 |
| Kings Manor | 314 | 300 | 95.5 | 438 |
| Old Dutch Farms | 293 | 285 | 97.3 | 397 |
| Park of the Four Seasons | 572 | 572 | 100.0 | 358 |
| Total on 9/30/99 | 1,824 | 1,771 | 97.1% | $410 |
| Total on 9/30/98 | 1,824 | 1,790 | 98.1% | $396 |
| Gross Revenues | Net Operating Income | |||
| 9/30/99 | 9/30/98 | 9/30/99 | 9/30/98 | |
| Aztec Estates | $871,083 | $825,133 | $419,818 | $402,763 |
| Kings Manor | 379,758 | 363,761 | 419,818 | 402,763 |
| Old Dutch Farms | 345,187 | 341,989 | 212,318 | 216,252 |
| Park of the Four Seasons | 618,407 | 593,453 | 394,979 | 364,050 |
| $2,214,435 | $2,124,336 | $1,288,721 | $1,203,402 | |
| Partnership Management | 16,461 | 11,149 | (30,176) | (28,471) |
| Other Non Recruiting Expenses | --- | --- | (103,055) | (56,271) |
| Debt service | --- | --- | (693,490) | (699,155) |
| Depreciation and Amortization | --- | --- | (234,000) | (228,200) |
| $2,230,896 | $2,135,485 | $228,000 | $191,305 |
Comparison of Quarter Ended September 30, 1999
to Quarter Ended September 30, 1998
Gross revenues
increased $95,411, or 4.5%, to $2,230,896 in 1999, as compared to $2,135,485 in
1998. The increase in gross revenues is
the result of higher average rents at the Partnership’s four communities (see table
on previous page).
As described in the Statements of Income, total operating expenses increased $58,716, or 3.0%, to $2,002,896 in 1999, as compared to $1,944,180 in 1998. The increase in total operating expenses is primarily due to higher administrative expenses associated with professional fees.
As a result of
the foregoing factors, net operating income increased to $228,000 for the
quarter ended September 30, 1999 from $191,305 reported for the same period in
1998.
MANAGEMENT EXPENSES
Net
Partnership management expenses paid during the quarter amounted to
$30,176. Gross expenses of $46,637
(data processing, accounting and legal expenses, office supplies and wages to
employees of the Partnership) were partially offset by income of $16,461
generated by interest on the Partnership's reserves and transfer fees. The figures for last year's third quarter
were $28,471, $39,620 and $11,149, respectively.
ITEM 3.
DISCLOSURE
ABOUT MARKET RISK
Not
applicable, because the Partnership does not hold any financial instruments
subject to market risk.
PART II - OTHER INFORMATION
ITEM 6. Exhibits and Reports of Form 8-K
Exhibits
Exhibit
Number Description
27 Financial
Data Schedule
(b)
Reports on Form 8-K
There
were no reports filed on Form 8-K during
the three months ended September 30, 1999.
Pursuant to
the requirements 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.
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:
November 15, 1999
EXHIBIT INDEX
Exhibit Number Description Page
27 Financial
Data Schedule