For the Quarterly Period Ended June 30, 1999 Commission File No. 0-16701
|
MICHIGAN (State or other jurisdiction of incorporation or organization) |
38-2702802 (I.R.S. employer identification number) |
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.
Page
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Balance Sheets
June 30, 1999 (Unaudited) and
December 31, 1998 3
Statements of Income
Six months ended June 30, 1999
and 1998 and Three months ended
June 30, 1999 and 1998 (Unaudited) 4
Statements of Cash Flows
Six months ended June 30, 1999
and 1998 (Unaudited) 5
Notes to Financial Statements
June 30, 1999 (Unaudited) 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS 7
PART II OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 10
| UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II, | |||||||
| A MICHIGAN LIMITED PARTNERSHIP | |||||||
| BALANCE SHEETS | |||||||
| ASSETS | June 30, 1999 | December 31, 1998 | |||||
| (Unaudited) | |||||||
| Properties: | |||||||
| Land | $11,644,103 | $11,644,103 | |||||
| Buildings And Improvements | 49,597,570 | 49,421,935 | |||||
| Furniture And Fixtures | 446,733 | 400,872 | |||||
| Manufactured Homes | 2,216,455 | 2,100,666 | |||||
| 63,904,861 | 63,567,576 | ||||||
| Less Accumulated Depreciation | 19,729,413 | 18,819,413 | |||||
| 44,175,448 | 44,748,163 | ||||||
| Cash And Cash Equivalents | 2,390,034 | 2,482,314 | |||||
| Unamortized Finance Costs | 607,800 | 622,800 | |||||
| Other Assets | 1,282,261 | 981,346 | |||||
| Total Assets | $48,455,543 | $48,834,623 | |||||
| LIABILITIES | June 30, 1999 | December 31, 1998 | |||||
| (Unaudited) | |||||||
| Accounts Payable | $310,110 | $322,340 | |||||
| Other Liabilities | 1,022,898 | 876,996 | |||||
| Notes Payable | 29,740,839 | 29,915,975 | |||||
| Total Liablities | $31,073,847 | $31,115,311 | |||||
| Partners' Equity: | |||||||
| General Partner | 250,363 | 242,012 | |||||
| Unit Holders | 17,131,333 | 17,477,300 | |||||
| Total Partners' Equity | 17,381,696 | 17,719,312 | |||||
| Total Liabilities And | |||||||
| Partners' Equity | $48,455,543 | $48,834,623 | |||||
| See Notes to Financial Statements | |||||||
| 3 | |||||||
| UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II, | |||||||||||||||||
| A MICHIGAN LIMITED PARTNERSHIP | |||||||||||||||||
| STATEMENTS OF INCOME | SIX MONTHS ENDED | THREE MONTHS ENDED | |||||||||||||||
| (unaudited) | June 30, 1999 | June 30, 1998 | June 30, 1999 | June 30, 1998 | |||||||||||||
| Income: | |||||||||||||||||
| Rental Income | $5,945,409 | $5,707,802 | $2,975,210 | $2,856,394 | -- | ||||||||||||
| Other | 359,557 | 391,216 | 131,785 | 204,163 | |||||||||||||
| Total Income | $6,304,966 | $6,099,018 | $3,106,995 | $3,060,557 | |||||||||||||
| Operating Expenses: | |||||||||||||||||
| Administrative Expenses | |||||||||||||||||
| (Including $313,424, $300,757, $156,783 And $150,411 | |||||||||||||||||
| In Property Management Fees Paid | |||||||||||||||||
| To An Affliate For The Six and Three Month Periods | |||||||||||||||||
| Ended June 30, 1999 and 1998 | |||||||||||||||||
| Respectively) | 1,562,023 | 1,718,029 | 749,953 | 892,338 | |||||||||||||
| Property Taxes | 478,482 | 471,399 | 239,754 | 236,136 | |||||||||||||
| Utilities | 439,727 | 498,529 | 183,611 | 260,393 | |||||||||||||
| Property Operations | 1,106,514 | 787,388 | 639,630 | 379,374 | |||||||||||||
| Depreciation And Amortization | 925,000 | 920,000 | 462,500 | 460,000 | |||||||||||||
| Interest | 958,130 | 1,340,017 | 480,455 | 665,659 | |||||||||||||
| Total Operating Expenses | $5,469,876 | $5,735,362 | $2,755,903 | $2,893,900 | |||||||||||||
| Net Income | $835,090 | $363,656 | $351,092 | $166,657 | |||||||||||||
| Income Per Unit: | $0.25 | $0.11 | $0.11 | $0.05 | |||||||||||||
| Distribution Per Unit: | $0.36 | $0.34 | $0.18 | $0.17 | |||||||||||||
| Weighted Average Number Of Units | |||||||||||||||||
| Of Beneficial Assignment Of Limited Partnership | |||||||||||||||||
| Interest Outstanding During The Period Ending | |||||||||||||||||
| June 30, 1999 And 1998 | 3,303,387 | 3,303,387 | 3,303,387 | 3,303,387 | |||||||||||||
| See Notes to Financial Statements | |||||||||||||||||
| 4 | |||||||||||||||||
| UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II, | ||||||||||||||||
| A MICHIGAN LIMITED PARTNERSHIP | ||||||||||||||||
| STATEMENTS OF CASH FLOWS | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| SIX MONTHS ENDED | ||||||||||||||||
| June 30, 1999 | June 30, 1998 | |||||||||||||||
| Cash Flows From Operating Activities: | ||||||||||||||||
| Net Income (Loss) | $835,090 | $363,656 | ||||||||||||||
| Adjustments To Reconcile Net Income | ||||||||||||||||
| (Loss) To Net Cash Provided By | ||||||||||||||||
| Operating Activities: | ||||||||||||||||
| Depreciation | 910,000 | 896,000 | ||||||||||||||
| Amortization | 15,000 | 24,000 | ||||||||||||||
| (Increase) Decrease In Other Assets From Operations | (300,915) | 70,307 | ||||||||||||||
| Increase (Decrease) In Accounts Payables | (12,230) | 23,368 | ||||||||||||||
| Increase (Decrease) Other Liabilities From Operations | 145,902 | (276,036) | ||||||||||||||
| Total Adjustments | 757,757 | 737,639 | ||||||||||||||
| Net Cash Provided By (Used In) | ||||||||||||||||
| Operating Activities | 1,592,847 | 1,101,295 | ||||||||||||||
| Cash Flows From Investing Activities: | ||||||||||||||||
| Capital Expenditures | (337,285) | (277,263) | ||||||||||||||
| Sale of Fixed Assets | 0 | (20,737) | ||||||||||||||
| Payment On Mortgage | (175,136) | 0 | ||||||||||||||
| Net Cash Provided By (Used In) | ||||||||||||||||
| Investing Activities | (512,421) | (298,000) | ||||||||||||||
| Cash Flows From Financing Activities: | ||||||||||||||||
| Distributions To Partners | (1,172,706) | (1,123,152) | ||||||||||||||
| Net Cash Provided By (Used In) | ||||||||||||||||
| Financing Activities | (1,172,706) | (1,123,152) | ||||||||||||||
| Increase (Decrease) In Cash | (92,280) | (319,857) | ||||||||||||||
| Cash, Beginning | 2,482,314 | 1,630,552 | ||||||||||||||
| Cash, Ending | $2,390,034 | $1,310,695 | ||||||||||||||
| See Notes to Financial Statements | ||||||||||||||||
| 5 | ||||||||||||||||
1. Summary of significant accounting policies:
Presentation:
The balance sheet as of June 30, 1999, the related statements of income and statements of cash flow for the periods ended June 30, 1999 and 1998 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.
2. Payments to affiliates:
Six Months Ended Three Months Ended
June 30, 1999 June 30, 1998 June 30,1999June 30,1998
Property management fee
to Uniprop, Inc.: $313,424 $300,757 $156,783 $150,411
The Partnership's capital resources consist primarily of its nine manufactured home communities. On August 20, 1998, the Partnership refinanced seven of its nine properties with GMAC Commercial Mortgage Corporation (the “Refinancing”).
As a result of the Refinancing, seven of the Partnership’s nine properties are mortgaged. At the time of the Refinancing, the aggregate principal amounts due under the seven mortgage notes was $30,000,000 and the aggregate fair market value of the Partnership’s mortgaged properties was $66,000,000. The Partnership expects to meet its short-term liquidity needs generally through its working capital provided by operating activities.
Partnership liquidity is based, in part, upon its investment strategy. Upon acquisition, the Partnership anticipated owning the properties for seven to ten years. All of the properties have been owned by the Partnership more than ten years and 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.
Distributable Cash from Operations totaled $813,592 for the quarter ending June 30, 1999. Distributable Cash from Operations is defined to mean net income computed in accordance with generally accepted accounting principals (“GAAP”), plus real estate related depreciation and amortization. Distributable 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. Distributable 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. From Distributable Cash from Operations, the General Partner has decided to distribute $611,127, or 4.3%, on an annualized basis, to the Unit Holders. The General Partner will continue to monitor on-going cash flow generated by the Partnership’s nine properties during the coming quarters. If cash flow generated 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 Unit Holders.
While the Partnership is not required to maintain a working capital reserve, the Partnership has not distributed all the Distributable Cash from Operations in order to build reserves. For the quarter ended June 30, 1999, the Partnership added $202,466 to cash reserves. During the same quarter in 1998, the Partnership added $65,081 to cash reserves. The level of cash reserves maintained is at the discretion of the General Partner.
Results of Operations
Overall, as illustrated in the following table, the Partnership's nine properties reported a combined occupancy of 93.8%, (3,122/3,330 sites), versus 93.2% (3,104/3,330) for June 1998. The average monthly homesite rent as of June 30, 1999 was approximately $353, versus $342, an increase of 3.2% from June 1998.
| Total Capacity | Occupied Sites | Occupancy Rate | Average Rent | |
| Ardmor Village | 339 | 329 | 97.1% | $325 |
| Camelot Manor | 335 | 323 | 96.4 | 324 |
| Country Roads | 312 | 295 | 94.6 | 253 |
| Dutch Hills | 278 | 269 | 96.8 | 327 |
| El Adobe | 371 | 355 | 96.7 | 404 |
| Paradise Village | 611 | 510 | 83.1 | 291 |
| Stone gate Manor | 308 | 301 | 97.7 | 332 |
| Sunshine Village | 356 | 334 | 93.8 | 434 |
| West Valley | 420 | 406 | 96.4 | 450 |
| Total on 6/30/99 | 3,330 | 3,122 | 93.8% | $353 |
| Total on 6/30/98 | 3,330 | 3,104 | 93.2% | $342 |
| Gross Revenues | Net Operating Income | |||
| 6/30/99 | 6/30/98 | 6/30/99 | 6/30/98 | |
| Ardmor Village | $307,662 | $317,444 | $176,034 | $149,879 |
| Camelot Manor | 293,915 | 286,236 | 129,204 | 139,658 |
| Camelot Manor | 293,915 | 286,236 | 129,204 | 139,658 |
| Country Roads | 218,758 | 212,915 | 57,668 | 44,623 |
| Dutch Hills | 246,762 | 237,784 | 124,115 | 117,772 |
| El Adobe | 431,742 | 418,692 | 269,602 | 261,764 |
| Paradise Village | 379,224 | 345,288 | 67,239 | 58,551 |
| Stone Gate Manor | 288,380 | 271,971 | 148,916 | 119,389 |
| Sunshine Village | 366,410 | 398,266 | 208,749 | 245,504 |
| West Valley | 559,835 | 568,359 | 364,091 | 371,239 |
| $3,092,688 | $3,056,955 | $1,545,618 | $1,508,389 | |
| Partnership Management | 14,307 | 3,602 | (59,824) | (127,289) |
| Other Non Recurring Expenses | --- | --- | (191,747) | (88,774) |
| Debt Service | --- | --- | (480,455) | (665,659) |
| Depreciation and Amortization | --- | --- | (462,500) | (460,000) |
| $3,106,995 | $3,060,557 | $351,092 | $166,657 |
Comparison of Quarter Ended June 30, 1999 to Quarter Ended June 30, 1998
Gross revenues increased $46,438, or 1.5%, to $3,106,995 in 1999, as compared to $3,060,557 in 1998. The increase was the result of the increase in average monthly rents and an increase in overall occupancy. (See table on previous page.)
As described in the Statements of Income, total operating expenses decreased $137,997, or 4.8%, to $2,755,903 in 1999, as compared to $2,893,900 in 1998. The decrease is the result of lower administrative expenses, lower utility expenses and lower debt service payments.
As a result of the foregoing factors, net income increased to $351,092 for the quarter ended June 30, 1999 from $166,657 for the quarter ended June 30, 1998.
Net Partnership management expenses for the quarter amounted to $59,824. Expenses of $74,131 (data processing, accounting and legal expenses, appraisals and wages to employees of the Partnership) were offset by gross income of $14,307, generated by interest on the Partnership's reserves and transfer fees. The equivalent figures for the second quarter of 1998 were $127,289, $130,891 and $3,602, respectively.
ITEM 6. Exhibits and Reports on Form 8-K
(a) 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 June 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 II, a Michigan Limited Partnership
BY:Genesis Associates Limited Partnership,
General Partner
BY: Uniprop, Inc.,
its Managing General Partner
By: /s/ Paul M. Zlotoff
Paul M. Zlotoff, President
By: /s/ Gloria A. Koster
Gloria A. Koster, Principal Financial Officer
Dated: August 13, 1999
Exhibit
No. Description Page
27 Financial Data Schedule