SECURITIES AND EXCHANGE COMMISSION

   Washington, D.C. 20549

 

   FORM 10-Q

 

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

        For the Quarterly Period Ended September 30, 1999           Commission File No. 0-16701

 

 

 

 

 

      UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,

 

a Michigan Limited Partnership

(Exact name of registrant as specified in its charter)

 

 

 

MICHIGAN

(State or other jurisdiction of

incorporation or organization)

 

38-2702802

(I.R.S. employer

identification number)

 

 

280 Daines Street, Birmingham, Michigan 48009

(Address of principal executive offices) (Zip Code)

 

 

              

(248) 645-9261

 

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(g) of the Act:

$20 per unit,units of limited partnership interest
.

 

 

 

 

 

 

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 II,

A MICHIGAN LIMITED PARTNERSHIP

 

     

       INDEX

 

 

 

Page

 

 

PART I            FINANCIAL INFORMATION

 

  ITEM 1.            FINANCIAL STATEMENTS                              

 

Balance Sheets

September 30, 1999 (Unaudited) and

December 31, 1998    3

 

Statements of Income

Nine months ended September 30, 1999

and 1998 and Three months ended

September 30, 1999 and 1998 (Unaudited)                                                   4

 

Statements of Cash Flows

Nine months ended September 30, 1999

and 1998 (Unaudited)                                                                            5

 

Notes to Financial Statements

September 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

 

 

 

               -2-


                  

 

 

 

 

UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,
A MICHIGAN LIMITED PARTNERSHIP
BALANCE SHEETS
ASSETS September 30, 1999 December 31, 1998
(Unaudited)
Properties:
Land $11,644,103 $11,644,103
Buildings And Improvements 49,707,927 49,421,935
Furniture And Fixtures 451,670 400,872
Manufactured Homes 2,162,583 2,100,666
63,966,283 63,567,576
Less Accumulated Depreciation 20,184,413 18,819,413
43,781,870 44,748,163
Cash And Cash Equivalents 2,569,668 2,482,314
Unamortized Finance Costs 600,314 622,800
Other Assets 1,430,684 981,346
Total Assets $48,382,536 $48,834,623
LIABILITIES September 30, 1999 December 31, 1998
(Unaudited)
Accounts Payable $387,863 $322,340
Other Liabilities 1,202,635 876,996
Notes Payable 29,654,183 29,915,975
Total Liablities $31,244,681 $31,115,311
Partners' Equity:
General Partner 254,036 242,012
Unit Holders 16,883,819 17,477,300
Total Partners' Equity 17,137,855 17,719,312
Total Liabilities And
Partners' Equity $48,382,536 $48,834,623
See Notes to Financial Statements
3
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,
A MICHIGAN LIMITED PARTNERSHIP
STATEMENTS OF INCOME NINE MONTHS ENDED THREE MONTHS ENDED
(unaudited) September 30, 1999 September 30, 1998 September 30, 1999 September 30, 1998
Income:
Rental Income $8,938,928 $8,652,931 $2,993,519 $2,945,129 --
Other 552,777 626,757 193,220 235,541
Total Income $9,491,705 $9,430,763 $3,186,739 $3,331,745
Operating Expenses:
Administrative Expenses
(Including $472,050 and $457,304,
In Property Management Fees Paid
To An Affliate For The Six and Three Month Periods
Ended September 30, 1999 and 1998
Respectively) 2,544,445 2,679,039 982,422 961,010
Property Taxes 717,357 706,869 238,875 235,464
Utilities 706,738 747,219 267,011 248,690
Property Operations 1,495,180 1,196,644 388,666 409,256
Depreciation And Amortization 1,387,500 1,386,082 462,500 466,082
Interest 1,438,107 1,912,926 479,977 572,909
Total Operating Expenses $8,289,327 $8,628,779 $1,837,029 $1,932,401
Net Income $1,202,378 $801,984 $1,349,710 $1,399,344
Income Per Unit: $0.36 $0.24 $0.11 $0.13
Distribution Per Unit: $0.54 $0.51 $0.19 $0.17
Weighted Average Number Of Units
Of Beneficial Assignment Of Limited Partnership
Interest Outstanding During The Period Ending
September 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)
NINE MONTHS ENDED
September 30, 1999 September 30, 1998
Cash Flows From Operating Activities:
Net Income (Loss) $1,202,378 $801,990
Adjustments To Reconcile Net Income
(Loss) To Net Cash Provided By
Operating Activities:
Depreciation 1,365,000 1,344,000
Amortization 22,500 42,082
(Increase) Decrease In Other Assets From Operations (449,352) 1,574,850
Increase (Decrease) In Accounts Payables 65,523 434,701
Increase (Decrease) Other Liabilities From Operations 325,639 (432,735)
Total Adjustments 1,329,310 2,962,898
Net Cash Provided By (Used In)
Operating Activities 2,531,688 3,764,888
Cash Flows From Investing Activities: 0 775,859
Capital Expenditures (398,707) (410,749)
Sale of Fixed Assets 0 (189,319)
Payment On Mortgage (261,792) 45,000
Net Cash Provided By (Used In)
Investing Activities (660,499) (509,429)
Cash Flows From Financing Activities:
Distributions To Partners (1,783,835) (1,684,728)
Net Cash Provided By (Used In)
Financing Activities (1,783,835) (1,684,728)
Increase (Decrease) In Cash (87,354) (2,589,589)
Cash, Beginning 2,482,314 1,630,552
Cash, Ending $2,569,668 $4,220,141
See Notes to Financial Statements
5

UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,

A MICHIGAN LIMITED PARTNERSHIP

 

NOTES TO FINANCIAL STATEMENTS

September 30, 1999 (Unaudited)

 

 

1.            Summary of significant accounting policies:

 

Presentation:

 

The balance sheet as of September 30, 1999, the related statements of income and statements of cash flow for the periods ended September 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:

          Nine  Months Ended                  Three Months Ended

September  30, 1999    September  30, 1998            September 30,1999September 30,1998

Property management fee

to Uniprop, Inc.:                            $472,050             $457,304                       $158,626               $156,547


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 II (the "Partnership") consist primarily of its nine manufactured home communities. On August 20, 1998 the Partnership refinanced seven of its nine properties with GMAC Commercial Mortgage (the "Refinancing").

 

Liquidity

 

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 mortgage 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. 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 at least ten years and they were refinanced approximately 10 years after their acquisition. Genesis Associates Limited Partnership (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 $829,788 for the quarter ending September 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 for the third quarter of 1999, the General Partner has decided to distribute $627,644, or 4.4%, on an annualized basis, to the Unit Holders. The General Partner will continue to monitor on-going Distributable Cash from Operations generated by the Partnership during the coming quarters. If Distributable Cash from Operations 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. As of September 30, 1999, the Partnership added $202,166 to cash reserves. During the same quarter in 1998, the Partnership added $271,024 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 93.2%, (3,102/3,330 sites), versus 93.9% (3,126/3,330) for September 1998. The average monthly homesite rent as of September 30, 1999 was approximately $356, versus $346, an increase of 2.9% from September 1998.

 

  Total Capacity Occupied Sites Occupancy Rate Average Rent
Ardmor Village 339 327 96.5% $329
Camelot Manor 335 327 97.6 327
Country Roads 312 293 93.9 253
Dutch Hills 278 270 97.1 329
El Adobe 371 348 94.8 403
Paradise Village 611 508 82.7 291
Stone gate Manor 308 298 96.8 334
Sunshine Village 356 329 92.4 434
West Valley 420 402 95.5 467
Total on 9/30/99 3,330 3,102 93.2% $356
Total on 9/30/98 3,330 3,126 93.9% $346
    Gross Revenues Net Operating Income
  9/30/99 9/30/98 9/30/99 9/30/98
Ardmor Village $345,088 $298,044 $171,234 $193,707
Camelot Manor 290,972 286,259 118,048 128,252
Camelot Manor 293,915 286,236 129,204 139,658
Country Roads 208,169 212,653 18,312 (13,030)
Dutch Hills 245,018 240,935 110,655 128,999
El Adobe 440,484 443,717 281,685 276,682
Paradise Village 361,163 385,047 32,845 67,206
Stone Gate Manor 280,787 281,105 123,278 144,995
Sunshine Village 426,171 384,805 292,181 227,375
West Valley 575,544 599,570 349,791 405,860
  $3,173,396 $3,132,135 $1,498,029 $1,560,046
Partnership Management 13,343 151,075 (28,770) 94,578
Other Non Recurring Expenses --- --- (159,494) (177,299)
Debt Service --- --- (479,977) (572,909)
Depreciation and Amortization --- --- (462,500) (466,082)
  $3,186,739 $3,283,210 $367,288 $438,334

Comparison of Quarter Ended September 30, 1999 to Quarter Ended September 30, 1998

 

Gross revenues decreased $96,471, or 2.9%, to $3,186,739 in 1999, as compared to $3,283,210 in 1998. The decrease was the primarily the result of the absence of the "R" Security income. During the third quarter of 1998, the Partnership recognized income of $151,075 (which was net of a write-off of $868,000 in related, deferred financing costs) representing the liquidation of the "R" Security

 

As reflected in the Statements of Income, total operating expenses decreased $73,960, or 2.6%, to $2,819,451 in 1999, as compared to $2,893,411 in 1998. The decrease in total operating expenses was primarily the result of lower interest associated with the Partnership's mortgage debt on seven of its nine properties.

 

As a result of the foregoing factors, net operating income decreased to $367,288 for the quarter ended September 30, 1999 from $438,334 for the quarter ended September 30, 1998.

 


MANAGEMENT EXPENSES

 

Net Partnership management expenses for the quarter amounted to $28,770. Expenses of $42,113 (data processing, accounting and legal expenses, appraisal fees and wages to employees of the Partnership) were offset by gross income of $13,343, generated by interest on the Partnership's reserves and transfer fees . The equivalent figures for the third quarter of 1998 were $56,497, $105,032 and $1,067,610, respectively. The gross income in 1998 was inflated by $1,019,075, which was the result of the 1998 Refinancing.

 

PART II. OTHER INFORMATION

 

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 September 30, 1999.


SIGNATURES

 

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: November 15, 1999


EXHIBIT INDEX

 

 

Exhibit

   No.                                       Description                                        Page

 

   27                                                     Financial Data Schedule