| MICHIGAN | 38-2702802 | |
| (State or other jurisdiction of | (I.R.S. employer | |
| incorporation or organization) | identification number) |
Securities registered pursuant to Section 12(g) of the Act: units of beneficial assignments 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.
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PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
| Balance Sheets | |||
| September 30, 2001 and | |||
| December 31, 2000 | 3 | ||
| Statements of Income | |||
| Nine months ended September 30, 2001 | |||
| and 2000 and Three months ended | |||
| September 30, 2001 and 2000 | 4 | ||
| Statement of Partners' Equity | |||
| Nine months ended September 30, 2001 | 4 | ||
| Statements of Cash Flows | |||
| Nine months ended September 30, 2001 | |||
| and 2000 | 5 | ||
| Notes to Financial Statements | 6 |
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS 7
ITEM 3. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK 10
PART II OTHER INFORMATION 10
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 10
1. Basis of Presentation:
The accompanying unaudited 2001 financial statements have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the instructions to Form 10-Q
and Article 10 of Regulation S-X. 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 management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. The balance sheet at December 31, 2000 has been derived from the
audited financial statements at that date. Operating results for the nine months ended September 30,
2001 are not necessarily indicative of the results that may be expected for the year ending December 31,
2001, or for any other interim period. For further information, refer to the financial statements and
footnotes thereto included in the Partnership's Form 10-K for the year ended December 31, 2000.
ITEM 2.
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 amount 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. 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 $951,848 for the quarter ended September 30, 2001. Distributable 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. 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 2001, the General Partner has decided to distribute $693,711 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 cash reserves. As of September 30, 2001, the Partnership cash reserves amounted to $4,039,190. 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 87%, (2,908/3,329 sites), versus 92% (3,051/3,330) for September 2000. The average monthly homesite rent as of September 30, 2001 was approximately $372,versus $361, an increase of 3% from September 2000.
| Total Capacity | Occupied Sites | Occupancy Rate | Average Rent* Ardmor Village | 339 | 331 | 98% | $354
| Camelot Manor | 335 | 298 | 89% | 351
| Country Roads | 311 | 262 | 84% | 251
| Dutch Hills | 278 | 275 | 99% | 349
| El Adobe | 367 | 304 | 83% | 422
| Paradise Village | 614 | 443 | 72% | 315
| Stonegate Manor | 308 | 279 | 91% | 354
| Sunshine Village | 356 | 330 | 93% | 462
| West Valley | 421 | 386 | 92% | 486
| Total on 9/30/01: | 3,329 | 2,908 | 87% | $372*
| Total on 9/30/00: | 3,330 | 3,051 | 93% | $361
| |
Gross Revenues Net Income
three months ended three months ended
9/30/01 9/30/00 9/30/01 9/30/00
Ardmor Village $350,432 $344,646 $218,295 $190,138
Camelot Manor 307,391 313,759 151,471 159,549
Country Roads 196,666 201,832 54,865 (43,128)
Dutch Hills 274,630 263,718 125,872 147,124
El Adobe 380,335 426,755 203,879 259,984
Paradise Village 421,109 427,745 122,061 63,163
Stonegate Manor 282,791 292,004 145,599 145,932
Sunshine Village 428,973 403,261 248,481 233,586
West Valley 559,596 600,729 337,140 390,735
3,201,923 3,274,449 1,607,663 1,547,083
Partnership Management: 24,827 41,044 (70,655) (12,564)
Other expenses: ----- ---- (113,730) (169,881)
Interest: (471,430) (477,977)
Depreciation and Amortization:--- --- (442,880) (440,807)
$3,226,750 $3,315,493 $508,968 $445,854
Comparison of the nine months ended September 30, 2001 to the nine months ended September 30, 2000
Rental Income increased $7,398 from $9,205,143 to $9,212,541. Total Revenue decreased $40,021 or 0.4% to $9,770,575 in 2001 compared to $9,810,546 in 2000 due to lower "Other Income". Other Income fell by $47,419 due to lower late charges, lower interest income (due to lower interest rates) and lower lease home income.
As reported in the Statements of Income, total operating expenses decreased $239,350, to $8,107,862 in 2001 compared to $8,347,212 in 2000, due primarily to lower interest expense, lower utility costs and lower depreciation and amortization.
As a result of the forgoing factors Net Income increased to $1,662,663 for the nine months ended September 30, 2001 from $1,463,334 for the nine months ended September 30, 2000.
Comparison of Quarter Ended September 30, 2001 to Quarter Ended September 30, 2000
Gross revenues decreased $88,743, or 2.6%, to $3,226,750 in 2001, as compared to $3,315,493 in 2000, primarily due to lower occupancy at the nine communities.
As reflected in the Statements of Income, total operating expenses decreased $151,857, or 5.3%, to $2,717,782 in 2001 as compared to $2,869,639 in 2000.
As a result of the foregoing factors Net Income increased 1% to $508,968 for the quarter ended September 30, 2001 from $445,854 for the quarter ended September 30, 2000.
ITEM 3.
The Partnership is exposed to interest rate risk primarily through its borrowing activities. There is inherent roll over risk for borrowings as they mature and are renewed at current market rates. The extent of this risk is not quantifiable or predictable because of the variability of future interest rates and the Partnership's future financing requirements.
Note Payable: At September 30, 2001 the Partnership had a note payable outstanding in the amount of $28,919,278. Interest on this note is at a fixed annual rate of 6.37% through March 2009.
The Partnership does not enter into financial instruments transactions for trading or other speculative purposes or to manage its interest rate exposure.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Reports on Form 8-K
There were no reports filed on Form 8-K during
the three months ended September 30, 2001.
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 14, 2001