| 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.
Page
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
| Balance Sheets | |||
| March 31, 2002 (Unaudited) and | |||
| December 31, 2001 | 3 | ||
| Statements of Income | |||
| Three months ended March 31, 2002 | |||
| and 2001 (Unaudited) | 4 | ||
| Statement of Partners' Equity | |||
| Three months ended March 31, 2002(Unaudited) | 4 | ||
| Statements of Cash Flows | |||
| Three months ended March 31, 2002 | |||
| and 2001(Unaudited) | 5 | ||
| Notes to Financial Statements | |||
| March 31, 2002(Unaudited) | 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
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 10
1. Basis of Presentation:
The accompanying unaudited 2002 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, 2001 has been derived from the
audited financial statements at that date. Operating results for the three months ended March 31, 2002
are not necessarily indicative of the results that may be expected for the year ending December 31, 2002,
or for any other interim period. For further information, refer to the consolidated financial statements
and footnotes thereto included in the Partnership's Form 10-K for the year ending December 31, 2001.
2. Reclassifications::
Certain prior year amounts have been reclassified in the financial statements to conform with current
year presentation with respect to manufactured homes and the sales of those homes. As of result, total
revenue and total operating expenses in the statement of income for the quarter ended March 31, 2001
increased by $151,000; net income was not affected by the reclassification.
ITEM 2.
Capital Resources
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").
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. Upon acquisition, the Partnership
anticipated owning the properties for seven to ten years. All of the properties have been owned by the
Partnership for more than ten years. 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 $934,129 and $1,106,905 for the quarters ended March 31, 2002
and 2001, respectively. Distributable Cash from Operations is defined as 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 nor as an alternative to cash flow as a
measure of liquidity. From Distributable Cash from Operations the General Partner has decided to
distribute $759,779, or $.23 per unit, to the unit holders on May 15, 2002. The General Partner will
continue to monitor cash flow generated by the Partnership's nine properties during the coming quarters.
If cash flow generated is greater or lesser 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 March 31, 2002,
the Partnership's cash reserves amounted to $3,664,939.
Once the distribution is paid to unit holders, the cash reserve amount will be approximately $2,905,160.
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 combined
occupancy of 88% (2,925/3,330 sites) at the end of March 2002, versus 92% (3,065/3,330) for March 2001.
The average monthly homesite rent as of March 31, 2001 was approximately $376, versus $363, an increase
of 4% from March 2001.
| Total Capacity | Occupied Sites | Occupancy Rate | Average Rent* Ardmor Village | 339 | 331 | 98% | $361
| Camelot Manor | 335 | 290 | 87% | 356
| Country Roads | 312 | 266 | 86% | 251
| Dutch Hills | 278 | 263 | 95% | 354
| El Adobe | 371 | 290 | 79% | 423
| Paradise Village | 611 | 421 | 69% | 315
| Stonegate Manor | 308 | 262 | 85% | 359
| Sunshine Village | 356 | 332 | 93% | 477
| West Valley | 421 | 470 | 88% | 489
| Total on 3/31/02: | 3,330 | 2,925 | 88% | $376*
| Total on 3/31/01: | 3,330 | 3,065 | 92% | $363
| |
Gross Revenues Net Income
3/31/02 3/31/01 3/31/02 3/31/01
Ardmor Village $357,087 $ 374,359 $178,191 $209,690
Camelot Manor 356,513 324,099 152,390 171,331
Country Roads 205,559 198,804 71,969 43,197
Dutch Hills 273,421 275,742 143,786 132,831
El Adobe 379,877 426,179 206,647 258,559
Paradise Village 432,475 454,826 108,916 137,000
Stonegate Manor 277,999 302,723 135,209 160,849
Sunshine Village 498,483 439,626 268,572 237,941
West Valley 528,145 616,415 299,101 391,834
3,309,559 3,412,773 1,564,781 1,743,232
Partnership Management: 9,174 30,274 (114,096) (66,215)
Other Non Recurring expenses: ---- ---- (58,510) (103,302)
Debt Service (458,046) (466,810)
Depreciation and Amortization ---- ---- (431,227) (450,237)
$3,318,733 $3,443,047 $502,902 $656,668
Comparison of Quarter Ended March 31, 2002 to Quarter Ended March 31, 2001
Gross revenues decreased $124,314 to $3,318,733 in 2002, as compared to $3,443,047 in 2001. The decrease
was the result of the decrease in site rentals and decreased "other income" due to reduced ancillary
income from a variety of sources such as late charges, miscellaneous income, and others.
(See table on previous page.)
As described in the Statements of Income, total operating expenses increased only $29,452, or 1.1%, to
$2,815,831 in 2002, as compared to $2,786,379 in 2001.
As a result of the aforementioned factors, Net Income decreased to $502,902 for the first quarter of 2002
compared to $656,668 for the first quarter of 2001, a 23% decrease due to the decrease in revenue
described above.
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 March 31, 2002 the Partnership had a note payable outstanding in the amount of $28,709,573. 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 March 31, 2002.
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: May 15, 2002