<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 30, 1996 Commission File No. 0-15940
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND,
a Michigan Limited Partnership
(Exact name of registrant as specified in its charter)
MICHIGAN 38-2593067
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
280 DAINES STREET, BIRMINGHAM, MICHIGAN 48009
(Address of principal executive offices) (Zip Code)
(810) 645-9261
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(g) of the Act:
$1,000 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 [ ]
<PAGE> 2
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND,
A MICHIGAN LIMITED PARTNERSHIP
INDEX
Page
----
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Balance Sheets
June 30, 1996 (Unaudited) and
December 31, 1995 3
Statements of Income
Six months ended June 30, 1996
and 1995 and Three monds ended
June 30, 1996 and 1995 4
Statements of Cash Flows
Six months ended June 30, 1996
and 1995 (Unaudited) 5
Notes to Financial Statements
June 30, 1996 (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 11
-2-
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND,
A MICHIGAN LIMITED PARTNERSHIP
BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS JUNE 30, 1996 DECEMBER 31, 1995
(UNAUDITED)
<S> <C> <C>
Properties:
Land $ 5,280,000 $ 5,280,000
Buildings And Improvements 22,116,876 22,087,145
Manufactured Homes 393,620 412,052
Furniture And Fixtures 95,326 98,320
------------- ------------
27,885,822 27,877,517
Less Accumulated Depreciation 7,606,007 7,214,093
------------- ------------
20,279,815 20,663,424
Cash And Cash Equivalents 656,393 468,664
Other Assets 662,281 690,477
------------- ------------
Total Assets $ 21,598,489 $ 21,822,565
------------- ------------
LIABILITIES JUNE 30, 1996 DECEMBER 31, 1995
(UNAUDITED)
Line of Credit $ 600,000 $ 343,210
Accounts Payable 160,350 $ 170,213
Other Liabilities 770,490 973,542
------------- ------------
Total Liablities $ 1,530,840 $ 1,486,965
Partners' Equity
General Partner (565,973) (603,574)
Class A Limited Partners 11,758,847 12,064,399
Class B Limited Partners 8,874,775 8,874,775
------------- ------------
Total Partners' Equity 20,067,649 20,335,600
------------- ------------
Total Liabilities And
Partners' Equity $ 21,598,489 $ 21,822,565
------------- ------------
</TABLE>
See Notes to Financial Statements
3
<PAGE> 4
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND,
A MICHIGAN LIMITED PARTNERSHIP
STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30, 1996 JUNE 30, 1995 JUNE 30, 1996 JUNE 30, 1995
<S> <C> <C> <C> <C>
Income:
Rental Income $ 3,728,017 $ 3,584,769 $ 1,852,392 $ 1,797,315
Other 144,354 172,819 58,177 84,840
----------- ----------- ------------ -----------
Total Income $ 3,872,371 $ 3,757,588 $ 1,910,569 $ 1,882,155
----------- ----------- ------------ -----------
Operating Expenses:
Administrative Expenses
(Including $192,896, 187,175, 97,708 And
93,365 In Property Management Fees Paid
To An Affliate For The Six and Three Month
Periods Ended June 30, 1996 and
1995, Respectively) 826,065 809,518 403,473 417,081
Property Taxes 408,946 399,734 204,778 202,376
Utilities 246,314 236,535 116,585 109,502
Property Operations 467,083 404,033 247,030 223,356
Depreciation And Amortization 391,914 384,205 195,957 192,103
----------- ----------- ------------ -----------
Total Operating Expenses $ 2,340,322 $ 2,234,025 $ 1,167,823 $ 1,144,418
----------- ----------- ------------ -----------
Net Income $ 1,532,049 $ 1,523,563 $ 742,746 $ 737,737
----------- ----------- ------------ -----------
Income Per Limited Partnership Unit:
Class A $ 35.00 $ 35.00 $ 17.00 $ 17.00
Class B $ 50.00 $ 50.00 $ 25.00 $ 25.00
Distribution Per Limited Partnership Unit
Class A $ 50.00 $ 50.00 $ 25.00 $ 25.00
Class B $ 50.00 $ 50.00 $ 25.00 $ 25.00
Weighted Average Number Of Limited
Partnership Units Outstanding
Class A 20,230 20,230 20,230 20,230
Class B 9,770 9,770 9,770 9,770
</TABLE>
See Notes to Financial Statements
4
<PAGE> 5
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND,
A MICHIGAN LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1996 JUNE 30, 1995
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income (Loss) $ 1,532,049 $ 1,523,563
Adjustments To Reconcile Net Income
(Loss) To Net Cash Provided By
Operating Activities:
Depreciation 391,914 384,205
(Increase) Decrease In Other Assets From
Operations 28,196 35,912
Increase (Decrease) In Accounts Payables (9,863) 25,469
Increase (Decrease) Other Liabilities
From Operations (203,052) (211,823)
----------- -----------
Total Adjustments 207,195 233,763
----------- -----------
Net Cash Provided By (Used In)
Operating Activities 1,739,244 1,757,326
----------- -----------
Cash Flows From Investing Activities:
Capital Expenditures (8,305) (65,055)
Funds From Line of Credit 256,790
----------- -----------
Net Cash Provided By (Used In)
Investing Activities 248,485 (65,055)
----------- -----------
Cash Flows From Financing Activities:
Distributions To Partners (1,800,000) (1,800,000)
----------- -----------
Net Cash Provided By (Used In)
Financing Activities (1,800,000) (1,800,000)
----------- -----------
Increase (Decrease) In Cash 187,729 (107,729)
Cash, Beginning 468,664 373,168
----------- -----------
Cash, Ending $ 656,393 $ 265,439
----------- -----------
</TABLE>
See Notes to Financial Statements
5
<PAGE> 6
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND,
A MICHIGAN LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
June 30, 1996 (Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Presentation:
The balance sheet as of June 30, 1996, the related statements of income and
statements of cash flow for the periods ended June 30, 1996 and 1995 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:
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30, 1996 JUNE 30, 1995 JUNE 30, 1996 JUNE 30, 1995
------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
PROPERTY MANAGEMENT FEE
TO UNIPROP, INC.: $192,896 $187,175 $97,708 $93,365
</TABLE>
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<PAGE> 7
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Capital Resources
The Partnership's capital resources consist primarily of its four manufactured
housing communities. There have been no significant capital transactions
during the quarter reported.
Liquidity
Partnership liquidity is based upon its investment strategy. The properties
owned by the Partnership were anticipated to be held for seven to ten years
after their acquisition, although properties may be disposed of later, if, in
the opinion of the General Partner, it is in the best interest of the
Partnership to do so.
On May 1, 1996, the Partnership increased it's existing line of credit with
Comerica Bank from $400,000 to $600,000. Proceeds from the line of credit are
being used to purchase new or used manufactured homes for sale or lease in the
communities owned by the Partnership. As of June 30, 1996, the outstanding
balance on the line of credit was approximately $600,000.
During the quarters ended June 30, 1996 and 1995, cash generated by operations
was $938,703 and $929,840, respectively. The increase in cash flow for the
quarter was due to higher average rents. This amount of cash flow provided
sufficient funds to distribute $750,000 to the Limited Partners subsequent to
the end of the quarter, providing the Limited Partners with their annualized
10% preferred return. The General Partner will receive a distribution of
$150,000 from cash generated by operations. For the same quarter in 1995, the
General Partner received $100,000.
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. For the quarter ended June 30, 1996, the
Partnership added $38,703 to reserves. During the same quarter in 1995, the
Partnership added $79,840 to cash reserves. The amount placed in reserves is
at the discretion of the General Partner.
-7-
<PAGE> 8
Results of Operations
Overall, as illustrated in the tables below, the four properties enjoyed a
combined average occupancy of 96.2% (1,754/1,824 sites) at the end of June
1996, versus 94.8% a year ago. The average monthly rent in June 1996 was
approximately $371, or 3.3% more than the $359 average monthly rent in June
1995.
<TABLE>
<CAPTION>
Total Occupied Occupancy Average
Capacity Sites Rate Rent
<S> <C> <C> <C> <C>
Aztec Estates 645 609 94.4% $ 411
Kings Manor 314 299 95.2 388
Old Dutch Farms 293 289 98.6 376
Park of the Four Seasons 572 557 97.4 316
--- --- ---- -----
Total on 6/30/96: 1,824 1,754 96.2% $ 371
Total on 6/30/95: 1,824 1,729 94.8% $ 359
</TABLE>
During the second quarter of 1996, the Partnership generated gross revenues of
$1,910,569 or 1.5% more than the $1,882,155 generated in the second quarter of
1995. The net operating income before other non-recurring expenses and
Partnership administration was $1,119,913 or 58.7% of the total revenues,
versus $994,621 or 52.8% during the same period in 1995. For the quarter, cash
flow was $938,703, versus $929,840 reported in 1995.
<TABLE>
<CAPTION>
GROSS NET OPERATING
REVENUES INCOME
<S> <C> <C>
Aztec Estates $ 734,761 $ 380,872
Kings Manor 338,215 215,507
Old Dutch Farms 309,749 198,367
Park of the Four Seasons 525,847 325,166
Partnership Management: 1,997 (111,847)
Other Non Recurring expenses: ----- (69,362)
----------- ---------
Total on 6/30/96: $ 1,910,569 $ 938,703
Total on 6/30/95: $ 1,882,155 $ 929,840
</TABLE>
The properties operating expenses for the second quarter of 1996, compared to
the same period in 1995, reflect slight increases in wages, marketing expenses,
taxes and legal/professional fees.
-8-
<PAGE> 9
AZTEC ESTATES, in Margate, Florida, reported an occupancy on June 30, 1996 of
94.4% (609/645 sites), versus 96.7% as of June 30, 1995. The average rent in
the community as of June 30, 1996 was $411, versus $395, an increase of 4.1%
from the same period in 1995. For the second quarter of 1996, the net
operating income was $380,872, or 17.0% less than the $445,840 reported for the
same period in 1995. The decline in income is the result of lower occupancy and
higher marketing expenses associated with the model home sales program.
Improvement and maintenance actions undertaken during the quarter focused on
moving several older homes out of the community. Management feels it is
necessary to move the older homes out in order to make room for new residents
and upgrade the overall tenant profile of the community. Also completed
during the second quarter were roof repairs and renovations to the community
center building. Additionally, in an effort to enhance the community, a new
wood border was placed around the playground area and new pool furniture was
purchased.
Management reported that sales traffic at the model home sales center has been
strong. During the second quarter there were five new home sales, seven
pre-owned home sales, and 18 customer resales within the community.
KINGS MANOR, in Fort Lauderdale, Florida, reported an occupancy of 95.2%
(299/314 sites) on June 30, 1996, versus 97.5% as of June 30, 1995. The
average rent in the community as of June 30, 1996 was $388, versus $372, an
increase of 4.3% from the same period in 1995. For the second quarter of 1996,
the net operating income was $215,507 or 3.3% more than the $208,582 reported
during the same period in 1995.
Improvement and maintenance actions undertaken during the quarter involved the
seal-coating of residents' driveways within the community, the removal of
trees to make room for multi-section homes, and repairs to directional signs
throughout the community. Also completed during the quarter was the
replacement of all chairs and tables at the pool area.
Management reported that four new residents' homes were moved into the
community during the second quarter. One new model home is now set-up and on
display within the community. Rent incentives have been enhanced for new
residents moving into the community during the next three months.
Additionally, new advertising has been placed in local papers to increase sales
of pre-owned homes.
According to the Broward County Economic Development Council, approximately 121
companies will be opening or relocating to the area during 1996. American
Express has plans to open a new 41,000 square foot facility in the area within
the next few months. The Broward County Economic Development Council
anticipates approximately 300 new employment opportunities to be created during
1996. Currently, the unemployment rate in Broward County is 4.9%.
-9-
<PAGE> 10
OLD DUTCH FARMS, in Novi Michigan, reported an occupancy of 98.6% (289/293
sites) on June 30, 1996, versus 96.6% as of June 30, 1995. The average rent in
the community as of June 30, 1996 was $376, versus $365, an increase of 3.0%
from the same period in 1995. For the second quarter of 1996, the net
operating income was $198,367 or 4.7% more than the $189,377 reported for the
same period in 1995. The increase in income is due to higher occupancy and
higher average monthly rent.
Improvement and maintenance actions undertaken during the quarter involved the
installation of concrete piers for the new homes that were moved into the
community, replacement of old street lights within the community, and minor
street repairs.
Current marketing programs have been effective in maintaining stable occupancy.
Management reported five homes were moved into the community during the second
quarter, and five homes were moved out. The manufactured home market in the
area is strong with occupancy rates ranging between 97.0% and 100.0%. However,
management is reporting that demand is becoming greater for the larger
multi-sectional homesites. Old Dutch Farms has no larger sites available and
will have to continue to offer incentives to fill the remaining smaller
homesites.
PARK OF THE FOUR SEASONS, in Blaine, Minnesota, reported an occupancy of 97.4%
(557/572 sites) on June 30, 1996 versus 90.2% as of June 30, 1995. The average
rent in the community as of June 30, 1996 was $316, versus $309, an increase
of 2.3% from the same period in 1995. For the second quarter of 1996, the net
operating income was $325,166, 20.6% more than the $269,562 reported for the
same period in 1995. The increase in income is due to higher occupancy and
higher average monthly rent.
Improvement and maintenance actions during the quarter involved repairs to
several community-owned homes, concrete work for new homes being moved into the
community, and the installation of new landscaping around the community center
building.
As a result of the improving housing market in the northern suburbs of
Minneapolis/St. Paul and enhanced marketing incentives, 17 new residents' homes
were moved into Park of the Four Seasons during the second quarter of 1996.
Since the second quarter of 1995, occupancy has increased a total of 41
homesites. As a result of the large increase in the number of new homes being
moved into the community over the past year, the overall appearance of the
community has significantly improved. In fact, entire streets within the
community have all new homes and residents. Management believes that if the
market continues to remain strong, occupancy could reach 99.0% by year end.
-10-
<PAGE> 11
MANAGEMENT EXPENSES
Net Partnership management expenses paid during the quarter amounted to
$111,847. Gross expenses of $113,844 (data processing, accounting and legal
expenses, office supplies and wages to employees of the Partnership) were
partially offset by income of $1,997 generated by interest on the Partnership's
reserves and transfer fees. The figures for last year's second quarter were
$118,740, $121,411 and $2,671, respectively.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS OF FORM 8-K
(a) Exhibits
Exhibit Number Description
-------------- -----------
27 Financial Data Schedule
(b) Reports of Form 8-K
There were no reports filed on Form 8-K during
the three months ended June 30, 1996.
SIGNATURES
Pursuant to the requirements of the Securities and 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: August 14, 1996
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<PAGE> 12
EXHIBIT INDEX
Exhibit
No. Description Page
- -------- ----------- ----
27 Financial Data Schedule
-12-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
5-03(b)(20) EPS Primary - In this RELP there are two classes of Limited
Partnership units. EPS Primary is income per Class A Limited Partnership unit.
EPS Diluted is income per Class B Limited Partnership unit.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-1-1996
<PERIOD-END> JUN-30-1996
<CASH> 656,393
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,318,674
<PP&E> 27,885,822
<DEPRECIATION> 7,606,007
<TOTAL-ASSETS> 21,598,489
<CURRENT-LIABILITIES> 1,530,840
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 20,067,649
<TOTAL-LIABILITY-AND-EQUITY> 21,598,489
<SALES> 0
<TOTAL-REVENUES> 3,872,371
<CGS> 0
<TOTAL-COSTS> 1,948,408
<OTHER-EXPENSES> 391,914
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,532,049
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,532,049
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,532,049
<EPS-PRIMARY> 35
<EPS-DILUTED> 50
</TABLE>
