<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 September 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
September 30, 1996 (Unaudited) and
December 31, 1995 3
Statements of Income
Nine months ended September 30, 1996
and 1995 and Three months ended
September 30, 1996 and 1995 4
Statements of Cash Flows
Nine months ended September 30, 1996
and 1995 (Unaudited) 5
Notes to Financial Statements
September 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 10
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<PAGE> 3
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND,
A MICHIGAN LIMITED PARTNERSHIP
BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS September 30, 1996 December 31, 1995
------------------ -----------------
(Unaudited)
<S> <C> <C>
Properties:
Land $5,280,000 $5,280,000
Buildings And Improvements 22,122,120 22,087,145
Manufactured Homes 449,963 412,052
Furniture And Fixtures 92,826 98,320
------------------ -----------------
27,944,909 27,877,517
Less Accumulated
Depreciation 7,801,964 7,214,093
------------------ -----------------
20,142,945 20,663,424
Cash And Cash Equivalents 459,235 468,664
Other Assets 656,524 690,477
------------------ -----------------
Total Assets $21,258,704 $21,822,565
------------------ -----------------
<CAPTION>
LIABILITIES September 30, 1996 December 31, 1995
------------------ -----------------
(Unaudited)
<S> <C> <C>
Line of Credit $387,800 $343,210
Accounts Payable $96,042 $170,213
Other Liabilities 867,998 973,542
------------------ -----------------
Total Liabilities $1,351,840 $1,486,965
Partners' Equity:
General Partner (569,685) (603,574)
Class A Limited Partners 11,601,774 12,064,399
Class B Limited Partners 8,874,775 8,874,775
------------------ -----------------
Total Partners' Equity 19,906,864 20,335,600
------------------ -----------------
Total Liabilities And
Partners' Equity $21,258,704 $21,822,565
------------------ -----------------
</TABLE>
See Notes to Financial Statements
3
<PAGE> 4
STATEMENTS OF INCOME (Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED THREE MONTHS ENDED
Sept. 30, 1996 Sept. 30, 1995 Sept. 30, 1996 Sept. 30, 1995
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Income:
Rental Income $5,597,288 $5,383,858 $1,869,271 $1,799,089
Other 204,541 240,253 60,187 67,434
---------- ---------- ---------- ----------
Total Income $5,801,829 $5,624,111 $1,929,458 $1,866,523
Operating Expenses:
Administrative Expenses
(Including $288,915, $280,201, $96,019 And
$93,026 In Property Management Fees Paid
To An Affliate For The Nine and Three
Month Periods Ended Sept. 30, 1996 and
1995, Respectively) 1,199,577 1,226,072 373,512 416,554
Property Taxes 613,382 597,657 204,436 197,923
Utilities 361,837 340,828 115,523 104,293
Property Operations 767,899 655,114 300,816 251,081
Depreciation And Amortization 587,870 576,308 195,956 192,103
---------- ---------- ---------- ----------
Total Operating Expenses $3,530,565 $3,395,979 $1,190,243 $1,161,954
---------- ---------- ---------- ----------
Net Income $2,271,264 $2,228,132 $739,215 $704,569
---------- ---------- ---------- ----------
Income Per Limited Partnership Unit:
Class A $52.00 $52.00 $17.00 $17.00
Class B $75.00 $75.00 $25.00 $25.00
Distribution Per Limited Partnership Unit
Class A $75.00 $75.00 $25.00 $25.00
Class B $75.00 $75.00 $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
STATEMENTS OF CASH FLOWS (Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
Sept. 30, 1996 Sept. 30, 1995
-------------- --------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income (Loss) $2,271,264 $2,228,132
Adjustments To Reconcile Net Income
(Loss) To Net Cash Provided By
Operating Activities:
Depreciation 587,870 576,308
(Increase) Decrease In Other Assets From Operations 33,953 34,510
Increase (Decrease) In Accounts Payables (74,171) (16,746)
Increase (Decrease) Other Liabilities From
Operations (105,544) (41,737)
-------------- --------------
Total Adjustments 442,108 552,335
-------------- --------------
Net Cash Provided By (Used In)
Operating Activities 2,713,372 2,780,467
-------------- --------------
Cash Flows From Investing Activities:
Capital Expenditures (67,392) (176,388)
Funds From Line of Credit 44,590 0
-------------- --------------
Net Cash Provided By (Used In)
Investing Activities (22,802) (176,388)
-------------- --------------
Cash Flows From Financing Activities:
Distributions To Partners (2,700,000) (2,650,000)
-------------- --------------
Net Cash Provided By (Used In)
Financing Activities (2,700,000) (2,650,000)
-------------- --------------
Increase (Decrease) In Cash (9,430) (45,921)
Cash, Beginning 468,664 373,168
-------------- --------------
Cash, Ending $459,234 $327,247
-------------- --------------
</TABLE>
See Notes to Financial Statements
5
<PAGE> 6
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND,
A MICHIGAN LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
September 30, 1996 (Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Presentation:
The balance sheet as of September 30, 1996, the related statements of income
and statements of cash flow for the periods ended September 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>
NINE MONTHS ENDED THREE MONTHS ENDED
SEPT. 30, 1996 SEPT. 30, 1995 SEPT. 30, 1996 SEPT. 30, 1995
-------------- ---------------- -------------- --------------
<S> <C> <C> <C> <C>
PROPERTY MANAGEMENT FEE
TO UNIPROP, INC.: $288,915 $280,201 $96,019 $93,026
</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 its 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 September 30, 1996, the
outstanding balance on the line of credit was approximately $387,800.
During the quarters ended September 30, 1996 and 1995, cash generated by
operations was $935,171 and $896,672, respectively. The increase in cash flow
for the quarter was due to higher average occupancy and 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 September 30, 1996, the
Partnership added $35,171 to reserves. During the same quarter in 1995, the
Partnership added $46,672 to cash reserves. The amount placed in reserves is
at the discretion of the General Partner.
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<PAGE> 8
Results of Operations
Overall, as illustrated in the tables below, the four properties enjoyed a
combined average occupancy of 97.1% (1,771/1,824 sites) at the end of September
1996, versus 95.6% a year ago. The average monthly rent in September 1996 was
approximately $372, or 3.1% more than the $361 average monthly rent in
September 1995.
<TABLE>
<CAPTION>
Total Occupied Occupancy Average
Capacity Sites Rate Rent
<S> <C> <C> <C> <C>
Aztec Estates 645 610 94.6% $411
Kings Manor 314 303 96.5 388
Old Dutch Farms 293 288 98.3 379
Park of the Four Seasons 572 570 99.7 318
--- --- ----- ----
Total on 9/30/96: 1,824 1,771 97.1% $372
Total on 9/30/95: 1,824 1,743 95.6% $361
</TABLE>
During the third quarter of 1996, the Partnership generated gross revenues of
$1,929,458 or 3.4% more than the $1,866,523 generated in the third quarter of
1995. The net operating income before other non-recurring expenses and
Partnership administration was $1,055,866 or 54.7% of the total revenues,
versus $1,007,389 or 54.1% during the same period in 1995. For the quarter,
cash flow was $935,171, versus $896,672 reported in 1995.
<TABLE>
<CAPTION>
GROSS NET OPERATING
REVENUES INCOME
<S> <C> <C>
Aztec Estates $ 751,592 $383,887
Kings Manor 339,140 201,934
Old Dutch Farms 307,866 178,618
Park of the Four Seasons 527,262 291,428
Partnership Management: 3,598 (21,064)
Other Non Recurring expenses: ----- (99,631)
---------- --------
Total on 9/30/96: $1,929,458 $935,171
Total on 9/30/95: $1,866,523 $896,672
</TABLE>
The properties' operating expenses for the third 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 September 30, 1996
of 94.6% (610/645 sites), versus 96.3% as of September 30, 1995. The average
rent in the community as of September 30, 1996 was $411, versus $395, an
increase of 4.1% from the same period in 1995. For the third quarter of 1996,
the net operating income was $383,887, or 6.2% more than the $361,566 reported
for the same period in 1995. The increase in income is the result of higher
average rents.
Improvement and maintenance actions undertaken during the quarter focused on
roof repairs to the community center building, repairs to one of the
maintenance vehicles, and general clean up from the removal of older homes
throughout the community. Additionally, management replaced the HVAC units in
the pool room and the gate house.
KINGS MANOR, in Fort Lauderdale, Florida, reported an occupancy of 96.5%
(303/314 sites) on September 30, 1996, versus 98.7% as of September 30, 1995.
The average rent in the community as of September 30, 1996 was $388, versus
$372, an increase of 4.3% from the same period in 1995. For the third quarter
of 1996, the net operating income was $201,934, slightly more than the $201,310
reported during the same period in 1995.
Improvement and maintenance actions undertaken during the quarter involved
repairs to the older street lights throughout the community, renovations to the
community center building, and the replacement of electric pedestals on
homesites where new homes are being placed.
OLD DUTCH FARMS, in Novi Michigan, reported an occupancy of 98.3% (288/293
sites) on September 30, 1996, versus 96.9% as of September 30, 1995. The
average rent in the community as of September 30, 1996 was $379, versus $369,
an increase of 2.7% from the same period in 1995. For the third quarter of
1996, the net operating income was $178,618, slightly less than the $183,987
reported for the same period in 1995. The decline in income is due to higher
operating expenses.
Improvement and maintenance actions undertaken during the third quarter focused
on repainting the community center building and the mail boxes. Also completed
during the third quarter were minor repairs to the sewage treatment facility.
PARK OF THE FOUR SEASONS, in Blaine, Minnesota, reported an occupancy of 99.7%
(570/572 sites) on September 30, 1996 versus 92.3% as of September 30, 1995.
The average rent in the community as of September 30, 1996 was $318, versus
$311, an increase of 2.3% from the same period in 1995. For the third quarter
of 1996, the net operating income was $291,428, or 11.9% more than the
$260,526 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
repainting the maintenance garage and storm shelters, concrete work for new
homes moving into the community, and the asphalt resurfacing of several streets
within the community.
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<PAGE> 10
Due to the strong market demand for manufactured housing in the northern
suburbs of Minneapolis/St. Paul , 18 new residents' homes were moved into Park
of the Four Seasons during the third quarter of 1996. Since the first of the
year, occupancy at Park of the Four Seasons has increased a total of 48
homesites, or 7.2%. As a result of the large increase in new homes moving into
the community over the past nine months, the overall appearance of the
community has enhanced significantly. For the first time in ten years,
management has a waiting list of residents and home dealers who would like to
move into the community.
MANAGEMENT EXPENSES
Net Partnership management expenses paid during the quarter amounted to
$21,064. Gross expenses of $24,662 (data processing, accounting and legal
expenses, office supplies and wages to employees of the Partnership) were
partially offset by income of $3,598 generated by interest on the Partnership's
reserves and transfer fees. The figures for last year's third quarter were
$65,603, $69,071 and $3,468, 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 September 30, 1996.
-10-
<PAGE> 11
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: November 14, 1996
-11-
<PAGE> 12
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description Page
- -------- ----------- ----
<S> <C> <C>
27 Financial Data Schedule
</TABLE>
-12-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 459,235
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,115,759
<PP&E> 27,944,909
<DEPRECIATION> 7,801,964
<TOTAL-ASSETS> 21,258,704
<CURRENT-LIABILITIES> 1,351,840
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 19,906,864
<TOTAL-LIABILITY-AND-EQUITY> 21,258,704
<SALES> 0
<TOTAL-REVENUES> 5,801,829
<CGS> 0
<TOTAL-COSTS> 2,942,695
<OTHER-EXPENSES> 587,870
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,271,264
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,271,264
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,271,264
<EPS-PRIMARY> 52.00<F1>
<EPS-DILUTED> 75.00<F1>
<FN>
<F1>IN THIS RELP THERE ARE TWO CLASSES OF LP UNITS, EPS PRIMARY IS INCOME PER CLASS
A LP UNIT, EPS DILUTED IS INCOME PER CLASS B LP UNIT
</FN>
</TABLE>
