<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 March 31, 1997 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
March 31, 1997 (Unaudited) and
December 31, 1996 3
Statements of Income
Three months ended March 31, 1997
and 1996 4
Statements of Cash Flows
Three months ended March 31, 1997
and 1996 (Unaudited) 5
Notes to Financial Statements
March 31, 1997 (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-
<PAGE> 3
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND,
A MICHIGAN LIMITED PARTNERSHIP
BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS MARCH 31, 1997 DECEMBER 31, 1996
-------------- -----------------
(UNAUDITED)
<S> <C> <C>
Properties:
Land $ 5,280,000 $ 5,280,000
Buildings And Improvements 22,154,158 22,128,664
Manufactured Homes 113,864 101,700
Furniture And Fixtures 552,869 538,914
------------ --------------
28,100,891 28,049,278
Less Accumulated Depreciation 8,185,751 7,989,565
------------ --------------
19,915,140 20,059,713
Cash And Cash Equivalents 2,415,103 640,086
Other Assets 1,723,906 607,756
------------ --------------
Total Assets $ 24,054,149 $ 21,307,555
------------ --------------
LIABILITIES MARCH 31, 1997 DECEMBER 31, 1996
-------------- -----------------
(UNAUDITED)
Line of Credit $ 600,000 $ 495,300
Accounts Payable 42,419 110,583
Mortgage Payable (3) 33,500,000 0
Other Liabilities 705,782 991,619
------------ --------------
Total Liablities $ 34,848,201 $ 1,597,502
Partners' Equity:
General Partner (966,443) (602,862)
Class A Limited Partners (8,932,384) 11,438,140
Class B Limited Partners (895,225) 8,874,775
------------ --------------
Total Partners' Equity (10,794,052) 19,710,053
------------ --------------
Total Liabilities And
Partners' Equity $ 24,054,149 $ 21,307,555
------------ --------------
</TABLE>
See Notes to Financial Statements
3
<PAGE> 4
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND
A MICHIGAN LIMITED PARTNERSHIP
<TABLE>
<CAPTION>
STATEMENTS OF INCOME THREE MONTHS ENDED
(unaudited) March 31, 1997 March 31, 1996
-------------- --------------
<S> <C> <C>
Income:
Rental Income $ 1,937,285 $ 1,875,625
Other 70,669 86,177
-------------- --------------
Total Income $ 2,007,954 $ 1,961,802
-------------- --------------
Operating Expenses:
Administrative Expenses
(Including $99,694 and $97,708
In Property Management Fees Paid
To An Affliate For The Three Month
Periods Ended March 31, 1997 and
1996, Respectively) 432,153 422,592
Property Taxes 211,145 204,168
Utilities 111,205 129,729
Property Operations 206,370 220,053
Depreciation And Amortization 196,186 195,957
-------------- --------------
Total Operating Expenses $ 1,157,059 $ 1,172,499
-------------- --------------
Net Income $ 850,895 $ 789,303
-------------- --------------
Income Per Limited Partnership Unit:
Class A $ 18.00 $ 18.00
Class B $ 25.00 $ 25.00
Distribution Per Limited Partnership Unit
Class A $ 1,025.00 $ 25.00
Class B $ 1,025.00 $ 25.00
Weighted Average Number Of Limited
Partnership Units Outstanding
Class A 20,230 20,230
Class B 9,770 9,770
</TABLE>
See Notes to Financial Statements
4
<PAGE> 5
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND
A MICHIGAN LIMITED PARTNERSHIP
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
(unaudited)
THREE MONTHS ENDED
March 31, 1997 March 31, 1996
-------------- --------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income (Loss) $ 850,895 $ 789,303
Adjustments To Reconcile Net Income
(Loss) To Net Cash Provided By
Operating Activities:
Depreciation 196,186 195,957
(Increase) Decrease In Other Assets From Operations (1,116,150) 30,118
Increase (Decrease) In Accounts Payables (68,164) (15,520)
Increase (Decrease) Other Liabilities From Operations (285,837) (312,400)
-------------- --------------
Total Adjustments (1,273,965) (101,845)
-------------- --------------
Net Cash Provided By (Used In)
Operating Activities (423,070) 687,458
-------------- --------------
Cash Flows From Investing Activities:
Capital Expenditures (51,613) (6,612)
Funds From Line of Credit 104,700 0
-------------- --------------
Net Cash Provided By (Used In)
Investing Activities 53,087 (6,612)
-------------- --------------
Cash Flows From Financing Activities:
Funds from Mortgage 33,500,000
Distributions To Partners (1,355,000) (750,000)
Return of Capital (30,000,000) 0
-------------- --------------
Net Cash Provided By (Used In)
Financing Activities 2,145,000 (750,000)
-------------- --------------
Increase (Decrease) In Cash 1,775,017 (69,154)
Cash, Beginning 640,086 468,664
-------------- --------------
Cash, Ending $ 2,415,103 $ 399,510
-------------- --------------
</TABLE>
See Notes to Financial Statements
5
<PAGE> 6
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND,
A MICHIGAN LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
March 31, 1997 (Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Presentation:
The balance sheet as of March 31, 1997, the related statements of income and
statements of cash flow for the periods ended March 31, 1997 and 1996 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>
THREE MONTHS ENDED
MARCH 31, 1997 MARCH 31, 1996
-------------- --------------
<S> <C> <C>
PROPERTY MANAGEMENT FEE
TO UNIPROP, INC.: $ 99,694 $ 97,708
</TABLE>
3. MORTGAGE FINANCING
On March 25, 1997, the Partnership placed mortgages on its four properties.
The Partnership borrowed $33,500,000 from Nomura Asset Capital Corporation.
The interest rate on the financing is 8.24% and the term is 120 months. The
loan is amortized over 360 months. There is no prepayment allowed. The
monthly payment will be approximately $251,439 and will begin in May 1997. As
a result of the financing, on March 26, 1997, the Partnership distributed
$30,000,000 to the Limited Partners, which represents a full return of the
original capital contribution of $1,000 per unit held.
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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. On March 25, 1997 the Partnership borrowed $33,500,000
from Nomura Asset Capital Corporation (the "Nomura Financing"), as described in
Note 3 to Financial Statements. It secured the Nomura Financing by placing
liens on its four communities. Resulting from the Nomura Financing, as
contemplated in the Proxy Statement, dated December 4, 1996, the Partnership
distributed $30,000,000 to the Limited Partners, which represents a full return
of the original capital contributions of $1,000 per unit.
Liquidity
- ---------
As a result of the March 1997 mortgage financing, the Partnership's four
properties are mortgaged. At the time of the mortgage financing, the aggregate
principal amounts due under the four mortgage notes was $33,500,000 and the
aggregate fair market value of the Partnership's mortgaged properties was
$53,200,000. The Partnership expects to meet its short-term liquidity needs
generally through its working capital provided by operating activities.
The Partnership's long-term liquidity is based, in part, upon its investment
strategy. The properties owned by the Partnership were anticipated to be held
for seven to ten years after their acquisition. All of the properties have
been owned by the Partnership at least seven years. The General Partner may
elect to have the Partnership own the properties for longer than ten years, if,
in the opinion of the General Partner, it is in the best interest of the
Partnership to do so.
On August 24, 1994, the Partnership obtained a $200,000 line of credit with
Comerica Bank to establish an inventory of new and used manufactured homes.
The inventory of homes purchased with the Comerica line are set-up as "model
homes" and are sold to retail customers through a licensed affiliate, Uniprop
Homes. Over the last two years, sales of the new and used model homes have
been growing and maintaining sufficient inventory has been a problem. As a
result, in 1995, the line was increased to $400,000 and in 1996, the line was
further increased to $600,000. The net advances from the line of credit have
been $105,000 during the first quarter of 1997, $152,000 in 1996, $208,000 in
1995, and $135,000 in 1994. As of March 31, 1997, the outstanding balance on
the line of credit was $600,000. Increases in the line were necessary to
provide a sufficient inventory of model homes in the communities owned by the
Partnership. The General Partner believes that the model home sales program is
in the best interest of the Partnership.
-7-
<PAGE> 8
During the quarters ended March 31, 1997 and 1996, cash generated by operations
was $1,047,081 and $985,260 respectively. The cash flow generated during the
first quarter 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. Consequently, the cash available
after the preferred return to the Limited Partners amounts to $348,681 and
$150,000 will be distributed to the General Partner for the quarter ended March
31, 1997. For the same quarter in 1996, the General Partner received $200,000.
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 March 31, 1997, the
Partnership added $198,681 to reserves. During the same quarter in 1996, the
Partnership added $35,260 to cash reserves. The amount placed in reserves is
at the discretion of the General Partner.
Results of Operations
- ---------------------
OVERALL, as illustrated in the tables below, the four properties enjoyed a
combined average occupancy of 97.4% (1,777/1,824 sites) at the end of March
1997, versus 95.9% a year ago. The average monthly rent in March 1997 was
approximately $382, or 3.2% more than the $370 average monthly rent in March
1996.
<TABLE>
<CAPTION>
Total Occupied Occupancy Average
Capacity Sites Rate Rent
<S> <C> <C> <C> <C>
Aztec Estates 645 613 95.0% $ 427
Kings Manor 314 301 95.9 404
Old Dutch Farms 293 292 99.7 384
Park of the Four Seasons 572 571 99.8 322
------ ----- ----- -------
Total on 3/31/97: 1,824 1,777 97.4% $ 382
Total on 3/31/96: 1,824 1,749 95.9% $ 370
</TABLE>
During the first quarter of 1997, the Partnership generated gross revenues of
$2,007,954 or 2.4% more than the $1,961,802 generated in the first quarter of
1996. The net operating income before other non-recurring expenses and
Partnership administration was $1,082,551 or 59.2% of the total revenues,
versus $1,113,377 or 56.7% during the same period in 1996. For the quarter,
cash flow was $1,047,081, or 6.3% more than the $985,260 reported in the first
quarter of 1996.
-8-
<PAGE> 9
<TABLE>
<CAPTION>
GROSS NET OPERATING
REVENUES INCOME
<S> <C> <C>
Aztec Estates $ 784,746 $ 426,951
Kings Manor 342,139 214,760
Old Dutch Farms 315,840 205,820
Park of the Four Seasons 554,821 335,020
Partnership Management: 10,408 (95,167)
Other Non-Recurring expenses: (40,303)
---------- ----------
Total on 3/31/97: $2,007,954 $1,047,081
Total on 3/31/96: $1,961,802 $ 985,260
</TABLE>
The properties operating expenses for the first quarter of 1997, compared to
the same period in 1996, reflect slight increases in wages, marketing expenses,
taxes and legal/professional fees.
AZTEC ESTATES, in Margate, Florida, reported an occupancy on March 31, 1997 of
95.0% (613/645 sites), versus 95.8% as of March 31, 1996. The average rent in
the community as of March 31, 1997 was $427, versus $411, an increase of 3.9%
from the same period in 1996. A $16 rent increase went into effect for all
residents in January. For the first quarter of 1997, the net operating income
was $426,951, or 4.3% more than the $409,510 reported for the same period in
1996. The increase in first quarter net operating income from 1996 to 1997
is the result of lower operating expenses.
Improvement and maintenance actions undertaken during the quarter involved
repairs to the roof on the community center building, the purchase and removal
of several older homes in the community, and the on-going upgrading of old
electric pedestals throughout the community. Management has budgeted
approximately $119,000 in capital improvements at Aztec Estates during 1997.
The most significant items budgeted are $21,000 for a new roof on the community
center building, $13,500 for new landscaping at the property entrance, and
$13,000 for upgrading electric pedestals throughout the community.
KINGS MANOR, in Fort Lauderdale, Florida, reported an occupancy of 95.9%
(301/314 sites) on March 31, 1997, versus 95.2% as of March 31, 1996. The
average rent in the community as of March 31, 1997 was $404, versus $388, an
increase of 4.1% from the same period in 1996. A $16 rent increase went into
effect for all residents in February. For the first quarter of 1997, the net
operating income was $214,760 slightly more than the $212,845 reported during
the same period in 1996.
Improvement and maintenance actions undertaken during the quarter involved
painting the exterior stone wall surrounding the community, the replacement of
sewer lines at five home sites, and repairs to the chlorinator on the
community's pool. Management has budgeted approximately $64,000 in capital
improvements for Kings Manor during 1997.
-9-
<PAGE> 10
The significant items budgeted are $21,000 for new street lights throughout the
community and $9,000 for upgrading old electric pedestals.
OLD DUTCH FARMS, in Novi, Michigan, reported an occupancy of 99.7% (292/293
sites) on March 31, 1997, versus 98.6% as of March 31, 1996. The average rent
in the community as of March 31, 1997 was $384, versus $373, an increase of
3.0% from the same period in 1996. For the first quarter of 1997, the net
operating income was $205,820 or 6.7% more than the $192,947 reported for the
same period in 1996. The higher income is due primarily to the higher
occupancy.
Improvement and maintenance actions undertaken during the quarter focused on
repairs to the community sewage treatment plant. Also completed during the
quarter were minor road repairs. Management has budgeted approximately $64,000
in capital improvements for Old Dutch Farms during 1997. The significant items
budgeted are $17,500 for the purchase of a new maintenance truck, $12,000 for
road repairs, and $12,000 for new playground equipment.
PARK OF THE FOUR SEASONS, in Blaine, Minnesota, reported an occupancy of 99.8%
(571/572 sites) on March 31, 1997 versus 94.9% as of March 31, 1996. The
average rent in the community as of March 31, 1997 was $322, versus $315, an
increase of 2.2% from the same period in 1996. For the first quarter of 1997,
the net operating income was $335,020 or 12.4% more than the $298,075 reported
for the same period in 1996. The significant increase in net income is the
result of higher average occupancy at the property.
Improvement and maintenance actions during the quarter involved minor repairs
to the community pool and site upgrades for new resident homes being moved into
the community. Management has budgeted approximately $91,000 in capital
improvements for Park of the Four Seasons during 1997. The primary items
budgeted are $50,000 for road repairs and $12,000 for new playground equipment.
MANAGEMENT EXPENSES
- -------------------
Net Partnership management expenses paid during the quarter amounted to
$95,167. Gross expenses of $105,575 (data processing, accounting and legal
expenses, office supplies and wages to employees of the Partnership) were
partially offset by income of $10,408 generated by interest on the
Partnership's reserves and transfer fees. The figures for last year's first
quarter were $88,172, $91,816 and $3,644, respectively.
-10-
<PAGE> 11
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 March 31, 1997.
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: May 15, 1997
-11-
<PAGE> 12
EXHIBIT INDEX
-------------
EXHIBIT NUMBER DESCRIPTION PAGE
- -------------- ----------- ----
27 Financial Data Schedule
-12-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 2,415,103
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,139,009
<PP&E> 28,100,891
<DEPRECIATION> 8,185,751
<TOTAL-ASSETS> 24,054,149
<CURRENT-LIABILITIES> 34,848,201
<BONDS> 33,500,000
0
0
<COMMON> 0
<OTHER-SE> (10,794,052)
<TOTAL-LIABILITY-AND-EQUITY> 24,054,149
<SALES> 0
<TOTAL-REVENUES> 2,007,954
<CGS> 0
<TOTAL-COSTS> 960,873
<OTHER-EXPENSES> 196,186
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 850,895
<INCOME-TAX> 0
<INCOME-CONTINUING> 850,895
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 850,895
<EPS-PRIMARY> 18. <F1>
<EPS-DILUTED> 25. <F1>
<FN>
<F1> IN THIS RELP THERE ARE TWO CLASSES OF LP UNIT
EPS PRIMARY - INCOME PER CLASS A LP UNIT
EPS - DILUTED - INCOME PER CLASS B LP UNIT
</FN>
</TABLE>
