<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 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)
(248) 645-9261
(Registrant's telephone number, including area code)
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, 1997 (Unaudited) and
December 31, 1996 3
Statements of Income
Six months ended June 30, 1997
and 1996 and Three months ended
June 30, 1997 and 1996 (unaudited) 4
Statements of Cash Flows
Six months ended June 30, 1997
and 1996 (Unaudited) 5
Notes to Financial Statements
June 30, 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 JUNE 30, 1997 DECEMBER 31, 1996
------------- -----------------
(UNAUDITED)
<S> <C> <C>
Properties:
Land $5,280,000 $5,280,000
Buildings And Improvements 23,684,915 22,128,664
Manufactured Homes 580,717 101,700
Furniture And Fixtures 113,864 538,914
----------- -----------
29,659,496 28,049,278
Less Accumulated Depreciation 8,381,937 7,989,565
----------- -----------
21,277,559 20,059,713
Cash And Cash Equivalents 760,489 640,086
Unamortized Finance Costs 839,952 0
Other Assets 981,702 607,756
----------- -----------
Total Assets $23,859,702 $21,307,555
----------- -----------
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES JUNE 30, 1997 DECEMBER 31, 1996
------------- -----------------
(UNAUDITED)
<S> <C> <C>
Line of Credit $600,000 $495,300
Accounts Payable 107,270 110,583
Mortgage Payable (3) 33,464,705 0
Other Liabilities 1,069,160 991,619
----------- -----------
Total Liablities $35,241,135 $1,597,502
Partners' Equity:
General Partner (1,258,613) (602,862)
Class A Limited Partners (9,227,595) 11,438,140
Class B Limited Partners (895,225) 8,874,775
----------- -----------
Total Partners' Equity (11,381,433) 19,710,053
----------- -----------
Total Liabilities And
Partners' Equity $23,859,702 $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 SIX MONTHS ENDED THREE MONTHS ENDED
(UNAUDITED) JUNE 30, 1997 JUNE 30, 1996 JUNE 30, 1997 JUNE 30, 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Income:
Rental Income $3,895,925 $3,728,017 $1,958,640 $1,852,392
Other 199,682 144,354 129,013 58,177
---------- ---------- ---------- ----------
Total Income $4,095,607 $3,872,371 $2,087,653 $1,910,569
---------- ---------- ---------- ----------
Operating Expenses:
Administrative Expenses
(Including $201,509, 192,896, 101,545 and 97,708
In Property Management Fees Paid
To An Affliate For The Six and Three Month
Periods Ended June 30, 1997 and
1996, Respectively) 845,826 826,065 413,673 403,473
Property Taxes 415,866 408,946 204,721 204,778
Utilities 236,958 246,314 125,753 116,585
Property Operations 462,348 467,083 255,978 247,030
Depreciation And Amortization 413,898 391,914 217,712 195,957
Interest 758,797 0 758,797 0
---------- ---------- ---------- ----------
Total Operating Expenses $3,133,693 $2,340,322 $1,976,634 $1,167,823
---------- ---------- ---------- ----------
Net Income $961,914 $1,532,049 $111,019 $742,746
---------- ---------- ---------- ----------
Income Per Limited Partnership Unit:
Class A $28.00 $35.00 $10.00 $17.00
Class B $48.28 $50.00 $23.00 $25.00
Distribution Per Limited Partnership Unit
Class A $48.00 $50.00 $23.00 $25.00
Class B $48.00 $50.00 $23.00 $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
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED
JUNE 30, 1997 JUNE 30, 1996
------------- -------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income (Loss) $961,914 $1,532,049
Adjustments To Reconcile Net Income
(Loss) To Net Cash Provided By
Operating Activities:
Depreciation 392,372 391,914
Amortization 21,526 0
(Increase) Decrease In Other Assets From Operations (1,235,424) 28,196
Increase (Decrease) In Accounts Payables (3,313) (9,863)
Increase (Decrease) Other Liabilities From Operations 77,541 (203,052)
----------- ----------
Total Adjustments (747,298) 207,195
----------- ----------
Net Cash Provided By (Used In)
Operating Activities 214,616 1,739,244
----------- ----------
Cash Flows From Investing Activities:
Capital Expenditures (1,610,218) (8,305)
Funds From Line of Credit 104,700 256,790
----------- ----------
Net Cash Provided By (Used In)
Investing Activities (1,505,518) 248,485
----------- ----------
Cash Flows From Financing Activities:
Funds from Mortgage 33,500,000
Distributions To Partners (2,053,400) (1,800,000)
Return of Capital (30,000,000) 0
Principal Payments on Mortgage (35,295) 0
----------- ----------
Net Cash Provided By (Used In)
Financing Activities 1,411,305 (1,800,000)
----------- ----------
Increase (Decrease) In Cash 120,403 187,729
Cash, Beginning 640,086 468,664
----------- ----------
Cash, Ending $760,489 $656,393
----------- ----------
</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, 1997 (Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Presentation:
The balance sheet as of June 30, 1997, the related statements of income and
statements of cash flow for the periods ended June 30, 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>
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30, 1997 JUNE 30, 1996 JUNE 30, 1997 JUNE 30, 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
PROPERTY MANAGEMENT FEE
TO UNIPROP, INC.: $201,509 $192,896 $101,545 $97,708
</TABLE>
3. MORTGAGE FINANCING
On March 25, 1997, the Partnership placed mortgages on the four properties in
connection with the borrowing of $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 except during the last six months of the term of the loan. The
Partnership distributed $30,000,000 to the Limited Partners representing a full
return of the original capital contribution of $1,000 per unit held. The
monthly loan payment will be approximately $251,439 and began May, 1997.
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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 Nomura Financing, the Partnership's four properties are
mortgaged. At the time of the Nomura 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 July 17, 1997 the Partnership replaced an existing $600,000 line of credit
with Comerica Bank with a renewable line of credit of $600,000, with First of
America Bank. The interest rate on the line floats 180 basis points above 1
month LIBOR, which is currently at 5.63%. The sole purpose of the line of
credit is to purchase new and used homes to be used as model homes and offered
for sale within the Partnership's communities. Over the past two years, sales
of the new and used model homes have been growing and the General Partner
believes that the model home program is in the best interest of the
Partnership.
During the quarters ended June 30, 1997 and 1996, distributable cash generated
by operations was $328,731 and $938,703, respectively. The decrease in cash
flow for the quarter was due to the Partnership's mortgage payments of $758,797
per quarter, resulting from the Nomura Financing.
-7-
<PAGE> 8
The quarterly Partnership Management Distribution due the General Partner for
the second quarter was $133,000, or one-fourth of 1.0% of the most recent
appraised value of the properties held by the Partnership. ($53,200,000 x .01 =
$532,000).
The cash available after payment of the Partnership Management Distribution
amounted to $195,731. The General Partner elected to make a total distribution
of $75,000 for the second quarter of 1997, 80.0% or $60,000 was paid to the
Limited Partners and 20.0% or $15,000 was paid to the General Partner.
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, 1997, the
Partnership added $120,731 to reserves. During the same quarter in 1995, the
Partnership added $38,704 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 97.3% (1,774/1,824 sites) at the end of June
1997, versus 96.2% a year ago. The average monthly rent in June 1997 was
approximately $383, or 3.2% more than average monthly rent of $371 reported in
June 1996.
<TABLE>
<CAPTION>
Total Occupied Occupancy Average
Capacity Sites Rate Rent
<S> <C> <C> <C> <C>
Aztec Estates 645 612 94.9% $427
Kings Manor 314 302 96.2 404
Old Dutch Farms 293 291 99.3 387
Park of the Four Seasons 572 569 99.5 325
--- --- ---- ----
Total on 6/30/97: 1,824 1,774 97.3% $383
Total on 6/30/96: 1,824 1,754 96.2% $371
</TABLE>
During the second quarter of 1997, the Partnership generated gross revenues of
$2,087,653 or 9.3% more than the $1,910,569 generated in the second quarter of
1996. The net operating income before other non-recurring expenses and
Partnership management was $1,200,385 or 57.5% of the total revenues, versus
$1,119,913 or 58.7% during the same period in 1996. Cash flow for the second
quarter, after mortgage debt service and non-recurring items was $328,731. The
cash flow for the same period in 1996 was $938,704, but it is not comparable
because the Partnership had no mortgage debt as of that date.
-8-
<PAGE> 9
<TABLE>
<CAPTION>
GROSS NET OPERATING MORTGAGE CASH
REVENUES INCOME DEBT FLOW
<S> <C> <C> <C> <C>
Aztec Estates $ 811,037 $ 398,759 $286,411 $ 112,348
Kings Manor 356,768 232,116 145,815 86,301
Old Dutch Farms 328,828 223,535 130,027 93,508
Park of the Four Seasons 568,801 345,975 196,544 149,431
Partnership Management 22,219 (64,961) -0- (64,961)
Other Non Recurring expenses: -- (47,896) -0- (47,896)
---------- ------------ -------- ---------
Total on 6/30/97: $2,087,653 $ 1,087,528 $758,797 $ 328,731
Total on 6/30/96: $1,910,569 $ 938,703 $ -0- $ 938,703
</TABLE>
The properties' operating expenses for the second quarter of 1997, compared to
the same period in 1996, reflect increases in wages, marketing expenses, taxes
and legal/professional fees.
AZTEC ESTATES, in Margate, Florida, reported an occupancy on June 30, 1997 of
94.9% (612/645 sites), versus 94.4% as of June 30, 1996. The average rent in
the community as of June 30, 1997 was $427, versus $411, an increase of 3.9%
from the same period in 1996. For the second quarter of 1997, the net
operating income was $398,759, or 4.7% more than the $380,872 reported for the
same period in 1996.
Improvement and maintenance actions undertaken during the quarter focused on
repairs to the community office roof, replacement of a fire hydrant, and the
installation of 12 asphalt speed bumps throughout the community. Also, the
annual resident picnic took place during the quarter. Management reported a
strong family turn-out for the community sponsored food, music and games.
KINGS MANOR, in Fort Lauderdale, Florida, reported an occupancy of 96.2%
(302/314 sites) on June 30, 1997, versus 95.2% as of June 30, 1996. The
average rent in the community as of June 30, 1997 was $404, versus $388, an
increase of 4.1% from the same period in 1996. For the second quarter of
1997, the net operating income was $232,116, or 7.7% more than the $215,507
reported during the same period in 1996.
Improvement and maintenance actions undertaken during the quarter involved
repairs to the lawn sprinkler system, renovations to the community center
building, and upgrading of electric pedestals for new home placements.
OLD DUTCH FARMS, in Novi, Michigan, reported an occupancy of 99.3% (291/293
sites) on June 30, 1997, versus 98.6% as of June 30, 1996. The average rent in
the community as of June 30, 1997 was $387, versus $376, an increase of 2.9%
from the same period in 1996. For the second quarter of 1997, the net
operating income was $223,535, or 12.7% more than the $198,367 reported for the
same period in 1996.
-9-
<PAGE> 10
Improvement and maintenance actions undertaken during the quarter involved site
upgrades for new homes that were moved into the community, concrete repairs to
sidewalks within the community, and minor renovations to the community center
building.
PARK OF THE FOUR SEASONS, in Blaine, Minnesota, reported an occupancy of 99.5%
(569/572 sites) on June 30, 1997 versus 97.4% as of June 30, 1996. The average
rent in the community as of June 30, 1997 was $325, versus $316, an increase
of 2.9% from the same period in 1996. For the second quarter of 1997, the net
operating income was $345,975, or 6.4% more than the $325,166 reported for the
same period in 1996.
Improvement and maintenance actions during the quarter involved repairs to the
community pool, the installation of new playground equipment, and the purchase
of new tables and chairs for the community center building.
MANAGEMENT EXPENSES
Net Partnership management expenses paid during the second quarter amounted to
$64,961. Gross expenses of $87,180 (data processing, accounting and legal
expenses, office supplies and wages to employees of the Partnership) were
partially offset by income of $22,219 generated by interest on the
Partnership's reserves and transfer fees. The figures for last year's second
quarter were $111,847, $113,844 and $1,997, 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 was one report on Form 8-K filed during the three
months ended June 30, 1997. The Form 8-K dated March 25,
1997 reported under Item 2, the borrowing of funds from
Nomura Asset Capital Corporation and detailed the
disposition of funds and the terms of the financing.
-10-
<PAGE> 11
SIGNATURES
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,
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, 1997
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<PAGE> 12
EXHIBIT INDEX
Exhibit
No. Description Page
- -------- ----------- ----
27 Financial Data Schedule
-12-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 760,489
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,582,606
<PP&E> 29,659,496
<DEPRECIATION> 8,381,937
<TOTAL-ASSETS> 23,859,702
<CURRENT-LIABILITIES> 35,241,135
<BONDS> 33,464,705
0
0
<COMMON> 0
<OTHER-SE> (11,381,433)
<TOTAL-LIABILITY-AND-EQUITY> 23,859,702
<SALES> 0
<TOTAL-REVENUES> 4,095,607
<CGS> 0
<TOTAL-COSTS> 2,719,795
<OTHER-EXPENSES> 392,372
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 780,323
<INCOME-PRETAX> 961,914
<INCOME-TAX> 0
<INCOME-CONTINUING> 961,914
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 961,914
<EPS-PRIMARY> 28.00<F1>
<EPS-DILUTED> 48.28<F2>
<FN>
<F1>Income per Class A LP unit.
<F2>Income per Class B unit.
</FN>
</TABLE>
