<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 Quarter Ended March 31, 1998 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)
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
<TABLE>
<CAPTION>
Page
<S> <C> <C>
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Balance Sheets
March 31, 1998 (Unaudited) and
December 31, 1997 3
Statements of Income
Three months ended March 31, 1998
and 1997 4
Statements of Cash Flows
Three months ended March 31, 1998
and 1997 (Unaudited) 5
Notes to Financial Statements
March 31, 1998 (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
</TABLE>
-2-
<PAGE> 3
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND,
A MICHIGAN LIMITED PARTNERSHIP
BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS MARCH 31, 1998 DECEMBER 31, 1997
-------------- -----------------
(Unaudited)
<S> <C> <C>
Properties:
Land $ 5,280,000 $ 5,280,000
Buildings And Improvements 23,866,913 23,862,182
Manufactured Homes 658,226 668,108
Furniture And Fixtures 120,945 117,847
29,926,084 29,928,137
Less Accumulated Depreciation 9,012,795 8,805,795
----------- -----------
20,913,289 21,122,342
Cash And Cash Equivalents 734,789 649,137
Unamortized Finance Costs 775,228 796,547
Other Assets 595,795 484,407
----------- -----------
Total Assets $23,019,101 $23,052,433
=========== ===========
<CAPTION>
LIABILITIES MARCH 31, 1998 DECEMBER 31, 1997
-------------- -----------------
(Unaudited)
Line of Credit $ 434,916 $ 358,916
Accounts Payable 72,147 116,066
Mortgage Payable (3) 33,288,462 33,355,940
Other Liabilities 1,009,053 891,073
------------ ------------
Total Liablities $ 34,804,578 $ 34,721,995
Partners' Equity:
General Partner (1,335,054) (1,261,905)
Class A Limited Partners (9,552,702) (9,509,936)
Class B Limited Partners (897,721) (897,721)
------------ ------------
Total Partners' Equity (11,785,477) (11,669,562)
------------ ------------
Total Liabilities And
Partners' Equity $ 23,019,101 $ 23,052,433
============ ============
</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>
THREE MONTHS ENDED
MARCH 31, 1998 MARCH 31, 1997
-------------- --------------
<S> <C> <C>
Income:
Rental Income $1,991,887 $1,937,285
Other 89,980 70,669
---------- ----------
Total Income $2,081,867 $2,007,954
========== ==========
Operating Expenses:
Administrative Expenses
(Including $103,376 And $99,694
In Property Management Fees Paid
To An Affliate For The Three Month
Period Ended March 31, 1998 and 1997
Respectively) 479,388 432,153
Property Taxes 207,405 211,145
Utilities 112,356 111,205
Property Operations 259,633 206,370
Depreciation And Amortization 228,500 196,186
Interest 702,500 0
---------- ----------
Total Operating Expenses $1,989,782 $1,157,059
========== ==========
Net Income $ 92,085 $ 850,895
========== ==========
Income Per Limited Partnership Unit:
Class A $ 0.00 $ 18.00
Class B $ 2.00 $ 25.00
Distribution Per Limited Partnership Unit
Class A $ 2.00 $ 1,025.00
Class B $ 2.00 $ 1,025.00
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
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, 1998 MARCH 31, 1997
-------------- --------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income (Loss) $ 92,085 $ 850,895
Adjustments To Reconcile Net Income
(Loss) To Net Cash Provided By
Operating Activities:
Depreciation 207,000 196,186
Amortization 21,500 0
(Increase) Decrease In Other Assets From Operations (111,569) (1,116,150)
Increase (Decrease) In Accounts Payables (43,919) (68,164)
Increase (Decrease) Other Liabilities From Operations 117,980 (285,837)
------------ ----------
Total Adjustments 190,992 (1,273,965)
------------ ----------
Net Cash Provided By (Used In)
Operating Activities 283,077 (423,070)
------------ ----------
Cash Flows From Investing Activities:
Capital Expenditures 2,053 (51,613)
Funds From Line of Credit 76,000 104,700
------------ ---------
Net Cash Provided By (Used In)
Investing Activities 78,053 53,087
------------ ---------
Cash Flows From Financing Activities:
Funds from Mortgage 0 33,500,000
Distributions To Partners (208,000) (1,355,000)
Return of Capital 0 (30,000,000)
Principal Payments on Mortgage (67,478) 0
------------ -----------
Net Cash Provided By (Used In)
Financing Activities (275,478) 2,145,000
------------ -----------
Increase (Decrease) In Cash 85,652 1,775,017
Cash, Beginning 649,137 640,086
------------ ------------
Cash, Ending $ 734,789 $ 2,415,103
============ ============
</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, 1998 (Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Presentation:
The balance sheet as of March 31, 1998, the related statements of income and
statements of cash flow for the periods ended March 31, 1998 and 1997 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, 1998 MARCH 31, 1997
-------------- --------------
<S> <C> <C>
PROPERTY MANAGEMENT FEE
TO UNIPROP, INC.: $103,376 $99,694
</TABLE>
-6-
<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 "Financing"). It secured the Financing by
placing liens on its four communities. As a result of the Financing, the
Partnership distributed $30,000,000 to the Limited Partners, which represented a
full return of the original capital contributions of $1,000 per unit.
Liquidity
As a result of the Financing, the Partnership's four properties are mortgaged.
At the time of the 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 ten years. The General Partner may elect to
have the Partnership own the properties for as long as, if, in the opinion of
the General Partner, it is in the best interest of the Partnership to do so.
The Partnership has a renewable $600,000 line of credit with First of America
Bank. The interest rate, on such line of credit, floats 180 basis points above 1
month LIBOR, which on March 31, 1998 was 5.69%. 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 has been growing and the General Partner believes
that continuing the model home program is in the best interest of the
Partnership. As of March 31, 1998, the oustanding balance on the line of credit
was $434,916.
The total funds provided by operations and available for aggregate distributions
to all Partners in UMHCIF during the quarter ended March 31, 1998 amounted to
$320,585. The amount available during the same period in 1997 was $1,047,081.
The significant decrease in cash available for distributions is a result of the
Partnership now having
-7-
<PAGE> 8
mortgage debt, which it did not have in place at the end of the quarter ending
March 31, 1997.
The quarterly Partnership Management Distribution due and paid to the General
Partner for the first quarter was $139,500, or one-fourth of 1.0% of the most
recent appraised value of the properties held by the Partnership. ($55,800,000 x
.01 = $558,000 / 4 = $139,500)
The cash available after payment of the Partnership Management Distribution
amounted to $181,085. From this amount, the General Partner elected to make a
total distribution of $75,000 for the first quarter of 1998, 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 March 31, 1998, the Partnership
added $106,085 to reserves. During the same quarter in 1997, the Partnership
added $198,681 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 97.5% (1,779/1,824 sites) at the end of March
1998, versus 97.4% a year ago. The average monthly rent in March 1998 was
approximately $394, or 3.1% more than the $382 average monthly rent in March
1997.
<TABLE>
<CAPTION>
Total Occupied Occupancy Average
Capacity Sites Rate Rent
<S> <C> <C> <C> <C>
Aztec Estates 645 622 96.4% $441
Kings Manor 314 303 96.5 422
Old Dutch Farms 293 285 97.3 393
Park of the Four Seasons 572 569 99.5 334
--- --- ---- ----
Total on 3/31/98: 1,824 1,779 97.5% $394
Total on 3/31/97: 1,824 1,777 97.4% $382
</TABLE>
-8-
<PAGE> 9
<TABLE>
<CAPTION>
GROSS REVENUES NET OPERATING
INCOME
3/31/98 3/31/97 3/31/98 3/31/97
<S> <C> <C> <C> <C>
Aztec Estates $ 792,047 $ 784,746 $ 408,877 $ 426,951
Kings Manor 362,743 342,139 217,620 214,760
Old Dutch Farms 337,100 315,840 220,489 205,820
Park of the Four Seasons 582,587 554,821 379,452 335,020
------------- ----------- ------------ -----------
2,074,477 $ 1,997,546 1,226,438 $ 1,182,551
Partnership Management: 7,390 10,408 (115,183) (95,167)
Other Non Recurring expenses: ----- ---- (88,170) (40,303)
Debt Service (702,500) -0-
Depreciation and Amortization ----- ---- (228,500) (196,186)
------------- ----------- ------------ -----------
$ 2,081,867 $ 2,007,954 $ 92,085 $ 850,895
============= =========== ============ ===========
</TABLE>
COMPARISON OF QUARTER ENDED MARCH 31, 1998 TO QUARTER ENDED MARCH 31, 1997
Gross revenues increased $73,913, or 3.7%, to $2,081,867 in 1998, as compared to
$2,007,954 in 1997. The increase was the result of the increase in average
monthly rents and an increase in overall occupancy. (See table on previous
page.)
Operating expenses increased $832,723, or 72%, to $1,989,782 in 1998, as
compared to $1,157,059 in 1997. The increase was primarily the result of
$702,500 in interest expense for the mortgage debt on the Partnership's
properties, which was not in place as of the end of the first quarter of 1997.
Additionally, partnership management costs increased $20,016, or 21%, to
$115,183 in 1998, as compared to $95,167 in 1997. The increase was the result of
higher Partnership legal expenses. Property operation costs increased $53,263,
or 25.8%, to $259,633 in 1998, as compared to $206,370 in 1997. The increase was
the result of approximately $32,000 in non-recurring expenses at two of the
Partnership's properties.
As a result of the foregoing factors, net income decreased to $92,085 as of
March 31, 1998 from $850,895 as of March 31, 1997.
MANAGEMENT EXPENSES
Net Partnership management expenses paid during the quarter amounted to
$115,183. Gross expenses of $122,573 (data processing, accounting and legal
expenses, office supplies and wages to employees of the Partnership) were
partially offset by income of $7,390 generated by interest on the Partnership's
reserves and transfer fees. The figures for last year's first quarter were
$95,167, $105,575 and $10,408, respectively.
-9-
<PAGE> 10
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, 1998.
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, 1998
-10-
<PAGE> 11
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION PAGE
- -------------- ----------- ----
<S> <C> <C>
27 Financial Data Schedule
</TABLE>
-11-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 734,789
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,105,812
<PP&E> 29,926,084
<DEPRECIATION> 9,012,795
<TOTAL-ASSETS> 23,019,101
<CURRENT-LIABILITIES> 34,804,578
<BONDS> 33,288,462
0
0
<COMMON> 0
<OTHER-SE> (11,785,477)
<TOTAL-LIABILITY-AND-EQUITY> 23,019,101
<SALES> 0
<TOTAL-REVENUES> 2,081,867
<CGS> 0
<TOTAL-COSTS> 1,761,282
<OTHER-EXPENSES> 207,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 724,000
<INCOME-PRETAX> 92,085
<INCOME-TAX> 0
<INCOME-CONTINUING> 92,085
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 92,085
<EPS-PRIMARY> 0
<EPS-DILUTED> 2.00<F1>
<FN>
<F1>5.03(b)(20)
EPS PRIMARY - INCOME PER CLASS A UNIT
EPS DILUTED - INCOME PER CLASS B UNIT
</FN>
</TABLE>
