<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, 1999 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
Page
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Balance Sheets
March 31, 1999 (Unaudited) and
December 31, 1998 3
Statements of Income
Three months ended March 31, 1999
and 1998 4
Statements of Cash Flows
Three months ended March 31, 1999
and 1998 (Unaudited) 5
Notes to Financial Statements
March 31, 1999 (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
<PAGE> 3
UNIPROP MANUFACTURED HOUSING
COMMUNITIES INCOME FUND,
A MICHIGAN LIMITED PARTNERSHIP
<TABLE>
<CAPTION>
BALANCE SHEETS
ASSETS MARCH 31, 1999 DECEMBER 31, 1998
-------------- -----------------
(UNAUDITED)
<S> <C> <C>
Properties:
Land $ 5,280,000 $ 5,280,000
Buildings And Improvements 23,966,484 23,934,391
Furniture And Fixtures 144,227 127,800
Manufactured Homes 935,110 748,657
------------ ------------
30,325,821 30,090,848
Less Accumulated Depreciation 9,867,056 9,654,556
------------ ------------
20,458,765 20,436,292
Cash And Cash Equivalents 624,524 537,777
Unamortized Finance Costs 689,048 710,548
Other Assets 816,026 824,267
------------ ------------
Total Assets $ 22,588,363 $ 22,508,884
------------ ------------
LIABILITIES MARCH 31, 1999 DECEMBER 31, 1998
-------------- -----------------
(UNAUDITED)
Line of Credit $ 469,523 $ 469,523
Accounts Payable 11,195 76,588
Mortgage Payable 33,043,733 33,119,108
Other Liabilities 1,039,835 847,840
------------ ------------
Total Liablities $ 34,564,286 $ 34,513,059
Partners' Equity:
General Partner (1,712,327) (1,770,028)
Class A Limited Partners (9,666,429) (9,636,980)
Class B Limited Partners (597,167) (597,167)
------------ ------------
Total Partners' Equity (11,975,923) (12,004,175)
------------ ------------
Total Liabilities And
Partners' Equity $ 22,588,363 $ 22,508,884
------------ ------------
</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, 1999 MARCH 31, 1998
-------------- --------------
<S> <C> <C>
Income:
Rental Income $2,059,783 $1,991,887
Other 131,199 89,980
---------- ----------
Total Income $2,190,982 $2,081,867
---------- ----------
Operating Expenses:
Administrative Expenses
(Including $107,844 And $103,376
In Property Management Fees Paid
To An Affliate For The Three Month Period
Ended March 31, 1999 and 1998
Respectively) 452,771 479,388
Property Taxes 205,057 207,405
Utilities 124,206 112,356
Property Operations 259,509 259,633
Depreciation And Amortization 234,000 228,500
Interest 672,687 702,500
---------- ----------
Total Operating Expenses $1,948,230 $1,989,782
---------- ----------
Net Income $ 242,752 $ 92,085
---------- ----------
Income Per Limited Partnership Unit:
Class A $ 0.54 $ 0.00
Class B $ 2.00 $ 2.00
Distribution Per Limited Partnership Unit
Class A $ 2.00 $ 2.00
Class B $ 2.00 $ 2.00
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, 1999 MARCH 31, 1998
-------------- --------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income (Loss) $ 242,752 $ 92,085
Adjustments To Reconcile Net Income
(Loss) To Net Cash Provided By
Operating Activities:
Depreciation 212,500 207,000
Amortization 21,500 21,500
(Increase) Decrease In Other Assets From Operations 8,241 (111,569)
Increase (Decrease) In Accounts Payables (65,393) (43,919)
Increase (Decrease) Other Liabilities From Operations 191,995 117,980
--------- ---------
Total Adjustments 368,843 190,992
--------- ---------
Net Cash Provided By (Used In)
Operating Activities 611,595 283,077
--------- ---------
Cash Flows From Investing Activities:
Capital Expenditures (234,973) 2,053
Funds From Line of Credit 0 76,000
--------- ---------
Net Cash Provided By (Used In)
Investing Activities (234,973) 78,053
--------- ---------
Cash Flows From Financing Activities:
Distributions To Partners (214,500) (208,000)
Principal Payments on Mortgage (75,375) (67,478)
--------- ---------
Net Cash Provided By (Used In)
Financing Activities (289,875) (275,478)
--------- ---------
Increase (Decrease) In Cash 86,747 85,652
Cash, Beginning 537,777 649,137
--------- ---------
Cash, Ending $ 624,524 $ 734,789
--------- ---------
</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, 1999 (Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Presentation:
The balance sheet as of March 31, 1999, the related statements of income and
statements of cash flow for the periods ended March 31, 1999 and 1998 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, 1999 MARCH 31, 1998
-------------- --------------
<S> <C> <C>
PROPERTY MANAGEMENT FEE
TO UNIPROP, INC.: $107,844 $103,376
</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. 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 more than ten years. The General Partner may elect to
have the Partnership own the properties for as long as, 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 National City Bank
of Michigan/Illinois (formerly First of America Bank). The interest rate, on
such line of credit, floats 180 basis points above 1 month LIBOR, which on March
31, 1999 was 4.94%. 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 three 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, 1999, the outstanding balance on the line of credit was $469,523.
Net Cash from Operations available for aggregate distributions to all Partners
in UMHCIF during the quarter ended March 31, 1999 amounted to $476,752. The
amount available during the same period in 1998 was $320,585. Management
considers Net Cash from Operations to be a supplemental measure of the
Partnership's operating performance. Net Cash from Operations is defined to mean
net income computed in accordance with generally accepted accounting principles
("GAAP"), plus real estate related depreciation
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<PAGE> 8
and amortization. Net Cash from Operations does not represent cash generated
from operating activities in accordance with GAAP and is not necessarily
indicative of cash available to fund cash needs. Net Cash from Operations should
not be considered as an alternative to net income as the primary indicator of
the Partnership's operating performance or as an alternative to cash flow as a
measure of liquidity.
The quarterly Partnership Management Distribution due and paid to the General
Partner for the first quarter was $143,250, or one-fourth of 1.0% of the most
recent appraised value of the properties held by the Partnership.
($57,300,000 x .01 = $573,000 / 4 = $143,250).
The cash available after payment of the Partnership Management Distribution
amounted to $333,502. From this amount, the General Partner elected to make a
total distribution of $84,350 for the first quarter of 1999, 80.0% or $67,500
was paid to the Limited Partners and 20.0% or $16,850 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, 1999, the Partnership
added $249,152 to reserves. During the same quarter in 1998, the Partnership
added $106,085 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 97.6% (1,780/1,824 sites) at the end of March
1999, versus 97.5% a year ago. The average monthly rent in March 1999 was
approximately $405, or 2.8% more than the $394 average monthly rent in March
1998.
<TABLE>
<CAPTION>
Total Occupied Occupancy Average
Capacity Sites Rate Rent
<S> <C> <C> <C> <C>
Aztec Estates 645 618 95.8% $ 454
Kings Manor 314 305 97.1 438
Old Dutch Farms 293 285 97.3 388
Park of the Four Seasons 572 572 100.0 349
----- ----- ----- -----
Total on 3/31/99: 1,824 1,780 97.6% $ 405
Total on 3/31/98: 1,824 1,779 97.5% $ 394
</TABLE>
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<PAGE> 9
<TABLE>
<CAPTION>
GROSS REVENUES NET OPERATING INCOME
3/31/98 3/31/99 3/31/98 3/31/99
<S> <C> <C> <C> <C>
Aztec Estates $ 829,540 $ 792,047 $ 413,646 $ 408,877
Kings Manor 378,743 362,743 240,621 217,620
Old Dutch Farms 351,861 337,100 236,104 220,489
Park of the Four Seasons 621,590 582,587 391,092 379,452
----------- ----------- ----------- -----------
2,181,734 2,074,477 1,281,463 $ 1,226,438
Partnership Management: 9,248 7,390 (59,036)
(115,183)
Other Non Recurring expenses: ----- ---- (72,988)
(88,170)
Debt Service (672,687)
(702,500)
Depreciation and Amortization ----- ---- (234,000) (228,500)
----------- ----------- ----------- -----------
$ 2,190,982 $ 2,081,867 $ 242,752 $ 92,085
</TABLE>
COMPARISON OF QUARTER ENDED MARCH 31, 1999 TO QUARTER ENDED MARCH 31, 1998
Gross revenues increased $109,115, or 5.2%, to $2,190,982 in 1999, as compared
to $2,081,867 in 1998. The increase was the result of the increase in average
monthly rents. (See table on previous page.)
As described in the Statements of Income total operating expenses decreased
$41,552, or 2.1%, to $1,948,230 in 1999, as compared to $1,989,782 in 1998. The
decrease was primarily the result of lower administrative expenses and lower
interest payments related to the Partnership's mortgage debt.
As a result of the foregoing factors, net income increased to $242,752 as of
March 31, 1999 from $92,085 as of March 31, 1998.
MANAGEMENT EXPENSES
Net Partnership management expenses paid during the quarter amounted to $59,036.
Gross expenses of $68,284 (data processing, accounting and legal expenses,
office supplies and wages to employees of the Partnership) were partially offset
by income of $9,248 generated by interest on the Partnership's reserves and
transfer fees. The figures for last year's first quarter were $115,183, $122,573
and $7,390, respectively.
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<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, 1999.
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 14, 1999
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<PAGE> 11
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
27 Financial Data Schedule
-11-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 624,524
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,129,598
<PP&E> 30,325,821
<DEPRECIATION> 9,867,056
<TOTAL-ASSETS> 22,588,363
<CURRENT-LIABILITIES> 34,564,286
<BONDS> 33,043,733
0
0
<COMMON> 0
<OTHER-SE> (11,975,923)
<TOTAL-LIABILITY-AND-EQUITY> 22,588,363
<SALES> 0
<TOTAL-REVENUES> 2,190,982
<CGS> 0
<TOTAL-COSTS> 1,714,230
<OTHER-EXPENSES> 212,500
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 694,187
<INCOME-PRETAX> 242,752
<INCOME-TAX> 0
<INCOME-CONTINUING> 242,752
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 242,752
<EPS-PRIMARY> .54<F1>
<EPS-DILUTED> 2.00<F2>
<FN>
<F1>Income per Class A unit
<F2>Income per Class B unit
</FN>
</TABLE>
