<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, 2000 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>
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Balance Sheets
March 31, 2000 (Unaudited) and
December 31, 1999 3
Statements of Income
Three months ended March 31, 2000
and 1999 4
Statements of Cash Flows
Three months ended March 31, 2000
and 1999 (Unaudited) 5
Notes to Financial Statements
March 31, 2000 (Unaudited) 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS 7
ITEM 3. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK 9
PART II OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 10
</TABLE>
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<PAGE> 3
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND,
A MICHIGAN LIMITED PARTNERSHIP
BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS MARCH 31, 2000 DECEMBER 31, 1999
-------------- -----------------
(Unaudited)
<S> <C> <C>
Properties:
Land $ 5,280,000 $ 5,280,000
Buildings And Improvements 24,151,520 24,134,260
Furniture And Fixtures 194,427 169,741
Manufactured Homes 954,101 1,002,680
-------------- -----------------
30,580,048 30,586,681
Less Accumulated Depreciation 10,738,658 10,521,838
-------------- -----------------
19,841,390 20,064,843
Cash And Cash Equivalents 1,261,026 1,113,061
Unamortized Finance Costs 603,048 624,548
Other Assets 835,117 600,612
-------------- -----------------
Total Assets $ 22,540,581 $ 22,403,064
-------------- -----------------
<CAPTION>
LIABILITIES MARCH 31, 2000 DECEMBER 31, 1999
-------------- -----------------
(UNAUDITED)
<S> <C> <C>
Line of Credit $ 600,000 $ 600,000
Accounts Payable 146,305 197,810
Mortgage Payable 32,785,269 32,879,105
Other Liabilities 1,076,491 874,936
-------------- -----------------
Total Liabilities $ 34,608,065 $ 34,551,851
Partners' Equity:
General Partner (2,140,916) (2,254,330)
Class A Limited Partners (9,688,436) (9,656,324)
Class B Limited Partners (238,133) (238,133)
-------------- -----------------
Total Partners' Equity (12,067,484) (12,148,787)
-------------- -----------------
Total Liabilities And
Partners' Equity $ 22,540,581 $ 22,403,064
-------------- -----------------
</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, 2000 March 31, 1999
------------------ --------------
<S> <C> <C>
Income:
Rental Income $ 2,112,733 $ 2,059,783
Other 153,653 131,199
------------------ --------------
Total Income $ 2,266,386 $ 2,190,982
------------------ --------------
Operating Expenses:
Administrative Expenses
(Including $111,883 and $107,844 in Property Management
Fees Paid to An Affiliate for the Three Month Period
Ended March 31, 2000 and 1999, Respectively) 461,076 452,771
Property Taxes 211,125 205,057
Utilities 132,776 124,206
Property Operations 235,861 259,509
Depreciation And Amortization 238,320 234,000
Interest 668,925 672,687
------------------ --------------
Total Operating Expenses $ 1,948,083 $ 1,948,230
------------------ --------------
Net Income $ 318,303 $ 242,752
------------------ --------------
Income Per Limited Partnership Unit:
Class A $ 5.32 $ 3.38
Class B $ 15.04 $ 12.88
Distribution Per Limited Partnership Unit
Class A $ 2.50 $ 2.00
Class B $ 2.50 $ 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, 2000 March 31, 1999
-------------- --------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income (Loss) $ 318,303 $ 242,752
Adjustments To Reconcile Net Income
(Loss) To Net Cash Provided By
Operating Activities:
Depreciation 216,820 212,500
Amortization 21,500 21,500
(Increase) Decrease In Other Assets From Operations (234,505) 8,241
Increase (Decrease) In Accounts Payables (51,505) (65,393)
Increase (Decrease) Other Liabilities From Operations 201,555 191,995
-------------- --------------
Total Adjustments 153,865 368,843
-------------- --------------
Net Cash Provided By (Used In)
Operating Activities 472,168 611,595
-------------- ---------------
Cash Flows From Investing Activities:
Capital Expenditures 6,633 (234,973)
Funds From Line of Credit 0 0
-------------- --------------
Net Cash Provided By (Used In)
Investing Activities 6,633 (234,973)
-------------- --------------
Cash Flows From Financing Activities:
Distributions To Partners (237,000) (214,500)
Principal Payments on Mortgage (93,836) (75,375)
-------------- --------------
Net Cash Provided By (Used In)
Financing Activities (330,836) (289,875)
-------------- --------------
Increase (Decrease) In Cash 147,965 86,747
Cash, Beginning 1,113,061 537,777
-------------- --------------
Cash, Ending $ 1,261,026 $ 624,524
-------------- --------------
</TABLE>
See Notes to Financial Statement
5
<PAGE> 6
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND,
A MICHIGAN LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
March 31, 2000 (Unaudited)
1. BASIS OF PRESENTATION:
The accompanying unaudited 2000 financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. The balance sheet at December 31, 1999 has been derived from the
audited financial statements at that date. Operating results for the three
months ended March 31, 2000 are not necessarily indicative of the results that
may be expected for the year ending December 31, 2000, or for any other interim
period. For further information, refer to the consolidated financial statements
and footnotes thereto included in the Partnership's Form 10-K for the year
ending December 31, 1999.
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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 amount 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, 2000 was 6.13%. 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, 2000, the outstanding balance on the line of credit was $600,000. Because
the Partnership's cash reserves have remained stable over the past several
quarters, the General Partner has elected to begin paying down the line of
credit. On or about March 31, 2000, the Partnership, in agreement with the
Partnership's consultant, made a $75,000 payment on the line and expects to be
able to pay for homes being used for the model home program as they are
delivered.
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<PAGE> 8
Net Cash from Operations available for aggregate distributions to all Partners
in UMHCIF during the quarter ended March 31, 2000 amounted to $556,623. The
amount available during the same period in 1999 was $476,752. Management
considers Net Cash from Operations to be a supplemental measure of the
Partnership's operating performance. Net Cash from Operations is defined as net
income computed in accordance with generally accepted accounting principles
("GAAP"), plus real estate related depreciation 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 nor 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 $146,687.50, or one-fourth of 1.0% of the most
recent appraised value of the properties held by the Partnership. ($58,675,000 x
.01 = $586,750 / 4 = $146,687.50).
The cash available after payment of the Partnership Management Distribution
amounted to $409,936. From this amount, the General Partner elected to make a
total distribution of $103,125 for the first quarter of 2000, 80.0% or $82,500
was paid to the Limited Partners and 20.0% or $20,625 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, 2000, the Partnership
added $306,811 to reserves. During the same quarter in 1999, the Partnership
added $249,152 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 96.4% (1,759/1,824 sites) at the end of March
2000, versus 97.6% a year ago. The average monthly rent in March 2000 was
approximately $421, or 4.0% more than the $405 average monthly rent in March
1999.
<TABLE>
<CAPTION>
Total Occupied Occupancy Average
Capacity Sites Rate Rent
<S> <C> <C> <C> <C>
Aztec Estates 645 608 94.3% $ 472
Kings Manor 314 300 95.5 451
Old Dutch Farms 293 279 95.2 403
Park of the Four Seasons 572 572 100.0 364
----- ----- ----- ------
Total on 3/31/00: 1,824 1,759 96.4% $ 421
Total on 3/31/99: 1,824 1,780 97.6% $ 405
</TABLE>
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<PAGE> 9
<TABLE>
<CAPTION>
GROSS REVENUES NET OPERATING
INCOME
3/31/00 3/31/99 3/31/00 3/31/99
<S> <C> <C> <C> <C>
Aztec Estates $ 870,088 $ 829,540 $ 477,425 $ 413,646
Kings Manor 386,497 378,743 246,764 240,621
Old Dutch Farms 356,915 351,861 211,696 236,104
Park of the Four Seasons 636,749 621,590 420,166 391,092
----------- ----------- ------------ -----------
2,250,249 2,181,734 1,356,051 $ 1,281,463
Partnership Management: 16,137 9,248 (75,817) (59,036)
Other Non Recurring expenses: ---- ---- (54,686) (72,988)
Debt Service (668,925) (672,687)
Depreciation and Amortization ---- ---- (238,320) (234,000)
----------- ----------- ------------ -----------
$ 2,266,386 $ 2,190,982 $ 318,303 $ 242,752
</TABLE>
COMPARISON OF QUARTER ENDED MARCH 31, 2000 TO QUARTER ENDED MARCH 31, 1999
Gross revenues increased $75,404, or 3.4%, to $2,266,386 in 2000, as compared to
$2,190,982 in 1999. 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 remained
stable at $1,948,083 in 2000, as compared to $1,948,230 in 1999.
As a result of the foregoing factors, net operating income increased to $318,303
as of March 31, 2000 from $242,752 as of March 31, 1999.
ITEM 3.
QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
The Partnership is exposed to interest rate rise primarily through its borrowing
activities. There is inherent roll over risk for borrowings as they mature and
are renewed at current market rates. The extent of this risk is not quantifiable
or predictable because of the variability of future interest rates and the
Partnership's future financing requirements.
Note Payable: At March 31, 2000 the Partnership had a note payable
outstanding in the amount of $32,785,269. Interest on this note is at a fixed
annual rate of 8.24% through June 2007.
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<PAGE> 10
Line-of-Credit: At March 31, 2000 the Partnership owed $600,000 pursuant to
its line-of-credit agreement, whereby interest is charged at a variable rate of
1.80% in excess of LIBOR.
A 10% adverse change in interest rates of the portion of the Partnership's debt
bearing interest at variable rates would result in an increase in interest
expense of less than $10,000 annually.
The Partnership does not enter into financial instruments transactions for
trading or other speculative purposes or to manage its interest rate exposure.
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, 2000.
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<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: May 15, 2000
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<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-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 1,261,026
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,699,191
<PP&E> 30,580,048
<DEPRECIATION> 10,738,658
<TOTAL-ASSETS> 22,540,581
<CURRENT-LIABILITIES> 1,822,796
<BONDS> 32,785,269
0
0
<COMMON> 0
<OTHER-SE> (12,067,484)
<TOTAL-LIABILITY-AND-EQUITY> 22,540,581
<SALES> 0
<TOTAL-REVENUES> 2,266,386
<CGS> 0
<TOTAL-COSTS> 1,709,763
<OTHER-EXPENSES> 216,820
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 690,425
<INCOME-PRETAX> 318,303
<INCOME-TAX> 0
<INCOME-CONTINUING> 318,303
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 318,303
<EPS-BASIC> .91<F1>
<EPS-DILUTED> 2.50
<FN>
<F1>EPS PRIMARY - INCOME PER CLASS A UNIT
EPS DILUTED - INCOME PER CLASS B UNIT
</FN>
</TABLE>
