<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 September 30, 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 [ ]
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UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND,
A MICHIGAN LIMITED PARTNERSHIP
INDEX
Page
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PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Balance Sheets
September 30, 2000 and
December 31, 1999 3
Statements of Income
Nine months ended September 30, 2000
and 1999 and Three months ended
September 30, 2000 and 1999 4
Statement of Partner's Equity 4
Nine months ended September 30,2000
Statements of Cash Flows
Nine months ended September 30,2000
and 1999 5
Notes to Financial Statements 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 10
PART II OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 10
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UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND,
A MICHIGAN LIMITED PARTNERSHIP
BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS September 30,2000 December 31, 1999
----------------- -----------------
(Unaudited)
<S> <C> <C>
Properties:
Land $5,280,000 $5,280,000
Buildings And Improvements 24,297,338 24,134,260
Furniture And Fixtures 197,123 169,741
Manufactured Homes and Improvements 939,790 1,002,680
----------- -----------
30,714,251 30,586,681
Less Accumulated Depreciation 11,172,299 10,521,838
----------- -----------
19,541,952 20,064,843
Cash And Cash Equivalents 1,068,872 1,113,061
Unamortized Finance Costs 562,048 624,548
Other Assets 1,114,326 600,612
----------- -----------
Total Assets $22,287,198 $22,403,064
----------- -----------
<CAPTION>
LIABILITIES AND PARTNERS' DEFICIT September 30, 2000 December 31, 1999
------------------ -----------------
(Unaudited)
<S> <C> <C>
Line of Credit $375,000 $600,000
Accounts Payable 148,529 197,810
Other Liabilities 1,123,656 874,936
Mortgage Payable 32,655,082 32,879,105
----------- -----------
Total Liabilities 34,302,267 34,551,851
----------- -----------
Partner's (Deficit) Equity:
General Partner (2,576,887) (2,254,330)
Class A Limited Partners (9,540,410) (9,656,324)
Class B Limited Partners 102,228 (238,133)
----------- ----------
Total Partners' Deficit (12,015,069) (12,148,787)
----------- -----------
Total Liabilities And
Partners' Deficit $22,287,198 $22,403,064
----------- -----------
</TABLE>
See Notes to Financial Statements
3
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UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND
A MICHIGAN LIMITED PARTNERSHIP
<TABLE>
<CAPTION>
STATEMENTS OF INCOME (Unaudited) NINE MONTHS ENDED THREE MONTHS ENDED
Sept. 30, 2000 Sept. 30, 1999 Sept. 30, 2000 Sept. 30, 1999
------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
Income:
Rental Income $6,282,301 $6,187,382 $2,089,369 $2,057,529
Other 501,171 410,174 183,737 173,367
---------- ---------- ---------- ----------
Total Income $6,783,472 $6,597,556 $2,273,106 $2,230,896
---------- ---------- ---------- ----------
Operating Expenses:
Administrative Expenses
(Including $331,584, $327,796, $111,883 and
$110,679 in Property Management
Fees Paid to An Affiliate for the Nine and Three Month Periods
Ended Sept. 30, 2000 and 1999, Respectively) 1,403,074 1,364,971 428,581 482,092
Property Taxes 633,225 617,617 211,020 206,286
Utilities 386,610 376,120 128,120 122,604
Property Operations 733,576 811,841 254,786 264,423
Depreciation And Amortization 714,961 702,430 238,320 234,430
Interest 2,041,682 2,062,494 688,205 693,490
---------- ---------- ---------- ----------
Total Operating Expenses $5,913,128 $5,935,473 $1,949,032 $2,003,325
---------- ---------- ---------- ----------
Net Income $ 870,344 $ 662,083 $ 324,074 $ 227,571
---------- ---------- ---------- ----------
Income Per Limited Partnership Unit:
Class A $ 13.73 $ 8.38 $ 5.48 $ 2.97
Class B $ 42.84 $ 36.87 $ 15.20 $ 12.48
Distribution Per Limited Partnership Unit
Class A $ 8.00 $ 6.75 $ 2.75 $ 2.50
Class B $ 8.00 $ 6.75 $ 2.75 $ 2.50
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>
<TABLE>
<CAPTION>
STATEMENT OF PARTNER'S EQUITY(Unadited)
General Partner Class A Limited Class B Limited Total
<S> <C> <C> <C> <C>
Beginning Balance as of December 31, 1999 (2,254,330) (9,656,324) (238,133) (12,148,787)
Net Income 174,069 277,754 418,521 870,344
Distributions (496,626) (161,840) (78,160) (736,626)
---------- ---------- --------- -----------
Balance as of September 30,2000 (2,576,887) (9,540,410) 102,228 (12,015,069)
---------- ---------- --------- -----------
</TABLE>
See Notes to Financial Statements
4
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UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND
A MICHIGAN LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
September 30,2000 September 30, 1999
----------------- ------------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income $870,344 $662,083
-------- --------
Adjustments To Reconcile Net Income
To Net Cash Provided By
Operating Activities:
Depreciation 650,461 637,930
Amortization 64,500 64,500
(Increase) Decrease In Other Assets (515,714) (192,424)
Increase (Decrease) In Accounts Payable (49,281) (15,258)
Increase (Decrease) Other Liabilities 248,720 482,899
--------- ---------
Total Adjustments: 398,686 977,647
--------- ---------
Net Cash Provided By (Used In)
Operating Activities 1,269,030 1,639,730
--------- ---------
Cash Flows From Investing Activities:
Capital Expenditures (127,570) (231,508)
--------- ---------
Net Cash Provided By (Used In)
Investing Activities (127,570) (231,508)
--------- ---------
Cash Flows From Financing Activities:
(Net Payments) Advances from Line of Credit (225,000) 130,477
Distributions To Partners (736,626) (679,100)
Principal Payments on Mortgage (224,023) (194,484)
--------- ---------
Net Cash Provided By (Used In) Financing Activities (1,185,649) (743,107)
---------- ---------
Increase (Decrease) In Cash and Cash Equivalents (44,189) 665,115
Cash and Cash Equivalents, Beginning 1,113,061 537,777
---------- ---------
Cash and Cash Equivalents, Ending $1,068,872 $1,202,892
---------- ----------
</TABLE>
See Notes to Financial Statements
5
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UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND,
A MICHIGAN LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
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 nine months
ended September 30, 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 financial statements and footnotes
thereto included in the Partnership's Form 10-K for the year ended December 31,
1999.
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ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Capital Resources
The capital resources of Uniprop Manufactured Housing Communities Income Fund
(the "Partnership") 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"). The Partnership 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 expected to be sold or
financed within seven to ten years after their acquisition. All of the
properties have been owned by the Partnership more than ten years, and they were
financed approximately 11 years after their acquisition. 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 September
30, 2000 was 6.62%. The sole purpose of the line of credit is to purchase new
and used homes to be used as model homes offered for sale within the
Partnership's communities. As of September 30, 2000, the outstanding balance on
the line of credit was $375,000.
Net Cash from Operations available for aggregate distributions to all Partners
in the Partnership during the quarter ended September 30, 2000 amounted to
$562,394. The amount available during the same period in 1999 was $462,001
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 and amortization. Net
Cash from Operations does not represent cash
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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 third quarter was $146,688, or one-fourth of 1.0% of the most
recent appraised value of the properties held by the Partnership. ($58,675,200x
.01 = $586,752 / 4 = $146,688)
The cash available, after payment of the Partnership Management Distribution of
$146,688 from Net Cash from Operations, was $415,706 From this amount, the
General Partner elected to make a total distribution of $103,125 for the third
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. The General Partner will continue to
monitor on-going Net Cash from Operations generated by the Partnership during
the coming quarters. If Net Cash from Operations is lower or higher than the
amount needed to maintain the current distribution level, the General Partner
may elect to reduce or increase the level of future distributions paid to the
Limited Partners.
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. As of September 30, 2000, the Partnership cash reserves
amounted to $1,068,872. The level of cash reserves maintained 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% (1,744 sites) at the end
of September 2000, compared to 97% a year ago. The average monthly rent in
September 2000 was approximately $427, or 4.1.% more than the $410 average
monthly rent in September 1999.
<TABLE>
<CAPTION>
Total Occupied Occupancy Average
Capacity Sites Rate Rent*
<S> <C> <C> <C> <C>
Aztec Estates 645 597 93% $472
Kings Manor 314 295 94% 451
Old Dutch Farms 293 280 96% 413
Park of the Four Seasons 572 572 100% 373
--- --- ---- ----
Total on 9/30/00: 1,824 1,744 96% $427*
Total on 9/30/99: 1,824 1,771 97% $410
</TABLE>
*Average Rent is not weighted average.
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<TABLE>
<CAPTION>
GROSS REVENUES NET INCOME
THREE MONTHS ENDING THREE MONTHS ENDING
9/30/00 9/30/99 9/30/00 9/30/99
<S> <C> <C> <C> <C>
Aztec Estates $ 862,422 $ 871,081 $ 472,757 $ 419,818
Kings Manor 381,500 379,758 239,765 261,606
Old Dutch Farms 343,127 345,187 186,460 212,318
Park of the Four Seasons 656,363 618,407 436,700 394,979
--------- --------- -------- ---------
2,243,412 2,214,433 1,335,682 1,288,721
Partnership Management: 29,694 16,463 (21,718) (30,176)
Other Expenses - - (63,365) (103,054)
Interest (688,205) (693,490)
Depreciation and Amortization - - (238,320) (234,430)
----------- ----------- --------- ---------
$ 2,273,106 $ 2,230,896 $ 324,074 $ 227,571
</TABLE>
COMPARISON OF THE NINE MONTHS ENDED SEPTEMBER 30, 2000
TO NINE MONTHS ENDED SEPTEMBER 30, 1999
Gross revenues increased $185,916 or 2.8%, to $6,783,472, in 2000, as compared
to $6,597,556 in 1999. The increase in gross revenues is the result of higher
average rents at the Partnership's four communities.
As described in the Statements of Income, total operating expenses decreased
$22,345 to $5,913,128, in 2000, as compared to $5,935,473 in 1999.
The foregoing factors resulted in net income increasing to $870,344 for the nine
months ended September 30, 2000, 31% higher than the $662,083 reported for the
same period in 1999.
COMPARISON OF QUARTER ENDED SEPTEMBER 30, 2000
TO QUARTER ENDED SEPTEMBER 30, 1999
Gross revenues increased $42,210, or 1.9%, to $2,273,106, in 2000, as compared
to $2,230,896 in 1999. The increase in gross revenues is the result of higher
average rents at the Partnership's four communities (see table on previous
page).
As described in the Statements of Income, total operating expenses decreased
$54,293, or 2.71%, to $1,949,032, in 2000, as compared to $2,003,325 in 1999.
The decrease in total operating expenses is primarily due to improved cost
control.
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As a result of the foregoing factors, net income increased to $324,074 for the
quarter ended September 30, 2000 from $228,571 reported for the same period in
1999.
ITEM 3.
QUANTITATIVE AND QUALITATIVE
DISCLOSURE ABOUT MARKET RISK
The Partnership is exposed to interest rate risk 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 September 30, 2000 the Partnership had a note payable
outstanding in the amount of $32,655,082. Interest on this note is at a fixed
annual rate of 8.24% through June 2007.
Line-of-Credit: At September 30, 2000 the Partnership owed $375,000
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 on Form 8-K
There were no reports filed on Form 8-K during
the three months ended September 30, 2000
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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: November 13, 2000
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EXHIBIT INDEX
-------------
EXHIBIT NUMBER DESCRIPTION PAGE
-------------- ----------- ----
27 Financial Data Schedule
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