<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, 1996 Commission File No. 0-16701
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,
A MICHIGAN LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
MICHIGAN 38-2702802
(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)
(810) 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 II,
A MICHIGAN LIMITED PARTNERSHIP
INDEX
Page
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS 3
Balance Sheets
March 31, 1996 (Unaudited) and
December 31, 1995 3
Statements of Income
Three months ended March 31, 1996
and 1995 (Unaudited) 4
Statements of Cash Flows
Three months ended March 31, 1996
and 1995 (Unaudited) 5
Notes to Financial Statements
March 31, 1996 (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 12
-2-
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,
A MICHIGAN LIMITED PARTNERSHIP
BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
MARCH 31, 1996 DECEMBER 31, 1995
----------- -----------
(Unaudited)
<S> <C> <C>
Properties:
Land $11,644,603 $11,644,603
Buildings And Improvements 48,316,466 48,305,293
Furniture And Fixtures 332,883 295,715
Manufactured Homes 2,540,485 2,456,505
----------- -----------
$62,834,437 $62,702,116
Less Accumulated Depreciation 14,003,558 13,566,058
----------- -----------
$48,830,879 $49,136,058
Cash And Cash Equivalents 327,630 388,328
Marketable Securities 967,701 956,753
Mortgage-backed Securities 1,502,250 1,502,250
Unamortized financing costs 955,635 964,585
Investment 998,995 998,995
Other Assets 500,353 525,227
----------- -----------
Total Assets $54,083,443 $54,472,196
----------- -----------
LIABILITIES AND PARTNERS' EQUITY
Accounts Payable $94,015 $154,712
Other Liabilities 833,539 827,387
Note Payable 29,919,586 29,894,586
----------- -----------
Total Liabilities $30,847,140 $30,876,685
----------- -----------
Partners' Equity
General Partner 215,257 214,555
Unit Holders 23,021,046 23,380,956
----------- -----------
Total Partners' Equity $23,236,303 $23,595,511
----------- -----------
Total Liabilities And
Partners' Equity $54,083,443 $54,472,196
----------- -----------
</TABLE>
See Notes To Financial Statements
3
<PAGE> 4
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,
A MICHIGAN LIMITED PARTNERSHIP
STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, 1996 March 31, 1995
-------------- --------------
<S> <C> <C>
Income:
Rental Income $2,582,022 $2,504,395
Other 189,207 133,382
---------- ----------
Total Income $2,771,229 $2,637,777
---------- ----------
Operating Expenses:
Administrative Expenses
(Including $136,383 And $130,877
In Property Management Fees Paid To
An Affliate For The Three Month Periods
Ended March 31, 1996 And 1995, Respectively) 788,688 709,817
Property Taxes 219,174 206,004
Utilities 236,380 210,691
Property Operations 320,011 240,808
Depreciation And Amortization 473,250 469,000
Interest 663,494 690,320
---------- ----------
Total Operating Expenses $2,700,997 $2,526,640
---------- ----------
Net Income $ 70,232 $ 111,137
---------- ----------
Income Per Unit: $ 0.02 $ 0.03
Distribution Per Unit $ 0.13 $ 0.20
Weighted Average Number Of Units Of Beneficial
Assignment Of Limited Partnership Interest
Outstanding During The Periods Ending
March 31, 1996 And 1995 3,303,387 3,303,387
</TABLE>
See Notes To Financial Statements
4
<PAGE> 5
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,
A MICHIGAN LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, 1996 MARCH 31, 1995
-------------- --------------
<S> <C> <C>
Cash Flows From Operations:
Net Income $ 70,232 $ 111,137
Adjustments To Reconcile Net Income
To Net Cash
Provided By Operating Activities:
Depreciation 437,500 430,000
Amortization 35,750 39,000
(Increase) Decrease In Other Assets 23,074 53,734
Increase (Decrease) In Accounts Payable (60,697) (92,623)
Increase (Decrease) In Other Liabilities 6,152 (26,751)
-------- ----------
Total Adjustments 441,779 403,360
-------- ----------
Net Cash Provided By
Operating Activities 512,011 514,497
-------- ----------
Cash Flows From Investing Activities:
Purchase of Marketable Securities (10,948)
Capital Expenditures (132,321) (71,772)
-------- ----------
Net Cash Provided By (Used In)
Investing Activities (143,269) (71,772)
-------- ----------
Cash Flows From Financing Activities:
Distributions To Partners (429,440) (671,186)
-------- ----------
Net Cash Provided By (Used In)
Financing Activities (429,440) (671,186)
-------- ----------
Increase (Decrease) In Cash (60,698) (228,461)
Cash, Beginning 388,328 1,373,182
-------- ----------
Cash, Ending $327,630 1,144,721
-------- ----------
</TABLE>
See Notes To Financial Statements
5
<PAGE> 6
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,
A MICHIGAN LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
March 31, 1996 (Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Presentation:
The balance sheet as of March 31, 1996, the related statements of income and
statements of cash flow for the periods ended March 31, 1996 and 1995 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, 1996 MARCH 31, 1995
-------------- --------------
<S> <C> <C>
Property management fee
to Uniprop, Inc. $136,383 $130,877
</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 nine manufactured
home communities.
Liquidity
Partnership liquidity is based 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.
The cash flow generated by the Partnership's operations during the quarter
ending March 31, 1996 amounted to $543,482. The General Partner has decided to
distribute $429,440, or 3.04%, on an annualized basis, to the Unit Holders.
The difference between income generated by operations and cash distributed, or
$114,042, has been added to the Partnership's cash reserves.
The General Partner will continue to monitor on-going cash flow generated by
the Partnership's nine properties during the coming quarters. If cash flow
generated is lower than the amount needed to maintain the current distribution
level, the General Partner may elect to reduce the level of future
distributions paid to Unit Holders.
-7-
<PAGE> 8
Results of Operations
OVERALL, as illustrated in the following table, the Partnership's nine
properties reported a combined occupancy of 89.2% (2,972/3,330 sites), versus
88.4% (2,943/3,330) for March 1995. The average monthly homesite rent as of
March 31, 1996 was approximately $318, versus $309, an increase of 2.9% from
March 31, 1995.
<TABLE>
<CAPTION>
TOTAL OCCUPIED OCCUPANCY AVERAGE
CAPACITY SITES RATE RENT
<S> <C> <C> <C> <C>
Ardmor Village 339 303 89.4% $306
Camelot Manor 335 323 96.4 291
Country Roads 312 269 86.2 206
Dutch Hills 278 264 95.0 292
El Adobe 371 354 95.4 348
Paradise Village 611 440 72.0 257
Stonegate Manor 308 288 93.5 295
Sunshine Village 356 329 92.4 381
West Valley 420 402 95.7 428
----- ----- ---- ----
TOTAL ON 3/31/96: 3,330 2,927 89.2% $315
TOTAL ON 3/31/95: 3,330 2,943 88.4% $309
</TABLE>
During the first quarter of 1996, the Partnership generated gross revenues of
$2,771,229, a 5.0% increase over the $2,637,777 generated in the first quarter
of 1995. The net operating income generated by the Partnership during the
first quarter was $1,206,975, or 5.0% less than the $1,270,457 generated during
the first quarter of 1995. Cash flow for the first quarter, after mortgage
debt service and non-recurring items was $543,482, or 6.3% less than the
$580,138 generated during the first quarter of 1995. The decline in net
operating income and cash flow from first quarter 1995 to first quarter 1996 is
due to higher non-recurring expenses of approximately $80,000.
<TABLE>
<CAPTION>
GROSS NET OPERATING MORTGAGE CASH
REVENUES INCOME DEBT FLOW
<S> <C> <C> <C> <C>
ARDMOR VILLAGE $289,960 $ 157,336 $ 64,704 $ 92,632
CAMELOT MANOR 263,879 142,567 77,071 65,496
COUNTRY ROADS 166,825 25,129 -0- 25,129
DUTCH HILLS 220,023 112,851 56,975 55,876
EL ADOBE 366,536 237,891 122,121 115,770
PARADISE VILLAGE 324,739 43,795 -0- 43,795
STONEGATE MANOR 249,921 135,114 66,581 68,533
SUNSHINE VILLAGE 373,792 227,370 94,737 132,633
WEST VALLEY 503,774 296,250 181,304 114,946
PARTNERSHIP MGT: 11,780 (71,017) -0- (71,017)
OTHER NON
RECURRING EXPENSES: -- (100,311) -0- (100,311)
-------- --------- -------- --------
QTR. END 3/31/96: $2,771,229 $1,206,975 $663,493 $543,482
QTR. END 3/31/95: $2,637,777 $1,270,457 $690,320 $580,137
</TABLE>
-8-
<PAGE> 9
The Partnership's operating expenses for the first quarter of 1996 were
approximately $96,623 higher than the Partnership's operating expenses for the
same period in 1995. The higher operating expenses in 1996 were the result of
increases in marketing expenses, legal and professional fees, and taxes.
ARDMOR VILLAGE, in Lakeville, Minnesota, reported an occupancy of 89.4%
(303/339 sites) as of March 31, 1996, versus 85.0% as of March 31, 1995. The
average rent was approximately $306 per homesite as of March 31, 1996, versus
$298 as of March 31, 1995, an increase of 2.7%. For the first quarter, Ardmor
Village generated gross revenues of $289,960, or 10.4% more than the $262,610
reported for the same quarter in 1995. Net operating income for the quarter
was $157,336, or 10.8% higher than the $141,928 earned during the same quarter
in 1995. The increases in both gross revenues and net operating income was due
to higher occupancy and lower operating expenses.
Improvement and maintenance actions undertaken during the quarter involved
improvements to vacant homesites in preparation for new residents moving in,
repairs to several water leaks, and renovations to community-owned homes.
Management has budgeted approximately $31,000 for capital improvements at
Ardmor Village for 1996. The most significant items budgeted are $11,000 for a
new maintenance truck and $6,000 for additional landscaping.
CAMELOT MANOR, in Grand Rapids, Michigan, reported an occupancy of 96.4%
(323/335 sites) as of March 31, 1996, versus 94.9% as of March 31, 1995. The
average rent was $291 per homesite as of March 31, 1996, versus $282 as of
March 31, 1995, an increase of 3.2%. For the first quarter of 1996, Camelot
Manor generated gross revenues of $263,879, or slightly more than the $257,536
reported in the same quarter in 1995. Net operating income for the quarter was
$142,567, or 3.7% less than the $148,148 earned during the same quarter in
1995. The decline in net operating income from 1996 to 1995 was due to higher
operating expenses and marketing incentives paid to dealers.
Improvement and maintenance actions undertaken during the first quarter
involved the upgrading of vacant homesites for new homes and replacement of
old electrical pedestals. Management has budgeted approximately $34,000 in
capital improvements for Camelot Manor for 1996. The most significant items
budgeted are for road and site improvements.
COUNTRY ROADS, in Jacksonville, Florida, reported an occupancy of 86.2% (269/312
sites) as of March 31, 1996 versus 82.4% as of March 31, 1995. The average rent
was $206 per homesite as of March 31, 1996, versus $205 during the same quarter
of 1995. For the first quarter of 1996, Country Roads generated gross revenues
of $166,825, or 16.8% more than the $142,866 reported during the same quarter in
1995. Net operating income for the quarter was $25,129, versus $3,774 for the
first quarter of 1995. The increase in net operating income is due to higher
occupancy.
Improvement and maintenance actions undertaken at the community during the
quarter included repairs/renovations to the community pool, the purchase of new
playground
-9-
<PAGE> 10
equipment, and the installation of new landscaping around the pool
area and entrance to the community. Management has budgeted approximately
$43,000 in capital improvements for Country Roads for 1996. The most
significant items budgeted are $18,000 for a new maintenance truck and $7,000
for the renovations to the pool.
DUTCH HILLS, in Haslett, Michigan, reported an occupancy of 95.0% (264/278
sites) as of March 31, 1996, versus 91.7% as of March 31, 1995. The average
rent was $292 per homesite as of March 31, 1996, versus $284 as of March 31,
1995, an increase of 2.8%. For the first quarter, Dutch Hills generated gross
revenues of $220,023, or 3.6% more than the $212,406 reported during the same
quarter in 1995. Net operating income was $112,851, or 9.0% less than the
$123,529 earned during the same quarter in 1995. The decline in income was due
to higher marketing incentives.
Improvement and maintenance actions undertaken during the first quarter were
limited to water line repairs and site preparation for new homes that will be
moved into the community. Management has budgeted approximately $20,000 in
capital improvements for Dutch Hills for 1996. The most significant items
budgeted include $7,000 for upgrading piers and electric pedestals, and $4,800
for asphalt resurfacing to residents' driveways.
EL ADOBE, in Las Vegas, Nevada, reported an occupancy of 95.4% (354/371 sites)
as of March 31, 1996, versus 91.9% as March 31, 1995. The average rent on March
31, 1996 was $348 per homesite, versus $337 as of March 31, 1995, an increase
of 3.3%. For the first quarter of 1996, El Adobe generated gross revenues of
$366,536, or 5.4% more than the $347,794 reported for the same quarter in
1995. Net operating income for the quarter was $237,891, a 4.0% increase over
the $228,607 generated during the same quarter in 1995. The increase in net
operating income is due to higher average occupancy.
Improvement and maintenance actions undertaken during the first quarter were
limited to landscaping maintenance and minor repairs to water lines within the
community. Management has budgeted approximately $30,000 in capital
improvements for El Adobe for 1996. The most significant items budgeted include
$12,000 for new playground equipment and $6,000 in asphalt driveway repairs.
Also budgeted is $4,000 for improvements to the community center building.
PARADISE VILLAGE, in Tampa, Florida, reported an occupancy of 72.0% (440/611
sites) as of March 31, 1996, versus 75.9% as March 31, 1995. The average rent
on March 31, 1996 was $257 per homesite, versus $247 as of March 31, 1995, an
increase of 4.1%. For the first quarter of 1996, Paradise Village generated
gross revenues of $324,739, versus the $322,047 reported for the same quarter in
1995. Net operating income for the quarter was $43,795, versus the $13,769
earned during the same quarter in 1995.
Improvement and maintenance actions undertaken during the quarter focused on
repairs to the community-owned lease homes and extensive removal and trimming
of old overgrown trees. Management has budgeted approximately $128,000 in
capital improvements at Paradise Village for 1996. The most significant items
budgeted include
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<PAGE> 11
$60,000 to repair community-owned lease homes, $7,600 to resurface the pool, and
$8,000 for repairs/improvements to the sewage treatment facility.
STONEGATE MANOR, in Lansing, Michigan, reported an occupancy of 93.5% (288/308
sites) as of March 31, 1996, versus 92.5% as of March 31, 1995. The average
rent was $295 per homesite as of March 31, 1996, versus $287 as of March 31,
1995, an increase of 2.8%. For the first quarter of 1996, Stonegate Manor
generated gross revenues of $249,921, 4.0% more than the $240,331 reported for
the same quarter in 1995. Net operating income for the quarter was $135,114,
4.0% less than the $140,699 reported during the same quarter in 1995. The
decline in net operating income from 1995 to 1996 was due to non-recurring
repair and maintenance items.
Improvement and maintenance actions undertaken during the quarter involved
upgrading electric pedestals and installing new concrete piers for new homes
that will be moved into the community. Also completed during the quarter were
repairs to the well house. Management has budgeted approximately $15,000 in
capital improvements for Stonegate Manor for 1996. The most significant items
budgeted include $4,000 for replacement of old water system gate valves, and
$3,000 for upgrading electric pedestals and piers.
SUNSHINE VILLAGE, in Davie, Florida, reported an occupancy of 92.4% (329/356
sites) as of March 31, 1996, versus 94.9% as of March 31, 1995. The average
rent was $381 per homesite as of March 31, 1996, versus $365 as of March 31,
1995, an increase of 4.4%. For the first quarter of 1996, Sunshine Village
generated gross revenues of $373,792, slightly more than the $363,413 reported
for the same quarter in 1995. Net operating income was $227,370, versus
$229,193, for the same quarter in 1995. The small decline in net operating
income from 1995 to 1996 is due to lower occupancy and higher operating
expenses.
Improvement and maintenance actions undertaken during the quarter focused on
setting up the new model home sales center and the on-going pressure wash
program for older homes within the community. Management has budgeted
approximately $30,000 in capital improvements for Sunshine Village for 1996.
The most significant items budgeted include $7,200 for the removal of old homes
within the community and $6,000 for tree trimming and removal.
WEST VALLEY, in Las Vegas, Nevada, reported an occupancy of 95.7% (402/420
sites) as of March 31, 1996, versus 94.5% as of March 31, 1995. The average
rent was $428 per homesite as of March 31, 1996, versus $412 as of March 31,
1995, an increase of 3.9%. For the first quarter of 1996, West Valley generated
gross revenues of $503,774, or 6.0% more than the $475,583 reported during the
same quarter in 1995. Net operating income was $296,250, or 11.0% less than the
$332,223 generated during the same quarter in 1995. The decline in net operating
income from 1995 to 1996 was the result of higher marketing expenses.
Improvement and maintenance actions undertaken during the quarter involved
installing new grass and landscaping on the community grounds, repainting the
interior of the
-11-
<PAGE> 12
community center building, and restriping the parking areas. Management has
budgeted approximately $32,000 in capital improvements at West Valley for 1996.
The most significant items budgeted include $17,000 for a new maintenance truck
and $8,000 for new playground equipment. Also budgeted for 1996 is $6,000 for
renovations to the community manager's home.
MANAGEMENT EXPENSES
Net partnership management expenses for the quarter amounted to $71,780.
Expenses of $83,560 (data processing, accounting and legal expenses, appraisals
and wages to employees of the Partnership) were offset by gross income of
$11,780, generated by interest on the Partnership's reserves and transfer fees.
The equivalent figures for the first quarter of 1995 were $70,536, $83,727 and
$13,191, respectively.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON 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 March 31, 1996.
-12-
<PAGE> 13
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 II, a Michigan Limited Partnership
BY: Genesis Associates Limited Partnership,
General Partner
BY: Uniprop, Inc.,
its Managing General Partner
By: /s/ Paul M. Zlotoff
--------------------------------
Paul M. Zlotoff, President
By: /s/ Gloria A. Koster
--------------------------------
Gloria A. Koster, Principal Financial Officer
Dated: May 15, 1996
-13-
<PAGE> 14
Exhibit Index
-------------
Exhibit No. Description
- ----------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 327,630
<SECURITIES> 2,469,951
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,795,684
<PP&E> 62,834,437
<DEPRECIATION> 14,003,558
<TOTAL-ASSETS> 54,083,443
<CURRENT-LIABILITIES> 927,030
<BONDS> 29,919,586
0
0
<COMMON> 0
<OTHER-SE> 23,236,303
<TOTAL-LIABILITY-AND-EQUITY> 54,083,443
<SALES> 0
<TOTAL-REVENUES> 2,771,229
<CGS> 0
<TOTAL-COSTS> 1,564,253
<OTHER-EXPENSES> 437,500
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 699,244
<INCOME-PRETAX> 70,232
<INCOME-TAX> 0
<INCOME-CONTINUING> 70,232
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 70,232
<EPS-PRIMARY> .02 <F1>
<EPS-DILUTED> 0
<FN>
<F1>In this Limited Partnership the earnings per share indicates income per
Limited Partnership unit.
</FN>
</TABLE>
