<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, 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
Balance Sheets
September 30, 1996 (Unaudited) and
December 31, 1995 3
Statements of Income
Nine months ended September 30, 1996
and 1995 and Three Months ended
September 30, 1996 and 1995 (Unaudited) 4
Statements of Cash Flows
Nine months ended September 30, 1996
and 1995 (Unaudited) 5
Notes to Financial Statements
September 30, 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 11
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<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 SEPT. 30, 1996 DEC. 31, 1995
-------------- -------------
(Unaudited)
<S> <C> <C>
Properties:
Land $11,644,603 $11,644,603
Buildings And Improvements 48,432,721 48,305,293
Furniture And Fixtures 347,312 295,715
Manufactured Homes 2,551,894 2,456,505
----------- -----------
$62,976,530 $62,702,116
Less Accumulated Depreciation 14,878,558 13,566,058
----------- -----------
$48,097,972 $49,136,058
Cash And Cash Equivalents 750,894 388,328
Marketable Securities 994,193 956,753
Mortgage-backed Securities 1,502,250 1,502,250
Unamortized financing costs 936,685 964,585
Investment 998,995 998,995
Other Assets 390,923 525,227
----------- -----------
Total Assets $53,671,912 $54,472,196
LIABILITIES AND PARTNERS' EQUITY
Accounts Payable $92,031 $154,712
Other Liabilities 1,017,150 827,387
Note Payable 29,969,587 29,894,586
----------- -----------
Total Liabilities $31,078,768 $30,876,685
Partners' Equity:
General Partner 217,415 214,555
Unit Holders 22,375,729 23,380,956
----------- -----------
Total Partners' Equity $22,593,143 $23,595,511
Total Liabilities And
Partners' Equity $53,671,912 $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>
Nine Months Ended Three Months Ended
Sept. 30, 1996 Sept. 30, 1995 Sept. 30, 1996 Sept. 30, 1995
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Income:
Rental Income $7,845,787 $7,534,150 $2,635,696 $2,528,844
Other 527,781 465,948 137,798 171,453
---------- ---------- ---------- ----------
Total Income $8,373,568 $8,000,098 $2,773,494 $2,700,297
Operating Expenses:
Administrative Expenses
(Including $411,783, 394,186, 137,938 And
132,402 In Property Management Fees Paid To
An Affliate For The Nine and Three Month Periods
Ended Sept. 30, 1996 And 1995, Respectively) 2,349,271 2,230,856 794,130 777,734
Property Taxes 657,958 618,096 219,535 206,043
Utilities 774,659 690,100 274,352 257,849
Property Operations 923,233 845,936 319,376 290,952
Depreciation And Amortization 1,417,050 1,405,500 472,350 467,500
Interest 1,965,444 2,070,959 650,975 684,955
---------- ---------- ---------- ----------
Total Operating Expenses $8,087,615 $7,861,447 $2,730,718 $2,685,033
---------- ---------- ---------- ----------
Net Income $ 285,953 $ 138,651 $ 42,776 $ 15,264
Income Per Unit: $ 0.09 $ 0.04 $ 0.01 $ 0.00
Distribution Per Unit $ 0.39 $ 0.53 $ 0.13 $ 0.13
Weighted Average Number Of Units Of Beneficial
Assignment Of Limited Partnership Interest
Outstanding During The Periods Ending
Sept. 30, 1996 And 1995 3,303,387 3,303,387 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>
Nine Months Ende
Sept. 30, 1996 Sept. 30, 1995
-------------- --------------
<S> <C> <C>
Cash Flows From Operations:
Net Income $ 285,953 $ 138,651
Adjustments To Reconcile Net Income To Net Cash
Provided By Operating Activities:
Depreciation 1,312,500 1,290,000
Amortization 104,550 115,500
(Increase) Decrease In Other Assets 132,655 293,370
Increase (Decrease) In Accounts Payables (62,681) (142,939)
Increase (Decrease) In Other Liabilities 189,763 132,639
----------- -----------
Total Adjustments 1,676,787 1,688,570
Net Cash Provided By
Operating Activities 1,962,740 1,827,221
Cash Flows From Investing Activities:
Purchase of Marketable Securities (37,440) (400,000)
Capital Expenditures (274,414) (729,525)
----------- -----------
Net Cash Provided By (Used In)
Investing Activities (311,854) (1,129,525)
Cash Flows From Financing Activities:
Distributions To Partners (1,288,320) (1,766,279)
Net Cash Provided By (Used In)
Financing Activities (1,288,320) (1,766,279)
Increase (Decrease) In Cash 362,566 (1,068,583)
Cash, Beginning 388,328 1,373,182
Cash, Ending $ 750,894 304,599
----------- -----------
</TABLE>
See Notes To Financial Statements
5
<PAGE> 6
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,
A MICHIGAN LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
September 30, 1996 (Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Presentation:
The balance sheet as of September 30, 1996, the related statements of income
and statements of cash flow for the periods ended September 30, 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>
NINE MONTHS ENDED THREE MONTHS ENDED
SEPT. 30, 1996 SEPT. 30, 1995 SEPT. 30,1996 SEPT. 30,1995
--------------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
Property management fee
to Uniprop, Inc.: $411,783 $394,186 $137,938 $132,402
</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 September 30, 1996 amounted to $515,126. The General Partner has decided
to distribute $495,508, or 3.51%, on an annualized basis, to the Unit Holders.
The difference between income generated by operations and cash distributed, or
$19,618, has been added to the Partnership's cash reserves.
Results of Operations
Overall, as illustrated in the following table, the Partnership's nine
properties reported combined occupancy of 90.1%, (3,000/3,330 sites), versus
87.9% (2,927/3,330) for September 1995. The average monthly homesite rent as of
September 30, 1996 was approximately $326, versus $315, an increase of 3.5%
from September 1995.
<TABLE>
<CAPTION>
TOTAL OCCUPIED OCCUPANCY AVERAGE
CAPACITY SITES RATE RENT
<S> <C> <C> <C> <C>
Ardmor Village 339 315 92.9% $311
Camelot Manor 335 317 94.6 297
Country Roads 312 275 88.1 215
Dutch Hills 278 268 96.4 295
El Adobe 371 355 95.7 359
Paradise Village 611 434 71.0 271
Stonegate Manor 308 295 95.8 297
Sunshine Village 356 327 91.9 381
West Valley 420 414 98.6 438
----- ----- ----- ----
TOTAL ON 9/30/96: 3,330 3,000 90.1% $326
TOTAL ON 9/30/95: 3,330 2,927 87.9% $315
</TABLE>
-7-
<PAGE> 8
During the third quarter of 1996, the Partnership generated gross revenues of
$2,773,494 a 2.7% increase over the $2,700,297 generated in the third quarter
of 1995. The net operating income generated by the Partnership during the third
quarter was $1,166,101, slightly less than the $1,167,719 generated during the
third quarter of 1995. The slight decline in net operating income was due to
higher non-recurring expenses. Cash flow for the third quarter, after mortgage
debt service and non-recurring items was $515,126 or 6.7% more than the $482,764
generated during the third quarter of 1995. The increase in cash flow was due to
lower mortgage debt service.
<TABLE>
<CAPTION>
GROSS NET OPERATING MORTGAGE CASH
REVENUES INCOME DEBT FLOW
<S> <C> <C> <C> <C>
ARDMOR VILLAGE $ 256,401 $ 127,298 $ 63,483 $ 63,815
CAMELOT MANOR 268,287 133,885 75,616 58,269
COUNTRY ROADS 183,751 28,359 -0- 28,359
DUTCH HILLS 220,735 107,252 55,900 51,352
EL ADOBE 389,708 222,689 119,817 102,872
PARADISE VILLAGE 308,158 31,793 -0- 31,793
STONEGATE MANOR 244,712 121,930 65,325 56,605
SUNSHINE VILLAGE 363,104 210,512 92,950 117,562
WEST VALLEY 529,618 309,259 177,884 131,375
PARTNERSHIP MGT: 9,020 (38,035) -0- (38,035)
OTHER NON
RECURRING EXPENSES: -- (88,841) -0- (88,841)
---------- ---------- -------- --------
QTR. END 9/30/96: $2,773,494 $1,166,101 $650,975 $515,126
QTR. END 9/30/95: $2,700,297 $1,167,719 $684,955 $482,764
</TABLE>
The properties' operating expenses for the first nine months of 1996 compared to
the same period in 1995, reflect increases in wages, legal fees, marketing
expenses, and taxes.
ARDMOR VILLAGE, in Lakeville, Minnesota, reported an occupancy of 92.9%
(315/339 sites) as of September 30, 1996, versus 86.7% as of September 30,
1995. The average rent was approximately $311 per homesite as of September 30,
1996, versus $302 as of September 30, 1995, an increase of 3.0%. For the third
quarter, Ardmor Village generated gross revenues of $256,401, a decrease from
the $273,221 reported for the same quarter in 1995. Net operating income for
the quarter was $127,298, a decrease from the $132,388 earned during the same
quarter in 1995. The decrease in gross revenues and net operating income is due
to higher receivables and a $13,000 increase in sewer rates.
Improvement and maintenance actions undertaken at the community during the
quarter included renovations to several of the community-owned homes, an
expansion to the RV storage area, and minor repairs to the pool.
CAMELOT MANOR, in Grand Rapids, Michigan, reported an occupancy of 94.6%
(317/335 sites) as of September 30, 1996, versus 94.3% as of September 30,
1995. The average rent was $297 per homesite as of September 30, 1996,
versus $288 as of September 30,
-8-
<PAGE> 9
1995, an increase of 3.1%. For the third quarter of 1996, Camelot Manor
generated gross revenues of $268,287, versus $262,855, for the same quarter in
1995. Net operating income for the quarter was $133,885, a slight increase
from the $133,816 earned during the same quarter in 1995.
Improvement and maintenance actions undertaken during the quarter involved
concrete work on sites where new homes have been scheduled to move-in,
expansion to the management office within the community center building, and
the on-going upgrading of electric pedestals throughout the community. Also
completed during the quarter was the installation of new landscaping around the
community mailbox.
COUNTRY ROADS, in Jacksonville, Florida, reported an occupancy of 88.1%
(275/312 sites) as of September 30, 1996, versus 83.0% as of September 30,
1995. The average rent was $215 per homesite as of September 30, 1996,
versus $205 during the same quarter of 1995, an increase of 4.9%. For the
third quarter of 1996, Country Roads generated gross revenues of $183,751,
11.2% more than the $165,326 reported during the same quarter in 1995. Net
operating income for the quarter was $28,359, versus a negative $21,735 for
the third quarter of 1995. The increase in net operating income is due to
higher average rent and higher occupancy.
Improvement and maintenance actions undertaken at the community during the
quarter continue to focus on renovating the community owned lease homes. As a
result of the renovations, management reported selling two of the
community-owned lease homes during the third quarter. Also on-going, is the
upgrading of vacant sites to accommodate larger homes that are being moved into
the community.
DUTCH HILLS, in Haslett, Michigan, reported an occupancy of 96.4% (268/278
sites) as of September 30, 1996, versus 93.9% as of September 30, 1995. The
average rent was $295 per homesite as of September 30, 1996, versus $287 as of
September 30, 1995, an increase of 2.8%. For the third quarter, Dutch Hills
generated gross revenues of $220,735, 3.4% more than the $213,398 reported
during the same quarter in 1995. Net operating income was $107,252, 14.0% more
than the $94,063 earned during the same quarter in 1995. The increase in income
was due to higher average rent and higher occupancy.
Improvement and maintenance actions undertaken during the third quarter were
limited to installing concrete piers on vacant sites for new homes moving into
the community. As stated in previous newsletters, due to the large number of
homes that have been moved into Dutch Hills in recent months, site improvement
costs have exceeded budgeted projections by almost an aggregate $15,000.
EL ADOBE, in Las Vegas, Nevada, reported an occupancy of 95.7% (355/371
sites) as of September 30, 1996, versus 92.7% as September 30, 1995. The
average rent on September 30, 1996 was $359 per homesite, versus $347 as of
September 30, 1995, an increase of 3.5%. For the third quarter of 1996, El
Adobe generated gross revenues of
-9-
<PAGE> 10
$389,708, 5.9% more than the $367,904 reported for the same quarter in 1995.
Net operating income for the quarter was $222,689, a 1.5% increase over the
$219,216 generated during the same quarter in 1995. The increase in net
operating income is the result of higher occupancy and higher average rent.
Improvement and maintenance actions undertaken during the third quarter focused
on upgrading old homesites with new water/sewer risers, electric pedistals,
and concrete driveways.
PARADISE VILLAGE, in Tampa, Florida, reported an occupancy of 71.0% (434/611
sites) as of September 30, 1996, versus 71.2% as September 30, 1995. The
average rent on September 30, 1996 was $271 per homesite, versus $257 as of
September 30, 1995, an increase of 5.5%. For the third quarter of 1996,
Paradise Village generated gross revenues of $308,158, versus the $304,325
reported for the same quarter in 1995. Net operating income for the quarter was
$31,793, a slight decrease from the $46,696 earned during the same quarter in
1995. This decrease is due to higher marketing expenses.
Improvement and maintenance actions undertaken during the quarter focused on
renovations to the community-owned lease homes, site upgrades for new homes
being moved into the community, and the on-going pressure washing program for
residents' homes.
STONEGATE MANOR, in Lansing, Michigan, reported an occupancy of 95.8% (295/308
sites) as of September 30, 1996, versus 93.2% as of September 30, 1995. The
average rent was $297 per homesite as of September 30, 1996, versus $289 as
of September 30, 1995, an increase of 2.8%. For the third quarter of 1996,
Stonegate Manor generated gross revenues of $244,712, versus $246,626 reported
for the same quarter in 1995. Net operating income for the quarter was
$121,930, slightly more than the $121,757 reported during the same quarter in
1995.
Improvement and maintenance actions undertaken during the quarter involved
upgrading electric pedestals and installing new concrete piers for new homes
that were moved into the community. Also completed during the quarter were
repairs to the community water system.
SUNSHINE VILLAGE, in Davie, Florida, reported an occupancy of 91.9% (327/356
sites) as of September 30, 1996, versus 94.7% as of September 30, 1995. The
average rent was $381 per homesite as of September 30, 1996, versus $368 as of
September 30, 1995, an increase of 3.5%. For the third quarter of 1996,
Sunshine Village generated gross revenues of $363,104, slightly less than the
$363,235 reported for the same quarter in 1995. Net operating income was
$210,512, versus the $216,318 reported for the same quarter in 1995. The
decline in income is due to lower than anticipated occupancy.
Improvement and maintenance actions undertaken during the quarter involved the
removal of several older homes within the community, the installation of new
signs at the community entrance, and the purchase of new pool furniture.
-10-
<PAGE> 11
WEST VALLEY, in Las Vegas, Nevada, reported an occupancy of 98.6% (414/420
sites) as of September 30, 1996, versus 93.8% as of September 30, 1995. The
average rent was $438 per homesite as of September 30, 1996, versus $428 as of
September 30, 1995, an increase of 2.3%. For the third quarter of 1996, West
Valley generated gross revenues of $529,618, 7.0% more than the $499,547
reported during the same quarter in 1995. Net operating income was $309,259,
13.5% more than the $272,573 generated during the same quarter in 1995. The
increase in net operating income from 1995 to 1996 was the result of higher
average rent and higher occupancy.
Improvement and maintenance actions undertaken during the quarter were limited
to general upgrading of landscaping around the community center building and
common areas.
MANAGEMENT EXPENSES
Net Partnership management expenses for the quarter amounted to $38,035.
Expenses of $47,055 (data processing, accounting and legal expenses, appraisals
and wages to employees of the Partnership) were offset by gross income of
$9,020, generated by interest on the Partnership's reserves and transfer fees.
The equivalent figures for the third quarter of 1995 were a negative $36,985,
$40,845 and $3,860, 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 September 30, 1996.
-11-
<PAGE> 12
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: November 14, 1996
-12-
<PAGE> 13
EXHIBIT INDEX
Exhibit
No. Description Page
- ------- ---------------------------- ----
27 Financial Data Schedule
-13-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 750,894
<SECURITIES> 994,193
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,141,894
<PP&E> 62,976,530
<DEPRECIATION> 14,878,558
<TOTAL-ASSETS> 53,671,912
<CURRENT-LIABILITIES> 1,109,181
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 22,593,144
<TOTAL-LIABILITY-AND-EQUITY> 53,671,912
<SALES> 0
<TOTAL-REVENUES> 8,373,568
<CGS> 0
<TOTAL-COSTS> 4,705,121
<OTHER-EXPENSES> 1,312,500
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 104,550
<INCOME-PRETAX> 285,953
<INCOME-TAX> 0
<INCOME-CONTINUING> 285,953
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 285,953
<EPS-PRIMARY> .09<F1>
<EPS-DILUTED> 0<F1>
<FN>
<F1>EPS Primary - In this RELP the earnings per share indicates income per LP unit.
</FN>
</TABLE>
