<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 June 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
June 30, 1996 (Unaudited) and
December 31, 1995 3
Statements of Income
Six months ended June 30, 1996
and 1995 (Unaudited) 4
Statements of Cash Flows
Six months ended June 30, 1996
and 1995 (Unaudited) 5
Notes to Financial Statements
June 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
-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 JUNE 30, 1996 DECEMBER 31, 1995
------------- -----------------
(Unaudited)
<S> <C> <C>
Properties:
Land $11,644,603 $11,644,603
Buildings And Improvements 48,366,747 48,305,293
Furniture And Fixtures 347,188 295,715
Manufactured Homes 2,529,143 2,456,505
----------- -----------
$62,887,681 $62,702,116
Less Accumulated Depreciation 14,441,058 13,566,058
----------- -----------
$48,446,623 $49,136,058
Cash And Cash Equivalents 656,770 388,328
Marketable Securities 991,108 956,753
Mortgage-backed Securities 1,502,250 1,502,250
Unamortized financing costs 946,685 964,585
Investment 998,995 998,995
Other Assets 396,356 525,227
----------- -----------
Total Assets $53,938,787 $54,472,196
----------- -----------
LIABILITIES AND PARTNERS' EQUITY
Accounts Payable $ 77,177 $ 154,712
Other Liabilities 937,215 827,387
Note Payable 29,944,587 29,894,586
----------- -----------
Total Liabilities $30,958,979 $30,876,685
----------- -----------
Partners' Equity:
General Partner 216,987 214,555
Unit Holders 22,762,821 23,380,956
----------- -----------
Total Partners' Equity $22,979,808 $23,595,511
----------- -----------
Total Liabilities And
Partners' Equity $53,938,787 $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>
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30, 1996 JUNE 30, 1995 JUNE 30, 1996 JUNE 30, 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Income:
Rental Income $5,210,091 $5,005,306 $2,628,069 $2,500,911
Other 389,983 294,495 200,776 161,113
---------- ---------- ---------- ----------
Total Income $5,600,074 $5,299,801 $2,828,845 $2,662,024
---------- ---------- ---------- ----------
Operating Expenses:
Administrative Expenses
(Including $273,845, 261,784, 137,462 And
130,907 In Property Management Fees Paid To
An Affiliate For The Six and Three Month Periods
Ended June 30, 1996 And 1995, Respectively) 1,555,141 1,453,122 766,453 743,305
Property Taxes 438,423 412,053 219,249 206,049
Utilities 500,307 432,251 263,927 221,560
Property Operations 603,857 554,984 283,846 314,176
Depreciation And Amortization 944,700 938,000 471,450 469,000
Interest 1,314,469 1,386,004 650,975 695,684
---------- ---------- ---------- ----------
Total Operating Expenses $5,356,897 $5,176,414 $2,655,900 $2,649,774
---------- ---------- ---------- ----------
Net Income $ 243,177 $ 123,387 $ 172,945 $ 12,250
---------- ---------- ---------- ----------
Income Per Unit: $0.07 $0.04 $0.05 $0.00
Distribution Per Unit $0.26 $0.41 $0.13 $0.20
Weighted Average Number Of Units Of Beneficial
Assignment Of Limited Partnership Interest
Outstanding During The Periods Ending
June 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>
SIX MONTHS ENDED
JUNE 30, 1996 JUNE 30, 1995
------------- -------------
<S> <C> <C>
Cash Flows From Operations:
Net Income $ 243,177 $ 123,387
Adjustments To Reconcile Net Income To Net Cash
Provided By Operating Activities:
Depreciation 875,000 860,000
Amortization 69,700 78,000
(Increase) Decrease In Other Assets 77,072 112,297
Increase (Decrease) In Accounts Payables (77,535) (94,570)
Increase (Decrease) In Other Liabilities 159,828 60,326
---------- -----------
Total Adjustments 1,104,065 1,016,053
---------- -----------
Net Cash Provided By
Operating Activities 1,347,242 1,139,440
---------- -----------
Cash Flows From Investing Activities:
Purchase of Marketable Securities (34,355) (400,000)
Capital Expenditures (185,565) (333,083)
---------- -----------
Net Cash Provided By (Used In)
Investing Activities (219,920) (733,083)
---------- -----------
Cash Flows From Financing Activities:
Distributions To Partners (858,880) (1,342,372)
---------- -----------
Net Cash Provided By (Used In)
Financing Activities (858,880) (1,342,372)
---------- -----------
Increase (Decrease) In Cash 268,442 (936,015)
Cash, Beginning 388,328 1,373,182
---------- -----------
Cash, Ending $ 656,770 437,167
---------- -----------
</TABLE>
See Notes To Financial Statements
5
<PAGE> 6
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,
A MICHIGAN LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
June 30, 1996 (Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Presentation:
The balance sheet as of June 30, 1996, the related statements of income and
statements of cash flow for the periods ended June 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>
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30, 1996 JUNE 30, 1995 JUNE 30, 1996 JUNE 30, 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Property management fee
to Uniprop, Inc.: $273,845 $261,784 $137,462 $130,907
</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 June 30, 1996 amounted to $644,395. 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
$214,955, 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 89.8%,(2,989/3,330 sites), versus
87.7% (2,922/3,330) for June 1995. The average monthly homesite rent as of June
30, 1996 was approximately $323, versus $308, an increase of 4.9% from June
1995.
<TABLE>
<CAPTION>
TOTAL OCCUPIED OCCUPANCY AVERAGE
CAPACITY SITES RATE RENT
<S> <C> <C> <C> <C>
Ardmor Village 339 312 92.0% $308
Camelot Manor 335 319 95.2 294
Country Roads 312 282 94.0 214
Dutch Hills 278 268 96.4 293
El Adobe 371 354 95.4 358
Paradise Village 611 429 70.2 271
Stonegate Manor 308 296 96.1 296
Sunshine Village 356 322 90.4 381
West Valley 420 407 96.9 429
--- --- ---- ----
TOTAL ON 6/30/96: 3,330 2,989 89.8% $323
TOTAL ON 6/30/95: 3,330 2,922 87.7% $308
</TABLE>
-7-
<PAGE> 8
During the second quarter of 1996, the Partnership generated gross revenues of
$2,828,846, a 6.3% increase over the $2,662,024 generated in the second
quarter of 1995. The net operating income generated by the Partnership during
the second quarter was $1,295,371, a 10.1% increase over the $1,176,934
generated during the second quarter of 1995. Cash flow for the second quarter,
after mortgage debt service and non-recurring items was $644,395, or 33.9 %
more than the $481,250 generated during the second quarter of 1995. The
increase in cash flow is due to higher average occupancy and lower interest
expense on the floating rate mortgage debt.
<TABLE>
<CAPTION>
GROSS NET OPERATING MORTGAGE CASH
REVENUES INCOME DEBT FLOW
<S> <C> <C> <C> <C>
ARDMOR VILLAGE $ 284,897 $ 166,677 $ 63,484 $103,193
CAMELOT MANOR 272,680 144,917 76,617 69,300
COUNTRY ROADS 177,694 18,423 -0- 18,423
DUTCH HILLS 219,877 112,096 55,900 56,196
EL ADOBE 386,086 250,726 119,816 130,910
PARADISE VILLAGE 331,509 72,603 -0- 72,603
STONEGATE MANOR 232,179 100,002 65,325 34,677
SUNSHINE VILLAGE 372,889 225,316 92,950 132,366
WEST VALLEY 524,544 321,200 177,884 143,316
PARTNERSHIP MGT: 26,491 (55,156) -0- (55,156)
OTHER NON
RECURRING EXPENSES: -- (61,433) -0- (61,433)
---------- ---------- -------- --------
QTR. END 6/30/96: $2,828,846 $1,295,371 $650,976 $644,395
QTR. END 6/30/95: $2,662,024 $1,176,934 $695,685 $481,250
</TABLE>
The properties operating expenses for the first six 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 92.0%
(312/339 sites) as of June 30, 1996, versus 85.3% as of June 30, 1995. The
average rent was approximately $308 per homesite as of June 30, 1996, versus
$300 as of June 30, 1995, an increase of 2.7%. For the second quarter, Ardmor
Village generated gross revenues of $284,897, 7.9% more than the $263,992
reported for the same quarter in 1995. Net operating income for the quarter
was $166,677, 16.0% higher than the $143,634 earned during the same quarter
in 1995. The increases in both gross revenues and net operating income are due
to higher occupancy and lower operating expenses.
Improvement and maintenance actions undertaken during the quarter focused on
installing new landscaping around the community center building and repairs to
the pool. Also completed during the quarter was the budgeted asphalt
resurfacing to community roads.
CAMELOT MANOR, in Grand Rapids, Michigan, reported an occupancy of 95.2%
(319/335 sites) as of June 30, 1996, versus 94.3% as of June 30, 1995. The
average rent was $294 per homesite as of June 30, 1996, versus $285 as of
June 30, 1995, an increase of
-8-
<PAGE> 9
3.2%. For the second quarter of 1996, Camelot Manor generated gross revenues
of $272,680, versus $266,785, for the same quarter in 1995. Net operating
income for the quarter was $144,917, 3.0% more than the $140,652 earned
during the same quarter in 1995.
Improvement and maintenance actions undertaken during the quarter involved
renovations to the community center building, concrete work on sites where new
homes are scheduled to be moved in, and repairs to a bridge within the
community. Also completed during the quarter was the installation of new
landscaping at the entrance of the community.
COUNTRY ROADS, in Jacksonville, Florida, reported an occupancy of 90.4%
(282/312 sites) as of June 30, 1996, versus 81.1% as of June 30, 1995. The
average rent was $214 per homesite as of June 30, 1996, versus $205 during
the same quarter of 1995, an increase of 4.4%. For the second quarter of
1996, Country Roads generated gross revenues of $177,694, 14.9% more than the
$154,625 reported during the same quarter in 1995. Net operating income for
the quarter was $18,423, versus $10,492 for the second 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 owned lease homes, the
purchase of new pool furniture, and the upgrading of old electric pedestals
throughout the community. Also on-going is the upgrading of vacant sites to
accommodate larger homes.
DUTCH HILLS, in Haslett, Michigan, reported an occupancy of 96.4% (268/278
sites) as of June 30, 1996, versus 91.7% as of June 30, 1995. The average rent
was $293 per homesite as of June 30, 1996, versus $286 as of June 30, 1995, an
increase of 2.5%. For the second quarter, Dutch Hills generated gross revenues
of $219,877, 1.7% more than the $216,290 reported during the same quarter in
1995. Net operating income was $112,096, 9.5% less than the $122,760 earned
during the same quarter in 1995. The decline in income was due to higher
operating expenses and marketing incentives.
Improvement and maintenance actions undertaken during the second quarter
focused on installing concrete piers on vacant sites and asphalt resurfacing
to residents' driveways. Due to the significant number of homes that have been
moved into Dutch Hills in recent months, management has exceeded budgeted
projections for site improvement costs by almost 300.0%.
EL ADOBE, in Las Vegas, Nevada, reported an occupancy of 95.4% (354/371 sites)
as of June 30, 1996, versus 92.2% as June 30, 1995. The average rent on June
30, 1996 was $358 per homesite, versus $347 as of June 30, 1995, an increase
of 3.2%. For the second quarter of 1996, El Adobe generated gross revenues of
$386,086, 10.3% more than the $350,076 reported for the same quarter in 1995.
Net operating income for the
-9-
<PAGE> 10
quarter was $250,726, a 13.7% increase over the $220,610 generated during the
same quarter in 1995. The increase in net operating income is a result higher
occupancy and higher average rent.
Improvement and maintenance actions undertaken during the second quarter were
limited to the replacement of a HVAC unit at the community center building and
resurfacing of several residents' driveways.
PARADISE VILLAGE, in Tampa, Florida, reported an occupancy of 70.2% (429/611
sites) as of June 30, 1996, versus 73.0% as June 30, 1995. The average rent on
June 30, 1996 was $271 per homesite, versus $256 as of March 31, 1995, an
increase of 5.9%. For the second quarter of 1996, Paradise Village generated
gross revenues of $331,509, versus the $309,350 reported for the same quarter
in 1995. Net operating income for the quarter was $72,603, a significant
increase from the $15,992 earned during the same quarter in 1995. The
increase in net operating income is a result of higher average rent and lower
operating expenses.
Improvement and maintenance actions undertaken during the quarter focused on
renovations to the community-owned lease homes and repairs to the community
water system. Also completed at Paradise Village during the second quarter
were improvements to vacant homesites.
STONEGATE MANOR, in Lansing, Michigan, reported an occupancy of 96.1% (296/308
sites) as of June 30, 1996, versus 92.5% as of June 30, 1995. The average rent
was $296 per homesite as of June 30, 1996, versus $288 as of June 30, 1995,
an increase of 2.8%. For the second quarter of 1996, Stonegate Manor generated
gross revenues of $232,179, versus $237,201 reported for the same quarter in
1995. Net operating income for the quarter was $100,002, 10.3% less than the
$110,312 reported during the same quarter in 1995. The decline in net operating
income from 1995 to 1996 was due to higher operating expenses and marketing
incentives.
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 gate valves on the community water system.
SUNSHINE VILLAGE, in Davie, Florida, reported an occupancy of 90.4% (322/356
sites) as of June 30, 1996, versus 94.7% as of June 30, 1995. The average rent
was $381 per homesite as of June 30, 1996, versus $367 as of June 30, 1995, an
increase of 3.8%. For the second quarter of 1996, Sunshine Village generated
gross revenues of $372,889, 2.8% more than the $362,893 reported for the same
quarter in 1995. Net operating income was $225,316, 2.0% more than the
$220,994 reported for the same quarter in 1995.
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<PAGE> 11
Improvement and maintenance actions undertaken during the quarter involved the
purchase and removal of several older homes within the community, the on-going
pressure wash program for residents' homes, and the replacement of pool
furniture.
WEST VALLEY, in Las Vegas, Nevada, reported an occupancy of 96.9% (407/420
sites) as of June 30, 1996, versus 95.0% as of June 30, 1995. The average rent
was $429 per homesite as of June 30, 1996, versus $412 as of June 30, 1995, an
increase of 4.1%. For the second quarter of 1996, West Valley generated gross
revenues of $524,544, 6.7% more than the $491,786 reported during the same
quarter in 1995. Net operating income was $321,201, slightly less than the
$323,824 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
block walls surrounding the community, and on-going repairs to street lights
throughout the community.
MANAGEMENT EXPENSES
Net Partnership management expenses for the quarter amounted to $55,156.
Expenses of $81,647 (data processing, accounting and legal expenses, appraisals
and wages to employees of the Partnership) were offset by gross income of
$26,491, generated by interest on the Partnership's reserves and transfer fees.
The equivalent figures for the second quarter of 1995 were $77,157, $86,183
and $9,026, 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 June 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: August 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 656,770
<SECURITIES> 2,493,358
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,044,234
<PP&E> 62,887,681
<DEPRECIATION> 14,441,058
<TOTAL-ASSETS> 53,938,787
<CURRENT-LIABILITIES> 1,014,392
<BONDS> 29,944,587
0
0
<COMMON> 0
<OTHER-SE> 22,979,808
<TOTAL-LIABILITY-AND-EQUITY> 53,938,787
<SALES> 0
<TOTAL-REVENUES> 5,600,074
<CGS> 0
<TOTAL-COSTS> 3,097,728
<OTHER-EXPENSES> 875,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,384,169
<INCOME-PRETAX> 243,177
<INCOME-TAX> 0
<INCOME-CONTINUING> 243,177
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 243,177
<EPS-PRIMARY> .07<F1>
<EPS-DILUTED> 0
<FN>
<F1>In this RELP the earnings per share indicates income per Limited Partnership
unit.
</FN>
</TABLE>
