<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 Quarterly Period Ended June 30, 1997 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)
(248) 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, 1997 (Unaudited) and
December 31, 1996 3
Statements of Income
Six months ended June 30, 1997
and 1996 and Three Months ended
June 30, 1997 and 1996 (Unaudited) 4
Statements of Cash Flows
Six months ended June 30, 1997
and 1996 (Unaudited) 5
Notes to Financial Statements
June 30, 1997 (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 JUNE 30, 1997 DEC. 31, 1996
------------- -------------
(Unaudited)
<S> <C> <C>
Properties:
Land $11,644,603 $11,644,603
Buildings And Improvements 48,779,179 48,558,632
Furniture And Fixtures 360,016 342,651
Manufactured Homes 2,329,651 2,535,831
----------- -----------
$63,113,449 $63,081,717
Less Accumulated Depreciation 16,209,988 15,329,988
----------- -----------
$46,903,461 $47,751,729
Cash And Cash Equivalents 1,235,431 1,144,427
Marketable Securities 818,182 818,182
Mortgage-backed Securities 1,502,250 1,502,250
Unamortized financing costs 912,457 930,139
Investment 998,995 998,995
Other Assets 477,321 437,659
----------- -----------
Total Assets $52,848,097 $53,583,381
LIABILITIES AND PARTNERS' EQUITY
Accounts Payable $ 118,295 $ 155,889
Other Liabilities 947,691 1,194,387
Note Payable 30,041,487 30,025,487
----------- -----------
Total Liabilities $31,107,473 $31,375,763
Partners' Equity:
General Partner 223,755 218,515
Unit Holders 21,516,869 21,989,103
----------- -----------
Total Partners' Equity $21,740,624 $22,207,618
Total Liabilities And
Partners' Equity $52,848,097 $53,583,381
</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, 1997 JUNE 30, 1996 JUNE 30, 1997 JUNE 30, 1996
<S> <C> <C> <C> <C>
Income:
Rental Income $5,532,927 $5,210,091 $2,786,045 $2,628,069
Other 344,800 389,983 156,175 200,776
---------- ----------- ---------- ----------
Total Income $5,877,727 $5,600,074 $2,942,220 $2,828,845
Operating Expenses:
Administrative Expenses
(Including $290,905, 273,845, 146,288 and 137,462
In Property Management Fees Paid To
An Affliate For The Six and Three Month Periods
Ended June 30, 1997 And 1996, Respectively) 1,549,609 1,555,141 781,469 766,453
Property Taxes 448,071 438,423 224,046 219,249
Utilities 508,124 500,307 251,389 263,927
Property Operations 617,475 603,857 300,088 283,846
Depreciation And Amortization 914,166 944,700 457,083 471,450
Interest 1,316,257 1,314,469 659,917 650,975
---------- ----------- ---------- ----------
Total Operating Expenses $5,353,702 $5,356,897 $2,673,992 $2,655,900
---------- ----------- ---------- ----------
Net Income $ 524,025 $ 243,177 $ 268,228 $ 172,945
Income Per Unit: $ 0.16 $ 0.07 $ 0.08 $ 0.05
Distribution Per Unit $ 0.30 $ 0.26 $ 0.13 $ 0.13
Weighted Average Number Of Units Of Beneficial
Assignment Of Limited Partnership Interest
Outstanding During The Periods Ending
June 30, 1997 and 1996 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, 1997 JUNE 30, 1996
------------- -------------
<S> <C> <C>
Cash Flows From Operations:
Net Income $ 524,025 $ 243,177
Adjustments To Reconcile Net Income To Net Cash
Provided By Operating Activities:
Depreciation 880,000 875,000
Amortization 34,166 69,700
(Increase) Decrease In Other Assets (40,146) 77,072
Increase (Decrease) In Accounts Payables (37,594) (77,535)
Increase (Decrease) In Other Liabilities (246,696) 159,828
---------- ----------
Total Adjustments 589,730 1,104,065
Net Cash Provided By
Operating Activities 1,113,755 1,347,242
Cash Flows From Investing Activities:
Purchase of Marketable Securities 0 (34,355)
Capital Expenditures (237,912) (185,565)
Sale of Fixed Assets 206,180 0
Net Cash Provided By (Used In)
Investing Activities (31,732) (219,920)
Cash Flows From Financing Activities:
Distributions To Partners (991,019) (858,880)
Net Cash Provided By (Used In)
Financing Activities (991,019) (858,880)
Increase (Decrease) In Cash 91,004 268,442
Cash, Beginning 1,144,427 388,328
Cash, Ending $1,235,431 $ 656,770
---------- ----------
</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, 1997 (Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Presentation:
The balance sheet as of June 30, 1997, the related statements of income and
statements of cash flow for the periods ended June 30, 1997 and 1996 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, 1997 JUNE 30, 1996 JUNE 30,1997 JUNE 30,1996
--------------- --------------- ------------ --------------
<S> <C> <C> <C> <C>
Property management fee
to Uniprop, Inc.: $290,905 $273,845 $146,288 $137,462
</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. As part of the mortgage financing the Partnership completed
in 1993, the Partnership was required to purchase $1,502,250 in mortgage-backed
securities, known as the "Class D Certificates". These mortgage-backed
securities equal approximately 5.0% of the seven mortgage notes payable and pay
interest computed at a monthly fixed rate of 7.5% per annum. The interest
income, as well as the future value of the Class D Certificates could be
adversely affected by a foreclosure or a significant decline in operating
results involving any of the 28 properties participating in the financing
transaction which include mortgages on 21 additional properties not owned by
the Partnership.
Liquidity
As a result of the 1993 mortgage financing, seven of the Partnership's nine
properties are mortgaged. At the time of the mortgage financing, the aggregate
principal amounts due under the seven mortgage notes was $30,045,000 and the
aggregate fair market value of the Partnership's mortgage properties was
$56,400,000. The Partnership expects to meet its short-term liquidity needs
generally through its working capital provided by operating activities.
Partnership liquidity is based, in part, upon its investment strategy. Upon
acquisition, the Partnership anticipated owning the properties for seven to ten
years. All of the properties have been owned by the Partnership at least
seven years and 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.
Distributable cash from operations totaled $725,311 for the quarter ending June
30, 1997. Included in distributable cash from operations is interest income of
$28,130 from the Class D Certificates. The General Partner has decided to
distribute $561,575.79, or 4.0%, on an annualized basis, to the Unit Holders.
The difference between income generated by operations and cash distributed, or
$163,735.21, 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 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 Unit Holders.
<PAGE> 8
Results of Operations
Overall, as illustrated in the following table, the Partnership's nine
properties reported a combined occupancy of 92.2%,(3,071/3,330 sites), versus
89.8% (2,989/3,330) for June 1996. The average monthly homesite rent as of June
30, 1997 was approximately $334, versus $323, an increase of 3.4% from June
1996.
<TABLE>
<CAPTION>
TOTAL OCCUPIED OCCUPANCY AVERAGE
CAPACITY SITES RATE RENT
<S> <C> <C> <C> <C>
Ardmor Village 339 322 95.0% $312
Camelot Manor 335 327 97.6 303
Country Roads 312 284 91.0 225
Dutch Hills 278 265 95.3 304
El Adobe 371 365 98.4 373
Paradise Village 611 463 75.8 281
Stonegate Manor 308 297 96.4 306
Sunshine Village 356 331 93.0 399
West Valley 420 417 99.3 438
----- ----- ---- ----
TOTAL ON 6/30/97: 3,330 3,071 92.2% $334
TOTAL ON 6/30/96: 3,330 2,989 89.8% $323
</TABLE>
During the second quarter of 1997, the Partnership generated gross revenues of
$2,942,220, a 4.0% increase over the $2,828,846 generated in the second
quarter of 1996. The net operating income generated by the Partnership during
the second quarter was $1,385,228, a 6.9% increase over the $1,295,371
generated during the second quarter of 1996. Cash flow for the second quarter,
after mortgage debt service and non-recurring items was $725,311, or 12.6 %
more than the $644,395 generated during the second quarter of 1996. The
increase in cash flow is due to higher average occupancy and lower operating
expenses.
<TABLE>
<CAPTION>
GROSS NET OPERATING MORTGAGE CASH
REVENUES INCOME DEBT FLOW
<S> <C> <C> <C> <C>
ARDMOR VILLAGE $266,167 $139,911 $ 64,356 $ 75,555
CAMELOT MANOR 278,563 148,768 76,655 72,113
COUNTRY ROADS 186,063 36,374 -0- 36,374
DUTCH HILLS 227,273 121,673 56,668 65,005
EL ADOBE 404,558 266,349 121,463 144,886
PARADISE VILLAGE 380,427 62,927 -0- 62,927
STONEGATE MANOR 265,023 146,279 66,222 80,057
SUNSHINE VILLAGE 377,330 237,009 94,226 142,783
WEST VALLEY 555,299 383,168 180,327 202,841
PARTNERSHIP MGT: 1,517 (94,898) -0- (94,898)
OTHER NON
RECURRING EXPENSES: -- (62,332) -0- (62,332)
---------- ---------- -------- --------
QTR. END 6/30/97: $2,942,220 $1,385,228 $659,917 $725,311
QTR. END 6/30/96: $2,828,846 $1,295,371 $650,976 $644,395
</TABLE>
-8-
<PAGE> 9
ARDMOR VILLAGE, in Lakeville, Minnesota, reported an occupancy of 95.0%
(322/339 sites) as of June 30, 1997, versus 92.0% as of June 30, 1996. The
average rent was approximately $312 per homesite as of June 30, 1997, versus
$308 as of June 30, 1996, an increase of 1.3%. For the second quarter, Ardmor
Village generated gross revenues of $266,167, 7.0% less than the $284,897
reported for the same quarter in 1996. Net operating income for the quarter
was $139,911, 19.0% less than the $166,677 earned during the same quarter in
1996. Please note that the gross revenues and net operating income reported in
the second quarter 1996 reflected extraordinary income from the sale of land
adjacent to the community.
Improvement and maintenance actions undertaken during the quarter involved
installing new sprinkler systems for landscaping at the community entrance,
repairs to the community pool, and site upgrades for new resident homes. Also
undertaken during the quarter was the purchase and set-up of a new model home.
CAMELOT MANOR, in Grand Rapids, Michigan, reported an occupancy of 97.6%
(327/335 sites) as of June 30, 1997, versus 95.2% as of June 30, 1996. The
average rent was $303 per homesite as of June 30, 1997, versus $294 as of June
30, 1996, an increase of 3.1%. For the second quarter of 1997, Camelot Manor
generated gross revenues of $278,563, 2.2% more than the $272,680 reported for
the same quarter in 1996. Net operating income for the quarter was $148,768,
2.3% more than the $144,917 earned during the same quarter in 1996.
Improvement and maintenance actions undertaken during the quarter involved
renovations to the community mail center building, concrete work on sites where
new homes have been scheduled to move-in, and repairs to a bridge within the
community. Also completed during the quarter were minor renovations to the
community manager home.
COUNTRY ROADS, in Jacksonville, Florida, reported an occupancy of 91.0%
(284/312 sites) as of June 30, 1997, versus 90.4% as of June 30, 1996. The
average rent was $225 per homesite as of June 30, 1997, versus $214 during
the same quarter of 1996, an increase of 5.1%. For the second quarter of
1997, Country Roads generated gross revenues of $186,063, 4.7% more than the
$177,694 reported during the same quarter in 1996. Net operating income for
the quarter was $36,374, versus $18,423 for the second quarter of 1996.
The increase in net operating income is due to higher economic occupancy and
lower marketing expenses.
Improvement and maintenance actions undertaken at the community during the
quarter included repairs to the community water treatment facility, the
purchase and installation of new playground equipment, and installation of
new street signage throughout the community. Also completed during the quarter
was landscaping around the community-owned lease homes.
-9-
<PAGE> 10
DUTCH HILLS, in Haslett, Michigan, reported an occupancy of 95.3% (265/278
sites) as of June 30, 1997, versus 96.4% as of June 30, 1996. The average rent
was $304 per homesite as of June 30, 1997, versus $293 as of June 30, 1996,
an increase of 3.8%. For the second quarter, Dutch Hills generated gross
revenues of $227,273, 3.4% more than the $219,877 reported during the same
quarter in 1996. Net operating income was $121,673, 8.5% more than the
$112,096 earned during the same quarter in 1996.
Improvement and maintenance actions undertaken during the second quarter were
limited to asphalt resurfacing of residents' driveways and the community
sidewalks.
EL ADOBE, in Las Vegas, Nevada, reported an occupancy of 98.4% (365/371
sites) as of June 30, 1997, versus 95.4% as June 30, 1996. The average rent
on June 30, 1997 was $373 per homesite, versus $358 as of June 30, 1996, an
increase of 4.2%. For the second quarter of 1997, El Adobe generated gross
revenues of $404,558, 4.8% more than the $386,086 reported for the same
quarter in 1996. Net operating income for the quarter was $266,349, a 6.2%
increase over the $250,726 generated during the same quarter in 1996.
Improvement and maintenance actions undertaken during the second quarter
included resurfacing of residents' driveways and the replacement of an air
conditioning unit on the community center building. Management has ordered
approximately $16,000 of new playground equipment for El Adobe. Plans are to
install the new equipment by the end of the third quarter.
PARADISE VILLAGE, in Tampa , Florida, reported an occupancy of 75.8% (463/611
sites) as of June 30, 1997, versus 70.2% as of June 30, 1996. The average rent
as of June 30, 1997 was $281 per homesite, versus $271 as of June 30, 1996, an
increase of 3.7%. For the second quarter of 1997, Paradise Village generated
gross revenues of $380,427, 14.8% more than the $331,509 reported for the same
quarter in 1996. Net operating income for the quarter was $62,927, or slightly
less than the $72,603 reported during the same quarter in 1996.
Improvement and maintenance actions undertaken during the quarter focused
primarily on renovations to the community-owned lease homes and on-going
upgrading of vacant homesites. Also completed during the quarter were repairs
to the main community pool.
STONEGATE MANOR, in Lansing, Michigan, reported an occupancy of 96.4% (297/308
sites) as of June 30, 1997, versus 96.1% as of June 30, 1996. The average
rent was $306 per homesite as of June 30, 1997, versus $296 as of June 30,
1996, an increase of 3.4%. For the second quarter of 1997, Stonegate Manor
generated gross revenues of $265,023, 14.1% more than the $232,179 reported for
the same quarter in 1996. Net operating income for the quarter was $146,279,
46.3% more than the $100,002 reported during the same quarter in 1996. The
significant increase in income from 1996 to 1997 was due to higher economic
occupancy and lower marketing expenses.
-10-
<PAGE> 11
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
improvements to the community water system.
SUNSHINE VILLAGE, in Davie, Florida, reported an occupancy of 93.0% (331/356
sites) as of June 30, 1997, versus 90.4% as of June 30, 1996. The average rent
was $399 per homesite as of June 30, 1997, versus $381 as of June 30, 1996, an
increase of 4.7%. For the second quarter of 1997, Sunshine Village generated
gross revenues of $377,330, slightly more than the $372,889 reported for the
same quarter in 1996. Net operating income was $237,009, 5.2% more than the
$225,316 reported for the same quarter in 1996.
Improvement and maintenance actions undertaken during the quarter involved the
removal of several older homes within the community, the on-going pressure
wash program for residents' homes, and the seal coating of residents'
driveways. Also completed during the quarter were repairs to the community
pool.
WEST VALLEY, in Las Vegas, Nevada, reported an occupancy of 99.3% (417/420
sites) as of June 30, 1997, versus 96.9% as of June 30, 1996. The average rent
was $438 per homesite as of June 30, 1997, versus $429 as of June 30, 1996, an
increase of 2.1%. For the second quarter of 1997, West Valley generated gross
revenues of $555,299, 5.9% more than the $524,544 reported during the same
quarter in 1996. Net operating income was $383,168, 19.3% more than the
$321,200 generated during the same quarter in 1996. The significant increase
in income from 1996 to 1997 is the result of higher economic occupancy and
lower marketing expenses.
Improvement and maintenance actions undertaken during the quarter were limited
to minor repairs to the community pool and the purchase of a new maintenance
truck.
MANAGEMENT EXPENSES
Net Partnership management expenses for the quarter amounted to $94,898.
Expenses of $96,415 (data processing, accounting and legal expenses, appraisals
and wages to employees of the Partnership) were offset by gross income of
$1,517, generated by interest on the Partnership's reserves and transfer fees.
The equivalent figures for the second quarter of 1996 were $55,156, $81,647
and $26,491, respectively. The increase in Partnership management expense is
due primarily to a first time Single Business Tax liability.
-11-
<PAGE> 12
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, 1997.
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, 1997
-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-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,235,431
<SECURITIES> 818,182
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,944,636
<PP&E> 63,113,449
<DEPRECIATION> 16,209,988
<TOTAL-ASSETS> 52,848,097
<CURRENT-LIABILITIES> 1,065,986
<BONDS> 30,041,487
0
0
<COMMON> 0
<OTHER-SE> 21,740,624
<TOTAL-LIABILITY-AND-EQUITY> 52,848,097
<SALES> 0
<TOTAL-REVENUES> 5,877,727
<CGS> 0
<TOTAL-COSTS> 3,123,279
<OTHER-EXPENSES> 880,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,384,169
<INCOME-PRETAX> 524,025
<INCOME-TAX> 0
<INCOME-CONTINUING> 524,025
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 524,025
<EPS-PRIMARY> .16<F1>
<EPS-DILUTED> 0
<FN>
<F1>5-03(b)(20) EPS Primary-In this RELP the earnings per share indicate income per
LP unit.
</FN>
</TABLE>
