<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, 1999 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 3
Balance Sheets
March 31, 1999 (Unaudited) and
December 31, 1998 3
Statements of Income
Three months ended March 31, 1999
and 1998 (Unaudited) 4
Statements of Cash Flows
Three months ended March 31, 1999
and 1998 (Unaudited) 5
Notes to Financial Statements
March 31, 1999 (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 9
-2-
<PAGE> 3
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,
A MICHIGAN LIMITED PARTNERSHIP
BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS MARCH 31, 1999 DECEMBER 31, 1998
-------------- -----------------
(UNAUDITED)
<S> <C> <C>
Properties:
Land $11,644,103 $11,644,103
Buildings And Improvements 49,484,313 49,421,935
Furniture And Fixtures 438,433 400,872
Manufactured Homes 2,183,035 2,100,666
----------- -----------
63,749,884 63,567,576
Less Accumulated Depreciation 19,274,413 18,819,413
----------- -----------
44,475,471 44,748,163
Cash And Cash Equivalents 2,301,401 2,482,314
Unamortized Finance Costs 615,300 622,800
Other Assets 1,125,727 981,346
----------- -----------
Total Assets $48,517,899 $48,834,623
----------- -----------
<CAPTION>
LIABILITIES MARCH 31, 1999 DECEMBER 31, 1998
-------------- -----------------
(UNAUDITED)
<S> <C> <C>
Accounts Payable $ 289,858 $ 322,340
Other Liabilities 775,810 876,996
Notes Payable 29,827,017 29,915,975
----------- -----------
Total Liablities $30,892,685 $31,115,311
Partners' Equity:
General Partner 246,852 242,012
Unit Holders 17,378,362 17,477,300
Total Partners' Equity 17,625,214 17,719,312
----------- -----------
Total Liabilities And
Partners' Equity $48,517,899 $48,834,623
----------- -----------
</TABLE>
See Notes to Financial Statements
-3-
<PAGE> 4
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,
A MICHIGAN LIMITED PARTNERSHIP
<TABLE>
<CAPTION>
STATEMENTS OF INCOME THREE MONTHS ENDED
(UNAUDITED) MARCH 31, 1999 MARCH 31, 1998
-------------- --------------
Income:
<S> <C> <C>
Rental Income $2,970,199 $2,851,408
Other 227,772 187,053
---------- ----------
Total Income $3,197,971 $3,038,461
---------- ----------
Operating Expenses:
Administrative Expenses
(Including $156,641 And $150,346
In Property Management Fees Paid
To An Affliate For The Three Month Period
Ended March 31, 1999 and 1998
Respectively) 812,070 825,691
Property Taxes 238,728 235,263
Utilities 256,116 238,136
Property Operations 466,884 408,014
Depreciation And Amortization 462,500 460,000
Interest 477,675 674,358
---------- ----------
Total Operating Expenses $2,713,973 $2,841,462
---------- ----------
Net Income $ 483,998 $ 196,999
---------- ----------
Income Per Unit: $ 0.15 $ 0.06
Distribution Per Unit: $ 0.18 $ 0.17
Weighted Average Number Of Units
Of Beneficial Assignment Of Limited Partnership
Interest Outstanding During The Period Ending
March 31, 1999 And 1998 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, 1999 MARCH 31, 1998
-------------- --------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income (Loss) $ 483,998 $ 196,999
Adjustments To Reconcile Net Income
(Loss) To Net Cash Provided By
Operating Activities:
Depreciation 455,000 448,000
Amortization 7,500 12,000
(Increase) Decrease In Other Assets From Operations (144,381) 23,736
Increase (Decrease) In Accounts Payables (32,482) 12,779
Increase (Decrease) Other Liabilities From Operations (101,186) (359,669)
----------- -----------
Total Adjustments 184,451 136,846
----------- -----------
Net Cash Provided By (Used In)
Operating Activities 668,449 333,845
----------- -----------
Cash Flows From Investing Activities:
Capital Expenditures (182,308) (227,748)
Payment On Mortgage (88,958) 0
----------- -----------
Net Cash Provided By (Used In)
Investing Activities (271,266) (227,748)
----------- -----------
Cash Flows From Financing Activities:
Distributions To Partners (578,096) (561,576)
----------- -----------
Net Cash Provided By (Used In)
Financing Activities (578,096) (561,576)
----------- -----------
Increase (Decrease) In Cash (180,913) (455,479)
Cash, Beginning 2,482,314 1,630,552
----------- -----------
Cash, Ending $ 2,301,401 $ 1,175,073
----------- -----------
</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, 1999 (Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Presentation:
The balance sheet as of March 31, 1999, the related statements of income and
statements of cash flow for the periods ended March 31, 1999 and 1998 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, 1999 MARCH 31, 1998
-------------- --------------
<S> <C> <C>
Property management fee
to Uniprop, Inc. $156,641 $150,346
</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. On August 20, 1998 the Partnership refinanced seven of its
nine properties with GMAC Commercial Mortgage Corporation (the "Refinancing").
Liquidity
As a result of the Refinancing, seven of the Partnership's nine properties are
mortgaged. At the time of the Refinancing, the aggregate principal amounts due
under the seven mortgage notes was $30,000,000 and the aggregate fair market
value of the Partnership's mortgage properties was $66,000,000. 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 more than ten
years. The General Partner may elect to have the Partnership own the properties
for longer, 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 $946,498 for the quarter ending March
31, 1999. Distributable Cash from Operations is defined to mean net income
computed in accordance with generally accepted accounting principals ("GAAP"),
plus real estate related depreciation and amortization. Distributable Cash from
Operations does not represent cash generated from operating activities in
accordance with GAAP and is not necessarily indicative of cash available to fund
cash needs. Distributable 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. From Distributable Cash from Operations the General Partner has
decided to distribute $594,610, or $.18 per unit, to the unit holders. 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.
While the Partnership is not required to maintain a working capital reserve, the
Partnership has not distributed all the Distributable Cash from Operations in
order to build reserves. As of March 31, 1999, the Partnership's cash reserves
amounted to $2,301,401. Once
-7-
<PAGE> 8
the first quarter distribution is paid to unit holders, the cash reserve amount
will be approximately $1,706,791. The level of cash reserves maintained is at
the discretion of the General Partner.
Results of Operations
Overall, as illustrated in the following table, the Partnership's nine
properties reported combined occupancy of 93.5% (3,115/3,330 sites) at the end
of March 1999, versus 92.6% (3,085/3,330) for March 1998. The average monthly
homesite rent as of March 31, 1999 was approximately $348, versus $336, an
increase of 3.6% from March 1998.
<TABLE>
<CAPTION>
TOTAL OCCUPIED OCCUPANCY AVERAGE
CAPACITY SITES RATE RENT
<S> <C> <C> <C> <C>
Ardmor Village 339 328 96.8% $ 322
Camelot Manor 335 320 95.5 320
Country Roads 312 291 93.3 240
Dutch Hills 278 264 95.0 324
El Adobe 371 360 97.0 384
Paradise Village 611 512 83.8 293
Stonegate Manor 308 294 95.5 329
Sunshine Village 356 334 93.8 418
West Valley 420 412 98.1 449
----- ----- ------ -----
TOTAL ON 3/31/99: 3,330 3,115 93.5% $ 348
TOTAL ON 3/31/98: 3,330 3,085 92.6% $ 336
</TABLE>
-8-
<PAGE> 9
<TABLE>
<CAPTION>
GROSS REVENUES NET OPERATING
INCOME
3/31/99 3/31/98 3/31/99 3/31/98
<S> <C> <C> <C> <C>
Ardmor Village $ 328,589 $ 311,341 $ 173,047 $ 150,708
Camelot Manor 289,349 273,454 140,113 144,334
Country Roads 215,714 201,684 61,870 17,880
Dutch Hills 244,957 235,528 116,963 118,041
El Adobe 435,675 430,739 283,153 283,101
Paradise Village 371,945 347,810 79,287 51,377
Stonegate Manor 294,594 273,242 159,457 123,340
Sunshine Village 424,802 382,300 219,331 231,480
West Valley 572,680 580,453 380,807 394,097
----------- ----------- ----------- -----------
3,178,305 3,036,551 1,614,028 1,514,358
Partnership Management: 19,666 1,910 (51,418)
(87,326)
Other Non Recurring expenses: -- -- (138,437)
(95,675)
Debt Service (477,675)
(674,358)
Depreciation and Amortization -- -- (462,500) (460,000)
----------- ----------- ----------- -----------
$ 3,197,971 $ 3,038,461 $ 483,998 $ 196,999
</TABLE>
COMPARISON OF QUARTER ENDED MARCH 31, 1999 TO QUARTER ENDED MARCH 31, 1998
Gross revenues increased $159,510, or 5.2%, to $3,197,971 in 1999, as compared
to $3,038,461 in 1998. The increase was the result of the increase in average
monthly rents and an increase in overall occupancy. (See table on previous
page.)
As described in the Statements of Income, total operating expenses decreased
$127,489, or 4.5%, to $2,713,973 in 1999, as compared to $2,841,462 in 1998. The
decrease was the result of lower interest payments on the Partnership's mortgage
debt.
As a result of the foregoing factors, net income increased to $483,998 as of
March 31, 1999 from $196,999 as of March 31, 1998.
MANAGEMENT EXPENSES
Net Partnership management expenses for the quarter amounted to $51,418.
Expenses of $71,084 (data processing, accounting and legal expenses, appraisals
and wages to employees of the Partnership) were offset by gross income of
$19,666, generated by interest on the Partnership's cash reserves and transfer
fees. The equivalent figures for the first quarter of 1998 were $87,326, $89,236
and $1,910, respectively.
-9-
<PAGE> 10
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, 1999.
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 14, 1999
-10-
<PAGE> 11
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 2,301,401
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,042,428
<PP&E> 63,749,884
<DEPRECIATION> 19,274,413
<TOTAL-ASSETS> 48,517,899
<CURRENT-LIABILITIES> 1,065,668
<BONDS> 29,827,017
0
0
<COMMON> 0
<OTHER-SE> 17,625,214
<TOTAL-LIABILITY-AND-EQUITY> 48,517,899
<SALES> 0
<TOTAL-REVENUES> 3,197,971
<CGS> 0
<TOTAL-COSTS> 2,251,473
<OTHER-EXPENSES> 455,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 485,175
<INCOME-PRETAX> 483,998
<INCOME-TAX> 0
<INCOME-CONTINUING> 483,998
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 483,998
<EPS-PRIMARY> .15<F1>
<EPS-DILUTED> 0
<FN>
<F1>In this RELP the earnings per share indicate income per LP unit
</FN>
</TABLE>
