<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, 2000 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)
Securities registered pursuant to Section 12(g) of the Act:
units of beneficial assignments of limited partnership interest
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 [ ]
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UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,
A MICHIGAN LIMITED PARTNERSHIP
INDEX
<TABLE>
<CAPTION>
Page
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<S> <C>
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Balance Sheets
June 30, 2000 (Unaudited) and
December 31, 1999 3
Statements of Income Six months ended June 30, 2000 and 1999
(Unaudited) and Three months ended
June 30, 2000 and 1999 (Unaudited) 4
Statements of Cash Flows
Six months ended June 30, 2000
and 1999 (Unaudited) 5
Notes to Financial Statements
June 30, 2000 (Unaudited) 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS 7
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK 10
PART II OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 10
</TABLE>
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UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,
A MICHIGAN LIMITED PARTNERSHIP
BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS JUNE 30,2000 DECEMBER 31, 1999
------------ -----------------
(UNAUDITED)
<S> <C> <C>
Properties:
Land $11,662,525 $11,644,103
Buildings And Improvements 50,083,165 49,776,786
Furniture And Fixtures 506,322 453,437
Manufactured Homes and Improvements 1,786,035 1,875,567
----------- -----------
64,038,047 63,749,893
Less Accumulated Depreciation 21,516,793 20,587,823
----------- -----------
42,521,254 43,162,070
Cash And Cash Equivalents 3,220,367 2,821,681
Unamortized Finance Costs 586,384 597,528
Other Assets 891,314 944,378
----------- -----------
Total Assets $47,219,319 $47,525,657
=========== ===========
LIABILITIES
Accounts Payable $170,805 $235,098
Other Liabilities 944,436 769,853
Notes Payable 29,393,295 29,572,116
----------- -----------
Total Liabilities $30,508,536 $30,577,067
Partners' Equity:
General Partner 268,595 258,420
Unit Holders 16,442,188 16,690,170
Total Partners' Equity 16,710,783 16,948,590
----------- -----------
Total Liabilities And
Partners' Equity $47,219,319 $47,525,657
=========== ===========
</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 SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30, 2000 JUNE 30, 1999 JUNE 30,2000 JUNE 30, 1999
------------- ------------- ------------- -------------
(unaudited) (unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C>
Income:
Rental Income $6,104,432 $5,945,409 3,046,461 2,975,210
Other 390,621 359,557 204,987 131,785
---------- ---------- ---------- ----------
Total Income $6,495,053 $6,304,966 3,251,448 3,106,995
========== ========== ========= ==========
Operating Expenses:
Administrative Expenses
(Including $321,323, $313,424,$160,975,
and $156,783, in Property Management
Fees Paid to an Affiliate for the Six
and Three Month Period Ending
June 30, 2000 and 1999 Respectively) 1,633,731 1,562,023 856,617 749,953
Property Taxes 501,822 478,482 250,755 239,754
Utilities 477,018 439,727 233,857 183,611
Property Operations 968,942 1,106,514 547,487 639,630
Depreciation And Amortization 941,614 925,000 480,811 462,500
Interest 954,446 958,130 479,438 480,455
---------- ---------- ---------- ----------
Total Operating Expenses $5,477,573 $5,469,876 $2,848,965 $2,755,903
========== ========== ========== ==========
Net Income $1,017,480 $ 835,090 $ 402,483 $ 351,092
========== ========== ========== ==========
Income Per Unit: 0.31 0.25 0.12 0.11
Distribution Per Unit: 0.38 0.36 0.19 0.18
Weighted Average Number Of Units
Of Beneficial Assignment Of Limited Partnership
Interest Outstanding During The Period Ending
June 30, 2000 and 1999 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
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED
June 30,2000 June 30,1999
------------ ------------
(unaudited) (unaudited)
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income $1,017,480 $835,090
Adjustments To Reconcile Net Income
To Net Cash Provided By
Operating Activities:
Depreciation 928,971 910,000
Amortization 12,643 15,000
(Increase) Decrease In Other Assets 51,565 (300,915)
Increase (Decrease) In Accounts Payables (64,293) (12,230)
Increase (Decrease) Other Liabilities 174,583 145,902
---------- ----------
Total Adjustments 1,103,469 757,757
---------- ----------
Net Cash Provided By (Used In)
Operating Activities 2,120,949 1,592,847
---------- ----------
Cash Flows From Investing Activities:
Capital Expenditures (288,155) (337,285)
Net Cash Provided By (Used In)
Investing Activities (288,155) (337,285)
---------- ----------
Cash Flows From Financing Activities:
Payment On Mortgage (178,821) (175,136)
Distributions To Partners (1,255,287) (1,172,706)
---------- ----------
Net Cash Provided By (Used In)
Financing Activities (1,434,108) (1,347,842)
Increase (Decrease) In Cash and Equivalents 398,686 (92,280)
Cash and Equivalents, Beginning 2,821,681 2,482,314
---------- ----------
Cash and Equivalents, Ending $3,220,367 $2,390,034
========== ==========
</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, 2000 (Unaudited)
1. BASIS OF PRESENTATION:
The accompanying unaudited 2000 and audited 1999 financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. The balance sheet at December 31, 1999 has been derived from the
audited financial statements at that date. Operating results for the three and
six months ended June 30, 2000 are not necessarily indicative of the results
that may be expected for the year ending December 31, 2000, or for any other
interim period. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Partnership's Form 10-K for the
year ending December 31, 1999.
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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 mortgaged 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, on 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 and the General Partner may elect to have the Partnership own the
properties for as long as, in the opinion of the General Partner, it is in the
best interest of the Partnership to do so.
Distributable Cash from Operations totaled $883,294 for the quarter ending June
30, 2000. Distributable Cash from Operations is defined as 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 $627,644.
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. For the quarter ended June 30, 2000, the Partnership
added $255,650 to cash reserves. During the same quarter in 1999, the
Partnership added $202,466 to cash reserves. The level of cash reserves is at
the discretion of the General Partner.
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Results of Operations
Overall, as illustrated in the following table, the Partnership's nine
properties reported a combined occupancy of 92%, (3,068/3,329 sites), versus 94%
(3,122/3,330) for June 1999. The average monthly homesite rent as of June 30,
2000 was approximately $359, versus $349, (an increase of 2.86%) for June, 1999.
<TABLE>
<CAPTION>
TOTAL OCCUPIED OCCUPANCY AVERAGE
CAPACITY SITES RATE RENT
<S> <C> <C> <C> <C>
Ardmor Village 339 337 99% $340
Camelot Manor 335 318 95 336
Country Roads 311 282 90 242
Dutch Hills 278 271 97 338
El Adobe 367 333 90 420
Paradise Village 614 503 82 303
Stonegate Manor 308 295 96 342
Sunshine Village 356 324 91 446
West Valley 421 405 96 468
--- --- -- ----
TOTAL ON 6/30/00 3,329 3,068 92% $359*
TOTAL ON 6/30/99: 3,330 3,122 94% $349*
</TABLE>
*Average rent is not weighted average.
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<TABLE>
<CAPTION>
FOR THREE MONTHS ENDING JUNE 30, 2000
GROSS REVENUES NET OPERATING INCOME
6/30/00 6/30/99 6/30/00 6/30/99
<S> <C> <C> <C> <C>
Ardmor Village $306,933 $307,662 $199,567 $176,034
Camelot Manor 296,909 293,915 130,799 129,204
Country Roads 240,775 218,758 (7,346) 57,668
Dutch Hills 260,766 246,762 121,808 124,115
El Adobe 428,028 431,742 280,748 269,602
Paradise Village 419,436 379,224 78,465 67,239
Stonegate Manor 284,993 288,380 160,597 148,916
Sunshine Village 411,346 366,410 242,758 208,749
West Valley 560,910 559,835 367,804 364,091
---------- ---------- ---------- ----------
$3,210,096 $3,092,688 $1,575,200 $1,545,618
Partnership Management: 41,352 14,307 (103,875) (59,824)
Other Non Recurring expenses: ------ ------ (108,593) (191,747)
Interest Expense: (479,438) (480,455)
Depreciation and Amortization (480,811) (462,500)
---------- ---------- ----------- ----------
Total $3,251,448 $3,106,995 $402,483 $351,092
</TABLE>
COMPARISON OF QUARTER ENDED JUNE 30, 2000 TO QUARTER ENDED JUNE 30, 1999
Gross revenues increased $144,453, or 4.6%, to $3,251,448 in 2000, as compared
to $3,106,995 in 1999. The increase was the result of the increase in average
monthly rents as well as Other Income. (See table on previous page.)
As described in the Statements of Income, total operating expenses increased
3.4%, or $93,062, to $2,848,965 in June, 2000, as compared to $2,755,903 in
June, 1999. The increase is the result of higher administrative expenses and
higher utility expenses.
As a result of the foregoing factors, net income increased to $402,483 for the
quarter ended June 30, 2000 from $351,092 for the quarter ended June 30, 1999.
COMPARISON OF SIX MONTHS ENDED JUNE 30, 2000 AND SIX MONTH ENDED JUNE 30, 1999
For the first six months of 2000, Gross Revenues were $6,495,053 or 3% above
$6,304,966 for the same period of 1999. Total Operating Expense for the first
two quarters of 2000 were $5,477,573, an increase of 14 basis points compared to
$5,469,876 for 1999. Net Income for the first six months ending June 30, 2000
was $1,017,480, an increase of 21.8% compared to the first six months ending
June 30, 1999.
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ITEM 3.
QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
The Partnership is exposed to interest rate rise primarily through its borrowing
activities. There is inherent roll over risk for borrowings as they mature and
are renewed at current market rates. The extent of this risk is not quantifiable
or predictable because of the variability of future interest rates and the
Partnership's future financing requirements.
Note Payable: At June 30, 2000 the Partnership had a note payable outstanding in
the amount of $29,395,295. Interest on this note is at a fixed annual rate of
6.37% through March 2009.
The Partnership does not enter into financial instruments transactions for
trading or other speculative purposes or to manage its interest rate exposure.
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, 2000.
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<PAGE> 11
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, Chairman
By: /s/ Gloria A. Koster
-----------------------------------------------
Gloria A. Koster, Principal Financial Officer
Dated: August 8, 2000
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<PAGE> 12
EXHIBIT INDEX
Exhibit
No. Description Page
27 Financial Data Schedule
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