<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, 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 [ ]
<PAGE> 2
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,
A MICHIGAN LIMITED PARTNERSHIP
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Balance Sheets
March 31, 2000 (Unaudited) and
December 31, 1999 3
Statements of Income
Three months ended March 31, 2000
and 1999 (Unaudited) 4
Statements of Cash Flows
Three months ended March 31, 2000
and 1999 (Unaudited) 5
Notes to Financial Statements
March 31, 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>
-2-
<PAGE> 3
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,
A MICHIGAN LIMITED PARTNERSHIP
BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS MARCH 31, 2000 DECEMBER 31, 1999
-------------- -----------------
(UNAUDITED)
<S> <C> <C>
Properties:
Land $11,644,103 $11,644,103
Buildings And Improvements 50,022,420 49,776,786
Furniture And Fixtures 489,503 453,437
Manufactured Homes 1,810,069 1,875,567
----------- -----------
63,966,095 63,749,893
Less Accumulated Depreciation 21,042,308 20,587,823
----------- -----------
42,923,787 43,162,070
Cash And Cash Equivalents 3,046,878 2,821,681
Unamortized Finance Costs 610,335 597,528
Other Assets 1,143,810 944,378
---------- -----------
Total Assets $47,724,810 $47,525,657
----------- -----------
<CAPTION>
LIABILITIES MARCH 31, 2000 DECEMBER 31, 1999
-------------- -----------------
(UNAUDITED)
<S> <C> <C>
Accounts Payable $ 304,994 $ 235,098
Other Liabilities 1,003,381 769,853
Notes Payable 29,480,491 29,572,116
----------- -----------
Total Liabilities $30,788,866 $30,577,067
Partners' Equity:
General Partner 264,570 258,420
Unit Holders 16,671,374 16,690,170
Total Partners' Equity 16,935,944 16,948,590
----------- -----------
Total Liabilities And
Partners' Equity $47,724,810 $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 THREE MONTHS ENDED
(unaudited) March 31, 2000 March 31, 1999
-------------- --------------
<S> <C> <C>
Income:
Rental Income $3,057,971 $2,970,199
Other 185,634 227,772
---------- ----------
Total Income $3,243,605 $3,197,971
---------- ----------
Operating Expenses:
Administrative Expenses
(Including $160,975 and $156,641, in Property Management
Fees Paid to an Affiliate for the Three Month Period Ending
March 31, 2000 and 1999 Respectively) 777,114 812,070
Property Taxes 251,067 238,728
Utilities 243,161 256,116
Property Operations 421,455 466,884
Depreciation And Amortization 460,803 462,500
Interest 475,008 477,675
---------- ----------
Total Operating Expenses $2,628,608 $2,713,973
---------- ----------
Net Income $ 614,997 $ 483,998
---------- ----------
Income Per Unit: $ 0.19 $ 0.15
Distribution Per Unit: $ 0.19 $ 0.18
Weighted Average Number Of Units
Of Beneficial Assignment Of Limited Partnership
Interest Outstanding During The Period Ending
March 31, 2000 and 1999 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, 2000 March 31, 1999
-------------- --------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income (Loss) $ 614,997 $ 483,998
Adjustments To Reconcile Net Income
(Loss) To Net Cash Provided By
Operating Activities:
Depreciation 454,485 455,000
Amortization 6,318 7,500
(Increase) Decrease In Other Assets From Operations (218,557) (144,381)
Increase (Decrease) In Accounts Payables 69,896 (32,482)
Increase (Decrease) Other Liabilities From Operations 233,528 (101,186)
----------- -----------
Total Adjustments 545,670 184,451
----------- -----------
Net Cash Provided By (Used In)
Operating Activities 1,160,667 668,449
----------- -----------
Cash Flows From Investing Activities:
Redemption of Marketable Securities 0 0
Capital Expenditures (216,202) (182,308)
Sale of Fixed Assets 0 0
Payment On Mortgage (91,625) (88,958)
----------- -----------
Net Cash Provided By (Used In)
Investing Activities (307,827) (271,266)
----------- -----------
Cash Flows From Financing Activities:
Distributions To Partners (627,643) (578,096)
----------- -----------
Net Cash Provided By (Used In)
Financing Activities (627,643) (578,096)
----------- -----------
Increase (Decrease) In Cash 225,197 (180,913)
Cash, Beginning 2,821,681 2,482,314
----------- -----------
Cash, Ending $ 3,046,878 $ 2,301,401
----------- -----------
</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, 2000 (Unaudited)
1. BASIS OF PRESENTATION:
The accompanying unaudited 2000 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
months ended March 31, 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.
-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 amount 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, 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 for more than
ten years. 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 $1,075,800 for the quarter ending
March 31, 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 nor 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, or $.19 per unit, to the unit holders. The
General Partner will continue to monitor cash flow generated by the
Partnership's nine properties during the coming quarters. If cash flow generated
is greater or lesser 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, 2000, the Partnership's cash reserves
amounted to $3,046,878.
-7-
<PAGE> 8
Once the first quarter distribution is paid to unit holders, the cash reserve
amount will be approximately $2,419,234. 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 92.0% (3,065/3,330 sites) at the end
of March 2000, versus 93.5% (3,115/3,330) for March 1999. The average monthly
homesite rent as of March 31, 2000 was approximately $359, versus $348, an
increase of 3.2% from March 1999.
<TABLE>
<CAPTION>
TOTAL OCCUPIED OCCUPANCY AVERAGE
CAPACITY SITES RATE RENT
<S> <C> <C> <C> <C>
Ardmor Village 339 333 98.2% $335
Camelot Manor 335 316 94.3 332
Country Roads 312 282 90.4 253
Dutch Hills 278 270 97.1 334
El Adobe 371 337 91.8 404
Paradise Village 611 504 82.1 291
Stonegate Manor 308 299 97.1 340
Sunshine Village 356 322 90.4 447
West Valley 420 402 95.5 467
--- --- ---- ---
TOTAL ON 3/31/00: 3,330 3,065 92.0% $359
TOTAL ON 3/31/99: 3,330 3,115 93.5% $348
</TABLE>
-8-
<PAGE> 9
<TABLE>
<CAPTION>
GROSS REVENUES NET OPERATING
INCOME
3/31/00 3/31/99 3/31/00 3/31/99
<S> <C> <C> <C> <C>
Ardmor Village $ 375,167 $ 328,589 $ 232,745 $ 173,047
Camelot Manor 295,662 289,349 145,103 140,113
Country Roads 185,971 215,714 38,720 61,870
Dutch Hills 250,611 244,957 121,462 116,963
El Adobe 426,537 435,675 278,760 283,153
Paradise Village 406,278 371,945 97,882 79,287
Stonegate Manor 289,884 294,594 156,148 159,457
Sunshine Village 404,880 424,802 232,435 219,331
West Valley 578,341 572,680 356,143 380,807
----------- ----------- ----------- -----------
3,213,331 3,178,305 1,659,399 1,614,028
Partnership Management: 30,274 19,666 (29,632) (51,418)
Other Non Recurring expenses: -- -- (78,958) (138,437)
Debt Service (475,008) (477,675)
Depreciation and Amortization -- -- (460,803) (462,500)
----------- ----------- ----------- -----------
$ 3,243,605 $ 3,197,971 $ 614,997 $ 483,998
</TABLE>
COMPARISON OF QUARTER ENDED MARCH 31, 2000 TO QUARTER ENDED MARCH 31, 1999
Gross revenues increased $45,634, or 1.4%, to $3,243,605 in 2000, as compared to
$3,197,971 in 1999. The increase was the result of the increase in average
monthly rents. (See table on previous page.)
As described in the Statements of Income, total operating expenses decreased
$85,365, or 3.1%, to $2,628,608 in 2000, as compared to $2,713,973 in 1999. The
decrease was the result of lower administrative expenses and lower expenses
associated with property operations.
As a result of the foregoing factors, net operating income increased to $614,997
as of March 31, 2000 from $483,998 as of March 31, 1999.
-9-
<PAGE> 10
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 March 31, 2000 the Partnership had a note payable
outstanding in the amount of $29,480,491. 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 March 31, 2000.
-10-
<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, President
By: /s/ Gloria A. Koster
---------------------
Gloria A. Koster, Principal Financial Officer
Dated: May 15, 2000
-11-
<PAGE> 12
EXHIBIT INDEX
-------------
EXHIBIT NUMBER DESCRIPTION PAGE
- -------------- ----------- ----
27 Financial Data Schedule
-12-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 3,046,878
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,801,023
<PP&E> 63,966,095
<DEPRECIATION> 21,042,308
<TOTAL-ASSETS> 47,724,810
<CURRENT-LIABILITIES> 1,308,375
<BONDS> 29,480,491
0
0
<COMMON> 0
<OTHER-SE> 16,935,944
<TOTAL-LIABILITY-AND-EQUITY> 47,724,810
<SALES> 0
<TOTAL-REVENUES> 3,243,605
<CGS> 0
<TOTAL-COSTS> 2,167,805
<OTHER-EXPENSES> 454,485
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 481,326
<INCOME-PRETAX> 614,997
<INCOME-TAX> 0
<INCOME-CONTINUING> 614,997
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 614,997
<EPS-BASIC> .19<F1>
<EPS-DILUTED> 0
<FN>In this RELP the earnings per share indicate income per LP unit.
</FN>
</TABLE>
