<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 September 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 [ ]
<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
September 30, 2000 and
December 31, 1999 3
Statements of Income
Nine months ended September 30, 2000
and 1999 and Three Months ended
September 30, 2000 and 1999 4
Statement of Partners Equity 4
Nine months ended September 30, 2000
Statements of Cash Flows
Nine months ended September 30, 2000
and 1999 5
Notes to Financial Statements 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
-2-
<PAGE> 3
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,
A MICHIGAN LIMITED PARTNERSHIP
BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30,2000 DECEMBER 31, 1999
----------------- -----------------
(Unaudited)
<S> <C> <C>
ASSETS
Properties:
Land $11,662,525 $11,644,103
Buildings And Improvements 50,120,951 49,776,786
Furniture And Fixtures 506,322 453,437
Manufactured Homes 1,617,466 1,875,567
----------- -----------
63,907,264 63,749,893
Less Accumulated Depreciation 21,951,278 20,587,823
----------- -----------
41,955,986 43,162,070
Cash And Cash Equivalents 3,386,036 2,821,681
Unamortized Finance Costs 580,699 597,528
Other Assets 1,190,431 944,378
----------- -----------
Total Assets $47,113,152 $47,525,657
----------- -----------
<CAPTION>
SEPTEMBER 30, 2000 DECEMBER 31, 1999
------------------ -----------------
(Unaudited)
<S> <C> <C>
LIABILITIES AND
PARTNERS' EQUITY
Accounts Payable $ 145,942 $ 235,098
Other Liabilities 1,133,577 769,853
Notes Payable 29,304,639 29,572,116
----------- -----------
Total Liabilities 30,584,158 30,577,067
----------- -----------
Partners' Equity:
General Partner 273,053 258,420
Unit Holders 16,255,941 16,690,170
----------- -----------
Total Partners' Equity 16,528,994 16,948,590
----------- -----------
Total Liabilities And
Partners' Equity $47,113,152 $47,525,657
----------- -----------
</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>
NINE MONTHS ENDED THREE MONTHS ENDED
SEPT. 30,2000 SEPT. 30, 1999 SEPT. 30,2000 SEPT. 30, 1999
------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
Income:
Rental Income $ 9,205,143 $ 8,938,928 3,100,711 2,993,519
Other 605,403 552,777 214,782 193,220
------------ ------------ ------------ ------------
Total Income $ 9,810,546 $ 9,491,705 3,315,493 3,186,739
------------ ------------ ------------ ------------
Operating Expenses:
Administrative Expenses
(Including $484,796, $472,050,$163,473,
and $158,626, in Property Management
Fees Paid to an Affiliate for the Nine
and Three Month Periods Ending
September 30, 2000 and 1999 Respectively) 2,429,726 2,544,445 795,995 982,422
Property Taxes 753,429 717,357 251,607 238,875
Utilities 719,748 706,738 242,730 267,011
Property Operations 1,629,465 1,495,180 660,523 388,666
Depreciation And Amortization 1,382,421 1,387,500 440,807 462,500
Interest 1,432,423 1,438,107 477,977 479,977
------------ ------------ ------------
Total Operating Expenses $ 8,347,212 $ 8,289,327 $ 2,869,639 $ 2,819,451
------------ ------------ ------------ ------------
Net Income $ 1,463,334 $ 1,202,378 $ 445,854 $ 367,288
------------ ------------ ------------ ------------
Income Per Unit: 0.44 0.36 0.13 0.11
Distribution Per Unit: 0.57 0.54 0.19 0.18
Weighted Average Number Of Units
Of Beneficial Assignment Of Limited Partnership
Interest Outstanding During The Period Ending
September 30, 2000 and 1999 3,303,387 3,303,387 3,303,387 3,303,387
<CAPTION>
STATEMENT OF PARTNERS EQUITY (UNAUDITED)
GENERAL PARTNER UNIT HOLDERS TOTAL
<S> <C> <C> <C>
Beginning Balance December 31, 1999 258,420 16,690,170 16,948,590
Net Income 14,633 1,448,701 1,463,334
Distributions 0 (1,882,930) (1,882,930)
------------ ------------ ------------
Balance, September 30,2000 273,053 16,255,941 16,528,994
------------ ------------ ------------
</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>
NINE MONTHS ENDED
SEPTEMBER 30,2000 SEPTEMBER 30,1999
----------------- -----------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income $ 1,463,334 $ 1,202,378
----------- -----------
Adjustments To Reconcile Net Income
To Net Cash Provided By
Operating Activities:
Depreciation 1,363,456 1,365,000
Amortization 18,965 22,500
(Increase) Decrease In Other Assets (248,189) (449,352)
Increase (Decrease) In Accounts Payables (89,156) 65,523
Increase (Decrease) Other Liabilities 363,724 325,639
----------- -----------
Total Adjustments 1,408,800 1,329,310
----------- -----------
Net Cash Provided By (Used In)
Operating Activities 2,872,134 2,531,688
----------- -----------
Cash Flows From Investing Activities:
Capital Expenditures (157,372) (398,707)
----------- -----------
Net Cash Provided By (Used In)
Investing Activities (157,372) (398,707)
----------- -----------
Cash Flows From Financing Activities:
Payment On Mortgage (267,477) (261,792)
Distributions To Partners (1,882,930) (1,783,835)
----------- -----------
Net Cash Provided By (Used In)
Financing Activities (2,150,407) (2,045,627)
----------- -----------
Increase (Decrease) In Cash and Equivalents 564,355 87,354
Cash and Equivalents, Beginning 2,821,681 2,482,314
----------- -----------
Cash and Cash Equivalents, Ending $ 3,386,036 $ 2,569,668
----------- -----------
</TABLE>
See Notes to Financial Statements
-5-
<PAGE> 6
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,
A MICHIGAN LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
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 nine months
ended September 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 financial statements and footnotes
thereto included in the Partnership's Form 10-K for the year ended December 31,
1999.
-6-
<PAGE> 7
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Capital Resources
The capital resources of Uniprop Manufactured Housing Communities Income Fund II
(the "Partnership") consist primarily of its nine manufactured home communities.
On August 20, 1998 the Partnership refinanced seven of its nine properties with
GMAC Commercial Mortgage (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, upon its investment strategy. The
properties owned by the Partnership were expected to be sold or financed within
seven to ten years after their acquisition. All of the properties have been
owned by the Partnership at least ten years and they were refinanced
approximately 10 years after their acquisition. Genesis Associates Limited
Partnership (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 $886,661 for the quarter ended
September 30, 2000. Distributable Cash from Operations is defined to mean net
income computed in accordance with generally accepted accounting principles
("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 for the third quarter of
2000, the General Partner has decided to distribute $627,644 to the Unit
Holders. The General Partner will continue to monitor on-going Distributable
Cash from Operations generated by the Partnership during the coming quarters. If
Distributable Cash from Operations 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.
-7-
<PAGE> 8
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 cash reserves. As of September 30, 2000, the Partnership cash
reserves amounted to $3,386,036. 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 a combined occupancy of 93%, (3,051/3,330 sites), versus 94%
(3,102/3,330) for September 1999. The average monthly homesite rent as of
September 30, 2000 was approximately $361, versus $356, an increase of 1.4% from
September 1999.
<TABLE>
<CAPTION>
TOTAL OCCUPIED OCCUPANCY AVERAGE
CAPACITY SITES RATE RENT*
<S> <C> <C> <C> <C>
Ardmor Village 339 334 99% $342
Camelot Manor 335 320 96% 339
Country Roads 312 276 89% 241
Dutch Hills 278 275 99% 338
El Adobe 369 332 90% 419
Paradise Village 614 493 80% 303
Stonegate Manor 308 294 96% 346
Sunshine Village 356 323 91% 446
West Valley 421 404 96% 479
--- --- --- ----
Total on 9/30/00: 3,330 3,051 93% $361*
Total on 9/30/99: 3,330 3,102 94% $356
</TABLE>
*Average Rent is not weighted average.
-8-
<PAGE> 9
<TABLE>
<CAPTION>
GROSS REVENUES NET INCOME
THREE MONTHS ENDING THREE MONTHS ENDING
9/30/00 9/30/99 9/30/00 9/30/99
<S> <C> <C> <C> <C>
Ardmor Village $ 344,646 $ 345,088 $ 190,138 $ 171,234
Camelot Manor 313,759 290,972 159,549 118,048
Country Roads 201,832 208,169 (43,128) 18,312
Dutch Hills 263,718 245,018 147,124 110,655
El Adobe 426,755 440,484 259,984 281,595
Paradise Village 427,745 361,163 63,163 32,845
Stonegate Manor 292,004 280,787 145,932 123,278
Sunshine Village 403,261 426,171 233,586 292,181
West Valley 600,729 575,544 390,735 349,791
----------- ----------- ----------- -----------
3,274,449 3,173,396 1,547,083 1,497,939
Partnership Management: 41,044 13,343 (12,564) (28,770)
Other expenses: -- -- (169,881) (159,404)
Interest: (477,977) (479,977)
Depreciation and Amortization: -- -- (440,807) (462,500)
----------- ----------- ----------- -----------
$ 3,315,493 $ 3,186,739 $ 445,854 $ 367,288
</TABLE>
COMPARISON OF THE NINE MONTHS ENDED SEPTEMBER 30, 2000 TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1999
Gross revenues increased $318,841, or 3.4%, to $9,810,546 in 2000, as compared
to $9,491,705 in 1999.
As reported in the Statements of Income, total operating expenses increased
$57,885, to $8,347,212 in 2000 compared to $8,289,327 in 1999. Total operating
expenses increased as the result of cost related to upgrading the properties.
Net income increased to $1,463,334 for the nine months ended September 30, 2000
from $1,202,378 for the nine months ended September 30, 1999 due to the increase
in revenue.
COMPARISON OF QUARTER ENDED SEPTEMBER 30, 2000 TO QUARTER ENDED
SEPTEMBER 30, 1999
Gross revenues increased $128,754, or 4.0%, to $3,315,493 in 2000, as compared
to $3,186,739 in 1999.
As reflected in the Statements of Income, total operating expenses increased
$50,188, or 1.8%, to $2,869,639 in 2000 as compared to $2,819,451 in 1999. The
increase in total operating expenses was primarily the result of cost related to
upgrading the properties. Net income increased to $445,854 for the quarter ended
September 30, 2000 from $367,288 for the quarter ended September 30, 1999
primarily due to the increase in revenue.
-9-
<PAGE> 10
ITEM 3.
QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
The Partnership is exposed to interest rate risk 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 September 30, 2000 the Partnership had a note payable
outstanding in the amount of $29,304,639. 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 September 30,
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: November 13, 2000
-11-
<PAGE> 12
EXHIBIT INDEX
Exhibit
No. Description Page
------- ----------- ----
27 Financial Data Schedule
-12-
