Attached files
| file | filename |
|---|---|
| EX-31.2 - UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II /MI/ | v165513_ex31-2.htm |
| EX-31.1 - UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II /MI/ | v165513_ex31-1.htm |
| EX-32.1 - UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II /MI/ | v165513_ex32-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
x QUARTERLY REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the Quarter Ended September 30, 2009
¨ TRANSITION REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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
(State
or other jurisdiction of
incorporation
or organization)
|
38-2702802
(I.R.S.
employer
identification
number)
|
280
Daines Street, Birmingham, Michigan 48009
(Address
of principal executive offices) (Zip Code)
(248)
645-9220
(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 ¨
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-Q or any amendment to this
Form 10-Q ¨
Indicate
by check mark whether the Registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer, or a smaller reporting company.
See the definitions of “large accelerated filer,” “accelerated filer” and
“smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check
one):
|
Large
Accelerated filer ¨
|
Accelerated
filer ¨
|
|
Non-accelerated
filer ¨
|
Smaller
reporting company x
|
Indicate
by check mark whether the Registrant is a shell company (as defined in Rule
12b-2 of the Securities Exchange Act of 1934). Yes ¨ No x
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, 2009 (Unaudited) and
December
31, 2008
|
3
|
|
|
Statements
of Operations
Nine
and Three months ended September 30, 2009
and
2008 (Unaudited)
|
4
|
|
|
Statement
of Partners’ Equity
Nine
months ended September 30, 2009 (Unaudited)
|
4
|
|
|
Statements
of Cash Flows
Nine
months ended September 30, 2009 and 2008 (Unaudited)
|
5
|
|
|
Notes
to Financial Statements
September
30, 2009 (Unaudited)
|
6
|
|
|
ITEM
2.
|
MANAGEMENT'S
DISCUSSION AND ANALYSIS
OF
FINANCIAL CONDITION AND RESULTS
OF
OPERATIONS
|
8
|
|
ITEM
3.
|
QUANTITATIVE
AND QUALITATIVE
DISCLOSURES
ABOUT MARKET RISK
|
11
|
|
ITEM
4.
|
CONTROLS
AND PROCEDURES
|
11
|
|
PART II
|
OTHER
INFORMATION
|
12
|
|
ITEM
1.
|
LEGAL
PROCEEDINGS
|
12
|
|
ITEM 1A.
|
RISK
FACTORS
|
12
|
|
ITEM
6.
|
EXHIBITS
|
12
|
UNIPROP
MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,
A
MICHIGAN LIMITED PARTNERSHIP
BALANCE
SHEETS
|
ASSETS
|
September 30,
2009 |
December 31,
2008
|
||||||
|
(Unaudited)
|
||||||||
|
Properties:
|
||||||||
|
Land
|
$ | 8,952,937 | $ | 8,952,937 | ||||
|
Buildings
And Improvements
|
41,399,648 | 41,241,255 | ||||||
|
Furniture
And Fixtures
|
576,801 | 560,906 | ||||||
| 50,929,386 | 50,755,098 | |||||||
|
Less
Accumulated Depreciation
|
(29,295,273 | ) | (28,197,016 | ) | ||||
| 21,634,113 | 22,558,082 | |||||||
|
Cash
And Cash Equivalents
|
7,204,981 | 7,469,961 | ||||||
|
Unamortized
Finance Costs
|
659,108 | 679,922 | ||||||
|
Manufactured
Homes and Improvements
|
513,548 | 787,563 | ||||||
|
Other
Assets
|
1,725,220 | 1,383,357 | ||||||
|
Total
Assets
|
$ | 31,736,970 | $ | 32,878,885 | ||||
|
LIABILITIES
& PARTNERS' EQUITY
|
September 30,
2009 |
December 31,
2008 |
||||||
|
(Unaudited)
|
||||||||
|
Accounts
Payable
|
$ | 139,587 | $ | 91,120 | ||||
|
Other
Liabilities
|
625,156 | 489,596 | ||||||
|
Notes
Payable
|
22,848,698 | 23,133,242 | ||||||
|
Total
Liabilities
|
$ | 23,613,441 | $ | 23,713,958 | ||||
|
Partners'
Equity:
|
||||||||
|
General
Partner
|
415,942 | 418,428 | ||||||
|
Unit
Holders
|
7,707,587 | 8,746,499 | ||||||
|
Total
Partners' Equity
|
8,123,529 | 9,164,927 | ||||||
|
Total
Liabilities And
|
||||||||
|
Partners'
Equity
|
$ | 31,736,970 | $ | 32,878,885 | ||||
See Notes
to Financial Statements
- 3
-
UNIPROP
MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,
A
MICHIGAN LIMITED PARTNERSHIP
|
STATEMENTS
OF OPERATIONS
|
NINE
MONTHS ENDED
|
THREE
MONTHS ENDED
|
||||||||||||||
|
(unaudited)
|
September 30,
2009 |
September 30,
2008 |
September 30,
2009 |
September 30,
2008 |
||||||||||||
|
Income:
|
||||||||||||||||
|
Rental
Income
|
$ | 5,468,039 | $ | 5,330,020 | $ | 1,839,168 | $ | 1,761,758 | ||||||||
|
Home
Sale Income
|
449,200 | 694,084 | 64,060 | 269,450 | ||||||||||||
|
Other
|
420,905 | 591,614 | 139,892 | 167,614 | ||||||||||||
|
Total
Income
|
6,338,144 | $ | 6,615,718 | 2,043,120 | 2,198,822 | |||||||||||
|
Operating
Expenses:
|
||||||||||||||||
|
Administrative
Expenses
|
||||||||||||||||
|
(Including
$290,395, $297,765, $97,602 and $95,990, in Property Management Fees Paid
to an Affiliate for the Nine and Three Month Period Ended September 30,
2009 and 2008 Respectively)
|
1,753,150 | 1,649,193 | 553,394 | 545,898 | ||||||||||||
|
Property
Taxes
|
738,670 | 691,560 | 245,691 | 230,451 | ||||||||||||
|
Utilities
|
474,517 | 466,773 | 162,623 | 165,064 | ||||||||||||
|
Property
Operations
|
733,064 | 567,097 | 181,513 | 232,256 | ||||||||||||
|
Depreciation
|
1,098,257 | 1,093,150 | 370,160 | 366,905 | ||||||||||||
|
Interest
|
1,162,450 | 1,729,548 | 385,904 | 895,576 | ||||||||||||
|
Home
Sale Expense
|
626,621 | 819,908 | 108,505 | 342,131 | ||||||||||||
|
Total
Operating Expenses
|
6,586,729 | 7,017,229 | 2,007,790 | 2,778,281 | ||||||||||||
|
(Loss)
Income from Continuing Operations
|
(248,585 | ) | (401,511 | ) | 35,330 | (579,459 | ) | |||||||||
|
(Loss)
Income from Discontinued Operations
|
0 | 816,796 | 0 | 820,513 | ||||||||||||
|
Net
(Loss) Income
|
$ | (248,585 | ) | $ | 415,285 | $ | 35,330 | $ | 241,054 | |||||||
|
(Loss)
Income Per Unit:
|
||||||||||||||||
|
Continued
Operations
|
(0.08 | ) | (0.12 | ) | 0.01 | (0.18 | ) | |||||||||
|
Discontinued
Operations
|
0.00 | 0.25 | 0.00 | 0.25 | ||||||||||||
|
Distribution
Per Unit:
|
0.24 | 0.24 | 0.08 | 0.08 | ||||||||||||
|
Weighted
Average Number Of Units Of Beneficial Assignment Of Limited Partnership
Interest Outstanding During The Nine and Three Month Period Ended
September 30, 2009 and 2008.
|
3,303,387 | 3,303,387 | 3,303,387 | 3,303,387 | ||||||||||||
|
STATEMENT
OF PARTNERS' EQUITY (Unaudited)
|
||||||||||||
|
General Partner
|
Unit Holders
|
Total
|
||||||||||
|
Balance,
December 31, 2008
|
$ | 418,428 | $ | 8,746,499 | $ | 9,164,927 | ||||||
|
Distributions
|
(792,813 | ) | (792,813 | ) | ||||||||
|
Net
(Loss) Income
|
(2,486 | ) | (246,099 | ) | (248,585 | ) | ||||||
|
Balance
as of September 30, 2009
|
$ | 415,942 | $ | 7,707,587 | $ | 8,123,529 | ||||||
See Notes
to Financial Statements
- 4
-
UNIPROP
MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,
A MICHIGAN
LIMITED PARTNERSHIP
STATEMENTS
OF CASH FLOWS
(Unaudited)
|
NINE
MONTHS ENDED
|
||||||||
|
September 30,
2009 |
September 30,
2008 |
|||||||
|
Cash
Flows From Operating Activities:
|
||||||||
|
Net
(Loss) Income
|
$ | (248,585 | ) | $ | 415,285 | |||
|
Adjustments
To Reconcile Net (Loss) Income
|
||||||||
|
To
Net Cash Provided By
|
||||||||
|
Operating
Activities:
|
||||||||
|
Depreciation
|
1,098,257 | 1,152,724 | ||||||
|
Amortization
|
20,814 | 17,396 | ||||||
|
Gain
on Sale of Discontinued Operations
|
0 | (880,656 | ) | |||||
|
Decrease
(Increase) in Manufactured Homes
and Improvements
|
274,015 | (6,561 | ) | |||||
|
Increase In
Other Assets
|
(341,863 | ) | (572,158 | ) | ||||
|
Increase
(Decrease) In Accounts Payable
|
48,467 | (19,309 | ) | |||||
|
Increase
In Other Liabilities
|
135,560 | 68,168 | ||||||
|
Total
Adjustments
|
1,235,250 | (240,396 | ) | |||||
|
Net
Cash Provided By
|
||||||||
|
Operating
Activities
|
986,665 | 174,889 | ||||||
|
Cash
Flows (Used In) Provided By Investing Activities:
|
||||||||
|
Purchase
of property and equipment
|
(174,288 | ) | (207,496 | ) | ||||
|
Proceeds
from Sale of Discontinued Operations
|
0 | 2,934,000 | ||||||
|
Net
Cash (Used In) Provided By Investing Activities
|
(174,288 | ) | 2,726,504 | |||||
|
Cash
Flows From Financing Activities:
|
||||||||
|
Distributions
To Unit Holders
|
(792,813 | ) | (792,813 | ) | ||||
|
Payment
On Mortgage
|
(284,544 | ) | (25,687,191 | ) | ||||
|
Proceeds
From Mortgage Refinancing
|
0 | 23,225,000 | ||||||
|
Net
Cash Used In
|
||||||||
|
Financing
Activities
|
(1,077,357 | ) | (3,255,004 | ) | ||||
|
Decrease
In Cash and Equivalents
|
(264,980 | ) | (353,611 | ) | ||||
|
Cash
and Equivalents, Beginning
|
7,469,961 | 8,715,423 | ||||||
|
Cash
and Equivalents, Ending
|
$ | 7,204,981 | $ | 8,361,812 | ||||
See Notes
to Financial Statements
- 5
-
UNIPROP
MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,
A
MICHIGAN LIMITED PARTNERSHIP
NOTES
TO FINANCIAL STATEMENTS
September
30, 2009 (Unaudited)
1. Basis
of Presentation:
The
accompanying unaudited 2009 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
notes 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,
2008 has been derived from the audited financial statements at that
date. Operating results for the three and nine months ended September
30, 2009 are not necessarily indicative of the results that may be expected for
the year ending December 31, 2009, 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 ended December 31, 2008.
We have
evaluated subsequent events through the date of this filing. We do not believe
there are any material subsequent events which would require further
disclosure.
2. Recent
Accounting Pronouncements:
In
June 2009, the Financial Accounting Standards Board (FASB) issued SFAS No.
168, “The FASB Accounting Standards Codification and the Hierarchy of Generally
Accepted Accounting Principles.” SFAS No. 168 approved the FASB Accounting
Standards Codification (the Codification) as the single source of authoritative
nongovernmental GAAP. All existing accounting standard documents, such as FASB,
American Institute of Certified Public Accountants, Emerging Issues Task Force
and other related literature, excluding guidance from the Securities and
Exchange Commission, have been superseded by the Codification. All other
non-grandfathered, non-SEC accounting literature not included in the
Codification has become nonauthoritative. The Codification is effective for
interim or annual periods ending after September 15, 2009. There have been
no changes to the content of our financial statements or disclosures as a result
of implementing the Codification during the quarter ended September 30, 2009.
However, as a result of implementation of the Codification, previous references
to new accounting standards and literature are no longer applicable. All future
references to authoritative accounting literature in our consolidated financial
statements will be referenced in accordance with the Codification.
3. Discontinued
Operation:
As
described in Form 8-K dated July 28, 2008, the Partnership had entered into a
Contract for Sale and Purchase of Real and Personal Property with a private
buyer for the Country Roads Manufactured Housing Community located in
Jacksonville, Florida. On August 7, 2008, the sale closed with a
purchase price of $3,000,000, less closing costs for proceeds in the amount of
$2,934,000. The Partnership recognized a gain on the sale of
approximately $ 881,000. The Partnership distributed approximately $562,000 from
the sale to its unit holders with the balance of the proceeds being maintained
in reserve until such time as the General Partner determines the optimal use of
the funds. As a result of the sale, the Partnership has classified the Country
Roads community and associated financial results as “discontinued operations” in
the accompanying financial statements for all historical
periods.
- 6
-
The major
classes of revenue and expenses of Discontinued operations for the period ending
September 30, 2008, were as follows:
(1) Total
Revenue of $291,239 consisting of Rent Revenue of $251,239 and Other Revenue of
$40,097; and (2) Total Operating Expenses of $355,190, consisting of
Administrative Expenses of $179,838, Property Tax Expenses of $34,093, Utility
Expenses of $46,919, Property Operation Expenses of $34,766, and Depreciation
Expense of $59,574.
4. Mortgage
Payable:
On August
29, 2008, the Partnership refinanced its existing mortgage note payable and
executed seven new mortgages payable in the amount of $23,225,000 secured by the
seven properties of the Partnership. To pay off the prior mortgage balance of
$25,277,523 and the costs of refinancing, the Partnership transferred $2,735,555
from cash reserves. The mortgages are payable in monthly installments
of interest and principal through September 2033. Interest on these
notes is accrued at a fixed rate of 6.625% for five years, at which time, the
rate will reset to the lender’s then prevailing market rate. As of
September 30, 2009 the balance on these notes was $22,848,698.
The
Partnership incurred $693,798 in financing costs as a result of the refinancing
which is being amortized over the life of the loan. This included a
1% fee payable to an affiliate of the General Partner.
Future
maturities on the note payable for the next five years and thereafter are as
follows: remainder of 2009 - $95,024; 2010 - $408,698; 2011 - $436,612; 2012 -
$466,432; 2013 - $498,289; and thereafter - $20,940,643.
5. Fair
Value Measurements:
The
Partnership does not have assets or liabilities which are measured at fair value
on a recurring basis. Effective January 1, 2009, all other nonfinancial assets
and liabilities measured at fair values in financial statements on a
nonrecurring basis are subject to SFAS No. 157. Nonfinancial nonrecurring assets
and liabilities included on our balance sheets include long lived assets that
are measured at fair value to test for and measure an impairment change, when
necessary. No such nonfinancial assets or liabilities were subject to
SFAS No. 157 for the quarter ended September 30, 2009.
- 7
-
ITEM
2.
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND
RESULTS OF
OPERATIONS
Critical Accounting
Policies
See Part
II, Item 7 – Critical Accounting Policies, our consolidated financial statements
and related notes in Part IV, Item 15 of our Annual Report on Form
10-K for the year ended December 31, 2008 filed with the SEC on March 30, 2009
for accounting policies and related estimates we believe are the most critical
to understanding condensed consolidated financial statements, financial
conditions and results of operations and which require complex management
judgment and assumptions or involve uncertainties. There have been no
material changes to the critical accounting policies and estimates previously
disclosed in that report.
Recent Accounting
Pronouncements
See Note
2 – Recent Accounting Pronouncements of this Report for recent accounting
pronouncements that may have an impact on the Company’s consolidated financial
statements.
Liquidity and Capital
Resources
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.
The
Partnership's capital resources consist primarily of its seven manufactured home
communities. On August 29, 2008, the Partnership refinanced these properties
with Stancorp Mortgage Investors, LLC (the “Refinancing”) in the amount of
$23,225,000 secured by the seven properties of the Partnership. To pay off the
prior mortgage balance of $25,277,523 and the costs of refinancing, the
Partnership transferred $2,735,555 from cash reserves. The mortgages
are payable in monthly installments of interest and principal through September
2033. Interest on these notes are accrued at a fixed rate of 6.625%
for five years, at which time, the rate will reset to the lenders then
prevailing market rate. As of September 30, 2009 the balance on these
notes was $22,848,698. The
Partnership incurred $693,798 in financing costs as a result of the refinancing
which is being amortized over the life of the loan. This included a
1% fee payable to an affiliate of the General Partner.
As
described in Form 8-K dated July 28, 2008, the Partnership had entered into a
Contract for Sale and Purchase of Real and Personal Property with a private
buyer for the Country Roads Manufactured Housing Community located in
Jacksonville, Florida. On August 7, 2008, the buyer closed on a
purchase price of $3,000,000, less closing costs for proceeds in the amount of
$2,934,000. The Partnership recognized a gain on the sale of
approximately $ 881,000. As a result of the sale, the Partnership has
classified the Country Roads community and associated financial results as
“discontinued operations” in the accompanying financial statements for all
historical periods.
As a
result of the Refinancing, all of the Partnership’s seven properties are
mortgaged. At the time of the Refinancing, the aggregate principal amount due
under the seven mortgage notes was $23,225,000 and the aggregate fair market
value of the Partnership’s mortgaged properties was $73,550,000. The
Partnership expects to meet its short-term liquidity needs generally through its
working capital provided by operating activities.
- 8
-
The
General Partner has decided to distribute $264,271, or $.08 per unit, to the
unit holders for the third quarter ended September 30, 2009. The General Partner
will continue to monitor cash flow generated by the Partnership’s seven
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.
As of
September 30, 2009, the Partnership’s cash balance amounted to $7,204,981. The
level of cash balance maintained is at the discretion of the General
Partner.
Results of
Operations
Overall,
as illustrated in the following table, the Partnership's seven properties
reported combined occupancy of 54% at the end of September 2009 versus 54% at
the end of September 2008. The average monthly homesite rent as of September 30,
2009 was approximately $475, versus $466 from September 2008 (average rent not a
weighted average).
|
Total
|
Occupied
|
Occupancy
|
Average*
|
|||||||||||||
|
Capacity
|
Sites
|
Rate
|
Rent
|
|||||||||||||
|
Ardmor
Village
|
339 | 176 | 52 | % | $ | 480 | ||||||||||
|
Camelot
Manor
|
335 | 118 | 35 | % | 403 | |||||||||||
|
Dutch
Hills
|
278 | 127 | 46 | % | 404 | |||||||||||
|
El
Adobe
|
367 | 200 | 55 | % | 498 | |||||||||||
|
Stonegate
Manor
|
308 | 121 | 39 | % | 390 | |||||||||||
|
Sunshine
Village
|
356 | 230 | 65 | % | 586 | |||||||||||
|
West
Valley
|
421 | 325 | 77 | % | 564 | |||||||||||
|
Total
on 9/30/09:
|
2,404 | 1,297 | 54 | % | $ | 475 | ||||||||||
|
Total
on 9/30/08:
|
2,404 | 1,309 | 54 | % | $ | 466 | ||||||||||
*Not
a weighted average
- 9
-
|
Gross Revenue
|
Net Operating Income
and Net (Loss) Income
|
Gross Revenue
|
Net Operating Income
and Net (Loss) Income
|
|||||||||||||||||||||||||||||
|
9/30/2009
|
9/30/2008
|
9/30/2009
|
9/30/2008
|
09/30/2009
|
09/30/2008
|
09/30/2009
|
09/30/2008
|
|||||||||||||||||||||||||
|
three months ended
|
three months ended
|
nine months ended
|
nine months ended
|
|||||||||||||||||||||||||||||
|
Ardmor
|
$ | 257,752 | $ | 265,005 | $ | 128,054 | $ | 116,062 | $ | 787,985 | $ | 816,361 | $ | 355,530 | $ | 373,895 | ||||||||||||||||
|
Camelot
Manor
|
169,522 | 184,381 | 24,648 | 39,239 | 508,554 | 578,054 | 109,819 | 147,742 | ||||||||||||||||||||||||
|
Dutch
Hills
|
157,367 | 174,237 | 66,564 | 63,771 | 494,773 | 561,462 | 207,259 | 198,137 | ||||||||||||||||||||||||
|
El
Adobe
|
302,348 | 321,375 | 143,383 | 157,225 | 946,062 | 958,007 | 464,001 | 498,101 | ||||||||||||||||||||||||
|
Stonegate
|
160,338 | 178,757 | 61,136 | 38,328 | 498,828 | 585,443 | 166,051 | 241,977 | ||||||||||||||||||||||||
|
Sunshine
|
384,719 | 364,469 | 169,634 | 88,456 | 1,191,566 | 1,032,441 | 512,151 | 404,096 | ||||||||||||||||||||||||
|
West
Valley
|
604,319 | 670,336 | 340,001 | 295,557 | 1,885,828 | 1,943,354 | 961,592 | 939,875 | ||||||||||||||||||||||||
| 2,036,365 | 2,158,560 | 933,420 | 798,638 | 6,313,596 | 6,475,122 | 2,776,403 | 2,803,823 | |||||||||||||||||||||||||
|
Partnership
Management
|
6,755 | 40,262 | (100,279 | ) | (43,560 | ) | 24,548 | 140,596 | (418,195 | ) | (237,783 | ) | ||||||||||||||||||||
|
Other
Expense
|
— | — | (41,747 | ) | (72,057 | ) | — | — | (346,086 | ) | (144,853 | ) | ||||||||||||||||||||
|
Interest
Expense
|
— | — | (385,904 | ) | (895,576 | ) | — | — | (1,162,450 | ) | (1,729,548 | ) | ||||||||||||||||||||
|
Depreciation
|
— | — | (370,160 | ) | (366,905 | ) | — | — | (1,098,257 | ) | (1,093,150 | ) | ||||||||||||||||||||
|
Continuing
Operations
|
$ | 2,043,120 | $ | 2,198,822 | $ | 35,330 | $ | (579,460 | ) | $ | 6,338,144 | $ | 6,615,718 | $ | (248,585 | ) | $ | (401,511 | ) | |||||||||||||
|
Discontinued
Operations
|
— | 996,607 | — | 820,514 | — | 1,237,986 | — | 816,796 | ||||||||||||||||||||||||
| $ | 2,043,120 | $ | 3,195,429 | $ | 35,330 | $ | 241,054 | $ | 6,338,144 | $ | 7,853,704 | $ | (248,585 | ) | $ | 415,285 | ||||||||||||||||
Net
Operating Income (“NOI”) is a non-GAAP financial measure equal to net income,
the most comparable GAAP financial measure, plus depreciation, interest expense,
partnership management expense, and other expenses. The Partnership
believes that NOI is useful to investors and the Partnership’s management as an
indication of the Partnership’s ability to service debt and pay cash
distributions. NOI presented by the Partnership may not be comparable
to NOI reported by other companies that define NOI differently, and should not
be considered as an alternative to net income as an indication of performance or
to cash flows as a measure of liquidity or ability to make
distributions.
Comparison
of Three Months Ended September 30, 2009 to Three Months Ended September 30,
2008
Gross
revenues from continuing operations decreased $155,702 to $2,043,120 in 2009,
from $2,198,822 in 2008. This was mainly due to decreased home sale
activity and other revenue. This was offset by an increase in rental revenue due
to higher occupancy at the Sunshine Village property, in Davie Florida, as a
result of the relocation of residents from a neighboring, closed manufactured
home community.
As
described in the Statements of Operations, total operating expenses decreased
$770,491, to $2,007,790 in 2009, as compared to $2,778,281 in
2008. This was mainly a result of decreased interest expense due to
the mortgage refinancing. Property operations and home sale
expenditures also decreased.
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As a
result of the aforementioned factors, the Partnership experienced Net Income
from continuing operations of $35,330 for the third quarter of 2009 compared to
a Net Loss of $579,459 for the third quarter of 2008.
Comparison
of Nine Months Ended September 30, 2009 to Nine Months Ended September 30,
2008
Gross
revenues from continuing operations decreased $277,574 to $6,338,144 in 2009,
from $6,615,718 in 2008. The decrease was mainly due to a decrease in
other income and home sale income. This was offset by an increase in
rental revenue due to higher occupancy at the Sunshine Village property, in
Davie Florida, as a result of the relocation of residents from a neighboring,
closed manufactured home community.
As
described in the Statements of Operations, total operating expenses from
continuing operations decreased $430,500, to $6,586,729 in 2009, as compared to
$7,017,229 in 2008. The decrease was primarily a result of decreased
interest expense due to the mortgage refinancing.
As a
result of the aforementioned factors, the Partnership experienced a Net Loss
from continuing operations of $248,585 in 2009 as compared to a Net Loss of
$401,511 in 2008.
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 September 30, 2009 the Partnership had notes payable
outstanding in the amount of $22,848,698. Interest on these notes is
at a fixed annual rate of 6.625% through September 2013, at which time, the rate
will reset to the lender’s then prevailing market rate.
The
Partnership does not enter into financial instruments transactions for trading
or other speculative purposes or to manage its interest rate
exposure.
ITEM
4.
CONTROLS
AND PROCEDURES
As of the
end of the period covered by this report, the Partnership carried out an
evaluation, under the supervision and with the participation of the Principal
Executive Officer and the Principal Financial Officer, of the effectiveness of
the design and operation of our disclosure controls and procedures pursuant to
Exchange Act Rule 13a-15. Based upon, and as of the date of, this
evaluation, the Principal Executive Officer and the Principal Financial Officer
concluded that our disclosure controls and procedures are effective to ensure
that information required to be disclosed in the quarterly report is recorded,
processed, summarized and reported as and when required.
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-
There was
no change in the Partnership’s internal controls over financial reporting that
occurred during the most recent completed quarter that has materially affected,
or is reasonably likely to materially affect, the Partnership’s internal control
over financial reporting.
PART II - OTHER
INFORMATION
ITEM
1. LEGAL
PROCEEDINGS
None.
ITEM
1A. RISK FACTORS
In
addition to the other information set forth in this report, you should carefully
consider the factors discussed in Part I, “Item IA. Risk Factors” in
our Annual Report on Form 10-K for the year ended December 31, 2008, which could
materially affect our business, financial condition or future
results. The risks described in our Annual Report on Form 10-K are
not the only risks facing our Company. Additional risks and
uncertainties not currently known to us or that we currently deem to be
immaterial also may adversely affect our business, financial condition and/or
operating results.
ITEM
6. EXHIBITS
|
Exhibit 31.1
|
Principal
Executive Officer Certification pursuant to Rule 13a-14(a)/15d-14(a) ofThe
Securities and Exchange Act of 1934, as
amended
|
|
Exhibit 31.2
|
Principal
Financial Officer Certification pursuant to Rule 13a-14(a)/15d-14(a) ofThe
Securities and Exchange Act of 1934, as
amended
|
|
Exhibit 32.1
|
Certifications
pursuant to 18 U.S C. Section 1350, as adopted pursuant to Section906 of
the Sarbanes –Oxley Act of
2002.
|
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-
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/ Joel Schwartz
|
||
| Joel Schwartz, Principal Financial Officer | |||
Dated:
November 12, 2009
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