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FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 1-11718
MANUFACTURED HOME COMMUNITIES, INC.
(Exact name of registrant as specified in its Charter)
MARYLAND 36-3857664
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
TWO NORTH RIVERSIDE PLAZA, SUITE 800,
CHICAGO, ILLINOIS 60606
(Address of principal executive offices) (Zip Code)
(312) 474-1122
(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 ( )
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
24,719,716 SHARES OF COMMON STOCK AS OF OCTOBER 31, 1997.
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MANUFACTURED HOME COMMUNITIES, INC.
TABLE OF CONTENTS
PART I - FINANCIAL STATEMENTS
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
INDEX TO FINANCIAL STATEMENTS
Page
----
Consolidated Balance Sheets as of September 30, 1997 and December 31, 1996......................................3
Consolidated Statements of Operations for the nine months and quarters ended September 30, 1997 and
1996............................................................................................................4
Consolidated Statements of Cash Flows for the nine months ended September 30, 1997 and 1996.....................5
Notes to Consolidated Financial Statements......................................................................6
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations..............................................................................12
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings......................................................................................19
ITEM 6. Exhibits and Reports on Form 8-K.......................................................................19
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MANUFACTURED HOME COMMUNITIES, INC.
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
September 30, December 31,
1997 1996
--------------- --------------
ASSETS
Investment in rental property:
Land.................................................... $169,785 $138,514
Land improvements....................................... 500,376 370,440
Buildings and other depreciable property................ 90,527 88,696
--------------- --------------
760,688 597,650
Accumulated depreciation................................ (84,095) (71,481)
--------------- --------------
Net investment in rental property................... 676,593 526,169
Cash and cash equivalents.................................. 413 324
Short-term investments (at cost, which approximates market) 2,816 1,968
Notes receivable........................................... 2,818 15,427
Investment in and advances to affiliates................... 6,586 6,836
Investment in partnerships................................. 34,429 ---
Rents receivable........................................... 745 723
Deferred financing costs, net.............................. 1,496 1,999
Prepaid expenses and other assets.......................... 2,376 14,279
Due from affiliates........................................ 53 149
--------------- --------------
Total assets............................................ $728,325 $567,874
=============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable.................................. $211,333 $197,482
Term loan............................................... 60,000 ---
Line of credit.......................................... 55,500 57,500
Other notes payable..................................... 6,625 ---
Accounts payable and accrued expenses................... 28,947 14,364
Accrued interest payable................................ 1,915 1,495
Rents received in advance and security deposits......... 4,304 1,897
Distributions payable................................... 10,147 8,439
Due to affiliates....................................... 99 105
--------------- --------------
Total liabilities................................... 378,870 281,282
--------------- --------------
Minority interests......................................... 71,844 28,640
--------------- --------------
Stockholders' equity:
Preferred stock, $.01 par value
10,000,000 shares authorized; none issued........... --- ---
Common stock, $.01 par value
50,000,000 shares authorized; 24,717,716 and
24,951,948 shares issued and outstanding for 1997 and
1996, respectively.................................. 247 249
Paid-in capital......................................... 315,790 293,512
Employee notes.......................................... (6,069) (6,158)
Distributions in excess of accumulated earnings......... (32,357) (29,651)
--------------- --------------
Total stockholders' equity.......................... 277,611 257,952
--------------- --------------
Total liabilities and stockholders' equity.............. $728,325 $567,874
=============== ==============
The accompanying notes are an integral part of the financial statements.
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MANUFACTURED HOME COMMUNITIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS AND QUARTERS ENDED SEPTEMBER 30, 1997 AND 1996
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
For the Nine Months Ended For the Quarters Ended
September 30, September 30,
--------------------------- -------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
REVENUES
Base rental income............................ $ 78,439 $ 69,089 $ 27,461 $ 23,429
Utility and other income...................... 8,447 6,601 2,964 2,062
Equity in income of affiliates................ 511 513 304 306
Interest income............................... 1,670 1,802 424 611
------------ ------------ ------------ ------------
Total revenues............................. 89,067 78,005 31,153 26,408
------------ ------------ ------------ ------------
EXPENSES
Property operating and maintenance............ 23,520 21,004 8,246 7,006
Real estate taxes............................. 5,966 6,048 2,052 2,032
Property management........................... 3,649 3,272 1,237 1,047
General and administrative.................... 3,241 2,955 1,029 1,003
Interest and related amortization............. 15,573 13,067 5,556 4,427
Depreciation on corporate assets.............. 437 342 148 122
Depreciation on real estate assets
and other costs............................ 12,136 10,949 4,102 3,626
------------ ------------ ------------ ------------
Total expenses............................. 64,522 57,637 22,370 19,263
------------ ------------ ------------ ------------
Income before allocation to minority interests 24,545 20,368 8,783 7,145
(Income) allocated to minority interests...... (2,695) (2,019) (1,141) (708)
------------ ------------ ------------ ------------
Net income.................................... $ 21,850 $ 18,349 $ 7,642 $ 6,437
============ ============ ============ ============
Net income per weighted average common share
outstanding................................ $ .88 $ .74 $ .31 $ .26
============ ============ ============ ============
Distributions declared
per common share outstanding............... $ .99 $ .915 $ .33 $ .305
============ ============ ============ ============
Weighted average common shares outstanding.... 24,709 24,683 24,575 24,697
============ ============ ============ ============
The accompanying notes are an integral part of the financial statements.
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MANUFACTURED HOME COMMUNITIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
1997 1996
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................................. $ 21,850 $ 18,349
Adjustments to reconcile net income to
cash provided by operating activities:
Income allocated to minority interests..................... 2,695 2,019
Depreciation and amortization expense...................... 13,630 12,093
Equity in income of affiliates............................. (511) (513)
Amortization of deferred compensation and other............ 654 60
Writeoff of a management contract and project costs........ (258) ---
(Increase) decrease in rents receivable.................... (22) 80
(Increase) decrease in prepaid expenses and other assets... (719) 401
Increase in accounts payable and accrued expenses.......... 5,113 7,220
Increase in rents received in advance and security deposits 2,407 2,022
------------ ------------
Net cash provided by operating activities....................... 44,839 41,731
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
(Purchase) of short-term investments, net........................ (848) (2,097)
Sale (purchase) of project related assets........................ 11,148 (10,028)
Distributions from affiliates.................................... 670 1,623
Investment in partnerships....................................... (18,528) ---
Collection of principal payments on notes receivable and
prepayment penalty............................................ 14,438 140
Acquisition of rental properties................................. (93,498) (28,968)
Improvements:
Improvements - corporate................................... (221) (758)
Improvements - rental properties........................... (2,469) (2,755)
Site development costs..................................... (1,647) (1,899)
------------ ------------
Net cash used in investing activities......................... (90,955) (44,742)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from exercise of stock options................... 1,831 514
Distributions to common stockholders and minority interests... (26,630) (24,708)
Repurchase of common stock.................................... (7,260) ---
Collection of principal payments on employee notes............ 89 72
Proceeds from line of credit and term loan.................... 171,603 33,600
Repayments on mortgage notes payable and line of credit....... (93,128) (4,719)
Debt issuance costs........................................... (300) (201)
------------ ------------
Net cash provided by financing activities..................... 46,205 4,558
------------ ------------
Net increase in cash and cash equivalents........................... 89 1,547
Cash and cash equivalents, beginning of period...................... 324 760
------------ ------------
Cash and cash equivalents, end of period............................ $ 413 $ 2,307
============ ============
SUPPLEMENTAL INFORMATION:
Cash paid during the period for interest............................ $ 14,350 $ 12,207
============ ============
The accompanying notes are an integral part of the financial statements.
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MANUFACTURED HOME COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PRESENTATION:
These unaudited Consolidated Financial Statements of Manufactured Home
Communities, Inc., a Maryland corporation, and its subsidiaries (collectively,
the "Company"), have been prepared pursuant to the Securities and Exchange
Commission ("SEC") rules and regulations and should be read in conjunction with
the financial statements and notes thereto included in the Company's 1996
Annual Report on Form 10-K (the "1996 Form 10-K"). The following Notes to
Consolidated Financial Statements highlight significant changes to the Notes
included in the 1996 Form 10-K and present interim disclosures as required by
the SEC. The accompanying Consolidated Financial Statements reflect, in the
opinion of management, all adjustments necessary for a fair presentation of the
interim financial statements. All such adjustments are of a normal and
recurring nature. Certain reclassifications have been made to the prior
periods' financial statements in order to conform with current period
presentation.
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
(a) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
(b) Earnings Per Common Share
Statement of Financial Accounting Standards No. 128 "Earnings Per Share"
("SFAS No. 128") is effective for years ending after December 15, 1997. The
Company will adopt SFAS No. 128 as of December 31, 1997 (earlier adoption is
not permitted). The Company expects the impact of the adoption of SFAS No. 128
to be immaterial. Had the Company adopted SFAS No. 128 in the third quarter of
1997, the impact would have been immaterial.
NOTE 2 - COMMON STOCK AND RELATED TRANSACTIONS
The Company paid a $.33 per share distribution on April 11, 1997, July 11,
1997 and October 10, 1997, for the quarters ended March 31, 1997, June 30, 1997
and September 30, 1997, respectively, to stockholders of record on March 28,
1997, June 27, 1997 and September 26, 1997, respectively.
In March 1997, the Company's Board of Directors approved a common stock
repurchase plan whereby the Company is authorized to repurchase up to 1,000,000
shares of its common stock. As of September 30, 1997, the Company had
repurchased 330,300 shares of common stock.
On August 29, 1997, the Company, as general partner of the MHC Operating
Limited Partnership ("Operating Partnership"), approved the addition of new
limited partners (the "MPW Limited Partners") to the Operating Partnership in
connection with the acquisition of properties from limited partners and joint
ventures affiliated with Mobileparks West, a California limited partnership
("MPW"). The MPW Limited Partners received 3,018,926 units of limited
partnership interest ("OP Units") which are exchangeable on a one-for-one basis
for shares of the Company's common stock.
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MANUFACTURED HOME COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3 - RENTAL PROPERTY
On March 14, 1997, the Company acquired California Hawaiian Mobile Estates
("California Hawaiian"), located in San Jose, California, for a purchase price
of approximately $23.3 million. The acquisition was funded with a borrowing
under the Company's line of credit. California Hawaiian consists of
approximately 412 developed sites.
On March 27, 1997, the Company acquired Golf Vista Estates ("Golf Vista"),
located in Monee, Illinois. The purchase price of approximately $7.4 million,
including deferred payments of $150,000 per year for the next five years, was
funded with existing available cash. Golf Vista consists of approximately 200
developed sites and 319 expansion sites.
On May 29, 1997, the Company entered into a capital lease with East Tincup
Village, Inc., a Colorado corporation, for Golden Terrace South (formerly known
as East Tincup Village). The lease term is 110 months commencing on May 29,
1997, with monthly rental payments of approximately $18,000. The lease
contains an option for the Company to purchase Golden Terrace South at the
termination of the lease for $2.4 million. For financial accounting purposes,
the Company accounts for the lease as a direct financing lease; and,
accordingly, the Company has recorded an investment in real estate and a note
payable. Golden Terrace South consists of 80 developed sites and 86
recreational vehicle sites.
On August 29, 1997, the Company acquired seventeen manufactured home
communities, a 50% general partnership interest in one manufactured home
community, and two commercial properties (collectively, the "MPW Properties")
from limited partnerships and joint ventures affiliated with MPW. The
aggregrate purchase price was approximately $103 million. Approximately $64
million of the purchase price was in the form of OP Units, approximately $6
million was in the form of installment notes payable, approximately $17 million
was in the form of cash funded from a borrowing under the Company's line of
credit, and the Company assumed debt of approximately $13 million. The MPW
Properties, which consist of approximately 3,500 sites, are located in
California, Oregon, Utah, Arizona, Nevada and Washington.
On September 16, 1997, the Company acquired Arrowhead Village, located in
Lantana, Florida, for a purchase price of approximately $20.3 million. The
acquisition was funded with a borrowing under the Company's line of credit.
Arrowhead Village consists of approximately 602 developed sites.
The Company is actively seeking to acquire additional manufactured home
communities and currently is engaged in negotiations relating to the possible
acquisition of a number of manufactured home communities. At any time these
negotiations are at varying stages which may include contracts outstanding to
acquire certain manufactured home communities which are subject to satisfactory
completion of the Company's due diligence review.
NOTE 4 - INVESTMENT IN PARTNERSHIPS
On September 8, 1997, the Company entered into an agreement with Gerald D.
Ellenburg as a general partner of various partnerships (the "Ellenburg
Partnerships") to purchase 38 manufactured home communities located primarily
in Florida, Arizona and California (the "Ellenburg Communities") for a purchase
price in excess of $300 million. The agreement immediately transferred property
management of the Ellenburg Communities to the Company. The sale of the
Ellenburg Communities to the Company is subject to the approval of the
California Superior Court in a matter involving the wind up of the affairs of
Ellenburg Capital Corporation, the approval of limited partners of the
Ellenburg Partnerships and certain other conditions, therefore, there can be no
assurance that the Company will ultimately close on the purchase of the
Ellenburg Communities.
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MANUFACTURED HOME COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4 - INVESTMENT IN PARTNERSHIPS (CONTINUED)
On August 7, 1997, the Company offered to purchase limited partnership
interests in various partnerships which own 30 of the Ellenburg Communities.
The offers expired on October 2, 1997. As of September 30, 1997, the Company
recorded its investment in the partnerships of approximately $34.4 million.
Approximately $27 million of the investment represents cash payments to be made
to certain limited partners. Approximately $7.6 million of the investment
represents limited partners who will receive payment either (i) in the form of
preferred limited partnership interests with structured payments over periods
ranging from six to eight years, or (ii) a cash payment representing the market
value of the preferred limited partnership interests.
NOTE 5 - NOTES RECEIVABLE
At September 30, 1997 and December 31, 1996, notes receivable consisted of
the following (amounts in thousands):
1997 1996
-------- --------
$2.0 million note receivable with monthly principal and interest
payments at 9.0%, maturing on 6/10/2003 (a)..................... $ --- $ 1,596
$1.2 million purchase money notes with monthly principal and
interest payments at 8.0%, maturing on 7/31/2001................ 1,150 1,160
$10.0 million leasehold mortgage loan with interest accruing at a
stated rate of 12.5% with a pay rate of 8.75%, maturing on
9/1/2013 (b).................................................... --- 11,071
$1.9 million note receivable with monthly interest payments at
prime plus 1.6%, maturing on 4/15/2000.......................... 1,668 1,600
-------- --------
Total notes receivable............................................. $ 2,818 $ 15,427
======== ========
(a) On August 1, 1997, the $2.0 million note receivable was repaid.
(b) On August 13, 1997, the $10.0 million leasehold mortgage loan was repaid
and the Company recognized a one-time gain of $315,000 representing the
collection of a $1.4 million prepayment penalty on the note, partially
offset by the write-off of the apportioned purchase price originally
allocated to the management contract for the property collateralizing the
note.
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MANUFACTURED HOME COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 - LONG-TERM BORROWINGS
At September 30, 1997 and December 31, 1996, long-term borrowings
consisted of the following (amounts in thousands):
1997 1996
-------- --------
$100.0 million mortgage note payable with monthly interest only
payments at LIBOR plus 1.05%, maturing on 3/3/98 (a)............... $100,000 $100,000
First mortgage loan with monthly principal and interest payments at
7.40%, maturing on 3/1/2004........................................ 8,502 8,658
Purchase money note with structured principal and interest payments
at an imputed rate of 7.38%, maturing on 7/11/2004................. 1,334 1,334
First mortgage loan with monthly principal and interest payments at a
rate of 7.48%, maturing on 8/1/2004................................ 24,290 24,628
$65.0 million first mortgage loan with monthly principal and interest
payments at 8.0%, maturing on 9/1/2001............................. 62,230 63,227
$2.4 million note payable with monthly interest payments at 9.05%,
maturing on 7/31/2006.............................................. 2,400 ---
First mortgage loan with monthly principal and interest payments at a
rate of 7.65% adjusted monthly, maturing on 11/10/2006............. 2,655 ---
First mortgage loan with monthly principal and interest payments at a
rate of 7.38% adjusted annually, maturing on 11/1/2016............. 3,405 ---
First mortgage loan with monthly principal and interest payments at a
rate of 7.25% adjusted annually, maturing on 11/1/2016............. 2,462 ---
First mortgage loan with monthly principal and interest payments at a
rate of 7.25%, maturing on 6/1/2017................................ 1,592 ---
First mortgage loan with monthly principal and interest payments at a
rate of 11.50%, maturing on 1/1/2001............................... 1,499 ---
First mortgage loan with monthly principal and interest payments at a
rate of 11.25%, maturing on 5/1/2001............................... 964 ---
-------- --------
Total collateralized borrowings..................................... 211,333 197,847
$100.0 million line of credit at LIBOR plus 1.125% (b).............. 55,500 43,000
$60.0 million term loan at LIBOR plus 1.00% (c)..................... 60,000 ---
Other notes payable (d)............................................. 6,625 ---
-------- --------
Total long-term borrowings.......................................... $333,458 $240,847
======== ========
(a) In October 1996, the Company entered into an interest rate swap agreement
fixing the London Interbank Offered Rate ("LIBOR") on the $100.0 million
mortgage debt (the "Mortgage Debt") at 5.57% effective January 10, 1997 through
March 3, 1998. The value of this agreement is impacted by changes in the
market rate of interest. Had the agreement been entered into on September 30,
1997, the applicable LIBOR swap rate would have been 5.83%. Each 0.01%
increase or decrease in the applicable swap rate for this agreement increases
or decreases the value of the agreement entered into by the Company versus its
current value by approximately $2,600.
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MANUFACTURED HOME COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 - LONG-TERM BORROWINGS (CONTINUED)
In July 1995, the Company entered into an interest rate swap agreement
(the "Swap") beginning at the maturity of the Mortgage Debt fixing LIBOR on the
refinancing of the Mortgage Debt at 6.4% for the period 1998 through 2003. The
cost of the Swap consisted only of legal costs which were deemed immaterial.
In the event that the Company does not refinance the Mortgage Debt, the risk
associated with the Swap is that the Company would be obligated to perform its
obligations under the terms of the Swap or would have to pay to terminate the
Swap. In either event, the impact of such transaction would be reflected in
the Company's statement of operations. The value of the Swap is impacted by
changes in the market rate of interest. Had the Swap been entered into on
September 30, 1997, the applicable LIBOR swap rate would have been 6.46%. Each
0.01% increase or decrease in the applicable swap rate for the Swap increases
or decreases the value of the Swap entered into by the Company versus its
current value by approximately $9,700.
(b) On March 1, 1997, the Company amended the credit agreement reducing the
interest rate from LIBOR plus 1.375% to LIBOR plus 1.125%. In addition, the
fee on the average unused amount was reduced to 0.125% of such amount from
0.15%. The Company did not pay any fees in connection with this amendment.
(c) On April 3, 1997, the Company entered into a $60.0 million term loan (the
"Loan") with a group of banks with interest only payable monthly at a rate of
LIBOR plus 1.0%. On June 2, 1997, the Company elected to set the LIBOR rate on
the Loan at 6.05% through January 2, 1998. The Loan matures on April 3, 2000
and may be extended to April 3, 2002. In connection with the Loan, the
outstanding balance under the $100.0 million line of credit was reduced by
$60.0 million.
(d) In connection with the acquisition of the MPW Properties, the Company
issued approximately $6.6 million of installment notes payable secured by a
letter of credit with interest rates of 7.5%, maturing September 1, 2002.
Approximately $5.3 million of the notes pay principal annually and interest
quarterly and the remaining $1.3 million of the notes pay interest quarterly.
As of September 30, 1997, the carrying value of the property collateralizing
the long-term borrowings was approximately $375 million.
NOTE 7 - STOCK OPTIONS
Pursuant to the Amended and Restated 1992 Stock Option and Stock Award
Plan as discussed in Note 13 to the 1996 Form 10-K, certain officers,
directors, key employees and consultants have been offered the opportunity to
acquire shares of common stock of the Company through stock options
("Options"). During the nine months ended September 30, 1997, Options for
77,855 shares of common stock were exercised.
NOTE 8 - EMPLOYEE STOCK PURCHASE PLAN
The Company adopted, effective July 1, 1997, the 1997 Non Qualified
Employee Stock Purchase Plan ("ESPP"). Pursuant to the Employee Stock Purchase
Plan, certain employees and directors of the Company may each annually acquire
up to $100,000 of common stock of the Company. The aggregate number of shares
of common stock available under the Employee Stock Purchase Plan shall not
exceed 1,000,000, subject to adjustment by the Board of Directors. The common
stock may be purchased quarterly at a price equal to 85% of the lesser of: (a)
the closing price for a share on the last day of such quarter; and (b) the
greater of: (i) the closing price for a share on the first day of such quarter,
and (ii) the average closing price for a share for all the business days in the
quarter. As of September 30, 1997, 18,213 shares have been issued through the
ESPP.
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MANUFACTURED HOME COMMUNITIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9 - COMMITMENTS AND CONTINGENCIES
The litigation filed on September 17, 1996 by Chateau Properties, Inc.
("Chateau") against the Company and Operating Partnership and various
counterclaims filed by the Company (see discussion in Note 14 of the 1996 Form
10-K) were dismissed on May 5, 1997.
The Company is involved in a variety of other legal proceedings arising in
the ordinary course of business. All such proceedings, taken together, are not
expected to have a material adverse impact on the financial condition or
results of operations of the Company.
NOTE 10 - PROPOSED MERGER
During 1996, the Company offered a merger proposal to Chateau in
opposition to Chateau's proposed merger with ROC Communities, Inc. ("ROC") and
incurred approximately $1.3 million in related costs and invested in certain
related saleable assets with a book value of approximately $9.9 million. These
expenditures were included in prepaid expenses and other assets as of December
31, 1996. On February 11, 1997, Chateau's shareholders approved Chateau's
merger with ROC. Thus, in the first quarter of 1997, the Company sold the
related assets it had acquired for approximately $11.1 million and incurred a
net write-off of approximately $57,000.
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MANUFACTURED HOME COMMUNITIES, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
The following is a discussion of the interim results of operations,
financial condition and liquidity and capital resources of the Company for the
nine months and quarter ended September 30, 1997 compared to the corresponding
periods in 1996. It should be read in conjunction with the Consolidated
Financial Statements and Notes thereto included herein and the 1996 Form 10-K.
RESULTS OF OPERATIONS
COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 1997 TO THREE MONTHS ENDED
SEPTEMBER 30, 1996
Since September 30, 1996, the gross investment in rental property has
increased from $598 million to $761 million as of September 30, 1997 due to the
acquisition of: (i) Casa del Sol Resort No. 1 and Casa del Sol Resort No. 2
(collectively, the "Casa del Sol Resorts") on October 23, 1996; (ii) California
Hawaiian on March 14, 1997; (iii) Golf Vista on March 27, 1997; (iv) Golden
Terrace South on May 30, 1997; (v) the MPW Properties on August 29, 1997, and
(vi) Arrowhead Village on September 16,1997. The total number of sites has
increased from 26,864 as of September 30, 1996 to 31,993 as of September 30,
1997.
The following table summarizes certain weighted average occupancy
statistics for the quarters ended September 30, 1997 and 1996. "Core
Portfolio" represents an analysis of properties owned during both periods of
comparison.
Core Portfolio Total Portfolio
--------------- ----------------
1997 1996 1997 1996
------- ------ ------ ------
Total sites 25,655 25,552 29,450 26,868
Occupied sites 24,322 24,113 27,891 25,252
Occupancy % 94.8% 94.4% 94.7% 94.0%
Monthly base rent per site $ 325 $ 312 $ 328 $ 309
Base rental income ($27.5 million) increased $4.0 million or 17.2%. For
the Core Portfolio, base rental income increased approximately $1.2 million or
5.1%, reflecting a 4.2% increase in base rental rates and a 0.9% increase
related to occupancy. The remaining $2.8 million increase in base rental
income was attributed to Waterford, acquired on February 28, 1996, Candlelight
Village, acquired on May 9, 1996, the Casa del Sol Resorts, California
Hawaiian, Golf Vista, Golden Terrace South, the MPW Properties and Arrowhead
Village (collectively, the "Acquisition Properties").
Monthly base rent per site for the total portfolio increased 6.1%,
reflecting a 4.2% increase in monthly base rent per site for the Core Portfolio
and higher monthly base rents for the Acquisition Properties. Average monthly
base rent per site for the Acquisition Properties was $347 for the third
quarter of 1997.
Weighted average occupancy increased 0.7% due to increased occupancy at
the expansion communities and the addition of the Acquisition Properties to the
portfolio with higher occupancy percentages.
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MANUFACTURED HOME COMMUNITIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS (CONTINUED)
Utility and other income ($3.0 million) increased $902,000 or 43.7%,
primarily due to an increase of $559,000 attributed to the Acquisition
Properties and an increase in utility income, real estate tax pass-ons and
other miscellaneous income at the Core Portfolio.
Interest income ($424,000) decreased $187,000 or 30.6%, primarily due to
the repayment of $13 million of notes receivable in August 1997, partially
offset by an increase in interest earned on short-term investments. Short-term
investments had average balances for the quarters ended September 30, 1997 and
1996 of approximately $3.8 million and $3.5 million, respectively, which earned
interest income at an effective rate of 5.3% and 5.6% per annum, respectively.
As of September 30, 1997, the Company had cash and cash equivalents and short-
term investments of $3.2 million.
Property operating and maintenance expenses ($8.2 million) increased $1.2
million or 17.7%. Approximately $1.0 million of the increase was attributed to
the Acquisition Properties. The remaining 2.9% increase was due to increases
in property general and administrative expense of $134,000, property payroll of
$64,000, utility expense of $37,000 and insurance and other expenses of $15,000
partially offset by decreased repairs and maintenance expense of $56,000.
Property operating and maintenance expenses represented 26.5% of total revenues
in 1997 and 1996.
Real estate taxes ($2.1 million) increased $20,000 or 1.0% due to
additional real estate taxes at the Acquisition Properties, partially offset by
lower than expected assessed values at certain of the properties based on
actual bills received. Real estate taxes represented 6.6% of total revenues in
1997 and 7.7% in 1996.
Property management expenses ($1.2 million) increased $190,000 or 18.1%.
The increase was primarily due to an increase in management company payroll in
connection with acquisitions and the timing of certain expenses. Property
management expenses represented 4.0% of total revenues in 1997 and 1996.
General and administrative expense ("G&A") ($1.0 million) increased
$26,000 or 2.6%. The increase was primarily due to increased payroll resulting
from salary increases. G&A represented 3.3% of total revenues in 1997 and 3.8%
in 1996.
Interest and related amortization ($5.6 million) increased $1.1 million or
25.5%. The increase was due to higher weighted average outstanding debt
balances during the period. The weighted average outstanding debt balances for
the quarters ended September 30, 1997 and 1996 were $290.2 million and $235.1
million, respectively. The effective interest rates were 7.3% and 7.1%,
respectively. Interest and related amortization represented 17.8% of total
revenues in 1997 and 16.8% in 1996.
In July 1995, the Company entered into an interest rate swap agreement
(the "Swap") beginning at the maturity of the Mortgage Debt fixing LIBOR on the
refinancing of the Mortgage Debt at 6.4% for the period 1998 through 2003. The
cost of the Swap consisted only of legal costs which were deemed immaterial.
In the event that the Company does not refinance the Mortgage Debt, the risk
associated with the Swap is that the Company would be obligated to perform its
obligations under the terms of the Swap or would have to pay to terminate the
Swap. In either event, the impact of such transaction would be reflected in
the Company's statement of operations. The value of the Swap is impacted by
changes in the market rate of interest. Had the Swap been entered into on
September 30, 1997, the applicable LIBOR swap rate would have been 6.46%. Each
0.01% increase or decrease in the applicable swap rate for the Swap increases
or decreases the value of the Swap entered into by the Company versus its
current value by approximately $9,700.
13
14
MANUFACTURED HOME COMMUNITIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS (CONTINUED)
In October 1996, the Company entered into an interest rate swap agreement
fixing LIBOR on the Mortgage Debt at 5.57% effective January 10, 1997 through
March 3, 1998. The value of this agreement is impacted by changes in the
market rate of interest. Had the agreement been entered into on September 30,
1997, the applicable LIBOR swap rate would have been 5.83%. Each 0.01%
increase or decrease in the applicable swap rate for this agreement increases
or decreases the value of the agreement entered into by the Company versus its
current value by approximately $2,600.
On March 1, 1997, the Company amended the credit agreement for its $100.0
million line of credit reducing the interest rate from LIBOR plus 1.375% to
LIBOR plus 1.125%. In addition, the fee on the average unused amount was
reduced to 0.125% of such amount from 0.15%. The Company did not pay any fees
in connection with this amendment.
On April 3, 1997, the Company entered into a $60.0 million term loan (the
"Loan") with a group of banks with interest only payable monthly at a rate of
LIBOR plus 1.0%. On June 2, 1997, the Company elected to set the LIBOR rate on
the Loan at 6.05% through January 2, 1998. The Loan matures on April 3, 2000
and may be extended to April 3, 2002. In connection with the Loan, the
outstanding balance under the $100.0 million line of credit was reduced by
$60.0 million.
Depreciation on corporate assets ($148,000) increased $26,000 or 21.3% due
to fixed asset additions in 1996 associated with the Company's conversion to a
new accounting software system. Depreciation on corporate assets represented
0.5% of total revenues in 1997 and 1996.
Depreciation on real estate assets and other costs ($4.1 million)
increased $476,000 or 13.1% as a result of the Acquisition Properties.
Partially offsetting the increase was a one-time gain of $315,000 representing
the collection of a $1.4 million prepayment penalty on a $10.0 million
leasehold mortgage loan receivable which was repaid in August 1997, partially
offset by the write-off of the apportioned purchase price originally allocated
to the management contract for the property collateralizing the note.
Depreciation on real estate assets and other costs represented 14.2% of total
revenues in 1997 and 13.7% in 1996.
COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1997 TO NINE MONTHS ENDED
SEPTEMBER 30, 1996
The addition of the Acquisition Properties to the Company's portfolio
increased base rental income, property operating and maintenance expenses, real
estate taxes and deprecation for the nine months ended September 30, 1997
compared to the nine months ended September 30, 1996.
The following table summarizes certain weighted average occupancy
statistics for the nine months ended September 30, 1997 and 1996. "Core
Portfolio" represents an analysis of properties owned during both periods of
comparison.
Core Portfolio Total Portfolio
---------------- -----------------
1997 1996 1997 1996
------- ------- ------- -------
Total sites 25,624 25,555 28,334 26,432
Occupied sites 24,306 24,059 26,822 24,804
Occupancy % 94.9% 94.1% 94.7% 93.8%
Monthly base rent per site $ 324 $ 311 $ 325 $ 309
14
15
MANUFACTURED HOME COMMUNITIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS (CONTINUED)
Base rental income ($78.4 million) increased $9.4 million or 13.5%. For
the Core Portfolio, base rental income increased approximately $3.6 million or
5.4%, reflecting a 4.4% increase in base rental rates and a 1.0% increase
related to occupancy. The remaining $5.8 million increase in base rental
income was attributed to the Acquisition Properties.
Monthly base rent per site for the total portfolio increased 5.2%,
reflecting a 4.3% increase in monthly base rent per site for the Core Portfolio
and higher monthly base rents for the Acquisition Properties. Average monthly
base rent per site for the Acquisition Properties was $330 for the nine months
ended September 30, 1997.
Weighted average occupancy increased 0.9% due to increased occupancy at
the expansion communities and the addition of the Acquisition Properties to the
portfolio with higher occupancy percentages.
Utility and other income ($8.4 million) increased $1.8 million or 28.0%,
primarily due to an increase of $845,000 attributed to the Acquisition
Properties, the collection of dividend income of $173,000 in the first quarter
of 1997, and increased utility income, real estate tax pass-ons and other
miscellaneous income at the Core Portfolio.
Interest income ($1.7 million) decreased $132,000 or 7.3%, primarily due
to the repayment of $13 million of notes receivable in August 1997, partially
offset by an increase in interest earned on short-term investments. Short-term
investments had average balances for the nine months ended September 30, 1997
and 1996 of approximately $4.0 million and $3.4 million, respectively, which
earned interest income at an effective rate of 5.3% per annum in both years.
Property operating and maintenance expenses ($23.5 million) increased $2.5
million or 12.0%. Approximately $1.9 million of the increase was attributed to
the Acquisition Properties. The remaining 3.1% increase was due to increases
in property general and administrative of $251,000, property payroll of
$204,000, utilities of $182,000, and repairs and maintenance expense of $73,000
partially offset by decreased insurance and other expenses of $56,000.
Property operating and maintenance expenses represented 26.4% of total revenues
in 1997 and 26.9% in 1996.
Real estate taxes ($6.0 million) decreased $82,000 or 1.4% due to lower
than expected assessed values at certain of the properties based on actual
bills received, partially offset by additional real estate taxes at the
Acquisition Properties. Real estate taxes represented 6.7% of total revenues
in 1997 and 7.8% in 1996.
Property management expenses ($3.6 million) increased $377,000 or 11.5%.
The increase was primarily due to an increase in management company payroll and
timing of certain expenses. Property management expenses represented 4.1% of
total revenues in 1997 and 4.2% in 1996.
G&A ($3.2 million) increased $286,000 or 9.7%. The increase was primarily
due to increased payroll resulting from salary increases. G&A represented 3.6%
of total revenues in 1997 and 3.8% in 1996.
Interest and related amortization ($15.6 million) increased $2.5 million
or 19.2%. The increase was due to higher weighted average outstanding debt
balances during the period. The weighted average outstanding debt balances for
the nine months ended September 30, 1997 and 1996 were $272.0 million and
$228.4 million, respectively. The effective interest rate was 7.2% for both
periods. Interest and related amortization represented 17.5% of total revenues
in 1997 and 16.8% in 1996.
15
16
MANUFACTURED HOME COMMUNITIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS (CONTINUED)
Depreciation on corporate assets ($437,000) increased $95,000 or 27.8% due
to fixed asset additions in 1996 associated with the Company's conversion to a
new accounting software system. Depreciation on corporate assets represented
0.5% of total revenues in 1997 and 0.4% in 1996.
Depreciation on real estate assets and other costs ($12.1 million)
increased $1.2 million or 10.8% as a result of the Acquisition Properties. In
addition, in the first quarter of 1997, the Company incurred a $57,000
write-off of costs associated with the Company's opposition in 1996 to
Chateau's proposed merger with ROC; and, in the third quarter of 1997, the
Company recorded a one-time gain of $315,000 as discussed in three month
comparison above. Depreciation on real estate assets and other costs
represented 13.6% of total revenues in 1997 and 14.0% in 1996.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents increased by approximately $89,000 when compared
to December 31, 1996. The major components of this increase were increased
cash provided by operating activities, increased net proceeds from the line of
credit, the collection of principal on notes receivable and net proceeds from
the sale of project related assets. This increase was partially offset by the
acquisition of properties in 1997, the Company's investment in partnerships and
payment of distributions.
Net cash provided by operating activities increased $3.1 million from
$41.7 million for the nine months ended September 30, 1996 to $44.8 million for
the nine months ended September 30, 1997. This increase reflected a $5.4
million increase in funds from operations ("FFO"), as discussed below, an
increase in prepaid expenses and other assets, and an increase in collection of
rents received in advance and security deposits related to the property
acquisitions, partiallly offset by decreased accounts payable accruals.
FFO was defined by the National Association of Real Estate Investment
Trusts ("NAREIT") in March 1995 as net income (computed in accordance with
generally accepted accounting principles ["GAAP"]), before allocation to
minority interests, excluding gains (or losses) from sales of property, plus
real estate depreciation and after adjustments for significant non-recurring
items, if any. The Company computes FFO in accordance with the NAREIT
definition which may differ from the methodology for calculating FFO utilized
by other equity REITs and, accordingly, may not be comparable to such other
REITs. Funds available for distribution ("FAD") is defined as FFO less
non-revenue producing capital expenditures and amortization payments on
mortgage loan principal. The Company believes that FFO and FAD are useful to
investors as a measure of the performance of an equity REIT because, along with
cash flows from operating activities, financing activities and investing
activities, they provide investors an understanding of the ability of the
Company to incur and service debt and to make capital expenditures. FFO and
FAD in and of themselves do not represent cash generated from operating
activities in accordance with GAAP and therefore should not be considered an
alternative to net income as an indication of the Company's performance or to
net cash flows from operating activities as determined by GAAP as a measure of
liquidity and are not necessarily indicative of cash available to fund cash
needs.
16
17
MANUFACTURED HOME COMMUNITIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
The following table presents a calculation of FFO and FAD for the quarters
and nine months ended September 30, 1997 and 1996:
For the Quarters Ended For the Nine Months Ended
September 30, September 30,
----------------------- -------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
Computation of funds from operations:
Income before allocation to
minority interests...........................$ 8,783 $ 7,145 $ 24,545 $ 20,368
Depreciation on real estate assets and
other costs (a).......................... 4,102 3,626 12,136 10,949
---------- ---------- ---------- ----------
Funds from operations..........................$ 12,885 $ 10,771 $ 36,681 $ 31,317
========== ========== ========== ==========
Computation of funds available for distribution:
Funds from operations..........................$ 12,885 $ 10,771 $ 36,681 $ 31,317
Non-revenue producing improvements -
rental properties........................ (1,503) (1,294) (2,469) (2,755)
---------- ---------- ---------- ----------
Funds available for distribution...............$ 11,382 $ 9,477 $ 34,212 $ 28,562
========== ========== ========== ==========
(a) Depreciation on real estate assets and other costs includes a
one-time gain of $315,000 related to the repayment of approximately $13
million of notes receivable in the third quarter of 1997. Also, included
for the nine months ended September 30, 1997, is a net write-off of
approximately $57,000 for project related costs recognized in the first
quarter of 1997.
Net cash used in investing activities increased $46.3 million from $44.7
million for the nine months ended September 30, 1996 to $91.0 million for the
nine months ended September 30, 1997 primarily due to increased payments for
acquisitions in 1997 and the Company's investment in partnerships, partially
offset by the collection of principal payments on notes receivable, net
proceeds from the sale of project related assets and a decreased purchases of
short-term investments.
During 1996, the Company offered a merger proposal to Chateau in
opposition to Chateau's proposed merger with ROC and incurred approximately
$1.3 million in project related costs and invested in certain project related
saleable assets with a book value of approximately $9.9 million. These
expenditures were included in prepaid expenses and other assets at December 31,
1996. On February 11, 1997, Chateau's shareholders approved Chateau's merger
with ROC. Thus, in the first quarter of 1997, the Company sold the related
assets it had acquired for approximately $11.1 million and incurred a net
write-off of approximately $57,000.
In the third quarter of 1997, notes receivable of approximately $13
million were repaid. In connection with the repayments, the Company recognized
a one-time gain of $315,000 representing the collection of a $1.4 million
prepayment penalty, partially offset by the write-off of the apportioned
purchase price originally allocated to the management contract for the property
collateralizing the note.
17
18
MANUFACTURED HOME COMMUNITIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
On March 14, 1997, the Company acquired California Hawaiian, located in
San Jose, California, for a purchase price of approximately $23.3 million. The
acquisition was funded with a borrowing under the Company's line of credit.
On March 27, 1997, the Company acquired Golf Vista, located in Monee,
Illinois. The purchase price of approximately $7.4 million, including deferred
payments of $150,000 per year for the next five years, was funded with existing
available cash.
On May 30, 1997, the Company entered into a capital lease with East Tincup
Village, Inc., a Colorado corporation, for Golden Terrace South (formerly known
as East Tincup Village). The lease term is 110 months commencing on May 29,
1997 with monthly rental payments of approximately $18,000. The lease contains
an option for the Company to purchase Golden Terrace South at the termination
of the lease for $2.4 million. For financial accounting purposes, the Company
accounts for the lease as a direct financing lease; and, accordingly, the
Company has recorded an investment in real estate and a note payable.
On August 29, 1997, the Company acquired the MPW Properties from limited
partnerships and joint ventures affiliated with MPW. The aggregate purchase
price of the MPW Properties was approximately $100 million. Approximately $64
million of the purchase price was in the form of OP Units, approximately $6
million was in the form of installment notes payable, approximately $17 million
was in the form of cash funded from a borrowing under the Company's line of
credit, and the Company assumed debt of approximately $13 million. In
addition, the Company capitalized approximately $1.8 million of costs
associated with the acquisition of which approximately $1.0 million was paid
through September 30, 1997.
On September 16, 1997, the Company acquired Arrowhead Village, located in
Lantana, Florida for a purchase price of approximately $20.3 million. The
acquisition was funded with a borrowing under the Company's line of credit.
Capital expenditures for improvements were approximately $4.3 million for
the nine months ended September 30, 1997 compared to $5.4 million for the nine
months ended September 30, 1996. Of the $4.3 million, approximately $2.5
million represented improvements to existing sites. The Company anticipates
spending approximately $487,000 on improvements to existing sites during the
remainder of 1997. The Company believes these improvements are necessary in
order to increase and/or maintain occupancy levels and maximize rental rates
charged to new and renewing residents. The remaining $1.9 million represented
costs to develop expansion sites at certain of the Company's properties and
other corporate headquarter costs. The Company is currently developing an
additional 90 sites which should be available for occupancy in 1997.
Net cash provided by financing activities increased $41.6 million from
$4.6 for the nine months ended September 30, 1996 to $46.2 million for the nine
months ended September 30, 1997 due to increased borrowings on the line of
credit, partially offset by the purchase of 330,300 shares of the Company's
common stock under the common stock repurchase plan and increased distributions
to common stockholders.
18
19
MANUFACTURED HOME COMMUNITIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
Distributions to common stockholders and minority interests increased
approximately $1.9 million due to an increase in the distribution per share and
the issuance of 3,018,926 OP Units in connection with the acquisition of the
MPW Properties, partially offset by the decrease in common stock outstanding as
a result of the Company's purchase of 330,300 shares of common stock under the
common stock repurchase plan. On January 10, 1997, the Company paid a $.305
per share distribution for the quarter ended December 31, 1996 to stockholders
of record on December 27, 1996. The Company paid a $.33 per share distribution
on April 11, 1997, July 11, 1997 and October 10, 1997, for the quarters ended
March 31, 1997, June 30, 1997 and September 30, 1997, respectively, to
stockholders of record on March 28, 1997, June 27, 1997 and September 26, 1997,
respectively. Return of capital on a GAAP basis was $0.05, $0.04, and $0.02
per share for the quarters ended March 31, 1997, June 30, 1997 and September
30, 1997, respectively.
The Company expects to meet its short-term liquidity requirements,
including its distributions, generally through its working capital, net cash
provided by operating activities and availability under the existing line of
credit. The Company expects to meet certain long-term liquidity requirements
such as scheduled debt maturities, property acquisitions and capital
improvements by long-term collateralized and uncollateralized borrowings
including its existing line of credit and the issuance of debt securities or
additional equity securities in the Company, in addition to working capital.
Statement of Financial Accounting Standards No. 128 "Earnings Per Share"
("SFAS No. 128") is effective for years ending after December 15, 1997. The
Company will adopt SFAS No. 128 as of December 31, 1997 (earlier adoption is
not permitted). The Company expects the impact of the adoption of SFAS No. 128
to be immaterial. Had the Company adopted SFAS No. 128 in the third quarter of
1997, the impact would have been immaterial.
19
20
MANUFACTURED HOME COMMUNITIES, INC.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The discussion in Note 8 of Notes to Consolidated Financial
Statements is incorporated herein by reference.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
27 Financial Data Schedule
(b) Reports on Form 8-K:
Form 8-K dated August 29, 1997, filed September 12, 1997,
relating to Item 2 - "Acquisition of Assets" and Item 7
"Financial Statements and Exhibits" on the acquisition of the
MPW Properties.
Form 8-K dated September 15, 1997, filed September 16, 1997,
relating to Item 5 - "Other Events" on the offer to purchase
limited partnership interests in various partnerships.
Form 8-K/A dated August 29, 1997, filed November 4, 1997,
relating to Item 2 - "Acquisition of Assets" and Item 7
"Financial Statements and Exhibits" on the acquisition of the
MPW Properties.
20
21
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.
MANUFACTURED HOME COMMUNITIES, INC.
BY: /s/ Thomas P. Heneghan
----------------------
Thomas P. Heneghan
Executive Vice President, Treasurer and
Chief Financial Officer
BY: /s/ Judy A. Pultorak
---------------------
Judy A. Pultorak
Principal Accounting Officer
DATE: November 10, 1997
-----------------
21
5
9-MOS
DEC-31-1997
JAN-01-1997
SEP-30-1997
3,229
0
745
0
0
14,485
760,688
(84,095)
728,325
45,412
0
0
0
247
277,364
728,325
86,886
89,067
0
33,153
3,241
0
15,573
24,545
0
21,850
0
0
0
21,850
.88
.88
