<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly period ended June 30, 1995
-------------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _________________________ to
Commission file number 0-15698
-----------------------------------
WINDSOR PARK PROPERTIES 2, A CALIFORNIA LIMITED PARTNERSHIP
------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
California 33-0054332
- --------------------------------------------- --------------------------------
(State or other jurisdiction of incorporation (IRS Employer
or organization) Identification No.)
120 W. Grand Avenue, Suite 202, Escondido, California 92025
- --------------------------------------------------------------------------------
(Address of principal executive offices)
(619) 746-2411
- --------------------------------------------------------------------------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 ( )
--- ---
1
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TABLE OF CONTENTS
PART I
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Page
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Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II
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Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURE
2
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WINDSOR PARK PROPERTIES 2
-------------------------
(A California Limited Partnership)
BALANCE SHEET
-------------
(unaudited)
<TABLE>
<CAPTION>
June 30, 1995
-------------
<S> <C>
ASSETS
- ------
Property held for investment:
Land $ 376,000
Buildings and improvements 2,605,400
Fixtures and equipment 68,800
--------------
3,050,200
Less accumulated depreciation (2,161,700)
--------------
888,500
Cash and cash equivalents 563,300
Other assets 20,300
--------------
$ 1,472,100
==============
LIABILITIES AND PARTNERS' EQUITY
- --------------------------------
Liabilities:
Accounts payable $ 46,400
Accrued liabilities 25,800
Tenant deposits and other liabilities 11,500
--------------
83,700
--------------
Partners' equity:
Limited partners 1,802,000
General partners (413,600)
--------------
1,388,400
--------------
$ 1,472,100
==============
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
WINDSOR PARK PROPERTIES 2
-------------------------
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30,
----------------------------
1995 1994
------------- ------------
<S> <C> <C>
REVENUES
- --------
Rent and utilities $ 120,800 $ 118,100
Interest 6,900 74,000
Other 3,600 5,900
------------- ------------
131,300 198,000
------------- ------------
COSTS AND EXPENSES
- ------------------
Property operating costs 110,400 90,000
Depreciation and amortization 16,700 20,600
General and administrative:
Related parties 8,000 9,900
Other 11,800 8,100
Interest 1,000
------------- ------------
146,900 129,600
------------- ------------
Net (loss) income $ (15,600) $ 68,400
============= ============
Net (loss) income - general partners $ (100) $ 700
============= ============
Net (loss) income - limited partners $ (15,500) $ 67,700
============= ============
Net (loss) income per limited partnership unit $ (0.10) $ 0.44
============= ============
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
WINDSOR PARK PROPERTIES 2
-------------------------
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
--------------------------
1995 1994
----------- -----------
<S> <C> <C>
REVENUES
- --------
Rent and utilities $ 238,000 $ 231,800
Interest 15,300 147,100
Other 6,300 9,100
----------- -----------
259,600 388,000
----------- -----------
COSTS AND EXPENSES
- ------------------
Property operating costs 208,900 189,300
Depreciation and amortization 33,700 41,000
General and administrative:
Related parties 16,800 21,200
Other 21,800 26,300
Interest 2,800
----------- -----------
281,200 280,600
----------- -----------
Net (loss) income $ (21,600) $ 107,400
=========== ===========
Net (loss) income - general partners $ (200) $ 1,100
=========== ===========
Net (loss) income - limited partners $ (21,400) $ 106,300
=========== ===========
Net (loss) income per limited partnership unit $ (0.14) $ 0.70
=========== ===========
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
WINDSOR PARK PROPERTIES 2
-------------------------
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
------------------------
<TABLE>
<CAPTION>
Six Months Ended June 30,
------------------------------
1995 1994
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) income $ (21,600) $ 107,400
Adjustments to reconcile net (loss) income to net
cash provided by operating activities:
Depreciation and amortization 33,700 41,000
Amortization of loan fees - note receivable (24,000)
(Gain) loss on sale of property held for investment (1,400) 200
Changes in operating assets and liabilities:
Other assets 16,000 33,800
Accounts payable 23,700 14,000
Accrued liabilities 7,900 (2,300)
Tenant deposits and other liabilities (3,600) 600
------------- -------------
Net cash provided by operating activities 54,700 170,700
------------- -------------
Cash flows from investing activities:
Proceeds from collection of note receivable 2,855,500
Proceeds from sale of property held for investment 3,000
Increase in property held for investment (9,800) (12,000)
------------- -------------
Net cash (used in) provided by investing activities (6,800) 2,843,500
------------- -------------
Cash flows from financing activities:
Cash distributions (202,000) (254,200)
Repurchase of limited partnership units (400) (12,000)
Repayment of notes payable (14,300)
------------- -------------
Net cash used in financing activities (202,400) (280,500)
------------- -------------
Net (decrease) increase in cash and cash equivalents (154,500) 2,733,700
Cash and cash equivalents at beginning of period 717,800 241,200
------------- -------------
Cash and cash equivalents at end of period $ 563,300 $ 2,974,900
============= =============
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest (none capitalized) $ -- $ 2,800
============= =============
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
WINDSOR PARK PROPERTIES 2
-------------------------
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE 1. BASIS OF PRESENTATION
---------------------
The balance sheet at June 30, 1995 and the related statements of operations for
the three and six months ended June 30, 1995 and 1994 and the statements of cash
flows for the six months ended June 30, 1995 and 1994 are unaudited. However, in
the opinion of the General Partners, they contain all adjustments, of a normal
recurring nature, necessary for a fair presentation of such financial
statements. Interim results are not necessarily indicative of results for a
full year.
The financial statements and notes are presented as permitted by Form 10-QSB and
do not contain certain information included in the Partnership's annual
financial statements and notes. Certain 1994 amounts have been reclassified to
conform with the 1995 presentation.
NOTE 2. NET (LOSS) INCOME PER LIMITED PARTNERSHIP UNIT
----------------------------------------------
Net (loss) income per limited partnership unit is calculated based on the
weighted average number of limited partnership units outstanding during the
period and the net (loss) income allocated to the Limited Partners. The
weighted average number of limited partnership units outstanding during the
three and six months ended June 30, 1995 was 150,295 and 150,320, respectively;
and 150,576 and 150,760 for the three and six months ending June 30, 1994,
respectively.
NOTE 3. RELATED PARTY TRANSACTIONS
--------------------------
The General Partners of the Partnership are The Windsor Corporation, a
California corporation, and John A. Coseo, Jr. (Mr. Coseo is also the
president, chief executive officer and the principal stockholder of The Windsor
Corporation).
The General Partners and their affiliates are entitled to receive various fees
and compensation from the Partnership which are summarized as follows:
Operational Stage
- -----------------
The Partnership's investment properties were managed by Windsor Asset
Management, Inc. (WAMI), an affiliate of The Windsor Corporation, until November
1994. At that time, WAMI was merged into an independent property management
company. For management services, WAMI received 5 percent of gross property
receipts. During the three and six months ended June 30, 1994, WAMI received
fees of $6,000 and $12,000, respectively. WAMI received no fees during the
three and six months ended June 30, 1995.
The net profits and losses of the Partnership during the operational stage are
allocated 99 percent to the Limited Partners and 1 percent to the General
Partners. Cash distributions from operations are allocated 95 percent to the
Limited Partners and 5 percent to the General Partners.
The Partnership reimburses The Windsor Corporation and affiliates for certain
direct expenses, and employee, executive and administrative time, which are
incurred on the Partnership's behalf. The Partnership was charged $9,900 and
$11,600 for such costs during the three months ended June 30, 1995 and 1994,
respectively; and $20,500 and $24,700 during the six months ended June 30, 1995
and 1994, respectively.
7
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Liquidation Stage
- -----------------
During the Partnership's liquidation stage, the total compensation paid to all
persons for the sale of investment properties is limited to competitive real
estate commissions, not to exceed 6 percent of the contract price for the sale
of the property. The General Partners may receive up to one-half of the
competitive real estate commission, not to exceed 3 percent , if they provide a
substantial amount of services in the sales effort. The General Partners'
commission is subordinated to the Limited Partners receiving a 9 percent
cumulative, non-compounded, annual return on their original capital investments.
No commissions were paid to the General Partners during the three and six months
ended June 30, 1995 and 1994.
The General Partners also receive 1 percent of net income and cash distributions
from the sale of Partnership properties.
During both the three months ended June 30, 1995 and 1994 the General Partners
received cash distributions of $1,000; and $2,000 and $4,200 for the six months
ended June 30, 1995 and 1994, respectively.
NOTE 4. DISTRIBUTIONS TO LIMITED PARTNERS
---------------------------------
Distributions to limited partners in excess of net income allocated to limited
partners are considered a return of capital. A breakdown of cash distributions
to limited partners for the six months ended June 30, 1995 and 1994 follows:
<TABLE>
<CAPTION>
1995 1994
---------------------- ----------------------
Per Per
Amount Unit Amount Unit
----------- ------- ----------- -------
<S> <C> <C> <C> <C>
Net income
- limited partners $ $ $ 106,300 $ 0.70
Return of capital 200,000 1.33 143,700 0.96
---------- ------- ---------- -------
$ 200,000 $ 1.33 $ 250,000 $ 1.66
========== ======= ========== =======
</TABLE>
8
<PAGE>
WINDSOR PARK PROPERTIES 2
-------------------------
(A California Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
Changes in Financial Condition
- ------------------------------
June 30, 1995 as compared to December 31, 1994
- ----------------------------------------------
The Partnership's primary source of cash during the six months ended June 30,
1995 was from the operations of its investment properties. The primary use of
cash during the same period was for cash distributions to partners.
The Partnership's cash balance decreased from $717,800 at December 31, 1994 to
$563,300 at June 30, 1995 due mainly to cash distributions to partners exceeding
cash generated from operations.
The General Partners are considering the best course of action for the
Partnership. The alternatives are either to sell the two remaining properties
and wind-up the affairs of the Partnership, or to continue to operate the two
remaining properties with a view to increasing their value over the next few
years. The General Partners continue to monitor the Oklahoma City and
Shreveport markets for indications of improvement.
In the event that the General Partners decide to continue to operate the
properties, cash distributions may be reduced or suspended in order to maintain
cash reserves for marketing programs, capital improvements and any other
strategic plans considered appropriate.
The future sources of cash for the Partnership will be provided from property
operations, cash reserves and ultimately from the sale of property. The future
uses of cash will be for Partnership administration, capital expenditures and
possibly distributions to partners. The General Partners believe that the
future sources of cash are sufficient to meet the working capital requirements
of the Partnership for the foreseeable future.
Results of Operations
- ---------------------
Three months ended June 30, 1995 as compared to three months ended June 30, 1994
- --------------------------------------------------------------------------------
The Partnership incurred a net loss of $15,600 ($0.10 per limited partnership
unit) for the three months ended June 30, 1995 and realized net income of
$68,400 ($0.44 per limited partnership unit) for the three months ended June 30,
1994.
Rent and utilities revenues increased slightly from $118,100 in 1994 to $120,800
in 1995. The overall occupancy of the Partnership's two remaining properties
increased from approximately 54% at June 30, 1994 to 58% at June 30, 1995.
Interest income decreased from $74,000 in 1994 to $6,900 in 1995 due mainly to
the June 1994 repayment of a note receivable taken back by the Partnership from
the sale of Palm Bay Estates in 1992.
Depreciation and amortization expense decreased from $20,600 in 1994 to $16,700
in 1995. The decrease is due mainly to a $1,075,000 provision for estimated
losses in value of the Pinecrest and Edgewood manufactured home communities
recorded in September 1994. A portion of the provision
9
<PAGE>
was allocated to the depreciable bases of the properties, thereby reducing
future depreciation expense.
Six months ended June 30, 1995 as compared to the six months ended June 30, 1994
- --------------------------------------------------------------------------------
The Partnership incurred a net loss of $21,600 ($0.14 per limited partnership
unit) for the six months ended June 30, 1995 and realized net income of $107,400
($0.70 per limited partnership unit) for the six months ended June 30, 1994.
Rent and utilities revenues increased slightly from $231,800 in 1994 to $238,000
in 1995 due to a slight improvement in occupancy at the two Partnership
properties.
Interest income decreased from $147,100 in 1994 to $15,300 in 1995 due to the
June 1994 repayment of a note receivable taken back by the Partnership from the
sale of Palm Bay Estates in 1992.
Property operating expenses increased from $189,300 in 1994 to $208,900 in 1995
due mainly to higher wages and utilities costs.
Depreciation and amortization expense decreased from $41,000 in 1994 to $33,700
in 1995 for the reason discussed previously.
General and administrative expense decreased from $47,500 in 1994 to $38,600 in
1995 due mainly to a $6,300 state asset tax incurred in 1994 in connection with
the note receivable taken back on the sale of Palm Bay.
10
<PAGE>
PART II
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Item 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits and Index of Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the period covered
by this Form 10-QSB.
11
<PAGE>
SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
WINDSOR PARK PROPERTIES 2,
A California Limited Partnership
---------------------------------
(Registrant)
By: The Windsor Corporation, General Partner
By /s/John A. Coseo, Jr.
-----------------------------------------------
JOHN A. COSEO, JR.
Chief Financial Officer
(Principal Accounting Officer)
Date: August 10, 1995
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET OF WINDSOR PARK PROPERTIES 2 AT JUNE 30, 1995 AND THE RELATED STATEMENTS
OF OPERATIONS AND OF CASH FLOWS FOR THE SIX MONTHS THEN ENDED AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 563,300
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 3,050,200
<DEPRECIATION> 2,161,700
<TOTAL-ASSETS> 1,472,100
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 1,388,400<F1>
<TOTAL-LIABILITY-AND-EQUITY> 1,472,100
<SALES> 0
<TOTAL-REVENUES> 259,600
<CGS> 0
<TOTAL-COSTS> 208,900
<OTHER-EXPENSES> 72,300
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (21,600)
<INCOME-TAX> 0
<INCOME-CONTINUING> (21,600)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (21,600)
<EPS-PRIMARY> (0.14)<F2>
<EPS-DILUTED> 0
<FN>
<F1>Limited and general partners equity.
<F2>Net loss per limited partnership unit.
</FN>
</TABLE>
