<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, 1996
--------------------------
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
------------- --------
Commission file number 0-15700
---------------------------------
WINDSOR PARK PROPERTIES 4, A CALIFORNIA LIMITED PARTNERSHIP
------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
California 33-0202608
- -------------------------------- --------------------------------
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
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 ( )
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1
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TABLE OF CONTENTS
PART I
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<TABLE>
<CAPTION>
Page
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<S> <C>
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II
-------
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURE
</TABLE>
2
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WINDSOR PARK PROPERTIES 4
-------------------------
(A California Limited Partnership)
BALANCE SHEET
-------------
(unaudited)
<TABLE>
<CAPTION>
June 30, 1996
------------------
<S> <C>
ASSETS
- ------
Property held for investment:
Land $ 1,037,700
Buildings and improvements 5,413,100
Fixtures and equipment 71,700
------------------
6,522,500
Less accumulated depreciation (3,031,300)
------------------
3,491,200
Investments in joint ventures 3,122,800
Cash and cash equivalents 863,100
Deferred financing costs 81,900
Other assets 94,700
-----------------
$ 7,653,700
=================
LIABILITIES AND PARTNERS' EQUITY
- --------------------------------
Liabilities:
Mortgage note payable $ 1,400,000
Accounts payable 19,600
Accrued expenses 64,500
Tenant deposits and other liabilities 23,200
-----------------
1,507,300
-----------------
Partners' equity:
Limited partners 6,263,200
General partners (116,800)
-----------------
6,146,400
-----------------
$ 7,653,700
=================
</TABLE>
See accompanying notes to financial statements.
3
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WINDSOR PARK PROPERTIES 4
-------------------------
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30,
----------------------------
1996 1995
------------ -----------
<S> <C> <C>
REVENUES
- --------
Rent and utilities $ 278,700 $ 271,900
Equity in earnings of joint ventures 34,900 19,700
Interest 9,300 3,800
Other 10,500 5,900
------------ -----------
333,400 301,300
------------ -----------
COSTS AND EXPENSES
- ------------------
Property operating 172,700 191,200
Depreciation and amortization 57,400 73,700
Interest 35,500
General and administrative:
Related parties 16,600 16,000
Other 11,700 12,100
------------ -----------
293,900 293,000
------------ -----------
Net income $ 39,500 $ 8,300
============ ===========
Net income - general partners $ 400 $ 100
============ ===========
Net income - limited partners $ 39,100 $ 8,200
============ ===========
Net income per limited partnership unit $ 0.19 $ 0.04
============ ===========
</TABLE>
See accompanying notes to financial statements.
4
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WINDSOR PARK PROPERTIES 4
-------------------------
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
-----------------------------
1996 1995
------------ -----------
<S> <C> <C>
REVENUES
- --------
Rent and utilities $ 550,300 $ 530,200
Equity in earnings of joint ventures 70,900 38,600
Interest 19,300 8,100
Other 30,400 29,100
------------ -----------
670,900 606,000
------------ -----------
COSTS AND EXPENSES
- ------------------
Property operating 359,700 358,100
Depreciation and amortization 114,600 146,900
Interest 68,100
General and administrative:
Related parties 33,800 34,900
Other 21,500 29,600
------------ -----------
597,700 569,500
------------ -----------
Net income $ 73,200 $ 36,500
============ ===========
Net income - general partners $ 700 $ 400
============ ===========
Net income - limited partners $ 72,500 $ 36,100
============ ===========
Net income per limited partnership unit $ 0.36 $ 0.18
============ ===========
</TABLE>
See accompanying notes to financial statements.
5
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WINDSOR PARK PROPERTIES 4
-------------------------
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
------------------------
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------------
1996 1995
-------------- -------------
Cash flows from operating activities:
<S> <C> <C>
Net income $ 73,200 $ 36,500
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 114,600 146,900
Equity in earnings of joint ventures (70,900) (38,600)
Joint ventures' cash distributions 70,900 38,600
Loss (gain) on sale of property held for investment 5,100 (13,800)
Amortization of deferred financing costs 6,400
Changes in operating assets and liabilities:
Other assets (13,800) 28,000
Accounts payable (18,100) (10,600)
Accrued expenses 29,900 43,800
Tenant deposits and other liabilities (5,100) 3,500
-------------- -------------
Net cash provided by operating activities 192,200 234,300
-------------- -------------
Cash flows from investing activities:
Joint ventures' cash distributions 83,300 73,600
Increase in property held for investment (56,900) (55,600)
Proceeds from sale of property held for investment 12,000 36,700
-------------- -------------
Net cash provided by investing activities 38,400 54,700
-------------- -------------
Cash flows from financing activities:
Cash distributions (226,300) (226,300)
Repurchase of limited partnership units (26,700) (14,200)
-------------- -------------
Net cash used in financing activities (253,000) (240,500)
-------------- -------------
Net (decrease) increase in cash and cash equivalents (22,400) 48,500
Cash and cash equivalents at beginning of period 885,500 303,200
-------------- -------------
Cash and cash equivalents at end of period $ 863,100 $ 351,700
============== =============
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest (none capitalized) $ 61,600 $ --
=============== =============
</TABLE>
See accompanying notes to financial statements.
6
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WINDSOR PARK PROPERTIES 4
-------------------------
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE 1. BASIS OF PRESENTATION
---------------------
The balance sheet at June 30, 1996 and the related statements of operations for
the three and six months ended June 30, 1996 and 1995 and the statements of cash
flows for the six months ended June 30, 1996 and 1995 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 1995 amounts have been reclassified to
conform with the 1996 presentation.
NOTE 2. INVESTMENTS IN JOINT VENTURES
-----------------------------
The Partnership's investments in joint ventures consist of interests in four
manufactured home communities in 1996 and two manufactured home communities in
1995. The combined condensed results of operations of these properties for the
six months ended June 30, 1996 and 1995 follows:
<TABLE>
<CAPTION>
1996 1995
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<S> <C> <C>
Total revenues $ 1,323,700 $ 441,700
--------------- -----------
Expenses:
Property operating 601,600 251,600
Interest 301,800 6,500
Depreciation 253,900 130,600
--------------- -----------
1,157,300 388,700
--------------- -----------
Net income $ 166,400 $ 53,000
=============== ===========
</TABLE>
NOTE 3. NET INCOME PER LIMITED PARTNERSHIP UNIT
---------------------------------------
Net income per limited partnership unit is calculated based on the weighted
average number of limited partnership units outstanding during the period and
the net income allocated to the Limited Partners. The weighted average number
of limited partnership units outstanding during the three and six months ended
June 30, 1996 was 198,543 and 198,935, respectively; and 200,717 and 200,850 for
the three and six months ended June 30, 1995, respectively.
NOTE 4. 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.)
7
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The General Partners are entitled to receive various fees and compensation from
the Partnership which are summarized as follows:
Operational Stage
- -----------------
The net profits, losses and cash distributions of the Partnership during the
operational stage are allocated 99% to the Limited Partners and 1% to the
General Partners.
The Partnership reimburses The Windsor Corporation for certain direct expenses,
and employee, executive and administrative time, which are incurred on the
Partnership's behalf. The Partnership was charged $19,300 and $18,200 for such
costs during the three months ended June 30, 1996 and 1995, respectively; and
$39,000 and $39,500 for the six months ended June 30, 1996 and 1995,
respectively. These costs are included in property operating and general and
administrative expenses in the accompanying Statements of Operations.
Liquidation Stage
- -----------------
The General Partners receive 1% of profits, losses, and cash distributions from
the sale or financing of Partnership properties. This participation increases
to 15% after the Limited Partners have received their original invested capital
plus a 9% cumulative, non-compounded, annual return.
During the three months ended June 30, 1995, the General Partners received cash
distributions of $1,200; and $2,300 for both the six months ended June 30, 1996
and 1995. The General Partners received no cash distributions during the three
months ended June 30, 1996.
NOTE 5. 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, 1996 and 1995 follows:
<TABLE>
<CAPTION>
1996 1995
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Per Per
Amount Unit Amount Unit
----------- -------- ----------- --------
<S> <C> <C> <C> <C>
Net income
- limited partners $ 72,500 $ 0.36 $ 36,100 $ 0.18
Return of capital 151,500 0.77 187,900 0.93
----------- -------- ----------- --------
$ 224,000 $ 1.13 $ 224,000 $ 1.11
=========== ======== =========== ========
</TABLE>
8
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WINDSOR PARK PROPERTIES 4
-------------------------
(A California Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
Changes in Financial Condition
- ------------------------------
June 30, 1996 as compared to December 31, 1995
- ----------------------------------------------
The Partnership's primary sources of cash during the six months ended June 30,
1996 were from the operations of its investment properties and distributions
from joint ventures. The primary uses of cash during the same period were for
debt service and cash distributions to partners.
There have been no significant changes in the financial condition of the
Partnership since December 31, 1995. Partners' equity decreased from $6,326,200
at December 31, 1995 to $6,146,400 at June 30, 1996 due to cash distributions of
$226,300 and repurchased limited partnership units of $26,700, exceeding net
income of $73,200.
At June 30, 1996, the Partnership's total mortgage debt, including its
proportionate share of joint venture debt, was $4,064,500, consisting of
$2,300,000 of fixed rate debt and $1,764,500 of variable rate debt. The fixed
rate debt was converted from variable rate debt during the second quarter in
order to reduce the Partnership's future exposure to interest rate risk. All
other terms of the fixed rate debt remain the same. The average rate of
interest on the fixed and variable rate debt was 8.9% and 9.1%, respectively, at
June 30, 1996.
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, cash
distributions to partners and debt service. 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
- ---------------------
Six months ended June 30, 1996 as compared to six months ended June 30, 1995
- ----------------------------------------------------------------------------
The results of operations for the six months ended June 30, 1996 and 1995 are
not directly comparable due to the purchases of interests in the Rancho Margate
and Winter Haven manufactured home communities in September 1995 and October
1995, respectively. The Partnership realized net income of $73,200 and $36,500
for the six months ended June 30, 1996 and 1995, respectively. Net income per
limited partnership unit was $0.36 in 1996 and $0.18 in 1995.
Rent and utilities revenues increased from $530,200 in 1995 to $550,300 in 1996.
The overall increase is attributable to increased revenues at the Sunset Vista
community due to improved occupancy levels, offset by lower revenues at the
Sunrise Village community due to higher vacancy rates. Sunset Vista in Magna,
Utah increased occupancy from 94% at June 30, 1995 to 100% at June 30, 1996, due
to a strong local economy in the Salt Lake City area. Occupancy at Sunrise
Village in Cocoa, Florida decreased from 69% at June 30, 1995 to 63% at June 30,
1996 due to a weak local market attributable to NASA cutbacks.
Equity in earnings of joint ventures represents the Partnership's share of the
net income of four manufactured home communities in 1996 and two communities in
1995 (as mentioned previously, two joint venture interests were acquired in
September and October 1995). Equity in earnings of joint
9
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ventures increased from $38,600 in 1995 to $70,900 in 1996 due mainly to the
purchase of the two additional joint venture interests. The overall occupancy
of the Partnership's four joint venture properties was 96% at June 30, 1996,
compared to 86% for two properties at June 30, 1995. Recent rent increases
implemented include $10 per month at Harmony Ranch effective October 1995, $10
and $13 per month at Winter Haven and Rancho Margate, respectively, effective
January 1996, and $12 per month at Big Country effective February 1996.
Interest income increased from $8,100 in 1995 to $19,300 in 1996 due mainly to
higher cash balances maintained by the Partnership.
Property operating expenses increased slightly from $358,100 in 1995 to $359,700
in 1996. Higher utilities costs and losses incurred on the sale of rental homes
at Sunset Vista were offset by lower repairs and maintenance and property tax
costs.
Depreciation expense decreased from $146,900 in 1995 to $114,600 in 1996. The
decrease is due to a $1,000,000 provision for estimated loss in value of the
Sunrise Village community recorded in December 1995. A portion of the provision
was recorded as a reduction to the depreciable basis of the property, thereby
reducing future depreciation expense.
Interest expense of $68,100 in 1996 represents interest incurred on the
$1,400,000 loan obtained by the Partnership in October 1995. No interest
expense was incurred by the Partnership in 1995.
General and administrative expense decreased from $64,500 in 1995 to $55,300 in
1996 due mainly to proxy solicitation expenses incurred in 1995.
Three months ended June 30, 1996 as compared to three months ended June 30, 1995
- --------------------------------------------------------------------------------
The results of operations for the three months ended June 30, 1996 and 1995 are
not directly comparable due to the purchases of interests in the Rancho Margate
and Winter Haven manufactured home communities in September 1995 and October
1995, respectively, as discussed previously. The Partnership realized net
income of $39,500 and $8,300 for the three months ended June 30, 1996 and 1995,
respectively. Net income per limited partnership unit was $0.19 in 1996 and
$0.04 in 1995.
Rent and utilities revenues increased from $271,900 in 1995 to $278,700 in 1996,
for the reasons discussed previously.
Equity in earnings of joint ventures represents the Partnership's share of the
net income of four manufactured home communities in 1996 and two communities in
1995 (as mentioned previously, two joint venture interests were acquired in
September and October 1995). Equity in earnings of joint ventures increased
from $19,700 in 1995 to $34,900 in 1996 due mainly to the purchase of the two
additional joint venture interests.
Property operating expenses decreased from $191,200 in 1995 to $172,700 in 1996.
The overall decrease is comprised mainly of lower wages, repairs and maintenance
and property tax costs, offset by higher utility costs.
Depreciation expense decreased from $73,700 in 1995 to $57,400 in 1996 for the
reasons discussed previously.
Interest expense of $35,500 in 1996 represents interest incurred on the
$1,400,000 loan obtained by the Partnership in October 1995. No interest
expense was incurred by the Partnership in 1995.
10
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PART II
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<CAPTION>
<C> <S>
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.
</TABLE>
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 4,
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 12, 1996
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET OF WINDSOR PARK PROPERTIES 4 AS OF JUNE 30, 1996 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>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 863,100
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 6,522,500
<DEPRECIATION> 3,031,300
<TOTAL-ASSETS> 7,653,700
<CURRENT-LIABILITIES> 0
<BONDS> 1,400,000
0
0
<COMMON> 0
<OTHER-SE> 6,146,400<F1>
<TOTAL-LIABILITY-AND-EQUITY> 7,653,700
<SALES> 0
<TOTAL-REVENUES> 670,900
<CGS> 0
<TOTAL-COSTS> 359,700
<OTHER-EXPENSES> 169,900
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 68,100
<INCOME-PRETAX> 73,200
<INCOME-TAX> 0
<INCOME-CONTINUING> 73,200
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 73,200
<EPS-PRIMARY> 0.36<F2>
<EPS-DILUTED> 0
<FN>
<F1> Limited and general partners equity.
<F2> Net income per limited partnership unit.
</FN>
</TABLE>
