<PAGE> 1
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, 1998
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ______________ to ______________
Commission file number 0-16642
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WINDSORPARK PROPERTIES 5, A CALIFORNIA LIMITED PARTNERSHIP
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(Exact name of small business issuer as specified in its charter)
California 33-0243223
- ------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
6430 S. Quebec street, Englewood, Colorado 80111
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(Address of principal executive offices)
(303) 741-3707
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(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
<TABLE>
<CAPTION>
PART I
Page
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<S> <C> <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 12
</TABLE>
2
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WINDSOR PARK PROPERTIES 5
(A California Limited Partnership)
BALANCE SHEET
(unaudited)
<TABLE>
<CAPTION>
June 30, 1998
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<S> <C>
ASSETS
Property held for investment:
Land $ 1,507,800
Buildings and improvements 2,135,700
Fixtures and equipment 34,400
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3,677,900
Less accumulated depreciation (1,018,000)
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2,659,900
Investments in joint ventures and limited partnerships 2,208,700
Cash and cash equivalents 411,900
Deferred financing costs 38,300
Other assets 37,900
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Total Assets $ 5,356,700
===============
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Mortgage note payable $ 1,097,000
Accrued expenses 54,400
Due to General Partners and affiliates 6,500
Tenant deposits and other liabilities 28,900
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Total Liabilities 1,186,800
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Partners' equity:
Limited partners 4,148,500
General partners 21,400
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4,169,900
---------------
Total Liabilities and Partners' Equity $ 5,356,700
===============
</TABLE>
See accompanying notes to financial statements.
3
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WINDSOR PARK PROPERTIES 5
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30,
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1998 1997
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<S> <C> <C>
REVENUES
Rent and utilities $ 132,500 $ 116,600
Equity in earnings of joint ventures and limited partnerships 26,600 19,700
Interest 2,500 6,200
Other 2,800 3,400
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164,400 145,900
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COSTS AND EXPENSES
Property operating 65,200 67,500
Depreciation and amortization 27,100 27,100
Interest 26,100 26,300
General and administrative:
Related parties 6,400 14,000
Other 15,100 11,500
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139,900 146,400
------------ ------------
Net income $ 24,500 $ (500)
============ ============
Net income - general partners $ 200 $ --
============ ============
Net income - limited partners $ 24,300 $ (500)
============ ============
Basic and Dilutive Earnings per limited partnership unit $ 0.10 $ 0.00
============ ============
</TABLE>
See accompanying notes to financial statements.
4
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WINDSOR PARK PROPERTIES 5
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
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1998 1997
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<S> <C> <C>
REVENUES
Rent and utilities $ 259,300 $ 231,500
Equity in earnings of joint ventures and limited partnerships 57,400 46,200
Interest 10,200 11,800
Other 5,500 7,600
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332,400 297,100
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COSTS AND EXPENSES
Property operating 130,700 130,600
Depreciation and amortization 54,100 54,000
Interest 52,600 52,000
General and administrative:
Related parties 13,800 27,500
Other 32,000 23,300
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283,200 287,400
------------ ------------
Net income $ 49,200 $ 9,700
============ ============
Net income - general partners $ 500 $ 100
============ ============
Net income - limited partners $ 48,700 $ 9,600
============ ============
Basic and Dilutive Earnings per limited partnership unit $ 0.20 $ 0.04
============ ============
</TABLE>
See accompanying notes to financial statements.
5
<PAGE> 6
WINDSOR PARK PROPERTIES 5
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
---------------------------
1998 1997
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 49,200 $ 9,700
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization 54,100 54,000
Equity in earnings of joint ventures and limited
partnerships (57,400) (46,200)
Joint ventures' and limited partnerships cash
distributions 57,400 46,200
Amortization of deferred financing costs 4,500 4,500
Gain on sale of property held for investment 0 5,300
Changes in operating assets and liabilities:
(Increase) decrease in other assets (8,900) 600
Accounts payable (4,900) (17,200)
Accrued expenses 35,000 6,000
Due to General Partners and affiliates 14,500 0
Tenant deposits and other liabilities (6,000) (3,900)
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Net cash provided by operating activities 108,500 59,000
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Cash flows from investing activities:
Investment in joint venture and limited partnerships 100 (197,500)
Joint ventures' and limited partnerships cash
distributions 115,700 25,900
Proceeds from sale of property held for investment 0 10,800
Increase in property held for investment (70,100) (6,700)
------------ ------------
Net cash (used in) provided by investing activities 45,700 (167,500)
------------ ------------
Cash flows from financing activities:
Cash distributions (98,500) (101,000)
Repurchase of limited partnership units (20,700) (10,800)
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Net cash used in financing activities (119,200) (111,800)
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Net increase (decrease) in cash and cash equivalents 35,000 (220,300)
Cash and cash equivalents at beginning of period 376,900 523,800
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Cash and cash equivalents at end of period $ 411,900 $ 303,500
============ ============
</TABLE>
See accompanying notes to financial statements.
6
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WINDSOR PARK PROPERTIES 5
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. THE PARTNERSHIP
Windsor Park Properties 5, A California Limited Partnership (the Partnership),
was formed in June 1987 for the purpose of acquiring and holding existing
manufactured home communities for investment. The General Partners of the
Partnership are The Windsor Corporation ("TWC"), a California corporation, and
John A. Coseo, Jr. In September 1997, Chateau Communities Inc., (Chateau), a
publicly held real estate investment trust, purchased 100 percent of the shares
of the Windsor Corporation.
The Partnership was funded through a public offering of 244,729 limited
partnership units at $100 per unit which commenced in September 1987 and
terminated in September 1988. The Partnership term is set to expire in December
2001; however, the Partnership may either be dissolved earlier or extended under
certain circumstances. The Partnership may be extended at the recommendation of
the General Partners with approval of a majority of the Limited Partners.
NOTE 2. BASIS OF PRESENTATION
The balance sheet at June 30, 1998 and the related statements of operations for
the three and six months ended June 30, 1998 and 1997 and the statements of cash
flows for the six months ended June 30, 1998 and 1997 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 on form 10-KSB for the year ended December 31,
1997.
NOTE 3. INVESTMENTS IN JOINT VENTURES AND LIMITED PARTNERSHIPS
The Partnership's investments in joint ventures and limited partnerships consist
of interests in five manufactured home communities at June 30, 1998. The
combined condensed results of operations of the joint venture and limited
partnership properties for the six months ended June 30, 1998 and 1997 are as
follows:
<TABLE>
<CAPTION>
1998 1997
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<S> <C> <C>
Property revenues $ 1,604,200 $ 1,443,600
Expenses:
Property operating 719,100 659,600
Interest 472,700 408,100
Depreciation 292,300 258,600
General and administrative 9,400 0
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1,493,500 1,326,300
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Net income $ 110,700 $ 117,300
============ ============
</TABLE>
7
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NOTE 4. BASIC AND DILUTIVE EARNINGS (LOSS) PER LIMITED PARTNERSHIP UNIT
Basic and dilutive earnings (loss) per limited partnership unit is calculated
based on the weighted average number of limited partnership units outstanding
during the period and the net income (loss) allocated to the Limited Partners.
The weighted average number of limited partnership units outstanding during the
three and six months ended June 30, 1998 was 237,829 and 238,168, respectively;
and 239,846 and 240,192 for the three and six months ended June 30, 1997,
respectively.
In 1997, the Partnership adopted Statement of Financial Accounting Standards No.
128 (SFAS 128), "Earnings Per Share." This accounting standard specifies new
computation, presentation, and disclosure requirements for earnings per share to
be applied retroactively. Among other things, SFAS 128 requires presentation of
basic and diluted earnings per share on the face of the income statement. The
adoption of SFAS 128 had no effect on the per unit results previously reported.
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, 1998 and 1997 follows:
<TABLE>
<CAPTION>
1998 1997
----------------------------- ------------------------------
Per Per
Amount Unit Amount Unit
--------- -------- --------- ---------
<S> <C> <C> <C> <C>
Net income
- limited partners $ 48,700 $ 0.20 $ 9,600 $ 0.04
Return of capital 51,300 0.22 90,400 0.38
--------- -------- --------- ---------
$ 100,000 $ 0.42 $ 100,000 $ 0.42
========= ======== ========= =========
</TABLE>
8
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WINDSOR PARK PROPERTIES 5
(A California Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Three months ended June 30, 1998 as compared to three months ended June 30, 1997
Results of Operations
The Partnership realized net income of $24,500 and a net loss of $500 for the
three months ended June 30, 1998 and 1997, respectively. The net income per
common share was $0.10 in 1998 compared to $0.00 in 1997. The increased income
is attributable to the rental increases and increased occupancy at the
communities.
Rent and utilities revenues increased from $116,600 in 1997 to $132,500 in 1998
due to rent increases and increased occupancy at both the Lakeside and
Plantation Estates communities.
Equity in earnings of joint ventures and limited partnerships represents the
Partnership's share of the net income of five manufactured home communities.
Equity in earnings of joint ventures and limited partnerships increased from
$19,700 in 1997 to $26,600 in 1998, mainly due to rent increases recognized at
the Town & Country Estates, Rancho Margate and Winterhaven communities, offset
by the losses recognized at Apache East and Denali Park.
Interest income decreased from $6,200 in 1997 to $2,500 in 1998 due mainly to
lower cash balances maintained by the Partnership.
Property operating expenses decreased slightly from $67,500 in 1997 to $65,200
in 1998.
General and administrative expense decreased from $25,500 in 1997 to $21,500 in
1998 due to lower employee time charges charged to the General Partners.
Six months ended June 30, 1998 as compared to Six months ended March 31, 1997
Results of Operations
The Partnership's net income was $49,200 and $9,700 for the six months ended
June 30, 1998 and 1997, respectively. The net income per common share was $0.20
in 1998 compared to $0.04 in 1997. The increased income is attributable to the
rental increases and increased occupancy levels at the communities.
Rent and utilities revenues increased from $231,500 in 1997 to $259,300 in 1998
due to rent increases and increased occupancy at both the Lakeside and
Plantation Estates communities.
Equity in earnings of joint ventures and limited partnerships represents the
Partnership's share of the net income of five manufactured home communities.
Equity in earnings of joint ventures and limited partnerships increased from
$46,200 in 1997 to $57,400 in 1998, mainly due to rent increases recognized at
the Town & Country Estates, Rancho Margate and Winterhaven communities, offset
by the losses recognized at Apache East and Denali Park.
Interest income decreased slightly from $11,800 in 1997 to $10,200 in 1998.
General and administrative expense decreased from $50,800 in 1997 to $45,800 in
1998 due to lower employee time charges charged to the General Partners.
9
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Changes in Financial Condition
The Partnership's primary sources of cash during the six months ended June 30,
1998 were from the operations of its investment properties and cash
distributions from joint ventures. The primary uses of cash during the same
period were for cash distributions to the partners and the repurchase of
partnership units.
No further investment property acquisitions are planned by the General Partners.
At June 30, 1998, the Partnership's total mortgage debt, including its
proportionate share of joint venture debt, was $3,392,800, consisting entirely
of variable rate debt. The average rate of interest on the variable rate debt
was 8.8% at June 30, 1998.
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,
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.
In 1997, the Partnership adopted Statement of Financial Accounting Standards No.
128 (SFAS 128), "Earnings Per Share." This accounting standard specifies new
computation, presentation, and disclosure requirements for earnings per share to
be applied retroactively. Among other things, SFAS 128 requires presentation of
basic and diluted earnings per share on the face of the income statement. The
adoption of SFAS 128 had no effect on the per unit results previously reported.
10
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PART II
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits and Index of Exhibits
(27) Financial Data Schedule
11
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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 6,
A California Limited Partnership
--------------------------------
(Registrant)
By: The Windsor Corporation, a California
corporation
By /s/ Steven G. Waite
---------------------------------------------
STEVEN G. WAITE
President
Date: August 13, 1998
12
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 411,900
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 3,677,900
<DEPRECIATION> 1,018,000
<TOTAL-ASSETS> 5,356,700
<CURRENT-LIABILITIES> 89,800
<BONDS> 1,097,000
0
0
<COMMON> 0
<OTHER-SE> 4,169,900
<TOTAL-LIABILITY-AND-EQUITY> 5,356,700
<SALES> 0
<TOTAL-REVENUES> 332,400
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 230,700
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 52,500
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 49,200
<EPS-PRIMARY> 0.20
<EPS-DILUTED> 0.20
</TABLE>
