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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 September 30, 1997
-------------------------
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____________________ to ____________________
Commission file number 0-17576
------------
WINDSOR PARK PROPERTIES 6, A CALIFORNIA LIMITED PARTNERSHIP
------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
California 33-0299846
- ------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
6430 S. Quebec Street, Englewood, Colorado 80111
- --------------------------------------------------------------------------------
(Address of principal executive offices)
(303) 741-3707
- --------------------------------------------------------------------------------
(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
</TABLE>
2
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WINDSOR PARK PROPERTIES 6
-------------------------
(A California Limited Partnership)
BALANCE SHEET
-------------
(unaudited)
<TABLE>
<CAPTION>
September 30, 1997
------------------
<S> <C>
ASSETS
- ------
Property held for investment:
Land $ 508,800
Buildings and improvements 3,422,400
Fixtures and equipment 33,900
------------------
3,965,100
Less accumulated depreciation (1,394,800)
------------------
2,570,300
Investments in joint ventures 5,345,200
Cash and cash equivalents 289,600
Deferred financing costs 52,000
Other assets 37,000
------------------
$ 8,294,100
==================
LIABILITIES AND PARTNERS' EQUITY
- --------------------------------
Liabilities:
Mortgage note payable $ 1,340,000
Accounts payable 2,500
Accrued expenses 58,100
Tenant deposits and other liabilities 37,300
------------------
1,437,900
------------------
Partners' equity:
Limited partners 6,849,300
General partners 6,900
------------------
6,856,200
------------------
$ 8,294,100
==================
</TABLE>
See accompanying notes to financial statements.
3
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WINDSOR PARK PROPERTIES 6
-------------------------
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended September 30,
------------------------------------
1997 1996
----------------- ----------------
<S> <C> <C>
REVENUES
- --------
Rent and utilities $ 162,100 $ 146,700
Equity in earnings of joint ventures 41,900 58,900
Interest 5,200 6,100
Other 4,200 6,000
---------------- ----------------
213,400 217,700
---------------- ----------------
COSTS AND EXPENSES
- ------------------
Property operating 92,600 75,400
Interest 31,800 31,300
Depreciation and amortization 45,200 43,900
General and administrative:
Related parties 17,900 18,500
Other 8,200 8,300
---------------- ----------------
195,700 177,400
---------------- ----------------
Net income $ 17,700 $ 40,300
================ ================
Net income - general partners $ 200 $ 400
================ ================
Net income - limited partners $ 17,500 $ 39,900
================ ================
Net income per limited partnership unit $ 0.06 $ 0.13
================ ================
</TABLE>
See accompanying notes to financial statements.
4
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WINDSOR PARK PROPERTIES 6
-------------------------
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
------------------------------------
1997 1996
--------------- --------------
<S> <C> <C>
REVENUES
- --------
Rent and utilities $ 464,200 $ 422,300
Equity in earnings of joint ventures 157,800 202,200
Interest 13,300 18,600
Other 21,300 26,000
-------------- --------------
656,600 669,100
-------------- --------------
COSTS AND EXPENSES
- ------------------
Property operating 234,600 206,900
Interest 95,000 92,900
Depreciation and amortization 134,300 130,700
General and administrative:
Related parties 58,900 55,700
Other 33,500 34,500
-------------- --------------
556,300 520,700
-------------- --------------
Net income $ 100,300 $ 148,400
============== ==============
Net income - general partners $ 1,000 $ 1,500
============== ==============
Net income - limited partners $ 99,300 $ 146,900
============== ==============
Net income per limited partnership unit $ 0.33 $ 0.49
============== ==============
</TABLE>
See accompanying notes to financial statements.
5
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WINDSOR PARK PROPERTIES 6
-------------------------
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
------------------------
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------
1997 1996
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<S> <C> <C>
Cash flows from operating activities:
Net income $ 100,300 $ 148,400
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 134,300 130,700
Equity in earnings of joint ventures (157,800) (202,200)
Joint ventures' cash distributions 157,800 202,200
Amortization of deferred financing costs 7,800 7,800
Gain on sale of property held for investment (6,300)
Changes in operating assets and liabilities:
Other assets 4,000 10,600
Accounts payable (3,600) (5,400)
Accrued expenses 11,300 1,600
Tenant deposits and other liabilities (10,700) (16,700)
------------ ----------
Net cash provided by operating activities 237,100 277,000
------------ ----------
Cash flows from investing activities:
Investment joint ventures (100)
Joint ventures' cash distributions 198,200 133,600
Increase in property held for investment (35,600) (23,800)
Proceeds from sale of property held for
investment 6,300
------------ ----------
Net cash provided by investing activities 168,800 109,800
------------ ----------
Cash flows from financing activities:
Cash distributions (606,100) (606,000)
Repurchase of limited partnership units (40,400) (12,100)
------------ ----------
Net cash used in financing activities (646,500) (618,100)
------------ ----------
Net decrease in cash and cash equivalents (240,600) (231,300)
Cash and cash equivalents at beginning of
period 530,200 652,900
------------ ----------
Cash and cash equivalents at end of period $ 289,600 $ 421,600
============ ==========
Supplemental disclosure of cash flow
information:
Cash paid during the period for:
Interest (none capitalized) $ 87,000 $ 85,600
============ ==========
</TABLE>
See accompanying notes to financial statements.
6
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WINDSOR PARK PROPERTIES 6
-------------------------
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE 1. BASIS OF PRESENTATION
---------------------
The balance sheet at September 30, 1997 and the related statements of operations
for the three and nine months ended September 30, 1997 and 1996 and the
statements of cash flows for the nine months ended September 30, 1997 and 1996
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.
NOTE 2. INVESTMENTS IN JOINT VENTURES
-----------------------------
The Partnership's investments in joint ventures consist of interests in five
manufactured home communities. The combined condensed results of operations of
these properties for the nine months ended September 30, 1997 and 1996 follows:
<TABLE>
<CAPTION>
1997 1996
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<S> <C> <C>
Total revenues $ 4,109,600 $ 4,044,900
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Expenses:
Property operating 1,918,300 1,810,900
Interest 1,106,500 1,090,600
Depreciation 650,100 629,300
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3,674,900 3,530,800
-------------- --------------
Net income $ 434,700 $ 514,100
============== ==============
</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 nine months ended
September 30, 1997 was 294,840 and 296,528, respectively; and 296,407 and
296,776 for the three and nine months ended September 30, 1996, respectively.
NOTE 4. RELATED PARTY TRANSACTIONS
--------------------------
The General Partners of the Partnership are The Windsor Corporation, a
California corporation, and
See accompanying notes to financial statements.
7
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John A. Coseo, Jr. (In September, 1997, Chateau Communities, Inc. acquired 100%
of the shares of The Windsor Corporation.)
The General Partners are entitled to receive from the Partnership various fees
and compensation 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 incurred on the Partnership's
behalf. The Partnership was charged $19,500 and $21,300 for such costs during
the three months ended September 30, 1997 and 1996, respectively; and $68,600
and $64,600 during the nine months ended September 30, 1997 and 1996,
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 cash distributions from the sale or
refinancing 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.
The General Partners generally receive 1% of profits and losses from the sale of
Partnership properties. However, if applicable, profits on sale will first be
allocated 100% to the General Partners to the extent of their negative capital
account.
The General Partners received cash distributions of $6,000 during both the nine
months ended September 30, 1997 and 1996. The General Partners received $3,000
in distributions during both the three months ended September 30, 1997 and 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 nine months ended September 30, 1997 and 1996
follows:
<TABLE>
<CAPTION>
1997 1996
--------------------- ----------------------
Per Per
Amount Unit Amount Unit
------ ---- ------ ----
<S> <C> <C> <C> <C>
Net income
- limited partners $ 99,300 $ 0.33 $ 146,900 $ 0.49
Return of capital 500,700 1.69 453,100 1.53
---------- ------- ---------- -------
$ 600,000 $ 2.02 $ 600,000 $ 2.02
========== ======= ========== =======
</TABLE>
8
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WINDSOR PARK PROPERTIES 6
-------------------------
(A California Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
Changes in Financial Condition
- ------------------------------
September 30, 1997 as compared to December 31, 1996
- ---------------------------------------------------
The Partnership's primary sources of cash during the nine months ended September
30, 1997 were from the operations of its investment properties and cash
distributions from joint ventures. The primary use of cash during the same
period was for cash distributions to partners.
There has been no significant change in the financial condition of the
Partnership since December 31, 1996. Partners' equity decreased from $7,402,400
at December 31, 1996 to $6,887,800 at September 30, 1997 due to cash
distributions of $606,100 and repurchased limited partnership units of $40,400
exceeding net income of $131,900.
At September 30, 1997, the Partnership's total mortgage debt, including its
proportionate share of joint venture debt, was $7,705,600, consisting entirely
of variable rate debt. The average rate of interest on the variable rate debt
was 8.9% at September 30, 1997.
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
- ---------------------
Nine months ended September 30, 1997 as compared to nine months ended September
- -------------------------------------------------------------------------------
30, 1996
- --------
The Partnership realized net income of $100,300 and $148,400 for the nine months
ended September 30, 1997 and 1996, respectively. Net income per limited
partnership unit was $0.34 in 1997 and $0.49 in 1996.
Rent and utilities revenues increased from $422,300 in 1996 to $464,200 in 1997.
The overall occupancy level of the Partnership's two wholly-owned properties
increased from 94% at September 30, 1996 to 99% at September 30, 1997. Recent
rent increases implemented include $8 per month at Chisholm Creek effective both
September 1997 and 1996; and $10 and $14 per month at Circle K effective May
1997 and 1996, respectively.
Equity in earnings of joint ventures represents the Partnership's share of the
net income of five manufactured home communities. Equity in earnings of joint
ventures decreased from $202,200 in 1996 to $157,800 in 1997. The decrease is
due mainly to the Carefree Village community in Tampa, which lost occupancy due
to aggressive competition in the local market. The property has upgraded its
amenity package and is offering its own aggressive promotional package in order
to maintain and improve occupancy. The overall occupancy of the Partnership's
five joint venture properties was level at 93% at both September 30, 1997 and
1996. Recent rent increases implemented include $8 per month at Town and
Country effective May 1996; $9 and $12 per month at Winter Haven and Rancho
9
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Margate, respectively, effective January 1997; and $5 per month at Carefree
effective September 1996.
Interest income decreased from $18,600 in 1996 to $13,300 in 1997 due mainly to
lower cash balances maintained by the Partnership.
Property operating expenses increased from $206,900 in 1996 to $234,600 in 1997.
The increase is due mainly to higher repairs and maintenance costs.
Interest expense increased from $92,900 in 1996 to $95,000 in 1997 due to
slightly higher interest rates.
General and administrative expense increased from $90,200 in 1996 to $92,400 in
1997, due mainly to higher employee time charges from the General Partners.
Three months ended September 30, 1997 as compared to three months ended
- -----------------------------------------------------------------------
September 30, 1996
- ------------------
The Partnership realized net income of $17,700 and $40,300 for the three months
ended September 30, 1997 and 1996, respectively. Net income per limited
partnership unit was $0.06 in 1997 and $0.13 in 1996.
Rent and utilities revenues increased from $146,700 in 1996 to $162,100 in 1997,
for the reasons discussed previously.
Equity in earnings of joint ventures represents the Partnership's share of the
net income of five manufactured home communities. Equity in earnings of joint
ventures increased from $58,900 in 1996 to $41,900 in 1997, for the reasons
discussed previously.
Interest income decreased from $6,100 in 1996 to $5,200 in 1997 due mainly to
lower cash balances maintained by the Partnership.
Property operating expenses increased from $75,400 in 1996 to $92,600 in 1997
due mainly to higher repairs and maintenance costs.
Interest expense increased from $31,300 in 1996 to $31,800 in 1997 due to
slightly higher interest rates.
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
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the period
covered by this Form 10QSB
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, General Partner
By /s/ Steven G. Waite
------------------------------
STEVEN G. WAITE
President
Date: November 14, 1997
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENTS OF INCOME AND CONSOLIDATED BALANCE SHEETS FOUND ON PAGES
3, 4 AND 5 OF THE COMPANY'S 10-Q FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER
30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 289,600
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 3,965,100
<DEPRECIATION> 1,394,800
<TOTAL-ASSETS> 8,294,100
<CURRENT-LIABILITIES> 0
<BONDS> 1,340,000
0
0
<COMMON> 0
<OTHER-SE> 6,856,200
<TOTAL-LIABILITY-AND-EQUITY> 8,294,100
<SALES> 0
<TOTAL-REVENUES> 656,600
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 461,300
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 95,000
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 100,300
<EPS-PRIMARY> 0.33
<EPS-DILUTED> 0.33
</TABLE>
