<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 1999
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
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 in its charter)
California 33-0299846
- ----------------------------- ----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
6160 South Syracuse Way, Greenwood Village, Colorado 80111
----------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (303) 741-3707
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g)
of the Exchange Act: Units of Limited Partnership Interest
-------------------------------------
(Title of Class)
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 [_]
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year: $867,200
DOCUMENTS INCORPORATED BY REFERENCE: None
<PAGE>
TABLE OF CONTENTS
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PART I
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<TABLE>
<CAPTION>
Page
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<S> <C>
Item 1. Description of Business 3
Item 2. Description of Properties 5
Item 3. Legal Proceedings 6
Item 4. Submission of Matters to a Vote of Security Holders 7
PART II
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Item 5. Market for the Partnership's Units and Related Security Holder Matters 8
Item 6. Management's Discussion and Analysis 8
Item 7. Financial Statements 10
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure 21
PART III
--------
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of The Exchange Act 22
Item 10. Executive Compensation 23
Item 11. Security Ownership of Certain Beneficial Owners and Management 23
Item 12. Certain Relationships and Related Transactions 23
Item 13. Exhibits and Reports on Form 8-K 24
SIGNATURES 25
</TABLE>
2
<PAGE>
PART I
------
Certain matters discussed under the captions "Description of Business,"
"Description of Properties," "Management's Discussion and Analysis," and
elsewhere in this Annual Report on Form 10-KSB may constitute forward-looking
statements and as such involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievements of the
Windsor Park Properties 6, A California Limited Partnership (the "Partnership"),
to be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements.
Item 1. DESCRIPTION OF BUSINESS
-----------------------
Business Development
- --------------------
The Partnership was formed in June 1988 pursuant to the provisions of the
California Uniform Limited Partnership Act. The general partners of the
Partnership are The Windsor Corporation, a California corporation ("TWC"), and
John A. Coseo, Jr. (together with TWC, the "General Partners"). In September
1997, Chateau Communities, Inc., a publicly held real estate investment trust
("Chateau"), purchased 100% of the outstanding shares of capital stock of TWC.
Expiration of Term of Partnership
- ---------------------------------
Pursuant to the Agreement of Limited Partnership (the "Partnership Agreement")
of the Partnership, the term of the Partnership expired on December 31, 1999.
As a result, in accordance with the terms of the Partnership Agreement and
California law, the General Partners are required (i) to develop a plan of
liquidation for the Partnership's assets and to liquidate and dissolve the
Partnership or (ii) to take such steps as are necessary to extend the term of
the Partnership in order to enable it to continue as a going concern.
Accordingly, the General Partners have approved, and recommend that the
Partnership proceed with, a plan of liquidation (the "Plan of Liquidation"),
pursuant to which the Partnership will sell its wholly-owned property and its
partial ownership interests in five other properties (collectively, the
"Properties") to N'Tandem Trust, a California business trust ("N'Tandem"), and,
thereafter, make liquidating distributions to the partners in accordance with
the terms of the Partnership Agreement (together, the "Proposed Transactions").
The consummation of the Proposed Transactions is subject to the satisfaction of
certain conditions, including the approval of both proposals by a majority-in-
interest of the Partnership's Limited Partners. If the Proposed Transactions
are consummated, the Partnership will be liquidated and dissolved and
liquidating distributions will be made to the Limited Partners in accordance
with the terms of the Partnership Agreement.
On March 22, 2000, the General Partners mailed to the Limited Partners a Consent
Solicitation Statement describing the Proposed Transactions and requesting the
consent of such Limited Partners to the Proposed Transactions. The General
Partners anticipate that if the Proposed Transactions are approved by the
Limited Partners, all of the Partnership's Properties will be sold on or before
June 30, 2000.
3
<PAGE>
The Partnership owned interests in the following manufactured home communities
at December 31, 1999:
<TABLE>
<CAPTION>
Date
Name of Property Ownership % Acquired Location
- ---------------- ----------- -------- --------
<S> <C> <C> <C>
Chisholm Creek 100% July 1989 Wichita, Kansas
Town and Country Estates 58% January 1989 Tucson, Arizona
Carefree Village 44% July 1990 Tampa, Florida
Garden Walk 31% August 1995 Palm Beach Gardens, Florida
Rancho Margate 41% September 1995 Margate, Florida
Winter Haven 41% October 1995 Winter Haven, Florida
</TABLE>
The Partnership owns (i) a 58% partial interest in Town and Country Estates as a
tenant in common with Windsor Park Properties 5, A California Limited
Partnership, (ii) a 44% partial interest in Carefree Village and a 31% interest
in Garden Walk as a tenant in common with Windsor Park Properties 7, A
California Limited Partnership, and (iii) a 41% limited partner interest in
Windsor Park Properties 456, A California Limited Partnership, which holds
Rancho Margate and Winter Haven.
No further property financings or investment property acquisitions are planned
by the General Partners.
The overall occupancy of the Partnership's six communities was approximately 93%
at December 31, 1999. The General Partners continue to maintain the properties
in good condition and promote them to improve occupancy.
Business of Issuer
- ------------------
The Partnership is currently in the business of managing, holding for
investment, and eventually selling its interests in, the six manufactured home
communities in its portfolio. Competitors of the Partnership include other
public and private limited partnerships, individuals, corporations, and other
entities engaged in real estate investment activities. Competition for such
properties varies with changes in the supply or demand for similar or competing
properties in a given area, changes in interest rates and the availability of
mortgage funds, and changes in tax, real estate, environmental, and zoning laws.
Partnership profitability depends in part on maximizing occupancy and rental
rates in its manufactured home communities. Rents and occupancy rates are
affected by both changes in general economic conditions and changes in local
conditions such as levels of employment, supply of other comparable units or
competitive housing alternatives, zoning laws, and the availability and cost of
energy and transportation.
All of the Partnership's properties are located in or near large urban areas.
Accordingly, they compete for rentals not only with other manufactured home
communities but with apartments and any other form of low-cost housing that
might exist in their respective market areas.
The Partnership's profitability also depends on the minimization of both
property and partnership administration expenses. Expenses are affected by
changes in general economic trends and changes in local conditions such as
prevailing wages, utility rates, insurance costs, and real estate taxation
practices.
The Partnership has no employees. Partnership administrative services are
provided by TWC, which is reimbursed for costs incurred on behalf of the
Partnership. Chateau employs all of the properties' on-site personnel and is
reimbursed by the Partnership for all such costs.
4
<PAGE>
Item 2. DESCRIPTION OF PROPERTIES
-------------------------
The Partnership owned interests in six properties at December 31, 1999. The
Partnership operates the properties as manufactured home communities, renting
space to manufactured home residents on a month-to-month basis. The properties
compete for rentals with other manufactured home communities and apartments in
their local markets. All of the properties are encumbered with debt, except
Chisholm Creek. The encumered properties have outstanding mortgage indebtedness
totaling approximately $15,887,600. It is the General Partners' opinion that
the properties are in good condition and are adequately insured.
<TABLE>
<CAPTION>
Town and
Country Estates Garden Walk Carefree Village
--------------- ----------- ----------------
Tucson, Palm Beach Gardens, Tampa,
Location Arizona Florida Florida
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Percentage of Ownership 58% 31% 44%
Date Acquired Jan-89 August-95 Jul-90
Acreage 38 71 58
Number of Sites 320 484 406
Monthly Rents (1) $219 $355 $274
Occupancy Level:
December 31, 1999 96% 90% 86%
Real Estate Taxes $34,300 $167,800 $134,200
Federal Tax Basis (2) $1,138,600 $6,552,200 $2,035,800
Mortgage Information:
Balance Payable $1,550,000 $5,700,000 $3,479,800
Interest Rate 8.23% 8.23% 8.23%
Amortization Period -- -- --
Maturity Date 9/02 8/02 6/02
Balance Due at Maturity $1,550,000 $5,700,000 $3,479,800
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Winter Haven Rancho Margate Chisholm Creek
------------- -------------- --------------
Winter Haven, Margate, Wichita,
Location Florida Florida Kansas
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Percentage of Ownership 41% 41% 100%
Date Acquired Oct-95 September-95 July-89
Acreage 30 29 45
Number of Spaces 238 245 251
Monthly Rents (1) $224 $364 $160
Occupancy Level:
December 31, 1999 98% 94% 100%
Real Estate Taxes $36,900 $158,000 $28,600
Federal Tax Basis (2) $2,631,000 $6,416,500 $1,009,000
Mortgage Information:
Balance Payable $1,574,900 $3,582,900 --
Interest Rate 8.92% 8.92% --
Amortization Period 30 yr. 30yr. --
Maturity Date 6/23 7/23 --
Balance Due at Maturity -- -- --
</TABLE>
___________________________________________
(1) Average rental rates in effect on December 31, 1999.
(2) For income tax purposes, the properties and their components are
depreciated using both straight-line and accelerated methods over useful
lives ranging from 5 to 40 years.
Item 3. LEGAL PROCEEDINGS
-----------------
On May 10, 1999, Ira Gaines, a limited partner of Windsor Park Properties 4, A
California Limited Partnership ("Windsor 4"), filed a purported class action and
derivative complaint (the "Complaint"), on behalf of himself and other similarly
situated limited partners, against the General Partners, in their capacity as
the general partners of Windsor 4, and the Directors and the President of TWC,
the managing General Partner of Windsor 4, in the Superior Court of the State of
California, County of San Diego. The Complaint asserts causes of action arising
out of the sale by Windsor 4 of its properties and other assets to N'Tandem for
cash and the subsequent liquidation of Windsor 4 in accordance with its
partnership agreement and alleges the following: (i) wrongful failure to
liquidate timely Windsor 4 in that its term expired on December 31, 1997 and to
engage in sustained efforts to liquidate Windsor 4's remaining properties, thus
allegedly tying up the limited partners' money for longer than was contemplated
or allowed under the agreement of limited partnership of Windsor 4, (ii) breach
of fiduciary duty owed by the defendants to Windsor 4 and its limited partners
in that the defendants allegedly failed to take steps to ensure the entire
fairness of the transaction and that the selling prices for Windsor 4's assets
allegedly do not fairly and adequately represent their present value, and (iii)
breach of the defendants' contractual duties owed to Windsor 4 and its limited
partners in that the agreement of limited partnership of Windsor 4 prohibits
sales of property to a sponsor of Windsor 4. In the Complaint, the plaintiff is
seeking relief in the form of monetary damages and an award of expenses and a
dissolution of Windsor 4 and the appointment of an independent liquidating
trustee to liquidate Windsor 4's assets.
On December 3, 1999, Mr. Gaines, also a limited partner of the Partnership and
Windsor Park Properties 3, A California Limited Partnership ("Windsor 3"),
amended the Compliant, in response to the Proposed Transactions of the
Partnership and similar transactions separately proposed with respect to Windsor
3, by filing an amended purported class action and derivative complaint (the
"Amended Complaint"), on behalf of himself and other similarly situated limited
partners, against the General Partners, in their capacity as the
6
<PAGE>
general partners of the Partnership, Windsor 4, and Windsor 3, and the Directors
and the President of TWC, in the Superior Court of the State of California,
County of San Diego. In addition to the original allegations set forth in the
Complaint, the Amended Complaint also alleges generally breach of fiduciary duty
and contractual duties owed by the defendants to the Partnership and Windsor 3
and their limited partners in that the defendants allegedly failed to take steps
to ensure the entire fairness of the transactions by proposing to sell the
partnerships' assets at prices that were improperly discounted from the
appraisal values and without taking steps to seek out alternative purchasers or
otherwise maximize value to the limited partners.
In the Amended Complaint, the plaintiff asserts causes of action for breach of
contract, breach of fiduciary duty and a derivative claim for breach of
fiduciary duty and seeks relief in the form of monetary damages and an award of
expenses and a dissolution of Windsor 4 and the appointment of an independent
liquidating trustee to liquidate Windsor 4's assets. Although the General
Partners dispute each claim set forth in the Amended Complaint, they have
concluded that the further defense of this action would be protracted, expensive
and distracting to their operations. To that end, the General Partners have
reached an agreement in principle that would settle all claims in the action,
subject to court approval of a definitive signed agreement. The proposed
settlement, if approved, provides for the total payment of more than $1 million
by the defendants, plus the costs of administering the settlement fund
(including the mailing of notice to class members), in return for releases from
all actual and potential claims concerning the management or operation of the
Partnership, Windsor 3 and Windsor 4 against all of the defendants and any
affiliated persons or entities. Accordingly, there would be available for
distribution to Limited Partners an aggregate of approximately $789,555 if the
proposed settlement is approved. In connection with the proposed settlement,
the defendants have agreed not to object to the application by plaintiffs'
counsel to the court for an award of up to one-third of the aggregate settlement
amount to be paid as attorney's fees and expenses. As a result, if the proposed
settlement is approved, the General Partners estimate that those Limited
Partners who do not elect to exclude themselves from the class will receive,
after payment of estimated attorney's fees and expenses to plaintiffs' counsel,
an amount of approximately $1.85 per unit of limited partner interest (each, a
"Unit"). Pursuant to the terms of the proposed settlement agreement, the
General Partners have the right, but not the obligation, to terminate the
proposed settlement if the Limited Partners fail to approve the Proposed
Transactions or the limited partners of Windsor 3, who are voting on similar
proposed transactions, fail to approve such transactions.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
There were no matters submitted to security holders for a vote during the fourth
quarter of the fiscal year covered by this report.
7
<PAGE>
PART II
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Item 5. MARKET FOR THE PARTNERSHIP'S UNITS AND RELATED SECURITY HOLDER MATTERS
----------------------------------------------------------------------
A public market for the Partnership's units does not exist and is not likely to
develop. As of December 31, 1999, there were approximately 3,297 holders of
record holding an aggregate of 286,564 Units.
Cash distributions paid to Limited Partners since December 31, 1997 are as
follows:
Per $1,000
Aggregate Originally
Date Paid Amount (1) Invested (2)
--------- --------- -----------
August 1999 $287,400 $ 9.60
February 1999 $300,000 $10.02
August 1998 $291,500 $10.02
February 1998 $293,600 $10.02
______________________________
(1) Amounts exclude General Partner participation.
(2) Computed based on $29,932,500 original investment.
Cash distributions paid to the General Partners since December 31, 1997 have
been $12,200.
Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS
------------------------------------
The following discussion should be read in conjunction with the financial
statements and Notes thereto included elsewhere in this Annual Report on Form
10-KSB. Certain statements in this discussion constitute "forward-looking
statements" and as such involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or achievements of the
partnership or industry to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements.
Results of Operations
- ---------------------
The results of operations for the year ended December 31, 1999 and 1998 are not
directly comparable due to the sale of the Partnership's Circle K property in
November 1998. The Partnership realized net income of $402,800 ($1.39 per Unit)
for the year ended 1999 as compared to $609,700 ($2.07 per Unit) for the year
ended 1998. The decrease is primarily due to the sale of the Circle K property.
Rent and utilities revenues decreased from $651,600 in 1998 to $504,900 in 1999.
The decrease was due to the sale of the Circle K property.
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 $259,200 in 1998 to $337,600 in 1999 primarily due to
increased rents at these communities.
Property operating costs decreased from $307,200 in 1998 to $212,700 in 1999 due
to the sale of the Circle K property.
Interest expense decreased from $147,900 in 1998 to $0 in 1999 because the
proceeds from the sale of the Circle K property in November 1998 were used to
pay off the mortgage.
8
<PAGE>
General and administrative expenses increased from $103,400 in 1998 to $118,400
in 1999.
Liquidity and Capital Resources
- -------------------------------
The Partnership's principal sources of cash during the years ended December 31,
1999 and 1998 were its cash flow generated from the operation of its communities
and distributions from investments in joint ventures and limited partnerships.
Net cash provided by operating activities was $408,800 and $461,100 for the
years ended December 31, 1999 and 1998, respectively. At December 31, 1999, the
Partnership's cash amounted to $352,900.
The Partnership's primary uses of its capital resources during the same periods
were for cash distributions to partners and debt service. Cash distributions to
partners totaled $593,500 and $591,200 for the years ended December 31, 1999 and
1998, respectively.
The Partnership's mortgage debt of $1,340,000 was paid off with the proceeds
from the sale of the Circle K property in November 1998. The Partnership's
proportionate share of joint venture and limited partnership debt at December
31, 1999 was approximately $6,311,800, consisting entirely of variable rate debt
with an average interest rate of 9.15%. The Partnership and the affiliated
entities are jointly and severally liable for the full amounts of the loans
obtained jointly.
The future sources of liquidity for the Partnership will be provided from
property operations, cash reserves, and ultimately from the sale of its
communities and investments in joint ventures and limited partnerships. The
Partnership expects to meet its short-term liquidity requirements, including
capital expenditures, administration expenses, debt services, and distributions
to partners, from cash flow provided from property operations and distributions
from investments in joint ventures and limited partnerships. The partnership
expects to meet its long-term liquidity requirements through the sale of its
community and investments in joint ventures and limited partnerships and the use
of cash reserves.
Inflation
- ---------
All of the leases or terms of tenants' occupancies at the properties allow for
at least annual rental adjustments. In addition, all of the lease are month-to-
month and enable the Partnership to seek market rentals upon reletting the
sites. Such leases generally minimize the risk to the Partnership of any
adverse effect of inflation.
Year 2000 Compliance
- --------------------
The Partnership had all systems modified to be compliant for the year 2000 and,
following the date change to the year 2000, has not experienced any material
impact on its financial condition or operations.
9
<PAGE>
Item 7. FINANCIAL STATEMENTS
--------------------
The following financial statements are filed as a part of this report:
Page
----
Report of Independent Accountants 11
Balance Sheet as of December 31, 1999 12
Statements of Operations for the Years Ended
December 31, 1999 and 1998 13
Statements of Partners' Equity for the Years
Ended December 31, 1999 and 1998 14
Statements of Cash Flows for the Years Ended
December 31, 1999 and 1998 15
Notes to Financial Statements 16
10
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of Windsor Park Properties 6,
(a California Limited Partnership)
In our opinion, the accompanying balance sheet and the related statements of
operations, partners' equity and cash flows present fairly, in all material
respects, the financial position of Windsor Park Properties 6, a California
Limited Partnership (the "Partnership"), at December 31, 1999, and the results
of its operations and its cash flows for each of the two years in the period
ended December 31, 1999, in conformity with accounting principles generally
accepted in the United States. These financial statements are the
responsibility of the Partnership's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with auditing standards generally
accepted in the United States which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
PricewaterhouseCoopers LLP
Denver, Colorado
March 23, 2000
11
<PAGE>
WINDSOR PARK PROPERTIES 6
-------------------------
(A California Limited Partnership)
BALANCE SHEET
-------------
<TABLE>
<CAPTION>
ASSETS December 31, 1999
- ------ ------------------
<S> <C>
Property held for sale, net $ 1,547,900
Investments in joint ventures and limited partnerships held for sale 4,601,900
Cash and cash equivalents 352,900
Other assets 205,800
----------------------
Total Assets $ 6,708,500
======================
LIABILITIES AND PARTNERS' EQUITY
- --------------------------------
Liabilities:
Accrued expenses 84,300
Tenant deposits and other liabilities 10,600
Due to general partners and affiliates 83,900
----------------------
Total Liabilities 178,800
----------------------
Commitments and Contingencies (Note 8)
Partners' Equity:
Limited partners 6,524,500
General partners 5,200
----------------------
Total Partners' Equity 6,529,700
----------------------
Total Liabilities and Partners' Equity $ 6,708,500
======================
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
WINDSOR PARK PROPERTIES 6
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
<TABLE>
<CAPTION>
For the Year Ended December 31,
------------------------------------------
1999 1998
------------------ -----------------
<S> <C> <C>
REVENUES
- --------
Rent and Utilities $ 504,900 $ 651,600
Equity in earnings of joint ventures and limited partnerships 337,600 259,200
Interest 7,200 15,200
Gain on sale of property held for investment - 396,000
Other 17,500 19,000
--------------- ---------------
867,200 1,341,900
--------------- ---------------
COSTS AND EXPENSES
- ------------------
Property operating expenses 212,700 307,200
Depreciation 133,300 173,700
Interest - 147,900
General and administrative:
Related parties 23,300 32,000
Other 95,100 71,400
-------------- -------------
464,400 732,200
-------------- -------------
Net income $ 402,800 $ 609,700
============== =============
Net income - general partners $ 4,000 $ 6,100
============== =============
Net income - limited partners $ 398,800 $ 603,600
============== =============
Basic and diluted earnings per limited partnership unit $ 1.39 $ 2.07
============== =============
</TABLE>
See accompanying notes to financial statements.
13
<PAGE>
WINDSOR PARK PROPERTIES 6
-------------------------
(A California Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
-------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
----------------------------------------------
<TABLE>
<CAPTION>
General Partners Limited Partners Total
---------------- ---------------- ----------
<S> <C> <C> <C>
Balance at December 31, 1997 $ 7,300 $6,879,000 $6,886,300
Cash distributions (6,100) (585,100) (591,200)
Net income 6,100 603,600 609,700
Repurchase of limited partnership units (113,200) (113,200)
---------------- ---------------- ----------
Balance at December 31, 1998 $ 7,300 $6,784,300 $6,791,600
Cash distributions (6,100) (587,400) (593,500)
Net income 4,000 398,800 402,800
Repurchase of limited partnership units (71,200) (71,200)
---------------- ---------------- ----------
Balance at December 31, 1999 $ 5,200 $6,524,500 $6,529,700
================ ================ ==========
</TABLE>
See accompanying notes to financial statements.
14
<PAGE>
WINDSOR PARK PROPERTIES 6
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
------------------------
<TABLE>
<CAPTION>
For the Year Ended December 31,
--------------------------------------------------
1999 1998
----------------------- -----------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 402,800 $ 609,700
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 133,300 173,700
Equity in earnings of joint ventures and limited partnerships (337,600) (259,200)
Joint ventures' and limited partnerships cash distributions 337,600 259,200
Amortization of deferred financing costs - 49,400
Gain on sale of property held for investment - (396,900)
Changes in operating assets and liabilities:
(Increase) decrease in other assets (199,700) 27,200
Decrease in accounts payable - (5,400)
(Decrease) increase in accrued expenses (600) 47,200
Increase (decrease) due to general partner and affiliates 73,700 (19,500)
Decrease in tenant deposits and other liabilities (700) (24,300)
------------------ ---------------
Net cash provided by operating activities 408,800 461,100
------------------ ---------------
Cash flows from investing activities:
Joint ventures' and limited partnerships' cash distributions 380,800 414,600
Increase in property held for sale (21,600) (37,600)
Proceeds from sale of property and other assets - 1,129,000
Investment in joint venture and limited partnerships (16,300) (16,100)
------------------ ----------------
Net cash provided by investing activities 342,900 1,489,900
------------------ ----------------
Cash flows from financing activities:
Cash distributions to partners (593,500) (591,200)
Repurchase of limited partnership units (71,200) (113,200)
Repayments of mortgage note payable - (1,340,000)
------------------ ----------------
Net cash used in financing activities (664,700) (2,044,400)
------------------ ----------------
Net decrease in cash and cash equivalents $ 87,000 $ (93,400)
Cash and cash equivalents at beginning of year 265,900 359,300
------------------ ----------------
Cash and cash equivalents at end of year $ 352,900 $ 265,900
================== ================
Supplemental disclosure of cash flow information:
Cash paid during the year for interest (none Capitalized) $ - $ 147,900
================== ================
</TABLE>
See accompanying notes to financial statements.
15
<PAGE>
WINDSOR PARK PROPERTIES 6
-------------------------
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE 1. THE PARTNERSHIP AND A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
----------------------------------------------------------------
The Partnership
- ---------------
Windsor Park Properties 6, A California Limited Partnership (the "Partnership"),
was formed in June 1988 for the purpose of acquiring and holding existing
manufactured home communities for investment. The general partners of the
Partnership are The Windsor Corporation, a California corporation ("TWC"), and
John A. Coseo, Jr. (together with TWC, the "General Partners"). In September
1997, Chateau Communities, Inc., a publicly held real estate investment trust
("Chateau"), purchased 100% of the outstanding shares of capital stock of TWC.
Pursuant to the Agreement of Limited Partnership (the "Partnership Agreement")
of the Partnership, the term of the Partnership expired on December 31, 1999.
As a result, in accordance with the terms of the Partnership Agreement and
California law, the "General Partners are required (i) to develop a plan of
liquidation for the Partnership's assets and to liquidate and dissolve the
Partnership or (ii) to take such steps as are necessary to extend the term of
the Partnership in order to enable it to continue as a going concern."
Accordingly, the General Partners have approved, and recommend that the
Partnership proceed with, a plan of liquidation (the "Plan of Liquidation"),
pursuant to which the Partnership will sell its wholly-owned property and its
partial ownership interests in five other properties (collectively, the
"Properties") to N'Tandem Trust, a California business trust ("N'Tandem"), and,
thereafter, make liquidating distributions to the partners in accordance with
the terms of the Partnership Agreement (together, the "Proposed Transactions").
The consummation of the Proposed Transactions is subject to the satisfaction of
certain conditions, including the approval of both proposals by a majority-in-
interest of the Partnership's Limited Partners. If the Proposed Transactions
are consummated, the Partnership will be liquidated and dissolved and
liquidating distributions will be made to Limited Partners in accordance with
the terms of the Partnership Agreement.
On March 22, 2000, the General Partners mailed to the Limited Partners a Consent
Solicitation Statement describing the Proposed Transactions and requesting the
consent of such Limited Partners to the Proposed Transactions. The General
Partners anticipate that if the Proposed Transactions are approved by the
Limited Partners, all of the Partnership's Properties will be sold on or before
June 30, 2000.
Property Held for Investment
- ----------------------------
During 1998, property held for investment was carried at cost unless facts and
circumstances indicated that the carrying value of the property may be impaired.
Impairment is determined by comparing the estimated future cash flows
(undiscounted and without interest charges) from an individual property to its
carrying value. If such cash flows are less than the property's carrying value,
the carrying value of the propety is written down to its estimated fair value.
No such writedowns were recorded for the year ended December 31, 1998.
Property Held for Sale
- ----------------------
During 1999, property held for sale was recorded at the lower of cost or net
realizable value and depreciated over various estimated useful lives (buildings
and improvements - 5 to 20 years; fixtures and equipment - 3 to 5 years) using
the straight-line method. When assets are sold or otherwise disposed of, the
cost and related accumulated depreciation are removed from the accounts, and any
gain or loss is included in net income. Repairs and maintenance are charged to
operations as incurred.
16
<PAGE>
Investments in Joint Ventures and Limited Partnerships
- ------------------------------------------------------
The investments in joint ventures are accounted for utilizing the equity method
as the properties are subject to joint control requiring approval or mutual
agreement of the investees. The investment in limited partnerships is also
accounted for utilizing the equity method as the limited partners have
significant rights.
Income Taxes
- ------------
Under provisions of the Internal Revenue Code of 1986, as amended, and the
California Revenue and Taxation Code, partnerships are generally not subject to
income taxes. The tax effect of any income or loss accrues to the individual
partners.
Basic and Diluted Earnings per Limited Partnership Unit
- -------------------------------------------------------
Basic and diluted earnings per limited partnership unit is calculated based on
the weighted average number of limited partnership units outstanding during the
year and the net income allocated, which is the same as income available, to the
Limited Partners. Basic and diluted earnings per limited partnership unit are
the same, as the Partnership has no dilutive securities. The weighted average
number of limited partnership units outstanding during the years ended December
31, 1999 and 1998 was 287,753 and 291,039, respectively.
Statements of Cash Flows
- ------------------------
For purposes of the statements of cash flows, the Partnership considers all
highly-liquid investments purchased with an original maturity of three months or
less to be cash equivalents.
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.
Revenue Recognition
- -------------------
Rental income is recognized when earned and due from residents. The leases
entered into by residents for the rental of a site are generally for terms not
longer than one year and renewable upon the consent of both parties or, in some
instances, as provided by statute.
NOTE 2. PARTNERSHIP AGREEMENT
---------------------
In accordance with the Partnership Agreement, the maximum liability of the
Limited Partners is the amount of their capital contributions. The number of
limited partnership units outstanding at December 31, 1999 and 1998 was 286,564
and 289,244, respectively, which represented capital contributions of
$28,656,400 and $28,924,400, respectively. During the years ended December 31,
1999 and 1998, the Partnership repurchased 2,630 and 4,043 units for $71,200 and
$113,200, respectively, from the limited partners. The General Partners owned
10 units at both December 31, 1999 and 1998.
The General Partners are entitled to receive from the Partnership various fees
and compensation which are summarized as follows:
Operational Stage
- -----------------
The 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.
17
<PAGE>
The Partnership reimburses TWC for certain direct expenses, and employee,
executive and administrative time incurred on the Partnership's behalf. The
Partnership was charged $23,300 and $32,000 for such costs during the years
ended December 31, 1999 and 1998, respectively. These costs are included in
property operating and general and administrative expenses in the accompanying
statements of operations. As of December 31, 1999, the Partnership owed TWC and
Chateau $83,900.
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% 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%, 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% cumulative, non-compounded
annual return (Preferred Return) on their original capital investments. No
commissions were paid to the general partners during the years ended December
31, 1999 and 1998.
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.
The General Partners generally receive 1% of profits and losses from the sale of
Partnership properties. However, if applicable, profits on sale will be first
allocated 100% to the General Partners to the extent of their negative capital
account.
During the years ended December 31, 1999 and 1998, the General Partners received
cash distributions of $6,100.
18
<PAGE>
NOTE 3. PROPERTY HELD FOR SALE
----------------------------
Property held for sale consists of one manufactured home community
summarized as follows:
<TABLE>
<CAPTION>
Name of Property Date Acquired Location
- ---------------------- ----------------- -----------------------
<S> <C> <C>
Chisholm Creek July 27, 1989 Wichita, Kansas
December 31, 1999
-------------------
Land $ 325,000
Buildings and improvements 2,467,200
Fixtures and equipment 38,500
-------------------
2,830,700
Less accumulated depreciation (1,282,800)
-------------------
$ 1,547,900
===================
</TABLE>
NOTE 4. INVESTMENTS IN JOINT VENTURES AND LIMTED PARTNERSHIPS
-----------------------------------------------------
The Partnership's investments in joint ventures consist of interests in three
manufactured home communities summarized as follows:
<TABLE>
<CAPTION>
Ownership
Name of Property Percentage Date Acquired Location
- ---------------- ---------- ------------- --------
<S> <C> <C> <C>
Town and Country Estates 58% January 17, 1989 Tucson, Arizona
Carefree Village 44% July 31, 1990 Tampa, Florida
Garden Walk 31% August 15, 1995 Palm Beach Gardens, Florida
</TABLE>
The Partnership's interests in its two remaining communities are owned through
an affiliated California limited partnership, which has the same General
Partners as the Partnership.
<TABLE>
<CAPTION>
Ownership
Name of Property Percentage Date Acquired Location
- ---------------- ---------- ------------- --------
<S> <C> <C> <C>
Rancho Margate 41% September 20, 1995 Margate, Florida
Winter Haven 41% October 11, 1995 Winter Haven, Florida
</TABLE>
19
<PAGE>
NOTE 4. INVESTMENTS IN JOINT VENTURES AND LIMTED PARTNERSHIPS (continued)
-----------------------------------------------------
The combined condensed financial position and results of operations of the joint
ventures and limited partnerships are as follows:
<TABLE>
<CAPTION>
December 31, 1999
-----------------
Financial Position:
- ------------------
<S> <C>
Property held for sale, net $ 26,624,200
Cash 206,800
Other assets 515,500
----------------
Total assets $ 27,346,500
================
Mortgage notes payable $ 15,887,800
Other liabilities 452,000
Total liabilities 16,339,800
Partners' equity 11,006,700
Total Liabilities and Partners' Equity $ 27,346,500
================
</TABLE>
<TABLE>
<CAPTION>
For the Year Ended December 31,
----------------------------------------
Results of Operations 1999 1998
- --------------------- ----------------------------------------
<S> <C> <C>
Property revenues $ 5,883,800 $ 5,696,600
--------------- ------------
Expenses:
Property operating 2,750,000 2,696,100
Interest 1,406,300 1,462,400
Depreciation 899,800 894,500
General and administrative 15,900 -
--------------- ------------
5,072,000 5,053,000
--------------- ------------
Net income $ 811,800 $ 643,600
--------------- ------------
</TABLE>
NOTE 5. MORTGAGE NOTE PAYABLE
---------------------
The Partnership had a $1,340,000 mortgage loan, collateralized by the Chisholm
Creek and Circle K properties. The loan was repaid in November 1998 from the
proceeds received from the sale of the Circle K property.
20
<PAGE>
NOTE 6. 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 the limited partners for the years ended December 31, 1999 and 1998 follows:
<TABLE>
<CAPTION>
1999 1998
-------------------- -----------------------
Per Per
Amount Unit Amount Unit
------ ---- ------ ----
<S> <C> <C> <C> <C>
Net income
Limited Partners $ 398,800 $1.39 $ 603,600 $2.07
Return of Capital 188,600 0.65 - -
Net income in Excess
of Distribution - - (18,500) (0.06)
--------- ----- -------- ----
Total distributions $ 587,400 $2.04 $ 585,100 $2.01
========= ===== ========= =====
</TABLE>
NOTE 7. FAIR VALUE OF FINANCIAL INSTRUMENTS
-----------------------------------
The carrying amounts of cash equivalents, other assets, accrued expenses and
other liabilities approximate fair value because of the short maturity of the
financial instruments.
NOTE 8. CONTINGENCIES
-------------
The Partnership, as an owner of real estate, is subject to various environmental
laws. Compliance by the Partnership with existing laws has not had a material
effect on the results of operations, financial condition or cash flows of the
Partnership, nor does management believe it will have a material impact in the
future.
The Partnership is jointly and severally liable for $15,887,600 of debt issued
by affiliated entities in which it has a joint venture or limited partnership
investment.
NOTE 9. RELATED PARTY TRANSACTIONS
--------------------------
Chateau and/or its predecessor have been providing property management services
to the Partnership since 1992. For this service, Chateau is paid a property
management fee, which is based on a percentage of actual gross receipts of the
properties. The total management fees paid to Chateau were $26,000 and $33,500
for the years ended December 31, 1999 and 1998, respectively. In addition
certain direct expenses are paid by Chateau on behalf of the Partnership and
then reimbursed by the Partnership. These amounts were $83,200 and $86,500 for
the years ended December 31, 1999 and 1998, respectively.
Item 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
---------------------------------------------------------------
FINANCIAL DISCLOSURE
--------------------
There were no disagreements over accounting or financial disclosure with the
independent accountants for the Partnership.
21
<PAGE>
PART III
- --------
Item 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS;
--------------------------------------------------------------
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
-------------------------------------------------
The General Partners of the Partnership are TWC and John A. Coseo, Jr.
In July 1994, TWC merged into Windsor Group, Inc., a majority-owned subsidiary.
In conjunction with the merger, Windsor Group, Inc. changed its name to TWC.
These entities were incorporated in 1977 and 1992, respectively, to engage in
the real estate syndication business. Historically, they have concentrated
solely on the acquisition, management, and sale of fully-developed manufactured
home communities through the investment programs which they sponsor.
The executive officers of TWC do not receive direct compensation from the
Partnership in these capacities and are only required to spend such time on the
Partnership's affairs as is deemed necessary. Substantial amounts of these
officers' time is spent on matters unrelated to the Partnership.
The names, ages, and nature of the positions held by the directors and executive
officers of TWC follow:
<TABLE>
<CAPTION>
Name Age Office
- ------------------------------------------ ------------ -------------------------------------------------------
<S> <C> <C>
Steven G. Waite 45 President and Director
Gary P. McDaniel 54 Director
C.G. Kellogg 56 Director
</TABLE>
A brief background of the general partners, directors and certain executive
officers of TWC follows.
Steven G. Waite (45) joined TWC in August 1997 as President. Since 1991, until
his involvement with Windsor, Mr. Waite served as Vice President/General Manager
of the Communities Division at Clayton Homes. He was responsible for the
original start up of this division, and subsequently built it into a successful
and profitable area of Clayton Homes, expanding from eight communities to 67
communities. In addition, Mr. Waite has over eight years of experience in the
manufactured home community-lending arena. He earned a Bachelor of Arts degree
from the University of Colorado and a Master of Business Administration from the
University of Alabama. Mr. Waite is active in the Manufactured Housing
Institute.
Gary P. McDaniel (54), a director of TWC, has been Chief Executive Officer and a
director of Chateau Communities, Inc. ("Chateau") since February 1997. He
served as the Chairman of the Board, President and Chief Executive Officer for
ROC Communities, Inc., which was merged with Chateau in 1997. Since 1993, he
has been an executive and shareholder of ROC and its predecessors since 1979,
and has been active in the manufactured home industry since 1972. Mr. McDaniel
is also a Trustee of N'Tandem; which is advised by TWC. Mr. McDaniel has been
active in several state and national manufactured home associations, including
associations in Florida and Colorado. In 1996, he was named "Industry Person of
the Year" by the National Manufactured Housing Industry Association. Mr.
McDaniel is on the Board of Directors of the Manufactured Housing Institute. He
is a graduate of the University of Wyoming and served as a Captain in the United
States Air Force.
C.G. ("Jeff") Kellogg (56) has been President and a director of Chateau since
its inception and was Chief Executive Officer of Chateau from its inception
to February 1997. For the five years preceding the formation of Chateau, Mr.
Kellogg was President and Chief Operating Officer of Chateau Estates. He is
extremely active in local and national industry associations, often in
leadership positions. Mr. Kellogg is a past President of the Michigan
Manufactured Housing Association and served on the Manufactured Housing
Institute's Community Operations Committee. He is a graduate of Michigan
Technological University with a B.S. in Civil Engineering.
John A. Coseo, Jr. (60) the other general partner of the Partnership was the
founder of TWC in 1977 and has
22
<PAGE>
been actively involved in all facets of the manufactured housing business since
that time. Mr. Coseo resigned from his position as a director and executive
officer of TWC in 1997. From 1979 to the present, Mr. Coseo has acted as general
partner or advisor in the acquisition and management of 56 manufactured home
communities throughout the United States. Mr. Coseo is a general partner of
seven limited partnerships which have registered their securities under the
Securities and Exchange Act of 1934.
Item 10. EXECUTIVE COMPENSATION
----------------------
The Partnership has not paid and does not propose to pay any remuneration or
retirement benefits to John A. Coseo, Jr. and the directors or executive
officers of TWC. Refer to Item 12 (Certain Relationships and Related
Transactions) for cash distributions and expense reimbursements paid to TWC by
the Partnership.
Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------------------------------------
(a) Security Ownership of Certain Beneficial Owners
No person is known by the Partnership to be the beneficial owner of
more than 5% of the Units.
(b) Security Ownership of Management
The following table presents certain information regarding the number
of Units owned, directly or indirectly, by (i) each General Partner
and (ii) all General Partners as a group as of December 31, 1999:
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Title of Class Beneficial Owner Beneficial Ownership Class
-------------------- ------------------------- -------------------- ----------
<S> <C> <C> <C>
Units of Limited John A. Coseo, Jr.
Partnership Interest A General Partner 10 0.300%
Units of Limited All General Partners -- -----
Partnership Interest As a group 10 0.300%
== =====
</TABLE>
Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------
The following table reflects all compensation accrued or paid to the General
Partners during the years ended December 31, 1999 and 1998.
<TABLE>
<CAPTION>
Form of Compensation and Enitity Receiving 1999 1998
- ------------------------------------------ ---------- ----------
<S> <C> <C>
Expense Reimbursement - TWC $ 23,300 $ 32,000
Cash Distributions - TWC 6,100 6,100
--------- -----------
$ 29,400 $ 38,100
========= ===========
</TABLE>
23
<PAGE>
Item 13. EXHIBITS AND REPORTS ON 8-K
----------------------------
(a) Exhibits and Index of Exhibits
(3) - Certificate and Agreement of Limited Partnership filed
as Exhibit A to Registration Statement No. 33-23183 and
incorporated herein by reference.
(27) - Financial Data Schedule
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the last
quarter of the period covered by this Form 10-KSB.
24
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 on this 30th day of
March 2000.
WINDSOR PARK PROPERTIES 6,
A California Limited Partnership by:
THE WINDSOR CORPORATION
By:/s/ Steven G. Waite
-----------------------------------
STEVEN G. WAITE
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
March 30, 2000
/s/ Steven G. Waite President of The Windsor Corporation, a
- ------------------------------ general partner of the Partnership
STEVEN G. WAITE
/s/Gary P. McDaniel Director of The Windsor Corporation, March 30, 2000
- ------------------------------ a general partner
GARY P. MCDANIEL
/s/C.G. Kellogg Director of The Windsor Corporation, March 30, 2000
- ------------------------------ a general partner
C.G. KELLOGG
/s/John A. Coseo, Jr. General Partner March 30, 2000
- ------------------------------
JOHN A. COSEO, JR.
</TABLE>
25
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 352,900
<SECURITIES> 0
<RECEIVABLES> 205,800
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,547,900
<DEPRECIATION> 0
<TOTAL-ASSETS> 6,708,500
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 6,708,500
<SALES> 0
<TOTAL-REVENUES> 867,200
<CGS> 0
<TOTAL-COSTS> 212,700
<OTHER-EXPENSES> 251,700
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 402,800
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 402,800
<EPS-BASIC> 1.39
<EPS-DILUTED> 1.39
</TABLE>
