<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly period ended September 30, 1995
------------------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ___________________ to _____________________
Commission file number 0-15699
-----------------------------------------------
WINDSOR PARK PROPERTIES 3, A CALIFORNIA LIMITED PARTNERSHIP
------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
California 33-0115651
- ------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
120 W. Grand Avenue, Suite 202, Escondido, California 92025
------------------------------------------------------------------
(Address of principal executive offices)
(619) 746-2411
----------------------------------------------------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes (x) No ( )
--- ----
1
<PAGE>
TABLE OF CONTENTS
PART I
------
Page
----
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
PART II
-------
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURE
2
<PAGE>
WINDSOR PARK PROPERTIES 3
-------------------------
(A California Limited Partnership)
BALANCE SHEET
-------------
(unaudited)
<TABLE>
<CAPTION>
September 30, 1995
-------------------
<S> <C>
ASSETS
- ------
Property held for investment:
Land $ 920,000
Buildings and improvements 3,207,300
Fixtures and equipment 82,400
-------------------
4,209,700
Less accumulated depreciation (2,180,300)
-------------------
2,029,400
Investments in joint ventures 959,700
Cash and cash equivalents 475,100
Other assets 63,800
-------------------
$ 3,528,000
===================
LIABILITIES AND PARTNERS' EQUITY
- --------------------------------
Liabilities:
Accounts payable $ 25,200
Accrued liabilities 74,000
Tenant deposits and other liabilities 51,300
-------------------
150,500
-------------------
Partners' equity:
Limited partners 3,923,400
General partners (545,900)
-------------------
3,377,500
-------------------
$ 3,528,000
===================
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
WINDSOR PARK PROPERTIES 3
-------------------------
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended September 30,
------------------------------------
1995 1994
----------------- ------------------
<S> <C> <C>
REVENUES
- --------
Rent and utilities $ 257,600 $ 246,800
Equity in earnings of joint ventures 13,300 2,900
Interest 3,100 2,800
Other 7,900 18,600
----------------- ------------------
281,900 271,100
----------------- ------------------
COSTS AND EXPENSES
- ------------------
Property operating costs 187,400 165,100
Depreciation and amortization 28,400 35,500
General and administrative:
Related parties 15,700 17,800
Other 11,600 9,900
Provision for estimated loss in value of
property held for investment 600,000
----------------- ------------------
243,100 828,300
----------------- ------------------
Net income (loss) $ 38,800 $ (557,200)
================= ==================
Net income (loss) - general partners $ 400 $ (5,600)
================= ==================
Net income (loss) - limited partners $ 38,400 $ (551,600)
================= ==================
Net income (loss) per limited partnership
unit $ 0.20 $ (2.75)
================= ==================
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
WINDSOR PARK PROPERTIES 3
-------------------------
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
------------------------------------
1995 1994
----------------- ------------------
<S> <C> <C>
REVENUES
- --------
Rent and utilities $ 754,900 $ 737,900
Equity in earnings of joint ventures 27,800 11,100
Interest 9,200 7,200
Other 28,800 43,800
----------------- ------------------
820,700 800,000
----------------- ------------------
COSTS AND EXPENSES
- ------------------
Property operating costs 516,900 512,600
Depreciation and amortization 82,700 106,200
General and administrative:
Related parties 50,200 56,000
Other 40,400 40,800
Interest 1,000
Provision for estimated loss in value of
property held for investment 600,000
----------------- ------------------
690,200 1,316,600
----------------- ------------------
Net income (loss) $ 130,500 $ (516,600)
================= ==================
Net income (loss) - general partners $ 1,300 $ (5,200)
================= ==================
Net income (loss) - limited partners $ 129,200 $ (511,400)
================= ==================
Net income (loss) per limited partnership
unit $ 0.65 $ (2.55)
================= ==================
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
WINDSOR PARK PROPERTIES 3
-------------------------
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
------------------------
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
--------------------------------
1995 1994
---------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 130,500 $ (516,600)
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Depreciation and amortization 82,700 106,200
Equity in earnings of joint ventures (27,800) (11,100)
Joint ventures' cash distributions 27,800 11,100
Loss on sale of property held for investment 300 900
Provision for estimated loss in value of
property held for investment 600,000
Changes in operating assets and liabilities:
Other assets 200 56,600
Accounts payable (13,400) 9,300
Accrued liabilities 21,800 (11,500)
Tenant deposits and other liabilities (8,000) (10,000)
---------------- ---------------
Net cash provided by operating activities 214,100 234,900
---------------- ---------------
Cash flows from investing activities:
Increase in property held for investment (86,700) (36,300)
Proceeds from sale of property held for
investment 1,100 400
Joint ventures' cash distributions 312,700 47,900
---------------- ---------------
Net cash provided by investing activities 227,100 12,000
---------------- ---------------
Cash flows from financing activities:
Cash distributions (221,000) (315,800)
Repurchase of limited partnership units (5,100) (12,700)
Repayment of note payable (10,000)
---------------- ---------------
Net cash used in financing activities (226,100) (338,500)
---------------- ---------------
Net increase (decrease) in cash and cash
equivalents 215,100 (91,600)
Cash and cash equivalents at beginning of
period 260,000 434,400
---------------- ---------------
Cash and cash equivalents at end of period $ 475,100 $ 342,800
================ ===============
Supplemental disclosure of cash flow
information:
Cash paid during the period for:
Interest (none capitalized) $ -- $ 1,000
================ ===============
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
WINDSOR PARK PROPERTIES 3
-------------------------
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE 1. BASIS OF PRESENTATION
---------------------
The balance sheet at September 30, 1995 and the related statements of operations
for the three and nine months ended September 30, 1995 and 1994 and the
statements of cash flows for the nine months ended September 30, 1995 and 1994
are unaudited. However, in the opinion of the General Partners, they contain all
adjustments, of a normal recurring nature, necessary for a fair presentation of
such financial statements. Interim results are not necessarily indicative of
results for a full year.
The financial statements and notes are presented as permitted by Form 10-QSB and
do not contain certain information included in the Partnership's annual
financial statements and notes. Certain 1994 amounts have been reclassified to
conform with the 1995 presentation.
NOTE 2. INVESTMENTS IN JOINT VENTURES
-----------------------------
The Partnership's investments in joint ventures consist of undivided interests
in two manufactured home communities. The combined condensed results of
operations of these properties for the nine months ended September 30, 1995 and
1994 follows:
<TABLE>
<CAPTION>
1995 1994
-------------- --------------
<S> <C> <C>
Total revenues $ 687,500 $ 610,300
-------------- --------------
Expenses:
Property operating 380,000 367,000
Depreciation 201,200 191,500
Interest 14,600 9,800
-------------- --------------
595,800 568,300
-------------- --------------
Net income $ 91,700 $ 42,000
============== ==============
</TABLE>
On September 15, 1995, the Partnership and Windsor Park Properties 4, an
affiliated limited partnership, obtained a $1,200,000 loan collateralized by the
Harmony Ranch manufactured home community, a jointly owned property. The loan
is payable in monthly interest only installments bearing interest at 90 day
LIBOR plus 2.95% (8.87% at September 30, 1995), and is due in September 2002.
The Partnership is contingently liable for the full amount of the loan.
NOTE 3. NET INCOME (LOSS) PER LIMITED PARTNERSHIP UNIT
----------------------------------------------
Net income (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 nine months ended September 30, 1995 was 200,167 and 200,218,
respectively; and 200,295 and 200,547 for the three and nine months ended
September 30, 1994, respectively.
7
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NOTE 4. RELATED PARTY TRANSACTIONS
--------------------------
The General Partners of the Partnership are The Windsor Corporation, a
California corporation, and John A. Coseo, Jr. (Mr. Coseo is also the president,
chief executive officer and the principal stockholder of The Windsor
Corporation.)
The General Partners and their affiliates are entitled to receive various fees
and compensation from the Partnership which are summarized as follows:
Operational Stage
- -----------------
The Partnership's investment properties were managed by Windsor Asset
Management, Inc. (WAMI), an affiliate of The Windsor Corporation, until November
1994. At that time, WAMI was merged into an independent property management
company. For management services, WAMI received 5 percent of gross property
receipts. During the three and nine months ended September 30, 1994, WAMI
received fees of $13,000 and $38,900, respectively. WAMI received no fees
during the three and nine months ended September 30, 1995.
The net profits and losses of the Partnership during the operational stage are
allocated 99 percent to the Limited Partners and 1 percent to the General
Partners. Cash distributions from operations are allocated 95 percent to the
Limited Partners and 5 percent to the General Partners.
The Partnership reimburses The Windsor Corporation and affiliates for certain
direct expenses, and employee, executive and administrative time, which are
incurred on the Partnership's behalf. The Partnership was charged $18,200 and
$20,200 for such costs during the three months ended September 30, 1995 and
1994, respectively; and $57,300 and $63,900 during the nine months ended
September 30, 1995 and 1994, respectively.
Liquidation Stage
- -----------------
The General Partners receive 1 percent of profits, losses, and cash
distributions from the sale or financing of Partnership properties. This
participation increases to 15 percent after the Limited Partners have received
their original invested capital plus a 9 percent cumulative, non-compounded
annual return.
During the three months ended September 30, 1995 and 1994, the General Partners
received cash distributions of $3,600 and $5,300, respectively; and $11,000 and
$15,800 for the nine months ended September 30, 1995 and 1994, respectively.
8
<PAGE>
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, 1995 and 1994
follows:
<TABLE>
<CAPTION>
1995 1994
--------------------------- ---------------------------
Per Per
Amount Unit Amount Unit
------ ---- ------ ----
<S> <C> <C> <C> <C>
Net income
- limited partners $ 129,200 $ 0.65 $ $
Return of capital 80,800 0.40 300,000 1.50
-------------- ----------- -------------- -----------
$ 210,000 $ 1.05 $ 300,000 $ 1.50
============== =========== ============== ===========
</TABLE>
9
<PAGE>
WINDSOR PARK PROPERTIES 3
-------------------------
(A California Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
Changes in Financial Condition
- ------------------------------
September 30, 1995 as compared to December 31, 1994
- ---------------------------------------------------
The Partnership's primary source of cash during the nine months ended September
30, 1995 was from the operations of its investment properties. The primary use
of cash during the same period was for cash distributions to partners.
In May 1995, through a proxy vote of the limited partners, an amendment to the
Agreement of Limited Partnership was approved permitting the financing of
currently owned manufactured home communities and the reinvestment of financing
proceeds into newly acquired manufactured home communities to be purchased with
permanent mortgage financing. Overall Partnership mortgage financing will not
exceed 55% of the value of existing and newly acquired properties.
The General Partners are currently evaluating financing proposals and new
property acquisitions. It is currently anticipated that existing properties
will be financed and new properties acquired by early 1996.
Partners' equity decreased from $3,473,100 at December 31, 1994 to $3,377,500 at
September 30, 1995, as a result of $221,000 in cash distributions to partners
and $5,100 for repurchased limited partnership units, offsetting $130,500 in net
income.
The future sources of cash for the Partnership will be provided from property
operations, cash reserves, possibly mortgage financing, and ultimately from the
sale of property. The future uses of cash will be for Partnership
administration, capital expenditures, distributions to partners and possibly
debt service and the acquisition of additional investment properties. The
General Partners believe that the future sources of cash are sufficient to meet
the working capital requirements of the Partnership for the foreseeable future.
Results of Operations
- ---------------------
Three months ended September 30, 1995 as compared to three months ended
- -----------------------------------------------------------------------
September 30, 1994
- ------------------
The Partnership realized net income of $38,800 ($0.20 per limited partnership
unit) for the three months ended September 30, 1995 and incurred a net loss of
$557,200 ($2.75 per limited partnership unit) for the three months ended
September 30, 1994.
Rent and utilities revenues increased from $246,800 in 1994 to $257,600 in 1995.
The overall occupancy at the Partnership's four wholly-owned properties
increased from 72% at September 30, 1994 to 78% at September 30, 1995. Also, $5
per month rent increases were implemented at Little Eagle and Shady Hills
effective January 1995 and May 1995, respectively.
Equity in earnings of joint ventures, which reflects the Partnership's share of
the net income of Big Country Estates and Harmony Ranch manufactured home
communities, was $13,300 and $2,900 for the three months ended September 30,
1995 and 1994, respectively. The increase in 1995 is due primarily to an
increase in overall occupancy for both properties - from 84% at September 30,
1994
10
<PAGE>
to 89% at September 30, 1995. In addition, Harmony Ranch implemented an $8 per
month rent raise effective October 1994.
Property operating costs increased from $165,100 in 1994 to $187,400 in 1995 due
mainly to higher utilities and repairs and maintenance expenses.
In September 1994, the Partnership provided $600,000 for an estimated loss in
value of The Pines manufactured home community. The provision was made after a
management review of the property and local market indicated that an impairment
in the value of the property had occurred. The provision was measured as the
difference between the carrying value of the property and its estimated future
undiscounted cash flows. Factors considered and judgements made in estimating
future cash flows included current and future occupancy rates, future rent
raises, changes in operating expenses, the forecasted holding period and the
estimated property selling price.
Depreciation and amortization expense decreased from $35,500 in 1994 to $28,400
in 1995. The decrease is due mainly to the $600,000 provision for estimated
loss in value of The Pines manufactured home community recorded in September
1994. A portion of the provision was allocated to the depreciable basis of the
property, thereby reducing future depreciation expense.
Nine months ended September 30, 1995 as compared to nine months ended September
- -------------------------------------------------------------------------------
30, 1994
- --------
The Partnership realized net income of $130,500 ($0.65 per limited partnership
unit) for the nine months ended September 30, 1995 and incurred a net loss of
$516,600 ($2.55 per limited partnership unit) for the nine months ended
September 30, 1994.
Rent and utilities revenues increased from $737,900 in 1994 to $754,900 in 1995
due to occupancy increases and rent raises discussed previously.
Equity in earnings of joint ventures, which reflects the Partnership's share of
the net income of Big Country Estates and Harmony Ranch manufactured home
communities was $27,800 and $11,100 for the nine months ended September 30, 1995
and 1994, respectively. The reasons for the increase were previously discussed.
Property operating costs increased from $512,600 in 1994 to $516,900 in 1995,
due mainly to higher wages and repairs and maintenance expenses.
In September 1994, the Partnership provided $600,000 for an estimated loss in
value of The Pines manufactured home community, as discussed previously.
Depreciation and amortization expense decreased from $106,200 in 1994 to $82,700
in 1995 for the reason discussed previously.
11
<PAGE>
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 10-QSB.
12
<PAGE>
SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
WINDSOR PARK PROPERTIES 3,
A California Limited Partnership
---------------------------------
(Registrant)
By: The Windsor Corporation, General Partner
By /s/John A. Coseo, Jr.
------------------------------------------
JOHN A. COSEO, JR.
Chief Financial Officer
(Principal Accounting Officer)
Date: November 6, 1995
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET OF WINDSOR PARK PROPERTIES 3 AT SEPTEMBER 30, 1995 AND THE RELATED
STATEMENTS OF OPERATIONS AND OF CASH FLOWS FOR THE NINE MONTHS THEN ENDED AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<EXCHANGE-RATE> 1
<CASH> 475,100
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 4,209,700
<DEPRECIATION> 2,180,300
<TOTAL-ASSETS> 3,528,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 3,377,500<F1>
<TOTAL-LIABILITY-AND-EQUITY> 3,528,000
<SALES> 0
<TOTAL-REVENUES> 820,700
<CGS> 0
<TOTAL-COSTS> 516,900
<OTHER-EXPENSES> 173,300
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 130,500
<INCOME-TAX> 0
<INCOME-CONTINUING> 130,500
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 130,500
<EPS-PRIMARY> 0.65<F2>
<EPS-DILUTED> 0
<FN>
<F1>Limited and general partners equity.
<F2>Net income per limited partnership unit.
</FN>
</TABLE>
