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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 March 31, 1998
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
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Commission file number 0-15699
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WINDSORPARK PROPERTIES 3, A CALIFORNIA LIMITED PARTNERSHIP
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(Exact name of small business issuer as specified in its charter)
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<S> <C>
California 33-0115651
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(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)
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6430 South Quebec Street, Englewood, Colorado 80111
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(Address of principal executive offices)
(303) 741-3707
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(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [x] No [ ]
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 8
PART II
Item 6. Exhibits and Reports on Form 8-K 9
SIGNATURE 10
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WINDSOR PARK PROPERTIES 3
(A California Limited Partnership)
BALANCE SHEET
(unaudited)
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<CAPTION>
March 31, 1998
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ASSETS
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Property held for investment:
Land $ 1,192,600
Buildings and improvements 5,217,400
Fixtures and equipment 124,700
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6,534,700
Less accumulated depreciation (2,656,800)
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3,877,900
Investments in joint ventures and limited partnerships 1,373,600
Cash and cash equivalents 573,900
Deferred financing costs 104,900
Other assets 99,900
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Total Assets $ 6,030,200
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LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Mortgage notes payable $ 2,970,400
Accounts payable 28,100
Accrued expenses 154,400
Due to General Partners and affiliates 64,700
Tenant deposits and other liabilities 41,700
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Total Liabilities 3,259,300
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Partners' equity:
Limited partners 2,816,900
General partners (46,000)
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2,770,900
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Total Liabilities and Partner's Equity $ 6,030,200
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WINDSOR PARK PROPERTIES 3
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
(unaudited)
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<CAPTION>
Three Months Ended March 31,
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1998 1997
REVENUES
<S> <C> <C>
Rent and utilities $ 415,200 $ 395,500
Equity in earnings of joint ventures and limited partnerships 9,000 17,000
Interest 7,600 10,800
Other 11,000 11,800
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442,800 435,100
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COSTS AND EXPENSES
Property operating 232,600 225,500
Interest 69,900 70,000
Depreciation and amortization 52,200 49,600
General and administrative:
Related parties 10,200 18,700
Other 15,200 $ 11,200
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380,100 $ 375,000
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Net income $ 62,700 $ 60,100
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Net income - general partners $ 600 $ 600
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Net income - limited partners $ 62,100 $ 59,500
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Basic and dilutive earnings per limited partnership unit S 0.32 $ 0.30
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See accompanying notes to financial statements.
4
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WINDSOR PARK PROPERTIES 3
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
(unaudited)
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Three Months Ended March 31,
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1998 1997
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<S> <C> <C>
Cash flows from operating activities:
Net income $ 62,700 $ 60,100
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 52,200 49,600
Equity in earnings of joint ventures and limited partnerships (9,000) (17,000)
Joint ventures' and limited partnerships cash distributions 9,000 17,000
Amortization of deferred financing costs 5,100 5,000
Changes in operating assets and liabilities:
(Increase) decrease in other assets (29,100) 107,200
Accounts payable (7,000) (6,000)
Increase (decrease) in accrued expenses 55,400 (28,300)
Due to General Partners and affiliates (5,600) 0
(Decrease) increase in tenant deposits and other liabilities (20,800) 400
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Net cash provided by operating activities 112,900 188,000
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Cash flows from investing activities:
Investment in joint ventures and limited partnerships 0 (636,200)
Increase in property held for investment (24,300) (10,000)
Joint ventures' and limited partnerships cash distributions 49,800 35,300
Proceeds from sale of property held for investment 0 500
Due from affiliates 0 (244,000)
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Net cash provided by (used in) investing activities 25,500 (854,400)
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Cash flows from financing activities:
Cash distributions (142,400) (147,400)
Repurchase of limited partnership units (8,200) (7,300)
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Net cash used in by financing activities (150,600) (154,700)
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Net decrease in cash and cash equivalents (12,200) (821,100)
Cash and cash equivalents at beginning of period 586,100 1,191,800
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Cash and cash equivalents at end of period $ 573,900 $ 370,700
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See accompanying notes to financial statements.
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WINDSOR PARK PROPERTIES 3
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. THE PARTNERSHIP
Windsor Park Properties 3, A California Limited Partnership ("the Partnership"),
was formed in August 1985 for the purpose of acquiring and holding existing
manufactured home communities for investment. The General Partners of the
Partnership are The Windsor Corporation ("TWC"), a California corporation, and
John A. Coseo, Jr. In September 1997, Chateau Communities, Inc. ("Chateau"), a
publicly held real estate investment trust, purchased 100 percent of the shares
of the Windsor Corporation.
The Partnership was funded through a public offering of 200,000 limited
partnership units at $100 per unit which commenced in October 1985 and
terminated in September 1986. The Partnership term is set to expire in December
1999; however, the Partnership may either be dissolved earlier or extended under
certain circumstances. The Partnership may be extended at the recommendation of
the General Partners with approval of a majority of the Limited Partners.
NOTE 2. BASIS OF PRESENTATION
The balance sheet at March 31, 1998 and the related statements of operations for
the three months ended March 31, 1998 and 1997 and the statements of cash flows
for the three months ended March 31, 1998 and 1997 are unaudited. However, in
the opinion of the General Partners, they contain all adjustments, of a normal
recurring nature, necessary for a fair presentation of such financial
statements. Interim results are not necessarily indicative of results for a full
year.
The financial statements and notes are presented as permitted by Form 10-QSB and
do not contain certain information included in the Partnership's annual
financial statements and notes on form 10-KSB for the year ended December 31,
1997.
NOTE 3. INVESTMENTS IN JOINT VENTURES AND LIMITED PARTNERSHIPS
The Partnership's investments in joint ventures and limited partnerships consist
of interests in four manufactured home communities at March 31, 1998. The
combined condensed results of operations of the joint venture and limited
partnership properties for the three months ended March 31, 1998 and 1997 are as
follows:
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1998 1997
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Total revenues $ 466,200 $ 346,900
Expenses:
Property operating 219,500 160,200
Depreciation 110,900 80,400
Interest 117,200 57,000
General and administrative 2,100 0
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449,700 297,600
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Net income $ 16,500 $ 49,300
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NOTE 4. BASIC AND DILUTIVE EARNINGS 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 months ended March 31,
1998 and 1997 was 193,309 and 196,314, respectively.
In 1997, the Partnership adopted Statement of Financial Accounting Standards
No. 128 (SFAS 128), "Earnings Per Share." This accounting standard specifies
new computation, presentation, and disclosure requirements for earnings per
share to be applied retroactively. Among other things, SFAS 128 requires
presentation of basic and diluted earnings per share on the face of the income
statement. The adoption of SFAS 128 had no effect on the per unit results
previously reported.
NOTE 5. DISTRIBUTIONS TO LIMITED PARTNERS
Distributions to limited partners in excess of net income allocated to limited
partners are considered a return of capital. A breakdown of cash distributions
to limited partners for the three months ended March 31, 1998 and 1997 follows:
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<CAPTION>
1998 1997
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Per Per
Amount Unit Amount Unit
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<S> <C> <C> <C> <C>
Net income
- - limited partners $ 62,100 $ 0.32 $ 59,500 $ 0.30
Return of capital 77,900 0.40 80,500 0.41
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$ 140,000 $ 0.72 $ 140,000 $ .071
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WINDSOR PARK PROPERTIES 3
(A California Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Three months ended March 31, 1998 as compared to three months ended March 31,
1997
Results of Operations
The results of operations for the three months ended March 31, 1998 and 1997 are
not directly comparable due to the purchase of interests in the Apache East
Estates and Denali Park Estates communities in February 1997. The Partnership
realized net income of $62,700 and $60,100 for the three months ended March 31,
1998 and 1997, respectively. Net income per limited partnership unit was $0.32
in 1998 and $0.30 in 1997 respectively.
Rent and utilities revenues increased from $395,500 in 1997 to $415,200 in 1998
due to rent increases realized at the properties.
Equity in earnings of joint ventures and limited partnerships represents the
Partnership's share of the net income of four manufactured home communities in
1998. Equity in earnings of joint ventures and limited partnerships decreased
from 17,000 in 1997 to $9,000 in 1998 primarily due to the losses realized at
Apache East and Denali Park.
Interest income decreased from $10,800 in 1997 to $7,600 in 1998 due mainly to
lower cash balances maintained by the Partnership.
Interest expense remained relatively constant at $70,000 in 1997 and $69,900 in
1998.
General and administrative expenses decreased from $29,900 in 1997 to $25,400 in
1998 due mainly to lower employee time charges from the General Partners.
Changes in Financial Condition
The Partnership's primary sources of cash during the three months ended March
31, 1998 were from the operations of its investment properties and cash
distributions from joint ventures. The primary uses of cash during the same
period were for cash distributions to partners.
No further investment property acquisitions are planned by the General Partners.
At March 31, 1998 the Partnership's total mortgage debt, including its
proportionate share of joint venture and limited partnership debt, was
$4,152,000, consisting of $3,270,400 of fixed rate debt and $881,600 of variable
rate debt. The average rate of interest on the fixed and variable rate debt was
8.8% and 8.4%, respectively, at March 31, 1998.
The future sources of cash for the Partnership will be provided from property
operations, cash reserves and ultimately from the sale of property. The future
uses of cash will be for Partnership administration, capital expenditures and
distributions to partners. The General Partners believe that the future sources
of cash are sufficient to meet the working capital requirements of the
Partnership for the foreseeable future.
In 1997, the Partnership adopted Statement of Financial Accounting Standards
No. 128 (SFAS 128), "Earnings Per Share." This accounting standard specifies
new computation, presentation, and disclosure requirements for earnings per
share to be applied retroactively. Among other things, SFAS 128 requires
presentation of basic and diluted earnings per share on the face of the income
statement. The adoption of SFAS 128 had no effect on the per unit results
previously reported.
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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
Form 8-K filed with the Commission on January 27, 1998.
Form 8-K/A filed with the Commission on February 3, 1998.
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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 3,
A California Limited Partnership
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(Registrant)
By: The Windsor Corporation, General Partner
By /s/ Steven G. Waite
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STEVEN G. WAITE
President
Date: May 13, 1998
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EXHIBIT INDEX
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Exhibit No. Description
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<S> <C>
27 Financial Data Schedule
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<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 573,900
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 6,534,700
<DEPRECIATION> 2,656,800
<TOTAL-ASSETS> 6,030,200
<CURRENT-LIABILITIES> 288,900
<BONDS> 2,970,400
0
0
<COMMON> 0
<OTHER-SE> 2,770,900
<TOTAL-LIABILITY-AND-EQUITY> 6,030,200
<SALES> 0
<TOTAL-REVENUES> 442,800
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 310,200
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 69,900
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 62,700
<EPS-PRIMARY> 0.32
<EPS-DILUTED> 0.32
</TABLE>
