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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB/A
(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, 1999
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _____________ to _____________
Commission file number 0-15699
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WINDSOR PARK 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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6160 So. Syracuse Way, Greenwood Village, Colorado 80111
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(Address of principal executive offices)
(303) 741-3707
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(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes (x) No ( )
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Transitional small business disclosure format (check one): Yes [ ] No [X]
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TABLE OF CONTENTS
PART I
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Page
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Item 1. Financial Statements 2
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II
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Item 6. Exhibits and Reports on Form 8-K 10
SIGNATURE 11
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PART I
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Certain matters discussed under the Management's Discussion and Analysis of
Financial Condition and Results of Operations and elsewhere in this Quarterly
Report on Form 10-QSB/A 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 Windsor Park Properties 3, a
California Limited Partnership, to be materially different from any future
results, performance or achievements expressed or implied by such forward-
looking statements.
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Item 1. Financial Statements
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WINDSOR PARK PROPERTIES 3
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(A California Limited Partnership)
BALANCE SHEET
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(unaudited)
<TABLE>
<CAPTION>
March 31, 1999
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ASSETS
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<S> <C>
Property held for investment:
Land $ 974,500
Buildings and improvements 4,764,000
Fixtures and equipment 132,900
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5,871,400
Less accumulated depreciation (2,503,800)
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3,367,600
Property held for sale, net 443,700
Investments in joint ventures and limited partnerships 1,230,200
Cash and cash equivalents 627,600
Deferred financing costs 85,100
Other assets 118,400
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Total Assets $ 5,872,600
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LIABILITIES AND PARTNERS' EQUITY
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Liabilities:
Mortgage notes payable $ 2,970,400
Accrued expenses 242,500
Due to General Partners and affiliates 67,700
Tenant deposits and other liabilities 42,300
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Total Liabilities 3,322,900
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Partners' equity:
Limited partners 2,608,600
General partners (58,900)
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2,549,700
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Total Liabilities and Partner's Equity $ 5,872,600
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</TABLE>
See accompanying notes to financial statements.
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WINDSOR PARK PROPERTIES 3
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(A California Limited Partnership)
STATEMENTS OF OPERATIONS
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(unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
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1999 1998
REVENUES
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<S> <C> <C>
Rent and utilities $ 431,300 $ 415,200
Equity in earnings of joint ventures and limited partnerships 200 9,000
Interest 6,000 7,600
Other 9,000 11,000
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446,500 442,800
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COSTS AND EXPENSES
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Property operating 245,900 232,600
Interest 70,000 69,900
Depreciation and amortization 57,800 52,200
General and administrative:
Related parties 6,600 10,200
Other 16,700 15,200
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397,000 380,100
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Net income $ 49,500 $ 62,700
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Net income - general partners $ 500 $ 600
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Net income - limited partners $ 49,000 $ 62,100
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Basic and dilutive earnings per limited partnership unit $ .26 $ 0.32
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See accompanying notes to financial statements.
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WINDSOR PARK PROPERTIES 3
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(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
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(unaudited)
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<CAPTION>
Three Months Ended March 31,
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1999 1998
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Cash flows from operating activities:
<S> <C> <C>
Net income $ 49,500 $ 62,700
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 57,800 52,200
Equity in earnings of joint ventures and limited partnerships (200) (9,000)
Joint ventures' and limited partnerships cash distributions 200 9,000
Amortization of deferred financing costs 4,900 5,100
Changes in operating assets and liabilities:
(Increase) decrease in other assets (16,800) (29,100)
Accounts payable (5,200) (7,000)
Increase (decrease) in accrued expenses 28,400 55,400
Due to General Partners and affiliates 43,500 (5,600)
(Decrease) increase in tenant deposits and other liabilities (100) (20,800)
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Net cash provided by operating activities 162,000 112,900
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Cash flows from investing activities:
Increase in property held for investment (56,500) (24,300)
Joint ventures' and limited partnerships cash distributions 25,800 49,800
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Net cash provided by (used in) investing activities (30,700) 25,500
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Cash flows from financing activities:
Cash distributions (140,600) (142,400)
Repurchase of limited partnership units (3,900) (8,200)
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Net cash used in by financing activities (144,500) (150,600)
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Net decrease in cash and cash equivalents (13,200) (12,200)
Cash and cash equivalents at beginning of period 640,800 586,100
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Cash and cash equivalents at end of period $ 627,600 $ 573,900
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See accompanying notes to financial statements.
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WINDSOR PARK PROPERTIES 3
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(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
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NOTE 1. THE PARTNERSHIP
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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. , a publicly
held real estate investment trust, ("Chateau"), 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.
The General Partners are currently exploring possible strategic alternatives for
the Partnership with a view towards providing limited partners with the
opportunity to achieve liquidity in their investment. There can, however, be no
assurances that any such strategic alternative will be consummated or that the
Partnership will not continue in its current form until the end of its stated
term.
NOTE 2. BASIS OF PRESENTATION
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The balance sheet at March 31, 1999 and the related statements of operations for
the three months ended March 31, 1999 and 1998 and the statements of cash flows
for the three months ended March 31, 1999 and 1998 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/A for the year ended December 31,
1998.
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NOTE 3. INVESTMENTS IN JOINT VENTURES AND LIMITED PARTNERSHIPS
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The Partnership's investments in joint ventures and limited partnerships consist
of interests in four manufactured home communities at March 31, 1999. The
combined condensed results of operations of the joint venture and limited
partnership properties for the three months ended March 31, 1999 and 1998 are as
follows:
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Total revenues $ 435,200 $ 466,200
Expenses:
Property operating 224,700 219,500
Depreciation 117,700 110,900
Interest 94,700 117,200
General and administrative 2,100 2,100
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439,200 449,700
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Net income $ (4,000) $ 16,500
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NOTE 4. BASIC AND DILUTIVE EARNINGS PER LIMITED PARTNERSHIP UNIT
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Basic and dilutive earnings 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, 1999 and 1998 was 190,196 and 193,309 respectively.
NOTE 5. DISTRIBUTIONS TO LIMITED PARTNERS
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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, 1999 and 1998 is as
follows:
<TABLE>
<CAPTION>
1999 1998
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Per Per
Amount Unit Amount Unit
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<S> <C> <C> <C> <C>
Net income
- limited partners $ 49,000 $ .26 $ 62,100 $ 0.32
Return of capital 84,300 .44 77,900 0.40
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$ 133,300 $ .70 $ 140,000 $ 0.72
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</TABLE>
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NOTE 6. SUBSEQUENT EVENT
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On April 1, 1999, Windsor Park Properties 3, a California Limited Partnership
(the "Partnership"), sold Little Eagle, a manufactured home community containing
96 homesites located in Indianapolis, Indiana, and nine mobile home units to
Floral Park Cemetery Association, the terms of which were determined through
arms-length negotiations between the parties. The aggregate purchase price paid
for Little Eagle and the nine mobile home units was $925,000, net of selling
expenses of approximately $90,000.
The sale resulted in a net gain on sale of approximately $426,000. In
connection with the sale, the Partnership obtained a $400,000 term loan and paid
off a related mortgage note payable of approximately $1,800,000, resulting in an
extraordinary loss on early extinguishment of debt of approximately $18,000.
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Item 2.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
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CONDITION AND RESULTS OF OPERATIONS
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Three months ended March 31, 1999 as compared to three months ended March 31,
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1998
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The following discussion should be read in conjunction with the financial
statements and Notes thereto included elsewhere in this Form 10-QSB/A.
Results of Operations
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The Partnership realized net income of $49,500 and $62,700 for the three months
ended March 31, 1999 and 1998, respectively. Net income per limited partnership
unit was $0.26 in 1999 and $0.32 in 1998 respectively.
Rent and utilities revenues increased from $415,200 in 1998 to $431,300 in 1999
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
1999. Equity in earnings of joint ventures and limited partnerships decreased
from $9,000 in 1998 to $200 in 1999 primarily due to a reduction in net income
at Big Country, due to lower occupancy and increased utility expenses.
Interest expense remained relatively constant at $70,000 in 1999 and $69,900 in
1998.
General and administrative expenses remained relatively constant at $23,300 in
1999 and $25,400 in 1998.
Liquidity and Capital Resources
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The Partnership's principal sources of liquidity during the three months ended
March 31, 1999 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 $162,000 for the
three months ended March 31, 1999. At March 31, 1999, the Partnership's cash
amounted to $627,600.
The Partnership's primary uses of its capital resources during the same periods
were for cash distributions to partners. Cash distributions to partners totaled
$140,600 for the three months ended March 31, 1999.
The Partnership's principal long-term liquidity requirement will be the
repayment of principal on its outstanding mortgage debt. At March 31, 1999 the
Partnership's total mortgage debt, including its proportionate share of joint
venture and limited partnership debt, was $4,140,000, consisting of $3,270,400
of fixed rate debt and $869,600 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, 1999. The Partnership and the affiliated entities are contingently
liable for the full amounts of the loans obtained jointly through joint ventures
and limited partnerships.
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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, 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 requirement through the sale of its communities
and investments in joint ventures and limited partnerships, and cash reserves.
Inflation
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All of the leases or terms of tenants' occupancies at the properties allow for
at least annual rental adjustments. In addition, all of the leases 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
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The general partners have assessed the impact of the year 2000 issue on its
reporting systems and operations. The year 2000 issue exists because many
computer systems and applications abbreviate dates by eliminating the first two
digits of the year, assuming that these two digits are always "19". As a
result, date-sensitive computer programs may recognize a date using "00" as the
year 1900 rather than the year 2000. Unless corrected, the potential exists for
computer system failures or incorrect processing of financial and operational
information, which could disrupt operations.
Substantially all of the computer systems and applications and operating systems
in use in use by the Windsor Corporation and the properties have been, or are in
the process of being upgraded and modified. The Partnership is of the opinion
that, in connection with those upgrades and modifications, it has addressed
applicable year 2000 issues as they might affect the computer systems and
applications located in the Partnership's offices and properties. The
Partnership anticipates that implementation of solutions to any year 2000 issue
which it may discover will require the expenditure of sums which the Partnership
does not expect to be material.
The Partnership is exposed to the risk that one or more of its vendors or
service providers may experience year 2000 problems which impact the ability of
such vendor or service provider to provide goods and services. Due to the
availability of alternative suppliers, this is not considered as significant a
risk with respect to the suppliers of goods. The disruption of certain
services, however, such as utilities, could, depending upon the extent of the
disruption, have a material adverse impact on the Partnership's operations. To
date, the Partnership is not aware of any vendor or service provider year 2000
issue that management believes would have a material adverse impact on the
Partnership's operations. The Partnership, however, has no means of ensuring
that its vendors or service providers will be year 2000 ready. The inability of
vendors or service providers to complete the year 2000 resolution process in a
timely fashion could have an adverse impact on the Partnership and the effect of
non-compliance by vendors or service providers is not determinable at this time.
Residents who pay rent to the Partnership do not pose year 2000 problems for the
Partnership given the type and nature of the Partnership's properties and
residents.
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Widespread disruptions in the national or international economy, including
disruptions affecting the financial markets, resulting from year 2000 issues, or
in certain industries, such as commercial or investment banks, could also have
an adverse impact on the Partnership. The likelihood and effect of such
disruptions is not determinable at this time.
Management expects to have all systems appropriately modified before any
significant processing malfunctions could occur and does not expect the year
2000 issue will materially impact the financial condition or operations of the
Partnership.
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PART II
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Item 6. EXHIBITS AND REPORTS ON FORM 8-K
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(a) Exhibits and Index of Exhibits
(3) Certificate and Agreement of Limited Partnership filed as
Exhibit A to Registration Statement No. 2-99697 and
incorporated herein by reference.
(27) Financial Data Schedule
(b) Reports on Form 8-K
Form 8-K filed with the Commission on April 13, 1999.
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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
By: The Windsor Corporation, its general partner
By /s/ Steven G. Waite
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STEVEN G. WAITE
President
Date: February 3, 2000
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