<PAGE>
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 September 30, 1999
----------------------
[ ] 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)
6160 So. Syracuse Way, Greenwood Village, Colorado 80111
---------------------------------------------------------
(Address of principal executive offices)
(303) 741-3707
-----------------------------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes (x) No ( )
--- ----
Transitional small business disclosure format (check one): Yes [ ] No [X]
<PAGE>
TABLE OF CONTENTS
PART I
------
Page
----
Item 1. Financial Statements 2
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 11
SIGNATURE 12
<PAGE>
PART I
------
Certain matters discussed under "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.
1
<PAGE>
Item 1. Financial Statements
- ------
<TABLE>
<CAPTION>
WINDSOR PARK PROPERTIES 3
-------------------------
(A California Limited Partnership)
BALANCE SHEET
-------------
(unaudited)
September 30, 1999
--------------------------------
ASSETS
- ------
<S> <C>
Property held for investment:
Land $ 974,500
Buildings and improvements 4,824,600
Fixtures and equipment 155,700
--------------------------------
5,954,800
Less accumulated depreciation (2,605,300)
--------------------------------
3,349,500
Investments in joint ventures and limited partnerships 1,211,700
Cash and cash equivalents 46,900
Deferred financing costs 26,100
Other assets 94,700
--------------------------------
Total Assets $ 4,728,900
================================
LIABILITIES AND PARTNERS' EQUITY
- --------------------------------
Liabilities:
Mortgage notes payable $ 1,170,400
Term loan payable 400,000
Accrued expenses 245,700
Due to General Partners and affiliates 59,000
Tenant deposits and other liabilities 38,000
--------------------------------
Total Liabilities 1,913,100
--------------------------------
Partners' equity:
Limited partners 2,877,500
General partners (61,700)
--------------------------------
2,815,800
--------------------------------
Total Liabilities and Partner's Equity $ 4,728,900
================================
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
WINDSOR PARK PROPERTIES 3
-------------------------
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
(unaudited)
Three Months Ended September 30,
--------------------------------------------------------
1999 1998
---------------------------- ------------------------
REVENUES
- --------
<S> <C> <C>
Rent and utilities $ 380,500 $ 423,500
Equity in earnings of joint ventures and limited 8,900 6,200
partnerships
Interest 0 7,000
Other 14,200 29,800
---------------------------- ------------------------
403,600 466,500
---------------------------- ------------------------
COSTS AND EXPENSES
- ------------------
Property operating 215,400 254,300
Interest 43,000 69,900
Depreciation and amortization 49,600 52,200
General and administrative:
Related parties 7,700 8,800
Other 40,900 13,800
---------------------------- ------------------------
356,600 399,000
---------------------------- ------------------------
Net income $ 47,000 $ 67,500
============================ ========================
Net income - general partners $ 500 $ 700
============================ ========================
Net income - limited partners $ 46,500 $ 66,800
============================ ========================
Basic and diluted earnings per limited partnership
unit $ 0.25 $ 0.35
============================ ========================
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
WINDSOR PARK PROPERTIES 3
-------------------------
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
(unaudited)
Nine Months Ended September 30,
----------------------------------------------------------------
1999 1998
------------------------------- ---------------------------
REVENUES
- --------
<S> <C> <C>
Rent and utilities $ 1,198,600 $ 1,261,900
Equity in earnings of joint ventures and limited partnerships 23,700 18,300
Interest 6,000 20,700
Gain on sale of property 424,600 0
Other 30,900 50,100
------------------------------- ---------------------------
1,683,800 1,351,000
------------------------------- ---------------------------
COSTS AND EXPENSES
- ------------------
Property operating 690,500 738,500
Interest 151,700 209,800
Depreciation and amortization 161,700 156,600
General and administrative:
Related parties 18,500 27,900
Other 79,200 43,700
------------------------------- ---------------------------
1,101,600 1,176,500
------------------------------- ---------------------------
Income before extraordinary item 582,200 174,500
Extraordinary loss from early extinguishment of debt 74,600 0
------------------------------- ---------------------------
Net income $ 507,600 $ 174,500
=============================== ===========================
Net income - general partners $ 5,100 $ 1,700
=============================== ===========================
Net income - limited partners $ 502,500 $ 172,800
=============================== ===========================
Basic and diluted earnings per limited partnership unit:
Income before extraordinary item $ 2.65 $ 0.90
Extraordinary loss from early extinguishment of debt (.39) 0
------------------------------- ---------------------------
Net income - limited partners $ 2.26 $ 0.90
=============================== ===========================
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
WINDSOR PARK PROPERTIES 3
-------------------------
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
------------------------
(unaudited)
Nine Months Ended September 30,
-----------------------------------------------------
1999 1998
------------------------- ---------------------
Cash flows from operating activities:
<S> <C> <C>
Net income $ 507,600 $ 174,500
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 161,700 156,600
Equity in earnings of joint ventures and limited partnerships (23,700) (18,300)
Joint ventures' and limited partnerships cash distributions 23,700 18,300
Gain on sale of property (424,600) 0
Amortization of deferred financing costs 63,900 15,000
Changes in operating assets and liabilities:
(Increase) decrease in other assets 6,900 (55,500)
Accounts payable (5,200) (33,400)
Accrued expenses 31,600 132,500
Increase (decrease) in due to General Partners and affiliates 34,800 (43,700)
Tenant deposits and other liabilities (4,400) (19,400)
------------------------- ---------------------
Net cash provided by operating activities 372,300 326,600
------------------------- ---------------------
Cash flows from investing activities:
Investment in joint venture (39,700) 0
Increase in property held for investment (139,900) (101,100)
Joint ventures' and limited partnerships cash distributions 84,000 150,000
Proceeds from sale of property 865,900 0
------------------------- ---------------------
Net cash provided by (used in) investing activities 770,300 48,900
------------------------- ---------------------
Cash flows from financing activities:
Cash distributions (280,500) (282,800)
Repurchase of limited partnership units (56,000) (81,000)
Proceeds from term loan 400,000 0
Pay off of mortgage payable (1,800,000) 0
------------------------- ---------------------
Net cash used in by financing activities (1,736,500) (363,800)
------------------------- ---------------------
Net increase (decrease) in cash and cash equivalents (593,900) 11,700
Cash and cash equivalents at beginning of period 640,800 586,100
------------------------- ---------------------
Cash and cash equivalents at end of period $ 46,900 $ 597,800
========================= =====================
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
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, a California corporation ("TWC"), and
John A. Coseo, Jr. In September 1997, Chateau Communities, Inc., a publicly
held real estate investment trust, ("Chateau"), purchased 100% of the shares of
TWC.
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 General Partners are currently developing a plan which would liquidate and
dissolve the Partnership. The Partnership and N'Tandem Trust, an externally-
advised California business trust in which Chateau, as of September 30, 1999,
held 9.8% of the outstanding capital stock ("N'Tandem"), are in discussions with
respect to a transaction whereby the Partnership would sell its four wholly-
owned properties and its partial ownership interests in four other properties to
N'Tandem. The consummation of the proposed transaction with N'Tandem would be
subject to the satisfaction of certain conditions, including the approval of a
majority-in-interest of the Partnership's Limited Partners. The General
Partners expect to file with the Securities and Exchange Commission (the
"Commission") a proxy statement describing the terms of the proposed transaction
sometime in the near future and, upon clearance from the Commission, to mail the
proxy statement to Limited Partners. If the proposed transaction with N'Tandem
is consummated, the Partnership will be liquidated and liquidating distributions
will be made to Limited Partners in accordance with the terms of the
Partnership's Agreement of Limited Partnership. There can, however, be no
assurances that the proposed transaction with N'Tandem will be consummated or,
if consummated, that the proposed transaction will close prior to the end of the
Partnership's stated term.
NOTE 2. BASIS OF PRESENTATION
---------------------
The balance sheet at September 30, 1999 and the related statements of operations
for the three and nine months ended September 30, 1999 and 1998 and the
statements of cash flows for the nine months ended September 30, 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.
6
<PAGE>
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 September 30, 1999. The
combined condensed results of operations of the joint venture and limited
partnership properties for the nine months ended September 30, 1999 and 1998 are
as follows:
<TABLE>
<CAPTION>
1999 1998
------------------------- ------------------------
<S><C> <C><C> <C><C>
Total revenues $ 1,340,400 $ 1,330,500
Expenses:
Property operating 636,800 661,800
Depreciation 368,100 332,800
Interest 283,500 310,200
General and administrative 8,300 6,300
------------------------- ------------------------
1,296,700 1,311,100
------------------------- ------------------------
Net income $ 43,700 $ 19,400
========================= ========================
</TABLE>
NOTE 4. 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
period and the net income allocated to the Limited Partners. The weighted
average number of limited partnership units outstanding during the three and
nine months ended September 30, 1999 was 188,683 and 189,512 respectively; and
193,243 and 192,397 for the three and nine months ended September 30, 1998,
respectively.
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, 1999 and 1998 is as
follows:
<TABLE>
<CAPTION>
1999 1998
-------------------------------------------- -------------------------------------------
Per Per
Amount Unit Amount Unit
------ ---- ------ ----
<S> <C> <C> <C> <C>
Net income
- limited partners $ 502,500 $ 2.65 $ 172,800 $ 0.90
Return of capital 0 0 107,200 0.56
Net income in excess of
distributions (236,700) (1.25) 0 0
---------------------- --------------- ---------------------- ---------------
$ 265,800 $ 1.40 $ 280,000 $ 1.46
====================== =============== ====================== ===============
</TABLE>
7
<PAGE>
Note 6. EXTRAORDINARY ITEM - EARLY EXTINGUISHMENT OF DEBT
-------------------------------------------------
The extraordinary loss in the accompanying statements of income represents a
prepayment penalty and write off of unamortized loan fees incurred in connection
with the early extinguishment of debt.
8
<PAGE>
Item 2.
- -------
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Three months ended September 30, 1999 as compared to three months ended
- -----------------------------------------------------------------------
September 30, 1998
- ------------------
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
- ---------------------
The results of operations for the three months ended September 30, 1999 and 1998
are not directly comparable due to the sale of Little Eagle in April 1999. The
Partnership realized net income of $47,000 and $67,500 for the three months
ended September 30, 1999 and 1998, respectively. Net income per limited
partnership unit was $0.25 in 1999 and $0.35 in 1998 respectively.
Rent and utilities revenues decreased from $423,500 in 1998 to $380,500 in 1999
due to the sale of Little Eagle.
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 increased
from $6,200 in 1998 to $8,900 in 1999 primarily due to rental increases at the
communities.
Interest expense decreased from $69,900 in 1998 to $43,000 due to the pay off of
the $1.8 million mortgage payable in connection with the sale of Little Eagle.
General and administrative costs increased from $22,600 in 1998 to $48,600 in
1999 primarily due to costs incurred to appraise the Partnership's properties.
Nine months ended September 30, 1999 as compared to nine months ended September
- -------------------------------------------------------------------------------
30, 1998
- --------
Results of Operations
- ---------------------
The results of operations for the nine months ended September 30, 1999 and 1998
are not directly comparable due to the sale of Little Eagle in April 1999. The
Partnership realized net income before extraordinary item of $582,200 and
$174,500 for the nine months ended September 30, 1999 and 1998, respectively.
Net income per limited partnership unit before extraordinary item was $2.65 in
1999 and $0.90 in 1998, respectively. The increase in net income before
extraordinary item is primarily attributable to the $424,600 gain on sale of the
Little Eagle community.
Rent and utilities revenues decreased from $1,261,900 in 1998 to $1,198,600 in
1999 due to the sale of Little Eagle.
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
9
<PAGE>
partnerships increased from $18,300 in 1998 to $23,700 in 1999 primarily due to
rental increases at the community.
Interest expense decreased from $209,800 in 1998 to $151,700 in 1999 due to the
pay off of the $1.8 million mortgage payable in connection with the sale of
Little Eagle.
General and administrative costs increased from $71,600 in 1998 to $97,700 in
1999 primarily due to costs incurred to appraise the Partnership's properties.
Liquidity and Capital Resources
- -------------------------------
The Partnership's principal sources of liquidity during the nine months ended
September 30, 1999 were its cash flow generated from the operation of its
communities, proceeds from the sale of the Little Eagle community, proceeds from
a $400,000 term loan and distributions from investments in joint ventures and
limited partnerships. Net cash provided by operating activities was $372,300
for the nine months ended September 30, 1999. At September 30, 1999, the
Partnership's cash amounted to $46,900.
The Partnership's primary uses of its capital resources during the same periods
were for cash distributions to partners and the pay off of a $1.8 million
mortgage payable. Cash distributions to partners totaled $280,500 for the nine
months ended September 30, 1999.
The Partnership's principal long-term liquidity requirement will be the
repayment of principal on its outstanding mortgage debt. At September 30, 1999
the Partnership's total mortgage debt, including its proportionate share of
joint venture and limited partnership debt, was $2,733,700, consisting of
$1,470,400 of fixed rate debt and $1,263,300 of variable rate debt. The average
rate of interest on the fixed and variable rate debt was 8.5% and 7.7%,
respectively, at September 30, 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.
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 service, 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
- ---------
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
- --------------------
The General Partners have assessed the impact of the year 2000 issue on its
reporting systems and
10
<PAGE>
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 TWC 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 the General Partners believe 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.
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.
The General Partners expect 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.
11
<PAGE>
PART II
-------
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(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
None
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
By The Windsor Corporation, its Managing General
Partner
By /s/ Steven G. Waite
-----------------------------------------------
STEVEN G. WAITE
President
Date: February 3, 2000
13
