<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 0-15700
WINDSOR PARK PROPERTIES 4, A CALIFORNIA LIMITED PARTNERSHIP
-----------------------------------------------------------
(Exact name of small business issuer in its charter)
California 33-0202608
- -------------------------- -----------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
6160 South Syracuse Way, Greenwood Village, Colorado 80111
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(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]
Issuer's revenues for its most recent fiscal year: $4,120,900
DOCUMENTS INCORPORATED BY REFERENCE: None
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TABLE OF CONTENTS
PART I
Page
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Item 1. Description of Business 3
Item 2. Description of Properties 3
Item 3. Legal Proceedings 4
Item 4. Submission of Matters to a Vote of Security Holders 5
PART II
Item 5. Market for the Partnership's Units and Related
Security Holder Matters 5
Item 6. Management's Discussion and Analysis 5
Item 7. Financial Statements 8
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 19
PART III
Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange Act 19
Item 10. Executive Compensation 20
Item 11. Security Ownership of Certain Beneficial Owners and
Management 20
Item 12. Certain Relationships and Related Transactions 21
Item 13. Exhibits and Reports on Form 8-K 21
SIGNATURES 22
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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
Windsor Park Properties 4, 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
The Partnership was formed in June 1986 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
In accordance with the Partnership's Agreement of Limited Partnership, the term
of the Partnership expired on December 31, 1997 and, unless the term of the
Partnership was extended, the general partners were obligated to take actions to
liquidate and dissolve the Partnership. Accordingly, in the fourth quarter of
1997, the general partners began to develop a plan to liquidate the Partnership.
The first phase of such plan of liquidation involved the Partnership's marketing
of its Sunrise Village property, a wholly-owned property, and Harmony Ranch
property, a partially-owned property, for sale. As a result, the Partnership
sold the Sunrise Village property for approximately $1.7 million to a third
party in May 1998. The second phase of such plan of liquidation involved the
sale by the Partnership of its remaining assets not sold to third parties to
N'Tandem Trust, an externally-advised California business trust in which
Chateau, as of September 30, 1999, held 9.8% of the outstanding common and
preferred shares ("N'Tandem").
The transaction with N'Tandem contemplated the sale by the Partnership of its
single remaining wholly-owned property and its six partially-owned properties
(together, the "Remaining Assets") to N'Tandem. The consummation of the
transaction was subject to the satisfaction of certain conditions, including the
approval of a majority of the Partnership's Limited Partners. On June 30, 1999,
the transaction was approved and consented to by a majority of the Limited
Partners.
The aggregate purchase price paid for the Remaining Assets was $11,871,750 and
the net proceeds received by the Partnership were $8,382,200. The Partnership
recorded a gain on sale of $3,687,900. On July 15, 1999, the Partnership
distributed cash of $8,430,000 to the Limited and General Partners. Pursuant to
the plan of liquidation, the General Partners are currently in the process of
liquidating and dissolving the Partnership. The remaining cash will be used for
final expenses of the Partnership and a final distribution to the partners.
Item 2. DESCRIPTION OF PROPERTY
At December 31, 1999, the Partnership did not own any property. See "DESCRIPTION
OF BUSINESS-Expiration of Term of Partnership" above.
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Item 3. LEGAL PRODEEDINGS
On May 10, 1999, Ira Gaines, a limited partner of the Partnership, 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 the Partnership, and the
Directors and the President of TWC, in the Superior Court of the State of
California, County of San Diego. The Complaint asserts causes of action arising
out of the Partnership's sale of its Remaining Assets to N'Tandem and alleges
the following: (i) wrongful failure to liquidate timely the Partnership in that
its term expired on December 31, 1997 and to engage in sustained efforts to
liquidate the Partnership'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 the Partnership, (ii) breach of fiduciary
duty owed by the defendants to the Partnership 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 the Partnership's assets
allegedly do not fairly and adequately represent their present value, and (iii)
breach of the defendants' contractual duties owed to the Partnership and its
Limited Partners in that the agreement of limited partnership of the Partnership
prohibits sales of property to a Partnership sponsor. In the Complaint, the
plaintiff is seeking relief in the form of monetary damages and an award of
expenses and a dissolution of the Partnership and the appointment of an
independent liquidating trustee to liquidate the Partnership's assets.
On December 3, 1999, Mr. Gaines, also a limited partner of Windsor Park
Properties 3, A California Limited Partnership ("Windsor 3"), and Windsor Park
Properties 6, A California Limited Partnership ("Windsor 6"), amended the
Compliant, in response to two proposed transactions whereby Windsor 3 and
Windsor 6 would each, in separate transactions, sell their properties and other
assets to N'Tandem for cash and, thereafter, would liquidate in accordance with
their respective partnership agreements (the "Proposed Transactions"), 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 general partners of the
Partnership, Windsor 3 and Windsor 6, 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 Windsor 3 and Windsor 6 and their limited partners in
that the defendants allegedly failed to take steps to ensure the entire fairness
of the Proposed 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 and the appointment of an independent liquidating
trustee to liquidate 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 6, against
all of the defendants and any affiliated persons or entities. Accordingly, there
would be available for distribution to Limited Partners of the Partnership an
aggregate of approximately $144,000 as additional compensation 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
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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 of the Partnership 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 $0.74 per unit of limited partner interest (each, a "Unit"). This
amount will be in addition to the amounts previously distributed to Limited
Partners in connection with the sale of the Remaining Assets and the liquidation
of the Partnership. Pursuant ot 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 of either Windsor 3 or Windsor 6
fail to approve their respective Proposed Transactions.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to the Partnership's security holders during the
fourth quarter of the fiscal year covered by this report.
PART II
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 2,400 holders of
record holding an aggregate of 195,266 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)
- -------------------------------------------------------------
July 1999 $ 8,345,700 (3) $ 415.21 (3)
February 1999 $ 217,800 $ 10.84
August 1998 $ 217,900 $ 10.84
February 1998 $ 217,800 $ 10.84
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(1) Amounts exclude General Partner participation.
(2) Computed based on $20,100,000 original investment.
(3) Amount includes distributions paid pursuant to the Partnership's plan of
liquidation. See "DESCRIPTION OF BUSINESS - Expiration of Term of
Partnership."
Cash distributions paid to the General Partners since December 31, 1997,
including liquidating distributions, have been $91,100.
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
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"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.
Expiration of Term of Partnership
In accordance with the Partnership Agreement, the term of the Partnership
expired on December 31, 1997 and, unless the term of the Partnership was
extended, the General Partners were obligated to take actions to liquidate and
dissolve the Partnership. Accordingly, in the fourth quarter of 1997, the
General Partners began to develop a plan to liquidate the Partnership. The first
phase of such plan of liquidation involved the Partnership's marketing of its
Sunrise Village property, a wholly-owned property, and Harmony Ranch property, a
partially-owned property, for sale. As a result, the Partnership sold the
Sunrise Village property for approximately $1.7 million to a third party in May
1998. The second phase of such plan of liquidation involved the sale by the
Partnership of its Remaining Assets not sold to third parties to N'Tandem, an
externally-advised California business trust in which Chateau, as of September
30, 1999, held 9.8% of the outstanding common and preferred shares.
The transaction with N'Tandem contemplated the sale by the Partnership of the
Remaining Assets to N'Tandem. The consummation of the transaction was subject to
the satisfaction of certain conditions, including the approval of a majority of
the Partnership's Limited Partners. On June 30, 1999, the transaction was
approved and consented to by the Limited Partners.
The aggregate purchase price paid for the Remaining Assets was $11,871,750 and
the net proceeds received by the Partnership were $8,382,200. The Partnership
recorded a gain on sale of $3,687,900. On July 15, 1999, the Partnership
distributed cash of $8,430,000. Pursuant to the plan of liquidation, the General
Partners are currently in the process of liquidating and dissolving the
Partnership. The remaining cash will be used for final expenses of the
Partnership and a final distribution to the partners.
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 Sunrise Village in May 1998 and the sale
of the Remaining Assets on June 30, 1999. The Partnership recognized net income
before extraordinary item of $3,521,600 and $209,500 for the years ended
December 31, 1999 and 1998, respectively. Net income per Unit before
extraordinary item was $17.84 in 1999 and $0.88 in 1998.
Rent and utilities revenues decreased from $815,500 in 1998 to $319,600 in 1999,
due to the sale of Sunrise Village and the Remaining Assets.
Equity in earnings of joint ventures and limited partnerships represents the
Partnership's share of the net income of nine manufactured home communities.
Equity in earnings of joint ventures and limited partnerships decreased from
$110,900 in 1998 to $72,900 in 1999, due to the sale of these interests in June
1999.
Property operating costs decreased from $471,200 in 1998 to $122,300 in 1999 due
to the sale of Sunrise Village and the Remaining Assets.
Interest expense decreased from $126,000 in 1998 compared to $0 in 1999 due to
the payoff of the Partnership's mortgage debt associated with the sale of
Sunrise Village.
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General and administrative expenses increased from $90,900 in 1998 to $411,800
in 1999 due to liquidation expenses of the Partnership.
Liquidity and Capital Resources
The Partnership's principal sources of liquidity during the years ended December
31, 1999 and 1998 were its cash flow generated from the operation of its
communities, distributions from joint ventures and limited partnerships, and the
sale of its Remaining Assets. Net cash used in operating activities was $83,400
for the year ended December 31, 1999 and net cash provided by operating
activities was $390,900 for the year ended December 31, 1998. At December 31,
1999, the Partnership's cash amounted to $212,500.
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 $8,650,100 and $440,200 for the years ended December 31, 1999
and 1998, respectively.
Inflation
All of the leases or terms of residents' 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 Partnership had all systems appropriately 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.
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Item 7. FINANCIAL STATEMENTS
The following financial statements are filed as a part of this report:
Page
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Report of Independent Accountants 9
Balance Sheet as of December 31, 1999 10
Statements of Operations for the Years Ended
December 31, 1999 and 1998 11
Statements of Partners' Equity for the Years Ended
December 31, 1999 and 1998 12
Statements of Cash Flows for the Years Ended
December 31, 1999 and 1998 13
Notes to Financial Statements 14
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of Windsor Park Properties 4,
(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 4, 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
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WINDSOR PARK PROPERTIES 4
(A California Limited Partnership)
BALANCE SHEET
ASSETS December 31, 1999
-----------------
Cash and cash equivalents $ 212,500
--------------
Total Assets $ 212,500
==============
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Accrued expenses $ 71,900
Due to general partners and affiliates
30,600
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Total Liabilities 102,500
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Commitments and Contingencies (Note 9)
Partners' Equity
Limited Partners 159,900
General Partners (49,900)
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Total Partners' Equity 110,000
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Total Liabilities and Partners' Equity $ 212,500
==============
See accompanying notes to financial statements.
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WINDSOR PARK PROPERTIES 4
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Year Ended December 31,
-------------------------------
1999 1998
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<S> <C> <C>
REVENUES
Rent and utilities $ 319,600 $ 815,500
Equity in earnings of joint ventures and limited partnerships 72,900 110,900
Interest 29,900 24,600
Gain of sale of property held for sale 3,687,900 115,000
Other 10,600 17,500
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4,120,900 1,083,500
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COSTS AND EXPENSES
Property operating expenses 122,300 471,200
Depreciation 65,200 185,900
Interest -- 126,000
Liquidation Expenses 290,500 --
General and administrative:
Related parties 21,900 29,600
Other 99,400 61,300
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599,300 874,000
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Income before extraordinary item $ 3,521,600 $ 209,500
Extraordinary loss from early extinguishment of debt -- (35,500)
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Net income $ 3,521,600 $ 174,000
=========== ===========
Net income - general partners $ 37,500 $ 37,900
=========== ===========
Net Income - limited partners $ 3,484,100 $ 136,100
=========== ===========
Basic and diluted earnings per limited partnership unit:
Income before extraordinary item $ 17.84 $ 0.88
Extraordinary loss from early extinguishment of debt -- (0.18)
----------- -----------
Net income - limited partners $ 17.84 $ 0.70
=========== ===========
</TABLE>
See accompanying notes to financial statements.
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WINDSOR PARK PROPERTIES 4
(A California Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
------------- ----------- -----------
<S> <C> <C> <C>
Balance at December 31, 1997 $ (34,200) $ 5,552,700 $ 5,518,500
Cash distributions (4,500) (435,700) (440,200)
Net income 37,900 136,100 174,000
Repurchase of limited partnership units -- (13,800) (13,800)
----------- ----------- -----------
Balance at December 31, 1998 $ (800) $ 5,239,300 $ 5,238,500
Cash distributions (86,600) (8,563,500) (8,650,100)
Net income 37,500 3,484,100 3,521,600
----------- ----------- -----------
Balance at December 31, 1999 $ (49,900) $ 159,900 $ 110,000
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
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WINDSOR PARK PROPERTIES 4
(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 $ 3,521,600 $ 174,000
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation 65,200 185,900
Equity in earnings of joint ventures and limited partnerships (72,900) (110,900)
Joint ventures' and limited partnerships cash distributions 72,900 110,900
Gain on sale of property and joint ventures (3,687,900) (115,000)
Extraordinary loss from early extinguishment of debt -- 35,500
Amortization of deferred financing costs -- 72,400
Changes in operating assets and liabilities:
Decrease in other assets 16,600 34,000
Decrease in accounts payable (800) (23,700)
Increase in accrued expenses 7,900 44,600
Decrease in tenant deposits and other liabilities (16,000) --
Increase (decrease) due to general partner and affiliates 10,000 (16,800)
----------- ------------
Net cash (used in) provided by operating activities (83,400) 390,900
----------- -----------
Cash flows from investing activities:
Joint ventures' and limited partnerships' cash distributions 123,600 390,500
Increase in property held for sale (25,200) (91,900)
Proceeds from sale of property and other assets 8,382,200 1,548,500
Investment in joint venture and limited partnerships (70,200) (34,800)
----------- -----------
Net cash provided by investing activities 8,410,400 1,812,300
----------- -----------
Cash flows from financing activities:
Cash distributions to partners (8,650,100) (440,200)
Repayments of mortgage note payable -- (1,775,000)
Repurchase of limited partnership units -- (13,800)
----------- -----------
Net cash used in financing activities (8,650,100) (2,229,000)
----------- -----------
Net decrease in cash and cash equivalents $ (323,100) $ (25,800)
Cash and cash equivalents at beginning of year $ 535,600 $ 561,400
----------- -----------
Cash and cash equivalents at end of year $ 212,500 $ 535,600
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid during the year for interest (none capitalized) $ 0 $ 169,682
=========== ===========
</TABLE>
See accompanying notes to financial statements.
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WINDSOR PARK PROPERTIES 4
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. THE PARTNERSHIP AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Partnership
Windsor Park Properties 4, A California Limited Partnership (the "Partnership"),
was formed in June 1986 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.
The Partnership was funded through a public offering of 200,000 limited
partnership units at $100 per unit, which commenced in September 1986 and
terminated in September 1987.
In accordance with the Partnership Agreement, the term of the Partnership
expired on December 31, 1997 and, unless the term of the Partnership was
extended, the General Partners were obligated to take actions to liquidate and
dissolve the Partnership. Accordingly, in the fourth quarter of 1997, the
General Partners began to develop a plan to liquidate the Partnership. The first
phase of such plan of liquidation involved the Partnership's marketing of its
Sunrise Village property, a wholly-owned property, and Harmony Ranch property, a
partially-owned property, for sale. As a result, the Partnership sold the
Sunrise Village Property for approximately $1.7 million to a third party in May
1998. The second phase of such plan of liquidation involved the sale by the
Partnership of its remaining assets not sold to third parties to N'Tandem Trust,
an externally-advised California business trust in which Chateau, as of December
31, 1999, held 9.8% of the outstanding common and preferred shares ("N'Tandem").
Accordingly, the Partnership and N'Tandem proposed a transaction whereby the
Partnership would sell its single remaining wholly-owned property and its six
partially-owned properties to N' Tandem. The consummation of the transaction was
subject to the satisfaction of certain conditions including the approval of a
majority of the Partnership's limited partners. On June 30, 1999, the
transaction was approved and consented to by the limited partners.
Property Held For Sale
During 1999 and 1998, 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. The Partnership has continued to operate
its property held for sale in the normal course of business and, accordingly,
has continued to record depreciation expense. When assets were 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 were charged to operations as incurred.
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Investments in Joint Ventures and Limited Partnerships Held For Sale
The investments in joint ventures and limited partnerships were accounted for
utilizing the equity method of accounting as the properties were subject to
joint control requiring approval or mutual agreement of the investors. The
investment in limited partnerships was also accounted for utilizing the equity
method as the limited partners have significant rights.
Income Taxes
Under provisions of the Internal Revenue Code 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 are 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 195,266 and 195,429, 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.
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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 195,266,
which represented capital contributions of $19,526,600. During the year ended
December 31, 1999, the Partnership did not repurchase any units. In 1998, the
Partnership repurchased 310 units for $13,800 from the limited partners. The
general partners owned 1,030 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.
The Partnership reimburses TWC for certain direct expenses, and employee,
executive and administrative time incurred on the Partnership's behalf. The
Partnership was charged $21,900 and $29,600 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
$30,600.
Liquidation Stage
The general partners receive 1% of 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 first be
allocated 100% to the general partners to the extent of their negative capital
account.
The general partners received cash distributions of $86,600 and $4,500 for the
years ended December 31, 1999 and 1998, respectively.
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NOTE 3. INVESTMENTS IN JOINT VENTURES AND LIMITED PARTNERSHIPS HELD FOR
SALE
The Partnership's investments in joint ventures and limited partnership
consisted of interests in six manufactured home communities prior to the sale of
these interests on June 30, 1999. The combined condensed results of operations
of the joint venture and limited partnership properties for the six months ended
June 30, 1999 and the year ended December 31, 1998 are as follows:
For the Six Months For the Year Ended
Results of operations Ended June 30, 1999 December 31, 1998
------------------- ------------------
Property revenues $ 1,758,600 $ 3,483,600
--------------- ---------------
Expenses:
Property operating 792,200 1,701,500
Depreciation 290,000 890,400
Interest 497,900 728,800
General and administrative 6,900 --
--------------- ---------------
1,587,000 3,320,700
--------------- ---------------
Net income (loss) $ 171,600 $ 162,900
=============== ===============
NOTE 4. 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 $ 3,484,100 $17.84 $ 136,100 $ 0.70
Return of Capital 5,079,400 26.01 299,600 1.53
----------- ------ --------- ------
Total distributions $ 8,563,500 $43.85 $ 435,700 $ 2.23
=========== ====== ========= ======
</TABLE>
NOTE 5. FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts of cash equivalents, other assets, accounts payable,
accrued expenses and other liabilities approximate fair value because of the
short maturity of these financial instruments.
17
<PAGE>
NOTE 6. 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.
NOTE 7. 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 $11,000 and $41,300
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 $58,500 and $124,100 for
the years ended December 31, 1999 and 1998, respectively.
NOTE 8. EXTRAORDINARY ITEM - EARLY EXTINGUISHMENT OF DEBT:
The extraordinary loss in the accompanying statements of income represent a
prepayment penalty incurred in connection with the early extinguishment of debt.
18
<PAGE>
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.
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:
Name Age Office
------------------------- -------- --------------------------------------
Steven G. Waite 45 President and Director
Gary P. McDaniel 54 Director
C.G. Kellogg 56 Director
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 and a director.
Since 1991, until his involvement with TWC, 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 and is a
trustee of Windsor Real Estate Investment Trust 8, a real estate investment
trust that is advised by TWC. He served as the Chairman of the Board, President
and Chief Executive Officer for ROC Communities, Inc. since 1993, has been a
principal of ROC and its predecessors since 1979, and has been active in the
manufactured home industry since 1972. 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
19
<PAGE>
states Air Force.
C.G. ("Jeff") Kellogg (56) has been President and a director of Chateau
Communities, Inc. since its inception and was Chief Executive Officer of
the Company from its inception to February 1997. For the five years
preceding the formation of Chateau Communities, Inc., 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) was the founder of TWC in 1977 and has been
actively involved in all facets of the manufactured housing business since
that time. Mr. Coseo resigned from his positions 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. or 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 limited partnership 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 30 .015%
Units of Limited The Windsor Corporation
Partnership Interest A General Partner 1,000 .512%
----- ----
Units of Limited All General Partners
Partnership Interest As a group 1,030 .527%
===== ====
</TABLE>
20
<PAGE>
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.
Form of Compensation and Enitity Receiving 1999 1998
- ------------------------------------------ -------- --------
Expense reimbursement - TWC $ 21,900 $ 29,600
Cash Distributions - TWC 86,600 4,500
--------- --------
$ 108,500 $ 34,100
========= ========
Item 13. 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. 33-6812 and incorporated herein by
reference.
(27) - Financial Data Schedule
(b) Reports on Form 8-K
There were no reports on Form 8-K during the last quarter of the
period covered by this Form 10-KSB.
21
<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 March
2000.
WINDSOR PARK PROPERTIES 4
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>
/s/ Steven G. Waite President of The Windsor Corporation, a March 30, 2000
- ---------------------------- general partner of the Partnership
STEVEN G. WAITE
/s/ Gary P. McDaniel Director March 30, 2000
- ----------------------------
GARY P. MCDANIEL
/s/ C.G. Kellogg Director March 30, 2000
- ---------------------------
C.G. KELLOGG
/s/ John A. Coseo, Jr. General Partner March 30, 2000
- ---------------------------
JOHN A. COSEO, JR.
</TABLE>
22
<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> 212,500
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 212,500
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 212,500
<SALES> 0
<TOTAL-REVENUES> 4,120,900
<CGS> 0
<TOTAL-COSTS> 122,300
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3,521,600
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,521,600
<EPS-BASIC> 17.84
<EPS-DILUTED> 17.84
</TABLE>
