<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 [Fee Required]
For the fiscal year ended December 31, 1995
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [No Fee Required]
For the transition period from ................to...............
Commission file number 0-16642
WINDSOR PARK PROPERTIES 5, A CALIFORNIA LIMITED PARTNERSHIP
----------------------------------------------------------------------
(Exact name of small business issuer in its charter)
California 33-0243223
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
120 W. Grand Avenue, Suite 202, Escondido, California 92025
- --------------------------------------------------------- --------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (619) 746-2411
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]
State issuer's revenues for its most recent fiscal year: $536,200
DOCUMENTS INCORPORATED BY REFERENCE: None
1
<PAGE>
TABLE OF CONTENTS
PART I
------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Item 1. Description of Business 3
Item 2. Description of Properties 5
Item 3. Legal Proceedings 6
Item 4. Submission of Matters to a Vote of Security Holders 6
PART II
-------
Item 5. Market for the Partnership's Units and Related Security
Holder Matters 6
Item 6. Management's Discussion and Analysis 7
Item 7. Financial Statements 9
Item 8. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 21
PART III
--------
Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of The Exchange Act 21
Item 10. Executive Compensation 22
Item 11. Security Ownership of Certain Beneficial Owners and Management 22
Item 12. Certain Relationships and Related Transactions 22
Item 13. Exhibits and Reports on Form 8-K 23
SIGNATURES 24
</TABLE>
2
<PAGE>
PART I
------
Item 1. DESCRIPTION OF BUSINESS
-----------------------
Business Development
- --------------------
Windsor Park Properties 5, a California Limited Partnership (the Partnership),
was formed on June 29, 1987 pursuant to the provisions of the California Uniform
Limited Partnership Act. The General Partners of the Partnership are The
Windsor Corporation, a California corporation, and John A. Coseo, Jr., chief
executive officer, president and principal stockholder of The Windsor
Corporation. The Partnership term is set to expire on December 31, 2001;
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 Partnership was organized to acquire and hold existing manufactured home
communities for investment. Its principal investment objectives are to provide
to the Limited Partners: (i) distributions of cash from operations, (ii)
preservation, protection and eventual return of the limited partners'
investment, and (iii) realization of appreciation in the value of the properties
acquired.
The Partnership was funded through a public offering of 300,000 limited
partnership units (Units). A total of 243,729 Units were sold for gross
proceeds aggregating $24,372,900. In addition, the General Partners initially
purchased 1,000 Units with a $100,000 note. The offering commenced on September
16, 1987 and terminated on September 15, 1988. The net proceeds from the
offering were expended for the acquisition of undivided interests in nine fully-
developed manufactured home communities located in Arizona, Florida, Louisiana,
Georgia, Michigan, and Washington. The Partnership paid all cash for these
properties.
In August 1993, the Partnership sold its interests in six manufactured home
communities for net proceeds of $16,508,100. The Partnership realized an
accounting gain on sale of $3,311,100.
In July 1994, through a proxy vote of the limited partners, an amendment to the
Agreement of Limited Partnership was approved permitting the financing of
currently owned manufactured home communities and the reinvestment of financing
proceeds into newly acquired manufactured home communities to be purchased with
permanent mortgage financing. Overall Partnership mortgage financing will not
exceed 55% of the value of existing and newly acquired properties.
During 1995, the Partnership obtained two loans collateralized by interests in
currently owned manufactured home communities. The proceeds from these loans
were used as partial consideration to purchase interests in two additional
manufactured home communities. The remaining consideration was obtained from
permanent mortgage financing assumed in connection with the purchases.
In September 1995, the Partnership and an affiliated limited partnership jointly
obtained a $1,550,000 loan, collateralized by the Town and Country Estates
community, a jointly owned property. The Partnership's share of this loan is
$651,000. In September 1995, the Partnership also obtained a $1,097,000 loan,
collateralized by the Lakeside and Plantation Estates communities.
In September 1995, the Partnership purchased a 26% interest in the Rancho
Margate manufactured home community located in Margate, Florida. The remaining
interests in the property were acquired by affiliated limited partnerships. The
Partnership's total cost of its interest in property was $754,400. In
connection with the purchase, the joint venture assumed a $3,737,100 mortgage
note of the seller, which is collateralized by the community. The Partnership's
share of the note is $971,600.
3
<PAGE>
In October 1995, the Partnership purchased a 26% interest in the Winter Haven
manufactured home community located in Winter Haven, Florida. The remaining
interests in the property were acquired by affiliated limited partnerships. The
Partnership's total cost of its interest in the property was $494,000. In
connection with the purchase, the joint venture assumed a $1,641,600 mortgage
note of the seller, which is collateralized by the community. The Partnership's
share of the note is $426,800.
The Partnership owns interests in the following manufactured home communities at
December 31, 1995:
<TABLE>
<CAPTION>
Date
Name of Property Ownership % Acquired Location
- ------------------------- ----------- -------------- -----------------------
<S> <C> <C> <C>
Lakeside 100% July 1988 Lithia Springs, Georgia
Plantation Estates 100% December 1988 Douglasville, Georgia
Town and Country Estates 42% January 1989 Tucson, Arizona
Rancho Margate 26% September 1995 Margate, Florida
Winter Haven 26% October 1995 Winter Haven, Florida
</TABLE>
No further property financings or investment property acquisitions are planned
by the General Partners.
The overall occupancy of the Partnership's five communities was 92% at December
31, 1995. The General Partners continue to maintain the properties in good
condition and promote them to improve occupancy. There are no current plans to
dispose of any of these properties.
Business of Issuer
- ------------------
The Partnership is currently in the business of managing, holding for
investment, and eventually selling the existing manufactured home communities.
Competitors of the Partnership include other public and private limited
partnerships, individuals, corporations, and other entities engaged in real
estate investment activities. Competition for such properties varies with
changes in the supply or demand for similar or competing properties in a given
area, changes in interest rates and the availability of mortgage funds, and
changes in tax, real estate, environmental, and zoning laws.
Partnership profitability depends in part on maximizing occupancy and rental
rates in its manufactured home communities. Rents and occupancy rates are
affected by both changes in general economic conditions and changes in local
conditions such as levels of employment, supply of other comparable units or
competitive housing alternatives, zoning laws, and the availability and cost of
energy and transportation.
All of the Partnership's properties are located in or near large urban areas.
Accordingly, they compete for rentals not only with other manufactured home
communities but with apartments and any other form of low cost housing that
might exist.
The Partnership's profitability also depends on the minimization of both
property and partnership administration expenses. Expenses are affected by
changes in general economic trends and changes in local conditions such as
prevailing wages, utility rates, insurance costs, and real estate taxation
practices.
The Partnership has no employees. Partnership administrative services are
provided by The Windsor Corporation, which is reimbursed for costs incurred on
behalf of the Partnership. An independent property management company employs
all of the properties' on-site personnel and is reimbursed by the Partnership
for all such costs.
4
<PAGE>
Item 2. DESCRIPTION OF PROPERTIES
-------------------------
The Partnership owns interests in five properties. The Partnership operates the
properties as manufactured home communities, renting space to manufactured home
tenants on a month-to-month basis. The properties compete for rentals with
other manufactured home communities and apartments in their local markets. All
properties are encumbered. It is the General Partners' opinion that the
properties are in good condition and are adequately insured.
<TABLE>
<CAPTION>
Rancho Lakeside
Margate ----------- Winter Haven
------------- Lithia --------------
Margate, Springs, Winter Haven,
Location Florida Georgia Florida
- -------------------------------------------------------------------------
<S> <C> <C> <C>
Percentage of Ownership 26% 100% 26%
Date Acquired 9/95 7/88 10/95
Acreage 29 31 30
Number of Spaces 245 103 238
Monthly Rents (1) $351 $193 $211
Occupancy Level:
February 28, 1996 97% 86% 98%
Real estate taxes $92,400 $15,600 $35,700
Federal tax basis (3) $1,701,700 $1,272,200 $923,300
Mortgage Information:
Balance payable $3,729,900 $1,097,000 $1,639,500
Interest rate 9.13% 8.64% 9.13%
Amortization period 30 years -- 30 years
Maturity date 7/23 9/02 6/23
Balance due at maturity $0 $1,097,000 $0
</TABLE>
<TABLE>
<CAPTION>
Town and
Plantation Country
Estates Estates
------------- ----------
Douglasville, Tucson,
Location Georgia Arizona
- -------------------------------------------------------
<S> <C> <C>
Percentage of Ownership 100% 42%
Date Acquired 12/88 1/89
Acreage 23 38
Number of Spaces 137 320
Monthly Rents (1) $185 $186
Occupancy Level:
February 28, 1996 64% 98%
Real estate taxes $16,000 $33,600
Federal tax basis (3) $1,361,300 $1,529,900
Mortgage Information:
Balance payable (2) $1,550,000
Interest rate (2) 8.64%
Amortization period (2) --
Maturity date (2) 9/02
Balance due at maturity (2) $1,550,000
</TABLE>
5
<PAGE>
(1) Average rental rates in effect on February 28, 1996.
(2) Same mortgage note payable as Lakeside.
(3) For income tax purposes, the properties and their components are
depreciated using both straight-line and accelerated methods over useful
lives ranging from 5 to 40 years.
Item 3. LEGAL PROCEEDINGS
-----------------
There are no pending legal proceedings, other than ordinary routine litigation
incidental to the business, to which the Partnership is a party or of which any
of its properties is the subject.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
There were no matters submitted to security holders for a vote 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 February 28, 1996, there were approximately 3,160 persons
holding an aggregate of 241,622 units.
Cash distributions paid to limited partners since December 31, 1993 are as
follows:
<TABLE>
<CAPTION>
Per $1,000
Originally
Date Paid Amount (1) Invested (2)
- --------- ---------- ------------
<S> <C> <C>
February 1996 $100,000 $4.09
August 1995 $ 50,000 $2.04
May 1995 $ 50,000 $2.04
February 1995 $ 50,000 $2.04
November 1994 $100,000 $4.09
August 1994 $125,000 $5.11
May 1994 $125,000 $5.11
February 1994 $100,000 $4.09
</TABLE>
(1) Amounts exclude General Partner participation.
(2) Computed based on $24,472,900 original investment.
Cash distributions paid to the General Partners since December 31, 1993 were
$6,000. The General Partners expect that the Partnership will make cash
distributions on a semi-annual basis in the future.
6
<PAGE>
Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS
------------------------------------
a) Liquidity and Capital Resources
-------------------------------
The Partnership's primary sources of cash during the years ended December 31,
1995 and 1994 were from the operations of its investment properties, cash
distributions from joint ventures and proceeds from a mortgage note payable.
The primary uses of cash during the same period were for investments in joint
ventures and cash distributions to partners.
During 1995, the Partnership obtained two loans collateralized by interests in
currently owned manufactured home communities. The proceeds from these loans
were used as partial consideration to purchase interests in two additional
manufactured home communities. The remaining consideration was obtained from
permanent mortgage financing assumed in connection with the purchases.
In September 1995, the Partnership and an affiliated limited partnership jointly
obtained a $1,550,000 loan, collateralized by the Town and Country Estates
community, a jointly owned property. The Partnership's share of this loan is
$651,000. The Partnership and the affiliated limited partnership are both
contingently liable for the full amount of the loan. In September 1995, the
Partnership also obtained a $1,097,000 loan, collateralized by the Plantation
Estates and Lakeside communities. Both of these loans are payable in monthly
interest only installments bearing interest at 90 day LIBOR plus 2.95% (8.64% at
December 31, 1995) and are due in 2002.
In September 1995, the Partnership purchased a 26% interest in the Rancho
Margate manufactured home community located in Margate, Florida. The remaining
interests in the property were acquired by affiliated limited partnerships. The
Partnership's total cost of its interest in the property was $754,400. In
connection with the purchase, the joint venture assumed a $3,737,100 mortgage
note of the seller. The Partnership's share of this note is $971,600. The
note, which is collateralized by the property, is payable in monthly
installments, including interest at 50% of six month LIBOR plus 6.26% (9.13% at
December 31, 1995) until June 2003. Thereafter, the interest rate increases to
50% of six month LIBOR plus 7.26%, until the note matures in July 2023. In a
separate agreement, the seller of the property will reimburse the joint venture
for any interest expense which, in total, exceeds 9.1% during the three year
period subsequent to the purchase. The seller has escrowed $87,000 to satisfy
this potential obligation.
In October 1995, the Partnership purchased a 26% interest in the Winter Haven
manufactured home community located in Winter Haven, Florida. The remaining
interests in the property were acquired by affiliated limited partnerships. The
Partnership's total cost of its interest in the property was $494,000. In
connection with the purchase, the joint venture assumed a $1,641,600 mortgage
note of the seller. The Partnership's share of this note is $426,800. The
note, which is collateralized by the property, is payable in monthly
installments, including interest at 50% of six month LIBOR plus 6.26% (9.13% at
December 31, 1995) until May 2003. Thereafter, the interest rate increases to
50% of six month LIBOR plus 7.26%, until the note matures in June 2023. In a
separate agreement, the seller of the property will reimburse the Partnership
for any interest expense which, in total, exceeds 9.1% during the year
subsequent to the purchase. The seller has escrowed $20,000 to satisfy this
potential obligation.
7
<PAGE>
The Partnership owns interests in the following manufactured home communities at
December 31, 1995:
<TABLE>
<CAPTION>
Date
Name of Property Ownership % Acquired Location
- ------------------------ ----------- -------------- -----------------------
<S> <C> <C> <C>
Lakeside 100% July 1988 Lithia Springs, Georgia
Plantation Estates 100% December 1988 Douglasville, Georgia
Town and Country Estates 42% January 1989 Tucson, Arizona
Rancho Margate 26% September 1995 Margate, Florida
Winter Haven 26% October 1995 Winter Haven, Florida
</TABLE>
No further property financings or investment property acquisitions are planned
by the General Partners.
The Partnership's cash balance increased from $170,500 at December 31, 1994 to
$617,800 at December 31, 1995. The increase is due mainly to the General
Partners using a portion of the loan proceeds received in 1995 to replenish
Partnership cash reserves.
The future sources of cash for the Partnership will be provided from property
operations, cash reserves and ultimately from the sale of property. The future
uses of cash will be for Partnership administration, capital expenditures, cash
distributions to partners and debt service. The General Partners believe that
the future sources of cash are sufficient to meet the working capital
requirements of the Partnership for the foreseeable future.
b) Results of Operations
---------------------
The results of operations for the years ended December 31, 1995 and 1994 are not
directly comparable due to the purchases of interests in the Rancho Margate and
Winter Haven manufactured home communities in September 1995 and October 1995,
respectively. Net income for the years ended December 31, 1995 and 1994 was
$81,800 and $14,900, respectively. Net income per limited partnership unit was
$0.33 in 1995 and $0.06 in 1994.
Rent and utilities revenues decreased slightly from $422,200 in 1994 to $420,400
in 1995. The overall occupancy of the Partnership's two wholly-owned properties
decreased from 78% at December 31, 1994 to 73% at December 31, 1995. Offsetting
the decrease in overall occupancy were $5 and $10 per month rent increases
implemented at both properties effective April 1995 and April 1994,
respectively.
Equity in earnings of joint ventures represents the Partnership's share of the
net income of the Town and Country Estates manufactured home community, and
since their dates of purchase, the Rancho Margate and Winter Haven manufactured
home communities. Equity in earnings of joint ventures increased from $14,000
in 1994, to $67,200 in 1995, due mainly to the purchases of Rancho Margate and
Winter Haven, as discussed previously. The overall occupancy of the
Partnership's three joint venture properties was 98% at December 31, 1995. A
$12 per month rent increase was implemented at Town and Country in May 1995.
Interest income increased from $17,500 in 1994 to $27,700 in 1995 due mainly to
higher average cash balances maintained by the Partnership.
Property operating costs decreased slightly from $230,200 in 1994 to $228,300 in
1995. The overall decrease is attributable mainly to higher wage and repairs
and maintenance costs being offset by lower losses on sales of mobile homes at
Plantation Estates.
8
<PAGE>
General and administrative expenses decreased from $122,500 in 1994 to $89,800
in 1995. The decrease in 1995 is due mainly to a $23,000 tax imposed by the
State of Michigan in 1994 relating to the wind-up of the Partnership's business
in that state.
Interest expense of $32,100 in 1995 represents interest expense incurred on the
$1,097,000 mortgage note payable obtained by the Partnership in September 1995,
as discussed previously. The Partnership incurred no interest expense in 1994.
Item 7. FINANCIAL STATEMENTS
--------------------
The following financial statements are filed as a part of this report:
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditors' Report 10
Balance Sheet at December 31, 1995 11
Statements of Operations for the years ended
December 31, 1995 and 1994 12
Statements of Partners' Equity for the years ended
December 31, 1995 and 1994 13
Statements of Cash Flows for the years ended
December 31, 1995 and 1994 14
Notes to Financial Statements 15
</TABLE>
9
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Partners
Windsor Park Properties 5
(A California Limited Partnership)
Escondido, California
We have audited the accompanying balance sheet of Windsor Park Properties 5 as
of December 31, 1995 and the related statements of operations, partners' equity,
and cash flows for each of the two years in the period ended December 31, 1995.
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 in accordance with generally accepted auditing
standards. Those standards 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Windsor Park Properties 5 as of December 31,
1995 and the results of its operations and its cash flows for each of the two
years in the period ended December 31, 1995, in conformity with generally
accepted accounting principles.
Deloitte & Touche LLP
Costa Mesa, California
March 1, 1996
10
<PAGE>
WINDSOR PARK PROPERTIES 5
-------------------------
(A California Limited Partnership)
BALANCE SHEET
------------
<TABLE>
<CAPTION>
ASSETS December 31, 1995
- ------ -----------------
<S> <C>
Property held for investment, net $ 2,826,900
Investments in joint ventures 2,187,500
Cash and cash equivalents 617,800
Deferred financing costs 60,700
Other assets 66,200
----------------
$ 5,759,100
================
LIABILITIES AND PARTNERS' EQUITY
- --------------------------------
Liabilities:
Mortgage note payable $ 1,097,000
Accounts payable 9,500
Accrued expenses 32,200
Tenant deposits and other liabilities 35,000
----------------
1,173,700
----------------
Partners' equity:
Limited partners 4,856,800
Less units subscription note receivable (100,000)
----------------
Net limited partners 4,756,800
General partners (171,400)
----------------
4,585,400
----------------
$ 5,759,100
================
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
WINDSOR PARK PROPERTIES 5
-------------------------
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
<TABLE>
<CAPTION>
For The Year Ended December 31,
-------------------------------
1995 1994
-------------- --------------
<S> <C> <C>
REVENUES
- --------
Rent and utilities $ 420,400 $ 422,200
Equity in earnings of joint ventures 67,200 14,000
Interest 27,700 17,500
Other 20,900 17,400
-------------- ---------------
536,200 471,100
-------------- ---------------
COSTS AND EXPENSES
- ------------------
Property operating 228,300 230,200
Depreciation and amortization 104,200 103,500
General and administrative:
Related parties 50,500 52,400
Other 39,300 70,100
Interest 32,100
-------------- ---------------
454,400 456,200
-------------- ---------------
Net income $ 81,800 $ 14,900
============== ===============
Net income - general partners $ 800 $ 100
============== ===============
Net income - limited partners $ 81,000 $ 14,800
============== ===============
Net income per limited partnership unit $ 0.33 $ 0.06
============== ===============
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
WINDSOR PARK PROPERTIES 5
-------------------------
(A California Limited Partnership)
STATEMENTS OF PARTNERS' EQUITY
-------------------------------
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
----------------------------------------------
<TABLE>
<CAPTION>
Units
Subscription
General Limited Note
Partners Partners Receivable Total
---------- ---------- ------------ ----------
<S> <C> <C> <C> <C>
Balance at
January 1, 1994 $ (166,300) $5,376,800 $ (100,000) $5,110,500
Cash distributions (4,500) (450,000) (454,500)
Net income 100 14,800 14,900
Repurchase of limited
partnership units (800) (800)
---------- ---------- ------------ ----------
Balance at
December 31, 1994 (170,700) 4,940,800 (100,000) 4,670,100
Cash distributions (1,500) (150,000) (151,500)
Net income 800 81,000 81,800
Repurchase of limited
partnership units (15,000) (15,000)
---------- ---------- ------------ ----------
Balance at
December 31, 1995 $ (171,400) $4,856,800 $ (100,000) $4,585,400
========== ========== ============ ==========
</TABLE>
See accompanying notes to financial statements.
13
<PAGE>
WINDSOR PARK PROPERTIES 5
-------------------------
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
------------------------
<TABLE>
<CAPTION>
For The Year Ended December 31,
---------------------------------
1995 1994
-------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 81,800 $ 14,900
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 104,200 103,500
Equity in earnings of joint ventures (67,200) (14,000)
Joint ventures' cash distributions 67,200 14,000
Loss on sale of property held for investment
and other assets 6,800 15,500
Changes in operating assets and liabilities:
Other assets 4,000 14,700
Accounts payable 2,900 (1,400)
Accrued expenses 17,600 (6,500)
Tenant deposits and other liabilities (8,400) 5,400
-------------- -------------
Net cash provided by operating activities 208,900 146,100
-------------- -------------
Cash flows from investing activities:
Investments in joint ventures (1,248,400)
Joint ventures' cash distributions 645,300 39,400
Increase in property held for investment (26,500) (2,200)
Proceeds from sale of property held for investment
and other assets 800 4,500
-------------- -------------
Net cash (used in) provided by investing activities (628,800) 41,700
-------------- -------------
Cash flows from financing activities:
Proceeds from mortgage note payable 1,097,000
Cash distributions (151,500) (454,500)
Payment of deferred financing costs (63,300)
Repurchase of limited partnership units (15,000) (800)
-------------- -------------
Net cash provided by (used in) financing activities 867,200 (455,300)
-------------- -------------
Net increase (decrease) in cash and cash equivalents 447,300 (267,500)
Cash and cash equivalents at beginning of year 170,500 438,000
-------------- -------------
Cash and cash equivalents at end of year $ 617,800 $ 170,500
============== =============
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest (none capitalized) $ 21,200 $ --
============== =============
</TABLE>
See accompanying notes to financial statements.
14
<PAGE>
WINDSOR PARK PROPERTIES 5
-------------------------
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE 1. THE PARTNERSHIP AND A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
----------------------------------------------------------------
The Partnership
- ---------------
Windsor Park Properties 5, A California Limited Partnership (the Partnership),
was formed on June 29, 1987 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, and John A.
Coseo, Jr., chief executive officer, president and principal stockholder of The
Windsor Corporation.
The Partnership was funded through a public offering of 244,729 limited
partnership units at $100 per unit which commenced on September 16, 1987 and
terminated on September 15, 1988. The Partnership term is set to expire on
December 31, 2001; 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 following is a summary of the Partnership's significant accounting policies:
Property Held For Investment
- ----------------------------
Property held for investment is recorded at the lower of cost or estimated net
realizable value after disposition costs 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. When assets are 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 are charged to operations as incurred.
Property held for investment is reviewed for impairment annually or whenever
events or changes in circumstances indicate that the carrying values of the
properties may not be recoverable. Impairment is measured as the difference
between the carrying value of the property and the estimated future undiscounted
cash flows.
In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121, Accounting for the Impairment of Long-
Lived Assets and Long-Lived Assets to Be Disposed Of (SFAS No. 121), which must
be adopted by the Partnership in 1996. SFAS No. 121, when adopted, represents a
change in the way the Partnership will measure the recoverability of its
property held for investment. At this time, the General Partners do not believe
that adoption of SFAS No. 121 will have a material impact on the financial
statements of the Partnership.
Investments in Joint Ventures
- -----------------------------
The investments in joint ventures are accounted for by the equity method as the
Partnership does not exercise control over the ventures.
Financing Costs
- ---------------
Financing costs are amortized to interest expense over the life of the note
using the level yield method.
15
<PAGE>
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.
Net Income Per Limited Partnership Unit
- ---------------------------------------
Net income per limited partnership unit is calculated based on the weighted
average number of limited partnership units outstanding during the year and the
net income allocated to the Limited Partners. The weighted average number of
limited partnership units outstanding during the years ended December 31, 1995
and 1994 was 243,464 and 243,841, respectively.
Statements of Cash Flows
- ------------------------
For purposes of the statements of cash flows, the Partnership considers all
highly liquid instruments 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.
Reclassification
- ----------------
Certain 1994 amounts have been reclassified to conform with the 1995
presentation.
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, 1995 and 1994 was 241,822
and 243,803, respectively, which represented capital contributions of
$24,182,200 and $24,380,300, respectively. During the years ended December 31,
1995 and 1994, the Partnership repurchased 1,981 units and 59 units,
respectively, for $15,000 and $800, respectively. The General Partners owned
1,039 units at both December 31, 1995 and 1994.
The General Partners and their affiliates are entitled to receive various fees
and compensation from the Partnership which are summarized as follows:
Operational Stage
- -----------------
The Partnership's investment properties were managed by Windsor Asset
Management, Inc. (WAMI), an affiliate of The Windsor Corporation, until November
1994. At that time, WAMI was merged into an independent company in which The
Windsor Corporation has a nominal equity position. For management services,
WAMI received 5% of gross property receipts. During the year ended December 31,
1994, WAMI received fees of $19,600. WAMI received no fees during the year
ended December 31, 1995.
The net profits, losses and cash distributions of the Partnership during the
operational stage are
16
<PAGE>
allocated 99% to the Limited Partners and 1% to the General Partners.
The Partnership reimburses The Windsor Corporation for certain direct expenses
and employee, executive and administrative time incurred on the Partnership's
behalf. The Partnership was charged $56,500 and $58,200 for such costs during
the years ended December 31, 1995 and 1994, respectively. These costs are
included in property operating and general and administrative expenses in the
accompanying Statements of Operations.
Liquidation Stage
- -----------------
During the Partnership's liquidation stage, the total compensation paid to all
persons for the sale of investment properties is limited to competitive real
estate commissions, not to exceed 6% of the contract price for the sale of the
property. The General Partners may receive up to one-half of the competitive
real estate commission, not to exceed 3%, if they provide a substantial amount
of services in the sales effort. The General Partners' commission is
subordinated to the Limited Partners receiving a 9% cumulative, non-compounded
annual return (Preferred Return) on their original capital investments. No
commissions were paid to the General Partners during the years ended December
31, 1995 and 1994.
The General Partners also receive 1% of profits, losses and 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 their Preferred Return.
During the years ended December 31, 1995 and 1994, the General Partners received
cash distributions of $1,500 and $4,500, respectively.
NOTE 3. PROPERTY HELD FOR INVESTMENT
----------------------------
Property held for investment consists of two manufactured home communities
summarized as follows:
<TABLE>
<CAPTION>
Name of Property Date Acquired Location
---------------- ------------------ -----------------------
<S> <C> <C>
Lakeside July 15, 1988 Lithia Springs, Georgia
Plantation Estates December 30, 1988 Douglasville, Georgia
</TABLE>
<TABLE>
<CAPTION>
December 31, 1995
-----------------
<S> <C>
Land $ 1,507,800
Buildings and improvements 2,039,900
Fixtures and equipment 28,200
-----------------
3,575,900
Less accumulated depreciation (749,000)
-----------------
$ 2,826,900
=================
</TABLE>
17
<PAGE>
NOTE 4. INVESTMENTS IN JOINT VENTURES
-----------------------------
The Partnership's investments in joint ventures consist of interests in three
manufactured home communities summarized as follows:
<TABLE>
<CAPTION>
Ownership
Name of Property Percentage Date Acquired Location
- ---------------- ---------- ------------------ ---------------------
<S> <C> <C> <C>
Town and Country Estates 42% January 17, 1989 Tucson, Arizona
Rancho Margate 26% September 20, 1995 Margate, Florida
Winter Haven 26% October 11, 1995 Winter Haven, Florida
</TABLE>
The remaining interests in the communities are owned by affiliated California
limited partnerships, which have the same General Partners as the Partnership.
In September 1995, the Partnership and an affiliated limited partnership jointly
obtained a $1,550,000 loan collateralized by the Town and Country Estates
community, a jointly owned property. The Partnership's share of this loan is
$651,000. The loan is payable in monthly interest only installments bearing
interest at 90 day LIBOR plus 2.95% (8.64% at December 31, 1995) and is due in
September 2002. The Partnership and the affiliated limited partnership are both
contingently liable for the full amount of the loan.
In September 1995, the Partnership purchased a 26% interest in the Rancho
Margate community for a total cost of $754,400. In connection with the
purchase, the joint venture assumed a $3,737,100 mortgage note of the seller.
The Partnership's share of this note is $971,600. The note, which is
collateralized by the property, is payable in monthly installments, including
interest at 50% of six month LIBOR plus 6.26% (9.13% at December 31, 1995) until
June 2003. Thereafter, the interest rate increases to 50% of six month LIBOR
plus 7.26%, until the note matures in July 2023. In a separate agreement, the
seller of the property will reimburse the joint venture for any interest expense
which, in total, exceeds 9.1% during the three year period subsequent to the
purchase. The seller has escrowed $87,000 to satisfy this potential obligation.
In October 1995, the Partnership purchased a 26% interest in the Winter Haven
community for a total cost of $494,000. In connection with the purchase, the
joint venture assumed a $1,641,600 mortgage note of the seller. The
Partnership's share of this note is $426,800. The note, which is collateralized
by the property, is payable in monthly installments, including interest at 50%
of six month LIBOR plus 6.26% (9.13% at December 31, 1995) until May 2003.
Thereafter, the interest rate increases to 50% of six month LIBOR plus 7.26%,
until the note matures in June 2023. In a separate agreement, the seller of the
property will reimburse the Partnership for any interest expense which, in
total, exceeds 9.1% during the year subsequent to the purchase. The seller has
escrowed $20,000 to satisfy this potential obligation.
The combined condensed financial position and results of operations of the joint
ventures (including Rancho Margate and Winter Haven since their dates of
purchase) follows:
18
<PAGE>
<TABLE>
<CAPTION>
Financial Position
- ------------------
December 31, 1995
-----------------
<S> <C>
Property held for investment, net $ 13,785,500
Cash 112,300
Other assets 239,500
-----------------
Total assets $ 14,137,300
=================
Mortgage notes payable $ 6,919,400
Accounts payable 50,800
Other liabilities 109,500
-----------------
Total liabilities 7,079,700
Partners' equity 7,057,600
-----------------
$ 14,137,300
=================
</TABLE>
<TABLE>
<CAPTION>
For the Year Ended December 31,
-------------------------------
Results of Operations 1995 1994
- --------------------- -------------- --------------
<S> <C> <C>
Property revenues $ 1,016,600 $ 525,800
-------------- --------------
Expenses:
Property operating 483,300 379,100
Depreciation 175,700 113,300
Interest 173,000
-------------- --------------
832,000 492,400
-------------- --------------
Net income $ 184,600 $ 33,400
============== ==============
</TABLE>
NOTE 5: MORTGAGE NOTE PAYABLE
---------------------
In September 1995, the Partnership obtained a $1,097,000 mortgage loan
collateralized by the Lakeside and Plantation Estates communities. The loan is
payable in monthly interest only installments bearing interest at 90 day LIBOR
plus 2.95% (8.64% at December 31, 1995) and is due in September 2002.
NOTE 6. NOTE RECEIVABLE FROM GENERAL PARTNERS
-------------------------------------
At the close of the offering in September 1988, the General Partners purchased
1,000 limited partnership units with a $100,000 promissory note. The unit
subscription note bears interest at prime and is due in September 1997. The
note receivable is accounted for as a reduction of Limited Partners' equity.
Interest receivable at December 31, 1995 was $28,300 and is included in other
assets on the balance sheet.
19
<PAGE>
NOTE 7. 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 years ended December 31, 1995 and 1994 follows:
<TABLE>
<CAPTION>
1995 1994
---------------------- ----------------------
Per Per
Amount Unit Amount Unit
---------- ------- ----------- -------
<S> <C> <C> <C> <C>
Net income
- limited partners $ 81,000 $ 0.33 $ 14,800 $ 0.06
Return of capital 69,000 0.29 435,200 1.79
---------- ------- ---------- -------
$ 150,000 $ 0.62 $ 450,000 $ 1.85
========== ======= ========== =======
</TABLE>
NOTE 8. INCOME TAXES
------------
Certain transactions of the Partnership are reported in different periods for
financial and tax reporting purposes. A reconciliation between amounts reported
for financial statement and federal tax return purposes as of December 31, 1995
and 1994 and for the years then ended follows:
<TABLE>
<CAPTION>
December 31, 1995 December 31, 1994
---------------------- ---------------------
Net Partners' Net Partners'
Income Equity Income Equity
---------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Per financial
statements $ 81,800 $4,585,400 $ 14,900 $4,670,100
Syndication costs 2,562,300 2,562,300
Note receivable 100,000 100,000
Gain on sale of
property held for
investment 705,100 705,100
Depreciation (15,000) (942,800) (12,700) (927,800)
Other (6,400) 5,100 4,900 11,500
---------- ---------- -------- ----------
Per partnership
tax return $ 60,400 $7,015,100 $ 7,100 $7,121,200
========== ========== ======== ==========
</TABLE>
NOTE 9. FAIR VALUE OF FINANCIAL INSTRUMENTS
-----------------------------------
The carrying amounts of cash and cash equivalents, accounts payable, accrued
expenses and other liabilities approximate fair value because of the short
maturity of the financial instruments. The mortgage note payable bears interest
at a variable rate indexed to LIBOR, therefore the General Partners believe the
carrying value of the note approximates fair value. The note receivable from
general partners bears interest at prime rate. Based on interest rates
currently available for loans with similar terms and maturities, the General
Partners believe the fair value of the note receivable from general partners,
including accrued interest, is $119,000.
20
<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 original general partners of the Partnership were The Windsor Corporation
(Windsor), and John A. Coseo, Jr. Mr. Coseo, his wife Patricia Ann Coseo and
their children owned a majority of the stock of Windsor.
In July 1994, Windsor merged into Windsor Group, Inc., a majority-owned
subsidiary. In conjunction with the merger, Windsor Group, Inc. changed its
name to The Windsor Corporation (Wincorp). Subsequent to the merger, Mr. Coseo,
his wife Patricia Ann Coseo and their children own a majority of the stock of
Wincorp.
Windsor and Wincorp were incorporated in 1977 and 1992, respectively, to engage
in the real estate syndication business. Since 1979 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 Windsor and Wincorp, their subsidiaries, and
affiliates 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 expected
to be spent on matters unrelated to the Partnership, particularly after the
completion of its offering and acquisition stages.
The names, ages, and nature of the positions held by the directors and executive
officers of Wincorp follow:
<TABLE>
<CAPTION>
Name Age Office
------------------ --- -------------------------------------------------
<S> <C> <C>
John A. Coseo, Jr. 57 Chairman of the Board and Chief Executive Officer
Patricia A. Coseo 54 Secretary and Director
</TABLE>
A brief background of the directors and executive officers follows.
John A. Coseo, Jr. (57) was the founder of Windsor in 1974 and has been actively
involved in all facets of the manufactured housing business since that time.
From 1979 to the present, Mr. Coseo has acted as general partner or advisor in
the acquisition and management of 55 manufactured home communities throughout
the United States. Mr. Coseo is the Chairman and chief executive officer of
Wincorp. Mr. Coseo is a general partner of seven limited partnerships which
have registered their securities under the Securities and Exchange Act of 1934.
Mr. Coseo is also Chairman, chief executive officer, and a trustee of Wincorp's
first sponsored real estate investment trust, Windsor Real Estate Investment
Trust 8. Mr. Coseo is the husband of Patricia A. Coseo.
Patricia A. Coseo (54) is and has been the Secretary and a Director of Windsor
and Wincorp for the
21
<PAGE>
past ten years. She is involved in corporate planning and development, and is
the spouse of John A. Coseo, Jr.
Item 10. EXECUTIVE COMPENSATION
----------------------
The Partnership has not paid and does not propose to pay any remuneration or
retirement benefits to the directors or executive officers of The Windsor
Corporation, its subsidiaries or affiliates. Refer to Item 12 (Certain
Relationships and Related Transactions) for management fees and expense
reimbursements paid to The Windsor Corporation and affiliates 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, 1995:
<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 39 .016%
Units of Limited The Windsor
Partnership Interest Corporation,
a General Partner 1,000 .414%
----- ----
Units of Limited All General Partners as
Partnership Interest a group 1,039 .430%
===== ====
</TABLE>
Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------
The following table reflects all compensation paid to the General Partners and
their affiliates during the years ended December 31, 1995 and 1994.
<TABLE>
<CAPTION>
Form of Compensation and Entity Receiving 1995 1994
- --------------------------------------------------------- ------- -------
<S> <C> <C>
Expense reimbursement - The Windsor Corporation $56,500 $58,200
Cash distributions - The Windsor Corporation $ 1,500 $ 4,500
Property management fees - Windsor Asset Management, Inc. $ -0- $19,600
</TABLE>
22
<PAGE>
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. 33-15878 and incorporated
herein by reference.
(b) Reports on Form 8-K
1) A Form 8-K (dated October 2, 1995) was filed with regards to the
Partnership's acquisition of a 26% interest in the Rancho Margate
manufactured home community located in Margate, Florida.
The item reported in this current report was Item 2 (acquisition
or disposition of assets).
2) A Form 8-K/A (dated October 25, 1995) was filed with regards to
the Partnership's acquisitions of 26% interests in both the
Rancho Margate and Winter Haven manufactured home communities
located in Margate, Florida and Winter Haven, Florida,
respectively.
The items reported in this current report were Item 2
(acquisition or disposition of assets) and Item 7 (financial
statements, proforma financial information and exhibits).
A summary of the financial information included in the report
follows:
a) Financial Statements and Proforma Financial Information of
Rancho Margate Manufactured Home Community.
b) Financial Statements and Proforma Financial Information of
Winter Haven Manufactured Home Community.
c) Proforma Financial Information of Windsor Park Properties 5.
23
<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 18th day of
March, 1996.
WINDSOR PARK PROPERTIES 5
A California Limited Partnership
By: /s/ John A. Coseo, Jr.
-----------------------------
JOHN A. COSEO, JR.
Individual General Partner
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/ John A. Coseo, Jr. General Partner and Chairman of the March 18, 1996
- ------------------------- Board of The Windsor Corporation
JOHN A. COSEO, JR. (Principal Executive Officer of The
Windsor Corporation)
/s/ Patricia A. Coseo Director of The Windsor Corporation March 18, 1996
- -------------------------
PATRICIA A. COSEO
</TABLE>
24
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
balance sheet of Windsor Park Properties 5 as of December 31, 1995 and the
related statements of operations, partners' equity and cash flows for the year
then ended and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 617,800
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 3,575,900
<DEPRECIATION> 749,000
<TOTAL-ASSETS> 5,759,100
<CURRENT-LIABILITIES> 0
<BONDS> 1,097,000
<COMMON> 0
0
0
<OTHER-SE> 4,585,400<F1>
<TOTAL-LIABILITY-AND-EQUITY> 5,759,100
<SALES> 0
<TOTAL-REVENUES> 536,200
<CGS> 0
<TOTAL-COSTS> 228,300
<OTHER-EXPENSES> 194,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 32,100
<INCOME-PRETAX> 81,800
<INCOME-TAX> 0
<INCOME-CONTINUING> 81,800
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 81,800
<EPS-PRIMARY> 0.33<F2>
<EPS-DILUTED> 0
<FN>
<F1> Limited and general partners equity.
<F2> Net income per limited partnership unit.
</FN>
</TABLE>
