<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly period ended June 30, 1999
-----------------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
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 as specified in its charter)
California 33-0243223
- ------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
6160 S. Syracuse Way, Greewood Village, Colorado 80111
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(Address of principal executive offices)
(303)741-3707
---------------------------------------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes (x) No ( )
--- ----
Transitional small business disclosure format (check one): Yes [ ] No [X]
<PAGE>
TABLE OF CONTENTS
PART I
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Page
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Item 1. Financial Statements 2
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II
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Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURE 12
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PART I
------
Certain matters discussed under the Management's Discussion and Analysis of
Financial Condition and Results of Operations and elsewhere in this Quarterly
Report on Form 10-QSB may constitute forward-looking statements for purposes of
Section 21E of the Securities Exchange Act of 1934, as amended, 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 5, a
California Limited Partnership, to be materially different from any future
results, performance or achievements expressed or implied by such forward-
looking statements.
1
<PAGE>
Item 1. Financial Statements
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<TABLE>
<CAPTION>
WINDSOR PARK PROPERTIES 5
-------------------------
(A California Limited Partnership)
BALANCE SHEET
--------------
(unaudited)
June 30, 1999
----------------------------
ASSETS
- ------
Property held for investment:
<S> <C>
Land $ 1,507,800
Buildings and improvements 2,140,000
Fixtures and equipment 49,600
----------------------------
3,697,400
Less accumulated depreciation (1,134,300)
----------------------------
2,563,100
Investments in joint ventures and limited partnerships 2,153,900
Cash and cash equivalents 521,700
Deferred financing costs 29,200
Other assets 37,200
----------------------------
Total Assets $ 5,305,100
============================
LIABILITIES AND PARTNERS' EQUITY
- --------------------------------
Liabilities:
Mortgage note payable $ 1,097,000
Accrued expenses 73,200
Due to General Partners and affiliates 12,100
Tenant deposits and other liabilities 29,600
----------------------------
Total Liabilities 1,211,900
----------------------------
Partners' equity:
Limited partners 4,072,200
General partners 21,000
----------------------------
4,093,200
----------------------------
Total Liabilities and Partner's Equity $ 5,305,100
============================
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
WINDSOR PARK PROPERTIES 5
--------------------------
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
-------------------------
(unaudited)
Three Months Ended June 30,
-----------------------------------------------------
1999 1998
------------------------- ------------------------
REVENUES
- --------
<S> <C> <C>
Rent and utilities $ 137,600 $ 132,500
Equity in earnings of joint ventures and limited
partnerships 42,400 26,600
Interest 4,300 2,500
Other 2,200 2,800
------------------------- ------------------------
186,500 164,400
------------------------- ------------------------
COSTS AND EXPENSES
- ------------------
Property operating 64,900 65,200
Depreciation and amortization 28,500 27,100
Interest 24,000 26,100
General and administrative:
Related parties 3,800 6,400
Other 18,900 15,100
------------------------- ------------------------
140,100 139,900
------------------------- ------------------------
Net income $ 46,400 $ 24,500
========================= ========================
Net income - general partners $ 500 $ 200
========================= ========================
Net income - limited partners $ 45,900 $ 24,300
========================= ========================
Basic and diluted earnings per limited partnership
unit $ 0.20 $ 0.10
========================= ========================
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
WINDSOR PARK PROPERTIES 5
--------------------------
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
-------------------------
(unaudited)
Six Months Ended June 30,
-----------------------------------------------------
1999 1998
------------------------- ------------------------
REVENUES
- --------
<S> <C> <C>
Rent and utilities $ 269,800 $ 259,300
Equity in earnings of joint ventures and limited
partnerships 86,100 57,400
Interest 8,600 10,200
Other 14,000 5,500
------------------------- ------------------------
378,500 332,400
------------------------- ------------------------
COSTS AND EXPENSES
- ------------------
Property operating 120,400 130,700
Depreciation and amortization 56,400 54,100
Interest 48,400 52,600
General and administrative:
Related parties 7,100 13,800
Other 35,300 32,000
------------------------- ------------------------
267,600 283,200
------------------------- ------------------------
Net income $ 110,900 $ 49,200
========================= ========================
Net income - general partners $ 1,100 $ 500
========================= ========================
Net income - limited partners $ 109,800 $ 48,700
========================= ========================
Basic and diluted earnings per limited partnership
unit $ 0.47 $ 0.20
========================= ========================
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
WINDSOR PARK PROPERTIES 5
--------------------------
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
-------------------------
(unaudited)
<S> <C> <C>
Six Months Ended June 30,
------------------------------------------------------
1999 1998
------------------------- ------------------------
Cash flows from operating activities:
Net income (loss) $ 110,900 $ 49,200
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization 56,400 54,100
Equity in earnings of joint ventures and
limited partnerships (86,100) (57,400)
Joint ventures' and limited partnerships cash
distributions 86,100 57,400
Amortization of deferred financing costs 4,600 4,500
Changes in operating assets and liabilities:
(Increase) decrease in other assets (15,800) (8,900)
Accounts payable (900) (4,900)
Accrued expenses 2,000 35,000
Due to general partners and affiliates 5,000 (14,500)
Tenant deposits and other liabilities 1,000 (6,000)
------------------------- ------------------------
Net cash provided by operating activities 163,200 108,500
------------------------- ------------------------
Cash flows from investing activities:
Investment in joint venture and limited (20,000) 100
partnerships
Joint ventures' and limited partnerships cash 28,900 115,700
distributions
Increase in property held for investment (15,200) (70,100)
------------------------- ------------------------
Net cash (used in) provided by investing activities (6,300) 45,700
------------------------- ------------------------
Cash flows from financing activities:
Cash distributions (97,800) (98,500)
Repurchase of limited partnership units (20,100) (20,700)
------------------------- ------------------------
Net cash used in financing activities (117,900) (119,200)
------------------------- ------------------------
Net increase (decrease) in cash and cash equivalents 39,000 35,000
Cash and cash equivalents at beginning of period 482,700 376,900
------------------------- ------------------------
Cash and cash equivalents at end of period $ 521,700 $ 411,900
========================= ========================
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
WINDSOR PARK PROPERTIES 5
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE 1. THE PARTNERSHIP
---------------
Windsor Park Properties 5, A California Limited Partnership (the "Partnership"),
was formed in June 1987 for the purpose of acquiring and holding existing
manufactured home communities for investment. The General Partners of the
Partnership are The Windsor Corporation ("TWC"), a California corporation, and
John A. Coseo, Jr. In September 1998, Chateau Communities Inc., a publicly held
real estate investment trust, ("Chateau"), purchased 100 percent of the shares
of The Windsor Corporation.
The Partnership was funded through a public offering of 244,729 limited
partnership units at $100 per unit which commenced in September 1987 and
terminated in September 1988. The Partnership term is set to expire in December
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 in September 1987 and thus, many of our current
Limited Partners have held an investment in the Partnership for more than 11
years. The General Partners believe that many of the Limited Partners would
like to have the opportunity to achieve liquidity in their investment in the
Partnership. Accordingly, the General Partners are currently exploring possible
strategic alternatives for the Partnership with a view towards providing Limited
Partners with the opportunity to achieve liquidity in their investment. There
can, however, be no assurances that any proposal determined by the General
Partners to be in the best interests of the Limited Partners will be consummated
or that the Partnership will not continue in its current form until the end of
its stated term.
NOTE 2. BASIS OF PRESENTATION
---------------------
The balance sheet at June 30, 1999 and the related statements of operations for
the three and six months ended June 30, 1999 and 1998 and the statements of cash
flows for the six months ended June 30, 1999 and 1998 are unaudited. However, in
the opinion of the General Partners, they contain all adjustments, of a normal
recurring nature, necessary for a fair presentation of such financial
statements. Interim results are not necessarily indicative of results for a
full year.
The financial statements and notes are presented as permitted by Form 10-QSB and
do not contain certain information included in the Partnership's annual
financial statements and notes on Form 10-KSB for the year ended December 31,
1998.
6
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NOTE 3. INVESTMENTS IN JOINT VENTURES AND LIMITED PARTNERSHIPS
------------------------------------------------------
The Partnership's investments in joint ventures and limited partnerships consist
of interests in five manufactured home communities at 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 1998 are as
follows:
<TABLE>
<CAPTION>
1999 1998
---------------------- ---------------------
<S><C> <C> <C>
Property revenues $ 1,668,700 $ 1,604,200
Expenses:
Property operating 709,700 719,100
Interest 430,400 472,700
Depreciation 295,700 292,300
General and administrative 11,500 9,400
------------------------- ------------------------
1,447,300 1,493,500
------------------------- ------------------------
Net income $ 221,400 $ 110,700
========================= ========================
</TABLE>
NOTE 4. BASIC AND DILUTIVE EARNINGS (LOSS) PER LIMITED PARTNERSHIP UNIT
---------------------------------------------------------------
Basic and dilutive earnings (loss) per limited partnership unit is calculated
based on the weighted average number of limited partnership units outstanding
during the period and the net income (loss) allocated to the Limited Partners.
The weighted average number of limited partnership units outstanding during the
three and six months ended June 30, 1999 was 234,903 and 235,253, respectively;
and 237,829 and 238,168 for the three and six months ended June 30, 1998,
respectively.
NOTE 5. DISTRIBUTIONS TO LIMITED PARTNERS
---------------------------------
Distributions to Limited Partners in excess of net income allocated to Limited
Partners are considered a return of capital. A breakdown of cash distributions
to Limited Partners for the six months ended June 30, 1999 and 1998 follows:
<TABLE>
<CAPTION>
1999 1998
-------------------------------------------- --------------------------------------------
Per Per
Amount Unit Amount Unit
--------------------- --------------- ----------------------- ------------
<S> <C> <C> <C> <C>
Net income-limited partners $ 109,800 $ .47 $ 48,700 $ 0.20
Return of capital - - 51,300 0.22
Net income in excess of
distributions (13,000) (.06) - -
--------------------- --------------- ----------------------- ------------
$ 96,800 $ .41 $ 100,000 $ 0.42
===================== =============== ======================= ============
</TABLE>
7
<PAGE>
Item 2.
- -------
Management's Discussion and Analysis of Financial
Condition and Results of Operations
-----------------------------------
Three months ended June 30, 1999 as compared to three months ended June 30, 1998
- --------------------------------------------------------------------------------
The following discussion should be read in conjunction with the financial
statements and notes thereto included elsewhere in this Form 10-QSB.
Results of Operations
- ---------------------
The Partnership's net income was $46,400 and $24,500 for the three months ended
June 30, 1999 and 1998, respectively. The net income per limited partnership
unit was $0.20 in 1999 compared to $0.10 in 1998.
Rent and utilities revenues increased from $132,500 in 1998 to $137,600 in 1999
due to rent increases and increased occupancy at both the Lakeside and
Plantation Estates communities.
Equity in earnings of joint ventures and limited partnerships represents the
Partnership's share of the net income of five manufactured home communities.
Equity in earnings of joint ventures and limited partnerships increased from
$26,600 in 1998 to $42,400 in 1999, mainly due to rent increases recognized at
the Town & Country Estates, Rancho Margate, Apache East and Denali Park
communities.
Property operating expenses remained relatively constant at $64,900 in 1999
compared to $65,200 in 1998.
Interest expense remained relatively constant at $24,000 in 1999 compared to
$26,100 in 1998.
General and administrative expense remained relatively constant at $22,700 in
1999 compared to $21,500 in 1998.
Six months ended June 30, 1999 as compared to six months ended June 30, 1998
- ----------------------------------------------------------------------------
Results of Operations
- ---------------------
The Partnership's net income was $110,900 and $49,200 for the six months ended
June 30, 1999 and 1998, respectively. The net income per limited partnership
unit was $0.47 in 1999 compared to $0.20 in 1998.
Rent and utilities revenues increased from $259,300 in 1998 to $269,800 in 1999
due to rent increases and increased occupancy at both the Lakeside and
Plantation Estates communities.
Equity in earnings of joint ventures and limited partnerships represents the
Partnership's share of the net income of five manufactured home communities.
Equity in earnings of joint ventures and limited partnerships increased from
$57,400 in 1998 to $86,100 in 1999, mainly due to rent increases recognized at
the Town & Country Estates, Rancho Margate, Winterhaven and Apache East
communities.
Property operating expenses decreased from $130,700 in 1998 to $120,400 in 1999,
primarily due to lower advertising and property tax expenses.
Interest expense decreased from $52,600 in 1998 to $48,400 in 1999 due to lower
interest rates.
General and administrative expense decreased from $45,800 in 1998 to $42,400 in
1999 due mainly to lower employee time charged to the General Partners.
8
<PAGE>
Liquidity and Capital Resources
- -------------------------------
The Partnership's primary sources of cash during the six months ended
June 30, 1999 were from the operations of its investment properties and cash
distributions from joint ventures. The primary uses of cash during the same
period were for cash distributions to partners.
No further investment property acquisitions are planned by the General Partners.
At June 30, 1999, the Partnership's total mortgage debt, including its
proportionate share of joint venture debt, was $3,366,300, consisting entirely
of variable rate debt. The average rate of interest on the variable rate debt
was 8.37% at June 30, 1999.
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,
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.
Inflation
- ---------
All of the leases or terms of tenants' occupancies at the properties allow for
at least annual rental adjustments. In addition, all of the leases are month-to-
month and enable the Partnership to seek market rentals upon reletting the
sites. Such leases generally minimize the risk to the Partnership of any
adverse effect of inflation.
Year 2000 Compliance
- --------------------
The General Partners have assessed the impact of the year 2000 issue on its
reporting systems and operations. The year 2000 issue exists because many
computer systems and applications abbreviate dates by eliminating the first two
digits of the year, assuming that these two digits are always "19". As a
result, date-sensitive computer programs may recognize a date using "00" as the
year 1900 rather than the year 2000. Unless corrected, the potential exists for
computer system failures or incorrect processing of financial and operational
information, which could disrupt operations.
Substantially all of the computer systems and applications and operating systems
in use in use by the Windsor Corporation and the properties have been, or are in
the process of being upgraded and modified. The Partnership is of the opinion
that, in connection with those upgrades and modifications, it has addressed
applicable year 2000 issues as they might affect the computer systems and
applications located in the Partnership's offices and properties. The
Partnership anticipates that implementation of solutions to any year 2000 issue
which it may discover will require the expenditure of sums which the Partnership
does not expect to be material.
The Partnership is exposed to the risk that one or more of its vendors or
service providers may experience year 2000 problems which impact the ability of
such vendor or service provider to provide goods and services. Due to the
availability of alternative suppliers, this is not considered as significant a
risk with respect to the suppliers of goods. The disruption of certain
services, however, such as utilities, could, depending upon the extent of the
disruption, have a material adverse impact on the Partnership's operations. To
date, the Partnership is not aware of any vendor or service provider year 2000
issue that management believes would have a material adverse impact on the
Partnership's operations. The Partnership, however, has no means of ensuring
that its vendors or service providers will be year 2000 ready. The inability of
vendors or service providers to complete the year 2000 resolution process in a
timely fashion could have an adverse impact on the Partnership and the effect of
non-compliance by vendors or service providers is not determinable at this time.
Residents who pay rent to the Partnership
9
<PAGE>
do not pose year 2000 problems for the Partnership given the type and nature of
the Partnership's properties and residents.
Widespread disruptions in the national or international economy, including
disruptions affecting the financial markets, resulting from year 2000 issues, or
in certain industries, such as commercial or investment banks, could also have
an adverse impact on the Partnership. The likelihood and effect of such
disruptions is not determinable at this time.
Management expects to have all systems appropriately modified before any
significant processing malfunctions could occur and does not expect the year
2000 issue will materially impact the financial condition or operations of the
Partnership.
10
<PAGE>
PART II
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Item 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits and Index of Exhibits
(3) Certificate and Agreement of Limited Partnership filed as
Exhibit A to Registration Statement No. 33-15878 and
incorporated herein by reference.
(27) Financial Data Schedule
(b) Reports on Form 8-K
None
11
<PAGE>
SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
WINDSOR PARK PROPERTIES 5,
A California Limited Partnership
By: The Windsor Corporation, its general partner
By /s/ Steven G. Waite
------------------------------------
STEVEN G. WAITE
President
Date: August 13, 1999
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 521,700
<SECURITIES> 0
<RECEIVABLES> 37,200
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 3,697,400
<DEPRECIATION> (1,134,300)
<TOTAL-ASSETS> 5,305,100
<CURRENT-LIABILITIES> 0
<BONDS> 1,097,000
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 5,305,100
<SALES> 0
<TOTAL-REVENUES> 378,500
<CGS> 0
<TOTAL-COSTS> 120,400
<OTHER-EXPENSES> 98,800
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 48,400
<INCOME-PRETAX> 110,900
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 110,900
<EPS-BASIC> .47
<EPS-DILUTED> .47
</TABLE>
