<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 0-16642
WINDSOR PARK PROPERTIES 5, A CALIFORNIA LIMITED PARTNERSHIP
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(Exact name of small business issuer in its charter)
California 33-0243223
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(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: $736,200
DOCUMENTS INCORPORATED BY REFERENCE: None
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I
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Page
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<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
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Item 5. Market for the Partnership's Units and Related Security Holder Matters 7
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 20
PART III
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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 23
Item 13. Exhibits and Reports on Form 8-K 23
SIGNATURES 24
</TABLE>
2
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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 5, 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
-----------------------
Business Development
- --------------------
The Partnership was formed in June 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 ("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 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 partner
units ("Units"). A total of 243,729 Units were sold for gross proceeds
aggregating $24,372,900. In addition, the General Partners purchased 1,000 Units
with a $100,000 note. The offering commenced in September 1987 and terminated in
September 1988. The net proceeds from the offering were originally 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 nine properties. The
Partnership term is set to expire in December 2001; however, the Partnership may
either be dissolved and liquidated earlier or extended under certain
circumstances. The Partnership may be extended at the recommendation of the
General Partners with approval of a majority-in-interest of the Limited
Partners.
The General Partners are currently exploring possible strategic alternatives for
the Partnership with a view towards providing Limited Partners with the
opportunity to achieve liquidity in their investment. There can, however, be no
assurances that any such strategic alternative will be consummated or that the
Partnership will not continue in its current form until the end of its stated
term.
3
<PAGE>
The Partnership owns interests in the following manufactured home communities at
December 31, 1999:
<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
Apache East 9% February 1997 Apache Junction, Arizona
Denali Park Estates 9% February 1997 Apache Junction, Arizona
</TABLE>
The Partnership owns (i) a 42% partial ownership interest in Town and Country
Estates as a tenant in common with Windsor Park Properties 3, A California
Limited Partnership, (ii) a 26% limited partner interest in Windsor Park
Properties 456, A California Limited Partnership, which holds Rancho Margate and
Winter Haven, and (iii) a 9% limited partner interest in Windsor Park Properties
345, An Arizona Limited Partnership, which holds Apache East and Denali Park
Estates.
No further property financings or investment property acquisitions are planned
by the General Partners.
The overall occupancy of the seven manufactured home communities owned by the
Partnership at December 31, 1999 was approximately 95%. The General Partners
continue to maintain the properties in good condition and promote them to
improve occupancy.
Business of Issuer
- ------------------
The Partnership is in the business of managing, and eventually selling its
interests in, the seven manufactured home communities in its portfolio.
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.
The Partnership's 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 also with apartments and other forms of low cost housing that
might exist in their respective market areas.
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 TWC, which is reimbursed for costs incurred on behalf of the
Partnership. Chateau 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 owned interests in seven properties at December 31, 1999. The
Partnership operates the properties as manufactured home communities, renting
sites to manufactured home residents on a month-to-month basis. The properties
compete for rentals with other manufactured home communities and apartments in
their local markets. All of the Partnership's properties are encumbered with
outstanding mortgage indebtedness totaling approximately $10,770,200. It is the
General Partners' opinion that the properties are in good condition and are
adequately insured.
<TABLE>
<CAPTION>
Rancho Margate Lakeside Winter Haven
-------------- -------- ------------
Margate, Lithia 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) $ 407 $ 219 $ 232
Occupancy Level:
December 31, 1999 94% 96% 98%
Real Estate Taxes $ 154,800 $ 13,100 $ 41,800
Federal Tax Basis (3) $6,416,500 $ 271,500 $2,631,000
Mortgage Information:
Balance Payable $3,582,900 $1,097,000 $1,574,900
Interest Rate 9.32% 9.07% 9.32%
Amortization Period 30 years -- 30 years
Maturity Date 7/23 9/02 6/23
Balance Due at Maturity -- $1,097,000 --
</TABLE>
5
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<TABLE>
<CAPTION>
Plantation Town and Denali
Estates Country Estates Apache East Park Estates
----------------- -------------------- --------------------- ---------------------
Douglasville, Tucson, Apache Junction, Apache Junction,
Location Georgia Arizona Arizona Arizona
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Percentage of Ownership 100% 42% 9% 9%
Date Acquired 12/88 1/89 2/97 2/97
Acreage 29 38 16 33
Number of Spaces 138 320 123 162
Monthly Rents (1) $ 229.00 $ 239.00 $ 212.00 $ 228
Occupancy Level:
December 31, 1999 87% 96% 96% 94%
Real Estate Taxes $ 13,400 $ 38,100 $ 18,100 $ 25,300
Federal Tax Basis (3) $483,400 $1,138,600 $2,538,700 $2,729,800
Mortgage Information:
Balance Payable (2) $1,550,000 $2,965,400 (4)
Interest Rate (2) 9.07% 8.38% (4)
Amortization Period (2) -- 24 years (4)
Maturity Date (2) 9/02 3/06 (4)
Balance Due at Maturity (2) $1,550,000 $2,583,200 (4)
</TABLE>
_____________________________________
(1) Average rental rates in effect on December 31, 1999.
(2) Mortgage note information is the same as is set forth for 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.
(4) Mortgage note information is the same as is set forth for Apache East.
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.
6
<PAGE>
PART II
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Item 5. MARKET FOR THE PARTNERSHIP'S UNITS AND RELATED SECURITY HOLDER MATTERS
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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 2,884 holders of
record holding an aggregate of 232,437 Units.
Cash distributions paid to Limited Partners since December 31, 1997 are as
follows:
<TABLE>
<CAPTION>
Per $1,000
Aggregate Originally
Date Paid Amount (1) Invested (2)
- --------- ----------- ------------
<S> <C> <C>
August 1999 $96,100 $3.92
February 1999 $96,800 $3.95
August 1998 $96,900 $3.96
February 1998 $97,500 $3.98
</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, 1997 have
been $4,000.
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 "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.
Results of Operations
- ---------------------
The Partnership realized net income of $165,400 ($0.70 per Unit) for the year
ended December 31, 1999 and $98,300 ($0.41 per Unit) for the year ended December
31, 1998.
Rent and utilities revenues increased from $527,800 in 1998 to $544,900 in 1999.
This increase was primarily due to rent increases.
Equity in earnings of joint ventures and limited partnerships represents the
Partnership's share of the net income of the five manufactured home communities.
Equity in earnings of joint ventures and limited partnerships increased from
$102,700 in 1998 to $155,300 in 1999, due mainly to rent increases at all of the
communities. The overall occupancy of these five properties was 96% at December
31, 1999.
Interest income remained relatively constant from $20,700 in 1998 to $19,200 in
1999.
Property operating costs decreased slightly from $253,500 in 1998 to $246,000 in
1999, due mainly to decreases in repairs and maintenance and marketing expenses.
7
<PAGE>
Interest expense remained relatively constant from $103,100 in 1998 to $99,800
in 1999.
General and administrative expense increased from $92,500 in 1998 to $113,000 in
1999, mainly due to an increase in legal fees.
Liquidity and Capital Resources
- -------------------------------
The Partnership's primary sources of liquidity during the years ended December
31, 1999 and 1998 were its cash flow generated from the operations of its
communities and distributions from investments in joint ventures and limited
partnerships. Net cash provided by operating activities was $232,900 and
$256,500 for the ended December 31, 1999 and 1998, respectively. At December
31, 1999, the partnership's cash amounted to $543,200.
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 $194,900 and $196,400 for the years ended December 31, 1999 and
1998, respectively.
The Partnership's principal long-term liquidity requirement will be the
repayment of principal on its outstanding mortgage debt. At December 31, 1999,
the Partnership's total mortgage debt, including its proportionate share of
joint venture and limited partnership debt, was approximately $3,355,900,
consisting entirely of variable rate debt. The average rate of interest on this
debt was 9.12% at December 31, 1999. The Partnership and the affiliated
entities are contingently liable for the full amounts of the loans obtained
jointly through joint ventures and limited partnerships.
The future sources of liquidity for the Partnership will be provided from
property operations, cash reserves and ultimately from the sale of its
communities and investments in joint ventures and limited partnerships. The
Partnership expects to meet its short-term liquidity requirements, including
capital expenditures, administration expenses, debt service, and distributions
to partners, from cash flow provided from property operations and distributions
from investments in joint ventures and limited partnerships. The Partnership
expects to meet its long-term liquidity requirements through the sale of its
communities and investments in joint ventures and limited partnerships and the
use of cash reserves.
Inflation
- ---------
All of the leases or terms of tenants' occupancies at the properties allow for
at least annual rental adjustments. In addition, all of the leases are month-
to-month and enable the Partnership to seek market rentals upon reletting the
sites. Such leases generally minimize the risk to the Partnership of any
adverse effect of inflation.
Year 2000 Compliance
- --------------------
The 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.
8
<PAGE>
Item 7. FINANCIAL STATEMENTS
--------------------
The following financial statements are filed as a part of this report:
<TABLE>
<CAPTION>
Page
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<S> <C>
Report of Independent Accountants 10
Balance Sheet as of December 31, 1999 11
Statements of Operations for the Years Ended
December 31, 1999 and 1998 12
Statements of Partners' Equity for the Years Ended
December 31, 1999 and 1998 13
Statements of Cash Flows for the Years Ended
December 31, 1999 and 1998 14
Notes to Financial Statements 15
</TABLE>
9
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of Windsor Park Properties 5,
(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 5, 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
10
<PAGE>
WINDSOR PARK PROPERTIES 5
----------------------------------
(A California Limited Partnership)
BALANCE SHEET
-------------
<TABLE>
<CAPTION>
ASSETS December 31, 1999
- ------ -----------------
<S> <C>
Property held for investment, net $2,524,600
Investments in joint ventures and limited partnerships 2,052,500
Cash and cash equivalents 543,200
Deferred financing costs, net 24,700
Other assets 106,700
-----------------
Total Assets $5,251,700
=================
LIABILITIES AND PARTNERS' EQUITY
- --------------------------------
Liabilities:
Mortgage note payable $1,097,000
Accrued expenses 66,900
Tenant deposits and other liabilities 33,100
Due to general partners and affiliates 39,500
-----------------
Total Liabilities 1,236,500
-----------------
Commitments and Contingencies (Note 8)
Partners' Equity:
Limited partners 3,994,600
General partners 20,600
-----------------
Total Partners' Equity 4,015,200
-----------------
Total Liabilities and Partners' Equity $5,251,700
=================
</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,
----------------------------------------------
1999 1998
--------------------- --------------------
REVENUES
- --------
<S> <C> <C>
Rent and utilities $544,900 $527,800
Equity in earnings of joint ventures and limited partnerships 155,300 102,700
Interest 19,200 20,700
Other 16,800 10,200
--------------------- ---------------------
736,200 661,400
--------------------- ---------------------
COSTS AND EXPENSES
- ------------------
Property operating expenses 246,000 253,500
Depreciation 112,000 114,000
Interest 99,800 103,100
General and administrative:
Related parties 20,600 24,400
Other 92,400 68,100
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570,800 563,100
--------------------- ---------------------
Net income $165,400 $ 98,300
===================== =====================
Net income - general partners $ 1,700 $ 1,000
===================== =====================
Net income - limited partners $163,700 $ 97,300
===================== =====================
Basic and diluted earnings per limited partnership unit $ 0.70 $ 0.41
===================== =====================
</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, 1999 AND 1998
----------------------------------------------
<TABLE>
<CAPTION>
General
Partners Limited Partners Total
-------------- ---------------- -------------
<S> <C> <C> <C>
Balance at
December 31, 1997 $21,900 $4,218,000 $4,239,900
Cash distributions (2,000) (194,400) (196,400)
Net income 1,000 97,300 98,300
Repurchase of limited
partnership units (41,600) (41,600)
-------------- ---------------- -------------
Balance at
December 31, 1998 $20,900 $4,079,300 $4,100,200
Cash distributions (2,000) (192,900) (194,900)
Net income 1,700 163,700 165,400
Repurchase of limited
partnership units (55,500) (55,500)
-------------- ---------------- -------------
Balance at
December 31, 1999 $20,600 $3,994,600 $4,015,200
============== ================ =============
</TABLE>
See accompanying notes to financial statements.
13
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WINDSOR PARK PROPERTIES 5
----------------------------------
(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 $ 165,400 $ 98,300
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 112,000 114,000
Equity in earnings of joint ventures and limited partnerships (155,300) (102,700)
Joint ventures' and limited partnerships cash distributions 155,300 102,700
Amortization of deferred financing costs 9,100 9,000
Changes in operating assets and liabilities:
(Increase) decrease in other assets (85,300) 7,500
Decrease in accounts payable (900) (4,000)
Increase (decrease) in due to general partner and affiliates 32,400 (13,900)
(Decrease) increase in accrued expenses (4,300) 51,900
(Increase) decrease in tenant deposits and other liabilities 4,500 (6,300)
---------------------- --------------------
Net cash provided by operating activities 232,900 256,500
---------------------- --------------------
Cash flows from investing activities:
Joint ventures' and limited partnerships' cash distributions 120,400 166,600
Increase in property held for investment (32,300) (74,400)
Investment in joint venture and limited partnerships (10,100) (4,900)
---------------------- --------------------
Net cash provided by investing activities 78,000 87,300
---------------------- --------------------
Cash flows from financing activities:
Cash distributions (194,900) (196,400)
Repurchase of limited partnership units (55,500) (41,600)
---------------------- --------------------
Net cash used in financing activities (250,400) (238,000)
---------------------- --------------------
Net increase in cash and cash equivalents $ 60,500 $ 105,800
Cash and cash equivalents at beginning of year 482,700 376,900
---------------------- --------------------
Cash and cash equivalents at end of year $ 543,200 $ 482,700
====================== ====================
Supplemental disclosure of cash flow information:
Cash paid during the year of interest (none capitalized) $ 90,735 $ 95,693
====================== ====================
</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 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, a California corporation ("TWC"), and
John A. Coseo, Jr. (together with TWC, the "General Partners"). In September
1998, 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 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-in-interest of the Limited
Partners.
Property Held For Investment
- ----------------------------
Property held for investment is carried at cost unless facts and circumstances
indicate that the carrying value of the property may be impaired. Impairment is
determined by comparing the estimated future cash flows (undiscounted and
without interest charges) from an individual property to its carrying value. If
such cash flows are less than the property's carrying value, the carrying value
of the property is written down to its estimated fair value. No such writedowns
were recorded for the years ended December 31, 1999 or 1998.
Property held for investment is 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.
Investments in Joint Ventures and Limited Partnerships
- ------------------------------------------------------
The investments in joint ventures are accounted for utilizing the equity method
as the properties are subject to joint control requiring approval or mutual
agreement of the investees. The investment in limited partnerships is also
accounted for utilizing the equity method as the Limited Partners have
significant rights.
Financing Costs
- ---------------
Financing costs are amortized to interest expense over the life of the note
utilizing a method which approximates the effective interest method.
Income Taxes
- ------------
Under provisions of the Internal Revenue Code of 1986, as amended, 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.
15
<PAGE>
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 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 234,224 and
237,277, 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.
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.
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 232,437
and 235,716, respectively, which represented capital contributions of
$23,243,700 and $23,571,600, respectively. During the years ended December 31,
1999 and 1998, the Partnership repurchased 3,279 units and 2,921 units,
respectively, for $55,500 and $41,600, respectively from the limited partners.
The General Partners owned 1,039 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. During the years ended December 31, 1999 and 1998, the
general partners received cash distributions from operations of $2,000.
TWC receives a management fee which is based on a percent of actual gross
receipts collected from the operations of the properties. For the years ended
December 31, 1999 and 1998, the amounts paid to TWC were $32,300 and $31,600
respectively.
The Partnership reimburses TWC for certain direct expenses and employee,
executive and administrative time incurred on the Partnership's behalf. The
Partnership was charged $20,600 and $24,400 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
$39,500.
16
<PAGE>
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, 1999 and 1998.
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 their
Preferred 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 $2,000 for each of the years
ended December 31, 1999 and 1998.
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
December 31, 1999
-----------------
<S> <C>
Land $ 1,507,800
Building and improvements 2,147,400
Construction in progress 2,600
Fixtures and equipment 56,700
-----------------
3,714,500
Less accumulated depreciation (1,189,900)
-----------------
$ 2,524,600
==================
</TABLE>
17
<PAGE>
NOTE 4. INVESTMENTS IN JOINT VENTURES AND LIMTED PARTNERSHIPS
-----------------------------------------------------
The Partnership's investments in joint ventures consist of interests in one
manufactured home community 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
</TABLE>
The Partnership's interest in the four remaining communities are owned through
affiliated Arizona and California limited partnerships, which have the same
General Partners as the Partnership.
<TABLE>
<CAPTION>
Ownership
Name of Property Percentage Date Acquired Location
- ---------------- ---------- ------------- --------
<S> <C> <C> <C>
Rancho Margate 26% September 20, 1995 Margate, Florida
Winter Haven 26% October 11, 1995 Winter Haven, Florida
Apache East 9% February 18 1997 Apache Junction, Arizona
Denali Park Estates 9% February 18, 1997 Apache Junction, Arizona
</TABLE>
18
<PAGE>
NOTE 4. INVESTMENTS IN JOINT VENTURES AND LIMTED PARTNERSHIPS (Continued)
------------------------------------------------------
The combined condensed financial position and results of operations of the joint
ventures and limited partnerships are as follows:
<TABLE>
<CAPTION>
Financial Position December 31, 1999
- ------------------ -----------------
<S> <C> <C>
Property held for investment, net $17,621,600
Cash 183,300
Other assets 299,900
-----------------
Total assets
$18,104,800
=================
Mortgage notes payable $ 9,673,400
Accounts payable 7,300
Other liabilities 320,000
-----------------
Total liabilities 10,000,700
Partners' equity 8,104,100
-----------------
Total liabilities and partners'
equity $18,104,800
=================
For the Year Ended December 31,
--------------------------------------------------------------------
Results of Operations 1999 1998
- --------------------- ---------------------------------- -----------------------------
Property revenues $3,331,100 $ 3,174,300
Expenses:
Property operating 1,441,800 1,491,000
Interest 861,800 917,200
Depreciation 622,800 587,700
---------------------------------- -----------------------------
$2,926,400 $ 2,995,900
---------------------------------- -----------------------------
Net income $ 404,700 $ 178,400
================================== =============================
</TABLE>
NOTE 5: MORTGAGE NOTE PAYABLE
---------------------
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% (9.07% at
December 31, 1999) and is due in September 2002.
19
<PAGE>
NOTE 6. 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 $163,700 $0.70 $ 97,300 $0.41
Return of capital 29,200 0.13 97,100 0.41
--------------- --------------- --------------- ---------------
Total Distribution $192,900 $0.83 $194,400 $0.82
=============== =============== =============== ===============
</TABLE>
NOTE 7. 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 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.
NOTE 8. 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.
The Partnership is jointly and severally liable for $9,673,300 of debt issued by
affiliated entities in which it has a joint venture or limited partnership
investment.
NOTE 9. 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 $27,600 and $26,500
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 $74,700 and $62,600 for
the years ended December 31, 1999 and 1998, respectively.
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.
20
<PAGE>
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:
<TABLE>
<CAPTION>
Name Age Office
- ------------------------------------------ ------------ -------------------------------------------------------
<S> <C> <C>
Steven G. Waite 45 President and Director
Gary P. McDaniel 54 Director
C.G. Kellogg 56 Director
</TABLE>
A brief background of the general partners, directors and certain executive
officers of TWC follows.
Steven G. Waite (45) joined TWC in August 1998 as President. Since 1991, until
his involvement with Windsor, 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 1998. He
served as the Chairman of the Board, President and Chief Executive Officer for
ROC Communities, Inc., which merged with Chateau in 1998. Since 1993, he has
been an executive and shareholder of ROC and its predecessors since 1979, and
has been active in the manufactured home industry since 1972. Mr. McDaniel is
also a trustee of N'Tandem Trust, which is advised by TWC. 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 States Air Force.
C.G. ("Jeff") Kellogg (56) has been President and a director of Chateau since
its inception and was Chief Executive Officer of Chateau from its inception to
February 1998. For the five years preceding the formation of Chateau, 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.
21
<PAGE>
John A. Coseo, Jr. (60) the other general partner of the Partnership 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 director and executive officer of TWC in 1998. 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. and 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 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
Title of Class Beneficial Owner Beneficial Ownership Percent of Class
- ---------------------- ------------------------ --------------------------- ----------------------
<S> <C> <C> <C>
Units of Limited John A Coseo, Jr.
Partnership Interest a General partner 39 0.017%
Units of Limited The Windsor Corporation,
Partnership Interest a General Partner 1,000 0.424%
----- -----
Units of Limited All General Partners
Partnership Interest as a group 1,039 0.441%
===== =====
</TABLE>
22
v
<PAGE>
Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------
The following table reflects all compensation paid to the General Partners
during the years ended December 31, 1999 and 1998.
<TABLE>
<CAPTION>
Form of Compensation and Entity Receiving 1999 1998
- ----------------------------------------- ------------------- --------------------
<S> <C> <C>
Expense reimbursement - TWC $20,600 $24,400
Cash distributions - TWC $ 2,000 $ 2,000
-------------------- --------------------
$22,600 $26,400
==================== ====================
</TABLE>
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.
(27) - Financial Data Schedule
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the last
quarter of the period covered by this Form 10-KSB.
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 30th day of March,
2000.
WINDSOR PARK PROPERTIES 5,
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, March 30, 2000
- ------------------------------- a general partner.
STEVEN G. WAITE
/s/Gary P. McDaniel Director of The Windsor Corporation, a March 30, 2000
- ------------------------------- general partner.
GARY P. MCDANIEL
/s/C.G. Kellogg Director of The Windsor Corporation, a March 30, 2000
- ------------------------------- general partner.
C.G. KELLOGG
/s/John A. Coseo, Jr. General Partner March 30, 2000
- -------------------------------
JOHN A. COSEO, JR.
</TABLE>
24
<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> 543,200
<SECURITIES> 0
<RECEIVABLES> 106,700
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 2,524,600
<DEPRECIATION> 0
<TOTAL-ASSETS> 5,251,700
<CURRENT-LIABILITIES> 0
<BONDS> 1,097,000
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 5,251,700
<SALES> 0
<TOTAL-REVENUES> 736,200
<CGS> 0
<TOTAL-COSTS> 246,000
<OTHER-EXPENSES> 225,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 99,800
<INCOME-PRETAX> 165,400
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 165,400
<EPS-BASIC> 0.70
<EPS-DILUTED> 0.70
</TABLE>
