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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 September 30, 2000
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____________ to ____________
Commission file number 0-16642
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WINDSOR PARK PROPERTIES 5, A CALIFORNIA LIMITED PARTNERSHIP
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(Exact name of small business issuer as specified in its charter)
California 33-0243223
(State or other jurisdiction of
incorporation or organization) (IRS Employer Identification No.)
6160 So. Syracuse Way, Greenwood Village, Colorado 80111
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(Address of principal executive offices)
(303) 741-3707
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(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 ( )
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Transitional small business disclosure format (check one): Yes [ ] No [X]
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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 10
SIGNATURE 11
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PART I
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Certain matters discussed under "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and elsewhere in this Quarterly
Report on Form 10-QSB 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, to be materially different from any future
results, performance or achievements expressed or implied by such forward-
looking statements.
1
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Item 1. Financial Statements
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WINDSOR PARK PROPERTIES 5
-------------------------
(A California Limited Partnership)
BALANCE SHEET
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(Unaudited)
<TABLE>
<CAPTION>
ASSETS September 30, 2000
------ ------------------
<S> <C>
Property held for investment, net $ 2,477,000
Investments in joint ventures and limited partnerships 1,906,700
Cash and cash equivalents 589,000
Deferred financing costs, net 17,900
Other assets 198,700
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Total Assets $ 5,189,300
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LIABILITIES AND PARTNERS' EQUITY
--------------------------------
Liabilities:
Mortgage note payable $ 1,097,000
Accrued expenses 82,100
Other liabilities 35,700
Due to general partners and affiliates 143,100
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Total Liabilities 1,357,900
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Partners' Equity:
Limited partners 3,811,300
General partners 20,100
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Total Equity 3,831,400
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Total Liabilities and Partners' Equity $ 5,189,300
==================
</TABLE>
See accompanying notes to financial statements.
2
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WINDSOR PARK PROPERTIES 5
---------------------------------
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
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(unaudited)
<TABLE>
<CAPTION>
Three Months Ended September 30,
------------------------------------
2000 1999
----------- -----------
REVENUES
--------
<S> <C> <C>
Rent and utilities $ 147,800 $ 137,800
Equity in earnings of joint ventures
and limited partnerships 35,300 33,300
Interest 8,700 4,700
Other 2,100 1,700
----------- -----------
193,900 177,500
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COSTS AND EXPENSES
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Property operating 69,400 61,000
Depreciation 29,600 28,600
Interest 29,000 24,700
General and administrative:
Related parties 11,300 6,300
Other 57,200 33,400
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196,500 154,000
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Net income (loss) $ (2,600) $ 23,500
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Net income (loss) - general partners $ - $ 200
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Net income (loss) - limited partners $ (2,600) $ 23,300
=========== ===========
Basic and diluted earnings (loss) per limited partnership unit $ (0.01) $ 0.10
=========== ===========
</TABLE>
See accompanying notes to financial statements.
3
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WINDSOR PARK PROPERTIES 5
-------------------------
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
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(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-----------------------------------
2000 1999
---------- ----------
REVENUES
--------
<S> <C> <C>
Rent and utilities $ 435,400 $ 407,700
Equity in earnings of joint ventures
and limited partnerships 98,500 119,300
Interest 20,900 13,300
Other 5,600 15,600
---------- ----------
560,400 555,900
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COSTS AND EXPENSES
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Property operating 212,000 181,400
Depreciation 90,300 85,000
Interest 83,600 73,100
General and administrative:
Related parties 24,900 13,400
Other 97,500 68,700
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508,300 421,600
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Net income $ 52,100 $ 134,300
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Net income - general partners $ 500 $ 1,300
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Net income - limited partners $ 51,600 $ 133,000
========== ==========
Basic and diluted earnings per limited partnership unit $ 0.22 $ 0.57
========== ==========
</TABLE>
See accompanying notes to financial statements.
4
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WINDSOR PARK PROPERTIES 5
-------------------------
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
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(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
----------------------------------
2000 1999
--------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 52,100 $ 134,300
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 90,300 85,000
Equity in earnings of joint ventures and limited partnerships (98,500) (119,300)
Joint ventures' and limited partnerships cash distributions 98,500 119,300
Amortization of deferred financing costs 6,800 6,800
Changes in operating assets and liabilities:
Increase in other assets (92,000) (21,800)
Decrease in accounts payable - (2,700)
Increase in due to general partner and affiliates 103,600 10,400
Increase in accrued expenses 15,200 15,500
Increase in other liabilities 2,600 1,800
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Net cash provided by operating activities 178,600 229,300
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Cash flows from investing activities:
Joint ventures' and limited partnerships' cash distributions 145,800 103,900
Increase in property held for investment (42,700) (17,600)
Investment in joint venture and limited partnerships - (20,100)
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Net cash provided by investing activities 103,100 66,200
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Cash flows from financing activities:
Cash distributions (190,900) (194,900)
Repurchase of limited partnership units (45,000) (44,200)
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Net cash used in financing activities (235,900) (239,100)
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Net increase in cash and cash equivalents 45,800 56,400
Cash and cash equivalents at beginning of period 543,200 482,700
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Cash and cash equivalents at end of period $ 589,000 $ 539,100
========= ==========
</TABLE>
See accompanying notes to financial statements.
5
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WINDSOR PARK PROPERTIES 5
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE 1. THE PARTNERSHIP
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Windsor Park Properties 5, A California Limited Partnership (the "Partnership"),
was formed in September 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 of the Limited Partners.
At September 30, 2000, the Partnership's portfolio was comprised of two wholly-
owned and five partially-owned manufactured home communities located in three
states.
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. As a result, the General
Partners have approved, and recommend that the Partnership proceed with, a plan
of liquidation (the "Plan of Liquidation"), pursuant to which the Partnership
will sell its two wholly-owned properties and its partial ownership interests in
five other properties (collectively, the "Properties") to N'Tandem Trust, a
California business trust ("N'Tandem"), and, thereafter, make liquidating
distributions to the partners in accordance with the terms of the Partnership
Agreement (the "Proposed Transactions").
On September 27, 2000, the General Partners mailed to the Limited Partners a
Consent Solicitation Statement describing the Proposed Transactions and
requesting the consent of such Limited Partners to the Proposed Transactions.
The consummation of the Proposed Transactions is subject to the satisfaction of
certain conditions, including the approval of a majority-in-interest of the
Partnership's Limited Partners. The General Partners anticipate that if the
Proposed Transactions are approved by the Limited Partners that the sale of the
Properties will close on or before December 15, 2000 and that final liquidating
distributions to the partners will be made on or before December 31, 2000.
NOTE 2. BASIS OF PRESENTATION
---------------------
The balance sheet at September 30, 2000 and the related statements of operations
for the three and nine months ended September 30, 2000 and 1999 and the
statements of cash flows for the nine months ended September 30, 2000 and 1999
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,
1999.
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NOTE 3. INVESTMENTS IN JOINT VENTURES AND LIMITED PARTNERSHIPS
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The Partnership's investments in joint ventures and limited partnerships consist
of interests in five manufactured home communities at September 30, 2000. The
combined condensed results of operations of the joint venture and limited
partnership properties for the nine months ended September 30, 2000 and 1999 are
as follows:
<TABLE>
<CAPTION>
Results of Operations 2000 1999
--------------------- --------------- ----------------
<S> <C> <C>
Property revenues $ 2,565,600 $ 2,503,900
Expenses:
Property operating 1,167,600 1,084,600
Interest 665,500 645,000
Depreciation 457,700 456,300
General and administrative 37,800 14,800
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2,328,600 2,200,700
--------------- ----------------
Net income $ 237,000 $ 303,200
=============== ================
</TABLE>
NOTE 4. BASIC AND DILUTIVE EARNINGS PER LIMITED PARTNERSHIP UNIT
--------------------------------------------------------
Basic and dilutive earnings per limited partnership unit is calculated based on
the weighted average number of limited partnership units outstanding during the
period and the net income allocated to the Limited Partners. The weighted
average number of limited partnership units outstanding during the three and
nine months ended September 30, 2000 was 230,772 and 231,631, respectively, and
232,213 and 234,737 for the three and nine months ended September 30, 1999,
respectively.
NOTE 5. DISTRIBUTIONS TO LIMITED PARTNERS
---------------------------------
Distributions to Limited Partners in excess of net income allocated to Limited
Partners are considered a return of capital. A breakdown of cash distributions
to Limited Partners for the nine months ended September 30, 2000 and 1999
follows:
<TABLE>
<CAPTION>
2000 1999
------------------------------- ------------------------------------
Per Per
Amount Unit Amount Unit
---------- -------- ----------- --------
<S> <C> <C> <C> <C>
Net income
Limited Partners $ 51,600 $ 0.22 $ 133,000 $ 0.57
Return of capital 138,800 0.60 59,900 0.25
---------- -------- ----------- --------
Total Distribution $ 190,400 $ 0.82 $ 192,900 $ 0.82
========== ======== =========== ========
</TABLE>
7
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Item 2.
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Management's Discussion and Analysis of Financial
Condition and Results of Operations
The following discussion should be read in conjunction with the financial
statements and notes thereto included elsewhere in this Form 10-QSB.
Three months ended September 30, 2000 as compared to three months ended
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September 30, 1999
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Results of Operations
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The Partnership's net loss was $2,600 for the three months ended September 30,
2000 compared to net income of $23,500 for the three months ended September 30,
1999. Basic and diluted earnings (loss) per limited partnership unit was $(.01)
and $.10 for the three months ended September 30, 2000 and 1999, respectively.
Rent and utilities revenues increased from $137,800 in 1999 to $147,800 in 2000
due to rent increases at both the Lakeside and Plantation Estates communities
and increased occupancy at Plantation Estates.
Equity in earnings of joint ventures and limited partnerships represents the
Partnership's share of the net income of five manufactured home communities held
by joint ventures and limited partnerships. Equity in earnings of joint
ventures and limited partnerships remained relatively constant at $35,300 in
2000 compared to $33,300 in 1999.
Property operating expenses increased from $61,000 in 1999 to $69,400 in 2000
due mainly to increases in payroll and utility expenses at the Plantation
Estates community.
Interest expense remained relatively constant at $29,000 in 2000 compared to
$24,700 in 1999.
General and administrative expense increased to $68,500 in 2000 from $39,700 in
1999 due mainly to increased legal and accounting fees and costs incurred
related to the preparation of the Consent Solicitation Statement.
Nine months ended September 30, 2000 as compared to nine months ended September
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30, 1999
--------
Results of Operations
---------------------
The Partnership's net income was $52,100 and $134,400 for the nine months ended
September 30, 2000 and 1999, respectively. Basic and diluted earnings per
limited partnership unit was $.22 and $.57 for the nine months ended September
30, 2000 and 1999, respectively.
Rent and utilities revenues increased from $407,700 in 1999 to $435,400 in 2000
due to rent increases at both the Lakeside and Plantation Estates communities
and increased occupancy at Plantation Estates.
Equity in earnings of joint ventures and limited partnerships represents the
Partnership's share of the net income of five manufactured home communities held
by joint ventures and limited partnerships. Equity in earnings of joint
ventures and limited partnerships decreased from $119,300 in 1999 to $98,500 in
2000, mainly due to an increase in bad debt and legal expenses at the Rancho
Margate community.
Property operating expenses increased from $181,400 in 1999 to $212,000 in 2000
due mainly to increases in payroll, repairs and maintenance, and marketing
expenses at the Plantation Estates community.
8
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Interest expense increased from $73,100 in 1999 to $83,600 in 2000 due to higher
interest rates on floating rate debt.
General and administrative expense increased to $122,400 in 2000 from $82,100 in
1999 due mainly to increased legal and accounting fees and costs incurred
related to the preparation of the Consent Solicitation Statement.
Liquidity and Capital Resources
-------------------------------
The Partnership's primary sources of liquidity during the nine months ended
September 30, 2000 and 1999 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 $178,600 and
$229,300 for the nine months ended September 30, 2000 and 1999, respectively.
At September 30, 2000, the Partnership's cash amounted to $589,000.
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 $190,900 and $194,900 for the nine months ended September 30,
2000 and 1999, respectively.
The Partnership's principal long-term liquidity requirement will be the
repayment of principal on its outstanding mortgage debt. At September 30, 2000,
the Partnership's total mortgage debt, including its proportionate share of
joint venture and limited partnership debt, was $3,340,700, consisting entirely
of variable rate debt. The weighted average rate of interest on the variable
rate debt was 9.63% at September 30, 2000.
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.
9
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PART II
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Item 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits and Index of Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K
None
10
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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 Managing General Partner
By /s/ Steven G. Waite
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STEVEN G. WAITE
President
Date: November 14, 2000
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