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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 June 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
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(State or other jurisdiction of (IRS Employer
incorporation or organization) 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 [_]
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>
<S> <C>
ASSETS June 30, 2000
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Property held for investment, net $ 2,490,800
Investments in joint ventures and limited partnerships 1,986,200
Cash and cash equivalents 598,900
Deferred financing costs, net 20,200
Other assets 139,400
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Total Assets $ 5,235,500
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LIABILITIES AND PARTNERS' EQUITY
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Liabilities:
Mortgage note payable $ 1,097,000
Accrued expenses 94,300
Other liabilities 35,900
Due to general partners and affiliates 76,700
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Total Liabilities 1,303,900
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Partners' Equity:
Limited partners 3,911,500
General partners 20,100
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Total Equity 3,931,600
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Total Liabilities and Partners' Equity $ 5,235,500
=============
</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 June 30,
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2000 1999
--------------- --------------
<S> <C> <C>
REVENUES
--------
Rent and utilities $ 148,500 $ 137,600
Equity in earnings of joint ventures
and limited partnerships 28,700 42,400
Interest 6,900 4,300
Other 2,300 2,200
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186,400 186,500
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COSTS AND EXPENSES
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Property operating 73,200 64,900
Depreciation 29,500 28,500
Interest 27,600 24,000
General and administrative:
Related parties 6,600 3,800
Other 18,400 18,900
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155,300 140,100
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Net income $ 31,100 $ 46,400
=============== ==============
Net income - general partners $ 300 $ 500
=============== ==============
Net income - limited partners $ 30,800 $ 45,900
=============== ==============
Basic and diluted earnings per limited partnership unit $ 0.13 $ 0.20
=============== ==============
</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>
Six Months Ended June 30,
----------------------------------
2000 1999
-------------- ---------------
<S> <C> <C>
REVENUES
--------
Rent and utilities $ 287,600 $ 269,800
Equity in earnings of joint ventures
and limited partnerships 63,200 86,100
Interest 12,200 8,600
Other 3,500 14,000
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366,500 378,500
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COSTS AND EXPENSES
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Property operating 142,600 120,400
Depreciation 60,700 56,400
Interest 54,600 48,400
General and administrative:
Related parties 13,600 7,100
Other 40,400 35,300
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311,900 267,600
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Net income $ 54,600 $ 110,900
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Net income - general partners $ 500 $ 1,100
============== ===============
Net income - limited partners $ 54,100 $ 109,800
============== ===============
Basic and diluted earnings per limited partnership unit $ 0.23 $ 0.47
============== ===============
</TABLE>
See accompanying notes to financial statements.
4
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WINDSOR PARK PROPERTIES 5
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(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
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(unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
--------------------------------------
2000 1999
------------ ------------
Cash flows from operating activities:
<S> <C> <C>
Net income $ 54,600 $ 110,900
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 60,700 56,400
Equity in earnings of joint ventures and limited partnerships (63,200) (86,100)
Joint ventures' and limited partnerships cash distributions 63,200 86,100
Amortization of deferred financing costs 4,500 4,600
Changes in operating assets and liabilities:
Increase in other assets (32,700) (15,800)
Decrease in accounts payable - (900)
Increase in due to general partner and affiliates 37,200 5,000
Increase in accrued expenses 27,400 2,000
Increase in other liabilities 2,800 1,000
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Net cash provided by operating activities 154,500 163,200
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Cash flows from investing activities:
Joint ventures' and limited partnerships' cash distributions 66,300 28,900
Increase in property held for investment (26,900) (15,200)
Investment in joint venture and limited partnerships - (20,000)
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Net cash provided by (used in) investing activities 39,400 (6,300)
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Cash flows from financing activities:
Cash distributions (96,300) (97,800)
Repurchase of limited partnership units (41,900) (20,100)
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Net cash used in financing activities (138,200) (117,900)
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Net increase in cash and cash equivalents 55,700 39,000
Cash and cash equivalents at beginning of period 543,200 482,700
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Cash and cash equivalents at end of period $ 598,900 $ 521,700
============ ============
</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 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 of the Limited Partners.
At June 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. 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.
NOTE 2. BASIS OF PRESENTATION
---------------------
The balance sheet at June 30, 2000 and the related statements of operations for
the three and six months ended June 30, 2000 and 1999 and the statements of cash
flows for the six months ended June 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 June 30, 2000. The
combined condensed results of operations of the joint venture and limited
partnership properties for the six months ended June 30, 2000 and 1999 are as
follows:
<TABLE>
<CAPTION>
Results of Operations 2000 1999
--------------------- ----------- -----------
<S> <C> <C>
Property revenues $ 1,711,600 $ 1,668,700
Expenses:
Property operating 815,800 709,700
Interest 440,500 430,400
Depreciation 308,300 295,700
General and administrative 12,800 11,500
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1,577,400 1,447,300
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Net income $ 134,200 $ 221,400
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</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 six
months ended June 30, 2000 was 231,695 and 232,068, respectively; and 234,903
and 235,253 for the three and six months ended June 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 six months ended June 30, 2000 and 1999 follows:
<TABLE>
<CAPTION>
2000 1999
--------------------------- ---------------------------
Per Per
Amount Unit Amount Unit
--------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net income
Limited Partners $ 54,100 $ 0.23 $ 109,800 $ 0.47
Return of capital 41,200 0.18 (13,000) (0.06)
--------- ---------- ---------- ----------
Total Distribution $ 95,300 $ 0.41 $ 96,800 $ 0.41
========= ========== ========== ==========
</TABLE>
7
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Item 2.
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Management's Discussion and Analysis of Financial
Condition and Results of Operations
Three months ended June 30, 2000 as compared to three months ended June 30, 1999
--------------------------------------------------------------------------------
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
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The Partnership's net income was $31,100 and $46,400 for the three months ended
June 30, 2000 and 1999, respectively. Basic and diluted earnings per limited
partnership unit was $.13 and $.20 for the three months ended June 30, 2000 and
1999, respectively.
Rent and utilities revenues increased from $137,600 in 1999 to $148,500 in 2000
due to rent increases 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 held
by joint ventures and limited partnerships. Equity in earnings of joint ventures
and limited partnerships decreased from $42,400 in 1999 to $28,700 in 2000,
mainly due to an increase in bad debt expense and legal fees at the Rancho
Margate community.
Property operating expenses increased from $64,900 in 1999 to $73,200 in 2000
due mainly to increases in payroll, repairs and maintenance, and marketing
expenses at the Plantation Estates community.
Interest expense remained relatively constant at $27,600 in 2000 compared to
$24,000 in 1999.
General and administrative expense increased to $25,000 in 2000 from $22,700 in
1999 due mainly to increased legal and accounting fees.
Six months ended June 30, 2000 as compared to six months ended June 30, 1999
----------------------------------------------------------------------------
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 $54,600 and $110,900 for the six months ended
June 30, 2000 and 1999, respectively. Basic and diluted earnings per limited
partnership unit was $.23 and $.47 for the six months ended June 30, 2000 and
1999, respectively.
Rent and utilities revenues increased from $269,800 in 1999 to $287,600 in 2000
due to rent increases 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 held
by joint ventures and limited partnerships. Equity in earnings of joint ventures
and limited partnerships decreased from $86,100 in 1999 to $63,200 in 2000,
mainly due to an increase in bad debt and legal expenses at the Rancho Margate
community.
Property operating expenses increased from $120,400 in 1999 to $142,600 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 $48,400 in 1999 to $54,600 in 2000 due to higher
interest rates.
General and administrative expense increased to $54,000 in 2000 from $42,400 in
1999 due mainly to increased legal and accounting fees.
Liquidity and Capital Resources
-------------------------------
The Partnership's primary sources of liquidity during the six months ended June
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 $154,500 and
$163,200 for the six months ended June 30, 2000 and 1999, respectively. At June
30, 2000, the Partnership's cash amounted to $598,900.
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 $96,300 and $97,800 for the six months ended June 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 June 30, 2000, the
Partnership's total mortgage debt, including its proportionate share of joint
venture and limited partnership debt, was $3,346,600, consisting entirely of
variable rate debt. The weighted average rate of interest on the variable rate
debt was 9.31% at June 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
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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: August 14, 2000
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