<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): May 31, 2000
------------
N'TANDEM TRUST
--------------
(Exact Name of Registrant as Specified in Charter)
CALIFORNIA 0-21470 33-610944499
--------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
6160 SOUTH SYRACUSE WAY, GREENWOOD VILLAGE, COLORADO 80111
--------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (303) 741-3707
---------------
<PAGE>
In its Current Report on Form 8-K, dated May 31 2000, N'Tandem Trust, a
California business trust (the "Trust"), through its limited partnership
subsidiary, N'Tandem Properties, L.P., acquired, in two separate transactions,
four manufactured home communities and partial ownership interests in four other
manufactured home communities (collectively, the "WPP 3 Properties") from
Windsor Park Properties 3, A California Limited Partnership ("WPP 3"), and one
manufactured home community and partial ownership interests in five other
manufactured home communities (collectively, the "WPP 6 Properties" and,
together with the WPP 3 Properties, the "Acquired Properties") from Windsor Park
Properties 6, A California Limited Partnership ("WPP 6"). Set forth below are
certain financial statements relating to the Acquired Properties and pro forma
financial information for the Trust.
Item 7: Financial Statements, Pro Forma Financial Information and Exhibits
------------------------------------------------------------------
(a) Financial Statements:
Balance Sheets of Windsor Park Properties 3, A California Limited
Partnership, as of December 31, 1999 and March 31, 2000
(Unaudited)
Statements of Operations for Windsor Park Properties 3 for the
years ended December 31, 1999 and 1998 and the three months ended
March 31, 2000 and 1999 (Unaudited)
Statements of Cash Flows for Windsor Park Properties 3 for the
years ended December 31, 1999 and 1998 and the three months ended
March 31, 2000 and 1999 (Unaudited)
Balance Sheets of Windsor Park Properties 6, A California Limited
Partnership, as of December 31, 1999 and March 31, 2000
(Unaudited)
Statements of Operations for Windsor Park Properties 6 for the
years ended December 31, 1999 and 1998 and the three months ended
March 31, 2000 and 1999 (Unaudited)
Statements of Cash Flows for Windsor Park Properties 6 for the
years ended December 31, 1999 and 1998 and the three months ended
March 31, 2000 and 1999 (Unaudited)
(b) Pro Forma Financial Information:
Pro Forma Condensed Statements of Operations of the Trust for the
three months ended March 31, 2000 and for the year ended December
31, 1999 (Unaudited).
Pro Forma Condensed Balance Sheet of the Trust as of March 31,
2000 (Unaudited).
(c) Exhibits:
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
N'TANDEM TRUST
Dated: July 27, 2000 By: /s/Gary P. McDaniel
-------------------
Gary P. McDaniel
Trustee
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of Windsor Park Properties 3,
(A California Limited Partnership)
In our opinion, the accompanying balance sheet and the related statements of
operations and cash flows present fairly, in all material respects, the
financial position of Windsor Park Properties 3, 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, except for the third paragraph of Footnote 1 for which the date
is April 28, 2000
<PAGE>
WINDSOR PARK PROPERTIES 3
-------------------------
(A California Limited Partnership)
BALANCE SHEET
-------------
ASSETS March 31, 2000 December 31, 1999
------ -------------- -----------------
(Unaudited)
Property held for sale, net $ 3,286,600 $ 3,323,800
Investments in joint ventures
and limited partnerships held for sale 1,128,500 1,157,300
Cash and cash equivalents 209,600 62,900
Deferred financing costs, net 22,400 23,900
Other assets 319,600 237,200
-------------- -----------------
Total Assets $ 4,966,700 $ 4,805,100
============== =================
LIABILITIES AND PARTNERS' EQUITY
--------------------------------
Liabilities:
Mortgage notes payable $ 1,170,400 $ 1,170,400
Term loan payable 400,000 400,000
Accrued expenses 221,100 188,400
Accounts payable 11,600 -
Tenant deposits and other liabilities 39,800 38,100
Due to general partners and affiliates 210,500 151,800
-------------- -----------------
Total Liabilities 2,053,400 1,948,700
-------------- -----------------
Commitments and Contingencies (Note 8)
Partners' Equity:
Limited partners 2,915,600 2,859,400
General partners (2,300) (3,000)
-------------- -----------------
Total Partners' Equity 2,913,300 2,856,400
-------------- -----------------
Total Liabilities and Partners' Equity $ 4,966,700 $ 4,805,100
============== =================
See accompanying notes to financial statements
5
<PAGE>
WINDSOR PARK PROPERTIES 3
-------------------------
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
<TABLE>
<CAPTION>
For the Year Ended December 31,
--------------------------------------------
<S> <C> <C>
1999 1998
REVENUES ------------------- -------------------
--------
Rent and utilities $ 1,579,900 $ 1,687,000
Equity in earnings of joint ventures and limited partnerships 23,300 8,100
Interest 6,100 27,900
Gain on sale of property held for sale 424,600 --
Other 38,800 61,600
------------------- -------------------
2,072,700 1,784,600
------------------- -------------------
COSTS AND EXPENSES
------------------
Property operating expenses 920,100 995,900
Interest 183,100 279,800
Depreciation 206,600 227,100
General and administrative:
Related parties 25,700 36,200
Other 108,400 65,200
------------------- -------------------
1,443,900 1,604,200
------------------- -------------------
Income before extraordinary item $ 628,800 $ 180,400
Extraordinary loss from early extinguishment of debt 74,600 --
Net income $ 554,200 $ 180,400
=================== ===================
Net income - general partners $ 63,800 $ 1,800
=================== ===================
Net Income - limited partners $ 490,400 $ 178,600
=================== ===================
Basic and diluted earnings per limited partnership unit:
Income before extraordinary item $ 2.91 $ 0.93
Extraordinary loss from early extinguishment of debt 0.32 --
------------------- -------------------
Net Income - limited partners $ 2.59 $ 0.93
=================== ===================
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
WINDSOR PARK PROPERTIES 3
-------------------------
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
Three Months Ended March 31,
----------------------------
(Unaudited)
2000 1999
--------- ---------
REVENUES
Rent and utilities $ 394,100 $ 431,300
Equity in earnings of joint ventures
and limited partnerships 13,100 200
Interest 100 6,000
Other 9,400 9,000
--------- ---------
416,700 446,500
--------- ---------
COSTS AND EXPENSES
Property operating expenses 213,300 245,900
Interest 34,700 70,000
Depreciation 63,500 57,800
General and administrative:
Related parties 5,800 6,600
Other 42,600 16,700
--------- ---------
359,900 397,000
--------- ---------
Net income $ 56,800 $ 49,500
========= =========
Net income - general partners $ 600 $ 500
========= =========
Net Income - limited partners $ 56,200 $ 49,000
========= =========
Basic and diluted earnings per
limited partnership unit $ 0.30 $ 0.26
========= =========
See accompanying notes to financial statements
7
<PAGE>
WINDSOR PARK PROPERTIES 3
-------------------------
(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 $ 554,200 $ 180,400
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 206,600 227,100
Equity in earnings of joint ventures and limited partnerships (23,300) (8,100)
Joint ventures' and limited partnerships cash distributions 23,300 8,100
Gain on sale of property held for sale (424,600) --
Amortization of deferred financing costs 66,100 20,000
Changes in operating assets and liabilities:
Increase in other assets (135,700) (30,800)
Increase in accounts payable (5,200) (29,900)
(Decrease) increase in accrued expenses (25,700) 115,100
Decrease in tenant deposits and other liabilities (4,300) (20,100)
Increase (decrease) due to general partner and affiliates 127,600 (46,100)
--------------- ---------------
Net cash provided by operating activities 359,000 415,700
--------------- ---------------
Cash flows from investing activities:
Increase in property held for sale (159,100) (133,900)
Joint ventures' and limited partnerships' cash distributions 138,400 189,400
Proceeds from sale of property held for sale 865,900 --
Investment in joint venture and limited partnerships (39,600) (22,000)
--------------- ---------------
Net cash provided by investing activities 805,600 33,500
--------------- ---------------
Cash flows from financing activities:
Cash distributions to partners (280,500) (283,600)
Proceeds from term loan 400,000 --
Payments on mortgage financing (1,800,000) --
Repurchase of limited partnership units (62,000) (110,900)
--------------- ---------------
Net cash used in financing activities (1,742,500) (394,500)
--------------- ---------------
Net increase (decrease) in cash and cash equivalents (577,900) 54,700
Cash and cash equivalents at beginning of year 640,800 586,100
--------------- ---------------
Cash and cash equivalents at end of year $ 62,900 $ 640,800
=============== ===============
Supplemental disclosure of cash flow information:
Cash paid during the year for interest (none capitalized) $ 146,200 $ 258,100
=============== ===============
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
WINDSOR PARK PROPERTIES 3
-------------------------
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
------------------------
<TABLE>
<CAPTION>
Three Months Ended March 31,
------------------------------------------
2000 1999
--------------- ---------------
(Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 56,800 $ 49,500
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 63,500 57,800
Equity in earnings of joint ventures and limited partnerships (13,100) (200)
Joint ventures' and limited partnerships cash distributions 13,100 200
Amortization of deferred financing costs 1,600 4,900
Changes in operating assets and liabilities:
Increase in other assets (82,400) (16,800)
Increase (decrease) in accounts payable 11,600 (5,200)
Increase in accrued expenses 32,700 28,400
Increase (decrease) in other liabilities 1,700 (100)
Increase in due to general partner and affiliates 58,700 43,500
--------------- ---------------
Net cash provided by operating activities 144,200 162,000
--------------- ---------------
Cash flows from investing activities:
Increase in property held for sale (26,300) (56,500)
Joint ventures' and limited partnerships' cash distributions 28,800 25,800
--------------- ---------------
Net cash provided by investing activities 2,500 (30,700)
--------------- ---------------
Cash flows from financing activities:
Cash distributions to partners - (140,600)
Repurchase of limited partnership units - (3,900)
--------------- ---------------
Net cash used in financing activities - (144,500)
--------------- ---------------
Net increase (decrease) in cash and cash equivalents 146,700 (13,200)
Cash and cash equivalents at beginning of period 62,900 640,800
--------------- ---------------
Cash and cash equivalents at end of period $ 209,600 $ 627,600
=============== ===============
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
WINDSOR PARK PROPERTIES 3
-------------------------
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE 1. THE PARTNERSHIP AND A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
----------------------------------------------------------------
The Partnership
---------------
Windsor Park Properties 3, A California Limited Partnership (the "Partnership"),
was formed in August 1985 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
1997, Chateau Communities, Inc., a publicly held real estate investment trust
("Chateau"), purchased 100% of the outstanding shares of Capital Stock of TWC.
Pursuant to the Agreement of Limited Partnership (the "Partnership Agreement")
of the Partnership, the term of the Partnership expired on December 31, 1999.
As a result, in accordance with the terms of the Partnership Agreement and
California law, the "General Partners are required (i) to develop a plan of
liquidation for the Partnership's assets and to liquidate and dissolve the
Partnership or (ii) to take such steps as are necessary to extend the term of
the Partnership in order to enable it to continue as a going concern."
Accordingly, 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 four wholly-owned properties and
its partial ownership interests in four 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"). The
consummation of the Proposed Transactions was subject to the satisfaction of
certain conditions, including the approval of a majority-in-interest of the
Partnership's Limited Partners. On April 28, 2000, the Limited Partners
approved the Proposed Transactions. The General Partners anticipate that the
sale of the Properties will close on or before May 31, 2000 and that final
liquidating distributions to the partners will be made on or before June 30,
2000.
Property Held For Investment
----------------------------
During 1998, property held for investment was carried at cost unless facts and
circumstances indicated 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 year ended December 31, 1999.
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.
10
<PAGE>
Property Held for Sale
----------------------
During 1999, property held for sale was recorded at the lower of cost or net
realizable value. On April 1, 1999, the Partnership entered into an agreement
to sell Little Eagle, a manufactured home community containing 96 homesites
located in Indianapolis, Indiana, and nine mobile home units at Little Eagle to
Floral Park Cemetery Association, the terms of which were determined through
arms-length negotiations between the parties. The aggregate purchase price paid
for Little Eagle and the nine mobile home units was $925,000, net of selling
expenses of approximately $60,000. The sale resulted in a net gain on sale of
$424,600. In connection with the sale, the Partnership obtained a $400,000 term
loan and paid off a related mortgage payable of $1,800,000, resulting in an
extraordinary loss on early extinguishment of debt of approximately $74,600.
The extraordinary loss is comprised of an $18,000 prepayment penalty and a
$56,600 write off of unamortized loan fees.
Investments in Joint Ventures and Limited Partnerships
------------------------------------------------------
The investments in joint ventures and limited partnerships 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, and amended, 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.
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 which is the same as income available 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 189,238 and 192,006, respectively.
Statements of Cash Flows
------------------------
For purposes of the statements of cash flows, the Partnership considers all
highly-liquid investments 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.
11
<PAGE>
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 188,296
and 190,213, respectively, which represented capital contributions of
$18,829,600 and $19,021,300, respectively. During the years ended December 31,
1999 and 1998, the Partnership repurchased 1,917 units and 3,826 units,
respectively, for $61,900 and $110,900, respectively, from Limited Partners.
The General Partners owned 1,010 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 and losses of the Partnership during the operational stage are
allocated 99% to the Limited Partners and 1% to the General Partners. Cash
distributions from operations are allocated 95% to the Limited Partners and 5%
to the General Partners.
The Partnership reimburses TWC for certain direct expenses, and employee,
executive and administrative time incurred on the Partnership's behalf. The
Partnership was charged $25,700 and $36,200 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.
TWC is paid a management fee which is based on a percentage of actual gross
receipts collected from the operations of the properties. TWC receives 2.5% for
the Trailmont property. For the years ended December 31, 1999 and 1998, the
total amounts paid to TWC were $9,700 and $9,300 respectively.
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 a 9%
cumulative, non-compounded, annual 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.
12
<PAGE>
The General Partners received cash distributions of $14,700 in each of the years
ended December 31, 1999 and 1998.
NOTE 3. PROPERTY HELD FOR SALE
----------------------
Property held for investment consists of four manufactured home communities
summarized as follows:
Name of Property Date Acquired Location
---------------- ------------- --------
Pondarosa March 31, 1986 Indianapolis, Indiana
The Pines August 1, 1986 Charleston, South Carolina
Shady Hills September 30, 1986 Ladson, Tennessee
Trailmont January 17, 1996 Nashville, Tennesse
December 31, 1999
--------------------------
Land $ 974,500
Buildings and improvements 4,841,200
Fixtures and equipment 158,300
----------
5,974,000
Less accumulated depreciation (2,650,200)
----------
$3,323,800
==========
NOTE 4. INVESTMENTS IN JOINT VENTURES AND LIMITED PARTNERSHIPS HELD FOR SALE
--------------------------------------------------------------------
The Partnership's investments in joint ventures consist of interests in two
manufactured home communities summarized as follows:
<TABLE>
<CAPTION>
Ownership
Name of Property Percentage Date Acquired Location
---------------- ---------- ------------- --------
<S> <C> <C> <C>
Big Country Estates 40% December 1, 1986 Cheyenne, Wyoming
Harmony Ranch 25% December 15, 1986 Thonotosassa, Florida
</TABLE>
The Partnership's interests in its two remaining communities are owned through
an affiliated Arizona limited partnership, which has the same General Partners
as the Partnership.
<TABLE>
<CAPTION>
Ownership
Name of Property Percentage Date Acquired Location
---------------- ---------- ------------- --------
<S> <C> <C> <C>
Apache East 29% February 18, 1997 Apache Junction, Arizona
Denali Park 29% February 18, 1997 Apache Junction, Arizona
</TABLE>
13
<PAGE>
NOTE 4. INVESTMENTS IN JOINT VENTURES AND LIMITED PARTNERSHIPS
------------------------------------------------------
(continued)
The combined condensed financial position and results of operations of the joint
ventures and limited partnerships are as follows:
Financial Position December 31, 1999
-----------------
Property held for investment, net $ 7,666,800
Cash 75,700
Other assets 153,500
-----------
Total assets $ 7,896,000
===========
Mortgage note payable $ 4,165,500
Accounts payable 400
Other liabilities 198,900
-----------
Total liabilities 4,364,800
Partners' equity 3,531,200
-----------
Total liabilities and partners' equity $ 7,896,000
===========
For the Year Ended December 31,
------------------------------
Results of operations 1999 1998
----------- -----------
Property revenues $ 1,786,700 $ 1,762,400
----------- -----------
Expenses:
Property operating 855,600 905,100
Depreciation 377,500 473,400
Interest 482,700 405,100
General and administrative 13,800 --
----------- -----------
1,729,600 1,783,600
----------- -----------
Net income (loss) $ 57,100 $ (21,200)
=========== ===========
NOTE 5. MORTGAGE NOTES PAYABLE
----------------------
The Partnership has a $1,170,400 mortgage loan collateralized by the
Trailmont property. The loan is payable in monthly interest
only installments bearing interest at a fixed rate of 8.41% and is due in
January 2003.
The Partnership has a $400,000 unsecured term loan. The loan bears interest at
LIBOR plus 120 and is due May 31, 2000.
14
<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.
1999 1998
------------------ ------------------
Per Per
Amount Unit Amount Unit
---------- ------ ---------- ------
Net income
Limited Partners $ 490,400 $ 2.59 $ 178,600 $ 0.93
Return of capital -- -- 90,300 0.47
Net Income in Excess
of distributions (224,600) (1.19) -- --
---------- ------ ---------- ------
Total Distribution $ 265,800 $ 1.40 $ 268,900 $ 1.40
========== ====== ========== ======
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 General Partners believe the
carrying value of the mortgage notes payable approximates fair value based upon
interest rates available for the issuance of debt with similar terms and
maturities.
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 $4,165,400 of debt issued by
affiliated entities in which it has a joint venture or limited partnership
investment.
NOTE 10. 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 $82,300 and $77,200
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 $224,200 and $254,300 and
for the years ended December 31, 1999 and 1998, respectively.
15
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of Windsor Park Properties 6,
(a California Limited Partnership)
In our opinion, the accompanying balance sheet and the related statements of
operations and cash flows present fairly, in all material respects, the
financial position of Windsor Park Properties 6, 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, except for the third paragraph of Footnote 1 for which the date
is April 28, 2000
16
<PAGE>
WINDSOR PARK PROPERTIES 6
---------------------------
(A California Limited Partnership)
BALANCE SHEET
-------------
<TABLE>
<CAPTION>
ASSETS March 31, 2000 December 31, 1999
--------- ---------------- -----------------
(Unaudited)
<S> <C> <C>
Property held for sale, net $ 1,515,200 $ 1,547,900
Investments in joint ventures and limited partnerships 4,492,000 4,601,900
Cash and cash equivalents 488,600 352,900
Other assets 268,700 205,800
---------------- -----------------
Total Assets $ 6,764,500 $ 6,708,500
================ =================
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Accounts payable 20,300 -
Accrued expenses 92,000 84,300
Other liabilities 8,900 10,600
Due to general partners and affiliates 84,900 83,900
---------------- -----------------
Total Liabilities 206,100 178,800
---------------- -----------------
Commitments and Contingencies (Note 8)
Partners' Equity:
Limited partners 6,552,900 6,524,500
General partners 5,500 5,200
---------------- -----------------
Total Partners' Equity 6,558,400 6,529,700
---------------- -----------------
Total Liabilities and Partners' Equity $ 6,764,500 $ 6,708,500
================ =================
</TABLE>
See accompanying notes to financial statements.
17
<PAGE>
WINDSOR PARK PROPERTIES 6
-------------------------
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
For the Year Ended December 31,
-------------------------------
1999 1998
---------- ----------
REVENUES
Rent and Utilities $ 504,900 $ 651,600
Equity in earnings of joint ventures and
limited partnerships 337,600 259,200
Interest 7,200 15,200
Gain on sale of property held for investment -- 396,000
Other 17,500 19,000
---------- ----------
867,200 1,341,900
---------- ----------
COSTS AND EXPENSES
Property operating expenses 212,700 307,200
Depreciation 133,300 173,700
Interest -- 147,900
General and administrative:
Related parties 23,300 32,000
Other 95,100 71,400
---------- ----------
464,400 732,200
---------- ----------
Net income $ 402,800 $ 609,700
========== ==========
Net income - general partners $ 4,000 $ 6,100
========== ==========
Net income - limited partners $ 398,800 $ 603,600
========== ==========
Basic and diluted earnings per limited
partnership unit $ 1.39 $ 2.07
========== ==========
See accompanying notes to financial statements.
18
<PAGE>
WINDSOR PARK PROPERTIES 6
-------------------------
(A California Limited Partnership)
STATEMENTS OF OPERATIONS
------------------------
Three Months Ended March 31,
----------------------------------
(Unaudited)
2000 1999
-------- --------
REVENUES
Rent and utilities $122,400 $127,200
Equity in earnings of joint ventures and
limited partnerships 83,200 106,600
Interest 2,100 1,700
Other 5,100 2,700
-------- --------
212,800 238,200
-------- --------
COSTS AND EXPENSES
Property operating expenses 99,500 54,100
Depreciation 36,300 32,900
General and administrative:
Related parties 5,800 4,600
Other 41,400 17,900
-------- --------
183,000 109,500
-------- --------
Net income $ 29,800 $128,700
======== ========
Net income - general partners $ 300 $ 1,300
======== ========
Net income - limited partners $ 29,500 $127,400
======== ========
Basic and diluted earnings per limited
partnership unit $ 0.10 $ 0.44
======== ========
See accompanying notes to financial statements.
19
<PAGE>
WINDSOR PARK PROPERTIES 6
-------------------------
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
------------------------
For the Year Ended December 31,
-------------------------------
1999 1998
---------- -----------
Cash flows from operating activities:
Net income $ 402,800 $ 609,700
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation 133,300 173,700
Equity in earnings of joint ventures and
limited partnerships (337,600) (259,200)
Joint ventures' and limited partnerships
cash distributions 337,600 259,200
Amortization of deferred financing costs -- 49,400
Gain on sale of property held for
investment -- (396,900)
Changes in operating assets and liabilities:
(Increase) decrease in other assets (199,700) 27,200
Decrease in accounts payable -- (5,400)
(Decrease) increase in accrued expenses (600) 47,200
Increase (decrease) due to general
partner and affiliates 73,700 (19,500)
Decrease in tenant deposits and other
liabilities (700) (24,300)
---------- -----------
Net cash provided by operating activities 408,800 461,100
---------- -----------
Cash flows from investing activities:
Joint ventures' and limited partnerships'
cash distributions 380,800 414,600
Increase in property held for investment (21,600) (37,600)
Proceeds from sale of property and other
assets -- 1,129,000
Investment in joint venture and limited
partnerships (16,300) (16,100)
---------- -----------
Net cash provided by investing activities 342,900 1,489,900
---------- -----------
Cash flows from financing activities:
Cash distributions to partners (593,500) (591,200)
Repurchase of limited partnership units (71,200) (113,200)
Repayments of mortgage note payable -- (1,340,000)
---------- -----------
Net cash used in financing activities (664,700) (2,044,400)
---------- -----------
Net decrease in cash and cash equivalents $ 87,000 $ (93,400)
Cash and cash equivalents at beginning of year 265,900 359,300
---------- -----------
Cash and cash equivalents at end of year $ 352,900 $ 265,900
========== ===========
Supplemental disclosure of cash flow
information:
Cash paid during the year for interest
(none Capitalized) $ -- $ 147,900
========== ===========
See accompanying notes to financial statements.
20
<PAGE>
WINDSOR PARK PROPERTIES 6
-------------------------
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
------------------------
Three Months Ended March 31,
----------------------------
2000 1999
-------- ---------
(Unaudited)
Cash flows from operating activities:
Net income $ 29,800 $ 128,700
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 36,300 32,900
Equity in earnings of joint ventures and
limited partnerships (83,200) (106,600)
Joint ventures' and limited partnerships
cash distributions 83,200 106,600
Changes in operating assets and liabilities:
(Increase) decrease in other assets (62,900) 2,300
Increase (decrease) in accounts payable 20,300 (1,400)
Increase in accrued expenses 7,700 17,900
Increase (decrease) in due to general
partner and affiliates 1,000 12,100
Decrease in other liabilities (1,700) (100)
-------- ---------
Net cash provided by operating activities 30,500 192,400
-------- ---------
Cash flows from investing activities:
Joint ventures' and limited partnerships'
cash distributions 109,800 10,600
Increase in property held for investment (3,600) (8,500)
Investment in joint venture and limited
partnerships 100 (100)
-------- ---------
Net cash provided by investing activities 106,300 2,000
-------- ---------
Cash flows from financing activities:
Cash distributions to partners -- (303,000)
Repurchase of limited partnership units (1,100) (14,300)
-------- ---------
Net cash used in financing activities (1,100) (317,300)
-------- ---------
Net increase (decrease) in cash and cash
equivalents $135,700 $(122,900)
Cash and cash equivalents at beginning of period 352,900 265,900
-------- ---------
Cash and cash equivalents at end of period $488,600 $ 143,000
======== =========
See accompanying notes to financial statements.
21
<PAGE>
WINDSOR PARK PROPERTIES 6
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE 1. THE PARTNERSHIP AND A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
----------------------------------------------------------------
The Partnership
---------------
Windsor Park Properties 6, A California Limited Partnership (the "Partnership"),
was formed in June 1988 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
1997, Chateau Communities, Inc., a publicly held real estate investment trust
("Chateau"), purchased 100% of the outstanding shares of capital stock of TWC.
Pursuant to the Agreement of Limited Partnership (the "Partnership Agreement")
of the Partnership, the term of the Partnership expired on December 31, 1999.
As a result, in accordance with the terms of the Partnership Agreement and
California law, the "General Partners are required (i) to develop a plan of
liquidation for the Partnership's assets and to liquidate and dissolve the
Partnership or (ii) to take such steps as are necessary to extend the term of
the Partnership in order to enable it to continue as a going concern."
Accordingly, 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 wholly-owned property 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 (together, the "Proposed Transactions").
The consummation of the Proposed Transactions was subject to the satisfaction of
certain conditions, including the approval of a majority-in-interest of the
Partnership's Limited Partners. On April 28, 2000, the Limited Partners
approved the Proposed Transactions. The General Partners anticipate that the
sale of the Properties will close on or before May 31, 2000 and that final
liquidating distributions to the partners will be made on or before June 30,
2000.
Property Held for Investment
----------------------------
During 1998, property held for investment was carried at cost unless facts and
circumstances indicated 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 propety is written down to its estimated fair value.
No such writedowns were recorded for the year ended December 31, 1998.
Property Held for Sale
----------------------
During 1999, property held for sale was recorded at the lower of cost or net
realizable value and depreciated over various estimated useful lives (buildings
and improvements - 5 to 20 years; fixtures and equipment - 3 to 5 years) using
the straight-line method. When assets are sold or otherwise disposed of, the
cost and related accumulated depreciation are removed from the
22
<PAGE>
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.
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.
Basic and Diluted Earnings per Limited Partnership Unit
-------------------------------------------------------
Basic and diluted earnings per limited partnership unit is calculated based on
the weighted average number of limited partnership units outstanding during the
year and the net income allocated, which is the same as income available, 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 287,753 and 291,039, respectively.
Statements of Cash Flows
------------------------
For purposes of the statements of cash flows, the Partnership considers all
highly-liquid investments 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 286,564
and 289,244, respectively, which represented capital contributions of
$28,656,400 and $28,924,400, respectively. During the years ended December 31,
1999 and 1998, the Partnership repurchased 2,630 and 4,043 units for $71,200 and
$113,200, respectively, from the limited partners. The General Partners owned
10 units at both December 31, 1999 and 1998.
23
<PAGE>
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.
The Partnership reimburses TWC for certain direct expenses, and employee,
executive and administrative time incurred on the Partnership's behalf. The
Partnership was charged $23,300 and $32,000 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 and
Chateau $83,900.
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 profits, losses and cash distributions from
the sale or financing of Partnership properties. This participation increases
to 15% after the limited partners have received their original invested capital
plus a 9% cumulative, non-compounded annual return.
The General Partners generally receive 1% of profits and losses from the sale of
Partnership properties. However, if applicable, profits on sale will be first
allocated 100% to the General Partners to the extent of their negative capital
account.
During the years ended December 31, 1999 and 1998, the General Partners received
cash distributions of $6,100.
24
<PAGE>
NOTE 3. PROPERTY HELD FOR SALE
----------------------
Property held for sale consists of one manufactured home community summarized as
follows:
Name of Property Date Acquired Location
---------------------- ----------------- ----------------
Chisholm Creek July 27, 1989 Wichita, Kansas
December 31, 1999
-----------------
Land $ 325,000
Buildings and improvements 2,467,200
Fixtures and equipment 38,500
-----------
2,830,700
Less accumulated depreciation (1,282,800)
-----------
$ 1,547,900
===========
NOTE 4. INVESTMENTS IN JOINT VENTURES AND LIMTED PARTNERSHIPS
-----------------------------------------------------
The Partnership's investments in joint ventures consist of interests in three
manufactured home communities summarized as follows:
<TABLE>
<CAPTION>
Ownership
Name of Property Percentage Date Acquired Location
---------------- ---------- ------------- --------
<S> <C> <C> <C>
Town and Country 58% January 17, 1989 Tucson, Arizona
Estates
Carefree Village 44% July 31, 1990 Tampa, Florida
Garden Walk 31% August 15, 1995 Palm Beach Gardens,
Florida
</TABLE>
The Partnership's interests in its two remaining communities are owned through
an affiliated California limited partnership, which has the same General
Partners as the Partnership.
<TABLE>
<CAPTION>
Ownership
Name of Property Percentage Date Acquired Location
---------------- ---------- ------------- --------
<S> <C> <C> <C>
Rancho Margate 41% September 20, 1995 Margate, Florida
Winter Haven 41% October 11, 1995 Winter Haven, Florida
</TABLE>
25
<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:
December 31, 1999
-----------------
Financial Position:
Property held for sale, net $ 26,624,200
Cash 206,800
Other assets 515,500
------------
Total assets $ 27,346,500
============
Mortgage notes payable $ 15,887,800
Other liabilities 452,000
------------
Total liabilities 16,339,800
Partners' equity 11,006,700
------------
Total Liabilities and Partners' Equity $ 27,346,500
============
For the Year Ended December 31,
-------------------------------
Results of Operations 1999 1998
----------- -----------
Property revenues $ 5,883,800 $ 5,696,600
----------- -----------
Expenses:
Property operating 2,750,000 2,696,100
Interest 1,406,300 1,462,400
Depreciation 899,800 894,500
General and administrative 15,900 --
----------- -----------
5,072,000 5,053,000
----------- -----------
Net income $ 811,800 $ 643,600
=========== ===========
NOTE 5. MORTGAGE NOTE PAYABLE
---------------------
The Partnership had a $1,340,000 mortgage loan, collateralized by the Chisholm
Creek and Circle K properties. The loan was repaid in November 1998 from the
proceeds received from the sale of the Circle K property.
26
<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:
1999 1998
------------------- -------------------
Per Per
Amount Unit Amount Unit
--------- ----- --------- -----
Net income
Limited Partners $ 398,800 $1.39 $ 603,600 $2.07
Return of Capital 188,600 0.65 -- --
Net income in excess
of distribution -- -- (18,500) (0.06)
--------- ----- --------- -----
Total distributions $ 587,400 $2.04 $ 585,100 $2.01
========= ===== ========= =====
NOTE 7. FAIR VALUE OF FINANCIAL INSTRUMENTS
-----------------------------------
The carrying amounts of cash equivalents, other assets, accrued expenses and
other liabilities approximate fair value because of the short maturity of the
financial instruments.
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 $15,887,600 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 $26,000 and $33,500
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 $83,200 and $86,500 for
the years ended December 31, 1999 and 1998, respectively.
27
<PAGE>
N' TANDEM TRUST
Pro Forma Condensed Statements of Operations
For the three months ended March 31, 2000 and the year ended December 31, 1999
The following unaudited pro forma condensed statements of operations have
been presented as if the acquisitions of the Windsor Park Properties 3 and
Windsor Park Properties 6 assets and liabilities and the related financing
had been completed as of January 1, 1999. The unaudited pro forma condensed
statements of operations and related notes should be read in conjunction
with N' Tandem Trust's ("N'Tandem" or the "Trust") audited financial
statements that are included in the Trust's Annual Report on Form 10-KSB as
filed with the Securities and Exchange Commission (the "Commission"). The
unaudited pro forma condensed statements of operations are not necessarily
indicative of what actual results of operations of the Trust would have been
had the acquisitions occurred on January 1, 1999 nor does it represent the
results of operations of the Trust for future periods.
28
<PAGE>
N'Tandem Trust
Pro Forma Condensed Statement of Operations
(unaudited)
For the Three Months Ended March 31, 2000
<TABLE>
<CAPTION>
N'Tandem WPP 3 WPP 6 Pro Forma N'Tandem
Historical Historical Historical Adjustments Pro Forma
------------------------------------------------------------------------
(Note 1) (Note 1) (Note 1) (Note 2)
<S> <C> <C> <C> <C> <C>
REVENUES
--------
Rent and utilities $ 1,779,100 $ 394,100 $ 122,400 $ 2,295,600
Equity in earnings (losses) of joint
ventures and limited partnerships (34,700) 13,100 83,200 61,600
Other 55,500 9,500 7,200 72,200
------------------------------------------------------------------------
1,799,900 416,700 212,800 0 2,429,400
COSTS AND EXPENSES
------------------
Property operating expenses 840,600 213,300 99,500 1,153,400
Interest 1,138,700 34,700 - 346,200 a 1,519,600
Advisory Fee 138,500 - - 65,000 c 203,500
Depreciation 482,800 63,500 36,300 40,200 b 622,800
General and administrative:
Related parties -- 5,800 5,800 11,600
Other 34,800 42,600 41,400 118,800
------------------------------------------------------------------------
2,635,400 359,900 183,000 451,400 3,629,700
------------------------------------------------------------------------
Net income (loss) $ (835,500) $ 56,800 $ 29,800 $ (451,400) $ (1,200,300)
========================================================================
Preferred Dividends Paid (36,800) (36,800)
=========== ============
Net loss attributable to common shares $ (872,300) $ (1,237,100)
=========== ============
Basic and diluted loss per common share $ (7.98) $ (11.32)
=========== ============
</TABLE>
The accompanying notes are an integral part of the pro forma condensed financial
statements.
29
<PAGE>
N'Tandem Trust
Pro Forma Condensed Statement of Operations
(Unaudited)
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
N'Tandem WPP 3 WPP 6 Pro forma N'Tandem
Historical Historical Historical Adjustments Pro Forma
(Note 1) (Note 1) (Note 1) (Note 2) (Note 3)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
REVENUES
--------
Rent and utilities $ 4,615,100 $ 1,579,900 $ 504,900 $ 6,699,900
Equity in earnings (losses) of joint
ventures and limited partnerships (52,200) 23,300 337,600 308,700
Gain on sale of property held for sale -- 424,600 -- (424,600) d
Other 197,800 44,900 24,700 267,400
--------------------------------------------------------------------------------
4,760,700 2,072,700 867,200 (424,600) 7,276,000
COSTS AND EXPENSES
------------------
Property operating expenses 2,209,300 920,100 212,700 3,342,100
Interest 2,534,700 183,100 - 1,384,800 a 4,102,600
Advisory Fee 346,700 - - 259,900 c 606,600
Depreciation 1,230,400 206,600 133,300 220,000 b 1,790,300
General and administrative:
Related parties 14,100 25,700 23,300 63,100
Other 232,800 108,400 95,100 436,300
--------------------------------------------------------------------------------
6,568,000 1,443,900 464,400 1,864,700 10,341,000
--------------------------------------------------------------------------------
Net income (loss) $(1,807,300) $ 628,800 $ 402,800 $ (2,289,300) $ (3,065,000)
================================================================================
Preferred Dividends Paid (147,100) (147,100)
=========== ============
Net loss attributable to common shares $(1,954,400) $ 628,800 $ 402,800 $ (2,289,300) $ (3,212,100)
================================================================================
Basic and diluted loss per common share $ (17.88) $ (29.39)
=========== ============
</TABLE>
The accompanying notes are an integral part of the pro forma condensed financial
statements.
30
<PAGE>
N' TANDEM TRUST
Pro Forma Condensed Balance Sheet
As of March 31, 2000
The following unaudited pro forma condensed balance sheet has been presented
as if the acquisition of the Windsor Park Properties 3 and Windsor Park
Properties 6 assets and liabilities and the related financing had been completed
on March 31, 2000. The unaudited pro forma condensed balance sheet should be
read in conjunction with the Trust's Annual Report on Form 10-KSB as filed with
the Securities and Exchange Commission. The unaudited pro forma condensed
balance sheet is not necessarily indicative of what the actual financial
position of the Trust would have been had the acquisitions occurred on March 31,
2000 nor does it represent the future financial position of the Trust.
31
<PAGE>
N'Tandem Trust
Pro Forma Condensed Balance Sheet
(Unaudited)
As of March 31, 2000
--------------------
<TABLE>
<CAPTION>
N'Tandem WPP 3 WPP 6 Pro forma N'Tandem
Historical Historical Historical Adjustments Pro Forma
-------------------------------------------------------------------------------------
(Note 1) (Note 1) (Note 1) (Note 3)
<S> <C> <C> <C> <C> <C>
ASSETS
------
Property held for investment, net $ 43,321,800 $ 15,574,100 a $ 58,895,900
Property held for sale, net $ 3,286,600 $ 1,515,200 $ (4,801,800) b -
Investments in joint ventures
and limited partnerships 5,262,800 1,128,500 4,492,000 (5,620,500) b 10,048,900
4,786,100 a
Cash and cash equivalents 807,000 209,600 488,600 (698,200) b 807,000
Restricted cash 708,100 - 41,100 a 749,200
Deferred financing costs, net 829,300 22,400 178,800 a 1,008,100
(22,400) b
Other assets 790,300 319,600 268,700 16,500 a 806,800
(588,300) b
-------------------------------------------------------------------------------------
Total assets $ 51,719,300 $ 4,966,700 $ 6,764,500 $ 8,865,400 $ 72,315,900
=====================================================================================
LIABILITIES AND EQUITY
----------------------
Liabilities:
Mortgage notes payable $ 27,057,600 1,170,400 - 12,200,000 a $ 39,257,600
(1,170,400) b
Term loan payable 400,000 - (400,000) b -
Line of credit 2,170,100 - - 7,423,400 a 9,593,500
Note payable to Chateau Communities, Inc. 19,972,400 - - 19,972,400
Accounts payable 11,400 11,600 20,300 (31,900) b 11,400
Accrued expenses 421,300 221,100 92,000 (313,100) b 421,300
Other liabilities 1,884,600 39,800 8,900 193,500 a 2,078,100
(48,700) b
Due to general partner and affiliates 620,500 210,500 84,900 779,700 a 1,400,200
(295,400) b
-------------------------------------------------------------------------------------
Total liabilities 52,137,900 2,053,400 206,100 18,337,100 72,734,500
Shareholders' Equity:
Preferred shares of beneficial
interest, $0.01 par value;
unlimited Shares authorized;
98,073 shares issued and
outstanding 2,121,700 2,121,700
Common shares of beneficial interest,
$0.01 par value; unlimited
Shares authorized; 109,308
shares issued and outstanding 2,401,400 2,401,400
Dividends in excess of accumulated
earnings (4,941,700) - (4,941,700)
Partners' equity:
Limited partners 2,915,600 6,552,900 (9,468,500) b -
General partners (2,300) 5,500 (3,200) b -
-------------------------------------------------------------------------------------
Total Equity (418,600) 2,913,300 6,558,400 (9,471,700) (418,600)
-------------------------------------------------------------------------------------
Total Liabilities and Equity $ 51,719,300 $ 4,966,700 $ 6,764,500 $ 8,865,400 $ 72,315,900
=====================================================================================
</TABLE>
The accompanying notes are an integral part of the pro forma condensed financial
statements.
32
<PAGE>
N'TANDEM TRUST
NOTES TO CONDENSED PRO FORMA FINANCIAL STATEMENTS
1. HISTORICAL FINANCIAL STATEMENTS
The historical financial statements, which are included in the Trust's
Form 10-QSB/A and Windsor Park Properties 3 and Windsor Park Properties 6
Quarterly Reports on Form 10-QSB and Annual Reports on Form 10-KSB as
filed with the Commission, include the accounts of the Trust and Windsor
Park Properties 3 and Windsor Park Properties 6 as of and for the three
months ended March 31, 2000 and the year ended December 31, 1999,
respectively.
2. PRO FORMA ADJUSTMENTS - STATEMENTS OF OPERATIONS
The pro forma adjustments for the pro forma condensed statements of
operations are as follows:
<TABLE>
<CAPTION>
Three Months
Ended Year Ended
March 31, 2000 December 31, 1999
-------------------- ----------------------
<S> <C> <C> <C>
a. To adjust interest on $11,000,000 of indebtedness
payable to SunAmerica Life Insurance Company
("SunAmerica"), $1,200,000 of indebtedness payable
to Heller Financial, and $7,423,400 drawn on the
Trust's line of credit, incurred at a weighted
average rate of 7.99% for the period beginning
January 1, 1999 $346,200 $1,384,800
b. To adjust depreciation of acquired properties based
on an average 20 year life $ 40,200 $ 220,000
c. An advisory fee representing 1% of the gross purchase
price of $25,989,600 payable to the Trust's advisor
pursuant to the N'Tandem advisory agreement $ 65,000 $ 259,900
d. Exclusion of gain on sale of a community that was sold
by Windsor Park Properties 3 in April, 1999 - ($424,600)
3. PRO FORMA ADJUSTMENTS - BALANCE SHEET
a. Reflects the acquisition of five manufactured home communities and partial ownership interests in
nine other manufactured home communities (together, the "Acquired Properties"). The aggregate
purchase price was $25,989,600, of which $11,000,000 was borrowed from SunAmerica, a $1.2 million
mortgage was assumed, and $7,423,400 was funded by the Trust's line of credit. In accordance with
the advisory agreement, the Trust will pay the Windsor Corporation an acquisition fee equal to 3%
of the aggregate purchase price, which amounts to $779,700. In connection with securing the
financing agreements, $178,800 of fees were paid.
b. Reflects the sale by Windsor Park Properties 3 and Windsor Park Properties 6 of the Acquired
Properties.
</TABLE>
33
