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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
[ X ] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the year ended December 31, 2000
Or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission file number 33-85492
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CP LIMITED PARTNERSHIP
(exact name of registrant as specified in its charter)
MARYLAND 38-3140664
(State of incorporation) (I.R.S. Employer
Identification No.)
6160 South Syracuse Way, Greenwood Village, Colorado 80111
(Address of principal executive offices)
Registrant's telephone number, including area code: (303) 741-3707
Securities registered pursuant to section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes [X] No [ ]
CP LIMITED PARTNERSHIP
FORM 10-K ANNUAL REPORT
FOR THE YEAR ENDED DECEMBER 31, 2000
TABLE OF CONTENTS
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Item Pages
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PART I
1. Business 3
2. Properties 7
3. Legal Proceedings 12
4. Submission of Matters to a Vote of Security Holders 12
PART II
5. Market for Registrant's Common Equity and
Related Security Holder Matters 12
6. Selected Financial Data 13
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 14
7A. Quantitative and Qualitative Disclosures About Market Risk 19
8. Financial Statements and Supplementary Data 21
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 37
PART III
10. Directors and Executive Officers of the Registrant 37
11. Executive Compensation 37
12. Security Ownership of Certain Beneficial Owners
and Management 37
13. Certain Relationships and Related Transactions 37
PART IV
14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K 38
Signatures 42
PART I
Item 1. Business
- -------- --------
General Development of Business
CP Limited Partnership (the "Company") is a Maryland Partnership. Chateau
Communities, Inc. ("Chateau"), a Maryland Corporation, is a self-administered
and self-managed equity real estate investment trust ("REIT") and is one of the
largest owner/managers of manufactured home communities in the United States.
Chateau conducts substantially all of its activities through the Company in
which it owns, directly and through ROC Communities, Inc. ("ROC"), the other
general partner of the Company, an approximate 89% general partner interest.
The Company owns and operates 166 manufactured home community properties (the
"Properties") containing 52,347 homesites and 1,359 park model/RV sites in 28
states. The Company also fee manages 44 manufactured home community properties
containing 9,200 homesites. In addition, the Company is involved in the
development and expansion of manufactured home communities, and through its
subsidiary, Community Sales, Inc. ("CSI"), the sale of new and pre-owned homes,
brokerage of used homes and in assisting residents in arranging financing and
insurance services.
Formation of the Company
The Company was formed by Chateau, as general partner, and Chateau Estates, as
the initial limited partner, on September 16, 1993.
Industry Overview
A manufactured home community is a residential subdivision designed and improved
with homesites for the placement of manufactured homes, including related
improvements and amenities. Manufactured homes are detached, single-family
homes which are produced off-site by manufacturers and installed on sites within
the community. Manufactured homes are available in a variety of architectural
styles and floor plans, offering a variety of amenities, custom options and on-
site built additional structures.
Modern manufactured home communities are similar to typical residential
subdivisions and generally contain centralized entrances, paved streets, curbs
and gutters and parkways. In addition, such communities often provide a variety
of amenities to residents which may include a clubhouse, swimming pools and
jacuzzis, playgrounds, basketball courts, picnic areas, shuffleboard courts,
tennis courts, cable television service, golf courses, marinas and laundry
facilities. Utilities are provided or arranged for by the owner of the
community. Some communities provide water and sewer service through public or
private utilities, while others provide these services to residents from on-site
facilities.
The owner of each home in a manufactured home community leases a site from the
community. The manufactured home community is the owner of the underlying land,
utility connections, streets, lighting, driveways, common area amenities and
other capital improvements and is responsible for enforcement of community
guidelines and maintenance. Each owner within the manufactured home community
is responsible for the maintenance of his home and leased site. Additionally,
manufactured home communities tend to have stable resident bases, with
relatively few residents moving manufactured homes out of the communities.
Management thus tends to be more stable, and capital expenditures needs less
significant, relative to multi-family rental apartment complexes.
Operating and Investment Strategies
The Company seeks to maximize long-term growth in income and portfolio value
through active management and expansion of certain of its manufactured home
communities and selective acquisition and development of additional communities.
The Company focuses on manufactured home communities that have growth potential
and expects to hold such properties for long-term investment and capital
appreciation. The Company's operating and investment strategies include:
3
Operations
* Providing attractive and desirable manufactured home communities
for existing and prospective residents;
* Maintaining and upgrading communities on a continuous basis through
a program of regular and preventive maintenance and replacement;
* Offering residents accessibility to on-site managers to maximize
retention, encourage home maintenance and improvements and to
minimize turnover;
* Providing frequent personal contact between on-site managers and
residents to foster a sense of pride within the community and to
enhance community desirability;
* Offering potential community residents the convenience of
purchasing a home already in place within the community or ordering
a new home;
* Increasing value to residents by providing additional value-added
services; and
* Assisting potential residents in securing financing and insurance
for their home.
Development, Expansion and Acquisitions
* Utilizing the expertise and relationships developed by the
Company's management to identify new development opportunities;
* Selectively developing new communities in strategically desirable
regions where development is supported by favorable demographics
and strong market demand;
* Capitalizing on opportunities to renovate and expand properties
consistent with local market demand;
* Selectively acquiring well-located manufactured home communities
that demonstrate the potential for increase in revenue and cash
flow through professional property management, improved operating
efficiencies, aggressive leasing and, where appropriate, expansion
on adjacent land; and
* Acquiring properties in existing markets in order to achieve
economies of scale in operations, and in new markets where
portfolios may be acquired with regional management in place.
Financing Strategies
The Company intends to maintain a conservative and flexible capital structure
that enables it to (i) continue to access the capital markets on favorable
terms; (ii) enhance potential earnings growth; (iii) minimize its level of
encumbered assets; and (iv) limit its exposure to variable rate debt. The
Company intends to maintain a debt-to-market capitalization ratio of
approximately 50% or less. The Company, however, may from time to time re-
evaluate this policy and decrease or increase such ratio accordingly in light of
then current economic conditions, relative costs to the Company of debt and
equity capital, market values of the properties and other factors.
4
Expansion and Improvement of Manufactured Home Community Properties
The Company will seek to increase the income generated from its manufactured
home communities by expanding the number of sites available to be leased to
residents if justified by local market conditions and permitted by zoning and
other applicable laws, and by filling vacant sites. During 2000, the Company
substantially completed the development of 275 expansion sites. As of December
31, 2000, the Company owned undeveloped land adjacent to existing communities
containing approximately 4,600 expansion sites, which are zoned for manufactured
housing. The undeveloped land will facilitate additional growth to the extent
market conditions warrant. In addition, where appropriate, the Company will
consider upgrading or adding facilities and amenities to certain communities in
order to make those communities more attractive in their market.
The Company is currently involved in seven joint ventures to construct ground-up
"greenfield communities". In the majority of the arrangements, the Company acts
as the developer or co-developer, performing all accounting and property
management functions and the Company acts as a lender to finance the development
costs. As such, the Company advances amounts to the joint ventures to fund
construction and recognizes the related interest income as earned. The Company
primarily borrows on its line of credit to fund the advances and, accordingly,
includes the related borrowing costs in interest expense and related debt in its
balance sheet. In the majority of the arrangements, the Company has an option
to purchase the completed community when it reaches a pre-determined occupancy
rate. The Company is also involved in two joint ventures in which its joint
venture partner is constructing the communities. The Company has similar
arrangements to lend these joint ventures funds to finance development. The
Company accounts for joint ventures that it does not control utilizing the
equity method of accounting.
2000 Property Acquisitions
During 2000, the Company completed two acquisitions in Alabama and Georgia of
410 homesites for $4,150,000. In addition, the Company acquired land to be used
for future development for a total of $3,427,000.
Sales Brokerage and Finance
The Company conducts its sales and brokerage activities through CSI, which is
operated as a taxable subsidiary of the Operating Partnership. During 2000, CSI
sold 562 new or pre-owned homes and brokered the sales of 1,201 homes. CSI also
has a Financial Services Division, which arranges financing and insurance
services for prospective residents. During 2000, the Financial Services
Division arranged financing on approximately 770 loans.
Competition
Many of the Properties are located in developed areas that include other
manufactured home communities. The number of competitive manufactured home
community properties in a particular area could have a material effect on the
Company's ability to lease sites at its communities and the rents charged. In
addition, other forms of multi-family residential properties and single-family
housing provide housing alternatives to residents.
Employees
As of December 31, 2000, the Company had approximately 1,200 full-time
employees. The Company utilizes a resident administrator for the on-site
administration of each of the Properties. Important duties of on-site
administrators, as well as the office manager, include extensive contact with
residents through initial introduction to community guidelines and on-going
accessibility for resident assistance. Typically, clerical and maintenance
workers are employed to assist in the management and care of residents and the
properties. Direct supervision of on-site administrators is the responsibility
of the Company's regional vice presidents and managers and four divisional
presidents. These individuals have significant experience in addressing the
needs of residents and in finding or creating innovative approaches to value
maximization and increasing cash flow from property operations. Approximately
90 corporate employees, who assist on-site administrators in all the property
management functions, also support field management staff.
5
Commitment to resident satisfaction is demonstrated by ongoing training that the
Company provides for on-site staff. Community administrators meet periodically
at regional and divisional seminars to review Company philosophy and policy, to
discuss relevant administration issues and solutions and to share ideas and
experiences.
Tax Status
The Company is not liable for Federal income taxes as the partners recognize
their proportionate share of income or loss in their tax returns. Therefore, no
provision for income taxes is included in the Company's financial statements.
Cautionary Statement Concerning Forward-Looking Information
The following discussion should be read in conjunction with the consolidated
financial statements and Notes thereto included elsewhere in this Annual Report.
Certain statements in this discussion constitute "forward-looking statements"
within the meaning of Section 21E of the Securities Exchange Act of 1934, as
amended. Such forward-looking statements may involve the Company's plans,
objectives and expectations, which are dependent upon a number of factors,
including site expansions, acquisitions, development and other new business
initiatives which are all subject to a number of contingency factors such as the
effects of national and local economic conditions, changes in interest rates,
supply and demand for affordable housing and the condition of the capital
markets that may prevent the Company from achieving its objectives.
6
Item 2. Properties
- ------- ----------
On December 31, 2000, the Properties consisted of 166 manufactured home
communities containing 52,347 homesites and 1,359 park model/RV sites, in 28
states, with amenities designed for either retirement or family living. The
Company also fee managed 44 manufactured home communities containing 9,200 sites
in 16 states. The Company also owned land adjacent to certain existing
communities containing approximately 4,600 expansion sites, which, although not
yet developed, was zoned for manufactured housing.
On December 31, 2000, the Properties had an occupancy rate of approximately 91.1
percent with weighted average rent for the year ended December 31, 2000 of $316
per month. This compares to an occupancy rate of 91.7 percent and weighted
average rent of $302 per month for the prior year. Weighted average rent is
calculated as rental and utility income for the period, on a monthly basis,
divided by the weighted average occupied sites. Weighted average occupancy is
computed by averaging the number of revenue producing sites at the end of each
month in the period.
The Company believes that the Properties provide amenities and common facilities
that create a safe and attractive community for residents. All of the
Properties provide residents with appealing amenities with most offering a
clubhouse, a swimming pool and playgrounds. Many Properties offer additional
amenities such as sauna/whirlpool spas, indoor pools, tennis courts, libraries,
shuffleboard courts, basketball courts, golf courses, day care facilities,
exercise rooms, marinas and laundry facilities.
Since residents own their homes, it is their responsibility to maintain their
homes and surrounding area. The communities have extensive guidelines for
maintenance. It is management's role to provide maintenance of common areas,
facilities and amenities and to ensure that residents comply with community
policies. The Company holds periodic meetings of its property management
personnel for training and implementation of the Company's strategies, and
property administrators make a daily inspection of the properties. The Company
believes that, due in part to this strategy, the Properties historically have
had and will continue to have low turnover and high occupancy rates. Since
1989, the Properties have averaged an annual turnover of homes (where the home
is moved out of the community) of three to four percent.
Leases
The typical lease entered into between the resident and one of the Company's
manufactured home communities for the rental of a site is month-to-month or
year-to-year, renewable upon consent of both parties or, in some instances, as
provided by statute.
Property Information
The Company classifies all its properties in either the Stable Portfolio or the
Active Expansion Portfolio. The Stable Portfolio includes the communities where
the Company does not have, or has not recently had, expansion of the community.
These communities normally have stable occupancy rates. The Active Expansion
are those properties where the Company is currently, or has recently, expanded
the community by adding homesites to the available homesites for rent.
Generally, these communities will have a lower occupancy rate than the Stable
Portfolio as they are in the lease-up phase. In addition, the Company owns
three park model/RV communities.
The following table sets forth certain information, as of December 31, 2000,
regarding the Properties, excluding the three park model/RV communities.
7
Total Weighted Average
Total Number of Occupancy Monthly Rent per
Location Communities Sites as of Site
Community State (Closest Major City) 12/31/00 12/31/00 12/31/00
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100 Oaks AL Fultondale 230 89.1% $ 227
Lakewood AL Montgomery 310 74.5% $ 172
Green Park South AL Montgomery 417 93.8% $ 254
Total Alabama 3 957 86.4% $ 221
Bermuda Palms CA Palm Springs 185 95.1% $ 374
Eastridge CA San Jose 187 99.5% $ 659
La Quinta Ridge CA Palm Springs 152 96.1% $ 421
The Colony CA Palm Springs 220 98.2% $ 675
The Orchard CA San Francisco 233 99.6% $ 604
Total California 5 977 97.9% $ 558
CV-Denver CO Denver 345 93.9% $ 389
CV-Longmont CO Longmont 310 99.0% $ 402
Friendly Village CO Greeley 226 98.2% $ 312
Pine Lakes Ranch CO Denver 762 98.8% $ 360
Redwood Estates CO Denver 753 98.0% $ 358
Total Colorado 5 2,396 97.8% $ 365
Cedar Grove CT New Haven 60 96.7% $ 301
Evergreen CT New Haven 102 96.1% $ 302
Green Acres CT New Haven 64 95.3% $ 300
Highland CT New Haven 50 92.0% $ 319
Total Connecticut 4 276 95.3% $ 305
Anchor North FL Tampa Bay 94 94.7% $ 279
Audubon FL Orlando 280 96.8% $ 276
Colony Cove FL Sarasota 2,211 99.4% $ 354
Conway Circle FL Orlando 111 96.4% $ 310
Crystal Lake FL St. Petersburg 166 91.6% $ 277
* Crystal Lakes FL Tampa 330 59.7% $ 155
CV-Jacksonville FL Jacksonville 643 88.8% $ 315
Del Tura FL Fort Myers 1,344 88.0% $ 456
Eldorado Estates FL Daytona Beach 126 96.0% $ 271
Emerald Lake FL Fort Myers 201 99.0% $ 296
Fairways Country Club FL Orlando 1,141 99.3% $ 302
* Foxwood Farms FL Orlando 375 79.2% $ 211
Hidden Valley FL Orlando 303 99.3% $ 311
Indian Rocks FL Clearwater 148 64.2% $ 265
Jade Isle FL Orlando 101 98.0% $ 320
Lakeland Harbor FL Tampa 504 99.8% $ 256
Lakeland Junction FL Tampa 191 100.0% $ 201
Lakes at Leesburg FL Orlando 640 100.0% $ 269
Land O' Lakes FL Orlando 173 98.3% $ 260
Midway Estates FL Vero Beach 204 72.1% $ 347
Oak Springs FL Orlando 438 72.8% $ 250
Orange Lake FL Orlando 242 97.1% $ 259
Palm Beach Colony FL West Palm Beach 285 95.4% $ 311
Pedaler's Pond FL Orlando 214 85.5% $ 209
Pinellas Cascades FL Clearwater 238 92.0% $ 380
Shady Lane FL Clearwater 108 92.6% $ 275
8
Shady Oak FL Clearwater 250 98.0% $335
Shady Village FL Clearwater 156 96.8% $309
Southwind Village FL Naples 338 93.8% $313
Starlight Ranch FL Orlando 783 95.5% $315
Tarpon Glen FL Clearwater 170 88.2% $312
Town & Country FL Orlando 73 97.3% $316
Whispering Pines FL Clearwater 392 96.4% $369
Winter Haven Oaks FL Orlando 343 53.1% $214
Total Florida 34 13,316 91.9% $314
Atlanta Meadows GA Atlanta 75 98.7% $242
* Butler Creek GA Augusta 376 77.9% $198
Camden Point GA Kingsland 268 58.6% $167
Castlewood Estates GA Atlanta 334 83.8% $328
Colonial Coach Estates GA Atlanta 481 82.7% $295
Golden Valley GA Atlanta 131 94.7% $265
Landmark GA Atlanta 524 92.2% $296
Marnelle GA Atlanta 205 96.1% $290
Oak Grove Estates GA Albany 174 88.5% $146
Paradise Village GA Albany 226 73.9% $160
South Oaks GA Atlanta 295 48.8% $165
Total Georgia 11 3,089 80.0% $242
Lakewood Estates IA Davenport 180 93.3% $265
Terrace Heights IA Dubuque 317 94.0% $262
Total Iowa 2 497 93.8% $263
Coach Royale ID Boise 91 98.9% $299
Maple Grove Estates ID Boise 270 91.1% $310
Shenandoah Estates ID Boise 154 95.5% $296
Total Idaho 3 515 93.8% $304
Falcon Farms IL Moline 215 90.7% $241
Maple Ridge IL Kankakee 75 98.7% $279
Maple Valley IL Kankakee 201 99.5% $279
Total Illinois 3 491 95.5% $263
* Broadmore IN South Bend 358 86.0% $259
Forest Creek IN South Bend 167 97.6% $300
* Fountainvue IN Marion 120 89.2% $167
Hickory Knoll IN Indianapolis 326 96.0% $306
Mariwood IN Indianapolis 296 87.2% $296
Oak Ridge IN South Bend 204 97.1% $258
Pendleton IN Indianapolis 102 92.2% $224
* Sherwood IN Marion 135 48.9% $163
Skyway IN Indianapolis 156 92.9% $298
Twin Pines IN Goshen 238 95.0% $244
Total Indiana 10 2,102 89.3% $263
Mosby's Point KY Cincinnati 150 96.0% $305
Rolling Hills KY Louisville 158 89.2% $214
Total Kentucky 2 308 92.5% $258
Pinecrest Village LA Shreveport 446 72.6% $163
Stonegate, LA LA Shreveport 157 96.2% $184
Total Louisiana 2 603 78.8% $169
Hillcrest MA Boston 82 98.8% $329
Leisurewoods Rockland MA Boston 394 99.2% $340
* Leisurewoods Taunton MA Boston 223 78.9% $293
The Glen MA Boston 36 100.0% $398
Total Massachusetts 4 735 93.1% $328
9
* Algoma Estates MI Grand Rapids 308 91.9% $310
Anchor Bay MI Detroit 1,384 95.7% $353
Arbor Village MI Jackson 266 97.7% $252
Avon MI Detroit 617 98.9% $415
* Canterbury Estates MI Grand Rapids 290 62.8% $246
Chesterfield MI Detroit 345 96.8% $370
* Chestnut Creek MI Flint 221 82.4% $280
Clinton MI Detroit 1,000 97.5% $367
Colonial Acres MI Kalamazoo 612 95.1% $294
Colonial Manor MI Kalamazoo 195 95.9% $280
Country Estates MI Grand Rapids 254 91.3% $283
* Cranberry MI Pontiac 328 75.3% $372
Ferrand Estates MI Grand Rapids 420 98.8% $345
* Forest Lake Estates MI Grand Rapids 221 81.0% $287
* Grand Blanc MI Flint 478 89.3% $349
Holiday Estates MI Grand Rapids 205 98.0% $331
Howell MI Lansing 455 98.0% $376
* Huron Estates MI Flint 111 89.2% $219
Lake in the Hills MI Detroit 238 99.2% $387
Leonard Gardens MI Grand Rapids 271 86.7% $273
Macomb MI Detroit 1,427 98.1% $381
Norton Shores MI Grand Rapids 656 86.0% $267
Novi MI Detroit 725 93.0% $417
Oakhill MI Flint 504 92.1% $357
Old Orchard MI Flint 200 98.5% $331
Orion MI Detroit 423 97.9% $356
Pinewood MI Columbus 380 97.1% $315
Pleasant Ridge MI Lansing 305 76.4% $229
Royal Estates MI Kalamazoo 183 93.4% $322
Science City MI Midland 171 95.3% $301
Springbrook MI Utica 400 97.5% $338
Sun Valley MI Jackson 197 92.9% $249
Swan Creek MI Ann Arbor 294 99.3% $354
* The Highlands MI Flint 683 89.3% $300
* Torrey Hills MI Flint 346 96.2% $354
Valley Vista MI Grand Rapids 137 94.2% $316
Villa MI Flint 319 92.8% $347
* Westbrook MI Detroit 299 86.0% $384
Yankee Spring MI Grand Rapids 284 90.1% $261
Total Michigan 39 16,152 93.1% $337
Cedar Knolls MN Minneapolis 458 97.8% $403
Cimmaron MN St. Paul 505 98.4% $405
Rosemount MN Minneapolis/St. Paul 182 99.5% $391
Twenty-Nine Pines MN St. Paul 152 90.8% $323
Total Minnesota 4 1,297 97.5% $393
* Springfield Farms MO Springfield 136 77.2% $184
Total Missouri 1 136 77.2% $184
Countryside Village G.F. MT Great Falls 226 99.1% $204
Total Montana 1 226 99.1% $204
Autumn Forest NC Greensboro 299 82.9% $240
Foxhall Village NC Raleigh 315 94.3% $341
Oakwood Forest NC Greensboro 481 91.7% $259
Woodlake NC Greensboro 308 93.8% $246
Total North Carolina 4 1,403 90.9% $247
10
Buena Vista ND Fargo 400 98.0% $270
Columbia Heights ND Grand Forks 302 98.3% $282
President's Park ND Grand Forks 174 85.6% $232
Meadow Park ND Fargo 117 84.6% $210
Total North Dakota 4 993 90.8% $251
Casual Estates NY Syracuse 953 69.0% $315
Meadowbrook NY Ithaca 237 67.1% $271
Oak Orchard Estates NY Rochester 235 89.8% $287
Shadybrook NY Syracuse 97 72.2% $315
Total New York 4 1,522 72.1% $304
* Hunter's Chase OH Lima 135 58.5% $170
Vance OH Columbus 110 88.2% $248
Willo-Arms OH Cleveland 262 99.2% $207
Yorktowne OH Cincinnati 354 95.8% $331
Total Ohio 4 861 90.0% $258
Crestview OK Stillwater 237 85.7% $216
Total Oklahoma 1 237 85.7% $216
Knoll Terrace OR Salem 212 92.9% $371
Riverview OR Portland 133 97.7% $408
Total Oregon 2 345 94.8% $385
* Carnes Crossing SC Summerville 535 97.4% $186
* Conway Plantation SC Myrtle Beach 299 69.9% $182
Saddlebrook SC Charleston 426 95.8% $206
Total South Carolina 3 1,260 90.3% $192
* Eagle Creek TX Tyler 199 89.9% $158
Homestead Ranch TX McAllen 126 87.3% $210
Leisure World TX Brownsville 201 95.0% $207
The Homestead TX McAllen 99 96.0% $233
Trail's End TX Brownsville 299 81.3% $205
Total Texas 5 924 88.5% $199
* Regency Lakes VA Winchester 384 81.8% $214
Total Virginia 1 384 81.8% $214
Eagle Point WA Seattle 230 97.0% $462
Total Washington 1 230 97.0% $462
Breazeale WY Laramie 115 98.3% $248
Total Wyoming 1 115 98.3% $248
Totals 163 52,347 91.1% $316
* These properties are included in the Active Expansion Portfolio.
11
Indebtedness
The following table sets forth certain information relating to the secured and
unsecured indebtness of the Company outstanding as of December 31, 2000.
- ---------------------------------------------
Weighted
Average
Amount of Percent of Interest
(In thousands) Indebtedness Total Debt Rate Maturity Date
------------------- ------------ ---------- ---------------
Mortgage Debt:
Collateral Mortgage (7 properties) $ 115,829 22% 7.8% 2010
Other (8 properties) 21,070 4% 7.8% 2002-2008
----------------- ----------- -------------
Total Mortgages 136,899 26% 7.8%
Unsecured Debt:
Unsecured Senior Notes 50,000 9% 8.0% 2003
Unsecured Senior Notes 70,000 13% 7.5% 2003
Unsecured Senior Notes 100,000 19% 8.3% 2005
Unsecured Senior Notes 100,000 19% 6.4% 2004
----------------- ----------- -------------
Total Unsecured 320,000 60% 7.5%
----------------- ----------- -------------
Total Fixed Rate 456,899 86% 7.6%
Variable Rate Debt:
Credit Facilities 74,730 14% 7.5% 2001
-----------------
Total Secured and Unsecured $ 531,629
=================
Item 3. Legal Proceedings
None.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
PART II
Item 5. Market for Registrant's Common Equity and Related Security
Holder Matters
Not applicable.
12
Item 6. Selected Financial Data
The following table sets forth summary financial information of the Company for
the periods and dates indicated.
For the Year Ended December 31,
(In thousands, except OP Unit data) 2000 1999 1998 1997(1) 1996
------------- ------------- ------------- -------------- -----------
Operating Data:
Revenues
Rental income $ 186,963 $ 177,789 $ 167,206 $ 134,801 $ 67,233
Management fee, interest and other income 17,802 11,574 5,924 3,368 151
------------- ------------- ------------- -------------- -----------
Total revenues 204,765 189,363 173,130 138,169 67,384
Expenses
Property operating and administrative 75,723 73,062 67,699 56,053 26,870
Depreciation and amortization 43,920 41,826 39,658 31,510 11,452
Interest and related amortization 36,400 32,318 31,287 25,918 12,962
------------- ------------- ------------- -------------- -----------
Total expenses 156,043 147,206 138,644 113,481 51,284
------------- ------------- ------------- -------------- -----------
Income before net gain on sales of properties 48,722 42,157 34,486 24,688 16,100
Net gain on sales of properties - 2,805 - - -
------------- ------------- ------------- -------------- -----------
Net income 48,722 44,962 34,486 24,688 16,100
Preferred OP Unit distribution 6,094 6,094 4,249 - -
------------- ------------- ------------- -------------- -----------
Net income available to common OP Unitholders $ 42,628 $ 38,868 $ 30,237 $ 24,688 $ 16,100
============= ============= ============= ============== ===========
Net income attributable to:
General Partner $ 37,786 $ 34,626 $ 26,801 $ 21,702 $ 6,534
Limited Partners 4,842 4,242 3,436 2,986 9,566
------------- ------------- ------------- -------------- -----------
Total capital $ 42,628 $ 38,868 $ 30,237 $ 24,688 $ 16,100
============= ============= ============= ============== ===========
Weighted average OP Units outstanding 32,130 31,582 30,779 26,947 14,837
Earnings per OP Unit Data:
Net income attributable to common OP Unitholders - basic $ 1.33 $ 1.23 $ 0.98 $ 0.92 $ 1.09
Net income attributable to common OP Unitholders - diluted $ 1.32 $ 1.23 $ 0.97 $ 0.91 $ 1.08
Distributions declared $ 2.06 $ 1.94 $ 1.82 $ 1.72 $ 1.62
Cash Flow Data:
Net cash provided by operating activities $ 84,961 $ 77,464 $ 72,560 $ 54,545 $ 29,755
Net cash used in investing activities $ (73,123) $ (56,777) $ (167,089) $ (61,309) $ (29,518)
Net cash provided by (used in) financing activities $ (12,087) $ (20,789) $ 80,069 $ 21,088 $ (595)
Balance Sheet Data:
Rental property, before accumulated depreciation $ 1,091,451 $1,055,450 $ 1,026,509 $ 836,175 $ 300,631
Rental property, net of accumulated depreciation $ 855,798 $ 863,435 $ 875,249 $ 723,861 $ 219,338
Total assets $ 1,017,864 $ 981,673 $ 959,194 $ 782,738 $ 232,066
Total debt $ 535,470 $ 452,556 $ 427,778 $ 387,015 $ 168,315
Total partners' capital $ 452,775 $ 482,962 $ 488,410 $ 358,238 $ 42,743
(Dollars in thousands)
Total properties (at end of period) 166 165 165 131 47
Total sites (at end of period) (2) 52,347 51,659 51,101 43,800 20,279
Weighted average occupied sites 47,466 47,181 45,882 38,053 18,889
Funds from operations (3) $ 85,917 $ 77,629 $ 69,392 $ 55,962 $ 27,460
(1) In February 1997, the Company completed the Merger with ROC
(2) Does not include 1,359 park model/RV sites, purchased in 1998
(3) Funds from operations ("FFO") is defined by the National Association of
Real Estate Investment Trusts ("NAREIT") as consolidated net income of the
Company without giving effect to gains (or losses) from debt restructuring
and sales of property and rental property depreciation and amortization.
Management believes that FFO is an important and widely used measure of the
operating performance of REITs, which provides a relevant basis for
comparison among REITs. FFO (i) does not represent cash flow from
operations as defined by generally accepted accounting principles; (ii)
should not be considered as an alternative to net income as a measure of
operating performance or to cash flows from operating, investing and
financing activities; and (iii) is not an alternative to cash flows as a
measure of liquidity. FFO is calculated as follows:
13
For the Year Ended December 31,
(In thousands) 2000 1999 1998 1997 1996
------------- ------------- -------------- -------------- --------------
Net income $ 48,722 $ 44,962 $ 34,486 $ 24,688 $ 16,100
Less:
Distributions to
Preferred OP Units 6,094 6,094 4,249 - -
Plus:
Depreciation of rental property 43,289 41,161 38,962 30,867 11,36
Amortization of intangibles - 405 446 407 -
Gain on sales of properties - (2,805) (253) - -
------------- ------------- -------------- -------------- --------------
Funds from operations $ 85,917 $ 77,629 $ 69,392 $ 55,962 $ 27,460
============= ============= ============== ============== ==============
NAREIT has revised its definition of FFO. The Company adopted the new
definition effective January 1, 2000. The new definition of FFO substantially
eliminates the add-back of non-recurring items in the calculation of FFO. The
application of this new definition decreased FFO in 1998 by $375,000, and had no
effect on any other years reported.
Item 7. Management Discussion and Analysis of Financial Condition and
- ------- -------------------------------------------------------------
Results of Operations
---------------------
The following discussion should be read in conjunction with the consolidated
financial statements and Notes thereto included elsewhere in this Annual Report.
Certain statements in this discussion constitute "forward-looking statements"
within the meaning of Section 21E of the Securities Exchange Act of 1934, as
amended. Such forward-looking statements may involve the Company's plans,
objectives and expectations, which are dependent upon a number of factors,
including site expansions, acquisitions, development and other new business
initiatives which are all subject to a number of contingency factors such as the
effects of national and local economic conditions, changes in interest rates,
supply and demand for affordable housing and the condition of the capital
markets that may prevent the Company from achieving its objectives.
Overview
The Company is one of the largest owner/managers of manufactured home
communities in the United States. The Company added 8,500 manufactured home
sites to its portfolio over the three-year period ended December 31, 2000. At
the end of this period, the Company's portfolio comprised 166 manufactured home
communities containing 52,347 manufactured homesites and 1,359 park model/RV
sites, located in 28 states.
The Company provides property management services to N'Tandem Trust ("N'Tandem")
and other manufactured home community owners, with an aggregate of 9,200
homesites. In addition, the Company owns approximately ten percent of N'Tandem
outstanding equity, has made loans to N'Tandem and provides advisory services to
N'Tandem Trust.
Company growth since the beginning of 1998 can be attributed to community
acquisitions, increased operating performance at existing communities, community
expansions, and new community development. During 1998, the Company acquired 34
communities in four separate portfolio acquisitions, containing an aggregate of
7,045 manufactured homesites and 1,359 park model/RV sites. During 1999 and
2000, the Company acquired two communities each year, containing a total of
1,034 sites (624 sites in 1999 and 410 sites in 2000).
Historical Results of Operations
Comparison of the year ended December 31, 2000 to the year ended December 31,
1999
The following table summarizes certain information relative to the Company's
properties, as of and for the years ended December 31, 2000 and 1999. The
Company considers all communities owned by the Company as of January 1, 1999 as
the "Core 1999 Portfolio".
14
Core 1999 Portfolio Total
Dollars in thousands, except per site 2000 1999 2000 1999
-------------- ------------- --------------- ---------------
As of December 31,
- ---------------------------------------
Number of communities 161 161 166 165
Total manufactured homesites 51,325 51,042 52,347 51,659
Occupied sites 46,912 46,847 47,678 47,383
Occupancy % 91.4% 91.8% 91.1% 91.7%
For the year ended, December 31,
- ---------------------------------------
Rental income $ 184,438 $ 176,872 $ 186,963 $ 177,789
Property operating expenses $ 64,557 $ 62,770 $ 65,275 $ 63,181
Net operating income $ 119,881 $ 114,102 $ 121,688 $ 114,608
Weighted average monthly rent per site $ 316 $ 302 $ 316 $ 302
For the year ended December 31, 2000, net income was $48,722,000, an increase of
$3,760,000 from the year ended December 31, 1999. The increase was due
primarily to increased net operating income from the Core 1999 Portfolio and
acquisitions. The increase in net operating income from the Company's Core 1999
Portfolio was due to increased occupancy and rental increases partially offset
by general operating expense increases. Rental revenue for the year ended
December 31, 2000 was $186,963,000, an increase of $9,174,000 from 1999.
Approximately 17 percent of the increase was due to acquisitions, net of
dispositions, and 83 percent was due to rental increases and occupancy gains in
the Company's Core 1999 Portfolio.
Weighted average occupancy for the year ended December 31, 2000 was 47,466 sites
compared with 47,181 sites for the same period in 1999. The occupancy rate for
the total portfolio was 91.1 percent on 52,347 sites as of December 31, 2000,
compared to 91.7 percent on 51,659 sites as of December 31, 1999. The occupancy
rate on the stabilized portfolio (communities where the Company does not have or
has not recently had, expansion of the community) was 92.5 percent as of
December 31, 2000. The Company also added 275 available sites to its portfolio
through expansion of its communities. On a per-site basis, weighted monthly
rental revenue for the year ended December 31, 2000 was $316 compared with $302
for the same period in 1999.
Interest income primarily includes interest on notes receivable and advances to
affiliates. The increase of $3,998,000 for the year ended December 31, 2000
from the same period in 1999 is due primarily to increased interest income from
Company-funded development projects, increased lending activity, as well as an
increase in interest rates.
Management fee and other income primarily includes management fee and
transaction fee income for the management of 44 manufactured home communities
and equity earnings from CSI. Included in this amount is approximately $3.2
million of acquisition and transaction fees due to N'Tandem's acquisitions
activity in 2000. Also included in management fee and other income is
approximately $2.1 million of management and advisory fees from the N'Tandem
properties. The Company expects to continue to earn management, advisory and
other fees from N'Tandem in 2001, and estimates the recurring component of
revenues from N'Tandem and it's properties to stabilize.
Property operating and maintenance expense for the year ended December 31, 2000
increased by $1,343,000 or 2.7 percent from the prior year. The majority of the
increase was due to operating expense increases in the Company's Core 1999
Portfolio, and to a lesser extent, acquisitions. On a per site basis, monthly
weighted average property operating and maintenance expense increased to $91.03
per site, or 2.0 percent.
Real estate taxes for the year ended December 31, 2000 increased by $751,000 or
5.9 percent from the year ended December 31, 1999. The increase is due
primarily to acquisitions, expansions of communities, and increases in property
tax rates. On a per site basis, monthly weighted average real estate taxes were
$23.57 in 2000 compared to $22.39 in 1999, an increase of 5.3 percent. Real
estate taxes may increase or decrease due to inflation, expansions and
improvements of communities, as well as changes in taxation in the tax
jurisdictions in which the Company operates.
15
Administrative expense in 2000 was 5.1 percent of total revenues as compared to
5.2 percent in 1999.
Interest and related amortization costs increased for the year ended December
31, 2000 by $4,082,000, as compared with the year ended December 31, 1999. The
increase is attributed primarily to the indebtedness incurred to finance
acquisitions, development, and lending activities. Interest expense as a
percentage of average debt outstanding decreased to approximately 7.3 percent in
2000 from 7.4 percent in 1999.
Depreciation expense for the year ended December 31, 2000 increased $2,094,000
from the same period a year ago. The increase is directly attributed to
acquisitions, expansions, and additions. Depreciation expense as a percentage
of average depreciable rental property in 2000 remained relatively unchanged
from 1999.
Comparison of the year ended December 31, 1999 to the year ended December 31,
1998
The following table summarizes certain information relative to the Company's
properties, as of and for the years ended December 31, 1999 and 1998. The
Company considers all communities owned by the Company as of January 1, 1998 as
the "Core 1998 Portfolio".
Core 1998 Portfolio Total
Dollars in thousands, except per site 1999 1998 1999 1998
------------- --------------- ------------- --------------
As of December 31,
- -------------------------------------------
Number of Communities 145 145 165 165
Total manufactured homesites 46,235 45,836 51,659 51,101
Occupied sites 42,418 42,374 47,383 47,192
Occupancy % 91.7% 92.4% 91.7% 92.4%
For the year ended, December 31,
- -------------------------------------------
Rental Income $ 162,115 $ 154,712 $ 177,789 $ 167,206
Property operating expenses $ 57,971 $ 55,122 $ 63,181 $ 59,345
Net operating income $ 104,144 $ 99,590 $ 114,608 $ 107,861
Weighted average monthly rent per site $ 307 $ 295 $ 302 $ 292
For the year ended December 31, 1999, net income was $44,962,000, an increase of
$10,476,000 from the year ended December 31, 1998. The increase was due
primarily to acquisitions and increased net operating income from the Core 1998
Portfolio. The increase in net operating income from the Company's Core 1998
Portfolio was due to increased occupancy and rental increases partially offset
by general operating expense increases. Rental revenue for the year ended
December 31, 1999 was $177,789,000, an increase of $10,583,000 from 1998.
Approximately 30 percent of the increase was due to acquisitions, net of
dispositions, and 70 percent was due to rental increases and occupancy gains in
the Company's Core 1998 Portfolio.
Weighted average occupancy for the year ended December 31, 1999 was 47,181 sites
compared with 45,882 sites for the same period in 1998. The Company also added
525 available sites to its portfolio through the expansion of its communities.
The occupancy rate for the total portfolio was 91.7 percent on 51,659 sites as
of December 31, 1999, compared to 92.4 percent on 51,101 sites as of December
31, 1998. The occupancy rate on the stabilized portfolio was 93.2 percent as of
December 31, 1999. On a per site basis, weighted average monthly rental revenue
for the year ended December 31, 1999 was $302 compared with $292 for the same
period in 1998. For the Company's Core 1998 Portfolio, on a per site basis,
weighted average monthly rental revenue for the year ended December 31, 1999 was
$307 compared with $295 for the same period in 1998, an increase of 4.0 percent.
Interest income primarily includes interest on notes receivable and advances to
joint ventures affiliates. The increase of $3,115,000 for the year ended
December 31, 1999 from the same period in 1998 is due primarily to increased
interest income from Company-funded development projects, as well as increases
in interest rates.
16
Management fee and other income primarily include management fee and transaction
fee income for the management of 44 manufactured home communities, and equity
earnings from CSI. The increase in 1999 from 1998 is due primarily to increased
development activities in which the Company funds the development costs and
recognizes interest income and expenses and increased equity earnings from CSI.
Property operating and maintenance expense for the year ended December 31, 1999
increased by $3,412,000 or 7.3 percent from the same period a year ago. The
majority of the increase was due to increases in the Company's Core 1998
Portfolio, and to a lesser extent, acquisitions. On a per site basis, monthly
weighted average property operating and maintenance expense increased to $89.21
per site, or 4.3 percent.
Real estate taxes for the year ended December 31, 1999 increased by $424,000 or
3.5 percent from the year ended December 31, 1998. The increase is due
primarily to acquisitions and expansions of communities and general increases.
On a site basis, monthly weighted average real estate taxes were $22.39 in 1999
compared to $22.25 in 1998, an increase of .63 percent. Real estate taxes may
increase or decrease due to inflation, expansions and improvements of
communities, as well as changes in tax rates in the tax jurisdictions in which
the Company operates.
Administrative expense in 1999 was 5.2 percent of total revenues as compared to
4.8 percent in 1998.
Interest and related amortization costs for the year ended December 31, 1999
increased by $1,031,000, as compared with the year ended December 31, 1998. The
increase is attributed primarily to the indebtedness incurred to finance
acquisitions and development. Interest expense as a percentage of average debt
outstanding decreased to approximately 7.4 percent for 1999 from 7.7 percent in
1998.
Depreciation expense for the year ended December 31, 1999, increased $2,168,000
from the same period a year ago. The increase is directly attributed to
acquisitions and expansions. Depreciation expense as a percentage of average
depreciable rental property in 1999 remained relatively unchanged from 1998.
Liquidity and Capital Resources
Net cash provided by operating activities was $84,961,000 for the year ended
December 31, 2000, compared to $77,464,000 for the same period in 1999. The
increase in cash provided by operating activities was due primarily to the
increase in net operating income.
Net cash used in investing activities for the year ended December 31, 2000 was
$73,123,000. This amount represents acquisitions, joint venture investments and
advances, lending activity, capital expenditures and development costs. During
2000, the Company acquired two communities with a total of 410 sites and
purchased development properties in Michigan and Iowa. These acquisitions were
financed primarily by borrowings under the Company's lines of credit.
Net cash used in financing activities for the year ended December 31, 2000 was
$12,087,000. This consisted primarily of $81,534,000 in distributions paid to
OP Unitholders, $214,997,000 in payment of debt, and repurchasing approximately
$11.3 million of common OP Units, offset partially by proceeds from debt
issuances of $295,295,000.
During 2000, the Company invested approximately $10,100,000 in the expansion of
its existing communities, resulting in the addition of 275 available sites to
its portfolio. In addition, during 2000, the Company invested or advanced
$22,000,000 to certain affiliates of the Company. This consisted primarily of
approximately $5,500,000 to joint ventures, through which the Company, or its
joint venture partner is developing manufactured home communities, and
$13,800,000 to N'Tandem, an entity in which the Company owns approximately 10
percent of its outstanding equity and has made loans aggregating $38,466,000 as
of December 31, 2000. For the year ended December 31, 2000, recurring property
capital expenditures, other than development costs, were approximately
$7,400,000. Capital expenditures have historically been financed out of
operating cash flow and it is the Company's intention that such future
expenditures will also be financed out of operating cash flow.
17
At December 31, 2000, the Company had a $100 million line of credit arrangement
with BankOne, NA acting as lead agent for a bank group to provide financing for
future construction, acquisitions and general business obligations (the "BankOne
Credit Facility"). The line of credit is unsecured, bears interest at the prime
rate of interest or, at the Company's option, LIBOR plus 80 basis points. The
line was scheduled to mature in 2001. In February 2001, the Company
renegotiated the BankOne Credit Facility and increased it from $100 million to
$125 million. The term of the new facility is three years and bears interest at
LIBOR plus 90 basis points. In addition, the Company has a $7.5 million
unsecured line of credit from US Bank, which bears interest at a rate of LIBOR
plus 125 basis points and matures in October 2001 (the "US Bank Facility" and,
together with the BankOne Credit Facility the "Credit Facilities"). As of
December 31, 2000, approximately $74.7 million was outstanding under the
Company's Credit Facilities and the Company had $32.8 million available in
additional borrowing capacity, which was increased to approximately $57.8
million in available capacity with the February 2001 expansion of the BankOne
Credit Facility.
As of December 31, 2000, the Company had outstanding, in addition to the Credit
Facilities, $320 million of unsecured senior debt with a weighted average
interest rate and remaining maturity of 7.5 percent and 3.7 years, respectively,
and $136.9 million of secured mortgage debt with a weighted average interest
rate and remaining maturity of 7.8 percent and 8.9 years, respectively. As of
December 31, 2000, the Company had approximately $535 million of total debt
outstanding, representing approximately 34 percent of the Company's total market
capitalization. All of the debt is fixed rate debt, other than the Company's
Credit Facilities, and has a weighted average interest rate of 7.6 percent.
In June 2000, the Company issued $116 million of 7.8% fixed rate mortgage debt,
maturing in 2010, and collateralized by seven properties. Also in 2000, the
Company issued a total of $150 million of Unsecured Senior Notes, $100 million
at 8.3% maturing March 1, 2005 and $50 million at 8% maturing August 1, 2003,
resulting in net proceeds of $149 million. During 2000, the Company issued and
repaid a $30 million unsecured short-term loan.
On February 29, 2000, Chateau announced the establishment of a share repurchase
program pursuant to which it may repurchase up to 1,000,000 shares of common
stock from time to time. As of December 31, 2000, Chateau repurchased 453,900
shares for approximately $11.3 million.
In addition to repayment of long-term borrowings and amounts outstanding under
the Credit Facilities, future acquisitions of communities and land for
development and new community development activities represent the principal
long-term liquidity needs of the Company. The Company does not expect to
generate sufficient funds from operations to finance these long-term liquidity
needs and instead intends to meet its long-term liquidity requirements through
additional borrowing under the Credit Facilities or other lines of credit, the
assumption of existing secured or unsecured indebtedness and, depending on
market conditions and capital availability factors, the issuance of additional
equity or debt securities.
The Company expects to meet its short-term liquidity requirements, including
expansion activities and capital expenditure requirements, through cash flow
from operations and, if necessary, borrowings under the Credit Facilities and
other lines of credit.
Inflation
All of the leases or terms of tenants' occupancies at the communities allow for
at least annual rental adjustments. In addition, all leases are short-term
(generally one year or less) and enable the Company to seek market rentals upon
reletting the sites. Such leases generally minimize the risk to the Company of
any adverse effect of inflation.
Recently Issued Accounting Standards
In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities", which
establishes accounting and reporting standards for derivative instruments and
for hedging activities. This new standard requires that all companies record
derivatives on the balance sheet as assets or liabilities, measured at fair
value. Gains or losses resulting from changes in the values of those
derivatives would be accounted for depending on the use of the derivative and
whether it qualifies for hedge accounting. In June 1999, FASB issued SFAS No.
137, "Accounting for Derivative Instruments and Hedging Activities-Deferral of
the
18
Effective Date of SFAS No. 133-an amendment of SFAS No. 133." SFAS No. 137
defers the effective date of SFAS No. 133 to fiscal years beginning after June
15, 2000.
In June 2000, the FASB issued SFAS No. 138,"Accounting for Certain Derivative
Instruments and Certain Hedging Activities-an amendment of FASB Statement No.
133". This statement amends certain requirements of SFAS 133. The Company will
prospectively adopt SFAS No. 138 on January 1, 2001, the required date of
adoption. The adoption of SFAS No. 138 will not have a material impact on the
financial statements of the Company, but will result in the reclassification of
certain deferred gains and losses to accumulated other comprehensive income.
In 2000, the Company adopted Staff Accounting Bulletin ("SAB") 101 released by
the Securities and Exchange Commission, entitled "Revenue Recognition in
Financial Statements". SAB 101 establishes guidelines in applying generally
accepted accounting principles to the recognition of revenue in financial
statements based on specific criteria. The adoption of SAB 101 had no material
effect on the Company's financial position or results of operations.
Other
Funds from operations ("FFO") is defined by the National Association of Real
Estate Investment Trusts ("NAREIT") as consolidated net income of the Company
without giving effect to gains (or losses) from debt restructuring and sales of
property and rental property depreciation and amortization. Management believes
that FFO is an important and widely used measure of the operating performance of
REITs, which provides a relevant basis for comparison among REITs. FFO (i) does
not represent cash flow from operations as defined by generally accepted
accounting principles; (ii) should not be considered as an alternative to net
income as a measure of operating performance or to cash flows from operating,
investing and financing activities; and (iii) is not an alternative to cash
flows as a measure of liquidity. FFO is calculated as follows:
For the Year Ended December 31,
(In thousands) 2000 1999 1998 1997 1996
----------- ------------ ------------ ------------ ------------
Net income $ 48,722 $ 44,962 $ 34,486 $ 24,688 $ 16,100
Less:
Income allocated to
Preferred OP Units 6,094 6,094 4,249 - -
Plus:
Depreciation of rental property 43,289 41,161 38,962 30,867 11,360
Amortization of intangibles - 405 446 407 -
Gain on sales of properties - (2,805) (253) - -
----------- ------------ ------------ ------------ ------------
Funds from operations $ 85,917 $ 77,629 $ 69,392 $ 55,962 $ 27,460
=========== ============ ============ ============ ============
NAREIT has revised its definition of FFO. The Company adopted the new
definition effective January 1, 2000. The new definition of FFO substantially
eliminates the add-back of the non-recurring items in the calculation of FFO.
The application of this new definition decreased FFO in 1998 by $375,000, and
had no effect on any other years reported.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
- -------- ----------------------------------------------------------
The Company's primary market risk exposure is interest rate risk. Management
has and will continue to manage interest rate risk by (1) maintaining a
conservative ratio of fixed-rate, long-term debt to total debt such that
variable rate exposure is kept at an acceptable level and (2) taking advantage
of favorable market conditions for long-term debt and/or equity. As of December
31, 2000, the Company's Credit Facilities represented its only variable rate
debt.
19
The following table sets forth information as of December 31, 2000, concerning
the Company's debt obligations, including principal cash flows by scheduled
maturity, weighted average interest rates and estimated fair value ("FV"):
For the Year Ended December 31,
2001 2002 2003 2004 2005 Thereafter Total FV
Debt obligations
Fixed rate $ 1,320 $ 1,842 $ 121,483 $ 103,338 $ 107,947 $ 120,969 $ 456,899 $ 454,079
Average interest rate 7.9% 7.9% 7.7% 6.8% 8.5% 7.8% 7.6%
Variable rate $ 74,730 $ 74,730 $ 74,730
Average interest rate 7.5%
Total debt $ 76,050 $ 1,842 $ 121,483 $ 103,338 $ 107,947 $ 120,969 $ 531,629 $ 528,809
The Company faces market risk relating to its fixed-rate debt upon re-financing
of such debt and depending upon prevailing interest rates at the time of such
re-finance. As a result of the Company's successful re-financing and extension
of its fixed-rate debt, as illustrated in the above chart, it will not need to
re-finance any of its fixed-rate debt until 2003.
In addition, the Company has assessed the market risk for its variable rate debt
and believes that a 1% increase in LIBOR rates would result in an approximate
$747,000 increase in interest expense based on $74.7 million of variable rate
debt outstanding at December 31, 2000.
The fair value of the Company's long term debt is estimated based on discounted
cash flows at interest rates that management believes reflects the risks
associated with long term debt of similar risk and duration.
20
Item 8. Financial Statements and Supplementary Data
- ------- -------------------------------------------
Report of Independent Accountants
To the Partners of CP Limited Partnership:
In our opinion, the consolidated financial statements listed in the index
appearing under Item 14(a)(1) and (2) present fairly, in all material respects,
the financial position of CP Limited Partnership (the "Company") at December 31,
2000 and 1999, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 2000, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and the financial statement schedule are the responsibility
of the Company's management; our responsibility is to express an opinion on
these financial statements and the financial statement schedule based on our
audits. We conducted our audits of these statements in accordance with auditing
standards generally accepted in the United States of America which require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. 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
February 14, 2001
21
CP LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF INCOME
For the Year Ended December 31,
-------------------------------------------------------------
In thousands, except per OP Unit data
2000 1999 1998
--------------- ------------- -------------
Revenues
Rental income $ 186,963 $ 177,789 $ 167,206
Interest income 10,794 6,796 3,681
Management fee and other income 7,008 4,778 2,243
--------------- ------------- -------------
204,765 189,363 173,130
Expenses
Property operating and maintenance 51,849 50,506 47,094
Real estate taxes 13,426 12,675 12,251
Depreciation and amortization 43,920 41,826 39,658
Administrative 10,448 9,881 8,354
Interest and related amortization 36,400 32,318 31,287
--------------- ------------- -------------
156,043 147,206 138,644
--------------- ------------- -------------
Income before net gain on sales of properties 48,722 42,157 34,486
Net gain on sales of properties - 2,805 -
--------------- ------------- -------------
Net Income 48,722 44,962 34,486
Less distributions to Preferred OP Unitholders 6,094 6,094 4,249
--------------- ------------- -------------
Net income attributable to common OP Unitholders $ 42,628 $ 38,868 $ 30,237
=============== ============= =============
Net income attributable to common OP Unitholders
General Partner 37,786 34,626 26,801
Limited Partners 4,842 4,242 3,436
--------------- ------------- -------------
$ 42,628 $ 38,868 $ 30,237
=============== ============= =============
Per common OP Unit information:
Basic earnings per OP Unit $ 1.33 $ 1.23 $ 0.98
=============== ============= =============
Diluted earnings per OP Unit $ 1.32 $ 1.23 $ 0.97
=============== ============= =============
The accompanying notes are an integral part of the financial statements.
22
CP LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
(In thousands) December 31,
-----------------------------------------------------
Assets 2000 1999
-------------------- ---------------------
Rental property:
Land $ 139,417 $ 135,811
Land and improvements for expansion sites 26,145 23,320
Manufactured home community improvements 836,228 816,278
Community buildings 56,403 55,978
Furniture and other equipment 33,258 24,063
-------------------- ---------------------
Total rental property 1,091,451 1,055,450
Less accumulated depreciation 235,653 192,015
-------------------- ---------------------
Net rental property 855,798 863,435
Cash and cash equivalents 99 348
Rents and other receivables, net 7,107 3,257
Notes receivable 24,539 8,485
Investments in and advances to affiliates 119,727 97,761
Prepaid expenses and other assets 10,594 8,387
-------------------- ---------------------
Total assets $ 1,017,864 $ 981,673
==================== =====================
Liabilities
Debt $ 535,470 $ 452,556
Accrued interest payable 6,953 5,284
Accounts payable and accrued expenses 14,085 17,688
Rents received in advance and security deposits 7,816 7,044
Distributions payable 765 16,139
-------------------- ---------------------
Total liabilities 565,089 498,711
Commitments and contingencies (Notes 11 & 12) - -
Partners' Capital, Unlimited Authorized Units:
32,124,469 and 32,130,598, common OP Units outstanding
at December 31, 2000 and 1999, respectively; 1,500,000,
Preferred OP Units outstanding at December 31, 2000 and 1999
General Partner 335,912 361,820
Limited Partners 43,906 48,185
Preferred OP Units, Series A 72,957 72,957
-------------------- ---------------------
Total partners' capital 452,775 482,962
-------------------- ---------------------
Total liabilities and partners' capital $ 1,017,864 $ 981,673
==================== =====================
The accompanying notes are an integral part of the financial statements.
23
CP LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
Dollars in thousands, except per OP Unit data
For the Year Ended December 31,
2000 1999
--------------------------------------- -----------------------------------------
Common Preferred Common Preferred
General Limited Limited General Limited Limited
Partners' Capital
Balance at
beginning
of period $ 361,820 $ 48,185 $ 72,957 $ 367,935 $ 47,473 $73,002
Net income 37,786 4,842 - 34,626 4,242 -
Issuance of
units at fair
market value 8,611 754 3,394 13,326 -
Transfer (from)
to limited
partners to
(from) general
partners
resulting from
issuance of
OP Units 2,387 (2,387) 10,187 (10,187) -
OP Units
reacquired
and retired (11,323) - - (61) - -
Distributions
declared
$2.06 in
2000,
$1.94 in
1999 and
$1.82 in
1998 (58,744) (7,488) (54,636) (6,669) -
Other (4,625) 375 - (45)
------------- ----------- ----------- ------------- ----------- ------------
Balance at
end of
the period $ 335,912 $43,906 $ 72,957 $ 361,820 $ 48,185 $ 72,957
============= =========== =========== ============= =========== ============
For the Year Ended December 31,
1998
-----------------------------------------------
Common Preferred
General Limited Limited
Partners' Capital
Balance at
beginning
of period $ 322,966 $ 35,272 $ -
Net income 28,801 3,436 -
Issuance of
units at fair
market value 62,797 29,150 73,002
Transfer (from)
to limited
partners to
(from) general
partners
resulting from
issuance of
OP Units 14,090 (14,090) -
OP Units
reacquired
and retired (930) - -
Distributions
declared
$2.06 in
2000,
$1.94 in
1999 and
$1.82 in
1998 (50,264) (6,295) -
Other (7,525) - -
-------------- ----------- -----------
Balance at
end of
the period $ 367,935 $ 47,473 $73,002
============== =========== ===========
The accompanying notes are an integral part of the financial statements.
24
CP LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Year Ended December 31,
-----------------------------------------------------
In thousands 2000 1999 1998
------------ ------------- --------------
Cash flows from operating activities:
Net income $ 42,628 $ 38,868 $ 30,237
Adjustments to reconcile net income to net cash provided
by operating activities:
Net gain on sale of properties - (2,805) -
Depreciation and amortization 43,920 41,826 39,658
Amortization of debt issuance costs 605 730 764
Increase in operating assets (1,299) (3,243) (690)
Increase (decrease) in operating liabilities (893) 2,088 2,591
------------ ------------- --------------
Net cash provided by operating activities 84,961 77,464 72,560
------------ ------------- --------------
Cash flows from investing activities:
Acquisitions of rental properties and land to be developed (5,725) (13,259) (116,605)
Dispositions of rental properties - 13,108 3,329
Additions to rental properties and equipment (29,378) (24,606) (14,958)
Investments in and advances to affiliates (21,966) (27,682) (38,855)
Advances on notes receivables, net (16,054) (4,338) -
------------ ------------- --------------
Net cash used in investing activities (73,123) (56,777) (167,089)
------------ ------------- --------------
Cash flows from financing activities:
Borrowings on lines of credit 305,599 119,130 120,935
Payments on lines of credit (328,186) (58,549) (109,200)
Principal payments on debt (1,572) (1,176) (1,828)
Proceeds from the issuance of debt 295,295 - -
Payoff of debt (190,838) (23,598) (3,315)
Payment of debt issuance costs (617) - (237)
Distributions to OP Unitholders (81,534) (60,244) (53,629)
OP Units repurchased and retired (11,323) (76) (932)
Net proceeds from the issuance of common OP Units - - 53,678
Net proceeds from the issuance of Preferred OP Units - - 73,002
Exercise of Chateau's common stock options and other 1,089 3,724 1,595
------------ ------------- --------------
Net cash provided by (used in) financing activities (12,087) (20,789) 80,069
------------ ------------- --------------
Decrease in cash and cash equivalents (249) (102) (14,460)
Cash and cash equivalents, beginning of period 348 450 14,910
------------ ------------- --------------
Cash and cash equivalents, end of period $ 99 $ 348 $ 450
============ ============= ==============
Supplemental information:
Cash paid for interest, net of amounts capitalized $ 34,126 $ 30,626 $ 30,110
============ ============= ==============
Fair market value of OP Units issued for
acquisitions/development $ 754 $ 13,341 $ 29,150
============ ============= ==============
Debt assumed in connection with acquisitions and development $ 1,835 $ 650 $ 34,171
============ ============= ==============
The accompanying notes are an integral part of the financial statements.
25
CP LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
______
1. Organization and Formation of Company:
-------------------------------------
CP Limited Partnership (the "Company") is a limited partnership and was formed
by Chateau Communities, Inc. ("Chateau"), a real estate investment trust, as
general partner and Chateau Estates, as the initial limited partner, on
September 16, 1993. In 1997, the Company merged with ROC Communities, Inc.
("ROC").
The Company considers itself to be engaged in only one industry segment. The
Company is engaged in the business of owning and operating manufactured housing
community properties. As of December 31, 2000, the Company owned 166 properties
containing an aggregate of 52,347 homesites and 1,359 park model/RV sites,
located in 28 states. Approximately 31 percent of these homesites were in
Michigan and 25 percent were in Florida. The Company also fee managed 44
properties containing an aggregate of 9,200 homesites. A manufactured housing
community is real estate designed and improved with sites for placement of
manufactured homes. The owner of the home leases the site from the Company,
generally for a term of one year of less.
2. Summary of Significant Accounting Policies:
------------------------------------------
Basis of Presentation
The accompanying consolidated financial statements of the Company include all
accounts of the Company and its subsidiaries. Chateau and ROC are general
partners. As of December 21, 2000, Chateau owned on a combined basis, an 89
percent general partner interest. Pursuant to the terms of the operating
partnership agreement, the Company is required to reimburse Chateau for the net
expenses incurred by Chateau. Amounts paid on behalf of Chateau by the Company
are reflected in the statement of income as general and administrative expenses.
The balance sheet of Chateau as of December 31, 2000 is identical to the
accompany balance sheet of the Company, except as follows:
(in thousands)
As Presented Herein Chateau Communities Inc.
December 31, 2000 Adjustments December 31, 2000
------------------- --------------- --------------------
Minority interests in CP Limited Partnership $ - $ 116,863 $ 116,863
=================== =============== ====================
Equity :
General partner $ 335,912 (335,912)
Limited partners 116,863 (116,863)
Common stock 285 285
Additional paid-in capital 445,905 445,905
Dividends in excess of accumulated earnings (97,605) (97,605)
Notes receivable, officers (12,673) (12,673)
------------------- --------------- --------------------
Partners' capital/shareholders' equity $ 452,775 $ (116,863) $ $ 335,912
=================== =============== ====================
All significant inter-entity balances and transactions have been eliminated in
consolidation.
The Company conducts manufactured home sales and brokerage activities through
its taxable subsidiary Community Sales, Inc. ("CSI"). The Company owns 100% of
the preferred stock of CSI and is entitled to 100% of its cash flow.
26
CP LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
______
The Company accounts for its investment in CSI utilizing the equity method of
accounting, since the Company does not own any of the voting common stock of
this entity.
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 are renewable upon the consent of both parties or, in
some instances, as provided by statute. Rent received in advance is deferred
and recognized in income when earned.
Income Taxes
The Company is not liable for Federal income taxes as the partners recognize
their proportionate share of income or loss in their tax returns. Therefore, no
provision for income taxes is included in the Company's financial statements.
Rental Property
Rental property is carried at cost less accumulated depreciation. Management
evaluates the recoverability of its investment in rental property whenever
events or changes in circumstances indicate that full asset recoverability is
questionable. Management's assessment of the recoverability of its rental
property includes, but is not limited to, recent operating results, expected net
operating cash flow and management's plans for future operations. If a rental
property is determined to be significantly impaired, the asset is written down
to its estimated fair value. For the years ended December 31, 2000 and 1999
there were no impairment conditions at any of the Company's properties.
Depreciation
Depreciation on manufactured home communities is computed primarily on the
straight-line method over the estimated useful lives of the assets. The
estimated useful lives of the various classes of rental property assets are
primarily as follows:
Estimated Useful
Class of Asset Lives (Years)
- -------------- -----------------
Manufactured home community improvements 20 to 30
Community buildings 25 to 30
Furniture and other equipment 3 to 10
Maintenance, repairs, and minor improvements to rental properties are expensed
when incurred. Major improvements and renewals are capitalized. When rental
property assets are sold or otherwise retired, the cost of such assets, net of
accumulated depreciation, compared to the sales proceeds, are recognized in
income as gains or losses on disposition.
Capitalized Interest
Interest is capitalized on development projects during periods of construction
through the substantial completion of the site. Interest capitalized by the
Company for the years ended December 31, 2000, 1999, 1998, was $1,646,000,
$1,249,000, and $579,000 respectively.
Cash Equivalents
All highly liquid investments with an initial maturity of three months or less
are considered to be cash equivalents.
27
CP LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
______
Debt Issuance Costs
Costs incurred to obtain financing and costs of interest rate protection are
deferred and amortized on a straight-line basis, which approximates the
effective interest method, over the term of the related loans or agreements.
These costs, net of accumulated amortization, are included in prepaid expenses
and other assets in the accompanying consolidated balance sheets.
Fair Value of Financial Instruments
The fair value of the Company's financial instruments other than debt
approximate their carrying values at December 31, 2000 and 1999. The fair value
of the Company's debt at December 31, 2000 and 1999 was estimated to be $533
million and $447 million, respectively, based on current interest rates for
comparable loans.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles involves the use of certain management estimates and
assumptions that affect the reported amount 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.
Reclassifications
Certain reclassifications have been made to the prior year information to
conform to the current year presentation. These reclassifications have no
impact on net operating results previously reported.
Recently Issued Accounting Standards
In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities", which
establishes accounting and reporting standards for derivative instruments and
for hedging activities. This new standard requires that all companies record
derivatives on the balance sheet as assets or liabilities, measured at fair
value. Gains or losses resulting from changes in the values of those
derivatives would be accounted for depending on the use of the derivative and
whether it qualifies for hedge accounting. In June 1999, FASB issued SFAS No.
137, "Accounting for Derivative Instruments and Hedging Activities-Deferral of
the Effective Date of SFAS No. 133-an amendment of SFAS No. 133." SFAS No. 137
defers the effective date of SFAS No. 133 to fiscal years beginning after June
15, 2000.
In June 2000, the FASB issued SFAS No. 138,"Accounting for Certain Derivative
Instruments and Certain Hedging Activities-an amendment of FASB Statement No.
133". This statement amends certain requirements of SFAS 133. The Company will
prospectively adopt SFAS No. 138 on January 1, 2001, the required date of
adoption. The adoption of SFAS No. 138 will not have a material impact on the
financial statements of the Company, but will result in the reclassification of
certain deferred gains and losses to accumulated other comprehensive income.
In 2000, the Company adopted Staff Accounting Bulletin ("SAB") 101 released by
the Securities and Exchange Commission, entitled "Revenue Recognition in
Financial Statements." SAB 101 establishes guidelines in applying generally
accepted accounting principles to the recognition of revenue in financial
statements based on specific criteria. The adoption of SAB 101 had no material
effect on the Company's financial position or results of operations.
28
CP LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
______
3. Capital Transactions:
-----------------------
On February 29, 2000, Chateau announced the establishment of a share repurchase
program pursuant to which it may repurchase up to 1,000,000 shares of common
stock from time to time. As of December 31, 2000, Chateau repurchased 453,900
shares for approximately $11.3 million.
The following table represents the changes in the Company's outstanding common
OP Units for the years ended December 31, 2000, 1999, and 1998.
2000 1999 1998
--------------- ---------------- ----------------
Common OP Units outstanding at January 1 32,130,598 31,459,888 28,250,803
Units repurchased and retired (453,900) (2,765) (43,333)
Units issued in connection with acquistions 28,424 531,059 2,845,729
Units issued through stock awards, sales to key employees
and the exercise of Chateau stock options 419,347 142,416 406,688
--------------- ---------------- ----------------
Common OP Units outstanding at December 31 32,124,469 32,130,598 31,459,888
=============== ================ ================
The Company paid a distribution of $.515 per OP Unit on April 14, 2000; July 14,
2000; October 16, 2000 and December 29, 2000 to common OP Unitholders of record
as of March 31; 2000; June 30, 2000; September 30, 2000 and December 15, 2000,
respectively.
The Company paid a distribution of $.485 per OP Unit on April 14, 1999; July 15,
1999; October 15, 1999 and January 18, 2000 to common OP Unitholders of record
as of March 31, 1999; June 30, 1999; September 30, 1999 and December 27, 1999,
respectively. The distribution paid on January 18, 2000 was included in
distributions payable in the accompanying consolidated balance sheet as of
December 31, 1999.
In February 1998, the Company received a net cash contribution from Chateau of
approximately $53.7 million from the issuance of 1,850,000 shares of Chateau's
common stock. The contribution from the proceeds were used to finance
acquisitions made in March 1998 and to reduce outstanding balances under the
Company's line of credit, which was used to finance acquisitions made in January
1998.
Included in partners' capital is approximately $73 million, which represents 1.5
million 8.125% Series A Cumulative Redeemable Preferred Units ("Preferred
Units"). The Preferred Units are exchangeable on or after April 20, 2008 for
authorized but unissued shares of 8.125% Series A Cumulative Redeemable
Preferred Stock of Chateau.
29
CP LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
______
Basic and diluted earnings per common OP Unit are summarized in the table below:
For the Year Ended December 31,
-------------------------------------------------
(In thousands, except per OP Unit data) 2000 1999 1998
-------------- ------------- ------------
Basic earnings per OP Unit
Net income attributable to common OP Unit Holders $ 42,628 $ 38,868 $ 30,237
============== ============= ============
Weighted average OP Units - Basic 32,130 31,582 30,779
============== ============= ============
Per OP Unit $ 1.33 $ 1.23 $ 0.98
============== ============= ============
Diluted earnings per OP Unit
Net income attributable to common OP Unit Holders $ 42,628 $ 38,868 $ 30,237
============== ============= ============
Weighted average common OP Units outstanding 32,130 31,582 30,779
Chateau employee stock options 94 132 275
-------------- ------------- ------------
Weighted average OP Units - Diluted 32,224 31,714 31,054
============== ============= ============
Per OP Unit $ 1.32 $ 1.23 $ 0.97
============== ============= ============
4. Acquisitions and Dispositions of Rental Property:
------------------------------------------------
The following table summarizes acquisitions made by the Company as follows:
(Dollars in thousands)
Amount
Allocated to Fair Market
Acquisition Number of Number of Assets Value of OP Debt Assumed Cash (1)
Date Communities Sites State Acquired Units Issued
- ---------------------------------------------------------------------------------------------------------------------------------
December 2000 1 295 GA $ 2,550 $ 17 1,835 $ 698
February 2000 1 115 AL $ 1,600 $ - - $ 1,600
October 1999 1 315 AL $ 8,712 $ - 650 $ 8,062
April 1999 1 309 AL $ 4,013 $ - - $ 4,013
April 1998 10 2,587 MI $78,100 $ - 12,401 $ 65,699
2 607 NC
March 1998 5 839 IN $37,600 $ - - $ 37,600
1 662 MI
January 1998 2 961 SC $15,900 $ 9,620 - $ 6,280
January 1998 10 1,093 (2) FL $38,700 $ 18,307 19,335 (3) $ 1,058
4 276 CT
(1) The cash used to finance the Company's acquisitions was provided by
borrowings on the line of credit, a capital contribution by Chateau (see
Note 3) and the issuance of $75 million of Preferred Units in 1998.
(2) Does not include park/model RV sites.
(3) Includes $12 million for a capital lease obligation, which was converted to
OP Units in 1999.
30
CP LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
______
The following unaudited pro forma income statement information has been prepared
as if the significant acquisitions made in 1998 had occurred on January 1, 1998.
No pro forma adjustments were made for the 2000 and 1999 acquisitions, as the
effects on reported results were not material. The pro forma income statement
information is not necessarily indicative of the results, which actually would
have occurred if these acquisitions had been consummated on January 1, 1998.
(In thousands, except per OP Unit data)
1998
-------------------
Revenues $ 176,154
===================
Total expenses $ 141,125
===================
Net income $ 29,872
===================
Per OP Unit $ 0.93
===================
In 2000, the Company also acquired land to be used for future development for a
total of $3,427,000. During the year 1999, the Company disposed of two
properties in Florida, with a total of 509 sites for a combined price of
$11,700,000. These dispositions resulted in a net gain of $2,805,000.
5. Notes Receivable
----------------
Included in notes receivable is $20.4 million of notes receivable from entities
that are not affiliated with the Company. These entities all own, or are
developing, manufactured home communities. These notes are collateralized by
manufactured home communities or by partnership interest in partnerships that
own manufactured home communities. These notes have a weighted average interest
rate of 12.2% and mature between 2002 and 2009. Management has evaluated the
collectibility of these receivables and has determined that no valuation
allowance is necessary.
6. Investments in and Advances to Affiliates
-----------------------------------------
Investments in and advances to affiliates as of December 31, consisted of the
following:
2000 1999
----------------- -----------------
Community Sales, Inc. ("CSI") $ 25,242 $ 22,538
Development joint ventures 56,019 50,567
N'Tandem Trust ("N'Tandem") 38,466 24,656
----------------- -----------------
$ 119,727 $ 97,761
================= =================
CSI
- ----
Advances to CSI are primarily used to finance inventory purchases. These
advances have an interest rate of prime plus 1% (10.5 percent as of December 31,
2000). The Company accounts for its investment in CSI using the equity method
of accounting
Development joint ventures
- ---------------------------
The Company is currently involved in seven joint ventures to construct ground-up
"greenfield communities". In the majority of the arrangements, the Company acts
as the developer or co-developer, performing all accounting and property
management functions, and the Company acts as a lender to finance the
development costs. As such, the Company advances amounts to the joint ventures
to fund construction and recognizes the related interest income as
31
CP LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
______
earned. The Company primarily borrows on its line of credit to fund the
advances and, accordingly, includes the related borrowing costs in interest
expense and related debt in its balance sheet. In the majority of the
arrangements, the Company has the option to purchase the completed community
when it reaches a pre-determined occupancy rate. The Company is also involved
in two joint ventures in which its joint venture partner is constructing the
communities. The Company has similar arrangements to lend these joint ventures
funds to finance development. The Company accounts for its joint ventures which
it does not control utilizing the equity method of accounting.
N'Tandem
- --------
In March 1998, the Company entered into an investment agreement ("Agreement")
with N'Tandem. Pursuant to the Agreement, the Company purchased 19,139 common
equity shares of N'Tandem. The Company owns approximately 10 percent of
N'Tandem's outstanding stock and accounts for its investment utilizing the
equity method of accounting. The Company also recognizes income from a property
management agreement, an advisory agreement and interest income on advances as
earned.
During 2000, 1999, and 1998, N'Tandem borrowed $13.8 million, $23.6 million and
$10.7 million from the Company in order to fund acquisitions. In 1999 N'Tandem
obtained a line of credit that was used to repay some of the borrowings in 1999
and 2000. These notes were due December 31, 2000. During 2000, the Company
extended the maturity to December 2001. As of December 31, 2000, all amounts
owed the Company were unsecured borrowings bearing interest at the prime rate of
interest plus one percent per annum.
As of December 31, 2000 N'Tandem owned 36 communities with 7,835 homesites.
7. Financing:
------------
The following table sets forth certain information regarding debt at December
31:
Weighted Principal Balance
Average (In thousands)
Interest Rate Maturity Date 2000 1999
--------------- ---------------- ------------- --------------
Fixed rate mortgage notes 7.82% 2002-2010 $ 136,899 $ 105,802
Unsecured Senior Notes 7.50% 2003-2005 320,000 245,000
Unsecured lines of credit 7.46% 2001 74,730 97,317
Other notes payable 3,841 4,437
------------- --------------
$ 535,470 $ 452,556
============= ==============
At December 31, 2000, the Company had a $100 million line of credit arrangement
with BankOne, NA acting as lead agent for a bank group to provide financing for
future construction, acquisitions and general business obligations. The line of
credit is unsecured, bears interest at the prime rate of interest or, at the
Company's option, LIBOR plus 80 basis points (7.32 percent at December 31,
2000). The line was scheduled to mature in 2001. In February 2001, the Company
renegotiated this facility and increased it from $100 million to $125 million.
The term of the new facility is three years and bears interest at LIBOR plus 90
basis points. In addition, the Company has a $7.5 million unsecured line of
credit from US Bank, which bears interest at a rate of LIBOR plus 125 basis
points (7.77 percent at December 31, 2000). As of December 31, 2000,
approximately $74.7 million was outstanding under the Company's lines of credit
and the Company had available $32.8 million in additional borrowing capacity.
32
CP LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
______
During 2000, the Company had approximately $86.2 million of mortgage debt and
$75 million of unsecured Senior Notes mature. The Company repaid this debt
using the proceeds from the issuance of new debt in 2000.
In June 2000, the Company issued $116 million of 7.8% fixed rate mortgage debt,
maturing in 2010, and collateralized by seven properties. Also in 2000, the
Company issued a total of $150 million of Unsecured Senior Notes, $100 million
at 8.3% maturing March 1, 2005 and $50 million at 8% maturing August 1, 2003,
resulting in net proceeds of $149 million. During 2000, the Company issued and
repaid a $30 million unsecured short-term loan.
The Company has $100 million 6.92% MandatOry Par Put Remarketed Securitiessm
("MOPPRSsm") due December 10, 2014. The remarketing dealer paid the Company $2
million for the right to remarket the securities in 2004. The remarketing fee
is being amortized over the life of the related debt. Upon the remarketing
dealer's election to remarket the MOPPRSsm, the interest rate to the December
10, 2014 maturity date of the MOPPRSsm will be adjusted to equal the sum of
5.75% plus the Applicable Spread (as defined in the remarketing agreement). In
the event the remarketing dealer does not elect to remarket the MOPPRSsm, the
MOPPRSsm will mature in 2004.
As of December 31, 2000 the Company has a total of 15 collateralized properties.
The financing arrangements contain customary covenants, including a debt service
coverage ratio and a restriction on the incurrence of additional collateralized
indebtedness without a corresponding increase in rental property.
The aggregate amount of principal maturities for the fixed rate debt subsequent
to December 31, 2000 (in thousands) is as follows:
2001 $ 1,320
2002 1,842
2003 121,483
2004 103,338
2005 107,947
Thereafter 120,969
-------------------
$ 456,899
===================
8. Stock Option Plans:
---------------------
Chateau measures compensation cost using the intrinsic value method, in
accordance with Accounting Principles Board Opinion No. 25 ("APB 25"),
"Accounting for Stock Issued to Employees."
Chateau's 1999 and 1997 Equity Compensation Plans and 1993 Long Term Incentive
Stock Plan (collectively, the "Plans") provide for up to 3.1 million shares of
common stock that may be granted to directors, executive officers and other key
employees. The Plans provide for the grant of options, restricted stock awards
and stock appreciation rights. The compensation committee of the Board of
Directors of Chateau determines the vesting schedule of each option and the
term, which term shall not exceed ten years from the date of grant.
33
CP LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
______
Information concerning Chateau's stock options is as follows:
2000 1999
--------------------------------- ---------------------------------
Weighted- Weighted-
Average Average
Shares subject to option: Shares Price Shares Price
- ---------------------------------------- -------------- ------------- -------------- -------------
Outstanding at beginning of year 1,417,218 $ 25.66 1,236,893 24.79
Granted (1) 547,000 24.19 384,160 27.73
Exercised (364,486) 21.79 (137,480) 21.30
Forfeited (59,398) 27.46 (66,355) 28.97
-------------- ------------- -------------- -------------
Outstanding at end of year (2) 1,540,334 $ 26.01 1,417,218 $ 25.66
============== ============= ============== =============
Options exercisable at year-end 634,442 803,696
============== ==============
Options available for grant
at year-end 458,268 945,870
============== ==============
1998
------------------------------
Weighted-
Average
Shares subject to option: Shares Price
- ---------------------------------------- ------------ ------------
Outstanding at beginning of year 1,197,406 $ 21.66
Granted (1) 447,500 30.12
Exercised (406,838) 19.30
Forfeited (1,175) 19.10
------------ ------------
Outstanding at end of year (2) 1,236,893 $ 24.79
============ ============
Options exercisable at year-end 823,257
============
Options available for grant
at year-end 363,675
============
(1) The options granted do not include the grant of 50,000 shares of restricted
stock in 2000 to executive officers of Chateau.
(2) For the year-ended December 31, 2000, 721,000 options are considered anti-
dilutive.
For all options granted during 2000, 1999, and 1998, the weighted average market
price of Chateau's common stock on the grant date was approximately equal to the
weighted average exercise price. The following table summarizes information
concerning outstanding and exercisable options of Chateau at December 31, 2000.
Options Outstanding Options Exercisable
---------------------------------------------------------------------------
Number Weighted- Weighted-
Range of Exercise Number Remaining Average Number Average
Prices Outstanding Contract Life Exercise Price Exercisable Exercise Price
- ------------------- ---------------- -------------------- --------------- ----------- --------------
$18.26 - $26.00 822,334 7.6 years $23.36 345,442 $22.18
$27.44 - $30.13 718,000 7.6 years $29.04 289,000 $29.43
The fair value of each option was estimated as of date of grant using an option-
pricing model with the following assumptions used:
2000 1999 1998
--------- --------- ---------
Estimated fair value per option granted $ 2.44 $ 2.22 $ 3.56
Assumptions:
Annualized dividend yield 7.70% 6.90% 6.25%
Common stock price volatility 20.5% 17.3% 22.6%
Risk-free rate of return 6.38% 5.29% 5.63%
Expected option term (in years) 9 10 10
34
CP LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
______
If compensation cost for stock option grants had been recognized based on the
fair value at the grant dates for 2000, 1999 and 1998 consistent with the method
allowed by SFAS No. 123 "Accounting for Stock-Based Compensation", net income
and net income per OP Unit would have been:
2000 1999 1998
----------------- ------------------ -----------------
Net income attributable to Common OP Unitholders, as reported $ 42,628,000 $ 38,868,000 $ 30,237,000
================= ================== =================
Net income attributable to Common OP Unitholders, pro forma $ 41,598,000 $ 38,555,000 $ 29,885,000
================= ================== =================
Basic earnings per OP Unit, as reported $ 1.33 $ 1.23 $ 0.98
================= ================== =================
Basic earnings per OP Unit, pro forma $ 1.29 $ 1.22 $ 0.97
================= ================== =================
Diluted earnings per OP Unit, as reported $ 1.32 $ 1.23 $ 0.97
================= ================== =================
Diluted earnings per OP Unit, pro forma $ 1.29 $ 1.22 $ 0.96
================= ================== =================
9. Savings Plan:
---------------
The Company has a qualified retirement plan designed to qualify under Section
401 of the Internal Revenue Code (the "Savings Plan"). The Savings Plan allows
employees of the Company and its subsidiaries to defer a portion of their
compensation on a pre-tax basis subject to certain maximum amounts.
Contributions by the Company are discretionary and determined by the Company's
management. Company contributions are allocated to each participant based on
the relative compensation of the participant to the compensation of all
participants. The Company contributed approximately $500,000, $560,000, and
$550,000 for the Plan years ended December 31, 2000, 1999 and 1998,
respectively.
10. Related Party Transactions:
-----------------------------
Rental expense of approximately $130,000 annually has been incurred for leased
space in an office building owned by certain officers and equity owners. The
office lease expires November 2001.
The Company, through CSI, purchases manufactured home inventory for resale from
Clayton Homes, Inc. ("Clayton Homes"), which is affiliated with one of Chateau's
directors. During 1998 and 1999, CSI purchased 22 homes and one home
respectively for a cost of approximately $540,000 and $32,000 from Clayton
Homes.
In addition, when CSI sells homes, the purchaser may obtain financing from
Vanderbilt Mortgage and Finance, Inc. ("Vanderbilt"), which is also affiliated
with the same director. In certain cases, for homes sold before June 1998,
Vanderbilt has recourse to the Company if the loans are not repaid. As of
December 31, 2000 there is a total of approximately $13.2 million of such
amounts that are recourse to the Company.
Included in management and other income is $4,549,000, $1,610,000 and $582,000
of management and other fee income received from N'Tandem for the years ended
December 31, 2000, 1999, and 1998 respectively. Included in this amount is
approximately $3.2 million of acquisition and transaction fees and $1.3 million
of management and advisory fees.
In December 2000, the Company purchased a manufactured home community from a
partnership owned by two officers of the Company for $2,550,000. This community
contains 295 developed homesites (See Note 4.)
35
CP LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
______
11. Contingencies:
----------------
Several claims and legal actions arising from the normal course of business have
been asserted against the Company, and are pending final resolution. In the
opinion of management, none of these matters will have a material adverse effect
upon the results of operations, financial condition or cash flows of the
Company.
The Company, through its joint venture and affiliate arrangements, has
guaranteed approximately $47.8 million of debt, $20 million of which is to
N'Tandem.
12. Quarterly Financial Information (Unaudited):
----------------------------------------------
The following is quarterly financial information for the years ended December
31, 2000 and 1999
(amounts in thousands, except per OP Unit data)
First Second Third Fourth
Quarter Quarter Quarter Quarter
2000 March 31, June 30, September 30, December 31,
---------------- --------------- --------------- -----------------
Total revenues $ 48,849 $ 50,774 $ 51,270 $ 53,872
---------------- --------------- --------------- -----------------
Operating income (a) $ 30,593 $ 31,976 $ 32,235 $ 34,238
---------------- --------------- --------------- -----------------
Net Income $ 11,307 $ 12,607 $ 11,759 $ 13,049
Distributions to Preferred OP Unitholders 1,523 1,524 1,523 1,524
---------------- --------------- --------------- -----------------
Net income attributable to common OP Unitholders $ 9,784 $ 11,083 $ 10,236 $ 11,525
================ =============== =============== =================
Net income per OP Unit - basic (b) $ 0.30 $ 0.35 $ 0.32 $ 0.36
================ =============== =============== =================
Net income per OP Unit - diluted (b) $ 0.30 $ 0.34 $ 0.32 $ 0.36
================ =============== =============== =================
1999
Total revenues $ 45,608 $ 46,837 $ 48,106 $ 48,812
---------------- --------------- --------------- -----------------
Operating income (a) $ 28,238 $ 28,953 $ 28,910 $ 30,200
---------------- --------------- --------------- -----------------
Net Income $ 9,617 $ 13,641 $ 10,909 $ 10,795
Distributions toPreferred OP Unitholders 1,523 1,524 1,523 1,524
---------------- --------------- --------------- -----------------
Net income attributable to OP Unitholders $ 8,094 $ 12,117 $ 9,386 $ 9,271
================ =============== =============== =================
Net income per OP Unit - basic (b) $ 0.26 $ 0.38 $ 0.30 $ 0.29
================ =============== =============== =================
Net income per OP Unit - diluted (b) $ 0.26 $ 0.38 $ 0.30 $ 0.29
================ =============== =============== =================
(a) Operating income represents total revenues less property operating and
maintenance expense, real estate taxes and administrative expense.
Operating income is a measure of the performance of the properties before
the effects of depreciation and interest and related amortization costs.
(b) Quarterly earnings per OP Unit amounts may not total to the annual amounts
due to rounding and to the change in the number of OP Units outstanding.
36
Item 9. Changes in and Disagreements with Accountants on Accounting and
- ------ ---------------------------------------------------------------
Financial Disclosures
---------------------
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
- -------- --------------------------------------------------
Not Applicable.
Item 11. Executive Compensation
- -------- ----------------------
Not Applicable.
Item 12. Security Ownership of Certain Beneficial Owners and Management
- -------- --------------------------------------------------------------
Not Applicable.
Item 13. Certain Relationships and Related Transactions
- -------- ----------------------------------------------
Not Applicable.
37
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
- -------- ----------------------------------------------------------------
a. 1. Financial Statements
Report of Independent Accountants
Consolidated Statements of Income for the years ended December 31,
2000, 1999, and 1998.
Consolidated Balance Sheets as of December 31, 2000 and 1999.
Consolidated Statements of Partners' Capital for the years ended
December 31, 2000, 1999, and 1998
Consolidated Statements of Cash Flows for the years ended December
31, 2000, 1999, and 1998.
Notes to Consolidated Financial Statements
2. Financial Statement Schedule
III - Real Estate and Accumulated Depreciation
3. Exhibits
Exhibit (Referenced to Item 601 of Regulation S-K)
Number
4.1 (a) Form of Stock Certificate
4.2 (i) (d) Indenture dated as of December 19, 1997 between CP
Limited Partnership and The First National Bank of Chicago,
as supplemented.
4.2 (ii) (d) First Supplemental Indenture dated as of December 19,
1997 between CP Limited Partnership and The First National
Bank of Chicago, related to the $100,000,000 MadatOry Par Put
Remarked SecuritiesSM ("MOPPRSSM") due December 10, 2014.
4.2 (iii) (d) Remarking Agreement dated as of December 23,1997 among CP
Limited Partnership, CP Limited Partnership and the
"Remarketing Dealer" named therein.
4.3* (i) $100,000,000 8.5% Indenture, dated February 25, 2000, of
CP Limited Partnership.
4.4* (e) Note Purchase Agreement dated as of November 4, 1996,
between Pacific Mutual and ROC Communities, Inc. for
$70,000,000 in Senior Notes due November 4, 2003
10.1 (f) Amended and Restated Agreement of Limited Partnership of
CP Limited Partnership dated January 22, 1997
10.2 (l) Lease of 19500 Hall Road
10.3 (a) Form of Noncompetition Agreement (Boll and Allen)
10.4(i) (c) Employment Agreement (McDaniel)
10.4(ii) (c) Employment Agreement (Kellogg)
10.4(iii) (c) Employment Agreement (Fischer)
10.4(iv) (c) Employment Agreement (Davis)
10.5 (f) 1997 Equity Compensation Plan
10.6 (k) Long-Term Incentive Stock Plan
10.7 (g) Amendment to Amended and restated Agreement of Limited
Partnership of CP Limited Partnership dated April 20, 1998
10.8 (h) Articles supplementary dated April 20, 1998
10.9 (j) 1999 Equity Compensation Plan
38
21 (b) List of Subsidiaries of CP Limited Partnership
23 Consent of PricewaterhouseCoopers LLP
* Other instruments defining long-term debt not exceeding 10 percent of
total assets have been omitted in reliance on Item 601 (b) (4)
(iii)(A) of Regulation S-K but will be filed upon request of the
Commission.
(a) Incorporated by reference to the Exhibits filed with the Company's
Registration Statement on Form S-11 filed with the Commission on
November 10, 1993 (Commission File No. 33-69150).
(b) Incorporated by reference to the Exhibits filed with the Chateau's
Annual Report on Form 10-K filed for the year ended December 31, 1995
with the Commission on March 29, 1996.
(c) Incorporated by reference to the Chateau's Quarterly Report on Form
10-Q filed with the Commission on May 14, 1997.
(d) Incorporated by reference to the Chateau's Form 8-K filed with the
Commission on December 9, 1997.
(e) Incorporated by reference to the Chateau's Form S-4 filed with the
Commission on September 24, 1996.
(f) Incorporated by reference to the Chateau's Annual Report on Form 10-K
filed for the year ended December 31, 1997.
(g) Incorporated by reference to the Company's Form 8-K filed with the
Commission on May 1, 1998.
(h) Incorporated by reference to the Chateau's Form 8-K filed with the
Commission on May 1, 1998.
(i) Incorporated by reference to the Exhibits filed with the Company's
Form 8-K dated February 25 2000 and filed with the Commission on
February 25, 2000.
(j) Incorporated by reference to the Chateau's Proxy Statement for the
Annual Meeting held on May 20, 1999 as filed with the Commission on
April 7, 1999.
(k) Incorporated by reference to the Chateau's Annual Report on Form 10-K
filed for the year ended December 31, 1999.
(l) Incorporated by reference to the Chateau's Annual Report on Form 10-K
filed for the year ended December 31, 2000.
b. Reports on Form 8-K
-------------------
No reports on Form 8-K were filed in the fourth quarter of the year
ended December 31, 2000.
39
Exhibits
Index
Exhibit (Referenced to Item 601 of Regulation S-K)
Number
4.1 (a) Form of Stock Certificate
4.2 (i) (d) Indenture dated as of December 19, 1997 between CP
Limited Partnership and The First National Bank of Chicago,
as supplemented.
4.2 (ii) (d) First Supplemental Indenture dated as of December 19,
1997 between CP Limited Partnership and The First National
Bank of Chicago, related to the $100,000,000 MadatOry Par Put
Remarked SecuritiesSM ("MOPPRSSM") due December 10, 2014.
4.2 (iii) (d) Remarking Agreement dated as of December 23,1997 among CP
Limited Partnership, CP Limited Partnership and the
"Remarketing Dealer" named therein.
4.3* (i) $100,000,000 8.5% Indenture, dated February 25, 2000, of
CP Limited Partnership.
4.4* (e) Note Purchase Agreement dated as of November 4, 1996,
between Pacific Mutual and ROC Communities, Inc. for
$70,000,000 in Senior Notes due November 4, 2003
10.1 (f) Amended and Restated Agreement of Limited Partnership of
CP Limited Partnership dated January 22, 1997
10.2 (l) Lease of 19500 Hall Road
10.3 (a) Form of Noncompetition Agreement (Boll and Allen)
10.4(i) (c) Employment Agreement (McDaniel)
10.4(ii) (c) Employment Agreement (Kellogg)
10.4(iii) (c) Employment Agreement (Fischer)
10.4(iv) (c) Employment Agreement (Davis)
10.5 (f) 1997 Equity Compensation Plan
10.6 (k) Long-Term Incentive Stock Plan
10.7 (g) Amendment to Amended and restated Agreement of Limited
Partnership of CP Limited Partnership dated April 20, 1998
10.8 (h) Articles supplementary dated April 20, 1998
10.9 (j) 1999 Equity Compensation Plan
21 (b) List of Subsidiaries of CP Limited Partnership
23 Consent of PricewaterhouseCoopers LLP
40
Exhibits
Index
* Other instruments defining long-term debt not exceeding 10 percent of
total assets have been omitted in reliance on Item 601 (b) (4)
(iii)(A) of Regulation S-K but will be filed upon request of the
Commission.
(a) Incorporated by reference to the Exhibits filed with the Company's
Registration Statement on Form S-11 filed with the Commission on
November 10, 1993 (Commission File No. 33-69150).
(b) Incorporated by reference to the Exhibits filed with the Chateau's
Annual Report on Form 10-K filed for the year ended December 31, 1995
with the Commission on March 29, 1996.
(c) Incorporated by reference to the Chateau's Quarterly Report on Form
10-Q filed with the Commission on May 14, 1997.
(d) Incorporated by reference to the Chateau's Form 8-K filed with the
Commission on December 9, 1997.
(e) Incorporated by reference to the Chateau's Form S-4 filed with the
Commission on September 24, 1996.
(f) Incorporated by reference to the Chateau's Annual Report on Form 10-K
filed for the year ended December 31, 1997.
(g) Incorporated by reference to the Company's Form 8-K filed with the
Commission on May 1, 1998.
(h) Incorporated by reference to the Chateau's Form 8-K filed with the
Commission on May 1, 1998.
(i) Incorporated by reference to the Exhibits filed with the Company's
Form 8-K dated February 25 2000 and filed with the Commission on
February 25, 2000.
(j) Incorporated by reference to the Chateau's Proxy Statement for the
Annual Meeting held on May 20, 1999 as filed with the Commission on
April 7, 1999.
(k) Incorporated by reference to the Chateau's Annual Report on Form 10-K
filed for the year ended December 31, 1999.
(l) Incorporated by reference to the Chateau's Annual Report on Form 10-K
filed for the year ended December 31, 2000.
b. Reports on Form 8-K
-------------------
No reports on Form 8-K were filed in the fourth quarter of the year
ended December 31, 2000.
41
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, and in the capacities
indicated, on the 27th day of March, 2001.
CP LIMITED PARTNERSHIP
BY: CHATEAU COMMUNITIES, INC.
By:/s/Gary P. McDaniel
----------------------
Gary P. McDaniel
Director and Chief Executive Officer
(Principal Executive Officer)
By:/s/Tamara D. Fischer
-----------------------
Tamara D. Fischer
Executive Vice President and Chief financial
Officer
(Principal Financial and Accounting Officer)
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
following persons on behalf of the Registrant and in the capacities indicated on
March 27, 2001, have signed this report below.
Signature Title
--------- -----
/s/ John A. Boll Chairman of the Board of Directors
- ----------------
John A. Boll
/s/ C. G. Kellogg Director and President
- -----------------
C. G. Kellogg
/s/Gary P. McDaniel Director and Chief Executive Officer
- -------------------
Gary P. McDaniel
/s/Edward R. Allen Director
- ------------------
Edward R. Allen
/s/Gebran S. Anton, Jr. Director
- -----------------------
Gebran S. Anton, Jr.
/s/James L. Clayton Director
- -------------------
James L. Clayton
42
/s/Steven G. Davis Director
- ------------------
Steven G. Davis
/s/James M. Hankins Director
- -------------------
James M. Hankins
/s/Rhonda Hogan Director
- ---------------
Rhonda Hogan
/s/James M. Lane Director
- ----------------
James M. Lane
/s/Donald E. Miller Director
- -------------------
Donald E. Miller
43
CP LIMITED PARTNERSHIP
SCHEDULE III, REAL ESTATE AND ACCUMULATED DEPRECIATION
for the year ended December 31, 2000
(in thousands)
Gross Amount
Cost Capitalized Carried at
Initial Cost Subsequent to Acquisition Close of
to Company (Improvements) Period 12/31/00
------------------ -------------------------- ------------------- Date of
Accum- Construc-
Depreciable Depreciable Depreciable lated tion (C)
Encum- Depre- Acquis-
Community Location brance Land Property Land Property Land Property Total ciation ition (A)
- ------------------------------------------------ ------- ----------- ------ --------- ------- --------- ------- -------- ----------
Algoma Algoma Township, MI 60 - 72 3,436 132 3,436 3,568 1,078 1974(C)
Anchor Bay Ira Township, MI 432 80 2,877 16,573 3,309 16,653 19,962 8,500 1968(C)
Anchor North Bay Tampa Bay, FL 288 1,422 - 53 288 1,475 1,763 122 1998(A)
Arbor Village Jackson, MI 1,086 813 4,787 - 192 813 4,979 5,792 669 1998(A)
Atlanta Meadows Atlanta, GA 625 435 - 39 625 474 1,099 93 1993(A)
Audubon Orlando, FL 281 296 2 2,987 283 3,283 3,566 1,985 1988(A)
Autumn Forest Greensboro, NC 4,571 918 6,747 - 345 918 7,092 8,010 943 1998(A)
Avalon RV Park Clearwater, FL 263 2,202 - 21 263 2,223 2,486 307 1998(A)
Avon Rochester Hills, MI 621 484 633 7,139 1,254 7,623 8,877 5,868 1988(A)
-
Bennington West Jackson, MI 2,012 - - - 2,012 - 2,012 - 2000(C)
Bermuda Palms Indio, CA 1,291 2,477 - 129 1,291 2,606 3,897 455 1994(A)
Breazeale Laramie, WY. 251 1,618 - 58 251 1,676 1,927 274 1993(A)
Broadmore South Bend, IN 777 4,115 396 2,468 1,173 6,583 7,756 700 1998(A)
Buena Vista Fargo, ND 713 6,248 - 348 713 6,596 7,309 1,712 1994(A)
Butler Creek Augusta, GA 1,238 2,309 - 430 1,238 2,739 3,977 464 1993(A)
-
Camden Point Kingsland, GA 466 1,701 - 150 466 1,851 2,317 309 1993(A)
Camp Inn RV Park Frostproof, FL 796 4,220 - 129 796 4,349 5,145 378 1998(A)
Canterbury Grand Rapids, MI 705 3,107 87 1,629 792 4,736 5,528 511 1998(A)
Carnes Crossing Summerville, SC 1,503 7,161 449 1,721 1,952 8,882 10,834 1,070 1998(A)
Castlewood Estates Mabelton, GA 656 2,918 - 374 656 3,292 3,948 557 1997(A)
Casual Estates Syracuse, NY 2,136 14,324 - 564 2,136 14,888 17,024 2,843 1993(A)
44
Cedar Grove Clinton, CT 180 1,140 - 112 180 1,252 1,432 108
Cedar Knolls Minneapolis, MN 1,217 11,006 - 440 1,217 11,446 12,663 3,023
Central Office Englewood, CO - - 80 6,274 80 16,274 16,354 3,258
Chesterfield Chesterfield Township, MI 405 - 262 2,150 667 2,150 2,817 1,774
Cimarron Park St. Paul, MN 1,424 12,882 - 447 1,424 13,329 14,753 3,530
Clinton Clinton Township, MI 989 - 430 5,844 1,419 5,844 7,263 4,983
Coach Royale Boise, ID 197 1,065 - 39 197 1,104 1,301 208
Colonial Kalamazoo, MI 816 195 4 7,827 820 8,022 8,842 5,926
Colonial Coach Riverdale, GA 1,052 4,277 25 572 1,077 4,849 5,926 832
Colony Cove Ellenton, FL 5,683 28,256 - 539 5,683 28,795 34,478 5,126
Columbia Heights Grand Forks, ND 588 5,282 - 218 588 5,500 6,088 1,430
Conway Circle Orlando, FL 544 864 - 43 544 907 1,451 159
Conway Plantation Conway, SC 428 3,696 - 240 428 3,936 4,364 688
Country Estates Spring Lake Township, MI 30 - - 1,851 30 1,851 1,881 1,436
Countryside Great Falls Great Falls, MT 361 1,650 - 118 361 1,768 2,129 313
Countryside Village Denver Denver, CO 1,460 4,384 - 204 1,460 4,588 6,048 795
Countryside Village Jackson. Jacksonville, FL 962 4,796 - 639 962 5,435 6,397 950
Countryside Village Longmont Longmont, CO 1,481 4,455 - 266 1,481 4,721 6,202 842
Cranberry Lake White Lake Township, MI 432 220 1,052 5,335 1,484 5,555 7,039 2,182
Crestview Stillwater, OK 362 963 - 133 362 1,096 1,458 184
Crystal Lake St. Petersburg, FL 498 2,475 - 33 498 2,508 3,006 208
Crystal Lakes Zephryhills, FL 1,323 2,239 - 182 1,323 2,421 3,744 439
-
Del Tura Fort Myers, FL 42,501 4,360 50,508 418 3,925 4,778 54,433 59,211 14,131
-
Eagle Creek Tyler, TX 1,291 1,761 299 974 1,590 2,735 4,325 394
Eagle Point Seattle, WA 1,048 3,514 - 112 1,048 3,626 4,674 645
Eastridge San Jose, CA 7,140 2,476 4,671 - 148 2,476 4,819 7,295 847
Eldorado Daytona Bch, FL 408 1,248 - 94 408 1,342 1,750 232
Emerald Lake Punta Gorda, FL 399 1,150 - 297 399 1,447 1,846 806
Evergreen New Haven, CT 309 1,883 - 247 309 2,130 2,439 171
Cedar Grove 1998(A)
Cedar Knolls 1994(A)
Central Office
Chesterfield 1969(C)
Cimarron Park 1994(A)
Clinton 1969(C)
Coach Royale 1994(A)
Colonial 1985(A)
Colonial Coach 1997(A)
Colony Cove 1994(A)
Columbia Heights 1994(A)
Conway Circle 1993(A)
Conway Plantation 1997(A)
Country Estates 1974(C)
Countryside Great Falls 1993(A)
Countryside Village Denver 1993(A)
Countryside Village Jackson. 1993(A)
Countryside Village Longmont 1993(A)
Cranberry Lake 1986(A)
Crestview 1993(A)
Crystal Lake 1998(A)
Crystal Lakes 1998(A)
Del Tura 1994(A)
Eagle Creek 1997(A)
Eagle Point 1993(A)
Eastridge 1994(A)
Eldorado 1993(A)
Emerald Lake 1988(A)
Evergreen 1998(A)
45
Fairways Country Club Orlando, FL 955 5,823 9 2,127 964 7,950 8,914 5,832 1979(A)
Falcon Farms Moline, IL 295 1,576 - 330 295 1,906 2,201 321 1993(A)
Ferrand Estates Wyoming, MI 8,083 257 1,579 - 401 257 1,980 2,237 1,610 1989(A)
Forest Creek South Bend, IN 501 4,849 - 112 501 4,961 5,462 643 1998(A)
Forest Lake Estates Spring Lake Township, MI 414 2,293 36 736 450 3,029 3,479 827 1994(A)
Fountain Vue Marion, IN 360 1,210 90 189 450 1,399 1,849 175 1998(A)
Foxhall Village Raleigh, NC 521 5,283 - 520 521 5,803 6,324 1,045 1997(A)
Foxwood Farms Ocala, FL 691 1,502 - 408 691 1,910 2,601 316 1994(A)
Friendly Village Greely, CO 523 2,702 - 130 523 2,832 3,355 509 1994(A)
-
Glenmoor Battle Creek, MI 3,400 203 199 (148) 3,599 55 3,654 3 1999 - 2000(C)
Golden Valley Douglasville, TX 254 800 - 235 254 1,035 1,289 178 1997(A)
Grand Blanc Grand Blanc, MI 1,749 - 284 9,041 2,033 9,041 1,074 2,941 1990(C)
Green Acres New Haven, CT 195 1,286 - 31 195 1,317 1,512 179 1998(A)
Green Park South Montgomery, AL 1,021 7,704 351 1,372 1,372 9,076 0,448 424 1999(A)
-
Hickory Knoll Indianapolis, IN 356 2,669 - 103 356 2,772 3,128 507 1993(A)
Hidden Valley Orlando, FL 492 5,714 - 208 492 5,922 6,414 1,167 1995(A)
Highland New Haven, CT 153 1,140 - 11 153 1,151 1,304 158 1998(A)
Highlands (The) Flint, MI 6,000 2,323 3,260 1,126 5,009 3,449 8,269 1,718 2,091 1998(A)
Hillcrest Rockland, MA 236 1,285 1 35 237 1,320 1,557 194 1997(A)
Holiday Estates Byron Township, MI 93 - - 1,789 93 1,789 1,882 1,364 1984(C)
Homestead Ranch McAllen, TX 195 1,108 - 173 195 1,281 1,476 241 1997(A)
Howell Howell, MI 345 - 151 2,876 496 2,876 3,372 2,452 1972(C)
Hunters Chase Lima, OH 921 1,246 - 804 921 2,050 2,971 278 1997(A)
Huron Estates Flint, MI 354 1,882 66 432 420 2,314 2,734 278 1998(A)
-
Indian Rocks Clearwater, FL 441 1,032 - 29 441 1,061 1,502 106 1998(A)
-
Jade Isle Orlando, FL 273 1,076 - 25 273 1,101 1,374 193 1993(A)
-
Knoll Terrace Salem, OR 1,379 2,050 - 203 1,379 2,253 3,632 389 1993(A)
46
La Quinta Ridge Indio, CA 1,014 1,873 - 409 1,014 2,282 3,296 367 1994(A)
Lake in the Hills Auburn Hills, MI 952 6,389 - 93 952 6,482 7,434 2,070 1994(A)
Lakeland Harbor Lakeland, FL 875 - - 3,368 875 3,368 4,243 2,587 1983(C)
Lakeland Junction Lakeland, FL 471 972 - 137 471 1,109 1,580 915 1981(C)
Lakes at Leesburg Leesburg, FL 9,160 1,178 - 38 3,564 1,216 3,564 4,780 2,395 1984(C)
Lakewood Montgomery, AL 2,007 2,107 3 966 2,010 3,073 5,083 197 1999(A)
Lakewood Estates Davenport, LA 442 1,210 - 348 442 1,558 2,000 273 1993(A)
Land O'Lakes Orlando, FL 473 2,507 - 94 473 2,601 3,074 461 1993(A)
Landmark Village Fairburn, GA 2,539 4,352 - 391 2,539 4,743 7,282 841 1994(A)
Leisure Woods / Rockland Rockland, MA 831 4,326 - 110 831 14,436 15,267 1,427 1997(A)
Leisure Woods / Tauton Tauton, MA 256 2,780 162 1,580 418 4,360 4,778 349 1997(A)
Leisure World Weslaco, TX 228 1,639 - 89 228 1,728 1,956 307 1994(A)
Leonard Gardens Walker, MI 94 - 657 5,423 751 5,423 6,174 1,701 1987(C)
-
Macomb Macomb Township, MI 36,237 1,459 - 1,182 14,690 2,641 14,690 17,331 9,455 1973(C)
Maple Grove Boise, ID 702 2,384 - 172 702 2,556 3,258 441 1993(A)
Maple Ridge Manteno, IL 126 - - 1,459 126 1,459 1,585 322 1997(A)
Maple Valley Manteno, IL 338 - - 4,254 338 4,254 4,592 881 1997(A)
Mariwood Indianapolis, IN 324 2,415 - 226 324 2,641 2,965 465 1993(A)
Marnelle Fayetteville, GA 910 464 2,635 - 408 464 3,043 3,507 559 1997(A)
Meadow Park Fargo, ND 133 1,183 - 77 133 1,260 1,393 324 1994(A)
Meadowbrook Ithaca, NY 291 4,029 - 89 291 4,118 4,409 664 1993(A)
Midway Estates Vero Bch., FL 1,313 2,095 2 210 1,315 2,305 3,620 397 1993(A)
Mosby's Point Florence, KY 608 1,574 - 66 608 1,640 2,248 292 1993(A)
-
Norton Shores Norton Shores, MI 103 - 118 4,924 221 4,924 5,145 3,230 1978(C)
Novi Novi, MI 896 - 393 5,227 1,289 5,227 6,516 4,889 1973(C)
47
Oak Grove Albany, GA 418 764 - 42 418 806 1,224 141 1993(A)
Oak Hill Groveland Township, MI 115 2,165 - 4,344 115 6,509 6,624 3,818 1983(A)
Oak Orchard Albion, NY 701 3,425 - 81 701 3,506 4,207 645 1997(A)
Oak Ridge South Bend, IN 615 3,770 - 84 615 3,854 4,469 506 1998(A)
Oak Springs Sorrento, FL 206 1,461 4 498 210 1,959 2,169 1,518 1981(A)
Oakley Point Moncks Corner, SC 904 446 904 446 1,350 21 2000(C)
Oakwood Forest Greensboro, NC 1,111 3,843 - 422 1,111 4,265 5,376 752 1993(A)
Old Orchard Davison, MI 210 182 - 2,695 210 2,877 3,087 1,745 1988(A)
One Hundred Oaks Fultondale, AL 345 1,839 - 102 345 1,941 2,286 311 1997(A)
Orange Lake Clermont, FL 246 85 - 2,227 246 2,312 2,558 1,220 1988(A)
Orion Orion Township, MI 422 198 722 5,148 1,144 5,346 6,490 3,396 1986(A)
-
Palm Beach Colony West Palm Beach, FL 691 1,962 - 216 691 2,178 2,869 905 1983(A)
Paradise Village Albany, GA 340 918 - 47 340 965 1,305 175 1993(A)
Pedaler's Pond Lake Wales, FL 350 285 - 2,356 350 2,641 2,991 1,433 1990(A)
Pendleton Indianapolis, IN 122 964 - 79 122 1,043 1,165 176 1993(A)
Pine Lakes Ranch Thornton,CO 2,463 0,379 34 331 2,497 10,710 13,207 1,927 1997(A)
Pinecrest Village Shreveport, LA 93 719 - 504 93 1,223 1,316 212 1997(A)
Pinellas Cascades Clearwater, FL 1,747 2,313 - 54 1,747 2,367 4,114 413 1993(A)
Pinewood Columbus, MI 1,242 0,070 58 388 1,300 10,458 11,758 1,389 1998(A)
Pleasant Ridge Lansing, MI 915 3,898 - 120 915 4,018 4,933 548 1998(A)
Presidents Park Grand Forks, ND 258 1,283 - 308 258 1,591 1,849 257 1994(A)
-
Redwood Estates Thornton,CO 2,473 0,044 - 162 2,473 10,206 12,679 1,870 1997(A)
Regency Lakes Winchester, VA 1,176 3,705 - 2,124 1,176 5,829 7,005 886 1997(A)
Riverview Portland, OR 537 1,942 - 68 537 2,010 2,547 359 1993(A)
Rolling Hills Louisville, KY 342 1,034 - 44 342 1,078 1,420 195 1993(A)
Rosemount Woods Minneapolis/St. Paul, MN 475 4,297 - 130 475 4,427 4,902 1,149 1994(A)
Royal Estates Kalamazoo, MI 1,015 2,475 - 72 1,015 2,547 3,562 464 1993(A)
48
Saddlebrook N. Charleston, SC 1,284 5,497 - 98 1,284 5,595 6,879 767 1998(A)
Science City Midland, MI 870 1,760 - 83 870 1,843 2,713 334 1993(A)
Shady Lane Clearwater, FL 324 1,574 - 25 324 1,599 1,923 218 1998(A)
Shady Oaks Clearwater, FL 750 6,967 - 59 750 7,026 7,776 954 1998(A)
Shady Village Clearwater, FL 468 3,179 - - 468 3,179 3,647 263 1998(A)
Shenandoah Boise, ID 443 2,528 - 221 443 2,749 3,192 464 1994(A)
Sherwood Marion, IN 264 1,175 240 811 504 1,986 2,490 183 1998(A)
Skyway Indianapolis, IN 178 1,366 - 150 178 1,516 1,694 257 1993(A)
South Oaks Palmetto, GA 1,834 885 2,550 - (884) 885 1,666 2,551 78 2000(A)
Southwind Naples, FL 1,476 3,463 - 154 1,476 3,617 5,093 639 1993(A)
Spring Brook Utica, MI 4,605 1,209 0,928 - 107 1,209 1,035 12,244 1,505 1998(A)
Springfield Farms Brookline, MO 1,698 2,157 - 1,997 1,698 4,154 5,852 579 1997(A)
Starlight Ranch Orlando, FL 5,597 8,859 - 372 5,597 9,231 14,828 1,637 1997(A)
Steeple Chase Battle Creek, MI 1,049 - 1,049 - 1,049 - 2000(C)
Stonegate, LA Shreveport, LA 160 642 - 102 160 744 904 116 1993(A)
Sun Valley Jackson, MI 606 2,514 9 112 615 2,626 3,241 357 1998(A)
Swan Creek Ann Arbor, MI 882 9,709 - 36 882 9,745 10,627 1,323 1998(A)
-
Tarpon Glen Clearwater, FL 510 2,893 - 72 510 2,965 3,475 248 1998(A)
Terrace Heights Dubuque, IA 919 2,413 - 250 919 2,663 3,582 456 1993(A)
The Colony Rancho Mirage, CA 4,762 2,259 4,745 - 187 2,259 4,932 7,191 844 1994(A)
The Glen Rockland, MA 261 252 - 638 261 890 1,151 90 1997(A)
The Homestead McAllen, TX 529 100 742 - 227 100 969 1,069 165 1997(A)
The Orchard Sanat Rosa, CA 7,947 2,795 6,363 - 50 2,795 6,413 9,208 1,066 1994(A)
Timber Heights Davison, MI 274 - 363 6,595 637 6,595 7,232 976 1996(A)
Torrey Hills Flint, MI 346 205 49 4,657 395 4,862 5,257 3,039 1987(A)
Town & Country, FL Orlando, FL 245 896 - 18 245 914 1,159 158 1993(A)
Trails End Weslaco, TX 260 1,804 - 172 260 1,976 2,236 330 1994(A)
Twenty Nine Pines St. Paul, MN 317 2,871 - 38 317 2,909 3,226 777 1994(A)
Twin Pines Goshen, IN 197 1,934 - 217 197 2,151 2,348 374 1993(A)
49
Valley Vista Grand Rapids, MI 1,534 411 2,791 - 108 411 2,899 3,310 370 1998(A)
Vance Columbus, OH 200 993 - 399 200 1,392 1,592 179 1993(A)
Villa Flint, MI 135 332 - 2,861 135 3,193 3,328 2,478 1984(A)
-
Westbrook Detroit, MI 190 2,451 530 5,092 720 7,543 8,263 804 1996(C)
Whispering Pines Clearwater, FL 4,208 4,071 - 260 4,208 4,331 8,539 671 1993(A)
Willo Arms Cleveland, OH 473 2,146 - 67 473 2,213 2,686 402 1993(A)
Winter Haven Oaks Winter Haven, FL 490 705 362 1,371 852 2,076 2,928 1,206 1988(A)(C)
Winter Paradise RV Hudson, FL 300 1,593 - 66 300 1,659 1,959 140 1998(A)
Woodlake Greensboro, NC 924 6,311 - 156 924 6,467 7,391 877 1998(A)
Yankee Springs Grand Rapids, MI 948 5,360 90 789 1,038 6,149 7,187 778 1998(A)
Yorktowne Sharonville, OH 2,130 6,311 - 338 2,130 6,649 8,779 1,216 1997(A)
Difference between allocated purchase
price and historical cost of
properties acquired in the ROC
Acquistion 959 178,279 179,238 37,216
---------------------------------------------------------------------
136,899 138,996 542,043 156,323 935,128 1,091,451 235,653
=====================================================================
50
SCHEDULE III
Continued
CP LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION, Continued
The changes in total real estate for the years ended December 31, 2000, 1999,
and 1998 are as follows:
2000 1999 1998
---------------- ------------------ -----------------
Balance, beginning of year $ 1,055,450 $ 1,026,509 $ 836,175
Acquisitions 7,577 14,808 172,422
Improvements 28,424 25,105 21,486
Dispositions and other - (10,972) (3,574)
---------------- ------------------ -----------------
Balance, end of year $ 1,091,451 $ 1,055,450 $ 1,026,509
================ ================== =================
The change in accumulated depreciation for the years ended December 31, 2000,
1999, and 1998 are as follows:
2000 1999 1998
---------------- ------------------ -----------------
Balance, beginning of year $ 192,015 $ 151,260 $ 112,314
Depreciation for the year 43,638 41,422 39,213
Dispositions and other - (667) (267)
---------------- ------------------ -----------------
Balance, end of year $ 235,653 $ 192,015 $ 151,260
================ ================== =================
51