CP LTD PARTNERSHIP - 10-Q Quarterly Report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

x	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

	For the quarterly period ended March 31, 2003

or

o	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission file number 33-85492



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)

303.741.3707
Registrant’s telephone number, including area code

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 Exchange 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 o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes x

No o

CP LIMITED PARTNERSHIP
FORM 10-Q
INDEX

		Pages

PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)

	Condensed Consolidated Statements of Income for the Three Months Ended March 31, 2003 and 2002	1

	Condensed Consolidated Balance Sheets as of March 31, 2003 and December 31, 2002	2

	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2003 and 2002	3

	Notes to Condensed Consolidated Financial Statements	4 - 9

Item 2.	Management Discussion and Analysis of Financial Condition and Results of Operations	10 - 16

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	17

Item 4.	Controls and Procedures	17

PART II.	OTHER INFORMATION	17

SIGNATURE		23

CERTIFICATIONS		24 - 25

PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements

CP LIMITED PARTNERSHIP

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

	Three Months Ended March 31,

	2003			2002

Revenues:
Rental income	$	63,432		$	61,936
Interest income		2,806			2,752
Management fee and other income		(94	)		466

		66,144			65,154
Expenses:
Property operating and maintenance		19,707			18,445
Real estate taxes		4,335			4,214
Depreciation and amortization		17,683			16,277
Administrative		3,102			3,367
Interest and related amortization		16,702			16,800

		61,529			59,103

Income before gain on disposition of properties and distribution		4,615			6,051
Gain on disposition of properties		—			1,164
Distribution to preferred OP Unitholders		(1,523	)		(1,523	)

Income from continuing operations		3,092			5,692

Discontinued operations:
Income from discontinued operations		764			1,762
Gain on disposition of properties		459			—

Income from discontinued operations		1,223			1,762

Income before cumulative effect of accounting change		4,315			7,454
Cumulative effect of accounting change		—			(1,014	)

Net income attributable to common OP Unitholders	$	4,315		$	6,440

Net income attributable to common OP Unitholders:
General partner	$	3,622		$	5,364
Limited partners		693			1,076

	$	4,315		$	6,440

Earnings per OP Unit - basic
Income from continuing operations	$	0.09		$	0.16
Income from discontinued operations		0.03			0.05

Income before cumulative effect of accounting change		0.12			0.21
Cumulative effect of accounting change		—			(0.03	)

Net income attributable to common OP Unitholders	$	0.12		$	0.18

Weighted average common OP Units - basic		34,969			35,042

Earnings per OP Unit - diluted
Income from continuing operations	$	0.09		$	0.16
Income from discontinued operations		0.03			0.05

Income before cumulative effect of accounting change		0.12			0.21
Cumulative effect of accounting change		—			(0.03	)

Net income attributable to common OP Unitholders	$	0.12		$	0.18

Weighted average common OP Units - diluted		34,977			35,201

The accompanying notes are an integral part of the financial statements.

CP LIMITED PARTNERSHIP

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31, 2003 (Unaudited)		December 31, 2002

ASSETS
Rental property:
Land	$	199,328	$	207,137
Land and improvements for expansion sites		42,596		41,751
Depreciable property, net		1,395,074		1,433,327

		1,636,998		1,682,215
Less: accumulated depreciation		351,169		346,583

Net rental property		1,285,829		1,335,632
Rental property held for sale		39,177		6,004
Cash and cash equivalents		4,013		2,025
Rents and other receivables, net		5,092		5,304
Notes receivable		43,388		42,611
Investments in and advances to affiliates		106,408		112,054
Prepaid expenses and other assets		13,766		11,358

Total assets	$	1,497,673	$	1,514,988

LIABILITIES
Debt	$	1,006,573	$	1,013,809
Accrued interest payable		14,306		13,911
Accounts payable and accrued expenses		16,009		15,248
Rents received in advance and security deposits		19,246		16,266
Distributions payable		20,006		20,038

Total liabilities		1,076,140		1,079,272
PARTNERS’ CAPITAL
Partners’ Capital, Unlimited Authorized Units:
34,968,393 and 35,053,070, Common OP Units outstanding at March 31, 2003 and December 31, 2002, respectively 1,500,000 Preferred OP Units outstanding at March 31, 2003 and December 31, 2002, respectively		—		—
General Partner		290,577		301,239
Limited Partners		57,999		61,520
Preferred OP Units, Series A		72,957		72,957

Total partners’ capital		421,533		435,716

Total liabilities and partners’ capital	$	1,497,673	$	1,514,988

The accompanying notes are an integral part of the financial statements.

CP LIMITED PARTNERSHIP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Three Months Ended March 31,

	2003			2002

Cash flows from operating activities:
Net income attributable to common OP Unitholders	$	4,315		$	6,440
Adjustments to reconcile net income to net cash provided by operating activities:
Non-cash items included in discontinued operations		218			620
Equity in loss of CSI		622			472
Share of loss from N’Tandem		27			130
Net gain on disposition of properties - continuing operations		—			(1,164	)
Cumulative effect of accounting change		—			1,014
Bad debt expense		188			464
Depreciation and amortization from continuing operations		17,683			16,277
Amortization of debt issuance costs		1,111			735
Decrease in operating assets		176			2,463
Increase in operating liabilities		1,264			3,273

Net cash provided by operating activities		25,604			30,724
Cash flows from investing activities:
Net proceeds from dispositions of rental properties		4,067			6,232
Collection of amounts held in escrow, from prior year property dispositions		—			10,660
Additions to rental property and equipment		(4,798	)		(8,348	)
Investment in and advances to affiliates		(1,297	)		(4,764	)
Proceeds from Notes Receivable - OP Unitholder		6,000			—
Payments (advances) on notes receivable, net		(708	)		633

Net cash provided by investing activities		3,264			4,413
Cash flows from financing activities:
Borrowings on line of credit		36,785			32,454
Payments on line of credit		(42,959	)		(64,098	)
Principal payments on debt		(1,062	)		(1,165	)
Distributions to OP Unitholders		(19,229	)		—
Payment of debt issuance costs		(412	)		(1,612	)
Exercise of Chateau’s common stock options and other		(3	)		88

Net cash used in financing activities		(26,880	)		(34,333	)

Increase in cash and cash equivalents		1,988			804
Cash and cash equivalents, beginning of period		2,025			61

Cash and cash equivalents, end of period	$	4,013		$	865

Supplemental cash flow information:
Fair market value of OP Units issued in connection with acquisitions/development	$	246		$	698

The accompanying notes are an integral part of the financial statements.

CP LIMITED PARTNERSHIP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.	Background and Basis of Presentation:

	Background -
	CP Limited Partnership is a limited partnership and was formed by Chateau Communities, Inc., a real estate investment trust, as a general partner and Chateau Estates, as the initial limited partner, on September 16, 1993. We are engaged in owning and operating manufactured housing community properties. As of March 31, 2003, our portfolio consisted of 203 properties, containing an aggregate of 67,966 homesites and 1,359 park model/RV sites, located in 32 states. We also fee manage 35 properties, containing an aggregate of 7,835 homesites.

	The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America and in conformity with the rules and regulations of the Securities and Exchange Commission requires management to make estimates and assumptions. These estimates may affect the reported amounts of 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.

	In our opinion, the interim financial statements presented herein reflect all adjustments of a normal and recurring nature that are necessary to fairly present the interim financial statements. The results of operations for the interim period are not necessarily indicative of the results that may be expected for the year ended December 31, 2003. These financial statements should be read in conjunction with the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2002.

	Basis of Presentation -
	The accompanying condensed consolidated financial statements include all accounts of CP Limited and our subsidiaries. Chateau and ROC Communities, Inc. are general partners. As of March 31, 2003, Chateau owned on a combined basis, an 84 percent general partner interest. Pursuant to the terms of the operating partnership agreement, we are required to reimburse Chateau for the net expenses incurred by Chateau. Amounts paid on behalf of Chateau by us are reflected in the statement of income as general and administrative expenses. The balance sheet of Chateau as of March 31, 2003 is identical to our accompanying balance sheet, except as follows:

(In thousands)	As Presented Herein March 31, 2003		Adjustments			Chateau Communities, Inc March 31, 2003

Minority interests in CP Limited Partnership	$	—	$	130,956		$	130,956

Equity:
General partner	$	290,577	$	(290,577	)	$	—
Limited partners		130,956		(130,956	)		—
Common stock				294			294
Additional paid-in capital				500,350			500,350
Dividends in excess of accumulated earnings				(195,493	)		(195,493	)
Accumulated other comprehensive income				(5,293	)		(5,293	)
Notes receivable from officers				(9,281	)		(9,281	)

Partners’ capital/shareholders’ equity	$	421,533	$	(130,956	)	$	290,577

	We own 100% of the preferred stock of Community Sales, Inc. (“CSI”), our taxable service corporation through which we conduct manufactured home sales and brokerage activities. Through our ownership, we are entitled to 100% of the CSI cash flow and economics; however, we account for our investment in CSI using the equity method of accounting, since we do not own any of its voting common stock.

	Reclassifications –
	Certain prior year amounts have been reclassified to conform to current period presentation.

2.	Comprehensive Income:

	We amortize the loss of a forward rate interest swap hedge transaction, which was settled in 2001 with the issuance of fixed rate debt and included in the partners’ capital section of the Condensed Consolidated Balance Sheets. Total comprehensive income for the three months ended March 31, 2003 and 2002 is summarized as follows (in thousands):

	2003			2002

Net income available to common OP Unitholders	$	4,315		$	6,440
Add back: amortization of hedge loss		244			219
Less: adjustment for amounts included in net income		(244	)		(219	)

Total comprehensive income	$	4,315		$	6,440

3.	Partners’ Capital:

	On February 25, 2003, we declared a cash distribution of $.55 per OP Unit to OP Unitholders of record as of March 31, 2003. The distribution was paid April 15, 2003 and is included in distributions payable in the accompanying condensed consolidated balance sheet as of March 31, 2003.

	Basic and diluted earnings per OP Unit are summarized in the following table:

	For the Three Months Ended March 31,

(In thousands, except per OP Unit data)	2003		2002

Basic earnings per OP Unit:
Income from continuing operations	$	3,092	$	5,692

Weighted average common OP Units - Basic		34,969		35,042

Per OP Unit	$	0.09	$	0.16

Diluted earnings per OP Unit:
Income from continuing operations	$	3,092	$	5,692

Weighted average common OP Units outstanding		34,969		35,042
Chateau employee stock options		8		159

Weighted average common OP Units - Diluted		34,977		35,201

Per OP Unit	$	0.09	$	0.16

	The notes receivable from Chateau stock option exercises bear interest, primarily at LIBOR plus 80 basis points, range in maturity dates from 2003 to 2005, are collateralized by the underlying Chateau shares and are non-recourse to the borrower. Approximately $3.6 million of the loans mature in August 2003 and are collateralized by approximately 140,000 Chateau shares. We may recognize impairment on these notes receivable depending on Chateau’s share price at maturity.

4.	Chateau’s Stock Options Plan:

	If compensation cost for Chateau’s stock option grants had been recognized based on the fair value at the grant dates for March 31, 2003 and 2002 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 (in thousands, except per OP Unit data):

	For the Three Months Ended March 31,

	2003			2002

Net income attributable to common OP Unitholders, as reported	$	4,315		$	6,440
Less: Total employee compensation expense determined under fair value based method for all awards		(228	)		(282	)

Pro forma net income	$	4,087		$	6,158

Earnings per OP Unit
Basic - as reported	$	0.12		$	0.18

Basic - pro forma	$	0.12		$	0.17

Diluted - as reported	$	0.12		$	0.18

Diluted - pro forma	$	0.12		$	0.17

5.	Financing:

	The following table sets forth certain information regarding debt at March 31, 2003:

(Dollars in thousands)	Weighted Average Interest Rate			Maturity Date		Principal Balance

Fixed rate mortgage debt		7.70	%		2003 - 2011	$	278,911
Unsecured senior notes		7.77	%		2003 - 2021		470,000
Unsecured installment notes		7.50	%		2012		9,662

Total fixed rate debt							758,573

Unsecured term loan		3.08	%		2004		125,000
Unsecured lines of credit		2.70	%		2005		123,000

Total variable rate debt							248,000

						$	1,006,573

	We have a line of credit available with BankOne, N.A., acting as lead agent with a total borrowing capacity of $175 million (the “Bank One Credit Facility”). Beginning April 2003, our borrowing capacity on this facility is restricted by $10 million each month to ensure availability of $50 million in August 2003 to repay $50 million of senior unsecured notes upon their maturity. Subsequent to the repayment, the borrowing capacity will be restored to $175 million. The capacity will then be restricted by $20 million through November 2003 to ensure adequate borrowing capacity to repay $20 million of senior unsecured debt upon its maturity. Subsequent to that repayment, the borrowing capacity will be restored to $175 million. The facility matures in February 2005 and as of March 31, 2003, the facility bears interest at LIBOR plus 140 basis points (2.68% as of March 31, 2003). In addition we have a $7.5 million revolving line of credit from US Bank, which, as of March 31, 2003, bears interest at a rate of LIBOR plus 125 basis points (2.53% as of March 31, 2003) (together with our BankOne Credit Facility, “Credit Facilities”). As of March 31, 2003 we had approximately $123 million outstanding under our Credit Facilities and had available $59.5 million in additional borrowing capacity.

	We have a $125 million term loan with BankOne acting as lead agent, which as of March 31, 2003, bears interest at LIBOR plus 175 basis points (3.03% as of March 31, 2003) and matures in May 2004.

	In January 2003, Standard & Poor’s Ratings Services affirmed our credit ratings at BBB-, but revised its outlook of our company from stable to negative. In March 2003, Moody’s Investors Service revised our debt rating to Ba1, outlook uncertain. Among other things, the downgrade was attributed to uncertainty regarding plans to address 2004 and 2005 debt maturities. This downgrade resulted in increased borrowing costs under our Bank One Credit Facility, term loan and $70 million of unsecured senior notes, and is reflected above. In addition, with the change in ratings, we may be required to repurchase $20 million of privately issued unsecured debt, at the lenders option, including related interest and other charges. This debt is currently scheduled to mature November 2003.

6.	Related Party Transactions:

	During the first quarter of 2003 we owned approximately 19% of N’Tandem Trust’s (“N’Tandem”) outstanding equity. As of March 31, 2003, we had loans and advances of approximately $38 million outstanding to N’Tandem. We also guarantee N’Tandem’s working capital line of credit, which had $16.5 million outstanding as of March 31, 2003. Subsequent to March 31, 2003, we advanced N’Tandem $16.5 million to pay off its working capital line of credit. In addition, we own N’Tandem’s external advisor and provide management and other services to N’Tandem. As such, we possess significant influence over the operating and financial decisions of N’Tandem, and accordingly, account for our investment in N’Tandem utilizing the equity method of accounting. The following table details the fees charged to N’Tandem for the respective periods (in thousands):

	For the Three Months Ended March 31,

	2003		2002

Interest income and related fees	$	500	$	722
Advisory fees		317		337
Management and overhead fees		267		426

	$	1,084	$	1,485

	In an effort to maximize the return on our investment in N’Tandem and to assume control over the portfolio that we manage for N’Tandem, we signed an agreement in January 2003 to purchase a subsidiary of N’Tandem. This transaction, which carries a total purchase price of approximately $150 million, will require a $5 million additional cash investment. We will assume $85 million of secured debt and $3 million of other liabilities and retire our loans and advances to N’Tandem, which will be approximately $54.5 million. The transaction was approved by the shareholders of N’Tandem and is expected to close in the second quarter of 2003. When the transaction is completed, we plan to market 12 communities for disposition, representing approximately 15% of N’Tandem’s net operating income, in the remainder of 2003.

	Effective April 1, 2003, we had the unilateral right to convert our notes receivable from N’Tandem into a common equity investment in N’Tandem. We exercised that right in April 2003. Based on the conversion right, we will consolidate N’Tandem beginning April 1, 2003.

7.	Rental Property Held for Sale / Discontinued Operations:

	Assets held for sale are carried at the lower of book value or fair value less costs to sell the assets. Consistent with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, income from discontinued operations, for all periods presented, includes the results of operations through the property sale date (if the property was sold prior to March 31, 2003) and the results of operations for the properties held for sale through March 31, 2003. During the first quarter of 2003, we sold two communities for a combined gross sales price of $4.4 million, which includes a net gain on sale of $434,000. These communities are included in discontinued operations for all periods presented.

	As of March 31, 2003 we have thirteen communities that are classified as held for sale and are included in discontinued operations for all periods presented. Properties are identified as assets held for sale when certain disposition criteria are met, and are adjusted to the lower of book value or fair value less costs to sell the assets at the time of reclassification.

	During 2002, we disposed of eleven communities, which are included in discontinued operations in 2002.

	The following table shows the results of operations for the discontinued operations, in thousands:

	For the Three Months Ended March 31,

	2003			2002

Total revenues	$	2,288		$	4,099
Total operating expenses		(826	)		(1,684	)
Interest expense and related amortization		(21	)		(33	)
Depreciation expense		(677	)		(620	)

Income from discontinued operations before gain on disposition of properties		764			1,762
Gain on disposition of properties		459			—

Income from discontinued operations	$	1,223		$	1,762

8.	Goodwill:

	We adopted the provisions of SFAS No. 142, “Goodwill and Other Intangible Assets” (“SFAS No. 142”), as of January 1, 2002. Under the new rules, goodwill and intangible assets deemed to have indefinite lives are no longer amortized, instead being subject to impairment tests at least annually.

	SFAS No. 142 requires us to test goodwill for impairment using a two-step process. The first step is a screen for potential impairment, while the second step measures the amount of impairment. We completed the first step of our goodwill impairment testing by the end of the second fiscal quarter of 2002. As a result of performing the first “step” of goodwill impairment testing, we identified impairment related to the goodwill associated with CSI’s only company-owned home sales dealership. As allowed under the transitional provisions of SFAS No. 142, we completed the second “step” in the third quarter of 2002. As a result of this test, we recognized impairment of approximately $1.0 million before allocation to minority interests. The impairment loss has been recorded in the first quarter as a cumulative effect of a change in accounting principle in the Condensed Consolidated Statements of Income during the three months ended March 31, 2002.

9.	New Accounting Pronouncements:

	In December 2002, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 148, “Accounting for Stock-Based Compensation – Transition Disclosure – an amendment of FASB Statement No. 123” (“SFAS No. 148”). SFAS No. 148 amends SFAS No. 123, “Accounting for Stock-Based Compensation”, to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. Chateau has not yet elected to adopt the transitional provisions of this standard.

	In January 2003, the FASB issued FIN 46, “Consolidation of Variable Interest Entities” (“FIN 46”). A variable interest entity is a corporation, partnership, trust, or any other legal structure used for business purposes that either (a) does not have equity investors with voting rights or (b) has equity investors that do not provide sufficient financial resources for the entity to support its activities. A variable interest entity often holds financial assets, including loans or receivables, real estate or other property. A company that consolidates a variable interest entity is called the primary beneficiary. Previous practice has dictated that one company would include another entity in its consolidated financial statements only if it controlled the entity through voting interests. FIN 46 changes that by requiring a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity’s activities or entitled to receive a majority of the entity’s residual returns or both. FIN 46 also requires disclosures about variable interest entities that the company is not required to consolidate but in which it has a significant variable interest. This statement is effective in two parts. The statement immediately applies to variable interest entities created after January 31, 2003, and to variable interest entities in which an enterprise obtains an interest after January 31, 2003. The statement applies no later than the first fiscal year or interim period beginning after June 15, 2003, to variable interest entities in which an enterprise holds a variable interest that it acquired prior to February 1, 2003. The adoption of this statement will require the consolidation of CSI beginning July 1, 2003. We do not believe additional exposure exists as a result of consolidating CSI, as CSI is currently accounted for under the equity method through our recognition of 100% of CSI’s equity earnings/losses.

Item 2.

Management Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the financial statements and notes appearing elsewhere in this report and with the December 31, 2002 Form 10-K. Certain statements in this report constitute “forward-looking statements” within the meaning of the Private Securities Litigation Act of 1995. Such forward-looking statements may involve our plans, objectives and expectations that may be impacted by a number of risks and uncertainties. Those risks and uncertainties include, but are not limited to: national, regional and local economic climates, competition from other forms of single or multi-family housing, changes in market rental rates, supply and demand for affordable housing, the ability of manufactured home buyers to obtain financing, our ability to maintain rental rates and occupancy, the level of repossessions by manufactured home lenders, changes in interest rates, the pace of dispositions, our corporate debt ratings, and the condition of capital markets. We undertake no duty or obligation to update or revise these forward-looking statements, whether as a result of new information, future developments, or otherwise.

Overview

We were formed by Chateau, as a general partner, and Chateau Estates, as the initial partner, in September 1993 to own, operate, manage, acquire, develop and expand manufactured housing communities. Chateau conducts substantially all of its activities through us, owns directly and through ROC Communities, Inc. (“ROC”), our other general partner, an approximate 84% general partner interest as of March 31, 2003. As of March 31, 2003, we owned 203 properties containing an aggregate of 67,966 homesites and 1,359 park model/RV sites, located in 32 states. Approximately 28% of these homesites were in Florida, 25% were in Michigan, and 9% were in Georgia. We also fee managed 35 properties containing an aggregate of 7,835 homesites. In January 2003, we entered into an agreement to acquire the N’Tandem subsidiary that owns 33 of these communities (further described below).

During the third quarter of 2001, we began the implementation of our plan to dispose of those communities that do not fit our overall strategic objectives or do not meet our operating standards, which in turn will help us meet our financial objectives. From the inception of the plan through March 31, 2003, we have disposed of an aggregate of 24 properties and three parcels of land for approximately $96.6 million (see further discussion under “Liquidity and Capital Resources” below).

Results of Operations

Our results of operations in 2003 continue to be adversely impacted by many of the same factors that affected our 2002 results, including:
	•	Continued weakening economic conditions, which are more pronounced in certain markets in which we operate, specifically, greater Atlanta, Indiana, Michigan, North Carolina and Alabama.
	•	Several retail lenders who provide financing to our residents have exited the market place, while others have tightened their underwriting standards, making it more difficult for prospective residents to finance homes to be placed in our communities.
	•	Readily available and lower rate mortgage financing allows our traditional customers the opportunity to purchase a moderately priced site-built home, with an affordable monthly payment.
	•	Declining rental rates from apartments have added to the competitive environment.
	•	Two retail lenders filed for protection under the bankruptcy laws in the fourth quarter of 2002. This has affected the pricing of manufactured homes by increasing the supply of repossessed and other pre-owned homes, thereby exerting downward pressure on new and pre-owned home pricing. In addition, these lenders were making rental payments on an aggregate of 800 sites that they were occupying as a result of their repossession of homes from our residents. Effective in the fourth quarter of 2002, these lenders discontinued rental payments on these sites. As of March 31, 2003, 1,200 sites are occupied by repossessed homes not considered revenue producing in our portfolio.

These factors have made it more difficult for us to attract new residents and maintain historical occupancy rates at our communities. As of the end of the first quarter we lost 235 revenue producing sites in the same store portfolio, from December 31, 2002. We expect occupancy to remain relatively flat for the remainder of 2003. In addition, these factors have led to increased repossessions, increased collection costs, additional pressure for lower rental increases and losses of value in home inventory held by CSI.

The following table summarizes certain information relative to our properties for the three months ended March 31, 2003 and 2002. We consider all communities owned by us at both the beginning of the period and the end of the period, which are not classified as held for sale, as our “Same Store Portfolio.”

	Same Store Portfolio						Total Portfolio

(Dollars in thousands, except per site information)	2003			2002			2003			2002

As of March 31,
Number of communities		186			186			203			214
Total manufactured homesites		65,147			64,771			67,966			69,990
Occupied sites		55,863			57,419			58,065			61,733
Occupancy		85.7	%		88.6	%		85.4	%		88.2	%
For the three months ended March 31,
Rental income	$	63,187		$	61,703		$	63,432		$	61,936
Property operating expenses	$	22,768		$	21,461		$	24,042		$	22,659
Net operating income	$	40,419		$	40,242		$	39,390		$	39,277
Weighted average monthly rent per site	$	362		$	346		$	362		$	343

NOTE: Discontinued operations are included only in “Total Portfolio” site and community information.

Comparison of three months ended March 31, 2003 to three months ended March31, 2002

For the three months ended March 31, 2003, income from continuing operations was $3.1 million, a decrease of $2.6 million from the three months ended March31, 2002. The decrease was due to increased depreciation in 2003 and lower gains on dispositions in 2003, as compared with 2002.

Rental revenue for the three months ended March 31, 2003 was $63.4 million, an increase of $1.5 million from the three months ended March 31, 2002. The increase is primarily due to rental increases in our Same Store Portfolio offset somewhat by declining occupancy.

As of March 31, 2003, occupancy in our stable portfolio was 89.3%, 75.5% in the expansion portfolio, and 38.9% in the development properties. Total portfolio occupancy at March 31, 2003 was 85.4%. This compares to occupancy at March 31, 2002 of 92.3% in the stable portfolio, 77.1% in the expansion portfolio and 42.4% in the development portfolio, or total portfolio occupancy of 88.2%. On a per-site basis, weighted monthly rental revenue for the three months ended March 31, 2003 was $362 compared with $343 for the same period in 2002, an increase of 5.4%.

Management fee and other income primarily include management and advisory fee income for the management of 35 manufactured home communities, which includes N’Tandem Trust (“N’Tandem”), and equity earnings/losses from our taxable REIT subsidiary, Community Sales, Inc. (“CSI”). The decrease is due to reduced fees from N’Tandem, (see further discussion on N’Tandem under “Liquidity and Capital Resources” below) and increased losses from CSI. We recognized a loss of $622,000 from CSI in the first quarter of 2003, compared with a loss of $472,000 in the first quarter of 2002. The increased losses are a result of lower home sales margins and an increase in inventory reserves as a result of the increased pressure on home values.

Property operating and maintenance expense for the three months ended March 31, 2003 increased by $1.3 million or 7% from the same period a year ago. The increase was due to the increases in our Same Store Portfolio, including increased water and sewer expense, repairs and maintenance, property insurance and payroll burden costs, offset by a decrease in collection costs.

Administrative expense for the three months ended March 31, 2003 decreased by $265,000 from the same period a year ago. Administrative expense in the first quarter of 2003 was 4.7% of total revenues as compared to 5.2% in the same period of 2002. This decrease was primarily due to the restructuring of some of our divisional and corporate departments that was completed in the fourth quarter of 2002 in an effort to lower our costs, in addition to a number of operational-related consulting projects that were completed in 2002.

Depreciation and amortization expense for the three months ended March 31, 2003 increased $1,406,000 from the same period a year ago. Depreciation expense as a percentage of average depreciable rental property in the first quarter of 2003 remained relatively unchanged from 2002.

Discontinued Operations

Consistent with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, income from discontinued operations, for all periods presented, includes the results of operations through the property sale date (if the property was sold prior to March 31, 2003) and the results of operations for the properties held for sale through March 31, 2003. During the first quarter of 2003 we sold two communities, which have been reclassified to discontinued operations for all periods presented.

As of March 31, 2003 we have thirteen communities that are classified as held for sale and are included in discontinued operations (see further discussion under “2003 Portfolio Changes” below) for all periods presented. Properties are identified as assets held for sale when certain criteria are met, and are adjusted to the lower of book value or fair value less costs to sell the assets at the time of reclassification.

During 2002, we disposed of eleven communities, which are included in discontinued operations for 2002.

Cumulative Effect of a Change in Accounting Principle

CSI adopted the provisions of SFAS No. 142, “Goodwill and Other Intangible Assets”, as of January 1, 2002, resulting in an impairment charge in the first quarter of approximately $1 million. This resulted from an impairment in the goodwill related to its investment in the only company owned home sales dealership. This charge is reflected as a cumulative effect of a change in accounting principle.

Liquidity and Capital Resources

Net cash provided by operating activities was $25.6 million for the three months ended March 31, 2003, compared to $30.7 million for the same period in 2002, due to changes in our operating assets and liabilities.

Net cash provided by investing activities for the three months ended March 31, 2003 was $3.3 million as compared to $4.4 million for the same period in 2002. This amount is comprised of proceeds from the disposition of rental properties and a payment from a Notes Receivable OP Unitholder, offset somewhat by investments in development, acquisitions and capital expenditures, as well as additional investments in and advances to affiliates. We advanced $1.5 million to CSI during the first quarter of 2003 to primarily fund inventory purchases.

Net cash used in financing activities for the three months ended March 31, 2003 was $26.9 million. This consisted primarily of net payments on our Credit Facilities (discussed below) and distributions to our OP Unitholders of $19.2 million.

We anticipate that cash generated from operating activities and borrowing on our Credit Facilities will continue to provide the necessary funding for our short-term liquidity needs such as operating expenses, interest expense on outstanding indebtedness, recurring capital expenditures and distributions to our OP Unitholders.

Our long-term liquidity is affected by a number of factors, including the acquisition and disposition of properties, the amount of nonrecurring capital expenditures, the pace and cost of new and existing community development and expansion activities, our credit ratings with the national rating agencies and the timing of principal payments due on our indebtedness.

We have approximately $70 million of senior unsecured notes maturing in 2003, $50 million in August and $20 million in November. We expect to repay the balance with refinancings, the proceeds from property dispositions, borrowings on our Credit Facilities, which, as described below, have been amended to require adequate capacity to handle these maturities, or the issuance of additional secured or unsecured debt.

We have a line of credit available with BankOne, N.A., acting as lead agent with a total borrowing capacity of $175 million (the “Bank One Credit Facility”). Beginning April 2003, our borrowing capacity on this facility is restricted by $10 million each month to ensure availability of $50 million in August 2003 to repay $50 million of senior unsecured notes upon their maturity. Subsequent to the repayment, the borrowing capacity will be restored to $175 million. The capacity will then be restricted by $20 million through November 2003 to ensure adequate borrowing capacity the repay of $20 million of senior unsecured debt upon its maturing. Subsequent to that repayment, the borrowing capacity will be restored to $175 million. The facility matures in February 2005 and as of March 31, 2003, the facility bears interest at LIBOR plus 140 basis points (2.68% as of March 31, 2003). In addition we have a $7.5 million revolving line of credit from US Bank, which, as of March 31, 2003, bears interest at a rate of LIBOR plus 125 basis points (2.53% as of March 31, 2003) (together with our BankOne Credit Facility, “Credit Facilities”). As of March 31, 2003 we had approximately $123 million outstanding under our Credit Facilities and had available $59.5 million in additional borrowing capacity.

As of March 31, 2003, we had outstanding, in addition to the Credit Facilities, $470 million of senior unsecured debt with a weighted average interest rate and remaining maturity of 7.8% and 5.6 years, respectively, $279 million of secured mortgage debt with a weighted average interest rate and remaining maturity of 7.7% and 6.4 years, respectively, $9.7 million unsecured installment notes with an interest rate of 7.5% and a $125 million unsecured term loan with an interest rate of 3.1%. As of March 31, 2003, we had approximately $1.0 billion of total debt outstanding, representing approximately 57.8% of our total market capitalization. We consider market capitalization to be the sum of outstanding debt, preferred OP Units and the market value of our outstanding OP Units, all at the end of the period. All of the debt is fixed rate debt, other than our Credit Facilities and term loan. The fixed rate debt carries a weighted average interest rate of 7.7%.

In January 2003, Standard & Poor’s Ratings Services affirmed our credit ratings at BBB-, but revised its outlook of our company from stable to negative. In March 2003, Moody’s Investors Service revised our debt rating to Ba1, outlook uncertain. This downgrade was attributed, among other things, to uncertainty regarding plans to address 2004 and 2005 debt maturities. The downgrade resulted in increased borrowing costs under our BankOne Credit Facility, term loan and $70 million of unsecured senior notes of approximately $1 million annually. In addition, with the change in ratings, we may be required to repurchase $20 million of privately issued unsecured debt, at the lenders option, including related interest and other charges. This debt is currently scheduled to mature November 2003.

We are currently in the process of securing $50 million of unsecured senior notes, which are due 2021. As a result of our current credit rating, the covenant waivers that were received effective December 31, 2002 require us to complete this transaction by June 24, 2003, or be in default on these notes. We expect to complete the transaction by the required date.

As we have done historically, we expect to finance future debt maturities and meet our long-term liquidity needs through proceeds from property dispositions, additional borrowings under our existing or new credit facilities, issuances of new secured or unsecured debt financings or where appropriate, additional issuances of OP Units.

2003 Portfolio Change

As part of our strategy to bring our overall debt to market capitalization ratio more in line with our historical operating parameters, as of March 31, 2003 we disposed of 2 properties and during 2002 we disposed of 15 properties, as outlined in the table below:

	Number of Communities		Number of Sites		Gross Sales Price		Gain / (Loss) on Sale

Included in Discontinued Operations		11		2,250	$	41,440	$	8,879
Included in Continuing Operations		4		723		8,450		(401	)

2002 totals		15		2,973	$	49,890	$	8,478
2003 totals - all included in Discontinued Operations		2		338	$	4,400	$	459

Grand total		17		3,311	$	54,290	$	8,937

For the three months ended March 31, 2003, the proceeds from the dispositions were used to repay amounts outstanding under our Credit Facilities.

As a continuing part of our long-term strategic plan, we expect to dispose of an additional $100 million of assets during 2003 (of which $39.2 million met the held for sale criteria under SFAS No. 144) and potentially another aggregate $100-$200 million in 2004 and 2005. The disposition pace and pricing will depend on a number of factors, including the availability and terms of mortgage financing for manufactured housing communities and current capitalization rates.

Capital Investments

Our investment in capital improvements for the three months ended March 31, is as follows (in thousands, except per site):

	For the Three Months Ended March 31, 2003

Recurring capital expenditures (per site average $25.34) (a)	$	1,699
Site upgrades (b)		117
Acquisitions (c)		311
Expansions and development (d)		1,736
Revenue producing (e)		137

Total	$	4,000

(a)	Includes capital expenditures necessary to maintain asset quality, including purchasing and replacing assets used to operate the community. These capital expenditures do not include water meters, sheds, homes, or acquisitions. This is the actual cost to maintain the asset quality in the communities, e.g. clubhouse and building improvements, vehicles and maintenance equipment, road and other paving work, utility systems, common area amenities, drainage etc. Minimum capitalizable amount of project is $1,000.

(b)	Includes costs that are incurred when an existing older home (usually a smaller single-sectional home) moves out, and the site is prepared for a larger new home, more often than not, a multi-sectional home. These activities which are governed by manufacturers’ installation requirements and state building codes include grading, electrical, concrete, landscaping, drainage and water/sewer lines.

(c)	Acquisitions, as presented above, represent the purchase price of existing operating communities and land parcels to develop expansions or new communities. Acquisitions also include deferred capital improvements identified during due diligence and provided for in the acquisition pricing formula. These are identified during due diligence, but sometimes require up to 12 months after closing to complete.

(d)	These are the costs included in the development and expansion of communities. Costs in this category may include engineering, driveways, paving, utilities, homesite preparation and amenities.

(e)	Revenue producing includes costs related to revenue-generating activities, consisting primarily of sub-metering of water and sewer, and storage sheds.

As of March 31, 2003, we substantially completed the development of approximately 40 sites. In response to economic conditions that have weakened the demand for manufactured home community sites in many of our markets, we have moderated the pace of our development and expansion activity and will focus on filling the sites already substantially complete and currently vacant. We expect to spend an additional $10 million in finish costs in 2003, as these sites are filled. In addition, where appropriate, we will consider upgrading or adding facilities and amenities to certain communities in order to make those communities more attractive in their market, and to increase our potential cash flow from the community.

N’Tandem

As of March 31, 2003, we own approximately 19% of N’Tandem’s outstanding equity and have made loans and advances to N’Tandem. We account for this investment utilizing the equity method of accounting. Subsequent to March 31, 2003, we advanced N’Tandem $16.5 million to pay off their working capital line of credit. In an effort to maximize the return on our investment in N’Tandem and to assume control over the portfolio that we manage for N’Tandem, we signed an agreement in January 2003 to purchase a subsidiary of N’Tandem. This transaction, which carries a total purchase price of approximately $150 million, will require a $5 million additional cash investment. In addition, we will assume $85 million of secured debt and $3 million of other liabilities and retire our loans and advances to N’Tandem, which are currently $54.5 million. The transaction has been approved by the shareholders of N’Tandem and is expected to close in the second quarter of 2003. When the transaction is completed, we plan to market 11 communities for disposition, representing approximately 15% of N’Tandem’s net operating income, in the remainder of 2003.

Effective April 1, 2003, we had the unilateral right to convert our notes receivable from N’Tandem into a common equity investment in N’Tandem. We exercised that right in April 2003. Based on the conversion right, we will consolidate N’Tandem beginning April 1, 2003.

Historically we recognized income from a property management agreement, an advisory agreement, overhead reimbursements and interest income on advances as earned from N’Tandem. The amount of fee income and interest income earned is outlined in the table below.

	For the Three Months Ended March 31,

	2003		2002

Interest income and related fees	$	500	$	722
Advisory fees		317		337
Management and overhead fees		267		426

	$	1,084	$	1,485

Interest is earned on the loan to N’Tandem (Prime plus one percent, or 5.25% at March 31, 2003) and in 2002, includes fees paid by N’Tandem for the subordination of our loan to the N’Tandem bank debt (approximately $200,000). The advisory fees are charged based on one percent of N’Tandem’s average assets. The management fees are charged based on five percent of revenues of properties managed by us on behalf of N’Tandem. Overhead reimbursement fees were based on a specific allocation of costs. During the first quarter of 2003, we recorded a loss of $27,000, representing our ownership interest in N’Tandem’s loss.

New Accounting Pronouncements

See footnote 9 of the Notes to Condensed Consolidated Financial Statements for discussion of the impact of new accounting pronouncements.

Other

Funds from operations (“FFO”) is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) as consolidated net income without giving effect to gains (or losses) from sales of property and rental property depreciation and amortization. We believe 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 (1) does not represent cash flow from operations as defined by generally accepted accounting principles; (2) 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; (3) is not an alternative to cash flow as a measure of liquidity; and (4) may not be comparable to similarly titled measures reported by other REITs.

Our FFO is calculated as follows:

	For the Three Months Ended March 31,

(In thousands)	2003			2002

Income available to common OP Unitholders	$	4,315		$	6,440
Adjustments:
Depreciation and amortization on rental properties		17,107			15,835
Gain on disposition of rental property		—			(1,164	)
Cumulative effect of accounting change		—			1,014
Discontinued operations:
Depreciation on rental property		677			620
Net gain on disposition of properties		(459	)		—

FFO	$	21,640		$	22,745

Item 3.

Quantitative and Qualitative Disclosures about Market Risks

Our 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 March 31, 2003, our Credit Facilities and term loan represented our only variable rate debt.

We face market risk relating to our fixed-rate debt upon refinancing of such debt and depending upon prevailing interest rates at the time of such refinance. We have approximately $70 million of senior unsecured notes maturing in 2003, $50 million in August and $20 million in November. We expect to repay the balance with the proceeds from property dispositions or borrowings on our credit facilities or issuing new secured or unsecured debt.

In addition, we have assessed the market risk for our variable rate debt and believe that a 1% increase in LIBOR rates would result in an approximate $2.5 million increase in interest expense based on our average variable rate debt outstanding during 2003 of $253 million.

Item 4.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain a system of disclosure controls and procedures. The term “disclosure controls and procedures,” as defined by the regulations of the Securities and Exchange Commission (“SEC”), means controls and other procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit to the SEC under the Securities Exchange Act of 1934, as amended (the “Act”), is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit to the SEC under the Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate to allow timely decisions to be made regarding required disclosure. The Chief Executive Officer and Chief Financial Officer have evaluated our disclosure controls and procedures as of a date within 90 days of the filing date of this Form 10-Q and have concluded that our disclosure controls and procedures are effective as of the date of such evaluation.

Changes in Internal Controls

We also maintain a system of internal controls. The term “internal controls,” as defined by the American Institute of Certified Public Accountants’ Codification of Statement on Auditing Standards, AU Section 319, means controls and other procedures designed to provide reasonable assurance regarding the achievement of objectives in the reliability of our financial reporting, the effectiveness and efficiency of our operations and of our compliance with applicable laws and regulations. There have been no significant changes in our internal controls or in other factors that could significantly affect such controls subsequent to the date we carried out our evaluation.

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings
	None.

Item 2.	Changes in Securities and Use of Proceeds
	Not Applicable.

Item 3.	Defaults Upon Senior Securities
	Not Applicable.

Item 4.	Submission of Matters to a Vote of Security Holders
	Not Applicable.

Item 5.	Other Information

Property Information

We classify all our properties in one of four categories: stable, expansion, development, or disposition. The stable portfolio includes communities that do not have expansion activities. These communities normally have stable occupancy rates. The development portfolio includes our ground-up development properties. The expansion portfolio includes properties that have non-revenue producing homesites, which were constructed through an expansion of the community. When an expansion community becomes 90% occupied, it is reclassified as a stabilized community. The disposition portfolio includes those communities that meet the criteria to be classified as assets held for sale.

The following table sets forth certain information, as of March 31, 2003, regarding our properties, excluding our three park model/RV communities, as well as two of our greenfield properties that we have not yet commenced actual site development. A park model/RV community is a community where the majority of the sites are leased on an annual basis, although the resident only occupies the home for a portion of the year. A minority of the sites are rented with recreational vehicles on a daily, weekly or monthly basis.

Community	State	Location (Closest Major City)	Total Number of Sites	Occupancy		Weighted Average Monthly Rent per Site

*Stable*
100 Oaks	AL	Fultondale	235	74.0	%	$	253.99
Anchor Bay	MI	Detroit	1,384	88.1	%	$	404.54
Anchor North	FL	Tampa Bay	93	94.6	%	$	321.44
Apache East	AZ	Apache Jct	123	91.9	%	$	275.38
Arlington Lakeside	TX	Dallas	233	86.3	%	$	310.38
Audubon	FL	Orlando	280	95.7	%	$	309.94
Autumn Forest	NC	Greensboro	299	57.9	%	$	274.54
Avon	MI	Detroit	617	94.8	%	$	455.74
Beacon Hill Colony	FL	Tampa	201	99.5	%	$	266.78
Beacon Terrace	FL	Tampa	297	99.7	%	$	296.30
Bermuda Palms	CA	Palm Springs	185	98.4	%	$	383.83
Berryman’s Branch	NJ	Philadelphia	257	92.2	%	$	386.12
Buena Vista	ND	Fargo	400	94.8	%	$	312.22
Camden Point	GA	Kingsland	268	40.7	%	$	194.46
Castlewood Estates	GA	Atlanta	334	81.7	%	$	388.87
Casual Estates	NY	Syracuse	961	64.0	%	$	331.00
Cedar Grove	CT	New Haven	60	96.7	%	$	354.92
Cedar Knolls	MN	Minneapolis	458	96.9	%	$	453.24
Chesterfield	MI	Detroit	345	93.0	%	$	435.20
Cimarron Park	MN	St. Paul	505	96.2	%	$	468.23
Clinton	MI	Detroit	1,000	88.8	%	$	440.47
Coach Royale	ID	Boise	91	96.7	%	$	337.62
Colonial Acres	MI	Kalamazoo	612	82.2	%	$	336.81
Colonial Manor	MI	Kalamazoo	195	87.7	%	$	311.78
Colony Cove	FL	Sarasota	2,210	98.3	%	$	408.45
Columbia Heights	ND	Grand Forks	302	95.4	%	$	325.65
Country Estates	MI	Grand Rapids	254	80.3	%	$	331.61
Countryside Village - Denver	CO	Denver	345	91.9	%	$	455.52
Countryside Vlg Jacksonville	FL	Jacksonville	643	85.4	%	$	343.10
Countryside Vlg Longmont	CO	Longmont	310	97.4	%	$	451.58

Community	State	Location (Closest Major City)	Total Number of Sites	Occupancy		Weighted Average Monthly Rent per Site

Creekside	TX	Dallas	583	94.2	%	$	417.22
Crestview	OK	Stillwater	238	68.1	%	$	224.37
Crystal Lake Club	FL	Tampa	599	79.3	%	$	310.53
Denali Park	AZ	Apache Jct	162	82.7	%	$	280.37
Eagle Point	WA	Seattle	230	84.8	%	$	521.05
Eastridge Estates	CA	San Jose	187	99.5	%	$	734.10
Eldorado Estates	FL	Daytona Beach	126	94.4	%	$	305.05
Emerald Lake	FL	Fort Myers	201	99.0	%	$	321.11
Evergreen	CT	New Haven	102	97.1	%	$	357.26
Fairways Country Club	FL	Orlando	1,141	99.3	%	$	326.16
Falcon Farms	IL	Moline	215	90.2	%	$	293.42
Ferrand Estates	MI	Grand Rapids	420	97.6	%	$	383.40
Forest Creek	IN	South Bend	167	77.8	%	$	338.14
Fountainvue	IN	Marion	120	85.8	%	$	206.42
Four Seasons	GA	Atlanta	214	88.3	%	$	335.84
Foxhall Village	NC	Raleigh	315	87.6	%	$	363.99
Friendly Village	GA	Atlanta	203	94.6	%	$	400.73
Friendly Village – CO	CO	Greeley	226	98.2	%	$	364.12
Grand Place	TX	Dallas	334	93.7	%	$	374.27
Green Acres – CT	CT	New Haven	64	100.0	%	$	351.38
Green River Village	CA	Los Angeles	333	99.7	%	$	772.68
Greenbriar Village	PA	Allentown	319	98.7	%	$	393.11
Greenpark South	AL	Montgomery	421	90.7	%	$	293.18
Haselton Village	FL	Orlando	292	97.6	%	$	258.11
Hickory Knoll	IN	Indianapolis	325	91.4	%	$	357.47
Hidden Valley	FL	Orlando	303	99.7	%	$	361.83
Highland	CT	New Haven	50	90.0	%	$	364.14
Hillcrest	MA	Boston	83	96.4	%	$	387.56
Holiday Estates	MI	Grand Rapids	204	93.6	%	$	352.88
Hoosier Estates	IN	Indianapolis	288	97.2	%	$	213.68
Howell	MI	Lansing	455	89.7	%	$	420.01
Hunter Ridge	GA	Atlanta	838	82.1	%	$	355.50
Jurupa Hills	CA	Los Angeles	322	99.7	%	$	597.83
La Quinta Ridge	CA	Palm Springs	151	91.4	%	$	438.31
Lake in the Hills	MI	Detroit	238	95.8	%	$	431.48
Lakeland Harbor	FL	Tampa	504	99.8	%	$	282.15
Lakeland Junction	FL	Tampa	191	99.5	%	$	224.72
Lakes at Leesburg	FL	Orlando	640	99.7	%	$	294.31
Lakeside Terrace	FL	Orlando	241	97.9	%	$	233.99
Lakewood Estates IA	IA	Davenport	180	89.4	%	$	321.64
Lamplighter GA	GA	Atlanta	431	87.2	%	$	380.78
Land O’ Lakes	FL	Orlando	173	93.6	%	$	286.65
Landmark Village	GA	Atlanta	524	79.8	%	$	338.07
Leisurewoods Rockland	MA	Boston	394	98.5	%	$	364.08
Leisurewoods Taunton	MA	Boston	222	100.0	%	$	338.81
Longview – CO	CO	Longmont	400	99.0	%	$	432.75
Los Ranchos	CA	Los Angeles	389	75.1	%	$	365.99
Macomb	MI	Detroit	1,427	86.6	%	$	432.26
Maple Grove Estates	ID	Boise	270	92.6	%	$	357.92
Maple Valley	IL	Kankakee	276	98.6	%	$	311.94
Mariwood	IN	Indianapolis	296	88.5	%	$	343.37
Marnelle	GA	Atlanta	205	85.9	%	$	329.19
Meadow Park	ND	Fargo	117	94.0	%	$	248.82
Mountain View	NV	Las Vegas	349	100.0	%	$	550.91
North Bluff Estates	TX	Austin	274	95.3	%	$	368.33
Northwood	TX	Dallas	451	96.0	%	$	417.76
Novi	MI	Detroit	725	81.8	%	$	465.19
Oak Ridge	IN	South Bend	204	82.4	%	$	297.46
Oakhill	MI	Flint	504	80.8	%	$	401.56
Oakwood Forest	NC	Greensboro	482	72.2	%	$	304.42
Old Orchard	MI	Flint	200	99.0	%	$	372.57
Orange Lake	FL	Orlando	242	92.1	%	$	296.98

Community	State	Location (Closest Major City)	Total Number of Sites		Occupancy			Weighted Average Monthly Rent per Site

Palm Beach Colony	FL	West Palm Beach		285		94.4	%	$	337.67
Parkwood Communities	FL	Orlando		695		95.7	%	$	192.59
Pine Lakes Ranch	CO	Denver		762		96.7	%	$	423.83
Pinecrest Village	LA	Shreveport		446		76.2	%	$	186.17
Pinewood	MI	Columbus		380		85.3	%	$	341.34
Pleasant Ridge	MI	Lansing		305		57.0	%	$	253.91
President’s Park	ND	Grand Forks		174		84.5	%	$	281.04
Redwood Estates	CO	Denver		754		97.5	%	$	428.28
Regency Lakes	VA	Winchester		384		98.2	%	$	266.52
Riverdale(Colonial Coach)	GA	Atlanta		481		72.3	%	$	352.70
Rosemount Woods	MN	Minneapolis/St. Paul		182		97.8	%	$	442.30
Royal Estates	MI	Kalamazoo		183		85.8	%	$	360.06
Saddlebrook	SC	Charleston		425		93.4	%	$	253.85
Science City	MI	Midland		171		87.7	%	$	321.95
Shadow Hills	FL	Orlando		670		72.4	%	$	351.02
Shadowood	GA	Atlanta		506		82.8	%	$	362.36
Shady Lane	FL	Clearwater		108		90.7	%	$	301.60
Shady Oaks	FL	Clearwater		250		95.6	%	$	367.96
Shady Village	FL	Clearwater		156		96.2	%	$	348.63
Shenandoah Estates	ID	Boise		154		93.5	%	$	335.94
Shenandoah Village	NJ	Philadelphia		359		99.4	%	$	370.33
Skyway	IN	Indianapolis		156		93.6	%	$	343.42
Smokecreek	GA	Atlanta		264		83.3	%	$	351.02
Southwind Village	FL	Naples		337		95.8	%	$	363.87
Springbrook	MI	Utica		398		94.2	%	$	383.79
Starlight Ranch	FL	Orlando		783		95.0	%	$	344.72
Stone Mountain	GA	Atlanta		354		83.1	%	$	404.40
Stonegate Austin	TX	Austin		359		93.0	%	$	399.02
Stonegate Pines	TX	Dallas		160		92.5	%	$	340.36
Stonegate, LA	LA	Shreveport		157		93.0	%	$	208.82
Suburban Woods	GA	Atlanta		216		71.3	%	$	360.21
Sunny South Estates	FL	West Palm Beach		319		97.5	%	$	416.55
Swan Creek	MI	Ann Arbor		294		98.6	%	$	392.69
Tara Woods	FL	Tampa		531		99.2	%	$	358.36
Tarpon Glen	FL	Clearwater		170		87.1	%	$	331.65
Terrace Heights	IA	Dubuque		317		91.2	%	$	302.42
The Colony	CA	Palm Springs		220		97.3	%	$	650.20
The Glen	MA	Boston		36		100.0	%	$	459.00
The Orchard	CA	San Francisco		233		99.6	%	$	698.43
Tierra West	NM	Albuquerque		653		50.8	%	$	351.60
Twenty-Nine Pines	MN	St. Paul		152		90.1	%	$	354.85
Twin Pines	IN	Goshen		238		90.3	%	$	317.97
University Village	FL	Orlando		480		80.2	%	$	368.30
Valley Vista	MI	Grand Rapids		137		89.1	%	$	367.49
Villa	MI	Flint		319		76.5	%	$	372.14
Village Green	FL	Vero Beach		780		99.9	%	$	360.74
Westpark	AZ	Phoenix		183		90.7	%	$	369.20
Whispering Pines	FL	Clearwater		392		93.6	%	$	397.96
Woodlake	NC	Greensboro		308		73.4	%	$	280.26
Woodlands of Kennesaw	GA	Atlanta		273		80.6	%	$	397.99
Yorktowne	OH	Cincinnati		354		87.3	%	$	388.07

Subtotal stable portfolio		144		51,680		89.3	%	$	370.43

*Expansion*
Algoma Estates	MI	Grand Rapids		343		83.7	%	$	327.16
Broadmore	IN	South Bend		370		67.8	%	$	303.16
Butler Creek	GA	Augusta		376		57.7	%	$	211.61
Canterbury Estates	MI	Grand Rapids		290		61.4	%	$	271.85
Carnes Crossing	SC	Summerville		604		80.3	%	$	232.13
Conway Plantation	SC	Myrtle Beach		299		67.6	%	$	209.57
Cranberry Lake	MI	Pontiac		328		82.0	%	$	413.13

Community	State	Location (Closest Major City)	Total Number of Sites		Occupancy			Weighted Average Monthly Rent per Site

Crystal Lakes - Zephyrhills	FL	Tampa		330		64.2	%	$	177.03
Del Tura	FL	Fort Myers		1,344		88.6	%	$	476.12
Eagle Creek	TX	Tyler		194		81.4	%	$	190.97
Forest Lake Estates	MI	Grand Rapids		221		67.4	%	$	340.00
Foxwood Farms	FL	Orlando		375		80.8	%	$	257.95
Grand Blanc	MI	Flint		478		76.2	%	$	409.45
Hunter’s Chase	OH	Lima		135		68.1	%	$	189.26
Huron Estates	MI	Flint		111		83.8	%	$	242.01
Indian Rocks	FL	Clearwater		148		71.6	%	$	301.11
Lakewood - AL	AL	Montgomery		396		43.4	%	$	193.84
Leonard Gardens	MI	Grand Rapids		319		73.0	%	$	339.38
Midway Estates	FL	Vero Beach		204		60.8	%	$	374.62
Misty Winds	TX	Corpus Christi		354		84.5	%	$	296.42
Norton Shores	MI	Grand Rapids		656		76.1	%	$	301.31
Palm Valley	FL	Orlando		790		82.3	%	$	383.47
Pedaler’s Pond	FL	Orlando		214		81.8	%	$	242.06
Pinelake Gardens	FL	Vero Beach		532		87.4	%	$	348.44
Sherwood	IN	Marion		134		47.8	%	$	225.76
South Oaks	GA	Atlanta		294		46.3	%	$	111.04
Springfield Farms	MO	Springfield		290		55.5	%	$	202.84
The Highlands	MI	Flint		682		86.2	%	$	334.69
Timber Heights	MI	Flint		221		82.8	%	$	340.49
Torrey Hills	MI	Flint		377		85.4	%	$	366.47
Westbrook	MI	Detroit		388		90.2	%	$	431.14
Winter Haven Oaks	FL	Orlando		343		53.9	%	$	236.75
Yankee Springs	MI	Grand Rapids		284		76.4	%	$	286.23

Subtotal expansion portfolio		33		12,424		75.5	%	$	327.63

*Development*
Antelope Ridge	CO	Colorado Springs		246		39.0	%	$	342.49
Deerfield Manor	MI	Grand Rapids		96		42.7	%	$	263.29
Glenmoor	MI	Battle Creek		41		36.6	%	$	199.22
Harston Woods	TX	Fort Worth		145		19.3	%	$	236.14
Holly Hills	MI	Holly		174		50.6	%	$	211.98
Maple Run	MI	Clio		146		59.6	%	$	281.37
Oakley Point	SC	North Charleston		91		8.8	%	$	180.89
Onion Creek	TX	Austin		350		45.1	%	$	312.55
Pine Lakes	MI	Lapeer		136		62.5	%	$	342.87
Prairie Greens	CO	Denver		139		20.9	%	$	388.78
Wolf Creek	IA	Des Moines		80		6.3	%	$	220.94

Subtotal development portfolio		11		1,644		38.9	%	$	287.15

Subtotal		188		65,748		85.4	%	$	363.21

*Disposition*
Arbor Village	MI	Jackson		266		89.8	%	$	299.31
Breazeale	WY	Laramie		117		97.4	%	$	287.72
Chateau Jonesboro	GA	Atlanta		75		98.7	%	$	286.95
Crystal Lake - Pinellas	FL	St. Petersburg		166		86.7	%	$	300.95
Golden Valley	GA	Atlanta		131		69.5	%	$	327.43
Knoll Terrace	OR	Salem		212		85.4	%	$	414.27
Mosby’s Point	KY	Cincinnati		150		90.0	%	$	349.48
Orion	MI	Detroit		423		90.1	%	$	393.36
Pinellas Cascades	FL	Clearwater		238		89.9	%	$	416.49
Pooles Manor	GA	Atlanta		194		68.0	%	$	347.46
Riverview	OR	Portland		133		90.2	%	$	471.48
Vance	OH	Columbus		113		78.8	%	$	289.90

Subtotal disposition portfolio		12		2,218		86.3	%	$	361.82

Community

State

Location (Closest
Major City)

Total
Number
of Sites

Occupancy

Weighted
Average
Monthly Rent
per Site

Total portfolio

200

67,966

85.4

363.17

Item 6.	Exhibits and Reports on Form 8-K

	(a)	Exhibits and Index of Exhibits
		99.1 Certifications of Chief Executive Officer and Chief Financial Officer pursuant to §906 of The Sarbanes-Oxley Act of 2002.

	(b)	Reports on Form 8-K
		None.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, and in the capacities indicated, on the 13^th day of May, 2003.

	CP LIMITED PARTNERSHIP
	By:	CHATEAU COMMUNITIES, INC.

	By:	/s/ TAMARA D. FISCHER

		Tamara D. Fischer Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial and Accounting Officer)

Sarbanes-Oxley §302(a) Certification

I, Rees F. Davis, Jr., certify that:

1)	I have reviewed this quarterly report on Form 10-Q of CP Limited Partnership;

2)	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3)	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4)	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
	a.	Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
	b.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
	c.	Presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5)	The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
	a.	All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6)	The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weakness.

Date: May 13, 2003

	By:	/s/ REES F. DAVIS, JR.

	Name:	Rees F. Davis, Jr.
	Title:	Chief Executive Officer

Sarbanes-Oxley §302(a) Certification

I, Tamara D. Fischer, certify that:

1)	I have reviewed this quarterly report on Form 10-Q of CP Limited Partnership;

2)	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3)	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4)	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
	a.	Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
	b.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
	c.	Presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5)	The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
	a.	All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6)	The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weakness.

Date: May 13, 2003

	By:	/s/ TAMARA D. FISCHER

	Name:	Tamara D. Fischer
	Title:	Chief Financial Officer

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