10-K 1 d10k.txt FORM 10-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------- 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, 2001 or [ ] 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 (I.R.S. Employer incorporation) 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, 2001 TABLE OF CONTENTS -------- Item Pages -------- ---------- PART I 1. Business 3 2. Properties 6 3. Legal Proceedings 14 4. Submission of Matters to a Vote of Security Holders 15 PART II 5. Market for Registrant's Common Equity and Related Security Holder Matters 15 6. Selected Financial Data 16 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 17 7A. Quantitative and Qualitative Disclosures About Market Risk 26 8. Financial Statements and Supplementary Data 27 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 47 PART III 10. Directors and Executive Officers of the Registrant 47 11. Executive Compensation 47 12. Security Ownership of Certain Beneficial Owners and Management 47 13. Certain Relationships and Related Transactions 47 PART IV 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K 47 Signatures 52 PART I ITEM 1. BUSINESS ------- -------- GENERAL DEVELOPMENT OF BUSINESS CP Limited Partnership 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 the largest owner/manager of manufactured home communities in the United States. Chateau conducts substantially all of its activities through us, owns directly and through ROC Communities, Inc. ("ROC"), our other general partner, an approximate 83% general partner interest. We consider ourselves to be engaged in only one industry segment. We own and operate 217 manufactured home communities (the "Properties") containing 70,723 homesites and 1,359 park model/RV sites in 33 states. We also fee manage 38 manufactured home community properties containing 8,118 homesites. In addition, we are involved in the development and expansion of manufactured home communities, and through our 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 We were formed by Chateau, as a general partner, and Chateau Estates, as the initial 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, such as a garage, carport or storage unit. Modern manufactured home communities are similar to typical residential subdivisions and generally contain centralized entrances, paved streets, curbs, 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, shuffleboard, and tennis courts; picnic areas; 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 resident within the manufactured home community is responsible for the maintenance of his/her home and leased site. Additionally, manufactured home communities tend to have stable resident bases, with relatively few residents moving their 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. 3 OPERATING AND INVESTMENT STRATEGIES We seek to maximize long-term growth in income and portfolio value through active management and expansion of certain manufactured home communities and selective acquisition and development of additional communities. We focus on manufactured home communities that have growth potential and expect to hold such properties for long-term investment and capital appreciation. We have reviewed the focus of our basic property management activities to include: OPERATIONS * Collections * Budget control * Sales and marketing * Community appearance * Resident relations DEVELOPMENT, EXPANSION AND ACQUISITIONS * Utilizing the expertise and relationships developed by our management to identify acquisition and 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 FINANCING STRATEGIES We intend to maintain a conservative and flexible capital structure that enables us to (i) continue to access the capital markets on favorable terms; (ii) enhance potential earnings growth; (iii) minimize our level of encumbered assets; and (iv) limit our exposure to variable rate debt. We intend to maintain a debt-to-market capitalization ratio of approximately 50% or less. We will, however, re-evaluate this policy from time to imeand decrease or increase such ratio accordingly in light of then current economic conditions, relative costs to us of debt and equity capital, market values of the properties and other factors. During 2001, we made a significant acquisition of 46 communities for $552 million. In connection with this acquisition, we increased our leverage to just over fifty percent. Simultaneously, we announced a disposition strategy to identify non-core assets for disposition. The proceeds from the dispositions will be used to reduce our short-term debt issued in connection with the acquisition and ultimately to reduce our debt to market capitalization ratio. During 2001, we disposed of seven properties for an aggregate sales price of $42 million and reduced our debt to market capitalization ratio to 48 percent as of December 31, 2001. 4 To the extent we seek to obtain additional financing in the future, we may, depending on market conditions, do so through additional equity or debt financings. Equity financing may include issuance of common or preferred OP Units for cash. We may also issue our equity securities in exchange for property acquisitions. Debt financings are expected to involve the issuance of senior notes, additional mortgage financings and borrowings under existing or new revolving credit facilities. EXPANSION AND IMPROVEMENT OF MANUFACTURED HOME COMMUNITY PROPERTIES We will seek to increase the income generated from our 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. We are currently involved in expansion of our existing properties, as well as the development of our 14 greenfield developments. The majority of these greenfield properties are owned through joint ventures. During 2001, we substantially completed the development of approximately 350 sites. As of December 31, 2001, we owned undeveloped land adjacent to existing communities containing approximately 4,800 expansion sites, and greenfield developments which contain approximately 4,900 future sites, all of which are zoned for manufactured housing. The undeveloped land will facilitate additional growth to the extent market conditions warrant. 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. OTHER POLICIES We may, although we have no plans to do so, make acquisitions, investments and engage in development activities outside of the strategies described above. In connection with our joint venture investments, we may make loans to the joint ventures as part of the financing package. We may also invest in the securities of other issuers in connection with a proposed or contemplated acquisition. We will not engage in trading, underwriting or agency distribution of securities of other issuers. We have in the past and may in the future, depending on market conditions, repurchase our equity. At all times, we will seek to operate in a manner consistent with maintaining Chateau's REIT status. 2001 PROPERTY ACQUISITIONS During 2001, we purchased CWS Communities Trust ("CWS"), a private real estate investment trust for $552 million. The portfolio consisted of 46 manufactured home communities with approximately 16,600 homesites, approximately 1,500 expansion sites and three RV communities with 431 RV sites in 11 states. The properties are concentrated in Florida, Georgia and Texas. In addition to CWS, we also completed 3 acquisitions in Indiana, Georgia and Colorado for a total of 1,445 homesites and an aggregate purchase price of $43 million. 2001 PROPERTY DISPOSITIONS In the third quarter of 2001, we began implementing a disposition plan and started identifying a number of mature properties that no longer meet our portfolio objectives. As of December 31, 2001, we had sold 7 properties for approximately $42 million. The net proceeds from these sales, of approximately $37 million were used primarily to pay down the Acquisition Facility. These dispositions resulted in a net gain of $585,000. 5 SALES BROKERAGE AND FINANCE We conduct our sales and brokerage activities through our taxable subsidiary, Community Sales, Inc. ("CSI"). During 2001, CSI sold 684 new or pre-owned homes and brokered sales of 1,221 homes. CSI also has a financial services division, which arranges financing and insurance services for prospective residents and, on a limited basis, provides financing to residents. During 2001, the financial services division arranged financing on approximately 750 loans and provided financing on approximately 40 loans, including a balance of approximately $1.8 million. 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 our ability to lease sites at our 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, 2001, we had approximately 1,400 full and part-time employees. We utilize 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 our regional vice presidents and managers and four divisional presidents. These individuals have significant experience in addressing the needs of residents and are charged to find or create innovative approaches to value maximization and increasing cash flow from property operations. Approximately 90 corporate employees support on-site administrators in all property management functions, as well as divisional and regional property management staff. Commitment to resident satisfaction is demonstrated by ongoing training that we provide for all our employees. 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. ITEM 2. PROPERTIES ------- ---------- On December 31, 2001, we owned and operated 217 manufactured home communities containing 70,723 homesites and 1,359 park model/RV sites, in 33 states, with amenities designed for either retirement or family living. We also fee managed 38 manufactured home communities containing 8,118 sites in 14 states. In addition, we owned land adjacent to certain existing communities containing approximately 4,800 expansion sites, and greenfield developments with a potential of approximately 4,900 future sites, which, although not yet developed, are zoned for manufactured housing. 6 As of December 31, 2001, occupancy in our stabilized portfolio was 92.5 percent. The active expansion portfolio had occupancy of 79.5 percent, while our greenfield development portfolio had occupancy of 30.8 percent, for a total occupancy of 88.3 percent. On a per-site basis, weighted monthly rental revenue for the year ended December 31, 2001 was $331 compared with $316 for the same period in 2000, an increase of 4.6 percent. 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. We believe that our properties provide amenities and common facilities that create a safe and attractive community for residents. All of our properties provide residents with appealing amenities with most offering a clubhouse, a swimming pool and playgrounds. Many properties offer additional amenities such as jacuzzis, indoor pools, libraries, shuffleboard, basketball, and tennis 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 our role to maintain common areas, facilities and amenities and to ensure that residents comply with community guidelines. We hold periodic meetings of our property management team for training and implementation of our strategies. In addition, the property administrators are expected to make a daily inspection of their community. We believe that, due in part to this strategy, the Properties historically have had and will continue to have low turnover and high occupancy rates. LEASES The typical lease entered into between the resident and one of our 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 We classify all our properties in either the stable, greenfield development, or active expansion portfolio. The stable portfolio includes communities where we do not have, or have not recently had, expansion of the community. These communities normally have stable occupancy rates. The greenfield development portfolio includes properties where we are developing the community. The active expansion portfolio includes properties where we are currently, or have recently, expanded the community by adding homesites to the available homesites for rent. Generally, both the greenfield and the active expansion portfolios will have a lower occupancy rate than the stable portfolio, as they are in the lease-up phase. In addition, we own three park model/RV communities. The following table sets forth certain information, as of December 31, 2001, regarding our properties, excluding the three park model/RV communities. 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. This table excludes four of our greenfield properties, as there are currently no developed sites. 7

(a) These properties are included in our active expansion portfolio. (b) These properties are included in our greenfield development portfolio 13 The following table provides additional information for our top five properties, which together represent 13.8% of our total revenues for the year ended December 31, 2001. We do not have any current plans to dispose of any of these communities.

* The note that is secured by the mortgage on this property bears interest at a rate of 7.83% per annum and matures in 2010. Our policy is generally to add expansion sites to the extent that market conditions warrant. The cost of each site expansion varies depending on location and market conditions and generally range from $15,000 to $18,000 per site. We expect to fund the cost of our new site expansions for these properties out of our cash generated from operations, or borrowings from our line of credit. INDEBTEDNESS The following table sets forth certain information relating to secured and unsecured indebtness outstanding as of December 31, 2001.

In August 2001, we entered into a forward interest rate swap agreement to hedge the interest rate risk associated with the anticipated issuance of $150 million of fixed rate senior notes. The bonds were issued in October 2001. We entered into the swap to hedge movements in interest rates between the trade date on the swap and the date the bonds were issued. ITEM 3. LEGAL PROCEEDINGS None. 14 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. 15 ITEM 6. SELECTED FINANCIAL DATA The following table sets forth selected financial data and other data concerning CP Limited Partnership for each of the last five years.

/(1)/ August 2001, we purchased CWS for $552 million. /(2)/ Does not include park model/RV sites. /(3)/ 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 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; (iii) is not an alternative to cash flows as a measure of liquidity; and (iv) may not be comparable to similarly titled measures reported by other companies. FFO is calculated as follows: 16

NAREIT has revised its definition of FFO. We 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 our plans, objectives and expectations, which are dependent upon a number of factors, including site expansions, development, acquisitions, dispositions 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 us from achieving our objectives. OVERVIEW We added 19,622 manufactured home sites to our portfolio over the three-year period ended December 31, 2001. This includes acquisitions and dispositions of manufactured home communities, as well as our development activity. At the end of this period, our portfolio comprised 217 manufactured home communities containing 70,723 manufactured homesites and 1,359 park model/RV sites, located in 33 states. We also provide property management and advisory services to N'Tandem Trust ("N'Tandem"). N'Tandem owns 36 communities with an aggregate of 7,882 homesites. We own approximately ten percent of N'Tandem's outstanding equity and have made loans and advances to N'Tandem. We also conduct manufactured home sales and brokerage activities through our taxable subsidiary Community Sales, Inc. ("CSI"). In addition, effective January 1, 2001, we consolidated six development joint ventures that we control. The effects of consolidation were not material to our financial position or results of our operations. Company growth since the beginning of 1999 can be attributed to community acquisitions, increased operating performance at existing communities, community expansions, and new community development, offset somewhat by property dispositions. On August 1, 2001, we purchased CWS Communities Trust ("CWS"), a private real estate investment trust for approximately $552 million. The portfolio consisted of 46 manufactured home communities with approximately 16,600 homesites and approximately 1,500 expansion sites and three RV communities with 431 RV sites in 11 states. This transaction extended our leading position in the manufactured housing community sector, making us substantially larger than our next largest REIT competitor in that sector. 17 HISTORICAL RESULTS OF OPERATIONS Comparison of the year ended December 31, 2001 to the year ended December 31, 2000 The following table summarizes certain information relative to our properties, as of and for the years ended December 31, 2001 and 2000. We consider all communities owned by us at both January 1, 2000 and December 31, 2001, as the "Core 2000 Portfolio".

For the year ended December 31, 2001, net income was $36,118,000, a decrease of $12,604,000 from the year ended December 31, 2000. The decrease was due primarily to increased depreciation due to the acquisition of CWS. Rental revenue for the year ended December 31, 2001 was $224,431,000, an increase of $37,468,000 from 2000. Approximately 81 percent of the increase was due to acquisitions, net of dispositions, and 19 percent was due to rental increases in our Core 2000 Portfolio. As of December 31, 2001, occupancy in our stabilized portfolio, was 92.5 percent. The active expansion portfolio had occupancy of 79.5 percent, while our greenfield development portfolio had occupancy of 30.8 percent, for a total occupancy of 88.3 percent. On a per-site basis, weighted monthly rental revenue for the year ended December 31, 2001 was $331 compared with $316 for the same period in 2000, an increase of 4.6 percent. Management fee and other income primarily include management fee and transaction fee income for the management of 38 manufactured home communities and equity earnings from CSI. Property operating and maintenance expense for the year ended December 31, 2001 increased by $18,360,000 or 35.0 percent from the prior year. The majority of the increase was due to the acquisition of CWS, along with increased bad debt and collection costs of approximately $5,300,000 and operating expense increases in our Core 2000 Portfolio. The increase in bad debt expense was due to economic conditions as well as the implementation of our enterprise-wide technology solution. In many of our market areas the economic conditions have created a more difficult than normal collections environment, which has significantly impacted the cost of collections, as well the overall ability to collect past due amounts. In addition, difficulties encountered related to the implementation and utilization of our enterprise-wide technology solution, which was initiated in the last quarter of 2000, was also a factor in the unusually high expense recognized in 2001. 18 The majority of problems were isolated to less than 10 percent of our communities, and we are working diligently to bring the collections performance of these locations in line with the rest of the portfolio. Although we believe that these issues have been substantially resolved, we will continue to monitor the collections performance of each community as well as to improve operational processes to ensure timely billing and collection of delinquent accounts. Real estate taxes for the year ended December 31, 2001 increased by $2,276,000 or 17.0 percent from the year ended December 31, 2000. The increase is due primarily to acquisitions, expansion of communities, and increases in property tax rates. On a per site basis, monthly weighted average real estate taxes were $24.10 in 2001 compared to $23.57 in 2000. Real estate taxes may increase or decrease due to inflation, expansion and improvement of communities, as well as changes in taxation in the tax jurisdictions in which we operate. Administrative expense in 2001 was 4.1 percent of total revenues as compared to 4.8 percent in 2000. Interest and related amortization costs increased for the year ended December 31, 2001 by $11,218,000, as compared with the year ended December 31, 2000. The increase is attributed primarily to the indebtedness incurred to finance acquisitions and lending activities. Interest expense as a percentage of average debt outstanding decreased to approximately 6.8 percent in 2001 from 7.3 percent in 2000, due to lower interest rates, and greater amounts of variable rate debt. Depreciation expense for the year ended December 31, 2001 increased $13,999,000 from the same period a year ago. The increase is directly attributed to acquisitions, expansions, and additions of rental property. Depreciation expense as a percentage of average depreciable rental property in 2001 remained relatively unchanged from 2000. Comparison of the year ended December 31, 2000 to the year ended December 31, 1999 The following table summarizes certain information relative to our properties, as of and for the years ended December 31, 2000 and 1999. We consider all communities owned by us at both January 1, 1999 and December 31, 2000 as the "Core 1999 Portfolio".

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 our 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 our Core 1999 Portfolio. 19 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 we do not have or have not recently had, expansion of the community) was 94.7 percent as of December 31, 2000. We also added 275 available sites to our portfolio through expansion of our 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. 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 interest income and management fee and other income is approximately $3.2 million of interest and related fees, from N'Tandem. Property operating and maintenance expense for the year ended December 31, 2000 increased by $1,913,000 or 3.8 percent from the prior year. The majority of the increase was due to operating expense increases in our 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 we operate. Administrative expense in 2000 was 4.8 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 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. LIQUIDITY AND CAPITAL RESOURCES Net cash provided by operating activities was $88.9 million for the year ended December 31, 2001, compared to $85.0 million for the same period in 2000. The increase in cash provided by operating activities was due primarily to increases in net operating income, offset by the changes in operating assets and liabilities. Net cash used in investing activities for the year ended December 31, 2001 was $371.1 million. In 2001, we purchased CWS Communities Trust ("CWS"), a private real estate investment trust for a net amount of approximately $320 million and three additional communities for $22.2 million in cash. We also sold seven properties and received net proceeds of $36.7 million in the latter part of 2001. Total investments in development, expansion, and property and equipment were $40.9 million in 2001 and we advanced $12.1 million on our notes receivables. 20 On August 3, 2001 we purchased CWS for $552 million, consisting of $323 million borrowed under a bridge facility, $151 million in assumed liabilities, 2,040,878 OP Units (valued for purposes of the transaction at $30.935 per OP Unit) and $9.9 million in 7.5% Senior Unsecured Notes due 2012 (the "August 2012 Notes"). The portfolio consisted of 46 manufactured home communities with approximately 16,600 homesites and approximately 1,500 expansion sites and three RV communities with 431 RV sites in 11 states. We financed the cash portion of this transaction primarily through borrowings of a $323 million bridge facility (the "Acquisition Facility"), which carries an interest rate of LIBOR plus 150 basis points, and matures August 2, 2002. In connection with this transaction, we agreed to issue in a private placement to the holders of the August 2012 Notes, an aggregate of 309,371 OP Units at $30.935 per OP Unit, in exchange for the issuance by such holders of 7.5% notes, due August 2010, subject to extension in certain events. These notes are collateralized by the related OP Units. We also acquired three other communities in 2001 for approximately $10 million in OP units and approximately $22 million in cash, which were financed primarily by borrowings under our lines of credit. During 2001, we invested approximately $26 million in the expansion and development of our communities; resulting in the addition of approximately 350 available sites to our portfolio in 2002, and including finish costs on sites added previously and substantial progress on sites that will be added to our portfolio in 2002. For the year ended December 31, 2001, recurring property capital expenditures, other than development costs, were approximately $7.2 million. Capital expenditures have historically been financed out of operating cash flow and it is our intention that such future expenditures will also be financed out of operating cash flow. In addition, during 2001, we advanced $12 million to non-affiliated entities that own or are developing manufactured home communities. Net cash provided by financing activities for the year ended December 31, 2001 was $282.1 million. This consisted primarily of the issuance of $150 million of debt and net borrowings under our Credit Facilities and the Acquisition Facility of $213.1 million. These were offset partially by $72.7 million in distributions paid to OP Unitholders. On October 23, 2001, we issued $150 million of 7.125% Senior Unsecured Notes, due 2011 in a private placement. Net proceeds of $148.3 million were used to repay a portion of the outstanding indebtedness under the Acquisition Facility. In connection with the private placement, we entered into a hedge of forecasted interest payments. We recorded a hedge loss of approximately $7.1 million in other comprehensive income, which is included in the General Partner's caption of the consolidated balance sheet and will amortize this into interest expense over the life of the debt. In October 2001, we extended $50 million of our $70 million 7.54% senior unsecured notes scheduled to mature in November 2003 to October 2021 at 8.3%. In addition to the Acquisition Facility, we have a $125 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 our option, LIBOR plus 90 basis points. The line is scheduled to mature in 2004. In addition, we have 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 March 2002, which is under discussion for an extension, (the "US Bank Facility" and, together with the BankOne Credit Facility the "Credit Facilities"). As of December 31, 2001, approximately $125.1 million was outstanding under our Credit Facilities and we had $7.4 million available in additional borrowing capacity. 21 As of December 31, 2001, we had outstanding, in addition to the Credit Facilities, $470.0 million of unsecured senior debt with a weighted average interest rate and remaining maturity of 7.5 percent and 6.9 years, respectively, $285.6 million of secured mortgage debt with a weighted average interest rate and remaining maturity of 7.6 percent and 7.5 years, respectively, and $163 million on our Acquisition Facility with an interest rate of 3.6 percent. As of December 31, 2001, we had approximately $1.1 billion of total debt outstanding, representing approximately 48.4 percent of our total market capitalization. All of the debt is fixed rate debt, other than our Credit Facilities and Acquisition Facility. The fixed rate debt carries a weighted average interest rate of 7.5 percent. In the third quarter of 2001, we began implementing a disposition plan, identifying a number of properties that do not fit strategically with our overall investment portfolio, due to location, proximity to other properties, alternative investment opportunities or other factors. As of December 31, 2001, we had sold seven properties for approximately $42 million. The net proceeds from these sales, of approximately $37 million were used primarily to pay down the Acquisition Facility. Due to the timing of these sales, approximately $11 million was received in January of 2002. Since December 31, 2001, we have sold an additional three properties for approximately $6.2 million. The net proceeds were used to pay down the Acquisition Facility. As of March 15, 2002, we had $145.8 million outstanding under the Acquisition Facility and $22.4 million available under our Credit Facilities. We will continue to evaluate our properties and, depending on market conditions, expect to sell additional communities in 2002. We expect to re-pay the balance of the Acquisition Facility, which matures in August of 2002, depending on current market conditions and capital availability factors, with proceeds from the disposition of properties, and the issuance of additional debt or equity securities. Our principal long term liquidity needs include: repayment of long-term borrowings and amounts outstanding under the Credit Facilities and the Acquisition Facility, future acquisitions of communities and land for development, and new and existing community development activities. We do not expect to generate sufficient funds from operations to finance these long-term liquidity needs and instead intend to meet our 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. We expect to meet our short-term liquidity requirements, including expansion activities and capital expenditure requirements, through cash flow from operations and, if necessary, and depending on our operating performance, borrowings under the Credit Facilities and other lines of credit. The following is a summary of our aggregate commitments, in millions, as of December 31, 2001:

(1) These guarantees expire at various times. 22 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. We were out of compliance on one of our covenants as of December 31, 2001 associated with both our BankOne Credit Facility and the Acquisition Facility. Also, in February 2002, we were out of compliance on another of our covenants under both agreements that limit the amount of variable rate debt outstanding. In February 2002, we received waivers from the lenders and amended the agreements to change the covenant for the remaining term of the Acquisition Facility and until March 2003 for the Credit Facility. In March 2002, Moody's Investor Service lowered our debt rating to Baa3 from Baa2. The reason for the change was due to a weaker capital structure and coverage ratios since completing the CWS acquisition. Standard and Poors has not changed its rating of BBB. In the event that our debt rating is lowered again, it may have an impact on the cost of our debt. We currently own approximately 10 percent of N'Tandem's outstanding stock and account for our investment utilizing the equity method of accounting. We also recognize income from a property management agreement, an advisory agreement, overhead reimbursements and interest income on advances as earned. The amount of fee income and interest income earned is outlined in the table below.

Interest is earned on the loan to N'Tandem (Prime plus one percent, or 5.75 percent at December 31, 2001) and includes fees paid by N'Tandem for the subordination of our loan to the N'Tandem bank debt ($730,000 in both 2001 and 2000). The transaction fees are related to acquisition services provided by us to N'Tandem and are calculated as three percent of the acquisition price. 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 are based on a fixed fee per site. We expect to receive modest increases on the recurring fees due to increases in expected revenues and sites. However, as the non-recurring fees are subject to the completion of a transaction, these are difficult to predict. N'Tandem currently has net losses of approximately $8 million for the year ended December 31, 2001 and also has experienced negative cash flows from operations. We serve as a guarantor on N'Tandem's $20 million line of credit. We do not have any agreements to fund future operating losses of N'Tandem, however our ability to recover our fees charged to N'Tandem and our loans and advances to N'Tandem is dependent on the ultimate sale of the N'Tandem properties. N'Tandem will likely continue to generate negative cash flow from operations in the near term. We believe that based on current market conditions the loans and advances to N'Tandem, which totaled approximately $33 million at December 31, 2001, will be recovered from the ultimate sale of the properties. 23 The following table summarizes certain financial information for N'Tandem for the years ending December 31, 2001 and 2000. 2001 2000 ---------------------------------- Total revenues $ 23,066 $ 10,487 Operating and administrative expenses 14,103 5,986 Interest expense 11,744 7,287 Depreciation expense 5,555 2,623 Preferred dividends 110 110 ---------------------------------- Net loss $ (8,446) $ (5,519) ================================== Rental property $ 128,941 $ 127,291 Total assets $ 134,009 $ 132,678 Amounts due to the Company $ 33,348 $ 32,120 Other debt $ 109,675 $ 102,216 Shareholders' deficit $ (27,892) $ (10,474) Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with generally accepted accounting principles, which requires us to make certain estimates and assumptions. A summary of our significant accounting policies is provided in Note 2 to our consolidated financial statements. The following section is a summary of certain aspects of those accounting policies that both require our most difficult, subjective or complex judgments and are most important to the portrayal of our financial condition and results of operations. We believe that there is a low probability that the use of different estimates or assumptions in making these judgments would result in materially different amounts being reported on our consolidated financial statements. . When we acquire real estate properties, we allocate the components of these acquisitions using relative fair values computed using our estimates and assumptions. These estimates and assumptions impact the amount of costs allocated between land and different categories of land improvements as well as the amount of costs assigned to individual properties in multiple property acquisitions. These allocations also impact depreciation expense and gains or losses recorded on future sales of properties. . We recognize an impairment loss on a real estate asset to be held and used in operations if the asset's undiscounted expected future cash flows are less than its depreciated cost. We compute a real estate assets undiscounted expected future cash flow using certain estimates and assumptions. . We use two different accounting methods to report our investments in entities: the consolidation method and the equity method. We use the consolidation method when we own most of the outstanding voting interests in an entity and/or can control its operations. We use the equity method of accounting when we own an interest in an entity and can exert significant influence over the entity's operations but cannot control the entity's operations. We review these investments regularly for possible impairment using certain estimates and assumptions regarding undiscounted expected future cash flows. We also review these investments regularly for proper accounting treatment. However, a key factor in this review, the determination of whether or not we can control or exert significant influence over an entity's operations, is subjective in nature. . We report receivables net of an allowance for receivables that may be uncollectible in the future. We review our receivables regularly for potential collection problems in computing the allowance recorded against our receivables; this review process requires we make certain judgments regarding collections that are inherently difficult to predict. 24 . Collectibility of advances to N'Tandem and other Notes Receivable is based on the determination of the fair market value of the properties and the related net proceeds from the ultimate liquidation of the properties. 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 us to seek market rentals upon reletting the sites. Such leases generally minimize the risk to us of any adverse effect of inflation. RECENTLY ISSUED ACCOUNTING STANDARDS In June 2001, the FASB issued SFAS No. 141, Business Combinations and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 141 requires all business combinations to be accounted for by the purchase method and defines criteria under which intangible assets acquired in connection with a business combination be recognized as assets apart from goodwill. SFAS No. 141 is effective for all fiscal business combinations initiated after June 30, 2001. SFAS No. 142 changes the useful life of goodwill recorded on a company's books from 40 years to indefinite and requires goodwill to be reviewed annually for impairment. SFAS No. 142 is effective for all fiscal years beginning after December 15, 2001. Adoption of SFAS No. 141 and No. 142 did not have and is not expected to have a significant impact on the Company's financial position or results of operations. In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment on Disposal of Long-Lived Assets. SFAS No. 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets and provides guidance for measuring the amount of impairment. SFAS No. 144 is effective for fiscal years beginning after December 15, 2001. As individual properties to be sold qualify as components of an entity, properties classified as held for sale or sold in a reporting period will be treated as discontinued operations for reporting purposes. The statement of income will reflect the properties' results of operations, including any gains or losses recognized, as a separate component in the income statement. 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 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; (iii) is not an alternative to cash flows as a measure of liquidity; and (iv) may not be comparable to similarly titled measures reported by other companies. FFO is calculated as follows: 25 For the Year Ended December 31, (In thousands) 2001 2000 1999 ---------- ---------- ----------- Net income $ 36,118 $ 48,722 $ 44,962 Less: Income allocated to Preferred OP Units 6,094 6,094 6,094 Plus: Depreciation of rental property 56,804 43,289 41,161 Amortization of intangibles - - 405 Impairment / (gain) on sales of properties 1,503 - (2,805) ---------- ---------- ----------- Funds from operations $ 88,331 $ 85,917 $ 77,629 ========== ========== =========== ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ------- ---------------------------------------------------------- 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 December 31, 2001, our Credit and Acquisition Facilities represented our only variable rate debt. The following table sets forth information as of December 31, 2001, concerning our debt obligations, including principal cash flows by scheduled maturity, weighted average interest rates and estimated fair value ("FV"):

We face market risk relating to our 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 our successful re-financing and extension of our fixed-rate debt, as illustrated in the above chart, we will not need to re-finance any of our fixed-rate debt until 2003. Our Acquisition Facility matures in August of 2002. We expect to re-pay the balance, depending on current market conditions and capital availability factors, with proceeds from the disposition of properties, a bank term loan, or the issuance of additional debt or equity securities. 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 $2.9 million increase in interest expense based on $287.8 million of variable rate debt outstanding at December 31, 2001. The fair value of our long-term debt is estimated based on discounted cash flows at interest rates that management believes reflect the risks associated with long term debt of similar risk and duration. 26 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 CP Limited Partnership (the "Company") at December 31, 2001 and 2000, and the results of its operations and its cash flows for the three years then ended, 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 Company 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 misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. /s/ PricewaterhouseCoopers LLP Denver, Colorado February 27, 2002 27 CP LIMITED PARTNERSHIP CONSOLIDATED STATEMENTS OF INCOME

The accompanying notes are an integral part of the financial statements. 28 CP LIMITED PARTNERSHIP CONSOLIDATED BALANCE SHEETS

The accompanying notes are an integral part of the financial statements. 29 CP LIMITED PARTNERSHIP CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL Dollars in thousands, except per OP Unit data

The accompanying notes are an integral part of the financial statements. 30 CP LIMITED PARTNERSHIP CONSOLIDATED STATEMENTS OF CASH FLOWS

The accompanying notes are an integral part of the financial statements. 31 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. 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, 2001, the Company owned 217 properties containing an aggregate of 70,723 homesites and 1,359 park model/RV sites, located in 33 states. Approximately 28 percent of these homesites were in Florida, 24 percent were in Michigan, and 10 percent were in Georgia. The Company also fee managed 38 properties containing an aggregate of 8,118 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 or less. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: ------------------------------------------ Basis of Presentation The accompanying consolidated financial statements include all accounts of the Company, and its subsidiaries. Chateau and ROC Communities, Inc. are general partners. As of December 21, 2001, Chateau owned on a combined basis, an 83 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, 2001 is identical to the accompanying balance sheet of the Company, except as follows:

All significant inter-entity balances and transactions have been eliminated in consolidation. The Company conducts manufactured home sales and brokerage activities through its taxable service corporation, Community Sales, Inc. ("CSI"). The Company owns 100% of the preferred stock of CSI and is entitled to 100% of its cash flow and economics. 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 CSI. Equity earnings or losses are recorded as management fee and other income in the accompanying statements of income. 32 CP LIMITED PARTNERSHIP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED -------------------------------------------------------------------------------- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates may 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. 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. 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. In the event that facts and circumstances indicate that the carrying amounts of rental property may be impaired, an evaluation of recoverability would be performed. If an evaluation were required, the estimated future undiscounted cash flows associated with the asset would be compared to the asset's carrying amount to determine if a write down is required. If this review indicates that the assets will not be recoverable, the carrying value of the Company's assets would be reduced to their estimated market value. Rental Property Held for Sale Assets held for sale are carried at the lower of book value or fair value less costs to sell the assets. During the fourth quarter of 2001, the Company identified four communities for disposition and as such, reclassified these assets from rental property to rental property held for sale. As a result, the Company evaluated its carrying value of these assets, and recognized an asset impairment charge of approximately $2.1 million. These charges have been included in the Company's accompanying consolidated statements of income. 33 CP LIMITED PARTNERSHIP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED -------------------------------------------------------------------------------- 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:

Maintenance, repairs, and minor improvements to rental properties are expensed when incurred. Major improvements and renewals are capitalized and depreciated over their estimated useful lives. 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, 2001, 2000, and 1999, was $4,368,000, $1,646,000, and $1,249,000, respectively. Cash Equivalents All highly liquid investments with an initial maturity of three months or less are considered to be cash equivalents. Debt Issuance Costs Costs incurred to obtain financing 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, 2001 and 2000. The fair value of the Company's debt at December 31, 2001 and 2000 was estimated to be $1.1 billion and $533 million, respectively, based on current interest rates for comparable loans. Stock Options As the Company is a consolidated subsidiary of Chateau, Chateau has granted stock options to employees of the consolidated group and Chateau has applied Accounting Principles Board Opinion No. 25 ("APB 25"), Accounting for Stock Issued to Employees, the Company is also permitted to and has also elected to apply APB 25 and its related Interpretations. As the exercise price of stock options granted equals the fair market value of the underlying Chateau stock at the date of grant, no compensation expense is recorded in the Company's financial statements related to stock options grants. 34 CP LIMITED PARTNERSHIP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED -------------------------------------------------------------------------------- Derivatives The Company adopted SFAS No. 133, "Accounting for Derivative Instruments and for Hedging Activities," as amended by SFAS No. 138, on January 1, 2001. SFAS No. 133 provides comprehensive guidelines for the recognition and measurement of derivatives and hedging activities and, specifically, requires all derivatives to be recorded on the balance sheet at fair value as an asset or liability, with an offset to accumulated other comprehensive income or income. Upon adoption of SFAS No. 138, the Company recorded a transition adjustment of $658,000 as a cumulative effect to accumulated other comprehensive income, which is included in the general partner's caption of the Consolidated Balance Sheets. The cumulative effect adjustment relates to net deferred gains on prior hedges of anticipated refinancing of debt which had been completed at the date of adoption. The amount in the accumulated other comprehensive income account will be amortized over the remaining life of the related debt instruments. In assessing the fair value of its financial instruments, both derivative and non-derivative, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each balance sheet date. Primarily, the Company uses quoted market prices or quotes from brokers or dealers for the same or similar instruments. These values represent a general approximation of possible value and may never actually be realized." Recently Issued Accounting Standards In June 2001, the FASB issued SFAS No. 141, Business Combinations and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 141 requires all business combinations to be accounted for by the purchase method and defines criteria under which intangible assets acquired in connection with a business combination be recognized as assets apart from goodwill. SFAS No. 141 is effective for all fiscal business combinations initiated after June 30, 2001. SFAS No. 142 changes the useful life of goodwill recorded on a company's books to an indefinite life and requires goodwill to be reviewed annually for impairment. SFAS No. 142 is effective for all fiscal years beginning after December 15, 2001. Adoption of SFAS No. 141 and No. 142 did not have and is not expected to have a significant impact on the Company's financial position or results of operations. In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment on Disposal of Long-Lived Assets. SFAS No. 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets and provides guidance for measuring the amount of impairment. SFAS No. 144 is effective for fiscal years beginning after December 15, 2001. As individual properties to be sold qualify as components of an entity, properties classified as held for sale or sold in a reporting period will be treated as discontinued operations for reporting purposes. The statements of income will reflect the properties' results of operations, including any gains or losses recognized, as a separate component in the income statement. 35 CP LIMITED PARTNERSHIP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED -------------------------------------------------------------------------------- 3. ACQUISITIONS AND DISPOSITIONS OF RENTAL PROPERTY: ------------------------------------------------- ACQUISITION OF CWS On August 3, 2001 the Company purchased CWS Communities Trust ("CWS"), a private real estate investment trust for $552 million, consisting of $323 million in cash (including the payoff of $20 million in debt), $151 million in assumed liabilities, 2,040,878 OP Units (valued for purposes of the transaction at $30.935 per OP Unit) and $9.9 million in 7.5% Unsecured Installment Notes due 2012 (the "7.5% Notes"). The portfolio consisted of 46 manufactured home communities with approximately 16,600 homesites and 1,518 expansion sites and three RV communities with 431 RV sites in 11 states. The Company financed the cash portion of this transaction primarily through borrowings on a $323 million bridge facility (the "Acquisition Facility"), which carries an interest rate of LIBOR plus 120 basis points, and matures August 2, 2002. In connection with the CWS acquisition, the following related transactions occurred: . As of August 2, 2001, certain limited partners in the CWS operating partnership amended their $26 million loans and agreed to, among other things, replace the collateral with a proportionate amount of OP Units, provide for an initial purchase price for such OP Units subject to our repurchase option at $27.17 per OP Units, eliminate our right to exercise this repurchase option in the event of a prepayment of these loans in full prior to January 1, 2003 and lower the exercise price of this repurchase option in the event that certain distributions are made to the borrowers. The maturity dates of these loans range between June 14, 2009 and September 26, 2010. These loans bear initial interest rates of 6.25% or 6.5%, increasing at increments of 25 basis points on each anniversary of each loan, but not to exceed 7.5%, and are included in Investment in and advances to affiliates in the accompanying consolidated balance sheets as of December 31, 2001. . The Company agreed to issue to the holders of the 7.5% Notes, an aggregate of 309,371 OP Units, for an aggregate purchase price of approximately $9.6 million paid to the Company through the issuance of 7.5% promissory notes due 2010 secured by the OP Units held by the obligor. As of December 31, 2001, the Company has issued $9,570,000 of such notes/OP Units and the notes are included in Investment in and advances to affiliates in the accompanying consolidated balance sheet as of December 31, 2001. The total CWS purchase price and liabilities assumed was allocated as follows: Rental property $ 519,691 Net working capital 32,299 ------------------------ $ 551,990 ======================== 36 CP LIMITED PARTNERSHIP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED -------------------------------------------------------------------------------- The following unaudited pro forma income statement information has been prepared as if the CWS Acquisition and related transactions had occurred on January 1, 2000. In addition, the pro forma information is presented as if the acquisition of eight properties made in 2000 by CWS and the disposition of certain CWS properties by the Company in 2001 had occurred on January 1, 2000. The pro forma income statement information is not necessarily indicative of the results that actually would have occurred if the CWS acquisition had been consummated on January 1, 2000. (in thousands, except per OP Unit data)

______________________ *Includes depreciation of $69,639 and $64,688 for the year ended December 31, 2001 and 2000, respectively. **After impairment/gain on sale of properties and allocation to Preferred OP Units. OTHER ACQUISITIONS The following table summarizes acquisitions, other than CWS, made by the Company: (Dollars in thousands)

(1) The cash used to finance the Company's acquisitions was provided by borrowings on the line of credit. (2) The Company purchased the remaining interests in the joint venture, including a note receivable to the Company. 37 CP LIMITED PARTNERSHIP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED -------------------------------------------------------------------------------- DISPOSITIONS In the third quarter of 2001, the Company began implementing a plan to sell a number of mature properties that no longer meets its portfolio objectives. As of December 31, 2001, the Company had sold 7 properties for approximately $42 million. The net proceeds from these sales, approximately $37 million, were used primarily to pay down the Acquisition Facility. Due to the timing of these sales, approximately $11 million was received in January of 2002. The Company will continue to evaluate its properties and, depending on market conditions, expects to sell additional communities in 2002. In 1999, the Company disposed of two communities, with 509 homesites, for a net amount of $11.7 million, resulting in a gain of $2.8 million. 4. Notes Receivable ---------------- Notes receivable are from entities that are not affiliated with the Company and all own, or are developing, manufactured home communities. These notes are collateralized by manufactured home communities or by partnership interests in partnerships that own manufactured home communities. These notes have a weighted average interest rate of 10.9% and mature between 2002 and 2022. Management has evaluated the collectibility of these notes and has determined that no valuation allowance is necessary. 5. Investments in and Advances to Affiliates ----------------------------------------- Investments in and advances to affiliates as of December 31, consisted of the following:

CSI --- Advances to CSI are primarily used to finance inventory purchases. These advances have an interest rate of prime plus 1% (5.75 percent as of December 31, 2001). N'Tandem -------- The Company currently owns approximately 10 percent of N'Tandem's outstanding equity, wholly owns N'Tandem's external advisor and provides management and other services to N'Tandem for a fee. As such, the Company possesses significant influence over the operating and financial decisions of N'Tandem, and accordingly, accounts for its investment in N'Tandem 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, as more fully outlined in Note 11. The Company has loaned N'Tandem approximately $27 million and advanced an additional $6 million over the past several years. The loan is due December 2002, is unsecured and bears interest at the prime rate of interest plus one percent per annum. As of December 31, 2001, N'Tandem owned 36 communities with 7,882 homesites. 38 CP LIMITED PARTNERSHIP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED -------------------------------------------------------------------------------- Notes Receivable - OP Unitholders --------------------------------- These notes are loans to former CWS shareholders of $26 million (the "$26 Million Notes") and promissory notes of $9.6 million (the "$9.6 Million Notes") (see note 3). The collateral for the loans are the OP Units held by the former CWS shareholders. The loan agreements provide for principal payment of the loans through the use of the collateral or cash. Interest on the $26 Million Notes are payable quarterly at an annual rate of 6%, increasing by one-quarter of one percent on each anniversary date of the loan agreement up to a maximum of 8.25% and 7.5% on the $9.6 Million Notes. The Company earned $793,000 of interest income for these notes in 2001. 6. FINANCING: --------- The following table sets forth certain information regarding debt at December 31:

At December 31, 2001, the Company had a $125 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 90 basis points (2.77 percent at December 31, 2001). The line is scheduled to mature in 2004. 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 (3.12 percent at December 31, 2001), which matures in March 2002. As of December 31, 2001, approximately $125.1 million was outstanding under the Company's lines of credit and the Company had available $7.4 million in additional borrowing capacity. 39 CP LIMITED PARTNERSHIP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED -------------------------------------------------------------------------------- The following table summarizes significant debt issuances and the related use of proceeds made during the year ended December 31, 2001 and 2000:

In connection with the debt issuance of $150 million, the Company entered into a hedge of forecasted interest payments. At the time of closing, there was an accumulated hedge loss of $7.1 million that was recorded in accumulated other comprehensive income which is included in the general partner's caption of the consolidated balance sheet and which will be amortized over the life of the debt. The Company has $100 million 6.92% MandatOry Par Put Remarketed Securities(sm) ("MOPPRS(sm)") 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 MOPPRS(sm), the interest rate to the December 10, 2014 maturity date of the MOPPRS(sm) 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 MOPPRS(sm), the MOPPRS(sm) will mature in 2004. As of December 31, 2001 the Company has a total of 36 collateralized properties. The financing arrangements contain customary covenants, including a debt service coverage ratio and a restriction on the incurrence of additional collateralized or variable rate indebtedness without a corresponding increase in rental property. The Company was out of compliance on one of its covenants as of December 31, 2001 associated with both its BankOne Credit Facility and the Acquisition Facility. Also, in February 2002, the Company was out of compliance on another covenant under both agreements that limit the amount of variable rate debt outstanding. In February 2002, the Company received waivers from the lenders and amended the agreements to change the covenants for the remaining term of the Acquisition facility and until March 2003 for the Credit Facility. The Acquisition Facility matures in August of 2002. The Company expects to re-pay the balance, depending on current market conditions and capital availability factors, with proceeds from the disposition of properties, a bank term loan, or the issuance of additional debt or equity securities. The aggregate amount of principal maturities for the fixed rate debt, including the Unsecured Senior Notes and Unsecured Installment Notes, subsequent to December 31, 2001 (in thousands) is as follows: 2002 $ 5,617 2003 76,177 2004 113,894 2005 109,615 2006 11,644 Thereafter 448,645 ------------------- $ 765,592 =================== 40 CP LIMITED PARTNERSHIP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED -------------------------------------------------------------------------------- 7. CAPITAL TRANSACTIONS: -------------------- The following table represents the changes in the Company's outstanding OP Units for the years ended December 31, 2001, 2000, and 1999 (in thousands).

The Company paid a distribution of $.545 per OP Unit on April 16, 2001; July 16, 2001; October 15, 2001 and December 31, 2001 to OP Unitholders of record as of March 30, 2001; June 29, 2001; September 30, 2001 and December 15, 2001, respectively. 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 OP Unitholders of record as of March 31, 2000; June 30, 2000; September 30, 2000 and December 15, 2000, respectively. In 2000, Chateau repurchased 453,900 shares for approximately $11.3 million. 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. Basic and diluted earnings per common OP Unit are summarized in the table below:

41 CP LIMITED PARTNERSHIP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED -------------------------------------------------------------------------------- 8. COMPREHENSIVE INCOME: -------------------- In August 2001, the Company entered into a forward interest rate swap agreement to hedge the anticipated issuance of $150 million of senior notes, which were issued pursuant to a debt issuance in October 2001. The purpose of the swap was to hedge future interest rate payments on the fixed rate bonds to be issued. This swap is accounted for as a cash flow hedge, in accordance with SFAS No. 133. In accordance with SFAS No. 133, the Company recorded a loss on the swap of approximately $7.1 million as of the date of the debt issuance in other comprehensive income, which is included in the general partner's caption of the Consolidated Balance Sheet. Under SFAS No. 133, the Company began amortizing the amounts in other comprehensive income related to this hedge once the debt was issued. Total comprehensive income for the year ended December 31, 2001 is summarized as follows (in thousands): Net income $ 36,118 Cumulative effect of adoption of SFAS 133 658 Net amortization of hedge loss and transition adjustment 143 Accumulated hedge loss on bond issue and other (7,317 ) ---------------- Total comprehensive income $ 29,602 ================

9. STOCK OPTION PLANS: ------------------ The Company is a consolidated subsidiary of Chateau and employs all personnel on behalf of Chateau. Chateau has granted certain employees of the Company stock options, which, if exercised, will allow employees to acquire common stock in Chateau, and result in the issuance by the Company of OP Units to Chateau as general partner. Chateau's equity compensation plans, (collectively, the "Plans") provide for the grant of approximately 3.6 million options and restricted stock awards. The compensation committee of the Board of Directors approves the awards and determines the vesting schedule of each option and the term, which term shall not exceed ten years from the date of grant. During 2001, Chateau's Board of Directors approved the 2001 Equity Compensation Plan and the CWS Equity Compensation Plan, which provides for up to 500,000 and 55,000, shares of Chateau's common stock, respectively, that may be granted to key employees other than directors and executive officers. 42 CP LIMITED PARTNERSHIP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED -------------------------------------------------------------------------------- Information concerning Chateau's stock options is as follows:

/(1)/ The options granted do not include the grant of 50,000 shares of restricted stock in 2000 to executive officers of Chateau and 17,000 shares of restricted stock granted to key employees of the Company in 2001. /(2)/ For the years ended December 31, 2001 and 2000, approximately 70,000 and 720,000 options, respectively, were considered anti-dilutive. /(3)/ Options granted in 2001 includes 49,162 shares granted prior to 2001, but now included due to the CWS merger. For all options granted during 2001, 2000, and 1999, 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 at December 31, 2001.

The fair value of each option was estimated as of date of grant using an option-pricing model and the following assumptions:

43 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 2001, 2000, and 1999 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 OP Unit data):

10. 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 $250,000, $500,000, and $560,000 for the Plan years ended December 31, 2001, 2000, and 1999, respectively. 11. 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. When CSI sells homes, the purchaser may obtain financing from Vanderbilt Mortgage and Finance, Inc. ("Vanderbilt"), which is affiliated with one of the Chateau's directors. 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, 2001 there is a total of approximately $13.2 million of such amounts that are recourse to the Company. Included in management fee and other income and interest income are amounts earned from N'Tandem, as outlined below:

44 CP LIMITED PARTNERSHIP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED -------------------------------------------------------------------------------- Interest is earned on the loan to N'Tandem (Prime plus one percent, or 5.75 percent at December 31, 2001) and includes fees paid by N'Tandem for the subordination of the loan to the N'Tandem, $730,000 in both 2001 and 2000. The transaction fees are related to acquisition services provided by the Company to N'Tandem and are calculated as three percent of the acquisition price. 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 the Company on behalf of N'Tandem. Overhead reimbursement fees are based on a fixed fee per site. 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 3.) 12. 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 $48.4 million of debt, $20 million of which is to N'Tandem. 45 CP LIMITED PARTNERSHIP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED ------------------------------------------------------------------------------- 13. Quarterly Financial Information (Unaudited): -------------------------------------------- The following is quarterly financial information for the years ended December 31, 2001 and 2000. (amounts in thousands, except OP Unit data)

(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 Units amounts may not total to the annual amounts due to rounding and to the change in the number of OP units outstanding. 46 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND ------ --------------------------------------------------------------- FINANCIAL DISCLOSURES --------------------- None. PART III Chateau Communities, Inc. and its subsidiary, ROC Communities, Inc., are our general partners. Their businesses are limited to serving as our general partners and they collectively own an approximate 83% equity interest in our company. They receive their proportionate share of our regular distributions. Our partnership agreement is structured so that we bear the costs and expenses that are incurred by our general partners. We do not pay any other amounts (including fees or expenses) to our general partners. ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT ------- -------------------------------------------------- Our company does not have its own directors or executive officers but is managed by our general partners which in turn are managed by their directors and executive officers. The information required by Item 10 as it relates to these directors and executive officers is incorporated by reference in Chateau Communities, Inc.'s proxy statement filed for its annual meeting of shareholders to be held on May 16, 2002. ITEM 11. EXECUTIVE COMPENSATION ------- ---------------------- Our company does not have its own directors or executive officers but is managed by our general partners which in turn are managed by their directors and executive officers. The information required by Item 11 as it relates to these directors and executive officers is incorporated by reference in Chateau Communities, Inc.'s proxy statement filed for its annual meeting of shareholders to be held on May 16, 2002. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ------- -------------------------------------------------------------- Our company does not have its own directors or executive officers but is managed by our general partners which in turn are managed by their directors and executive officers. The information required by Item 12 as it relates to these directors and executive officers is incorporated by reference in Chateau Communities, Inc.'s proxy statement filed for its annual meeting of shareholders to be held on May 16, 2002. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ------- ---------------------------------------------- Our company does not have its own directors or executive officers but is managed by our general partners which in turn are managed by their directors and executive officers. The information required by Item 13 as it relates to these directors and executive officers is incorporated by reference in Chateau Communities, Inc.'s proxy statement filed for its annual meeting of shareholders to be held on May 16, 2002. 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, 2001, 2000, and 1999. Consolidated Balance Sheets as of December 31, 2001 and 2000. Consolidated Statements of Partners' Capital for the years ended December 31, 2001, 2000, and 1999 47 Consolidated Statements of Cash Flows for the years ended December 31, 2001, 2000, and 1999. Notes to Consolidated Financial Statements 2. Financial Statement Schedule III - Real Estate and Accumulated Depreciation 3. Exhibits

* 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. 48 (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 Chateau's Quarterly Report on Form 10-Q filed with the Commission on May 14, 1997. (c) Incorporated by reference to the Chateau's Form 8-K filed with the Commission on December 9, 1997. (d) Incorporated by reference to the Chateau's Annual Report on Form 10-K filed for the year ended December 31, 1997. (e) Incorporated by reference to the Company's Form 8-K filed with the Commission on May 1, 1998. (f) 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. (g) 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. (h) Incorporated by reference to the Chateau's Annual Report on Form 10-K filed for the year ended December 31, 1999. (i) Incorporated by reference to the Chateau's Annual Report on Form 10-K filed for the year ended December 31, 2000. (j) Incorporated by reference to the Chateau's Annual Report on Form 10-K filed for the year ended December 31, 2001. (k) Incorporated by reference to the Company's Form S-4/A filed with the Commission on March 1, 2002 (l) Incorporated by reference to the Exhibits filed with Chateau's Form 8-K dated August 3, 2001 and filed with the Commission on August 20, 2001. b. Reports on Form 8-K ------------------- The Company filed a Form 8-K/A on October 17, 2001 and December 21, 2001. 49 EXHIBITS INDEX

50 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 Chateau's Quarterly Report on Form 10-Q filed with the Commission on May 14, 1997. (c) Incorporated by reference to the Chateau's Form 8-K filed with the Commission on December 9, 1997. (d) Incorporated by reference to the Chateau's Annual Report on Form 10-K filed for the year ended December 31, 1997. (e) Incorporated by reference to the Company's Form 8-K filed with the Commission on May 1, 1998. (f) 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. (g) 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. (h) Incorporated by reference to the Chateau's Annual Report on Form 10-K filed for the year ended December 31, 1999. (i) Incorporated by reference to the Chateau's Annual Report on Form 10-K filed for the year ended December 31, 2000. (j) Incorporated by reference to the Chateau's Annual Report on Form 10-K filed for the year ended December 31, 2001. (k) Incorporated by reference to the Company's Form S-4/A filed with the Commission on March 1, 2002 (l) Incorporated by reference to the Exhibits filed with Chateau's Form 8-K dated August 3, 2001 and filed with the Commission on August 20, 2001. b. Reports on Form 8-K ------------------- The Company filed a Form 8-K/A on October 17, 2001 and December 21, 2001. 51 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 29th day of March, 2002. CP LIMITED PARTNERSHIP BY: CHATEAU COMMUNTIES, 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 29th, 2002, 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 52 /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 53

* - includes rental property and rental properties held for sale 61 SCHEDULE III Continued CP LIMITED PARTNERSHIP REAL ESTATE AND ACCUMULATED DEPRECIATION, Continued The changes in total real estate for the years ended December 31, 2001, 2000, and 1999 are as follows:

The change in accumulated depreciation for the years ended December 31, 2001, 2000, and 1999 are as follows:

CP LTD PARTNERSHIP 10-K