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

FORM 10-Q

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

For the quarterly period ended June 30, 2003

or

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

Commission file number 33-85492



CP LIMITED PARTNERSHIP
(exact name of registrant as specified in its charter)

MARYLAND		38-3140664

(State of incorporation)		(I.R.S. Employer Identification No.)

6160 South Syracuse Way, Greenwood Village, Colorado 80111
(Address of principal executive offices)

303.741.3707
Registrant’s telephone number, including area code

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.

Yes x

No o

CP LIMITED PARTNERSHIP
FORM 10-Q
INDEX

		Pages

PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)

	Condensed Consolidated Statements of Income for the Three and Six Months Ended June 30, 2003 and 2002	1

	Condensed Consolidated Balance Sheets as of June 30, 2003 and December 31, 2002	2

	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2003 and 2002	3

	Notes to Condensed Consolidated Financial Statements	4 - 9

Item 2.	Management Discussion and Analysis of Financial Condition and Results of Operations	9 - 17

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	17

Item 4.	Controls and Procedures	18

PART II.	OTHER INFORMATION	18

SIGNATURE		24

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CP LIMITED PARTNERSHIP

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,

	2003			2002			2003			2002

Revenues:
Rental income	$	70,721		$	63,459		$	135,492		$	126,464
Interest income		2,180			2,831			4,988			5,582
Management fee and other income (loss)		(155	)		576			(249	)		1,044

		72,746			66,866			140,231			133,090
Expenses:
Property operating and maintenance		22,404			19,293			42,382			37,920
Real estate taxes		4,764			4,097			9,182			8,381
Depreciation and amortization		19,942			17,357			37,949			33,827
Administrative		3,210			3,513			6,312			6,881
Merger costs		2,802			—			2,802			—
Interest and related amortization		18,805			16,781			35,488			33,561

		71,927			61,041			134,115			120,570

Income before gain on disposition of properties and distribution		819			5,825			6,116			12,520
Gain on disposition of properties		—			136			—			136
Distribution to preferred OP Unitholders		(1,523	)		(1,523	)		(3,046	)		(3,046	)

Income (loss) from continuing operations		(704	)		4,438			3,070			9,610

Discontinued operations:
Income from discontinued operations		126			692			208			1,808
Gain on disposition of properties		5,058			142			5,517			1,305

Income from discontinued operations		5,184			834			5,725			3,113

Income before cumulative effect of accounting change		4,480			5,272			8,795			12,723
Cumulative effect of accounting change		—			—			—			(1,014	)

Net income attributable to common OP Unitholders	$	4,480		$	5,272		$	8,795		$	11,709

Net income attributable to common OP Unitholders:
General partner	$	3,777		$	4,391		$	7,400		$	9,753
Limited partners		703			881			1,395			1,956

	$	4,480		$	5,272		$	8,795		$	11,709

Earnings per OP Unit - basic
Income (loss) from continuing operations	$	(0.02	)	$	0.13		$	0.09		$	0.27
Income from discontinued operations		0.15			0.02			0.16			0.09

Income before cumulative effect of accounting change		0.13			0.15			0.25			0.36
Cumulative effect of accounting change		—			—			—			(0.03	)

Net income attributable to common OP Unitholders	$	0.13		$	0.15		$	0.25		$	0.33

Weighted average common OP Units - basic		35,039			35,075			35,004			35,059

Earnings per OP Unit - diluted
Income (loss) from continuing operations	$	(0.02	)	$	0.13		$	0.09		$	0.27
Income from discontinued operations		0.15			0.02			0.16			0.09

Income before cumulative effect of accounting change		0.13			0.15			0.25			0.36
Cumulative effect of accounting change		—			—			—			(0.03	)

Net income attributable to common OP Unitholders	$	0.13		$	0.15		$	0.25		$	0.33

Weighted average common OP Units - diluted		35,153			35,261			35,065			35,231

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

CP LIMITED PARTNERSHIP

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30, 2003 (Unaudited)		December 31, 2002

ASSETS
Rental property:
Land	$	233,762	$	207,137
Land and improvements for expansion sites		40,289		41,751
Depreciable property, net		1,549,461		1,433,327

		1,823,512		1,682,215
Less: accumulated depreciation		377,598		346,583

Net rental property		1,445,914		1,335,632
Rental property held for sale		—		6,004
Cash and cash equivalents		6,528		2,025
Rents and other receivables, net		5,194		5,304
Notes receivable		44,540		42,611
Investments in and advances to affiliates		68,611		112,054
Prepaid expenses and other assets		12,966		11,358

Total assets	$	1,583,753	$	1,514,988

LIABILITIES
Debt	$	1,094,051	$	1,013,809
Accrued interest payable		11,323		13,911
Accounts payable and accrued expenses		22,221		15,248
Rents received in advance and security deposits		19,861		16,266
Distributions payable		20,168		20,038

Total liabilities		1,167,624		1,079,272
PARTNERS’ CAPITAL
Partners’ Capital, Unlimited Authorized Units:
35,321,823 and 34,960,102, Common OP Units outstanding at June 30, 2003 and December 31, 2002, respectively 1,500,000 Preferred OP Units outstanding at June 30, 2003 and December 31, 2002, respectively		—		—
General Partner		289,824		301,239
Limited Partners		53,348		61,520
Preferred OP Units, Series A		72,957		72,957

Total partners’ capital		416,129		435,716

Total liabilities and partners’ capital	$	1,583,753	$	1,514,988

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

CP LIMITED PARTNERSHIP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Six Months Ended June 30,

	2003			2002

Cash flows from operating activities:
Net income attributable to common OP Unitholders	$	8,795		$	11,709
Adjustments to reconcile net income to net cash provided by operating activities:
Discontinued operations		(5,065	)		(252	)
Share of loss from CSI		836			700
Share of loss from N’Tandem		27			123
Net gain on disposition of properties - continuing operations		—			(136	)
Cumulative effect of accounting change		—			1,014
Bad debt expense		211			1,047
Depreciation and amortization from continuing operations		37,949			33,827
Amortization of debt issuance costs		2,373			1,962
(Increase)/decrease in operating assets		3,263			(2,355	)
Increase/(decrease) in operating liabilities		1,260			(4,063	)

Net cash provided by operating activities		49,649			43,576
Cash flows from investing activities:
Net proceeds from dispositions of rental properties		27,124			10,826
Collection of amounts held in escrow, from prior year property dispositions		—			10,660
Proceeds from property dispositions, held in escrow		—			7,358
Acquisition of N’Tandem		(5,109	)		—
Additions to rental property and equipment		(11,344	)		(11,020	)
Acquisitions of rental properties and land to be developed		—			(3,101	)
Investment in and advances to affiliates		(19,212	)		(7,532	)
Payments on Notes Receivable - OP Unitholder		6,000			—
Payments (advances) on notes receivable, net		(1,775	)		182

Net cash (used in) provided by investing activities		(4,316	)		7,373
Cash flows from financing activities:
Proceeds from the issuance of debt		36,607			125,000
Borrowings on line of credit		98,484			194,504
Payments on line of credit		(141,016	)		(181,598	)
Re-payment of acquisition facility		—			(162,700	)
Principal payments on debt		(3,788	)		(1,928	)
Distributions to OP Unitholders		(38,475	)		(19,278	)
Payment of debt issuance costs		(1,143	)		(2,886	)
Exercise of Chateau’s common stock options and other		8,501			353

Net cash used in financing activities		(40,830	)		(48,533	)

Increase in cash and cash equivalents		4,503			2,416
Cash and cash equivalents, beginning of period		2,025			61

Cash and cash equivalents, end of period	$	6,528		$	2,477

Supplemental cash flow information:
Fair market value of OP Units issued in connection with acquisitions/development	$	811		$	1,396

Forgiveness of advances to N’Tandem	$	28,231		$	—

Conversion of notes receivable from N’Tandem to equity in N’Tandem	$	27,211		$	—

Debt assumed in connection with N’Tandem acquisition	$	89,955		$	—

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

CP LIMITED PARTNERSHIP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.	Background and Basis of Presentation:

	Background -
	CP Limited Partnership is a limited partnership and was formed by Chateau Communities, Inc., a real estate investment trust, as a general partner and Chateau Estates, as the initial limited partner, on September 16, 1993. We are engaged in owning and operating manufactured housing community properties. As of June 30, 2003, our portfolio consisted of 231 properties, containing an aggregate of 74,396 homesites and 1,359 park model/RV sites, located in 35 states. We also fee manage two properties, containing an aggregate of 377 homesites.

	The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America and in conformity with the rules and regulations of the Securities and Exchange Commission requires management to make estimates and assumptions. These estimates may affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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

	Basis of Presentation -
	The accompanying condensed consolidated financial statements include all accounts of CP Limited Partnership and our subsidiaries. Chateau and ROC Communities, Inc. are general partners. As of June 30, 2003, Chateau owned on a combined basis, an 85 percent general partner interest. Pursuant to the terms of the operating partnership agreement, we are required to reimburse Chateau for the net expenses incurred by Chateau. Amounts paid on behalf of Chateau by us are reflected in the statement of income as general and administrative expenses. The balance sheet of Chateau as of June 30, 2003 is identical to our accompanying balance sheet, except as follows:

(In thousands)	As Presented Herein June 30, 2003		Adjustments			Chateau Communities, Inc June 30, 2003

Minority interests in CP Limited Partnership	$	—	$	126,305		$	126,305

Equity:
General partner	$	289,824	$	(289,824	)	$	—
Limited partners		126,305		(126,305	)		—
Common stock		—		300			300
Additional paid-in capital		—		511,972			511,972
Dividends in excess of accumulated earnings		—		(208,206	)		(208,206	)
Accumulated other comprehensive income		—		(5,046	)		(5,046	)
Notes receivable from officers		—		(9,196	)		(9,196	)

Partners’ capital/shareholders’ equity	$	416,129	$	(126,305	)	$	289,824

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

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

2.	Pending Merger:

	On May 29, 2003, we entered into a definitive agreement and plan of merger with Hometown America, LLC (“Hometown”) and Hometown America Holdings, LLC. Pursuant to the merger agreement, (i) Chateau Communities, Inc. will merge with and into a subsidiary of Hometown with the subsidiary being the surviving entity in such merger, (ii) CP Limited Partnership will merge with a separate subsidiary of Hometown in which CP Limited Partnership will survive the merger (in such capacity, the “Surviving Partnership”), (iii) each of the issued and outstanding shares of Chateau’s common stock (other than those held by Hometown and its affiliates) will be converted into the right to receive $29.25 in cash without interest, and (iv) each OP Unit will be converted into the right to receive either (a) $29.25 in cash without interest or (b) if the OP Unitholder so elects and meets certain requirements, one 8% Rate Resetting Cumulative Redeemable Preferred Partnership Unit in the Surviving Partnership (the “8% Preferred Units”). The merger agreement is subject to customary closing conditions, including the approval of the transaction by Chateau’s stockholders and OP Unitholders, and is anticipated to be completed in the third quarter of 2003.

3.	Related Party Transactions and Purchase of N’Tandem:

	During the first half of 2003, we owned approximately 19% of N’Tandem Trust’s (“N’Tandem”) outstanding equity. In addition, we owned N’Tandem’s external advisor and provided financing and management and other services to N’Tandem. As such, we possessed significant influence over the operating and financial decisions of N’Tandem, and accordingly, accounted for our investment in N’Tandem utilizing the equity method of accounting. In connection with the acquisition, we acquired a unilateral right to convert our notes receivable from N’Tandem into a common equity investment in N’Tandem effective April 1, 2003 and accordingly began consolidating N’Tandem. We exercised that right in April 2003. On June 23, 2003 we purchased the interests in two subsidiaries of N’Tandem that we did not already own. The total purchase price of approximately $153 million was allocated as follows:

(In thousands)

Assumed debt	$	89,955
Equity investment and advances prior to purchase		55,442
Other liabilities assumed		2,956
Cash paid		5,109

Total	$	153,462

4.	Comprehensive Income:

	We amortize the loss of a forward rate interest swap hedge transaction, which was settled in 2001 with the issuance of fixed rate debt and included in the General Partner equity section of the Condensed Consolidated Balance Sheets. Total comprehensive income for the six months ended June 30, 2003 and 2002 is summarized as follows (in thousands):

	2003			2002

Net income available to OP Unitholders	$	8,795		$	11,709
Add back: amortization of hedge loss		491			482
Less: adjustment for amounts included in net income		(491	)		(482	)

Total comprehensive income	$	8,795		$	11,709

5.	Partners’ Capital:

	On May 15, 2003, we declared a cash distribution of $.55 per OP Unit to OP Unitholders of record as of June 30, 2003. The distribution was paid July 15, 2003 and is included in distributions payable in the accompanying Condensed Consolidated Balance Sheets as of June 30, 2003.

	On February 25, 2003, we declared a cash distribution of $.55 per OP Unit to OP Unitholders of record as of March 31, 2003. The distribution was paid April 15, 2003.

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

(In thousands, except per OP Unit data)	For the Three Months Ended June 30,					For the Six Months Ended June 30,

	2003			2002		2003		2002

Basic earnings per OP Unit:
Income (loss) from continuing operations	$	(704	)	$	4,438	$	3,070	$	9,610

Weighted average common OP Units - Basic		35,039			35,075		35,004		35,059

Per OP Unit	$	(0.02	)	$	0.13	$	0.09	$	0.27

Diluted earnings per OP Unit:
Income (loss) from continuing operations	$	(704	)	$	4,438	$	3,070	$	9,610

Weighted average common OP Units outstanding		35,039			35,075		35,004		35,059
Chateau employee stock options		114			186		61		172

Weighted average common OP Units - Diluted		35,153			35,261		35,065		35,231

Per OP Unit	$	(0.02	)	$	0.13	$	0.09	$	0.27

	We have notes receivable from Chateau stock option exercises that bear interest, primarily at LIBOR plus 80 basis points, range in maturity dates from 2003 to 2005, are collateralized by the underlying Chateau common shares, and are non-recourse to the borrower. Several of these notes were repaid in July 2003. As of July 31, 2003, there is $6.0 million in notes outstanding, which are collateralized by approximately 200,000 shares of Chateau common stock.

6.	Goodwill:

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

	SFAS No. 142 requires us to test goodwill for impairment using a two-step process. The first step is a screen for potential impairment, while the second step measures the amount of impairment. We completed the first step of our goodwill impairment testing by the end of the second fiscal quarter of 2002. As a result of performing the first “step” of goodwill impairment testing, we identified impairment

	related to the goodwill associated with CSI’s only company-owned home sales dealership. As allowed under the transitional provisions of SFAS No. 142, we completed the second “step” in the third quarter of 2002. As a result of this test, we recognized impairment of approximately $1.0 million before allocation to minority interests. The impairment loss was recorded in the first quarter of 2002 as a cumulative effect of a change in accounting principle in the Condensed Consolidated Statements of Income.

7.	Rental Property Held for Sale / Discontinued Operations:

	Assets held for sale are carried at the lower of book value or fair value less costs to sell the assets. Consistent with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, income from discontinued operations, for all periods presented, includes the results of operations through the property sale date. During 2003, we sold eight communities for a combined gross sales price of $28.9 million ($27.1 million net of costs of disposition), which includes a net gain on sale of $5.5 million. These communities are included in discontinued operations for all periods presented.

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

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

	For the Three Months Ended June 30,						For the Six Months Ended June 30,

	2003			2002			2003			2002

Total revenues	$	584		$	2,648		$	1,531		$	5,677
Total operating expenses		(321	)		(1,277	)		(793	)		(2,748	)
Interest expense and related amortization		(38	)		(54	)		(78	)		(69	)
Depreciation expense		(99	)		(625	)		(452	)		(1,052	)

Income from discontinued operations before gain on disposition of properties		126			692			208			1,808
Gain on disposition of properties		5,058			142			5,517			1,305

Income from discontinued operations	$	5,184		$	834		$	5,725		$	3,113

8.	Financing:

	The following table sets forth certain information regarding outstanding indebtedness at June 30, 2003:

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

Fixed rate mortgage debt		7.60	%		2003 – 2013	$	402,343
Unsecured senior notes		7.77	%		2003 – 2021		470,000
Unsecured installment notes		7.55	%		2005 – 2012		10,066

Total fixed rate debt							882,409

Unsecured term loan		3.01	%		2004		125,000
Unsecured lines of credit		2.50	%		2003 – 2005		86,642

Total variable rate debt							211,642

						$	1,094,051

	million of senior unsecured notes upon their maturity in August 2003. Subsequent to the repayment, the borrowing capacity was restored to $175 million. The Bank One Credit Facility matures in February 2005 and, as of June 30, 2003, the facility bears interest at LIBOR plus 140 basis points (2.52% as of June 30, 2003). In addition, we have a $7.5 million revolving line of credit from US Bank, which, as of June 30, 2003, bears interest at a rate of LIBOR plus 125 basis points (2.37% as of June 30, 2003) (together with our Bank One Credit Facility, “Credit Facilities”). As of June 30, 2003 we had approximately $86.6 million outstanding under our Credit Facilities and had available approximately $66 million in additional borrowing capacity.

	We have a $125 million term loan with BankOne acting as lead agent, which, as of June 30, 2003, bears interest at LIBOR plus 175 basis points (2.87% as of June 30, 2003) and matures in May 2004.

	In January 2003, Standard & Poor’s Ratings Services affirmed our credit ratings at BBB-, but revised its outlook for our company from stable to negative. In March 2003, Moody’s Investors Service revised our debt rating to Ba1, outlook uncertain. Among other things, the downgrade was attributed to uncertainty regarding plans to address 2004 and 2005 debt maturities. This downgrade resulted in increased borrowing costs under our Bank One Credit Facility, term loan and under our combined $70 million of unsecured senior notes. The unsecured senior notes were repaid in July (see below).

	During June 2003, we agreed to prepay our $50 million unsecured senior notes due 2021 with proceeds from a loan from Hometown (see below). We prepaid this debt on July 25, 2003. As a result of this pre-payment, we incurred a penalty of approximately $21 million, which will be charged to expense in the third quarter. Also in June 2003, after notifying the lender regarding the $50 million prepayment, this lender notified us of their intent to require us to repurchase an additional $20 million of unsecured senior notes, which was scheduled to mature November 2003. We repaid this debt (which also included approximately $0.4 million in prepayment penalties and other charges) in July 2003 with proceeds from borrowings under our Credit Facilities (see below).

	On June 26, 2003, we entered into an agreement with Hometown to provide us with a loan of $85 million, which is secured by six communities, bears interest at a rate of LIBOR plus 250 basis points and matures March 2004. The proceeds from this loan were received in July 2003 and were used to repay the $50 million unsecured senior notes due 2021, including the required prepayment premium and associated fees and expenses, and to reduce the balance outstanding under our Bank One Credit Facility, which was used on July 7, 2003 to repay the related $20 million of senior unsecured notes, including the required prepayment premium and associated fees and expenses.

	During June 2003, we refinanced two loans that increased our borrowing by $23.6 million and decreased our interest rate by 18 basis points. Also during June 2003, we secured a loan on one property with proceeds of $13 million at an interest rate of 5% due in 2013. In July 2003, we securitized one community at an interest rate of 5.75% and maturing in 2013, resulting in proceeds of $10 million.

	Proceeds from these financing activities were used to reduce the balance outstanding on our Bank One Credit Facility.

9.	Chateau’s Stock Options Plan:

	If compensation cost for stock option grants had been recognized based on the fair value at the grant dates for June 30, 2003 and 2002 consistent with the method allowed by SFAS No. 123, “Accounting for Stock-Based Compensation,” net income and net income per OP Unit share would have been (in thousands, except per OP Unit data):

	For the Three Months Ended June 30,						For the Six Months Ended June 30,

	2003			2002			2003			2002

Net income attributable to common OP Unitholders, as reported	$	4,480		$	5,272		$	8,795		$	11,709
Less: Total employee compensation expense determined under fair value based method for all awards		(540	)		(282	)		(768	)		(564	)

Pro forma net income	$	3,940		$	4,990		$	8,027		$	11,145

Earnings per OP Unit
Basic - as reported	$	0.13		$	0.15		$	0.25		$	0.33

Basic - pro forma	$	0.11		$	0.14		$	0.23		$	0.31

Diluted - as reported	$	0.13		$	0.15		$	0.25		$	0.33

Diluted - pro forma	$	0.11		$	0.14		$	0.22		$	0.31

10.	New Accounting Pronouncements:

	In May 2003, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity (“SFAS 150”). This Statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. Under SFAS 150, an issuer is required to classify financial instruments issued in the form of shares that are mandatorily redeemable, financial instruments that, at inception, embody an obligation to repurchase the issuer’s equity shares and financial instruments that embody an unconditional obligation, as liabilities. The Company is currently evaluating the impact the adoption of SFAS No. 150 will have on its financial position, results of operations and cash flows.

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

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

Item 2.

Management Discussion and Analysis of Financial Condition and Results of Operations

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

Overview

We were formed by Chateau, as a general partner, and Chateau Estates, as the initial partner, in September 1993 to own, operate, manage, acquire, develop and expand manufactured housing communities. Chateau conducts substantially all of its activities through us, owns directly and through ROC Communities, Inc. (“ROC”), our other general partner, an approximate 85% general partner interest as of June 30, 2003. As of June 30, 2003, we owned 231 properties containing an aggregate of 74,396 homesites and 1,359 park model/RV sites, located in 35 states. Approximately 27% of these homesites were in Florida, 22.5% were in Michigan, and 8.2% were in Georgia.

On May 29, 2003, we entered into a definitive agreement and plan of merger with Hometown America, LLC (“Hometown”) and Hometown America Holdings, LLC. Pursuant to the merger agreement, (i) Chateau Communities, Inc. will merge with and into a subsidiary of Hometown with the subsidiary being the surviving entity in such merger, (ii) CP Limited Partnership will merge with a separate subsidiary of Hometown in which CP Limited Partnership will survive the merger (in such capacity, the “Surviving Partnership”), (iii) each of the issued and outstanding shares of Chateau’s common stock (other than those held by Hometown and its affiliates) will be converted into the right to receive $29.25 in cash without interest, and (iv) each OP unit will be converted into the right to receive either (a) $29.25 in cash without interest or (b) if the OP Unitholder so elects and meets certain requirements, one 8% Rate Resetting Cumulative Redeemable Preferred Partnership Unit in the Surviving Partnership (the “8% Preferred Units”) The merger agreement is subject to customary closing conditions, including the approval of the transaction by Chateau’s stockholders and OP Unitholders, and is anticipated to be completed in the third quarter of 2003.

During the first half of 2003, we owned approximately 19% of N’Tandem Trust’s (“N’Tandem”) outstanding equity. In addition, we owned N’Tandem’s external advisor and provided financing and management and other services to N’Tandem. As such, we possessed significant influence over the operating and financial decisions of N’Tandem, and accordingly, accounted for our investment in N’Tandem utilizing the equity method of accounting. In connection with the acquisition, we acquired a unilateral right to convert our notes receivable from N’Tandem into a common equity investment in N’Tandem effective April 1, 2003 and accordingly began consolidating N’Tandem. We exercised that right in April 2003. On June 23, 2003 we purchased the interests in two subsidiaries of N’Tandem that we did not already own. The total purchase price was approximately $153 million.

During the third quarter of 2001, we began the implementation of our plan to dispose of those communities that do not fit our overall strategic objectives or do not meet our operating standards. From the inception of the plan through June 30, 2003, we have disposed of an aggregate of 30 properties and three parcels of land for approximately $121 million (see further discussion under “Liquidity and Capital Resources” below).

Results of Operations

Results of operations in 2003 continue to be adversely impacted by many of the same factors that affected our 2002 results, including:

	•		Continued weakening economic conditions, which are more pronounced in certain markets in which we operate, specifically, greater Atlanta, Indiana, Michigan, North Carolina, Alabama and Texas.
	•		Several retail lenders who provide financing to our residents have exited the marketplace, while others have tightened their underwriting standards, making it more difficult for prospective residents to finance homes to be placed in our communities.
	•		Readily available and lower rate mortgage financing allows our traditional customers the opportunity to purchase a moderately priced site-built home, with an affordable monthly payment.
	•		Declining rental rates from apartments have further pressured the competitive environment.
	•		Two retail lenders filed for protection under the bankruptcy laws in the fourth quarter of 2002. This has affected the pricing of manufactured homes by increasing the supply of repossessed and other pre-owned homes, thereby exerting downward pressure on new and pre-owned home pricing. In addition, these lenders were making rental payments on an aggregate of 800 sites that they were occupying as a result of their repossession of homes from our residents. Effective in the fourth quarter of 2002, these lenders discontinued rental payments on these sites.

These factors have made it more difficult for us to attract new residents and maintain historical occupancy rates at our communities. As of the end of the second quarter we lost approximately 520 revenue producing sites in the same store portfolio, from December 31, 2002. We do not expect this trend to change for the remainder of 2003. In addition, these factors have led to increased repossessions, increased collection costs, additional pressure for lower rental increases and losses of value in home inventory held by CSI.

Many of these factors influenced our Board of Directors to pursue the merger transaction with Hometown.

The following table summarizes certain information relative to our properties for the three months and six months ended June 30, 2003 and 2002. We consider all communities owned by us at both the beginning of the period and the end of the period, which are not classified as held for sale, as our “Same Store Portfolio.”

	Same Store Portfolio						Total Portfolio

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

As of June 30,
Number of communities		193			193			231			212
Total manufactured homesites		66,337			66,163			74,396			69,789
Occupied sites		56,711			58,649			62,761			61,367
Occupancy		85.5	%		88.6	%		84.4	%		87.9	%
For the three months ended June 30,
Rental income	$	65,010		$	63,459		$	70,721		$	63,459
Property operating expenses	$	23,326		$	22,311		$	27,168		$	23,390
Net operating income	$	41,684		$	41,148		$	43,553		$	40,069
Weighted average monthly rent per site	$	368		$	350		$	363		$	347
For the six months ended June 30,
Rental income	$	129,762		$	126,464		$	135,492		$	126,464
Property operating expenses	$	46,535		$	44,153		$	51,564		$	46,301
Net operating income	$	83,227		$	82,311		$	83,928		$	80,163
Weighted average monthly rent per site	$	366		$	348		$	362		$	345

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

Comparison of three months ended June 30, 2003 to three months ended June 30, 2002

For the three months ended June 30, 2003, loss from continuing operations was $0.7 million, a decrease of $5.1 million from the same period a year ago. The decrease was due to the $2.8 million in merger costs related to the acquisition of us by Hometown America, the increased depreciation and interest expense in 2003 offset by increases in operating income from our Same Store Portfolio and acquisitions.

Rental revenue for the three months ended June 30, 2003 was $70.7 million, an increase of $7.3 million from the three months ended June 30, 2002. The increase is primarily due to the consolidation of N’Tandem and rental increases in our Same Store Portfolio, offset somewhat by declining occupancy.

As of June 30, 2003, occupancy in our stable portfolio was 87.1%, 75.9% in the expansion portfolio, and 46% in the development portfolio. Total portfolio occupancy at June 30, 2003 was 84.4%. This compares to occupancy at June 30, 2002 of 90.7% in the stable portfolio, 79.2% in the expansion portfolio and 34.6% in the development portfolio, or total portfolio occupancy of 87.9%. On a per-site basis, weighted monthly rental revenue for the three months ended June 30, 2003 was $363 compared with $347 for the same period in 2002, an increase of 4%.

Management fee and other income primarily includes equity earnings/losses from our taxable REIT subsidiary, Community Sales, Inc. (“CSI”) and management fee income. The decrease in 2003 is due to our consolidation of N’Tandem as of April 1, 2003 and elimination of primarily all of the management fees. We recognized a loss of $0.2 million from CSI in the second quarter of 2003, compared with a loss of $0.2 million in the second quarter of 2002.

Property operating and maintenance expense for the three months ended June 30, 2003 increased by $3.1 million or 16% from the same period a year ago. The majority of the increase was due to consolidation of N’Tandem as of April 1, 2003, which accounted for $2.3 million. The remaining change is due to the increases in our Same Store Portfolio, including increased water and sewer expense, repairs and maintenance, property insurance and payroll burden costs, offset by a decrease in collection costs.

Administrative expense for the three months ended June 30, 2003 decreased by $0.3 million from the same period a year ago. Administrative expense in the second quarter of 2003 was 4.4% of total revenues as compared to 5.3% in the same period of 2002. The decrease in the expense to revenue ratio is due to a combination of increased revenues along with decreased expenses. Revenues increased as a result of the consolidation of N’Tandem. Administrative expense decreased primarily due to the restructuring of some of our divisional and corporate departments that was completed in the fourth quarter of 2002 in an effort to lower our costs, along with a number of operational-related consulting projects that were completed in 2002.

Depreciation and amortization expense for the three months ended June 30, 2003 increased $2.6 million from the same period a year ago. Depreciation expense as a percentage of average depreciable rental property in the second quarter of 2003 remained relatively unchanged from 2002.

Comparison of six months ended June 30, 2003 to six months ended June 30, 2002

For the six months ended June 30, 2003, income from continuing operations was $3.1 million, a decrease of $6.5 million from the six months ended June30, 2002. The decrease was due to the $2.8 million in merger costs, the increased depreciation and interest expense, offset somewhat by the increase in operating income from the Same Store Portfolio and the consolidation of N’Tandem.

Rental revenue for the six months ended June 30, 2003 was $135.5 million, an increase of $9.0 million from the six months ended June 30, 2002. The increase is primarily due to rental increases in our Same Store Portfolio along with the consolidation of N’Tandem, offset by declining occupancy. On a per-site basis, weighted monthly rental revenue for the six months ended June 30, 2003 was $362 compared with $345 for the same period in 2002, an increase of 5%.

Management fee and other income primarily include management and transaction fee income for the management of 35 manufactured home communities, which includes fees from N’Tandem through March 31, 2003 and equity losses from CSI. We recognized a loss of $0.8 million from CSI in the first six months of 2003, compared with a loss of $0.7 million in 2002. The increased losses are due primarily to fewer new home sales and an increase in inventory reserves as a result of the increased pressure on home values. Prior to our acquisition of N’Tandem, we recognized income from a property management agreement, an advisory agreement, overhead reimbursements and interest income on advances as earned from N’Tandem. The total amount of fee income and interest income recognized for the six months ended June 30, 2003 and 2002 was $0.6 million and $1.6 million, respectively.

Property operating and maintenance expense for the six months ended June 30, 2003 increased by $4.5 million or 12% from the same period a year ago. The majority of the increase was due to the consolidation of N’Tandem, which accounted for $2.3 million, and increases in our Same Store Portfolio, including increased property insurance, healthcare and administrative costs. We expect these costs to continue to increase at levels higher than historic norms.

Administrative expense for the six months ended June 30, 2003 decreased by $0.6 million from the same period a year ago. Administrative expense for the first six months of 2003 was 4.5% of total revenues as compared to 5.2% in the same period of 2002. The decrease is due primarily to restructuring that was completed in late 2002 and, as a percent of revenues increased revenues due to the consolidation of N’Tandem.

Depreciation and amortization expense for the six months ended June 30, 2003 increased $4.1 million from the same period a year ago. Depreciation expense as a percentage of average depreciable rental property in the first half of 2003 remained relatively unchanged from 2002.

Discontinued Operations

Consistent with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, income from discontinued operations, for all periods presented, includes the results of operations through the property sale date (if the property was sold prior to June 30, 2003) and the results of operations for the properties held for sale through June 30, 2003. During the first half of 2003 we sold eight communities, which have been reclassified to discontinued operations for all periods presented.

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

Liquidity and Capital Resources

Net cash provided by operating activities was $49.6 million for the six months ended June 30, 2003, compared to $43.6 million for the same period in 2002, due to changes in our operating assets and liabilities.

Net cash used in investing activities for the six months ended June 30, 2003 was $4.3 million as compared to cash provided by investing activities of $7.4 million for the same period in 2002. This amount is comprised of investments in development, acquisitions and capital expenditures, as well as additional investments in and advances to affiliates, offset somewhat by proceeds from the disposition of rental properties and a payment from a Notes Receivable OP Unitholder. We advanced $16.2 million to N’Tandem during the second quarter of 2003 to payoff their line of credit.

Net cash used in financing activities for the six months ended June 30, 2003 was $40.8 million. This consisted primarily of net payments on our Credit Facilities (discussed below) and distributions to our OP Unitholders of $38.5 million, offset somewhat by Chateau’s stock option exercises.

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

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

We had approximately $50 million of senior unsecured notes maturing on August 1, 2003. We repaid the balance with refinancings and borrowings on our Credit Facilities, which, as described below, had been amended to require adequate capacity to handle these maturities.

We have a line of credit available with BankOne, N.A., acting as lead agent with a total borrowing capacity of $175 million (the “Bank One Credit Facility”). Beginning April 2003, our borrowing capacity on this facility was restricted by $10 million each month to ensure adequate availability to repay $50 million of senior unsecured notes upon their maturity in August 2003. Subsequent to the repayment, the borrowing capacity was restored to $175 million. The Bank One Credit Facility matures in February 2005 and, as of June 30, 2003, the facility bears interest at LIBOR plus 140 basis points (2.52% as of June 30, 2003). In addition, we have a $7.5 million revolving line of credit from US Bank, which, as of June 30, 2003, bears interest at a rate of LIBOR plus 125 basis points (2.37% as of June 30, 2003) (together with our Bank One Credit Facility, “Credit Facilities”). As of June 30, 2003 we had approximately $86.6 million outstanding under our Credit Facilities and had available approximately $66 million in additional borrowing capacity.

We have a $125 million term loan with BankOne acting as lead agent, which, as of June 30, 2003, bears interest at LIBOR plus 175 basis points (2.87% as of June 30, 2003) and matures in May 2004.

In addition to the Credit Facilities, as of June 30, 2003, we had $480.1 million of senior unsecured debt outstanding with a weighted average interest rate and remaining maturity of 7.8% and 5.3 years, respectively, $402.3 million of secured mortgage debt with a weighted average interest rate and remaining maturity of 7.6% and 5.1 years, respectively, and a $125 million unsecured term loan with an interest rate of 3.0%. As of June 30, 2003, we had approximately $1.1 billion of total debt outstanding, representing approximately 49.4% of our total market capitalization. We consider market capitalization to be the sum of outstanding debt, preferred OP Units and the market value of our OP Units, all at the end of the period. All of the debt is fixed rate debt, other than our Credit Facilities and term loan. The fixed rate debt carries a weighted average interest rate of 7.7%.

In January 2003, Standard & Poor’s Ratings Services affirmed our credit ratings at BBB-, but revised its outlook for our company from stable to negative. In March 2003, Moody’s Investors Service revised our debt rating to Ba1, outlook uncertain. Among other things, the downgrade was attributed to uncertainty regarding plans to address 2004 and 2005 debt maturities. This downgrade resulted in increased borrowing costs under our Bank One Credit Facility, term loan and under our combined $70 million of unsecured senior notes. The unsecured senior notes were repaid in July (see below).

During June 2003, we agreed to prepay our $50 million unsecured senior notes due 2021 with proceeds from a loan from Hometown (see below). We prepaid this debt on July 25, 2003. As a result of this pre-payment, we incurred a penalty of approximately $21 million, which will be charged to expense in the third quarter. Also in June 2003, after notifying the lender regarding the $50 million prepayment, this lender notified us of their intent to require us to repurchase an additional $20 million of unsecured senior notes, which was scheduled to mature November 2003. We repaid this debt (which also included approximately $0.4 million in prepayment penalties and other charges) in July 2003 with proceeds from borrowings under our Credit Facilities (see below).

On June 26, 2003, we entered into an agreement with Hometown to provide us with a loan of $85 million, which is secured by six communities, bears interest at a rate of LIBOR plus 250 basis points and matures March 2004. The proceeds from this loan were received in July 2003 and were used to repay the $50 million unsecured senior notes due 2021, including the required prepayment premium and associated fees and expenses, and to reduce the balance outstanding under our Bank One Credit Facility, which was used on July 7, 2003 to repay the related $20 million of senior unsecured notes, including the required prepayment premium and associated fees and expenses.

During June 2003, we refinanced two loans that increased our borrowing by $23.6 million and decreased our interest rate by 18 basis points. Also during June 2003, we secured a loan on one property with proceeds of $13 million at an interest rate of 5% due in 2013. In July 2003, we securitized one community at an interest rate of 5.75% and maturing in 2013, resulting in proceeds of $10 million.

Proceeds from these financing activities were used to reduce the balance outstanding on our Bank One Credit Facility.

As of August 2003, we have repaid all of our 2003 maturities and have approximately $225 million of senior unsecured notes plus the $85 million Hometown loan maturing in 2004. As we have done historically, we expect to finance future debt maturities and meet our long-term liquidity needs through proceeds from property dispositions, additional borrowings under our existing or new credit facilities, or issuances of new secured or unsecured debt financings. However, the merger agreement with Hometown provides that until the closing or termination of that agreement, we are restricted from engaging in borrowings or other financing transactions, except for certain permitted borrowings under the merger agreement or financings that are approved by Hometown.

2003 Portfolio Changes

On June 23, 2003, we acquired the remaining interests in two N’Tandem subsidiaries that own 33 communities, which we previously managed (as described above).

As part of our strategy to bring our overall debt to market capitalization ratio more in line with our historical operating parameters, for the first six months of 2003 we disposed of 8 properties with 1,594 sites, for a total gross sales price of $28.9 million, which includes a net gain on sale of $5.5 million. The proceeds from the dispositions were used to repay amounts outstanding under our Credit Facilities.

Capital Investments

Our investment in capital improvements for the six months ended June 30, 2003, is as follows (in thousands, except per site):

	For the Six Months Ended June 30,

	2003

Recurring capital expenditures (per site average $65.00) (a)	$	4,356
Site upgrades (b)		337
Acquisitions (c)		154,989
Expansions and development (d)		4,185
Revenue producing (e)		268

Total	$	164,135

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

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

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

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

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

In response to economic conditions that have weakened the demand for manufactured home community sites in many of our markets, we have moderated the pace of our development and expansion activity and have been focusing more on filling the sites already substantially complete and currently vacant. We expect to spend an additional $6.5 million in finish costs in 2003, as these sites are filled. In addition, where appropriate, we will consider upgrading or adding facilities and amenities to certain communities in order to make those communities more attractive in their market, and to increase our potential cash flow from the community.

New Accounting Pronouncements

See footnote 10 of the Notes to Condensed Consolidated Financial Statements for discussion of the impact of new accounting pronouncements.

Other

Funds from operations (“FFO”) is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) as consolidated net income without giving effect to gains (or losses) from sales of property and rental property depreciation and amortization. We believe that FFO is an important and widely used measure of the operating performance of REITs, which provides a relevant basis for comparison among REITs. FFO (1) does not represent cash flow from operations as defined by generally accepted accounting principles; (2) should not be considered as an alternative to net income as a measure of operating performance or to cash flows from operating, investing and financing activities; (3) is not an alternative to cash flow as a measure of liquidity; and (4) may not be comparable to similarly titled measures reported by other REITs.

Our FFO is calculated as follows:

(In thousands)	For the Three Months Ended June 30,						For the Six Months Ended June 30,

	2003			2002			2003			2002

Income available to common OP Unitholders	$	4,480		$	5,272		$	8,795		$	11,709
Adjustments:
Depreciation and amortization on rental properties		19,287			16,836			36,718			32,864
Gain on disposition of rental property		—			(136	)		—			(136	)
Cumulative effect of accounting change		—			—			—			1,014
Merger Costs		2,802			—			2,802			—
Discontinued operations:
Depreciation on rental property		99			625			452			1,052
Net gain on disposition of properties		(5,058	)		(142	)		(5,517	)		(1,305	)

FFO	$	21,610		$	22,455		$	43,250		$	45,198

Item 3.

Quantitative and Qualitative Disclosures about Market Risks

Our primary market risk exposure is interest rate risk. Management has and will continue to manage interest rate risk by (1) maintaining a conservative ratio of fixed-rate, long-term debt to total debt such that variable rate exposure is kept at an acceptable level and (2) taking advantage of favorable market conditions for long-term debt and/or equity. As of June 30, 2003, our Credit Facilities and term loan represented our only variable rate debt.

We face market risk relating to our fixed-rate debt upon refinancing of such debt and depending upon prevailing interest rates at the time of such refinance. As of August 2003, we have repaid all of our 2003 maturities and have approximately $225 million of senior unsecured notes plus the $85 million Hometown loan maturing in 2004. We expect to repay the balance with the proceeds from property dispositions or borrowings on our Credit Facilities or issuing new secured or unsecured debt.

In addition, we have assessed the market risk for our variable rate debt and believe that a 1% increase in LIBOR rates would result in an approximate $1.3 million increase in interest expense for the first half of 2003 based on our average variable rate debt outstanding during 2003 of $253 million.

Item 4.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

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

Changes in Internal Controls

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

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings
	None.

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

Item 3.	Defaults Upon Senior Securities
	Not Applicable.

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

Item 5.	Other Information

Property Information

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

criteria to be classified as assets held for sale. As of June 30, 2003, we have no communities classified as assets held for sale.

The following table sets forth certain information, as of June 30, 2003, regarding our properties, excluding our three park model/RV communities, as well as two of our greenfield properties that we have not yet commenced actual site development. A park model/RV community is a community where the majority of the sites are leased on an annual basis, although the resident only occupies the home for a portion of the year. A minority of the sites are rented with recreational vehicles on a daily, weekly or monthly basis.

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

*Stable*
100 Oaks	AL	Fultondale		235		71.9	%	$	250.44
Anchor Bay	MI	Detroit		1,384		86.6	%	$	417.72
Anchor North	FL	Tampa Bay		93		92.5	%	$	321.09
Arbor Village	MI	Jackson		266		89.8	%	$	308.78
Chateau Jonesboro	GA	Atlanta		75		100.0	%	$	298.00
Audubon	FL	Orlando		280		96.1	%	$	325.76
Autumn Forest	NC	Greensboro		299		57.9	%	$	277.50
Avon	MI	Detroit		617		94.8	%	$	463.03
Bermuda Palms	CA	Palm Springs		185		97.8	%	$	373.90
Breazeale	WY	Laramie		117		97.4	%	$	283.37
Buena Vista	ND	Fargo		400		94.5	%	$	315.94
Camden Point	GA	Kingsland		268		39.6	%	$	208.50
Castlewood Estates	GA	Atlanta		334		80.8	%	$	394.44
Casual Estates	NY	Syracuse		961		62.5	%	$	330.76
Cedar Grove	CT	New Haven		60		100.0	%	$	355.06
Cedar Knolls	MN	Minneapolis		458		96.3	%	$	457.38
Chesterfield	MI	Detroit		345		92.5	%	$	443.73
Cimarron Park	MN	St. Paul		505		95.8	%	$	467.43
Clinton	MI	Detroit		1,000		87.8	%	$	446.83
Coach Royale	ID	Boise		91		93.4	%	$	349.78
Colonial Acres	MI	Kalamazoo		612		81.2	%	$	345.50
Riverdale(Colonial Coach)	GA	Atlanta		481		71.9	%	$	363.80
Colonial Manor	MI	Kalamazoo		195		84.6	%	$	321.36
Colony Cove	FL	Sarasota		2,210		98.1	%	$	408.10
Columbia Heights	ND	Grand Forks		302		95.4	%	$	327.83
Country Estates	MI	Grand Rapids		254		77.6	%	$	335.96
Crestview	OK	Stillwater		238		69.7	%	$	222.01
Countryside Village - Denver	CO	Denver		345		90.7	%	$	454.06
Countryside Vlg Jacksonville	FL	Jacksonville		643		84.6	%	$	352.76
Countryside Vlg Longmont	CO	Longmont		310		97.4	%	$	464.13
Eagle Point	WA	Seattle		230		83.0	%	$	536.81
Eastridge Estates	CA	San Jose		187		99.5	%	$	709.52
Eldorado Estates	FL	Daytona Beach		126		94.4	%	$	300.74
Emerald Lake	FL	Fort Myers		201		99.5	%	$	326.54
Evergreen	CT	New Haven		102		98.0	%	$	357.89
Fairways Country Club	FL	Orlando		1,141		99.4	%	$	330.77
Falcon Farms	IL	Moline		215		89.3	%	$	297.86
Ferrand Estates	MI	Grand Rapids		420		97.4	%	$	388.89
Forest Creek	IN	South Bend		167		78.4	%	$	331.34
Fountainvue	IN	Marion		120		81.7	%	$	206.32
Foxhall Village	NC	Raleigh		315		81.9	%	$	371.26
Friendly Village – CO	CO	Greeley		226		97.8	%	$	380.23
Golden Valley	GA	Atlanta		131		71.8	%	$	361.12
Green Acres – CT	CT	New Haven		64		100.0	%	$	354.37
Hickory Knoll	IN	Indianapolis		325		89.5	%	$	368.67
Hidden Valley	FL	Orlando		303		99.7	%	$	361.93
Highland	CT	New Haven		50		92.0	%	$	366.43
Hillcrest	MA	Boston		83		96.4	%	$	391.19
Holiday Estates	MI	Grand Rapids		204		92.6	%	$	367.22

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

Howell	MI	Lansing		455		88.6	%	$	422.12
Knoll Terrace	OR	Salem		212		81.1	%	$	427.39
La Quinta Ridge	CA	Palm Springs		151		92.7	%	$	440.32
Lake in the Hills	MI	Detroit		238		96.2	%	$	438.56
Lakeland Harbor	FL	Tampa		504		99.8	%	$	283.23
Lakeland Junction	FL	Tampa		191		99.5	%	$	227.08
Lakes at Leesburg	FL	Orlando		640		99.7	%	$	294.60
Lakewood Estates IA	IA	Davenport		180		92.2	%	$	324.84
Landmark Village	GA	Atlanta		524		79.0	%	$	340.74
Leisurewoods Rockland	MA	Boston		394		99.2	%	$	372.51
Leisurewoods Taunton	MA	Boston		222		100.0	%	$	344.27
Macomb	MI	Detroit		1,427		85.2	%	$	432.13
Maple Grove Estates	ID	Boise		270		91.5	%	$	364.14
Maple Valley	IL	Kankakee		276		98.6	%	$	317.33
Mariwood	IN	Indianapolis		296		89.2	%	$	358.87
Marnelle	GA	Atlanta		205		86.8	%	$	346.03
Meadow Park	ND	Fargo		117		93.2	%	$	253.36
Novi	MI	Detroit		725		80.3	%	$	471.34
Oak Ridge	IN	South Bend		204		80.4	%	$	288.28
Oakhill	MI	Flint		504		79.4	%	$	407.86
Oakwood Forest	NC	Greensboro		482		71.4	%	$	301.21
Old Orchard	MI	Flint		200		98.5	%	$	373.14
Orange Lake	FL	Orlando		242		93.8	%	$	306.03
Orion	MI	Detroit		423		89.8	%	$	405.66
Palm Beach Colony	FL	West Palm Beach		285		94.4	%	$	340.19
Pine Lakes Ranch	CO	Denver		762		95.5	%	$	447.58
Pinecrest Village	LA	Shreveport		446		75.1	%	$	185.57
Pinewood	MI	Columbus		380		83.7	%	$	358.10
Pleasant Ridge	MI	Lansing		305		55.1	%	$	253.35
President’s Park	ND	Grand Forks		174		83.3	%	$	279.08
Redwood Estates	CO	Denver		754		95.9	%	$	434.62
Regency Lakes	VA	Winchester		384		97.9	%	$	265.39
Riverview	OR	Portland		133		90.2	%	$	461.97
Rosemount Woods	MN	Minneapolis/St. Paul		182		97.3	%	$	442.41
Royal Estates	MI	Kalamazoo		183		87.4	%	$	359.64
Saddlebrook	SC	Charleston		425		92.5	%	$	254.47
Science City	MI	Midland		171		87.1	%	$	332.47
Shady Lane	FL	Clearwater		108		92.6	%	$	315.71
Shady Oaks	FL	Clearwater		250		96.0	%	$	365.18
Shady Village	FL	Clearwater		156		96.8	%	$	350.70
Shenandoah Estates	ID	Boise		154		92.2	%	$	337.01
Skyway	IN	Indianapolis		156		91.7	%	$	356.94
Southwind Village	FL	Naples		337		97.0	%	$	361.49
Springbrook	MI	Utica		398		94.2	%	$	393.56
Starlight Ranch	FL	Orlando		783		94.6	%	$	357.58
Stonegate, LA	LA	Shreveport		157		94.9	%	$	208.05
Swan Creek	MI	Ann Arbor		294		99.0	%	$	393.16
Tarpon Glen	FL	Clearwater		170		87.6	%	$	326.32
Terrace Heights	IA	Dubuque		317		91.5	%	$	299.85
The Colony	CA	Palm Springs		220		98.2	%	$	657.85
The Glen	MA	Boston		36		100.0	%	$	460.24
The Orchard	CA	San Francisco		233		99.6	%	$	671.30
Twenty-Nine Pines	MN	St. Paul		152		89.5	%	$	353.76
Twin Pines	IN	Goshen		238		89.5	%	$	319.34
Valley Vista	MI	Grand Rapids		137		88.3	%	$	372.03
Vance	OH	Columbus		105		81.9	%	$	294.09
Villa	MI	Flint		319		75.2	%	$	378.44
Whispering Pines	FL	Clearwater		392		92.1	%	$	412.00
Woodlake	NC	Greensboro		308		70.1	%	$	295.72
Yorktowne	OH	Cincinnati		354		89.3	%	$	390.14
Greenpark South	AL	Montgomery		421		90.3	%	$	296.93

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

Hoosier Estates	IN	Indianapolis		288		95.5	%	$	214.03
Hunter Ridge	GA	Atlanta		840		81.5	%	$	372.04
Arlington Lakeside	TX	Dallas		233		83.3	%	$	321.87
Beacon Hill Colony	FL	Tampa		201		98.0	%	$	264.54
Beacon Terrace	FL	Tampa		297		99.7	%	$	266.73
Berryman’s Branch	NJ	Philadelphia		257		94.9	%	$	391.01
Creekside	TX	Dallas		583		93.5	%	$	419.52
Crystal Lake Club	FL	Tampa		599		79.6	%	$	312.35
Four Seasons	GA	Atlanta		214		90.7	%	$	332.82
Friendly Village	GA	Atlanta		203		94.1	%	$	419.56
Grand Place	TX	Dallas		334		93.4	%	$	378.04
Greenbriar Village	PA	Allentown		319		99.4	%	$	426.42
Green River Village	CA	Los Angeles		333		99.7	%	$	776.46
Haselton Village	FL	Orlando		292		97.3	%	$	276.81
Jurupa Hills	CA	Los Angeles		322		100.0	%	$	602.30
Lakeside Terrace	FL	Orlando		241		98.8	%	$	236.30
Lamplighter GA	GA	Atlanta		431		86.3	%	$	407.96
Los Ranchos	CA	Los Angeles		389		76.1	%	$	365.14
Mountain View	NV	Las Vegas		349		99.1	%	$	560.44
North Bluff Estates	TX	Austin		274		93.4	%	$	375.96
Northwood	TX	Dallas		451		93.8	%	$	426.96
Parkwood Communities	FL	Orlando		695		95.5	%	$	192.58
Pooles Manor	GA	Atlanta		194		63.9	%	$	358.22
Shadow Hills	FL	Orlando		670		70.9	%	$	360.99
Shadowood	GA	Atlanta		506		79.2	%	$	382.78
Shenandoah Village	NJ	Philadelphia		359		99.4	%	$	377.56
Smokecreek	GA	Atlanta		264		82.2	%	$	366.67
Stonegate Austin	TX	Austin		358		94.1	%	$	400.55
Stonegate Pines	TX	Dallas		160		96.9	%	$	336.78
Stone Mountain	GA	Atlanta		354		82.5	%	$	405.20
Suburban Woods	GA	Atlanta		216		70.4	%	$	377.67
Sunny South Estates	FL	West Palm Beach		319		97.5	%	$	418.75
Tara Woods	FL	Tampa		531		99.2	%	$	360.16
Tierra West	NM	Albuquerque		653		48.7	%	$	349.25
University Village	FL	Orlando		480		78.8	%	$	368.53
Village Green	FL	Vero Beach		780		99.9	%	$	372.77
Westpark	AZ	Phoenix		183		90.7	%	$	369.17
Woodlands of Kennesaw	GA	Atlanta		273		80.2	%	$	407.83
Longview – CO	CO	Longmont		400		99.3	%	$	443.29
Apache East	AZ	Apache Jct		123		91.9	%	$	285.05
Denali Park	AZ	Apache Jct		162		82.7	%	$	299.97
A Garden Walk	FL	West Palm Beach		484		90.7	%	$	347.06
Aztec	NM	Albuquerque		163		74.8	%	$	423.36
Big Country Estates	WY	Cheyenne		251		91.2	%	$	308.62
Carefree Village	FL	Tampa		406		75.4	%	$	347.41
Chisholm Creek Manor	KS	Wichita		254		69.7	%	$	217.37
El Frontier	AZ	Tucson		179		67.6	%	$	198.65
Fernwood	MD	Washington DC		328		96.0	%	$	333.56
Green Acres	VA	Richmond		182		56.6	%	$	318.99
Heritage Point	AL	Montgomery		265		53.2	%	$	336.96
The Hills	WA	Richland		278		80.2	%	$	336.28
Kings & Queens	FL	Lakeland		107		97.2	%	$	197.15
Lakeside	GA	Atlanta		103		87.4	%	$	290.65
Lexington	MD	Washington DC		76		65.8	%	$	278.22
Long Lake	FL	West Palm Beach		134		82.1	%	$	447.51
Longview	NM	Albuquerque		92		70.7	%	$	314.53
Lucerne	FL	Lakeland		140		95.0	%	$	269.98
North Glen Village	IN	Indianapolis		289		89.6	%	$	247.11
The Pines	SC	Charleston		204		59.3	%	$	318.39
Plantation Estates	GA	Atlanta		138		76.8	%	$	294.13
Pondarosa	IN	Indianapolis		147		88.4	%	$	221.43

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

Sea Pines	AL	Mobile		429		40.1	%	$	261.39
Shady Hills	TN	Nashville		251		68.5	%	$	222.34
Southpoint	NM	Albuquerque		282		82.3	%	$	367.14
Saint Clements	MD	Washington DC		201		48.8	%	$	329.70
Suburban	MD	Washington DC		138		87.0	%	$	279.69
Sunset Vista	UT	Salt Lake City		207		84.1	%	$	271.38
Town & Country Estates	AZ	Tucson		320		87.5	%	$	277.29
Trailmont	TN	Nashville		131		96.9	%	$	381.23
Village Glen	FL	Orlando		143		86.0	%	$	313.90
Village Park	NM	Albuquerque		180		71.7	%	$	365.55
Weststar	AZ	Tucson		90		87.8	%	$	419.44
Winter Haven	FL	Lakeland		238		92.4	%	$	309.85
Woodland Hills	AL	Montgomery		628		71.3	%	$	300.29

Subtotal stable portfolio		185		60,622		87.1	%	$	368.23

*Expansion*
Algoma Estates	MI	Grand Rapids		343		85.4	%	$	323.30
Broadmore	IN	South Bend		370		67.8	%	$	304.51
Butler Creek	GA	Augusta		376		58.0	%	$	224.68
Canterbury Estates	MI	Grand Rapids		290		62.4	%	$	285.12
Carnes Crossing	SC	Summerville		604		77.6	%	$	236.18
Timber Heights	MI	Flint		221		82.8	%	$	373.10
Conway Plantation	SC	Myrtle Beach		299		66.6	%	$	216.04
Cranberry Lake	MI	Pontiac		328		81.4	%	$	421.60
Crystal Lakes – Zephyrhills	FL	Tampa		330		65.2	%	$	177.78
Del Tura	FL	Fort Myers		1,344		88.5	%	$	474.89
Eagle Creek	TX	Tyler		194		75.3	%	$	199.82
Forest Lake Estates	MI	Grand Rapids		221		66.1	%	$	348.62
Foxwood Farms	FL	Orlando		375		80.8	%	$	257.92
Grand Blanc	MI	Flint		478		74.1	%	$	431.02
Hunter’s Chase	OH	Lima		135		68.9	%	$	192.97
Huron Estates	MI	Flint		111		85.6	%	$	240.84
Indian Rocks	FL	Clearwater		148		73.6	%	$	293.38
Lakewood – AL	AL	Montgomery		396		41.7	%	$	196.40
Leonard Gardens	MI	Grand Rapids		319		73.7	%	$	350.93
Midway Estates	FL	Vero Beach		204		59.8	%	$	374.72
Norton Shores	MI	Grand Rapids		656		75.2	%	$	313.72
Pedaler’s Pond	FL	Orlando		214		80.8	%	$	242.67
Sherwood	IN	Marion		134		43.3	%	$	226.02
Springfield Farms	MO	Springfield		290		56.2	%	$	208.84
The Highlands	MI	Flint		682		85.5	%	$	334.40
Torrey Hills	MI	Flint		377		84.4	%	$	370.50
Westbrook	MI	Detroit		388		90.5	%	$	451.28
Winter Haven Oaks	FL	Orlando		343		54.2	%	$	238.88
Yankee Springs	MI	Grand Rapids		284		76.4	%	$	290.32
Misty Winds	TX	Corpus Christi		354		87.3	%	$	300.68
Palm Valley	FL	Orlando		790		82.9	%	$	381.86
Pinelake Gardens	FL	Vero Beach		532		88.3	%	$	350.00

Subtotal expansion portfolio		32		12,130		75.9	%	$	335.25

*Development*
Glenmoor	MI	Battle Creek		41		68.3	%	$	193.13
Oakley Point	SC	North Charleston		91		16.5	%	$	202.97
Harston Woods	TX	Fort Worth		145		42.8	%	$	263.33
Prairie Greens	CO	Denver		139		28.8	%	$	378.48
Maple Run	MI	Clio		146		65.8	%	$	291.32
Pine Lakes	MI	Lapeer		136		65.4	%	$	345.62
Antelope Ridge	CO	Colorado Springs		246		44.3	%	$	339.01
Holly Hills	MI	Holly		174		55.7	%	$	229.25
Onion Creek	TX	Austin		350		48.9	%	$	333.15
Deerfield Manor	MI	Grand Rapids		96		43.8	%	$	257.10

Community

State

Location (Closest
Major City)

Total
Number of
Sites

Occupancy

Weighted
Average
Monthly Rent
per Site

Wolf Creek

Des Moines

10.0

993.72

Subtotal development portfolio

1,644

46.0

293.44

Total portfolio

228

74,396

84.4

363.41

Item 6.

Exhibits and Reports on Form 8-K

(a)	Exhibits and Index of Exhibits
	31.1	Certification of the Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2	Certification of the Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1	Certification of the Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2	Certification of the Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b)	Reports on Form 8-K
	None.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, and in the capacities indicated, on the 8^th day of August, 2003.

	CP LIMITED PARTNERSHIP
	By:	CHATEAU COMMUNITIES, INC.


	By:	/s/ TAMARA D. FISCHER

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

CP LTD PARTNERSHIP 10-Q