<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
-----------------------
APRIL 17, 1998
(Date of Report (Date of Earliest Event Reported))
CP LIMITED PARTNERSHIP
(Exact Name of Registrant as Specified in Its Charter)
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<S> <C> <C>
MARYLAND 033-85492 38-3140664
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification Number)
6430 SO. QUEBEC STREET, ENGLEWOOD, COLORADO 80111
(Address of Principal Executive Offices) (Zip Code)
</TABLE>
(303) 741-3707
(Registrant's Telephone Number, Including Area Code)
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<PAGE> 2
In the Form 10-K for CP Limited Partnership (the "Company") for the
year ended December 31, 1997 and in the Company's Form 8-K dated April 20, 1998,
the Company respectively announced the acquisition of two portfolios of
manufactured housing communities, the Tuff's Portfolio (consisting of six
properties, one in Michigan and five in Indiana), and the Williams Portfolio
(consisting of 12 properties, ten in Michigan and two in North Carolina). Set
forth below are certain financial statements relating to each Portfolio and pro
forma financial information for the Company:
Item 7: Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements:
The Audited Combined Statement of Revenues and Certain
Expenses of Arbor Village, Canterbury, Huron, Sun Valley,
Millbrook, Pinewood, Springbrook, Swan Creek, Yankee
Springs, Autumn Forest and Woodlake for the year ended
December 31, 1997.
The Audited Combined Historical Summary of Revenues and Direct
Operating Expenses of Sherwood, Oak Ridge Estates, Forest
Creek, Three Oaks, Highlands and FountainVue for the year
ended December 31, 1997.
(b) Pro Forma Financial Information:
Pro Forma Condensed Statements of Income of the Company for
the three months ended March 31, 1998 and for the year ended
December 31, 1997.
Pro Forma Condensed Balance Sheet of the Company as of
March 31, 1998.
(c) Exhibits:
23.1 Consent of Coopers & Lybrand L.L.P.
2
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: June 30, 1998 CP LIMITED PARTNERSHIP
By: Chateau Communities, Inc.
as general partner
By: /s/Tamara D. Fischer
-------------------------
Tamara D. Fischer
Chief Financial Officer
3
<PAGE> 4
ARBOR VILLAGE, CANTERBURY ESTATES,
HURON ESTATES, SUN VALLEY,
MILLBROOK MANOR, PINEWOOD CREEK,
SPRINGBROOK MANOR, SWAN CREEK,
YANKEE SPRINGS MEADOWS, AUTUMN FOREST,
WOODLAKE AND VALLEY VISTA PROPERTIES
(WILLIAMS PORTFOLIO)
REPORT ON AUDIT OF THE COMBINED STATEMENT
OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1997
<PAGE> 5
ARBOR VILLAGE, CANTERBURY ESTATES, HURON ESTATES, SUN VALLEY, MILLBROOK MANOR,
PINEWOOD CREEK, SPRINGBROOK MANOR, SWAN CREEK, YANKEE SPRINGS MEADOWS, AUTUMN
FOREST, WOODLAKE AND VALLEY VISTA PROPERTIES
(WILLIAMS PORTFOLIO)
CONTENTS
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PAGES
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Financial Statements
Report of Independent Accountants ............................................................. 1
Combined Statement of Revenues and Certain Expenses ........................................... 2
Notes to Combined Statement of Revenues and Certain Expenses .................................. 3
</TABLE>
<PAGE> 6
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of CP Limited Partnership:
We have audited the accompanying combined statement of revenues and certain
expenses of Arbor Village, Canterbury Estates, Huron Estates, Sun Valley,
Millbrook Manor, Pinewood Creek, Springbrook Manor, Swan Creek, Yankee Springs
Meadows, Autumn Forest, Woodlake and Valley Vista properties (Williams
Portfolio) for the year ended December 31, 1997. This financial statement is the
responsibility of the management of the properties. Our responsibility is to
express an opinion on this statement of revenue and certain expenses based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the combined statement of revenues and certain expenses
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the combined statement of
revenues and certain expenses. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall presentation of the combined statement of revenues and
certain expenses. We believe our audit provides a reasonable basis for our
opinion.
The accompanying combined statement of revenues and certain expenses was
prepared for the purpose of complying with certain rules and regulations of the
Securities and Exchange Commission (for the inclusion in a Form 8-K filing of CP
Limited Partnership and Chateau Communities, Inc.) as described in Note 2 and is
not intended to be a complete presentation of the combined revenues and expenses
of Arbor Village, Canterbury Estates, Huron Estates, Sun Valley, Millbrook
Manor, Pinewood Creek, Springbrook Manor, Swan Creek, Yankee Springs Meadows,
Autumn Forest, Woodlake and Valley Vista properties.
In our opinion, the combined statement of revenues and certain expenses for the
year ended December 31, 1997 presents fairly, in all material aspects, the
combined revenues and certain expenses of Arbor Village, Canterbury Estates,
Huron Estates, Sun Valley, Millbrook Manor, Pinewood Creek, Springbrook Manor,
Swan Creek, Yankee Springs Meadows, Autumn Forest, Woodlake and Valley Vista
properties for the year ended December 31, 1997, in conformity with generally
accepted accounting principles.
/s/ Coopers & Lybrand L.L.P.
Detroit, Michigan
May 8, 1998
<PAGE> 7
ARBOR VILLAGE, CANTERBURY ESTATES, HURON ESTATES, SUN VALLEY, MILLBROOK MANOR,
PINEWOOD CREEK, SPRINGBROOK MANOR, SWAN CREEK, YANKEE SPRINGS MEADOWS, AUTUMN
FOREST, WOODLAKE AND VALLEY VISTA PROPERTIES
(WILLIAMS PORTFOLIO)
COMBINED STATEMENT OF REVENUES AND CERTAIN EXPENSES
For the year ended December 31, 1997
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Revenues:
Rental income $7,690,000
Other income 277,000
----------
7,967,000
Certain expenses:
Property, operating and maintenance 1,860,000
Utilities 687,000
Real estate taxes 524,000
----------
3,071,000
----------
Revenues in excess of certain expenses $4,896,000
==========
</TABLE>
The accompanying notes are an integral part of this financial statement.
<PAGE> 8
ARBOR VILLAGE, CANTERBURY ESTATES, HURON ESTATES, SUN VALLEY, MILLBROOK MANOR,
PINEWOOD CREEK, SPRINGBROOK MANOR, SWAN CREEK, YANKEE SPRINGS MEADOWS, AUTUMN
FOREST, WOODLAKE AND VALLEY VISTA PROPERTIES
(WILLIAMS PORTFOLIO)
NOTES TO COMBINED STATEMENT OF REVENUES AND CERTAIN EXPENSES
1. BUSINESS
The Combined Statement of Revenues and Certain Expenses includes the
operations of Arbor Village, Canterbury Estates, Huron Estates, Sun
Valley, Millbrook Manor, Pinewood Creek, Springbrook Manor, Swan Creek,
Yankee Springs Meadows, Autumn Forest, Woodlake and Valley Vista
properties ("The Properties" or the "Williams Portfolio"). The
Properties consist of twelve manufactured home community properties
located in Michigan and North Carolina. These properties were
transferred to CP Limited Partnership on various dates in April 1998
except for Valley Vista which is expected to transfer in early June
1998.
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Number of
Property Name Home Sites
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Arbor Village, Parma, MI 267
Canterbury Estates, Iona, MI 209
Huron Estates, Iverness, MI 111
Sun Valley, Jackson, MI 220
Millbrook Manor, Mt. Pleasant, MI 305
Pinewood Creek, Richmond, MI 380
Springbrook Manor, Romeo, MI 394
Swan Creek, Ypsilanti, MI 294
Yankee Springs Meadows, Berrian Springs, MI 284
Autumn Forest, Greensboro, NC 306
Woodlake, Greensboro, NC 315
Valley Vista, Lowell, MI 137
</TABLE>
<PAGE> 9
ARBOR VILLAGE, CANTERBURY ESTATES, HURON ESTATES, SUN VALLEY, MILLBROOK MANOR,
PINEWOOD CREEK, SPRINGBROOK MANOR, SWAN CREEK, YANKEE SPRINGS MEADOWS, AUTUMN
FOREST, WOODLAKE AND VALLEY VISTA PROPERTIES
(WILLIAMS PORTFOLIO)
NOTES TO COMBINED STATEMENT OF REVENUES AND CERTAIN EXPENSES (CONTINUED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accounts of each property are combined in the statement of revenues
and certain expenses. The financial statement is not representative of
the actual operations for the year presented as certain expenses that
may not be comparable to the expenses expected to be incurred in the
future operations of the acquired properties have been excluded in
accordance with Rule 3-14 of Regulation S-X of the Securities and
Exchange Commission. Expenses excluded consist of interest,
depreciation, amortization, and other costs not directly related to the
future operations of the properties.
REVENUE AND EXPENSE RECOGNITION
Rental income and expenses have been recognized on the cash basis of
accounting. The amount of rental revenue and operating expenses
recognized under the cash basis of accounting approximates the amount
that would have been recognized under generally accepted accounting
principles.
ESTIMATES
The preparation of financial statements requires management to make
estimates and assumptions. Actual results could differ from estimates.
<PAGE> 10
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
Chateau Communities, Inc.:
We have audited the accompanying Combined Historical Summary of Revenues and
Direct Operating Expenses (the "Combined Historical Summary") of Sherwood, Oak
Ridge Estates, Forest Creek, Three Oaks, Highlands and FountainVue (the
"Properties") for the year ended December 31, 1997. The Combined Historical
Summary is the responsibility of the Properties' owner. Our responsibility is to
express an opinion on the Combined Historical Summary based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the Combined Historical Summary is free of
material misstatement. An audit includes examining on a test basis, evidence
supporting the amounts and disclosures in the Combined Historical Summary. An
audit also includes assessing the basis of accounting used and significant
estimates made by management, as well as evaluating the overall presentation of
the Combined Historical Summary. We believe our audit provides a reasonable
basis for our opinion.
The accompanying Combined Historical Summary was prepared for the purpose of
complying with rules and regulations of the Securities and Exchange Commission,
as described in Note A, and is not intended to be a complete presentation of the
Properties' revenues and expenses and may not be comparable to results from
proposed future operations of the Properties.
In our opinion, the Combined Historical Summary referred to above presents
fairly, in all material respects, the revenues and direct operating expenses,
described in Note A, of Sherwood, Oak Ridge Estates, Forest Creek, Three Oaks,
Highlands and FountainVue for the year ended December 31, 1997, in conformity
with generally accepted accounting principles.
/s/ Coopers & Lybrand L.L.P.
South Bend, Indiana
April 22, 1998
<PAGE> 11
COMBINED HISTORICAL SUMMARY OF REVENUES AND
DIRECT OPERATING EXPENSES
for the year ended December 31, 1997
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Revenues:
Rental income $ 3,872,191
Other 46,817
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Total revenues 3,919,008
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Direct operating expenses:
On-site management 782,426
Real estate taxes 361,509
Utilities 358,827
Repairs and maintenance 258,443
Other 18,872
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Total direct operating expenses 1,780,077
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Revenues in excess of direct operating expenses $ 2,138,931
================
</TABLE>
SHERWOOD, OAK RIDGE ESTATES, FOREST CREEK, THREE OAKS, HIGHLANDS AND
FOUNTAINVUE PROPERTIES
The accompanying notes are a part of the combined historical summary.
<PAGE> 12
NOTE TO COMBINED HISTORICAL SUMMARY OF REVENUES AND DIRECT
OPERATING EXPENSES
A. PROPERTY AND BASIS OF ACCOUNTING.
The accompanying Combined Historical Summary of Revenues and Direct
Operating Ex- penses has been prepared in accordance with Rule 3-14 of
Regulation S-X of the Securities and Exchange Commission and relates to
the operations of Sherwood, Oak Ridge Estates, Forest Creek, Three Oaks,
Highlands and FountainVue (the "Properties").
The Properties operate six manufactured housing communities located in:
Sherwood Hartford City, Indiana
Oak Ridge Estates Elkhart, Indiana
Forest Creek Elkhart, Indiana
Three Oaks Goshen, Indiana
Highlands Mt. Morris, Michigan
FountainVue LaFontaine, Indiana
The Properties also operate mini-storage facilities at the Forest Creek
and Oak Ridge Estates communities.
In accordance with Rule 3-14, direct operating expenses are presented
exclusive of depreci- ation, interest, management fees, and income taxes.
Rental income attributable to residential leases is recorded when due
from tenants.
B. RELATED PARTY TRANSACTIONS.
The direct operating expenses (on-site management and repairs and
maintenance) for the year ended December 31, 1997 include certain amounts
paid to a related party. The Proper- ties are held by four limited
liability partnerships and a corporation and are related through common
ownership by the general partner of the partnerships and the principal
stockholder to a related entity. Amounts paid by the Properties to the
related entity for park management, maintenance and other services
aggregated $295,614 for the year ended December 31, 1997.
<PAGE> 13
CP LIMITED PARTNERSHIP
Pro Forma Condensed Statements of Income
For the Three Months Ended March 31, 1998
and the Year Ended December 31, 1997
The following unaudited pro forma condensed statements of income have been
presented as if the acquisitions of the Tuffs and Williams portfolios and the
issuance of common and preferred OP Units, the proceeds of which were used to
finance the acquisitions, had been completed as of January 1, 1997. The
unaudited pro forma statements of income and related notes should be read in
conjunction with CP Limited Partnership's (the "Company") audited financial
statements which are included in the Company's Annual Report on Form 10-K as
filed with the Securities and Exchange Commission (the "Commission"). The
unaudited condensed pro forma statements of income are not necessarily
indicative of what actual results of operations of the Company would have been
nor does it represent the results of operations of the Company for future
periods.
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For the Three Months Ended March 31, 1998
---------------------------------------------------------------------------
Tuffs Williams Pro Forma
Historical Acquisition Acquisition Adjustments Pro Forma
---------------------------------------------------------------------------
(Note 1) (Note 2) (Note 2) (Note 3)
Dollars In thousands
<S> <C> <C> <C> <C> <C>
Revenues:
Rental income $39,093 $601 $2,266 - $41,960
Management, interest and other income 1,112 55 102 1,269
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40,205 656 2,368 - 43,229
Expenses:
Property operating and maintenance 11,076 240 683 - 11,999
Real estate taxes 2,955 60 14 - 3,029
Depreciation and amortization 9,109 - 1,119 a 10,228
Administrative 2,150 - 37 b 2,187
Interest and related amortization 7,546 - 328 c 7,874
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32,836 300 697 1,484 35,317
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Net Income 7,369 356 1,671 (1,484) 7,912
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Preferred distributions - - 908 d 908
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Net income available to common OP 7,369 356 1,671 (2,392) 7,004
Unitholders
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Net income available to common OP
Unitholders attributed to:
General partner 6,590 6,163
Limited partners 779 841
-------------- ---------------
7,369 7,004
============== ===============
Basic earnings per OP Unit $0.25 $0.23
============== ===============
Diluted earnings per OP Unit $0.25 $0.23
============== ===============
Weighted average OP Units outstanding 29,486 1,070 e 30,556
===========================================================================
</TABLE>
The accompanying notes are an integral part of the pro forma
condensed financial statements.
<PAGE> 14
<TABLE>
<CAPTION>
For the Year Ended December 31, 1997
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Tuffs Williams Pro Forma
Historical Acquisition Acquisition Adjustments Pro Forma
-------------------------------------------------------------------------
(Note 1) (Note 2) (Note 2) (Note 3)
Dollars In thousands
<S> <C> <C> <C> <C> <C>
Revenues:
Rental income $134,801 $3,872 $7,690 - $146,363
Management, interest and other income 3,368 47 277 3,692
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138,169 3,919 7,967 - 150,055
Expenses:
Property operating and maintenance 39,146 1,418 2,547 43,111
Real estate taxes 9,946 362 524 - 10,832
Depreciation and amortization 31,510 4,987 a 36,497
Administrative 6,961 200 b 7,161
Interest and related amortization 25,918 1,463 c 27,381
-------------------------------------------------------------------------
113,481 1,780 3,071 6,650 124,982
-------------------------------------------------------------------------
Net Income 24,688 2,139 4,896 (6,650) 25,073
-------------------------------------------------------------------------
Preferred distributions - 3,632 d 3,632
=========================================================================
Net income available to common OP Unitholders 24,688 2,139 4,896 (10,282) 21,441
=========================================================================
Net income available to common OP Unitholders
Attributed to:
General partner 21,702 18,574
Limited partners 2,986 2,867
-------------- ---------------
24,688 21,441
============== ===============
Basic earnings per OP Unit $0.92 $0.75
============== ===============
Diluted earnings per OP Unit $0.91 $0.75
============== ===============
Weighted average OP Units outstanding 26,947 1,545 e 28,492
=========================================================================
</TABLE>
The accompanying notes are an integral part of the pro forma
condensed financial statements.
<PAGE> 15
CP LIMITED PARTNERSHIP
Pro Forma Condensed Balance Sheet
as of March 31, 1998
The following unaudited pro forma condensed balance sheet has been presented as
if the acquisition of the Williams portfolio and the issuance of the related
common and preferred OP Units had been completed on March 31, 1998. The
unaudited pro forma condensed balance sheet should be read in conjunction with
the Company's audited financial statements which are included in the Company's
Annual Report on Form 10-K as filed with the Commission. The unaudited pro forma
condensed balance sheet is not necessarily indicative of what the actual
financial position of the Company would have been nor does it represent the
future financial position of the Company.
<TABLE>
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HISTORICAL WILLIAMS
MARCH 31, 1998 ACQUISITION PRO FORMA
----------------- --------------- ----------------
(Note 1) (Note 4)
(in thousands)
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ASSETS
Rental Property
Land $124,657 $10,251 $134,908
Land and improvements for expansion sites 16,999 16,999
Depreciable property 790,106 69,119 859,225
----------------- --------------- ----------------
931,762 79,370 1,011,132
Less accumulated depreciation 121,302 121,302
----------------- --------------- ----------------
Net rental property 810,460 79,370 889,830
Cash and cash equivalents 441 441
Receivables 2,857 2,857
Notes receivable 8,124 8,124
Investment in and advances to affiliates 33,575 33,575
Prepaid expenses and other assets 10,799 10,799
----------------- --------------- ----------------
Total assets $866,256 $79,370 $945,626
================= =============== ================
LIABILITIES
Debt $409,552 $17,376 $426,928
Accounts payable and accrued expenses 19,896 19,896
Tenants' security deposits and rents received in advance 7,554 7,554
Accrued distributions 13,858 13,858
----------------- --------------- ----------------
Total liabilities 450,860 17,376 468,236
Preferred OP Units 44,700 44,700
PARTNERS' CAPITAL, Unlimited Authorized units;
30,474 and 31,025 OP units outstanding at
March 31, 1998 and pro forma respectively
General partners 372,576 372,576
Limited partners 42,820 17,294 60,114
----------------- --------------- ----------------
Total partners' capital 415,396 17,294 432,690
Total liabilities and partners' capital $866,256 $79,370 $945,626
================= =============== ================
</TABLE>
The accompanying notes are an integral part of the pro
forma financial statements.
<PAGE> 16
CP LIMITED PARTNERSHIP
NOTES TO PRO FORMA CONDENSED FINANCIAL STATEMENTS
1. HISTORICAL FINANCIAL STATEMENTS:
The historical financial statements, which are included in the Company's
Quarterly Report on Form 10-Q and its Annual Report on Form 10-K as filed
with the Commission, include the accounts of the Company and its
consolidated subsidiaries for the three months ended March 31, 1998 and the
year ended December 31, 1997.
2. ACQUISITIONS - STATEMENTS OF INCOME:
The revenues and expenses of the Tuffs Acquisition and the Williams
Acquisition included in the Company's condensed pro forma financial
statements for the three months ended March 31, 1998 and the year ended
December 31, 1997 reflect historical results for the six communities in the
Tuff portfolio and the 12 communities in the Williams portfolio for the
period from January 1, 1997 to the date of acquisition.
3. PRO FORMA ADJUSTMENTS - STATEMENTS OF INCOME:
The pro forma adjustments for the Pro Forma Condensed Statements of Income
are as follows:
<TABLE>
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Three Months Year
Ended Ended
March 31, December 31,
1998 1997
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a. Depreciation of acquired properties based
on an average 20 year useful life $1,119 $4,987
b. This amount represents an increase in
Administrative expense. $ 37 $ 200
c. Interest on $19.5 million of mortgage
indebtedness incurred, at a weighted
average rate of 7.4 percent for the
period from January 1, 1997 to the date
of acquisition $ 328 $1,463
d. Adjustment for declared distributions on
$44.7 million in preferred OP Units at a rate
of 8.125 percent for the period from January 1,
1997 to the date of acquisition. $ 908 $3,632
e. Represents an adjustment for the issuance of
the common OP Units to finance the acquisition
for the period from January 1, 1997 to the actual
date of issuance. 1,070 1,545
</TABLE>
<PAGE> 17
CP LIMITED PARTNERSHIP
NOTES TO PRO FORMA CONDENSED FINANCIAL STATEMENTS
4. ACQUISITIONS - BALANCE SHEET:
Amounts presented reflect the acquisition of the 12 communities in the
Williams portfolio, which occurred in April 1998. The acquisition was
initially financed with the assumption of $12.5 million of mortgage
indebtedness, a borrowing of $44.7 million in the Company's line of credit
and the issuance of approximately 551,000 of common OP Units. On April 20,
1998, the Company issued $75 million of preferred OP Units and used $44.7
million of the proceeds to repay the borrowings outstanding under its line
of credit.
<PAGE> 1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTS
We consent to the inclusion in the filing of CP Limited Partnership on Form 8-K
and incorporated by reference in (i) the Registration Statement of Chateau
Communities, Inc. and CP Limited Partnership on Form S-3 (File Nos. 333-4544,
333-4544-01, and 333-43981, 333-43981-01), of our reports, dated April 22, 1998
and May 8, 1998, on our audits of the combined historical summary of revenues
and direct operating expenses of Sherwood, Oak Ridge Estates, Forest Creek,
Three Oaks, Highlands, and FountainVue for the year ended December 31, 1997 and
the combined statement of revenues and certain expenses of Arbor Village,
Canterbury, Huron, Sun Valley, Millbrook, Pinewood, Springbrook, Swan Creek,
Yankee Springs, Autumn Forest, and Wood Lake for the year ended December 31,
1997, respectively.
/s/ Coopers & Lybrand L.L.P.
Denver, Colorado
June 30, 1998
