FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT of 1934
For the quarterly period ended March 31, 2003
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OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT of 1934
For the transition period from _____________________ to _____________________
Commission file number
0-15666
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CNL Income Fund, Ltd.
- -----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 59-2666264
- -------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
450 South Orange Avenue
Orlando, Florida 32801
- -------------------------------- -------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number
(including area code) (407) 540-2000
-------------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No _________
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act): Yes____ No X
CONTENTS
Page
Part I.
Item 1. Financial Statements:
Condensed Balance Sheets 1
Condensed Statements of Income 2
Condensed Statements of Partners' Capital 3
Condensed Statements of Cash Flows 4
Notes to Condensed Financial Statements 5-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-10
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 10
Item 4. Controls and Procedures 10
Part II.
Other Information 11-12
CNL INCOME FUND, LTD.
(A Florida Limited Partnership)
CONDENSED BALANCE SHEETS
March 31, December 31,
2003 2002
------------------- -------------------
ASSETS
Real estate properties with operating leases, net $ 4,377,213 $ 4,408,184
Real estate held for sale -- 290,280
Investment in joint ventures 433,160 435,495
Cash and cash equivalents 688,058 419,385
Receivables -- 19,656
Accrued rental income 56,539 54,479
Other assets 5,895 4,172
------------------- -------------------
$ 5,560,865 $ 5,631,651
=================== ===================
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 11,183 $ 831
Real estate taxes payable 7,770 13,433
Distributions payable 407,040 161,343
Due to related parties 178,727 166,556
Rents paid in advance and deposits 41,455 43,025
------------------- -------------------
Total liabilities 646,175 385,188
Partners' capital 4,914,690 5,246,463
------------------- -------------------
$ 5,560,865 $ 5,631,651
=================== ===================
See accompanying notes to condensed financial statements.
CNL INCOME FUND, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF INCOME
Quarter Ended
March 31,
2003 2002
---------------- ----------------
Revenues:
Rental income from operating leases $ 137,907 $ 148,610
Contingent rental income 2,099 16,602
Interest and other income 226 1,211
---------------- ----------------
140,232 166,423
---------------- ----------------
Expenses:
General operating and administrative 38,482 44,068
Property expenses 878 2,523
State and other taxes 7,599 2,993
Depreciation 30,972 32,448
---------------- ----------------
77,931 82,032
---------------- ----------------
Income Before Gain on Sale of Real Estate Properties and
Equity in Earnings of Joint Ventures 62,301 84,391
Gain on Sale of Real Estate Properties -- 348,026
Equity in Earnings of Joint Ventures 12,111 23,410
---------------- ----------------
Income from Continuing Operations 74,412 455,827
---------------- ----------------
Discontinued Operations (Note 3):
Income from discontinued operations 2,247 3,178
Loss on disposal of discontinued operations (1,392 ) --
---------------- ----------------
855 3,178
---------------- ----------------
Net Income $ 75,267 $ 459,005
================ ================
Income Per Limited Partner Unit
Continuing Operations $ 2.48 $ 15.19
Discontinued Operations .03 0.11
---------------- ----------------
$ 2.51 $ 15.30
================ ================
Weighted Average Number of Limited Partner
Units Outstanding 30,000 30,000
================ ================
See accompanying notes to condensed financial statements.
CNL INCOME FUND, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF PARTNERS' CAPITAL
Quarter Ended Year Ended
March 31, December 31,
2003 2002
-------------------- ------------------
General partners:
Beginning balance $ 340,768 $ 340,768
Net income -- --
-------------------- ------------------
340,768 340,768
-------------------- ------------------
Limited partners:
Beginning balance 4,905,695 6,141,384
Net income 75,267 975,172
Distributions ($13.57 and $73.70 per
limited partner unit, respectively) (407,040 ) (2,210,861 )
-------------------- ------------------
4,573,922 4,905,695
-------------------- ------------------
Total partners' capital $ 4,914,690 $ 5,246,463
==================== ==================
See accompanying notes to condensed financial statements.
CNL INCOME FUND, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF CASH FLOWS
Quarter Ended
March 31,
2003 2002
--------------- ---------------
Increase (Decrease) in Cash and Cash Equivalents:
Net Cash Provided by Operating Activities $ 132,129 $ 168,097
--------------- ---------------
Cash Flows from Investing Activities:
Proceeds from sale of real estate properties 297,887 1,064,259
--------------- ---------------
Net cash provided by investing activities 297,887 1,064,259
--------------- ---------------
Cash Flows from Financing Activities:
Distributions to limited partners (161,343 ) (207,167 )
--------------- ---------------
Net cash used in financing activities (161,343 ) (207,167 )
--------------- ---------------
Net Increase in Cash and Cash Equivalents 268,673 1,025,189
Cash and Cash Equivalents at Beginning of Quarter 419,385 414,999
--------------- ---------------
Cash and Cash Equivalents at End of Quarter $ 688,058 $ 1,440,188
=============== ===============
Supplemental Schedule of Non-Cash Investing and
Financing Activities:
Deferred real estate disposition fee incurred and
unpaid at end of quarter $ 9,000 $ 32,215
=============== ===============
Distributions declared and unpaid at end of
quarter $ 407,040 $ 1,069,399
=============== ===============
See accompanying notes to condensed financial statements.
CNL INCOME FUND, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters Ended March 31, 2003 and 2002
1. Basis of Presentation:
---------------------
The accompanying unaudited condensed financial statements have been
prepared in accordance with the instructions to Form 10-Q and do not
include all of the information and note disclosures required by
generally accepted accounting principles. The financial statements
reflect all adjustments, consisting of normal recurring adjustments,
which are, in the opinion of the general partners, necessary to a fair
statement of the results for the interim periods presented. Operating
results for the quarter ended March 31, 2003 may not be indicative of
the results that may be expected for the year ending December 31, 2003.
Amounts as of December 31, 2002, included in the financial statements,
have been derived from audited financial statements as of that date.
These unaudited financial statements should be read in conjunction with
the financial statements and notes thereto included in Form 10-K of CNL
Income Fund, Ltd. (the "Partnership") for the year ended December 31,
2002.
In January 2003, FASB issued FASB Interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities" to expand upon and
strengthen existing accounting guidance that addresses when a company
should include the assets, liabilities and activities of another entity
in its financial statements. To improve financial reporting by
companies involved with variable interest entities (more commonly
referred to as special-purpose entities or off-balance sheet
structures), FIN 46 requires that a variable interest entity be
consolidated by a company if that company is subject to a majority risk
of loss from the variable interest entity's activities or entitled to
receive a majority of the entity's residual returns or both. Prior to
FIN 46, a company generally included another entity in its consolidated
financial statements only if it controlled the entity through voting
interests. Consolidation of variable interest entities will provide
more complete information about the resources, obligations, risks and
opportunities of the consolidated company. The consolidation
requirements of FIN 46 apply immediately to variable interest entities
created after January 31, 2003, and to older entities, in the first
fiscal year or interim period beginning after June 15, 2003. The
general partners believe adoption of this standard may result in either
consolidation or additional disclosure requirements with respect to the
Partnership's unconsolidated joint ventures or properties held with
affiliates of the general partners as tenants-in-common, which are
currently accounted for under the equity method. However, such
consolidation is not expected to significantly impact the Partnership's
results of operations.
2. Reclassification:
----------------
Certain items in the prior year's financial statements have been
reclassified to conform to 2003 presentation. These reclassifications
had no effect on total partners' capital or net income.
3. Discontinued Operations:
-----------------------
During 2002, the Partnership identified for sale one property that was
classified as Discontinued Operations in the accompanying financial
statements. In January 2003, the Partnership sold the property
resulting in a loss on disposal of discontinued operations of
approximately $1,400 during the quarter ended March 31, 2003. The
Partnership had recorded a provision for write-down of assets in a
previous year related to this property.
CNL INCOME FUND, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters Ended March 31, 2003 and 2002
3. Discontinued Operations - Continued:
-----------------------------------
The operating results of the discontinued operations for the above
property are as follows:
March 31,
2003 2002
------------- --------------
Rental revenues $ 2,247 $ 7,654
Expenses -- (4,476 )
Loss on sale of assets (1,392 ) --
------------- --------------
Income from discontinued
operations $ 855 $ 3,178
============= ==============
4. Concentration of Credit Risk:
----------------------------
The following schedule presents total rental revenues from individual
lessees, each representing more than 10% of the Partnership's total
rental revenues (including the Partnership's share of rental revenues
from the joint venture and the property held as tenants-in-common with
affiliates of the general partners) for each of the quarters ended
March 31:
2003 2002
--------------- --------------
The Ground Round, Inc. $ 22,131 $ 22,131
AJZ, Inc. 21,194 21,194
Wendy's Old Fashioned Hamburgers
of New York, Inc. 20,528 20,528
Wen-Atlanta, Inc. 20,132 N/A
JMJ, LLC. 15,686 N/A
Wendy's International, Inc. N/A 28,221
In addition, the following schedule presents total rental revenues from
individual restaurant chains, each representing more than 10% of the
Partnership's total rental revenues (including the Partnership's share
of rental revenues from the joint venture and the property held as
tenants-in-common with affiliates of the general partners) for each of
the quarters ended March 31:
2003 2002
-------------- --------------
Wendy's $ 70,509 $ 94,903
The Ground Round 22,131 22,131
A.J. Gators 21,194 21,194
The information denoted by N/A indicates that for each period
presented, the tenant did not represent more than 10% of the
Partnership's total rental revenues.
Although the Partnership's properties have some geographic diversity in
the United States and the Partnership's lessees operate a variety of
restaurant concepts, default by any lessee or restaurant chain
contributing more than 10% of the Partnership's revenues will
significantly impact the results of operations of the Partnership if
the Partnership is not able to re-lease the properties in a timely
manner.
CNL INCOME FUND, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters Ended March 31, 2003 and 2002
5. Related Party Transactions:
--------------------------
An affiliate of the Partnership is entitled to receive a deferred,
subordinated real estate disposition fee, payable upon the sale of one
or more properties based on the lesser of one-half of a competitive
real estate commission or three percent of the sales price if the
affiliate provides a substantial amount of services in connection with
the sale. However, if the net sales proceeds are reinvested in a
replacement property, no such real estate dispositions fees will be
incurred until such replacement property is sold and the net sales
proceeds are distributed. The payment of the real estate disposition
fee is subordinated to receipt by the limited partners of their
aggregate 10% preferred return, plus their adjusted capital
contributions. During the quarters ended March 31, 2003 and 2002, the
Partnership incurred deferred, subordinated real estate disposition
fees of $9,000 and $32,215, respectively, as a result of the sale of
one property during each quarter.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
CNL Income Fund, Ltd. (the "Partnership") is a Florida limited
partnership that was organized on November 26, 1985 to acquire for cash, either
directly or through joint venture and tenancy in common arrangements, both newly
constructed and existing restaurant properties, as well as land upon which
restaurants were to be constructed, which are leased primarily to operators of
national and regional fast-food restaurant chains (collectively, the
"Properties"). The leases generally are triple-net leases, with the lessees
responsible for all repairs and maintenance, property taxes, insurance and
utilities. As of March 31, 2002, the Partnership owned ten Properties directly
and three Properties indirectly through joint venture or tenancy in common
arrangements. As of March 31, 2003, the Partnership owned nine Properties
directly and two Properties indirectly through joint venture or tenancy in
common arrangements.
Capital Resources
For the quarters ended March 31, 2003 and 2002, the Partnership
generated cash from operating activities of $132,129 and $168,097, respectively.
The decrease in cash from operating activities for the quarter ended March 31,
2003 was a result of changes in income and expenses.
Other sources and uses of cash included the following during the
quarter ended March 31, 2003.
During the quarter ended March 31, 2003, the Partnership sold its
Property in Angleton, Texas to a third party and received net sales proceeds of
approximately $297,900 resulting in a loss of approximately $1,400. In
connection with the sale, the Partnership incurred a deferred, subordinated
disposition fee of $9,000. Payment of the real estate disposition fee is
subordinated to the receipt by the limited partners of their aggregate,
cumulative 10% Preferred Return, plus their adjusted capital contributions. The
Partnership distributed the net sales proceeds as a special distribution to the
limited partners, as described below.
At March 31, 2003, the Partnership had $688,058 in cash and cash
equivalents, as compared to $419,385 at December 31, 2002. The increase at March
31, 2003 was primarily the result of the Partnership holding the net sales
proceeds it received from the sale of its Property in Angleton, Texas pending
distribution to the limited partners. The funds remaining at March 31, 2003,
after payment of distributions and other liabilities, will be used to meet the
Partnership's working capital needs.
Short-Term Liquidity
The Partnership's investment strategy of acquiring Properties for cash
and leasing them under triple-net leases to operators who generally meet
specified financial standards minimizes the Partnership's operating expenses.
The general partners believe that the leases will continue to generate cash flow
in excess of operating expenses.
The Partnership's short-term liquidity requirements consist primarily
of the operating expenses of the Partnership.
The general partners have the right, but not the obligation, to make
additional capital contributions if they deem it appropriate in connection with
the operations of the Partnership.
Total liabilities of the Partnership, including distributions payable,
were $646,175 at March 31, 2003, as compared to $385,188 at December 31, 2002.
Total liabilities increased primarily as a result of the Partnership accruing a
special distribution of net sales proceeds of $250,000 from the 2003 sale of the
Property in Angleton, Texas, payable to the limited partners at March 31, 2003.
The increase was also partially due to an increase in accounts payable. The
increase was partially offset by a decrease in real estate taxes payable. The
general partners believe that the Partnership has sufficient cash on hand to
meet current working capital needs.
The Partnership generally distributes cash from operations remaining
after the payment of operating expenses of the Partnership, to the extent the
general partners determine that funds are available for distribution. Based on
current and anticipated future cash from operations and net proceeds from the
sales of Properties, the Partnership declared distributions to limited partners
of $407,040 and $1,069,399 for the quarters ended March 31, 2003 and 2002,
respectively. This represents distributions of $13.57 and $35.65 per unit for
the quarters ended March 31, 2003 and 2002, respectively. The distribution for
the quarter ended March 31, 2003, included $250,000 of net sales proceeds from
the 2003 sale of the Property in Angleton, Texas and the distribution for the
quarter ended March 31, 2002, included $900,000 of net sales proceeds from the
2002 sale of the Property in Mesquite, Texas. The special distribution in 2003
was effectively a return of a portion of the limited partners' investment,
although in accordance with the Partnership agreement, it was applied to the
limited partners' unpaid cumulative 10% Preferred Return. The special
distribution during 2002, was effectively a return of a portion of the limited
partners investment; although, in accordance with the Partnership agreement,
$355,144 was applied towards the 10% Preferred Return, on a cumulative basis,
and the balance of $544,856 was treated as a return of capital for purposes of
calculating the 10% Preferred Return. As a result of the return of capital, the
amount of the limited partners' invested capital contributions (which generally
is the limited partners' capital contributions, less distributions from the sale
of a property that are considered to be a return of capital) decreased;
therefore, the amount of the limited partners' invested capital contributions on
which the 10% Preferred Return is calculated was lowered accordingly. As a
result of the sales of the Properties in previous years and the current year,
the Partnership's total revenues have declined and are expected to remain
reduced in subsequent periods, while the majority of the Partnership's operating
expenses remained and are expected to remain fixed. Due to the above mentioned
sales of Properties to current and anticipated future cash from operations ,
distributions of net cash flow were adjusted commencing during the quarters
ended March 31, 2003 and 2002. No distributions were made to the general
partners for the quarters ended March 31, 2003 and 2002. The Partnership intends
to continue to make distributions of cash available for distribution to the
limited partners on a quarterly basis.
Long-Term Liquidity
The Partnership has no long-term debt or other long-term liquidity
requirements.
Results of Operations
Total rental revenues were $137,907 during the quarter ended March 31,
2003, as compared to $148,610 during the same period of 2002. The decrease in
rental revenues during 2003 was due to the sale of the Property in Mesquite,
Texas in February 2002 and the sale of the Property in Angleton, Texas in
January 2003. Rental revenues are expected to remain at reduced amounts because
the Partnership used the net sales proceeds to pay liabilities of the
Partnership and to make distributions to the limited partners.
The Partnership also earned $2,099 in contingent rental income for the
quarter ended March 31, 2003, as compared to $16,602 for the same period of
2002. The decrease in contingent rental income was attributable to the sale of
the Property in Mesquite, Texas, the lease of which required the payment of
contingent rent.
The Partnership also earned $12,111 attributable to net income earned
by joint ventures during the quarter ended March 31, 2003, as compared to
$23,410 during the same period of 2002. The decrease in net income earned by
joint ventures during the quarter ended March 31, 2003, as compared to the same
period of 2002, was the result of Sand Lake Road Joint Venture, in which the
Partnership owned a 50% interest, selling its Property to the tenant in June
2002. The Partnership dissolved the joint venture in accordance with the joint
venture agreement.
During the quarter ended March 31, 2003, five lessees, The Ground
Round, Inc., AJZ, Inc., Wendy's Old Fashioned Hamburgers of New York, Inc.,
Wen-Atlanta, Inc. and JMJ, LLC. each contributed more than 10% of the
Partnership's total rental revenues (including the Partnership's share of rental
revenues from the Property owned by a joint venture and a Property owned with
affiliates of the general partners as tenants-in-common). It is anticipated that
based on the minimum rental payments required by the leases, these five lessees
will continue to contribute more than 10% of the Partnership's total rental
revenues. In addition, during the quarter ended March 31, 2003, three restaurant
chains, Wendy's, The Ground Round, and A.J. Gators each accounted for more than
10% of the Partnership's total rental revenues (including the Partnership's
share of rental revenues from the Property owned by a joint venture and a
Property owned with affiliates as tenants-in-common). It is anticipated that
these three restaurant chains will each continue to account for more than 10% of
the total rental revenues to which the Partnership is entitled under the terms
of the leases. Any failure of these lessees or restaurant chains will materially
affect the Partnership's income if the Partnership is not able to re-lease the
Properties in a timely manner.
Operating expenses including depreciation expense were $77,931 during
the quarter ended March 31, 2003, as compared to $82,032 during the same period
of 2002. The decrease in operating expenses during 2003 was primarily due to a
decrease in the costs incurred for administrative expenses for servicing the
Partnership and its Properties. The decrease in operating expenses was partially
offset due to higher state tax expense relating to several states in which the
Partnership conducts business.
As a result of the sale of the Property in Mesquite, Texas, the
Partnership recognized a gain of $348,026 during the quarter ended March 31,
2002.
During the year ended December 31, 2002, the Partnership identified for
sale one Property that was classified as Discontinued Operations in the
accompanying financial statements. The Partnership recognized net rental income
(rental revenues less Property related expenses) of $3,178 during the quarter
ended March 31, 2002 relating to this Property. In January 2003, the Partnership
sold the Property in Angleton, Texas and recorded a loss on disposal of
discontinued operations of approximately $1,400. The Partnership recorded a
provision for write-down of assets in a previous year related to this Property.
The Partnership recognized net rental income of $855 during the quarter ended
March 31, 2003 related to this Property.
In January 2003, FASB issued FASB Interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities" to expand upon and strengthen
existing accounting guidance that addresses when a company should include the
assets, liabilities and activities of another entity in its financial
statements. To improve financial reporting by companies involved with variable
interest entities (more commonly referred to as special-purpose entities or
off-balance sheet structures), FIN 46 requires that a variable interest entity
be consolidated by a company if that company is subject to a majority risk of
loss from the variable interest entity's activities or entitled to receive a
majority of the entity's residual returns or both. Prior to FIN 46, a company
generally included another entity in its consolidated financial statements only
if it controlled the entity through voting interests. Consolidation of variable
interest entities will provide more complete information about the resources,
obligations, risks and opportunities of the consolidated company. The
consolidation requirements of FIN 46 apply immediately to variable interest
entities created after January 31, 2003, and to older entities, in the first
fiscal year or interim period beginning after June 15, 2003. The general
partners believe adoption of this standard may result in either consolidation or
additional disclosure requirements with respect to the Partnership's
unconsolidated joint ventures or properties held with affiliates of the general
partners as tenants-in-common, which are currently accounted for under the
equity method. However, such consolidation is not expected to significantly
impact the Partnership's results of operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
The general partners maintain a set of disclosure controls and
procedures designed to ensure that information required to be disclosed in the
Partnership's filings under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms. The principal executive
and financial officers of the corporate general partner have evaluated the
Partnership's disclosure controls and procedures within 90 days prior to the
filing of this Quarterly Report on Form 10-Q and have determined that such
disclosure controls and procedures are effective.
Subsequent to the above evaluation, there were no significant changes
in internal controls or other factors that could significantly affect these
controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. Inapplicable.
-----------------
Item 2. Changes in Securities. Inapplicable.
---------------------
Item 3. Defaults upon Senior Securities. Inapplicable.
-------------------------------
Item 4. Submission of Matters to a Vote of Security Holders. Inapplicable.
---------------------------------------------------
Item 5. Other Information. Inapplicable.
-----------------
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
(a) Exhibits
3.1 Certificate of Limited Partnership of CNL Income
Fund, Ltd., as amended. (Included as Exhibit 3.1 to
Amendment No. 1 to Registration Statement No.
33-2850 on Form S-11 and incorporated herein by
reference.)
3.2 Amended and Restated Certificate and Agreement of
Limited Partnership of CNL Income Fund, Ltd.
(Included as Exhibit 3.2 to Form 10-K filed with
the Securities and Exchange Commission on March 27,
1998, and incorporated herein by reference.)
4.1 Certificate of Limited Partnership of CNL Income
Fund, Ltd., as amended. (Included as Exhibit 4.1 to
Amendment No. 1 to Registration Statement No.
33-2850 on Form S-11 and incorporated herein by
reference.)
4.2 Amended and Restated Certificate and Agreement of
Limited Partnership of CNL Income Fund, Ltd.
(Included as Exhibit 3.2 to Form 10-K filed with
the Securities and Exchange Commission on March 27,
1998, and incorporated herein by reference.)
10.1 Property Management Agreement. (Included as Exhibit
10.1 to Form 10-K filed with the Securities and
Exchange Commission on March 27, 1998, and
incorporated herein by reference.)
10.2 Assignment of Property Management Agreement from
CNL Investment Company to CNL Income Fund Advisors,
Inc. (Included as Exhibit 10.2 to Form 10-K filed
with the Securities and Exchange Commission on
March 30, 1995, and incorporated herein by
reference.)
10.3 Assignment of Property Management Agreement from
CNL Income Fund Advisors, Inc. to CNL Fund
Advisors, Inc. (Included as Exhibit 10.3 to Form
10-K filed with the Securities and Exchange
Commission on March 29, 1996, and incorporated
herein by reference.)
10.4 Assignment of Management Agreement from CNL Fund
Advisors, Inc. to CNL APF Partners, LP. (Included
as Exhibit 10.4 to Form 10-Q filed with the
Securities and Exchange Commission on August 11,
2001, and incorporated herein by reference.)
10.5 Assignment of Management Agreement from CNL APF
Partners, LP to CNL Restaurants XVIII, Inc.
(Included as Exhibit 10.5 to Form 10-Q filed with
the Securities and Exchange Commission on August
13, 2002, and incorporated herein by reference.)
99.1 Certification of Chief Executive Officer of
Corporate General Partner Pursuant to 18 U.S.C.
Section 1350 as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002. (Filed herewith.)
99.2 Certification of Chief Financial Officer of
Corporate General Partner Pursuant to 18 U.S.C.
Section 1350 as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002. (Filed herewith.)
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the
quarter ended March 31, 2003.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
DATED this 9th day of May, 2003.
CNL INCOME FUND, LTD.
By: CNL REALTY CORPORATION
General Partner
By: /s/ James M. Seneff, Jr.
--------------------------
JAMES M. SENEFF, JR.
Chief Executive Officer
(Principal Executive Officer)
By: /s/ Robert A. Bourne
--------------------------
ROBERT A. BOURNE
President and Treasurer
(Principal Financial and
Accounting Officer)
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
OF CORPORATE GENERAL PARTNER
PURSUANT TO RULE 13a-14 AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, James M. Seneff, Jr., the Chief Executive Officer of CNL Realty
Corporation, the corporate general partner of CNL Income Fund, Ltd. (the
"registrant"), certify that:
1. I have reviewed this quarterly report on Form 10-Q of the
registrant;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect
to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented
in this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
a. designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and
c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrant's auditors
and the audit committee of registrant's board of directors (or
persons performing the equivalent function):
a. all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and
b. any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officer and I have indicated in
this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: May 9, 2003
/s/ James M. Seneff, Jr.
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James M. Seneff, Jr.
Chief Executive Officer
CERTIFICATION OF CHIEF FINANCIAL OFFICER
OF CORPORATE GENERAL PARTNER
PURSUANT TO RULE 13a-14 AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Robert A. Bourne, President and Treasurer of CNL Realty Corporation,
the corporate general partner of CNL Income Fund, Ltd. (the "registrant")
certify that:
1. I have reviewed this quarterly report on Form 10-Q of the
registrant;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect
to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented
in this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
a. designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and
c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrant's auditors
and the audit committee of registrant's board of directors (or
persons performing the equivalent function):
a. all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and
b. any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officer and I have indicated in
this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: May 9, 2003
/s/ Robert A. Bourne
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Robert A. Bourne
President and Treasurer
EXHIBIT INDEX
Exhibit Number
(c) Exhibits
3.1 Certificate of Limited Partnership of CNL Income Fund,
Ltd., as amended. (Included as Exhibit 3.1 to Amendment
No. 1 to Registration Statement No. 33-2850 on Form S-11
and incorporated herein by reference.)
3.2 Amended and Restated Certificate and Agreement of Limited
Partnership of CNL Income Fund, Ltd. (Included as Exhibit
3.2 to Form 10-K filed with the Securities and Exchange
Commission on March 27, 1998, and incorporated herein by
reference.)
4.1 Certificate of Limited Partnership of CNL Income Fund,
Ltd., as amended. (Included as Exhibit 4.1 to Amendment
No. 1 to Registration Statement No. 33-2850 on Form S-11
and incorporated herein by reference.)
4.2 Amended and Restated Certificate and Agreement of Limited
Partnership of CNL Income Fund, Ltd. (Included as Exhibit
3.2 to Form 10-K filed with the Securities and Exchange
Commission on March 27, 1998, and incorporated herein by
reference.)
10.1 Property Management Agreement. (Included as Exhibit 10.1
to Form 10-K filed with the Securities and Exchange
Commission on March 27, 1998, and incorporated herein by
reference.)
10.2 Assignment of Property Management Agreement from CNL
Investment Company to CNL Income Fund Advisors, Inc.
(Included as Exhibit 10.2 to Form 10-K filed with the
Securities and Exchange Commission on March 30, 1995, and
incorporated herein by reference.)
10.3 Assignment of Property Management Agreement from CNL
Income Fund Advisors, Inc. to CNL Fund Advisors, Inc.
(Included as Exhibit 10.3 to Form 10-K filed with the
Securities and Exchange Commission on March 29, 1996, and
incorporated herein by reference.)
10.4 Assignment of Management Agreement from CNL Fund Advisors,
Inc. to CNL APF Partners, LP. (Included as Exhibit 10.4 to
Form 10-Q filed with the Securities and Exchange
Commission on August 11, 2001, and incorporated herein by
reference.)
10.5 Assignment of Management Agreement from CNL APF Partners,
LP to CNL Restaurants XVIII, Inc. (Included as Exhibit
10.5 to Form 10-Q filed with the Securities and Exchange
Commission on August 13, 2002, and incorporated herein
reference.)
99.1 Certification of Chief Executive Officer of Corporate
General Partner Pursuant to 18 U.S.C. Section 1350 as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002. (Filed herewith.)
99.2 Certification of Chief Financial Officer of Corporate
General Partner Pursuant to 18 U.S.C. Section 1350 as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002. (Filed herewith.)
EXHIBIT 99.1
EXHIBIT 99.2