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
0-17549
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CNL Income Fund IV, Ltd.
- -----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 59-2854435
- ---------------------------------- -----------------------------
(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 5-6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7-9
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 9
Item 4. Controls and Procedures 9
Part II.
Other Information 10-11
CNL INCOME FUND IV, LTD.
(A Florida Limited Partnership)
CONDENSED BALANCE SHEETS
March 31, December 31,
2003 2002
------------------ -------------------
ASSETS
Real estate properties with operating leases, net $ 9,023,892 $ 9,125,462
Net investment in direct financing leases 294,513 300,064
Real estate held for sale -- 1,542,394
Investment in joint ventures 2,942,036 2,979,763
Cash and cash equivalents 2,006,486 405,155
Receivables 13,241 9,755
Accrued rental income 212,738 215,631
Other assets 13,494 9,686
------------------ -------------------
$ 14,506,400 $ 14,587,910
================== ===================
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and accrued expenses $ 42,939 $ 10,757
Real estate taxes payable 45,685 47,973
Distributions payable 1,160,475 523,947
Due to related parties 251,573 197,942
Rents paid in advance and deposits 44,989 48,765
------------------ -------------------
Total liabilities 1,545,661 829,384
Partners' capital 12,960,739 13,758,526
------------------ -------------------
$ 14,506,400 $ 14,587,910
================== ===================
See accompanying notes to condensed financial statements.
CNL INCOME FUND IV, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF INCOME
Quarter Ended
March 31,
2003 2002
--------------- ---------------
Revenues:
Rental income from operating leases $ 329,786 $ 330,316
Earned income from direct financing leases 7,840 8,400
Contingent rental income 12,028 24,103
Interest and other income 1,043 2,175
--------------- ---------------
350,697 364,994
--------------- ---------------
Expenses:
General operating and administrative 65,350 72,060
Property expenses 9,961 5,502
State and other taxes 22,952 9,370
Depreciation and amortization 65,658 67,291
Provision for write-down of assets 36,000 --
--------------- ---------------
199,921 154,223
--------------- ---------------
Income Before Equity in Earnings of Joint Ventures 150,776 210,771
Equity in Earnings of Joint Ventures 76,663 71,923
--------------- ---------------
Income from Continuing Operations 227,439 282,694
--------------- ---------------
Discontinued Operations:
Income from discontinued operations 28,210 32,710
Gain on disposal of discontinued operations 107,039 --
--------------- ---------------
135,249 32,710
--------------- ---------------
Net Income $ 362,688 $ 315,404
=============== ===============
Income Per Limited Partner Unit
Continuing Operations $ 3.79 $ 4.71
Discontinued Operations 2.25 0.55
--------------- ---------------
Total $ 6.04 $ 5.26
=============== ===============
Weighted Average Number of Limited Partner
Units Outstanding 60,000 60,000
=============== ===============
See accompanying notes to condensed financial statements.
CNL INCOME FUND IV, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF PARTNERS' CAPITAL
Quarter Ended Year Ended
March 31, December 31,
2003 2002
------------------- ------------------
General partners:
Beginning balance $ 787,351 $ 787,351
Net income -- --
------------------- ------------------
787,351 787,351
------------------- ------------------
Limited partners:
Beginning balance 12,971,175 13,949,518
Net income 362,688 1,117,445
Distributions ($19.34 and $34.93 per
limited partner unit, respectively) (1,160,475 ) (2,095,788 )
------------------- ------------------
12,173,388 12,971,175
------------------- ------------------
Total partners' capital $ 12,960,739 $ 13,758,526
=================== ==================
See accompanying notes to condensed financial statements.
CNL INCOME FUND IV, 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 $ 426,545 $ 467,903
-------------- ---------------
Cash Flows from Investing Activities:
Proceeds from sale of real estate properties 1,698,733 --
Liquidating distribution from joint venture -- 41,984
-------------- ---------------
Net cash provided by investing activities 1,698,733 41,984
-------------- ---------------
Cash Flows from Financing Activities:
Distributions to limited partners (523,947 ) (523,947 )
-------------- ---------------
Net cash used in financing activities (523,947 ) (523,947 )
-------------- ---------------
Net Increase (Decrease) in Cash and Cash Equivalents 1,601,331 (14,060 )
Cash and Cash Equivalents at Beginning of Quarter 405,155 645,220
-------------- ---------------
Cash and Cash Equivalents at End of Quarter $ 2,006,486 $ 631,160
============== ===============
Supplemental Schedule of Non-Cash Investing and Financing
Activities:
Deferred real estate disposition fee incurred and unpaid at
end of period $ 52,459 $ --
============== ===============
Distributions declared and unpaid at end of quarter $ 1,160,475 $ 523,947
============== ===============
See accompanying notes to condensed financial statements.
CNL INCOME FUND IV, 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 IV, 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. Real Estate Properties With Operating Leases:
--------------------------------------------
In December 2002, the Partnership recorded a provision for write-down
of assets relating to the property in Maywood, Illinois since the two
tenants of this property are not expected to exercise their option to
renew their leases, which will expire in June 2003. In April 2003, the
Partnership entered into negotiations to sell this property to one of
the tenants. The Partnership increased the provision for write-down of
assets for this property by $36,000 to $209,000 at March 31, 2003 in
anticipation of the sale of this property. The provisions represented
the difference between the carrying value of the property and its
estimated fair value at the end of each period. This property was
identified for sale in April 2003.
CNL INCOME FUND IV, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters Ended March 31, 2003 and 2002
4. Discontinued Operations:
-----------------------
In February 2003, the Partnership sold the property in Portland,
Indiana and received net sales proceeds of approximately $776,100,
resulting in a gain on disposal of assets of $129,403. In connection
with the sale, the Partnership incurred a deferred, subordinated, real
estate disposition fee of $23,959.
In March 2003, the Partnership sold the property in Richmond, Virginia
and received net sales proceeds of approximately $922,700, resulting in
a loss on disposal of assets of $22,364. The Partnership had recorded a
provision for write-down of assets relating to this property in the
previous year, in anticipation of the sale of the property. In
connection with the sale, the Partnership incurred a deferred,
subordinated, real estate disposition fee of $28,500.
Payment of the real estate disposition fees are subordinated to receipt
by the limited partners of their aggregate, cumulative 10% Preferred
Return, plus their adjusted capital contributions.
The financial results for these properties are reflected as
Discontinued Operations in the accompanying financial statements. The
operating results of discontinued operations are as follows:
Quarter Ended March 31,
2003 2002
---------------- ---------------
Rental revenues $ 32,117 $ 40,908
Other income -- 2,228
Expenses (3,907 ) (10,426 )
Gain on disposal of assets 107,039 --
---------------- ---------------
Income from discontinued operations $ 135,249 $ 32,710
================ ===============
5. Related Party Transactions:
--------------------------
An affiliate of the Partnership is entitled to receive deferred,
subordinated real estate disposition fees, 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 disposition 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 quarter ended March 31, 2003, the Partnership
incurred deferred, subordinated, real estate disposition fees of
$52,459 as a result of the sales of two properties.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
CNL Income Fund IV, Ltd. (the "Partnership") is a Florida limited
partnership that was organized on November 18, 1987, to acquire for cash, either
directly or through joint venture 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 and family-style 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, 2003 and 2002, the Partnership owned 22 and 24 Properties directly,
respectively. As of March 31, 2003 and 2002, the Partnership also owned seven
Properties indirectly through joint venture or tenancy in common arrangements.
Capital Resources
Cash from operating activities was $426,545 and $467,903, during the
quarters ended March 31, 2003 and 2002, respectively. The decrease in cash from
operating activities for the quarter ended March 31, 2003 was a result of
changes in the Partnership's income and expenses and changes in working capital.
Other sources and uses of cash included the following during the
quarter ended March 31, 2003.
In February 2003, the Partnership sold the Property in Portland,
Indiana and received net sales proceeds of approximately $776,100, resulting in
a gain on disposal of assets of $129,403. In connection with the sale, the
Partnership incurred a deferred, subordinated, real estate disposition fee of
$23,959. The Partnership used the majority of the net proceeds to pay
liabilities of the Partnership.
In March 2003, the Partnership sold this Property and received net
sales proceeds of approximately $922,700, resulting in a loss on disposal of
assets of $22,364. The Partnership had recorded a provision for write-down of
assets relating to this Property in the previous year, in anticipation of the
sale of the Property. In connection with the sale, the Partnership incurred a
deferred, subordinated, real estate disposition fee of $28,500. The Partnership
distributed to the limited partners the majority of the net proceeds from the
sale of this Property as a special distribution, and expects it will use the
remaining proceeds to pay liabilities of the Partnership.
Payment of the real estate disposition fees are subordinated to receipt
by the limited partners of their aggregate, cumulative 10% Preferred Return,
plus their adjusted capital contributions.
At March 31, 2003, the Partnership had $2,006,486 in cash and cash
equivalents, as compared to $405,155 at December 31, 2002. The increase in cash
and cash equivalents at March 31, 2003 was primarily a result of the Partnership
holding net proceeds from the sale of two Properties at March 31, 2003, pending
distribution to the limited partners and payment of the Partnership's
liabilities. The funds remaining at March 31, 2003, after payment of
distributions and other liabilities will be used to meet the Partnership's
working capital and other needs.
Short-Term Liquidity
The Partnership's investment strategy of acquiring Properties for cash
and leasing them under triple-net leases to operators who meet specified
financial standards minimizes the Partnership's operating expenses. The general
partners believe that the leases will generate net 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 Partnership's operations.
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 such funds are available for distribution. Based on
current and anticipated future cash from operating activities and for the
quarters ended March 31, 2003 and 2002, the net proceeds from the sale of the
Property in Richmond, Virginia and the liquidating distribution received from
Titusville Joint Venture, respectively, the Partnership declared distributions
to the limited partners of $1,160,475 and $523,947 for the quarters ended March
31, 2003 and 2002, respectively. This represents distributions of $19.34 and
$8.73 per unit for the quarters ended March 31, 2003 and 2002, respectively.
Distributions for the quarter ended March 31, 2003, included a special
distribution of $650,000, as a result of the distribution of net sales proceeds
from the 2003 sale of the Property in Richmond, Virginia. This special
distribution was effectively a return of a portion of the limited partners
investment, although, in accordance with the Partnership agreement, it was
applied towards the limited partners' unpaid preferred return. As a result of
the sales of Properties in previous years and in 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
have remained and are expected to remain fixed. Due to the sales of Properties
mentioned above, and due to current and anticipated cash from operations,
distributions of net cash flow have been adjusted in the quarter ended March 31,
2003. No distributions were made to the general partners for the quarters ended
March 31, 2003 and 2002. No amounts distributed to the limited partners for the
quarters ended March 31, 2003 and 2002 are required to be or have been treated
by the Partnership as a return of capital for purposes of calculating the
limited partners' return on their adjusted capital contributions. The
Partnership intends to continue to make distributions of cash available for
distribution to the limited partners on a quarterly basis.
Total liabilities of the Partnership, including distributions payable,
increased to $1,545,661 at March 31, 2003, from $829,384 at December 31, 2002,
primarily as a result of accruing a special distribution for the limited
partners of $650,000 at March 31, 2003 relating to net sales proceeds from the
sale of the Property in Richmond, Virginia. The general partners believe that
the Partnership has sufficient cash on hand to meet its current working capital
needs.
Long-Term Liquidity
The Partnership has no long-term debt or other long-term liquidity
requirements.
Results of Operations
Total rental revenues were $337,626 for the quarter ended March 31,
2003 as compared to $338,716 in the same period in 2002. Rental revenues during
the quarter ended March 31, 2003, as compared to same period in 2002, remained
constant even though the Partnership sold two Properties during the first
quarter ended March 31, 2003. The rental revenues relating to these Properties
were reclassified as Discontinued Operations in the accompanying financial
statements.
During the quarters ended March 31, 2003 and 2002, the Partnership also
earned $12,028 and $24,103, respectively, in contingent rental income from the
Partnership's Properties. The decrease in contingent rental income during the
quarter ended March 31, 2003, as compared to the same period in 2002, was due to
the Partnership recognizing percentage rental income when the tenants met the
defined thresholds under their lease agreements. The decrease was also
attributable to an amendment to the lease relating to the Property in Tampa,
Florida, which no longer requires payment of contingent rental income. The
general partners do not believe that the amendment will have a material adverse
effect on the results of operations of the Partnership.
During the quarters ended March 31, 2003 and 2002, the Partnership also
earned $76,663 and $71,923, respectively, attributable to net income earned by
joint ventures. Net income earned by joint ventures during the quarter ended
March 31, 2003, as compared to same period in 2002, remained constant, as there
was no change in the leased Property portfolio owned by the joint ventures and
the tenancies in common.
Operating expenses, including depreciation and amortization and
provision for write-down of assets, were $199,921 and $154,223 for the quarters
ended March 31, 2003 and 2002, respectively. Operating expenses during the
quarter ended March 31, 2003, as compared to the same period in 2002, increased
primarily because the Partnership recorded a provision for write-down of assets
of $36,000 in March 2003 for the Property in Maywood, Illinois in anticipation
of the sale of this Property. The provision represented the difference between
the carrying value of the Property and its estimated fair value. This Property
was identified for sale in April 2003.
Operating expenses during the quarter ended March 31, 2003, also
increased partially due to an increase in the amount of state tax expense
relating to several states in which the Partnership conducts business.
During the quarter ended March 31, 2003, the Partnership identified and
sold two Properties, which were classified as Discontinued Operations in the
accompanying financial statements. In February 2003, the Partnership sold the
Property in Portland, Indiana and received net sales proceeds of approximately
$776,100, resulting in a gain on disposal of assets of $129,403. In March 2003,
the Partnership sold the Property in Richmond, Virginia and received net sales
proceeds of approximately $922,700, resulting in a loss on disposal of assets of
$22,364. The Partnership had recorded a provision for write-down of assets
relating to this Property in the previous year, in anticipation of the sale of
the Property. During the quarters ended March 31, 2003 and 2002, the Partnership
recognized net rental income (rental revenues less Property related expenses),
of $28,210 and $32,710, respectively, relating to these two Properties.
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 IV, Ltd. (Included as Exhibit 3.1 in Amendment
No. 1 to Registration Statement No. 33-20249 on Form
S-11 and incorporated herein by reference.)
3.2 Amended and Restated Agreement and Certificate of
Limited Partnership of CNL Income Fund IV, Ltd.
(Included as Exhibit 3.2 to Form 10-K filed with the
Securities and Exchange Commission on March 31,
1994, and incorporated herein by reference.)
4.1 Certificate of Limited Partnership of CNL Income
Fund IV, Ltd. (Included as Exhibit 3.1 in Amendment
No. 1 to Registration Statement No. 33-20249 on Form
S-11 and incorporated herein by reference.)
4.2 Amended and Restated Agreement and Certificate of
Limited Partnership of CNL Income Fund IV, Ltd.
(Included as Exhibit 3.2 to Form 10-K filed with the
Securities and Exchange Commission on March 31,
1994, 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 31, 1994, 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 April
1, 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 9, 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 14,
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 IV, 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 IV, 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.
- ---------------------------
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 IV, 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
- ------------------------------------
Robert A. Bourne
President and Treasurer
EXHIBIT INDEX
Exhibit Number
(c) Exhibits
3.1 Certificate of Limited Partnership of CNL Income Fund
IV, Ltd. (Included as Exhibit 3.1 in Amendment No. 1
to Registration Statement No. 33-20249 on Form S-11
and incorporated herein by reference.)
3.2 Amended and Restated Agreement and Certificate of
Limited Partnership of CNL Income Fund IV, Ltd.
(Included as Exhibit 3.2 to Form 10-K filed with the
Securities and Exchange Commission on March 31, 1994,
and incorporated herein by reference.)
4.1 Certificate of Limited Partnership of CNL Income Fund
IV, Ltd. (Included as Exhibit 3.1 in Amendment No. 1
to Registration Statement No. 33-20249 on Form S-11
and incorporated herein by reference.)
4.2 Amended and Restated Agreement and Certificate of
Limited Partnership of CNL Income Fund IV, Ltd.
(Included as Exhibit 3.2 to Form 10-K filed with the
Securities and Exchange Commission on March 31, 1994,
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 31, 1994, 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 April 1, 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 9, 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 14, 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.)
EXHIBIT 99.1
EXHIBIT 99.2