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 September 30, 2002
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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
0-19139
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CNL Income Fund VIII, Ltd.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 59-2963338
- ---------------------------------- ---------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organiza 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 _________
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 5-9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10-14
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 14
Item 4. Controls and Procedures 14-15
Part II.
Other Information 16-17
CNL INCOME FUND VIII, LTD.
(A Florida Limited Partnership)
CONDENSED BALANCE SHEETS
September 30, December 31,
2002 2001
------------------- -------------------
ASSETS
Land and buildings on operating leases, net $ 18,356,470 $ 15,726,970
Net investment in direct financing leases 4,607,045 4,741,762
Real estate held for sale -- 911,293
Investment in joint ventures 4,664,994 4,601,808
Mortgage notes receivable -- 926,080
Cash and cash equivalents 1,495,078 2,085,133
Certificate of deposit 380,501 378,889
Receivables, less allowance for doubtful accounts
of $7,514 and $1,114, respectively 13,375 88,175
Due from related parties 5,042 52,641
Accrued rental income 1,399,721 1,394,618
Other assets 79,976 69,874
------------------- -------------------
$ 31,002,202 $ 30,977,243
=================== ===================
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and accrued expenses $ 9,906 $ 5,600
Real estate taxes payable 17,233 10,654
Distributions payable 787,501 787,501
Due to related parties 80,805 75,482
Rents paid in advance and security deposits 51,341 52,096
------------------- -------------------
Total liabilities 946,786 931,333
Minority interest 105,278 106,834
Partners' capital 29,950,138 29,939,076
------------------- -------------------
$ 31,002,202 $ 30,977,243
=================== ===================
See accompanying notes to condensed financial statements.
CNL INCOME FUND VIII, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF INCOME
Quarter Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
-------------- --------------- --------------- ---------------
Revenues:
Rental income from operating leases $ 596,687 $ 472,527 $ 1,581,152 $ 1,452,180
Earned income from direct financing leases 146,922 154,156 442,936 496,072
Interest and other income 9,255 61,696 61,485 236,399
-------------- --------------- --------------- ---------------
752,864 688,379 2,085,573 2,184,651
-------------- --------------- --------------- ---------------
Expenses:
General operating and administrative 62,323 50,602 211,182 262,626
Property expenses 53,081 11,114 70,380 40,935
State and other taxes -- 119 30,446 51,819
Depreciation 91,049 82,355 264,829 238,195
Provision for write-down of assets -- -- -- 299,479
-------------- --------------- --------------- ---------------
206,453 144,190 576,837 893,054
-------------- --------------- --------------- ---------------
Income Before Gain on Sale of Assets, Minority
Interest in Income of Consolidated Joint Venture
and Equity in Earnings of Unconsolidated Joint
Ventures 546,411 544,189 1,508,736 1,291,597
Gain on Sale of Assets -- -- -- 28,301
Minority Interest in Income of Consolidated
Joint Venture (3,252 ) (3,246 ) (9,634 ) (9,800 )
Equity in Earnings of Unconsolidated Joint Ventures 239,385 107,815 539,346 285,584
-------------- --------------- --------------- ---------------
Income from Continuing Operations 782,544 648,758 2,038,448 1,595,682
-------------- --------------- --------------- ---------------
Discontinued Operations (Note 6):
Income from discontinued operations, net -- 20,581 55,304 73,131
Gain on disposal of discontinued operations, net -- -- 279,813 --
-------------- --------------- --------------- ---------------
-- 20,581 335,117 73,131
-------------- --------------- --------------- ---------------
Net Income $ 782,544 $ 669,339 $ 2,373,565 $ 1,668,813
============== =============== =============== ===============
Income Per Limited Partner Unit
Continuing operations $ 0.02 $ 0.02 $ 0.06 $ 0.05
Discontinued operations -- -- 0.01 --
-------------- --------------- --------------- ---------------
Total $ 0.02 $ 0.02 $ 0.07 $ 0.05
============== =============== =============== ===============
Weighted Average Number of Limited Partner
Units Outstanding 35,000,000 35,000,000 35,000,000 35,000,000
============== =============== =============== ===============
See accompanying notes to condensed financial statements.
CNL INCOME FUND VIII, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF PARTNERS' CAPITAL
Nine Months Ended Year Ended
September 30, December 31,
2002 2001
--------------------- ------------------
General partners:
Beginning balance $ 286,349 $ 286,349
Net income -- --
--------------------- ------------------
286,349 286,349
--------------------- ------------------
Limited partners:
Beginning balance 29,652,727 30,466,185
Net income 2,373,565 2,336,546
Distributions ($0.068 and $0.090 per
limited partner unit, respectively (2,362,503 ) (3,150,004 )
--------------------- ------------------
29,663,789 29,652,727
--------------------- ------------------
Total partners' capital $ 29,950,138 $ 29,939,076
===================== ==================
See accompanying notes to condensed financial statements.
CNL INCOME FUND VIII, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF CASH FLOWS
Nine Months Ended
September 30,
2002 2001
--------------- --------------
Increase (Decrease) in Cash and Cash Equivalents
Net Cash Provided by Operating Activities $ 2,509,844 $ 2,496,805
--------------- --------------
Cash Flows from Investing Activities:
Additions to land and buildings on operating leases (2,894,329 ) --
Proceeds from sale of assets 1,184,559 877,000
Investment in joint ventures (1,240,733 ) (865,942 )
Return of capital from joint venture 265,926 --
Liquidating distribution from joint venture 1,048,605 236,740
Collections on mortgage notes receivable 917,857 481,210
Investment in certificates of deposit (376,202 ) --
Redemption of certificate of deposit 368,111 347,396
--------------- --------------
Net cash provided by investing activities (726,206 ) 1,076,404
--------------- --------------
Cash Flows from Financing Activities:
Distributions to limited partners (2,362,503 ) (2,362,503 )
Distributions to holder of minority interest (11,190 ) (10,887 )
--------------- --------------
Net cash used in financing activities (2,373,693 ) (2,373,390 )
--------------- --------------
Net Increase (Decrease) in Cash and Cash Equivalents (590,055 ) 1,199,819
Cash and Cash Equivalents at Beginning of Period 2,085,133 1,226,635
--------------- --------------
Cash and Cash Equivalents at End of Period $ 1,495,078 $ 2,426,454
=============== ==============
Supplemental Schedule of Non-Cash Financing
Activities:
Distributions declared and unpaid at end of period $ 787,501 $ 787,501
=============== ==============
See accompanying notes to condensed financial statements.
CNL INCOME FUND VIII, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Nine Months Ended September 30, 2002 and 2001
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 management, necessary to a fair statement
of the results for the interim periods presented. Operating results for
the quarter and nine months ended September 30, 2002 may not be
indicative of the results that may be expected for the year ending
December 31, 2002. Amounts as of December 31, 2001, 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 VIII, Ltd. (the "Partnership") for the year ended December
31, 2001.
The Partnership accounts for its approximate 88% interest in Woodway
Joint Venture using the consolidation method. Minority interest
represents the minority joint venture partner's proportionate share of
the equity in the Partnership's consolidated joint venture. All
significant intercompany accounts and transactions have been
eliminated.
Effective January 1, 2002, the Partnership adopted Statement of
Financial Accounting Standards No. 144 "Accounting for the Impairment
or Disposal of Long-Lived Assets." This statement requires that a
long-lived asset be tested for recoverability whenever events or
changes in circumstances indicate that its carrying amount may not be
recoverable. The carrying amount of a long-lived asset is not
recoverable if it exceeds the sum of the undiscounted cash flows
expected to result from the use and eventual disposition of the asset.
The assessment is based on the carrying amount of the asset at the date
it is tested for recoverability. An impairment loss is recognized when
the carrying amount of a long-lived asset exceeds its fair value. If an
impairment is recognized, the adjusted carrying amount of a long-lived
asset is its new cost basis. The statement also requires that the
results of operations of a component of an entity that either has been
disposed of or is classified as held for sale be reported as a
discontinued operation if the disposal activity was initiated
subsequent to the adoption of the Standard.
2. Reclassification:
Certain items in the prior year's financial statements have been
reclassified to conform to 2002 presentation. These reclassifications
had no effect on total partners' capital or net income.
3. Land and Buildings on Operating Leases:
In January 2002, the Partnership reinvested a portion of the net sales
proceeds it received from the sale of the Property in Statesville,
North Carolina, and the prepaid principal received in 2001 relating to
a promissory note, in a Denny's Property located in Ontario, Oregon, at
an approximate cost of $654,400.
In June 2002, the Partnership reinvested the majority of the net sales
proceeds it received from the sale of the Property in Baseball City,
Florida, in a Taco Cabana Property located in Denton, Texas, at an
approximate cost of approximately $1,147,600. The property was acquired
from CNL Funding 2001-A, LP, an affiliate of the general partners (see
Note 7).
CNL INCOME FUND VIII, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Nine Months Ended September 30, 2002 and 2001
3. Land and Buildings on Operating Leases:
In September 2002, the Partnership reinvested the prepaid principal
received in May 2002 relating to a promissory note, in a Boston Market
Property located in Eden Prairie, Minnesota, at an approximate cost of
$1,093,900. The property was acquired from CNL Net Lease Investors,
L.P., an affiliate of the general partners (see Note 7).
4. Investment in Joint Ventures:
In June 2002, CNL Restaurant Investments II, in which the Partnership
owns a 36.8% interest, sold its property in Columbus, Ohio to the
tenant and received net sales proceeds of approximately $1,215,700
resulting in a gain of approximately $448,300. In addition in June
2002, this joint venture sold its property in Pontiac, Michigan to the
tenant and received net sales proceeds of approximately $722,600
resulting in a loss of $189,800. The joint venture used the proceeds
from the sale of the property in Columbus, Ohio to acquire a property
in Dallas, Texas at an approximate cost of $1,147,400. The joint
venture acquired this property from CNL Funding 2001-A, LP, an
affiliate of the general partners (see Note 7). As of June 30, 2002,
the Partnership had received approximately $265,900 representing a
return of capital for its pro-rata share of the uninvested net sales
proceeds relating to the Property in Pontiac, Michigan. In August 2002,
the Partnership reinvested a portion of the return of capital in a
Property in Kenosha, Wisconsin as tenants-in-common with CNL Income
Fund XVII, Ltd. ("CNL XVII"), a Florida limited partnership and an
affiliate of the general partners, at an approximate cost of $1,883,000
from an unrelated third party. The Partnership and CNL XVII entered
into an agreement whereby each co-tenant will share in the profits and
losses of each property in proportion to its applicable percentage
interest. As of September 30, 2002, the Partnership contributed
approximately $188,300 for a 10% interest in this property.
In September 2002, the Partnership, as tenants-in-common with CNL
Income Fund IX, Ltd.("CNL IX"), an affiliate of the general partners,
sold its property in Libertyville, Illinois, to an unrelated third
party for and received net sales proceeds of approximately $1,630,400
resulting in a gain of approximately $199,300. The Partnership owned a
66% interest in this property. The Partnership and CNL IX used the
proceeds from the sale of the property to acquire a property in Buffalo
Grove, Illinois at an approximate cost of $1,588,800. The property was
acquired from CNL Net Lease Investors, L.P., an affiliate of the
general partners (see Note 7).
The financial results relating to the properties in Columbus, Ohio;
Pontiac, Michigan; and Libertyville, Illinois are reflected as
Discontinued Operations below.
As of September 30, 2002, Asheville Joint Venture, CNL VIII, X, XII
Kokomo Joint Venture and Bossier City Joint Venture each owns and
leases one property, and CNL Restaurant Investments II owns and leases
five properties, to operators of national fast-food or family-style
restaurants. In addition, the Partnership and affiliates, as four
separate tenancy-in common arrangements, each owned and leased one
property to an operator of national fast-food or family-style
restaurants. The following presents the combined, condensed financial
information for the unconsolidated joint ventures and the properties
held as tenants-in-common with affiliates at:
CNL INCOME FUND VIII, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Nine Months Ended September 30, 2002 and 2001
4. Investment in Joint Ventures - continued:
September 30, December 31,
2002 2001
------------------ -----------------
Land and buildings on operating leases, net $ 13,823,619 $ 10,448,870
Net investment in direct financing leases 989,560 --
Real estate held for sale -- 3,134,176
Cash 78,013 38,224
Restricted cash 31,144 --
Receivables 257 10,397
Accrued rental income 181,211 124,469
Liabilities 4,513 4,452
Partners' capital 15,099,291 13,751,684
Quarter Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
------------- ------------- ------------- ---------------
Revenues $ 391,451 $ 308,128 $1,009,317 $ 730,514
Expenses (78,383 ) (68,034 ) (214,405 ) (157,012 )
Loss on sale of assets -- -- -- (61,864 )
------------- ------------- ------------- ---------------
Income from continuing
operations 313,068 240,094 794,912 511,638
Discontinued operations:
Income from discontinued
operations, net 32,975 75,108 173,750 224,213
Gain on disposal of assets, net 199,281 -- 457,786 --
------------- ------------- ------------- ---------------
232,256 75,108 631,536 224,213
------------- ------------- ------------- ---------------
Net income $ 545,324 $ 315,202 $1,426,448 $ 735,851
============= ============= ============= ===============
The Partnership recognized income of $539,346 and $285,584 during the
nine months ended September 30, 2002 and 2001, respectively, of which
$239,385 and $107,815 were earned during the quarters ended September
30, 2002 and 2001, respectively, from these joint ventures and tenancy
in common arrangements.
5. Mortgage Notes Receivable:
In connection with the 1996 sale of its property in Orlando, Florida,
the Partnership accepted a promissory note in the principal sum of
$1,388,568, representing the gross sales price of $1,375,000, plus
tenant closing costs of $13,568 that the Partnership financed on behalf
of the tenant. During the nine months ended September 30, 2002, the
borrower repaid the outstanding principal in the amount of
approximately $917,900. This amount was applied to the outstanding
principal balance.
CNL INCOME FUND VIII, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Nine Months Ended September 30, 2002 and 2001
6. Discontinued Operations:
In May 2002, the Partnership sold its property in Baseball City,
Florida to the tenant and received net sales proceeds of approximately
$1,184,600, resulting in a gain on disposal of discontinued operations
of approximately $279,800.
The financial results for this property are reflected as Discontinued
Operations in the accompanying financial statements. The operating
results of discontinued operations are as follows:
Quarter Ended Nine Months Ended September
September 30, 30,
2002 2001 2002 2001
--------------- --------------- --------------- --------------
Rental revenues $ -- $ 20,581 $ 55,304 $ 73,131
Gain on disposal of assets -- -- 279,813 --
--------------- --------------- --------------- --------------
Income from discontinued operations $ -- $ 20,581 $ 335,117 $ 73,131
=============== =============== =============== ==============
7. Related Party Transactions:
In June 2002, the Partnership acquired a property in Denton, Texas,
from CNL Funding 2001-A, LP, for a purchase price of approximately
$1,147,600 (see Note 3). In addition, in June 2002, CNL Restaurant
Investments II Joint Venture also acquired a property in Dallas, Texas,
from CNL Funding 2001-A, LP, for a purchase price of approximately
$1,147,400 (see Note 4). CNL Funding 2001-A, LP is an affiliate of the
general partners. CNL Funding 2001-A, LP had purchased and temporarily
held title to the properties in order to facilitate the acquisition of
the properties by the Partnership and the Joint Venture. The purchase
price paid by the Partnership and the Joint Venture represented the
costs incurred by CNL Funding 2001-A, LP to acquire and carry the
properties.
In September 2002, the Partnership acquired a property, in Eden
Prairie, Minnesota, from CNL Net Lease Investors, L.P. ("NLI"), at an
of approximate cost of $1,093,900 (see Note 3). In addition, the
Partnership and CNL IX, as tenants-in-common, acquired from NLI a
property in Buffalo Grove, Illinois at an approximate cost of
$1,588,800 (see note 4). During 2002, and prior to the Partnership's
acquisition of these properties, CNL Financial LP Holding, LP ("CFN")
and CNL Net Lease Investors GP Corp. ("GP Corp") purchased the limited
partner's interest and general partner's interest, respectively, of
NLI. Prior to this transaction, an affiliate of the Partnership's
general partners owned a 0.1% interest in NLI and served as a general
partner of NLI. The original general partners of NLI waived their
rights to benefit from this transaction. The acquisition price paid by
CFN for the limited partner's interest was based on the portfolio
acquisition price. The Partnership acquired the properties at CFN's
cost and did not pay any additional compensation to CFN for the
acquisition of the properties. Each CNL entity is an affiliate of the
Partnership's general partners.
CNL INCOME FUND VIII, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Nine Months Ended September 30, 2002 and 2001
8. Concentration of Credit Risk:
The following schedule presents total rental revenues and mortgage
interest income from individual lessees, each representing more than
ten percent of the Partnership's total rental revenues and mortgage
interest income (including the Partnership's share of total rental
revenues from the unconsolidated joint ventures and the property held
as tenants-in-common with affiliates of the general partners), for each
of the nine months ended September 30:
2002 2001
--------------- ---------------
Golden Corral Corporation $ 469,534 $ 508,040
Carrols Corporation 295,942 292,603
Steak and Ale of Illinois, Inc. and Steak
and Ale of Colorado, Inc. 247,863 N/A
In addition, the following schedule presents total rental revenues and
mortgage interest income from individual restaurant chains, each
representing more than ten percent of the Partnership's total rental
revenues and mortgage interest income (including the Partnership's
share of total rental revenues from the unconsolidated joint ventures
and the property held as tenants-in-common with affiliates of the
general partners) for each of the nine months ended September 30:
2002 2001
--------------- ---------------
Burger King $ 588,847 $ 640,239
Golden Corral Family Steakhouse
Restaurants 469,534 508,040
Bennigan's 247,863 N/A
The information denoted by N/A indicates that for the period presented,
the tenant did not represent more than ten percent of the Partnership's
total rental revenues and mortgage interest income.
8. Concentration of Credit Risk - Continued:
Although the Partnership's properties are geographically diverse
throughout the United States and the Partnership's lessees operate a
variety of restaurant concepts, default by any one of these lessees or
restaurant chains 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.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
CNL Income Fund VIII, Ltd. (the "Partnership") is a Florida limited
partnership that was organized on August 18, 1989 to acquire for cash, either
directly or through joint venture arrangements, both newly constructed and
existing restaurants, as well as land upon which restaurants were to be
constructed (the "Properties"), which are leased primarily to operators of
national and regional fast-food and family-style restaurant chains. The leases
are triple-net leases, with the lessees responsible for all repairs and
maintenance, property taxes, insurance and utilities. As of September 30, 2001,
the Partnership owned 24 Properties directly and thirteen Properties indirectly,
through joint venture or tenancy in common arrangements. As of September 30,
2002, the Partnership owned 26 Properties directly and thirteen Properties
indirectly, through joint venture or tenancy in common arrangements.
Capital Resources
Cash from operating activities (which includes cash received from
tenants, distributions from joint ventures, and interest and other income
received, less cash paid for expenses). was $2,509,844 and $2,496,805 for the
nine months ended September 30, 2002 and 2001, respectively. The increase in
cash from operating activities for the nine months ended September 30, 2002, was
a result of changes in the Partnership's working capital and changes in income
and expenses, as described in "Results of Operations" below.
Other sources and uses of capital included the following during the
nine months ended September 30, 2002.
In January 2002, the Partnership reinvested a portion of the net sales
proceeds it received from the sale of the Property in Statesville, North
Carolina, and the prepaid principal received in 2001 relating to a promissory
note, in a Denny's Property located in Ontario, Oregon, at an approximate cost
of $654,400.
In February 2002, a tenant, Brandon Fast Food Services, Inc., filed for
bankruptcy. As of September 30, 2002, the Partnership has continued receiving
rental payments relating to this lease. While the tenant has neither rejected
nor affirmed the one lease it has with the Partnership relating to the Property
in Brandon, Florida, there can be no assurance that the lease will not be
rejected in the future. The lost revenues that would result if the tenant
rejects this lease will have an adverse effect on the results of operations of
the Partnership if the Partnership is unable to lease the Property in a timely
manner.
In connection with the 1996 sale of its property in Orlando, Florida,
the Partnership accepted a promissory note in the principal sum of $1,388,568,
representing the gross sales price of $1,375,000, plus tenant closing costs of
$13,568 that the Partnership financed on behalf of the tenant. In May 2002, the
borrower repaid the outstanding principal in the amount of approximately
$917,900. In September 2002, the Partnership reinvested the prepaid principal in
a Boston Market Property located in Eden Prairie, Minnesota, at an approximate
cost of $1,093,900. The Property was acquired from CNL Net Lease Investors, L.P.
("NLI"). During 2002, and prior to the Partnership's acquisition of these
properties, CNL Financial LP Holding, LP ("CFN") and CNL Net Lease Investors GP
Corp. ("GP Corp") purchased the limited partner's interest and general partner's
interest, respectively, of NLI. Prior to this transaction, an affiliate of the
Partnership's general partners owned a 0.1% interest in NLI and served as a
general partner of NLI. The original general partners of NLI waived their rights
to benefit from this transaction. The acquisition price paid by CFN for the
limited partner's interest was based on the portfolio acquisition price. The
Partnership acquired the property at CFN's cost and did not pay any additional
compensation to CFN for the acquisition of the property. Each CNL entity is an
affiliate of the Partnership's general partners.
In May 2002, the Partnership sold its property in Baseball City,
Florida to the tenant and received net sales proceeds of approximately
$1,184,600 resulting in a gain on disposal of discontinued operations of
approximately $279,800. In June 2002, the Partnership reinvested the majority of
the net sales proceeds, it received from the sale of this Property in a Taco
Cabana Property located in Denton, Texas, at an approximate cost of $1,147,600.
In June 2002, CNL Restaurant Investments II Joint Venture, in which the
Partnership owns a 36.8% interest, sold its Property in Columbus, Ohio to the
tenant and received net sales proceeds of approximately $1,215,700, resulting in
a gain of approximately $448,300. The joint venture used the proceeds from the
sale of the property in Columbus, Ohio to acquire a property in Dallas, Texas at
an approximate cost of $1,147,400. The Partnership acquired the Property in
Denton, Texas and the joint venture acquired the property in Dallas, Texas from
CNL Funding 2001-A, LP, a Delaware limited partnership and an affiliate of the
general partners. CNL Funding 2001-A, LP had purchased and temporarily held
title to the Properties in order to facilitate the acquisition of the Properties
by the Partnership and the Joint Venture. The purchase price paid by the
Partnership and the Joint Venture represented the costs incurred by CNL Funding
2001-A, LP to acquire the Properties. The general partners believe that these
transactions, or a portion thereof, relating to the sales and the reinvestment
of the net sales proceeds, described above, will qualify as a like-kind
transaction for federal income tax purpose. The Partnership anticipates its
distributions will be sufficient to enable the limited partners to pay federal
and state income taxes, if any (at a level reasonably assumed by the general
partners), resulting from the transaction.
In addition in June 2002, CNL Restaurant Investments II Joint Venture
sold its property in Pontiac, Michigan to the tenant and received net sales
proceeds of approximately $722,600 resulting in a loss of $189,800. As of June
30, 2002, the Partnership had received approximately $265,900 representing a
return of capital for its pro-rata share of the uninvested net sales proceeds
relating to the Property in Pontiac, Michigan. In August 2002, the Partnership
reinvested a portion of the return of capital to acquire a Property in Kenosha,
Wisconsin, as tenants-in-common, with CNL Income Fund XVII, Ltd. ("CNL XVII"), a
Florida limited partnership and an affiliate of the general partners, at an
approximate cost of $1,883,000 from an unrelated third party. The Partnership
and CNL XVII entered into agreements whereby each co-tenant will share in the
profits and losses of each property in proportion to its applicable percentage
interest. As of September 30, 2002, the Partnership contributed approximately
$188,300 for a 10% interest in this property.
In September 2002, the Partnership, as tenants-in-common with CNL
Income Fund IX, Ltd.("CNL IX"), an affiliate of the general partners, sold its
property in Libertyville, Illinois, to an unrelated third party and received net
sales proceeds of approximately $1,630,400 resulting in a gain of approximately
$199,300. The Partnership owned a 66% interest in this property. The Partnership
and CNL IX, as a tenancy in common, used the proceeds from the sale of the
property to acquire a property in Buffalo Grove, Illinois at an approximate cost
of $1,588,800. The Property was acquired from CNL Net Lease Investors, L.P.
("NLI"). During 2002, and prior to the Partnership's acquisition of these
properties, CNL Financial LP Holding, LP ("CFN") and CNL Net Lease Investors GP
Corp. ("GP Corp") purchased the limited partner's interest and general partner's
interest, respectively, of NLI. Prior to this transaction, an affiliate of the
Partnership's general partners owned a 0.1% interest in NLI and served as a
general partner of NLI. The original general partners of NLI waived their rights
to benefit from this transaction. The acquisition price paid by CFN for the
limited partner's interest was based on the portfolio acquisition price. The
Partnership acquired the property at CFN's cost and did not pay any additional
compensation to CFN for the acquisition of the property. Each CNL entity is an
affiliate of the Partnership's general partners. The Partnership anticipates its
distributions will be sufficient to enable the limited partners to pay federal
and state income taxes, if any (at a level reasonably assumed by the general
partners), resulting from the transaction.
Currently, rental income from the Partnership's Properties is invested
in money market accounts or other short-term, highly liquid investments such as
demand deposit accounts at commercial banks, money market accounts and
certificates of deposit with less than a 90-day maturity date, pending the
Partnership's use of such funds to pay Partnership expenses or to make
distributions to the partners. At September 30, 2002, the Partnership had
$1,495,078 invested in such short-term investments, as compared to $2,085,133 at
December 31, 2001. The decrease in cash and cash equivalents at September 30,
2002, as compared to December 31, 2001, was primarily due to the fact that in
2002, the Partnership reinvested the prepaid principal received in 2001 relating
to a promissory note, as described above. The funds remaining at September 30,
2002, 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 generally 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 operations of the Partnership.
Total liabilities of the Partnership, including distributions payable,
increased to $946,786 at September 30, 2002, from $931,333 at December 31, 2001.
The general partners believe that the Partnership has sufficient cash on hand to
meet its current working capital needs.
The Partnership generally distributes cash from operations remaining
after the payment of the operating expenses of the Partnership, to the extent
that the general partners determine that such funds are available for
distribution. Based on cash from operations, the Partnership declared
distributions to limited partners of $2,362,503 for each of the nine months
ended September 30, 2002 and 2001 ($787,501 for each of the quarters ended
September 30, 2002 and 2001). This represents distributions for each applicable
nine months of $0.068 per unit ($0.023 per unit for each applicable quarter). No
distributions were made to the general partners for the quarters and nine months
ended September 30, 2002 and 2001. No amounts distributed to the limited
partners for the nine months ended September 30, 2002 and 2001 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.
Long-Term Liquidity
The Partnership has no long-term debt or other long-term liquidity
requirements.
Results of Operations
Total rental revenues were $2,024,088 for the nine months ended
September 30, 2002, as compared to $1,948,252 for the nine months ended
September 30, 2001, of which $743,609 and $626,683 were earned during the third
quarter of 2002 and 2001, respectively. The increase in rental revenues during
the quarter and nine months ended September 30, 2002, as compared to the same
periods in 2001, was primarily due to the fact that in 2002 the Partnership
reinvested in two Properties in Ontario, Oregon and Denton, Texas, as described
above in "Capital Resources." In addition, the increase in rental revenues in
the current quarter is the result of a reclassification of a rental allowance
granted to a tenant in the previous quarter for property renovations, as
described below. The increase in rental revenues during the nine months ended
September 30, 2002, as compared to the same period in 2001, was partially offset
by the sale of a Property in 2001.
During the nine months ended September 30, 2001, the tenant of the
Property in North Fort Myers, Florida, vacated the Property and ceased making
rental payments on this Property. As a result, the Partnership stopped recording
rental revenues relating to this Property. The lease was terminated in July
2001. The increase during the nine months ended September 30, 2002 was partially
offset by the fact that in September 2001, the Partnership entered into a new
lease with a new tenant for this Property for which rental payments are lower
than rents due under the previous lease; therefore, the Partnership expects that
rental revenues in future periods will remain at reduced amounts. Rents due
commenced in December 2001. The Partnership re-leased this Property to the new
tenant with terms substantially the same as the Partnership's other leases.
However, the general partners do not anticipate that any decrease in rental
revenues relating to the new lease will have a material adverse affect on the
Partnership's financial position or results of operations.
During the nine months ended September 30, 2002 and 2001, the
Partnership earned $61,485 and $236,399 respectively, in interest and other
income, of which $9,255 and $61,696 were earned during the quarters ended
September 30, 2002 and 2001, respectively. The decrease in interest and other
income during the quarter and nine months ended September 30, 2002, was
partially due to a reduction in interest income as a result of the prepayment of
principal on two mortgage notes of approximately $441,500 during 2001, and the
prepayment of principal on a third mortgage note of approximately $917,900
during 2002. The decrease in interest and other income during the nine months
ended September 30, 2002, was also partially due to the fact that during the
nine months ended September 30, 2001, the Partnership received and recorded as
income additional amounts relating to a settlement from the Florida Department
of Transportation for a right of way taking relating to a parcel of land on its
Property in Brooksville, Florida. In addition, interest and other income were
higher during the nine months ended September 30, 2001, as compared to the same
period in 2002, primarily due to higher average cash balances during the nine
months ended September 30, 2001.
During the nine months ended September 30, 2002 and 2001, the
Partnership recognized income of $539,346 and $285,584, respectively,
attributable to net operating results by unconsolidated joint ventures, of which
income of $239,385 and $107,815 were reported during the quarters ended
September 30, 2002 and 2001, respectively. The increase in operating results
reported by joint ventures during the nine months ended September 30, 2002, as
compared to the same periods in 2001, was partially due to the fact that CNL
Restaurant Investment II, Ltd., in which the Partnership owns a 36.8% interest,
sold its property in Columbus, Ohio to the tenant and received net sales
proceeds of approximately $1,215,700 resulting in a gain of approximately
$448,300. In addition, in June 2002, CNL Restaurant Investments II, Ltd. sold
its property in Pontiac, Michigan to the tenant and received net sales proceeds
of approximately $722,600 resulting in a loss of $189,800. The Partnership
recognized its pro-rata share of the net gain resulting from these sales, as
described below.
The increase in operating results reported by joint ventures during the
quarter and nine months ended September 30, 2002, as compared to the same
periods in 2001, was also partially due to the fact that the Partnership, as
tenants-in-common with CNL Income Fund IX, Ltd.("CNL IX"), an affiliate of the
general partners, sold its property in Libertyville, Illinois, to an unrelated
third party and received net sales proceeds of approximately $1,630,400
resulting in a gain of approximately $199,300. The Partnership owns a 66%
interest in this property. The Partnership recognized its pro-rata share of the
net gain resulting from this sale, as described below.
Net operating results reported by joint ventures also increased during
the nine months ended September 30, 2002, as compared to the same period in
2001, partially due to the fact that in 2001 the Partnership invested in a joint
venture and in three Properties, each as a separate tenants-in-common
arrangement, with Florida limited partnerships and affiliates of the general
partners. Net operating results reported by unconsolidated joint ventures during
the nine months ended September 30, 2001 were lower, when compared to the same
period in 2002, due to the sale of the Property owned by Middleburg Joint
Venture in March 2001. In connection with this sale, the Joint Venture
recognized a loss of approximately $61,900.
During the nine months ended September 30, 2002, three lessees of the
Partnership and its consolidated joint venture, (i) Golden Corral Corporation,
(ii) Carrols Corporation and (iii) Steak and Ale of Illinois, Inc. and Steak and
Ale of Colorado, Inc. (which are affiliated entities under common control of
Metromedia Restaurant Group), each contributed more than ten percent of the
Partnership's total rental revenues and mortgage interest income (including
rental revenues from the Partnership's consolidated joint venture and the
Partnership's share of rental revenues from Properties owned by joint ventures
and Properties owned with affiliates as tenants-in-common). It is anticipated
that, based on the minimum annual rental payments required by the leases, these
three lessees will continue to contribute more than ten percent of the
Partnership's total rental revenues and mortgage interest income. In addition,
during the nine months ended September 30, 2002, three restaurant chains, Burger
King, Golden Corral Family Steakhouse Restaurants and Bennigan's, each accounted
for more than ten percent of the Partnership's total rental revenues and
mortgage interest income (including rental revenues from the Partnership's
consolidated joint venture and the Partnership's share of rental revenues from
Properties owned by unconsolidated joint ventures and Properties owned with
affiliates as tenants-in-common). It is anticipated that these three restaurant
chains each will continue to account for more than ten percent of the
Partnership's total rental revenues and mortgage interest income 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 Property in a timely manner.
Operating expenses, including depreciation and amortization expense and
provision for write-down of assets were $576,837 and $893,054, for the nine
months ended September 30, 2002 and 2001, respectively, of which $206,453 and
$144,190 were incurred during the quarters ended September 30, 2002 and 2001,
respectively. Operating expenses were higher during the nine months ended
September 30, 2001, due to the fact that the Partnership recorded provisions for
write-down of assets in the amounts of $181,815 and $117,664, relating to the
Properties in North Fort Myers, Florida, and Statesville, North Carolina, due to
the tenants ceasing operations and vacating the Properties. The provisions
represented the difference between the carrying value of the Properties, and
their fair value at September 30, 2001. The Partnership also incurred real
estate taxes relating to the Property in North Fort Myers, Florida during the
nine months ended September 30, 2001. In December 2001, the Partnership entered
into a new lease with a new tenant, for the Property in North Fort Myers,
Florida, as described above, and the new tenant is responsible for the property
expenses.
In addition, the decrease in operating expenses during the nine months
ended September 30, 2002 was due to lower administrative expenses incurred for
servicing the Partnership and its Properties and due to a decrease in state
taxes. The decrease in operating expenses during the nine months ended September
30, 2002, was partially offset by an increase in depreciation expense due to the
purchase of two Properties during 2002 and the fact that during 2001, the
Partnership reclassified the lease relating to the Property in North Fort Myers,
Florida from direct financial leases to operating leases as a result of the
tenant vacating the Property.
The decrease in operating expenses during the quarter and nine months
ended September 30, 2002, as compared to the same period in 2001, was partially
offset by the fact that during the nine months ended September 30, 2002, the
Partnership elected to reimburse the tenant of several Golden Corral for certain
renovation costs.
Effective January 1, 2002, the Partnership adopted Statement of
Financial Accounting Standards No. 144 "Accounting for the Impairment or
Disposal of Long-Lived Assets." This statement requires that a long-lived asset
be tested for recoverability whenever events or changes in circumstances
indicate that its carrying amount may not be recoverable. The carrying amount of
a long-lived asset is not recoverable if it exceeds the sum of the undiscounted
cash flows expected to result from the use and eventual disposition of the
asset. The assessment is based on the carrying amount of the asset at the date
it is tested for recoverability. An impairment loss is recognized when the
carrying amount of a long-lived asset exceeds its fair value. If an impairment
is recognized, the adjusted carrying amount of a long-lived asset is its new
cost basis. The statement also requires that the results of operations of a
component of an entity that either has been disposed of or is classified as held
for sale be reported as a discontinued operation if the disposal activity was
initiated subsequent to the adoption of the Standard.
The Property in Statesville, North Carolina was sold in May 2001, and
the Partnership received net sales proceeds of approximately $877,000 resulting
in a gain of approximately $28,300.
During the nine months ended September 30, 2002, the Partnership
identified and sold one Property that met the criteria of this standard. The
financial results of this Property were classified as Discontinued Operations in
the accompanying financial statements. The majority of the net sales proceeds
from the sale of this Property were reinvested in an income producing Property.
During the nine months ended September 30, 2002, CNL Restaurant
Investments II Joint Venture, in which the Partnership owns a 36.8% interest,
identified and sold two Properties that met the criteria of this standard. In
addition, during the nine months ended September 30, 2002, the Partnership, as
tenants-in common with CNL Income Fund IX, Ltd., an affiliate of the general
partners, identified and sold a Property that also met the criteria of this
standard. The financial results of these Properties were reported as
Discontinued Operations in the condensed financial information for the
unconsolidted joint ventures and the properties held as tenants- in-common
presented in the footnotes to the accompanying financial statements. The
majority of the net sales proceeds from the sale of these Properties were
reinvested in additional income producing Properties owned directly and
indirectly, through joint venture and tenancy in common arrangements, as
discussed above in "Capital Resources."
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4. CONTROLS & 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 Affidavit and Certificate of Limited Partnership of CNL
Income Fund VIII, Ltd. (Included as Exhibit 3.2 to
Registration Statement No. 33-31482 on Form S-11 and
incorporated herein by reference.)
4.1 Affidavit and Certificate of Limited Partnership of CNL
Income Fund VIII, Ltd. (Included as Exhibit 3.2 to
Registration Statement No. 33-31482 on Form S-11 and
incorporated herein by reference.)
4.2 Amended and Restated Agreement of Limited Partnership of CNL
Income Fund VIII, Ltd. (Included as Exhibit 4.2 to Form 10-K
filed with the Securities and Exchange Commission on April 1,
1996, and incorporated herein by reference.)
10.1 Management Agreement between CNL Income Fund VIII, Ltd. and
CNL Investment Company (Included as Exhibit 10.1 to Form 10-K
filed with the Securities and Exchange Commission on April 1,
1996, and incorporated herein by reference.)
10.2 Assignment of 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 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
September 30, 2002.
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 7TH day of November, 2002.
CNL INCOME FUND VIII, 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 VIII, 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: November 7, 2002
/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 VIII, 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: November 7, 2002
/s/ Robert A. Bourne
- --------------------
Robert A. Bourne
President and Treasurer
EXHIBIT INDEX
Exhibit Number
(c) Exhibits
3.1 Affidavit and Certificate of Limited Partnership of CNL
Income Fund VIII, Ltd. (Included as Exhibit 3.2 to
Registration Statement No. 33-31482 on Form S-11 and
incorporated herein by reference.)
4.1 Affidavit and Certificate of Limited Partnership of CNL
Income Fund VIII, Ltd. (Included as Exhibit 3.2 to
Registration Statement No. 33-31482 on Form S-11 and
incorporated herein by reference.)
4.2 Amended and Restated Agreement of Limited Partnership of
CNL Income Fund VIII, Ltd. (Included as Exhibit 4.2 to
Form 10-K filed with the Securities and Exchange
Commission on April 1, 1996, and incorporated herein by
reference.)
10.1 Management Agreement between CNL Income Fund VIII, Ltd.
and CNL Investment Company (Included as Exhibit 10.1 to
Form 10-K filed with the Securities and Exchange
Commission on April 1, 1996, and incorporated herein by
reference.)
10.2 Assignment of 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 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