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
0-21560
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CNL Income Fund XI, Ltd.
- -----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 59-3078854
- ----------------------------------- ----------------------------
(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 XI, LTD.
(A Florida Limited Partnership)
CONDENSED BALANCE SHEETS
March 31, December 31,
2003 2002
------------------- -------------------
ASSETS
Real estate properties with operating leases, net $ 18,920,137 $ 19,016,839
Net investment in direct financing leases 6,441,298 6,489,145
Real estate held for sale -- 553,897
Investment in joint ventures 4,390,776 4,414,071
Cash and cash equivalents 1,672,302 1,763,878
Restricted cash 932,660 --
Receivables, less allowance for doubtful accounts
of $37,966 and $23,196, respectively 86,926 230,688
Accrued rental income 1,703,151 1,715,758
Other assets 138,636 135,940
------------------- -------------------
$ 34,285,886 $ 34,320,216
=================== ===================
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and accrued expenses $ 34,060 $ 3,271
Real estate taxes payable 21,062 15,632
Distributions payable 875,006 1,075,006
Due to related parties 20,016 20,101
Rents paid in advance and security deposits 98,016 163,020
------------------- -------------------
Total liabilities 1,048,160 1,277,030
Minority interests 507,421 507,991
Partners' capital 32,730,305 32,535,195
------------------- -------------------
$ 34,285,886 $ 34,320,216
=================== ===================
See accompanying notes to condensed financial statements.
CNL INCOME FUND XI, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF INCOME
Quarter Ended
March 31,
2003 2002
-------------- ---------------
Revenues:
Rental income from operating leases $ 595,910 $ 587,163
Earned income from direct financing leases 201,181 212,048
Contingent rental income 1,304 21,411
Interest and other income 4,837 1,242
-------------- ---------------
803,232 821,864
-------------- ---------------
Expenses:
General operating and administrative 77,393 83,967
Property expenses 4,150 8,872
Management fees to related party 7,619 10,802
State and other taxes 28,003 21,701
Depreciation 96,702 99,252
-------------- ---------------
213,867 224,594
-------------- ---------------
Income Before Minority Interests in Income of Consolidated
Joint Ventures and Equity in Earnings of Unconsolidated
Joint Ventures 589,365 597,270
Minority Interests in Income of Consolidated
Joint Ventures (14,751 ) (16,442 )
Equity in Earnings of Unconsolidated Joint Ventures 99,535 57,219
-------------- ---------------
Income from Continuing Operations 674,149 638,047
-------------- ---------------
Discontinued Operations:
Income from discontinued operations 18,006 51,521
Gain on disposal of discontinued operations 377,961 --
-------------- ---------------
395,967 51,521
-------------- ---------------
Net Income $ 1,070,116 $ 689,568
============== ===============
Income Per Limited Partner Unit:
Continuing Operations $ 0.17 $ 0.16
Discontinued Operations 0.10 0.01
-------------- ---------------
Total $ 0.27 $ 0.17
============== ===============
Weighted Average Number of Limited Partner
Units Outstanding 4,000,000 4,000,000
============== ===============
See accompanying notes to condensed financial statements.
CNL INCOME FUND XI, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF PARTNERS' CAPITAL
Quarter Ended Year Ended
March 31, December 31,
2003 2002
------------------- ------------------
General partners:
Beginning balance $ 242,465 $ 242,465
Net income -- --
------------------- ------------------
242,465 242,465
------------------- ------------------
Limited partners:
Beginning balance 32,292,730 31,678,628
Net income 1,070,116 4,314,126
Distributions ($0.22 and $0.93 per
limited partner unit, respectively) (875,006 ) (3,700,024 )
------------------- ------------------
32,487,840 32,292,730
------------------- ------------------
Total partners' capital $ 32,730,305 $ 32,535,195
=================== ==================
See accompanying notes to condensed financial statements.
CNL INCOME FUND XI, 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 $ 998,751 $ 990,157
--------------- ---------------
Cash Flows from Investing Activities:
Proceeds from sale of real estate properties 931,858 --
Redemption of certificates of deposit -- 211,587
Increase in restricted cash (931,858 )
--------------- ---------------
Net cash provided by investing activities -- 211,587
--------------- ---------------
Cash Flows from Financing Activities:
Distributions to limited partners (1,075,006 ) (875,006 )
Distributions to holders of minority interests (15,321 ) (16,141 )
--------------- ---------------
Net cash used in financing activities (1,090,327 ) (891,147 )
--------------- ---------------
Net Increase (Decrease) in Cash and Cash Equivalents (91,576 ) 310,597
Cash and Cash Equivalents at Beginning of Quarter 1,763,878 993,402
--------------- ---------------
Cash and Cash Equivalents at End of Quarter $ 1,672,302 $ 1,303,999
=============== ===============
Supplemental Schedule of Non-Cash Financing
Activities:
Distributions declared and unpaid at end of
quarter $ 875,006 $ 875,006
=============== ===============
See accompanying notes to condensed financial statements.
CNL INCOME FUND XI, 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 XI, Ltd. (the "Partnership") for the year ended December
31, 2002.
The Partnership accounts for its 85% interest in Denver Joint Venture
and its 77.33% interest in CNL/Airport Joint Venture using the
consolidation method. Minority interests represent the minority joint
venture partners' proportionate share of the equity in the
Partnership's consolidated joint ventures. All significant intercompany
accounts and transactions have been eliminated.
In January 2003, FASB issued FASB Interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities" to expand upon and
strengthen existing accounting guidance that addresses when a company
should include the assets, liabilities and activities of another entity
in its financial statements. To improve financial reporting by
companies involved with variable interest entities (more commonly
referred to as special-purpose entities or off-balance sheet
structures), FIN 46 requires that a variable interest entity be
consolidated by a company if that company is subject to a majority risk
of loss from the variable interest entity's activities or entitled to
receive a majority of the entity's residual returns or both. Prior to
FIN 46, a company generally included another entity in its consolidated
financial statements only if it controlled the entity through voting
interests. Consolidation of variable interest entities will provide
more complete information about the resources, obligations, risks and
opportunities of the consolidated company. The consolidation
requirements of FIN 46 apply immediately to variable interest entities
created after January 31, 2003, and to older entities, in the first
fiscal year or interim period beginning after June 15, 2003. The
general partners believe adoption of this standard may result in either
consolidation or additional disclosure requirements with respect to the
Partnership's unconsolidated joint ventures or properties held with
affiliates of the general partners as tenants-in-common, which are
currently accounted for under the equity method. However, such
consolidation is not expected to significantly impact the Partnership's
results of operations.
2. Reclassification:
----------------
Certain items in the prior year's financial statements have been
reclassified to conform to 2003 presentation. These reclassifications
had no effect on total partners' capital or net income.
3. Discontinued Operations:
-----------------------
During 2002, the Partnership identified and sold two properties. In
addition, during the quarter ended March 31 2003, the Partnership
identified and sold its property in Abilene, Texas to the tenant and
received net sales proceeds of approximately $931,900, resulting in a
gain of approximately $378,000. The financial results for these
properties are reflected as Discontinued Operations in the accompanying
financial statements.
CNL INCOME FUND XI, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters Ended March 31, 2003 and 2002
3. Discontinued Operations - Continued:
-----------------------------------
The operating results of the discontinued operations for the above
properties are as follows:
Quarter Ended March 31,
2003 2002
-------------- --------------
Rental revenues $ 21,491 $ 59,163
Expenses (3,485 ) (7,642 )
Gain on disposal of assets 377,961 --
-------------- --------------
Income from discontinued operations $ 395,967 $ 51,521
============== ==============
4. Concentration of Credit Risk:
----------------------------
The following schedule presents total rental revenues from individual
lessees, each representing more than ten percent of rental revenues
(including the Partnership's share of rental revenues from the
unconsolidated joint ventures and the properties held as
tenants-in-common with affiliates of the general partners), for each of
the quarters ended March 31:
2003 2002
-------------- ---------------
Jack in the Box Inc. and Jack in
the Box Eastern Division, L.P. $ 192,019 $ 191,214
Golden Corral Corporation 103,770 127,143
Texas Taco Cabana, LP 101,572 N/A
In addition, the following schedule presents total rental revenues from
individual restaurant chains, each representing more than ten percent
of rental revenues (including the Partnership's share of rental
revenues from the unconsolidated joint ventures and the properties held
as tenants-in-common with affiliates of the general partners), for each
of the quarters ended March 31:
2003 2002
-------------- ---------------
Burger King $ 200,327 $ 245,719
Jack in the Box 192,019 191,214
Denny's 138,088 182,473
Golden Corral Family Steakhouse
Restaurants 103,770 127,143
Taco Cabana 101,572 N/A
The information denoted by N/A indicates that for each period
presented, the tenant or group of affiliated tenants, and the chain did
not represent more than ten percent of the Partnership's total rental
revenues.
Although the Partnership's properties have some geographical diversity
in the United States and the Partnership's lessees operate a variety of
restaurant concepts, default by any of these lessees or restaurant
chains could 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 XI, Ltd. (the "Partnership") is a Florida limited
partnership that was organized on August 20, 1991 to acquire for cash, either
directly or through joint venture arrangements, both newly constructed and
existing restaurants, as well as properties 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, in general, triple-net leases, with the lessees responsible for all repairs
and maintenance, property taxes, insurance, and utilities. The Partnership owned
31 and 34 Properties directly as of March 31, 2003 and 2002, respectively. The
Partnership also owned eight and six Properties indirectly through joint venture
or tenancy in common arrangements as of March 31, 2003 and 2002.
Capital Resources
Cash from operating activities was $998,751 and $990,157 for the
quarters ended March 31, 2003 and 2002, respectively. The increase in cash from
operating activities for the quarter ended March 31, 2003, as compared to the
quarter ended March 31, 2002, was a result of changes in the Partnership's
working capital.
Other sources and uses of cash included the following during the
quarter ended March 31, 2003.
In March 2003, the Partnership sold its Property in Abilene, Texas to
the tenant and received net sales proceeds of approximately $931,900, resulting
in a gain of approximately $378,000. The Partnership expects to reinvest these
proceeds in an additional Property.
Cash and cash equivalents of the Partnership decreased to $1,672,302 at
March 31, 2003, from $1,763,878 at December 31, 2002, primarily as a result of
the payment of a special distribution to the limited partners during the quarter
ended March 31, 2003, which was accrued at December 31, 2002. The special
distribution of $200,000 represented accumulated, excess operating reserves. 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 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 $875,006 for each of the quarters ended March 31, 2003 and 2002.
This represents distributions of $0.22 per unit for each applicable quarter. 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,
decreased to $1,048,160 at March 31, 2003 from $1,277,030 at December 31, 2002,
primarily as a result of the payment of a special distribution to the limited
partners during the quarter ended March 31, 2003, which was accrued at December
31, 2002. The special distribution of $200,000 represented accumulated, excess
operating reserves. 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 $797,091 for the quarter ended March 31,
2003, as compared to $799,211 in the same period in 2002. During 2003, the
Partnership's consolidated joint venture, Denver Joint Venture, in which the
Partnership owns an 85% interest, stopped recording rental revenues because the
tenant of the Property owned by this joint venture experienced financial
difficulties. The joint venture will continue to pursue collection of these past
due rents.
During the quarter ended March 31, 2002, the Partnership provided a
rent reduction to the tenant of the Property in Yelm, Washington in the amount
of $16,500. However, the tenant continued having financial difficulties, and in
March 2003, although the tenant continued to meet its obligations under the
terms of this lease, the Partnership executed a termination of the tenant's
lease rights, and the tenant surrendered the premises. The restaurant has
continued to operate under a temporary lease agreement with a new tenant until
the negotiations for a new contract with this lessee are finalized. The
Partnership expects that the new tenant will continue to operate as a Burger
King with lease terms substantially the same as the Partnership's other leases.
During the quarters ended March 31, 2003 and 2002, the Partnership and
its consolidated joint ventures also earned $1,304 and $21,411, 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.
During the quarters ended March 31, 2003 and 2002, the Partnership
earned $99,535 and $57,219, respectively, attributable to net income earned by
unconsolidated joint ventures. The increase in net income earned by
unconsolidated joint ventures during the quarter ended March 31, 2003 was
primarily due to the Partnership reinvesting the majority of the net sales
proceeds, from the sales of the Properties in Columbus, Ohio and East Detroit,
Michigan, in two Properties, one in Universal City and the other in Schertz,
Texas. Each Property is held as a separate tenancy-in-common arrangement with
CNL Income Fund VI, Ltd., a Florida limited partnership and affiliate of the
general partners.
During the quarter ended March 31, 2003, three lessees (or groups of
affiliated lessees) of the Partnership and its consolidated joint ventures, (i)
Jack in the Box Inc. and Jack in the Box Eastern Division, L.P. (which are
affiliated entities under common control) (hereinafter referred to as "Jack in
the Box Inc."), (ii) Golden Corral Corporation, and (iii) Texas Taco Cabana, LP,
each contributed more than 10% of the Partnership's total rental revenues
(including rental revenues from the Partnership's consolidated joint ventures,
and the Partnership's share of rental revenues from Properties owned by
unconsolidated joint ventures and Properties owned with affiliates of the
general partners as tenants-in-common). It is anticipated that, based on the
minimum rental payments required by the leases, these three lessees (or groups
of affiliated lessees) each will continue to contribute more than 10% of the
Partnership's total rental revenues. In addition during the quarter ended March
31, 2003, five restaurant chains, Burger King, Jack in the Box, Denny's, Golden
Corral Family Steakhouse Restaurants ("Golden Corral"), and Taco Cabana, each
accounted for more than 10% of the Partnership's total rental revenues
(including rental revenues from the Partnership's consolidated joint ventures,
and the Partnership's share of rental revenues from Properties owned by
unconsolidated joint ventures and Properties owned with affiliates of the
general partners as tenants-in-common). It is anticipated that these five
restaurant chains each will continue to account for more than 10% of the
Partnership's total rental revenues to which the Partnership is entitled under
the terms of the leases. Any failure of these lessees or restaurant chains will
materially affect the Partnership's income if the Partnership is not able to
re-lease the Properties in a timely manner.
Operating expenses, including depreciation, were $213,867 and $224,594
for the quarters ended March 31, 2003 and 2002, respectively. The decrease in
operating expenses during the quarter ended March 31, 2003 was partially due a
decrease in the costs incurred for administrative expenses for servicing the
Partnership and its Properties. The decrease in operating expenses was partially
offset by an increase in the amount of state tax expense relating to several
states in which the Partnership conducts business.
During the year ended December 31, 2002, the Partnership identified and
sold two Properties that were classified as Discontinued Operations in the
accompanying financial statements. These two Properties were sold in 2002
subsequent to March 31, 2002. In addition, during the quarter ended March 31
2003, the Partnership identified and sold its Property in Abilene, Texas to the
tenant and received net sales proceeds of approximately $931,900, resulting in a
gain of approximately $378,000. This Property was also classified as
Discontinued Operations in the accompanying financial statements. The
Partnership recognized net rental income (rental revenues less Property related
expenses), of $51,521 during the quarter ended March 31, 2002 relating to these
three Properties. The Partnership recognized net rental income of $18,006 during
the quarter ended March 31, 2003, relating to the Property in Abilene, Texas.
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 Affidavit and Certificate of Limited Partnership
of CNL Income Fund XI, Ltd. (Included as Exhibit
3.2 to Registration Statement No. 33-43278 on
Form S-11 and incorporated herein by reference.)
4.1 Affidavit and Certificate of Limited Partnership
of CNL Income Fund XI, Ltd. (Included as Exhibit
3.2 to Registration Statement No. 33-43278 on
Form S-11 and incorporated herein by reference.)
4.2 Amended and Restated Agreement of Limited
Partnership of CNL Income Fund XI, Ltd. (Included
as Exhibit 4.2 to Form 10-K filed with the
Securities and Exchange Commission on April 15,
1993, and incorporated herein by reference.)
10.1 Management Agreement between CNL Income Fund XI,
Ltd. and CNL Investment Company (Included as
Exhibit 10.1 to Form 10-K filed with the
Securities and Exchange Commission on April 15,
1993, and incorporated herein by reference.)
10.2 Assignment of Management Agreement from CNL
Investment Company to CNL 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 14,
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 XI, 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 XI, 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 XI, Ltd. (the "registrant")
certify that:
1. I have reviewed this quarterly report on Form 10-Q of the
registrant;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect
to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented
in this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
a. designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior
to the filing date of this quarterly report (the
"Evaluation Date"); and
c. presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrant's auditors
and the audit committee of registrant's board of directors (or
persons performing the equivalent function):
a. all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and
b. any fraud, whether or not material, that involves
management or other employees who have a significant role
in the registrant's internal controls; and
6. The registrant's other certifying officer and I have indicated in
this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: May 9, 2003
/s/ Robert A. Bourne
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Robert A. Bourne
President and Treasurer
EXHIBIT INDEX
Exhibit Number
(c) Exhibits
3.1 Affidavit and Certificate of Limited Partnership of CNL
Income Fund XI, Ltd. (Included as Exhibit 3.2 to
Registration Statement No. 33-43278 on Form S-11 and
incorporated herein by reference.)
4.1 Affidavit and Certificate of Limited Partnership of CNL
Income Fund XI, Ltd. (Included as Exhibit 3.2 to
Registration Statement No. 33-43278 on Form S-11 and
incorporated herein by reference.)
4.2 Amended and Restated Agreement of Limited Partnership of
CNL Income Fund XI, Ltd. (Included as Exhibit 4.2 to Form
10-K filed with the Securities and Exchange Commission on
April 15, 1993, and incorporated herein by reference.)
10.1 Management Agreement between CNL Income Fund XI, Ltd. and
CNL Investment Company (Included as Exhibit 10.1 to Form
10-K filed with the Securities and Exchange Commission on
April 15, 1993, and incorporated herein by reference.)
10.2 Assignment of Management Agreement from CNL Investment
Company to CNL 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 14, 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