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
0-26218
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CNL Income Fund XVI, Ltd.
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 59-3198891
- --------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
450 South Orange Ave.
Orlando, Florida 32801 - 3336
- --------------------------------- -------------------------------
(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
Part I Page
----
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 XVI, LTD.
(A Florida Limited Partnership)
CONDENSED BALANCE SHEETS
March 31, December 31,
2003 2002
------------------- -------------------
ASSETS
Real estate properties with operating leases, net $ 24,639,122 $ 24,762,953
Net investment in direct financing leases 2,647,914 2,662,948
Real estate held for sale -- 153,500
Investment in joint ventures 3,437,995 3,446,648
Cash and cash equivalents 1,517,517 1,343,836
Receivables, less allowance for doubtful accounts
of $58,582 and $63,752, respectively 42 49,577
Due from related parties 5,210 18,966
Accrued rental income, less allowance for doubtful accounts of
$12,753 in 2003 and 2002 1,590,698 1,549,115
Other assets 29,132 32,038
------------------- -------------------
$ 33,867,630 $ 34,019,581
=================== ===================
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 32,541 $ 3,505
Real estate taxes payable 6,247 10,502
Distributions payable 900,000 900,000
Due to related parties 19,081 18,292
Rents paid in advance and deposits 116,785 97,342
------------------- -------------------
Total liabilities 1,074,654 1,029,641
Partners' capital 32,792,976 32,989,940
------------------- -------------------
$ 33,867,630 $ 34,019,581
=================== ===================
See accompanying notes to condensed financial statements.
CNL INCOME FUND XVI, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF INCOME
Quarter Ended
March 31,
2003 2002
-------------- --------------
Revenues:
Rental income from operating leases $ 786,799 $ 743,661
Earned income from direct financing leases 73,163 75,569
Interest and other income 348 8,953
-------------- --------------
860,310 828,183
-------------- --------------
Expenses:
General operating and administrative 74,950 73,555
Property expenses 3,848 5,922
Management fees to related parties 9,229 9,354
State and other taxes 25,878 16,708
Depreciation and amortization 124,548 117,377
-------------- --------------
238,453 222,916
-------------- --------------
Income Before Equity in Earnings of Joint Ventures 621,857 605,267
Equity in Earnings of Joint Ventures 81,134 75,155
-------------- --------------
Income from Continuing Operations 702,991 680,422
-------------- --------------
Discontinued Operations:
Income (loss) from discontinued operations (947 ) 3,835
Gain on disposal of discontinued operations 992 --
-------------- --------------
45 3,835
-------------- --------------
Net Income $ 703,036 $ 684,257
============== ==============
Net Income Per Limited Partner Unit
Continuing $ 0.16 $ 0.15
Discontinued -- --
-------------- --------------
Total $ 0.16 $ 0.15
============== ==============
Weighted Average Number of Limited Partner
Units Outstanding 4,500,000 4,500,000
============== ==============
See accompanying notes to condensed financial statements.
CNL INCOME FUND XVI, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF PARTNERS' CAPITAL
Quarter Ended Year Ended
March 31, December 31,
2003 2002
------------------- ------------------
General partners:
Beginning balance $ 160,017 $ 160,017
Net income -- --
------------------- ------------------
160,017 160,017
------------------- ------------------
Limited partners:
Beginning balance 32,829,923 33,132,595
Net income 703,036 3,297,328
Distributions ($0.20 and $0.80 per limited
partner unit, respectively) (900,000 ) (3,600,000 )
------------------- ------------------
32,632,959 32,829,923
------------------- ------------------
Total partners' capital $ 32,792,976 $ 32,989,940
=================== ==================
See accompanying notes to condensed financial statements.
CNL INCOME FUND XVI, 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 $ 919,189 $ 834,468
----------------- -----------------
Cash Flows from Investing Activities:
Proceeds from sale of assets 154,492 448,675
Investment in joint venture -- (10,647 )
----------------- -----------------
Net cash provided by investing activities 154,492 438,028
----------------- -----------------
Cash Flows from Financing Activities:
Distributions to limited partners (900,000 ) (900,000 )
----------------- -----------------
Net cash used in financing activities (900,000 ) (900,000 )
----------------- -----------------
Net Increase in Cash and Cash Equivalents 173,681 372,496
Cash and Cash Equivalents at Beginning of Quarter 1,343,836 774,673
----------------- -----------------
Cash and Cash Equivalents at End of Quarter $ 1,517,517 $ 1,147,169
================= =================
Supplemental Schedule of Non-Cash Financing Activities:
Distributions declared and unpaid at end of quarter $ 900,000 $ 900,000
================= =================
See accompanying notes to condensed financial statements.
CNL INCOME FUND XVI, 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 XVI, Ltd. (the "Partnership") for the year ended December
31, 2002.
In January 2003, FASB issued FASB Interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities" to expand upon and
strengthen existing accounting guidance that addresses when a company
should include the assets, liabilities and activities of another entity
in its financial statements. To improve financial reporting by
companies involved with variable interest entities (more commonly
referred to as special-purpose entities or off-balance sheet
structures), FIN 46 requires that a variable interest entity be
consolidated by a company if that company is subject to a majority risk
of loss from the variable interest entity's activities or entitled to
receive a majority of the entity's residual returns or both. Prior to
FIN 46, a company generally included another entity in its consolidated
financial statements only if it controlled the entity through voting
interests. Consolidation of variable interest entities will provide
more complete information about the resources, obligations, risks and
opportunities of the consolidated company. The consolidation
requirements of FIN 46 apply immediately to variable interest entities
created after January 31, 2003, and to older entities, in the first
fiscal year or interim period beginning after June 15, 2003. The
general partners believe adoption of this standard may result in either
consolidation or additional disclosure requirements with respect to the
Partnership's unconsolidated joint ventures or properties held with
affiliates of the general partners as tenants-in-common, which are
currently accounted for under the equity method. However, such
consolidation is not expected to significantly impact the Partnership's
results of operations.
2. Reclassification:
----------------
Certain items in the prior year's financial statements have been
reclassified to conform to 2003 presentation. These reclassifications
had no effect on total partners' capital or net income.
CNL INCOME FUND XVI, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters Ended March 31, 2003 and 2002
3. Discontinued Operations:
-----------------------
During 2002, the Partnership identified for sale four properties that
were classified as Discontinued Operations in the accompanying
financial statements. The Partnership sold three of the four properties
during 2002. In February 2003, the Partnership sold the fourth
property, resulting in a gain on disposal of assets of approximately
$1,000 during the quarter ended March 31, 2003. The Partnership
recorded provisions for write-down of assets in previous years relating
to this property.
The operating results of the discontinued operations for the above
properties are as follows:
Quarter Ended March 31,
2003 2002
----------------- --------------
Rental revenues $ -- $ 26,721
Expenses (947 ) (22,886 )
Gain on disposal of assets 992 --
----------------- --------------
Income from discontinued operations $ 45 $ 3,835
================= ==============
4. Related Party Transactions:
--------------------------
During 2001, Phoenix Restaurant Group, Inc. ("PRG") filed for
bankruptcy and rejected two of the four leases it had with the
Partnership. In May and June 2002, the bankruptcy court assigned the
two leases not rejected by PRG relating to the properties in Branson,
Missouri and Temple, Texas to CherryDen, LLC and Seana, LLC,
respectively. CherryDen, LLC is an affiliate of the general partners.
All other lease terms remained the same. In connection with the lease
to CherryDen, LLC, the Partnership recognized rental revenues of
approximately $69,400 relating to the property in Branson, Missouri
during the quarter ended March 31, 2003.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
CNL Income Fund XVI, Ltd. (the "Partnership") is a Florida limited
partnership that was organized on September 2, 1993, to acquire for cash, either
directly or through joint venture arrangements, both newly constructed and
existing restaurant properties, as well as land upon which restaurants were to
be constructed (the "Properties"), which are leased primarily to operators of
national and regional fast-food and family-style restaurant chains. The leases
are generally triple-net leases, with the lessee responsible for all repairs and
maintenance, property taxes, insurance and utilities. As of March 31, 2002, the
Partnership owned 36 Properties directly and five Properties indirectly through
joint venture or tenancy in common arrangements. As of March 31, 2003, the
Partnership owned 34 Properties directly and six Properties indirectly through
joint venture or tenancy in common arrangements.
Capital Resources
Cash from operating activities was $919,189 and $834,468 during the
quarters ended March 31, 2003 and 2002, respectively. The increase in cash from
operating activities during the quarter ended March 31, 2003, as compared to the
quarter ended March 31, 2002, was primarily 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 February 2003, the Partnership sold its Property in Salina, Kansas,
to a third party and received net sales proceeds of approximately $154,500,
resulting in a gain on disposal of assets of approximately $1,000 during the
quarter ended March 31, 2003. The Partnership had recorded provisions for
write-down of assets in previous years relating to this asset. The Partnership
intends to reinvest the net sales proceeds in an additional Property.
At March 31, 2003, the Partnership had $1,517,517 in cash and cash
equivalents, as compared to $1,343,836 at December 31, 2002. This increase was
primarily a result of the Partnership holding sales proceeds at March 31, 2003,
pending reinvestment in additional Properties. The funds remaining at March 31,
2003, after the payment of distributions and other liabilities, will be used to
invest in additional Properties and to meet the Partnership's working capital
needs.
Short-Term Liquidity
The Partnership's investment strategy of acquiring Properties for cash
and leasing them under triple-net leases to operators who generally meet
specified financial standards minimizes the Partnership's operating expenses.
The general partners believe that the leases will 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,
were $1,074,654 at March 31, 2003, as compared to $1,029,641 at December 31,
2002. The increase in liabilities at March 31, 2003 was primarily due to an
increase in accounts payable and rents paid in advance at March 31, 2003, as
compared to December 31, 2002. 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 operating expenses of the Partnership. Based on current
and, for the quarter ended March 31, 2002, anticipated future cash from
operations, the Partnership declared distributions to limited partners of
$900,000 for each of the quarters ended March 31, 2003 and 2002. This represents
distributions of $0.20 per unit for each of the quarters. 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.
Long-Term Liquidity
The Partnership has no long-term debt or other long-term liquidity
requirements.
Results of Operations
Total rental revenues were $859,962 during the quarter ended March 31,
2003, as compared to $819,230 during the same period of 2002. Rental revenues
were higher during the quarter ended March 31, 2003 because in June 2002 the
Partnership reinvested the sales proceeds from the 2002 sale of the Property in
Rancho Cordova, California in a Property in Austin, Texas.
The Partnership also earned $81,134 attributable to net income earned
by joint ventures during the quarter ended March 31, 2003, as compared to
$75,155 during the same period of 2002. The increase in net income earned by
joint ventures during the quarter ended March 31, 2003 was due to the
Partnership reinvesting a portion of the net sales proceeds from the 2002 sale
of the Property in Mesquite, Texas in a joint venture arrangement, Arlington
Joint Venture, with CNL Income Fund VII, Ltd., a Florida limited partnership and
an affiliate of the general partners.
The Partnership also earned $348 in interest and other income during
the quarter ended March 31, 2003, as compared to $8,953 during the same period
of 2002. Interest income was lower during 2003 because the Partnership
reinvested sales proceeds in June 2002 that had been held in interest bearing
bank accounts.
Operating expenses, including depreciation and amortization expense,
were $238,453 during the quarter ended March 31, 2003, as compared to $222,916
during the same period of 2002. Operating expenses were higher during the
quarter ended March 31, 2003, due to an increase in the amount of state tax
expense relating to several states in which the Partnership conducts business
and an increase in depreciation expense resulting from the 2002 acquisition of
the Property in Austin, Texas.
During the year ended December 31, 2002, the Partnership identified for
sale four Properties that were classified as Discontinued Operations in the
accompanying financial statements. The Partnership recognized net rental income
(rental revenues less Property related expenses), of $3,835 during the quarter
ended March 31, 2002 relating to these four Properties. The Partnership sold the
Property in Mesquite, Texas during the quarter ended March 31, 2002 and the
Properties in Rancho Cordova, California and Bucyrus, Ohio subsequent to March
31, 2002. Because the Partnership had recorded provisions for write-down of
assets in previous years, no gain or loss was recorded during the quarter ended
March 31, 2002 relating to the sale of the Property in Mesquite, Texas. In
February 2003, the Partnership sold the third Property, located in Salina,
Kansas, and recorded a gain on disposal of assets of approximately $1,000. The
Partnership had recorded provisions for write-down of assets in previous years
relating to this Property. The Partnership recognized a net rental loss of $947
during the quarter ended March 31, 2003, relating to this Property.
In January 2003, FASB issued FASB Interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities" to expand upon and strengthen
existing accounting guidance that addresses when a company should include the
assets, liabilities and activities of another entity in its financial
statements. To improve financial reporting by companies involved with variable
interest entities (more commonly referred to as special-purpose entities or
off-balance sheet structures), FIN 46 requires that a variable interest entity
be consolidated by a company if that company is subject to a majority risk of
loss from the variable interest entity's activities or entitled to receive a
majority of the entity's residual returns or both. Prior to FIN 46, a company
generally included another entity in its consolidated financial statements only
if it controlled the entity through voting interests. Consolidation of variable
interest entities will provide more complete information about the resources,
obligations, risks and opportunities of the consolidated company. The
consolidation requirements of FIN 46 apply immediately to variable interest
entities created after January 31, 2003, and to older entities, in the first
fiscal year or interim period beginning after June 15, 2003. The general
partners believe adoption of this standard may result in either consolidation or
additional disclosure requirements with respect to the Partnership's
unconsolidated joint ventures or Properties held with affiliates of the general
partners as tenants-in-common, which are currently accounted for under the
equity method. However, such consolidation is not expected to significantly
impact the Partnership's results of operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
The general partners maintain a set of disclosure controls and
procedures designed to ensure that information required to be disclosed in the
Partnership's filings under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms. The principal executive
and financial officers of the corporate general partner have evaluated the
Partnership's disclosure controls and procedures within 90 days prior to the
filing of this Quarterly Report on Form 10-Q and have determined that such
disclosure controls and procedures are effective.
Subsequent to the above evaluation, there were no significant changes
in internal controls or other factors that could significantly affect these
controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. Inapplicable.
------------------
Item 2. Changes in Securities. Inapplicable.
----------------------
Item 3. Default 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 XVI, Ltd. (Included as Exhibit 3.2 to
Registration Statement No. 33-69968-01 on Form S-11
and incorporated herein by reference.)
4.1 Affidavit and Certificate of Limited Partnership of
CNL Income Fund XVI, Ltd. (Included as Exhibit 3.2 to
Registration Statement No. 33-69968-01 on Form S-11
and incorporated herein by reference.)
4.2 Amended and Restated Agreement of Limited Partnership
of CNL Income Fund XVI, Ltd. (Included as Exhibit 4.2
to Form 10-K filed with the Securities and Exchange
Commission on March 30, 1995, and incorporated herein
by reference.)
10.1 Management Agreement between CNL Income Fund XVI, Ltd.
and CNL Investment Company (Included as Exhibit 10.1
to Form 10-K filed with the Securities and Exchange
Commission on March 30, 1995, 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 13, 2001, and
incorporated herein by reference).
10.5 Assignment of Management Agreement from CNL APF
Partners, LP to CNL Restaurants XVIII, Inc. (Included
as Exhibit 10.5 to Form 10-Q filed with the Securities
and Exchange Commission on August 13, 2002, and
incorporated herein by reference.)
99.1 Certification of Chief Executive Officer of Corporate
General Partner Pursuant to 18 U.S.C. Section 1350 as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002. (Filed herewith.)
99.2 Certification of Chief Financial Officer of Corporate
General Partner Pursuant to 18 U.S.C. Section 1350 as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002. (Filed herewith.)
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter
ended March 31, 2003.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
DATED this 6th day of May, 2003.
CNL INCOME FUND XVI, 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 XVI, 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 6, 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 XVI, 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 6, 2003
/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 XVI, Ltd. (Included as Exhibit 3.2 to
Registration Statement No. 33-69968-01 on Form S-11 and
incorporated herein by reference.)
4.1 Affidavit and Certificate of Limited Partnership of CNL
Income Fund XVI, Ltd. (Included as Exhibit 3.2 to
Registration Statement No. 33-69968-01 on Form S-11 and
incorporated herein by reference.)
4.2 Amended and Restated Agreement of Limited Partnership of CNL
Income Fund XVI, Ltd. (Included as Exhibit 4.2 to Form 10-K
filed with the Securities and Exchange Commission on March
30, 1995, and incorporated herein by reference.)
10.1 Management Agreement between CNL Income Fund XVI, Ltd. and
CNL Investment Company (Included as Exhibit 10.1 to Form
10-K filed with the Securities and Exchange Commission on
March 30, 1995, 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 13, 2001, and incorporated herein by reference).
10.5 Assignment of Management Agreement from CNL APF Partners, LP
to CNL Restaurants XVIII, Inc. (Included as Exhibit 10.5 to
Form 10-Q filed with the Securities and Exchange Commission
on August 13, 2002, and incorporated herein by reference.)
99.1 Certification of Chief Executive Officer of Corporate
General Partner Pursuant to 18 U.S.C. Section 1350 as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002. (Filed herewith.)
99.2 Certification of Chief Financial Officer of Corporate
General Partner Pursuant to 18 U.S.C. Section 1350 as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002. (Filed herewith.)
EXHIBIT 99.1
EXHIBIT 99.2