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
0-22485
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CNL Income Fund XVII, Ltd.
- ----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 59-3295393
- ---------------------------------- ----------------------------
(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 _________
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 5-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-13
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 13
Item 4. Controls and Procedures 13
Part II
Other Information 14-16
CNL INCOME FUND XVII, LTD.
(A Florida Limited Partnership)
CONDENSED BALANCE SHEETS
September 30, December 31,
2002 2001
------------------ -------------------
ASSETS
Land and buildings on operating leases, net $ 15,005,042 $ 13,864,015
Net investment in direct financing leases 970,922 988,429
Real estate held for sale -- 3,218,833
Investment in joint ventures 5,798,834 3,658,974
Cash and cash equivalents 886,922 673,924
Restricted cash -- 297,288
Receivables, less allowance for doubtful accounts
of $286,567 in 2001 -- 2,709
Due from related parties 3,565 19,289
Accrued rental income 525,619 465,033
Other assets 12,732 5,854
------------------ -------------------
$ 23,203,636 $ 23,194,348
================== ===================
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and accrued expenses $ 4,208 $ 8,974
Real estate taxes payable 55,182 --
Distributions payable 600,000 600,000
Due to related parties 19,063 11,582
Rents paid in advance 6,814 8,350
Deferred rental income 50,868 53,478
------------------ -------------------
Total liabilities 736,135 682,384
Partners' capital 22,467,501 22,511,964
------------------ -------------------
$ 23,203,636 $ 23,194,348
================== ===================
See accompanying notes to condensed financial statements.
CNL INCOME FUND XVII, 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 $ 453,252 $ 423,756 $ 1,280,066 $ 1,248,145
Earned income from direct financing leases 24,278 24,848 73,273 74,940
Interest and other income 6,667 7,439 29,524 48,036
-------------- ------------- -------------- --------------
484,197 456,043 1,382,863 1,371,121
-------------- ------------- -------------- --------------
Expenses:
General operating and administrative 47,106 33,395 160,031 209,180
Property expenses 816 6,964 17,396 55,249
Management fees to related parties 5,948 5,718 18,253 15,814
State and other taxes -- -- 9,258 35,028
Depreciation and amortization 78,380 71,656 226,325 227,043
Provision for write-down of assets -- -- -- 39,575
-------------- ------------- -------------- --------------
132,250 117,733 431,263 581,889
-------------- ------------- -------------- --------------
Income Before Loss on Sale of Assets and Equity in
Earnings of Joint Ventures 351,947 338,310 951,600 789,232
Gain on Sale of Assets -- 345,572 -- 310,979
Equity in Earnings of Joint Ventures 172,098 (247,938 ) 412,782 (202,278 )
-------------- --------------
-------------- -------------
Income from Continuing Operations 524,045 435,944 1,364,382 897,933
-------------- ------------- -------------- --------------
Discontinued Operations (Note 6):
Income from discontinued operations, net -- 50,471 105,478 117,097
Gain (loss) on disposal of discontinued
operations, net -- (171,669 ) 285,677 (201,002 )
-------------- ------------- -------------- --------------
-- (121,198 ) 391,155 (83,905 )
-------------- ------------- -------------- --------------
Net Income $ 524,045 $ 314,746 $ 1,755,537 $ 814,028
============== ============= ============== ==============
Income (Loss) Per Limited Partner Unit
Continuing operations $ 0.17 $ 0.14 $ 0.46 $ 0.30
Discontinued operations -- (0.04 ) 0.13 (0.03 )
-------------- ------------- -------------- --------------
Total $ 0.17 $ 0.10 $ 0.59 $ 0.27
============== ============= ============== ==============
Weighted Average Number of Limited Partner
Units Outstanding 3,000,000 3,000,000 3,000,000 3,000,000
============== ============= ============== ==============
See accompanying notes to condensed financial statements.
CNL INCOME FUND XVII, 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 $ (4,460 ) $ (4,460 )
Net income -- --
--------------------- ------------------
(4,460 ) (4,460 )
--------------------- ------------------
Limited partners:
Beginning balance 22,516,424 23,947,228
Net income 1,755,537 969,196
Distributions ($0.60 and $0.80 per limited partner
unit, respectively) (1,800,000 ) (2,400,000 )
--------------------- ------------------
22,471,961 22,516,424
--------------------- ------------------
Total partners' capital $ 22,467,501 $ 22,511,964
===================== ==================
See accompanying notes to condensed financial statements.
CNL INCOME FUND XVII, 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 $ 1,716,847 $ 1,336,013
--------------- --------------
Cash Flows from Investing Activities:
Proceeds from sale of assets 3,499,595 3,272,711
Additions to land and buildings on operating leases (1,364,194 ) --
Investment in joint ventures (2,136,538 ) (2,066,625 )
(Increase) decrease in restricted cash 297,288 (1,508,693 )
--------------- --------------
Net cash provided by (used in) investing
activities 296,151 (302,607 )
--------------- --------------
Cash Flows from Financing Activities:
Distributions to limited partners (1,800,000 ) (1,800,000 )
--------------- --------------
Net cash used in financing activities (1,800,000 ) (1,800,000 )
--------------- --------------
Net Increase (decrease) in Cash and Cash Equivalents 212,998 (766,594 )
Cash and Cash Equivalents at Beginning of Period 673,924 1,597,502
--------------- --------------
Cash and Cash Equivalents at End of Period $ 886,922 $ 830,908
=============== ==============
Supplemental Schedule of Non-Cash Financing
Activities:
Distributions declared and unpaid at end of
period $ 600,000 $ 600,000
=============== ==============
See accompanying notes to condensed financial statements.
CNL INCOME FUND XVII, 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 XVII, Ltd. (the "Partnership") for the year ended December
31, 2001.
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 years' 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 June 2002, the Partnership reinvested the majority of the net sales
proceeds it received from the sale of the properties in Mesquite,
Nevada and Knoxville, Tennessee (see Note 6), in a Taco Cabana property
located in Houston, Texas, at an approximate cost of approximately
$1,364,200 from CNL Funding 2001-A, LP, an affiliate of the general
partners (see Note 6).
4. Investment in Joint Ventures:
In June 2002, the Partnership reinvested a portion of the net sales
proceeds from the sale of the property in Mesquite, Nevada, in a joint
venture arrangement, Katy Joint Venture, with CNL Income Fund IX, Ltd.,
a Florida limited partnership and an affiliate of the general partners.
The joint venture acquired a property in Katy, Texas from CNL Funding
2001-A, LP, an affiliate of the general partners (see Note 6). The
Partnership and CNL Income Fund IX, Ltd. entered into an agreement
whereby each co-venturer will share in the profits and losses of the
property in proportion to its applicable percentage interest. As of
September 30, 2002, the Partnership had contributed approximately
$416,700 for a 40% interest in this joint venture.
CNL INCOME FUND XVII, 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:
In August 2002, the Partnership reinvested the net sales proceeds from
the sale of the Property in Wilmette, Illinois in a Property in
Kenosha, Wisconsin as tenants-in-common with CNL Income Fund VIII, Ltd.
("CNL VIII"), a Florida limited partnership and an affiliate of the
general partners, at an approximate cost of $1,883,000. The Partnership
and CNL VIII 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 $1,694,700 for a 90% interest in
this property.
In August 2002, Mansfield Joint Venture, in which the Partnership owns
a 21% interest, sold the property in Mansfield, Texas to the tenant and
received net sales proceeds of approximately $1,011,500 resulting in a
gain of approximately $269,800. The joint venture used the proceeds
from the sale of the property and additional contributions from the
Partnership and CNL Income Fund VII, Ltd., who are the general partners
of the joint venture, of approximately $17,000 and $63,900,
respectively, to acquire a property in Arlington, Texas from CNL Net
Lease Investors, L.P., at an approximate cost of $1,089,900. CNL Income
Fund VII, Ltd. and CNL Net Lease Investors, L.P. are affiliates of the
general partners (see Note 6). The financial results for the property
in Mansfield, Texas are reflected as Discontinued Operations in the
condensed financial information presented below.
As of September 30, 2002, CNL Mansfield Joint Venture, CNL Kingston
Joint Venture, Ocean Shores Joint Venture, CNL VII & XVII Lincoln Joint
Venture, Katy Joint Venture, each owned and leased one property to an
operator of national fast-food or family-style restaurants. In
addition, the Partnership and affiliates, as six 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 joint
ventures and the properties held as tenants-in-common with affiliates
at:
September 30, December 31,
2002 2001
----------------- -----------------
Land and buildings on operating leases, net $ 12,092,655 $ 8,220,336
Real estate held for sale -- 745,619
Cash 73,177 107,183
Receivables, less allowance for doubtful accounts 3,102 3,371
Accrued rental income 213,517 165,314
Liabilities 36,316 54,184
Partners' capital 12,346,135 9,187,639
CNL INCOME FUND XVII, 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:
Quarter Ended Nine Months Ended September
September 30, 30,
2002 2001 2002 2001
-------------- -------------- -------------- --------------
Revenues $ 312,420 $ 204,471 $1,110,555 $ 462,147
Expenses (65,524 ) (53,704 ) (186,372 ) (234,499 )
Provision for write-down of
assets -- (1,053,283 ) -- (1,109,015 )
-------------- -------------- -------------- --------------
Income (loss) from
continuing operations 246,896 (902,516 ) 924,183 (881,367 )
-------------- -------------- -------------- --------------
Discontinued operations:
Income from discontinued
operations, net 17,176 17,939 55,954 53,510
Gain (loss) on disposal of
discontinued operations, net 269,791 -- 269,791 --
-------------- -------------- -------------- --------------
286,967 17,939 325,745 53,510
-------------- -------------- -------------- --------------
Net Income (Loss) $ 533,863 $ (884,577 ) $1,249,928 $ (827,857 )
============== ============== ============== ==============
The Partnership recognized income of $412,782 and a loss of $202,278
during the nine months ended September 30, 2002 and 2001, respectively,
from these joint ventures and tenancies in common of which, income of
$172,098 and a loss of $247,938 were earned during the quarters ended
September 30, 2002 and 2001, respectively.
5. Discontinued Operations:
In October 2001, Phoenix Restaurant Group, Inc. and its subsidiaries, a
tenant of the Partnership, filed for bankruptcy protection and rejected
the lease relating to the property in Mesquite, Nevada. In March 2002,
the Partnership sold the property to a third party and received net
sales proceeds of approximately $771,800. Since the Partnership had
recorded provisions for write-down of assets for this property,
including $201,002 for the nine months ended September 30, 2001, no
gain or loss was recognized in 2002 relating to the sale.
In May and June 2002, the Partnership sold its properties in Knoxville,
Tennessee and Wilmette, Illinois to unrelated third parties and
received total net sales proceeds of approximately $2,727,800 resulting
in a total gain of approximately $285,700.
CNL INCOME FUND XVII, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Nine Months Ended September 30, 2002 and 2001
5. Discontinued Operations - Continued:
The financial results for these properties are reflected as
Discontinued Operations in the accompanying financial statements. The
operating results of discontinued operations are as follows:
Quarter Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
------------- ------------- ------------- --------------
Rental revenues $ -- $ 71,181 $ 128,903 $ 215,874
Expenses -- (20,710 ) (23,425 ) (98,777 )
Gain (loss) on disposal of assets -- (171,669 ) 285,677 (201,002 )
------------- ------------- ------------- --------------
Income (loss) from discontinued
operations $ -- $ (121,198 ) $ 391,155 $ (83,905 )
============= ============= ============= ==============
6. Related Party Transactions:
During October 2001, Phoenix Restaurant Group, Inc. ("PRG") filed for
bankruptcy and rejected one of the two leases it had with the
Partnership. The other lease was held with an affiliate of the general
partners, as tenants-in-common. The Partnership owns a 27% interest in
the tenancy in common. In May 2002, the bankruptcy court assigned this
lease, relating to the property in Corpus Christi, Texas to RAI, LLC,
an affiliate of the general partners. All other lease terms remained
the same. In connection with this lease, the tenancy in common
recognized rental revenues of approximately $47,700 and $80,200 during
the quarter and nine months ended September 30, 2002, respectively. The
Partnership recognized its pro-rata share of these amounts in equity in
earnings of unconsolidated joint ventures in the accompanying financial
statements.
In June 2002, the Partnership acquired a property in Houston, Texas,
from CNL Funding 2001-A, LP, for a purchase price of approximately
$1,364,200 (see Note 3). In addition, in June 2002, Katy Joint Venture
acquired a property in Katy, Texas (see Note 4) from CNL Funding
2001-A, LP. 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, CNL Mansfield Joint Venture acquired a property in
Arlington, Texas from CNL Net Lease Investors, L.P. ("NLI"), at an
approximate cost of $1,089,900. During 2002, and prior to the joint
venture's acquisition of this property, 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 joint venture acquired the property in
Arlington, Texas 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.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
CNL Income Fund XVII, Ltd. (the "Partnership") is a Florida limited
partnership that was organized on February 10, 1995, 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, to be leased primarily to operators of national and regional
fast-food, family-style and casual dining restaurant chains (collectively, the
"Properties"). The leases generally are triple-net leases, with the lessee
responsible for all repairs and maintenance, property taxes, insurance and
utilities. As of September 30, 2001, the Partnership owned 17 Properties
directly and nine Properties indirectly, through joint venture or tenancy in
common arrangements. As of September 30, 2002, the Partnership owned 16
Properties directly and 11 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 $1,716,847 and $1,336,013 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 March 2002, the Partnership sold its Denny's Property in Mesquite,
Nevada, to a third party and received net sales proceeds of approximately
$771,800. Since the Partnership had recorded provisions for write-down of
assets, including $201,002 for the nine months ended September 30, 2001, for
this Property, no gain or loss was recognized in 2002 relating to the sale. The
provision represented the difference between the carrying value of the Property
and its fair value.
In May and June 2002, the Partnership sold its Properties in Knoxville,
Tennessee and Wilmette, Illinois to unrelated third parties and received total
net sales proceeds of approximately $2,727,800 resulting in a total gain of
approximately $285,700.
In June 2002, the Partnership reinvested the majority of the net sales
proceeds, it received from the sale of the Properties in Mesquite, Nevada and
Knoxville, Tennessee, in a Taco Cabana Property located in Houston, Texas, at an
approximate cost of approximately $1,364,200.
In addition in June 2002, the Partnership reinvested a portion of the
net sales proceeds from the sale of the Property in Mesquite, Nevada in a joint
venture arrangement, Katy Joint Venture, with CNL Income Fund IX, Ltd., a
Florida limited partnership and an affiliate of the general partners. The joint
venture acquired a Property in Katy, Texas. The Partnership and CNL Income Fund
IX, Ltd. entered into an agreement whereby each co-venturer will share in the
profits and losses of the Property in proportion to its applicable percentage
interest. As of September 30, 2002, the Partnership had contributed
approximately $416,700 for a 40% interest in this joint venture.
The Partnership and Katy Joint Venture acquired the Properties 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 prices paid by the
Partnership and the Joint Venture represented the costs incurred by CNL Funding
2001-A, LP to acquire and carry the Properties. The general partners believe
that the transactions, or a portion thereof, relating to the sales of the
Properties and the reinvestment of the proceeds will qualify as like-kind
exchange transactions for federal income tax purposes. The Partnership
anticipates that 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 transactions.
In August 2002, the Partnership reinvested the net sales proceeds from
the sale of the Property in Wilmette, Illinois in a Property in Kenosha,
Wisconsin as tenants-in-common with CNL Income Fund VIII, Ltd. ("CNL VIII"), 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 VIII entered into an agreement whereby each co-tenant will share in the
profits and losses of the Property in proportion to its applicable percentage
interest in the Property. The general partners believe that the transactions, or
portion thereof, relating to the sale of the Property and the reinvestment of
the net sales proceeds, or a portion thereof, will qualify as a like-kind
exchange transaction for federal income tax purposes. The Partnership
anticipates that 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 transactions. As of
September 30, 2002, the Partnership contributed approximately $1,694,700 for a
90% interest in this Property.
In August 2002, Mansfield Joint Venture, in which the Partnership owns
a 21% interest, sold its Property in Mansfield, Texas to the tenant for a sales
price of $1,045,000 and received net sales proceeds of approximately $1,011,500
resulting in a gain of approximately $296,800. The joint venture used the
proceeds from the sale of the Property and additional contributions from the
Partnership and CNL Income Fund VII, Ltd., who are the general partners of the
joint venture, of approximately $17,000 and $63,900, respectively, to acquire a
Property in Arlington, Texas from CNL Net Lease Investors, L.P. ("NLI"), at an
approximate cost of $1,089,900. During 2002, and prior to the joint venture's
acquisition of this Property, CNL Financial LP Holding, LP ("CFN"), a Delaware
Limited Partnership, and CNL Net Lease Investors GP Corp. ("GP Corp"), a
Delaware corporation, 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 joint venture acquired the Property in Arlington, Texas 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 general partners believe that the transactions, or portion thereof, relating
to the sale of the property and the reinvestment of the net sales proceeds, or a
portion thereof, will qualify as a like-kind exchange transaction for federal
income tax purposes. The Partnership anticipates that 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 transactions.
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
$886,922 invested in such short-term investments, as compared to $673,924 at
December 31, 2001. The increase in cash and cash equivalents at September 30,
2002 was due to the fact that approximately $297,300 in restricted cash
remaining from the net sales proceeds relating to the sale of its Property in El
Dorado, California were released from restricted cash to cash and cash
equivalents. 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 $736,135 at September 30, 2002, from $682,384 at December 31, 2001,
primarily as a result of an increase in real estate taxes payable at September
30, 2002, as compared to 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 operating expenses of the Partnership, to the extent that
the general partners determine that such funds are available for distribution.
Based on current and anticipated future cash from operations, and for the
quarter ended September 30, 2001, a portion of the net sales proceeds from the
September 2001 sale of the Property in Inglewood, California, the Partnership
declared distributions to limited partners of $1,800,000 for each of the nine
month periods ended September 30, 2002 and 2001 ($600,000 for each of the
quarters ended June 30, 2002 and 2001). This represents distributions for each
applicable nine months of $0.60 per unit ($0.20 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 $1,353,339 for the nine months ended
September 30, 2002, as compared to $1,323,085 for the nine months ended
September 30, 2001, of which $477,530 and $448,604 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
period in 2001, was due to the fact the Partnership reinvested the majority of
the net sales proceeds from the 2001 and 2002 sale of two Properties, in
Properties in Austin and Houston, Texas. The increase in rental revenues 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 the Partnership sold the
Property in El Dorado, California in 2001.
During the nine months ended September 30, 2002 and 2001, the
Partnership earned $29,524 and $48,036 respectively, in interest and other
income, of which $6,667 and $7,439 were earned during the quarters ended
September 30, 2002 and 2001, respectively. During the nine months ended June 30,
2001, interest and other income were higher as compared to the same period in
2002 due to the Partnership recognizing as income the remainder of the security
deposit from a former tenant of a Property in Houston, Texas, in accordance with
the lease agreement. The tenant had rejected the lease, and the Partnership sold
the Property in January 2001. 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 $412,782 and a loss of $202,278, respectively,
attributable to earnings from joint ventures, of which income of $172,098 and a
loss of $247,938 were reported during the quarters ended September 30, 2002 and
2001, respectively. Net operating results reported by joint ventures were lower
during the nine months ended September 30, 2001, as compared to the same period
in 2002, due to the fact that PRG, the tenant of Corpus Christi, Texas,
experienced financial difficulties and ceased paying rent in 2001. As a result,
the Partnership and an affiliate of the general partners, as tenants-in-common,
in which the Partnership owns an approximate 27% interest, stopped recording
rental revenues in accordance with the Partnership's revenue recognition policy.
Net operating results reported by joint ventures were also lower during the
quarter and nine months ended September 30, 2001, as compared to the same
periods in 2002, due to the fact that the Partnership incurred Property related
expenses such as, legal fees, insurance and real estate taxes relating to this
Property. In October 2001, PRG filed for Chapter 11 bankruptcy protection, as
described above. Since the bankruptcy filing, the tenant resumed paying rent.
The Partnership and the affiliate, as tenants-in-common, received from PRG the
rent payments relating to this Property from the bankruptcy date through April
2002. During April 2002, the bankruptcy court assigned its lease to a new
tenant, an affiliate of the general partners. All other lease terms remained
unchanged and are substantially the same as the Partnership's other leases. As a
result of the assignment relating to this Property, the Partnership collected
from the new tenant $309,700 in rents not collected in 2001 from the previous
tenant. The Partnership and the affiliate, as tenants-in-common of this
Property, recorded during the nine months ended September 30, 2001 a provision
for write-down of assets of approximately $327,300 relating to this Property.
The provision represented the difference between the carrying value of the
Property and its fair value.
In addition, the operating results reported by joint ventures were
lower during the nine months ended September 30, 2001, as compared to the same
period in 2002, because Ocean Shores Joint Venture, in which the Partnership
owns an approximate 31% interest, recorded a provision for write down of assets
of approximately $781,700 in 2001. The provision represented the difference
between the carrying value of the Property and its estimated fair value. The
tenant of the Property owned by this joint venture experienced financial
difficulties and vacated the Property in April 2001. During 2002, the joint
venture has not recorded rental revenues relating to this Property. The joint
venture will continue to pursue collection of these past due rents and is
seeking a new tenant for the Property.
The increase in net 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 the result of the Partnership investing during 2001
and 2002 in two joint ventures and two additional Properties, each as a separate
tenancy in common with affiliates of the General Partners.
In August 2002, Mansfield Joint Venture, in which the Partnership owns
a 21% interest, sold the Property in Mansfield, Texas, as described below.
Operating expenses, including depreciation and amortization expense and
provision for write-down of assets, were $431,263 and $581,889, for the nine
months ended September 30, 2002 and 2001, respectively, of which $132,250 and
$117,733 were incurred during the quarters ended September 30, 2002 and 2001,
respectively. The decrease in operating expenses during the nine months ended
September 30, 2002, as compared to the same period in 2001, was partially
attributable to a decrease in the costs incurred for administrative expenses for
servicing the Partnership and its Properties, a decrease in state taxes and a
decrease in Property expenses such as legal fees relating to several Properties
whose tenants experienced financial difficulties in 2001.
Operating expenses were also higher in 2001, as compared to the nine
months ended September 30, 2002, since the Partnership recorded a provision for
write-down of assets in the amount of $39,575 relating to its Property in
Inglewood, California. The provision represented the difference between the
carrying value of the Property and its fair value. In September 2001, the
Partnership sold this Property to a third party. Due to the fact that the
Partnership had previously recorded a provision for write-down for this
Property, no additional gain or loss was recognized during 2001 relating to the
sale of the Property
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.
During the nine months ended September 30, 2001, the Partnership sold a
Property in Houston, Texas resulting in a gain of $4,284, a Property in El
Dorado, California resulting in a gain of $345,572 and a Property in Kentwood,
Michigan resulting in a loss of $38,877.
During the nine months ended September 30, 2002, the Partnership
identified and sold three Properties that met the criteria of this standard. The
financial results of these Properties were classified as Discontinued Operations
in the accompanying financial statements. The majority of the net sales proceeds
from the sales of these Properties were reinvested in three Properties, one
owned directly by the Partnership and the other two owned indirectly through a
tenancy in common and a joint venture, as described above in "Capital
Resources."
During the nine months ended September 30, 2002, CNL Mansfield Joint
Venture, in which the Partnership owns a 21% interest, identified and sold a
Property that met the criteria of this standard. The financial results of this
Property were classified as Discontinued Operations in the condensed financial
information for the unconsolidated joint ventures and the properties held as
tenants-in-common with affiliates presented in the footnotes to the accompanying
financial statements. The joint venture reinvested the net sales proceeds from
the sale of this Property in an additional income producing Property, as
discussed above in "Capital Resources."
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 XVII, Ltd. (Filed as Exhibit 3.1 to
the Registrant's Registration Statement on Form S-11,
No. 33-90998, incorporated herein by reference.)
**3.2 Amended and Restated Agreement of Limited Partnership
of CNL Income Fund XVII, Ltd. (Included as Exhibit
4.2 to Form 10-K filed with the Securities and
Exchange Commission on March 21, 1996, and
incorporated herein by reference.)
**4.1 Affidavit and Certificate of Limited Partnership of
CNL Income Fund XVII, Ltd. (Filed as Exhibit 3.1 to
Registration Statement No. 33-90998 on Form S-11 and
incorporated herein by reference.)
**4.2 Amended and Restated Agreement of Limited Partnership
of CNL Income Fund XVII, Ltd. (Included as Exhibit
4.2 to Form 10-K filed with the Securities and
Exchange Commission on March 21, 1996, and
incorporated herein by reference.)
**4.3 Form of Agreement between CNL Income Fund XVII, Ltd.
and MMS Escrow and Transfer Agency, Inc. and between
CNL Income Fund XVIII, Ltd. and MMS Escrow and
Transfer Agency, Inc. relating to the Distribution
Reinvestment Plans (Filed as Exhibit 4.4 to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)
**8.3 Opinion of Baker & Hostetler regarding certain
material issues relating to the Distribution
Reinvestment Plan of CNL Income Fund XVII, Ltd.
(Filed as Exhibit 8.3 to Amendment No. Three to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)
**10.1 Management Agreement between CNL Income Fund XVII,
Ltd. and CNL Fund Advisors, Inc. (Included as Exhibit
10.1 to Form 10-K filed with the Securities and
Exchange Commission on March 21, 1996, and
incorporated herein by reference.)
**10.2 Assignment of Management Agreement from CNL Fund
Advisors, Inc. to CNL APF Partners, LP. (Included as
Exhibit 10.2 to Form 10-Q filed with the Securities
and Exchange Commission on August 13, 2001, and
incorporated herein by reference.)
**10.3 Form of Joint Venture Agreement for Joint Ventures
with Unaffiliated Entities (Filed as Exhibit 10.2 to
the Registrant's Registration Statement on Form S-11,
No. 33-90998, incorporated herein by reference.)
**10.4 Form of Joint Venture Agreement for Joint Ventures
with Affiliated Programs (Filed as Exhibit 10.3 to
the Registrant's Registration Statement on Form S-11,
No. 33-90998, incorporated herein by reference.)
**10.5 Form of Development Agreement (Filed as Exhibit 10.5
to the Registrant's Registration Statement on Form
S-11, No. 33-90998, incorporated herein by
reference.)
**10.6 Form of Indemnification and Put Agreement (Filed as
Exhibit 10.6 to the Registrant's Registration
Statement on Form S-11, No. 33-90998, incorporated
herein by reference.)
**10.7 Form of Unconditional Guarantee of Payment and
Performance (Filed as Exhibit 10.7 to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)
**10.8 Form of Lease Agreement for Existing Restaurant
(Filed as Exhibit 10.8 to the Registrant's
Registration Statement on Form S-11, No. 33-90998,
incorporated herein by reference.)
**10.9 Form of Lease Agreement for Restaurant to be
Constructed (Filed as Exhibit 10.9 to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)
**10.10 Form of Premises Lease for Golden Corral Restaurant
(Filed as Exhibit 10.10 to the Registrant's
Registration Statement on Form S-11, No. 33-90998,
incorporated herein by reference.)
**10.11 Form of Agreement between CNL Income Fund XVII, Ltd.
and MMS Escrow and Transfer Agency, Inc. and between
CNL Income Fund XVIII, Ltd. and MMS Escrow and
Transfer Agency, Inc. relating to the Distribution
Reinvestment Plans (Filed as Exhibit 4.4 to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)
**10.12 Form of Cotenancy Agreement with Unaffiliated Entity
(Filed as Exhibit 10.12 to Amendment No. One to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)
**10.13 Form of Cotenancy Agreement with Affiliated Entity
(Filed as Exhibit 10.13 to Amendment No. One to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)
**10.14 Form of Registered Investor Advisor Agreement (Filed
as Exhibit 10.14 to Amendment No. One to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)
**10.15 Assignment of Management Agreement from CNL APF
Partners, LP to CNL Restaurants XVIII, Inc. (Included
as Exhibit 10.15 to Form 10-Q filed with the
Securities and Exchange Commission on August 14,
2002, and incorporated herein be 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 11th day of November, 2002.
CNL INCOME FUND XVII, 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 XVII, 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 11, 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 XVII, 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 11, 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 XVII, Ltd. (Filed as Exhibit 3.1 to
the Registrant's Registration Statement on Form S-11,
No. 33-90998, incorporated herein by reference.)
**3.2 Amended and Restated Agreement of Limited Partnership
of CNL Income Fund XVII, Ltd. (Included as Exhibit
4.2 to Form 10-K filed with the Securities and
Exchange Commission on March 21, 1996, and
incorporated herein by reference.)
**4.1 Affidavit and Certificate of Limited Partnership of
CNL Income Fund XVII, Ltd. (Filed as Exhibit 3.1 to
Registration Statement No. 33-90998 on Form S-11 and
incorporated herein by reference.)
**4.2 Amended and Restated Agreement of Limited Partnership
of CNL Income Fund XVII, Ltd. (Included as Exhibit
4.2 to Form 10-K filed with the Securities and
Exchange Commission on March 21, 1996, and
incorporated herein by reference.)
**4.3 Form of Agreement between CNL Income Fund XVII, Ltd.
and MMS Escrow and Transfer Agency, Inc. and between
CNL Income Fund XVIII, Ltd. and MMS Escrow and
Transfer Agency, Inc. relating to the Distribution
Reinvestment Plans (Filed as Exhibit 4.4 to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)
**8.3 Opinion of Baker & Hostetler regarding certain
material issues relating to the Distribution
Reinvestment Plan of CNL Income Fund XVII, Ltd.
(Filed as Exhibit 8.3 to Amendment No. Three to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)
**10.1 Management Agreement between CNL Income Fund XVII,
Ltd. and CNL Fund Advisors, Inc. (Included as Exhibit
10.1 to Form 10-K filed with the Securities and
Exchange Commission on March 21, 1996, and
incorporated herein by reference.)
**10.2 Assignment of Management Agreement from CNL Fund
Advisors, Inc. to CNL APF Partners, LP. (Included as
Exhibit 10.2 to Form 10-Q filed with the Securities
and Exchange Commission on August 13, 2001, and
incorporated herein by reference.)
**10.3 Form of Joint Venture Agreement for Joint Ventures
with Unaffiliated Entities (Filed as Exhibit 10.2 to
the Registrant's Registration Statement on Form S-11,
No. 33-90998, incorporated herein by reference.)
**10.4 Form of Joint Venture Agreement for Joint Ventures
with Affiliated Programs (Filed as Exhibit 10.3 to
the Registrant's Registration Statement on Form S-11,
No. 33-90998, incorporated herein by reference.)
**10.5 Form of Development Agreement (Filed as Exhibit 10.5
to the Registrant's Registration Statement on Form
S-11, No. 33-90998, incorporated herein by
reference.)
**10.6 Form of Indemnification and Put Agreement (Filed as
Exhibit 10.6 to the Registrant's Registration
Statement on Form S-11, No. 33-90998, incorporated
herein by reference.)
**10.7 Form of Unconditional Guarantee of Payment and
Performance (Filed as Exhibit 10.7 to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)
**10.8 Form of Lease Agreement for Existing Restaurant
(Filed as Exhibit 10.8 to the Registrant's
Registration Statement on Form S-11, No. 33-90998,
incorporated herein by reference.)
**10.9 Form of Lease Agreement for Restaurant to be
Constructed (Filed as Exhibit 10.9 to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)
**10.10 Form of Premises Lease for Golden Corral Restaurant
(Filed as Exhibit 10.10 to the Registrant's
Registration Statement on Form S-11, No. 33-90998,
incorporated herein by reference.)
**10.11 Form of Agreement between CNL Income Fund XVII, Ltd.
and MMS Escrow and Transfer Agency, Inc. and between
CNL Income Fund XVIII, Ltd. and MMS Escrow and
Transfer Agency, Inc. relating to the Distribution
Reinvestment Plans (Filed as Exhibit 4.4 to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)
**10.12 Form of Cotenancy Agreement with Unaffiliated Entity
(Filed as Exhibit 10.12 to Amendment No. One to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)
**10.13 Form of Cotenancy Agreement with Affiliated Entity
(Filed as Exhibit 10.13 to Amendment No. One to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)
**10.14 Form of Registered Investor Advisor Agreement (Filed
as Exhibit 10.14 to Amendment No. One to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)
**10.15 Assignment of Management Agreement from CNL APF
Partners, LP to CNL Restaurants XVIII, Inc. (Included
as Exhibit 10.15 to Form 10-Q filed with the
Securities and Exchange Commission on August 14,
2002, and incorporated herein be 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