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 June 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
0-24095
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CNL Income Fund XVIII, Ltd.
- -----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 59-3295394
- --------------------------------- -----------------------------
(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 9-12
Item 3. Quantitative and Qualitative Disclosures about
Market Risk 13
Part II
Other Information 14-16
CNL INCOME FUND XVIII, LTD.
(A Florida Limited Partnership)
CONDENSED BALANCE SHEETS
June 30, December 31,
2002 2001
---------------- -----------------
ASSETS
Land and buildings on operating leases, net $ 15,736,575 $ 14,296,062
Net investment in direct financing leases 3,131,067 3,145,098
Real estate held for sale 3,992,006 4,800,548
Investment in joint ventures 3,204,836 3,011,159
Cash and cash equivalents 145,365 226,136
Restricted cash -- 1,662,201
Receivables, less allowance for doubtful accounts of
$105,409 and $75,201, respectively 1,968 19,767
Accrued rental income 385,962 333,995
Other assets 15,393 16,729
---------------- -----------------
$ 26,613,172 $ 27,511,695
================ =================
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 86,795 $ 92,368
Real estate taxes payable 11,528 12,817
Distributions payable 700,000 700,000
Due to related parties 13,867 20,273
Rents paid in advance 5,325 11,441
Deferred rental income 4,820 4,979
---------------- -----------------
Total liabilities 822,335 841,878
Commitments and Contingencies (Notes 8 and 9)
Partners' capital 25,790,837 26,669,817
---------------- -----------------
$ 26,613,172 $ 27,511,695
================ =================
See accompanying notes to condensed financial statements.
CNL INCOME FUND XVIII, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF INCOME
Quarter Ended Six Months Ended
June 30 June 30,
2002 2001 2002 2001
-------------- --------------- --------------- --------------
Revenues:
Rental income from operating leases $ 408,155 $ 429,783 $ 822,130 $ 851,920
Earned income from direct financing leases 58,748 99,893 138,838 200,048
Interest and other income 706 4,087 2,450 12,632
-------------- --------------- --------------- --------------
467,609 533,763 963,418 1,064,600
-------------- --------------- --------------- --------------
Expenses:
General operating and administrative 45,232 81,544 112,462 206,712
Property expenses 42,142 81,334 108,949 263,625
Management fees to related party 6,898 5,830 13,245 12,312
State and other taxes 612 792 8,727 23,984
Depreciation and amortization 77,327 66,634 155,705 150,310
Provision for write-down of assets -- 209,130 -- 209,130
-------------- --------------- --------------- --------------
172,211 445,264 399,088 866,073
-------------- --------------- --------------- --------------
Income Before Loss on Sale of Assets and Equity in
Earnings of Joint Ventures 295,398 88,499 564,330 198,527
Loss on Sale of Assets (25,694 ) (18,855 ) (25,694 ) (18,855 )
Equity in Earnings of Joint Ventures 78,055 28,542 155,821 57,581
-------------- --------------- --------------- --------------
Income from Continuing Operations 347,759 98,186 694,457 237,253
-------------- --------------- --------------- --------------
Discontinued Operations (Note 7):
Income from discontinued operations, net 70,276 67,728 149,035 132,533
Loss on disposal of discontinued operations (322,472 ) (387,138 ) (322,472 ) (387,138 )
-------------- --------------- --------------- --------------
(252,196 ) (319,410 ) (173,437 ) (254,605 )
-------------- --------------- --------------- --------------
Net Income (Loss) $ 95,563 $ (221,224 ) $ 521,020 $ (17,352 )
============== =============== =============== ==============
Net Income (Loss) Per Limited Partner Unit
Continuing operations $ 0.10 $ 0.03 $ 0.20 $ 0.07
Discontinued operations (0.07 ) (0.09 ) (0.05 ) (0.07 )
-------------- --------------- --------------- --------------
Total $ 0.03 $ (0.06 ) $ 0.15 $ 0.00
============== =============== =============== ==============
Weighted Average Number of Limited Partner
Units Outstanding 3,500,000 3,500,000 3,500,000 3,500,000
============== =============== =============== ==============
See accompany notes to condensed financial statements.
CNL INCOME FUND XVIII, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF PARTNERS' CAPITAL
Six Months Ended Year Ended
June 30, December 31,
2002 2001
-------------------- -------------------
General partners:
Beginning balance $ (5,319 ) $ (5,319 )
Net income -- --
-------------------- -------------------
(5,319 ) (5,319 )
-------------------- -------------------
Limited partners:
Beginning balance 26,675,136 28,306,371
Net income 521,020 1,168,765
Distributions ($0.40 and $0.80 per
limited partner unit, respectively) (1,400,000 ) (2,800,000 )
-------------------- -------------------
25,796,156 26,675,136
-------------------- -------------------
Total partners' capital $ 25,790,837 $ 26,669,817
==================== ===================
See accompanying notes to condensed financial statements.
CNL INCOME FUND XVIII, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF CASH FLOWS
Six Months Ended
June 30,
2002 2001
--------------- --------------
Increase (Decrease) in Cash and Cash Equivalents
Net Cash Provided by Operating Activities $ 1,009,994 $ 830,035
--------------- --------------
Cash Flows from Investing Activities:
Proceeds from sale of assets 951,629 1,348,569
Addition to land and buildings on operating leases (2,090,604 ) --
Investment in joint venture (205,675 ) --
Decrease in restricted cash 1,663,401 --
Other (9,516 ) --
--------------- --------------
Net cash provided by investing activities 309,235 1,348,569
--------------- --------------
Cash Flows from Financing Activities:
Loan from corporate general partner 375,000 --
Repayment of loan from corporate general partner (375,000 ) --
Distributions to limited partners (1,400,000 ) (1,400,000 )
--------------- --------------
Net cash used in financing activities (1,400,000 ) (1,400,000 )
--------------- --------------
Net Increase (Decrease) in Cash and Cash Equivalents (80,771 ) 778,604
Cash and Cash Equivalents at Beginning of Period 226,136 479,603
--------------- --------------
Cash and Cash Equivalents at End of Period $ 145,365 $ 1,258,207
=============== ==============
Supplemental Schedule of Non-Cash Financing Activities:
Distributions declared and unpaid at end of period $ 700,000 $ 700,000
=============== ==============
See accompanying notes to condensed financial statements.
CNL INCOME FUND XVIII, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Six Months Ended June 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 six months ended June 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 XVIII, 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 year's financial statements have been
reclassified to conform to 2002 presentation. These reclassifications
had no effect on total partners' capital or net income.
3. Land and Buildings on Operating Leases:
In January 2002, the Partnership reinvested a portion of the net sales
proceeds from the 2001 sale of the property in Santa Rosa, California,
in a property in Houston, Texas at an approximate cost of $1,194,100.
The Partnership acquired this property from CNL Funding 2001-A, LP, an
affiliate of the general partners (see Note 6).
In May 2002, the Partnership sold its On the Border property in San
Antonio, Texas to an unrelated third party for $500,000 and received
net sales proceeds of approximately $470,300, resulting in a loss of
approximately $25,700. As of December 31, 2001, the Partnership had
identified this property for sale. In June 2002, the Partnership
reinvested the net sales proceeds from this sale, along with the
proceeds from the sale of the Boston Market property in San Antonio,
Texas (see Note 7), in a Taco Cabana property in San Antonio, Texas, at
an approximate cost of $896,500. The Partnership acquired this property
from CNL Funding 2001-A, LP, an affiliate of the general partners (see
Note 6).
CNL INCOME FUND XVIII, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Six Months Ended June 30, 2002 and 2001
4. Investment in Joint Ventures:
In January 2002, the Partnership reinvested a portion of the net sales
proceeds from the 2001 sale of the property in Santa Rosa, California,
in a property in Austin, Texas, as tenants-in-common, with CNL Income
Fund X, Ltd., an affiliate of the general partners. The Partnership
acquired this property from CNL Funding 2001-A, LP, an affiliate of the
general partners (see Note 6). The Partnership and CNL Income Fund X,
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 June 30, 2002, the Partnership had
contributed approximately $205,700 for an 18.35% interest in this
property.
As of June 30, 2002, Columbus Joint Venture, CNL Portsmouth Joint
Venture, and TFIG Pittsburgh Joint Venture each owned and leased one
property to operators of fast-food or family-style restaurants. In
addition, as of June 30, 2002, the Partnership and affiliates, in two
separate tenancy-in-common arrangements, each owned and leased one
property to operators of fast-food or family-style restaurants. The
following presents the combined, condensed financial information for
these joint ventures and tenants-in-common at:
June 30, December 31,
2002 2001
-------------- ---------------
Land and buildings on operating leases, net $ 6,796,628 $ 5,731,159
Net investment in direct financing lease 311,170 313,339
Cash 15,963 22,034
Accrued rental income 178,528 125,874
Receivables 20,342 8,368
Other assets - 1,116
Liabilities 12,012 12,335
Partners' Capital 7,310,619 6,189,555
Quarter Ended June 30, Six Months Ended June 30,
2002 2001 2002 2001
------------ ------------- -------------- ---------------
Revenues $ 212,058 $ 113,886 $ 423,311 $ 227,977
Expenses (34,952 ) (18,314 ) (70,246 ) (35,917 )
------------ ------------- -------------- ---------------
Net Income $ 177,106 $ 95,572 $ 353,065 $ 192,060
============ ============= ============== ===============
The Partnership recognized income of $155,821 and $57,581 during the
six months ended June 30,2002 and 2001, respectively, $78,055 and
$28,542 of which was earned during the quarters ended June 30, 2002 and
2001, respectively, from these joint ventures and tenants-in-common.
5. Restricted Cash:
As of December 31, 2001, the net sales proceeds of $1,664,829 from the
2001 sale of the property in Santa Rosa, California, less miscellaneous
escrow fees of $2,628 were being held in an interest-bearing escrow
account pending the release of funds by the escrow agent to acquire an
additional property. These funds were released by the escrow agent in
January 2002 and were used to acquire a property in Houston, Texas and
an interest in a property in Austin, Texas (see Note 3 and Note 4).
CNL INCOME FUND XVIII, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Six Months Ended June 30, 2002 and 2001
6. Related Party Transactions:
During 2002, the Partnership acquired a property in Houston, Texas, and
one in San Antonio, Texas from CNL Funding 2001-A, LP, for a total
purchase price of approximately $2,090,600 (see Note 3). In addition,
in January 2002, the Partnership and CNL Income Fund X, Ltd, as
tenants-in-common, acquired a property in Austin, Texas, from CNL
Funding 2001-A, LP, for a purchase price of approximately $1,120,800
(see Note 4). CNL Funding 2001-A, LP is an affiliate of the general
partners. CNL Funding 2001-A, LP had purchased and temporarily held
title to the properties in order to facilitate the acquisition of the
properties by the Partnership. The purchase price paid by the
Partnership represented the costs incurred by CNL Funding 2001-A, LP to
acquire the properties, including closing costs.
7. Discontinued Operations:
During 2002, the Partnership entered into three separate agreements,
each with an unrelated third party, to sell the Jack in the Box
property in Echo Park, California, the Boston Market property in
Raleigh, North Carolina and the Bennigan's property in Sunrise,
Florida. As a result, the Partnership reclassified these assets from
land and building on operating leases and accrued rental income to real
estate held for sale. The reclassified assets were recorded at the
lower of their carrying amount or fair value, less cost to sell. In
addition, the Partnership stopped recording depreciation and accrued
rental income once the properties were placed up for sale. On August 5,
2002, the Partnership sold the property in Raleigh, North Carolina (see
Note 10). In connection with the anticipated sale of this property, the
Partnership recorded a loss on disposal of assets of $322,472 during
the quarter and six months ended June 30, 2002. The financial results
for these properties are reflected as Discontinued Operations in the
accompanying financial statements.
In May 2002, the Partnership sold its Boston Market property in San
Antonio, Texas to an unrelated third party for approximately $515,000
and received net sales proceeds of approximately $481,325. Due to the
fact that the Partnership had recorded provisions for write-down of
assets in previous years, no gain or loss on disposal of discontinued
operations was recorded during the quarter and six months ended June
30, 2002 relating to this sale. In June 2002, the Partnership
reinvested these sale proceeds in an income producing property in San
Antonio, Texas (see Note 3).
The operating results of the discontinued operations for the above
properties are as follows:
Quarter Ended June 30, Six Months Ended June 30,
2002 2001 2002 2001
------------- -------------- ------------- --------------
Rental revenues $ 91,049 $ 94,773 $ 184,594 $ 189,545
Expenses (20,773 ) (27,045 ) (35,559 ) (57,012 )
Loss on disposal of assets (322,472 ) (387,138 ) (322,472 ) (387,138 )
------------- -------------- ------------- --------------
Loss from discontinued operations $ (252,196 ) $ (319,410 ) $ (173,437 ) $ (254,605 )
============= ============== ============= ==============
8. Litigation Matters:
In July 1998, DJD Partners VII, LLC filed a lawsuit against Finest
Foodservice, LLC and the Partnership, alleging a breach of contract
that was originally entered into by Finest Foodservice, LLC and later
assigned to the Partnership, in connection with the construction of a
Boston Market property in Minnetonka, Minnesota. In October 1998,
Finest Foodservice, LLC, the former tenant of the site in Minnetonka,
Minnesota, filed for bankruptcy and rejected its lease, causing the
obligations of the contract to become the responsibility of the
Partnership. In May 2001, the District Court awarded a judgment of
approximately $85,400 to DJD Partners VII, LLC against the Partnership,
as a result of the breach of contract by Finest
CNL INCOME FUND XVIII, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Six Months Ended June 30, 2002 and 2001
8. Litigation Matters - Continued:
Foodservice, LLC. The Partnership accrued this amount as a general and
administrative expense as of December 31, 2001. A motion for
reconsideration and a new trial was filed and denied. The Partnership
appealed the District Court's judgment but lost.
9. Commitments:
During 2002, the Partnership entered into three separate agreements,
each with an unrelated third party, to sell the Jack in the Box
property in Echo Park, California, the Boston Market property in
Raleigh, North Carolina and the Bennigan's property in Sunrise,
Florida. (see Notes 7 and 10).
10. Subsequent Events:
In July 2002, the Partnership entered into a promissory note with the
corporate general partner for a loan in the amount of $500,000 in
connection with the operations of the Partnership. The loan is
uncollateralized, non-interest bearing and due on demand.
On August 5, 2002, the Partnership sold its property in Raleigh, North
Carolina for $650,000 and received net sales proceeds of approximately
$614,100, resulting in a loss on disposal of assets of $322,472, which
the Partnership recorded at June 30, 2002.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
CNL Income Fund XVIII, 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 restaurants, as well as land upon which restaurants were to be
constructed (collectively, the "Properties"), which are leased primarily to
operators of selected national and regional fast-food, family-style and casual
dining restaurant chains. The leases generally are triple-net leases, with the
lessees responsible for all repairs and maintenance, property taxes, insurance
and utilities. As of June 30, 2001, the Partnership owned 21 Properties directly
and three Properties indirectly through joint venture or tenancy in common
arrangements. In addition, as of June 30, 2002, the Partnership owned 17
Properties directly and five Properties indirectly through joint venture or
tenancy in common arrangements.
Capital Resources
The Partnership generated 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) of $1,009,994
and $830,035 for the six months ended June 30, 2002 and 2001, respectively. The
increase in cash from operating activities for the six months ended June 30,
2002, as compared to the six months ended June 30, 2001, was primarily a result
of changes in the Partnership's working capital and changes in income and
expenses, as described below in "Results of Operations."
Other sources and uses of capital included the following during the six
months ended June 30, 2002.
In January 2002, the Partnership reinvested a portion of the net sales
proceeds from the 2001 sale of the Property in Santa Rosa, California in a
Property in Houston, Texas, at an approximate cost of $1,194,100. In addition,
in January 2002, the Partnership reinvested the remaining net sales proceeds
from the 2001 sale of the Property in Santa Rosa, California in a Property in
Austin, Texas, as tenants-in-common with CNL Income Fund, X, Ltd., a Florida
limited partnership and an affiliate of the general partners. The Partnership
acquired these 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. The purchase prices paid
by the Partnership represented the costs incurred by CNL Funding 2001-A, LP to
acquire the Properties, including closing costs. The general partners believe
that this transaction, or a portion thereof, relating to the 2001 sale of the
Property in Santa Rosa, California and the reinvestment of the net sales
proceeds, described above, will qualify as a like-kind transaction for federal
income tax purposes. The Partnership anticipates its distributions will be
sufficient to enable the limited partners to pay federal and state income taxes,
if any (at a level reasonably assumed by the general partners), resulting from
the transaction.
In May 2002, the Partnership sold its On the Border Property in San
Antonio, Texas to an unrelated third party for approximately $500,000 and
received net sales proceeds of approximately $470,300, resulting in a net loss
of approximately $25,700. As of December 31, 2001, the Partnership had
identified this Property for sale. In addition, in May 2002, the Partnership
sold its Boston Market Property in San Antonio, Texas to an unrelated third
party for approximately $515,000 and received net sales proceeds of
approximately $481,325. Due to the fact that the Partnership had recorded
provisions for write-down of assets in previous years, no gain or loss on
disposal of discontinued operations was recorded during the quarter and six
months ended June 30, 2002 relating to this sale. In June 2002, the Partnership
reinvested the net sales proceeds from these two sales in a Taco Cabana Property
in Houston, Texas at an approximate cost of $896,500. The Partnership acquired
this property 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 Property in order to facilitate the acquisition of
the Property by the Partnership. The purchase price paid by the Partnership
represented the costs incurred by CNL Funding 2001-A, LP to acquire the
Property, including closing costs. 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 transaction.
During the six months ended June 30, 2002, the Partnership entered into
two promissory notes with the corporate general partner for loans in connection
with the operations of the Partnership. The loans were uncollateralized,
non-interest bearing and due on demand. As of June 30, 2002, the Partnership had
repaid these loans in full to the corporate general partner. In July 2002, the
Partnership entered into an additional promissory note with the corporate
general partner for a loan in the amount of $500,000 in connection with the
operations of the Partnership. The loan is uncollateralized, non-interest
bearing and due on demand.
During 2002, the Partnership entered into three separate agreements,
each with an unrelated third party, to sell the Jack in the Box Property in Echo
Park, California, the Boston Market Property in Raleigh, North Carolina, and the
Bennigan's Property in Sunrise, Florida. The Partnership reclassified the assets
relating to these three Properties to real estate held for sale. In July 2002,
the Partnership terminated the agreement to sell the Bennigan's Property in
Sunrise, Florida. On August 5, 2002, the Partnership sold the Property in
Raleigh, North Carolina for $650,000 and received net sales proceeds of
approximately $614,100, resulting in a loss on disposal of assets of $322,472,
which the Partnership recorded at June 30, 2002. As of August 5, 2002, the sale
of the Property in Echo Park, California had not occurred.
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 partners. At June 30, 2002, the Partnership had $145,365
invested in such short-term investments, as compared to $226,136 at December 31,
2001. The funds remaining at June 30, 2002, will be used to pay distributions
and other liabilities of the Partnership.
Short-Term Liquidity
The Partnership's short-term liquidity requirements consist primarily
of the operating expenses of the Partnership.
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 continue to generate cash flow
in excess of operating expenses.
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.
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 six
months ended June 30, 2002, loans from the corporate general partner, the
Partnership declared distributions to limited partners of $1,400,000 for each of
the six months ended June 30, 2002 and 2001, ($700,000 for each of the quarters
ended June 30, 2002 and 2001.) This represents distributions of $0.40 per unit
for each of the six months ended June 30, 2002 and 2001, ($0.20 per unit for
each applicable quarter). No distributions were made to the general partners for
the quarters and six months ended June 30, 2002 and 2001. No amounts distributed
to the limited partners for the six months ended June 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.
Total liabilities of the Partnership, including distributions payable,
were $822,335 at June 30, 2002, as compared to $841,878 at December 31, 2001.
The decrease in total liabilities was primarily due to a decrease in accounts
payable and rents paid in advance at June 30, 2002, as compared to December 31,
2001. Total liabilities at June 30, 2002, to the extent they exceed cash and
cash equivalents at June 30, 2002, will be paid from future cash from
operations, loans, and in the event the general partners elect to make
additional contributions, from general partners' contributions.
Long-Term Liquidity
The Partnership has no long-term debt or other long-term liquidity
requirements.
Results of Operations
Total rental revenues were $960,968 for the six months ended June 30,
2002, as compared to $1,051,968 for the six months ended June 30, 2001, of which
$466,903 and $529,676 was earned during the second quarter of 2002 and 2001,
respectively. The decrease in rental revenues during the quarter and six months
ended June 30, 2002, as compared to the same periods of 2001, was partially due
to the 2001 sales of the Properties in Henderson, Nevada, and Santa Rosa,
California. In July 2001, the Partnership reinvested the net sales proceeds from
the sale of the Property in Henderson, Nevada, in a Property in Denver,
Colorado, with CNL Income Fund VIII, Ltd., a Florida limited partnership and an
affiliate of the general partners, as tenants-in-common. In January 2002, the
Partnership reinvested the net sales proceeds from the sale of the Property in
Santa Rosa, California in a Property in Austin, Texas, as tenants-in-common,
with CNL Income Fund X, Ltd., as described above in "Capital Resources." Rental
revenues are expected to remain at reduced amounts while equity in earnings of
joint ventures is expected to increase due to the fact that the Partnership
reinvested the majority of these net sales proceeds in two Properties with
affiliates of the general partners, as tenants-in-common. The decrease in rental
revenues during the quarter and six months ended June 30, 2002 was partially
offset by the fact that in January 2002, the Partnership reinvested the
remaining net sales proceeds from the 2001 sale of the Property in Santa Rosa,
California in a Property in Houston, Texas.
Rental revenues were lower during the quarter and six months ended June
30, 2002, as compared to the same periods of 2001, due to the fact that during
2002, the Partnership stopped recording rental revenues relating to the
Partnership's Property in Stow, Ohio because the tenant was experiencing
financial difficulties. In addition, rental revenues remained at reduced amounts
during the quarters and six months ended June 30, 2002 and 2001, due to the fact
that the Partnership stopped recording rental revenues when lease relating to
the Boston Market Property in Minnetonka, Minnesota was rejected by the tenant
in 1998 and when the lease related to the On the Border Property in San Antonio,
Texas was terminated during 2000. In May 2002, the Partnership sold the vacant
Property in San Antonio, Texas, and reinvested the net sales proceeds in a Taco
Cabana Property in San Antonio, Texas, as described above in "Capital
Resources". Rental revenues relating to the Properties in Stow, Ohio and
Minnetonka, Minnesota are expected to remain at reduced amounts until such time
as the Partnership executes new leases for these Properties or until the
Properties are sold and the proceeds from such sales are reinvested in
additional Properties. The lost revenues resulting from these Properties will
have an adverse effect on the results of operations of the Partnership if the
Partnership is not able to re-lease the Properties in a timely manner. The
Partnership is currently seeking a new tenant for the Property in Minnetonka,
Minnesota.
During the six months ended June 30, 2002 and 2001, the Partnership
earned $155,821 and $57,581, respectively, attributable to net income earned by
joint ventures, of which $78,055 and $28,542 was earned during the quarters
ended June 30, 2002 and 2001, respectively. The increase in net income earned by
joint ventures for the quarter and six months ended June 30, 2002, as compared
to the same periods of 2001, was primarily due to the fact that in July 2001 and
January 2002, the Partnership reinvested the majority of the net sales proceeds
from the 2001 sales of the Properties in Henderson, Nevada and Santa Rosa,
California, in a Property in Denver, Colorado and a Property in Austin, Texas,
respectively, each with an affiliate of the general partners, as
tenants-in-common.
Operating expenses, including depreciation and amortization expense and
provision for write-down of assets, were $399,088 and $866,073 for the six
months ended June 30, 2002 and 2001, respectively, of which $172,211 and
$445,264 was incurred during the quarters ended June 30, 2002 and 2001,
respectively. The decrease in operating expenses during the quarter and six
months ended June 30, 2002, as compared to the same periods of 2001, was
partially attributable to a decrease in the costs incurred for administrative
expenses for servicing the Partnership and its Properties and a decrease in the
amount of state tax expenses related to certain states in which the Partnership
conducts business.
The decrease in operating expenses during the quarter and six months
ended June 30, 2002, as compared to the same periods of 2001, was also partially
attributable to the fact that during the six months ended June 30, 2001, the
Partnership incurred approximately $85,400 pursuant to a judgment entered
against the Partnership in a lawsuit relating to the Property in Minnetonka,
Minnesota. The general partners appealed the judgment but lost and are
considering their options. No such expense was incurred during the quarter and
six months ended June 30, 2002. In addition, the decrease in operating expenses
during the quarter and six months ended June 30, 2002, was partially due to the
fact that the Partnership incurred certain property expenses such as insurance,
repairs and maintenance, legal fees and real estate taxes relating to the vacant
Properties owned by the Partnership in each respective period. Between June 2001
and May 2002, the Partnership sold three of the vacant Properties and did not
incur any additional expenses relating to these Properties after the sales
occurred. However, the Partnership will continue to incur these expenses
relating to the two remaining vacant Properties until the Properties are sold or
until the Partnership finds replacement tenants.
During the quarters and six months ended June 30, 2002 and 2001, the
Partnership incurred certain operating expenses relating to the On the Border
Property in San Antonio, Texas because the Partnership owned the building and
leased the land. In 2000, the tenant of this Property vacated the Property and
ceased restaurant operations. In accordance with an agreement executed in
conjunction with the execution of the initial lease, the ground lessor, the
tenant and the Partnership agreed that the Partnership would be provided certain
rights to help protect its interest in the building in the event of a default by
the tenant under the terms of the initial lease. As a result of the default by
the tenant and in order to preserve its interest in the building, during the six
months ended June 30, 2002 and 2001, the Partnership incurred approximately
$46,200 and $73,200, respectively, in rent expense relating to the ground lease
of the Property. In addition, during the quarter and six months ended June 30,
2001, the Partnership recognized a provision for write-down of assets of
$209,130. The provision represented the difference between the Property's
carrying value and its estimated fair value. In May 2002, the Partnership sold
this Property, and recorded an additional loss of $25,694, as described above in
"Capital Resources."
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.
As a result of the sale of the Property in San Antonio, Texas, the
Partnership recognized a loss of $25,694, during the quarter and six months
ended June 30, 2002. This Property had been identified for sale as of December
31, 2001. As a result of the sale of the Property in Timonium, Maryland, the
Partnership recognized a loss of $18,855, during the quarter and six months
ended June 30, 2001.
During 2002, the Partnership entered into three separate agreements,
each with an unrelated third party, to sell the Jack in the Box Property in Echo
Park, California, the Boston Market Property in Raleigh, North Carolina and the
Bennigan's Property in Sunrise, Florida. The Partnership expects to use the
proceeds from these sales to reinvest in additional income producing Properties.
In accordance with Statement of Financial Accounting Standards No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets", the
Partnership reclassified these assets from land and building on operating leases
and accrued rental income to real estate held for sale. The reclassified assets
were recorded at the lower of their carrying amount or fair value, less cost to
sell and the Partnership stopped recording depreciation and accrued rental
income upon placing the Properties up for sale. On August 5, 2002, the
Partnership sold the Property in Raleigh, North Carolina, as described above in
"Capital Resources." In connection with the anticipated sale of this Property,
the Partnership recorded a loss on disposal of assets of $322,472 during the
quarter and six months ended June 30, 2002. In addition, in May 2002, the
Partnership sold its Boston Market Property in San Antonio, Texas. Due to the
fact that the Partnership had recorded provisions for write-down of assets in
previous years, no gain or loss on disposal of assets was recorded during the
quarter and six months ended June 30, 2002 relating to this sale. The
Partnership recognized net rental income (rental revenues less Property related
expenses), of $149,035 and $132,533 during the six months ended June 30, 2002
and 2001, respectively, of which, the Partnership earned $70,276 and $67,728
during the quarters ended June 30, 2002 and 2001, respectively, relating to
these Properties. During the quarter and six months ended June 30, 2001, the
Partnership recorded a provision for write-down of assets of $387,138 relating
to the vacant Boston Market Property in San Antonio, Texas. The provision
represented the difference between the carrying value of the Property and its
fair value. In May 2002, the Partnership sold this Property, as describe above
in "Capital Resources." These amounts were reported as Discontinued Operations
in the financial statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
In July 1998, DJD Partners VII, LLC filed a lawsuit against Finest
Foodservice, LLC and CNL Income Fund XVIII, Ltd., DJD Partners VII,
LLC v. Finest Foodservice, LLC, et al, Case No. CT 98-014942, in the
District Court of the Fourth Judicial District of Hennepin County,
Minnesota, alleging a breach of a contract entered into by Finest
Foodservice, LLC and assigned to CNL Income Fund XVIII, Ltd. in
connection with the construction of a Boston Market property in
Minnetonka, Minnesota. In October 1998 Finest Foodservice, LLC filed
for bankruptcy and rejected its lease, causing the obligations of the
contract to become the responsibility of CNL Income Fund XVIII, Ltd.
On May 4, 2001, the District Court awarded a judgment of
approximately $85,400 to the plaintiff. CNL Income Fund XVIII, Ltd.
appealed the District Court's judgment but lost. The general partners
are considering their options.
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 XVIII, Ltd. (Filed as Exhibit 3.2 to
the Registrant's Registration Statement on Form S-11,
No. 33-90998-01, incorporated herein by reference.)
**3.2 Amended and Restated Agreement of Limited Partnership
of CNL Income Fund XVIII, 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 XVIII, Ltd. (Filed as Exhibit 3.2 to
Registrant's Registration Statement on Form S-11, No.
33-90998-01 and incorporated herein by reference.)
**4.2 Amended and Restated Agreement of Limited Partnership
of CNL Income Fund XVIII, 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.)
**5.1 Opinion of Baker & Hostetler as to the legality of the
securities being registered by CNL Income Fund XVIII,
Ltd. (Filed as Exhibit 5.2 to Amendment No. Three to
the Registrant's Registration Statements on Form S-11,
No. 33-90998, incorporated herein by reference.)
**8.1 Opinion of Baker & Hostetler regarding certain
material tax issues relating to CNL Income Fund XVIII,
Ltd. (Filed as Exhibit 8.1 to Amendment No. Three to
the Registrant's Registration Statement on Form S-11,
No. 33-90998, incorporated herein by reference.)
**8.2 Opinion of Baker & Hostetler regarding certain
material issues relating to the Distribution
Reinvestment Plan of CNL Income Fund XVIII, Ltd.
(Filed as Exhibit 8.4 to Amendment No. Three to the
Registrant's Registration Statement on Form S-11, No.
33-90998, incorporated herein by reference.)
**8.3 Amended Opinion of Baker & Hostetler regarding certain
material issues relating to CNL Income Fund XVIII,
Ltd. (Filed as Exhibit 8.5 to Post-Effective Amendment
No. Four 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 XVIII,
Ltd. and CNL Fund Advisors, Inc. (Included as Exhibit
10.1 to Form 10-K filed with the Securities and
Exchange Commission on March 20, 1997, and
incorporated herein by reference.)
**10.2 Assignment of Management Agreement from CNL Fund
Advisors, Inc. to CNL APF Partners, LP. (Filed as
Exhibit 10.2 to Form 10-Q filed with the Securities
and Exchange Commission on August 9, 2001, and
incorporated herein by reference.)
**10.3 Assignment of Management Agreement from CNL APF
Partners, LP to CNL Restaurants XVIII, Inc. (Filed
herewith.)
**10.4 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.)
**10.5 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.)
**10.6 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.)
**10.7 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.)
**10.8 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.)
**10.9 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.)
**10.10 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.)
**10.11 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.)
**10.12 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.)
**10.13 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.)
**10.14 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.)
**10.15 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.)
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter
ended June 30, 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
DATED this 7th day of August, 2002.
CNL INCOME FUND XVIII, 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 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
The undersigned, James M. Seneff, Jr., the Chief Executive Officer of CNL Realty
Corporation, the corporate general partner of CNL Income Fund XVIII, Ltd. (the
"Partnership"), has executed this certification in connection with the filing
with the Securities and Exchange Commission of the Partnership's Quarterly
Report on Form 10-Q for the period ending June 30, 2002 (the "Report"). The
undersigned hereby certifies that:
(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Partnership.
Date: August 7, 2002 /s/ James M. Seneff, Jr.
----------------------------------
Name: James M. Seneff, Jr.
Title: Chief Executive Officer
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
The undersigned, Robert A. Bourne, the President and Treasurer of CNL Realty
Corporation, the corporate general partner of CNL Income Fund XVIII, Ltd. (the
"Partnership"), has executed this certification in connection with the filing
with the Securities and Exchange Commission of the Partnership's Quarterly
Report on Form 10-Q for the period ending June 30, 2002 (the "Report"). The
undersigned hereby certifies that:
(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Partnership.
Date: August 7, 2002 /s/ Robert A. Bourne
---------------------------------
Name: Robert A. Bourne
Title: President and Treasurer
EXHIBIT INDEX
Exhibit Number
**3.1 Affidavit and Certificate of Limited Partnership of CNL
Income Fund XVIII, Ltd. (Filed as Exhibit 3.2 to the
Registrant's Registration Statement on Form S-11, No.
33-90998-01, incorporated herein by reference.)
**3.2 Amended and Restated Agreement of Limited Partnership of CNL
Income Fund XVIII, 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 XVIII, Ltd. (Filed as Exhibit 3.2 to
Registrant's Registration Statement on Form S-11, No.
33-90998-01 and incorporated herein by reference.)
**4.2 Amended and Restated Agreement of Limited Partnership of CNL
Income Fund XVIII, 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.)
**5.1 Opinion of Baker & Hostetler as to the legality of the
securities being registered by CNL Income Fund XVIII, Ltd.
(Filed as Exhibit 5.2 to Amendment No. Three to the
Registrant's Registration Statements on Form S-11, No.
33-90998, incorporated herein by reference.)
**8.1 Opinion of Baker & Hostetler regarding certain material tax
issues relating to CNL Income Fund XVIII, Ltd. (Filed as
Exhibit 8.1 to Amendment No. Three to the Registrant's
Registration Statement on Form S-11, No. 33-90998,
incorporated herein by reference.)
**8.2 Opinion of Baker & Hostetler regarding certain material
issues relating to the Distribution Reinvestment Plan of CNL
Income Fund XVIII, Ltd. (Filed as Exhibit 8.4 to Amendment
No. Three to the Registrant's Registration Statement on Form
S-11, No. 33-90998, incorporated herein by reference.)
**8.3 Amended Opinion of Baker & Hostetler regarding certain
material issues relating to CNL Income Fund XVIII, Ltd.
(Filed as Exhibit 8.5 to Post-Effective Amendment No. Four
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 XVIII, Ltd. and
CNL Fund Advisors, Inc. (Included as Exhibit 10.1 to Form
10-K filed with the Securities and Exchange Commission on
March 20, 1997, and incorporated herein by reference.)
**10.2 Assignment of Management Agreement from CNL Fund Advisors,
Inc. to CNL APF Partners, LP. (Filed as Exhibit 10.2 to Form
10-Q filed with the Securities and Exchange Commission on
August 9, 2001, and incorporated herein by reference.)
**10.3 Assignment of Management Agreement from CNL APF Partners, LP
to CNL Restaurants XVIII, Inc. (Filed herewith.)
**10.4 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.)
**10.5 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.)
**10.6 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.)
**10.7 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.)
**10.8 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.)
**10.9 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.)
**10.10 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.)
**10.11 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.)
**10.12 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.)
**10.13 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.)
**10.14 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.)
**10.15 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.)
EXHIBIT 10.3