FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT of 1934
For the quarterly period ended March 31, 2003
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OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT of 1934
For the transition period from _____________________ to _____________________
Commission file number
0-24095
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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 _________
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act): Yes___ No X -
CONTENTS
Part I Page
----
Item 1. Financial Statements:
Condensed Balance Sheets 1
Condensed Statements of Income 2
Condensed Statements of Partners' Capital 3
Condensed Statements of Cash Flows 4
Notes to Condensed Financial Statements 5-6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7-9
Item 3. Quantitative and Qualitative Disclosures about
Market Risk 9
Item 4. Controls and Procedures 9
Part II
Other Information 10-12
CNL INCOME FUND XVIII, LTD.
(A Florida Limited Partnership)
CONDENSED BALANCE SHEETS
March 31, December 31,
2003 2002
------------------ ------------------
ASSETS
Real estate properties with operating leases, net $ 17,366,500 $ 17,453,524
Net investment in direct financing leases 2,054,960 2,064,258
Real estate held for sale 1,414,948 1,420,626
Investment in joint ventures 3,179,924 3,185,337
Cash and cash equivalents 316,113 429,481
Receivables, less allowance for doubtful
accounts of $151,186 and $104,228, respectively 945 945
Accrued rental income 470,678 456,857
Other assets 8,880 10,504
------------------ ------------------
$ 24,812,948 $ 25,021,532
================== ==================
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 12,381 $ 4,178
Real estate taxes payable 8,066 12,204
Distributions payable 700,000 700,000
Due to related parties 14,897 17,762
Rents paid in advance 56,895 35,840
Deferred rental income 4,581 4,661
------------------ ------------------
Total liabilities 796,820 774,645
Partners' capital 24,016,128 24,246,887
------------------ ------------------
$ 24,812,948 $ 25,021,532
================== ==================
See accompanying notes to condensed financial statements.
CNL INCOME FUND XVIII, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF INCOME
Quarter Ended
March 31,
2003 2002
-------------- ---------------
Revenues:
Rental income from operating leases $ 481,815 $ 466,444
Earned income from direct financing leases 39,691 80,090
Interest and other income 5,892 1,744
-------------- ---------------
527,398 548,278
-------------- ---------------
Expenses:
General operating and administrative 56,205 67,566
Property expenses 13,954 66,470
Management fees to related parties 5,708 6,347
State and other taxes 7,425 8,115
Depreciation and amortization 87,828 77,569
-------------- ---------------
171,120 226,067
-------------- ---------------
Income Before Equity in Earnings of Joint Ventures 356,278 322,211
Equity in Earnings of Joint Ventures 77,726 77,766
-------------- ---------------
Income from Continuing Operations 434,004 399,977
Discontinued Operations:
Income from discontinued operations 35,237 25,480
-------------- ---------------
Net Income $ 469,241 $ 425,457
============== ===============
Net Income Per Limited Partner Unit:
Continuing operations $ 0.12 $ 0.11
Discontinued operations 0.01 0.01
-------------- ---------------
Total $ 0.13 $ 0.12
============== ===============
Weighted Average Number of Limited Partner
Units Outstanding 3,500,000 3,500,000
============== ===============
See accompanying notes to condensed financial statements.
CNL INCOME FUND XVIII, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF PARTNERS' CAPITAL
Quarter Ended Year Ended
March 31, December 31,
2003 2002
------------------- -------------------
General partners:
Beginning balance $ (5,319 ) $ (5,319 )
Net income -- --
------------------- -------------------
(5,319 ) (5,319 )
------------------- -------------------
Limited partners:
Beginning balance 24,252,206 26,675,136
Net income 469,241 377,070
Distributions ($0.20 and $0.80 per
limited partner unit, respectively) (700,000 ) (2,800,000 )
------------------- -------------------
24,021,447 24,252,206
------------------- -------------------
Total partners' capital $ 24,016,128 $ 24,246,887
=================== ===================
See accompanying notes to condensed financial statements.
CNL INCOME FUND XVIII, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF CASH FLOWS
Quarter Ended
March 31,
2003 2002
--------------- --------------
Increase (Decrease) in Cash and Cash Equivalents
Net Cash Provided by Operating Activities $ 586,632 $ 531,709
--------------- --------------
Cash Flows from Investing Activities:
Addition to real estate properties with operating leases -- (1,194,064 )
Investment in joint ventures -- (215,191 )
Decrease in restricted cash -- 1,663,401
--------------- --------------
Net cash provided by investing activities -- 254,146
--------------- --------------
Cash Flows from Financing Activities:
Loans from corporate general partner 200,000 125,000
Repayment of loans from corporate general partner (200,000 ) (125,000 )
Distributions to limited partners (700,000 ) (700,000 )
--------------- --------------
Net cash used in financing activities (700,000 ) (700,000 )
--------------- --------------
Net Increase (Decrease) in Cash and Cash Equivalents (113,368 ) 85,855
Cash and Cash Equivalents at Beginning of Quarter 429,481 226,136
--------------- --------------
Cash and Cash Equivalents at End of Quarter $ 316,113 $ 311,991
=============== ==============
Supplemental Schedule of Non-Cash Financing Activities:
Distributions declared and unpaid at end of quarter $ 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 Ended March 31, 2003 and 2002
1. Basis of Presentation:
---------------------
The accompanying unaudited condensed financial statements have been
prepared in accordance with the instructions to Form 10-Q and do not
include all of the information and note disclosures required by
generally accepted accounting principles. The financial statements
reflect all adjustments, consisting of normal recurring adjustments,
which are, in the opinion of the general partners, necessary to a fair
statement of the results for the interim periods presented. Operating
results for the quarter ended March 31, 2003, may not be indicative of
the results that may be expected for the year ending December 31, 2003.
Amounts as of December 31, 2002, included in the financial statements,
have been derived from audited financial statements as of that date.
These unaudited financial statements should be read in conjunction with
the financial statements and notes thereto included in Form 10-K of CNL
Income Fund XVIII, Ltd. (the "Partnership") for the year ended December
31, 2002.
In January 2003, FASB issued FASB Interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities" to expand upon and
strengthen existing accounting guidance that addresses when a company
should include the assets, liabilities and activities of another entity
in its financial statements. To improve financial reporting by
companies involved with variable interest entities (more commonly
referred to as special-purpose entities or off-balance sheet
structures), FIN 46 requires that a variable interest entity be
consolidated by a company if that company is subject to a majority risk
of loss from the variable interest entity's activities or entitled to
receive a majority of the entity's residual returns or both. Prior to
FIN 46, a company generally included another entity in its consolidated
financial statements only if it controlled the entity through voting
interests. Consolidation of variable interest entities will provide
more complete information about the resources, obligations, risks and
opportunities of the consolidated company. The consolidation
requirements of FIN 46 apply immediately to variable interest entities
created after January 31, 2003, and to older entities, in the first
fiscal year or interim period beginning after June 15, 2003. The
general partners believe adoption of this standard may result in either
consolidation or additional disclosure requirements with respect to the
Partnership's unconsolidated joint ventures or properties held with
affiliates of the general partners as tenants-in-common, which are
currently accounted for under the equity method. However, such
consolidation is not expected to significantly impact the Partnership's
results of operations.
2. Reclassification:
----------------
Certain items in the prior year's financial statements have been
reclassified to conform to 2003 presentation. These reclassifications
had no effect on total partners' capital or net income.
3. Discontinued Operations:
-----------------------
During 2002, the Partnership identified and sold two properties that
became vacant prior to 2002 and were classified as Discontinued
Operations in the accompanying financial statements. In March 2003, the
Partnership identified for sale its property in Destin, Florida. As a
result, the Partnership reclassified the asset from real estate
properties with operating leases to real estate held for sale. The
reclassified asset was recorded at the lower of its carrying amount or
fair value, less cost to sell. In addition, the Partnership stopped
recording depreciation once the property was identified for sale.
CNL INCOME FUND XVIII, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters Ended March 31, 2003 and 2002
3. Discontinued Operations - Continued:
-----------------------------------
The operating results of the discontinued operations for the above
properties are as follows:
Quarter Ended March 31,
2003 2002
------------------ ---------------
Rental revenues $ 41,075 $ 41,075
Expenses (5,838 ) (15,595 )
------------------ ---------------
Income from discontinued operations $ 35,237 $ 25,480
================== ===============
4. Subsequent Event:
----------------
In April 2003, the Partnership entered into a promissory note with the
corporate general partner for a loan in the amount of $450,000 in
connection with the operations of the Partnership. The loan is
uncollateralized, non-interest bearing and due on demand.
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 March 31, 2002, the Partnership owned 20 Properties
directly and five Properties indirectly through joint venture or tenancy in
common arrangements. As of March 31, 2003, the Partnership owned 18 Properties
directly and five Properties indirectly through joint venture or tenancy in
common arrangements.
Capital Resources
Cash from operating activities was $586,632 and $531,709 for the
quarters ended March 31, 2003 and 2002, respectively. The increase in cash from
operating activities during the quarter ended March 31, 2003, as compared to the
same period of 2002 was the result of changes in income and expenses.
Other sources and uses of cash included the following during the
quarter ended March 31, 2003.
During the quarter ended March 31, 2003, the Partnership entered into a
promissory note with the corporate general partner for a loan in the amount of
$200,000 in connection with the operations of the Partnership. The loan was
uncollateralized, non-interest bearing and due on demand. During February 2003,
the Partnership repaid the loan in full to the corporate general partner. In
April 2003, the Partnership entered into a promissory note with the corporate
general partner for a loan in the amount of $450,000 in connection with the
operations of the Partnership. The loan is uncollateralized, non-interest
bearing and due on demand.
At March 31, 2003, the Partnership had $316,113 invested in cash and
cash equivalents, as compared to $429,481 at December 31, 2002. The funds
remaining at March 31, 2003, after the payment of operating expenses, will be
used toward the payment of distributions and other liabilities.
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 generally 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 and loans if they deem it appropriate in
connection with the operations of the Partnership.
Total liabilities of the Partnership, including distributions payable,
were $796,820 at March 31, 2003, as compared to $774,645 at December 31, 2002.
The increase in liabilities at March 31, 2003 was due to an increase in rents
paid in advance at March 31, 2003, as compared to December 31, 2002. Liabilities
at March 31, 2003, to the extent they exceed cash and cash equivalents at March
31, 2003, will be paid from anticipated future cash from operations, loans from
the general partners, or from future general partners' contributions.
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 loans from the
corporate general partner, the Partnership declared distributions to limited
partners of $700,000 for each of the quarters ended March 31, 2003 and 2002.
This represents distributions of $0.20 per unit for the quarters ended March 31,
2003 and 2002. No distributions were made to the general partners for the
quarters ended March 31, 2003 and 2002. No amounts distributed to the limited
partners for the quarters ended March 31, 2003 and 2002 are required to be or
have been treated by the Partnership as a return of capital for purposes of
calculating the limited partners' return on their adjusted capital
contributions. The Partnership intends to continue to make distributions of cash
available for distribution to the limited partners on a quarterly basis. If the
general partners do not elect to make additional capital contributions or loans
to the Partnership, the Partnership may consider lowering the distribution rate.
Long-Term Liquidity
The Partnership has no long-term debt or other long-term liquidity
requirements.
Results of Operations
Total rental revenues were $521,506 during the quarter ended March 31,
2003, as compared to $546,534 during the same period of 2002. Rental revenues
were lower during the quarter ended March 31, 2003 because the Partnership
stopped recording rental revenues relating to the Property in Stow, Ohio when
the tenant experienced financial difficulties during 2002. During the quarters
ended March 31, 2003 and 2002, the Partnership did not record rental revenues
relating to the Boston Market Property in Minnetonka, Minnesota because the
lease was rejected by the tenant in 1998 in connection with the tenant's
bankruptcy proceedings. The lost revenues resulting from these two Properties
will continue to have an adverse effect on the cash from operations and results
of operations of the Partnership until the Partnership is able to re-lease or
sell the Property in Stow, Ohio and resolve the outstanding issues relating to
the Property in Minnetonka, Minnesota. The decrease in rental revenues during
the quarter ended March 31, 2003 was partially offset by the rental revenues
from a Property acquired in June 2002.
The Partnership also earned $77,726 attributable to net income earned
by joint ventures during the quarter ended March 31, 2003, as compared to
$77,766 during the same period of 2002.
Operating expenses, including depreciation and amortization expense,
were $171,120 during the quarter ended March 31, 2003, as compared to $226,067
during the same period of 2002. Operating expenses were lower during the quarter
ended March 31, 2003, due to a decrease in property expenses related to vacant
Properties. During the quarter ended March 31, 2002, 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 quarter ended
March 31, 2002, the Partnership incurred approximately $32,500 in rent expense
relating to the ground lease of the Property. In May 2002, the Partnership sold
this Property and did not incur additional expenses relating to this Property
once it was sold. The Partnership will continue to incur Property expenses
relating to the Properties in Minnetonka, Minnesota and Stow, Ohio until the
Partnership is able to re-lease or sell the Property in Stow, Ohio and resolve
the outstanding issues relating to the Property in Minnetonka, Minnesota.
In addition, operating expenses were lower during the quarter ended
March 31, 2003 due to a decrease in the costs incurred for administrative
expenses for servicing the Partnership and its Properties. The decrease was
partially offset by an increase in depreciation expense related to the
acquisition of a Property in June 2002.
During the year ended December 31, 2002, the Partnership identified two
Properties that were classified as Discontinued Operations in the accompanying
financial statements. The Partnership sold both of these Properties, which
became vacant prior to 2002, subsequent to March 31, 2002. In addition, in March
2003, the Partnership identified for sale its Property in Destin, Florida. As a
result, the Partnership reclassified the asset from real estate properties with
operating leases to real estate held for sale. The reclassified asset was
recorded at the lower of its carrying amount or fair value, less cost to sell.
In addition, the Partnership stopped recording depreciation once the Property
was identified for sale. The Partnership recognized net rental income (rental
revenues less Property related expenses), of $25,480 during the quarter ended
March 31, 2002 relating to these three Properties. The Partnership recognized
net rental income of $35,237 during the quarter ended March 31, 2003, relating
to the Property in Destin, Florida. As of May 5, 2003, the Partnership had not
sold this Property.
In January 2003, FASB issued FASB Interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities" to expand upon and strengthen
existing accounting guidance that addresses when a company should include the
assets, liabilities and activities of another entity in its financial
statements. To improve financial reporting by companies involved with variable
interest entities (more commonly referred to as special-purpose entities or
off-balance sheet structures), FIN 46 requires that a variable interest entity
be consolidated by a company if that company is subject to a majority risk of
loss from the variable interest entity's activities or entitled to receive a
majority of the entity's residual returns or both. Prior to FIN 46, a company
generally included another entity in its consolidated financial statements only
if it controlled the entity through voting interests. Consolidation of variable
interest entities will provide more complete information about the resources,
obligations, risks and opportunities of the consolidated company. The
consolidation requirements of FIN 46 apply immediately to variable interest
entities created after January 31, 2003, and to older entities, in the first
fiscal year or interim period beginning after June 15, 2003. The general
partners believe adoption of this standard may result in either consolidation or
additional disclosure requirements with respect to the Partnership's
unconsolidated joint ventures or Properties held with affiliates of the general
partners as tenants-in-common, which are currently accounted for under the
equity method. However, such consolidation is not expected to significantly
impact the Partnership's results of operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
The general partners maintain a set of disclosure controls and
procedures designed to ensure that information required to be disclosed in the
Partnership's filings under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms. The principal executive
and financial officers of the corporate general partner have evaluated the
Partnership's disclosure controls and procedures within 90 days prior to the
filing of this Quarterly Report on Form 10-Q and have determined that such
disclosure controls and procedures are effective.
Subsequent to the above evaluation, there were no significant changes
in internal controls or other factors that could significantly affect these
controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. Inapplicable.
------------------
Item 2. Changes in Securities. Inapplicable.
----------------------
Item 3. Default upon Senior Securities. Inapplicable.
-------------------------------
Item 4. Submission of Matters to a Vote of Security Holders. Inapplicable.
----------------------------------------------------
Item 5. Other Information. Inapplicable.
------------------
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
(a) Exhibits
**3.1 Affidavit and Certificate of Limited Partnership of
CNL Income Fund 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. (Included
as Exhibit 10.3 to Form 10-Q filed with the
Securities and Exchange Commission on August 13,
2002, and incorporated herein by reference.)
**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.)
99.1 Certification of Chief Executive Officer of Corporate
General Partner Pursuant to 18 U.S.C. Section 1350 as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002. (Filed herewith.)
99.2 Certification of Chief Financial Officer of Corporate
General Partner Pursuant to 18 U.S.C. Section 1350 as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002. (Filed herewith.)
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter
ended March 31, 2003.
**Previously filed.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
DATED this 9th day of May, 2003.
CNL INCOME FUND 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 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 XVIII, Ltd. (the
"registrant"), certify that:
1. I have reviewed this quarterly report on Form 10-Q of the
registrant;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect
to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented
in this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
a. designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and
c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrant's auditors
and the audit committee of registrant's board of directors (or
persons performing the equivalent function):
a. all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and
b. any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officer and I have indicated in
this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: May 9, 2003
/s/ James M. Seneff, Jr.
- ---------------------------
James M. Seneff, Jr.
Chief Executive Officer
CERTIFICATION OF CHIEF FINANCIAL OFFICER
OF CORPORATE GENERAL PARTNER
PURSUANT TO RULE 13a-14 AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Robert A. Bourne, President and Treasurer of CNL Realty Corporation,
the corporate general partner of CNL Income Fund XVIII, Ltd. (the "registrant")
certify that:
1. I have reviewed this quarterly report on Form 10-Q of the
registrant;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect
to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented
in this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
a. designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and
c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrant's auditors
and the audit committee of registrant's board of directors (or
persons performing the equivalent function):
a. all significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in internal
controls; and
b. any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officer and I have indicated in
this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: May 9, 2003
/s/ Robert A. Bourne
- ---------------------------
Robert A. Bourne
President and Treasurer
EXHIBIT INDEX
Exhibit Number
(c) 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. (Included as
Exhibit 10.3 to Form 10-Q filed with the Securities and
Exchange Commission on August 13, 2002, and incorporated
herein by reference.)
**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.)
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.)
**Previously filed.
EXHIBIT 99.1
EXHIBIT 99.2