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Rule 424(b)(3)
Registration No. 333-35557
TELECOMMUNICATIONS INCOME FUND XI, L.P.
Supplement Dated April 22, 1998
to
Prospectus Dated December 23, 1997
I. FEES TO THE GENERAL PARTNER
The General Partner will receive substantial fees in connection with the
operation of the Partnership, regardless of whether investors receive a
return of their investment. These fees include an Acquisition Fee of
equipment acquired and financing placed; Management Fees of 2% of payments
received by the Partnership on account of its leasing and financing
activities; Re-Leasing Fees equal to 2% of gross rental payments received
from the re-lease of Equipment, Expense Reimbursements equal to the lesser of
actual expenses incurred, or the amount the Partnership would be required to
pay to an unaffiliated third party for similar services. In addition, after
Limited Partners have received a return of 100% of their original investment
in the Partnership, plus a 9.6% annual return on their investment, and no
less than an 8.0% annual, cumulative return, compounded daily, distribution
based on their Adjusted Capital Contributions, the General Partner is also
entitled to be paid 20% of any remaining Liquidating Distributions. For a
complete listing of the fees to be paid by Investors in connection with the
Offering and the Partnership, please see the summary on page 23 of the
Prospectus.
II. TREATMENT OF DISTRIBUTIONS
The percentage amount discussed on page 74 of the Prospectus is a contractual
term, not a projected rate of return. The percentage amount relates solely
to the point at which distributions will be counted as return of capital for
the purpose of determining when Limited Partners have received the return to
which they are entitled before the General Partner is entitled to begin to
share in any profits of the Partnership. The percentage rate on page 74 does
not suggest any rate of return that a Limited Partner should expect, or will
receive.
3. RELATIONSHIP WITH INTELLICALL, INC.
Thomas J. Berthel, the president of the General Partner, is a director and
shareholder of Intellicall, Inc. ("Intellicall"), which manufactures pay
phone equipment. Mr. Berthel has undertaken that he will not, in his
capacity as a director of Intellicall, vote on any matters relating to
dealings between Intellicall and the Partnership. In addition, the
Partnership will not purchase any equipment from Intellicall for the purpose
of lease, or otherwise, unless the terms of such purchase have been
negotiated by a third party lessee for the use of which the Partnership is
acquiring the equipment.
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III. SATISFACTION OF ESCROW CONDITIONS AND CLOSING.
On February 18, 1998, the General Partner determined that sales of Units
exceeding the minimum offering amount of $1,200,000 had been achieved. On
that same date, First National Bank Iowa, the Escrow Agent for the Offering,
released to the Partnership $1,278,000 from the escrow fund holding the funds
of investors who had subscribed prior to that date, of which $1,118,250 was
immediately available for investment.
IV. INVESTMENTS OF PARTNERSHIP FUNDS.
As of March 5, 1998, the Partnership had entered into three (3) leases having
a total equipment cost of $312,601. In addition, as of March 5, 1998, the
Partnership had entered into notes, involving the advance by the Partnership
of $241,290.
V. ESTABLISHMENT OF RESERVES AGAINST LOSSES IN PRIOR PROGRAMS OPERATED BY
THE GENERAL PARTNER.
Two other programs managed by the General Partner, Telecommunications Income
Fund IX, L.P. ("TIF IX") and Telecommunications Income Fund X, L.P. ("TIF
X"), have experienced defaults on leases and notes with North American
Communications Group, Inc. ("NAC"). NAC had total obligations to TIF IX as
of December 31, 1997 in the net amount of $1,596,739, and total obligations
to TIF X as of that date in the net amount of $3,140,959. On February 20,
1998, TIF IX and TIF X filed a lawsuit to foreclose on the collateral granted
by NAC in connection with the notes and the equipment held by NAC pursuant to
the leases. On March 5, 1998, the General Partner decided to reserve the
full value carried on the financial statements of TIF IX and TIF X, with
respect to leases and notes with NAC, as of December 31, 1997. Leases and
notes with NAC constitute 12% and 15% of the portfolios of TIF IX and TIF X,
respectively. In the event the loss reserve amounts are not recovered
through litigation with NAC, the overall performance of TIF IX and TIF X may
be materially negatively affected.
