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, 2000
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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
0-16824
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CNL Income Fund II, Ltd.
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(Exact name of registrant as specified in its charter)
Florida 59-2733859
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
450 South Orange Avenue
Orlando, Florida 32801-3336
---------------------------------------- ---------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number
(including area code) (407) 540-2000
---------------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No _____
<PAGE>
CONTENTS
Page
Part I.
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 7-11
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 11
Part II.
Other Information 12-14
<PAGE>
CNL INCOME FUND II, LTD.
(A Florida Limited Partnership)
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
------------------ -------------------
<S> <C>
ASSETS
Land and buildings on operating leases, less
accumulated depreciation of $3,810,296 and
$3,767,469, respectively $ 11,324,703 $ 11,797,412
Investment in joint ventures 5,033,336 5,079,701
Cash and cash equivalents 1,360,932 904,715
Receivables, less allowance for doubtful accounts
of $43,799 and $78,690, respectively 55,853 33,849
Due from related party -- 3,108
Prepaid expenses 5,581 7,738
Lease costs, less accumulated amortization of
$13,564 and $13,306, respectively 2,748 3,006
Accrued rental income 203,598 196,689
------------------ -------------------
$ 17,986,751 $ 18,026,218
================== ===================
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 38,746 $ 89,018
Escrowed real estate taxes payable 2,627 4,691
Distributions payable 515,629 515,629
Due to related parties 153,397 105,654
Rents paid in advance and deposits 20,785 33,483
------------------ -------------------
Total liabilities 731,184 748,475
Commitments and contingencies (Note 5)
Partners' capital 17,255,567 17,277,743
------------------ -------------------
$ 17,986,751 $ 18,026,218
================== ===================
See accompanying notes to condensed financial statements.
<PAGE>
CNL INCOME FUND II, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF INCOME
Quarter Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
----------- ----------- ------------ -----------
Revenues:
Rental income from operating leases $ 422,097 $437,442 $ 840,437 $ 857,643
Interest and other income 1,912 22,201 27,875 35,872
----------- ----------- ------------ -----------
424,009 459,643 868,312 893,515
----------- ----------- ------------ -----------
Expenses:
General operating and administrative 45,597 24,557 93,136 60,381
Bad debt expense 7,347 -- 7,347 --
Professional services 1,225 13,467 13,329 16,984
State and other taxes -- 185 14,422 15,711
Depreciation and amortization 78,109 81,536 156,589 164,585
Transaction costs 19,944 56,198 53,228 88,522
----------- ----------- ------------ -----------
152,222 175,943 338,051 346,183
----------- ----------- ------------ -----------
Income Before Equity in Earnings of Joint Ventures
and Gain on Sale of Land and Buildings 271,787 283,700 530,261 547,332
Equity in Earnings of Joint Ventures 101,779 107,524 228,852 214,763
Gain on Sale of Land and Buildings 249,969 -- 249,969 192,752
----------- ----------- ------------ -----------
Net Income $ 623,535 $ 391,224 $1,009,082 $ 954,847
=========== =========== ============ ===========
Allocation of Net Income:
General partners $ 4,871 $ 3,911 $ 8,726 $ 8,239
Limited partners 618,664 387,313 1,000,356 946,608
----------- ----------- ------------ -----------
$ 623,535 $ 391,224 $1,009,082 $ 954,847
=========== =========== ============ ===========
Net Income Per Limited Partner Unit $ 12.37 $ 7.75 $ 20.01 $ 18.93
=========== =========== ============ ===========
Weighted Average Number of Limited Partner
Units Outstanding 50,000 50,000 50,000 50,000
=========== =========== ============ ===========
See accompanying notes to condensed financial statements.
<PAGE>
CNL INCOME FUND II, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF PARTNERS' CAPITAL
Six Months Ended Year Ended
June 30, December 31,
2000 1999
----------------------- ---------------------
General partners:
Beginning balance $ 405,788 $ 390,900
Net income 8,726 14,888
----------------------- ---------------------
414,514 405,788
----------------------- ---------------------
Limited partners:
Beginning balance 16,871,955 17,249,981
Net income 1,000,356 1,684,490
Distributions ($20.63 and $41.25 per
limited partner unit, respectively) (1,031,258 ) (2,062,516 )
----------------------- ---------------------
16,841,053 16,871,955
----------------------- ---------------------
Total partners' capital $ 17,255,567 $ 17,277,743
======================= =====================
See accompanying notes to condensed financial statements.
<PAGE>
CNL INCOME FUND II, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF CASH FLOWS
Six Months Ended
June 30,
2000 1999
--------------- ----------------
Increase (Decrease) in Cash and Cash Equivalents
Net Cash Provided by Operating Activities $ 890,816 $ 976,678
--------------- ----------------
Cash Flows from Investing Activities:
Additions to land and buildings on operating leases (23,341 ) --
Proceeds from sale of land and building 620,000 677,678
Increase in restricted cash -- (677,678 )
Collections on mortgage note receivable -- 6,817
--------------- ----------------
Net cash provided by investing activities 596,659 6,817
--------------- ----------------
Cash Flows from Financing Activities:
Distributions to limited partners (1,031,258 ) (1,031,258 )
--------------- ----------------
Net cash used in financing activities (1,031,258 ) (1,031,258 )
--------------- ----------------
Net Increase (Decrease) in Cash and Cash Equivalents 456,217 (47,763 )
Cash and Cash Equivalents at Beginning of Period 904,715 889,891
--------------- ----------------
Cash and Cash Equivalents at End of Period $1,360,932 $ 842,128
=============== ================
Supplemental Schedule of Non-Cash Investing
and Financing Activities:
Deferred real estate disposition fees incurred
and unpaid at end of period $ 18,600 $ --
=============== ================
Distributions declared and unpaid at end of
period $ 515,629 $ 515,629
=============== ================
See accompanying notes to condensed financial statements.
</TABLE>
<PAGE>
CNL INCOME FUND II, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Six Months Ended June 30, 2000 and 1999
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, 2000 may not be indicative of
the results that may be expected for the year ending December 31, 2000.
Amounts as of December 31, 1999, 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 II, Ltd. (the "Partnership") for the year ended December
31, 1999.
2. Land and Buildings on Operating Leases:
In June 2000, the Partnership sold its property in Jacksonville,
Florida to the tenant for $620,000 resulting in a gain of $249,969 for
financial reporting purposes. This property was originally acquired by
the Partnership in September 1987 and had a cost of approximately
$441,000, excluding acquisition fees and miscellaneous acquisition
expenses; therefore, the Partnership sold the property for
approximately $179,000 in excess of its original purchase price. In
connection with the sale, the Partnership incurred a deferred,
subordinated, real estate disposition fee of $18,600 (see Note 3).
3. Related Party Transactions:
An affiliate of the Partnership is entitled to receive a deferred,
subordinated real estate disposition fee, payable upon the sale of one
or more properties based on the lesser of one-half of a competitive
real estate commission or three percent of the sales price if the
affiliate provides a substantial amount of services in connection with
the sale. Payment of the real estate disposition fee is subordinated to
receipt by the limited partners of their aggregate, cumulative 10%
preferred return, plus their adjusted capital contributions. During the
quarter and six months ended June 30, 2000, the Partnership incurred
$18,600 in a deferred, subordinated, real estate disposition fee as a
result of the sale of a property (see Note 2).
<PAGE>
CNL INCOME FUND II, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Six Months Ended June 30, 2000 and 1999
4. Termination of Merger:
On March 1, 2000, the general partners and CNL American Properties
Fund, Inc. ("APF") mutually agreed to terminate the Agreement and Plan
of Merger entered into in March 1999. The general partners are
continuing to evaluate strategic alternatives for the Partnership,
including alternatives to provide liquidity to the limited partners.
5. Commitments and Contingencies:
During the six months ended June 30, 2000, the Partnership entered into
an agreement with the tenant of the property in Ocala, Florida to sell
the property to the tenant. In preparing for the sale of the property,
the Partnership incurred $35,053 in environmental remediation costs. In
accordance with the American Institute of Certified Public Accountants'
Statement of Position 96-1 "Environmental Remediation Liabilities," the
Partnership capitalized these costs as land improvements. The
Partnership anticipates that it will incur approximately $75,000 in
additional environmental remediation costs related to this property;
however, the general partners believe that the anticipated sales price
will exceed the Partnership's total cost attributable to the property.
As of August 1, 2000, the sale had not occurred.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
CNL Income Fund II, Ltd. (the "Partnership") is a Florida limited
partnership that was organized on November 13, 1986 to acquire for cash, either
directly or through joint venture arrangements, both newly constructed and
existing restaurant properties, as well as land upon which restaurants were to
be constructed, which are leased primarily to operators of national and regional
fast-food restaurant chains (collectively, the "Properties"). 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, 2000,
the Partnership owned 36 Properties, which included interests in four Properties
owned by joint ventures in which the Partnership is a co-venturer and six
Properties owned with affiliates as tenants-in-common.
Capital Resources
The Partnership's primary source of capital for the six months ended
June 30, 2000 and 1999 was cash from operations (which includes cash received
from tenants, distributions from joint ventures, and interest and other income
received, less cash paid for expenses). Cash from operations was $890,816 and
$976,678 for the six months ended June 30, 2000 and 1999, respectively. The
decrease in cash from operations for the six months ended June 30, 2000, as
compared to the six months ended June 30, 1999, was primarily a result of
changes in income and expenses as described in "Results of Operations" below and
changes in the Partnership's working capital.
Other sources and uses of capital included the following during the six
months ended June 30, 2000.
In June 2000, the Partnership sold its Property in Jacksonville,
Florida, to the tenant for $620,000, resulting in a gain of $249,969 for
financial reporting purposes. This Property was originally acquired by the
Partnership in September 1987 and had a cost of approximately $441,000,
excluding acquisition fees and miscellaneous acquisition expenses; therefore,
the Partnership sold this Property for approximately $179,000 in excess of its
original purchase price. In connection with the sale, the Partnership incurred a
deferred, subordinated, real estate disposition fee of $18,600. Payment of the
real estate disposition fee is subordinated to receipt by the limited partners
of their aggregate, cumulative 10% preferred return, plus their adjusted capital
contributions. The Partnership intends to use the majority of the net sales
proceeds to distribute to the limited partners.
During the six months ended June 30, 2000, the Partnership entered into
an agreement with the tenant of the Property in Ocala, Florida to sell the
Property to the tenant. In preparing for the sale of this Property, the
Partnership incurred $35,053 in environmental remediation costs. In accordance
with the American Institute of Certified Public Accountants' Statement of
Position 96-1 "Environmental Remediation Liabilities," the Partnership
capitalized these costs as land improvements. The Partnership anticipates that
it will incur approximately $75,000 in additional environmental remediation
costs related to this Property; however, the general partners believe that the
anticipated sales price will exceed the Partnership's total cost attributable to
the property. As of August 1, 2000, the sale had not occurred.
Currently, rental income from the Partnership's Properties and any net
sales proceeds from the sale of Properties are invested in money market accounts
or other short-term, highly liquid investments, such as demand deposit accounts
at commercial banks and certificates of deposit, with less than a 30-day
maturity date, pending the Partnership's use of such funds to pay Partnership
expenses or to make distributions to the partners. At June 30, 2000, the
Partnership had $1,360,932 invested in such short-term investments, as compared
to $904,715 at December 31, 1999. The increase in cash and cash equivalents was
primarily due to the receipt of net sales proceeds from the sale of the Property
in Jacksonville, Florida, as described above. The funds remaining at June 30,
2000, after payment of distributions and other liabilities, will be distributed
to the limited partners.
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.
Total liabilities of the Partnership, including distributions payable,
decreased to $731,184 at June 30, 2000 from $748,475 at December 31, 1999. The
general partners believe the Partnership has sufficient cash on hand to meet its
current working capital needs.
The Partnership generally distributes cash from operations remaining
after the payment of operating expenses of the Partnership, to the extent that
the general partners determine that such funds are available for distribution.
Based on current and anticipated future cash from operations, the Partnership
declared distributions to limited partners of $1,031,258 for each of the six
months ended June 30, 2000 and 1999 ($515,629 for each of the quarters ended
June 30, 2000 and 1999). This represents distributions for each applicable six
months of $20.63 per unit ($10.31 for each applicable quarter). No distributions
were made to the general partners for the quarters and six months ended June 30,
2000 and 1999. No amounts distributed to the limited partners for the six months
ended June 30, 2000 and 1999 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.
<PAGE>
Long-Term Liquidity
The Partnership has no long-term debt or other long-term liquidity
requirements.
Results of Operations
During the six months ended June 30, 1999, the Partnership owned and
leased 29 wholly owned Properties (which included two Properties which were sold
in 1999) to operators of fast-food and family-style restaurant chains. During
the six months ended June 30, 2000, the Partnership owned and leased 27 wholly
owned Properties (which included one Property which was sold in 2000) to
operators of fast-food and family-style restaurant chains. In connection
therewith, during the six months ended June 30, 2000 and 1999, the Partnership
earned $840,437 and $857,643, respectively, in rental income from these
Properties, $422,097 and $437,442 of which was earned during the quarters ended
June 30, 2000 and 1999, respectively. Rental income decreased during the quarter
and six months ended June 30, 2000, as compared to the quarter and six months
ended June 30, 1999, primarily as a result of the sales of two Properties in
1999 and one Property in 2000, as described above in "Capital Resources." Rental
income is expected to remain at reduced amounts while equity in earnings of
joint ventures is expected to remain at increased amounts due to the fact that
the Partnership reinvested the 1999 net sales proceeds of two Properties in a
joint venture, as described below.
In addition, rental income decreased partially due to the fact that
during the six months ended June 30, 2000, the Partnership increased its
allowance for doubtful accounts by approximately $19,800 for past due rental
amounts relating to its Property in Rock Springs, Wyoming in accordance with the
Partnership's policy. The general partners will continue to pursue collection of
past due rental amounts relating to this Property and will recognize such
amounts as income if collected. The general partners are currently seeking
either a new tenant or purchaser for this Property.
The decrease in rental income during the six months ended June 30,
2000, was partially offset by an increase in rental income due to the fact that
the Partnership collected and recognized as income approximately $11,800 in past
due rental amounts for which it had previously established an allowance for
doubtful accounts relating to its Property in Casper, Wyoming.
During the six months ended June 30, 2000 and 1999, the Partnership
earned $27,875 and $35,872, respectively, in interest and other income, $1,912
and $22,201 of which was earned during the quarters ended June 30, 2000 and
1999, respectively. Interest and other income was higher during the quarter and
six months ended June 30, 1999, primarily due to the fact that during such
periods the Partnership earned interest income on net sales proceeds received
from the sale of the Property in Columbia, Missouri in March 1999, pending the
reinvestment of the net sales proceeds in an additional Property in November
1999.
During the six months ended June 30, 2000 and 1999, the Partnership
also owned and leased three Properties indirectly through joint venture
arrangements and six Properties as tenants-in-common with affiliates of the
general partners. During the six months ended June 30, 2000, the Partnership
owned and leased one additional Property indirectly through a joint venture
arrangement. In connection therewith, during the six months ended June 30, 2000
and 1999, the Partnership earned $228,852 and $214,763, respectively, $101,779
and $107,524 of which was earned during the quarters ended June 30, 2000 and
1999, respectively. The increase in net income earned by joint ventures during
the six months ended June 30, 2000, as compared to the six months ended June 30,
1999, was primarily due to, and the decrease in net income earned by joint
ventures during the quarter ended June 30, 2000 as compared to the quarter ended
June 30, 1999, was partially offset by, the fact that in November 1999, the
Partnership invested the net sales proceeds it received from 1999 sales of two
Properties in Peoria Joint Venture.
In addition, the increase in net income earned by joint ventures during
the six months ended June 30, 2000 was partially offset by, and the decrease in
net income earned by joint ventures during the quarter ended June 30, 2000 was
primarily due to, the fact that in 1998, a tenant of a Property in which the
Partnership owns an approximate 58 percent interest filed for bankruptcy and,
during the quarter and six months ended June 30, 2000, rejected its lease
relating to the Property in Mesa, Arizona. As a result, this tenant discontinued
making rental payments on the rejected lease. In conjunction therewith, during
the quarter and six months ended June 30, 2000, the tenants-in-common
established an allowance for doubtful accounts of approximately $4,800 relating
to past due rental amounts and reversed approximately $31,500 of accrued rental
income. The accrued rental income was the accumulated amount of non-cash
accounting adjustments previously recorded in order to recognize future
scheduled rent increases as income evenly over the term of the lease. In July
2000, the tenants-in-common entered into a lease with a new tenant for the
Property in Mesa, Arizona.
Operating expenses, including depreciation and amortization, were
$338,051 and $346,183 during the six months ended June 30, 2000 and 1999,
respectively, of which $152,222 and $175,943 were incurred during the quarters
ended June 30, 2000 and 1999, respectively. The decrease in operating expenses
during the quarter and six months ended June 30, 2000 was primarily attributable
to the fact that the Partnership incurred less transaction costs during the
quarter and six months ended June 30, 2000, relating to the general partners
retaining financial and legal advisors to assist them in evaluating and
negotiating the proposed merger with CNL American Properties Fund, Inc. ("APF"),
due to the termination of the proposed merger, as described below in
"Termination of Merger."
The decrease in operating expenses during the quarter and six months
ended June 30, 2000, as compared to the quarter and six months ended June 30,
1999, was partially offset by an increase in administrative expenses for
servicing the Partnership and its Properties and an increase in bad debt expense
and repair and maintenance costs relating to its Property in Rock Springs,
Wyoming. The payment of repairs and maintenance relating to this Property
remains the responsibility of the tenant; however, because of the financial
difficulties the tenant is experiencing, the general partners believe the
tenant's ability to pay these expenses is doubtful. The Partnership intends to
pursue collection of any such amounts unpaid by the tenant and will recognize
such amounts as income if collected.
The increase in operating expenses during the quarter and six months
ended June 30, 2000, was partially offset by a decrease in depreciation expense
due to the sales of the Properties in Columbia, Missouri in March 1999 and
Littleton, Colorado in November 1999.
As a result of the sale of the Property in Jacksonville, Florida
described above in "Capital Resources," the Partnership recognized a gain of
$249,969 for financial reporting purposes during the quarter and six months
ended June 30, 2000. As a result of the sale of the Property in Columbia,
Missouri, the Partnership recognized a gain of $192,752 for financial reporting
purposes during the six months ended June 30, 1999.
Termination of Merger
On March 1, 2000, the general partners and APF mutually agreed to
terminate the Agreement and Plan of Merger (the "Merger") entered into in March
1999. The general partners are continuing to evaluate strategic alternatives for
the Partnership, including alternatives to provide liquidity to the limited
partners.
Dismissal of Legal Action
As described in greater detail in Part II, Item 1. "Legal Proceedings,"
in 1999, two groups of limited partners in several CNL Income Funds filed
purported class action suits against the general partners and APF alleging,
among other things, that the general partners had breached their fiduciary
duties in connection with the proposed Merger. These actions were later
consolidated into one action. On April 25, 2000, the judge in the consolidated
action issued an order dismissing the action without prejudice, with each party
to bear its own costs and attorneys' fees.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
On May 11, 1999, four limited partners in several CNL Income Funds
served a derivative and purported class action lawsuit filed April
22, 1999 against the general partners and APF in the Circuit Court
of the Ninth Judicial Circuit of Orange County, Florida, alleging
that the general partners breached their fiduciary duties and
violated provisions of certain of the CNL Income Fund partnership
agreements in connection with the proposed merger. The plaintiffs
sought unspecified damages and equitable relief. On July 8, 1999,
the plaintiffs filed an amended complaint which, in addition to
naming three additional plaintiffs, included allegations of aiding
and abetting and conspiring to breach fiduciary duties, negligence
and breach of duty of good faith against certain of the defendants
and sought additional equitable relief. As amended, the caption of
the case was Jon Hale, Mary J. Hewitt, Charles A. Hewitt, Gretchen
M. Hewitt, Bernard J. Schulte, Edward M. and Margaret Berol Trust,
and Vicky Berol v. James M. Seneff, Jr., Robert A. Bourne, CNL
Realty Corporation, and CNL American Properties Fund, Inc., Case
No. CIO-99-0003561.
On June 22, 1999, a limited partner of several CNL Income Funds
served a purported class action lawsuit filed April 29, 1999
against the general partners and APF, Ira Gaines, individually and
on behalf of a class of persons similarly situated, v. CNL
American Properties Fund, Inc., James M. Seneff, Jr., Robert A.
Bourne, CNL Realty Corporation, CNL Fund Advisors, Inc., CNL
Financial Corporation a/k/a CNL Financial Corp., CNL Financial
Services, Inc. and CNL Group, Inc., Case NO. CIO-99-3796, in the
Circuit Court of the Ninth Judicial Circuit of Orange County,
Florida, alleging that the general partners breached their
fiduciary duties and that APF aided and abetted their breach of
fiduciary duties in connection with the proposed merger. The
plaintiff sought unspecified damages and equitable relief.
On September 23, 1999, Judge Lawrence Kirkwood entered an order
consolidating the two cases under the caption In re: CNL Income
Funds Litigation, Case No. 99-3561. Pursuant to this order, the
plaintiffs in these cases filed a consolidated and amended
complaint on November 8, 1999. On December 22, 1999, the general
partners and CNL Group, Inc. filed motions to dismiss and motions
to strike. On December 28, 1999, APF and CNL Fund Advisors, Inc.
filed motions to dismiss. On March 6, 2000, all of the defendants
filed a Joint Notice of Filing Form 8-K Reports and Suggestion of
Mootness.
On April 25, 2000, Judge Kirkwood issued a Stipulated Final Order
of Dismissal of Consolidated Action, dismissing the action without
prejudice, with each party to bear its own costs and attorneys'
fees.
Item 2. Changes in Securities. Inapplicable.
Item 3. Defaults 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 Certificate of Limited Partnership of CNL Income Fund
II, Ltd. (Included as Exhibit 3.1 to Amendment No. 1 to
Registration Statement No. 33-10351 on Form S-11 and
incorporated herein by reference.)
3.2 Amended and Restated Agreement and Certificate of
Limited Partnership of CNL Income Fund II, Ltd.
(Included as Exhibit 3.2 to Form 10-K filed with the
Securities and Exchange Commission on April 2, 1993,
and incorporated herein by reference.)
4.1 Certificate of Limited Partnership of CNL Income Fund
II, Ltd. (Included as Exhibit 4.1 to Amendment No. 1 to
Registration Statement No. 33-10351 on Form S-11 and
incorporated herein by reference.)
4.2 Amended and Restated Agreement and Certificate of
Limited Partnership of CNL Income Fund II, Ltd.
(Included as Exhibit 3.2 to Form 10-K filed with the
Securities and Exchange Commission on April 2, 1993,
and incorporated herein by reference.)
10.1 Property Management Agreement (Included as Exhibit 10.1
to Form 10-K filed with the Securities and Exchange
Commission on April 2, 1993, and incorporated herein by
reference.)
10.2 Assignment of Property Management Agreement from CNL
Investment Company to CNL Income Fund Advisors, Inc.
(Included as Exhibit 10.2 to Form 10-K filed with the
Securities and Exchange Commission on March 30, 1995,
and incorporated herein by reference.)
10.3 Assignment of Property Management Agreement from CNL
Income Fund Advisors, Inc. to CNL Fund Advisors, Inc.
(Included as Exhibit 10.3 to Form 10-K filed with the
Securities and Exchange Commission on April 1, 1996 and
incorporated herein by reference.)
27 Financial Data Schedule (Filed herewith.)
<PAGE>
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended
June 30, 2000.
<PAGE>
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 10th day of August, 2000.
CNL INCOME FUND II, 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)
