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, 2000
----------------------------------
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
0-16850
-------------------------------------
CNL Income Fund III, Ltd.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
Florida 59-2809460
- ------------------------------------------------------ ------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
<S> <C>
450 South Orange Avenue
Orlando, Florida 32801
- ------------------------------------------------------ ------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number
(including area code) (407) 540-2000
------------------------------------------------
</TABLE>
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
Condensed Statements of Income
Condensed Statements of Partners' Capital
Condensed Statements of Cash Flows
Notes to Condensed Financial Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About
Market Risk
Part II.
Other Information
<PAGE>
CNL INCOME FUND III, LTD.
(A Florida Limited Partnership)
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
<S> <C> ------------------- -------------------
ASSETS
Land and buildings on operating leases, less accumulated
depreciation of $2,844,057 and $2,771,519, respectively
$ 11,700,228 $ 11,772,766
Net investment in direct financing leases 1,116,096 1,120,608
Investment in joint ventures 2,405,619 2,418,036
Cash and cash equivalents 896,283 1,011,733
Receivables, less allowance for doubtful accounts
of $8,797 in 1999 10,105 658
Due from related parties -- 2,300
Prepaid expenses 3,395 5,896
Accrued rental income 127,076 111,167
Other assets 29,354 29,354
------------------- -------------------
$ 16,288,156 $ 16,472,518
=================== ===================
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 29,970 $ 76,247
Escrowed real estate taxes payable 10,223 12,872
Distributions payable 500,000 500,000
Due to related parties 135,447 121,781
Rents paid in advance 32,922 27,765
------------------- -------------------
Total liabilities 708,562 738,665
Minority interests 132,213 132,910
Partners' capital 15,447,381 15,600,943
------------------- -------------------
$ 16,288,156 $ 16,472,518
=================== ===================
See accompanying notes to condensed financial statements
</TABLE>
<PAGE>
CNL INCOME FUND III, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Quarter Ended
March 31,
2000 1999
<S> <C> -------------- ---------------
Revenues:
Rental income from operating leases $ 385,159 $ 382,878
Earned income from direct financing leases 31,701 43,968
Contingent rental income 21,728 2,981
Interest and other income 18,691 16,470
-------------- ---------------
457,279 446,297
-------------- ---------------
Expenses:
General operating and administrative 34,203 34,722
Professional services 9,308 3,288
State and other taxes 12,084 12,617
Depreciation and amortization 72,538 69,280
Transaction costs 26,659 30,882
-------------- ---------------
154,792 150,789
-------------- ---------------
Income Before Minority Interest in Income of
Consolidated Joint Venture and Equity in Earnings
of Unconsolidated Joint Ventures 302,487 295,508
Minority Interests in Income of Consolidated
Joint Venture (4,345 ) (4,345 )
Equity in Earnings of Unconsolidated Joint Ventures 48,296 41,459
-------------- ---------------
-------------- ---------------
Net Income $ 346,438 $ 332,622
============== ===============
Allocation of Net Income:
General partners $ 3,464 $ 3,326
Limited partners 342,974 329,296
-------------- ---------------
$ 346,438 $ 332,622
============== ===============
Net Income Per Limited Partner Unit $ 6.86 $ 6.59
============== ===============
Weighted Average Number of Limited Partner
Units Outstanding 50,000 50,000
============== ===============
See accompanying notes to condensed financial statements
</TABLE>
<PAGE>
CNL INCOME FUND III, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF PARTNERS' CAPITAL
<TABLE>
<CAPTION>
Quarter Ended Year Ended
March 31, December 31,
2000 1999
------------------- ------------------
<S> <C>
General partners:
Beginning balance $ 371,371 $ 354,638
Net income 3,464 16,733
------------------- ------------------
374,835 371,371
------------------- ------------------
Limited partners:
Beginning balance 15,229,572 15,515,634
Net income 342,974 1,713,938
Distributions ($10.00 and $40.00 per
limited partner unit, respectively) (500,000 ) (2,000,000 )
------------------- ------------------
15,072,546 15,229,572
------------------- ------------------
Total partners' capital $ 15,447,381 $ 15,600,943
=================== ==================
See accompanying notes to condensed financial statements
</TABLE>
<PAGE>
CNL INCOME FUND III, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Quarter Ended
March 31,
2000 1999
--------------- --------------
<S> <C>
Increase (Decrease) in Cash and Cash Equivalents
Net Cash Provided by Operating Activities $ 389,592 $ 442,021
--------------- --------------
Cash Flows from Investing Activities:
Additions to land and building on operating
lease -- (326,996 )
Investment in direct financing lease -- (612,920 )
--------------- --------------
Net cash used in investing activities -- (939,916 )
--------------- --------------
Cash Flows from Financing Activities:
Distributions to limited partners (500,000 ) (500,000 )
Distributions to holders of minority interests (5,042 ) (4,990 )
--------------- --------------
Net cash used in financing activities (505,042 ) (504,990 )
--------------- --------------
Net Decrease in Cash and Cash Equivalents (115,450 ) (1,002,885 )
Cash and Cash Equivalents at Beginning of Quarter 1,011,733 2,047,140
--------------- --------------
Cash and Cash Equivalents at End of Quarter $ 896,283 $1,044,255
=============== ==============
Supplemental Schedule of Non-Cash Financing
Activities:
Distributions declared and unpaid at end of
quarter $ 500,000 $ 500,000
=============== ==============
See accompanying notes to condensed financial statements
</TABLE>
<PAGE>
13
CNL INCOME FUND III, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters Ended March 31, 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 ended March 31, 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 III, Ltd. (the "Partnership") for the year ended December
31, 1999.
The Partnership accounts for its 69.07% interest in Tuscawilla Joint
Venture using the consolidation method. Minority interests represents
the minority joint venture partners' proportionate share of the equity
in the Partnership's consolidated joint venture. All significant
intercompany accounts and transactions have been eliminated.
2. Concentration of Credit Risk:
The following schedule presents total rental and earned income from
individual lessees, each representing more than ten percent of the
Partnership's total rental and earned income (including the Partnership's
share of total rental and earned income from joint ventures and the
properties held as tenants-in-common with affiliates of the general
partners) for at least one of the quarters ended March 31:
2000 1999
------------------- --------------------
Golden Corral Corporation $ 80,510 $ 80,510
IHOP Properties, Inc. 70,189 N/A
<PAGE>
CNL INCOME FUND III, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters Ended March 31, 2000 and 1999
2. Concentration of Credit Risk-Continued:
In addition, the following schedule presents total rental and earned
income from individual restaurant chains, each representing more than ten
percent of the Partnership's total rental and earned income (including
the Partnership's share of total rental and earned income from joint
ventures and the properties held as tenant-in-common with affiliates of
the general partners) for at least one of the quarters ended March 31:
2000 1999
---------------- ----------------
Golden Corral Family
Steakhouse Restaurants
$ 108,004 $ 107,972
IHOP 70,189 N/A
Pizza Hut 67,134 62,468
KFC 62,568 52,283
The information denoted by N/A indicates that for each period presented,
the tenant or the chains did not represent more than ten percent of the
Partnership's total rental and earned income.
Although the Partnership's properties are geographically diverse
throughout the United States and the Partnership's lessees operate a
variety of restaurant concepts, default by any lessee or restaurant chain
contributing more than ten percent of the Partnership's revenues could
significantly impact the results of operations of the Partnership if the
Partnership is not able to re-lease the properties in a timely manner.
3. 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.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
CNL Income Fund III, Ltd. (the "Partnership") is a Florida limited
partnership that was organized on June 1, 1987 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 selected national and
regional fast-food 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, 2000, the Partnership owned 28
Properties, which included interests in three Properties owned by joint ventures
in which the Partnership is a co-venturer and four Properties owned with
affiliates as tenants-in-common.
Capital Resources
During the quarters ended March 31, 2000 and 1999, the Partnership
generated cash from operations (which includes cash received from tenants,
distributions from joint ventures, and interest and other income received, less
cash paid for expenses) of $389,592 and $442,021, respectively. The decrease in
cash from operations for the quarter ended March 31, 2000 was primarily a result
of changes in the Partnership's working capital.
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, certificates of deposit and money
market accounts 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 March 31, 2000, the Partnership had $896,283 invested in such
short-term investments, as compared to $1,011,733 at December 31, 1999. The
decrease in cash and cash equivalents was primarily attributable to the fact
that during the quarter ended March 31, 2000, the Partnership paid certain
liabilities from December 31, 1999. The funds remaining at March 31, 2000 after
payment of distributions and other liabilities will be used to meet the
Partnership's working capital and other needs.
Short Term Liquidity
The Partnership's 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 the Partnership
declared distributions to limited partners of $500,000 for each of the quarters
ended March 31, 2000 and 1999. This represents distributions of $10.00 per unit
for each applicable quarter. No distributions were made to the general partners
for the quarters ended March 31, 2000 and 1999. No amounts distributed to the
limited partners for the quarters ended March 31, 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.
Total liabilities of the Partnership, including distributions payable,
decreased to $708,562 at March 31, 2000 from $738,665 at December 31, 1999
primarily as a result of a decrease in accounts payable at March 31, 2000, as
compared to December 31, 1999. The general partners believe that the Partnership
has sufficient cash on hand to meet its current working capital needs.
Long-Term Liquidity
The Partnership has no long-term debt or other long-term
liquidity requirements.
Results of Operations
During the quarter ended March 31, 1999, the Partnership and its
consolidated joint venture, Tuscawilla Joint Venture, owned and leased 23 wholly
owned Properties (which included two Properties which were sold in 1999) and
during the quarter ended March 31, 2000, the Partnership and its consolidated
joint venture owned and leased 22 wholly owned Properties, to operators of
fast-food and family-style restaurant chains. In connection therewith, during
the quarters ended March 31, 2000 and 1999, the Partnership earned $416,860 and
$426,846, respectively, in rental income from operating leases and earned income
from direct financing leases from these Properties. Rental and earned income
decreased by approximately $55,200 during the quarter ended March 31, 2000, as
compared to the quarter ended March 31, 1999, as a result of the sale of two
Properties during 1999. The decrease was partially offset by an increase in
rental and earned income of approximately $45,500 due to the fact that during
January 1999 and October 1999, the Partnership reinvested the net sales proceeds
in two additional Properties.
During the quarters ended March 31, 2000 and 1999, the Partnership also
earned $21,728 and $2,981, respectively, in contingent rental income. Contingent
rental income was lower during the quarter ended March 31, 1999 due to the fact
that the Partnership adjusted estimated contingent rental amounts accrued at
December 31, 1998, to actual amounts during the quarter ended March 31 ,1999.
For the quarters ended March 31, 2000 and 1999, the Partnership owned
and leased three Properties indirectly through joint venture arrangements and
three Properties as tenants-in-common with affiliates of the general partners.
In addition, during the quarter ended March 31, 2000, the Partnership owned and
leased one additional Property as tenants-in-common with an affiliate of the
general partners. In connection therewith, during the quarters ended March 31,
2000 and 1999, the Partnership earned income of $48,296 and $41,459,
respectively, attributable to net income recorded by these joint ventures. The
increase in net income earned by joint ventures during the quarter ended March
31, 2000 was primarily attributable to the fact that in October 1999, the
Partnership reinvested a portion of the net sales proceeds from the sale of a
Property during 1999, in a Property in Baytown, Texas, with an affiliate of the
general partners as tenants-in common.
During the quarter ended March 31, 2000, two of the Partnership's
lessees, Golden Corral Corporation and IHOP Properties, Inc., each accounted for
more than ten percent of the Partnership's total rental and earned income
(including the Partnership's share of rental income from Properties owned by
joint ventures and Properties owned with affiliates of the general partners as
tenant-in-common). It is anticipated that during the remainder of 2000, each of
these lessees will continue to account for more than ten percent of the
Partnership's total rental and earned income to which the Partnership is
entitled under the terms of the leases. In addition, during the quarter ended
March 31, 2000, four restaurant chains, Golden Corral Family Steakhouse
Restaurants, IHOP, Pizza Hut and KFC, each accounted for more than ten percent
of the Partnership's total rental income (including the Partnership's share of
rental income from Properties owned by joint ventures and Properties owned with
affiliates of the general partners as tenants-in-common). It is anticipated that
these four restaurant chains each will continue to account for more than ten
percent of the total rental income under the terms of its leases during the
remainder of 2000. Any failure of these lessees or restaurant chains could
materially affect the Partnership's income if the Partnership is not able to
re-lease the Properties in a timely manner.
Operating expenses, including depreciation and amortization expense,
were $154,792 and $150,789 for the quarters ended March 31, 2000 and 1999,
respectively.
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
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 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.
<PAGE>
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
are seeking unspecified damages and equitable relief. On July 8,
1999, the plaintiffs filed an amended complaint which, in addition
to naming three additional plaintiffs, includes 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 seeks additional equitable relief. As amended, the
caption of the case is 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 is seeking 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 III, Ltd. (Included as Exhibit 3.1 to
Amendment No. 1 to the Registration Statement
No. 33-15374 on Form S-11 and incorporated
herein by reference.)
3.2 Amended and Restated Agreement and Certificate of
Limited Partnership of CNL Income Fund III, Ltd.
(Included as Exhibit 3.2 to Form 10-K filed with
the Securities and Exchange Commission on April
5, 1993, and incorporated herein by reference.)
4.1 Certificate of Limited Partnership of CNL Income
Fund III, Ltd. (Included as Exhibit 4.1 to
Amendment No. 1 to Registration Statement No.
33-15374 on Form S-11 and incorporated herein by
reference.)
4.2 Amended and Restated Agreement and Certificate of
Limited Partnership of CNL Income Fund III, Ltd.
(Included as Exhibit 3.2 to Form 10-K filed with
the Securities and Exchange Commission on April
5, 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 5,
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
A Current Report on Form 8-K dated February 23, 2000 was
filed on March 01, 2000, describing the Termination of the
proposed merger of the Partnership with and into a
subsidiary of CNL American Properties Fund, Inc.
<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 May, 2000.
CNL INCOME FUND III, 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)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
balance sheet of CNL Income Fund III, Ltd. at March 31, 2000, and its statement
of income for the three months then ended and is qualified in its entirety by
reference to the Form 10-Q of CNL Income Fund III, Ltd. for the three months
ended March 31, 2000.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 896,283
<SECURITIES> 0
<RECEIVABLES> 10,105
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 14,544,285
<DEPRECIATION> 2,844,057
<TOTAL-ASSETS> 16,288,156
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 15,447,381
<TOTAL-LIABILITY-AND-EQUITY> 16,288,156
<SALES> 0
<TOTAL-REVENUES> 457,279
<CGS> 0
<TOTAL-COSTS> 154,792
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 346,438
<INCOME-TAX> 0
<INCOME-CONTINUING> 346,438
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 346,438
<EPS-BASIC> 0
<EPS-DILUTED> 0
<FN>
<F1>Due to the nature of its industry, CNL Income Fund III, Ltd. has an
unclassified balance sheet;therefore, no values are shown above for current
assets and current liabilities.
</FN>
</TABLE>
