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, 1998
-----------------------
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
0-17549
CNL Income Fund IV, Ltd.
(Exact name of registrant as specified in its charter)
Florida 59-2854435
(State or other jurisdiction (I.R.S. Employer
of incorporation or organiza- Identification No.)
tion)
400 E. South Street
Orlando, Florida 32801
- ---------------------------- -----------------
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number
(including area code) (407) 422-1574
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
Part I Page
Item 1. Financial Statements:
Condensed Balance Sheets 1
Condensed Statements of Income 2
Condensed Statements of Partners' Capital 3
Condensed Statements of Cash Flows 4
Notes to Condensed Financial Statements 5-8
Item 2. Management's Discussion and Analysis
of Financial Condition and
Results of Operations 9-13
Part II
Other Information 14
<PAGE>
CNL INCOME FUND IV, LTD.
(A Florida Limited Partnership)
CONDENSED BALANCE SHEETS
June 30, December 31,
ASSETS 1998 1997
----------- --------
Land and buildings on operating
leases, less accumulated
depreciation and allowance
for loss on land and building $16,563,159 $18,097,997
Net investment in direct
financing leases 1,250,921 1,269,389
Investment in joint ventures 2,441,566 2,708,012
Cash and cash equivalents 700,653 876,452
Receivables, less allowance for
doubtful accounts of $296,161
and $295,580 27,976 37,669
Prepaid expenses 14,659 11,115
Lease costs, less accumulated
amortization of $19,980 and
$17,956 19,564 21,588
Accrued rental income 280,114 287,466
Other assets 200 200
----------- -----------
$21,298,812 $23,309,888
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 4,992 $ 8,576
Accrued construction costs payable - 250,000
Accrued and escrowed real estate
taxes payable 61,023 65,176
Distributions payable 600,000 690,000
Due to related parties 142,926 93,854
Rents paid in advance and deposits 58,723 49,983
----------- -----------
Total liabilities 867,664 1,157,589
Partners' capital 20,431,148 22,152,299
----------- -----------
$21,298,812 $23,309,888
=========== ===========
See accompanying notes to condensed financial statements.
1
<PAGE>
CNL INCOME FUND IV, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
June 30, June 30,
1998 1997 1998 1997
-------- -------- ---------- -------
<S> <C>
Revenues:
Rental income from
operating leases $511,225 $501,859 $1,051,001 $1,050,111
Earned income from direct
financing leases 31,872 32,784 63,981 65,780
Contingent rental income 15,546 20,661 37,207 44,604
Interest and other income 8,347 4,864 21,192 11,471
-------- -------- ---------- ----------
566,990 560,168 1,173,381 1,171,966
-------- -------- ---------- ----------
Expenses:
General operating and
administrative 41,090 36,751 75,715 79,666
Bad debt expense - 12,794 - 12,794
Professional services 26,397 8,864 32,645 14,090
Real estate taxes - 4,357 20,755 28,027
State and other taxes 106 134 15,747 16,451
Depreciation and amorti-
zation 107,626 113,231 222,777 226,462
-------- -------- ---------- ----------
175,219 176,131 367,639 377,490
-------- -------- ---------- ----------
Income Before Equity in
Earnings (Loss) of Joint
Ventures, Gain on Sale of
Land and Buildings and
Provision for Loss on Land
and Building 391,771 384,037 805,742 794,476
Equity in Earnings (Loss)
of Joint Ventures (191,062) 64,772 (148,888) 119,981
Gain on Sale of Land and
Buildings - - 120,915 -
Provision for Loss on Land
and Building (65,172) - (65,172) -
-------- -------- ---------- ---------
Net Income $135,537 $448,809 $ 712,597 $ 914,457
======== ======== ========== ==========
Allocation of Net Income:
General partners $ (66) $ 4,488 $ 2,417 $ 9,144
Limited partners 135,603 444,321 710,180 905,313
-------- -------- ---------- ----------
$135,537 $448,809 $ 712,597 $ 914,457
======== ======== ========== ==========
Net Income Per Limited
Partner Unit $ 2.26 $ 7.41 $ 11.84 $ 15.09
======== ======== ========== ==========
Weighted Average Number of
Limited Partner Units
Outstanding 60,000 60,000 60,000 60,000
======== ======== ========== ==========
</TABLE>
See accompanying notes to condensed financial statements.
2
<PAGE>
CNL INCOME FUND IV, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF PARTNERS' CAPITAL
Six Months Ended Year Ended
June 30, December 31,
1998 1997
---------------- --------
General partners:
Beginning balance $ 756,354 $ 446,657
Contribution - 294,000
Net income 2,417 15,697
----------- -----------
758,771 756,354
----------- -----------
Limited partners:
Beginning balance 21,395,945 22,450,974
Net income 710,180 1,704,971
Distributions ($40.56 and
$46.00 per limited
partner unit, respectively) (2,433,748) (2,760,000)
----------- -----------
19,672,377 21,395,945
----------- -----------
Total partners' capital $20,431,148 $22,152,299
=========== ===========
See accompanying notes to condensed financial statements.
3
<PAGE>
CNL INCOME FUND IV, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF CASH FLOWS
Six Months Ended
June 30,
1998 1997
----------- -------
Increase (Decrease) in Cash and Cash
Equivalents:
Net Cash Provided by Operating
Activities $ 1,154,124 $ 1,142,182
----------- -----------
Cash Flows from Investing
Activities:
Additions to land and build-
ings on operating leases (275,000) -
Proceeds from sale of land
and building 1,468,825 -
Other - 8,007
----------- -----------
Net cash provided by
investing activities 1,193,825 8,007
----------- -----------
Cash Flows from Financing
Activities:
Contributions from general
partner - 138,000
Distributions to limited
partners (2,523,748) (1,380,000)
----------- -----------
Net cash used in
financing activities (2,523,748) (1,242,000)
----------- -----------
Net Decrease in Cash and Cash
Equivalents (175,799) (91,811)
Cash and Cash Equivalents at
Beginning of Period 876,452 554,593
----------- -----------
Cash and Cash Equivalents at End of
Period $ 700,653 $ 462,782
=========== ===========
Supplemental Schedule of Non-Cash
Investing and Financing Activities:
Deferred real estate disposition
fees incurred and unpaid at
end of period $ 45,663 $ -
=========== ==========
Distributions declared and
unpaid at end of period $ 600,000 $ 690,000
=========== ===========
See accompanying notes to condensed financial statements.
4
<PAGE>
CNL INCOME FUND IV, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Six Months Ended June 30, 1998 and 1997
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, 1998, may not be indicative
of the results that may be expected for the year ending December 31,
1998. Amounts as of December 31, 1997, 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 the Form 10-K of
CNL Income Fund IV, Ltd. (the "Partnership")for the year ended December
31, 1997.
The general partners are in the process of analyzing the effects of the
consensus reached by the Financial Accounting Standards Board in EITF
98-9, entitled "Accounting for Contingent Rent in the Interim Financial
Periods," issued in May 1998. The general partners do not expect that
the conclusions reached in this consensus will have a material effect
on the Partnership's financial position or results of operations.
2. Land and Building on Operating Leases:
Land and buildings on operating leases consisted of the following at:
June 30, December 31,
1998 1997
Land $ 7,795,540 $ 8,328,572
Buildings 12,651,749 13,684,194
----------- -----------
20,447,289 22,012,766
Less accumulated
depreciation (3,748,621) (3,844,432)
----------- -----------
16,698,668 18,168,334
Less allowance for loss
on land and building (135,509) (70,337)
----------- -----------
$16,563,159 $18,097,997
=========== ===========
5
<PAGE>
CNL INCOME FUND IV, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1998 and 1997
2. Land and Building on Operating Leases - Continued:
In March 1998, the Partnership sold its property in Fort Myers,
Florida, to a third party for $842,100 and received net sales proceeds
of $794,690, resulting in a gain of $225,902 for financial reporting
purposes. This property was originally acquired by the Partnership in
December 1988 and had a cost of approximately $598,000 excluding
acquisition fees and miscellaneous acquisition expenses; therefore, the
Partnership sold the property for approximately $196,700 in excess of
its original purchase price.
In March 1998, the Partnership sold its property in Union Township,
Ohio, to a third party for $680,000 and received net sales proceeds of
$674,135, resulting in a loss of $104,987 for financial reporting
purposes.
In connection with the sale of the properties described above, the
Partnership incurred deferred, subordinated, real estate disposition
fees of $45,663 (see Note 4).
At June 30, 1998 and December 31, 1997, the Partnership recorded
provisions for losses on land and building in the amounts of $65,172
and $70,337 for financial reporting purposes for the property in
Leesburg, Florida. The allowance at December 31, 1997, represented the
difference between the property's carrying value at December 31, 1997
and the estimated net realizable value for this property based on an
anticipated sales price. The allowance at June 30, 1998, represents the
difference between (i) the property's carrying value at June 30, 1998,
and (ii) the net realizable value of the property based on the net
sales proceeds received in July 1998 from the sale of the property (see
Note 5).
3. Allocations and Distributions:
Generally, all net income and net losses of the Partnership, excluding
gains and losses from the sale of property, are allocated 99 percent to
the limited partners and one percent to the general partners.
Distributions of net cash flow are made 99 percent to the limited
partners and one percent to the general partners; provided, however,
that the one percent of net cash flow to be distributed to the general
partners is subordinated to receipt by the limited partners of an
aggregate, ten percent, cumulative, noncompounded annual return on
their adjusted capital contributions (the "10% Preferred Return").
6
<PAGE>
CNL INCOME FUND IV, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1998 and 1997
3. Allocations and Distributions - Continued:
Generally, net sales proceeds from the sale of properties, to the
extent distributed, will be distributed first to the limited partners
in an amount sufficient to provide them with their 10% Preferred
Return, plus the return of their adjusted capital contributions. The
general partners will then receive, to the extent previously
subordinated and unpaid, a one percent interest in all prior
distributions of net cash flow and a return of their capital
contributions. Any remaining sales proceeds will be distributed 95
percent to the limited partners and five percent to the general
partners. Any gain from the sale of a property is, in general,
allocated in the same manner as net sales proceeds are distributable.
Any loss from the sale of a property is, in general, allocated first,
on a pro rata basis, to partners with positive balances in their
capital accounts; and thereafter, 95 percent to the limited partners
and five percent to the general partners.
During the six months ended June 30, 1998 and 1997, the Partnership
declared distributions to the limited partners of $2,433,748 and
$1,380,000, respectively ($600,000 and $690,000 for the quarters ended
June 30, 1998 and 1997, respectively). This represents distributions
for the six months ended June 30, 1998 and 1997 of $40.56 and $23.00
per unit, respectively ($10.00 and $11.50 per unit for the quarters
ended June 30, 1998 and 1997, respectively). Distributions for the six
months ended June 30, 1998, includes $1,233,748 as a result of the
distribution of net sales proceeds from the sale of the properties in
Fort Myers, Florida and Union Township, Ohio. This amount was applied
toward the limited partners' 10% Preferred Return. No distributions
have been made to the general partners to date.
4. 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 10% Preferred
Return, plus their adjusted capital contributions. For the six months
ended June 30, 1998, the Partnership incurred $45,663 in deferred,
subordinated, real estate disposition fees as a result of the sales of
properties. No deferred, subordinated, real estate disposition fees
were incurred for the six months ended June 30, 1997.
7
<PAGE>
CNL INCOME FUND IV, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1998 and 1997
5. Subsequent Event:
In July 1998, the Partnership sold its Property in Leesburg, Florida,
to a third party for $565,000 and received net sales proceeds of
$529,288, resulting in a loss of $65,172 for financial reporting
purposes (see Note 2). The Partnership intends to reinvest the net
sales proceeds in a replacement property.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
CNL Income Fund IV, Ltd. (the "Partnership") is a Florida limited
partnership that was organized on November 18, 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 national and regional
fast-food and family-style 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,
1998, the Partnership owned 38 Properties, including interests in five
Properties owned by joint ventures in which the Partnership is a co-venturer and
one Property owned with affiliates as tenants-in-common.
Liquidity and Capital Resources
During the six months ended June 30, 1998 and 1997, 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 $1,154,124 and $1,142,182, respectively. The increase
in cash from operations for the six months ended June 30, 1998, is primarily a
result of changes in the Partnership's working capital.
Other sources and uses of capital included the following during the six
months ended June 30, 1998.
In July 1997, the Partnership entered into new leases for the
Properties in Portland and Winchester, Indiana, with a new tenant to operate the
Properties as Arby's restaurants. In connection therewith, the Partnership paid
a total of $250,000 in renovation costs during the six months ended June 30,
1998, which had been incurred and accrued as construction costs payable at
December 31, 1997.
In March 1998, the Partnership sold its Property in Fort Myers,
Florida, to a third party for $842,100 and received net sales proceeds of
$794,690, resulting in a gain of $225,902 for financial reporting purposes. This
Property was originally acquired by the Partnership in December 1988 and had a
cost of approximately $598,000, excluding acquisition fees and miscellaneous
acquisition expenses; therefore, the Partnership sold the Property for
approximately $196,700 in excess of its original purchase price. In addition, in
March 1998, the Partnership sold its Property in Union Township, Ohio, to an
unrelated third party for $680,000 and received net sales proceeds of $674,135,
resulting in a loss of $104,987 for financial reporting purposes.
9
<PAGE>
Liquidity and Capital Resources - Continued
In connection with the sale of these Properties, the Partnership incurred
deferred, subordinated, real estate disposition fees of $45,663. In April 1998,
the Partnership distributed $1,233,748 of the net sales proceeds as a special
distribution of net sales proceeds from the sale of Properties to the limited
partners.
In addition, in July 1998, the Partnership sold its Property in
Leesburg, Florida for $565,000 and received net sales proceeds of $529,288,
resulting in a loss of $65,172 for financial reporting purposes. The Partnership
intends to reinvest the net sales proceeds in a replacement Property.
Currently, rental income from the Partnership's Properties and net
sales proceeds are invested in money market accounts and other short-term,
highly liquid investments pending the Partnership's use of such funds to pay
Partnership expenses or to make distributions to the partners. At June 30, 1998,
the Partnership had $700,653 invested in such short-term investments as compared
to $876,452 at December 31, 1997. The decrease in cash and cash equivalents
during the six months ended June 30, 1998, is primarily attributable to the
payment of construction costs accrued at December 31, 1997, relating to the
Partnership's Properties located in Winchester and Portland, Indiana, as
described above. The funds remaining at June 30, 1998, will be used toward the
payment of distributions and other liabilities.
Total liabilities of the Partnership, including distributions payable,
decreased to $867,664 at June 30, 1998, from $1,157,589 at December 31, 1997,
primarily as a result of the payment during the six months ended June 30, 1998,
of construction costs accrued at December 31, 1997 relating to the Partnership's
Properties located in Winchester and Portland, Indiana, as described above. The
decrease in total liabilities was also attributable to a decrease in
distributions payable to limited partners at June 30, 1998, as compared to
December 31, 1997. Total liabilities at June 30, 1998, to the extent they exceed
cash and cash equivalents at June 30, 1998, will be paid from future cash from
operations, and in the event the general partners elect to make additional
contributions, from future general partner contributions.
Based on current and anticipated future cash from operations and for
the six months ended June 30, 1998, net sales proceeds from the sale of the
Properties in Fort Myers, Florida, and Union Township, Ohio, and to a lesser
extent, for the six months ended June 30, 1997, additional capital contributions
from the corporate general partner received in April and July 1997, the
Partnership declared distributions to limited partners of $2,433,748 and
$1,380,000 for the six months ended June 30, 1998 and 1997, respectively
($600,000 and $690,000 for the quarters ended June 30, 1998 and 1997,
respectively). This represents distributions for the six months ended June 30,
1998 and 1997 of $40.56 and $23.00 per unit, respectively ($10.00 and $11.50 per
unit for the quarters
10
<PAGE>
Liquidity and Capital Resources - Continued
ended June 30, 1998 and 1997, respectively). Distributions for the six months
ended June 30, 1998, include $1,233,748 as a result of the distribution of net
sales proceeds from the sale of the Properties in Fort Myers, Florida and Union
Township, Ohio. This special distribution was effectively a return of a portion
of the limited partners' investment, although, in accordance with the
Partnership agreement, it was applied to the limited partners' unpaid preferred
return. As a result of the sale of the Properties, the Partnership's total
revenue was reduced, while the majority of the Partnership's operating expenses
remained fixed. Therefore, distributions of net cash flow were adjusted for the
six months ended June 30, 1998. No distributions were made to the general
partners for the quarters and six months ended June 30, 1998 and 1997. No
amounts distributed to the limited partners for the six months ended June 30,
1998 and 1997, 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.
The Partnership's investment strategy of acquiring Properties for cash
and generally 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.
Results of Operations
During the six months ended June 30, 1997, the Partnership owned and
leased 35 wholly owned Properties (including one Property in Douglasville,
Georgia, which was sold in November 1997), and during the six months ended June
30, 1998, the Partnership owned and leased 34 wholly owned Properties (including
two Properties, one in each of Union Township, Ohio and Fort Myers, Florida,
which were sold in March 1998), generally to operators of fast-food and
family-style restaurant chains. In connection therewith, during the six months
ended June 30, 1998 and 1997, the Partnership earned $1,114,982 and $1,115,891,
respectively, in rental income from operating leases and earned income from
direct financing leases from these Properties, $543,097 and $534,643 of which
was earned during the quarters ended June 30, 1998 and 1997, respectively. The
decrease in rental and earned income for the six months ended June 30, 1998 was
primarily due to the sales of the Properties in Douglasville, Georgia in
November 1997 and the sale of the Properties in Fort Myers, Florida and Union
Township, Ohio in March 1998. During the six months ended June 30, 1998, the
Partnership used the net sales proceeds from the sale of the Property in
Douglasville, Georgia, to fund renovation costs for two Properties
11
<PAGE>
Results of Operations - Continued
and for other Partnership purposes. Rental and earned income are expected to
remain at reduced amounts as a result of distributing the net sales proceeds
from the 1998 sales of the Properties in Fort Myers, Florida, and Union
Township, Ohio to the limited partners, as described above in "Liquidity and
Capital Resources."
The decrease in rental and earned income for the six months ended June
30, 1998 was partially offset by, and the increase in rental and earned income
for the quarter ended June 30, 1998 was primarily due to the fact that during
the quarter and six months ended June 30, 1997, the Partnership increased its
allowance for doubtful accounts for the Properties located in Palm Bay, Florida
and Portland and Winchester, Indiana due to financial difficulties the tenants
were experiencing. No such allowance was established during the quarter and six
months ended June 30, 1998, due to the fact that the Partnership re-leased these
Properties to new tenants for which rent commenced subsequent to June 30, 1997.
During the six months ended June 30, 1998 and 1997, the Partnership
also owned and leased five Properties indirectly through joint venture
arrangements and one Property as tenants-in-common with affiliates of the
general partners. In connection therewith, during the six months ended June 30,
1998 and 1997, the Partnership recognized a loss of $148,888 and income of
$119,981, respectively, attributable to net income and net loss earned by these
joint ventures, a loss of $191,062 and income of $64,772 of which was recognized
during the quarters ended June 30, 1998 and 1997, respectively. The decrease in
net income is primarily due to the fact that Kingsville Real Estate Joint
Venture (in which the Partnership owns a 68.87% interest in the profits and
losses of the joint venture) established an allowance for doubtful accounts of
approximately $50,800 and $65,900 during the quarter and six months ended June
30, 1998, respectively, in accordance with its collection policy. No such
allowance was established during the quarter and six months ended June 30, 1997.
In addition, during the quarter and six months ended June 30, 1998, the joint
venture established an allowance for loss on land and net investment in the
direct financing lease for its Property in Kingsville, Texas for approximately
$316,000. The allowance represents the difference between the Property's
carrying value at June 30, 1998 and the estimated net realizable value of the
Property. Kingsville Real Estate Joint Venture is currently seeking either a
replacement tenant or purchaser for this Property.
Operating expenses, including depreciation and amortization expense,
were $367,639 and $377,490 for the six months ended June 30, 1998 and 1997,
respectively, of which $175,219 and $176,131 were incurred for the quarters
ended June 30, 1998 and 1997, respectively.
12
<PAGE>
Results of Operations - Continued
As a result of the former tenant of the Property in Leesburg, Florida
defaulting under the terms of its lease in September 1994, the Partnership
incurred certain expenses, such as real estate taxes, insurance and maintenance
during the quarters and six months ended June 30, 1998 and 1997. The Partnership
sold this Property in July 1998, as described below.
During the quarter and six months ended June 30, 1998, the Partnership
recorded a provision for loss on land and building in the amount of $65,172 for
financial reporting purposes for the Property in Leesburg, Florida. The
allowance at June 30, 1998, represents the difference between the Property's
carrying value at June 30, 1998 and the net realizable value of the Property
based on the net sales proceeds received in July 1998 from the sale of the
Property.
As a result of the sales of the Properties in Fort Myers, Florida, and
Union Township, Ohio, the Partnership recognized a gain of $120,915 for
financial reporting purposes during the six months ended June 30, 1998. No
Properties were sold during the six months ended June 30, 1997.
The general partners are in the process of analyzing the effects of the
consensus reached by the Financial Accounting Standards Board in EITF 98-9,
entitled "Accounting for Contingent Rent in the Interim Financial Period,"
issued in May 1998. The general partners do not expect that the conclusions
reached in this consensus will have a material effect on the Partnership's
financial position or results of operations.
13
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. Inapplicable.
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 - None.
(b) No reports on Form 8-K were filed during the quarter
ended June 30, 1998.
14
<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 13th day of August, 1998.
CNL INCOME FUND IV, 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 IV, Ltd. at June 30, 1998, and its statement of income
for the six months then ended and is qualified in its entirety by reference to
the Form 10Q of CNL Income Fund IV, Ltd. for the six months ended June 30, 1998.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 700,653
<SECURITIES> 0
<RECEIVABLES> 324,137
<ALLOWANCES> 296,161
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 20,311,780
<DEPRECIATION> 3,748,621
<TOTAL-ASSETS> 21,298,812
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 20,431,148
<TOTAL-LIABILITY-AND-EQUITY> 21,298,812
<SALES> 0
<TOTAL-REVENUES> 1,173,381
<CGS> 0
<TOTAL-COSTS> 367,639
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 712,597
<INCOME-TAX> 0
<INCOME-CONTINUING> 712,597
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 712,597
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Due to the nature of its industry, CNL Income Fund IV, Ltd. has an
unclassified balance sheet; therefore, no values are shown above for current
assets and current liabilities.
</FN>
</TABLE>
