<PAGE>
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 September 30, 1999
-------------------------------------
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
0-19141
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CNL Income Fund V, Ltd.
----------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 59-2922869
- --------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
450 South Orange Avenue
Orlando, Florida 32801
- --------------------------- --------------------
(Address of principal (Zip Code)
executive offices)
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
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<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 5-9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10-19
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 19
Part II
Other Information 20-22
<PAGE>
CNL INCOME FUND V, LTD.
(A Florida Limited Partnership)
CONDENSED BALANCE SHEETS
September 30, December 31,
1999 1998
---------------- -------------
ASSETS
Land and buildings on operating leases, less
accumulated depreciation of $1,939,373
and $1,895,755 in 1999 and 1998,
respectively and allowance for loss on
land and buildings of $823,333 and
$653,851 in 1999 and 1998, respectively $ 9,406,144 $10,660,128
Net investment in direct financing leases 1,680,724 1,708,966
Investment in joint ventures 2,395,508 2,282,012
Mortgage notes receivable, less deferred
gain of $137,629 and $319,866 in 1999
and 1998, respectively 870,370 1,748,060
Cash and cash equivalents 2,285,305 352,648
Receivables, less allowance for doubtful
accounts of $140,966 and $141,505
in 1999 and 1998, respectively 17,811 87,490
Prepaid expenses 5,809 1,872
Accrued rental income 285,058 239,963
Other assets 54,346 54,346
----------- -----------
$17,001,075 $17,135,485
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable 115,298 $ 7,546
Accrued real estate taxes payable 10,426 10,361
Distributions payable 500,000 500,000
Due to related parties 304,583 228,448
Rents paid in advance 24,231 6,112
----------- -----------
Total liabilities 954,538 752,467
Commitments and Contingencies (Note 6)
Minority interest 81,558 155,916
Partners' capital 15,964,979 16,227,102
----------- -----------
$17,001,075 $17,135,485
=========== ===========
See accompanying notes to condensed financial statements.
1
<PAGE>
CNL INCOME FUND V, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
----------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues:
Rental income from operating leases $ 280,162 $ 297,826 $ 855,847 $ 909,332
Earned income from direct financing leases 45,547 50,326 137,147 152,669
Interest and other income 45,154 58,791 147,128 223,647
----------- --------- ---------- ----------
370,863 406,943 1,140,122 1,285,648
----------- --------- ---------- ----------
Expenses:
General operating and administrative 32,761 35,693 103,763 113,010
Bad debt expense -- -- -- 5,882
Professional services 12,772 3,235 31,354 13,314
Real estate taxes 8,816 10,138 25,303 26,558
State and other taxes -- -- 6,404 9,658
Depreciation 60,067 71,743 184,246 201,720
Transaction costs 44,344 -- 135,532 --
----------- --------- ---------- ----------
158,760 120,809 486,602 370,142
----------- --------- ---------- ----------
Income Before Minority Interest in Loss of
Consolidated Joint Venture, Equity in
Earnings of Unconsolidated Joint Ventures,
Gain on Sale of Land and Buildings and
Provision for Loss on Land and Buildings 212,103 286,134 653,520 915,506
Minority Interest in Loss of Consolidated Joint
Venture 65,186 3,955 74,358 13,405
Equity in Earnings of Unconsolidated Joint
Ventures 54,476 40,315 283,741 112,418
Gain on Sale of Land and Buildings 318 838 395,740 443,443
----------- --------- ---------- ----------
Provision for Loss on Land and Buildings (169,482) (120,508) (169,482) (273,141)
----------- --------- ---------- ----------
Net Income $ 162,601 $ 210,734 $1,237,877 $1,211,631
=========== ========= ========== ==========
Allocation of Net Income:
General partners $ 1,625 $ 179 $ 10,782 $ 6,534
Limited partners 160,976 210,555 1,227,095 1,205,097
----------- --------- ---------- ----------
$ 162,601 $ 210,734 $1,237,877 $1,211,631
=========== ========= ========== ==========
Net Income Per Limited Partner Unit $3.22 $4.21 $24.54 $24.10
=========== ========= ========== ==========
Weighted Average Number of Limited Partners
Units Outstanding 50,000 50,000 50,000 50,000
=========== ========= ========== ==========
</TABLE>
See accompanying notes to condensed financial statements.
2
<PAGE>
CNL INCOME FUND V, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF PARTNERS' CAPITAL
Nine Months Ended Year Ended
September 30, December 31,
1999 1998
------------------- ----------------
General partners:
Beginning balance $ 503,730 $ 493,982
Net income 10,782 9,748
------------------- ----------------
514,512 503,730
------------------- ----------------
Limited partners:
Beginning balance 15,723,372 18,026,552
Net income 1,227,095 1,535,147
Distributions ($30.00 and $76.77
per limited partner unit,
respectively) (1,500,000) (3,838,327)
------------------- ----------------
15,450,467 15,723,372
------------------- ----------------
Total partners' capital $15,964,979 $16,227,102
=================== ================
See accompanying notes to condensed financial statements.
3
<PAGE>
CNL INCOME FUND V, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF CASH FLOWS
Nine Months Ended
September 30,
1999 1998
------------- ------------
Increase (Decrease) in Cash and Cash
Equivalents
Net Cash Provided by Operating
Activities $ 1,268,379 $ 1,230,725
------------- ------------
Cash Flows from Investing Activities:
Proceeds from sale of land and
buildings 1,113,759 2,125,220
Additions to land and building on
operating lease -- (125,000)
Investment in joint venture -- (713,480)
Collections on mortgage notes
receivable 1,050,519 15,757
------------- ------------
Net cash provided by
investing activities 2,164,278 1,302,497
------------- ------------
Cash Flows from Financing Activities:
Distributions to limited partners (1,500,000) (3,413,327)
------------- ------------
Net cash used in financing
activities (1,500,000) (3,413,327)
------------- ------------
Net Increase (Decrease) in Cash and Cash
Equivalents 1,932,657 (880,105)
Cash and Cash Equivalents at Beginning of
Period 352,648 1,361,290
------------- ------------
Cash and Cash Equivalents at End of Period $ 2,285,305 $ 481,185
============= ============
Supplemental Schedule of Non-Cash Investing
and Financing Activities:
Deferred real estate disposition
fees incurred and unpaid at
end of period $ -- $ 65,400
============= ============
Distributions declared and unpaid
at end of period $ 500,000 $ 500,000
============= ============
See accompanying notes to condensed financial statements.
4
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CNL INCOME FUND V, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Nine Months Ended September 30, 1999 and 1998
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 nine
months ended September 30, 1999, may not be indicative of the results that
may be expected for the year ending December 31, 1999. Amounts as of
December 31, 1998, 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 V, Ltd. (the "Partnership") for the year ended December 31, 1998.
The Partnership accounts for its 66.5% interest in CNL/Longacre Joint
Venture using the consolidation method. Minority interest represents the
minority joint venture partner's proportionate share of the equity in the
Partnership's consolidated joint venture. All significant intercompany
accounts and transactions have been eliminated.
2. Land and Buildings on Operating Leases:
--------------------------------------
As of December 31, 1998, the Partnership had established an allowance for
loss on land and buildings of $653,851, for financial reporting purposes,
relating to the properties in Belding, Michigan and Daleville, Indiana and
the property in Lebanon, New Hampshire, owned by the Partnership's
consolidated joint venture, CNL/Longacre Joint Venture. During the quarter
ended September 30, 1999, CNL/Longacre Joint Venture increased its
allowance by $169,482 for the property in Lebanon, New Hampshire, based on
a change in the current estimate of net realizable value for the property.
The allowances represent the difference between the net carrying values of
properties at September 30, 1999 and current estimates of net realizable
values of these properties.
During the nine months ended September 30, 1999, the Partnership sold its
properties in Endicott and Ithaca, New York to the tenant for a total of
$1,125,000 and received net sales proceeds of $1,113,759 resulting in a
total gain of $213,503 for financial reporting purposes. These properties
were originally acquired by the Partnership in December 1989 and had costs
totaling approximately $942,600, excluding acquisition fees and
miscellaneous acquisition expenses; therefore, the Partnership sold these
properties for a total of approximately $171,200 in excess of their
original purchase prices.
5
<PAGE>
CNL INCOME FUND V, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Nine Months Ended September 30, 1999 and 1998
3. Investment in Joint Ventures:
----------------------------
In June 1999, Halls Joint Venture, in which the Partnership owns a 48.9%
interest, sold its property to the tenant in accordance with the purchase
option under the lease agreement for $891,915. This resulted in a gain to
the joint venture of approximately $239,300 for financial reporting
purposes. The property was originally contributed to Halls Joint Venture in
February 1990 and had a total cost of approximately $672,000, excluding
acquisition fees and miscellaneous acquisition expenses; therefore, the
joint venture sold the property for approximately $219,900 in excess of its
original purchase price. The following presents the combined, condensed
financial information for all of the Partnership's investments in joint
ventures at:
September 30, December 31,
1999 1998
--------------- ------------
Land and buildings on
operating leases, less
accumulated depreciation $4,170,068 $4,812,568
Net investment in direct
financing lease 811,050 817,525
Cash 24,423 17,992
Restricted cash 896,957 --
Receivables -- 5,168
Prepaid expenses 520 458
Accrued rental income 91,469 112,279
Liabilities 53,234 46,398
Partners' capital 5,941,253 5,719,592
Revenues 480,861 555,103
Gain on sale of property 239,336 --
Net income 647,656 454,922
The Partnership recognized income totaling $283,741 and $112,418 for the nine
months ended September 30, 1999 and 1998, respectively, from these joint
venture, $54,476 and $40,315 of which was earned during the quarters ended
September 30, 1999 and 1998, respectively.
6
<PAGE>
CNL INCOME FUND V, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Nine Months Ended September 30, 1999 and 1998
4. Mortgage Notes Receivable:
-------------------------
As of December 31, 1998, the Partnership had accepted two promissory notes
in connection with the sale of two of its properties. During the nine
months ended September 30, 1999, the Partnership collected the outstanding
balance of $1,043,770 relating to the promissory note accepted in
connection with the sale of the property in St. Cloud, Florida, and in
connection therewith, the Partnership recognized the remaining gain of
$181,610 relating to this property, in accordance with Statement of
Financial Accounting Standards No. 66, "Accounting for Sales of Real
Estate."
5. Related Party Transactions:
--------------------------
On September 1, 1999, CNL American Properties Fund, Inc. ("APF"), an
affiliate of the general partners, acquired CNL Fund Advisors, Inc.
("CFA"), an affiliate who provides certain services relating to management
of the Partnership and its properties pursuant to a management agreement
with the Partnership. As a result of this acquisition, CFA became a wholly
owned subsidiary of APF; however, the terms of the management agreement
between the Partnership and CFA remain unchanged and in effect.
6. Commitments and Contingencies:
-----------------------------
On March 11, 1999, the Partnership entered into an Agreement and Plan of
Merger with CNL American Properties Fund, Inc. ("APF"), pursuant to which
the Partnership would be merged with and into a subsidiary of APF (the
"Merger"). As consideration for the Merger, APF has agreed to issue
1,024,516 shares of its common stock, par value $0.01 per share (the "APF
Shares"). In order to assist the general partners in evaluating the
proposed merger consideration, the general partners retained Valuation
Associates, a nationally recognized real estate appraisal firm, to appraise
the Partnership's restaurant property portfolio. Based on Valuation
Associates' appraisal, the fair value of the Partnership's property
portfolio and other assets was $20,212,956 as of December 31, 1998. The APF
Shares are expected to be listed for trading on the New York Stock Exchange
concurrently with the consummation of the Merger, and therefore, would be
freely tradable at the option of the former limited partners. At a special
meeting of the partners that is expected to be held in the first quarter of
2000, limited partners holding in excess of 50% of the Partnership's
outstanding limited partnership interests must approve the Merger prior to
consummation of the transaction. If the limited partners at the special
meeting approve the Merger, APF will own the properties and other assets of
the Partnership. The general partners intend to recommend that the limited
partners of the Partnership approve the Merger. In connection with their
recommendation, the general partners will solicit the consent of the
limited partners at the special meeting. If the limited partners reject the
Merger, the Partnership will bear the portion of the transaction costs
based upon the percentage of "For" votes and the general partners will bear
the
7
<PAGE>
CNL INCOME FUND V, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Nine Months Ended September 30, 1999 and 1998
6. Commitments and Contingencies - (Continued):
-------------------------------------------
portion of such transaction costs based upon the percentage of "Against"
votes and abstentions.
On May 11, 1999, four limited partners in several of the CNL Income Funds
served a lawsuit against the general partners and APF in connection with
the proposed Merger. On July 8, 1999, the plaintiffs amended the complaint
to add three additional limited partners as plaintiffs. Additionally, on
June 22, 1999, a limited partner in certain of the CNL Income Funds served
a lawsuit against the general partners, APF, CNL Fund Advisors, Inc. and
certain of its affiliates in connection with the proposed Merger. On
September 23, 1999, the judge assigned to the two lawsuits entered an order
consolidating the two cases. Pursuant to this order, the plaintiffs in
these cases filed a consolidated and amended complaint on November 8, 1999.
The various defendants, including the general partners, have 45 days to
respond to that consolidated complaint. The general partners and APF
believe that the lawsuits are without merit and intend to defend vigorously
against the claims. See Part II - Item 1. Legal Proceedings.
7. Concentration of Credit Risk:
----------------------------
The following schedule presents total rental, earned, and mortgage interest
income from individual lessees, each representing more than ten percent of
the Partnership's rental, earned, and mortgage interest income (including
the Partnership's share of total rental and earned income from joint
ventures and properties held as tenants-in-common with affiliates) for at
least one of the nine months ended September 30:
1999 1998
-------- -------
Golden Corral Corporation $146,633 $146,633
Slaymaker Group, Inc. 138,175 139,005
In addition, the following schedule presents total rental, earned, and
mortgage interest income from individual restaurant chains, each
representing more than ten percent of the Partnership's rental, earned, and
mortgage interest income (including the Partnership's share of total rental
and earned income from joint ventures and properties held as tenants-in-
common with affiliates) for at least one of the nine months ended September
30:
1999 1998
-------- --------
Golden Corral $146,633 $146,633
Tony Roma's 138,175 139,005
8
<PAGE>
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 one of these lessees or restaurant
chains 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.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
CNL Income Fund V, Ltd. (the "Partnership") is a Florida limited
partnership that was organized on August 17, 1988, to acquire for cash, either
directly or through joint venture arrangements, both newly constructed and
existing restaurants, as well as land upon which restaurants were to be
constructed, 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
September 30, 1999, the Partnership owned 22 Properties, which included
interests in three Properties owned by joint ventures in which the Partnership
is a co-venturer and two Properties owned with affiliates of the general
partners as tenants-in-common.
Capital Resources
- -----------------
During the nine months ended September 30, 1999 and 1998, 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 $1,268,379 and $1,230,725, respectively. The increase
in cash from operations for the nine months ended September 30, 1999, was
primarily a result and changes in the Partnership's working capital.
Other sources and uses of capital included the following during the nine
months ended September 30, 1999.
During the nine months ended September 30, 1999, the Partnership sold its
Properties in Endicott and Ithaca, New York to the tenant for a total of
$1,125,000 and received net sales proceeds of $1,113,759 resulting in a total
gain of $213,503 for financial reporting purposes. These Properties were
originally acquired by the Partnership in December 1989 and had costs totalling
approximately $942,600, excluding acquisition fees and miscellaneous acquisition
expenses; therefore, the Partnership sold the Properties for approximately
$171,200 in excess of their original purchase prices. The general partners
expect to use the proceeds received from the sale of these Properties to
reinvest in additional Properties or to pay Partnership liabilities.
In June 1999, Halls Joint Venture, in which the Partnership owns a 48.9%
interest, sold its Property to the tenant in accordance with the option under
its lease agreement to purchase the Property, for $891,915, resulting in a gain
to the joint venture of approximately $239,300 for financial reporting purposes.
The property was originally contributed to Halls Joint Venture in February 1990
and had a total cost of approximately $672,000, excluding acquisition fees and
miscellaneous acquisition expenses; therefore, the joint venture sold the
Property for approximately $219,900 in excess of its original purchase price.
The general partners believe that the transaction, or a portion thereof,
relating to the sale of the Property owned by Halls Joint Venture and the
reinvestment of the proceeds will qualify as a like-kind exchange transaction
for federal income tax purposes.
10
<PAGE>
As of December 31, 1998, the Partnership had accepted two promissory notes
in connection with the sale of two of its Properties. During the nine months
ended September 30, 1999, the Partnership collected the outstanding balance of
$1,043,770 relating to the promissory note accepted in connection with the sale
of the Property in St. Cloud, Florida. The Partnership intends to reinvest the
amounts collected in an additional Property.
Currently, rental income from the Partnership's Properties, amounts
collected under its promissory notes, as described above, and net sales proceeds
held by the Partnership pending reinvestment in additional Properties, are
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, to make
distributions to the partners and, for net sales proceeds, to reinvest in
additional Properties. At September 30, 1999, the Partnership had $2,285,305
invested in such short-term investments, as compared to $352,648 at December 31,
1998. The increase in cash and cash equivalents at September 30, 1999, is
primarily attributable to the receipt of net sales proceeds relating to the
sales of the Properties in Endicott and Ithaca, New York, and the receipt of the
remaining outstanding balance of the mortgage note receivable as described
above. The funds remaining at September 30, 1999, will be used towards the
reinvestment in additional Properties and to pay distributions and other
liabilities.
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 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, and for the nine months
ended September 30, 1998, proceeds received from the sales of Properties, the
Partnership declared distributions to the limited partners of $1,500,000 and
$3,338,327 for the nine months ended September 30, 1999 and 1998, respectively,
($500,000 for each of the quarters ended September 30, 1999 and 1998). This
represents distributions for the nine months ended September 30, 1999 and 1998
of $30.00 and $66.77 per unit, respectively ($10.00 per unit for each of the
quarters ended September 30, 1999 and 1998). Distributions for the nine months
ended September 30, 1998 included $1,838,327 as a result of the distribution of
net sales proceeds from the sale of Properties. No distributions were made to
the general partners for the quarters and nine months ended September 30, 1999
and 1998. No amounts distributed to the limited partners for nine months ended
September 30, 1999 and 1998 are required to be or have been treated by the
Partnership as a return of capital for purposes of
11
<PAGE>
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 increased to $954,538 at September 30,
1999, from $752,467 at December 31, 1998, partially due to the Partnership
accruing transaction costs relating to the proposed merger with CNL American
Properties Fund, Inc. ("APF"), as described below. The increase in liabilities
is also partially a result of an increase in amounts due to related parties at
September 30, 1999, as compared to December 31, 1998. Liabilities at September
30, 1999, to the extent they exceed cash and cash equivalents at September 30,
1999 (excluding amounts held representing net sales proceeds from the sale of
Properties and collections under the promissory note, as described above), will
be paid from future cash from operations, or in the event the general partners
elect to make capital contributions, from future general partner contributions.
Long-Term Liquidity
- -------------------
The Partnership has no long-term debt or other long-term liquidity
requirements.
Results of Operations
- ---------------------
During the nine months ended September 30, 1998, the Partnership and its
consolidated joint venture, CNL/Longacre Joint Venture, owned and leased 22
wholly owned Properties (including two Properties which were sold during 1998),
and during the nine months ended September 30, 1999, the Partnership and
CNL/Longacre Joint Venture owned and leased 20 wholly owned Properties
(including two Properties which were sold in March 1999), to operators of fast-
food and family-style restaurant chains. In connection therewith, during the
nine months ended September 30, 1999 and 1998, the Partnership, and CNL/Longacre
Joint Venture earned $992,994 and $1,062,001, respectively, in rental income
from operating leases and earned income from direct financing leases, $325,709
and $348,152 of which was earned during the quarters ended September 30, 1999
and 1998, respectively. Rental and earned income decreased approximately $19,400
and $59,000 during the quarter and nine months ended September 30, 1999,
respectively, as compared to the quarter and nine months ended September 30,
1998, as a result of the sales of the Properties during 1999, and 1998.
Rental and earned income also decreased by approximately $3,900 and $12,800
during the quarter and nine months ended September 30, 1999, respectively, due
to the fact that in August 1998, the tenant of the Property in Daleville,
Indiana terminated its lease with the Partnership. The Partnership is currently
seeking a new tenant or purchaser for this Property.
The decrease in rental and earned income during the nine months ended
September 30, 1999, was partially offset by an increase of approximately $8,900
resulting from the Partnership entering into a new lease for the Property in
South Haven, Michigan during the nine months ended September 30, 1998.
12
<PAGE>
Rental and earned income during the quarters and nine months ended
September 30, 1999 and 1998 continued to remain at reduced amounts due to the
fact that the Partnership is not receiving rental income relating to the
Properties in Belding, Michigan and Lebanon, New Hampshire. Rental and earned
income are expected to remain at reduced amounts until such time as the
Partnership executes new leases or until the Properties are sold and the
proceeds from such sales are reinvested in additional Properties. The
Partnership is currently seeking new tenants or purchasers for these Properties
and the Property in Daleville, Indiana, as described above.
During the nine months ended September 30, 1999 and 1998, the Partnership
also owned and leased three Properties indirectly through joint venture
arrangements (including one Property in Halls Joint Venture which was sold in
June 1999) and two Properties as tenants-in-common with affiliates of the
general partners. In connection therewith, during the nine months ended
September 30, 1999 and 1998, the Partnership earned $283,741 and $112,418,
respectively, $54,476 and $40,315 of which was earned during the quarters ended
September 30, 1999 and 1998, respectively. The increase in net income earned by
these joint ventures during the nine months ended September 30, 1999, as
compared to the nine months ended September 30, 1998, was primarily attributable
to the fact that in June 1999, Halls Joint Venture, in which the Partnership
owns a 48.9% interest, recognized a gain of approximately $239,300 for financial
reporting purposes as a result of the sale of its Property, as described above
in "Capital Resources." Because the joint venture intends to reinvest the sales
proceeds in an additional Property, the Partnership does not anticipate that the
sale of the Property will have a material adverse effect on results of
operations of the Partnership. The increase during the quarter and nine months
ended September 30, 1999 was also attributable to the fact that in May 1998, the
Partnership reinvested net sales proceeds from the sale of the Property in
Tyler, Texas, in RTO Joint Venture with an affiliate of the general partners.
During the nine months ended September 30, 1999 and 1998, the Partnership
also earned $147,128 and $223,647, respectively, in interest and other income,
$45,154 and $58,791 of which were earned during the quarters ended September 30,
1999 and 1998, respectively. The decrease during the quarter and nine months
ended September 30, 1999 was partially attributable to a reduction in interest
earned on the mortgage note accepted in connection with the sale of the Property
located in St. Cloud, Florida due to the fact that the Partnership collected the
outstanding balance of the mortgage note during the nine months ended September
30, 1999, as described above in "Capital Resources." Interest and other income
was also lower during the quarter and nine months ended September 30, 1999,
partially due to the fact that during the quarter and nine months ended
September 30, 1998, the Partnership earned interest on the net sales proceeds
relating to the sale of the Properties in Tyler, Texas and Port Orange, Florida,
pending the reinvestment of the net sales proceeds in additional Properties. The
Partnership distributed the net sales proceeds from the sale of the Property in
Port Orange, Florida as a special distribution to the limited partners in April
1998, and in May 1998, and contributed the net sales proceeds from the sale of
the Property in Tyler, Texas, in RTO Joint Venture, a joint venture with an
affiliate of the general partners.
During the nine months ended September 30, 1999, two lessees, Golden Corral
Corporation and Slaymaker Group, Inc., and two restaurant chains contributed
more than ten percent of the Partnership's and its consolidated joint venture's
total rental, earned and mortgage interest income (including the Partnership's
share of the rental and earned income from the
13
<PAGE>
Properties owned by unconsolidated joint ventures and Properties owned with
affiliates of the general partners as tenants-in-common). As of September 30,
1999, Golden Corral Corporation was the lessee under leases relating to two
Golden Corral Family Steakhouse Restaurants ("Golden Corral") and Slaymaker
Group, Inc. was the lessee under a lease relating to one Tony Roma's Famous for
Ribs Restaurant. It is anticipated that, based on the minimum rental payments
required by the leases, that these lessees and restaurant chains will continue
to contribute more than ten percent of the Partnership's total rental, earned
and mortgage interest income for the remainder of 1999. Any failure of these
lessees 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 expense, were $486,602 and
$370,142 for the nine months ended September 30, 1999 and 1998, respectively, of
which $158,760 and $120,809 were incurred for the quarters ended September 30,
1999 and 1998, respectively. The increase in operating expenses during the
quarter and nine months ended September 30, 1999, as compared to the quarter and
nine months ended September 30, 1998, was primarily attributable to the fact
that the Partnership incurred $44,344 and $135,532 during the quarter and nine
months ended September 30, 1999, respectively, in transaction costs relating to
the general partners retaining financial and legal advisors to assist them in
evaluating and negotiating the proposed merger with APF, as described below. If
the limited partners reject the merger, the Partnership will bear the portion of
the transaction costs based on the percentage of "For" votes and the general
partners will bear the portion of the transaction costs based on the percentage
of "Against" votes and abstentions. The increase in operating expenses for the
quarter and nine months ended September 31, 1999, was partially offset by a
decrease in depreciation expense due to the sales of several Properties during
1999 and 1998.
Operating expenses were also higher during 1999 due to tenant defaults
during 1998 under the terms of the lease arrangements for the Properties in
Belding, Michigan; Daleville, Indiana; and Lebanon, New Hampshire. The
Partnership has incurred and expects to continue to incur operating expenses,
such as repairs and maintenance, insurance, and real estate tax expenses,
relating to these Properties, until the Properties are sold or re-leased to new
tenants.
As a result of the sale of the Properties in Myrtle Beach, South Carolina
and St. Cloud, Florida in 1995 and 1996, respectively, and recording the gains
from such sales using the installment method, the Partnership recognized gains
for financial reporting purposes of $182,237 and $2,621 during the nine months
ended September 30, 1999 and 1998, respectively, $318 and $838 of which were
recognized during the quarters ended September 30, 1999 and 1998, respectively.
The increase in the gain recognized during the nine months ended September 30,
1999, as compared to the nine months ended September 30, 1998, is due to the
fact that the Partnership collected the outstanding balance relating to the
promissory note collateralized by a Property in St. Cloud, Florida, as described
above in "Capital Resources," which resulted in the recognition of the remaining
deferred gain for financial reporting purposes.
As a result of the 1999 sales of the Properties, as described above in
"Capital Resources," and the 1998 sales of the Properties in Port Orange,
Florida and Tyler, Texas, the Partnership recognized total gains of $213,503 and
$440,822 for financial reporting purposes during the nine months ended September
30, 1999 and 1998, respectively.
14
<PAGE>
As of December 31, 1998, the Partnership had established an allowance for
loss on land and building of $221,897 for financial reporting purposes relating
to the Property in Lebanon, New Hampshire, owned by the Partnership's
consolidated joint venture, CNL/Longacre Joint Venture. During the quarter and
nine months ended September 30, 1999, the Partnership increased the allowance by
$169,482 for this Property. The allowance represents the difference between the
net carrying value of the Property at September 30, 1999 and the current
estimate of net realizable value of this Property. In addition, during the
quarter and nine months ended September 30, 1998, the Partnership established an
allowance for loss on land and building of $120,508 and $273,141, respectively,
for financial reporting purposes, relating to the Properties in Belding,
Michigan and Daleville, Indiana, which are vacant and which the Partnership has
not successfully re-leased. The loss represented the difference between the
Properties carrying values at September 30, 1998 and the current estimate of net
realizable values at September 30, 1998. No additional allowance was deemed
necessary for the quarter and nine months ended September 30, 1999 for these two
Properties
Proposed Merger
- ---------------
On March 11, 1999, the Partnership entered into an Agreement and Plan of
Merger with APF, pursuant to which the Partnership would be merged with and into
a subsidiary of APF (the "Merger"). As consideration for the Merger, APF has
agreed to issue 1,024,516 shares of its common stock, par value $0.01 per share
(the "APF Shares"). In order to assist the general partners in evaluating the
proposed merger consideration, the general partners retained Valuation
Associates, a nationally recognized real estate appraisal firm, to appraise the
Partnership's restaurant property portfolio. Based on Valuation Associates'
appraisal, the fair value of the Partnership's property portfolio and other
assets was $20,212,956 as of December 31, 1998. The APF Shares are expected to
be listed for trading on the New York Stock Exchange concurrently with the
consummation of the Merger, and therefore, would be freely tradable at the
option of the former limited partners. At a special meeting of the partners that
is expected to be held in the first quarter of 2000, limited partners holding in
excess of 50% of the Partnership's outstanding limited partnership interests
must approve the Merger prior to consummation of the transaction. If the limited
partners at the special meeting approve the Merger, APF will own the properties
and other assets of the Partnership. The general partners intend to recommend
that the limited partners of the Partnership approve the Merger. In connection
with their recommendation, the general partners will solicit the consent of the
limited partners at the special meeting. If the limited partners reject the
Merger, the Partnership will bear the portion of the transaction costs based
upon the percentage of "For" votes and the general partners will bear the
portion of such transaction costs based upon the percentage of "Against" votes
and abstentions.
On May 11, 1999, four limited partners in several of the CNL Income Funds
served a lawsuit against the general partners and APF in connection with the
proposed Merger. On July 8, 1999, the plaintiffs amended the complaint to add
three additional limited partners as plaintiffs. Additionally, on June 22, 1999,
a limited partner in certain of the CNL Income Funds served a lawsuit against
the general partners, APF, CNL Fund Advisors, Inc. and certain of its affiliates
in connection with the proposed Merger. On September 23, 1999, the judge
assigned to the two lawsuits entered an order consolidating the two cases.
Pursuant to this order, the plaintiffs in these cases filed a consolidated and
amended complaint on November 8, 1999. The various defendants, including the
general partners, have 45 days to respond to that consolidated complaint. The
general partners and APF believe that the lawsuits are without merit and intend
to defend vigorously against the claims. See Part II -Item 1. Legal Proceedings.
15
<PAGE>
Year 2000 Readiness Disclosure
- ------------------------------
Overview of Year 2000 Problem
The year 2000 problem concerns the inability of information and non-
information technology systems to properly recognize and process date sensitive
information beyond January 1, 2000. The failure to accurately recognize the year
2000 could result in a variety of problems from data miscalculations to the
failure of entire systems.
Information and Non-Information Technology Systems
The Partnership does not have any information or non-information technology
systems. The general partners and their affiliates provide all services
requiring the use of information and non-information technology systems pursuant
to a management agreement with the Partnership. The information technology
system of the general partners' affiliates consists of a network of personal
computers and servers built using hardware and software from mainstream
suppliers. The non-information technology systems of the affiliates are
primarily facility related and include building security systems, elevators,
fire suppressions, HVAC, electrical systems and other utilities. The affiliates
have no internally generated programmed software coding to correct, because
substantially all of the software utilized by the affiliates is purchased or
licensed from external providers. The maintenance of non-information technology
systems at the Partnership's restaurant properties is the responsibility of the
tenants of such properties in accordance with the terms of the Partnership's
leases.
The Y2K Team
In early 1998, the general partners and their affiliates formed a Year 2000
committee (the "Y2K Team") for the purpose of identifying, understanding and
addressing the various issues associated with the year 2000 problem. The Y2K
Team consists of the general partners and members from their affiliates,
including representatives from senior management, information systems,
telecommunications, legal, office management, accounting and property
management.
Assessing Year 2000 Readiness
The Y2K Team's initial step in assessing year 2000 readiness consisted of
identifying any systems that are date-sensitive and, accordingly, could have
potential year 2000 problems. The Y2K Team has conducted inspections, interviews
and tests to identify which of the systems used by the Partnership could have a
potential year 2000 problem.
The information system of the general partners' affiliates is comprised of
hardware and software applications from mainstream suppliers. Accordingly, the
Y2K Team has contacted and is evaluating documentation from the respective
vendors and manufacturers to verify the year 2000 compliance of their products.
The Y2K Team has also requested and is evaluating documentation from the non-
information technology systems providers of the affiliates.
In addition, the Y2K Team has requested and is evaluating documentation
from other companies with which the Partnership has material third party
relationships. Such third parties,
16
<PAGE>
in addition to the providers of information and non-information technology
systems, consist of the Partnership's transfer agent and financial institutions.
The Partnership depends on its transfer agent to maintain and track investor
information and its financial institutions for availability of cash.
As of September 30, 1999, the Y2K Team had received responses from
approximately 62 percent of the third parties. All of the responses were in
writing. Of the third parties responding, all indicated that they are currently
year 2000 compliant or will be year 2000 compliant prior to the year 2000.
Although the Y2K Team continues to receive positive responses from the companies
with which the Partnership has third party relationships regarding their year
2000 compliance, the general partners cannot be assured that the third parties
have adequately considered the impact of the year 2000.
In addition, the Y2K Team has requested documentation from the
Partnership's tenants. As of September 30, 1999, the Y2K Team had received
responses from approximately 50 percent of the tenants. All of the responses
were in writing. Of the tenant's responding, all indicated that they are
currently year 2000 compliant or will be year 2000 compliant prior to the year
2000. The general partners cannot be assured that the tenants have adequately
considered the impact of the year 2000. The Partnership has also instituted a
policy of requiring any new tenants to indicate that their systems are year 2000
compliant or are expected to be year 2000 compliant prior to the year 2000.
Achieving Year 2000 Compliance
The Y2K Team has identified and completed upgrades for its hardware
equipment that was not year 2000 compliant. In addition, the Y2K Team has
identified and completed upgrades of the software applications that were not
year 2000 compliant, although the general partners cannot be assured that the
upgrade solutions provided by the vendors have addressed all possible year 2000
issues.
The cost for these upgrades and other remedial measures is the
responsibility of the general partners and their affiliates. The general
partners do not expect that the Partnership will incur any costs in connection
with year 2000 remedial measures.
Assessing the Risks to the Partnership of Non-Compliance and Developing
Contingency Plans
Risk of Failure of Information and Non-Information Technology Systems Used by
the Partnership
The general partners believe that the reasonably likely worst case scenario
with regard to the information and non-information technology systems used by
the Partnership is the failure of one or more of these systems as a result of
year 2000 problems. Because the Partnership's major source of income is rental
payments under long-term triple-net leases, any failure of information or non-
information technology systems used by the Partnership is not expected to have a
material impact on the results of operations of the Partnership. Even if such
systems failed, the payment of rent under the Partnership's leases would not be
affected. In addition, the Y2K Team is expected to correct any Y2K problems
within the control of the general partners and their affiliates before the year
2000.
17
<PAGE>
The Y2K Team has determined that a contingency plan to address this risk is
not necessary at this time. However, if the Y2K Team identifies additional
risks associated with the year 2000 compliance of the information or non-
information technology systems used by the Partnership, the Y2K Team will
develop a contingency plan if deemed necessary at that time.
Risk of Inability of Transfer Agent to Accurately Maintain Partnership Records
The general partners believe that the reasonably likely worst case scenario
with regard to the Partnership's transfer agent is that the transfer agent will
fail to achieve year 2000 compliance of its systems and will not be able to
accurately maintain the records of the Partnership. This could result in the
inability of the Partnership to accurately identify its limited partners for
purposes of distributions, delivery of disclosure materials and transfer of
units. The Y2K Team has received certification from the Partnership's transfer
agent of its year 2000 compliance. Despite the positive response from the
transfer agent, the general partners cannot be assured that the transfer agent
has addressed all possible year 2000 issues.
The Y2K Team has developed a contingency plan pursuant to which the general
partners and their affiliates would maintain the records of the Partnership
manually, in the event that the systems of the transfer agent are not year 2000
compliant. The general partners and their affiliates would have to allocate
resources to internally perform the functions of the transfer agent. The general
partners do not anticipate that the additional cost of these resources would
have a material impact on the results of operations of the Partnership.
Risk of Loss of Short-Term Liquidity from Failure of Financial Institutions to
Achieve Year 2000 Compliance
The general partners believe that the reasonably likely worst case scenario
with regard to the Partnership's financial institutions is that some or all of
its funds on deposit with such financial institutions may be temporarily
unavailable. The Y2K Team has received responses from 93% of the Partnership's
financial institutions indicating that their systems are currently year 2000
compliant or are expected to be year 2000 compliant prior to the year 2000.
Despite the positive responses from the financial institutions, the general
partners cannot be assured that the financial institutions have addressed all
possible year 2000 issues. The loss of short-term liquidity could affect the
Partnership's ability to pay its expenses on a current basis. The general
partners do not anticipate that a loss of short-term liquidity would have a
material impact on the results of operations of the Partnership.
Based upon the responses received from the Partnership's financial
institutions and the inability of the Y2K Team to identify a suitable
alternative for the deposit of funds that is not subject to potential year 2000
problems, the Y2K Team has determined not to develop a contingency plan to
address this risk.
Risks of Late Payment or Non-Payment of Rent by Tenants
The general partners believe that the reasonably likely worst case scenario
with regard to the Partnership's tenants is that some of the tenants may make
rental payments late as the result of the failure of the tenants to achieve year
2000 compliance of their systems used in the
18
<PAGE>
payment of rent, the failure of the tenant's financial institutions to achieve
year 2000 compliance, or the temporary disruption of the tenants' businesses.
The Y2K Team is in the process of requesting responses from the Partnership's
tenants indicating the extent to which their systems are currently year 2000
compliant or are expected to be year 2000 compliant prior to the year 2000. The
general partners cannot be assured that the tenants have addressed all possible
year 2000 issues. The late payment of rent by one or more tenants would affect
the results of operations of the Partnership in the short-term.
The general partners are also aware of predictions that the year 2000
problem, if uncorrected, may result in a global economic crisis. The general
partners are not able to determine if such predictions are true. A widespread
disruption of the economy could affect the ability of the Partnership's tenants
to pay rent and, accordingly, could have a material impact on the results of
operations of the Partnership.
Because payment of rent is under the control of the Partnership's tenants,
the Y2K Team is not able to develop a contingency plan to address these risks.
In the event of late payment or non-payment of rent, the general partners will
assess the remedies available to the Partnership under its lease agreements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Partnership has provided a fixed rate mortgage note to a borrower. The
general partners believe that the estimated fair value of the mortgage note at
September 30, 1999 approximated the outstanding principal amount. The
Partnership is exposed to equity loss in the event of changes in interest rates.
The following table presents the expected cash flows of principal that are
sensitive to these changes.
Mortgage note
Fixed Rate
----------------
1999 $ 2,367
2000 997,096
2001 --
2002 --
2003 --
Thereafter --
----------------
$ 999,463
================
19
<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.
----------------------------------------------------
CIO990003561.
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.
--------------------------------------------------------
CIO993796, 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, and the various defendants, including the general partners,
have 45 days to respond to that consolidated complaint.
Item 2. Changes in Securities. Inapplicable.
----------------------
Item 3. Default upon Senior Securities. Inapplicable.
-------------------------------
Item 4. Submission of Matters to a Vote of Security Holders. Inapplicable.
----------------------------------------------------
Item 5. Other Information. Inapplicable.
------------------
20
<PAGE>
Item 6. Exhibits and Reports on Form 8K.
--------------------------------
(a) Exhibits
2.1 Agreement and Plan of Merger by and between the Registrant
and CNL American Properties Fund, Inc. ("APF") dated March
11, 1999, as amended June 4, 1999, and as amended October 27,
1999 (Filed as Appendix B to the Prospectus Supplement for
the Registrant, constituting a part of Amendment No. 3 to the
Registration Statement of APF on Form S4, File No. 33374329.)
3.1 Amended and Restated Affidavit and Certificate of Limited
Partnership of CNL Income Fund V, Ltd. (Included as Exhibit
3.1 to Form 10K filed with the Securities and Exchange
Commission on March 31, 1994, and incorporated herein by
reference.)
4.1 Amended and Restated Affidavit and Certificate of Limited
Partnership of CNL Income Fund V, Ltd. (Included as Exhibit
3.1 to Form 10K filed with the Securities and Exchange
Commission on March 31, 1994, and incorporated herein be
reference.)
4.2 Amended and Restated Certificate and Agreement of Limited
Partnership of CNL Income Fund V, Ltd. (Included as Exhibit
4.2 to Form 10K filed with the Securities and Exchange
Commission on March 31, 1994, and incorporated herein by
reference.)
10.1 Management Agreement (Included as Exhibit 10.1 to Form 10K
filed with the Securities and Exchange Commission on March
31, 1994, and incorporated herein by reference.)
10.2 Assignment of Management Agreement from CNL Investment
Company to CNL Income Fund Advisors, Inc. (Included as
Exhibit 10.2 to Form 10K filed with the Securities and
Exchange Commission on March 30, 1995, and incorporated
herein by reference.)
10.3 Assignment of Management Agreement from CNL Income Fund
Advisors, Inc. to CNL Fund Advisors, Inc. (Included as
Exhibit 10.3 to Form 10K filed with the Securities and
Exchange Commission on April 1, 1996, and incorporated herein
by reference.)
27 Financial Data Schedule (Filed herewith.)
21
<PAGE>
(b) Reports on Form 8K
No reports on Form 8K were filed during the quarter ended
September 30, 1999.
22
<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 November, 1999
CNL INCOME FUND V, 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)
23
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET OF CNL INCOME FUND V, LTD. AT SEPTEMBER 30, 1999, AND ITS STATEMENT OF
INCOME FOR THE NINE MONTHS THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO THE FORM 10-Q OF CNL INCOME FUND V, LTD. FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 2,285,305
<SECURITIES> 0
<RECEIVABLES> 158,777
<ALLOWANCES> 140,966
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 11,345,517
<DEPRECIATION> 1,939,373
<TOTAL-ASSETS> 17,001,075
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 15,964,979
<TOTAL-LIABILITY-AND-EQUITY> 17,001,075
<SALES> 0
<TOTAL-REVENUES> 1,140,122
<CGS> 0
<TOTAL-COSTS> 486,602
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,237,877
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,237,877
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,237,877
<EPS-BASIC> 0
<EPS-DILUTED> 0
<FN>
<F1>Due to the nature of its industry, CNL Income Fund V, Ltd. has an
unclassified balance sheet; therefore, no values are shown above for current
assets and current liabilities.
</FN>
</TABLE>
