FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT of 1934
For the quarterly period ended June 30, 2000
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OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT of 1934
For the transition period from _____________________ to _____________________
Commission file number
0-19141
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CNL Income Fund V, Ltd.
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(Exact name of registrant as specified in its charter)
Florida 59-2922869
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
450 South Orange Avenue
Orlando, Florida 32801-3336
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number
(including area code) (407) 540-2000
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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 5-6
Item 2. Management's Discussion and Analysis of Financial 7-11
Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 12
Part II
Other Information 13-14
<PAGE>
CNL INCOME FUND V, LTD.
(A Florida Limited Partnership)
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
------------------ -------------------
<S> <C>
ASSETS
Land and buildings on operating leases, less accumulated
depreciation of $2,002,785 and $1,998,386, respectively,
and allowance for loss on land and buildings of $516,049
and $962,161, respectively
$ 8,971,326 $ 9,208,302
Net investment in direct financing leases 1,650,276 1,670,966
Investment in joint ventures 2,504,887 2,534,850
Mortgage notes receivable, less deferred gain of $136,626 and
$137,303, respectively 864,024 868,309
Cash and cash equivalents 1,784,889 1,984,879
Receivables, less allowance for doubtful accounts
of $174,573 and $153,750, respectively 32,000 54,580
Prepaid expenses 7,827 4,458
Accrued rental income 326,164 300,090
Other assets 54,346 54,346
------------------ -------------------
$ 16,195,739 $ 16,680,780
================== ===================
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 21,678 $ 81,476
Accrued real estate taxes payable 5,058 4,201
Distributions payable 500,000 500,000
Due to related parties 416,085 348,888
Rents paid in advance 25,093 6,094
------------------ -------------------
Total liabilities 967,914 940,659
Minority interest 69,130 77,373
Partners' capital 15,158,695 15,662,748
------------------ -------------------
$ 16,195,739 $ 16,680,780
================== ===================
See accompanying notes to condensed financial statements.
<PAGE>
CNL INCOME FUND V, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF INCOME
Quarter Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
------------- ------------- ------------- ------------
Revenues:
Rental income from operating leases $ 283,099 $ 265,979 $ 537,669 $ 550,939
Earned income from direct financing leases 44,692 45,717 79,421 91,600
Contingent rental income 18,882 16,658 17,048 24,746
Interest and other income 31,058 43,320 81,608 101,974
------------- ------------- ------------- ------------
377,731 371,674 715,746 769,259
------------- ------------- ------------- ------------
Expenses:
General operating and administrative 43,570 34,888 85,775 71,002
Professional services 5,731 13,190 16,092 18,582
Bad debt expense -- -- 18,673 --
Real estate taxes 6,286 8,682 20,483 16,487
State and other taxes 379 447 6,744 6,404
Depreciation 57,060 60,067 115,462 124,179
Transaction costs 22,474 59,718 46,166 91,188
------------- ------------- ------------- ------------
135,500 176,992 309,395 327,842
------------- ------------- ------------- ------------
Income Before Minority Interest in Loss of
Consolidated Joint Venture, Equity in
Earnings of Unconsolidated Joint Ventures,
and Gain on Sale of Land and Buildings 242,231 194,682 406,351 441,417
Minority Interest in Loss of Consolidated Joint
Venture 3,540 4,787 8,243 9,172
Equity in Earnings of Unconsolidated Joint
Ventures 31,028 172,427 80,676 229,265
Gain on Sale of Land and Buildings 343 309 677 395,422
------------- ------------- ------------- ------------
Net Income $ 277,142 $ 372,205 $ 495,947 $ 1,075,276
============= ============= ============= ============
Allocation of Net Income:
General partners $ 2,772 $ 3,722 $ 4,960 $ 9,157
Limited partners 274,370 368,483 490,987 1,066,119
------------- ------------- ------------- ------------
$ 277,142 $ 372,205 $ 495,947 $ 1,075,276
============= ============= ============= ============
Net Income Per Limited Partner Unit $ 5.49 $ 7.37 $ 9.82 $ 21.32
============= ============= ============= ============
Weighted Average Number of Limited Partners
Units Outstanding 50,000 50,000 50,000 50,000
============= ============= ============= ============
See accompanying notes to condensed financial statements.
<PAGE>
CNL INCOME FUND V, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF PARTNERS' CAPITAL
Six Months Ended Year Ended
June 30, December 31,
2000 1999
----------------------- -----------------
General partners:
Beginning balance $ 514,026 $ 503,730
Net income 4,960 10,296
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518,986 514,026
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Limited partners:
Beginning balance 15,148,722 15,723,372
Net income 490,987 1,425,350
Distributions ($20.00 and $40.00 per
limited partner unit, respectively) (1,000,000 ) (2,000,000 )
----------------------- -----------------
14,639,709 15,148,722
----------------------- -----------------
Total partners' capital $ 15,158,695 $ 15,662,748
======================= =================
See accompanying notes to condensed financial statements.
<PAGE>
CNL INCOME FUND V, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF CASH FLOWS
Six Months Ended
June 30,
2000 1999
---------------- ---------------
Increase (Decrease) in Cash and Cash Equivalents
Net Cash Provided by Operating Activities $ 668,143 $ 879,145
---------------- ---------------
Cash Flows from Investing Activities:
Proceeds from sale of land and buildings 126,947 1,113,759
Collections on mortgage notes receivable 4,920 1,048,211
---------------- ---------------
Net cash provided by investing activities 131,867 2,161,970
---------------- ---------------
Cash Flows from Financing Activities:
Distributions to limited partners (1,000,000 ) (1,000,000 )
---------------- ---------------
Net cash used in financing activities (1,000,000 ) (1,000,000 )
---------------- ---------------
Net Increase (Decrease) in Cash and Cash Equivalents (199,990 ) 2,041,115
Cash and Cash Equivalents at Beginning of Period 1,984,879 352,648
---------------- ---------------
Cash and Cash Equivalents at End of Period $1,784,889 $2,393,763
================ ===============
Supplemental Schedule of Non-Cash Investing and
Financing Activities:
Deferred real estate disposition fees incurred
and unpaid at end of period $ 4,050 $ --
================ ===============
Distributions declared and unpaid at end
of period $ 500,000 $ 500,000
================ ===============
See accompanying notes to condensed financial statements.
</TABLE>
<PAGE>
CNL INCOME FUND V, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Six Months Ended June 30, 2000 and 1999
1. Basis of Presentation:
The accompanying unaudited condensed financial statements have been
prepared in accordance with the instructions to Form 10-Q and do not
include all of the information and note disclosures required by
generally accepted accounting principles. The financial statements
reflect all adjustments, consisting of normal recurring adjustments,
which are, in the opinion of management, necessary to a fair statement
of the results for the interim periods presented. Operating results for
the quarter and six months ended June 30, 2000 may not be indicative of
the results that may be expected for the year ending December 31, 2000.
Amounts as of December 31, 1999, included in the financial statements,
have been derived from audited financial statements as of that date.
These unaudited financial statements should be read in conjunction with
the financial statements and notes thereto included in Form 10-K of CNL
Income Fund V, Ltd. (the "Partnership") for the year ended December 31,
1999.
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.
Certain items in the prior year's financial statements have been
reclassified to conform to 2000 presentation. These reclassifications
had no effect on partners' capital or net income.
2. Land and Buildings on Operating Leases:
During the six months ended June 30, 2000, the Partnership sold its
property in Belding, Michigan, to a third party for $135,000 and
received net sales proceeds of approximately $126,900 resulting in a
loss of approximately $446,100 for financial reporting purposes. Due to
the fact that as of December 31, 1999, the Partnership had recorded an
allowance for loss on building of approximately $446,100, no gain or
loss was recorded for financial reporting purposes during the six
months ended June 30, 2000. In connection with the sale, the
Partnership incurred a deferred, subordinated, real estate disposition
fee of $4,050 (see Note 3).
<PAGE>
CNL INCOME FUND V, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Six Months Ended June 30, 2000 and 1999
3. Related Party Transactions:
An affiliate of the Partnership is entitled to receive a deferred,
subordinated real estate disposition fee, payable upon the sale of one
or more properties based on the lesser of one-half of a competitive
real estate commission or three percent of the sales price if the
affiliate provides a substantial amount of services in connection with
the sale. However, if the net sales proceeds are reinvested in a
replacement property, no such real estate disposition fees will be
incurred until such replacement property is sold and the net sales
proceeds are distributed. The 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. During the six months ended June 30, 2000, the
Partnership incurred a deferred, subordinated, real estate disposition
fee of $4,050 as a result of the sale of a property (see Note 2). No
deferred, subordinated, real estate disposition fees were incurred
during the quarter and six months ended June 30, 1999.
4. Termination of Merger:
On March 1, 2000, the general partners and CNL American Properties
Fund, Inc. ("APF") mutually agreed to terminate the Agreement and Plan
of Merger entered into in March 1999. The general partners are
continuing to evaluate strategic alternatives for the Partnership,
including alternatives to provide liquidity to the limited partners.
5. Subsequent Event:
In July 2000, Halls Joint Venture, in which the Partnership owned a
48.9% interest, was dissolved in accordance with the joint venture
agreement. As a result, the Partnership received approximately $440,700
representing its 48.9% share of the liquidation proceeds of the joint
venture. No gain or loss on dissolution of joint venture was recorded.
<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 June 30,
2000, the Partnership owned 22 Properties, which included interests in four
Properties owned by joint ventures in which the Partnership is a co-venturer and
two Properties owned with affiliates as tenants-in-common.
Capital Resources
During the six months ended June 30, 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). Cash from operations was $668,143 and $879,145 for the
six months ended June 30, 2000 and 1999, respectively. The decrease in cash from
operations for the six months ended June 30, 2000 was a result of changes in
income and expenses, as described in "Results of Operations" below, and changes
in the Partnership's working capital.
Other sources and uses of capital included the following during the six
months ended June 30, 2000.
During the six months ended June 30, 2000, the Partnership sold its
Property in Belding, Michigan to a third party for $135,000 and received net
sales proceeds of approximately $126,900 resulting in a loss of approximately
$446,100 for financial reporting purposes. Due to the fact that as of December
31, 1999, the Partnership had recorded an allowance for loss on building of
approximately $446,100, no gain or loss was recorded for financial reporting
purposes during the six months ended June 30, 2000. In connection with the sale,
the Partnership incurred a deferred, subordinated, real estate disposition fee
of $4,050. The Partnership intends to distribute the majority of the net sales
proceeds to the limited partners.
In July 2000, Halls Joint Venture, in which the Partnership owned a
48.9% interest, was dissolved in accordance with the joint venture agreement. As
a result, the Partnership received approximately $440,700 representing it's
48.9% share of the liquidations proceeds of the joint venture. No gain or loss
on dissolution of joint venture was recorded. The Partnership intends to use its
share of the proceeds to pay liabilities of the Partnership or to distribute to
the limited partners.
Currently, rental income from the Partnership's Properties and net
sales proceeds held by the Partnership are invested in money market accounts or
other short-term, highly liquid investments, such as demand deposit accounts at
commercial banks and certificates of deposit, with less than a 30-day maturity
date, pending the Partnership's use of such funds to pay Partnership expenses
and to make distributions to the partners. At June 30, 2000, the Partnership had
$1,784,889 invested in such short-term investments, as compared to $1,984,879 at
December 31, 1999. The funds remaining at June 30, 2000 will be used towards the
payment of distributions to the limited partners or 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 meet specified
financial standards minimizes the Partnership's operating expenses. The general
partners believe that the leases will continue to generate cash flow in excess
of operating expenses.
The general partners have the right, but not the obligation, to make
additional capital contributions if they deem it appropriate in connection with
the operations of the Partnership.
Total liabilities of the Partnership increased to $967,914 at June 30,
2000, from $940,659 at December 31, 1999, primarily due to an increase in
amounts due to related parties and an increase in rents paid in advance at June
30, 2000, as compared to December 31, 1999. The increase was partially offset by
a decrease in accounts payable at June 30, 2000, as compared to December 31,
1999. Liabilities at June 30, 2000, to the extent they exceed cash and cash
equivalents at June 30, 2000 (excluding amounts held representing net sales
proceeds from the sale of Properties and collections under the promissory note),
will be paid from future cash from operations, net sales proceeds from the sales
of Properties or in the event the general partners elect to make capital
contributions, from future general partner contributions.
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 the limited partners of $1,000,000 for each of the six
months ended June 30, 2000 and 1999 ($500,000 for each of the quarters ended
June 30, 2000 and 1999). This represents distributions of $20.00 per unit for
each of the six months ended June 30, 2000 and 1999 ($10.00 for each of the
quarters ended June 30, 2000 and 1999). No distributions were made to the
general partners for the quarters and six months ended June 30, 2000 and 1999.
No amounts distributed to the limited partners for the six months ended June 30,
2000 and 1999 are required to be or have been treated by the Partnership as a
return of capital for purposes of calculating the limited partners' return on
their adjusted capital contributions. The Partnership intends to continue to
make distributions of cash available for distribution to the limited partners on
a quarterly basis.
Long-Term Liquidity
The Partnership has no long-term debt or other long-term liquidity
requirements.
<PAGE>
Results of Operations
During the six months ended June 30, 1999, the Partnership and its
consolidated joint venture, CNL/Longacre Joint Venture, owned and leased 20
wholly owned Properties (which included two Properties which were sold in March
1999), and during the six months ended June 30, 2000, the Partnership and
CNL/Longacre Joint Venture owned and leased 18 wholly owned Properties
(including one Property which was sold in March 2000) to operators of fast-food
and family-style restaurant chains. In connection therewith, during the six
months ended June 30, 2000 and 1999, the Partnership and CNL/Longacre Joint
Venture earned $617,090 and $642,539, respectively, in rental income from
operating leases and earned income from direct financing leases, $327,791 and
$311,696 of which was earned during the quarters ended June 30, 2000 and 1999,
respectively. Rental and earned income decreased during the six months ended
June 30, 2000, as compared to the six months ended June 30, 1999, by
approximately $19,500 as a result of the sales of Properties during 1999 and
2000.
Rental and earned income also decreased during the six months ended
June 30, 2000 as compared to the six months ended June 30, 1999, by
approximately $10,200 due to the fact that the Partnership established an
allowance for doubtful accounts for past due rental amounts relating to the
Property in Huron, Ohio, in accordance with the Partnership's policy, The
general partners will continue to pursue collection of past due rental amounts
and will recognize such amounts as income if collected. The tenant vacated the
Property and discontinued operations and making rental payments to the
Partnership. The Partnership will not recognize any rental income relating to
this Property until such time as the Partnership executes a new lease or until
the Property is sold and the proceeds from such sale are reinvested in an
additional Property. The Partnership is currently seeking a new tenant or
purchaser for this Property.
Rental and earned income during the quarters and six months ended June
30, 2000 and 1999 remained at reduced amounts due to the fact that the
Partnership did not receive any rental income relating to the Properties in
Daleville, Indiana and Lebanon, New Hampshire. Rental, earned and contingent
rental 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 either new tenants or purchasers for these
Properties.
The increase in rental and earned income during the quarter ended June
30, 2000, was partially attributable to, and the decrease during the six months
ended June 30, 2000, was partially offset by, an increase of approximately
$23,000 and $11,600 during the quarter and six months ended June 30, 2000 due to
the fact that the Partnership collected and recognized as income past due rental
amounts for which the Partnership had previously established an allowance for
doubtful accounts, relating to its Properties in NewCastle, Indiana and Port
Orange, Florida.
During the six months ended June 30, 2000 and 1999, the Partnership
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, the Partnership earned $80,676 and $229,265, respectively,
$31,028 and $172,427 of which was earned during the quarters ended June 30, 2000
and 1999, respectively. The decrease in net income earned by these joint
ventures during the quarter and six months ended June 30, 2000, as compared to
the quarter and six months ended June 30, 1999, was primarily attributable to
the fact that in June 1999, Halls Joint Venture, in which the Partnership owned
a 48.9% interest, recognized a gain of approximately $239,300 for financial
reporting purposes as a result of the sale of its Property in June 1999. In July
2000, Halls Joint Venture was dissolved as discussed above in "Capital
Resources."
In addition, the decrease in net income earned by joint ventures during
the quarter and six months ended June 30, 2000 was partially attributable to the
fact that in 1998, a tenant of a Property in which the Partnership owns a 42.09%
interest with an affiliate of the general partners, as tenants-in-common, filed
for bankruptcy and, during the quarter and six months ended June 30, 2000
rejected the lease relating to the only Property leased by this tenant. As a
result, this tenant discontinued making rental payments on the rejected lease.
In conjunction with the rejected lease, during the quarter and six months ended
June 30, 2000, the tenants-in-common established an allowance for doubtful
accounts of approximately $4,800 relating to past due rental amounts and
reversed approximately $31,500 of accrued rental income. The accrued rental
income was the accumulated amount of non-cash accounting adjustments previously
recorded in order to recognize future scheduled rent increases as income evenly
over the term of the lease. The tenants-in-common will not recognize any rental
and earned income from this vacant Property until a new tenant for this Property
is located. The lost revenues resulting from the rejected and vacant Property
could have an adverse effect on the results of operation of the
tenants-in-common if the tenants-in-common is not able to release the Property
in a timely manner. The tenants-in-common is currently seeking a new tenant for
the rejected and vacant Property.
During the six months ended June 30, 2000 and 1999, the Partnership
earned $81,608 and $101,974, respectively, in interest and other income, $31,058
and $43,320 of which was earned during the quarters ended June 30, 2000 and
1999, respectively. The decrease in interest and other income during the quarter
and six months ended June 30, 2000, as compared to the quarter and six months
ended June 30, 1999, was primarily attributable to the fact that during the
quarter and six months ended June 30, 1999, the Partnership collected the
outstanding balance relating to the promissory note the Partnership accepted in
connection with the sale of its Property in St. Cloud, Florida in 1996.
Operating expenses, including depreciation expense, were $309,395 and
$327,842 for the six months ended June 30, 2000 and 1999, respectively, of which
$135,500 and $176,992 were incurred for the quarters ended June 30, 2000 and
1999, respectively. Operating expenses decreased during the quarter and six
months ended June 30, 2000, partially due to the fact that the Partnership
incurred less transaction costs during the quarter and six months ended June 30,
2000, related to the general partners retaining financial and legal advisors to
assist them in evaluating and negotiating the proposed merger with CNL American
Properties Fund, Inc. ("APF") due to the termination of the proposed merger, as
described below in "Termination of Merger." In addition, the decrease during the
quarter and six months ended June 30, 2000 was partially attributable to a
decrease in depreciation expense as a result of the sale of two properties in
1999, and one Property in January 2000.
The decrease in operating expenses during the six months ended June 30,
2000 was partially offset by the fact that the Partnership recorded
approximately $18,100 in bad debt expense and accrued approximately $5,400 in
real estate tax expense relating to the Property in Huron, Ohio, for which the
tenant vacated the Property and discontinued making rental payments, as
described above. The Partnership expects to continue to incur operating expenses
such as repairs and maintenance, insurance and real estate tax expense, relating
to this Property until the Property is sold or re-leased to a new tenant. The
Partnership is currently seeking a new tenant or purchaser for this property. In
addition, the decrease in operating expenses during the quarter and six months
ended June 30, 2000, was partially offset by an increase in administrative
expenses for servicing the Partnership and its Properties.
Due to tenant defaults under the terms of their lease agreements for
the Properties in Daleville, Indiana, and Lebanon, New Hampshire, the
Partnership and its consolidated joint venture, CNL/Longacre Joint Venture, have
incurred and expect 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. The
Partnership is currently seeking new tenants or purchasers for these Properties.
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 $677 and $181,919 during
the six months ended June 30, 2000 and 1999, respectively, $343 and $309 of
which were recognized during the quarters ended June 30, 2000 and 1999,
respectively. The gain recognized during the six months ended June 30, 1999 was
higher than that recognized during the six months ended June 30, 2000, due to
the fact that during the six months ended June 30, 1999, the Partnership
collected an advance payment of principal relating to the Property in St. Cloud,
Florida, which accelerated the recognition of the gain for financial reporting
purposes. In addition, as a result of the sales of the Properties in Endicott
and Ithaca, New York, the Partnership recognized a gain of $213,503 for
financial reporting purposes during the six months ended June 30, 1999.
Termination of Merger
On March 1, 2000, the general partners and APF mutually agreed to
terminate the Agreement and Plan of Merger (the "Merger") entered into in March
1999. The general partners are continuing to evaluate strategic alternatives for
the Partnership, including alternatives to provide liquidity to the limited
partners.
Dismissal of Legal Action
As described in greater detail in Part II, Item 1 "Legal Proceedings",
in 1999 two groups of limited partners in several CNL Income Funds filed
purported class action suits against the general partners and APF alleging,
among other things, that the general partners had breached their fiduciary
duties in connection with the proposed merger. These actions were later
consolidated into one action. On April 25, 2000, the judge in the consolidated
action issued an order dismissing the action without prejudice, with each party
to bear its own costs and attorneys' fees.
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
No material changes in the Partnership's market risk occurred from
December 31, 1999 through June 30, 2000. Information regarding the Partnership's
market risk at December 31, 1999 is included in its Annual Report on Form 10-K
for the year ended December 31, 1999.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
On May 11, 1999, four limited partners in several CNL Income
Funds served a derivative and purported class action lawsuit
filed April 22, 1999 against the general partners and APF in
the Circuit Court of the Ninth Judicial Circuit of Orange
County, Florida, alleging that the general partners breached
their fiduciary duties and violated provisions of certain of
the CNL Income Fund partnership agreements in connection with
the proposed merger. The plaintiffs sought unspecified damages
and equitable relief. On July 8, 1999, the plaintiffs filed an
amended complaint which, in addition to naming three
additional plaintiffs, included allegations of aiding and
abetting and conspiring to breach fiduciary duties, negligence
and breach of duty of good faith against certain of the
defendants and sought additional equitable relief. As amended,
the caption of the case was Jon Hale, Mary J. Hewitt, Charles
A. Hewitt, Gretchen M. Hewitt, Bernard J. Schulte, Edward M.
and Margaret Berol Trust, and Vicky Berol v. James M. Seneff,
Jr., Robert A. Bourne, CNL Realty Corporation, and CNL
American Properties Fund, Inc., Case No. CIO-99-0003561.
On June 22, 1999, a limited partner of several CNL Income Funds served
a purported class action lawsuit filed April 29, 1999 against the
general partners and APF, Ira Gaines, individually and on behalf of a
class of persons similarly situated, v. CNL American Properties Fund,
Inc., James M. Seneff, Jr., Robert A. Bourne, CNL Realty Corporation,
CNL Fund Advisors, Inc., CNL Financial Corporation a/k/a CNL Financial
Corp., CNL Financial Services, Inc. and CNL Group, Inc., Case No.
CIO-99-3796, in the Circuit Court of the Ninth Judicial Circuit of
Orange County, Florida, alleging that the general partners breached
their fiduciary duties and that APF aided and abetted their breach of
fiduciary duties in connection with the proposed merger. The plaintiff
sought unspecified damages and equitable relief.
On September 23, 1999, Judge Lawrence Kirkwood entered an order
consolidating the two cases under the caption In re: CNL Income Funds
Litigation, Case No. 99-3561. Pursuant to this order, the plaintiffs
in these cases filed a consolidated and amended complaint on November
8, 1999. On December 22, 1999, the general partners and CNL Group,
Inc. filed motions to dismiss and motions to strike. On December 28,
1999, APF and CNL Fund Advisors, Inc. filed motions to dismiss. On
March 6, 2000, all of the defendants filed a Joint Notice of Filing
Form 8-K Reports and Suggestion of Mootness.
On April 25, 2000, Judge Kirkwood issued a Stipulated Final Order of
Dismissal of Consolidated Action, dismissing the action without
prejudice, with each party to bear its own costs and attorneys' fees.
Item 2. Changes in Securities. Inapplicable.
Item 3. Default 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 Amended and Restated Affidavit and Certificate of
Limited Partnership of CNL Income Fund V, Ltd. (Included
as Exhibit 3.1 to Form 10-K 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 10-K filed with the Securities
and Exchange Commission on March 31, 1994, and
incorporated herein by 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 10-K 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
10-K 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 10-K 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 10-K filed with the Securities and
Exchange Commission on April 1, 1996, and incorporated
herein by reference.)
27 Financial Data Schedule (Filed herewith.)
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended
June 30, 2000.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
DATED this 11th day of August, 2000
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)
