<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the balance
sheet of CNL Income Fund VI, Ltd. at September 30, 1995, 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 VI, Ltd. for the nine months ended
September 30, 1995.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 1,154,990
<SECURITIES> 0
<RECEIVABLES> 179,422
<ALLOWANCES> 168,773
<INVENTORY> 0
<CURRENT-ASSETS> 1,174,862
<PP&E> 25,534,398
<DEPRECIATION> 2,597,087
<TOTAL-ASSETS> 30,511,397
<CURRENT-LIABILITIES> 881,799
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 29,476,091
<TOTAL-LIABILITY-AND-EQUITY> 30,511,397
<SALES> 0
<TOTAL-REVENUES> 2,444,689
<CGS> 0
<TOTAL-COSTS> 498,577
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,089,206
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,089,206
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,089,206
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
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, 1995
-----------------------------------
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
0-19144
----------------------
CNL Income Fund VI, Ltd.
--------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 59-2922954
---------------------------- --------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organiza- Identification No.)
tion)
400 E. South Street, #500
Orlando, Florida 32801
---------------------------- --------------------------
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number
(including area code) (407) 422-1574
--------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--------- ---------
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 4-5
Notes to Condensed Financial Statements 6-8
Item 2. Management's Discussion and Analysis
of Financial Condition and
Results of Operations 9-14
Part II
Other Information 15
<TABLE>
CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)
CONDENSED BALANCE SHEETS
<CAPTION>
September 30, December 31,
ASSETS 1995 1994
------------- ------------
<S> <C> <C>
Land and buildings on operating
leases, less accumulated
depreciation of $2,597,087
and $2,307,725 $22,937,311 $23,884,110
Net investment in direct
financing leases 4,535,402 4,056,533
Investment in joint ventures 870,985 880,156
Mortgage note receivable 6,045 -
Cash and cash equivalents 1,149,335 926,481
Restricted cash 5,655 -
Receivables, less allowance for
doubtful accounts of $168,773
and $178,255 10,649 129,458
Prepaid expenses 9,223 3,208
Lease costs, less accumulated
amortization of $1,329 and $895 16,371 305
Accrued rental income, less
allowance for doubtful accounts
of $8,892 and $8,087 943,690 848,017
Other assets 26,731 26,731
----------- -----------
$30,511,397 $30,754,999
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 50,331 $ 5,655
Accrued and escrowed real estate
taxes payable 6,480 11,200
Due to related parties 15,295 115
Distributions payable 787,500 787,500
Rents paid in advance 22,193 41,116
----------- -----------
Total liabilities 881,799 845,586
Minority interest 153,507 160,028
Partners' capital 29,476,091 29,749,385
----------- -----------
$30,511,397 $30,754,999
=========== ===========
<FN>
See accompanying notes to condensed financial statements.
</FN>
</TABLE>
<TABLE>
CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF INCOME
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
-------- -------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues:
Rental income from
operating leases $681,906 $692,269 $2,046,160 $2,105,804
Earned income from direct
financing leases 115,799 105,328 337,805 326,848
Contingent rental income 12,293 10,282 23,012 29,848
Interest and other income 15,324 10,154 37,712 24,364
-------- -------- ---------- ----------
825,322 818,033 2,444,689 2,486,864
-------- -------- ---------- ----------
Expenses:
General operating and
administrative 38,012 25,598 100,513 81,542
Professional services 5,066 6,421 21,505 24,722
Bad debt expense - 20,505 - 49,822
Real estate taxes (3,987) 867 - 867
State taxes 150 - 6,939 11,962
Depreciation and amorti-
zation 121,399 120,904 369,620 385,867
-------- -------- ---------- ----------
160,640 174,295 498,577 554,782
-------- -------- ---------- ----------
Income Before Minority
Interest in Income of
Consolidated Joint Venture,
Equity in Earnings of
Unconsolidated Joint
Ventures and Gain on Sale
of Land and Buildings 664,682 643,738 1,946,112 1,932,082
Minority Interest in Income
of Consolidated Joint
Venture (4,924) (5,307 ) (14,138) (14,685)
Equity in Earnings of Uncon-
solidated Joint Ventures 21,105 27,205 61,319 47,843
Gain on Sale of Land and
Buildings 103,283 - 103,283 332,664
Loss on Sale of Land (7,370) - (7,370) -
-------- -------- ---------- ----------
Net Income $776,776 $665,636 $2,089,206 $2,297,904
======== ======== ========== ==========
Allocation of Net Income:
General partners $ 7,768 $ 6,656 $ 20,892 $ 22,979
Limited partners 769,008 658,980 2,068,314 2,274,925
-------- -------- ---------- ----------
$776,776 $665,636 $2,089,206 $2,297,904
======== ======== ========== ==========
Net Income Per Limited
Partner Unit $ 10.99 $ 9.41 $ 29.55 $ 32.50
======== ======== ========== ==========
Weighted Average Number
of Limited Partner Units
Outstanding 70,000 70,000 70,000 70,000
======== ======== ========== ==========
<FN>
See accompanying notes to condensed financial statements.
</FN>
</TABLE>
<TABLE>
CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF PARTNERS' CAPITAL
<CAPTION>
Nine Months Ended Year Ended
September 30, December 31,
1995 1994
----------------- ------------
<S> <C> <C>
General partners:
Beginning balance $ 147,262 $ 118,326
Net income 20,892 28,936
----------- -----------
168,154 147,262
----------- -----------
Limited partners:
Beginning balance 29,602,123 29,686,031
Net income 2,068,314 3,066,092
Distributions (2,362,500) (3,150,000)
----------- -----------
29,307,937 29,602,123
----------- -----------
Total partners' capital $29,476,091 $29,749,385
=========== ===========
<FN>
See accompanying notes to condensed financial statements.
</FN>
</TABLE>
<TABLE>
CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF CASH FLOWS
<CAPTION>
Nine Months Ended
September 30,
1995 1994
----------- -----------
<S> <C> <C>
Increase (Decrease) in Cash and Cash
Equivalents:
Net Cash Provided by Operating
Activities $ 2,434,251 $ 2,439,005
----------- -----------
Cash Flows from Investing
Activities:
Proceeds from sale of land
and buildings 899,502 1,429,481
Additions to land and
buildings on operating
leases (205,056) (980,904)
Investment in direct finan-
cing leases (517,029) (455,146)
Increase in restricted cash (5,655) -
Payment of lease costs - (2,100)
----------- -----------
Net cash provided by
(used in) investing
activities 171,762 (8,669)
----------- -----------
Cash Flows from Financing
Activities:
Distributions to limited
partners (2,362,500) (2,362,500)
Distributions to holder of
minority interest (20,659) (16,225)
----------- -----------
Net cash used in
financing activities (2,383,159) (2,378,725)
----------- -----------
Net Increase in Cash and Cash
Equivalents 222,854 51,611
Cash and Cash Equivalents at
Beginning of Period 926,481 852,953
----------- -----------
Cash and Cash Equivalents at End of
Period $ 1,149,335 $ 904,564
=========== ===========
Supplemental Schedule of Non-Cash
Investing and Financing Activities:
Building costs incurred and
unpaid at end of period $ 28,844 $ -
=========== ===========
Mortgage note accepted in
exchange for sale of land $ 6,000 $ -
=========== ===========
Lease costs incurred and unpaid
at end of period $ 16,500 $ -
=========== ===========
Distributions declared and unpaid
at end of period $ 787,500 $ 787,500
=========== ===========
<FN>
See accompanying notes to condensed financial statements.
</FN>
</TABLE>
CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Nine Months Ended September 30, 1995 and 1994
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, 1995, may not be indicative of the results that
may be expected for the year ending December 31, 1995. Amounts as of
December 31, 1994, 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 VI, Ltd. (the "Partnership") for the year ended December 31,
1994.
The Partnership accounts for its 66 percent interest in the accounts of
Caro Joint Venture under the full consolidation method. All significant
intercompany accounts and transactions have been eliminated.
Certain items in the prior year's financial statements have been
reclassified to conform to 1995 presentation. These reclassifications had
no effect on partners' capital or net income.
In March 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 121, Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. The
Statement, which is effective for fiscal years beginning after December
15, 1995, requires that an entity review long-lived assets and certain
identifiable intangibles to be held and used for impairment whenever
events or changes in circumstances indicate that the carrying amount of
the asset may not be recoverable. The Partnership plans to adopt this
standard in 1996 and does not expect compliance with such standard to have
a material effect, if any, on the Partnership's financial position or
results of operations.
2. Leases:
------
In April 1995, the Partnership entered into a new lease for its property
in Hermitage, Tennessee. In connection therewith, the Partnership
incurred renovation costs of $25,646 and lease costs of $16,500.
3. Land and Buildings:
------------------
In July 1995, the Partnership sold its property in Little Canada,
Minnesota, for $904,000 and received net sales proceeds of $899,574,
resulting in a gain of $103,283 for financial reporting purposes. This
property was originally acquired by the Partnership in October 1989 and
had a cost of approximately $823,900, excluding acquisition fees and
miscellaneous acquisition expenses. As a result of the sale, the
Partnership had a profit of approximately $80,100 in excess of its
original purchase price.
In August 1995, the Partnership reinvested $725,285 of the net sales
proceeds in land and building of a property in Broken Arrow, Oklahoma.
In addition, in August 1995, the Partnership sold a small parcel of vacant
land adjacent to its property in Orlando, Florida, for $7,500 resulting in
a loss of $7,370 for financial reporting purposes.
4. Mortgage Note Receivable:
------------------------
In connection with the sale in August 1995 of the small parcel of vacant
land adjacent to its property in Orlando, Florida, the Partnership
accepted a promissory note from the buyer, collateralized by a mortgage on
the property, for $6,000. The promissory note bears interest at nine
percent and is being collected in six monthly installments of $1,026
through February 1996. Mortgage note receivable includes $6,045 of such
amounts, including accrued interest of $45 at September 30, 1995.
5. Restricted Cash:
---------------
As of September 30, 1995, $5,655 of the remaining net sales proceeds from
the sale of the property in Little Canada, Minnesota, was being held in an
interest-bearing escrow account pending payment of any remaining costs
relating to the property in Broken Arrow, Oklahoma, or if the funds are
not expended, they will be returned to the Partnership.
6. Subsequent Event:
----------------
Effective October 1, 1995, CNL Income Fund Advisors, Inc. assigned its
rights in the management agreement with the Partnership to an affiliate of
the general partners, CNL Fund Advisors, Inc. All of the terms and
conditions of the management agreement remain unchanged.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
CNL Income Fund VI, 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 selected national and
regional fast-food and family-style restaurant chains (collectively, the
"Properties"). The leases are triple-net leases, with the lessees generally
responsible for all repairs and maintenance, property taxes, insurance and
utilities. As of September 30, 1995, the Partnership owned 42 Properties,
including four Properties owned by joint ventures in which the Partnership is a
co-venturer and one Property owned with an affiliate as tenants-in-common.
Liquidity and Capital Resources
- - -------------------------------
The Partnership's primary source of capital for the nine months ended
September 30, 1995 and 1994, was cash from operations (which includes cash
received from tenants, distributions from joint ventures, and interest and other
income received, less cash paid for expenses). Cash from operations was
$2,434,251 and $2,439,005 for the nine months ended September 30, 1995 and 1994,
respectively. The decrease in cash from operations for the nine months ended
September 30, 1995, is primarily a result of changes in income and expenses as
discussed in "Results of Operations" below and changes in the Partnership's
working capital.
In April 1995, the Partnership entered into a new lease for its Property
in Hermitage, Tennessee. In connection therewith, the Partnership incurred
$25,646 in renovation costs and $16,500 in lease costs.
In July 1995, the Partnership sold its Property in Little Canada,
Minnesota, for $904,000 and received net sales proceeds of $899,574, resulting
in a gain of $103,283 for financial reporting purposes. This Property was
originally acquired by the Partnership in October 1989 and had a cost of
approximately $823,900, excluding acquisition fees and miscellaneous acquisition
expenses. As a result of the sale, the Partnership had a profit of
approximately $80,100 in excess of its original purchase price. In August 1995,
the Partnership reinvested $725,285 in a Property in Broken Arrow, Oklahoma. As
of September 30, 1995, the Partnership had net sales proceeds of $5,655 in an
interest-bearing escrow account pending payment of any remaining costs relating
to this Property or if the funds are not expended, they will be returned to the
Partnership. The remaining net sales proceeds are expected to be invested in an
additional Property or used for other Partnership purposes. The general
partners believe that the transaction, or a portion thereof, relating to the
sale of the Property in Little Canada, Minnesota, and the reinvestment of the
proceeds will qualify as a like-kind exchange transaction for federal income tax
purposes. However, the Partnership will distribute amounts sufficient to enable
the limited partners to pay federal and state (at a level reasonably assumed
by the general partners) income taxes, if any, resulting from the sale. In
addition, in August 1995, the Partnership sold a small parcel of vacant land
adjacent to its Property in Orlando, Florida, for $7,500 resulting in a loss of
$7,370 for financial reporting purposes. In connection therewith, the Partner-
ship accepted a promissory note, collateralized by a mortgage on the Property,
for $6,000. The promissory note, which bears interest at a rate of nine percent
per annum, is being collected in six monthly installments of $1,026 through
February 1996. The balance of this note was $6,045 at September 30, 1995,
including accrued interest of $45.
Currently, the remaining net sales proceeds and rental income from the
Partnership's Properties are invested in money market accounts or other short-
term, highly liquid investments pending the Partnership's use of such funds to
invest in an additional Property, pay Partnership expenses or to make
distributions to the partners. At September 30, 1995, the Partnership had
$1,149,335 invested in such short-term investments as compared to $926,481 at
December 31, 1994. The funds remaining at September 30, 1995, after payment of
distributions and other liabilities, will be used to fund renovation and lease
costs relating to the Hermitage Property, as described above, to meet the
Partnership's working capital and other needs, and to possibly invest in an
additional Property.
Total liabilities of the Partnership, including distributions payable,
increased to $881,799 at September 30, 1995, from $845,586 at December 31, 1994,
primarily as a result of renovation and lease costs relating to the re-leasing
of the Property in Hermitage, Tennessee, as described above. The general
partners believe the Partnership has sufficient cash on hand to meet the
Partnership's current working capital needs.
Based on cash from operations, the Partnership declared distributions to
the limited partners of $2,362,500 for each of the nine months ended September
30, 1995 and 1994 ($787,500 for each of the quarters ended September 30, 1995
and 1994). This represents distributions for each applicable nine months of
$33.75 per unit ($11.25 per unit for each applicable quarter). No distributions
were made to the general partners for the quarters and nine months ended
September 30, 1995 and 1994. No amounts distributed or to be distributed to the
limited partners for the nine months ended September 30, 1995 and 1994, 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's investment strategy of acquiring Properties for cash and
leasing them under triple-net leases to operators who generally meet specified
financial standards minimizes the Partnership's operating expenses. The
general partners believe that the leases will continue to generate cash flow in
excess of operating expenses.
The general partners have the right, but not the obligation, to make
additional capital contributions if they deem it appropriate in connection with
the operations of the Partnership.
Results of Operations
- - ---------------------
During the nine months ended September 30, 1994, the Partnership and its
consolidated joint venture, Caro Joint Venture, owned and leased 40 wholly owned
Properties (including two Properties in Batesville and Heber Springs, Arkansas,
which were sold in May 1994) and during the nine months ended September 30,
1995, the Partnership and its consolidated joint venture owned and leased 39
wholly owned Properties (including one Property in Little Canada, Minnesota,
which was sold in July 1995) to operators of fast-food and family-style
restaurant chains. In connection therewith, the Partnership and Caro Joint
Venture earned $2,383,965 and $2,432,652, during the nine months ended September
30, 1995 and 1994, respectively, in rental income from operating leases and
earned income from direct financing leases from these Properties, $797,705 and
$797,597 of which was earned during the quarters ended September 30, 1995 and
1994, respectively. Rental and earned income decreased approximately $15,700
and $54,000 during the quarter and nine months ended September 30, 1995,
respectively, as a result of the fact that the tenant of the Property in
Hermitage, Tennessee, elected to exercise its option to terminate its lease with
the Partnership effective August 31, 1994. The decrease in rental and earned
income was partially offset by an increase of approximately $19,500 and $23,000
during the quarter and nine months ended September 30, 1995, respectively, due
to the fact that in April 1995, the Partnership entered into a new lease for
this Property, for which rent commenced in June 1995.
Rental and earned income also decreased approximately $17,900 and $59,000
during the quarter and nine months ended September 30, 1995, respectively, as
compared to the quarter and nine months ended September 30, 1994, as a result of
the sale in July 1995, of the Property in Little Canada, Minnesota, and the
Partnership's writing off as uncollectible rent receivable amounts relating to
the Property. This decrease was partially offset by an increase of
approximately $9,800 during the quarter and nine months ended September 30,
1995, in rental income due to the reinvestment of a portion of the net sales
proceeds in a Property in Broken Arrow, Oklahoma, in August 1995.
Rental and earned income was also reduced by approximately $56,200 for the
nine months ended September 30, 1995, as a result of the sale of the Properties
in Batesville and Heber Springs, Arkansas, in May 1994. However, the decrease
was offset by an increase of approximately $59,500 during the nine months ended
September 30, 1995, in rental income due to the reinvestment of a portion of the
net sales proceeds in a Property in Dallas, Texas, in June 1994.
In addition, the Partnership increased its allowance for doubtful accounts
by approximately $39,700 and $65,900 for the nine months ended September 30,
1995 and 1994, respectively, for rental amounts for two Properties leased by the
same tenant in Chester, Pennsylvania, and Orlando, Florida. The Partnership is
continuing to pursue collection of past due rental amounts relating to the two
Properties and will recognize such amounts as income if collected.
During the nine months ended September 30, 1995 and 1994, the Partnership
also earned $23,012 and $29,848, respectively, in contingent rental income,
$12,293 and $10,282 of which was earned during the quarters ended September 30,
1995 and 1994, respectively. Contingent rental income decreased during the nine
months ended September 30, 1995, as compared to the nine months ended September
30, 1994, primarily as the result of decreases in gross sales relating to
certain restaurant Properties.
The increase in contingent rental income during the quarter ended
September 30, 1995, as compared to the quarter ended September 30, 1994, was
attributable to the Partnership increasing its allowance for doubtful accounts
relating to the Property in Little Canada, Minnesota, during the quarter ended
September 30, 1994, by approximately $6,700. During the quarter ended September
30, 1995, the Partnership wrote-off the receivable and related allowance for
doubtful accounts for this Property as a result of its sale as described in
"Liquidity and Capital Resources" above.
During the nine months ended September 30, 1995 and 1994, the Partnership
also owned and leased three Properties indirectly through other joint venture
arrangements and owned and leased one Property with an affiliate as tenants-in-
common. In connection therewith, during the nine months ended September 30,
1995 and 1994, the Partnership earned $61,319 and $47,843, respectively,
attributable to net income earned by these unconsolidated joint ventures,
$21,105 and $27,205 of which was earned during the quarters ended September 30,
1995 and 1994, respectively. The increase during the nine months ended
September 30, 1995, is primarily due to the fact that the Partnership invested
in the Property as tenants-in-common in July 1994. The decrease in income
earned by these joint ventures during the quarter ended September 30, 1995, as
compared to the quarter ended September 30, 1994, was primarily due to the fact
that during the quarter ended September 30, 1994, the Partnership recognized net
income relating to the Property held as tenants-in-common as a result of the
Property being purchased from an affiliate of the Partnership which acted as
interim owner in order to facilitate the acquisition of the Property by the
Partnership. In accordance with the Statement of Policy of Real Estate Programs
for the North American Securities Administrators Association, Inc., all income,
expenses, profits and losses generated by or associated with the property
purchased from an affiliate in which the affiliate has acted as an interim
owner, are treated as belonging to the Partnership. No such amounts were
recorded during the quarter ended September 30, 1995.
During the nine months ended September 30, 1995, three of the
Partnership's lessees, Golden Corral Corporation, Restaurant Management
Services, Inc. and Mid-America Corporation, each contributed more than ten
percent of the Partnership's total rental income (including the Partnership's
share of the rental income from the four Properties owned by joint ventures in
which the Partnership is a co-venturer and one Property owned with an affiliate
as tenants-in-common). Golden Corral Corporation is the lessee under leases
relating to four restaurants, Restaurant Management Services, Inc. is the lessee
under leases relating to eight restaurants and Mid-America Corporation is the
lessee under leases relating to four restaurants. It is anticipated that, based
on the minimum annual rental payments required by the leases, Golden Corral
Corporation, Restaurant Management Services, Inc. and Mid-America Corporation
each will continue to contribute more than ten percent of the Partnership's
total rental income during the remainder of 1995 and subsequent years. Any
failure of these lessees could materially affect the Partnership's income.
Operating expenses, including depreciation and amortization expense, were
$498,577 and $554,782 for the nine months ended September 30, 1995 and 1994,
respectively, of which $160,640 and $174,295 were incurred for the quarters
ended September 30, 1995 and 1994, respectively. The decrease in operating
expenses during the quarter and nine months ended September 30, 1995, as
compared to the quarter and nine months ended September 30, 1994, is primarily
attributable to the Partnership's establishing an allowance for doubtful
accounts of approximately $20,500 and $48,900 during the quarter and nine months
ended September 30, 1994, for amounts previously recorded as income relating to
the Properties in Chester, Pennsylvania, and Little Canada, Minnesota.
In addition, operating expenses decreased during the nine months ended
September 30, 1995, as a result of the fact that the tenant of the Property in
Hermitage, Tennessee, elected to exercise its option to terminate its lease with
the Partnership, effective August 31, 1994. In connection therewith, the
Partnership expensed approximately $9,700 in unamortized lease costs relating to
this lease during the nine months ended September 30, 1994. In April 1995, the
Partnership entered into a new lease for this Property.
The decrease in operating expenses during the quarter and nine months
ended September 30, 1995, was partially offset by an increase in (i) accounting
and administrative expenses and (ii) insurance expense as a result of the
general partners' obtaining contingent liability and property coverage for the
Partnership. This insurance policy is intended to reduce the Partnership's
exposure in the unlikely event a tenant's insurance policy lapses or is
insufficient to cover a claim relating to the Property.
As a result of the sale of the Property in Little Canada, Minnesota, as
described above in "Liquidity and Capital Resources," the Partnership recognized
a gain of $103,283 and as a result of the sale of a portion of the land of the
Property in Orlando, Florida, the Partnership recognized a loss of $7,370 for
the nine months ended September 30, 1995. In addition, as a result of the sale
of the Properties in Batesville and Heber Springs, Arkansas, the Partnership
recognized a gain of $332,664 for the nine months ended September 30, 1994.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. Inapplicable.
-----------------
Item 2. Changes in Securities. Inapplicable.
---------------------
Item 3. Defaults upon Senior Securities. Inapplicable.
-------------------------------
Item 4. Submission of Matters to a Vote of Security Holders.
---------------------------------------------------
Inapplicable.
Item 5. Other Information. Inapplicable.
-----------------
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
(a) Exhibits - None.
(b) No reports on Form 8-K were filed during the quarter ended
September 30, 1995.
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
DATED this 13th day of November, 1995.
CNL INCOME FUND VI, LTD.
By: CNL REALTY CORPORATION
General Partner
By: /s/ James M. Seneff, Jr.
-------------------------
JAMES M. SENEFF, JR.
President and Principal
Executive Officer
By: /s/ Robert A. Bourne
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ROBERT A. BOURNE
Treasurer and Principal
Financial Officer
