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
Forthe quarterly period ended June 30, 1997
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 juris- (I.R.S. Employer
diction of incorporation Identification No.)
or organization)
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
<PAGE>
CONTENTS
Part I Page
Item 1. Financial Statements:
Condensed Balance Sheets 1
Condensed Statements of Income 2
Condensed Statements of Partners' Capital 3
Condensed Statements of Cash Flows 4
Notes to Condensed Financial Statements 5-8
Item 2. Management's Discussion and Analysis
of Financial Condition and
Results of Operations 9-13
Part II
Other Information 14
<PAGE>
CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 1997 1996
----------- --------
<S> <C>
Land and buildings on operating
leases, less accumulated
depreciation and allowance
for loss on land and buildings $21,900,076 $21,105,355
Net investment in direct
financing leases 4,621,799 4,659,024
Investment in joint ventures 1,122,731 997,016
Cash and cash equivalents 953,412 1,127,930
Restricted cash - 977,756
Receivables, less allowance for
doubtful accounts of $224,402
and $115,892 92,189 174,983
Prepaid expenses 9,172 1,163
Lease costs, less accumulated
amortization of $4,636 and
$3,691 13,064 14,009
Accrued rental income, less
allowance for doubtful
accounts of $9,697 in 1997
and 1996 1,095,917 1,045,319
Other assets 26,731 26,731
----------- -----------
$29,835,091 $30,129,286
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 11,438 $ 18,161
Accrued and escrowed real estate
taxes payable 28,639 11,338
Due to related parties 8,736 2,633
Distributions payable 787,500 857,500
Rents paid in advance 19,978 30,705
----------- -----------
Total liabilities 856,291 920,337
Minority interest 156,286 164,582
Partners' capital 28,822,514 29,044,367
----------- -----------
$29,835,091 $30,129,286
=========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
1
<PAGE>
CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
-------- -------- ---------- -------
<S> <C>
Revenues:
Rental income from
operating leases $ 646,799 $696,372 $1,286,360 $1,390,419
Earned income from direct
financing leases 126,623 138,782 271,537 281,383
Contingent rental income 7,672 4,171 26,608 10,500
Interest and other income 17,982 14,497 33,265 26,599
-------- -------- ---------- ----------
799,076 853,822 1,617,770 1,708,901
-------- -------- ---------- ----------
Expenses:
General operating and
administrative 37,661 42,579 72,366 86,812
Bad debt expense 13,102 - 13,102 -
Professional services 5,561 4,294 11,539 15,363
Real estate taxes 7,432 - 9,964 -
State and other taxes 354 114 8,968 8,128
Depreciation and
amortization 122,968 121,131 242,331 242,262
-------- -------- ---------- ----------
187,078 168,118 358,270 352,565
-------- -------- ---------- ----------
Income Before Minority
Interest in Loss (Income)
of Consolidated Joint
Venture, Equity in
Earnings of Unconsoli-
dated Joint Ventures and
Provision for Loss on Land
and Building 611,998 685,704 1,259,500 1,356,336
Minority Interest in Loss
(Income) of Consolidated
Joint Venture 225 (5,465) 4,068 (11,069)
Equity in Earnings of
Unconsolidated Joint
Ventures 20,628 23,972 169,356 46,577
Provision for Loss on Land
and Building (79,777) - (79,777) -
-------- -------- ---------- ---------
Net Income $553,074 $704,211 $1,353,147 $1,391,844
======== ======== ========== ==========
Allocation of Net Income:
General partners $ 5,799 $ 7,042 $ 13,800 $ 13,918
Limited partners 547,275 697,169 1,339,347 1,377,926
-------- -------- ---------- ----------
$553,074 $704,211 $1,353,147 $1,391,844
======== ======== ========== ==========
Net Income Per Limited
Partner Unit $ 7.82 $ 9.96 $ 19.13 $ 19.68
======== ======== ========== ==========
Weighted Average Number
of Limited Partner Units
Outstanding 70,000 70,000 70,000 70,000
======== ======== ========== ==========
</TABLE>
See accompanying notes to condensed financial statements.
2
<PAGE>
CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF PARTNERS' CAPITAL
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, December 31,
1997 1996
---------------- ------------
<S> <C>
General partners:
Beginning balance $ 204,010 $ 175,673
Net income 13,800 28,337
----------- -----------
217,810 204,010
----------- -----------
Limited partners:
Beginning balance 28,840,357 29,285,093
Net income 1,339,347 2,775,264
Distributions ($22.50 and
$46.00 per limited partner
unit, respectively) (1,575,000) (3,220,000)
----------- -----------
28,604,704 28,840,357
----------- -----------
Total partners' capital $28,822,514 $29,044,367
=========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
3
<PAGE>
CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1997 1996
----------- -----------
<S> <C>
Increase (Decrease) in Cash and Cash
Equivalents:
Net Cash Provided by Operating
Activities $ 1,613,540 $ 1,650,988
----------- -----------
Cash Flows from Investing
Activities:
Additions to land and
buildings on operating
leases (1,112,647) -
Investment in joint ventures - (173,650)
Collections on mortgage note
receivable - 3,033
Decrease in restricted cash 977,017 -
Payment of lease costs (3,300) (3,300)
----------- ----------
Net cash used in investing
activities (138,930) (173,917)
----------- -----------
Cash Flows from Financing
Activities:
Distributions to limited
partners (1,645,000) (1,575,000)
Distributions to holder of
minority interest (4,228) (3,524)
----------- -----------
Net cash used in financing
activities (1,649,228) (1,578,524)
----------- -----------
Net Decrease in Cash and Cash
Equivalents (174,518) (101,453)
Cash and Cash Equivalents at Beginning
of Period 1,127,930 1,120,999
----------- -----------
Cash and Cash Equivalents at End of
Period $ 953,412 $ 1,019,546
=========== ===========
Supplemental Schedule of Non-Cash
Financing Activities:
Distributions declared and unpaid
at end of period $ 787,500 $ 787,500
=========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
4
<PAGE>
CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Six Months Ended June 30, 1997 and 1996
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, 1997, may not be indicative
of the results that may be expected for the year ending December 31,
1997. Amounts as of December 31, 1996, 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, 1996.
The Partnership accounts for its 66 percent interest in the accounts of
Caro 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:
Land and buildings on operating leases consisted of the following at:
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
<S> <C>
Land $ 10,496,014 $ 10,364,275
Buildings 14,764,161 13,983,253
----------- -----------
25,260,175 24,347,528
Less accumulated
depreciation (3,406,536) (3,165,150)
----------- -----------
21,853,639 21,182,378
Less allowance for loss
on land and building (153,563) (77,023)
----------- ----------
$21,900,076 $21,105,355
=========== ===========
</TABLE>
5
<PAGE>
CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
2. Land and Buildings - Continued:
In February 1997, the Partnership reinvested the net sales proceeds
from the sale of the Property in Dallas, Texas, in December 1996, along
with additional funds, in a Bertucci's Property in Marietta, Georgia,
for a total cost of approximately $1,112,600.
In June 1997, the Partnership established an allowance for loss on land
and building in the amount of $76,540 and wroteoff accrued rental
income of $3,237 for financial reporting purposes for the property in
Whitehall, Michigan. The allowance for the property represents the
difference between (i) the property's carrying value at June 30, 1997,
plus the accrued rental income that the Partnership had recognized
since the beginning of the renewal option of the lease relating to the
straight-lining of future scheduled rent increases minus (ii) the net
realizable value of $629,888 received as net sales proceeds in
conjunction with the sale of the property in July 1997 (See Note 5).
3. Investment in Joint Ventures:
In January 1997, Show Low Joint Venture, in which the Partnership owns
a 36 percent interest, sold its property to the tenant for $970,000,
resulting in a gain to the joint venture of approximately $360,000 for
financial reporting purposes. The property was originally contributed
to Show Low Joint Venture in July 1990 and had a total cost of
approximately $663,500, excluding acquisition fees and miscellaneous
acquisition expenses; therefore, the joint venture sold the property
for approximately $306,500 in excess of its original purchase price.
In June 1997, Show Low Joint Venture reinvested $782,413 of the net
sales proceeds in a Darryl's property in Greensboro, North Carolina.
The joint venture expects to distribute the remaining net sales
proceeds to the Partnership and its co-venture partner on a pro-rata
basis.
6
<PAGE>
CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
3. Investment in Joint Ventures - Continued:
The following presents the combined, condensed financial information
for all of the Partnership's investments in joint ventures at:
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
<S> <C>
Land and buildings on
operating leases, less
accumulated depreciation $3,141,763 $3,463,093
Net investment in direct
financing leases 918,683 401,650
Cash 17,529 11,177
Restricted cash 193,965 -
Receivables 4,955 21,826
Accrued rental income 187,213 191,594
Other assets 527 44,380
Liabilities 12,263 10,221
Partners' capital 4,452,372 4,123,499
Revenues 219,313 528,092
Gain on sale 360,002 -
Net income 540,802 436,981
</TABLE>
The Partnership recognized income totalling $169,356 and $46,577 for
the six months ended June 30, 1997 and 1996, respectively, from these
joint ventures, $20,628 and $23,972 of which was earned during the
quarters ended June 30, 1997 and 1996, respectively.
4. Receivables:
In June 1997, the Partnership terminated the lease with the tenant of
the property in Greensburg, Indiana. In connection therewith, the
Partnership accepted a promissory note from this former tenant for
$13,077 for amounts relating to past due real estate taxes the
Partnership had incurred as a result of the former tenant's financial
difficulties. The promissory note, which is uncollateralized, bears
interest at a rate of ten percent per annum, and is being collected in
36 monthly installments. As of June 30, 1997 the receivable balance was
$13,077 (See Note 5).
5. Subsequent Event:
In July 1997, the Partnership sold its property in Whitehall, Michigan,
for $665,000 and received net sales proceeds of $629,888, resulting in
a loss of approximately $79,777 for financial reporting purposes which
the Partnership recorded at June 30, 1997 (See Note 2).
7
<PAGE>
CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
Quarters and Six Months Ended June 30, 1997 and 1996
5. Subsequent Event - Continued:
In July 1997, the Partnership sold its property in Naples,
Florida, for $1,530,000 and received net sales proceeds of $1,487,725,
resulting in a gain of approximately $186,500 for financial reporting
purposes. In addition, in July 1997, the Partnership sold its property
in Plattsmouth, Nebraska, for $700,000 and received net sales proceeds
of $699,400 resulting in a gain of approximately $156,400 for financial
reporting purposes.
In addition in July 1997, the Partnership entered into a letter of
intent with a new tenant to operate the property located in Greensburg,
Indiana. In connection therewith, the Partnership anticipates to fund
up to $125,000 in conversion costs associated with the property.
In addition, in July 1997, the Partnership entered into a sales
contract with an unrelated third party to sell the property in Venice,
Florida. The general partners believe that the anticipated sales price
exceeds the Partnership's cost attributable to the property. The sale
of the property had not occurred as of July 31, 1997.
8
<PAGE>
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 restaurant properties, as well as land upon which restaurants were to
be constructed, which are leased primarily to operators of selected national and
regional fast-food 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 June 30, 1997, the Partnership owned 43 Properties, including
four Properties owned by joint ventures in which the Partnership is a
co-venturer and two Properties owned with affiliates as tenants-in-common.
Liquidity and Capital Resources
The Partnership's primary source of capital for the six months ended
June 30, 1997 and 1996, 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 $1,613,540 and
$1,650,988 for the six months ended June 30, 1997 and 1996, respectively. The
decrease in cash from operations for the six months ended June 30, 1997, is
primarily a result of changes in income and expenses, as discussed below in
"Results of Operations".
Other sources and uses of capital included the following during the six
months ended June 30, 1997.
In January 1997, Show Low Joint Venture, in which the Partnership owns
a 36 percent interest, sold its Property to the tenant for $970,000, resulting
in a gain to the joint venture of approximately $360,000 for financial reporting
purposes. The Property was originally contributed to Show Low Joint Venture in
July 1990 and had a total cost of approximately $663,500, excluding acquisition
fees and miscellaneous acquisition expenses; therefore, the joint venture sold
the Property for approximately $306,500 in excess of its original purchase
price. In June 1997, Show Low Joint Venture reinvested $782,413 of the net sales
proceeds in a Darryl's Property in Greensboro, North Carolina. The joint venture
expects to distribute the remaining net sales proceeds to the Partnership and
its co-venture partner on a pro-rata basis.
In February 1997, the Partnership reinvested the net sales proceeds
from the sale of the Property in Dallas, Texas, in December 1996, along with
additional funds, in a Bertucci's Property in Marietta, Georgia, for a total
cost of approximately $1,112,600.
9
<PAGE>
Liquidity and Capital Resources - Continued
In July 1997, the Partnership sold its Property in Whitehall, Michigan,
for $665,000 and received net sales proceeds of $629,888, resulting in a loss of
approximately $79,777 for financial reporting purposes which the Partnership
recorded at June 30, 1997. In addition, in July 1997, the Partnership sold its
Property in Naples, Florida, for $1,530,000 and received net sales proceeds of
$1,487,725, resulting in a gain of approximately $186,500 for financial
reporting purposes. In addition, in July 1997, the Partnership sold its Property
in Plattsmouth, Nebraska, for $700,000 and received net sales proceeds of
$699,400 resulting in a gain of approximately $156,400 for financial reporting
purposes. The net sales proceeds are expected to be reinvested in an additional
Property or used for other Parnership purposes.
In addition, in July 1997, the Partnership entered into a letter of
intent for a lease with a new tenant to operate the Property located in
Greensburg, Indiana. In connection therewith, the Partnership anticipates to
fund up to $125,000 in conversion costs associated with the Property.
In addition, in July 1997, the Partnership entered into a sales
contract with an unrelated third party to sell the Property in Venice, Florida.
The general partners believe that the anticipated sales price exceeds the
Partnership's cost attributable to the Property. The sale of the property had
not occurred as of July 31, 1997.
Currently, rental income from the Partnership's Properties is invested
in money market accounts or other short-term, highly liquid investments pending
the Partnership's use of such funds to pay Partnership expenses or to make
distributions to the partners. At June 30, 1997, the Partnership had $953,412
invested in such short-term investments as compared to $1,127,930 at December
31, 1996. The decrease in cash and cash equivalents during the six months ended
June 30, 1997, is primarily the result of the Partnership investing
approximately $134,900 in a Bertucci's Property, as described above. The funds
remaining at June 30, 1997, after payment of distributions and other
liabilities, will be used to meet the Partnership's working capital and other
needs.
Total liabilities of the Partnership, including distributions payable,
decreased to $856,291 at June 30, 1997, from $920,337 at December 31, 1996,
primarily as the result of the Partnership's accruing a special distribution
payable to the limited partners of $70,000 at December 31, 1996, which was paid
in January 1997. The general partners believe the Partnership has sufficient
cash on hand to meet the Partnership's current working capital needs.
Based primarily on cash from operations, the Partnership declared
distributions to the limited partners of $1,575,000 for each of the six months
ended June 30, 1997 and 1996 ($787,500 for each of the quarters ended June 30,
1997 and 1996). This represents distributions for each applicable quarter of
$22.50 per unit ($11.25 per unit for each applicable quarter). No distributions
were made to the general partners for the quarters and six months ended June 30,
1997 and 1996. No amounts distributed or to be distributed to the limited
partners for the six months ended June 30, 1997 and 1996, are required to be or
have been treated by the Partnership as a return of capital for purposes
10
<PAGE>
Liquidity and Capital Resources - Continued
of calculating the limited partners' return on their adjusted capital
contributions. The Partnership intends to continue to make distributions of cash
available to the limited partners on a quarterly basis.
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 six months ended June 30, 1997 and 1996, the Partnership and
its consolidated joint venture, Caro Joint Venture, owned and leased 38 wholly
owned Properties (including one Property in Dallas, Texas, which was sold in
December 1996) to operators of fast-food and family-style restaurant chains. In
connection therewith, the Partnership and Caro Joint Venture earned $1,557,897
and $1,671,802 during the six months ended June 30, 1997 and 1996, respectively,
in rental income from operating leases and earned income from direct financing
leases from these Properties, $773,422 and $835,154 of which was earned during
the quarters ended June 30, 1997 and 1996, respectively. Rental and earned
income decreased approximately $27,500 and $54,900 during the quarter and six
months ended June 30, 1997, as compared to the quarter and six months ended June
30, 1996, as a result of the sale of the Property in Dallas, Texas, in December
1996. The decrease in rental income was partially offset by an increase of
approximately $32,200 and $44,900 during the quarter and six months ended June
30, 1997, due to the reinvestment of the net sales proceeds in a Property in
Marietta, Georgia, in February 1997.
The decrease in rental income is also attributable to the fact that the
Partnership's consolidated joint venture established an allowance for doubtful
accounts for rental amounts totalling approximately $5,700 and $32,100, during
the quarter and six months ended June 30, 1997 due to financial difficulties the
tenant is experiencing. The Partnership's consolidated joint venture will
continue to pursue collection of such amounts and any amounts collected will be
recorded as income.
In addition the decrease in rental and earned income during the quarter
and six months ended June 30, 1997, as compared to the quarter and six months
ended June 30, 1996, is also partially attributable to the Partnership
increasing its allowance for doubtful accounts by approximately $34,200 and
$43,700, respectively, for rental amounts relating to the Hardee's Property
located in Greensburg, Indiana, due to financial difficulties the
11
<PAGE>
Results in Operations - Continued
tenant is experiencing. No such allowance was established during the quarter and
six months ended June 30, 1996. In June 1997, the Partnership terminated the
lease with the former tenant as discussed above in "Liquidity and Capital
Resources". The Partnership does not intend to continue to pursue the collection
of these rental and other amounts due from the former tenant unless the former
tenant defaults under the promissory note, as described above in "Liquidity and
Capital Resources".
In addition, rental and earned income decreased during the quarter and
six months ended June 30, 1997, as a result of the Partnership establishing an
allowance for doubtful accounts totalling approximately $15,900 and $24,000,
respectively, for rental amounts relating to the Property located in Melbourne,
Florida, due to financial difficulties the tenant is experiencing. As of June
30, 1997, the Partnership was negotiating an agreement with the tenant for the
collection of past due amounts relating to this Property and will recognize such
amounts as income if collected.
For the six months ended June 30, 1997 and 1996, the Partnership also
earned $26,608 and $10,500, respectively, in contingent rental income, $7,672
and $4,171 of which was earned during the quarters ended June 30, 1997 and 1996,
respectively. The increase in contingent rental income during the quarters and
six months ended June 30, 1997, is primarily attributable to an increase in
gross sales of certain restaurant Properties requiring the payment of contingent
rental income.
For the six months ended June 30, 1996, the Partnership also owned and
leased three Properties indirectly through joint venture arrangements and two
Properties as tenants-in-common with an affiliate of the general partners and
for the six months ended June 30, 1997, the Partnership owned and leased four
Properties indirectly through joint venture arrangements (including one Property
in Show Low Joint Venture, which was sold in January 1997) and two Properties as
tenants-in-common with an affiliate of the general partners. In connection
therewith, during the six months ended June 30, 1997 and 1996, the Partnership
earned $169,356 and $46,577, respectively, attributable to net income earned by
these joint ventures, $20,628 and $23,972 of which was earned during the
quarters ended June 30, 1997 and 1996, respectively. The increase in net income
earned by joint ventures during the six months ended June 30, 1997, as compared
to the six months ended June 30, 1996 is primarily attributable to the fact that
in January 1997, Show Low Joint Venture, in which the Partnership owns a 36
percent interest, recognized a gain of approximately $360,000 for financial
reporting purposes as a result of the sale of its Property in January 1997, as
described above in "Liquidity and Capital Resources". Show Low Joint Venture
reinvested the majority of the net sales proceeds in an additional property in
June 1997.
12
<PAGE>
Results of Operations - Continued
Operating expenses, including depreciation and amortization expense,
were $358,270 and $352,565 for the six months ended June 30, 1997 and 1996,
respectively, of which $187,078 and $168,118 were incurred for the quarters
ended June 30, 1997 and 1996, respectively. The increase in operating expenses
during the quarter and six months ended June 30, 1997, as compared to the
quarter and six months ended June 30, 1996, is due to the fact that the
Partnership's consolidated joint venture recorded bad debt expense and real
estate tax expense of approximately $19,900 relating to the Property located in
Caro, Michigan, relating to past due rental and other amounts. The Partnership
intends to continue to pursue the collection of such amounts.
The increase in operating expenses during the quarter and six months
ended June 30, 1997, as compared to the quarter and six months ended June 30,
1996, is partially offset by a decrease in accounting and administrative
expenses associated with operating the Partnership and its Properties.
In addition, during the quarter and six months ended June 30, 1997, the
Partnership established an allowance for loss on land and building for its
Property in Whitehall, Michigan, in the amount of $79,777 for financial
reporting purposes. The allowance represents the difference between (i) the
Property's carrying value at June 30, 1997, plus the additional rental income
(accrued rental income) that the Partnership had recognized since inception of
the lease relating to the straight-lining of future scheduled rent increases
minus (ii) the net realizable value of $629,888 received as net sales proceeds
in conjunction with the sale of this property in July 1997, as discussed above
in "Liquidity and Capital Resources".
13
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. Inapplicable.
Item 2. Changes in Securities. Inapplicable.
Item 3. Defaults upon Senior Securities. Inapplicable.
Item 4. Submission of Matters to a Vote of Security Holders.
Inapplicable.
Item 5. Other Information. Inapplicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits - None.
(b) No reports on Form 8-K were filed during the
quarter ended June 30, 1997.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
DATED this day of August, 1997.
CNL INCOME FUND VI, LTD.
By: CNL REALTY CORPORATION
General Partner
By: /s/ James M. Seneff, Jr.
JAMES M. SENEFF, JR.
Chief Executive Officer
(Principal Executive Officer)
By: /s/ Robert A. Bourne
ROBERT A. BOURNE
President and Treasurer
(Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the balance
sheet of CNL Income Fund VI, Ltd. at June 30, 1997, and its statement of income
for the six months then ended and is qualified in its entirety by reference to
the Form 10-Q of CNL Income Fund VI, Ltd. for the six months ended June 30,
1997.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 953,412
<SECURITIES> 0
<RECEIVABLES> 316,591
<ALLOWANCES> 224,402
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 25,306,612
<DEPRECIATION> 3,406,536
<TOTAL-ASSETS> 29,835,091
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 28,822,514
<TOTAL-LIABILITY-AND-EQUITY> 29,835,091
<SALES> 0
<TOTAL-REVENUES> 1,617,770
<CGS> 0
<TOTAL-COSTS> 345,168
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 13,102
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,353,147
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,353,147
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,353,147
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Due to the nature of its industry, CNL Income Fund VI, LTD
has an unclassified balance sheet, therefore, no values are shown above
for current assets and current liabilities.
</FN>
</TABLE>
