UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
June 3, 1999
Date of Report (Date of earliest event
reported):
CNL INCOME FUND VI, LTD.
(Exact name of Registrant as specified in its Charter)
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Florida 0-19144 59-2922954
(State or Other Jurisdiction of (Commission File Number) (IRS Employer Identification Number)
Incorporation or Organization)
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400 E. South Street, Orlando, Florida 32801
(Address of principal executive offices, including zip code)
(407) 650-1000
(Registrant's telephone number, including area code)
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Item 2. Acquisition or Disposition of Assets.
Disposition of Properties
On June 3, 1999, a tenant of CNL Income Fund VI, Ltd. ("CNL
VI") exercised the options under its four lease agreements to purchase four of
the partnership's properties. The properties were Burger King properties (one in
each of Sevierville, Walker Springs, Broadway and Greeneville, Tennessee).
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(a) Financial Statements
Not applicable.
(b) Pro Forma Financial Information
Pro Forma Balance Sheet as of March 31, 1999
Pro Forma Statement of Income for the quarter ended
March 31, 1999
Pro Forma Statement of Income for the year ended
December 31, 1998
Notes to Pro Forma Financial Statements for the
quarter ended March 31, 1999 and the year ended
December 31, 1998
(c) Exhibits
Not applicable.
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INDEX TO PRO FORMA FINANCIAL STATEMENTS
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Page
CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)
Pro Forma Financial Information (unaudited):
Pro Forma Balance Sheet as of March 31, 1999
Pro Forma Statement of Income for the quarter ended March 31, 1999
Pro Forma Statement of Income for the year ended December 31, 1998
Notes to Pro Forma Financial Statements for the quarter ended March 31, 1999
and the year ended December 31, 1998
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PRO FORMA FINANCIAL INFORMATION
The following pro forma financial information gives effect to the sales
by CNL VI of four properties consisting of land and building as a result of a
tenant exercising the options under its four lease agreements to purchase four
Burger King properties and the receipt by CNL VI of $4,318,145 in net sales
proceeds.
The Pro Forma Balance Sheet as of March 31, 1999 has been adjusted to
give effect to these transactions, as if they had occurred on March 31, 1999.
The Pro Forma Statements of Income for the quarter ended March 31, 1999
and the year ended December 31, 1998 have been adjusted to give effect to these
transactions as if they had occurred at the beginning of the periods presented.
The pro forma financial information is presented for informational
purposes only and does not purport to be indicative of CNL VI's financial
results or condition if the transactions reflected therein had occurred on the
dates, or been in effect during the periods, indicated. The pro forma financial
information should not be viewed as predictive of CNL VI's financial results or
condition in the future.
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CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)
UNAUDITED PRO FORMA BALANCE SHEET
March 31, 1999
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Pro Forma
ASSETS Historical Adjustments Pro Forma
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Land and buildings on operating leases,
less accumulated depreciation $ 18,446,004 $ (3,093,543 ) (a) $ 15,352,461
Net investment in direct financing leases (b) 3,913,621 3,913,621
Investment in joint ventures 5,064,213 5,064,213
Cash and cash equivalents 1,158,507 1,158,507
Restricted cash -- 4,318,145 (a) 4,318,145
Receivables 63,010 63,010
Prepaid expenses 8,422 8,422
Lease costs, less accumulated amortization 10,106 10,106
Accrued rental income 809,258 (390,529 ) (a) 418,729
Other assets 26,731 26,731
--------------- --------------- ---------------
$ 29,499,872 $ 834,073 $ 30,333,945
=============== =============== ===============
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 38,776 $ $ 38,776
Accrued and escrowed real estate taxes payable 5,041 5,041
Distributions payable 787,500 787,500
Due to related parties 9,648 9,648
Rents paid in advance and deposits 47,442 47,442
--------------- --------------- ---------------
Total liabilities 888,407 888,407
Minority interest 147,449 147,449
Partners' capital 28,464,016 834,073 (a) 29,298,089
--------------- --------------- ---------------
$ 29,499,872 $ 834,073 $ 30,333,945
=============== =============== ===============
See accompanying notes to unaudited pro forma
financial statements.
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CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)
UNAUDITED PRO FORMA STATEMENT OF INCOME
QUARTER ENDED MARCH 31, 1999
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Pro Forma
Historical Adjustments Pro Forma
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Revenues:
Rental income from operating leases $ 600,737 $ (109,880 ) (1) $ 490,857
Earned income from direct financing leases (2) 112,080 -- 112,080
Contingent rental income 9,175 -- 9,175
Interest and other income 15,456 -- 15,456
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737,448 (109,880 ) 627,568
--------------- --------------- ---------------
Expenses:
General operating and administrative 40,783 -- 40,783
Professional services 4,710 -- 4,710
State and other taxes 9,466 -- 9,466
Depreciation and amortization 114,253 (19,623 ) (2) 94,630
Transaction costs 33,125 -- 33,125
--------------- --------------- ---------------
202,337 (19,623 ) 182,714
--------------- --------------- ---------------
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 535,111 (90,257 ) 444,854
Minority Interest in Income of Consolidated
Joint Venture (2,500 ) -- (2,500 )
Equity in Earnings of Unconsolidated Joint
Ventures 123,775 -- 123,775
--------------- --------------- ---------------
Net Income $ 656,386 $ (90,257 ) $ 566,129
=============== =============== ===============
Net Income Per Limited Partner Unit $ 9.28 $ 8.01
=============== ===============
Weighted Average Number of Units Outstanding 70,000 70,000
=============== ===============
See accompanying notes to unaudied pro forma
financial statements.
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CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)
UNAUDITED PRO FORMA STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1998
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Pro Forma
Historical Adjustments Pro Forma
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Revenues:
Rental income from operating leases $ 2,520,346 $ (439,519 ) (1) $ 2,080,827
Adjustments to accrued rental income (167,227 ) -- (167,227 )
Earned income from direct financing leases (2) 470,258 -- 470,258
Contingent rental income 156,676 -- 156,676
Interest and other income 110,502 -- 110,502
--------------- --------------- ---------------
3,090,555 (439,519 ) 2,651,036
--------------- --------------- ---------------
Expenses:
General operating and administrative 160,358 -- 160,358
Professional services 32,400 -- 32,400
Bad debt expense 12,854 -- 12,854
State and other taxes 10,392 -- 10,392
Depreciation and amortization 458,558 (78,490 ) (2) 380,068
Transaction costs 20,211 -- 20,211
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694,773 (78,490 ) 616,283
--------------- --------------- ---------------
Income Before Minority Interest in Income of
Consolidated Joint Venture, Equity in Earnings
of Unconsolidated Joint Ventures and Gain
on Sale of Land, Buildings and Net
Investment in Direct Financing Leases 2,395,782 (361,029 ) 2,034,753
Minority Interest in Income of Consolidated
Joint Venture (43,128 ) -- (43,128 )
Equity in Earnings of Unconsolidated Joint
Ventures 323,105 -- 323,105
Gain on Sale of Land, Buildings and Net
Investment in Direct Financing Leases 345,122 732,899 (3) 1,078,021
--------------- --------------- ---------------
Net Income $ 3,020,881 $ 371,870 $ 3,392,751
=============== =============== ===============
Net Income Per Limited Partner Unit $ 42.75 $ 48.03
=============== ===============
Weighted Average Number of Units Outstanding 70,000 70,000
=============== ===============
See accompanying notes to unaudited pro forma
financial statements.
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CNL INCOME FUND VI, LTD.
(A Florida Limited Partnership)
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
FOR THE QUARTER ENDED MARCH 31, 1999 AND THE
YEAR ENDED DECEMBER 31, 1998
Pro Forma Balance Sheet:
(a) Represents net sales proceeds of $4,318,145 from the sale of four
Burger King properties resulting from the tenant exercising the option
under its four lease agreements to purchase the properties on June 3,
1999.
The pro forma adjustments to land and buildings on operating leases as
a result of the above transaction were as follows:
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Net Carrying Value
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Net Sales Land and
Proceeds Building Gain on
(excludes on Sale of
closing Operating Accrued Land and
costs) Leases, net rent Buildings
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Burger King - Greenville, TN $1,059,373 $ 763,473 $ 101,012 $ 194,888
Burger King - Sevierville, TN 1,168,298 774,297 87,945 306,056
Burger King - Walker Springs, TN 1,031,274 760,843 96,502 173,929
Burger King - Broadway, TN 1,059,200 794,930 105,070 159,200
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Total $4,318,145 $3,093,543 $ 390,529 $ 834,073
============= ============= ============ ============
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(b) When the properties are sold, the related cost and accumulated
depreciation for operating leases, plus any accrued rental income, are
removed from the accounts and gains or losses from sales are reflected
in income.
Pro Forma Statements of Income:
(1) Represents a decrease in rental income from operating leases due to the
sales of four Burger King properties actually sold on June 3, 1999, as
if they had been sold on January 1, 1998. In accordance with generally
accepted accounting principles, lease revenue from these leases
accounted for under the operating method was recognized over the terms
of the leases. As a result of these operating leases providing
escalating guaranteed minimum rents, income was reported on a
straight-line basis over the terms of the leases.
(2) Represents the decrease in depreciation expense for the building
portions of the four Burger King properties actually sold on June 3,
1999, as if they had been sold on January 1, 1998. The buildings were
historically depreciated using the straight-line method over an
estimated useful life of 30 years.
(3) Represents the gain on sale of land and buildings relating to the four
Burger King properties actually sold on June 3, 1999, as if the
properties had been sold on January 1, 1998.
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SIGNATURE
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 hereunto duly authorized.
CNL INCOME FUND VI, LTD.
Date: June 18, 1999 By: /s/ James M. Seneff, Jr.
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James M. Seneff, Jr.
General Partner
