<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the balance
sheet of CNL Income Fund IX, Ltd. at September 30, 1996, and its statement of
income for the nine months then ended and is qualified in its entirety by
reference to the 10-Q of CNL Income Fund IX, Ltd. for the nine months ended
September 30, 1996.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 1,289,787
<SECURITIES> 0
<RECEIVABLES> 33,895
<ALLOWANCES> 25,739
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 16,043,836
<DEPRECIATION> 1,183,416
<TOTAL-ASSETS> 31,368,687
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 30,379,413
<TOTAL-LIABILITY-AND-EQUITY> 31,368,687
<SALES> 0
<TOTAL-REVENUES> 2,167,598
<CGS> 0
<TOTAL-COSTS> 347,850
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,157,615
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,157,615
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,157,615
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Due to the nature of its industry, CNL Income Fund IX, Ltd. has an
unclassified balance sheet; therefore, no values are shown above for current
assets and current liabilities.
</FN>
</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, 1996
-----------------------------------
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
0-20017
----------------------
CNL Income Fund IX, Ltd.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 59-3004138
- ---------------------------- -------------------------------
(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
Notes to Condensed Financial Statements 5
Item 2. Management's Discussion and Analysis
of Financial Condition and
Results of Operations 6-8
Part II
Other Information
9
CNL INCOME FUND IX, LTD.
(A Florida Limited Partnership)
CONDENSED BALANCE SHEETS
September 30, December 31,
ASSETS 1996 1995
------ ------------- ------------
Land and buildings on operating
leases, less accumulated
depreciation of $1,183,416 and
$994,804 $14,860,420 $15,049,032
Net investment in direct financing
leases 7,993,456 8,054,681
Investment in joint ventures 5,737,212 5,851,988
Cash and cash equivalents 1,289,787 1,117,382
Receivables, less allowance for
doubtful accounts of $25,739 and
$14,762 8,156 163,079
Prepaid expenses 7,678 932
Organization costs, less
accumulated amortization of
$10,000 and $9,444 - 556
Accrued rental income 1,471,978 1,279,605
----------- -----------
$31,368,687 $31,517,255
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
Accounts payable $ 3,782 $ 838
Accrued and escrowed real estate
taxes payable 72,851 53,656
Distributions payable 787,501 822,500
Due to related parties 5,614 6,044
Rents paid in advance and deposits 119,526 49,916
----------- -----------
Total liabilities 989,274 932,954
Partners' capital 30,379,413 30,584,301
----------- -----------
$31,368,687 $31,517,255
=========== ===========
See accompanying notes to condensed financial statements.
CNL INCOME FUND IX, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF INCOME
Quarter Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
---------- ---------- ---------- ----------
Revenues:
Rental income from
operating leases $ 467,434 $ 469,838 $1,392,583 $1,411,704
Earned income from
direct financing leases 229,006 231,319 688,805 695,510
Contingent rental income 19,321 13,763 39,819 31,320
Interest and other income 13,871 13,645 46,391 42,540
---------- ---------- ---------- ----------
729,632 728,565 2,167,598 2,181,074
---------- ---------- ---------- ----------
Expenses:
General operating and
administrative 41,723 32,509 120,980 88,691
Professional services 5,029 5,210 18,196 16,069
Real estate taxes - (4,895) 9,905 6,827
State and other taxes - - 9,601 11,123
Depreciation and amorti-
zation 62,870 63,372 189,168 190,113
---------- ---------- ---------- ----------
109,622 96,196 347,850 312,823
---------- ---------- ---------- ----------
Income Before Equity in
Earnings of Joint
Ventures 620,010 632,369 1,819,748 1,868,251
Equity in Earnings of
Joint Ventures 116,220 115,815 337,867 337,611
---------- ---------- ---------- ----------
Net Income $ 736,230 $ 748,184 $2,157,615 $2,205,862
========== ========== ========== ==========
Allocation of Net Income:
General partners $ 7,362 $ 7,482 $ 21,576 $ 22,059
Limited partners 728,868 740,702 2,136,039 2,183,803
---------- ---------- ---------- ----------
$ 736,230 $ 748,184 $2,157,615 $2,205,862
========== ========== ========== ==========
Net Income Per Limited
Partner Unit $ 0.21 $ 0.21 $ 0.61 $ 0.62
========== ========== ========== ==========
Weighted Average Number
of Limited Partner
Units Outstanding 3,500,000 3,500,000 3,500,000 3,500,000
========== ========== ========== ==========
See accompanying notes to condensed financial statements.
CNL INCOME FUND IX, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF PARTNERS' CAPITAL
Nine Months Ended Year Ended
September 30, December 31,
1996 1995
----------------- ------------
General partners:
Beginning balance $ 133,789 $ 103,909
Net income 21,576 29,880
----------- -----------
155,365 133,789
----------- -----------
Limited partners:
Beginning balance 30,450,512 30,677,425
Net income 2,136,039 2,958,091
Distributions ($0.68 and $0.91
per limited partner unit,
respectively) (2,362,503) (3,185,004)
----------- -----------
30,224,048 30,450,512
----------- -----------
Total partners' capital $30,379,413 $30,584,301
=========== ===========
See accompanying notes to condensed financial statements.
CNL INCOME FUND IX, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF CASH FLOWS
Nine Months Ended
September 30,
1996 1995
----------- -----------
Increase (Decrease) in Cash and
Cash Equivalents:
Net Cash Provided by
Operating Activities $ 2,569,907 $ 2,396,906
----------- -----------
Cash Flows from Financing
Activities:
Distributions to limited
partners (2,397,502) (2,362,500)
----------- -----------
Net cash used in
financing activities (2,397,502) (2,362,500)
----------- -----------
Net Increase in Cash and Cash
Equivalents 172,405 34,406
Cash and Cash Equivalents at
Beginning of Period 1,117,382 1,169,110
----------- -----------
Cash and Cash Equivalents at
End of Period $ 1,289,787 $ 1,203,516
=========== ===========
Supplemental Schedule of Non-Cash
Investing and Financing
Activities:
Net investment in direct
financing lease reclassified
as building under operating
lease $ - $ 552,301
=========== ===========
Distributions declared and
unpaid at end of period $ 787,501 $ 787,500
=========== ===========
See accompanying notes to condensed financial statements.
CNL INCOME FUND IX, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Nine Months Ended September 30, 1996 and 1995
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, 1996, may not be
indicative of the results that may be expected for the year ending
December 31, 1996. Amounts as of December 31, 1995, 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 IX, Ltd. (the "Partnership") for the year ended December 31,
1995.
Effective January 1, 1996, the Partnership adopted 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 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. Adoption of this standard had no
material effect on the Partnership's financial position or results of
operations.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
CNL Income Fund IX, Ltd. (the "Partnership") is a Florida limited
partnership that was organized on April 16, 1990, 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 (the "Properties"), which are leased primarily to operators of
selected national and regional fast-food and family-style restaurant chains.
The leases are generally triple-net leases, with the lessees responsible for
all repairs and maintenance, property taxes, insurance and utilities. As of
September 30, 1996, the Partnership owned 40 Properties, including interests
in 13 Properties owned by joint ventures in which the Partnership is a co-
venturer.
Liquidity and Capital Resources
- -------------------------------
The Partnership's primary source of capital for the nine months ended
September 30, 1996 and 1995, 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
$2,569,907 and $2,396,906 for the nine months ended September 30, 1996 and
1995, respectively. The increase in cash from operations for the nine months
ended September 30, 1996, is primarily a result of changes in the
Partnership's working capital.
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 September 30, 1996, the Partnership
had $1,289,787 invested in such short-term investments as compared to
$1,117,382 at December 31, 1995. The funds remaining at September 30, 1996,
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,
increased to $989,274 at September 30, 1996, from $932,954 at December 31,
1995, primarily as a result of an increase in rents paid in advance during the
nine months ended September 30, 1996. The general partners believe that the
Partnership has sufficient cash on hand to meet its current working capital
needs.
Based primarily on cash from operations, the Partnership declared
distributions to the limited partners of $2,362,503 and $2,362,500 for the
nine months ended September 30, 1996 and 1995, respectively ($787,501 and
$787,500 for the quarters ended September 30, 1996 and 1995, respectively).
This represents distributions for each applicable nine months of $0.68 per
unit ($0.23 per unit for each applicable quarter). No distributions were made
to the general partners for the quarters and nine months ended September 30,
1996 and 1995. No amounts distributed or to be distributed to the limited
partners for the nine months ended September 30, 1996 and 1995, 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.
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, 1996 and 1995, the
Partnership owned and leased 27 wholly owned Properties to operators of fast-
food and family-style restaurant chains. In connection therewith, during the
nine months ended September 30, 1996 and 1995, the Partnership earned
$2,081,388 and $2,107,214, respectively, in rental income from operating
leases and earned income from direct financing leases from these Properties,
$696,440 and $701,157 of which was earned during the quarters ended September
30, 1996 and 1995, respectively. The decrease in rental and earned income was
primarily attributable to the Partnership's establishing an allowance for
doubtful accounts of $14,000 relating to the Property in Copley Township,
Ohio, during the nine months ended September 30, 1996. The operator remains
responsible for payment of this amount; however, due to the current financial
difficulties the operator is experiencing, the general partners believe
collection of this amount is doubtful. The Partnership will continue to
pursue the collection of such amounts and will recognize such amounts as
income if collected.
During the nine months ended September 30, 1996 and 1995, the
Partnership also earned $39,819 and $31,320, respectively, in contingent
rental income, $19,321 and $13,763 of which was earned during the quarters
ended September 30, 1996 and 1995, respectively. The increase in contingent
rental income is primarily attributable to an increase in gross sales of
certain restaurant Properties requiring the payment of contingent rental
income.
For the nine months ended September 30, 1996 and 1995, the Partnership
also owned and leased 13 Properties indirectly through joint venture
arrangements. In connection therewith, during the nine months ended September
30, 1996 and 1995, the Partnership earned $337,867 and $337,611, respectively,
attributable to net income earned by these joint ventures, $116,220 and
$115,815 of which was earned during the quarters ended September 30, 1996 and
1995, respectively.
Operating expenses, including depreciation and amortization expense,
were $347,850 and $312,823 for the nine months ended September 30, 1996 and
1995, respectively, of which $109,622 and $96,196 was incurred for the
quarters ended September 30, 1996 and 1995, respectively. The increase in
operating expenses during the quarter and nine months ended September 30,
1996, as compared to the quarter and nine months ended September 30, 1995, is
primarily the result of an increase in accounting and administrative expenses
associated with operating the Partnership and its Properties and insurance
expense as a result of the general partners' obtaining contingent liability
and property coverage for the Partnership, effective May 1995. 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. Operating expenses also increased during the nine
months ended September 30, 1996, as compared to the nine months ended
September 30, 1995, as a result of an increase in professional services as a
result of appraisal updates obtained to prepare an annual statement of unit
valuation to qualified plans in accordance with the Partnership's partnership
agreement.
As a result of the former tenant of the Property in Copley Township,
Ohio, defaulting under the terms of its lease during 1994, the Partnership
incurred real estate taxes relating to this Property during the nine months
ended September 30, 1996 and 1995. Currently, the Partnership is negotiating
a lease with the franchisee operating the restaurant located on the Property
on a month-to-month basis and anticipates that the franchisee will pay a
portion of the 1996 real estate taxes.
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, 1996.
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 28th day of October, 1996.
CNL INCOME FUND IX, 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)
