<PAGE>
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, 1999
-------------------------------------------------
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
0-20016
---------------------------------------
CNL Income Fund X, Ltd.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 59-3004139
- ------------------------------------------- ----------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
450 South Orange Avenue
Orlando, Florida 32801
- ------------------------------------------- ----------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number
(including area code) (407) 540-2000
----------------------------------
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
--------
Page
Part I. ----
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 9-19
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 19
Part II.
Other Information 20-22
<PAGE>
CNL INCOME FUND X, LTD.
(A Florida Limited Partnership)
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------------- -------------------
<S> <C> <C>
ASSETS
------
Landand buildings on operating leases, less
accumulated depreciation of $1,570,638 and
$329,832 in 1999 and 1998, respectively, and
allowance for loss on land and building of $908,518
in 1999 and 1998 $ 16,833,463 $ 16,685,182
Net investment in direct financing leases, less allowance
for impairment in carrying value of $93,328 in 1998 9,444,195 10,713,000
Investment in joint ventures 4,163,622 3,421,329
Cash and cash equivalents 1,953,610 1,835,972
Restricted cash -- 361,403
Receivables, less allowance for doubtful accounts of
$183,730 and $236,810 in 1999 and 1998,
respectively 29,338 81,100
Prepaid expenses 23,159 5,229
Accrued rental income, less allowance for doubtful
accounts of $269,421 in 1998 1,338,378 1,342,166
Other assets 35,584 35,484
------------------- -------------------
$ 33,821,349 $ 34,480,865
=================== ===================
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
Accounts payable $ 143,163 $ 2,403
Accrued and escrowed real estate taxes payable 26,021 27,418
Distributions payable 900,001 900,001
Due to related party 10,778 29,987
Rents paid in advance and deposits 105,497 103,414
------------------- -------------------
Total liabilities 1,185,460 1,063,223
Commitments and Contingencies (Note 6)
Minority interest 64,350 64,745
Partners' capital 32,571,539 33,352,897
------------------- -------------------
$ 33,821,349 $ 34,480,865
=================== ===================
</TABLE>
See accompanying notes to condensed financial statements.
1
<PAGE>
CNL INCOME FUND X, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Rental income from operating leases $434,545 $ 499,787 $1,399,442 $1,396,043
Adjustments to accrued rental income (6,099) (13,155) (18,296) (445,370)
Earned income from direct financing leases 263,036 353,378 826,051 976,635
Contingent rental income 6,940 6,239 10,500 16,894
Interest and other income 11,179 27,008 42,641 85,774
------------ ------------ ------------ ------------
709,601 873,257 2,260,338 2,029,976
------------ ------------ ------------ ------------
Expenses:
General operating and administrative 39,069 43,273 125,844 126,834
Bad debt expense -- -- -- 5,887
Professional services 15,722 7,277 45,748 20,636
Real estate taxes 4,351 14,004 21,261 23,578
State and other taxes -- -- 14,682 10,520
Depreciation 84,256 71,349 240,806 187,745
Transaction costs 67,658 -- 192,107 --
------------ ------------ ------------ ------------
211,056 135,903 640,448 375,200
------------ ------------ ------------ ------------
Income Before Minority Interest in Income of
Consolidated Joint Venture, Equity in
Earnings of Unconsolidated Joint Ventures,
and Gain (Loss) on Sale of Land, Buildings
and Net Investment in Direct Financing Lease 498,545 737,354 1,619,890 1,654,776
Minority Interest in Income of Consolidated
Joint Venture (2,193) (2,337) (6,171) (6,592)
Equity in Earnings of Unconsolidated Joint
Ventures 95,933 76,163 272,427 213,432
Gain (Loss) on Sale of Land, Buildings and Net
Investment in Direct Financing Lease (42,141) -- 32,499 171,159
------------ ------------ ------------ ------------
Net Income $550,144 $ 811,180 $1,918,645 $2,032,775
============ ============ ============ ============
Allocation of Net Income:
General partners $ 5,642 $ 8,112 $ 18,583 $ 18,616
Limited partners 544,502 803,068 1,900,062 2,014,159
------------ ------------ ------------ ------------
$550,144 $ 811,180 $1,918,645 $2,032,775
============ ============ ============ ============
Net Income Per Limited Partner Unit $ 0.14 $ 0.20 $ 0.48 $ 0.50
============ ============ ============ ============
Weighted Average Number of Limited Partner
Units Outstanding 4,000,000 4,000,000 4,000,000 4,000,000
============ ============ ============ ============
</TABLE>
See accompanying notes to condensed financial statements.
2
<PAGE>
CNL INCOME FUND X, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF PARTNERS' CAPITAL
<TABLE>
<CAPTION>
Nine Months Ended Year Ended
September 30, December 31,
1999 1998
-------------------------- --------------------------
<S> <C> <C>
General partners:
Beginning balance $ 229,725 $ 208,709
Net income 18,583 21,016
------------------ ------------------
248,308 229,725
------------------ ------------------
Limited partners:
Beginning balance 33,123,172 34,945,334
Net income 1,900,062 1,857,842
Distributions ($0.68 and $0.92 per
limited partner unit, respectively) (2,700,003) (3,680,004)
------------------ ------------------
32,323,231 33,123,172
------------------ ------------------
Total partners' capital $32,571,539 $33,352,897
================== ==================
</TABLE>
See accompanying notes to condensed financial statements.
3
<PAGE>
CNL INCOME FUND X, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1999 1998
---------------- ---------------
<S> <C> <C>
Increase (Decrease) in Cash and Cash Equivalents
Net Cash Provided by Operating Activities $2,442,140 $2,774,783
---------------- ---------------
Cash Flows from Investing Activities:
Proceeds from sale of land and buildings 2,081,725 1,231,106
Additions to land and buildings on operating
leases (1,257,217) --
Investment in joint ventures (802,431) --
Decrease (increase) in restricted cash 359,990 (1,140,970)
---------------- ---------------
Net cash provided by investing activities 382,067 90,136
---------------- ---------------
Cash Flows from Financing Activities:
Distributions to limited partners (2,700,003) (2,780,003)
Distributions to holder of minority interest (6,566) (6,613)
---------------- ---------------
Net cash used in financing activities (2,706,569) (2,786,616)
---------------- ---------------
Net Increase in Cash and Cash Equivalents 117,638 78,303
Cash and Cash Equivalents at Beginning of Period 1,835,972 1,583,883
---------------- ---------------
Cash and Cash Equivalents at End of Period $1,953,610 $1,662,186
================ ===============
Supplemental Schedule of Non-Cash Financing
Activities:
Distributions declared and unpaid at end of
period $ 900,001 $ 900,001
================ ===============
</TABLE>
See accompanying notes to condensed financial statements.
4
<PAGE>
CNL INCOME FUND X, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Nine Months Ended September 30, 1999 and 1998
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, 1999, may not be
indicative of the results that may be expected for the year ending
December 31, 1999. Amounts as of December 31, 1998, 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 X, Ltd. (the "Partnership") for the year ended December 31,
1998.
The Partnership accounts for its 88.26% interest in Allegan Real Estate
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 on Operating Leases:
--------------------------------------
In March 1999, the Partnership sold its property in Amherst, New York,
received net sales proceeds of $1,150,000 and recorded a gain of
$74,640 for financial reporting purposes (see Note 3). In March 1999,
the Partnership reinvested the net sales proceeds, plus additional
funds, in a Golden Corral property in Fremont, Nebraska.
In August 1999, the Partnership sold its property in Fort Myers Beach,
Florida for $931,725 and recorded a loss of $42,141 for financial
reporting purposes. (See Note 3).
3. Net Investment in Direct Financing Leases:
-----------------------------------------
At December 31, 1998, the Partnership had recorded an allowance of
$93,328 for the impairment in the carrying value of the Property in
Amherst, New York, due to the tenant filing for bankruptcy. The
allowance represented the difference between the carrying value of the
property at December 31, 1998 and the estimated net realizable value
for this property. In March 1999, the Partnership sold this property,
received net sales proceeds of $1,150,000 and recorded a gain of
$74,640 for financial reporting purposes, resulting in an aggregate net
loss of approximately $18,700. The building portion of this property
5
<PAGE>
CNL INCOME FUND X, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Nine Months Ended September 30, 1999 and 1998
3. Net Investment in Direct Financing Leases - Continued:
-----------------------------------------------------
had been classified as a direct financing lease. In connection
therewith, the gross investment (minimum lease payments receivable and
the estimated residual value), unearned income, and the allowance for
impairment in carrying value relating to the building were removed from
the accounts and the gain from the sale of the property was reflected
in income (see Note 2).
In August 1999, the Partnership sold its property in Fort Myers Beach,
Florida for which the building portion had been classified as a direct
financing lease. In connection therewith, the gross investment (minimum
lease payments receivable and the estimated residual value) and
unearned income relating to the building were removed from the accounts
and the loss from the sale of the property was reflected in income.
(see Note 2).
4. Investment in Joint Ventures:
----------------------------
In January 1999, the Partnership entered into a joint venture
arrangement, Ocean Shores Joint Venture, with CNL Income Fund XVII,
Ltd., an affiliate of the general partners, to own and lease one
restaurant property. The Partnership contributed approximately $802,400
to the joint venture and as of September 30, 1999, owned a 69.06%
interest in the profits and losses of the joint venture. The
Partnership accounts for its investment in this joint venture under the
equity method since the Partnership shares control with an affiliate.
6
<PAGE>
CNL INCOME FUND X, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Nine Months Ended September 30, 1999 and 1998
4. Investment in Joint Ventures - Continued:
----------------------------------------
The following presents the combined, condensed financial information
for all of the Partnership's investments in joint ventures and
properties held as tenants-in-common at:
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------------- -------------------
<S> <C> <C>
Land and buildings on operating
leases, less accumulated
depreciation $ 9,517,730 $ 9,340,944
Net investment in direct
financing leases 1,458,642 657,426
Cash 6,520 2,935
Receivables -- 7,597
Prepaid expenses 15,838 24,337
Accrued rental income 46,860 19,880
Liabilities 3,887 3,119
Partners' capital 11,041,703 10,050,000
Revenues 928,472 1,115,856
Net income 719,208 843,914
</TABLE>
The Partnership recognized income totaling $272,427 and $213,432 for
the nine months ended September 30, 1999 and 1998, respectively, from
these joint ventures, $95,933 and $76,163 of which was earned during
the quarters ended September 30, 1999 and 1998, respectively.
5. Related Party Transactions:
---------------------------
On September 1, 1999, CNL American Properties Fund, Inc. ("APF"), an
affiliate of the general partners, acquired CNL Fund Advisors, Inc.
("CFA"), an affiliate who provides certain services relating to
management of the Partnership and its properties pursuant to a
management agreement with the Partnership. As a result of this
acquisition, CFA became a wholly owned subsidiary of APF; however, the
terms of the management agreement between the Partnership and CFA
remain unchanged and in effect.
7
<PAGE>
CNL INCOME FUND X, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Nine Months Ended September 30, 1999 and 1998
6. Commitments and Contingencies:
-----------------------------
On March 11, 1999, the Partnership entered into an Agreement and Plan
of Merger with CNL American Properties Fund, Inc. ("APF"), pursuant to
which the Partnership would be merged with and into a subsidiary of APF
(the "Merger"). As consideration for the Merger, APF has agreed to
issue 2,121,622 shares of its common stock, par value $0.01 per share
(the "APF Shares"). In order to assist the general partners in
evaluating the proposed merger consideration, the general partners
retained Valuation Associates, a nationally recognized real estate
appraisal firm, to appraise the Partnership's restaurant property
portfolio. Based on Valuation Associates' appraisal, the fair value of
the Partnership's property portfolio and other assets was $41,779,262
as of December 31, 1998. The APF Shares are expected to be listed for
trading on the New York Stock Exchange concurrently with the
consummation of the Merger, and therefore, would be freely tradable at
the option of the former limited partners. At a special meeting of the
partners that is expected to be held in the first quarter of 2000,
limited partners holding in excess of 50% of the Partnership's
outstanding limited partnership interests must approve the Merger prior
to consummation of the transaction. If the limited partners at the
special meeting approve the Merger, APF will own the properties and
other assets of the Partnership. The general partners intend to
recommend that the limited partners of the Partnership approve the
Merger. In connection with their recommendation, the general partners
will solicit the consent of the limited partners at the special
meeting. If the limited partners reject the Merger, the Partnership
will bear the portion of the transaction costs based upon the
percentage of "For" votes and the general partners will bear the
portion of such transaction costs based upon the percentage of
"Against" votes and abstentions.
On May 11, 1999, four limited partners in several of the CNL Income
Funds served a lawsuit against the general partners and APF in
connection with the proposed Merger. On July 8, 1999, the plaintiffs
amended the complaint to add three additional limited partners as
plaintiffs. Additionally, on June 22, 1999, a limited partner in
certain of the CNL Income Funds served a lawsuit against the general
partners, APF, CNL Fund Advisors, Inc. and certain of its affiliates in
connection with the proposed Merger. On September 23, 1999, the judge
assigned to the two lawsuits entered an order consolidating the two
cases. Pursuant to this order, the plaintiffs in these cases filed a
consolidated and amended complaint on November 8, 1999. The various
defendants, including the general partners, have 45 days to respond to
that consolidated complaint. The general partners and APF believe that
the lawsuits are without merit and intend to defend vigorously against
the claims. See Part II - Item 1. Legal Proceedings.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
CNL Income Fund X, 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, 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
September 30, 1999, the Partnership owned 48 Properties, which included
interests in ten Properties owned by joint ventures in which the Partnership is
a co-venturer and two Properties owned with affiliates of the general partners
as tenants-in-common.
Capital Resources
- -----------------
The Partnership's primary source of capital for the nine months ended
September 30, 1999 and 1998 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
$2,442,140 and $2,774,783 for the nine months ended September 30, 1999 and 1998,
respectively. The decrease in cash from operations for the nine months ended
September 30, 1999, was primarily a result of changes in the Partnership's
working capital.
Other sources and uses of capital included the following during the
nine months ended September 30, 1999.
In January 1999, the Partnership used a portion of the net proceeds
from the sales of properties during 1998 and 1997 to enter into a joint venture
arrangement, Ocean Shores Joint Venture, with CNL Income Fund XVII, Ltd., an
affiliate of the general partners, to own and lease one restaurant property. The
Partnership contributed approximately $802,400 to the joint venture and as of
September 30, 1999, owned a 69.06% interest in the profits and losses of the
joint venture.
In March 1999, the Partnership sold its Property in Amherst, New York
and received net sales proceeds of $1,150,000. The Partnership had recorded an
allowance for impairment in the carrying value relating to this Property of
$93,328 at December 31, 1998 due to the tenant filing for bankruptcy. The
allowance represented the difference between the carrying value of the property
at December 31, 1998 and the estimated net realizable value for this property.
During the nine months ended September 30, 1999, the Partnership recorded a gain
relating to the sale of this Property of $74,640 for financial reporting
purposes, resulting in an aggregate net loss of approximately $18,700. In March
1999, the Partnership reinvested the net sales proceeds plus additional funds,
in a Golden Corral Property in Fremont, Nebraska.
9
<PAGE>
In addition, in August 1999, the Partnership sold its Property in Fort
Myers Beach, Florida for $931,725, resulting in a loss of $42,141 for financial
reporting purposes. The Partnership intends to reinvest the net sales proceeds
from the sale of this Property in an additional Property.
Currently, rental income from the Partnership's Properties and any net
sales proceeds held by the Partnership pending reinvestment in additional
Properties, are invested in money market accounts or other short-term, highly
liquid investments such as demand deposit accounts at commercial banks,
certificates of deposit and money market accounts with less than a 30-day
maturity date, pending the Partnership's use of such funds to pay Partnership
expenses or to make distributions to the partners. At September 30, 1999, the
Partnership had $1,953,610 invested in such short-term investments, as compared
to $1,835,972 at December 31, 1998. The increase in cash and cash equivalents
was primarily attributable to the receipt of net sales proceeds relating to the
sale of the Property in Fort Myers Beach, Florida, as described above. The
increase in cash and cash equivalents was offset by a decrease due to the fact
that in January 1999 the Partnership used net sales proceeds from the 1997 and
1998 sales of Properties to enter into a joint venture arrangement with an
affiliate of the general partners, as described above. The funds remaining at
September 30, 1999, after payment of distributions and other liabilities, will
be used to invest in an additional Property and 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 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.
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 and, for the nine
months ended September 30, 1998, accumulated excess operating reserves, the
Partnership declared distributions to limited partners of $2,700,003 and
$2,780,003 for the nine months ended September 30, 1999 and 1998, respectively
($900,001 for each of the quarters ended September 30, 1999 and 1998). This
represents distributions of $0.68 and $0.70 per unit for the nine months ended
September 30, 1999 and 1998, respectively ($0.23 per unit for each quarter ended
September 30, 1999 and 1998). No distributions were made to the general partners
for the quarters and nine months ended September 30, 1999 and 1998. No amounts
distributed to the limited partners for the nine months ended September 30, 1999
and 1998, are required to be or have been treated by the Partnership as a return
of capital for purposes of
10
<PAGE>
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.
Total liabilities of the Partnership, including distributions payable,
increased to $1,185,460 at September 30, 1999, from $1,063,223 at December 31,
1998, primarily as a result of the Partnership accruing transaction costs
relating to the proposed merger with CNL American Properties Fund, Inc. ("APF"),
as described below. The general partners believe that the Partnership has
sufficient cash on hand to meet its current working capital needs.
Long-Term Liquidity
- -------------------
The Partnership has no long-term debt or other long-term liquidity
requirements.
Results of Operations
- ---------------------
During the nine months ended September 30, 1998, the Partnership and
its consolidated joint venture, Allegan Real Estate Joint Venture, owned and
leased 39 wholly owned Properties (which included one Property which was sold in
January 1998) to operators of fast-food and family-style restaurant chains.
During the nine months ended September 30, 1999, the Partnership and Allegan
Real Estate Joint Venture owned and leased 39 wholly owned Properties (which
included two Properties which were sold during 1999). During the nine months
ended September 30, 1999 and 1998, the Partnership and Allegan Real Estate Joint
Venture earned $2,207,197 and $1,927,308, respectively, in rental income from
operating leases (net of adjustments to accrued rental income) and earned income
from direct financing leases from these Properties, $691,482 and $840,010 of
which was earned during the quarters ended September 30, 1999 and 1998,
respectively. Rental and earned income was higher for the nine months ended
September 30, 1999, as compared to the nine months ended September 30, 1998, due
to the fact that in May 1998, the tenant of the Properties in Lancaster and
Amherst, New York filed for bankruptcy. As a result, during the nine months
ended September 30, 1998, the Partnership wrote off approximately $292,600 of
accrued rental income (non-cash accounting adjustment relating to the
straight-lining of future scheduled rent increases over the lease term in
accordance with generally accepted accounting principles) relating to both
Properties. No such amounts were written off during the nine months ended
September 30, 1999. Rental and earned income was also higher during the nine
months ended September 30, 1999, due to the fact that during the nine months
ended September 30, 1998, the Partnership increased the allowance for doubtful
accounts for past due rental amounts for these Properties in the amount of
$103,600 due to financial difficulties the tenants were experiencing. No such
allowance was established during the nine months ended September 30, 1999.
Rental and earned income during the nine months ended September 30,
1999 was also higher due to the fact the Partnership increased its reserve for
accrued rental income (non-cash accounting adjustment relating to the
straight-lining of future scheduled rent increases over the lease term in
accordance with generally accepted accounting principles) by approximately
$139,600 during the nine months ended September 30, 1998, due to financial
difficulties the tenant of the Property in Fort Pierce, Florida was
experiencing. The decrease in rental income
11
<PAGE>
for the quarter and nine months ended September 30, 1999 was partially due to
the fact that the tenant of the Property in Fort Pierce, Florida vacated the
Property in September 1999 and ceased making rental payments to the Partnership.
Due to the financial difficulties this tenant was experiencing, the Partnership
increased it's allowance for doubtful accounts for this tenant for the quarter
and nine months ended September 30, 1999. The Partnership is currently seeking
either a replacement tenant or purchaser for this Property.
The increase in rental and earned income during the nine months ended
September 30, 1999, was partially offset by, and the decrease in rental and
earned income for the quarter ended September 30, 1999, was partially due to, a
decrease in rental and earned income of approximately $33,300 and $105,200 for
the quarter and nine months ended September 30, 1999, respectively, due to the
fact that the tenant ceased making rental payments relating to the Property in
Lancaster, New York, in October 1998. The lost revenues resulting from this
Property could have an adverse effect on the results of operations of the
Partnership if the Partnership is unable to re-lease the Property in a timely
manner. The Partnership will not recognize rental income relating to this
Property until a new tenant is located or until the Property is sold and the
proceeds from such sale are reinvested in an additional Property.
The increase in rental and earned income for the nine months ended
September 30, 1999 was also offset by, and the decrease in rental and earned
income for the quarter ended September 30, 1999, was partially due to, a
decrease of approximately $35,000 and $84,300 during the nine months ended
September 30, 1999, respectively, due to the fact that in March 1999, the
Partnership sold the Property located in Amherst, New York, as described above
in "Capital Resources." Rental and earned income was higher during the nine
months ended September 30, 1999, due to the fact that the Partnership collected
and recognized as income approximately $38,000 of the past due rental amounts
for which the Partnership had previously established an allowance for doubtful
accounts relating to the Amherst Property, as described above.
The increase in rental and earned income for the nine months ended
September 30, 1999, was partially offset by, and the decrease in rental and
earned income for the quarter ended September 30, 1999, was partially due to, a
decrease in rental and earned income of approximately $23,700 and $97,300 for
the quarter and nine months ended September 30, 1999, respectively, due to the
fact that in October 1998, the tenant of the Boston Market Property in Homewood,
Alabama, filed for bankruptcy, rejected the lease relating to this Property and
ceased making rental payments to the Partnership. The Partnership will not
recognize rental and earned income from this Property until a new tenant for
this Property is located or until the Property is sold and the proceeds from
such a sale are reinvested in an additional Property. The lost revenues
resulting from the rejection of this lease could have an adverse effect on the
results of operations of the Partnership if the Partnership is not able to
re-lease this Property in a timely manner.
The increase in rental and earned income for the nine months ended
September 30, 1999, was also partially offset by, and the decrease in rental and
earned income for the quarter ended September 30, 1999, was partially due to, a
decrease of $11,800 and $56,500 for the quarter and
12
<PAGE>
nine months ended September 30, 1999, respectively, due to the fact that the
leases relating to three Burger King Properties were amended to provide for rent
reductions from August 1998 through the end of the lease term.
In addition, the increase during the nine months ended September 30,
1999 in rental and earned income was partially offset by, and the decrease in
rental and earned income for the quarter ended September 30, 1999, was partially
due to, a decrease of approximately $10,200 and $30,700 for the quarter and nine
months ended September 30, 1999, respectively, as a result of the sale of the
Property in Billings, Montana in October 1998. As a result of the reinvestment
of net sales proceeds from the 1998 sale of the Property in Sacramento,
California in a Property in San Marcos, Texas and the reinvestment of net sales
proceeds from the 1999 sale of the Property in Amherst, New York, in a Property
in Fremont, Nebraska, as described above in "Capital Resources", rental and
earned income increased by approximately $59,400 and $127,500 during the quarter
and nine months ended September 30, 1999, respectively.
In addition, the increase for the nine months ended September 30, 1999
was partially offset by, and the decrease for the quarter ended September 30,
1999, was partially due to, a decrease in rental and earned income of
approximately $10,100 and $10,500 for the quarter and nine months ended
September 30, 1999, respectively, attributable to the sale of the Property in
Fort Myers Beach, Florida, as described above in "Capital Resources".
During the nine months ended September 30, 1999 and 1998, the
Partnership earned $42,641 and $85,774, respectively, in interest and other
income, $11,179 and $27,008 of which was earned during the quarters ended
September 30, 1999 and 1998, respectively. The decrease in interest and other
income during the quarter and nine months ended September 30, 1999, as compared
to the quarter and nine months ended September 30, 1998, was primarily
attributable to the fact that during the quarter and nine months ended September
30, 1998, the Partnership earned interest on the net sales proceeds relating to
the sale of the Property in Sacramento, California, pending the reinvestment of
the net sales proceeds in an additional Property. The net sales proceeds were
reinvested in a Jack in the Box Property in San Marcos, Texas in November 1998.
For the quarter and nine months ended September 30, 1999 and 1998, the
Partnership also owned and leased eight Properties indirectly through joint
venture arrangements and two Properties as tenants-in-common with affiliates of
the general partners. For the quarter and nine months ended September 30, 1999,
the Partnership also owned and leased one additional Property indirectly through
a joint venture arrangement. In connection therewith, during the nine months
ended September 30, 1999 and 1998, the Partnership earned $272,427 and $213,432,
respectively, $95,933 and $76,163 of which was earned during the quarters ended
September 30, 1999 and 1998, respectively. The increase in net income earned by
unconsolidated joint ventures during the quarter and nine months ended September
30, 1999, was primarily attributable to the Partnership investing in a joint
venture arrangement, Ocean Shores Joint Venture, in January 1999, with CNL
Income Fund XVII, Ltd., an affiliate of the general partners.
13
<PAGE>
Operating expenses, including depreciation expense, were $640,448 and
$375,200 for the nine months ended September 30, 1999 and 1998, respectively, of
which $211,056 and $135,903 were incurred for the quarters ended September 30,
1999 and 1998, respectively. The increase in operating expenses during the
quarter and nine months ended September 30, 1999, as compared to the quarter and
nine months ended September 30, 1998, was primarily due to the fact that the
Partnership incurred $67,658 and $192,107 in transaction costs for the quarter
and nine months ended September 30, 1999, respectively, related to the general
partners retaining financial and legal advisors to assist them in evaluating and
negotiating the merger with APF, as described below. If the limited partners
reject the merger, the Partnership will bear the portion of the transaction
costs based upon the percentage of "For" votes and the general partners will
bear the portion of such transaction costs based upon the percentage of
"Against" votes and abstentions.
In addition, the increase in operating expenses for the quarter and
nine months ended September 30, 1999 was partially a result of an increase in
depreciation expense due to the purchase of the Property in Fremont, Nebraska in
March 1999 and the fact that during 1998, the Partnership reclassified the
leases relating to three Properties from direct financing leases to operating
leases due to lease amendments.
The increase in operating expenses was also partially due to the fact
that the Partnership accrued insurance, real estate tax expense, and legal fees
as a result of the fact that two tenants filed for bankruptcy and rejected two
leases relating to the Properties in Lancaster, New York and Homewood, Alabama
and as a result of the fact that the tenant in Fort Pierce, Florida vacated the
Property, as described above. The Partnership will continue to incur these types
of expenses, until replacement tenants or purchasers are located. The
Partnership is currently seeking either replacement tenants or purchasers for
these Properties.
As a result of the sale of the Properties in Amherst, New York and Fort
Myers Beach, Florida, as described above in "Capital Resources," the Partnership
recorded a gain of $74,640 and a loss of $42,121, respectively for financial
reporting purposes during the nine months ended September 30, 1999. As a result
of the sale of the Property in Sacramento, California, and the sale of the
parcel of land in Austin, Texas, the Partnership recognized a gain of $171,159
for financial reporting purposes for the nine months ended September 30, 1998.
Proposed Merger
- ---------------
On March 11, 1999, the Partnership entered into an Agreement and Plan
of Merger with APF, pursuant to which the Partnership would be merged with and
into a subsidiary of APF (the "Merger"). As consideration for the Merger, APF
has agreed to issue 2,121,622 shares of its common stock, par value $0.01 per
share (the "APF Shares"). In order to assist the general partners in evaluating
the proposed merger consideration, the general partners retained Valuation
Associates, a nationally recognized real estate appraisal firm, to appraise the
Partnership's restaurant property portfolio. Based on Valuation Associates'
appraisal, the fair value of the Partnership's property portfolio and other
assets was $41,779,262 as of December 31, 1998. The APF Shares are expected to
be listed for trading on the New York Stock Exchange concurrently with the
consummation of the Merger, and therefore, would be freely tradable at the
option of the former limited partners. At a special meeting of the partners that
is expected to be held in the
14
<PAGE>
first quarter of 2000, limited partners holding in excess of 50% of the
Partnership's outstanding limited partnership interests must approve the Merger
prior to consummation of the transaction. If the limited partners at the special
meeting approve the Merger, APF will own the properties and other assets of the
Partnership. The general partners intend to recommend that the limited partners
of the Partnership approve the Merger. In connection with their recommendation,
the general partners will solicit the consent of the limited partners at the
special meeting. If the limited partners reject the Merger, the Partnership will
bear the portion of the transaction costs based upon the percentage of "For"
votes and the general partners will bear the portion of such transaction costs
based upon the percentage of "Against" votes and abstentions.
On May 11, 1999, four limited partners in several of the CNL Income
Funds served a lawsuit against the general partners and APF in connection with
the proposed Merger. On July 8, 1999, the plaintiffs amended the complaint to
add three additional limited partners as plaintiffs. Additionally, on June 22,
1999, a limited partner in certain of the CNL Income Funds served a lawsuit
against the general partners, APF, CNL Fund Advisors, Inc. and certain of its
affiliates in connection with the proposed Merger. On September 23, 1999, the
judge assigned to the two lawsuits entered an order consolidating the two cases.
Pursuant to this order, the plaintiffs in these cases filed a consolidated and
amended complaint on November 8, 1999. The various defendants, including the
general partners, have 45 days to respond to that consolidated complaint. The
general partners and APF believe that the lawsuits are without merit and intend
to defend vigorously against the claims. See Part II - Item 1. Legal
Proceedings.
Year 2000 Readiness Disclosure
Overview of Year 2000 Problem
The year 2000 problem concerns the inability of information and
non-information technology systems to properly recognize and process date
sensitive information beyond January 1, 2000. The failure to accurately
recognize the year 2000 could result in a variety of problems from data
miscalculations to the failure of entire systems.
Information and Non-Information Technology Systems
The Partnership does not have any information or non-information
technology systems. The general partners and their affiliates provide all
services requiring the use of information and non-information technology systems
pursuant to a management agreement with the Partnership. The information
technology system of the general partners' affiliates consists of a network of
personal computers and servers built using hardware and software from mainstream
suppliers. The non-information technology systems of the affiliates are
primarily facility related and include building security systems, elevators,
fire suppressions, HVAC, electrical systems and other utilities. The affiliates
have no internally generated programmed software coding to correct, because
substantially all of the software utilized by the affiliates is purchased or
licensed from external providers. The maintenance of non-information technology
systems at the Partnership's restaurant properties is the responsibility of the
tenants of such properties in accordance with the terms of the Partnership's
leases.
15
<PAGE>
The Y2K Team
In early 1998, the general partners and their affiliates formed a Year
2000 committee (the "Y2K Team") for the purpose of identifying, understanding
and addressing the various issues associated with the year 2000 problem. The Y2K
Team consists of the general partners and members from their affiliates,
including representatives from senior management, information systems,
telecommunications, legal, office management, accounting and property
management.
Assessing Year 2000 Readiness
The Y2K Team's initial step in assessing year 2000 readiness consisted
of identifying any systems that are date-sensitive and, accordingly, could have
potential year 2000 problems. The Y2K Team has conducted inspections, interviews
and tests to identify which of the systems used by the Partnership could have a
potential year 2000 problem.
The information system of the general partners' affiliates is comprised
of hardware and software applications from mainstream suppliers. Accordingly,
the Y2K Team has contacted and is evaluating documentation from the respective
vendors and manufacturers to verify the year 2000 compliance of their products.
The Y2K Team has also requested and is evaluating documentation from the
non-information technology systems providers of the affiliates.
In addition, the Y2K Team has requested and is evaluating documentation
from other companies with which the Partnership has material third party
relationships. Such third parties, in addition to the providers of information
and non-information technology systems, consist of the Partnership's transfer
agent and financial institutions. The Partnership depends on its transfer agent
to maintain and track investor information and its financial institutions for
availability of cash.
As of September 30, 1999, the Y2K Team had received responses from
approximately 62 percent of the third parties. All of the responses were in
writing. Of the third parties responding, all indicated that they are currently
year 2000 compliant or will be year 2000 compliant prior to the year 2000.
Although the Y2K Team continues to receive positive responses from the companies
with which the Partnership has third party relationships regarding their year
2000 compliance, the general partners cannot be assured that the third parties
have adequately considered the impact of the year 2000.
In addition, the Y2K Team has requested documentation from the
Partnership's tenants. As of September 30, 1999, the Y2K Team had received
responses from approximately 73 percent of the tenants. All of the responses
were in writing. Of the tenant's responding, all indicated that they are
currently year 2000 compliant or will be year 2000 compliant prior to the year
2000. The general partners cannot be assured that the tenants have adequately
considered the impact of the year 2000. The Partnership has also instituted a
policy of requiring any new tenants to indicate that their systems are year 2000
compliant or are expected to be year 2000 compliant prior to the year 2000.
16
<PAGE>
Achieving Year 2000 Compliance
The Y2K Team has identified and completed upgrades for its hardware
equipment that was not year 2000 compliant. In addition, the Y2K Team has
identified and completed upgrades of the software applications that were not
year 2000 compliant, although the general partners cannot be assured that the
upgrade solutions provided by the vendors have addressed all possible year 2000
issues.
The cost for these upgrades and other remedial measures is the
responsibility of the general partners and their affiliates. The general
partners do not expect that the Partnership will incur any costs in connection
with year 2000 remedial measures.
Assessing the Risks to the Partnership of Non-Compliance and Developing
Contingency Plans
Risk of Failure of Information and Non-Information Technology Systems Used by
the Partnership
The general partners believe that the reasonably likely worst case
scenario with regard to the information and non-information technology systems
used by the Partnership is the failure of one or more of these systems as a
result of year 2000 problems. Because the Partnership's major source of income
is rental payments under long-term triple-net leases, any failure of information
or non-information technology systems used by the Partnership is not expected to
have a material impact on the results of operations of the Partnership. Even if
such systems failed, the payment of rent under the Partnership's leases would
not be affected. In addition, the Y2K Team is expected to correct any Y2K
problems within the control of the general partners and their affiliates before
the year 2000.
The Y2K Team has determined that a contingency plan to address this
risk is not necessary at this time. However, if the Y2K Team identifies
additional risks associated with the year 2000 compliance of the information or
non-information technology systems used by the Partnership, the Y2K Team will
develop a contingency plan if deemed necessary at that time.
Risk of Inability of Transfer Agent to Accurately Maintain Partnership Records
The general partners believe that the reasonably likely worst case
scenario with regard to the Partnership's transfer agent is that the transfer
agent will fail to achieve year 2000 compliance of its systems and will not be
able to accurately maintain the records of the Partnership. This could result in
the inability of the Partnership to accurately identify its limited partners for
purposes of distributions, delivery of disclosure materials and transfer of
units. The Y2K Team has received certification from the Partnership's transfer
agent of its year 2000 compliance. Despite the positive response from the
transfer agent, the general partners cannot be assured that the transfer agent
has addressed all possible year 2000 issues.
The Y2K Team has developed a contingency plan pursuant to which the
general partners and their affiliates would maintain the records of the
Partnership manually, in the event that the systems of the transfer agent are
not year 2000 compliant. The general partners and their
17
<PAGE>
affiliates would have to allocate resources to internally perform the functions
of the transfer agent. The general partners do not anticipate that the
additional cost of these resources would have a material impact on the results
of operations of the Partnership.
Risk of Loss of Short-Term Liquidity from Failure of Financial Institutions to
Achieve Year 2000 Compliance
The general partners believe that the reasonably likely worst case
scenario with regard to the Partnership's financial institutions is that some or
all of its funds on deposit with such financial institutions may be temporarily
unavailable. The Y2K Team has received responses from 93% of the Partnership's
financial institutions indicating that their systems are currently year 2000
compliant or are expected to be year 2000 compliant prior to the year 2000.
Despite the positive responses from the financial institutions, the general
partners cannot be assured that the financial institutions have addressed all
possible year 2000 issues. The loss of short-term liquidity could affect the
Partnership's ability to pay its expenses on a current basis. The general
partners do not anticipate that a loss of short-term liquidity would have a
material impact on the results of operations of the Partnership.
Based upon the responses received from the Partnership's financial
institutions and the inability of the Y2K Team to identify a suitable
alternative for the deposit of funds that is not subject to potential year 2000
problems, the Y2K Team has determined not to develop a contingency plan to
address this risk.
Risks of Late Payment or Non-Payment of Rent by Tenants
The general partners believe that the reasonably likely worst case
scenario with regard to the Partnership's tenants is that some of the tenants
may make rental payments late as the result of the failure of the tenants to
achieve year 2000 compliance of their systems used in the payment of rent, the
failure of the tenant's financial institutions to achieve year 2000 compliance,
or the temporary disruption of the tenants' businesses. The Y2K Team is in the
process of requesting responses from the Partnership's tenants indicating the
extent to which their systems are currently year 2000 compliant or are expected
to be year 2000 compliant prior to the year 2000. The general partners cannot be
assured that the tenants have addressed all possible year 2000 issues. The late
payment of rent by one or more tenants would affect the results of operations of
the Partnership in the short-term.
The general partners are also aware of predictions that the year 2000
problem, if uncorrected, may result in a global economic crisis. The general
partners are not able to determine if such predictions are true. A widespread
disruption of the economy could affect the ability of the Partnership's tenants
to pay rent and, accordingly, could have a material impact on the results of
operations of the Partnership.
18
<PAGE>
Because payment of rent is under the control of the Partnership's
tenants, the Y2K Team is not able to develop a contingency plan to address these
risks. In the event of late payment or non-payment of rent, the general partners
will assess the remedies available to the Partnership under its lease
agreements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
19
<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 are seeking unspecified
damages and equitable relief. On July 8, 1999, the plaintiffs
filed an amended complaint which, in addition to naming three
additional plaintiffs, includes 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 seeks additional equitable relief. As amended,
the caption of the case is 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 is seeking
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 by November 8, 1999, and the various
defendants, including the general partners, have 45 days to
respond to that consolidated complaint.
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.
20
<PAGE>
Item 5. Other Information. Inapplicable.
-----------------
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
(a) Exhibits
2.1 Agreement and Plan of Merger by and between the Registrant
and CNL American Properties Fund, Inc. ("APF") dated March
11, 1999, as amended June 4, 1999, and as amended October
27, 1999 (Filed as Appendix B to the Prospectus Supplement
for the Registrant, constituting a part of Amendment No. 3
to the Registration Statement of APF on Form S-4, File No.
333-74329.)
3.1 Affidavit and Certificate of Limited Partnership of CNL
Income Fund X, Ltd. (Included as Exhibit 3.2 to
Registration Statement No. 33-35049 on Form S-11 and
incorporated herein by reference.)
4.1 Affidavit and Certificate of Limited Partnership of CNL
Income Fund X, Ltd. (included as Exhibit 3.2 to
Registration Statement No. 33-35049 on Form S-11 and
incorporated herein by reference.)
4.2 Amended and Restated Agreement of Limited Partnership of
CNL Income Fund X, Ltd. (Included as Exhibit 3.3 to Post-
Effective Amendment No. 4 to Registration Statement No. 33-
35049 on Form S-11 and incorporated herein by reference.)
10.1 Management Agreement between CNL Income Fund X, Ltd. and
CNL Investment Company (Included as Exhibit 10.1 to
Form 10-K filed with the Securities and Exchange Commission
on March 17, 1998, 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.)
21
<PAGE>
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter
ended September 30, 1999.
22
<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 10th day of November, 1999.
CNL INCOME FUND X, 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>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET OF CNL INCOME FUND X, LTD. AT SEPTEMBER 30, 1999, AND ITS STATEMENT OF
INCOME FOR THE NINE MONTHS THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO THE FORM 10Q OF CNL INCOME FUND X, LTD. FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 1,953,610
<SECURITIES> 0
<RECEIVABLES> 213,068
<ALLOWANCES> 183,730
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 18,404,101
<DEPRECIATION> 1,570,638
<TOTAL-ASSETS> 33,821,349
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 32,571,539
<TOTAL-LIABILITY-AND-EQUITY> 33,821,349
<SALES> 0
<TOTAL-REVENUES> 2,260,338
<CGS> 0
<TOTAL-COSTS> 640,448
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,918,645
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,918,645
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,918,645
<EPS-BASIC> 0
<EPS-DILUTED> 0
<FN>
<F1>Due to the nature of its industry, CNL Income Fund X, Ltd. has an
unclassified balance sheet; therefore, no values are shown above for current
assets and current liabilities.
</FN>
</TABLE>
