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 March 31, 2000
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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
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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
Condensed Statements of Income
Condensed Statements of Partners' Capital
Condensed Statements of Cash Flows
Notes to Condensed Financial Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About
Market Risk
Part II.
Other Information
<PAGE>
CNL INCOME FUND X, LTD.
(A Florida Limited Partnership)
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
------------------ ------------------
<S> <C>
ASSETS
Land and buildings on operating leases, less
accumulated depreciation and allowance for loss
on land and buildings $ 16,013,788 $ 16,391,447
Net investment in direct financing leases 9,336,982 9,391,291
Investment in joint ventures 4,965,303 4,989,209
Cash and cash equivalents 909,912 967,094
Receivables, less allowance for doubtful accounts
of $178,973 and $122,914, respectively 21,749 100,952
Prepaid expenses 20,680 19,283
Accrued rental income, less allowance for doubtful accounts of
$1,210 in 2000 and 1999 1,368,912 1,353,160
Other assets 33,404 35,684
------------------ ------------------
$ 32,670,730 $ 33,248,120
================== ==================
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 50,898 $ 119,660
Accrued and escrowed real estate taxes payable 9,690 9,364
Distributions payable 900,001 900,001
Due to related parties 93,539 60,116
Rents paid in advance and deposits 157,966 71,634
------------------ ------------------
Total liabilities 1,212,094 1,160,775
Minority interest 64,446 65,051
Partners' capital 31,394,190 32,022,294
------------------ ------------------
$ 32,670,730 $ 33,248,120
================== ==================
See accompanying notes to condensed financial statements.
<PAGE>
CNL INCOME FUND X, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF INCOME
Quarter Ended
March 31,
2000 1999
-------------- --------------
Revenues:
Rental income from operating leases $ 429,508 $ 448,457
Earned income from direct financing leases 247,407 276,858
Interest and other income 28,021 13,714
-------------- --------------
704,936 739,029
-------------- --------------
Expenses:
General operating and administrative 62,020 50,482
Professional services 22,411 10,045
Real estate taxes 13,347 11,604
State and other taxes 22,516 14,577
Depreciation and amortization 80,952 72,294
Transaction costs 45,746 33,661
-------------- --------------
246,992 192,663
-------------- --------------
Income Before Minority Interest in Income of Consolidated Joint
Venture, Equity in Earnings of Unconsolidated Joint Ventures,
Gain on Sale of Land and Building and Provision for Loss on
Land and Building 457,944 546,366
Minority Interest in Income of Consolidated
Joint Venture (2,218 ) (1,879 )
Equity in Earnings of Unconsolidated Joint Ventures 103,446 81,404
Gain on Sale of Land and Building -- 74,640
Provision for Loss on Land and Building (287,275 ) --
-------------- --------------
Net Income $ 271,897 $ 700,531
============== ==============
Allocation of Net Income:
General partners $ 3,555 $ 6,261
Limited partners 268,342 694,270
-------------- --------------
$ 271,897 $ 700,531
============== ==============
Net Income Per Limited Partner Unit $ 0.07 $ 0.17
============== ==============
Weighted Average Number of Limited Partner
Units Outstanding 4,000,000 4,000,000
============== ==============
See accompanying notes to condensed financial statements.
<PAGE>
CNL INCOME FUND X, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF PARTNERS' CAPITAL
Quarter Ended Year Ended
March 31, December 31,
2000 1999
------------------- ------------------
General partners:
Beginning balance $ 252,935 $ 229,725
Net income 3,555 23,210
------------------- ------------------
256,490 252,935
------------------- ------------------
Limited partners:
Beginning balance 31,769,359 33,123,172
Net income 268,342 2,246,191
Distributions ($0.23 and $0.90 per limited partner
unit, respectively) (900,001 ) (3,600,004 )
------------------- ------------------
31,137,700 31,769,359
------------------- ------------------
Total partners' capital $ 31,394,190 $ 32,022,294
=================== ==================
See accompanying notes to condensed financial statements.
<PAGE>
CNL INCOME FUND X, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF CASH FLOWS
Quarter Ended
March 31,
2000 1999
--------------- --------------
Increase (Decrease) in Cash and Cash Equivalents
Net Cash Provided by Operating Activities $ 845,642 $ 841,122
--------------- --------------
Cash Flows from Investing Activities:
Proceeds from sale of land and buildings -- 1,150,000
Additions to land and buildings on operating
leases -- (1,257,217 )
Investment in joint venture -- (802,431 )
Decrease in restricted cash -- 359,990
--------------- --------------
Net cash used in investing activities -- (549,658 )
--------------- --------------
Cash Flows from Financing Activities:
Distributions to limited partners (900,001 ) (900,001 )
Distributions to holder of minority interest (2,823 ) (2,178 )
--------------- --------------
Net cash used in financing activities (902,824 ) (902,179 )
--------------- --------------
Net Decrease in Cash and Cash Equivalents (57,182 ) (610,715 )
Cash and Cash Equivalents at Beginning of Quarter 967,094 1,835,972
--------------- --------------
Cash and Cash Equivalents at End of Quarter $ 909,912 $1,225,257
=============== ==============
Supplemental Schedule of Non-Cash Financing
Activities:
Distributions declared and unpaid at end of
quarter $ 900,001 $ 900,001
=============== ==============
</TABLE>
See accompanying notes to condensed financial statements.
<PAGE>
CNL INCOME FUND X, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters Ended March 31, 2000 and 1999
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 ended March 31, 2000, may not be indicative of the results
that may be expected for the year ending December 31, 2000. Amounts as
of December 31, 1999, 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,
1999.
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:
Land and buildings on operating leases consisted of the following at:
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
------------------ -----------------
<S> <C>
Land $ 9,076,722 $ 9,076,722
Building 9,556,497 10,235,897
------------------ -----------------
18,633,219 19,312,619
Less accumulated depreciation (1,695,663 ) (1,654,894 )
------------------ -----------------
16,937,556 17,657,725
Less allowance for loss on
land and building (923,768 ) (1,266,278 )
------------------ -----------------
$16,013,788 $ 16,391,447
================== =================
</TABLE>
<PAGE>
CNL INCOME FUND X, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters Ended March 31, 2000 and 1999
2. Land and Buildings on Operating Leases - Continued:
During the year ended December 31, 1998, the Partnership recorded a
provision for loss on land and building totalling $908,518 for
financial reporting purposes relating to the properties in Lancaster,
New York, and Homewood, Alabama. In connection with the property in
Homewood, Alabama, in January 2000, the Partnership entered into a new
lease with a new tenant for a Kinko's Copies store. In connection
therewith, the Partnership agreed to remove the old building from the
property so the new tenant can construct a new building. Therefore, at
December 31, 1999, the Partnership recorded an additional impairment on
the building for $357,760, representing the undepreciated cost of the
old building, for financial reporting purposes. During the quarter
ended March 31, 2000, the total undepreciated cost of the old building
of $629,785, for which the Partnership had recorded impairments in 1999
and 1998, was removed from the accounts and no loss on demolition
relating to the building was reflected in income.
In addition, at March 31, 2000, the Partnership recorded a provision
for loss on land and building in the amount of $287,275 for financial
reporting purposes relating to the Perkins property in Ft. Pierce,
Florida. The tenant of this property vacated the property and ceased
payment of rents under the terms of its lease agreement. The allowance
represents the difference between the carrying value of the property at
March 31, 2000 and the estimated net realizable value for this
property.
3. Concentration of Credit Risk:
The following schedule presents total rental and earned income from
individual lessees, or affiliated groups of lessees, each representing
more than ten percent of the Partnership's total rental and earned
income (including the Partnership's share of total rental and earned
income from unconsolidated joint ventures and the properties held as
tenants-in-common with affiliates of the general partners) for at least
one of the quarters ended March 31:
2000 1999
--------------- ------------
Golden Corral Corporation $ 169,973 $137,058
Jack in the Box Inc. 128,043 112,801
Flagstar Enterprises, Inc. 83,457 N/A
<PAGE>
CNL INCOME FUND X, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters Ended March 31, 2000 and 1999
3. Concentration of Credit Risk - Continued:
In addition, the following schedule presents total rental and earned
income from individual restaurant chains, each representing more than
ten percent of the Partnership's total rental and earned income
(including the Partnership's share of total rental and earned income
from unconsolidated joint ventures and the properties held as
tenants-in-common with affiliates of the general partners) for at least
one of the quarters ended March 31:
2000 1999
--------------- -------------
Burger King $ 187,629 $ 182,717
Golden Corral Family
Steakhouse Restaurant 169,973 137,058
Jack in the Box 128,043 112,801
Hardee's 98,159 99,448
Shoney's N/A 109,948
The information denoted by N/A indicates that for each period
presented, the tenant and the chains did not represent more than ten
percent of the Partnership's total rental and earned income.
Although the Partnership's properties are geographically diverse
throughout the United States and the Partnership's lessees operate a
variety of restaurant concepts, default by any one of these lessees or
restaurant chains could significantly impact the results of operations
of the Partnership if the Partnership is not able to re-lease the
properties in a timely manner.
<PAGE>
CNL INCOME FUND X, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters Ended March 31, 2000 and 1999
4. Termination of Merger:
On March 1, 2000, the general partners and CNL American Properties
Fund, Inc. ("APF") mutually agreed to terminate the Agreement and Plan
of Merger entered into in March 1999. The general partners are
continuing to evaluate strategic alternatives for the Partnership,
including alternatives to provide liquidity to the limited partners.
<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 March
31, 2000, the Partnership owned 49 Properties, which included interests in 11
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 quarters ended
March 31, 2000 and 1999 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 $845,642 and
$841,122 for the quarters ended March 31, 2000 and 1999, respectively. The
increase in cash from operations for the quarter ended March 31, 2000 was
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 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 March 31, 2000, the Partnership had $909,912 invested in such
short-term investments, as compared to $967,094 at December 31, 1999. The funds
remaining at March 31, 2000 will be used to pay distributions and other
liabilities.
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, the Partnership
declared distributions to limited partners of $900,001 for each of the quarters
ended March 31, 2000 and 1999. This represents distributions for each applicable
quarter of $0.23 per unit. No distributions were made to the general partners
for the quarters ended March 31, 2000 and 1999. No amounts distributed to the
limited partners for the quarters ended March 31, 2000 and 1999 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.
Total liabilities of the Partnership, including distributions payable,
increased to $1,212,094 at March 31, 2000, from $1,160,775 at December 31, 1999,
primarily due to an increase in rents paid in advance at March 31, 2000, as
compared to December 31, 1999. In addition, the increase in liabilities at March
31, 2000 was partially offset by a decrease in accounts payable at March 31,
2000 compared to December 31, 1999. Total liabilities at March 31, 2000, to the
extent they exceed cash and cash equivalents at March 31, 2000, will be paid
from future cash from operations, and in the event the general partners elect to
make additional contributions, from general partners' contributions.
Long-Term Liquidity
The Partnership has no long-term debt or other long-term liquidity
requirements.
Results of Operations
During the quarter ended March 31, 1999, the Partnership and its
consolidated joint venture, Allegan Real Estate Joint Venture, owned and leased
39 wholly owned Properties (which included two Properties which were sold in
1999). In addition, during the quarter ended March 31, 2000, the Partnership and
Allegan Real Estate Joint Venture owned and leased 37 wholly owned Properties to
operators of fast-food and family-style restaurant chains. In connection
therewith, during the quarters ended March 31, 2000 and 1999, the Partnership
and Allegan Real Estate Joint Venture earned $676,915 and $725,315,
respectively, in rental income from operating leases and earned income from
direct financing leases from these Properties. Rental and earned income
decreased by approximately $36,500 for the quarter ended March 31, 2000, as
compared to the quarter ended March 31, 1999, due to the fact that in September
1999, the tenant of the Property in Ft. Pierce, Florida vacated the Property and
ceased making rental payments to the Partnership. The general partners will
continue to pursue collection of past due rental amounts relating to this
Property and will recognize such amounts as income if collected. The general
partners are currently seeking either a new tenant or purchaser for this
Property.
In addition, rental and earned income decreased by approximately
$55,800, as a result of the sale of the Properties in Amherst, New York in March
1999 and Fort Myers Beach, Florida in August 1999. The decrease in rental and
earned income was partially offset by an increase in rental and earned income of
approximately $50,700 due to the reinvestment of the 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.
Rental and earned income during the quarters ended March 31, 2000 and
March 31, 1999 continued to remain at reduced amounts due to the fact that the
Partnership is not receiving any rental income relating to the Property in
Lancaster, New York. Rental and earned income are expected to remain at reduced
amounts until a replacement tenant is located for the Property in Lancaster, New
York, which had not been released as of March 31, 2000.
For the quarters ended March 31, 2000 and 1999, 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 ended March 31, 2000, the Partnership also owned and leased two
additional Properties indirectly through joint venture arrangements. In
connection therewith, during the quarters ended March 31, 2000 and 1999, the
Partnership earned $103,446 and $81,404, respectively, attributable to the net
income earned by these unconsolidated joint ventures. The increase in net income
earned by unconsolidated joint ventures during the quarter ended March 31, 2000,
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, and Peoria Joint Venture, in
November 1999, with CNL Income Fund II, Ltd., an affiliate of the general
partners.
During the quarter ended March 31, 2000, three lessees, Golden Corral
Corporation, Jack in the Box Inc., and Flagstar Enterprises, Inc., each
contributed more than ten percent of the Partnership's total rental income
(including rental income from the Partnership's consolidated joint venture and
the Partnership's share of rental income from ten Properties owned by
unconsolidated joint ventures and two Properties owned with affiliates of the
general partners as tenants-in-common). It is anticipated that based on the
minimum rental payments required by the leases, these three lessees will
continue to contribute more than ten percent of the Partnership's total rental
income during the remainder of 2000. In addition, during the quarter ended March
31, 2000, four restaurant chains, Golden Corral Family Steakhouse Restaurants,
Hardee's, Burger King, and Jack in the Box, each accounted for more than ten
percent of the Partnership's total rental income (including rental income from
the Partnership's consolidated joint venture and the Partnership's share of
rental income from ten Properties owned by unconsolidated joint ventures and two
Properties owned with affiliates as tenants-in-common). In 2000, it is
anticipated that these four restaurant chains will continue to account for more
than ten percent of the Partnership's total rental income to which the
Partnership is entitled under the terms of the leases. Any failure of these
lessees or restaurant chains could materially affect the Partnership's income if
the Partnership is not able to re-lease the Properties in a timely manner.
Operating expenses, including depreciation and amortization expense,
were $246,992 and $192,663 for the quarters ended March 31, 2000 and 1999,
respectively. The increase in operating expenses during the quarter ended March
31, 2000, as compared to the quarter ended March 31, 1999, was partially the
result of an increase in depreciation expense due to the purchase of the
Property in Fremont, Nebraska in March 1999. The increase in operating expenses
was also partially due to the fact that the Partnership recorded legal expenses,
insurance and real estate tax expense as a result of the fact that in September
1999, the tenant of the Property in Ft. Pierce, Florida vacated the Property and
ceased making rental payments to the Partnership, as described above. The
Partnership will continue to incur certain expenses, such as real estate taxes,
insurance and maintenance relating to the Property in Ft. Pierce, Florida and
the Property in Lancaster, New York, due to the fact that both of these
Properties have been vacated by the tenant, until replacement tenants or
purchasers are located. The Partnership is currently seeking either replacement
tenants or purchasers for these Properties.
In addition, the increase in operating expenses during the quarter
ended March 31, 2000, as compared to the quarter ended March 31, 1999 was
primarily due to the fact that the Partnership incurred $45,746 and $33,661,
respectively, in transaction costs relating to the general partners retaining
financial and legal advisors to assist them in evaluating and negotiating the
proposed merger with CNL American Properties Fund, Inc. ("APF") due to the
termination of the proposed merger as described below in "Termination of
Merger."
As a result of the sale of the Property in Amherst, New York, the
Partnership recorded a gain of $74,640 for financial reporting purposes during
the quarter ended March 31, 1999. No Properties were sold during the quarter
ended March 31, 2000.
During the quarter ended March 31, 2000, the Partnership recorded a
provision for loss on land and building in the amount of $287,275 for financial
reporting purposes relating to a Perkins Property in Ft. Pierce, Florida, the
tenant of which vacated the Property and ceased payment of rents under the terms
of its lease agreement. The allowance represents the difference between the
carrying value of the Property at March 31, 2000 and the estimated net
realizable value for the Property.
Termination of Merger
On March 1, 2000, the general partners and APF mutually agreed to
terminate the Agreement and Plan of Merger entered into in March 1999. The
general partners are continuing to evaluate strategic alternatives for the
Partnership, including alternatives to provide liquidity to the limited
partners.
Dismissal of Legal Action
As described in greater detail in Part II, Item 1 ("Legal
Proceedings"), in 1999 two groups of limited partners in several CNL Income
Funds filed purported class action suits against the general partners and APF
alleging, among other things, that the general partners had breached their
fiduciary duties in connection with the proposed Merger. These actions were
later consolidated into one action. On April 25, 2000, the judge in the
consolidated action issued a Stipulated Final Order of Dismissal of Consolidated
Action, dismissing the action without prejudice, with each party to bear its own
costs and attorneys' fees.
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
<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 November
8, 1999. On December 22, 1999, the general partners and CNL Group,
Inc. filed motions to dismiss and motions to strike. On December 28,
1999, APF and CNL Fund Advisors, Inc. filed motions to dismiss. On
March 6, 2000, all of the defendants filed a Joint Notice of Filing
Form 8-K Reports and Suggestion of Mootness.
On April 25, 2000, Judge Kirkwood issued a Stipulated Final Order of
Dismissal of Consolidated Action, dismissing the action without
prejudice, with each party to bear its own costs and attorneys' fees.
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.
Item 5. Other Information. Inapplicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
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.)
(b) Reports on Form 8-K
A Current Report on Form 8-K dated February 23, 2000 was filed
on March 1, 2000, describing the termination of the proposed
merger of the Partnership with and into a subsidiary of CNL
American Properties Fund, Inc.
<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 9th day of May, 2000.
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>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the balance
sheet of CNL Income Fund X, Ltd. at March 31, 2000, and its statement of income
for the three months then ended and is qualified in its entirety by reference to
the Form 10-Q of CNL Income Fund X, Ltd. for the three months ended March 31,
2000.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 909,912
<SECURITIES> 0
<RECEIVABLES> 200,722
<ALLOWANCES> 178,973
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 17,709,451
<DEPRECIATION> 1,695,663
<TOTAL-ASSETS> 32,670,730
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 31,394,190
<TOTAL-LIABILITY-AND-EQUITY> 32,670,730
<SALES> 0
<TOTAL-REVENUES> 704,936
<CGS> 0
<TOTAL-COSTS> 246,992
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 271,897
<INCOME-TAX> 0
<INCOME-CONTINUING> 271,897
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 271,897
<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>
