<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the balance
sheet of CNL Income Fund XIII, Ltd. at June 30, 1996, and its statement of
income for the six months then ended and is qualified in its entirety by
reference to the Form 10-Q of CNL Income Fund XIII, Ltd. for the six months
ended June 30, 1996.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 1,083,644
<SECURITIES> 0
<RECEIVABLES> 156,685
<ALLOWANCES> 149,457
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 25,363,129
<DEPRECIATION> 1,110,169
<TOTAL-ASSETS> 35,832,027
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 34,960,961
<TOTAL-LIABILITY-AND-EQUITY> 35,832,027
<SALES> 0
<TOTAL-REVENUES> 1,792,221
<CGS> 0
<TOTAL-COSTS> 334,466
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 35,445
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,474,835
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,474,835
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,474,835
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Due to the nature of its industry, CNL Income Fund XIII, 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 June 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
0-23968
----------------------
CNL Income Fund XIII, Ltd.
- ------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 59-3143094
- ----------------------------- -------------------
(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 6-9
Part II
Other Information 10
CNL INCOME FUND XIII, LTD.
(A Florida Limited Partnership)
CONDENSED BALANCE SHEETS
June 30, December 31,
ASSETS 1996 1995
----------- ------------
Land and buildings on operating
leases, less accumulated
depreciation of $1,110,169
and $914,452 $24,252,960 $24,448,677
Net investment in direct financing
leases 8,585,190 8,624,130
Investment in joint ventures 1,006,964 1,009,577
Cash and cash equivalents 1,083,644 1,135,995
Receivables, less allowance for
doubtful accounts of $149,457
and $49,747 7,228 73,691
Prepaid expenses 14,490 4,138
Organization costs, less accumu-
lated amortization of $6,422
and $5,422 3,578 4,578
Accrued rental income, less allow-
ance for doubtful accounts
of $61,598 in 1996 877,973 753,971
----------- -----------
$35,832,027 $36,054,757
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 3,381 $ 3,569
Accrued and escrowed real estate
taxes payable 11,969 4,726
Distributions payable 850,002 850,002
Due to related parties 3,106 7,367
Rents paid in advance 2,608 2,963
----------- -----------
Total liabilities 871,066 868,627
Partners' capital 34,960,961 35,186,130
----------- -----------
$35,832,027 $36,054,757
=========== ===========
See accompanying notes to condensed financial statements.
CNL INCOME FUND XIII, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF INCOME
Quarter Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
--------- --------- ---------- ----------
Revenues:
Rental income from
operating leases $ 632,153 $ 644,254 $1,213,169 $1,287,592
Earned income from
direct financing
leases 221,745 243,130 442,106 486,735
Contingent rental
income 71,044 66,847 114,578 120,730
Interest and other
income 9,142 13,979 22,368 27,310
--------- --------- ---------- ----------
934,084 968,210 1,792,221 1,922,367
--------- --------- ---------- ----------
Expenses:
General operating and
administrative 43,843 33,039 84,264 58,160
Professional services 4,939 7,332 10,756 13,601
Bad debt expense 35,445 - 35,445 -
Management fees to
related parties 8,841 9,012 17,380 17,888
Real estate taxes 8,556 - 8,556 -
State and other taxes 5,085 11,273 16,793 19,442
Depreciation and
amortization 98,358 98,358 196,717 196,717
--------- --------- ---------- ----------
205,067 159,014 369,911 305,808
--------- --------- ---------- ----------
Income Before Equity in
Earnings of Joint
Ventures and Loss on
Sale of Land 729,017 809,196 1,422,310 1,616,559
Equity in Earnings of
Joint Ventures 26,138 23,153 52,525 44,924
Loss on Sale of Land - (29,560) - (29,560)
--------- --------- ---------- ----------
Net Income $ 755,155 $ 802,789 $1,474,835 $1,631,923
========= ========== ========== ==========
Allocation of Net Income:
General partners $ 7,552 $ 8,028 $ 14,748 $ 16,319
Limited partners 747,603 794,761 1,460,087 1,615,604
--------- --------- ---------- ----------
$ 755,155 $ 802,789 $1,474,835 $1,631,923
========= ========== ========== ==========
Net Income Per Limited
Partner Unit $ 0.19 $ 0.20 $ 0.37 $ 0.40
========= ========== ========== ==========
Weighted Average Number
of Limited Partner
Units Outstanding 4,000,000 4,000,000 4,000,000 4,000,000
========= ========== ========== ==========
See accompanying notes to condensed financial statements.
CNL INCOME FUND XIII, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF PARTNERS' CAPITAL
Six Months Ended Year Ended
June 30, December 31,
1996 1995
---------------- ------------
General partners:
Beginning balance $ 75,027 $ 41,595
Net income 14,748 33,432
----------- -----------
89,775 75,027
----------- -----------
Limited partners:
Beginning balance 35,111,103 35,200,372
Net income 1,460,087 3,285,742
Distributions ($0.43 and $0.84
per limited partner unit,
respectively) (1,700,004) (3,375,011)
----------- -----------
34,871,186 35,111,103
----------- -----------
Total partners' capital $34,960,961 $35,186,130
=========== ===========
See accompanying notes to condensed financial statements.
CNL INCOME FUND XIII, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF CASH FLOWS
Six Months Ended
June 30,
1996 1995
----------- -----------
Increase (Decrease) in Cash and
Cash Equivalents:
Net Cash Provided by
Operating Activities $ 1,647,653 $ 1,701,496
----------- -----------
Cash Flows from Investing
Activities:
Additions to land and
buildings on operating
leases - (336,116)
Proceeds from sale of land - 286,411
Investment in joint ventures - (140,152)
Other - (6,856)
----------- -----------
Net cash used in
investing activities - (196,713)
----------- -----------
Cash Flows from Financing
Activities:
Reimbursement of acquisition
costs paid by related
parties on behalf of the
Partnership - (3,074)
Distributions to limited
partners (1,700,004) (1,650,010)
----------- -----------
Net cash used in
financing activities (1,700,004) (1,653,084)
----------- -----------
Net Decrease in Cash and Cash
Equivalents (52,351) (148,301)
Cash and Cash Equivalents at
Beginning of Period 1,135,995 1,298,508
----------- -----------
Cash and Cash Equivalents at
End of Period $ 1,083,644 $ 1,150,207
=========== ===========
Supplemental Schedule of Non-Cash
Investing and Financing Activities:
Land, building and other costs
incurred and unpaid at end of
period $ - $ 2,500
=========== ===========
Distributions declared and unpaid
at end of period $ 850,002 $ 850,002
=========== ===========
See accompanying notes to condensed financial statements.
CNL INCOME FUND XIII, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Six Months Ended June 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 six months ended June 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 XIII, 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 XIII, Ltd. (the "Partnership") is a Florida limited
partnership that was organized on September 25, 1992, to acquire for cash,
either directly or through joint venture arrangements, both newly constructed
and existing restaurants, as well as properties upon which restaurants were to
be constructed (the "Properties"), which are leased primarily to operators of
national and regional fast-food and family-style restaurant chains. The
leases are triple-net leases, with the lessees generally responsible for all
repairs and maintenance, property taxes, insurance and utilities. As of June
30, 1996, the Partnership owned 47 Properties, including two Properties owned
by joint ventures in which the Partnership is a co-venturer and one Property
owned with an affiliate as tenants-in-common.
Liquidity and Capital Resources
- -------------------------------
The Partnership's primary source of capital for the six months ended
June 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 $1,647,653
and $1,701,496 for the six months ended June 30, 1996 and 1995, respectively.
The decrease in cash from operations for the six months ended June 30, 1996,
as compared to the six months ended June 30, 1995, is primarily a result of
changes in income and expenses as discussed in "Results of Operations" below,
and as a result of changes in the Partnership's working capital.
Currently, cash reserves and rental income from the Partnership's
Properties are 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 partners. At June 30, 1996,
the Partnership had $1,083,644 invested in such short-term investments as
compared to $1,135,995 at December 31, 1995. The funds remaining at June 30,
1996, after the 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 $871,066 at June 30, 1996, from $868,627 at December 31, 1995.
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 $1,700,004 and $1,675,007 for the six
months ended June 30, 1996 and 1995, respectively, $850,002 for each of the
quarters ended June 30, 1996 and 1995. This represents distributions of $0.43
and $0.42 per unit for the six months ended June 30, 1996 and 1995,
respectively ($0.21 per unit for each of the quarters ended June 30, 1996 and
1995). No distributions were made to the general partners for the quarters
and six months ended June 30, 1996 and 1995. No amounts distributed or to be
distributed to the limited partners for the six months ended June 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 contribution. 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 meet specified
financial standards minimizes the Partnership's operating expenses. The
general partners believe that the leases will continue to generate cash flow
in excess of operating expenses.
The general partners have the right, but not the obligation, to make
additional capital contributions if they deem it appropriate in connection
with the operations of the Partnership.
Results of Operations
- ---------------------
During the six months ended June 30, 1995, the Partnership owned and
leased 45 wholly owned Properties (including one Property in Houston, Texas,
which was sold in April 1995), and during the six months ended June 30, 1996,
the Partnership owned and leased 44 wholly owned Properties to operators of
fast-food and family-style restaurant chains. In connection therewith, during
the six months ended June 30, 1996 and 1995, the Partnership earned $1,655,275
and $1,774,327, respectively, in rental income from operating leases and
earned income from direct financing leases for these Properties, $853,898 and
$887,384 of which was earned during the quarters ended June 30, 1996 and 1995,
respectively. The decrease in rental and earned income is partially
attributable to the fact that the Partnership increased its allowance for
doubtful accounts by approximately $25,900 and $54,300 during the quarter and
six months ended June 30, 1996, respectively, for past due rental amounts
relating to the Denny's Property in Orlando, Florida, as to which the tenant
has defaulted under the terms of the lease. In addition, the Partnership
established an allowance for doubtful accounts of approximately $5,600 and
$61,600 during the quarter and six months ended June 30, 1996, respectively,
for accrued rental income amounts previously recorded (due to the fact that
future scheduled rent increases are recognized on a straight-line basis over
the term of the lease in accordance with generally accepted accounting
principles). The Partnership has entered into a letter of intent to enter
into an agreement with the tenant whereby the tenant will commence payments of
past due rents in 2003, or upon payment in full of a loan between the tenant
and a bank. At that time, past due rents will be converted to a five year
note receivable and will bear interest at a rate per annum, of 175 basis
points over the then current prime rate. In conjunction therewith, the
Partnership also agreed to reduce annual base rents beginning August 1996
through August 2001. Past due rent amounts relating to this Property will be
recognized as income if collected.
During the six months ended June 30, 1996 and 1995, the Partnership also
earned $114,578 and 120,730, respectively, in contingent rental income,
$71,044 and $66,847 of which was earned during the quarters ended June 30,
1996 and 1995, respectively.
For the six months ended June 30, 1996 and 1995, the Partnership owned
and leased two Properties indirectly through joint venture arrangements and
one Property with an affiliate as tenants-in-common. In connection therewith,
during the six months ended June 30, 1996 and 1995, the Partnership earned
$52,525 and $44,924, respectively, attributable to net income earned by these
joint ventures, $26,138 and $23,153 of which was earned during the quarters
ended June 30, 1996 and 1995, respectively. The increase in net income earned
by joint ventures is primarily due to the fact that in March 1995, the
Partnership invested in Salem Joint Venture, which became operational in May
1995.
Operating expenses, including depreciation and amortization expense,
were $369,911 and $305,808 for the six months ended June 30, 1996 and 1995,
respectively, of which $205,067 and $159,014 were incurred for the quarters
ended June 30, 1996 and 1995, respectively. The increase in operating
expenses is primarily the result of the Partnership establishing an allowance
for doubtful accounts for rental and other amounts, which had been recorded as
income in prior years, relating to the Denny's Property in Orlando, Florida,
as a result of the current financial difficulties of the tenant as discussed
above. Operating expenses also increased as a result of the Partnership
accruing prior and current year real estate taxes relating to this Property.
Payment of these taxes remains the responsibility of the tenant of this
Property; however, the general partners believe the tenant's ability to pay
these expenses is doubtful. The Partnership intends to pursue collection from
the tenant of any such amounts paid by the Partnership and will recognize such
amounts as income if collected.
In addition, operating expenses increased as a 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.
As a result of the sale of the Property in Houston, Texas, in April
1995, the Partnership recognized a loss for financial reporting purposes of
$29,560 during the six months ended June 30, 1995. The loss was primarily due
to acquisition fees and miscellaneous acquisition expenses the Partnership had
allocated to the Property and due to accrued rental income relating to future
scheduled rent increases that the Partnership had recorded and reversed at the
time of the sale.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. Inapplicable.
-----------------
Item 2. Changes in Securities. Inapplicable.
---------------------
Item 3. Defaults upon Senior Securities. Inapplicable.
-------------------------------
Item 4. Submission of Matters to a Vote of Security Holders.
---------------------------------------------------
Inapplicable.
Item 5. Other Information. Inapplicable.
-----------------
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
(a) Exhibits - None.
(b) No reports on Form 8-K were filed during the quarter ended
June 30, 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 6th day of August, 1996.
CNL INCOME FUND XIII, 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)
