<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the balance
sheet of CNL Income Fund XIV, Ltd. at September 30, 1996, and its statement of
income for the nine months then ended and is qualified in its entirety by
reference to the Form 10-Q of CNL Income Fund XIV, Ltd. for the nine months
ended September 30, 1996.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 1,503,945
<SECURITIES> 0
<RECEIVABLES> 24,030
<ALLOWANCES> 21,000
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 26,811,017
<DEPRECIATION> 874,237
<TOTAL-ASSETS> 41,082,291
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 40,031,043
<TOTAL-LIABILITY-AND-EQUITY> 41,082,291
<SALES> 0
<TOTAL-REVENUES> 3,028,328
<CGS> 0
<TOTAL-COSTS> 449,832
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,983,505
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,983,505
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,983,505
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Due to the nature of its industry, CNL Income Fund XIV, Ltd. has an
unclassified balance sheet; therefore, no values are shown above for current
assets and current liabilities.
</FN>
</TABLE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
-----------------------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
--------------- ----------------
Commission file number
0-23974
----------------------
CNL Income Fund XIV, Ltd.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 59-3143096
- ---------------------------- -------------------------------
(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 5-6
Item 2. Management's Discussion and Analysis
of Financial Condition and
Results of Operations 7-10
Part II
Other Information 11
CNL INCOME FUND XIV, LTD.
(A Florida Limited Partnership)
CONDENSED BALANCE SHEETS
September 30, December 31,
ASSETS 1996 1995
------------- ------------
Land and buildings on operating
leases, less accumulated
depreciation of $874,237 and
$621,352 $25,936,780 $26,189,665
Net investment in direct
financing leases 9,144,772 9,200,070
Investment in joint ventures 3,229,531 3,075,675
Cash and cash equivalents 1,503,945 1,475,738
Receivables, less allowance for
doubtful accounts of $21,000
in 1996 3,030 9,531
Prepaid expenses 13,333 3,441
Organization costs, less
accumulated amortization of
$6,099 and $4,599 3,901 5,401
Accrued rental income 1,246,999 878,583
----------- -----------
$41,082,291 $40,838,104
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 5,049 $ 3,657
Accrued and escrowed real
estate taxes payable 15,851 22,562
Distributions payable 928,132 928,130
Due to related parties 5,833 6,869
Rents paid in advance 96,383 44,956
----------- -----------
Total liabilities 1,051,248 1,006,174
Partners' capital 40,031,043 39,831,930
----------- -----------
$41,082,291 $40,838,104
=========== ===========
See accompanying notes to condensed financial statements.
CNL INCOME FUND XIV, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF INCOME
Quarter Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
---------- ---------- ---------- ----------
Revenues:
Rental income from
operating leases $ 744,018 $ 744,932 $2,210,918 $2,237,084
Earned income from
direct financing
leases 256,399 258,444 770,762 776,726
Interest and other
income 18,789 11,444 46,648 40,486
---------- ---------- ---------- ----------
1,019,206 1,014,820 3,028,328 3,054,296
---------- ---------- ---------- ----------
Expenses:
General operating and
administrative 40,271 35,269 127,272 98,882
Professional services 5,768 7,541 16,858 23,258
Bad debt expense - (1,887) - 13,089
Management fees to
related parties 9,749 9,373 29,101 28,926
Real estate taxes - 387 3,426 1,887
State and other taxes - - 18,109 14,865
Depreciation and
amortization 85,022 83,837 255,066 254,624
---------- ---------- ---------- ----------
140,810 134,520 449,832 435,531
---------- ---------- ---------- ----------
Income Before Equity in
Earnings of Joint
Ventures and Loss on
Sales of Land 878,396 880,300 2,578,496 2,618,765
Equity in Earnings of
Joint Ventures 227,910 91,988 405,009 250,789
Loss on Sales of Land - - - (66,518)
---------- ---------- ---------- ----------
Net Income $1,106,306 $ 972,288 $2,983,505 $2,803,036
========== ========== ========== ==========
Allocation of Net Income:
General partners $ 11,063 $ 9,723 $ 29,835 $ 28,030
Limited partners 1,095,243 962,565 2,953,670 2,775,006
---------- ---------- ---------- ----------
$1,106,306 $ 972,288 $2,983,505 $2,803,036
========== ========== ========== ==========
Net Income Per Limited
Partner Unit $ 0.24 $ 0.21 $ 0.66 $ 0.62
========== ========== ========== ==========
Weighted Average Number of
Limited Partner Units
Outstanding 4,500,000 4,500,000 4,500,000 4,500,000
========== ========== ========== ==========
See accompanying notes to condensed financial statements.
CNL INCOME FUND XIV, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF PARTNERS' CAPITAL
Nine Months Ended Year Ended
September 30, December 31,
1996 1995
----------------- ------------
General partners:
Beginning balance $ 70,818 $ 32,745
Net income 29,835 38,073
----------- -----------
100,653 70,818
----------- -----------
Limited partners:
Beginning balance 39,761,112 39,676,078
Net income 2,953,670 3,713,164
Distributions ($0.62 and
$0.81 per limited
partner unit, respectively) (2,784,392) (3,628,130)
----------- -----------
39,930,390 39,761,112
----------- -----------
Total partners' capital $40,031,043 $39,831,930
=========== ===========
See accompanying notes to condensed financial statements.
CNL INCOME FUND XIV, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF CASH FLOWS
Nine Months Ended
September 30,
1996 1995
----------- -----------
Increase (Decrease) in Cash and
Cash Equivalents:
Net Cash Provided by
Operating Activities $ 2,812,597 $ 2,782,609
----------- -----------
Cash Flows from Investing
Activities:
Proceeds from sales of land - 696,012
Additions to land and
buildings on operating
leases - (964,262)
Investment in direct
financing leases - (75,244)
Investment in joint ventures - (1,084,221)
----------- -----------
Net cash used in
investing activities - (1,427,715)
----------- -----------
Cash Flows from Financing
Activities:
Distributions to limited
partners (2,784,390) (2,643,751)
----------- -----------
Net cash used in
financing activities (2,784,390) (2,643,751)
----------- -----------
Net Increase (Decrease) in Cash
and Cash Equivalents 28,207 (1,288,857)
Cash and Cash Equivalents at
Beginning of Period 1,475,738 2,735,323
----------- -----------
Cash and Cash Equivalents at
End of Period $ 1,503,945 $ 1,446,466
=========== ===========
Supplemental Schedule of Non-Cash
Investing and Financing Activities:
Related parties paid certain
acquisition costs on behalf
of the Partnership $ - $ 577
=========== ===========
Distributions declared and
unpaid at end of period $ 928,132 $ 900,000
=========== ===========
See accompanying notes to condensed financial statements.
CNL INCOME FUND XIV, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Nine Months Ended September 30, 1996 and 1995
1. Basis of Presentation:
---------------------
The accompanying unaudited condensed financial statements have been
prepared in accordance with the instructions to Form 10-Q and do not
include all of the information and note disclosures required by
generally accepted accounting principles. The financial statements
reflect all adjustments, consisting of normal recurring adjustments,
which are, in the opinion of management, necessary to a fair statement
of the results for the interim periods presented. Operating results for
the quarter and nine months ended September 30, 1996, may not be
indicative of the results that may be expected for the year ending
December 31, 1996. Amounts as of December 31, 1995, included in the
financial statements, have been derived from audited financial
statements as of that date.
These unaudited financial statements should be read in conjunction with
the financial statements and notes thereto included in Form 10-K of CNL
Income Fund XIV, 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.
2. Investment in Joint Ventures:
----------------------------
In September 1996, Wood-Ridge Real Estate Joint Venture, in which the
Partnership owns a 50% interest, sold its two properties to the tenant
of these properties for $5,020,878 and received net sales proceeds of
$5,001,180, resulting in a gain to the joint venture of approximately
$261,100 for financial reporting purposes. These properties were
originally acquired by Wood-Ridge Real Estate Joint Venture in September
1994 and had a combined, total cost of approximately $4,302,500,
excluding acquisition fees and miscellaneous acquisition expenses;
therefore, the joint venture sold these properties for approximately
$698,700 in excess of their original purchase price.
In October 1996, Wood-Ridge Real Estate Joint Venture reinvested
$4,427,203 of the net sales proceeds it received from the sale of its
properties in September 1996. The remaining net sales proceeds of
$573,977 are expected to be reinvested by December 1996.
The following presents the combined, condensed financial information for
all of the Partnership's investments in joint ventures at:
September 30, December 31,
1996 1995
------------ ------------
Land and buildings
on operating leases,
less accumulated
depreciation $ 721,928 $3,882,341
Net investment in
direct financing
lease 368,386 1,792,208
Cash 24,325 687
Restricted cash 5,017,023 -
Receivables - 33,694
Prepaid expenses 390 119
Accrued rental income 44,293 149,600
Liabilities 811 1,839
Partners' capital 6,175,534 5,856,810
Revenues 544,936 706,262
Gain on sale 261,106 -
Net income 786,977 658,460
The Partnership recognized income totalling $405,009 and $250,789 for
the nine months ended September 30, 1996 and 1995, respectively, from
these joint ventures, $227,910 and $91,988 of which was earned during
the quarters ended September 30, 1996 and 1995, respectively.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
CNL Income Fund XIV, 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.
Generally, the leases are triple-net leases, with the lessee responsible for
all repairs and maintenance, property taxes, insurance and utilities. As of
September 30, 1996, the Partnership owned 52 Properties, including interests
in two Properties owned by joint ventures in which the Partnership is a co-
venturer.
Liquidity and Capital Resources
- -------------------------------
The Partnership's primary source of capital for the nine months ended
September 30, 1996 and 1995, was cash from operations (which includes cash
received from tenants, distributions from joint ventures, and interest and
other income received, less cash paid for expenses). Cash from operations was
$2,812,597 and $2,782,609 for the nine months ended September 30, 1996 and
1995, respectively. The increase in cash from operations for the nine months
ended September 30, 1996, as compared to the nine months ended September 30,
1995, is primarily a result of changes in income and expenses as discussed in
"Results of Operations" below and changes in the Partnership's working
capital.
In September 1996, Wood-Ridge Real Estate Joint Venture, a joint venture
in which the Partnership owns a 50% interest, sold its two Properties to the
tenant of these Properties for $5,020,878 and received net sales proceeds of
$5,001,180, resulting in a gain to the joint venture of approximately $261,100
for financial reporting purposes. These Properties were originally acquired
by Wood-Ridge Real Estate Joint Venture in September 1994 and had a combined,
total cost of approximately $4,302,500, excluding acquisition fees and
miscellaneous acquisition expenses; therefore, the joint venture sold these
Properties for approximately $698,700 in excess of their original purchase
price. In October 1996, Wood-Ridge Real Estate Joint Venture reinvested
$4,427,203 of the net sales proceeds it received from the sale of its
Properties in September 1996. The remaining net sales proceeds of $573,977
are expected to be reinvested by December 1996. The lease agreements for the
Properties are substantially the same as the leases relating to the
Partnership's other properties.
Currently, cash reserves and rental income from the Partnership's
Properties is invested in money market accounts or other short-term, highly
liquid investments pending the use of such funds to pay Partnership expenses
or to make distributions to partners. At September 30, 1996, the
Partnership had $1,503,945 invested in such short-term investments as compared
to $1,475,738 at December 31, 1995. The funds remaining at September 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 $1,051,248 at September 30, 1996, from $1,006,174 at December 31,
1995, primarily as the result of an increase in rents paid in advance during
the nine months ended September 30, 1996. The general partners believe that
the Partnership has sufficient cash on hand to meet its current working
capital needs.
Based primarily on cash from operations, the Partnership declared
distributions to the limited partners of $2,784,392 and $2,700,000 for the
nine months ended September 30, 1996 and 1995, respectively ($928,132 and
$900,000 for the quarters ended September 30, 1996 and 1995, respectively).
This represents distributions of $0.62 and $0.60 per unit for the nine months
ended September 30, 1996 and 1995, respectively ($0.21 and $0.20 per unit for
the quarters ended September 30, 1996 and 1995, respectively). No
distributions were made to the general partners for the quarters and nine
months ended September 30, 1996 and 1995. No amounts distributed or to be
distributed to the limited partners for the nine months ended September 30,
1996 and 1995, are required to be or have been treated by the Partnership as a
return of capital for purposes of calculating the limited partners' return on
their adjusted capital 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 nine months ended September 30, 1995, the Partnership owned
and leased 52 wholly owned Properties (including one Property in Knoxville,
Tennessee, and one Property in Dallas, Texas, which were sold in March 1995),
and during the nine months ended September 30, 1996, the Partnership owned and
leased 50 wholly owned Properties, to operators of fast-food and family-style
restaurant chains. In connection therewith, during the nine months ended
September 30, 1996 and 1995, the Partnership earned $2,981,680 and $3,013,810,
respectively, in rental income from operating leases and earned income from
direct financing leases from these Properties, $1,000,417 and $1,003,376 of
which was earned during the quarters ended September 30, 1996 and 1995,
respectively.
In addition, during the nine months ended September 30, 1996 and 1995,
the Partnership owned and leased four Properties indirectly through joint
venture arrangements (including two Properties in Wood-Ridge Real Estate Joint
Venture, which were sold in September 1996). In connection therewith, during
the nine months ended September 30, 1996 and 1995, the Partnership earned
$405,009 and $250,789, respectively, attributable to net income earned by
these joint ventures, $227,910 and $91,988 of which was earned during the
quarters ended September 30, 1996 and 1995, respectively. The increase in net
income earned by joint ventures is primarily attributable to the fact that in
September 1996, Wood-Ridge Real Estate Joint Venture, in which the Partnership
owns a 50 percent interest, recognized a gain of approximately $261,100 for
financial reporting purposes as a result of the sale of its Properties in
September 1996, as described above in "Liquidity and Capital Resources". Due
to the fact that the joint venture reinvested the majority of the net sales
proceeds in five Properties in October 1996, the Partnership does not
anticipate that the sale of the two Properties will have a material adverse
effect on operations.
Operating expenses, including depreciation and amortization expense,
were $449,832 and $435,531 for the nine months ended September 30, 1996 and
1995, respectively, of which $140,810 and $134,520 were incurred for the
quarters ended September 30, 1996 and 1995, respectively. The increase in
operating expenses during the quarter and nine months ended September 30,
1996, is primarily the result of an increase in accounting and administrative
expenses associated with operating the Partnership and its Properties and 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.
The increase in operating expenses during the nine months ended
September 30, 1996 was partially offset by the Partnership establishing an
allowance for doubtful accounts during the nine months ended September 30,
1995, of approximately $13,100 relating to past due rental amounts from the
former tenant of the Property in Akron, Ohio, which had been included in
income in prior years.
As a result of the former tenant of the Property in Akron, Ohio,
defaulting under the terms of its lease during 1994, the Partnership incurred
real estate taxes relating to this Property during the nine months ended
September 30, 1996 and 1995. Currently, the Partnership is negotiating a lease
with the franchisee operating the restaurant located on the Property on a
month-to-month basis and anticipates that the franchisee will pay a portion of
the 1996 real estate taxes.
As a result of the sale of the Properties in Knoxville, Tennessee, and
Dallas, Texas, the Partnership recognized a loss for financial reporting
purposes of $66,518 during the nine months ended September 30, 1995. The loss
was primarily due to acquisition fees and miscellaneous acquisition expenses
the Partnership had allocated to these Properties and due to accrued rental
income relating to future scheduled rent increases that the Partnership had
recorded and wrote off at the time of the sale. No wholly owned Properties
were sold by the Partnership during the nine months ended September 30, 1996.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. Inapplicable.
-----------------
Item 2. Changes in Securities. Inapplicable.
---------------------
Item 3. Defaults upon Senior Securities. Inapplicable.
-------------------------------
Item 4. Submission of Matters to a Vote of Security Holders.
---------------------------------------------------
Inapplicable.
Item 5. Other Information. Inapplicable.
-----------------
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
(a) Exhibits - None.
(b) No reports on Form 8-K were filed during the quarter ended
September 30, 1996.
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
DATED this 4th day of November, 1996.
CNL INCOME FUND XIV, 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)
