<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the balance
sheet of CNL Income Fund XIV, 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 XIV, 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> 1,419,380
<SECURITIES> 0
<RECEIVABLES> 30,556
<ALLOWANCES> 21,000
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 26,811,017
<DEPRECIATION> 789,942
<TOTAL-ASSETS> 40,828,301
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 39,852,869
<TOTAL-LIABILITY-AND-EQUITY> 40,828,301
<SALES> 0
<TOTAL-REVENUES> 2,009,122
<CGS> 0
<TOTAL-COSTS> 309,022
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,877,199
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,877,199
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,877,199
<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 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
0-23974
----------------------
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 4-5
Notes to Condensed Financial Statements 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
June 30, December 31,
ASSETS 1996 1995
----------- ------------
Land and buildings on operating
leases,less accumulated depreci-
ation of $789,942 and $621,352 $26,021,075 $ 26,189,665
Net investment in direct financing
leases 9,163,727 9,200,070
Investment in joint ventures 3,070,416 3,075,675
Cash and cash equivalents 1,419,380 1,475,738
Receivables, less allowance for
doubtful accounts of $21,000 in 1996 9,556 9,531
Prepaid expenses 15,552 3,441
Organization costs, less accumulated
amortization of $5,599 and $4,599 4,401 5,401
Accrued rental income 1,124,194 878,583
----------- ------------
$40,828,301 $ 40,838,104
=========== ============
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 3,833 $ 3,657
Accrued and escrowed real estate
taxes payable 11,723 22,562
Distributions payable 928,130 928,130
Due to related parties 2,252 6,869
Rents paid in advance 29,494 44,956
----------- ------------
Total liabilities 975,432 1,006,174
Partners' capital 39,852,869 39,831,930
----------- ------------
$40,828,301 $ 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 Six Months Ended
June 30, June 30,
1996 1995 1996 1995
---------- ---------- ---------- ----------
Revenues:
Rental income from
operating leases $ 722,724 $ 745,483 $1,466,900 $1,492,152
Earned income from
direct financing
leases 256,920 258,909 514,363 518,282
Interest and other
income 13,974 11,731 27,859 29,042
---------- ---------- ---------- ----------
993,618 1,016,123 2,009,122 2,039,476
---------- ---------- ---------- ----------
Expenses:
General operating
and administrative 43,623 34,998 87,001 63,613
Professional services 5,338 6,973 11,090 15,717
Bad debt expense - 14,976 - 14,976
Management fees to
related parties 9,569 10,006 19,352 19,553
Real estate taxes 1,713 1,500 3,426 1,500
State and other taxes 19 140 18,109 14,865
Depreciation and
amortization 85,022 85,404 170,044 170,787
---------- ---------- ---------- ----------
145,284 153,997 309,022 301,011
---------- ---------- ---------- ----------
Income Before Equity in
Earnings of Joint
Ventures and Loss on
Sale of Land 848,334 862,126 1,700,100 1,738,465
Equity in Earnings of
Joint Ventures 88,183 80,997 177,099 158,801
Loss on Sale of Land - - - (66,518)
---------- ---------- ---------- ----------
Net Income $ 936,517 $ 943,123 $1,877,199 $1,830,748
========== ========== ========== ==========
Allocation of Net Income:
General partners $ 9,365 $ 9,431 $ 18,772 $ 18,307
Limited partners 927,152 933,692 1,858,427 1,812,441
---------- ---------- ---------- ----------
$ 936,517 $ 943,123 $1,877,199 $1,830,748
========== ========== ========== ==========
Net Income Per Limited
Partner Unit $ 0.21 $ 0.21 $ 0.41 $ 0.40
========== ========== ========== ==========
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
Six Months Ended Year Ended
June 30, December 31,
1996 1995
---------------- -------------
General partners:
Beginning balance $ 70,818 $ 32,745
Net income 18,772 38,073
----------- ------------
89,590 70,818
----------- ------------
Limited partners:
Beginning balance 39,761,112 39,676,078
Net income 1,858,427 3,713,164
Distributions ($0.41 and $0.81
per limited partner unit,
respectively) (1,856,260) (3,628,130)
----------- ------------
39,763,279 39,761,112
----------- ------------
Total partners' capital $39,852,869 $ 39,831,930
=========== ============
See accompanying notes to condensed financial statements.
CNL INCOME FUND XIV, 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 $ 1,799,902 $ 1,856,463
------------ ------------
Cash Flows from Investing
Activities:
Additions to land and
buildings on operating
leases - (1,025,141)
Proceeds from sale of land - 696,012
Investment in direct
financing leases - (75,244)
Investment in joint ventures - (1,059,051)
------------ ------------
Net cash used in
investing activities - (1,463,424)
------------ ------------
Cash Flows from Financing
Activities:
Distributions to limited
partners (1,856,260) (1,743,751)
------------ ------------
Net cash used in
financing activities (1,856,260) (1,743,751)
------------ ------------
Net Decrease in Cash
and Cash Equivalents (56,358) (1,350,712)
Cash and Cash Equivalents at
Beginning of Period 1,475,738 2,735,323
------------ ------------
Cash and Cash Equivalents at
End of Period $ 1,419,380 $ 1,384,611
============ ============
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 $ 928,130 $ 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 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 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 June 1996, Wood-Ridge Real Estate Joint Venture, in which the
Partnership owns a 50% interest, entered into a purchase and sale
agreement to sell the two properties it owns to the tenant of the
properties. The closing is scheduled to take place no later than
November 1996. Wood-Ridge Real Estate Joint Venture anticipates that
proceeds received from the sale of these properties will be in excess of
the carrying value of the properties and will be reinvested in an
additional property or properties. The sale of these properties had not
occurred as of July 18, 1996.
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
June 30, 1996, the Partnership owned 54 Properties, including interests in
four 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 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 $1,799,902
and $1,856,463 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 changes in the Partnership's working capital.
In June 1996, Wood-Ridge Real Estate Joint Venture, a joint venture in
which the Partnership owns a 50% interest, entered into a purchase and sale
agreement to sell the two Properties it owns to the tenant of the Properties.
The closing is scheduled to take place no later than November 1996. Wood-
Ridge Real Estate Joint Venture anticipates that proceeds received from the
sale of these Properties will be in excess of the carrying value of the
Properties and will be reinvested in an additional property or properties.
The sale of these Properties had not occurred as of July 18, 1996.
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 June 30, 1996, the Partnership had
$1,419,380 invested in such short-term investments as compared to $1,475,738
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,
decreased to $975,432 at June 30, 1996, from $1,006,174 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 $1,856,260 and $1,800,000 for the six
months ended June 30, 1996 and 1995, respectively ($928,130 and $900,000 for
the quarters ended June 30, 1996 and 1995, respectively). This represents
distributions of $0.41 and $0.40 per unit for the six months ended June 30,
1996 and 1995, respectively ($0.21 and $0.20 per unit for the quarters ended
June 30, 1996 and 1995, respectively). 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 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 six months ended June 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 six months ended June
30, 1996 and 1995, the Partnership earned $1,981,263 and $2,010,434,
respectively, in rental income from operating leases and earned income from
direct financing leases from these Properties, $979,644 and $1,004,392 of
which was earned during the quarters ended June 30, 1996 and 1995. The
decrease in rental and earned income was primarily attributable to the
Partnership establishing an allowance for doubtful accounts of $21,000 for
past due rental amounts relating to the Property in Akron, Ohio during the
quarter and six months ended June 30, 1996. The operator remains responsible
for payment of these amounts; however, due to the current financial
difficulties the operator is experiencing, the general partners believe
collection of these amounts is doubtful. The Partnership will continue to
pursue the collection of such amounts and will record such amounts as income
if collected.
In addition, during the six months ended June 30, 1996 and 1995, the
Partnership owned and leased four Properties indirectly through joint venture
arrangements. In connection therewith, during the six months ended June 30,
1996 and 1995, the Partnership earned $177,099 and $158,801, respectively,
attributable to net income earned by these joint ventures, $88,183 and $80,997
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 attributable to the fact that in March 1995, the Partnership
invested in a joint venture, Salem Joint Venture, which became operational in
May 1995. As described above in "Liquidity and Capital Resources", Wood-Ridge
Real Estate Joint Venture has entered into a purchase and sale agreement for
the sale of two of its Properties. Although the Partnership anticipates that
net income earned by joint ventures will initially decrease after the
Properties are sold, the joint venture expects to reinvest the net sales
proceeds in additional properties subject to triple-net leases. Therefore,
the anticipated sale of the two Properties is not expected to have a material
adverse effect on operations.
Operating expenses, including depreciation and amortization expense,
were $309,022 and $301,011 for the six months ended June 30, 1996 and 1995,
respectively, of which $145,284 and $153,997 were incurred for the quarters
ended June 30, 1996 and 1995, respectively. The increase in operating
expenses during the six months ended June 30, 1996, as compared to the six
months ended June 30, 1995, 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.
As a result of the former tenant of the Property in Akron, Ohio,
defaulting under the terms of its lease during 1994, the Partnership continued
to incur real estate taxes relating to this Property. Currently, the
Partnership is negotiating a lease with a new franchisee operating the
restaurant located on the Property on a month-to-month basis. However, until
a new lease is executed for this Property, the Partnership expects to continue
to incur real estate taxes relating to this Property. The increase in
operating expenses was partially offset by the Partnership establishing an
allowance for doubtful accounts during the quarter and six months ended June
30, 1995, of approximately $15,000 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 sale of the Properties in Knoxville, Tennessee, and
Dallas, Texas, the Partnership recognized a loss for financial reporting
purposes of $66,518 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 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 Properties were sold during the six
months ended June 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
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 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)
