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, 1998
------------------------
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
0-26216
CNL Income Fund XV, Ltd.
(Exact name of registrant as specified in its charter)
Florida 59-3198888
(State or other jurisdiction (I.R.S. Employer
of incorporation or organiza- Identification No.)
tion)
400 E. South Street
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
<PAGE>
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 6-7
Part II
Other Information 8
<PAGE>
CNL INCOME FUND XV, LTD.
(A Florida Limited Partnership)
CONDENSED BALANCE SHEETS
March 31, December 31,
ASSETS 1998 1997
----------- ------------
Land and buildings on operating
leases, less accumulated
depreciation of $862,991 and
$801,601 $22,083,748 $22,145,138
Net investment in direct
financing leases 9,240,776 9,264,307
Investment in joint ventures 2,554,758 2,561,816
Cash and cash equivalents 1,802,532 1,614,708
Receivables 1,539 26,888
Prepaid expenses 10,418 7,633
Organization costs, less
accumulated amortization
of $8,048 and $7,548 1,952 2,452
Accrued rental income 1,530,551 1,422,781
----------- -----------
$37,226,274 $37,045,723
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 4,500 $ 6,991
Escrowed real estate taxes
payable 4,329 6,158
Distributions payable 1,000,000 800,000
Due to related parties 10,954 4,311
Rents paid in advance 135,626 4,860
----------- -----------
Total liabilities 1,155,409 822,320
Partners' capital 36,070,865 36,223,403
----------- -----------
$37,226,274 $37,045,723
=========== ===========
See accompanying notes to condensed financial statements.
1
<PAGE>
CNL INCOME FUND XV, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF INCOME
Quarter Ended
March 31,
1998 1997
---------- ----------
Revenues:
Rental income from operating leases $ 631,711 $ 630,718
Earned income from direct financing
leases 263,229 265,835
Interest and other income 20,186 14,366
---------- ----------
915,126 910,919
---------- ----------
Expenses:
General operating and administrative 31,595 31,804
Professional services 4,801 5,138
Management fees to related parties 8,770 8,724
State and other taxes 20,143 19,960
Depreciation and amortization 62,100 62,069
---------- ----------
127,409 127,695
---------- ----------
Income Before Equity in Earnings of
Joint Ventures 787,717 783,224
Equity in Earnings of Joint Ventures 59,745 57,636
---------- ----------
Net Income $ 847,462 $ 840,860
========== ==========
Allocation of Net Income:
General partners $ 8,475 $ 8,409
Limited partners 838,987 832,451
---------- ----------
$ 847,462 $ 840,860
========== ==========
Net Income Per Limited Partner Unit $ 0.21 $ 0.21
========== ==========
Weighted Average Number of Limited
Partner Units Outstanding 4,000,000 4,000,000
========== ==========
See accompanying notes to condensed financial statements
2
<PAGE>
CNL INCOME FUND XV, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF PARTNERS' CAPITAL
Quarter Ended Year Ended
March 31, December 31,
1998 1997
------------- -----------
General partners:
Beginning balance $ 117,411 $ 83,062
Net income 8,475 34,349
----------- -----------
125,886 117,411
----------- -----------
Limited partners:
Beginning balance 36,105,992 35,905,436
Net income 838,987 3,400,556
Distributions ($0.25 and
$0.80 per limited partner
unit, respectively) (1,000,000) (3,200,000)
----------- -----------
35,944,979 36,105,992
----------- -----------
Total partners' capital $36,070,865 $36,223,403
=========== ===========
See accompanying notes to condensed financial statements.
3
<PAGE>
CNL INCOME FUND XV, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF CASH FLOWS
Quarter Ended
March 31,
1998 1997
---------- ----------
Increase (Decrease) in Cash and
Cash Equivalents:
Net Cash Provided by Operating
Activities $ 987,824 $ 868,261
---------- ----------
Cash Flows from Investing
Activities:
Return of capital from
joint venture - 54,074
---------- ----------
Net cash provided by
investing activities - 54,074
---------- ----------
Cash Flows from Financing
Activities:
Distributions to limited
partners (800,000) (880,000)
---------- ----------
Net cash used in financing
activities (800,000) (880,000
---------- ----------
Net Increase in Cash and Cash
Equivalents 187,824 42,335
Cash and Cash Equivalents at
Beginning of Quarter 1,614,708 1,536,163
---------- ----------
Cash and Cash Equivalents at
End of Quarter $1,802,532 $1,578,498
========== ==========
Supplemental Schedule of Non-Cash
Financing Activities:
Distributions declared and
unpaid at end of quarter $1,000,000 $ 800,000
========== ==========
See accompanying notes to condensed financial statements.
4
<PAGE>
CNL INCOME FUND XV, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters Ended March 31, 1998 and 1997
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, 1998, may not be indicative of the results
that may be expected for the year ending December 31, 1998. Amounts as
of December 31, 1997, 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 XV, Ltd. (the "Partnership") for the year ended December
31, 1997.
5
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
CNL Income Fund XV, Ltd. (the "Partnership") is a Florida limited
partnership that was organized on September 2, 1993, 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 lessee responsible for all repairs and
maintenance, property taxes, insurance and utilities. As of March 31, 1998, the
Partnership owned 49 Properties, including interests in six Properties owned by
a joint venture in which the Partnership is a co-venturer and one Property owned
with affiliates as tenants-in-common.
Liquidity and Capital Resources
The Partnership's primary source of capital for the quarters ended
March 31, 1998 and 1997, 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 $987,824 and
$868,261 for the quarters ended March 31, 1998 and 1997, respectively. The
increase in cash from operations for the quarter ended March 31, 1998, as
compared to the quarter ended March 31, 1997, is primarily a result of changes
in income and expenses as described in "Results of Operations" below and 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 the partners. At March 31,
1998, the Partnership had $1,802,532 invested in such short-term investments, as
compared to $1,614,708 at December 31, 1997. The increase in cash and cash
equivalents for the quarter ended March 31, 1998, is primarily attributable to
an increase in rents paid in advance at March 31, 1998, as compared to December
31, 1997. The funds remaining at March 31, 1998, after 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 $1,155,409 at March 31, 1998, from $822,320 at December 31, 1997,
primarily as a result of the Partnership's accruing a special distribution of
accumulated, excess operating reserves payable to the limited partners of
$200,000 at March 31, 1998. The increase at March 31, 1998 was also partially a
result of an increase in rents paid in advance at March 31, 1998, as compared to
December 31, 1997. The general partners believe that the Partnership has
sufficient cash on hand to meet its current working capital needs.
6
<PAGE>
Liquidity and Capital Resources - Continued
Based on cash from operations, and for the quarter ended March 31,
1998, accumulated excess operating reserves, the Partnership declared
distributions to the limited partners of $1,000,000 and $800,000 for the
quarters ended March 31, 1998 and 1997, respectively. This represents
distributions of $0.25 and $0.20 per unit for the quarters ended March 31, 1998
and 1997, respectively. No distributions were made to the general partners for
the quarters ended March 31, 1998 and 1997. No amounts distributed to the
limited partners for the quarters ended March 31, 1998 and 1997, 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.
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 each of the quarters ended March 31, 1998 and 1997, the
Partnership owned and leased 42 wholly owned Properties to operators of
fast-food and family-style restaurant chains. In connection therewith, during
the quarters ended March 31, 1998 and 1997, the Partnership earned $894,940 and
$896,553, respectively, in rental income from operating leases and earned income
from direct financing leases from these Properties.
For the quarters ended March 31, 1998 and 1997, the Partnership also
owned and leased six Properties indirectly through one joint venture arrangement
and one Property as tenants-in-common with affiliates of the general partners.
In connection therewith, during the quarters ended March 31, 1998 and 1997, the
Partnership earned $59,745 and $57,636, respectively, attributable to net income
earned by these joint ventures.
Operating expenses, including depreciation and amortization expense,
were $127,409 and $127,695 for the quarter ended March 31, 1998 and 1997,
respectively.
7
<PAGE>
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 March 31, 1998.
8
<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 8th day of May, 1998.
CNL INCOME FUND XV, 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 XV, Ltd. at March 31, 1998, and its statement of income
for the three months then ended and is qualified in its entirety by reference to
the Form 10Q of CNL Income Fund XV, Ltd. for the three months ended March 31,
1998.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,802,532
<SECURITIES> 0
<RECEIVABLES> 1,539
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 22,946,739
<DEPRECIATION> 862,991
<TOTAL-ASSETS> 37,226,274
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 36,070,865
<TOTAL-LIABILITY-AND-EQUITY> 37,226,274
<SALES> 0
<TOTAL-REVENUES> 915,126
<CGS> 0
<TOTAL-COSTS> 127,409
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 847,462
<INCOME-TAX> 0
<INCOME-CONTINUING> 847,462
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 847,462
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Due to the nature of its industry, CNL Income Fund XV, Ltd. has an unclassified
balance sheet; therefore, no values are shown above for current assets and
current liabilities.
</FN>
</TABLE>
