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, 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
0-26218
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CNL Income Fund XVI, Ltd.
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(Exact name of registrant as specified in its charter)
Florida 59-3198891
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
450 South Orange Ave.
Orlando, Florida 32801-3336
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(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
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 5-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-13
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 13
Part II
Other Information 14-15
<PAGE>
CNL INCOME FUND XVI, LTD.
(A Florida Limited Partnership)
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------------ -------------------
<S> <C>
ASSETS
Land and buildings on operating leases, less
accumulated depreciation and allowance for loss on land and
buildings $ 28,026,312 $ 29,804,331
Net investment in direct financing leases 4,501,542 4,540,067
Investment in joint ventures 2,145,437 1,650,860
Cash and cash equivalents 1,345,021 1,637,753
Lease costs, less accumulated amortization of $4,391 and
$1,348, respectively 35,532 24,518
Receivables, less allowance for doubtful accounts
of $370,136 and $90,894, respectively 178,855 287,757
Prepaid expenses 10,743 13,121
Accrued rental income, less allowance for doubtful accounts of
$16,802 and $6,098, respectively 1,811,857 1,752,566
------------------ -------------------
$ 38,055,299 $ 39,710,973
================== ===================
LIABILITIES AND PARTNERS' CAPITAL
Construction costs payable $ 150,000 $ 150,000
Accounts payable 32,656 131,113
Accrued and escrowed real estate taxes payable 18,788 5,860
Distributions payable 900,000 900,000
Due to related parties 130,663 73,853
Rents paid in advance and deposits 38,827 43,215
------------------ -------------------
Total liabilities 1,270,934 1,304,041
Partners' capital 36,784,365 38,406,932
------------------ -------------------
$ 38,055,299 $ 39,710,973
================== ===================
See accompanying notes to condensed financial statements.
<PAGE>
CNL INCOME FUND XVI, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF INCOME
Quarter Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
------------- -------------- -------------- --------------
Revenues:
Rental income from operating leases $ 717,462 $ 774,026 $ 2,336,124 $ 2,378,810
Adjustments to accrued rental income -- -- (93,287 ) --
Earned income from direct financing
leases 62,512 177,275 294,302 444,836
Interest and other income 11,005 13,754 67,613 44,946
------------- -------------- -------------- --------------
790,979 965,055 2,604,752 2,868,592
------------- -------------- -------------- --------------
Expenses:
General operating and administrative 57,357 47,539 167,935 125,996
Bad debt expense -- -- 33,532 --
Professional services 26,891 6,418 69,739 33,478
Management fees to related party 7,965 9,200 26,251 27,313
Real estate taxes 20,618 20,028 57,784 50,048
State and other taxes 182 -- 27,356 24,356
Depreciation and amortization 146,758 147,999 436,629 441,086
Transaction costs -- 62,648 69,930 178,858
------------- -------------- -------------- --------------
259,771 293,832 889,156 881,135
------------- -------------- -------------- --------------
Income Before Equity in Earnings of
Joint Ventures, Loss on Sale of Land and
Building and Provision for Loss on Land
Building 531,208 671,223 1,715,596 1,987,457
Equity in Earnings of Joint Ventures 51,942 39,379 130,492 119,091
Gain on Sale of Land and Building 88,661 -- 88,661 --
Provision for Losses on Land and Buildings -- -- (857,316 ) (84,478 )
------------- -------------- -------------- --------------
Net Income $ 671,811 $ 710,602 $ 1,077,433 $ 2,022,070
============= ============== ============== ==============
Allocation of Net Income:
General partners $ 6,718 $ 7,106 $ 15,994 $ 20,788
Limited partners 665,093 703,496 1,061,439 2,001,282
------------- -------------- -------------- --------------
$ 671,811 $ 710,602 $ 1,077,433 $ 2,022,070
============= ============== ============== ==============
Net Income Per Limited Partner Unit $ 0.15 $ 0.16 $ 0.24 $ 0.44
============= ============== ============== ==============
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.
<PAGE>
CNL INCOME FUND XVI, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF PARTNERS' CAPITAL
Nine Months Ended Year Ended
September 30, December 31,
2000 1999
------------------------- -----------------------
General partners:
Beginning balance $ 160,017 $ 131,300
Net income 15,994 28,717
------------------------- -----------------------
176,011 160,017
------------------------- -----------------------
Limited partners:
Beginning balance 38,246,915 39,060,624
Net income 1,061,439 2,786,291
Distributions ($0.60 and $0.80 per limited
partner unit, respectively) (2,700,000 ) (3,600,000 )
------------------------- -----------------------
36,608,354 38,246,915
------------------------- -----------------------
Total partners' capital $ 36,784,365 $ 38,406,932
========================= =======================
See accompanying notes to condensed financial statements.
<PAGE>
CNL INCOME FUND XVI, LTD.
(A Florida Limited Partnership)
CONDENSED STATEMENTS OF CASH FLOWS
Nine Months Ended
September 30,
2000 1999
----------------- ----------------
Increase (Decrease) in Cash and Cash Equivalents
Net Cash Provided by Operating Activities $ 2,345,568 $2,478,838
----------------- ----------------
Cash Flows from Investing Activities:
Proceeds from sale of land and building 575,778 --
Investment in joint ventures (500,021 ) (158,512 )
Payment of lease costs (14,057 ) (11,809 )
----------------- ----------------
Net cash used in investing activities 61,700 (170,321 )
----------------- ----------------
Cash Flows from Financing Activities:
Distributions to limited partners (2,700,000 ) (2,700,000 )
----------------- ----------------
Net cash used in financing activities (2,700,000 ) (2,700,000 )
----------------- ----------------
Net Decrease in Cash and Cash Equivalents (292,732 ) (391,483 )
Cash and Cash Equivalents at Beginning of Period 1,637,753 1,603,589
----------------- ----------------
Cash and Cash Equivalents at End of Period $ 1,345,021 $1,212,106
================= ================
Supplemental Schedule of Non-Cash Investing and
Financing Activities:
Construction costs incurred and unpaid at end
of period $ 150,000 $ 150,000
================= ================
Distributions declared and unpaid at end of
period $ 900,000 $ 900,000
================= ================
See accompanying notes to condensed financial statements.
</TABLE>
<PAGE>
CNL INCOME FUND XVI, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Nine Months Ended September 30, 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 and nine months ended September 30, 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 XVI, Ltd. (the "Partnership") for the year ended December
31, 1999.
2. Land and Buildings on Operating Leases:
Land and buildings on operating leases consisted of the following at:
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
-------------------- -------------------
<S> <C>
Land $ 14,757,273 $ 15,034,850
Buildings 16,814,469 17,540,422
-------------------- -------------------
31,571,742 32,575,272
Less accumulated depreciation (2,822,349 ) (2,504,684 )
-------------------- -------------------
28,749,393 30,070,588
Less allowance for loss on land and
buildings (723,081 ) (266,257 )
-------------------- -------------------
$ 28,026,312 $ 29,804,331
==================== ===================
</TABLE>
At December 31, 1999, the Partnership had established an allowance for
loss on building of $266,257 relating to its Long John Silver's
property located in Celina, Ohio. The tenant of this property filed for
bankruptcy and discontinued the payment of rents. The allowance
represented the difference between the net carrying value of the
property as of December 31, 1999 and the estimated of net realizable
value of the property.
<PAGE>
CNL INCOME FUND XVI, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Nine Months Ended September 30, 2000 and 1999
2. Land and Buildings on Operating Leases - Continued:
During the nine months ended September 30, 2000, the Partnership
established an allowance for loss on land and building of $456,824
relating to its Boston Market property located in St. Cloud, Minnesota.
The tenant for this property filed for bankruptcy and discontinued the
payment of rents. The allowance represented the difference between the
net carrying value of the property at September 30, 2000 and the
estimated net realizable value for the property.
In addition, during the nine months ended September 30, 2000, the
Partnership established an allowance for loss on land and building of
$400,492 relating to its Boston Market property in Columbia Heights,
Minnesota. The tenant for this property filed for bankruptcy and
discontinued the payment of rents. In September 2000, the Partnership
sold its property in Columbia Heights, Minnesota, to a third party for
$584,000 and received net sales proceeds of approximately $575,800,
resulting in a gain of approximately $88,700 for the financial
reporting purposes.
3. Investment in Joint Ventures:
In June 2000, the Partnership used the majority of the net sales
proceeds received from the 1999 sale of the property in Lawrence,
Kansas, to invest in a joint venture arrangement, TGIF Pittsburgh Joint
Venture, with CNL Income Fund VII, Ltd., CNL Income Fund XV, Ltd., and
CNL Income Fund XVIII, Ltd., each a Florida limited partnership and an
affiliate of the general partners, to purchase and hold one restaurant
property. The Partnership accounts for its investment using the equity
method since the Partnership shares control with affiliates. As of
September 30, 2000, the Partnership owned a 19.72% interest in the
profits and losses of the joint venture.
<PAGE>
CNL INCOME FUND XVI, LTD.
(A Florida Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Quarters and Nine Months Ended September 30, 2000 and 1999
3. Investment in Joint Ventures - Continued:
The following presents the combined, condensed financial information
for the joint ventures and the two properties held as tenants-in-common
with affiliates at:
<TABLE>
<CAPTION>
September 30, 2000 December 31, 1999
------------------- -------------------
<S> <C>
Land and buildings on operating leases,
less accumulated depreciation $ 5,715,422 $ 3,240,248
Cash 23,951 7,963
Prepaid expenses 578 581
Accrued rental income 141,056 100,220
Liabilities 14,427 20,919
Partners' capital 5,866,580 3,328,093
Revenues 362,069 386,985
Net income 297,697 317,252
</TABLE>
The Partnership recognized income totaling $130,492 and $119,091 during
the nine months ended September 30, 2000 and 1999, respectively, from
these joint ventures and the two properties held as tenants-in-common
with affiliates, of which $51,942 and $39,379 was earned during the
quarters ended September 30, 2000 and 1999, respectively.
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 XVI, 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 restaurant properties, as well as land 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 generally triple-net leases, with the lessee responsible for all repairs and
maintenance, property taxes, insurance and utilities. As of September 30, 2000,
the Partnership owned 43 Properties, which included interests in two Properties
owned through joint venture arrangements 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 nine months ended
September 30, 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
$2,345,568 and $2,478,838 for the nine months ended September 30, 2000 and 1999,
respectively. The decrease in cash from operations for the nine months ended
September 30, 2000, as compared to the nine months ended September 30, 1999, was
primarily a result of changes in revenues and expenses as described below in
"Results of Operations" and changes in the Partnership's working capital.
Other sources and uses of capital included the following nine months
ended September 30, 2000.
In June 2000, the Partnership used the majority of the net sales
proceeds it received from the 1999 sale of the Property in Lawrence, Kansas, to
invest in into a joint venture arrangement, TGIF Pittsburgh Joint Venture, with
CNL Income Fund VII, Ltd., CNL Income Fund XV, Ltd. and CNL Income Fund XVIII,
Ltd., each a Florida limited partnership and an affiliate of the general
partners, to hold one restaurant Property. As of September 30, 2000, the
Partnership had contributed $500,000 for a 19.72% interest in the profits and
losses of the joint venture.
In September 2000, the Partnership sold its Property in Columbia
Heights, Minnesota, to a third party for $584,000 and received net sales
proceeds of approximately $575,800, resulting in a gain of approximately $88,700
for financial reporting purposes. The Partnership intends to reinvest the
majority of the net sale proceeds in an additional Property. The Partnership
will distribute amounts sufficient to enable the limited partners to pay federal
and state income taxes, if any (at a level reasonably assumed by the general
partners), resulting from the sale.
Currently, rental income from the Partnership's Properties and net
sales proceeds from the sale of Properties, pending reinvestment in an
additional Property, are invested in money market accounts or other short-term,
highly liquid investments, such as demand deposit accounts at commercial banks,
money market accounts and certificates of deposit 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 September 30, 2000, the
Partnership had $1,345,021 invested in such short-term investments, as compared
to $1,637,753 at December 31, 1999. The funds remaining at September 30, 2000,
after payment of distributions for the quarter ended September 30, 2000, and
other liabilities will be used to meet the Partnership's working capital and
other needs.
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.
Total liabilities of the Partnership, including distributions payable,
decreased to $1,270,934 at September 30, 2000, from $1,304,041 at December 31,
1999. The decrease in liabilities was primarily a result of a decrease in
accounts payable at September 30, 2000, as compared to December 31, 1999. The
decrease in liabilities was partially offset by an increase in accrued and
escrowed real estate taxes payable and in amounts due to related parties at
September 30, 2000, as compared to December 31, 1999. The general partners
believe that the Partnership has sufficient cash on hand to meet its working
capital needs.
The Partnership generally distributes cash from operations remaining
after the payment of operating expenses of the Partnership. Based on current and
anticipated future cash from operations, the Partnership declared distributions
to limited partners of $2,700,000 for each of the nine months ended September
30, 2000 and 1999 ($900,000 for each of the quarters ended September 30, 2000
and 1999). This represents distributions of $0.60 per unit for each of the nine
months ended September 30, 2000 and 1999 ($0.20 per unit for each applicable
quarter). No distributions were made to the general partners for the quarters
and nine months ended September 30, 2000 and 1999. No amounts distributed to the
limited partners for the nine months ended September 30, 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.
Long-Term Liquidity
The Partnership has no long-term debt or other long-term liquidity
requirements.
<PAGE>
Results of Operations
During the nine months ended September 30, 1999, the Partnership owned
and leased 41 wholly owned Properties (which included one Property which was
sold in November 1999) and during the nine months ended September 30, 2000, the
Partnership owned and leased 40 wholly owned Properties (which included one
Property which was sold in September 2000) to operators of fast-food and
family-style restaurant chains. In connection therewith, during the nine months
ended September 30, 2000 and 1999, the Partnership earned $2,537,139 and
$2,823,646, respectively, in rental income from operating leases (net of
adjustments to accrued rental income) and earned income from direct financing
leases from these Properties, $779,974 and $951,301 of which was earned during
the quarters ended September 30, 2000 and 1999, respectively. The decrease in
rental and earned income during the quarter and nine months ended September 30,
2000 was partially attributable to a decrease in rental and earned income of
approximately $173,600 and $268,300 during the quarter and nine months ended
September 30, 2000, respectively, due to the fact that during the quarter and
nine months ended September 30, 2000, the Partnership established an allowance
for doubtful accounts for past due rental amounts relating to several Denny's
Properties in accordance with the Partnership's policy. The general partners
will continue to pursue collection of past due rental amounts relating to these
Properties and will recognize such amounts as income if collected.
In addition, the decrease in rental and earned income during the
quarter and nine months ended September 30, 2000, was partially attributable to
the fact that in October 1998, the tenant of three Boston Market Properties
filed for bankruptcy and in June 2000, rejected the lease of one of its
Properties, vacated the Property, and discontinued making rental payments to the
Partnership. As a result of the tenant vacating the Property, rental and earned
income decreased by approximately $29,200 during the quarter and nine months
ended September 30, 2000. In addition, the Partnership reversed approximately
$57,100 of accrued rental income during the nine months ended September 30,
2000, relating to the Property whose lease was rejected. The accrued rental
income was the accumulated amount of non-cash accounting adjustments previously
recorded in order to recognize future scheduled rent increases as income evenly
over the term of this lease. The general partners are currently seeking either a
new tenant or purchaser for this Property. The Partnership will not recognize
any rental or earned income from this Property until a new tenant is located or
until the Property is sold and the proceeds are reinvested in an additional
Property. In September 2000, the tenant assumed and affirmed its one remaining
lease and the Partnership has continued to receive rental payments relating to
this lease.
Rental and earned income continued to remain at reduced amounts during
the quarters and nine months ended September 30, 2000 and 1999, due to the fact
that in November 1998, the tenant of the Boston Market Properties, as described
above, had vacated one additional Property located in Columbia Heights,
Minnesota and discontinued making rental payments. As a result of the rejection,
the Partnership did not recognize any rental and earned income relating to this
Property during the quarter and nine months ended September 30, 2000 and 1999.
In September 2000 the Partnership sold this Property in Columbia Heights,
Minnesota as described in "Capital Resources".
Rental and earned income also decreased during the quarter and nine
months ended September 30, 2000, as compared to the quarter and nine months
ended September 30, 1999, due to the fact that during the quarter and nine
months ended September 30, 2000, the Partnership reversed accrued rental income
of approximately $36,200 relating to the Property in Mesquite, Texas, to adjust
the carrying value of the Property to the estimated net realizable value of the
Property.
The decrease in rental and earned income during the quarter and nine
months ended September 30, 2000, was partially offset by an increase in rental
and earned income of approximately $16,100 and $51,000 due to the fact that in
August 1997, the Partnership began receiving rental payments from the new tenant
relating to the Property in Las Vegas, Nevada, for which the original tenant had
defaulted during 1998. The increase in rental and earned income during the nine
months ended September 30, 2000 was partially offset by a decrease of
approximately $8,300 due to the fact that during the nine months ended September
30, 2000, the Partnership established an allowance for doubtful accounts for
past due rental amounts in accordance with the Partnership's policy. The general
partners will continue to pursue collection of past due rental amounts and will
recognize such amounts as income when collected.
The decrease in rental and earned income during the nine months ended
September 30, 2000 was partially offset by an increase in rental and earned
income of approximately $34,100 due to the fact that during the nine months
ended September 30, 2000, the Partnership collected and recognized as income
past due rental amounts received from Long John Silver's, Inc., which filed for
bankruptcy during 1998 and rejected the leases relating to two of the three
Properties it leased. As of September 30, 2000, the Partnership had entered into
new leases, each with a new tenant, for the two Properties whose leases had been
rejected. As a result of re-leasing these Properties, rental and earned income
increased by approximately $16,100 and $43,000 during the quarter and nine
months ended September 30, 2000, respectively. In 1999, Long John Silver's, Inc.
assumed and affirmed its one remaining lease, and the Partnership has continued
to receive rental payments relating to this lease.
During the quarter and nine months ended September 30, 2000 and 1999,
the Partnership owned and leased two Properties with affiliates of the general
partners as tenants-in-common and one Property indirectly through a joint
venture arrangement. During the nine months ended September 30, 2000, the
Partnership owned and leased one additional Property indirectly, as
tenants-in-common, with affiliates of the general partners. In connection
therewith, during the nine months ended September 30, 2000 and 1999, the
Partnership earned $130,492 and $119,091, respectively, attributable to net
income earned by these joint ventures, $51,942 and $39,379 of which was earned
during the quarters ended September 30, 2000 and 1999, respectively. The
increase was attributed to the fact that in June 2000, the Partnership invested
in a Property in Lawrence, Kansas, as tenants-in-common, with affiliates of the
general partners, as described above in "Capital Resources."
Operating expenses, including depreciation and amortization expense,
were $889,156 and $881,135 during the nine months ended September 30, 2000 and
1999, respectively, $259,771 and $293,832 of which were incurred during the
quarters ended September 30, 2000 and 1999, respectively. The increase in
operating expenses during the nine months ended September 30, 2000, as compared
to September 30, 1999, was partially attributable to the fact that during the
quarter and nine months ended September 30, 2000, the Partnership recorded bad
debt expense of approximately $33,500 relating to past due rental amounts
relating to the Property in Las Vegas, Nevada, in accordance with the
Partnership's policy. The general partners will continue to pursue collection of
these past due rental amounts and will record such amounts as income when
collected. The decrease in operating expense during the quarter ended September
30, 2000, as compared to the quarter ended September 30, 1999, was partially
offset by, and the increase in operating expenses during the nine months ended
September 30, 2000, as compared to the nine months ended September 30, 1999, was
attributable to an increase in administrative expenses for servicing the
Partnership and its Properties. In addition, the Partnership incurred legal fees
relating to Properties for which the Partnership established an allowance for
doubtful accounts, as a result of the Partnership pursuing collection effects
related to the past due rental amounts.
The decrease in operating expenses during the quarter ended September
30, 2000, as compared to the quarter ended September 30, 1999, was partially
attributable to, and the increase in operating expenses during the nine months
ended September 30, 2000, as compared to the nine months ended September 30,
1999, was partially offset by, the fact that the Partnership incurred less
transaction costs related 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."
During the nine months ended September 30, 2000, the Partnership
recorded an allowance for loss on land and building of $400,492 relating to its
Property in Columbia Heights, Minnesota. The tenant of this Property filed for
bankruptcy and discontinued the payment of rents. During the quarter and nine
months ended September 30, 2000, the Partnership sold the vacant Property, as
described above in "Capital Resources," resulting in a gain of approximately
$88,700 for financial reporting purposes. No Properties were sold during the
quarter and nine months ended September 30, 1999.
During the nine months ended September 30, 2000, the Partnership
recorded an allowance for loss on land and building of $456,824 relating to the
Property in St. Cloud Minnesota. The tenant of this Property filed for
bankruptcy in October 1998, discontinued payment of rents and vacated the
Property. The allowance represented the difference between the carrying value of
the Property at September 30, 2000 and the estimated net realizable value of the
Property at September 30, 2000. During the nine months ended September 30, 1999,
the Partnership recorded a provision for loss on building in the amount of
$84,478 for financial reporting purposes relating to a Property in Lawrence,
Kansas, the lease for which was rejected by the tenant. The tenant of this
Property filed for bankruptcy and discontinued the payments of rents to the
Partnership. The allowance represented the difference between the carrying value
of the Property at September 30, 1999 and the estimated net realizable value for
the Property. The Partnership sold this Property in November 1999.
<PAGE>
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.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. Inapplicable.
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 XVI, Ltd. (Included as Exhibit 3.2 to
Registration Statement No. 33-69968-01 on Form S-11
and incorporated herein by reference.)
4.1 Affidavit and Certificate of Limited Partnership of
CNL Income Fund XVI, Ltd. (Included as Exhibit 3.2 to
Registration Statement No. 33-69968-01 on Form S-11
and incorporated herein by reference.)
4.2 Amended and Restated Agreement of Limited Partnership
of CNL Income Fund XVI, Ltd. (Included as Exhibit 4.2
to Form 10-K filed with the Securities and Exchange
Commission on March 30, 1995, and incorporated herein
by reference.)
10.1 Management Agreement between CNL Income Fund XVI,
Ltd. and CNL Investment Company (Included as Exhibit
10.1 to Form 10-K filed with the Securities and
Exchange Commission on March 30, 1995, 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.)
<PAGE>
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
No reports on Form 8-K were filed during the quarter ended
September 30, 2000.
<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 13th day of November, 2000.
CNL INCOME FUND XVI, 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)
